Test bank of fred r david – strategic management, 13th edition ch04

Exam Name _ TRUE/FALSE Write 'T' if the statement is true and 'F' if the statement is false 1) Some companies are equally strong (or weak) in all areas of thier business 1) _ 2) Objectives and strategies are established with the intention of capitalizing upon external strengths and minimizing weaknesses 2) _ 3) The internal analysis is critically important in the Arab world as upbringing and socialization may induce executives to overestimate strengths and weaknesses 3) _ 4) Within large organizations, each division has certain strengths and weaknesses 4) _ 5) Opportunities are a firm's distinctive competencies that cannot be easily matched or imitated by competitors 5) _ 6) Building competitive advantages involves taking advantage of distinctive competencies 6) _ 7) Few successful corporations give considerable attention to both external and internal analysis 7) _ 8) Generally in the Arab world, the internal capacity to assess external environments and explore their trends is lacking 8) _ 9) Senior Arab executives should give priority to internal capacity-building processes and encourage creative rethinking of strategic initiatives and external trends 9) _ 10) The process of performing an internal assessment, compared to the external assessment, provides more opportunity for participants to understand how their jobs, departments and divisions fit into the whole organization 10) 11) Unlike the external assessment, the internal assessment does not require gathering and assimilating information about the firm's functional areas 11) 12) Compared to the external analysis, the process of performing an internal analysis provides more opportunity for participants to understand how their jobs, departments, and divisions fit into the whole organization 12) 13) An internal audit task force of managers could be charged with determining a specific number (usually 10 to 20) of the most important strengths and weaknesses 13) MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question 14) Performing an internal assessment requires 14) A) gathering, assimilating, and evaluating information about a firm's operations B) simply focusing on the operational issues of a firm C) inheriting the historical data about a firm's operations D) gathering, record-keeping, and safe-guarding information about a firm's operations TRUE/FALSE Write 'T' if the statement is true and 'F' if the statement is false 15) As long as the strategic-management process is overseen by strategists, there is no need for managers and employees from different functional areas to work together to provide ideas or information 15) 16) Not recognizing and understanding the relationships among functional areas of business can be beneficial to strategic management 16) 17) Government and nonprofit enterprises have traditionally placed much emphasis on relationships among the business functions 17) 18) For strategies to succeed, a coordinated effort among all the functional areas of business is needed 18) 19) Proponents of the resource-based view argue that external factors are more important than internal factors for a firm in achieving and sustaining competitive advantage 19) 20) The basic premise of the research-based view is that the mix, type, amount and nature of a firm's internal resources should be considered first and foremost in devising strategies that can lead to sustainable competitive advantage 20) 21) According to RBV theorists, when other firms are unable to duplicate a particular strategy, then the focal firm has a sustainable competitive advantage 21) 22) Common resources are not valauble to firms 22) 23) The RBV theorists say if many firms cannot easily obtain or imitate particular resources then those resources will ensure a competitive advantage 23) 24) If firms cannot easily obtain or imitate particular resources, then those resources will not ensure a competitive advantage to others who have them 24) 25) Understanding both external and internal factors and, more importantly, understanding the relationships among them, will be the key to effective strategy formulation 25) 26) The definition of 'organizational culture' emphasizes only the importance of external factors in making strategic decisions 26) 27) The subtle, elusive and largely unconscious forces that shape the workplace are captured by the organizational culture 27) 28) Cultural products include values, beliefs, stories, and language 28) 29) As culture is remarkably resistant to change, it rarely has any effect on a firm 29) 30) A ritual is a standardized, detailed set of techniques and behaviors that manage anxieties but seldom produce intended, technical consequences of practical importance 30) 31) Since most firms in the Arab world are family-run businesses, organizational culture seems to have evolved rapidly 31) 32) The culture of family-owned businesses may experience profound changes once the founder has passed away 32) 33) An organization's culture compares to an individual's personality in the sense that no two organizations have the same culture and no two individuals have the same personality 33) 34) An organization's culture has no obligation to support the collective commitment of its people towards a common purpose 34) 35) The rich culture of Savola has enabled the company to embark on a successful expansion strategy in the Middle East and Central Asia 35) 36) Even if a firm's culture is not supportive, strategic changes may still be effective or even productive 36) 37) An organization's culture should infuse individuals with enthusiasm for implementing strategies 37) 38) In China, business behavior revolves around guanxi, or personal relations 38) 39) Links between a firm's culture and strategies often determine its success 39) 40) In recent years, Arab-based corporations have started to operate globally 40) 41) If the firm's culture is not supportive, strategic changes may be ineffective or even counterproductive 41) 42) Arab businessmen tend to use first names in interactions 42) 43) Arabs are mostly inclined toward web-conference meetings 43) 44) In the Arab society, meetings are often interupted because of the nature of socialization and personalized aspects of business conduct 44) 45) Unlike Americans, Arabs not consider exchanging business cards as essential 45) 46) Arabs, generally, prefer short-term business relationships 46) 47) Arab managers working in other countries are not required to be attentive to prevailing cultural and business norms 47) 48) Arab managers are not generally comfortable dealing with bureaucrats and politicians 48) 49) An assessment of resource capabilities is crucial for the survival and growth of the firm 49) 50) Managers seek to maximize strengths and minimize weaknesses while effectively seizing opportunities and avoiding or neutralize threats 50) 51) SWOT is the second most common method in evaluating a company's capabilities in the context of a dynamic marketplace 51) 52) Firms in the Arab world have a longer experience in SWOT analysis than Western corporations 52) 53) Value chain analysis aims to identify where low-cost advantages or disadvantages exist anywhere along the value chain from raw materials to customer service activities 53) 54) Value Chain Analysis can enable a firm to better identify its own strengths and weaknesses especially as compared to competitors' Value Chain Analyses 54) 55) A value chain analysis is not so important for a firm in monitoring whether its prices and costs are competitive 55) 56) The combined costs of all the various activities in a company's value chain define the firm's cost of doing business 56) 57) Value chains tend to be similar across different industries and firms 57) 58) Although a useful step in the strategic management process, value chain analysis can rarely help a firm monitor whether its prices and costs are competitive 58) 59) More and more companies are using VCA to gain and sustain competitive advantage by being especially efficient and effective along various parts of the value chain 59) 60) Benchmarking is an analytical tool used to determine whether a firm's value chain activities are competitive compared to rivals 60) 61) Probably the easiest part of benchmarking, is gaining access to other firms' value chain activities with associated costs 61) 62) The Internal Factor Evaluation Matrix is a summary step when conducting an internal strategicmanagement audit 62) 63) The Internal Factor Evaluation Matrix should include from 20 to 30 key factors 63) E) behavior modification 73) Organizational culture is the product of various factors, including 73) A) values, norms and beliefs B) government rules and regulations C) the founder's aspiration D) accumulated experience E) all the above 74) Which of the following characterisitcs of founders does not help to shape corporate culture and its progression? 74) A) A founder's perceptions B) A founder's aspirations C) A founder's decision-making process along with accompanying actions D) A founder's delegation of authorities to subordinates 75) Which of the following is not a cultural product? 75) A) Rituals B) Emotions C) Symbols D) Rites E) Sagas 76) The standardized, detailed techniques and behaviors that manage anxieties, but seldom produce intended, technical consequences of practical results are called 76) A) folktales B) values C) rituals D) rites E) metaphors 77) What are historical narratives describing the unique accomplishments of a group and its leaders, usually in heroic terms? 77) A) Folktales B) Sagas C) Stories D) Myths E) Rites 78) Life-directing attitudes that serve as behavioral guidelines are called 78) A) values B) legends C) beliefs D) metaphors E) rites 79) In Europe, it is generally true that the farther on the continent, the more participatory the management style 79) A) south B) north C) east D) west E) southeast 80) Ignoring the effect that culture can have on business relationships can result in all of the following except 80) A) difficulty accessing company facilities B) lack of coordination C) barriers to communication D) inability to adapt to changing conditions 81) Arabs place an exceptionally high priority on whereas many foreigners place more worth on 81) A) time; relationships B) silence; relationships C) silence; time D) close personal distance; ample personal distance E) relationships; time 82) To successfully compete in world markets, Arab executives must have a better knowledge of all of following influencing forces except 82) A) cultural forces B) religious forces C) historical forces D) environmental forces 83) Which of the following is not true about Arab managers? 83) A) Arabs have a tendancy to compromise and are easily persuaded to offer concessions once they feel that their counterparts are willing to reciprocate B) Arabs are less inclined to gather detailed information about the subject under negotiation, so will subsequently spend less time than their American counterparts on preparation and planning platforms C) As a sign of respect, Arabs tend to stand approximately meter from their counterparts when engaged in business conversations D) Arabs may delay scheduled meetings or often reschedule them, because personal matters, often family ones, take priority 84) Which of the following is not a common method used by managers to assess a company's resource capabilities and its competitive position? 84) A) Internal Factor Evaluation (IFE) B) Value Chain Analysis (VCA) C) PESTLE analysis D) SWOT Analysis 85) The practical assessment of company strengths and weaknesses allows managers to answer which of the following questions? 85) A) Does the company have the capabilities and essential resources to leap forward? B) Can the company meet existing and emerging market needs? C) Is the company, relative to its rivals, in a position to compete effectively? D) Is theree a fit between our capabilities and existing opportunities and threats? E) All the above 86) All firms in a given industry have a similar value chain, involving which of the following activities? 86) A) Building manufacturing facilities B) Providingcustomer service C) Obtaining raw materials and designing products D) Developing cooperative agreements E) All the above 87) Which of the following is not a primary activity in the value chain? 87) A) Technological development B) Logistical activities including marketing C) After-sales services D) The physical creation of the product 88) The process whereby a firm determines the costs associated with organizational activities is called 88) A) value chain analysis B) the resource-based approach C) strategic cost analysis D) the internal factor evaluation matrix E) cost-benefit analysis 89) The initial step to implementing value chain analysis is 89) A) establishing costs in terms of money B) converting the cost data into information by looking for competitive cost strengths and weaknesses C) dividing a firm's operations into specific activities or business processes D) attaching a cost to each discrete activity E) establishing costs in terms of time 90) Which of the following would not be classified as a supplier cost for a typical manufacturing firm? 90) A) Truck drivers and truck maintenance B) Raw materials C) Trucking D) Fuel and energy E) Transportation 91) The management costs in a value chain for a typical manufacturing firm does not include 91) A) employees and employee benefits B) truck maintenance C) managers and labor relations D) financial and legal costs E) human resources and administration 92) Typical sources of benchmarking information include 92) A) willing rival firms B) creditors, shareholders, and lobbyists C) suppliers, distributors, customers, and partners D) published reports and trade publications E) all the above 93) The International Benchmarking Clearinghouse provides guidelines to help prevent which of the following improper business activities? 93) A) Price fixing B) Bid rigging C) Restraint of trade D) Bribery E) All the above 94) Which of the following is the first step in developing an IFE Matrix? 94) A) Summing the weighted scores for each variable B) Determining the organization's structure C) Identifying the organization's functions of business D) Identifying the organization's strengths and weaknesses E) Determining the lead strategist 95) The IFE Matrix should be in multidivisional firms 95) A) constructed for each division B) developed before the EFE Matrix C) revised monthly D) all-inclusive E) constructed only for the major divisions ESSAY Write your answer in the space provided or on a separate sheet of paper 96) Explain the resource-based view and its relation to strategic management 97) Identify and give an example of six cultural products 98) Identify any five differences when comparing Arab versus other cultures 99) Discuss the five steps involved in performing an IFE Matrix 1) FALSE 2) FALSE 3) TRUE 4) TRUE 5) FALSE 6) TRUE 7) FALSE 8) TRUE 9) TRUE 10) TRUE 11) FALSE 12) TRUE 13) TRUE 14) A 15) FALSE 16) FALSE 17) FALSE 18) TRUE 19) FALSE 20) FALSE 21) TRUE 22) FALSE 23) TRUE 24) FALSE 25) TRUE 26) FALSE 27) TRUE 28) TRUE 29) FALSE 30) TRUE 31) FALSE 32) TRUE 33) TRUE 34) FALSE 35) TRUE 36) FALSE 37) TRUE 38) TRUE 39) TRUE 40) TRUE 41) TRUE 42) TRUE 43) FALSE 44) TRUE 45) TRUE 46) FALSE 47) FALSE 48) FALSE 49) TRUE 50) TRUE 51) FALSE 52) FALSE 53) TRUE 54) TRUE 55) FALSE 56) TRUE 57) FALSE 58) FALSE 59) TRUE 60) TRUE 61) FALSE 62) TRUE 63) FALSE 64) FALSE 65) TRUE 66) E 67) C 68) D 69) B 70) B 71) B 72) C 73) E 74) D 75) B 76) C 77) B 78) A 79) B 80) A 81) E 82) D 83) C 84) C 85) E 86) E 87) A 88) A 89) C 90) C 91) B 92) E 93) E 94) D 95) A 96) The resource-based view (RBV) approach to competitive advantage contends that internal resources are more important than external factors for a firm in achieving and sustaining competitive advantage, in contrast to the I/O theory According to this view, organizational performance is determined by physical resources, human resources and organizational resources RBV theory asserts that resources are actually what help a firm exploit opportunities and neutralize threats The theory also asserts that in order to maintain a competitive advantage, a resource must either be rare, not easily substitutable, or hard to imitate The RBV has continued to grow in popularity and continues to seek a better understanding of the relationship between resources and sustained competitive advantage 97) Student answers will vary However, they should include and give examples for any of the following rites, ceremonial, ritual, myth, saga, legend, story, folktale, symbol, language, metaphors, values, belief and heroes/heroines These products are explained further in Table 4-1 on page 121 98) Page 124 gives 14 differences between Arab and U.S managers 99) The first step is to list ten to twenty internal factors, including strengths and weaknesses using percentages, ratios and comparative numbers The second step is to assign a weight that ranges from 0.00 (not important) to 1.0 (all-important) to each factor based on its relative importance The third step is to assign a to rating to each factor to indicate whether that factor represents a major weakness, a minor weakness, a major strength, or a minor strength Next, multiply each factor's weight by its rating to determine a weighted score for each variable Finally, sum the weighted scores for each variable to determine the total weighted score for the organization ... contrast to the I/O theory According to this view, organizational performance is determined by physical resources, human resources and organizational resources RBV theory asserts that resources... Environmental scanning 69) The internal resource categories used in the resource-based approach are physical resources, human resources and 69) A) financial resources B) organizational resources... than their American counterparts on preparation and planning platforms C) As a sign of respect, Arabs tend to stand approximately meter from their counterparts when engaged in business conversations