Concept Test #1 Review

Corporate culture comprises the beliefs, values, and behavioral norms of the organization. They are different and have no link with national culture. T/F

FALSE

Differentiation exists only in the early stages of an industry- it is not an option in a mature industry. T/F

FALSE

Team-based and project-based organizations are not considered to be types of structures. T/F

FALSE

Variable costs needed for the organization to operate known as G&A expenses are also called overhead. T/F

FALSE

To achieve a mutually favorable outcome, negotiators begin with identifying who has the most power. T/F

False

What is the difference between substitute and complementary products? a) Substitute products reduce the value of a product, whereas complements increase value b) Complementary products reduce the value of a product, whereas substitutes increase value C) Complementary products cannot be used together, whereas substitutes can d) Complementary products increase the average price of them, whereas substitutes do the opposite

A

According to Michael Porter, strategy is fundamentally about: a) Being better than rivals b) Alignment c) Satisfying all stakeholders d) Being an excellent "corporate citizen"

B

If one considers commodities vs more sophisticated products, one can conclude: a) Commodities are easier to sell because they require little advertising b) Commodity industries are often characterized by a cost-based competitive advantage c) Differentiated products provide stronger margins d) The two types of products do not impact cost-based competition differently

B

The industry life cycle has four phases: a) Introductory, maturity, growth, and death b) Introductory, growth, maturity, and decline c) Emergence, take-off, adulthood, and decline d) Emergence, growth, plateau, and decline

B

What is the difference between differentiation and segmentation? a) no difference b) differentiation- how firms compete; segmentation- where firms compete c) differentiation- firms strategic choice; segmentation- from environment d)segmentation is the marketing department responsibility

B

Specialization allows strong: a) Gains of effectiveness for the whole organization b) Gains of efficiency from individuals c) Control over individuals d) Cost of coordination

B only impacts individuals

A fundamental challenge of organizing is to achieve a compromise between: a) Cooperation and division of unqualified labor b) Division of labor and efficiency c) Specialization, coordination, and cooperation d) Cooperation and coordination

C

Business strategy defines: a) The way a firm competes in a particular industry or market b) The way a firm establishes a competitive advantage over its rivals within a specific industry or market c) both d) Neither of the above

C

Personal computers, credit cards, securities brokering, and internet access are examples of: a) A shift of these industries towards more technological sophistication b) A phenomenon of integration and convergence among these industries c) A shift of these industries towards an increasing commodity status d) Relatively new industries that have gained a dominant status

C

Contribution analysis can be applied in various ways to test the sensitivity of break-even points by adjusting: a) Selling price, fixed costs, and market share b) Fixed costs, market share, and variable costs c) Selling price, variable costs, and fixed costs d) Market share, variable costs, and selling price

C NO MARKET SHARE

A "Blue Ocean" Strategy attempts to make competition irrelevant. T/F

TRUE

A firm's life cycle and the stages within it have the characteristics of an S-shaped growth curve. T/F

TRUE

A key measure to liquidity is working capital. T/F

TRUE

In general, globalization results in increased competition resulting in lower profitability. T/F

TRUE

In the life cycle of a team, it will transform through Forming, Storming, Norming, Performing T/F

TRUE

Michael Porter has identified five sources of competitive pressure: competition for substitutes, competition from rivals, competition from new entrants, the power of suppliers, and the power of clients. T/F

TRUE

Opportunity costs are the projected benefits received from an alternative not selected. T/F

TRUE

Some of the main bases for grouping employees within an organization are tasks, products, geography, and process. T/F

TRUE

Strategy has its origins in military strategy. T/F

TRUE

Strategy's essence is to make choices that relate to two basic questions: where and how to compete. T/F

TRUE

The price and availability of ink cartridges for my printer illustrate the relationship of "complementary" existing between these two products. T/F

TRUE

The tendency over time has been for life cycles to compress. This is especially true in e-commerce firms and markets. T/F

TRUE

The two basic factors that lead to conflict are concerns for the relationship versus the desired outcome. T/F

TRUE

The value chain analysis tool which allows us to understand the importance, the value, and relationship of the elementary components constituting the firm's activity T/F

TRUE

Variable costs are expenses that are uniform per unit of output with a relevant time frame, yet total variable costs fluctuate in direct proportion to the outcome volume. T/F

TRUE