Chapter: Unit 2
1.

Which of the following statements is not true when describing a successful strategy?

A. It provides some property that is unique or distinctive
B. It provides the means for renewing competitive advantage
C. It addresses changes in the external environment
D. It guarantees long term survival
Answer» B. It provides the means for renewing competitive advantage
2.

In the context of strategic management resources can be defined as:

A. The knowledge and skills within the organization
B. Something that an organization owns or controls that cannot be copied
C. Something that an organization owns, controls or has access to on a semipermanent basis
D. The physical assets of the organization
Answer» D. The physical assets of the organization
3.

In the context of strategic management, stakeholders can be defined as:

A. An individual or group with a financial stake in the organization
B. An external individual or group that is able to impose constraints on the organization
C. Internal groups or individuals that are able to influence strategic direction of the organization
D. An individual or group with an interest in the organization's activities and who seeks to influence them
Answer» C. Internal groups or individuals that are able to influence strategic direction of the organization
4.

In the case where an organization acquires its supplier, this is an example of:

A. Horizontal integration
B. Forwards vertical integration
C. Backwards vertical integration
D. Downstream vertical integration
Answer» D. Downstream vertical integration
5.

When a firm seeks the benefits of global integration and local adaptation, it is best described as which type of strategy?

A. Transnational
B. Global
C. Multi-national
D. Global-local
Answer» C. Multi-national
6.

Knowledge which is difficult to define and codify is known as:

A. Explicit
B. Tangible
C. Tacit
D. Random
Answer» A. Explicit
7.

Competitive advantage based on the creation of opportunities using internal resources is characterized by which approach/view?

A. The positioning approach
B. The outside-in approach
C. The resource-based view
D. The knowledge-management approach
Answer» C. The resource-based view
8.

'Reputation' in the context of an organization's resources can provide competitive advantage because:

A. It is difficult to copy
B. It is based on word-of-mouth
C. It is a threshold resource
D. It is explicit
Answer» A. It is difficult to copy
9.

A strategic manager that seeks to reach acceptable profit targets as opposed to making as much profit as possible is making decisions of which type?

A. Satisfactory
B. Satisficing
C. Irrational
D. Optimal
Answer» A. Satisfactory
10.

A strategic decision can be distinguished from other types of decisions by three factors, these are magnitude, time-scale and:

A. Commitment
B. Riskiness
C. Impact
D. Longevity
Answer» B. Riskiness
11.

'Logical incrementalism' can be described as:

A. Careful design and planning
B. Emergent
C. Cautious resource allocation
D. Top management rational analysis
Answer» D. Top management rational analysis
12.

An organization in which strategy development is characterized by internal political negotiation and self-interest is operating in which strategy-making mode?

A. The transactive mode
B. The muddling through mode
C. The command mode
D. The emotional mode
Answer» C. The command mode
13.

'Influence' is defined as the ability to ____________ someone to something they would not otherwise have done.

A. Intimidate
B. Force
C. Order
D. Persuade
Answer» A. Intimidate
14.

McDonalds is deciding whether to expand into manufacturing kitchen equipment in China. At what level is this decision likely to be made?

A. Business
B. Corporate
C. Functional
D. International
Answer» A. Business
15.

The authors believe there are three tests that can be applied to judge whether a strategy is 'good'. These are:

A. Fit, distinctiveness, sustainability
B. Fit, internal resources, external environment
C. Distinctiveness, internal resources, fit
D. Sustainability, distinctiveness, external environment
Answer» B. Fit, internal resources, external environment
16.

Diversification into many unrelated areas is an example of:

A. Risk management
B. Good management
C. Uncertainty reduction
D. Sustainability
Answer» C. Uncertainty reduction
17.

According to Porter, dealing with the paradox of premature commitment versus not enough commitment involves some kind of:

A. Trade-off
B. Lock-in
C. Lock-out
D. Diversification
Answer» C. Lock-out
18.

Corporate governance is concerned with:

A. Executive remuneration, disclosure of information, auditing and accounting procedures, and organizations' management structures
B. Elections to the board of directors
C. Relationships with national governments
D. Corporate-level strategy
Answer» C. Relationships with national governments
19.

The principal-agent problem is concerned with:

A. Procurement
B. Appropriation of shareholders' investment by a firm's managers
C. How to control a firm's distributors and dealers
D. Corporate social responsibility
Answer» D. Corporate social responsibility
20.

Which of the following industries is least likely to follow the conventional life-cycle model?

A. Software development
B. Coal mining
C. Insurance broking
D. Hairdressing
Answer» A. Software development
21.

Brandenburger and Nalebuff added a sixth force to Porter's Five Forces. It is known as:

A. The threat of substitutes
B. The power of complementors
C. Seller power
D. Government regulation
Answer» A. The threat of substitutes
22.

The Six Forces framework is based on the principle of:

A. Resource-based view
B. Conduct - structure - performance
C. Econometrics
D. Structure - conduct – performance
Answer» A. Resource-based view
23.

In the Six Forces, the 'threat of new entrants' relates to:

A. Barriers to entry
B. Substitutes
C. Switching costs
D. Buyer power
Answer» D. Buyer power
24.

An industry characterized by irregular patterns of stability, rapid technological change, high uncertainty and global competition can be described as:

A. Hypercompetitive
B. Hyperactive
C. Atypical
D. Co-optive
Answer» D. Co-optive
25.

A situation in which the joint moves of two firms can determine how much money each firm can make or lose can be explained using the story of:

A. The Trojan Horse
B. The Icarus Paradox
C. The Prisoner's Dilemma
D. The Icarus Dilemma
Answer» D. The Icarus Dilemma
26.

In the context of environmental analysis, 'munificence' means:

A. The extent to which resources are freely available to support firms in an industry and enable them to grow
B. The extent to which it is diverse
C. The extent to which it is stable or turbulent
D. The extent to which the industry follows the conventional life-cycle stages
Answer» C. The extent to which it is stable or turbulent
27.

A 'market driven' firm will typically:

A. Develop new products and then find someone to sell them to
B. Define the target market and produce products that will satisfy those customers' needs
C. Operate in a product-oriented fashion
D. Suffer from market-myopia
Answer» B. Define the target market and produce products that will satisfy those customers' needs
28.

Segmentation is a way of:

A. Subdividing markets
B. Subdividing industries
C. Differentiating products
D. Subdividing organizations into departments
Answer» A. Subdividing markets
29.

A B2C market is:

A. Business to commercial
B. Business to consumer
C. Business to contract
D. Business to corporate
Answer» D. Business to corporate
30.

Segmentation is a compromise between two ideals: mass marketing and:

A. Customization
B. Uniformity
C. Innovation
D. Convergence of tastes
Answer» B. Uniformity
31.

Porter's generic strategies are:

A. Low price, differentiation, focus
B. Cost leadership, differentiation, cost focus, focus differentiation
C. Price leadership, differentiation, focus
D. Low cost, differentiation, focus differentiation
Answer» B. Cost leadership, differentiation, cost focus, focus differentiation
32.

According to Porter, if an organization does not follow either a cost leadership strategy or a differentiation strategy they are:

A. Hybrid
B. Stuck in the middle
C. Typical
D. No frills
Answer» C. Typical
33.

Subsidiaries consider regional environment for policy / Strategy formulation is known as

A. Polycentric Approach
B. Regiocentric Approach
C. Ethnocentric Approach
D. Geocentric Approach
Answer» B. Regiocentric Approach
34.

According to this theory the holdings of a country’s treasure primarily in the form of gold constituted its wealth.

A. Gold Theory
B. Ricardo Theory
C. Mercantilism
D. Hecksher Theory
Answer» C. Mercantilism
35.

Which is not an Indian Multinational Company?

A. Unilever
B. Asian Paints
C. Piramal
D. Wipro
Answer» A. Unilever
36.

Globalization refers to:

A. Lower incomes worldwide
B. Less foreign trade and investment
C. Global warming and their effects
D. A more integrated and interdependent world
Answer» D. A more integrated and interdependent world
37.

A likely consequence of rationalization is:

A. Lower number of employees
B. Lower revenues
C. Higher costs
D. Price decrease
Answer» C. Higher costs
38.

A likely consequence of merger and acquisition is:

A. Lower revenues
B. Price increase
C. Higher costs
D. Price decrease
Answer» B. Price increase
39.

All the following statements are correct except:

A. Case studies examine specific mergers and look for firm specific examples of merger benefits.
B. Stock market studies tend to suggest that most of the stock market gains from merger accrue to shareholders of target firms.
C. Financial and accounting studies typically conclude that mergers benefit shareholders
D. Case studies, the stock market and financial accounting based studies typically conclude that mergers are not always a good idea.
Answer» C. Financial and accounting studies typically conclude that mergers benefit shareholders
40.

All of the following examples are hypothetical cases of horizontal growth except:

A. Coca Cola and Pepsi Cola merge
B. Manchester United and Manchester City merge
C. British Airways and Easyjet merge
D. Ford and Michelin merge
Answer» D. Ford and Michelin merge
41.

In 90’s the global management perception was based on

A. Standardization v/s adaptation
B. Globalization v/s localization
C. Global integration v/s Local Responsiveness
D. Local responsiveness
Answer» C. Global integration v/s Local Responsiveness
42.

Which of the following is an advantage of turnkey projects?

A. Can earn a return on knowledge asset
B. Will not create a competitor
C. Tight control of operations
D. All the above
Answer» A. Can earn a return on knowledge asset
43.

The agreement signed by Ranbaxy Laboratory and Bayer AG of Germany in the year 1999 is an example of

A. Subsidiary
B. Joint venture
C. Strategic International Alliance
D. License agreement
Answer» C. Strategic International Alliance
44.

CISF pricing includes the following

A. Commission is paid to the agent involved in the transaction
B. Cost of the goods exported
C. Freight & Insurance charges for the goods exported
D. All of the above
Answer» D. All of the above
45.

When the transaction is of high value, complex In nature and more technical __________ method of export sales contract is used.

A. Performa invoice
B. Purchase order
C. Sales contact
D. None of the above
Answer» C. Sales contact
46.

Vertical mergers are those in which the participants are

A. In the same industry.
B. In different industries
C. In different phases of the value chain
D. None of the above.
Answer» C. In different phases of the value chain
47.

Which of the following are commonly cited reasons for M&As?

A. Synergy
B. Market power
C. Strategic realignment
D. All of the above
Answer» D. All of the above
48.

A merger is a combination of businesses in which

A. Two businesses combine to form a new business.
B. The participants are necessarily comparable in size, competitive position, Profitability, and market capitalization.
C. One of the two firms becomes a wholly owned subsidiary of the other firm.
D. None of the above.
Answer» D. None of the above.
49.

All of the following are common motives for a merger or acquisition except for

A. Operating synergy.
B. Financial synergy.
C. Raising the cost of capital.
D. Buying undervalued assets.
Answer» C. Raising the cost of capital.
50.

Buyers can exercise high bargaining power over their suppliers if

A. The volume they buy accounts for a large percentage of their suppliers sales.
B. There are few buyers in the market.
C. They have many suppliers to choose from.
D. There is a high concentration of suppliers.
Answer» A. The volume they buy accounts for a large percentage of their suppliers sales.
51.

The generic competitive strategies are

A. Overall Cost Leadership
B. Cost Focus
C. Differentiation and Focused Differentiation
D. All the above
Answer» D. All the above
52.

What are core competences?

A. Resources which critically underpin competitive advantage and that others cannot obtain.
B. Activities and processes needed to meet customers' minimum requirements and therefore to continue to exist.
C. Key skills required for success in a particular business.
D. Activities that underpin competitive advantage and are difficult for competitors to imitate or obtain.
Answer» D. Activities that underpin competitive advantage and are difficult for competitors to imitate or obtain.
53.

Synergy' can best be explained by which of the sums below?

A. 2+2=5.
B. 2+2=4.
C. 2-2=1.
D. 2-2=0.
Answer» A. 2+2=5.
54.

What do you mean by the term “holding company” is:

A. organization with a balanced portfolio of individual businesses
B. decentralized organization with a small head office that organizes finance for the subsidiaries
C. centralized organization with a small head office that helps subsidiaries develop and finance their strategies
D. decentralized organization with a large head office that offers a broad range of advice and services to subsidiaries
Answer» B. decentralized organization with a small head office that organizes finance for the subsidiaries
55.

A firm with a functional director for 6 areas with an area director for 3 functions. There, staff at each area will be reporting to 2 bosses. This firm has which type of structure?

A. Project structure
B. Matrix structure
C. Divisionalized structure
D. Front-back structure
Answer» B. Matrix structure
56.

Organization structure that is a functional or divisional structure but at the same time also includes project teams for dealing with specific issues is called:

A. An M-form structure
B. A front-back structure
C. A networked structure
D. A hybrid structure
Answer» D. A hybrid structure
57.

Organization whose structure is divided into two main parts - one dealing with product groups and one dealing with customer segments is called:

A. A front-back structure
B. A product-customer structure
C. A back to back structure
D. A matrix structure
Answer» A. A front-back structure
58.

Choose the right sentence

A. Organization's structure would be expected to evolve as it grew larger and more diverse
B. Every organization starts out with a simple structure, then moves to a functional structure before becoming divisionalized
C. Network structures are superior to functional ones
D. Organizational performance will suffer if the structure is not stable
Answer» A. Organization's structure would be expected to evolve as it grew larger and more diverse
59.

Format of reporting and for decision making relationships can be defined as the organizational:

A. Span of control
B. Architecture
C. Hierarchy
D. Chain of command
Answer» C. Hierarchy
60.

Main component of Organization's architecture are structural hierarchy, values and belief systems, contracts and relationships and (two more):

A. Control systems and ways of working
B. Information infrastructure and power structures
C. Control systems and power structures
D. Control systems and information infrastructure
Answer» D. Control systems and information infrastructure
61.

‘Vertical architecture' is the one which has:

A. Has a tall hierarchy
B. Has many layers of management
C. Extends beyond the boundaries of legal ownership
D. Is very bureaucratic
Answer» C. Extends beyond the boundaries of legal ownership
62.

Five dimensions are used to judge Organizational structures and systems (ABCDE) to assess whether they are achieving an appropriate balance. These five dimensions are Autonomy, Bureaucracy, Cultural Control, Decentralization and:

A. Equal Opportunities
B. Economic Incentives
C. Equality and Diversity
D. Evidence of Learning
Answer» B. Economic Incentives
63.

Those Organizations that are relatively good at developing some relevant capabilities to respond to a changing context are known as:

A. Knowing organizations
B. Stretch organizations
C. Learning organizations
D. Absorptive organizations
Answer» C. Learning organizations
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