Question 1

Although McDonald's is competing in an unattractive industry, it has improved its performance by focusing on product innovations and by enhancing existing facilities. This improved performance is best explained by

Accepted Answer

A)   globalization.
B)   the resource-based model.
C)   the I/O model.
D)   hypercompetition. B

Question 2

Organizational stakeholders are usually satisfied when

Accepted Answer

A)   their return on investment has been maximized.
B)   customers pay the highest sustainable price for the goods and services they receive.
C)   companies provide a dynamic, stimulating, and rewarding work environment.
D)   companies are paying the highest prices to suppliers. C

Question 3

Returns can only be measured in accounting terms such as return on assets, return on equity, or return on sales.

Accepted Answer

A) True 
 B)False  False

Question 4

The interests of an organization's stakeholders often conflict, and the organization must prioritize its stakeholders if it cannot satisfy them all. The ____ is the most critical criterion in prioritizing stakeholders.

Accepted Answer

A)   power of each stakeholder
B)   urgency of satisfying each stakeholder
C)   vulnerability of organizational stakeholders
D)   social value of each stakeholder

Question 5

The uniqueness of a firm's resources and capabilities is the basis for a firm's strategy and determines its ability to earn above-average returns under the I/O view.

Accepted Answer

A) True 
 B)False

Question 6

Although the fast food (or quick-service) industry is unattractive, McDonald's has earned above-average returns through product innovations, enhancing existing facilities, and buying properties outside the United States.

Accepted Answer

A) True 
 B)False

Question 7

Before liquidating, Circuit City took several actions to try to satisfy its __________ stakeholders.

Accepted Answer

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

Question 8

The rate of technological diffusion is increasing. Which of the following was fastest in penetrating 25 percent of homes in the United States market?

Accepted Answer

A)   Telephone
B)   Television
C)   Personal computer
D)   Internet

Question 9

The resource-based model assumes that if firms have resources that are rare or costly to imitate, this is sufficient to form a basis for competitive advantage.

Accepted Answer

A) True 
 B)False

Question 10

Hourly workers on the production line of a chicken-processing plant are considered organizational stakeholders.

Accepted Answer

A) True 
 B)False

Question 11

Although organizational cultures vary considerably, one cannot make an objective judgment that some organizational cultures are more or less functional than others.

Accepted Answer

A) True 
 B)False

Question 12

An effective vision stretches and challenges people and can result in increased innovation as illustrated by Apple's CEO Steve Jobs who is known to think bigger and differently than most people ("putting a dent in the universe").

Accepted Answer

A) True 
 B)False

Question 13

The Chapter 1 Strategic Focus about Huawei illustrates

Accepted Answer

A)   the challenge of the global economy where emerging market companies are moving aggressively into international markets.
B)   Huawei's ease of entry into the US market.
C)   Huawei's success at building good relations with the US government.
D)   Huawei's successful acquisition of several US companies.

Question 14

A firm's mission

Accepted Answer

A)   is a statement of a firm's business in which it intends to compete and the customers it intends to serve.
B)   is an internally-focused affirmation of the organization's financial, social, and ethical goals.
C)   is mainly intended to emotionally inspire employees and other stakeholders.
D)   is developed by a firm before the firm develops its vision.

Question 15

According to the Chapter 1 Opening Case, Barnes & Noble and Amazon were more effective than Borders in using the strategic management process as the foundation for the commitments, decisions, and actions they took to pursue strategic competitiveness and above-average returns.

Accepted Answer

A) True 
 B)False

Question 16

The Chapter 1 Opening Case shows that Borders was unsuccessful in competing in Internet book sales, but not against brick-and-mortar stores.

Accepted Answer

A) True 
 B)False

Question 17

The resource-based model of the firm argues that

Accepted Answer

A)   all resources have the potential to be the basis of sustainable competitive advantage.
B)   resources alone can be a source of sustainable competitive advantage.
C)   the key to competitive success is the structure of the industry in which the firm competes.
D)   resources that are valuable, rare, costly to imitate, and non-substitutable form the basis of a firm's core competencies.

Question 18

Case Scenario 2: Jewell Company.
Jewell Company is a diversified manufacturer and marketer of simple household items, cookware, and hardware. In its annual report, it expresses its strategy as follows: "Jewell manufactures and markets staple volume lines to the volume purchaser. We aim to increase shareholder value by continuing to build a company with superior earnings per share growth and return on investment (ROI), and to earn a reputation for excellence in performance and management. We plan to do this by merchandising to the customer goods market a multi-product offering with superior customer service performance for maximum market leverage. Through this we will achieve an ROI of 20% plus EPS growth of 15%, with the constraint that debt not exceed half of our equity."
-(Refer to Case Scenario 2) Does Jewell Company's statement of strategy include a vision statement or a mission statement? Why or why not?

Accepted Answer

The answer of Case Scenario 2: Jewell Company.
Jewell Company is...

Question 19

What are a firm's vision and mission? What is the value to the firm of having a specified vision and mission?

Accepted Answer

The answer of What are a firm's vision and mission?...

Question 20

The strategic leader's work is characterized by

Accepted Answer

A)   ambiguous decision situations which make effective decisions difficult to determine.
B)   a willingness to unify stakeholders through skillful manipulation.
C)   an ability to identify the correct solutions to long-range problems.
D)   concentration on the practical day-to-day aspects of the organization's operations.

Exam 1: Strategic Management and Strategic Competitiveness

Although McDonald's is competing in an unattractive industry, it has improved its performance by focusing on product innovations and by enhancing existing facilities. This improved performance is best explained by

Organizational stakeholders are usually satisfied when

Returns can only be measured in accounting terms such as return on assets, return on equity, or return on sales.

The interests of an organization's stakeholders often conflict, and the organization must prioritize its stakeholders if it cannot satisfy them all. The ____ is the most critical criterion in prioritizing stakeholders.

The uniqueness of a firm's resources and capabilities is the basis for a firm's strategy and determines its ability to earn above-average returns under the I/O view.

Although the fast food (or quick-service) industry is unattractive, McDonald's has earned above-average returns through product innovations, enhancing existing facilities, and buying properties outside the United States.

Before liquidating, Circuit City took several actions to try to satisfy its __________ stakeholders.

The rate of technological diffusion is increasing. Which of the following was fastest in penetrating 25 percent of homes in the United States market?

The resource-based model assumes that if firms have resources that are rare or costly to imitate, this is sufficient to form a basis for competitive advantage.

Hourly workers on the production line of a chicken-processing plant are considered organizational stakeholders.

Although organizational cultures vary considerably, one cannot make an objective judgment that some organizational cultures are more or less functional than others.

An effective vision stretches and challenges people and can result in increased innovation as illustrated by Apple's CEO Steve Jobs who is known to think bigger and differently than most people ("putting a dent in the universe").

The Chapter 1 Strategic Focus about Huawei illustrates

A firm's mission

According to the Chapter 1 Opening Case, Barnes & Noble and Amazon were more effective than Borders in using the strategic management process as the foundation for the commitments, decisions, and actions they took to pursue strategic competitiveness and above-average returns.

The Chapter 1 Opening Case shows that Borders was unsuccessful in competing in Internet book sales, but not against brick-and-mortar stores.

The resource-based model of the firm argues that

What are a firm's vision and mission? What is the value to the firm of having a specified vision and mission?

The strategic leader's work is characterized by