Archives: Quiz

A firm pursuing a best-cost provider strategy: A. seeks to be the low-cost provider in the largest and fastest growing (or best) market segment. B. tries to have the best cost (as compared to rivals) for each activity in the […]

Alliance management is considered an organizational capability and: A. develops over time, out of effort and learning. B. decreases a company’s knowledge assets. C. creates successful strategic alliances. D. decreases a company’s knowledge capabilities. E. rapidly transfers assets into the […]

Core competencies and competitive capabilities are usually: A. lodged in the narrow skills and specialized work efforts of a single department, as opposed to the combined expertise and capabilities of specialists scattered across several departments. B. observed to stem from […]

A company that successfully and methodically applies Six Sigma methods to its value chain, activity by activity, can: A. clearly consider what it will take to overtake rivals with the industry’s overall best strategy. B. make major strides in improving […]

In competing in foreign markets, companies find it advantageous to concentrate their activities in a limited number of locations in all of these situations, EXCEPT when: A. there are significant scale economies in performing an activity. B. the costs of […]

In adaptive corporate cultures: A. the prevailing view is that the best way to look out for the interests of employees is to change core values and cultural norms in whatever ways are needed to fit the changing requirements of […]

Which of the following is true of a company’s business model? A. It zeroes in on the customer value proposition and its related profit formula. B. It explains why the customer value proposition takes precedence over the related profit formula […]

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 […]

A company needs financial objectives to: A. spur company personnel to help the company overtake key competitors on such important measures as net profit margins and return on investment. B. communicate management’s targets for financial performance and achieve strategic objectives. […]

The competitive pressures from substitute products tend to be stronger when: A. good substitutes are readily available. B. there are fewer number of substitute products. C. substitutes have lower performance features. D. buyers incur high costs in switching to substitutes. […]

Cavco Construction divests funds from its commercial property ventures to invest in gated community properties close to New York, signaling a change of strategy. Which of the following statements about Cavco is most likely true? A. Cavco is impeding the […]

Retrenching to a narrower diversification base can be attractive or advisable EXCEPT when: A. certain businesses have questionable long-term potential. B. a diversified company has businesses that have little or no strategic or resource fits with the “core” businesses that […]

With an unrelated diversification strategy, the types of companies that make particularly attractive acquisition targets are: A. struggling companies with good turnaround potential, undervalued companies that can be acquired at a bargain price, and companies that have bright growth prospects […]

Which of the following is NOT one of the managerial considerations in determining how to compete successfully? A. How can a company attract, keep, and please customers? B. How can a company modify its entire product line to emphasize its […]

A competitive environment where there is strong rivalry among sellers, low entry barriers, strong competition from substitute products, and considerable bargaining leverage on the part of both suppliers and customers: A. is competitively unattractive from the standpoint of earning good […]

What is a primary drawback of a localized multidomestic strategy? A. It hinders the use of cross-border coordination of a company’s activities and increases a company’s vulnerability to adverse shifts in currency exchange rates. B. It makes it very difficult […]

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 […]

The three components of building a capable organization are: A. making periodic changes in the firm’s internal organization to keep people from getting into a comfortable rut, instituting a decentralized approach to decision making, and developing the appropriate competencies and […]

The leadership challenges that top executives face in making corrective adjustments when things are not going well include: A. knowing when to replace poorly performing subordinates and when to do a better job of coaching them to do the right […]

A company’s value statement and code of ethics: A. help to mold the culture and communicate what kinds of actions and behaviors are expected of all company personnel. B. help prevent it from coming across to customers and the general […]

The resolute standard for judging whether individuals, teams, and organizational units have done a good job must be measured by: A. comparing industry performance standards against the company’s own internal criteria. B. the level of rapid growth in industry (buyer) […]

Motivational and incentive compensation practices that aim at winning the commitment of company personnel to good strategy execution typically: A. use only positive rewards and never involve the use of tension, fear, job insecurity, stress, or anxiety. B. entail decidedly […]

Which of the following activities does NOT reflect short termism? A. Decreasing spending on research and development B. Avoiding stock repurchases made to increase earnings-per-share of a company C. Maintaining and hiring critical employees with compensations tied to annual company […]

Initiating actions to boost the combined performance of the corporation’s collection of businesses includes all of the following strategic options, EXCEPT: A. sticking closely with the existing business lineup and pursuing available opportunities. B. broadening the scope of diversification by […]

The essence of socially responsible business behavior is that a company: A. should balance strategic actions to benefit shareholders against the duty to be a good corporate citizen. B. undertake actions that add value to shareholders. C. respect societal expectations […]

To deeply ingrain core values and ethical standards, a company must: A. provide every employee with a copy of the company’s statement of core values and code of ethics. B. turn the espoused core values and ethical standards into strictly […]

One of the most significant contributions to strategy making in diversified companies that the nine-cell industry attractiveness competitive strength matrix provides is: A. identifying which businesses have strategies that should be continued, which businesses have strategies that need fine-tuning, and […]

A distinctive competence represents competitively superior resource strength. True or false? Explain your answer. Answer: A company lacking stand-alone resource strength should focus on bundling several resource strengths into a core competence. True or false? Explain and support your answer. […]

Knowledge that is not easily communicated because it is deeply rooted in employee experience or in a corporation’s culture is called A) tacit knowledge. B) explicit knowledge. C) imitable knowledge. D) transferable knowledge. E) durable knowledge. Answer: Which of the […]

According to Porter, seeing clothing firms such as Under Armour enter the athletic shoe industry would reflect a A) medium bargaining power of suppliers. B) low threat of substitutes. C) medium bargaining power of buyers. D) high threat of potential […]

Return on equity A) is the ratio of net profit after taxes to shareholders’ equity. B) is a profitability ratio. C) is referred to by the acronym ROE. D) measures the rate of return on the book value of shareholders’ […]

“TQM” refers to A) Total Questioning Methods. B) Terrible Quantitative Management. C) Tremulous Qualitative Methodology. D) Total Quality Management. E) Total Quality Methods. Answer: The concept that suggests that unit production costs decline by some fixed percent each time the […]

Which of the following is NOT descriptive of the threat of substitute products or services? A) Substitute products appear to be different, but satisfy the same need as another product. B) If the cost of switching is low, substitutes may […]

Suboptimization occurs when A) a division or functional unit views itself as a separate entity and refuses to cooperate with other divisions or units to the detriment of the organization as a whole. B) there is a failure to produce […]

A limitation of ROI as a measure of performance is that A) it is a single comprehensive figure examining only one facet of the firm. B) it provides disincentive to use existing assets efficiently. C) it provides an incentive to […]

Which of the following is NOT one of the steps followed in the benchmarking process? A) Develop tactical programs for closing performance gaps. B) Implement tactical programs, measure the results, and compare the results with those of the best-in-class company. […]

The kind of strategic alliance in which there is a partnership of similar companies in similar industries who pool their resources to gain a benefit that is too expensive to develop alone is the A) joint venture. B) licensing agreement. […]

Once the best strategic alternative is selected, the broad guidelines for its implementation are then defined by A) trade-offs. B) policies. C) procedures. D) resource allocation. E) strategic options. Answer: Which financial indicator is calculated by the ratio of market […]

One approach to better match executive rewards to the accomplishment of strategic objectives is A) return on investment. B) year-end bonuses. C) zero base budgeting. D) weighted-factor method. E) return on assets. Answer: The Z-value uses ________ ratios and weights […]

As defined in this course, a policy is A) the purpose or reason for a corporation’s existence. B) a statement of activities or steps needed to accomplish a single-use plan. C) a broad guideline for making decisions that links the […]

Booz & Company found that companies that are most successful at avoiding surprises had a well-defined system that integrated planning, budgeting, and business reviews. Answer: The corporate culture generally reflects the values of the founder(s) and the mission of the […]

A code of ethics is a useful way to promote ethical behavior. Answer: The combined chair/CEO position is being increasingly criticized because of the potential for conflict of interest. Answer: TRUE A corporation uses environmental scanning to avoid strategic surprise. […]

TQM is an operational philosophy committed to customer satisfaction and continuous improvement. Answer: Performance is the end result of activity. Answer: TRUE According to Schilit, unusually high goodwill gains related to recent acquisitions is a red flag, suggesting an underlying […]

While 97% of large U.S. corporations now use nominating committees to identify potential directors, this practice is not as common in Europe. Answer: Stakeholders are all constituencies that affect and are affected by the achievement of the firm’s objectives. Answer: […]

The concept that structure follows strategy was developed by Alfred Chandler. Answer: One of the most important categories of financial ratios are the liquidity ratios. Answer: TRUE A long-term contract is considered vertical integration. Answer: FALSE Any change in corporate […]

When using a network structure, many corporate activities are outsourced. Answer: Transformational leaders transform their organizations from market leaders in one industry to market leadership in another. Answer: FALSE Mintzberg’s entrepreneurial mode is sometimes referred to as “muddling through” since […]

The confidence levels of executive leaders may blind them to information that is contrary to a decided course of action; this may help to understand why overconfident CEOs are more likely to conduct mergers and acquisitions. Answer: Law refers to […]

Usually, the strategic planning staff is charged with supporting only top management in the strategic planning process. Answer: Society increasingly expects corporate boards to balance the economic goal of profitability with the social needs of society. Answer: TRUE ABC is […]

Risk in strategic management is only the probability that the strategy will be effective. Answer: In dynamic environments, the CEO’s focus is on forces in the societal environment. Answer: FALSE One of the possible barriers to entry is product differentiation. […]

Relationship-based countries tend to be less transparent and have a higher degree of corruption than do rule-based countries. Answer: An action plan states what actions are going to be taken, by whom, during what time frame, and with what expected […]