Question 1

One indicator of the value of a firm's intangible resources is the difference between its market capitalization and the fair value of its tangible assets.

Accepted Answer

A) True 
 B)False

Question 2

Companies with the highest ratios of market value to book value tend to be those,either with valuable brands or valuable proprietary technologies.

Accepted Answer

A) True 
 B)False

Question 3

If an organization possesses strengths in a resource or capability that bears little relationship to the industry's key success factors it should:

Accepted Answer

A) Regard that resource or capability as strategically irrelevant. 
B) Seek to sell that resource r capability to another organization. 
C) Seek an innovative approach to making that resource or capability strategically relevant. 
D) Adopt a niche strategy. 
A) Regard that resource or capability as strategically irrelevant. 
B) Seek to sell that resource r capability to another organization. 
C) Seek an innovative approach to making that resource or capability strategically relevant. 
D) Adopt a niche strategy.

Question 4

"Organizational capability" and "organizational competence" refer to two concepts which,although related,are different.

Accepted Answer

A) True 
 B)False

Question 5

A major reason why many companies have the high valuation ratios (ratio of stock market value to balance sheet net asset value)is:

Accepted Answer

A) Stock market irrationality which results in some companies becoming overvalued. 
B) The undervaluation of intangible resources on companies' balance sheets. 
C) Stock market doubts over the valuation of financial assets by companies and their auditors. 
D) The rise of intellectual property valuation as a result of recent patent litigation. 
A) Stock market irrationality which results in some companies becoming overvalued. 
B) The undervaluation of intangible resources on companies' balance sheets. 
C) Stock market doubts over the valuation of financial assets by companies and their auditors. 
D) The rise of intellectual property valuation as a result of recent patent litigation.

Question 6

To exploit its tangible assets more effectively requires that a firm:

Accepted Answer

A) Economizes on these assets by changing its depreciation policy 
B) Economizes on underutilized assets and redeploys assets into more profitable uses 
C) Expands sales in order to ensure they are fully deployed 
D) Leases assets rather than owning them in order to boost return on capital employed 
A) Economizes on these assets by changing its depreciation policy 
B) Economizes on underutilized assets and redeploys assets into more profitable uses 
C) Expands sales in order to ensure they are fully deployed 
D) Leases assets rather than owning them in order to boost return on capital employed

Question 7

The "resource-based view" emphasized that a firm's strategy needs to be environmental sustainable.

Accepted Answer

A) True 
 B)False

Question 8

Porter's value chain is useful tool for understanding the sequence of activities that a firm performs but is of limited value in mapping a firm's resources and capabilities.

Accepted Answer

A) True 
 B)False

Question 9

Corporate balance sheets do not include human resources (since these are not owned by the firm),apart from this major exception,balance sheets offer a comprehensive picture of a firm's resources.

Accepted Answer

A) True 
 B)False

Question 10

The firm's ability to appropriate the rents generated by its organizational capabilities:

Accepted Answer

A) Is guaranteed by the fact that firms have full ownership of their capabilities 
B) Is greater for firms in high technology than in low technology industries 
C) Is weakened if a firm uses independent contractors instead of full-time employees 
D) Depends upon the extent to those capabilities are embedded in team-based process that are heavily dependent upon corporate systems 
A) Is guaranteed by the fact that firms have full ownership of their capabilities 
B) Is greater for firms in high technology than in low technology industries 
C) Is weakened if a firm uses independent contractors instead of full-time employees 
D) Depends upon the extent to those capabilities are embedded in team-based process that are heavily dependent upon corporate systems

Question 11

The difficulties faced by Eastman Kodak,Smith Corona.and Olivetti in adapting to radical technological change within their markets point to:

Accepted Answer

A) The short-sightedness of senior managers in recognizing the implications of new technologies. 
B) The power of digital technology as a force for creative destruction. 
C) The need for firms to devote more resources to technological forecasting. 
D) The difficulties established firms experience in building the new capabilities. 
A) The short-sightedness of senior managers in recognizing the implications of new technologies. 
B) The power of digital technology as a force for creative destruction. 
C) The need for firms to devote more resources to technological forecasting. 
D) The difficulties established firms experience in building the new capabilities.

Question 12

The main strategic lesson to be drawn from the Biblical story of David and Goliath is:

Accepted Answer

A) The importance of first-mover advantage. 
B) Adapt strategy to your relative strengths. 
C) Conventional strategies don't work for newcomers. 
D) The Israelis usually win. 
A) The importance of first-mover advantage. 
B) Adapt strategy to your relative strengths. 
C) Conventional strategies don't work for newcomers. 
D) The Israelis usually win.

Question 13

The profits arising from market power are called monopoly rents,whereas those arising from superior resources are Ricardian rents

Accepted Answer

A) True 
 B)False

Question 14

A key feature of efficient and reliable processes is that a firm has been able to perform them routinely.However,routinizing a process does not necessarily make it a distinctive capability.

Accepted Answer

A) True 
 B)False

Question 15

For a resource or capability to be a source of competitive advantage,two conditions must be present: scarcity and relevance

Accepted Answer

A) True 
 B)False

Question 16

One implication of the resource-based perspective is that:

Accepted Answer

A) Firms tend to adopt similar or close strategies 
B) By aligning their strategies to their resources and capabilities,firms emphasize their differences rather than their similarities 
C) Firms focus on building a stronger portfolio of capabilities than their rivals 
D) Firms focus on reducing their vulnerability by correcting their weaknesses 
A) Firms tend to adopt similar or close strategies 
B) By aligning their strategies to their resources and capabilities,firms emphasize their differences rather than their similarities 
C) Firms focus on building a stronger portfolio of capabilities than their rivals 
D) Firms focus on reducing their vulnerability by correcting their weaknesses

Question 17

A bank is establishing a fixed income trading department.It is considering whether to hire a team of star traders or to invest a similar sum of money in developing a proprietary,automated trading system.The most valid reason for investing in the automated trading system in preference ot hiring star traders is:

Accepted Answer

A) The proprietary trading system is likely to generate better returns since star traders are in a powerful position to negotiate pay packages which appropriate the major part of the profit they create. 
B) Advanced software is better than human intuition at identifying mispricing in financial markets. 
C) Star traders are difficult to manage and can easily become "rogue traders". 
D) It's difficult to motivate traders once they have earned their first few million. 
A) The proprietary trading system is likely to generate better returns since star traders are in a powerful position to negotiate pay packages which appropriate the major part of the profit they create. 
B) Advanced software is better than human intuition at identifying mispricing in financial markets. 
C) Star traders are difficult to manage and can easily become "rogue traders". 
D) It's difficult to motivate traders once they have earned their first few million.

Question 18

Like Porter's "five forces of competition" model,the key value of resource and capability analysis lies less in providing answers and more in providing an overall framework to guide more detailed analysis.

Accepted Answer

A) True 
 B)False

Question 19

The more stable is a firm's external environment,the more likely it is that the firm's resources and capabilities will offer a more stable foundation for strategy than focusing upon its product market,or the needs of its customers.

Accepted Answer

A) True 
 B)False

Question 20

A well-established brand can be a source of sustainable competitive advantage because:

Accepted Answer

A) Consumers will always pay a premium for a recognized brand. 
B) Brands can be protected by the law relating to trademarks. 
C) A brand protects a firm form competition from low-cost new entrants. 
D) It tends to be durable,loses value when transferred between firms,and is costly to replicate. 
A) Consumers will always pay a premium for a recognized brand. 
B) Brands can be protected by the law relating to trademarks. 
C) A brand protects a firm form competition from low-cost new entrants. 
D) It tends to be durable,loses value when transferred between firms,and is costly to replicate.

One indicator of the value of a firm's intangible resources is the difference between its market capitalization and the fair value of its tangible assets.

Companies with the highest ratios of market value to book value tend to be those,either with valuable brands or valuable proprietary technologies.

If an organization possesses strengths in a resource or capability that bears little relationship to the industry's key success factors it should:

"Organizational capability" and "organizational competence" refer to two concepts which,although related,are different.

A major reason why many companies have the high valuation ratios (ratio of stock market value to balance sheet net asset value)is:

To exploit its tangible assets more effectively requires that a firm:

The "resource-based view" emphasized that a firm's strategy needs to be environmental sustainable.

Porter's value chain is useful tool for understanding the sequence of activities that a firm performs but is of limited value in mapping a firm's resources and capabilities.

Corporate balance sheets do not include human resources (since these are not owned by the firm),apart from this major exception,balance sheets offer a comprehensive picture of a firm's resources.

The firm's ability to appropriate the rents generated by its organizational capabilities:

The difficulties faced by Eastman Kodak,Smith Corona.and Olivetti in adapting to radical technological change within their markets point to:

The main strategic lesson to be drawn from the Biblical story of David and Goliath is:

The profits arising from market power are called monopoly rents,whereas those arising from superior resources are Ricardian rents

A key feature of efficient and reliable processes is that a firm has been able to perform them routinely.However,routinizing a process does not necessarily make it a distinctive capability.

For a resource or capability to be a source of competitive advantage,two conditions must be present: scarcity and relevance

One implication of the resource-based perspective is that:

Like Porter's "five forces of competition" model,the key value of resource and capability analysis lies less in providing answers and more in providing an overall framework to guide more detailed analysis.

The more stable is a firm's external environment,the more likely it is that the firm's resources and capabilities will offer a more stable foundation for strategy than focusing upon its product market,or the needs of its customers.

A well-established brand can be a source of sustainable competitive advantage because:

The Concept of Strategy

Goals,values and Performance

Industry Analysis: the Fundamentals

Further Topics in Industry and Competitive Analysis

Organization Structure and Management Systems: the Fundamentals of Strategy Implementation

The Sources and Dimensions of Competitive Advantage

Industry Evolution and Strategic Change

Technology-Based Industries and the Management of Innovation

Competitive Advantage in Mature Industries

Vertical Integration and the Scope of the Firm

Global Strategy and the Multinational Corporation

Diversification Strategy

Implementing Corporate Strategy: Managing the Multibusiness Firm

External Growth Strategies: Mergers,acquisitions,and Alliances

Current Trends in Strategic Management

Filters

Exam 5: Analyzing Resources and Capabilities

One indicator of the value of a firm's intangible resources is the difference between its market capitalization and the fair value of its tangible assets.

Companies with the highest ratios of market value to book value tend to be those,either with valuable brands or valuable proprietary technologies.

If an organization possesses strengths in a resource or capability that bears little relationship to the industry's key success factors it should:

"Organizational capability" and "organizational competence" refer to two concepts which,although related,are different.

A major reason why many companies have the high valuation ratios (ratio of stock market value to balance sheet net asset value)is:

To exploit its tangible assets more effectively requires that a firm:

The "resource-based view" emphasized that a firm's strategy needs to be environmental sustainable.

Porter's value chain is useful tool for understanding the sequence of activities that a firm performs but is of limited value in mapping a firm's resources and capabilities.

Corporate balance sheets do not include human resources (since these are not owned by the firm),apart from this major exception,balance sheets offer a comprehensive picture of a firm's resources.

The firm's ability to appropriate the rents generated by its organizational capabilities:

The difficulties faced by Eastman Kodak,Smith Corona.and Olivetti in adapting to radical technological change within their markets point to:

The main strategic lesson to be drawn from the Biblical story of David and Goliath is:

The profits arising from market power are called monopoly rents,whereas those arising from superior resources are Ricardian rents

A key feature of efficient and reliable processes is that a firm has been able to perform them routinely.However,routinizing a process does not necessarily make it a distinctive capability.

For a resource or capability to be a source of competitive advantage,two conditions must be present: scarcity and relevance

One implication of the resource-based perspective is that:

Like Porter's "five forces of competition" model,the key value of resource and capability analysis lies less in providing answers and more in providing an overall framework to guide more detailed analysis.

The more stable is a firm's external environment,the more likely it is that the firm's resources and capabilities will offer a more stable foundation for strategy than focusing upon its product market,or the needs of its customers.

A well-established brand can be a source of sustainable competitive advantage because:

The Concept of Strategy

Goals,values and Performance

Industry Analysis: the Fundamentals

Further Topics in Industry and Competitive Analysis

Organization Structure and Management Systems: the Fundamentals of Strategy Implementation

The Sources and Dimensions of Competitive Advantage

Industry Evolution and Strategic Change

Technology-Based Industries and the Management of Innovation

Competitive Advantage in Mature Industries

Vertical Integration and the Scope of the Firm

Global Strategy and the Multinational Corporation

Diversification Strategy

Implementing Corporate Strategy: Managing the Multibusiness Firm

External Growth Strategies: Mergers,acquisitions,and Alliances

Current Trends in Strategic Management

Filters