Chaminade Univ MBA-800-01-3 Strategic Management Week 10 - Final Exam 2015

ading SummaryQuestion Type: # Of Questions: True/False 25 Multiple Choice 25 Essay 6

Grade Details - All QuestionsQuestion 1. Question : Which of the following is NOT a factor pressuring companies for local responsiveness?
Student Answer: the need for local repair and service to customers
customization due to cultural differences
government pressure for firms to use local sources for procurement
availability of low labor costs
Question 2. Question : U.S. cola companies entered the global market because of:
Student Answer: limited growth opportunities in their domestic market.
lower labor costs in the emerging markets.
economies of scale that offset research and development costs.
an increase in the return on investment from their U.S. bottling plants.

Question 3. Question : A large domestic market can provide the country's industries a chance at dominating the world market because:
Student Answer: they have been able to develop economies of scale at home.
they have access to abundant and inexpensive factors of production.
the related and supporting industries will have been developed.
the nation's culture and educational system will be adapted to producing the labor force needed for the industry.

Question 4. Question : A global corporate-level strategy emphasizes:
Student Answer: differentiated products.
economies of scale.
sensitivity to local product preferences.
decentralizing control and limited monitoring.

Question 5. Question : Terrorist attacks:
Student Answer: encourage firms to take truly global corporate strategies in order to offset losses in one region with gains in another. are considered a "cost of doing business" by international firms.
have not decreased the level of international investment in any region except those involved in active wars. increase the liability of foreignness for firms.

Question 6. Question : In a(n) ______________, the firms involved own equal shares of a newly-created venture.
Student Answer: equality-based strategic alliance
non-equity strategic alliance
joint venture
equity strategic alliance


Question 7. Question : A state-wide alliance of independent hospitals has formed in order to do group purchasing of medical supplies. Group purchasing allows the hospital alliance to negotiate lower prices with suppliers because of the large quantity of materials ordered. This is an example of ___________resulting from an alliance.
Student Answer: explicit collusion
economies of scale
opportunistic behavior
distribution opportunities

Question 8. Question : Partners in a horizontal alliance can expect:
Student Answer: benefits proportional to their investments.
similar opportunities as a result of the alliance.
common management issues.
different outcomes.


Question 9. Question : The three main luxury hotels in a major tourist destination keep very close track of their competitors' room pricing, restaurant offerings, tour packages, and special services, such as airport transportation and spa privileges. When one hotel makes adjustments in prices or offerings, the other hotels follow suit. It is possible that these hotels are:
Student Answer: engaging in tacit collusion.
following uncertainty reducing strategies.
monitoring business competitors for opportunistic behaviors.
following a competitive response strategy.


Question 10. Question : Corporate governance revolves around the relationship between which two parties?
Student Answer: shareholders and the board of directors.
shareholders and managers.
the board of directors and managers.
none of the above.

Question 11. Question : Amos Ball, Inc., is a printing company in Iowa that has been family owned and managed for three generations. Which of the following statements is most likely to be true?
Student Answer: Agency costs at Amos Ball are high.
If research findings are valid, Amos Ball, Inc. will perform better if a family member is a CEO than if an outsider is CEO. At Amos Ball, the opportunity for managerial opportunism is high.
The functions of risk-bearing and decision-making are separate at Amos Ball.

Question 12. Question : Product diversification provides two benefits to managers that do not accrue to shareholders; _____ and _______.
Student Answer: a greater experience in a wider range of industries, lessening of managerial employment risk. the manager frequently invests in the acquired firm which allows him or her extensive profits, the manager can frequently buy excess assets divested by the acquired firm. the manager's supervisory needs are lowered, the manager is allowed greater time to oversee a wider range of activities. the opportunity for higher compensation through firm growth, a reduction in managerial employment risk.


Question 13. Question : All of the following are unintended consequences of the Sarbanes-Oxley Act except:
Student Answer: some foreign firms have delisted on U.S. stock exchanges.
a number of publicly-traded companies have decided to privatize.
an increased number of IPOs (initial public offerings) are expected.
internal auditing costs have increased by about one-third.

Question 14. Question : Which of the following does NOT cause a firm to move from a functional structure to a multidivisional structure?

Student Answer: increasing diversification
coordination and control issues
need for knowledge-sharing among specialists
greater amounts of data and information to process

Question 15. Question : One reason why a long-tenured top-level manager may hesitate to conclude the firm's structure is a problem is that doing so:
Student Answer: indicates to competitors that the firm is vulnerable to a hostile takeover.
will only lead to inefficiencies.
requires the firm undertake multi-year restructuring period that delay retirement.
suggests that their previous choices were not the best ones.


Question 16. Question : Which of the following is NOT associated with an organizational structure that supports a cost leadership strategy?
Student Answer: centralization
specialization
formalization
integration

Question 17. Question : Successful implementation of the differentiation strategy requires a structure that:
Student Answer: has specialized jobs.
decentralizes decision-making.
focuses on the financial function.
is dominated by the operations function.


Question 18. Question : Executive headhunters have approached Charles about taking the position of senior vice president of marketing for a well-known company. Although this company has been highly successful since 1995, Charles has heard persistent rumors of overly aggressivemarketing tactics, questionable reporting of sales data, and an atmosphere of intolerance of criticism. The CEO is a powerful and charismatic individual, who built the company from a small regional firm to an international powerhouse in only a decade. The other top managers have been hand-picked by the CEO, as have a number of the members of the board of directors. The salary for this position is very high and includes generous stock options. It would be a major step up in Charles’ career and would position him to move to CEO of another company in the future. Charles has prided himself on his high moral values and is viewed as an exceptionally ethical person by his peers. What should Charles do?

Question 19. Question : The more heterogeneous the top management team, the:
Student Answer: more difficult it will be for the team to implement strategies.
more likely it is that the team will be cohesive.
less innovative the team's decisions will tend to be.
less diverse the team membership will be.


Question 20. Question : Which of the following is NOT related to a CEO having long tenure in his or her position?
Student Answer: more effective strategic control
greater influence on board decisions
more limited perspective
high level of innovation


Question 21. Question : Which of the following statements is TRUE regarding effective organizational cultures?

Question 22. Question : When an existing firm creates a new venture or develops an innovation, it is said to be engaging in:
Student Answer: corporate emergence.
transformational leadership.
exceptional R & D.
corporate entrepreneurship.

Question 23. Question : GreenBox, a company that recycles paper products to make cardboard cartons, has introduced a new product that resists damage by moisture. GreenBox can expect that:


Question 24. Question : _______is one of the reasons for the differences in rates of entrepreneurship among different countries.
Student Answer: Climate
Competitiveness
Culture
Constitution

Question 25. Question : Which of the following is true? For firms to be entrepreneurial, theyrequire a culture with:
Student Answer: an emphasis on individualism in Western nations and an emphasis on collectivism in Eastern nations. an exceptionally high level of collectivism.
a balance of individualism and collectivism.
an exceptionally high level of individualism.

Question 26. Question : The example of General Motors' business in China and Europe vividly illustrates that a firm's home market, not international markets, is always responsible for the majority of profits.
Student Answer: True False

Question 27. Question : The liability of foreignness has become an obsolete concern, as illustrated by the success of many U.S. firms overseas and the success of foreign companies in the U.S.
Student Answer: True False


Question 28. Question : Having substantial supplies of critical basic natural resources is a necessary condition for a country to support businesses which can successfully compete in international markets.
Student Answer: True False

Question 29. Question : A multidomestic strategy assumes that consumer needs, industry conditions, and social norms are homogeneous in every country.
Student Answer: True False


Question 30. Question : A company that chooses a truly global corporate-level strategy assumes that the liability of foreignness will be minimal.
Student Answer: True False

Question 31. Question : A cooperative agreement between a hotel chain and a casino operator would be viewed as a horizontal complementary strategic alliance because as separate entities, the two firms would compete for the same customer.
Student Answer: True False


Question 32. Question : Using business-level strategic alliances to hedge against risk and uncertainty is most common in the slow-cycle markets.
Student Answer: True False


Question 33. Question : A stable alliance network is used in industries characterized by frequent project innovations and short product life cycles.
Student Answer: True False


Question 34. Question : Close monitoring, formal contracts and constant vigilance against opportunism increase the probability of alliance success.
Student Answer: True False


Question 35. Question : Amelia Smith is the sole owner of the successful restaurant chain, Amelia's Cafe. Ms. Smith has taken a no-interest loan from the company in order to build a luxurious seaside house for herself in Carmel, California. This constitutes a classic agency problem.
Student Answer: True False

Question 36. Question : As a rule, shareholders prefer more product diversification than do managers because shareholders wish to reduce risk and maximize wealth.
Student Answer: True False

Question 37. Question : A board comprised primarily of outside directors will have better insights as to the firms intended strategic initiatives, the reasons for the initiatives, and the outcomes expected from them than will inside directors.
Student Answer: True False


Question 38. Question : Executives whose bonuses are based on long-term outcomes (rather than short-term outcomes) by the firm are often relatively overcompensated because executive are reluctant to take on the additional risk.
Student Answer: True False


Question 39. Question : RexMacDonald, Inc. uses a differentiation strategy that relies on cooperation, communication and sharing of ideas among employees. In order to foster this behavior, RexMacDonald should emphasize strategic controls over financial controls.
Student Answer: True False


Question 40. Question : Firms using the differentiation strategy need to respond quickly to environmental opportunities and threats. The functional structure is effective for this strategy because of its centralization of decision-making.
Student Answer: True False


Question 41. Question : Internal competition for corporate resources is effective for companies with an unrelated diversification strategy, but dysfunctional for companies with a related-constrained strategy.
Student Answer: True False


Question 42. Question : The organizational structure for an internationally diversified firm requires trade-offs between global integration and local market responsiveness.
Student Answer: True False

Question 43. Question : In order for the strategic leader to survive, he or she needs to make optimal decisions for the organization.
Student Answer: True False


Question 44. Question : Board members with substantive expertise in the firm's core functions and businesses aids the effectiveness of the top management team.
Student Answer: True False


Question 45. Question : When a new CEO is selected from outside the firm, a change of strategy is likely, especially if the top management team is homogeneous and highly cohesive.
Student Answer: True False


Question 46. Question : To influence employee's judgment and behavior, ethical practices must shape the firm's decision-making process, but should be a peripheral part of organizational culture.
Student Answer: True False


Question 47. Question : Regarding competition and markets, entrepreneurship's primary focus is to capture most of the existing markets from less aggressive and innovative competitors.
Student Answer: True False


Question 48. Question : A firm that innovates through imitation can expect to produce a product for a niche market, since the general market for the standardized product will be dominated by early adopters.
Student Answer: True False


Question 49. Question : The entrepreneurial mind-set is found primarily among managerial and scientific employees.
Student Answer: True False

Question 50. Question : Netflix developed a subscription-based model of DVD rental based on using the Internet and the mail instead of the retail location approach used by Blockbuster. This innovative subscription service would be correctly classified as a competence-destroying innovation because of its devastating impact on traditional movie rental businesses such as Blockbuster.
Student Answer: True False

Question 51. Question : What factors limit the positive outcome of international expansion?
Question 52. Question : What is a strategic alliance? What are the three types of strategic alliances firms use to develop a competitive advantage?

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

Question 54. Question : What is organizational structure and what are organizational controls?

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