MGT 363 Exam 2
Advantages of Group Decision Making
- More information and knowledge are available. - More alternatives are likely to be generated. - More acceptance of the final decision is likely. - Enhanced communication of the decision may result. - Better decisions generally emerge.
Disadvantages of Group Decision Making
- The process takes longer than individual decision making, so it is costlier. - Compromise decisions resulting from indecisiveness may emerge. - One person may dominate the group. - Groupthink may occur - Equality bias, which causes individuals to treat all group members as equally competent.
Widget Corp. has five strategic business units (SBUs)—informatics, shipping, third-party logistics, structural materials, and oil exploration. The third-party logistics unit is quite profitable in spite of operating in a slow-growing market. It provides funds for the operation of the other business units as well. In the context of the BCG matrix, which of the following categories of SBUs best describes the third-party logistics unit?
Cash cows
CLM is a leading cable operator. The company has recently declared bankruptcy and its needs to restructure its processes to attain more flexibility and allow it to raise capital. Since CLM has identified its need for strategic change, what would be CLM's next step in the strategy-making process?
Conducting a situational analysis
Over the long run, which of the following is the best way for a company to sustain competitive advantage?
Creating innovation streams
Amanda Industries has five strategic business units (SBUs)—online retail, shipping, third-party logistics, structural materials, and oil exploration. The oil exploration unit is costing the company a huge amount of money. It is neither making any profit at present nor will it make any profit in the future as the oil fields are diminishing and the company has a small share in this market. In the context of the BCG matrix, which of the following categories of SBUs best describes the oil exploration unit?
Dogs
Effective action plans precede the development of commitment in the planning process
False
The first step in the planning process is to track progress toward goal achievement
False
The planning process ends with developing effective action plans.
False
Damien Richard is the CEO of QuickShop, a chain of supermarkets. QuickShop is soon going to employ the latest technology, which will help customers reduce their shopping time by an ask-and-get approach. In this approach, a customer has to just name the product, and the robots will bring it to them. QuickShop's employees are worried about losing their jobs if this technology is employed. On speaking to several of the employees, Damien finds that many of them have misguided opinions about the implementation of the technology, causing them to have insecurities. What should Damien do to help them adapt to the change more easily?
He must educate his employees about the need for the change and explain its benefits to them before employing it
According to Porter's industry forces, which of the following is likely to occur when new companies can enter an industry easily?
Industry attractiveness is likely to decrease
In the decision-making process, which of the following best defines the term maximizing?
It refers to choosing the best alternative course of action in decision making
What is a commonly used technique for increasing goal commitment?
Making the goals public
Which of the following is a characteristic of the inaction stage of organizational decline?
Managers wrongly assume that they can easily correct the problems, so they don't feel the situation is urgent
What type of plan is used in this statement? We are known for our operating efficiency and for reducing insurance costs for our customers.
Mission statement
What type of plan is used in this statement? We protect our clients' homes and health with innovative insurance products.
Mission statement
What type of plan is used in this statement? We provide low-cost, high-quality insurance to underserved populations.
Mission statement
Advantages of group decision making
More alternatives are likely to be generated, more acceptance of the final decision is likely, more information and knowledge are available, enhanced communication of the decision may result
When evaluating alternatives, managers should be careful
Not to use satisficing, rather than maximizing, as a decision-making approach
What type of plan is used in this statement? Each human resource employee will use advertisements and personal networking to attract at least 10 qualified applicants per open position.
Operational plan
What type of plan is used in this statement? Each sales agent will personally contact three potential clients in an underserved community every day.
Operational plan
What type of plan is used in this statement? Sales agents will survey current property policyholders to determine what kind of health insurance they have.
Operational plan
_____ are the day-to-day plans for producing or delivering an organization's products and services
Operational plans
Which of the following occurs in the adoption stage of organizational development interventions?
Organizational members accept ownership and responsibility for the change, which is then carried out through the entire organization
In the context of corporate-level strategies, which of the following exemplifies diversification?
Owning stocks in a variety of companies in different industries
AB Cutters has five strategic business units (SBUs)—marine terminals, trucking, third-party logistics, energy, and oil exploration. Because of a small market share, the company is not making much profit in the trucking sector, which otherwise is a fast-growing market. In the context of the BCG matrix, which of the following categories of SBUs best describes the trucking sector?
Question marks
_____ is a process of weighing decision criteria in which each criterion is compared with every other criterion
Relative comparisons
What type of plan is used in this statement? We will actively seek to acquire an East Coast life-insurance company that has a diverse clientele.
Strategic plan
What type of plan is used in this statement? We will eliminate redundancies throughout the corporation to decrease our overall expenses by 20%.
Strategic plan
What type of plan is used in this statement? We will reward innovation wherever it occurs throughout Allworld.
Strategic plan
What type of plan is used in this statement? Allworld's Property and Health Insurance Divisions will work together to create and offer a new form of combined home/health insurance product that dramatically reduces the cost of health insurance.
Tactical plan
What type of plan is used in this statement? The Human Resource Division will reduce the overall cost of fulfilling employment requisitions by eliminating the use of outside recruiting agencies.
Tactical plan
What type of plan is used in this statement? The Sales Division will routinely monitor the percentage of new clients in underserved populations.
Tactical plan
Supernova Inc. attempts to resolve a major technical issue in its database. To identify the best way to resolve the issue, the company assembles technical experts with different skill sets. The problem was explained to each of the experts and their individual opinions were collected, and a questionnaire based on the problem was given to each of them. The answers of all the experts were analyzed and then sent back to the experts for their final opinions. Identify the strategy that is being used by Supernova to generate solutions.
The Delphi technique
When defining the problem, you should be careful
To fully understand the gap between current and ideal states
When generating alternative courses of action, you should be careful
To generate new ideas, instead of considering only tried and true solutions
The final step in developing an effective plan is to maintain flexibility
True
A sustainable competitive advantage is achieved when
a firm's competitors cannot duplicate the value offered by the firm to its customers
Policy
a general course of action to be taken in response to a particular event or situation, does not contain specific steps or actions that should or should not be done, but it should contain information about the philosophy underlying it
Funk Booster, a company that manufactures vehicle boosters, launched a new product, NOS3. This launch was aimed at occupying the shares held by Funk Booster's competitor, Fly-Wagon's, product, NOS-A. To prevent Funk Booster from occupying their shares, Fly-Wagon launched a new product, NOS-X, which was an advanced version of NOS-A. Which of the following strategies was used by Fly-Wagon to defend its market share?
a response strategy
If a technological innovation follows the typical S-curve pattern of innovation, which of the following will indicate that small amounts of effort, in terms of money or research and development, will lead to significant increase in technological performance?
a steeper slope at the midpoint of the curve
BallGame manufactures premium golf balls and prices these balls at twice the price of ordinary golf balls. The premium balls sell exceptionally well because customers believe that its patented three-layer construction is capable of increasing the ball's drive. None of the other golf ball manufacturers can produce the same quality. The patent on these golf balls gives BallGame _____
a sustainable competitive advantage
_____ is a process of weighing decision criteria in which each criterion is compared with a standard or ranked on its own merits
absolute comparisons
Sivinch is a manufacturer and marketer of cosmetics. To ensure that its products stand out from other similar brands, Sivinch focuses on educating its customers on general skin and hair care. Its salespeople are trained to answer questions and help customers find solutions to their skin and hair problems. This has helped Sivinch _____
achieve a competitive advantage
In the planning process, a(n) _____ lists the specific steps, people, resources, and time period for accomplishing a goal
action plan
Floortree, a company that manufactures floor tiles, offers customized lightweight and high-strength tiles in different colors and shapes to compete with its rival company's high-strength tiles. In this scenario, which of the following strategies is FloorTree using to reduce its rival's market share?
an attack strategy
If a technological innovation follows the S-curve pattern of innovation, a flat slope at the beginning of the curve indicates that
an increased effort can bring only small improvements in its performance
GlycoAll, a company that produces energy drinks, has started manufacturing and selling energy bars for the American market. The products turn out to be a huge success. Inspired by GlycoAll's success, Keith & Sons, a producer of energy drinks in the U.K., starts to sell energy bars for the European market. In the context of adaptive strategies, Keith & Sons would most likely be categorized as a(n) _____
analyzer
Plans
are meant to be guidelines for action
There are eight general steps for organizational development interventions. The third step is _____
assessment and feedback
According to Porter's industry forces, _____ is a measure of the influence that suppliers of parts, materials, and services to firms in an industry have on the prices of these inputs
bargaining power of suppliers
Touchstone Hardware was a popular company that specialized in making floppy disks. At the start of the 21st century, when people began switching to CDs and DVDs to store their information, it was brought to the notice of senior managers that the company needed to switch its focus to the production of new storage devices. However, the managers did not feel it was important to make this switch. They dismissed CDs and DVDs as just a passing phase. Which of the following stages of organizational decline best illustrates the current situation of the company?
blinded stage
_____ is a type of quantitative planning through which managers decide how to allocate available money to best accomplish company goals
budgeting
An individual who is formally in charge of guiding a change effort in an organization is referred to as a _____
change agent
Mark was the person who was in charge of the plan to reinvent Supernova Automobiles. He played a major role in the company making a shift to building solar-powered automobiles from making regular fuel-powered cars. After the change intervention gave satisfactory results, Mark left the project and started working on another project. In the context of organizational development, Mark is a(n) _____
change agent
Satisficing
choosing the first option that seems acceptable, rather than the best option
Which of the following methods for managing resistance to change should only be used as a last resort or under crisis conditions?
coercion
Aries Inc. is a computer manufacturer that has been in the market for several years. Many other companies have started manufacturing compact, and portable gadgets that are easier to use than desktop computers. Aries, however, has been reluctant to adopt new strategies because it thinks that its desktops were selling well when it first started and will continue to sell the same way even if new competitors and better products enter the market. Which of the following concepts is illustrated in this scenario?
competitive inertia
_____ refers to a reluctance to change strategies or competitive practices that have been successful in the past
competitive inertia
The _____ assumes that innovation is a predictable process that can be planned using a series of steps and reducing the time it takes to complete those steps can speed up the innovation process
compression approach to managing innovation
In any organization, _____ are the less visible, internal decision-making routines, problem-solving processes, and organizational cultures that determine how efficiently inputs can be turned into outputs
core capabilities
_____ are the central companies in a strategic group
core firms
Levio is a company that develops mobile applications. It aims to become the market leader in its field. Levio focuses on developing a culture where workers are made to feel that new ideas are welcome. It plans to do this by offering challenging work and supervisory encouragement to its workers. In this scenario, the company is attempting to develop a(n) _____
creative work environment
WindWings is a company that manufactures and markets flutes, a product with a steady demand rate. It is so successful at what it does that the company controls 85 percent of the world's flute industry. In terms of adaptive strategies, WindWings would most likely be categorized as a(n) _____
defender
Jonathan is a manager at a departmental store. In recent weeks, the sale of goods in his store has decreased considerably. He does not know the reason behind this decline. As per the decision-making process, the next step that Jonathan must take is to
define the problem
Discontinuous change is characterized by _____, in which an old technology and several different new technologies compete to establish a new technological standard or dominant design
design competition
Before TREX Mobiles launched its latest smartphone, it built a prototype of the phone and tested its performance repeatedly, improving the model each time. In the context of the experiential approach to innovation, this process is called _____
design iteration
Which of the following is an aspect of the experiential approach to innovation?
design iteration
In the planning process, after developing goal commitment, a manager must
develop an effective action plan
Martha is a manager at Healier Life Inc. She drafts a list of specific goals that she wants her company to achieve by the end of the year. In the context of planning, the next step that Martha should take is to
develop commitment to those goals
_____ is a decision-making method that creates c-type conflict by forcing decision makers state the assumptions of a proposed solution and generate a solution that is the opposite of that solution
dialectical inquiry
_____ is the rivalry between two companies that offer similar products and services, acknowledge each other as rivals, and act and react to each other's strategic actions
direct competition
When Fletcher Motors, an automobile manufacturer, learned that it took longer than any other manufacturer to assemble a vehicle, it purchased existing flexible manufacturing systems to replace its older ones. Which stage of the technology cycle is illustrated in the scenario?
discontinuous change
In the context of the planning process, _____ are primary goals
distal goals
SpokedWheels Inc. has introduced a specialized mountain bike in the market. Two-thirds of its profits come from the sale of mountain bikes. The company is recognized worldwide for its ability to design and produce superior mountain bikes that are tougher, more durable, and more reliable than its competitors'. This ability of producing superior mountain bikes is the company's _____
distinctive competence
When resistance to change is based on insufficient, incorrect, or misleading information, which of the following is the best approach that a manager can use to manage resistance to change?
education and communication
Planning
encourages the development of task strategies
When significant improvements in performance can only be gained through radical new designs or new performance-enhancing materials, it is likely that a company is at the _____
end of the technology cycle
The _____ assumes that innovation is occurring within a highly uncertain environment
experiential approach to innovation
Xamber Tools, a metal tool manufacturing firm, is facing a threat of organizational decline due to the rising costs of raw materials, decreasing profits and lower market share. To fix these problems, the management decides to cut costs of production to increase efficiency and profit. The cost cut does not help the company, and the company eventually files for bankruptcy. In this scenario, Xamber Tools is most likely in the _____ of organizational decline
faulty action stage
MCRS Toys manufactures learning toys and games exclusively for children in the age group of one to six years. In this scenario, the company is most likely using a(n) _____
focus strategy
In the context of the experiential approach to innovation, which of the following is true of design iteration?
frequent design iterations improve understanding
Portrance's iX processor is the latest installment in the Portrance microprocessor product line. It is fully backward compatible with the earlier versions of the microprocessor. Which of the following terms best describes this dominance of Portrance's new iX processor over its older versions?
generational change
A(n) _____ is a broad corporate-level strategic plan used to achieve strategic goals and guide the strategic alternatives that managers of individual businesses or subunits may use
grand strategy
The BCG matrix starts by recommending that while the substantial cash flows from cash cows last, they should be reinvested in stars to
help them grow even faster and obtain even more market share
Operational plan
identifies the steps individuals and front-line managers will take in support of tactical or higher-level organizational plans, very specific, someone with direct job experience—either the employee or an immediate supervisor—needs to set this plan
In the context of conflicts, c-type conflict is a disagreement that focuses on _____
issue-related differences of opinion
Which of the following statements is true about the compression approach to managing innovation?
it aims at consistent improvement of existing designs
What is a true statement about the Delphi technique?
it begins by assembling a panel of experts
What is a pitfall of planning?
it can impede change and prevent or slow needed adaptation
In terms of change tools and techniques, which of the following is true of organizational development?
it emphasizes employee participation in diagnosing, solving, and evaluating problems
A particular technology becomes the dominant design because of critical mass, which means that
it is used by most people
What is an accurate feature of the strategic objective of an organization?
it must stretch and challenge the organization
What is a true statement about electronic brainstorming?
it overcomes the problem of production blocking
What is a true statement about the nominal group technique?
it restricts c-type conflicts
A technology is most likely to become a dominant design if
it solves a practical problem
What is true about an organization's purpose statement?
it states the company's reason for existing
What is true about the strategic objective of an organization?
it unifies companywide efforts
Middle managers
management by objective and tactical plans
First level managers
operational plans, standing plans, single use plans
Plushvier Inc. plans to launch its product in five regional markets. In order to maximize profit and reduce loss, initially, the company makes small investments in all five markets. The investments made are small so that if a particular market fails to perform, then the company can discontinue its investment in that market and invest in markets that produce good returns. In this case, Plushvier Inc. is using _____
options-based planning
Garrison Motors Inc. developed a creative manufacturing technique that helps improve the efficiency of their production. It allows the company to produce more than one type of car from the same assembly line. In this scenario, the development of a new technique by Garrison Motors to improve its workflow efficiency is an example of _____
organizational innovation
_____ is the successful implementation of creative ideas in organizations
organizational innovation
In the decision-making process, one of the rules of brainstorming is that
other group members' ideas should be used to come up with even more ideas
Karen, the sales manager of an appliance store, informs Jonah, one of her salespeople, that she expects him to sell $50,000 worth of merchandise by the end of the quarter. Every week, Jonah provides Karen with a report on his progress. In this scenario, Karen is using _____ to track Jonah's progress
performance feedback method
After earning a profit of $10 billion, Tekmake decides to double its profits within the next five years. It lays out broad goals and develops a market penetration strategy to accomplish its goals. In this case, the process by which Tekmake is going to achieve this goal is called
planning
Alpha Inc. wants to expand its customer base. The chief executive officer (CEO) sets a target for all its sales units to increase sales by 50 percent by the next fiscal year. The CEO also lays out a scheme for the company to produce a new product within the next two years. In this case, which of the following functions of business management is the CEO most likely doing?
planning
Which of the following is an aspect of the compression approach to innovation?
planning
_____ are the standing plans that indicate the general course of action that should be taken in response to a particular event or situation
policies
The _____ is a corporate-level strategy that minimizes risk by diversifying investment among various businesses or product lines
portfolio strategy
In an organization, which of the following acts as a hindrance to a creative work environment?
presence of internal conflict
Margo works at Parker's Coffees. She is always the last person to leave the shop. Before closing the shop each evening, she follows these instructions: pour out all the leftover coffee, turn off and unplug all the coffeemakers, wash and dry all the coffee pots, wipe the counters, turn the store lights off, and lock the door. The instructions constitute a(n) _____
procedure
Dynamics Inc. is a company that specializes in household appliances. It is currently working on creating a new geyser that can heat water in less than five minutes. The company has developed a working model that is being tested for design, function, and reliability. In terms of the experiential approach to innovation, this working model is called a _____
product prototype
Ace Glue is a global innovation company. It manufactures a number of imaginative products which ranges from health care to office products. Its products are being sold in more than 100 countries and it continuously keeps searching for new market opportunities. It has also doubled its investment to market its products. In the context of adaptive strategies, Ace Glue is most likely to be categorized as a(n) _____
prospector
Strategic planning begins with the creation of a _____
purpose statement
In the context of sustainable competitive advantage, _____ are those resources that are not controlled or possessed by many competing firms
rare resources
_____ are companies that do not follow a consistent adaptive strategy but instead respond to changes in the external environment after they occur
reactor
_____ are usually the poorest performers among all the four kinds of industry-level adaptive strategies
reactors
In the context of managing change, _____ support the status quo of an organization
resistance forces
MilchMaan, a German dairy cooperative, covers an area of 500 acres. The organization is one of the best dairy cooperatives in the country. It recruits its employees from various top universities in the country and uses good quality equipment. In this scenario, the organization's processes, its employees, and its equipment are examples of its
resources
_____ are best defined as the assets, capabilities, processes, employee time, information, and knowledge that an organization uses to improve its effectiveness and efficiency
resources
Companies are more likely to adopt a(n) _____ when market commonality is large, and companies have overlapping products, services, or customers in multiple markets
response strategy
In terms of change tools and techniques, the General Electric workout is a special kind of _____
results-driven change
According to strategic reference point theory, the _____ aims to protect an existing competitive advantage
risk-avoiding strategy
Which of the following factors causes resistance to change?
self-interest
The first step in designing a plan that works is to
set goals
A _____ is an assessment of the strengths and weaknesses in an organization's internal environment and the opportunities and threats in its external environment
situational analysis
Distinctive competence
something that a company can make, do, or perform better than its competitors
Procedure
specific steps to be taken in response to a particular event, do not tell employees what they cannot do
Companies following a _____ would most likely try to improve the way in which they sell the same goods or services to the same customers
stability strategy
Taufuer Motors, a car manufacturer, has a detailed seven-step plan in place for dealing with defects in its cars. It believes that the plan can be used as long as the defects are completely rectified. This is an example of a _____
standing plan
Gemini Inc. has decided to decrease its product prices to respond to its competitor's strategy. To achieve this, the company needed to lower its manufacturing costs. However, the managers at Gemini have been buying expensive raw materials and hiring many employees. Which of the following best illustrates the situation at Gemini?
strategic dissonance
Top management is responsible for developing _____ that make clear how a company will serve customers and position itself against competitors in the next two to five years
strategic plans
Libra Travels regularly checks the prices at which other travel agencies sell their services to evaluate its position and make changes, if needed. Libra Travels uses the prices of other travel agencies as a
strategic reference point to measure its competencies
Diego is a manager in a company that manufactures electronic gadgets. He creates a plan to develop cost-effective production technologies over the next one year. The plan also specifies how the company can effectively utilize its people and resources from different departments, and how the budgets can be streamlined to accomplish the objective. His plan is consistent with that of the company's overall objective of increasing its production by 100 percent in the next five years. Diego is most likely developing a(n) _____
tactical plan
Plans that are used to direct behavior, efforts, and attention over the next six months to two years are known as _____
tactical plans
nominal group technique
team members independently rank or vote on ideas, and the idea with the highest average rank is selected
Feldman Films is a company associated with photography, and has been in business for the last 30 years. The invention and development of the digital camera forced Feldman Films to start thinking fresh. Feldman Films applied design thinking to strategy and innovation in response to the competitive threat from the digital camera. In this scenario, the development of the digital camera was a _____
technological discontinuity
During the last decade, as people sought to replace their obsolete floppy discs, there was an increase in sales in CDs, DVDs, pen drives, and portable hard discs. The replacement of floppy discs by other advanced storage devices is an example of _____
technological substitution
Strategic plan
tells you how the overall organization will achieve its mission, differs from a mission statement because it is an activity that is specifically tied to an accomplishment rather than an overarching philosophy, typically, very senior executives (CEO/CFO/COO or president) set strategic plans
Tactical plan
tells you what a large segment (a unit or division) of the organization expects to do in order to help accomplish strategic plans, covers only a part of the organization, not the entire organization, and a vice president or director typically sets this plan
Studies of hundreds of technological innovations have shown that nearly all technology cycles follow _____
the S-curve pattern of innovation
According to Michael Porter, which of the following industry forces determines industries' overall attractiveness and potential for long-term profitability?
the bargaining power of suppliers
Delphi technique
the best method to use for teams that do not meet face-to-face, systematically gathers judgments of experts to reach a decision on an issue or idea
Crossmart Inc. has been trying to protect itself from the negative effects of industry-wide competition by producing products at consistently lower prices than its competitors. However, it has not compromised on the quality of its products and the products are good enough to be sustained in the market. In the context of Porter's positioning strategies, which of the following strategies has been adopted by Crossmart?
the cost leadership strategy
What is an important condition that a firm must meet in order to gain a sustainable competitive advantage?
the firm's resources must be imperfectly imitable
brainstorming
the group builds on each other's ideas to generate a large number of ideas
Groupthink is most likely to occur when
the group is insulated from others with different perspectives
_____ is a group decision-making method that begins and ends by having group members quietly write down and evaluate ideas to be shared with the group
the nominal group technique
Mission statement
the reason the company exists, gives an overarching purpose for the company—it does not tell you how the company will achieve this purpose
The main purpose of a retrenchment strategy is to
turn around very poor company performance by shrinking the size or scope of the business
When Red Arc Enterprises, a shipping company, was merged with a larger shipping company, there was a strong resistance to change among the employees of Red Arc. When the CEO of Red Arc got to know of this, he met everyone and explained why the change was necessary and how it could serve to benefit everyone. According to Kurt Lewin, Red Arc is in the _____ stage of managing organizational change
unfreezing
The three steps in the basic process of managing organizational change outlined by Kurt Lewin are
unfreezing, change intervention, and refreezing
Top managers
vision and mission