Exam Management Process Exam 1

A(n)_______is a resource that is impossible or extremely costly or difficult for other firms to duplicate. a. rare b. imperfectly imitable c. nonsubstitutable d. strategically dissonant e. reliable

b

Which of the following is NOT one of the components of creative work environments? a. challenging work b. group compensation c. freedom d. supervisory encouragement e. organizational encouragement

b

Cost leadership, differentiation, and focus are the three types of strategies discussed in the text. a. grand b. niche c. positioning d. restructuring e. portfolio

c

Organizational development______. a. requires a steering committee b. takes a short-term approach to change c. is a philosophy and collection of planned change interventions d. assumes that top management support is not necessary for change e. is accurately described by all of these

c

Which of the following is NOT one of the basic methods for managing resistance to change? a. education and communication b. participation c. change simulation d. negotiation e. coercion

c

The______strategy is analogous to pruning flowers. a. growth b. stability c. retrenchment/recovery d. portfolio e. repositioning

c Retrenchment is aimed at scaling back to a healthy base from which the company can grow.

The Japanese government continues to use the high tariffs to make sure local farmers can earn a living. The tariff on rice is an example of_______. a. a voluntary government restriction b. geocentrism c. protectionism d. a security quota e. a bureaucratic subsidy

c The aim of the Japanese policy is to shield domestic competitors from foreign competition, an aim consistent with protectionism.

An organization is experiencing when there is a discrepancy between upper management's intended strategy and the strategy actually implemented by the lower levels of management. a. horizontal conflict b. character of the rivalry c. strategic dissonance d. competitive inertia e. an organizational roadblock

c This is the definition of strategic dissonance.

The is a portfolio strategy that managers use to categorize their corporation's businesses by growth rate and relative market share. This strategy helps them to decide how to invest corporate funds. a. investment matrix b. SWOT matrix c. BCG matrix d. portfolio management matrix e. Maslow grid

c This is the definition of the BCG matrix.

According to the text, valuable, rare, imperfectly imitable resources can produce sustainable competitive advantage only if they are resources. a. nonsubstitutable b. substitutable c. reliable d. expensive e. imitable

a For a firm's resources to provide sustainable competitive advantage they must be rare, imperfectly imitable, and nonsubstitutable.

A(n)_______resource is a resource that is not controlled or possessed by many competing firms. a. rare b. imperfectly imitable c. nonsubstitutable d. strategically dissonant e. permanent

a

.______is the knowledge, tools, and techniques used to transform inputs into outputs. a. Resource manipulation b. Procedural innovation c. A transformation system d. Technology e. Creativity

d

In a situational analysis, a strategic group is a group of that top managers choose for comparing, evaluating, and benchmarking their company's strategic threats and opportunities. a. non-industry specific companies b. expert managers c. trade journals and other relevant periodicals d. other firms within an industry e. consulting firms that use the Delphi technique

d

The Green Giant consumer products company learned that it could not use their Jolly Green Giant character in parts of Asia where a green hat worn by a man signifies that he has an unfaithful wife. This is an example of a(n)_______that influenced global marketing. a. geocentric attitude b. control strategy c. cooperative strategy d. cultural difference e. avoidance strategy

d

The positioning strategies identified by Michael Porter are____. a. entrepreneurial, growth, and stability b. diversification, acquisition, and divestment c. defender strategy; diversification, and cost leadership d. focus, cost leadership, and differentiation e. divestment; cost leadership, and diversification

d

The purpose of pre-departure language and cross-cultural training is to______. a. cater to employees who require affective learning b. increase job empathy c. encourage job specialization d. reduce the uncertainty for those becoming expatriates e. avoid legal problems in the future

d

There are eight general steps for organizational development intervention. The first step is_____. a. pioneering b. inception c. introduction d. entry e. startup

d

Which of the following methods for managing resistance to change should only be used as a last resort or under crisis conditions? a. mentoring b. arbitration c. negotiation d. coercion e. reinforcement modification

d

A _______is a nontax method of increasing the cost or reducing the volume of imported goods. a. tariff b. nontariff barrier c. trade roadblock d. risk-aversive boycott e. subsidy quota

b

An expatriate is someone who_______. a. claims dual citizenship b. lives and works outside of his or her own country c. believes strongly in nationalization d. is unhappy with his or her present residence e. desires to be employed in a country outside of his or her own

b

._______is the measure of the intensity of competitive behavior between companies in an industry. a. Character of culture b. Competitive barrier c. Character of the rivalry d. Benchmarked rivalries e. Product substitutability

c

A news article on Latin America read, "Mexico is the closest Latin America gets to the U.S. both geographically and culturally." According to Hofstede, this means the Mexican culture_______. a. does not support individualism b. is strong in power distance c. has a masculine orientation d. is not oriented towards individualism e. is accurately described by all of these

c

According to John Kotter, which of the following actions will adversely influence refreezing efforts? a. the absence of a vision b. not removing obstacles to the company's new vision c. not creating a powerful enough guiding coalition d. declaring victory too soon e. all of these

d

In a multinational firm, managers at company headquarters typically prefer an emphasis on simplifies decisions. a. local consistency b. local adaptation c. global adaptation d. global consistency e. domestic adaptation

d

An organization which is a_____in terms of its adaptive strategy would NOT follow a consistent strategy. a. defender b. pioneer c. analyzer d. reactor e. prospector

d By definition, reactors base their strategy upon the changes that occur in their external environment. Pioneering is not an adaptive strategy discussed in the text.

An industry-level strategy that is best suited to changes in the organization's external environment is a(n)______. a. positioning b. differentiation c. growth d. adaptive e. diversification

d

An organization is experiencing been successful in the past. a. strategic dissonance b. strategic inertia c. competitive dissonance d. competitive inertia e. sustained competitive disarray when it is reluctant to change strategies or competitive practices that have

d

A_______is a strategic alliance in which two existing companies collaborate to form a third, independent company. a. joint venture b. Franchise c. wholly owned affiliate d. global new venture e. cooperative contract

a

The first step in the compression approach to innovation is______. a. overlapping of the individual steps b. planning c. supplier involvement d. granting autonomy e. creating multifunctional teams

b

Significant cost reductions, layoffs of employees, closing of poorly performing stores, offices, or manufacturing plants, or closing or selling entire lines of products or services would be characteristic of a______strategy. a. portfolio b. retrenchment c. stability d. firm-level e. grand

b All of these actions are associated with shrinking the size or scope of a business.

As Malta got ready for its admittance into the European Union (EU), the EU removed all taxes on the importation of goods manufactured in Malta. In other words, the EU abolished_____for Malta-manufactured merchandise. a. import quotas b. customs classifications c. import standards d. tariffs e. boycotts

d Tariffs are defined as a direct tax on imported goods.

Several Arab countries boycott Coca-Cola products because the soft-drink company maintains product distributors in Israel. This boycott is an example of______. a. geocentrism b. nationalism c. nationalization d. a trade barrier e. acculturation

d Trade barriers are defined as government imposed regulations that increase the cost and restrict the number of imported goods.

An innovation stream moves from one technology cycle to another through the process of______. a. technological substitution b. dominant design c. incremental environmental change d. organizational synergy e. transition management

a

Companies need to excel at managing________in order to successfully manage innovation streams. a. the sources of innovation b. innovation during synergistic change c. reciprocity d. environmental design issues e. behavioral formality

a

New companies with sales, employees, and financing in different countries that are found with an active global strategy are called________. a. global new ventures b. strategic alliances c. wholly owned affiliates d. franchisees e. subsidized corporations

a

The first step in the strategy-making process is to______. a. assess the need for strategic change b. conduct a situation analysis c. choose strategic alternatives d. evaluate the impact of changes on the internal environment e. create a strategic budget

a

When resistance to change is based on insufficient, incorrect, or misleading information, managers should use as an approach to manage resistance. a. education and communication b. participation c. negotiation d. coercion e. change manipulation

a

Which of the following is one of the sources of resistance to change? a. self-interest b. multifunctional teams c. a dynamic organizational culture d. discontinuous innovation e. sustainable status quo

a

_____are the targets that managers use to measure whether their firm has developed the core competencies that it needs to achieve a sustainable competitive advantage. a. Strategic reference points b. Strategic focus points c. Differentiation targets d. Imperfectly imitable resources e. Strategic monitors

a

A cosmetics company that is considering entering the South American market would be especially interested in the discretionary income within that region. In other words, which of the following would be a determining factor in its global strategy? a. purchasing power b. political uncertainty c. expropriation potential d. infrastructure e. sociocultural trends

a Purchasing power is defined as a comparison of the relative cost of a standard set of goods and services in different countries. Discretionary income is that portion of purchasing power above and beyond income required to meet basic living expenses (i.e., spending money).

The signing of the______created a regional trading zone in Europe. a. Maastricht Treaty b. Pact for Free Trade Agreement c. Global Agreement for Transactional Trading (GATT) d. South-East Asia Pact e. all of these

a The Maastricht Treaty established the European Union (EU) trading zone.

The use of milestones in the experiential approach to innovation_______. a. serves to eliminate manufacturing bottlenecks b. shortens the innovation process c. creates incrementally sustainable advantages d. virtually eliminates problems associated with the control function of management e. does all of these

b

Deutsche Bank is the largest bank in the world. Would this give it a sustainable competitive advantage? a. yes, because it would make its operations synergistic b. no, because size is not a criteria for sustainable competitive advantage c. no, because large institutions make more effective use of resources d. no, because large organizations are always targeted for anti-trust activities e. yes, because size is directly and positively related to efficiency

b Competitive advantage is defined as providing greater value for customers than competitors can. There is no evidence of a direct correlation between a company's size and the value it provides to its customers.

Which of the following must be met if a firm's resources are to be used to achieve a sustainable competitive advantage? a. differentiation b. imperfectly imitable resources c. related diversification d. unrelated diversification e. a matrix organizational structure

b Resources that are difficult to imitate are critical to sustaining a competitive advantage.

Protectionism is the use of trade barriers to protect local companies and their workers from_______. a. international unions b. foreign competition c. trademark infringements d. patent violations e. all of these

b This is the definition of protectionism.

Unverferth Manufacturing makes agricultural equipment. It used finite element analysis (FEA) software to speed up the design cycle for its 12-row sub-soiler. Which aspect of the compression approach to innovation would the use of this software apply? a. planning b. supplier involvement c. shortening the time of individual steps d. multifunctional teams e. functional isolation

c

Among companies who use the adaptive strategies,______blend the strategies used by______. a. prospectors; analyzers and reactors b. analyzers; defenders and reactors c. reactors; prospectors and analyzers d. reactors; defenders and prospectors e. analyzers; defenders and prospectors

e

Companies that are following a strategy would be most likely to try to improve the way in which they sell the same goods or services to the same customers. a. growth b. pioneering c. retrenchment/recovery d. portfolio e. stability

e A stability strategy is defined as focusing on improving the way in which the company sells the same products or services to the same customers.

A country or region that has an attractive business climate for companies that want to go global has_____. a. a large population of unskilled workers b. an effective but cost-efficient place to build an office or manufacturing site c. a small youth population d. natural boundaries e. all of these

b Three attributes that contribute to an attractive business climate are identified as: (1) easy access to growing markets; (2) cost-efficient location; and (3) lower level of political risk.

Specialized Bicycle Components, Inc. introduced the first major production mountain bike in 1980. Since then, the company has maintained a technological leadership in the production of bike and bike accessories and an organizational culture that encourages innovation. Technological leadership, as well as its organizational culture, are the company's_____. a. customer sustainabilities b. organizational advantages c. relative competencies d. core capabilities e. superlative advantages

d Core capabilities are defined as the internal decision-making routines, problem-solving processes, and organizational cultures that determine how efficiently inputs can be turned into outputs.

Under conditions of advantage. ______, a competitive attack by the stronger rival is more likely to produce sustained competitive a. high market commonality b. high competitive autonomy c. high resource similarity d. low resource similarity e. low market commonality

d Direct competitors would be least able to effectively counter the attack of a stronger rival when they are at a resource disadvantage (low resource similarity + weaker company).

Specialized Bicycle Components, Inc. introduced the first major production mountain bike in 1980. Two-thirds of its profits come from the sale of mountain bikes. It is recognized worldwide for its ability to design and produce superior mountain bikes. This ability is its______. a. customer sustainability b. organizational advantage c. relative competence d. distinctive competence e. superlative advantage

d Distinctive competencies are defined as what a company can make, do, or perform better than its competitors. Here, Specialized is able to design and produce bikes in a markedly better way than rivals.

Which of the following is an example of a common approach to corporate-level strategy? a. positioning strategies b. adaptive strategies c. ROI strategies d. grand strategies e. none of these

d Portfolio strategy and grand strategy are the two common approaches to corporate-level strategy.

.______is the phase of a technology cycle characterized by technological substitution and design competition. a. Technological adaptation b. The era of dominant design c. The technological growth stage d. Change substitution e. Discontinuous change

e

NTL is the largest cable company in the United Kingdom. The company has recently declared bankruptcy and needs to engage in restructuring in order to give it more flexibility and allow it to raise capital. Since it has identified the need for strategic change, what would be the organization's next step in this strategy-making process? a. finding the optimal strategic solution b. brainstorming c. conducting focus groups d. assessing the need for strategic change e. conducting a situation analysis

e

Which of the following is NOT a part of the experiential approach to innovation? a. hands-on experience to reduce uncertainty b. testing c. multifunctional teams d. design iterations e. initiative conversations

e

Which of the following is an organizational impediment to creativity in a work environment? a. internal conflict b. rigid management structures c. bias toward the status quo (i.e., a conservative environment) d. power struggles e. all of these

e

In Canada, two automobile companies have entered into a______to create CAMI Automotive. One firm's management runs the plant, which makes the other's cars. The agreement gives one access to the other's dealers to sell its brand of vehicles. a. licensing agreement b. subsidiary arrangement c. cooperative contract d. exporting agency e. joint venture

e A joint venture involves two existing firms pooling resources to launch and support a third independent venture.

The General Electric workout is a special kind of_______. a. activity-oriented change b. results-driven change c. generational change d. vision-driven change e. resources-driven change

b

According to Hofstede, when people in a culture are oriented to the present and seek immediate gratification, that culture is described as_______. a. having a long-term orientation b. masculine c. having a short-term orientation d. individualistic e. feminine

c

Backward compatibility is an important consideration for software users who are using an accounting program to facilitate their tax preparation and who want to use a newer version that has greater capacity. Therefore, many software manufacturers engage in_____. a. coercive change b. dominant design manipulation c. generational change d. intuitive change e. incremental modification

c

The two major approaches to corporate-level strategy are______. a. portfolio strategies and secondary strategies b. grand strategies and temporal strategies c. grand strategies and the portfolio strategy d. the Boston matrix strategy and the Maslow strategy e. major strategies and minor strategies

c

Which of the following organizations are most directly in competition with each other? a. Kmart and Gap b. a local flower shop and a grocery store that sells flowers c. FedEx and UPS d. an independent bookstore and a library e. HBO and UPN television network

c FedEx and UPS have a very high degree of market commonality and resource similarity.

Aveda is a manufacturer and marketer of cosmetics, perfumes, hair-care, and skin-care products. To differentiate its products from other similar brands, Aveda focuses on educating its customers on general skin and hair care. Its salespeople are trained to answer questions and help customers find solutions. Aveda has used customer education and employee training to_______. a. create synergy through relationship marketing b. prevent product duplication c. make efficient use of imitative resources d. eliminate the need for nonsubstitutable resources e. create a competitive advantage

e

Downsizing has thinned the ranks of hospital personnel. Hospital employees were adamantly resisting any more change. What method could hospital administrators use to manage this resistance? a. educate employees about the need for change b. let the employees participate in implementing the change process c. provide significant managerial support d. let employees discuss and agree on who will do what after change occurs e. any or all of these

e

Which of the following statements about the strategic reference point theory is true? a. The theory does not consider risk factors. b. The theory is deterministic. c. The theory may lead to bureaucratic management. d. This theory recommends that managers do not change strategic reference points. e. None of these statements about the Strategic Reference Point Theory is true.

e A strategic reference point is defined as the strategic targets that managers use to measure whether a firm has developed the core competencies it needs to achieve a sustainable competitive advantage. None of these statements are accurate regarding strategic reference points.

Starbucks, the operator of Starbucks coffeehouses, also markets a line of compilation CDs and other non-coffee items. The making and marketing of the CDs and other non-coffee products would be an example of________. a. related differentiation b. related diversification c. an integrated acquisition d. competency acquisition e. unrelated diversification

e Coffee and music are completely unrelated businesses.

While_______are tangible,______are not. a. core capabilities; distinctive competencies b. competitive advantages; differential advantages c. strengths and weaknesses; opportunities and threats d. opportunities and threats; strengths and weaknesses e. distinctive competencies; core capabilities

e Core capabilities are defined as the internal decision-making routines, problem-solving processes, and organizational cultures that determine how efficiently inputs can be turned into outputs. Processes, routines, and cultures are intangible.

In 2000, the United States imposed a tax on all steel imports in an effort to protect about 5,000 jobs. This tax is an example of a(n)_______. a. import duty b. voluntary import restraint c. subsidy d. financial boycott e. tariff

e Tariffs are defined as a direct tax on imported goods.

Which of the following statements about portfolio strategy is true? a. The evidence supports the usefulness of acquiring unrelated businesses. b. Dysfunctional consequences can occur when companies are categorized. c. The strategy may weaken the strongest performer in the corporate portfolio, the problem child. d. Labeling a top performer as a cash cow will strengthen employee morale. e. Maslow's hierarchy can be used to determine the level of motivation needed to acquire and make a success of portfolio strategy.

b Categorizing businesses can prove dysfunctional because doing so relies on past performance and tends to weaken cash cows. Research evidence does not support the usefulness of acquiring unrelated diversification. Employees in a company labeled a cash cow are likely to feel that the firm is "milking" (rather than growing) their business. The Maslow item is a red herring.

When Coca-Cola acquired a water-treatment and bottling plant so it could produce and market Dasani brand bottled water, it was an example of______. a. a repositioning strategy b. external growth c. niche marketing d. a retrenchment strategy e. internal growth

b Coca-Cola is growing through acquisition of other companies.

A(n)_____strategy is a corporate strategy that addresses the question "How should we compete in this industry?" a. corporate-level b. industry-level c. firm-level d. niche-specific e. SBU-level

b This is the definition of industry-level strategy.

Clorox Corporation controls 60 percent of the bleach market. Imagine you are an entrepreneur who was considering developing and marketing a new brand of bleach. Which of Michael Porter's industry forces should you be most concerned about? a. bargaining power of buyers b. threat of substitute products or services c. threat of new entrants d. bargaining power of suppliers e. character of the rivalry

e New entrants in mature industries often face stiff rivalry from established companies.

The primary disadvantage of using wholly owned affiliates as the means of entering a foreign market is______. a. dumping b. countertrading c. nontariff barriers d. acculturation e. costs

e The wholly owned affiliate is typically the most expensive form of global market entry.

______is used to assess how well managers and their families are likely to adjust to foreign cultures. a. cultural awareness screening b. sociocultural analysis c. sensitivity screening d. sociocultural diagnostics e. adaptability screening

e This is the definition of adaptability screening.

A ______, also called a SWOT analysis for strengths, weaknesses, opportunities, and threats, is an assessment of the strengths and weaknesses in an organization's internal environment and the opportunities and threats in its external environment. a. market audit b. firm-level strategy c. competitive advantage d. differentiation analysis e. situational analysis

e This is the definition of situational (SWOT) analysis.

Top-Flite manufactures Strata golf balls and prices these balls at about three times what ordinary golf balls cost. The Strata ball sells exceptionally well because customers perceive its patented three-layer construction to improve handling and increase distance. The patent on these golf balls gives Top-Flite a(n)_______. a. sustainable competitive advantage b. aggregate marketing strategy c. reliable differentiation d. strategic stance e. differential stance

a The Strata product is difficult to imitate, valuable, rare, and without substitutes.

A _______ strategy is a broad corporate-level strategic plan used to achieve strategic goals and guide the strategic _______alternatives that managers of individual businesses or subunits may use. a. grand b. growth c. stability d.retrenchment/recovery e. repositioning.

a This is the definition of a grand strategy.

The evidence clearly shows that international assignment. ________is the most important factor in determining the success or failure of an a. the amount of language training provided to the expatriate b. the amount of cross-cultural training provided to the expatriate c. how well an expatriate's spouse and family adjust to the foreign culture d. how willing the expatriate was to accept the foreign assignment e. the similarity of the foreign language to the expatriate's native language

c Because an expatriate's spouse and family are often more immersed in the daily culture of the foreign country, their adaptability exerts a strong influence on the performance and retention of the expatriate worker.

The highly fragmented chemical industry in Europe has experienced decreasing profits in an industry reluctance to change the way it conducts business, especially in how it competes against lower-priced U.S. imports. This is an example of______. a. competitive dissonance b. strategic apathy c. competitive inertia d. strategic inertia e. competitive apathy

c Competitive inertia is defined as a reluctance to change strategies or competitive practices that have been successful in the past.

The trade agreement that represented the most significant change to the regulations governing global trade during the 1990s was the_____. a. Maastricht Treaty of Europe b. North American Free Trade Agreement c. World Trade Organization d. Mercosur e. Asian Free Trade Arrangement

c GATT was a comprehensive trading agreement originally signed by 124 countries and provided the basic framework for the World Trade Organization agreement, which took the place of GATT in 1995.

When making travel plans, many tourists have selected Thomas Cook, a British tour operation, because they perceive that no other tour company can duplicate the customer service and satisfaction that Thomas Cook has provided over its years of operation. Thomas Cook has apparently created a sustainable competitive advantage by using______resources. a. synergistic b. valuable c. tangible d. nonsubstitutable e. rare

d Nonsubstitutable resources are defined as those that produce value or competitive advantage and have no equivalent substitutes or replacements.

Specialized Bicycle Components, Inc. introduced the first major production mountain bike in 1980. Two-thirds of its profits come from the sale of mountain bikes. Specialized bikes have a large share of a fast-growing market. According to the BCG matrix, specialized mountain bikes would be classified as______. a. problem children b. cash cows c. exclamation points d. stars e. question marks

d Stars are companies with a large share of a fast-growing market.

In any organization, the are the less visible, internal decision-making routines, problem-solving processes, and organizational cultures that determine how efficiently inputs can be turned into outputs. a. imperfectly imitable resources b. valuable resources c. distinctive competencies d. core capabilities e. sources of innovation

d This is the definition of core capabilities.

________occurs when a company sells domestically produced products to customers in foreign countries. a. Direct foreign investment b. Franchising c. Licensing d. Exporting e. A joint venture

d This is the definition of exporting.

A situational analysis for a manufacturer of pet food might reveal which of the following facts . a. a growing dog and cat population in the United States b. scientific research that indicates dogs need less calcium in their diet c. a less expensive, more nutritious imported brand of pet food d. a growing demand for gourmet pet food e. all of these

e