Corporate ventures that use real options logic in decision making tend to keep total
investment low in order to minimize the downside risk of a project.
The difference between the market value and book value of a firm is its social capital.
Rivalry is most intense when there are high exit barriers and high industry growth.
The decline stage of the industry life cycle stage is inevitably followed by death.
When firms diversify into related businesses, the primary potential benefits come from
horizontal relationships, which are businesses sharing intangible and tangible resources.
Dell lost its competitive advantage by 2009 in part because it placed its efforts on
operational excellence to the exclusion of reinvention, according to Inder Sidhu.
Behavioral controls involve the ability to respond effectively to environmental change.
Venture capital funding for entrepreneurial ventures is usually available only after the
start-up has become a going concern and established a track record.
One of the most important elements in a good employee is his or her attitude. Firms
should follow the adage: hire for attitude, train for skill.
A potential pitfall of a focus strategy is that over time the cost advantages in a narrow
market niche can erode, leaving the company with little profit.
A worldwide product division structure is used when global strategies require that each
division be responsible for overall efficiency and performance.
The primary means by which a firm can diversify are __________, _________, and
________.
A. mergers and acquisitions; differentiation; overall cost leadership
B. mergers and acquisitions; joint ventures and strategic alliances; internal development
C. joint ventures and strategic alliances; integration of value chain activities; acquiring
human capital
D. mergers and acquisitions; internal development; differentiation
In choosing sides concerning CEO duality, two schools of thought exist. Which of the
following would not be a consideration for the Agency Theory school of thought?
A. CEO duality complicates the issue of CEO succession.
B. CEO duality reinforces popular doubts about the legitimacy of the system as a
whole.
C. CEO duality can create conflicts of interest that can negatively affect the interests of
the shareholders.
D. Firm performance always is improved under CEO duality.
Firms following a global strategy strive to offer __________ products and services as
well as locate manufacturing, Research and Development, and marketing activities in a
limited number of locations.
A. widely differentiated
B. more expensive local
C. internationally differentiated
D. standardized
Which of the following is an advantage of a functional type of organizational structure?
A. Decentralized decision-making enhances an organization-wide perspective across
functions.
B. It facilitates the development of general management talent.
C. Pooling of specialists enhances coordination and control.
D. It is easy to establish uniform performance standards.
Effective short-term objectives should ______________ and _____________.
A. be specific; measurable
B. be achievable; not challenging
C. be motivating; not limiting
D. be time defined; not limiting
A supplier group would be most powerful when _________.
A. there are many suppliers
B. there are few substitute products
C. there is a low differentiation of products supplied
D. there is a high threat of backward integration by the buyers
Which of the following is considered to be an advantage of a matrix structure?
A. the layering of matrices
B. increased clarity in reporting relationships
C. increased responsiveness to the market
D. fewer power struggles and reduced conflict
On average, approximately what percentage of corporate ventures reaches profitability
within six years?
A. 80 percent
B. 65 percent
C. 50 percent
D. 35 percent
Most organizations with strong cultures and a sound system of rewards and incentives
can eventually internalize boundaries rather than use explicit rules and regulations.
Which of the following is not a technique for moving in that direction?
A. Hire people that identify with the dominant values of the organization.
B. Develop managerial role models.
C. Minimize training and indoctrination.
D. Align reward systems with organizational goals and objectives.
According to author, Jeffrey Pfeffer, which of the following is not an advantage of
teams?
A. Teams interact so closely and therefore coordination and integration becomes
unnecessary.
B. Teams substitute peer-based control for hierarchical control of work.
C. Teams often develop more creative solutions, because they share.
D. Teams permit the absorption of administrative tasks previously performed by
specialists.
The creation of knowledge assets is typically characterized by ____________.
A. high upfront costs and subsequent high variable costs
B. high fixed costs and high variable costs
C. high upfront costs and low variable costs
D. low upfront costs and high variable costs
The benefits gained by firms that are the first to enter new markets, establish brand
identity, and/or adopt new technologies are known as _____________.
A. competitive aggressiveness
B. technological capabilities
C. first mover advantages
D. breakthrough innovations
__________ entail the creation of a third-party legal entity, whereas __________ do
not.
A. Licensing agreements; joint ventures
B. Joint ventures; strategic alliances
C. Strategic alliances; joint ventures
D. Franchising agreements; strategic alliances
The bargaining power of suppliers is enhanced under the following market condition:
A. no threat of forward integration
B. low differentiation of the supplier products
C. greater availability of substitute products
D. dominance by a few suppliers
In principal-principal conflicts (conflicts between controlling shareholders and minority
shareholders), the ownership (of equity) is _____________.
A. widely dispersed
B. controlled almost completely by management
C. concentrated
D. often held by employee stock ownership programs