MGT 3830 Final Exam LSU Krista Carver

Comparative advantage refers to _______________. A. A country's relative efficiency in producing goods or services B. A country's inefficiency in producing goods of services C. A country's total efficiency in producing goods or services D. A country's absolute efficiency in producing goods or services

A. A country's relative efficiency in producing goods or services

A global strategy would be appropriate in product markets in which _____________ A. Customer preferences are homogeneous B. The costs of customization are low C. Few economies of scale are available D. National preferences are pronounced

A. Customer preferences are homogeneous

Disadvantages of a ________________ structure include slower decision-making, role conflict and ambiguity, and excessive complexity. A. Matrix B. Functional C. Multidivisional D. Geographical

A. Matrix

Suppose that, with its current organizational structure, Firm A is having problems getting its work units to coordinate with each other. It seems that each unit has its own goals and performance targets, sub-culture, and way of doing things that makes getting them to work together difficult. Which of the following organizational structures would you recommend to fix these issues? A. Matrix B. Hierarchical C. Functional D. Multidivisional

A. Matrix

Corporate strategy is concerned _______________ A. Where a firm chooses to compete B. How a firm chooses to compete in a specific industry C. Why a firm chooses to compete or not D. Answers A and B

A. Where a firm chooses to compete

Research shows the relationship between firm performance and diversification is: A. Negative, such that firm performance decreases with more diversification B. An inverted U shape, such that firm performance increases with more diversification up to some point after which firm performance decreases as the firm further diversifies C. Positive, such that firm performance increases with more diversification D. A U shape, such that firm performance decreases with more diversification up to come point after which firm performance increases as the firm further diversifies

B. An inverted U shape, such that firm performance increases with more diversification up to some point after which firm performance decreases as the firm further diversifies

The approach to organizational design that suggests that there is no one best way to organize is known as the ______________. A. The coordination theory B. Contingency theory C. Stakeholder theory D. Complexity theory

B. Contingency theory

If well-designed, performance incentives can be a way of solving the __________ problem. A. Managerial B. Cooperation C. Complexity D. Performance E. Coordination

B. Cooperation

Mechanisms for organizations to solve the __________ include rules, routines, and mutual adjustment. A. Stakeholder problem B. Coordination problem C. Complexity problem D. Cooperation problem

B. Coordination problem

Benefits of a ______________ structure include economies of scale, the sharing of knowledge and learning capabilities within each unit, and centralized control. A. Multidivisional B. Functional C. Product D. Matrix

B. Functional

In choosing where to locate production, considering firm-specific competitive advantages means ____________. A. Locating where the firm's resource costs can be minimized B. Locating where the firm's distinctive resources and capabilities can be optimized C. Locating where the firm's labor costs are most flexible D. Finding a location that is a unique selling point

B. Locating where the firm's distinctive resources and capabilities can be optimized

The milk industry is protected from both imports and inward direct investment and is thus an example of a _______________ industry A. Multi domestic B. Sheltered C. Global D. Trading

B. Sheltered

Consider two activities that are adjacent to each other in a vertical supply chain. All else held equal, when these two linked activities require large transaction-specific investments, the outcome is usually: A. Firms refusing to get involved and production ceasing B. The vertical integration of these two activities C. The firm performing the more downstream activity will have to accept a higher price to pay for the investment D. One or both of the firms performing these activities failing because of inevitable disputes

B. The vertical integration of these two activities

Vertical integration deals with a ________________ degree of commitment and a ____________ level of formalization A. High; high B. Low; low C. High; low D. Low; high

C. High; low

A firm becomes more vertically integrated when _________________ A. It buys a direct competitor B. It outsources some activities wither upstream or downstream of its core business C. It moves to own more stages of the value chain, either upstream or downstream of its core business D. Its management and staff are better aligned

C. It moves to own more stages of the value chain, either upstream or downstream of its core business

A key, distinguishing characteristics of a __________________ structure is multiple lines of reporting, i.e. subordinates having multiple bosses. A. Functional B. Multidivisional C. Matrix D. Network

C. Matrix

__________________ identifies 4 key factors which determine a country's competitive advantage within a particular sector. A. The optimal location of value chain activities B. The international BCG matrix C. Porter's national diamond D. Porter's fiver forces model

C. Porter's national diamond

_________________ refers to the idea that as the number and diversity of transactions performed internally increases, so do the costs of managing them. A. An internal capital market B. Technical economies C. The costs of corporate complexity D. Transactions costs

C. The costs of corporate complexity

The fundamental issue in deciding how to define organizational units is ________________. A. Management's preferred level of hierarchy B. The division of labor C. The intensity of coordination needs D. The turbulence of the external environment

C. The intensity of coordination needs

Economies of scope deals with _________ of products, while economies of scale deals with _____________ of products. A. Volume; variety B. Variety; value C. Variety; volume D. Value; volume

C. Variety; volume

The ____________ the transaction costs of markets, the ____________ likely the firm is to extend its corporate scope. A. lower; more B. greater; less C. greater; more D. None of these options complete this statement correctly

C. greater; more

The main concepts that assist us in analyzing the scope of a firm's activities are: A. Economies of scope B. Transaction costs C. Corporate complexit D. All three of the above concepts are relevant

D. All three of the above concepts are relevant

Internationalization occurs via 2 mechanisms: A. Inter-bank capital flows and direct investment B. Inter-bank capital flows and trade C. Inter-governmental bond borrowing and inter-bank capital flows D. Direct investment and trade

D. Direct investment and trade

In the beer industry, both trade and direct investment are important. Thus, we can say that beer is a _________ industry. A. Trading B. Sheltered C. Multi domestic D. Global

D. Global

The cooperation problem refers to ___________________. A. How to get workers to coordinate their actions so that something is produced on time B. How to persuade customers to cooperate with each other when supplies are scarce C. How to get rival commercial firms to cooperate during disasters or emergencies D. How to align the interests of the different participants who make up a firm

D. How to align the interests of the different participants who make up a firm

One common argument against diversification strategies is _________________ A. Managers do not have sufficient understanding of other industries B. Diversification is simply a poor strategy C. A company can usually enter a license arrangement D. Shareholders can invest in other industries themselves, achieving rick-reduction more efficiently

D. Shareholders can invest in other industries themselves, achieving rick-reduction more efficiently

Of Michael Porter's 3 essential tests of whether a proposed diversification will create value, the most important one is usually: A. The diversification test B. The cost of entry test C. The attractiveness test D. The better off test

D. The better off test

Why do firms engage in internationalization? A. To keep all strategic options open B. To exploit market opportunities in other countries C. To exploit resources and capabilities in other countries D. All of the above E. Both B and C

E. Both B and C

All else held equal, the presence of high transaction costs suggests exporting as the mode of entry into a foreign market. True False

False

In the context of the demand conditions dimension of the national diamond, Porter argues that the globalization of competition has significantly reduced the importance of the home market's demand. True False

False

One of the ways in which internationalization directly influences the forces of competition is by decreasing the bargaining power of buyers True False

False

Organic forms of organizing are most appropriate in stable environments. True False

False

Over time, the relative importance of an organization's coordination needs tends to stay the same True False

False

Strategy follows structure True False

False

The most important part of strategic plan is the complete, thorough plan that emerges once the process is completed. True False

False

All else held equal, if a firm's competitive advantage is based on country-specific resources, that firm should exploit an overseas market by trade. True False

True

All else held equal, if a firm's product is difficult to transport, it is better for the firm to expand overseas by issuing licenses to local companies in foreign markets rather than exporting. True False

True

All else held equal, when there is significant information asymmetry between two vertical stages of production, vertical integration is preferred over market contracts True False

True

If high transaction-specific investment is required between 2 stages of an industrial process, it is likely that these processes will be vertically integrated. True False

True

In situations where a firm is subject to significant uncertainty of market demand, there are flexibility benefits to engaging in market contracts rather than vertical integration. True False

True

In the context of the factor conditions dimensions of the national diamond, Porter places particular emphasis on factors that are highly specialized to an industry's particular needs. True False

True