Question Details

		
 	According to the text, intellectual capital is the difference between the market value and the book value of a firm. Intellectual capital can be increased by: 				
	 
 
	Increasing retention of below average workers 
 
	Attracting and retaining knowledgeable workers 
 
	Decreasing labor costs 
 
	Increasing the turnover of employees 
				
		
 	Many companies use referrals by current employees as a source for new hiring and even monetarily reward them for the following reasons: 				
	 
 
	It is less expensive than the fees paid to headhunters 
 
	Current employees are normally very careful in recommending someone because their credibility is on the line 
 
	It is a good test of employee loyalty 
 
	A and B above 
				
		
 	The role of technology in the recruitment of human capital has lowered individuals' reliance on the use social networks. 				
	 
 
True
 
False
				
		
 	The text discusses three areas a firm must be concerned with in order to keep their best and brightest employees from leaving. These include all of the following except: 				
	 
 
	Hiring/selecting 
 
	Sorting/absorbing 
 
	Developing 
 
	Retaining 
				
		
 	Knowledge workers are more loyal to their companies than traditional workers. 				
	 
 
True
 
False





	
				
		
 	The text suggests that talented professionals are typically most concerned about financial rewards. Money is the top reason why such employees take and leave jobs. 				
	 
 
True
 
False
				
		
 	Social network analysis can be used to help identify groups or clusters of individuals that comprise the network, individuals who link the clusters, and other network members. 				
	 
 
True
 
False
				
		
 	One potential downside of building social capital in an organization is "groupthink." This means everyone in the group thinks on his or her own and comes up with new ideas. 				
	 
 
True
 
False
				
		
 	The management of intellectual property involves all of the following except: 				
	 
 
	Patents 
 
	Contracts with confidentiality and noncompete clauses 
 
	Converting explicit knowledge to tacit knowledge 
 
	Copyrights and trademarks 
				
		
 	Social capital is based on the network of relationships within a firm, not in the skills and abilities of an individual employee. 				
	 
 
True
 
False
				
		
 	In order to take advantage of investment in human capital, a firm should: 				
	 
 
	Rotate workers through functions in the company as quickly as possible 
 
	Refrain from training individual employees 
 
	Establish practices that will enhance employee retention 
 
	None of the above 



				
		
 	In the knowledge economy, if a large portion of a firm's value is in intellectual and human assets, the difference between the company's market value and book value should ___________ a company with mostly physical and financial assets. 				
	 
 
	Be equal to 
 
	Be smaller than 
 
	Be larger than 
 
	Not be correlated with 
				
		
 	New knowledge involves the continual interaction between __________ and __________ knowledge. 				
	 
 
	Intellectual; pragmatic 
 
	Theoretical; practical 
 
	Tacit; explicit 
 
	Detailed; tacit 
				
		
 	Changes in our economy have forced firms to be more concerned with protecting their: 				
	 
 
	Knowledge workers 
 
	Social capital 
 
	Intellectual capital 
 
	All of the above 
				
		
 	Since electronic teams (e-teams) seldom meet face-to-face, it is not important for them to be concerned with how to combine individual contributions effectively. 				
	 
 
True
 
False
				
		
 	An internal labor market (to increase an employee's mobility within a firm) is one means of increasing employee retention. 				
	 
 
True
 
False



	
				
		
 	Among the downsides of social capital is/are: 				
	 
 
	High social capital may breed "groupthink," i.e., a tendency not to question shared beliefs 
 
	Socialization processes whereby individuals are socialized into the norms and values of the organization may become expensive 
 
	Individuals may become less willing to collaborate on joint projects 
 
	A and B 
				
		
 	Products and services that are difficult to imitate help firms sustain their profitability. 				
	 
 
True
 
False
				
		
 	An important implication of the "balanced scorecard" approach is that: 				
	 
 
	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 
 
	The key emphasis on customer satisfaction and financial goals are only a means to that end 
 
	Managers should not look at their job as primarily balancing stakeholder demands; increasing satisfaction among multiple stakeholders can be achieved simultaneously 
 
	Gains in financial performance and customer satisfaction must often come at a cost of employee satisfaction 
				
		
 	A commission-based business model, when applied to the Internet, is similar to the broadcast television model in which viewers watch shows produced with revenues from commission fees. 				
	 
 
True
 
False
				
		
 	Inbound logistics include: 				
	 
 
	Machining and packaging 
 
	Warehousing and inventory control 
 
	Repair and parts supply 
 
	Promotion and packaging 



				
		
 	One strength of the balanced scorecard is that it is very easy to implement and that there is little need for executive sponsorship. 				
	 
 
True
 
False
				
		
 	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: 				
	 
 
	Social complexity 
 
	Path dependency 
 
	Physical uniqueness 
 
	Causal ambiguity 
				
		
 	Gillette combines several technologies (e.g., metallurgy, physiology, physics) to attain unparalleled success in the wet shaving industry. This is an example of their: 				
	 
 
	Tangible resources 
 
	Intangible resources 
 
	Organizational capabilities 
 
	Strong primary activities 
				
		
 	Customer service would include: 				
	 
 
	Product promotion 
 
	Product distribution 
 
	Parts supply 
 
	Procurement of critical supplies 
				
		
 	The balanced scorecard enables managers to consider their business from all of the following perspectives except: 				
	 
 
	Customer perspective 
 
	Internal perspective 
 
	Innovation and learning perspective 
 
	Ethical perspective 


				
		
 	Content such as entertainment programming does little to improve the value proposition of a website. 				
	 
 
True
 
False
				
		
 	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: 				
	 
 
	Interrelationships among functional areas and firm strategies 
 
	Need to maintain the reputation of the company 
 
	Organizational culture and leadership 
 
	Synergy of the business units 
				
		
 	When using industry norms as a standard of comparison, managers must be sure that the firms used in the comparisons are representative of all sizes and strategies within the industry. 				
	 
 
True
 
False
				
		
 	In assessing its primary activities, an airline would examine: 				
	 
 
	Employee training programs 
 
	Baggage handling 
 
	Criteria for lease versus purchase decisions 
 
	The effectiveness of its lobbying activities 
				
		
 	Internet search activities include: 				
	 
 
	Generating action plans 
 
	Considering alternatives 
 
	Gathering information 
 
	Making payments and taking delivery 






		
				
		
 	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: 				
	 
 
	Social complexity 
 
	Path dependency 
 
	Physical uniqueness 
 
	Tangible resources 
				
		
 	Historical comparisons are most appropriate during periods of recession or economic boom. 				
	 
 
True
 
False
				
		
 	Human resource management consists of activities involved in the recruiting, hiring, training, development, and compensation of all types of personnel. It: 				
	 
 
	Supports only individual primary activities 
 
	Supports only individual support activities 
 
	Supports both individual primary and support activities and the entire value chain 
 
	Supports mostly support activities but does have some impact on primary activities 
				
		
 	Stockholders in a company are the only individuals with an interest in the financial performance in the company. 				
	 
 
True
 
False
				
		
 	Much research has supported the notion that individuals work much harder when they are asked to "do their best" rather than when they are striving toward a specific goal. 				
	 
 
True
 
False






	
				
		
 	According to the text, the "triple bottom line" approach to corporate accounting includes which three components: 				
	 
 
	Financial, environmental, and customer 
 
	Financial, organizational, and customer 
 
	Financial, environmental, and social 
 
	Financial, organizational, and psychological 
				
		
 	There are several perspectives of competition. One perspective is zero-sum thinking. Zero-sum thinking means that: 				
	 
 
	All parts of the organization gain at no loss 
 
	In order for someone to gain others must experience no gain or benefit 
 
	One can only gain at the expense of someone else 
 
	Everyone in the organization shares gains and losses equally 
				
		
 	Michael Porter argues that management innovations such as total quality, benchmarking, and business process reengineering often lead to sustainable competitive advantage. 				
	 
 
True
 
False
				
		
 	Strategy formulation and implementation is a challenging on-going process. To be effective, it should involve: 				
	 
 
	The CEO and the board of directors 
 
	The board of directors, CEO, and CFO 
 
	Line and staff managers 
 
	All of the above 
				
		
 	The four key attributes of strategic management include the idea that: 				
	 
 
	Strategy must be directed toward overall organizational goals and objectives 
 
	Strategy must be focused on long-term objectives 
 
	Strategy must be focused on one specific area of an organization 
 
	Strategy must focus on competitor strengths 




				
		
 	A CEO made a lot of mistakes such as committing errors in assessing the market and competitive conditions and improperly redesigning the organization into numerous business units. Such errors led to significant performance declines. According to the text, this example illustrates the __________ perspective of leadership. 				
	 
 
	External control 
 
	Romantic 
 
	Internal mechanism 
 
	Operational 
				
		
 	The best firms always realize their intended strategy. 				
	 
 
True
 
False
				
		
 	Organizational goals and objectives should be vague in order to allow for changes in strategy. 				
	 
 
True
 
False
				
		
 	Shell, NEC, and Proctor & Gamble have been measuring their performance according to what has been called a "triple bottom line." This technique involves an assessment of financial, social, and environmental performance. 				
	 
 
True
 
False
				
		
 	__________ involves ensuring proper strategic controls and organizational designs. 				
	 
 
	Corporate governance 
 
	Corporate-level strategy 
 
	Strategy implementation 
 
	Business-level strategy 





		
				
		
 	Peter Senge, of M.I.T., recognized three types of leaders. __________champion and guide ideas, create a learning infrastructure, and establish a domain for taking action. 				
	 
 
	Local line leaders 
 
	Executive leaders 
 
	Internal networkers 
 
	Shop floor leaders 
				
		
 	All of the following are ambidextrous behaviors except: 				
	 
 
	Taking initiative and being alert to opportunities beyond the confines of one's own job 
 
	Being cooperative and seeking opportunities to combine one's efforts with others 
 
	Intensely focusing on one's own responsibilities and maximizing the output of one's department in an organization 
 
	Being brokers, always looking to build internal linkages 
				
		
 	Corporate-level strategy addresses how firms compete and outperform their rivals as well as achieve and sustain competitive advantages. 				
	 
 
True
 
False
				
		
 	Wellpoint Health Networks states: "Wellpoint will redefine our industry: through a new generation of consumer-friendly products that put individuals back in control of their future." This is an example of a: 				
	 
 
	Strategic objective 
 
	Vision statement 
 
	Vague statement of direction 
 
	Line manager's individual goal 
				
		
 	Which statement regarding competitive advantages is true? 				
	 
 
	If several competitors pursue similar differentiation tactics, they may all be perceived as equals in the mind of the consumer 
 
	With an overall cost leadership strategy, firms need not be concerned with parity on differentiation 
 
	In the long run, a business with one or more competitive advantages is probably destined to earn normal profits 
 
	Attaining multiple types of competitive advantage is a recipe for failure 
          A manufacturing business pursuing cost leadership will likely: 				
	 
 
	Focus on a narrow market segment 
 
	Rely on experience effects to raise efficiency 
 
	Use advertising to build brand image 
 
	Put heavy emphasis on product engineering 
				
		
 	As markets mature, competition on the basis of differentiation is preferable to price competition. 				
	 
 
True
 
False
				
		
 	In a given market, key technology no longer has patent protection, experience is not an advantage, and there is a growing need to compete on price. What stage of its life cycle is the market in? 				
	 
 
	Introduction 
 
	Growth 
 
	Maturity 
 
	Decline 
				
		
 	Michael Porter's three generic strategies can be depicted on two dimensions: competitive advantage and product life cycle. 				
	 
 
True
 
False
				
		
 	All of the following are potential pitfalls of a differentiation strategy except: 				
	 
 
	Uniqueness that is not valuable 
 
	Too high a price premium 
 
	All rivals share a common input or raw material 
 
	Perceptions of differentiation may vary between buyers and sellers 




		
				
		
 	A firm can achieve differentiation through all of the following means except: 				
	 
 
	Improving brand image 
 
	Better customer service 
 
	Offering lower prices to frequent customers 
 
	Adding additional product features 
				
		
 	An important advantage of first movers or "pioneers" in a market is that they may establish brand recognition that may later serve as an important switching cost. 				
	 
 
True
 
False
				
		
 	Piecemeal productivity improvements during a turnaround typically does not involve: 				
	 
 
	Business process reengineering 
 
	Increased capacity utilization 
 
	Benchmarking 
 
	Expansion of a firm's product market scope
				
		
 	Which of the following is not one of the ways the Internet is lowering transaction costs? 				
	 
 
	Eliminating supply chain intermediaries 
 
	Evaluating employee performance 
 
	Minimizing office expenses 
 
	Reducing business travel 
				
		
 	A successful differentiation strategy lowers entry barriers because of customer loyalty and the firm's ability to provide uniqueness in its products and services. 				
	 
 
True
 
False





	
				
		
 	The size of pricing and differentiation advantages between competitors decreases in which stage of the market life cycle? 				
	 
 
	Introduction 
 
	Growth 
 
	Maturity 
 
	Decline 
				
		
 	Which of the following phrases best completes this sentence: Because of the Internet, firms that use a focus strategy have new opportunities to: 				
	 
 
	Respond quickly to customer requests 
 
	Provide more services and features 
 
	Access markets less expensively 
 
	Access niche markets in a highly specialized fashion 
				
		
 	Support value chain activities that involve excellent applications engineering support (technology development) and facilities that promote a positive firm image (firm infrastructure) characterize what generic strategy? 				
	 
 
	Differentiation 
 
	Overall cost leadership 
 
	Differentiation focus 
 
	Stuck-in-the middle 
				
		
 	The text discusses three approaches to combining overall cost leadership and differentiation competitive advantages. These are the following except: 				
	 
 
	Automated and flexible manufacturing systems 
 
	Exploiting the profit pool concept for competitive advantage 
 
	Coordinating the "extended" value chain by way of information technology 
 
	Deriving benefits from highly focused and high technology markets 







				
		
 	During the decline stage of the industry life cycle, __________ refers to obtaining as much profit as possible and requires that costs be decreased quickly. 				
	 
 
	Maintaining 
 
	Harvesting 
 
	Exiting 
 
	Consolidating 
				
		
 	The market life cycle should be used as a short-run forecasting device because it provides a conceptual framework for understanding what changes typically occur. 				
	 
 
True
 
False
				
		
 	Among the disadvantages of acquisitions are the expensive premiums that are frequently paid to acquire a business. 				
	 
 
True
 
False
				
		
 	An antitakeover tactic called (a) __________ is when a firm offers to buy shares of their stock from a company (or individual) planning to acquire their firm at a higher price than the unfriendly company paid for it. 				
	 
 
	Golden parachute 
 
	Greenmail 
 
	Poison pill 
 
	Scorched earth 
				
		
 	Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input into its manufacturing process. This is an example of: 				
	 
 
	Leveraging core competencies 
 
	Sharing activities 
 
	Vertical integration 
 
	Pooled negotiating power 




				
		
 	Portfolio management matrices are applied to what level of strategy? 				
	 
 
	Departmental level 
 
	Business level 
 
	Corporate level 
 
	International level 
				
		
 	An advantage of mergers and acquisitions is that they can enable a firm to rapidly enter new product markets. 				
	 
 
True
 
False
				
		
 	A golden parachute is a prearranged contract with managers specifying that in the event of a hostile takeover, the target firm's managers will be paid a significant severance package. 				
	 
 
True
 
False
				
		
 	Sharing activities across business units can provide two primary benefits: cost savings and revenue enhancements. 				
	 
 
True
 
False
				
		
 	Through joint ventures, firms can directly acquire the assets and competencies of other firms. 				
	 
 
True
 
False
				
		
 	__________ may be time consuming and, therefore, firms may forfeit the benefits of speed that growth through __________ and __________ can provide. 				
	 
 
	Strategic alliances; joint ventures, internal development 
 
	Internal development; mergers; acquisitions 
 
	Strategic alliances; mergers; joint ventures 
 
	Mergers; internal development; strategic alliances 


				
		
 	__________ is when a firm tries to find and acquire either poorly performing firms with unrealized potential or firms in industries on the threshold of significant, positive change. 				
	 
 
	Parenting 
 
	Restructuring 
 
	Leveraging core competencies 
 
	Sharing activities 
				
		
 	The term "golden parachutes" refers to: 				
	 
 
	A clause requiring that huge dividend payments be made upon takeover 
 
	Financial inducements offered by a threatened firm to stop a hostile suitor from acquiring it 
 
	Managers of a firm involved in a hostile takeover approaching a third party about making the acquisition 
 
	Pay given to executives fired because of a takeover 
				
		
 	A publishing company that purchases a chain of bookstores to sell its books is an example of unrelated diversification. 				
	 
 
True
 
False
				
		
 	A firm should consider vertical integration when: 				
	 
 
	The competitive situation is highly volatile 
 
	Customer needs are evolving 
 
	The firm's suppliers willingly cooperate with the firm 
 
	The firm's suppliers of raw materials are often unable to maintain quality standards 
				
		
 	Portfolio management frameworks (e.g., BCG matrix) share which of the following characteristics? 				
	 
 
	Grid dimensions are based on external environments and internal capabilities/market positions 
 
	Businesses are plotted on a 3-dimensional grid 
 
	Position in the matrix suggests a need for or ability to share, infrastructures or build on core competences 
 
	They are most helpful in helping businesses develop types of competitive advantage 



				
		
 	Individual investors are dependent upon the corporation's managers to: 				
	 
 
	Diversify the stockholder's investments in order to reduce risk 
 
	Add value to their investments in a way that the stockholders could not accomplish on their own 
 
	Achieve risk reduction at a lower cost than stockholders could obtain on their own 
 
	Maximize short-term returns in the form of dividends 
				
		
 	In recent years, many high tech firms such as Priceline.com have suffered from the negative impact of uncontrolled growth. 				
	 
 
True
 
False
				
		
 	For a core competence to be a viable basis for the corporation strengthening a new business unit, there are three requirements. Which one of the following is not one of these requirements? 				
	 
 
	The competence must help the business gain strength relative to its competition 
 
	The new business must be similar to existing businesses to benefit from a core competence 
 
	The collection of competencies should be unique, so that they cannot be easily imitated 
 
	The new business must have an established large market share 
				
		
 	To illustrate interrelationships among different segments of the general environment: The persistence of large U.S. trade deficits (__________) has led to greater demand for protectionist measures, such as trade barriers and quotas (__________). These measures lead to higher prices for U.S. consumers and fuel inflation (__________). 				
	 
 
	Macroeconomic, sociocultural, political/legal 
 
	Macroeconomic, political/legal, macroeconomic 
 
	Macroeconomic, technological, macroeconomic 
 
	Macroeconomic, global, macroeconomic 






				
		
 	The power of suppliers will be enhanced if they are able to maintain a credible threat of forward integration. 				
	 
 
True
 
False
	
				
		
 	Rivalry is most intense when there are high exit barriers and high industry growth. 				
	 
 
True

 
False
				
		
 	Supplier power tends to be highest in industries where products are vital to buyers, where switching from one supplier to another is very costly, and where there are many suppliers. 				
	 
 
True
 
False
				
		
 	Which of the following would be considered part of a firm's general environment? 				
	 
 
	Decreased entry barriers 
 
	Higher unemployment rates 
 
	Increased bargaining power of the firm's suppliers 
 
	Increased competitive intensity 
				
		
 	Exit barriers arise from: 				
	 
 
	Specialized assets with no alternative use 
 
	Governmental and social pressures 
 
	Strategic interrelationships with other business units within the same company 
 
	All of the above 
				
		
 	A supplier group would be most powerful when there is/are: 				
	 
 
	Many suppliers 
 
	Few substitute products 
 
	Low differentiation of products supplied 
 
	High threat of backward integration by the buyers 

		
				
		
 	The aging of the population of the United States: 				
	 
 
	Is a myth 
 
	Increases demand for products geared to retirees 
 
	Is an important sociocultural trend 
 
	Is an important trend in the political and legal environment 
		
				
		
 	Technological innovations can create entirely new industries and alter the boundaries of industries. 				
	 
 
True
 
False
				
		
 	Interest rate increases have a __________ impact on the residential home construction industry and a __________ effect on industries that produce consumer necessities such as prescription drugs or basic grocery items. 				
	 
 
	Positive; negligible 
 
	Negative; negligible 
 
	Negative; positive 
 
	Positive; negative 
				
		
 	In most industries, new entrants will be a bigger threat because the Internet lowers entry barriers. 				
	 
 
True
 
False
				
		
 	Michael Porter's Five Forces Analysis is a dynamic tool for analyzing industry attractiveness. 				
	 
 
True
 
False





	
				
		
 	Product differentiation by incumbents act as an entry barrier because: 				
	 
 
	New entrants cannot differentiate their products 
 
	Incumbents will take legal action if new entrants do not differentiate their products 
 
	New entrants will have to spend heavily to overcome existing customer loyalties 
 
	It helps a firm to derive greater economies of scale 


				
		
 	Increasingly larger numbers of women entering the work force since the early 1970s is an example of: 				
	 
 
	Demographic changes 
 
	Political and legal environmental changes 
 
	Sociocultural changes 
 
	Technological developments 
				
		
 	Which of the following firms would likely pose the least competitive threat? 				
	 
 
	A firm in the same industry and in the same strategic group 
 
	A firm that produces substitute goods to your product line 
 
	A competitor to your product where a high switching cost exists 
 
	A firm in the same industry and in the nearest strategic group looking to join your group 
				
		
 	Emerging sociocultural changes in the environment include: 				
	 
 
	Changes in the ethnic composition 
 
	The increasing educational attainment of women in the past decade 
 
	Progressively less disposable income by consumers 
 
	Changes in the geographic distribution of the population 

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