Question Details

Multiple Choice Questions
1. Which of the following is not a limitation of SWOT (Strengths, Weaknesses,
Opportunity, Threats) analysis?
A. Organizational strengths may not lead to competitive advantage
B. SWOT's focus on the external environment is too broad and integrative
C. SWOT gives a one-shot view of a moving target
D. SWOT overemphasizes a single dimension of strategy
All of these are limitations
2. In value chain analysis, the activities of an organization are divided into two major
categories of value activities: primary and support. Which of the following is a
primary activity?
A. Purchasing key inputs
B. Recruiting and training employees
C. Repairing the product for the consumer
D. Monitoring the cost of producing the product through a cost accounting system
3. Inbound logistics include
A. Machining and packaging
B. Warehousing and inventory control
C. Repair and parts supply
D. Promotion and packaging
4. In assessing its primary activities, an airline would examine
A. Employee training programs
B. Baggage handling
C. Criteria for lease versus purchase decisions
D. The effectiveness of its lobbying activities
5. Advertising is a __________ activity. Supply of replacement parts is a __________
activity.
A. Primary; primary
B. Support; primary
C. Support; secondary
D. Primary; support
6. Which of the following examples demonstrates how successful organizations manage
their primary activities?
A. By employing JIT inventory systems, Hewlett Packard has been able to cut
lead time from five days to one
B. Motorola has revised its compensation system to reward employees who learn a
variety of skills
C. National Steel improved its efficiency by consolidating, reducing the number of job
classifications, and broadening worker responsibilities
D. Wal-Mart implemented a sophisticated information system that resulted in reduced inventory carrying costs and shortened customer response times
Which of the following is not an advantage of Just-In-Time inventory systems?
A. Reduced raw material storage costs
B. Minimized idle production facilities and workers
C. Reduced work-in-process inventories
D. Reduced dependence on suppliers
7. XYZ Corp. is focusing on the objective of low-cost, high quality, on-time production
by minimizing idle productive facilities and workers. The XYZ Corp. is taking
advantage of a __________ system.
A. Last In, First Out (LIFO)
B. Just-In-Time (JIT)
C. First In, First Out (FIFO)
D. Highly mechanized
8. ___________ are associated with collecting, storing, and distributing the product or
service to buyers. They consist of warehousing, material handling, delivery operation,
order processing, and scheduling.
A. Services
B. Inbound logistics
C. Outbound logistics
D. Operations
9. Customer service would include
A. Product promotion
B. Product distribution
C. Parts supply
D. Procurement of critical supplies
10. Which of the following is a support activity?
A. Inbound logistics
B. Operations
C. Technology development
D. Customer service
11. Which of the following lists consists of support activities?
A. Human resource management, technology development, customer service, and
procurement
B. Human resource management, customer service, marketing and sales, and
operations
C. Human resource management, information systems, procurement, and firm
infrastructure
D. Customer service, information systems, technology development, and procurement

12. Human resource management consists of activities involved in the recruiting, hiring,
training, development, and compensation of all types of personnel. It
A. Supports only individual primary activities
B. Supports only individual support activities
C. Supports both individual primary and support activities and the entire value
chain
D. Supports mostly support activities but does have some impact on primary activities
13. According to value chain analysis, which of the following would be considered part of
a firm's general administration?
A. Human resource management
B. Information systems
C. Technology development
D. Procurement
14. Although general administration is often viewed only as overhead expense, it can
become a source of competitive advantage. Examples include all of the following
except:
A. Negotiating and maintaining ongoing relations with regulatory bodies
B. Effective information systems contributing significantly to a firm's overall cost
leadership strategy
C. Marketing expertise increasing a firm's revenues and enabling it to enter new
markets
D. Top management providing a key role in collaborating with important customers
15. For firms such as Walgreen Co. (a chain of drugstores), information systems have
been a source of competitive advantage by enabling them to
A. Differentiate service
B. Automate some operations
C. Respond to consumer needs
D. All of the above
16. 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. Interrelationships among functional areas and firm strategies
B. Need to maintain the reputation of the company
C. Organizational culture and leadership
D. Synergy of the business units

17. 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
18. The three key types of resources that are central to the resource-based view of the firm
are:
A. Tangible resources, intangible resources, and organizational structure
B. Culture, tangible resources, intangible resources
C. Tangible resources, intangible resources, and organizational capabilities
D. Tangible resources, intangible resources, and top management
19. Examples of tangible resources (in the resource-based view of the firm) include:
A. Financial resources, human resources, and firm competencies
B. Financial resources, physical resources, and the capacity to combine intangible
resources
C. Financial resources, physical resources, and technological resources
D. Outstanding customer service, innovativeness of products, and reputation
20. __________ are typically embedded in unique routines and practices that have
evolved and accumulated over time - such as trust and effective work teams.
A. Tangible resources
B. Intangible resources
C. Reputational resources
D. Organizational capabilities
21. 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. Tangible resources
B. Intangible resources
C. Organizational capabilities
D. Strong primary activities
22. __________ are the competencies or skills that a firm employs to transform inputs into
outputs.
A. Tangible resources
B. Intangible resources
C. Reputational resources
D. Organizational capabilities

23. 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. Rare
B. Easy for competitors to substitute
C. Valuable
D. Difficult for competitors to imitate

24. A competitive advantage based on inimitability can be sustained for at least some time
if it has the following characteristics.
A. Physical uniqueness, path dependency, causal ambiguity, and social
complexity
B. Psychographic uniqueness, path dependency, causal ambiguity, and substitutability
C. Rarity, path dependency, causal ambiguity, and social substitutability
D. Geographic uniqueness, cause dependency, social ambiguity, and path complexity
25. 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. Social complexity
B. Path dependency
C. Physical uniqueness
D. Causal ambiguity
26. 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. Social complexity
B. Path dependency
C. Physical uniqueness
D. Tangible resources
27. The following are examples of socially complex organizational phenomena except
A. A firm's culture
B. Interpersonal relations among a firm's managers
C. Complex physical technology
D. Leadership and trust
28. A resource is valuable and rare but neither difficult to imitate nor without substitutes.
This should enable the firm to attain
A. No competitive advantage
B. Competitive parity
C. A temporary competitive advantage
D. A sustainable competitive advantage
29. Employees will be able to obtain a proportionately high level of profits they generate
(relative to the firm) if
A. Suppliers are loyal to the firm
B. The cost to the firm of replacing them is high
C. Their expertise is firm-specific
D. The firm's resources are path dependent

30. Historical comparisons provide information to managers about changes in a firm's
competitive position. Historical comparisons are often misleading
A. If the overall strategy of the firm is the same
B. In periods of recession or economic boom
C. If the firm shows constant growth
D. If the firm's stock is publicly traded
31. The best measure of a company's ability to meet imminent financial obligations is
known as the
A. Current ratio
B. Total asset turnover
C. Debt ratio
D. Profit margin
32. Which of the following would be most difficult to assess?
A. The liquidity position of a firm
B. The legitimacy and reputation of a firm
C. Market share growth
D. The efficiency with which a firm utilizes its assets
33. Which of these categories of financial ratios is used to measure a company's ability to
meet its short-term financial obligations?
A. Leverage ratios
B. Profitability ratios
C. Activity ratios
D. Liquidity ratios
34. Ratios that reflect whether or not a firm is efficiently using its resources are known as
A. Activity ratios
B. Leverage ratios
C. Liquidity ratios
D. Profitability ratios
35.
36. How should managers assess changes in their firm's competitive position in their
industries during a period of unusual economic growth?
A. Compare the firm's financial ratios with ratios of firms in other strategic
groups in the industry
B. Compare the firm's financial ratios over the most recent one-year period
C. Compare the financial ratios of all firms in the country's industry—some of whom
serve very diverse market segments and have specialized accordingly
D. Compare the financial ratios of firms in the company's strategic group

37. The "balanced scorecard" provides top managers with a __________ view of the
business.
A. Detailed and complex
B. Fast but comprehensive
C. Simple and routine
D. Long-term financial
38. The "balanced scorecard" developed by Kaplan and Norton helps to integrate
A. Financial analysis and a firm's reputation
B. Intangible resources and operational measures
C. Financial analysis and stakeholder perspectives
D. Short-term perspectives and strategic positioning
39. The balanced scorecard enables managers to consider their business from all of the
following perspectives except
A. Customer perspective
B. Internal perspective
C. Innovation and learning perspective
D. Ethical perspective
40. An important implication of the "balanced scorecard" approach is that:
A. 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
B. The key emphasis on customer satisfaction and financial goals are only a means to
that end
C. Managers should not look at their job as primarily balancing stakeholder
demands; increasing satisfaction among multiple stakeholders can be achieved
simultaneously
D. Gains in financial performance and customer satisfaction must often come at a cost
of employee satisfaction
41. Four Internet-based activities that are enhancing firms' capabilities to use the Internet
to add value include:
A. Outsourcing, problem-solving, bill-paying, and delivery
B. Evaluating, bill-paying, customizing, and returning
C. Search, rescue, repair, return
D. Search, evaluation, problem-solving, and transaction
42. Internet search activities include
A. Generating action plans
B. Considering alternatives
C. Gathering information
D. Making payments and taking delivery

43. The value-adding activity known as problem-solving
A. Involves streamlining operations
B. Is typically used in the context of providing unique services
C. Refers to comparing the costs and benefits of various options
D. Creates access to products ratings and price comparisons
44. Unique content will not add value to an Internet website under the following
condition(s):
A. The cost of developing the content exceeds the benefits gained
B. Visitors to the website do not value or use the content
C. The content is unreliable
D. All of the above
45. Examples of value-adding content often found on websites include all of the following
except
A. Customer feedback
B. Advertising
C. Expertise
D. Entertainment programming
46. Internet business models
A. Outline methods that online businesses use to create value
B. Cannot be used by traditional businesses
C. Outline specific actions a firm needs to take to be profitable
D. Cannot be combined to create additional competitive advantages
47. All of the following are examples of Internet business models except
A. Referral-based model
B. Subscription-based model
C. Prescription-based model
D. Production-based model

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