Midterm 1 Study Guide! Capstone 1
Midterm 1 study guide
- 1.
Functional managers
- A.
Are responsible for the specific business functions or operations that constitute a company or one of its divisions.
- B.
Look at the overall picture of a corporation.
- C.
Have no strategic role.
- D.
Formulate generic strategies.
- E.
Execute business-level decisions.
Correct Answer
A. Are responsible for the specific business functions or operations that constitute a company or one of its divisions.Explanation
Functional managers are responsible for the specific business functions or operations that constitute a company or one of its divisions. They focus on managing and overseeing the day-to-day activities within their functional area, such as finance, marketing, operations, or human resources. They are not involved in formulating generic strategies or making strategic decisions for the overall corporation. Instead, their role is to execute business-level decisions and ensure that their functional area is operating efficiently and effectively.Rate this question:
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- 2.
An important first step in the process of formulating a company's mission is to
- A.
Describe the technological processor.
- B.
Identify the customer segment served by the company.
- C.
Answer the question, "What is our business?"
- D.
Decide what the company will be like ten years from now.
- E.
Evaluate the company's most recent performance.
Correct Answer
C. Answer the question, "What is our business?"Explanation
The correct answer is to answer the question, "What is our business?" This is an important first step in formulating a company's mission because it helps define the core purpose and focus of the company. By answering this question, the company can clarify its main activities, products, and services, and align its goals and strategies accordingly. This step sets the direction for the company and guides decision-making processes in the future.Rate this question:
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- 3.
The primary goal of a SWOT analysis is to
- A.
Benchmark a company's performance.
- B.
Force managers to think creatively rather than analytically.
- C.
Forecast future events.
- D.
Develop short-run goals.
- E.
Create, affirm, or fine-tune a company-specific business model.
Correct Answer
E. Create, affirm, or fine-tune a company-specific business model.Explanation
The primary goal of a SWOT analysis is to create, affirm, or fine-tune a company-specific business model. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and the analysis helps a company identify and evaluate these factors. By doing so, the company can develop a better understanding of its internal and external environment, and make informed decisions about its business model. This process allows the company to identify areas of improvement, capitalize on opportunities, and minimize threats, ultimately leading to the creation or refinement of a business model that aligns with the company's goals and objectives.Rate this question:
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- 4.
A component of strategy implementation is
- A.
Designing the best organization structure, culture, and control systems to put a strategy into action.
- B.
Enumerating the number and kind of periodic reports that must be submitted by functional-level managers.
- C.
Analyzing the macroeconomic environment of the company
- D.
Answering the question, "What is our business?"
- E.
E) all of the above. all of the above.
Correct Answer
A. Designing the best organization structure, culture, and control systems to put a strategy into action.Explanation
The correct answer is "designing the best organization structure, culture, and control systems to put a strategy into action." This is because strategy implementation involves determining how to organize the company in order to effectively execute the strategy. This includes designing the appropriate structure, culture, and control systems that align with the strategic goals and objectives. By doing so, the organization can ensure that the strategy is successfully implemented and that the desired outcomes are achieved.Rate this question:
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- 5.
The strategies that a company's managers pursue
- A.
Have a major impact on the company's performance relative to its competitors.
- B.
Have little or no effect on overall profitability.
- C.
Typically result in higher per-unit cost of production.
- D.
Result in significant industry structural changes
- E.
None of the above.
Correct Answer
A. Have a major impact on the company's performance relative to its competitors.Explanation
The correct answer is that the strategies that a company's managers pursue have a major impact on the company's performance relative to its competitors. This means that the decisions and actions taken by managers can significantly influence how well a company performs compared to other companies in the same industry. The strategies can include various aspects such as pricing, marketing, product development, and operational efficiency. By making effective strategic choices, managers can gain a competitive advantage and improve the company's overall performance.Rate this question:
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- 6.
A sustained competitive advantage
- A.
Enables a company to maintain above-average projects for a number of years.
- B.
Cannot be maintained for more than three years.
- C.
Is seldom possible in today's highly competitive environment.
- D.
Typically arises out of unforeseen economic events.
- E.
A and D.
Correct Answer
A. Enables a company to maintain above-average projects for a number of years.Explanation
A sustained competitive advantage refers to a long-term advantage that a company has over its competitors, allowing it to consistently outperform and maintain above-average profits or projects for an extended period of time. This implies that the advantage is not temporary and can be sustained for more than three years. It also suggests that the advantage is not solely reliant on unforeseen economic events, as mentioned in option D. Therefore, the correct answer is that a sustained competitive advantage enables a company to maintain above-average projects for a number of years.Rate this question:
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- 7.
Scenario-based planning is a technique for coping with the problem of
- A.
Uncertainty.
- B.
Planning equilibrium.
- C.
Bottom-up planning.
- D.
Strategic fit.
- E.
Cognitive bias.
Correct Answer
A. Uncertainty.Explanation
Scenario-based planning is a technique that helps organizations deal with the challenge of uncertainty. By creating and analyzing different scenarios, organizations can anticipate potential future events and develop strategies to effectively respond to them. This approach acknowledges that the future is uncertain and allows organizations to be better prepared for various possibilities. It is a proactive and flexible planning method that helps mitigate the risks associated with uncertainty.Rate this question:
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- 8.
Aaron planned to cut prices at his bicycle shop, but when a competing shop began to offer free repairs, Aaron decided to copy them. Aaron's new strategy (offer free repairs) is an example of a(n)
- A.
Mistake.
- B.
Emergent strategy.
- C.
Deliberate strategy.
- D.
Intended strategy.
- E.
Unrealized strategy.
Correct Answer
A. Mistake.Explanation
Aaron's decision to offer free repairs was not a deliberate or intended strategy, but rather a reaction to the competing shop's offer. It can be seen as a mistake because Aaron initially planned to cut prices, but instead ended up offering a different service for free. This decision may not have been well-thought-out or aligned with Aaron's original intentions, making it a mistake in his strategic planning.Rate this question:
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- 9.
The fit model of strategy formulation and implementation
- A.
Was proposed and supported by Prahalad and Hamel.
- B.
Is not useful because the future is uncertain.
- C.
Is useful for both intended and emergent strategies.
- D.
Can give a company a sustainable competitive advantage.
- E.
Focuses more on the current situation than on the future situation.
Correct Answer
E. Focuses more on the current situation than on the future situation.Explanation
The fit model of strategy formulation and implementation focuses more on the current situation than on the future situation. This means that the model emphasizes aligning the company's internal resources and capabilities with the external environment in order to achieve a competitive advantage in the present. It suggests that by understanding and adapting to the current market conditions, a company can effectively position itself for success. However, it does not take into account the uncertainty of the future and the need for flexibility and adaptation to changing circumstances.Rate this question:
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- 10.
The role of corporate-level managers is to
- A.
Define operational-level strategies.
- B.
Outline functional-level strategies and plans.
- C.
Oversee the development of strategies for the whole organization.
- D.
Develop business-level strategies
- E.
Oversee the development of business-level and functional-level strategies
Correct Answer
C. Oversee the development of strategies for the whole organization.Explanation
Corporate-level managers are responsible for overseeing the development of strategies for the entire organization. This means that they are involved in setting the overall direction and goals of the company, as well as ensuring that the strategies implemented by different departments and functional areas align with the overall organizational strategy. They have a broad perspective and are involved in decision-making that affects the entire organization, rather than focusing on specific operational or functional-level strategies.Rate this question:
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- 11.
Which of the following is not a characteristic of emotional intelligence?
- A.
Self-awareness
- B.
Self-regulation
- C.
Self-esteem
- D.
Empathy
- E.
Social skills
Correct Answer
C. Self-esteemExplanation
Self-esteem is not a characteristic of emotional intelligence because it refers to an individual's overall sense of self-worth and confidence, which is more related to one's self-perception and self-image rather than their ability to understand and manage emotions. Emotional intelligence, on the other hand, includes self-awareness, self-regulation, empathy, and social skills, which all involve recognizing and understanding emotions, regulating one's own emotions, and effectively interacting with others.Rate this question:
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- 12.
A company's mission
- A.
Lays out the desired future state of the company.
- B.
Outlines the manner in which employees and managers should conduct themselves.
- C.
Defines the manner in which strategies will be developed and attained.
- D.
Describes what the company does.
- E.
Answers the question, "What will our business become?"
Correct Answer
D. Describes what the company does.Explanation
The correct answer is "describes what the company does." This is because a company's mission statement typically provides a concise summary of the organization's purpose, products or services, target audience, and overall business activities. It focuses on explaining the core activities and functions of the company, rather than outlining the desired future state, conduct guidelines, strategy development, or business aspirations.Rate this question:
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- 13.
Holly owns a landscape company and is thinking about expanding her services to include outdoor water features (waterfalls, streams, ponds). If, before making this decision, she looks at the experience of similar firms that have added outdoor water features, she is employing
- A.
Wishful thinking
- B.
Aqua-evaluation
- C.
Devil's advocacy
- D.
Outside view
- E.
Dialectic inquiry
Correct Answer
D. Outside viewExplanation
The concept of the outside view suggests that Holly is considering the experiences of similar firms that have already added outdoor water features before making her decision. By looking at the experiences of others, she is taking an external perspective and using that information to inform her own decision-making process. This approach allows her to gain insights and learn from the successes and failures of others in order to make a more informed decision about expanding her services.Rate this question:
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- 14.
A competitive advantage is considered to be a sustained competitive advantage when the
- A.
Advantage endures for a long time.
- B.
Firm is able to spread the advantage to all of its business units.
- C.
Advantage is very large.
- D.
Advantage was gained at a low cost.
- E.
Managers who developed the advantage are still employed at the firm.
Correct Answer
A. Advantage endures for a long time.Explanation
A competitive advantage is considered to be a sustained competitive advantage when it endures for a long time. This means that the advantage is not temporary or easily replicated by competitors. It implies that the firm has a unique set of resources, capabilities, or strategies that allow it to consistently outperform its competitors over an extended period. This sustained advantage gives the firm a stable and long-term position in the market, which can lead to higher profitability and market share.Rate this question:
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- 15.
The scenario approach to strategic planning involves
- A.
Devising strategies for coping with a number of different possible future states of the world
- B.
Homing in on a single prediction of future demand conditions using an iterative planning process
- C.
Functional managers setting key corporate objectives
- D.
Using computers to build virtual worlds for top-level managers.
- E.
Making planning the exclusive domain of top-level managers
Correct Answer
A. Devising strategies for coping with a number of different possible future states of the worldExplanation
The scenario approach to strategic planning involves devising strategies for coping with a number of different possible future states of the world. This means that instead of relying on a single prediction of future demand conditions, the organization considers multiple scenarios and develops strategies to address each one. This approach allows for flexibility and adaptability in the face of uncertainty, as the organization is prepared to handle various potential outcomes. It also encourages strategic thinking and proactive decision-making.Rate this question:
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- 16.
General managers are found
- A.
Only at the corporate level
- B.
Only at the business level.
- C.
Only at the functional and business levels
- D.
At the functional, business, and corporate levels
- E.
Only at the corporate and business levels.
Correct Answer
E. Only at the corporate and business levels.Explanation
General managers are found only at the corporate and business levels because they are responsible for overseeing the operations and performance of an entire organization or a specific business unit. They are involved in strategic decision-making, setting goals, and managing resources at both the corporate and business levels. Functional managers, on the other hand, are responsible for specific departments or functions within the organization and do not have the same level of authority and responsibility as general managers. Therefore, the correct answer is only at the corporate and business levels.Rate this question:
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- 17.
Devil's advocacy
- A.
Is simpler than the expert approach
- B.
Is vulnerable to the groupthink phenomenon
- C.
Results in unproductive conflict
- D.
Involves one group member being responsible for questioning the assumptions of a plan.
- E.
Results in a final plan that is a combination of a plan and a counterplan
Correct Answer
D. Involves one group member being responsible for questioning the assumptions of a plan.Explanation
Devil's advocacy involves one group member being responsible for questioning the assumptions of a plan. This approach is commonly used in group decision-making processes to ensure that all aspects of a plan are carefully considered and potential flaws or weaknesses are identified. By assigning one person the role of the devil's advocate, the group can benefit from a critical examination of the plan, leading to improved decision-making and potentially avoiding costly mistakes. This approach encourages constructive debate and helps to uncover potential blind spots or biases that may exist within the group.Rate this question:
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- 18.
Systematic errors in the decision-making process are caused by
- A.
Inadequate information.
- B.
Information overload.
- C.
Cognitive biases on the part of decisionmakers.
- D.
Poor data collection procedures.
- E.
All of the above.
Correct Answer
A. Inadequate information.Explanation
The correct answer is inadequate information. Systematic errors in the decision-making process can occur when decision-makers lack the necessary information to make informed choices. This can lead to biased or flawed decisions. Information overload, cognitive biases, and poor data collection procedures can also contribute to errors, but inadequate information is the most direct cause.Rate this question:
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- 19.
Sam Walton wanted Wal-Mart to keep costs low. Therefore, as an example to others, he drove his own car and furnished his office with plain, steel desks. In this case, Mr. Walton was displaying his
- A.
Commitment.
- B.
Vision.
- C.
Astute use of power.
- D.
Emotional intelligence
- E.
Eloquence
Correct Answer
A. Commitment.Explanation
In this scenario, Sam Walton's actions of driving his own car and furnishing his office with plain, steel desks demonstrate his commitment to keeping costs low. This shows that he is dedicated to the goal of maintaining low expenses for Wal-Mart. It reflects his determination and loyalty to the company's mission and objectives.Rate this question:
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- 20.
Which of the following is not a cognitive bias?
- A.
Escalating commitment
- B.
Reasoning by analogy
- C.
Ivory tower thinking
- D.
Representativeness
- E.
Illusion of control
Correct Answer
C. Ivory tower thinkingExplanation
Ivory tower thinking is not considered a cognitive bias because it refers to a mindset or attitude of someone who is detached from the practical realities of a situation. It is characterized by a lack of understanding or concern for the perspectives and experiences of others. While it can hinder effective decision-making and problem-solving, it is not specifically categorized as a cognitive bias, which are systematic errors in thinking that affect judgment and decision-making processes.Rate this question:
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- 21.
Profit growth is best measured
- A.
By the increase in shareholder value
- B.
By the return on investment
- C.
Month by month
- D.
Over time.
- E.
By increases in liquidity
Correct Answer
A. By the increase in shareholder valueExplanation
Profit growth is best measured by the increase in shareholder value because it reflects the overall financial performance and success of a company. When a company's profits increase, it directly benefits the shareholders by increasing the value of their investment. This metric takes into account the company's ability to generate profits consistently over time and indicates its ability to create value for its shareholders. It provides a comprehensive measure of profitability and is widely used by investors and analysts to evaluate the financial health and performance of a company.Rate this question:
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- 22.
Maximizing shareholder value is
- A.
A byproduct of a company's cost reduction programs.
- B.
Not generally a viable goal for a company
- C.
Not the responsibility of a company's managers
- D.
The ultimate goal of profit-making companies
- E.
Not required to attract risk capital
Correct Answer
D. The ultimate goal of profit-making companiesExplanation
The ultimate goal of profit-making companies is to maximize shareholder value. This means that the company aims to generate the highest possible returns for its shareholders, who have invested their capital in the company. By maximizing shareholder value, the company can attract more investors and raise additional capital, which can be used to fund growth and expansion. Additionally, maximizing shareholder value often involves implementing cost reduction programs and improving operational efficiency, which can lead to increased profitability and financial success for the company.Rate this question:
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- 23.
Vice President Chung is responsible for executing decisions about human resources. Mr. Chung is
- A.
A corporate-level general manager
- B.
Both a corporate- and business-level general manager.
- C.
A business-level general manager.
- D.
A functional manager.
- E.
A corporate-level, business-level, and functional manager.
Correct Answer
D. A functional manager.Explanation
Based on the given information, Vice President Chung is responsible for executing decisions about human resources. This indicates that Mr. Chung's role is focused on a specific function within the organization, which is human resources. Therefore, the correct answer is a functional manager.Rate this question:
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- 24.
An emergent strategy is
- A.
The result of a planned strategy
- B.
An unplanned response to unforeseen circumstances.
- C.
The product of careful top-down planning mechanisms.
- D.
The same as a realized strategy.
- E.
A group response to a problem area.
Correct Answer
B. An unplanned response to unforeseen circumstances.Explanation
An emergent strategy refers to a strategy that emerges spontaneously in response to unforeseen circumstances or events. It is not the result of a planned strategy or careful top-down planning mechanisms. It is also not the same as a realized strategy, which implies that the strategy was intentionally implemented and achieved its intended goals. Instead, an emergent strategy is a group response to a problem area, where individuals or teams come together to address the unexpected situation and develop a strategy on the spot.Rate this question:
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- 25.
Strategic implementation involves
- A.
Taking actions at the functional, business, and corporate levels.
- B.
Comparing company performance with leading companies in the industry.
- C.
Analyzing the macroenvironment for any last-minute changes that may have occurred
- D.
Only activities at the corporate level.
- E.
All of the above
Correct Answer
A. Taking actions at the functional, business, and corporate levels.Explanation
The correct answer is taking actions at the functional, business, and corporate levels. Strategic implementation refers to the process of putting a chosen strategy into action. It involves taking actions and making decisions at different levels of the organization, including functional (departmental), business unit, and corporate levels. This ensures that the strategy is effectively executed throughout the organization and aligns with the overall goals and objectives. This comprehensive approach allows for a coordinated and integrated implementation of the strategy across different levels and functions.Rate this question:
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- 26.
Jeffrey Pfeffer believes that a manager's political power comes from his or her control over
- A.
Employees' paychecks.
- B.
The firm's strategic vision.
- C.
Organizational resources.
- D.
Internal communication channels.
- E.
The company's website.
Correct Answer
C. Organizational resources.Explanation
Jeffrey Pfeffer believes that a manager's political power comes from his or her control over organizational resources. This means that managers who have control over important resources within the organization, such as budgets, equipment, and personnel, have the ability to influence and make decisions that can shape the direction and outcomes of the organization. By having control over these resources, managers can leverage their power and use it to achieve their own goals and objectives within the organization.Rate this question:
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- 27.
The first step in the strategic management process is to
- A.
Analyze the competitive environment.
- B.
Examine the organizational structure to see what changes may be required.
- C.
Analyze internal strengths.
- D.
Analyze internal weaknesses.
- E.
Select the corporate mission and major corporate goals.
Correct Answer
E. Select the corporate mission and major corporate goals.Explanation
The first step in the strategic management process is to select the corporate mission and major corporate goals. This is because before analyzing the competitive environment, examining the organizational structure, or analyzing internal strengths and weaknesses, a company needs to have a clear understanding of its purpose and objectives. By selecting the corporate mission and major goals, the company sets the direction for its strategic planning and decision-making processes. This step helps align the organization's efforts towards achieving its desired outcomes and ensures that all subsequent strategic actions are in line with the company's overarching mission and goals.Rate this question:
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- 28.
Strategy formulation refers to the
- A.
Task of designing organizational structures and control systems.
- B.
Process by which strategies are put into action.
- C.
Top-down planning process that gives rise to the implementation of emergent strategies.
- D.
Task of analyzing an organization's external and internal environment and then selecting an appropriate strategy.
- E.
Process of choosing a realized strategy
Correct Answer
D. Task of analyzing an organization's external and internal environment and then selecting an appropriate strategy.Explanation
The correct answer is the task of analyzing an organization's external and internal environment and then selecting an appropriate strategy. This explanation aligns with the definition of strategy formulation, which involves evaluating the external factors such as market trends and competition, as well as internal factors such as resources and capabilities, in order to develop a strategy that fits the organization's goals and objectives. This process of analysis and selection is crucial for effective strategy formulation.Rate this question:
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- 29.
Competition from industry to industry
- A.
Is normally the same in all industries.
- B.
Is characterized by different competitive conditions in different industries
- C.
Does not vary over time
- D.
Cannot be measured.
- E.
None of the above.
Correct Answer
B. Is characterized by different competitive conditions in different industriesExplanation
Competition from industry to industry is characterized by different competitive conditions in different industries. This means that the level of competition and the factors that affect competition can vary across different industries. Some industries may have high levels of competition due to factors such as a large number of competitors, low barriers to entry, or high customer demand. On the other hand, other industries may have lower levels of competition due to factors such as limited competition, high barriers to entry, or niche markets. Therefore, it is important to understand the specific competitive conditions of each industry when analyzing competition.Rate this question:
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- 30.
In the typical scenario planning exercise,
- A.
Most scenarios are pessimistic.
- B.
Most scenarios are optimistic.
- C.
Some scenarios are optimistic and some scenarios are pessimistic.
- D.
Only worst-case outcomes should be considered.
- E.
Only best-case outcomes should be considered.
Correct Answer
C. Some scenarios are optimistic and some scenarios are pessimistic.Explanation
In a typical scenario planning exercise, it is common to consider a range of scenarios that include both optimistic and pessimistic outcomes. This approach allows for a more comprehensive analysis of potential future situations, taking into account both positive and negative possibilities. By considering a variety of scenarios, decision-makers can better prepare for different eventualities and make more informed decisions.Rate this question:
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- 31.
Well-constructed goals should
- A.
Be precise and measurable.
- B.
Address specific issues.
- C.
Be bounded by a particular time period.
- D.
Be all of the above.
- E.
A and B.
Correct Answer
D. Be all of the above.Explanation
The correct answer is "be all of the above." Well-constructed goals should be precise and measurable, meaning that they should be clearly defined and able to be quantified or assessed. They should also address specific issues, focusing on particular areas or problems that need to be addressed. Additionally, goals should be bounded by a particular time period, setting a deadline or timeframe for achieving them. Therefore, the answer "be all of the above" is the most accurate choice as it encompasses all of these characteristics of well-constructed goals.Rate this question:
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- 32.
Which of the following cognitive biases occurs when decisionmakers commit even more resources if they receive feedback that the project is failing?
- A.
Prior hypothesis bias
- B.
Reasoning by analogy
- C.
Illusion of control
- D.
Escalating commitment
- E.
Representativeness
Correct Answer
D. Escalating commitmentExplanation
Escalating commitment is the cognitive bias that occurs when decision-makers continue to invest more resources into a failing project, even after receiving feedback that it is not working. This bias is driven by the desire to recoup losses or prove oneself right, leading decision-makers to ignore rational considerations and persist with the failing project. This bias can result in significant financial and time investments being wasted on projects that are doomed to fail.Rate this question:
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- 33.
Which of the following is the organization's principal general manager?
- A.
Board of directors
- B.
Division head
- C.
CFO
- D.
CEO
- E.
Controller
Correct Answer
D. CEOExplanation
The CEO, or Chief Executive Officer, is the highest-ranking executive in an organization and is responsible for making major corporate decisions, managing the overall operations and resources of the company, and acting as the main point of communication between the board of directors and the employees. They are the principal general manager who oversees the entire organization and sets the strategic direction for the company.Rate this question:
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- 34.
Feelings of personal responsibility for a project are most likely to lead to
- A.
Prior hypothesis biases
- B.
Escalating commitment.
- C.
Reasoning by analogy.
- D.
Representativeness.
- E.
Groupthink.
Correct Answer
B. Escalating commitment.Explanation
When individuals feel a personal responsibility for a project, they are more likely to continue investing time, resources, and effort into it, even when faced with negative outcomes or diminishing returns. This is known as escalating commitment. The sense of ownership and accountability drives them to persist in the hope of achieving success, despite mounting evidence suggesting otherwise. This behavior can be observed in situations where individuals are unwilling to abandon a failing project due to their emotional attachment and desire to avoid admitting failure.Rate this question:
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- 35.
Strategic leadership is about
- A.
Strategy formulation.
- B.
Strategy implementation.
- C.
How to effectively manage a company's strategy and create competitive advantage
- D.
Establishing effective contract processes.
- E.
Reducing a company's operating costs
Correct Answer
C. How to effectively manage a company's strategy and create competitive advantageExplanation
Strategic leadership involves effectively managing a company's strategy and creating a competitive advantage. This means that strategic leaders are responsible for developing and implementing strategies that will help the company succeed in the marketplace. They must understand how to analyze the business environment, identify opportunities and threats, and make decisions that will position the company for success. By effectively managing the company's strategy, strategic leaders can create a competitive advantage that sets the company apart from its competitors and allows it to achieve long-term success.Rate this question:
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- 36.
An effective business model
- A.
Involves how a company selects its customers.
- B.
Creates value for its customers.
- C.
Achieves and sustains a high level of profitability.
- D.
Produces goods and services.
- E.
All of the above.
Correct Answer
E. All of the above.Explanation
An effective business model involves how a company selects its customers, as this determines the target market and the strategies used to attract and retain customers. It also creates value for its customers by offering products or services that meet their needs and provide benefits. Additionally, a successful business model achieves and sustains a high level of profitability by generating revenue that exceeds costs. Finally, a business model involves producing goods and services, as this is the core activity of any business. Therefore, all of the given options are correct and contribute to an effective business model.Rate this question:
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- 37.
Good strategic leaders
- A.
Possess a willingness to delegate and empower subordinates.
- B.
Control all facets of decision making.
- C.
Are confident in their ability to make sound decisions without consulting others
- D.
Assure uniformity of purpose through the exercise of power
- E.
Have the ability to be inconsistent when the situation requires inconsistency
Correct Answer
A. Possess a willingness to delegate and empower subordinates.Explanation
Good strategic leaders possess a willingness to delegate and empower subordinates. This means that they trust their team members to take on responsibilities and make decisions, allowing them to grow and excel in their roles. By delegating tasks and empowering subordinates, leaders can focus on higher-level strategic thinking and decision making. This approach also fosters a sense of ownership and accountability among team members, leading to increased motivation and productivity. Additionally, it promotes a collaborative and inclusive work environment, where diverse perspectives and ideas are valued.Rate this question:
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- 38.
Betsy Holden is the head of Kraft Foods, a division of the Philip Morris Company. Which of the following is not likely to be one of Ms. Holden's responsibilities?
- A.
Turning corporate-level strategy into action
- B.
Defining Philip Morris's mission
- C.
Deciding how to compete in the foods industry
- D.
Supervising functional-level managers
- E.
Developing a business-level strategy
Correct Answer
B. Defining Philip Morris's missionExplanation
As the head of Kraft Foods, Betsy Holden is responsible for the division's operations and strategies. However, defining the mission of the entire Philip Morris Company would be the responsibility of the company's top executives, such as the CEO or the board of directors. Therefore, it is not likely to be one of Ms. Holden's responsibilities.Rate this question:
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- 39.
Matching an organization's structure and control systems to the requirements of a company's strategy is
- A.
Part of strategy implementation
- B.
Part of the SWOT analysis.
- C.
Facilitated through the feedback loop.
- D.
Part of internal analysis.
- E.
All of the above.
Correct Answer
A. Part of strategy implementationExplanation
Matching an organization's structure and control systems to the requirements of a company's strategy is an essential component of strategy implementation. This process involves aligning the organizational structure, decision-making processes, and control systems with the strategic objectives of the company. By doing so, the organization can effectively execute its chosen strategy and achieve its goals. This step ensures that the company's resources and capabilities are properly utilized to support the strategic direction, enabling the organization to adapt and respond to changes in the external environment.Rate this question:
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- 40.
Within a diversified company, the responsibilities of corporate-level strategic managers include
- A.
Translating the corporate mission statement into concrete strategies for individual business units.
- B.
Closely supervising the formulation of strategies at the functional level that support the company's business- and corporate-level strategies.
- C.
Allocating resources to functions within business units.
- D.
Overseeing the development of strategies for the total organization and allocating resources among its different business areas.
- E.
Identifying and establishing relationships with supplier firms.
Correct Answer
D. Overseeing the development of strategies for the total organization and allocating resources among its different business areas.Explanation
The responsibilities of corporate-level strategic managers within a diversified company involve overseeing the development of strategies for the entire organization and allocating resources among its various business areas. This means that these managers are responsible for creating the overall strategic direction for the company and ensuring that resources are allocated effectively to support the different business units. They are not directly involved in translating the corporate mission statement into strategies for individual business units or supervising functional-level strategies. Additionally, identifying and establishing relationships with supplier firms is not mentioned as a responsibility of corporate-level strategic managers in this context.Rate this question:
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- 41.
Due to a recent relaxation in pollution standards, Ford Motors is withdrawing its electric-powered cars from sales in the U.S. market. Ford is responding to a change in which of the following macroenvironmental forces?
- A.
Economic
- B.
Demographic
- C.
Political and legal
- D.
Social
- E.
Strategic
Correct Answer
C. Political and legalExplanation
Ford Motors is withdrawing its electric-powered cars from sales in the U.S. market due to a recent relaxation in pollution standards. This indicates that the change in pollution standards is a political and legal force that is influencing Ford's decision. The relaxation of pollution standards is a result of political and legal decisions made by the government, which directly affects Ford's ability to sell electric cars.Rate this question:
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- 42.
The extent of rivalry among established companies is lowest when
- A.
The industry's product is a commodity.
- B.
Demand is growing rapidly.
- C.
Exit barriers are substantial.
- D.
The industry is entering a decline stage.
- E.
The industry is dominated by a small number of large companies.
Correct Answer
B. Demand is growing rapidly.Explanation
When demand is growing rapidly, it creates more opportunities for all the established companies in the industry to expand their customer base and increase their market share. This reduces the level of rivalry among these companies as they are more focused on meeting the increasing demand rather than competing directly with each other. In such a scenario, companies are more likely to cooperate and collaborate to meet the rising demand instead of engaging in intense competition. Hence, the extent of rivalry among established companies is lowest when demand is growing rapidly.Rate this question:
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- 43.
Which of the following is not one of the factors in the economic forces of the macroenvironment?
- A.
Interest rates
- B.
Inflation
- C.
Regulation
- D.
Currency exchange rates
- E.
Economic growth rate
Correct Answer
C. RegulationExplanation
Regulation is not one of the factors in the economic forces of the macroenvironment because it refers to the rules and guidelines set by the government or regulatory bodies to control and govern various aspects of the economy. While regulation does have an impact on the economy, it is not considered a direct economic force like interest rates, inflation, currency exchange rates, and economic growth rate, which directly influence the overall economic conditions and performance.Rate this question:
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- 44.
The bargaining power of an industry's suppliers is greater when
- A.
The supply industry is fragmented.
- B.
Switching costs are high.
- C.
The industry buys in large quantities.
- D.
Many substitutes are available.
- E.
Firms in the industry can threaten backward vertical integration.
Correct Answer
B. Switching costs are high.Explanation
When switching costs are high, it means that it is difficult and costly for firms in the industry to switch suppliers. This gives the suppliers more bargaining power as they have less competition and can demand higher prices or more favorable terms. High switching costs make it less likely for firms to seek alternative suppliers, making the suppliers more influential in the industry.Rate this question:
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- 45.
Which of the following industry structures consists of a large number of small and medium-sized companies, none of which is in a position to determine industry price?
- A.
Fragmented industry
- B.
Consolidated industry
- C.
Oligopoly
- D.
Monopoly
- E.
Sector
Correct Answer
A. Fragmented industryExplanation
A fragmented industry is characterized by a large number of small and medium-sized companies, none of which have enough market power to influence industry prices. In such an industry structure, competition is high, and no single company has the ability to dominate the market or set prices. This means that companies in a fragmented industry must compete based on factors such as product differentiation, quality, or cost in order to gain a competitive advantage.Rate this question:
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- 46.
Which of the following is not one of Porter's five forces, as proposed in his original model?
- A.
Threat of complementors
- B.
Bargaining power of suppliers
- C.
Rivalry among established companies
- D.
Threat of new entrants
- E.
Threat of market changes
Correct Answer
E. Threat of market changesExplanation
Porter's original model includes the following five forces: threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products or services, and intensity of competitive rivalry. The threat of market changes is not one of Porter's five forces.Rate this question:
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- 47.
A market segment is a group of
- A.
Customers within a market that can be different from each other on the basis of their distinct attributes and specific demands.
- B.
Companies that produce similar goods or services.
- C.
Customers within a market that purchase goods or services in similar quantities.
- D.
Customers within a market that have similar levels of profitability.
- E.
None of the above.
Correct Answer
A. Customers within a market that can be different from each other on the basis of their distinct attributes and specific demands.Explanation
A market segment refers to a group of customers within a larger market who share similar characteristics and preferences. These characteristics can include distinct attributes and specific demands, which differentiate them from other segments within the market. This answer accurately describes the concept of market segmentation and highlights the idea that customers within a segment can be different from each other based on their unique attributes and demands. The other options do not fully capture the essence of market segmentation and its focus on customer differences.Rate this question:
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- 48.
Julian is asked to examine the demographic environment facing his employer, a clothing manufacturer. Which of the following should Julian examine?
- A.
Government regulations
- B.
Inflation
- C.
Manufacturing technology
- D.
Aging of the population
- E.
Society's growing interest in exercise
Correct Answer
D. Aging of the populationExplanation
Julian should examine the aging of the population as part of the demographic environment facing his employer, a clothing manufacturer. This is important because the age distribution of the population can impact the demand for different types of clothing. As the population ages, there may be a greater demand for clothing that caters to older individuals, such as comfortable and easy-to-wear designs. Understanding the demographic trend of an aging population can help Julian's employer make informed decisions about their product offerings and marketing strategies.Rate this question:
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- 49.
Economies of scale may arise from
- A.
Cost reductions gained through mass production
- B.
Discounts on bulk purchases of raw material inputs and component parts.
- C.
Advantages gained by spreading production costs over a large production volume
- D.
Cost savings associated with spreading marketing and advertising costs over a large volume of output.
- E.
All of the above.
Correct Answer
E. All of the above.Explanation
Economies of scale may arise from cost reductions gained through mass production, discounts on bulk purchases of raw material inputs and component parts, and advantages gained by spreading production costs over a large production volume. Additionally, cost savings can be associated with spreading marketing and advertising costs over a large volume of output. Therefore, the correct answer is "all of the above."Rate this question:
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- 50.
Which of the following industry structures is dominated by a small number of large companies?
- A.
Fragmented industry
- B.
Consolidated industry
- C.
Oligopoly
- D.
Monopoly
- E.
Sector
Correct Answer
A. Fragmented industryExplanation
A fragmented industry is characterized by a large number of small companies that compete with each other. In contrast, a consolidated industry is dominated by a small number of large companies. Therefore, the correct answer is fragmented industry.Rate this question:
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