MGMT 490 TEST 2

A

1) A firm's organizational structure is comprised of a) the formal and informal arrangement of tasks, responsibilities, lines of authority, and reporting relationships by which the firm is administered. b) a number of independent functional units involved in some common undertaking, with one unit typically in a more central role. c) sustainable distinctive competencies to ensure cost reduction and competitiveness. d) resource strengths and competitive capabilities that allow it to incorporate attributes at lower costs than rivals whose products have similar attributes. e) excellent marketing and sales skills to convince buyers to pay a premium price for the attributes/features incorporated in its product.

A

1) A late-mover advantage does NOT arise when a) property rights protections in the form of patents, copyrights, and trademarks prevent the ready imitation of initial moves. b) pioneering helps build a firm's reputation with buyers and creates brand loyalty. c) rapid market evolution gives fast followers the opening to leapfrog a first mover's products with more attractive next-version products. d) market uncertainties make it difficult to ascertain what will eventually succeed. e) products of an innovator are simple, do not need a high customer understanding, and are easy to penetrate the market with.

A

1) Corporate restructuring strategies a) radically alter the business lineup by divesting poor performers and acquiring new promising businesses. b) entail selling off marginal businesses to free resources for redeployment to the remaining businesses. c) entail reducing the scope of diversification to a smaller number of businesses. d) focus on crafting initiatives to restore a diversified company's money-losing businesses to profitability. e) focus on broadening the scope of diversification to include a larger number of businesses.

A

1) Which of the following is NOT a step in the Six Sigma DMAIC process? a) Adapt: adapt the different approaches in order to avoid goal conflicts. b) Improve: implement the documented best practice as a standard way. c) Define: define what constitutes a defect. d) Measure: collect data to find out why, how, and how often the defect occurs. e) Control: teach new and existing employees the best-practice technique to improve significantly customer satisfaction and business.

C

10) A change in strategy nearly always entails budget reallocations because a) adopting best practices and pushing for continuous improvement tends to reduce costs and reduce overall resource requirements. b) empowering employees to carry out the new strategy elements typically requires substantial new funding and budget revisions. c) organizational units important in the prior strategy but having a lesser role in the new strategy may need downsizing, while units and activities that now have a bigger and more critical strategic role may need more people, new equipment, additional facilities, and above-average increases in their operating budgets. d) revamping the performance of value chain activities can be costly. e) the accompanying policy revisions and compensation incentives tend to require different levels of funding than before.

E

10) Management's ranking of business units and establishing a priority for resource allocation should a) give priority for funding to cash hog businesses. b) first consider the strength of funding proposals presented by managers of each division or business unit. c) always make the company's business units with strong resource strengths and competitive capabilities the central focus of funding initiatives. d) utilize activity-based costing and benchmarking to determine the funding needs of each business unit. e) put business units with the brightest profit and growth prospects and solid strategic and resource fits at the top of the investment priority list.

A

10) When is outsourcing NOT beneficial? a) when internal control over a particular activity is deemed essential b) when it improves organizational flexibility and speeds time to market c) when it reduces the company's risk exposure to changing technology and/or buyer preferences d) when it allows a company to concentrate on its core business e) when an activity can be performed better or more cheaply by outside specialists

E

10) Which of the following exemplifies a decentralized organizational structure? a) a company that facilitates quick decision making and strong leadership under crisis situations b) a company with lower-level personnel lacking the knowledge, time, or inclination to properly manage the tasks they are performing c) a company that places its decision making in the hands of top-level managers who have the experience, expertise, and judgment to decide what is the best course of action d) a company that identifies that strong control from the top is a more effective means for coordinating company actions e) a company that draws on the combined intellectual capital of all its employees to outperform a command-and-control company

A

11) A multidivisional structure consists of a a) decentralized structure with of a set of operating divisions organized along business, product, customer groups or geographic lines, and a central corporate headquarters that allocates resources, provides support functions, and monitors divisional activities. b) decentralized structure or divisional structure that monitors performance and allocates funding to those divisions wanting to grow. c) decentralized format of senior executives with large overhead staff to manage and control all the business lines. d) centralized structure that controls the coordination across the more diversified and complex functions within the organization. e) centralized structure combining corporate overhead with support functions.

A

11) Strategic offensives should be based on a) those areas of strength where the company has its greatest competitive advantage over targeted rivals. b) implementing and executing chosen strategy efficiently and effectively. c) satisfying employees and creating a stable work environment in order to increase long-term profits and reduce turnover. d) sizing up an organization's internal and external situation. e) the creation of high profits and the reduction of costs.

B

11) Which of the following is NOT an example of a competitively valuable strategic fit a) transferring specialized expertise, technological know-how, or other competitively valuable capabilities from one business's value chain to another's b) restricting cross-business linkages among value chain activities c) sharing other resources that support corresponding value chain activities of the businesses, such as relationships with suppliers or a dealer network d) combining the related value chain activities of separate businesses into a single operation to achieve lower costs e) exploiting common use of a well-known brand name

B

11) Which of the following is NOT characteristic of a compensation and reward system designed to help drive successful strategy execution? a) providing generous rewards for people who turn in outstanding performances b) offering rewards that amount to 3 percent of an employee's total compensation c) tying incentives to performance outcomes directly linked to good strategy execution and financial performance d) making sure that the performance targets that each individual or team is expected to achieve involve outcomes that the individual or team can personally affect e) keeping the time between achieving the target performance outcome and the payment of the reward as short as possible

A

12) Building positions in selected stages of the industry value chain is referred to as a a) partial integration strategy. b) backward integration strategy. c) tapered integration strategy. d) full integration strategy. e) forward integration strategy

A

12) Economies of scope a) are cost reductions that flow from operating in multiple related businesses. b) are present whenever diversification satisfies the attractiveness test and the cost of entry test. c) arise mainly from strategic fit relationships in the distribution portions of the value chains of unrelated businesses. d) arise only from strategic fit relationships in the production portions of the value chains of sister businesses. e) are more associated with unrelated diversification than related diversification.

E

12) General Electric has an up-or-out policy, where key personnel in underperforming units are pressured to boost performance to acceptable levels and keep it there or risk being replaced. What is this an example of? a) developing the resources and organizational capabilities required for successful strategy execution b) adopting best practices and business processes to drive continuous improvement in strategy execution activities c) staffing the organization with managers and employees capable of executing the strategy well d) exercising the internal leadership needed to propel strategy implementation forward e) tying rewards and incentives directly to the achievement of strategic and financial targets

D

12) Which of the following is an advantage of having well-conceived, state-of-the-art information and operating systems? a) They make it simple and easy to spot cost overruns and inefficiencies. b) They form the backbone of a differentiation strategy keyed to product variety and selection. c) They lead to a reduced workforce, significantly reducing the company's expenditures on wages and benefits. d) They enable better strategy execution and strengthen organizational capabilities. e) They are valuable tools for shortening a company's value chain and simplifying the task of adopting best practices.

E

13) Backward integration involves performing industry value chain activities a) closer to the end user. b) previously performed by enterprises engaged in the later stages of the industry value chain. c) previously performed by enterprises engaged in distribution and marketing. d) closer to the supplier. e) previously performed by suppliers or other enterprises engaged in earlier stages of the industry value chain.

E

13) Which of the following best describes economies of scope? a) Economies of scope accrue from a larger-sized operation. b) Economies of scope stem from cost-saving efficiencies of operating overseas. c) Economies of scope create more value for shareholders just as economies of scale do. d) Economies of scope arise mainly from strategic fit relationships in the distribution portions of the value chains of unrelated businesses. e) Economies of scope are cost reductions that flow from strategic fit along the value chains of related businesses.

E

13) Which of the following is an advantage of having well-conceived, state-of-the-art information and operating systems? a) They make it simple and easy to spot cost overruns and inefficiencies. b) They form the backbone of a differentiation strategy keyed to product variety and selection. c) They lead to a reduced workforce, significantly reducing the company's expenditures on wages and benefits. d) They enable better strategy execution and strengthen organizational capabilities. Correct e) They are valuable tools for shortening a company's value chain and simplifying the task of adopting best practices.

D

13) Which of the following statements about matching organizational structure to strategy execution is NOT correct? a) As firms grow, their structural form is likely to evolve. b) Matrix structures are employed when there is a need for cross-unit communication, collaboration, and coordination. c) Simple structures are best matched to small firms and entrepreneurial startups. d) Functional structures are common among companies pursuing some form of diversification strategy. e) The type of organizational structure that is most suitable for a given firm will depend on the firm's size and complexity, as well as its strategy.

B

14) Total quality management (TQM) emphasizes all of the following EXCEPT which? a) 100 percent accuracy in performing tasks b) adoption of industry standard operating practices c) continuous improvement in all phases of operations d) empowerment of employees and team-based work design e) benchmarking and total customer satisfaction

B

14) Which of the following companies are the best targets for offensive-minded firms to challenge? a) runner-up firms with strong capabilities and a long-term growth rate b) market leaders that are vulnerable c) companies in a highly competitive market that are operating on low margins d) enterprises with financial strength and large capital resources e) small companies in niche markets with a small and moderately profitable customer base

C

14) Which of the following perspectives on structuring the work effort is NOT correct? a) Supplement the design with appropriate coordinating mechanisms (cross-functional task forces, special project teams, self-contained work teams, etc.). b) Work toward the goal of building a competitively capable organization. c) Set up an "ideal" organizational arrangement to accommodate various situational idiosyncrasies. d) Pick a basic organizational design and modify it as needed to fit the company's particular business lineup. e) Institute whatever networking and communications arrangements are necessary to support effective execution of the firm's strategy.

D

14) Which one of the following is NOT an important aspect of evaluating the merits of a diversified company's strategy? a) assessing the attractiveness of the industries the company has diversified into, both individually and as a group b) ranking the performance prospects of the businesses from best to worst and deciding what priority to give each of the company's business units in allocating resources c) evaluating the strategic fits and resource fits among the various sister businesses d) determining which business units are cash cows and which ones are cash hogs, and then evaluating how soon the company's cash hogs can be transformed into cash cows e) assessing the competitive strength of each business the company has diversified into

C

15) Good strategy execution requires which of the following? a) a planned budget to protect the company's financial condition and eliminate wasteful use of cash b) passive pressures stemming from the dominance of outside market buyers c) putting those resources and capabilities into place, strengthening them as needed, and then modifying them as market conditions evolve d) strengthening the competitive environment arena outside the company's operating territory e) a universal business model to raise profits and lower costs

A

15) The mix of performing an activity internally as well as outsourcing in any given stage of the vertical chain refers to which vertical integration strategy? a) a tapered integration strategy b) a partial integration strategy c) a forward integration strategy d) a backward integration strategy e) a full integration strategy

D

15) Which of the following generates operating cash flows over and above internal requirements, thereby providing financial resources that may be used to finance new acquisitions, fund share buyback programs, or pay dividends? a) cash dogs b) star businesses c) stars d) cash cows e) cash hogs

A

15) Which of the following is NOT a reason the strategy execution process for new strategic initiatives is dependent on a company's ability to marshal adequate resources? a) Tight budget control is management's most powerful tool for first-rate strategy execution. b) Too little funding slows progress and impedes the efforts of organizational units to execute their pieces of the strategic plan proficiently. c) Too much funding wastes organizational resources and reduces financial performance. d) Changes in strategy often require resource reallocation, and organizational units need the proper funding to carry out their part of the strategic plan effectively and efficiently. e) Should internal cash flows prove insufficient to fund the planned strategic initiatives, then management must raise additional funds through borrowing or selling additional shares

E

16) Horizontal scope refers to the a) decision to outsource or insource certain processes of a company. b) extent to which strategic alliances and partnerships are used. c) range of activities which the firm performs internally. d) extent to which a firm engages in the various activities from initial activities all the way to after-sales activities. e) range of product and service segments that a firm services within its focal market.

E

16) Relative market share as a measure of competitive strength is calculated by a) dividing the total market volume by the company's sales in order to determine its relative market share. b) subtracting the company's market share (based on dollar volume) from the industry-average market share and comparing it to the main competitors. c) subtracting the industry-average market share (based on dollar volume) from a company's market share to determine how much a company's market share is above/below the industry average—this amount is a better indicator of a business's competitive strength than is just looking at the firm's market share percentage. d) dividing the business's percentage share of total industry sales volume by the percentage share held by its five largest rivals. e) dividing the business's percentage share of total industry sales volume by the percentage share held by its largest rival—it is a better indicator of a business's competitive strength than is a simple percentage measure of market share.

D

16) Total quality management (TQM) programs a) deal exclusively with procedures to achieve defect-free manufacturing and assembly. b) are generally considered the best tool for reengineering strategy-critical business processes. c) nearly always contribute more to the achievement of operating excellence than either business process reengineering or Six Sigma quality control techniques. d) entail creating a corporate culture bent on continuously improving the performance of every task and every value chain activity. e) are considerably more effective in improving manufacturing and assembly activities than they are in improving such value chain activities as R&D, human resources management, supply chain management, information technology, sales, and marketing and finance.

D

16) Which of the following value chain activities is unlikely to be a primary building block in a company's organizational structure? a) The activities for a ski apparel manufacturer are styling and design and marketing and advertising. b) In apparel retailing, critical value chain activities include apparel design, supply chain activities, marketing and advertising, and in-store customer service. c) In specialty chemicals, the critical activities are R&D, product innovation, and getting new products on the market quickly. d) Critical value chain activities in automobile manufacturing include raw materials procurement, offshore sourcing, and customer service. e) In discount stock brokerage, the strategy-critical activities are fast access to information, accurate order execution, and good customer service.

B

17) A disadvantage of a simple structure reflects the a) restriction of cross-business collaboration and the capture of cross-business synergies. b) flat structure may be inadequate as the organization grows. c) increasing bureaucratic costs and decreasing response time to new situations. d) confusion among employees due to dual reporting relationships and divided loyalties. e) inability to align incentives with goals of the corporation.

C

17) Management's most powerful tool for mobilizing organizational commitment to competent strategy execution and operating excellence is the a) diligent and persistent use of benchmarking and best practices. b) implementation of TQM and/or Six Sigma programs. c) proper use of a reward structure with motivational incentives. d) process of providing employees with a high degree of job security (ideally, via a no-layoff policy). e) periodic giving of inspirational speeches aimed at arousing employees' emotional energy.

A

17) The most frequently used approach to defending a company's present position involves actions a) restricting a challenger's option for initiating a competitive attack. b) displaying a strong bias for swift, decisive, and overwhelming actions to overpower rivals. c) focusing on building competitive advantage and then striving to convert it into a sustainable advantage. d) creating and deploying company resources in ways that cause rivals to struggle to defend themselves. e) employing the element of surprise as opposed to doing what rivals expect and are prepared for.

A

17) Which of the following is NOT a strategic option for a company that is already diversified? a) repurchasing shares of the company's common stock and building cash reserves by investing in short-term securities b) divesting weak-performing businesses and retrenching to a narrower base of business operations c) restructuring the company's business lineup through a mix of divestitures and new acquisitions d) sticking closely with the existing business line when the current business line offers attractive growth opportunities e) broadening the diversification base by adding and acquiring more businesses

A

18) A company that is already diversified may choose to broaden its business scope by building positions in new related or unrelated businesses because of all of the following EXCEPT a) its top management wants to increase its compensation. b) it wants to make new acquisitions to strengthen or complement some of its present businesses, market positioning, and competitive capabilities. c) it has resources or capabilities that are eminently transferable to other related or complementary businesses. d) the company's growth is sluggish and it wants the sales and profit boost that a new business can provide. e) management wants to lessen the company's vulnerability to seasonal or recessionary influences or to threats from emerging new technologies, legislative regulations, and new product innovations that alter buyer preferences and resource requirements.

E

18) The purpose of defensive strategies is to a) help protect a competitive advantage, to deploy competitive assets, and to build a sustainable competitive advantage. b) pressure challengers to aim their efforts at other rivals, to hedge all financial transactions, and to increase capital reserves. c) lower the risk of being attacked, to hedge all financial transactions, and to pressure challengers to aim their efforts at other rivals. d) weaken the impact of any attack that occurs, to increase capital reserves, and to deploy resources efficiently. e) lower the risk of being attacked, to weaken the impact of any attack that occurs, and to influence challengers to aim their efforts at other rivals

B

18) Well-conceived policies and operating procedures facilitate good strategy execution by a) leaving it up to employees regarding how things are to be done. b) enforcing consistency in how strategy-critical activities are performed. c) fostering a work climate that preserves the status quo whenever possible. d) channeling individual and group efforts along a strategy-supportive path. e) removing roadblocks to creativity and innovation

C

18) Which of the following best describes the multidivisional structure? a) It consists of a central executive who handles major decisions and oversees all operations with the help of a small staff. b) It is a structure that combines two or more organizational forms, with multiple reporting relationships. c) It is a decentralized structure consisting of a set of operating divisions organized along business, customer, product, or geographic lines, and central corporate headquarters. d) It is a highly centralized organizational structure, where top executives retain authority for most strategic and operating decisions and keep a tight rein on business-unit heads. e) It is organized along functional lines, where a function represents a major step in the firm's value chain.

D

19) Combination related-unrelated diversification strategies have particular appeal for companies a) desiring high compensation and reduced employment risk. b) focusing on growth for growth's sake to maximize shareholder value. c) operating in niche markets where specialized resources and capabilities are needed. d) having a mix of valuable competitive assets, covering the spectrum from generalized to special resources and capabilities. e) looking to reduce risk by spreading the company's investments over a set of truly diverse industries.

C

19) Electronic scorecards used by senior managers at some companies a) make the results of business process reengineering and TQM recognizable. b) measure managers' performance and effectiveness in executing the company's strategy. c) gather daily or weekly statistics from different databases by inventory, sales costs, and sales trends. d) enable senior management to monitor employees' work performance in real time in order to make necessary HR decisions. e) primarily focus on operation data rather than sales data.

C

19) Practices companies use to recruit, train, and retrain the most capable people they can find involve all of the following EXCEPT a) rotating people through jobs that span functional and geographic boundaries to gain experience in a variety of settings. b) striving to retain talented, high-performing employees via promotions, salary increases, performance bonuses, stock options and equity ownership, fringe-benefit packages, and other perks. c) putting employees through short-term training programs, but focusing on the top 10 percent and providing them with challenging, interesting, and skill-stretching assignments. d) coaching average performers to improve their skills and capabilities, while weeding out underperformers and bench warmers. e) making the work environment stimulating and engaging so that employees will consider the company a great place to work.

E

19) Which of the following is NOT one of the additional strategic choices a company must make once it has decided to employ a particular generic competitive strategy? a) when to undertake strategic moves—whether advantage or disadvantage lies in being a first mover, a fast follower, or a late mover b) whether to bolster the company's market position by merging with or acquiring another company in the same industry c) whether to integrate backward or forward into more stages of the industry value chain system d) whether to go on the offensive and initiate aggressive strategic moves to improve the company's market position e) whether to focus on providing services or products to a limited amount of customers in a market niche

A

2) To win employees' sustained, energetic commitment to the strategy execution process, management must a) be resourceful in designing and using motivational incentives. b) provide attractive perks and fringe benefits. c) create a corporate culture that fosters dedication and loyalty. d) provide job variety and promotion opportunities. e) comply with ethical standards and become good corporate citizens

C

2) Which of the following are key indicators of industry attractiveness? a) social and political factors, barriers to entry, and the intensity of competition b) barriers to entry, overall profitability of the industry, and whether there are only a few major players in the market c) emerging opportunities and threats, industry profitability, and market size and projected growth rate d) the existence of economies of scope and whether an industry has significant social, political, regulatory, and environmental problems e) strategic-fit, existence of economies of scope, and social and political factor

C

2) Which of the following defines a network structure? a) an entity organized into functional departments, with departmental managers who report to the CEO and small corporate staff b) a set of operating divisions organized along business, product, customer group, or geographic lines and a central corporate headquarters c) the arrangement linking a number of independent organizations involved in some common undertaking, with one firm typically in a more central role d) consists of a central executive (often the owner-manager) who handles all major decisions and oversees all operations with the help of a small staff e) a combination structure that overlays one type of structure onto another type, with multiple reporting relationships

B

2) Which of the following is NOT a disadvantage of vertical integration? a) Increased business risk b) Decreased product quality c) Capacity matching problems d) Slowness to embrace technological advances e) Less flexibility in accommodating shifting buyer preferences

D

20) One of the most widely used and effective tools for gauging how well a company is executing pieces of its strategy entails: a) checking the competitive advantage potential of cross-business strategic fit. b) calculating competitive strength scores for each business. c) using process management tools to drive continuous improvement in how internal operations are conducted. d) benchmarking the company's performance of particular activities and business processes against "best-in-industry" performers. e) using a nine-cell matrix to simultaneously portray industry attractiveness and competitive strength.

A

20) The procedure for evaluating a diversified company's strategy involves all of the following steps EXCEPT a) determining the degree of risk involved with each business unit. b) assessing the competitive strength of each business the company has diversified into and determining which ones are strong/weak contenders in their respective industries. c) ranking the performance prospects of the various businesses from best to worst and determining what the corporate parent's priorities should be in allocating resources to its different businesses. d) checking the competitive advantage potential of cross-business strategic fit among the company's various business units. e) checking whether the firm's resources fit the requirements of its present business lineup.

A

20) Which of the following is a primary advantage of a centralized organization structure? a) allows for quick decision making and strong leadership in crisis situations b) entails fewer layers of management c) allows a fast response to market changes d) promotes greater motivation and involvement in the business on the part of the company personnel e) encourages company employees to exercise initiative and act responsibly

B

20) Which of the following statements about blue-ocean strategies is NOT true? a) Blue-ocean strategies view the business universe as consisting of two distinct types of market space. b) Blue-ocean strategies are offensive strategies that involve a preemptive strike to secure an advantageous position in a mature market segment. c) Blue-ocean strategies provide a company with a great opportunity in the short run. d) A blue-ocean market space is untainted by competition and offers wide-open opportunity for profitable and rapid growth if a company can come up with a product offering that allows it to create demand. e) Blue-ocean strategies invent a new market segment that renders existing competitors irrelevant

A

3) All of the following are signals to would-be challengers that retaliation is likely EXCEPT a) creating collaborative relationships with other industry leaders to block new entrants. b) publicly announcing management's commitment to maintaining the firm's present market share. c) making an occasional strong counter-response to the moves of weak competitors to enhance the firm's image as a tough defender. d) publicly committing the company to a policy of matching competitor's terms or prices. e) maintaining a war chest of cash and marketable securities

A

3) Diversifying into new businesses can be considered a success only if it a) builds shareholder value. b) helps a company escape the rigors of competition in its present business. c) helps the company overcome the barriers to entering additional foreign markets. d) leads to the development of a greater variety of distinctive competencies and competitive capabilities. e) results in increased profit margins and bigger total profits.

E

3) One of Johan's responsibilities is to ensure proficient strategy execution within the company. In this regard, which of the following should Johan consider his most critical task? a) determining the nature of the company's distinctive competence b) centralizing authority for performing strategy-critical value chain activities c) maximizing internal operating efficiency d) building a workforce that is diverse with respect to gender and race e) ensuring that strategy-supportive resources and capabilities are in place

C

3) Which of the following statements concerning benchmarking is NOT correct? a) A company's benchmark effort looks outward to find best practices and then proceeds to develop the data for measuring how well a company's own performance of an activity stacks up against the best-practice standard. b) Benchmarking is the backbone of the process of identifying, studying, and implementing best practices. c) Benchmarking utilizes advanced statistical methods to improve quality by reducing defects and variability in the performance of business processes. d) For individual managers, benchmarking involves being humble enough to admit that others have come up with world-class ways to perform particular activities, yet wise enough to try to learn how to match, and even surpass, them. e) The pay-off from benchmarking comes from adapting the top-notch approaches pioneered by other companies to the company's own operations, thereby boosting the proficiency with which strategy-critical value chain tasks are performed.

E

4) Related diversification strategies are strong when built upon sharing a) generalized resources and capabilities. b) resources that have a broad utility and application outside a diversified company's core industry. c) general management capabilities. d) human resource management capabilities. e) competitively valuable resources.

E

4) The extent to which a firm engages in the various value chain activities, from initial activities all the way to after-sales activities, is called a) horizontal scope. b) vertical integration. Incorrect c) a joint venture partnership. d) product outsourcing. e) vertical scope.

D

4) Which of the following is NOT one of the most important nonmonetary approaches companies can use to enhance motivation? a) Share information with employees about financial performance, strategy, operational measures, market conditions, and competitors' actions. b) Provide attractive perks and fringe benefits. c) Rely on promotion from within whenever possible. d) Provide employees with up-to-date information technology that they can use to perform their daily task to the employer's satisfaction. e) Maintain an attractive office space and facilities to improve workers' satisfaction and thus stimulate higher performance.

E

4) Which of the following provides greater task specialization? a) line-and-staff structures or flat structures b) composite structures or combination structures c) business-level structures or F-forms d) divisional structures or M-forms e) departmental structures, unitary structures, or U-forms

A

5) All of the following factors make an alliance "strategic," as opposed to just a convenient business arrangement, EXCEPT a) a strategic alliance enables greater opportunities for employee advancement. b) a strategic alliance increases the bargaining power of alliance members over suppliers or buyers. c) a strategic alliance helps open up important new market opportunities. d) a strategic alliance mitigates a significant risk to a company's business. e) a strategic alliance helps build, sustain, or enhance a core competence or competitive advantage

C

5) How can policies and procedures facilitate good strategy execution? a) deciding which value chain activities to perform internally and which to outsource, helping build employee commitment to strengthening the company's core competencies and competitive capabilities, and providing top-down guidance about how certain things need to be done b) offering support for ethical compliance, determining how much authority to delegate, and helping ensure that worker eligibility for incentive bonuses is measured consistently and awarded fairly c) providing top-down guidance about how certain things need to be done, helping ensure consistency in strategy-critical activities, and promoting a work climate that facilitates strategy execution d) matching the type of organizational structure to strategy, acting as a powerful lever for changing employee attitudes, and promoting a supportive work climate e) helping ensure consistency in how strategy-critical activities are performed, fostering the use of best practices, TQM, Six Sigma, and continuous improvement efforts, and engaging in benchmarking to identify the best practice activity

D

5) To produce added long-term shareholder value, a move to diversify into a new business must pass three tests the a) better-off test, the competitive advantage test, and the cost-of-entry test. b) shareholder value test, the cost-of-entry test, and the competitive advantage test. c) capability test, the industry attractiveness test, and the shareholder value test. d) better-off test, the cost-of-entry test, and the industry attractiveness test. e) resource fit test, the profitability test, and the shareholder value test.

D

5) Which of the following statements about recruiting, training, and retaining capable employees is NOT accurate? a) Companies offer promising employees challenging, interesting, and skill-stretching assignments. b) For good strategy execution, companies prefer adding to a company's talent base over additional investments in capital projects. c) Providing employees with training programs that continue throughout their careers enables companies to retain the best talent. d) It is important to let people to do what they do best rather than encourage them to experiment with different job functionalities. e) Most companies provide attractive incentives, promotions, performance bonuses, and other benefit packages for their top performers.

E

6) A firm can pursue vertical integration by all of the following EXCEPT a) starting its own operations in other stages of the virtual activity chain. b) engaging in a full integration, a partial integration, or a tapered integration. c) entering into a strategic alliance or joint venture. d) acquiring a company already performing the activities it wants to bring in-house. e) expanding its range of product and service segments within its product or service market.

B

6) The drawbacks of an unrelated diversification strategy include a) minimal potential for shareholder value creation and financial stability. b) very demanding managerial requirements and limited competitive advantage potential. c) limited competitive advantage potential. d) financial instability and very demanding managerial requirements. e) cultural conflicts and very demanding financial requirements.

C

6) Which of the following does NOT describe the standard type of structural form of organization? a) a functional structure where function is a major step in the firm's value chain b) a matrix structure where there are two or more divisions organized to enhance cross-communication c) a network structure where independent organizations are involved in a common undertaking d) a multidivisional structure where each division of the firm is an independent profit center e) a simple structure where all major decisions and oversight are a duty of the central executive

B

6) Which of the following is NOT a type of data commonly tracked by a company's information systems? a) financial performance data b) ethical conduct data c) supplier/partner/collaborative ally data d) operations data e) customer data

E

7) Conditions that create first-mover advantages include all of the following EXCEPT a) an early lead enables the first mover to move down the learning curve ahead of rivals. b) property rights protections thwart rapid imitation of the initial move. c) pioneering helps build a firm's reputation and creates strong brand loyalty. d) a first-mover's customers face significant switching costs. e) the costs of pioneering are high relative to the benefits accrued.

A

7) What is the benefit of calculating quantitative attractiveness ratings for the industries a diversified company has invested in? a) Calculating attractiveness ratings is a systematic and reasonably reliable method for ranking a diversified company's industries from most to least attractive. b) Attractiveness ratings help to identify the opportunities to exercise bargaining leverage with key suppliers or customers and help identify which industry is likely to be the largest/smallest contributor to the company's growth and profitability. c) Attractiveness ratings identify which industry has the best/worst value chain matchups from the standpoint of cost reduction potential. d) Attractiveness ratings help to identify competitively valuable resources and capabilities. e) Attractiveness ratings help to identify the ability to match or beat rivals on key product attributes.

A

7) What is the most important consideration when assembling a capable management team? a) people who are clear thinkers, are capable of figuring out what needs to be done, are good at managing people, and are skilled in delivering good results b) people who have similar management styles, leadership approaches, business philosophies, and personalities c) people who are able to drive change and create outstanding long-term profits d) people with personal commitments to social responsibility and a good track record for compliance with ethical norms e) people with strong organizational commitment and loyalty to superiors

C

7) Which of the following statements about total quality management (TQM) is NOT correct? a) TQM emphasizes continuous improvement in all phases of operations. b) The TQM doctrine preaches that there is no such thing as "good enough." c) TQM aims at a one-time quantum improvement, while continuous improvement programs like Six Sigma aim at ongoing incremental improvements. d) TQM involves reforming the corporate culture and shifting to a quality/continuous improvement business philosophy that permeates every facet of an organization. e) While TQM concentrates on producing quality goods and fully satisfying customer expectations, it achieves its biggest success when it is extended to employee efforts in all departments.

A

8) A "cash hog" type of business a) generates cash flows that are too small to fully fund its operations and growth. b) generates cash flows over and above its internal requirements. c) is always a candidate for divestiture. d) has good resource fit with a cash cow business and is essential to a diversified company's lineup of businesses. e) generates cash flows exactly matching the demand for operations and growth.

D

8) Business process reengineering involves a) creating a total quality culture bent on continuously improving the performance of every task and value chain activity. b) capturing ongoing incremental improvements. c) expediting the redesign of existing products and shortening the design-to-market cycle. d) radical redesigning and streamlining how an activity is performed. e) instituting adequate information systems, performance tracking, and controls

A

8) Merger and acquisition strategies a) are often driven by such strategic objectives as to expand a company's geographic coverage or extend its business into new product categories. b) provide superior means for firms to rapidly increase the vertical scope of their core business. c) tend to be the most often used and most effective strategic options available to multi-business companies. d) are one of the best ways for helping a company strongly differentiate its product offering. e) are aimed at facilitating a company's shift from a broad differentiation strategy to a low-cost provider strategy.

C

8) Which of the following is NOT an advantage of a matrix structure? a) It is flexible in form due to the structure that combines two or more organizational forms, with multiple reporting relationships. b) It may allow for better oversight since supervision is provided from more than one perspective. c) It flattens hierarchy and decreases layers of management, thereby decreasing bureaucratic costs and responding time. d) It allows lower costs by enabling the realization of economies of scope. e) It facilitates the sharing of plant and equipment, specialized knowledge, and other key resources.

E

9) Company strategies and value creating processes can't be effectively executed without internal information systems that include a) continuous access to social networks. b) monetary and nonmonetary reward systems. c) TQM, reengineering, and Six Sigma programs. d) activity-based cost accounting, benchmarking, and best practices. e) customer data, employee data, supplier/partner data, operations data, and financial performance data.

E

9) Organizing a company's work effort to promote successful strategy execution involves a) choosing an organization structure that is a tight fit with the corporate culture. b) instituting a compensation structure that reduces employee turnover and thus stabilizes the makeup of work teams. c) deciding how much to spend on training managers and employees. d) hiring an inexpensive yet capable management team. e) deciding which value chain activities to perform in-house and which to outsource, and making internally performed strategy-critical value chain activities the main building blocks in the organization structure.

E

9) Unrelated diversification requires that company managers spend much time and effort screening acquisition candidates using all of the following criteria EXCEPT a) whether the business is in an industry with attractive growth potential. b) whether the business can meet corporate targets for profitability. c) whether the business can meet corporate targets for return on investment. d) whether the business is big enough to contribute significantly to the parent firm's bottom line. e) whether the business has a cross-business strategic fit.

B

9) Which of the following is NOT one of the big risks of outsourcing value chain activities presently performed in-house? a) A company's ability to lead the development of innovative new products may be weakened in the outsourcing process. b) A company may be less flexible in accommodating shifting buyer preferences. Correct c) The company loss of direct control may make it difficult to monitor and coordinate activities of outside suppliers. d) Outside parties may not make investments specific to the needs of the outsourcing company's value chain. e) A company may farm out the wrong types of activities and thereby hollow out its own capabilities.