MGMT 4389 exam 1 (dif sets according to quizzes for exam 1 pt 1)

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Accounting is a sort of transformation process that converts daily records of individual transactions into monthly financial reports. The __________ are the inputs, accounting is the operation that adds value, and ___________ are the outputs. A. transaction records; financial statements B. financial statements; transaction records C. employee records; transaction records D. health records; transaction statements

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

The use of sophisticated information sharing platforms has increased in recent years in many organizations. This has helped to A. facilitate internal and external collaboration. B. keep employees satisfied with social networks. C. override the need for email. D. increase paperwork.

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

Which of the following is not a tangible resource? A. technical and scientific skills B. trade secrets, patents, copyrights C. state-of-the art machinery D. company borrowing capacity

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

Among the downsides of social capital is/are:

A and B

Many companies use referrals by current employees as a source for new hiring and even monetarily reward them for the following reasons:

A and B above.

10. An important implication of the balanced scorecard is that managers do not need to look at their job as primarily balancing stakeholder demands. A) True B) False

A) True; A key implication is that managers do not need to look at their job as balancing stakeholder demands. The balanced scorecard provides a win-win approach, increasing satisfaction among a wide variety of organizational stakeholders, including employees (at all levels), customers, and stockholders.

9. Most experts agree that Dell has a weak and non-sustainable competitive advantage over its rivals in the personal computer industry. A) True B) False

A) True; For many years, it looked as if the Dell competitive advantage over its rivals would be sustainable for a very long period of time. By early 2007, however, Dell was falling behind its rivals in market share. This led to a significant decline in its stock price, followed by a complete shake-up of the top management team.

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

A) an individual's capabilities, knowledge, and skills.

When analyzing the change in operating income, the strategy component of productivity will increase when ________. A) capacity is reduced B) quality is enhanced C) selling prices are increased D) more units are produced and sold

A) capacity is reduced

Cinergy, a Cincinnati-based electric, and energy services company, desires to have the most qualified people in every position throughout its organization. This is an example of a concern for A) developing human capital. B) developing social networks. C) decreasing labor intensive training. D) leveraging organizational structure.

A) developing human capital.

The "cascade approach" is used by managers as a tool for A) developing human capital. B) attracting intellectual capital. C) attracting and developing social capital. D) retaining production workers.

A) developing human capital.

2. Human capital includes the capabilities, knowledge, skills and ______________ of an individual. A) experience B) tasks C) physical attributes D) personal life

A) experience; Human capital is the individual capabilities, knowledge, skills, and experience of the company employees and managers. This knowledge is relevant to the task at hand, as well as the capacity to add to this reservoir of knowledge, skills, and experience through learning.

Xerox is a company that is known for its inability to leverage human capital. One example of this is the relatively short tenure of CEO Rich Thoman. One of the main reasons he was fired is that A) he did not have inside connections like other board members and executives had. B) he did not have the skills required for the job. C) Xerox became known for being too "loosely" organized. D) Xerox diversified into too many unrelated businesses.

A) he did not have inside connections like other board members and executives had.

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

A) increase social capital.

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

A) increased.

The operating capabilities is an example of the ________ measure of a balanced-scorecard. A) internal business process perspective B) customer perspective C) learning and growth perspective D) financial perspective

A) internal business process perspective

Terbium Corporation manufactures water toys. It plans to grow by producing high-quality water toys that are delivered in a timely manner. There are a number of other manufacturers who produce similar water toys. Terbium believes that continuously improving its manufacturing processes and reengineering processes to downsize and eliminate excess capacity are critical to implementing its strategy. To further company strategy, measures on the balanced scorecard would most likely include ________. A) number of process improvements B) price premium earned C) longer cycle times D) an increase in operating income from increased profit margins

A) number of process improvements

Apple Watch retailed for $349 in 2015, and the firm was predicted to sell millions of units. The firm's total cost in terms of materials and labor for the Apple Watch was no more than $84. Thus, Apple's profit for each watch sold is an estimated $265, with a profit margin of _____ percent. A. 76 B. 215 C. 265 D. 315 E. none of the above

C: lower profits, because foreign profits will be reduced when measured in dollars

Appreciation of the U.S. dollar will have the following impact on McDonald's: A. lower sales abroad because foreign customers cannot afford McDonalds' products. B. more transfer of ingredients from the U.S. to branches abroad to take advantage of the higher dollar. C. lower profits, because foreign profits will be reduced when measured in dollars. D. no impact at all..

B: the creation of a worldwide network to achieve consistent service regardless of location

As in the case of Siebel Systems (now part of Oracle), elements of a global strategy may facilitate the competitive advantage by: A. increased freedom of individual business units to adapt to local tastes. B. the creation of a worldwide network to achieve consistent service regardless of location. C. flexibility in applying R&D to meet country-specific needs. D. tailoring products to meet country-specific needs.

What are the "operations," or transformation processes, of service organizations

At times, the difference between manufacturing and service is in providing a customized solution rather than mass production as is common in manufacturing For example, a travel agent adds value by creating an itinerary that includes transportation, accommodations, and activities that are customized to your budget and travel dates. A law firm renders services that are specific to a client's needs and circumstances. In both cases, the work process (operation) involves the application of specialized knowledge based on the specifics of a situation (inputs) and the outcome that the client desires (outputs). The application of the value chain to service organizations suggests that the value-adding process may be configured differently depending on the type of business a firm is engaged in. As the preceding discussion on support activities suggests, activities such as procurement and legal services are critical for adding value. Indeed, the activities that may provide support only to one company may be critical to the primary value-adding activity of another firm.

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

A firm that takes on too much long-term debt to finance operations will see an immediate impact on its indicators of _______ financial leverage. A. short-term B. long-term C. relative D. comparable

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 sustain able competitive advantage

Firms must compete for top talent. In 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. use a pre-interview quiz. C. only let lower level employees interview job candidates. D. refrain from hiring by referrals from present employees.

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

Professionals frequently leave Microsoft en masse to form venture capital and technology start-ups, called Baby Bills, built around teams of software developers. This is an example of ____________ causing human capital mobility. A. formal relationships B. social relationships C. tacit knowledge D. intellectual capital

SAP uses ____________ to leverage the expertise and involvement of its users in developing new knowledge and then transmitting it to the entire SAP user community. A. tacit knowledge B. crowdsourcing C. algorithms D. intellectual capital

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

Strategists who rely on traditional definitions of their industry and competitive environment often focus their sights too ___________ on current customers, technologies, and competitors. A. broadly B. narrowly C. aggressively D. widely

Tacit 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.

Technology can be used to leverage __________ and _____________ within organizations as well as with customers and suppliers beyond their boundaries. A. human capital; intellectual capital B. human capital; knowledge C. knowledge; social capital D. communication; social capital

The Cisco Integrated Workforce Experience (IWE) platform is a social business platform designed to facilitate __________ and __________ collaboration and decentralize decision making. A. internal; network-side B. external; personal C. external; individual D. internal; external

The ability to hire, motivate, and retain human capital is an example of ________ capabilities in the resource-based view of the firm: A. tangible B. organizational C. management D. design

The dangers of email include all of the following except A. spreading of rumors. B. almost costless. C. uncontrollable distribution. D. personal time waster.

The internal business perspective of the balanced scorecard answers which of the following questions? A. How do customers see us? B. What must we excel at? C. How do we look to shareholders? D. Can we continue to improve and create value?

The network of relationships that individuals have throughout the organization is known as A. human capital. B. social capital. C. intellectual capital. D. tacit knowledge.

The use of information technology (e.g., email) 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

There are multiple challenges associated with making effective e-teams. Which of the following is not a challenge? A. Process losses result from identification and combination activities. B. E-teams can be effective in generating social capital. C. The physically dispersed team is susceptible to the risk factors that can create process loss. D. Some collective energy, time, and effort must be devoted to dealing with team inefficiencies.

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.

Which of the following is not a limitation of SWOT (Strengths, Weaknesses, Opportunities, and 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.

Which of the following is not an example of organizational capabilities? A. outstanding customer service B. reputation with customers for quality and reliability C. innovativeness of products and services D. ability to hire, motivate, and retain human capital

Which of the following reasons explains why painter Vincent van Gogh died penniless, while painter Pablo Picasso left a 740 million USD estate upon his death? A. Van Gogh had a wider range of social connections. B. Picasso had a wider range of social connections and bridging relationships. 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.

_____________ are typically embedded in unique routines and practices that have evolved and accumulated over time such as effective work teams. A. Tangible resources B. Intangible resources C. Reputational resources D. Organizational capabilities

Which of the following statements is a disadvantage of balanced scorecards? A) Balanced scorecards ignore short-run objectives. B) Balanced scorecards may become unwieldy and difficult to understand. C) Balanced scorecards use a lot of nonfinancial measures. D) Balanced scorecards are of little use in influencing managerial behavior.

B) Balanced scorecards may become unwieldy and difficult to understand.

________ have no measurable cause-and-effect relationship between output and resources used. A) Engineered costs B) Discretionary costs C) Marginal costs D) Manufacturing costs

B) Discretionary costs

4. Today, it is essential for fellow employees to check their emotions and personal life at the door in order for a company to be efficient. A) True B) False

B) False; Brian Hall, CEO of Values Technology in Santa Cruz, California, documented a shift in emotional expectations from work. From the 1950s on, a task first relationship (tell me what the job is, and let us get on with it) dominated employee attitudes. Emotions and personal life were checked at the door. In the past few years, a relationship-first set of values has challenged the task orientation. Hall believes that it will become dominant. Employees want to share attitudes and beliefs as well as workspace.

10. Intellectual property rights are easier to define and protect than property rights for physical assets (e.g., plant and equipment). A) True B) False

B) False; Intellectual property rights are more difficult to define and protect than property rights for physical assets (e.g., plant, equipment, and land). If, however, intellectual property rights are not reliably protected by the state, there will be no incentive to develop new products and services.

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) attracting and retaining knowledgeable workers. C) decreasing labor costs. D) increasing the turnover of employees.

B) attracting and retaining knowledgeable workers.

4. Microsoft has improved the ________ part of its value chain by providing formal reviews of its suppliers, which has helped to clarify expectations for them. A) general administration B) procurement C) human resource management D) technology development

B) procurement; Microsoft has improved its procurement process (and the quality of its suppliers) by providing formal reviews of its suppliers. The evaluation system that Microsoft developed helped clarify its expectations to suppliers.

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

According to the resource-based view of the firm, competitive advantages are ______ for competitors to copy, if they are based on unique bundles of resources. A. easier B. faster C. harder D. more reliable

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

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.

By using the ___________ lever, leaders can build nimble interpersonal networks across the company so that employees are better able to collaborate. A. unification B. people C. network D. social

Comparing your firm with all other firms in your industry assesses _________ performance. A. excessive B. consistent C. relative D. non-comparable

Competition among organizations is played out over time. As circumstances, capabilities, and strategies change, _________ techniques do not reveal the dynamics of the competitive environment. A. transactionalanalysis B. variableanalysis C. staticanalysis D. continuous

Developing human capital is essential to maintaining a competitive advantage in the current 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.

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

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

For an engineering services firm, ________________ provides inputs, the transformation process is the engineering itself, and innovative designs and practical solutions are the outputs: A. experimentation B. customer support C. research and development D. human resource management

General administration is sometimes viewed as only _______ but can be a powerful source of competitive advantage. A. income B. value C. overhead D. unimportant

German truck and trailer manufacturer, Schmitz Cargobull, mainly serves customers that are operators of truck or trailer fleets. What sets the company apart is its expertise in telematics (the integrated application of telecommunications data) to monitor the current state of any Schmitz Cargobull-produced trailer. This is an example of using ________ to enhance customer value and increase _______ position. A. sales; competitive B. operations;marketing C. information technology; competitive D. human resources;marketing

Historical comparisons provide information to managers about changes in the competitive position of a firm. Historical comparisons often are misleading A. iftheoverallstrategyofthefirmisthesame. B. if the firm shows constant growth. C. inperiodsofrecessionoreconomicboom. D. if the firm's stock is publicly traded

IP is characterized by __________ development costs and very ______ marginal costs. A. insignificant; low B. expensive; high C. significant; low D. insignificant; high

In an 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.

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.

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.

There are multiple advantages of e-teams. Which of the following is not an advantage? A. E-teams are less restricted by the geographic constraints that are placed on face-to-face teams. B. E-teams can be more flexible in responding to unanticipated work challenges and opportunities. C. Process losses result from identification and combination activities. D. E-teams can be effective in generating social capital.

Today, the loyalty of a knowledge worker 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

Two software engineers working together on a computer code share their _______ knowledge in order to create new knowledge. A. explicit B. theoretical C. tacit D. easily reproduced

Tying knowledge workers to a firm is part of the objective of the development of A. intellectual capital. B. explicit knowledge. C. social capital. D. human capital.

Unlike ______ assets, intellectual property can be stolen by simply broadcasting it. A. intangible B. hidden C. physical D. expensive

Using an idea does not prevent others from simultaneously using it for their own benefit. Typically, this is impossible with __________ assets. A. intangible B. strong C. physical D. flimsy

When a firm develops a knowledge asset, such as a process, pays for it and reuses it over and over at a very low cost, this adds ___________ for the firm. A. tacit knowledge B. little value C. a competitive advantage D. a recoverable loss

What is the term for an organization's ability to achieve lower costs relative to competitors through productivity and efficiency improvements, elimination of waste, and tight cost control? A) Marketing strategy B) Product differentiation C) Cost leadership D) Competitor differentiation

C) Cost leadership

Which of the strategic perspectives of the balanced scorecard focuses on a company's own operations that create value for customers that, in turn, help achieve financial objectives? A) Financial B) Customer C) Internal-business-process D) Learning-and-growth

C) Internal-business-process

True or False: The "task first" relationship with fellow employees, in which one's emotions and personal life are checked at the door, is becoming more common and essential with today's increased focus on efficiency.

False Page: 134

Can the Resource Be Imitated Easily?

Inimitability (difficulty in imitating) is a key to value creation because it constrains competition. If a resource is inimitable, then any profits generated are more likely to be sustainable. Having a resource that competitors can easily copy generates only temporary value.

the difference between the market value of the firm and the book value of the firm, including assets such as reputation, employee loyalty and commitment, customer relationships, company values, brand names, and the experience and skills of employees.

Intellectual capital

D: All the above

Intellectual capital is the difference between the market value and the book value of a firm. Intellectual capital can be increased by: A. developing costumer relationships B. attracting and retaining knowledgeable workers. C. developing a good brand image D. All of the above

Environmental monitoring deals with tracking changes in environmental trends that are often uncovered during the environmental scanning process

TRUE

Environmental scanning and competitor intelligence provide important inputs for forecasting activities.

TRUE

Establishing a customer service hotline to handle customer complaints would be considered a primary activity in value chain analysis

TRUE

Five forces analysis implicitly assumes a zero sum game, a perspective that can be short sighted

TRUE

Formulating strategy includes taking into consideration strategy at the business, international, and corporate levels. In addition managers must formulate effective entrepreneurial initiatives

TRUE

In value chain analysis, finance and accounting are considered part of a firms general administration

TRUE

Industries characterized by high economies of scale typically attract fewer new entrants

TRUE

Leverage ratios provide measures of a firms capacity to meet its long term financial obligations

TRUE

Porters five forces model helps to determine both the nature of competition in an industry and the industry's profit potential

TRUE

Primary activities contribute to the physical creation of a product or service, its sale and transfer to the buyer and its service after the sale

TRUE

Rivalry will be most intense when there is a lack of differentiation or switching costs

TRUE

Stockholders, employees and the community at large are among a firms stakeholders

TRUE

Strategic management consists of the analysis, decisions, and actions an organization undertakes in order to create and sustain competitive advantages.

TRUE

Strategic management includes strategy analysis, strategy formulation and strategy implementation.

TRUE

Strategic management recognizes the trade offs between effectiveness and effciency

TRUE

T/F Company strengths and weaknesses are tied to its stated goals and objectives.

TRUE

T/F Establishing a customer service hotline to handle customer complaints would be considered a primary activity in value-chain analysis

TRUE

T/F Frito-Lay uses crowdsourcing to make its Super Bowl ads. This is an example of a primary activity in the value chain

TRUE

T/F If a firm builds its strategy on a capability that cannot, by itself, create or sustain competitive advantage, it is wasting its time and resources

TRUE

T/F In conducting a SWOT analysis, a risk for strategists is that they rely on traditional definitions of their industry and competitive environment and therefore focus too narrowly on current competitors

TRUE

T/F In value-chain analysis, finance and accounting are considered part of the general administration of a firm

TRUE

T/F Primary activities contribute to the physical creation of a product or service, its sale and transfer to the buyer, and its service after the sale

TRUE

T/F Technology development is a much broader concept than research and development

TRUE

T/F The value-chain concept assumes that both primary and support activities are capable of producing value for customers.

TRUE

T/F Toyota paid a heavy price for its excessive emphasis on cost control. By focusing on one strength exclusively, it suffered severe losses. This is an example of the limitations of a SWOT analysis

TRUE

T/F: At times, the difference between manufacturing and service is in providing a customized solution rather than mass production, as is common in manufacturing

TRUE

T/F: Company reputation with customers, suppliers and other stakeholders is an intangible resource

TRUE

T/F: Dell lost its competitive advantage by 2009 in part because it placed its efforts on operational excellence to the exclusion of reinvention

TRUE

T/F: Examples of organizational capabilities are outstanding customer service, excellent product development capabilities, superb innovation processes, and flexibility in manufacturing processes

TRUE

Human capital and social capital are vital for superior firm performance. If a firm has 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) encouraging the sharing of ideas between employees in the firm. D) structuring the firm with rigid departmental and employee divisions.

C) encouraging the sharing of ideas between employees in the firm.

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) none of the above.

C) establish practices that will enhance employee retention.

T/F: FedEx employees take computer-based job competency tests every 6 to 12 months in order to identify areas of individual weakness and provide input to a computer database of employee skills. This is an example of a tangible resource

TRUE

An organization that is using the cost leadership approach would ________. A) incur costs for innovative R&D B) provide products at a higher cost than competitors C) focus on productivity through efficiency improvements D) bring products to market rapidly

C) focus on productivity through efficiency improvements

2. Toyota uses Just-in-time systems. These are considered part of which primary activity in the value chain? A) service B) operations C) inbound logistics D) outbound logistics

C) inbound logistics; Just-in-time (JIT) inventory systems, for example, were designed to achieve efficient inbound logistics. Toyota epitomizes JIT inventory systems, in which parts deliveries arrive at the assembly plants only hours before they are needed.

Which of the following focuses on these five factors: competitors, potential entrants to the market, equivalent products, bargaining power of customers, and bargaining power of suppliers? A) balanced scorecard B) product differentiation analysis C) industry analysis D) business process reengineering

C) industry analysis

Successful implementation of a cost leadership strategy will result in ________. A) large favorable growth and price-recovery components B) large favorable price-recovery and productivity components C) large favorable productivity and growth components D) only a large favorable growth component

C) large favorable productivity and growth components

The percentage of processes with real-time feedback would be a measure of which perspective? A) marketing B) customer C) learning and growth D) internal-business-process

C) learning and growth

The employee turnover rates is an example of the ________ measure of a balanced-scorecard. A) internal business process perspective B) customer perspective C) learning and growth perspective D) financial perspective

C) learning and growth perspective

The fundamental rethinking and redesign of business processes to achieve improvements in critical measures of performance, such as cost, quality, service, speed, and customer satisfaction is ________. A) directing B) controlling C) reengineering D) structuring

C) reengineering

When analyzing the change in operating income, the strategy component of price-recovery will increase when ________. A) capacity is reduced B) market share is increased C) selling prices are increased D) more units are sold

C) selling prices are increased

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

C) tacit; explicit

T/F: For the balanced scorecard implementation to be effective, a set of rules for employees that address continuous process improvement and the personal improvement of individual employees needs to be established so that employees buy-in to the change

TRUE

T/F: In considering the business from the customer perspective using the balanced scorecard, company performance is essential

TRUE

T/F: In considering the business from the innovation and learning perspective using the balanced scorecard, the ability of the firm to do well is more dependent on its intangible and tangible assets

TRUE

T/F: Modern plant and facilities as well as favorable manufacturing locations are tangible resources

TRUE

T/F: Porsche received a lot of negative feedback when it announced plans to release an SUV, but it went ahead anyway, and the Porsche Cayenne was a great success. This is an example of a peril of making decisions based on crowdsourcing

TRUE

T/F: Products and services that are difficult to imitate help firms sustain their profitability

TRUE

T/F: Strong brands are typically built through consistent, effective marketing, and companies need to weigh the potential for misbehaving customers to thwart their careful efforts

TRUE

T/F: Tangible resources are assets that are relatively easy to identify such as financial and physical assets

TRUE

T/F: The activities that may provide support only to one company may be critical to the primary value- adding activity of another firm

TRUE

T/F: The corporate culture at Southwest airlines is an example of causal ambiguity

TRUE

T/F: Though two teams could have different ages, functional backgrounds, experience, and so on, they could be strategically equivalent and thus substitutes for one another

TRUE

T/F: Two valuable firm resources (or two bundles of resources) are strategically equivalent when each one can be exploited separately to implement the same strategies

TRUE

Which component of strategy measures the reduction in costs attributable to a reduction in the quantity of inputs used in Year 2 relative to the quantity of inputs that would have been used in Year 1 to produce the Year 2 output? A) the growth component B) the price-recovery component C) the productivity component D) the cost leadership component

C) the productivity component

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

C) they want to keep highly mobile employees motivated and challenged.

When analyzing the change in operating income, the strategy component of productivity ________. A) calculations are similar to the sales-volume variance calculations B) compares the change in output price with the changes in input prices C) will report a large positive amount when a company has successfully pursued the cost leadership strategy D) isolates the change attributed solely to an increase in the quantity of units sold

C) will report a large positive amount when a company has successfully pursued the cost leadership strategy

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

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. mostly support activities but does have some impact on primary activities. C. only individual support activities. D. both individual primary and support activities and the entire value chain

If employees are working effectively in teams and sharing their knowledge and learning from each other, they will be ________ to add value to the firm and they also will be ________ to leave the organization, because of the loyalties and social ties that they develop over time. A. more likely; more likely B. less likely; more likely C. less likely; less likely D. more likely; less likely

In general, teams suffer process loss because of ____ cohesion, ___ trust among members, a lack of appropriate norms or standard operating procedures, or a lack of shared understanding among team members about their tasks. A. high; high B. low; high C. high; low D. low; low

In making the decision to enter the pharmaceutical industry, a company would not need to consider which of the following? A. historical comparisons B. comparisons with industry norms C. comparisons with key competitors D. comparisons with non-competitors

T/F: When evaluating the financial performance of a firm, it is important to compare the results with industry norms

TRUE

T/F: Amazon Prime is an example of a difficult to imitate capability that gives it competitive advantage over its rival

TRUE

Tangible resources are assets that are relatively easy to identify such as financial and physical assets

TRUE

Technology development is a much broader concept than research and development

TRUE

The internet heightens the threat of substitutes because it creates new ways to accomplish the same task

TRUE

The internet provides an electronic "staging area" for several forms of digital communications/

TRUE

The more attractive the price/performance ratio of substitute products, the more tightly it constraints an industry ability to charge high prices

TRUE

The same environmental trend can often have very different effects on firms within the same industry

TRUE

The same environmental trend or event may have a very different impact on different strategic groups within the same industry

TRUE

Value chain analysis assumes that a firms basic economic purpose is to create value and it is a useful framework for analyzing a firms strengths and weaknesses

TRUE

Value chain concept assumes that both primary and support activities are capable of producing value for customers

TRUE

products and services that are difficult to imitate help firms sustain their profitability

TRUE

Many companies use referrals by current employees as a source for new hiring and even monetarily reward them because 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; it is less expensive than the fees paid to headhunters.

QFQ, 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. leveraging organizational structure. D. developing human capital.

The Cisco Integrated Workforce Experience (IWE) platform makes recommendations based on all of the following except A. what you are doing. B. the role you are in. C. the choices of people like you. D. competitor choices.

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

The innovation and learning perspective of the balanced scorecard answers which of the following questions? A. How do customers see us? B. What must we excel at? C. How do we look to share holders? D. Can we continue to improve and create value?

To increase productivity, several key lessons were learned by top management at London-based International Power concerning email. Which is not in that list of lessons? A. Executives need to be taught to be more deliberate in their use of email. B. Executives need to set goals for reducing the number of messages sent. C. Executives need to provide weekly feedback. D. Executives need to eliminate email completely.

Top executives can use email effectively for all of the following except A. updates on company strategy. B. executive perspectives on key issues. C. overview of the executive work for the month. D. updates on corporate intelligence.

Toyota, the giant automaker, paid a heavy price for its ___________ emphasis on cost control. The resulting problems with quality and the negative publicity led to severe financial losses and an erosion of its reputation in many markets. A. minimal B. superficial C. low-budget D. excessive

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. Wal-Mart implemented a sophisticated information system that resulted in reduced inventory carrying costs and shortened customer response times. C. National Steel improved its efficiency by reducing the number of job classifications. D. Hewlett Packard has cut lead time from five days to one by employing JIT inventory management

Which of the following is a profitability ratio? A. current ratio B. total debt ratio C. total asset turnover D. return on equity

Which of the following is not a dynamic capability? A. the ability to sense and seize new opportunities B. the ability to generate new knowledge C. the ability to reconfigure existing assets D. the ability to submit to conventional industry and market wisdom

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

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

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, the Google 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.

With the _________ lever, the emphasis is on getting the right people to collaborate on the right projects. A. network B. unification C. social D. people

Many companies use referrals by current employees as a source for new hiring and even monetarily reward them because __________________. 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

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 an accurate expression of the economic value created per unit of a product sold? A. the sum of consumer surplus and producer surplus B. the difference between consumer's reservation price and firm's cost C. the sum of consumer surplus and firm profit D. the difference between the price charged and the firm's cost

Human capital and social capital are vital for superior firm performance. If a firm has strong human capital, the firm may exploit this by building social capital. This can be accomplished by _____. 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

Maintaining a competitive workforce is very challenging in the current 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

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

T/F In value-chain analysis, value is measured by the market value of the total stock outstanding of the company

FALSE

T/F Inbound logistics include all activities associated with transforming inputs into the final product form such as machining, packaging, assembly, equipment, testing, printing, and facility operations

FALSE

T/F One advantage of SWOT analysis is that it helps managers to identify strengths that are almost always sources of sustainable competitive advantages

FALSE

T/F Support activities provide support for primary activities, but not each other

FALSE

T/F The SWOT analysis can show managers how to achieve a competitive advantage

FALSE

T/F The strengths and capabilities of a firm are enough to enable it to achieve a competitive advantage in the marketplace

FALSE

T/F Top managers have learned not to rely on SWOT to stimulate self-reflection and group discussions about how to improve their firm and position for success

FALSE

T/F: Trade secrets are intangible resources

FALSE

T/F: A strength of the balanced scorecard is that it is very easy to implement and that there is little need for executive sponsorship

FALSE

T/F: A travel agent does not add value by creating an itinerary that includes transportation, accommodations, and activities that are customized to your budget and travel dates

FALSE

T/F: At Sephora.com, a customer service representative taking a phone call from a repeat customer has instant access to what shade of lipstick she likes best. This is an example of a procurement support activity in the value chain

FALSE

T/F: Campbell Soup uses electronic networks in order to improve the efficiency of outbound logistics. This is an example of relationships among activities within the firm and with other stakeholders that are part of the company expanded value chain

FALSE

T/F: Crowdsourcing has many benefits, including the example in which McDonalds set up a Twitter campaign to promote positive word of mouth which became a platform for people looking to bash the chain

FALSE

T/F: Effective strategic planning processes are intangible resources

FALSE

T/F: Employee exit cost is a factor that can increase employee bargaining power and help him or her appropriate profits of the firm

FALSE

T/F: Excellent customer performance results from processes, decisions, and actions that occur only in the marketing efforts of the firm

FALSE

T/F: Financial analysis provides an accurate way to assess the relative strengths of firms and can be used as a complete guide to study companies

FALSE

T/F: Financial resources such as cash and cash equivalents are intangible resources

FALSE

T/F: For the balanced scorecard to work, managers must articulate goals for five categories of customer concerns: time, quality, performance and service, cost, and design

FALSE

T/F: Harley-Davidson sells accessories, clothing, toys and motorcycles. They have a brand image in common which is a tangible resource

FALSE

T/F: Historical comparisons are most appropriate during periods of recession or economic boom

FALSE

T/F: Intangible resources of a firm refer to its capacity to deploy tangible resources over time and leverage those resources effectively

FALSE

T/F: Managers should focus their attention on interrelationships among value-chain activities within the firm, not on relationships among activities within the firm and other organizations

FALSE

T/F: Patents, copyrights, and trademarks are intangible resources

FALSE

T/F: People want to partner with you because they have heard you are a credible company built through a culture of trust. In a sense, being a great company to work for also makes you a great company to work with. This is an example of causal ambiguity

FALSE

T/F: Some leading edge companies are applying the prosumer concept. Here, firms team up with their suppliers and alliance partners to satisfy their customer needs

FALSE

T/F: Technip has developed intelligent pipes that can monitor and regulate the temperature throughout an oil pipeline. This is an example of a procurement support activity in the value chain

FALSE

T/F: The ability of a firm to do well from an innovation and learning perspective is most dependent on its tangible assets

FALSE

T/F: The balanced scorecard enables managers to evaluate their business from only two perspectives: customer and financial

FALSE

T/F: The price-earnings ratio is used to measure profitability

FALSE

T/F: The profit margin ratio is used to measure long-term solvencyThe profit margin ratio is used to measure long-term solvency

FALSE

T/F: The return on assets ratio is used to measure short-term solvency of the firm

FALSE

T/F: The total debt ratio is used to measure profitability

FALSE

T/F: To survive and prosper, managers must not make frequent changes to existing products and services, because it will confuse the customer

FALSE

T/F: Value-chain analysis can only be applied to manufacturing operations

FALSE

T/F: When using industry norms as a standard of comparison, managers must be sure that the firms used in the comparisons are representative of all sizes and strategies within the industry

FALSE

T/F: A meaningful ratio analysis need only include how ratios change over time

FALSE

The use of the strategic groups concept is generally not helpful in charting the future directions of firms strategies

FALSE

Value chain analysis can only be applied to manufacturing operations

FALSE

When using industry norms as a standard of comparison managers must be sure that the firms used in the comparison are representative of all sizes and strategies within the industry.

FALSE

the best firms always realize their intended strategy

FALSE

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?

The competence must help the business lose market position relative to its competition.

A useful approach to ensuring data reliability is for internal cross-functional teams or external auditors to conduct periodic audits of the processes used to collect the data.

True

According to Michael Porter, there is a tremendous allure to mergers and acquisitions. 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.

True

According to the text, effective e-teams identified group members with a proper balance of technical and interpersonal skills.

True

According to the text, for most of the twentieth century, most managerial efforts were directed toward the efficient allocation of labor and capital- the two traditional factors of production.

True

Acquisitions, according to research, usually result in value destruction rather than value creation.

True

An effective knowledge management system should include a common framework for managing knowledge and some way of validating and synthesizing new knowledge as it is acquired.

True

An internal labor market (to increase an employee's mobility within a firm) is one means of increasing employee retention.

True

An organization must align its performance measurement system to its vision and strategy and select meaningful measurements.

True

Attracting top talent is a challenge for many organizations. In the current economy, knowledge workers typically have limited numbers of employment opportunities.

True

Because many countries are investing in countries other than their own, each country is becoming less autonomous and more dependent.

True

Coca Cola and Caterpillar used first mover advantage in the building of their global presence.

True

Companies have found that referrals from their own employees are generally an effective approach to recruiting top talent.

True

Competitive advantage is affected by the rate of globalization in an industry.

True

Competitive advantage that is based solely on a focus strategy on a narrow competitive scope is not sufficient for assuring the sustainability of the strategy.

True

Confidentiality and security are critical in managing data, particularly with the increasing use of electronic data transfer.

True

Creation of new knowledge typically involves the continual interaction of explicit and tacit knowledge

True

Data accessibility empowers employees and encourages their participation in quality improvement efforts

True

Despite geographic or time separation of members, electronic teams can be very effective in generating social capital

True

Despite geographic or time separation of members, electronic teams can be very effective in generating social capital.

True

Employers are finding that cutting edge skills are evolving faster than universities can train people. True or False

True

Expanding the global presence of a firm automatically increases its scale of operations.

True

Financial measures of performance measurement in the Baldrige criteria are generally tracked by senior leadership to gauge overall organizational performance and are often used to determine incentive compensation for senior executives.

True

Firms such as Oracle, Google, and Genentech will tend to have a higher ratio of market value to book value than "industrial companies" such as International Paper and Nucor Steel.

True

From an individual's perspective, social networks deliver three unique advantages: private information, access to diverse skill sets, and power.

True

In 2012, Hewlett-Packard wrote off $9 billion of the $11 billion it paid for Autonomy, a software company that it purchased one year earlier. This is an example of a failed merger.

True

In technology intensive industries, the competitive advantages decrease over time.

True

In the current economy, reliance on the three traditional financial statements (income statement, balance sheet, and statement of cash flow) has decreased.

True

In the current economy, reliance on the three traditional financial statements (income statement, balance sheet, and statement of cash flow) has decreased. True or False

True

Intellectual property rights are not as easy to define and protect as property rights for physical assets (e.g., plant and equipment).

True

Intellectual property rights are not as easy to define and protect as property rights for physical assets (e.g., plant and equipment). True or False

True

Despite geographic or time separation of members, electronic teams are not very effective in generating social capital.

False

Developing and protecting social capital requires independence--that is, individuals must spend most of their time working individually.

False

Developing social capital is risky for an organization because social capital is specific to individuals and remains with the employee if he or she leaves the organization.

False

Diversification initiatives must be justified by the creation of value for employees.

False

Email is an effective means of communicating a wide variety of information and employees should use it extensively for personal reasons. True or False

False

Explicit knowledge is generally known to everyone in the firm and is not a critical concern of management.

False

Exporting is an expensive way to enter domestic markets.

False

Firms such as Oracle, Google, and Apple will tend to have a lower ratio of market value to book value than industrial companies such as Nucor Steel.

False

Google is one of the most prominent vendors for ERP software.

False

If a company focuses on a small number of value-chain activities, it can be lead to a pitfall of the overall cost leadership strategy.

False

In most effective evaluation and reward systems employees only receive evaluation and feedback from their immediate supervisor.

False

In social networks, in bridging relationships, one member is central to the communication flows in a group

False

In today's economy, reliance on the three traditional financial statements: income statement, balance sheet, and statement of cash flow, has increased

False

In value-chain analysis, primary activities include human resource management and procurement.

False

In value-chain analysis, research and development is a broader concept than technology development.

False

Intangible resources are not as difficult for competitors to imitate as tangible ones.

False

Intellectual property rights are easier to define and protect than property rights for physical assets (e.g., plant and equipment)

False

Intellectual property rights are easier to define and protect than property rights for physical assets (e.g., plant and equipment).

False

Knowledge workers are more loyal to their companies than traditional workers.

False

Leading indicators of a balanced scorecard represent long-term results.

False

Management innovations such as total quality, benchmarking, and business process reengineering can lead to sustainable competitive advantage.

False

Many firms facing a turnaround situation try to fix their situation by increasing the financial investment in administrative expenses and inventories.

False

Many leading companies look for creativity and flexibility in problem solving during the interview process. This helps a firm assess a potential employee's social capital.

False

Most experts agree that Dell has a strong and sustainable competitive advantage over its rivals in the personal computer industry.

False

Offshoring takes place when a firm decides to shift an activity that they were previously performing in a foreign location to a domestic location.

False

One of the challenges with globalization is determining how to meet the needs of customers at the same income level.

False

One potential downside of building social capital in an organization is "groupthink." This means everyone in the group thinks on his or her own and comes up with new ideas

False

Organizations that share quality, customer satisfaction, and financial performance results with its employees and customers often exhibit poor performance in comparison with organizations which do not share such information.

False

Performance reviews in an organization are usually conducted on a daily or weekly basis for long-term control decisions, and periodically throughout the year for short-term decisions and improvement.

False

Physical and financial assets have become more important than knowledge assets in many organizations.

False

Related diversification enables a firm to benefit from economies of scope, which are cost increases that are derived from leveraging core competencies.

False

Related diversification enables a firm to benefit from vertical relationships across different businesses in the diversified corporation by leveraging core competencies and sharing activities.

False

Restructuring requires the corporate office to find either poorly performing firms with unrealized potential or firms in industries on the threshold of negative change.

False

SWOT analysis has been criticized as having too broad a focus when examining the external environment and being too static for competitive situations that are actually played out over time.

False

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 using related diversification to achieve value by leverage core competencies to achieve economies of scope.

False

Since electronic teams (e-teams) seldom meet face-to-face, it is not important for them to be concerned with how to combine individual contributions effectively.

False

Social capital is based on the skills and abilities of an individual employee, not on the network of relationships within a firm.

False

Social capital is found in the knowledge, skills, and abilities of an individual.

False

Strategic management involves the recognition that both effectiveness and efficiency must be fully satisfied.

False

Technical skills are a necessary and sufficient condition for hiring an employee.

False

The Michael Porter Diamond of National Advantage is a framework that explains why countries foster successful multinational corporations based on factor endowments; demand conditions; related and nonsupporting industries; and firm strategy, structure, and rivalry.

False

The Toyota Research Institute is located in three major academic towns because future employees prefer to stay close to their universities for research. True or False

False

The difference between the market value and book value of a firm is its social capital

False

The importance of human capital has decreased in recent years. For this reason, many firms have placed greater attention on attracting, but not on developing or retaining, talent.

False

The most effective method of improving a firm's retention of top talent is to intensify its hiring efforts

False

The only stakeholders that matter for an organization are the shareholders.

False

The quality of information can be improved by capturing data multiple times and as away from the origin of the data as possible

False

The role of technology in the recruitment of human capital has lowered individuals' reliance on the use of social networks.

False

The task first relationship with fellow employees, in which emotions and personal life are checked at the door, is becoming more common and essential with the current increased focus on efficiency.

False

The task-first relationship with fellow employees, in which emotions and personal life are checked at the door, is becoming more common and essential with the current increased focus on efficiency. True or False

False

The text suggests that talented professionals are typically most concerned about financial rewards. Money is the top reason why such employees take and leave jobs.

False

The three generic strategies presented by Michael Porter can be shown on two dimensions: strategic target and product life cycle.

False

Today, it is essential for fellow employees to check their emotions and personal life at the door in order for a company to be efficient.

False

When leaving a job, desirable knowledge employees are most likely to find new employment on Internet career sites and go alone to work for complete strangers.

False

When leaving a job, desirable knowledge employees are most likely to find new employment on Internet career sites and go alone to work for complete strangers. True or False

False

Within a worldwide market, the most effective strategies are purely multidomestic or purely global.

False

Workforces, which reflect demographic changes, will become more homogeneous (or less varied) over the next few decades with regard to gender, race, ethnicity, and nationality.

False

Interlinking is the term that describes the quantitative modeling of cause-and-effect relationships between performance measures, such as the customer satisfaction and product quality or employee performance.

True

Leading organizations continually improve their performance measurement systems, staying abreast of new techniques.

True

Limiting the time that employees are permitted to spend using email can reduce workplace distraction for employees.

True

Measurement reliability in manufacturing demands careful attention to metrology, the science of measurement.

True

MetLife was able to dramatically expand its global footprint by acquiring Alico, a global player in the insurance business from AIG in 2010 when AIG was in financial distress. This shows that not all diversification moves erode performance.

True

Once a knowledge asset (e.g., software) is developed and and paid for it can be used many times at very low cost as long as it doesn't have to be substantially modified each time.

True

One of the most important elements in a good employee is his or her attitude. Firms should follow the adage "hire for attitude, train for skill."

True

One way the Internet and digital technologies are creating opportunities for firms with differentiation strategies is by improving the response to customer wishes through mass customization.

True

Setting targets for each performance measure provides the basis for strategy deployment.

True

Since the use of e-mail can be distracting to employees, some firms limit the time that employees spend using email.

True

Social capital is based on the network of relationships within a firm, not in the skills and abilities of an individual employee

True

Social capital is the friendships and working relationships that are established within the firm. When employees think of themselves as free agents, it helps tie them to the firm.

True

Social network analysis can be used to help identify groups or clusters of individuals that comprise the network, individuals who link the clusters, and other network memebers.

True

The French automobile maker, Renault, has designed an ultra-low-cost platform in order to improve its competitive position through cost leadership.

True

The idea that organizations are not only accountable to stockholders but also to the community-at-large is known as social responsibility.

True

The prosumer concept in value-chain analysis is promising, because it has the potential to generate ideas and lower costs for firms and to create greater satisfaction for customers.

True

The purpose of the balanced scorecard is "to translate strategy into measures that uniquely communicate your vision to the organization."

True

The textbook suggests that a new conception of capitalism redefines the purpose of the corporation as creating shared value, not just profit.

True

The transfer of knowledge within organizations and the identification and sharing of best practices often set high-performing organizations apart from the rest.

True

The use of email can be distracting to employees. Some firms limit the time that employees spend using email.

True

Typically, joint ventures involve more control and risk than franchising.

True

Vision statements are less specific than strategic objectives.

True

When a hostile firm buys a large block of outstanding target company stock and the target company management feels that a tender offer is impending, they offer to buy the stock back from the hostile company at a higher price than the unfriendly company paid for it. This is known as greenmail.

True

With unrelated diversification, potential benefits can be gained from vertical or hierarchical relationships; that is, the creation of synergies from the interaction of the corporate office with the individual business units.

True

Workforce-focused outcomes used for performance measurement in the Baldrige criteria show how well the organization has created and maintained a productive, engaging, and caring work environment.

True

True or False: Despite geographic or time separation of members, electronic teams can be very effective in generating social capital.

True Page: 146

True or False: SWOT analysis has been criticized as having too narrow a focus when examining the external environment and being too static for competitive situations that are actually played out over time.

True Page: 82

True or False: The "prosumer" concept is promising because it has the potential to generate ideas and lower costs for firms and to create greater satisfaction for customers.

True Page: 90

True or False: Intangible resources are much more difficult for competitors to imitate than are tangible ones.

True Page: 95

Retaining Human Capital

________________Human Capital These mechanisms must prevent the transfer of valuable and sensitive information outside the organization: -Help employees identify with an organization's mission and values -Provide challenging work and a stimulating environment Offer financial and nonfinancial rewards & incentives -Money is not the most important reason why people take or leave jobs

Attracting Human Capital

_________________ Human Capital "Hire for attitude, train for skill" Emphasis on: -General knowledge & experience -Social skills -Values -Beliefs -Attitudes

Developing Human Capital

____________________ Human Capital Training and development must take place at all levels of the organization - Requires the active involvement of leaders at all levels - Includes mentoring & sponsoring lower-level employees - Monitoring progress & tracking development - Evaluating human capital

Causal ambiguity

a characteristic of a firm's resources that is costly to imitate because a competitor cannot determine what the resource is and/or how it can be re-created.

causal ambiguity

a characteristic of a firm's resources that is costly to imitate because a competitor cannot determine what the resources is and/or how it can be recreated

social complexity

a characteristic of a firm's resources that is costly to imitate because the social engineering required is beyond the capability of competitors, including interpersonal relations among managers, organizational culture, and reputation with suppliers and customers

path dependency

a characteristic of resources that is developed and/or accumulated through a unique series of events

Path dependency

a characteristic of resources that is developed and/or accumulated through a unique series of events.

a competitive advantage

_____ balanced scorecard is the only version of performance measurement systems that have emerged as organizations recognized the need for a broad set of performance measures that provide a comprehensive view of business performance. a. Kaplan and Nortan's b. Raytheon's c. Deming's and Juran's d. Schneiderman's

a. Kaplan and Nortan's

Marketing and sales

activities associated with purchases of products and services by end users and the inducements used to get them to make purchases.

technology development

activities associated with the development of new knowledge that is applied to the firm's operations

Technology development

activities associated with the development of new knowledge that is applied to the firm's operations.

Human resource management

activities involved in the recruiting, hiring, training, development and compensation of all types of personnel.

human resource management

activities involved in the recruiting, hiring, training, development, and compensation of all types of personnel

support activities

activities of the value chain that either add value by themselves or add value through important relationships with both primary activities and other support activities; including procurement, technology development, human resource management, and general administration

Support activities

General adminstration

consists of a number of activities, including general management, planning, finance, accounting, legal and government affairs, quality management, and info systems administration (unlike other support activities) typically support the entire value chain and not individual activities Although general administration is sometimes viewed only as overhead, it can be a powerful source of competitive advantage In a telephone operating company, for example, negotiating and maintaining ongoing relations with regulatory bodies can be among the most important activities for competitive advantage. Also, in some industries top management plays a vital role in dealing with important buyers

Human resource management

consists of activities involved in the recruiting, hiring, training, development and compensation of all types of personnel it supports both individual primary and support activities (e.g. hiring of engineers and scientist) and the entire value chain (e.g. negotiations with labor unions)

The management of intellectual property involves all of the following EXCEPT ______.

converting coded knowledge to tacit knowledge

The management of intellectual property involves all the following except Multiple Choice · converting coded knowledge to tacit knowledge. · copyrights and trademark. · patents. · contracts with confidentiality and noncompete clauses.

converting coded knowledge to tacit knowledge.

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

converting explicit knowledge to tacit knowledge

The management of intellectual property involves all of the following except

converting explicit knowledge to tactic knowledge

social complexity

costly to imitate bc the social engineering required is beyond the capability of competitors, including interpersonal relations among managers, organizational culture, and reputation with suppliers and customers

crowdsourcing

Which of the following measures of the Baldrige criteria of performance measurement includes revenue, return on equity, return on investment, and operating profit? a. Workforce focused outcomes b. Leadership outcomes c. Governance outcomes d. Financial outcomes

d. Financial outcomes

Which of the following perspectives of the balanced scorecard includes profitability, revenue growth, return on investment, economic value added (EVA), and shareholder value? a. Internal perspective b. Learning perspective c. Customer perspective d. Financial perspective

d. Financial perspective

Which of the following analytical approach or technology is most likely to be used for data mining? a. Histogram b. Pareto diagram c. Quincunx experiment d. Fuzzy logic

d. Fuzzy logic

_____ systems allow organizations to share databases in a networking environment and store and process key data in a unique database, and distribute it to a large group of users. a. Juran's quality trilogy b. Quincunx experimental c. The balanced scorecard d. Enterprise resource planning

d. Enterprise resource planning

d. Financial outcomes

d. Financial perspective

developing human capital

Added insight and cultural sensitivity, and heterogeneity in decision making and problem solving are some of the arguments supporting ________ in the workplace.

diversity

Added insight and cultural sensitivity, and heterogeneity in decision making and problem solving are some of the arguments supporting ________ in the workplace. Multiple Choice · role playing · diversity · social network analysis · brainstorming

diversity

Added insight and cultural sensitivity, and heterogeneity in decision-making and problem-solving are some of the arguments supporting ________ in the workplace.

diversity

Added insight and cultural sensitivity, and heterogeneity in decision-making and problem-solving are some of the arguments supporting ________ in the workplace.

diversity Page: 136

Teams that complete tasks primarily through e-mail communication are called ___________.

electronic teams

a team of individuals that completes tasks primarily through e-mail communication.

electronic teams

London-based International Power increased firm efficiency by using all but which of the following? A. forwarding email messages only when strictly necessary B. limiting the email message recipient list C. using the telephone D. eliminating email communication

eliminating email communication

Another example of social relationships causing human capital mobility is the _______ of talent from an organization to form __________. A. stability; bail-outs B. emigration; bail-outs C. relocation; new business units D. emigration; start-up ventures

emigration; start-up ventures

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

encouraging the sharing of ideas between employees in the firm.

Human capital and social capital are vital for superior firm performance. If a firm has strong human capital, the firm may exploit this by building social capital. This can be accomplished by 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

encouraging the sharing of ideas between employees in the firm.

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:

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

establish practices that will enhance employee retention

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. keep employees in the same position forever. C. refrain from training individual employees. D. establish practices that will enhance employee retention

establish practices that will enhance employee retention.

Ratio analysis can be made more meaningful in all of the following ways EXCEPT by __________.

focusing more on long-term solvency instead of short-term solvency

Ratio analysis can be made more meaningful in all the following ways EXCEPT by

focusing more on long-term solvency than on short-term solvency.

strategic resources

for a resource to provide a firm w/ the potential for a sustainable competitive advantage it must have 4 attributes: 1. valuable 2. rare 3. costly to imitate 4. costly to substitute/no strategically equivalent substitutes

General administration

general management, planning, finance, accounting, legal and government affairs, quality management, and information systems; activities that support the entire value chain and not individual activities.

general administration

general management, planning, finance, accounting, legal and government affairs, quality management,and information systems; activities that support the entire value chain and not individual activities

Multinational firms are constantly faced with the dilemma of choosing between _______ and ___________.

global adaptation, local integration

Knowledge workers often exhibit __________ loyalties to their colleagues and their profession relative to their employing organization. A. fewer B. less favorable C. no D. greater

greater

Advantages of effective social networks for career success include all of the following except:

greater redundancy in knowledge sources.

In order to fully leverage the talents of the best and brightest employees, a firm should be concerned with Multiple Choice · rewards, training, and customer support. · hiring, retention, and training. · hiring, firing, and redistribution. · rewards, training, and customer support.

hiring, retention, and training.

types of capital

human and social

human capital; knowledge

Bridging relationships relationships

in a social network that connect otherwise disconnected people.

Potential issues with the competitive advantage framework

inability to respond to market volatility (not being able to adapt to a market shift) focus on "winning" (not seeing competitors as potential collaborators" success breeding failure (becoming so good at what it is, it stops being valued by the market, people might want something different)

Just-in-time systems are considered part of which primary activity in the value chain?

inbound logistics

Five primary activites

inbound logistics operations outbound logistics marketing and sales service contribute to the physical creation of the product or service, its sales and transfer to the buyer, and its service after the sale

Operations

includes all activities associated with transforming inputs into the final product form, such as machining, packaging, assembling, testing, printing, and facility operations

Maintaining a competitive workforce is very challenging in today's economy. The role of evaluating human capital, in recent years, has

increased

Advantages of effective social networks for career success include all of the following EXCEPT ______.

increased redundancy in knowledge sources

Advantages of effective social networks for career success include all the following except

increased redundancy in knowledge sources

Advantages of effective social networks for career success include all the following except Multiple Choice · access to diverse skill sets. · greater power. · increased redundancy in knowledge sources. · access to private information.

increased redundancy in knowledge sources.

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

increased.

The Internet is lowering transaction costs for several reasons. Which is not one of those reasons?

increasing the number of transactions

In the balanced scorecard, cycle time, employee skills, and productivity are part of what perspective?

internal perspective Page: 108

Outbound logistics

is associated with collecting, storing, and distributing the product or service to buyers these activities include finished goods, warehousing, material handling, delivery vehicle operations, order processing, and scheduling

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

knowledge

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

knowledge

When an organization tries to improve cycle times in a manufacturing process, it finds far more value in problem solving shaped by the diverse experiences, perspectives, and learning of a tightly knit team than in a training manual alone. SAP uses these _________ flows to gain competitive advantage. A. knowledge stocks B. knowledge assessments C. knowledge D. tacit

knowledge

Software algorithms are a form of _____________ that, once developed and paid for, can be reused many times at a very low cost. A. tacit asset B. intangible asset C. knowledge asset D. social asset

knowledge asset

explicit knowledge

knowledge that is codified, documented, easily reproduced, and widely distributed

Explicit knowledge

knowledge that is codified, documented, easily reproduced, and widely distributed.

tacit knowledge

knowledge that is in the minds of employees and is based on their experiences and backgrounds

Tacit knowledge

knowledge that is in the minds of employees and is based on their experiences and backgrounds.

Corporate restructuring includes capital and asset restructuring as well as ________.

management restructuring

may or may not be beneficial to a firm

employee exit costs

may tend to reduce an employee's bargaining power an individual may face high personal costs when leaving the organization, thus that individual's threat of leaving may not be credible

customer perspective

measures of firm performance that indicate how well firms are satisfying customers' expectations.

Internal business perspective

measures of firm performance that indicate how well firms' internal processes, decisions and actions are contributing to customer satisfaction.

internal business perspective

measures of firm performance that indicate how well firms' internal processes, decisions, and actions are contributing to customer satisfaction

financial perspective

measures of firms' financial performance that indicate how well strategy, implementation and execution are contributing bottom-line improvement

Financial perspective

measures of firms' financial performance that indicate how well strategy, implementation and execution are contributing bottom-line improvement.

business model

method and set of assumptions that explain how a business creates value and earns profits in a competitive environment

network lever

method for making people more willing to collaborate by building nimble interpersonal networks across the company.

unification lever

method for making people more willing to collaborate by crafting compelling common goals articulating a strong value of cross-company teamwork, and encouraging collaboration in order to send strong signals to lift people's sights beyond their narrow interests towards a common goal.

People lever

method for making people more willing to collaborate by getting the right people to work on the right projects.

more likely; less likely

Intangible resources

much more difficult for competitors and for a firm's own manager, to account for or imitate typically embedded in unique routines and practices that have evolved and accumulated over time. these include: human resources (e.g., experience and capability of employees, trust, effectiveness of work teams, managerial skills), innovation resources (e.g., technical and scientific expertise, ideas), and reputation resources (e.g., brand name, reputation with suppliers for fairness and with customers for reliability and product quality). A firm's culture may also be a resource that provides competitive advantage.

Elements of a multidomestic strategy may facilitate the competitive advantage of _________ by decreasing shipping and transportation costs inherent in local production.

multidomestic strategy

Return on equity

net income / total stockholder equity =

By using the ___________ lever, leaders can build nimble interpersonal networks across the company so that employees are better able to collaborate. A. unification B. people C. network D. social

network

method for making people more willing to collaborate by building nimble interpersonal networks across the company.

network lever

adopt effective retention strategies

attracting and retaining human capital is a challenge for many firms today.Firms experiencing high turnover should

adopt effective retention strategies

Social network analysis

analysis of the pattern of social interactions among individuals.

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

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

becoming more efficient in operational processes.

_____ of product and service performance and customer indicators is a critical management tool for defining and focusing on key quality and customer requirements, identifying product and service differentiators in the marketplace, and determining cause-effect relationships between product and service attributes and measures of customer satisfaction and loyalty. a. Regression analysis b. Benchmarking c. Correlation analysis d. Quincunx experimentation

c. Correlation analysis

Which of the following perspectives of the balanced scorecard include service levels, satisfaction ratings, and repeat business? a. Internal perspective b. Financial perspective c. Customer perspective d. Innovation perspective

c. Customer perspective

_____ knowledge includes information stored in documents or other forms of media such as databases, policies and procedures, and technical drawings. a. Tacit b. Allusive c. Explicit d. Indirect

c. Explicit

Which of the following perspectives of the balanced scorecard includes intellectual assets, employee satisfaction, market innovation, and skills development? a. Financial and internal perspective b. Internal perspective c. Innovation and learning perspective d. Customer perspective

c. Innovation and learning perspective

_____ is the term that describes the quantitative modeling of cause-and-effect relationships between performance measures, such as the customer satisfaction and product quality or employee performance. a. Programming b. Mining c. Interlinking d. Enterprise resource planning

c. Interlinking

Which of the following perspectives of the balanced scorecard includes such measures as quality levels, productivity, cycle time, and cost? a. Innovation perspective b. Customer perspective c. Internal perspective d. Financial perspective

c. Internal perspective

_____ involves the process of identifying, capturing, organizing, and using knowledge assets to create and sustain competitive advantage. a. Knowledge mining b. Suboptimization c. Knowledge management d. Lean production

c. Knowledge management

_____ involves the discovery, learning, creation, and reuse of knowledge that eventually becomes intellectual capital—knowledge that can be converted into value and profits. a. Knowledge costing b. Knowledge internationalization c. Rapid knowledge transfer d. Knowledge interlinking

c. Rapid knowledge transfer

_____ knowledge is information that is formed around intangible factors resulting from an organization's or individual's experience, and is content-specific. a. Lucid b. Definitive c. Tacit d. Explicit

c. Tacit

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

closure

name 2 types of social network analysis

closure relationships, bridging relationships

6. Sales and engineering departments often have whose members who interact with their peers rather than across groups. This is best described as ________ in social network analysis. A) a structural hole B) closure within the departments and a structural hole between them C) a bridging relationship D) closure

closure within the departments and a structural hole between them

Sales and engineering departments are a classic example of two groups whose members traditionally interact with their peers rather than across groups. This is best described as ________ in social network analysis. Multiple Choice · a bridging relationship · closure within the departments and a structural hole between them · a structural hole · closure across departments and a structural hole between them

closure within the departments and a structural hole between them

Sales and engineering departments often have whose members who interact with their peers rather than across groups. This is best described as ________ in social network analysis.

closure within the departments and a structural hole between them

closure within the departments and a structural hole between them Page: 140

Interrelationships

collaborative and strategic exchange relationships between value-chain activities either (a) within firms or (b) between firms. Strategic exchange relationships involve exchange of resources such as information, people, technology, or money that contribute to the success of the firm.

interrelationships

collaborative and strategic exchange relationships between value-chain activities either within or between firms; strategic exchange relationships involve exchange of resources such as information, people, technology, or money that contribute to the success of the firm

outbound logistics

collecting storing, and distributing the product or service to buyers

Outbound logistics

collecting, storing, and distributing the product or service to buyers.

communicate information efficiently

The resource-based view of the firm suggests that the firm's __________ are due to its endowment of strategic resources that are valuable, rare, costly to imitate, and costly to substitute.

competitive advantages

competitor choices.

Effective leaders can choose a mix of three levers. When motivation is the problem, they can use the ___________ lever, wherein they craft compelling common goals, articulate a strong value of crosscompany teamwork, and encourage collaboration in order to send strong signals to lift individual sights beyond their narrow interests toward a common goal. A. T-shaped management B. people C. network D. unification

unification

5th characteristic of imitability

unique historical conditions: created in the past, now hard to recreate ex ante limits to competition foresight luck

use a pre-interview quiz or "bozo filter" (e.g., Cooper Software).

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 emails exchanged by the members of the team. This is an example of A. inefficient use of information management. B. using explicit knowledge. C. using tacit knowledge. D. using replicated knowledge

using explicit knowledge.

Procurement

refers to the function of purchasing inputs used in the firm's value chain, not to the purchased inputs themselves purchased inputs include raw materials, supplies, and other consumable items as well as assets such as machinery, laboratory equipment, office equipment, and buildings

refers to the process of gathering info and identifying purchase options internet has enhanced both the speed of info gathering and the breadth of info that can be accessed

An individual who uses the contacts they develop to pursue their own interests and agendas that may be inconsistent with the organization objectives is one potential downside of

social capital

An individual who uses the contacts they develop to pursue their own interests and agendas that may be inconsistent with the organization objectives is one potential downside of __________.

social capital

The network of relationships that individuals have throughout the organization is known as A. human capital. B. social capital. C. intellectual capital. D. tacit knowledge

social capital

intellectual capital

the difference between the market value of the firm and the book value of the firm, includes assets such as reputation, employee loyalty and commitment, customer relationships, company values, brand names, and the experience and skills of employees

T/F: In value-chain analysis, value is measured by total revenue.

true

T/F: The prosumer concept in value-chain analysis is promising because it has the potential to generate ideas and lower costs for firms and to create greater satisfaction for customers.

true

8. Limiting the time that employees are permitted to spend using email can reduce workplace distraction for employees. A) True B) False

true (E-mail can become a problem when employees use it extensively for personal reasons. Scott Dockter, CEO of PBD Worldwide Fulfillment Services in Alpharetta, Georgia, launched a no e-mail Friday initiative in order to curb what he felt was excessive e-mail use in his firm.)

1. Attracting top talent is a challenge for many organizations. In the current economy, knowledge workers typically have limited numbers of employment opportunities. A) True B) False

true (One of the most important trends that managers must consider is the significance of the knowledge worker in today's economy. Managers must both recognize the importance of top talent and provide mechanisms to leverage human capital to innovate and, in the end, develop products and services that create value.)

5. Social capital is the friendships and working relationships that are established within the firm. When employees think of themselves as free agents, it helps tie them to the firm. A) True B) False

true (the development of social capital (that is, the friendships and working relationships among talented individuals) gains importance when employees consider themselves as free agents, because it helps tie knowledge workers to a given firm.)

Human capital includes

An individual's capabilities, knowledge, and skills.

Magic Corporation manufactures water toys. It plans to grow by producing high-quality water toys that are delivered in a timely manner. There are a number of other manufacturers who produce similar water toys. Magic believes that continuously improving its manufacturing processes and re-engineering processes to downsize and eliminate excess capacity are critical to implementing its strategy. Which of the following best describes Magic's strategy? A) product differentiation B) product leadership C) cost differentiation D) cost leadership

D) cost leadership

In an effective balanced scorecard, ________. A) net income serves as the best indicator for the hard-to measure long-run operational performance B) the sales budget serves as one of the leading indicator for the hard-to measure short-run financial performance C) the sales budget serves as a leading indicator for the hard-to measure short-run nonfinancial performance D) customer satisfaction serves as one of the leading indicator for the hard-to measure long-run financial performance such as the likelihood of higher sales and income

D) customer satisfaction serves as one of the leading indicator for the hard-to measure long-run financial performance such as the likelihood of higher sales and income

The gross margin percentage is an example of the ________ measure of a balanced-scorecard. A) internal business process perspective B) customer perspective C) learning and growth perspective D) financial perspective

D) financial perspective

Which of the following efforts would most likely yield the greatest re-engineering benefits? A) focusing on a single activity to determine if it is necessary B) decreasing quantity of output produced to increase total factor productivity C) increasing costs of all inputs used to increase total factor productivity D) focusing on entire processes and elimination of unnecessary activities and task

D) focusing on entire processes and elimination of unnecessary activities and task

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) low upfront costs and high variable costs. D) high upfront costs and low variable costs.

D) high upfront costs and low variable costs.

Engineered costs ________. A) have a no repetitive relationship with output B) have no measurable cause-and-effect relationship between output and resources used C) include research and development and human resource costs D) include a high level of certainty

D) include a high level of certainty

Eliminating excess capacity is an initiative to achieve the ________ perspective under a balanced scorecard. A) marketing B) customer C) learning and growth D) internal-business-process

D) internal-business-process

When analyzing the change in operating income, the strategy component of growth ________. A) calculations are similar to the selling-price variance calculations B) isolates the change attributed solely to an increase in market share C) isolates the change attributed solely to an increase in industry growth D) isolates the change attributed solely to an increase in the quantity of units sold

D) isolates the change attributed solely to an increase in the quantity of units sold

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) financial management. D) knowledge.

D) knowledge.

A ________ is a diagram that describes how an organization creates value by connecting strategic objectives in explicit cause-and-effect relationships with each other in the balanced scorecard perspectives. A) value diagram B) balanced scoreboard C) strategic scorecard D) strategy map

D) strategy map

Which of the following is not correct about the balanced scorecard? A) profits and value created for shareholders are perspectives revealed on a balance scorecard B) nonfinancial and operational indicators are reported on a balance scorecard C) the balanced scorecard reveals information about the success of the company in its target market D) the balance scorecard increases managements emphasis on short-term results

D) the balance scorecard increases managements emphasis on short-term results

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) at the employees themselves. D) throughout the firm at all levels.

D) throughout the firm at all levels.

Social capital has downsides. Which of the following is a downside? 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.

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

Knowledge-based resources tend to be more ______ in nature and therefore they are ________ difficult to protect against loss (i.e., the individual quitting the organization) than other types of capital, such as equipment, machinery, and land. A. explicit; less B. explicitly; more C. tacit; less D. tacit; more

D. tacit; more

Which of the following firms would you expect to have the highest ratio of market value to book value? A. Apple B. General Motors C. Intel D. Nucor

Apple

What is the difference between average and marginal tax rates? Which should we use when making financial decisions?

Average tax rates are the tax bills/taxable income. Marginal Tax rates are the percentage paid on the next dollar earned Marginal tax rates are used for financial decisions.

A travel agent adds value by creating an itinerary that includes transportation, accommodations, and activities that are customized to your budget and travel dates. In terms of the value chain analysis, this is an example of a ____________ organization. A. retail B. service C. manufacturing D. travel

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

Access Health, a call-in medical center, uses technology to capture and share knowledge. When someone calls the center, a registered nurse uses the company clinical decision architecture to assess the caller symptoms, rule out possible conditions, and recommend a home remedy, doctor visit, or trip to the emergency room. This is an example of using A. tacit knowledge. B. a knowledge asset. C. a non-codified asset. D. groupthink.

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. attracting and retaining knowledgeable workers. C. decreasing labor costs. D. increasing the turnover of employees.

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

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

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

Creativity and problem solving ability are considered to be part of _________ capital. A. physical B. human C. social D. emotional

Dynamic capabilities include ______ development, alliances, and acquisitions. A. after-market B. product C. idea D. company

Focusing too narrowly on current customers, technologies, and competitors can lead to a failure to notice important changes on the periphery of their environment that may trigger the need to redefine industry boundaries and identify a whole new set of competitive relationships. This is a result of relying A. on traditional definitions of all industries and competitive environments. B. on traditional definitions of the relevant industry and competitive environment. C. solelyonintuition. D. on a superficial evaluation of the relevant industry and competitive environment

If managers do not recognize from the beginning that the balanced scorecard is not a _________ and fail to commit to it long term, the organization will be disappointed. A. panacea B. quick fix C. marketing ploy D. cheap solution

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

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

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

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

Managing a knowledge intensive workforce is very challenging. The best way for a firm to manage its 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.

Which of the following is an IP-heavy industry? A. automobile sales B. telecommunications C. contract manufacturing D. retailing

____________ includes creativity and problem solving ability. A) Physical capital B) Human capital C) Social capital D) Emotional capital

B) Human capital

When firms invest in individual employee's abilities and skills, they are developing ____________ within the firm. A) physical capital B) human capital C) trust D) social capital

B) human capital

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

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

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

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

B. tacit; explicit

Many successful firms use internal labor markets. The most important reason for doing this is _____. 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

In assessing its primary activities, an airline would examine what?

Baggage Handeling

Best Fit Club, a chain of gyms and spas, requires its customers to pay a quarterly or an annual fee to use its services. Irrespective of whether they frequently use the services during the payment period or not, members have to pay in advance. Which of the following business models does this best illustrate? A. razor-razor-blade B. pay-as-you-go C. subscription-based D. freemium

in a social network that connect otherwise disconnected people

Bridging relationships

Software algorithms are a form of _____________ that, once developed and paid for, can be reused many times at a very low cost. A. tacit asset B. intangible asset C. knowledge asset D. social asset

Which of the following groups generally is charged with creating value through the process of organizing, coordinating, and leveraging employees as well as other forms of capital such as plant, equipment, and financial capital? A. unions B. boards of directors C. managers D. stakeholders

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

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

With the total performance indicators in place at Sears, it can evaluate if a single store improves its employee attitude by 5 percent and therefore predict with confidence that if the revenue growth in the district as a whole is 5 percent, the revenue growth in this particular store would be 5.5 percent. This is an example of the _______ perspective of the balanced scorecard. A. customer B. internal business C. financial D. innovation and learning

__________ among organizations is played out over time. A. Negotiation B. Sustainability C. Competition D. Learning

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

___________ 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. Inbound logistics C. Outbound logistics D. Operations

A company's balanced scorecard measures yield, order-delivery time, cycle time, and errors as part of which of the following perspectives? A) Financial B) Customer C) Internal-business-process D) Learning-and-growth

C) Internal-business-process

Which of the following statements is a benefit of measuring environmental and social performance? A) It limits the number of performance measures, identifying only the most critical ones. B) It helps to communicate the strategy to all members of the organization. C) It enhances the identification of cause-and-effect relationships to evaluate benefits. D) It uses financial measures to serve as leading indicators of future nonfinancial performance.

C) It enhances the identification of cause-and-effect relationships to evaluate benefits.

Direct material cost is an example of ________. A) conversion costs B) discretionary costs C) engineered costs D) downsized costs

C) engineered 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 turnterm-4over of employees

C. attracting and retaining knowledgeable workers

In social network analysis, groups can become too insular and fail to share what they have learned with people outside the group. This is a result of __________. A. bridging relationships B. intellect C. closure D. diverse knowledge

C. closure

C. decreased

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

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

C. direct reports

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

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

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

The least effective way to retain human capital is to _________. 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

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. The social capital of a firm 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

Social network analysis is helpful because the configuration of the group member 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

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.

Closure & Bridging Relationships

CLOSURE RELATIONSHIPS: The degree to which all members of the social network have relationships with other group members. BRIDGING RELATIONSHIPS: Relationships in a social network that connect otherwise disconnected people. BOTH closure and bridging relationships have important implications for the effective flow of information in organizations and for the management of knowledge. Through closure, group members develop strong relationships with each other, high levels of trust, and greater solidarity. On the other hand, employees who bridge disconnected people tend to receive timely, diverse information because of their access to a wide range of heterogeneous information flows. Bridging relationships involve structural holes, otherwise known as, social gaps between groups in a social network where there are few relationships bridging the groups. An example would be: sales and engineering are two groups where members traditionally interact more with their peers than across group boundaries.

How do we determine a firm's cash flow? What are the equations and where do we find the information?

Cash flow comes from operating, investing and financing activities The sum of these three flows will determine the statement of cash flows

customer persepctive

Clearly, how a company is performing from its customers' perspective is a top priority for management. The balanced scorecard requires that managers translate their general mission statements on customer service into specific measures that reflect the factors that really matter to customers. For the balanced scorecard to work, managers must articulate goals for four key categories of customer concerns: time quality performance and service and cost.

the degree to which all members of a social network have relationships (or ties) with other group members.

Closure relationships

The use of information technology (e.g., e-mail) has increased in recent years in many organizations. This has helped to

Communicate information efficiently

Successful firms are well aware that the attraction, development, and retention of talent is a necessary but not sufficient condition for creating ____________________ advantages.

Competitive

A key __________ of SWOT is that it is primarily a static assessment. A. strength B. threat C. opportunity D. weakness

In social network analysis, the importance of ties connecting heterogeneous people that help to ensure a wide range of diversity in information and perspective is known as A. closure. B. social supports. C. redundancy. D. bridging relationships.

In using crowdsourcing as a means to integrate the customer into the value chain, there are some perils to consider. Which of the following is not related to crowdsourcing perils? A. Giving customers the opportunity to tarnish the company brand. B. Asking for consumer input when demand is highly uncertain. C. Repeatedly getting feedback from the same customer. D. Asking for consumer input when demand is certain

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

Knowledge workers often exhibit __________ loyalties to their colleagues and their profession relative to their employing organization. A. fewer B. less favorable C. no D. greater

Raymond Ozzie, the software designer who was critical in the development of Lotus Notes, was able to dictate the terms under which IBM acquired Lotus. This illustrates that he had ______ bargaining power based on the ________ cost required by the firm to replace him. A. low; low B. low;high C. high; low D. high; high

Regarding the value-chain concept, the most important interrelationship is between the organization and its: A. board of directors. B. employees. C. management. D. customers.

Social capital has downsides. Which of the following is a downside? A. High social capital may breed groupthink. B. Socialization processes are inexpensive. C. Individuals may be more willing to collaborate on joint projects. D. Management commitment is easy to obtain.

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

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 general administration

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. Highly mechanized C. First In, First Out (FIFO) D. Just-In-Time(JIT)

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

D) A and B above.

Feedback on how a company is doing from the perspectives of financial, customer, internal business processes, and learning and growth. A) Master budget B) Product differentiation C) Differential report D) Balanced scorecard

D) Balanced scorecard

________ translates an organization's mission and strategy into a comprehensive set of performance measures that provide the framework for implementing its strategy. A) Performance scoreboard B) Product differentiation C) Differential report D) Balanced scorecard

D) Balanced scorecard

Which of the following statements is a valid argument for BarGraphs to reduce its manufacturing capacity? A) BarGraphs 's strategy is to grow its business as L3 have unlimited demand. B) BarGraphs can call back the expelled employees if the reduced capacity level proves to be insufficient. C) BarGraphs already has a high employee turnover rate and a few more will make no difference. D) BarGraphs wants to reduce product costs as they want to be the cost leaders.

D) BarGraphs wants to reduce product costs as they want to be the cost leaders.

Which of the following statements best define a product differentiation strategy? A) It describes how an organization can increase customer base by differentiating its' product prices from its competitors. B) It is an organization's ability to achieve lower costs relative to competitors through productivity and efficiency improvements, elimination of waste, and tight cost control. C) It describes how an organization can decrease product prices by differentiating its' raw materials from its competitors. D) It is an organization's ability to offer products or services its customers perceive to be superior and unique relative to the products or services of its competitors.

D) It is an organization's ability to offer products or services its customers perceive to be superior and unique relative to the products or services of its competitors.

Interest coverage

(net income interest expense + tax expense) / interest expense =

Gross profit margin

(sales - COGS) / sales =

Characteristics of e-teams include all of the following except: A. E-team members either work in geographically separated workplaces or may work in the same space but at different times. B. E-teams may have members working in different spaces and time zones. C. Most of the interactions among members of e-teams occur through electronic communication channels. D. E-teams generally perform simple tasks

. E-teams generally perform simple tasks

. attracting and retaining knowledgeable workers.

The __________, __________, and __________ talent is a necessary but not sufficient condition for creating competitive advantages. A. attraction; laissez-faire; retention of B. observance; laissez-faire; regard for C. attraction; development; retention of D. observance; development; hands-off approach to

. attraction; development; retention of

Sharing knowledge and information throughout the organization can be a means of A. conserving products and services. B. continuing with outdated products. C. conserving resources. D. overusing email

. conserving resources

Dynamic capabilities include ______ development, alliances, and acquisitions. A. after-market B. product C. idea D. company

. product

4 factors help explain the extent to which employees and managers will be able to obtain a proportionately high level of the profits the generate

1. employee bargaining power 2. employee replacement cost 3. employee exit costs 4. manager bargaining power

Managers can delay competition from copying resources by developing strategies around resources that have at least one of the following 4 characteristics:

1. physical uniqueness 2. path dependency 3. casual ambiguity 4. social complexity

Which of the following statements is true of strategic analysis of operating income? A) Management accountants compare budgeted operating performance over two different periods. B) Management accountants compare actual and budgeted operating performance over the same time periods. C) Management accountants compare actual operating performance of one year and budgeted operating performance of another year. D) Management accountants compare actual operating performance over two different periods.

D) Management accountants compare actual operating performance over two different periods.

Which of the following statements is true of successfully implementing a balanced scorecard? A) External auditors should design and implement the balanced scorecard. B) Balanced scorecard should never be communicated to all employees. C) Balanced scorecard should be formed exclusively by top management. D) Management accountants should determine the balanced scorecard measures.

D) Management accountants should determine the balanced scorecard measures.

3. All activities associated with transforming inputs into the final product form, such as machining, packaging and assembly, are known as ______ in the value chain. A) Just-in-time inventory management B) Outbound logistics C) Inbound logistics D) Operations

D) Operations; Operations include all activities associated with transforming inputs into the final product form, such as machining, packaging, assembly, testing, printing, and facility operations.

Which of the following involves a fundamental rethinking and redesign of business processes to achieve improvements in critical measures of performance? A) Strategy B) Product differentiation C) Product designing D) Reengineering

D) Reengineering

________ is the fundamental rethinking and redesign of business processes to achieve improvements in critical measures of performance such as cost, quality, service, speed, and customer satisfaction. A) Strategy B) Product differentiation C) Product designing D) Reengineering

D) Reengineering

In a 360-degree evaluation and feedback system, ______________ rate a person's skill and performance. A) superiors B) direct reports C) colleagues D) all of the above

D) all of the above

superiors, direct reports, colleagues, and even external and internal customers rate a person's performance.

360-degree evaluation

which systems address the limitations of the traditional approach to performance evaluation?

360-degree evaluation and feedback

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. interrelationships among functional areas and firm strategies organizational culture and leadership B. organizational culture and leadership. C. need to maintain the reputation of the company D. synergy of the business units

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

In social network analysis, groups can become too insular and fail to share what they have learned with people outside the group. This is a result of A. closure. B. intellect. C. bridging relationships. D. diverse knowledge.

The culture of a firm also may be a resource that provides competitive advantage. Which of these companies might be a good example of this intangible resource? A. Google B. Kmart C. Costco D. Walmart

The customer perspective of the balanced scorecard answers which of the following questions? A. How do customers see us? B. What must we excel at? C. How do we look to shareholders? D. Can we continue to improve and create value?

Which of the following firms would you expect to have the highest ratio of market value to book value? A. Apple B. General Motors C. Intel D. Nucor

Bruce Strong, CEO of Context Integration invested half a million dollars in a software package to help his consultants share their ideas. After the program was unveiled few people were motivated to use it. This may have been caused by A) consultants not seeing value in the software. B) consultants being protective of their ideas. C) the software not being a part of the company's culture. D) all of the above.

D) all of the above.

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 the above.

D) all of the above.

Many Microsoft employees have left to start other companies. In general, when such employees leave, they take with them A) social capital. B) human capital. C) intellectual capital. D) all of the above.

D) all of the above.

Sharing knowledge within an organization helps to build social capital. This can be accomplished through the use of A) email. B) one-on-one conversations. C) office memos. D) all of the above.

D) all of the above.

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

D) can be accessed only with the consent of the employees because it is in the minds of the employees.

A firm incurs $100 to manufacture an office table. It fixes the market price of the table as $250, and discounts the price to $200. However, the maximum a person is willing to pay for it is $180. What is the amount of total perceived consumer benefits in this scenario? A. $250 B. $200 C. $180 D. $100

A firm incurs $400 to manufacture a television. In the market, customers are willing to pay a maximum of $600 for the television priced at $500. The difference of $200 ($600 minus $400) is the A. consumer surplus. B. total return to shareholders. C. customer lifetime value. D. economic value created

Which of the following is not a risk associated with a global strategy?

A firm with only one manufacturing location must import its product.

dynamic capabilities

A firm's capacity to build and protect a competitive advantage, which rests on knowledge, assets, competencies, complementary assets, and technologies. Include the ability to sense and seize new opportunities, generate new knowledge, and reconfigure existing assets and capabilities.

Social complexity

A firm's resources may be imperfectly inimitable because they reflect a high level of social complexity. Such phenomena are typically beyond the ability of firms to systematically manage or influence. When competitive advantages are based on social complexity, it is difficult for other firms to imitate them. A wide variety of firm resources may be considered socially complex. Examples include interpersonal relations among the managers in a firm, its culture, and its reputation with its suppliers and customers. In many of these cases, it is easy to specify how these socially complex resources add value to a firm. Hence, there is little or no causal ambiguity surrounding the link between them and competitive advantage

2. Briefly describe the primary and support activities in a firm's value chain.

A firm's value chain consists of a firm's value-creating activities. Primary activities are sequential activities that pertain to the physical creation of the product or service, its sale and transfer to the buyer, and its service after sale; including inbound logistics, operations , outbound logistics, marketing and sales, and service. Support activities either add value by themselves or add value through important relationships with both primary activities and other support activities; including procurement, technology development, HR mgmt, and general administration.

Path dependency

A greater number of resources cannot be imitated because of what economists refer to as path dependency. This simply means that resources are unique and therefore scarce because of all that has happened along the path followed in their development and/or accumulation. Competitors cannot go out and buy these resources quickly and easily; they must be built up over time in ways that are difficult to accelerate

In a study of 50 Canadian medium-size and large organizations, the number of users expressing skepticism about scorecard performance was much greater than the number claiming positive results

A large number of respondents agreed with the statement "Balanced scorecards don't really work." Some representative comments included: "It became just a number-crunching exercise by accountants after the first year," "It is just the latest management fad and is already dropping lower on management's list of priorities as all fads eventually do," and "If scorecards are supposed to be a measurement tool, why is it so hard to measure their results?" There is much work to do before scorecards can become a viable framework to measure sustained strategic performance.

False

A multi-domestic strategy is the most appropriate strategy for international operations because it drives economies of scale as far as possible and provides a middle-of-the-road product appealing to the largest number of consumers in every market. True or False?

False

A newly acquired business must always have products that are similar to the existing businesses' products to benefit from the corporation's core competence. True or False?

Value chain analysis

A strategic analysis of an org that uses value-creative activities views the org as a sequential process of value-creative activities The approach is useful for understanding the building blocks of competitive advantage Value is the amount that buyers are willing to pay for what a firm provides them and is measure by total revenue, a reflection of the price a firm's product commands and the quantity it can sell A firm is profitable when the value it receives exceeds the total costs involved in creating its product or service. Creating value for buyers that exceed the cost of production is a key concept used in analyzing a firm's competitive position

F - increases entry barrier

A successful differentiation strategy lowers entry barriers because of customer loyalty and the firm's ability to provide uniqueness in its products and services. True or False?

Groupthink

A tendency in an organization for individuals not to question shared beliefs. Groupthink may occur in networks with high levels of closure where there is little input from people outside of the network. If there are deep-rooted mindsets, there could be a tendency to develop dysfunctional human resource practices. The organization could continue to hire, reward, and promote like-minded people who tend to further intensify organizational inertia and erode innovation. Socialization processes, such as orientation and training, can be expensive in terms of both financial resources and managerial commitment. A cost-benefit analysis is encouraged. Individuals may also use the contacts they develop to pursue their own interests and agendas in ways that may be inconsistent with the organization's goals and objectives - engaging in unethical or illegal acts.

Which of the following statements best define strategy? A) It describes how an organization can create value for its customers while differentiating itself from its competitors. B) It is an organization's ability to achieve lower costs relative to competitors through productivity and efficiency improvements, elimination of waste, and tight cost control. C) It is an organization's ability to offer products or services its customers perceive to be superior and unique relative to the products or services of its competitors. D) It describes how an organization motivates its employees to work for more hours without any increase in their wages.

A) It describes how an organization can create value for its customers while differentiating itself from its competitors.

8. Limiting the time that employees are permitted to spend using email can reduce workplace distraction for employees. A) True B) False

A) True; E-mail can become a problem when employees use it extensively for personal reasons. Scott Dockter, CEO of PBD Worldwide Fulfillment Services in Alpharetta, Georgia, launched a no e-mail Friday initiative in order to curb what he felt was excessive e-mail use in his firm.

A) using explicit knowledge. B) inefficient use of information management. C) using tacit knowledge. D) all of the above. ANSWER: A

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

A. Apple

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.

What is the difference between accounting income and cash flow? Which do we need to use when making decisions?

Accounting income is purely revenue - expenses = income. Cash flow is when cash is actually changing hands, either coming in or leaving. We need to use cash flow since it is more current.

After trying on a dress, a consumer assesses it to be worth a maximum of $100 and is willing to pay that amount for the dress. However, the dress was priced at $80. What is the amount, $100, referred to as? A. the producer surplus B. the firm's cost (C) in manufacturing the dress C. the consumer surplus D. the value (V) the consumer attaches to the dress

Airbnb rents spaces that previously would have been unused to generate revenue, while also dramatically increasing the potential amount of accommodation space in the 191 countries. This business uses a _____ technique. A. offshoring B. crowdsourcing C. peer-to-peer D. binge watching

2. Why is it important for managers to recognize the interdependence in the attraction, development, and retention of talented professionals?

All 3 steps are important for efficiently and effectively developing intellectual capital. To illustrate, consider what happens if any one step is weak. If attraction were weak, then the firm would not be able to hire sufficient numbers of capable employees to replace retirees, grow intellectual capital, or select capable professionals for its organization. If development were weak, then the form would not be able to increase the intellectual capital of its staff to compete effectively. If retention were weak, then the firm would be investing its scarce capital into selecting and developing replacements for the professionals who are leaving.

Changes in our economy have forced firms to be more concerned with protecting their

All of the above

True

An advantage of international expansion is that it can enable a firm to optimize the location of every activity in its value chain. True or False?

Knowledge Economy

An economy where wealth is created through the effective management of knowledge workers instead of by the efficient control of physical and financial assets. Investing in a company is, in essence, buying a set of talents, capabilities, skills, and ideas - intellectual capital - not physical and financial resources. An example would be: Merck, which has been a "most admired" company in Fortune's annual survey not because it can manufacture pills, but because its scientists can discover new medicines.

_______________ capabilities may be one of the best ways that a firm can protect its intellectual property.

Dynamic

________ include the ability to seize new opportunities, generate new knowledge, and reconfigure existing assets and capabilities.

Dynamic capabilities

________ include the ability to seize new opportunities, generate new knowledge, and reconfigure existing assets and capabilities. Multiple Choice · Social network analyses · Dynamic capabilities · Groupthink rewards · Bridging relationships

Dynamic capabilities

________ include the ability to seize new opportunities, generate new knowledge, and reconfigure existing assets and capabilities.

Dynamic capabilities Page: 151

E-teams can be effective in generating social capital

________ teams complete tasks primarily through email communication. Multiple Choice · Email · Networked · Online · Electronic

Electronic

5. Under what conditions are employees and managers able to appropriate some of the value created by their firm?

Employees and managers sometimes have the capability to consume a firm's earnings in the form of salary and perks. 4 conditions that determine their ability to do so are 1) employee bargaining power, due to their unique skills and abilities; 2) employee replacement cost, due to the rareness of employee skills; 3) employee exit cost, which is the ability of the employee to find alternative employment, and associates with lower ability to appropriate earnings, and 4) manager bargaining pwoer, due to managers' information about the integrated understanding of the firm's total operations.

Dynamic capabilities are related to the ___________________ side of the firm and are built within a firm through its environmental and technological sensing apparatus, its choices of organizational form, and its collective ability to strategize.

Entrepreneurial

knowledge that is codified, documented, easily reproduced, and widely distributed.

Explicit knowledge

Evaluation activities add value by helping firms finalize transactions including negotiating contracts, making payments and taking delivery.

FALSE

Path dependency has no impact on the inimitability to imitate

FALSE

T/F: Comcast gets a bad review on Yelp. This is an example of harm to a tangible resource

FALSE

T/F: Firms that are successful in creating competitive advantages that are sustainable for a period of time do not have to be concerned about profits being retained by employees or managers

FALSE

T/F: For a resource to provide a firm with potential sustainable advantages it must satisfy only two criteria: rareness and difficulty in substitution

FALSE

T/F: The current ratio is used to measure long-term solvency

FALSE

T/F: The resource-based view of the firm focuses solely on the internal analysis of the operations of the firm

FALSE

360 degree evaluation systems are not useful due to the need to integrate large amounts of feedback

False

A balanced scorecard greatly helps in identifying the real drivers of customer satisfaction.

False

A disadvantage of mergers and acquisitions is that they can enable a firm to rapidly enter new product markets.

False

A firm that competes on cost leadership can be vulnerable if there is a decrease in the cost of the inputs on which the advantage is based.

False

A primary weakness of the balanced scorecard is that it fails to complement financial indicators with operational measures of customer satisfaction, internal processes, and the organization's innovation and improvement activities.

False

Closure, in contrast to bridging relationships, stresses the importance of ties connecting heterogeneous people

False

Companies have found that referrals from their own employees are generally an ineffective approach to recruiting top talent.

False

Firms such as Microsoft, Alphabet, and Apple will tend to have a lower ratio of market value to book value than industrial companies such as Nucor Steel. True or False

False

The more reliance a firm has on intellectual capital, the closer its book value will be to its market value.

False

True or False: When leaving a job, desirable knowledge employees are most likely to find new employment on Internet career sites and go alone to work for complete strangers.

False Page: 137-138

True or False: Because primary activities like inbound logistics, operations, and outbound logistics are applicable only to tangible goods, value chain analysis is not appropriate for service organizations.

False Page: 92

true

Firms that compete on overall cost leadership are vulnerable if all rivals share a common input or raw material that contributes a significant amount to total costs. Ture of false?

B: Strategic Alliance, Joint Venture

GE and Toyota making airbags together is an example of ________; Sony-Ericsson is an example of ________. A. Strategic Alliance, Strategic Alliance B. Strategic Alliance, Joint Venture C. Joint Venture, Strategic Alliance. D. Joint Venture, Joint Venture

Which of the following firms would you expect to have the highest ratio of market value to book value?

Genetech

Genevieve is a recent fashion graduate. She started her own apparel store with an investment of $300,000. In the first year she made a profit of $60,000. If she had taken up a job as a fashion editor for a magazine, she would have earned $50,000 as salary per year. Also, she could have invested her capital, $300,000, in treasury bonds and earned an interest of $12,000. Thus, the amount $62,000 ($50,000 + $12,000) would be Genevieve's A. social cost. B. break-even price. C. reservation price. D. opportunity cost.

Innovation and learning perspective

Given the rapid rate of markets, technologies, and global competition, the criteria for success are constantly changing. To survive and prosper, managers must make frequent changes to existing products and services as well as introduce entirely new products with expanded capabilities. A firm's ability to do well from an innovation and learning perspective is more dependent on its intangible than tangible assets. Three categories of intangible assets are critically important: human capital (skills, talent, and knowledge), information capital (information systems, networks), and organization capital (culture, leadership).

a tendency in an organization for individuals not to question shared beliefs.

Groupthink

The creation of knowledge assets is typically characterized by

High upfront costs and low variable costs

Attracting Human Capital

Hire for attitude, train for skill! There is an emphasis on general knowledge and experience, social skills, values, beliefs, and attitudes. Sound recruiting approaches to attract human capital: - Building a pool of qualified candidates - The challenge becomes having the right job candidates, not the greatest number of them. - Networking - Current employees may be the best source of new ones. - Provide incentives for referrals **Companies that take hiring seriously must also take recruiting seriously. The challenge becomes having the right job candidates, not the greatest number of them.

The balanced scorecard enables managers to consider their business from four key perspectives: customer, internal, innovation and learning, and financial

How do customers see us? (customer perspective) what must we excel at? (internal business perspective) can we continue to improve and create value? (innovation and learning perspective) how do we look to shareholders? (financial perspective)

How does a firm capture its producer surplus for a good or service? A. as cost per unit sold B. as profit per unit sold C. as earnings per share D. as market price per share

How does a sustainable strategy typically help a firm? A. It helps the firm focus solely on its financial goals. B. It reduces the need for corporate social responsibility within the firm. C. It facilitates the firm in effectively isolating its external stakeholders. D. It helps the firm achieve positive results along the social and ecological dimensions.

Hugo Books Inc. is a retailer that buys books at a fixed price from publishers. Recently, Hugo offered a deal in which customers could buy a package of three mystery books at a discounted rate. Which of the following business models has Hugo Books combined? A. agency and freemium B. wholesale and agency C. wholesale and bundling D. agency and bundling

________________ capital is the foundation of intellectual capital, but the attraction, development, and retention of _____________ capital is a necessary but not sufficient condition for organizational success.

Human

_______ includes creativity and problem solving ability.

Human capital

the individual capabilities, knowledge, skills, and experience of a company's employees and managers.

Human capital

Is the Resource Rare?

If competitors or potential competitors also possess the same valuable resource, it is not a source of a competitive advantage because all of these firms have the capability to exploit that resource in the same way. Common strategies based on such a resource would give no one firm an advantage. For a resource to provide competitive advantages, it must be uncommon, that is, rare relative to other competitors. Monopoly True monopoly near monopoly local monopoly fewer firms than needed to generate perfect competition too little supply to meet market needs

Employee replacement cost

If employees' skills are idiosyncratic and rare (a source of resource-based advantages), they should have high bargaining power based on the high cost required by the firm to replace them. For example, Raymond Ozzie, the software designer who was critical in the development of Lotus Notes, was able to dictate the terms under which IBM acquired Lotus.

In 2014, Apple turned over its inventory more than 53 times. In stark contrast, Microsoft turned over its inventory only about 10 times during the year. Which of the following best explains this difference? A. Apple had a more effective management of its global supply chain than Microsoft. B. Microsoft had a stronger demand for its tablet computer than Apple did for its tablet computer. C. Apple operated its own production facilities and therefore had lower production costs than Microsoft. D. Microsoft had production facilities in countries with lower production costs than Apple.

Public Information

Information that is available from public sources such as the Internet. Success is also tied to the ability to transcend natural skill limitations through others.

Private Information

Information that is not available from public sources, and is usually communicated in the context of personal relationships.

The growing importance of knowledge, coupled with the move by labor markets to reward knowledge work, tells us that investing in a company is, in essence, buying a set of talents, capabilities, skills, and ideas - _______________capital - not physical and financial resources.

Intellectual

________ capital can be defined as the difference between the market value and book value of a firm, or a measure of its intangible assets.

Intellectual

________ capital can be defined as the difference between the market value and book value of a firm, or a measure of its intangible assets. Multiple Choice · Social · Human · Intellectual · Personal

Intellectual

________ capital can be defined as the difference between a firm's market value and its book value, or a measure of the firm's intangible assets.

Intellectual Page: 126

True

International expansion can extend the life cycle of a product that is in its maturity stage in a firm's home country. True or False?

Unilever PLC is using artificial intelligence (AI) to hire the best talent. What does AI do to help them in selecting candidates?

It reduces the size of the pool of qualified applicants.

A company's value is not derived solely from its physical assets. Rather it is based on _____________, know-how, and intellectual assets - all embedded in people.

Knowledge

an economy where wealth is created through the effective management of knowledge workers instead of by the efficient control of physical and financial assets.

Knowledge economy

The SAP Community Network includes a wide range of online forums. Why do they need this? Multiple Choice · Experienced employees do not want to train new entrants. · It slows down communication. · Knowledge flows can help it gain competitive advantage. · Young employees find it playful.

Knowledge flows can help it gain competitive advantage.

In the knowledge economy, it is not the stock of human capital that is important, but the extent to which it is combined and __________________.

Leveraged

Which one of the following is one of the Theodore Levitt assumptions supporting a pure global strategy?

MNCs can successfully compete globally by aggressively pricing products and sacrificing features.

Management commitment is easy to obtain.

Manager bargaining power

Mangers' power is based on how well they create resource-based advantages

Answer: A. Explicit knowledge gained through reading the e-mails.

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 teams members. This is an example of.... A. using explicit knowledge. B. inefficient use of information management. C. using tacit knowledge. D. all of the above.

Market Scope

Michael Porter's four generic strategies can be depicted on two dimensions: one is source of competitive advantage and the other one is ______________________?

Which of the following is not a risk normally associated with Bottom of the Pyramid strategies?

New products may be perceived as exploiting the customer with substandard products.

Nicki paid $900 for a camera that she thought was worth $1100 for all the features included in it. For the consumer electronics firm selling the camera, however, the cost of producing the camera was only $350. What is the consumer surplus in this scenario? A. $900 B. $1,100 C. $550 D. $200

Changes in our economy have forced firms to be ____________ concerned with protecting their knowledge workers, social capital, and intellectual capital. A. less B. more C. potentially D. not

Not

Collaboration Barriers

Not-invented-here or hoarding barrier The search barrier The transfer barrier

Is the Resource Valuable?

Organizational resources can be a source of competitive advantage only when they are valuable. Resources are valuable when they enable a firm to formulate and implement strategies that improve its efficiency or effectiveness. creation of market opportunities exploitation of market opportunities buffering organizational threats

Osion Electronics Inc. incurs a cost of $350 to produce one unit of a cell phone. The company's management has priced the product at $600 in the market. Considering the technological advancement of the cell phone, customers perceive its value to be around $800. What is the economic value created in this scenario? A. $350 B. $450 C. $800 D. $200

method for making people more willing to collaborate by getting the right people to work on the right projects.

People lever

Photohome is a file hosting service that allows users to store up to 5GB of data with no restrictions or charges. However, users have to pay a fee for advanced features on the cloud storage system and additional storage space. Which of the following business models does this best illustrate? A. subscription-based B. freemium C. pay-as-you-go D. razor-razor-blade

Why did the artist, Pablo Picasso, become wealthy during his lifetime and the artist, Vincent van Gogh, remain poor his entire life? Works by both artists now sell for over 100,000,000 USD.

Picasso had a large and effective social network.

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

C: Corporate Level

Portfolio management matrices are applied to what level of strategy? A. Functional level B. Business level C. Corporate level D. Departmental level

The downsides or limitations of mergers and acquisitions include all of the following, EXCEPT:

Premiums that are rarely paid to acquire a business are expensive.

There are multiple advantages of e-teams. Which of the following is not an advantage? A. E-teams are less restricted by the geographic constraints that are placed on face-to-face teams. B. E-teams can be more flexible in responding to unanticipated work challenges and opportunities. C. Process losses result from identification and combination activities D. E-teams can be effective in generating social capital

Process losses result from identification and combination activities

1. Microsoft has improved the ________ part of its value chain by providing formal reviews of its suppliers, which has helped to clarify expectations for them.

Procurement

Return on risk capital primarily includes A. stock price appreciation plus dividends received over a specific period. B. consumer surplus plus firm profit. C. account receivables plus account payables. D. economic value created by a firm plus reservation pric

All of the following are the benefits of diversity in a firm's workforce except:

Similarity in perspectives argument

Smart Feet Inc. produces shoes that are better quality and cost more to make than the shoes of its competitors. Smart Feet realizes that there will be a large difference between the cost to produce the shoes and the consumer's willingness to pay for them. Even so, Smart Feet decides to charge the same price as its competitors. Which of the following will most likely be the result of this action? A. Smart Feet will go out of business. B. Smart Feet will increase its marketability. C. Smart Feet will gain market share. D. Smart Feet will be bought by a competitor

_________________ capital, the appropriate use of technology, and protection of physical and intellectual property is also critical.

Social

____________________ capital within a group or organization develops through repeated interactions among its members and the resulting collaboration.

Social

An individual who uses the contacts they develop to pursue their own interests and agendas that may be inconsistent with the organization objectives is one potential downside of social network analysis. social capital. mentoring. electronic teams. Bottom of Form

Social Capital

Enhancing Human Capital

Sound management of diverse workforces can improve an organization's effectiveness & competitive advantages by making the following arguments: Cost Resource acquisition Marketing Creativity Problem solving Organizational flexibility COST: firms effective in managing diversity will have a cost advantage over those that are not. RESOURCE ACQUISITION: firms with excellent reputations as prospective employers for women and ethnic minorities will have an advantage in the competition for top talent. MARKETING: the insight and cultural sensitivity that members with roots in other countries bring to marketing efforts will be very useful. CREATIVITY: less emphasis on conformity to norms of the past and diversity of perspectives will improve the level of creativity. PROBLEM SOLVING: heterogeneous groups typically produce better decisions because of the wider range of perspectives. ORGANIZATIONAL FLEXIBILITY: with effective programs to enhance workplace diversity, systems become less determinate, less standardized, and therefore more fluid. Such fluidity should lead to greater flexibility to react to environmental changes.

4. Briefly explain the four criteria for sustainability of competitive advantages.

Strategic resources that lead to firms' sustainable competitive advantages must be valuable, rare, costly to imitate, and costly to substitute. Resources must be valuable in order to give the firms competitive advantages. They must be rare, or else competitors will be able to obtain the advantages too. The resources must be costly imitate, or else competitors will be able to replicate the competitive advantages. 4 factors that limit resource imitation are physical uniqueness, path dependency, causal ambiguity, and social complexity. And they must be costly to substitute, or else competitors will be able to create a similar competitive advantage that serves the same function.

Capabilities that exhibit casual ambiguity are difficult to imitate

TRUE

T/F Value-chain analysis assumes that the basic economic purpose of a firm is to create value and it is a useful framework for analyzing the strengths and weaknesses of the firm

TRUE

T/F: Several pharmaceutical firms have seen the value of patent protection erode in the face of new drugs that are based on different production processes and act in different ways, but can be used in similar treatment regimes. This example illustrates the lack of sustainable competitive advantage being offered by the product

TRUE

T/F: A primary benefit of the balanced scorecard is that it complements financial indicators with operational measures of customer satisfaction, internal processes, and the innovation and improvement activities of the organization

TRUE

T/F: An important implication of the balanced scorecard is that managers need not look at their job as primarily balancing stakeholder demands

TRUE

T/F: Capabilities that exhibit causal ambiguity are difficult to imitate

TRUE

T/F: In considering the business from the internal business perspective using the balanced scorecard, customer-based measures must be translated into indicators of what the firm must do internally to meet customer expectations

TRUE

T/F: In considering the business from the internal business perspective using the balanced scorecard, periodic financial statements are used to indicate the consequences of improved quality, response time, productivity, and innovative products. These consequences include improved sales

TRUE

T/F: Information technology (IT) can also play a key role in enhancing the value that a company can provide its customers and, in turn, increasing its own revenues and profits. IT is an activity within the support activities of general administration

TRUE

T/F: Inventory turnover is a measure of asset utilization

TRUE

T/F: Leverage ratios provide measures of the capacity of a firm to meet its long-term financial obligations

TRUE

Gillette combines several technologies to attain unparalleled success in the wet shaving industry. This is an example of their

Tangible resources

_____________________ can be used to leverage human capital and knowledge within organizations as well as with customers and suppliers beyond their boundaries.

Technology

Firms can use _______________, attract human capital, or tap into research and design networks to get access to information.

Technology **However employees can become disgruntled and patents can expire. Where is the firm's sustainable competitive advantage then?

D: attaining the benefits of parenting through unrelated diversification

The corporate office of Cooper Industries adds value to its acquired businesses by performing such activities as auditing their manufacturing operations, improving their accounting activities, and centralizing union negotiations. This is an example of A. achieving economies of scope through related diversification. B. achieving market power through related diversification. C. attaining the benefits of horizontal integration. D. attaining the benefits of parenting through unrelated diversification.

Are substitutes readily available

The fourth requirement for a firm resource to be a source of sustainable competitive advantage is that there must be no strategically equivalent valuable resources that are themselves not rare or inimitable. Two valuable firm resources (or two bundles of resources) are strategically equivalent when each one can be exploited separately to implement the same strategies

How do companies create value in the knowledge-intensive economy?

The general answer is to attract and leverage human capital (intangible assets) effectively through mechanisms that create products and services of value over time.

C: Converting explicit knowledge to tacit knowledge

The management of intellectual property involves all of the following EXCEPT: A. patents. B. contracts with confidentiality and non compete clauses. C. converting explicit knowledge to tacit knowledge. D. copyrights and trademarks.

The market capitalization of a public company is $5 billion. Each share of the company is traded at $200. What do you infer from this financial data? A. The firm's number of outstanding shares is 25 million. B. The firm pays an annual dividend of 10 percent. C. The firm's total return to shareholder is $5 billion. D. The firm's economic value created is $5 billion.

The receivables turnover of VK Products Inc. is 13.6 and that of its competitor DL Goods Inc. is 6.0. What does this financial data primarily imply? A. VK Products is less efficient than DL Goods in collecting accounts receivables B. DL Goods pays its creditors more quickly as compared to VK Products C. VK Products collects accounts receivables faster than AP Goods does D. DL Goods has a larger value gap as compared to VK Products

Limitation and potential downsides of the balanced scorecard

There is general agreement that there is nothing inherently wrong with the concept of the balanced scorecard. The key limitation is that some executives may view it as a "quick fix" that can be easily installed. If managers do not recognize this from the beginning and fail to commit to it long term, the organization will be disappointed. Poor execution becomes the cause of such performance outcomes. And organizational scorecards must be aligned with individuals' scorecards to turn the balanced scorecards into a powerful tool for sustained performance.

Employee exit costs

This factor may tend to reduce an employee's bargaining power. An individual may face high personal costs when leaving the organization. Thus, that individual's threat of leaving may not be credible. In addition, an employee's expertise may be firm-specific and of limited value to other firms.

Causal Ambiguity

This means that would-be competitors may be thwarted because it is impossible to disentangle the causes (or possible explanations) of either what the valuable resource is or how it can be re-created. What is the root of 3M's innovation process? You can study it and draw up a list of possible factors. But it is a complex, unfolding (or folding) process that is hard to understand and would be hard to imitate. Often, causally ambiguous resources are organizational capabilities, involving a complex web of social interactions that may even depend on particular individuals

The American Productivity and Quality Center (APQC) noted that executives have long felt frustrated by their inability to identify or transfer outstanding practices from one location or function to another.

True

The Cisco acquisition of Pure Digital Technologies, the parent of the Flip video camera, failed because Cisco was unable to respond rapidly to market pressures.

True

Trading blocs and free trade zones promote the rise of regional expansion.

True

Unlike the financial ratios based on accounting data, total return to shareholders is A. backward-looking and historic in nature. B. an external performance metric. C. an absolute measure of competitive advantage. D. unaffected by market volatility or macroeconomic factors.

Using explicit knowledge

False

Vertical integration should be undertaken when demand for the organization's products is very unstable. True or False?

________ tend to be quite enduring and seldom change.

Vision statements

Integrating customers into the value chain

When addressing the value-chain concept, it is important to focus on the interrelationship between the organization and its most important stakeholder—its customers. Some firms find great value by directly incorporating their customers into the value creation process. Firms can do this in one of two ways. First, they can employ the "prosumer" concept and directly team up with customers to design and build products to satisfy their particular needs. Working directly with customers in this process provides multiple potential benefits for the firm. As the firm develops individualized products and relationship marketing, it can benefit from greater customer satisfaction and loyalty. Additionally, the interactions with customers can generate insights that lead to cost-saving initiatives and more innovative ideas for the producing firm

Which of the following questions challenges managers to come up with strategic objectives that ensure future competitiveness? A. How do customers view us? B. How do we create value? C. What core competencies do we need? D. How do shareholders view us?

Which of the following scenarios best illustrates bundling? A. Clean Brush Inc. sells its electric toothbrushes for a low cost, but charges a high price for replacement brushes. B. Cumulus Media Inc. sells its cloud computing network by having customers pay for the service as they use it. C. S Cable Inc. sells its basic TV channels for free but charges high prices for any channels that customers add on later. D. Fresh Seeds Inc. sells seed packages, in which a person can buy a package of three types of seeds at a discounted price compared to buying the seeds individually

Which of the following statements is true of accounting data? A. Accounting data focus mainly on intangible assets, rather than tangible assets. B. Accounting data are historical data and thus backward-looking. C. Accounting data do not have to be adjusted in any manner to compare companies with different capital structures. D. Accounting data consider off-balance sheet items, such as pension obligations of a firm

Which of the following statements is true of the balanced-scorecard? A. It is a more or less a one-dimensional metric of measuring competitive advantages of a firm. B. It is one of the traditional approaches of measuring firm performance. C. Its primary focus is to base a firm's strategic goals entirely on external performance dimensions. D. It attempts to provide a holistic perspective on firm performance.

Problems often occur in the balanced scorecard implementation efforts when the commitment to learning is insufficient and employees' personal ambitions are included.

Without a set of rules for employees that address continuous process improvement and the personal improvement of individual employees, there will be limited employee buy-in and insufficient cultural change. Thus, many improvements may be temporary and superficial. Often, scorecards that failed to attain alignment and improvements dissipated very quickly. And, in many cases, management's efforts to improve performance were seen as divisive and were viewed by employees as aimed at benefiting senior management compensation. This fostered a "what's in it for me?" attitude.

_____ indicates how much a firm benefits from interest-free loans extended by its suppliers and creditors. A. Payables turnover B. Receivables turnover C. Assets turnover D. Inventory turnover

Evaluating Human Capital

___________________ Human Capital - 360-degree evaluation and feedback systems address the limitations of the traditional approach to performance evaluation. - Superiors, direct reports, colleagues, and even internal and external customers rate a person's performance. - 360-degree feedback systems complement teamwork, employee involvement, and organizational flattening.

dynamic capabilities

a firm's capacity to build and protect a competitive advantage, which rests on knowledge, assets, competencies, complementary assets, and technologies. Dynamic capabilities include the ability to sense and seize new opportunities, generate new knowledge, and reconfigure existing assets and capabilities.

dynamic capabilities

a firms capacity to build and protect a competitive advantage, which rests on knowledge, assets, competencies, complementary assets and technologies.

value-chain analysis

a strategic analysis of an organization that uses value-creating activities

*KEY TERMS* Value-chain analysis

a strategic analysis of an organization that uses value-creating activities.

electronic teams

a team of individuals that complete tasks primarily through email communication

electronic teams

a team of individuals that completes tasks primarily through e-mail communication.

financial ratio analysis

a technique for measuring the performance of a firm according to its balance sheet, income statement, and market valuation

Financial ratio analysis

a technique for measuring the performance of a firm according to its balance sheet, income statement, and market valuation.

Groupthink

a tendency in an organization for individuals not to question shared beliefs.

____ refers to an examination of facts and data to provide a basis for effective decisions. a. Analysis b. Data warehousing c. Interlinking d. Clustering

a. Analysis

The process in which locations, divisions and functions in an organizational structure focus on maximizing their own accomplishments and rewards was called _____ by Deming. a. suboptimization b. return on quality c. Interlinking d. lean production

a. suboptimization

_____ refers to an examination of facts and data to provide a basis for effective decisions. a. Analysis b. Data warehousing c. Interlinking d. Clustering

a. Analysis

_____ systems are software packages that integrate organizational information systems and provide an infrastructure for managing information across the organization. a. Enterprise resource planning b. Balanced scorecard c. Juran's quality trilogy d. Quincunx experimental

a. Enterprise resource planning

_____ knowledge is easily captured, stored, and disseminated using computer technology. a. Explicit b. Indirect c. Tacit d. Allusive

a. Explicit

Which of the following perspectives of the balanced scorecard measures the ultimate results that the business provides to its shareholders? a. Financial perspective b. Internal perspective c. Innovation perspective d. Customer perspective

a. Financial perspective

Which of the following perspectives of the balanced scorecard directs attention to the basis of a future success —the organization's people and infrastructure? a. Innovation and learning perspective b. Customer perspective c. Financial and internal perspective d. Internal perspective

a. Innovation and learning perspective

Pal's Sudden Service uses an automated data collection, integration, and analysis system called _____ to generate store-level and companywide reports on sales. a. SysDine b. Knowledge Network c. Quincunx d. eTracker

a. SysDine

With respect to the Balrige criteria performance measures, _____ performance indicators include measures of business growth and percentage of new product sales. a. marketplace b. leadership c. governance d. process-based

a. marketplace

Data _____ is the process of searching large databases to find hidden patterns in data. a. mining b. interlinking c. planning d. benchmarking

a. mining

a. suboptimization

service

actions associated with providing service to enhance or maintain the value of the product

Service

actions associated with providing service to enhance or maintain the value of the product.

Marketing and sales

activities are associated with purchases of products and services by end users and the inducements used to get them to make purchases they include advertising, promotion, sales forces, quoting, channel selection, channel relation, and pricing

marketing and sales

activities associated with purchases of products and services by end users and the inducements used to get them to make purchases

Ambidexterity in a strategic context refers to the challenge for a manager to

align resources to take advantage of existing products and explore new opportunities

operations

all activities associated with transforming inputs into the final product form

Operations

all activities associated with transforming inputs into the final product form.

Resources of a firm

all assets, capabilities, organizational processes, info, knowledge, etc. controlled by a firm that enable it to develop and implement value-creating strategies

In a 360 degree evaluation and feedback system, ______ rate a person's skill and performance.

all of the above

In order to fully leverage the talents of the best and brightest employees, a firm should be concerned with _____________.

all of these

The dangers of email include all of the following except A. spreading of rumors. B. almost costless. C. uncontrollable distribution. D. personal time waster

almost costless

knowledge economy

an economy where wealth is created through the effective management of knowledge workers instead of by the efficient control of physical and financial assets

*KEY TERMS* Knowledge economy

an economy where wealth is created through the effective management of knowledge workers instead of by the efficient control of physical and financial assets.

Knowledge economy

an economy where wealth is created through the effective management of knowledge workers instead of by the efficient control of physical and financial assets.

social network analysis

analysis of the pattern of social interactions among individuals

build human capital

attract, develop, retain

Who among the following first developed the concept of a balanced scorecard? a. Edwards Deming b. Art Schneiderman c. Joseph Juran d. Kaoru Ishikawa

b. Art Schneiderman

_____ data refer to industry averages, competitor performance, world-class benchmarks, or performance measures of other organizations with similar product offerings. a. Cross-functional b. Comparative c. Reviewed d. Interlinked

b. Comparative

In the context of managing information resources, the quality of information can be improved by: a. avoiding electronic data capture. b. placing accountability on the creators of data and information. c. using multiple databases whenever feasible. d. using as many intermediaries as possible to handle data.

b. placing accountability on the creators of data and information.

Managing a knowledge intensive workforce is very challenging. The best way for a firm to manage their workforce is to

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

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

In industries like consulting, advertising, and tax preparation, clients tend to be very loyal to individual professionals employed by a firm, instead of the firm itself. This enhances employee _____.

bargaining power

In industries like consulting, advertising, and tax preparation, clients tend to be very loyal to individual professionals employed by a firm, instead of to the firm itself. This enhances employee

bargaining power

Dynamic capabilities include all of the following except:

becoming more efficient in operational processes.

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

bridging relationships

bridging relationships.

Which of the following is most likely to be used to obtain comparative data? a. Interlinking approach b. Cluster analysis c. Benchmarking approach d. Cause-and-effect approach

c. Benchmarking approach

Which of the following organizations is one of the most prominent vendors of ERP software? a. STMicroelectronics b. Convergys c. Oracle d. Analog devices

c. Oracle

The ability to identify and transfer best practices within the organization is sometimes called _____. a. enterprise resource planning b. interlinking c. internal benchmarking d. data mining

c. internal benchmarking

can be accessed only with the consent of the employees.

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

capabilities, knowledge, and skills of an individual

Human capital includes

capabilities, knowledge, and skills of an individual.

Fill in 1 of 3 retention mechanisms: 1. Help employees identify with an organization's mission and value 2. Provide ______ work and a _____ environment 3. Offer financial and nonfinancial rewards & incentives

challenging, stimulating

closure

The resource-based view of the firm suggests that the _________of the firm are due to its endowment of strategic resources that are valuable, rare, costly to imitate, and costly to substitute.

competitive advantages

Major airlines change hundreds of fares daily in response to competitor tactics, which is an example of using_________.

competitive intelligence

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 other non-related products. This skillset is a _______________.

core competency

Current ratio

current assets / current liabilities =

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

3 types of content that can improve the value proposition of a website:

customer feedback, expertise, and entertainment programming

Recent trends that might lead managers of multinational corporations (MNCs) to adopt a more decentralized strategy for their operations would include all of the following, EXCEPT _______.

customer needs, interests, and tastes becoming increasingly similar

Technology can be used to leverage human capital and knowledge within organizations as well as with ____________ and __________ beyond their boundaries. A. employees; clients B. customers; employees C. customers; suppliers D. employees; suppliers

customers; suppliers

d. Enterprise resource planning

Which of the following analytical approach or technology is most likely to be used for data mining? a. Histogram b. Pareto diagram c. Quincunx experiment d. Fuzzy logic

d. Fuzzy logic

Which of the following is not a reason for the rise in regional expansion?

decrease in the number of trading blocs and free trade zones

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.

decreased

ABC, Incorporated desires to have the most qualified people in every position throughout its organization. This is an example of a concern for

developing human capital

dynamic capabilities

The best protection for intellectual property in the long run is likely to be the development of A. new products. B. stronger patents. C. dynamic capabilities. D. international patents

dynamic capabilities.

Diversification initiatives include all of the following except ____________________.

employee rewards

One of the following methods of implementing a differentiation strategy has been greatly enhanced because of Internet technologies. Which one is it?

enabling of mass customization

developing human capital

encourage widespread involvement, mentoring, evaluating

Technology development

every value activity embodies technology The array of tech employed in most firms is very broad, ranging from tech used to prepare documents and transport goods to those embodied in process and equipment or product itself tech development relates to the product and its feature supports the entire value chain, while other tech development is associated with particular primary or support activities

The four key attributes of strategic management do not include

excluding consideration of the trade-offs between efficiency and effectiveness

Human capital includes the capabilities, knowledge, skills and ______________ of an individual.

experience

2. Human capital includes the capabilities, knowledge, skills and ______________ of an individual. A) experience B) tasks C) physical attributes D) personal life

experience (Human capital is the individual capabilities, knowledge, skills, and experience of the company employees and managers. This knowledge is relevant to the task at hand, as well as the capacity to add to this reservoir of knowledge, skills, and experience through learning.)

Name 3 types of knowledge

explicit knowledge, tacit knowledge

Engineering drawings, software code, and patents are examples of Multiple Choice · explicit knowledge. · tacit knowledge. · socially complex processes. · diversification processes.

explicit knowledge.

Engineering drawings, software code, and patents are examples of

explicit knowledge. Page: 127

external; personal

facilitate internal and external collaboration

T/F: A primary weakness of the balanced scorecard is that it fails to complement financial indicators with operational measures of customer satisfaction, internal processes, and the organization's innovation and improvement activities.

false

T/F: An important implication of the balanced scorecard is that managers need to look at their job as primarily balancing stakeholder demands

false

T/F: Attracting top talent is not a challenge for many organizations. In the current economy, knowledge workers typically have a limited number of employment opportunities.

false

T/F: Because primary activities like inbound logistics, operations, and outbound logistics are applicable only to tangible goods, value-chain analysis is not appropriate for service organizations.

false

T/F: Companies have found that referrals from their own employees are not generally an effective approach to recruiting top talent.

false

T/F: Email is an effective means of communicating a wide variety of information and employees should use it extensively for personal reasons.

false

T/F: Firms such as Oracle, Google, and Apple will tend to have a lower ratio of market value to book value than industrial companies such as Nucor Steel.

false

T/F: In value-chain analysis, primary activities include human resource management and procurement

false

T/F: In value-chain analysis, research and development is a broader concept than technology development.

false

T/F: Intangible resources are not as difficult for competitors to imitate as tangible ones

false

4. Today, it is essential for fellow employees to check their emotions and personal life at the door in order for a company to be efficient. A) True B) False

false (Brian Hall, CEO of Values Technology in Santa Cruz, California, documented a shift in emotional expectations from work. From the 1950s on, a task first relationship (tell me what the job is, and let us get on with it) dominated employee attitudes. Emotions and personal life were checked at the door. In the past few years, a relationship-first set of values has challenged the task orientation. Hall believes that it will become dominant. Employees want to share attitudes and beliefs as well as workspace.)

10. Intellectual property rights are easier to define and protect than property rights for physical assets (e.g., plant and equipment). A) True B) False

false (Intellectual property rights are more difficult to define and protect than property rights for physical assets (e.g., plant, equipment, and land). If, however, intellectual property rights are not reliably protected by the state, there will be no incentive to develop new products and services.)

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. colleague

family

Fill in 1 of 3 retention mechanisms: 1. Help employees identify with an organization's mission and value 2. Provide challenging work and a stimulating environment 3. Offer _____ and ______ rewards & incentives

financial, nonfinancial

harder

attracting human capital

hire for attitude train for skill, sound recruiting, attract millenials

Creativity and problem solving ability are considered to be part of _________ capital. A. physical B. human C. social D. emotional

human

retaining human capital

identify with orgs. mission/values, challenging work, financial and non financial rewards

employee bargaining power

if employees are vital to forming a firm's unique capability, they will earn disproportionately high wages

employee replacement cost

if employees' skills are idiosycratic and rare, they should have high bargaining power based on the high cost required by the firm to replace them

Four characteristics of inimtability

if the resource has one of the four it can forestall and sustain profits for awhile to develop strategies around it Physical uniqueness Path dependency Causal ambiguity social complexity

Bridging relationships

in a social network that connect otherwise disconnected people.

Just-in-time systems are considered part of which primary activity in the value chain?

inbound logistics Page: 83

physical uniqueness

inherently difficult to copy: good resort location, mineral rights, etc.

In the balanced scorecard, cycle time, employee skills, and productivity are part of the ______ perspective.

innovation and learning

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. investment capital. D. intangible resources

intangible resources

rights intangible property owned by a firm in the forms of patents, copyrights, trademarks, or trade secrets.

intellectual property

In the balanced scorecard, cycle time, employee skills, and productivity are part of the ______ perspective.

internal

Among the leaders needed for an effective strategic management process are ________, who, although they have little positional power and formal authority, generate their power through the conviction and clarity of their ideas.

internal networkers

Which would be the appropriate strategy for companies to use to compete in the global marketplace if the marketplace pressure is for lower costs with no pressure for local adaptation?

international strategy

Social capital

intra firm connections: ties between employees and groups within the firm enhances retention facilitates knowledge flow and coordination (specifically bridging relationship) building and enhancing trust (specifically higher closure) but at extreme levels, can create group think and narrow search for new ideas

Products are unfamiliar to consumers in the ___________stage of a business life cycle.

introduction

What makes up a firm

it is made up of resources and capabilities there to create, leverage, integrate, and regenerate resources critical resources and core competencies --> sustainable competitive advantages

Company competitive advantage can be eroded for all of the following reasons except one. Which is that reason?

length of time a company is in business

e-team advantage

less restricted by geographic constraints, very effective in generating social capital

low; low

The form of entry strategy into international operations that offers the _______level of control for the domestic corporation would be exporting.

lowest

interrelationships among value chain activities with and across organizations

managers must not ignore the importance of relationships among value chain activities there are two levels: 1. interrelationships among activities within the firm and 2. relationships among activities with the firm and with other stakeholders (e.g. customers and suppliers) that are part of the firm's expanded value chain interrelationships: collaborative and strategic exchange relationships between value chain activities either a. within firms b. between firms. Strategic exchange relationship involve exchange of resources such as info, people, tech, or money that contribute to the success of the firm

manager bargaining power

managers' power is based on how well they create resource-based advantages -generally charged with creating value through the process of organizing, coordinating, and leveraging employees as well as other forms of capital such as plant, equipment, and financial capital

Research shows that which of the following is not a strategy used by firms engaged in successful turnarounds?

market expansion

What do effective vision statements include?

massive inspiration

Emphasis on process design is high during the __________ stage of the industry life cycle.

maturity

Social capital has many potential benefits. However, according to the text, social capital

may or may not be beneficial to a firm

innovation and learning perspective

measures of firm performance that indicate how well firms are changing their product and service offerings to adapt to changes in the internal and external environments

Innovation and learning perspective

measures of firm performance that indicate how well firms are changing their product and service offerings to adapt to changes in the internal and external environments.

customer perspective

measures of firm performance that indicate how well firms are satisfying customers' expectations

Fill in 1 of 3 retention mechanisms: 1. Help employees identify with an organization's ______ and ______ 2. Provide challenging work and a stimulating environment 3. Offer financial and nonfinancial rewards & incentives

mission, value

Intellectual property rights are __________ to define and protect than property rights for physical assets (e.g., plant, equipment, and land). A. easier B. more costly C. more difficult D. less difficul

more difficult

Net profit margin

net income / net sales =

Operating profit margin

operating income / revenue =

All activities associated with transforming inputs into the final product form are known as ______ in the value chain.

operations

intangible resources

organizational assets that are difficult to identify and account for and are typically embedded in unique routines and practices, including human resources, innovation resources, and reputation resources

If a firm is able to achieve above-average returns despite strong competition, it is likely to be using __________ strategy.

overall cost leadership

If primary value chain activities involve effective management of inbound logistics and support activities include increased efforts in technology development, this is representative of which type of competitive advantage?

overall cost leadership

Efficiency killers that London-based International Power identified in their communication using tools from lean manufacturing included A. overproduction and messages. B. underproduction and defects. C. underproduction and ineffective messages. D. overproduction and defects in messages.

overproduction and defects in messages

These kinds of companies create value through management expertise in areas such as budgeting, planning, procurement, and human resource management.

parent

Gerber Products Company brands its baby food and is an example of a resource that is potentially inimitable, making it difficult for competitors to copy. What characteristic of sustainable competitive advantage is involved?

path dependency

The loyalty and trust that Southwest Airlines employees feel toward their firm and its cofounder, Herb Kelleher, are resources that have been built up over a long period of time. What characteristic of sustainable competitive advantage is involved?

path dependency

The loyalty and trust that Southwest Airlines employees feel toward their firm and its cofounder, Herb Kelleher, are resources that have been built up over a long period of time, creating

path dependency. Page: 98

With the _________ lever, the emphasis is on getting the right people to collaborate on the right projects. A. network B. unification C. social D. people

people

resource-based view of the firm

perspective that firms' competitive advantages are due to their endowment of strategic resources that are valuable, rare, costly to imitate, and costly to substitute

Resource-based view of the firm

perspective that firms' competitive advantages are due to their endowment of strategic resources that are valuable, rare, costly to imitate, and costly to substitute combines 2 perspectives: 1. the internal analysis of phenomena within a company and 2. an external analysis of the industry and its competitive environment

e-team disadvantage

process loss, decreased motivation to work hard

Microsoft has improved the ________ part of its value chain by providing formal reviews of its suppliers, which has helped to clarify expectations for them.

procurement

Microsoft has improved the ________ part of its value chain by providing formal reviews of its suppliers, which has helped to clarify expectations for them.

procurement Page: 88

Support activities

procurement, technology development human resource management and general administration either add value by themselves or add value through important relationships with both primary activities and other support activities

The potential for __________ tends to be more prevalent in e-teams than in traditional teams because the geographic dispersion of members increases the complexity of establishing effective interaction and exchanges. A. team harmony B. trust C. profit losses D. profit gains

profit losses

Divesting of businesses can accomplish many different objectives, except ________.

providing the firm with fewer resources to spend on more attractive alternatives

inbound logistics

receiving, storing, and distributing inputs of a product

Inbound logistics

receiving, storing, and distributing inputs of a product.

problem solving/evaluation

refers to the process of identifying problems or needs and generating ideas and action plans to address those needs, typically used in the context of services -eval is primarily product-related

Groupon had to pay IBM 83.5 million USD in damages because it Multiple Choice · refused to take responsibility for the patented IBM technology that it was using. · did not infringe on IBM intellectual property. · overused the IBM technology. · won the patent infringement battle with IBM.

refused to take responsibility for the patented IBM technology that it was using.

relationships among the employees of the firm

The least effective way to retain human capital is to 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.

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

The least effective way to retain human capital is

requiring employees to sign agreements that prevent them from working for competitors in the future

path dependency

resources are unique and therefore scarce bc of all that has happened along the path followed in their development and/or accumulation -must be built over time

What prevent the transfer of valuable and sensitive information outside the organization?

retention mechanisms

Total assets turnover

revenue / total assets =

intellectual property

rights intangible property owned by a firm in the forms of patents, copyrights, trademarks, or trade secrets.

In the ________ view of leadership, the leader is seen as the key force in determining the organization's success or lack thereof.

romantic

dynamic capability abilities

sense and seize new opportunities, generate new knowledge, reconfigure existing assets and capabilities

Primary activities

sequential activities of the value chain that refer to the physical creation of the product or service, its sale and transfer to the buyer, and its service after sale, including inbound logistics, operations, outbound logistics, marketing and sales, and service.

primary activities

sequential activities of the value chain that refer to the physical creation of the product or services, its sale and transfer to the buyer, and its service after sale , including inbound logistics, operations, outbound logistics, marketing and sales, and service

Management, the board of directors, and ______ are the primary participants in corporate governance.

shareholders

IP is characterized by __________ development costs and very ______ marginal costs. A. insignificant; low B. expensive; high C. significant; low D. insignificant; high

significant; low

A potential downside of ________ can arise when an individual uses the contacts they develop to pursue their own interests and agendas that may be inconsistent with the organization objectives.

social capital

Individuals that use the contacts they develop to pursue their own interests and agendas that may be inconsistent with the organization's objectives is one potential downside of

social capital. Page: 144

Structural holes

social gaps between groups in a social network where there are few relationships bridging the groups.

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

sorting/absorbing

Rivalry is intense in nations with conditions of __________ supplier bases, _________consumer demand, and __________ new entrant potential from related industries.

strong; strong; high

360-degree evaluation and feedback systems

superiors, direct reports, colleagues, and even external and internal customers rate a person's performance.

Competitive advantages that are unique, valuable, and difficult for rivals to copy are likely to make these advantages

sustainable

Which of the following is NOT one of the recommended criteria for strategic objectives?

sustainable

New knowledge involves the continual interaction between ________ and ________ knowledge. Multiple Choice · detailed, tacit · tacit, explicit · intellectual, pragmatic · theoretical, practical

tacit, explicit

New knowledge involves the continual interaction between __________ and __________ knowledge.

tacit, explicit

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

tacit; explicit

New knowledge involves the continual interaction between _______ and _____ knowledge

tactic, explicit

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 intangible resources

Which of the following is an IP-heavy industry? A. automobile sales B. telecommunications C. contract manufacturing D. retailing

telecommunications

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

the "Pied Piper effect."

organizational capabilities

the competencies and skills that a firm employs to transform inputs into outputs

Intellectual capital

The industry life cycle is important because ______________.

the emphasis on various generic strategies varies over the course of an industry life cycle

procurement

the function of purchasing inputs used in the firm's value chain, including raw materials, supplies, and other consumable items as well as assets such as machinery, laboratory equipment, office equipment, and buildings

Procurement

Human capital

the individual capabilities, knowledge, skills, and experience of a company's employees and managers.

human capital

the individuals capabilities, knowledge, skills, and experience of a company's employees and managers

social capital

the network of friendships and working relationships between talented people both inside and outside the organization

Social capital

the network of friendships and working relationships between talented people both inside and outside the organization.

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

the relationships among a firm's employees

Which of the following is NOT one of the three levers that can be applied to overcome barriers to effective collaboration?

the search lever

Which of the following is NOT one of the three levers that can be applied to overcome barriers to effective collaboration?

the search lever Page: 141

A recent study of over 300 companies explored how management teams can understand and capitalize on the formal and informal social networks of their employees. Six common types of managers who get stuck in three types of network traps were identified. Which of the following is not one of these network traps? A. the wrong structure B. the wrong relationships C. the wrong behavior D. the wrong business

the wrong business

Many successful firms use internal labor markets. The most important reason they do this is because

they want to keep highly mobile employees motivated and challenged

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

throughout the firm at all levels

Initiatives to develop human capital should be directed __________ to maintain a competitive advantage in the current knowledge economy.

throughout the firm at all levels

At what level in the organization should the strategic management perspective be emphasized?

throughout the organizationvision statements, mission statements, strategic objectives

Debt ratio

total liabilities / total assets =

Managers use __________ for developing human capital.

training

Managers use __________ for developing human capital. Multiple Choice · the trickle-down approach · training · the synchronized method · the cascade approach

training

When firms expand into global markets, they are faced with the choice of reducing costs and/or adapting to the local market. When high pressures exist to lower costs, companies should choose a __________ or __________ in order to compete in the global marketplace.

transnational strategy; global strategy

360-degree feedback systems complement teamwork, employee involvement, and organizational flattening. true or false?

true

T/F: ConAgra and Cargill imitated the meat packing company, Iowa Beef Processors by automating their plants. This reduced the IBP competitive advantage because its capabilities were easily imitated.

true

T/F: In the current economy, reliance on the three traditional financial statements (income statement, balance sheet, and statement of cash flow) has decreased

true

updates on corporate intelligence

Industries in which proportionally more value is added in __________ activities, such as logistics, are more likely to benefit from a global strategy.

upstream

A profit pool can be defined as the total profits in an industry at all points along the industry _____ chain.

value

What is the hierarchy of organizational goals (from the least specific to the most specific)?

vision statements, mission statements, strategic objectives

Factors that may influence sustainability of competitive advantage

volatility of the market capabilities of the competitors competitors' prior commitments degree of control over the rules

According to Herminia Ibarra, a leading scholar in organization behavior, women can improve their professional network by making connections _______ diverse circles that make up their network. Multiple Choice · behind · across · within · outside

within

casual ambiguity

would-be competitors may be thwarted bc it is impossible to disentangle the causes/explanations of either what the valuable resource is or how it can be re-created

Stakeholder symbiosis is in direct contrast with ________ thinking.

zero sum

analysis of the pattern of social interactions among individuals.

Social network analysis

people's dual focus on the performance of their unit (the vertical part of the T) and across boundaries (the horizontal part of the T).

T-shaped management

A major sociocultural trend in the united states is the increased educational attainment by women

TRUE

A primary benefit of the balanced scorecard is that it complements financial indicators with operational measures of customer satisfaction , internal processes and the organizations innovation and improvement activities.

TRUE

An important implication of the balanced scorecard is that managers need NOT look at their job as primarily balancing stakeholder demands.

TRUE

. greater redundancy in knowledge sources

Two software engineers working together on a computer code share their _______ knowledge in order to create new knowledge. A. explicit B. theoretical C. tacit D. easily reproduced

. tacit

. use a pre-interview quiz.

A high percentage of R&D/Revenue ratio indicates a(n) A. strong focus on innovation to improve current products and services. B. inefficiency in the management to focus on new products. C. strong focus on marketing and sales to promote products and services. D. negligent investment toward research and development.

Yes

A project costs $1.5 million in accounting, $1.6 million in payroll, and $2.1 million in rent and overhead. If outsourced, managers found the search cost will be $1.6 million, negotiation cost will be $0.3 million, contracting cost will be $1.1 million, monitoring cost will be $1.6 million, and reinforcement cost will be $1.1 million. Based on the theories of transaction cost economics, should managers vertically integrate?

True

A transnational strategy strives to optimize the trade-offs associated with efficiency, local adaptation, and learning. It seeks efficiency not for its own sake, but as a means to achieve global competitiveness. It recognizes the importance of local responsiveness but as a tool for flexibility in international operations. True or False?

3. What are some of the potential downsides for firms that engage in a "war for talent"?

A war for talent implies that an organization focuses on attracting and retaining talented professionals by offering competitive salaries - usually at least slightly exceeding what the competition offers. This type of human capital development stragety is likely to be expensive and limiting. Professionals take a lot of factors into consideration when accepting a position, and salary is usually not the most important. Therefore it makes sense to attract and retain human capital using appeals besides pay. An alternative to the war for talent is to encourage development of firm-specific characteristics such as an attitude of team-orientation, and identification with the organization's mission and values. Such practices will help firms develop differentiated human capital and limit professionals' focus on finding alternative employment.

A watchmaking company has priced one of its wristwatches at $210. Most of its competitors sell similar watches at $180. Selling anything less than $150 would result in a loss for the company. However, the absolute maximum a customer is willing to pay for it is $170. In this scenario, what is the reservation price of the wristwatch? A. $150 B. $180 C. $170 D. $210

Which of the following statements is true of strategic analysis of operating income? A) Change in operating income from one period to any future period can be subdivided into product differentiation, cost leadership, and growth components. B) Subdividing the change in operating income to evaluate the success of a strategy has no similarity to the variance analysis. C) Management accountants compare actual and budgeted operating performance over the same time periods. D) It focuses on differences in individual categories of costs (direct materials, direct manufacturing labor, and overheads).

A) Change in operating income from one period to any future period can be subdivided into product differentiation, cost leadership, and growth components.

Which of the following statements best relates to the balanced scorecard's learning and growth perspective? A) How will we empower our employees? B) How do we lower costs? C) What processes will increase value to customers? D) How can we obtain greater profits?

A) How will we empower our employees?

________ is a measure of the balanced scorecard's learning-and-growth perspective. A) Information system availability B) Economic value added C) Cost reductions in key areas D) Customer-retention percentage

A) Information system availability

Which of the following is a measure of the balanced scorecard's customer perspective? A) Number of client complaints B) Defect rates C) Number of process improvements D) Revenue growth

A) Number of client complaints

Which of the following is a measure of the balanced scorecard's internal process perspective? A) Service response time B) Customer satisfaction C) Gross profit percentage D) Cost reduction

A) Service response time

Which of the following is NOT an advantage of electronic teams (e-teams)?

A) They can facilitate communication. B) They have the potential to acquire a broader range of human capital. C) They can be effective in generating social capital. D) They're less flexible in responding to unanticipated work challenges. ANSWER: D **If e-team leaders and team members do not know how to combine individual contributions in the most effective manner they will not be able to create a coordinated appropriate response.

3. Companies have found that referrals from their own employees are generally an effective approach to recruiting top talent. A) True B) False

A) True; GE Medical Systems has found that current employees are the best source for new ones. Referral bounties are small compared to the fees that GE typically pays to headhunters for each person hired. Also, when someone refers a former colleague or friend for a job, his or her credibility is on the line. Thus, employees will be careful in recommending people for employment unless they are reasonably confident that these people are good candidates.

6. Intangible resources are more difficult for competitors to imitate as tangible ones. A) True B) False

A) True; Much more difficult than tangible resources for competitors to account for or imitate are intangible resources, which are typically embedded in unique routines and practices that have evolved and accumulated over time.

*PRACTICE QUIZ* 1. Attracting top talent is a challenge for many organizations. In the current economy, knowledge workers typically have limited numbers of employment opportunities. A) True B) False

A) True; One of the most important trends that managers must consider is the significance of the knowledge worker in today's economy. Managers must both recognize the importance of top talent and provide mechanisms to leverage human capital to innovate and, in the end, develop products and services that create value.

1. Attracting top talent is a challenge for many organizations. In the current economy, knowledge workers typically have limited numbers of employment opportunities. A) True B) False

*PRACTICE QUIZ* 1. In value-chain analysis, support activities include human resource management and procurement. A) True B) False

A) True; Support activities in value-chain analysis include procurement, technology development, human resource management, and general administration.

5. Social capital is the friendships and working relationships that are established within the firm. When employees think of themselves as free agents, it helps tie them to the firm. A) True B) False

A) True; The development of social capital (that is, the friendships and working relationships among talented individuals) gains importance when employees consider themselves as free agents, because it helps tie knowledge workers to a given firm.

Successful implementation of a product differentiation strategy will result in ________. A) a large favorable growth and price-recovery components B) a large favorable price-recovery and productivity components C) a large favorable productivity and growth components D) only a large favorable growth component

A) a large favorable growth and price-recovery components

The revenue effect of price recovery is calculated by multiplying the difference in selling price (current year minus the previous year) by ________. A) actual units sold in the current year B) budgeted units sold in the previous year C) budgeted units sold in the current year D) actual units sold in the previous year

A) actual units sold in the current year

The first step to successful balanced scorecard implementation is clarifying the ________. A) organization's vision and strategy B) elements that pertain to value-added aspects of the business C) owner's expectations about return on investment D) objectives of all four balanced scorecard measurement perspectives

A) organization's vision and strategy

According to Alan Davidson, an industrial psychologist, the single best predictor of an employee's future behavior is A) past behavior. B) the individual's IQ. C) academic accomplishments. D) standardized test scores.

A) past behavior.

7. Pfizer pharmaceutical patents provide ________ which supports inimitability. A) physical uniqueness B) path dependency C) causal ambiguity D) social complexity

A) physical uniqueness; One source of inimitability is physical uniqueness, which is inherently difficult to copy. A beautiful resort location, mineral rights, or Pfizer pharmaceutical patents simply cannot be imitated.

8. Which of these is not an example of socially complex organizational phenomena? A) poor firm culture B) interpersonal relations among firm managers C) firm reputation with its suppliers D) good reputation with customers

A) poor firm culture; A wide variety of firm resources may be considered socially complex. Examples include interpersonal relations among the managers in a firm, its culture, and its reputation with its suppliers and customers.

Stewart Corporation plans to grow by offering a sound system, the SS3000, that is superior and unique from the competition. Stewart believes that putting additional resources into R&D and staying ahead of the competition with technological innovations is critical to implementing its strategy. Which of the following terms best describes Stewart's strategy? A) product differentiation B) scalability C) product leadership D) cost leadership

A) product differentiation

Which component of strategy measures the changes in operating income attributed solely to an increase in the quantity of output between Year 1 and Year 2? A) the growth component B) the price-recovery component C) the productivity component D) the cost leadership component

A) the growth component

Managers can reduce capacity-based fixed costs by measuring and managing ________. A) unused capacity B) variable costs C) engineered costs D) discretionary costs

A) unused capacity

Pamela Hirshman, a project manager at Young and Rubicam, 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 emails exchanged by the previous team's members. This is an example of A) using explicit knowledge. B) inefficient use of information management. C) using tacit knowledge. D) all of the above.

A) using explicit knowledge.

Social Network Analysis

Analysis of the pattern of social interactions among individuals. Analysis of communication patterns 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: convey needed resources, have the opportunity to exchange information and support, have the motivation to treat each other in positive ways, and, have the time to develop trusting relationships that might improve the group's effectiveness. Developing SOCIAL CAPITAL requires interdependence among group members. Social capital erodes when people in the network become independent. And increased interactions between members aid in the development and maintenance of mutual obligations in a social network. Social Netowrk Analysis depicts the pattern of interactions among individuals and helps to diagnose effective and ineffective patterns of: Who links to whom within the network or cluster? Who communicates to whom and how effective is this communication? FACTS: There may be some individuals with literally no linkages, and these individuals are typically labeled "ISOLATES." However, most people do have some linkages with others. There are TWO primary types of mechanisms through which social capital flows: 1) closure relationships, where one member is central to the communication flows in a group; and 2) bridging relationships, where one person bridges or brings together groups that would have otherwise been unconnected.

Andrew invested $200,000 in the shares of a company. At the end of a year, he had earned $7,000 as dividends on his shares along with a $1,000 appreciation in the overall value of his shares. However, if Andrew had invested the same amount on an asset, like gold, the appreciation in its value would have earned him $10,000 at the end of the year. In this scenario, which of the following is Andrew's opportunity cost? A. $7,000 . B. $10,000 C. $2,000 D. $200,000

Companies have found that referrals from their own employees are not generally an effective approach to recruiting top talent.

False

5. Because primary activities like inbound logistics, operations, and outbound logistics are applicable only to tangible goods, value-chain analysis is not appropriate for service organizations. A) True B) False

B) False; The concepts of inbound logistics, operations, and outbound logistics suggest managing raw materials that are manufactured into finished products and delivered to customers. However, these steps do not apply only to manufacturing. They correspond to any transformation process in which inputs are converted into outputs that add value.

9. Despite geographic or time separation of members, electronic teams are not very effective in generating social capital. A) True B) False

B) False; There are multiple advantages of e-teams. For one, e-teams can be very effective in generating social capital, the quality of relationships and networks that leaders and team members form. Such capital is a key lubricant in work transactions and operations. Given the broader boundaries associated with e-teams, members and leaders generally have access to a wider range of social contacts than would be typically available in more traditional face-to-face teams.

________ are the subdivisions of income that management accountants use for the strategic analysis of operating income. A) Growth, price-recovery and cost leadership components B) Growth, price-recovery and productivity components C) Cost leadership, price-recovery and productivity components D) Growth, cost leadership and productivity components

B) Growth, price-recovery and productivity components

Which of the following statements best relates to the balanced scorecard's financial perspective? A) How can we maximize profits for the current year? B) How can we increase shareholder value? C) How will we achieve continuous improvements? D) How can we maximize customer satisfaction?

B) How can we increase shareholder value?

________ is a measure of the balanced scorecard's internal-business-process perspective. A) Market share B) Manufacturing downtime C) Return on investment D) Number of customer complaints

B) Manufacturing downtime

What is the term that describes an organization's ability to offer products or services that are perceived by its customers as being superior and unique relative to those of its competitors? A) Strategy B) Product differentiation C) Cost leadership D) The balanced scorecard

B) Product differentiation

_______________ can be defined as the "network of relationships that individuals have throughout the organization." A) Human capital B) Social capital C) Intellectual capital D) Tacit knowledge

B) Social capital

Which of the following statements is true of a balanced scorecard? A) The balanced scorecard reduces managers' emphasis on long-run financial performance. B) The balanced scorecard reduces managers' emphasis on short-run financial performance. C) The primary goal of using the balanced scorecard is to sustain short-run financial performance. D) The primary goal of using the balanced scorecard is to sustain short-run nonfinancial performance.

B) The balanced scorecard reduces managers' emphasis on short-run financial performance.

Which of the following statements is of true engineered costs? A) They arise from periodic (usually annual) decisions regarding the maximum amount to be incurred. B) They have a detailed, physically observable, and repetitive relationship with output. C) They include advertising, executive training, and R&D. D) They have high level of uncertainty.

B) They have a detailed, physically observable, and repetitive relationship with output.

Which of the following is NOT an engineered cost? A) direct material cost of a major component of the product B) advertising costs for a new product that the factory will start producing C) the cost of direct laborers who work in the factory D) depreciation of all factory tools

B) advertising costs for a new product that the factory will start producing

B) closure within the departments and a structural hole between them; With closure, many members have relationships (or ties) with other members. Structural holes refer to the social gap between two groups. When they occur in business, managers typically refer to them as silos or stovepipes. Sales and engineering are a classic example of two groups whose members traditionally interact with their peers rather than across groups.

When analyzing the change in operating income, the strategy component of price-recovery ________. A) calculations are similar to the efficiency-variance calculations B) compares the change in output price with the changes in input prices C) will report a large positive amount when a company has successfully pursued the cost leadership strategy D) isolates the change attributed solely to an increase in production efficiencies

B) compares the change in output price with the changes in input prices

The time taken to fulfill clients' requests is an example of the ________ measure of a balanced-scorecard. A) internal business process perspective B) customer perspective C) learning and growth perspective D) financial perspective

B) customer perspective

Recently, in developed countries, 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) decreased C) remained the same D) no correlation when

B) decreased

Executive training costs is an example of ________. A) engineered costs B) discretionary costs C) downsizing costs D) rightsizing costs

B) discretionary costs

In general, profit potential of an organization decreases with ________. A) lesser competition and stronger potential entrants B) greater competition and stronger potential entrants C) lesser competition and weaker potential entrants D) greater competition and weaker potential entrants

B) greater competition and stronger potential entrants

Conversion costs are an example of ________. A) direct engineered costs B) indirect engineered costs C) discretionary costs D) unused capacity costs

B) indirect engineered costs

Stewart Corporation plans to grow by offering a sound system, the SS3000, that is superior and unique from the competition. Stewart believes that putting additional resources into R&D and staying ahead of the competition with technological innovations is critical to implementing its strategy. To further company strategy, measures on the balanced scorecard would most likely include ________. A) number of process improvements B) manufacturing quality C) yield D) an increase in operating income from productivity gains

B) manufacturing quality

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

B) may or may not be beneficial to a firm.

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

B) requiring employees to sign agreements that prevent them from working for competitors in the future.

7. A potential downside of ________ can arise when an individual uses the contacts they develop to pursue their own interests and agendas that may be inconsistent with the organization objectives. A) electronic teams B) social capital C) social network analysis D) mentoring

B) social capital; In the development of social capital, individuals may use the contacts they develop to pursue their own interests and agendas that may be inconsistent with the organization goals and objectives. Thus, they may distort or selectively use information to favor their preferred courses of action or withhold information in their own self-interest to enhance their power to the detriment of the common good.

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) sorting/absorbing. C) developing. D) retaining.

B) sorting/absorbing.

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

B) tangible resources to intangible resources.

In an 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) the "Pied Piper effect." C) strategically competitive hiring. D) the "tech exit" effect.

B) the "Pied Piper effect."

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

B) the organization's mission and values align with the employee's 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) an employee's individual abilities. B) the relationships among a firm's employees. C) a firm's allocation of financial resources. D) an individual's knowledge.

B) the relationships among a firm's employees.

In a strategy map, a strategic objective where many ties spur out from it resulting in the achievement of many strategic objectives is called ________. A) distinctive objectives B) trigger point C) focal points D) orphan objectives

B) trigger point

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) use a pre interview quiz or "bozo filter" (e.g., Cooper Software). C) only let lower level employees interview job candidates. D) refrain from hiring by referrals of present employees.

B) use a pre interview quiz or "bozo filter" (e.g., Cooper Software).

Compared to money, labor, and capital equipment, knowledge is always the easiest to manage.

False

An organization that is using the product differentiation approach would most likely do which of the following? A) focus on tight cost control to create a reputation of saving its customers money B) use innovative research and development and develop effective promotional campaigns to increase customer loyalty and charge higher prices C) provide products that are similar to competitors D) offer products at a lower cost than competitors

B) use innovative research and development and develop effective promotional campaigns to increase customer loyalty and charge higher prices

B. The team consisted of only Finnish scientists.

Managing a knowledge intensive workforce is very challenging. The best way for a firm to manage its 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 company value is in intellectual and human assets, the difference between the market value and book value of the company 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

In social network analysis, the importance of ties connecting heterogeneous people that help to ensure a wide range of diversity in information and perspective is known as ___________. A. closure B. bridging relationships C. redundancy D. social supports

B. bridging relationships

Tacit 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

Creativity and problem solving ability are considered to be part of ____________. A. physical capital B. human capital C. social capital D. emotional capital

B. human capital

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 members of the team. 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

B. social relationships

What is the difference between book value and market value? Which is more important to decision making?

Book Value: the balance sheet value of the assets, liabilities and equity. Market Value: True value, the price at which the assets, liabilities, or equity can actually be bought or sold. Market value is usually more important because it is more up to date.

A SWOT analysis alone __________ helps a firm develop competitive advantages that it can sustain over time. A. usually B. often C. rarely D. regularly

In an interview with Lise Saari, former director of global workforce research at IBM, she notes that HR must be a true partner of the business, with a deep and up-to-date understanding of business realities and objectives, and must ensure HR initiatives fully support them at all points of the value chain. This is an example of: A. relationships among activities within the firm and with other stakeholders. B. relationships between firms. C. interrelationships among activities within the firm. D. interrelationships among firm

In contrast to __________ interactions, which allow the firm to gain insights on the needs of a particular customer, ___________ offers the opportunity to leverage the wisdom of a larger crowd. A. consumer; sourcing B. prosumer; outsourcing C. prosumer;crowdsourcing D. marketing; crowdsourcing

In order to be considered strategic resources that contribute competitive advantage, they must have several characteristics. Which of the following is not one of these? A. rare B. valuable C. inexpensivetoimitate D. costly to substitute

In terms of value chain analysis, a telephone operating company would find that negotiating and maintaining ongoing relations with regulatory bodies are important activities for achieving A. returns on investment. B. customer awareness. C. competitive advantage. D. better employees.

Intangible resources are typically embedded in ________ routines and practices that have evolved and accumulated over time A. rare B. standard C. unique D. obvious

Making comparisons between a firm and its most direct rivals is useful because firms within the same strategic industry group have _______ strategies. A. different B. thesame C. similar D. relative

Protecting company intellectual property can be difficult because employees become disgruntled and patents A. are expensive. B. cannot be protected. C. expire. D. roll over.

Sharing knowledge and information throughout the organization can be a means of A. conserving products and services. B. continuing with outdated products. C. conserving resources. D. overusing email.

Sometimes firms become preoccupied with _________ or a key feature of the product or service they are offering and ignore other factors needed for competitive success. A. multiple strengths B. multiple opportunities C. a singles trength D. a single opportunity

The best protection for intellectual property in the long run is likely to be the development of A. new products. B. stronger patents. C. dynamic capabilities. D. international patents

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

The resource-based view (RBV) of the firm combines the following 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

Which of the following statements is true of the internal-business-process perspective of a balanced scorecard? A) Internal-business-process perspective is composed of three subprocesses: innovation process; learning-and-growth process; and post sales-service process. B) Internal-business-process perspective evaluates the profitability of the strategy and the creation of shareholder value. C) Internal-business-process improvement targets are often determined after benchmarking against an organization's main competitors standards. D) Internal-business-process perspective is composed of three subprocesses: operations process; learning-and-growth process; and post sales-service process.

C) Internal-business-process improvement targets are often determined after benchmarking against an organization's main competitors standards.

Which of the following could be a measure of the balanced scorecard's financial perspective? A) Service response time B) Number of new patents C) Operating income D) Defect rates

C) Operating income

________ is a measure of the balanced scorecard's financial perspective. A) Service response time B) Number of new patents C) Operating income D) Defect rates

C) Operating income

Assuming previous year's production capacity was adequate to produce current year output, the cost effect of growth for fixed costs is calculated by multiplying the difference between ________ by price per unit of capacity in the previous year. A) actual units of capacity in current year and actual units of capacity in previous year B) capacity units required to produce current year output in previous year and the current year capacity units C) actual units of capacity in previous year and actual units of capacity in previous year D) capacity units required to produce previous year output in current year and the previous year capacity units

C) actual units of capacity in previous year and actual units of capacity in previous year

Engineered costs ________. A) possess a high level of uncertainty but are significant costs when they are incurred B) are non repetitive but are physically observable C) are from physically observable activities and have a repetitive relationship with output D) are embedded in the manufacturing process but have no measurable cause-and-effect relationship between output and resources used

C) are from physically observable activities and have a repetitive relationship with output

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) attract the brightest employees. C) balance efforts in the attraction, selection, and retention of top talent. D) weed out less effective employees.

C) 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 smaller than C) be larger than D) not be correlated with

C) be larger than

According to the textbook, many firms try to protect their human capital and diversify the ownership of their vital knowledge by all of the following means except A) emphasizing teamwork. B) by developing learning programs. C) by recruiting talented individuals from the best research institutions. D) by shackling employees with "golden handcuffs."

C) by recruiting talented individuals from the best research institutions.

Data mining is the most effective method of establishing cause and effect relationship among variables.

False

Social network analysis is helpful because the configuration of the group member 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

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 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

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

C. similarity in perspectives argument

The network of relationships that individuals have throughout the organization is known as _____. A. human capital B. intellectual capital C. social capital D. tacit knowledge

C. social capital

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

In an 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

Developing human capital is essential to maintaining a competitive advantage in the current 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

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

Internal business perspective

Customer-based measures are important. However, they must be translated into indicators of what the firm must do internally to meet customers' expectations. Excellent customer performance results from processes, decisions, and actions that occur throughout organizations in a coordinated fashion, and managers must focus on those critical internal operations that enable them to satisfy customer needs. The internal measures should reflect business processes that have the greatest impact on customer satisfaction. These include factors that affect cycle time, quality, employee skills, and productivity

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. investment capital. D. intangible resources.

Changes in our economy have forced firms to be ____________ concerned with protecting their knowledge workers, social capital, and intellectual capital. A. less B. more C. potentially D. not

Company __________, no matter how unique or impressive, may not enable it to achieve a competitive advantage in the marketplace. A. strengths and opportunities B. strengths and threats C. opportunities D. strengths and capabilities

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

Financial ratio analysis measures the performance of the firm based on all but which of the following? A. balance sheet B. market valuation C. income statement D. industry comparison

Four factors help explain the extent to which employees and managers will be able to obtain a proportionately high level of the profits that they generate. Which is not one of these factors? A. employee bargaining power B. employee replacement cost C. employee exit costs D. competitor bargaining power

Human capital and social capital are vital for superior firm performance. If a firm has strong human capital, the firm may exploit this by building social capital. This can be accomplished by 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.

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

Which of the following questions best relates to the balanced scorecard's internal business processes perspective? A) How do we streamline operations to lower costs to increase profits? B) How do we motivate employees so that they can become more productive? C) How can we increase our market share? D) How can our processes be executed in such a way as to l increase value to customers?

D) How can our processes be executed in such a way as to l increase value to customers?

Which of the following statements is true of discretionary costs? A) They arise from day-to-day operational decisions. B) They include conversion cost, direct material costs. C) They have measurable cause-and-effect relationship between output and resources used. D) They have high level of uncertainty.

D) They have high level of uncertainty.

Which of the following statements is a possible pitfall while implementing a balanced scorecard? A) Managers using cost-benefit considerations while designing a balanced scorecard. B) Managers ignoring objective measures as market share, manufacturing yield. C) Managers using subjective measures in the balanced scorecard. D) Top management ignoring nonfinancial measures when evaluating employee performance.

D) Top management ignoring nonfinancial measures when evaluating employee performance.

Among the downsides of social capital is/are: A) high social capital may breed "groupthink," i.e., a tendency not to question shared beliefs. B) socialization processes whereby individuals are socialized into the norms and values of the organization may become expensive. C) individuals may become less willing to collaborate on joint projects. D) a and b

D) a and b

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) make their work environment less stimulating. D) adopt effective retention strategies.

D) adopt effective retention strategies.

Assuming previous year's production capacity was inadequate to produce current year output, the cost effect of growth for fixed costs is calculated by multiplying the difference between ________ by price per unit of capacity in the previous year. A) capacity units required to produce previous year output in current year and the current year capacity units B) capacity units required to produce current year output in previous year and the current year capacity units C) capacity units required to produce previous year output in current year and the previous year capacity units D) capacity units required to produce current year output in previous year and the previous year capacity units

D) capacity units required to produce current year output in previous year and the previous year capacity units

An operating income analysis of Fast Processing Company revealed the following: Operating income for 2017 $1,207,000 Add growth component 102,000 Deduct price-recovery component (95,000) Add productivity component 90,000 Operating income for 2018 $1,304,000 Fast's operating income gain is consistent with the ________. A) product differentiation strategy B) product leadership strategy C) cost differentiation strategy D) cost leadership strategy

D) cost leadership strategy

The cost effect of productivity for variable costs is calculated by multiplying the difference in actual input units used to produce current year output and units of input required to produce current year output in previous year by the ________. A) price per input unit of previous year B) price per unit of capacity in the previous year C) price per unit of capacity in the current year D) price per input unit of current year

D) price per input unit of current year

Which of the following is NOT a discretionary cost? A) the cost of social networking activities to promote a product B) the cost of total quality management training for executives C) legal costs D) the cost to train factory general managers to use a new activity based management system

D) the cost to train factory general managers to use a new activity based management system

T/F Campbell Soup uses an electronic network to facilitate its continuous-replenishment program with its most progressive retailers. This is known as an operation primary activity in the value chain

FALSE

Overcoming Barriers to Collaboration

Effective collaboration requires overcoming barriers: 1) The not-invented-here or hoarding barrier people aren't willing to provide help). 2) The search barrier (people are unable to find what they're looking for). 3) The transfer barrier (people are unable to work with people they don't know well). People don't collaborate for various reasons. Barriers need to be overcome before effective collaboration can take place. Different barriers require different solutions. MOTIVATIONAL barriers require leaders to pull levers that make people more willing to collaborate. ABILITY barriers mean that leaders need to pull levers that enable motivated people to collaborate throughout the organization. To encourage collaboration, leaders can choose a mix of THREE levers: 1) Unification levers, which create compelling common goals & articulate a strong value of cross- company teamwork. 2) People levers, which get the right people to collaborate on the right projects through T-shaped management. 3) Network levers, which build nimble interpersonal networks across the company.

Social Networks

Effective social networks provide advantages for the firm AND for an individual's career advancement: 1) Access to PRIVATE INFORMATION communicated in the context of personal relationships. 2) Access to PUBLIC INFORMATION from sources such as the Internet. 3) Access to diverse skill sets - trading information or skills with people whose experiences differ from your own. 4) Access to power. Using NETWORKS to share information and develop products and services, such as: 1) E-MAIL, an effective means of communicating a wide variety of information. It is quick, easy, and almost costless, however it can be excessive, and embarrassing if one is not careful. 2) ELECTRONIC TEAMS, a team of individuals that completes tasks primarily through e-mail communication. However, such teams require members who can identify those among them with the most appropriate knowledge and resources; and members need to know how to combine individual contributions in the most effective manner for a coordinated and appropriate response. "Process losses" prevent teams from reaching high levels of performance because of inefficient interaction dynamics among team members. 3) INTRA-COMPANY NEWS FEED

Four factors help explain the extent to which employees and mangers will be able to obtain a proportionately high level of profits that they generate

Employee bargaining power Employee replacement cost Employee exit costs manager bargaining power

Executives need to eliminate email completely

Although changes in the general environment may often adversely or favorably impact a firm, they seldom alter an entire industry

FALSE

An end users switching costs are potentially much higher because of the internet

FALSE

Competitive intelligence generally does not benefit very much from gathering information on competitors from sources in the public domain

FALSE

Corporate level strategy addresses how firms compete and outperform their rivals as well as achieve and sustain competitive advantages

FALSE

Employee exit cost is a factor that can increase an employee's bargaining and help him or her appropriate a firms profits

FALSE

Nortel like other firms, suffered from a drop in overall industry demand for telecommunications equipment during 2000 and 2001. This is an example of the "romantic" perspective of leadership.

FALSE

One advantage of SWOT analysis is that it helps managers to identify strengths that are almost sources of competitive advantages that are sustainable

FALSE

Porters Five Forces Analysis is a dynamic tool for analyzing industry attractiveness

FALSE

Porters Five Forces model is designed to help us understand how social attitudes and cultural values impact US businesses

FALSE

Rivalry is most intense when there are high exit barriers and high industry growth

FALSE

Stockholders in a company are the only individuals with an interest in the financial performance in the company

FALSE

Support activities provide support for primary activities but not each other.

FALSE

Ratio of Market Value to Book Value

FINANCIAL STATEMENTS are useful for investors and can establish a company's market value, but this may not be the same as the value that accountants ascribe to it - the book value of the firm. The GAP between a firm's market value and book value is far greater for knowledge intensive corporations than for firms with strategies based primarily on TANGIBLE assets. The MARKET VALUE of a firm is equal to the value of a share of its common stock times the number of shares outstanding. The BOOK VALUE of the firm is primarily a measure of the value of its tangible assets. It can be calculated by the formula: >>>> total assets minus total liabilities.

A franchise generally expires after a few years; a license is designed to last even longer.

False

A golden parachute is a prearranged contract with managers specifying that, in the event of a hostile takeover, the target company managers will not be paid a significant severance package.

False

A good balanced scorecard contains only leading measures and indicators.

False

A multidomestic strategy is the most appropriate strategy for international operations, because it drives economies of scale as far as possible and provides a middle-of-the-road product that appeals to the smallest number of consumers in every market.

False

A profit pool is defined as the total revenue in an industry at all points along the industry supply chain.

False

Among the disadvantages of acquisitions are the inexpensive premiums that are frequently paid to acquire a business.

False

An emphasis on machine utilization in an organization encourages having fewer, but larger, general-purpose machines, which results in decreased inventory and throughput time.

False

An important implication of the balanced scorecard is that managers need to look at their job as primarily balancing stakeholder demands.

False

Attracting top talent is not a challenge for many organizations. In the current economy, knowledge workers typically have a limited number of employment opportunities.

False

Attracting top talent is not a challenge for many organizations. In the current economy, knowledge workers typically have a limited number of employment opportunities. True or False

False

Because primary activities like inbound logistics, operations, and outbound logistics are applicable only to tangible goods, value-chain analysis is not appropriate for service organizations.

False

Business level strategy addresses two related issues: what businesses should a corporation compete in and how can these businesses be managed so that they create synergy.

False

6. What are the advantages and disadvantages of conducting a financial ratio analysis of a firm? 7. Summarize the concept of the balanced scorecard. What are its main advantages?

Financial ratios enable a firm to obtain a quick assessment of its overal performance. There are three comparisons that lend themselves to financial ratio analysis. First is historical comparisons, or the trend in various financial ratios over time. Second is comparison with industry norms, which enables a firm to determine whether or not it looks competitive within the industry. Third is comparison with competitors, which provides a set of benchmarks that track the firm's competitiveness. Financial ratio analysis has limitation. First is the quality of the accounting data on which the ratios are calculated. Second, the ratios do no provide any direction as to how managers should invest resources to generate future sustainable competitive advantages.

Substitutability may take at least two forms

First, though it may be impossible for a firm to imitate exactly another firm's resource, it may be able to substitute a similar resource that enables it to develop and implement the same strategy. Clearly, a firm seeking to imitate another firm's high-quality top management team would be unable to copy the team exactly. However, it might be able to develop its own unique management team. Though these two teams would have different ages, functional backgrounds, experience, and so on, they could be strategically equivalent and thus substitutes for one another Second, very different firm resources can become strategic substitutes. For example, Internet booksellers such as Amazon.com compete as substitutes for brick-and-mortar booksellers such as Barnes & Noble. The result is that resources such as premier retail locations become less valuable

Firm resources and sustainable competitive advantages

For a resource to provide a firm with the potential for a sustainable competitive advantage, it must have four attributes: First, the resource must be valuable in the sense that it exploits opportunities and/or neutralizes threats in the firm's environment. Second, it must be rare among the firm's current and potential competitors. Third, the resource must be difficult for competitors to imitate Fourth, the resource must have no strategically equivalent substitutes. recall that resources and capabilities must be rare and valuable as well as difficult to imitate or substitute in order for a firm to attain competitive advantages that are sustainable over time.

Free Spirit Communications Inc. is a cellular service provider that charges its customers $1 for three hours of talk time. So, if a customer's talk time for a month is 60 hours, the company charges him or her $20 at the end of the month. Which of the following business models does this best illustrate? A. razor-razor-blade B. subscription-based C. pay-as-you-go D. freemium

Business models can be defined as methods companies use to create value and earn profits in a competitive enviroment

TRUE

Protecting Intellectual Assets

INTELLECTUAL PROPERTY RIGHTS are more difficult to define and protect than property rights for physical assets. Unlike physical assets, intellectual property can be stolen. If intellectual property rights are NOT reliably protected by the state, there will be no incentive to develop new products and services. Intellectual property rights are INTANGLIBLE property owned by a firm in the forms of patents, copyrights, trademarks, or trade secrets. Protecting a firm's intellectual property requires a concerted effort on the part of the company. Effective protection of intellectual property is necessary before any investor will finance such an intricate undertaking. Intellectual property is characterized by significant development costs and very low marginal costs. Once developed, though, the reproduction and distribution cost (or variable costs) may be almost zero. DYNAMIC CAPABILITIES involve the capacity to build and protect a competitive advantage. This requires knowledge, assets, competencies, and complementary assets & technologies. It also requires the ability to sense & seize new opportunities, generate new knowledge, and reconfigure existing assets & capabilities. Dynamic capabilities include internal processes & routines that enable product development, strategic decision-making, alliances, or acquisitions. **Dynamic capabilities are about the ability of an organization to challenge the conventional wisdom within its industry and market, learn and innovate, adapt to the changing world, and continuously adopt new ways to serve the evolving needs of the market.

Employee bargaining power

If employees are vital to forming a firm's unique capability, they will earn disproportionately high wages. For example, marketing professionals may have access to valuable information that helps them to understand the intricacies of customer demands and expectations, or engineers may understand unique technical aspects of the products or services. Additionally, in some industries such as consulting, advertising, and tax preparation, clients tend to be very loyal to individual professionals employed by the firm, instead of to the firm itself. This enables them to "take the clients with them" if they leave. This enhances their bargaining power.

A firms financial position should not be analyzed in isolation

Important reference points are needed. We will address some issues that must be taken into account to make financial analysis more meaningful: historical comparisons comparisons with industry norms and comparisons with key competitors.

In 2014, Apple had a return on revenue of 29.3 percent, and Microsoft had a return on revenue of 32 percent. Even so, Apple had a higher return on invested capital than Microsoft. Why did this happen? A. Apple had a higher cost structure than Microsoft. B. Apple was able to charge a much higher margin for its products and services than Microsoft. C. Apple spent more on research and development and marketing and sales than Microsoft. D. Apple had a much higher selling, general, and administrative expense that Microsoft.

C: "question marks" can be converted to stars if market share is increased

In managing a firm's 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 but can provide excess cash to fund other opportunities. C. "question marks" can be converted to "stars" if market share is increased. D. "cash cows" require substantial cash outlays to maintain current market share.

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

Organizationally exploitable

Is the firm organized, ready, and able to exploit the resource/capability?" "Is the firm organized to capture value? You need to have other attributes (like the one below) to be valuable. complementary assets physical resources - must have enough to exploit the value financial resources - must have enough to exploit the value human resources - must have enough to exploit the value organization cultures - must have enough to exploit the value if your missing any of these, you cannot exploit the the value of your resources

Which of the following is not a motivation for a company to pursue international expansion?

It wishes to decrease foreign market penetration by developing products for the home market.

Developing Human Capital

It's not enough to hire top level talent and expect that the skills and capabilities of those employees remain current throughout the duration of their employment. Rather, training and development must take place at all levels of the organization. MENTORING is traditionally viewed as a program to transfer knowledge and experience from more senior managers to up-and-comers. Mentoring can help recruit qualified managers, decrease turnover, fill senior level positions with qualified professionals, enhance diversity initiatives with senior-level management, and facilitate organizational change efforts. A SPONSOR is someone in a senior position who's willing to advocate for and facilitate career moves, make introductions to the right people, translate and teach the secret language of success to their protégé. SYSTEMS for monitoring progress and tracking development need to evaluate the softer dimensions of communications and social skills, values, beliefs, and attitudes.

Dynamic capabilities may be one of the best ways that a firm can protect its intellectual property. Dynamic capabilities are related to the entrepreneurial side of the firm and are built within a firm through its environmental and technological sensing apparatus, its choices of organizational form, and its collective ability to strategize. Dynamic capabilities are about the ability of an organization to challenge the conventional wisdom within its industry and market, learn and innovate, adapt to the changing world, and continuously adopt new ways to serve the evolving needs of the market.

Just read.....

Central Role of Knowledge

KNOWLEDGE MANAGEMENT is critical to organizational success. Knowledge includes: EXPLICIT KNOWLEDGE, which is knowledge that is codified, documented, easily reproduce, and widely distributed. It can be reused many times at a very low cost. TACTIC KNOWLEDGE, which is knowledge that is in the minds of employees and is based on their experiences and backgrounds. It is embedded in personal experience and shared only with the consent and participation of the individual. New knowledge is constantly created through the continual interaction of explicit and tacit knowledge. Another important issue is the role of "socially complex processes," which include leadership, culture, and trust. These processes play a central role in the creation of knowledge. They represent the glue that holds the organization together and helps to create a working environment where individuals are more willing to share their ideas, work in teams, and, in the end, create products and services of value.

Kerry the Kangaroo Inc. specializes in producing and selling a stuffed kangaroo named Kerry. Although the stuffed kangaroo has sold well, the clothes that can be bought to dress the kangaroo have not sold as well as expected. As a result, Kerry the Kangaroo has warehouses full of hats, pants, sweaters, and shoes to dress Kerry. This firm used a _____ to determine how much of its capital is tied up in these accessory items. A. payables turnover B. receivables turnover C. fixed asset turnover D. inventory turnover

Buyer power tends to be higher if the suppliers provide undifferentiated or standard products

TRUE

Effective leadership can play a large role in fostering corporate entrepreneurship. Corporate entrepreneurship can have a very positive impact on a firms bottom line.

TRUE

Financial perspective

Measures of financial performance indicate whether the company's strategy, implementation, and execution are indeed contributing to bottom-line improvement. Typical financial goals include profitability, growth, and shareholder value. Periodic financial statements remind managers that improved quality, response time, productivity, and innovative products benefit the firm only when they result in improved sales, increased market share, reduced operating expenses, or higher asset turnover

Retention of Human Capital

RETENTION MECHANISMS must prevent the transfer of valuable and sensitive information outside the organization: - Help employees identify with an organization's mission and values - Provide challenging work and a stimulating environment - Offer financial and nonfinancial rewards & incentives >>>Money is not the most important reason why people take or leave jobs. Leaders can either provide the work environment and incentives to keep productive employees and management from wanting to bail out, or they can use legal means such as employment contracts and noncompete clauses. Firms must prevent the transfer of valuable and sensitive information outside the organization. Failure to do so would be the neglect of the leaders' fiduciary responsibility to shareholders. Exodus of employees can erode a firm's competitive advantage. A cohesive culture, challenging work, and valued rewards are all vital organizational control mechanisms for retaining human capital.

3. How can managers create value by establishing important relationships among the value-chain activities both within their firm and between the firm and its customers and suppliers?

Relationships among value chain activities can improve firm operations, leading to better quality products or lower costs. For example, the HR mgmt practice of encouraging transfer of employees across divisions can improve employee morale, transfer of information and ideas across divisions, and thereby improve operations. A relationship between inbound logistics and suppliers can lead to implementation of just-in-time mgmt, which can reduce inventory cost and improve product quality.

*SUMMARY REVIEW QUESTIONS* 1. SWOT analysis is a technique to analyze the internal and external environment of a firm. What are its advantages and disadvantages?

SWOT provides a useful starting point for improving firms and better positioning them for success. However, SWOT is a limited techinique with at least 4 problems. First, SWOT may identify strengths, but these do not always translate into competitive advantages. To generate competitive advantages, firms have to understand the source of their strengths and focus resources on developing them. Second, SWOT has a too narrow focus on the external environment. Often, a firm's future growth comes from peripheral or emerging parts of the market. Third, SWOT is static. Over time, all aspects of a firm's environment may change, and SWOT does not offer insights into the processes that cause the change, or how a firm needs to adapt to a dynamic environment. Fourth, SWOT may overemphasize single strategic dimension. This overemphasis may lead to neglect of other important factors that affect a firm's performance.

_______ can be defined as the "network of relationships that individuals have throughout the organization."

Social capital

the network of friendships and working relationships between talented people both inside and outside the organization.

Social capital

4. Discuss the need for managers to use social capital in leveraging their human capital both within and across their firm.

Social capital is the network of relationships and friendships among talented professionals both inside and outside the organization. Human capital can, in theory, be developed without any interaction between professionals in an organization. However, most activities in firms require professionals to work in combinations, each lending different types of expertise to completing projects. Social capital also recognizes that workplace interactions involve friendships and mutual respect that motivate professionals, encourage loyalty and facilitate learning and human capital development. Social capital also helps to attract and retain talent. Because social capital also characterizes interpersonal relationships across firms, it helps the firm to work with suppliers, buyers, and other partners through joint projects and information exchange. Managers can take network theory into account when developing social capital. They can put key individuals in positions with high centrality. Specific groups can be managed with closure in order to limit the unwanted spread of sensitive information. And in cases where barriers prevent key groups from interacting, thus creating structural holes, managers can create bridging relationships that will give other groups access to an optimal range of information and talent.

knowledge that is in the minds of employees and is based on their experiences and backgrounds.

Tacit knowledge

can be accessed only with the consent of the employees because it is in the minds of the employees

Tactic Knowledge

Taking advantage of the pricing flexibility inherent in the wholesale model, Amazon offered many books (especially ebooks) below the cost that other retailers had to pay to publishers. By doing this, Amazon showed how business models can be affected through A. combination. B. evolution. C. disruption. D. combustion.

5. Discuss the key role of technology in leveraging knowledge and human capital.

Technology can be used to share information, increase collaboration, and codify knowledge. For sharing information, email has the advantage of being nearly costless and spanning geographical boundaries. Videoconferencing is increasingly being used to mimic face-to-face meetings across large distances. For increasing collaboration, email, videoconferencing, and internal networks enable formation of electronic teams, or teams that complete tasks primarily through electronic communication. Electronic teams can span geographic regions, departments within the organization, or even enable collaboration with suppliers or buyers. For codifying knowledge, technology enables the creation of in-house databases that can be used to solve problems. For example, if one professional develops a solution to a problem and then codifies it, then the codified solution can be used to help solve future problems of that type. All these practices enhance firms' knowledge and human and social capital.

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

VRIO

The Question of Value: "Is the firm able to exploit an opportunity or neutralize an external threat with the resource/capability?" The Question of Rarity: "Is control of the resource/capability in the hands of a relative few?" The Question of Imitability: "Is it difficult to imitate, and will there be significant cost disadvantage to a firm trying to obtain, develop, or duplicate the resource/capability?" The Question of Organization: "Is the firm organized, ready, and able to exploit the resource/capability?" "Is the firm organized to capture value?

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

Intellectual Capital

The difference between the market value of the firm and the book value of the firm, including assets such as reputation, employee loyalty and commitment, customer relationships, company values, brand names, and the experience and skills of employees. Intellectual capital is a measure of the value of a firm's INTANGIBLE assets - the difference between a firm's market value & book value. It includes these assets: 1) Reputation 2) Employee loyalty & commitment 3) Customer relationships 4) Company values 5) Brand names 6) Experience & skills of employees

Two approaches when evaluating a firm's performance

The first is financial ratio analysis, which, generally speaking, identifies how a firm is performing according to its balance sheet, income statement, and market valuation. As we will discuss, when performing a financial ratio analysis, you must take into account the firm's performance from a historical perspective (not just at one point in time) as well as how it compares with both industry norms and key competitors. The second perspective takes a broader stakeholder view. Firms must satisfy a broad range of stakeholders, including employees, customers, and owners, to ensure their long-term viability. Central to our discussion will be a well-known approach—the balanced scorecard—that has been popularized by Robert Kaplan and David Norton

Physical Uniqueness

The first source of inimitability is physical uniqueness, which by definition is inherently difficult to copy. A beautiful resort location, mineral rights, or Pfizer's pharmaceutical patents simply cannot be imitated. Many managers believe that several of their resources may fall into this category, but on close inspection, few do

The fixed asset turnover of a company is 8.3. What do you infer from this? A. Every dollar spent on the company's fixed assets generates $8.30 of revenue. B. 8.3% of the company's revenue is invested in fixed assets. C. The return on fixed assets will break even in 8.3 years. D. The cost of capital invested on fixed assets is 8.3% of the total profit.

Human Capital

The individual capabilities, knowledge, skills, and experience of a company's employees and managers. This knowledge is relevant to the task at hand, and also includes the ability to add to this reservoir of knowledge, skills, and experience through learning. The THREE Interdependent Activities: 1) Attracting Human Capital 2) Developing Human Capital 3) Retaining Human Capital HIRING is only the first of three processes in which all successful organizations must engage to build and leverage their human capital. Firms must also develop employees to fill their full potential to maximize their joint contributions.

Social Capital

The network of friendships and working relationships between talented people both INSIDE and OUTSIDE the organization. Relationships are critical in sharing and leveraging knowledge and in acquiring resources. Social capital can extend beyond the organizational boundaries to include relationships between the firm and its suppliers, customers, and alliance partners. HIRING VIA PERSONAL (Social) NETWORKS: Some job candidates may bring other talent with them - THE PIED PIPER EFFECT. Talent can emigrate from an organization to form startup ventures. Social networks can provide a mechanism for obtaining resources and information from outside the organization. LIMITATIONS include: 1) Groupthink 2) Dysfunctional human resource practices. 3) Expensive socialization processes (orientation, training). 4) Individuals may distort or selectively use information to favor their preferred courses of action.

TravelEasy Inc. is a car rental business that charges customers based on how many miles they put on a car on a daily basis. As result, a person who uses a car to travel from Chicago to Denver during a week is charged much more than a person who uses a car only to travel one mile to the grocery store six times a week. TravelEasy uses a business model called A. freemium. B. pay-as-you-go. C. agency. D. bundling.

The three components of the __________ approach to corporate accounting include financial, environmental, and social performance measures.

Triple Bottom Line

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

If a company is using a cost leadership strategy, which of the following is not a characteristic of that strategy?

The strategy is not easily imitated.

The team consisted of only Finnish scientists

The tenet behind the triple-bottom-line is that A. a firm should solely focus on increasing the economic value created to/for its customers. B. a firm's primary objective should be increasing the total returns to its shareholders. C. a firm should achieve positive results along the economic, social, and ecological dimensions to gain a sustainable strategy. D. a firm's return on revenue can be broken down into three ratios: COGS/Revenue, R&D/Revenue, and SG&A/Revenue.

The three financial ratios that constitute return on revenue are Cost of goods sold/Revenue, Research & Development expense/Revenue, and A. Accounting profitability/Revenue. B. Economic value created/Revenue. C. Total return to shareholders/Revenue. D. Selling, general, & administrative expense/Revenue

A: mergers and acquisitions; joint ventures and strategic alliances; internal development

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

Global strategy

The traditional beer industry is at its mature stage and therefore firms are highly competitive on price. Customer survey in Singapore shows all beers taste the same no matter how they are made. What strategy is the best fit for Coorlight to reach consumers in Singapore. International, Multi-domestic, Transnational, or Global?

The working capital of a small home-based business is $200,000. The revenues generated account to $600,000, and the profits incurred are $300,000. What would be the company's working capital turnover? A. 3, that is, $600,000/$200,000 B. $300,000, that is, $600,000 - $300,000 C. 2, that is, $600,000/$300,000 D. $100,000, that is, $300,000 - $200,000

The working capital turnover of Tesva Systems Corp. is 6.0. What does this financial data suggest? A. For every $6.00 Tesva Systems puts to work, the company incurs a cost of $1.00. B. For every $6.00 Tesva Systems puts to work, the company realizes sales of $1.00. C. For every dollar Tesva Systems puts to work, the company realizes $6.00 in loss. D. For every dollar Tesva Systems puts to work, the company realizes $6.00 of sales

360-degree evaluation and feedback systems address many of the limitations of traditional approaches of evaluating human capital.

True

A cost leadership strategy can put the firm at a competitive disadvantage, due to a declining base of cost advantage.

True

A cost leadership strategy may lead to a reduction in flexibility.

True

A disadvantage of firms that successfully integrate overall cost leadership and differentiation strategies is that they are relatively difficult for competitors to imitate.

True

A good manager can be flexible when it comes to sticking to the original plan; to get good results the intended strategy does not have to become the realized strategy.

True

A knowledge-enabled culture is created when an organization employs a system of aligned human resource policies, tactics, processes, and practices that ensure knowledge is created, captured, used, and reused to achieve superior organizational results as a sustainable advantage.

True

The balanced scorecard: description and benefits

To provide a meaningful integration of the many issues that come into evaluating a firm's performance, Kaplan and Norton developed a "balanced scorecard." This provides top managers with a fast but comprehensive view of the business. In a nutshell, it includes financial measures that reflect the results of actions already taken, but it complements these indicators with measures of customer satisfaction, internal processes, and the organization's innovation and improvement activities—operational measures that drive future financial performance

*SUMMARY REVIEW QUESTIONS* 1. Explain the role of knowledge in today's competitive environment.

To understand the competition that a firm faces, it must understand competitors' (as well as buyers', suppliers', substitutes', and potential entrants') intellectual capital. Firms are no longer important because of how they manage things, but rather because of how they manage knowledge. Most of their market value is likely to be intellectual capital. Therefore, firms will have to understand competitors' human capital and, social capital, as well as their explicit knowledge and tacit knowledge.

Which of the following is a reason for merger and acquisition failures?

Top executives act in their best interests rather than those of the shareholders.

Evaluating Human Capital

Traditional top-down appraisal systems become insufficient as organizations continue to push responsibility downward. 360-degree evaluation and feedback systems are systems where superiors, direct reports, colleagues, and even external and internal customers rate a person's performance. Employees must share knowledge and work together, collectively, to reach organizational goals. Evaluation systems must ensure that a manager's success does not come at the cost of compromising the organization's core values.

3. Companies have found that referrals from their own employees are generally an effective approach to recruiting top talent. A) True B) False

True (GE Medical Systems has found that current employees are the best source for new ones. Referral bounties are small compared to the fees that GE typically pays to headhunters for each person hired. Also, when someone refers a former colleague or friend for a job, his or her credibility is on the line. Thus, employees will be careful in recommending people for employment unless they are reasonably confident that these people are good candidates.)

True Vibgyor Inc. sells its e-book readers at the cost price of $15 each. However, the company makes its profits when users have to download or buy books online. Which of the following business models is True Vibgyor implementing? A. subscription-based B. razor-razor-blade C. pay-as-you-go D. direct sales

_________ ratios reflect whether or not a firm is efficiently using its resources.

Turnover

__________ ratios reflect whether a firm is efficiently using its resources

Turnover

C: more likely to design strategies and structures that allow them to successfully compete abroad

Typically, According to Michael Porter, firms that have experienced intense domestic competition are: A. unlikely to have the time or resources to compete abroad. B. most likely to design strategies aimed primarily at the domestic market. C. more likely to design strategies and structures that allow them to successfully compete abroad. D. more likely to demand protection from their governments.

False

Typically, joint ventures involve less control and risk than franchising. True or False?

THREE Levers Used To Overcome Barriers To Collaboration:

UNIFICATION LEVER: A method for making people more willing to collaborate by crafting compelling common goals, articulating a strong value of cross-company teamwork, and encouraging collaboration in order to send strong signals to lift people's sites beyond their narrow interests toward a common goal. This is useful when motivation is a problem. PEOPLE LEVER: A method for making people more willing to collaborate by getting the right people to work on the right projects. This means cultivating what may be called T-shaped management = people who simultaneously focus on the performance of their unit (the vertical part of the T) and across boundaries (the horizontal part of the T). NETWORK LEVERS: A method for making people more willing to collaborate by building nimble interpersonal networks across the company. However, there is a dark side to networks: when people spend more time networking than getting work done, collaboration can adversely affect results. **Sharing knowledge and information throughout the organization can be a means of conserving resources, developing products and services, and creating new opportunities.

Training information or skills with people whose experiences differ from your own provides you with _____________, exceptionally valuable resources.

Unique

a. SysDine

Which of the following describes a peer-to-peer technique? A. A company offers a cleaning service free of charge on a first-time trial basis. B. A company offers a package of cleaning supplies at a discount. C. A company matches an individual with a cleaning service. D. A company places a low retail price on low-selling cleaning supplies.

Which of the following financial ratios is used to measure a company's ability to meet its short-term financial obligations? A. Leverage ratios. B. Profitability ratios. C. Activity ratios. D. Liquidity ratios.

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

Which of the following is FALSE regarding how a differentiation strategy can help a firm to improve its competitive position vis-à-vis Porter's five forces? A. It helps a firm to lessen competitive rivalry by distinguishing itself. B. It helps a firm to deal with buyer power since 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, thus experiencing less threat from substitutes than its competitors.

Which of the following is an advantage of a triple-bottom-line approach? A. The approach takes an integrative and holistic view in assessing a company's performance. B. The approach does not rely on an external view of a firm to assess its performance. C. The approach is more of a quantitative performance metric rather than a mere conceptual framework. D. The framework can help managers assess a firm's competitive advantage without taking into account the firm's performance along noneconomic dimensions.

Which of the following is an advantage of applying the economic value creation perspective to assess a firm's performance? A. When the need for "hard numbers" arises, managers and analysts rely on economic value creation perspective to measure competitive advantage. B. In economic value perspective, analysts not only consider historical costs, but also opportunity costs. C. Arriving at the economic value created is easy because determining the value of a good in the eyes of consumers is a simple task. D. It is the most efficient tool for assessing corporate-level competitive advantage of highly diversified companies with large product portfolios.

Which of the following is an advantage of the balanced-scorecard? A. It is a tool for both strategic formulation and strategic implementation. B. It allows managers to translate a firm's vision into measureable operational goals. C. The balanced-scorecard is independent of the skills of the managers responsible for its implementation. D. Its implementation is a one-time effort and does not require continuous tracking of metrics or strategic objectives.

a. marketplace

Which of the following is not an advantage of the balanced-scorecard approach to assess firm performance? A. It allows managers to communicate and link the strategic vision to responsible parties within an organization. B. It helps managers to implement feedback and organizational learning in order to modify and adapt strategic goals when indicated. C. It provides a concise report that tracks chosen metrics and measures and compares them to target values. D. It is a tool which can be effectively used by managers for both strategic implementation and strategic formulation.

Which of the following is not true of risk capital? A. From the shareholders' perspective, the measure of competitive advantage is based on return on their risk capital. B. Risk capital invested in a firm can be legally recovered if the firm goes bankrupt. C. A person who provides capital to a firm gets equity shares in return. D. Return on risk capital includes stock price appreciation plus dividends received over a specific period.

Data _____ is the process of searching large databases to find hidden patterns in data. a. mining b. interlinking c. planning d. benchmarking

a. mining

a knowledge asset.

balanced scorecard

a method of evaluating a firm's performance using performance measures from the customers', internal, innovation and learning, and financial perspectives

Balanced scorecard

a method of evaluating a firm's performance using performance measures from the customers', internal, innovation and learning, and financial perspectives.

a. Enterprise resource planning

_____ knowledge is easily captured, stored, and disseminated using computer technology. a. Explicit b. Indirect c. Tacit d. Allusive

a. Explicit

a. Financial perspective

a. Innovation and learning perspective

a. Kaplan and Nortan's

Tangible resources

are assets that are relatively easy to identify They include the physical and financial assets that an organization uses to create value for its customers. Among them are: financial resource (e.g., a firm's cash, accounts receivable, and its ability to borrow funds); physical resources (e.g., the company's plant, equipment, and machinery as well as its proximity to customers and suppliers); organizational resources (e.g., the company's strategic planning process and its employee development, evaluation, and reward systems); and technological resources (e.g., trade secrets, patents, and copyrights)

Organizational capabilities

are not specific tangible or intangible assets, but rather the competencies or skill that a firm employees to transform input into outputs in short, they refer to an org's capacity to deploy tangible and intangible resources over time and generally in combination and to leverage those capabilities to bring about a desired end Examples of organizational capabilities are outstanding customer service, excellent product development capabilities, superb innovation processes, and flexibility in manufacturing processes

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

attracting and retaining knowledgeable workers

Which of the following perspectives of the balanced scorecard focuses on market share? a. Internal perspective b. Customer perspective c. Innovation perspective d. Learning perspective

b. Customer perspective

_____ assets refer to the accumulated intellectual resources that an organization possesses, including information, ideas, learning, understanding, memory, insights, cognitive and technical skills, and capabilities. a. Personal b. Knowledge c. Strategical d. Deployment

b. Knowledge

Which of the following measures of the Baldrige criteria of performance measurement includes internal quality measurements, defect levels, service errors, and response times? a. Governance outcomes b. Product outcomes c. Market outcomes d. Financial outcomes

b. Product outcomes

To achieve a high level of performance excellence, an organization requires a much broader set of performance measures that are aligned to an organization's strategy; this became known as the: a. quality trilogy. b. balanced scorecard. c. quincunx. d. Taguchi loss function.

b. balanced scorecard.

b. placing accountability on the creators of data and information.

Who among the following first developed the concept of a balanced scorecard? a. Edwards Deming b. Art Schneiderman c. Joseph Juran d. Kaoru Ishikawa

b. Art Schneiderman

b. Comparative

Which of the following perspectives of the balanced scorecard focuses on market share? a. Internal perspective b. Customer perspective c. Innovation perspective d. Learning perspective

b. Customer perspective

b. Knowledge

b. Product outcomes

b. balanced scorecard.

bargaining power. Page: 98

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.

be larger than

Which of the following is true about the practical guidelines suggested by Mark Graham Brown for designing a performance measurement system? a. Concentrate on measuring a large number of trivial variables. b. Avoid changing and adjusting measures even if the environment and strategy changes. c. Measures should be based around the needs of customers, shareholders, and other key stakeholders. d. Measures should start at the bottom and flow up to all levels of top management in the organization.

c. Measures should be based around the needs of customers, shareholders, and other key stakeholders.

c. Rapid knowledge transfer

c. Tacit

The ability to identify and transfer best practices within the organization is sometimes called _____. a. enterprise resource planning b. interlinking c. internal benchmarking d. data mining

c. internal benchmarking

Which of the following is most likely to be used to obtain comparative data? a. Interlinking approach b. Cluster analysis c. Benchmarking approach d. Cause-and-effect approach

c. Benchmarking approach

c. Correlation analysis

c. Customer perspective

_____ knowledge includes information stored in documents or other forms of media such as databases, policies and procedures, and technical drawings. a. Tacit b. Allusive c. Explicit d. Indirect

c. Explicit

c. Innovation and learning perspective

c. Interlinking

c. Internal perspective

c. Knowledge management

c. Measures should be based around the needs of customers, shareholders, and other key stakeholders.

Which of the following organizations is one of the most prominent vendors of ERP software? a. STMicroelectronics b. Convergys c. Oracle d. Analog devices

c. Oracle

Protecting company intellectual property can be difficult because employees become disgruntled and patents A. are expensive. B. cannot be protected. C. expire. D. roll over.

expire.

Engineering drawings, software code, and patents are examples of

explicit knowledge

Engineering drawings, software code, and patents are examples of _____________.

explicit knowledge

T/F: Intangible resources are not as difficult for competitors to imitate as tangible ones.

false

T/F: Social capital is based on the skills and abilities of an individual employee, not on the network of relationships within a firm.

false

T/F: The task-first relationship with fellow employees, in which emotions and personal life are checked at the door, is becoming more common and essential with the current increased focus on efficiency.

false

T/F: When leaving a job, desirable knowledge employees are most likely to find new employment on Internet career sites and go alone to work for complete strangers.

false

9. Despite geographic or time separation of members, electronic teams are not very effective in generating social capital. A) True B) False

false (There are multiple advantages of e-teams. For one, e-teams can be very effective in generating social capital, the quality of relationships and networks that leaders and team members form. Such capital is a key lubricant in work transactions and operations. Given the broader boundaries associated with e-teams, members and leaders generally have access to a wider range of social contacts than would be typically available in more traditional face-to-face teams.)

Types of firm resources

firm resources are all assets, capabilities, organization processes, information, knowledge, and so forth, controlled by a firm that enables it to develop and implement value creating strategies 3 types: tangible resources intangible resources organizational capabilities

T-shaped management

people's dual focus on the performance of their unit (the vertical part of the T) and across boundaries (the horizontal part of the T).

organizational capabilities

the competencies and skills that a firm employs to transform inputs into outputs.

Closure

the degree to which all members of a social network have relationships (or ties) with other group members.

Intangible resources

tangible resources

organizational assets that are relatively easy to identify, including physical assets, financial resources, organizational resources, and technological resources

Tangible resources

organizational assets that are relatively easy to identify, including physical assets, financial resources, organizational resources, and technological resources.

The search barrier

people are unable to find what they are looking for

The transfer barrier

people are unable to work with people they don't know well

Not-invented-here or hoarding barrier

people aren't willing to provide help

Resource based view of the firm

perspective that firms' competitive advantages are due to their endowment of strategic resources that are valuable, rare, costly to imitate, and costly to substitute combine two perspectives: 1. the internal analysis of phenomena within a company and 2. an external analysis of the industry and its competitive environment It goes beyond the traditional SWOT (strengths, weaknesses, opportunities, threats) analysis by integrating internal and external perspectives. The ability of a firm's resources to confer competitive advantage(s) cannot be determined without taking into consideration the broader competitive context. A firm's resources must be evaluated in terms of how valuable, rare, and hard they are for competitors to duplicate. Otherwise, the firm attains only competitive parity. A firm's strengths and capabilities—no matter how unique or impressive—do not necessarily lead to competitive advantages in the marketplace

Resource-based view of the firm

perspective that firms' competitive advantages are due to their endowment of strategic resources that are valuable, rare, costly to imitate, and costly to substitute.

0. Using an idea does not prevent others from simultaneously using it for their own benefit. Typically, this is impossible with __________ assets. A. intangible B. strong C. physical D. flimsy

physical

Unlike ______ assets, intellectual property can be stolen by simply broadcasting it. A. intangible B. hidden C. physical D. expensive

physical

Human capital does not include the ________ of an individual. Multiple Choice · knowledge · capabilities · physical attributes · skills

physical attributes

Human capital does not include the ______________ of an individual.

physical attributes

Pfizer pharmaceutical patents provide what important characteristic that supports inimitability?

physical uniqueness

Companies use the tactic of ________ to give shareholders certain rights in the event of a takeover by another firm.

poison pill

extra firm connections (connections outside of firm)

political goodwill and ties alliance partnerships supplier and/or distributor ties ties to capital and debt providers other stakeholder relationship

If a company is considering optimizing the physical location for every activity in the value chain, which of the following is not a possible strategic advantage for that decision?

political risk enhancement

Which of these is not an example of socially complex organizational phenomena?

poor reputation with customers

Inbound logistics

primarily associated with receiving, storing, and distributing inputs to the products. It includes material handling, warehousing, inventory control, vehicle scheduling and returns to suppliers JIT for example were designed to achieve efficient inbound logistics. In essence, Toyota epitomizes JIT inventory systems, in which parts deliveries arrive at the assembly plants only hours before they are needed. JIT systems will play a vital role in fulfilling Toyota's commitment to fill a buyer's new-car order in just five days.This standard is in sharp contrast to most competitors that require approximately 30 days' notice to build vehicles. Toyota's standard is three times faster than even Honda Motors, considered to be the industry's most efficient in order follow-through. The five days represent the time from the company's receipt of an order to the time the car leaves the assembly plant. Actual delivery may take longer, depending on where a customer lives

Service

primary activity includes all action associated with providing service to enhance or maintain the value of the product such as installation, repair, training, part supply, and product adjustment

social capital (In the development of social capital, individuals may use the contacts they develop to pursue their own interests and agendas that may be inconsistent with the organization goals and objectives. Thus, they may distort or selectively use information to favor their preferred courses of action or withhold information in their own self-interest to enhance their power to the detriment of the common good.)

Tying knowledge workers to a firm is part of the objective of the development of A. intellectual capital. B. explicit knowledge. C. social capital. D. human capital

social capital.

the Pied Piper effect.

the ability to submit to conventional industry and market wisdom

Financial ratio analyssi

the beginning point in analyzing the financial position of a firm is to compute and analyze five different types of financial ratios Short term solvency or liquidity long term solvency measures asset management (or turnover) profitability Market value

organizational capabilities

the competencies and skills that a firm employs to transform inputs and outputs examples: outstanding customer service, excellent product development capabilities, superb innovation processes, and flexibility in manufacturing processes

Generally, employees are most likely to stay with an organization if

the organization's mission and values align with the employee's mission and values.

Initiatives to develop human capital should be directed __________ to maintain a competitive advantage in the current knowledge economy. Multiple Choice · at top managers · throughout the firm at all levels · at the employees themselves · at human resource departments

throughout the firm at all levels

throughout the firm at all levels.

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