Exam 1

High levels of competition may be caused by: A. Rapid industry growth B. Low fixed costs C. A small number of competitors D. A lack of product differentiation E. Low exit barriers

D. A lack of product differentiation

Corporate strategy formulation deals primarily with: A. How firms compete in the business areas they have selected B. High level financial analysis C. The details of how the functional areas should work together to achieve the mission and goals of an organization D. The selection of business areas in which the firm will compete E. All of the above

D. The selection of business areas in which the firm will compete

Which of the following is not included as a major force in Michael Porter's Five Forces Model of industry competition? A. Existing competitors B. Suppliers C. Potential competitors D. Unions E. Indirect competitors

D. Unions

In a SWOT analysis, an organizational weakness can be: A. Something an organization does not do well B. An important resource that an organization does not possess C. Either deliberate or emergent D. A sustainable competitive advantage E. A and B are both correct

E. A and B are both correct

A resource or capability that has led to sustainable competitive advantage for a firm has the following characteristic(s): A. It is hard to imitate B. Managers are aware of and taking advantage of the potential of the resource or capability C. It is unique D. It is valuable E. All of the above

E. All of the above

According to Michael Porter, conditions that create advantages for firms in certain countries and industries include: A. Suppliers to a particular industry are the very best in the world B. Strong industry competition C. Buyers are among the most demanding in the world D. Ability to attract the most talented managers E. All of the above

E. All of the above

Strategic direction is reflected by: A. The organization's purpose B. A definition of the organization's business or businesses C. The organization's vision D. The organizational mission E. All of the above

E. All of the above

Strategic Management includes the following: A. Establishment of strategic direction B. Implementation of strategies C. Analysis of the internal environment D. Strategic restructuring E. All of these are true

E. All of these are true

With regards to the value chain, an organization can develop a competitive advantage: A. In any of the primary or support activities B. In the way primary and support activities are combined C. In the way internal activities are linked to the external environment D. Through activities that create value for the customer E. All of these are ways to develop a competitive advantage

E. All of these are ways to develop a competitive advantage

Among the most critical economic factors to monitor are: A. Interest rates B. Economic growth C. Foreign trade balances D. Inflation rates E. All of these factors are important

E. All of these factors are important

Which of the following is not a stakeholder of an organization? A. Employees B. Stockholders C. Customers D. Competitors E. These are all stakeholders. None of the above answers is correct.

E. These are all stakeholders. None of the above answers is correct.

Which of the following is not an element of stakeholder analysis? A. Identifying stakeholders B. Financially motivating stakeholders C. Prioritizing stakeholders D. Assessing stakeholder needs and collecting ideas from stakeholders E. Integrating knowledge about stakeholders into the strategic management process

B. Financially motivating stakeholders

Enterprise strategy: A. Emphasizes stockholder desires B. Is the organization's best possible reason for the actions it takes C. Links short term and long term goals D. Emphasizes social responsiveness over other possible goals E. None of the above

B. Is the organization's best possible reason for the actions it takes

All of the following are members of an organization's task environment except: A. Activist Groups B. Managers C. Suppliers D. Financial Intermediaries E. Local Communities

B. Managers

Primary activities of the value chain include all of the following except: A. Inbound logistics B. Procurement C. Marketing and sales D. Service E. Operations

B. Procurement

Corporate level decisions are typically made by: A. Low-level employees B. The CEO and/or board of directors C. Functional managers D. Department heads E. Stockholders

B. The CEO and/or board of directors

Which of the following is most likely to be a source of sustainable competitive advantage? A. A state-of-the art machine that a firm purchases from a supplier B. A new product C. A research and development process D. A unique plant design E. A new service

C. A research and development process

Which group of stakeholders has, as its primary function, protecting the interests of the stockholders? A. Managers B. Employees C. Board of directors D. Unions E. Customers

C. Board of directors

The broad environment consists of all of the following except: A. Technological trends B. Political and legal forces C. Competitors D. Economic forces E. Sociocultural forces

C. Competitors

A business definition should contain answers to all of the following questions except: A. When should customer needs be satisfied? B. What is being satisfied? C. How are customer needs satisfied? D. Who is being satisfied? E. What are our products and services?

C. How are customer needs satisfied?

Which of the following may lead a firm to conclude that an industry is attractive to enter? A. Strong supplier power B. Strong customer power C. No close substitutes D. Many strong competitors E. Low sales growth

C. No close substitutes

Ethical dilemmas: A. Are, by definition, completely unrelated to legal issues B. Only occur in companies that lack codes of ethics C. Occur when the values of different stakeholder of the organization are in conflict over a particular issue D. Are rare E. None of the above

C. Occur when the values of different stakeholder of the organization are in conflict over a particular issue

Which of the following is not a major component of social responsibility? A. Economic responsibilities B. Legal responsibilities C. Political obligations D. Moral obligations E. Discretionary responsibilities

C. Political obligations

The view of top management concerning what an organization can become is the organization's: A. Business definition B. Mission C. Vision D. Ethical dilemma E. Enterprise strategy

C. Vision

Which ratio measures a firm's liquidity? A. Debt-to-equity B. Current C. Return-on-assets D. Asset turnover E. None of these

B. Current

A mission statement often contains: A. An organization's vision B. An organization's strengths and weaknesses C. An organization's functional level strategies D. An organization's top management team membership E. All of the above

A. An organization's vision

Analysis of society is important for all of the following reasons except A. Awareness of what is happening in society virtually guarantees that an organization will be able to successfully compete in its own industry B. Most of the other stakeholder groups are also members of society C. Awareness of and compliance with the attitudes of society can help an organization avoid problems associated with being a bad corporate citizen D. Changes in society can provide opportunities for organizations E. Correct assessment of social trends can help businesses avoid restrictive legislation

A. Awareness of what is happening in society virtually guarantees that an organization will be able to successfully compete in its own industry

Which ratio measures a firm's leverage? A. Debt-to-equity B. Current C. Return-on-assets D. Asset turnover E. None of these

A. Debt-to-equity

Structural inertia is stronger: A. In a firm that has been successful over a long period of time B. In a firm with flexible systems and processes C. In a firm with a weak culture D. In a firm that has had low performance over a long period of time E. When the economy is weak

A. In a firm that has been successful over a long period of time

Suppliers tend to exhibit greater power if: A. There are few suppliers of the raw material, product, or service B. There are many substitutes for the product or service that suppliers sell C. Suppliers are small businesses with regards to total sales volume D. The suppliers' products are undifferentiated and plentiful E. Suppliers cannot integrate forward

A. There are few suppliers of the raw material, product, or service