Business Policy
Midterm Exam
Course Introduction
Business Policy explores the formulation, implementation, and evaluation of strategies that enable organizations to achieve their objectives within a competitive environment. The course emphasizes the integration of knowledge from various business disciplines such as marketing, finance, operations, and human resources to make effective, holistic decisions. Students examine real-world cases to analyze external and internal factors affecting businesses, develop strategic plans, and address challenges related to ethical practices, corporate governance, and social responsibility. Through collaborative projects and critical thinking exercises, learners gain the skills required to assess strategic options and recommend actionable policies for sustainable organizational success.
Recommended Textbook
Strategic Management Concepts and Cases Competitiveness 12th Edition by Michael
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A. Hitt
Chapter 1: Strategic Management and Strategic Competitiveness
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133 Verified Questions
133 Flashcards
Source URL: https://quizplus.com/quiz/3850
Sample Questions
Q1) A competitive advantage:
A) can be permanent if the firm has successfully implemented the strategic management process.
B) entails reducing investors' risk to near zero.
C) can be identified when competitors are unable to duplicate or find it too costly to try to imitate.
D) exists when competing firms are unable to find investors.
Answer: C
Q2) In the resource-based model, which of the following factors would be considered a key to organizational success?
A) Unique market niche
B) Weak competition
C) Economies of scale
D) Skilled employees
Answer: D
Q3) Relative power is the most critical element for prioritizing the demands of stakeholders.
A)True
B)False
Answer: True
Page 3
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Chapter 2: The External Environment: Opportunities,
Threats, Industry Competition, and Competitor Analysis
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138 Verified Questions
138 Flashcards
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Sample Questions
Q1) The bankruptcy filings by General Motors and Chrysler Corporation during the Great Recession illustrate that firms cannot directly control the general environment's segments.
A)True
B)False
Answer: True
Q2) High-level maintenance on aircraft is performed by the manufacturer. This service after the sale means that in the aircraft industry:
A) customers are relatively weak because of the high switching costs created by frequent-flyer programs.
B) the industry is moving toward differentiation of services.
C) the competitive rivalry in the industry is severe.
D) the economic segment of the external environment has shifted, but airline strategies have not changed.
Answer: C
Q3) The external environment facing business stays relatively constant over time. A)True
B)False
Answer: False
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133 Verified Questions
133 Flashcards
Source URL: https://quizplus.com/quiz/3852
Sample Questions
Q1) Which of the following is TRUE about outsourcing?
A) Outsourcing allows firms to be more flexible and requires minimal coordination.
B) Outsourcing allows firms to concentrate on those areas in which they can create value.
C) Outsourcing strengthens the creative and innovative functions within the firm.
D) Outsourcing is effective only when it includes all support activities.
Answer: B
Q2) A local restaurant, Farm Fresh Ingredients, has become highly successful through its menu, based solely on organically raised chicken and beef, and organic seasonal produce. It has opened new locations in other cities, and these new locations are becoming highly profitable. Farm Fresh can expect that, at best, its competitive advantage will be:
A) permanent.
B) sustainable.
C) temporary.
D) defensible.
Answer: C
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Chapter 4: Business-Level Strategy
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131 Verified Questions
131 Flashcards
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Sample Questions
Q1) Walmart's actions to become more upscale with the aim of taking sales away from Target provided an opening for competitors such as Amazon and Family Dollar to better compete on the basis of price and attract some of Walmart's customers.
A)True
B)False
Q2) One of the benefits of the integrated cost leadership/differentiation strategy is that it is less risky than either the cost leadership or differentiation strategies.
A)True
B)False
Q3) Companies without core competencies in their value chain activities and support functions are still able to successfully implement either a cost leadership or a differentiation strategy, although they cannot implement an integrated cost leadership/differentiation strategy.
A)True
B)False
Q4) Discuss how a cost leadership strategy can allow a firm to earn above-average returns in spite of strong competitive forces. Address each of the five competitive forces.
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6
Chapter 5: Competitive Rivalry and Competitive Dynamics
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107 Verified Questions
107 Flashcards
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Sample Questions
Q1) Bubble-Up, Inc., is a small manufacturer of educational toys for children under age 10. It has co-existed with three other competitors in the educational toy industry for over 20 years, each of them maintaining a stable market share. There is a wide-spread rumor that Mega-Toy, Inc., the market leader in the broad children's toy market, has decided to target educational toys. Which one of these statements is most likely TRUE?
A) The owners of Bubble-Up are unconcerned about Mega-Toy's entry to the market because of the resource dissimilarity between the firms.
B) Bubble-Up's greater organizational slack will allow it to aggressively attack Mega-Toy.
C) Bubble-Up's smaller size may make it more flexible in introducing innovations than Mega-Toy.
D) Competitive rivalry will not increase for Bubble-Up because Mega-Toy is not dependent on the educational toy market.
Q2) Extensive market commonality guarantees intense competition in an industry.
A)True
B)False
Q3) What factors contribute to the likelihood of a response to a competitive action?
Q4) Define slow-cycle, fast-cycle, and standard cycle markets.
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7
Chapter 6: Corporate-Level Strategy
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140 Verified Questions
140 Flashcards
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Sample Questions
Q1) Firms that sold off related units in which resource sharing was a possible source of economies of scope have been found to produce lower returns than those that sold off businesses unrelated to the firm's core businesses.
A)True
B)False
Q2) Companies in emerging markets frequently use the unrelated diversification strategy because of the absence of a "soft infrastructure" in those markets.
A)True
B)False
Q3) Of the value-neutral incentives to diversify, all of the following are internal firm incentives EXCEPT:
A) overall firm risk reduction.
B) uncertain future cash flows.
C) stricter interpretation of antitrust laws.
D) low performance.
Q4) Differentiate between corporate-level and business-level strategies and give examples of each.
Q5) What are the five categories of businesses based on level of diversification?
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Chapter 7: Merger and Acquisition Strategies
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131 Verified Questions
131 Flashcards
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Sample Questions
Q1) Top managers typically become overly focused on acquisitions because only they can perform most of the tasks involved, such as performing due diligence on the target firm.
A)True
B)False
Q2) The current Chinese cross-border strategy is to focus on buying global brands, sales networks, and goodwill in branded products.
A)True
B)False
Q3) What are the attributes of a successful acquisition program?
Q4) Compared with downsizing, ____ has (have) a more positive effect on firm performance.
A) reconfiguring
B) downscoping
C) leveraged buyouts
D) acquisitions
Q5) How difficult is it for merger and acquisition strategies to create value and which firms benefit the most from M & A activity?
Q6) Describe the seven problems in achieving a successful acquisition.
Page 9
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Chapter 8: International Strategy
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Sample Questions
Q1) Skaredykat Inc. is considering initial expansion beyond its home market. The firm has decided not to enter markets that differ greatly from its home market, instead expanding within the twelve-nation region that includes its home country. Which one of these is true?
A) The firm is not engaging in international trade.
B) The firm is using a regional approach to international expansion.
C) The firm will not be able understand the cultures, legal, and social norms of this market.
D) Skaredykat is too afraid to implement an international strategy.
Q2) The benefits of expanding into international markets include each of the following opportunities EXCEPT:
A) increasing the size of the firm's potential markets.
B) economies of scale and learning.
C) location advantages.
D) favorable tax concessions and economic incentives by home-country governments.
Q3) The chief risks in the international environment are political and cultural.
A)True
B)False
Q4) Discuss the effect of international diversification on a firm's returns.
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Chapter 9: Cooperative Strategy
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Sample Questions
Q1) An alliance can be used to test whether the partners would benefit from a future merger.
A)True
B)False
Q2) Tacit collusion tends to be least used as a business-level, competition-reducing strategy in highly concentrated industries such as airlines and breakfast cereals even though it results in higher prices for consumers.
A)True
B)False
Q3) Dynamic alliance networks work best in industries:
A) characterized by frequent product innovations and short product life cycles.
B) that are mature and stable in nature.
C) where the coordination of product and global diversity is critical.
D) that are characterized by predictable market cycles and demand.
Q4) Firms entering into synergistic strategic alliances expect to attain:
A) technological complexity.
B) economies of scope.
C) monopolistic market power.
D) learning curve efficiencies.
Q5) Describe the two strategic management approaches to managing alliances.
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Chapter 10: Corporate Governance
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142 Flashcards
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Sample Questions
Q1) The separation between firm ownership and management creates a(n) ____ relationship.
A) governance
B) control
C) agency
D) dependent
Q2) German executives are not dedicated to the maximization of shareholder value to the degree that is the case for executives in the UK and United States largely because:
A) the roles of CEO and chairperson of the Board of Directors are usually combined.
B) large institutional investors control large blocks of stock.
C) private shareholders and large institutional investors rarely have large ownership positions in firms.
D) of the focus on stewardship-management in German firms rather than the financial performance focus of U.S. firms.
Q3) How does corporate governance foster ethical strategic decisions and how important is this to top-level executives?
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Chapter 11: Organizational Structure and Controls
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Sample Questions
Q1) Jumbo Industrial Supply has grown from a one-location firm with a restricted product line to a multi-state organization with numerous product lines and a large sales staff. Sales have doubled every year for the last three years. It currently has a simple structure with Jared Smith, the owner-manager, making all major decisions. Jumbo is probably now experiencing or will soon experience:
A) coordination and control problems.
B) bureaucratic inefficiencies.
C) excessive competition among division managers.
D) limited communication among functional specialists.
Q2) One reason why a long-tenured top-level manager may hesitate to conclude the firm's structure is a problem is that doing so:
A) indicates to competitors that the firm is vulnerable to a hostile takeover.
B) will only lead to inefficiencies.
C) requires that the firm undertake a multi-year restructuring period that will delay retirement.
D) suggests that the firm's previous choices were not the best ones.
Q3) There are three variations of the multidivisional structure.
A)True
B)False
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Page 13
Chapter 12: Strategic Leadership
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118 Flashcards
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Sample Questions
Q1) A CEO's breadth of knowledge base is constrained by:
A) his or her relationship with the Board of Directors.
B) whether he or she is also the chairperson of the Board of Directors.
C) his or her long tenure with the firm.
D) the level of social capital in the firm.
Q2) Competitive aggressiveness, proactiveness, risk aversion, innovativeness, and autonomy are the five dimensions characterizing the entrepreneurial mind-set.
A)True
B)False
Q3) To influence employees' judgment and behavior, ethical practices must shape the firm's decision-making process, but should be a peripheral part of organizational culture.
A)True
B)False
Q4) The goal of investing in human capital is to:
A) increase the number of employees in the firm.
B) reduce organizational slack.
C) maximize current productivity per employee.
D) develop a workforce capable of continuous learning.
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14
Chapter 13: Strategic Entrepreneurship
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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) Research suggests that _________ is needed to encourage entrepreneurial behavior.
A) individualism rather than collectivism
B) a balance between individualism and cooperative behavior
C) collectivism rather than individualism
D) limited autonomy and incentives
Q2) What is the importance of international entrepreneurship?
Q3) ____ exist(s) when there is a need in the market that can be satisfied by new goods or services.
A) Potentiality
B) Market readiness
C) Entrepreneurial opportunities
D) Critical core competencies
Q4) The essence of entrepreneurship is to capture most of the existing markets from less aggressive and innovative competitors.
A)True
B)False
Q5) Describe the three strategic approaches used to produce and manage innovation: internal corporate venturing, cooperative strategies, and acquisitions.
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