Chapter 3
A marketing department that promises delivery faster than the ability of the production department to produce is an example of a lack of understanding of the A. interrelationships among functional areas and firm strategies organizational culture and leadership. B. organizational culture and leadership. C. need to maintain the reputation of the company. D. synergy of the business units.
A
According to value-chain analysis, which of the following would be considered part of the general administration in a firm? A. information systems B. technology development C. human resource management D. procurement
A
Accounting is a sort of transformation process that converts daily records of individual transactions into monthly financial reports. The __________ are the inputs, accounting is the operation that adds value, and ___________ are the outputs. A. transaction records; financial statements B. financial statements; transaction records C. employee records; transaction records D. health records; transaction statements
A
Amazon Prime is credited for helping to increase the Amazon stock price by nearly 300 percent from 2008 to 2010. This competitive advantage is known as A. causal ambiguity. B. product rarity. C. service validity. D. substitutability.
A
Ratios that reflect whether or not a firm is efficiently using its resources are known as A. turnover ratios. B. leverage ratios. C. liquidity ratios. D. profitability ratios.
A
The culture of a firm also may be a resource that provides competitive advantage. Which of these companies might be a good example of this intangible resource? A. Google B. Kmart C. Costco D. Walmart
A
The customer perspective of the balanced scorecard answers which of the following questions? A. How do customers see us? B. What must we excel at? C. How do we look to shareholders? D. Can we continue to improve and create value?
A
Which of the following is a limitation of SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis? A. Organizational strengths may not lead to competitive advantage. B. The SWOT focus on internal environment is too broad and integrative. C. SWOT gives a multi-shot view of a moving target. D. SWOT overemphasizes a multiple dimensions of strategy.
A
Which of the following is not a tangible resource? A. technical and scientific skills B. trade secrets, patents, copyrights C. state-of-the art machinery D. company borrowing capacity
A
Which of these categories of financial ratios is used to measure the ability of a firm to meet its shortterm financial obligations? A. liquidity ratios B. profitability ratios C. activity ratios D. leverage ratios
A
A competitive advantage based on inimitability can be sustained for at least some time, if it has the following characteristics: A. psychographic uniqueness, path dependency, causal ambiguity, and substitutability. B. physical uniqueness, path dependency, causal ambiguity, and social complexity. C. rarity, path dependency, causal ambiguity, and social substitutability. D. geographic uniqueness, cause dependency, social ambiguity, and path complexity.
B
A firm that takes on too much long-term debt to finance operations will see an immediate impact on its indicators of _______ financial leverage. A. short-term B. long-term C. relative D. comparable
B
A resource is valuable and rare but neither difficult to imitate nor without substitutes. This should enable the firm to attain A. no competitive advantage. B. a temporary competitive advantage. C. competitive parity. D. a sustainable competitive advantage.
B
A travel agent adds value by creating an itinerary that includes transportation, accommodations, and activities that are customized to your budget and travel dates. In terms of the value chain analysis, this is an example of a ____________ organization. A. retail B. service C. manufacturing D. travel
B
A variety of firm resources include interpersonal relations among managers in the firm, its culture, and its reputation with its suppliers and customers. Such competitive advantages are based upon A. path dependency. B. social complexity. C. physical uniqueness. D. tangible resources.
B
Advertising is a __________ activity. Supply of replacement parts is a __________ activity. A. support; primary B. primary; primary C. primary; support D. support; secondary
B
All of the following are examples of socially complex organizational phenomena except A. a firm's culture. B. complex physical technology. C. interpersonal relations among a firm's managers. D. leadership and trust.
B
Focusing too narrowly on current customers, technologies, and competitors can lead to a failure to notice important changes on the periphery of their environment that may trigger the need to redefine industry boundaries and identify a whole new set of competitive relationships. This is a result of relying A. on traditional definitions of all industries and competitive environments. B. on traditional definitions of the relevant industry and competitive environment. C. solely on intuition. D. on a superficial evaluation of the relevant industry and competitive environment.
B
If managers do not recognize from the beginning that the balanced scorecard is not a _________ and fail to commit to it long term, the organization will be disappointed. A. panacea B. quick fix C. marketing ploy D. cheap solution
B
In a retail service industry, which of the following is not a primary value-chain activity? A. purchasing goods B. human resource management C. partnering with vendors D. operating stores
B
In assessing its primary activities, an airline would examine A. employee training programs. B. baggage handling. C. criteria for lease versus purchase decisions. D. the effectiveness of its lobbying activities.
B
In the resource-based view of the firm, examples of tangible resources include A. financial resources, human resources, and firm competencies. B. financial resources, physical resources, and technological resources. C. financial resources, physical resources, and the capacity to combine intangible resources. D. outstanding customer service, innovativeness of products, and reputation.
B
Strategists who rely on traditional definitions of their industry and competitive environment often focus their sights too ___________ on current customers, technologies, and competitors. A. broadly B. narrowly C. aggressively D. widely
B
The ability to hire, motivate, and retain human capital is an example of ________ capabilities in the resource-based view of the firm. A. tangible B. organizational C. management D. design
B
The internal business perspective of the balanced scorecard answers which of the following questions? A. How do customers see us? B. What must we excel at? C. How do we look to shareholders? D. Can we continue to improve and create value?
B
Which of the following is not a limitation of SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis? A. Organizational strengths may not lead to competitive advantage. B. The SWOT focus on the external environment is too broad and integrative. C. SWOT gives a one-shot view of a moving target. D. SWOT overemphasizes a single dimension of strategy.
B
Which of the following is not an example of organizational capabilities? A. outstanding customer service B. reputation with customers for quality and reliability C. innovativeness of products and services D. ability to hire, motivate, and retain human capital
B
_____________ are typically embedded in unique routines and practices that have evolved and accumulated over time such as effective work teams. A. Tangible resources B. Intangible resources C. Reputational resources D. Organizational capabilities
B
A crash R&D program by one firm cannot replicate a successful technology developed by another firm, when research findings cumulate. This is an example of A. social complexity. B. physical uniqueness. C. path dependency. D. causal ambiguity
C
An important implication of the balanced scorecard approach is that A. managers need to recognize that satisfaction of stockholder demands is their primary job. B. the emphasis on customer satisfaction and financial goals are only a means to that end. C. managers should not look at their job as primarily balancing stakeholder demands. D. gains in financial performance must come at a cost of employee satisfaction.
C
Apple Inc. reported revenues of 171 billion USD and net income of 37 billion USD in 2012. These figures represent a stunning annual growth in revenue and net income of 57 percent and 43 percent, respectively, for the 2011 to 2013 time period. This information indicates the importance of using __________ to evaluate company financial performance. A. financial ratios B. industry norms C. historical comparisons D. competitor analysis
C
Apple combines and packages proven technology in new and innovative ways. This is an example of its use of A. tangible resources. B. intangible resources. C. organizational capabilities. D. strong primary activities
C
Comparing your firm with all other firms in your industry assesses _________ performance. A. excessive B. consistent C. relative D. non-comparable
C
Competition among organizations is played out over time. As circumstances, capabilities, and strategies change, _________ techniques do not reveal the dynamics of the competitive environment. A. transactional analysis B. variable analysis C. static analysis D. continuous
C
Employees will be able to obtain a proportionately high level of profits they generate (relative to the firm) if A. suppliers are loyal to the firm. B. their expertise is firm-specific. C. the cost to the firm of replacing them is high. D. the firm's resources are path dependent.
C
For a resource to provide a firm with the potential for a sustainable competitive advantage, it must have four attributes. Which of the following is not one of these attributes? A. rare B. valuable C. easy for competitors to substitute D. difficult for competitors to imitate
C
For an engineering services firm, ________________ provides inputs, the transformation process is the engineering itself, and innovative designs and practical solutions are the outputs. A. experimentation B. customer support C. research and development D. human resource management
C
From the innovation and learning perspective, survival is dependent upon managers making _________ changes to existing products and services as well as introduce entirely new products with expanded capabilities. A. few B. no C. frequent D. rare
C
General administration is sometimes viewed as only _______ but can be a powerful source of competitive advantage. A. income B. value C. overhead D. unimportant
C
German truck and trailer manufacturer, Schmitz Cargobull, mainly serves customers that are operators of truck or trailer fleets. What sets the company apart is its expertise in telematics (the integrated application of telecommunications data) to monitor the current state of any Schmitz Cargobull-produced trailer. This is an example of using ________ to enhance customer value and increase _______ position. A. sales; competitive B. operations; marketing C. information technology; competitive D. human resources; marketing
C
Historical comparisons provide information to managers about changes in the competitive position of a firm. Historical comparisons often are misleading A. if the overall strategy of the firm is the same. B. if the firm shows constant growth. C. in periods of recession or economic boom. D. if the firm's stock is publicly traded
C
In an interview with Lise Saari, former director of global workforce research at IBM, she notes that HR must be a true partner of the business, with a deep and up-to-date understanding of business realities and objectives, and must ensure HR initiatives fully support them at all points of the value chain. This is an example of A. relationships among activities within the firm and with other stakeholders. B. relationships between firms. C. interrelationships among activities within the firm. D. interrelationships among firms.
C
In contrast to __________ interactions, which allow the firm to gain insights on the needs of a particular customer, ___________ offers the opportunity to leverage the wisdom of a larger crowd. A. consumer; sourcing B. prosumer; outsourcing C. prosumer; crowdsourcing D. marketing; crowdsourcing
C
In order to be considered strategic resources that contribute competitive advantage, they must have several characteristics. Which of the following is not one of these? A. rare B. valuable C. inexpensive to imitate D. costly to substitute
C
In terms of value chain analysis, a telephone operating company would find that negotiating and maintaining ongoing relations with regulatory bodies are important activities for achieving A. returns on investment. B. customer awareness. C. competitive advantage. D. better employees.
C
Intangible resources are typically embedded in ________ routines and practices that have evolved and accumulated over time. A. rare B. standard C. unique D. obvious
C
Making comparisons between a firm and its most direct rivals is useful because firms within the same strategic industry group have _______ strategies. A. different B. the same C. similar D. relative
C
SWOT analysis alone __________ helps a firm develop competitive advantages that it can sustain over time. A. usually B. often C. rarely D. regularly
C
Sometimes firms become preoccupied with _________ or a key feature of the product or service they are offering and ignore other factors needed for competitive success. A. multiple strengths B. multiple opportunities C. a single strength D. a single opportunity
C
The balanced scorecard provides top managers with a __________ view of the business. A. detailed and complex B. simple and routine C. fast but comprehensive D. long-term financial
C
The balanced scorecard, developed by Kaplan and Norton, helps to integrate A. financial analysis and the reputation of a firm. B. intangible resources and operational measures. C. financial analysis and stakeholder perspectives. D. short-term perspectives and strategic positioning
C
The financial perspective of the balanced scorecard answers which of the following questions? A. How do customers see us? B. What must we excel at? C. How do we look to shareholders? D. Can we continue to improve and create value?
C
The internal measures should reflect business processes that have ______ impact on customer satisfaction. These include factors that affect cycle time, quality, employee skills, and productivity. A. the least B. variable C. the most D. potential
C
The resource-based view (RBV) of the firm combines the following two perspectives: A. the primary and support activities of the firm. B. the interrelationships among the primary activities of the firm and corporate management. C. the internal analysis of the firm and the external analysis of the industry and competitive environment. D. the industry and the competitive environment.
C
The three key types of resources that are central to the resource-based view of the firm are A. tangible resources, intangible resources, and organizational structure. B. culture, tangible resources, intangible resources. C. tangible resources, intangible resources, and organizational capabilities. D. tangible resources, intangible resources, and top management.
C
Which of the following groups generally is charged with creating value through the process of organizing, coordinating, and leveraging employees as well as other forms of capital such as plant, equipment, and financial capital? A. unions B. boards of directors C. managers D. stakeholders
C
Which of the following is a support activity? A. inbound logistics B. customer service C. technology development D. operations
C
Which of the following would be most difficult to assess? A. the liquidity position of a firm B. market share growth C. the legitimacy and reputation of a firm D. the efficiency with which a firm utilizes its assets
C
With the total performance indicators in place at Sears, it can evaluate if a single store improves its employee attitude by 5 percent and therefore predict with confidence that if the revenue growth in the district as a whole is 5 percent, the revenue growth in this particular store would be 5.5 percent. This is an example of the _______ perspective of the balanced scorecard. A. customer B. internal business C. financial D. innovation and learning
C
__________ among organizations is played out over time. A. Negotiation B. Sustainability C. Competition D. Learning
C
__________ are the competencies or skills that a firm employs to transform inputs into outputs. A. Tangible resources B. Reputational resources C. Organizational capabilities D. Intangible resources
C
___________ is/are associated with collecting, storing, and distributing the product or service to buyers. They consist of warehousing, material handling, delivery operation, order processing, and scheduling. A. Services B. Inbound logistics C. Outbound logistics D. Operations
C
A key __________ of SWOT is that it is primarily a static assessment. A. strength B. threat C. opportunity D. weakness
D
Company __________, no matter how unique or impressive, may not enable it to achieve a competitive advantage in the marketplace. A. strengths and opportunities B. strengths and threats C. opportunities D. strengths and capabilities
D
Customer service includes A. product promotion. B. procurement of critical supplies. C. product distribution. D. parts supply.
D
Financial ratio analysis measures the performance of the firm based on all but which of the following? A. balance sheet B. market valuation C. income statement D. industry comparison
D
Four factors help explain the extent to which employees and managers will be able to obtain a proportionately high level of the profits that they generate. Which is not one of these factors? A. employee bargaining power B. employee replacement cost C. employee exit costs D. competitor bargaining power
D
Human resource management consists of activities involved in the recruiting, hiring, training, development, and compensation of all types of personnel. It supports A. only individual primary activities. B. mostly support activities but does have some impact on primary activities. C. only individual support activities. D. both individual primary and support activities and the entire value chain.
D
In making the decision to enter the pharmaceutical industry, a company would not need to consider which of the following? A. historical comparisons B. comparisons with industry norms C. comparisons with key competitors D. comparisons with non-competitors
D
In using crowdsourcing as a means to integrate the customer into the value chain, there are some perils to consider. Which of the following is not related to crowdsourcing perils? A. Giving customers the opportunity to tarnish the company brand. B. Asking for consumer input when demand is highly uncertain. C. Repeatedly getting feedback from the same customer. D. Asking for consumer input when demand is certain.
D
Inbound logistics include A. machining and packaging. B. repair and parts supply. C. promotion and packaging. D. warehousing and inventory control
D
Raymond Ozzie, the software designer who was critical in the development of Lotus Notes, was able to dictate the terms under which IBM acquired Lotus. This illustrates that he had ______ bargaining power based on the ________ cost required by the firm to replace him. A. low; low B. low; high C. high; low D. high; high
D
Regarding the value-chain concept, the most important interrelationship is between the organization and its A. board of directors. B. employees. C. management. D. customers.
D
The balanced scorecard enables managers to consider their business from all of the following perspectives except A. customer perspective. B. internal perspective. C. innovation and learning perspective. D. ethical perspective.
D
The best measure of company ability to meet imminent financial obligations is known as the A. debt ratio. B. profit margin. C. total asset turnover. D. current ratio.
D
The innovation and learning perspective of the balanced scorecard answers which of the following questions? A. How do customers see us? B. What must we excel at? C. How do we look to shareholders? D. Can we continue to improve and create value?
D
Toyota, the giant automaker, paid a heavy price for its ___________ emphasis on cost control. The resulting problems with quality and the negative publicity led to severe financial losses and an erosion of its reputation in many markets. A. minimal B. superficial C. low-budget D. excessive
D
Which of the following examples demonstrates how successful organizations manage their primary activities? A. Motorola has revised its compensation system to reward employees who learn a variety of skills. B. Wal-Mart implemented a sophisticated information system that resulted in reduced inventory carrying costs and shortened customer response times. C. National Steel improved its efficiency by reducing the number of job classifications. D. Hewlett Packard has cut lead time from five days to one by employing JIT inventory management.
D
Which of the following is a profitability ratio? A. current ratio B. total debt ratio C. total asset turnover D. return on equity
D
Which of the following is not a factor that helps to explain the extent to which employees and managers will be able to obtain a proportionately high level of the profits that they generate? A. Employees have high bargaining power. B. The cost of employee replacement is high. C. The cost of exit is high for an employee. D. Managers have low bargaining power.
D
Which of the following is not an advantage of Just-In-Time inventory systems? A. reduced raw material storage costs B. minimized idle production facilities and workers C. reduced work-in-process inventories D. reduced dependence on suppliers
D
Which of the following lists consists of support activities? A. human resource management, technology development, customer service, and procurement B. human resource management, customer service, marketing and sales, and operations C. customer service, information systems, technology development, and procurement D. human resource management, technology development, procurement, and general administration
D
XYZ Corp. is focusing on the objective of low-cost, high quality, on-time production by minimizing idle productive facilities and workers. The XYZ Corp. is taking advantage of a __________ system. A. Last In, First Out (LIFO) B. Highly mechanized C. First In, First Out (FIFO) D. Just-In-Time (JIT)
D
