Strategic MGMT Exam 1 (1-6)

Efficiency is often defined as: A) doing things right. B) stakeholder satisfaction C) doing the right thing D) productivity enhancement

A) doing things right.

Which of the following firms would you expect to have the highest ration of market value to book value? A. Apple B. Google C. Southwest Airlines D. Nucor (steel)

A. Apple

Which of the following is a risk (or potential pitfall) of cost leadership? A. Cost cutting may lead to the loss of desirable features. B. Attempts to stay ahead of the competition may lead to gold plating. C. Cost differences increase as the market matures. D. Producers are more able to withstand increases in supplier costs.

A. Cost cutting may lead to the loss of desirable features.

Which of the following reasons explains why painter Vincent van Gogh died penniless, while painter Pablo Picasso left a $740 million estate upon this death? A. Picasso had a wider range of social connections and bridging relationships. B. Van Gogh had a wider range of social connections. C. Picasso was a solitary node with few connections. D. Van Gogh was a hub who embedded himself in a vast network that stretched across various social lines.

A. Picasso had a wider range of social connections and bridging relationships.

According to Henry Mintzberg, the realized strategies of a firm: A. are a combination of deliberate and emergent strategies B. are a combination of deliberate and differentiation strategies C. must be based on the strategic plan of the company D. must be kept confidential for competitive reasons

A. are a combination of deliberate and emergent strategies

In assessing its primary activities, an airline would examine ___________. A. baggage handling B. employee training programs C. criteria for lease versus purchase decisions D. the effectiveness of its lobbying activities

A. baggage handling

SWOT analysis is a framework for analyzing the internal and external environment of a company. It consists of strengths, weaknesses, opportunities, and threats. According to a SWOT analysis, which of the following is not an aspect that the strategy of the firm must follow? A. build on its weaknesses B. remedy the weaknesses or work around them C. take advantage of the opportunities presented by the environment D. protect the firm from the threats

A. build on its weaknesses

Amazon Prime is credited for helping to increase the Amazon stock price by nearly 300 percent from 2008 to 2010. This is competitive advantage is known as _________. A. causal ambiguity B. product rarity C. service validity D. substitutability

A. causal ambiguity

Casio, a giant electronic products producer, synthesizes it abilities in miniaturization, microprocessor design, material science, and ultrathin precision castings to produce digital watches. It uses the same skills to produce card calculators, digital cameras, and other small electronics. These collective skills are known as _________________. A. core competencies B. strategic resources C. shared activities D. economies of scope

A. core competencies

For firms such as CarMax, information systems have been a source of competitive advantage. Their proprietary information system captures, analyzes, interprets, and disseminates information about all cars on the CarMax lot. Which of the following can be attributed to this information system? A. decrease in uncertainties in hard to forecast areas such as inventory management B. decrease in operational efficiency C. reduced customer service D. decrease in sales

A. decrease in uncertainties in hard to forecast areas such as inventory management

Corporate-level strategy focuses on _____________. A. gaining long-term revenue B. gaining short-term profits C. decreasing business locations D. managing investment bankers and their interests

A. gaining long-term revenue

The growth stage of the industry life cycle is characterized by A. in-kind competition (from the same type of product) B. premium pricing C. a growing trend to compete on the basis of price D. retaliation by competitors whose customers are stolen

A. in-kind competition (from the same type of product)

An organization is responsible to many different entities. In order to meet the demands of these groups, organizations must participate in stakeholder management. Stakeholder management means that: A. interests of the stockholders are not the only interests that matter B. stakeholders are second in importance to the stockholders C. stakeholders and managers inevitably work at cross-purposes D. all stakeholders receive financial rewards

A. interests of the stockholders are not the only interests that matter

In general, the threat of substitutes is heightened because the Internet ____________. A. introduces new ways to accomplish the same task B. lowers switching costs C. lowers barriers to entry D. increases output per unit of cost

A. introduces new ways to accomplish the same task

Gathering competitive intelligence ___________. A. is good business practice B. is illegal C. is considered unethical D. minimizes the need to obtain information in the public domain

A. is good business practice

Which of the following would be an entry barrier? A. large economies of scale B. low switching costs C. easy access to raw materials D. low capital requirements

A. large economies of scale

The threat of new entrants is high when there are _______. A. low economies of scale B. high capital requirements C. high switching costs D. high differentiation among competitors products and services

A. low economies of scale

We want to be the top-ranked supplier to our customers. (PPG) This is an example of a: A. nonfinancial strategic objective B. financial strategic objective. C. vision statement D. mission statement

A. nonfinancial strategic objective

The most intense rivalry results from _____________. A. numerous equally balanced competitors, slow industry growth, high fixed or storage costs B. few competitors, slow industry growth, lack of differentiation, high fixed or storage costs C. numerous equally balanced competitors, manufacturing capacity increases only in large increments, low exit barriers D. a high level of differentiation

A. numerous equally balanced competitors, slow industry growth, high fixed or storage costs

The vision and mission statements of a company set the overall direction of the organization. Strategic objectives serve what role? A. operationalize the mission statement B. modify the mission statement C. are a shorter version of the mission statement D. are only clarified by the board of directors

A. operationalize the mission statement

One aspect of using a cost leadership strategy is that experience effects may lead to lower costs. Experience effects are achieved by ____________. A. repeating a process until a task becomes easier B. hiring more experienced personnel C. spreading out a given expense or investment over a greater volume D. competing in an industry for a long time

A. repeating a process until a task becomes easier

Managers should do more than just focus on short-term financial performance. One concept that helps managers do this is stakeholder symbiosis. This means that: A. stakeholders are dependent on each other for their success B. stakeholders look out for their individual interests C. one can only gain at the expense of someone else D. all stakeholders want to maximize shareholder returns

A. stakeholders are dependent on each other for their success

The four key attributes of strategic management include the idea that: A. strategy must be directed toward overall organizational goals and objectives B. strategy must be focused on long-term objectives C. strategy must be focused on one specific area of an organization D. strategy must focus on competitor strengths

A. strategy must be directed toward overall organizational goals and objectives

Firms must be aware of goals other than short-term profit maximization. One area of concern should be social responsibility which is: A. the expectation that business will strive to improve the overall welfare of society B. the idea that organizations are solely responsible to local citizens C. the fact that court costs could impact the financial bottom line D. the idea that businesses are responsible to maintain a healthy social climate for their employees

A. the expectation that business will strive to improve the overall welfare of society

Sharing core competencies is one of the primary potential advantages of diversification. In order for diversification to be most successful, it is important that _____________. A. the similarity required for sharing core competencies must be in the value chain, not in the product B. the products use similar distribution channels C. the target market is the same, even if the products are very different D. the methods of production are the same

A. the similarity required for sharing core competencies must be in the value chain, not in the product

McKesson, a large distribution company, sells many product lines such as pharmaceuticals and liquor through its super warehouses. This is an example of ____________. A. using related diversification to achieve value by sharing activities to create economies of scope B. using related diversification to achieve value by leveraging core competencies to create market power C. using unrelated diversification to create value by managing its portfolio to create financial synergies D. using unrelated diversification to create value by managing its portfolio to create restructuring advantages

A. using related diversification to achieve value by sharing activities to create economies of scope

Examples of __________ include: To be the happiest place on earth (Disneyland), and Restoring patients to full life (Medtronic). A. vision statements B. mission statements C. strategic objectives D. operational objectives

A. vision statements

Which of the following is most often true of mature markets? A. Some competitors enjoy a significant operating advantage due to increasing experience effects. B. Advantages that cannot be duplicated by other competitors are difficult to achieve. C. The market supports premium pricing, which attracts additional competitors. D. The magnitude of pricing differences and product differentiation is larger than in the growth stage.

B. Advantages that cannot be duplicated by other competitors are difficult to achieve.

Which of the following is not a potential pitfall of a differentiation strategy? A. Uniqueness that is not valuable. B. All rivals share a common input or raw material. C. The price premium is too high. D. Perceptions of differentiation may vary between buyers and sellers.

B. All rivals share a common input or raw material.

Which of the following statements regarding internal development as a means of diversification is FALSE? A. Many companies use internal development to extend their product or service offers. B. An advantage of internal development is that it is generally faster than other means of diversification and firms can benefit from speed in developing new products and services. C. The firm is able to capture wealth created without having to share the wealth with alliance partners. D. Firms can often develop products or services at a lower cost, if they rely on their own resources instead of external funding.

B. An advantage of internal development is that it is generally faster than other means of diversification and firms can benefit from speed in developing new products and services.

_____________ tracks the evolution of environmental trends, sequences of events, or streams of activities. A. Environmental scanning B. Environmental monitoring C. Environmental surveying

B. Environmental monitoring

Peter Senge, of MIT, recognized three types of leaders. __________ champion and guide ideas, create a learning infrastructure, and establish a domain for taking action. A. Local line leaders B. Executive leaders C. Internal networkers D. Shop floor leaders

B. Executive leaders

Portfolio management frameworks, such as the BCG matrix, share which of the following characteristics? A. Businesses are plotted on a 3-dimensional grid. B. Grid dimensions are based on external environments and internal capabilities/market positions. C. Position in the matrix suggests a need for sharing synergies. D. They are most helpful in helping businesses develop types of competitive advantage.

B. Grid dimensions are based on external environments and internal capabilities/market positions.

Which of the following examples demonstrates how successful organizations manage their primary activities? A. Motorola has revised its compensation system to reward employees who learn a variety of skills. B. Hewlett Packard has cut lead time from five days to one by employing JIT inventory management. C. National Steel improved its efficiency by reducing the number of job classifications. D. Wal-Mart implemented a sophisticated information system that resulted in reduced inventory carrying costs and shortened customer response times.

B. Hewlett Packard has cut lead time from five days to one by employing JIT inventory management.

Which statement regarding competitive advantages is true? A. With an overall cost leadership strategy, firms need not be concerned with parity on differentiation. B. If several competitors pursue similar differentiation tactics, they may all be perceived as equals in the mind of the consumer. C. In the long run, a business with one or more competitive advantages is probably destined to earn normal profits. D. Attaining multiple types of competitive advantage is a recipe for failure.

B. If several competitors pursue similar differentiation tactics, they may all be perceived as equals in the mind of the consumer.

All of the following are limitations (or downsides) of the BCG (Boston Consulting Group) matrix EXCEPT: A. Every business cannot be accurately measured and compared on the two dimensions. B. It takes a dynamic view of competition which can lead to overly complex analyses. C. It views each business as a stand-alone entity and ignores the potential for synergies across businesses. D. While easy to comprehend, the BCG matrix can lead to some troublesome and overly simplistic prescriptions.

B. It takes a dynamic view of competition which can lead to overly complex analyses.

__________ are the competencies or skills that a firm employs to transform inputs into outputs. A. Tangible resources B. Organizational capabilities C. Reputational resources D. Intangible resources

B. Organizational capabilities

___________ is/are associated with collecting, storing, and distributing the product or service to buyers. They consist of warehousing, material handling, delivery operation, order processing, and scheduling. A. Services B. Outbound logistics C. Inbound logistics D. Operations

B. Outbound logistics

Which of the following statements about strategic groups is FALSE? A. Two assumptions are made: (1) no two firms are totally different, (2) no two firms are exactly the same. B. Strategic groupings are of little help to a firm in assessing mobility barriers that protect a group from attacks by other groups. C. Strategic groups help chart the future directions of firm strategies. D. Strategic groups are helpful in thinking through the implications of each industry trend for the group as a whole.

B. Strategic groupings are of little help to a firm in assessing mobility barriers that protect a group from attacks by other groups.

Which of the following is NOT a limitation of SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis? A. Organizational strengths may not lead to competitive advantage. B. The SWOT focus on the external environment is too broad and integrative. C. SWOT gives a one-shot view of a moving target. D. SWOT overemphasizes a single dimension of strategy.

B. The SWOT focus on the external environment is too broad and integrative.

What is a major reason for Nokia to lose its competitive edge in the cell phone business? A. The team consisted of scientists from around the world. B. The team consisted of only Finnish scientists. C. All of the work required diverse skill sets. D. Each scientist worked alone, separate from colleagues.

B. The team consisted of only Finnish scientists.

Effective vision statements include: A. all strategic directions of the organization B. a brief statement of the company's direction C. strategic posturing and future objectives D. financial objectives and projected figures

B. a brief statement of the company's direction

Strategic groups consist of ________________. A. a group of top executives that makes strategies for a company B. a group of firms within an industry that follows similar strategies C. a group of executives drawn from different companies within an industry that makes decisions on industry standards D. a group of firms within an industry that decides to collude rather than compete with each other so that they can increase their profits

B. a group of firms within an industry that follows similar strategies

A resource is valuable and rare but neither difficult to imitate nor without substitutes. This should enable the firm to attain ____________. A. no competitive advantage B. a temporary competitive advantage C. competitive parity D. a sustainable competitive advantage

B. a temporary competitive advantage

Human capital includes A. the relationships between people B. an individual's capabilities, knowledge, and skills C. the output from assembly line employees D. an improved product

B. an individual's capabilities, knowledge, and skills

According to the text, the strategic management process entails three ongoing processes: A. analyses, actions, and synthesis B. analyses, decisions, and actions C. analyses, evaluation, and critique D. analyses, synthesis, and antithesis

B. analyses, decisions, and actions

Managing a knowledge intensive workforce is very challenging. The best way for a firm to manage their workforce is to A. retain knowledge workers B. balance efforts in the attraction, selection, and retention of top talent C. attract the brightest employees D. ensure that it pays higher salaries than its rivals

B. balance efforts in the attraction, selection, and retention of top talent

In the knowledge economy, if a large portion of a firm's value is in intellectual and human assets, the difference between the company's market value and book value should ______ a company with mostly physical and financial assets. A. be equal to B. be larger than C. be smaller than D. not be correlated with

B. be larger than

Dynamic capabilities include all of the following except: A. learning and innovating B. becoming more efficient in operational processes C. the ability of an organization to challenge the conventional industry in its industry and market D. continuously adopting new ways of serving the evolving needs of the market

B. becoming more efficient in operational processes

Human resource management consists of activities involved in the recruiting, hiring, training, development, and compensation of all types of personnel. It supports _______________. A. only individual primary activities B. both individual primary and support activities and the entire value chain C. only individual support activities D. mostly support activities but does have some impact on primary activities

B. both individual primary and support activities and the entire value chain

In social network analysis ______ stress(es) the importance of ties connecting heterogeneous people--helping to ensure a wide range of diversity in information and perspective A. closure B. bridging relationships C. redundancy D. social supports

B. bridging relationships

A narrow market focus is to a differentiation-based strategy as a __________________. A. growth market is to a differentiation-based strategy B. broadly-defined target market is to a cost leadership strategy C. growth market is to a cost-based strategy D. technological innovation is to a cost-based strategy

B. broadly-defined target market is to a cost leadership strategy

Tactic knowledge A. is the same as explicit knowledge B. can be accessed only with the consent of the employees C. is found mostly at the lower levels of the organization D. can be codified but not reproduced

B. can be accessed only with the consent of the employees

The use of information technology (e.g., e-mail) has increased in recent years in many organizations. This has helped to A. make more effective use of time in every situation B. communicate information efficiently C. restrict social network growth D. create smaller social networks

B. communicate information efficiently

All of the following are examples of socially complex organizational phenomena EXCEPT: A. a firm's culture B. complex physical technology C. interpersonal relations among a firm's managers D. leadership and trust

B. complex physical technology

The management of intellectual property involves all of the following except A. patents B. converting explicit knowledge to tacit knowledge C. contracts with confidentiality and noncompete clauses D. copyrights and trademark

B. converting explicit knowledge to tacit knowledge

The best measure of a company's ability to meet imminent financial obligations is known as the A. debt ratio B. current ratio C. total asset turnover D. profit margin

B. current ratio

The aging of the population, changes in ethnic composition, and effects of the baby boom are ____. A. macroeconomic changes B. demographic changes C. global changes D. sociocultural changes

B. demographic changes

Support value chain activities that involve excellent applications engineering support (technology development) and facilities that promote a positive firm image (firm infrastructure) characterize what generic strategy? A. overall cost leadership B. differentiation C. differentiation focus D. stuck-in-the middle

B. differentiation

Incumbent firms may enjoy increased bargaining power because the Internet ___________. A. focuses marketing efforts on end users B. diminishes the power of many distribution channel intermediaries C. increases channel conflict D. has reduced the number of wholesalers and distributors

B. diminishes the power of many distribution channel intermediaries

Members of boards of directors are: A. appointed by the Securities and Exchange Commission B. elected by the shareholders as their representatives C. elected by the public D. only allowed to serve one term of four years

B. elected by the shareholders as their representatives

In contrast to the vision of an organization, its mission should: A. be shorter in length B. encompass both the purpose of the company as well as the basis of competition C. encompass all the major rules and regulations of the corporate work force D. be less detailed.

B. encompass both the purpose of the company as well as the basis of competition

Two of the key inputs to developing forecasts discussed in the text are: A. environmental scanning and stakeholder identification. B. environmental scanning and competitor intelligence. C. assessing internal strengths and environmental scanning. D. environmental scanning and a SWOT analysis.

B. environmental scanning and competitor intelligence.

In a 360-degree evaluation and feedback system, which of these does not rate the skills and performance of an individual? } A. superiors B. family C. direct reports D. colleagues

B. family

In the resource-based view of the firm, examples of tangible resources include: A. financial resources, human resources, and firm competencies B. financial resources, physical resources, and technological resources C. financial resources, physical resources, and the capacity to combine intangible resources D. outstanding customer service, innovativeness of products, and reputation

B. financial resources, physical resources, and technological resources

Fortune Brands states they will cut corporate overhead costs by $30 million a year. This is an example of a: A. nonfinancial strategic objective B. financial strategic objective C. vision statement D. mission statement

B. financial strategic objective

Many organizations have a large number of functional areas with very diverse and sometimes competing interests. Such organizations will be most effective if: A. each functional area focuses on achieving their own goals B. functional areas work together to attain overall goals C. goals are defined at the bottom and implemented at the top D. management and employees have separate goals

B. functional areas work together to attain overall goals

Research shows that which of the following is not a strategy used by firms engaged in successful turnarounds? A. asset and cost surgery B. global expansion C. selective product and market pruning D. piecemeal productivity improvements

B. global expansion

Which of the following would be considered part of a firm's general environment? A. decreased entry barriers B. higher unemployment rates C. increased bargaining power of the firm's suppliers D. increased competitive intensity

B. higher unemployment rates

_______ includes creativity and problem solving ability. A. physical capital B. human capital C. social capital D. emotional capital

B. human capital

Because the Internet lowers barriers to entry in most industries, it ________. A. decreases the threat of new entrants B. increases the threat of new entrants C. makes it easier to build customer loyalty D. increases supplier power

B. increases the threat of new entrants

Stakeholders are: A. a new way to describe stockholders B. individuals, groups, and organizations who have a stake in the success of the organization C. creditors who hold a lien on the assets of the organization D. attorneys and their clients who sue the organization

B. individuals, groups, and organizations who have a stake in the success of the organization

Typically embedded in unique routines and practices that have evolved and accumulated over time such as effective work teams is which of the following: A. tangible resources B. intangible resources C. reputational resources D. organizational capabilities

B. intangible resources

A marketing department that promises delivery faster than the ability of the production department to produce is an example of a lack of understanding of the _____________. A. organizational culture and leadership B. interrelationships among functional areas and firm strategies C. need to maintain the reputation of the company D. synergy of the business units

B. interrelationships among functional areas and firm strategies

The value net is a game-theoretic approach that _____________. A. extends the value chain analysis B. is a way to analyze all the players in a game and analyze how their interactions affect the ability of a firm to generate and appropriate value C. helps us to understand the evolution of the five forces over time D. uses network analysis to understand the relationships among different companies

B. is a way to analyze all the players in a game and analyze how their interactions affect the ability of a firm to generate and appropriate value

A differentiation strategy enables a business to address the five competitive forces by ______. A. having brand-loyal customers become more sensitive to prices B. lessening competitive rivalry by distinguishing itself C. increasing economies of scale D. serving a broader market segment

B. lessening competitive rivalry by distinguishing itself

Although general administration is often viewed only as overhead expense, it can become a source of competitive advantage. Examples include all of the following EXCEPT: A. negotiating and maintaining ongoing relations with regulatory bodies B. marketing expertise increasing the revenues of the firm and enabling it to enter new markets C. effective information systems contributing significantly to overall cost leadership strategy for the firm D. top management providing a key role in collaborating with important customers

B. marketing expertise increasing the revenues of the firm and enabling it to enter new markets

Dell Computer has an online ordering system that allows consumers to configure their own computers before Dell builds them. This capability is an example of _____________. A. electronic data interchange B. mass customization C. knowledge management D. collaborative design

B. mass customization

The primary means by which a firm can diversify are __________, _________, and ________. A. mergers and acquisitions; differentiation; overall cost leadership B. mergers and acquisitions; joint ventures and strategic alliances; internal development C. joint ventures and strategic alliances; integration of value chain activities; acquiring human capital D. mergers and acquisitions; internal development; differentiation

B. mergers and acquisitions; joint ventures and strategic alliances; internal development

One of the main reasons the Internet is eroding sustainable competitive advantages is that _______. A. incumbent firms are entering market segments that they previously considered to be too small B. nearly all competitors will have greater access to tools for managing costs C. differentiators have been able to preserve their unique advantages D. firms are ignoring opportunities to offer high-end services in niche markets

B. nearly all competitors will have greater access to tools for managing costs

Interest-rate increases have a __________ impact on the residential home construction industry and a __________ effect on industries that produce consumer necessities such as prescription drugs or basic grocery items. A. positive; negligible B. negative; negligible C. negative; positive D. positive; negative

B. negative; negligible

With experience, unit costs of production decline as _________ increases in most industries. A. costs B. output C. price D. volume

B. output

Convincing rivals not to enter a price war, protection from customer pressure to lower prices, and the ability to better withstand cost increases from suppliers characterize which type of competitive strategy? A. differentiation B. overall cost leadership C. differentiation focus D. cost leadership focus

B. overall cost leadership

Creating value within business units can happen when the corporate office helps subsidiaries make wise choices in their own acquisitions, divestures, and new ventures. This is known as ________. A. restructuring B. parenting C. leveraging core competencies D. increasing market power

B. parenting

Customer service includes ________. A. product promotion B. parts supply C. product distribution D. procurement of critical supplies

B. parts supply

The term golden parachute refers to _________. A. a clause requiring that huge dividend payments be made upon takeover B. pay given to executives fired because of a takeover C. financial inducements offered by a threatened firm to stop a hostile suitor from acquiring it D. managers of a firm in a hostile takeover approaching a third party about making the acquisition

B. pay given to executives fired because of a takeover

A competitive advantage based on inimitability can be sustained for at least some time if it has the following characteristics: A. psychographic uniqueness, path dependency, causal ambiguity, and substitutability B. physical uniqueness, path dependency, causal ambiguity, and social complexity C. rarity, path dependency, causal ambiguity, and social substitutability D. geographic uniqueness, cause dependency, social ambiguity, and path complexity

B. physical uniqueness, path dependency, causal ambiguity, and social complexity

In the general environment, many relationships exist among the various elements. General environmental trends can have positive and negative impacts on various industries. For example, the aging population might have a ______ impact on the health care industry and a ______ impact on the baby product industry. These are called _____________ impacts. A. negative; positive; demographic B. positive; negative; technological C. negative; positive; sociocultural D. positive; negative; demographic

B. positive; negative; technological

A __________ can be defined as the total profits in an industry at all points along the industry value chain. A. profit maximizer B. profit pool C. revenue enhancer D. profit outsourcing

B. profit pool

In value-chain analysis, the activities of an organization are divided into two major categories of value activities: primary and support. Which of the following is a primary activity? A. purchasing key inputs B. repairing the product for the consumer C. recruiting and training employees D. monitoring the cost of producing the product through a cost accounting system

B. repairing the product for the consumer

While working to prioritize and fulfill their responsibilities, members of the board of directors of an organization should: A. represent their own interests B. represent the interests of the shareholders C. direct all actions of the CEO D. emphasize the importance of short-term goals

B. represent the interests of the shareholders

A CEO made a lot of mistakes in assessing the market and the competitive conditions and improperly redesigning the organization into numerous business units. Such errors led to significant performance declines. According to the text, this example illustrates the __________ perspective of leadership. A. external control B. romantic C. internal mechanism D. operational

B. romantic

PPG Industries, the Pittsburgh-based manufacturer of paints, coatings, optical products, specialty materials, chemicals, glass, and fiber glass suffered serious failures in 1986 and 1987 when it attempted to diversify its offers. It used a technique to help it identify possible future strategies. What was it? A. crowdsourcing B. scenario analysis C. competitive intelligence D. monitoring

B. scenario analysis

A variety of firm resources include interpersonal relations among managers in the firm, its culture, and its reputation with its suppliers and customers. Such competitive advantages are based upon ____. A. path dependency B. social complexity C. physical uniqueness D. tangible resources

B. social complexity

Supplier power has increased because of the Internet for all of the following reasons EXCEPT: A. the growth of new Web-based businesses has created more outlets for suppliers to sell to B. some suppliers have created Web-based purchasing systems that encourage switching C. the process of disintermediation makes it possible for some suppliers to reach end users directly D. software that links buyers to a supplier's website has created rapid, low-cost order capabilities

B. some suppliers have created Web-based purchasing systems that encourage switching

Procter and Gamble has perfected a technique for compacting cleaning powder into a liquid concentration. Consumers, retailers, shipping and wholesalers, and environmentalists all have benefited from the resulting change in consumer shopping habits and the revolution in industry supply-chain economics. According to the text, this is an example of __________. A. zero-sum relationship among stakeholders B. stakeholder symbiosis C. rewarding stakeholders D. emphasizing financial returns

B. stakeholder symbiosis

New knowledge involves the continual interaction between _______ and _____ knowledge A. intellectual; pragmatic B. tacit; explicit C. theoretical; practical D. detailed; tacit

B. tacit; explicit

Which of the following is a support activity? A. inbound logistics B. technology development C. operations D. customer service

B. technology development

The Cisco acquisition of Pure Digital Technologies, the parent of the Flip video camera, failed because __________________. A. Cisco had valuable competencies B. the Flip division of Cisco was slow and less responsive to market pressures C. consumers continued to purchase the camera D. Cisco had good vision of the market

B. the Flip division of Cisco was slow and less responsive to market pressures

Scanning the general environment would identify information on _______________. A. substitute goods B. the aging population and ethnic shifts C. customer and firm bargaining power D. competitive rivalry

B. the aging population and ethnic shifts

Emerging sociocultural changes in the environment include ____________. A. changes in the ethnic composition B. the increasing educational attainment of women in the past decade C. progressively less disposable income by consumers D. changes in the geographic distribution of the population

B. the increasing educational attainment of women in the past decade

A supplier group would be most powerful when _________. A. there are many suppliers B. there are few substitute products C. there is a low differentiation of products supplied D. there is a high threat of backward integration by the buyers

B. there are few substitute products

Many successful firms use internal labor markets. The most important reason they do this is because A. they want to encourage job rotation B. they want to keep highly mobile employees motivated and challenged C. if employees remain in the same department for too long, they would become indispensable D. an employee who moves too much can be identified as unreliable and then eliminated

B. they want to keep highly mobile employees motivated and challenged

Vertical integration is attractive when ____________. A. internal administrative costs are higher than transaction costs B. transaction costs are higher than internal administrative costs C. transaction costs and internal administrative costs are equal D. search costs are higher than monitoring costs

B. transaction costs are higher than internal administrative costs

Ratios that reflect whether or not a firm is efficiently using its resources are known as A. leverage ratios B. turnover ratios C. liquidity ratios D. profitability ratios

B. turnover ratios

Mary Stinson was required to take over a project after the entire team left the company. She was able to reconstruct what the team had accomplished through reading e-mails exchanged by the previous team's members. This is an example of A. inefficient use of information management B. using explicit knowledge C. using tacit knowledge D. using replicated knowledge

B. using explicit knowledge

WellPoint Health Network states: WellPoint will redefine our industry: through a new generation of consumer-friendly products that put individuals back in control of their future. This is an example of a: A. strategic objective B. vision statement C. vague statement of direction D. line manager's individual goal

B. vision statement

Which of the following is not a potential pitfall of a focus strategy? A. Erosion of cost advantages can arise within the narrow segment. B. Product/service offerings that are highly focused are subject to competition from new entrants. C. All rivals share a common input or raw material. D. Focusers can become too focused to satisfy buyer needs.

C. All rivals share a common input or raw material.

Which of the following is not a potential pitfall of an integrated overall low cost and differentiation strategy? A. Firms that fail to attain both strategies may end up with neither and become stuck-in-the-middle. B. Firms that underestimate the challenges and expenses associated with coordinating value-creating activities in the extended value chain. C. Firms that target too large a market that causes unit costs to increase. D. Firms that miscalculate sources of revenue and profit pools in the company industry.

C. Firms that target too large a market that causes unit costs to increase.

Peter Senge, of MIT, recognized three types of leaders. __________ are individuals that, although having little positional power and formal authority, generate their power through the conviction and clarity of their ideas. A. Local line leaders B. Executive leaders C. Internal networkers D. Shop floor leaders

C. Internal networkers

XYZ Corp. is focusing on the objective of low-cost, high quality, on-time production by minimizing idle productive facilities and workers. The XYZ Corp. is taking advantage of a __________ system. A. Last In, First Out (LIFO) B. First In, First Out (FIFO) C. Just-In-Time (JIT) D. Highly mechanized

C. Just-In-Time (JIT)

In the BCG Matrix, a business that has a low market share in an industry characterized by high market growth is termed a ____________. A. Star B. Cash Cow C. Question Mark D. Dog

C. Question Mark

When using a BCG matrix, a business that currently holds a large market share in a rapidly growing market and has minimal or negative cash flow would be known as a __________. A. Cash Cow B. Dog C. Star D. Question Mark

C. Star

__________ may be considered the advance work that must be done in order to effectively formulate and implement strategies. A. Goal setting B. Corporate entrepreneurship C. Strategy analysis D. Organizational design

C. Strategy analysis

__________ involves ensuring proper strategic controls and organizational designs. A. Corporate governance B. Corporate-level strategy C. Strategy implementation D. Business-level strategy

C. Strategy implementation

Which of the following is FALSE regarding how a differentiation strategy can help a firm to improve its competitive position relative to the Porter five forces model? A. By increasing firm margins, it avoids the need for a low cost position. B. It reduces buyer power because buyers lack comparable alternatives. C. Supplier power is increased, because suppliers will be able to charge higher prices for their inputs. D. Firms will enjoy high customer loyalty.

C. Supplier power is increased, because suppliers will be able to charge higher prices for their inputs.

Which of the following firms would likely pose the least competitive threat? A. a firm in the same industry and in the same strategic group B. a firm that produces substitute goods to your product line C. a competitor to your product where a high switching cost exists D. a firm in the same industry and in the nearest strategic group looking to join your group

C. a competitor to your product where a high switching cost exists

A firm following a focus strategy must focus on _____________. A. governmental regulations B. the rising cost of inputs C. a market segment or group of segments D. avoiding entering international markets

C. a market segment or group of segments

An antitakeover tactic in which existing shareholders have the option to buy additional shares of stock at a discount to the current market price is called ______. A. greenmail B. a golden parachute C. a poison pill D. scorched earth

C. a poison pill

Due to the Internet, firms that use a focus strategy have new opportunities to _________. A. respond quickly to customer requests B. provide more services and features C. access niche markets in a highly specialized fashion D. access markets less expensively

C. access niche markets in a highly specialized fashion

Attracting and retaining human capital is a challenge for many firms today. Firms experiencing high turnover should: A. focus on increased recruiting B. decrease money spent on human capital C. adopt effective retention strategies D. make their work environment less stimulating

C. adopt effective retention strategies

Transaction costs include all of the following costs EXCEPT A. search costs B. negotiating costs C. agency costs D. monitoring costs

C. agency costs

According to the text, intellectual capital is the difference between the market value and the book value of a firm. Intellectual capital can be increased by A. increasing retention of below average workers B. decreasing labor costs C. attracting and retaining knowledgeable workers D. increasing the turnover of employees

C. attracting and retaining knowledgeable workers

How do infomediaries and consumer information websites increase the intensity of competitive rivalry? A. by shifting customers away from issues of price B. by making competitors in cyberspace seem less equally balanced C. by consolidating the marketing message that consumers use to make a purchase decision to a few key pieces of information that the selling company has little control over D. by highlighting unique selling advantages of a firm

C. by consolidating the marketing message that consumers use to make a purchase decision to a few key pieces of information that the selling company has little control over

In social network analysis, high levels of ______ often come at a price. For example, groups can become too insular and fail to share what they have learned with people outside the group A. bridging relationships B. intellect C. closure D. diverse knowledge

C. closure

Strategy formulation and implementation is a challenging ongoing process. To be effective, it should not involve: A. the CEO and the board of directors B. the board of directors, CEO, and CFO C. competitors D. line and staff managers

C. competitors

In the __________ stage of the industry life cycle, there are few segments, the emphasis on process design is low, and the major functional areas of concern are general management and finance. A. introduction B. growth C. decline D. maturity

C. decline

The most likely time to pursue a harvest strategy is in a situation of _______. A. high growth B. strong competitive advantage C. decline in the market life cycle D. mergers and acquisitions

C. decline in the market life cycle

Recently, a knowledge worker's loyalty to his or her employing firm has _______ compared to his or her loyalty to his or her profession and colleagues. A. increased B. remained the same C. decreased D. no correlation when

C. decreased

High product differentiation is generally accompanied by __________. A. higher market share B. higher profit margins and lower costs C. decreased emphasis on competition based on price D. significant economies of scale

C. decreased emphasis on competition based on price

The text discusses three approaches to combining overall cost leadership and differentiation competitive advantages. Which of the following is not one of these three approaches? A. automated and flexible manufacturing systems B. exploiting the profit pool concept for competitive advantage C. deriving benefits from highly focused and high technology markets D. coordinating the extended value chain by way of information technology

C. deriving benefits from highly focused and high technology markets

ABC, Incorporated desires to have the most qualified people in every position throughout its organization. This is an example of a concern for A. decreasing labor intensive training B. developing social networks C. developing human capital D. leveraging organizational structure

C. developing human capital

Divesting of businesses can accomplish many different objectives, except _______. A. enabling managers to focus their efforts more directly on the core businesses of the firm B. providing the firm with more resources to spend on more attractive alternatives C. dispersing manager focus D. raising cash to help fund existing businesses

C. dispersing manager focus

Effectiveness is often defined as: A. doing things right B. stakeholder satisfaction C. doing the right thing D. productivity enhancement

C. doing the right thing

For a resource to provide a firm with the potential for a sustainable competitive advantage, it must have four attributes. Which of the following is not one of these attributes? A. rare B. valuable C. easy for competitors to substitute D. difficult for competitors to imitate

C. easy for competitors to substitute

Social network analysis is helpful because the configuration of group members' social ties within and outside the group affects the extent to which members connect to individuals who do all of the following except: A. convey needed resources B. have the opportunity to exchange information and support C. ensure that everyone has the same perspective on strategic and operational issues D. have the motivation to treat each other in positive ways

C. ensure that everyone has the same perspective on strategic and operational issues

In order to take advantage of investment in human capital, a firm should A. rotate workers through functions in the company as quickly as possible B. refrain from training individual employees C. establish practices that will enhance employee retention D. keep employees in the same position forever

C. establish practices that will enhance employee retention

Which of the following is NOT one of the ways the Internet is lowering transaction costs? A. eliminating supply chain intermediaries B. minimizing office expenses C. evaluating employee performance D. reducing business travel

C. evaluating employee performance

Piecemeal productivity improvements during a turnaround typically do NOT involve _______. A. business process reengineering B. increased capacity utilization C. expansion of company product market scope D. benchmarking

C. expansion of company product market scope

The balanced scorecard provides top managers with a __________ view of the business. A. detailed and complex B. simple and routine C. fast but comprehensive D. long-term financial

C. fast but comprehensive

The balanced scorecard, developed by Kaplan and Norton, helps to integrate ______. A. financial analysis and the reputation of a firm B. intangible resources and operational measures C. financial analysis and stakeholder perspectives D. short-term perspectives and strategic positioning

C. financial analysis and stakeholder perspectives

According to the text, the triple bottom line approach to corporate accounting includes three components: A. financial, environmental, and customer B. financial, organizational, and customer C. financial, environmental, and social D. financial, organizational, and psychological

C. financial, environmental, and social

Threat of substitute products comes from ____________. A. other companies in the same industry B. foreign companies which can use cheap labor in their countries C. firms in other industries that produce products or services that satisfy the same customer need D. new companies in the same industry

C. firms in other industries that produce products or services that satisfy the same customer need

In the value net analysis, complementors are _________________. A. firms that produce substitute products B. customers who compliment the company for their good products and services C. firms that produce products or services that have a positive impact on the value of firm products or services D. firms that supply critical inputs to a company

C. firms that produce products or services that have a positive impact on the value of firm products or services

An automobile manufacturer acquires a rental car company. This is an example of _____. A. backward integration B. economies of scale C. forward integration D. product differentiation

C. forward integration

Advantages of effective social networks for career success include all of the following except: A. access to private information B. access to diverse skill sets C. greater redundancy in knowledge sources D. greater power

C. greater redundancy in knowledge sources

The antitakeover tactic, _______, is when a firm offers to buy shares of their stock from a company (or individual) planning to acquire their firm at a higher price than the unfriendly company paid for it. A. golden parachute B. poison pill C. greenmail D. scorched earth

C. greenmail

During the decline stage of the industry life cycle, __________ refers to obtaining as much profit as possible and requires that costs be decreased quickly. A. maintaining B. exiting C. harvesting D. consolidating

C. harvesting

Firms would be most likely to face intense rivalry with competitors when they _________. A. are in a high growth industry with low fixed costs B. are in a protected market C. have high fixed costs D. have low exit barriers for easy transition to another industry

C. have high fixed costs

In large organizations, conflicts can arise between functional areas. In order to resolve these conflicts, strategic objectives: A. put financial objectives above human considerations B. align departments toward departmental goals C. help resolve conflicts through their common purpose D. cause debate and increase conflict

C. help resolve conflicts through their common purpose

The creation of knowledge assets is typically characterized by A. high upfront costs and subsequent high variable costs B. high fixed costs and high variable costs C. high upfront costs and low variable costs D. low upfront costs and high variable costs

C. high upfront costs and low variable costs

Research has consistently shown that firms that achieve both cost leadership and differentiation advantages tend to perform ______________. A. at about the same level as firms that achieve either cost or differentiation advantages B. about the same as firms that are stuck-in-the-middle C. higher than firms that achieve either a cost or a differentiation advantage D. lower than firms that achieve differentiation advantages but higher than firms that achieve cost advantages

C. higher than firms that achieve either a cost or a differentiation advantage

Historical comparisons provide information to managers about changes in the competitive position of a firm. Historical comparisons often are misleading _____________. A. if the overall strategy of the firm is the same B. if the firm shows constant growth C. in periods of recession or economic boom D. if the firm's stock is publicly traded

C. in periods of recession or economic boom

According to value-chain analysis, which of the following would be considered part of the general administration in a firm? A. human resource management B. technology development C. information systems D. procurement

C. information systems

As the competitive environment changes, strategic management must focus on different aspects of the organization. Recently, strategic management has moved from focusing on tangible resources to A. fixed capital B. working capital C. intangible resources D. investment capital

C. intangible resources

According to Henry Mintzberg, decisions following from the strategic analysis of the firm are its: A. emergent strategy B. deliberate strategy C. intended strategy D. realized strategy

C. intended strategy

All of the following are ambidextrous behaviors EXCEPT: A. taking initiative and being alert to opportunities beyond the confines of one's own job B. being cooperative and seeking opportunities to combine one's efforts with others C. intensely focusing on the responsibilities of one individual and maximizing the output of the department in the organization in which that individual works D. being brokers, always looking to build internal linkages

C. intensely focusing on the responsibilities of one individual and maximizing the output of the department in the organization in which that individual works

In the __________ stage of the industry life cycle, the emphasis on product design is very high, the intensity of competition is low, and the market growth rate is low. A. growth B. maturity C. introduction D. decline

C. introduction

The makeup of goods and services in the Gross Domestic Products of developed countries has changed over the last decade. More than 50% of the value of GDP of developed countries is based on A. clothing and apparel B. capital accumulation C. knowledge D. financial management

C. knowledge

In the BCG Growth Share Matrix, the suggested strategy for Stars is to ________. A. milk them to finance other businesses B. invest large sums to gain a good market share C. maintain position and after the market growth slows use the business to provide cash flow D. not invest in them and to shift cash flow to other businesses

C. maintain position and after the market growth slows use the business to provide cash flow

A danger of forecasting discussed in the text is that _____________. A. in most cases, the expense of collecting the necessary data exceeds the benefit B. the retrospective nature of forecasting provides little information about the future C. managers may view uncertainty as black and white while ignoring important gray areas D. it can create legal problems for the firm if regulators discover the company is making forecasts

C. managers may view uncertainty as black and white while ignoring important gray areas

An important implication of the balanced scorecard approach is that _______________. A. managers need to recognize that satisfaction of stockholder demands is their primary job B. the key emphasis on customer satisfaction and financial goals are only a means to that end C. managers should not look at their job as primarily balancing stakeholder demands D. gains in financial performance and customer satisfaction must come at a cost of employee satisfaction

C. managers should not look at their job as primarily balancing stakeholder demands

Which of the following methods of implementing a differentiation strategy has been greatly enhanced because of Internet technologies? A. celebrity endorsements B. prestige packaging C. mass customization D. exceptional service

C. mass customization

A market that mainly competes on the basis of price and has stagnant growth is characteristic of what life cycle stage? A. introduction B. growth C. maturity D. decline

C. maturity

In a given market, key technology no longer has patent protection, experience is not an advantage, and there is a growing need to compete on price. What stage of its life cycle is the market in? A. introduction B. growth C. maturity D. decline

C. maturity

In the __________ stage of the industry life cycle, there are many segments, competition is very intense, and the emphasis on process design is high. A. introduction B. growth C. maturity D. decline

C. maturity

The size of pricing and differentiation advantages between competitors decreases in which stage of the market life cycle? A. introduction B. growth C. maturity D. decline

C. maturity

Social capital has many potential benefits. However, according to the text, social capital A. is always beneficial to a firm B. usually restricts the productivity of employees C. may or may not be beneficial to a firm D. always hurts firm performance

C. may or may not be beneficial to a firm

According to Michael Porter, there is a tremendous allure to _________. It is the big play, the dramatic gesture. With one stroke of the pen you can add billions to size, get a front-page story, and create excitement in markets. A. strategic alliances and joint ventures B. internal development C. mergers and acquisitions D. differentiation strategies

C. mergers and acquisitions

Internal development may be time consuming and, therefore, firms may forfeit the benefits of speed that growth through __________ and __________ can provide. A. strategic alliances; joint ventures B. strategic alliances; mergers C. mergers; acquisitions D. mergers; strategic alliances

C. mergers; acquisitions

Product differentiation by incumbents act as an entry barrier because __________. A. new entrants cannot differentiate their products B. incumbents will take legal action if new entrants do not differentiate their products C. new entrants will have to spend heavily to overcome existing customer loyalties D. it helps a firm to derive greater economies of scale

C. new entrants will have to spend heavily to overcome existing customer loyalties

There are several perspectives of competition. One perspective is zero-sum thinking. Zero-sum thinking means that: A. all parts of the organization gain at no loss B. in order for someone to gain others must experience no gain or benefit C. one can only gain at the expense of someone else D. everyone in the organization shares gains and losses equally

C. one can only gain at the expense of someone else

Apple combines and packages proven technology in new and innovative ways. This is an example of its use of ____________. A. tangible resources B. intangible resources C. organizational capabilities D. strong primary activities

C. organizational capabilities

Primary value chain activities that involve the effective layout of receiving dock operations (inbound logistics) and support value chain activities that include expertise in process engineering (technology development) characterize what generic strategy? A. differentiation B. differentiation focus C. overall cost leadership D. stuck-in-the-middle

C. overall cost leadership

A crash R&D program by one firm cannot replicate a successful technology developed by another firm, when research findings cumulate. This is an example of ____________. A. social complexity B. physical uniqueness C. path dependency D. causal ambiguity

C. path dependency

Which of the following is not an advantage of Just-In-Time inventory systems? A. reduced raw material storage costs B. minimized idle production facilities and workers C. reduced dependence on suppliers D. reduced work-in-process inventories

C. reduced dependence on suppliers

A manufacturing business pursuing cost leadership is likely to _______. A. focus on a narrow market segment B. use advertising to build brand image C. rely on experience effects to raise efficiency D. put heavy emphasis on product engineering

C. rely on experience effects to raise efficiency

Which of the following is not part of a good guideline list for managing strategic alliances? A. establishing a clear understanding between partners B. not shortchanging your partner C. relying primarily on a contract to make the joint venture work D. working hard to ensure a collaborative relationship between partners

C. relying primarily on a contract to make the joint venture work

The least effective way to retain human capital is A. encourage employee identification with organizational mission and goals B. provide employees with a challenging and stimulating work environment C. require employees to sign agreements that prevent them from working for competitors in the future D. provide employees with financial and nonfinancial rewards and incentives

C. require employees to sign agreements that prevent them from working for competitors in the future

Creating value within business units can happen when a firm tries to find and acquire either poorly performing firms with unrealized potential or firms in industries on the threshold of significant, positive change. This is action is known as ______. A. parenting B. leveraging core competencies C. restructuring D. sharing activities

C. restructuring

Which is considered a force in the Five-Forces model? A. increased deregulation in an industry B. the threat of government intervention C. rivalry among competing firms D. recent technological innovation

C. rivalry among competing firms

When management uses common production facilities or purchasing procedures to distribute different but related products, they are ________________. A. building on core competencies B. achieving process gains C. sharing activities D. using portfolio analysis

C. sharing activities

All of the following are the benefits of diversity in a firm's workforce except: A. creativity argument B. problem-solving argument C. similarity in perspectives argument D. resource acquisition argument

C. similarity in perspectives argument

_______ can be defined as the "network of relationships that individuals have throughout the organization." A. human capital B. intellectual capital C. social capital D. tacit knowledge

C. social capital

Larger numbers of women entering the work force since the early 1970s is an example of ______. A. demographic changes B. political and legal environmental changes C. sociocultural changes D. technological developments

C. sociocultural changes

The text discusses three areas a firm must be concerned with in order to keep their best and brightest employees from leaving. These include all of the following except A. hiring/selecting B. developing C. sorting/absorbing D. retaining

C. sorting/absorbing

Verizon Wireless and ILS Technology have a _________ whereby Verizon integrates technology developed by ILS to improve its machine-to machine (M2M) data transmission systems. M2M systems allow firms to securely transmit data to and from various devices. A. joint diversification B. divestment C. strategic alliance D. global integration

C. strategic alliance

The three key types of resources that are central to the resource-based view of the firm are: A. tangible resources, intangible resources, and organizational structure B. culture, tangible resources, intangible resources C. tangible resources, intangible resources, and organizational capabilities D. tangible resources, intangible resources, and top management

C. tangible resources, intangible resources, and organizational capabilities

In effort to capture key employees from competitors, firms may attract the symbolic leader of a group within a competing firm and hope others will follow. This has been termed A. the Columbus effect B. knowledge integration C. the Pied Piper effect D. strategically competitive hiring

C. the Pied Piper effect

Employees will be able to obtain a proportionately high level of profits they generate (relative to the firm) if ___________. A. suppliers are loyal to the firm B. their expertise is firm-specific C. the cost to the firm of replacing them is high D. the firm's resources are path dependent

C. the cost to the firm of replacing them is high

All of the following are important elements of the political/legal segment of the general environment EXCEPT: A. the deregulation of utilities B. the Americans with Disabilities Act (ADA) C. the increased use of Internet technology D. increases in the federally mandated minimum wage

C. the increased use of Internet technology

The resource-based view (RBV) of the firm combines two perspectives: A. the primary and support activities of the firm B. the interrelationships among the primary activities of the firm and corporate management C. the internal analysis of the firm and the external analysis of the industry and competitive environment D. the industry and the competitive environment

C. the internal analysis of the firm and the external analysis of the industry and competitive environment

Which of the following would be most difficult to assess? A. the liquidity position of a firm B. market share growth C. the legitimacy and reputation of a firm D. the efficiency with which a firm utilizes its assets

C. the legitimacy and reputation of a firm

Generally, employees are most likely to stay with an organization if A. the employer provides high salaries to technology professionals B. the firm is in a high tech industry C. the organization mission and values align with the employees mission and values D. the mission and values of the organization change often

C. the organization mission and values align with the employees mission and values

Social capital is a source of strength to many firms. Firms leverage their social capital in an effort to create competitive advantages. A firm's social capital is based on A. the individual abilities of employees B. the allocation of the financial resources of the firm C. the relationships among the employees of the firm D. the knowledge of an individual

C. the relationships among the employees of the firm

The three participants in corporate governance are: A. the shareholders, board of directors, and employees B. the shareholders, labor unions, and employees C. the shareholders, board of directors, and management D. the shareholders, banks and lending institutions, and management

C. the shareholders, board of directors, and management

As markets mature, ___________. A. costs continue to increase B. application for patents increase C. there is increasing emphasis on efficiency D. differentiation opportunities increase

C. there is increasing emphasis on efficiency

Successful organizations are effective in motivating people. Employees work best when: A. they are asked to do their best B. work requirements are vague and unclear C. they are striving toward specific goals D. they are guided by an abstract mission statement

C. they are striving toward specific goals

Developing human capital is essential to maintaining a competitive advantage in today's knowledge economy. Efforts and initiatives to develop human capital should be directed A. at top managers B. at human resource departments C. throughout the firm at all levels D. at the employees themselves

C. throughout the firm at all levels

Leadership is a necessary (but not sufficient) condition for organizational success. Leaders should emerge at which level(s) of an organization? A. only at the top B. in the middle C. throughout the organization D. only during times of change

C. throughout the organization

The text argues that a strategic perspective in an organization should be emphasized: A. at the top of the organization B. at the middle of the organization C. throughout the organization D. from the bottom up

C. throughout the organization

Firms must compete for top talent. When attracting and selecting employees, firms must strive to select the best fit for both the employee and the firm. In an effort to reduce wasted time and effort in interviewing too many candidates while assuring a good candidate pool, a firm should A. run employment ads in the newspaper B. only let lower level employees interview job candidates C. use a pre-interview quiz D. refrain from hiring by referrals from present employees

C. use a pre-interview quiz

Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. This is an example of _______________. A. using related diversification to achieve value by pooling negotiating power to achieve market power B. using related diversification to achieve value by leveraging core competencies to achieve economies of scope C. using related diversification to achieve value by integrating vertically in order to acquire market power D. using related diversification to achieve value by integrating vertically in order to attain economies of scope

C. using related diversification to achieve value by integrating vertically in order to acquire market power

The hierarchy of organizational goals is in this order (least specific to most specific): A. vision statements, strategic objectives, mission statements B. mission statements, strategic objectives, vision statements C. vision statements, mission statements, strategic objectives D. mission statements, vision statements, strategic objectives

C. vision statements, mission statements, strategic objectives

Inbound logistics include: A. machining and packaging. B. repair and parts supply. C. warehousing and inventory control. D. promotion and packaging.

C. warehousing and inventory control.

The organizational versus the individual rationality perspective suggests that: A. what is good for a functional area is always good for the organization B. what is good for the organization is always good for a functional area C. what is best for a functional area may not be best for the organization D. the incremental perspective may be best for functional areas while the "rational" perspective may be best for the organization

C. what is best for a functional area may not be best for the organization

Which of the following is not an example of corporate competitive analysis? A. Banks tracking home loans B. Airlines changing hundreds of fares daily in response to competitor tactics C. Car manufacturers offering sales incentives based on rival offers D. Consumers comparing product offers online

D. Consumers comparing product offers online

Which of these statements regarding the industry life cycle is correct? A. Part of the power of the market life cycle is its ability to serve as a short-run forecasting device. B. Trends suggested by the market life cycle model are generally not reversible or repeatable. C. It points out the need to maintain a differentiation advantage and a low cost advantage simultaneously. D. It has important implications for company generic strategies, functional areas, value-creating activities, and overall objectives.

D. It has important implications for company generic strategies, functional areas, value-creating activities, and overall objectives.

The downsides or limitations of mergers and acquisitions include all of the following EXCEPT: A. Premiums that are frequently paid to acquire a business are expensive. B. Difficulties exist in integrating the activities and resources of the acquired firm into on-going operations. C. There can be many cultural issues that can doom an otherwise promising acquisition. D. It is a slow means to enter new markets and acquire skills and competences.

D. It is a slow means to enter new markets and acquire skills and competences.

Which of the following is not a factor that helps to explain the extent to which employees and managers will be able to obtain a proportionately high level of the profits that they generate? A. Employees have high bargaining power. B. The cost of employee replacement is high. C. The cost of exit is high for an employee. D. Managers have low bargaining power.

D. Managers have low bargaining power.

Which of the following statements about the introduction stage of the market life cycle is TRUE? A. It produces relatively large, positive cash flows. B. Strong brand recognition seldom serves as an important switching cost. C. Market share gains by pioneers are usually easily sustained for many years. D. Products or services offered by pioneers may be perceived as differentiated because they are new.

D. Products or services offered by pioneers may be perceived as differentiated because they are new.

In managing the corporate portfolio, the BCG matrix would suggest that __________. A. Dogs should be invested in to increase market share and become Cash Cows B. Stars are in low growth markets and can provide excess cash to fund other opportunities C. Cash Cows require substantial cash outlays to maintain market share D. Question Marks can represent future Stars if their market share is increased

D. Question Marks can represent future Stars if their market share is increased

Among the downsides of social capital is/are: A. High social capital may breed groupthink, that is, a tendency to question shared beliefs. B. Socialization processes is inexpensive. C. Individuals may become more willing to collaborate on joint projects. D. Social capital may both breed groupthink and the socialization processes to create it (orientation, training, etc.) can be expensive.

D. Social capital may both breed groupthink and the socialization processes to create it (orientation, training, etc.) can be expensive.

Which of the following is not an example of an IP-related litigation? A. Apple and HTC sue each other based on patent infringement. B. Apple sues smartphone makers running Android, Google's mobile operating system. C. China is sued by U.S. manufacturers of video games. D. The United States sues to get access to physical plant assets in China.

D. The United States sues to get access to physical plant assets in China.

Which of the following is not a reason for merger and acquisition failures? A. The acquiring company pays too high a premium for the common stock of the target company. B. Top executives act in their best interests rather than those of the shareholders. C. The acquired company assets are poorly integrated into the acquiring company business lines. D. The acquisition leads to value creation.

D. The acquisition leads to value creation.

For a core competence to be a viable basis for the corporation strengthening a new business unit, there are three requirements. Which one of the following is not one of these requirements? A. The competence must help the business gain strength relative to its competition. B. The new business must be similar to existing businesses to benefit from a core competence. C. The collection of competencies should be unique, so that they cannot be easily imitated. D. The new business must have an established large market share.

D. The new business must have an established large market share.

Atlas Door created competitive advantage by reducing the time to receive and process and order and through installing a just in time logistics operation. Which of the following is not a reason for their favorable position relative to the five forces of industry competition? A. It exerted power over its customers. B. It created high entry barriers for new entrants. C. The integration of many value-chain activities in the firm provided causal ambiguity and path dependency. D. The product was easily imitable.

D. The product was easily imitable.

The primary aim of strategic management at the business level is __________________. A. maximizing risk-return tradeoffs through diversification B. achieving a low cost position C. maximizing differentiation of products and/or services D. achieving competitive advantage

D. achieving competitive advantage

The risks of vertical integration include all of the following EXCEPT: A. costs and expenses associated with increased overhead and capital expenditures. B. problems associated with unbalanced capacities along the value chain. C. lack of control over valuable assets. D. additional administrative costs associated with managing a more complex set of activities.

D. additional administrative costs associated with managing a more complex set of activities.

Changes in our economy have forced firms to be more concerned with protecting their A. knowledge workers B. social capital C. intellectual capital D. all of these

D. all of these

According to the text, corporate restructuring includes A. capital restructuring, asset restructuring, and technology restructuring B. global diversification, capital restructuring, and asset restructuring C. management restructuring, financial restructuring, and procurement restructuring D. capital restructuring, asset restructuring, and management restructuring

D. capital restructuring, asset restructuring, and management restructuring

Which of the following is not a reason for the possible erosion of company competitive advantage? A. rapid change in technology B. globalization C. actions by rivals from within and outside of the industry D. company commitment to innovation

D. company commitment to innovation

Portfolio management matrices are applied to what level of strategy? A. departmental level B. business level C. international level D. corporate level

D. corporate level

Many companies use referrals by current employees as a source for new hiring and even monetarily reward them for the following reasons: A. it is less expensive than the fees paid to headhunters B. current employees normally are careful in recommending someone due to their personal credibility C. it is a good test of employee loyalty D. current employees are careful in their recommendations and it is less expensive than the fees paid to headhunters

D. current employees are careful in their recommendations and it is less expensive than the fees paid to headhunters

The bargaining power of suppliers is enhanced under the following market condition: A. no threat of forward integration B. low differentiation of the supplier products C. greater availability of substitute products D. dominance by a few suppliers

D. dominance by a few suppliers

The four key attributes of strategic management include all of the following EXCEPT: A. including multiple stakeholder interests in decision making B. incorporating both short-term and long-term perspectives C. recognizing the trade-offs between effectiveness and efficiency D. emphasis on the attainment of short-term objectives

D. emphasis on the attainment of short-term objectives

Human capital and social capital are vital for superior firm performance. If a firm has a strong human capital, the firm may exploit this by building social capital. This can be accomplished through A. requiring workers to work independently of each other B. decreasing the interaction of departments within the firm C. structuring the firm with rigid departmental and employee divisions D. encouraging the sharing of ideas between employees in the firm

D. encouraging the sharing of ideas between employees in the firm

The balanced scorecard enables managers to consider their business from all of the following perspectives EXCEPT: A. customer perspective B. internal perspective C. innovation and learning perspective D. ethical perspective

D. ethical perspective

Management innovations such as total quality, benchmarking, and business process reengineering cannot lead to sustainable competitive advantage because: A. companies that have implemented these techniques have lost money B. there is no proof that these techniques work C. they cost too much money and effort to implement D. every company is trying to implement them and hence it does not make a company different from others

D. every company is trying to implement them and hence it does not make a company different from others

Vision statements are used to create a better understanding of the overall purpose and direction of the organization. Vision statements: A. are very specific B. provide specific objectives C. set organizational structure D. evoke powerful and compelling mental images

D. evoke powerful and compelling mental images

Exit barriers do not arise from ________. A. specialized assets with no alternative use B. governmental and social pressures C. strategic interrelationships with other business units within the same company D. flexible costs of exit

D. flexible costs of exit

Antitakeover tactics include all of the following EXCEPT _________. A. greenmail B. poison pills C. golden parachutes D. golden handcuffs

D. golden handcuffs

Taking advantage of the increasing penetration of personal computers in American homes, the Mayo Clinic transformed itself as a provider of health-related knowledge and expertise. It took advantage of the ______ trends of the _______ in the prices of PCs and the ____________ presence of PCs in virtually every home in the U.S. A. soft; increase; increasing B. soft; decrease; decreasing C. hard; decrease; decreasing D. hard; decrease; increasing

D. hard; decrease; increasing

In a retail service industry, which of the following is not a primary value-chain activity? A. purchasing goods B. operating stores C. partnering with vendors D. human resource management

D. human resource management

Which of the following lists consists of support activities? A. human resource management, technology development, customer service, and procurement B. human resource management, customer service, marketing and sales, and operations C. customer service, information systems, technology development, and procurement D. human resource management, technology development, procurement, and firm infrastructure

D. human resource management, technology development, procurement, and firm infrastructure

Maintaining a competitive workforce is very challenging in today's economy. The role of evaluating human capital, in recent years, has A. remained the same B. decreased C. become less important D. increased

D. increased

Which of the following is not a reason for the successful turnaround that Ford experienced in 2011 under CEO Mulally? A. downsizing through the sale of non-Ford brands B. focus on a narrower range of cars C. tightening of the product design across brands D. increasing its manpower across the company

D. increasing its manpower across the company

Buyer power will be greater when _______. A. the products purchased are highly differentiated B. there are high switching costs C. the industry product is very important to the quality of the buyer end products or services D. it is concentrated or when a buyer group purchases large volumes relative to seller sales

D. it is concentrated or when a buyer group purchases large volumes relative to seller sales

Cooperative relationships such as __________ have potential advantages such as entering new markets, reducing manufacturing (or other) costs in the value chain, and developing and diffusing new technologies. A. joint ventures B. mergers C. acquisitions D. joint ventures and strategic alliances

D. joint ventures and strategic alliances

Environmental forecasting does not involve plausible projections about the ________ of environmental change. A. direction B. scope C. speed D. lack of intensity

D. lack of intensity

Which of these categories of financial ratios is used to measure the ability of a firm to meet its short-term financial obligations? A. leverage ratios B. profitability ratios C. activity ratios D. liquidity ratios

D. liquidity ratios

A Cash Cow, in the BCG framework, refers to a business that has _______________. A. high market growth and relatively high market share B. relatively low market share and low market growth C. relatively low market share and high market growth D. low market growth and relatively high market share

D. low market growth and relatively high market share

A firm can achieve differentiation through all of the following means EXCEPT ________. A. improving brand image B. better customer service C. adding additional product features D. offering lower prices to frequent customers

D. offering lower prices to frequent customers

Advertising is a __________ activity. Supply of replacement parts is a __________ activity. A. support; primary B. support; secondary C. primary; support D. primary; primary

D. primary; primary

In the Five-Forces model, conditions under which a supplier group can be powerful include all the following EXCEPT: A. lack of importance of the buyer to the supplier group B. high differentiation by the supplier C. dominance by a few suppliers D. readily available substitute products

D. readily available substitute products

The text addresses two perspectives of leadership as well as their implications. These two perspectives are: A. romantic and unromantic B. romantic and internal control C. external control and unromantic D. romantic and external control

D. romantic and external control

Diversification initiatives include all of the following except ___________________. A. mergers and acquisitions B. strategic alliances C. joint ventures D. shareholder development

D. shareholder development

The bargaining power of the buyer is greater than that of the supplier when __________. A. volume of purchase is low B. threat of backward integration by buyers is low C. cost savings from the supplier's product are minimal D. the buyer's profit margin is low

D. the buyer's profit margin is low

End users are not ____________. A. the final consumers in a distribution channel B. usually the C in B2C C. likely to have greater bargaining power because of the Internet D. the first customers in a distribution channel

D. the first customers in a distribution channel

A firm should consider vertical integration when ___________. A. the competitive situation is highly volatile B. customer needs are evolving C. the suppliers of the firm willingly cooperate with the firm D. the suppliers of raw materials to the firm are often unable to maintain quality standards

D. the suppliers of raw materials to the firm are often unable to maintain quality standards

The bargaining power of suppliers increases as ____________. A. more suppliers enter the market B. importance of buyers to supplier group increases C. switching costs for buyers decrease D. threat of forward integration by suppliers increases

D. threat of forward integration by suppliers increases

New communication technology can impact seemingly unrelated industries such as the airline industry. This would be an example of a ______________. A. threat of entry B. backward integration C. forward integration D. threat of substitute products

D. threat of substitute products

At Cooper Industries, there are few similarities in the products it makes or the industries in which it completes. The corporate office adds value through such activities as superb human resource practices and budgeting systems. This is an example of __________________. A. using related diversification to achieve value by leveraging core competencies to attain economies of scope B. using related diversification to achieve value by leveraging core competencies to acquire market power C. using unrelated diversification to achieve value through portfolio management in order to acquire financial synergies D. using unrelated diversification to achieve value through restructuring and parenting

D. using unrelated diversification to achieve value through restructuring and parenting

Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input into its manufacturing process. This is an example of ______________. A. leveraging core competencies B. sharing activities C. pooled negotiating power D. vertical integration

D. vertical integration

Unbalanced capacities that limit cost savings, difficulties in combining specializations, and reduced flexibility are disadvantages associated with ___________. A. strategic alliances B. divestment C. horizontal integration D. vertical integration

D. vertical integration