Question

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Q1. Objectives in organizations should be clear, stated, and known by employees throughout the organization.

a. true

b. false

Q2. 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

Q3. 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

Q4. Strategic objectives are more specific than vision statements.

a. true

b. false

Q5. There are several perspectives of competition. One perspective is zero-sum thinking. Zero-sum thinking means that:

a. All parts of the organization gain at no loss

b. In order for someone to gain others must experience no gain or benefit

c. One can only gain at the expense of someone else

d. Everyone in the organization shares gains and losses equally

Q6. The 'organizational versus individual rationality' perspective suggests that:

a. What is good for a functional area is always good for the organization

b. What is good for the organization is always good for a functional area

c. What is best for a functional area may not be best for the organization

d. The 'incremental' perspective may be best for functional areas while the 'rational' perspective may be best for the organization

Q7. 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

Q8. The text addresses two perspectives of leadership as well as their implications. These two perspectives are:

a. Romantic and unromantic

b. Romantic and internal control

c. External control and unromantic

d. Romantic and external control

Q9. Effective leadership can play a large role in fostering corporate entrepreneurship. Corporate entrepreneurship can have a very positive impact on a firm's bottom line.

a. true

b. false

Q10. Environmental scanning and competitor intelligence provide important inputs for forecasting activities.

a. true

b. false

Q11. Rivalry will be most intense when there is a lack of differentiation or switching costs.

a. true

b. false

Q12. 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

Q13. A supplier group would be most powerful when there is/are:

a. Many suppliers

b. Few substitute products

c. Low differentiation of products supplied

d. High threat of backward integration by the buyers

Q14. _____________ tracks the evolution of environmental trends, sequences of events or streams of activities.

a. Environmental scanning

b. Environmental monitoring

c. Environmental surveying

d. Competitive intelligence

Q15. Technological innovations can create entirely new industries and alter the boundaries of industries.

a. true

b. false

Q16. 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

Q17. 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

Q18. Porter's Five Forces model helps to determine both the nature of competition in an industry and the industry's profit potential.

a. true

b. false

Q19. Customer service would include:

a. Product promotion

b. Product distribution

c. Parts supply

d. Procurement of critical supplies       

Q20. __________ are typically embedded in unique routines and practices that have evolved and accumulated over time – such as trust and effective work teams.

a. Tangible resources

b. Intangible resources

c. Reputational resources

d. Organizational capabilities

Q21. 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

Q22. Leverage ratios provide measures of a firm's capacity to meet its long-term financial obligations.

a. true

b. false

Q23. Gillette combines several technologies (e.g., metallurgy, physiology, physics) to attain unparalleled success in the wet shaving industry. This is an example of their:

a. Tangible resources

b. Intangible resources

c. Organizational capabilities

d. Strong primary activities

Q24. 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

Q25. Historical comparisons are most appropriate during periods of recession or economic boom.

a. true

b. false

Q26. The value-adding activity known as problem-solving:

a. Involves streamlining operations

b. Is typically used in the context of providing unique services

c. Refers to comparing the costs and benefits of various options

d. Creates access to products ratings and price comparisons

Q27. The difference between the market value and book value of a firm is its social capital.

a. true

b. false

Q28. 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

Q29. According to the text, effective e-teams identified group members with a proper balance of technical and interpersonal skills.

a. true

b. false

Q30. According to the text, for most of the twentieth century, most managerial efforts were directed toward the efficient allocation of labor and capital - the two traditional factors of production.

a. true

b. false

Q31. Social capital is found in the knowledge, skills, and abilities of individual employees.

a. true

b. false

Q32. 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

Q33. An internal labor market (to increase an employee's mobility within a firm) is one means of increasing employee retention.

a. true

b. false

Q34. The use of email can be distracting to employees. Some firms limit the time that employees spend using email.

a. true

b. false

Q35. Concentrating solely on one form of competitive advantage generally leads to the highest possible level of profitability.

a. true

b. false

Q36. As markets mature, competition on the basis of differentiation is preferable to price competition.

a. true

b. false

Q37. One way the Internet and digital technologies are creating opportunities for firms with differentiation strategies is by enabling mass customization.

a. true

b. false

Q38. Focus, by itself, often constitutes a competitive advantage.

a. true

b. false

Q39. Which of the following is false regarding how a differentiation strategy can help a firm to improve its competitive position vis-à-vis Porter's five forces?

a. By increasing a firm's margins, it avoids the need for a low cost position

b. It helps a firm to deal with supplier power and reduces buyer power since buyers lack comparable alternatives

c. Supplier power is increased because suppliers will be able to charge higher prices for their inputs

d. Firms will enjoy high customer loyalty, thus experiencing less threat from substitutes than its competitors

Q40. One potential pitfall of a differentiation strategy is that a brand's identification in the marketplace may become diluted through excessive product line extensions.

a. true

b. false

Q41. 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

Q42. The example of Lexus automobiles in the text points out that a firm can strengthen its differentiation strategy by achieving integration at multiple points along the value chain.

a. true

b. false

Q43. According to the text, the two main sources of synergy in unrelated diversification are parenting and financial synergies.

a. true

b. false

Q44. 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

Q45. Vertical integration is attractive when market transaction costs are higher than internal administrative costs.

a. true

b. false

Q46. 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

Q47. __________ is when a firm's corporate office helps subsidiaries make wise choices in their own acquisitions, divestures, and new ventures.

a. Parenting

b. Restructuring

c. Leveraging core competencies

d. Increasing market power

Q48. 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

Q49. When firms diversify into unrelated businesses, the primary potential benefits are horizontal relationships, i.e., businesses sharing tangible and intangible resources.

a. true

b. false

Q50. Sharing activities across business units can provide two primary benefits: cost savings and revenue enhancements.

a. true

b. false