WPC 480 Final Exam

Which of the following statements is true of joint ventures? A) They enable the exchange of both tacit and explicit knowledge. B) They cannot entail long negotiations. C) They reduce the possibilities of trust and commitment. D) They are characterized by single reporting lines.

A) They enable the exchange of both tacit and explicit knowledge.

Which of the following is true of the board of directors in a public stock company? A) Votes at shareholder meetings determine whose representatives are appointed to the board of directors. B) The functions of the board of directors are limited to ensuring the hiring and firing of CEOs. C) Because shareholders generally have uniform interests, the composition of the board is generally a unanimous decision. D) The board of directors acts as a facilitator to convey interests of the stockholders to the management without any real authority.

A) Votes at shareholder meetings determine whose representatives are appointed to the board of directors.

Danke Inc. is a diversified firm that creates more value than the cost that it incurs. As a result, they are experiencing a diversification premium in their stock price. Danke Inc. is able to accomplish all of the following except A) increase their costs but maintain their current stock price. B) provide economies of scale, which reduces Danke's costs. C) exploit economies of scope, which increases Danke's value. D) reduce Danke's costs and increase value.

A) increase their costs but maintain their current stock price.

Sirius Cybernetics Inc. has a national competitive advantage in the pharmaceutical industry. This means that the country A) is a world leader in the pharmaceutical industry. B) has nationalized the pharmaceutical industry. C) has low levels of competition, providing other multinational companies with an opportunity to take over the pharmaceutical industry. D) is a potential foreign market for multinational pharmaceutical companies to sell their products.

A) is a world leader in the pharmaceutical industry.

After the creation of social networking websites were introduced, their value increased exponentially as the number of users increased. This is the positive effect of a(n) A) network effect. B) user effect. C) confirmation effect. D) impression management effect.

A) network effect.

When examining the core competence-market matrix, the most challenging diversification strategy occurs when firms attempt to combine ________ with ________. If done successfully, the firm could have the potential for "mega-opportunities" that may lead to competitive advantage. A) new core competencies, new markets B) existing core competencies, new markets C) existing core competencies, existing markets D) new core competencies, existing markets

A) new core competencies, new markets

Leslie has completed the organizational design of her firm but is now interested in the second key informal building block, which she believes will help her firm achieve a competitive advantage. Specifically, she's interested in how things will get done on a day-to-day basis and the intangible piece of her organization that cannot be easily codified. Leslie wants to build an effective A) organizational culture. B) employee handbook. C) innovation strategy. D) list of standard operating procedures.

A) organizational culture.

In public stock companies, which of the following expectations of principals is most likely to lead to principal-agent problems? A) the expectation that the agent will act in the principal's best interest B) the expectation that the agent will reconnect economic and social needs C) the expectation that the agent will go above and beyond the call of duty D) the expectation that the agent will follow the country's laws and regulations

A) the expectation that the agent will act in the principal's best interest

In which of the following ways does Zappos achieve organizational control? A) It refrains from monitoring its employees' calls. B) It enforces that each group member's compensation depends in part on the group's overall productivity. C) It continually changes the organizational values that guide its employees. D) It encourages employees to be creative and innovate and to go the extra mile to deliver a wonderful customer experience.

B) It enforces that each group member's compensation depends in part on the group's overall productivity.

Fang and Bone Inc. is a snack manufacturer that wants to expand globally. Few people abroad are familiar with Fang and Bone snacks. The countries into which the company wants to expand require a high degree of local responsiveness when it comes to food, and the citizens of those countries already spend plenty of money on snacks. Which action should the leaders of Fang and Bone take? A) Achieve economies of scale by using the global-standardization approach. B) Pursue a multidomestic strategy that includes new "local" brands. C) Keep costs low with undifferentiated product in the international strategy. D) Appease pressures for cost-reductions by following the transnational approach.

B) Pursue a multidomestic strategy that includes new "local" brands.

BellRing Brands is a manufacturer of educational toys for children. Six months ago, the company's research and development division came up with an idea for a unique touchscreen device that can be used to introduce children to a number of foreign languages. Three months ago, the company produced a working prototype, and last month the company successfully launched its new device on the commercial market. What should BellRing Brands's managers prepare for next? A) a difficult struggle to move from invention to innovation B) increased competition from imitators C) a prolonged period of uncontested success D) a sharp decline in demand for the product

B) increased competition from imitators

Many financial service firms, IT firms, and health care companies are among the most active when it comes to________, which occurs when value chain activities are taken care of outside the home country of the firm. A) diversification B) offshore outsourcing C) procurement D) strategic outsourcing

B) offshore outsourcing

Which of the following statements accurately explains the primary reason behind Walmart's failure in Germany? A) inability to implement its trademark focused-differentiation strategy in the German market B) significant differences between its U.S. personnel policies and Germany's culture C) Germany's unfamiliarity with retail discount powerhouses D) Metro's hostile takeover of Walmart in Germany

B) significant differences between its U.S. personnel policies and Germany's culture

Which of the following statements is true of explicit knowledge? A) Explicit knowledge is about knowing how to do a certain task. B) Explicit knowledge is knowledge that cannot be codified. C) Explicit knowledge is shared in nonequity alliance firms. D) Equity knowledge is acquired only through actively participating in a process.

C) Explicit knowledge is shared in nonequity alliance firms.

Using the Boston Consulting Group growth-share matrix, the managers of Fasehatice International determined that their business unit devoted to personal health monitoring devices was a star. Based on this finding, which of the following strategies is likely to produce the best results? A) Harvest as much cash flow as possible before shutting the business down. B) Immediately divest from the personal health monitoring industry. C) Increase investment in the personal health monitoring unit to encourage future growth. D) Seek to lower costs in the personal health monitoring unit to increase market share.

C) Increase investment in the personal health monitoring unit to encourage future growth.

Which of the following most accurately describes a difference between incremental innovation and radical innovation? A) Incremental innovation researches new materials; radical innovation researches new processes. B) Incremental innovation targets new markets and technologies; radical innovation reinvents markets and technologies. C) Incremental innovation builds on an established knowledge base; radical innovation uses an entirely different knowledge base. D) Incremental innovation draws on novel methods; radical innovation draws on proven methods.

C) Incremental innovation builds on an established knowledge base; radical innovation uses an entirely different knowledge base.

What is the result of managers' pursuit of strategies that define value creation too narrowly in public stock companies? A) It helps companies increase firm profits by creating shared value. B) It gives the managers greater control of the performance of the organization in the long term. C) It reduces the trust of shareholders in the organization as a vehicle for value creation. D) It enables companies to create social value by addressing society's needs but prevents them from creating economic value for shareholders.

C) It reduces the trust of shareholders in the organization as a vehicle for value creation.

Maritza is trying to understand the relationship between what is legal and what is ethical. Tiffany explains that both of these terms are often synonymous in business. Your response is A) Tiffany is correct; law and ethics are synonymous and should be used interchangeably in business. B) Tiffany is incorrect; there is no relationship between laws and ethics except when the board of directors approve an action. C) Tiffany is incorrect; a manager's actions can be legal but ethically questionable. D) Tiffany is correct; whatever is legal is always ethical in business.

C) Tiffany is incorrect; a manager's actions can be legal but ethically questionable.

Hooli, a web development firm, wants to implement an organic structure to foster innovation and attract the most talented creative minds. Which of the following features will make it difficult to do so? A) decision-making power distributed throughout the organization B) a wide span of control for managers C) dedication to a cost-leadership business strategy D) flexible job descriptions for employees

C) dedication to a cost-leadership business strategy

Which of the following lists the stages of the industry life cycle in the correct order? A) introduction, shakeout, maturity, growth, and decline B) introduction, shakeout, growth, maturity, and decline C) introduction, growth, shakeout, maturity, and decline D) introduction, growth, maturity, shakeout, and decline

C) introduction, growth, shakeout, maturity, and decline

In a nonequity alliance, which of the following types of information would firms most likely share? A) a top-level manager's experience related to making strategic decisions B) the employees' entrepreneurial skills C) the documented information about the material composition of a product D) a manager's knowledge related to solving nonroutine problems

C) the documented information about the material composition of a product

Which of the following describes a firm in the Globalization 1.0 stage? A) Asha Inc. had a large office in New York, which was one cog in a global network. B) Asha Inc. had a large office in New York, which functioned with other large offices in Europe and Asia. C) Asha Inc. had a base office in New York and a replica office in Amsterdam. D) Asha Inc. had a base office in New York and distributed some of its products overseas.

D) Asha Inc. had a base office in New York and distributed some of its products overseas.

What most likely happens when a firm optimizes its organizational structure to its current situation? A) It achieves superior performance. B) It transforms strategy into actions and business models. C) It makes it difficult for managers to make the necessary changes due to its effects on resource allocation and power distribution. D) It plants the seed of subsequent failure: the tightly coupled system can break apart when internal or external pressures occur.

D) It plants the seed of subsequent failure: the tightly coupled system can break apart when internal or external pressures occur.

Laura owns and runs Cyberdyne Systems Corp., a private start-up company with a current value of $1.3 billion. Cyberdyne Systems Corp.is interested in going public to fund future growth. Which action should Laura take before Cyberdyne Systems Corp.'s initial public offering? A) She and senior managers should write down their code of ethics. B) Laura should come up with a business plan for what Cyberdyne Systems Corp. will do once it is no longer publicly traded. C) Laura should not embark on an IPO until Cyberdyne Systems Corp.'s value is higher. D) She should investigate Cyberdyne Systems Corp.'s existing or potential problems with ethics or the law, if such problems exist.

D) She should investigate Cyberdyne Systems Corp.'s existing or potential problems with ethics or the law, if such problems exist.

Can't Believe It's Not Hair Inc. (CBNH) dominates the ladies' wig market and wants to expand into men's toupees. How can CBNH 's managers determine whether the company should develop a toupee division internally, ally with a toupee maker, or acquire a toupee-making firm? A) Unless the market for toupees is booming, CBNH should stick to what it knows and focus on creating the best ladies' wigs in the industry. B) The managers must determine whether wig making and toupee making require substantially different skills. If so, the company should pursue internal development. C) To protect themselves, CBNH's managers should choose the option that leads to the largest company with the most managerial positions. D) The managers need to determine whether the skills needed to create wigs and toupees are similar and whether CBNH creates better hairpieces than its competitors do.

D) The managers need to determine whether the skills needed to create wigs and toupees are similar and whether CBNH creates better hairpieces than its competitors do.

Adaptive Biotechnologies Inc. is a company that builds diagnostic devices. It was the first company to develop a compact MRI scanner by reconfiguring the components of the MRI technology. This smaller and user-friendly version of the huge MRI scanner created demand from small hospitals, nursing homes, and private practice doctors who were earlier dependent on the scanning machines in large hospitals. Which of the following types of innovations does this scenario best illustrate? A) incremental innovation B) disruptive innovation C) radical innovation D) architectural innovation

D) architectural innovation

Condax Electronics relied on a large chain of consumer electronics stores to sell its tablet computers, cell phones, and televisions and also to provide customer service and technical support. However, that retailer outsourced its service departments, and customers began to complain that they could not get reliable tech support for Condax products. In response, Condax Electronics decided to set up its own tech support department, and it also began to investigate opening its own brand-based retail stores. What does this scenario best illustrate? A) new product development B) conglomerate diversification C) crowdsourcing D) forward vertical integration

D) forward vertical integration

Hooper's Store Inc. started a chain of organic supermarkets that had initial success. The managers achieved a mastery of the firm's current environment, thereby filling a need in the market. However, Hooper's Store defined and measured it success by financial metrics, with a focus on short-term performance. As a result, the firm put in place metrics and systems to accommodate and manage increasing firm size due to continued success. As a result of this tightly coupled system, Hooper's Store developed a(n) A) holacratic system. B) significant value gap. C) innovative approach. D) resistance to change.

D) resistance to change.

Codehow Inc. is a large firm involved in the highly competitive market of high-tech medical equipment. In this market, smaller firms that focus on research are constantly making new technological developments. Which of the following approaches would best serve the needs of Codehow? A) serial mergers B) acquisitions C) mergers D) serial acquisitions

D) serial acquisitions

The administrative and political distance between two trading countries decreases when A) there are Foreign Direct Investment (FDI) restrictions in the host country. B) the host country lacks an independent central bank. C) tariffs and trade quotas exist in the host country. D) there is a well-functioning capital market in the host country.

D) there is a well-functioning capital market in the host country.