quiz of management

Analyzing the External Environment of the Firm

3 correct (33%)6 incorrect (67%)

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Your Results:The correct answer for each question is indicated by a .

1 INCORRECT Developing forecasts, as discussed in the text, include two key inputs, which are

A)environmental scanning and stakeholder identification.

B)environmental scanning and competitor intelligence.

C)assessing internal strengths and environmental scanning.

D)environmental scanning and a SWOT analysis.

2 CORRECT A risk of forecasting discussed in the text is that

A) in most cases, the expense of collecting the necessary data exceeds the benefit.

B)forecasting's retrospective nature provides little information about the future.

C)managers may view uncertainty as black and white while ignoring important gray areas.

D) it can create legal problems for the firm if regulators discover the company is making forecasts.

3 INCORRECT Which of the following would be thought of as part of a firm's general environment?

A) increased trade deficit

B)decreased entry barriers

C)increased bargaining power of the firm's suppliers

D) increased competitive intensity

4 INCORRECTInterest rate increases have a ________ impact on the residential home construction industry and a ___ effect on industries that produce consumer necessities, such as prescription drugs or basic grocery items.

A)positive; negligible

B)positive; negative

C)negative; positive

D)negative; negligible

5 INCORRECTAn independent group of suppliers, such as farmers, gather to form a cooperative in order to sell their products to buyers directly, replacing their previous distributor. This is an example of

A)forward integration.

B)backward integration.

C)threat of substitute products.

D)threat of entry.

6 CORRECT The bargaining power of the supplier is less than that of the buyer when

A)volume of purchase is low.

B)the buyer's profit margin is low.

C)cost savings from the supplier's product are minimal.

D)threat of backward integration by buyers is low.

7 INCORRECTAs seen in Porter's Five Forces model, conditions under which a supplier group can be powerful include all the following except

A) lack of importance of the buyer to the supplier group.

B)high differentiation by the supplier.

C)readily available substitute products.

D)dominance by a few suppliers.

8 CORRECT The most extreme rivalry results from

A)a high level of differentiation.

B)few competitors, slow industry growth, lack of differentiation, high fixed or storage costs.

C)numerous equally balanced competitors, manufacturing capacity increases only in large increments, low exit barriers.

D)numerous equally balanced competitors, slow industry growth, high fixed or storage costs.

9 INCORRECTWhich of the following is an example of the interrelationship between the competitive and general environments?

A)A decline in a nation's educational standards results in a decline in the nation's productivity.

B)Increased awareness of personal health leads to lower demand, and greater rivalry in the alcoholic beverages industry.

C)A country's technological inferiority results in its enactment of strong trade barriers against importation.

D)Greater awareness of the environment results in environmental legislation.

Strategic Management: Creating Competitive Advantages


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1 INCORRECT

The CEO of Lucent Technologies made a lot of mistakes, such as committing errors in assessing the market and competitive conditions, as well as improperly redesigning the organization into 11 business units. Such errors led to performance declines. According to the text, this example illustrates the _________________ perspective of leadership.

A)romantic

B) internal mechanism

C)operational

D)external control

2 INCORRECT The "advance work" in the strategic management process is comprised of

A)strategy formulation.

B)strategy implementation.

C)strategic posturing.

D)strategy analysis.

3 INCORRECTStrategy implementation and formulation is a challenging, on-going process. To be effective, it should involve

A)the board of directors, CEO, and CFO.

B) line and staff managers.

C)the CEO and the board of directors.

D)all of the above.

4 INCORRECTMembers of an organization's board of directors should, while working to prioritize and fulfill their responsibilities,

A)direct all actions of the CEO.

B)emphasize the importance of short-term goals.

C)represent their own interests.

D)represent the interests of the shareholders.

5 INCORRECTThe "triple bottom line" approach to corporate accounting, according to the text, includes which three components

A)financial, organizational, and psychological.

B)financial, environmental, and customer.

C)financial, organizational, and customer.

D)financial, environmental, and social.

6 INCORRECTAs our world increases in complexity, the global environment is increasingly challenging and competitive. The key to effective globalization is

A)more people speaking more languages.

B)the flow of capital, people, and information.

C)governmental regulations.

D)the flow of goods.

7 INCORRECTWhich of the following lists is the hierarchy of organizational goals in order from least specific to most specific?

A)mission statements, strategic objectives, vision statements.

B)mission statements, vision statements, strategic objectives.

C)vision statements, strategic objectives, mission statements.

D)vision statements, mission statements, strategic objectives.

8 INCORRECT An organization's mission, in contrast to it's vision, should

A)be less detailed.

B)encompass all the major rules and regulations of the corporate work force.

C)encompass both the purpose of the company as well as the basis of competition.

D)be shorter in length.

9 CORRECTVision statements are used to create a higher understanding of the organization's overall direction and purpose. Vision statements

A)provide specific objectives.

B)are very specific.

C)evoke powerful and compelling mental images.

D)set organizational structure.

Assessing the Internal Environment of the Firm


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1 INCORRECTWhich of the following is not a limitation of SWOT (Strengths, Weaknesses, Opportunity, Threats) analysis?

A)Organizational strengths may not lead to competitive advantage

B)SWOT gives a one-shot view of a moving target

C)SWOT's focus on the external environment is too broad and integrative

D)SWOT overemphasizes a single dimension of strategy

2 INCORRECTA marketing department that promises delivery quicker than the production department's ability to produce is an example of a lack of understanding of the

A)synergy of the business units.

B)need to maintain the reputation of the company.

C)organizational culture and leadership.

D) interrelationships among functional areas and firm strategies.

3 INCORRECTXYZ Corp. is centering on the objective of low-cost, high quality, on-time production by curtailing idle productive facilities and workers. The XYZ Corp. is taking advantage of a ____________ system.

A) Just-In-Time (JIT)

B)Last In, First Out (LIFO)

C)First In, First Out (FIFO)

D)Highly mechanized

4 INCORRECT Which of the following lists is comprised of support activities:

A)human resource management, information systems, procurement, and firm infrastructure

B)customer service, information systems, technology development, and procurement

C)human resource management, technology development, customer service, and procurement

D)human resource management, customer service, marketing and sales, and operations

5 INCORRECTAlthough firm infrastructure is quite frequently viewed only as overhead expense, it can become a source of competitive advantage. Examples include all of the following except:

A)negotiating and maintaining ongoing relations with regulatory bodies.

B)marketing expertise increasing a firm's revenues and enabling it to enter new markets.

C)effective information systems contributing significantly to a firm's overall cost leadership strategy.

D)top management providing a key role in collaborating with important customers.

6 INCORRECT The competencies or skills that a firm employs to transform inputs into outputs are:

A)tangible resources.

B) intangible resources.

C)organizational capabilities.

D)reputational resources.

7 INCORRECTAn array of firm resources include interpersonal relations among managers in the firm, its culture, and its reputation with its customers and suppliers. Such competitive advantages are based upon

A)physical uniqueness.

B)path dependency.

C)social complexity.

D)tangible resources.

8 INCORRECTA company's ability to meet its short-term financial obligations is measured by which of the following categories?

A) liquidity ratios

B)profitability ratios

C)activity ratios

D) leverage ratios

9 INCORRECTThe "balanced scorecard" supplies top managers with a _____________ view of the business.

A) long-term financial

B)detailed and complex

C)simple and routine

D)fast but comprehensive

Recognizing a Firm’s Intellectual Assets: Moving Beyond a Firm’s Tangible Resources


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1 CORRECTA company that is known for its inability to leverage human capital is Xerox. The relatively short tenure of Rich Thoman, CEO, is one example. One of the main reasons he was fired is that

A)Xerox restructured their sales force to meet local needs.

B)he did not have inside connections like other board members and executives had.

C)he did not have the skills required for the job.

D)Xerox became known for being too "loosely" organized.

2 INCORRECTIf a large segment of a firm's value is in intellectual and human assets, the difference between the company's market value and book value in the knowledge economy should ___________ a company with mostly physical and financial assets.

A)be equal to

B)be smaller than

C)not be correlated with

D)be larger than

3 INCORRECTNew knowledge includes the continual contact between ________________ and ___________ knowledge.

A)tacit; explicit

B)theoretical; practical

C)intellectual; pragmatic

D)detailed; tacit

4 INCORRECTAttracting and retaining human capital is a challenge for many firms today. Firms experiencing high turnover should

A)make their work environment less stimulating.

B)decrease money spent on human capital.

C)adopt effective retention strategies.

D) increase recruiting.

5 CORRECTAn essential part of maintaining a competitive advantage in today's knowledge economy is developing human capital. Efforts and initiatives to develop human capital should be directed

A)throughout the firm at all levels.

B)at top managers.

C)at human resource departments.

D)at the employees themselves.

6 CORRECT______________ rate a person's skill and performance in a 360-degree evaluation and feedback system.

A)colleagues

B)direct reports

C)superiors

D)all of the above

7 INCORRECTIn an attempt to secure key employees from competitors, firms may attract the symbolic leader of a group within a competing firm, hoping others will follow. This has been termed

A)the "Columbus effect."

B)strategically competitive hiring.

C)the "Pied Piper effect."

D)the "tech exit" effect.

8 INCORRECTThere are elements of team building that have an impact on a team's success, according to the text. These include all of the following except

A)work. Work should be relevant and meaningful to group members.

B)titles. Titles are important to a team's success.

C)people bonding during the "heat of battle." Team members become more unified during a crisis.

D)teams taking care of their own. Team members look after each others' best interest.

9 INCORRECTThe use of information technology (e.g., email) in many organizations has increased in recent years. This has helped to

A)restrict social network growth.

B)make more effective use of time in every situation.

C)increase social capital.

D)create smaller social networks.

Busine


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1 INCORRECTBusinesses without a competitive advantage are not likely to earn more than "normal" profits in the long run. Normal profits are

A)profits one would expect to earn on investments that have a similar level of risk.

B)profits received by corporations in the normal course of business.

C)what one would receive on U.S. Treasury securities.

D)profits earned by a corporation on a diversified portfolio of stocks.

2 INCORRECTPrimary value chain activities that involve the effective layout of receiving dock operations (inbound logistics) and support value chain activities that include expertise in process engineering (technology development) characterize what generic strategy?

A)differentiation

B)overall cost leadership

C)differentiation focus

D)stuck-in-the-middle

3 CORRECTWhich of the following is false regarding how a differentiation strategy can help a firm to improve its competitive position vis à vis Porter's five forces?

A)by increasing a firm's margins, it avoids the need for a low cost position

B) it helps a firm to deal with supplier power and reduces buyer power since buyers lack comparable alternatives

C)supplier power is increased because suppliers will be able to charge higher prices for their inputs

D)firms will enjoy high customer loyalty, thus experiencing less threat from substitutes than its competitors

4 INCORRECT A narrow market focus is to a differentiation-based strategy as a

A)growth market is to a differentiation-based strategy.

B)growth market is to a cost-based strategy.

C)technological innovation is to a cost-based strategy.

D)broadly-defined target market is to a cost leadership strategy.

5 CORRECT The total profits in an industry at all points along the industry's value chain is called the

A)profit maximizer.

B)revenue enhancer.

C)profit outsourcing.

D)profit pool.

6 INCORRECTThe emphasis on product design is very high, the intensity of competition is low, and the market growth rate is low in the ______ stage of the industry life cycle.

A)maturity

B)growth

C)introduction

D)decline

7 INCORRECTIn the _______ stage of the industry life cycle, there are numerous segments, competition is very intense, and the emphasis on process design is high.

A) introduction

B)maturity

C)growth

D)decline

8 INCORRECT As markets mature

A)there is increasing emphasis on efficiency.

B)costs continue to increase.

C)application for patents increase.

D)differentiation opportunities increase.

9 INCORRECT The most probable time to pursue a harvest strategy is in a situation of

A)high growth.

B)decline in the market life cycle.

C)strong competitive advantage.

D)mergers and acquisitions.

Routing Informationss-Level Strategy: Creating and Sustaining Competitive Advantages

Corporate-Level Strategy: Creating Value Through Diversification


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1 CORRECT Individual investors are reliant on upon the corporation's managers to

A)diversify the stockholder's investments in order to reduce risk.

B)achieve risk reduction at a lower cost than stockholders could obtain on their own.

C)maximize short-term returns in the form of dividends.

D)add value to their investments in a way that the stockholders could not accomplish on their own.

2 INCORRECTOne of the primary advantages of diversification is sharing core competencies. In order for diversification to be most successful, it is important that

A)the methods of production are the same.

B)the similarity required for sharing core competencies must be in the value chain, not in the product.

C)the products use similar distribution channels.

D)the target market is the same, even if the products are very different.

3 CORRECT Vertical integration may be beneficial when

A)flexibility is reduced, providing a more stationary position in the competitive environment.

B)the minimum efficient scales of two corporations are different.

C)lower transaction costs and improved coordination are vital and achievable through vertical integration.

D)various segregated specializations will be combined.

4 INCORRECTWhen a firm's corporate office helps subsidiaries make wise choices in their own acquisitions, divestures, and new ventures, it is called___________.

A)restructuring

B) leveraging core competencies

C)uncreasing market power

D)parenting

5 INCORRECTIn the BCG (Boston Consulting Group) Matrix, a business that has a low market share in an industry set apart by high market growth is termed a

A)star.

B)cash cow.

C)question mark.

D)dog.

6 INCORRECTDenoted in the Boston Consulting Group Portfolio management technique, a "cash cow, refers to a business that has

A)relatively low market share and low market growth.

B) low market growth and relatively high market share.

C)relatively low market share and high market growth.

D)high market growth and relatively high market share.

7 INCORRECTAs stated by Michael Porter: "There's a tremendous allure to _______________. It's the big play, the dramatic gesture. With one stroke of the pen you can add billions to size, get a front page story, and create excitement in markets."

A)mergers and acquisitions

B)strategic alliances and joint ventures

C)internal development

D)differentiation strategies

8 INCORRECT All of the following are guiding principles for managing strategic alliances except

A)establishing a clear understanding between partners.

B)not shortchanging your partner.

C)relying primarily on a contract to make the joint venture work.

D)working hard to ensure a collaborative relationship between partners.

9 INCORRECT "Golden parachutes" signifies

A)pay given to executives fired because of a takeover.

B)a clause requiring that huge dividend payments be made upon takeover.

C)financial inducements offered by a threatened firm to stop a hostile suitor from acquiring it.

D)managers of a firm involved in a hostile takeover approaching a third about acquisition.

International Strategy: Creating Value in Global Markets


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1 INCORRECTIn Michael Porter's framework, which of the following factors does not affect a nation's competitiveness?

A)factor conditions

B)policies that protect the nation's domestic competitors

C)demand characteristics

D)related and supported industries

2 CORRECTThe sale of Boeing's commercial aircraft and Microsoft's operating systems in many countries enable these companies to benefit from

A)higher prices in their domestic markets.

B)economies of scale.

C)optimizing the location for many activities in their value chain.

D)reducing their exposure to currency risks.

3 INCORRECT Demands to "reduce costs" require that

A)the company needs to supplement the local foreign economy in a manner

specified by the local government.

B)a company should not trade idiosyncratic preferences in product features for higher economic returns.

C)a company must pursue what is economically beneficial to the company including maximizing economies of scale and learning curve effects.

D)the manager should follow a multidomestic strategy to maximize the economic benefits to the company.

4 CORRECTHigh pressure for lower costs combined with high pressure for local adaptation would imply what type of international strategy:

A)global

B)multidomestic

C)differentiation

D)transnational

5 CORRECT All of the following are global strategy limitations except

A)ability to locate activities in optimal locations.

B) limited ability to adapt to local markets.

C)concentration of activities may increase dependence on a single facility.

D)single locations may lead to higher tariffs and transportation costs.

6 CORRECT Which of the following is not a limitation of a multidomestic strategy?

A) less ability to realize cost savings through scale economies

B)greater difficulty in transferring knowledge across countries

C)may lead to "overadaptation" as conditions change

D)single locations may lead to higher tariffs and transportation costs

7 CORRECT Which of the following describes the most standard order of entry into foreign markets?

A)franchising, licensing, exporting, joint venture, and wholly owned subsidiary

B) licensing, exporting, franchising, joint venture, and wholly owned subsidiary

C)exporting, licensing, franchising, joint venture, and wholly owned subsidiary

D)exporting, franchising, licensing, joint venture, and wholly owned subsidiary

8 CORRECT ____________ involve the creation of a third-party legal entity, whereas __________ do not.

A)Licensing agreements, joint ventures

B)Franchising agreements; strategic alliances

C)Strategic alliances; joint ventures

D) Joint ventures; strategic alliances

The Internet and E-Commerce: Creating Value Through E-Business Strategies


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1 CORRECT The Garden.com start-up, the opening case in this chapter, failed because

A) it spent heavily on content and capabilities that customers did not value.

B) its reputation was damaged by rumors that spread via word of mouth.

C)it was unable to turn shoppers into buyers.

D)all of the above

2 CORRECT The types of industries that are expected to be most radically transformed by the

Internet, according to the text are:

A) information-intensive such as financial services

B)research-intensive industries such as pharmaceuticals

C)manufacturing-intensive such as microprocessors

D)all of the above

3 INCORRECT End users are

A)usually the AC in B2C.

B)the final consumers in a distribution channel.

C)likely to have greater bargaining power because of the Internet.

D)all of the above

4 INCORRECTOne of the utmost threats to supplier power that has materialized because of the Internet is

A) Internet technologies cannot easily be imitated.

B)the Internet inhibits the ability of suppliers to offer highly differentiated products or services.

C)procurement technologies eliminate the need for suppliers.

D)the cost of accessing business customers has increased.

5 INCORRECT On the whole, the threat of substitutes is heightened because the Internet:

A) lowers switching costs.

B) lowers barriers to entry.

C)introduces new ways to accomplish the same tasks.

D) increases output per unit of cost.

6 INCORRECTAll of the following are reasons the Internet increases the intensity of competitive rivalry except:

A)the Internet has made it more difficult to imitate the advantages achieved by competitors.

B)the Internet makes it more difficult for firms to differentiate themselves.

C)the Internet has Acommoditized@ products that previously were regarded as rare or unique.

D)the Internet has eliminated the importance of location by making geographically distant products available online.

7 INCORRECTWhich of the following is not a way that Internet technologies are being used to improve an overall cost leadership strategy?

A)Direct access to progress reports and the ability for customers to periodically check work-in-progress is minimizing rework.

B)Online bidding and order processing are eliminating the need for sales calls and minimizing sales force expenses.

C)Quick online responses to service requests and rapid feedback to customer surveys and product promotions are enhancing marketing efforts.

D)Online purchase orders are making many transactions paperless, reducing the costs of procurement and paper.

8 INCORRECTWhich of the following phrases best completes the following sentence: Because of the Internet, firms that utilize a focus strategy have new opportunities to _____________________

A)respond quickly to customer requests.

B)access niche markets in a highly specialized fashion.

C)provide more services and features.

D)access markets less expensively.

9 INCORRECTAn enormous amount of money was spent promoting Pets.com's brand, but the company ultimately closed during the dot-com downturn. Which of the following was not one of the reasons Pets.com failed:

A) it overextended its focus on a market niche and tried to appeal to an overly broad audience.

B) it was based on a faulty business model with overly thin margins.

C)despite its efforts, the Pets.com marketing campaign was ill-conceived and did not create name recognition.

D) its strategy was based on a value proposition that customers did not value.

Implementing Strategy: Achieving Effective Strategic Control


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1 CORRECTBausch & Lomb, the chapter-opening case, managers who were driven to accomplish revenue objectives secretly moved inventory into storage and counted it as sales. This was

A)standard operating procedure.

B)the result of a flawed system of strategic controls that failed to define the boundaries of acceptable behavior.

C)a good way to meet revenue goals given B & L's strong emphasis on "moving inventory."

D)a good way to ensure strong, positive culture.

2 CORRECT In businesses faced with complex and turbulent business environments

A)goals and objectives that are uncertain prevent opportunism.

B)complacency about predetermined milestones can prevent adaptability.

C)traditional strategic controls are usually inappropriate.

D)detailed plans are needed to maintain order.

3 CORRECT Which of the following is a benefit of continuous monitoring?

A)replacing the time-consuming process of organizational learning

B)dramatically altering the organization's response to its competitive environment

C)enhancing the organization's ability to respond with speed and flexibility

D)all of the above

4 INCORRECT"As firms simultaneously downsize and face the need for increased coordination across organization boundaries, a control system based primarily on ________________________________is dysfunctional."

A)culture and rewards

B)organizational loyalty

C)innovation and risk taking

D)boundaries and constraints

5 INCORRECTThe founder of Wal-Mart, the late Sam Walton, used to give pep rallies at local Wal-Mart stores. What purpose did this serve?

A) it helped reinforce and sustain Wal-Mart's culture.

B) it was used to remind employees of Wal-Marts rules and regulations.

C)it demonstrated to employees the importance of articulating explicit goals and objectives.

D) it was mostly an ego trip for Sam Walton.

6 INCORRECTAs countercultures surface that have shared values opposite from the dominant culture of an organization,

A)organizational cohesiveness increases.

B) individuals begin working at cross purposes.

C)information is shared rather than hoarded.

D) individuals gain insights into overarching goals and objectives.

7 INCORRECT Which of the following is not a priority of effective short-term objectives?

A)providing a specific time horizon for their attainment

B)being achievable yet challenging

C)being specific and measurable

D)an emphasis on "do your best" goals

8 CORRECTCadbury Schweppes has a policy that, no matter how unusual, all payments are recorded in the company's books. This rule is

A)overly cumbersome.

B)designed to minimize improper and unethical conduct.

C)aimed at encouraging managers to make better budgetary decisions.

D)directed at protecting client confidentiality.

9 INCORRECTThe usage of culture and intangible rewards as the principal means of controlling individual behavior is considered more effective than rules and boundaries when

A)work is autonomous and creative.

B)output is standardized.

C)measurement of performance is straightforward.

D)tasks are repetitive and routine.

Implementing Strategy: Creating Effective Organizational Designs


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1 INCORRECTIn the chapter-opening case, This End Up's efforts to integrate operations across multiple organizational boundaries was unsuccessful. The principal reason for this failure was:

A)a lack of support by top management.

B)the inability to establish close and effective working relationships among both its internal activities and external parties.

C)improper and unethical conduct by the firm's new CEO.

D)a downward spiral in market demand for This End Up styles of furniture.

2 INCORRECTAs a rule, discussions of the relationship between strategy and structure strongly connote that

A)strategy follows structure.

B)strategy can effectively be formulated without considering structural elements.

C)structure typically has a very small influence on a firm's strategy.

D)structure follows strategy

3 INCORRECTWork is separated into units that specialize in production, marketing, research and development, and other management tasks at Sharp Corporation. This is an example of

A)simple structure.

B)divisional structure.

C)functional structure.

D)matrix structure.

4 INCORRECT An advantage of a divisional type of organizational structure is

A)an enhanced ability to respond quickly to changes in the external environment.

B)efficient use of managerial and technical talent.

C)high degree of emphasis on long term performance.

D)uniformity in image and quality across divisions.

5 CORRECT Significant advantages of a holding company structure include

A)gaining synergistic benefits across businesses.

B)a high level of awareness at the corporate office of issues facing individual divisions.

C)a high level of control of division executives by executives at the corporate level.

D)savings in personnel and overhead expenses associated with a small corporate office.

6 INCORRECTMultifaceted working relationships, intense power struggles, and excessive reliance on group processes are disadvantages of what type of organizational structure?

A)divisional

B)holding company

C)matrix

D)functional

7 INCORRECTOticon, a hearing aid manufacturer, removed offices and cubicles and gave employees freewheeling workstations that could be rearranged on a project-by-project basis. Oticon also purged its organizational chart. The purpose of these effort was to create a

A)modular structure.

B)barrier-free structure.

C)virtual structure.

D)all of the above

8 INCORRECT Which of the following is not considered a strategic risk of outsourcing?

A) loss of non-vital functions

B) loss of control over a supplier

C)loss of cross-functional skills

D) loss of critical skills

Effective Strategic Leadership: Creating a Learning Organization and an Ethical Culture


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1 INCORRECT Which of the following is an key attribute of a leader?

A)reactive

B)satisfied with the status quo

C)goal-oriented

D)focused on past performance

2 INCORRECT Which of the following is not a result of poor organizational design by leaders?

A) insufficient mechanisms that integrate and coordinate activities across the firm

B)teams, systems, and organizational processes that facilitate implementation

C)inadequate accountability among managers and employees

D) inappropriate budgeting and control systems

3 INCORRECT Organizations that get caught up in day-to-day work activities

A)fail to ask probing questions about their basic assumptions.

B)fail to think objectively about themselves and their business.

C)fail to refresh their strategies or reengineer their work processes.

D)all of the above

4 INCORRECT The "top down" perspective of empowerment

A)delegates responsibility.

B)encourages intelligent risk-taking.

C)trusts people to perform.

D)encourages cooperative behavior.

5 INCORRECTManufacturing employees at Chaparral Steel are closely involved with customers and have access to the modern innovative knowledge being developed in its manufacturing processes. This is an example of

A)hierarchical control.

B)employee empowerment.

C)knowledge management.

D)enabling heroes and drones.

6 INCORRECT All of the following is one of the guidelines for management by walking around except:

A)be open and don't argue. The goal is to provide an open environment of trust.

B)be a good listener. Don't try to steer the conversation. Let the other person do most of the talking.

C)wander aimlessly without an agenda.

D)have a clear idea of what type of information you need and want to evaluate.

7 INCORRECTWhich of the following explains why organizations are prone to inertia and slow to change?

A)political

barriers

B)vested interests in the status quo

C)personal time constraints

D)all of the above

8 INCORRECT Which of the following statements about ethical organizations is not true?

A)ethical values shape the search for opportunities.

B)organizational ethics define what a company is and what it stands for.

C)the potential benefits of an ethical organization are few but direct.

D)ethics provide a common frame of reference that serves as a unifying force.

9 INCORRECTA statement describing an organization's commitment to particular standards of ethical behavior is a

A)corporate credo

B)role model

C)control system

D)reward structure

Effective Strategic Leadership: Fostering Corporate Entrepreneurship and New Venture Creation


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1 CORRECTIn the chapter-opening case, the entrepreneurial start-up Rosen Motors failed even though it had created an energy-saving, breakthrough product. What happened?

A)their failed product demonstration gave other technologies time to move ahead.

B) industry and competitive forces did not support their product coming to market.

C)they had no buyers by the time they were about to enter the expensive crash test phase so they closed up shop.

D)all of the above

2 INCORRECT All of the following are characteristics of an entrepreneurial opportunity except:

A)attractive.

B)achievable.

C)affordable.

D)value creating.

3 INCORRECT A study conducted in the 1970s by MIT professor David Birch found that

A)small business create the majority of new jobs.

B)fast-growing entrepreneurial firms are the most likely to fail.

C)the number of small businesses that are formed each year equals the number that close each year.

D)small businesses tend to enter mature industries with low innovativeness.

4 INCORRECT The bulk of entrepreneurial start-ups are financed with

A)venture capital financing.

B)personal savings and the contributions of family and friends.

C)public financing (e.g., SBA loans).

D)bank financing

5 INCORRECT Which of the following is not an illustration of the liability of newness?

A)entrepreneurial start-ups are unknown in their industry.

B)entrepreneurial start-ups lack credibility with suppliers and financial sources.

C)entrepreneurial start-ups lack the kind of organizational structures that promote rapid decision making.

D)entrepreneurial start-ups lack experience.

6 CORRECTWhich of the following impact which people within the corporation recognize entrepreneurial opportunities?

A)organizational systems that foster learning and manage rewards

B)corporate culture

C)structural features that guide and constrain action

D)all of the above

7 CORRECT Intel has invested $8 billion in several e-business start-ups. This is an example of

A)corporate venture funding.

B)mergers and acquisitions.

C)internal development.

D)strategic renewal.

8 INCORRECTWhich of the following scopes of entrepreneurial orientation is expressed as "a forward-looking perspective characteristic of a marketplace leader that has the foresight to seize opportunities"?

A)opportunism

B)proactiveness

C)risk taking

D)autonomy

9 INCORRECTFirms that are the first to enter new markets, establish brand identity, and/or adopt new technologies, hence gaining benefits, are known as

A)first-mover advantages.

B)technological capabilities.

C)competitive aggressiveness.

D)breakthrough innovations.

10 INCORRECTWhich kind of risk taking entails that a company borrows heavily or commits a large portion of its resources in order to grow?

A)business risk taking

B)technological risk taking

C)personal risk taking

D)financial risk taking