When a company has a proficiency in performing a strategically and competitively
important value chain activity better than its rivals, it is said to have:
A. a company competence.
B. a core competence.
C. a distinctive competence.
D. a key value chain proficiency.
E. a competitive advantage over rivals.
Answer:
To take advantage of cross-business value chain relationships and strategic fit and turn
them into a competitive advantage requires that companies determine whether there are
opportunities to strengthen the business, which includes such tasks as all of the
following, EXCEPT:
A. the transferring of valuable resources and capabilities from one business to another.
B. combining related value chain activities of different businesses to achieve lower
costs.
C. forcing cultural independence, operating diversity, and sophisticated analytical
responsibility on the businesses to ensure compatibility with the corporate overhead
identity.
D. sharing the use of powerful and well-respected brand names across multiple
businesses.
E. encouraging knowledge-sharing and collaborative activity among the businesses.
Answer:
The competitive power of a company’s resource strength is NOT measured by which
one of the following tests?
A. Is the resource rare and something rivals lack?
B. Is the resource strength something that a company has internally rather than in
collaborative arrangements with outsiders?
C. Is the resource strength easily trumped by the substitute resources/capabilities of
rivals?
D. Is the resource strength hard to copy?
E. Is the resource strength competitively valuable, having the potential to contribute to a
competitive advantage?
Answer:
Management’s most powerful tool for winning employee commitment to good strategy
execution is:
A. the establishment of strategy-supportive policies and procedures.
B. empowering employees and encouraging them to adopt best practices.
C. setting stretch objectives.
D. a structure of rewards and incentives tied tightly to the achievement of the
organization’s strategic priorities.
E. aggressive use of TQM and Six Sigma quality control programs.
Answer:
A corporate culture founded on ethical business principles and socially approved
values:
A. virtually guarantees that a company will be (or soon become) the acknowledged
industry leader because of the ethical and socially approved manner in which its
business is being conducted.
B. doesn’t necessarily impact a company’s long-term strategic success favorably or
unfavorably.
C. does more to detract from a company’s chances for strategic success and market
leadership than to help it.
D. is a positive force underlying a company’s long-term financial success and reduces
the likelihood of lapses in ethical and socially approved behavior that can damage the
company’s reputation.
E. is seldom more than window-dressing and is generally regarded by customers,
suppliers, employees, shareholders, and society at large as nothing more than good
public relations.
Answer:
Which structure combines two or more organizational forms, with multiple reporting
relationships, and is used to foster cross-unit collaboration?
A. Matrix structure
B. Composite structure
C. Divisional structure
D. Network structure
E. Functional structure
Answer:
What is it called when a diversified company can add value by shifting capital from
business units generating free cash flow to those needing additional capital to expand
and realize their growth potential?
A. Internal capital market
B. Cash cow benefits
C. Economic value added
D. Shareholder value added
E. Derived valuation
Answer:
Sharing and transferring resources and capabilities across borders may also contribute
to the development of broader or deeper competencies and capabilities, thereby helping
a company achieve:
A. control over its resource capabilities.
B. dominating depth in some competitively valuable area
C. intensity of resource diversification.
D. precision and compliance in resource agility and responsiveness
E. direct investments in foreign countries.
Answer:
Diversification becomes a relevant strategic option for a company EXCEPT when it:
A. spots opportunities to expand into industries whose technologies and products
complement its present business.
B. leverages existing resources and capabilities by expanding into industries where
these same resource strengths are key success factors and valuable competitive assets.
C. has a powerful and well-known brand name that can be transferred to the products of
other businesses and thereby used as a lever for driving up the sales and profits of such
businesses.
D. can open up new avenues for reducing costs by diversifying into closely related
businesses.
E. expands into additional businesses that unlock possibilities for a comprehensive cost
enhancement strategy.
Answer:
Which of the following statements regarding global competition is false?
A. In global competition, rivals vie for worldwide market leadership.
B. In globally competitive industries, the power and strength of a company’s strategy
and resource capabilities in one country significantly enhance its competitiveness in
other country markets.
C. In global competition, a firm’s overall competitive advantage (or disadvantage)
grows out of its entire worldwide operations.
D. In global competition, there’s more cross-country variation in industry conditions
and competitive forces than there is in industries where multidomestic competition
prevails.
E. In global competition, many of the same rival companies compete against each other
in many different countries, but especially so in countries where sales volumes are large
and where having a competitive presence is strategically important to building a strong
global position in the industry.
Answer:
A diversified company has a parenting advantage when it:
A. is more able than other companies to boost the combined performance of its
individual businesses through its high-level guidance, general oversight, and other
corporate-level contributions.
B. is more able than other companies to create positive collaboration within its portfolio
for different specialty groups and geographic locations.
C. results in supporting short-term economic shareholder value.
D. manages a set of fundamentally similar business operations inside fundamentally
similar industries and environments.
E. avoids acquiring undervalued companies and thus reduces risks.
Answer:
What defines an insular, inwardly focused culture?
A. The firm never underestimates rivals because of their proven track record in
defending challenges.
B. The firm believes they have all the answers because of their past great market
success and is thus overconfident.
C. The firm’s unflinching belief in the company’s superiority breeds a champion’s
attitude and thus they thrive on doing better by adapting to fresh thinking from outside
the company.
D. The firm values their customers’ opinions and fully understands their needs and
expectations.
E. The firm has a commitment to hiring young people who can offer fresh thinking and
new perspectives.
Answer:
A strongly implanted culture provides a huge assist in executing strategy because
company managers can use the traditions, beliefs, values, common bonds, or behavioral
norms:
A. as levers to mobilize commitment to executing the chosen strategy.
B. as reinforcement for convincing staff that the strategy is sound and molded in
tradition.
C. to ensure the staff will embrace the new strategy like they have in the past.
D. to manipulate jobholders into thinking traditions are important.
E. as disciplinary measures in making the employees perform better and achieve targets.
Answer:
Which one of the following is NOT a key element of integrated social contracts theory?
A. Universal ethical principles apply in those situations where most all
societiesendowed with rationality and moral knowledgehave common moral agreement
on what is wrong and thereby put limits on what actions and behaviors fall inside the
boundaries of what is right, and which ones fall outside.
B. Commonly held views about what is morally right and wrong form a “social
contract” (contract with society) that is binding on all individuals, groups,
organizations, and businesses in terms of establishing the line between ethical and
unethical behaviors.
C. Universal ethical principles or norms leave some “moral free space” for the people in
a particular country (or local culture or even a company) to make specific
interpretations of what other actions may or may not be permissible within the bounds
defined by universal ethical principles.
D. Universal ethical norms always take precedence over local ethical norms.
E. Integrated social contracts theory rejects the slippery slope of ethical relativism and
embraces ethical universalism.
Answer:
Which of the following is NOT a part of the business case for why companies should
act in a socially responsible manner?
A. Every business has a moral duty to be a good corporate citizen.
B. Acting in a socially responsible manner reduces the risk of reputation-damaging
incidents.
C. Acting in a socially responsible manner is in the overall best interest of shareholders.
D. To the extent that a company’s socially responsible behavior wins applause from
consumers and fortifies its reputation, a company may win additional patronage.
E. Acting in a socially responsible manner can generate internal benefits (as concerns
employee recruiting, workforce retention, employee morale, and training costs).
Answer:
The idea behind benchmarking and best practices is to:
A. identify which companies are the best performers of a strategically relevant activity
and then copy their methods exactly.
B. search the world for a company that performs a strategically relevant task or value
chain activity at the lowest possible cost and then use business process reengineering
techniques to try to meet or beat the costs of the world’s low-cost performer of that
activity.
C. perform each activity in the industry value chain according to standard industry
practice and then regularly benchmark the company’s performance to see if it is actually
achieving the industry standard.
D. identify companies that are the best performers of an activity and then “adapt” their
practices to fit the company’s own specific circumstances and operating requirements.
E. determine whether a company has a “world-class” value chain.
Answer:
The statistical thinking underlying Six Sigma is based on which of the following three
principles?
A. All activities can be controlled, employee empowerment is the best control tool, and
100 percent control is possible.
B. All work is a process, all processes have variability, and all processes create data that
explains variability.
C. All work activities can be done accurately most of the time, empowered employees
are necessary for effective control, and good statistical data is an empowered
employee’s best control tool.
D. All work is a statistically controllable process, 100percent control is possible, and
every well-controlled process is defect-free.
E. Most business processes are subject to control, Six Sigma can totally remove
variability in how processes are performed, and most defects can be eliminated.
Answer:
There is ample room for companies to customize their diversification strategies and be
defined as being either narrowly or broadly diversified, and when combination
related-unrelated diversification strategy options are adopted, they have particular
appeal to:
A. those companies with a mix of valuable competitive assets, covering the spectrum
from generalized to specialized resources and capabilities.
B. those large multibusiness firms, sometimes called conglomerates, because they have
a unique capability designed to stabilize earnings.
C. companies with a portfolio of product choices for buyer-related behavior.
D. corporate managers who take on risks without performing due diligence.
E. corporate managers who want to play the corporate parent role without fiduciary
responsibility.
Answer:
The most common approaches to capability building include all of the following,
EXCEPT:
A. developing capabilities internally.
B. acquiring capabilities through mergers and acquisitions.
C. accessing capabilities via collaborative partnerships.
D. renewing capabilities to align with customer expectations.
E. coaching average performers to improve their skills.
Answer:
When concentrating production in a few locations, which of the following can allow a
manufacturer to lower unit costs, boost quality, or master a new technology more
quickly?
A. Significant scale economies
B. Learning-curve effects
C. Superior resources
D. Profit sanctuaries
E. Supporting industries
Answer:
Acquisition is an effective way to hurdle all of the following entry barriers EXCEPT:
A. building brand awareness.
B. avoiding the costs of doing due diligence.
C. achieving scale economies.
D. establishing supplier relationships.
E. acquiring technical know-how.
Answer:
Which of the following is an integral part of the managerial process of crafting and
executing strategy?
A. Developing a proven business model
B. Deciding how much of the company’s resources to employ in the pursuit of
sustainable competitive advantage
C. Setting objectives and using them as yardsticks for measuring the company’s
performance and progress
D. Communicating the company’s values and code of conduct to all employees
E. Deciding on the company’s strategic intent
Answer:
Which of the following is NOT a part of checking a diversified company’s business
units for cross-business competitive advantage potential?
A. Ascertaining the extent to which business units have value chain match-ups that offer
opportunities to combine the performance of related value chain activities and reduce
costs
B. Ascertaining the extent to which business units have value chain match-ups that offer
opportunities to transfer skills or technology or intellectual capital from one business to
another
C. Ascertaining the extent to which business units are making maximum use of the
parent company’s competitive advantages
D. Ascertaining the extent to which business units have value chain match-ups that offer
opportunities to create new competitive capabilities or to leverage existing resources
E. Ascertaining the extent to which business units present opportunities to share use of a
well-respected brand name
Answer:
Companies often implement a transnational strategy because it:
A. combines flexible coordination with the pursuit of conflicting objectives
simultaneously.
B. provides an easy mode of operating to transfer and share resources and capabilities
across borders.
C. is conducive to mass customization techniques that enable companies to address
local preferences in an efficient semi-standard manner.
D. is the least complex and easiest to implement of all the strategy choices.
E. is capable of achieving an efficiency potential through centralized decision making
and strong headquarter control.
Answer:
Why is it important to craft a business model?
A. Because it sets forth management’s game plan for maximizing profits for
shareholders
B. Because it details exactly how management’s strategy will result in the achievement
of the company’s strategic intent
C. Because it is a part of an operating model that focuses on delivering excellence and
creating value for external shareholders and internal labor force
D. Because it sets forth the key components of the enterprise’s business approach,
indicates how revenues will be generated, and makes a case for why the strategy can
deliver value to customers in a profitable manner
E. Because it sets forth management’s long-term action plan to match the business
standards set by formidable rivals
Answer:
The reason the world economy is globalizing at an accelerated pace is because:
A. countries previously open to foreign companies have closed their markets.
B. countries that previously had market or mixed economies now embrace planned
economies.
C. information technology expands the importance of geographic distance.
D. growth-minded companies are racing to build stronger competitive positions in the
markets of more countries.
E. countries opposed to market or mixed economies have stringent trade barriers in
place.
Answer:
A company’s culture is in part defined and identified by:
A. its internal work climate and personalityas shaped by its shared values, work
practices, traditions, and ingrained attitudes and behaviors that define “how we do
things around here.”
B. whether it employs a low-cost provider, best-cost provider, differentiation, or
focused strategy.
C. whether decision making is centralized or decentralized and whether it is a
single-business company or a diversified company.
D. how strongly its strategic vision is linked to its core values.
E. whether it is a well-known industry leader, an up-and-coming company that is
gaining market share, a middle-of-the-pack company unlikely to move up in the
industry ranks, or an industry also-ran that may or may not survive.
Answer:
Which of the following is NOT an advantage of strategic alliances, joint ventures, and
cooperative agreements between domestic and foreign firms?
A. Competing on a more global scale while still preserving their independence
B. Gaining better access to scale economies in production and/or marketing
C. Filling competitively important gaps in their technical expertise and/or knowledge of
local markets
D. Sharing distribution facilities and dealer networks, thus mutually strengthening their
access to buyers
E. Creating permanent arrangements between the domestic and foreign firms
Answer:
In which of the following instances is retrenching to a narrower diversification base
NOT likely to be an attractive or advisable strategy for a diversified company?
A. When a diversified company has struggled to make certain businesses attractively
profitable
B. When a diversified company has too many cash cows
C. When one or more businesses are cash hogs with questionable long-term potential
D. When businesses in once-attractive industries have badly deteriorated
E. When a diversified company has businesses that have little or no strategic or
resource fits with the “core” businesses that management wishes to concentrate on
Answer:
A potato chip manufacturer purchases a potato farm. Which of the following regarding
its strategy is true?
A. The manufacturer has effectively used vertical integration to increase its bargaining
position and reduce transaction costs.
B. The manufacturer has efficiently capitalized on the experience and learning-curve
effects within the company.
C. The manufacturer has enhanced utilization by allowing depreciation and other fixed
costs to be spread over a larger unit volume.
D. The manufacturer has sacrificed quality by using a lower-cost input.
E. The manufacturer has effectively reduced its operating costs by outsourcing its
activities.
Answer:
Management’s handling of the strategy implementation/execution process can be
considered successful:
A. when the internal organization develops two or more core competencies in
performing value chain activities.
B. if and when the company meets or beats its performance targets and shows good
progress in achieving its strategic vision for the company.
C. if the company’s culture is strong and strategy-supportive.
D. if management is able to marshal adequate resources to put the strategy in place
within 6 to 12 months.
E. if managers and employees express strong support for the company’s strategy and
long-term direction.
Answer:
Information systems provide managers with a means for monitoring all of the following
EXCEPT:
A. the results that flow from the actions of subordinates.
B. the performance of empowered workers.
C. weekly operating statistics.
D. employees with over-the-shoulder supervision.
E. daily operating statistics.
Answer: