Corporate Strategy
Pre-Test Questions
Course Introduction
Corporate Strategy explores the frameworks, tools, and analytical approaches that guide organizations in making decisions about their overarching direction and the allocation of resources to achieve long-term objectives. This course covers topics such as competitive advantage, diversification, mergers and acquisitions, strategic alliances, and global strategy, equipping students with the skills to assess complex business environments and formulate cohesive strategies. Emphasizing real-world case studies, students learn to critically evaluate the corporate landscape, identify growth opportunities, and navigate challenges posed by dynamic markets and technological change. Recommended Textbook
Strategic Management and Competitive Advantage Concepts and Cases 5th Edition by Jay
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B.
Chapter 1: What Is Strategy and the Strategic Management Process
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Sample Questions
Q1) Emergent strategies are only important when a firm fails to implement the strategic management process effectively.
A)True
B)False
Answer: False
Q2) A firm's mission defines both what it wants to be in the long run and what it wants to avoid in the meantime.
A)True
B)False
Answer: True
Q3) Strategic choices are generally limited to very experienced senior managers in large corporations; in smaller and entrepreneurial firms, many employees end up being involved in the strategic management process.
A)True
B)False
Answer: True
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Chapter 2: Evaluating a Firms External Environment
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Sample Questions
Q1) The ________ consists of broad trends in the context in which a firm operates that can have an impact on a firm's strategic choices.
A) micro-environment
B) general environment
C) task environment
D) internal environment
Answer: B
Q2) Firms pursuing a harvest strategy in a declining industry do not expect to remain in the industry over the long term.
A)True
B)False
Answer: True
Q3) In the structure-conduct-performance model, the term "performance" refers solely to the performance of individual firms.
A)True
B)False
Answer: False
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Chapter 3: Evaluating a Firms Internal Capabilities
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Sample Questions
Q1) The budgeting and reporting activities that Bates uses are examples of
A) informal management controls.
B) formal reporting structures.
C) formal management controls.
D) primary value chain activities.
Answer: C
Q2) If in the process of maximizing its performance, a firm engages in activities that pollute the environment, the impact of that pollution is a(n)
A) capability.
B) externality.
C) competitive advantage.
D) weakness.
Answer: B
Q3) Compensation policies are the ways that firms pay employees, and such policies create incentives for employees to behave in certain ways.
A)True
B)False
Answer: True
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Chapter 4: Cost Leadership
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Sample Questions
Q1) If Lucy Sullivan were a Sematech manager who oversaw the finance operations in the company's functional structure, Lucy would be considered a
A) chief executive officer.
B) divisional manager.
C) chief operating officer.
D) functional manager.
Q2) Firms implementing cost-leadership strategies will have ________ layers in their reporting structure.
A) many
B) relatively simple
C) relatively few
D) relatively complex
Q3) The quality of relations among labor and management, an organization's culture, and the quality of management controls are all examples of
A) technological hardware.
B) technological software.
C) productive inputs.
D) economies of scale.
Q4) What are the responsibilities of the CEO in a functional organization?
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Chapter 5: Product Differentiation
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Sample Questions
Q1) Firms that are stuck in the middle attempt to sell
A) high-priced products and gain small market share.
B) low-priced products and gain large market share.
C) high-priced products and gain a large market share.
D) medium-priced products and gain medium market share.
Q2) Product features, by themselves, are
A) usually not a source of temporary competitive advantage, but they can be a source of a sustainable competitive advantage.
B) usually not a source of either a temporary competitive advantage, or a source of a sustainable competitive advantage.
C) usually can be a source of both a temporary competitive advantage and a source of a sustainable competitive advantage.
D) usually not a source of sustained competitive advantage, but they can be a source of a temporary competitive advantage.
Q3) Firms selling differentiated products face a horizontal demand curve.
A)True
B)False
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Chapter 6: Vertical Integration
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Q1) A(n) ________ approach to vertical integration suggests that rather than vertically integrating into a business activity whose value is highly uncertain firms should not vertically integrate and instead should form a strategic alliance to manage this exchange.
A) alliance-based
B) flexibility-based
C) firm capabilities-based
D) opportunism-based
Q2) Which of the following is not used to determine a firm's level of vertical integration using the value added as a percentage of sales approach?
A) value added
B) net income
C) sales
D) gross margin
Q3) Identify the three fundamental explanations of how vertical integration can create value and discuss how value is created under each.
Q4) What type of compensation approach goes best with the flexibility explanation of vertical integration?
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Chapter 7: Corporate Diversification
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Sample Questions
Q1) When a firm operates in multiple geographic markets simultaneously it is said to be implementing a product diversification strategy.
A)True
B)False
Q2) Which of the following economies of scope is less costly to duplicate?
A) employee compensation
B) core competencies
C) multipoint competition
D) exploiting market power
Q3) Limits of activity sharing include
A) substantial organizational issues that are often associated with a diversified firm's learning how to manage cross-business relationships and in which failure can lead to excess bureaucracy, inefficiency, and organizational gridlock.
B) a significant reduction in an organization's innovation and flexibility.
C) substantial organizational issues related to adequately compensating personnel across businesses and setting transfer prices.
D) a significant reduction in an organization's ability to meet the needs of any of its customers.
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Chapter 8: Organizing to Implement Corporate Diversification
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Q1) Which organizational structure is SpandoCorp using?
A) U-form
B) matrix
C) M-form
D) functional
Q2) The primary responsibility of the ________ is to provide information about the firm's external and internal environments to the firm's senior executive.
A) corporate staff
B) board of directors
C) division general managers
D) shared activity managers
Q3) Which role in the office of the president is responsible for strategy implementation?
A) chairman of the board
B) chief executive officer
C) chief operating officer
D) chief strategist
Q4) Describe the multidivisional, or M-form structure, and how it is used to implement a corporate diversification strategy.
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Chapter 9: Strategic Alliances
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Q1) Which of the following is a limitation of the reputational control of cheating in a strategic alliance?
A) Subtle cheating in an alliance is likely to become public knowledge.
B) Even if one firm is clearly cheating in an alliance, the other firm may not be sufficiently tied into a network of firms to make this information public.
C) The effect of a tarnished reputation forecloses future opportunities for a firm and it helps reduce the current losses of the firm that was cheated.
D) The reputation of the firm that was impacted by the cheating may be impacted as significantly as the firm that committed the cheating.
Q2) eBay's agreement with the Korean online auction company is best characterized as a(n)
A) licensing agreement.
B) joint venture.
C) equity alliance.
D) distribution agreement.
Q3) Describe five tools that firms can use to reduce the threat of cheating in strategic alliances.
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Chapter 10: Mergers and Acquisitions
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Q1) The value that a bidding firm brings to a target firm through an acquisition should be discounted by the cost of strategizing to implement an acquisition.
A)True
B)False
Q2) In 2011, the total value of mergers and acquisition deals in the United States was $10 trillion.
A)True B)False
Q3) Perhaps the most significant challenge in integrating bidding and target firms has to do with cultural differences.
A)True
B)False
Q4) Free cash flow is simply the amount of cash a firm has to invest after all positive net present-value investments in its ongoing businesses have been funded.
A)True B)False
Q5) How are poison pills different from shark repellents?
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Chapter 11: International Strategies
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Q1) From its organization structure, it appears that Agrestal is attempting to maximize ________ in its operations.
A) local responsiveness
B) strategic coordination
C) operational coordination
D) international integration
Q2) In many ways, the transnational structure is similar to the A) coordinated federation.
B) centralized hub.
C) decentralized federation.
D) decentralized hub.
Q3) Improvements in the ________ infrastructure of business are one of the important contributors to the growth in the number of firms pursuing international strategies.
A) pecuniary
B) cultural
C) technological
D) corporate
Q4) Describe the transnational strategy.
Q5) What is financial risk? How can firms hedge?
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