Q1. According to Henry Mintzberg, decisions flowing from a firm's strategic analysis are its:
a. Emergent strategy
b. Deliberate strategy
c. Intended strategy
d. Realized strategy
Q2. Strategic objectives are more specific than vision statements.
a. true
b. false
Q3. According to Michael Porter, management innovations such as total quality, benchmarking, and business process reengineering cannot lead to sustainable competitive advantage because:
a. Companies that have implemented these techniques have lost money
b. There is no proof that these techniques work
c. They cost too much money and effort to implement
d. Every company is trying to implement them and hence it does not make a company different from others
Q4. Effective vision statements include:
a. All strategic directions of the organization
b. A brief statement of the company's direction
c. Strategic posturing and future objectives
d. Financial objectives and projected figures
Q5. According to the text, formulating strategy includes taking into consideration strategy at the business, international, and corporate levels. In addition managers must formulate effective entrepreneurial initiatives.
a. true
b. false
Q6. Objectives in organizations should be clear, stated, and known by employees throughout the organization.
a. true
b. false
Q7. Decisions by Boards of Directors are always consistent with shareholder interests.
a. true
b. false
Q8. Strategic management should only include short-term objectives. Long-term objectives are covered in the organization's vision statement.
a. true
b. false
Q9. Members of Boards of Directors are:
a. Appointed by the Securities and Exchange Commission
b. Elected by the shareholders as their representatives
c. Elected by the public
d. Only allowed to serve one term of four years
Q10. To illustrate interrelationships among different segments of the general environment: The persistence of large U.S. trade deficits (__________) has led to greater demand for protectionist measures, such as trade barriers and quotas (__________). These measures lead to higher prices for U.S. consumers and fuel inflation (__________).
a. Macroeconomic, sociocultural, political/legal
b. Macroeconomic, political/legal, macroeconomic
c. Macroeconomic, technological, macroeconomic
d. Macroeconomic, global, macroeconomic
Q11. Rivalry will be most intense when there is a lack of differentiation or switching costs.
a. true
b. false
Q12. Which of the following would be considered part of a firm's general environment?
a. Decreased entry barriers
b. Higher unemployment rates
c. Increased bargaining power of the firm's suppliers
d. Increased competitive intensity
Q13. An independent group of suppliers, such as farmers, gather to form a cooperative to sell their products to buyers directly, replacing their former distributor. This is an example of:
a. Threat of entry
b. Backward integration
c. Forward integration
d. Threat of substitute products
Q14. Because the Internet lowers barriers to entry in most industries, it:
a. Decreases the threat of new entrants
b. Increases the threat of new entrants
c. Makes it easier to build customer loyalty
d. Increases supplier power
Q15. The most intense rivalry results from:
a. Numerous equally balanced competitors, slow industry growth, high fixed or storage costs
b. Few competitors, slow industry growth, lack of differentiation, high fixed or storage costs
c. Numerous equally balanced competitors, manufacturing capacity increases only in large increments, low exit barriers
d. A high level of differentiation
Q16. A large fabricator of building components purchased a steel company to provide raw materials for its production process. This is an example of:
a. Backward integration
b. Economies of scale
c. Forward integration
d. Product differentiation
Q17. Environmental scanning and competitor intelligence provide important inputs for forecasting activities.
a. true
b. false
Q18. Competitor Intelligence (CI) is a tool that can provide management with 'early warnings' about both threats and opportunities.
a. true
b. false
Q19. Historical comparisons are most appropriate during periods of recession or economic boom.
a. true
b. false
Q20. Value chain analysis can only be applied to manufacturing operations.
a. true
b. false
Q21. Customer service would include:
a. Product promotion
b. Product distribution
c. Parts supply
d. Procurement of critical supplies
Q22. Value chain analysis assumes that a firm's basic economic purpose is to create value and it is a useful framework for analyzing a firm's strengths and weaknesses.
a. true
b. false
Q23. One strength of the balanced scorecard is that it is very easy to implement and that there is little need for executive sponsorship.
a. true
b. false
Q24. For a resource to provide a firm with potential sustainable advantages it must satisfy only two criteria: rareness and difficulty in substitution.
a. true
b. false
Q25. In value chain analysis, finance and accounting are considered part of a firm's general
administration.
a. true
b. false
Q26. Employees will be able to obtain a proportionately high level of profits they generate (relative to the firm) if:
a. Suppliers are loyal to the firm
b. The cost to the firm of replacing them is high
c. Their expertise is firm-specific
d. The firm's resources are path dependent
Q27. Tacit knowledge:
a. Is the same as explicit knowledge
b. Is found mostly at the lower levels of the organization
c. Can be codified but not reproduced
d. Can be accessed only with the consent of the employees because it is in the minds of the employees
Q28. In the knowledge economy, if a large portion of a firm's value is in intellectual and human assets, the difference between the company's market value and book value should ___________ a company with mostly physical and financial assets.
a. Be equal to
b. Be smaller than
c. Be larger than
d. Not be correlated with
Q29. Attracting and retaining human capital is a challenge for many firms today. Firms experiencing high turnover should:
a. Focus on increased recruiting
b. Decrease money spent on human capital
c. Make their work environment less stimulating
d. Adopt effective retention strategies
Q30. The text suggests that talented professionals are typically most concerned about financial rewards. Money is the top reason why such employees take and leave jobs.
a. true
b. false
Q31. The difference between the market value and book value of a firm is its social capital.
a. true
b. false
Q32. Social capital is found in the knowledge, skills, and abilities of individual employees.
a. true
b. false
Q33. The least effective way to retain human capital is:
a. Encouraging employee identification with organizational mission and goals
b. Requiring employees to sign agreements that prevent them from working for competitors in the future
c. Providing employees with a challenging and stimulating work environment
d. Providing employees with financial and nonfinancial rewards and incentives
Q34. According to the text, effective e-teams identified group members with a proper balance of technical and interpersonal skills.
a. true
b. false
Q35. The experience curve concept suggests that production costs tend to increase as production increases regardless of where an industry is at in its life cycle.
a. true
b. false
Q36. Which of the following phrases best completes this sentence: Because of the Internet, firms that use a focus strategy have new opportunities to:
a. Respond quickly to customer requests
b. Provide more services and features
c. Access markets less expensively
d. Access niche markets in a highly specialized fashion
Q37. Focus, by itself, often constitutes a competitive advantage.
a. true
b. false
Q38. During the decline stage of the product life cycle, a harvesting strategy means that a firm keeps a product going without significantly reducing marketing support, technological development or other investments, while hoping that competitors will exit the market.
a. true
b. false
Q39. As markets mature, competition on the basis of differentiation is preferable to price
competition.
a. true
b. false
Q40. Concentrating solely on one form of competitive advantage generally leads to the highest possible level of profitability.
a. true
b. false
Q41. An important advantage of first movers or 'pioneers' in a market is that they may establish brand recognition that may later serve as an important switching cost.
a. true
b. false
Q42. One way the Internet and digital technologies are creating opportunities for firms with differentiation strategies is by enabling mass customization.
a. true
b. false
Q43. One of the risks of vertical integration is that there may be problems associated with
unbalanced capacities or unfilled demands along a firm's value chain.
a. true
b. false
Q44. Which of the following statements regarding internal development as a means of
diversification is false?
a. Many companies use internal development to extend their product lines or add to their service
offerings
b. An advantage of internal development is that it is generally faster than other means of diversification and firms can benefit from speed in developing new products and services
c. The firm is able to capture the wealth created without having to 'share the wealth' with alliance
partners
d. Firms can often develop products or services at a lower cost if they rely on their own resources instead
of external funding
Q45. Philip Morris bought Miller Brewing and used its marketing expertise to improve Miller's market share. This justification for diversification is best described as:
a. Utilizing common infrastructures
b. Capitalizing on core competencies
c. Reducing corporate risk
d. Using portfolio analysis
Q46. A firm that incorporates more processes toward the original source of raw materials is an example of forward integration.
a. true
b. false
Q47. Portfolio management should be considered as the primary basis for formulating corporate level strategies.
a. true
b. false
Q48. According to the text, the two main sources of synergy in unrelated diversification are
parenting and financial synergies.
a. true
b. false
Q49. Portfolio management matrices generally consist of two axes that reflect industry or market growth and the market share of a business.
a. true
b. false
Q50. A firm should consider vertical integration when:
a. The competitive situation is highly volatile
b. Customer needs are evolving
c. The firm's suppliers willingly cooperate with the firm
d. The firm's suppliers of raw materials are often unable to maintain quality standards
