MGT 4893 - Flashcards | StudyHippo.com

question

In the ________ view of leadership, the leader is seen as the key force in determining the organization's success or lack thereof.

answer

romantic

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Competitive advantages that are unique, valuable, and difficult for rivals to copy are likely to make these advantages

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sustainable

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Management innovations such as total quality, benchmarking, and business process reengineering can lead to sustainable competitive advantage.

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False

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The four key attributes of strategic management do not include

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excluding consideration of the trade-offs between efficiency and effectiveness

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Strategic management involves the recognition that both effectiveness and efficiency must be fully satisfied.

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False

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Ambidexterity in a strategic context refers to the challenge for a manager to

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align resources to take advantage of existing products and explore new opportunities

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A good manager can be flexible when it comes to sticking to the original plan; to get good results the intended strategy does not have to become the realized strategy.

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True

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Management, the board of directors, and ______ are the primary participants in corporate governance.

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shareholders

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Stakeholder symbiosis is in direct contrast with ________ thinking.

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zero sum

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The only stakeholders that matter for an organization are the shareholders.

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False

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The idea that organizations are not only accountable to stockholders but also to the community-at-large is known as social responsibility.

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True

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The textbook suggests that a new conception of capitalism redefines the purpose of the corporation as creating shared value, not just profit.

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True

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The three components of the __________ approach to corporate accounting include financial, environmental, and social performance measures.

answer

Triple Bottom Line

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At what level in the organization should the strategic management perspective be emphasized?

answer

throughout the organizationvision statements, mission statements, strategic objectives

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Among the leaders needed for an effective strategic management process are ________, who, although they have little positional power and formal authority, generate their power through the conviction and clarity of their ideas.

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internal networkers

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What is the hierarchy of organizational goals (from the least specific to the most specific)?

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vision statements, mission statements, strategic objectives

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What do effective vision statements include?

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massive inspiration

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Vision statements are less specific than strategic objectives.

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True

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________ tend to be quite enduring and seldom change.

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Vision statements

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Which of the following is NOT one of the recommended criteria for strategic objectives?

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sustainable

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Global monitoring deals with tracking changes in environmental trends that are often uncovered during the environmental scanning process.

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False

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Major airlines change hundreds of fares daily in response to competitor tactics, which is an example of using_________.

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competitive intelligence

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Environmental __________ involves developing plausible projections about the direction, scope, and speed of environmental change.

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forecasting

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PPG emphasizes ________ in its strategic planning; it develops four alternative futures based on two key variables, the cost of energy and the extent of growth opportunities in emerging markets.

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scenarios analysis

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Typically, a firm has a substantial ability to control trends in its general environment, if it is able to correctly predict them.

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False

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Which of the following is not an important element of the political/legal segment of the general environment?

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genetic engineering

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Technological innovations have no effect on industries in their entireties, just on individual products.

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False

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Currency exchange rates are an example of which segment of the general environment?

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global

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The aging of the U.S. population is both a demographic trend and also part of the economic segment of the general environment, since it has implications for tax policies.

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True

question

Which of the following is NOT a reason that a manager should be familiar with the Porter Five-Forces model?

answer

It identifies which demographic trends will be most important in the short-term.

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The possibility that the profits of established firms in the industry may be eroded by new competitors is known in the five-forces model as _______.

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the threat of new entrants

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Industries characterized by incumbent firms with high economies of scale typically attract more new entrants.

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False

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When is the bargaining power of the buyer greater than that of the supplier?

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when the buyer's profit margin is low

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Under which conditions, according to the Porter Five Forces model, can a supplier group gain power?

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when there is a lack of importance of the buyer to the supplier group

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If able to maintain a credible threat of forward integration, the power of suppliers will be enhanced.

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True

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Numerous equally balanced competitors selling products that lack differentiation in a slow growth industry are most likely to experience high ___________.

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intensity of rivalry among competitors

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Which of the following is not an explanation for the existence of exit barriers?

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excessive local profits

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Because ________ often make it possible for young firms to provide services that are equivalent or superior to an incumbent, a new entrant may be able to serve a market more effectively, with more personalized services and greater attention to product details.

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digital technologies

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Technology advances have resulted in disintermediation, which is the removal of organizations or business process layers responsible for intermediary steps in the value chain of many industries.

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True

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All automobile makers around the world are in the same strategic group because they manufacture automobiles.

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False

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In value-chain analysis, primary activities include human resource management and procurement.

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False

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SWOT analysis has been criticized as having too broad a focus when examining the external environment and being too static for competitive situations that are actually played out over time.

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False

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Just-in-time systems are considered part of which primary activity in the value chain?

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inbound logistics

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All activities associated with transforming inputs into the final product form are known as ______ in the value chain.

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operations

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In value-chain analysis, research and development is a broader concept than technology development.

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False

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Microsoft has improved the ________ part of its value chain by providing formal reviews of its suppliers, which has helped to clarify expectations for them.

answer

procurement

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The prosumer concept in value-chain analysis is promising, because it has the potential to generate ideas and lower costs for firms and to create greater satisfaction for customers.

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True

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Because primary activities like inbound logistics, operations, and outbound logistics are applicable only to tangible goods, value-chain analysis is not appropriate for service organizations.

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False

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The resource-based view of the firm suggests that the firm's __________ are due to its endowment of strategic resources that are valuable, rare, costly to imitate, and costly to substitute.

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competitive advantages

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Intangible resources are not as difficult for competitors to imitate as tangible ones.

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False

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Pfizer pharmaceutical patents provide what important characteristic that supports inimitability?

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physical uniqueness

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The loyalty and trust that Southwest Airlines employees feel toward their firm and its cofounder, Herb Kelleher, are resources that have been built up over a long period of time. What characteristic of sustainable competitive advantage is involved?

answer

path dependency

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Which of these is not an example of socially complex organizational phenomena?

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poor reputation with customers

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In industries like consulting, advertising, and tax preparation, clients tend to be very loyal to individual professionals employed by a firm, instead of the firm itself. This enhances employee _____.

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bargaining power

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Most experts agree that Dell has a strong and sustainable competitive advantage over its rivals in the personal computer industry.

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False

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Ratio analysis can be made more meaningful in all of the following ways EXCEPT by __________.

answer

focusing more on long-term solvency instead of short-term solvency

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_________ ratios reflect whether or not a firm is efficiently using its resources.

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Turnover

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A primary weakness of the balanced scorecard is that it fails to complement financial indicators with operational measures of customer satisfaction, internal processes, and the organization's innovation and improvement activities.

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False

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In the balanced scorecard, cycle time, employee skills, and productivity are part of the ______ perspective.

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innovation and learning

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An important implication of the balanced scorecard is that managers need to look at their job as primarily balancing stakeholder demands.

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False

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Attracting top talent is not a challenge for many organizations. In the current economy, knowledge workers typically have a limited number of employment opportunities.

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False

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________ capital can be defined as the difference between the market value and book value of a firm, or a measure of its intangible assets.

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Intellectual

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Firms such as Oracle, Google, and Apple will tend to have a lower ratio of market value to book value than industrial companies such as Nucor Steel.

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False

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Human capital does not include the ______________ of an individual.

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physical attributes

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Engineering drawings, software code, and patents are examples of _____________.

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explicit knowledge

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In the current economy, reliance on the three traditional financial statements (income statement, balance sheet, and statement of cash flow) has decreased.

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True

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New knowledge involves the continual interaction between __________ and __________ knowledge.

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tacit, explicit

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In order to fully leverage the talents of the best and brightest employees, a firm should be concerned with _____________.

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all of these

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Companies have found that referrals from their own employees are not generally an effective approach to recruiting top talent.

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False

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Initiatives to develop human capital should be directed __________ to maintain a competitive advantage in the current knowledge economy.

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throughout the firm at all levels

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Managers use __________ for developing human capital.

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training

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The task first relationship with fellow employees, in which emotions and personal life are checked at the door, is becoming more common and essential with the current increased focus on efficiency.

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False

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Added insight and cultural sensitivity, and heterogeneity in decision-making and problem-solving are some of the arguments supporting ________ in the workplace.

answer

diversity

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When leaving a job, desirable knowledge employees are most likely to find new employment on Internet career sites and go alone to work for complete strangers.

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False

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Social capital is based on the skills and abilities of an individual employee, not on the network of relationships within a firm.

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False

question

Sales and engineering departments are a classic example of two groups whose members traditionally interact with their peers rather than across groups. This is best described as ________ in social network analysis.

answer

closure within the departments and a structural hole between them

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Advantages of effective social networks for career success include all of the following EXCEPT ______.

answer

increased redundancy in knowledge sources

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Which of the following is NOT one of the three levers that can be applied to overcome barriers to effective collaboration?

answer

the search lever

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An individual who uses the contacts they develop to pursue their own interests and agendas that may be inconsistent with the organization objectives is one potential downside of __________.

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social capital

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Since the use of e-mail can be distracting to employees, some firms limit the time that employees spend using email.

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True

question

Teams that complete tasks primarily through e-mail communication are called ___________.

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electronic teams

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Despite geographic or time separation of members, electronic teams can be very effective in generating social capital.

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True

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________ include the ability to seize new opportunities, generate new knowledge, and reconfigure existing assets and capabilities.

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Dynamic capabilities

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The management of intellectual property involves all of the following EXCEPT ______.

answer

converting coded knowledge to tacit knowledge

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Intellectual property rights are not as easy to define and protect as property rights for physical assets (e.g., plant and equipment).

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True

question

The three generic strategies presented by Michael Porter can be shown on two dimensions: strategic target and product life cycle.

answer

False

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The French automobile maker, Renault, has designed an ultra-low-cost platform in order to improve its competitive position through cost leadership.

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True

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A firm that competes on cost leadership can be vulnerable if there is a decrease in the cost of the inputs on which the advantage is based.

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False

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If a company focuses on a small number of value-chain activities, it can be lead to a pitfall of the overall cost leadership strategy.

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False

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A cost leadership strategy can put the firm at a competitive disadvantage, due to a declining base of cost advantage.

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True

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A cost leadership strategy may lead to a reduction in flexibility.

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True

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Competitive advantage that is based solely on a focus strategy on a narrow competitive scope is not sufficient for assuring the sustainability of the strategy.

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True

question

A disadvantage of firms that successfully integrate overall cost leadership and differentiation strategies is that they are relatively difficult for competitors to imitate.

answer

True

question

A profit pool is defined as the total revenue in an industry at all points along the industry supply chain.

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False

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In technology intensive industries, the competitive advantages decrease over time.

answer

True

question

Competitive advantage is affected by the rate of globalization in an industry.

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True

question

One way the Internet and digital technologies are creating opportunities for firms with differentiation strategies is by improving the response to customer wishes through mass customization.

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True

question

Coca Cola and Caterpillar used first mover advantage in the building of their global presence.

answer

True

question

Many firms facing a turnaround situation try to fix their situation by increasing the financial investment in administrative expenses and inventories.

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False

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If primary value chain activities involve effective management of inbound logistics and support activities include increased efforts in technology development, this is representative of which type of competitive advantage?

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overall cost leadership

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If a firm is able to achieve above-average returns despite strong competition, it is likely to be using __________ strategy.

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overall cost leadership

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If a company is using a cost leadership strategy, which of the following is not a characteristic of that strategy?

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The strategy is not easily imitated.

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A profit pool can be defined as the total profits in an industry at all points along the industry _____ chain.

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value

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Company competitive advantage can be eroded for all of the following reasons except one. Which is that reason?

answer

length of time a company is in business

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The Internet is lowering transaction costs for several reasons. Which is not one of those reasons?

answer

increasing the number of transactions

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One of the following methods of implementing a differentiation strategy has been greatly enhanced because of Internet technologies. Which one is it?

answer

enabling of mass customization

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The industry life cycle is important because ______________.

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the emphasis on various generic strategies varies over the course of an industry life cycle

question

Products are unfamiliar to consumers in the ___________stage of a business life cycle.

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introduction

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Emphasis on process design is high during the __________ stage of the industry life cycle.

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maturity

question

Research shows that which of the following is not a strategy used by firms engaged in successful turnarounds?

answer

market expansion

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Acquisitions, according to research, usually result in value destruction rather than value creation.

answer

True

question

In 2012, Hewlett-Packard wrote off $9 billion of the $11 billion it paid for Autonomy, a software company that it purchased one year earlier. This is an example of a failed merger.

answer

True

question

The Cisco acquisition of Pure Digital Technologies, the parent of the Flip video camera, failed because Cisco was unable to respond rapidly to market pressures.

answer

True

question

Which of the following is a reason for merger and acquisition failures?

answer

Top executives act in their best interests rather than those of the shareholders.

question

MetLife was able to dramatically expand its global footprint by acquiring Alico, a global player in the insurance business from AIG in 2010 when AIG was in financial distress. This shows that not all diversification moves erode performance.

answer

True

question

Diversification initiatives must be justified by the creation of value for employees.

answer

False

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Diversification initiatives include all of the following except ____________________.

answer

employee rewards

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Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. This is an example of using related diversification to achieve value by leverage core competencies to achieve economies of scope.

answer

False

question

Related diversification enables a firm to benefit from vertical relationships across different businesses in the diversified corporation by leveraging core competencies and sharing activities.

answer

False

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Related diversification enables a firm to benefit from economies of scope, which are cost increases that are derived from leveraging core competencies.

answer

False

question

Casio, a giant electronic products producer, synthesizes it abilities in miniaturization, microprocessor design, material science, and ultrathin precision castings to produce digital watches. It uses the same skills to produce other non-related products. This skillset is a _______________.

answer

core competency

question

For a core competence to be a viable basis for the corporation strengthening a new business unit, there are three requirements. Which one of the following is not one of these requirements?

answer

The competence must help the business lose market position relative to its competition.

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With unrelated diversification, potential benefits can be gained from vertical or hierarchical relationships; that is, the creation of synergies from the interaction of the corporate office with the individual business units.

answer

True

question

Restructuring requires the corporate office to find either poorly performing firms with unrealized potential or firms in industries on the threshold of negative change.

answer

False

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These kinds of companies create value through management expertise in areas such as budgeting, planning, procurement, and human resource management.

answer

parent

question

Corporate restructuring includes capital and asset restructuring as well as ________.

answer

management restructuring

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Business level strategy addresses two related issues: what businesses should a corporation compete in and how can these businesses be managed so that they create synergy.

answer

False

question

A disadvantage of mergers and acquisitions is that they can enable a firm to rapidly enter new product markets.

answer

False

question

Among the disadvantages of acquisitions are the inexpensive premiums that are frequently paid to acquire a business.

answer

False

question

The downsides or limitations of mergers and acquisitions include all of the following, EXCEPT:

answer

Premiums that are rarely paid to acquire a business are expensive.

question

Divesting of businesses can accomplish many different objectives, except ________.

answer

providing the firm with fewer resources to spend on more attractive alternatives

question

When a hostile firm buys a large block of outstanding target company stock and the target company management feels that a tender offer is impending, they offer to buy the stock back from the hostile company at a higher price than the unfriendly company paid for it. This is known as greenmail.

answer

True

question

A golden parachute is a prearranged contract with managers specifying that, in the event of a hostile takeover, the target company managers will not be paid a significant severance package.

answer

False

question

According to Michael Porter, there is a tremendous allure to mergers and acquisitions. It is the big play, the dramatic gesture. With one stroke of the pen you can add billions to size, get a front page story, and create excitement in markets.

answer

True

question

Companies use the tactic of ________ to give shareholders certain rights in the event of a takeover by another firm.

answer

poison pill

question

Because many countries are investing in countries other than their own, each country is becoming less autonomous and more dependent.

answer

True

question

One of the challenges with globalization is determining how to meet the needs of customers at the same income level.

answer

False

question

The Michael Porter Diamond of National Advantage is a framework that explains why countries foster successful multinational corporations based on factor endowments; demand conditions; related and nonsupporting industries; and firm strategy, structure, and rivalry.

answer

False

question

Expanding the global presence of a firm automatically increases its scale of operations.

answer

True

question

Offshoring takes place when a firm decides to shift an activity that they were previously performing in a foreign location to a domestic location.

answer

False

question

Within a worldwide market, the most effective strategies are purely multidomestic or purely global.

answer

False

question

A multidomestic strategy is the most appropriate strategy for international operations, because it drives economies of scale as far as possible and provides a middle-of-the-road product that appeals to the smallest number of consumers in every market.

answer

False

question

Trading blocs and free trade zones promote the rise of regional expansion.

answer

True

question

A franchise generally expires after a few years; a license is designed to last even longer.

answer

False

question

Typically, joint ventures involve more control and risk than franchising.

answer

True

question

Exporting is an expensive way to enter domestic markets.

answer

False

question

Which of the following is not a risk normally associated with Bottom of the Pyramid strategies?

answer

New products may be perceived as exploiting the customer with substandard products.

question

Multinational firms are constantly faced with the dilemma of choosing between _______ and ___________.

answer

global adaptation, local integration

question

Rivalry is intense in nations with conditions of __________ supplier bases, _________consumer demand, and __________ new entrant potential from related industries.

answer

strong; strong; high

question

Which of the following is not a motivation for a company to pursue international expansion?

answer

It wishes to decrease foreign market penetration by developing products for the home market.

question

If a company is considering optimizing the physical location for every activity in the value chain, which of the following is not a possible strategic advantage for that decision?

answer

political risk enhancement

question

Which one of the following is one of the Theodore Levitt assumptions supporting a pure global strategy?

answer

MNCs can successfully compete globally by aggressively pricing products and sacrificing features.

question

When firms expand into global markets, they are faced with the choice of reducing costs and/or adapting to the local market. When high pressures exist to lower costs, companies should choose a __________ or __________ in order to compete in the global marketplace.

answer

transnational strategy; global strategy

question

Which would be the appropriate strategy for companies to use to compete in the global marketplace if the marketplace pressure is for lower costs with no pressure for local adaptation?

answer

international strategy

question

Industries in which proportionally more value is added in __________ activities, such as logistics, are more likely to benefit from a global strategy.

answer

upstream

question

Recent trends that might lead managers of multinational corporations (MNCs) to adopt a more decentralized strategy for their operations would include all of the following, EXCEPT _______.

answer

customer needs, interests, and tastes becoming increasingly similar

question

Which of the following is not a risk associated with a global strategy?

answer

A firm with only one manufacturing location must import its product.

question

Elements of a multidomestic strategy may facilitate the competitive advantage of _________ by decreasing shipping and transportation costs inherent in local production.

answer

multidomestic strategy

question

Which of the following is not a reason for the rise in regional expansion?

answer

decrease in the number of trading blocs and free trade zones

question

The form of entry strategy into international operations that offers the _______level of control for the domestic corporation would be exporting.

answer

lowest

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