MGT195-HK1. BUSINESS POLICY AND STRATEGY (MGT195-HK1) > TAKE ASSESSMENT: FINAL EXAMQuestion 1 1 points SaveThe laws and the enforcement of laws associated with the protection of intellectual property rights represent a significant currency and management risk to multinational firms.TrueFalseQuestion 2 1 points SaveSoftware Tech Inc. a company in the computer software industry invests heavily in R&D and product design. Thus most of its value is added:UpstreamIn its infrastructureDownstreamMidstreamQuestion 3 1 points SaveOffshoring takes place when a firm decides to shift an activity that they were previously performing in a domestic location to a foreign location.TrueFalseQuestion 4 1 points SaveElements of a multidomestic strategy may facilitate the competitive advantage of cost leadership by:Flexibility in adjusting to local laws and customsDecreased duplication of inventories which are often involved in having multiple plants producing similar productsDecreased shipping and transportation costs inherent in local productionEconomies of scale gained through centralized production of standardized productsQuestion 5 1 points SaveCorporations with multiple foreign operations that act very independently of one another are following a multidomestic strategy.TrueFalseQuestion 6 1 points SaveThe sale of Boeing’s commercial aircraft and Microsoft’s operating systems in many countries enable these companies to benefit from:Higher prices in their domestic marketsEconomies of scaleOptimizing the location for many activities in their value chainReducing their exposure to currency risksQuestion 7 1 points SaveAppreciation of the U.S dollar will have the following impact on McDonald’s:Lower sales abroad because foreign customers cannot afford McDonalds’ productsMore transfer of ingredients from the U.S to branches abroad to take advantage of the higher dollarLower profits because foreign profits will be reduced when measured in dollarsNo impact at allQuestion 8 1 points SaveA multidomestic strategy would likely include the use of high volume centralized production facilities to maximize economies of scale.TrueFalseQuestion 9 1 points SaveAn advantage of international expansion is that it can enable a firm to optimize the location of every activity in its value chain.TrueFalseQuestion 10 1 points SaveIndustries in which proportionally more value is added in upstream activities are more likely to benefit from a global strategy than those in which more value is added downstream (closer to the customer).TrueFalseQuestion 11 1 points Save__________ entail the creation of a third-party legal entity whereas __________ do not.Licensing agreements; joint venturesJoint ventures; strategic alliancesStrategic alliances; joint venturesFranchising agreements; strategic alliancesQuestion 12 1 points SaveThe form of entry strategy into international operations that offers the lowest level of control would be:FranchisingLicensingJoint ventureExportingQuestion 13 1 points SaveWhich one of the following is one of Theodore Levitt’s assumptions supporting a pure global strategy?Consumers are willing to pay more for specific product featuresCustomer needs and interests are becoming more dissimilarIf the world markets are treated as heterogeneous substantial economies of scale are easily achievedMNCs can compete with aggressive pricing on low cost products that meet the common needs of global consumersQuestion 14 1 points SaveThe 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:Governmental practices that are business-friendlyLocal entrepreneurs that can train workers and invest in modern technologyHigh tariffs and taxes on foreign investors and multinational corporations provide income to improve living conditionsSound management of broader economic factors such as interest rates and inflationQuestion 15 1 points SaveBecause many countries are investing in countries other than their own each country is becoming more autonomous and independent.TrueFalseQuestion 16 1 points SaveAll of the following are limitations of a global strategy except:Limited ability to adapt to local marketsThe ability to locate activities in optimal locationsThe concentration of activities may increase dependence on a single facilitySingle locations may lead to higher tariffs and transportation costsQuestion 17 1 points SaveAs a manager when faced with ethical crises you should:Focus on issues most relevant to stockholdersWait for the other party to make the first moveTake the initiative to address the problemCover up as much as possibleQuestion 18 1 points SaveEmotional intelligence (EI) is one of the components of a high intelligence quotient (IQ).TrueFalseQuestion 19 1 points SaveProactive measures to prevent organizational ethics problems include all of the following except:Instituting a reward system which considers outcomes as its primary criterionUsing leaders as role models of ethical behaviorIssuing statements describing the organization’s commitment to certain standards of behaviorUsing the organization’s information systems as a control systemQuestion 20 1 points SaveWhich of the following is an important characteristic of a leader?Goal-orientedSatisfied with the status quoReactiveFocused on past performanceQuestion 21 1 points SaveLeaders who fail to institute proper systems and controls that facilitate ethical conduct share responsibility with those who conceive execute and knowingly benefit from corporate misdeeds.TrueFalseQuestion 22 1 points SaveAll of the following constitute organizational bases of a leader’s power except:Legitimate powerReward powerReferent powerCoercive powerQuestion 23 1 points SaveBehavioral barriers to change occur because of conflicts between departments conflicts arising from power relationships and refusal to share information.TrueFalseQuestion 24 1 points SaveAll of the following are elements of the Goolsby Leadership Model except:IntegrityCharismaCourageImpactQuestion 25 1 points SaveThe “top down” perspective of empowerment:Encourages intelligent risk-takingTrusts people to performEncourages cooperative behaviorDelegates responsibilityQuestion 26 1 points SaveCompetitive benchmarking is a method of seeking the best examples of practices or processes that have essentially the same function regardless of industry.TrueFalseQuestion 27 1 points SaveManufacturing 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:Hierarchical controlKnowledge managementEnabling heroes and dronesEmployee empowermentQuestion 28 1 points SaveA compliance-based approach to ethics management combines a concern for law with an emphasis on managerial responsibility for ethical behavior.TrueFalseQuestion 29 1 points SaveWhich component of emotional intelligence (EI) enables a manager to have a deep understanding of the existence and importance of cultural and ethnic differences?Self-awarenessEmpathySocial skillsSelf-regulationQuestion 30 1 points SaveInternal benchmarking is discouraged in most organizations because it creates competition and internal rivalries that are counterproductive.TrueFalseQuestion 31 1 points SaveInspiring and motivating people with a mission or purpose is a necessary and sufficient condition for developing a learning organization.TrueFalseQuestion 32 1 points SaveAll of the following are guidelines an organization can use to promote the challenging of the status quo except:Establishing a “culture of dissent.”Forcefully creating a sense of urgencyFostering a culture that encourages risk takingCreating a results-based reward systemQuestion 33 1 points SaveThe three broad sets of capabilities that a leader should possess include all of the following except:Technical skillsCognitive abilitiesCalculative abilitiesEmotional intelligenceQuestion 34 1 points SaveContinuous monitoring enhances an organization’s ability to respond with speed and flexibility.TrueFalseQuestion 35 1 points SaveIn emerging economies and continental Europe principal-principal conflicts are frequent. These consist of conflicts between controlling shareholders and executives.TrueFalseQuestion 36 1 points SaveRules and regulations are examples of:Implicit controlsInformational controlsCultural normsBoundaries and constraintsQuestion 37 1 points SaveIn 2001 Cisco Systems Inc.’s stock price fell dramatically when it inaccurately forecast new sales orders because it relied too heavily on historical sales figures. What caused this mistake?Its strategic control system failed to detect changes in consumer demandIt “projected the past into the future.”The momentum of its previous successes blinded it to the need to adapt and changeAll of the above contributed to the mistakeQuestion 38 1 points SaveThe “traditional” approach to strategic control is sequential. Which of the following is not one of the steps in the sequence?Action plans are submitted by lower level managersPerformance is measured against the predetermined goalStrategies are implementedStrategies are formulated and top management sets goalsQuestion 39 1 points SaveTop managers at USA Today meet every Friday to review daily operational reports and year-to-date data. This is an example of:Behavioral controlInformational controlStrategy formulationStrategy implementationQuestion 40 1 points SaveIn “single loop” learning the organization’s assumptions premises goals and strategies are continuously monitored tested and reviewed.TrueFalseQuestion 41 1 points SaveFor businesses facing complex and turbulent business environments:Goals and objectives that are uncertain prevent opportunismTraditional strategic controls are usually inappropriateComplacency about predetermined milestones can prevent adaptabilityDetailed plans are needed to maintain orderQuestion 42 1 points SaveIntel’s exemplary corporate governance practices include all of the following except:A mix of inside and outside directorsAll outside directors to assure objectivity in decision-makingBoard presentations and access to employeesFormal evaluation of officersQuestion 43 1 points SaveThe Sarbanes-Oxley Act of 2002 requires that CEOs and CFOs of publicly-listed companies must reveal off-balance-sheet finances and vouch for the accuracy of information provided.TrueFalseQuestion 44 1 points SaveThe late Sam Walton founder of Wal-Mart used to give pep rallies at local Wal-Mart stores. What purpose did this serve?It was used to remind employees of Wal-Mart’s rules and regulationsIt helped reinforce and sustain Wal-Mart’s cultureIt demonstrated to employees the importance of articulating explicit goals and objectivesIt made Wal-Mart’s reward system very explicitQuestion 45 1 points SaveAn organization’s reward system is typically a weak method of motivating employees.TrueFalseQuestion 46 1 points SaveWhen countercultures emerge that have shared values opposite from the dominant culture of an organization:Organizational cohesiveness increasesInformation is shared rather than hoardedIndividuals begin working at cross purposesIndividuals gain insights into overarching goals and objectivesQuestion 47 1 points SaveRule-based controls are appropriate in organizations where most of the employees are unskilled.TrueFalseQuestion 48 1 points SaveIn principal-principal conflicts (conflicts between controlling shareholders and minority shareholders) the ownership (of equity) is:Widely dispersed (5-20% is considered “concentrated ownership”)Controlled almost completely by managementConcentrated—often greater than 50% of equity is controlled by controlling shareholdersOften held by employee stock ownership programsQuestion 49 1 points SaveRules and regulations rather than culture or rewards would be used for strategic control at which type of company?Software developerStock brokerage firmManufacturer of mass produced productsHigh tech research facilityQuestion 50 1 points SaveManagerial opportunism can take all of the following forms except:ShirkingJob-hoppingOn the job consumptionExcessive product diversificationQuestion 51 1 points SaveFor firms following a differentiation strategy behavioral and intangible incentives are not an effective means of motivating employees.TrueFalseQuestion 52 1 points SaveOperational decision making in a large business places excessive demands on the firm’s top management.TrueFalseQuestion 53 1 points SaveWhich of the following is an advantage of a divisional type of organizational structure?Efficient use of managerial and technical talentAn enhanced ability to respond quickly to changes in the external environmentHigh degree of emphasis on long term performanceUniformity in image and quality across divisionsQuestion 54 1 points SaveAccording to the text there are elements of team building that influence a team’s success. These include all of the following except:Work. Work should be relevant and meaningful to group membersPeople bonding during the “heat of the battle.” Team members become more unified during a crisisTitles. Titles are important to a team’s successTeams taking care of their own. Team members look after each other’s best interestQuestion 55 1 points SaveThe matrix structure attempts to combine the advantages of the functional and divisional structure.TrueFalseQuestion 56 1 points SaveAn advantage of the barrier-free form of organizing is that internal cooperation and shared objectives are not required for it to work.TrueFalseQuestion 57 1 points SaveAll of the following are disadvantages of a divisional type of organizational structure except:It can be very expensive compared to a functional organizational structureThere is a strong tendency for divisions to focus on short-term performanceThere can be dysfunctional competition among divisionsThere is separation of strategic and operating controlQuestion 58 1 points SaveA matrix organizational structure is characterized by:Dual reporting relationshipsA combination of functional and divisional organization structuresEfficient use of resources and expertiseAll of the aboveQuestion 59 1 points SaveAccording to the text boundaryless organizational structures are most effective when they replace rather than complement traditional organizational structures.TrueFalseQuestion 60 1 points SaveFor firms following related diversification strategies reward and evaluation systems should rely primarily on behavioral indicators since the organization needs to reward and reinforce behaviors that facilitate sharing and collaboration.TrueFalseQuestion 61 1 points SaveAn 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?Functional structureMatrix structureStrategic business unit structureHolding company structureQuestion 62 1 points SaveThe purpose of boundaryless forms of organizing is to facilitate the widespread sharing of knowledge and information across internal and external boundaries of the organization.TrueFalseQuestion 63 1 points SaveComplete 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.”Product-market diversification internationalInternational diversification product-marketRelated diversification unrelated diversificationUnrelated diversification related diversificationQuestion 64 1 points SaveStrategic business unit (SBU) and holding company structures result from extensive:DiversificationVertical integrationInternational expansionOrganizational flatteningQuestion 65 1 points SaveAll of the following statements about simple organizational structures are true except:Small firms with a narrow product-market scope will adopt such a structureDecision making authority is highly centralizedThere is little specialization of tasksCreativity and individualism are rareQuestion 66 1 points SaveComplicated working relationships intense power struggles and excessive reliance on group processes are disadvantages of what type of organizational structure?DivisionalMatrixHolding companyFunctionalQuestion 67 1 points SaveIn a simple structure where the owner manager makes most of the important decisions extensive rules and regulations are used to maintain order.TrueFalseQuestion 68 1 points SaveProduct champions are critical during the period after a new venture project has been defined but before it has gained momentum and achieved project impetus.TrueFalseQuestion 69 1 points SaveOnly about 50 percent of corporate venturing efforts reach profitability within six years of their launch.TrueFalseQuestion 70 1 points SaveIn the opening case Polaroid fell victim to the “innovator’s dilemma.” What does this refer to?Excessive borrowing in order to develop more radical innovationsWhether to innovate radically or incrementallyBecoming preoccupied with meeting current market needs and ignoring future innovation needsConflict over how to integrate product and process innovationsQuestion 71 1 points Save__________ produce fundamental changes that can transform a company or even revolutionize an industry; __________ enhance existing practices and often represent evolutionary applications of fundamental breakthroughs.Technological breakthroughs; product-market breakthroughsNew technologies; new paradigmsIncremental innovations; radical innovationsRadical innovations; incremental innovationsQuestion 72 1 points SaveProcess innovations are often associated with a low cost leadership strategy.TrueFalseQuestion 73 1 points SaveTwo common forms of a focused approach to corporate entrepreneurship include:Internal collaboration and internal venturingSocial capital and collaboration capitalBusiness incubators and new venture groupsFocus groups and business incubatorsQuestion 74 1 points SaveProduct champions:Are typically senior executivesAre usually inventors of some sortScavenge for resources and encourage others to back promising new ideasAre strong supporters of the status quoQuestion 75 1 points SaveAfter 15 teams created 128 different phones Chris Galvin former CEO of Motorola recently eliminated the autonomous teams being used to develop new wireless phones. This was necessary because such teams:Often lack coordinationSometimes waste resources on projects with questionable feasibilitySometimes create inefficiencies through duplication of effortAll of the aboveQuestion 76 1 points SaveCorporate venture funding refers to special funds that are set aside to invest in the corporation’s internal ventures.TrueFalseQuestion 77 1 points SaveReal options analysis helps managers make investment decisions involving large irreversible commitments of financial resources.TrueFalseQuestion 78 1 points SaveIncremental innovations:Are usually highly disruptiveUsually represent technological breakthroughsAre usually small improvements in products or processesNearly always can be patentedQuestion 79 1 points SaveWhereas __________ are often associated with a low cost leader strategy __________ are frequently an important aspect of a differentiation strategy.Process innovations; product innovationsProduct innovations; service innovationsRadical innovations; instrumental innovationsMarketing innovations; management innovationsQuestion 80 1 points SaveThe term “skunkworks” is used to refer to a type of in-house facility that corporations use to develop entrepreneurial ideas.TrueFalseQuestion 81 1 points SaveFor innovation team members to work enthusiastically on innovation projects it is important to separate the performance of individual team members from the performance of the innovation itself.TrueFalseQuestion 82 1 points SaveSony Corporation’s mission statement says “We should always be the pioneers with our products—out front leading the market.” This is an example of:InnovativenessProactivenessCompetitive aggressivenessAutonomyQuestion 83 1 points SaveAccording to the text new venture ideas must pass through two critical stages to be implemented by corporations—project definition and project impetus.TrueFalseQuestion 84 1 points SaveReal options logic is useful when corporations consider stock options as a way to finance entrepreneurial ventures.TrueFalseQuestion 85 1 points SaveAll of the following are examples of strategic actions a firm might take except:Acquire competitors to reduce competitionExpand into neglected marketsChange product packagingTie-up raw material sourcesQuestion 86 1 points SaveAdaptive new entry involves offering a radical new product or highly innovative service.TrueFalseQuestion 87 1 points SaveGenerally speaking the opportunity recognition process consists of two phases of activity. They are:Global Search and Recycling ProfitsValue Creation and AffordabilityDiscovery and EvaluationNone of the aboveQuestion 88 1 points SaveVenture capital funding for entrepreneurial ventures is usually available only after the start-up has become a going concern and established a track record.TrueFalseQuestion 89 1 points SaveWhich of the following is not a key element of a blue ocean strategy?Pursue low cost and differentiation advantages simultaneouslyMake the competition irrelevantHighlight incremental improvements to capture market shareCreate new demand in uncharted territoryQuestion 90 1 points SaveBecause new ventures are typically small they usually don’t have high economies of scale relative to competitors.TrueFalseQuestion 91 1 points SaveThe best example of a tactical action that a company might use in response to a competitive attack is:Acquire the competitorTarget the rival’s marketsExpand into new geographical areasOffer price discounts and rebatesQuestion 92 1 points SaveNetflix CEO Reed Hastings made this important observation about dealing with rivals:”In a highly competitive marketplace firms must be paranoid about the multitude of potential rivals.””You can afford to ignore rivals in small markets but you can never ignore rivals in large markets such as on-line video companies like YouTube.””There are tens and maybe hundreds of start-ups who think that they are going to eat Netflix’s lunch. The challenge for a management team is to figure out which are real threats and which aren’t.””Netflix’s position is so strong that I don’t worry about new entrants.”Question 93 1 points Save”Blue ocean” strategies rarely provide sustainable advantages because they are easily imitated.TrueFalseQuestion 94 1 points SaveMarket commonality is the extent to which rivals draw from the same types of resources.TrueFalseQuestion 95 1 points SaveForbearance is a particularly aggressive type of competitive attack.TrueFalseQuestion 96 1 points SaveIn the context of competitive dynamics tactical actions involve major commitments of distinctive and specific resources to strategic initiatives.TrueFalseQuestion 97 1 points SaveIn the opening case ESPN’s cell phone enterprise failed even though it was designed to appeal to sports fanatics and was backed by a $40 million ad campaign. What happened?It misread how easy it would be to leverage its brandCompared to other providers it had no buyer incentives and poor customer serviceIts costs were significantly higher than other cell phone providers because it had to lease network accessAll of the above happenedQuestion 98 1 points SaveWhich of the following questions should a firm ask itself before responding to a competitive attack?How serious is the impact of the attack?What is our competitive intent—do we want to blunt the attack or enhance our competitive position with our response?What resources do we have available for a response?All of the aboveQuestion 99 1 points SaveEquity financing for entrepreneurial start-ups includes which of the following?Investments by family and friendsPersonal savingsPrivate investorsAll of the aboveQuestion 100 1 points SaveWhich of the following types of resources contribute to the success of entrepreneurial firms?Social capitalFinancial resourcesHuman resourcesAll of the above contribute to the success of entrepreneurial firms
