SEVI 3013 UARK Exam 2 Summer online
______ is when firms in a turnaround situation discontinue product lines that are either only marginally profitable or are losing money and focus on a few core profitable areas.
Selective product and market pruning
Agency theory is concerned with resolving two problems that can occur in agency relationships. Which of the following is not one of those problems?
Stockholders and management align with external stakeholders.
Which of the following is not one of the characteristics of a contemporary control system?
It circumvents the need for face-to-face meetings among superiors, subordinates, and peers.
Agency theory is concerned with ______.
verifying agents' performance
The traditional approach to strategic control is sequential. Which of the following is not one of the steps in the sequence?
Action plans are submitted by lower level managers.
Which of the following is an example of a platform firm?
Amazon
Which of the following is not an example of how organizational culture exerts behavioral control?
Culture sets explicit boundaries.
______ is entering a new business through investment in new facilities. It is often called corporate entrepreneurship and new venture development.
Internal Development
Informational control systems are concerned with which of the following questions?
Is the organization doing the right things?
Which of the following is an example of how managerial motives can erode value creation?
Managers who act in their own self-interest.
______ is a generic strategy based on appeal to the industrywide market using a competitive advantage based on ______.
Overall cost leadership; low cost
________ is when the corporate office helps subsidiaries make wise choices in their own acquisitions, divestures, and new ventures, thereby creating value within business units.
Parenting
______ is when firms in a turnaround situation seek to eliminate costs and improve productivity through small gains that accumulate over a period of time.
Piecemeal productivity improvements
______ occurs when a firm enters a different business in which it can benefit from leveraging core competencies, sharing activities, or building market power.
Related Diversification
Which of the following is not a reason for merger and acquisition failures?
The acquisition leads to value creation.
Which of the following is not one of the characteristics of reward and incentive systems?
They represent a poor means of influencing the culture of an organization
In addition to an annual base salary of 1.3 million USD and 10.4 million USD in stock compensation and bonuses, Heather Bresch, CEO of Mylan Pharmaceuticals, also received 6.4 million USD in other compensation in 2015. This included 19,200 USD for the use of a company-provided automobile and 310,000 USD in personal use of the company jet. Which of the following statements is true regarding this situation?
Top-level managers may pursue their own interests over that of the company.
True or false: Informational control is primarily concerned with whether the organization is "doing the right things."
True
True or false: Internal development is often more time-consuming than growing through mergers or acquisitions.
True
________ diversification is when a firm enters a different business that has little horizontal interaction with other businesses of a firm.
Unrelated
In order to minimize the temptation for managers to act in their own self-interest, governance mechanisms exist for implementation consideration. Which of the following is not a primary means for monitoring managerial behavior?
a board of directors that acts in the best interests of shareholders to create short-term value
Barnes and Noble lost its market share in book retailing to Amazon. It tried to regain market share by offering a similar electronic reader, the Nook, to the Amazon Kindle series. This demonstrates that Barnes and Noble lacked
a sustainable competitive advantage.
The primary aim of strategic management at the business level is
achieving competitive advantage.
Behavioral controls are aspects of strategic change that involve finding the appropriate ________ and ________ among the culture, rewards, and boundaries of the firm.
balance; alignment
Managers consider both external and internal factors to determine how to achieve appropriate _______control over the individuals who work for the organization.
behavior
Culture, rewards, and boundaries are key "levers" of ______ controls.
behavioral
In the traditional approach to strategic control, control is based on ______.
comparing actual performance to a predetermined goal
Effective contemporary controls systems focus on ______.
constantly changing information
Informational and behavioral control are two types of control in the ______ approach to strategic control.
contemporary
Casio, a giant electronic products producer, synthesizes its abilities in miniaturization, microprocessor design, material science, and ultrathin precision castings to produce digital watches. It uses the same skills to produce card calculators, digital cameras, and other small electronics. These collective skills are
core competencies.
A risk for a firm that tries to attain both cost and differentiation advantages is that it can be stuck in the middle. An example of this is supermarkets because their ________ structure is ________ than discount retailers, and customers do not value their products and services as being high-end such as those offered by Whole Foods.
cost; higher
The primary goal in selecting the best means of diversification should be which vehicle will ______.
create the greatest value for shareholders
The ______ stage is the fourth stage of the industry life cycle and is characterized by falling sales and profits.
decline
Ford and VW signed a memorandum of understanding to work together to develop autonomous vehicles. Which of the following best explains the potential advantage for them?
developing and diffusing new technologies
An acquisition that results in ________ commonly indicates that expectations were not met.
divestiture
A low-cost position permits buyers to exert power to drive ________ prices only to the level of the next most efficient producer.
down
Outside the flight experience itself, airlines are generating revenue by charging fees for credit cards, frequent-flyer programs, and access to airport lounges. This serves to
expand the profit pool.
The type of behavior control used in an organization is often based on internal and ______ controls.
external
Revenues increase during the ________ stage of the industry life cycle as new customers try the product and an ever-increasing number of satisfied customers make repeat purchases.
growth
Research has consistently shown that firms that achieve both cost leadership and differentiation advantages tend to perform
higher than firms that achieve either a cost or a differentiation advantage.
The control process that continuously updates and challenges assumptions that underlie the organization's strategy is _____ control.
informational
The role of ______ control is to challenge the organization's beliefs and goals and to continuously monitor, test, and review strategies.
informational
The two types of strategic control in the contemporary approach are ______.
informational and behavioral
Top managers at ABC Company meet every Friday to review daily operational reports and year to date data. This is an example of
informational control.
In the ________ stage of the industry life cycle, the emphasis on product design is very high, the intensity of competition is low, and the market growth rate is low.
introduction
The ______ stage is the first stage of the industry life cycle.
introduction
Companies can use combination strategies with technology to Blank______.
link their value chain with the value chains of their customers and suppliers
A common pitfall of using a cost-leadership strategy is that Blank______.
value-creating activities are easily imitated
The ______ stage is the third stage of the product life cycle.
maturity
According to Michael Porter, there is a tremendous allure to ________. It is the big play, the dramatic gesture. With one stroke of the pen, you can add billions to size, get a front-page story, and create excitement in markets.
mergers and acquisitions
A firm can achieve differentiation through all the following means except
offering lower prices to frequent customers.
3M leverages its competencies in adhesives technologies to many industries, including automotive, construction, and telecommunications. This is an example of creating value by using
related diversification to acquire economies of scope by leveraging core competencies.
One aspect of using a cost leadership strategy is that experience effects may lead to lower costs. Experience effects are achieved by
repeating a process until a task becomes easier.
Companies that use a Blank______ positioning strategy offer products with fewer product attributes and lower prices, in contrast to the industry tendency to continuously augment products as part of the product life cycle.
reverse
JK Industries is a diversified company that has been in business for decades. Its healthcare division has been profitable, but its line of prestige beauty products has been losing money. JK decides to discontinue its line of prestige beauty products and focus its efforts on the healthcare lines that have been most promising. Which strategy is JK using?
selective product and market pruning
Proctor and Gamble announced that it would sell off or close down up to 100 of its brands. This is an example of which turnaround strategy used by successful companies?
selective product and market pruning
Diversification initiatives include all the following except
shareholder development.
When management uses common production facilities or purchasing procedures to distribute different but related products, they are
sharing activities.
An issue that a firm should consider in deciding to vertically integrate is whether Blank______.
the initiative has potential negative impacts on the firm's stakeholders
An issue that a firm should consider in deciding to vertically integrate is whether ______.
the initiative has potential negative impacts on the firm's stakeholders