Question 1

Capital market stakeholders include

Accepted Answer

A)  industry competitors. 
B)  shareholders. 
C)  employees. 
D)  government regulators.

Question 2

The Annandale Academy of Fine Arts states in its brochure that "The Academy intends to become the dominant institution in the nation teaching traditional aesthetic values in traditional artistic media targeting both traditional and non-traditional students." This pronouncement is most precisely a statement of organizational

Accepted Answer

A)  values. 
B)  mission. 
C)  vision. 
D)  culture.

Question 3

Which of the following statements is most consistent under the I/O view? Performance of the firm is most directly attributable to

Accepted Answer

A)  the power of the financial market stakeholders. 
B)  the resources the firm possesses. 
C)  the profitability of the industry the firm competes in. 
D)  hypercompetition within the industry.

Question 4

In order to cope with hypercompetition, firms need to develop ____ through continuous learning.

Accepted Answer

A)  competitive resilience 
B)  strategic flexibility 
C)  strategic power 
D)  competitive dominance

Question 5

____ is a capacity for a set of resources to perform a task or an activity in an integrative manner.

Accepted Answer

A)  A capability 
B)  A core competence 
C)  Sustainable competitive advantage 
D)  Organizational intelligence

Question 6

Although it closed stores, changed the top management team, and sought potential buyers, none of these actions resulted in outcomes that allowed Circuit City to meet the expectations of its ____________ stakeholders.

Accepted Answer

A)  product market 
B)  capital market 
C)  organizational 
D)  governmental

Question 7

The rate of technology diffusion has been steadily increasing over the last two decades.

Accepted Answer

A) True 
 B)False

Question 8

Organizational culture refers to the core values shared by the firm's top-level managers but not necessarily accepted by lower-level employees who are often transitory and not committed to the organization.

Accepted Answer

A) True 
 B)False

Question 9

What are the primary aspects of the strategic management process? You may reference specific chapters from the text in formulating your response.

Accepted Answer

The answer of What are the primary aspects of the...

Question 10

When resources and capabilities serve as a source of competitive advantage for a firm, the firm has created a(n)

Accepted Answer

A)  strategic mission. 
B)  inspiring vision. 
C)  core competence. 
D)  sustainable market niche.

Question 11

Examples of incremental innovations include iPods, PDAs, WiFi, and web browser software.

Accepted Answer

A) True 
 B)False

Question 12

Case Scenario 3: Vivendi
Vivendi Universal is a French firm that started in 1853 as Companie General des Eaux. It grew from a French water utility company into one of the world's largest conglomerates. Under the corporate leadership of then CEO Jean-Marie Messier, Vivendi Universal became a highly diversified company involved in music, publishing, film, pay TV, telecoms, Internet, water distribution, thermal energy supply, building and heavy public construction projects, waste management, electrical energy services, real estate and other activities. The company's rapid expansion in the late 1990s and early 2000 brought about financial and legal trouble resulting in the replacement of chairman and CEO Jean-Marie Messier who had been responsible for much of the expansion. Mr. Messier was forced out of the company in July, 2002, in a liquidity crisis and mounting shareholder anger. The acquisitions made by Mr. Messier saddled the company with billions of dollars of debts. Vivendi shares plummeted 80 percent during the last six months Mr. Messier was CEO, according to the Wall Street Journal. Meanwhile, the SEC indicated that a disputed severance payment of $23 million to Mr. Messier may actually constitute "ill gotten gains," reported the Wall Street Journal. In 2003, Vivendi had a corporate loss of €23.3 billion. On the brink of bankruptcy, Vivendi Universal brought in Jean-Rene Fourtou to replace Mr. Messier as CEO. According to the business media, Mr. Fourtou has taken a dying enterprise and given it a survival plan. He sold numerous Vivendi Universal businesses, bringing the company to focus on Cegetel, a phone company; SFR, a cell phone company; Canal Plus, a television company; and Universal Music. Mr. Fourtou was able to reduce Vivendi's debt from 37 billion euros in 2002 to a projected 5 billion euros by the end of 2005. The company showed its first quarterly profit at the end of 2003, allowing Mr. Fourtou to arrange a loan from a banking consortium and give the company hopes that credit-rating agencies would raise its debt from junk-bond status, according to The New York Times. Today (2011), Vivendi is a world leader in video games (Activision Blizzard), music (Universal Music Group), the French leader in alternative telecoms (SFR), the Moroccan leader in telecoms (Maroc Telecom Group), the leading alternative telecoms provider in Brazil (GVT) and the French leader in pay TY (Canal+ Group). Vivendi also owns 100% of zaOza (a subscription-based community legal sharing site), 93% of Digitick (the French leader in e-tickets), and 99.5% of Wengo (the French leader in telephone-based expert assistance). According to Vivendi's web site, the company puts innovation at the core of its strategy. It seeks to continuously launch innovative products and services combined with its diversification strategy. To enhance its innovation focus, in October 2010 Vivendi formed an Innovation Division with the purpose of increasing internal innovations and identifying new growth sectors. The company's annual report (December 31, 2010) shows an adjusted net income of €2,698 million. The current CEO is Jean-Bernard Levy and the Chairman is Jean-Rene Fourtou.Case Scenario 3: Vivendi
Vivendi Universal is a French firm that started in 1853 as Companie General des Eaux. It grew from a French water utility company into one of the world's largest conglomerates. Under the corporate leadership of then CEO Jean-Marie Messier, Vivendi Universal became a highly diversified company involved in music, publishing, film, pay TV, telecoms, Internet, water distribution, thermal energy supply, building and heavy public construction projects, waste management, electrical energy services, real estate and other activities. The company's rapid expansion in the late 1990s and early 2000 brought about financial and legal trouble resulting in the replacement of chairman and CEO Jean-Marie Messier who had been responsible for much of the expansion. Mr. Messier was forced out of the company in July, 2002, in a liquidity crisis and mounting shareholder anger. The acquisitions made by Mr. Messier saddled the company with billions of dollars of debts. Vivendi shares plummeted 80 percent during the last six months Mr. Messier was CEO, according to the Wall Street Journal. Meanwhile, the SEC indicated that a disputed severance payment of $23 million to Mr. Messier may actually constitute "ill gotten gains," reported the Wall Street Journal. In 2003, Vivendi had a corporate loss of €23.3 billion. On the brink of bankruptcy, Vivendi Universal brought in Jean-Rene Fourtou to replace Mr. Messier as CEO. According to the business media, Mr. Fourtou has taken a dying enterprise and given it a survival plan. He sold numerous Vivendi Universal businesses, bringing the company to focus on Cegetel, a phone company; SFR, a cell phone company; Canal Plus, a television company; and Universal Music. Mr. Fourtou was able to reduce Vivendi's debt from 37 billion euros in 2002 to a projected 5 billion euros by the end of 2005. The company showed its first quarterly profit at the end of 2003, allowing Mr. Fourtou to arrange a loan from a banking consortium and give the company hopes that credit-rating agencies would raise its debt from junk-bond status, according to The New York Times. Today (2011), Vivendi is a world leader in video games (Activision Blizzard), music (Universal Music Group), the French leader in alternative telecoms (SFR), the Moroccan leader in telecoms (Maroc Telecom Group), the leading alternative telecoms provider in Brazil (GVT) and the French leader in pay TY (Canal+ Group). Vivendi also owns 100% of zaOza (a subscription-based community legal sharing site), 93% of Digitick (the French leader in e-tickets), and 99.5% of Wengo (the French leader in telephone-based expert assistance). According to Vivendi's web site, the company puts innovation at the core of its strategy. It seeks to continuously launch innovative products and services combined with its diversification strategy. To enhance its innovation focus, in October 2010 Vivendi formed an Innovation Division with the purpose of increasing internal innovations and identifying new growth sectors. The company's annual report (December 31, 2010) shows an adjusted net income of €2,698 million. The current CEO is Jean-Bernard Levy and the Chairman is Jean-Rene Fourtou.
-(Refer to Chapter Case Scenario 3) Vivendi's rapid expansion in the late 1990s and early 2000 under CEO Messier was the main contributor to the firm's above-average returns.

Accepted Answer

A) True 
 B)False

Question 13

The ability to effectively and efficiently access and use information is

Accepted Answer

A)  vitally important at the point where a domestic firm enters the global market. 
B)  an important source of competitive advantage in virtually all industries. 
C)  the minimum required for survival in virtually any industry. 
D)  critically important mainly in high technology industries.

Question 14

Above-average returns are

Accepted Answer

A)  higher profits than the firm earned last year. 
B)  higher profits than the industry averaged over the last 10 years. 
C)  profits in excess of what an investor expects to earn from a historical pattern of performance of the firm. 
D)  returns in excess of what an investor expects to earn from other investments with a similar level of risk.

Question 15

The I/O (industrial organization) model assumes that the uniqueness of a firm's resources and capabilities are its main source of above-average returns.

Accepted Answer

A) True 
 B)False

Question 16

Globalization has led to

Accepted Answer

A)  lower operational efficiency as firms must transport raw materials and finished goods farther. 
B)  increasing loyalty of customers for products made domestically. 
C)  declining returns from investment in research and development. 
D)  higher product quality.

Question 17

Case Scenario 3: Vivendi
Vivendi Universal is a French firm that started in 1853 as Companie General des Eaux. It grew from a French water utility company into one of the world's largest conglomerates. Under the corporate leadership of then CEO Jean-Marie Messier, Vivendi Universal became a highly diversified company involved in music, publishing, film, pay TV, telecoms, Internet, water distribution, thermal energy supply, building and heavy public construction projects, waste management, electrical energy services, real estate and other activities. The company's rapid expansion in the late 1990s and early 2000 brought about financial and legal trouble resulting in the replacement of chairman and CEO Jean-Marie Messier who had been responsible for much of the expansion. Mr. Messier was forced out of the company in July, 2002, in a liquidity crisis and mounting shareholder anger. The acquisitions made by Mr. Messier saddled the company with billions of dollars of debts. Vivendi shares plummeted 80 percent during the last six months Mr. Messier was CEO, according to the Wall Street Journal. Meanwhile, the SEC indicated that a disputed severance payment of $23 million to Mr. Messier may actually constitute "ill gotten gains," reported the Wall Street Journal. In 2003, Vivendi had a corporate loss of €23.3 billion. On the brink of bankruptcy, Vivendi Universal brought in Jean-Rene Fourtou to replace Mr. Messier as CEO. According to the business media, Mr. Fourtou has taken a dying enterprise and given it a survival plan. He sold numerous Vivendi Universal businesses, bringing the company to focus on Cegetel, a phone company; SFR, a cell phone company; Canal Plus, a television company; and Universal Music. Mr. Fourtou was able to reduce Vivendi's debt from 37 billion euros in 2002 to a projected 5 billion euros by the end of 2005. The company showed its first quarterly profit at the end of 2003, allowing Mr. Fourtou to arrange a loan from a banking consortium and give the company hopes that credit-rating agencies would raise its debt from junk-bond status, according to The New York Times. Today (2011), Vivendi is a world leader in video games (Activision Blizzard), music (Universal Music Group), the French leader in alternative telecoms (SFR), the Moroccan leader in telecoms (Maroc Telecom Group), the leading alternative telecoms provider in Brazil (GVT) and the French leader in pay TY (Canal+ Group). Vivendi also owns 100% of zaOza (a subscription-based community legal sharing site), 93% of Digitick (the French leader in e-tickets), and 99.5% of Wengo (the French leader in telephone-based expert assistance). According to Vivendi's web site, the company puts innovation at the core of its strategy. It seeks to continuously launch innovative products and services combined with its diversification strategy. To enhance its innovation focus, in October 2010 Vivendi formed an Innovation Division with the purpose of increasing internal innovations and identifying new growth sectors. The company's annual report (December 31, 2010) shows an adjusted net income of €2,698 million. The current CEO is Jean-Bernard Levy and the Chairman is Jean-Rene Fourtou.Case Scenario 3: Vivendi
Vivendi Universal is a French firm that started in 1853 as Companie General des Eaux. It grew from a French water utility company into one of the world's largest conglomerates. Under the corporate leadership of then CEO Jean-Marie Messier, Vivendi Universal became a highly diversified company involved in music, publishing, film, pay TV, telecoms, Internet, water distribution, thermal energy supply, building and heavy public construction projects, waste management, electrical energy services, real estate and other activities. The company's rapid expansion in the late 1990s and early 2000 brought about financial and legal trouble resulting in the replacement of chairman and CEO Jean-Marie Messier who had been responsible for much of the expansion. Mr. Messier was forced out of the company in July, 2002, in a liquidity crisis and mounting shareholder anger. The acquisitions made by Mr. Messier saddled the company with billions of dollars of debts. Vivendi shares plummeted 80 percent during the last six months Mr. Messier was CEO, according to the Wall Street Journal. Meanwhile, the SEC indicated that a disputed severance payment of $23 million to Mr. Messier may actually constitute "ill gotten gains," reported the Wall Street Journal. In 2003, Vivendi had a corporate loss of €23.3 billion. On the brink of bankruptcy, Vivendi Universal brought in Jean-Rene Fourtou to replace Mr. Messier as CEO. According to the business media, Mr. Fourtou has taken a dying enterprise and given it a survival plan. He sold numerous Vivendi Universal businesses, bringing the company to focus on Cegetel, a phone company; SFR, a cell phone company; Canal Plus, a television company; and Universal Music. Mr. Fourtou was able to reduce Vivendi's debt from 37 billion euros in 2002 to a projected 5 billion euros by the end of 2005. The company showed its first quarterly profit at the end of 2003, allowing Mr. Fourtou to arrange a loan from a banking consortium and give the company hopes that credit-rating agencies would raise its debt from junk-bond status, according to The New York Times. Today (2011), Vivendi is a world leader in video games (Activision Blizzard), music (Universal Music Group), the French leader in alternative telecoms (SFR), the Moroccan leader in telecoms (Maroc Telecom Group), the leading alternative telecoms provider in Brazil (GVT) and the French leader in pay TY (Canal+ Group). Vivendi also owns 100% of zaOza (a subscription-based community legal sharing site), 93% of Digitick (the French leader in e-tickets), and 99.5% of Wengo (the French leader in telephone-based expert assistance). According to Vivendi's web site, the company puts innovation at the core of its strategy. It seeks to continuously launch innovative products and services combined with its diversification strategy. To enhance its innovation focus, in October 2010 Vivendi formed an Innovation Division with the purpose of increasing internal innovations and identifying new growth sectors. The company's annual report (December 31, 2010) shows an adjusted net income of €2,698 million. The current CEO is Jean-Bernard Levy and the Chairman is Jean-Rene Fourtou.
-(Refer to Case Scenario 3) Who are the stakeholders of Vivendi and how well did Vivendi perform in the eyes of its stakeholders under the leadership of Mr. Messier and then Mr. Fourtou?

Accepted Answer

The answer of Case Scenario 3: Vivendi
Vivendi Universal is a...

Question 18

Strategic competitiveness is achieved when a firm successfully formulates and implements a value-creating strategy.

Accepted Answer

A) True 
 B)False

Question 19

Describe the industrial organization (I/O) model of above-average returns. What are its main assumptions? What is the key to success according to the I/O model?

Accepted Answer

The answer of Describe the industrial organization (I/O) model of...

Question 20

Explain the relationship of the strategic management process to organizational ethics.

Accepted Answer

The answer of Explain the relationship of the strategic management...

Exam 1: Strategic Management and Strategic Competitiveness

Capital market stakeholders include

Which of the following statements is most consistent under the I/O view? Performance of the firm is most directly attributable to

In order to cope with hypercompetition, firms need to develop ____ through continuous learning.

____ is a capacity for a set of resources to perform a task or an activity in an integrative manner.

Although it closed stores, changed the top management team, and sought potential buyers, none of these actions resulted in outcomes that allowed Circuit City to meet the expectations of its ____________ stakeholders.

The rate of technology diffusion has been steadily increasing over the last two decades.

Organizational culture refers to the core values shared by the firm's top-level managers but not necessarily accepted by lower-level employees who are often transitory and not committed to the organization.

What are the primary aspects of the strategic management process? You may reference specific chapters from the text in formulating your response.

When resources and capabilities serve as a source of competitive advantage for a firm, the firm has created a(n)

Examples of incremental innovations include iPods, PDAs, WiFi, and web browser software.

The ability to effectively and efficiently access and use information is

Above-average returns are

The I/O (industrial organization) model assumes that the uniqueness of a firm's resources and capabilities are its main source of above-average returns.

Globalization has led to

Strategic competitiveness is achieved when a firm successfully formulates and implements a value-creating strategy.

Describe the industrial organization (I/O) model of above-average returns. What are its main assumptions? What is the key to success according to the I/O model?

Explain the relationship of the strategic management process to organizational ethics.