MGMT 495 review

slow down decision making

A high degree of formalization in an organization is most likely to

Apple's core competency with consumer services and IBM's core competency with business services complemented each other.

Although long-standing enemies, Apple and IBM formed an alliance partnership. How did this partnership benefit both Apple and IBM?

world's market economies are becoming more integrated.

As a result of globalization, the

product diversification

BM Goods Inc. is a large conglomerate that operates only in its home country. The company competes in industries like the consumer electronics, health care, hotel, airlines, education, and steel industries. Which of the following diversification strategies does this best illustrate?

are able to increase value due to economies of scope.

Companies that pursue related diversification are able to create a diversification premium because they

architectural innovation

DigitalHealth Electronics 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?

demand conditions

Due to dense urban living conditions, hot and humid summers, and high energy costs, it is not surprising that Japanese customers want small, quiet, and energy-efficient air conditioners. Which feature of Porter's diamond framework does this scenario best exemplify?

social entrepreneur

Georgia Ray is the founder of the departmental stores chain, Ether Inc. She ensures that the products in her stores are ethically and responsibly sourced. Most products are therefore 100 percent organic and manufactured from recycled material. Also, her company purchases handicrafts from nonprofit organizations supporting the aged. Georgia's belief is that her company should be able to support the community at large. Which of the following terms best describes Georgia Ray?

He must be aware of the fact that despite globalization and the emergence of the Internet, firm geographic location has actually maintained its importance.

Hans is a strategist who wants to decide on the appropriate strategy to help his firm "go global." Which of the following should Hans consider while choosing his strategy?

It has access to convenience stores and a new distribution channel.

How does Kraft Foods benefit from its hostile takeover of Cadbury PLC in 2010?

Although the early majority is confident in their ability to master a new technology, the late majority is not.

How is the early majority section of consumers different from the late majority section?

by focusing its resources on producing high-quality content for content streaming

How was Netflix able to outperform both Hulu and Amazon?

shakeout stage

In emerging economies, the LCD television industry is in that phase of the industry life cycle in which the previously increasing market demand becomes limited. The competitive intensity within the industry is high, and inefficient firms have begun to exit the industry. This has allowed only a few major companies to come out as cost-leaders and hold the shrinking market. Which of the following stages of the industry life cycle is the LCD television industry currently in?

radical innovation will disturb the existing power distribution within the firms.

Incumbent firms favor incremental innovation over radical innovation because

enter into the market in large numbers, creating a herding effect.

It is important for a firm to win over the early majority section of the market to ensure the commercial success of an innovation because they

managerial hubris

JetStream Airway's decision to acquire Rex Fuels Inc. proved to be ill-fated because its managers had overestimated their abilities and skills. They believed that they had the skills to manage such diversified businesses and create additional shareholder value. However, the acquisition failed to create the anticipated synergies because the managers' capabilities were restricted to the airlines industry. What does this scenario best illustrate?

backward vertical integration

Neon Electronics Inc. sourced touch screens required for its tablet computers, cell phones, and televisions from a manufacturer in China. But the demand for such components was high globally, and the supplier could not meet the quality standards of Neon Electronics. Thus, Neon Electronics decided to set up its own unit to develop and manufacture the required touch screens. What does this scenario best illustrate?

horizontal integration

Olympia Autos Inc. merged with its competitor Vaca Autos Inc. This allowed Olympia Autos to use its technological competencies along with Vaca Autos' marketing capabilities to capture a larger market share than what the two entities individually held. What does this scenario best illustrate?

organic

Plow Inc. is a greeting card manufacturing company. Plow's market dominance exists primarily because of the innovative designs of its greeting cards when compared to those of its competitors. In this scenario, Plow Inc.'s managers must ideally rely on a functional structure that resembles a(n) _____ organization.

two

Researchers at Games First Inc. spent several months coming up with a fun game for toddlers that incorporates a new idea in preschool education. This scenario describes step _____ of the innovation process.

it underestimates its liability of foreignness when entering the Zevar market.

Silca Electronics Inc. is a consumer-electronics company based in the country of Pelo. It has approximately 300 stores across the country and is already active in three foreign countries. It attempts to establish itself successfully in the country of Zevar, and uses its low-cost strategy to do so. However, due to the additional costs associated with training, coordinating across geographic distances, and other costs associated with doing business in an unfamiliar cultural and economic environment, Silca Electronics Inc. incurs huge financial losses in Zevar. In this scenario, Silca Electronics Inc.'s failure to establish itself successfully in Zevar occurs most likely because

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

The administrative and political distance between two trading countries reduces when

growth stage

The leading producer of gardening tools, YourGarden Inc, has achieved great success because they produce high-quality tools that are not too expensive. Even so, another company that produces lower-quality tools at the same price has also achieved some success, but not as much as YourGarden. Also, in general, the price of gardening tools has declined because of economies of scale and learning. In addition, YourGarden has added complementary assets, such as gardening instruction. Considering all of these factors, the gardening tool industry is most likely in the

by having higher performance in another sector

The managers at AHL Chemicals Inc. decided that their firm needed to diversify because of falling sales and lower performance in one sector. How does diversifying compensate for the lackluster performance in this sector?

location economies.

Unilever's new-concept center is situated in downtown Shanghai, China, attracting hundreds of eager volunteers to test the firm's latest product innovations on-site while Unilever researchers monitor consumer reactions. In this example, Unilever is trying to reap the benefits of

an extremely formalized organizational structure

W. L. Gore & Associates is the inventor of path-breaking new products such as breathable GORE-TEX fabrics, Glide dental floss, and Elixir guitar strings. Which of the following would be most likely to hinder its intention of fostering employee satisfaction, retention, and creativity?

the pursuit of an innovation that uses concepts from strategic management

What is strategic entrepreneurship?

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

What most likely happens when a firm optimizes its organizational structure to its current situation?

consider an outright acquisition.

When a firm does not have the resource required for pursuing a growth strategy, and if the resource in question is not easily tradable, the implication for the strategist is most likely to

sell its products in several different regional, national, and international markets.

When a firm is said to be pursuing a geographic diversification strategy, it means that the firm will

when extreme closeness to the resource partner is necessary to understand and obtain its underlying knowledge

When should mergers and acquisitions (M&A) be considered the "buy" option for a strategist trying to determine which corporate strategy to implement?

a company that pursues unrelated diversification

Which of the following firms is most prone to experiencing a diversification discount?

high span of control

Which of the following is a feature of an organic organization?

Multinational enterprises (MNEs) began to create smaller, self-contained replicas of themselves in a few key countries.

Which of the following is a feature of the Globalization 2.0 stage?

There is a reduction of excess capacity in the market.

Which of the following is a result of horizontal integration in terms of Porter's five forces model?

Based on an optimal mix of costs, skills, and PESTEL factors, companies now freely locate business functions anywhere in the world.

Which of the following is an observable feature in the Globalization 3.0 stage?

reduced employee satisfaction due to repetition of tasks

Which of the following is an unintended side effect of a high degree of specialization in an organization?

They reduce a firm's exposure to loss of reputation.

Which of the following is the most likely advantage of using foreign acquisitions or greenfield plants as a foreign entry mode?

motivating managers

Which of the following motivations for business growth involves principal-agent problems?

Rachel implemented a new and more efficient way to produce pottery.

Which of the following scenarios would be characteristic of an entrepreneur?

It increases the value of the focal firm's offering from a customer's perspective.

Which of the following statements best explains how the presence of top-notch complementors within a firm's industry affects the focal firm's business?

Innovation has to be high-tech in order to be a potent competitive weapon.

Which of the following statements is not true about innovation?

While the industry for cell phones with holographic keyboards will focus on product innovation, the tablet industry will focus on process innovation.

While cell phones with holographic keyboards are currently in the introduction stage of the industry life cycle, tablet computers are in the growth stage. In the context of this scenario, which of the following statements is true?

simple

While working a night job at a call center, Carlos creates an app called DineSmart, which can be used to place orders at restaurants, rate the restaurants, and make reservations. Because he receives good responses for his app, he quits his current job to focus his efforts on DineSmart. He creates a start-up called TYOP and hires three people to help him improve DineSmart and maintain the servers that run it. In this scenario, TYOP most likely has a _____ structure.

A simple structure could not provide the effective division, coordination, and integration of work required to accommodate future growth.

Why did W. L. Gore reorganize itself into a functional structure from a simple structure?

Organizational inertia

_____ refers to a firm's resistance to change the status quo that can set the stage for the firm's subsequent failure.

targets new markets by using existing technology

architectural innovation

invades existing markets from the bottom up using new technologies

disruptive innovation

targets existing markets using existing technology

incremental innovation

targets new markets by using new technologies

radical innovation