BBA 499C Chapter 1 Study Questions

___ articulates the ideal description of an organization and gives shape to its intended future. a. A vision statement b. A mission statement c. A code of ethics d. Organizational culture

a. A vision statement

___ returns are returns in excess of what an investor expects to earn from other investments with a _____ amount of risk. a. Above-average; similar b. Average; similar c. Above-average; greater d. Average; greater

a. Above-average; similar

Ishanti wants to open her own business. She has several interests, so she wants to select an industry that has the best profitability potential. Which of the following models should she use to identify the most attractive industry for her financial goals? a. Five forces model b. Resource-based model c. Strategic competitiveness model d. I/O model

a. Five forces model

Which of the following statements about information technology (IT) is true? a. IT contributes positively to product innovation efforts for firms in virtually all industries. b. The pace of change in IT and its diffusion is expected to slow down over the next 10 to 20 years. c. The number of personal computers sold annually is expected to increase from now through 2023. d. The most successful firms envision information technology-derived innovations as threats to the markets they serve currently.

a. IT contributes positively to product innovation efforts for firms in virtually all industries.

_____ is composed of information, intelligence, and expertise. a. Knowledge b. Technology c. Skill d. Experience

a. Knowledge

Which of the following is an assumption of the industrial organization (I/O) model? a. Organizational decision makers are rational individuals who are committed to acting in the firm's best interests. b. Resources and capabilities are not highly mobile across firms. c. Differences in firms' performances across time are due primarily to their unique resources and capabilities. d. The internal environment imposes pressures and constraints that determine the firm's strategies.

a. Organizational decision makers are rational individuals who are committed to acting in the firm's best interests.

Organizational culture is the: a. complex set of ideologies, symbols, and core values that individuals throughout the firm share and that influence how the firm conducts business. b. structure of a company's organizational chart of strategic leaders, including their roles and responsibilities. c. attitude of a company's owners or shareholders. d. policies and procedures detailed in the company's employee handbook.

a. complex set of ideologies, symbols, and core values that individuals throughout the firm share and that influence how the firm conducts business.

Product market stakeholders often have very different priorities, but each can exert power and influence over a company. Which of the following correctly describes a way that a product market stakeholder exerted its power to the potential detriment of a company? a. Protesters swarmed and picketed Hobby Lobby after it won a U.S. Supreme Court decision allowing it an exemption from covering employees' contraceptives on religious grounds. b. During the Great Recession, the United Auto Workers (UAW) union agreed to a pension restructuring with the three big U.S. car manufacturers. c. AIG's shareholders sued the U.S. government, arguing that the bailout the company received wasn't beneficial enough to financial investors. d. McDonald's announced wage increases for employees at its corporate-owned stores after months of protests by employees.

a. Protesters swarmed and picketed Hobby Lobby after it won a U.S. Supreme Court decision allowing it an exemption from covering employees' contraceptives on religious grounds.

Which of the following is an assumption of the resource-based model? a. Resources and capabilities are not highly mobile across firms. b. A firm's performance across time is due primarily to the industry's structural characteristics rather than to the firm's unique resources and capabilities. c. Most firms competing within an industry or within a segment of that industry are assumed to control similar strategically relevant resources and to pursue similar strategies in light of those resources. d. Organizational decision makers are assumed to be rational individuals who are committed to acting in the firm's best interests, as shown by their profit-maximizing behaviors.

a. Resources and capabilities are not highly mobile across firms.

Which of the following would be considered to be part of Seaside Bar & Grill's capital market stakeholders? a. Shareholders b. Customers c. Suppliers d. Employees

a. Shareholders

_____ is a set of capabilities firms use to respond to various demands and opportunities existing in today's dynamic and uncertain competitive environment. a. Strategic flexibility b. Strategic competitiveness c. Perpetual innovation d. Organizational culture

a. Strategic flexibility

Which of the following technological inventions took the longest to penetrate 25 percent of the homes in the United States? a. Telephone b. Television c. Radio d. Personal computers

a. Telephone

Which of the following statements about strategic leaders is true? a. To deal with change effectively, strategic leaders must promote innovation in their organization. b. Strategic leaders must think and act globally. c. Strategic leaders can best leverage partnerships when their organizations are highly centralized. d. Strategic leaders must have a fixed mind-set.

a. To deal with change effectively, strategic leaders must promote innovation in their organization.

The quality of a firm's performance is reflected in its ability to: a. achieve strategic competitiveness. b. engage in perpetual innovation. c. earn average returns. d. achieve strategic flexibility.

a. achieve strategic competitiveness.

Hypercompetition is a condition of rapidly escalating competition based on all of the following EXCEPT: a. competition to produce a competitive advantage based on economies of scale. b. price-quality positioning. c. competition to create new know-how and establish first-mover advantage. d. competition to protect or invade established product and/or geographic markets.

a. competition to produce a competitive advantage based on economies of scale.

An organization can be confident that its strategy yields a competitive advantage after: a. competitors' efforts to duplicate it have failed. b. it has earned above-average returns for at least two years in a row. c. it becomes too complex to understand and manage. d. its returns are enough to at least minimally satisfy its stakeholders.

a. competitors' efforts to duplicate it have failed.

Capital market stakeholders are most satisfied when a company's: a. returns align with the amount of risk they incurred by investing in a company or lending the company money. b. product market stakeholders are dissatisfied. c. leadership team is earning performance-based compensation. d. employees have a low turnover rate and receive salaries that are higher than the labor market.

a. returns align with the amount of risk they incurred by investing in a company or lending the company money.

JoAnn Tucker recently took over as Chief Executive Officer (CEO) of Burger-Rama, Inc. Burger-Rama has seen declining profits over the past five years and has struggled to remain competitive in the fast-food industry. In order to achieve strategic competitiveness, JoAnn must: a. conduct training programs and hire educated and experienced employees. b. invest in sophisticated technology in relevant knowledge areas. c. fire the current board of directors and start afresh. d. shift the company's focus to marketing and develop an extensive advertising campaign.

a. conduct training programs and hire educated and experienced employees.

The focus of _____ strategy is determining the businesses in which the company intends to compete as well as how it will manage those businesses. a. corporate-level b. cooperative c. acquisition d. business-level

a. corporate-level

Walmart and Amazon are examples of organizations that earn above-average returns by using a _____ strategy. a. cost leadership b. focus c. differentiation d. consolidation

a. cost leadership

Kristine Woods and her husband, Liam, own a café, Simply Healthy, in their hometown. Simply Healthy offers only natural and healthy options on its menu and uses only locally grown food. It charges slightly higher prices than the other restaurants in town, but health-conscious customers are willing to pay a premium. Simply Healthy operates using a _____ strategy. a. differentiation b. focus c. cost leadership d. consolidation

a. differentiation

In some industries, firms can reduce competitive rivalry and erect barriers to entry by: a. forming joint ventures. b. franchising. c. licensing. d. not applying for patents.

a. forming joint ventures

The strategic management process is the: a. full set of commitments, decisions, and actions firms take to achieve strategic competitiveness and earn above-average returns. b. analysis of the firm's external environment and internal organization to identify external opportunities and threats. c. utilization of the resource-based model of above-average returns to identify the internal resources a company should leverage to achieve strategic competitiveness. d. set of capabilities firms use to respond to various demands and opportunities existing in today's dynamic and uncertain competitive environment.

a. full set of commitments, decisions, and actions firms take to achieve strategic competitiveness and earn above-average returns.

Core competencies are often visible in the form of organizational: a. functions. b. value. c. culture. d. symbols.

a. functions.

Logan is an entrepreneur and president of his own company that makes a new software product that manages benefits administration for large multinational corporations. His startup company grew quickly to a team of about 25. A new federal law recently passed by Congress will cause small-business owners to invest in software like his to manage employee health care. Logan announces that the company will be investing in training for employees to better understand small-business owners and research and development (R&D) to create a small-business version of the software. This is an example of: a. having a strong strategic orientation and promoting innovation as a strategic leader. b. utilizing the industrial organization (I/O) model of above-average returns to determine the strategic direction of the firm. c. answering to demands made by capital market stakeholders for greater profitability. d. revising a company's vision statement to reflect changes in the competitive environment.

a. having a strong strategic orientation and promoting innovation as a strategic leader.

In today's competitive landscape, only companies capable of _____ typically earn above-average returns. a. meeting, if not exceeding, global standards b. introducing disruptive technologies c. achieving economies of scale as a competitive advantage d. developing all of their resources and capabilities into a competitive advantage

a. meeting, if not exceeding, global standards

A firm's resources are typically classified into all of the following categories of capital EXCEPT: a. occupational capital. b. human capital. c. organizational capital. d. physical capital.

a. occupational capital.

Pete is a manager at Green Mountain Sporting Goods. Pete would be considered part of Green Mountain's _____ stakeholders. a. organizational b. capital market c. service market d. product market

a. organizational

A firm's first step in the strategic management process is to: a. perform an analysis of its external environment and internal organization. b. develop its vision and mission. c. formulate a business-level and corporate-level strategy. d. contact its stakeholders.

a. perform an analysis of its external environment and internal organization.

The industrial organization (I/O) model of above-average returns: a. puts emphasis on the external environment, which plays a role in determining a company's ability to achieve above-average returns. b. concentrates on the unique resources and capabilities of a firm to direct its strategic management process. c. is a new approach to strategic management that emphasizes technological advancement. d. is critical to competing in the global economy and the information age because of its emphasis on organizational development.

a. puts emphasis on the external environment, which plays a role in determining a company's ability to achieve above-average returns.

Ben is a line manager at a food distribution company. He often works more than 50 hours a week, and his work is usually filled with ambiguous decision situations. Ben's fellow employees would say that he is a hard worker, is tenacious, is brutally honest, and always pushes them to hit their goals and become the best workers possible. Based on this description, Ben is a: a. strategic leader. b. product market stakeholder. c. global manager. d. capital market stakeholder.

a. strategic leader.

Jonathan works for a multinational corporation (MNC) in a country that has the largest economy in the world. Jonathan works in: a. the United States. b. Japan. c. China. d. Germany.

a. the United States.

The chief executive officer (CEO) and other top-level managers often involve other people to develop the mission statement because: a. the mission deals more directly with product markets and customers. b. it is viewed as a task that can easily be delegated. c. the mission deals more directly with capital markets and shareholders. d. forming the mission is typically not the final responsibility of the CEO or other top-level managers.

a. the mission deals more directly with product markets and customers.

Which of the following statements about technology and innovation is true? a. Evidence suggests that large established firms have trouble innovating. b. A disruptive technology can create a new industry. c. The rate of technological diffusion has increased the competitive benefits of patents. d. Typically, it takes years for firms to gather information about their competitors' research and development (R&D).

b. A disruptive technology can create a new industry.

Which of the following statements about a firm's vision and mission is true? a. A firm's vision is more concrete than its mission. b. A firm's vision tends to be enduring while its mission can change with new environmental conditions. c. The mission is the foundation for the firm's vision. d. The vision and mission should be developed solely by top-level managers.

b. A firm's vision tends to be enduring while its mission can change with new environmental conditions.

Which of the following would be considered a product market stakeholder? a. A private equity firm investing in a biomedical firm b. A local pipefitters union dealing with a plumbing contractor c. A member of an ownership family in a privately owned company d. A store manager of a retail chain

b. A local pipefitters union dealing with a plumbing contractor

Which of the following could be a part of the analysis stage of the strategic management process? a. A mission and vision task force developing these foundational statements for the company b. A review of a company's competitive landscape, identifying competitors, naming their differentiations, and detailing a profile of those competitors' customers c. The collection of financial data used to track the success of the strategic plans the company is pursuing d. The selection of strategies the company will pursue to achieve its financial goals and satisfy its shareholders

b. A review of a company's competitive landscape, identifying competitors, naming their differentiation, and detailing a profile of those competitors' customers

Which of the following describes a company that has delivered above-average returns to its investors? a. A biotech firm that recently announced it has received FDA approval for its new orphan drug to treat a rare heart condition and will be able to sell the treatment for $10,000 per year per patient beginning in the fall b. A tool manufacturer that announced it will increase its dividend payment—the highest dividend amongst all of its industry competitors—for the upcoming quarter due to market share gains in overseas markets c. A retail company that announced it saw growth in same-store sales from last year to this year and will open 250 new stores to capitalize on its growing popularity d. An airline that reported weaker-than-projected earnings this year because of increased maintenance costs for its aging fleet of planes

b. A tool manufacturer that announced it will increase its dividend payment—the highest dividend amongst all of its industry competitors—for the upcoming quarter due to market share gains in overseas markets

Which of the following company statements is a vision statement? a. Nike: Just Do It. b. Disney: To be one of the world's leading producers and providers of entertainment and information. c. Habitat for Humanity: A world where everyone has a decent place to live. d. Allstate: You're in good hands with Allstate.

b. Disney: To be one of the world's leading producers and providers of entertainment and information.

One of the long-term goals of Boss Manufacturing, a U.S.-based company, is to expand its operations and enter the global market sometime between 2020 and 2030. Based on current data, which of the following countries would offer the best opportunities for growth? a. Germany b. India c. France d. United Kingdom

b. India

All of the following are VISTA countries EXCEPT a. Vietnam. b. India. c. Turkey. d. Argentina.

b. India.

Which of the following statements about a firm's resources and capabilities is true? a. All of a firm's resources and capabilities have the potential to be the foundation for a competitive advantage. b. It is difficult to achieve and sustain a competitive advantage based on resources alone. c. As a source of competitive advantage, a capability must be exceedingly complex to understand and manage. d. When a resource is rare and valuable, it becomes a core competency.

b. It is difficult to achieve and sustain a competitive advantage based on resources alone.

Which of the following statements about globalization is true? a. It has led to lower performance standards with respect to multiple competitive dimensions. b. It is the increasing economic interdependence among countries and their organizations as reflected in the flow of products, financial capital, and knowledge across country borders. c. It is a product of a small number of large firms competing against one another in an increasing number of global economies. d. It decreases the range of opportunities for companies competing in the current competitive landscape.

b. It is the increasing economic interdependence among countries and their organizations as reflected in the flow of products, financial capital, and knowledge across country borders.

Marquis is the international operations manager for an athletic clothing line. As part of his responsibilities, he regularly tours the factories of the company's suppliers. He recently took a tour of one of the most efficient plants that delivers low-cost clothing. This gives his company a greater profit margin. However, on the tour, he noticed an 8-year-old child operating one of the machines. Which of the following best describes how Marquis should report back to his CEO about the plant tour? a. Marquis should present a glowing recommendation for the supplier based on its financial performance and ability to help the company deliver above-average returns through higher profitability. b. Marquis should bring this issue to the attention of the CEO and other top leadership immediately. He has a personal, ethical objection to child labor and believes that it is also inconsistent with the company's core values. c. Marquis should assume that the CEO is aware of the child labor practices at the supplier because the two companies have done business together for several decades. His report should focus on the operational improvements at the plant. d. Marquis should quit. He can't work for a company that employs child labor in any way. He should contact the media immediately after he leaves the company and tell them the whole story.

b. Marquis should bring this issue to the attention of the CEO and other top leadership immediately. He has a personal, ethical objection to child labor and believes that it is also inconsistent with the company's core values.

_____ are inputs into a firm's production process. a. Core competencies b. Resources c. Capabilities d. Strategies

b. Resources

Tony Rush is the Chief Executive Officer (CEO) of Smithson Enterprises, a U.S.-based multinational corporation (MNC). Due to his company's success domestically, Tony has decided to enter the global market by opening operations in China and Brazil. Which of the following statements about Smithson's decision to enter the global market is true? a. Smithson will face decreased competition from emerging-market MNCs. b. Smithson's performance may suffer initially in both China and Brazil due to the amount of time required to learn to compete successfully in a new global market. c. Smithson should consider entering into more global markets in addition to China and Brazil. d. Because of its established success in the United States, Smithson will not need to make effective use of the strategic management process in its international operations.

b. Smithson's performance may suffer initially in both China and Brazil due to the amount of time required to learn to compete successfully in a new global market.

Which of the following criterion is most likely to be used to measure the success of a small, new company, Hippolite Mud Resort, which opened six months ago? a. Return on assets b. Speed of growth c. Beginning stock price d. Strategies

b. Speed of growth

Which of the following statements about an organization's stakeholders is true? a. Not all organizations have stakeholders. b. Stakeholders have enforceable claims on the firm's performance. c. All stakeholders have the same level of influence in an organization. d. Stakeholder relationships are important but cannot be a source of competitive advantage.

b. Stakeholders have enforceable claims on the firm's performance.

A local community arts nonprofit organization is seeking to expand its programming and is considering putting just one new program in place this year. It may choose painting workshops for people with disabilities, summer camps for young children, a musical performing arts series for skilled musicians, or classes for seniors. The organization's most committed volunteer is a kindergarten teacher who has offered to be the leader of whichever new program the organization implements. If the nonprofit is utilizing the resource-based model of above-average returns, in which of the following ways should it expand its programming? a. Painting workshops for people with disabilities because they are not currently being offered by any other organizations in the community b. Summer camps for young children because the organization should use the knowledge of its passionate volunteer to its greatest advantage c. A musical performing arts series for skilled musicians because it has the widest appeal in the community d. Classes for seniors because they can be hosted during the day and have good attendance among those who are retired

b. Summer camps for young children because the organization should use the knowledge of its passionate volunteer to its greatest advantage

Which of the following is an example of a disruptive technology? a. Waterproof bandages b. Tablet computers c. Orange and vanilla flavored Coca-Cola d. Quick-dry nail polish

b. Tablet computers

The five forces model of competition suggests that firms can earn above-average returns by using either a _____ strategy or a _____ strategy. a. cost leadership; focus b. cost leadership; differentiation c. focus; consolidation d. differentiation; focus

b. cost leadership; differentiation

Hocus Pocus Smoked Ribs has only one location and wants to exploit its competitive advantage, a very popular recipe for smoked meats. This means that it wants to: a. form multiple business-level strategies. b. create a single business-level strategy. c. implement a cooperative strategy. d. establish a global strategy.

b. create a single business-level strategy.

Cell phones and digital music files are examples of: a. hypercompetition. b. disruptive technologies. c. knowledge. d. core competencies.

b. disruptive technologies.

An assumption of the industrial organization (I/O) model of above-average returns that supports the need for a firm to find the most attractive industry in which to compete is that: a. the external environment imposes pressures and constraints that determine the strategies that would result in above-average returns. b. firms possess the same types of resources with value and those resources are mobile across companies. c. differences in resources and capabilities are the basis of competitive advantage. d. organizational decision makers are rational individuals who are committed to acting in the firm's best interests, as shown by their profit-maximizing behaviors.

b. firms possess the same types of resources with value and those resources are mobile across companies.

Firms achieve strategic competitiveness by: a. being the first to try a new business strategy. b. formulating and implementing a value-creating strategy. c. creating a vision for a company. d. starting a new company.

b. formulating and implementing a value-creating strategy.

A strategy: a. is a picture of what the firm wants to be and, in broad terms, what it wants to achieve. b. is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage. c. specifies the businesses in which the firm intends to compete and the customers it intends to serve. d. refers to the complex set of ideologies, symbols, and core values that individuals throughout the firm share and that influence how the firm conducts business.

b. is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage.

Snowtrail Ski Resort has earned only average returns for the past year. As a result: a. it lacks the capacity to satisfy the minimal expectations of all stakeholder groups. b. its objective should become satisfying each stakeholder group's minimal expectations. c. it should focus on satisfying its capital market stakeholders and organizational stakeholders rather than its product market stakeholders. d. it should focus on satisfying its product market stakeholders and organizational stakeholders rather than its capital market stakeholders.

b. its objective should become satisfying each stakeholder group's minimal expectations.

Firms lacking appropriate internal knowledge resources are _____ likely to _____. a. more; enter international markets b. less; allocate sufficient resources to research and development (R&D) c. less; achieve less-than-average returns d. more; subscribe to the industrial organization (I/O) model

b. less; allocate sufficient resources to research and development (R&D)

All of the following are considered to be product market stakeholders of a firm EXCEPT: a. host communities. b. managers. c. unions. d. suppliers.

b. managers.

Ranger Landscaping's website states the following: "Ranger Landscaping is a service-oriented business that provides lawn care and landscape design, installation, and maintenance. We are committed to a professional approach to our business and to providing our customers with individualized attention and 100 percent satisfaction." This statement represents Ranger Landscaping's: a. tagline. b. mission. c. vision. d. code of ethics.

b. mission.

Hypercompetition describes a competitive landscape in which: a. there are thousands of companies competing within the same industry for the same group of customers. b. rivalry tends to occur among global competitors who innovate regularly and successfully. c. the business is dominated by a single company, pushing all competitors to imitate its strategies and develop similar resources. d. the industry has a high cost of entry in capital investment, research and development (R&D), or hiring of talented employees.

b. rivalry tends to occur among global competitors who innovate regularly and successfully.

Toy Joy Company is a start-up toy company. Its owners have decided to use the industrial organization (I/O) model to pursue strategic competitiveness and earn above-average returns. Toy Joy's first step in using the model would be to: a. locate an industry with high potential for above-average returns. b. study the external environment, especially the industry environment. c. identify the firm's resources. d. identify a strategy.

b. study the external environment, especially the industry environment.

The industrial organization (I/O) model assumes that: a. firms acquire different resources and develop unique capabilities based on how they combine and use the resources. b. the external environment imposes pressures and constraints that determine the strategies that would result in above-average returns. c. any resource differences that develop between firms will be long term. d. firms can earn above-average returns by producing standardized products at costs below those of competitors.

b. the external environment imposes pressures and constraints that determine the strategies that would result in above-average returns.

According to the resource-based model of above-average returns, differences in firms' performance across time can be attributed to the: a. strength and effectiveness of managers. b. unique capabilities and resources of each company. c. industry's structural characteristics. d. effective implementation of pricing strategies.

b. unique capabilities and resources of each company.

A _____ is a picture of what the firm wants to be and, in broad terms, what it wants to achieve. a. mission b. vision c. capability d. competitive advantage

b. vision

Tom Bellinger is the chief executive officer (CEO) of Bellinger Bakery. He has decided to revise the firm's vision. In order to get the most effective vision statement for the organization, experience shows that Tom should: a. write it entirely by himself. b. work with other stakeholders in the organization when writing it. c. hire a marketing firm to write it. d. delegate the task to a lower-level manager.

b. work with other stakeholders in the organization when writing it.

The risks of competing outside a firm's domestic markets in the global economy are labeled a(n): a. "danger of competition." b. "disruption to knowledge." c. "liability of foreignness." d. "internationalization of domesticity."

c. "liability of foreignness."

Which of the following statements about the current competitive landscape is NOT true? a. A challenge for firms is to integrate digitalization effectively into their strategies. b. The traditional managerial mind-set is unlikely to lead a firm to strategic competitiveness. c. Conventional sources of competitive advantage such as economies of scale and large advertising budgets are more effective than they once were in terms of helping firms earn above-average returns. d. The conditions of the competitive landscape result in a perilous business world.

c. Conventional sources of competitive advantage such as economies of scale and large advertising budgets are more effective than they once were in terms of helping firms earn above-average returns.

Which of the following statements about a firm's customers is true? a. Customers are the most obvious stakeholders, at least in U.S. organizations. b. Customers are part of its capital market stakeholders. c. Customers are more important than its other product market stakeholders. d. Customers prefer that investors receive a maximum return on their investments.

c. Customers are more important than its other product market stakeholders.

When a firm earns below-average returns, it: a. is able to maximize the interests of all stakeholders. b. should reward those stakeholders who have the least power. c. should try to minimize the amount of support lost from stakeholders. d. should treat all stakeholders the same.

c. should try to minimize the amount of support lost from stakeholders.

A vision statement differs from a mission statement in that the vision statement: a. should be completed before a company analyzes its external environment and internal organization. b. is realistic, achievable, and measurable. c. speaks in broad terms of what the company wants to achieve. d. specifies the businesses in which the firm intends to compete and the customers it intends to serve.

c. speaks in broad terms of what the company wants to achieve.

Companies must be aware of technological advances within their industry and make strategic management decisions that take into account perpetual innovation and disruptive technologies. Which of the following is an example of a company that did not respond strategically to technological changes? a. After Google introduced the concept of pay-per-click advertising, a competing search engine, Bing, introduced a similar advertising model. b. Samsung, LG, and other cell phone manufacturers continued to innovate their products after the introduction of the Apple iPhone to keep up with customer expectations of smartphones. c. Kodak revolutionized the automatic snapshot camera more than 100 years ago, making photography accessible to everyone. When innovators brought digital cameras to the marketplace, Kodak focused on making it easy for people to print their photos using this technology. d. Amazon decided to enter into the online streaming video market with Amazon Prime Video to compete directly with Netflix.

c. Kodak revolutionized the automatic snapshot camera more than 100 years ago, making photography accessible to everyone. When innovators brought digital cameras to the marketplace, Kodak focused on making it easy for people to print their photos using this technology.

Which of the following refers to the complex set of ideologies, symbols, and core values that individuals throughout the firm share and that influence how the firm conducts business? a. Vision b. Strategic management process c. Organizational culture d. Mission

c. Organizational culture

HD Construction, Inc. subscribes to the industrial organization (I/O) model of above-average returns. HD would most likely attribute its success to which I/O model factor? a. The skills of its employees b. Capital equipment c. Product differentiation d. Finances

c. Product differentiation

A multi divisional corporation that manufactures large steel tanks is considering starting a new business unit to serve the transportation industry. The company is utilizing the industrial organization (I/O) model of above-average returns to develop its strategy. Which of the following decisions is consistent with this model? a. The company determines that it has an internal asset in a piece of software it developed for scheduling manufacturing processes and decides to make the software the centerpiece of its new business unit, selling it to transportation companies to manage their schedules. b. The company identifies a large steel tank it is currently selling to customers in the brewing industry and decides to begin selling it to customers in the transportation industry for transporting liquids. c. The company's research into a new railcar guideline that requires all tanker cars to be replaced or retrofitted over the next five years leads its leaders to start a business that manufactures tanker cars to capitalize on the new demand. d. The company decides to increase its investment in research and development to catch a competitor that has surpassed it in the technology it is using to produce steel tanks.

c. The company's research into a new railcar guideline that requires all tanker cars to be replaced or retrofitted over the next five years leads its leaders to start a business that manufactures tanker cars to capitalize on the new demand.

BioLab Pharmaceuticals has just discovered a new medication for multiple sclerosis. In order to protect proprietary technology, Biolab should apply for: a. certification. b. a trademark. c. a patent. d. a copyright.

c. a patent.

In order to develop a competitive advantage, JBH Corporation and Starr Enterprises have decided to form a partnership to share their resources and capabilities. JBH and Starr have formed a(n) _____ strategy. a. corporate-level b. business-level c. cooperative d. international

c. cooperative

The strategic management process involves all of the following EXCEPT: a. analysis. b. strategy. c. identification. d. performance.

c. identification.

Strategic leaders: a. can only be people in the C-suite of a company, such as the chief executive officer (CEO), chief financial officer (CFO), and chief operating officer (COO). b. answer only to the demands made by capital market stakeholders for greater profitability. c. must have tenacity and a willingness to be brutally honest in order to be successful. d. revise a company's vision statement on an annual basis.

c. must have tenacity and a willingness to be brutally honest in order to be successful.

According to the industrial organization (I/O) model, all of the following are industry characteristics that determine the actions a firm should take to operate profitably EXCEPT: a. barriers to market entry. b. diversification. c. patents. d. economies of scale.

c. patents.

An effective vision statement tends to be: a. long and detailed. b. more concrete than a firm's mission. c. short and concise. d. founded from the firm's mission.

c. short and concise.

The basis of competition has shifted from _____ to _____. a. experience; tangible resources b. customer satisfaction; management c. tangible assets; intangible resources d. employee skills; technology innovation

c. tangible assets; intangible resources

In the resource-based model of above-average returns, a capability is: a. an input into a firm's production process. b. the foundation for a firm's mission. c. the capacity for a set of resources to perform a task or an activity in an integrative manner. d. a product of a large number of firms competing against one another in an increasing number of global economies.

c. the capacity for a set of resources to perform a task or an activity in an integrative manner.

Resources have a greater likelihood of being a source of competitive advantage when: a. they are tangible in nature. b. they are intangible in nature. c. they are integrated to form a capability. d. they are implemented by top management.

c. they are integrated to form a capability.

Resources are _____ when they allow a firm to take advantage of opportunities or neutralize threats in its external environment. a. rare b. costly to imitate c. valuable d. non-substitutable

c. valuable

Which of the following would NOT be considered a resource? a. A patent b. Finances c. An employee's skills d. A competitor's skills

d. A competitor's skills

Which of the following specifies the businesses in which the firm intends to compete and the customers it intends to serve? a. Vision b. A code of ethics c. Organizational culture d. A mission

d. A mission

Which of the following are two primary drivers of the nature of today's competitive landscape? a. Emerging local economies and technology b. Knowledge and research and development (R&D) c. Tariffs and emerging local economies d. An emerging global economy and technology

d. An emerging global economy and technology

How can a firm avoid managerial hubris (overconfidence) at the top of the organization? a. Act globally. b. Set goals for each employee. c. Establish a vision for the company. d. Delegate strategic responsibilities.

d. Delegate strategic responsibilities.

Tockit is a children's toy developer that uses the resource-based model of above-average returns. Which of the following steps does it use in its business? a. Study the external environment, especially the industry environment. b. Use the firm's strengths to implement the strategy. c. Find the most attractive industry in which to compete. d. Determine the firm's capabilities.

d. Determine the firm's capabilities.

Christopher is the manager of the development department for a large company. Recently, he scheduled a meeting with a challenging objective—to discuss a failing project with one of his product developments teams. The project is costing a lot of time and money but does not appear to have any return on investment in sight. Which of the following approaches would demonstrate successful strategic leadership? a. He should inform them that the project they are working on is no longer aligned with the company's vision, that he's killing it, and that all of their work has been in vain. b. He should keep the project going despite its failure because he doesn't have any better projects for them to work on. c. He should blame the markets for making the project unsuccessful and announce that the company is shifting customer targets and will work on the project in the context of a new industry. d. He should start by thanking the team for their hard work on the project so far but explain the company is no longer pursuing it. He should clearly articulate his vision for the future of the company and the team and set a meeting to debrief on the project.

d. He should start by thanking the team for their hard work on the project so far but explain the company is no longer pursuing it. He should clearly articulate his vision for the future of the company and the team and set a meeting to debrief on the project.

According to your textbook, which of the following would be considered an important step in the A-S-P strategic management process? a. Building the company's organizational chart of strategic leaders b. Acquiring a new business unit to gain access to new markets and product lines c. Utilizing an outside consultant to lead the company through the planning process d. Identifying marketplace opportunities and threats in the external environment

d. Identifying marketplace opportunities and threats in the external environment

Which of the following is the most critical criterion in prioritizing stakeholders? a. Status b. Reliability c. Degree of risk d. Power

d. Power

Which of the following is an example of an intangible resource requiring managerial attention? a. The depreciation of assets owned by the business b. The purchase of inventory c. The amount of cash a business has on hand d. Relationships with customers and suppliers

d. Relationships with customers and suppliers

Which of the following is an example of the mobility of strategies and resources across firms in the mobile network industry? a. Sprint utilizes an innovative marketing strategy to illustrate its price competitiveness compared to Verizon and AT&T. b. Verizon utilizes its high capital availability to invest in a higher quantity of cell towers to achieve a broad geographic network, serving both urban and rural areas. c. A high-level engineer from AT&T is prevented from working for Verizon for five years by a non-compete agreement. d. The spread of 4G technology between Verizon, AT&T, and Sprint makes the high-speed network available to nearly all mobile phone customers.

d. The spread of 4G technology between Verizon, AT&T, and Sprint makes the high-speed network available to nearly all mobile phone customers.

Michael is the CEO of a manufacturer with plants in three countries. He currently has a product line that is manufactured only in the company's U.S. plant. That product has experienced a steady increase in its export sales to Europe over the last three years. The international sales director is recommending that the company expand manufacturing capabilities at the European plant to include this product line. Michael and his management team must consider whether to pursue this strategy. This is: a. a decision driven by the industrial organization (I/O) model of above-average returns. b. a conflict between two of the company's stakeholder groups. c. the diffusion of technology and perpetual innovation to help the company achieve its goals. d. a decision that would benefit from using the entire strategic management process.

d. a decision that would benefit from using the entire strategic management process.

Guinness Enterprises is a multinational corporation (MNC) that was established 75 years ago. One of the goals of Harry Walker, the new Chief Executive Officer (CEO), is to make the firm strategically flexible. Harry should know that: a. it is impossible to develop strategic flexibility in all areas of an organization's operations. b. a firm's focus and past core competencies can help expedite strategic flexibility. c. the most effective way to implement strategic flexibility is through intermittent training courses. d. building strategic flexibility is not easy, largely because of inertia that can build over time.

d. building strategic flexibility is not easy, largely because of inertia that can build over time.

Research suggests that overconfidence can lead to: a. knowledge spillovers. b. competitive advantage. c. long-term profitability. d. excessive risk taking.

d. excessive risk taking.

Perpetual innovation is a term used to describe: a. technologies that destroy the value of an existing technology and create new markets. b. the technology involving the development, maintenance, and use of computer systems, software, and networks for the processing and distribution of data. c. an incremental innovation that enables or sustains an existing product. d. how rapidly and consistently new, information-intensive technologies replace older ones.

d. how rapidly and consistently new, information-intensive technologies replace older ones.

Motorvate is a start-up rental car company. Its owners have decided to use the resource-based model to pursue strategic competitiveness and earn above-average returns. Motorvate's first step in using the model would be to: a. determine the firm's capabilities. b. locate an attractive industry. c. study the external environment, especially the industry environment. d. identify the firm's resources.

d. identify the firm's resources.

All of the following are analyzed during a SWOT analysis EXCEPT: a. weaknesses. b. threats. c. strengths. d. objectives.

d. objectives.

In order to analyze its external environment and internal organization, a firm should: a. set performance benchmarks. b. formulate a business-level strategy. c. implement a resource-based model. d. perform a SWOT analysis.

d. perform a SWOT analysis.

Rubin Collins opened a coffee and sandwich shop, Rubin's Coffee Shop, in his local hometown five years ago. Rubin's has earned above-average returns for the past three years and has outperformed the local Dunkin' Donuts and Subway in terms of sales. Rubin credits low overhead costs and offering high-quality products at low prices as the reason why his shop is so successful. Because of the success of Rubin's Coffee Shop in his hometown, Rubin plans to expand operations and open three new locations in neighboring cities. Based on these facts, it can be concluded that Rubin's has achieved: a. hypercompetition. b. strategic flexibility. c. competitive risk. d. strategic competitiveness.

d. strategic competitiveness.

Joplin Tires' corporate website states "Joplin Tires strives to be the top-selling tire manufacturer in the United States." This statement is Joplin Tires': a. mission. b. statement of organizational culture. c. code of ethics. d. vision.

d. vision.

According to the industrial organization (I/O) model, an attractive industry is one: a. with fierce competition. b. in which a company can use a focus strategy rather than a cost leadership or differentiation strategy. c. with opportunities that can be exploited by the firm's resources and capabilities. d. whose structural characteristics suggest above-average returns.

d. whose structural characteristics suggest above-average returns.