MGMT - Chapter 10, Chapter 8 MGT 405, Chapter 7, mgmt Chapter 9 (strategic mgmt mc)

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Southwest Airlines began its no frills, no meals strategy in the late 1960s as a direct assault on the major carriers of the day. What type of competitive action does this represent? A. A tactical action because it is a refinement of an existing strategy. B. A strategic action because is includes a refinement of an existing strategy. C. A strategic action because it was a breakthrough innovative offer. D. A guerilla offensive because it is fast and will surprise its rivals.

A. A tactical action because it is a refinement of an existing strategy.

18. Which of the following is a disadvantage of a functional type of organizational structure? A. Differences in functional orientation may impede communication and coordination. B. Use of managerial and technical talent is inefficient due to pooling of expertise in functional areas. C. Decision making is centralized at the top of the organization. D. Managers tend to be overly concerned with long-term strategies that minimize the importance of functional area strengths.

A. Differences in functional orientation may impede communication and coordination.

According to the text, which of the following might does not make it difficult for entrepreneurial firms to effectively pursue a strategy of differentiation? A. Incumbent firms are constantly seeking opportunities to specialize in market niches. B. Differentiation strategies are often expensive to enact. C. It may be difficult for a young firm to establish a strong brand identity. D. Implementing superior new technologies may be challenging for entrepreneurial firms.

A. Incumbent firms are constantly seeking opportunities to specialize in market niches.

______________ provide(s) a key avenue for growth for many young and small firms through partnering to obtain resources and/or expand into new markets. A. Strategic alliances B. Bootstrappers C. Lone wolf entrepreneurs D. Research & development

A. Strategic alliances

37. According to author, Jeffrey Pfeffer, which of the following is not an advantage of teams? A. Teams interact so closely and therefore coordination and integration becomes unnecessary. B. Teams substitute peer-based control for hierarchical control of work. C. Teams often develop more creative solutions, because they share. D. Teams permit the absorption of administrative tasks previously performed by specialists.

A. Teams interact so closely and therefore coordination and integration becomes unnecessary.

Pandora entered the radio business in 2000 using the Music Genome Project system that analyzes music for its underlying traits as a means to distinguish itself. It was using ______________ entry strategy. A. a pioneering B. an imitative C. an adaptive D. a creative

A. a pioneering

A firm is considering a large price cut on its leading product as a way to gain market share. One executive strongly disagrees with the price cut. He observes that they are in the same marketplace as their rivals and do not have any competitive advantages in their cost structure. If they cut prices, their competitors will likely do the same. The end result is that everyone will make less money. These arguments are an example of ________________. A. a strategy of forbearance B. a strategy of co-opetition C. a hardball strategy whereby competitive actions are not undertaken without a clear advantage D. a weakness strategy that leads a company into constant decline

A. a strategy of forbearance

57. In the ambidextrous firm, if managers direct their efforts primarily at ________ , they are likely to miss out on promising business opportunities. A. alignment B. adaptability C. structure D. opportunities

A. alignment

Private individuals who provide seed capital to young ventures are known as _____________. A. angels B. gazelles C. cash cows D. rising stars

A. angels

51. If a firm outsources some parts of its value chain in order to reduce costs and increase quality and at the same time engages in multiple alliances to penetrate new markets, this is a example of a firm using a ________ of organizational types. A. combination B. boundaryless consortium C. bounded consortium D. barrier free collection

A. combination

33. A global start-up faces many management challenges including A. communication and coordination across time zones. B. pressure to perform internally all primary activities of the value chain. C. assuring financing from home country only. D. hiring only from home country.

A. communication and coordination across time zones.

Intense rivalry involving actions and responses among similar competitors vying for the same customers in a marketplace is known as _____________. A. competitive dynamics B. resource similarity C. threat of substitutes D. pioneering new entry

A. competitive dynamics

48. Which of the following is not a disadvantage of virtual structures? A. difficulty in individual and organizational knowledge sharing B. potential loss of operational control among partners C. loss of strategic control over emerging technology D. difficulty in determining where one company ends and another begins due to close interdependencies

A. difficulty in individual and organizational knowledge sharing

24. Strategic business unit (SBU) and holding company structures result from extensive A. diversification. B. vertical integration. C. international expansion. D. organizational flattening.

A. diversification.

5. A strategy of related diversification requires most firms to organize around geographical areas or product lines. This type of organizational growth leads to a(n) ________ structure. A. divisional B. functional C. matrix D. international

A. divisional

When an industry is mature, a ______________ strategy is considered to be one of the most effective approaches for a new entrant. A. focus B. differentiation C. overall low-cost D. small business

A. focus

26. A matrix organizational structure is characterized by a combination of the __________ and ___________. A. functional structure; divisional structure B. simple structure; functional structure C. simple structure; divisional structure D. holding company structure; divisional structure

A. functional structure; divisional structure

Square provides a means for small businesses to process credit and debit card sales without signing up for a traditional credit card arrangement of monthly fees and minimum charges. It used which new entry strategy to enter the market initially? A. imitative B. pioneering C. adaptive D. differentiated .

A. imitative

Seeking products or services that have been successful in one market and introducing the same basic product or service in another segment of the market is referred to as _____________. A. imitative new entry B. adaptive new entry C. proactive new entry D. pioneering new entry

A. imitative new entry

16. Functional structures are usually found in organizations where there A. is high volume production. B. are unrelated product lines or service offerings. C. is very little vertical integration. D. there exists a strong need to decentralize decision making.

A. is high volume production.

According to a study by the Kaufmann Foundation, which of the following is the largest source of funding for businesses that have been operating at least five years? A. loans B. venture capital C. public financing D. angel financing

A. loans

13. The appropriateness of the type of organizational structure depends upon the ________ and __________ of growth. A. nature; magnitude B. definition; accessibility C. accessibility; nature D. nature; definition

A. nature; magnitude

1. In large organizations, a strategy of diversification requires a need to reorganize around _______ or ________ . A. product lines; geographic markets B. product lines; competition C. competitor lines; geographic markets D. distribution lines; competitor markets

A. product lines; geographic markets

50. Organizations generally tend to become internally focused when faced with __________ and __________ . A. resource scarcity; declining performance B. internal pressures; improving performance C. resource abundance; declining performance D. external pressures; resource abundance

A. resource scarcity; declining performance

23. Important advantages of a holding company structure include A. savings in personnel and overhead expenses associated with a small corporate office. B. a high level of awareness at the corporate office of issues facing individual divisions. C. a high level of control of division executives by executives at the corporate level. D. gaining synergistic benefits across businesses.

A. savings in personnel and overhead expenses associated with a small corporate office.

Vision is an important element of entrepreneurial leadership because _____________. A. the entrepreneur has to envision realities that do not yet exist B. a vision statement must be part of the documentation used to obtain venture financing C. organizations cannot function without a detailed and operational vision D. banking institutions require it

A. the entrepreneur has to envision realities that do not yet exist

49. Coca-Cola, Ford Motor Company, H. J. Heinz, Nike, and Procter & Gamble are working together to develop plant-based plastics. Each company brings its own competency to the table. This collaboration is an example of a ______________ organization. A. virtual B. modular C. horizontal D. vertical

A. virtual

46. A virtual organization may be most appropriate for firms A. whose strategies require merging technologies. B. whose product life cycles are just beginning. C. who have no need to get to market quickly with new offers. D. who have no need to meet competitive pressures.

A. whose strategies require merging technologies.

Which of the following statements about venture capital is not true? A. Entrepreneurs raise venture capital by selling shares of ownership in their business. B. Venture capital is a form of public equity financing. C. Venture capital is used to finance rapid growth or large capital expenditures. D. Venture capital groups can often provide helpful management advice.

B. Venture capital is a form of public equity financing.

One of the ways entrepreneurs achieve success is by using resources more efficiently. This is an example of how entrepreneurs use ______________ strategy. A. an imitative B. a low-cost leader C. a differentiation D. a combination

B. a low-cost leader

According to the text, for an entrepreneurial start-up to be successful, three ingredients are critical. What are they? A. good ideas, a team of investors, and a business plan B. a viable opportunity, available resources, and a qualified and motivated founding team C. an opportunity, a marketing plan, and office space D. management, marketing, and money

B. a viable opportunity, available resources, and a qualified and motivated founding team

56. In an ambidextrous firm, if too much focus is placed on ___________ the firm with suffer low profitability in the short run. A. alignment B. adaptability C. structure D. opportunities

B. adaptability

Which of the following is NOT one of the characteristics of an entrepreneurial opportunity? A. attractive B. affordable C. achievable D. value creating

B. affordable

19. Which of the following is an advantage of a divisional type of organizational structure? A. efficient use of managerial and technical talent B. an enhanced ability to respond quickly to changes in the external environment C. high degree of emphasis on long-term performance D. uniformity in image and quality across divisions

B. an enhanced ability to respond quickly to changes in the external environment

4. When an organization with a functional structure diversifies into related product-markets, it generally A. maintains its functional structure. B. develops a divisional structure. C. develops a matrix structure. D. develops a worldwide product-division structure.

B. develops a divisional structure.

3. When an organization with a simple structure increases its sales revenue and volume of outputs, it is most likely to develop a ________ structure. A. divisional B. functional C. product-market D. geographic

B. functional

The Wall Street Journal and the New York Times have seen the intensity of their rivalry increase. One factor driving this is that the Wall Street Journal has moved from financial news reporting to general national and global news reporting and finally, to adding local New York news. The rivalry of these two news providers has increased due to _____________. A. increased dynamic capabilities B. increased market commonality C. erosion of first mover advantages D. the choice of tactical over strategic actions

B. increased market commonality

15. A simple structure is characterized by A. high specialization and low centralization. B. low specialization and high centralization. C. low formality and low creativity. D. high formality and low centralization.

B. low specialization and high centralization.

55. According to the study by O'Reilly and Tushman, effective ambidextrous structures had all of the following attributes except A. a clear and compelling vision. B. managerial efforts were highly focused on revenue enhancement. C. cross-fertilization among business units. D. established units were shielded from the distractions of launching new businesses

B. managerial efforts were highly focused on revenue enhancement.

Aircraft makers Boeing and Airbus have a high degree of ______________ because they make very similar products and have many buyers in common. A. dynamic capabilities B. market commonality C. first mover advantages D. equity funding

B. market commonality

27. Complicated working relationships, intense power struggles, and excessive reliance on group processes are disadvantages of which type of organizational structure? A. divisional B. matrix C. holding company D. functional

B. matrix

41. What is the name of the practice that many modular organization use to grow? A. operational effectiveness B. outsourcing C. strategic leveraging D. strategic enabling

B. outsourcing

Smell-O-Vision designed an invention to pump odors into movie theatres. It flopped, in spite of its innovativeness. What kind of new entry strategy was the company using to penetrate the market? A. imitative B. pioneering C. adaptive D. differentiated

B. pioneering

When launching a new venture, finding a way to begin doing business must ______________ generate cash flow, build credibility, attract good employees, and overcome the liability of newness. A. slowly B. quickly C. steadily D. painlessly

B. quickly

When any two firms have both a high degree of market commonality and highly similar resources, a ______________ threat is present. A. weaker competitive B. stronger competitive C. successful marketing D. stronger marketing

B. stronger competitive

29. Generally speaking, discussions of the relationship between strategy and structure strongly imply that A. strategy follows structure. B. structure follows strategy. C. strategy can effectively be formulated without considering structural elements. D. structure typically has a very small influence on the strategy of a firm.

B. structure follows strategy.

34. As firms expand into foreign markets, they generally follow a pattern of change in structure that parallels the changes in their strategies. Which one of the following is not a major contingency that influences the structure they choose? A. the type of strategy that is driving the company foreign operations B. the research and development budget commitment C. product diversity D. the extent of the company dependence on foreign sales

B. the research and development budget commitment

31. If an international firm has a global strategy and a relatively low level of product diversity, the best choice for its organizational structure is a(n) _________ structure. A. worldwide functional B. worldwide product division C. worldwide matrix D. international division

B. worldwide product division

39. Which of the following is not a disadvantage of the barrier-free form of organization? A. Lack of strong leadership can lead to coordination problems. B. Democratic process can be time-consuming and difficult to manage. C. Additional integration issues result in a slower response to market changes. D. If trust among employees is not sufficiently high, organizational performance may suffer.

C. Additional integration issues result in a slower response to market changes.

17. Which of the following is an advantage of a functional type of organizational structure? A. Decentralized decision-making enhances an organization-wide perspective across functions. B. It facilitates the development of general management talent. C. Pooling of specialists enhances coordination and control. D. It is easy to establish uniform performance standards.

C. Pooling of specialists enhances coordination and control.

Which of the below best describes the competitive tendencies of small firms? A. Small firms tend to signal their competitive actions long before they launch those actions, because they lack legitimacy in the marketplace B. Small firms typically have more resources available as they undertake competitive attacks than do large firms. C. Small firms are more nimble and can respond quickly to competitive attacks. D. Small firms are more nimble and cannot respond quickly to competitive attacks.

C. Small firms are more nimble and can respond quickly to competitive attacks.

Which of the following terms is used to refer to opportunities that are practical and physically possible? A. durable B. valuable C. achievable D. sustainable

C. achievable

In 2005, Plum Organics entered the market with organic baby food and snack foods for children. It now has over 20 products and is listed at number 63 on the Inc 500 list of fastest growing private companies. It used which new entry strategy in 2005? A. imitative B. pioneering C. adaptive D. differentiated

C. adaptive

Tom Monahan, a business creativity coach, says that every new idea is merely a spin of an old idea. A company that enters the market by offering a product or service that is somewhat new and sufficiently different in order to create value for customers by capitalizing on current trends is using which new entry strategy? A. imitative B. pioneering C. adaptive D. differentiated

C. adaptive

Generally speaking, the opportunity recognition process consists of two phases of activity. They are ______________ and _____________. A. global search; recycling profits B. value creation; affordability C. discovery; evaluation D. global search; valuation

C. discovery; evaluation

Amazon is an example of a company that used the differentiation strategy to enter the market. The differentiation features included _____________. A. minimal customer service B. traditional back office logistics C. exceptional customer service D. traditional delivery logistics

C. exceptional customer service

52. Tools and techniques used to achieve effective coordination and integration of key activities in an organization include all of the following except A. horizontal organization structures. B. horizontal systems and processes. C. horizontal diversification. D. communications and information technologies.

C. horizontal diversification.

12.Organizations that make it to the growth stage design strategies to A. reduce the tendency to increase operational scope. B. leave exiting product-market domains. C. increase the overall scope of operations. D. reduce the commitment to new product-market domains.

C. increase the overall scope of operations.

28. Which of the following is considered to be an advantage of a matrix structure? A. the layering of matrices B. increased clarity in reporting relationships C. increased responsiveness to the market D. fewer power struggles and reduced conflict

C. increased responsiveness to the market

The U.S. Small Business Administration supports small business through all of the following EXCEPT A. government contracting. B. underwriting loans. C. investing venture capital. D. training and counseling.

C. investing venture capital.

According to the text, new ventures launched by entrepreneurial teams are more likely to be successful than ventures launched by _____________. A. established corporations B. bootstrappers C. lone wolf entrepreneurs D. individual investors

C. lone wolf entrepreneurs

44. Nike is a company that makes use of the concept of product expatriates. Product expatriates are A. managers from the home country sent abroad to oversee the marketing of company products. B. managers from suppliers who come to work at the company headquarters. C. managers of the company sent abroad to work at the plants of its suppliers. D. local nationals hired by the company in the countries from which it sources products.

C. managers of the company sent abroad to work at the plants of its suppliers.

36. Which of the following is not a boundaryless organizational design? A. virtual B. modular C. matrix D. barrier-free

C. matrix

40. What type of organization is defined as a central hub surrounded by networks of outside suppliers and specialists? A. matrix organization B. virtual organization C. modular organization D. barrier-free organization

C. modular organization

The process of identifying, selecting, and developing new venture opportunities is known as _____________. A. innovativeness B. bootstrapping C. opportunity recognition D. brainstorming

C. opportunity recognition

10. As illustrated in the opening case for Chapter 10, Boeing lost a lot of control and therefore incurred high operating costs for its build out of the 787 Dreamliner, because it _________ design and manufacturing. A. on-shored B. internalized C. outsourced D. internationalized

C. outsourced

Which of the following is NOT a common new entry strategy according to the text? A. imitative new entry B. adaptive new entry C. proactive new entry D. pioneering new entry

C. proactive new entry

25. Strategic business unit (SBU) structures are best suited for corporations pursuing __________, whereas holding company structures are best suited for companies with _________ strategies. A. product-market diversification; international B. international diversification; product-market C. related diversification; unrelated diversification D. unrelated diversification; related diversification

C. related diversification; unrelated diversification

9. Structures help to ensure that __________ are used effectively in accomplishing the mission of the organization. A. strategies B. relationships C. resources D. boundaries

C. resources

11. Which of the following activities is not identified structure? A. managerial B. executive C. social responsibility D. administrative

C. social responsibility

21. An organization such as ConAgra that has dozens of different divisions with similar products will probably have the greatest success with which form of organization structure? A. functional structure B. matrix structure C. strategic business unit structure D. holding company structure

C. strategic business unit structure

32. The relationship between strategy and structure can be best described as A. strategy determines structure but structure does not determine strategy. B. structure determines strategy but strategy does not determine structure. C. strategy and structure influence each other. D. a third force determines both strategy and structure.

C. strategy and structure influence each other.

38. Organizations are increasingly using teams for many reasons. The difference between a good team and an outstanding team has been found to be A. the combined technical skills of the members. B. similarities in the way team members solve problems. C. the way team members treat each other. D. similarities in the age and experience of team member.

C. the way team members treat each other.

53. Effective ambidextrous organizations have alignment, which means that A. employees are rewarded according to both profit and sales growth. B. managers are focused on growth opportunities. C. there is a clear sense of how value is being created in the short-term and how activities are properly integrated and coordinated. D. divisional-level goals are consistent with overall corporate goals.

C. there is a clear sense of how value is being created in the short-term and how activities are properly integrated and coordinated.

7. The two vital ongoing activities necessary for creating boundaryless organizations that managers today must concern themselves with are A. financial returns and marketplace value. B. market share and shareholder value. C. type of structure, mechanisms, processes, and techniques for enhancing permeability. D. product marketability and capital structure.

C. type of structure, mechanisms, processes, and techniques for enhancing permeability.

30.. If an international firm has a multidomestic strategy and a relatively high level of product diversity, the best choice for its organizational structure is a(n) structure. A. worldwide functional B. worldwide product division C. worldwide matrix D. international division

C. worldwide matrix

14. Which of the following statements about simple organizational structures is false? A. Small firms with a narrow product-market scope will adopt such a structure. B. Decision making authority is highly centralized. C. There is little specialization of tasks. D. Creativity and individualism are rare.

D. Creativity and individualism are rare

Which of the following is not a factor that makes it more difficult for new ventures to be successful as differentiators? A. The strategy is thought to be expensive to put into action. B. Establishing a brand, important to a differentiation strategy, is thought to be expensive. C. Superior innovation is often very costly. D. Customer service is often costly, but it does not affect a differentiation strategy.

D. Customer service is often costly, but it does not affect a differentiation strategy.

Based on statistics reported in the text, which of the following statements is not true? A. Firms that obtain venture-capital funding receive an average of over $1 million each. B. Total investment in start-up firms averages about $80,000 in the first year of the activity of the firm. C. Among the 100 fastest-growing new businesses identified by Entrepreneur magazine, 61 percent obtained start-up funding from personal savings. D. Ninety percent of the companies financed with venture capital funds fail.

D. Ninety percent of the companies financed with venture capital funds fail.

22. Which of the following is not an advantage of a strategic business unit (SBU) type of organizational structure? A. Divisions with similar products, markets, or technologies are formed into homogeneous groups that can achieve synergies. B. Divisional executives can respond quickly to market changes and opportunities. C. Planning and control by the corporate office is more manageable. D. The corporate office is more removed from the individual divisions.

D. The corporate office is more removed from the individual divisions.

20. Which of the following is not a disadvantage of a divisional type of organizational structure? A. It can be very expensive compared to a functional organizational structure. B. There is a strong tendency for divisions to focus on short-term performance. C. There can be dysfunctional competition among divisions. D. There is separation of strategic and operating control.

D. There is separation of strategic and operating control.

Which of the following is NOT one of the three characteristics of entrepreneurial leadership mentioned by the text? A. vision B. dedication and drive C. commitment to excellence D. clarifying job responsibilities

D. clarifying job responsibilities

45. The phrase that best defines a virtual organization is a(n) A. dot.com company. B. type of modular structure. C. organization that uses information technology to integrate different functions. D. continually evolving network of independent companies.

D. continually evolving network of independent companies.

When an opportunity is attractive long enough for it to be successfully developed and deployed, it is said to be _____________. A. value creating B. affordable C. achievable D. durable

D. durable

Entrepreneurial firms that pursue a low-cost leadership strategy use all of the following to achieve lower costs except _____________. A. cost-saving technology such as the Internet B. simple organizational structures C. rapid decision making D. extensive investment in order to achieve economies of scale

D. extensive investment in order to achieve economies of scale.

Which of the following is not a common source of new business opportunities? A. current or past work experiences B. suggestions by family or friends C. chance event D. future work

D. future work.

47. Virtual organizations ____________ whereas modular organizations ______________. A. are usually permanent; are usually temporary B. accept interdependent destinies; pursue collective strategies C. pursue collective strategies; forfeit strategic control D. give up part of their strategic control; retain full strategic control

D. give up part of their strategic control; retain full strategic control

35. Which one of the following is not a primary types of organizational structures used to manage the international operations of a company? A. international division B. worldwide matrix C. geographic-area division D. home country product division

D. home country product division

42. What advantages does outsourcing not provide an organization? A. accessing best in class goods and services B. enabling rapid expansion with relatively low capital investment C. focusing scarce resources on core competencies D. improved buyer positioning

D. improved buyer positioning

43. Which of the following is not a strategic risk of outsourcing? A. loss of critical skills B. loss of cross-functional skills C. loss of control over a supplier D. loss of non-vital functions

D. loss of non-vital functions

BCG authors Stalk and Lachenauer published a book in which they listed competitive strategy for winning against incumbent rivals. Which of the following is not one of their suggested strategies? A. devastate profit sanctuaries of rivals B. plagiarize with pride and deceive the competition C. unleash massive and overwhelming force D. lower competitor costs

D. lower competitor costs

54. Effective ambidextrous organizations maintain adaptability, which means that A. managers are focused on growth opportunities. B. there is a clear sense of how value is being created in the short-term and how activities are properly integrated and coordinated. C. divisional-goals are consistent with overall corporate goals. D. managers must remain proactive in expanding and/or modifying their product-market scope to anticipate and satisfy market conditions.

D. managers must remain proactive in expanding and/or modifying their product-market scope to anticipate and satisfy market conditions.

Which of the following is the most important resource for a start-up activity? A. social recognition B. land C. personnel D. money

D. money

6. Successful organizations create _____ boundaries among the _______ activities as well as between the organization and its external customers, suppliers, and alliance partners. A. impermeable; external B. impermeable; internal C. permeable; external D. permeable; internal

D. permeable; internal

The majority of entrepreneurial start-ups are financed through monies from _____________. A. bank financing B. SBA loans C. venture-capital financing D. personal savings and the contributions of family and friends

D. personal savings and the contributions of family and friends

Which of the following is not a primary source of financing for entrepreneurial start-ups? A. investments by family and friends B. personal savings C. private investors D. public equity

D. public equity

The new entry strategy that a firm choses is dependent upon the ______________ and the ______________ of the new business concept. A. riskiness; cost B. riskiness; potential sales C. idea; innovativeness D. riskiness; innovativeness

D. riskiness; innovativeness

8. Organizational structure refers to the formalized patterns of interactions that link company ________ , _______ , and _______ . A. processes; mechanisms; techniques B. tasks; mechanisms; techniques C. processes; people; mechanisms D. tasks; technologies; people

D. tasks; technologies; people

2. Which of the following is not a primary factor that a large firm with international operations should consider when choosing the appropriate structure for its organization? A. the extent of international expansion B. the type of strategy (global, multidomestic, or transnational) C. the degree of product diversity D. the degree of market diversity

D. the degree of market diversity

Which of the following is not one of the reasons a company might launch new competitive actions? A. to obtain first mover advantages B. to improve market position C. to capitalize on growing demand D. to find new sources of raw materials

D. to find new sources of raw materials


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