Question 1

Complementarity research should not be used by a company as an excuse for not adopting a best practice such as a "six-sigma" quality management systems "lean production" manufacturing processes, or a "360-degree" employee appraisal system.

Accepted Answer

False

Question 2

For shareholder value maximization to be a helpful goal for top management it needs to focus not on stock market value but on the fundamental drivers of value.

Accepted Answer

Shareholder value maximization should focus on the long-term fundamental drivers of value such as revenue growth, operating margins, and return on investment rather than short-term fluctuations in stock market value. In the long-term, a focus on these drivers will lead to sustainable value creation for shareholders.

Question 3

In a more complex business environment where companies must pursue multiple dimensions of competitive advantage is consistent with Jim Collins' recommendation that companies should seek to be "hedgehogs" rather than "foxes." (Drawing upon the categorization of intellectuals made by Isaiah Berlin.)

Accepted Answer

Jim Collins, in his book "Good to Great," suggests that companies should strive to be like hedgehogs, focusing on one big thing they can be best at, rather than pursuing multiple dimensions like a fox. This is contrary to the idea of pursuing multiple dimensions of competitive advantage.

Question 4

According to the economist Brian Arthur, the main impact of digital technologies will be the emergence of "external intelligence": intelligence and decision making that existing machines rather than in humans.

Accepted Answer

Brian Arthur argues that digital technologies will lead to the emergence of "external intelligence", which means that machines will make decisions and exhibit intelligence without the involvement of humans.

Question 5

The growth of the freelance economy, in which taxi services, short-term accommodation, and home maintenance is provided by self-employed individuals rather than by firms, has little to do with technology, its mainly due to the preferences of individuals for the flexibility of self-employment over the rigidities of a full-time employment.

Accepted Answer

The growth of the freelance economy is significantly driven by technology, particularly through platforms like Uber, Airbnb, and TaskRabbit, which connect freelancers with customers, making it easier for individuals to offer and find these services.

Question 6

The increasing number of companies delisting from US stock exchanges to become private companies is a response to the increasingly onerous legal responsibilities of public companies and the increasing scrutiny to which they are subject.
public corporations.

Accepted Answer

This statement is true. Many companies are finding it more appealing to become private companies due to the legal responsibilities and scrutiny that come with being a public corporation.

Question 7

The three major societal issues that companies are being forced to address are: fairness, ethics, and sustainability

Accepted Answer

Companies are being held accountable for their actions and impact on society, which includes addressing the issues of fairness, ethics, and sustainability. These issues are becoming increasingly important to consumers and stakeholders who are demanding more socially responsible and sustainable practices from businesses.

Question 8

Among industries based upon digital technologies, the presence of network externalities is critical in determining whether the industry tends towards monopoly or fragmentation.

Accepted Answer

Network externalities refer to the phenomenon in which the value of a product or service increases as more people use it. In industries with strong network externalities, such as social media and operating systems, the presence of a dominant market player can lead to a winner-takes-all scenario, where smaller competitors are unable to gain a foothold. Therefore, network externalities play an important role in determining whether an industry tends towards monopoly or fragmentation.

Question 9

Applying real options thinking to industry analysis implies that industry attractiveness is less about an industry's profit potential and is more concerned with the range of strategic opportunities that an industry offers.

Accepted Answer

Real options thinking focuses on the potential for future strategic opportunities, rather than just current profit potential, when analyzing industry attractiveness. Therefore, option value is an important consideration when applying this type of analysis.

Question 10

"Managing real options" means that firms should take a greater interest in how share option packages are managed, to achieve the best value for shareholders

Accepted Answer

"Managing real options" refers to the process of managing choices or opportunities that a firm has to invest in, expand, or alter its projects or operations in the future, based on the evolving business environment, not to how share option packages are managed.

Question 11

Of the 109 Chinese companies that were members of the Fortune Global 500 in 2018, few were state-owned enterprises.

Accepted Answer

According to the Fortune Global 500 list of 2018, around 85 out of 109 Chinese companies were state-owned enterprises, which means that the majority of Chinese companies on the list were SOEs.

Question 12

The financial crisis of 2008-9, a series of corporate scandals, and increasing inequality have undermined the legitimacy of market capitalism.

Accepted Answer

The statement accurately describes how recent events have led to a questioning of the legitimacy of market capitalism.

Question 13

The complementarity of management practices implies that the effectiveness of a particular management practice depends upon how it fits with all the other management practices of the company.

Accepted Answer

The complementarity of management practices means that they work together and are mutually reinforcing, therefore the effectiveness of a particular management practice depends upon how well it fits with all the other management practices of the company.

Question 14

The current business environment is unusually perplexing and unpredictable because many of the trends of the late 20^th century-internationalism, the spread of constitutional democracy, and faith in market capitalism-have now gone into reverse.

Accepted Answer

The statement accurately reflects the current business environment as many of the trends of the late 20th century have gone into reverse, leading to a perplexing and unpredictable situation.

Question 15

The growing interconnectedness of the world economy and human society cannot be regarded as a contributing factor to the increasing volatility and unpredictability of global environment of business.

Accepted Answer

The growing interconnectedness of the world economy and human society is actually a contributing factor to the increasing volatility and unpredictability of the global environment of business. This interconnectivity creates a ripple effect where events that occur in one region can have significant impacts on other regions, leading to uncertainty and unpredictability in business environments. Additionally, the interconnectivity of global markets often means that risks and challenges faced by one industry or sector can quickly spread to others, further exacerbating volatility and unpredictability.

Question 16

Rising concentration and growing monopoly power in the 21^st century is a feature of mature industries such as beverages, chemicals, and mining.In technology-based sectors, the disruptive effects of digital technologies ensure robust, dynamic competition.

Accepted Answer

The statement is incorrect. The disruptive effects of digital technologies can also lead to concentration and monopoly power in the tech sector with companies like Facebook, Amazon, Google, and Apple (also known as FAANG) dominating their respective markets.

Question 17

Companies such as Toyota, Wal-Mart, 3M, and Samsung have sustained strong performance over long periods of time by basing their competitive advantage on a single core competence.

Accepted Answer

These companies have multiple core competencies as the basis for their sustained strong performance, rather than relying on a single one.

Question 18

The forces reshaping business during the first two decades of the 21st century bear no resemblance to those which reshaped business during the first two decades of the 20th century.

Accepted Answer

The forces reshaping business in both periods include technological advancements, globalization, and shifts in consumer behavior, although the specific technologies and global context may differ.

Question 19

Increasing levels of interconnectedness within a complex, nonlinear systems help to stabilize the impact of potentially disruptive forces.

Accepted Answer

In complex, nonlinear systems, increasing levels of interconnectedness can actually amplify the impact of disruptive forces, making the system more susceptible to cascading failures and unpredictable behavior.

Question 20

The emergence of a multipolar world where the US no longer exercises a dominant role has meant that the "G7" leading economies now collaborate address the world's most pressing economic and environmental problems.

Accepted Answer

The statement is incorrect. The G7 leading economies still hold significant economic and political influence, and the emergence of a multipolar world does not necessarily mean the US no longer exercises a dominant role. Furthermore, the G7 has faced challenges in collaborating effectively to address global issues in recent years.

Quiz 15: Current Trends in Strategic Management