Question 1

The role of the board of directors in an organizationis to _____.

Accepted Answer

The role of the board of directors is to monitor the actions of the top management team and ensure that stockholders' interests are protected. This involves providing oversight, setting strategic direction, and making key decisions on behalf of the organization, with the aim of maximizing value for shareholders. The other options presented in the question do not accurately reflect the role of the board of directors in an organization.

Question 2

A _____ strategyoccurs when anorganization finds that itscurrent operations are noteffective, and major changesare usually needed torectify the problem.

Accepted Answer

Retrenchment strategy refers to a situation where an organization finds that its current operations are not effective, and major changes are usually needed to rectify the problem. This may involve scaling back, divesting, or restructuring the organization's operations to improve efficiency and profitability. Defender strategy is used when an organization seeks to maintain its position in the market by focusing on its existing products and markets. Focus strategy involves concentrating on a particular niche market or customer segment. Growth strategy involves expanding the organization's operations through market penetration, product development, or diversification. Differentiation strategy involves setting the organization's products or services apart from the competition through unique features or attributes. None of the other strategies are directly associated with addressing operational inefficiencies.

Question 3

In the context of human resource management, companies can establish a competitive advantage by:

Accepted Answer

Hiring the right people who align with the company's values and training them effectively can contribute to a competitive advantage as they can have a positive impact on productivity, customer satisfaction, and innovation. It is widely recognized that employees are a company's most important asset, and investing in their development is critical for success in today's marketplace. The other options, such as implementing a hierarchical management scheme, adopting a universalistic financial strategy, or ignoring the external competitive environment, may not necessarily lead to a competitive advantage. Hiring employees based on intuition can also be risky and subjective.

Question 4

Functional strategies help determine what businesses the firm will operate.

Accepted Answer

Functional strategies focus on how the business will operate, not what businesses it will operate in. The latter is a part of the corporate-level strategy of a firm.

Question 5

The U-form, M-form, and H-form are known to be different organizational designs.

Accepted Answer

The U-form, M-form, and H-form are different models of organizing a company that vary in structure, departmentalization, and communication.

Question 6

Anorganization's _____ is its basic reason for existence.

Accepted Answer

The purpose of an organization is its fundamental reason for existing, outlining the goals and objectives of the organization. While function, strategy, culture, and mission are all important aspects of an organization, they are all ultimately guided by the organization's purpose.

Question 7

A cost leadership strategy is one that focuses on increasing costs and charging high prestige prices.

Accepted Answer

A cost leadership strategy is one that focuses on reducing costs and charging lower prices than competitors while still maintaining profits. This allows the business to gain market share through offering lower prices and potentially driving competitors out of the market.

Question 8

Andy Inc., an electronics firm, decides to own and operate several separate businesses in the consumer durables and food processing sectors.Which of the following strategies is being employed by Andy in this scenario?

Accepted Answer

Andy Inc. is employing the diversification strategy, which involves owning and operating several separate businesses in different sectors to spread the risks and benefits.

Question 9

A(n) _____ strategy deals with determining what businessesa firm will operate.

Accepted Answer

A corporate strategy deals with determining what businesses a firm will operate. The other options refer to specific competitive strategies within a business, such as analyzer, differentiation, and cost leadership, while functional strategy refers to how a specific function within a business will contribute to the overall strategy.

Question 10

Unrelated diversification occurs when an organization expand into products that are similar to its current ones.

Accepted Answer

Unrelated diversification refers to expanding into products or industries that are not related to the current ones.

Question 11

Stability strategy essentially maintains the status quo.

Accepted Answer

Stability strategy focuses on maintaining the current business operations, products, and markets, without significant changes or expansion. It is adopted when a company is satisfied with its current performance and does not want to take a risk in new ventures or markets. Therefore, it essentially maintains the status quo.

Question 12

An agency problem occurs when there is a conflict between the interests of managers and the interests of shareholders.

Accepted Answer

This is correct. An agency problem arises because managers may prioritize their own interests over those of the shareholders they serve. This can result in actions or decisions that benefit managers at the expense of shareholders.

Question 13

Sandra is employed in a fast moving consumer goods(FMCG) company.She is responsible for theoverallstrategic operation of the company.In this case, Sandrais likely to be a part of the:

Accepted Answer

Sandra's responsibility for the overall strategic operation of the FMCG company suggests that she is a part of the top management team, which is responsible for making strategic decisions and setting organizational goals. The focus group and quality circle are typically considered as lower-level teams involved in specific initiatives or projects, whereas the middle management team focuses on implementing the strategies and plans developed by the top management team.

Question 14

A prospectorstrategy works well in an environment where there is little change or uncertainty.

Accepted Answer

A prospector strategy is actually best suited for an environment that is dynamic and uncertain, where there is potential for high returns but also high risk. This type of strategy involves continuously exploring new opportunities and adapting quickly to changes in the market or industry.

Question 15

_____ specifies how an organization intends to manage itself so it can pursue the fulfillment of its purpose.

Accepted Answer

A mission statement is a concise statement that expresses the purpose of an organization and helps guide its decision-making processes. It outlines the goals and objectives of an organization and provides a framework for the development of strategies and tactics to achieve those goals.

Question 16

The sole component of human resource strategy formulation is development strategy.

Accepted Answer

The answer of The sole component of human resource strategy...

Question 17

The top management team in a company usually includes all the shareholders.

Accepted Answer

The top management team in a company typically includes executives and high-level managers, but not necessarily all the shareholders. Shareholders may have a say in major company decisions through voting at shareholder meetings, but they are not typically directly involved in day-to-day management.

Question 18

Shaun, the regional head of a pharmaceutical company, prepares a presentation on how the firm will compete in the global market with its competitors.Shaun concludes that the firm will operate at its bestin an environment with relatively littleuncertainty and a high degree of stability.Which of the following strategies is being exemplified by the pharmaceutical company in this scenario?

Accepted Answer

The pharmaceutical company is exemplifying a business strategy by identifying the type of environment in which it can operate effectively in the global market. The other options do not fit the scenario described. Diversification strategy is about entering new markets or industries, turnaround strategy is about reversing decline in a company, functional strategy focuses on specific functional areas like marketing or operations, and growth strategy is about expanding the company's size and revenue.

Question 19

When organizations close operations, shut down factories, terminate employees, and take other actions to scale back current operations, it is referred to as a _____ strategy.

Accepted Answer

A turnaround strategy involves reducing or curtailing current operations in order to overcome financial difficulties and achieve profitability. The other options are not relevant to scaling back operations. Growth strategy involves expanding operations, functional strategy is focused on improving the efficiency of specific functions within the organization, business strategy is a broader plan for achieving organizational goals, and diversification strategy involves expanding into new markets or product lines.

Question 20

The adaptation model assumes that the firm should change its strategies to meet environmental characteristics.

Accepted Answer

The adaptation model proposes that the firm should adapt and adjust its strategies to fit the characteristics of the external environment, such as competitors, customers, suppliers, and regulations. This model emphasizes that environmental factors are often beyond the control of the firm, and thus, it needs to flexibly respond to the changes that occur. Therefore, the firm must be able to learn from the environment and adapt its operations, production, marketing, and innovation strategies accordingly to cope up with the competitive pressures and stay relevant in the market.

Quiz 4: The Competitive Environment