Test Bank

Test BankStudent: ___________________________________________________________________________ 1. The types of skills that are required to prepare an effective strategic case analysis can benefit you in actual business situations. True False 2. There are two capabilities that can be learned through case analysis—the ability to speculate and integrate. True False 3. Case analysis takes students through the whole cycle of activity a manager would face. True False 4. The role of strategic decision maker is one that may be taken when analyzing a case. True False 5. The business plan framework is not effective for analyzing strategic cases. True False 6. The first step in becoming familiar with the material is to read quickly through the case to get an overall sense of the material. True False 7. Writing down a problem statement is a needless waste of time when preparing a case. True False 8. Analytical tools such as value chain analysis and five forces analysis are useful tools to employ when conducting strategic analysis. True False 9. The current ratio, quick ratio and cash ration are all measures of short-term solvency. True False 10. The profit margin tells you how much investors are willing to pay per dollar of current earnings. True False 11. The basic aim of case analysis is to find solutions. True False 12. There are five basic rules for preparing an oral case presentation. True False 1 13. According to the text, one of the reasons that case analysis is so enriching as a learning tool is that it draws on many resources and skills besides what is in the textbook. True False 14. The case analysis process should focus strictly on the case itself and you should not be concerned about your own performance. True False 15. According to the text, there are six rules for preparing a written case analysis. True False 16. The word conflict has negative connotations. True False 17. The illusion of unanimity is one of the symptoms of groupthink. True False 18. The use of a devil's advocate causes conflict that is counterproductive. True False 19. Dialectical inquiry is a technique whereby a problem is approached from two alternative points of view. True False 20. To obtain synthesis, your analysis should ideally include the best components of each alternative. True False 21. The analysis-decision-action cycle is the recommended method of case analysis. True False 22. According to the text, the analysis-decision-action cycle should not include analysis of the external environment but only focus on the internal aspects of the organization. True False 23. Three capabilities that can be learned through case analysis are A. the ability to question, ponder, and answer. B. the ability to differentiate, speculate, and integrate. C. the ability to read, write, and perform mathematical calculations. D. the ability to be cruel, competitive and cut-throat. 24. Being able to imagine different scenarios or contemplate the outcome of a decision are examples of the capability known as A. intergration B. differentiation C. speculation D. none of the answers is correct 2 25. In order to place yourself inside a case, you might adopt the position of A. an outside consultant. B. a strategic decision maker. C. the board of directors. D. all of the answers are correct 26. People, opportunity, context, risk, and reward are all part of A. the strategic groups approach. B. the contingency model. C. the business plan framework. D. the financial planning framework. 27. When becoming familiar with a case it is recommended that you A. skim the case only once. B. you take several days to read and digest the case. C. read it at night before bed and think about it in your sleep. D. skim it once, and read it a second time, in depth, making notes as you read. 28. Sometimes problems in a case are not apparent until A. after you do the analysis. B. you read the case 12 times. C. you write down the problem statement. D. none of the answers are correct. 29. Price-earnings and market-to-book are examples of A. market value ratios. B. profitability ratios. C. turnover ratios. D. liquidity ratios. 30. The step in case analysis that involves using analytical tools from the textbook such as value chain analysis is known as A. identifying problems. B. proposing alternative solutions. C. conducting strategic analysis. D. becoming familiar with the material. 31. The step in case analysis that involves the evaluation of choices and implications of those choices is known as A. identifying problems. B. proposing alternative solutions. C. conducting strategic analysis. D. becoming familiar with the material. 32. The final step in the case analysis process is A. identifying problems. B. proposing alternative solutions. C. making recommendations. D. conducting strategic analysis. 3 33. An essential part of preparing an oral presentation is: A. organizing your thoughts. B. being consistent and logical. C. emphasizing strategic analysis. D. all of the answers are correct 34. Conducting outside research when doing a case study is A. unethical and irresponsible. B. one of the ways to help get the most out of the experience. C. not recommended. D. none of the answers is correct. 35. Presenting information graphically is A. one of the five rules for preparing a written case analysis. B. one of the five rules for preparing an oral case presentation. C. recommended only for liberal arts majors. D. a form of brainstorming. 36. The use of conflict-inducing decision making techniques in case analysis A. is designed to improve case analysis. B. involves the constructive use of conflict. C. can be helpful in arriving at better solutions to cases. D. all of the answers are correct 37. The phenomenon known as groupthink is undesirable and can lead to poor decisions. The concept of groupthink was developed by A. Financial Post Advisor B. Irvine Janis C. Howard Jones D. all of the answers are correct 38. Which of the following tries to identify problems with the proposed alternative and suggests reasons why it should not be adopted? A. the devil's advocate B. the inquirer C. the dialectic D. the figurehead 39. Analyzing organizational goals and objectives is A. a value-creating activity. B. an affordable strategy in case analysis. C. the first step in the analysis-decision-action cycle. D. the final step in preparing a written case analysis. 40. Asking the question, "Have strategic principles been used in the process of obtaining valuable resources and crafting effective entrepreneurial strategies?" is an essential part of A. creating new ventures. B. the final step in the analysis-decision-action cycle. C. the 12th step in the analysis-decision-action cycle. D. all of the answers are correct 4 43. Discuss the three capabilities that can be developed through case analysis and explain how these three activities sometimes compete for a manager's attention. and discuss when it might be appropriate to use this framework to analyze strategic cases? 45. Outline the five easy steps that can be used to organize a strategic management case analysis. board of directors. The analysis-decision-action model reflects A.41. 5 . 44. all of the answers are correct 42. material presented in Chapter 12 D. and outside consultant that may be adopted when conducting a strategic case analysis. an overarching strategic perspective C. Describe the four characteristics of a business plan framework. ideas that are linked sequentially B. Compare and contrast the positions of strategic decision maker. 46. Discuss the resources beyond the textbook that might be used to conduct strategic case analysis and explain how the use of additional resources can help you get the most out of the experience and expand your horizons. What are the five rules for preparing a written case analysis and how do these differ from the rules for preparing an oral presentation? 49. 48. 6 . Discuss how these techniques can improve the quality of case analysis. Outline the various approaches to conflict-inducing decision making and provide examples of each. Outline the five rules for preparing an oral case presentation and explain why each is essential to the development of an effective presentation. 47. customer satisfaction and financial results. Strategic management includes strategy analysis. True False 59. and corporate levels. True False 55. 51. True False 58. Social responsibility is the idea that organizations are not only accountable to shareholders but also to the community-at-large. According to the text. Shareholders in a company are the only individuals with an interest in the financial performance in the company. True False 52. True False 57. Explain how the 12 ideas involved in the analysis-decision-action cycle are linked sequentially in terms of an overarching strategic perspective. and the community-at-large are among a firm's stakeholders. True False 54. employees. digital. This is an example of a symbiotic approach to strategic management. and strategy implementation. Social responsibility for Suncor Energy of Calgary means accountability to customers but NOT to employees. formulating strategy includes taking into consideration strategy at the business. Strategic management consists of the analysis.50. international. strategy formulation. Shareholders. Sears has developed a sophisticated quantitative model that can predict the relationship between employee satisfaction. True False 53. True False 56. Symbiosis is the ability to recognize interdependencies among the interests of multiple stakeholders within and outside an organization. and actions an organization undertakes in order to create and sustain competitive advantages. True False 60. decisions. True False 7 . Decisions by Boards of Directors are always consistent with shareholder interests. True False 71. specific. True False 67. Objectives in organizations should be clear. and only discusses the purpose of the company. A mission statement encompasses both the purpose of the company as well as the basis of competition and competitive advantage. and known by employees throughout the organization. Organizational goals and objectives should be vague in order to allow for changes in strategy. and realistic. True False 66. vision statements are intended to motivate and inspire employees to work toward a general goal. Long-term objectives are covered in the organization's vision statement. It is a concern of managers throughout organizations. appropriate. Strategic management should only include short-term objectives. Mid-level and low-level employees are best equipped to implement the organization's strategies. Intellectual capital is becoming increasingly important in today's economy. An organization's vision statement should be massively inspiring. overarching. True False 68. long-term. Strategic objectives should be measurable. a mission statement is an overarching statement that is massively inspiring. Although vision statements vary from organization to organization. True False 72. True False 70. stated. True False 62. According to the text. Globalization is the flow of capital. and information throughout the world. True False 63. True False 65. It is important for organizations to focus primarily on financial objectives and be less concerned about other objectives and goals. True False 64. but not constrained by time deadlines. The strategic management process should be addressed only by top-level executives. Organizational vision statements are the beginning point for the hierarchy of goals throughout the organization.61. True False 69. and long-term. people. True False 8 . "Effectiveness" is often defined as A. formulating Internet and international-level strategy. 79. recognizing the trade-offs between effectiveness and efficiency. According to the text. D. a new way to describe shareholders. B. groups. D. B. 77. set low targets. The four key attributes of strategic management include all of the following except A. emphasizing financial returns 9 . B. focused on the economic landscape. as having A. organizations must continually analyze their strategy and their competitive environments. According to the text. stakeholder symbiosis C. According to Henry Mintzberg. C. strategy must be focused on one specific area of an organization. strategy must focus on competitor strengths. incorporating both short-term and long-term perspectives. this is an example of ________________. are a combination of deliberate and emergent strategies. C. 74. must be based on a company's strategic plan. the textbook describes Roth. D. strategy analysis includes A. doing the right thing. B. must be kept confidential for competitive reasons. including multiple stakeholder interests in decision making. 75. stakeholder satisfaction C. C. The four key attributes of strategic management include the idea that A. and financial results. doing things right. In terms of strategy analysis. strategy must be directed toward overall organizational goals and objectives. customer satisfaction. B. A. In order to increase their competitiveness. D. 76. ignored the experiences of competitors and set unrealistically high growth targets. CEO of Nortel. C. D. individuals. B. creditors who hold a lien on the assets of the organization. productivity enhancement. strategy must be focused on long-term objectives. strategic leadership and fostering entrepreneurship. Sears has developed a sophisticated quantitative model and found that there were positive relationships between employee satisfaction. and organizations who have a stake in the success of the organization. D. strategy implementation and strategic controls. Stakeholders are A. assessing intellectual capital as well as analyzing the internal and external environment. all of the answers are correct 80. C. B. rewarding stakeholders D. C. 78. emphasis on the attainment of short-term objectives. are a combination of deliberate and differentiation strategies. the realized strategies of a firm A. zero-sum relationship among stakeholders B. D. attorneys and their clients who sue the organization.73. organizations must participate in stakeholder management. One concept that helps managers do this is stakeholder symbiosis. direct all actions of the CEO. stakeholders are second in importance to the shareholders. all of the above. D. the fact that court costs could impact the financial bottom line. financial. B. the idea that organizations are solely responsible to local citizens. these could include A. interests of the shareholders are not the only interests that matter. C. and customer B. D. 83. Managers should do more than just focus on short-term financial performance. In order to meet the demands of these groups. D. C. 87. 82. appointed by the Securities and Exchange Commission. one can only gain at the expense of someone else. B. C. financial. only allowed to serve one term of four years. Firms must be aware of goals other than short-term profit maximization. stakeholders and managers inevitably work at cross-purposes. environmental. financial. represent their own interests. all stakeholders receive financial rewards. and social. D. Stakeholder management means that A. B. One area of concern should be social responsibility which is A. elected by the public. material capital. B. D. B. and psychological. C. all stakeholders want to maximize shareholder returns. members of an organization's board of directors should A. environmental.81. 85. C. Firms must be concerned with many types of capital. An organization is responsible to many different entities. D. 10 . This means that A. B. stakeholders are dependent on each other for their success. the expectation that business will strive to improve the overall welfare of society. 86. human and social capital. Members of Boards of Directors are A. While working to prioritize and fulfill their responsibilities. C. the idea that businesses are responsible to maintain a healthy social climate for their employees. the "triple bottom line" approach to corporate accounting includes which three components: A. financial. and customer. ecological capital. organizational. elected by the shareholders as their representatives. According to the text. D. 84. organizational. emphasize the importance of short-term goals. C. In the broader sense. represent the interests of the shareholders. stakeholders look out for their individual interests. Peter Senge. A. Internal networkers D. managing the flow of goods. and information. in the middle C. 89. Executive leaders C. vision statements. B. strategic objectives D. management and employees have separate goals. they are forced to continually innovate. Such organizations will be most effective if A. _______________ are individuals that. Local line leaders B. Leadership is a necessary (but not sufficient) condition for organizational success. recognized three types of leaders. As our world increases in complexity. vision statements C. only at the top B. functional areas work together to attain overall goals. mission statements. mission statements B. D. should not be pursued by industry leaders. people. mission statements. vision statements. more people speaking more languages. strategic objectives 11 . As firms work to become more efficient and effective in the global business environment. the global environment is increasingly competitive and challenging..88. 92. strategic objectives. B. and sometimes competing. generate their power through the conviction and clarity of their ideas. governmental regulations. Many organizations have a large number of functional areas with very diverse. B. C. B. goals are defined at the bottom and implemented at the top. 91. 90. D. throughout the organization. The hierarchy of organizational goals is in this order (least specific to most specific): A. from the bottom up. may enhance or destroy a firm's capabilities. will always increase a firm's performance. vision statements. in the middle of the organization. Shop floor leaders 93. The text argues that a strategic perspective in an organization should be emphasized A. Leaders should emerge at which level(s) of an organization? A. of M. throughout the organization D. C. managing the flow of capital. at the top of the organization. happens only incrementally. Innovation in an organization A. interests. D. only during times of change 94. D. each functional area focuses on achieving their own goals. C. C. The key to effective globalization is A.I.T. although having little positional power and formal authority. mission statements. strategic objectives. vague statement of direction. B. C. strategic objective. line manager's individual goal. Simple. "Providing Canadians with a one-stop destination in meeting their needs" C. 96. C. A. financial objectives and projected figures. Vision statements A." This is an example of a A. its mission should A. B. Effective vision statement include A. encompass all the major rules and regulations of the corporate work force. D. D. Proud" D. be less detailed. 99." This is an example of a A. are very specific. mission statements C. True. 101. 97. C. nonfinancial strategic objective. Profitable. "… the world's best quick service restaurant" 100. be shorter in length. B.Fortune Brands states they will "cut corporate costs by $30 million a year. vision statements B. strategic posturing and future objectives. strategic objectives D. D. In contrast to an organization's vision. C. 12 . vision statement. D. evoke powerful and compelling mental images. "Restoring patients to full life" B. encompass both the purpose of the company as well as the basis of competition. C. First. set organizational structure. B. Wellpoint Health Networks states: "Wellpoint will redefine our industry: through a new generation of consumer-friendly products that put individuals back in control of their future. mission statement. "Clear. vision statement. and "restoring patients to full life" (Medtronics). Which "organizational vision" did the text credit belonging to BCE Bell Canada Enterprises? A.95.Vision statements are used to create a better understanding of the organization's overall purpose and direction. operational objectives 98. B. Examples of _____________ include: "to be the happiest place on earth" (Disney). financial strategic objective. a brief statement of the company's direction. all strategic directions of the organization. D. provide specific objectives. Discuss what "globalization" means and how and why it impacts today's firms. Discuss each of these steps.Discuss what is meant by recognizing trade-off between efficiency and effectiveness and provide an example of how this attribute of strategic management could influence the strategic decisions of a firm.102. 13 . 105. strategy formulation. 103.A firm has a variety of different stakeholders. Identify several possible stakeholders a firm may have and discuss how the firm may achieve stakeholder symbiosis. and strategy implementation. 104.Globalization is impacting most firms today.The strategic management process includes strategy analysis. Although changes in the general environment may often adversely or favorably impact a firm.Competitive intelligence generally does not benefit very much from gathering information on competitors from sources in the public domain.Nearly one-fifth of Canadians will be over 65 by 2025.The same environmental trend can often have very different effects on firms within the same industry. True False 111.Competitor Intelligence (CI) is a tool that can provide management with "early warnings" about both threats and opportunities. True False 116.Environmental monitoring deals with tracking changes in environmental trends that are often uncovered during the environmental scanning process. they seldom alter an entire industry. 107. True False 114. forecasting is typically considered more of an art than a science and it is of little use in generating accurate predictions. True False 109. True False 115. True False 113. True False 108. True False 110.Competitor Intelligence gathering is no different from spying.106. List several of these and discuss why a firm's strategic objectives should meet these criteria. True False 14 .The text discusses several characteristics of effective strategic objectives. True False 112.Scenario analysis draws on a range of disciplines and interests.Even with all of the advances in recent years.Environmental scanning and competitor intelligence provide important inputs for forecasting activities. 117.Porter's five forces model helps to determine both the nature of competition in an industry and the industry's profit potential. True False 122. True False 127.Rivalry is most intense when there are high exit barriers and high industry growth. True False 121. True False 128. True False 126. True False 15 . True False 119.The more attractive the price/performance ratio of substitute products.Rival airlines Air Canada and WestJet are battling over allegations of corporate espionage. businesses. True False 123. True False 129.The power of suppliers will be enhanced if they are able to maintain a credible threat of forward integration. True False 120. True False 125.The Canadian forestry industry has gained significant advantage over competitors in Sweden and Finland through the use of advanced technology. where switching from one supplier to another is very costly. the more tightly it constrains an industry's ability to charge high prices. high switching costs can act as an important barrier to entry.In some industries. and where there are many suppliers.Supplier power tends to be highest in industries where products are vital to buyers.Technological innovations can create entirely new industries and alter the boundaries of industries. True False 124.Industries characterized by high economies of scale typically attract fewer new entrants.Porter's five forces model is designed to help us understand how social attitudes and cultural values impact U.Buyer power tends to be higher if suppliers provide undifferentiated or standard products.The power of a buyer group is increased if the buyer group has less concentration than the supplier group. True False 118.S. environmental scanning and competitor intelligence. Environmental surveying D.Complementary products are products that typically have a negative impact on the value of a firm's own products or services. True False 131. Environmental scanning B.Environmental forecasting involves developing plausible projections about the ________ of environmental change. A.According to the text.The strategic groups in the world-wide automobile industry have been very stable and unchanging in recent years.Gathering "competitive intelligence" A. speed D. Canadian Tire is more concerned about Wal-Mart than Holt Renfrew. True False 136. is considered unethical._____________ tracks the evolution of environmental trends. environmental scanning and stakeholder identification. True False 134. C. minimizes the need to obtain information in the public domain. B. Competitive intelligence 139. assessing internal strengths and environmental scanning. A. True False 135. 138. Environmental monitoring C. D.Michael Porter's Five Forces Analysis is a dynamic tool for analyzing industry attractiveness.Bombardier studies people's travel patterns to decide on the number of seats they should plan for future aircraft. C. B.The use of the strategic groups concept is generally not helpful in charting the future directions of firms' strategies. True False 132. or streams of activities. environmental scanning and a SWOT analysis. sequences of events. all of the answers are correct 16 .130. is good business practice. 137. D. True False 133.Two key inputs to developing forecasts discussed in the text are A. direction B. is illegal. scope C. Air Canada claims WestJet used employee access information to obtain flight info. the companies used to be governed by A. 146. 143. global changes.WestJet conflict. Canada followed with similar provisions.Which of the following would be considered part of a firm's general environment? A. the same federal agency. no similar Canadian legislation was developed. B. D. Air Canada claims their employee website was hacked. C. the issue is: A. Canada deregulated the associations. B. industry associations. forcasting's retrospective nature provides little information about the future C. changes in the geographic distribution of the population. in most cases. sociocultural changes. it can create legal problems for the firm if regulators discover the company is making forecast.In the Canadian telecommunications industry. D. macroeconomic changes. different federal agencies. C. sociocultural changes. 144. CRTC. C. technological developments.140. decreased entry barriers B. changes in ethnic composition. 147. changes in the ethnic composition.Increasingly larger numbers of women entering the work force since the early 1970s is an example of A. demographic changes. the increasing educational attainment of women in the past decade. A.The aging of the population. C. 17 . 141. the expense of collecting the necessary data exceeds the benefit B. increased bargaining power of the firm's suppliers D. demographic changes. political and legal environmental changes. the provincial governments developed similar laws. various provincial agencies. managers may view uncertainty as "black and white" while ignoring important "grey areas" D. D.In the Air Canada . C. D. and effects of the baby boom are A. increased competitive intensity 145. B.A danger of forecasting discussed in the text is that A. D. Air Canada claims their email was stolen. B. increased trade deficit C.Emerging sociocultural changes in the environment include A. C.The political/legal segment: When the US congress passed the Sarbanes-Oxley Act in 2002. B. progressively less disposable income by consumers. D. 142. WestJet claims their employee website was hacked. B. high switching costs. a firm in the same industry and in the nearest strategic group looking to join your group 155. includes allegations that Air Canada sent investigators to pilfer a WestJet Executives garbage looking for data. This is an example of A. a firm that produces substitute goods to your product line C. a firm in the same industry and in the same strategic group B. replacing their former distributor. product differentiation. B. the threat of government intervention C. gathers to form a cooperative to sell their products to buyers directly. forward integration. low switching costs C. includes allegations that WestJet set up a screen-scraper program to automatically lift data.An independent group of suppliers. economies of scale. large economies of scale B. all of the answers are correct 18 . forward integration. low economies of scale. B. a competitor to your product where a high switching cost exists D. C. backward integration. easy access to raw materials D.Interest rate increases have a ________ impact on the residential home construction industry and a ___ effect on industries that produce consumer necessities such as prescription drugs or basic grocery items. This is an example of A. B. neutral B. negative. threat of substitute products. positive. C. C. high differentiation among competitors' products and services. D.The rivalry between Air Canada and WestJet A.A large fabricator of building components purchased a steel company to provide raw materials for its production process. recent technological innovation 150.Which of the following firms would likely pose the least competitive threat? A. high capital requirements. D. C. positive D. A. 151.148. 152.Which of the following would be an entry barrier? A. increased deregulation in an industry B. low capital requirements 154. B. threat of entry. backward integration. negative 149. such as farmers. 153. neutral C.The threat of new entrants is high when there are A. positive. recently moved from the skies to the courtroom.Which is considered a force in the "Five Forces model"? A. rivalry among competing firms D. D. negative. D. C. there are high switching costs. many suppliers. have similar impact on organizations of different industries.The bargaining power of suppliers increases as A. D.Buyer power will be greater when A. C. tend to be interrelated and dynamic over time. C. D. B. B. other companies in the same industry. specialized assets with no alternative use. importance of buyers to supplier group increases. B. a high growth industry with low fixed costs. readily available substitute products. B. 157. are independent and static over time. B. all of the answers are correct 161. are independent and dynamic over time. D. a prestigious upscale player. the threat of forward integration by suppliers increases. governmental and social pressures. strategic interrelationships with other business units within the same company. low differentiation of products supplied. C.Threat of substitute products comes from A. switching costs for buyers decreases.Strategic groups within industries: Canadian retailer Holt Renfrew is described as A. the products purchased are highly differentiated. the industry's product is very important to the quality of the buyer's end products or services. all of the answers are correct 163.In Porter's Five Forces model. it is concentrated on purchasing large volumes relative to seller sales. 159. firms in other industries that produce products or services that satisfy the same customer need.Exit barriers arise from A. conditions under which a supplier group can be powerful include all the following except A. 158. 160. high differentiation by the supplier. B. D. C. D. C. 19 . more suppliers enter the market. C. 162.A supplier group would be most powerful when there is/are A. dominance by a few suppliers. lack of importance of the buyer to the supplier group. B. foreign companies which can use cheap labour in their countries.The general and competitive environments A. a competitor of Wal-Mart. few substitute products. similar to Canadian Tire. D. high threat of backward integration by the buyers. B.156. C. D. D. C.Which of the following is an example of the interrelationship between the general and competitive environments? A. 20 . 169. B. A country's technological inferiority results in its enactment of strong trade barriers against importation. B. executives drawn from different companies within an industry that makes decisions on industry standards. 166. Strategic groups help chart the future directions of firms' strategies. B. Greater awareness of the environment results in environmental legislation. 168. that the global environment is not as powerful an influence as thought. D. Increased concern for the environment results in legislation that impacts your current packaging. customers who compliment the company for their good products and services. B. 167. firms within an industry that decide to collude rather than compete with each other so that they can increase their profits. B. The recession results in several of your competitors cutting prices and intensifying rivalry.Which of the following best demonstrates the interrelationships among different segments of the general environment? A. complementors are A. Government deregulation results in different firms being able to offer the same product as your firm. C. firms that produce substitute products. A decline in a nation's educational standards results in a decline in the nation's productivity. C.Which of the following statements about strategic groups is false? A. firms that produce products or services that have a positive impact on the value of a firm's products or services.Strategic groups consist of A.Delayed marriages. fewer people in relevant age groups. and greater rivalry in the alcoholic beverages industry. D. firms within an industry that follow similar strategies. and rising interest rates dampening demand for houses illustrates A. that macroeconomic forces dominate the general environment. B. that the competitive environment often has a strong influence on the general environment. D. D. that more than one segment of the general environment may affect an industry. Strategic groupings are of little help to a firm in assessing mobility barriers that protect a group from attacks by other groups. C. Strategic groups are helpful in thinking through the implications of each industry trend for the group as a whole. Increased awareness of personal health leads to lower demand. C. firms that supply critical inputs to a company. 165. D.In the value-net analysis. C. (2) no two firms are exactly the same. A new technology results in the development of a substitute product for your firm's product. Two assumptions are made: (1) no two firms are totally different. D. top executives who make strategies for a company.164. 173.Explain why managers must recognize opportunities and threats in their firm's external environment. Explain. 172.Using the Canadian beer as an example. savings rates. explain how an industry or competitive environment might be defined and analyzed. 21 . trade and budget deficits/surplus.Many indicators of the macroeconomic environment such as GNP. Provide examples.Discuss some of the limitations of forecasting. 171.Explain how competitor intelligence can be improved by gathering information about competitors in the public domain. interest rates. etc. are interrelated. 174.170. Explain the important barriers to entry in an industry.Explain how the value net analysis adds to the five-forces analysis. 22 . 177. 179.175. 178. Explain. 176.What are some of the factors that would cause a supplier group to become powerful? Illustrate. Be sure to include examples from at least two industries.Discuss and provide examples of factors that would lead to greater buyer power. Provide examples.Several factors usually interact which result in intense rivalry among competitors. Primary activities contribute to the physical creation of a product or service.Outbound Logistics: Campbell's Soup uses continuous replenishment for the Loblaw stores it supplies in Canada. and its service after the sale. True False 184. True False 183. its sale and transfer to the buyer.Value chain analysis assumes that a firm's basic economic purpose is to create value and it is a useful framework for analyzing a firm's strengths and weaknesses.Technology development is a much broader concept than research and development. value is measured by market value of the total stock outstanding of the company. True False 189.What value is the strategic groups concept as a tool in analyzing an industry? 181.Establishing a customer service hotline to handle customer complaints would be considered a primary activity in value chain analysis. True False 182.Performing a value chain analysis provides a complete assessment of the firm's strengths and weaknesses. True False 186.The automotive sector represents one of Canada's most important economic engines.The value chain concept assumes that both primary and support activities are capable of producing value for customers. True False 185. True False 188.In value chain analysis.In value chain analysis. True False 190. general management is considered part of a firm's infrastructure.180. True False 23 . True False 187. True False 24 . True False 193.When using industry norms as a standard of comparison. True False 196. not on relationships among activities within the firm and other organizations (such as suppliers and customers). True False 198.A firm's intangible resources refer to its capacity to deploy tangible resources over time and leverage those resources effectively.Products and services that are difficult to imitate help firms sustain their profitability.Managers should focus their attention on interrelationships among value chain activities within the firm.A primary benefit of the "balanced scorecard" is that it complements financial indicators with operational measures of customer satisfaction. True False 199.Financial analysis provides an accurate way to assess the relative strengths of firms and can be used as a complete guide to study companies.Capabilities that are causally ambiguous are difficult to imitate. True False 195.For a resource to provide a firm with potential sustainable advantages it must satisfy only two criteria: rareness and difficulty in substitution. and the organization's innovation and improvement activities. managers must be sure that the firms used in the comparisons are representative of all sizes and strategies within the industry.191.Path dependency has no impact on the inimitability of resources. True False 194.Tangible resources are assets that are relatively easy to identify such as financial and physical assets.An increase in profits indicates an improvement in cash flow. internal processes. True False 200.Leverage ratios provide measures of a firm's capacity to meet its long-term financial obligations. True False 203. True False 202. True False 192.Historical comparisons are most appropriate during periods of recession or economic boom. True False 197. True False 201. Supply of replacement parts is a _________ activity. machining and packaging. primary C. primary B. reduced work-in-process inventories D. repair and parts supply. True False 206. D. secondary D. Operations 208. 207. They consist of warehousing. organizational culture and leadership. reduced dependence on suppliers 211. support 210. criteria for lease versus purchase decisions. storing. material handling. delivery operation.Inbound logistics include A. minimized idle production facilities and workers C. Outbound logistics D. warehousing and inventory control.A marketing department that promises delivery faster than the production department's ability to produce is an example of a lack of understanding of the A. A. support. synergy of the business units.The balanced scorecard enables managers to evaluate their business from only two perspectives: customer and financial. order processing. A. promotion and packaging. Services B. need to maintain the reputation of the company. D. reduced raw material storage costs B. B. interrelationships among functional areas and firm strategies. and distributing the product or service to buyers.In assessing its primary activities. baggage handling. D. support. Inbound logistics C. B.Advertising is a ______ activity. 209. employee training programs.An important implication of the balanced scorecard is that managers need not look at their job as primarily balancing stakeholder demands. C. an airline would examine A. and scheduling. 25 . primary.Which of the following is not an advantage of Just-In-Time inventory systems? A. the effectiveness of its lobbying activities.___________ are associated with collecting.204. True False 205. primary. C. B. C. inbound logistics B.According to value chain analysis. B. and firm infrastructure D. B. product distribution. technology development D. which of the following would be considered part of a firm's infrastructure? A. human resource management. product promotion. and operations C. B. marketing and sales 219. the industry and the competitive environment 26 . information systems C. It A. and procurement 215. replenish products in a timely manner. development. human resource management B. all of the answers are correct 218.Human resource management consists of activities involved in the recruiting. supports both individual primary and support activities and the entire value chain. training. parts supply. C.Which of the following is a support activity? A.Which of the following lists consist of support activities? A. information systems have been a source of competitive advantage by enabling them to A. and compensation of all types of personnel. human resource management. information systems. D. customer service 214.For firms such as Campbell Soup Company. technology development. supports only individual support activities. information systems. supports only individual primary activities. C. and procurement B. technology development. procurement 217. forecast future demand.Assessment of a firm's primary activities should include analysis of all of the following except: A. human resource management. D. procurement of critical supplies. C. monitor inventories in distribution centres. customer service. the interrelationships among the primary activities of the firm and corporate management C. customer service. inbound logistics B. the primary and support activities of the firm B. hiring. marketing and sales.Customer service would include A. operations C. operations C. D.The resource-based view (RBV) of the firm combines two perspectives: A. customer service. procurement. human resources D. technology development D. supports mostly support activities but does have some impact on primary activities. 216. the internal analysis of the firm as well as the external analysis of the industry and competitive environment D.212. 213. . intangible resources.220. A. B.A crash R&D program by one firm cannot replicate a successful technology developed by another firm when research findings cumulate. difficult for competitors to imitate 225. tangible resources. Intangible resources C. intangible resources. and top management 221. and organizational structure B. physiology. tangible resources. This is an example of A. nonsubstitutable D. rare. strong primary activities. tangible resources. intangible resources C. and organizational capabilities D. Canadian retailer Holt Renfrew combines: A. 224. Organizational capabilities 223. rare B. culture. Reputational resources D. tangible resources. it must have the following four attributes: A. 27 . physically unique. Which of the following is not one of these attributes? A. organizational capabilities.Gillette combines several technologies (e. tangible resources.For a resource to provide a firm with the potential for a sustainable competitive advantage.______________ are the competencies or skills that a firm employs to transform inputs into outputs. valuable. rare.The three key types of resources that are central to the resource-based view of the firm are: A. valuable D. inimitable. C. valuable. intangible resources. mobile. causal ambiguity. real estate and store fixtures B. This is an example of their A. path dependency. nonsubstitutable B. accumulated reputation for quality D. D. valuable. rare. C. metallurgy. intangible resources. causally ambiguous 226. D. nonsubstitutable C.To create an intangible resource that cannot be easily copied. physics) to attain unparalleled success in the wet shaving industry. inimitable.For a resource to provide a firm with the potential for a sustainable competitive advantage.g. all of the answers are correct 222. B. rare. it must have four attributes. easy for competitors to substitute C. physically unique. Tangible resources B. social complexity. brand name and experienced staff C. physical uniqueness. is based primarily on leverage ratios. D. B. and social substitutability D. tangible resources. interpersonal relations among a firm's managers C. physical uniqueness.A competitive advantage based on inimitability can be sustained for at least some time if it has the following characteristics: A. and social complexity B. current ratio. competitive parity. physical uniqueness. B. social complexity. leverage ratios B. debt ratio. profitability ratios C. activity ratios D. cause dependency.The following are examples of socially complex organizational phenomena except: A. C. path dependency. D. total asset turnover. causal ambiguity. profit margin. a firm's culture B. 231. involves only liquidity ratios. the efficiency with which a firm utilizes its assets 233. C.The best measure of a company's ability to meet imminent financial obligations is known as the A. complex physical technology D. geographic uniqueness. 232. causal ambiguity. rarity.A meaningful ratio analysis A. 228. path dependency. and path complexity 229. D. a sustainable competitive advantage. path dependency. no competitive advantage. B. 28 . B.A resource is valuable and rare but neither difficult to imitate nor without substitutes. a temporary competitive advantage. psychographic uniqueness. causal ambiguity. D. and its reputation with its suppliers and customers. involves profitability ratios at a single point in time. reputation with suppliers and customers 230. its culture. liquidity ratios 234.227.Which of these categories of financial ratios is used to measure a company's ability to meet its short-term financial obligations? A. C. the liquidity position of a firm B. This should enable the firm to attain A. path dependency. Such competitive advantages are based upon A. market share growth D.Which of the following would be most difficult to assess? A.A variety of firm resources include interpersonal relations among managers in the firm. C. must go beyond the calculation and interpretation of financial ratios. social ambiguity. the legitimacy and reputation of a firm C. and substitutability C. Managers need to recognize tradeoffs in stakeholder demands and realize that such demands represent a "zero-sum" game in which one stakeholder will gain only at another's loss. fast but comprehensive C. D. ethical perspective 240. innovation and learning perspective D. financial analysis and stakeholder perspectives. C. D. Historical comparisons are often misleading A. customer perspective B.What are some of the key strengths and limitations of SWOT analysis? 29 . in periods of recession or economic boom. 237. B. B. if the overall strategy of the firm is the same. 239. 236. long-term financial 238. Managers should not look at their job as primarily balancing stakeholder demands. detailed and complex B.Historical comparisons provide information to managers about changes in a firm's competitive position.The "balanced scorecard" developed by Kaplan and Norton helps to integrate A. The key emphasis on customer satisfaction and financial goals are only a means to that end. simple and routine D. Compare the financial ratios of all firms in the country's industry—some of whom serve very diverse market segments and have specialized accordingly. C. C. B.The "balanced scorecard" provides top managers with a _____________ view of the business. if the firm shows constant growth. 241. Compare the firm's financial ratios over the most recent one-year period. Compare the firm's financial ratios with ratios of firms in other strategic groups in the industry.235. if the firm's stock is publicly traded. Compare the financial ratios of firms in the company's strategic group. internal perspective C. increasing satisfaction among multiple stakeholders can be achieved simultaneously.How should managers assess changes in their firm's competitive position in their industries during a period of unusual economic growth? A. Gains in financial performance and customer satisfaction must often come at a cost of employee satisfaction. D. financial analysis and a firm's reputation. C.An important implication of the "balance scorecard" approach is that: A. D. B.The balanced scorecard enables managers to consider their business from all of the following perspectives except: A. A. intangible resources and operational measures. short-term perspectives and strategic positioning. The resource-based view (RBV) combines both the internal analysis of the firm and the external analysis of the environment.What are the key advantages of value chain analysis over SWOT analysis? 243.242.What are some ways in which a firm's general administration can help create (or enhance) competitive advantages? 245.How can a firm develop (or enhance) its advantages in the marketplace by having strong. 244. 30 . Discuss and provide examples. positive interrelationships among its value chain activities and those of its suppliers and customers? Provide an example. True False 252.The importance of intellectual capital has decreased in recent years.What are the benefits and limitations of making historical comparisons in analyzing a firm's performance? 248.Explain the four attributes that a resource must have to provide a firm with a sustainable competitive advantage.The more reliance a firm has on intellectual capital the closer its book value will be to its market value.246.What are the four perspectives that the "balanced scorecard" enables managers to evaluate their business? 249. True False 251. For this reason.What are some of the most important implications of using the "balanced scorecard" approach? 250. 247. many firms have placed greater attention on attracting but not on developing or retaining talent.According to the text. True False 31 . Xerox is well known for its excellent use of human capital. Creation of new knowledge typically involves the continual interaction of explicit and tacit knowledge. True False 262. True False 263.Companies have found that referrals from their own employees are generally an ineffective approach to recruiting top talent." True False 258.BC Biomedical missed out on being named one of Canada's "Best Employers" for the third year running.Canadian steel company Dofasco invests time and resources in developing new employees because it expects them to stay for most of their working life.The "cascade approach" described in the text is one of the important ways of developing human capital.The most effective method of improving a firm's retention of top talent is to intensify its hiring efforts. True False 256.Human capital consists of the "individual capabilities.360-degree evaluation and feedback systems address many of the limitations of traditional approaches of evaluating human capital. True False 254. True False 257.Attracting top talent is a challenge of many organizations. True False 32 . True False 255. True False 261. True False 265. True False 260.In most effective evaluation and reward systems employees only receive evaluation and feedback from their immediate supervisor.Technical skills are a necessary and sufficient condition for hiring an employee.253. In today's economy.Knowledge workers are more loyal to their companies than traditional workers. True False 259. True False 264. knowledge workers typically have multiple possible employment opportunities.Writers have defined intellectual capital as the difference between the market value and book value of a firm. True False 277.Rather than focus solely on financial considerations.266.Social capital is found in the knowledge.The use of email can be distracting to employees when they use it excessively or for personal reasons. True False 267. Money is the top reason why such employees take and leave jobs. True False 275.Patents typically provide long-term protection for a firm since they do not expire.Protecting a firm's intellectual capital requires a concerted effort. True False 268. software) is developed and paid for it can be used many times at very low cost as long as it doesn't have to be substantially modified each time.g. in an attempt to retain employees.Once a knowledge asset (e. True False 33 . These may include on-site stores. True False 272.CIBC Canada. ATMs and athletic facilities..Social capital is based on the network of relationships within a firm. True False 270. True False 274. and abilities of individual employees. not in the skills and abilities of an individual employee. True False 276. skills. many firms offer attractive benefits to entice employees to stay. True False 271. True False 269. offers emergency babysitting services to ALL employees across Canada.One possible negative outcome of building social capital in an organization is "groupthink"—a tendency not to question shared beliefs.Developing social capital is risky for an organization because social capital is specific to individuals and remains with the employee if he or she leaves the organization. True False 273.The text suggests that talented professionals are typically most concerned about financial rewards.Many firms attempt to codify the tacit knowledge of employees in an effort to retain that knowledge after the employee leaves the firm. the output from assembly line employees.Human capital includes A. $5 in production costs cut. he did not have the skills required for the job. tangible resources to intangible resources. One example of this is the relatively short tenure of CEO Rich Thoman. an individual's capabilities. C. be smaller than C. and skills. Human capital C. fixed capital to working capital. cultivate the creative potential of its workforce. intangible resources to tangible resources. D. B.Canadian steel company Dofasco found that every dollar spent on training returns A. B. if a large portion of a firm's value is in intellectual and human assets. D. intellectual capital. One of the main reasons he was fired is that A. B. B. $30 in productivity gains over the following three years.278. A. the relationships between people. Magna's strategy is to A.In the knowledge economy. 279. all of the answers are correct 34 . 5 years of savings. C. allocate 10% of pre-tax profits to employees. an improved product. C.In terms of retaining human capital. D. distribute 6% of profits to senior managers. 283. Emotional capital 285.As the competitive environment changes. knowledge. D. social capital.Xerox is a company that is known for its inability to leverage human capital. Xerox diversified into too many unrelated businesses. working capital to fixed capital. D. $10. Physical capital B. Recently strategic management has moved from focusing on A.____________ includes creativity and problem solving ability. not be correlated with 282. all of the answers are correct 281. 280. strategic management must focus on different aspects of the organization. be equal to B. he did not have inside connections like other board members and executives had.000 in daily expenses. B. Social capital D. C. 284. D. knowledge workers. be larger than D. B. A. C.Changes in our economy have forced firms to be more concerned with protecting their A. Xerox became known for being too "loosely" organized. the difference between the company's market value and book value should ___________ a company with mostly physical and financial assets. C. adopt effective retention strategies. by recruiting talented individuals from the best research institutions D. Firms experiencing high turnover should A. increasing retention of below-average workers. A. decreasing labour costs. 35 . is found mostly at the lower levels of the organization. D.Attracting and retaining human capital is a challenge for many firms today. 291.According to the textbook. D. A.BC Biomedical. remained the same D. a knowledge worker's loyalty to his or her employing firm has _____________ compared to his or her loyalty to his or her profession and colleagues. tacit. tacit 288. detailed. B. B.Tacit knowledge A. practical C. no correlation when 290. 287. C. is the same as explicit knowledge. C. explicit D.Recently. B. attracting and retaining knowledgeable workers. B. decrease money spent on human capital. intellectual. 292.286. many firms try to protect their human capital and diversify the ownership of their vital knowledge by all of the following means except: A. C. "top down" organization. pyramid organization. flat organization. intellectual capital is the difference between the market value and the book value of a firm. Intellectual capital can be increased by A.New knowledge involves the continual interaction between ________________ and ___________ knowledge.According to the text. by developing learning programs C. C. focus on increased recruiting. "bottom up" organization. can be accessed only with the consent of the employees because it is in the minds of the employees. increasing the turnover of employees. emphasizing teamwork B. make their work environment less stimulating. which has been named one of Canada's "Best Employers" attributes their success to having a A. theoretical. D. pragmatic B. can be codified but not reproduced. increased B. decreased C. by shackling employees with "golden handcuffs" 289. in developed countries. D. C. decreased.Maintaining a competitive workforce is very challenging in today's economy. The best way for a firm to manage their workforce is to A. establish practices that will enhance employee retention. 36 . none of the answers are correct 299. weed out less effective employees. offering additional work/life balance days to each employee. D. rotate workers through functions in the company as quickly as possible. developing a flat organization. Whirlpool Canada dealt with conflicting demands of family and work by A. academic accomplishments. C. paying 6% of profits to senior managers.The "cascade approach" is used by managers as a tool for A. it is less expensive than the fees paid to headhunters. D. C. D. developing human capital. refrain from training individual employees. an industrial psychologist. in recent years. it is a good test of employee loyalty. 294. 295. and retention of top talent. 296. increased. the individual's IQ.According to Alan Davidson. attracting and developing social capital. B. D. The role of evaluating human capital. balance efforts in the attraction. past behaviour. 297. C. B. B. current employees are normally very careful in recommending someone because their credibility is on the line.Many companies use referrals by current employees as a source for new hiring and even monetarily reward them because A. D. B.Firms must compete for top talent. the single best predictor of an employee's future behaviour is A. D. standardized test scores.In order to take advantage of investment in human capital a firm should A. paying for daycare at all offices across Canada. it is less expensive than the fees paid to headhunters and current employees are normally very careful in recommending someone because their credibility is on the line. B. C.293. retain knowledge workers. become less important.Managing a knowledge-intensive workforce is very challenging. selection. D. attracting intellectual capital. C. C. 298. B. remained the same. attract the brightest employees. has A. retaining production workers. B. 304. strategically competitive hiring. This can be accomplished through the use of A. the firm may exploit this by building social capital. If a firm has strong human capital.Generally. one-on-one conversations. D. In general. ______________ rate a person's skill and performance. social capital. the organization's mission and values align with the employee's mission and values. C.Sharing knowledge within an organization helps to build social capital. B." C. all of the answers are correct 303.Social capital is a source of strength to many firms. a firm's allocation of financial resources. B. A. This can be accomplished by A. the relationships among a firm's employees. 302. 306. B. Waterloo-based Open Text's Livelink which enables employees to share documents. an individual's knowledge. an employee's individual abilities." B. structuring the firm with rigid departmental and employee divisions. the "Pied Piper effect. the employer provides high salaries to technology professionals. Firms leverage their social capital in an effort to create competitive advantages. the "Columbus effect. employees are most likely to stay with an organization if A. firms may attract the symbolic leader of a group within a competing firm and hope others will follow.Many Microsoft employees have left to start other companies. encouraging the sharing of ideas between employees in the firm. intellectual capital.300. This has been termed A. C. 305. C. D. all of the answers are correct 37 . the "tech exit" effect. all of the answers are correct 301. decreasing the interaction of departments within the firm. requiring workers to work independently of each other. when such employees leave. the mission and values of the organization change often. D. C. the firm is in a high tech industry. human capital.Human capital and social capital are vital for superior firm performance. email. B. they take with them A. superiors B. D.In a 360-degree evaluation and feedback system. direct reports C.In an effort to capture key employees from competitors. C. D. D. B. colleagues D. A firm's social capital is based on A. B. D. C. C. However. D. 311. D. CEO of Context Integration. high upfront costs and low variable costs. zero marginal gains.e. restrict social network growth.. high social capital may breed "groupthink. high upfront costs and subsequent high variable costs.The creation of knowledge assets is typically characterized by A. make more effective use of time in every situation. D. always hurts firm performance. 313. a tendency not to question shared beliefs and socialization processes whereby individuals are socialized into the norms and values of the organization may become expensive.e. competencies. create smaller social networks. assets. 308. knowledge. After the program was unveiled few people were motivated to use it. C. a tendency not to question shared beliefs. B.. according to the text. B. may or may not be beneficial to a firm. high fixed costs and high variable costs. some argue that social capital A.g. conceptual roots going back centuries. all of the answers are correct 312. email) has increased in recent years in many organizations. individuals may become less willing to collaborate on joint projects. consultants not seeing value in the software. B. all of the answers are correct 38 . D. is always beneficial to a firm..Effective protection of intellectual property is necessary in order to obtain A. 309. financial investment in an undertaking. invested half a million dollars in a software package to help his consultants share their ideas.The use of information technology (e.Among the downsides of social capital is/are A. D. high social capital may breed "groupthink. consultants being protective of their ideas." i. D. C. low upfront costs and high variable costs." i.Social capital has many potential benefits. the software not being a part of the company's culture. This has helped to A. 310. This may have been caused by A. B. socialization processes whereby individuals are socialized into the norms and values of the organization may become expensive. B.The capacity to build and protect competitive advantage rests on A. C.Bruce Strong. diminishing returns. C. usually restricts the productivity of employees. increase social capital.307. C. B. training. 317.In an effort to attract and retain top talent.Discuss the adage "hire for attitude. train for skill. Give examples of each and describe how the incentives you have chosen may impact individual employees. and retention of top talent? 318." What are its implications for the attraction.314.Discuss the attributes of human capital.What is intellectual capital and what is its effect on the ratio of a firm's market value to book value? 315.Why is the management of knowledge and knowledge professionals so critical in today's organizations? 316. Give examples of how firms work to develop and retain it. 39 . firms provide financial and nonfinancial rewards to their employees. training.To generate above average returns. patent troll firm NTP. True False 322.A firm striving for cost leadership will typically spend relatively more on product-related R&D than on process-related R&D.319.Michael Porter's three generic strategies can be depicted on two dimensions: competitive advantage and product life cycle.The focus strategy refers to focusing on the "non-price" attributes of a company's products.Colt is a Canadian success story that began in the 1950s in New Hampshire and Quebec. True False 40 . True False 324. True False 325.Discuss how technology has impacted the attraction. True False 327.Discuss the current situation of RIM and its context with U. How has technology helped firms to enhance their human capital and social capital? 320. and retention of professionals.The experience curve concept suggests that production costs tend to decrease as production increases regardless of where an industry is at in its life cycle. True False 323. 321. True False 326.Concentrating solely on one form of competitive advantage generally leads to the highest possible level of profitability.S. a firm following an overall cost leadership position should not be concerned with attaining parity or proximity on the basis of differentiation relative to its peers. True False 334. True False 330. it is not necessary to attain parity on cost. True False 337. True False 41 .Firms that compete on overall cost are vulnerable if all rivals share a common input or raw material that contributes a significant amount to total costs.328. differentiation still exists for all. by itself.One of the advantages of high differentiation is that even if many competitors follow the same strategy. True False 335.If a firm has a successful differentiation strategy. True False 338. often constitutes a competitive advantage.The example of Lexus automobiles in the text points out that a firm can strengthen its differentiation strategy by achieving integration at multiple points along the value chain. True False 333. True False 331.A successful differentiation strategy increases rivalry since buyers become more price-sensitive.Focus. True False 336.Creating a niche by differentiating one's product or service often allows small firms to compete successfully with market leaders.Mass customization enables manufacturers to be more responsive to customer demands for high quality products. True False 332.One pitfall of a differentiation strategy is that a brand's identification in the marketplace may become diluted through excessive product line extensions.A successful differentiation strategy lowers entry barriers because of customer loyalty and the firm's ability to provide uniqueness in its products and services.A pitfall of a focus strategy is that focusers can become too focused to satisfy buyer needs.A disadvantage of firms that successfully integrate overall cost leadership and differentiation strategies is that they are relatively easy for competitors to imitate. True False 339. True False 329. True False 344. True False 345.As markets mature.Many firms facing a turnaround situation try to reduce their costs by outsourcing the production of many inputs. True False 42 .During the growth stage of the market life cycle. True False 351.An important idea behind the "profit pool" concept is that there is always a strong relationship between the generation of revenues and the capturing of profits.An important advantage of first movers in a market is that they may establish brand recognition that may later serve as an important switching cost. while hoping that competitors will exit the market. True False 341.Many firms in the maturity stage of the life cycle bring about their own decline by selective product and market pruning. True False 348." True False 342. or other investments. competition on the basis of differentiation is preferable to price competition. True False 347.An important pitfall of an integrated overall cost leadership and differentiation strategy is that firms may fail to implement either one and become "stuck-in-the-middle.340.Given the attractiveness of premium pricing during the growth stage of the market life cycle. True False 343.The market life cycle should be used as a short-run forecasting device because it provides a conceptual framework for understanding what changes typically occur. the magnitude of differentiation and cost leadership advantages among competitors decrease.As markets mature.Businesses that compete in markets that are in decline should simply be harvested or divested since they are no longer profitable. technological development. customers are very likely to establish brand loyalty. managers should emphasize short-term results to increase profits.During the decline stage of the product life cycle. a harvesting strategy means that a firm keeps a product going without significantly reducing marketing support. True False 350. True False 346. True False 349. True False 353.The opening case of Cott beverages explains how this company A. stuck-in-the-middle 43 . Attempts to stay ahead of the competition may lead to gold plating. maximizing risk-return tradeoffs through diversification. Normal profits are A.S.Which of the following is a risk (or pitfall) of cost leadership? A. overall cost leadership B. maximizing differentiation of products and/or services. cost leadership focus 357. differentiation focus D. Cost differences increase as the market matures. 359. Cost cutting may lead to the loss of desirable features. D. D. B. differentiation focus D. and the ability to better withstand cost increases from suppliers characterize which type of competitive strategy? A. C. differentiation B. B. C. B. differentiation C. all of the answers are correct 354.A manufacturing business pursuing cost leadership will likely A. what one would receive on U. achieving a low cost position. B.Convincing rivals not to enter a price war.The primary aim of strategic management at the business level is A.Primary value chain activities that involve the effective layout of receiving dock operations (inbound logistics) and support value chain activities that include expertise in process engineering (technology development) characterize what generic strategy? A. secured a long-term agreement with RC Cola. D. D. C. businesses without a competitive advantage are unlikely to earn more than "normal" profits. Producers are more able to withstand increases in suppliers' cost. D. Treasury securities. B.In the long run.352. profits one would expect to earn on investments that have a similar level of risk. 356. profits received by corporations in the normal course of business.The decline stage of the industry life cycle stage is inevitably followed by death. built success from selling private label products to Loblaw. achieving competitive advantage(s). use advertising to build brand image. C. put heavy emphasis on product engineering. 358. C. profits earned by a corporation on a diversified portfolio of stocks. eliminated marketing and distribution costs by adopting the retailer's brand. focus on a narrow market segment. overall cost leadership C. 355. protection from customer pressure to lower prices. rely on experience effects to raise efficiency. 360.Which of the following is a good example of a firm that follows the strategy of differentiation? A. North Face B. Holt Renfrew C. President's Choice D. all of the answers are correct 361.The experience curve suggests that cutting prices is a good strategy A. if it can induce greater demand and thereby help a firm travel down the experience curve faster. B. in industries characterized by high economies of scale. C. in the maturity stage of the industry life cycle. D. in the decline stage of the industry life cycle. 362.A firm can achieve differentiation through all of the following means except A. improving brand image. B. better customer service. C. offering lower prices to frequent customers. D. adding additional product features. 363.High product differentiation is generally accompanied by A. higher market share. B. decreased emphasis on competition based on price. C. higher profit margins and lower costs. D. significant economies of scale. 364.Support value chain activities that involve excellent applications engineering support (technology development) and facilities that promote a positive firm image (firm infrastructure) characterize what generic strategy? A. differentiation B. overall cost leadership C. differentiation focus D. stuck-in-the middle 365.Which of the following is false regarding how a differentiation strategy can help a firm to improve its competitive position vis à vis Porter's five forces? A. By increasing a firm's margins, it avoids the need for a low cost position. B. It helps a firm to deal with supplier power and reduces buyer power since buyers lack comparable alternatives. C. Supplier power is increased because suppliers will be able to charge higher prices for their inputs. D. Firms will enjoy high customer loyalty, thus experiencing less threat from substitutes than its competitors. 366.Developing uniqueness that is not valuable is A. an essential feature of a differentiation strategy. B. the result of having brand-loyal customers become more sensitive to prices. C. a potential pitfall of a differentiation strategy. D. an necessary evil of a cost-leadership strategy. 44 367.Staples Business Depot's strategy in Canada is to deliberately limit its product selection for the purpose of A. focusing on quality. B. focusing on quantity. C. shedding customers. D. building the brand. 368.The Keg Steakhouse has a simple operating formula. The Keg A. purposefully limited its menu and has stayed away from food fashions and fads. B. expanded its menu and embraced food fashions and fads. C. cut expenses from suppliers. D. purposefully limited its menu and has stayed away from food fashions and fads and cut expenses from suppliers. 369.A firm following a focus strategy A. must focus on governmental regulations. B. must focus on a market segment or group of segments. C. must focus on the rising cost of inputs. D. must avoid entering international markets. 370.All of the following are potential pitfalls of a focus strategy except A. erosion of cost advantages within the narrow segment. B. all rivals share a common input or raw material. C. even product and service offerings that are highly focused are subject to competition from new entrants and from imitation. D. focusers can become too focused to satisfy buyer needs. 371.Research has consistently shown that firms that achieve both cost and differentiation advantages tend to perform A. at about the same level as firms that achieve either cost or differentiation advantages. B. about the same as firms that are "stuck-in-the-middle." C. lower than firms that achieve differentiation advantages but higher than firms that achieve cost advantages. D. higher than firms that achieve either a cost or a differentiation advantage. 372.The text discusses three approaches to combining overall cost leadership and differentiation competitive advantages. These are the following except A. automated and flexible manufacturing systems. B. exploiting the profit pool concept for competitive advantage. C. coordinating the "extended" value chain by way of information technology. D. deriving benefits from highly focused and high technology markets. 373.A ____________ can be defined as the total profits in an industry at all points along the industry's value chain. A. profit maximizer B. revenue enhancer C. profit pool D. profit outsourcing 45 374.All of the following are potential pitfalls of an integrated overall low cost and differentiation strategy except: A. firms that fail to attain both strategies may end up with neither and become "stuck-in-the-middle." B. targeting too large a market that causes unit costs to increase. C. underestimating the challenges and expenses associated with coordinating value-creating activities in the extended value chain. D. miscalculating sources of revenue and profit pools in the firm's industry. 375.Which of these statements regarding the market life cycle is correct? A. Part of the power of the market life cycle is its ability to serve as a short-run forecasting device. B. Trends suggested by the market life cycle model are generally not reversible nor repeatable. C. It provides a "shorthand" for thinking about differences in strategic situations. D. It points out the need to maintain a differentiation advantage and a low cost advantage simultaneously. 376.Which of the following statements about the introduction stage of the market life cycle is true? A. It produces relatively large, positive cash flows. B. Strong brand recognition seldom serves as an important switching cost. C. Market share gains by pioneers are usually easily sustained for many years. D. Products or services offered by pioneers may be perceived as differentiated simply because they are new. 377.In the ______ stage of the industry life cycle, the emphasis on product design is very high, the intensity of competition is low, and the market growth rate is low. A. introduction B. growth C. maturity D. decline 378.Which of the following descriptions of a product in the growth stage is true? A. There are few forms of differentiation, emphasis is placed on efficiency, and there is a growing trend to compete on the basis of price. B. There is an emphasis on product variety, prices are declining rapidly, and although the firm may be making a profit, cash flows may be negative. C. There is an obsolescence of technologies, minimal capital investment is required, and consumer demand is satiated. D. There is a tendency to hold on to competitive advantages, pricing can be volatile, and there is an opportunity to establish strong brand recognition. 379.The growth market is characterized by A. "in-kind" competition (from the same type of product). B. premium pricing. C. a growing trend to compete on the basis of price. D. retaliation by competitors whose customers are stolen. 380.Which of the following is considered an accurate statement for a product in the growth period of its life cycle? A. It is difficult to gain market share in growth markets. B. There is more price pressure in growth markets. C. It is easier to develop technology in the growth phase. D. Customers are brand loyal in the growth phase. 46 381.In the _______ stage of the industry life cycle, there are many segments, competition is very intense, and the emphasis on process design is high. A. introduction B. growth C. maturity D. decline 382.In a given market, key technology no longer has patent protection, experience is not an advantage, and there is a growing need to compete on price. What stage of its life cycle is the market in? A. introduction B. growth C. maturity D. decline 383.A market that mainly competes on the basis of price and has stagnant growth is characteristic of what life cycle stage? A. introduction B. growth C. maturity D. decline 384.As markets mature, firms should attempt to compete on the basis of _______. A. quick response B. differentiation C. cost leadership D. market focus 385.The size of pricing and differentiation advantages between competitors decreases in which stage of the market life cycle? A. introduction B. growth C. maturity D. decline 386.Which of the following is most often true of mature markets? A. Some competitors enjoy a significant operating advantage due to increasing experience effects. B. The market supports premium pricing, which attracts additional competitors. C. Advantages that cannot be duplicated by other competitors are difficult to achieve. D. The magnitude of pricing differences and product differentiation is larger than in the growth stage. 387.In the _________ stage of the industry life cycle, there are few segments, the emphasis on process design is low, and the major functional areas of concern are general management and finance. A. introduction B. growth C. maturity D. decline 47 Discuss how a competitive advantage can be attained through cost leadership using the value chain concept. selective product and market pruning. 390. benchmarking.The most likely time to pursue a harvest strategy is in a situation of A. C. D. increased capacity utilization. global expansion. B. D.Explain how a differentiation strategy enables a business to address the five competitive forces in such a way that it can enjoy high levels of profitability. D. piecemeal productivity improvements. 48 .Use the value chain as a framework to explain how the competitive advantage of differentiation can create products and/or services that are highly valued by customers.Research shows that the following are all strategies used by firms engaged in successful turnarounds except A. strong competitive advantage. B. expansion of a firm's product market scope. asset and cost surgery. 393.Piecemeal productivity improvements during a turnaround typically does not involve A. business process reengineering. 389. C. 392. C. 391. high growth. B. decline in the market life cycle.388. mergers and acquisitions. A newly acquired business must always have products that are similar to the existing businesses' products to benefit from the corporation's core competence. 398. 396. harvesting. consolidating—associated with the decline stage of the market life cycle.Discuss the risks associated with each of these forms of competitive advantage—cost leadership.394.Sharing activities across business units can provide two primary benefits: cost savings and revenue enhancements. 395. differentiation and focus. True False 399. True False 49 .Briefly explain the advantages and limitations of the four alternatives—maintaining.What are the benefits and risks associated with combining overall cost leadership and differentiation strategies? 397.Explain how a cost leadership strategy permits a firm to address the five forces in their competitive environment so it can enjoy higher-than-normal profits. exiting. Portfolio management should be considered as the primary basis for formulating corporate-level strategies. True False 408. True False 402.Acquisition of two or more counter-cyclical businesses is an example of using diversification to reduce risk.The two principal means by which firms achieve synergy through market power are: pooled negotiating power and corporate parenting.A publishing company that purchases a chain of bookstores to sell its books is an example of unrelated diversification.Similar businesses working together or the affiliation of a business with a strong parent can strengthen a firm's bargaining position relative to suppliers and customers.An advantage of mergers and acquisitions is that they can enable a firm to rapidly enter new product markets. True False 409. positive change.Restructuring requires the corporate office to find either poorly performing firms with unrealized potential or firms in industries on the threshold of significant.Through joint ventures. True False 403. the two main sources of synergy in unrelated diversification are parenting and financial synergies. True False 406.One of the risks of vertical integration is that there may be problems associated with unbalanced capacities or unfilled demands along a firm's value chain. True False 407. True False 404. True False 411.Vertical integration is attractive when market transaction costs are higher than internal administrative costs. True False 410.According to the text.Portfolio management matrices generally consist of two axes that reflect industry or market growth and the market share of a business. True False 401. True False 50 . firms can directly acquire the assets and competencies of other firms.400. True False 405. D. even if the products are very different. C. what businesses to compete in.Sharing core competencies is one of the primary potential advantages of diversification. True False 419. how to improve a firm's infrastructure. True False 416.A golden parachute is a prearranged contract with managers specifying that in the event of a hostile takeover. C. True False 413. The new business must be similar to existing businesses to benefit from a core competence. D. Which one of the following is not one of these requirements? A. True False 415.Corporate-level strategy addresses two related issues: A. how these businesses can achieve synergy. B. The collection of competencies should be unique. there are three requirements. the target firm's managers will be paid a significant severance package. threatened by takeover.Upon the acquisition of Microcell. to offer its stock at a reduced price to a third party.Greenmail is an offer by a company. B. not in the product. True False 417. 51 . True False 418. reliance on written contracts to delimit responsibilities and enforce compliance is vital. C. Rogers was able to immediately obtain savings. In order for diversification to be most successful. the similarity required for sharing core competencies must be in the value chain. the methods of production are the same. True False 414. how to increase shareholder wealth.An advantage of internal development is that firms do not have to combine activities across the value chains of many companies and merge company cultures. The new business must have an established large market share. D. 421. how to maintain ethical behaviour.For strategic alliances to be effective.The potential advantages of strategic alliances and joint ventures include entering new markets as well as developing and diffusing new technologies.For a core competence to be a viable basis for the corporation strengthening a new business unit. The competence must help the business gain strength relative to its competition.412. how to integrate primary activities. so that they cannot be easily imitated.Real options analysis helps managers make investment decisions involving large irreversible commitments of financial resources. B. the application of technology. the products use similar distribution channels. the target market is the same. 420. it is important that A. how to compete in a given business. providing a more stationary position in the competitive environment. sharing activities. difficulties in combining specializations. B. lower transaction costs and improved coordination are vital and achievable through vertical integration. D.It may be advantageous to vertically integrate when A. B. B.A firm should consider vertical integration when A. horizontal integration. D. negotiating costs. the firm's suppliers of raw materials are often unable to maintain quality standards. D. customer needs are evolving.Unbalanced capacities that limit cost savings. Primary value chain activities B.When management uses common production facilities or purchasing procedures to distribute different but related products. additional administrative costs associated with managing a more complex set of activities increased. monitoring costs. problems developed with unbalanced capacities along the value chain. D. instantly gained broader market coverage and better reception for their phones. they are A. agency costs. and market and merchandise diverse products and services. C. 423. and reduced flexibility are disadvantages associated with A. A.When Rogers acquired Microcell. D. 427. 425. Cultures C. the clients of Fido. search costs.Transaction costs include all of the following costs except A. transaction costs are higher than internal administrative costs. divestment. B. using portfolio analysis. C. flexibility is reduced.Vertical integration is attractive when A. C. achieving process gains. search costs are higher than monitoring costs. 429. strategic alliances. the firm's suppliers willingly cooperate with the firm. building on core competencies. integrate multiple streams of technologies. the competitive situation is highly volatile. costs and associated expenses increased with expanded overhead and capital expenditures. D. 426. C. transaction costs and internal administrative costs are equal.__________ reflect the collective learning in organizations such as how to coordinate production skills. B. the minimum efficient scales of two corporations are different. Microcell's brand name A. 428. D. C. 52 . Core competencies D. C. C. vertical integration. B. internal administrative costs are higher than transaction costs. B.422. Horizontal integrations 424. various segregated specializations will be combined. Portfolio management matrices are applied to what level of strategy? A. D. C. 434. vertical integration. question mark. star. Parenting B. Restructuring C.430. competition from Japan. cash cow. horizontal integration. 435. C.When using a BCG matrix. substantial cash outlays to maintain market share. B. positive change.According to the text. B. Position in the matrix suggests a need for._______ is when a firm tries to find and acquire either poorly performing firms with unrealized potential or firms in industries on the threshold of significant. or ability to share. departmental B. corporate D. B. a business that has a low market share in an industry characterized by high market growth is termed a A. problem child.. B.Portfolio management frameworks (e. continuing consolidation in the global beer industry. B. cow. D. Canfor Corporation of Vancouver is a good example from the forest industry of having followed a successful strategy. infrastructures or build on core competences. Leveraging core competencies D. capital restructuring. 436. Businesses are plotted on a 3-dimensional grid. of A. 432. C. D. international 433. D. They are most helpful in helping businesses develop types of competitive advantage.Molson of Montreal and Coors of Colorado merged their operations in order to stand up to A. A. D. Grid dimensions are based on external environments and internal capabilities/market positions. C. and technology restructuring. asset restructuring.In the BCG (Boston Consulting Group) Matrix. a business that currently holds a large market share in a rapidly growing market and that has minimal or negative cash flow would be known as a A. Sharing activities 431. star. dog. continued diversification in the beverage market. dog. to expand across markets.g. business C. C. BCG matrix) share which of the following characteristics? A. 53 . working hard to ensure a collaborative relationship between partners. D. but not the right to engage in a transaction. C. Firms can often develop products or services at a lower cost if they rely on their own resources instead of external funding. An advantage of internal development is that it is generally faster than other means of diversification and firms can benefit from speed in developing new products and services. difficulties in integrating the activities and resources of the acquired firm into a corporation's on-going operations. joint diversification. there can be many cultural issues that can doom an otherwise promising acquisition. the total investment required is small. reducing manufacturing (or other) costs in the value chain.Which of the following statements regarding internal development as a means of diversification is false? A. but not the obligation to engage in a transaction. D. not shortchanging your partner.Cooperative relationships such as _______ have potential advantages such as entering new markets. C. D. 54 . divestment. C. 443. 441. mergers and acquisitions C. C. The firm is able to capture the wealth created without having to "share the wealth" with alliance partners. neither the right nor the obligation to engage in a transaction.437. B. D. the right and obligation to engage in a transaction. joint ventures B. the right. there is no prospect of obtaining additional knowledge before making subsequent investments. B. the investment required can be justified by Discounted Cash Flow (DCF) techniques. D.Real options analysis is most appropriate when A. Many companies use internal development to extend their product lines or add to their service offerings. This is an example of A. strategic alliances D. 438. with a strong presence in Ontario and Western Canada.Loblaw. C. B. B. and developing and diffusing new technologies. B. A. it is a slow means to enter new markets and acquire skills and competences. global integration. 440. 442. acquiring Provigo. D.The downsides or limitations of mergers and acquisitions include all of the following except A. but the environment is uncertain.Options exist when the owner of the option has A. a small investment upfront can be followed by a series of subsequent investments. joint ventures and strategic alliances 439. C.A company offering local telecommunications service combines resources with an international company that manufactures digital switching equipment to research a new type of telecommunications technology. B. strategic alliance. the obligation. expensive premiums that are frequently paid to acquire a business. establishing a clear understanding between partners. gained a footprint into the Quebec market by A. greenmail. B. managers of a firm involved in a hostile takeover approaching a third party about making the acquisition. D. A. 446. C. D. poison pill. golden parachute. 448.What are the primary benefits and risks associated with unrelated diversification? 55 . C.When Canadian family-controlled firm Schneider's wanted to block Maple Leaf Foods. golden parachute B. D. poison pill D. a clause requiring that huge dividend payments be made upon takeover. 447. C. B.The term "golden parachute" refers to A.444. greenmail C.What are the primary benefits and risks associated with related diversification? 449. B. prohibited in Canada.An antitakeover tactic called greenmail is A. pay given to executives fired because of a takeover.An antitakeover tactic called (a) ___________ is when a firm offers to buy shares of their stock from a company planning to acquire their firm at a higher price than the unfriendly company paid for it. only allowed in Quebec. they looked to Springfield as a A. financial inducements offered by a threatened firm to stop a hostile suitor from acquiring it. encouraged in Canada. white knight. borrowed from NAFTA. scorched earth 445. 450. 453.Explain the uses and limitations of portfolio management matrices such as the growth-share matrix developed by the Boston Consulting Group (BCG).Explain how transaction cost analysis can provide insights into vertical integration decisions.Briefly explain the advantages and disadvantages of vertical integration.What are some of the key issues to take into account when considering whether or not to vertically integrate? 452. 56 .Summarize the advantages and disadvantages of mergers and acquisitions as a means of diversification. 451. 454. Include in your discussion factors such as egotism. Discuss the advantages and disadvantages of strategic alliances as well as guidelines for reducing conflict between the partners.In Michael Porter's "diamond of competitive advantage. True False 460.The trend towards worldwide markets makes it easier to predict where competitors will spring up.Prior to Molson's investment in Brazil. This merger did not yield significant accomplishments.With regard to "factor conditions.Why is Real Options Analysis (ROA) becoming more popular with strategic decision makers? What kind of strategic decisions are most amenable to Real Options Analysis? 457. they had merged with Carling O'Keefe. True False 459.Discuss how the potential benefits of diversification may be adversely affected by conflicts between managers' interests and shareholders' interests. 456.Strategic alliances are arrangements in which two firms join forces and form a cooperative partnership. constitute a nation's competitiveness in an industry. True False 461. True False 57 ." the pool of resources that a firm (or nation) has is much more important than the speed and efficiency with which these resources are deployed. anti-takeover tactics.455. growth for growth's sake. 458." there are four broad attributes that. as a system. True False 469. True False 464. True False 473. True False 472. True False 58 . True False 470.An advantage of international expansion is that it can enable a firm to optimize the location of every activity in its value chain. and used the revenues for R&D.According to the text.Demanding domestic consumers tend to push firms to move ahead of companies in other countries where consumers are less demanding and more complacent.Many international firms are increasing their efforts to market their products and services to countries such as India and China as the ranks of their middle class continue to increase.Within a worldwide market.During the 1990s Nortel frequently sold its earlier generation telephone switches to developing countries at lower costs. intense rivalry in domestic markets does not force firms to look outside their national boundaries for new markets. True False 463. Canadian firms around the world were targets of animal rights groups who did not approve of seal hunting in Newfoundland.International expansion can extend the life cycle of a product that is in its maturity stage in a firm's home country.462. the most effective strategies are neither purely multidomestic nor purely global. True False 467.Differences in foreign markets such as culture. True False 466. True False 471.Typically.Two opposing pressures that managers face when they compete in foreign markets are cost reduction and adaptation to local markets.IMAX claims that every new theatre that opens somewhere in the world lowers the cost of production of its unique movies.Among Theodore Levitt's assumptions that would favour a global strategy is that consumers around the world are becoming less price-sensitive. True False 468. and customs can represent significant management risks when firms enter foreign markets. True False 465. language. True False 478.In a global strategy a firm operates all its businesses under a single common strategy regardless of location. True False 475.Industries in which proportionally more value is added in upstream activities are more likely to benefit from a global strategy than those in which more value is added downstream (closer to the customer).A multidomestic strategy is the most appropriate strategy for international operations because it drives economies of scale as far as possible and provides a middle-of-the-road product appealing to the largest number of consumers in every market. centralized production facilities to maximize economies of scale.A multidomestic strategy would likely include the use of high volume. True False 484. and learning.474.A franchise generally expires after a few years whereas a license is designed to last into perpetuity. local adaptation. True False 483.Multinational firms following a transnational strategy strive to optimize the tradeoffs associated with efficiency.Canadian steel company Dofasco looked at cultural challenges in expanding and decided to stick to its famous motto: "our strength is people".Typically. True False 480. True False 477.A key tenet of a transnational strategy is improved adaptation to all competitive situations as well as flexibility by capitalizing on communication and knowledge flows throughout the organization. True False 481. the best method of entry into a foreign market is the establishment of a wholly owned foreign subsidiary so that the parent organization can maintain a high level of control.To address the challenges of a multidomestic strategy.The need to attain economies of scale encourages multinational firms to operate under a multidomestic strategy. True False 476. Maple Leaf Foods customizes its prepared meats to meet local tastes. True False 59 . True False 485.Corporations with multiple foreign operations that act very independently of one another are following a multidomestic strategy. True False 479. True False 482. 60 . B. 489. dominated by U. a growing recognition of an international managerial perspective. 488. weak. B.486. England A. low 491. D.Microsoft decided to establish a corporate research laboratory in Cambridge. D. brewers. weak. 492. strong. more likely to demand protection from their governments. factor conditions. Department of Justice. C. to take advantage of the lower tax rates in Mexico. C. 493. C. C. as part of US government-initiated measures to discourage illegal immigration.At the time Molson invested into the Brazilian beer market in 2002.A major trend in international developments includes A. D. increased to fourth place. strong. firms that have experienced intense domestic competition are A.Many U. related and supported industries.Rivalry is intense in nations with conditions of ________ consumer demand. ___________ supplier bases. weak. to access the outstanding technical and professional talent available there so that they can attain world-class excellence in selected value-creating activities. B.In Michael Porter's framework all of the following factors affect a nation's competitiveness except A. increased to second place. the Brazilian market was A. weak. 490. B. because the local language is English. A. because the company views the United States as a risky place to expand due to the actions of the U. all of the answers are correct 487. most likely to design strategies aimed primarily at the domestic market. high D. B. because England is an ally of the United States. greater international trade and operations. a monopolistic situation. D. consolidated.Since Molson's investment in Kaiser in Brazil. demand characteristics. to take advantage of the low cost of labour. policies that protect the nation's domestic competitors. B. low C. a large increase in international investment. D. B. high B. that company's market share has A. strong. fallen to third place. and ____________ new entrant potential from related industries. C.S. strong. to sell products into the growing Mexican market. stayed the same.S.S. D. more likely to design strategies and structures that allow them to successfully compete abroad.According to Michael Porter. C. multinational companies set up maquiladora operations south of the US-Mexico border primarily A. unlikely to have the time or resources to compete abroad. D. fragmented. C. B. C. selling entertainment programs into the Korean market. Latin American customers wanted a focus on the product. the world's population exceeded 6 billion with Canada representing A. that compete in industries in which consumer preferences vary substantially in each country. Mexican workers like a "flat organization" with no supervision. B. slightly more than 5 percent C. in industries that are expanding very rapidly. Mexican workers typically expect more hierarchical structures and want managers to supervise. 496. B. Dofasco's motto "our strength is people" was a problem because A. 497. a company must pursue what is economically beneficial to the company including maximizing economies of scale and learning curve effects. D. international B. multidomestic D. If the world markets are treated as heterogeneous. Customer needs and interests are becoming more dissimilar. D. less than 3.494. global B. 498.Pressures to "reduce costs" require that A. less than . MNCs can compete with aggressive pricing on low cost products that meet the common needs of global consumers. multidomestic C. a company should not trade idiosyncratic preferences in product features for higher economic returns. overall cost leadership 61 . C. Consumers are willing to pay more for specific product features. C.2 million 495. 500.Low pressure for local adaptation combined with low pressure for lower costs would suggest what type of strategy? A.Lingo Media of Toronto was mentioned in Chapter Seven as being a good example of a small company A. D. global C. B. transnational 499. it did not translate into Spanish. penetrating the Chinese market for ESL teaching materials. D. substantial economies of scale are easily achieved.Which one of the following is one of Theodore Levitt's assumptions supporting a pure global strategy? A. C.5 percent B. the company needs to supplement the local foreign economy in a manner specified by the local government.High pressure for local adaptation combined with low pressure for lower costs would suggest what type of international strategy? A. transnational D.By the end of the 20th century. about 320 million D.When Dofasco approached the cultural differences of operating in Mexico. the manager should follow a multidomestic strategy to maximize the economic benefits to the company. decreasing duplication of inventories which are often involved in having multiple plants producing similar products.Elements of a multidomestic strategy may facilitate the competitive advantage of cost leadership by A. standardized. tailoring products to meet country-specific needs. several D. standardized. 506. offering flexibility in adjusting to local laws and customs. unique managerial challenges in fostering knowledge transfer D.All of the following are limitations of a global strategy except A. the creation of a worldwide network to achieve consistent service regardless of location.501. and marketing activities in _____________ locations. elements of a global strategy may facilitate the competitive advantage of differentiation by A. concentrating an activity in a single location makes the rest of the firm dependent on that location.All of the following are limitations of a multidomestic strategy except A. 504. R&D. economies of scale gained through centralized production of standardized products. greater difficulty in transferring knowledge across countries. C. less ability to realize cost savings through scale economies B. increasing the freedom of individual business units to adapt to local tastes.Firms following a global strategy strive to offer ______________ products and services as well as locate manufacturing. the concentration of activities may increase dependence on a single facility. a wide variety of.All of the following are risks associated with a global strategy except A. C. D.As in the case of Siebel Systems. C. B. B. decreasing shipping and transportation costs inherent in local production. limited ability to adapt to local markets C. the pressures for local adaptation may elevate the firm's cost structure. single locations may lead to higher tariffs and transportation costs. the geographic concentration of any activity may also tend to isolate that activity from the targeted markets. A. a wide variety of.Which of the following is a disadvantage of a transnational strategy? A. D. several B. D. B. C. the ability to locate activities in optimal locations. 505. few 502. B. a firm with only one manufacturing location must export its product—some of which may be a great distance from the operation. B. single locations may lead to higher tariffs and transportation costs. may lead to "overadaptation" as conditions change. few C. D. single locations may lead to higher tariffs and transportation costs 62 . 507. D. C. limited ability to adapt to local markets. 503. less ability to realize cost savings through scale economies. offering flexibility in applying R&D to meet country-specific needs. little local presence at home in Canada. 512. C. joint venture. C. a multidomestic strategy 510. D. franchising. exporting. pursue a strategy that combines the uniformity of a global strategy and the specificity of a multidomestic strategy in order to achieve optimal results. B.508. B. C.The form of entry strategy into international operations that offers the lowest level of control would be A. B. consider licensing or franchising its operations. 514. intra-corporate inflows. units adapt to special circumstances only they face. C. form a joint venture with a reputable foreign producer. These are all attributes of which type of strategy? A. franchising. and the entire organization draws upon relevant corporate resources. licensing. franchising. consider implementing a low risk/low control strategy such as exporting. start off by implementing a wholly owned foreign subsidiary so it can maintain standards identical to those at home. B. franchising. exporting.The text mentions Canadian firms Lingo Media and Hydrogenics as having directed all their efforts to overseas markets with A. and wholly owned subsidiary D. dividends. a transnational strategy C. an international strategy D. a franchise contract involves less control and less risk. B. attempt to use the strategy that was most successful in their home country. a franchise contract is more specific and usually longer in duration. require that all of their various business units follow the same strategy regardless of location. exporting. and wholly owned subsidiary B. D. joint venture. C. and wholly owned subsidiary 511. licensing.A domestic corporation considering expanding into international markets for the first time will typically A. D. D. a licensing contract covers more aspects of operations. transfer prices. exporting. licensing. a global strategy B. joint venture. a franchise contract must include a foreign government. 513. 63 . ensure that all business units follow a strategy strictly tailored to their respective locations. licensing. firms engaged in worldwide competition must A. D. and wholly owned subsidiary C.The difference between a franchise and licensing contract is that A. joint venture. licensing. exporting. joint venture.In order to realize the strongest competitive advantage.Which of the following describes the most typical order of entry into foreign markets? A. 509.Units coordinate their activities with headquarters and with one another. franchising. Explain Michael Porter's "diamond of national competitiveness.515. exporting 516. is a good example of expansion through A. A. 517. 519. licensing B. wholly owned subsidiary. Licensing agreements D. strategic alliance. Joint ventures B. Wholly owned subsidiaries 518. joint ventures D. joint venture. B.___________ are most appropriate where a firm already has the appropriate knowledge and capabilities that it can leverage rather easily through multiple locations in many countries. C. franchising C. franchising operation. D. 64 .Foreign direct investment includes the following form of entry strategy: A.The textbook's description of the international expansion of Edmonton-based engineering firm Stantec Inc." 520. Strategic alliances C.Discuss the importance of international expansion as a viable diversification strategy.Summarize the most important benefits and risks associated with diversification into global markets. respectively. cost reduction and local adaptation. it is unlikely that the Internet will have a positive impact on the economy in the long term. True False 65 . create pressures to operate with a global or multidomestic strategy. 522. True False 526.Because of the dot-com crash in 2000 and 2001.521.According to Theodore Levitt. 523. thousands of neighbourhood bookstores have disappeared and the industry has consolidated.With only a few exceptions such as Toronto's Book City. what are the three assumptions that favour the pursuit of a "pure" global strategy? Briefly provide counterarguments to each assumption.What are the major advantages and disadvantages of the six basic types of entry strategies for international expansion? 525.What are some of the primary benefits and risks of transnational strategies? 524.Explain how the two opposing forces facing MNC managers. Because of the Internet.Content such as entertainment programming does little to improve the value proposition of a website. True False 532. 44% of Canadians have tried e-commerce and most first-time buyers go back for more. True False 537. True False 530.Reintermediation is responsible for an overall reduction in business opportunities. and taking delivery. True False 536. True False 529. True False 531.Canadian mining company Goldcorp posted geological data online.Channel conflict occurs when buyers can access the same products through several different outlets.Most analysts agree that use of the Internet will lower transactions costs.Overall.527.The Internet suppresses the bargaining power of buyers by providing them with more information to make buying decisions. True False 535. True False 533. end users typically have greater bargaining power. allowing engineers around the world to give new insights as to any future potential. True False 539.The Internet has created a new climate for business in which the traditional principles of strategic management are less important. True False 534. True False 528.Because a large amount of consumer information is available via the Internet. making payments.Evaluation activities add value by helping firms finalize transactions including negotiating contracts.The Internet heightens the threat of substitutes because it creates new ways to accomplish the same tasks. True False 66 . it is very difficult for suppliers to create purchasing techniques that lower switching costs.An end user's switching costs are potentially much higher because of the Internet. True False 538. The only technology ever adopted by consumers more rapidly than the Internet was A. that has altered the structure of the American economy.A commission-based business model. contracting supply to small stores. not the technology itself. when applied to the Internet. C. True False 541.Incumbent firms that thought a niche market was too small to enter in the past may use Internet technologies to enter that segment and compete with focusers. Toronto Book City. True False 546. was able to survive industry consolidation by A. digital technologies. analog technologies. B.The Internet offers few advantages for focusers because niche players and small companies cannot implement Internet capabilities as effectively as their larger competitors. D.One way the Internet is creating opportunities for firms with differentiation strategies is by enabling mass customization. True False 543. True False 545. 548.Business models can be defined as methods companies use to create value and earn profits in a competitive environment. none of the answers are correct 67 . the telephone.The company in the opening case. television. 549. the automobile. C. B.Complete the following sentence: "It is the actual use of the Internet for profitable transactions. that is creating new business opportunities. D. B.Technologies that use information in the form of electronic signals or "bits" are called A. True False 544. C. is similar to the broadcast television model in which viewers watch shows produced with revenues from commission fees. D. developing a niche appealing to bibliophiles. that is making strategizing in the Internet economy less important. that matters to a company's bottom line. choosing a splendid Internet service provider. B. True False 542. ______________________________________________" A. 547. broadband. not the sustainability of competitive advantages.Many differentiation advantages are diminished by the Internet. using a human resources consultant. D. high fidelity technologies. C.540. 550. increases the threat of new entrants. The Internet isolates customers which makes differential pricing possible. the Internet 554. globalization B. Internet technologies cannot easily be imitated. larger.Which of the following is not one of the reasons why the bargaining power of buyers is increasing because of the Internet? A. all of the answers are correct 551. D.End users are A. institutional and regulatory barriers. B. the final consumers in a distribution channel. advances in wireless technology.According to the text. C. the types of industries that are likely to be most radically transformed by the Internet are A. older companies C. C. 553. usually the "C" in B2C. The Internet makes it easier for consumers to obtain the information needed to compare prices and make buying decisions. it A. C. D. information-intensive industries such as financial services. the Internet inhibits the ability of suppliers to offer highly differentiated products or services. strong vested interests. B. new entrants D. Internet purchasing practices are shifting emphasis to price competition which is making consumers less loyal. increases supplier power.Because the Internet lowers barriers to entry in most industries. likely to have greater bargaining power because of the Internet.All of the following factors are likely to be impediments to growth in Internet use except A. B.Goldcorp credits _________________ for allowing it to obtain insight as to how to re-open its Red Lake gold mine. all of the answers are correct 555. B. D. D. Internet technologies are making the cost of switching products or services lower. B. research-intensive industries such as pharmaceuticals. 68 . A. D. speed and extent of Internet connectivity.One of the greatest threats to supplier power that has emerged because of the Internet is A. D. C. makes it easier to build customer loyalty. 552. 556. decreases the threat of new entrants. manufacturing-intensive industries such as microprocessors. C. B. procurement technologies eliminate the need for suppliers. the cost of accessing business customers has increased. C. Which of the following is not one of the ways the Internet is lowering transaction costs? A. introduces new ways to accomplish the same tasks. bill-paying. reducing business travel 564. eliminating supply chain intermediaries B. disaggregation. problem-solving. lowers barriers to entry. the threat of substitutes is heightened because the Internet A.In general. D. transaction costs. evaluation. by shifting customers attention away from issues of price B. search.The creation of opportunities for new functions within the value chain is known as A. increases output per unit of cost. 558. and transaction. some suppliers have created Web-based purchasing systems that encourage switching. 563. low-cost ordering capabilities. 69 .Supplier power has increased because of the Internet for all of the following reasons except A. bill-paying. return. disintermediation. 560. B. outsourcing. The Internet has "commoditized" products that previously were regarded as rare or unique. lowers switching costs. channel conflict. B. D. C. by consolidating the marketing message that consumers use to make a purchase decision to a few key pieces of information that the selling company has little control over D. reintermediation. C. historical costs. D.Which of the following is not one of the reasons the Internet increases the intensity of competitive rivalry? A. and returning. B. B. C. evaluating. problem-solving. The Internet has eliminated the importance of location by making geographically distant products available online. 559. opportunity costs. D.How do infomediaries and consumer information websites increase the intensity of competitive rivalry? A. by making competitors in cyberspace seem less equally balanced C. C. operating expenses.The sum total of all expenses associated with conducting business are known as A. B. the process of disintermediation makes it possible for some suppliers to reach end users directly. C. B.Four Internet-based activities that are enhancing firms' capabilities to use the Internet to add value include: A. search. customizing. C. software that links buyers to a supplier's website has created rapid. D. the growth of new Web-based businesses has created more outlets for suppliers to sell to. repair. and delivery. The Internet has made it more difficult to imitate the advantages achieved by competitors. The Internet makes it more difficult for firms to differentiate themselves. rescue.557. minimizing office expenses D. evaluating employee performance C. by highlighting a firm's unique selling advantages 562. D. 561. Quick online responses to service requests and rapid feedback to customer surveys and product promotions are enhancing marketing efforts. exceptional service D. 567. reducing the costs of procurement and paper. B. celebrity endorsements B.Internet search activities include A. outline specific actions a firm needs to take to be profitable. mass customization. 568. is typically used in the context of providing unique services. C.All of the following are ways that Internet technologies are being used to enhance an overall cost leadership strategy except: A. considering alternatives. prescription-based D. 571. creates access to products' ratings and price comparisons. Direct access to progress reports and the ability for customers to periodically check work-in-progress is minimizing rework. collaborative design. subscription-based C. This capability is an example of A. D.Internet business models A. C. mass customization 70 . knowledge management. electronic data interchange. referral-based B. commission-based 569. gathering information. C. making payments and taking delivery. Online purchase orders are making many transactions paperless. 566. refers to comparing the costs and benefits of various options. B. C. B.Which of the following methods of implementing a differentiation strategy has been greatly enhanced because of Internet technologies? A. D. prestige packaging C.The value-adding activity known as problem-solving A. Online bidding and order processing are eliminating the need for sales calls and minimizing sales force expenses.565.Dell Computer has an online ordering system that allows consumers to configure their own computers before Dell builds them. C.Canadian financial firm TD Waterhouse was cited by the text as an example of a business model that is A. 570. B. D. outline methods that online businesses use to create value. D. cannot be combined to create additional competitive advantages. cannot be used by traditional businesses. involves streamlining operations. D. B. generating action plans. C. B.and medium-sized businesses A.572. B. 574. the rest are not.Among all Canadian small. C. C. access markets less expensively.Which of the following phrases best completes the sentence: Because of the Internet. B. Internet-based knowledge management systems that link all parts of the organization are shortening response times and accelerating organization learning. 576. D. incumbent firms are entering market segments that they previously considered to be too small. D.All of the following are ways that Internet technologies are being used to enhance a differentiation strategy except: A. in the Internet age. Niche portals that target specific groups are providing advertisers with access to viewers with specialized interests. 3. Online access to real-time sales and service information is being used to empower the sales force and continually update R&D and technology development efforts. provide more services and features. access niche markets in a highly specialized fashion. firms that use a focus strategy have new opportunities to ________________________________ A. many of the unique advantages that were the hallmark of success for differentiators can easily be imitated. D. D.All of the following are ways that Internet technologies are being used to enhance a focus strategy except: A. differentiators have been able to preserve the unique advantages that have always been the hallmark of their success.Combination strategies may work best for Internet competitors because. all of the answers are correct 71 . Automated procurement and payment systems provide both suppliers and customers with access to detailed status reports and purchasing histories. Procurement technologies that use Internet software to match buyers and sellers are highlighting specialized buyers and drawing attention to smaller suppliers. there are fewer rather than more opportunities for achieving sustainable advantages by using traditional competitive strategies. 34% are already relying on the Internet for part of their sales. D. Virtual organizing and online "officing" are being used to minimize firm infrastructure requirements and lower costs. respond quickly to customer requests. B. C. cost management and control systems will increase in importance as management tools that all companies can use. Human resources departments are using online testing and evaluation techniques in the hiring process and online training after they hire. B. A. Permission marketing techniques are focusing sales efforts on specific customers who opt to receive advertising notices. C.4% are making profits. 573. 575. Discuss some of the ways that digital technologies are changing how companies conduct business.Briefly explain the impact of the Internet and Internet technologies on the five competitive forces.577. 72 . 580.How has the Internet made the problem of channel conflict worse? Provide examples of companies that have used the Internet to sell goods without creating channel conflict. What is the role of the Internet in bringing about these digital technology-driven changes? 579.Discuss the reasons why the use of Internet technologies is more important to achieving competitive advantages than the technologies themselves. 578. Discuss the function of a business model and its role. evaluation. Provide examples of companies that exhibit each of these value-adding activities. advertising. in creating competitive advantages. based on commission. and fee-for-service.Explain the impact of the Internet on overall cost leadership strategies. Provide examples of companies that illustrate each of the seven Internet business models. problem-solving and transaction activities in helping firms use the Internet to add value.Briefly explain the role of search.Explain the impact of the Internet on differentiation strategies. if any. mark-up. What are the advantages and pitfalls associated with using the Internet to pursue a strategy of cost leadership? 584. referral. production. What are the advantages and pitfalls associated with using the Internet to pursue a strategy of differentiation? 73 . 583.581. subscription. 582. In a simple structure where the owner manager makes most of the important decisions.Explain the impact of the Internet on focus strategies.585. True False 589. What are the advantages and pitfalls associated with using the Internet to pursue a strategy of focus? 586.What are the benefits and risks associated with using the Internet to generate combination strategies? How are Internet-based combination strategies creating competitive advantages? 587. True False 74 . True False 591.A simple organizational structure may lead to problems such as unclear boundaries of authority and few career advancement options.A major disadvantage of adopting a divisional structure is the tendency for managers to focus on short-term objectives.There is no link between a firm's strategy and its structure. extensive rules and regulations are used to maintain order.To enhance integration and control of related product market activities. True False 592. True False 593. the functional structure minimizes centralization. True False 590.One disadvantage of a functional structure is that differences in functional orientation may impede organization coordination and communication. True False 588. it shied away from being an operator of the businesses it ended up owning.As Power Corporation grew. Boundaryless structures replace traditional structures. True False 600. True False 595.The purpose of boundaryless forms of organizing is to facilitate the widespread sharing of knowledge and information across internal and external boundaries of the organization. equipment.An advantage of the barrier-free form of organizing is that internal cooperation and shared objectives are not required for it to work. and facilities. True False 602.The matrix structure attempts to combine the advantages of the functional and product-oriented structure. True False 596. True False 599.In a barrier-free organization.Modular companies can achieve rapid growth because they don't require large investments in fixed assets.A worldwide product division structure is used when global strategies require that each division be responsible for overall efficiency and performance.A matrix organization is organized strictly along product lines.The strategic business unit (SBU) and holding company structure are variants of the functional form of structure.The strategic business unit (SBU) structure is also referred to as the conglomerate structure. and talent disappear. True False 75 .594. True False 598. authority. True False 606. True False 604. modular firms often forfeit full strategic control. True False 605. differences in skills.Because the modular form of organizing involves outsourcing vital functions. True False 597.Rogers Communications has only two divisions: wireless and media.A major disadvantage of the matrix structure is that it duplicates the use of specialized personnel. True False 603. True False 601. 616. C.607. Creativity and individualism are rare. True False 612. C. B. strategy follows structure. it is most likely to develop a A. and access to one another's markets. C.Generally speaking. geographic structure. C. B. C. 615. strategy can effectively be formulated without considering structural elements. D. structure follows strategy. Decision making authority is highly centralized. D.Outsourcing relieves companies of the requirement to maintain skill levels needed to manufacture essential components. D.When an organization with a simple structure increases its sales revenue and volume of outputs. pulp and paper. 76 .Canadian conglomerate Power Corporation had its original corporate roots in A. divisional structure. 614. matrix structure.The virtual organization is characterized by participating firms which pursue a collective strategy that enables them to cope with environmental uncertainty through cooperative efforts. functional structure. 613. D.A strategy of related diversification requires most firms to organize around geographical areas or product lines.One of the risks of outsourcing is a loss of cross-functional skills. an ailing bus company. True False 608. B.The virtual type of organization is a network of independent companies linked together to share skills. B. True False 611. B. divisional structure.All of the following statements about simple organizational structures are true except: A. This type of organizational growth leads to a(n) A. costs. True False 610. international structure. True False 609. product-market structure. discussions of the relationship between strategy and structure strongly imply that A. There is little specialization of tasks. structure typically has a very small influence on a firm's strategy. D. transportation networks. functional structure.Managing virtual structures requires new and difficult-to-acquire managerial skills. the electricity generating industry. Small firms with a narrow product-market scope will adopt such a structure. divisional structure.A divisional structure A. There is a strong tendency for divisions to focus on short-term performance. B. unrelated product lines or service offerings. functional structure.Functional structures are usually found in organizations where there is A. simple structure. This is an example of a A. uniformity in image and quality across divisions 624.617. is organized around functional area departments. B. Pooling of specialists enhances coordination and control. efficient use of managerial and technical talent B. matrix structure. C. B.All of the following are disadvantages of a divisional type of organizational structure except: A. Decision making is centralized at the top of the organization. It can be very expensive compared to a functional organizational structure. C. facilitates the development of general managers. 623.A simple structure is characterized by A. work is divided into units that specialize in production. and other management tasks. There is separation of strategic and operating control. enhances centralized decision making. It facilitates the development of general management talent. high volume production.At Sharp Corporation.Which of the following is an advantage of a divisional type of organizational structure? A. 619. D. C. marketing. 618. Managers tend to be overly concerned with long-term strategies that minimize the importance of functional area strengths. C. 621. a high degree of emphasis on long-term performance D. 622. 620. D. typically improves the performance of firms pursuing a strategy of vertical integration. low specialization and high centralization. B. Decentralized decision-making enhances an organization-wide perspective across functions. C. D. B. high specialization and low centralization. 77 . research and development. high formality and low centralization. an enhanced ability to respond quickly to changes in the external environment C. It is easy to establish uniform performance standards. D. There can be dysfunctional competition among divisions. D.Which of the following is a disadvantage of a functional type of organizational structure? A. very little vertical integration. B. C. Use of managerial and technical talent is inefficient due to pooling of expertise in functional areas. B. D. C. D. a strong need to decentralize decision making. Differences in functional orientation may impede communication and coordination.Which of the following is an advantage of a functional type of organizational structure? A. low formality and low creativity. unbaked goods. and retail.625. or technologies are formed into homogeneous groups that can achieve synergies. divisional B. 78 . D. savings in personnel and overhead expenses associated with a small corporate office.Complicated working relationships. Divisions with similar products. C. baked goods.Which of the following is considered to be an advantage of a matrix structure? A. D. and online sales through Loblaws. wireless residential. gaining synergistic benefits across businesses. highspeed. C.Canadian media giant Rogers is divided into which of the following divisions? A. Internet cable.All of the following are advantages of a strategic business unit (SBU) type of organizational structure except: A. 629. international division. Planning and control by the corporate office is more manageable. holding company D. fisheries. retail. and excessive reliance on group processes are disadvantages of what type of organizational structure? A. worldwide functional. the best choice for its organizational structure is A. functional 630. cable. wholesale. fewer power struggles and reduced conflict 631. increased clarity in reporting relationships C. worldwide product division. shipping. worldwide matrix.Important advantages of a holding company structure include A. B. media. The corporate office is more removed from the individual divisions. government media C. markets. 627. wireless corporate 626. and manufacturing. C. retail. Divisional executives can respond quickly to market changes and opportunities. B. 628. bakeries. C.com. ISDN B. Cable TV. wireless D. matrix C. B. a high level of control of division executives by executives at the corporate level. which are A. intense power struggles. increased responsiveness to the market D. wireless. D. the layering of matrices B. a high level of awareness at the corporate office of issues facing individual divisions. and grains and oilseeds D.Diversified Canadian conglomerate Weston has put its businesses into three primary SBUs. B.If an international firm has a multidomestic strategy and a relatively high level of product diversity. C. matrix B. C.If an international firm has a global strategy and a relatively low level of product diversity. 634. external boundaries D. vertical boundaries B. geographic boundaries. modular C. similarities in the way team members solve problems. outsourcing C.Which of the following is not a disadvantage of the barrier-free form of organization? A. horizontal boundaries C. organizational performance may suffer. all of the above 635. B. D. operational effectiveness B.Which of the following boundaries exist between the functional areas of an organization? A. virtual C. strategic enabling 79 . The difference between a good team and an outstanding team has been found to be A. external boundaries.What is the name of the practice that many modular organizations use to grow? A.The boundaries between levels in an organization's hierarchy are known as A.Organizations are increasingly using teams for many reasons. vertical boundaries. barrier-free 636. C. worldwide matrix. Democratic process can be time-consuming and difficult to manage.Which of the following is not a boundaryless organizational design? A. modular D.632. the best choice for its organizational structure is A. barrier-free 639. B. horizontal boundaries. Lack of strong leadership can lead to coordination problems. If trust among employees is not sufficiently high. 633. B. the way team members treat each other. D. D. C. matrix D.What type of organization is defined as "a central hub surrounded by networks of outside suppliers and specialists"? A. D. worldwide product division. 637. 638. B. the combined technical skills of the members. similarities in the age and experience of team members. worldwide functional. international division. Fewer internal barriers means fewer political issues to deal with. strategic leveraging D. virtual B. accept interdependent destinies. potential loss of operational control among partners C. are usually permanent. accessing best-in-class goods and services B. What are the advantages and disadvantages associated with using the simple organizational form? 80 . an organization that uses information technology to integrate different functions.How do organizational structures change as organizations grow and mature? What are the dominant patterns of growth? 646. a type of modular structure.Which of the following is not a strategic risk of outsourcing? A. pursue collective strategies C. C. give up part of their strategic control. B.Describe the attributes of a simple organizational structure.Complete the following sentence: "Virtual organizations ____________________________ whereas modular organizations ____________________________.Which of the following is not a disadvantage of virtual structures? A. retain full strategic control 644. a dot. difficulty in determining where one company ends and another begins due to close interdependencies 645.com company. loss of strategic control over emerging technology D.The phrase that best defines a virtual organization is A. loss of control over a supplier D. loss of non-vital functions 642. loss of critical skills B. difficulty in individual and organizational knowledge sharing B. 643. a continually evolving network of independent companies. all of the above 641.640." A. D. pursue collective strategies. forfeit strategic control D. are usually temporary B. focusing scarce resources on core competencies D. enabling rapid expansion with relatively low capital investment C. loss of cross-functional skills C.What advantages does outsourcing provide an organization? A. Under what circumstances do organizations choose these forms of organizing? 650.Briefly describe the strategic business unit (SBU) and holding company organizational structures. What are the advantages and disadvantages associated with using the matrix organizational form? 81 .Describe the attributes of a matrix organizational structure. What are the advantages and disadvantages associated with using the divisional organizational form? 649.647.Describe the attributes of a divisional organizational structure.Describe the attributes of a functional organizational structure. What are the advantages and disadvantages associated with using the functional organizational form? 648. 651.For firms competing in highly unstable and turbulent industries.Sales quotas. 653. 652.Discuss how changes in today's workforce and the business environment have contributed to growth in the use of boundaryless organizational designs. What is the role of teams in the barrier-free organization? 654. "traditional" strategic controls are most appropriate.Discuss the uses and limitations of the barrier-free organizational structure.Discuss the three main contingencies that seem to influence the structure adopted by firms with international operations.Discuss the uses and limitations of the modular organizational structure. and production schedules are examples of "traditional" controls. True False 656. What is the role of outsourcing in the modular organization? 655. operating budgets. True False 82 . True False 659.For a reward system to be effective. Similar provisions have NOT been put in place in Canada. True False 666. and other U. it becomes self-sustaining. True False 664.For young managers who see themselves as free agents. True False 660. True False 663.Short-term objectives and action plans are types of boundaries that channel the efforts of employees toward goal accomplishment.In terms of corporate culture. True False 667.Reward systems that reinforce an organization's core values and contribute to organizational cohesiveness are the least effective type. True False 83 .Different functional areas within an organization often have different reward systems. when used properly.Continuous monitoring enhances an organization's ability to respond with speed and flexibility. True False 662. Cirque du Soleil's focus is on customer service. behavioural controls such as rewards and culture can be an effective way to enhance organizational loyalty.Enron. Congress introduced the Sarbanes-Oxley Act in 2002 to ensure better governance of public corporations. True False 661. it must be perceived as fair and equitable. can minimize improper and unethical conduct. True False 658."Contemporary" strategic controls involve comparing actual performance to predetermined goals.Boundaries and constraints.Once a strong and healthy organizational culture has been established. companies have suffered from management abuses.S.An organization's reward system is typically a weak method of motivating employees. WorldCom. True False 665. not innovation. True False 669. True False 668.The U.S. Canada's public companies have not survived unscathed.657. True False 675. True False 672.Public companies are required by law to disclose information regarding executive compensation packages.Action plans permit a degree of autonomy for managers who sometimes must modify activities to achieve the desired outcome. Which of the following is not one of the steps in the sequence? A.Stock analysts generally issue more "sell" recommendations than "buy" recommendations. Strategies are implemented. Strategies are formulated and top management sets goals. stock exchanges True False 680. True False 677. Action plans are submitted by lower level managers.The risk of being acquired by hostile raiders is often referred to as the takeover constraint.S. True False 679. True False 676.Unexpected events (such as wildcat strikes or new government regulations) have little effect on short-term objectives that need to remain fixed to be effective. True False 673.Product diversification by a company is a cheaper way to reduce shareholder risk than portfolio diversification by shareholders. 84 .S. that are listed on U. B. Performance is measured against the predetermined goal.In firms that follow related diversification strategies.670. True False 678.The Sarbanes-Oxley Act of 2002 requires that CEOs and CFOs of publicly-listed companies must reveal off-balance-sheet finances and vouch for the accuracy of information provided.Auditors are appointed by the Securities and Exchange Commission to audit a company's financial statements. reward and control systems rely on qualitative indicators since the organization needs to reward and reinforce behaviours that facilitate sharing and collaboration. True False 671. C. D. True False 674.The Sarbanes-Oxley Act of 2002 does not apply to Canadian publicly listed companies operating in the U.The "traditional" approach to strategic control is sequential. encourage rigid planning and goal-setting processes. 684. goals and objectives cannot be measured with a high level of certainty.For businesses facing complex and turbulent business environments A. cast doubt on the value of rigid planning and goal-setting processes. strategy formulation. goals and objectives that are uncertain prevent opportunism.In terms of building a strong and effective corporate culture. It is a key catalyst for an ongoing debate about underlying data. 683. C. comparative learning. B. B. traditional strategic controls are usually inappropriate. complacency about predetermined milestones can prevent adaptability.Which of the following approaches to behavioural strategic control should be utilized least in an organization in which there is a great need for innovation and a high degree of autonomy? A. Mintzberg. D. writing about leaders and strategy. culture B. B. and action plans.Most successful organizations minimize the need for explicit rules. had observations which A. 682. customer service. B. C. and other boundaries by A. designing effective reward systems. single-loop learning. rewards C. posting written statements of the organization's goals and objectives. C. Canada's Cirque du Soleil was described as focusing on A. It generates information that is important enough to demand regular and frequent attention.Which of the following is not one of the characteristics of a contemporary control system? A. It circumvents the need for face-to-face meetings among superiors. discouraging the formation of subcultures that isolate work groups. regulations. they are only appropriate when the environment is stable and simple. innovation. operational efficiency. they lack the flexibility needed to adjust to changes in the environment. encouraging employees to see themselves as free agents. D." C.The primary drawback of "traditional" strategic control systems is that A. D. said strategic control systems fail to detect changes in consumer demand. 686. D. C. subordinates. 687. C. "projected the past into the future. B. D. feedback controls. assumptions. B. C. D. all of the answers are equally important 688.McGill University's Prof. double-loop learning. boundaries D. 685. 85 . detailed plans are needed to maintain order.Contemporary approaches to strategic control rely primarily on A. B. D.681. and peers. It must focus on constantly changing information that is strategically important. they lead to complacency. financial D.Effective short-term objectives have all of the following priorities except A. Culture encourages individual identification with the organization and its objectives. Performance measures are clear and highly visible. They represent an effective control mechanism. financial B. Northern Telecom B. outright malfeasance. the culture should foster ________ levels of interdependence and rewards should be based primarily on _____________ measures of output. C. low. low. B. Four Seasons D. Culture sets explicit boundaries.689. low. D.All of the following are characteristics of effective reward and incentive systems except: A. Culture generates unwritten standards of acceptable behaviour.The causes of counterproductive behaviour in organizations include A. C. They represent a poor means of influencing an organization's culture.Which of the following is not one of the functions of reward and incentive systems? A. the culture should foster ________ levels of interdependence and rewards should be based primarily on _____________ measures of output. high. being specific and measurable. behavioural C. Canadian Tire C. D. behavioural 86 . B. 693. D. lack of a clear understanding of organizational goals and objectives. The compensation system is perceived as fair and equitable. all of the answers are correct 694. high. B. behavioural 696. providing a specific time horizon for their attainment. C. B. an emphasis on "do your best" goals. 695. low.In firms with differentiation strategies. high. They focus efforts on high-priority tasks. Culture helps maintain control by creating behavioural norms. high. which Canadian company was mentioned by the text in Chapter Ten as having the vision of being a "national champion and Canada's most trusted company"? A. B.All of the following are examples of how organizational culture exerts behavioural control except: A. behavioural C. 690. D. financial B. Objectives are well understood and broadly accepted. motivated self-interest. being achievable yet challenging. They motivate high levels of individual and collective task performance. A. A. C. C.In firms with overall low-cost strategies. D. The structure is fixed to assure employees of consistency. Cirque du Soleil 691. 692. financial D.In terms of providing short-term objectives and action plans. behavioural 698. the market for corporate control.External control mechanisms include all of the following except A. all of the answers are correct 87 . shirking. we mean A. C.S. excessive product diversification. 700. financial B. the fact that auditors are appointed by the firm.697. legal constraints that limit the ability of the raiders to acquire a firm. provisions in the charter of a company that prevents it from attempting a takeover of other companies. B. D.In firms with related diversification strategies. the risk of being acquired by a hostile raider. high. C. D. constraints placed by the firm on raiders who want to takeover the firm. top executives received bonuses of $21 million based on profits called into question. D. former CEO John Roth cashed in $135 million of stock options just before the stock price tanked from $124 to 75 cents. B. the company admitted it possessed no reliable financial statements since 2001. D.It is generally argued that the takeover constraint deters management from A. engaging in opportunistic behaviour. increasing a firm's level of borrowing. C.Canadian IT company Nortel was cited by the text as an example of "flawed corporate governance" because A.Managerial opportunism can take all of the following forms except A. D. the failure of U. audit firms to follow internationally accepted accounting standards. 699. B. A. competitors. analysts. 702.By takeover constraint. considering acquiring other companies. D. C. B. C. auditors. high.The failure of many auditing firms to raise red flags about accounting irregularities in companies such as Enron and WorldCom is generally attributed to all of the following factors except A. C. low. behavioural C. on-the-job consumption. B. the desire to get future auditing contracts from the company. B. financial D. the culture should foster ________ levels of interdependence and rewards should be based primarily on _____________ measures of output. 703. 701. low. the desire to get consulting work from the company because most audit firms also do consulting work. job-hopping. declaring dividends. 88 . and boundaries? Is there a danger associated with emphasizing one behavioural approach more than another? 708. C. rewards. stock trading by insiders.Discuss the benefits and risks of using reward and incentive systems as a means of strategic control. details of new products under development.Why is it important to have a balance among the three behavioural controls—culture.What are the advantages and disadvantages associated with using "traditional" approaches to strategic control? 706.704.All of the following are types of information that a firm is required to disclose except A. B. quarterly and annual filings of financial information. 707. details of executive compensation packages. 705.What are the four characteristics of effective information control systems? Give examples of how firms apply these practices. D. Discuss the contingent nature of strategic controls. True False 714. 710.What are the characteristics of short-term objectives? Provide examples of practical applications of these characteristics by organizations. True False 89 .Royal Group of Woodbridge became North America's largest PVC extruder. How would controls be different for firms pursuing overall low-cost strategies versus differentiation strategies? How would the controls used for related diversification differ from those used for unrelated diversification? 711.709. 713.Setting a direction is the leadership activity that involves developing a strategic vision of what the organization could become. Discuss the role played by each of these.Identify at least three external control mechanisms.What are the three key means to align the interests of owners (shareholders) and managers in a corporation? 712. and refusal to share information. but they are powerless to change it. systems. and reporting relationships that impede the flow of information. creative approach to the unknown. refers to one's proficiency in managing relationships and building networks.Behavioural barriers to change occur because of conflicts between departments.Empathy.Leaders play an important role in sustaining an organization's culture. True False 717. Tim Hortons has much room for growth. conflicts arising from power relationships.Emotional Intelligence (EI) is generally a better predictor of life success than intelligence quotient (IQ). True False 723. True False 725. True False 719.400 outlets in Canada. True False 726. with over 2. and processes that facilitate the implementation of a leader's vision.Organizational learning works best when an organization's leaders gather information and teach it to employees who are like their students. True False 720. one of the components of emotional intelligence (EI).Successful learning organizations have a proactive.The two broad bases of a leader's power are organizational and hierarchical.In terms of the strategy of expansion. structure. True False 724.Designing the organization is the leadership activity that involves building structures. True False 721. True False 90 .Systemic barriers to change refer to elements of an organization's design.Leaders are not expected to accept personal responsibility for ethical behaviour in an organization because ethics is a matter of individual choice. True False 718. True False 716.715. True False 722."Coercive power" is the power exercised by use of fear of punishment for errors of either omission or commission by employees. teams. True False 728. it did not facilitate the development of competent executives. leaders must perform the tasks of resource allocation and power brokering. True False 735."Open book" management is a technique for gathering and disseminating internal information so that all employees can be involved in decision making and management. B. leaders clarify the mission.Which of the following is an important characteristic of a leader? A. True False 734. goal-oriented B. and hold people accountable for results.To successfully empower employees to achieve organizational goals. focused on past performance 91 .Business ethics is the application of ethical standards to commercial enterprise.An effective way to instill ethical behaviour in an organization is to distribute rewards strictly on the basis of outcomes.Canadian steel company Dofasco's 7. True False 736. Royal Group Technologies was challenged because A. C. D.In the opening case. reactive D. delegate responsibility.Ethical behaviour can be reinforced through the use of an appropriate reward and evaluation system.727. De Zen paid little attention to financial ramifications. True False 731. all of the answers are correct 737.Inspiring and motivating people with a mission or purpose is a necessary and sufficient condition for developing a learning organization. the CEO was obsessed with controlling all activities. True False 732. True False 733.300 employees are NON-unionized. True False 729.A key function of the leaders in a learning organization is to generate an organization-wide commitment to the status quo.In the "top-down" approach to empowerment. satisfied with the status quo C. True False 730. determining a direction.738. inadequate accountability among managers and employees. inappropriate budgeting and control systems. behavioural barriers D. Canada's Cirque du Soleil was transformed by Guy Laliberte who A.Leaders play a key role in developing and sustaining an organization's _____________. set a firm direction. conflicts between departments and divisions. and organizational processes that facilitate implementation. 741.According to the text. C. A. B.The leader's role in developing a strategic vision provides many benefits including A. a clear future direction. dedication to maintaining the status quo. D. D. D. insufficient mechanisms to integrate and coordinate activities across the firm. all of the answers are correct 745.S. effective leadership is like a three-legged stool consisting of all of the following except A. C. enhanced employee communication and commitment.Canadian icon Tim Hortons' future plans A. was poor at rooting out unethical behaviour. pushed himself and his artists to continuously experiment. C. involve expanding on their 250 franchises they have in the U. D. all of the answers are correct 740. B. a framework for their organization's mission and goals. are limited by behavioural barriers. teams. remain focused on expanding the 2.In terms of nurturing a corporate culture. nurturing a culture dedicated to excellence and ethical behaviour. all of the answers are correct 92 . culture C. 739. B.Poor organizational design by leaders can result in all of the following except A. political barriers C. status quo B.Which of the following explains why organizations are prone to inertia and slow to change? A. conflicts over resources. 744. C. vested interests in the status quo D. reporting relationships D.400 stores in Canada. systems. C. designing the organization. are thwarted by political barriers. 742. systemic barriers B. personal time constraints B. maintained the status quo. rules and regulations 743. B.Refusal to share information. political barriers C. B. and petty interpersonal differences are symptoms of which type of barrier to change? A. D. legitimate power. B. is derived from the leader's capability and knowledge in a particular field. and distribution of information that is not freely available to everyone in an organization. creative approach to the unknown.All of the following constitute organizational bases of a leader's power except A. D. a leader's identification with the subordinates. B.746. 749. They create a proactive. technical skills. is derived from referent power. C. D. D. empathy.Which of the following is not a characteristic of a successful learning organization? A. 748. B. is the power exercised by use of fear of punishment for errors of omission or commission by employees. C. 751. self-promotion. control. B. C.Expert power A. and distribution of information that is not freely available to everyone in an organization. C. C.The source of referent power is A. is derived from organizationally conferred decision-making authority. B. arises from a manager's access. calculative abilities. C. is the ability of the leader or manager to confer rewards for positive behaviours or outcomes. D. cognitive abilities. 750. coercive power. a subordinate's identification with the leader. reward power. 747. D. 93 . arises from a manager's access. is the power of persuasion exercised by a charismatic leader to get compliance from reluctant subordinates. B. They regularly engage in activities to reinforce the status quo. They enable everyone to use their intelligence and apply their imagination. D. C. They actively solicit the involvement of employees at all levels. derived from the fact that the manager can potentially act as a reference when the employee applies for another job. emotional intelligence. D. derived from the manager's ability to provide effective incentives to employees. control.The three broad sets of capabilities that a leader should possess include all of the following except A. self-awareness.All of the following are components of emotional intelligence (EI) except A. 752. self-regulation. B.Coercive power A. referent power. Westons . the risk-taking model. B. the leadership perspective. 755.The empowerment perspective that involves trusting people to "do the right thing.An empowerment perspective that delegates responsibility. the accounting model.The "top down" perspective of empowerment A. and relies on clearly specified rewards to motivate is known as A. D. D. B. builds teams to encourage cooperative behaviour. goal but not a necessary condition D. employee empowerment.Complete the following sentence: "Inspiring and motivating people with a mission or purpose is a ____________________________________ for developing an organization that can learn and adapt." take intelligent risks. C. clarifies the organization's values and mission." A. encourages cooperative behaviour. the bottom-up approach. D.insurance.food.fast food. necessary and sufficient condition B.Manufacturing employees at Dofasco Steel are directly involved with customers and have access to the new innovative knowledge being developed in its manufacturing processes. encourages intelligent risk-taking. B. D. enabling heroes and drones.steel.Which company does the book cite as being the first Canadian company to offer profit sharing to its employees in 1938? A. C. Zurich Canada . necessary but not a sufficient condition C. the top-down approach. 759. the top-down approach. encourages employees to "ask permission rather than forgiveness. B. knowledge management. C. C. 94 . C.The "bottom-up" perspective of empowerment A. B. focuses on accountability.753. goal and a required pre-condition 754. and act with a sense of ownership is known as A. the bottom-up approach." 757. B. trusts people to perform. Dofasco . 756. communicates specific plans. This is an example of A. D. 758. the leadership perspective. hierarchical control. D. Tim Hortons . delegates responsibility. C. restricts the search for best practices to competitors. fostering a culture that encourages risk taking. creating a results-based reward system. D. is not very useful for organizations with a divisional organizational structure. dissent D. Extensive training in how to use and interpret the numbers is provided to all employees. the potential benefits of an ethical organization are few but direct. 763. B. failure C. growth. is used by teams to compete against similar teams at different stores and regions. C. is used by teams to compete against other teams in their stores. Information is generated daily that reflects the work performance and production costs of each employee. organizational ethics define what a company is and what it stands for. ethics provide a common frame of reference that serves as a unifying force. 764. D. The information is aggregated once a week and shared with employees at every level. ethical values shape the search for opportunities. C. Business ethics is the application of ethical standards to commercial enterprises. Ethics is not concerned with whether or not an act is socially desirable. is useful when researching industry-specific standards. B. Information about customer expectations and feedback is distributed monthly. and productivity. 766.Which of the following statements about ethics is false? A. a bad thing. forcefully creating a sense of urgency. establishing a "culture of dissent. C. C. D. all of the answers are correct 762. endeavours to determine best practices regardless of industry. is used by teams which compete against their own goals for sales." B.All of the following statements about ethical organizations are true except A.Internal benchmarking at Whole Foods A. B.760. success B. in essence. C. B. D.Companies that cultivate cultures of experimentation and curiosity make sure that _________ is not. Ethics assists individuals in deciding when an act is moral or immoral. risk taking 765. D.Which of the following is not one of the three core activities in the "open book" management system pioneered by Jack Stack? A. 95 . D. B.Functional benchmarking A.All of the following are guidelines an organization can use to promote the challenging of the status quo except A. 761. A. C. Ethics may be defined as a system of right and wrong. 769. D.Discuss the reasons why organizations and managers at all levels are prone to inertia and slow to learn and adapt.767. using leaders as role models of ethical behaviour. 771. had no cover up. D. C. had no effect on CIBC because no Canadian executives were charged.CIBC was involved with Enron. A.Proactive measures to prevent organizational ethics problems include all of the following except A.Briefly discuss the three interdependent activities that are critical for effective leadership. meant the CEO of CIBC retired before the Enron announcement and took $52 million in pay and bonuses. Discuss how each of these factors contributes to the success of a leader or manager. B. 772. issuing statements describing the organization's commitment to certain standards of behaviour. C. control system C. corporate credo D. B. This involvement A. 96 . included all other Canadian banks. 768.A _________________ is a statement describing an organization's commitment to certain standards of ethical behaviour. using the organization's information systems as a control system. instituting a reward system which considers outcomes as its primary criterion. reward structure 770. role model B.Identify the five components of emotional intelligence (EI). What is "open book" management? Why is this and other approaches to accumulating and sharing internal information being used increasingly in today's organizations? 776.What is the difference between "top-down" and "bottom-up" approaches to empowerment? Discuss how these differences impact the effectiveness of empowerment efforts.What is the leader's role in establishing an ethical organization? 777.773. 775. 97 .How can developing and maintaining a high ethical standard benefit an organization? Give examples and describe the effects the examples have had on the organization and/or its stakeholders.What are the four elements of a learning organization? What is the value of a learning organization in today's global marketplace? 774. True False 785. True False 783.S.Briefly discuss how an organization's reward and evaluation systems can be used to promote organizational ethics.Discuss the differences between integrity-based and compliance-based approaches to organizational ethics. 781.As an industry matures. True False 98 . True False 784.The term "strategic envelope" refers to the scope of a firm's innovation efforts.What is a corporate credo? How can it be helpful in shaping the moral dimensions of an organization? 780. 779. there are greater opportunities for change and so innovations tend to be more radical.Rogers may be known as a company involved in cell phones and cable TV but it was once the leading manufacturer of radios in Canada and the U.778. True False 782.Process innovations are often associated with a low cost leadership strategy.The term "innovations" refers primarily to inventions that use the latest technologies. True False 791. True False 789. True False 793. True False 788.Firms using a focused approach to corporate entrepreneurship typically separate corporate venturing activities from on-going operations of the firm.Strategic renewal and the pursuit of new venture opportunities are the two primary aims of corporate entrepreneurship. True False 798.Corporate venturing that is focused permeates all parts of the organization and involves every member of the organization.Product champions are the employees who identify new product ideas or services." True False 790.The discovery phase refers to the period when one becomes aware of a new business concept. True False 787. radical innovations occur quickly and incremental innovations take a long time to develop.Changes in the external environment spark innovative new ideas. but not funding.Business incubators are designed to support both start-up and later-stage companies. but usually find it difficult to maintain early market share gains.In general.786. True False 796. True False 794. True False 795. True False 792.Radical innovation often involves open-ended experimentation which can be very time consuming. True False 797.First movers in an industry often capture above-average profits. True False 99 .An opportunity may be justified regardless of whether or not it is attractive in the marketplace.Corporate business incubators often provide physical space and business services to internal ventures.Corporate entrepreneurship is sometimes called "intrapreneurship. Breakthrough innovation. New technologies.S. True False 805.Business risk taking refers to the risk associated with entering untested markets or committing to unproven technologies. _______________________ refers to efforts to improve the efficiency of organizational systems such as manufacturing and operations. B.Westjet is similar to most other airlines in that it runs a deficit. all of the answers are correct 807. being involved in wireless telegraphy.________________ produce fundamental changes that can transform a company or even revolutionize an industry. instrumental innovation C. A. B. are usually small improvements in products or processes. Product innovation. incremental innovations 808. True False 802. True False 801. process innovation D.Incremental innovations A.An imitative new entry strategy is in many respects the same as pioneering. ___________________ enhance existing practices and often represent evolutionary applications of fundamental breakthroughs._______________________________ refers to efforts to create designs and applications of technology to develop new products. Product innovation.Pioneering involves creating new ways to solve old problems or meeting customers' needs in a unique new way. C. service innovation 100 . D.Canadian communications Rogers got started by A. Technological breakthroughs. creating a radio tube that could be operated from a 110-volt current instead of batteries.RIM first got its start out of American engineering schools.799. Radical innovation. A. are usually highly disruptive. 806. C. D. incremental innovation B. being the leading manufacturer of radios in Canada and the U. Incremental innovations. Radical innovations. True False 803. radical innovations D. new paradigms C. usually represent technological breakthroughs.Most new entrants use an adaptive strategy. nearly always can be patented. True False 800. product-market breakthroughs B. True False 804. choosing to pursue product rather than process innovations. B. promoting organizational stars onto innovation teams rather than involving all employees in innovation efforts. collaboration partners. C.The innovation dilemma known as building capabilities versus collaborating refers to A. business incubators.809. C. choosing to pursue radical rather than incremental innovations.The benefits of converting innovations into successful business ventures include A. C. all of the answers are correct 811. ____________________________ are frequently an important aspect of a differentiation strategy. product innovations B. This is an example of A. strategic renewal. B.Whereas ________________________ are often associated with a low cost leader strategy. 815. C. shutting down product lines. marketing innovations. a strong spirit of entrepreneurship. a top-down approach to supporting entrepreneurial behaviour. D. strategic partners B. service innovations C. growth and rewards. declining competitiveness. 816. funding. focus groups and business incubators. student interns. developing innovation skills internally versus partnering with qualified outsiders. corporate venture capitalists D. B. none of the answers are correct 812. product champions.Corporate business incubators typically provide all of the following functions except A. mergers and acquisitions. D. A. B. D. upper-level managers 814. physical space. mentoring. building innovative products in-house versus outsourcing.The innovation dilemma known as seeds versus weeds refers to A. corporate venture funding. ________________________ which support fledgling start-ups are often used to pursue specific entrepreneurial ventures developed by _________________________. instrumental innovations D. semi-autonomous new venture groups. product innovations. B. new venture groups C. C. an entrepreneurial culture. D.Intel has invested $8 billion in several e-business start-ups.According to the text. lower-level managers. C. management innovations 810. process innovations. D. building credibility by launching products ahead of potential collaboration partners. internal development. 101 . D. B. radical innovations. A.Common features of a dispersed approach to corporate entrepreneurship include all of the following except A. 813. expanding capabilities by acquiring new knowledge C. a form of private equity B. is imposed from the top down. achievable C. risk taking C. autonomy D. Is the venture considered to be a market success? C.Which of the following is not one of the characteristics of good opportunities? A. attractive B. services.All of the following statements about innovativeness are true except: A.Strategic reasons for undertaking a corporate venture include which of the following? A. value creating D. 818. opportunism 821.817. B. competitive aggressiveness 824.Venture capital is A. bank financing C.All of the following are questions that should be answered when evaluating the performance of corporate venturing efforts except: A. Is the venture attracting external venture funding? B. It refers to a firm's efforts to find new opportunities and novel solutions. Does the venture add to the worth of the firm internally? D. D. personal savings and contributions of family and friends 822. often leads to instability. venture capital D. entering into new markets B. It refers to making decisions and taking risks without certain knowledge of probable outcomes. the willingness and ability to change A. It is aimed at developing new products.Which of the following dimensions of entrepreneurial orientation is described as "a forward-looking perspective characteristic of a marketplace leader that has the foresight to seize opportunities"? A. is considered a core capability.In corporations with a strong entrepreneurial culture.The vast majority of new firms are low-budget start-ups financed through A. D. a form of angel investing 823. C. often worries stakeholders such as suppliers and creditors. It involves creativity and experimentation. available only at the start-up stage C. Does the value proposition offered by the venture insulate it from competitive attack? 820. an initial public offering (IPO) B. C. all of the answers are correct 819. building the corporation's base of resources D. a form of human capital D. B. and processes. 102 . proactiveness B. adaptive B. an email solution for customers using MS Outlook. B. C. 826. B. D.The 3M Corporation. 103 . first-mover advantages.Which kind of new entry strategy sometimes involves filling a market space where the need has not previously been filled adequately? A.The benefits gained by firms that are the first to enter new markets. Encourage experimentation and risk-taking by tolerating failure. C. Invite customers to brainstorm about new product concepts. D. technological risk taking 831. one of the most highly innovative companies. B. enlistment of many third-party software developers to develop new applications. 829. enter markets with drastically lower prices. Reward the champions of successful new product ideas. partnering with Air Canada. proceeding slow and steady. foster creativity and experimentation. D.What is meant by the terms "radical" innovation and "incremental" innovation. establish brand identity. continuously seek out new products or services. The book notes that RIM's strategy is to develop A. Describe the advantages and disadvantages of each type of innovation and provide examples. distribution with a number of telephone carriers. uses several approaches and "rules-of-thumb" to encourage innovation. and/or adopt new technologies are known as A. D. Which of the following is not one of them? A. B.825. B. technological capabilities. C. breakthrough innovations. C. research risk factors to minimize uncertainty. all of the answers are correct 828. competitive aggressiveness. imitative C. using American pilots.RIM was mentioned in the book in a "Strategy Spotlight" because it had been growing fast.WestJet was cited in the text as being able to develop a toehold in Western Canada through A. C. 830. D.According to the text. Ensure that all risk-taking activities have a financial pay-off within one year. pioneering D. 827. firms that want to enhance their entrepreneurial position by being competitively aggressive should A. an aggressive market entry and competitiveness. 835. Provide examples of each approach.What are the differences between product and process innovation? What are the strategic implications of each approach to innovation? 833. age and growth goals for the development entrepreneurial ventures. 836.Compare and contrast the concepts of focused versus dispersed approaches to corporate entrepreneurship. Provide examples of each type of financing and discuss other entrepreneurial resources that might be available.832.Discuss the implications of size.Outline the opportunity process and discuss the phases involved in identifying and developing market opportunities. 104 .Discuss the similarities and differences of new-venture and later-stage financing. 834. Outline the key strategic intentions of each and provide an example of each. 838.New-entry strategies typically fall into one of three categories: pioneering new-entry. or adaptive new entry.Discuss the four areas of leadership skills necessary to enact an entrepreneurial vision.837. 105 . imitative new-entry. FALSE Dess . TRUE Dess . (p. (p. TRUE Dess .Appendix Analyzing. #2 3. #1 2. #4 5. (p. FALSE Dess . #7 8.Appendix Analyzing.. 366) The current ratio. (p... (p.Test Bank Key 1. TRUE Dess . TRUE Dess . 365) Analytical tools such as value chain analysis and five forces analysis are useful tools to employ when conducting strategic analysis.Appendix Analyzing. 361) There are two capabilities that can be learned through case analysis—the ability to speculate and integrate. (p.Appendix Analyzing... #3 4. TRUE Dess ...Appendix Analyzing.Appendix Analyzing.... #8 9.Appendix Analyzing. #5 6.. (p.. #6 7.. 361) Case analysis takes students through the whole cycle of activity a manager would face. 363) The business plan framework is not effective for analyzing strategic cases. 364) Writing down a problem statement is a needless waste of time when preparing a case. FALSE Dess .Appendix Analyzing. 362) The role of strategic decision maker is one that may be taken when analyzing a case. (p. 364) The first step in becoming familiar with the material is to read quickly through the case to get an overall sense of the material.. #9 1 . quick ratio and cash ration are all measures of short-term solvency...Appendix Analyzing. (p. TRUE Dess .. 361) The types of skills that are required to prepare an effective strategic case analysis can benefit you in actual business situations.. TRUE Dess . #15 16. 372) The illusion of unanimity is one of the symptoms of groupthink. TRUE Dess . (p.Appendix Analyzing. #17 18.Appendix Analyzing.. TRUE Dess .. #13 14.. (p.Appendix Analyzing. FALSE Dess . 369) According to the text. 370) The case analysis process should focus strictly on the case itself and you should not be concerned about your own performance... #10 11. #18 19. #19 2 .Appendix Analyzing... FALSE Dess . #14 15. (p. there are six rules for preparing a written case analysis. (p. #16 17.. (p.. one of the reasons that case analysis is so enriching as a learning tool is that it draws on many resources and skills besides what is in the textbook. FALSE Dess . 366) The profit margin tells you how much investors are willing to pay per dollar of current earnings.Appendix Analyzing. 368) There are five basic rules for preparing an oral case presentation. (p. TRUE Dess .. 372) The word conflict has negative connotations... 373) The use of a devil's advocate causes conflict that is counterproductive. #11 12.Appendix Analyzing.. TRUE Dess . (p.. (p..Appendix Analyzing. TRUE Dess .. 371) According to the text.Appendix Analyzing. #12 13. (p.. (p. 373) Dialectical inquiry is a technique whereby a problem is approached from two alternative points of view.Appendix Analyzing... 367) The basic aim of case analysis is to find solutions.10. FALSE Dess .Appendix Analyzing.. . skim it once. #26 27. (p. the ability to read....Appendix Analyzing. C.20. B. (p. #21 22. #24 25. 361) Three capabilities that can be learned through case analysis are A. 375) According to the text.Appendix Analyzing. B. C. D. #22 23. opportunity.Appendix Analyzing. speculate. D. #23 24.Appendix Analyzing.. the financial planning framework. a strategic decision maker. D. B. Dess . C. TRUE Dess ... D.Appendix Analyzing. and read it a second time. the ability to question. and answer. 374) To obtain synthesis. you take several days to read and digest the case. B. the ability to be cruel. intergration differentiation speculation none of the answers is correct Dess . 361) Being able to imagine different scenarios or contemplate the outcome of a decision are examples of the capability known as A. skim the case only once. Dess .. risk. B. the ability to differentiate. ponder. Dess . and integrate. (p.. you might adopt the position of A.Appendix Analyzing. (p.. making notes as you read. all of the answers are correct Dess . #20 21.. your analysis should ideally include the best components of each alternative.Appendix Analyzing. 364) When becoming familiar with a case it is recommended that you A. #25 26. in depth. the board of directors. (p. the strategic groups approach. the contingency model. (p. FALSE Dess .. competitive and cut-throat. 363) People. (p. C. TRUE Dess .. context. 362) In order to place yourself inside a case.. D. and perform mathematical calculations. (p. read it at night before bed and think about it in your sleep.. an outside consultant.Appendix Analyzing. the business plan framework. the analysis-decision-action cycle should not include analysis of the external environment but only focus on the internal aspects of the organization.. #27 3 . C. and reward are all part of A. write. 374) The analysis-decision-action cycle is the recommended method of case analysis. conducting strategic analysis. #28 29.. becoming familiar with the material. #29 30.Appendix Analyzing. #32 33...Appendix Analyzing.. D... D. proposing alternative solutions. after you do the analysis. 368) An essential part of preparing an oral presentation is: A. (p. proposing alternative solutions. profitability ratios. Dess . 366) The step in case analysis that involves the evaluation of choices and implications of those choices is known as A. (p. none of the answers is correct. (p. making recommendations. 369-370) 4 . B.. C.Appendix Analyzing.. not recommended. B. organizing your thoughts. C. Dess .Appendix Analyzing. liquidity ratios. D. B. 364) Sometimes problems in a case are not apparent until A. identifying problems. B. C. D. you read the case 12 times. identifying problems. D. D. C.Appendix Analyzing... #30 31.. turnover ratios. (p. #31 32. Conducting outside research when doing a case study is A. unethical and irresponsible. (p. market value ratios. you write down the problem statement. identifying problems. proposing alternative solutions.28. all of the answers are correct Dess . Dess .. C. D. being consistent and logical. conducting strategic analysis. 367) The final step in the case analysis process is A... C. B. becoming familiar with the material. conducting strategic analysis. #33 34. none of the answers are correct. Dess . B. C. B. emphasizing strategic analysis. one of the ways to help get the most out of the experience. #34 (p.Appendix Analyzing. Dess . (p. 365) The step in case analysis that involves using analytical tools from the textbook such as value chain analysis is known as A. Dess . 366) Price-earnings and market-to-book are examples of A.Appendix Analyzing. #39 40. #38 39. involves the constructive use of conflict. C.35. one of the five rules for preparing a written case analysis. D.Appendix Analyzing. D. C.Appendix Analyzing. the first step in the analysis-decision-action cycle. (p. 372) The use of conflict-inducing decision making techniques in case analysis A. Dess .. 374-379)resources Asking the question.Appendix Analyzing. D. Financial Post Advisor Irvine Janis Howard Jones all of the answers are correct Dess . recommended only for liberal arts majors. B.. a value-creating activity.. D. the devil's advocate the inquirer the dialectic the figurehead Dess . D. one of the five rules for preparing an oral case presentation. B. the final step in preparing a written case analysis. the 12th step in the analysis-decision-action cycle. #37 38. all of the answers are correct Dess .Appendix Analyzing. 371) Presenting information graphically is A.Appendix Analyzing. #40 5 . C. "Have strategic principles been used in the process of obtaining valuable and crafting effective entrepreneurial strategies?" is an essential part of A. C. (p. creating new ventures.. can be helpful in arriving at better solutions to cases. a form of brainstorming. 375) Analyzing organizational goals and objectives is A. 373) Which of the following tries to identify problems with the proposed alternative and suggests reasons why it should not be adopted? A. Dess . #35 36.. 372) The phenomenon known as groupthink is undesirable and can lead to poor decisions. B.. (p.. an affordable strategy in case analysis. (p. is designed to improve case analysis.Appendix Analyzing. D.. C. C. the final step in the analysis-decision-action cycle. (p. B. B.. B.... #36 37. The concept of groupthink was developed by A. all of the answers are correct Dess . (p. Answers will vary. B.Appendix Analyzing.Appendix Analyzing. D. Answers will vary. Outline the five easy steps that can be used to organize a strategic management case analysis.Appendix Analyzing. #46 6 . (p. (p. 362) Compare and contrast the positions of strategic decision maker.41. Answers will vary.Appendix Analyzing. Dess ... (p... ideas that are linked sequentially an overarching strategic perspective material presented in Chapter 12 all of the answers are correct Dess . 361) Discuss the three capabilities that can be developed through case analysis and explain how these three activities sometimes compete for a manager's attention.. (p. #42 43.Appendix Analyzing.. and discuss when it might be appropriate to use this framework to analyze strategic cases? Answers will vary.Appendix Analyzing. #44 45. #41 42. 364-367) 46. Dess .. 375) The analysis-decision-action model reflects A. #43 44. (p... Answers will vary.. #45 (p. C. Dess . and outside consultant that may be adopted when conducting a strategic case analysis. 363) Describe the four characteristics of a business plan framework.. Dess . board of directors. 368) Outline the five rules for preparing an oral case presentation and explain why each is essential to the development of an effective presentation. Dess .. .Chapter 01 #1 Learning Objective: 1 52. formulating strategy includes taking into consideration strategy at the business.Chapter 01 #2 Learning Objective: 2 53... Dess ..Appendix Analyzing. decisions. international. and strategy implementation. strategy formulation. (p. (p. (p. 11) According to the text. #50 51. digital. #49 50. 371) What are the five rules for preparing a written case analysis and how do these differ from the rules for preparing an oral presentation? Answers will vary.47.Appendix Analyzing. #48 49. and corporate levels. (p. Answers will vary. TRUE Dess . Dess . 369-370)explain Discuss the resources beyond the textbook that might be used to conduct strategic case analysis and how the use of additional resources can help you get the most out of the experience and expand your horizons.. Answers will vary... 372-374)Discuss Outline the various approaches to conflict-inducing decision making and provide examples of each. TRUE Dess . Dess .Appendix Analyzing.. (p. (p. 374-379)terms Explain how the 12 ideas involved in the analysis-decision-action cycle are linked sequentially in of an overarching strategic perspective. 5) Strategic management consists of the analysis. Answers will vary. (p. 9-13) Strategic management includes strategy analysis.Appendix Analyzing. Dess . #47 48. TRUE Dess . how these techniques can improve the quality of case analysis.Chapter 01 #3 Learning Objective: 2 7 . and actions an organization undertakes in order to create and sustain competitive advantages. Chapter 01 #11 Learning Objective: 4 8 . 14) Shareholders. (p. 14) Sears has developed a sophisticated quantitative model that can predict the relationship between employee satisfaction. (p. employees. 14) Shareholders in a company are the only individuals with an interest in the financial performance in the company.Chapter 01 #5 Learning Objective: 3 56.Chapter 01 #7 Learning Objective: 3 58. (p.Chapter 01 #4 Learning Objective: 3 55. FALSE Dess .Chapter 01 #10 Learning Objective: 3 61. TRUE Dess . FALSE Dess . (p. customer satisfaction and financial results. 17) The strategic management process should be addressed only by top-level executives. (p. FALSE Dess .Chapter 01 #6 Learning Objective: 3 57.Chapter 01 #9 Learning Objective: 3 60. TRUE Dess . This is an example of a symbiotic approach to strategic management. TRUE Dess .54. 14) Symbiosis is the ability to recognize interdependencies among the interests of multiple stakeholders within and outside an organization. FALSE Dess . 15) Social responsibility is the idea that organizations are not only accountable to shareholders but also to the community-at-large. and the community-at-large are among a firm's stakeholders. TRUE Dess . (p.Chapter 01 #8 Learning Objective: 3 59. Mid-level and low-level employees are best equipped to implement the organization's strategies. (p. (p. 14) Decisions by Boards of Directors are always consistent with shareholder interests. 14) Social responsibility for Suncor Energy of Calgary means accountability to customers but NOT to employees. TRUE Dess . long-term. An organization's vision statement should be massively inspiring. 17) Intellectual capital is becoming increasingly important in today's economy. (p.Chapter 01 #15 Learning Objective: 5 66. 20) Organizational goals and objectives should be vague in order to allow for changes in strategy.Chapter 01 #14 Learning Objective: 5 65. 20) Strategic management should only include short-term objectives.Chapter 01 #18 Learning Objective: 5 69.62. (p. 20) Objectives in organizations should be clear. TRUE Dess . and information throughout the world. and known by employees throughout the organization.Chapter 01 #13 Learning Objective: 4 64. vision statements are intended to motivate and inspire employees to work toward a general goal. TRUE Dess . (p. and only discusses the purpose of the company. (p. Long-term objectives are covered in the organization's vision statement. (p.Chapter 01 #12 Learning Objective: 4 63. and long-term. FALSE Dess . people.Chapter 01 #17 Learning Objective: 5 68. 21) According to the text. (p. It is a concern of managers throughout organizations. TRUE Dess . a mission statement is an overarching statement that is massively inspiring. TRUE Dess .Chapter 01 #19 Learning Objective: 5 9 . 20) Organizational vision statements are the beginning point for the hierarchy of goals throughout the organization. FALSE Dess . (p.Chapter 01 #16 Learning Objective: 5 67. (p. stated. 16) Globalization is the flow of capital. FALSE Dess . overarching. 20) Although vision statements vary from organization to organization. FALSE Dess .Chapter 01 #22 Learning Objective: 5 73. incorporating both short-term and long-term perspectives.70. FALSE Dess . strategy must be focused on long-term objectives. B. attorneys and their clients who sue the organization.Chapter 01 #23 Learning Objective: 1 74. creditors who hold a lien on the assets of the organization. C. strategy must be directed toward overall organizational goals and objectives. (p. B. 8) "Effectiveness" is often defined as A. emphasis on the attainment of short-term objectives. (p. (p. a new way to describe shareholders. productivity enhancement. 23) It is important for organizations to focus primarily on financial objectives and be less concerned about other objectives and goals. doing things right.Chapter 01 #26 Learning Objective: 2 10 . and organizations who have a stake in the success of the organization. 7) The four key attributes of strategic management include the idea that A. including multiple stakeholder interests in decision making. (p. D.Chapter 01 #24 Learning Objective: 2 75. TRUE Dess . D. but not constrained by time deadlines. 14) Stakeholders are A. B. Dess .Chapter 01 #25 Learning Objective: 3 76. Dess . Dess . stakeholder satisfaction doing the right thing. recognizing the trade-offs between effectiveness and efficiency. C. appropriate. (p. Dess . D. 21) A mission statement encompasses both the purpose of the company as well as the basis of competition and competitive advantage. strategy must focus on competitor strengths.Chapter 01 #20 Learning Objective: 5 71. C. individuals.Chapter 01 #21 Learning Objective: 5 72. D. strategy must be focused on one specific area of an organization. specific. B. 7-8) The four key attributes of strategic management include all of the following except A. groups. (p. 24) Strategic objectives should be measurable. (p. C. and realistic. Dess . organizations must participate in stakeholder management. all of the answers are correct Dess . assessing intellectual capital as well as analyzing the internal and external environment. ignored the experiences of competitors and set unrealistically high growth targets. are a combination of deliberate and emergent strategies. and financial results.77. emphasize the importance of short-term goals. B. 14) An organization is responsible to many different entities. stakeholders and managers inevitably work at cross-purposes. are a combination of deliberate and differentiation strategies.Chapter 01 #29 Learning Objective: 1 80. strategic leadership and fostering entrepreneurship. (p. direct all actions of the CEO. C. D. (p.Chapter 01 #31 Learning Objective: 3 82. formulating Internet and international-level strategy. stakeholders are second in importance to the shareholders. the textbook describes Roth.Chapter 01 #28 Learning Objective: 2 79.Chapter 01 #27 Learning Objective: 2 78. In order to meet the demands of these groups. C. D. D. (p. members of an organization's board of directors should A.Chapter 01 #30 Learning Objective: 3 81. C. Dess . B. organizations must continually analyze their strategy and their competitive environments. as having A. B. Dess . D. According to the text. interests of the shareholders are not the only interests that matter. According to the text. (p. Stakeholder management means that A. 11) In order to increase their competitiveness. D. CEO of Nortel. 9) According to Henry Mintzberg. strategy analysis includes A. 14) Sears has developed a sophisticated quantitative model and found that there were positive relationships between employee satisfaction. C. focused on the economic landscape. this is an example of ________________. B. (p. B. A. must be based on a company's strategic plan. set low targets. the realized strategies of a firm A. 14) While working to prioritize and fulfill their responsibilities. C. D. strategy implementation and strategic controls. represent the interests of the shareholders. customer satisfaction. B. C. all stakeholders receive financial rewards. must be kept confidential for competitive reasons. 3) In terms of strategy analysis. represent their own interests. (p. zero-sum relationship among stakeholders stakeholder symbiosis rewarding stakeholders emphasizing financial returns Dess . Dess .Chapter 01 #32 Learning Objective: 3 11 . (p.Chapter 01 #36 Learning Objective: 3 87.Chapter 01 #33 Learning Objective: 3 84. elected by the shareholders as their representatives. 20) Many organizations have a large number of functional areas with very diverse. Such organizations will be most effective if A. One area of concern should be social responsibility which is A. appointed by the Securities and Exchange Commission. the idea that businesses are responsible to maintain a healthy social climate for their employees. the fact that court costs could impact the financial bottom line. stakeholders look out for their individual interests. and social. C. and customer. Dess .Chapter 01 #34 Learning Objective: 3 85. 15) Firms must be aware of goals other than short-term profit maximization. stakeholders are dependent on each other for their success. C. environmental. C. D. C. and customer financial. functional areas work together to attain overall goals. goals are defined at the bottom and implemented at the top. each functional area focuses on achieving their own goals. One concept that helps managers do this is stakeholder symbiosis. financial. financial. human and social capital. Dess . (p. all of the above. D. organizational. (p.83. D. In the broader sense. Dess . C. B. and sometimes competing. only allowed to serve one term of four years. D. material capital. D. (p. D. these could include A. B. all stakeholders want to maximize shareholder returns. 14) Members of Boards of Directors are A. interests. 15) Firms must be concerned with many types of capital. Dess .Chapter 01 #38 Learning Objective: 5 12 .Chapter 01 #35 Learning Objective: 3 86. ecological capital. (p. Dess . B. the "triple bottom line" approach to corporate accounting includes which three components: A. 14) Managers should do more than just focus on short-term financial performance. B. Dess . B. the idea that organizations are solely responsible to local citizens. management and employees have separate goals. B. the expectation that business will strive to improve the overall welfare of society. This means that A. environmental. financial. one can only gain at the expense of someone else. organizational. elected by the public. 15) According to the text.Chapter 01 #37 Learning Objective: 3 88. C. (p. and psychological. 89. (p. 15-16) The text argues that a strategic perspective in an organization should be emphasized A. B. C. D. at the top of the organization. in the middle of the organization. throughout the organization. from the bottom up. Dess - Chapter 01 #39 Learning Objective: 3 90. (p. 16) As our world increases in complexity, the global environment is increasingly competitive and challenging. The key to effective globalization is A. B. C. D. managing the flow of goods. more people speaking more languages. managing the flow of capital, people, and information. governmental regulations. Dess - Chapter 01 #40 Learning Objective: 4 91. (p. 17) As firms work to become more efficient and effective in the global business environment, they are forced to continually innovate. Innovation in an organization A. B. C. D. will always increase a firm's performance. may enhance or destroy a firm's capabilities. should not be pursued by industry leaders. happens only incrementally. Dess - Chapter 01 #41 Learning Objective: 4 92. (p. 17) Peter Senge, of M.I.T., recognized three types of leaders. _______________ are individuals that, although having little positional power and formal authority, generate their power through the conviction and clarity of their ideas. A. B. C. D. Local line leaders Executive leaders Internal networkers Shop floor leaders Dess - Chapter 01 #42 Learning Objective: 4 93. (p. 17) Leadership is a necessary (but not sufficient) condition for organizational success. Leaders should emerge at which level(s) of an organization? A. B. C. D. only at the top in the middle throughout the organization only during times of change Dess - Chapter 01 #43 Learning Objective: 4 94. (p. 23) The hierarchy of organizational goals is in this order (least specific to most specific): A. B. C. D. vision statements, strategic objectives, mission statements mission statements, strategic objectives, vision statements vision statements, mission statements, strategic objectives mission statements, vision statements, strategic objectives Dess - Chapter 01 #44 Learning Objective: 5 13 95. (p. 20-22) Wellpoint Health Networks states: "Wellpoint will redefine our industry: through a new generation of consumer-friendly products that put individuals back in control of their future." This is an example of a A. B. C. D. strategic objective. vision statement. vague statement of direction. line manager's individual goal. Dess - Chapter 01 #45 Learning Objective: 5 96. (p. 20) Effective vision statement include A. B. C. D. all strategic directions of the organization. a brief statement of the company's direction. strategic posturing and future objectives. financial objectives and projected figures. Dess - Chapter 01 #46 Learning Objective: 5 97. (p. 20-23) Examples of _____________ include: "to be the happiest place on earth" (Disney), and "restoring patients to full life" (Medtronics). A. B. C. D. vision statements mission statements strategic objectives operational objectives Dess - Chapter 01 #47 Learning Objective: 5 98. (p. 20-23) In contrast to an organization's vision, its mission should A. B. C. D. be shorter in length. encompass both the purpose of the company as well as the basis of competition. encompass all the major rules and regulations of the corporate work force. be less detailed. Dess - Chapter 01 #48 Learning Objective: 5 99. (p. 20) Which "organizational vision" did the text credit belonging to BCE Bell Canada Enterprises? A. B. C. D. "Restoring patients to full life" "Providing Canadians with a one-stop destination in meeting their needs" "Clear, Simple, First, True, Profitable, Proud" "… the world's best quick service restaurant" Dess - Chapter 01 #49 Learning Objective: 5 100. (p. 20) Vision statements are used to create a better understanding of the organization's overall purpose and direction. Vision statements A. B. C. D. are very specific. provide specific objectives. set organizational structure. evoke powerful and compelling mental images. Dess - Chapter 01 #50 Learning Objective: 5 14 101. (p. 23-24) Fortune Brands states they will "cut corporate costs by $30 million a year." This is an example of a A. B. C. D. nonfinancial strategic objective. financial strategic objective. vision statement. mission statement. Dess - Chapter 01 #51 Learning Objective: 5 102. (p. 9-13) The strategic management process includes strategy analysis, strategy formulation, and strategy implementation. Discuss each of these steps. Answers will vary Dess - Chapter 01 #52 Learning Objective: 1 103. (p. 7-8) Discuss what is meant by recognizing trade-off between efficiency and effectiveness and provide an example of how this attribute of strategic management could influence the strategic decisions of a firm. Answers will vary Dess - Chapter 01 #53 Learning Objective: 2 104. (p. 13-14) A firm has a variety of different stakeholders. Identify several possible stakeholders a firm may have and discuss how the firm may achieve stakeholder symbiosis. Answers will vary Dess - Chapter 01 #54 Learning Objective: 3 105. (p. 16) Globalization is impacting most firms today. Discuss what "globalization" means and how and why it impacts today's firms. Answers will vary Dess - Chapter 01 #55 Learning Objective: 4 106. (p. 23-24) The text discusses several characteristics of effective strategic objectives. List several of these and discuss why a firm's strategic objectives should meet these criteria. Answers will vary Dess - Chapter 01 #56 Learning Objective: 5 15 107. (p. 31) Environmental scanning and competitor intelligence provide important inputs for forecasting activities. TRUE Dess - Chapter 02 #1 Learning Objective: 3 108. (p. 32) Environmental monitoring deals with tracking changes in environmental trends that are often uncovered during the environmental scanning process. TRUE Dess - Chapter 02 #2 Learning Objective: 3 109. (p. 32) Competitor Intelligence (CI) is a tool that can provide management with "early warnings" about both threats and opportunities. TRUE Dess - Chapter 02 #3 Learning Objective: 3 110. (p. 33) Competitor Intelligence gathering is no different from spying. FALSE Dess - Chapter 02 #4 Learning Objective: 3 111. (p. 33) Competitive intelligence generally does not benefit very much from gathering information on competitors from sources in the public domain. FALSE Dess - Chapter 02 #5 Learning Objective: 3 112. (p. 35) Even with all of the advances in recent years, forecasting is typically considered more of an art than a science and it is of little use in generating accurate predictions. FALSE Dess - Chapter 02 #6 Learning Objective: 3 113. (p. 44-45) The same environmental trend can often have very different effects on firms within the same industry. TRUE Dess - Chapter 02 #7 Learning Objective: 5 114. (p. 29) Although changes in the general environment may often adversely or favorably impact a firm, they seldom alter an entire industry. FALSE Dess - Chapter 02 #8 Learning Objective: 2 16 FALSE Dess . 36) Scenario analysis draws on a range of disciplines and interests.Chapter 02 #16 Learning Objective: 6 123. high switching costs can act as an important barrier to entry. 47) In some industries. TRUE Dess . 46-47) Industries characterized by high economies of scale typically attract fewer new entrants.S.Chapter 02 #12 Learning Objective: 1 119. TRUE Dess . 41) Nearly one-fifth of Canadians will be over 65 by 2025. (p. 28) The Canadian forestry industry has gained significant advantage over competitors in Sweden and Finland through the use of advanced technology.115.Chapter 02 #10 Learning Objective: 1 117. 48-49) The power of a buyer group is increased if the buyer group has less concentration than the supplier group.Chapter 02 #9 Learning Objective: 4 116. FALSE Dess . (p. TRUE Dess . (p. 46) Porter's five forces model helps to determine both the nature of competition in an industry and the industry's profit potential. TRUE Dess . (p. TRUE Dess .Chapter 02 #17 Learning Objective: 6 17 . (p. (p.Chapter 02 #14 Learning Objective: 6 121. (p.Chapter 02 #11 Learning Objective: 1 118. FALSE Dess . (p.Chapter 02 #13 Learning Objective: 6 120.Chapter 02 #15 Learning Objective: 6 122. TRUE Dess . 42-43) Technological innovations can create entirely new industries and alter the boundaries of industries. (p. 46) Porter's five forces model is designed to help us understand how social attitudes and cultural values impact U. businesses. TRUE Dess . TRUE Dess . 35-36) Bombardier studies people's travel patterns to decide on the number of seats they should plan for future aircraft. (p. FALSE Dess . (p. (p. 52-53) Complementary products are products that typically have a negative impact on the value of a firm's own products or services.Chapter 02 #19 Learning Objective: 6 126.Chapter 02 #18 Learning Objective: 6 125. (p. 48-49) Buyer power tends to be higher if suppliers provide undifferentiated or standard products.Chapter 02 #20 Learning Objective: 6 127. 49) Supplier power tends to be highest in industries where products are vital to buyers. FALSE Dess . FALSE Dess . where switching from one supplier to another is very costly. 50-51) Rivalry is most intense when there are high exit barriers and high industry growth.Chapter 02 #21 Learning Objective: 6 128. (p. (p. TRUE Dess . 51) Rival airlines Air Canada and WestJet are battling over allegations of corporate espionage. FALSE Dess .Chapter 02 #25 Learning Objective: 6 132. 50) The more attractive the price/performance ratio of substitute products. the more tightly it constrains an industry's ability to charge high prices.Chapter 02 #23 Learning Objective: 6 130.Chapter 02 #26 Learning Objective: 3 18 .Chapter 02 #24 Learning Objective: 6 131.Chapter 02 #22 Learning Objective: 6 129. 52-53) Michael Porter's Five Forces Analysis is a dynamic tool for analyzing industry attractiveness. (p. (p. (p.124. TRUE Dess . and where there are many suppliers. 49) The power of suppliers will be enhanced if they are able to maintain a credible threat of forward integration. TRUE Dess . 55) The use of the strategic groups concept is generally not helpful in charting the future directions of firms' strategies. C. 32) _____________ tracks the evolution of environmental trends. D. A. environmental scanning and a SWOT analysis. C. environmental scanning and competitor intelligence. FALSE Dess . 31) Two key inputs to developing forecasts discussed in the text are A. 56-57) The strategic groups in the world-wide automobile industry have been very stable and unchanging in recent years. (p. is illegal.Chapter 02 #29 Learning Objective: 7 136. is good business practice.Chapter 02 #32 Learning Objective: 3 139. A.Chapter 02 #27 Learning Objective: 7 134. 33) Gathering "competitive intelligence" A. TRUE Dess . B.Chapter 02 #33 Learning Objective: 3 19 . B.Chapter 02 #28 Learning Objective: 7 135. D. or streams of activities. 35-36) Environmental forecasting involves developing plausible projections about the ________ of environmental change. B.133. Dess . (p. C. B. Environmental scanning Environmental monitoring Environmental surveying Competitive intelligence Dess . sequences of events.Chapter 02 #30 Learning Objective: 3 137. minimizes the need to obtain information in the public domain. (p. (p. direction scope speed all of the answers are correct Dess . Dess . D. (p. C. 56) According to the text. environmental scanning and stakeholder identification. (p. FALSE Dess . D. assessing internal strengths and environmental scanning.Chapter 02 #31 Learning Objective: 3 138. (p. is considered unethical. Canadian Tire is more concerned about Wal-Mart than Holt Renfrew. Chapter 02 #35 Learning Objective: 3 142. D.Chapter 02 #37 Learning Objective: 1 144. Dess . 30) In the Canadian telecommunications industry. the same federal agency. B. B. (p. Dess . B. changes in ethnic composition. Dess . (p. political and legal environmental changes. C. sociocultural changes. the companies used to be governed by A. changes in the geographic distribution of the population.140. (p. C. global changes. in most cases. changes in the ethnic composition.Chapter 02 #34 Learning Objective: 2 141. decreased entry barriers increased trade deficit increased bargaining power of the firm's suppliers increased competitive intensity Dess . D. 41) Increasingly larger numbers of women entering the work force since the early 1970s is an example of A. B. 36) A danger of forecasting discussed in the text is that A. B. sociocultural changes. and effects of the baby boom are A. D. C. technological developments. C. demographic changes. the expense of collecting the necessary data exceeds the benefit forcasting's retrospective nature provides little information about the future managers may view uncertainty as "black and white" while ignoring important "grey areas" it can create legal problems for the firm if regulators discover the company is making forecast. industry associations. the increasing educational attainment of women in the past decade. (p. 44-45) Which of the following would be considered part of a firm's general environment? A. C. 41) Emerging sociocultural changes in the environment include A. D. CRTC. B. various provincial agencies. C. demographic changes. (p. different federal agencies.Chapter 02 #39 Learning Objective: 1 20 . 39) The aging of the population.Chapter 02 #38 Learning Objective: 5 145. Dess . (p. macroeconomic changes. progressively less disposable income by consumers.Chapter 02 #36 Learning Objective: 1 143. Dess . D. D. (p. This is an example of A. C. B. neutral negative. D. D. (p. positive. the issue is: A. no similar Canadian legislation was developed. 48) A large fabricator of building components purchased a steel company to provide raw materials for its production process. C. B. B. Canada followed with similar provisions. 46-47) Which is considered a force in the "Five Forces model"? A.Chapter 02 #43 Learning Objective: 6 150. gathers to form a cooperative to sell their products to buyers directly. economies of scale. C. Air Canada claims their employee website was hacked. B. backward integration. (p.Chapter 02 #41 Learning Objective: 3 148. Dess . the provincial governments developed similar laws. C. 49) An independent group of suppliers. WestJet claims their employee website was hacked. D. This is an example of A. forward integration. Dess . A.Chapter 02 #45 Learning Objective: 6 21 .146. B. such as farmers. backward integration. replacing their former distributor. Air Canada claims WestJet used employee access information to obtain flight info. positive positive. threat of entry. (p. C. B.Chapter 02 #40 Learning Objective: 1 147. C.Chapter 02 #44 Learning Objective: 6 151. negative Dess . forward integration. D. A. Dess . 42) The political/legal segment: When the US congress passed the Sarbanes-Oxley Act in 2002. Canada deregulated the associations. 45) Interest rate increases have a ________ impact on the residential home construction industry and a ___ effect on industries that produce consumer necessities such as prescription drugs or basic grocery items. neutral negative. Dess .WestJet conflict. Air Canada claims their email was stolen. increased deregulation in an industry the threat of government intervention rivalry among competing firms recent technological innovation Dess . product differentiation. D. (p. D.Chapter 02 #42 Learning Objective: 5 149. threat of substitute products. 34) In the Air Canada . (p. Chapter 02 #46 Learning Objective: 6 153. C. B.Chapter 02 #48 Learning Objective: 6 155. B. all of the answers are correct Dess . B. (p. includes allegations that WestJet set up a screen-scraper program to automatically lift data. 34) The rivalry between Air Canada and WestJet A. high switching costs. 46-47) Which of the following would be an entry barrier? A. (p. large economies of scale low switching costs easy access to raw materials low capital requirements Dess . Dess . high differentiation among competitors' products and services.Chapter 02 #47 Learning Objective: 6 154. B. 51) Which of the following firms would likely pose the least competitive threat? A. D.152.Chapter 02 #51 Learning Objective: 6 22 . C. B. D. Dess . 46-47) The threat of new entrants is high when there are A. high capital requirements. C. Dess . (p. the threat of forward integration by suppliers increases. 49) Buyer power will be greater when A. C. 49) The bargaining power of suppliers increases as A. D. the products purchased are highly differentiated. low economies of scale. (p. C.Chapter 02 #49 Learning Objective: 3 156. importance of buyers to supplier group increases. D. switching costs for buyers decreases. C. (p. there are high switching costs. recently moved from the skies to the courtroom. D. includes allegations that Air Canada sent investigators to pilfer a WestJet Executives garbage looking for data. it is concentrated on purchasing large volumes relative to seller sales. the industry's product is very important to the quality of the buyer's end products or services.Chapter 02 #50 Learning Objective: 6 157. (p. more suppliers enter the market. D. B. a firm in the same industry and in the same strategic group a firm that produces substitute goods to your product line a competitor to your product where a high switching cost exists a firm in the same industry and in the nearest strategic group looking to join your group Dess . 49-50) In Porter's Five Forces model. B. a competitor of Wal-Mart. dominance by a few suppliers. a prestigious upscale player.Chapter 02 #56 Learning Objective: 6 163. all of the answers are correct Dess . B.Chapter 02 #54 Learning Objective: 6 161. conditions under which a supplier group can be powerful include all the following except A. B. D. firms in other industries that produce products or services that satisfy the same customer need. are independent and dynamic over time. low differentiation of products supplied. C. B. Dess . D. Dess .Chapter 02 #53 Learning Objective: 6 160. 29) The general and competitive environments A. C. (p. D. strategic interrelationships with other business units within the same company. tend to be interrelated and dynamic over time. similar to Canadian Tire. C. (p. foreign companies which can use cheap labour in their countries. specialized assets with no alternative use. a high growth industry with low fixed costs. are independent and static over time. D. few substitute products. (p. B. have similar impact on organizations of different industries. lack of importance of the buyer to the supplier group. Dess . (p. other companies in the same industry. 49-50) A supplier group would be most powerful when there is/are A. (p.Chapter 02 #57 Learning Objective: 2 23 .Chapter 02 #55 Learning Objective: 7 162. readily available substitute products. 50) Threat of substitute products comes from A. C. B.Chapter 02 #52 Learning Objective: 6 159. 51) Exit barriers arise from A. high threat of backward integration by the buyers. high differentiation by the supplier. all of the answers are correct Dess . C.158. 56) Strategic groups within industries: Canadian retailer Holt Renfrew is described as A. Dess . D. many suppliers. governmental and social pressures. (p. C. D. Increased concern for the environment results in legislation that impacts your current packaging. 44-45) Which of the following is an example of the interrelationship between the general and competitive environments? A. fewer people in relevant age groups. firms within an industry that follow similar strategies. D. A decline in a nation's educational standards results in a decline in the nation's productivity. C. that macroeconomic forces dominate the general environment. Increased awareness of personal health leads to lower demand. (p. D. B. Government deregulation results in different firms being able to offer the same product as your firm. Greater awareness of the environment results in environmental legislation. Dess . B. D.164. (p. that the global environment is not as powerful an influence as thought. B. (p. C. A new technology results in the development of a substitute product for your firm's product. C. C. executives drawn from different companies within an industry that makes decisions on industry standards. 55-57) Strategic groups consist of A. customers who compliment the company for their good products and services. D. Dess . 52) In the value-net analysis. (p. Dess . The recession results in several of your competitors cutting prices and intensifying rivalry. 44-45) Which of the following best demonstrates the interrelationships among different segments of the general environment? A.Chapter 02 #58 Learning Objective: 2 165. and rising interest rates dampening demand for houses illustrates A. B. D. Dess .Chapter 02 #59 Learning Objective: 5 166. firms that produce products or services that have a positive impact on the value of a firm's products or services. (p. A country's technological inferiority results in its enactment of strong trade barriers against importation. firms that produce substitute products. complementors are A. Dess . that the competitive environment often has a strong influence on the general environment. firms within an industry that decide to collude rather than compete with each other so that they can increase their profits. that more than one segment of the general environment may affect an industry. 29-31) Delayed marriages. C. and greater rivalry in the alcoholic beverages industry. B.Chapter 02 #62 Learning Objective: 7 24 .Chapter 02 #61 Learning Objective: 6 168.Chapter 02 #60 Learning Objective: 5 167. firms that supply critical inputs to a company. top executives who make strategies for a company. (p. 55-57) Which of the following statements about strategic groups is false? A. Dess . Dess . C. Strategic groups are helpful in thinking through the implications of each industry trend for the group as a whole.169. Dess .Chapter 02 #65 Learning Objective: 2 172.Chapter 02 #67 Learning Objective: 4 25 . (p. B. (p.Chapter 02 #63 Learning Objective: 7 170. Strategic groups help chart the future directions of firms' strategies. Strategic groupings are of little help to a firm in assessing mobility barriers that protect a group from attacks by other groups.Chapter 02 #66 Learning Objective: 3 173. (p. 32-35) Explain how competitor intelligence can be improved by gathering information about competitors in the public domain. Dess . Dess . Answers will vary. Provide examples. Two assumptions are made: (1) no two firms are totally different. (p. Answers will vary. Answers will vary. D. 29) Explain why managers must recognize opportunities and threats in their firm's external environment. 29-30) Using the Canadian beer as an example. (2) no two firms are exactly the same. 35-36) Discuss some of the limitations of forecasting. Answers will vary.Chapter 02 #64 Learning Objective: 1 171. explain how an industry or competitive environment might be defined and analyzed. Dess .Chapter 02 #69 Learning Objective: 6 176. 48-49) Discuss and provide examples of factors that would lead to greater buyer power. (p.Chapter 02 #72 Learning Objective: 6 179.Chapter 02 #73 Learning Objective: 6 26 . Answers will vary. savings rates. etc. 52) Explain how the value net analysis adds to the five-forces analysis. Explain.174.Chapter 02 #70 Learning Objective: 6 177. 43-44) Many indicators of the macroeconomic environment such as GNP. Explain. (p.Chapter 02 #68 Learning Objective: 5 175. interest rates. are interrelated. Be sure to include examples from at least two industries. (p. Answers will vary Dess . (p. Answers will vary. Dess . trade and budget deficits/surplus. 46-48) Explain the important barriers to entry in an industry. Answers will vary. 49) What are some of the factors that would cause a supplier group to become powerful? Illustrate. (p. 50-51) Several factors usually interact which result in intense rivalry among competitors.Chapter 02 #71 Learning Objective: 6 178. (p. Provide examples. Answers will vary Dess . Dess . Answers will vary Dess . value is measured by market value of the total stock outstanding of the company.Chapter 03 #3 Learning Objective: 1 184. (p. 61-62) The automotive sector represents one of Canada's most important economic engines.Chapter 03 #5 Learning Objective: 1 186. TRUE Dess . and its service after the sale. 63) Primary activities contribute to the physical creation of a product or service. (p. 61) Performing a value chain analysis provides a complete assessment of the firm's strengths and weaknesses. (p.Chapter 02 #74 Learning Objective: 7 181. (p. (p.Chapter 03 #2 Learning Objective: 1 183. FALSE Dess . TRUE Dess . 55-56) What value is the strategic groups concept as a tool in analyzing an industry? Answers will vary Dess . (p.180. 61-62) Value chain analysis assumes that a firm's basic economic purpose is to create value and it is a useful framework for analyzing a firm's strengths and weaknesses. TRUE Dess . TRUE Dess . TRUE Dess . 61-62) In value chain analysis. (p.Chapter 03 #1 Learning Objective: 1 182.Chapter 03 #6 Learning Objective: 1 187. (p. FALSE Dess .Chapter 03 #4 Learning Objective: 1 185. its sale and transfer to the buyer. 64) Outbound Logistics: Campbell's Soup uses continuous replenishment for the Loblaw stores it supplies in Canada. 61-63) The value chain concept assumes that both primary and support activities are capable of producing value for customers.Chapter 03 #7 Learning Objective: 2 27 . FALSE Dess . 66) Technology development is a much broader concept than research and development.Chapter 03 #8 Learning Objective: 1 189. TRUE Dess . not on relationships among activities within the firm and other organizations (such as suppliers and customers). 70) In value chain analysis. (p. (p.Chapter 03 #11 Learning Objective: 3 192. (p. TRUE Dess . (p.Chapter 03 #13 Learning Objective: 5 194.Chapter 03 #9 Learning Objective: 2 190.Chapter 03 #12 Learning Objective: 5 193. 72) A firm's intangible resources refer to its capacity to deploy tangible resources over time and leverage those resources effectively. 72) Tangible resources are assets that are relatively easy to identify such as financial and physical assets.Chapter 03 #15 Learning Objective: 4 196.Chapter 03 #10 Learning Objective: 2 191. (p. general management is considered part of a firm's infrastructure. 76) Capabilities that are causally ambiguous are difficult to imitate.Chapter 03 #14 Learning Objective: 4 195. 75) Path dependency has no impact on the inimitability of resources.Chapter 03 #16 Learning Objective: 4 28 . (p. TRUE Dess . TRUE Dess . 66) Establishing a customer service hotline to handle customer complaints would be considered a primary activity in value chain analysis. (p. TRUE Dess . FALSE Dess . (p. FALSE Dess .188. (p. TRUE Dess . 70) Managers should focus their attention on interrelationships among value chain activities within the firm. 75) Products and services that are difficult to imitate help firms sustain their profitability. FALSE Dess . (p. (p.197. internal processes.Chapter 03 #22 Learning Objective: 5 203.Chapter 03 #18 Learning Objective: 5 199. 81) A primary benefit of the "balanced scorecard" is that it complements financial indicators with operational measures of customer satisfaction. TRUE Dess .Chapter 03 #21 Learning Objective: 5 202. (p.Chapter 03 #24 Learning Objective: 6 29 . FALSE Dess . FALSE Dess . 79) When using industry norms as a standard of comparison. (p. FALSE Dess . 80) Leverage ratios provide measures of a firm's capacity to meet its long-term financial obligations. 79) An increase in profits indicates an improvement in cash flow. TRUE Dess . 79) Historical comparisons are most appropriate during periods of recession or economic boom. (p.Chapter 03 #19 Learning Objective: 5 200. 79) Financial analysis provides an accurate way to assess the relative strengths of firms and can be used as a complete guide to study companies. (p. (p.Chapter 03 #17 Learning Objective: 4 198. 73-77) For a resource to provide a firm with potential sustainable advantages it must satisfy only two criteria: rareness and difficulty in substitution. and the organization's innovation and improvement activities. FALSE Dess .Chapter 03 #23 Learning Objective: 6 204. 81-83) The balanced scorecard enables managers to evaluate their business from only two perspectives: customer and financial. (p.Chapter 03 #20 Learning Objective: 5 201. FALSE Dess . managers must be sure that the firms used in the comparisons are representative of all sizes and strategies within the industry. B. They consist of warehousing. 63) Inbound logistics include A. 82) An important implication of the balanced scorecard is that managers need not look at their job as primarily balancing stakeholder demands. Dess . TRUE Dess . B. secondary primary.Chapter 03 #27 Learning Objective: 2 208. order processing. reduced raw material storage costs minimized idle production facilities and workers reduced work-in-process inventories reduced dependence on suppliers Dess . Services Inbound logistics Outbound logistics Operations Dess . 62) A marketing department that promises delivery faster than the production department's ability to produce is an example of a lack of understanding of the A. 63) ___________ are associated with collecting. support Dess . D.Chapter 03 #28 Learning Objective: 2 209. D. A. machining and packaging. primary. (p. primary support. delivery operation. need to maintain the reputation of the company. promotion and packaging. 64) Which of the following is not an advantage of Just-In-Time inventory systems? A.Chapter 03 #26 Learning Objective: 2 207.Chapter 03 #30 Learning Objective: 2 30 . C. storing. synergy of the business units. and distributing the product or service to buyers. D. C. (p. repair and parts supply.Chapter 03 #29 Learning Objective: 2 210. (p. Dess . C. (p. C. B.205. interrelationships among functional areas and firm strategies. D. material handling. (p. D. B. C. 63) Advertising is a ______ activity.Chapter 03 #25 Learning Objective: 6 206. (p. and scheduling. organizational culture and leadership. warehousing and inventory control. B. primary support. A. Supply of replacement parts is a _________ activity. 211. (p. 64) In assessing its primary activities, an airline would examine A. B. C. D. employee training programs. baggage handling. criteria for lease versus purchase decisions. the effectiveness of its lobbying activities. Dess - Chapter 03 #31 Learning Objective: 2 212. (p. 67) Customer service would include A. B. C. D. product promotion. product distribution. parts supply. procurement of critical supplies. Dess - Chapter 03 #32 Learning Objective: 2 213. (p. 63) Which of the following is a support activity? A. B. C. D. inbound logistics operations technology development customer service Dess - Chapter 03 #33 Learning Objective: 1 214. (p. 62) Which of the following lists consist of support activities? A. B. C. D. human resource management, technology development, customer service, and procurement human resource management, customer service, marketing and sales, and operations human resource management, information systems, procurement, and firm infrastructure customer service, information systems, technology development, and procurement Dess - Chapter 03 #34 Learning Objective: 1 215. (p. 69) Human resource management consists of activities involved in the recruiting, hiring, training, development, and compensation of all types of personnel. It A. B. C. D. supports only individual primary activities. supports only individual support activities. supports both individual primary and support activities and the entire value chain. supports mostly support activities but does have some impact on primary activities. Dess - Chapter 03 #35 Learning Objective: 2 216. (p. 62) According to value chain analysis, which of the following would be considered part of a firm's infrastructure? A. B. C. D. human resource management information systems technology development procurement Dess - Chapter 03 #36 Learning Objective: 1 31 217. (p. 64) For firms such as Campbell Soup Company, information systems have been a source of competitive advantage by enabling them to A. B. C. D. forecast future demand. replenish products in a timely manner. monitor inventories in distribution centres. all of the answers are correct Dess - Chapter 03 #37 Learning Objective: 2 218. (p. 63) Assessment of a firm's primary activities should include analysis of all of the following except: A. B. C. D. inbound logistics operations human resources marketing and sales Dess - Chapter 03 #38 Learning Objective: 2 219. (p. 72) The resource-based view (RBV) of the firm combines two perspectives: A. the primary and support activities of the firm B. the interrelationships among the primary activities of the firm and corporate management C. the internal analysis of the firm as well as the external analysis of the industry and competitive environment D. the industry and the competitive environment Dess - Chapter 03 #39 Learning Objective: 3 220. (p. 72-73) The three key types of resources that are central to the resource-based view of the firm are: A. B. C. D. tangible resources, intangible resources, and organizational structure culture, tangible resources, intangible resources tangible resources, intangible resources, and organizational capabilities tangible resources, intangible resources, and top management Dess - Chapter 03 #40 Learning Objective: 3 221. (p. 72) To create an intangible resource that cannot be easily copied, Canadian retailer Holt Renfrew combines: A. B. C. D. real estate and store fixtures brand name and experienced staff accumulated reputation for quality all of the answers are correct Dess - Chapter 03 #41 Learning Objective: 3 222. (p. 72) ______________ are the competencies or skills that a firm employs to transform inputs into outputs. A. B. C. D. Tangible resources Intangible resources Reputational resources Organizational capabilities Dess - Chapter 03 #42 Learning Objective: 3 32 223. (p. 73) Gillette combines several technologies (e.g., metallurgy, physiology, physics) to attain unparalleled success in the wet shaving industry. This is an example of their A. B. C. D. tangible resources. intangible resources. organizational capabilities. strong primary activities. Dess - Chapter 03 #43 Learning Objective: 3 224. (p. 74) For a resource to provide a firm with the potential for a sustainable competitive advantage, it must have four attributes. Which of the following is not one of these attributes? A. B. C. D. rare easy for competitors to substitute valuable difficult for competitors to imitate Dess - Chapter 03 #44 Learning Objective: 4 225. (p. 74) For a resource to provide a firm with the potential for a sustainable competitive advantage, it must have the following four attributes: A. B. C. D. rare, valuable, mobile, nonsubstitutable rare, inimitable, physically unique, nonsubstitutable rare, valuable, inimitable, nonsubstitutable rare, valuable, physically unique, causally ambiguous Dess - Chapter 03 #45 Learning Objective: 4 226. (p. 75) A crash R&D program by one firm cannot replicate a successful technology developed by another firm when research findings cumulate. This is an example of A. B. C. D. social complexity. path dependency. physical uniqueness. causal ambiguity. Dess - Chapter 03 #46 Learning Objective: 4 227. (p. 76) A variety of firm resources include interpersonal relations among managers in the firm, its culture, and its reputation with its suppliers and customers. Such competitive advantages are based upon A. B. C. D. social complexity. path dependency. physical uniqueness. tangible resources. Dess - Chapter 03 #47 Learning Objective: 4 228. (p. 75-76) A competitive advantage based on inimitability can be sustained for at least some time if it has the following characteristics: A. B. C. D. physical uniqueness, path dependency, causal ambiguity, and social complexity psychographic uniqueness, path dependency, causal ambiguity, and substitutability rarity, path dependency, causal ambiguity, and social substitutability geographic uniqueness, cause dependency, social ambiguity, and path complexity Dess - Chapter 03 #48 Learning Objective: 4 33 229. (p. 76) The following are examples of socially complex organizational phenomena except: A. B. C. D. a firm's culture interpersonal relations among a firm's managers complex physical technology reputation with suppliers and customers Dess - Chapter 03 #49 Learning Objective: 4 230. (p. 77) A resource is valuable and rare but neither difficult to imitate nor without substitutes. This should enable the firm to attain A. B. C. D. no competitive advantage. competitive parity. a temporary competitive advantage. a sustainable competitive advantage. Dess - Chapter 03 #50 Learning Objective: 4 231. (p. 79) The best measure of a company's ability to meet imminent financial obligations is known as the A. B. C. D. current ratio. total asset turnover. debt ratio. profit margin. Dess - Chapter 03 #51 Learning Objective: 5 232. (p. 72) Which of the following would be most difficult to assess? A. B. C. D. the liquidity position of a firm the legitimacy and reputation of a firm market share growth the efficiency with which a firm utilizes its assets Dess - Chapter 03 #52 Learning Objective: 3 233. (p. 79) Which of these categories of financial ratios is used to measure a company's ability to meet its short-term financial obligations? A. B. C. D. leverage ratios profitability ratios activity ratios liquidity ratios Dess - Chapter 03 #53 Learning Objective: 5 234. (p. 79) A meaningful ratio analysis A. B. C. D. must go beyond the calculation and interpretation of financial ratios. is based primarily on leverage ratios. involves only liquidity ratios. involves profitability ratios at a single point in time. Dess - Chapter 03 #54 Learning Objective: 5 34 D. A. 81) The "balanced scorecard" provides top managers with a _____________ view of the business.235. if the firm shows constant growth. (p. Dess . B. 81) The balanced scorecard enables managers to consider their business from all of the following perspectives except: A. D.Chapter 03 #58 Learning Objective: 6 239. C. if the overall strategy of the firm is the same. B. D. Dess .Chapter 03 #57 Learning Objective: 6 238. 81) The "balanced scorecard" developed by Kaplan and Norton helps to integrate A. Compare the financial ratios of firms in the company's strategic group. (p. customer perspective internal perspective innovation and learning perspective ethical perspective Dess . D. financial analysis and stakeholder perspectives. C. intangible resources and operational measures. Dess . D. (p. B. Historical comparisons are often misleading A. detailed and complex fast but comprehensive simple and routine long-term financial Dess . Compare the firm's financial ratios with ratios of firms in other strategic groups in the industry. (p. 79) How should managers assess changes in their firm's competitive position in their industries during a period of unusual economic growth? A. financial analysis and a firm's reputation. (p. B. C.Chapter 03 #59 Learning Objective: 6 35 . C.Chapter 03 #55 Learning Objective: 5 236. 79) Historical comparisons provide information to managers about changes in a firm's competitive position. B. Compare the financial ratios of all firms in the country's industry—some of whom serve very diverse market segments and have specialized accordingly.Chapter 03 #56 Learning Objective: 5 237. if the firm's stock is publicly traded. C. in periods of recession or economic boom. Compare the firm's financial ratios over the most recent one-year period. short-term perspectives and strategic positioning. Chapter 03 #61 Learning Objective: 1 242. Gains in financial performance and customer satisfaction must often come at a cost of employee satisfaction. (p. D. Dess . (p. Dess . Answers will vary. 61) What are some of the key strengths and limitations of SWOT analysis? Answers will vary. 62-63) How can a firm develop (or enhance) its advantages in the marketplace by having strong. Dess .Chapter 03 #63 Learning Objective: 2 244. 61-62) What are the key advantages of value chain analysis over SWOT analysis? Answers will vary.Chapter 03 #60 Learning Objective: 6 241. Managers should not look at their job as primarily balancing stakeholder demands. Managers need to recognize tradeoffs in stakeholder demands and realize that such demands represent a "zero-sum" game in which one stakeholder will gain only at another's loss.240. 81-84) An important implication of the "balance scorecard" approach is that: A. (p. (p.Chapter 03 #62 Learning Objective: 1 243. 68) What are some ways in which a firm's general administration can help create (or enhance) competitive advantages? Answers will vary Dess . The key emphasis on customer satisfaction and financial goals are only a means to that end. B. C. (p. positive interrelationships among its value chain activities and those of its suppliers and customers? Provide an example. increasing satisfaction among multiple stakeholders can be achieved simultaneously. Dess .Chapter 03 #64 Learning Objective: 2 36 . 245. Dess . Xerox is well known for its excellent use of human capital. 79) What are the benefits and limitations of making historical comparisons in analyzing a firm's performance? Answers will vary. (p. Discuss and provide examples. Dess . (p.Chapter 03 #69 Learning Objective: 6 250. 81-84) What are some of the most important implications of using the "balanced scorecard" approach? Answers will vary. Answers will vary. Dess .Chapter 03 #67 Learning Objective: 5 248. (p. Answers will vary. Dess .Chapter 03 #66 Learning Objective: 4 247. 81-84) What are the four perspectives that the "balanced scorecard" enables managers to evaluate their business? Answers will vary.Chapter 03 #65 Learning Objective: 3 246. (p. 89-91) According to the text. 70) The resource-based view (RBV) combines both the internal analysis of the firm and the external analysis of the environment. (p.Chapter 04 #1 Learning Objective: 1 37 .Chapter 03 #68 Learning Objective: 6 249. 74) Explain the four attributes that a resource must have to provide a firm with a sustainable competitive advantage. Dess . (p. FALSE Dess . Chapter 04 #7 Learning Objective: 2 257. FALSE Dess . 92) Writers have defined intellectual capital as the difference between the market value and book value of a firm.Chapter 04 #8 Learning Objective: 1 258. knowledge workers typically have multiple possible employment opportunities. 92) Human capital consists of the "individual capabilities. For this reason. FALSE Dess . (p.Chapter 04 #9 Learning Objective: 3 259.Chapter 04 #4 Learning Objective: 1 254. TRUE Dess . 97) Technical skills are a necessary and sufficient condition for hiring an employee.Chapter 04 #3 Learning Objective: 2 253. 91) The importance of intellectual capital has decreased in recent years. 93-94) Attracting top talent is a challenge of many organizations.Chapter 04 #5 Learning Objective: 1 255. (p.251. (p. 96) Canadian steel company Dofasco invests time and resources in developing new employees because it expects them to stay for most of their working life. 93) Knowledge workers are more loyal to their companies than traditional workers. FALSE Dess . TRUE Dess . (p. 93) The more reliance a firm has on intellectual capital the closer its book value will be to its market value. many firms have placed greater attention on attracting but not on developing or retaining talent.Chapter 04 #6 Learning Objective: 2 256. In today's economy. FALSE Dess .Chapter 04 #2 Learning Objective: 1 252. (p. (p. (p." TRUE Dess . 93) Creation of new knowledge typically involves the continual interaction of explicit and tacit knowledge. (p. TRUE Dess .Chapter 04 #10 Learning Objective: 3 38 . (p. TRUE Dess . Money is the top reason why such employees take and leave jobs. FALSE Dess . TRUE Dess .Chapter 04 #15 Learning Objective: 3 265. ATMs and athletic facilities. (p. FALSE Dess . TRUE Dess . 97) In most effective evaluation and reward systems employees only receive evaluation and feedback from their immediate supervisor. TRUE Dess .Chapter 04 #12 Learning Objective: 3 262.Chapter 04 #14 Learning Objective: 3 264. (p. 99) The most effective method of improving a firm's retention of top talent is to intensify its hiring efforts. TRUE Dess .Chapter 04 #17 Learning Objective: 3 267. FALSE Dess . (p. (p. 96) Companies have found that referrals from their own employees are generally an ineffective approach to recruiting top talent. 99) Rather than focus solely on financial considerations. (p. many firms offer attractive benefits to entice employees to stay.Chapter 04 #11 Learning Objective: 3 261. 96) The "cascade approach" described in the text is one of the important ways of developing human capital.Chapter 04 #18 Learning Objective: 3 39 .Chapter 04 #13 Learning Objective: 3 263. (p. (p. These may include on-site stores. FALSE Dess . 98-99) The text suggests that talented professionals are typically most concerned about financial rewards.Chapter 04 #16 Learning Objective: 3 266. 97) 360-degree evaluation and feedback systems address many of the limitations of traditional approaches of evaluating human capital. (p. 98) BC Biomedical missed out on being named one of Canada's "Best Employers" for the third year running.260. 99-100) and Developing social capital is risky for an organization because social capital is specific to individuals remains with the employee if he or she leaves the organization.Chapter 04 #19 Learning Objective: 3 269. and abilities of individual employees. 101) One possible negative outcome of building social capital in an organization is "groupthink"—a tendency not to question shared beliefs. FALSE Dess . TRUE Dess .Chapter 04 #20 Learning Objective: 4 270. software) is developed and paid for it can be used many times at very low cost as long as it doesn't have to be substantially modified each time. 99-100) Social capital is found in the knowledge. (p. (p. 102) The use of email can be distracting to employees when they use it excessively or for personal reasons.Chapter 04 #26 Learning Objective: 5 40 . (p. 99-100) an Social capital is based on the network of relationships within a firm. 103) Once a knowledge asset (e.g. in an attempt to retain employees. FALSE Dess .Chapter 04 #23 Learning Objective: 4 273. (p. skills. (p. not in the skills and abilities of individual employee.Chapter 04 #21 Learning Objective: 4 271. TRUE Dess . (p.Chapter 04 #22 Learning Objective: 4 272. FALSE Dess . offers emergency babysitting services to ALL employees across Canada. TRUE Dess . 103-104)after Many firms attempt to codify the tacit knowledge of employees in an effort to retain that knowledge the employee leaves the firm.Chapter 04 #24 Learning Objective: 5 274.Chapter 04 #25 Learning Objective: 5 275. (p. TRUE Dess . TRUE Dess . (p. 99) CIBC Canada.268.. (p. (p. FALSE Dess . One example of this is the relatively short tenure of CEO Rich Thoman. D. 91) As the competitive environment changes. Recently strategic management has moved from focusing on A. be equal to be smaller than be larger than not be correlated with Dess . fixed capital to working capital. (p. if a large portion of a firm's value is in intellectual and human assets.276. Dess . he did not have the skills required for the job. D. 104) Patents typically provide long-term protection for a firm since they do not expire. 91) Changes in our economy have forced firms to be more concerned with protecting their A. social capital.Chapter 04 #32 Learning Objective: 1 41 . intangible resources to tangible resources. C. C.Chapter 04 #27 Learning Objective: 6 277.Chapter 04 #28 Learning Objective: 6 278.Chapter 04 #29 Learning Objective: 1 279. B. 104) Protecting a firm's intellectual capital requires a concerted effort. C. B.Chapter 04 #30 Learning Objective: 1 280. D. Xerox became known for being too "loosely" organized. C. B. knowledge workers. D. tangible resources to intangible resources. the difference between the company's market value and book value should ___________ a company with mostly physical and financial assets. Xerox diversified into too many unrelated businesses. One of the main reasons he was fired is that A. (p. working capital to fixed capital. 92) In the knowledge economy. strategic management must focus on different aspects of the organization. TRUE Dess . 90) Xerox is a company that is known for its inability to leverage human capital. intellectual capital. B. (p.Chapter 04 #31 Learning Objective: 1 281. he did not have inside connections like other board members and executives had. Dess . (p. all of the answers are correct Dess . A. and skills. B. allocate 10% of pre-tax profits to employees. B. the output from assembly line employees. C. (p. 93) Tacit knowledge A.282. Magna's strategy is to A. A. D. C. (p. 97) In terms of retaining human capital. B. is found mostly at the lower levels of the organization. D. pragmatic theoretical. can be codified but not reproduced.Chapter 04 #34 Learning Objective: 2 284. 93) Human capital includes A. an improved product. 5 years of savings. Dess . all of the answers are correct Dess . practical tacit.Chapter 04 #35 Learning Objective: 2 285. cultivate the creative potential of its workforce. explicit detailed. B. can be accessed only with the consent of the employees because it is in the minds of the employees. C. Dess .Chapter 04 #36 Learning Objective: 3 286. D. knowledge. C.Chapter 04 #37 Learning Objective: 1 287. (p. Dess . distribute 6% of profits to senior managers. the relationships between people. C.Chapter 04 #33 Learning Objective: 3 283. D. D. $10. intellectual. is the same as explicit knowledge. 93) New knowledge involves the continual interaction between ________________ and ___________ knowledge. tacit Dess . 96) Canadian steel company Dofasco found that every dollar spent on training returns A. an individual's capabilities.000 in daily expenses.Chapter 04 #38 Learning Objective: 1 42 . A. $30 in productivity gains over the following three years. (p. $5 in production costs cut. B. Physical capital Human capital Social capital Emotional capital Dess . D. C. B. (p. 93) ____________ includes creativity and problem solving ability. (p. "top down" organization. B. B. increased decreased remained the same no correlation when Dess .Chapter 04 #41 Learning Objective: 3 291. C. (p. 98) BC Biomedical. C. (p. Firms experiencing high turnover should A. Intellectual capital can be increased by A. B. (p. adopt effective retention strategies. Dess . Whirlpool Canada dealt with conflicting demands of family and work by A. B. focus on increased recruiting.Chapter 04 #39 Learning Objective: 2 289. B. increasing the turnover of employees. Dess . intellectual capital is the difference between the market value and the book value of a firm.288. decreasing labour costs. paying 6% of profits to senior managers. 99) Firms must compete for top talent. in developed countries. developing a flat organization. (p. many firms try to protect their human capital and diversify the ownership of their vital knowledge by all of the following means except: A. emphasizing teamwork by developing learning programs by recruiting talented individuals from the best research institutions by shackling employees with "golden handcuffs" Dess . D.Chapter 04 #43 Learning Objective: 3 293.Chapter 04 #40 Learning Objective: 1 290. decrease money spent on human capital. Dess . pyramid organization. D. Dess . C. flat organization. D. C. "bottom up" organization. D. D.Chapter 04 #44 Learning Objective: 3 43 . offering additional work/life balance days to each employee. A. D. C. paying for daycare at all offices across Canada. C.Chapter 04 #42 Learning Objective: 1 292. 93-94) According to the textbook. B. which has been named one of Canada's "Best Employers" attributes their success to having a A. (p. a knowledge worker's loyalty to his or her employing firm has _____________ compared to his or her loyalty to his or her profession and colleagues. 94) Attracting and retaining human capital is a challenge for many firms today. make their work environment less stimulating. (p. increasing retention of below-average workers. 92) According to the text. attracting and retaining knowledgeable workers. 89) Recently. B. Dess . (p. balance efforts in the attraction. (p. the individual's IQ. none of the answers are correct Dess . weed out less effective employees. Dess . Dess . B. and retention of top talent. attracting intellectual capital.Chapter 04 #48 Learning Objective: 3 298. retain knowledge workers. The role of evaluating human capital. 95) According to Alan Davidson. developing human capital. C. refrain from training individual employees. The best way for a firm to manage their workforce is to A. (p. it is less expensive than the fees paid to headhunters. remained the same. Dess . D. B. C. attracting and developing social capital. it is a good test of employee loyalty. the single best predictor of an employee's future behaviour is A. attract the brightest employees. C. has A. retaining production workers. decreased. it is less expensive than the fees paid to headhunters and current employees are normally very careful in recommending someone because their credibility is on the line. C. 96) Many companies use referrals by current employees as a source for new hiring and even monetarily reward them because A. 96) The "cascade approach" is used by managers as a tool for A. 96-99) Managing a knowledge-intensive workforce is very challenging. current employees are normally very careful in recommending someone because their credibility is on the line. (p. Dess . D. increased. B. (p. rotate workers through functions in the company as quickly as possible. B.Chapter 04 #47 Learning Objective: 3 297.294. selection. 97) Maintaining a competitive workforce is very challenging in today's economy. C. D.Chapter 04 #46 Learning Objective: 3 296. establish practices that will enhance employee retention. in recent years. past behaviour. become less important.Chapter 04 #45 Learning Objective: 3 295.Chapter 04 #50 Learning Objective: 3 44 . academic accomplishments. C.Chapter 04 #49 Learning Objective: 3 299. (p. D. D. B. 97-98) In order to take advantage of investment in human capital a firm should A. D. an industrial psychologist. standardized test scores. ______________ rate a person's skill and performance." the "Pied Piper effect. C. the firm is in a high tech industry. Dess . This has been termed A. 100-101)capital. the organization's mission and values align with the employee's mission and values. D. B.300. requiring workers to work independently of each other.Chapter 04 #55 Learning Objective: 4 305. Dess . D. superiors direct reports colleagues all of the answers are correct Dess . This can be accomplished by A. Dess . B.Chapter 04 #52 Learning Objective: 3 302. the relationships among a firm's employees. the "Columbus effect. (p. If a firm has strong human the firm may exploit this by building social capital. 100-101)create Social capital is a source of strength to many firms. intellectual capital. they take with them A. employees are most likely to stay with an organization if A. all of the answers are correct Dess . B. B. human capital. 97) In a 360-degree evaluation and feedback system. (p. C." strategically competitive hiring. A firm's social capital is based on A. encouraging the sharing of ideas between employees in the firm. D. social capital. firms may attract the symbolic leader of a group within a competing firm and hope others will follow. Firms leverage their social capital in an effort to competitive advantages. the mission and values of the organization change often. the "tech exit" effect. C. C. an employee's individual abilities. In general.Chapter 04 #53 Learning Objective: 4 303. C. B. D. 101) Many Microsoft employees have left to start other companies. decreasing the interaction of departments within the firm. 100) In an effort to capture key employees from competitors. when such employees leave.Chapter 04 #51 Learning Objective: 3 301. Human capital and social capital are vital for superior firm performance. an individual's knowledge. (p. (p. a firm's allocation of financial resources. C. structuring the firm with rigid departmental and employee divisions. 97-98) Generally.Chapter 04 #54 Learning Objective: 4 304. the employer provides high salaries to technology professionals. (p. (p. D. B. D.Chapter 04 #56 Learning Objective: 4 45 . A. Dess . Chapter 04 #57 Learning Objective: 5 307.e. high social capital may breed "groupthink. create smaller social networks. B. (p. increase social capital. is always beneficial to a firm. C. D. This can be accomplished through the use of A.Chapter 04 #60 Learning Objective: 5 310. some argue that social capital A. However. 103) The use of information technology (e. Waterloo-based Open Text's Livelink which enables employees to share documents. a tendency not to question shared beliefs.Chapter 04 #58 Learning Objective: 4 308. high social capital may breed "groupthink. (p. C.. may or may not be beneficial to a firm. B. D.. email. individuals may become less willing to collaborate on joint projects. high upfront costs and low variable costs. C. high fixed costs and high variable costs. C. low upfront costs and high variable costs. Dess .Chapter 04 #59 Learning Objective: 4 309." i. B.e.Chapter 04 #61 Learning Objective: 5 46 . always hurts firm performance. D. D. 103) The creation of knowledge assets is typically characterized by A. Dess . (p. D.g. usually restricts the productivity of employees. 101) Social capital has many potential benefits.. 101) Among the downsides of social capital is/are A. restrict social network growth. Dess . all of the answers are correct Dess . B. (p. C. make more effective use of time in every situation. B. a tendency not to question shared beliefs and socialization processes whereby individuals are socialized into the norms and values of the organization may become expensive. Dess . This has helped to A. (p. email) has increased in recent years in many organizations. socialization processes whereby individuals are socialized into the norms and values of the organization may become expensive. according to the text." i. 104) Sharing knowledge within an organization helps to build social capital. high upfront costs and subsequent high variable costs.306. one-on-one conversations. Dess . invested half a million dollars in a software package to help his consultants share their ideas. Dess . (p. D. 106) Effective protection of intellectual property is necessary in order to obtain A. diminishing returns. C. 104) Bruce Strong.311. Dess . CEO of Context Integration. B. Dess . Give examples of how firms work to develop and retain it. D.Chapter 04 #64 Learning Objective: 6 314. B. competencies. 93-94) Why is the management of knowledge and knowledge professionals so critical in today's organizations? Answers will vary. the software not being a part of the company's culture. knowledge. (p. C. 92) What is intellectual capital and what is its effect on the ratio of a firm's market value to book value? Answers will vary. conceptual roots going back centuries. After the program was unveiled few people were motivated to use it.Chapter 04 #67 Learning Objective: 3 47 . financial investment in an undertaking. B. all of the answers are correct Dess . consultants not seeing value in the software. (p. assets.Chapter 04 #63 Learning Objective: 6 313. (p. (p. C. consultants being protective of their ideas.Chapter 04 #62 Learning Objective: 5 312. Answers will vary. (p.Chapter 04 #66 Learning Objective: 2 316. 106) The capacity to build and protect competitive advantage rests on A. zero marginal gains. 96-98) Discuss the attributes of human capital. This may have been caused by A. D. all of the answers are correct Dess .Chapter 04 #65 Learning Objective: 1 315. Answers will vary. (p. training. patent troll firm NTP.Chapter 04 #71 Learning Objective: 6 321. 116) Michael Porter's three generic strategies can be depicted on two dimensions: competitive advantage and product life cycle. training.Chapter 05 #2 Learning Objective: 1 323. FALSE Dess . How technology helped firms to enhance their human capital and social capital? Answers will vary. 99-101) employees." What are its implications for the attraction. 107) Discuss the current situation of RIM and its context with U. In an effort to attract and retain top talent. 102-104)has Discuss how technology has impacted the attraction. Dess .Chapter 04 #68 Learning Objective: 3 318. 95) Discuss the adage "hire for attitude.Chapter 05 #3 Learning Objective: 1 48 . FALSE Dess . (p. and retention of top talent? Answers will vary. Dess . Dess .317.Chapter 04 #70 Learning Objective: 5 320. firms provide financial and nonfinancial rewards to their Give examples of each and describe how the incentives you have chosen may impact individual employees. and retention of professionals. 117) Concentrating solely on one form of competitive advantage generally leads to the highest possible level of profitability.S. 113-114) 322. (p.Chapter 05 #1 Learning Objective: 1 (p. (p. TRUE Dess . train for skill. (p. Answers will vary. Colt is a Canadian success story that began in the 1950s in New Hampshire and Quebec. Dess .Chapter 04 #69 Learning Objective: 4 319. (p. FALSE Dess . FALSE Dess .Chapter 05 #10 Learning Objective: 2 331. (p. (p.Chapter 05 #9 Learning Objective: 2 330. (p. TRUE Dess . (p.324. FALSE Dess . (p. 125) The example of Lexus automobiles in the text points out that a firm can strengthen its differentiation strategy by achieving integration at multiple points along the value chain. FALSE Dess . a firm following an overall cost leadership position should not be with attaining parity or proximity on the basis of differentiation relative to its peers.Chapter 05 #7 Learning Objective: 2 328.Chapter 05 #4 Learning Objective: 2 325.Chapter 05 #5 Learning Objective: 2 (p. 127) A successful differentiation strategy lowers entry barriers because of customer loyalty and the firm's ability to provide uniqueness in its products and services. 124-126)strategy. FALSE Dess . TRUE Dess . 117-120)concerned To generate above average returns. 119) The experience curve concept suggests that production costs tend to decrease as production increases regardless of where an industry is at in its life cycle. (p. The focus strategy refers to focusing on the "non-price" attributes of a company's products. One of the advantages of high differentiation is that even if many competitors follow the same differentiation still exists for all.Chapter 05 #8 Learning Objective: 3 329. (p.Chapter 05 #6 Learning Objective: 2 327. FALSE Dess .Chapter 05 #11 Learning Objective: 3 49 . 117-120)on A firm striving for cost leadership will typically spend relatively more on product-related R&D than process-related R&D. 120-121)that Firms that compete on overall cost are vulnerable if all rivals share a common input or raw material contributes a significant amount to total costs. 117-120) 326. (p.Chapter 05 #20 Learning Objective: 5 50 .Chapter 05 #12 Learning Objective: 3 333. 131) A pitfall of a focus strategy is that focusers can become too focused to satisfy buyer needs. (p.Chapter 05 #14 Learning Objective: 4 335. FALSE Dess . TRUE Dess .Chapter 05 #16 Learning Objective: 2 (p. TRUE Dess .332. FALSE Dess . 129-130) 337. 127) Creating a niche by differentiating one's product or service often allows small firms to compete successfully with market leaders.Chapter 05 #17 Learning Objective: 4 338. FALSE Dess . (p. 127) A successful differentiation strategy increases rivalry since buyers become more price-sensitive. (p. (p. it is not necessary to attain parity on cost. Focus. TRUE Dess . (p. TRUE Dess . 132) An important idea behind the "profit pool" concept is that there is always a strong relationship between the generation of revenues and the capturing of profits. 128) If a firm has a successful differentiation strategy.Chapter 05 #19 Learning Objective: 5 340. (p. often constitutes a competitive advantage.Chapter 05 #13 Learning Objective: 4 334. (p. by itself. 131) A disadvantage of firms that successfully integrate overall cost leadership and differentiation strategies is that they are relatively easy for competitors to imitate. 132) Mass customization enables manufacturers to be more responsive to customer demands for high quality products. FALSE Dess . 127-128)diluted One pitfall of a differentiation strategy is that a brand's identification in the marketplace may become through excessive product line extensions.Chapter 05 #18 Learning Objective: 5 339.Chapter 05 #15 Learning Objective: 4 336. FALSE Dess . 135) An important pitfall of an integrated overall cost leadership and differentiation strategy is that firms may fail to implement either one and become "stuck-in-the-middle.Chapter 05 #22 Learning Objective: 6 343. 138) An important advantage of first movers in a market is that they may establish brand recognition that may later serve as an important switching cost. 138-139)managers Given the attractiveness of premium pricing during the growth stage of the market life cycle. 140-141)they Businesses that compete in markets that are in decline should simply be harvested or divested since are no longer profitable. 139) As markets mature.Chapter 05 #23 Learning Objective: 6 344. TRUE Dess . 138-139)loyalty. TRUE Dess .Chapter 05 #28 Learning Objective: 6 51 . TRUE Dess . competition on the basis of differentiation is preferable to price competition. During the growth stage of the market life cycle. (p. FALSE Dess . (p. (p. FALSE Dess .Chapter 05 #26 Learning Objective: 6 347. should emphasize short-term results to increase profits. 139) As markets mature. the magnitude of differentiation and cost leadership advantages among competitors decrease. (p. (p." TRUE Dess .Chapter 05 #24 Learning Objective: 6 345.Chapter 05 #27 Learning Objective: 6 348. FALSE Dess . 137) The market life cycle should be used as a short-run forecasting device because it provides a conceptual framework for understanding what changes typically occur. (p.Chapter 05 #21 Learning Objective: 4 342.341. customers are very likely to establish brand FALSE Dess . (p. (p.Chapter 05 #25 Learning Objective: 6 346. Dess .Chapter 05 #32 Learning Objective: 6 353. achieving competitive advantage(s).Chapter 05 #29 Learning Objective: 6 350.Chapter 05 #31 Learning Objective: 6 352. C. B. 142) Many firms facing a turnaround situation try to reduce their costs by outsourcing the production of many inputs. B. 117) In the long run. B. (p. FALSE Dess . or other investments. eliminated marketing and distribution costs by adopting the retailer's brand. (p. 140) During the decline stage of the product life cycle. C.Chapter 05 #34 Learning Objective: 1 355.Chapter 05 #35 Learning Objective: 1 52 . D. profits one would expect to earn on investments that have a similar level of risk. (p. businesses without a competitive advantage are unlikely to earn more than "normal" profits. TRUE Dess . (p. Treasury securities. Normal profits are A.Chapter 05 #30 Learning Objective: 6 351. (p. while hoping that competitors will exit the market.S. all of the answers are correct Dess . what one would receive on U. (p. achieving a low cost position. 113) The opening case of Cott beverages explains how this company A. maximizing risk-return tradeoffs through diversification. D. 142) Many firms in the maturity stage of the life cycle bring about their own decline by selective product and market pruning.Chapter 05 #33 Learning Objective: 1 354. 142) The decline stage of the industry life cycle stage is inevitably followed by death. secured a long-term agreement with RC Cola. D.349. profits earned by a corporation on a diversified portfolio of stocks. profits received by corporations in the normal course of business. technological development. (p. a harvesting strategy means that a firm keeps a product going without significantly reducing marketing support. FALSE Dess . 117) The primary aim of strategic management at the business level is A. maximizing differentiation of products and/or services. built success from selling private label products to Loblaw. FALSE Dess . Dess . C. D.Chapter 05 #41 Learning Objective: 2 53 . B. if it can induce greater demand and thereby help a firm travel down the experience curve faster. 122-123) 358. protection from customer pressure to lower prices.356. use advertising to build brand image. Which of the following is a risk (or pitfall) of cost leadership? A. (p. Dess . B. put heavy emphasis on product engineering. overall cost leadership differentiation differentiation focus cost leadership focus Dess . D. C. Attempts to stay ahead of the competition may lead to gold plating. D. D.Chapter 05 #39 Learning Objective: 2 360. C. (p. Cost differences increase as the market matures. Dess . Cost cutting may lead to the loss of desirable features. focus on a narrow market segment. A manufacturing business pursuing cost leadership will likely A. rely on experience effects to raise efficiency. 119) The experience curve suggests that cutting prices is a good strategy A. 118) Primary value chain activities that involve the effective layout of receiving dock operations (inbound logistics) and support value chain activities that include expertise in process engineering (technology development) characterize what generic strategy? A. B. and the ability to better withstand cost increases from suppliers characterize which type of competitive strategy? A. 120-122) 359. B.Chapter 05 #38 Learning Objective: 3 (p. Producers are more able to withstand increases in suppliers' cost. B. C.Chapter 05 #36 Learning Objective: 2 357.Chapter 05 #40 Learning Objective: 2 361. differentiation overall cost leadership differentiation focus stuck-in-the-middle Dess . (p. D. in industries characterized by high economies of scale. 118) Convincing rivals not to enter a price war. B. D. Dess . in the decline stage of the industry life cycle. in the maturity stage of the industry life cycle. C. (p. C. North Face Holt Renfrew President's Choice all of the answers are correct Dess . 124) Which of the following is a good example of a firm that follows the strategy of differentiation? A. C.Chapter 05 #37 Learning Objective: 4 (p. Chapter 05 #45 Learning Objective: 3 366. Dess . an necessary evil of a cost-leadership strategy. Dess . 127) Developing uniqueness that is not valuable is A. focusing on quantity. D. B. B. Dess . focusing on quality. C. building the brand. thus experiencing less threat from substitutes than its competitors.Chapter 05 #42 Learning Objective: 2 363. Dess . differentiation overall cost leadership differentiation focus stuck-in-the middle Dess . improving brand image. D. (p. C.362. better customer service. 124) A firm can achieve differentiation through all of the following means except A. C. By increasing a firm's margins. higher market share.Chapter 05 #43 Learning Objective: 3 364. 129) Staples Business Depot's strategy in Canada is to deliberately limit its product selection for the purpose of A. It helps a firm to deal with supplier power and reduces buyer power since buyers lack comparable alternatives. it avoids the need for a low cost position. higher profit margins and lower costs.Chapter 05 #47 Learning Objective: 2 54 . C.Chapter 05 #46 Learning Objective: 4 367. B. D. Firms will enjoy high customer loyalty. D. (p. C. (p. (p. 127) Support value chain activities that involve excellent applications engineering support (technology development) and facilities that promote a positive firm image (firm infrastructure) characterize what generic strategy? A. Supplier power is increased because suppliers will be able to charge higher prices for their inputs. Dess . 127) Which of the following is false regarding how a differentiation strategy can help a firm to improve its competitive position vis à vis Porter's five forces? A. shedding customers. an essential feature of a differentiation strategy. D. B. the result of having brand-loyal customers become more sensitive to prices. C. decreased emphasis on competition based on price. D. adding additional product features.Chapter 05 #44 Learning Objective: 3 365. B. 127) High product differentiation is generally accompanied by A. (p. B. a potential pitfall of a differentiation strategy. (p. significant economies of scale. offering lower prices to frequent customers. B. must focus on the rising cost of inputs. about the same as firms that are "stuck-in-the-middle. 131) All of the following are potential pitfalls of a focus strategy except A. B. (p. must focus on governmental regulations. purposefully limited its menu and has stayed away from food fashions and fads and cut expenses from suppliers. Dess . C. 130) A firm following a focus strategy A. D. (p. C. 132) A ____________ can be defined as the total profits in an industry at all points along the industry's value chain. exploiting the profit pool concept for competitive advantage. must focus on a market segment or group of segments.Chapter 05 #52 Learning Objective: 5 373. focusers can become too focused to satisfy buyer needs. Dess ." C. higher than firms that achieve either a cost or a differentiation advantage. The Keg A. These are the following except A. cut expenses from suppliers. D. (p. erosion of cost advantages within the narrow segment. Dess . A. B. deriving benefits from highly focused and high technology markets. B.Chapter 05 #53 Learning Objective: 5 55 . C. D. (p. expanded its menu and embraced food fashions and fads. 131-134)competitive The text discusses three approaches to combining overall cost leadership and differentiation advantages.Chapter 05 #48 Learning Objective: 2 369. (p. purposefully limited its menu and has stayed away from food fashions and fads. D.368. C. C. D. Dess . coordinating the "extended" value chain by way of information technology. even product and service offerings that are highly focused are subject to competition from new entrants and from imitation.Chapter 05 #50 Learning Objective: 4 371. D.Chapter 05 #49 Learning Objective: 3 370. 129) The Keg Steakhouse has a simple operating formula. (p. must avoid entering international markets.Chapter 05 #51 Learning Objective: 5 372. profit maximizer revenue enhancer profit pool profit outsourcing Dess . lower than firms that achieve differentiation advantages but higher than firms that achieve cost advantages. automated and flexible manufacturing systems. Dess . B. B. 131) Research has consistently shown that firms that achieve both cost and differentiation advantages tend to perform A. all rivals share a common input or raw material. at about the same level as firms that achieve either cost or differentiation advantages. miscalculating sources of revenue and profit pools in the firm's industry. targeting too large a market that causes unit costs to increase.Chapter 05 #58 Learning Objective: 6 (p. Trends suggested by the market life cycle model are generally not reversible nor repeatable. and there is a growing trend to compete on the basis of price. cash flows may be negative. and the market growth rate is low. pricing can be volatile. (p. prices are declining rapidly. Market share gains by pioneers are usually easily sustained for many years. the emphasis on product design is very high. (p. Dess . introduction growth maturity decline Dess . C. There is a tendency to hold on to competitive advantages. minimal capital investment is required.Chapter 05 #56 Learning Objective: 6 377. Dess . and consumer demand is satiated. Which of the following descriptions of a product in the growth stage is true? A. Dess . 138-139) 56 ." B. There are few forms of differentiation. positive cash flows. Products or services offered by pioneers may be perceived as differentiated simply because they are new. There is an emphasis on product variety. D. 135-136)except: All of the following are potential pitfalls of an integrated overall low cost and differentiation strategy A. and there is an opportunity to establish strong brand recognition.Chapter 05 #54 Learning Objective: 4 375.Chapter 05 #55 Learning Objective: 6 376. and although the firm may be making a profit. It provides a "shorthand" for thinking about differences in strategic situations. It points out the need to maintain a differentiation advantage and a low cost advantage simultaneously. Strong brand recognition seldom serves as an important switching cost. D. underestimating the challenges and expenses associated with coordinating value-creating activities in the extended value chain. firms that fail to attain both strategies may end up with neither and become "stuck-in-the-middle. Dess . (p. C. B. (p. C. 138) In the ______ stage of the industry life cycle. D. 138) Which of the following statements about the introduction stage of the market life cycle is true? A. D. Part of the power of the market life cycle is its ability to serve as a short-run forecasting device. D. emphasis is placed on efficiency. 137) Which of these statements regarding the market life cycle is correct? A. the intensity of competition is low. It produces relatively large. B. C. C. There is an obsolescence of technologies.Chapter 05 #57 Learning Objective: 6 378. B.374. A. B. D. premium pricing. Dess . A. (p. C. and the emphasis on process design is high. B.Chapter 05 #59 Learning Objective: 6 (p. C. There is more price pressure in growth markets.Chapter 05 #62 Learning Objective: 6 383. retaliation by competitors whose customers are stolen. C. (p. D. competition is very intense. D. introduction growth maturity decline Dess . D.379. C. B. The growth market is characterized by A. It is difficult to gain market share in growth markets. firms should attempt to compete on the basis of _______. (p. Customers are brand loyal in the growth phase. C. 139) A market that mainly competes on the basis of price and has stagnant growth is characteristic of what life cycle stage? A. A. (p. B. experience is not an advantage. key technology no longer has patent protection. B. introduction growth maturity decline Dess . 139) In a given market. B. 139) As markets mature. and there is a growing need to compete on price. 138-139)life Which of the following is considered an accurate statement for a product in the growth period of its cycle? A. introduction growth maturity decline Dess . B. 138-139) 380.Chapter 05 #61 Learning Objective: 6 382. Dess . (p. 139) In the _______ stage of the industry life cycle. C. It is easier to develop technology in the growth phase. a growing trend to compete on the basis of price.Chapter 05 #64 Learning Objective: 6 57 .Chapter 05 #63 Learning Objective: 6 384. What stage of its life cycle is the market in? A. there are many segments. D.Chapter 05 #60 Learning Objective: 6 381. D. "in-kind" competition (from the same type of product). quick response differentiation cost leadership market focus Dess . B. 142) Research shows that the following are all strategies used by firms engaged in successful turnarounds except A. 139) The size of pricing and differentiation advantages between competitors decreases in which stage of the market life cycle? A. (p. 140) The most likely time to pursue a harvest strategy is in a situation of A. D. B. Dess . Advantages that cannot be duplicated by other competitors are difficult to achieve. expansion of a firm's product market scope. (p. C. Dess . global expansion. strong competitive advantage.Chapter 05 #66 Learning Objective: 6 387. D. 139) Which of the following is most often true of mature markets? A. business process reengineering. B. Dess . decline in the market life cycle. piecemeal productivity improvements. Dess . increased capacity utilization. (p. C. 142) Piecemeal productivity improvements during a turnaround typically does not involve A.Chapter 05 #68 Learning Objective: 6 389. C. B. C. C. 140) In the _________ stage of the industry life cycle.Chapter 05 #69 Learning Objective: 6 390. there are few segments. asset and cost surgery. D. The magnitude of pricing differences and product differentiation is larger than in the growth stage. (p. C. introduction growth maturity decline Dess . mergers and acquisitions. Some competitors enjoy a significant operating advantage due to increasing experience effects. (p. the emphasis on process design is low. selective product and market pruning. D. D.Chapter 05 #67 Learning Objective: 6 388.Chapter 05 #65 Learning Objective: 6 386. benchmarking. B. B. The market supports premium pricing. which attracts additional competitors. introduction growth maturity decline Dess . (p. and the major functional areas of concern are general management and finance. high growth.Chapter 05 #70 Learning Objective: 6 58 . D.385. A. Dess . Answers will vary. Answers will vary. 124) Use the value chain as a framework to explain how the competitive advantage of differentiation can create products and/or services that are highly valued by customers. Dess . Dess .Chapter 05 #76 Learning Objective: 5 59 .Chapter 05 #74 Learning Objective: 3 395.Chapter 05 #73 Learning Objective: 2 394.Chapter 05 #71 Learning Objective: 2 392. 122-123. Answers will vary. (p. 135-136) Discuss the risks associated with each of these forms of competitive advantage—cost leadership. 131) What are the benefits and risks associated with combining overall cost leadership and differentiation strategies? Answers will vary.Chapter 05 #72 Learning Objective: 3 393. Answers will vary. (p. 127) Explain how a differentiation strategy enables a business to address the five competitive forces in such a way that it can enjoy high levels of profitability. (p. Dess . Answers will vary.differentiation 131. (p. (p. Dess . 120-122)environment Explain how a cost leadership strategy permits a firm to address the five forces in their competitive so it can enjoy higher-than-normal profits. (p. and focus.Chapter 05 #75 Learning Objective: 4 396. 118) Discuss how a competitive advantage can be attained through cost leadership using the value chain concept.391. Dess . Chapter 05 #77 Learning Objective: 6 398. Answers will vary. FALSE Dess .Chapter 06 #2 Learning Objective: 1 400. (p. TRUE Dess . harvesting. (p.Chapter 06 #3 Learning Objective: 1 401. (p.Chapter 06 #1 Learning Objective: 1 399.Chapter 06 #6 Learning Objective: 2 404. 149) The two principal means by which firms achieve synergy through market power are: pooled negotiating power and corporate parenting.Chapter 06 #7 Learning Objective: 2 60 . TRUE Dess . FALSE Dess . Dess . Briefly explain the advantages and limitations of the four alternatives—maintaining. (p. 150) Similar businesses working together or the affiliation of a business with a strong parent can strengthen a firm's bargaining position relative to suppliers and customers. (p. (p. consolidating—associated with the decline stage of the market life cycle. FALSE Dess . (p.397. 149-150)products A newly acquired business must always have products that are similar to the existing businesses' to benefit from the corporation's core competence. 149) Sharing activities across business units can provide two primary benefits: cost savings and revenue enhancements. 155-158)administrative Vertical integration is attractive when market transaction costs are higher than internal costs. 155) One of the risks of vertical integration is that there may be problems associated with unbalanced capacities or unfilled demands along a firm's value chain.Chapter 06 #4 Learning Objective: 2 402. TRUE Dess . 149) A publishing company that purchases a chain of bookstores to sell its books is an example of unrelated diversification. (p. 140-141)exiting. TRUE Dess .Chapter 06 #5 Learning Objective: 1 403. TRUE Dess . (p.Chapter 06 #14 Learning Objective: 4 412. FALSE Dess . (p. TRUE Dess . TRUE Dess . (p. (p. the two main sources of synergy in unrelated diversification are parenting and financial synergies. FALSE Dess .Chapter 06 #9 Learning Objective: 3 407.Chapter 06 #13 Learning Objective: 4 411. 164) An advantage of mergers and acquisitions is that they can enable a firm to rapidly enter new product markets. 158-159)potential Restructuring requires the corporate office to find either poorly performing firms with unrealized or firms in industries on the threshold of significant. TRUE Dess . TRUE Dess . positive change. 152) Upon the acquisition of Microcell. 164) Acquisition of two or more counter-cyclical businesses is an example of using diversification to reduce risk. 160) Portfolio management matrices generally consist of two axes that reflect industry or market growth and the market share of a business. (p.405. 159) Portfolio management should be considered as the primary basis for formulating corporate-level strategies. Rogers was able to immediately obtain savings. 149) According to the text. (p.Chapter 06 #12 Learning Objective: 4 410.Chapter 06 #8 Learning Objective: 1 406.Chapter 06 #15 Learning Objective: 2 61 . (p. (p. 166) Through joint ventures. TRUE Dess .Chapter 06 #10 Learning Objective: 3 408. firms can directly acquire the assets and competencies of other firms.Chapter 06 #11 Learning Objective: 3 409. TRUE Dess . 149) Corporate-level strategy addresses two related issues: A. (p.Chapter 06 #17 Learning Objective: 3 415. C. B. what businesses to compete in. 168-169)commitments Real options analysis helps managers make investment decisions involving large irreversible of financial resources. FALSE Dess . Dess . (p. (p. how to compete in a given business. TRUE Dess . how to improve a firm's infrastructure. the target firm's managers will be paid a significant severance package. D. FALSE Dess . TRUE Dess . FALSE Dess .Chapter 06 #20 Learning Objective: 6 418. reliance on written contracts to delimit responsibilities and enforce compliance is vital.413. how to integrate primary activities. (p. how to maintain ethical behaviour. (p. 172) Greenmail is an offer by a company. how these businesses can achieve synergy. 168) An advantage of internal development is that firms do not have to combine activities across the value chains of many companies and merge company cultures.Chapter 06 #19 Learning Objective: 5 417.Chapter 06 #22 Learning Objective: 1 62 . 172) A golden parachute is a prearranged contract with managers specifying that in the event of a hostile takeover. threatened by takeover. 164-165)well The potential advantages of strategic alliances and joint ventures include entering new markets as as developing and diffusing new technologies.Chapter 06 #16 Learning Objective: 3 414. to offer its stock at a reduced price to a third party. (p. the application of technology.Chapter 06 #21 Learning Objective: 6 419. how to increase shareholder wealth. (p. 167) For strategic alliances to be effective.Chapter 06 #18 Learning Objective: 4 416. The new business must be similar to existing businesses to benefit from a core competence.Chapter 06 #23 Learning Objective: 2 421. The collection of competencies should be unique. Primary value chain activities Cultures Core competencies Horizontal integrations Dess . flexibility is reduced. C.Chapter 06 #26 Learning Objective: 2 424. Which one of the following is not one of these requirements? A. lower transaction costs and improved coordination are vital and achievable through vertical integration. Dess . C. The new business must have an established large market share. the similarity required for sharing core competencies must be in the value chain. 150-151)there For a core competence to be a viable basis for the corporation strengthening a new business unit. using portfolio analysis. A. (p.420. they are A. B. so that they cannot be easily imitated. it is important that A. sharing activities. Dess .Chapter 06 #27 Learning Objective: 2 63 . D. the minimum efficient scales of two corporations are different. are three requirements. C. various segregated specializations will be combined. D. (p. and market and merchandise diverse products and services. C. 150-151)diversification Sharing core competencies is one of the primary potential advantages of diversification. 151) When management uses common production facilities or purchasing procedures to distribute different but related products. Dess . achieving process gains. integrate multiple streams of technologies. B.Chapter 06 #25 Learning Objective: 2 423. (p. D. providing a more stationary position in the competitive environment. (p. (p. In order for to be most successful. D. B. Dess . the target market is the same. D. the products use similar distribution channels. B.Chapter 06 #24 Learning Objective: 2 422. building on core competencies. The competence must help the business gain strength relative to its competition. even if the products are very different. C. the methods of production are the same. 150) __________ reflect the collective learning in organizations such as how to coordinate production skills. 155) It may be advantageous to vertically integrate when A. not in the product. B. monitoring costs. and reduced flexibility are disadvantages associated with A. transaction costs and internal administrative costs are equal. A. positive change. D.Chapter 06 #33 Learning Objective: 3 64 . B. additional administrative costs associated with managing a more complex set of activities increased. negotiating costs. (p. 156) Unbalanced capacities that limit cost savings. D. transaction costs are higher than internal administrative costs. Parenting Restructuring Leveraging core competencies Sharing activities Dess . (p. Dess . (p. D. problems developed with unbalanced capacities along the value chain. divestment. Dess . Dess . vertical integration. the firm's suppliers of raw materials are often unable to maintain quality standards. the clients of Fido. customer needs are evolving. C. difficulties in combining specializations. C. B. the firm's suppliers willingly cooperate with the firm.Chapter 06 #28 Learning Objective: 2 426. C. Dess .Chapter 06 #32 Learning Objective: 2 430. B. instantly gained broader market coverage and better reception for their phones. 158) _______ is when a firm tries to find and acquire either poorly performing firms with unrealized potential or firms in industries on the threshold of significant. 157) Transaction costs include all of the following costs except A. 156) A firm should consider vertical integration when A. Dess . (p. B. internal administrative costs are higher than transaction costs. D. search costs are higher than monitoring costs. C. costs and associated expenses increased with expanded overhead and capital expenditures.425. D. B. 152) When Rogers acquired Microcell. (p. C. B. D. Microcell's brand name A. search costs. 157) Vertical integration is attractive when A. (p. strategic alliances.Chapter 06 #29 Learning Objective: 2 427. agency costs. the competitive situation is highly volatile. horizontal integration.Chapter 06 #31 Learning Objective: 2 429. C.Chapter 06 #30 Learning Objective: 2 428. B. 160) In the BCG (Boston Consulting Group) Matrix. or ability to share. D. D. star. cash cow. a business that has a low market share in an industry characterized by high market growth is termed a A. D. (p. D. competition from Japan. 155) According to the text. a business that currently holds a large market share in a rapidly growing market and that has minimal or negative cash flow would be known as a A. 165) Molson of Montreal and Coors of Colorado merged their operations in order to stand up to A. Dess . dog. B. They are most helpful in helping businesses develop types of competitive advantage. question mark.Chapter 06 #35 Learning Objective: 3 (p. infrastructures or build on core competences.g.Chapter 06 #39 Learning Objective: 4 65 . and technology restructuring. horizontal integration. Position in the matrix suggests a need for. dog.Chapter 06 #34 Learning Objective: 2 432. (p. Dess . capital restructuring.Chapter 06 #36 Learning Objective: 3 434. D. (p. C. 160) Portfolio management frameworks (e. C. C. star. 160) When using a BCG matrix.431. Businesses are plotted on a 3-dimensional grid. continuing consolidation in the global beer industry. B. C. Dess . problem child. Dess . of A. departmental business corporate international Dess . C.Chapter 06 #38 Learning Objective: 3 436. vertical integration. Dess . Grid dimensions are based on external environments and internal capabilities/market positions. asset restructuring. (p. 159-160) 433. B. cow. C. substantial cash outlays to maintain market share. BCG matrix) share which of the following characteristics? A. (p. to expand across markets.Chapter 06 #37 Learning Objective: 3 435. D. continued diversification in the beverage market.. Portfolio management matrices are applied to what level of strategy? A. B. B. Canfor Corporation of Vancouver is a good example from the forest industry of having followed a successful strategy. A. C.Chapter 06 #45 Learning Objective: 5 66 .Chapter 06 #41 Learning Objective: 4 439. but not the obligation to engage in a transaction. a small investment upfront can be followed by a series of subsequent investments. C. difficulties in integrating the activities and resources of the acquired firm into a corporation's on-going operations. gained a footprint into the Quebec market by A. with a strong presence in Ontario and Western Canada.Chapter 06 #43 Learning Objective: 4 441. C. not shortchanging your partner. acquiring Provigo. the right and obligation to engage in a transaction. global integration. expensive premiums that are frequently paid to acquire a business. joint ventures mergers and acquisitions strategic alliances joint ventures and strategic alliances Dess . there can be many cultural issues that can doom an otherwise promising acquisition. the obligation. (p. (p. 166) A company offering local telecommunications service combines resources with an international company that manufactures digital switching equipment to research a new type of telecommunications technology. D. D. Dess . and developing and diffusing new technologies. Dess . but the environment is uncertain. 163-164) 438. C. Dess . B. 169) Options exist when the owner of the option has A. reducing manufacturing (or other) costs in the value chain.Chapter 06 #42 Learning Objective: 4 440. establishing a clear understanding between partners. divestment. (p. B. The downsides or limitations of mergers and acquisitions include all of the following except A. 163) Cooperative relationships such as _______ have potential advantages such as entering new markets.Chapter 06 #40 Learning Objective: 4 (p.437. it is a slow means to enter new markets and acquire skills and competences. D. working hard to ensure a collaborative relationship between partners. B.Chapter 06 #44 Learning Objective: 5 442. Dess . the total investment required is small. 169) Real options analysis is most appropriate when A. but not the right to engage in a transaction. (p. C. (p. B. strategic alliance. 165) Loblaw. the investment required can be justified by Discounted Cash Flow (DCF) techniques. D. C. D. B. Dess . the right. there is no prospect of obtaining additional knowledge before making subsequent investments. joint diversification. B. neither the right nor the obligation to engage in a transaction. This is an example of A. D. B. D. D. they looked to Springfield as a A.Chapter 06 #49 Learning Objective: 6 447. only allowed in Quebec. golden parachute.Chapter 06 #48 Learning Objective: 6 446. pay given to executives fired because of a takeover. C. B. 168) Which of the following statements regarding internal development as a means of diversification is false? A. a clause requiring that huge dividend payments be made upon takeover. B. Many companies use internal development to extend their product lines or add to their service offerings. Dess . Dess . 172) An antitakeover tactic called greenmail is A. poison pill.Chapter 06 #47 Learning Objective: 6 445. Firms can often develop products or services at a lower cost if they rely on their own resources instead of external funding.Chapter 06 #50 Learning Objective: 6 67 . B. (p. financial inducements offered by a threatened firm to stop a hostile suitor from acquiring it. golden parachute greenmail poison pill scorched earth Dess . managers of a firm involved in a hostile takeover approaching a third party about making the acquisition. white knight. C. C. B. greenmail. (p. Dess . An advantage of internal development is that it is generally faster than other means of diversification and firms can benefit from speed in developing new products and services. D. C. C.Chapter 06 #46 Learning Objective: 4 444. D. A. D. 172) An antitakeover tactic called (a) ___________ is when a firm offers to buy shares of their stock from a company planning to acquire their firm at a higher price than the unfriendly company paid for it. (p.443. encouraged in Canada. The firm is able to capture the wealth created without having to "share the wealth" with alliance partners. 173) The term "golden parachute" refers to A. borrowed from NAFTA. Dess . (p. 173) When Canadian family-controlled firm Schneider's wanted to block Maple Leaf Foods. prohibited in Canada. (p. (p. 159-163)developed Explain the uses and limitations of portfolio management matrices such as the growth-share matrix by the Boston Consulting Group (BCG). (p. Dess . Answers will vary. Dess . Dess .448. (p.Chapter 06 #53 Learning Objective: 2 (p. Briefly explain the advantages and disadvantages of vertical integration. Dess . What are the primary benefits and risks associated with related diversification? Answers will vary.Chapter 06 #55 Learning Objective: 2 453. 155-158) 451. Dess .Chapter 06 #56 Learning Objective: 3 68 . 158-159) 450.Chapter 06 #52 Learning Objective: 3 (p.Chapter 06 #51 Learning Objective: 1 (p.Chapter 06 #54 Learning Objective: 2 452. What are the primary benefits and risks associated with unrelated diversification? Answers will vary. 155-158)integrate? What are some of the key issues to take into account when considering whether or not to vertically Answers will vary. Answers will vary. Dess . 157) Explain how transaction cost analysis can provide insights into vertical integration decisions. Answers will vary. 149-150) 449. growth for growth's sake. 170-173)managers' Discuss how the potential benefits of diversification may be adversely affected by conflicts between interests and shareholders' interests. anti-takeover tactics. (p. they had merged with Carling O'Keefe. FALSE Dess . 178) The trend towards worldwide markets makes it easier to predict where competitors will spring up. (p. (p.Chapter 06 #58 Learning Objective: 4 456. 166-168)partnership. Strategic alliances are arrangements in which two firms join forces and form a cooperative Discuss the advantages and disadvantages of strategic alliances as well as guidelines for reducing conflict between the partners. Answers will vary. (p. (p. (p. Dess . 177) Prior to Molson's investment in Brazil.Chapter 07 #2 Learning Objective: 1 69 . Dess . Dess .454. 163-166)diversification. 168-170)kind Why is Real Options Analysis (ROA) becoming more popular with strategic decision makers? What of strategic decisions are most amenable to Real Options Analysis? Answers will vary. Dess .Chapter 07 #1 Learning Objective: 1 459. This merger did not yield significant accomplishments. TRUE Dess . Answers will vary.Chapter 06 #57 Learning Objective: 4 455.Chapter 06 #59 Learning Objective: 5 457.Chapter 06 #60 Learning Objective: 6 458. Include in your discussion factors such as egotism. Summarize the advantages and disadvantages of mergers and acquisitions as a means of Answers will vary. 184) Many international firms are increasing their efforts to market their products and services to countries such as India and China as the ranks of their middle class continue to increase.Chapter 07 #3 Learning Objective: 2 461. 181) Demanding domestic consumers tend to push firms to move ahead of companies in other countries where consumers are less demanding and more complacent. (p. 184) During the 1990s Nortel frequently sold its earlier generation telephone switches to developing countries at lower costs." there are four broad attributes that. 186) International expansion can extend the life cycle of a product that is in its maturity stage in a firm's home country. as a constitute a nation's competitiveness in an industry." the pool of resources that a firm (or nation) has is much more important than the speed and efficiency with which these resources are deployed. FALSE Dess . TRUE Dess . (p. 186) An advantage of international expansion is that it can enable a firm to optimize the location of every activity in its value chain.Chapter 07 #7 Learning Objective: 2 465.Chapter 07 #5 Learning Objective: 2 463.Chapter 07 #10 Learning Objective: 3 70 . TRUE Dess . TRUE Dess . 180-183)system. (p.460. 180) With regard to "factor conditions. (p. (p. In Michael Porter's "diamond of competitive advantage.Chapter 07 #9 Learning Objective: 3 467. TRUE Dess . intense rivalry in domestic markets does not force firms to look outside their national boundaries for new markets. TRUE Dess . (p.Chapter 07 #4 Learning Objective: 2 462. (p.Chapter 07 #6 Learning Objective: 2 464. 184) Typically. (p. TRUE Dess .Chapter 07 #8 Learning Objective: 3 466. FALSE Dess . and used the revenues for R&D. Chapter 07 #18 Learning Objective: 4 71 .468. and customs can represent significant management risks when firms enter foreign markets. TRUE Dess . (p.Chapter 07 #14 Learning Objective: 4 472. 192) The need to attain economies of scale encourages multinational firms to operate under a multidomestic strategy. (p. FALSE Dess . the most effective strategies are neither purely multidomestic nor purely global. TRUE Dess .Chapter 07 #17 Learning Objective: 4 475. (p. (p. (p. TRUE Dess .Chapter 07 #16 Learning Objective: 4 474. TRUE Dess . 191) Two opposing pressures that managers face when they compete in foreign markets are cost reduction and adaptation to local markets. 189) According to the text.Chapter 07 #13 Learning Objective: 4 471.Chapter 07 #11 Learning Objective: 3 469. 192) Within a worldwide market. (p. (p. FALSE Dess . Canadian firms around the world were targets of animal rights groups who did not approve of seal hunting in Newfoundland. 186) IMAX claims that every new theatre that opens somewhere in the world lowers the cost of production of its unique movies. 188) Differences in foreign markets such as culture. 191) Among Theodore Levitt's assumptions that would favour a global strategy is that consumers around the world are becoming less price-sensitive. 192) A multidomestic strategy is the most appropriate strategy for international operations because it drives economies of scale as far as possible and provides a middle-of-the-road product appealing to the largest number of consumers in every market.Chapter 07 #12 Learning Objective: 3 470.Chapter 07 #15 Learning Objective: 3 473. FALSE Dess . TRUE Dess . language. (p. local adaptation. (p.476. 196) To address the challenges of a multidomestic strategy.Chapter 07 #21 Learning Objective: 5 479. (p. (p.Chapter 07 #19 Learning Objective: 4 477. TRUE Dess . TRUE Dess . (p.Chapter 07 #23 Learning Objective: 5 481. 198) A key tenet of a transnational strategy is improved adaptation to all competitive situations as well as flexibility by capitalizing on communication and knowledge flows throughout the organization.Chapter 07 #22 Learning Objective: 5 480. centralized production facilities to maximize economies of scale. TRUE Dess . 200) Corporations with multiple foreign operations that act very independently of one another are following a multidomestic strategy. 200) Multinational firms following a transnational strategy strive to optimize the tradeoffs associated with efficiency. 196) Canadian steel company Dofasco looked at cultural challenges in expanding and decided to stick to its famous motto: "our strength is people". TRUE Dess . FALSE Dess . (p. and learning. Maple Leaf Foods customizes its prepared meats to meet local tastes.Chapter 07 #25 Learning Objective: 5 483. 200) A multidomestic strategy would likely include the use of high volume.Chapter 07 #26 Learning Objective: 5 72 .Chapter 07 #20 Learning Objective: 5 478. TRUE Dess . (p. (p. 192) Industries in which proportionally more value is added in upstream activities are more likely to benefit from a global strategy than those in which more value is added downstream (closer to the customer). 200) In a global strategy a firm operates all its businesses under a single common strategy regardless of location.Chapter 07 #24 Learning Objective: 5 482. (p. TRUE Dess . FALSE Dess . Chapter 07 #32 Learning Objective: 1 490. policies that protect the nation's domestic competitors. (p. D. demand characteristics. dominated by U. increased to fourth place.Chapter 07 #31 Learning Objective: 2 489.Chapter 07 #33 Learning Objective: 2 73 . C. all of the answers are correct Dess . strong.484. B. consolidated. 201) Typically. a monopolistic situation. high strong. fallen to third place. 203) A franchise generally expires after a few years whereas a license is designed to last into perpetuity. (p. a large increase in international investment. C. (p. 178) A major trend in international developments includes A. low Dess . strong.Chapter 07 #30 Learning Objective: 1 488. high weak. (p. FALSE Dess . a growing recognition of an international managerial perspective. C. D. increased to second place. (p. D.Chapter 07 #28 Learning Objective: 6 486. Dess . B. FALSE Dess . 182-183)bases.S. fragmented. the Brazilian market was A. C. related and supported industries. D. low strong. Rivalry is intense in nations with conditions of ________ consumer demand. B. factor conditions. the best method of entry into a foreign market is the establishment of a wholly owned foreign subsidiary so that the parent organization can maintain a high level of control. stayed the same. (p. 180) In Michael Porter's framework all of the following factors affect a nation's competitiveness except A. Dess . 177) At the time Molson invested into the Brazilian beer market in 2002. weak. B. C. weak.Chapter 07 #27 Learning Objective: 6 485. greater international trade and operations. B. Dess .Chapter 07 #29 Learning Objective: 1 487. (p. A. that company's market share has A. weak. 177) Since Molson's investment in Kaiser in Brazil. brewers. ___________ supplier and ____________ new entrant potential from related industries. D. D.Chapter 07 #38 Learning Objective: 3 74 . firms that have experienced intense domestic competition are A. C.Chapter 07 #36 Learning Objective: 3 494. because the company views the United States as a risky place to expand due to the actions of the U. Dess . 182-183) 492. a company should not trade idiosyncratic preferences in product features for higher economic returns. (p. as part of US government-initiated measures to discourage illegal immigration. B. unlikely to have the time or resources to compete abroad. D. because the local language is English. the manager should follow a multidomestic strategy to maximize the economic benefits to the company. C.S. 184) By the end of the 20th century. B. to take advantage of the lower tax rates in Mexico. (p. most likely to design strategies aimed primarily at the domestic market. D. B.Chapter 07 #34 Learning Objective: 2 (p. the world's population exceeded 6 billion with Canada representing A. Dess . B. Dess . Department of Justice. to take advantage of the low cost of labour. less than . 187) Pressures to "reduce costs" require that A. to sell products into the growing Mexican market. multinational companies set up maquiladora operations south of the US-Mexico border primarily A. Dess . 187) Many U. C. because England is an ally of the United States. 187) Microsoft decided to establish a corporate research laboratory in Cambridge.491. England A. more likely to design strategies and structures that allow them to successfully compete abroad. (p.5 percent slightly more than 5 percent about 320 million less than 3. (p. more likely to demand protection from their governments.S. C. C.2 million Dess .Chapter 07 #37 Learning Objective: 3 495. D. D. B. the company needs to supplement the local foreign economy in a manner specified by the local government.Chapter 07 #35 Learning Objective: 3 493. to access the outstanding technical and professional talent available there so that they can attain world-class excellence in selected value-creating activities. a company must pursue what is economically beneficial to the company including maximizing economies of scale and learning curve effects. According to Michael Porter. B. it did not translate into Spanish.Chapter 07 #43 Learning Objective: 5 75 . C. B. Dess . 196) When Dofasco approached the cultural differences of operating in Mexico. (p. MNCs can compete with aggressive pricing on low cost products that meet the common needs of global consumers. (p. D. global multidomestic transnational overall cost leadership Dess .496. selling entertainment programs into the Korean market. C. D. (p. B. (p. B. Dess . Customer needs and interests are becoming more dissimilar. D.Chapter 07 #40 Learning Objective: 4 498. Mexican workers like a "flat organization" with no supervision. substantial economies of scale are easily achieved. 196) High pressure for local adaptation combined with low pressure for lower costs would suggest what type of international strategy? A. C. 186) Lingo Media of Toronto was mentioned in Chapter Seven as being a good example of a small company A.Chapter 07 #39 Learning Objective: 3 497. 193) Low pressure for local adaptation combined with low pressure for lower costs would suggest what type of strategy? A.Chapter 07 #41 Learning Objective: 5 499. (p. 191) Which one of the following is one of Theodore Levitt's assumptions supporting a pure global strategy? A. B. penetrating the Chinese market for ESL teaching materials. that compete in industries in which consumer preferences vary substantially in each country. Dofasco's motto "our strength is people" was a problem because A. If the world markets are treated as heterogeneous. C. D. Consumers are willing to pay more for specific product features. international global multidomestic transnational Dess . D. Latin American customers wanted a focus on the product. Mexican workers typically expect more hierarchical structures and want managers to supervise. in industries that are expanding very rapidly. C. Dess .Chapter 07 #42 Learning Objective: 5 500. a firm with only one manufacturing location must export its product—some of which may be a great distance from the operation. (p. few standardized. decreasing shipping and transportation costs inherent in local production. B. offering flexibility in adjusting to local laws and customs. greater difficulty in transferring knowledge across countries. B. (p. Dess . (p.Chapter 07 #44 Learning Objective: 5 502. 196) All of the following are limitations of a multidomestic strategy except A. limited ability to adapt to local markets. (p. few Dess . offering flexibility in applying R&D to meet country-specific needs. the geographic concentration of any activity may also tend to isolate that activity from the targeted markets. several standardized. D. less ability to realize cost savings through scale economies. increasing the freedom of individual business units to adapt to local tastes. single locations may lead to higher tariffs and transportation costs. 196) Elements of a multidomestic strategy may facilitate the competitive advantage of cost leadership by A. D. economies of scale gained through centralized production of standardized products. 194) All of the following are risks associated with a global strategy except A. tailoring products to meet country-specific needs. C. Dess .501. the creation of a worldwide network to achieve consistent service regardless of location. decreasing duplication of inventories which are often involved in having multiple plants producing similar products. C. (p.Chapter 07 #49 Learning Objective: 5 76 . C. C. D. 194) Firms following a global strategy strive to offer ______________ products and services as well as locate manufacturing. the concentration of activities may increase dependence on a single facility. D. the ability to locate activities in optimal locations. C. Dess .Chapter 07 #47 Learning Objective: 5 505. D. and marketing activities in _____________ locations. R&D.Chapter 07 #46 Learning Objective: 5 504. A. several a wide variety of. B.Chapter 07 #48 Learning Objective: 5 506.Chapter 07 #45 Learning Objective: 5 503. B. a wide variety of. 194) All of the following are limitations of a global strategy except A. B. Dess . B. D. (p. single locations may lead to higher tariffs and transportation costs. the pressures for local adaptation may elevate the firm's cost structure. C. Dess . concentrating an activity in a single location makes the rest of the firm dependent on that location. 194) As in the case of Siebel Systems. may lead to "overadaptation" as conditions change. elements of a global strategy may facilitate the competitive advantage of differentiation by A. consider licensing or franchising its operations. licensing. D. units adapt to special circumstances only they face. pursue a strategy that combines the uniformity of a global strategy and the specificity of a multidomestic strategy in order to achieve optimal results. 201) Which of the following describes the most typical order of entry into foreign markets? A. B.507.Chapter 07 #54 Learning Objective: 6 77 . and the entire organization draws upon relevant corporate resources. a global strategy a transnational strategy an international strategy a multidomestic strategy Dess . 200) In order to realize the strongest competitive advantage. 198) Which of the following is a disadvantage of a transnational strategy? A. exporting. franchising. C. franchising. C. and wholly owned subsidiary licensing. (p. start off by implementing a wholly owned foreign subsidiary so it can maintain standards identical to those at home. (p. D. require that all of their various business units follow the same strategy regardless of location. (p. ensure that all business units follow a strategy strictly tailored to their respective locations. (p. form a joint venture with a reputable foreign producer.Chapter 07 #51 Learning Objective: 5 509. joint venture. D. and wholly owned subsidiary exporting. attempt to use the strategy that was most successful in their home country. and wholly owned subsidiary Dess . consider implementing a low risk/low control strategy such as exporting. franchising. joint venture. B. licensing. C. franchising. Dess . (p. less ability to realize cost savings through scale economies limited ability to adapt to local markets unique managerial challenges in fostering knowledge transfer single locations may lead to higher tariffs and transportation costs Dess . licensing. firms engaged in worldwide competition must A. 201) A domestic corporation considering expanding into international markets for the first time will typically A. and wholly owned subsidiary exporting. joint venture. B. B. D. exporting. D. These are all attributes of which type of strategy? A. C. C. 200) Units coordinate their activities with headquarters and with one another.Chapter 07 #52 Learning Objective: 5 510. Dess . joint venture.Chapter 07 #50 Learning Objective: 5 508.Chapter 07 #53 Learning Objective: 6 511. B. D. D. C. licensing. Dess .Chapter 07 #56 Learning Objective: 6 514. B. exporting. 203-204) 516.512. B. a franchise contract involves less control and less risk. The difference between a franchise and licensing contract is that A. a licensing contract covers more aspects of operations. joint venture. 205-206)capabilities ___________ are most appropriate where a firm already has the appropriate knowledge and that it can leverage rather easily through multiple locations in many countries. (p. Dess . joint venture. C.Chapter 07 #55 Learning Objective: 6 513. intra-corporate inflows. strategic alliance. B. a franchise contract is more specific and usually longer in duration.Chapter 07 #59 Learning Objective: 6 517.Chapter 07 #58 Learning Objective: 6 (p.Chapter 07 #57 Learning Objective: 6 (p. dividends. D. is a good example of expansion through A. 201-202)be The form of entry strategy into international operations that offers the lowest level of control would A. D. a franchise contract must include a foreign government. (p. C. transfer prices. C. wholly owned subsidiary. B. D. B. franchising. Dess . D. C. B. franchising operation. (p. 206) The text mentions Canadian firms Lingo Media and Hydrogenics as having directed all their efforts to overseas markets with A. (p. Dess . little local presence at home in Canada.Chapter 07 #60 Learning Objective: 6 78 . licensing franchising joint ventures exporting Dess . A. 205) The textbook's description of the international expansion of Edmonton-based engineering firm Stantec Inc. C. 201-202) 515. Foreign direct investment includes the following form of entry strategy: A. Joint ventures Strategic alliances Licensing agreements Wholly owned subsidiaries Dess . Dess . cost reduction and local adaptation. 184-190)markets. Answers will vary." Answers will vary. Explain Michael Porter's "diamond of national competitiveness. what are the three assumptions that favour the pursuit of a "pure" global strategy? Briefly provide counterarguments to each assumption. (p. Dess . Dess .518. (p. Summarize the most important benefits and risks associated with diversification into global Answers will vary. Answers will vary. Discuss the importance of international expansion as a viable diversification strategy. 180-183) 520. Dess . Dess .Chapter 07 #64 Learning Objective: 4 522. pressures to operate with a global or multidomestic strategy.Chapter 07 #66 Learning Objective: 5 (p. Dess .Chapter 07 #63 Learning Objective: 3 521. 198-200) 79 .Chapter 07 #62 Learning Objective: 2 (p.Chapter 07 #61 Learning Objective: 1 (p.Chapter 07 #65 Learning Objective: 4 523. (p. What are some of the primary benefits and risks of transnational strategies? Answers will vary. 191) According to Theodore Levitt. 191-193)create Explain how the two opposing forces facing MNC managers. Answers will vary. respectively. 177-180) 519. Chapter 08 #2 Learning Objective: 1 527. 201-206)international What are the major advantages and disadvantages of the six basic types of entry strategies for expansion? Answers will vary. end users typically greater bargaining power. TRUE Dess . 211) With only a few exceptions such as Toronto's Book City. FALSE Dess . 214-125)have Because a large amount of consumer information is available via the Internet. 211) Because of the dot-com crash in 2000 and 2001. thousands of neighbourhood bookstores have disappeared and the industry has consolidated.Chapter 08 #5 Learning Objective: 1 530. (p. FALSE Dess .Chapter 08 #1 Learning Objective: 1 526. (p. FALSE Dess .Chapter 08 #6 Learning Objective: 1 531. (p. TRUE Dess . (p. 211) The Internet has created a new climate for business in which the traditional principles of strategic management are less important. it is unlikely that the Internet will have a positive impact on the economy in the long term. FALSE Dess . (p. 214) An end user's switching costs are potentially much higher because of the Internet. 214-215)make The Internet suppresses the bargaining power of buyers by providing them with more information to buying decisions.Chapter 08 #7 Learning Objective: 1 80 . 211) Overall. TRUE Dess . (p.Chapter 08 #4 Learning Objective: 1 529. Dess .Chapter 07 #67 Learning Objective: 6 525. 44% of Canadians have tried e-commerce and most first-time buyers go back for more.Chapter 08 #3 Learning Objective: 1 528.524. (p. (p. TRUE Dess . (p. 221-222)competitive Business models can be defined as methods companies use to create value and earn profits in a environment. 536. TRUE Dess .532.Chapter 08 #14 Learning Objective: 3 539. 216-217)tasks. 213) Canadian mining company Goldcorp posted geological data online. it is very difficult for suppliers to create purchasing techniques that lower switching costs. (p. The Internet heightens the threat of substitutes because it creates new ways to accomplish the same TRUE Dess .Chapter 08 #8 Learning Objective: 1 533.Chapter 08 #16 Learning Objective: 3 81 . TRUE Dess . 216) Reintermediation is responsible for an overall reduction in business opportunities. (p. allowing engineers around the world to give new insights as to any future potential.Chapter 08 #10 Learning Objective: 1 535. (p. (p. FALSE Dess . (p. TRUE Dess .Chapter 08 #13 Learning Objective: 2 538.Chapter 08 #9 Learning Objective: 1 534. 221) Content such as entertainment programming does little to improve the value proposition of a website.Chapter 08 #11 Learning Objective: 1 (p. making payments. FALSE Dess . FALSE Dess . and taking delivery.Chapter 08 #12 Learning Objective: 3 537. (p. 215) Because of the Internet. 215) Channel conflict occurs when buyers can access the same products through several different outlets. 221) Most analysts agree that use of the Internet will lower transactions costs. 220) Evaluation activities add value by helping firms finalize transactions including negotiating contracts.Chapter 08 #15 Learning Objective: 3 540. (p. FALSE Dess . (p. 221-222)television A commission-based business model. 225) One way the Internet is creating opportunities for firms with differentiation strategies is by enabling mass customization. (p. 225-226) 545.Chapter 08 #20 Learning Objective: 4 (p. D. broadband. Toronto Book City.Chapter 08 #17 Learning Objective: 3 542. high fidelity technologies.Chapter 08 #18 Learning Objective: 4 543. B. developing a niche appealing to bibliophiles.541.Chapter 08 #22 Learning Objective: 1 547. TRUE Dess . is similar to the broadcast model in which viewers watch shows produced with revenues from commission fees. B. 227-228)implement The Internet offers few advantages for focusers because niche players and small companies cannot Internet capabilities as effectively as their larger competitors.Chapter 08 #21 Learning Objective: 4 546. D. 227-228)technologies Incumbent firms that thought a niche market was too small to enter in the past may use Internet to enter that segment and compete with focusers. using a human resources consultant. (p. Many differentiation advantages are diminished by the Internet. contracting supply to small stores. Dess . analog technologies. 212) Technologies that use information in the form of electronic signals or "bits" are called A. digital technologies. when applied to the Internet.Chapter 08 #23 Learning Objective: 2 82 . was able to survive industry consolidation by A. (p. 210) The company in the opening case. Dess . (p. FALSE Dess . (p. FALSE Dess . TRUE Dess .Chapter 08 #19 Learning Objective: 4 544. C. C. TRUE Dess . choosing a splendid Internet service provider. Chapter 08 #29 Learning Objective: 2 83 . D. the telephone. D. C. the automobile. advances in wireless technology. manufacturing-intensive industries such as microprocessors. (p. C. D. 211) The only technology ever adopted by consumers more rapidly than the Internet was A. B.Chapter 08 #25 Learning Objective: 1 550. (p.548. B. institutional and regulatory barriers. research-intensive industries such as pharmaceuticals. television. older companies new entrants the Internet Dess . strong vested interests. speed and extent of Internet connectivity. D. B.Chapter 08 #24 Learning Objective: 2 549. increases the threat of new entrants. (p. that is creating new business opportunities. D. decreases the threat of new entrants. C. increases supplier power. (p. not the sustainability of competitive advantages. B. (p. Dess . C. A. C. it A. D. that matters to a company's bottom line. all of the answers are correct Dess . none of the answers are correct Dess . 212) According to the text. 213) Goldcorp credits _________________ for allowing it to obtain insight as to how to re-open its Red Lake gold mine. that is making strategizing in the Internet economy less important. globalization larger. makes it easier to build customer loyalty. Dess . B. Dess . not the technology itself.Chapter 08 #28 Learning Objective: 1 553. 214) Because the Internet lowers barriers to entry in most industries. ______________________________________________" A.Chapter 08 #26 Learning Objective: 2 551.Chapter 08 #27 Learning Objective: 2 552. information-intensive industries such as financial services. 212) All of the following factors are likely to be impediments to growth in Internet use except A. that has altered the structure of the American economy. the types of industries that are likely to be most radically transformed by the Internet are A. 213) Complete the following sentence: "It is the actual use of the Internet for profitable transactions. C. (p. B. D. (p. low-cost ordering capabilities. D. (p. the Internet inhibits the ability of suppliers to offer highly differentiated products or services. all of the answers are correct Dess . The Internet makes it easier for consumers to obtain the information needed to compare prices and make buying decisions. likely to have greater bargaining power because of the Internet. (p. software that links buyers to a supplier's website has created rapid. channel conflict. C. B. the process of disintermediation makes it possible for some suppliers to reach end users directly. 214) End users are A. B. the threat of substitutes is heightened because the Internet A.Chapter 08 #32 Learning Objective: 1 557. B.Chapter 08 #35 Learning Objective: 1 84 . introduces new ways to accomplish the same tasks.Chapter 08 #34 Learning Objective: 1 559. B. Dess . Internet technologies are making the cost of switching products or services lower. D. 216) The creation of opportunities for new functions within the value chain is known as A.Chapter 08 #33 Learning Objective: 1 558. C.Chapter 08 #30 Learning Objective: 1 555. procurement technologies eliminate the need for suppliers. (p. Internet technologies cannot easily be imitated. increases output per unit of cost. The Internet isolates customers which makes differential pricing possible. the growth of new Web-based businesses has created more outlets for suppliers to sell to.554. D. some suppliers have created Web-based purchasing systems that encourage switching. B. C. Internet purchasing practices are shifting emphasis to price competition which is making consumers less loyal. (p. 214) Which of the following is not one of the reasons why the bargaining power of buyers is increasing because of the Internet? A. Dess .Chapter 08 #31 Learning Objective: 1 556. Dess . 216) In general. (p. D. 215) Supplier power has increased because of the Internet for all of the following reasons except A. disaggregation. C. disintermediation. Dess . 215) One of the greatest threats to supplier power that has emerged because of the Internet is A. the final consumers in a distribution channel. C. lowers barriers to entry. D. reintermediation. usually the "C" in B2C. C. Dess . lowers switching costs. the cost of accessing business customers has increased. B. considering alternatives. B. by shifting customers attention away from issues of price B. B. by making competitors in cyberspace seem less equally balanced C. B. evaluation. search.Chapter 08 #38 Learning Objective: 3 563. Dess . C.Chapter 08 #36 Learning Objective: 1 561. eliminating supply chain intermediaries evaluating employee performance minimizing office expenses reducing business travel Dess .Chapter 08 #39 Learning Objective: 3 564. (p. (p. bill-paying.Chapter 08 #37 Learning Objective: 1 562.Chapter 08 #40 Learning Objective: 3 565. making payments and taking delivery. B. 218) How do infomediaries and consumer information websites increase the intensity of competitive rivalry? A. (p. C. and transaction. C. repair. D. opportunity costs. 220) Internet search activities include A. The Internet has eliminated the importance of location by making geographically distant products available online. D. outsourcing. customizing. transaction costs. 221) Which of the following is not one of the ways the Internet is lowering transaction costs? A.560. (p. problem-solving. The Internet has "commoditized" products that previously were regarded as rare or unique. Dess . return. bill-paying. generating action plans. 221) The sum total of all expenses associated with conducting business are known as A. 218) Which of the following is not one of the reasons the Internet increases the intensity of competitive rivalry? A. The Internet has made it more difficult to imitate the advantages achieved by competitors. D. Dess . (p. The Internet makes it more difficult for firms to differentiate themselves. search. evaluating. D. gathering information. 220-221)include: Four Internet-based activities that are enhancing firms' capabilities to use the Internet to add value A. by consolidating the marketing message that consumers use to make a purchase decision to a few key pieces of information that the selling company has little control over D. D. B. C. operating expenses. problem-solving. (p. rescue.Chapter 08 #41 Learning Objective: 3 85 . by highlighting a firm's unique selling advantages Dess . historical costs. Dess . C. and returning. and delivery. (p. Quick online responses to service requests and rapid feedback to customer surveys and product promotions are enhancing marketing efforts. Online purchase orders are making many transactions paperless. C.Chapter 08 #45 Learning Objective: 4 570. Dess . mass customization. 220) The value-adding activity known as problem-solving A. D. electronic data interchange. refers to comparing the costs and benefits of various options. referral-based subscription-based prescription-based commission-based Dess . 224) All of the following are ways that Internet technologies are being used to enhance an overall cost leadership strategy except: A. B. C. C. C. C.Chapter 08 #44 Learning Objective: 3 569. (p. 225) Dell Computer has an online ordering system that allows consumers to configure their own computers before Dell builds them. involves streamlining operations.Chapter 08 #42 Learning Objective: 3 567. creates access to products' ratings and price comparisons. B. knowledge management. collaborative design. is typically used in the context of providing unique services. outline methods that online businesses use to create value. B. D. cannot be used by traditional businesses. (p. outline specific actions a firm needs to take to be profitable. D. (p. B. Dess . B.566.Chapter 08 #43 Learning Objective: 3 568. cannot be combined to create additional competitive advantages.Chapter 08 #46 Learning Objective: 4 86 . Dess . Direct access to progress reports and the ability for customers to periodically check work-in-progress is minimizing rework. 222) Canadian financial firm TD Waterhouse was cited by the text as an example of a business model that is A. reducing the costs of procurement and paper. D. This capability is an example of A. (p. Dess . Online bidding and order processing are eliminating the need for sales calls and minimizing sales force expenses. 221) Internet business models A. D. 225-226)strategy All of the following are ways that Internet technologies are being used to enhance a differentiation except: A. B. D.Chapter 08 #50 Learning Objective: 4 575.Chapter 08 #48 Learning Objective: 4 573. Dess .Chapter 08 #47 Learning Objective: 4 572. D. (p. differentiators have been able to preserve the unique advantages that have always been the hallmark of their success. the rest are not. C. (p. D. firms that use a strategy have new opportunities to ________________________________ A. provide more services and features.Chapter 08 #51 Learning Objective: 4 87 . Niche portals that target specific groups are providing advertisers with access to viewers with specialized interests. Permission marketing techniques are focusing sales efforts on specific customers who opt to receive advertising notices. Procurement technologies that use Internet software to match buyers and sellers are highlighting specialized buyers and drawing attention to smaller suppliers. Dess . Dess . Dess . Internet-based knowledge management systems that link all parts of the organization are shortening response times and accelerating organization learning. C. D. B. Online access to real-time sales and service information is being used to empower the sales force and continually update R&D and technology development efforts. incumbent firms are entering market segments that they previously considered to be too small. C. 225) Which of the following methods of implementing a differentiation strategy has been greatly enhanced because of Internet technologies? A. celebrity endorsements prestige packaging exceptional service mass customization Dess . (p. B. 3. D.571. (p. Virtual organizing and online "officing" are being used to minimize firm infrastructure requirements and lower costs. C.4% are making profits. access markets less expensively. access niche markets in a highly specialized fashion. 227-228)except: All of the following are ways that Internet technologies are being used to enhance a focus strategy A. 227-228)focus Which of the following phrases best completes the sentence: Because of the Internet. C.Chapter 08 #49 Learning Objective: 4 574. B. 34% are already relying on the Internet for part of their sales.and medium-sized businesses A. Automated procurement and payment systems provide both suppliers and customers with access to detailed status reports and purchasing histories. respond quickly to customer requests. 227) Among all Canadian small. (p. B. Human resources departments are using online testing and evaluation techniques in the hiring process and online training after they hire. Chapter 08 #52 Learning Objective: 4 577. D. Dess . 218-223)What Discuss some of the ways that digital technologies are changing how companies conduct business. A. many of the unique advantages that were the hallmark of success for differentiators can easily be imitated. Dess . Dess . Answers will vary. is the role of the Internet in bringing about these digital technology-driven changes? Answers will vary.576. 215) How has the Internet made the problem of channel conflict worse? Provide examples of companies that have used the Internet to sell goods without creating channel conflict. Answers will vary.Chapter 08 #54 Learning Objective: 3 579. Answers will vary. in the Internet age. B. there are fewer rather than more opportunities for achieving sustainable advantages by using traditional competitive strategies.Chapter 08 #53 Learning Objective: 2 578. all of the answers are correct Dess . (p. (p. 214-218) 580. cost management and control systems will increase in importance as management tools that all companies can use.Chapter 08 #56 Learning Objective: 1 88 .Chapter 08 #55 Learning Objective: 1 (p. 212-214)advantages Discuss the reasons why the use of Internet technologies is more important to achieving competitive than the technologies themselves. C. (p. Briefly explain the impact of the Internet and Internet technologies on the five competitive forces. Dess . (p. 229) Combination strategies may work best for Internet competitors because. Chapter 08 #57 Learning Objective: 3 582. mark-up. (p. evaluation. 221-223)Provide Discuss the function of a business model and its role. (p. 227-228)associated Explain the impact of the Internet on focus strategies. Answers will vary. production. 220-221)firms Briefly explain the role of search. problem-solving and transaction activities in helping use the Internet to add value.Chapter 08 #58 Learning Objective: 3 583. (p.Chapter 08 #59 Learning Objective: 4 584. Dess . (p. Answers will vary. based on commission. Dess . What are the advantages and pitfalls with using the Internet to pursue a strategy of differentiation? Answers will vary. if any. 224-225)pitfalls Explain the impact of the Internet on overall cost leadership strategies. and fee-for-service.581. 225-226)associated Explain the impact of the Internet on differentiation strategies. examples of companies that illustrate each of the seven Internet business models. What are the advantages and pitfalls with using the Internet to pursue a strategy of focus? Answers will vary. Dess . Provide examples of companies that exhibit each of these value-adding activities. subscription. (p. Dess . referral.Chapter 08 #61 Learning Objective: 4 89 . Dess . in creating competitive advantages. advertising. What are the advantages and associated with using the Internet to pursue a strategy of cost leadership? Answers will vary.Chapter 08 #60 Learning Objective: 4 585. it shied away from being an operator of the businesses it ended up TRUE Dess . TRUE Dess . 242-245)short-term A major disadvantage of adopting a divisional structure is the tendency for managers to focus on objectives.Chapter 09 #3 Learning Objective: 1 590. As Power Corporation grew. (p.Chapter 08 #62 Learning Objective: 4 587. 239) There is no link between a firm's strategy and its structure. Dess . (p. the functional structure centralization. 240-241)few A simple organizational structure may lead to problems such as unclear boundaries of authority and career advancement options. (p. (p.586.Chapter 09 #5 Learning Objective: 2 592. (p. FALSE Dess . TRUE Dess . 229-230)How What are the benefits and risks associated with using the Internet to generate combination strategies? are Internet-based combination strategies creating competitive advantages? Answers will vary. 237-238)owning. (p.Chapter 09 #6 Learning Objective: 2 593. TRUE Dess .Chapter 09 #4 Learning Objective: 2 591.Chapter 09 #7 Learning Objective: 2 90 . FALSE Dess .Chapter 09 #2 Learning Objective: 2 589. 241-242)minimizes To enhance integration and control of related product market activities. (p. 240-241)rules In a simple structure where the owner manager makes most of the important decisions. (p.Chapter 09 #1 Learning Objective: 1 588. 241-242)organization One disadvantage of a functional structure is that differences in functional orientation may impede coordination and communication. FALSE Dess . extensive and regulations are used to maintain order. 246-247) 599. (p. 252) Boundaryless structures replace traditional structures.Chapter 09 #9 Learning Objective: 2 596. (p. and facilities.Chapter 09 #13 Learning Objective: 2 600. FALSE Dess .Chapter 09 #15 Learning Objective: 4 602. A matrix organization is organized strictly along product lines.Chapter 09 #8 Learning Objective: 2 595. 247) A worldwide product division structure is used when global strategies require that each division be responsible for overall efficiency and performance. FALSE Dess . 245) The strategic business unit (SBU) structure is also referred to as the conglomerate structure. (p. 244) Rogers Communications has only two divisions: wireless and media. FALSE Dess . (p.Chapter 09 #11 Learning Objective: 2 (p.Chapter 09 #14 Learning Objective: 3 601. FALSE Dess . 245) The strategic business unit (SBU) and holding company structure are variants of the functional form of structure. The matrix structure attempts to combine the advantages of the functional and product-oriented TRUE Dess .Chapter 09 #16 Learning Objective: 4 91 . (p. 246-247)structure. TRUE Dess .Chapter 09 #10 Learning Objective: 2 597. 251) The purpose of boundaryless forms of organizing is to facilitate the widespread sharing of knowledge and information across internal and external boundaries of the organization. (p.Chapter 09 #12 Learning Objective: 2 (p. (p. A major disadvantage of the matrix structure is that it duplicates the use of specialized personnel. FALSE Dess . 246-247)equipment. 598.594. TRUE Dess . FALSE Dess . TRUE Dess . TRUE Dess . 252) In a barrier-free organization.Chapter 09 #21 Learning Objective: 5 608. 252) Outsourcing relieves companies of the requirement to maintain skill levels needed to manufacture essential components. (p. TRUE Dess . and access to one another's markets. FALSE Dess .Chapter 09 #19 Learning Objective: 5 606. (p. (p. FALSE Dess . 255-258)assets. TRUE Dess . (p.Chapter 09 #20 Learning Objective: 5 607.Chapter 09 #17 Learning Objective: 5 604. (p. 252-255)are An advantage of the barrier-free form of organizing is that internal cooperation and shared objectives not required for it to work.Chapter 09 #25 Learning Objective: 5 92 .603. 259) The virtual organization is characterized by participating firms which pursue a collective strategy that enables them to cope with environmental uncertainty through cooperative efforts. TRUE Dess .Chapter 09 #24 Learning Objective: 5 611. 256) One of the risks of outsourcing is a loss of cross-functional skills. (p.Chapter 09 #18 Learning Objective: 5 605. (p. (p. modular firms often full strategic control.Chapter 09 #23 Learning Objective: 5 610. and talent disappear. 255-258)forfeit Because the modular form of organizing involves outsourcing vital functions. differences in skills. costs. (p. authority. Modular companies can achieve rapid growth because they don't require large investments in fixed TRUE Dess .Chapter 09 #22 Learning Objective: 5 609. 259) Managing virtual structures requires new and difficult-to-acquire managerial skills. 259) The virtual type of organization is a network of independent companies linked together to share skills. FALSE Dess . B. Creativity and individualism are rare. geographic structure. low specialization and high centralization. B. Dess . structure typically has a very small influence on a firm's strategy. 239) A strategy of related diversification requires most firms to organize around geographical areas or product lines. transportation networks. 237-238) 614.Chapter 09 #28 Learning Objective: 1 615. B. B. Dess . structure follows strategy. B. Dess . Dess . functional structure. Canadian conglomerate Power Corporation had its original corporate roots in A. Decision making authority is highly centralized. strategy can effectively be formulated without considering structural elements. Dess . C. 239) Generally speaking. product-market structure. This type of organizational growth leads to a(n) A.Chapter 09 #26 Learning Objective: 1 613.Chapter 09 #31 Learning Objective: 2 (p.Chapter 09 #27 Learning Objective: 1 (p. There is little specialization of tasks. divisional structure. C. C. it is most likely to develop a A. strategy follows structure. pulp and paper. All of the following statements about simple organizational structures are true except: A. D. D. (p. 240-241) 93 . an ailing bus company. D. Small firms with a narrow product-market scope will adopt such a structure. Dess . (p. low formality and low creativity. C.Chapter 09 #29 Learning Objective: 1 616.Chapter 09 #30 Learning Objective: 2 (p. 240-241) 617. high specialization and low centralization. C. international structure. matrix structure. C. B. functional structure.612. divisional structure. discussions of the relationship between strategy and structure strongly imply that A. the electricity generating industry. D. high formality and low centralization. 239) When an organization with a simple structure increases its sales revenue and volume of outputs. (p. D. A simple structure is characterized by A. D. B. and other management tasks. B. C. Use of managerial and technical talent is inefficient due to pooling of expertise in functional areas. Dess . enhances centralized decision making.Chapter 09 #33 Learning Objective: 2 620. unrelated product lines or service offerings. is organized around functional area departments. 242) Which of the following is an advantage of a functional type of organizational structure? A. high volume production. Differences in functional orientation may impede communication and coordination. 241-242) 619.Chapter 09 #35 Learning Objective: 2 622. D. Pooling of specialists enhances coordination and control. It is easy to establish uniform performance standards. This is an example of a A. 242-243) 94 . efficient use of managerial and technical talent an enhanced ability to respond quickly to changes in the external environment a high degree of emphasis on long-term performance uniformity in image and quality across divisions Dess . Dess . Which of the following is an advantage of a divisional type of organizational structure? A. (p. Decision making is centralized at the top of the organization. C. B.Chapter 09 #32 Learning Objective: 2 (p. 242) At Sharp Corporation. D. D.Chapter 09 #34 Learning Objective: 2 621. facilitates the development of general managers. Dess . work is divided into units that specialize in production. simple structure. C. D. functional structure.Chapter 09 #37 Learning Objective: 2 (p. divisional structure. D. marketing. research and development. Functional structures are usually found in organizations where there is A. C. C.618. B. D. Dess . typically improves the performance of firms pursuing a strategy of vertical integration. very little vertical integration. Dess . A divisional structure A. C. B. B. 242) Which of the following is a disadvantage of a functional type of organizational structure? A.Chapter 09 #36 Learning Objective: 2 (p. matrix structure. It facilitates the development of general management talent. (p. (p. Managers tend to be overly concerned with long-term strategies that minimize the importance of functional area strengths. 242-243) 623. Decentralized decision-making enhances an organization-wide perspective across functions. a strong need to decentralize decision making. D. wireless. D. 245) Diversified Canadian conglomerate Weston has put its businesses into three primary SBUs. wireless wireless residential. B. B. D.Chapter 09 #39 Learning Objective: 2 626. 242-243) 625. All of the following are disadvantages of a divisional type of organizational structure except: A. Internet cable. shipping. Dess . bakeries. a high level of control of division executives by executives at the corporate level. and online sales through Loblaws. Dess . 244) Canadian media giant Rogers is divided into which of the following divisions? A. (p. which are A. and grains and oilseeds retail. fisheries.com.Chapter 09 #40 Learning Objective: 2 627. and manufacturing. C. Divisions with similar products. baked goods. D. highspeed. Dess . savings in personnel and overhead expenses associated with a small corporate office. wholesale. 245) Important advantages of a holding company structure include A. C. B. ISDN Cable TV. a high level of awareness at the corporate office of issues facing individual divisions. unbaked goods. 245) All of the following are advantages of a strategic business unit (SBU) type of organizational structure except: A.Chapter 09 #42 Learning Objective: 2 629. The corporate office is more removed from the individual divisions.624. There is a strong tendency for divisions to focus on short-term performance. government media cable. and excessive reliance on group are disadvantages of what type of organizational structure? A. C. (p. or technologies are formed into homogeneous groups that can achieve synergies. There can be dysfunctional competition among divisions. and retail. B. Divisional executives can respond quickly to market changes and opportunities. C.Chapter 09 #38 Learning Objective: 2 (p.Chapter 09 #43 Learning Objective: 2 95 . C.Chapter 09 #41 Learning Objective: 2 628. B. Planning and control by the corporate office is more manageable. Dess . gaining synergistic benefits across businesses. D. intense power struggles. (p. markets. (p. There is separation of strategic and operating control. media. wireless corporate Dess . D. divisional matrix holding company functional Dess . B. 246-247)processes Complicated working relationships. retail. (p. It can be very expensive compared to a functional organizational structure. C. the layering of matrices increased clarity in reporting relationships increased responsiveness to the market fewer power struggles and reduced conflict Dess . international division. D. B. C. worldwide product division.Chapter 09 #44 Learning Objective: 2 (p. D. Which of the following is not a boundaryless organizational design? A. B.Chapter 09 #49 Learning Objective: 4 (p. D. (p. worldwide matrix. B. 249) If an international firm has a multidomestic strategy and a relatively high level of product diversity. 251) The boundaries between levels in an organization's hierarchy are known as A. Which of the following boundaries exist between the functional areas of an organization? A.630. vertical boundaries horizontal boundaries external boundaries all of the above Dess . Which of the following is considered to be an advantage of a matrix structure? A. worldwide product division. C. (p. 251-252) 96 . virtual modular matrix barrier-free Dess . Dess . B. external boundaries.Chapter 09 #46 Learning Objective: 3 633. B. (p. worldwide functional.Chapter 09 #45 Learning Objective: 3 632. worldwide matrix. horizontal boundaries. international division. geographic boundaries. vertical boundaries. C. Dess . Dess . the best choice for its organizational structure is A.Chapter 09 #47 Learning Objective: 4 634.Chapter 09 #48 Learning Objective: 4 (p. B. 251-252) 635. 246-247) 631. C. D. D. C. C. 249) If an international firm has a global strategy and a relatively low level of product diversity. the best choice for its organizational structure is A. worldwide functional. D. Democratic process can be time-consuming and difficult to manage. similarities in the age and experience of team members. B. 256) What advantages does outsourcing provide an organization? A. C. 256) What is the name of the practice that many modular organizations use to grow? A. the way team members treat each other. D. B. D. D. similarities in the way team members solve problems.Chapter 09 #53 Learning Objective: 5 640. (p.Chapter 09 #54 Learning Objective: 5 641. Dess . organizational performance may suffer. B. Which of the following is not a strategic risk of outsourcing? A. loss of critical skills loss of cross-functional skills loss of control over a supplier loss of non-vital functions Dess . C. 252) Organizations are increasingly using teams for many reasons. Lack of strong leadership can lead to coordination problems.Chapter 09 #52 Learning Objective: 5 639. C. Which of the following is not a disadvantage of the barrier-free form of organization? A. accessing best-in-class goods and services enabling rapid expansion with relatively low capital investment focusing scarce resources on core competencies all of the above Dess . the combined technical skills of the members. The difference between a good team and an outstanding team has been found to be A. 256) What type of organization is defined as "a central hub surrounded by networks of outside suppliers and specialists"? A. C.Chapter 09 #50 Learning Objective: 5 637. Dess . B. (p.636. C. matrix virtual modular barrier-free Dess .Chapter 09 #55 Learning Objective: 5 (p.Chapter 09 #51 Learning Objective: 5 (p. 254-255) 638. If trust among employees is not sufficiently high. D. (p. B. D. Fewer internal barriers means fewer political issues to deal with. (p. B. D. 257-258) 97 . operational effectiveness outsourcing strategic leveraging strategic enabling Dess . C. 259) The phrase that best defines a virtual organization is A. B.Chapter 09 #61 Learning Objective: 2 98 . Dess .com company. Dess . (p.Chapter 09 #56 Learning Objective: 5 643. a type of modular structure. C. (p.Chapter 09 #60 Learning Objective: 2 647. B. (p. C. Dess .642. (p. retain full strategic control Dess . 259) Complete the following sentence: "Virtual organizations ____________________________ whereas modular organizations ____________________________. What are the advantages and associated with using the simple organizational form? Answers will vary. Dess . 239-240)patterns How do organizational structures change as organizations grow and mature? What are the dominant of growth? Answers will vary. are usually temporary accept interdependent destinies. 259-260) 645. C. (p. What are the advantages and associated with using the functional organizational form? Answers will vary. D. an organization that uses information technology to integrate different functions. a dot. 241-242)disadvantages Describe the attributes of a functional organizational structure. a continually evolving network of independent companies." A. B. 240-241)disadvantages Describe the attributes of a simple organizational structure. Which of the following is not a disadvantage of virtual structures? A. are usually permanent. pursue collective strategies pursue collective strategies. forfeit strategic control give up part of their strategic control. D. D. difficulty in individual and organizational knowledge sharing potential loss of operational control among partners loss of strategic control over emerging technology difficulty in determining where one company ends and another begins due to close interdependencies Dess .Chapter 09 #59 Learning Objective: 1 646.Chapter 09 #58 Learning Objective: 5 (p.Chapter 09 #57 Learning Objective: 5 644. Dess . 245) Briefly describe the strategic business unit (SBU) and holding company organizational structures. (p.Chapter 09 #67 Learning Objective: 5 99 . Dess . (p. What is the role of teams the barrier-free organization? Answers will vary.Chapter 09 #62 Learning Objective: 2 649. (p. What are the advantages and disadvantages associated with using the matrix organizational form? Answers will vary. 251-252)in Discuss how changes in today's workforce and the business environment have contributed to growth the use of boundaryless organizational designs. Dess .648. 252-255)in Discuss the uses and limitations of the barrier-free organizational structure. (p. (p.Chapter 09 #66 Learning Objective: 4 653. What are the advantages and associated with using the divisional organizational form? Answers will vary.Chapter 09 #63 Learning Objective: 2 650. (p.Chapter 09 #64 Learning Objective: 2 651. Under what circumstances do organizations choose these forms of organizing? Answers will vary. Dess . Answers will vary. Dess . Answers will vary.Chapter 09 #65 Learning Objective: 3 652. 247) Discuss the three main contingencies that seem to influence the structure adopted by firms with international operations. Dess . 246) Describe the attributes of a matrix organizational structure. 242-245)disadvantages Describe the attributes of a divisional organizational structure. Chapter 10 #5 Learning Objective: 2 (p. 270) Sales quotas.Chapter 10 #7 Learning Objective: 3 100 .654. Continuous monitoring enhances an organization's ability to respond with speed and flexibility. Canada's public companies have not survived unscathed. WorldCom. 269) The U. (p.Chapter 10 #2 Learning Objective: 1 657. 270) "Contemporary" strategic controls involve comparing actual performance to predetermined goals. TRUE Dess . TRUE Dess . and other U. 270) For firms competing in highly unstable and turbulent industries. behavioural controls such as rewards and culture can be an effective way to enhance organizational loyalty.Chapter 10 #6 Learning Objective: 1 661. (p. (p.Chapter 09 #68 Learning Objective: 5 655. TRUE Dess . 255-256)outsourcing Discuss the uses and limitations of the modular organizational structure.Chapter 10 #1 Learning Objective: 1 656.S. operating budgets. Dess . TRUE Dess . (p. and production schedules are examples of "traditional" controls. (p. FALSE Dess . FALSE Dess . (p. 270-271) 660. What is the role of in the modular organization? Answers will vary. (p. Congress introduced the Sarbanes-Oxley Act in 2002 to ensure better governance of public corporations. 273) For young managers who see themselves as free agents.Chapter 10 #4 Learning Objective: 1 659. companies have suffered from management abuses. 269) Enron. Similar provisions have NOT been put in place in Canada. "traditional" strategic controls are most appropriate.Chapter 10 #3 Learning Objective: 1 658. FALSE Dess .S. 662. 274-275) 663.Chapter 10 #10 Learning Objective: 3 665. it must be perceived as fair and equitable. it becomes self-sustaining. FALSE Dess . An organization's reward system is typically a weak method of motivating employees.Chapter 10 #9 Learning Objective: 3 (p. FALSE Dess . TRUE Dess .Chapter 10 #13 Learning Objective: 3 668. FALSE Dess . TRUE Dess . (p. FALSE Dess .Chapter 10 #14 Learning Objective: 3 669. not innovation. 274) In terms of corporate culture. (p.Chapter 10 #11 Learning Objective: 3 666. 275) Reward systems that reinforce an organization's core values and contribute to organizational cohesiveness are the least effective type. 276) For a reward system to be effective. (p.Chapter 10 #12 Learning Objective: 3 667. TRUE Dess .Chapter 10 #15 Learning Objective: 3 670. (p. can minimize improper and unethical conduct. Cirque du Soleil's focus is on customer service.Chapter 10 #16 Learning Objective: 3 101 . (p. TRUE Dess .Chapter 10 #8 Learning Objective: 3 (p. (p. 276) Boundaries and constraints. FALSE Dess . 277) Unexpected events (such as wildcat strikes or new government regulations) have little effect on short-term objectives that need to remain fixed to be effective. 275-276) 664. 277) Short-term objectives and action plans are types of boundaries that channel the efforts of employees toward goal accomplishment. (p. when used properly. 276) Different functional areas within an organization often have different reward systems. Once a strong and healthy organizational culture has been established. Chapter 10 #18 Learning Objective: 3 673. 291) The Sarbanes-Oxley Act of 2002 requires that CEOs and CFOs of publicly-listed companies must reveal off-balance-sheet finances and vouch for the accuracy of information provided. (p. FALSE Dess . (p. (p.Chapter 10 #20 Learning Objective: 5 675. 290) Stock analysts generally issue more "sell" recommendations than "buy" recommendations. reward and control systems rely on qualitative since the organization needs to reward and reinforce behaviours that facilitate sharing and collaboration. TRUE Dess . (p.Chapter 10 #17 Learning Objective: 3 672. TRUE Dess . (p. 277) Action plans permit a degree of autonomy for managers who sometimes must modify activities to achieve the desired outcome. (p. TRUE Dess . 278-279)indicators In firms that follow related diversification strategies. TRUE Dess . 290) The risk of being acquired by hostile raiders is often referred to as the takeover constraint. 281) Product diversification by a company is a cheaper way to reduce shareholder risk than portfolio diversification by shareholders.Chapter 10 #21 Learning Objective: 5 676.Chapter 10 #23 Learning Objective: 5 678. FALSE Dess . 290) Auditors are appointed by the Securities and Exchange Commission to audit a company's financial statements. (p. TRUE Dess .Chapter 10 #22 Learning Objective: 5 677. FALSE Dess .671. 291) Public companies are required by law to disclose information regarding executive compensation packages.Chapter 10 #24 Learning Objective: 5 102 . (p.Chapter 10 #19 Learning Objective: 4 674. C. B. C. 271) McGill University's Prof. B. they lead to complacency. single-loop learning. B.Chapter 10 #25 Learning Objective: 5 680. "projected the past into the future. (p. goals and objectives cannot be measured with a high level of certainty. Strategies are formulated and top management sets goals. D. Dess . Strategies are implemented.Chapter 10 #29 Learning Objective: 2 684. Dess . 270) The primary drawback of "traditional" strategic control systems is that A. C. they lack the flexibility needed to adjust to changes in the environment. stock exchanges FALSE Dess . 291-292)the The Sarbanes-Oxley Act of 2002 does not apply to Canadian publicly listed companies operating in U. B. that are listed on U. double-loop learning. 270) The "traditional" approach to strategic control is sequential. D. they are only appropriate when the environment is stable and simple. (p.S. traditional strategic controls are usually inappropriate.679. Performance is measured against the predetermined goal. D.S. had observations which A. (p. B. D. cast doubt on the value of rigid planning and goal-setting processes.Chapter 10 #30 Learning Objective: 2 103 . D.Chapter 10 #27 Learning Objective: 1 682. (p. writing about leaders and strategy. 270) For businesses facing complex and turbulent business environments A. feedback controls. C. goals and objectives that are uncertain prevent opportunism. Dess ." encourage rigid planning and goal-setting processes. comparative learning. Dess . Action plans are submitted by lower level managers. said strategic control systems fail to detect changes in consumer demand. (p.Chapter 10 #26 Learning Objective: 1 681. 272) Contemporary approaches to strategic control rely primarily on A. detailed plans are needed to maintain order. Mintzberg. (p. Which of the following is not one of the steps in the sequence? A. Dess . C. complacency about predetermined milestones can prevent adaptability.Chapter 10 #28 Learning Objective: 1 683. innovation. posting written statements of the organization's goals and objectives.685.Chapter 10 #31 Learning Objective: 2 686. (p. Dess . It circumvents the need for face-to-face meetings among superiors. C. 274) In terms of building a strong and effective corporate culture. D. (p. B. culture rewards boundaries all of the answers are equally important Dess . discouraging the formation of subcultures that isolate work groups. Dess .Chapter 10 #35 Learning Objective: 3 690. D. regulations. (p. Culture sets explicit boundaries. 272) Which of the following is not one of the characteristics of a contemporary control system? A. strategy formulation.Chapter 10 #32 Learning Objective: 3 687. encouraging employees to see themselves as free agents. Dess .Chapter 10 #33 Learning Objective: 3 688. and other boundaries by A. and action plans. 276) Most successful organizations minimize the need for explicit rules. customer service. (p. Canada's Cirque du Soleil was described as focusing on A. C. operational efficiency. D. which Canadian company was mentioned by the text in Chapter Ten as having the vision of being a "national champion and Canada's most trusted company"? A. D. C. 277) In terms of providing short-term objectives and action plans.Chapter 10 #34 Learning Objective: 3 689. D. Culture helps maintain control by creating behavioural norms. C. (p. 274) All of the following are examples of how organizational culture exerts behavioural control except: A.Chapter 10 #36 Learning Objective: 3 104 . Dess . D. Northern Telecom Canadian Tire Four Seasons Cirque du Soleil Dess . B. (p. subordinates. assumptions. It generates information that is important enough to demand regular and frequent attention. It must focus on constantly changing information that is strategically important. designing effective reward systems. B. B. and peers. It is a key catalyst for an ongoing debate about underlying data. Culture generates unwritten standards of acceptable behaviour. C. B. C. Culture encourages individual identification with the organization and its objectives. B. 276) Which of the following approaches to behavioural strategic control should be utilized least in an organization in which there is a great need for innovation and a high degree of autonomy? A. low. behavioural high. (p. behavioural high. being achievable yet challenging. B. They represent a poor means of influencing an organization's culture. 277) The causes of counterproductive behaviour in organizations include A. Performance measures are clear and highly visible. outright malfeasance. They represent an effective control mechanism. B. C. (p. (p. D. financial low. A. providing a specific time horizon for their attainment. C. being specific and measurable. 276) Which of the following is not one of the functions of reward and incentive systems? A. financial high. behavioural Dess . D. D. an emphasis on "do your best" goals. Dess . all of the answers are correct Dess . A. B. 281) In firms with overall low-cost strategies. C.Chapter 10 #38 Learning Objective: 3 693. They focus efforts on high-priority tasks. 281) In firms with differentiation strategies. (p. Objectives are well understood and broadly accepted. Dess . the culture should foster ________ levels of interdependence and rewards should be based primarily on _____________ measures of output. financial low. motivated self-interest. D.691. D. (p. 277) All of the following are characteristics of effective reward and incentive systems except: A.Chapter 10 #39 Learning Objective: 3 694. D. Dess .Chapter 10 #42 Learning Objective: 4 105 . financial high. (p. 277) Effective short-term objectives have all of the following priorities except A.Chapter 10 #41 Learning Objective: 4 696. The compensation system is perceived as fair and equitable. They motivate high levels of individual and collective task performance. C. lack of a clear understanding of organizational goals and objectives. low.Chapter 10 #40 Learning Objective: 3 695. B. B. The structure is fixed to assure employees of consistency. B. C. C. behavioural Dess . the culture should foster ________ levels of interdependence and rewards should be based primarily on _____________ measures of output.Chapter 10 #37 Learning Objective: 3 692. (p. C. (p. the desire to get future auditing contracts from the company. auditors. 290) Managerial opportunism can take all of the following forms except A. 281) In firms with related diversification strategies.Chapter 10 #46 Learning Objective: 5 701. considering acquiring other companies. A. 290) It is generally argued that the takeover constraint deters management from A. 290) By takeover constraint. provisions in the charter of a company that prevents it from attempting a takeover of other companies. C. C. Dess . D. D. B. C. B.Chapter 10 #47 Learning Objective: 5 702. we mean A.Chapter 10 #48 Learning Objective: 5 106 .S. shirking. (p. the risk of being acquired by a hostile raider.Chapter 10 #43 Learning Objective: 4 698. competitors. behavioural high. legal constraints that limit the ability of the raiders to acquire a firm. the market for corporate control. D. D. (p. (p. Dess . D. Dess . Dess . audit firms to follow internationally accepted accounting standards. financial high. 269) The failure of many auditing firms to raise red flags about accounting irregularities in companies such as Enron and WorldCom is generally attributed to all of the following factors except A. constraints placed by the firm on raiders who want to takeover the firm. the desire to get consulting work from the company because most audit firms also do consulting work. financial low. declaring dividends. B. behavioural Dess . engaging in opportunistic behaviour. job-hopping. D. B. External control mechanisms include all of the following except A. the fact that auditors are appointed by the firm. increasing a firm's level of borrowing. Dess .697.Chapter 10 #44 Learning Objective: 5 (p. 289-292) 699. low. C. on-the-job consumption. excessive product diversification. the culture should foster ________ levels of interdependence and rewards should be based primarily on _____________ measures of output.Chapter 10 #45 Learning Objective: 5 700. B. B. analysts. C. the failure of U. top executives received bonuses of $21 million based on profits called into question. (p. Dess . C. details of new products under development. rewards. 291) All of the following are types of information that a firm is required to disclose except A. 272-273)boundaries? Why is it important to have a balance among the three behavioural controls—culture. Answers will vary.Chapter 10 #53 Learning Objective: 3 708. (p. Dess .Chapter 10 #51 Learning Objective: 1 706. the company admitted it possessed no reliable financial statements since 2001. former CEO John Roth cashed in $135 million of stock options just before the stock price tanked from $124 to 75 cents. B. stock trading by insiders. D. 268-270)strategic What are the advantages and disadvantages associated with using "traditional" approaches to control? Answers will vary. details of executive compensation packages. quarterly and annual filings of financial information.Chapter 10 #50 Learning Objective: 5 705. 271-272)firms What are the four characteristics of effective information control systems? Give examples of how apply these practices. Answers will vary. and Is there a danger associated with emphasizing one behavioural approach more than another? Answers will vary. C. 275-276) 107 . 269) Canadian IT company Nortel was cited by the text as an example of "flawed corporate governance" because A. Dess . Dess . (p. Dess . B. (p. D. all of the answers are correct Dess .Chapter 10 #52 Learning Objective: 2 707.703.Chapter 10 #54 Learning Objective: 3 (p. Discuss the benefits and risks of using reward and incentive systems as a means of strategic control.Chapter 10 #49 Learning Objective: 5 704. (p. Dess . TRUE Dess . TRUE Dess . 298-300)organization Setting a direction is the leadership activity that involves developing a strategic vision of what the could become. and processes that facilitate the implementation of a leader's vision. 301) Designing the organization is the leadership activity that involves building structures. 283-289)corporation? Answers will vary. What are the three key means to align the interests of owners (shareholders) and managers in a (p. Answers will vary. (p. 277) What are the characteristics of short-term objectives? Provide examples of practical applications of these characteristics by organizations. How would controls be different for firms pursuing overall low-cost strategies versus differentiation strategies? How would the controls used for related diversification differ from those used for unrelated diversification? Answers will vary. Dess . (p. (p.Chapter 11 #3 Learning Objective: 2 108 . (p. Dess . 289-292) 713. TRUE Dess . 281) Discuss the contingent nature of strategic controls.Chapter 11 #2 Learning Objective: 1 715. Answers will vary.Chapter 10 #55 Learning Objective: 3 710. (p.Chapter 11 #1 Learning Objective: 1 714.709.Chapter 10 #58 Learning Objective: 5 (p.Chapter 10 #57 Learning Objective: 5 712. systems. Identify at least three external control mechanisms. teams.Chapter 10 #56 Learning Objective: 4 711. Discuss the role played by each of these. 297) Royal Group of Woodbridge became North America's largest PVC extruder. Dess . 716. and reporting relationships that impede the flow of information. FALSE Dess . (p. (p.Chapter 11 #6 Learning Objective: 2 719. TRUE Dess . 302) In terms of the strategy of expansion. but they are powerless to change it. 303) Behavioural barriers to change occur because of conflicts between departments.Chapter 11 #9 Learning Objective: 2 722. 301) Leaders play an important role in sustaining an organization's culture. (p. FALSE Dess .Chapter 11 #5 Learning Objective: 2 718.Chapter 11 #4 Learning Objective: 2 717. FALSE Dess . 304-308)(IQ).Chapter 11 #11 Learning Objective: 3 109 .Chapter 11 #8 Learning Objective: 2 721. TRUE Dess . 304) "Coercive power" is the power exercised by use of fear of punishment for errors of either omission or commission by employees.Chapter 11 #10 Learning Objective: 2 723. (p. Tim Hortons has much room for growth. (p. (p.Chapter 11 #7 Learning Objective: 2 720. and refusal to share information. 304) The two broad bases of a leader's power are organizational and hierarchical. (p. (p. conflicts arising from power relationships. 301) Leaders are not expected to accept personal responsibility for ethical behaviour in an organization because ethics is a matter of individual choice. Emotional Intelligence (EI) is generally a better predictor of life success than intelligence quotient TRUE Dess . with over 2. 303) Systemic barriers to change refer to elements of an organization's design. FALSE Dess . structure.400 outlets in Canada. FALSE Dess . TRUE Dess . 313) A key function of the leaders in a learning organization is to generate an organization-wide commitment to the status quo. FALSE Dess .300 employees are NON-unionized. one of the components of emotional intelligence (EI).Chapter 11 #14 Learning Objective: 4 727. (p. creative approach to the unknown. TRUE Dess . (p. FALSE Dess . (p.Chapter 11 #13 Learning Objective: 4 726. and hold people accountable for results.Chapter 11 #19 Learning Objective: 4 110 . (p. FALSE Dess . 311) Canadian steel company Dofasco's 7. refers to one's proficiency in managing relationships and building networks.Chapter 11 #16 Learning Objective: 4 729. 307) Empathy. 310) To successfully empower employees to achieve organizational goals. (p. (p.Chapter 11 #15 Learning Objective: 4 728. (p. leaders clarify the mission.724. FALSE Dess . 309) Successful learning organizations have a proactive.Chapter 11 #12 Learning Objective: 3 725. leaders must perform the tasks of resource allocation and power brokering.Chapter 11 #18 Learning Objective: 4 731. (p. FALSE Dess . 314) Inspiring and motivating people with a mission or purpose is a necessary and sufficient condition for developing a learning organization. delegate responsibility. 310) In the "top-down" approach to empowerment. 310) Organizational learning works best when an organization's leaders gather information and teach it to employees who are like their students.Chapter 11 #17 Learning Objective: 4 730. TRUE Dess . (p. B.Chapter 11 #22 Learning Objective: 5 735. D. C. TRUE Dess . determining a direction.Chapter 11 #25 Learning Objective: 1 738. Royal Group Technologies was challenged because A. 320-321)basis An effective way to instill ethical behaviour in an organization is to distribute rewards strictly on the of outcomes. nurturing a culture dedicated to excellence and ethical behaviour. (p.Chapter 11 #21 Learning Objective: 5 734. (p. D.Chapter 11 #20 Learning Objective: 4 733. C. 299) Which of the following is an important characteristic of a leader? A. 315) Ethical behaviour can be reinforced through the use of an appropriate reward and evaluation system. 300) According to the text. all of the answers are correct Dess . the CEO was obsessed with controlling all activities. Dess . B.Chapter 11 #24 Learning Objective: 1 737. 297) In the opening case. C.Chapter 11 #26 Learning Objective: 1 111 . B. it did not facilitate the development of competent executives. (p. effective leadership is like a three-legged stool consisting of all of the following except A. 312) "Open book" management is a technique for gathering and disseminating internal information so that all employees can be involved in decision making and management. 314) Business ethics is the application of ethical standards to commercial enterprise. TRUE Dess . (p. goal-oriented satisfied with the status quo reactive focused on past performance Dess . designing the organization. (p.732. FALSE Dess . D. TRUE Dess .Chapter 11 #23 Learning Objective: 5 736. dedication to maintaining the status quo. De Zen paid little attention to financial ramifications. (p. Dess .Chapter 11 #27 Learning Objective: 2 740.Chapter 11 #32 Learning Objective: 2 112 . B. and petty interpersonal differences are symptoms of which type of barrier to change? A. inadequate accountability among managers and employees. systems. B. Dess . (p. 301) Leaders play a key role in developing and sustaining an organization's _____________. are limited by behavioural barriers. 302) Canadian icon Tim Hortons' future plans A.Chapter 11 #31 Learning Objective: 2 744. and organizational processes that facilitate implementation. pushed himself and his artists to continuously experiment.400 stores in Canada. (p. maintained the status quo. D. are thwarted by political barriers. C. A. D. status quo culture reporting relationships rules and regulations Dess . C.Chapter 11 #28 Learning Objective: 2 741. (p. D. conflicts between departments and divisions. C. inappropriate budgeting and control systems. involve expanding on their 250 franchises they have in the U. C. remain focused on expanding the 2. B.Chapter 11 #29 Learning Objective: 2 742. systemic barriers political barriers behavioural barriers all of the answers are correct Dess . 301) Poor organizational design by leaders can result in all of the following except A. a clear future direction. 300) The leader's role in developing a strategic vision provides many benefits including A.S. B. insufficient mechanisms to integrate and coordinate activities across the firm. set a firm direction. 303) Refusal to share information. (p. C. 301) In terms of nurturing a corporate culture. C. a framework for their organization's mission and goals. (p.739. D. (p. all of the answers are correct Dess . Canada's Cirque du Soleil was transformed by Guy Laliberte who A.Chapter 11 #30 Learning Objective: 2 743. enhanced employee communication and commitment. B. was poor at rooting out unethical behaviour. D. B. Dess . D. conflicts over resources. teams. 745. (p. 303) Which of the following explains why organizations are prone to inertia and slow to change? A. B. C. D. personal time constraints political barriers vested interests in the status quo all of the answers are correct Dess - Chapter 11 #33 Learning Objective: 2 746. (p. 304) All of the following constitute organizational bases of a leader's power except A. B. C. D. legitimate power. reward power. referent power. coercive power. Dess - Chapter 11 #34 Learning Objective: 2 747. (p. 304) Expert power A. is derived from organizationally conferred decision-making authority. B. arises from a manager's access, control, and distribution of information that is not freely available to everyone in an organization. C. is derived from referent power. D. is derived from the leader's capability and knowledge in a particular field. Dess - Chapter 11 #35 Learning Objective: 2 748. (p. 304) Coercive power A. is the power exercised by use of fear of punishment for errors of omission or commission by employees. B. is the power of persuasion exercised by a charismatic leader to get compliance from reluctant subordinates. C. arises from a manager's access, control, and distribution of information that is not freely available to everyone in an organization. D. is the ability of the leader or manager to confer rewards for positive behaviours or outcomes. Dess - Chapter 11 #36 Learning Objective: 2 749. (p. 304) The source of referent power is A. a subordinate's identification with the leader. B. a leader's identification with the subordinates. C. derived from the fact that the manager can potentially act as a reference when the employee applies for another job. D. derived from the manager's ability to provide effective incentives to employees. Dess - Chapter 11 #37 Learning Objective: 2 750. (p. 305) The three broad sets of capabilities that a leader should possess include all of the following except A. B. C. D. technical skills. cognitive abilities. calculative abilities. emotional intelligence. Dess - Chapter 11 #38 Learning Objective: 3 113 751. (p. 306) All of the following are components of emotional intelligence (EI) except A. B. C. D. self-awareness. self-regulation. self-promotion. empathy. Dess - Chapter 11 #39 Learning Objective: 3 752. (p. 309) Which of the following is not a characteristic of a successful learning organization? A. B. C. D. They create a proactive, creative approach to the unknown. They actively solicit the involvement of employees at all levels. They regularly engage in activities to reinforce the status quo. They enable everyone to use their intelligence and apply their imagination. Dess - Chapter 11 #40 Learning Objective: 4 753. (p. 310) Complete the following sentence: "Inspiring and motivating people with a mission or purpose is a ____________________________________ for developing an organization that can learn and adapt." A. B. C. D. necessary and sufficient condition necessary but not a sufficient condition goal but not a necessary condition goal and a required pre-condition Dess - Chapter 11 #41 Learning Objective: 4 754. (p. 311) Which company does the book cite as being the first Canadian company to offer profit sharing to its employees in 1938? A. B. C. D. Zurich Canada - insurance. Tim Hortons - fast food. Dofasco - steel. Westons - food. Dess - Chapter 11 #42 Learning Objective: 4 755. (p. 310) The "top down" perspective of empowerment A. B. C. D. encourages intelligent risk-taking. trusts people to perform. encourages cooperative behaviour. delegates responsibility. Dess - Chapter 11 #43 Learning Objective: 4 756. (p. 310) The "bottom-up" perspective of empowerment A. B. C. D. clarifies the organization's values and mission. builds teams to encourage cooperative behaviour. communicates specific plans. encourages employees to "ask permission rather than forgiveness." Dess - Chapter 11 #44 Learning Objective: 4 114 757. (p. 310) The empowerment perspective that involves trusting people to "do the right thing," take intelligent risks, and act with a sense of ownership is known as A. B. C. D. the leadership perspective. the top-down approach. the bottom-up approach. the risk-taking model. Dess - Chapter 11 #45 Learning Objective: 4 758. (p. 310) An empowerment perspective that delegates responsibility, focuses on accountability, and relies on clearly specified rewards to motivate is known as A. B. C. D. the leadership perspective. the top-down approach. the bottom-up approach. the accounting model. Dess - Chapter 11 #46 Learning Objective: 4 759. (p. 311) Manufacturing employees at Dofasco Steel are directly involved with customers and have access to the new innovative knowledge being developed in its manufacturing processes. This is an example of A. B. C. D. hierarchical control. knowledge management. enabling heroes and drones. employee empowerment. Dess - Chapter 11 #47 Learning Objective: 4 760. (p. 312) Which of the following is not one of the three core activities in the "open book" management system pioneered by Jack Stack? A. Information is generated daily that reflects the work performance and production costs of each employee. B. The information is aggregated once a week and shared with employees at every level. C. Information about customer expectations and feedback is distributed monthly. D. Extensive training in how to use and interpret the numbers is provided to all employees. Dess - Chapter 11 #48 Learning Objective: 4 761. Internal benchmarking at Whole Foods A. B. C. D. is used by teams to compete against other teams in their stores. is used by teams which compete against their own goals for sales, growth, and productivity. is used by teams to compete against similar teams at different stores and regions. all of the answers are correct Dess - Chapter 11 #49 Learning Objective: 4 (p. 311-312) 762. (p. 313) Functional benchmarking A. B. C. D. is not very useful for organizations with a divisional organizational structure. endeavours to determine best practices regardless of industry. restricts the search for best practices to competitors. is useful when researching industry-specific standards. Dess - Chapter 11 #50 Learning Objective: 4 115 763. (p. 313-314)quo All of the following are guidelines an organization can use to promote the challenging of the status except A. B. C. D. establishing a "culture of dissent." forcefully creating a sense of urgency. fostering a culture that encourages risk taking. creating a results-based reward system. Dess - Chapter 11 #51 Learning Objective: 4 764. (p. 314) Companies that cultivate cultures of experimentation and curiosity make sure that _________ is not, in essence, a bad thing. A. B. C. D. success failure dissent risk taking Dess - Chapter 11 #52 Learning Objective: 4 765. (p. 314) Which of the following statements about ethics is false? A. B. C. D. Ethics may be defined as a system of right and wrong. Ethics assists individuals in deciding when an act is moral or immoral. Ethics is not concerned with whether or not an act is socially desirable. Business ethics is the application of ethical standards to commercial enterprises. Dess - Chapter 11 #53 Learning Objective: 5 766. All of the following statements about ethical organizations are true except A. B. C. D. the potential benefits of an ethical organization are few but direct. ethical values shape the search for opportunities. organizational ethics define what a company is and what it stands for. ethics provide a common frame of reference that serves as a unifying force. Dess - Chapter 11 #54 Learning Objective: 5 (p. 314-316) 767. (p. 315) CIBC was involved with Enron. This involvement A. had no effect on CIBC because no Canadian executives were charged. B. included all other Canadian banks. C. meant the CEO of CIBC retired before the Enron announcement and took $52 million in pay and bonuses. D. had no cover up. Dess - Chapter 11 #55 Learning Objective: 5 768. Proactive measures to prevent organizational ethics problems include all of the following except A. B. C. D. instituting a reward system which considers outcomes as its primary criterion. using leaders as role models of ethical behaviour. issuing statements describing the organization's commitment to certain standards of behaviour. using the organization's information systems as a control system. Dess - Chapter 11 #56 Learning Objective: 5 (p. 316-318) 116 Briefly discuss the three interdependent activities that are critical for effective leadership. Dess . Dess . 310) What is the difference between "top-down" and "bottom-up" approaches to empowerment? Discuss how these differences impact the effectiveness of empowerment efforts. 303) Discuss the reasons why organizations and managers at all levels are prone to inertia and slow to learn and adapt. 306) Identify the five components of emotional intelligence (EI). 298-300) 771.Chapter 11 #59 Learning Objective: 2 772.Chapter 11 #61 Learning Objective: 4 774.Chapter 11 #58 Learning Objective: 1 (p. role model control system corporate credo reward structure Dess . Answers will vary. (p. 309-310)in What are the four elements of a learning organization? What is the value of a learning organization today's global marketplace? Answers will vary. (p. C. D. Answers will vary. 320) A _________________ is a statement describing an organization's commitment to certain standards of ethical behaviour. Dess . Answers will vary.769. (p. Discuss how each of these factors contributes to the success of a leader or manager. Dess . Dess .Chapter 11 #62 Learning Objective: 4 117 . B.Chapter 11 #60 Learning Objective: 3 773. (p.Chapter 11 #57 Learning Objective: 5 770. (p. Answers will vary. A. 319-320)and How can developing and maintaining a high ethical standard benefit an organization? Give examples describe the effects the examples have had on the organization and/or its stakeholders. (p. 314-316) 777. Dess . (p. What is the leader's role in establishing an ethical organization? Answers will vary.Chapter 11 #68 Learning Objective: 5 118 . 320) What is a corporate credo? How can it be helpful in shaping the moral dimensions of an organization? Answers will vary. Dess . Answers will vary.Chapter 11 #65 Learning Objective: 5 778. Dess . (p. 318) Discuss the differences between integrity-based and compliance-based approaches to organizational ethics. Dess . 312) What is "open book" management? Why is this and other approaches to accumulating and sharing internal information being used increasingly in today's organizations? Answers will vary. Dess . Answers will vary. 320-321)organizational Briefly discuss how an organization's reward and evaluation systems can be used to promote ethics.Chapter 11 #66 Learning Objective: 5 779.Chapter 11 #63 Learning Objective: 4 776. Answers will vary. (p.Chapter 11 #64 Learning Objective: 5 (p. Dess . (p.775.Chapter 11 #67 Learning Objective: 5 780. Chapter 12 #8 Learning Objective: 3 789. TRUE Dess . 328) The term "innovations" refers primarily to inventions that use the latest technologies.Chapter 12 #3 Learning Objective: 1 784.Chapter 12 #5 Learning Objective: 2 786.Chapter 12 #6 Learning Objective: 1 787. (p. 330) As an industry matures.Chapter 12 #1 Learning Objective: 1 782. FALSE Dess .S. (p.781. 334) Corporate entrepreneurship is sometimes called "intrapreneurship. (p. (p. (p. (p." TRUE Dess . (p. 331) The term "strategic envelope" refers to the scope of a firm's innovation efforts. TRUE Dess .Chapter 12 #7 Learning Objective: 1 788.Chapter 12 #9 Learning Objective: 3 119 . 329) Rogers may be known as a company involved in cell phones and cable TV but it was once the leading manufacturer of radios in Canada and the U. 330) Radical innovation often involves open-ended experimentation which can be very time consuming. FALSE Dess .Chapter 12 #2 Learning Objective: 1 783.Chapter 12 #4 Learning Objective: 1 785. 330) In general. FALSE Dess . TRUE Dess . TRUE Dess . 330) Process innovations are often associated with a low cost leadership strategy. 334) Strategic renewal and the pursuit of new venture opportunities are the two primary aims of corporate entrepreneurship. (p. radical innovations occur quickly and incremental innovations take a long time to develop. there are greater opportunities for change and so innovations tend to be more radical. (p. TRUE Dess . FALSE Dess . FALSE Dess .Chapter 12 #13 Learning Objective: 4 794. 338) The discovery phase refers to the period when one becomes aware of a new business concept.Chapter 12 #10 Learning Objective: 3 791. FALSE Dess . (p. 347-348)maintain First movers in an industry often capture above-average profits. TRUE Dess . (p.Chapter 12 #14 Learning Objective: 4 795. 334) Corporate venturing that is focused permeates all parts of the organization and involves every member of the organization. TRUE Dess . but usually find it difficult to early market share gains. 335) An opportunity may be justified regardless of whether or not it is attractive in the marketplace. 334) Firms using a focused approach to corporate entrepreneurship typically separate corporate venturing activities from on-going operations of the firm. FALSE Dess . (p. 337) Changes in the external environment spark innovative new ideas.Chapter 12 #18 Learning Objective: 6 120 . (p. (p. TRUE Dess . 342) Business incubators are designed to support both start-up and later-stage companies. 347) Product champions are the employees who identify new product ideas or services.Chapter 12 #16 Learning Objective: 5 797. TRUE Dess . but not funding.Chapter 12 #12 Learning Objective: 4 793. (p.Chapter 12 #17 Learning Objective: 6 798.Chapter 12 #11 Learning Objective: 3 792. FALSE Dess .Chapter 12 #15 Learning Objective: 5 796.790. (p. 342) Corporate business incubators often provide physical space and business services to internal ventures. (p. (p. B.Chapter 12 #24 Learning Objective: 7 805. (p. being the leading manufacturer of radios in Canada and the U. (p. B. FALSE Dess . D. (p.S. 329) Incremental innovations A.799.Chapter 12 #20 Learning Objective: 6 801. FALSE Dess . 353) Westjet is similar to most other airlines in that it runs a deficit. 348) RIM first got its start out of American engineering schools. usually represent technological breakthroughs. 351) Most new entrants use an adaptive strategy. (p. nearly always can be patented.Chapter 12 #22 Learning Objective: 7 803. (p. 349) Business risk taking refers to the risk associated with entering untested markets or committing to unproven technologies. FALSE Dess . (p. creating a radio tube that could be operated from a 110-volt current instead of batteries. Dess . 351) An imitative new entry strategy is in many respects the same as pioneering.Chapter 12 #23 Learning Objective: 7 804. TRUE Dess . 329) Canadian communications Rogers got started by A.Chapter 12 #25 Learning Objective: 1 806. C.Chapter 12 #26 Learning Objective: 1 121 . TRUE Dess . D. TRUE Dess . all of the answers are correct Dess . C.Chapter 12 #19 Learning Objective: 6 800. (p. are usually highly disruptive.Chapter 12 #21 Learning Objective: 7 802. are usually small improvements in products or processes. being involved in wireless telegraphy. 350) Pioneering involves creating new ways to solve old problems or meeting customers' needs in a unique new way. (p. B. new paradigms Incremental innovations. D. C. 331) The innovation dilemma known as seeds versus weeds refers to A.Chapter 12 #27 Learning Objective: 1 808. D. (p. C. incremental innovations Dess . D. choosing to pursue radical rather than incremental innovations. 332) The benefits of converting innovations into successful business ventures include A. C. focus groups and business incubators. 328-330)technology _______________________________ refers to efforts to create designs and applications of to develop new products. shutting down product lines.Chapter 12 #29 Learning Objective: 1 810. process innovation Product innovation.Chapter 12 #32 Learning Objective: 2 122 . _______________________ refers to efforts to improve the efficiency of organizational systems such as manufacturing and operations. B. C. process innovations. service innovations radical innovations. D. ___________________ enhance existing practices and often represent evolutionary applications of fundamental breakthroughs. 330) Whereas ________________________ are often associated with a low cost leader strategy. A. declining competitiveness. (p. choosing to pursue product rather than process innovations. management innovations Dess .807. B. service innovation Dess . all of the answers are correct Dess .Chapter 12 #30 Learning Objective: 2 811. product innovations product innovations. radical innovations Radical innovations. (p. developing innovation skills internally versus partnering with qualified outsiders. (p. 328-330)revolutionize ________________ produce fundamental changes that can transform a company or even an industry. B. Dess . A. building credibility by launching products ahead of potential collaboration partners. Technological breakthroughs. building innovative products in-house versus outsourcing. (p.Chapter 12 #31 Learning Objective: 2 812. C. C. none of the answers are correct Dess . B. D. B. Radical innovation. A. D. 331) The innovation dilemma known as building capabilities versus collaborating refers to A. ____________________________ are frequently an important aspect of a differentiation strategy. product-market breakthroughs New technologies. growth and rewards. (p. instrumental innovations marketing innovations. incremental innovation Breakthrough innovation. promoting organizational stars onto innovation teams rather than involving all employees in innovation efforts. instrumental innovation Product innovation.Chapter 12 #28 Learning Objective: 1 809. This is an example of A. (p. D. a strong spirit of entrepreneurship. C. 342) Corporate business incubators typically provide all of the following functions except A. often worries stakeholders such as suppliers and creditors. often leads to instability. D. D. corporate venture funding.813. D. collaboration partners. mergers and acquisitions. A. funding. D. entering into new markets expanding capabilities by acquiring new knowledge building the corporation's base of resources all of the answers are correct Dess . B. is considered a core capability.Chapter 12 #35 Learning Objective: 2 816.Chapter 12 #33 Learning Objective: 4 814.Chapter 12 #37 Learning Objective: 3 818. B. C. 342) According to the text. 334) Common features of a dispersed approach to corporate entrepreneurship include all of the following except A. upper-level managers Dess . B. Dess . C. Dess . corporate venture capitalists lower-level managers. (p. (p.Chapter 12 #34 Learning Objective: 4 815. is imposed from the top down.Chapter 12 #38 Learning Objective: 4 123 . C. new venture groups product champions. B. 334) In corporations with a strong entrepreneurial culture. the willingness and ability to change A. C. D. semi-autonomous new venture groups. (p. a top-down approach to supporting entrepreneurial behaviour. B. mentoring. (p. Dess . ________________________ which support fledgling start-ups are often used to pursue specific entrepreneurial ventures developed by _________________________. physical space. 335) Strategic reasons for undertaking a corporate venture include which of the following? A. C. strategic partners business incubators. an entrepreneurial culture. Dess . internal development. (p.Chapter 12 #36 Learning Objective: 3 817. strategic renewal. B. 331) Intel has invested $8 billion in several e-business start-ups. student interns. a form of private equity available only at the start-up stage a form of human capital a form of angel investing Dess . 339) All of the following are questions that should be answered when evaluating the performance of corporate venturing efforts except: A. and processes. B. D. D. B.819. proactiveness risk taking autonomy competitive aggressiveness Dess . The vast majority of new firms are low-budget start-ups financed through A. services.Chapter 12 #43 Learning Objective: 6 824. C. Which of the following is not one of the characteristics of good opportunities? A. (p. 340-341) 822. (p. C.Chapter 12 #42 Learning Objective: 5 823. (p. It refers to making decisions and taking risks without certain knowledge of probable outcomes. C. Is the venture attracting external venture funding? Is the venture considered to be a market success? Does the venture add to the worth of the firm internally? Does the value proposition offered by the venture insulate it from competitive attack? Dess . D. Dess . D. B. C. B.Chapter 12 #44 Learning Objective: 4 124 . C. D.Chapter 12 #39 Learning Objective: 4 820.Chapter 12 #41 Learning Objective: 5 (p. 339-340) 821. 341) Venture capital is A. 344) Which of the following dimensions of entrepreneurial orientation is described as "a forward-looking perspective characteristic of a marketplace leader that has the foresight to seize opportunities"? A. C. B. 337) All of the following statements about innovativeness are true except: A. It involves creativity and experimentation. D.Chapter 12 #40 Learning Objective: 4 (p. attractive achievable value creating opportunism Dess . It is aimed at developing new products. an initial public offering (IPO) bank financing venture capital personal savings and contributions of family and friends Dess . (p. B. It refers to a firm's efforts to find new opportunities and novel solutions. Encourage experimentation and risk-taking by tolerating failure. Which of the following is not one of them? A. Dess . all of the answers are correct Dess . adaptive imitative pioneering technological risk taking Dess . (p. B. D. Dess . C. 348) WestJet was cited in the text as being able to develop a toehold in Western Canada through A. (p. enlistment of many third-party software developers to develop new applications. research risk factors to minimize uncertainty.825. B. Ensure that all risk-taking activities have a financial pay-off within one year. Reward the champions of successful new product ideas.Chapter 12 #48 Learning Objective: 6 829.Chapter 12 #47 Learning Objective: 6 828. C. 347) The 3M Corporation. D. technological capabilities. foster creativity and experimentation. (p. (p.Chapter 12 #49 Learning Objective: 6 830. continuously seek out new products or services. B. B. Dess . C. enter markets with drastically lower prices. Dess . B. 348) RIM was mentioned in the book in a "Strategy Spotlight" because it had been growing fast. D. C. C. first-mover advantages. competitive aggressiveness. breakthrough innovations. proceeding slow and steady. (p.Chapter 12 #50 Learning Objective: 7 125 . partnering with Air Canada. D. an email solution for customers using MS Outlook. firms that want to enhance their entrepreneurial position by being competitively aggressive should A. B. and/or new technologies are known as A.Chapter 12 #45 Learning Objective: 6 826. C. D.Chapter 12 #46 Learning Objective: 6 827. uses several approaches and "rules-of-thumb" to encourage innovation. distribution with a number of telephone carriers. one of the most highly innovative companies. The book notes that RIM's strategy is to develop A. D. (p. using American pilots. 350-352)previously Which kind of new entry strategy sometimes involves filling a market space where the need has not been filled adequately? A. 347-348)adopt The benefits gained by firms that are the first to enter new markets. Invite customers to brainstorm about new product concepts. 348) According to the text. establish brand identity. an aggressive market entry and competitiveness. 330) What are the differences between product and process innovation? What are the strategic implications of each approach to innovation? Answers will vary. age and growth goals for the development entrepreneurial Answers will vary. (p. Dess . Discuss the implications of size.831. Dess . Compare and contrast the concepts of focused versus dispersed approaches to corporate Provide examples of each approach. Answers will vary. (p.Chapter 12 #51 Learning Objective: 1 832.Chapter 12 #53 Learning Objective: 2 834. 334-335)entrepreneurship. Dess . 330-334)ventures.Chapter 12 #56 Learning Objective: 5 126 . (p. 330) What is meant by the terms "radical" innovation and "incremental" innovation. Answers will vary. (p. Describe the advantages and disadvantages of each type of innovation and provide examples.Chapter 12 #54 Learning Objective: 3 835. 335-339)market Outline the opportunity process and discuss the phases involved in identifying and developing opportunities. Answers will vary. (p. Answers will vary.Chapter 12 #52 Learning Objective: 1 833. Provide examples each type of financing and discuss other entrepreneurial resources that might be available. 340-343)of Discuss the similarities and differences of new-venture and later-stage financing.Chapter 12 #55 Learning Objective: 4 836. Dess . (p. Dess . Dess . Chapter 12 #57 Learning Objective: 6 838. New-entry strategies typically fall into one of three categories: pioneering new-entry. Dess . (p.837. 350-352)new-entry. Outline the key strategic intentions of each and provide an example of each. Answers will vary. Dess .Chapter 12 #58 Learning Objective: 7 127 . (p. 344) Discuss the four areas of leadership skills necessary to enact an entrepreneurial vision. Answers will vary. imitative or adaptive new entry. Appendix Analyzing.Chapter 08 62 Dess .Chapter 04 71 Dess .Chapter 10 58 Dess .Chapter 01 56 Dess ...Chapter 03 69 Dess .Chapter 05 77 Dess .Test Bank Summary Category # of Questions Dess . 50 Dess .Chapter 12 58 Learning Objective: 1 116 Learning Objective: 2 146 Learning Objective: 3 156 Learning Objective: 4 125 Learning Objective: 5 130 Learning Objective: 6 102 Learning Objective: 7 13 1 .Chapter 09 68 Dess .Chapter 02 74 Dess .Chapter 07 67 Dess .Chapter 11 68 Dess .Chapter 06 60 Dess .