Question 1

Identify four components of a firm's organization that are relevant to the question of organization and discuss what role they play in building a competitive advantage.

Accepted Answer

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Question 2

LaserTech's new technology is an example of
A) financial resources.
B) physical resources.
C) human resources.
D) organizational resources.

Accepted Answer

LaserTech's new technology refers to a physical resource, which includes the tangible assets such as machinery, equipment, and technology used by the company. It does not involve financial resources, human resources, or organizational resources.

Question 3

Identify the four broad categories that a firm's resources and capabilities can be classified into.

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Question 4

The fact that it would be would be difficult and costly for firms to match Bates' capabilities in the tool industry indicates that these capabilities are
A) imperfectly imitable.
B) casually ambiguous.
C) substitutable.
D) perfectly imitable.

Accepted Answer

The fact that it would be difficult and costly for firms to match Bates' capabilities in the tool industry indicates that these capabilities are imperfectly imitable, meaning that they cannot be easily replicated by competitors.

Question 5

LaserTech's new technology appears to be
A) valuable and rare but not costly to imitate.
B) valuable and either rare or costly to imitate.
C) valuable but neither rare nor costly to imitate.
D) valuable, rare and costly to imitate.

Accepted Answer

The passage states that LaserTech's new technology is "unique, rare, and valuable" and that it took years of research and development to create. Additionally, it is mentioned that they have a patent on the technology, which implies that it would be costly for other companies to imitate. Therefore, the technology is valuable, rare, and costly to imitate.

Question 6

The reward system Bates uses to encourage employees to find ways to reduce costs is an example of a(n)
A) sustained distinctive competence.
B) informal management control.
C) formal reporting structure.
D) compensation policy.

Accepted Answer

The reward system used by Bates to encourage employees to find ways to reduce costs is directly related to compensation policy. By offering incentives to employees who identify cost-saving measures, Bates is providing a form of compensation that is directly linked to job performance. This type of system is a common means of motivating employees to engage in behaviors that are aligned with company goals, and it falls under the category of compensation policy.

Question 7

Identify and describe the two fundamental assumptions about the resources and capabilities that firms may control that the RBV rests on.

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Question 8

Bates' culture is an example of a(n)
A) informal management control.
B) formal management control.
C) compensation policy.
D) formal reporting structure.

Accepted Answer

The passage describes Bates' culture as being characterized by "informal interpersonal relationships" and a "sense of teamwork and camaraderie," indicating that management control is informal rather than formal.

Question 9

The inability of rivals to develop or acquire technology similar to that of LaserTech is an illustration of
A) resource immobility.
B) resource heterogeneity.
C) causal ambiguity.
D) path dependence.

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Question 10

If one of LaserTech's rivals were to decide to divest its industrial laser manufacturing business in response to LaserTech's new technology, this would be an example of
A) competitive dynamics.
B) tacit collusion.
C) a sustainable distinctive competence.
D) competitive parity.

Accepted Answer

This scenario represents competitive dynamics, which refers to the actions and responses of competitors in a market. In this case, LaserTech's new technology has disrupted the competitive environment, causing one of its rivals to divest their industrial laser manufacturing business in order to adjust to the new reality. This is an example of competitive behavior driven by changing market conditions.

Question 11

Describe the difference between resources and capabilities.

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Question 12

Identify the four questions represented in the VRIO framework that one must ask about a resource or capability to determine its competitive potential.

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Question 13

The budgeting and reporting activities that Bates uses are examples of
A) informal management controls.
B) formal reporting structures.
C) formal management controls.
D) primary value chain activities.

Accepted Answer

The budgeting and reporting activities are part of formal management controls that help establish policies and procedures to ensure that the organization's goals and objectives are met. These controls involve the use of formalized systems and procedures to monitor and measure performance against predetermined goals and objectives.

Question 14

It would be costly for competitors to duplicate Bates due to
A) path dependence and causal ambiguity.
B) causal ambiguity and unique historical conditions.
C) path dependence and unique historical conditions.
D) causal ambiguity and patents.

Accepted Answer

Path dependence and unique historical conditions make it difficult for competitors to duplicate Bates. Path dependence refers to the fact that past decisions and events affect current and future choices. Unique historical conditions specifically refer to the fact that Bates' success is partly due to the unique environment in which it was established and operates, which cannot be easily replicated by competitors.

Question 15

Identify two forms of imitation and describe four sources of costly imitation.

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Question 16

Discuss whether a firm must be must be the only one to possess a valuable resource or capability in order for the firm to benefit from the resource or capability's rarity or if other firms may own it as well.

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Question 17

Define the nature of competitive dynamics and identify three reasons why a firm might not respond to another firm's competitive advantage.

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Question 18

If LaserTech's new technological development were due to proprietary investments the company made when it was first founded twenty years ago, this would be an example of
A) social complexity.
B) tacit collusion.
C) path dependence.
D) causal ambiguity.

Accepted Answer

Path dependence refers to a situation where past decisions and events have a significant impact on the current state of affairs, potentially limiting future possibilities. In this case, LaserTech's proprietary investments made twenty years ago have influenced its current technological development, indicating a path-dependent outcome.

Question 19

Discuss the questions underlying the VRIO framework and use these questions to differentiate between a simple distinctive competence and a sustained distinctive competence.

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Question 20

Define the concept of a value chain and distinguish between two commonly used value chain models.

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Quiz 3: Evaluating a Firms Internal Capabilities

Identify four components of a firm's organization that are relevant to the question of organization and discuss what role they play in building a competitive advantage.

LaserTech's new technology is an example of

Identify the four broad categories that a firm's resources and capabilities can be classified into.

The fact that it would be would be difficult and costly for firms to match Bates' capabilities in the tool industry indicates that these capabilities are

LaserTech's new technology appears to be

The reward system Bates uses to encourage employees to find ways to reduce costs is an example of a(n)

Identify and describe the two fundamental assumptions about the resources and capabilities that firms may control that the RBV rests on.

Bates' culture is an example of a(n)

The inability of rivals to develop or acquire technology similar to that of LaserTech is an illustration of

If one of LaserTech's rivals were to decide to divest its industrial laser manufacturing business in response to LaserTech's new technology, this would be an example of