CAPSIM TEST 2

question

A major trend in international developments includes A) greater international trade and operations. B) a growing recognition of an international managerial perspective. C) a large increase in international investment. D) all of the above
answer

D
question

The reasons that explain why some governments make better use of the inflows from foreign investment and know-how than others include all of the following except A) governmental practices that are business-friendly. B) local entrepreneurs that can train workers and invest in modern technology. C) high tariffs and taxes on foreign investors and multinational corporations provide income to improve living conditions. D) sound management of broader economic factors such as interest rates and inflation.
answer

C
question

In Michael Porter’s framework all of the following factors affect a nation’s competitiveness except A) factor conditions. B) demand characteristics. C) related and supported industries. D) policies that protect the nation’s domestic competitors.
answer

D
question

All of the factors below have made India’s software services industry extremely competitive on a global scale except A) large pool of skilled workers. B) large network of public and private educational institutions. C) tax and antitrust legislation that protect the dominant players in the industry. D) large, growing market and sophisticated customers.
answer

C
question

37. 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
answer

C
question

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.
answer

C
question

All of the following would be viewed as advantages of global diversification except A) fewer social and political risks than domestic operations. B) a firm not being solely dependent on the domestic market. C) a firm with large margins at home helping subsidize its operations in other nations. D) the potential to lower costs of operation even if the primary market is at home.
answer

A
question

The sale of Boeing’s commercial aircraft and Microsoft’s operating systems in many countries enable these companies to benefit from A) higher prices in their domestic markets. B) economies of scale. C) optimizing the location for many activities in their value chain. D) reducing their exposure to currency risks.
answer

B
question

Optimizing the location of every activity in the value chain can yield all of the following strategic advantages except A) performance enhancement. B) cost reduction. C) extending the life cycle of the product of service. D) risk reduction.
answer

C
question

Microsoft decided to establish a corporate research laboratory in Cambridge, England A) because England is an ally of the United States. B) to access the outstanding technical and professional talent available there so that they can attain world-class excellence in selected value-creating activities. C) because the local language is English. D) because the company views the United States as a risky place to expand due to the actions of the U.S. Department of Justice.
answer

B
question

Many U.S. multinational companies set up maquiladora operations south of the US-Mexico border primarily A) to sell products into the growing Mexican market. B) as part of US government-initiated measures to discourage illegal immigration. C) to take advantage of the lower tax rates in Mexico. D) to take advantage of the low cost of labor.
answer

D
question

Appreciation of the U.S dollar will have the following impact on McDonald’s: A) lower sales abroad because foreign customers cannot afford McDonalds’ products. B) more transfer of ingredients from the U.S to branches abroad to take advantage of the higher dollar. C) lower profits, because foreign profits will be reduced when measured in dollars. D) no impact at all.
answer

C
question

Software Tech, Inc., a company in the computer software industry, invests heavily in R&D and product design. Thus, most of its value is added A) upstream. B) in its infrastructure. C) downstream. D) midstream.
answer

A
question

Industries in which proportionally more value is added in ____________ activities are more likely to benefit from a ____________ strategy. A) downstream; global B) upstream; multidomestic C) upstream; global D) manufacturing; multidomestic
answer

C
question

47. Pressures to \”reduce costs\” require that A) a company should not trade idiosyncratic preferences in product features for higher economic returns. B) a company must pursue what is economically beneficial to the company including maximizing economies of scale and learning curve effects. C) the manager should follow a multidomestic strategy to maximize the economic benefits to the company. D) the company needs to supplement the local foreign economy in a manner specified by the local government.
answer

B
question

Which of the following types of international firms are most likely to benefit from a global strategy as opposed to a multidomestic strategy? A) firms that compete in industries in which consumer preferences vary substantially in each country B) firms in industries that are expanding very rapidly C) firms in industries that have value added by sales and marketing departments D) firms in industries that have much value added in research and design or manufacturing
answer

D
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 A) customers’ needs, interests, and tastes are becoming increasingly homogenized or similar. B) consumers around the world are increasingly willing to trade off idiosyncratic preferences in product features for lower price. C) flexible manufacturing trends have allowed a decline in the minimum volume required to reach acceptable levels of production efficiency. D) fluctuating exchange rates.
answer

A
question

Which one of the following is one of Theodore Levitt’s assumptions supporting a pure global strategy? A) Consumers are willing to pay more for specific product features. B) Customer needs and interests are becoming more dissimilar. C) If the world markets are treated as heterogeneous, substantial economies of scale are easily achieved. D) MNCs can compete with aggressive pricing on low cost products that meet the common needs of global consumers.
answer

D
question

Low pressure for local adaptation combined with low pressure for lower costs would suggest what type of strategy? A) international. B) global. C) multidomestic. D) transnational.
answer

A
question

High pressure for local adaptation combined with high pressure for lower costs would suggest what type of international strategy: A) global B) multidomestic C) transnational D) differentiation
answer

C
question

High pressure for local adaptation combined with low pressure for lower costs would suggest what type of international strategy: A) global B) multidomestic C) transnational D) overall cost leadership
answer

B
question

Firms following a global strategy strive to offer ______________ products and services as well as locate manufacturing, R&D, and marketing activities in _____________ locations. A) a wide variety of; several B) a wide variety of; few C) standardized; several D) standardized; few
answer

D
question

All of the following are risks associated with a global strategy except: A) a firm with only one manufacturing location must export its product—some of which may be a great distance from the operation. B) the geographic concentration of any activity may also tend to isolate that activity from the targeted markets. C) concentrating an activity in a single location makes the rest of the firm dependent on that location. D) the pressures for local adaptation may elevate the firm’s cost structure.
answer

D
question

All of the following are limitations of a global strategy except A) limited ability to adapt to local markets. B) the ability to locate activities in optimal locations. C) the concentration of activities may increase dependence on a single facility. D) single locations may lead to higher tariffs and transportation costs.
answer

B
question

Gillette’s worldwide success with its Sensor razor demonstrates A) the importance of merging global and multidomestic strategies. B) the values of establishing joint ventures with several multinational corporations. C) that a global marketing effort can sometimes be successful. D) the usefulness of a multidomestic strategy.
answer

C
question

As in the case of Siebel Systems, 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.
answer

B
question

Elements of a multidomestic strategy may facilitate the competitive advantage of cost leadership by A) flexibility in adjusting to local laws and customs. B) decreased duplication of inventories which are often involved in having multiple plants producing similar products. C) decreased shipping and transportation costs inherent in local production. D) economies of scale gained through centralized production of standardized products.
answer

question

All of the following are limitations of a multidomestic strategy except A) less ability to realize cost savings through scale economies. B) greater difficulty in transferring knowledge across countries. C) single locations may lead to higher tariffs and transportation costs. D) may lead to \”overadaptation\” as conditions change.
answer

C
question

Which of the following is a disadvantage of a transnational strategy? A) less ability to realize cost savings through scale economies B) limited ability to adapt to local markets C) unique managerial challenges in fostering knowledge transfer D) single locations may lead to higher tariffs and transportation costs.
answer

C
question

In order to realize the strongest competitive advantage, firms engaged in worldwide competition must A) require that all of their various business units follow the same strategy regardless of location. B) ensure that all business units follow a strategy strictly tailored to their respective locations. C) pursue a strategy that combines the uniformity of a global strategy and the specificity of a multidomestic strategy in order to achieve optimal results. D) attempt to use the strategy that was most successful in their home country.
answer

C
question

Units coordinate their activities with headquarters and with one another, units adapt to special circumstances only they face, and the entire organization draws upon relevant corporate resources. These are all attributes of which type of strategy? A) a global strategy B) a transnational strategy C) an international strategy D) a multidomestic strategy
answer

B
question

Which of the following describes the most typical order of entry into foreign markets? A) franchising, licensing, exporting, joint venture, and wholly owned subsidiary B) exporting, licensing, franchising, joint venture, and wholly owned subsidiary C) licensing, exporting, franchising, joint venture, and wholly owned subsidiary D) exporting, franchising, licensing, joint venture, and wholly owned subsidiary
answer

B
question

A domestic corporation considering expanding into international markets for the first time will typically A) start off by implementing a wholly owned foreign subsidiary so it can maintain standards identical to those at home. B) consider licensing or franchising its operations. C) consider implementing a low risk/low control strategy such as exporting. D) form a joint venture with a reputable foreign producer.
answer

C
question

The form of entry strategy into international operations that offers the lowest level of control would be A) franchising. B) licensing. C) joint venture. D) exporting
answer

D
question

Fees that a multinational receives from a foreign licensee in return for its use of intellectual property (trademark, patent, trade secret, technology) are usually called A) transfer prices. B) dividends. C) royalties. D) intra-corporate inflows.
answer

C
question

The difference between a franchise and licensing contract is that A) a franchise contract is more specific and usually longer in duration. B) a franchise contract must include a foreign government. C) a licensing contract covers more aspects of operations. D) a franchise contract involves less control and less risk.
answer

A
question

____________ entail the creation of a third-party legal entity, whereas __________ do not. A) Licensing agreements, joint ventures B) Joint ventures; strategic alliances C) Strategic alliances; joint ventures D) Franchising agreements; strategic alliances
answer

B
question

Foreign direct investment includes the following form of entry strategy: A) licensing B) franchising C) joint ventures D) exporting
answer

C
question

A ____________ is a business in which a multinational company owns 100 percent of the stock. A) joint venture B) strategic alliance C) wholly owned subsidiary D) franchising operation
answer

C
question

___________ are most appropriate where a firm already has the appropriate knowledge and capabilities that it can leverage rather easily through multiple locations in many countries. A) Joint ventures B) Strategic alliances C) Licensing agreements D) Wholly owned subsidiaries
answer

D
question

The company in the opening case, Agillion, Inc., provided expert Internet services on an outsourced basis for less money than it cost firms to develop those capabilities internally. This type of business is known as a(n) A) Internet service provider. B) Application service provider. C) Contract laborer. D) Human resources consultant.
answer

B
question

In the opening case, Agillion, Inc., the start-up failed because A) it was unable to provide a clear and unique value proposition. B) it offered a product that could easily be imitated. C) it never recorded a single dollar of revenue. D) all of the above.
answer

A
question

Complete the following sentence: \”It is the actual use of the Internet for profitable transactions, ______________________________________________\” A) that has altered the structure of the American economy. B) not the technology itself, that matters to a company’s bottom line. C) not the sustainability of competitive advantages, that is creating new business opportunities. D) that is making strategizing in the Internet economy less important.
answer

B
question

The only technology ever adopted by consumers more rapidly than the Internet was A) the telephone. B) television. C) the automobile. D) none of the above
answer

D
question

In 2000 and 2001, the Internet sector of the U.S. economy plummeted for all of the following reasons except: A) the growth in new Internet users ceased. B) investors realized that many dot-coms were overcapitalized. C) venture capital for Internet firms dried up. D) several dot-com start-ups failed.
answer

A
question

According to the text, the types of industries that are likely to be most radically transformed by the Internet are: A) research-intensive industries such as pharmaceuticals B) manufacturing-intensive such as microprocessors C) information-intensive such as financial services D) all of the above
answer

C
question

All of the following factors are likely to be impediments to growth in Internet use except A) speed and extent of Internet connectivity. B) strong vested interests. C) institutional and regulatory barriers. D) advances in wireless technology.
answer

D
question

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.
answer

B
question

Scale economies may be less important for new entrants that launch Web-based businesses because A) it is relatively more expensive for an incumbent firm to create an impressive Web appearance than a new entrant. B) larger, older companies will have the same Internet expenses as new entrants. C) new entrants do not derive any benefit from making volume purchases. D) the Web makes it possible for new entrants to enter a market with relatively lower capital costs.
answer

D
question

End users are A) the final consumers in a distribution channel. B) usually the AC in B2C. C) likely to have greater bargaining power because of the Internet. D) all of the above
answer

D
question

Which of the following is not one of the reasons why the bargaining power of buyers is increasing because of the Internet: A) the Internet makes it easier for consumers to obtain the information needed to compare prices and make buying decisions. B) Internet technologies are making the cost of switching products or services lower. C) the Internet isolates customers which makes differential pricing possible. D) Internet purchasing practices are shifting emphasis to price competition which is making consumers less loyal.
answer

C
question

Incumbent firms may enjoy increased bargaining power because the Internet A) focuses marketing efforts on end users. B) diminishes the power of many distribution channel intermediaries. C) increases channel conflict. D) has reduced the number of wholesalers and distributors.
answer

B
question

The reason Levi Strauss & Co. closed its online store for selling Levi jeans was A) to avoid conflict with its supply chain. B) to participate in disintermediation. C) to lower the cost of accessing distribution channels. D) to eliminate channel conflict with retail outlets.
answer

D
question

One of the greatest threats to supplier power that has emerged because of the Internet is A) the Internet inhibits the ability of suppliers to offer highly differentiated products or services. B) Internet technologies cannot easily be imitated. C) procurement technologies eliminate the need for suppliers. D) the cost of accessing business customers has increased.
answer

A
question

Supplier power has increased because of the Internet for all of the following reasons except A) the growth of new Web-based businesses has created more outlets for suppliers to sell to. B) some suppliers have created Web-based purchasing systems that encourage switching. C) the process of disintermediation makes it possible for some suppliers to reach end users directly. D) software that links buyers to a supplier=s website has created rapid, low-cost ordering capabilities.
answer

B
question

EncrypTix is an electronic delivery company that uses bar-code printing technology to let customers print-out their own tickets to concerts and sporting events. This new Internet company is an example of: A) channel conflict. B) disaggregation. C) disintermediation. D) reintermediation.
answer

D
question

In general, the threat of substitutes is heightened because the Internet: A) introduces new ways to accomplish the same tasks. B) lowers switching costs. C) lowers barriers to entry. D) increases output per unit of cost.
answer

A
question

Conferenza is an example of an Internet company that offers busy people an alternative way to participate in conferences. This is an example of Internet-based A) rivalry. B) competitive aggressiveness. C) channel conflict. D) substitution.
answer

D
question

Internet-based venues that draw business buyers and sellers together in one virtual space where participants can reach new customers and reduce transaction costs are known as A) browsers. B) E-marketplaces. C) cyberstores. D) portals.
answer

B
question

Internet \”cookies\” can be used to violate consumer privacy because they A) reveal an individual Web users browsing habits. B) include a record of purchases that can be sold to marketers. C) are recorded on your hard drive and can be retrieved without your knowledge or consent. D) all of the above
answer

D
question

Which of the following is not one of the reasons the Internet increases the intensity of competitive rivalry: A) the Internet makes it more difficult for firms to differentiate themselves. B) the Internet has Acommoditized products that previously were regarded as rare or unique. C) the Internet has eliminated the importance of location by making geographically distant products available online. D) the Internet has made it more difficult to imitate the advantages achieved by competitors.
answer

D
question

How do infomediaries and consumer information websites increase the intensity of competitive rivalry: A) by shifting customers attention away from issues of price. B) by making competitors in cyberspace seem less equally balanced. C) by consolidating the marketing message that consumers use to make a purchase decision to a few key pieces of information that the selling company has little control over. D) by highlighting a firms unique selling advantages.
answer

C
question

The sum total of all expenses associated with conducting business are known as A) transaction costs. B) historical costs. C) opportunity costs. D) operating expenses.
answer

A
question

Which of the following is not one of the ways the Internet is lowering transaction costs A) eliminating supply chain intermediaries. B) evaluating employee performance. C) minimizing office expenses. D) reducing business travel.
answer

B
question

Four Internet-based activities that are enhancing firms’ capabilities to use the Internet to add value include: A) outsourcing, problem-solving, bill-paying, and delivery. B) evaluating, bill-paying, customizing, and returning. C) search, rescue, repair, return. D) search, evaluation, problem-solving, and transaction.
answer

D
question

Internet search activities include A) generating action plans. B) considering alternatives. C) gathering information. D) making payments and taking delivery.
answer

C
question

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.
answer

B
question

Unique content will not add value to an Internet website under the following conditions: A) the cost of developing the content exceeds the benefits gained. B) visitors to the website do not value or use the content. C) the content is unreliable. D) all of the above.
answer

D
question

Examples of value-adding content often found on websites include all of the following except A) customer feedback. B) online shopping. C) expertise. D) entertainment programming.
answer

B
question

Internet business models A) outline methods that online businesses use to create value. B) cannot be used by traditional businesses. C) outline specific actions a firm needs to take to be profitable. D) cannot be combined to create additional competitive advantages.
answer

A
question

All of the following are examples of Internet business models except A) Referral-based model B) Subscription-based model C) Prescription-based model D) Production-based model
answer

C
question

All of the following are ways that Internet technologies are being used to enhance an overall cost leadership strategy except: A) Quick online responses to service requests and rapid feedback to customer surveys and product promotions are enhancing marketing efforts. B) Direct access to progress reports and the ability for customers to periodically check work-in-progress is minimizing rework. C) Online bidding and order processing are eliminating the need for sales calls and minimizing sales force expenses. D) Online purchase orders are making many transactions paperless, reducing the costs of procurement and paper.
answer

A
question

Dell Computer has an online ordering system that allows consumers to configure their own computers before Dell builds them. This capability is an example of A) electronic data interchange. B) knowledge management. C) collaborative design. D) mass customization.
answer

D
question

Which of the following methods of implementing a differentiation strategy has been greatly enhanced because of Internet technologies? A) celebrity endorsements B) prestige packaging C) exceptional service D) mass customization
answer

D
question

All of the following are ways that Internet technologies are being used to enhance a differentiation strategy except: A) Internet-based knowledge management systems that link all parts of the organization are shortening response times and accelerating organization learning. B) Virtual organizing and online \”officing\” are being used to minimize firm infrastructure requirements and lower costs. C) Online access to real-time sales and service information is being used to empower the sales force and continually update R&D and technology development efforts. D) Automated procurement and payment systems provide both suppliers and customers with access to detailed status reports and purchasing histories.
answer

B
question

Which of the following phrases best completes the 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.
answer

D
question

All of the following are ways that Internet technologies are being used to enhance a focus strategy except: A) Permission marketing techniques are focusing sales efforts on specific customers who opt to receive advertising notices. B) Niche portals that target specific groups are providing advertisers with access to viewers with specialized interests. C) Human resources departments are using online testing and evaluation techniques in the hiring process and online training after they hire. D) Procurement technologies that use Internet software to match buyers and sellers are highlighting specialized buyers and drawing attention to smaller suppliers.
answer

C
question

Internet start-up Buy.com tried to build brand with an overall low cost leadership strategy. Why is this a risky strategy? A) To build brand recognition, companies must sell high-priced products or services. B) The Internet may help focusers build competitive advantage, but not low cost leaders. C) Only combination strategies that combine features of more than one competitive strategy will work for Internet companies. D) Investing heavily to build brand recognition is considered ineffective for low cost leaders because customers who seek low prices are typically not brand loyal.
answer

D
question

Juno.com became the third largest Internet service provider by offering free email service, but eventually had to stop this practice because of what potential pitfall: A) it offered the free service to build market share but then could not sustain the low-cost strategy. B) it copied a close competitor and was in danger of being sued. C) it let others aspects of its business slip because it was overly focused on selling advertising to support the free e-mail service. D) by offering the service for free it forfeited its bargaining power over suppliers.
answer

A
question

Pets.com spent an enormous sum promoting its brand but eventually closed during the dot-com downturn. Which of the following was not one of the reason Pets.com failed: A) it was based on a faulty business model with overly thin margins. B) it overextended its focus on a market niche and tried to appeal to an overly broad audience. C) despite its efforts, the Pets.com marketing campaign was ill-conceived and did not create name recognition. D) its strategy was based on a value proposition that customers did not value.
answer

B
question

One of the reasons the Internet is eroding sustainable competitive advantages is A) incumbent firms are entering market segments that they previously considered to be too small. B) nearly all competitors will have greater access to tools for managing costs making it hard for any one to achieve an advantage. C) differentiators have been able to preserve the unique advantages that have always been the hallmark of their success. D) firms are ignoring opportunities to offer high-end services in niche markets.
answer

B
question

Combination strategies may work best for Internet competitors because, in the Internet age, A) there are fewer rather than more opportunities for achieving sustainable advantages by using traditional competitive strategies. B) cost management and control systems will increase in importance as management tools that all companies can use. C) many of the unique advantages that were the hallmark of success for differentiators can easily be imitated. D) all of the above
answer

D
question

When an organization with a simple structure increases its sales revenue and volume of outputs, it is most likely to develop a A) divisional structure. B) functional structure. C) product-market structure. D) geographic structure.
answer

B
question

When an organization with a functional structure diversifies into related product-markets, it generally A) maintains its functional structure. B) develops a divisional structure. C) develops a matrix structure. D) develops a worldwide product-division structure.
answer

B
question

A strategy of related diversification requires most firms to organize around geographical areas or product lines. This type of organizational growth leads to a(n) A) divisional structure. B) functional structure. C) matrix structure. D) international structure.
answer

A
question

Generally speaking, discussions of the relationship between strategy and structure strongly imply that A) strategy follows structure. B) structure follows strategy. C) strategy can effectively be formulated without considering structural elements. D) structure typically has a very small influence on a firm’s strategy.
answer

B
question

All of the following statements about simple organizational structures are true except A) small firms with a narrow product-market scope will adopt such a structure. B) decision making authority is highly centralized. C) there is little specialization of tasks. D) creativity and individualism are rare.
answer

D
question

A simple structure is characterized by A) high specialization and low centralization. B) low specialization and high centralization. C) low formality and low creativity. D) high formality and low centralization.
answer

B
question

Functional structures are usually found in organizations where there is A) high volume production. B) unrelated product lines or service offerings. C) very little vertical integration. D) a strong need to decentralize decision making.
answer

A
question

At Sharp Corporation, work is divided into units that specialize in production, marketing, research and development, and other management tasks. This is an example of a A) simple structure. B) functional structure. C) divisional structure. D) matrix structure.
answer

B
question

Which of the following is an advantage of a functional type of organizational structure? A) decentralized decision-making enhances an organization-wide perspective across functions. B) it facilitates the development of general management talent. C) pooling of specialists enhances coordination and control. D) it is easy to establish uniform performance standards
answer

C
question

Which of the following is a disadvantage of a functional type of organizational structure? A) differences in functional orientation may impede communication and coordination. B) use of managerial and technical talent is inefficient due to pooling of expertise in functional areas. C) decision making is centralized at the top of the organization. D) managers tend to be overly concerned with long-term strategies that minimize the importance of functional area strengths.
answer

A
question

A divisional structure A) is organized around functional area departments. B) typically improves the performance of firms pursuing a strategy of vertical integration. C) facilitates the development of general managers. D) enhances centralized decision making
answer

C
question

Which of the following is an advantage of a divisional type of organizational structure? A) efficient use of managerial and technical talent B) an enhanced ability to respond quickly to changes in the external environment C) high degree of emphasis on long term performance D) uniformity in image and quality across divisions
answer

B
question

All of the following are disadvantages of a divisional type of organizational structure except A) it can be very expensive compared to a functional organizational structure. B) there is a strong tendency for divisions to focus on short-term performance. C) there can be dysfunctional competition among divisions. D) there is separation of strategic and operating control.
answer

D
question

An organization such as ConAgra that has dozens of different divisions with similar products will probably have the greatest success with which form of organization structure? A) functional structure B) matrix structure C) strategic business unit structure D) holding company structure
answer

C
question

All of the following are advantages of a strategic business unit (SBU) type of organizational structure except A) divisions with similar products, markets, or technologies are formed into homogeneous groups that can achieve synergies. B) divisional executives can respond quickly to market changes and opportunities. C) planning and control by the corporate office is more manageable. D) the corporate office is more removed from the individual divisions.
answer

D
question

Important advantages of a holding company structure include A) savings in personnel and overhead expenses associated with a small corporate office. B) a high level of awareness at the corporate office of issues facing individual divisions. C) a high level of control of division executives by executives at the corporate level. D) gaining synergistic benefits across businesses.
answer

A
question

Strategic business unit (SBU) and holding company structures result from extensive A) diversification. B) vertical integration. C) international expansion. D) organizational flattening.
answer

A
question

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
answer

C
question

A matrix organizational structure is characterized by A) dual reporting relationships. B) a combination of functional and divisional organization structures. C) efficient use of resources and expertise. D) all of the above
answer

D
question

Complicated working relationships, intense power struggles, and excessive reliance on group processes are disadvantages of what type of organizational structure? A) divisional B) matrix C) holding company D) functional
answer

B
question

Which of the following is considered to be an advantage of a matrix structure? A) the layering of matrices B) increased clarity in reporting relationships C) increased responsiveness to the market D) fewer power struggles and reduced conflict
answer

C
question

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.
answer

B
question

The relationship between strategy and structure can be best described as A) strategy determines structure but structure does not determine strategy. B) structure determines strategy but strategy does not determine structure. C) strategy and structure influence each other. D) a third force determines both strategy and structure.
answer

C
question

The boundaries between levels in an organization’s hierarchy are known as A) vertical boundaries. B) horizontal boundaries. C) external boundaries. D) geographic boundaries.
answer

A
question

Which of the following boundaries exist between the functional areas of an organization? A) vertical boundaries B) horizontal boundaries C) external boundaries D) all of the above
answer

B
question

Which of the following is not a boundaryless organizational design? A) virtual. B) modular. C) matrix. D) barrier-free.
answer

C
question

Which of the following is not an advantage of teams? A) because teams interact so closely, coordination and integration becomes unnecessary. B) teams substitute peer-based control for hierarchical control of work. C) because of sharing, teams often develop more creative solutions. D) teams permit the absorption of administrative tasks previously performed by specialists.
answer

A
question

According to the text, there are elements of team building that influence a team’s success. These include all of the following except A) work. Work should be relevant and meaningful to group members. B) people bonding during the \”heat of the battle.\” Team members become more unified during a crisis. C) titles. Titles are important to a team’s success. D) teams taking care of their own. Team members look after each other’s best interest.
answer

C
question

Organizations are increasingly using teams for many reasons. The difference between a good team and an outstanding team has been found to be A) the combined technical skills of the members. B) similarities in the way team members solve problems. C) the way team members treat each other. D) similarities in the age and experience of team members.
answer

C
question

Which of the following is not a disadvantage of the barrier-free form of organization? A) lack of strong leadership can lead to coordination problems. B) democratic process can be time-consuming and difficult to manage. C) fewer internal barriers means fewer political issues to deal with. D) if trust among employees is not sufficiently high, organizational performance may suffer.
answer

C
question

What type of organization is defined as \”a central hub surrounded by networks of outside suppliers and specialists\”? A) matrix B) virtual C) modular D) barrier-free
answer

C
question

What is the name of the practice that many modular organization use to grow? A) operational effectiveness B) outsourcing C) strategic leveraging D) strategic enabling
answer

B
question

What advantages does outsourcing provide an organization? A) accessing best in class goods and services B) enabling rapid expansion with relatively low capital investment C) focusing scarce resources on core competencies D) all of the above
answer

D
question

Which of the following is not a strategic risk of outsourcing? A) loss of critical skills B) loss of cross-functional skills C) loss of control over a supplier D) loss of non-vital functions
answer

D
question

Nike is a company that makes use of the concept of \”product expatriates.\” Product expatriates are A) managers from the home country sent abroad to oversee the marketing of a company’s products. B) managers from suppliers who come to work at a company’s headquarters. C) managers of the company sent abroad to work at the plants of its suppliers. D) local nationals hired by the company in the countries from which it sources products.
answer

C
question

The phrase that best defines a virtual organization is A) a dot.com company. B) a type of modular structure. C) an organization that uses information technology to integrate different functions. D) a continually evolving network of independent companies.
answer

D
question

Lockheed Martin uses a coalition of three entities — its own company, academia, and government — to achieve its goals. This is an example of a A) matrix organization. B) modular organization. C) virtual organization. D) government contractor.
answer

C
question

Complete the following sentence: \”Virtual organizations ____________________________ whereas modular organizations ____________________________.\” A) are usually permanent, are usually temporary B) accept interdependent destinies, pursue collective strategies C) pursue collective strategies, forfeit strategic control D) give up part of their strategic control, retain full strategic control
answer

D
question

Which of the following is not a disadvantage of virtual structures? A) difficulty in individual and organizational knowledge sharing. B) potential loss of operational control among partners. C) loss of strategic control over emerging technology. D) difficulty in determining where one company ends and another begins due to close interdependencies.
answer

A
question

Technical Computer Graphics uses small project teams and forms alliances with its teams, customers, and suppliers to accomplish projects. This is an example of A) combining forms of organizational structure. B) outsourcing. C) horizontal systems and processes. D) democratic management control.
answer

A
question

Organizations generally tend to become internally focused when faced with A) resource scarcity. B) declining performance. C) external pressures. D) all of the above.
answer

D
question

Tools and techniques used to achieve effective coordination and integration of key activities in an organization include all of the following except A) horizontal organization structures. B) horizontal systems and processes. C) horizontal diversification. D) communications and information technologies.
answer

C
question

In the opening case, Morrison Knudsen, CEO Bill Agee launched a program to build railroad cars. This was an example of A) designing the organization. B) steering the company away from its core competencies. C) unethical behavior. D) inspired leadership.
answer

B
question

In the opening case, Morrison Knudsen, CEO Bill Agee made money investing company funds in securities and claiming capital gains as operating income, as well as created an extravagant lifestyle for himself as the firm’s leader. These are examples of A) striving for excellence. B) using the status of his position to build the firm’s reputation. C) decisive leadership. D) potentially unethical behaviors.
answer

D
question

Which of the following is an important characteristic of a leader? A) goal-oriented B) satisfied with the status quo C) reactive D) focused on past performance
answer

A
question

All of the following statements about leadership are true except A) leadership is focused on the creation and implementation of a creative vision. B) leadership is the process of transforming organizations from what they are to what the leader would have them become. C) leaders support the status quo and seek control mechanisms to maintain it. D) effective implementation of strategy is essential for successful leadership.
answer

C
question

According to the text, effective leadership is like a three-legged stool consisting of all of the following except A) dedication to maintaining the status quo B) nurturing a culture dedicated to excellence and ethical behavior C) determining a direction D) designing the organization
answer

A
question

The leader’s role in developing a strategic vision provides many benefits including A) a clear future direction. B) a framework for their organization’s mission and goals. C) enhanced employee communication and commitment. D) all of the above
answer

D
question

Poor organizational design by leaders can result in all of the following except A) insufficient mechanisms that integrate and coordinate activities across the firm B) inadequate accountability among managers and employees C) inappropriate budgeting and control systems D) teams, systems, and organizational processes that facilitate implementation
answer

D
question

Marshall Industries CEO Rod Rodin scrapped the company’s commission-based reward system because it was rewarding employees for inappropriate behavior. This is an example of A) setting a direction B) designing the organization C) unethical behavior D) failure to maintain the status quo
answer

B
question

Leaders play a key role in developing and sustaining an organization’s _____________. A) status quo B) culture C) reporting relationships D) rules and regulations
answer

B
question

Barriers in which the design of the organization’s structure, information processing, and reporting relationships, impede the proper flow and evaluation of information are known as A) systemic barriers. B) behavioral barriers. C) political barriers. D) barriers to entry.
answer

A
question

Barriers associated with a manager’s tendency to look at issues from a biased or limited perspective are known as A) systemic barriers. B) behavioral barriers. C) political barriers. D) barriers to exit.
answer

B
question

Refusal to share information, conflicts over resources, conflicts between departments and divisions, and petty interpersonal differences are symptoms of which type of barrier to change? A) systemic barriers. B) political barriers. C) behavioral barriers. D) all of the above.
answer

B
question

Which of the following explains why organizations are prone to inertia and slow to change? A) personal time constraints. B) political barriers. C) vested interests in the status quo. D) all of the above.
answer

D
question

All of the following constitute organizational bases of a leader’s power except A) legitimate power. B) reward power. C) referent power. D) coercive power.
answer

C
question

Expert power is A) derived from organizationally conferred decision-making authority. B) arises from a manager’s access, control, and distribution of information that is not freely available to everyone in an organization. C) derived from referent power. D) is derived from the leader’s capability and knowledge in a particular field.
answer

D
question

Coercive power is A) the power exercised by use of fear of punishment for errors of omission or commission by employees. B) The power of persuasion exercised by a charismatic leader to get compliance from reluctant subordinates. C) arises from a manager’s access, control, and distribution of information that is not freely available to everyone in an organization. D) the ability of the leader or manager to confer rewards for positive behaviors or outcomes.
answer

A
question

The source of referent power is A) a subordinate’s identification with the leader. B) a leader’s identification with the subordinates. C) derived from the fact that the manager can potentially act as a reference when the employee applies for another job. D) derived from the manager’s ability to provide effective incentives to employees.
answer

A
question

The three broad sets of capabilities that a leader should possess include all of the following except A) technical skills. B) cognitive abilities. C) calculative abilities. D) emotional intelligence
answer

C
question

All of the following are components of emotional intelligence (EI) except A) self-awareness. B) self-regulation. C) self-promotion. D) empathy.
answer

C
question

Which component of emotional intelligence (EI) enables a manager to have a deep understanding of the existence and importance of cultural and ethnic differences? A) self-awareness. B) empathy. C) social skills. D) self-regulation.
answer

B
question

Complete the following sentence: The days when a company’s leader ________________ are gone; today, all employees need to be involved in ________________________. A) learned for the organization; learning and adapting B) managed from the top; self-management C) delegated authority; assuming responsibility and control D) was held in high regard; holding leaders accountable for their actions
answer

A
question

What happens to organizations that get caught up in day-to-day work activities? A) they fail to think objectively about themselves and their business. B) they fail to refresh their strategies or reengineer their work processes. C) they fail to ask probing questions about their basic assumptions. D) all of the above
answer

D
question

Which of the following is not a characteristic of a successful learning organization? A) they create a proactive, creative approach to the unknown. B) they actively solicit the involvement of employees at all levels. C) they regularly engage in activities to reinforce the status quo. D) they enable everyone to use their intelligence and apply their imagination.
answer

C
question

Complete the following sentence: \”Inspiring and motivating people with a mission or purpose is a ____________________________________ for developing an organization that can learn and adapt.\” A) necessary and sufficient condition B) necessary, but not a sufficient condition C) goal, but not a necessary condition D) goal and a required pre-condition
answer

B
question

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) power broker.
answer

C
question

The \”top down\” perspective of empowerment A) encourages intelligent risk-taking. B) trusts people to perform. C) encourages cooperative behavior. D) delegates responsibility.
answer

D
question

The \”bottom-up\” perspective of empowerment A) clarifies the organization’s values and mission. B) builds teams to encourage cooperative behavior. C) communicates specific plans. D) encourages employees to \”ask permission rather than forgiveness.\”
answer

B
question

The empowerment perspective that involves trusting people to \”do the right thing,\” takes intelligent risks, and act with a sense of ownership is known as A) the leadership perspective. B) the top-down approach. C) the bottom-up approach. D) the risk-taking model.
answer

C
question

An empowerment perspective that delegates responsibility, focuses on accountability, and relies on clearly specified rewards to motivate is known as A) the leadership perspective. B) the top-down approach. C) the bottom-up approach. D) the accounting model.
answer

B
question

Manufacturing employees at Chaparral Steel are directly involved with customers and have access to the new innovative knowledge being developed in its manufacturing processes. This is an example of A) hierarchical control. B) knowledge management. C) enabling heroes and drones. D) employee empowerment.
answer

D
question

Which of the following is not one of the three core activities in the \”open book\” management system pioneered by Jack Stack? A) information is generated daily that reflects the work performance and production costs of each employee. B) the information is aggregated once a week and shared with employees at every level. C) information about customer expectations and feedback is distributed monthly. D) extensive training in how to use and interpret the numbers is provided to all employees.
answer

C
question

At Whole Foods, the \”no secrets\” management philosophy allows employees access to most of the company’s operating and financial data. This is an example of A) information sharing. B) employee advocacy. C) bottom-up empowerment. D) internal benchmarking.
answer

A
question

Internal benchmarking at Whole Foods A) is used by teams to compete against other teams in their stores. B) is used by teams which compete against their own goals for sales, growth, and productivity. C) is used by teams to compete against similar teams at different stores and regions. D) all of the above
answer

D
question

Functional benchmarking A) is not very useful for organizations with a divisional organizational structure. B) endeavors to determine best practices regardless of industry. C) restricts the search for best practices to competitors. D) is useful when researching industry-specific standards.
answer

B
question

All of the following are guidelines an organization can use to promote the challenging of the status quo except A) establishing a \”culture of dissent.\” B) forcefully creating a sense of urgency. C) fostering a culture that encourages risk taking. D) creating a results-based reward system.
answer

D
question

Companies that cultivate cultures of experimentation and curiosity make sure that _________ is not, in essence, \”a four-letter word.\” A) success B) failure C) dissent D) risk taking
answer

B
question

Which of the following statements about ethics is false? A) ethics may be defined as a system of right and wrong. B) ethics assists individuals in deciding when an act is moral or immoral. C) ethics is not concerned with whether or not an act is socially desirable. D) business ethics is the application of ethical standards to commercial enterprises.
answer

C
question

All of the following statements about ethical organizations are true except A) the potential benefits of an ethical organization are few but direct. B) ethical values shape the search for opportunities. C) organizational ethics define what a company is and what it stands for. D) ethics provide a common frame of reference that serves as a unifying force.
answer

A
question

As a manager, when faced with ethical crises you should A) focus on issues most relevant to stockholders. B) wait for the other party to make the first move. C) take the initiative to address the problem. D) cover up as much as possible.
answer

C
question

Proactive measures to prevent organizational ethics problems include all of the following except A) instituting a reward system which considers outcomes as its primary criterion. B) using leaders as role models of ethical behavior. C) issuing statements describing the organization’s commitment to certain standards of behavior. D) using the organization’s information systems as a control system.
answer

A
question

Which of the following statements would least likely be found in a corporate credo? A) maximize financial benefits for stakeholders. B) provide secure and stable employment for employees. C) establish an environment that enhances professional growth. D) support community organizations and projects.
answer

A
question

A _________________ is a statement describing an organization’s commitment to certain standards of ethical behavior. A) role model B) control system C) corporate credo D) reward structure
answer

C
question

In the opening case, Polaroid fell victim to the \”innovator’s dilemma.\” What does this refer to? A) Excessive borrowing in order to develop more radical innovations. B) Whether to innovate radically or incrementally. C) Becoming preoccupied with meeting current market needs and ignoring future innovation needs. D) Conflict over how to integrate product and process innovations.
answer

C
question

In the opening case, Polaroid was forced to declare bankruptcy after 30 years of strong financial performance. What was the fundamental problem that led to Polaroid’s downfall? A) It overestimated the value of its core business. B) Its innovations were considered too radical. C) It was unwilling to borrow funds to invest in innovation. D) All of the above.
answer

A
question

Incremental innovations A) are usually highly disruptive. B) usually represent technological breakthroughs. C) are usually small improvements in products or processes. D) nearly always can be patented.
answer

C
question

Radical innovations A) often result in quick profits. B) often represent technological breakthroughs. C) usually apply to products and processes simultaneously. D) usually cannot be patented.
answer

B
question

________________ 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
answer

D
question

_______________________________ refers to efforts to create designs and applications of technology to develop new products; _______________________ refers to efforts to improve the efficiency of organizational systems such as manufacturing and operations. A) Radical innovation; incremental innovation B) Breakthrough innovation; instrumental innovation C) Product innovation, process innovation D) Product innovation, service innovation
answer

C
question

Whereas ________________________ are often associated with a low cost leader strategy, ____________________________ are frequently an important aspect of a differentiation strategy. A) process innovations, product innovations B) product innovations, service innovations C) radical innovations; instrumental innovations D) marketing innovations; management innovations
answer

A
question

All of the following are dilemmas faced by corporations trying to manage the innovation process except A) launching incremental rather than \”pre-emptive\” innovations. B) emphasizing marketing over management innovations. C) preferring experience over initiative. D) choosing internal rather than external staffing.
answer

B
question

The innovation dilemma known as building capabilities versus collaborating refers to A) developing innovation skills internally versus partnering with qualified outsiders. B) building innovative products in-house versus outsourcing. C) building credibility by launching products ahead of potential collaboration partners. D) all of the above.
answer

A
question

The innovation dilemma known as seeds versus weeds refers to A) choosing to pursue radical rather than incremental innovations. B) choosing to pursue product rather than process innovations. C) promoting organizational stars onto innovation teams rather than involving all employees in innovation efforts. D) none of the above.
answer

D
question

In the 1990s, DuPont used its knowledge of plastics to develop biodegradable plastic products. This is an example of A) focusing on process rather than product innovation. B) defining its innovation efforts within the context of its \”strategic envelope.\” C) radical innovation. D) public relations since plastics are not biodegradable.
answer

B
question

The advantages of collaborating with strategic partners in order to innovate include A) obtaining skills and new knowledge from outside sources. B) making firms identify their own strengths and weaknesses. C) making managers clarify what an innovation project requires to be successful and who will accomplish it. D) all of the above.
answer

D
question

In a typical corporation, which of the following impact how the people within the corporation recognize entrepreneurial opportunities? A) structural features that guide and constrain action B) corporate culture C) organizational systems that foster learning and manage rewards D) all of the above
answer

D
question

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.
answer

C
question

According to the text, ________________________ which support fledgling startups are often used to pursue specific entrepreneurial ventures developed by _________________________. A) collaboration partners; strategic partners B) business incubators; new venture groups C) product champions; corporate venture capitalists D) lower-level managers; upper-level managers
answer

B
question

Corporate business incubators typically provide all of the following functions except A) physical space. B) mentoring. C) funding. D) student interns.
answer

D
question

Intel has invested $8 billion in several e-business start-ups. This is an example of A) strategic renewal. B) internal development. C) mergers and acquisitions. D) corporate venture funding.
answer

D
question

Common features of a dispersed approach to corporate entrepreneurship include all of the following except A) semi-autonomous new venture groups. B) a strong spirit of entrepreneurship. C) a top-down approach to supporting entrepreneurial behavior. D) an entrepreneurial culture.
answer

A
question

In corporations with a strong entrepreneurial culture, the willingness and ability to change A) is imposed from the top down. B) is considered a core capability. C) often leads to instability. D) often worries stakeholders such as suppliers and creditors.
answer

B
question

Product champions A) are typically senior executives. B) are usually inventors of some sort. C) scavenge for resources and encourage others to back promising new ideas. D) are strong supporters of the status quo.
answer

C
question

Project ____________ involves justifying whether an opportunity is attractive in the marketplace ; project ______________ involves evaluating the strategic and economic impact of a new venture. A) impetus, definition B) definition, impetus C) reward, development D) development, focus
answer

B
question

On average, approximately what percentage of corporate ventures reach profitability after six years? A) 80 percent B) 65 percent C) 50 percent D) 35 percent
answer

C
question

Financial reasons for undertaking internal corporate venturing include A) strengthening competitive position. B) obtaining above average returns C) adding to the corporation’s resource base D) all of the above
answer

B
question

Strategic reasons for undertaking a corporate venture include which of the following: A) entering into new markets. B) expanding capabilities by acquiring new knowledge. C) building the corporation’s base of resources. D) all of the above
answer

D
question

All of the following are questions that should be answered when evaluating the performance of corporate venturing efforts except A) is the venture attracting external venture funding? B) is the venture considered to be a market success? C) does the venture add to the worth of the firm internally? D) does the value proposition offered by the venture insulate it from competitive attack?
answer

A
question

To evaluate whether to get into automobile sales, Wal-Mart recently invested in just four auto sales operations on a trial basis to assess consumer reaction. According to the text, this action reflects a form of A) bottom-up corporate venturing. B) real options logic. C) financial planning. D) environmental scanning.
answer

B
question

A manager whose role is to question the viability of corporate venture projects is know as a(n) A) product champion. B) exit champion. C) rising star. D) mentor.
answer

B
question

Whereas ________________________ are willing to violate procedures and operate outside normal channels, ___________________________ gather hard data and develop a strong case for why a project should be killed. A) senior managers; entrepreneurial leaders B) strategic managers; financial managers C) exit champions; product champions D) product champions; exit champions
answer

D
question

Which of the following is not one of the dimensions of entrepreneurial orientation? A) proactiveness B) risk taking C) autonomy D) opportunism
answer

D
question

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.
answer

C
question

After 15 teams created 128 different phones, Chris Galvin, CEO of Motorola, recently eliminated the autonomous teams being used to develop new wireless phones. This was necessary because such teams A) often lack coordination. B) sometimes waste resources on projects with questionable feasibility. C) sometimes create inefficiencies through duplication of effort. D) all of the above
answer

D
question

Which of the following dimensions of entrepreneurial orientation is described as \”a forward-looking perspective characteristic of a marketplace leader that has the foresight to seize opportunities\”? A) proactiveness B) risk taking C) autonomy D) competitive aggressiveness
answer

A
question

All of the following statements about innovativeness are true except A) it refers to making decisions and taking risks without certain knowledge of probable outcomes. B) it refers to a firm=s efforts to find new opportunities and novel solutions. C) it involves creativity and experimentation. D) it is aimed at developing new products, services, and processes.
answer

A
question

The 3M Corporation, one of the most highly innovative companies, uses several approaches and \”rules-of-thumb\” to encourage innovation. Which of the following is not one of them? A) ensure that all risk-taking activities have a financial pay-off within one year. B) encourage experimentation and risk-taking by tolerating failure. C) reward the champions of successful new product ideas. D) invite customers to brainstorm about new product concepts.
answer

A
question

According to the text, which of the following is not one of the methods companies can use to enhance their competitive position via innovativeness? A) fostering creativity and experimentation B) investing in new technology, R&D, and continuous improvement C) copying the business practices or techniques of successful competitors D) departing from existing technologies to develop products and practices that go beyond the current state of the art
answer

C
question

The benefits gained by firms that are the first to enter new markets, establish brand identity, and/or adopt new technologies are known as A) competitive aggressiveness. B) technological capabilities. C) first-mover advantages. D) breakthrough innovations.
answer

C
question

Sony Corporation’s mission statement says, \”We should always be the pioneers with our products — out front leading the market.\” This is an example of A) innovativeness. B) proactiveness. C) competitive aggressiveness. D) autonomy.
answer

B
question

According to the text, firms that want to enhance their entrepreneurial position by being competitively aggressive should A) enter markets with drastically lower prices. B) foster creativity and experimentation. C) continuously seek out new products or services. D) research risk factors to minimize uncertainty.
answer

A
question

All of the following are types of risks that executives must address except A) business risk taking. B) financial risk taking. C) personal risk taking. D) product-market risk taking
answer

D
question

Which kind of risk taking requires that a company borrow heavily or commit a large portion of its resources in order to grow? A) business risk taking B) financial risk taking C) personal risk taking D) technological risk taking
answer

B

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