Multiple Choice Questions
SET#1 QUESTIONS
1. (p. 326) _____________ is the process and practice by key executives of guiding and shepherding people in an organization toward a vision over time and developing that organization’s future leadership and organizational culture.
A. Organizational structure
B. Organizational strategy
C. Organizational leadership
D. Cultural context
Difficulty: Easy
Learning Objective: 1
2. (p. 328) Which of the following is NOT a way through which leaders galvanize commitment to embrace change?
A. Involve every employee in corporate strategic decision making
B. Shape organizational culture
C. Build the organization
D. Clarify strategic intent
Difficulty: Easy
Learning Objective: 1
3. (p. 328) Leaders help their company embrace change by setting forth their ________ a clear sense of where they want to lead the company and what results they expect to achieve.
A. Strategic quota
B. Mission
C. Vision
D. Strategic intent
Difficulty: Medium
Learning Objective: 1
4. (p. 328) Traditionally, the concept of _________ has been a description or picture of what the company could be that accommodates the needs of all its stakeholders.
A. Mission
B. Vision
C. Strategy
D. Performance
Difficulty: Medium
Learning Objective: 2
5. (p. 328) A _________ is an articulation of a simple criterion or characterization of what the leader sees the company must become to establish and sustain global leadership.
A. Leader’s principle
B. Mission
C. Leader’s vision
D. Strategic intent
Difficulty: Medium
Learning Objective: 2
6. (p. 329) A key element of good organizational leadership is to make clear the ___________ a leader has for the organization and managers in it, as they seek to move toward the vision. This will help keep the firm on track in the present term.
A. Strategic purpose
B. Strategic goals
C. Alternative structures
D. Performance expectations
Difficulty: Medium
Learning Objective: 2
7. (p. 331) Because leaders are attempting to embrace change, they are often _____________ their organization.
A. Abandoning
B. Rebuilding or remaking
C. Divesting businesses in
D. Repositioning
Difficulty: Medium
Learning Objective: 2
8. (p. 331) ____________ is the effort to familiarize future leaders with the skills important to the company and to develop exceptional leaders among the managers you employ.
A. Identifying an action plan
B. Education and leadership development
C. Developing principles
D. Creating passion
Difficulty: Easy
Learning Objective: 3
9. (p. 333) ____________ are your fundamental personal standards that guide your sense of honesty, integrity and ethical behavior.
A. Values
B. Ethics
C. Principles
D. Passions
Difficulty: Medium
Learning Objective: 3
10. (p. 333) A future leader’s personal philosophies and choices ___________ for any key leaders of any organization.
A. Manifest themselves exponentially
B. Are usually diminished over time
C. Always permeate the company
D. Become less pronounced with time
Difficulty: Medium
Learning Objective: 3
11. (p. 333) An effective organization is better built and is strongest when:
A. Its leaders clearly articulate their vision for the firm
B. Its leaders show by example what principles are important
C. Its leaders “manage from afar”
D. Its leaders micromanage the employees of the firm
Difficulty: Easy
Learning Objective: 3
12. (p. 333) _____________ can be seen in principles, honesty and “living by example.” This can become a major force by which a leader will shape and move his or her organization.
A. Prioritization
B. Transparency
C. Strategy
D. Long-term objectives
Difficulty: Easy
Learning Objective: 3
13. (p. 332) __________ is the capacity to see a commitment through to completion long after most people would have stopped trying.
A. Perseverance
B. Passion
C. Principle
D. Integrity
Difficulty: Easy
Learning Objective: 3
14. (p. 334) __________ is a highly motivated sense of commitment to what you do and want to do.
A. Passion
B. Patience
C. Perseverance
D. Principle
Difficulty: Easy
Learning Objective: 3
15. (p. 336) Leaders look to managers to execute strategy, accept risk and cope with the complexity of change. So, _________ becomes a major leadership role.
A. Setting short-term strategy
B. Selection and development of key managers
C. Establishing priority among senior executives
D. Limiting managerial “buy-in”
Difficulty: Easy
Learning Objective: 3
16. (p. 336) ___________ will increase pressure on corporations to push authority downward in their organizations. This means every line manager will have to exercise leadership prerogatives to an extent unthinkable a generation earlier.
A. Globalization
B. Fragmentation of industries
C. Consolidation of industries
D. The accelerated pace and complexity of business
Difficulty: Medium
Learning Objective: 3
17. (p. 338) Researcher David Goleman addressed the question of:
A. What types of competencies are needed among organizational leaders?
B. The optimal age and maturity for successful organizational leaders
C. What types of personality attributes generate the ideal type of competencies needed in organizations?
D. How an organization can groom new executives from within
Difficulty: Medium
Learning Objective: 3
18. (p. 338) _________ exists in terms of the ability to read and understand one’s emotions and assess one’s strengths and weaknesses, underlain by the confidence that stems from positive self-worth.
A. Self-management
B. Self-awareness
C. Social awareness
D. Social skills
Difficulty: Hard
Learning Objective: 3
19. (p. 338) __________ exists in terms of control, integrity, conscientiousness, initiative and achievement orientation.
A. Social awareness
B. Self-awareness
C. Social skills
D. Self-management
Difficulty: Hard
Learning Objective: 3
20. (p. 338) ___________ occurs in relation to sensing others’ emotions, reading the organization and recognizing customers’ needs.
A. Self-awareness
B. Social skills
C. Social awareness
D. Self-management
Difficulty: Medium
Learning Objective: 3
21. (p. 338) One may define _________ as sensing others’ emotions.
A. Sympathy
B. Empathy
C. Relationship
D. Sensitivity
Difficulty: Medium
Learning Objective: 3
22. (p. 338) One can define _________ as being able to “read” the organization.
A. Social integrity
B. Empathy
C. Organizational awareness
D. Social-management
Difficulty: Easy
Learning Objective: 3
23. (p. 338) ___________ comes from recognizing customers’ needs.
A. Service orientation
B. Position power
C. Self-awareness
D. Organizational management
Difficulty: Medium
Learning Objective: 3
24. (p. 338) ____________ occur(s) in relation to influencing and inspiring others; communicating, collaborating and building relationships with others; and managing change and conflict.
A. Competitive management
B. Social skills
C. Self-management
D. Self-awareness
Difficulty: Medium
Learning Objective: 3
25. (p. 338) A key way the characteristics of the desirable manager manifest themselves in a manager’s routine activities is found in the way they:
A. Seek to get favorable decisions from corporate management
B. Collaborate with others
C. Choose individual workers
D. Seek to get the work of their unit done over time
Difficulty: Medium
Learning Objective: 3
26. (p. 338) Organizational sources of power are derived from:
A. The manager’s tenure at the firm
B. The manager’s role in the organization
C. The manager’s style of working individually
D. The manager’s functional tactics
Difficulty: Medium
Learning Objective: 4
27. (p. 338) _________ is formally established based on the manager’s position in the organization.
A. Organization power
B. Reward power
C. Position power
D. Information power
Difficulty: Easy
Learning Objective: 4
28. (p. 338) By virtue of Sam’s vice presidency in the organization, certain decision-making authorities and responsibilities are conferred that he is entitled to use to get things done. This is an example of:
A. Peer influence
B. Expert influence
C. Punitive power
D. Position power
Difficulty: Medium
Learning Objective: 4
29. (p. 338) ___________ is the source of power many new managers expect to be able to rely on, but often the least useful.
A. Referent power
B. Reward power
C. Punitive power
D. Position power
Difficulty: Medium
Learning Objective: 4
30. (p. 338) __________ is available when the manager confers something in return for desired actions and outcomes.
A. Punitive power
B. Referent influence
C. Reward power
D. Information power
Difficulty: Medium
Learning Objective: 4
31. (p. 338) Often a power source, _________ is the type used when Jomar, a business unit manager, gave Elisa, his subordinate, the option to have a flexible work schedule or to work from home in return for her finishing several projects on-deadline.
A. Referent power
B. Reward power
C. Information power
D. Peer influence
Difficulty: Easy
Learning Objective: 4
32. (p. 338) ___________ can be particularly effective and is derived from a manager’s access to and control over the dissemination of information that is important to subordinates yet not easily available in the organization.
A. Information power
B. Organization power
C. Expert influence
D. Referent power
Difficulty: Easy
Learning Objective: 4
33. (p. 338) Jerry was using __________ when he asked his workers to reorganize the department. They did not yet know why they were doing this, but knew that Jerry had a good reason that he had not yet shared.
A. Referent power
B. Punitive power
C. Information power
D. Peer influence
Difficulty: Easy
Learning Objective: 4
34. (p. 338) ___________ is the power exercised via coercion or fear of punishment for mistakes by a manager’s subordinates.
A. Expert influence
B. Information power
C. Position power
D. Punitive power
Difficulty: Easy
Learning Objective: 4
35. (p. 338) The assembly line workers had already received cutbacks in bonus compensation when profits fell last quarter. Rogeco’s managers made it clear that unless productivity and profits were brought back up to the industry benchmarks within two quarters, further cuts would be made to base pay. This demonstrates:
A. Expert influence
B. Referent influence
C. Information power
D. Punitive power
Difficulty: Medium
Learning Objective: 4
36. (p. 338) Leaders today _________ rely on their personal ability to influence others.
A. Decreasingly
B. Try not to
C. Increasingly
D. Should never
Difficulty: Medium
Learning Objective: 4
37. (p. 338) ________, a form of power, comes mainly from three sources: expert, referent and peer influences.
A. External influence
B. Personal influence
C. Punitive influence
D. Organizational influence
Difficulty: Easy
Learning Objective: 4
38. (p. 338) _________ is derived from a leader’s knowledge in a particular area or situation.
A. Expert influence
B. Information power
C. Punitive power
D. Peer influence
Difficulty: Medium
Learning Objective: 4
39. (p. 338) __________ comes from having others want to identify with the leader.
A. Expert influence
B. Peer influence
C. Referent influence
D. Coercive power
Difficulty: Medium
Learning Objective: 4
40. (p. 338) Asif was one of the most charismatic managers at Titan Systems. He had a great personality and was always very empathetic to employee needs. Asif can be characterized as having strong:
A. Referent influence
B. Peer influence
C. Expert influence
D. Information power
Difficulty: Medium
Learning Objective: 4
41. (p. 339) ___________ can be a very effective way for leaders to influence the behaviors of others. This is used when leaders use the assignment of team members and the charge to the team to influence the outcomes produced.
A. Punitive power
B. Peer influence
C. Information power
D. Referent influence
Difficulty: Easy
Learning Objective: 4
42. (p. 339) Effective leaders:
A. Choose just one key source of power and influence
B. Tend to limit these types of influence and use more legitimate means
C. Usually do not have reason to use more than one of these types of power at a time
D. Make use of all seven sources of power, often in combination
Difficulty: Medium
Learning Objective: 4
43. (p. 339) Bartlett and Ghoshal studied several of the most successful global companies in the last decade. Their research suggests that combining flexible responsiveness with integration and innovation:
A. Requires consistency in the management role in a twenty-first century company
B. Is based on an institution, not a process in a twenty-first century company
C. Determines the value of the management role in a twenty-first century company
D. Requires rethinking the management role and the distribution of management roles within a twenty-first century company
Difficulty: Medium
Learning Objective: 5
44. (p. 339) The ___________ according to Bartlett and Ghoshal involves decisions about opportunities to pursue and resource deployment.
A. Entrepreneurial process
B. Integration process
C. Innovation process
D. Renewal process
Difficulty: Medium
Learning Objective: 5
45. (p. 339) The ___________ according to Bartlett and Ghoshal involves building and deploying organizational capabilities.
A. Integration process
B. Innovation process
C. Entrepreneurial process
D. Renewal process
Difficulty: Medium
Learning Objective: 5
46. (p. 339) The ___________ according to Bartlett and Ghoshal involves shaping organizational purpose and enabling change.
A. Entrepreneurial process
B. Renewal process
C. Integration process
D. Innovation process
Difficulty: Medium
Learning Objective: 5
47. (p. 339) The research of Bartlett and Ghoshal suggests that the critical management functions:
A. Must be present in the organization, but not necessarily in all three levels of management
B. Is strictly the domain of top management?
C. Should be confined, typically, to the top two management levels
D. Need to be shared and distributed across three management levels
Difficulty: Medium
Learning Objective: 5
48. (p. 339) Developing operating managers and supporting their activities occurs in middle management as part of the:
A. Integration process
B. Renewal process
C. Innovation process
D. Entrepreneurial process
Difficulty: Hard
Learning Objective: 5
49. (p. 339) In front-line management, creating and pursuing opportunities and managing contiguous performance improvement is an example of the:
A. Integration process
B. Entrepreneurial process
C. Renewal process
D. Innovation process
Difficulty: Hard
Learning Objective: 5
50. (p. 339) Providing institutional leadership through shaping and embedding corporate purpose and challenging embedded assumptions at the top management level is reflective of the:
A. Innovation process
B. Integration process
C. Renewal process
D. Entrepreneurial process
Difficulty: Medium
Learning Objective: 5
51. (p. 339) Linking skills, knowledge and resources across units in the middle-management level demonstrates the:
A. Renewal process
B. Integration process
C. Entrepreneurial process
D. Innovation process
Difficulty: Medium
Learning Objective: 5
52. (p. 339) Attracting resources and capabilities and developing the business at the front-line management level exemplifies the:
A. Renewal process
B. Integration process
C. Innovation process
D. Entrepreneurial process
Difficulty: Medium
Learning Objective: 5
53. (p. 340) ________ is the set of important assumptions that members of an organization share in common.
A. Organizational culture
B. Organizational leadership
C. Organizational strategy
D. Organizational change
Difficulty: Easy
Learning Objective: 5
54. (p. 340) The important assumptions shared by members of an organization are often:
A. Very similar to all other organizations in that industry
B. Very obvious to outsiders
C. Unstated
D. Formalized
Difficulty: Medium
Learning Objective: 5
55. (p. 340) When a member internalizes the beliefs and values of the firm, the corresponding behavior is:
A. A shared assumption
B. Extrinsically rewarding
C. Enforced using referent power
D. Intrinsically rewarding
Difficulty: Medium
Learning Objective: 5
56. (p. 340) Assumptions become shared assumptions through __________ among an organization’s individual members.
A. Internalization
B. Externalization
C. Reiteration
D. Reflection
Difficulty: Medium
Learning Objective: 5
57. (p. 340) Joe Germane, CEO of Brady Healthcare, has made sure to visit each of the international business units biannually since he was brought on in the firm. This demonstrates Joe’s:
A. Building time in the organization
B. Emphasizing key themes
C. Adapting common themes in a unique way
D. Institutionalizing practices that reinforce desired beliefs
Difficulty: Easy
Learning Objective: 6
58. (p. 341) An organization is much like a(n) __________, in which new members must be initiated and earn trust and credibility among fellow members.
A. Institution
B. Tribe
C. Army
D. Elite club
Difficulty: Medium
Learning Objective: 6
59. (p. 342) ________ are a person’s basis for differentiating right from wrong.
A. Principles
B. Ethical standards
C. Morals
D. Laws
Difficulty: Hard
Learning Objective: 6
60. (p. 344) Power Fund is a long-standing brokerage firm with a great history of high returns and well-managed growth. The managers at Power Fund repeatedly refer to terms like “quality,” “growth,” and “reliability” in the firm’s advertisements. This demonstrates managers’:
A. Dissemination of stories and legends about core values
B. Emphasis on key themes or dominant values
C. Building time into the organization
D. Managing the firm globally
Difficulty: Medium
Learning Objective: 6
61. (p. 344) Foto Show, an online full-service photo processing site, institutionalizes its storytelling among old and new employees alike–they even give awards to reinforce the given theme. This demonstrates:
A. Emphasizing dominant values
B. Encouraging dissemination of legends about core values
C. Building time in the organization
D. Managing organizational culture in a global organization
Difficulty: Medium
Learning Objective: 6
62. (p. 345) _________ create differences across national boundaries that influence how people interact, read personal cues and otherwise interrelate socially.
A. Values
B. Religions
C. Social norms
D. Educations
Difficulty: Medium
Learning Objective: 6
63. (p. 345) __________ about similar circumstances varies from country to country. In North America, individualism is central, but in Japan, the needs of the group dominate.
A. Values and attitudes
B. Religions
C. Educations
D. Social norms
Difficulty: Medium
Learning Objective: 6
64. (p. 345) __________, manifest in holidays, practices and belief structures, differ in fundamental ways that must be taken into account as one attempts to shape organizational culture in a global setting.
A. Values and attitudes
B. Social norms
C. Religion
D. Education
Difficulty: Easy
Learning Objective: 6
65. (p. 346) __________ differs across national borders in the various ways people are accustomed to learning.
A. Social norms
B. Social awareness
C. Education
D. Religion
Difficulty: Easy
Learning Objective: 6
66. (p. 346) When there is a high potential compatibility of changes with the existing culture and many changes in key organizational factors that are necessary to implement the new strategy:
A. Managers should manage around the culture
B. Managers should reformulate strategy or prepare carefully for long-term, difficult cultural change
C. Managers should link changes to the basic mission and fundamental organizational norms
D. Managers should focus on reinforcing the culture and achieving synergies
Difficulty: Hard
Learning Objective: 7
67. (p. 346) When there is a low potential compatibility of changes with the existing culture and many changes in key organizational factors that are necessary to implement the new strategy:
A. Managers should link changes to the basic mission and fundamental organizational norms
B. Managers should reformulate strategy or prepare carefully for long-term, difficult cultural change
C. Managers should focus on reinforcing the culture and achieving synergies
D. Managers should manage around the culture
Difficulty: Hard
Learning Objective: 7
68. (p. 346) When there is a high potential compatibility of changes with the existing culture and few changes in key organizational factors that are necessary to implement the new strategy:
A. Managers should focus on reinforcing the culture and achieving synergies
B. Managers should link changes to the basic mission and fundamental organizational norms
C. Managers should manage around the culture
D. Managers should reformulate strategy or prepare carefully for long-term, difficult cultural change
Difficulty: Hard
Learning Objective: 7
69. (p. 346) When there is a low potential compatibility of changes with the existing culture and few changes in key organizational factors that are necessary to implement the new strategy:
A. Managers should link changes to the basic mission and fundamental organizational norms
B. Managers should focus on reinforcing the culture and achieving synergies
C. Managers should manage around the culture
D. Managers should reformulate strategy or prepare carefully for long-term, difficult cultural change
Difficulty: Hard
Learning Objective: 7
70. (p. 347) Using a time of relative stability to remove organizational roadblocks to the desired culture is one broad theme in attempting to:
A. Manage around culture
B. Maximize synergy
C. Link to mission
D. Reformulate the strategy or culture
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SET#2
Chapter 06
Internal Analysis
Multiple Choice Questions
1. (p. 138) The tendency to accept the status quo and disregard signals that change is needed is called:
A. Management myopia
B. Environmental awareness
C. Management long-sightedness
D. Subjective management
Difficulty: Medium
Learning Objective: 1
2. (p. 140) SWOT analysis’s value and continued use is found in its:
A. Complexity
B. Difficulty
C. Simplicity
D. Short-sighted nature
Difficulty: Medium
Learning Objective: 1
3. (p. 140) What have strategists sought in frameworks besides SWOT for conducting internal analysis?
A. They have sought to get less detail from other frameworks
B. They have sought that the frameworks be more comprehensive
C. They have sought a less generic framework
D. They have sought to better account for internal factors in light of external factors
Difficulty: Difficult
Learning Objective: 1
4. (p. 140) _______ views a firm as a sequential process of value-creating activities.
A. Resource-based analysis
B. Value chain analysis
C. SWOT analysis
D. Primary internal analysis
Difficulty: Easy
Learning Objective: 2
5. (p. 140) Common to all the approaches to internal analysis is:
A. The use of meaningful standards for comparison in internal analysis
B. The use of external factors of analysis
C. The process point of view
D. Management market myopia
Difficulty: Difficult
Learning Objective: 2
6. (p. 140) ________ is a historically popular technique through which managers create a quick overview of a company’s strategic situation—it is based on achieving a sound fit between internal resources and the external situation.
A. Internal analysis
B. External analysis
C. Value chain analysis
D. SWOT analysis
Difficulty: Medium
Learning Objective: 1
7. (p. 140) A(n) ________ is a major favorable situation in a firm’s environment.
A. Value chain
B. Strength
C. Opportunity
D. Capability
Difficulty: Easy
Learning Objective: 1
8. (p. 140) A(n) ______ is a major unfavorable situation in a firm’s environment.
A. Weakness
B. Core strength
C. Competitive disadvantage
D. Threat
Difficulty: Easy
Learning Objective: 1
9. (p. 140) Which of the following is NOT an example of an opportunity for the firm?
A. Identification of a previously overlooked market segment
B. Improved buyer or supplier relationships
C. Positive changes in regulatory circumstances
D. Strong reputation and image with a key demographic
Difficulty: Medium
Learning Objective: 1
10. (p. 141) A(n) ______ is a resource or capability controlled by or available to a firm that gives it an advantage relative to its competitors in meeting the needs of the customers it serves.
A. Competence
B. Strength
C. Opportunity
D. Competitive advantage
Difficulty: Easy
Learning Objective: 1
11. (p. 141) A(n) _______ is a limitation or deficiency in one or more of a firm’s resources or capabilities relative to its competitors that creates a disadvantage in effectively meeting customer needs.
A. Weakness
B. Threat
C. Competitive limit
D. Marginal resource
Difficulty: Easy
Learning Objective: 1
12. (p. 141) Consider e-Pixels, a company that produces miniature digital video cameras that feature easy downloads and uplinks to computers. Which of the following represents a potential strength for the firm?
A. Brand name
B. Digitalization of most types of media
C. Growing global computer companies with similar technology
D. Limited experience with video technology
Difficulty: Medium
Learning Objective: 1
13. (p. 142) According to a SWOT analysis diagram, what strategy does Cell 1 support?
A. Aggressive
B. Turnaround
C. Defensive
D. Diversification
Difficulty: Difficult
Learning Objective: 1
14. (p. 142) The cells on the left side of the SWOT diagram are both characterized by:
A. Substantial internal strengths
B. Numerous environmental opportunities
C. Critical internal weaknesses
D. Major environmental threats
Difficulty: Difficult
Learning Objective: 1
15. (p. 142) Which cell in the SWOT analysis diagram is the most favorable situation?
A. Cell 1
B. Cell 2
C. Cell 3
D. Cell 4
Difficulty: Medium
Learning Objective: 1
16. (p. 142) ________ represents the least favorable situation, with the firm facing major environmental threats from a weak resource position.
A. Cell 1
B. Cell 2
C. Cell 3
D. Cell 4
Difficulty: Medium
Learning Objective: 1
17. (p. 142) Which cell supports a turnaround-oriented strategy?
A. Cell 2
B. Cell 3
C. Cell 4
D. Cell 1
Difficulty: Difficult
Learning Objective: 1
18. (p. 142) Which of the following describes the situation for a firm in Cell 2?
A. The firm faces several environmental opportunities and has numerous strengths that encourage pursuit of those opportunities
B. The firm faces major environmental threats from a weak resource position
C. The firm has identified several key strengths, but faces an unfavorable environment
D. The firm faces impressive market opportunity, but is constrained by weak internal resources
Difficulty: Difficult
Learning Objective: 1
19. (p. 144) What makes SWOT analysis susceptible to key limitations?
A. Its narrow focus on external factors
B. Its broad conceptual approach
C. Its vastly limited applicability
D. Its portrayal of the essence of sound strategy formulation
Difficulty: Easy
Learning Objective: 1
20. (p. 144) Which of the following statements is false?
A. A SWOT analysis can overemphasize external threats and downplay internal strengths
B. A SWOT analysis can be static and can risk ignoring changing circumstances
C. A strength, as identified by SWOT analysis is not necessarily a source of competitive advantage
D. A SWOT analysis can overemphasize a single strength or element of strategy
Difficulty: Medium
Learning Objective: 1
21. (p. 145) Which of the following statements is true?
A. A strength is not always a source of competitive advantage
B. Strengths are synonymous with competitive advantage
C. Every company resource or capability is a strength and leads to competitive advantage
D. Strengths are always inimitable
Difficulty: Easy
Learning Objective: 1
22. (p. 145) A perspective in which business is seen as a chain of activities that transforms inputs into outputs that customers value is called:
A. Value chain
B. Value chain analysis
C. Resource-base
D. Process division
Difficulty: Medium
Learning Objective: 2
23. (p. 145) Which of the following is NOT an example of a basic source from which customer value is derived?
A. Activities that differentiate the product
B. Activities that lower its cost
C. Activities that add to product complexity
D. Activities that meet the customer’s need more quickly
Difficulty: Easy
Learning Objective: 2
24. (p. 145) Value chain analysis takes a:
A. Process point of view
B. Functional point of view
C. Horizontal point of view
D. Corporate point of view
Difficulty: Medium
Learning Objective: 2
25. (p. 145) Which method of internal analysis disaggregates the business into sets of activities that occur within the business, starting with inputs and finishing with the firm’s products and after-service sales?
A. Resource-based view
B. Value chain analysis
C. SWOT analysis
D. Porter’s generic strategies
Difficulty: Easy
Learning Objective: 2
26. (p. 146) Which of the following is an example of a primary activity in the typical firm?
A. Human resources management
B. Research, technology and systems development
C. General administration
D. Logistics
Difficulty: Medium
Learning Objective: 2
27. (p. 146) Which of the following is an example of support activities in the typical firm?
A. Operations
B. Procurement
C. Marketing and sales
D. Service
Difficulty: Medium
Learning Objective: 2
28. (p. 146) Those activities in a firm that are involved in the physical creation of the product, marketing and transfer to the buyer and after-sales support are called:
A. Operational activities
B. Support activities
C. Secondary activities
D. Primary activities
Difficulty: Easy
Learning Objective: 2
29. (p. 148) The initial step in value chain analysis is to:
A. Allocate costs to different activities within the value chain
B. Identify the firm’s strengths and weaknesses
C. Divide a company’s operations into specific activities or processes
D. Identify the firm’s key resources and capabilities
Difficulty: Easy
Learning Objective: 2
30. (p. 148) In VCA, which method of cost accounting is preferred?
A. Activity-based cost accounting
B. Value-based cost accounting
C. Traditional cost accounting
D. Financial cost accounting
Difficulty: Medium
Learning Objective: 2
31. (p. 149) Which of the following is usually true about a firm’s value chain?
A. Scrutinizing a firm’s value chain may bring attention to several sources of differentiation advantage relative to competitors
B. Scrutinizing a firm’s value chain does not usually reveal cost advantages or disadvantages
C. Scrutinizing the firm’s value chain can minimize the activities that are critical to buyer satisfaction
D. Analysis of the firm’s value chain can lead a firm to limit its market success
Difficulty: Medium
Learning Objective: 2
32. (p. 151) Which of the following considerations is critical at the examination stage of the value chain analysis?
A. All primary activities differentiate the firm
B. The managers’ choice of activities to be examined influences the mission statement of the firm
C. The nature of value chains and the relative importance of the activities within them are standard across industries
D. The relative importance of value activities can vary by a company’s position in a broader value system that includes the value chains of its upstream suppliers and downstream customers or partners
Difficulty: Medium
Learning Objective: 2
33. (p. 151) It is especially important that managers take into account their level of ________ when comparing their cost structure for activities on their value chain with those of key competitors.
A. Competition
B. Horizontal integration
C. Vertical integration
D. Concentric diversification
Difficulty: Difficult
Learning Objective: 2
34. (p. 153) The _______ is a new perspective on understanding a firm’s success based on how well the firm uses its internal resources.
A. Resource-based view
B. Value chain view
C. Corporate view
D. Functional view
Difficulty: Easy
Learning Objective: 3
35. (p. 153) What is the underlying premise of the resource-based view?
A. Firms generally have very similar capabilities stemming from almost identical resources
B. Imitation of resources is the best way to achieve competitive advantages
C. Firms differ in fundamental ways because each firm possesses a unique bundle of resources
D. Firms’ intangible resources can be very difficult to imitate
Difficulty: Difficult
Learning Objective: 3
36. (p. 154) Which of the following is NOT a basic resource for any firm?
A. Tangible assets
B. Core outputs
C. Intangible assets
D. Organizational capabilities
Difficulty: Medium
Learning Objective: 3
37. (p. 154) The most easily identified assets, often found on a firm’s balance sheet, are called:
A. Intangible assets
B. Tangible assets
C. Capabilities
D. Competencies
Difficulty: Easy
Learning Objective: 3
38. (p. 154) Which of the following is NOT an example of an intangible asset?
A. Financial resources
B. Brand names
C. Company reputation
D. Organizational morale
Difficulty: Medium
Learning Objective: 3
39. (p. 156) Which of the following is NOT one of the RBV guidelines?
A. Resources are more valuable when they are critical to being able to meet a customer’s need better than other alternatives
B. Resources are more valuable when they are non-durable
C. Resources are most valuable when they are scarce
D. Resources are most valuable when they drive a key portion of overall profits
Difficulty: Medium
Learning Objective: 3
40. (p. 156) Consider Company A, a financial services company specializing in small business issues, whose location is in a shopping mall in the suburbs and Company B, a similar business, whose location is downtown between a successful law firm and a courthouse. Company A’s comparative success can be best attributed to which RBV guideline?
A. Resource are more valuable when they are scarce
B. Resources are more valuable when they are durable
C. Resources are more valuable when they are scarce
D. Resources are more valuable when they are critical to being able to meet a customer’s need better than other alternatives
Difficulty: Difficult
Learning Objective: 3
41. (p. 156) The availability of substitutes affects which of the RBV guidelines?
A. Resources are more valuable when they are scarce
B. Resources are more valuable when they are durable
C. Resource are more valuable when they are scarce
D. Resources are more valuable when they are critical to being able to meet a customer’s need better than other alternatives
Difficulty: Difficult
Learning Objective: 3
42. (p. 157) _______ help the firm create resource scarcity by making resources hard to imitate.
A. Resource bundles
B. Capabilities
C. Isolating mechanisms
D. Tangible resources
Difficulty: Medium
Learning Objective: 3
43. (p. 157) Which of the following is NOT an example of an isolating mechanism?
A. Physically unique resources
B. Capital ambiguity
C. Path-dependent resources
D. Economic deterrence
Difficulty: Medium
Learning Objective: 3
44. (p. 157) ________ are very difficult to imitate because of the difficult, sometimes complicated path another firm must follow to create the resource.
A. Path-dependent resources
B. Physically unique resources
C. Economic resources
D. Ambiguous resources
Difficulty: Easy
Learning Objective: 3
45. (p. 158) Which of the following involves large capital investments in capacity to provide products or services in a given market that are scale sensitive?
A. Path-dependence
B. Casual ambiguity
C. Physical uniqueness
D. Economic deterrence
Difficulty: Easy
Learning Objective: 3
46. (p. 157) Brand loyalty, employee satisfaction and a reputation for fairness are items that:
A. Are easy to imitate
B. Can be imitated, but may not be
C. Cannot be imitated
D. Are difficult to imitate
Difficulty: Medium
Learning Objective: 3
47. (p. 159) Which of the following statements is true?
A. The faster a resource depreciates, the more valuable it is
B. The slower a resource depreciates, the more valuable it is
C. The larger a resource or asset, the more slowly it depreciates
D. Intangible assets can have their depletion measures easily
Difficulty: Medium
Learning Objective: 3
48. (p. 159) In the increasingly hypercompetitive global economy today, distinctive competencies and competitive advantages:
A. Are commonplace
B. Are a prerequisite to being in business for the short-term
C. Are particularly durable
D. Can fade quickly
Difficulty: Difficult
Learning Objective: 3
49. (p. 159) Which of the following illustrates what it means to utilize a functional perspective?
A. Looking at different functional areas of the firm, disaggregating tangible and intangible assets as well as organizational capabilities that are present, can begin to uncover important value-building resources that deserve further analysis
B. Dividing categories by function into more specific competencies can allow a more measurable assessment
C. Taking a creative look at what competencies the firm possesses (or has the potential to possess) can help identify sources of competitive advantage
D. The value chain approach can uncover organizational capabilities, activities and processes that are potential sources of competitive advantage
Difficulty: Difficult
Learning Objective: 4
50. (p. 159) Which of the following combinations provides the best sources of competitive advantage?
A. Resources/capabilities that are scarce, durable and sustainable
B. Resources/capabilities that are central to meeting a customer need better than other alternatives and are inimitable
C. Resources/capabilities that are durable, scarce and appropriable to the firm
D. Resources/capabilities that are directly appropriable to the firm, inimitable, durable and meet customer needs better than other alternatives
Difficulty: Medium
Learning Objective: 3
51. (p. 162) When a strategist uses the firm’s historical experience as a basis for evaluating internal factors, he or she is performing a:
A. Comparison with key competitors
B. Comparison with success factors in the industry
C. Comparison with past performance
D. Comparison with industry benchmarks
Difficulty: Easy
Learning Objective: 4
52. (p. 162) A manager’s assessment of whether a certain internal factor–like financial capacity–is a strength or weakness will be most strongly influenced by:
A. The relative strength of other factors
B. The factor’s flexibility within the organization
C. The manager’s experience in connection with that factor
D. The manger’s perception of that factor in other firms
Difficulty: Medium
Learning Objective: 4
53. (p. 162) Using historical experience as a basis for identifying strengths and weaknesses can be likened to:
A. Market myopia
B. Tunnel vision
C. Management myopia
D. Benchmarking
Difficulty: Medium
Learning Objective: 4
54. (p. 162) The differences in internal resources among companies in the same industry:
A. Can become relative strengths or weaknesses depending on the strategy a firm chooses
B. Almost always result in competitive advantages based on relative strengths or weaknesses
C. Arise from benchmarking
D. Are easily observed and relative strengths are easily imitated
Difficulty: Medium
Learning Objective: 4
55. (p. 162) _______ is a method of comparing the way a company performs a specific activity with a competitor, potential competitor or company doing the same thing.
A. Benchmarking
B. Imitating
C. Value chain analysis
D. Vertical integration
Difficulty: Easy
Learning Objective: 4
56. (p. 162) Company X’s principal strength is its inbound and outbound logistics system; its relative weakness, however is after-sales service. Its competitor, Company Y, however is often plagued with lagging shipments and an inflexible distribution setup. Company Y remains successful because it maintains a fully staffed service department and as a result the company is known for its dependable service. _______ allows them to identify ways to build on relative strengths and avoid dependence on capabilities at which the other firm excels.
A. Industry comparison
B. Benchmarking
C. Past performance comparison
D. Disaggregating
Difficulty: Medium
Learning Objective: 4
57. (p. 163) _______ involve(s) identifying the factors associate with successful participation in a given industry.
A. The resource-based view
B. Value chain analysis
C. Industry analysis
D. Porter’s generic strategies
Difficulty: Easy
Learning Objective: 4
58. (p. 163) Which of the following is a useful framework against which to examine a firm’s potential strengths and weaknesses in a given industry?
A. Isolating mechanisms
B. The value chain
C. Organizational capabilities
D. Porter’s five forces
Difficulty: Medium
Learning Objective: 4
59. (p. 163) A company producing toilet paper, tissues and other consumer paper goods can work to establish the right product lines, with reasonable sales volumes, profit margins and growth potential in order to generate:
A. Supplier power to face massive buyer power in retail customers
B. Buyer power for the end-consumers
C. Supplier power for the retail chains
D. Regional advantages over buyers
Difficulty: Hard
Learning Objective: 4
60. (p. 165) ________ is one way to identify success factors against which executives can evaluate their firm’s competencies relative to its key product or products.
A. Corporate strategy
B. Product life cycle
C. Diversification
D. Agglomeration
