man 4720 Exam 1

Which of the following statements about competitive advantage is not true? - A firm will have a sustainable competitive advantage when it outperforms its competitors over a prolonged period of time. - A firm can gain a competitive advantage by providing goods similar to its competitors' goods at a lower price. - A firm's competitive advantage is always absolute, not relative. - A firm's past performance does not guarantee its future performance.

A firm's competitive advantage is always absolute, not relative.

Which of the following groups is most likely to be considered a firm's internal stakeholder?

Board members

Which of the following questions would a firm's business strategy ideally answer?

How should we compete?

Which of the following is not true concerning a customer-oriented mission? -It defines the means of how a customer need will be met. -It has more flexibility than a product-oriented mission. -It has a higher likelihood of remaining relevant in the long-term -Organizations that have customer-oriented missions are more likely to be successful.

It defines the means of how a customer need will be met.

Too Fast Inc., a motorcycle company, is the market leader due to its superior engine technology and service orientation. These unique qualities have helped the company generate revenues that are consistently higher than other firms in the same industry. Which of the following can be concluded about Too Fast Inc. from this scenario?

It has a competitive advantage over the other firms

According to the upper-echelons theory, -top managers of a company should isolate themselves from the organizational values -organizational outcomes reflect the values of the top management team. -strong strategic leadership is solely the result of learning. -strategic commitments made by upper-level managers are inexpensive and short-term.

Organizational outcomes reflect the values of the top management team.

________ is an important tool because it allows a manager to recognize, prioritize and address the needs of various stakeholders.

Stakeholder impact analysis

If a company chooses to keep its vision customer-oriented rather than product-oriented, what will be the implication of that decision? -The company will tend to be more flexible when adapting to changing environments. -The company will clearly define how it means to satisfy a customer need. -The company will fail to establish a positive relationship between its vision statement and performance. -The company will have a short-term, unidirectional focus.

The company will tend to be more flexible when adapting to changing environments.

Which of the following statements will effectively guide a strategist? - It is necessary to isolate the key stakeholders and their needs when formulating a strategy. - Industry and firm effects that determine firm performance are independent of each other. - Strategy is all about competitive benchmarking and operational effectiveness. - The principles of strategic management can be applied universally to all organizations.

The principles of strategic management can be applied universally to all organizations.

Which of the following statements is true of customer-oriented visions? -They tend to force managers to take a myopic view of the business environment. -They define a business in terms of providing solutions to people's needs. -They are inflexible with regard to adapting to changing environments. -They state an organization's goals in terms of a good or service provided to customers.

They define a business in terms of providing solutions to people's needs.

a good strategy should be able to provide products and services to customers at an attractive price point while maintaining internal costs, resulting in

Value Creation

Which of the following statements accurately brings out the difference between an organization's vision and mission?

Vision defines what the organization wants to accomplish ultimately, whereas the mission defines the means by which vision is accomplished

Organizational core values are the answer to which of the following questions? -What is the value added to a good or service at each step in the production? -What commitments do we make to act both legally and ethically? -Which of the value chain activities are primary? -What is the company's customer lifetime value?

What commitments do we make to act both legally and ethically?

Which of the following statements related to a firm's stakeholders is not true?

While external stakeholders are those who make contributions toward the firm, internal stakeholders are those who reap all the benefits.

all of the following are examples of external stakeholders except: employees government communities customers

employees

Which of the following is a philanthropic responsibility of a firm?

exhibiting corporate citizenship

Gadgets n' Stuff Inc. is a vendor who supplies machine parts to an appliance manufacturing company. In return, Gadgets n' Stuff Inc. relies on the company for its revenue and is affected by any decisions taken by the company. In this scenario, Widgets Inc. is a(n) _________ for the appliance manufacturing company

external stakeholder

The greater the difference between value creation and cost, the - less likely a firm will gain competitive advantage. - greater a firm's economic contribution. - greater a firm's competitive parity. - less likely that a firm's strategic position will be competitive.

greater a firm's economic contribution.

Which of the following is a stakeholder attribute that managers should consider at every step in a stakeholder impact analysis?

legitimacy

A firm is likely to have a competitive advantage when it - performs at a level similar to the other firms in the industry. - provides goods similar to those of its competitors, but at a higher price. - provides services that consumers will value more than those of its rivals. - minimizes the difference between value creation and the costs involved.

provides services that consumers will value more than those of its rivals.

Which of the following has contributed to Tesla's competitive advantage in terms of stock appreciation? - copying the most popular features of competitors' vehicles - reinvesting profits to continually design and produce better electric vehicles - keeping its proprietary technologies secret - using inexpensive materials to keep costs low

reinvesting profits to continually design and produce better electric vehicles

The annual net profit after taxes for Tele Corp., a multinational conglomerate, is $5.5 billion. As legal owners, which of the following stakeholder groups has the most legitimate claim on this profit?

shareholders

All of the following are examples of internal stakeholders except: employees stockholders board members suppliers

suppliers

Which of the following does a firm possess when it can outperform other firms in the same industry or the industry average over a prolonged period of time? - consistent power position - long-term capital gain - strategic positioning - sustainable competitive advantage

sustainable competitive advantage

Which of the following actions of an automobile firm will be considered as a strategic commitment? -the firm launching an existing model of a car in red as a limited edition for six months -the firm investing eight years and $4 billion to develop a range of hybrid cars with which it will compete in the future -the firm spending $100,000 on renting a manufacturing facility to meet the temporary demand for its cars -the firm promoting its new model of coupe through a free European trip worth $15,000 to be won as an early-bird offer

the firm investing eight years and $4 billion to develop a range of hybrid cars with which it will compete in the future

Why are black swan events such as accounting scandals and the global financial crisis perceived as caused by cheap credit and subprime mortgages offered by financial institutions, bad for business?

they erode the implicit trust between the corporate world and society

A company's vision primarily states

what the company wants to ultimately accomplish

Which of the following statements is true of strategy? - Statements of desire, on their own, are strategy. - Tactical tools that are a part of a firm's functional and global initiatives are strategy. - Operational effectiveness and competitive benchmarking are strategy. - Actions that allow a firm to address a competitive challenge are strategy.

Actions that allow a firm to address a competitive challenge are strategy.

In which of the following cases was a company at a major competitive disadvantage? -Facebook hired Sheryl Sandberg because Mark Zuckerberg, Facebook's founder, lacked important business skills -Without a clear strategic position, Sears tried to be too many things for too many types of customers. -Sam's Club decided to prescreen its customers via required membership to establish creditworthiness. -Strategy executives at UPS used scenario planning to identify issues critical to shaping the firm's future.

Without a clear strategic position, Sears tried to be too many things for too many types of customers.

A diagnosis of the competitive challenge, an element of a good strategy, is primarily accomplished through strategy - implementation. - formulation. - analysis. - control.

analysis

In the 1980s, Japanese competitors brought better-quality chips to the market at lower cost, threatening Intel Corporation's position and strategic plan regarding the production of DRAM (dynamic random-access memory) chips. When the functional managers at Intel came up with the simple rule of producing whichever product delivered the higher margin, the front-line managers shifted Intel's production capacity away from the lower-margin DRAM business to the higher-margin semiconductor business. This ________ emerged as a consequence of the firm's resource allocation process.

bottom-up strategy

How has Walmart staked out a unique strategic position? - by paying high wages to attract the most talented employees. - by providing excellent customer service in a luxury setting. - by cutting costs to offer lower prices than competitors. - by investing 100% of profits in community development programs.

by cutting costs to offer lower prices than competitors.

According to the level-5 pyramid, the level 2 manager is a(n) -strategic leader -contributing team member -competent manager -effective leader

contributing team member

The board of directors of Qwik Inc., a company that has a large product mix, has decided to get actively involved in research and development for the next three financial years. Budget for each business unit under the company will be allocated from the headquarters in proportion to its previous performance. The board has also decided to liquidate those units that have failed to perform so far. Which of the following strategies does this scenario best illustrate?

corporate strategy

The metaphor of a black swan best applies to a) small businesses that become successful enough to raise capital through initial public offering. b) highly profitable business units in low growth markets that are to be sustained solely for revenue generation. c) events that are considered highly unexpected and highly impactful when they do occur. d) low profitable strategic business units within a large enterprise that are best divested or liquidated.

events that are considered highly unexpected and highly impactful when they do occur

Product-oriented vision statements provide managers with -goals for employee development -goals to improve service -strategic flexibility -ways to solve customer problems

goals to improve service

The pattern of faulty and biased decision making that occurs in groups whose members strive for agreement at the expense of good decision making is called

groupthink

A firm's ________ strategy is likely to fall by the wayside because of unpredictable events and turn into unrealized strategy.

intended

Stan has been recently promoted to the position of a team lead at an insurance company. This promotion was based on his boss's assessment that Stan is capable of conveying the company's vision and mission to groups. As a result, he can guide groups to superior performance. From this scenario, we can say that Stan is currently at __________ of the Level-5 leadership pyramid

level 4

An organization's ________ describes what the organization actually does—the products and services it plans to provide, and the markets in which it will compete

mission

When an organization briefly describes what they do and how they do it, they have more than likely articulated their

mission statement

Within the context of strategic management it is important to understand that black swan events in the past have demonstrated that -stakeholders can affect or be affected by a firm's actions -capitalism as an economic system is highly reliable. -companies can successfully integrate cost-leadership and differentiation strategies. -globalization has reduced the need for standardized corporate ethics.

stakeholders can affect or be affected by a firm's actions.

_____ is best described as executives' use of power and influence to direct the activities of others when pursuing an organization's goals

strategic leadership

Which of the following groups will not be considered a company's internal stakeholder?

suppliers

Evaluating the data collected from environmental analysis, the corporate executives of BigPharma Inc. realized that it was the right time to expand the business. The company's vision was accordingly adjusted from "To Be the Best in the Pharmaceutical Industry" to "To Make Good Health Accessible to Everyone around the Globe." To support the new vision, the executives decided that the company would first enter the Asian market where its growth potential would be huge. To further support these decisions, the general managers of different SBUs and the functional managers formulated their own strategies. Which of the following approaches to the development of strategy does this best illustrate?

top-down strategic planning

When a firm integrates the competitive strategies of cost-leadership and differentiation, it will most likely result in - a competitive advantage through superior performance. - trade-offs that work against each other. - an increase in the firm's economic contribution. - competitive parity with firms that have adopted either of the strategies.

trade-offs that work against each other.

Which of the following statements is true of the Level-5 leadership pyramid? -Each level of leadership builds upon the previous one in the pyramid -Successful companies are led by Level-1 executives. -At Level 3, managers are capable of devising a vision and mission to guide the firm toward superior performance. -Once a manager moves to higher levels, he or she loses the qualities acquired in the previous levels to gain new ones.

Each level of leadership builds upon the previous one in the pyramid

EatNow is a fast-food restaurant that has recently entered the hospitality industry. Since most of its competitors are pursuing a low-cost position and doing well, Quick Eats also wants to adopt the same strategy. Which of the following will be a likely implication of this decision? - Quick Eats will face low profit potential. - Quick Eats will be able to create higher value for its customers. - Quick Eats will be better placed to gain a competitive advantage in the industry. - Quick Eats will not face any direct competition in the industry.

EatNow will face low profit potential.

Which of the following statements does the upper-echelons theory support? -Organizational outcomes including strategic choices and performance levels reflect the values of external stakeholders. -The leadership actions of executives are independent of their characteristics like age, education, and career experiences. -Strong leadership is solely the result of innate abilities and not learning. -Executives interpret situations through the lens of their unique perspectives, shaped by personal circumstances, values, and experiences.

Executives interpret situations through the lens of their unique perspectives, shaped by personal circumstances, values, and experiences.