A companys values concern
A. whether and to what extent it intends to operate in an ethical and socially responsible
manner.
B. how aggressively it will seek to maximize profits and enforce high ethical standards.
C. the beliefs and operating principles built into the companys “balanced scorecard” for
measuring performance.
D. the beliefs, traits, and behavioral norms that company personnel are expected to
display in conducting the companys business and pursuing its strategic vision and
mission.
E. the beliefs, principles, and ethical standards that are incorporated into the companys
strategic intent and business model.
Which one of the following statements about a high-performance culture is false?
A. High-performance cultures are characterized by a pride in doing things right and a
no-excuses sense of accountability.
B. High-performance cultures often have a low regard for high ethical standards, a
strong preference for high-risk strategies, and a slow and methodical approach to
responding to changes in the marketplace.
C. The challenge in creating a high-performance culture is to inspire high loyalty and
dedication on the part of employees, such that they are energized to do things right.
D. In a high-performance culture, theres a razor sharp focus on what needs to be done.
E. In high-performance cultures, theres a strong sense of involvement on the part of
company personnel and emphasis on individual initiative and creativity.
Companies with politicized cultures
A. are typically opposed to performance-based incentive compensation and employee
empowerment.
B. tend to be preoccupied with making sure the company has a safe,
follow-the-industry-leader type of strategic vision and it avoids risky business
strategies.
C. tend to drive managers to consume a great deal of organizational energy and make
the companys strategic agenda take a backseat role to political maneuvering.
D. are typically opposed to sound strategic initiatives designed to promote the
well-being of specific functions.
E. are typically run by political managers who have little regard for high ethical
standards.
Proven approaches to winning a sustainable competitive advantage include which of the
following?
A. Strategies keyed to developing a low-cost-based advantage.
B. Strategies keyed to creating a broad differentiation-based advantage.
C. Focusing on a narrow market niche within an industry.
D. Developing a best-cost provider strategy.
E. All of these.
The difference between a “cash cow” business and a “cash hog” business is that
A. a cash cow business is making money whereas a cash hog business is losing money.
B. a cash cow business generates enough profits to pay off long-term debt whereas a
cash hog business does not.
C. a cash cow business generates positive retained earnings whereas a cash hog
business produces negative retained earnings.
D. a cash cow business produces large internal cash flows over and above what is
needed to build and maintain the business whereas the internal cash flows of a cash hog
business are too small to fully fund its operating needs and capital requirements.
E. a cash cow business generates very large increases in sales revenues whereas a cash
hog business has declining sales revenues and chronic deficiencies of working capital.
A companys menu of strategic choices to supplement its decision to employ one of the
five basic competitive strategies does not include:
A. whether and when to employ defensive strategies to protect the companys market
position.
B. whether to integrate backward or forward into more stages of the industry value
chain.
C. whether to employ a preemptive strike type of green ocean strategy.
D. whether and when to go on the offensive and initiate aggressive strategic moves to
improve the companys market position.
E. whether to bolster the companys market position via acquisition or merger and/or
whether to enter into strategic alliances or partnership arrangements with other
enterprises.
The difference between a distinctive competence and a core competence is that
A. a distinctive competence refers to a companys best-executed functional strategy and
a core competence refers to a companys best-executed business strategy.
B. a distinctive competence refers to a companys most strategically important resource
whereas a core competence refers to the basis of a companys competitive advantage
over rivals.
C. a distinctive competence is a competitively relevant internal activity that a firm
performs especially well relative to other internal activities, whereas a core competence
is a competitively important activity performed by key strategic allies.
D. a distinctive competence represents internal activity that is performed with a very
high level of proficiency whereas a core competence is a proficiently performed
internal activity that is central to a companys strategy and competitiveness.
E. a core competence usually resides in a companys technology and physical assets
(state-of-the-art plants and equipment, attractive real estate locations, and so on)
whereas a distinctive competence usually resides in a companys human capital,
information capital, or organizational capital.
A countrys business climate is not a function of the political and economic risk factors,
such as:
A. instability or weaknesses inherent with the national government.
B. host-government hostility toward allowing foreign businesses market entry, often
requiring local produced parts and components to be included in manufacturing,
allowing for ease of funds transfers from the host country, and often requiring local
ownership.
C. stability of countrys monetary system.
D. lack of property rights protections and compliance with local environmental
regulation.
E. All of these.
Diversifying into new businesses can be considered a success only if it
A. results in increased profit margins and bigger total profits.
B. builds shareholder value.
C. helps a company escape the rigors of competition in its present business.
D. leads to the development of a greater variety of distinctive competencies and
competitive capabilities.
E. helps the company overcome the barriers to entering additional foreign markets.
Which of the following is not among the principal managerial tasks associated with
managing the strategy execution process?
A. Ensuring that policies and procedures facilitate rather than impede effective
execution
B. Creating a company culture and work climate conducive to successful strategy
implementation and execution
C. Surveying employees on how employee job satisfaction can be improved
D. Exerting the internal leadership needed to drive implementation forward
E. Tying rewards and incentives directly to the achievement of performance objectives
Which one of the following is not part of the task of checking a diversified companys
business lineup for adequate resource fit?
A. Determining whether the excess cash flows generated by cash cow businesses are
sufficient to cover the negative cash flows of its cash hog businesses
B. Determining whether recently acquired businesses are acting to strengthen a
companys resource base and competitive capabilities or whether they are causing its
competitive and managerial resources to be stretched too thinly
C. Determining whether business units offer opportunities to transfer skills or
technology or intellectual capital from one business to another
D. Determining whether the company has adequate financial strength to fund its
different businesses and maintain a healthy credit rating
E. Determining whether the corporate parent has or can develop sufficient resource
strengths and competitive capabilities to be successful in each of the businesses it has
diversified into
Which one of the following is not among the chief duties/responsibilities of a companys
board of directors insofar as the strategy-making, strategy-executing process is
concerned?
A. Hiring and firing senior-level executives and working with the companys chief
strategic planning officer to improve the companys performance
B. Being inquiring critics and exercising strong oversight over the companys direction,
strategy, and business approaches
C. Evaluating the caliber of senior executives strategy-making/strategy-executing skills
D. Instituting a compensation plan for top executives that rewards them for actions and
results that serve stakeholders interests, and most especially those of shareholders
E. Overseeing the companys financial accounting and financial reporting practices
Driving forces analysis
A. involves identifying the driving forces, assessing whether their impact will make the
industry more or less attractive, and determining what strategy changes a company may
need to make to prepare for the impact of the driving forces.
B. identifies which strategic group is the most powerful.
C. helps managers identify which industry member is likely to become (or remain) the
industry leader and why.
D. helps managers identify which key success factors are most likely to help their
company gain a competitive advantage.
E. helps managers identify which of the five competitive forces will be the strongest
driver of industry change.
A strategic group consists of those firms in an industry that
A. are subject to the same driving forces.
B. are placing about the same emphasis on each distribution channel.
C. use the same key success factors to differentiate their products.
D. employ similar competitive approaches and occupy similar positions in the market.
E. have similar size market shares.
One strategic fit-based approach to related diversification would be to
A. diversify into new industries that present opportunities to combine value chain
activities of two or more businesses to lower costs.
B. diversify into those industries where the same kinds of driving forces and
competitive forces prevail, thus allowing use of much the same competitive strategy in
all of the businesses a company is in.
C. acquire rival firms that have broader product lines so as to give the company access
to a wider range of buyer groups.
D. acquire companies in forward distribution channels (wholesalers and/or retailers).
E. expand into foreign markets where the firm currently does no business.
The objective of a best-cost provider strategy is to
A. deliver superior value to buyers by satisfying their expectations on key
quality/performance/features/service attributes and beating their expectations on price.
B. offer buyers the industrys best-performing product at the best cost and best (lowest)
price in the industry.
C. attract buyers on the basis of having the industrys overall best-performing product at
a price that is slightly below the industry-average price.
D. outcompete rivals using low-cost provider strategies.
E. translate its best-cost status into achieving the highest profit margins of any firm in
the industry.
One of the suggested advantages of an unrelated diversification strategy is that it
A. expands a firms competitive advantage opportunities to include a wider array of
businesses.
B. spreads the stockholders risks across a group of truly diverse businesses.
C. increases strategic fit opportunities and the potential for a 1 + 1 = 3 outcome on the
bottom line.
D. results in having more cash cow businesses than cash hog businesses.
E. facilitates capturing the financial fits among sister businesses (as compared to a
strategy of related diversification).
The common types of valuable resources and competitive capabilities that management
should consider when crafting a strategy include
A. a skill, specialized expertise, or competitively important capability.
B. valuable physical and intangible assets.
C. valuable human assets and intellectual capital.
D. valuable organizational assets and competitively valuable alliances.
E. All of these.
Which one of the following is not a good example of a defensive strategy to protect a
companys market share and competitive position?
A. Adding new features or models and otherwise broadening the product line to close
off vacant niches and gaps to opportunity-seeking challengers
B. Thwarting the efforts of rivals to attack with lower prices by maintaining
economy-priced options of its own
C. Engaging in a preemptive strike strategy in an effort to discourage rivals from being
aggressive
D. Signaling challengers that retaliation is likely in the event that they launch an attack
E. Making early announcements about impending new products or price changes to
induce potential buyers to postpone switching
The rationale for making strategy-critical value chain activities the primary building
blocks in a companys organizational chart is based on
A. the much shorter time it takes to build core competencies and competitive
capabilities.
B. the benefit such an organizational scheme has in reducing costs.
C. the benefit such an organizational scheme has in improving the productivity of
geographically scattered organizational units.
D. the thesis that if activities crucial to strategic success are to have the resources,
decision-making influence, and organizational impact they need, they have to be
centerpieces in the organizational scheme.
E. the benefit such an organizational scheme has in making the empowerment of
employees more effective.
Businesses are said to be “related” when
A. they have several key suppliers and several key customers in common.
B. their value chains have the same number of primary activities.
C. their products are both sold through retailers.
D. their value chains possess competitively valuable cross-business relationships that
present opportunities to transfer skills and capabilities from one business to another,
share resources or facilities to reduce costs, share use of a well-known brand name,
and/or create mutually useful resource strengths and capabilities.
E. many consumers buy the products/services of both businesses.
Unethical business behavior tends to be driven by such factors as
A. a managerial mind-set that “the business of business is business, not ethics.”
B. overzealous pursuit of personal gain, wealth, and other selfish interests.
C. a company culture that puts the profitability and good business performance ahead of
ethical behavior.
D. heavy pressures on company managers to meet or beat earnings targets.
E. All of these.
Which one of the following is false as concerns the merits of why acting in a socially
responsible manner is “good business”?
A. Companies with good reputations for contributing time and money to bettering
society are better able to attract and retain employees compared to companies with
tarnished reputations.
B. Acting in a socially responsible manner nearly always results in higher profits and a
higher stock price for shareholders.
C. To the extent that a companys socially responsible behavior wins applause from
consumers and fortifies its reputation, a company may win additional patronage.
D. Operating in a socially responsible manner protects the company from consumer,
environmental, and human rights activist groups that are quick to criticize businesses
whose behavior they consider to be out of line.
E. Well-conceived social responsibility strategies help avoid or preempt legal and
regulatory actions that could prove costly to the company.
Strategic alliances, joint ventures, and cooperative agreements between domestic and
foreign firms are a potentially fruitful means for the partners to
A. enter additional country markets.
B. gain better access to scale economies in production and/or marketing.
C. fill competitively important gaps in their technical expertise and/or knowledge of
local markets.
D. share distribution facilities and dealer networks, thus mutually strengthening their
access to buyers.
E. All of these.
Changing a problem culture
A. is one of the toughest managerial tasks because of the tendency of company
personnel to cling to familiar practices and ways of doing things.
B. is best done by instituting an aggressive program to train employees in the ways and
beliefs of the new culture to be implanted.
C. is best done by selecting a team of key employees to lead the culture change effort.
D. requires writing a new statement of core values and describing in writing the kind of
culture that is needed.
E. can be done quickly only if managers tie incentive compensation to exhibiting the
desired new cultural behaviors and if managers visibly praise people who exhibit the
desired new cultural traits.
What rationales for unrelated diversification are not likely to increase shareholder
value?
A. To reduce risk by spreading the companys investments over a set of truly diverse
industries
B. To enable a company to achieve rapid or continuous growth
C. To chance that market downtrends in some of the companys businesses will be
partially offset by cyclical upswings in its other businesses
D. To provide benefits to managers such as high compensation and reduction in
employment risk
E. All of these
A much-used and potent managerial tool for determining whether a company performs
particular functions or activities in a manner that represents “the best practice” when
both cost and effectiveness are taken into account is
A. competitive strength analysis.
B. activity-based costing.
C. resource cost mapping.
D. SWOT analysis.
E. benchmarking.
Which of the following is not something a company should usually consider in crafting
a strategy of social responsibility?
A. Actions to benefit shareholders (such as raising the dividend to boost the stock price)
B. Making charitable contributions and donating money and the time of company
personnel to community service endeavors
C. Actions to ensure the company has an ethical strategy and operates honorably and
ethically
D. Actions to protect or enhance the environment
E. Actions to create a workforce diversity program
A companys mission statement typically addresses which of the following questions?
A. Who we are? what we do? and why we are here?
B. What objectives and level of performance do we want to achieve?
C. Where are we going and what should our strategy be?
D. What approach should we take to achieve sustainable competitive advantage?
E. What business model should we employ to achieve our objectives and our vision?
Which one of the following is not a strategically beneficial reason a company may enter
into strategic partnerships or cooperative arrangements with key suppliers, distributors,
or makers of complementary products?
A. To acquire or improve access to new markets
B. To expedite the development of promising new technologies or products
C. To enable greater vertical integration
D. To improve supply chain efficiency
E. To overcome deficiencies in technical and manufacturing expertise and to create
desirable new skill sets and capabilities
The three tests for judging whether a particular diversification move can create value
for shareholders are
A. the attractiveness test, the profitability test, and the shareholder value test.
B. the strategic fit test, the competitive advantage test, and the return on investment test.
C. the resource fit test, the profitability test, and the shareholder value test.
D. the attractiveness test, the cost-of-entry test, and the better-off test.
E. the shareholder value test, the cost-of-entry test, and the profitability test.
Briefly discuss the meaning and significance of each of the following terms:
a) SWOT analysis
b) Company value chain
c) Industry value chain
d) Weighted competitive strength assessment
e) Benchmarking
Answer:
Answer may vary