Question 1

Which of the following effects have new IT systems had on business over the last decade?

Accepted Answer

A)  They have removed distractions from work at the office.
B)  They have restricted the growth of social networks at work.
C)  They have increased social capital.
D)  They have reduced the number of negative interactions between co-workers. C

Question 2

Which of the following best measures a company's ability to meet short-term obligations?

Accepted Answer

A)  Liquidity
B)  Profitability
C)  Productivity
D)  Leverage A

Question 3

What is the main purpose of the board of directors?

Accepted Answer

A)  to represent shareholders
B)  to provide oversight for the CEO
C)  to protect their own interests
D)  to ensure that quarterly projections are met A

Question 4

When is an emphasis on corporate culture and intangible rewards more useful than strict rules?

Accepted Answer

A)  When work is creative and self-directed
B)  When work can be measured and evaluated exactly
C)  When a worker's output is standardized
D)  When tasks are repetitive and low-skilled

Question 5

Which of the following failures is common in companies that are barely keeping up with their day-to-day functions?

Accepted Answer

A)  The failure to reevaluate strategic aims.
B)  The failure to question basic assumptions about the business environment.
C)  The failure to analyze its own operations objectively.
D)  All of the above

Question 6

Which strategy should a company employ to combat high turnover in a competitive industry?

Accepted Answer

A)  Increase recruiting efforts.
B)  Make the workplace more competitive.
C)  Spend less on HR, since most employees leave anyway.
D)  Implement employee retention programs.

Question 7

What should be the relationship between a corporate strategy and corporate structure?

Accepted Answer

A)  Structure should be designed to implement strategy.
B)  Strategy should be designed with the structure in mind.
C)  Strategy and structure should be developed independently.
D)  There is no relation because strategy changes more often than structure.

Question 8

Which is true for a business that is facing a turbulent, unpredictable business environment?

Accepted Answer

A)  It should leave its goals vague to be more flexible.
B)  It should avoid milestones so that workflow is allowed to remain fluid.
C)  It should write detailed plans that attempt to cover every possibility.
D)  It must innovate strategic controls appropriate for its environment.

Question 9

Which of the following does not necessarily increase competition between companies?

Accepted Answer

A)  The presence of many roughly equal competitors
B)  High overhead costs
C)  Slow industry growth
D)  Industry deregulation

Question 10

When should a company consider vertical integration?

Accepted Answer

A)  When lowered transactional costs and greater coordination are important
B)  Whenever different, specialized companies will be combined
C)  When the company is unable to expand profits within its segment of the value chain
D)  When the company lacks liquidity

Question 11

What is it called when the head office closely advises subsidiaries?

Accepted Answer

A)  Mentoring
B)  Parenting
C)  Consolidating
D)  Centralizing

Question 12

What is the difference between a vision statement and a mission statement?

Accepted Answer

A)  The vision statement is much more specific.
B)  The vision statement is not necessarily about the company.
C)  The mission statement gives more pragmatic guidelines than the vision statement.
D)  They are the same thing.

Question 13

Who should be involved in strategy implementation?

Accepted Answer

A)  The CEO and the board of directors
B)  Major shareholders
C)  Division heads
D)  All of the above

Question 14

What strategy is being implemented when a chain of grocery stores buys out a number of local farms and begins to grow its own produce?

Accepted Answer

A)  Forward integration
B)  Backward integration
C)  Horizontal integration
D)  Synergistic integration

Question 15

Who evaluates an employee in a 360-degree evaluation process?

Accepted Answer

A)  Colleagues
B)  Managers
C)  Subordinates
D)  All of the above

Question 16

What is the difference between a joint venture and a strategic alliance?

Accepted Answer

A)  A joint venture is legally binding, while a strategic alliance is not.
B)  Strategic alliances can be accused of illegal price fixing.
C)  Joint ventures involve the creation of third-party entities.
D)  Joint ventures can only include two companies; a strategic alliance can have any number.

Question 17

Which of the following is a characteristic of a mature market?

Accepted Answer

A)  Growth is low, and competition is intense.
B)  Growth is high, and it is an easy market to enter.
C)  Growth is low, but there is plenty of room for future expansion.
D)  Profit depends more on product design than on efficiency.

Question 18

Which of the following is not a good quality in a leader?

Accepted Answer

A)  Detail-oriented
B)  Goal-oriented
C)  Self-motivated
D)  Reactive

Question 19

Which of the following is a strategic risk associated with outsourcing?

Accepted Answer

A)  Loss of non-vital skills
B)  Loss of critical skills
C)  Reduced personnel cost
D)  Decreased personnel flexibility

Question 20

When the buyer has a low profit margin, what happens to the seller's bargaining power?

Accepted Answer

A)  It decreases.
B)  It increases.
C)  It stays the same.
D)  The seller's bargaining power is not affected by the buyer's profit margin.

Exam 13: Management