Chapter 3 According to I/O theorists, which of the following contributes least to firm performance?

Your Answer: Barriers to market entry Correct Answer: Internal resources Incorrect. The correct answer is internal resources on page 84.

2.
The external audit is aimed at: Your Answer: developing an infinite list of opportunities that could benefit a firm. Correct Answer: identifying key variables that offer actionable responses. Incorrect. The correct answer is identifying key variables that offer actionable responses.

3.
Which of the following is not a misperception about business intelligence that prevails among American executives today? Your Answer: Running an intelligence program requires lots of people, computers, and other resources. Correct Answer: Business is not equal to espionage. Incorrect. This is a misperception about business intelligence. The correct answer is that business is not equal to espionage.

4.
__________ are the results of a low value of the dollar. Your Answer: Higher imports and lower exports Correct Answer: Lower imports and higher exports Incorrect. The correct answer is lower imports and higher exports.

5.
has replaced as the world's hottest destination for foreign direct investment. Your Answer: (blank)

6.
_______________ and ______________ are creating similar patterns of consumption in diverse cultures worldwide. Your Answer: Mass communication; high technology Correct.

7.
Many businesses use _____________ to obtain most of their information on competitors because it is fast, thorough, and accurate. Your Answer: the Internet Correct.

8.
All of these, except__________, are part of Porter's competitive forces in industry analysis. Your Answer: bargaining power of unions Correct.

9.
In its simplest sense, the international challenge faced by U.S. business is twofold: Your Answer: how to defend domestic markets against imported goods while minimizing exports. Correct Answer: how to maximize exports to other nations and how to defend domestic markets against imported goods. Incorrect. The correct answer is how to maximize exports to other nations and how to defend domestic markets against imported goods.

10.
_______________ are most appropriate when historical data are available and when the relationships among key variables are expected to remain the same in the future.

Your Answer: Quantitative forecasts Correct.

11.
Five major categories of external variables are: (1) economic forces, (2) social and cultural forces, (3) political, governmental and legal forces, (4) technological forces and (5) demographic forces. Your Answer: True Correct Answer: False Incorrect. The five categories are: (1) economic forces, (2) social, cultural, demographic, and environmental forces, (3) political, governmental, and legal forces, (4) technological forces, and (5) competitive forces.

12.
Significant and unequal effects on companies in different industries and in different locations come from trends in the dollar's value. Your Answer: True Correct.

13.
The absence of a legal system deters firms from initiating business with China. Your Answer: False Correct Answer: True Incorrect. The absence of a legal system is one among several serious risks that still deters firms from initiating business with China.

14.
Research findings suggest that approximately 36 percent of a firm's profitability can be explained by the industry, whereas 20 percent is attributed to the firm's internal factors. Your Answer: False Correct.

15.
Nine out of 10 large companies have employees dedicated solely to gathering competitive intelligence. Your Answer: True Correct.

16.
Acquisition is essential to growth in the most competitive companies. Your Answer: True Correct Answer: False Incorrect. Acquisition is essential to growth; the most successful purchases are in niches that add a technology or a related market.

17.
Bargaining power of consumers is usually the most powerful of Porter's five competitive forces. Your Answer: True Correct Answer: False Incorrect. Rivalry among competing firms is usually the most powerful of Porter's five competitive forces.

18.
Many large multinational firms are moving out of EU member-countries into Switzerland and Ireland to avoid costs associated with tax harmonization. Your Answer: False Correct Answer: True Incorrect. Many large multinational firms are moving out of EU member-countries into Switzerland and Ireland to avoid costs associated with tax harmonization.

19.
Poor infrastructure and little respect for legal contracts are two risks that still restrain firms from initiating business with China.

Your Answer: True Correct

Chapter 4
A firm's strengths that cannot be easily matched or imitated by competitors are called: Your Answer: distinctive competencies. Correct.

2.
___________ can inhibit strategic management, for example, by leading managers to miss the significance of changing external conditions. Your Answer: Culture Correct.

3.
The five functions of management are planning, organizing, _________, staffing, and controlling. Your Answer: motivating Correct.

4.
A standardized, detailed set of techniques and behaviors that manage anxieties but seldom produce intended, technical consequences of practical importance is a: Your Answer: ritual. Correct.

5.
__________ ratios measure management's overall effectiveness as shown by the returns generated on sales and investment. Your Answer: Profitability

Correct.

6.
The internal resource categories used in the resource-based approach are physical resources, human resources, and: Your Answer: technological resources. Correct Answer: organizational resources. Incorrect. The correct answer is organizational resources.

7.
Americans place a high priority on __________ whereas many foreigners do not. Your Answer: material wealth Correct.

8.
Staffing involves all of these activities except: Your Answer: customer analysis. Correct.

9.
Which of the following ties all business functions together and provides the basis for all managerial decisions? Your Answer: Management Correct Answer: Information Incorrect. The correct answer is information.

10.
A _____________ receives raw material from both the external and internal evaluation of an organization. Your Answer: quality control mechanism

Correct Answer: management information system Incorrect. The correct answer is management information system.

11.
In China, activities involve concern for guanxi, or personal relations. Your Answer: False Correct Answer: True Incorrect. Activities in China involve concern for guanxi based on respect for personal relations.

12.
The process of performing an internal audit closely parallels the process of performing an external one. Your Answer: True Correct.

13.
The basic premise of the RBV is that the mix, type, amount, and nature of a firm's internal resources should be considered secondarily in devising strategies that can lead to sustainable competitive advantage. Your Answer: True Correct Answer: False Incorrect. The basic premise of the RBV is that the mix, type, amount, and nature of a firm's internal resources should be considered first and foremost in devising strategies that can lead to sustainable competitive advantage.

14.
Synergy is the 2 + 2 = 5 effect. Your Answer: False Correct Answer: True Incorrect. Synergy refers to the 2 + 2 = 5 effect.

15.
Sometimes an organization will pursue a backward integration strategy primarily to gain better control over prices charged to consumers. Your Answer: False Correct.

16.
An opportunity analysis is an appraisal of the costs, benefits and risks associated with decisions. Your Answer: True Correct.

17.
An example of activity ratios is the times-interest-earned ratio. Your Answer: True Correct Answer: False Incorrect. The times-interest-earned ratio is a leverage ratio, not an activity ratio.

18.
Capacity decisions concern the design of the physical production system. Your Answer: True Correct Answer: False Incorrect. Process decisions concern the design of the physical production system.

19.
In the value chain, total revenues minus total costs of all activities undertaken to develop and market a product or service yields value. Your Answer: True Correct.

20.
Internal R&D and contract R&D are the two basic forms of R&D in organizations. Your Answer: True Correct.

Chapter 5
__________ is based on the belief that the true measure of a really good strategist is the ability to solve problems. Your Answer: Managing by hope Correct Answer: Managing by crisis Incorrect. The correct answer is managing by crisis.

2.
Long-term objectives are needed at the ____________ of an organization. Your Answer: corporate, divisional, and functional levels Correct.

3.
__________ bankruptcy applies to municipalities. Your Answer: Chapter 9 Correct.

4.
Many, if not most, organizations pursue a: Your Answer: concentric diversification. Correct Answer: combination strategy. Incorrect. The answer is combination strategy.

5.

An example of _____________ strategy is establishing Web sites to sell products directly to consumers. Your Answer: forward integration Correct.

6.
Which of the following is not a guideline for pursuing liquidation? Your Answer: When the stockholders of the firm can minimize their losses by selling the firm's assets Correct Answer: When the organization has successfully pursued retrenchment Incorrect. Liquidation would be appropriate in this situation. The correct answer is when an organization has successfully pursued retrenchment.

7.
A popular strategy that occurs when two or more companies form a temporary partnership for the purpose of capitalizing on some opportunity is called a(n): Your Answer: acquisition. Correct Answer: joint venture. Incorrect. The correct answer is joint venture.

8.
All of the following situations are conducive to market penetration except _________. Your Answer: when increased economies of scale provide major competitive advantages Correct Answer: when the correlation between dollar sales and dollar marketing expenditures historically has been low Incorrect. This is conducive to market development. The correct answer is when the correlation between dollar sales and dollar marketing expenditures historically has been low.

9.
______________ is selling a division of an organization. Your Answer: Divestiture

Correct.

10.
______________ strategy can be especially effective when price competition among rival sellers is especially vigorous and most buyers use the product in the same ways. Your Answer: Focus Correct Answer: Cost leadership Incorrect. The correct response is cost leadership strategy.

11.
Managing by subjective is also referred to as the mystery approach to decision making. Your Answer: True Correct.

12.
To successfully employ a focus strategy, a firm must ensure that its total costs across its overall value chain are lower than competitors' total costs. Your Answer: False Correct.

13.
The overall aim of the Balanced Scorecard is to balance financial objectives with strategic objectives. Your Answer: True Correct Answer: False Incorrect. The overall aim of the Balanced Scorecard is to balance shareholder objectives with customer and operational objectives.

14.
High-velocity change is becoming more the rule rather than the exception.

Your Answer: True Correct.

15.
Chapter 9 bankruptcy applies to farmers. Your Answer: False Correct.

16.
Joint ventures are being used increasingly because they allow companies to minimize risk. Your Answer: True Correct.

17.
Concentric diversification strategy is effective when an organization has a weak management team. Your Answer: False Correct.

18.
Pioneering new and better technologies is an action based on the strategic posture of leading change. Your Answer: True Correct.

19.
An acquisition occurs when a large organization purchases a smaller firm, whereas a merger occurs when two organizations of about equal size unite to form one enterprise. Your Answer: True

Correct.

20.
Cost advantage refers to the benefits a firm may achieve by entering a new market or developing a new product or service prior to rival firms. Your Answer: False Correct.

Chapter 6
The __________ is based on 2 key dimensions: the IFE total weighted scores on xaxis and the EFE total weighted scores on the y-axis. Your Answer: SPACE Matrix Correct Answer: IE Matrix Incorrect. The correct answer is the IE Matrix.

2.
_________ are defensive tactics directed at reducing internal weakness and avoiding external threats. Your Answer: WT Strategies Correct.

3.
Which stage in the strategy-formulation framework focuses on generating feasible alternative strategies? Your Answer: The decision stage Correct Answer: The matching stage Incorrect. The correct answer is the matching stage.

4.
__________ represent the organization's best long-run opportunities for growth and profitability.

Your Answer: Stars Correct.

5.
Which of these is not a SPACE Matrix quadrant? Your Answer: Competitive Correct Answer: Offensive Incorrect. The correct answer is offensive.

6.
If a Quadrant II firm is lacking a distinctive competence or competitive advantage, then ____________ is often a desirable alternative. Your Answer: horizontal integration Correct.

7.
A division with a high relative market share position in a low-growth industry can be described as a: Your Answer: star. Correct Answer: cash cow. Incorrect. The correct answer is cash cow.

8.
Slow market growth characterizes ___________ and ___________ of the Grand Strategy Matrix. Your Answer: Quadrant III; Quadrant IV Correct.

9.
__________ means it is possible to achieve similar results using different means or paths.

Your Answer: Satisfying Correct Answer: Equifinality Incorrect. The correct answer is equifinality.

10.
Which of the following is not a tactic used by politicians for centuries that can aid strategists? Your Answer: Objectivity Correct.

11.
Sustainability is the idea that a business can meet its financial goals without hurting customers. Your Answer: False Correct

12.
Organizations generally will pursue ST, SO, or WT strategies to get into a situation in which they can apply WO strategies. Your Answer: False Correct.

13.
FA and CA are the 2 dimensions with negative ratings in SPACE Matrix. Your Answer: True Correct Answer: False Incorrect. CA and ES are the 2 dimensions with negative ratings in SPACE Matrix.

14.
The BCG Matrix does not reflect whether or not various divisions or their industries are growing over time.

Your Answer: False Correct Answer: True Incorrect. The BCG Matrix does not reflect whether or not various divisions or their industries are growing over time.

15.
The IE Matrix can be divided into three major regions that have different strategy implications: grow and build, hold and maintain, and harvest or divest. Your Answer: True Correct.

16.
Quadrant IV businesses compete in slow-growth industries and have weak competitive positions. Your Answer: True Correct Answer: False Incorrect. Quadrant IV businesses have a strong competitive position but are in a slow-growth industry.

17.
The Grand Strategy Matrix is based on two evaluative dimensions: market share and market growth. Your Answer: False Correct.

18.
If the directional vector appears in the conservative quadrant of the SPACE Matrix, it implies staying close to the firm's basic competencies and not taking excessive risks. Your Answer: True Correct.

19.

BCG Matrix divisions that have a high relative market share position but compete in a low-growth industry are called cash cows. Your Answer: True Correct.

20.
In the U.S. today, each board director attends at least 90 percent of all meetings. Your Answer: False Correct.

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