Mgmt

131. High competitive intensity in the focal industry is advantageous for many MNEs because

...

135. The key elements of organizational structure are specialization, centralization, formalization, and

...

148. This is the definition of hierarchy.

...

150. Which of the following does NOT cause a firm to move from a functional structure to a

...

16. When it is cheaper for a firm to produce two or more outputs or services together rather than

...

172. Effective management of the stakeholders can lead to greater organizational flexibility and

...

175. ________ is a decision tool with which managers can recognize, assess, and address the needs of

...

177. Corporate social responsibility has four components: economic, legal, ethical, and __________

...

33. Each stage of the vertical value chain typically represents:

A. A distinct industry.

81. Which type of alliance is most commonly used?

A. A non-equity alliance

103. ______________________________.

A. Achieve synergies and produce high quality goods at lower costs

185. Executive activities include interpersonal roles, informational roles, and ________.

A. Decisional roles

84. ________, in which one partner takes partial ownership in the other partner, are less common than contractual, non-equity alliances because they often require larger investments.

A. Equity alliances

87. _____ and ______ are frequently stepping stones toward full integration of the partner firms either through a merger or acquisition.

A. Equity alliances; joint ventures

163. When pursuing international strategy, a(n) ______ structure is preferred.

A. Functional

156. A company offering a limited line of standard products, that competes in a similar manner with a narrow, local market focus, and whose competitive advantage is a focus on low cost derived from gaining economies of scale should organize around a ________.

A. Functional structure

41. If a firm wishes to expand beyond a single market and grow through being active in several different countries, it is pursuing the _______________ diversification strategy.

A. Geographic

68. Looking through the lens of the structure-conduct-performance (SCP) model, _____ changes in the underlying industry structure favor the surviving firms.

A. Horizontal integration

182. The risk of employee opportunism on behalf of agents is exacerbated by _______.

A. Information asymmetry

120. responsiveness and low pressure for cost reductions, the firm is likely to adopt a(n) _________.

A. International strategy

192. The upper-echelons theory states that ____________.

A. It is the top management team that primarily determines the success or failure of an organization

27. ___________ is a form of long-term contracting that is generally used in the manufacturing sector and which enables a firm to commercialize intellectual property like patents.

A. Licensing

75. _______ are contractual alliances in which the participants regularly exchange codified knowledge.

A. Licensing agreements

183. _______ is the term that describes the difficulty of the principal to ascertain whether the agent has really put forth a best effort.

A. Moral hazard

37. __________ assets are assets like special equipment that are required to be co-located and used by a firm, such as mineral extraction equipment and bauxite mines.

A. Site specificity

171. _________ is an integrative framework to connect corporate governance, business ethics, and strategic leadership.

A. Stakeholder strategy

24. ___________ allow a firm to enter into a voluntary arrangement with another firm with the intent of sharing knowledge and resources to develop processes, products, or services together.

A. Strategic alliances

121. One disadvantage noted in the text of an international strategy is _______________.

A. The expropriation of intellectual property by foreign competitors

124. International strategy focuses on:

A. The scale of operations through both product and geographic diversification.

142. Organizational design is __________.

B. A process of creating, implementing, and modifying the structure of an organization

184. _________ describes a situation in which an agent misrepresents his or her ability to do a job.

B. An adverse selection

90. partners.

B. An alliance manager

91. To accomplish effective alliance management, it is suggested that firms create a(n) _____, endowed with its own resources and support staff.

B. Dedicated alliance function

51. When the stock price of highly diversified firms is valued less than the sum of its individual business units, a(n) _________ occurs.

B. Diversification discount

106. Why might going global be necessary to achieve growth in smaller economies like South Korea?

B. Limited domestic market

96. A small-world phenomenon is a situation in which a network exhibits _____ clusters, each with a high degree of centrality.

B. Local

153. When a firm diversifies into different product lines and geographies, a(n) _______ structure is preferred.

B. M-form

164. When pursuing localization strategy, a(n) ________ structure is preferred.

B. M-form

165. When following a global standardization strategy, a(n) _______ structure is preferred.

B. M-form- MNEs attempt to reap significant economies of scale and location economies by pursuing a global division of labor based on wherever best-of-class capabilities reside at the lowest cost. Therefore, the M-form is the best match.

64. A(n) _________ describes the joining of two independent companies to form a combined entity.

B. Merger

187. All of the following are examples of a leader's interpersonal roles EXCEPT ________.

B. Monitor- Interpersonal roles are figurehead, liaison, and leader.

167. _______ seek to guide employee behavior by defining expected results.

B. Output controls

85. In the first phase of alliance management, _____ captures aspects of cultural fit between different firms

B. Partner compatibility

38. A type of specific asset that has physical and engineering properties that were specifically created to satisfy a particular customer (for example, the bottles for PepsiCo) are which form of asset specificity?

B. Physical-asset

109. ___________ deal(s) with inequality among people in terms of physical and intellectual capabilities.

B. Power distance

22. When an employee of a firm follows his or her own interests such as pursuing managerial perks when performing activities on behalf of the owner of the firm, a(n) _______________ problem occurs.

B. Principal-agent

45. Economies of scope often occur when a firm is using the ______________ diversification strategy because the firm is able to pool resources and leverage competencies.

B. Related

176. different stakeholders.

B. Stakeholder impact analysis

143. A firm's _______ specifies the work to be done and resource distribution.

B. Structure

72. According to _____, critical resources and capabilities frequently are embedded in strategic alliances that span firm boundaries.

B. The relational view of competitive advantage

11. Corporate strategy is concerned with determining the boundaries of the firm among geographic, vertical, and product/service dimensions. This is referred to as:

B. The scope of the firm.

19. The costs associated with the "make or buy" question when determining the scope of the firm are:

B. Transaction costs.

98. _________ occurs when a network exhibits local clusters, each with a high degree centrality.

C.

71. _____ is a voluntary arrangement between firms that involves the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services to lead to a competitive advantage.

C. A strategic alliance

94. _____ is a space where two organizations are connected to the same organization, but are not connected to one another.

C. A structural hole

173. __________.

C. Adaptability

88. _____ is a senior, corporate-level executive responsible for high-level support and oversight.

C. An alliance champion

44. Firms use related diversification strategies in order to:

C. Benefit from economies of scale and scope.

193. _______ is a conceptual framework of leadership progression with five distinct sequential levels.

C. Collins's leadership pyramid

181. ________________ is a mechanism to direct and control an enterprise in order to ensure that it pursues its strategic goals.

C. Corporate governance

56. The Boston Consulting Group (BCG) matrix is a tool that helps with:

C. Corporate portfolio planning and restructuring.

54. In order for a diversification strategy to enhance firm performance, it must do any of the following EXCEPT:

C. Create diversification discounts. - A diversification strategy enhances firm performance if it either provides economies of scale (reduces costs), exploits economies of scope (increases value), or does both.

130. EXCEPT the:

C. Economic institutions.

31. The ________________ relationship is the closest to a firm being fully integrated. In this relationship, transaction costs typically arise from political turf battles between the corporate office and the standalone business.

C. Parent-subsidiary

76. A distinctive characteristic of equity alliances is _____.

C. Partners taking an ownership position

178. responsibilities.

C. Philanthropic

174. The three attributes of stakeholders are _________, legitimacy, and urgency.

C. Power

43. PepsiCo sells a wide variety of beverages and food products in 190 countries. It is clearly engaging in______________ to achieve continuous growth.

C. Product-market diversification

157. Management using the M-form structure to support a(n) ___________ strategy should ideally concentrate decision making at the top of the organization.

C. Related diversification

55. Research indicates that when it comes to the diversification-performance relationship:

C. Related-constrained and related-linked strategies are associated with higher firm performance.

149. The number of levels of hierarchy determines a manager's ___________, which is how many employees directly report to a manager.

C. Span of control

92. A(n) _____ is a social structure composed of multiple organizations and the links among the nodes.

C. Strategic network

69. Horizontal integration can affect several of Porter's five forces for the surviving firms. Which of the following would this include?

C. Strengthening bargaining power vis-à-vis supplier and buyers

161. All of the following are benefits of a matrix structure, EXCEPT __________.

C. Structural simplicity

151. multidivisional structure?

C. The need for knowledge-sharing among specialists

126. Which of the following is NOT a factor pressuring companies for local responsiveness?

D. Availability of low labor costs -Local responsiveness refers to quickly responding to a local change of demands and is not related to low labor costs.

123. To maximize profitability, the best global strategy to use is _____________.

D. Dependent on products offered and strategic intent

114. ________________.

D. Distinct institutions and cultures

179. Corporate citizenship refers to _______ responsibility.

D. Philanthropic

62. In an equity alliance, firms tend to share mostly explicit knowledge.

FALSE In a non-equity alliance, firms tend to share explicit knowledge.

60. Managerial hubris is a form of self-delusion, in which managers convince themselves of their superior skills in the face of clear evidence to the contrary.

TRUE

61. Strategic alliances are volunteer arrangements between firms that involve the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services.

TRUE

52. Companies that pursue related diversification often receive a diversification premium, leading to a stock price valuation that is higher than the sum of their individual business units. This premium indicates that investors:

Understand that firms with related diversification strategies are more likely to improve their performance than other diversified firms.

74. The most common type of alliance is a(n) ______, which is based on contracts between firms.

A. Non-equity alliance

46. When a firm uses many links (common resources and competencies) among its businesses, it is engaging in a(n) _________ diversification strategy.

A. Related-constrained

127. A large domestic market can provide the country's industries with a chance at dominating the world market because _____________.

A. They have been able to develop economies of scale at home

111. In high-power distance cultures, people tend to:

A. Translate inequalities in power, status, and wealth.

117. When a firm faces high pressure for local responsiveness and high pressure for cost reduction, it is likely to adopt a(n) _____________.

A. Transnational strategy

53. ___________ firms are often unable to achieve additional value creation.

A. Unrelated diversified

21. Transaction costs:

Transaction costs help to determine the scope of the firm, are associated with economic exchange, and are both internal and external costs.

166. Organizational culture is difficult to imitate because of ________.

A. Causal ambiguity and social complexity

49. A tool that helps managers evaluate how the firm's core competencies can support certain diversification strategies is the:

A. Core competence-market matrix.

82. _______ describes equity investments by established firms in entrepreneurial ventures.

A. Corporate venture capital

95. If a firm is highly visible and prominent in the cluster and has access to many channels of information, it has a high _____

A. Degree of centrality

17. separately through using the same resources and technology, then _________ occur.

A. Economies of scope

125. Transnational strategy promotes innovation because of:

A. Effective global learning.

115. According to the integration-responsiveness framework, if a firm is facing high pressure for local responsiveness and low pressure for cost reductions, the firm is likely to adopt a(n)

...

12. All of the following are decisions that managers must make when formulating corporate strategy

...

129. The four aspects of Porter's model of national competitive advantage include all of the following

...

180. Corporate citizenship is a philanthropic responsibility.

...

34. When a firm is fully vertically integrated:

A. All activities are conducted within the boundaries of the firm.

15. Management of a firm must decide what range of products and services the firm should offer. This determines the firm's horizontal integration, or:

B. Diversification.

155. The more _____ a firm, the more the structure will have to be designed to accommodate coordination.

B. Diversified

28. If a firm wishes to bridge the gap between being fully integrated ("make") and transacting in the marketplace ("buy"), it can enter into a(n) _________ agreement which grants the right to an individual or group to use the firm's trademark and business processes to sell goods and services that carry the firm's brand name.

B. Franchising

159. A matrix structure is the combination of the ______ and ______ structure.

B. Functional; M-form

50. Under the core competence-market matrix, the most difficult diversification strategy is combining__________ with ________, because core competencies must be built. However, this creates the potential for "mega opportunities" and significant future growth opportunities for a firm that achieves this.

C. New core competencies with new markets

141. What are the three key levers a firm needs to design its organization for competitive advantage?

C. Structure, culture, and control

189. Which of the following best describes the leader's role of disseminator?

C. The executive passes necessary information on to internal stakeholders.

104. Location economies are promoted by _____________ from foreign direct investments.

D. A community of learning

145. One of the drawbacks of a high degree of formalization is ______.

D. A slow decision-marking process

73. Firms would use strategic alliances to _____ in countries such as Saudi Arabia or China.

D. Enter new markets

128. From Porter's National Competitive Advantage framework, ____________ describe(s) a country's endowments in terms of natural, human, and other resources.

D. Factor conditions

63. A governance mechanism that falls under the category of non-equity alliances is Corporate Venture Capital (CVC) investments.

FALSE CVC is a type of equity alliance.

9. When it comes to accessing capital and value creation, a diversified firm should always choose its internal capital market over external capital markets.

FALSE Internal capital markets can be a source of value creation in a diversification strategy only if the firm does a more efficient job of allocating capital than what would be achieved in external capital markets.

170. Corporate governance needs to address adverse selection, which is describing how difficult it is for the principal to know whether the agent has really put forth the best efforts.

FALSE Moral hazard, not adverse selection, is describing how difficult it is for the principal to know whether the agent has really put forth the best efforts.

1. Corporate-level strategy involves the decisions made and actions taken while deciding which industries and markets to pursue simultaneously.

TRUE

10. A firm's overall corporate strategy is most concerned with determining levels of vertical integration as well as levels of diversification.

TRUE

136. hierarchy.

TRUE

3. Industry value chains are also called vertical value chains.

TRUE

7. Corporate diversification strategy leads to superior performance only if the individual businesses are worth more under the company's management than if managed individually.

TRUE

2. A key component to formulating corporate-level strategy is the "make" or "buy" decisions.

TRUE Central to formulating corporate-level strategy is determining which activities a firm should pursue inhouse (make) versus which goods and services to obtain externally (buy).

59. Horizontal integration can help firms enhance differentiation.

TRUE Horizontal integration through M&A can help firms strengthen their competitive position by increasing the differentiation of their product and service offerings.

6. The most challenging diversification strategy is one in which the firm must create new corecompetencies while pursuing new market opportunities

TRUE combining new core competencies with new market opportunities is typically the most challenging diversification strategy because it requires building new core competencies to create and compete infuture markets.

93. Which of the following is NOT related to strategic networks?

C. It has the ability to effectively manage three alliance-related tasks.

80. Which of the following is NOT one of the pros in a Joint Venture?

C. It's flexible.-Flexibility is a key characteristic of a non-equity alliance but not a joint venture.

132. _________________.

. It forces MNEs to be more prepared for intense global competition

102. Firms with core competencies that can be exploited across international markets are able to

...

113. According to the globalization hypothesis, there seems to be some convergence of consumer preferences across the globe. However, national differences remain. This is due to

...

119. According to the integration-responsiveness framework, if a firm is facing low pressure for local

...

26. When one firm makes a credible commitment to another firm, it is doing all of the following EXCEPT: A. Creating trust between the firms. B. Making a long-term strategic decision. *C. Offering a promise that it will perform in the future. D. Sharing the risk and costs. The offering of a promise to perform in the future is not making a credible commitment.

...

89. _____ serves as an alliance process resource and business integrator between the two alliance

...

36. when a firm vertically integrates along the industry supply chain and invests in specific assets in order to support its activities, it has invested in:

.C. Specialized assets.

110. When the degree of power distance in a particular culture is ______, people tend to allow more inequalities and transform to their own benefits.

A. high

152. A(n) ______ structure is recommended when a firm has a fairly narrow focus in terms of product/service offerings.

B. Functional

168. ____________ seeks to define and direct employee behavior through a set of codified rules and standard procedures.

B. Input control

97. A _____ allows a firm to find novel solutions to thorny problems because she often has access to diverse knowledge, and can link that information to implement solutions in the form of new products or processes.

B. Knowledge broker

23. An alternative perspective to the transaction cost economics framework concerning the make-or-buy decision is the _____________ view of the firm, which focuses the firm less on transaction costs and more on its capabilities and knowledge and what it does well.

B. Resource-based

35. All of the following are fundamental elements of an industry value chain EXCEPT:

B. Support activities.

39. The two alternatives to vertical integration that provide similar benefits while reducing the risks to the firm are _________ and ____________.

B. Taper integration; strategic outsourcing

190. Which of the following best describes the leader's role of spokesperson?

B. The executive passes necessary information on to external stakeholders.

77. Which of the following is NOT one of the pros of a non-equity alliance?

B. Trust and commitment.-Trust and commitment usually take lots of time to establish, and non-equity alliances are typically more short term in nature.

32. Industry value chains consist of all of the processes that transform raw materials into finished goods and services. These value chains are also called:

B. Vertical value chains. Industry value chains are also called vertical value chains.

112. When a firm chooses to build new plants and facilities from scratch in foreign markets, this is called

C. A greenfield strategy

188. All of the following are examples of a leader's informational roles EXCEPT _______.

C. Entrepreneur- A leader's informational roles are monitor, disseminator, and spokesperson.

83. Corporate venture capital (CVC) investments are _____ investments by established firms in entrepreneurial ventures.

C. Equity

118. When a firm faces low pressure for local responsiveness and high pressure for cost reduction, it is likely to adopt a(n) __________.

C. Global-standardization strategy

14. A(n) _____________ is where the transformation of raw materials into finished goods and services occurs along distinct vertical stages.

C. Industry value chain

30. Dow Corning is owned jointly by Dow Chemical and Corning. Dow and Corning have entered into a __________, which is a special form of strategic alliance whereby two or more partners create and jointly own a new organization.

C. Joint venture

100. International strategy refers to:

C. Leveraging home-based core competencies by selling the same products or services in both domestic and foreign markets.

116. _____________.

C. Localization strategy

162. A ___________ structure allows the firm to connect centers of excellence, wherever their global location.

C. Network

20. Vertical integration involves all of the following EXCEPT:

C. The expansion by the firm into different product lines and markets. Expanding into different product lines involves horizontal integration decisions.

47. The more "constrained" the relatedness of diversification:

C. The more links there are among the businesses owned by the organization.

86. The third phase in a firm's alliance management capability concerns _____.

C. The ongoing management of the alliance

160. When using a matrix structure, a firm tends to pursue a(n) ________ global strategy.

C. Transnational

78. Which of the following is one of the benefits of an equity alliance?

C. Trust and commitment.

154. Typically, successful firms pursuing a differentiation strategy will __________.

C. Use cross-functional development teams

147. _______ determines the formal, position-based reporting lines.

D. Hierarchy

67. _____ is NOT one of the drawbacks in horizontal integration.

D. Higher costs- Lower costs would be a benefit in this kind of integration.

66. _____ is the process of acquiring and merging with competitors, leading to industry consolidation.

D. Horizontal integration

70. Firms use _____ to lower costs through economies of scale, and thus enhance their economic value creation and, in turn, their performance.

D. Horizontal integration

144. Organizational ________ refers to a firm's resistance to change in the status quo.

D. Inertia

122. The stage model of an international entry vehicle does NOT apply to ___________.

D. Internet companies

133. According to Porter, the enduring competitive advantages in a global economy lie increasingly in local things, such as _________.

D. Knowledge, relationship, and motivation

65. The combining of two firms of comparable size is often described as a(n) _____.

D. Merger

108. _______ refers to the political and legal factors of a foreign market.

D. National institutions

146. Structural stability affects the organization's ability to ____________.

D. Predictably manage its daily work routines

42. When a firm is active in several different product markets, it is pursuing a(n) ____________ diversification strategy.

D. Product

105. Economic development has two consequences for MNEs. They are ______________.

D. Rising wages and high living standards

25. all of the following are forms of strategic alliances EXCEPT:

D. Short-term outsourcing. Short-term outsourcing is not a type of strategic alliance.

186. The task of managing an overall enterprise and influencing key organizational outcomes is referred to as __________.

D. Strategic leadership

140. What is the framework that an organization adopts to divide tasks, deploy resources, and coordinate departments?

D. Structure

79. Joint venture alliances are where ___________ knowledge is exchanged.

D. Tacit and explicit

40. Both Apple and Nike produce their products and own retail outlets. They also rely on independent distributors to sell their offerings. Apple and Nike are utilizing _________ to partially rely on outsidemarket firms while supporting their forward vertical integration strategy.

D. Taper integration

29. Equity alliances are forms of strategic alliances that do all of the following EXCEPT:

D. Temporarily allow one partner to use the other's trademark and business processes. -Equity alliances are partnerships in which at least one partner takes partial ownership in the other partner, which signals greater commitment to the partnership and can encourage specialized investments for future performance, as evidenced in the case of Toyota and Orocobre.

107. The location advantages associated with locating facilities in other countries can include all of the following EXCEPT:

D. The evasion of host country regulations.

191. Which of the following best describes the leader's role of negotiator?

D. The executive represents the company when having talks with major internal and external stakeholders.

48. All of the following are true about conglomerates EXCEPT:

D. They are likely acquisition targets for large single-business firms. -Conglomerates are generally very large firms and therefore not the subject of acquisitions. Further, a single-business firm, no matter how large, is very unlikely to want to diversify by purchasing a huge conglomerate.

158. Managers using M-form structures to support a(n) __________ strategy should decentralize decision making.

D. Unrelated diversification

101. Foreign direct investment (FDI) is a firm's investment in _________ abroad.

D. Value chain activities

13. EXCEPT:

D. Whether the company should compete through differentiation or cost leadership. Determining whether to compete through differentiation or cost leadership is a business-level strategy.

5. gradually moving an activity from internal to an outside firm is called taper integration.

FALSE Taper integration is a dual-source model that uses both internal and external sources at the same time. It can be used in backward integration for supplies or forward integration for channel access to customers.

8. the Boston Consulting Group (BCG) growth-share matrix is a tool used by firms to determine the costs and quality of its offerings.

FALSE The BCG growth-share matrix is a tool to guide corporate portfolio planning.

57. An acquisition describes the joining of two independent companies to form a combined entity.

FALSE This is the definition of a joint venture.

58. A merger describes the purchase or takeover of one company by another.

FALSE This is the definition of an acquisition.

4. Investment in specialized assets is a huge risk of vertical integration

FALSE Vertical integration along the industry value chain can also facilitate investments in specialized assets. Specialized assets have significantly more value in their intended use than in their next-best use. They are a benefit of vertical integration and can help gain and sustain a competitive advantage.

137. A high degree of formalization streamlines the decision-making process.

FALSE- A higher degree of formalization actually slows down the decision-making process.

134. Organizational inertia often prompts top management to initiate structural change when organizational performance levels drop.

FALSE- Inertia is the resistance to change at top management levels.

138. Companies and business units using the differentiation strategy should emphasize extrinsic strategic controls.

FALSE- When a firm's strategic focus is differentiation, it usually benefits from organic structure, which has less focus on traditional controls. However, newer systems such as ROWE need to be used that encourage intrinsic controls instead.

169. Stakeholders impact analysis is a tool used to quantify which specific stakeholders have the largest financial impact on the firm.

FALSE-Stakeholder impact analysis is a tool that helps managers address the needs of all different stakeholders for optimal firm performance.

139. If a firm emphasizes performance and outcomes, it usually focuses more on output controls.

TRUE- Output control tends to be performance-oriented.

99. Corporate strategy has three dimensions: degree of vertical integration, what products to offer, and global strategy.

just know these

18. Applying the ______________ framework helps managers make economic decisions namely

what activities to pursue within the firm and which to obtain from the external market.; D. Transaction cost economics