Question 1

Costly-to-imitate capabilities can emerge for all of the following reasons EXCEPT

Accepted Answer

A)  lack of scientific transference. 
B)  social complexity. 
C)  unique historical conditions. 
D)  causal ambiguity.

Question 2

Older employees are less valuable resources to firms than younger employees, because the older employees have lower stocks of knowledge. Consequently, employee reductions should begin with early retirement inducements.

Accepted Answer

A) True 
 B)False

Question 3

Innovation, consumer understanding, brand-building, go-to-market, and scale are activities that P&G (Chapter 3 Strategic Focus) performs well and are examples of the company's __________ .

Accepted Answer

A)  tangible resources 
B)  intangible resources 
C)  core competencies 
D)  capabilities

Question 4

Which of the following is not a component of internal analysis leading to competitive advantage?

Accepted Answer

A)  Tangible and intangible resources. 
B)  Analysis of supplier power. 
C)  Capabilities. 
D)  Core competencies.

Question 5

Capabilities are usually developed separately from specific functional areas such as manufacturing, R&D, and marketing.

Accepted Answer

A) True 
 B)False

Question 6

The owner of a store retailing fine quality fabrics for home-sewers bewails the fact that few young women know how to do fine tailoring, much less simple dressmaking. Many potential customers are unable to appreciate the premium quality of the fabrics available and are deterred by the high prices, as well as the complexity of fine sewing. In the past, the store had a strong demand for fabrics, large classes for women learning the fine points of sewing, and a reputation for excellent service and technical advice. Now the store is earning lower-than-average returns. This case is an example of

Accepted Answer

A)  the hazard of competitors being able to imitate a firm's core competency. 
B)  the need for firms to stick to their core competencies through temporary downturns in market demand. 
C)  the lack of intangible resources undermining the core competencies of the firm. 
D)  core competencies that have become core rigidities.

Question 7

A local restaurant, Farm Fresh Ingredients, has become highly successful through its menu based solely on organically-raised chicken, beef, and organic seasonal produce. It has opened new locations in other cities, and these new locations are becoming highly profitable. Farm Fresh can expect that, at best, its competitive advantage will be

Accepted Answer

A)  permanent. 
B)  sustainable. 
C)  temporary. 
D)  defensible.

Question 8

Acme Auto Repair has a thriving business based on its reputation for high-quality work, honesty, and skilled employees. For continued long-term success, Acme's owner should

Accepted Answer

A)  concentrate on maintaining Acme's present core competencies. 
B)  focus on developing Acme's future competitive advantages. 
C)  place more emphasis on tangible resources which are less vulnerable to obsolescence than intangible resources. 
D)  recognize that core competencies derived from human resources are more subject to becoming core rigidities than are core competencies based on other types of resources.

Question 9

Judgment is the capability of making successful decisions when no obviously correct model or rule is available or when relevant data are unreliable or incomplete.

Accepted Answer

A) True 
 B)False

Question 10

ACME Corp. is a leading provider of radios to the commercial market. Its products all rely on printed circuit board technology. ACME has protected its market leadership with continued advancements in this technology which it patents. A competitor has developed a radio for this market with equal performance but uses a software-based solution instead of circuit boards. ACME's technology leadership fails which capability test?

Accepted Answer

A)  The value test 
B)  The rareness test 
C)  The substitutability test 
D)  It fails all three of these tests

Question 11

Given enough time, any firm's competitive advantage can be imitated by its competitors.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is TRUE about outsourcing?

Accepted Answer

A)  Outsourcing allows firms to be more flexible, and requires minimal coordination. 
B)  Outsourcing allows firms to concentrate on those areas in which they can create value. 
C)  Outsourcing strengthens the creative and innovative functions within the firm. 
D)  Outsourcing is only effective when it includes all support activities.

Question 13

The challenge and difficulty of making effective decisions are implied by preliminary evidence suggesting that one-half of organizational decisions fail.

Accepted Answer

A) True 
 B)False

Question 14

A major reason outsourcing is effective is that

Accepted Answer

A)  it increases the innovative potential of the firm. 
B)  few firms possess superior capability in all primary and support activities. 
C)  it permits unlimited access to capital resources. 
D)  competitors do not have access to the same external sources.

Question 15

As discussed in the Chapter 3 Strategic Focus, CEOs of companies such as Viacom, the Oprah Winfrey Network, the Gap, and Cisco frequently had to make decisions about __________________ and the success of those decisions affected the tenure of those CEOs.

Accepted Answer

A)  how to please customers 
B)  how to best rivals 
C)  use of the firm's resources 
D)  their method of compensation

Question 16

Organizational culture is

Accepted Answer

A)  amorphous and changeable. 
B)  not easily imitable. 
C)  so difficult to analyze that most firms should choose to ignore it. 
D)  typically fragile in the face of changes in the external environment.

Question 17

It is increasingly difficult for a firm to develop and sustain a competitive advantage because of the effects of globalization and

Accepted Answer

A)  the rapid development of the Internet's capabilities. 
B)  extensive use of outsourcing within the borders of the U.S. 
C)  the declining number of inventions and patents developed by U.S. citizens. 
D)  the simultaneous erosion of the U.S. work ethic and the U.S. education system.

Question 18

Which of the following is a true statement about capabilities?

Accepted Answer

A)  Capabilities are often developed in specific functional areas such as manufacturing, R&D, and marketing.. 
B)  Valuable capabilities are based almost entirely on tangible resources. 
C)  Capabilities based on human capital are more vulnerable to obsolescence than other intangible capabilities because of the tendency for employee knowledge to become outdated. 
D)  The link between firm financial performance and capabilities is dependent on whether the capabilities are based on tangible or intangible resources.

Question 19

In today's global economy, traditional factors such as labor costs, access to financial resources and raw materials, and protected or regulated markets are less likely to become core competencies and possibily competitive advantages.

Accepted Answer

A) True 
 B)False

Question 20

Two concerns about outsourcing are the potential loss of a firm's innovative ability and the loss of jobs within companies that decide to outsource some of their work.

Accepted Answer

A) True 
 B)False

Exam 3: The Internal Organization: Resources, Capabilities, Core Competencies, and Competitive Advantages

Costly-to-imitate capabilities can emerge for all of the following reasons EXCEPT

Older employees are less valuable resources to firms than younger employees, because the older employees have lower stocks of knowledge. Consequently, employee reductions should begin with early retirement inducements.

Innovation, consumer understanding, brand-building, go-to-market, and scale are activities that P&G (Chapter 3 Strategic Focus) performs well and are examples of the company's __________ .

Which of the following is not a component of internal analysis leading to competitive advantage?

Capabilities are usually developed separately from specific functional areas such as manufacturing, R&D, and marketing.

Acme Auto Repair has a thriving business based on its reputation for high-quality work, honesty, and skilled employees. For continued long-term success, Acme's owner should

Judgment is the capability of making successful decisions when no obviously correct model or rule is available or when relevant data are unreliable or incomplete.

Given enough time, any firm's competitive advantage can be imitated by its competitors.

Which of the following is TRUE about outsourcing?

The challenge and difficulty of making effective decisions are implied by preliminary evidence suggesting that one-half of organizational decisions fail.

A major reason outsourcing is effective is that

As discussed in the Chapter 3 Strategic Focus, CEOs of companies such as Viacom, the Oprah Winfrey Network, the Gap, and Cisco frequently had to make decisions about __________________ and the success of those decisions affected the tenure of those CEOs.

Organizational culture is

It is increasingly difficult for a firm to develop and sustain a competitive advantage because of the effects of globalization and

Which of the following is a true statement about capabilities?

In today's global economy, traditional factors such as labor costs, access to financial resources and raw materials, and protected or regulated markets are less likely to become core competencies and possibily competitive advantages.

Two concerns about outsourcing are the potential loss of a firm's innovative ability and the loss of jobs within companies that decide to outsource some of their work.