CHAPTER8

1 INCORRECT Which one of the following statements would be considered false about the concept of competitive advantage? A prominent source of competitive advantage can be found in the A) business's low cost structure. Businesses become successful because they possess some advantage B) relative to their competitors. Businesses that create competitive advantage from differentiation C) usually experience above-average profitability within their industry. Businesses that engage other than a low-cost strategy usually D) experience below-average profitability. Feedback: The correct answer is D. Please see the discussion under Evaluating and Choosing Business Strategies: Seeking Sustained Competitive Advantage, page 215. The business strategy decided upon by the Ripper Up Remodeling Corporation is one that engages in value chain activities, which are achieved at a cost that is well below its competitors. In this way, the competitors can require less money for its services than competitors can. It is safe to say this corporation is engaging a __________. A) B) C) differentiation strategy strategic alliance strategy retrenchment strategy

2 INCORRECT

low-cost strategy D) Feedback: The correct answer is D. Please see the discussion under Evaluating Cost-Leadership Opportunities, page 216. 3 INCORRECT Major Lionel Minor began his own new home construction company when he retired from the Air Force five years ago. The company has rapidly grown to be very large and has reported earnings of over $40 million in the past year. Retired Major Minor attributes this high rate of success to his ability to service his customers at a low price. His organization has to meet several requirements in order to continually support and sustain this lowcost leadership status. Which of the following would not be one of these requirements? A) Tight cost control Avoidance of economies of scale

B) C) Incentives based on meeting quantitative targets

Benchmarking orientation D) Feedback: The correct answer is B. Please see the discussion under Exhibit 8.2: Evaluating a Business's Cost Leadership Opportunities, page 218. 4 CORRECT A business strategy that seeks to build competitive advantage with its product or service by having it be unique from other available competitive products would be classed as __________ strategy. A) B) C) differentiation market focus low-cost leadership

speed-based D) Feedback: The correct answer is A. Please see the discussion under Evaluating Differentiation Opportunities, page 219. 5 INCORRECT All of the following would be considered organizational skills and resources that foster a differentiation strategy except which one? A) B) C) Strong marketing abilities Products of services designed for ease of manufacture or delivery Corporate reputation for quality or technical leadership

Creative talent and flair D) Feedback: The correct answer is B. Please see the discussion under Exhibit 8.3: Evaluating a Business's Differentiation Opportunities, page 220. 6 INCORRECT Sustainable activities that provide all of the following opportunities relative to key industry forces except _________ should become the basis for differentiation aspects within the business's competitive strategy. A) less price sensitivity of buyers rivalry is reduced

B) C) technological changes increase learning and investments

brand loyalty is difficulty for newcomers to overcome D) Feedback: The correct answer is C. Please see the discussion under Evaluating Differentiation Opportunities, page 219. 7 INCORRECT The Tick-Tock Clock Corporation is able to successfully meet the needs of its customers more rapidly than any of its competitors can. It is most likely this corporation is engaging in which one of the following business strategies? A) B) C) Differentiation Speed-based Vertical integration

Market focus D) Feedback: The correct answer is B. Please see the discussion under Evaluating Speed as a Competitive Advantage, page 222. 8 INCORRECT Through its use of speed-based strategy, the Tick-Tock Clock Corporation is most likely to gain its competitive advantage by being proficient in all but which one of the following activities? A) B) C) Product development cycles Information sharing and technology Customer responsiveness

Product cost leadership D) Feedback: The correct answer is D. Please see the discussion under Evaluating Speed as a Competitive Advantage, page 222. 9 CORRECT The extent to which a business concentrates on a narrowly defined market is best referred to as ___________. A) B) market focus low-cost leadership

C)

strategic alliance

retrenchment D) Feedback: The correct answer is A. Please see the discussion under Evaluating Market Focus as a Way to Competitive Advantage, page 224. 10 INCORRECT All of the following would be considered emerging industries of the last decade except _______. A) B) C) online services solar heating airline services

fiber optics D) Feedback: The correct answer is C. Please see the discussion under Competitive Advantage and Strategic Choices in Emerging Industries, page 226.

CHAPTER9
1 CORRECT Jerome Washington's company has decided to acquire two other businesses in order to increase its growth and earning potential. In essence, Jerome's company desires to become a multibusiness company. Which one of the following would be least likely to be considered another valid rationale for why the company would desire to take this action? The company wants to be able to monopolize a portion of the market A) segment. B) C) The company wants to diversify risks. It wishes to increase vertical integration.

It desires to have an instant market presence without waiting on the D) process of slow internal growth. Feedback: The correct answer is A. Please see the discussion under The Portfolio Approach: A Historical Starting Point, page 243. 2 INCORRECT The market share of a business divided by the market share of its largest competitor equals the business's ________. A) relative differentiation strategy

B) C)

BCG growth share matrix portfolio technique results

relative competitive position D) Feedback: The correct answer is D. Please see the discussion under The BCG Growth-Share Matrix, page 244. 3 INCORRECT According the BCG growth-share matrix, which of the following would be most likely to possess a low market share and a high growth rate? A) B) C) Dog Question mark Cash cow

Star D) Feedback: The correct answer is B. Please see the discussion under Exhibit 9.2: BCG Growth-Share Matrix, page 244. 4 CORRECT The Denard Corporation currently possesses a low share of its available market. Additionally, this company's portfolio reveals it has extremely low market growth. This business is most likely to be classed as which one of the following according the BCG growth-share matrix? A) B) C) Dog Question mark Star

Cash cow D) Feedback: The correct answer is A. Please see the discussion under The BCG Growth-Share Matrix, page 244 5 INCORRECT All of the following would be considered reasons for why the industry attractiveness-business strength matrix offers improvement over the BCG matrix except _________. A) the terminology used is preferred and more understandable

B) C)

it reduces the need for strategy formulation the measures tap many additional factors

it brings to light important considerations in strategy implementation D) Feedback: The correct answer is B. Please see the discussion under The Industry Attractiveness-Business Strength Matrix, page 245. 6 INCORRECT Which one of the following would not be classed as a necessary financial strength factor to be considered when a company is constructing its industry attractiveness-business strength matrix? A) B) C) Solvency Cash flows Sales volatility

Break-even point D) Feedback: The correct answer is C. Please see the discussion under Exhibit 9.3: Factors Considered in Constructing an Industry Attractiveness-Business Strength Matrix, page 246. 7 INCORRECT The Ride 'Em Cowboy Western Wear Corporation of Houston is very efficient in maintaining low overhead costs. This corporation has excellent skills in operational efficiency and cost management. However it faces few sources of advantage within its industry, with most of those being quite small. Under which of the following industry environments is this corporation most likely to be placed? A) B) C) Specialization businesses Stalemate businesses Volume businesses

Fragmented businesses D) Feedback: The correct answer is B. Please see the discussion under BCG's Strategic Environments Matrix, page 245. 8 INCORRECT Businesses with many sources of advantage that are characterized by high levels of skill in achieving differentiation such as product design and

innovation would most likely be classed as which one of the following under the BCG's strategic environments matrix? A) B) C) Volume business Fragmented business Stalemate business

Specialization business D) Feedback: The correct answer is D. Please see the discussion under BCG's Strategic Environments Matrix, page 245. 9 CORRECT Which one of the following would not be considered a contribution to strategic analysis through the organizations' use of the portfolio approach? A) It does not address how value is created across business units.

It helps to convey large amounts of information about business units in B) a simplified format. It serves to convey rationales behind corporate strategies in an easily C) understandable manner. It simplifies priorities for sharing resources. D) Feedback: The correct answer is A. Please see the discussion under Limitations of Portfolio Approaches, page 248. 10 CORRECT The ______ perspective sees multibusiness companies as creating value by influencing the businesses they own. A) B) C) parenting framework synergy approach portfolio

patching D) Feedback: The correct answer is A. Please see the discussion under The Corporate Parent Role: Can It Add Tangible Value? page 255.

CHAPTER10
1 INCORRECT Measurable outcomes that are designed to be achievable in one year or less of the company's life are called ___________.

A) B) C)

corporate missions downsizing short-term objectives

reengineering D) Feedback: The correct answer is C. Please see the discussion under ShortTerm Objectives, page 267. 2 INCORRECT Short-term objectives are more consistent when they clearly indicate all but which one of the following? A) B) C) What is to be accomplished? How will it be accomplished? When will it be accomplished?

Who will make the decisions? D) Feedback: The correct answer is D. Please see the discussion under Measurable, page 269. 3 INCORRECT The key, routine activities that must be undertaken in each business area such as marketing, finance, and operations - that provide the business's products and services are called _________. A) B) C) policies functional tactics short-term objectives

golden parachutes D) Feedback: The correct answer is B. Please see the discussion under Functional Tactics that Implement Business Strategies, page 271. 4 CORRECT Functional tactics are different from business or corporate strategies in all but which one of the following ways? A) Costs incurred

B) C)

Specificity Participants who develop them

Time horizon D) Feedback: The correct answer is A. Please see the discussion under Differences between Business Strategies and Functional tactics, page 271. 5 INCORRECT The Up and At 'Em Clock Company of Vermont recently began to provide its employees with training and development that is provided by a Bostonbased firm. The company has found this new method to be cost effective and time saving. It can be stated that the Up and At 'Em Clock Company is engaging the use of ________. A) B) C) empowerment outsourcing functional tactics

policy regeneration D) Feedback: The correct answer is B. Please see the discussion under Outsourcing Functional Activities, page 274. 6 INCORRECT ________ are directives designed to guide the thinking, decisions, and actions of managers and subordinates in implementing a firm's strategy. A) B) C) Short-term objectives Functional tactics Policies

Golden handcuffs D) Feedback: The correct answer is C. Please see the discussion under Empowering Operating Personnel: The Role of Policies, page 276. 7 INCORRECT The act of allowing an individual or team the right and flexibility to make decisions and initiate actions is best referred to as which one of the following? A) Reengineering

B) C)

Empowerment Outsourcing

Delegation D) Feedback: The correct answer is B. Please see the discussion under Empowering Operating Personnel: The Role of Policies, page 276. 8 INCORRECT An organization's formal, written polices have several advantages. Which one of the following would not be considered one of these advantages? A) They systematically enhance indirect control.

They require managers to think through the policy's meaning and B) intended use. C) They make equitable treatment of problems more likely.

They decrease the need for elaborate business strategy implementation D) processes. Feedback: The correct answer is D. Please see the discussion under Creating Policies that Empower, page 276. 9 INCORRECT The type of executive bonus compensation that is noted for promoting longer executive tenure than other forms is which one of the following? A) B) C) Golden parachutes Cash based on internal business performance using financial measures Restricted stock plans

Stock option grants D) Feedback: The correct answer is C. Please see the discussion under Exhibit 10.11: Types of Executive Bonus Compensation, page 280. 10 CORRECT When discussing executive bonus compensation plans, the right to purchase company stock at a fixed price at some future date is called ________. A) B) stock options restricted stock golden handcuffs

C) golden parachutes D) Feedback: The correct answer is A. Please see the discussion under Stock Options, page 279.

CHAPTER12
1 INCORRECT The CEO of the Baxley Corporation has a clear sense of where he wants the corporation to go and also knows exactly what results are desired and necessary. It can be stated Baxley's CEO has which one of the following? A) B) C) Vision Perseverance A leader's passion

Strategic intent D) Feedback: The correct answer is D. Please see the discussion under Clarifying Strategic Intent, page 328. 2 INCORRECT Of the following, which one would be considered incorrect when discussing the concept of a leader's business vision? A leader must clearly communicate the fundamental vision of what the A) business needs to become. B) The leader's vision should clarify strategic intent.

A strategic plan is needed more than a leader's vision in organizations C) desiring to globalize operations. A leader's vision characterizes what the company must become in order D) to achieve global leadership. Feedback: The correct answer is C. Please see the discussion under Vision, page 328. 3 INCORRECT Problems leaders may face when they are attempting to build their organizations include all but which one of the following? A) B) C) Clarifying responsibilities Surrendering organizational control to lower-level subordinates Gaining personal commitment to a shared vision

Keeping abreast of what is happening in the surrounding environment D) Feedback: The correct answer is B. Please see the discussion under Building am Organization, page 331. 4 CORRECT The effort to familiarize future leaders with the skills important to the company and to develop exceptional leaders among the mangers employed is best known as __________. A) B) C) leadership development strategic intent strategic leadership

organizational culture D) Feedback: The correct answer is A. Please see the discussion under Building an Organization, page 331. 5 INCORRECT __________ are fundamental personal standards that guide your sense of honesty, integrity, and ethical behavior. A) B) C) Morals Principles Ethical standards

Referent influences D) Feedback: The correct answer is B. Please see the discussion under Building an Organization, page 331. 6 INCORRECT Of the following, which one is best identified as the capacity to see a commitment through to completion long after most other people would have stopped trying? A) B) C) Vision Principles Perseverance Passion

D) Feedback: The correct answer is C. Please see the discussion under Building an Organization, page 332. 7 INCORRECT Jason is highly committed to what he does for his company and also to what he wants to do with his company in the future. It can be stated that Jason has _______. A) B) C) a leader's perseverance a leader's passion a leader's principles

organizational leadership capabilities D) Feedback: The correct answer is B. Please see the discussion under Shaping Organizational Culture, page 334. 8 CORRECT Important ways leaders can shape an organization's culture would include all but which one of the following? A) B) C) Require self-fulfillment Have vision Have perseverance

Guided by staunch principles D) Feedback: The correct answer is A. Please see the discussion under Shaping Organizational Culture, page 334. 9 CORRECT Many new organizational managers expect to be able to rely on which type of power in order to get things accomplished? A) B) C) Position power Referent power Legitimate power

Information power D) Feedback: The correct answer is A. Please see the discussion under Recruiting and Developing Talented Operational Leadership, page 338.

10 INCORRECT

_______ power refers to the ability to influence and direct others that comes from being able to confer desired items in return for desired actions or outcomes. A) B) C) Punitive Reward Information

Position D) Feedback: The correct answer is B. Please see the discussion under Recruiting and Developing Talented Operational Leadership, page 338.

CHAPTER 13
1 INCORRECT Managers who are in charge of the success of an organization's strategy typically are concerned with all but which one of the following? A) B) C) Are our assumptions about key trends correct? Are objectives being met? Are we moving in the proper direction?

How are we doing in comparison to our closest D) competitor? Feedback: The correct answer is D. Please see the discussion under Strategic Control, page 354. 2 CORRECT Strategic control is concerned with tracking a strategy A) B) C) as it is being implemented before it is implemented shortly after it is implemented

long after it is implemented D) Feedback: The correct answer is A. Please see the discussion under Strategic Control, page 354.

3 INCORRECT

Which one of the following would not be considered a basic type of strategic control? A) B) C) Premise control Implementation control Feedback control

Strategic surveillance D) Feedback: The correct answer is C. Please see the discussion under Establishing Strategic Controls, page 355. 4 INCORRECT Which one of the following strategic controls would have the basic characteristics of a high degree of focusing, a high degree of formalization in data acquisition, can be used with company- and strategy-specific factors, and have key strategic thrusts and milestones as objects of control? A) B) C) Premise control Implementation control Special alert control

Strategic surveillance D) Feedback: The correct answer is B. Please see the discussion under Exhibit 13.1: Four Types of Strategic Control, page 356. 5 CORRECT Every strategy is based on certain assumptions and predications. ________ control is designed to check systematically and continuously whether or not what the strategy is based on is still valid. A) B) C) Premise Implementation Special alert

Strategic surveillance D) Feedback: The correct answer is A. Please see the discussion under Premise Control, page 355. 6 INCORRECT _________ control is designed to monitor a broad range of events inside and outside the firm that are likely to affect the course of its strategy. A) B) C) Premise Strategic surveillance Implementation

Special alert D) Feedback: The correct answer is B. Please see the discussion under Strategic Surveillance, page 357. 7 INCORRECT Which one of the following is best described as being a thorough, often rapid reconsideration of the firm's strategy because of a sudden, unexpected event? A) B) C) Implementation control Strategic surveillance control Special alert control

Premise control D) Feedback: The correct answer is C. Please see the discussion under Special Alert Control, page 357. 8 INCORRECT Which one of the following would not be considered a basic type of implementation control? A) B) C) Strategic thrusts Milestone projectiles Strategic projects Milestone reviews

D) Feedback: The correct answer is B. Please see the discussion under Implementation Control, page 358. 9 INCORRECT Implementation control is enabled through all of the following operational systems except _______. A) B) C) incremental innovation budgets key success factors

schedules D) Feedback: The correct answer is A. Please see the discussion under Implementation Control, page 358. 10 CORRECT _________ is one of the basic types of strategic control. A) B) C) Operational control Long-term control Special alert control

Stakeholder control D) Feedback: The correct answer is C. Please see the discussion under Establishing Strategic Controls, page 354.