Unit One - Strat&Policy

Based on his long dominance as a coffeehouse chain, Starbucks has _______________. A. competitive parity B. a competitive disadvantage C. a sustainable competitive advantage D. an absolute advantage

C. a sustainable competitive advantage

Corporate culture is expressed through _______________, which are elements such as vocabulary and the type of clothing worn by employees. A. compensation B. values C. artifacts D. norms

C. artifacts

The minimum efficient scale indicates the level of output needed to _______________ the cost per unit as much as possible. A. increase B. inflate C. bring down D. keep steady

C. bring down

When a firm covers a limited geographic area and is narrowly focused in terms of product/service offerings, a(n) _______________ structure is recommended. A. simple B. multidivisional C. functional D. matrix

C. functional

Disadvantages of the _______________ structure include organizational complexity, increased administrative costs, slow decision-making, and difficulty in implementation. A. simple B. multidivisional C. matrix D. functional

C. matrix

Economies of scale present an opportunity to increase profits because as the number of units within the relevant range increases, fixed costs _______________. A. increase only slightly B. vary only depending on the number of units produced C. stay the same D. decrease dramatically

C. stay the same

Which of the following has NOT been found to be an ethical norm in business? A. Fairness B. Self-Interest C. Reciprocity D. Honesty

B. Self-Interest

The shared value creation framework encourages managers to focus on which of the following needs? A. Spiritual B. Legal C. Emotional D. Economic

D. Economic

Which of the following topics should NOT be considered during the strategy analysis phase of the AFI framework? A. The amount and type of compensation to offer employees. B. The external environment and associated challenges. C. The firm's business model and competitive advantages. D. The firm's internal strengths and resources.

A. The amount and type of compensation to offer employees.

Which of the following industries does NOT use a subscription model? A. Zipcar-by-the-hour B. Cellphone Providers C. Internet Providers D. Magazines

A. Zipcar-by-the-hour

Which of the following is a situation in which individuals follow a leader without challenging or critically evaluating the leader's ideas? A. Groupthink B. Grouping C. Anti-think D. Non-evaluation

A. Groupthink

A firm can gain a competitive advantage by providing goods and services _______________. A. similar to competitors' offerings at a higher price B. that create more value for consumers than competitors' offerings C. that cost less to produce than competitors' offerings, independent of the value it creates D. that are of inferior quality to competitors' offerings but can be sold at a lower price due to lower costs

B. that create more value for consumers than competitors' offerings

The concept of a(n) _______________ attempts to combine both learning effects and process improvements. A. minimum efficient scale B. technological innovation C. strategic implementation D. experience curve

D. experience curve

Value drivers known as _______________ add value to a product or service when they are consumed in tandem with the focal product. A. complements B. citations C. constructs D. customizations

A. complements

A(n) _______________ outlines what an organization does, while a vision outlines what the organization wants to do. A. mission B. values C. strategy D. vision

A. mission

Merck's choice to pull the drug Vioxx off the market in 2004 is an example of _______________? A. lack of strategic leadership B. adhering to core organizational values C. moving away from a product-oriented vision statement to a customer-oriented one D. implementing a business strategy

B. adhering to core organizational values

The organizational structure at Gore, in which everyone is encouraged to speak to anyone they wish to within the organization, is called a(n) _______________ organizational form. A. centralized B. boundaryless C. unlimited D. formal

B. boundaryless

Which of the following is typically found in organic organizations? A. A tall organizational structure. B. Centralized decision-making. C. A high degree of formalization. D. A low degree of specialization.

D. A low degree of specialization.

Which of the following tends to result in delayed response time and lower customer satisfaction? A. Emergent Decision-Making B. Local Responsiveness C. Decentralized Decision-Making D. Centralized Decision-Making

D. Centralized Decision-Making

Which of the following is NOT a key element of organizational culture? A. Artifacts B. Values C. Norms D. Logos

D. Logos

Which of the following is the most important yet least visible element of organizational culture? A. Leaders B. Artifacts C. Norms D. Values

D. Values

What type of vision is most likely to fail? A. Marketing-Oriented B. Product-Oriented C. Customer-Oriented D. Mission-Oriented

B. Product-Oriented

Which of the following describes how Amazon disrupted the traditional wholesale model for book publishers? A. Amazon sold e-books for its e-reader device at a loss to promote sales of the e-reader. B. Amazon sold e-books at an inflated price because of their perceived value of portability. C. Amazon sold all hardcover and paperback versions of the same title at the same price. D. Amazon sold newly released best-sellers at a higher price than other hardcover books.

A. Amazon sold e-books for its e-reader device at a loss to promote sales of the e-reader.

A firm pursuing a blue ocean strategy can increase its profit margins by implementing which of the following pricing options? A. Charge a higher price than the cost leader. B. None of these because price cannot be used to increase profit margins. C. Charge a higher price than the differentiator. D. Charge a lower price than the cost leader.

A. Charge a higher price than the cost leader.

Business-level strategy addresses which overarching question? A. How should we compete? B. What should we sell? C. How should we treat our employees? D. What should we produce

A. How should we compete?

Which of the following activities would be defined by a firm's organizational structure? A. The orchestration of the work efforts of individuals and teams. B. The location of the firm. C. The salary of CEOs and other top managers. D. The employee recruiting and selection process.

A. The orchestration of the work efforts of individuals and teams.

A good strategy consists of three elements. The first element is accomplished through analysis of the firm's external and internal environments. We also call this _______________. A. a diagnosis of the competitive advantage B. a set of coherent actions to implement the firm's guiding policy C. a guiding policy to address the competitive advantage

A. a diagnosis of the competitive advantage

A(n) _______________ occurs when a firm performs below the industry average or is outperformed by its competitors. A. competitive disadvantage B. purchasing parity C. underperforming norm D. competitive parity

A. competitive disadvantage

When supporting a related-diversification strategy with the M-form organizational structure, managers typically _______________. A. concentrate decision-making at the top of the organization B. rely on lower-level workers to make decisions C. discourage cooperation for competency sharing D. avoid making decisions until consulting all division managers

A. concentrate decision-making at the top of the organization

The mechanism used to guide a company toward meeting and strategic goals within the bounds of the law is known as _______________. A. corporate governance B. corporate social responsibility C. stakeholder impact analysis D. strategic intent

A. corporate governance

A _______________ vision statement defines a company by describing its interest in developing solutions to consumer problems. A. customer-oriented B. marketing-oriented C. business-oriented D. product-oriented

A. customer-oriented

A firm that increases its output of a given product and experiences a simultaneous decrease in her unit costs is taking advantage of _______________. A. economies of scale B. complements C. diseconomies of scale D. competitive parity

A. economies of scale

When pursuing a differentiation strategy, a firm can achieve a competitive advantage by _______________. A. ensuring that its economic value exceeds that of its competitors B. increasing perceived value regardless of cost increases C. making sure the firm's costs are the lowest D. equipping customers with generic and lower-priced products

A. ensuring that its economic value exceeds that of its competitors

Leslie, Juan, and Felicia all work for the same company. Leslie pays the bills and invoices customers, Juan make sure the company's computers and phones work, and Felicia interacts with customers and sellers of the firm's products. This is an example of _______________. A. specialization B. inertia C. centralization D. formalization

A. specialization

An external governance mechanism that makes a poorly managed company vulnerable to takeover by outside investors is known as _______________. A. the market for corporate control B. corporate social responsibility C. industry analysis D. regulatory audit

A. the market for corporate control

Strategy implementation frequently fails because managers _______________. A. are reluctant to implement strategies that will have effects on the diversification capability of the organization B. cannot make the needed adjustments to transform strategy into actions because of its effect on the firm's resource allocation and power distribution C. are unable to take into account implementation's effects on the external environment of the organization D. cannot effectively implement strategies because the organization is to flexible to accommodate the formulated strategy

B. cannot make the needed adjustments to transform strategy into actions because of its effect on the firm's resource allocation and power distribution

Which type of structure uses domain expertise to separate employees into specific areas based on their purpose, such as sales and human resources? A. An Organic Structure B. A Functional Structure C. A Mechanistic Structure D. An Operational Structure

B. A Functional Structure

Which of the following structures is a combination of the multidivisional structure and the functional structure? A. A Transnational Structure B. A Matrix Structure C. A Universal Structure D. A Global Structure

B. A Matrix Structure

A top-down strategic plan generally takes place in which type of organization? A. Organic B. Highly Centralized C. Decentralized D. Flat Structure

B. Highly Centralized

Svanhildur's company is committed to corporate social responsibility but also understands that growth and profit are imperative for survival. What should Svanhildur's company do to achieve this balance? A. It should apply agency theory. B. It should use the shared value creation framework. C. It should manipulate corporate-governance mechanisms. D. It should adopt a functional corporate structure.

B. It should use the shared value creation framework.

Which of the following is the best indicator that Tesla's strategy is working as intended? A. Many Americans are still unaware that Tesla exists. B. Tesla generated 500,000 preorders for an unseen model. C. Tesla provided cars to some of its employees. D. Tesla's models outsell all other automobiles in the United States.

B. Tesla generated 500,000 preorders for an unseen model.

With a(n) _______________, firms describe how they turn strategy into action. A. VRIO framework B. business model C. scorecard plan D. triple bottom line

B. business model

Social consequences of business activities, including pollution, energy loss, and dangerous accidents, are known as _______________. A. overruns B. externalities C. output incidences D. internal costs

B. externalities

A company with a cost-leadership strategy faces significant difficulties when _______________. A. no valuable substitutes exist B. the focus of competition shifts from price to nonprice attributes C. suppliers agree to charge less for their supplies D. the focus of competition shifts from nonprice to price attributes

B. the focus of competition shifts from price to nonprice attributes

Different value drivers contribute to competitive advantage if _______________. A. customer service prices exceeds the cost of product features B. the increase in perceived value exceeds the corresponding cost increase C. product customization is offered D. premium pricing is used

B. the increase in perceived value exceeds the corresponding cost increase

Competitive parity occurs when _______________. A. two or more firms rely on international outsourcing to remain competitive B. two or more firms achieve the same performance results C. two or more firms enter into a strategic alliance D. the performance of two or more firms is superior to the industry average

B. two or more firms achieve the same performance results

What is the goal of a differentiation strategy? A. To create a competitive advantage by offering products or services at an acceptable value to keep costs low. B. To make sure each employee understands the processes required to successfully complete assigned tasks. C. To control costs while offering products or services at a higher perceived value, thereby creating a competitive advantage. D. To be both efficient and flexible and use centralization to control costs as well as decentralization to promote creativity.

C. To control costs while offering products or services at a higher perceived value, thereby creating a competitive advantage.

Which of the following determines the allocation of resources and the organization and operations of workers? A. A firm's strategic intent B. The specific management team functionality C. A firm's organizational structure D. An organizational external opportunities analysis

C. A firm's organizational structure

How do founders leave their imprint on their organizations? A. By manipulating existing culture. B. By entering physical elements into the design. C. By taking their vision and making it into reality. D. By formulating growth strategies.

C. By taking their vision and making it into reality.

How did Zappos formulate its list of 10 core values? A. Through pure luck B. Through a top-down initiative C. Through a bottom-up initiative D. Through decisions made by the company's CEO

C. Through a bottom-up initiative

Walmart and Nordstrom maintain very different strategic positions, one based on cost-leadership and the other based on differentiation through superior customer service. This is an example of _______________. A. differences in industry norms B. a strategic failure by Walmart C. the trade-offs required by strategic positioning D. a strategic failure by Nordstrom

C. the trade-offs required by strategic positioning

In line with stakeholder theory, which of the following strategic actions would NOT, according to Michael Porter, connect economic and societal needs? A. Include nontraditional partners into the value chain such as NGOs. B. Focus on creating new regional clusters C. Expand the customer base to bring in nonconsumers such as those at the bottom of the pyramid. D. Offer financial support to local politicians

D. Offer financial support to local politicians.

Because executives make decisions about structure and strategy, _______________. A. structure and culture are essentially the same thing B. culture depends most heavily on the choices of employees C. a firm's culture typically stays the same as it was when the firm was founded D. a change in leadership often results in a change in culture

D. a change in leadership often results in a change in culture

Economist Michael Porter and many others argue that the value of public stock companies is to narrowly defined in terms of _______________, leading to scandals and economic crises. A. social initiatives B. environmental protection C. sales volume D. financial performance

D. financial performance

When the span of control within an organization is wide, one manager supervises _______________. A. one employee B. a tall organizational structure C. a few employees D. many employees

D. many employees

When "_______________, " managers limit themselves to strategies that maintain the status quo. A. structure follows strategy B. organization follows innovation C. action follows implementation D. strategy follows structure

D. strategy follows structure