MGT 195 Final Exam
Q1. Multinational firms following a transnational strategy strive to optimize the tradeoffs associated with efficiency, local adaptation, and learning.
a. true
b. false
Q2. A franchise generally expires after a few years whereas a license is designed to last into
perpetuity.
a. true
b. false
Q3. As in the case of Siebel Systems (now part of Oracle), elements of a global strategy may
facilitate the competitive advantage of differentiation by:
a. Increased freedom of individual business units to adapt to local tastes
b. The creation of a worldwide network to achieve consistent service regardless of location
c. Flexibility in applying R&D to meet country-specific needs
d. Tailoring products to meet country-specific needs
Q4. Among Theodore Levitt's assumptions that would favor a global strategy is that consumers around the world are becoming less price-sensitive.
a. true
b. false
Q5. Rivalry is intense in nations with conditions of __________ consumer demand, __________ supplier bases, and __________ new entrant potential from related industries.
a. Weak; weak; high
b. Strong; strong; low
c. Strong; strong; high
d. Weak; weak; low
Q6. A key tenet of a transnational strategy is improved adaptation to all competitive situations as well as flexibility by capitalizing on communication and knowledge flows throughout the organization.
a. true
b. false
Q7. According to Michael Porter, firms that have experienced intense domestic competition are:
a. Unlikely to have the time or resources to compete abroad
b. Most likely to design strategies aimed primarily at the domestic market
c. More likely to design strategies and structures that allow them to successfully compete abroad
d. More likely to demand protection from their governments
Q8. Industries in which proportionally more value is added in upstream activities are more likely to benefit from a global strategy than those in which more value is added downstream (closer to the customer).
a. true
b. false
Q9. 'Doing more with less' by holding down costs or making more efficient use of resources is one of the ways entrepreneurs achieve success. This is an example of how entrepreneurs use:
a. An imitative strategy
b. A low cost leader strategy
c. A differentiation strategy
d. A combination strategy
Q10. Market commonality refers to the extent to which competitors are vying for the same
customers in the same markets.
a. true
b. false
Q11. Opportunity recognition involves two phases of activity—discovery and evaluation.
a. true
b. false
Q12. When an industry is mature, a __________ strategy is considered to be one of the most effective approaches for a new entrant.
a. Focus
b. Differentiation
c. Overall low cost
d. Small business
Q13. Forbearance is a particularly aggressive type of competitive attack.
a. true
b. false
Q14. Founders using a pioneering new entry strategy look for opportunities to capitalize on proven market successes.
a. true
b. false
Q15. The term 'angel investors' refers to private individuals who provide seed capital to young ventures.
a. true
b. false
Q16. Venture capital is a form of public equity financing used to help young firms rapidly grow.
a. true
b. false
Q17. Because new ventures are typically small, they usually don't have high economies of scale relative to competitors.
a. true
b. false
Q18. Product diversification by a company is a cheaper way to reduce shareholder risk than portfolio diversification by shareholders.
a. true
b. false
Q19. The late Sam Walton, founder of Wal-Mart, used to give pep rallies at local Wal-Mart stores. What purpose did this serve?
a. It was used to remind employees of Wal-Mart's rules and regulations
b. It helped reinforce and sustain Wal-Mart's culture
c. It demonstrated to employees the importance of articulating explicit goals and objectives
d. It made Wal-Mart's reward system very explicit
Q20. Continuous monitoring enhances an organization's ability to respond with speed and flexibility.
a. true
b. false
Q21. The Sarbanes-Oxley Act of 2002 stipulates that executives of a firm will still be able to sell their shares in the firm when other employees cannot.
a. true
b. false
Q22. The collective sum of individual behaviors of an organization's employees generally results in what is best for the organization; thus, individual rationality assures organizational rationality.
a. true
b. false
Q23. In emerging economies and continental Europe, principal-principal conflicts are frequent. These consist of conflicts between controlling shareholders and executives.
a. true
b. false
Q24. Most successful organizations minimize the need for explicit rules, regulations, and other boundaries by:
a. Posting written statements of the organization's goals and objectives
b. Discouraging the formation of subcultures that isolate work groups
c. Designing effective reward systems
d. Encouraging employees to see themselves as free agents
Q25. An organization's reward system is typically a weak method of motivating employees.
a. true
b. false
Q26. Boundaries and constraints are just used to maintain order in an organization and have little effect on the organization's strategic priorities.
a. true
b. false
Q27. A firm's structure typically has almost no effect on its strategy.
a. true
b. false
Q28. A worldwide product division structure is used when global strategies require that each division be responsible for overall efficiency and performance.
a. true
b. false
Q29. As firms grow, owner managers often need to hire functional specialists to handle the
increased information-processing burden.
a. true
b. false
Q30. The strategic business unit (SBU) and holding company structure are variants of the functional form of structure.
a. true
b. false
Q31. The virtual type of organization is a network of independent companies linked together to share skills, costs, and access to one another's markets.
a. true
b. false
Q32. Operational decision making in a large business places excessive demands on the firm's top management.
a. true
b. false
Q33. If an international firm has a multidomestic strategy and a relatively high level of product diversity, the best choice for its organizational structure is:
a. Worldwide functional
b. Worldwide product division
c. Worldwide matrix
d. International division
Q34. Complete the following sentence: 'Strategic business unit (SBU) structures are best suited for corporations pursuing __________, whereas holding company structures are best suited for companies with __________ strategies.'
a. Product-market diversification, international
b. International diversification, product-market
c. Related diversification, unrelated diversification
d. Unrelated diversification, related diversification
Q35. 'Referent power' refers to a manager's identification with his or her employees.
a. true
b. false
Q36. Internal benchmarking is discouraged in most organizations because it creates competition and internal rivalries that are counterproductive.
a. true
b. false
Q37. Leaders who fail to institute proper systems and controls that facilitate ethical conduct share responsibility with those who conceive, execute, and knowingly benefit from corporate misdeeds.
a. true
b. false
Q38. In order to create an environment where employees can achieve their potential as they move the organization towards its goals, the manager's role needs to be that of:
a. Resource allocator
b. Resource controller
c. A flexible resource
d. An advocator of the status quo
Q39. Emotional intelligence (EI) is one of the components of a high intelligence quotient (IQ).
a. true
b. false
Q40. Designing the organization is the leadership activity that involves building structures, teams, systems, and processes that facilitate the implementation of a leader's vision.
a. true
b. false
Q41. The trend among many organizations is toward forms of empowerment that rely on trust, team building, and the expertise of employees at all levels.
a. true
b. false
Q42. Although many organizations encourage creativity and risk taking, few successful companies tolerate failure.
a. true
b. false
Q43. Two common forms of a focused approach to corporate entrepreneurship include:
a. Internal collaboration and internal venturing
b. Social capital and collaboration capital
c. Business incubators and new venture groups
d. Focus groups and business incubators
Q44. Dispersed approaches to corporate entrepreneurship are often found in organizations with a strong spirit of entrepreneurship.
a. true
b. false
Q45. Process innovations are often associated with a low cost leadership strategy.
a. true
b. false
Q46. Which of the following statements about skunkworks is false?
a. They are independent work units
b. They are used to encourage creative thinking and brainstorming
c. They refer to a specialized type of outside contractor that corporations use to develop entrepreneurial ideas
d. They help managers set aside their usual routines and practices
Q47. One of the pitfalls of real options analysis is that managers may have an incentive and knowhow to 'game the system' and 'back-solve' a formula to get a proposal approved. This can give rise to:
a. Managerial conceit
b. The illusion of control
c. Escalation of commitment
d. Agency problems
Q48. __________ produce fundamental changes that can transform a company or even
revolutionize an industry; __________ enhance existing practices and often represent evolutionary applications of fundamental breakthroughs.
a. Technological breakthroughs; product-market breakthroughs
b. New technologies; new paradigms
c. Incremental innovations; radical innovations
d. Radical innovations; incremental innovations
Q49. The term 'strategic envelope' refers to the scope of a firm's innovation efforts.
a. true
b. false
Q50. The strategic goals of corporate entrepreneurship are often just as important as the financial goals.
a. true
