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Bus401 s07 sena exam2

Bus401 s07 sena exam2 - ~8— Bus 401 Test 2 ln—Class...

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Unformatted text preview: ~8— Bus 401 Test 2 ln—Class |IV\V.-\ ‘>' “ V.--.Ivr' Direction: This test is closed notes, closed book. Use only the paper provided with the test handout. You may explain your rationale by writing a comment adjacent to your answer. This will be taken into consideration in evaluating your paper. Chapter 4 True/False Questions «— 1. According to the text, for most of the twentieth century, most managerial efforts were directed toward the efficient allocation of labor and capital — the two traditional factors of production. or False 2. The importance of human capital has decreased in recent years. For this reason, many firms have placed greater attention on attracting, but not on developing or retainin; . ent. True or 3. The more reliance a firm has on intellectual capital, the closer its book value will be to its - .. et value.\\ LQSS T-QllClfice ‘ ‘ | True or 1% 4. Firm's such as E—Bay, Oracle, and Microsoft will tend to have a higher ratio of market value to book value than “industrial companies” such as General Motors and Nucor Steel. @r False —' 5. Many leading companies look for creativity and flexibility in problem solving during the interview process. This helps a firm assess a potential employee's social c ' 1. True org ~ 6. The text suggests that talented professionals are typically most concerned about financial rewards. Money is the top reason why such employees take and leave jobs. A\so cmcerhfd w] values 0? oracumzahm True or. ‘ ‘ " - ' '~ 7. Microsoft has mainly focused on using its inbound logistics and production processes ; in strategic competitive advantage. True or F. Thur Caimgeh‘hfile/ ad «WW—312., (s deriv'ecflr V FYQW «My “94; OF kmwkolée 0696K ~— “thug GHO‘MlAS ‘llwnx A Vrf’W Menage/4% \V\ the \nawgfld. Bus 401 Test 2 Page 1 8. Workforces, which reflect demographic changes, will become more homogeneous (or less varied) over the next few decades with regard to gender, race, ethnicity, and nationalit. “acreage \n aura/Sam m We), True or The “resource acquisition argument” is one of the key rationales for the “value in “thesis. @. w Social 0.1.41 is found in the knowledge, skills, and abilities of individual True [email protected] HUh’fim Ca Pfial . .. 10. 11. Once a knowledge asset (e.g., software) is developed and paid for it can be used many times at very low cost as long as it doesn't have to be substantially modified each time. @or False 12. The role of technology in the recruitment of human capital has lowered individuals' reliance fie use social networks. True or .als $00101 omtmn ghu tm?or5m Mt _ + o? vecrm’mo ru’ 3 S 13. The use of email can be distracting to employees. Some firms limit the time that - -- : oyees spend using email on a given day. @ or False 14. Since electronic teams (e-teams) seldom meet face-to-face, it is n_ot important for them to oncemed with how to combine individual contributions effectively. True or' als . 15. Many firms attempt to codify the tacit knowledge of employees in an effort to retain fiowledge after the employee leaves the firm. ‘ m False Multiple Choice Questions 16. The makeup of goods and services in the Gross DOmestic Products of developed countries has changed over the last decade. More than 50% of the value of GDP of developed countries is based on A) clothing and apparel. B) capital accumulation. C) financial management. @knowledge. Bus 401 Test 2 Page 2 17. man capital includes Q an individual's capabilities, knowledge, and skills. the relationships between people. C) the output from assembly line employees. D) an improved product. 18. can be defined as the “network of relationships that individuals have throughout the organization.” A Human capital Social capital C) Intellectual capital D) Tacit knowledge 19. Tacit knowledge A) is the same as explicit knowledge. B) is found mostly at the lower levels of the organization. @ can be codified but not reproduced. can be accessed only with the consent of the employees because it is in the minds of the employees. 20. New knowledge involves the continual interaction between and knowledge. A) intellectual; pragmatic theoretical; practical tacit; explicit D) detailed; tacit 21. Recently, in developed countries, a knowledge worker's loyalty to his or her employing firm has compared to his or her loyalty to his or her profession and colleagues. increased Q decreased remained the same D) no correlation when 22. According to the text, intellectual capital is the difference between the market value and the book value of a firm. Intellectual capital can be increased by ‘ increasing retention of below average workers. § attracting and retaining knowledgeable workers. ) decreasing labor costs. D) increasing the turnover of employees. Bus 401 Test 2 Page 3 23. Developing human capital is essential to maintaining a competitive advantage in today's knowledge economy. Efforts and initiatives to develop human capital should be directed A) at top managers. B) at human resource departments. C) at the employees themselves. @throughout the firm at all levels. 24. Maintaining a competitive workforce is very challenging in today's economy. The n e of evaluating human capital, in recent years, has ‘ncreased. : decreased. C) become less important. D) remained the same. 25. Generally, employees are most likely to stay with an organization if A) the employer provides high salaries to technology professionals. .the organization's mission and values align with the employee's mission and ' values. C) the firm is in a high tech industry. D) the mission and values of the organization change often. 26. The use of information technology (e. g., e-mail) has increased in recent years in y organizations. This has helped to \A) 'ncrease social capital. " make more effective use of time in every situation. C) restrict social network growth. D) create smaller social networks. 27. The creation of knowledge assets is typically characterized by A) high upfront costs and subsequent high variable costs. B) high fixed costs and high variable costs. low upfront costs and high variable costs. high upfront costs and low variable costs. Chapter 5 True/False Questions 28. Michael Porter's three generic strategies can be depicted on two dimensions: competitivi advantage and product life cycle. True or {rage} W! tQ'i’) Bus 401 Test 2 Page 4 29. Concentrating solely on one form of competitive advantage generally leads to the ,_ 30. highestp ' le level of profitability. True or alse Above average Progtaloih‘h/r l$ Mi" odmeved irmk far ”11 Many firms facing a turnaround situation try to reduce t eir costs by outsourcing roduction of many inputs. or False 21 32. 33. Multip 34. Many firms in the maturity stage of the life cycle bring about their own decline by @tivct and market pruning. 0e? The dec%tage of the industry life cycle stage ififiifitmollowed by death. True or ‘- Fifms can +CLK€ action to rescuer/ate (Mk, \ ‘3 avmd “0‘€0'=i’l""- 63 The two types of innovations addressed in the text are sustaining innovations and disruptive innovations. Disruptive innovations are most likely to benefit incumb 5- Firms aucemhj present are \ikehfio law-G True or ‘.\ benefit Rom Mfg} \nnovnhér\$ wrxercqg le Choice Questions A manufacturing business pursuing cost leadership will likely A) focus on a narrow market segment. @ rely on experience effects to raise efficiency. / 35. C) use advertising to build brand image. D) put heavy emphasis on product engineering. One aspect of using a cost leadership strategy is that experience effects may lead to lower costs. Experience effects are achieved by ‘ hiring more experienced personnel. '5’ repeating a process until a task becomes easier. 36. ) spreading out a given expense or investment over a greater volume. D) competing in an industry a long time. Answer:B Page: 166 Support value chain activities that involve excellent applications engineering support (technology development) and facilities that promote a positive firm ' ge (firm infrastructure) characterize what generic strategy? Differentiation. B) Overall cost leadership. C) Differentiation focus. D) Stuck—in—the middle. /\ Bus 401 Test 2 Page 5 37. All of the following are potential pitfalls of a differentiation strategy except: A) uniqueness that is not valuable. B) too high a price premium. @all rivals share a common input or raw material. D) perceptions of differentiation may vary between buyers and sellers. 38. 'ch statement regarding competitive advantages is true? If several competitors pursue similar differentiation tactics, they may all be perceived as equals in the mind of the consumer. B) With an overall cost leadership strategy, firms need not be concerned with parity on differentiation. C) In the long run, a business with one or more competitive advantages is probably destined to earn normal profits. D) Attaining multiple types of competitive advantage is a recipe for failure. 39. All of the following are potential pitfalls of an integrated overall low cost and differentiation strategy gxcept: ’ A) firms that fail to attain both strategies may end up with neither and become “stuck-in-the—middle.” / (B97 targeting too large a market that causes unit costs to increase. ) underestimating the challenges and expenses associated with coordinating \\ \_ value-creating activities in the extended value chain. .. \\D) miscalculating sources of revenue and profit pools in the firm's industryr... ’_« . Which of the following descriptions of a product in the owth stage is true? A) There are few forms of differentiation, emphasis isipaiace'd on efficiency, and there is a growing trend to compete on the basis of price. @ There is an emphasis on product variety, prices are declining rapidly, and although the firm may be making a profit, cash flows may be negative. C)’ There is an obsolescence of technologies, minimal capital investment is equired, and consumer demand is satiated. here is a tendency to hold on to competitive advantages, pricing can be . volatile, and there is an opportunity to establish strong brand recognition. 41. A market that mainly competes on the basis of price and has stagnant growth is characteristic of what life cycle stage? A) Introduction. B Growth. Maturity. Decline. \Q As markets mature, firms should attempt to compete on the basis of quick response. differentiation. Q ost leadership. /?/ D market focus. Bus 401 Test 2 Page 6 43. As markets mature, A) costs continue to increase. B) application for patents increase. C) differentiation opportunities increase. @ there is increasing emphasis on efficiency. 44. The size of pricing and differentiation advantages between competitors decreases in which stage of the market life cycle? A) Introduction. B Growth. aturity. Decline. 45. Which of the following is most often true of mature markets? A) Some competitors enjoy a significant operating advantage due to increasing experience effects. B) The market supports premium pricing, which attracts additional competitors. @Advantages that cannot be duplicated by other competitors are difficult to achieve. D) The magnitude of pricing differences and product differentiation is larger than in the growth stage. Cha ter 6 True/False Questions 46. Whenever an organization diversifies, it represents investing a stockholder's funds in a way i i hich the individual investor is unable. True or 47. Diversification that results in strengthening the value chain and increasing competitive advantages is the best possible example of investing stockholders' funds in a way that individual investors cannot. @ or False . When firms diversify into unrelated businesses, the primary potential benefits are beri2§ntal elationships, i.e., businesses sharing tangible and intangible resources. a 6 49. Market power refers to cost savings from leveraging core competencies or sharing activitie . ng the businesses in a'corporation. True or Q / \ Bus 401 Test 2 Page 7 50. A newly acquired business must always have products that are similar to the existing businesses' products to benefit from the corporation's core competence. True or {@ Multiple Choice Questions 51. V It may be advantageous to vertically integrate when @ower transaction costs and improved coordination are vital and achievable M through vertical integration. B) the minimum efficient scales of two corporations are different. 8) flexibility is reduced, providing a more stationary position in the competitive environment. D) various segregated specializations will be combined. 52. is when a firm's corporate office helps subsidiaries make wise choices in eir own acquisitions, divestures, and new ventures. \ ) Parenting iB) Restructuring C) Leveraging core competencies D) Increasing market power 53. Portfolio management matrices are applied to what level of strategy? A) Departmental level Business level @ Corporate level D) International level 54. When using a BCG matrix, a business that currently holds a large market share in a rapidly growing market and that has minimal or negative cash flow would be known as a A) cow. B) dog. C) problem child. ® star. 55. In the ECG (Boston Consulting Group) Matrix, a business that has a low market share in an industry characterized by high market growth is termed a A star. (” uestion mark. C) cash cow. D) dog. Bus 401 Test 2 Page 8 56. Corporate-level strategy addresses two related issues: A) how to compete in a given business; the application of technology. fl) what businesses to compete in; how these businesses can achieve synergy. C) how to integrate primary activities; increase shareholder wealth. D) how to improve a firm's infrastructure; how to maintain ethical behavior. 57. Philip Morris bought Miller Brewing and used its marketing expertise to improve Miller's market share. This justification for diversification is best described as A) utilizing common infrastructures. @apitalizing on core competencies. C) reducing corporate risk. D) using portfolio analysis. 58. For a core competence to be a viable basis for the corporation strengthening a new business unit, there are three requirements. Which one of the following is not one of these requirements? A) The competence must help the business gain strength relative to its competition. B) The new business must be similar to existing businesses to benefit from a core competence. C) The collection of competencies should be unique, so that they cannot be easily imitated. @1‘ he new business must have an established large market share. 59. Transaction costs include all of the following costs except A) search costs. B) negotiating costs- C) monitoring costs. agency costs. 60. The three primary means by which a firm can diversify are: @mergers and acquisitions; joint ventures and strategic alliances; internal development B) mergers and acquisitions; differentiation; overall cost leadership C) joint ventures and strategic alliances; integration of value chain activities; acquiring human capital. D) mergers and acquisitions; internal development; differentiation. Bus 401 Test 2 Page 9 ...
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