CH 1 498

Which of the following statements is true of the social responsibilities of a business? A. A firm's ethical responsibilities go beyond its legal responsibilities. B. Shareholders mandatorily require a firm to perform its ethical and philanthropic responsibilities. C. Ethical responsibilities are the foundational building block of a firm's social responsibility. D. Legal responsibilities are often subsumed under the idea of corporate citizenship, reflecting the notion of voluntarily giving back to society.

A. A firm's ethical responsibilities go beyond its legal responsibilities.

Which of the following provides an example of what AFI strategy framework is used for? A. Using AFI, the Gasquet Motor Company was able to implement a strategy that produced high-quality cars more efficiently and thereby reduced costs. B. Using AFI, the Chen Restaurant Group was able to improve employee benefits and thereby increase employee loyalty. C. Using AFI, the Sanchez Clothing Company was able to implement a strategy that allowed them to give more money to charities and thereby gain good press. D. Using AFI, the Richardson Tea Group was able to reduce the pollution it caused while processing tea and thereby receive an award.

A. Using AFI, the Gasquet Motor Company was able to implement a strategy that produced high-quality cars more efficiently and thereby reduced costs.

Shortly after the small island of Balamia experienced multiple unexpected high-intensity earthquakes that caused massive destruction, many banks and insurance companies filed for bankruptcy. This left the economy of the country in a poor state. The natural calamity in Balamia best exemplifies A. a black swan event. B. a wild card event. C. skewness risk. D. kurtosis risk.

A. a black swan event.

Which of the following is the most accurate description of stakeholder impact analysis? A. a decision tool with which managers can recognize the needs of different stakeholders B. a decision tool with which managers can recognize black swans C. a decision tool that emphasizes competitive advantage over corporate citizenship D. a decision tool that emphasizes using the three-step process

A. a decision tool with which managers can recognize the needs of different stakeholders

The U.S. government legitimized claims by thousands of businesses and individuals in the aftermath of the BP oil spill in the Gulf of Mexico, causing the claims to become of great urgency to BP. This best represents the process of A. addressing stakeholder concerns. B. identifying stakeholders. C. establishing competitive parity. D. implementing a cost-leadership strategy.

A. addressing stakeholder concerns.

The management of Five Square Corp. wants to reduce the separation between ownership (by shareholders) and control of the firm (by professional managers). Which of the following practices would best help the company do this? A. allowing employees to purchase the stock of the company at a discounted rate B. reinvesting the annual profits of the company into research and development C. issuing new additional shares to the existing stockholders in proportion to their current holdings D. declaring the annual profits as bonus dividends to the existing stockholders

A. allowing employees to purchase the stock of the company at a discounted rate

A firm's stakeholder strategy primarily allows the firm to A. analyze and manage how various external and internal stakeholders interact to jointly create and trade value. B. effectively isolate its internal stakeholders (like shareholders and employees) from its external stakeholders (like customers and media). C. transfer the contributions external stakeholders make into benefits for the internal stakeholders. D. facilitate the development of a competitive relationship between its internal and external stakeholders.

A. analyze and manage how various external and internal stakeholders interact to jointly create and trade value.

A firm always has a competitive disadvantage when its return on invested capital is A. below the industry average. B. 2 percent or lower in a declining industry. C. about the same as its closest competitor. D. declining steadily over two or more years.

A. below the industry average.

If SA Pharmaceuticals obtains an 18 percent return on invested capital, which of the following will help determine if it has a competitive advantage over other pharmaceutical companies? A. comparing the return to the return on invested capital obtained by other firms in the industry B. assessing the value based on the shareholders' expectations of return on their capital C. evaluating the liquidity ratios for other pharmaceutical companies D. comparing the value to the history of the firm's return of investment over a number of years

A. comparing the return to the return on invested capital obtained by other firms in the industry

A firm that achieves superior performance relative to other firms in the same industry or the industry average has a(n) A. competitive advantage. B. balanced scorecard. C. power position. D. equity leverage.

A. competitive advantage.

The Scoop, Ltd. is a magazine publishing company whose average return on invested capital is approximately 5 percent. Because magazine publishing is a declining industry, the industry average has been negative (-5 percent) for the last few years. In this scenario, The Scoop Ltd. has a A. competitive advantage. B. balanced scorecard. C. competitive disadvantage. D. power position.

A. competitive advantage.

In the pyramid of corporate social responsibility, _____ responsibilities are the foundational building block. A. economic B. ethical C. philanthropic D. legal

A. economic

In the AFI strategy framework, strategy analysis primarily involves A. evaluating the effects of internal resources and core competencies on a firm's potential to gain and sustain a competitive advantage. B. designing a business, corporate, and global strategy to gain and sustain a competitive advantage. C. organizing a firm in order to effectively put the formulated strategy into practice. D. deciding the type of corporate governance that would be most effective in the implementation of a strategy.

A. evaluating the effects of internal resources and core competencies on a firm's potential to gain and sustain a competitive advantage.

Stakeholder impact analysis primarily helps a firm A. gain a competitive advantage while acting as a good corporate citizen. B. lower the difference between its value creation and costs. C. single-mindedly focus on shareholders alone. D. exploit external stakeholders to benefit internal stakeholders.

A. gain a competitive advantage while acting as a good corporate citizen.

An effective strategist _____ the formulated strategy through structure, culture, and controls. A. implements B. analyzes C. formulates D. questions

A. implements

Which of the following factors most effectively contributed to the success of Threadless in comparison to other companies with T-shirt designs, including American Eagle, Old Navy, and Urban Outfitters? A. its reliance on crowdsourcing B. its point-to-point business model C. its hub-and-spoke system D. its shorter distances

A. its reliance on crowdsourcing

The minimum wage in the country of New Morland is $8 an hour. Odion, a restaurant in New Morland's capital city, pays its servers $8 per hour. However, the management of the restaurant feels that this amount is excessive for workers whose only job is to clear tables. By continuing to adhere to the rules set by the government of New Morland, which of the following responsibilities is Odion satisfying? A. legal responsibilities B. philanthropic responsibilities C. ethical responsibilities D. demographic responsibilities

A. legal responsibilities

The past black swan events in the United States demonstrate that A. managerial actions can affect the economic well-being of large numbers of people around the globe. B. decisions and strategies implemented within a firm will only affect the firm and not the entire industry. C. corporate governance is unnecessary as firms are becoming socially responsible. D. industry effects are more important than firm effects in determining firm performance.

A. managerial actions can affect the economic well-being of large numbers of people around the globe.

Which of the following would be considered a weak stakeholder strategy? A. putting shareholder interests above the interests of other stakeholders B. addressing the concerns of all stakeholders, including employees C. always using fair and ethical practices to satisfy stakeholders D. ensuring that the primary stakeholders achieve their objectives

A. putting shareholder interests above the interests of other stakeholders

In stakeholder impact analysis, identifying the opportunities and threats presented by stakeholders is immediately followed by A. recognizing the economic, legal, ethical, and philanthropic responsibilities of the firm to its stakeholders. B. formulating the stakeholder strategy to address and effectively balance the different needs of various stakeholders. C. identifying the interests and the claims of the stakeholders. D. isolating the external stakeholders from the internal stakeholders.

A. recognizing the economic, legal, ethical, and philanthropic responsibilities of the firm to its stakeholders.

BlueStainless Corp. has been able to gain and sustain a competitive advantage due to its strong relationship with its employees, customers, suppliers, and local communities. The company believes in lifetime employment and ensures that its employees grow along with the company. Investors are more than satisfied with the returns on their investments. Also, 3 percent of the company's profit is spent on community development. With initiatives like these, customers feel privileged to associate themselves with BlueStainless products. This scenario best illustrates the implementation of a A. strategic analysis. B. stakeholder strategy. C. wild card event. D. black swan event.

A. strategic analysis.

Which of the following stages of the strategic management process involves an evaluation of a firm's external and internal environments? A. strategy analysis B. strategy implementation C. strategy formulation D. strategy control

A. strategy analysis

Which of the following groups is considered to be the primary stakeholder for public-stock companies? A. suppliers of capital B. employees C. suppliers D. potential customers

A. suppliers of capital

A company wants to determine how industry effects have affected its profitability. Which of the following elements should the company focus on? A. the barriers to entry and exit within the industry B. the pricing method opted by the managers to face competition within the industry C. the brand strategy the managers adopt to establish the firm in the industry D. the strategic position the firm pursues within the industry

A. the barriers to entry and exit within the industry

During strategy implementation, managers primarily focus on deciding the A. type of corporate governance that is most effective and ways in which it can put the formulated strategy into practice. B. industries and markets the firm should compete in to be able to gain and sustain a competitive advantage. C. relationship between competitive advantage and firm performance. D. role strategic leaders should play in gaining and sustaining a competitive advantage.

A. type of corporate governance that is most effective and ways in which it can put the formulated strategy into practice.

The _____ is a model that links strategy analysis, strategy formulation, and strategy implementation, which together helps managers plan and implement a strategy that can improve performance and result in competitive advantage. A. Ansoff's growth strategy matrix B. AFI strategy framework C. Sarbanes-Oxley Act D. stakeholder impact analysis

B. AFI strategy framework

Silver Screen Cinemas Inc. and Digi Now Inc. are two companies that own and run movie theaters in malls and other commercial areas. While Silver Screen Cinemas Inc. pursues a cost-leadership strategy, Digi Now Inc. adopts a differentiation strategy. Which of the following statements is most likely true of this scenario? A. Silver Screen Cinemas will charge a premium price for its customers, while Digi Now will implement everyday low pricing. B. Digi Now and Silver Screen Cinemas will not be direct competitors to each other, and their customer segments will overlap very little. C. Digi Now will keep its customer service at an acceptable level, while Silver Screen Cinemas will provide superior customer service. D. Silver Screen Cinemas and Digi Now will use a similar approach to create value for customers by attempting to offer everything to everybody.

B. Digi Now and Silver Screen Cinemas will not be direct competitors to each other, and their customer segments will overlap very little.

Which of the following is an accurate statement about the relationship between firm effects and industry effects? A. Firm effects deal with the action of competitors; industry effects deal with internal circumstances. B. Firm effects deal with a manager's actions; industry effects deal with external circumstances. C. Firm effects deal with a manager's actions; industry effects deal with internal circumstances. D. Firm effects deal with the action of competitors; industry effects deal with external circumstances.

B. Firm effects deal with a manager's actions; industry effects deal with external circumstances.

_____ provides a decision tool that enables a firm to act as a good corporate citizen by allowing its managers to recognize, prioritize, and address the needs of different groups of individuals who take personal interest in the firm's performance and survival. A. Strategy analysis B. Stakeholder impact analysis C. The SWOT analysis D. Strategic positioning

B. Stakeholder impact analysis

Which of the following statements accurately describes firm effects? A. They attribute firm performance to the industry in which the firm competes. B. They attribute firm performance to the actions managers take within a chosen industry. C. They refer to the value-creation potential of a large, diversified enterprise. D. They refer to the external circumstances surrounding all the firms in an industry.

B. They attribute firm performance to the actions managers take within a chosen industry.

What part of the AFI strategy framework does the question "How does the firm make money?" relate to? A. strategic leadership and the strategy process B. competitive advantage, firm performance, and business models C. external analysis D. internal analysis

B. competitive advantage, firm performance, and business models

Rapida Inc. and Click Inc. are two companies that have been manufacturing typewriters for almost 30 years. Due to the reduced demand for typewriters today, both companies' average return on invested capital is approximately -5 percent. The current industry average is 2 percent. In this scenario, Rapida Inc. and Click Inc. most likely have A. competitive advantage over other firms in their industry. B. competitive parity with each other. C. strategic alliance with each other. D. economies of scope instead of economies of scale.

B. competitive parity with each other.

Within corporate social responsibility, _____ essentially reflects the notion of a business voluntarily giving back to society. A. social networking B. corporate citizenship C. corporate governance D. social bookmarking

B. corporate citizenship

While creating its AFI strategy framework, the Kowalski Candy Company decided what markets the firm should compete in. By doing this, what type of strategy did the company devise? A. business strategy B. corporate strategy C. global strategy D. ethical strategy

B. corporate strategy

The amount of xylene that can be used in household paint is legally limited to 0.03 percent. Anything beyond this amount is hazardous to health and the environment, and considered a legal offense. Consequently, CW Paints Corp. has vouched to make its products as safe as possible. Therefore, it manufactures xylene-free paints even though this increases its costs and reduces the dividends paid to its shareholders in the long run. Which of the following responsibilities is CW Paints Corp. primarily compromising in this scenario? A. legal responsibilities toward the government B. economic responsibilities toward its shareholders C. philanthropic responsibilities toward the local community D. ethical responsibilities toward the society

B. economic responsibilities toward its shareholders

Stakeholder strategy is an integrative approach to managing a diverse set of stakeholders effectively in order to A. single-mindedly focus on the stockholders alone. B. gain and sustain competitive advantage. C. minimize the joint value created. D. minimize the difference between value creation and cost.

B. gain and sustain competitive advantage.

After a firm has identified its key stakeholders in stakeholder impact analysis, the immediate next step is to A. recognize the opportunities and threats the stakeholders present. B. identify stakeholders' interests and claims. C. formulate a stakeholder strategy. D. address the stakeholders' concerns.

B. identify stakeholders' interests and claims.

Which of the following strategies does Twitter need to implement to increase its competitive advantage? A. charge no fee to individual users B. increase its user base C. deliver ads in real time D. allow core users to stay always connected

B. increase its user base

Rachel owns a large portion of GM Cube Inc.'s stocks. However, she is not employed by the company. In this scenario, Rachel is the company's A. external stakeholder. B. internal stakeholder. C. creditor. D. customer.

B. internal stakeholder.

Which of the following is typically an economic responsibility of a firm? A. sourcing raw materials from highly developed countries B. paying adequate returns to the firm's stockholders on the capital invested by them C. donating resources, in terms of money and time, toward community development D. helping a nation increase its import of goods and services

B. paying adequate returns to the firm's stockholders on the capital invested by them

A firm is said to gain a competitive advantage when it can A. exceed its own previous performances. B. provide products similar to its competitors, but at lower prices. C. perform at the same level as that of its competitors. D. minimize the difference between value creation and cost.

B. provide products similar to its competitors, but at lower prices.

A core tenet of stakeholder strategy is that a A. firm should isolate its internal stakeholders from its external stakeholders. B. single-minded focus on shareholders alone exposes a firm to undue risks that can threaten the very survival of the enterprise. C. multifaceted exchange relationship with internal and external stakeholders can lead to a firm's competitive disadvantage. D. firm should work toward competitive parity rather than gaining and sustaining a competitive advantage.

B. single-minded focus on shareholders alone exposes a firm to undue risks that can threaten the very survival of the enterprise.

According to AFI strategy framework, in which of the following tasks of strategic management is a firm's vision, mission, and values identified? A. strategy control B. strategy analysis C. strategy formulation D. strategy implementation

B. strategy analysis

Through _____, a firm puts its guiding policy into practice by employing a set of coherent actions. A. strategy control B. strategy implementation C. strategy formulation D. strategy analysis

B. strategy implementation

Which of the following tasks in the AFI strategy framework involves putting the formulated strategy into practice through organizational structure, culture, and controls? A. strategy formulation B. strategy implementation C. strategy analysis D. strategy evaluation

B. strategy implementation

For a strategist, which of the following is not an implication of effective strategic management? A. The difference between a firm's success and failure lies in its strategy. B. The principles of strategic management can be applied universally to all organizations. C. A firm's performance is determined by a set of independent factors, which includes firm and industry effects. D. It is necessary to maintain an awareness of key stakeholders and how they can affect or be affected by managerial actions.

C. A firm's performance is determined by a set of independent factors, which includes firm and industry effects.

Which of the following statements should ideally reflect a firm's strategy for competitive advantage? A. Our strategy is to win at any cost. B. We will be number one in the industry. C. Our aim is to create superior customer value while controlling costs. D. We want to be the market leader by replicating our competitor's strategy.

C. Our aim is to create superior customer value while controlling costs.

Which of the following scenarios best illustrates a good stakeholder strategy? A. VP Inc. follows a strategy in which maximization of the shareholder's wealth is the primary concern of the managers. B. Carrvero Inc. ensures that its employees are paid the least in the industry so that its external stakeholders can get the best price. C. PA Corp. distributes only 70 percent of its annual profit after taxes to shareholders, while the remaining is distributed among employees and the local community, and invested for further research. D. Gen Pharma Corp. ensures that it fully exploits free natural resources, so that most of its profits go to shareholders in the form of dividends.

C. PA Corp. distributes only 70 percent of its annual profit after taxes to shareholders, while the remaining is distributed among employees and the local community, and invested for further research.

_____ is best described as an integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage. A. Supply chain management B. Integrated technology management C. Strategic management D. Inventory management

C. Strategic management

Which of the following is an implication of all firms in an industry pursuing a low-cost position through application of competitive benchmarking? A. No firm would face direct competition from others in the industry; hence, profit potential would be high. B. Each firm would be catering to a different customer segment. C. The firms would eventually have no resources to invest in product and process improvements. D. Each firm would be in a better position to gain a competitive advantage.

C. The firms would eventually have no resources to invest in product and process improvements.

Which of the following statements about a firm's stakeholders is true? A. Irrespective of whether the stakeholders are internal or external, the claims and interests of all stakeholders are the same. B. As the legal owners, employees in a public-stock company have the most legitimate claim on a company's profits. C. Within stakeholder groups there can be significant variation in the power a stakeholder may exert on a firm. D. Only internal stakeholders make specific contributions to a firm, which in turn provides different types of benefits to the external stakeholders.

C. Within stakeholder groups there can be significant variation in the power a stakeholder may exert on a firm.

Which of the following scenarios illustrates a firm that has a sustainable competitive advantage? A. Jamison Inc. generated revenue of $300,000 this financial year, which is close to the industrial revenue average of $320,000. B. CR Inc. almost doubled its sales to 9,000 units this year compared to its previous year's sales of 5,000 units, though the industry average is 10,000 units. C. Zhang Corp. was able to hold its market share of 68 percent in the social networking industry for more than three years. D. Peak Inc. was able to outperform its competitors with its new production system, in terms of revenue, for a brief period of four months.

C. Zhang Corp. was able to hold its market share of 68 percent in the social networking industry for more than three years.

Which of the following is an element of good strategy? A. an explanation of the firm's advantages over competitors B. a guiding policy to address employee satisfaction C. a set of coherent actions to implement the firm's guiding policy D. an approach that underestimates the competition

C. a set of coherent actions to implement the firm's guiding policy

The board at TriCom Manufacturing Corp. has decided to allocate 20 percent of the company's shares to its workforce, at a discounted price. Apart from being a valued investment, the plan will allow the employees to take personal responsibility for the firm's performance. Which of the following employee incentive schemes does this best illustrate? A. employee provident fund B. employee gratuity fund C. employee stock ownership plan D. employee emergency loan program

C. employee stock ownership plan

Which of the following is not one of the three interdependent tasks of strategic management? A. analyze B. formulate C. estimate D. implement

C. estimate

In 2010, an explosion of a BP oil drill resulted in the deaths of 11 workers and the largest environmental disaster in U.S. history. The BP CEO was fired because of his ineffective handling of the crisis. The CEO lost his job because he failed to uphold _____ responsibilities. A. economic B. legal C. ethical D. philanthropic

C. ethical

The interaction between a firm and its diverse internal and external stakeholders is best described as a(n) A. ergonomic relationship. B. cartel arrangement. C. exchange relationship. D. fiduciary responsibility.

C. exchange relationship.

Which of the following is step 3 in the five-step process of stakeholder impact analysis? A. identifying the most powerful stakeholders (both internal and external) and their needs B. identifying the stakeholders' interests and claims C. identifying the opportunities and threats the stakeholders present D. identifying the social responsibilities of the firm toward its stakeholders

C. identifying the opportunities and threats the stakeholders present

The society and shareholders mandatorily require a firm to perform its _____ responsibilities. A. ethical B. philanthropic C. legal D. political

C. legal

Pink Couture Inc. and Pink Blush Inc. are two companies in the apparel industry. While Pink Couture Inc. focuses on providing unique product features and superior customer service, Pink Blush Inc. focuses on low prices and minimal customer service. Both companies have been able to gain a competitive advantage. This is most likely because the companies have A. executed integrated strategies. B. entered into a cartel arrangement. C. pursued distinct strategic positions. D. engaged in direct imitation and substitution.

C. pursued distinct strategic positions.

As the legal owners, _____ have the most legitimate claim on a company's profits. A. creditors B. employees C. shareholders D. board members

C. shareholders

Which of the following is an example of a firm's internal stakeholders? A. customers B. creditors C. stockholders D. suppliers

C. stockholders

In _____, a firm frames a guiding policy to address the competitive challenge. A. strategy control B. strategy implementation C. strategy formulation D. strategy analysis

C. strategy formulation

Which of the following forces tends to be more important in determining a firm's performance? A. the underlying economic structure B. the entry barriers in the industry C. the actions of managers within the firm D. the number and size of other firms in the industry

C. the actions of managers within the firm

Which of the following forces is most closely related to industry effects within the automobile industry? A. the actions taken to improve employee productivity within a firm B. the human resource strategy managers adopt to acquire the best talent from the industry C. the types of products and the services offered within the industry D. the decisions made within a firm regarding pricing of a product in the market

C. the types of products and the services offered within the industry

For a firm that operates in an industry where competition is high, which of the following practices will result in inferior performance? A. choosing a distinct but different strategic position in the industry B. working toward increasing the difference between value creation and cost C. trying to be everything to everybody by combining different competitive strategies D. focusing on creating value for customers rather than destroying rivals

C. trying to be everything to everybody by combining different competitive strategies

Which of the following is an example of competitive parity? A. A firm manufactures higher-quality wall clocks than its competitors B. A firm provides wall clocks that its consumers value more than other wall clocks C. A firm sells wall clocks at a lower price than its competitors D. A firm produces wall clocks at the same rate as its competitors

D. A firm produces wall clocks at the same rate as its competitors

Which of the following does not explain why activist investors have more power over a firm than individual investors? A. Activist investors can buy or sell large numbers of shares at once. B. Activist investors can exercise block-voting rights over individual investors. C. Activist investors can demand seats on company boards. D. Activist investors have more legitimacy than individual investors.

D. Activist investors have more legitimacy than individual investors.

Which of the following statements about strategy is not true? A. Grandiose statements of desire, on their own, are not strategy. B. Strategy is as much about deciding what not to do, as it is about deciding what to do. C. Strategy is about creating superior value, while containing the cost to create it. D. Operational effectiveness and competitive benchmarking should be treated as strategy

D. Operational effectiveness and competitive benchmarking should be treated as strategy

Why is strategy considered to be the science of success and failure? A. Strategies can ensure the exact outcome of all business ventures undertaken. B. Strategies use extensive research by a variety of scientists. C. Strategies require a large amount of thinking and planning. D. Strategies use principles that can be applied universally to all organizations.

D. Strategies use principles that can be applied universally to all organizations.

Which of the following is not a stakeholder attribute that managers consider during stakeholder impact analysis? A. a stakeholder's power B. a stakeholder's legitimate claim C. a stakeholder's urgent claim D. a stakeholder's liquidity

D. a stakeholder's liquidity

Underperformance relative to other firms in the same industry or the industry average results in a(n) _____ for a firm. A. sustainable competitive advantage B. increased power distance C. diseconomies of scope D. competitive disadvantage

D. competitive disadvantage

In the final step of the stakeholder impact analysis, a firm A. identifies its stakeholders' interests and claims. B. differentiates its internal stakeholders from its external stakeholders. C. recognizes the opportunities and threats stakeholders present. D. decides a course of action to address the stakeholders' concerns.

D. decides a course of action to address the stakeholders' concerns.

Managers use the AFI strategy framework primarily to A. help their business achieve and sustain competitive parity. B. minimize the wealth of their shareholders. C. help reduce the economic contribution of their business. D. explain and predict differences in firm performance.

D. explain and predict differences in firm performance.

Organic Food Inc., a multinational company, relies on its media partner Radio Plus to regularly advertise its offers, sales, and new products. Radio Plus is invested in this relationship because it generates most of its revenue from advertising Organic Food's products. In this scenario, Radio Plus is Organic Food Inc.'s A. stockholder. B. workforce. C. internal stakeholder. D. external stakeholder.

D. external stakeholder.

Sun Inc., a vendor, regularly supplies pallets to Octangle Corp. for its shipping business. Therefore, Sun Inc. is Octangle Corp.'s A. internal stakeholder. B. stockholder. C. shareholder. D. external stakeholder.

D. external stakeholder.

State-level government agencies that check whether firms are meeting statutory safety measures in their production units are considered to be the firms' A. stockholders. B. shareholders. C. internal stakeholders. D. external stakeholders.

D. external stakeholders.

A firm's economic responsibilities are primarily directed toward A. minimizing shareholders' wealth. B. acting as a good corporate citizen. C. doing what is right, just, and fair. D. gaining and sustaining competitive advantage.

D. gaining and sustaining competitive advantage.

The first step in stakeholder impact analysis involves A. formulating a stakeholder strategy to balance the different needs of various stakeholders. B. identifying the opportunities and threats the stakeholders present. C. describing the economic, legal, ethical, and philanthropic responsibilities of the firm toward the society. D. identifying the stakeholders that currently have, or potentially can have, a material effect on a company.

D. identifying the stakeholders that currently have, or potentially can have, a material effect on a company.

Which of the following is not competitive strategy? A. strategic positioning B. unique activities C. product differentiation D. operational effectiveness

D. operational effectiveness

During an AFI planning session, the managers of the Fukuhara Motorcyle Corporation decided to place various stages of production in different countries. By doing this, what issue did the firm address? A. philanthropic strategy B. business ethics C. corporate governance D. organizational design

D. organizational design

The society and the shareholders just expect, and do not mandatorily require, a firm to A. pay fair dividends and returns to the investors. B. follow the employment laws of a country. C. provide safe and quality products to the customers. D. pay its workers more than the minimum living wage.

D. pay its workers more than the minimum living wage

Which of the following responsibilities results from a society's mere expectations of a business and not because the society and the shareholders mandatorily require the business to demonstrate it? A. economic responsibilities B. legal responsibilities C. contract responsibilities D. philanthropic responsibilities

D. philanthropic responsibilities

Jake's Taxi Service is a new entrant to the taxi industry. It has achieved success by staking out a unique position in the industry. How did Jake's Taxi Service mostly likely achieve this position? A. providing long-distance cab fares at a higher rate than competitors; servicing a larger area than competitors B. providing long-distance cab fares at a lower rate than competitors; servicing a smaller area than competitors C. providing long-distance cab fares at a higher rate than competitors; servicing the same area as competitors D. providing long-distance cab fares at a lower rate than competitors; servicing the same area as competitors

D. providing long-distance cab fares at a lower rate than competitors; servicing the same area as competitors

Which of following practices of a firm satisfies its ethical responsibilities? A. using plastic as the packaging material though it is harmful to the environment, yet legal B. outsourcing production to a less developed country and paying wages that are below its own country's accepted minimum wages C. using advertising and other forms of promotion to endorse luxurious lifestyles D. selling vaccines at a subsidized price in a less developed country even though this results in reduced shareholder returns

D. selling vaccines at a subsidized price in a less developed country even though this results in reduced shareholder returns

If a company wants to gain a competitive advantage in a highly competitive industry, it should ideally A. execute an integrated cost-leadership and differentiation position. B. copy the strategies of other firms through competitive benchmarking. C. provide goods or services similar to its competitors at higher prices. D. stake out a unique position within the industry.

D. stake out a unique position within the industry.

FindFor Inc. is an e-commerce retail firm that sells a variety of merchandise online. Through services like cash on delivery, easy return, and online tracking, the company has created more customer value than its competitors (brick-and-mortar businesses) at the same price. Also, the company's costs are substantially low due to minimal investment in operation and administration. In this scenario, FindFor Inc. has most likely been able to provide superior value and cost control through A. strategic parity. B. strategic profiling. C. strategic liquidation. D. strategic positioning.

D. strategic positioning.

Which of the following stages in the AFI strategy framework involves designing a business, corporate, and global strategy? A. strategy control B. strategy implementation C. strategy analysis D. strategy formulation

D. strategy formulation

Patterson Foods Inc. was the first company to start selling energy bars in its country—a product that gained popularity among diverse groups. Soon, other companies started to sell their own brands of energy bars, thereby giving Patterson Foods ample competition. In response, Patterson Foods decided to limit its variety of energy bars to only four. However, it ensured that these four varieties were low in calories and low in cost. With this innovation, Patterson Foods Inc. consistently outperformed its competitors for ten years. In this scenario, Patterson Foods Inc. maintained a _____ through its innovative strategy. A. balanced scorecard B. fiduciary responsibility C. consistent power position D. sustainable competitive advantage

D. sustainable competitive advantage

In a firm, a strategist's job should be to A. limit the participation of external stakeholders—customers and suppliers—in value creation. B. isolate the firm's internal stakeholders from its external stakeholders. C. focus solely, in a single-minded manner, on maximizing shareholder wealth. D. understand the complex web of exchange relationships among different stakeholders.

D. understand the complex web of exchange relationships among different stakeholders.