Deck 1: Strategic Management and Strategic Competitiveness

Question 1

A firm has a competitive advantage when it implements a strategy that competitors are able to duplicate or find costly to imitate.

Answer 1

True

Question 2

Employees, managers and non-managers are examples of organisational stakeholders.

Answer 2

True

Question 3

A profit pool includes the total profits earned in an industry at all points along the value chain.

Answer 3

True

Question 4

The resource-based model assumes that differences in resources and capabilities are the basis of a competitive advantage.

Question 5

Above-average returns are returns in excess of what an investor expects to earn from other investments with a similar amount of risk.

Question 6

The risks of participating outside of a firm's domestic country in the global economy are labelled a 'liability of newness'.

Question 7

The I/O model argues that core competencies are the basis of a firm's competitive advantage.

Question 8

Perpetual innovation is a term used to describe how rapidly and consistently new, information-intensive technologies replace older ones.

Question 9

Firms that are capable of successfully competing in global markets may not need to worry about their home markets.

Question 10

When products become somewhat indistinguishable because of the widespread and rapid diffusion of technologies, speed to market may be the primary source of competitive advantage.

Question 11

Knowledge is a critical organisational resource and an increasingly valuable source of competitive advantage.

Question 12

Strategic competitiveness is achieved when a firm successfully formulates and implements a value-creating strategy.

Question 13

Strategic flexibility is a set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment.

Question 14

A core competency is the capacity for a set of resources to perform a task or an activity in an integrative manner.

Question 15

Organisational culture refers to the core values shared by a firm's managers but not necessarily by its lower-level employees.

Question 16

The industrial organisation (I/O) model suggests that above-average returns are earned when firms implement a strategy dictated by the characteristics of the general, industry and competitor environments.

Question 17

Organisational stakeholders are a firm's internal resources, capabilities and core competencies that are used to accomplish what may at first appear to be unattainable goals in the competitive environment.

Question 18

A firm's mission tends to be enduring while its vision can change in view of changing environmental conditions.

Question 19

Customers, suppliers, unions and local governments are examples of capital market stakeholders.

Question 20

A strategy is a coordinated set of actions designed to exploit core competencies and gain a competitive advantage.

Question 21

Returns are often measured by:

A)the level of innovation within the organisation
B)the firm's stock price
C)the number of industries in which the firm participates
D)the number of customers the organisation serves

Question 22

Which of the following is not a risk of globalisation?

A)the amount of time required to learn how to compete in unfamiliar markets
B)increased diversity in the workforce
C)over-diversification internationally beyond capabilities to manage operations
D)new rules of law and governance

Question 23

Determining the boundaries of an industry has become challenging in the twenty-first-century competitive landscape because:

A)firms can have multi-use resources at their disposal
B)firms have become single-entity enterprises
C)managers have adopted a new mind-set to capture the realities of the landscape
D)firms transfer their core competencies across geographic borders

Question 24

Which of the following are the three key categories of firm resources?

A)Physical, knowledge and organisational
B)Physical, human and organisational
C)Physical, technological and human
D)Physical, technological and reputational

Question 25

To be strategically flexible on a continuing basis and to gain the competitive benefits of such flexibility, a firm has to develop the capacity to:

A)understand customer needs
B)learn
C)work closely with suppliers
D)observe competitors carefully

Question 26

Which of the following is not a characteristic of hypercompetition?

A)competition to generate more customers from underdeveloped markets
B)competition to protect or invade established product or geographic markets
C)competition to create new know-how and establish first-mover advantage
D)price-quality positioning

Question 27

A firm has a competitive advantage when:

A)the value-creating strategy is in the formulation stage
B)competitors are simultaneously implementing the strategy
C)competitors are not able to duplicate the strategy
D)average returns are earned by the company

Question 28

The I/O model argues that:

A)internal resources and capabilities represent the foundation for the development of a value-creating strategy
B)firms should seek to maximise their returns by structuring their organisation in a manner consistent with the most efficient producers in any given industry
C)the conditions and characteristics of the external environment are the primary inputs to and determinants of strategy
D)internationalisation in certain industries will lead to globalisation

Question 29

The resource-based model of the firm contends that:

A)resources that are valuable, rare, costly to imitate and non-substitutable form the basis of a firm's competitive advantage
B)the key to competitive success is the structure of the industry in which a firm competes
C)resources have the potential to be the basis of sustained competitive advantage
D)competencies are not a source of potential competitive advantage

Question 30

A business-level strategy describes a firm's actions designed to exploit its resources and capabilities.

Question 31

Research findings support the I/O model, in that approximately ________ of a firm's profitability can be explained by the industry in which it chooses to compete.However, this research also shows that ________ of the variance in profitability could be attributed to the firm's characteristics and actions.

A)24 per cent; 40 per cent
B)22 per cent; 42 per cent
C)20 per cent; 36 per cent
D)26 per cent; 38 per cent

Question 32

The strategic management process is:

A)a set of activities that is guaranteed to prevent organisational failure
B)a process concerned with a firm's resources, capabilities and competencies, but not with conditions in its external environment
C)a set of activities that have not been used successfully in the not-for-profit sector
D)a dynamic process involving the full set of commitments, decisions and actions related to a firm

Question 33

The resource-based view of the firm:

A)suggests that resources, rather than capabilities, are more closely linked with sustainable competitive advantage
B)argues that the industry environment has a stronger influence on a firm's ability to implement strategies successfully than the competitor environment
C)calls for firms to focus on their homogeneous skills to compete against their rivals
D)assumes that resources may not be mobile across firms

Question 34

Capital market stakeholders include:

A)unions
B)employees
C)shareholders
D)government regulators

Question 35

Product market stakeholders include a firm's customers.The principal concern of this stakeholder group is:

A)maximising the firm's return on investment
B)providing a stimulating career environment for employees
C)obtaining reliable products at the lowest possible price
D)increasing the profitability of the firm

Question 36

A strategic mission:

A)is based on the application of strategic vision
B)is a firm's attempt to establish new businesses
C)does not limit the firm by specifying the industry in which the firm intends to compete
D)is developed before a firm develops its strategic intent

Question 37

A vision statement should be clearly tied to:

A)the stakeholders' expectations on return on investment
B)the firm's unique resources and capabilities
C)the conditions of the industry in which the firm operates
D)the conditions in the firm's external and internal environments

Question 38

Corporate-level strategy is concerned with how a diversified firm competes in each industry in which it is active.

Question 39

A statement that articulates the ideal description of an organisation and gives shape to its intended future is a:

A)strategic mission
B)strategic vision
C)strategic idea
D)strategic objective

Question 40

What has a firm achieved when it successfully formulates and implements a value-creating strategy?

A)Strategic competitiveness
B)A permanently sustainable competitive advantage
C)Substantial returns
D)Average returns

Question 41

A business-level strategy describes:

A)the businesses in which a company intends to compete
B)all policies and procedures used in functional departments
C)a firm's actions to exploit its competitive advantage over rivals
D)a firm's resources, intent and mission

Question 42

How does knowledge contribute to the competitive standing of an organisation? Is knowledge a tangible or intangible resource of the organisation?

Question 43

Strategic management and choices made when designing and using the strategic management process are driven by the:

A)need to attain returns
B)pursuit of competitiveness
C)actions of employees
D)firm's strategic standards

Question 44

Who are strategic leaders and what determines the effectiveness of their work?

Question 45

Describe and discuss the resource-based model of above-average returns.

Question 46

Strategic leaders are:

A)the CEO and top-level managers of a firm
B)people who are affected by a firm's performance and who have claims on its performance
C)the individuals and groups who have invested capital in a firm in the expectation of earning positive return on their investment
D)people located in different parts of the firm using the strategic management process to help the firm reach its vision and mission

Question 47

Describe and discuss strategic vision and strategic mission.

Question 48

What is globalisation? What are the benefits and risks for an organisation operating in a global marketplace?

Question 49

Organisational stakeholders are usually satisfied when:

A)their return on investment has been maximised
B)customers pay the highest sustainable price for the goods and services they receive
C)companies are willing to be longer-term employers
D)companies are growing and helping individuals develop their skills

Question 50

What are some of the effects that technology and technological changes have on the competitive landscape?

Question 51

In a diversified firm, corporate-level strategy is concerned with:

A)operating each individual business
B)determining how each functional department of the firm will operate
C)determining in which businesses to compete and how resources will be allocated between businesses
D)maximising product distribution over rivals

Question 52

Generally speaking, product market stakeholders are satisfied when:

A)a firm's profit margin yields the lowest return to capital market stakeholders that is acceptable to them
B)a firm's profit margin yields an above-average return to its capital market stakeholders
C)the interests of a firm's organisational stakeholders have been maximised
D)a firm grounds its operations in the principles of the resource-based view of the firm rather than the principles of the I/O model

Question 53

Describe the steps of the strategic management process.

Question 54

Which of the following is not a step in identifying profit pools?

A)Define the pool's boundaries.
B)Estimate the pool's overall size.
C)Estimate the pool's effect on current activities.
D)Estimate the size of the value-chain activity in the pool.
E)Reconcile the calculations.

Question 55

Describe an organisation's various stakeholders and their different interests.

Question 56

The work of effective strategic leaders is characterised by:

A)ambiguous decision situations
B)high income levels
C)a high level of certainty in the organisation
D)a lack of ability to affect the firm's direction

Question 57

Describe the industrial organisation (I/O) model of strategy.

Question 58

Organisational culture is:

A)an appreciation for the arts in the organisation
B)an organisation's ability to act in a responsible manner towards all of its employees
C)the amount of a firm's social activity in the community
D)the complex set of ideologies, symbols and core values shared by most members of the organisation