Honda's name in automotive segment gave it instant credibility and recognition in the personal watercraft business that it entered, allowing it gain significant market share quickly. This is an example illustrates the advantage of _____________
Answer
- brand sharing
- business process[ANSWER!]
- cost sharing
- skills transfer
A company with good customer service capabilities is making pitches to the customers of rivals that have below average customer service. This is an example of ____________
Answer
- leapfrogging rivals
- attacking the competitive weakness of rivals[ANSWER!]
- attacking market segments where a rival makes big profits
- offering an equally good or better product at a lower price
You are hired as a “management consultant” by a company that is seeking to redesign its organizational structure. In your initial site visit you observe that the company has a number of rules and regulations about work processes, you conclude that the current organizational structure is _________.
Answer
- Normalized
- Formalized[ANSWER!]
- Centralized
- Decentralized
_____________ could be the likely reason(s) for failure of Benz-Chrysler deal
Answer
- Integration difficulties[ANSWER!]
- Low debt
- Lack of industry knowledge
- Innovative technology
Diversification occurs when the firm moves into a new area of business, either by starting the new business from scratch or by acquiring an existing firm
Answer
- True[ANSWER!]
- False
Two conditions for producing industry attractiveness scores are:
a. Deciding on appropriate weights for industry attractiveness measures.
b. Sufficient knowldge to rate the industry on each attractiveness measure.
Answer
- True[ANSWER!]
- False
Firms can overcome costly barriers to entry which may make “start-ups” economically unattractive by undertaking acquisitions.
Answer
- True[ANSWER!]
- False
Toshiba and Samsung form a partnership to develop the next generation of home theater systems. Toshiba owns the majority stake in this venture. This is an example of ________
Answer
- Related diversification
- Joint venture[ANSWER!]
- Equity alliance
- Non-equity alliance
The management of a detergent company acquires a paper napkin company _________________
Answer
- because the detergent company managers have more detailed knowledge of paper napkin company relative to outside investors
- because the detergent company can transfer its core competencies and share activities with the paper napkin company [ANSWER!]
- because the detergent company believes that it can restructure the paper napkin company and add value
- because the detergent company believes that the paper napkin industry is technological intensive and high growth market
You are a manager at a firm that is implementing a new business model, the employees are unhappy with this change and want to persist with the current business model as "they have done it this way for years". Your employees are most likely exhibiting resistance to change due to _____________
Answer
- selective information processing
- habit[ANSWER!]
- economic factors
- group inertia
Proctor & Gamble departmentalizes by Tide, Pampers, Charmin, and Pringles. This is an example of departmentalization by _____.
Answer
- function
- process
- geography
- product [ANSWER!]
A beer company acquiring a company producing salty snacks is an example of related diversification as they both can be distributed through the same channels.
Answer
- True[ANSWER!]
- False
Dow Chemicals and Corning Inc coming together to form a new entity Dow Corning, which both the companies control jointly is an example of ________________
Answer
- merger[ANSWER!]
- acquisition
- equity alliance
- joint venture
You are a manager at a firm and have the responsibility of designing monetary incentive systems for your employees. In order to develop an effective monetary system you would _______________
Answer
- pay your employees monthly bonus based on their productivity rather than pay an annual bonus[ANSWER!]
- pay annual bonus based on productivity rather than pay weekly or monthly bonus
- Make performance bonus a minor piece of the total compensation
- pay all employees the same bonus regardless of their performance
Time Warner's merger with AOL was a failure due to _________
Answer
- lack of strategic fit
- lack of synergies
- lack of resources
- lack of culture fit[ANSWER!]
Assume that you are a CEO of company that manufactures wireless data cards, you would like to balance uncertain cash flows and better manage the business cycles. To achieve these objectives you will _________________
Answer
- Acquire a company that manufactures computer peripherals (e.g., keyboard, mouse etc.)
- Acquire a company that manufactures consumer products (e.g., detergents, shampoo etc.)
- Acquire a company that manufactures wireless (mobile) software
- Acquire a company that manufactures laptops/notebooks [ANSWER!]
A computer manufacturer acquires a software company _____________
Answer
- because it is believed that the computer manufacturer managers have more detailed knowledge of software firm relative to outside investors
- because activities involved in the businesses are similar enough that sharing expertise is meaningful[ANSWER!]
- because the computer manufacturer believes that it can restructure the software firm and add value
- because all computer companies need to have software business
One of the reasons firms undertake acquisitions is to avoid excessive competition
Answer
- True[ANSWER!]
- False
Overt and immediate resistance to change is more difficult to deal than implicit and deferred resistance to change.
Answer
- True
- False[ANSWER!]
You are a management consultant and have been approached by Pro Inc. for strategic advise about entering a new market. Your analysis indicates that learning-curve benefits are negligible. You would advise the management of Pro Inc to __________________
Answer
- quickly enter the new market and attain first mover advantage
- maintain a war chest of cash
- take a wait-and-see approach to see how the market evolves and learn from the experiences of other early movers[ANSWER!]
- launch preemptive strike
Nikon previously used to distribute its camera across the world on their own, now they are partnering with UPS to distribute their camera to customers worldwide. This is an example of ______________
Answer
- joint venture
- equity alliance
- outsourcing[ANSWER!]
- merger
A company manufacturing hair dryers acquires a company that manufactures travel bag. After the acquisition the company consolidates the distribution centers, which results in savings. The benefit of this acquisition is ____________
Answer
- skill transfer
- cost sharing[ANSWER!]
- reverse engineering
- brand sharing
You are an executive in charge of the following business units: radio, perfume, women's handbags, and women's footwear. You have been advised to divest a business that is not a good strategic and resource fit with other businesses. Which business unit will you divest?
Answer
- radio[ANSWER!]
- perfume
- women's handbags
- women's footwear
Merck’s partnership with Amgen to market and distribute a diabetes drug developed by Amgen is an example of __________________
Answer
- Non-equity alliance[ANSWER!]
- Equity alliance
- Joint venture
- Merger
You are a manager of a business unit that generates operating cash flows over and above its internal requirements. Your business unit is an example of ________
Answer
- cash hog
- dog
- cash cow [ANSWER!]
- question mark (?)
L&P Inc gets ideas from their customers, suppliers, and other partners to develop innovative products. This is an example of __________________
Answer
- closed innovation model
- open innovation model[ANSWER!]
- double-loop innovation model
- market-based innovation model
The authority given to a front office assistant at Holiday Inn to change room assignment is an example of _________ organization
Answer
- Formalized
- Normalized
- Decentralized[ANSWER!]
- Centralized
eBay adopted _________ strategy to create and dominate the online auction industry
Answer
- Guerrilla warfare
- Defensive
- Blue ocean[ANSWER!]
- integration
Google's technological know-how and innovation capabilities refined in its Internet search business have aided considerably in the development of Chrome, this is an example of ___________
Answer
- cost sharing
- brand sharing
- skills transfer
- reverse engineering[ANSWER!]
From your analysis of SOA Inc. annual report, you find that no business unit contributes more than 60% to the company's revenues. This indicates that SOA Inc. has low levels of diversification.
Answer
- True
- False[ANSWER!]
Home Depot departmentalizes by bill pay, customer service, and inventory management. This is an example of departmentalization by ____________
Answer
- function[ANSWER!]
- process
- geography
- product
In closed innovation model firm's rely completely on in-house R&D to develop new products
Answer
- True[ANSWER!]
- False
A likely reason that drives an electronic security systems (ESS) company to acquire a paint company is _________________
Answer
- because it is believed that the EES managers have less knowledge of paint company relative to outside investors
- because the EES firm can transfer its core competencies to the paint company
- because the EES firm believes that it can restructure the paint firm and add value[ANSWER!]
- because they are both high technology businesses
Ford Motors and Tata Motors form a partnership to develop a “high performance” hybrid engine, both the firms invest equal amount of equity in this venture. This is an example of _____________
Answer
- Non-equity alliance
- Equity alliance[ANSWER!]
- Related diversification
- Joint venture [?]
One of the drawbacks of strategic alliance is that it is difficult to protect proprietary technologies and trade secrets from partners who are rivals.
Answer
- True[ANSWER!]
- False
iTech Inc. is exploring a new market in which the network effects are high (that is, it is hard to get customers to switch). To attain competitive advantage in this market, iTech must __________
Answer
- enter this market quickly to attain early mover advantage[ANSWER!]
- wait for the market to be fully developed and proven before entering
- adopt late mover strategies
- focus on developing similar products as market leaders
You are a manager at Company A that is seeking to make dramatic improvements, you decide to consolidate four production units into one, automate the design system, and reduce the organizational layers between the top managers and lower-level employees from four to one. You are undertaking ________ to achieve this.
Answer
- Six sigma
- Business process engineering[ANSWER!]
- Reverse engineering
- TQM
Your company publicly announces management's commitment to maintain the company's market share. Your company is _________
Answer
- blocking avenues open to challengers
- using "guerrilla offensive"
- choosing which rivals to attack
- signaling to challengers that retaliation is likely[ANSWER!]
__________ is not the reason that firm managers diversify into new product markets
Answer
- To achieve better returns
- To balance uncertain future cash flows
- To increase risk exposure[ANSWER!]
- To increase managerial compensation
Acquisition of Chrysler by Daimler-Benz is an example of related diversification
Answer
- True
- False[ANSWER!]
__________ is a transaction where two firms agree to integrate their operations on a relatively coequal basis because they have resources and capabilities that together may create a stronger competitive advantage
Answer
- Merger
- Equity alliance
- Non-Equity alliance[ANSWER!]
- Acquisition
A mobile telecommunication company that did not invest in 3G technology and is now leading the market in 4G technology. This is an example of ______________
Answer
- attacking the weakness of rivals
- leapfrogging competitors[ANSWER!]
- developing a product at a lower price
- adopting good ideas from competitors
Your company designs, produces, and markets building products such as bathroom hardware, paints, and cabinets. All of the value chain activities involved with making each type of product is organized into a common entity and each operates as an independent profit center. The organization struicture that your company is utilizing is ____________
Answer
- divisional organizational structure[ANSWER!]
- matrix organizational structure
- rigid organizational structure
- autonomous organizational structure
Nucor manufactures and markets a number of durable products such as paint brushes, bathroom hardware, and photo frames. Nucor utilizes the same distribution center to supply its products to its customers (e.g., Walmart). The advantages of this approach is to attain ______________
Answer
- advantages due to economies of scale by manufacturing a large number of units
- advantages due to economies of scope by using the same process for a large number of different products[ANSWER!]
- advantages due to brand recognition
- advantages of technological transfer
During your visit to a company, you observe that all decisions are made by the upper management. Based on this observation you conclude that the existing organizational structure is _______________.
Answer
- Formalized
- Normalized
- Centralized[ANSWER!]
- Decentralized
A high technology company acquires a company that makes hygiene products, this is an example of unrelated diversification.
Answer
- True[ANSWER!]
- False
You are a consultant to a company that is seeking to make continuous improvements in all aspects of their business, involve and empower all employees, and 100 percent accuracy in performing tasks. You would suggest that the company management adopt ______________ to achieve their objectives
Answer
- Six sigma
- Business process engineering
- TQM[ANSWER!]
- Reverse engineering
You have decided to hire other organizations to perform many of the basic functions of your business. You have hired an accounting firm to keep your records, a recruiting firm to handle human resource functions, and a computer firm to maintain all your systems. To keep costs down, you are looking for other areas in which to outsource operations. You have chosen to operate your business as a _________.
Answer
- matrix organization
- virtual organization [ANSWER!]
- team structure
- boundaryless structure
___________ is not a non-monetary incentive adopted by companies like Nucor to motivate their employees maintaining attractive office space.
Answer
- creating a work atmosphere in which there is genuine caring and mutual respect among the workers.
- Weekly cash bonus[ANSWER!]
- inviting and acting on ideas and suggestions from employees.
- sharing information with employees about strategy, operational measures, and market conditions.
You are a manager at a high technology firm operating in a fast-changing (dynamic) market, in order to successfully operate in such environments it is important that your organization has ____________ .
Answer
- substantive culture
- change-resistant culture
- adaptive culture[ANSWER!]
- insular culture
Many innovative companies are not particularly found of ____________ as it affects their innovation capabilities due to its rigid process.
Answer
- TQM
- six sigma[ANSWER!]
- business process engineering
- incentive systems
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