A global strategy embraces the theme “think global, act global,” whereas a
multidomestic strategy relies more on a “think local, act local” mentality. True or false?
Explain.
The attractiveness test is the most important test for determining whether diversification
into a new business is likely to result in 1 + 1 = 3 increases in shareholder value (as
opposed to simply a 1 + 1 = 2 type of increase). True or false? Justify and explain your
answer.
An organization’s strategic plan consists of the actions which management plans to take
in the near future. True or false? Explain and justify your answer.
In determining the various strategic issues that a company needs to address, managers
need to consider BOTH the results of its analysis of the company’s external
environment and the results of its evaluation of the company’s resources and
competitive position. True or false? Explain and defend your answer.
The achievement of financial objectives tends to be a lagging indicator of a company’s
performance, while the achievement of strategic objectives tends to be a leading
indicator of a company’s future financial performance. True or false? Support and
explain your answer.
The single most visible factor that distinguishes successful culture-change efforts from
failed attempts is competent leadership at the top. True or false? Explain and justify
your answer.
The task of crafting a company’s strategy is typically a job for the company’s whole
management team, not just a small group of senior executives. True or false? Explain
and support your answer.
Ethical relativism equates to multiple sets of ethical standards. True or false? Explain
your answer.
Values and ethical standards not only must be explicitly stated but they also must be
deeply ingrained into the corporate culture. True or false? Explain.
Which of the following is NOT one of the ways that a company can achieve
cost-efficient management of its value chain activities?
A. Striving to ensure a corporate diversity policy is introduced with effective controls
B. Using the company’s strong bargaining power vis–vis suppliers or others in the
value chain
C. Being alert to the cost advantages of outsourcing or vertical integration
D. Striving to capture all available economies of scale
E. Motivating employees through incentives and company culture
A company’s value-creating activities can offer a competitive advantage in one of two
ways:
A. contribute to greater efficiency and lower costs and provide a basis for
differentiation.
B. contribute expense savings and enhance product exclusivity.
C. reduce cost disadvantages and market price anomalies.
D. contribute customer experience value and conserve operating functionality.
E. contribute to competitive assets and discontinue distinctive competencies.
When should a culture be changed as rapidly as it can be managed?
A. Never, because the actions and behaviors needed to execute the new strategy
successfully are well entrenched, and thus are not changeable
B. Only rarely, because it is natural for company personnel to cling to existing practices
and to be wary of new approaches
C. When a company decides on any innovations to its products or services
D. When a strong culture is unhealthy or otherwise out of sync with the actions and
behaviors needed to execute the strategy successfully
E. When the case for cultural reform is not credible, symbolic, nor substantive
Internal administrative costs which are incurred by companies for ethical wrongdoing
include all of the following EXCEPT:
A. costs attached to adverse effects on employee productivity.
B. costs of remedial education and ethics training to company personnel.
C. costs incurred in taking corrective actions.
D. administrative costs associated with future compliance.E. legal and investigative
costs.
A “best practice” refers to:
A. a method of performing an activity or business process that at least one company has
demonstrated works particularly well in terms of delivering some highly positive
operating outcome.
B. the best-known procedure for performing a specific task or activity so as to achieve
the lowest possible costs.
C. performing activities in a manner that conforms to established industry standards.
D. a company’s core competence.E. performing a particular value chain activity in
“world-class” fashion (one unmatched by any other company in the world).
The best test of whether potential entry is a strong or weak competitive force is:
A. the strength of buyer loyalty to existing brands.
B. whether the industry’s driving forces make it harder or easier for new entrants to be
successful.
C. whether the strategies of industry members are well-matched to the industry’s key
success factors.
D. whether there are any vacant spaces on the industry’s strategic group map.
E. to ask if the industry’s growth and profit prospects are strongly attractive to potential
entry candidates.
The risks of strategic alliances often include all of the following EXCEPT:
A. conflicting objectives and strategies.
B. deep differences of opinion about how to proceed operationally and strategically.
C. important differences in corporate values.
D. misunderstandings about appropriate ethical standards.
E. potential for royalty from trustworthy firms.
A portfolio approach to managing a company’s financial resource fit is based on:
A. diversifying risk across a broad spectrum of businesses.
B. the risk/reward concept of financial analysis.
C. the fact that different businesses have different cash flow and investment
characteristics.
D. acknowledging that each business unit has varying degrees of opportunity.
E. acknowledging that each business is financially strong.
The business case for an ethical strategy:
A. focuses primarily on costs that are difficult to quantify (for example, customer
defections and adverse effects on employee productivity) but can often be the most
devastating.
B. emphasizes that pursuing unethical strategies not only damages a company’s
reputation but can also have costly consequences that are wide-ranging.
C. starts with numerous ethical rules and guidelines and an environment where
employees rely on these rules for moral guidance.
D. starts with managers who understand there is a big difference between adopting
values statements and codes of ethics that serve merely as window dressing and those
that truly paint the white lines for a company’s actual strategy and business conduct.
E. begins with ethical guidelines that help send the message that management takes the
observance of ethical norms seriously and that behavior falling outside ethical
boundaries will have negative consequences.
Putting together a capable top management team with the right mix of experiences,
skills, and abilities:
A. should take top priority in building competitively valuable core competencies.
B. is particularly important when the firm is pursuing unrelated diversification or
making a number of new acquisitions in related businesses.
C. is important in building an organization capable of proficient strategy execution, but
is nearly always less crucial than doing a superior job of training and retraining
employees.
D. entails filling key managerial slots with smart people who are clear thinkers, good at
figuring out what needs to be done, and who are skilled in “making it happen” and
delivering good results.
E. is particularly essential for executing a strategy to keep a company’s costs lower than
rivals and become the industry’s low-cost leader.
A company’s strategic plan:
A. maps out the company’s history.
B. links the company’s financial targets to control mechanisms.
C. outlines the competitive moves and approaches to be used in achieving the desired
business results.
D. focuses on offering a more appealing product than rivals.
E. lists methods of making money in its chosen business.
In leading the push for proficient strategy execution and operating excellence, the roles
of top-level managers include all of the following EXCEPT:
A. being out in the field and seeing how well operations are going.
B. delegating authority to middle and lower-level managers and creating a sense of
empowerment among employees to move the implementation process forward.
C. gathering information firsthand and gauging the progress being made.
D. learning the obstacles in the path of good execution and clearing the way for
progress.
E. holding periodic ceremonies to honor people who excel in displaying the company
values and ethical principles.
How valuable a low-cost leader’s cost advantage is depends on:
A. whether it is easy or inexpensive for rivals to copy the low-cost leader’s methods or
otherwise match its low costs.
B. how easy it is for the low-cost leader to gain the biggest market share.
C. the aggressiveness with which the low-cost leader pursues converting the cost
advantage into the absolute lowest possible costs.
D. the leader’s ability to combine the cost advantage with a reputation for good quality.
E. the low-cost leader’s ability to be the industry leader in manufacturing innovation so
as to keep lowering its manufacturing costs.
Which of the following is NOT an analytical tool for revealing a company’s
competitiveness and for helping to match the strategy to the company’s own particular
circumstances?
A. Resource and capability analysis
B. SWOT
C. Value chain analysis
D. Best practice concept
E. Competitive strength analysis
What is the advantage of acquiring capabilities through merger and acquisition?
A. Speed, since developing new capabilities internally can take many years of effort
B. Empowerment, since you can capture the essence of the capability and refocus the
firm
C. Price, as it is always cheaper to buy a whole company and pull out the capabilities
individually
D. Assets, as it the basis of the sale
E. Investment, since resources and capabilities are considerable stronger
A laptop manufacturing company acquires a microprocessors manufacturing company
to gain a strong market position. Which of the five generic strategies has the laptop
manufacturer used to gain competitive advantage?
What is a blue-ocean strategy and what is its appeal?
How can one tell a winning strategy from a strategy that is mediocre or a loser?
Discuss briefly what is meant by the terms ethical universalism and ethical relativism.
Where does integrated social contracts theory fit into the debate about ethical
standards? Which of the three schools of thought stands on the strongest ground?
There are a number of offensive strategy options for improving market positions using
cost-based and blue-ocean type strategies. Define the terms and suggest ways in which
the strategies could be operationalized.
After a company’s corporate culture is established, what are four approaches that can be
used to perpetuate the culture?
Identify and explain four actions that top executives can take that are key elements in
directing organizational action and building capabilities behind the drive for good
strategy execution to meet or beat performance targets.
How can one tell whether a company has a strong or weak corporate culture?
What are the two things involved in the leadership challenge to consistently achieve
good strategy execution?
For a company’s competitive strategy to succeed in delivering favorable performance
and the intended competitive edge over rivals, it has to be well-matched to a company’s
internal situation and underpinned by an appropriate set of resources, know-how, and
competitive capabilities. True or false? Explain your answer.