Question 1.1. Which of the following is NOT a factor pressuring companies for local responsiveness? (Points : 1)

the need for local repair and service to customers

customization due to cultural differences

government pressure for firms to use local sources for procurement

availability of low labor costs

Question 2.2. U.S. cola companies entered the global market because of: (Points : 1)

limited growth opportunities in their domestic market.

lower labor costs in the emerging markets.

economies of scale that offset research and development costs.

an increase in the return on investment from their U.S. bottling plants.

Question 3.3. A large domestic market can provide the country's industries a chance at dominating the world market because: (Points : 1)

they have been able to develop economies of scale at home.

they have access to abundant and inexpensive factors of production.

the related and supporting industries will have been developed.

the nation's culture and educational system will be adapted to producing the labor force needed for the industry.

Question 4.4. A global corporate-level strategy emphasizes: (Points : 1)

differentiated products.

economies of scale.

sensitivity to local product preferences.

decentralizing control and limited monitoring.

Question 5.5. Terrorist attacks: (Points : 1)

encourage firms to take truly global corporate strategies in order to offset losses in one region with gains in another.

are considered a "cost of doing business" by international firms.

have not decreased the level of international investment in any region except those involved in active wars.

increase the liability of foreignness for firms.

Question 6.6. In a(n) ______________, the firms involved own equal shares of a newly-created venture. (Points : 1)

equality-based strategic alliance

non-equity strategic alliance

joint venture

equity strategic alliance

Question 7.7. A state-wide alliance of independent hospitals has formed in order to do group purchasing of medical supplies. Group purchasing allows the hospital alliance to negotiate lower prices with suppliers because of the large quantity of materials ordered. This is an example of ___________resulting from an alliance. (Points : 1)

explicit collusion

economies of scale

opportunistic behavior

distribution opportunities

Question 8.8. Partners in a horizontal alliance can expect: (Points : 1)

benefits proportional to their investments.

similar opportunities as a result of the alliance.

common management issues.

different outcomes.

Question 9.9. The three main luxury hotels in a major tourist destination keep very close track of their competitors' room pricing, restaurant offerings, tour packages, and special services, such as airport transportation and spa privileges. When one hotel makes adjustments in prices or offerings, the other hotels follow suit. It is possible that these hotels are: (Points : 1)

engaging in tacit collusion.

following uncertainty reducing strategies.

monitoring business competitors for opportunistic behaviors.

following a competitive response strategy.

Question 10.10. Corporate governance revolves around the relationship between which two parties? (Points : 1)

shareholders and the board of directors.

shareholders and managers.

the board of directors and managers.

none of the above.

Question 11.11. Amos Ball, Inc., is a printing company in Iowa that has been family owned and managed for three generations. Which of the following statements is most likely to be true? (Points : 1)

Agency costs at Amos Ball are high.

If research findings are valid, Amos Ball, Inc. will perform better if a family member is a CEO than if an outsider is CEO.

At Amos Ball, the opportunity for managerial opportunism is high.

The functions of risk-bearing and decision-making are separate at Amos Ball.

Question 12.12. Product diversification provides two benefits to managers that do not accrue to shareholders; _____ and _______. (Points : 1)

a greater experience in a wider range of industries, lessening of managerial employment risk.

the manager frequently invests in the acquired firm which allows him or her extensive profits, the manager can frequently buy excess assets divested by the acquired firm.

the manager's supervisory needs are lowered, the manager is allowed greater time to oversee a wider range of activities.

the opportunity for higher compensation through firm growth, a reduction in managerial employment risk.

Question 13.13. All of the following are unintended consequences of the Sarbanes-Oxley Act except: (Points : 1)

some foreign firms have delisted on U.S. stock exchanges.

a number of publicly-traded companies have decided to privatize.

an increased number of IPOs (initial public offerings) are expected.

internal auditing costs have increased by about one-third.

Question 14.14.

Which of the following does NOT cause a firm to move from a functional structure to a multidivisional structure?

(Points : 1)

increasing diversification

coordination and control issues

need for knowledge-sharing among specialists

greater amounts of data and information to process

Question 15.15. One reason why a long-tenured top-level manager may hesitate to conclude the firm's structure is a problem is that doing so: (Points : 1)

indicates to competitors that the firm is vulnerable to a hostile takeover.

will only lead to inefficiencies.

requires the firm undertake multi-year restructuring period that delay retirement.

suggests that their previous choices were not the best ones.

Question 16.16. Which of the following is NOT associated with an organizational structure that supports a cost leadership strategy? (Points : 1)

centralization

specialization

formalization

integration

Question 17.17. Successful implementation of the differentiation strategy requires a structure that: (Points : 1)

has specialized jobs.

decentralizes decision-making.

focuses on the financial function.

is dominated by the operations function.

Question 18.18.

Executive headhunters have approached Charles about taking the position of senior vice president of marketing for a well-known company. Although this company has been highly successful since 1995, Charles has heard persistent rumors of overly aggressive marketing tactics, questionable reporting of sales data, and an atmosphere of intolerance of criticism. The CEO is a powerful and charismatic individual, who built the company from a small regional firm to an international powerhouse in only a decade. The other top managers have been hand-picked by the CEO, as have a number of the members of the board of directors. The salary for this position is very high and includes generous stock options. It would be a major step up in Charles’ career and would position him to move to CEO of another company in the future. Charles has prided himself on his high moral values and is viewed as an exceptionally ethical person by his peers. What should Charles do?

(Points : 1)

Charles should take the job because he can effect real change in the culture of the organization, and take advantage of the personal financial and career opportunities.

Charles should realize that personal moral values and the realities of the corporate world differ in both quality and degree. Consequently, he can take a job in an ethically borderline company without tainting his personal moral standing.

Charles should not rely on rumors to dissuade him from making an advantageous career decision.

Charles should not take the job because the culture of the organization is set by the CEO and other top managers. He would have little influence on the organizational culture as one of many top managers.

Question 19.19. The more heterogeneous the top management team, the: (Points : 1)

more difficult it will be for the team to implement strategies.

more likely it is that the team will be cohesive.

less innovative the team's decisions will tend to be.

less diverse the team membership will be.

Question 20.20. Which of the following is NOT related to a CEO having long tenure in his or her position? (Points : 1)

more effective strategic control

greater influence on board decisions

more limited perspective

high level of innovation

Question 21.21. Which of the following statements is TRUE regarding effective organizational cultures? (Points : 1)

Once a corporate culture is developed, strategic leaders can focus on other activities.

A strategy that is historically new for a firm should be implemented by incremental changes in the organization's culture.

A central task of strategic leaders is to revise the corporate culture on an annual basis after analyzing the changes occurring in the competitive environment.

Organizational culture can be a source of competitive advantage because it influences employee behavior and how the firm conducts its business.

Question 22.22. When an existing firm creates a new venture or develops an innovation, it is said to be engaging in:

(Points : 1)

corporate emergence.

transformational leadership.

exceptional R & D.

corporate entrepreneurship.

Question 23.23. GreenBox, a company that recycles paper products to make cardboard cartons, has introduced a new product that resists damage by moisture. GreenBox can expect that: (Points : 1)

this innovation will resist competitors' attempts to imitate it.

its investors will react positively to the introduction of the new product because of the potential for higher returns.

its investors will react negatively because of the risk and cost entailed in introducing a new product.

this will be recognized in the industry as a radical innovation.

Question 24.24. _______is one of the reasons for the differences in rates of entrepreneurship among different countries. (Points : 1)

Climate

Competitiveness

Culture

Constitution

Question 25.25. Which of the following is true? For firms to be entrepreneurial, they require a culture with:

(Points : 1)

an emphasis on individualism in Western nations and an emphasis on collectivism in Eastern nations.

an exceptionally high level of collectivism.

a balance of individualism and collectivism.

an exceptionally high level of individualism.

Question 26.26. The example of General Motors' business in China and Europe vividly illustrates that a firm's home market, not international markets, is always responsible for the majority of profits. (Points : 1)

True

False

Question 27.27. The liability of foreignness has become an obsolete concern, as illustrated by the success of many U.S. firms overseas and the success of foreign companies in the U.S. (Points : 1)

True

False

Question 28.28. Having substantial supplies of critical basic natural resources is a necessary condition for a country to support businesses which can successfully compete in international markets. (Points : 1)

True

False

Question 29.29. A multidomestic strategy assumes that consumer needs, industry conditions, and social norms are homogeneous in every country. (Points : 1)

True

False

Question 30.30. A company that chooses a truly global corporate-level strategy assumes that the liability of foreignness will be minimal. (Points : 1)

True

False

Question 31.31. A cooperative agreement between a hotel chain and a casino operator would be viewed as a horizontal complementary strategic alliance because as separate entities, the two firms would compete for the same customer. (Points : 1)

True

False

Question 32.32. Using business-level strategic alliances to hedge against risk and uncertainty is most common in the slow-cycle markets. (Points : 1)

True

False

Question 33.33. A stable alliance network is used in industries characterized by frequent project innovations and short product life cycles. (Points : 1)

True

False

Question 34.34. Close monitoring, formal contracts and constant vigilance against opportunism increase the probability of alliance success. (Points : 1)

True

False

Question 35.35. Amelia Smith is the sole owner of the successful restaurant chain, Amelia's Cafe. Ms. Smith has taken a no-interest loan from the company in order to build a luxurious seaside house for herself in Carmel, California. This constitutes a classic agency problem. (Points : 1)

True

False

Question 36.36. As a rule, shareholders prefer more product diversification than do managers because shareholders wish to reduce risk and maximize wealth. (Points : 1)

True

False

Question 37.37. A board comprised primarily of outside directors will have better insights as to the firms intended strategic initiatives, the reasons for the initiatives, and the outcomes expected from them than will inside directors. (Points : 1)

True

False

Question 38.38. Executives whose bonuses are based on long-term outcomes (rather than short-term outcomes) by the firm are often relatively overcompensated because executive are reluctant to take on the additional risk. (Points : 1)

True

False

Question 39.39. RexMacDonald, Inc. uses a differentiation strategy that relies on cooperation, communication and sharing of ideas among employees. In order to foster this behavior, RexMacDonald should emphasize strategic controls over financial controls. (Points : 1)

True

False

Question 40.40. Firms using the differentiation strategy need to respond quickly to environmental opportunities and threats. The functional structure is effective for this strategy because of its centralization of decision-making. (Points : 1)

True

False

Question 41.41. Internal competition for corporate resources is effective for companies with an unrelated diversification strategy, but dysfunctional for companies with a related-constrained strategy. (Points : 1)

True

False

Question 42.42. The organizational structure for an internationally diversified firm requires trade-offs between global integration and local market responsiveness. (Points : 1)

True

False

Question 43.43. In order for the strategic leader to survive, he or she needs to make optimal decisions for the organization. (Points : 1)

True

False

Question 44.44. Board members with substantive expertise in the firm's core functions and businesses aids the effectiveness of the top management team. (Points : 1)

True

False

Question 45.45. When a new CEO is selected from outside the firm, a change of strategy is likely, especially if the top management team is homogeneous and highly cohesive. (Points : 1)

True

False

Question 46.46. To influence employee's judgment and behavior, ethical practices must shape the firm's decision-making process, but should be a peripheral part of organizational culture. (Points : 1)

True

False

Question 47.47. Regarding competition and markets, entrepreneurship's primary focus is to capture most of the existing markets from less aggressive and innovative competitors. (Points : 1)

True

False

Question 48.48. A firm that innovates through imitation can expect to produce a product for a niche market, since the general market for the standardized product will be dominated by early adopters. (Points : 1)

True

False

Question 49.49. The entrepreneurial mind-set is found primarily among managerial and scientific employees. (Points : 1)

True

False

Question 50.50. Netflix developed a subscription-based model of DVD rental based on using the Internet and the mail instead of the retail location approach used by Blockbuster. This innovative subscription service would be correctly classified as a competence-destroying innovation because of its devastating impact on traditional movie rental businesses such as Blockbuster. (Points : 1)

True

False

Question 51. 51. What factors limit the positive outcome of international expansion? (Points : 4)


Question 52. 52. What is a strategic alliance? What are the three types of strategic alliances firms use to develop a competitive advantage? (Points : 4)


Question 53. 53. How can corporate governance foster ethical strategic decisions and behaviors on the part of managers as agents? (Points : 4)

Question 54. 54. What is organizational structure and what are organizational controls? (Points : 4)


Question 55. 55. What is organizational culture? What must strategic leaders do to develop and sustain an effective organizational culture? Please provide an example. (Points : 4)


Question 56. 56. What is strategic entrepreneurship? What is corporate entrepreneurship?