Strategic Management

1. Which level of strategy answers the question, "What business should we be in?". Business-level strategy. Functional-level strategy. Corporate-level strategy. Operational-level strategy.

2. According to the SCP (Structure-Conduct-Performance) approach, what is the primary driver of a firm's performance?. Firm conduct. Government regulations. Industry structure. Managerial talent.

3. A firm that fails to define its industry broadly enough might make a strategic error by: Overestimating the threat of new entrants. Missing the threat of substitute products from other industries. Ignoring the bargaining power of suppliers. Focusing too much on cost leadership.

4. In Porter's Five Forces model, which of the following would INCREASE the bargaining power of customers?. High buyer concentration relative to firm concentration. High costs for buyers to switch to a new producer. Low availability of information about products. Low buyer price sensitivity.

5. The "Threat of New Entrants" is high when: Entry barriers are high and exit barriers are low. Capital requirements are substantial. Established brands have strong customer loyalty. Entry barriers are low and exit barriers are low.

6. A firm that seeks to be unique in its industry along some dimension that customers value is pursuing which generic strategy?. Cost Leadership. Differentiation. Cost Focus. Functional Implementation.

7. The concept of "Blue Ocean Strategy" is best described as: Competing fiercely in a crowded market. Creating new, uncontested market space. Focusing on a narrow market segment. Achieving the lowest cost in an existing industry.

8. What do "mobility barriers" specifically restrict within an industry?. The entry of new firms into the entire industry. The movement of firms between different strategic groups. The power of suppliers and buyers. The threat of substitute products.

9. Which of the following is an example of an "isolating mechanism"?. A large number of competitors in the market. A unique combination of resources that is difficult for rivals to imitate. High buyer propensity to substitute. Slow market growth rates.

10. The Boston Matrix is primarily a tool used to assist with decisions at which strategic level?. Functional-level. Business-level. Corporate-level. Operational-level.

1. According to the Resource-Based View (RBV), what is the primary source of a firm's sustainable competitive advantage?. Its ability to analyze the external environment. Its unique and inimitable resources and capabilities. Its market share and pricing power. Its diversified portfolio of businesses.

2. The VRIN framework is used to evaluate the potential of resources to provide a competitive advantage. What does the "N" in VRIN stand for?. Necessary. Non-substitutable. Negotiable. National.

3. Which of the following is the best example of an intangible resource?. A company's manufacturing plant. Cash reserves. Technical expertise and know-how. Raw material inventory.

4. In the context of knowledge management, an apprentice learning a craft through observation and practice is an example of: Combination. Internalization. Externalization. Socialization.

5. The concept of "Dynamic Capabilities" is best described as a firm's ability to: Maintain stable and efficient routine operations. Integrate, build, and reconfigure resources to adapt to rapid change. Outspend competitors on research and development. Protect its existing resources from imitation.

6. According to the lecture, what is a key difference between resources and capabilities?. Resources are intangible, while capabilities are tangible. Resources are easy to trade, while capabilities are not. Capabilities are more important than resources. Resources are built over time, while capabilities can be bought.

7. The "Value Chain" is defined as: The total cost of producing a good or service. The network of suppliers and distributors a firm works with. A set of activities carried out to create value for customers. The process of capturing economic rent from a market.

8. Which of the following is one of the three key processes for managing knowledge, according to the Knowledge-Based View (KBV)?. Diversification. Coordination. Imitation. Valuation.

9. The process of transforming tacit knowledge into explicit knowledge (e.g., writing a manual) is known as: Internalization. Socialization. Combination. Externalization.

10. Core competencies are best defined as: The financial assets a firm holds in reserve. An assemblage of multiple resources and capabilities that work together to create a sustainable competitive advantage. The physical assets a firm uses in production. The skills of the firm's individual employees.

1. According to the presentation, what is the core idea behind "Open Innovation"?. Innovation should be kept secret within the firm to protect competitive advantage. Companies should rely solely on their internal R&D departments. Firms should interact and co-create with multiple stakeholders outside their boundaries. Innovation is only successful when it is radical and destructive.

2. Joseph Schumpeter's concept of "Creative Destruction" refers to: The process of continuously improving existing products through small increments. The replacement of older, less efficient processes or products with newer, more efficient ones. The dilemma faced by successful companies when markets change. The application of design thinking to social problems.

3. An organization that is capable of simultaneously exploiting existing markets while exploring new ones is known as: A Disruptive Organization. A Hybrid Organization. An Ambidextrous Organization. A Platform Organization.

4. Which of the following is one of the four 'open strategies' identified by Chesbrough and Appleyard?. Destruction. Deployment. Diversification. Decentralization.

5. The "Innovator's Dilemma" describes a situation where: A company's past successes and capabilities become obstacles to adapting to change. There are too many incremental innovations and not enough radical ones. A company cannot decide between a cost leadership or differentiation strategy. Open innovation leads to a loss of intellectual property.

6. According to Phillips et al., to avoid organizational 'lock-in' and foster radical innovation, a company should: Minimize risk and avoid fast failures. Have a high tolerance for ambiguity and encourage curiosity-driven behavior. Focus on strengthening its core routines and procedures. Centralize its R&D functions.

7. A business model that provides a base for other applications, processes, or technologies to be developed is known as a(n): Innovation Platform. Ambidextrous Structure. Service Blueprint. Unbundling Pattern.

8. Tim Brown's concept of "Design Thinking" is characterized by: A focus on maximizing shareholder value above all else. A power-driven by a thorough understanding of what people want and need. A strict adherence to formal planning and predetermined patterns. The elimination of collaboration to protect proprietary ideas.

9. What characterizes a High Velocity Environment (HVE)?. Stable demand, predictable competitors, and slow technological change. Rapid, discontinuous, and simultaneous change in multiple areas. A strong focus on incremental improvement and efficiency. Government-controlled markets and heavy regulation.

10. Michael Porter argued that firms flourish best in geographical agglomerations known as: National Innovation Systems. Clusters. Freemium Networks. Start-up Environments.

1. What is the primary strategic difference between a merger and an acquisition?. A merger reduces competitive intensity, while an acquisition does not. A merger creates a new legal entity, while an acquisition does not. An acquisition is a form of vertical integration, while a merger is horizontal. An acquisition involves outsourcing, while a merger involves insourcing.

2. According to Transaction Cost Economics (TCE), what are the two primary models for organizing economic activity?. Competition and Collaboration. Market and Hierarchy. Outsourcing and Offshoring. Integration and Separation.

3. The concept of "Bounded Rationality" in TCE suggests that: Humans are perfectly rational and can foresee all future contract contingencies. Decision-makers have limited information and cognitive capacity, making all complex contracts incomplete. Firms should always integrate to avoid dealing with external parties. Opportunistic behavior is not a significant factor in economic exchanges.

4. A car manufacturer purchasing a tire company would be an example of: Horizontal Integration. Forward Integration. Backward Integration. Concurrent Sourcing.

5. Which of the following is a key reason for a firm to choose horizontal integration?. To reduce the costs of negotiating with suppliers. To move into activities previously undertaken by its buyers. To lower production costs through economies of scale. To better align incentives for specialized assets.

6. According to Van Marrewijk, which acculturation strategy involves one culture absorbing the other entirely?. Integration. Assimilation. Separation. Deculturation.

7. The degree to which an asset can be redeployed to alternative uses without a loss of value is known as: Bounded Rationality. Opportunism. Asset Specificity. Transaction Frequency.

8. Which of the following is NOT one of the three types of uncertainty identified in the chapter?. Volume Uncertainty. Technological Uncertainty. Market Uncertainty. Behavioural Uncertainty.

9. The practice of a firm simultaneously making and buying the same good is known as: Opportunism. Vertical Integration. Concurrent Sourcing. Horizontal Integration.

10. From a TCE perspective, what is a primary reason for a firm to choose hierarchical governance (to "make")?. To reduce competitive intensity in the industry. To avoid the risks of opportunism and manage uncertainty. To access new markets and distribution channels. To eliminate the need for internal managerial oversight.

1. According to the chapter, which of the following is a defining feature of a strategic alliance?. The parties involved lose their autonomy and become a single legal entity. It involves purposive linkages between organisations that maintain some level of autonomy. It is always based on an equity investment by all partners. Its primary purpose is always to collude on pricing.

2. From the perspective of Transaction Cost Economics (TCE), how is inter-firm cooperation generally viewed compared to full integration (a hierarchy)?. As a superior form of organizing economic activity. As an inferior form of organizing economic activity in terms of economizing behavior. As having no significant difference in transaction costs. As the only way to reduce the power of competitors.

3. According to Richardson's analysis, cooperative arrangements are best suited for activities that are: Similar and complementary. Dissimilar and complementary. Similar and non-complementary. Dissimilar and non-complementary.

4. An alliance where two firms agree to share a manufacturing facility to produce a good together is best described as a: Marketing Alliance. Investment Alliance. Production Alliance. Comprehensive Alliance.

5. Which of the following is a key difficulty often faced in strategic partnerships?. The inability to match resources and align cultures between partners. The guarantee of achieving synergy simply by forming the alliance. The automatic creation of trusting relationships upon signing a contract. The elimination of all managerial complexity.

6. What is a key characteristic that distinguishes a joint venture from other types of alliances?. It is always a non-equity arrangement. It involves a legally distinct entity created and owned by the parent firms. It is exclusively used for public-private partnerships. It does not require a contractual agreement.

7. The concept of "Open Strategy" is characterized by: Inclusivity and transparency, allowing participation from stakeholders beyond the firm's boundaries. A highly secretive and centralized process led only by top management. Focusing solely on internal resource development. Using alliances only for the purpose of reducing competitive intensity.

8. Which mechanism for creating value through collaboration involves managers designing organizational systems to enhance the productivity of acquired resources?. Resource Picking. Capability Building. Opportunism. Market Failure.

9. A strategic alliance formed specifically between a private company and a government agency is known as a: Comprehensive Alliance. Public-Private Partnership (PPP). Functional Alliance. Equity Joint Venture.

10. From the Industrial Organization (IO) perspective, a primary reason for firms to cooperate (though often illegal) is: To build unique and inimitable resources. To collude on prices to reduce competitive pressure. To share R&D costs for radical innovation. To outsource non-core functions.

1. The term "Glocalization" refers to: The complete replacement of local cultures with a single global culture. The hybridization of global and local tendencies, where universalizing and particularizing forces coexist. A strategy where companies only operate in their home country but sell online globally. The political movement against multinational enterprises.

2. What is a defining characteristic of a "Born Global" business?. It slowly expands internationally after decades of domestic success. It seeks superior international business performance from its inception. It relies primarily on extensive financial and tangible resources for global expansion. It avoids using differentiation strategies to target niche markets.

3. According to the presentation, what is a primary objective for managers of global organizations?. To maximize government regulation in all operating countries. To coordinate and control all aspects of the company on a worldwide basis. To concentrate corporate headquarters in high-tax regimes. To restrict access to resources and markets to a few select countries.

4. The practice of profiting from differences in costs and processes across borders, such as concentrating profits in low-tax regimes, is known as: Glocalization. Foreign Direct Investment (FDI). Arbitrage. Institutional Duality.

5. In the context of Multinational Enterprises (MNEs), what are "mandates"?. Government regulations that MNEs must follow in host countries. Tasks assigned to subsidiaries by headquarters or acquired by the subsidiaries themselves. The universal ethical standards for global employment. The initial public offerings for a new global subsidiary.

6. The concept of "Institutional Duality" for a multinational subsidiary refers to the pressure to: Adopt only the practices of its host country. Adopt only the practices desired by its headquarters. Simultaneously adopt practices from both its headquarters and its host country context. Avoid adopting any standardized practices at all.

7. According to convergence theorists, global firms are becoming increasingly similar due to all of the following EXCEPT: Geographically homogeneous consumer demand. Volatile capital flows that circumvent national regulation. Increasing heterogeneity of the nation-state form. Pressures from international quality and environmental standards.

8. What is a common characteristic of business groups in BRIC countries, as mentioned in the chapter?. They typically focus on a single, highly specialized market. They are often conglomerates serving many diverse and unrelated markets. They avoid any form of state involvement or protectionist policies. They strictly follow the dominant US business model without translation.

9. How can subsidiaries within an MNE potentially enhance their strategic importance?. By strictly following all mandates without question or initiative. By passively receiving instructions from headquarters. By exploiting complex networks to develop new products or bid for new investments. By isolating themselves from other parts of the global company.

10. Foreign Direct Investment (FDI) can involve all of the following EXCEPT: Ownership and control of cross-border production facilities. Participation in management and transfer of technology. Reinvesting profits earned from overseas operations. Solely portfolio investment without any control or management input.