Question 1

______ is the ability to analyze, understand, and manage an internal organization in ways that are not dependent on the assumptions of a single country, culture, or context.

Accepted Answer

A)  Strategic thinking 
B)  A global mind-set 
C)  Profit-pooling 
D)  Competency-discovering

Question 2

By emphasizing core competencies when formulating strategies, companies learn to compete primarily on the basis of:

Accepted Answer

A)  intangible resources. 
B)  their primary activities. 
C)  firm-specific differences. 
D)  efficiency of production.

Question 3

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 effective only when it includes all support activities.

Question 4

Internal analysis enables a firm to determine what the firm:

Accepted Answer

A)  can do. 
B)  should do. 
C)  will do. 
D)  might do.

Question 5

A decision that results in failure:

Accepted Answer

A)  is a career-ending event because it is so unusual. 
B)  often results from lack of accountability. 
C)  fosters organizational inertia. 
D)  allows for learning.

Question 6

All competitive advantages have:

Accepted Answer

A)  a limited life. 
B)  an expiration date. 
C)  the ability to earn above-average returns indefinitely. 
D)  the ability to lead to more competitive advantages.

Question 7

Walmart uses core competencies, such as information technology and distribution channels, to create value for its customers through its "everyday low prices."

Accepted Answer

A) True 
 B)False

Question 8

Analyzing the internal environment enables a firm to determine what it can do by identifying resources, capabilities, and core competencies in the internal organization.

Accepted Answer

A) True 
 B)False

Question 9

Interpersonal relationships, trust, friendships, and a firm's reputation are all examples of complex social phenomena that make capabilities easy to imitate.

Accepted Answer

A) True 
 B)False

Question 10

A person who has made a successful decision when no obviously correct model or rule is available or when relevant data are unreliable or incomplete has exercised:

Accepted Answer

A)  foresight. 
B)  judgment. 
C)  effective strategic thinking. 
D)  decisiveness.

Question 11

Value is measured by the variable and fixed costs associated with the production and marketing of a particular product compared with the revenue and profits the product generates.

Accepted Answer

A) True 
 B)False

Question 12

In today's global economy, some resources that were traditionally critical to firms' efforts to sell goods are now less likely to be a source of competitive advantage.?

Accepted Answer

A) True 
 B)False

Question 13

A major department store chain has a strict policy of banning photographs or videos of its sales floor or back-room operations. It also does not allow academics to conduct studies of it for publication in research journals. In fact, some of its own top managers refer to the management's policies on secrecy as "verging on paranoid." These policies indicate that the top management of the firm believes the organization's core competencies are:

Accepted Answer

A)  causally ambiguous. 
B)  unobservable. 
C)  imitable. 
D)  common.

Question 14

The owner of a store that sells fine-quality fabrics for home seamstresses bemoans 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 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 15

______ is an example of a capability that is based in the functional area of distribution.

Accepted Answer

A)  Effective use of logistics management techniques 
B)  Effective control of inventories through point-of-purchase data collection 
C)  Effective organizational structure 
D)  Product and design quality

Question 16

Compared to tangible resources, intangible resources are:

Accepted Answer

A)  of less strategic value to the firm. 
B)  less likely to be the focus of strategic analysis. 
C)  a superior source of capabilities. 
D)  more likely to be reflected on the firm's balance sheet.

Question 17

An investor is considering buying a restaurant that has been in operation for a number of years. The restaurant has a highly regarded chef and many long-term kitchen and wait staff who work together smoothly. It has a reputation for dishes of consistently high quality and an appealing dining atmosphere. What should the investor consider when making a decision?

Accepted Answer

A)  The investor will find that the success of this restaurant is so heavily based on human resources that the business will likely be subject to inertia in the future. 
B)  The investor will find that the restaurant's financial statements undervalue the true value of its resources. 
C)  The investor should be aware that intangible assets are difficult to leverage into additional businesses. 
D)  The investor should search for a firm that has competitive advantages based on tangible resources.

Question 18

Which of the following is NOT a factor affecting sustainability of a competitive advantage?

Accepted Answer

A)  the availability of substitutes for a firm's core competence 
B)  the rate at which obsolescence of the core competence occurs because of environmental changes 
C)  the imitability of a core competence 
D)  the length of time the core competence has existed

Question 19

Firms that have strong positive relationships with suppliers and customers are said to have ______, an essential ingredient to creating value.

Accepted Answer

A)  customer value 
B)  social capital 
C)  effective marketing 
D)  an attractive industry

Question 20

Southwest Airlines has a complex interrelationship between its culture and staff that adds value in ways that other airlines cannot, such as jokes on flights or the cooperation between gate personnel and pilots. These examples illustrate which of the following criteria for sustainable competitive advantage?

Accepted Answer

A)  Valuable 
B)  Rare 
C)  Costly to imitate 
D)  Nonsubstitutable

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

______ is the ability to analyze, understand, and manage an internal organization in ways that are not dependent on the assumptions of a single country, culture, or context.

By emphasizing core competencies when formulating strategies, companies learn to compete primarily on the basis of:

Which of the following is TRUE about outsourcing?

Internal analysis enables a firm to determine what the firm:

A decision that results in failure:

All competitive advantages have:

Walmart uses core competencies, such as information technology and distribution channels, to create value for its customers through its "everyday low prices."

Analyzing the internal environment enables a firm to determine what it can do by identifying resources, capabilities, and core competencies in the internal organization.

Interpersonal relationships, trust, friendships, and a firm's reputation are all examples of complex social phenomena that make capabilities easy to imitate.

A person who has made a successful decision when no obviously correct model or rule is available or when relevant data are unreliable or incomplete has exercised:

Value is measured by the variable and fixed costs associated with the production and marketing of a particular product compared with the revenue and profits the product generates.

In today's global economy, some resources that were traditionally critical to firms' efforts to sell goods are now less likely to be a source of competitive advantage.?

______ is an example of a capability that is based in the functional area of distribution.

Compared to tangible resources, intangible resources are:

Which of the following is NOT a factor affecting sustainability of a competitive advantage?

Firms that have strong positive relationships with suppliers and customers are said to have ______, an essential ingredient to creating value.