Business Policy Quiz Questions: Test 3

Fast Call Inc. is a pharmaceutical company that has many breakthroughs in medicine to its credit. Unlike many other pharmaceutical companies, Fast Call has a relaxed work environment where employees are free to discuss projects with each other. Employees are encouraged to choose the projects that interest them; communication between team members and their supervisors is open and easy. Because of the company's work culture, its employees feel motivated to work harder and display more entrepreneurial behaviors. In this scenario, Fast Call Inc. is most likely an organization that is

. organic

Which of the following types of groups is most susceptible to groupthink?

A cohesive group

CH 8: Which of the following best illustrates forward vertical integration?

A firm that manufactures and sells car engines to major automobile companies launches its own line of cars.

A(n) ________ organization always attempts to balance and harness different activities in trade-off situations.

Ambidextrous orgs

CH 8: How can a firm pursuing a diversification strategy enhance its overall corporate performance by leveraging financial economies?

By using internal capital markets as a source of value creation

Grey Designs Inc., a graphic design firm, has offices in New York, Texas, California, New Mexico, and New Jersey. Each of these offices is headed by a president who reports directly to Charles Grey, the CEO. The heads of the centralized HR, Finance, and Marketing teams report to Charles Grey as well. Managers in the various offices also report to the CEO directly. Based on this information, which of the following statements is most likely to be true?

Charles Grey has a wide span of control

CH 8: ________, which are incurred when pursuing a related-diversification strategy, are a function of the number, size, and types of businesses that are linked to one another.

Coordination costs

CH 8: ________ is best described as a situation in which one party is more informed than another, because of the possession of private information.

Information asymmetry

Why does Zappos offer its new recruits $2,000 to quit at the end of the first week of their job?

It believes that individuals who choose to stay on will fit in with the Zappos culture.

CH 8: Coca-Cola was primarily known for its core competencies in marketing, bottling, and distributing aerated drinks. However, with the success of Gatorade, Coca-Cola developed competencies in the development and marketing of its own sports drink, Powerade. Which of the following is true of Coca-Cola?

It is building new core competencies to protect and extend its current market position.

CH 8: Managers in a firm hired to improve the firm's profitability and ultimately the shareholders' value will add to the overall costs if they pursue their own self-interests. What does this best illustrate?

Principal-agent problem

CH 9: Which of the following is an advantage of joint ventures?

They create strong ties, trust, and commitment between the partners.

W. L. Gore & Associates is the inventor of path-breaking new products such as breathable GORE-TEX fabrics, Glide dental floss, and Elixir guitar strings. Which of the following would be most likely to hinder its intention of fostering employee satisfaction, retention, and creativity?

an extremely formalized organizational structure

CH 9: How does horizontal integration within an industry affect the surviving firms?

by strengthening the bargaining power of the surviving firms vis-à-vis suppliers and buyers

CH 9: FR Pharmaceuticals Inc., BioCure Pharma Inc., and Regime Pharma Inc. are three rival firms who have set up an alliance to conduct research and find a cure for cancer. They have made almost equal contributions to the research, and they also share their expertise with each other. However, the three firms will continue to behave as competitors in markets for other drugs and vaccines. What is this arrangement best referred to as?

co-opetition

CH 9: When a firm does not have the resource required for pursuing a growth strategy, and if the resource in question is not easily tradable, the implication for the strategist is most likely to

consider an outright acquisition.

CH 8: GreenCure Pharma Inc. wanted its research partner, an R&D company, to develop a cancer vaccine. However, the project required huge capital investments, and its research partner was not ready to solely face the risks involved. Thus, to gain its partner's confidence and to prove its involvement, GreenCure Pharma invested $100 million in the project. This investment made by GreenCure Pharma will result in

credible commitment.

The relationship between strategy and structure that directly impacts a firm's performance is

dynamic

Which of the following statements is true about the use of functional structures with various business strategies?

e goal of a differentiation strategy is to create a competitive advantage by controlling costs.

CH 8: In the Boston Consulting Group (BCG) growth-share matrix, strategic business units categorized under dogs

hold a small market share in a low-growth market.

CH 8: Which of the following corporate strategies did ExxonMobil pursue by acquiring XTO Energy, a natural gas company?

related diversification strategy

Coda Inc. is an apparel manufacturer. The management at Coda prefers moderate control over the operations of the different departments such as R&D, design, marketing, and sales. It allocates a budget to each function at the beginning of each quarter. This is an example of implementing control through

input controls.

CH 9: Dow Corning is a company owned by Dow Chemical and Corning. This is most likely an example of a(n)

joint venture

CH 9: Wave Motors Inc., a Kempa-based automobile company, has entered into a partnership with Sphere Autos Inc., headquartered in United Cadvia. The parent companies, together, have established a stand-alone firm called Genuine Autos Inc. This arrangement best exemplifies a

joint venture

An organization is characterized as having a flexible division of labor, distributed decision making, and generalized knowledge of how to accomplish strategic goals valued. This organization is most likely ________ in nature.

organic

CH 8: PepsiCo operates in many countries and sells a wide variety of aerated drinks, other beverages, different types of chips, and Quaker Oats goods to achieve continuous growth. From this data, we can conclude that PepsiCo has been involved in

product-market diversification

CH 9: A ________ is best described as an approach to strategic decision making that breaks down a larger investment decision into a set of smaller decisions that are staged sequentially over time.

real-options perspective

CH 9: A drawback involved in using cross-border strategic alliances to enter new foreign markets is that

some of the firm's proprietary know-how may be appropriated by the foreign partner.

CH 9: The Hershey Company, the largest U.S. chocolate manufacturer, decided to enter the Chinese market in 2013 because

the U.S. population was growing slowly and becoming more health conscious.

CH 9: What is horizontal integration?

the process of merging with a competitor at the same stage of the value chain