Final ECON

matrix structure

An organizational form in which employees are subject to tow or more sets of managers at once

What term best describes clusters of activities that a firm does especially well in comparison with other firms

Capabilities

Which of the following products and services depend on standards

Cellular Communications Internet Video Gaming High-definition television

Conflicts of interest in the certifier market often can lead to which of the following

Certification bias

What term describes the situation when a firm earns a higher rate of economic profits than the average rate of economic profit of other firms competing within the same market

Competitive Advantage

Why is advertising an effective signal of quality in an experienced good

Consumers believe firms that can afford to heavily advertise sell quality products

Why do consumers tent to gravitate towards non-profit firms when evaluating credence goods

Consumers believe non-profit sellers will be less likely to skimp on quality for profit

Which for the following is the weakest an example of a Shock

Contracting to use another firms proprietary process

which of the following terms involves the flow of information within an organization to facilitate subunit decisions that are consistent with each other and with organizational objectives

Coordination

Which of the following is not an example of a way a seller can increase switching costs

Creating a product line compatible with parts that are made by other manufacturers

When quiet periods in markets are punctuated by fundamental shocks or discontinuities that destroy old sources of advantage and replace them with new ones

Creative destruction

Which of the following terms best describes the ability of a firm to maintain and adapt the capabilities that are the basis of its competitive advantage

Dynamic capabilities

What type of good is one whose quality can be assessed only after the customer has used it for a while

Experienced Good

Products for which consumers cannot easily compare product characteristics and value information from others are called

Experienced Goods

Under what type of strategy does a firm either offer a narrow set of varieties serve a narrow set of customers or do both

Focus Strategy

Which of the following is not a way in which consumers can benefit from report cards

Good report cards can lead to more advertising

What type of curve can be used to describe the set of price-quality combinations that yields the same consumer surplus to an individual

Indifference Curve

What term coined by Michael Porter describes a tool that can be used to show how nearly every industry can be broken down into smaller pieces known as segments

Industry Segmentation Matrix

Which of the following terms best describes a review system in which an employee and supervisor work together to construct a set of goals for that employee

Management by objective system

What kind of strategy is one by which a form maintains price parity with its competitors and profits from its benefits or cost advantage primarily through high price-cost margins rather than through a higher market share

Margin Strategy

Which of the following term describes when firms with higher scores tend to have more than their share of luck in rankings

Mean Reversion

What product characteristic refers to the situation where consumers place higher value on a product if other consumers also use it?

Network effort

Which of the following is measured by a report card that assesses product performance

Outcome

which of the following terms describes a contract by which the value of the compensation depends on the measured performance of that employee

Pay for performance contact

Which of the following is a grade used to evaluate quality

Report card

Assumption that a firm is a bundle of resources and capabilities that differ across firms. Even within the same industry, firms are unique and differ from one another

Resource heterogeneity

What term describes a framework used in strategy based on resource heterogeneity which posits that for a competitive advantage to be sustainable it must be underpinned by resource capabilities that are scarce and imperfectly mobile

Resource-based theory of the firm

What term best describes firm-specific assets such as patents and trademarks brand-name reputation installed base and organizational culture

Resources

Which of the following is a statistical process in which raw outcome measures are adjusted for factors that are beyond the control of the seller

Risk adjustment

What type of good is one whose quality is relatively easy to evaluate before purchase

Search Good

Products for which consumers can easily obtain the information required to compare alternatives are called

Search Goods

What kind of strategy is one by which a firm exploits its benefit or cost advantage through a higher market share rather than through high-price cost margins

Share Strategy

What term best refers to fundamental changes that lead to major shifts of competitive positions in a market?

Shock

When consumers learn about many products at once, it is known as

Simultaneous Search

Which of the following is a capability

Source Skills

What term refers to the costs incurred by buyers when they change to a different supplier

Switching Costs

Which of the following terms best describes a phenomenon whereby a profit-maximizing firm sticks with its current technology or product concept even though the profit-maximizing decision for a firm starting from scratch would be to choose a different technology or product concept?

The sunk cost effect

Which of the following is not a common characteristic of capabilities

They are easy to reduce to simple algorithms or procedure guides

Which of the following terms is a concept, developed by Michael Porter, which describes the activities within firms and across firms that add value along the way to the ultimate transacted good or service

Value Chain

What is the one way to measure a firms willingness to pay

Value added analysis

What term describes the process of using market prices of unfinished and semi-finished goods to estimate the incremental value-created by distinctive parts of the value chain

Value-added analysis

Which of the following best describes a focus strategy

When a firm either offer a narrow set of varieties, serve a narrow set of customers or both

Which of the following is a resource

Workers with firm-specific expertise or know-how

360 review

a review that occurs when a employees supervisor, coworkers and subordinates are all asked to provide information regarding that employees performance

Aligning individual and group tasks with those of the firm and aligning incentives so that individuals and groups will consistently work in the same directions is known as

accountability

implicit incentive contract

contract based on information that cannot be observed by courts or arbitrators

organizational structure

describes how a firm uses division of labor to organize tasks, specify how its staff performs tasks and facilitate internal and external information flaws

task interdependence

extent to which two or more positions depends on each other to do their own work

A firms ability to create a superior value, in turn depends on its stock or resources and its distinctive capabilities

firm specific assets

A phenomenon whereby individuals ignore their own information about the best course of action and instead simply do what everyone else is doing

herding

Performance measure

piece of information which an incentive contract (explicit or implicit) can be based

What term best describes an agent who is indifferent between a sure thing and a gamble of equal expected value?

risk neutral

which for the following should not be considered when selecting organizing dimensions

sunk costs

management by objective system

system whereby an employee and a supervisor work together to construct a set of goals for the employee

coorination

the flow of information within in an organization to facilitate subunit decisions that are consistent with other and with the organization

in which of the following situations identified by baron and besanko will a matrix never be optimal regardless of any additional circumstances

when spillovers are positively correlated and activities are profit complements