BUS 401 reading quiz questions

which of the following statements related to a firm’s stakeholders is not true?

a. the withdrawal of any stakeholder’s cooperation can undermine a firm’s performance and long-term survival

b. stakeholders are individuals or groups that can affect or be affected by a firm’s actions

c. effective stakeholder management can strengthen trust, adaptability, and reputation, thereby enhancing competitive advantage

d. a stakeholder strategy focuses exclusively on maximizing shareholder returns while minimizing the claims of other groups

a stakeholder strategy focuses exclusively on maximizing shareholder returns while minimizing the claims of other groups

which of the following does a firm possess when it can outperform other firms in the same industry or the industry average over a prolonged period of time?

a. long-term capital gain

b. strategic positioning

c. consistent power position

d. sustainable competitive advantage

sustainable competitive advantage

in which of the following cases was a company at a major competitive disadvantage?

a. without a clear strategic position, sears tried to be too many things for too many types of customers

b. facebook hired sheryl sandberg because mark zuckerberg, facebook’s founder, lacked important business skills

c. strategy executives at UPS used scenario planning to identify issues critical to shaping the firm’s future

d. sam’s club decided to prescreen its customers via required membership to establish creditworthiness

without a clear strategic position, sears tried to be too many things for too many types of customers

which of the following statements about competitive advantage is false?

a. a firm’s competitive advantage is always absolute, not relative

b. a firm can gain a competitive advantage by providing goods similar to its competitors’ goods at a lower price

c. an effective differentiation strategy is key for establishing a competitive advantage

d. a firm will have a sustainable competitive advantage when it outperforms its competitors over a prolonged period of time

a firm’s competitive advantage is always absolute, not relative

T or F: the following statement by the chief executive of megafilms movie studio should not be used as a strategy → “we will produce the greatest films of the 21st century”

true

T or F: once a strategy has been formulated and implemented, it is important that the firm sticks to it no matter what happens

false

which of the following statements is true of strategy?

a. actions that allow a firm to address a competitive challenge are strategy

b. operational effectiveness and competitive benchmarking are strategy

c. tactical tools that are a part of a firm’s functional and global initiatives are strategy

d. statements of desires, on their own, are strategy

actions that allow a firm to address a competitive challenge are strategy

brightlens, a new eyewear company, notices that most rivals in the industry are investing heavily in celebrity endorsements to attract customers. to keep pace, brightlens also hires a celebrity spokesperson. which of the following will be a likely implication of this decision?

a. brightlens will be able to differentiate its products and create higher value for customers

b. brightlens will face low profit potential

c. brightlens will be well positioned to gain a lasting competitive advantage

d. brightlens will operate in a market with little or no direct competition

brightlens will face low profit potential

strategic positioning requires which of the following?

a. using trade-offs

b. trying to be everything to everybody

c. focusing on one activity instead of combining them

d. adopting a zero-sum strategy

using trade-offs

a firm is likely to have a competitive advantage when it

a. provides goods similar to those of its competitors, but at a higher price

b. provides services that consumers will value more than those of its rivals

c. minimizes the difference between value creation and the costs involved

d. performs at a level similar to the other firms in the industry

provides services that consumers will value more than those of its rivals

all of the following below are examples of external stakeholders except

a. government

b. employees

c. communities

d. customers

employees

a good strategy should be able to provide products and services to customers at an attractive price point while maintaining internal costs, resulting in

a. competitive benchmarking

b. shareholder appreciation

c. sustainable competitive advantage

d. value creation

value creation

an organization’s ____ describes what the organization actually does - the products and services it plans to provide, and the markets in which it will compete

a. mission

b. code of conduct

c. vision

d. promissory note

mission

which of the following statements accurately brings out the difference between an organization’s vision and mission?

a. mission is the organization’s aspirations for the future and vision is about how these aspirations can be made true over time

b. vision is short-term: oriented and related to the organization’s present, whereas the mission is futuristic

c. vision defines what the organization wants to accomplish ultimately, whereas the mission defines the means by which vision is accomplished

d. vision is valid at the functional level of the organization, whereas mission covers the entire organization

vision defines what the organization wants to accomplish ultimately, whereas the mission defines the means by which vision is accomplished

T or F: customer-oriented vision statements are better suited than product-oriented vision statements for helping companies to adapt to changing environments

true

T or F: strategy formulation concerns where and how to compete, whereas strategy implementation concerns organizing, coordinating, and integrating how work gets done

true

organizational core values are the answer to which of the following questions?

a. what commitments do we make to act both legally and ethically?

b. which of the value chain activities are primary?

c. what is the value added to a good or service at each step in the production?

d. what is the company’s customer lifetime value?

what commitments do we make to act both legally and ethically?

a company’s vision primarily states

a. what the company wants to ultimately accomplish

b. how the company plans to accomplish its goals

c. how the company plans to compete in its industry

d. what the company actually does to generate revenues

what the company wants to ultimately accomplish

which of the following questions would a firm’s business strategy ideally answer?

a. why should we compete?

b. how should we implement the functional strategy?

c. where should we compete?

d. how should we compete?

how should we compete?

which of the following actions of an automobile firm will be considered as a strategic commitment?

a. the firm spending $100,000 on renting a manufacturing facility to meet the temporary demand for its cars

b. the firm investing eight years and $4 billion to develop a range of hybrid cars with which it will compete in the future

c. the firm promoting its new model of coupe through a free european trip worth $15,000 to be won as an early-bird offer

d. the firm launching an existing model of a car in red as a limited edition for six months

the firm investing eight years and $4 billion to develop a range of hybrid cars with which it will compete in the future

_____ is best described as executives’ use of power and influence to direct the activities of others when pursuing an organizationals goals

a. machiavellianism

b. venture capitalism

c. strategic leadership

d. intrapreneurship

strategic leadership

which of the following is not true concerning a customer-oriented mission?

a. it has more flexibility than a product-oriented mission

b. organizations that have customer-oriented missions are more likely to be successful

c. it defines the means of how a customer need will be met

d. it has a higher likelihood of remaining relevant in the long-term

it defines the means of how a customer need will be met

which of the following statements is true of customer-oriented visions?

a. they state an organization’s goals in terms of a good or service provided to customers

b. they tend to force managers to take a myopic view of the business environment

c. they define a business in terms of providing solutions to people’s needs

d. they are inflexible with regard to adapting to changing environments

they define a business in terms of providing solutions to people’s needs

choose three items below that define or state the importance of the winning aspiration choice

• defines the purpose of the enterprise, it’s guiding mission and aspiration, in strategic terms

• sets the context for all the strategic choices that follow

• answers the question of what resources/capabilities we must have to win

• answers the question of where to play?

• winning is what matters - the significant proportion of value accrues to the winner

• defines the purpose of the enterprise, it’s guiding mission and aspiration, in strategic terms

• sets the context for all the strategic choices that follow

• winning is what matters - the significant proportion of value accrues to the winner

T or F: when setting a winning aspiration, you must look at all competitors but should focus on the best competitor in your space

true

which of the following is a form of intellectual property?

a. patents

b. organizational structure

c. equipment

d. organizational knowledge

patents

T or F: support activities, according to the value chain, are the actions a firm takes to directly provide a product or service to the end user

false

which of the following is a key criterion in the VRIO framework?

a. original

b. imitable

c. rare

d. verifiable

rare

using the _____, strategic leaders can see how competitive advantage flows from a firm’s distinct set of activities

a. VRIO framework

b. SWOT analysis

c. resource-based view

d. value chain analysis

value chain analysis

according to the resource-based view, a firm’s competitive advantage is more likely to stem from its _____ as opposed to its _____

a. tangible resources; intangible resources

b. intangible resources; tangible resources

c. long-term assets; current assets

d. current assets; long-term assets

intangible resources; tangible resources

in the context of the SWOT matrix, which of the following best exemplifies an external opportunity for a firm?

a. increasing inflation rates in the target market

b. decreasing employee attrition within the firm

c. decreasing government interference in the target market

d. increasing productivity of the employees

decreasing government interference in the target market

T or F: according to the resource immobility assumption, resources tend to be “sticky” and don’t move easily from firm to firm

true

T or F: accounting, human resources, and research and development (R&D) are examples of primary activities that add value directly to the value chain

false

T or F: intellectual property (IP) protections such as trademarks or patents are proven methods of establishing permanent barriers to imitation

false

T or F: once dynamic capabilities are established, they require little ongoing attention and tend to remain stable over time

false

T or F: a SWOT analysis would provide a definitive answer as to whether a firm’s growing footprint in overseas markets is a strength or weakness

false

which of the following is an example of a firm’s capabilities?

a. assets such as plant and machinery owned by the firm

b. specific tasks involved in the invoicing of customers

c. routine activities performed in the firm, like physical delivery of products

d. skills involved in training and managing a workforce

skills involved in training and managing a workforce

prestigo systems and zykolux systems are two competing firms. prestigo systems has $400,000 in tangible assets and $150,000 in intangible assets. zykolux systems has $130,000 in tangible assets and $415,000 in intangible assets. in the context of the resource-based view, which of the following is the most likely implication of the asset values of the two companies?

a. zykolux systems has fewer valuable resources than prestigo systems

b. prestigo systems will find it harder than zykolux systems to attain competitive advantage

c. zykolux systems has fewer invisible assets than prestigo systems

d. prestigo systems will find it easier than zykolux systems to sustain competitive advantage

prestigo systems will find it harder than zykolux systems to attain competitive advantage

T or F: dynamic strategic activity systems help a firm to maintain a competitive advantage for extended periods of time

true

which of the following statements about a firm’s core competencies is true?

a. competitive advantage is often lost if a firm relies on its core competencies

b. core competencies are the visible side of competition

c. competitive advantage is frequently the result of a firm’s core competencies

d. core competencies are a firm’s unique products and services

competitive advantage is frequently the result of a firm’s core competencies

onivo auto has been the leader in low-cost and fuel-efficient engine technology for many years. it has been able to sustain its competitive advantage primarily because of its highly efficient automobile engines, which competitors have been unable to develop or buy at a comparable price. in the context of the VRIO framework, which of the following resources attributes most likely underpins onivo’s competitive advantage?

a. the resource is easy to replicate

b. the resource neutralizes external opportunities

c. the resources decreases the perceived value of its products

d. the resource is costly to imitate

the resource is costly to imitate

when asked to explore the strengths and weaknesses of a firm, which of the following would be the best framework to employ?

a. SWOT analysis

b. five forces analysis

c. value chain analysis

d. PESTEL analysis

SWOT analysis

T or F: your WTP/HTW choices should only be focused on where you already have the required resources and capabilities

false

the VRIO framework can be utilized to evaluate the strength of competitive advantage that may be provided from our resources and capabilities. if a resource/capability satisfies all four of the VIRO criteria it could provide

a. temporary competitive advantage

b. sustainable competitive advantage

c. unused competitive advantage

d. competitive disadvantage

e. competitive parity

sustainable competitive advantage

T or F: understanding activity systems/activity maps at different levels of the organization is important because resources and capabilities exist at different levels and we must understand the linkages from the different levels

true

which of the following statements are true as it relates to the topic of organizational design?

a. firms that are more flexible with their organizational structure are guaranteed to generate above average returns, relative to their competitors

b. large firms can maintain a simple organizational structure so long as they are pursuing a cost-leadership strategy

c. strategy should be more influential on designing an organizational structure versus how structure should influence structure

d. firms have a tendency to modify their organizational structures too often, which inhibits their ability to create a sustainable competitive advantage

strategy should be more influential on designing an organizational structure versus how structure should influence structure should influence strategy

alfred chandler, famed business historian, suggests that a firm’s organizational structure should follow its business and corporate level strategy because organizational structure

a. is not as important as strategy

b. has little or no effect on strategic implementation

c. is static and remains intact throughout time

d. is just as dynamic as a firm’s strategy

is just as dynamic as a firm’s strategy

the organizational element hierarchy stipulates which of the following

a. who reports to whom

b. the degree to which decision making is concentrated at the top of the organization

c. the extent to which employee behavior is steered by explicit rules and procedures

d. how a task is divided into separate jobs

who reports to whom

which of the following best indicates that W.L gore & associates has an informal and decentralized organizational structure?

a. it is consistently ranked among the top 100 of the best companies to work for

b. it determines its employees’ levels of compensation on the basis of their boss’s evaluations

c. it prefers face-to-face communication over email and does not have an organizational chart

d. it prevents its associates from becoming shareholders in the company

it prefers face-to-face communication over email and does not have an organizational chart

which of the following best describe entrepreneurship?

a. a business model in which companies can obtain a large part of their revenues by selling a small number of units from among almost unlimited choices

b. the process by which change agents undertake economic risk to innovate - to create new products, processes, and sometimes new organizations

c. the pursuit of social goals while creating a profitable business

d. the commercialization of any new product or process, or the modification and recombination of existing ones

the process by which change agents undertake economic risk to innovate - to create new products, processes, and sometimes new organizations

T or F: innovation and strategic entrepreneurship can only occur within new business

false

T or F: product innovation is more strategically important than process innovation while a firm is in the growth stage of the industry life cycle

false

why is investment in human capital particularly critical in the fourth industrial revolution?

a. because technological disruptions occur only in manufacturing sectors

b. because AI and robotics increase the value of creative and analytical tasks while replacing routine jobs

c. because technological advances eliminate the need for higher education

d. because physical labor is projected to dominate economic growth

because AI and robotics increase the value of creative and analytical tasks while replacing routine jobs

brewmaster coffee, a popular cafe chain, used to buy roasted beans from third-party suppliers. to reduce costs and gain more control over quality, it acquired a coffee farm and roasting facility. this strategic move by brewmaster coffee is known as

a. forward vertical integration

b. crowdsourcing

c. backward vertical integration

d. radical innovation

backward vertical integration

T or F: a firm stops purchasing components from suppliers and starts producing them in-house. this is known forward vertical integration

false

T or F: the most challenging diversification strategy is likely to be one that combines new core competencies with new and emerging markets

true

there are several decisions that strategic leaders must make when developing corporate strategy. which of the decisions below concerns the key question of business strategy?

a. which stages of the industry value chain to participate in

b. how to compete in single product market

c. what range of products or services to offer

d. where, globally, the company should compete

how to compete in single product market