487 exam 2
Which of the following statements about ethics is false? Business ethics is the application of ethical standards to commercial enterprises. Ethics assists individuals in deciding when an act is moral or immoral. Ethics may be defined as a system of right and wrong. Ethics can be assessed by the legality of an action.
Ethics can be assessed by the legality of an action.
Which component of emotional intelligence (EI) enables a manager to have a deep understanding of the existence and importance of cultural and ethnic differences? self-regulation social skills empathy self-awareness
empathy
A drawback of EI is that a leader can find it easy to over-identify with others and confuse ________ with ________. empathy; sympathy intelligence; empathy motivation; empathy motivation; intelligence
empathy; sympathy
Amazon is an example of a company that used the differentiation strategy to enter the market. The differentiation features included traditional delivery logistics. exceptional customer service. minimal customer service. traditional back office logistics.
exceptional customer service.
Companies that cultivate cultures of experimentation and curiosity make sure that ________ is not to be avoided at all costs. failure authority experimentation risk taking
failure
(T/F) In a barrier-free organization, differences in skills, authority, and talent disappear.
false
(T/F) Informational controls involve the balance and alignment of the culture, rewards, and boundaries of a firm.
false
Consolidating the European aerospace industry was a strategic decision to compete against Boeing because Boeing had a ________ advantage. transnational multidomestic licensing first mover
first mover
Organizations that make it to the growth stage, design strategies to reduce the tendency to increase operational scope. reduce the commitment to new product-market domains. increase the overall scope of operations. leave exiting product-market domains.
increase the overall scope of operations.
Related industries create the probability that new companies will enter the market. This ________ competition and forces existing firms to improve ________. decreases; innovation decreases; efficiency decreases; sales increases; efficiency
increases; efficiency
The power of shareholders has intensified in recent years because of the decline in the number of interested institutional investors. increasing influence of small individual investors. decreasing influence of large institutional investors. increasing influence of large institutional investors.
increasing influence of large institutional investors.
Effective learning organizations must redistribute ________, ________, and ________ in order to assure that there is a common body of knowledge. rewards; training; handbooks knowledge; financial rewards; intangible rewards information; knowledge; rewards training; knowledge; pay raises
information; knowledge; rewards
Top managers at ABC Company meet every Friday to review daily operational reports and year to date data. This is an example of strategy formulation. informational control. behavioral control. strategy implementation.
informational control.
Proactive measures to prevent organizational ethics problems do not include using organization information systems as a control system. instituting a reward system which considers outcomes as its primary criterion. using leaders as role models of ethical behavior. issuing statements describing organization commitment to certain standards of behavior.
instituting a reward system which considers outcomes as its primary criterion.
The U.S. Small Business Administration supports small business through all the following except investing venture capital. underwriting loans. government contracting. training and counseling.
investing venture capital.
Proponents of flat leadership structures argue that they offer all of the following except ________ benefits. longer feedback creativity cost flexibility
longer feedback
Which of the following is not a strategic risk of outsourcing? loss of nonvital functions loss of cross-functional skills loss of control over a supplier loss of critical skills
loss of nonvital functions
In emerging economies and continental Europe, firms often can be characterized by all the following except weak legal protection for minority shareholders. low family ownership and control. concentrated ownership. business group structures.
low family ownership and control.
Greeks reacted negatively to Coca-Cola advertising using Coke bottles as pillars for the Parthenon. This is a form of ________ risk. management economic currency environmental
management
Complicated working relationships, intense power struggles, and excessive reliance on group processes are disadvantages of which type of organizational structure? matrix holding company divisional functional
matrix
Effective boundaries and constraints: distract employees who are trying to focus on organizational priorities. minimize improper and unethical conduct. tend to inhibit efficiency and effectiveness. tend to limit organizational growth.
minimize improper and unethical conduct.
CEOs who are ________ tend to have a wide circle of acquaintances as well as a knack for finding common ground and building rapport. motivated self-regulators socially skilled self-aware
socially skilled
Firms following a global strategy strive to offer ________ products and services as well as locate manufacturing, research and development, and marketing activities in a limited number of locations. standardized more expensive local internationally differentiated widely differentiated
standardized
An organization such as ConAgra that has dozens of different divisions with similar products will probably have the greatest success with which form of organization structure? matrix structure strategic business unit structure holding company structure functional structure
strategic business unit structure
In the contemporary approach to strategic control, adapting to and anticipating both internal and external environmental change is an integral part. The relationships between ________, ________, and ________ are highly interactive. change; leadership; control strategy formulation; leadership; control strategy formulation; implementation; control strategic information; organizational behavior; implementation
strategy formulation; implementation; control
A firm is considering a large price cut on its leading product to gain market share. One executive strongly disagrees with the price cut. He observes that they are in the same marketplace as their rivals and do not have any competitive advantages in their cost structure. If they cut prices, their competitors will likely do the same. The result is that everyone will make less money. These arguments are an example of a hardball strategy. weakness strategy. strategy of co-opetition. strategy of forbearance.
strategy of forbearance.
An ethically sound organization, drawing on the concepts of stakeholder management, can also strengthen its bonds among its ________, ________, and ________. policies; procedures; values current employees; potential employees; future employees values; organizational design; employees suppliers; customers; governmental agencies
suppliers; customers; governmental agencies
In competitive dynamics, new entrants may be forced to change their strategies or develop new ones to ________ competitive challenges by ________. succumb; potential rivals overcome; other new rivals survive; former rivals survive; incumbents
survive; incumbents
Organizational structure refers to the formalized patterns of interactions that link company ________, ________, and ________. processes; people; mechanisms processes; mechanisms; techniques tasks; mechanisms; techniques tasks; technologies; people
tasks; technologies; people
As firms expand into foreign markets, they generally follow a pattern of change in structure that parallels the changes in their strategies. Which one of the following is not a major contingency that influences the structure they choose? the type of strategy that is driving the company foreign operations the extent of the company dependence on foreign sales the research and development budget commitment product diversity
the research and development budget commitment
(T/F) Cutting prices or increasing marketing efforts are examples of tactical competitive actions.
true
(T/F) If similar competitors vie for the same customers in a marketplace, they are likely to escalate their competitive strategy through a reactive series of actions and responses.
true
(T/F) In order to succeed in being creative and agile, innovative firm teams must hold the team accountable.
true
(T/F) Increasing international exchange in goods and services can run into the difficulty of how to address the needs of customers at differing income levels.
true
(T/F) Many international firms are increasing their efforts to market their products and services to countries such as India and China as the ranks of their middle class continue to increase.
true
(T/F) Small businesses create the majority of new jobs in the U.S. economy.
true
(T/F) Strategic control systems, both informational and behavioral, are used to correct the performance and ultimate strategy of a firm.
true
The central key to empowerment is effective leadership. Leading-edge organizations recognize the need for ________, ________, and ________ at all levels instead of the extensive and cumbersome rules and regulations inherent in hierarchical control. control, order, finances training; finances; expertise respect; finances; trust trust; cultural control; expertise
trust; cultural control; expertise
The two vital elements that managers must concern themselves with, when creating boundaryless organizations, are financial returns and marketplace value. market share and shareholder value. product marketability and capital structure. type of structure and the mechanisms, processes, and techniques for enhancing permeability.
type of structure and the mechanisms, processes, and techniques for enhancing permeability.
Unilever has taken a dominant position (65 percent market share) in the Vietnamese laundry detergent market by employing an investment and marketing campaign that decimated the market position of the local, incumbent competitors. According to the Stalk and Lachenauer book, this is an example of ________ strategy. raise competitors' costs deceive the competition plagiarize with pride unleash massive and overwhelming force
unleash massive and overwhelming force
Which of the following is not an aspect of culture that effective learning organization firms need to develop as they redistribute information, knowledge and rewards? encourage employees to offer ideas, ask questions, and express concerns encourage collaborative decision-making and the sharing of best practices encourage widespread sharing of information from various sources utilize technology that fosters tighter controls
utilize technology that fosters tighter controls
A ________ is a business in which a multinational company owns 100 percent of the stock. joint venture franchising operation strategic alliance wholly owned subsidiary
wholly owned subsidiary
If an international firm has a multidomestic strategy and a relatively high level of product diversity, the best choice for its organizational structure is a(n) ________ structure. worldwide product division worldwide matrix international division worldwide functional
worldwide matrix
Most organizations with strong cultures and a sound system of rewards and incentives can eventually internalize boundaries rather than use explicit rules and regulations. Which of the following is not a technique for moving in that direction? Hire people who identify with the dominant values of the organization. Minimize training and indoctrination. Align reward systems with organizational goals and objectives. Develop managerial role models.
Minimize training and indoctrination.
________ are fees that a multinational receives from a foreign licensee in return for its use of intellectual property (trademark, patent, trade secret, technology). Dividends Royalties Intra-corporate inflows Transfer prices
Royalties
Which of the below best describes the competitive tendencies of small firms? Small firms are more nimble and cannot respond quickly to competitive attacks. Small firms are more nimble and can respond quickly to competitive attacks. Small firms typically have more resources available as they undertake competitive attacks than do large firms. Small firms tend to signal their competitive actions long before they launch those actions because they lack legitimacy in the marketplace.
Small firms are more nimble and can respond quickly to competitive attacks.
________ provide(s) a key avenue for growth for many young and small firms through partnering to obtain resources and to expand into new markets. Banking Strategic alliances Research and development Funding
Strategic alliances
________ are obstacles in which the design of organization structure, information processing, and reporting relationships, impede the proper flow and evaluation of information. Behavioral barriers Political barriers Systemic barriers Barriers to entry
Systemic barriers
The Lending Club removed CEO Renaud Laplanche in 2016. Hans Morris, the company executive chairman, lauded him, saying his entrepreneurial spirit was critical to the success of the firm. But he also signaled the board was removing Mr. Laplanche because he had failed to build a strong control system and culture, stating that as a public company that provides a financial service, Lending Club must meet the industry high standards of transparency and disclosure. This kind of dismissal signals what message to the public? The board of directors is active and engaged. Mr. Laplanche was dishonest. Mr. Laplanche was not a creative entrepreneur. The board of directors needed a scapegoat to cover up their ineffectiveness.
The board of directors is active and engaged.
According to the textbook, which of the following is not a common new entry strategy? adaptive new entry proactive new entry pioneering new entry imitative new entry
proactive new entry
The traditional approach to strategic control is sequential. Which of the following is not one of the steps in the sequence? Performance is measured against the predetermined goal. Strategies are formulated and top management sets goals. Strategies are implemented. Action plans are submitted by lower level managers.
Action plans are submitted by lower level managers.
________ are private individuals who provide seed capital to young ventures. Gazelles Cash cows Rising stars Angels
Angels
________ are obstacles associated with a managerial tendency to look at issues from a biased or limited perspective. Barriers to exit Behavioral barriers Systemic barriers Political barriers
Behavioral barriers
In choosing sides concerning CEO duality, two schools of thought exist. Which of the following would not be a consideration for the Unity of Command school of thought? CEO duality creates unity across the board of directors and managers of a company. CEO duality provides smoother strategic decision making. One person holding both roles will be able to act more efficiently and effectively. CEO duality slows down decision making.
CEO duality slows down decision making.
________ is the intense rivalry involving actions and responses among similar competitors vying for the same customers in a marketplace. The threat of substitutes Pioneering new entry Resource similarity Competitive dynamics
Competitive dynamics
Shareholders rely on CEOs to adopt policies and strategies that maximize the value of their shares. To motivate CEOs to maximize the value of their companies, boards of directors can consider all the following options except one. Which one is it? Salaries can be structured to provide penalties for poor performance. Boards can require that the CEOs become substantial owners of company stock. Salaries, bonuses, and stock options can be structures to provide rewards for superior performance. Dismissal for poor performance is not an option.
Dismissal for poor performance is not an option.
Which of the following is not a motivation for a company to pursue international expansion? It wishes to optimize value-chain activities to enhance performance, reduce costs, and reduce risk. It wishes to increase the size of the potential markets for its products and services. It wishes to take advantage of arbitrage opportunities to increase profit. It wishes to increase foreign market penetration by developing products for the home market.
It wishes to increase foreign market penetration by developing products for the home market.
________ occurs when a firm decides to utilize other firms to perform value-creating activities that were previously performed in-house. A transnational strategy A global strategy Outsourcing Offshoring
Outsourcing
Which of the following is not a benefit of outsider dominance on boards of directors? There is broader access to knowledge and resources in the broader business community. There is less information that the board receives about the operations of the firm because it is filtered through the CEO. There is a larger number of candidates for outsider-only board committees. There is independent oversight of the CEO, as well as the strategy of the firm.
There is less information that the board receives about the operations of the firm because it is filtered through the CEO.
________ are groups of countries that agree to increase trade among them by lowering trade barriers. Exchange partners Trading blocs Black zones Open zones
Trading blocs
In order to minimize the temptation for managers to act in their own self-interest, governance mechanisms exist for implementation consideration. Which of the following is not a primary means for monitoring managerial behavior? a board of directors that acts in the best interests of shareholders to create long-term value managerial incentives to align management interests with those of the stockholders shareholder activism in which owners view themselves as shareowners a board of directors that acts in the best interests of shareholders to create short-term value
a board of directors that acts in the best interests of shareholders to create short-term value
Which of the following is an advantage of a divisional type of organizational structure? high degree of emphasis on long-term performance uniformity in image and quality across divisions an enhanced ability to respond quickly to changes in the external environment efficient use of managerial and technical talent
an enhanced ability to respond quickly to changes in the external environment
Which of the following social skills do many executives find challenging to acquire? having empathy for subordinates being a good motivator being a good listener having a large network in place
being a good listener
Houston-based Baylor College of Medicine has a ________ that instructs all employees to follow the Baylor Mission Statement, Compliance Program and Conflict of Interest policy. corporate motto code of ethics corporate reward system of evaluation
code of ethics
External governance control mechanisms include all the following except media. competitors. analysts. auditors.
competitors
In principal-principal conflicts (conflicts between controlling shareholders and minority shareholders), the ownership (of equity) is concentrated. controlled almost completely by management. widely dispersed. often held by employee stock ownership programs.
concentrated
Statistics indicate that over half of the world's output now comes from emerging markets. This is leading to a(n) ________ of living standards across the globe and is changing the face of business. contraction divergence expansion convergence
convergence
As long as the benefits of ________ are enjoyed by all participants in a co-opetition system, the practice can aid companies in avoiding intense and damaging competition. alliance cooperating competition forbearance
cooperating
Which of the following is not a guideline an organization can use to promote the challenging of the status quo? forcefully creating a sense of urgency establishing a culture of dissent fostering a culture that encourages risk taking creating a results-based reward system
creating a results-based reward system
For years O.R.T. Technologies resisted moving any operations outside Israel. However, when faced with a sharp rise in the value of the shekel, the maker of specialized software for managing gas stations froze all local hiring and decided to transfer some developmental work to Eastern Europe. This is an example of ________ risk. management currency political economic
currency
Walmart began offering low-priced extended warranties on home electronics after learning that its rivals such as Best Buy derived most of their profits from extended warranties. According to the Stalk and Lachenauer book, this is an example of the strategy to unleash massive and overwhelming force. deceive the competition. devastate rivals' profit sanctuaries. plagiarize with pride.
devastate rivals' profit sanctuaries.
Shakespeare & Co. was reimagined in 2015 to meet the current needs of the market when Dan Neller purchased the NY bookstore. He provided a place to find the hottest books, the ability to print more obscure titles, and a rare level of service that made the store feel like a destination. He used which generic strategy to achieve competitive advantages? overall cost leadership low cost leadership focus differentiation
differentiation
The sale of Boeing commercial aircrafts and Microsoft operating systems in many countries enables these companies to benefit from higher prices in their domestic markets. economies of scale. reducing their exposure to currency risks. optimizing the location for many activities in their value chain.
economies of scale.
When an organization with a simple structure increases its sales revenue and volume of outputs, it is most likely to develop a ________ structure. geographic product-market functional divisional
functional
Which of the following is not a common source of new business opportunities? current or past work experiences chance event suggestions by family or friends future work
future work
Virtual organizations ________ whereas modular organizations ________. are usually permanent; are usually temporary accept interdependent destinies; pursue collective strategies give up part of their strategic control; retain full strategic control pursue collective strategies; forfeit strategic control
give up part of their strategic control; retain full strategic control
TJ Parker went through the process of opportunity recognition when he developed PillPack. This means he ________, ________, and ________ the potential opportunity that arose from customers finding it difficult to keep to their medication schedule. selected; improved; altered answered; analysed; rejected identified; selected; developed chose; altered; discounted
identified; selected; developed
What advantages does outsourcing not provide an organization? improved buyer positioning accessing best in class goods and services enabling rapid expansion with relatively low capital investment focusing scarce resources on core competencies
improved buyer positioning
In trying to assure that managerial actions lead to shareholder value maximization, a risk can come about if the market value of a firm becomes less than its book value. The risk is the firm will be delisted by the stock exchange. the Securities and Exchange Commission will not allow it to declare dividends until the market value exceeds the book value. the firm will be unable to service its debt. it becomes an attractive takeover target.
it becomes an attractive takeover target.
Expert power is derived from: leader capability and knowledge in a particular field. manager access, control, and distribution of information that is not freely available to everyone in an organization. referent power. organizationally conferred decision-making authority.
leader capability and knowledge in a particular field.
In organizations, ethical behavior must start with the ________ before the ________ can be expected to perform accordingly. leader; employees leader; shareholders shareholders; leader employees; shareholders
leader; employees
According to the textbook, globalization involves international exchange. Included in this exchange is trade in goods and services as well as the exchange of ________, ________, and ________ across countries. traditions; legal systems; history statistics; personnel; purchasing power money; ideas; information habits; values; ideas
money; ideas; information
According to Michael Porter, firms that have experienced intense domestic competition are most likely to design strategies aimed primarily at the domestic market. more likely to design strategies that will allow them to successfully compete abroad. more likely to demand protection from their governments. unlikely to have the time or resources to compete abroad.
more likely to design strategies that will allow them to successfully compete abroad.
If a board of directors is to be effective, it needs to allocate its scarce time to the _______ issues to which its members can add _______. hardest; time most critical; value most clear; capital newest; information
most critical; value
Coca-Cola launched more local flavors in its international markets. This is an example of a/an ________ strategy. global multidomestic integrated consumer
multidomestic
High pressure for local adaptation combined with low pressure for lower costs would suggest what type of international strategy? overall cost leadership strategy global strategy multidomestic strategy transnational strategy
multidomestic strategy
As illustrated in the opening case for Chapter 10, Boeing lost a lot of control and, therefore, incurred high operating costs for its build out of the 787 Dreamliner because it ________ design and manufacturing. internationalized outsourced on-shored internalized
outsourced
A highly ethical organization must have all the following elements except corporate credos. role models. payment plans. codes of conduct.
payment plans.
One of the disadvantages of divisional structure design is that they divide ________, ________, and knowledge. They insulate divisional managers from other divisional managers thus inhibiting their ability to coordinate activities, share resources, and learn from each other. land, buildings people, resources assets, structures people, buildings
people, resources
Successful organizations create ________ boundaries among the ________ activities as well as between the organization and its external customers, suppliers, and alliance partners. impermeable; external permeable; internal permeable; external impermeable; internal
permeable; internal
Carefully developed ________ and ________ guide behavior so that all employees will be encouraged to behave in ________ manner. corporate credos; codes of conduct; an unethical policies; procedures; an ethical codes of conduct; role models; a legal role models; standards; a stagnant
policies; procedures; an ethical
Renault paid 1 billion USD to acquire a 25 percent ownership stake in the Russian automaker AvtoVAZ in 2008. Just one year later, Russian Prime Minister Vladimir Putin threatened to dilute the Renault ownership stake unless it contributed more money to prop up AvtoVAZ, which was then experiencing a significant slide in sales. This is an example of ________ risk. economic political management currency
political
When a company chooses to maintain low-price dominance, it is using which tactical action? price cutting product and service enhancements changing production capacity increased marketing efforts
price cutting
In large organizations, a strategy of diversification requires a need to reorganize around ________ or ________. competitor lines; geographic markets distribution lines; competitor markets product lines; geographic markets product lines; competition
product lines; geographic markets
Strategic business unit (SBU) structures are best suited for corporations pursuing ________, whereas holding company structures are best suited for companies with ________ strategies. product-market diversification; international related diversification; unrelated diversification international diversification; product-market unrelated diversification; related diversification
related diversification; unrelated diversification
Telecommunication equipment providers, Huawei and Nokia, have a high degree of ________ because they have patent rights to similar technologies, high-quality engineering staffs, and global sales forces. dynamic capabilities resource similarity market commonality equity funding
resource similarity
SC Johnson makes Windex, Ziploc bags, Glade Air Fresheners, and Saran Wrap. It decided to remove chlorine as an ingredient in Saran Wrap which reduced the effectiveness of the product to cling to containers. Which of the following does not exemplify Johnson's goal? maintaining a strong ethical culture developing an ethical organization culture being environmentally responsible respecting the financial position of the company only
respecting the financial position of the company only
Community hospitals in Mississippi can video conference with the specialists at the University of Mississippi Medical Center thus lowering health care delivery costs and increasing the quality of medical care. This system mirrors that of the Indian health care delivery system for reaching rural areas. This is an example of reverse innovation. arbitrage. vertical innovation. forward innovation.
reverse innovation.
Which of the following approaches to behavioral strategic control would be the least appropriate for an organization in which there is a great need for innovation and a high degree of autonomy? culture rules incentives rewards
rules
CEO duality refers to a situation in which the CEO is responsible for acting as CEO and serving on the compensation committee. formulates and implements strategies. serves as both the CEO and the chair of the board of directors. is responsible for acting as CEO and Chief Operating Officer (COO).
serves as both the CEO and the chair of the board of directors.
