Exam 1

Bundling

A firm uses the _______________ business model when it sells a set of products that have different levels of demand for a price less than their total combined prices.

board of directors

In a public stock company, the centerpiece of corporate governance is the _______________.

A Matrix Structure

Which of the following structures is a combination of the multidivisional structure and the functional structure?

Exploration

Which of the following terms describe searching for new knowledge that may enhance a firm's future performance?

boundaryless

The organizational structure at Gore, in which everyone is encouraged to speak to anyone they wish to within the organization, is called a(n) _______________ organizational form.

concentrate decision-making at the top of the organization

When supporting a related-diversification strategy with the M-form organizational structure, managers typically _______________.

many employees

When the span of control within an organization is wide, one manager supervises _______________.

Externalities

Social consequences of business activities, including pollution, energy loss, and dangerous accidents, are known as _______________.

gaining momentum

With the growing popularity of the Internet, the pay-as-you-go model is _______________.

adhering to core organizational values

Merck's choice to pull the drug Vioxx off the market in 2004 is an example of _______________?

a change in leadership often results in a change in culture

Because executives make decisions about structure and strategy, _______________.

How should we compete?

Business-level strategy addresses which overarching question?

two or more firms achieve the same performance results

Competitive parity occurs when _______________.

Artifacts

Corporate culture is expressed through _______________, which are elements such as vocabulary and the type of clothing worn by employees.

Through a bottom-up initiative

How did Zappos formulate its list of 10 core values?

the performance of other firms in its industry

In order to determine if Home Depot has a competitive advantage, we must compare Home Depot's performance to _______________.

"How do external forces affect our strategy and competitive advantage?"

In the external analysis phase of the AFI strategy framework, managers should ask, _______________

Corporate Governance

The mechanism used to guide a company toward meeting and strategic goals within the bounds of the law is known as

bring down

The minimum efficient scale indicates the level of output needed to _______________ the cost per unit as much as possible.

Zipcar-by-the-hour

Which of the following industries does NOT use a subscription model?

Groupthink

Which of the following is a situation in which individuals follow a leader without challenging or critically evaluating the leader's ideas?

Tesla generated 500,000 preorders for an unseen model.

Which of the following is the best indicator that Tesla's strategy is working as intended?

highly centralized

A top-down strategic plan generally takes place in which type of organization?

stay the same

Economies of scale present an opportunity to increase profits because as the number of units within the relevant range increases, fixed costs _______________.

Specialization

Leslie, Juan, and Felicia all work for the same company. Leslie pays the bills and invoices customers, Juan make sure the company's computers and phones work, and Felicia interacts with customers and sellers of the firm's products. This is an example of _______________.

improve the firm's strategic position

Positive adjustments in product features, customer service, and complements may enable managers to _______________.

It should use the shared value creation framework.

Svanhildur's company is committed to corporate social responsibility but also understands that growth and profit are imperative for survival. What should Svanhildur's company do to achieve this balance?

The orchestration of the work efforts of individuals and teams.

Which of the following activities would be defined by a firm's organizational structure?

financial performance

Economist Michael Porter and many others argue that the value of public stock companies is to narrowly defined in terms of _______________, leading to scandals and economic crises.

the leaders of the organization also adhere to the values

Employees tend to adhere to organizational core values when _______________.

a transnational

Firms that pursue _______________ strategy tend to use a global matrix structure.

By taking their vision and making it into reality.

How do founders leave their imprint on their organizations?

Economic

The shared value creation framework encourages managers to focus on which of the following needs?

a leadership group with relevant prior industry experience

Which of the following is NOT an element of a good strategy according to the AFI framework?

A processed food manufacturer distributes frozen vegetables tainted with E. coli.

Which of the following is NOT an example of a moral hazard?

Value

Which of the following is NOT one of the variables managers primarily manipulate in order to answer the question, "How should we compete?"

that create more value for consumers than competitors' offerings

A firm can gain a competitive advantage by providing goods and services _______________.

Charge a higher price than the cost leader.

A firm pursuing a blue ocean strategy can increase its profit margins by implementing which of the following pricing options?

cost drivers

A firm that hopes to achieve a competitive advantage by maintaining an efficient supply chain and taking advantage of economies of scale and a well-trained staff is focusing on _______________.

a diagnosis of the competitive advantage

A good strategy consists of three elements. The first element is accomplished through analysis of the firm's external and internal environments. We also call this _______________.

Less intense competition from imitators.

A producer of consumer headphones that successfully differentiates its products with a patented noise-canceling technology and celebrity endorsements will enjoy which of the following benefits?

Moral Hazard

A situation in which one party has an incentive to shirk their responsibility because the costs will fall to the other party is known as _______________.

aspirational vision

A(n) _______________ can help employees feel that they are doing something worthwhile and are part of something important and meaningful.

Differentiation

A(n) _______________ strategy may fail when the focus of the competition shifts to price rather than unique product features.

vision

In crafting a strategic management plan, leaders must first determine the company's long-term objective. This means leaders must first define the organization's _______________.

organizational design

In the _______________ step of the strategy implementation phase of the AFI strategy framework, managers would examine how the firm should be structured in order to implement the desired strategy.

red

Products in the affordable "business-casual" clothing market have largely become commoditized, and most retailers have begun to compete mainly on price rather than product features. In this environment, it is impossible for one retailer to gain market share without another losing it. This is an example of a(n) _______________ ocean.

scope of competition

The _______________ determines whether to pursue a specific narrow part of the market or to go after the broader market.

strong

When a firm's employees have internalized norms and share the same firm's core values, the firm is said to have a(n) _______________ culture.

business ethics

The code of professional conduct based on societal norms and expectations is known as _______________.

experience curve

The concept of a(n) _______________ attempts to combine both learning effects and process improvements.

vision

The element of a firm's strategy that summarizes the ultimate goals of the firm is known as the _______________.

exceed the traditional imperative to increase profits

The idea of corporate social responsibility (CSR) suggests that a firm's obligation should _______________.

agency theory

The idea that a corporation is simply a collection of legal contracts is known as _______________.

organizational design

The structure, processes, and procedures of an organization are designed, put into place, reviewed, and reworked three process known as _______________.

Multi-divisional

The type of structure that is used by experienced firms and consists of distinct, essentially independent strategic business units is the _______________ structure.

How high should our profit be?

To formulate an appropriate business-level strategy, managers must answer the "who-what-why-and-how" questions of competition. Which of the following would NOT be the appropriate question to answer?

any price they want

Under the wholesale model, RETAILERS (not the wholesalers) sell goods for _______________.

the trade-offs required by strategic positioning

Walmart and Nordstrom maintain very different strategic positions, one based on cost-leadership and the other based on differentiation through superior customer service. This is an example of _______________.

Their actions that are costly, long-term oriented, and difficult to reverse.

What are strategic commitments?

To control costs while offering products or services at a higher perceived value, thereby creating a competitive advantage.

What is the goal of a differentiation strategy?

Product-Oriented

What type of vision is most likely to fail?

strategy follows structure

When "_______________, " managers limit themselves to strategies that maintain the status quo.

functional

When a firm covers a limited geographic area and is narrowly focused in terms of product/service offerings, a(n) _______________ structure is recommended.

pay-as-you-go

When you join the vehicle-sharing company Zoooomm, you are allowed to use a motorized scooter whenever you like, though you do not have to own the machine. You have to pay by the hours of usage. Zoooomm operates on a(n) _______________ model.

They are meant to facilitate collaboration between departments.

Which of the following are true of cross-functional teams?

Amazon sold e-books for its e-reader device at a loss to promote sales of the e-reader.

Which of the following describes how Amazon disrupted the traditional wholesale model for book publishers?

A firm's organizational structure

Which of the following determines the allocation of resources and the organization and operations of workers?

self-interest

Which of the following has NOT been found to be an ethical norm in business?

Centralized Decision-Making

Which of the following is NOT a characteristic of a simple organizational structures?

Logos

Which of the following is NOT a key element of organizational culture?

Happiness

Which of the following is NOT an example of an artifact of an organization's culture?

Information asymmetry

_______________ is when agents are better informed than principals.