EXAM 2 (Ch 6, 7, 8, 9, & 10)

Of Hofstede's cultural dimension, the United States scored highest on:

individualism

Unrelated diversification is more difficult to justify than related diversification because it usually fails the___________.

industry attractiveness test

As the new head of HCA's Professional Conduct Department, you are charged with making sure your fellow physicians adhere to the Hippocratic philosophy and traditions of your noble profession. As these expectations have been engrained in your colleagues during years of study and practice, the best control system to secure adherence would be ____________ control.

input

The Foreign Corrupt Practices Act (FCPA) forbids American businesses from accepting bribes regardless of where they operate in the world. It does, however, allow for grease payments (payments necessary to get low level officials to do their jobs in a timely manner) in countries where this practice is the norm. This combination would be consistent with the _____________ school of ethical thought.

integrative social contracts

In the aftermath of a series of domestic abuse scandals involving several of its players, the National Football League has had to launch and pay for an 'independent' investigation of its own top managers and also institute programs to teach its players that it's not alright to hit other people once they step OFF of the football field. These are examples of a(n) ___________ cost the NFL has incurred for its perceived wrongdoing.

internal administration

In the aftermath of a series of scandals involving several levels of upper management including its CEO, Wells Fargo's reputation has taken a major hit among its customers, investors, and advertisers because of its poor (and some say dishonest) handling of the situation(s). This is an example of a(n) ___________ cost Wells Fargo has incurred for its perceived wrongdoing.

internal administration

Following an unforeseen listeria outbreak that likely killed three of its customers and sickened many others, Bluebell Ice Cream immediately and voluntarily decided to recall all of its ice cream from store shelves across the country in an effort to ensure that no further customers would be put at risk. The millions of dollars lost by the company as a result of this recall would best be categorized as a(n):

internal administrative cost

My company has decided to expand internationally and would like a moderate amount of both control and required investment. The most appropriate approach we could take to accomplish this would be:

joint venture

Vulcan, Inc., an American aggregates company and the Mexican real estate company Grupo ICA created and jointly owned the limestone mining company CALICA, which Vulcan eventually acquired. CALICA was founded as a(n) ______________.

joint venture

The fastest, most effective way to change an organization's culture is through:

joint ventures

Many American companies will locate customer service call centers in India because of its highly educated, English speaking, and relatively cheap workforce. In doing so, they are seeking

location-based cost advantages

Hofstede's original cultural dimensions, derived from survey data of 100,000 international IBM employees, includes all but:

long-term orientation

For a company seeking to compete in a developing company, a ______________ strategy usually offers the best opportunity for success.

low cost

Daimler-Chrysler and AOL-Time Warner are examples of _____________________ that went horribly wrong.

mergers

Increasing a company's horizontal scope can be accomplished through

mergers and acquisitions

As Belmont continues construction of its new Performing Arts Center, foot traffic for existing businesses near the construction site is being curtailed, resulting in months of fewer customers and lower revenues. These consequences would best be described as _______________.

negative externalities

Multinational corporations are constantly attempting to balance forces ______________________.

of efficiency and local responsiveness

Wal-Mart's successful leveraging of its distribution core competency across the retail, grocery, and pharmaceutical industries represents ____________ corporate-level strategy:

related diversification

A company that finds itself overextended in its diversification strategy can turn to ___________ as a means of achieving a proper mix of businesses.

restructuring through divestment

The main advantage associated with unrelated diversification is ____________.

risk reduction

For a CSR strategy to offer the possibility of sustainable competitive advantage, it must _________________ and __________________.

satisfy customer needs in a superior fashion, provide a valuable social benefit

Microsoft works with elementary and middle schools in economically depressed areas providing technology and education to underprivileged children with an eye towards increasing and improving their future employee base. This program would best be described as:

shared value creation

Golden CaRound is a donut company located in downtown Nashville. The company has found success by selling its single variety of donut, the 'Chocolate Catfish' to a loyal customer/fan base within roughly 20 miles of Bridgestone Arena. If you were called upon to organize Golden CaRound's 50 employees, you would best choose the _______________ structure as the company's most effective option.

simple

A(n) ________________ is anyone who affects or is affected by a company's actions.

stakeholder

Joint ventures and long-term contracts are examples of

strategic alliances

Meeting the needs of the present without compromising the ability to meet the needs of tomorrow requires _______________.

sustainable business practices

In acquisitions, most value generated usually goes to _____________

the acquiring company

In attempting to enter the Chinese market, Tesla, Inc. quickly realized that it could not afford the time it would take to build a manufacturing facility and customer base from scratch but wanted to maintain complete control of its operations in China. Consequently, it was determined that Tesla would enter the Chinese market through _________________.

turnkey operations

In deciding to enter the Chinese market, Tesla, Inc. quickly realized that it could not find an existing host country factory that met its quality and security needs. Consequently, it was determined that Tesla would have to build its Chinese production facility from scratch. This approach is expensive and risky and is generally referred to as _________________.

turnkey operations

A person who is high in ___________ would probably prefer to work on salary rather than commission.

uncertainty avoidance

Firms involved in ___________________ are primarily concerned with financial considerations of cash flow or risk reduction

unrelated diversification

The analogy of "house flipping" most directly applies to _____________ diversification because of the necessity for successful corporate executives to _______________.

unrelated, be able to do extensive rebuild on the acquired business

Kraft Heinz, the result of a marriage between two iconic food companies hit rough waters in February when investors (including Warren Buffett) lost billions due to the company's write-down of its Kraft and Oscar Mayer brands. Many are questioning the original justification of combining two very similar companies as the anticipated synergies and cost savings have failed to materialize. Those calling for the breaking this company back into its original singles (cheese?) suggest that it's clearly failed the _________________ test in its ability to bring added value to its stockholders.

1+1=3

The success rate of mergers and acquisitions is roughly ______________

30%

Two friends meet every Saturday night to share in a variety of experiences from going to movies, art galleries, football games, or just hanging out. Because they are extroverts and need more people to drain energy from, the two always invite four other friends with the make-up of the group varying depending on the activity chosen by the pair for that weekend. In Strategy parlance, this would best be considered:

A Matrix organization

According to the BCG matrix, a "question mark" refers to an organization or subunit that has __________.

A low relative market share in a high-growth market.

______________________ is management's most powerful tool for gaining employee commitment to superior strategy execution and excellent operating results

A properly designed reward structure

Refer to the matrices below. Based on your readings and our class discussion, how might the recommendations for the companies (A & B) be the same/different across?

A's would always be top priority for investment; B's would always be divested

Absence of colonial ties would represent ________________ distance in Ghemawat's CAGE framework.

Administrative

Which of the following accurately describes the preferred strategy for the Boston Consulting Group's business opportunities?

All of the others

To determine the competitive advantage of nations, Porter suggested studying all the following factors except:

All the above should be studied

In the Enron movie, the traders were driven to behave the way they did because of:

All the others.

In organizing for use of a Global-Standardization strategy, a company would locate its R&D efforts _______, while its production would be located ______________.

At home ; what ever it is cheapest

__________ occurs when a business acquires suppliers

Backward integration.

Bastillo Conglomerate is a Spanish paella company that is poised to enter the growing international market for the seafood-based treat. The fact that competition in Spain's paella market was incredibly intense suggests:

Bastillo will have a competitive advantage over its international competitors from less competitive markets

Dollar General looked at the strategic group map of the retail industry and identified an area below Wal-Mart and K-Mart on the pricing axis where no other companies were doing business on a broad geographic scale. In choosing this competitive position for its business, Dollar General decided to pursue the ________________ strategy

Blue-ocean

Corporate social responsibility includes all the following except:

Build a homogeneous workforce

In the Enron movie we watched, the resignation of _____________ was a surprise to everyone and was the catalyst for the final fall of the company

CEO Jeff Skilling

Under ___________, a company giving to the community is a philanthropic and ultimately discretionary act, whereas under __________, it becomes integral to how the company competes

CSR, CSV

As you may remember from your Principles of Management class, a Theory X leader is one who believes that the average person prefers to be directed, wishes to avoid responsibility, has relatively little ambition, and has to be coerced to work. Given those beliefs, a Theory X leader would likely choose a ________________ structure.

Centralized

According to the traditional view of business ethics, businesses are conside

Closed systems

____________ is the specific combination of socially beneficial activities a company opts to support.

Corporate social responsibility

Finding a way to sell to "bottom of the pyramid" customers, the billions of poor who make up the vast majority of the world's population is an example of "reconceiving markets" in the __________ approach to corporate ethics.

Creating Shared Value (CSV)

________________ is/are considered a company's organizational DNA

Culture

The corporate level strategy of a diversified firm involves addressing all of the following except

Deciding how each of the businesses will compete in their various industries

American Made, Inc., an Indian clothing company headquartered in New Delhi has had to struggle from its inception with the challenges of unpredictable availability of electricity and other infrastructure in its home country, as it tried to keep its assembly lines running and meet deadlines. Having developed a series of workarounds, American Made has found tremendous success in India and is looking for opportunities overseas. Based on its domestic roots, American Made would likely have its greatest competitive advantage by entering:

Denmark United Arab Emirates Canada Angola Singapore

An ethical approach that says, "When in Rome, do as the Romans do" would be an example of:

Ethical relativism

Many suggest that Chick-Fil-A's recent decision to stop supporting organizations considered to be anti-LGBTQ is an attempt to avoid possible ____________ as it seeks to expand from more conservative to more liberal areas of the country.

Ethical relativism

Adopting a first-mover strategy guarantees success by creating customers strongly loyal to the pioneering firm.

FALSE

Outsourcing is a common strategy for increasing the scope of a firm

FALSE

Single business firms are considered to have a corporate-level strategy

FALSE

Because of its positive impact on Amazon's share price and bottom line, the company's acquisition of Whole Foods would be best described as a strategic option of allocating Amazon's financial resources.

False

__________ occurs when business acquires customers

Forward integration.

In the Enron movie, one of the traders stated, "I was told that a good trader is a creative trader. And a creative trader is a trader that can find arbitrage opportunities." From an organizational culture standpoint, this statement reflects Enron's:

Founder imprinting

According to Ghemawat's Distance Framework, the greatest "distance" between the United States and the United Kingdom would be_________.

Geographic

Your boss's boss approaches you and says she has a special project that she would like for you to work on exclusively over the next few days. She hasn't had a chance to run this past your boss, but (since she's his boss) she's sure there won't be a problem. In this scenario, your boss's boss:

Has violated unity of command

The biggest risk of an outsourcing strategy is

Hollowing out your organization by outsourcing the wrong activities

Apple's new foray into the streaming service industry represents ___________ because its success will be built on ______________.

Horizontal integration, entering new industries to offer more choices to its existing customers

The current Covid-19 pandemic has apparently brought the seemingly never-ending election drama in Israel to an end as opposition candidate Benny Gantz has decided to form a unity government with his rival and sitting Prime Minister Benjamin Netanyahu. Under the agreement, Netanyahu will serve as Prime Minister for 18 months, after which Gantz takes over the job. After three elections in less than a year failed to identify produce a clear winner, Gantz's decision will definitely _____________ for foreign companies looking to do business in Israel.

Increase political risk

Disadvantages associated with vertical integration include

Increased capital investment

______________ is the combination of ethical universalism and relativism.

Integrative social contract theory

The GE Matrix represents an improvement over the BCG matrix because:

It allows a much richer, more detailed definition of industry attractiveness.

Some would argue that Samsung's Galaxy phones were better than Apple's first-generation iPhones because Samsung took the opportunity to quickly learn from Apple's mistakes in designing and offering its first smartphones. As such, Samsung was following a ____________ strategy.

Last Mover

_____________________ generally work better as a market entry strategy for companies that own proprietary technology, while ________________ works better for global expansion efforts of service and retailing enterprises.

Licensing, franchising

In choosing a rival to attack, all of the following are excellent candidates except

Market leaders at their strongest to prove the challenger's strength

A company with relatively scarce human resources might consider a ______________ structure as a means to maximize the productivity of those resources.

Matrix

Unity of command is a military principle that says that an individual should answer to only one boss at any given time. The ____________ organizational structure purposely violates the unity of command principle

Matrix

According to famed economist Milton Friedman, a firm's social responsibility is to:

Maximize shareholder value

_________________ generally happen between companies of similar sizes

Merger

Apple's release of the iPhone 5c which, with stripped down features and a lower price was targeted at developing markets in India and China. As such, it was an example of Apple's (unsuccessful) efforts to:

Modify aspects of Apple's business model or strategy to accommodate local circumstances.

Of the four global strategies, _______ is the most inefficient. international

Multi-domestic

The related and unrelated diversification associated with the mature stage of the organizational life cycle usually results in a _________________ structure.

Multidivisional

The best reason for pursuing unrelated diversification is:

None of the others

You have a brilliant idea at work and tell your boss about it, and she promptly acts on it. This is an example of:

Nonmonetary reward

All of the following are examples or characteristics of unhealthy corporate cultures except:

Outwardly Focused

Any Big Mac that goes unsold for 10 minutes must be discarded (believe it, or not). This is an example of a ___________ designed to ensure consistent quality for customers

Policy

The United States has the greatest disparity in pay between top management and the lowest level workers. This would be a particularly difficult situation for managers from Austria to deal with because that country scores lowest in Hofstede's ____________________ national culture dimension.

Power distance

Research findings suggest that the _______________ level of diversification offers the highest level of performance.

Related

The New York Football Giants have driven their fans crazy as they appeared to be getting rid of anybody on the team whose name or face would be recognizable to the average football fan. Management argues, however that they are radically altering the lineup by divesting players that are either not performing or that don't 'fit' the locker room and acquiring new (yet-to-be-identified) players who offer better promise of enhancing team performance and fan enjoyment. In business parlance, Giant management's version of the (other) meltdown at MetLife (stadium where they play) would represent

Restructuring

The goal of ___________________ is to produce no more than 3.4 defects per million iterations of any business process

Six Sigma

According to most Strategic Management scholars, structure must always follow or reflect ________________________:

Strategy

Uber's primary business is providing transportation for people and things (meals?) that need it. While it fulfills its primary purpose quite effectively, some have argued that Uber also helps lessen traffic congestion, reduces drunk driving, and breaks the chain of poverty, all of which could be considered ___________ associated with Uber's business model.

Strengths

Jane's production department had become increasingly inefficient over the past few months and it was clear to her that the current makeup and skillset of the department is no longer sufficient to handle the increasingly cross functional challenges the department faces. She approaches you with a goal of achieving fast and substantial gains in this area. Your best advice to her would be the introduction of ____________ within the department.

TMQ

A company should never outsource its distinctive competency

TRUE

While the use of Joint Ventures has proven effective and successful in expanding a company's businesses overseas, it is not recommended as a means of achieving diversification in a domestic setting.

TRUE

In the Boston Consulting Group (BCG) matrix, Stars will evolve into Cash Cows as a result of:

The industry life cycle

Which one of the following is NOT a reason firms expand abroad?

To gain access to resources and capabilities in foreign markets

Large MNC's that operate in numerous international markets often face pressures to be both cost efficient and responsive. In order to respond simultaneously to these apparently opposing forces, many of these corporations adopt the ____________ strategy.

Transnational

When a firm faces low pressure for local responsiveness and low pressure for cost reduction in its international market(s), it is likely to adopt a(n) _____________.

Transnational strategy

In watching Enron: The Smartest Guys in the Room, it is obvious the company's monetary success in California was due to its:

Unethical culture

It has been argued that Amazon's venture into the brick and mortar retail space with its cutting edge Amazon Go stores represents a situation where the new walk-out technology the company has introduced is ahead of customers' willingness to use it - a problem that has plagued much of the rapidly changing checkout technology in the industry. As a result, Amazon's chances of gaining a sustainable competitive advantage by being a first-mover in walk-out shopping would be considered:

Unlikely

Apple has recently decided that it would once again begin to make some of the microprocessors it needs to power it vast universe of mobile devices. At the same time, the company will continue to use Intel chips in some of its laptops. This can best be described as

a. Backward integration b. Forward tapered integration c. Backward tapered integration d. Forward integration e. Outsourcing

Managing resource stock and resource flow is most equivalent to:

a. Putting key resources and capabilities in place b. Refreshing and strengthening resources as needed c. Modifying resources as market conditions evolve d. Recalibrating competencies and capabilities e. Acquiring capabilities through mergers and acquisitions

One of the main challenges associated with diversification via internal development in a mature industry is that it_________________.

a. always costs more than acquisitions b. always requires resources the company doesn't possess in-house c. always adds to the supply side of the industry's supply-demand balance d. always elicits an immediate response from incumbent firms e. always falls short of expected performance

Based on our discussion in class, the __________________ of top managers is an important consideration in determining how best to structure an organization.

a. bounded rationality

Companies in the telecommunications industry must deal with constant volatility and unpredictability and would therefore be best served by having a(n) ___________ culture. a. change-resistan

a. change-resistant b. inwardly focused c. high performance d. adaptive e. entrepreneurial

Among foreign subsidiary strategies, ____________ represents a slower form of entry than __________________.

acquisition, internal development

The Apple logo is known worldwide as a symbol of the innovative company whose culture reshaped the entire computer industry. As such, the logo would be considered a(n) ____________ of Apple's corporate culture.

artifact

Vertical integration only has appeal for a firm if it significantly strengthens a firm's competitiveness and/or _____________.

boosts its profitability

Amazon's acquisition of Wholefoods provided important assets and insights that improved the company's chance of success in the broader grocery industry. As such, the addition of Wholefoods best represents a _____ for Amazon

competitive strength

When T. Turner Kitchen Wipes, Inc. sought to buy out Charmin's bathroom tissue business, its management team envisioned numerous opportunities for synergies in this new industry that would drive performance and improvement to Acme's bottom line. In the process of the acquisition negotiations, however an old nemesis, Vicky Tire Wipes got involved in bidding for Charmin resulting in T. Turner having to offer a premium for the company that more than offset its synergistic gains. As the moment of truth comes for T. Turner to 'deal, or no deal' on the acquisition, it seems evident that this diversification would most specifically fail the _______________.

cost-of-entry test

As a customer, you are more likely to get more customized service from a ___________ organization

decentralized

The merger between American Airlines and US Airways, combined with earlier mergers between Southwest and AirTran and Delta and Northwest Airlines _________ in the industry overall.

decreased competitive intensity

In the __________ diversification, 50-80% of revenues come from a single business within a firm:

dominant business

The 1+1=3 gains sought from related diversification is generally the attributable to ____________.

economies of scale

The Triple Bottom Line includes economic, social, and _____________ metrics.

environmental

Dell has a program that allows customers to offset the carbon footprint of their newly purchased computer by having a tree planted with every computer purchase. This program best reflects Dell's commitment to:

environmental sustainability

The Foreign Corrupt Practices Act (FCPA) forbids American businesses from accepting bribes regardless of where they operate in the world. This would be consistent with the _____________ school of ethical thought.

ethical universalism

In determining a mode of entry into an international market, the method that requires the least investment, but also offers the least amount of control is __________.

exporting

Some version of the Golden Rule can be found in every great religion and every culture on Earth. As such, it would be a prime candidate for _________________.

first-order ethical norm

A few years ago, both Coke and Pepsi decided to purchase the American bottling companies that mixed and distributed their respective brands. This move, which was a reversal of years of strategy, would best be described as _____________________.

forward integration

After years of struggling to get additional grocery store shelf space to show off its many flavors, Haagen-Dazs decided to open its own ice cream shops to augment its grocery store presence. This decision to pursue both distribution channels simultaneously would best be described as

forward taper integration

As discussed the first night of class, the predominance of the ________________ organizational structure in business (and reflected in the typical structure of business schools) led to the creation of capstone business classes and eventually the field of Strategic Management

functional

Reduction in number of competitors is one of the advantages of _______________________.

horizontal integration

T-Mobile's acquisition of Sprint is considered:

horizontal integration