MBA 705 LSUS Mclaughlin exam 2 2023

Objectivism:

A philosophical perspective, espoused by Ayn Rand, that emphasizes an objective reality understood by logic and reason and focuses on individual freedom and property rights.

Commoditization:

A process whereby firms are having a more difficult time distinguishing their products and services from those of their rivals.

Agency Problem:

A situation in which a firms' top managers (i.e., the "agents" of the firms' owners) do not act in the best interests of the shareholders.

Culture:

A society's generally accepted values, traditions, and patterns of behavior.

Leveraged Buyout (LBO):

A takeover in which the acquiring party borrows funds to purchase a firm.

Mobile Commerce (M-Commerce):

Transactions conducted in an entirely wireless environment, such as using a smartphone to both purchase and download an airline ticket or piece of music.

C.

When a firm purchases both its suppliers and buyers, it is engaging in __________. A. forward integration B. backward integration C. both forward and backward integration D. none of the above

B. A recession tends to help firms in most industries, but it does not benefit all industries.

When a recession occurs __________. A. all industries benefit B. some industries benefit C. no industries benefit D. none of the above

Information Symmetry:

When all parties to a transaction share the same information concerning that transaction.

Information Asymmetry:

When one party has information that another does not.

Moral Hazard:

When parties in an arrangement do not share equally in the risks and benefits.

Synergy:

When the combination of two firms results in higher efficiency and effectiveness than would otherwise be achieved by the two firms separately.

C. Social forces include such factors as societal values, trends, traditions, and religious practices.

Which of the following is not an example of a social force? A. trends B. values C. industrial change D. all of the above

D. Stakeholders include any groups that have a "stake" in the success of the organization.

Which of the following is not an example of a stakeholder? A. customers. B. suppliers, C. employees, D. none of the above

Stakeholders:

individuals or groups who are affected by, or can influence an organization's operations.

Conglomerate (Unrelated) Diversification:

A form of diversification in which a firm acquires a business to reduce cyclical fluctuations in cash flows or revenues.

Vertical Integration:

A form of integration in which a firm expands by acquiring a company in the distribution channel.

Core Competencies:

The firm's key capabilities and collective learning skills that are fundamental to its strategy, performance, and long-term profitability.

Ethical Relativism:

The idea that ethics is based on accepted norms in a culture, meaning that what is ethical in one nation or culture might be unethical in another.

Adverse Selection:

The inability of shareholders to identify the precise competencies and personal attributes of top managers when they are hired.

Triple Bottom Line:

The notion that firms must maintain and improve social and ecological performance in addition to economic performance.

Diversification:

The process of acquiring companies to increase a firm's size.

Takeover:

The purchase of a controlling quantity of shares in a firm by an individual, a group of investors, or another organization. Takeovers may be friendly or unfriendly.

D. The reason for the firms existence is known as the MISSION

The reason for the firm's existence is known as __________. A. the vision, B. organizational goals, C. organizational objectives, D. none of the above

Consumer-to-Consumer (C2C):

The segment of e-commerce whereby consumers utilize the Internet to solicit transactions from each other.

Business-to-Consumer (B2C):

The segment of electronic commerce whereby businesses utilize the Internet to solicit transactions from consumers, also known as e-tailing.

Business-to-Business (B2B):

The segment of electronic commerce whereby businesses utilize the Internet to solicit transactions from each other.

Business-to-Government (B2G):

The segment of electronic commerce whereby businesses utilize the Internet to solicit transactions from government entities.

Consumer-to-Business (C2B):

The segment of electronic commerce whereby consumers utilize the Internet to solicit transactions from businesses.

Clicks and Bricks:

The simultaneous application of both electronic ("clicks") and traditional ("bricks") forms of commerce.

Sustainable Strategic Management (SSM):

The strategies and related processes that promote superior performance from both market and environmental perspectives.

Corporate-Level Strategy:

The strategy that top management formulates for the overall company.

Environmental Scanning

The systematic collection and analysis of information about relevant macroenvironmental trends is known as __________. A. strategic planning B. strategic management C. environmental scanning D. none of the above.

Environmental Scanning:

The systematic collection and analysis of information about relevant macroenvironmental trends.

Self-Reference Criterion:

The unconscious reference to one's own cultural values as a standard of judgment.

International Franchising:

A form of licensing in which a local franchisee pays a franchiser in another country for the right to use the franchiser's brand names, promotions, materials, and procedures.

Managerial Ethics:

An individual's responsibility to make business decisions that are legal, honest, moral, and fair.

E-tailing:

Another term for B2C.

Horizontal Related Diversification:

A form of diversification in which a firm acquires a business outside its present scope of operation but with similar or related core competencies.

BCG Growth-Share Matrix:

A corporate portfolio framework developed by the Boston Consulting Group that categorizes a firm's business units by the market share that they hold and the growth rate of their respective markets.

Merger:

A corporate-level growth strategy in which a firm combines with another firm through an exchange of stock.

Internal Growth:

A corporate-level growth strategy in which a firm expands by internally increasing its size and sales rather than by acquiring other companies.

Strategic Alliances:

A corporate-level growth strategy in which two or more firms agree to share the costs, risks, and benefits associated with pursuing new business opportunities. Strategic alliances are often referred to as partnerships.

External Growth:

A corporate-level growth strategy whereby a firm acquires other companies.

Divestment:

A corporate-level retrenchment strategy in which a firm sells one or more of its business units.

Liquidation:

A corporate-level retrenchment strategy in which a firm terminates one or more of its business units by the sale of their assets.

Turnaround:

A corporate-level retrenchment strategy intended to transform the firm into a leaner and more effective business by reducing costs and rethinking the firm's product lines and target markets.

Growth Strategy:

A corporate-level strategy designed to increase revenues, and ultimately profits and/or market share.

Retrenchment Strategy:

A corporate-level strategy designed to reduce the size of the firm.

Stability Strategy:

A corporate-level strategy intended to maintain a firm's present size and current lines of business.

B.

A firm seeking rapid growth should pursue __________. A. internal growth B. external growth C. divestment of poor performing businesses D. a restructuring strategy

Backward Integration:

A firm's acquisition of its suppliers.

Forward Integration:

A firm's acquisition of one or more of its buyers.

Acquisition:

A form of a merger whereby one firm purchases another, often with a combination of cash and stock.

Horizontal Integration:

A form of acquisition in which a firm expands by acquiring other companies in its same line of business.

International Licensing:

An arrangement whereby a foreign licensee purchases the rights to produce a company's products and/or use its technology in the licensee's country for a negotiated fee structure.

C.

An individual's responsibility to make business decisions that are legal, honest, moral, and fair is known as __________. A. social responsibility, B. the social imperative, C. managerial ethics, D. all of the above

Societal Values:

Concepts and beliefs that members of a society tend to hold in high esteem.

Outsourcing:

Contracting out a firm's noncore, non-revenue-producing activities to other organizations primarily to reduce costs.

Partnerships:

Contractual relationships with enterprises outside the organization.

Goals:

Desired general ends toward which efforts are directed.

B

Diversification allows a firm to __________. A. concentrate its efforts on a single business

Social Responsibility:

The expectation that business firms should serve both society and the financial interests of shareholders.

B2C Commerce

E-tailing is synonymous with __________.

Employee Stock Ownership Plans (ESOPs):

Formal programs that transfer shares of stock to a company's employees.

D. The Internet promotes information symmetry, can be used as a distribution channel in some instances, and has the potential for cost shifting and cost reductions.

How has the Internet changed strategic management? A. It promotes information symmetry. B. It can often be used as a distribution channel. C. It often reduces costs. D. all of the above

Corporate Profile:

Identification of the industry or industries in which a firm operates.

D.

Leveraged buyouts can __________. A.strap the company with a large amount of debt, B. serve as a system of checks and balances, C. lead to the sale of company assets, D. all of the above

Justice View of Ethics:

Perspective suggesting that all decisions will be made in accordance with established rules or guidelines.

Utilitarian View of Ethics:

Perspective suggesting that anticipated outcomes and consequences should be the only considerations when evaluating an ethical dilemma.

Integrative Social Contracts View of Ethics:

Perspective suggesting that decisions should be based on existing norms of behavior, including cultural, community, or industry factors.

Self-Interest View of Ethics:

Perspective suggesting the benefits of the decision maker should be the primary consideration when weighing a decision.

Religious View of Ethics:

Perspective that evaluates organizational decisions on the basis of personal or religious convictions.

Rights View of Ethics:

Perspective that evaluates organizational decisions on the extent to which they protect individual rights.

Offshoring:

Relocating some or all of a firm's manufacturing or other business processes to another country typically to reduce costs.

Objectives:

Specific, verifiable, and often quantified versions of a goal.

True

T/F Because firms operating in single industries are more susceptible to industry downturns, most firms eventually diversify into other industries.

False

T/F Commoditization refers to the ability to individualize product and service offerings to meet specific buyer needs.

False. Corporate restructuring includes such actions as realigning divisions in the firm, reducing the amount of cash under the discretion of senior executives, and acquiring or divesting business units.

T/F Corporate restructuring involves the acquisition of business units unrelated to the firm's core business unit.

True

T/F Environmental scanning can be difficult for large firms because of the availability of too much information.

False. Objectives are specific and often quantified versions of goals.

T/F Goals are specific and often quantified versions of objectives.

False. Profitability is only one stakeholder goal.

T/F If a firm is able to consistently earn above-average profits, it is effectively balancing the goals of its stakeholders.

True

T/F In many respects, social forces are the drivers of consumer markets.

False. Ethics is an individual phenomenon; managers and other employees can be ethical or unethical.

T/F Most organizations can be classified as either ethical or unethical.

True

T/F Offshoring refers to the relocation of some or all of a firm's manufacturing or other business activities to another country, usually to reduce costs.

True

T/F Reading business publications can serve as a means of environmental scanning.

False. Strategic alliances involve lower bureaucratic and developmental costs when compared to mergers and acquisitions.

T/F Strategic alliances typically involve higher bureaucratic and developmental costs when compared to mergers and acquisitions.

True

T/F Synergy occurs when the combination of two organizations results in higher effectiveness and efficiency than would otherwise be generated by them separately.

False. The BCG matrix provides managers with a systematic means of considering the relationships among business units in its portfolio.

T/F The BCG matrix provides managers with a systematic means of determining whether a growth, stability, or retrenchment strategy should be adopted.

False. The agency problem refers to a situation in which a firm's managers (i.e., the owners' agents) fail to act in the best interests of the shareholders.

T/F The agency problem refers to the balancing act a firm must exhibit when attempting to satisfy the myriad of governmental agencies.

True

T/F The expansion of a religion in an emerging country is an example of a social force.

False Due to other factors, a healthy firm may be best advised to pursue any of the three corporate strategy options, not just growth.

T/F The growth strategy is always the most effective strategy for a healthy firm.

False. The integrative social contracts view of ethics suggests that decisions should be based on existing norms of behavior, including cultural, community, or industry factors.

T/F The integrative social contracts view of ethics suggests that decisions should be based on religious convictions.

False (this is self reference criterion)

T/F The unconscious reference to one's own cultural values as a standard of judgment is known as cultural bias.

D. Technological forces vary across industries and can eliminate existing industries and create new ones.

Technological forces often __________. A. decimate an entire industry B. spawn new industries C. vary substantially among industries D. all of the above

Mass Customization:

The ability to individualize product and service offerings to meet specific buyer needs

D. (this is SSM)

The assessment of strategies and related processes that promote superior performance from both market and environmental perspectives is known as _________. A. CSR, B. managerial ethics, C. management decision-making effectiveness, D. none of the above

Economies of Scale:

The decline in unit costs of a product or service that occurs as the absolute volume of production increases.

B.

The ethical perspective that suggests that organizational decisions should be made in accordance with established rules or guidelines is known as __________. A. the self-interest view, B. the justice view, C. the rights view, D. the integrative social contracts view