Question 1

What is a risk indice and why should it be used with caution?

Accepted Answer

A risk indice is a published list of risk data. For example, the Business Environment Risk Index. The data is based on expert opinion. The problems are that the data is at macro level and can be too broad for some decisions. Low risk countries may actually be worse prospects for investment than high risk countries because high risk countries are likely to attract a lot of other investors. The data is based on the past and it may not be accurate for the future.

Question 2

Which of the following events can be defined as an 'exogenous' risk?

Accepted Answer

A)  The Icelandic volcanic erruption that occured in 2010 
B)  Fraudulent banking activity 
C)  The Challenger Space Shuttle disaster 
D)  The BP oil leak that occured in 2010 
A)  The Icelandic volcanic erruption that occured in 2010 
B)  Fraudulent banking activity 
C)  The Challenger Space Shuttle disaster 
D)  The BP oil leak that occured in 2010 A

Question 3

Knight (1921) states that we '[do not] infer the future from the present with any high degree of dependability...'. What is Knight referring to in this statement?

Accepted Answer

A)  Satisficing behaviour 
B)  Bounded rationality 
C)  Risk 
D)  Uncertainty 
A)  Satisficing behaviour 
B)  Bounded rationality 
C)  Risk 
D)  Uncertainty D

Question 4

In scenario development exercises, what is considered to be an ideal number of future scenarios to arrive at?

Accepted Answer

A)  2 
B)  3 
C)  5 
D)  7 
A)  2 
B)  3 
C)  5 
D)  7

Question 5

For the automobile industry, how far into the future should scenarios project?

Accepted Answer

A)  5-10 years 
B)  10 -15 years 
C)  20-30years 
D)  40-50 years 
A)  5-10 years 
B)  10 -15 years 
C)  20-30years 
D)  40-50 years

Question 6

Prospect theory can be used to

Accepted Answer

A)  Assess the probability of an outcome 
B)  Extrapolate long term trends 
C)  Understand risk assessment behaviour 
D)  Categorize uncertainties 
A)  Assess the probability of an outcome 
B)  Extrapolate long term trends 
C)  Understand risk assessment behaviour 
D)  Categorize uncertainties

Question 7

A tool to assess risk is NPV. What does NPV stand for?

Accepted Answer

A)  Net present value 
B)  Net present variable 
C)  Net potential value 
D)  Null point variable 
A)  Net present value 
B)  Net present variable 
C)  Net potential value 
D)  Null point variable

Question 8

A good scenario building exercise creates alternative visions of the future that are completely divorced from what is happening today.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is an example of 'pure risk'?

Accepted Answer

A)  The risk of sensitive data being stolen 
B)  The risk of an investment not producing a return 
C)  The risk of a new product being unpopular with customers 
D)  The risk of integrating two firms in a merger 
A)  The risk of sensitive data being stolen 
B)  The risk of an investment not producing a return 
C)  The risk of a new product being unpopular with customers 
D)  The risk of integrating two firms in a merger

Question 10

All risk is essentially man made.

Accepted Answer

A) True 
 B)False

Question 11

For strategists, the concepts of risk and uncertainty are interchangeable

Accepted Answer

A) True 
 B)False

Question 12

Which of the following types of risk can be described as organizational risk according to Palmer and Wiseman (1999)?

Accepted Answer

A)  Slack 
B)  Scarcity-Munificence 
C)  Dynanism 
D)  Simple-complex environments 
A)  Slack 
B)  Scarcity-Munificence 
C)  Dynanism 
D)  Simple-complex environments

Question 13

Baird and Thomas (1990) argue that organizational risk needs to be distinguished from which type of risk?

Accepted Answer

A)  exogenous 
B)  managerial 
C)  endogenous 
D)  industry 
A)  exogenous 
B)  managerial 
C)  endogenous 
D)  industry

Question 14

In what type of industries would scenario building be an appropriate tool for dealing with the future?

Accepted Answer

Hypercompetitive industries La

Question 15

The 'risky shift' syndrome (Stoner, 1968) describes a situation where

Accepted Answer

A)  Individuals take greater risks than groups 
B)  Individuals take greater risks where the potential rewards are greater 
C)  Groups take greater risks than individuals 
D)  Groups take greater risks where the potential rewards are greater 
A)  Individuals take greater risks than groups 
B)  Individuals take greater risks where the potential rewards are greater 
C)  Groups take greater risks than individuals 
D)  Groups take greater risks where the potential rewards are greater

Question 16

The __________________ technique involves asking a number of experts for their opinions about the future.

Accepted Answer

The answer of The __________________ technique involves asking a number...

Question 17

According to McGee (2010) risk can be defined as '.....the measurable consequence of ______________for an organization'

Accepted Answer

The answer of According to McGee (2010) risk can be...

Question 18

What is 'gap analysis'?

Accepted Answer

A)  The identification of industry spaces that have no competition present 
B)  The identification of 'blue oceans' 
C)  The identification of appropriate resources and competences to deal with the future 
D)  The identification of new market segments 
A)  The identification of industry spaces that have no competition present 
B)  The identification of 'blue oceans' 
C)  The identification of appropriate resources and competences to deal with the future 
D)  The identification of new market segments

Question 19

Decision tree analysis can be used to

Accepted Answer

A)  make choices between alternative courses of action 
B)  anticipate how competitors are likely to respond to a strategic move 
C)  combine PESTEL variables to create alternative visions of the future 
D)  assess the risk of a particular course of action 
A)  make choices between alternative courses of action 
B)  anticipate how competitors are likely to respond to a strategic move 
C)  combine PESTEL variables to create alternative visions of the future 
D)  assess the risk of a particular course of action

Question 20

Scenario building can be used to help reduce risk and uncertainty. What type of technique is it?

Accepted Answer

A)  A forecasting technique 
B)  A trend extrapolation technique 
C)  A decision tree technique 
D)  A 'what if?' technique 
A)  A forecasting technique 
B)  A trend extrapolation technique 
C)  A decision tree technique 
D)  A 'what if?' technique

What is a risk indice and why should it be used with caution?

Which of the following events can be defined as an 'exogenous' risk?

Knight (1921) states that we '[do not] infer the future from the present with any high degree of dependability...'. What is Knight referring to in this statement?

In scenario development exercises, what is considered to be an ideal number of future scenarios to arrive at?

For the automobile industry, how far into the future should scenarios project?

Prospect theory can be used to

A tool to assess risk is NPV. What does NPV stand for?

A good scenario building exercise creates alternative visions of the future that are completely divorced from what is happening today.

Which of the following is an example of 'pure risk'?

All risk is essentially man made.

For strategists, the concepts of risk and uncertainty are interchangeable

Which of the following types of risk can be described as organizational risk according to Palmer and Wiseman (1999)?

Baird and Thomas (1990) argue that organizational risk needs to be distinguished from which type of risk?

In what type of industries would scenario building be an appropriate tool for dealing with the future?

The 'risky shift' syndrome (Stoner, 1968) describes a situation where

The __________________ technique involves asking a number of experts for their opinions about the future.

According to McGee (2010) risk can be defined as '.....the measurable consequence of ______________for an organization'

What is 'gap analysis'?

Decision tree analysis can be used to

Scenario building can be used to help reduce risk and uncertainty. What type of technique is it?

Introduction to Strategy

Systems Model and Strategy Map

The Microeconomics of Strategy

The Macroeconomics of Strategy

Competitive Strategy: The Analysis of Strategic Position

Competitive Strategy: The Analysis of Strategic Capability

The Competitive Environment

Corporate Strategy: Adding Value in Multi-Business Firms

Global Strategies and International Advantage

Organisational Models and Approaches to Strategy

Strategic Decision Making: Process Analysis

Strategic Decision Making: Managing Strategic Change

Strategy As Knowledge: Innovation and Learning

Strategy and Corporate Governance

Analyzing and Measuring Strategic Performance

Filters

Exam 11: Risk, Uncertainty and Strategy

What is a risk indice and why should it be used with caution?

Which of the following events can be defined as an 'exogenous' risk?

Knight (1921) states that we '[do not] infer the future from the present with any high degree of dependability...'. What is Knight referring to in this statement?

In scenario development exercises, what is considered to be an ideal number of future scenarios to arrive at?

For the automobile industry, how far into the future should scenarios project?

Prospect theory can be used to

A tool to assess risk is NPV. What does NPV stand for?

A good scenario building exercise creates alternative visions of the future that are completely divorced from what is happening today.

Which of the following is an example of 'pure risk'?

All risk is essentially man made.

For strategists, the concepts of risk and uncertainty are interchangeable

Which of the following types of risk can be described as organizational risk according to Palmer and Wiseman (1999)?

Baird and Thomas (1990) argue that organizational risk needs to be distinguished from which type of risk?

In what type of industries would scenario building be an appropriate tool for dealing with the future?

The 'risky shift' syndrome (Stoner, 1968) describes a situation where

The __________________ technique involves asking a number of experts for their opinions about the future.

According to McGee (2010) risk can be defined as '.....the measurable consequence of ______________for an organization'

What is 'gap analysis'?

Decision tree analysis can be used to

Scenario building can be used to help reduce risk and uncertainty. What type of technique is it?

Introduction to Strategy

Systems Model and Strategy Map

The Microeconomics of Strategy

The Macroeconomics of Strategy

Competitive Strategy: The Analysis of Strategic Position

Competitive Strategy: The Analysis of Strategic Capability

The Competitive Environment

Corporate Strategy: Adding Value in Multi-Business Firms

Global Strategies and International Advantage

Organisational Models and Approaches to Strategy

Strategic Decision Making: Process Analysis

Strategic Decision Making: Managing Strategic Change

Strategy As Knowledge: Innovation and Learning

Strategy and Corporate Governance

Analyzing and Measuring Strategic Performance

Filters