GS Exam 1
6. Porter's "diamond" model: a. Explains competitive advantage of leading industries within the same country. b. Explains competitive disadvantage of globally leading industries in different countries. c. Has been criticized for ignoring history. d. Has been criticized for focusing on institutions. e. C and D above.
C
6. Ways to imitate include: a. Direct duplication. b. Substitution. c. A and B above. d. Innovation. e. None of the above.
C
7. Taking advantage of strengths embodied in resources/capabilities and overcoming weaknesses deals with which fundamental question? a. Why do firms differ? b. What determines the scope of the firm? c. How do firms behave? d. What determines the international success and failure of firms? e. All of the above.
C
7. Which are true regarding informal constraints? a. When formal institutional constraints fail, informal constraints tend to fail as well. b. Following the collapse the former Soviet Union, informal constraints were unable to facilitate growth of entrepreneurial firms. c. Even in developed economies, the best-connected firms can reap significant benefits. d. All of the above. e. None of the above.
C
8. Traditional resource-based view: a. Overemphasizes leveraging existing resources/capabilities. b. Underemphasizes developing new resources/capabilities. c. Both of the above. d. Underemphasizes leveraging existing resources/capabilities. e. Overemphasizes developing new resources/capabilities.
C
17. Globalization is viewed as: a. A new force sweeping through the world in recent times. b. A long-run historical evolution since the dawn of human history. c. A pendulum that swings from one extreme to another from time to time. d. All of the above. e. None of the above.
D
17. Recent aspects of outsourcing include all of the following except: a. "Business process outsourcing" (BPO). b. High-end services to countries led by India. c. Digitization and commoditization of service work. d. As stated by the text, the outsourcing of services is definitely a long-term benefit. e. Increases due to the Internet and the reduction of international communication costs.
D
19. Critics of offshoring make all of the following arguments except: a. If even core functions like engineering, R&D, manufacturing, and marketing can—and often should—be moved outside the country, what is left of the firm? b. Critics argue such offshoring nurtures rivals. c. Offshoring increasingly results in job losses in high-end areas such as design, R&D, and IT/BPO. d. Many large US firms claim that they are "global companies" but they seem to be bound by "American values." e. In some cases, it undermines national security.
D
10. Which of the following is better performed in-house instead of being outsourced? a. An activity with a high degree of industry commonality. b. A high degree of commoditization. c. An industry-specific and firm-specific (proprietary) activity. d. All of the above. e. None of the above.
C
11. The VRIO framework does not include capabilities and resources that are: a. Valuable. b. Rare. c. Imitable. d. Organizationally embedded. e. All of the above.
C
12. Examining whether a firm has resources and capabilities to perform a particular activity in a manner superior to competitors is known as _________ in SWOT analysis. a. Parity b. Competition c. Benchmarking d. Deskmarking e. Standardization
C
13. Which tends to be true of masculine cultures? a. May have a relative advantage in small-scale, customized manufacturing. b. May be at a disadvantage in making products efficiently, well and fast. c. Stereotypical manager is decisive. d. Stereotypical manager is accustomed to seeking consensus. e. None of the above.
C
15. Which is the instrumental view regarding motivation to become ethical? a. Jump on the "bandwagon" to appear more legitimate without becoming more ethical. b. Be self-motivated to "do it right" regardless of social pressures. c. Good ethics are a way to achieve good profits. d. Ethics is an instrument to impose the values of the elite on the masses. e. Ethics is a game that is played like a musical instrument.
C
2. Reasons for increased FDI in China in recent years do not include: a. Low cost labor. b. A sizeable domestic market. c. Strong intellectual property protections. d. Increased emphasis on binding international commercial arbitration by Chinese authorities. e. All of the above.
C
20. In regards to individualism vs. collectivism: a. Collectivists never discriminate against out-group members and may be more opportunistic when dealing with in-group members. b. Individualists make more distinction between in-group and out-group membership. c. Individualists are more opportunistic when dealing with in-group members. d. Individualists may view social interactions/activities as related to the business at hand. e. Collectivists may view social interactions/activities as unessential and wasteful of resources.
C
3. Which of the following best defines "Triad" as the term is used in the text? a. The U.S., Japan, and Germany. b. The U.S., Canada, and Mexico. c. North America, Europe, and Japan. d. North America, Europe, and Asia. e. The U.S. dollar, the Euro, and the Yen.
C
5. Emerging economies (or emerging markets): a. Now command a full one-third of the worldwide FDI flow. b. Command half of the global gross domestic product (GDP) measured at purchasing power parity. c. A and B above d. Despite their growth, they still command less than 10% of global GDP. e. Consist of countries which are in a state of decline but which are believed to have potential for growth.
C
19. Which best defines an accommodative strategy? a. Firms do not feel compelled to act unless faced with a disaster or public outcry. b. Denial is the first line of defense. c. Focus on regulatory compliance, firm fights demand for changes unless they are regulatory. d. Organizational norms emerge to accept responsibility for actions - cognitive beliefs/values that promote ethical choices are internalized. e. Firms constantly anticipate institutional changes and do more than is required to act ethically and responsibly.
D
20. At the dawn of the 21st century, __________ had significant ramifications for companies and strategists around the world. a. Antiglobalization protests b. Terrorist attacks c. Corporate governance crisis d. All of the above e. None of the above
D
3. Which of the following defines institutions? a. "Humanly devised constraints that structure human interaction." b. "Regulatory, normative and cognitive structures and activities that provide stability and meaning to social behavior." c. Government of individual and firm behavior. d. All of the above. e. None of the above.
D
5. How do institutions reduce uncertainty? a. Relational contracting. b. Arm's length transaction with 3rd party enforcement. c. Institutional transitions. d. All of the above. e. None of the above.
D
7. Many BRIC local firms are: a. Effectively competing at home. b. Launching offensives abroad. c. Creating serious ramifications for Triad-based MNEs. d. All of the above. e. BRIC local firms have yet to become significant globally.
D
8. Strategy: a. Dates back to 500bc and the work of the strategist Sun Tzu of China. b. Applies concepts developed by the strategist von Clausewitz. c. Includes application of principles of military strategy to business competition. d. All of the above. e. In this century, civilian companies no longer apply military theories and principles in dealing with competition.
D
9. Academic research has found support for ______________effects on firm performance. a. Resource-based b. Industry-based c. Complementary specific collective d. All of the above e. None of the above
D
1. An industry-based view provides some answers to which of the following questions? a. Why do firms differ? b. How do firms behave? c. What determines the scope of the firm? d. What determines the international success and failure of firms? e. All of the above.
E
1. In the Opening case, which of the following attributes describe IBM? a. Innovative culture b. Commitment to customer relationships c. Willingness to change d. Strong leadership team e. All of the above.
E
1. The industry-based view recommends: a. Backward integration as a way to defend against the power of suppliers. b. Backward integration as a way to defend against the power of buyers. c. Forward integration as a way to defend against the power of suppliers. d. Forward integration as a way to defend against the power of buyers. e. Backward or forward integration as a way to defend against the power of suppliers and buyers.
E
1. Which is a reason for outsourcing as opposed to integration? a. Less expense. b. Strategic flexibility is enhanced. c. Those outside the firm are often more competitive. d. The activity is not crucial to the core business. e. All of the above.
E
1. Which is generally NOT true of differentiation? a. Difficult to sustain basis of differentiation in the long run. b. Relentless efforts of competitors to duplicate differentiation. c. Key areas of application include research and development, marketing/sales and after-sale services. d. It is a challenge to identify attributes that are valued by customers in each market segment. e. Inability to pass on suppliers' price increases to buyers.
E
1. Which of the following is NOT true of the industrial organization (IO) economics model? a. Industry structure determines firm conduct (strategy), which determines firm performance. b. Original goal - help regulators set policy to minimize the ability of firms to earn excess profits. c. Strategists use the IO model to try to earn above-average returns (excess profits). d. All of the above are NOT true. e. All of the above ARE true.
E
1. Which of the following tends to reduce the intensity of rivalry? a. Similarity of firms in terms of size, market influence and product offerings. b. Products are big-ticket items and purchased infrequently. c. New capacity must be added in large increments. d. Slow industry growth or decline in demand. e. None of the above.
E
10. Overall, strategy is: a. A rulebook. b. A blueprint. c. A set of programmed instructions. d. All of the above. e. None of the above.
E
11. Long-term orientation is best defined as: a. The degree of social inequality. b. The identity of an individual is not based on the identity of his or her collective group. c. Sex role differentiation. d. The extent to which people accept ambiguous situations. e. Emphasis on perseverance and savings.
E
12. Which of the following are true regarding cultures and strategic choices? a. Managers in high power distance countries have a greater penchant for centralized authority. b. Solicitation of subordinate feedback and participation is a sign of weak leadership in high power distance countries. c. Individualistic cultures prefer more formal contractual safeguards in alliances than collectivistic cultures. d. Managers in low uncertainty avoidance countries rely more on experience and training. e. All of the above.
E
14. Tacit knowledge is probably the most _________ resource. a. Valuable b. Unique c. Hard-to-imitate d. Organizationally complex resource e. All of the above
E
15. Diversification: a. Was acclaimed in the West during the 1960s and 1970s but was discredited twenty years later. b. Is believed by Western media to destroy value in emerging economies. c. Has resulted in higher profitability for some in emerging economies than independent firms. d. In emerging economies may be a function of the level of institutional (under) development. e. All of the above.
E
15. Recent research suggests that capabilities in very dynamic high-velocity industries (such as IT) involve all of the following except: a. Simple (not complicated). b. Experiential (not analytic). c. Iterative (not linear processes). d. Involve "learning by doing." e. "Learning before doing."
E
16. "Global strategy" refers to: a. A particular theory on how to compete. b. Offering standardized products and services on a worldwide basis. c. Any strategy outside one's home country. d. Strategy of firms around the globe—essentially various firms' theories about how to compete successfully. e. All of the above.
E
17. Strong correlation between high level of corruption and low level of economic development is evidenced by: a. China's low level of corruption and high level of economic development. b. China's high level of corruption and low level of economic development. c. Indonesia's low level of corruption and high level of economic development. d. Indonesia's high level of corruption and low level of economic development. e. None of the above.
E
18. All of the following are arguments used by proponents of offshoring except: a. It creates enormous value for firms and economies. b. Western firms are able to tap into low-cost and high-quality labor. c. Firms can focus on their core capabilities. d. For every dollar spent by US firms on India, the U.S. obtains $1.13. e. It is not true that some US employees may lose their jobs.
E
18. Which of the following were the first to express concern about international competition from low-cost countries? a. American political leaders in the twenty first century. b. Union leaders in the last half of the twentieth century. c. American business leaders in the late 1800s. d. The King of England in the late 1700s. e. A first century Roman emperor.
E
20. Critics of outsourcing agree that MNEs and their outsourcing can be praised for which of the following? a. Not exploiting cheap labor. b. Not treating people as "tradable commodities" that can be jettisoned. c. Not destroying jobs destroying jobs at home. d. Protecting customer privacy. e. None of the above.
E
3. According to the text, which of the following are intangible resources and capabilities? a. Trade secrets. b. Organizational. c. Formal structures. d. All of the above. e. None of the above.
E
4. Institutions do which of the following? a. Reduce uncertainty. b. Signal which conduct is acceptable and which is not. c. Constrain the range of acceptable actions. d. Reduce opportunism and transaction costs. e. All of the above.
E
6. BRIC refers to: a. Bahrain, Russia, Iran, and China. b. Bolivia, Romania, India, and Columbia. c. Bulgaria, Romania, Iraq, and China. d. Bermuda, Rwanda, Iraq, and the Czech Republic. e. Brazil, Russia, India, and China.
E
4. International outsourcing involves: a. Offshoring. b. Inshoring. c. A and B above. d. Captive sourcing. e. None of the above.
A
5. Having valuable, but common resources/capabilities leads to: a. Competitive parity. b. Competitive advantage. c. Competitive disparity. d. Competitive disadvantage. e. Lack of competition.
A
9. Power distance is best defined as: a. The degree of social inequality. b. The identity of an individual is not based on the identity of his or her collective group. c. Sex role differentiation. d. The extent to which people accept ambiguous situations. e. Emphasis on perseverance and savings.
A
1. A systematic foundation for industry and competitor analysis is best provided by: a. The industry-based view. b. Resource-based view. c. Historical view. d. Macro analysis. e. None of the above.
A
1. Related and supporting industries are called _________ and they are an additional force that can impact the competitiveness of an industry. a. Complementors b. All-rounders c. Customizers d. Flexible manufacturing e. Supporters
A
1. Which of the follow would tend to reduce the bargaining power of buyers? a. Large number of buyers. b. Products of the industry do not produce clear cost advantages or enhance the quality of life for buyers. c. Purchase standard, undifferentiated commodity products from suppliers. d. Willingness and ability of buyers to integrate backward. e. All of the above.
A
1. Which of the following are scale-based low cost advantages? a. Experience curves. b. Proprietary technology. c. Favorable access to raw materials and distribution channels. d. Favorable locations. e. None of the above.
A
11. Much of our knowledge about "the firm" is from research on firms in: a. Anglo-American capitalism. b. Japan after World War II. c. German mathematical models. d. Emerging markets. e. The early industrial era.
A
13. If Company A and Company B both have valuable assets that are identical, the text indicates that in order for A to gain a competitive advantage over B, A must: a. Use its assets differently. b. Find some basis for suing B. c. Get out of its existing business. d. Increase its quantity of those assets. e. All of the above.
A
13. The _______ view primarily focuses on the ______ in a SWOT analysis. a. Industry-based, OT b. Resource-based, OT c. Industry-based, SW d. Resource-based, SW e. Industry and resource, SWOT
A
2. A firm's__________ are its tangible and intangible assets a firm uses to choose and implement its strategies. a. Resources b. Dynamic capabilities c. Core competencies d. Net worth e. None of the above
A
2. Which of the following best describes foreign direct investment (FDI)? a. A firm's direct investment in production and/or service activities abroad. b. The purchases of foreign securities by people within the U.S. c. The purchases of U. S. securities by people from other countries. d. Avoidance of brokers or other financial intermediaries when making foreign investments. e. B and C above.
A
1. Maximizing opportunities and minimizing threats presented by the five forces provides some answers to which of the following questions? a. Why do firms differ? b. How do firms behave? c. What determines the scope of the firm? d. What determines the international success and failure of firms? e. All of the above.
B
10. Individualism is best defined as: a. The degree of social inequality. b. The identity of an individual is not based on the identity of his or her collective group. c. Sex role differentiation. d. The extent to which people accept ambiguous situations. e. Emphasis on perseverance and savings.
B
12. The word _______has now become the most famous Chinese business word to appear in English-language media. a. Keiretsu b. Guanxi c. Chaebol d. Blat e. None of the above.
B
16. Ethical imperialism is best expressed by which of the following: a. "When in Rome, do as the Romans do." b. "There is only one set of Ethics, and we have it!" c. "Respect for human dignity and basic rights should be the absolute, minimal ethical threshold for ALL operations around the world." d. "The abuse of public power for private benefit." e. "Ignore corruption."
B
18. The Foreign Corrupt Practices Act (FCPA) bans: a. Bribery to American officials by companies based in other countries. b. Bribery to foreign officials by companies based in the U.S. c. Bribery to American officials by companies based in the U.S. but operating overseas. d. Bribery to foreign officials by companies based overseas. e. Bribery to all officials everywhere by companies based anywhere.
B
19. The current era of globalization originated in the aftermath of: a. World War I. b. World War II. c. The Korean Conflict. d. The Vietnam Conflict. e. The Gulf War.
B
4. According to the text, the current brand of "global strategy" seems relevant only for MNEs from: a. BRIC. b. The Triad. c. OPEC nations. d. NAFTA. e. The E. U.
B
8. According to ___________ culture is the "Collective programming of the mind which distinguishes the members of one group or category of people from another." a. Porter b. Hofstede c. North d. Scott e. Merck
B
9. A hallmark of theory building and development is: a. The outcome of a test. b. Replication. c. Intuition. d. Consensus. e. Lack of controversy.
B
1. Porter's five forces framework: a. Identifies relevant variables but fails to ask the needed questions. b. Identifies only questions to ask. c. Identifies both relevant variables and questions to ask. d. Eliminates the need for other frameworks to add insight about firm performance. e. None of the above.
C
1. The relative bargaining power of the focal firm and (according to the traditional view) the degree of integration helps answer which of the following questions? a. Why do firms differ? b. How do firms behave? c. What determines the scope of the firm? d. What determines the international success and failure of firms? e. All of the above.
C
1. Multinational enterprises (MNEs) are firms that: a. Engage in foreign direct investment (FDI). b. Directly control value-adding activities in other countries. c. Manage value-adding activities in other countries. d. All of the above. e. None of the above.
D
1. One noncontroversial issue with strategic groups is: a. Stability of strategic groups. b. Mobility barriers between strategic groups. c. The requirement for large quantities of objective data. d. All of the above are controversial issues. e. None of the above is controversial.
D
1. The luxury market is characterized by: a. Fewer competitors than in a mass market. b. Less use of incentives and price cuts to induce purchases. c. Healthier profit margins than in a mass-market segment. d. All of the above. e. None of the above.
D
1. The ultra luxury automobile market is characterized by: a. Little competition in the past - but that is changing. b. A small number of cars produced each year - but they are very expensive. c. Being the same as the luxury market. d. A and B above. e. None of the above.
D
1. Which is a reason for integration as opposed to outsourcing? a. Greater expense. b. Strategic flexibility is enhanced. c. Those within the firm are often more competitive. d. The activity is crucial to the core business. e. All of the above.
D
1. Which of the following are true concerning cost leadership? a. Targets average customers for mass market - little differentiation. b. Key functional areas are manufacturing and materials management. c. Relentless drive to cut costs might compromise value that customers desire. d. All of the above. e. None of the above.
D
1. Which of the following is NOT true regarding supplier relationships? a. Supplier relationships that are too close may introduce rigidities, including loss of flexibility. b. In Japan suppliers may become trusted members of the keiretsu. c. In Japan, instead of treating suppliers as adversaries, they are treated as collaboration partners. d. In view of A through C above, supplier relationships in Japan tend to be ineffective. e. In view of A through C above, close supplier relationships are not necessarily good or bad.
D
1. Which of the following would tend to reduce the bargaining power of suppliers? a. Dominance of the supplier industry by a few firms. b. Suppliers provide unique, differentiated products with few or no substitutes. c. Focal firm is not an important customer. d. Unwillingness and inability of suppliers to integrate forward. e. None of the above.
D
14. As shown in the closing case, the informal rules of the game: a. Must be avoided because global business is not a mere game. b. Are not applicable in cultures in which tend to be very formal. c. Often require that the firm seek to change the informal rules instead of going along with those rules. d. Need to be understood by firms. e. Are being replaced by formal rules.
D
14. The norms, principles and standards of conduct that govern behavior: a. Are an important part of national culture but not organizational culture. b. Are private matters and not issues for formal institutions. c. Have a substantial overlap with what is illegal. d. Are sometimes ignored in the case of downsizing. e. All of the above.
D
16. Which of the following are not involved in hypercompetition? a. A shortened window during which a firm may command competitive advantage. b. Dynamic maneuvering. c. Unleashing a series of small, unpredictable, but powerful actions. d. Slowing the pace of change. e. Attempts to erode rivals' competitive advantage.
D
