Corporate Strategy Study Guide Questions
Course Introduction
Corporate Strategy explores how organizations achieve long-term success by making critical decisions about their overall direction, scope, and resource allocation. This course examines foundational concepts such as competitive advantage, diversification, mergers and acquisitions, global strategy, and the alignment of corporate structure with strategic objectives. Students will analyze real-world cases to understand how companies assess internal strengths and external market opportunities, respond to competitive forces, and manage risks to create sustained value. The course equips students with the analytical tools and frameworks necessary to formulate and implement effective corporate-level strategies in dynamic business environments.
Recommended Textbook
Strategic Management Theory An Integrated Approach 11th Edition by Charles W. L. Hill
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Chapter 1: Strategic Leadership: Managing the Strategy-Making Process for Competitive Analysis
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Sample Questions
Q1) Research fmds that leaders who exhibit a high degree of emotional intelligence tend to be significantly less effective than those who do not.
A)True
B)False
Answer: False
Q2) Mike, the CEO of a retail chain, wanted to keep costs low.To set an example for others, he drove his own car and furnished his office with plain, metal desks.In this case, Mike was displaying:
A)commitment.
B)ego.
C)astute use of power.
D)devil's advocacy.
E)autocratic leadership.
Answer: A
Q3) A strategy can be defined as a set of related actions that managers take to increase their company's performance.
A)True
B)False
Answer: True
Page 3
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Chapter 2: External Analysis: The Identification of Opportunities and Threats
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Sample Questions
Q1) The punctuated equilibrium view can be described as a freezing, but not unfreezing, process in an industry's life cycle.
A)True
B)False
Answer: False
Q2) Suppliers are most powerful when the products that they sell have many substitutes.
A)True
B)False Answer: False
Q3) Changes in the characteristics of a population, such as age or race, are irrelevant to the analysis of an industry's macroenvironment.
A)True
B)False Answer: False
Q4) Intense rivalry lowers prices and raises costs.
A)True
B)False
Answer: True
Page 4
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Chapter 3: Internal Analysis: Distinctive Competencies,
Advantage, and Profitability
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Sample Questions
Q1) Absorptive capacity refers to the ability of an enterprise to identify, value, assimilate, and use new knowledge.
A)True
B)False
Answer: True
Q2) The simplest measure of efficiency is:
A)the amount of money the company has to work with in the short term.
B)the ratio of revenues divided by invested capital.
C)the net profit expressed as a percentage of sales.
D)the total costs of producing products.
E)the quantity of inputs that it takes to produce a given output.
Answer: E
Q3) The ratio of net profit to invested capital is known as:
A)return on invested capital.
B)return on sales.
C)capital turnover.
D)cost of goods sold.
E)sales, general, and administrative expenses.
Answer: A
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Chapter 4: Building Competitive Advantage Through
Functional-Level Strategy
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Sample Questions
Q1) The experience curve refers to the:
A)learning by doing technique.
B)company's overall experience in a particular industry.
C)systematic lowering of the cost structure and unit cost reductions.
D)diseconomies of scale caused by inexperienced workers.
E)increases in unit costs experienced over time.
Q2) Identify the two dimensions of quality and describe how companies can achieve them.
Q3) Six Sigma is a quality and efficiency program derived from the concept of Total Quality Management, and was widely used in Japan before acceptance in the U.S.
A)True
B)False
Q4) One of the primary roles of human resources in achieving superior efficiency is:
A)facilitating cooperation among various value creation functions.
B)adopting aggressive marketing to ride down the experience curve.
C)designing products for ease of manufacture.
D)using information systems to automate processes.
E)implementing self-managing teams.
Page 6
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Chapter 5: Building Competitive Advantage Through Business-Level Strategy
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Sample Questions
Q1) A product's appeal to customers' desires cannot be considered a source of differentiation.
A)True
B)False
Q2) Delta Airlines used to advertise its high-quality air travel service by saying it flew "anywhere, anytime." What generic strategy is represented by this advertisement?
A)Broad low-cost
B)Broad differentiation
C)Vertical integration
D)Right-time marketing
E)Rapid growth
Q3) Production of a large product variety without a large cost penalty is known as:
A)market concentration.
B)market segmentation.
C)focused differentiation.
D)mass production.
E)mass customization.
Q4) Describe how business-level strategies give a company a competitive advantage over actual and potential rivals.
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Chapter 6: Business-Level Strategy and the Industry Environment
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Sample Questions
Q1) Which of the following statements is true in the context of growing industries?
A)Innovators and early adopters have the same customer needs as the early majority.
B)Innovators and early adopters are typically reached through specialized distribution channels.
C)Reaching the early majority seldom requires advertising and is usually achieved through word of mouth.
D)Companies serving innovators need to have large-scale mass production and very low prices.
E)Companies competing in an embryonic market typically pay more attention to increasing the reliability of a product than to its performance.
Q2) Which of the following is not a characteristic of a fragmented industry?
A)Low barriers to entry
B)Diseconomies of scale
C)Brand loyalty in the industry that may primarily be local
D)Very specialized customer needs
E)Large mass-production operation
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Chapter 7: Strategy and Technology
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Sample Questions
Q1) Cell phone technology is replacing traditional wired phone technology.This is an example of a(n):
A)first-mover advantage.
B)technological paradigm shift.
C)format war.
D)complementary product.
E)embryonic industry.
Q2) Which of the following statements is true about technological paradigm shifts?
A)They often do not change the nature of competition in an industry.
B)They occur when government regulations restrict the use of certain technologies.
C)They have the potential to threaten the survival of established industries.
D)They can often be handled by established companies without adopting new strategies.
E)They strongly deter new entrants.
Q3) Technological paradigm shifts occur when new technologies revolutionize the structure of the industry, dramatically alter the nature of competition, and require companies to adopt new strategies to survive.
A)True
B)False
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Chapter 8: Strategy in the Global Environment
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Sample Questions
Q1) A company may create value if it can leverage the skills created within subsidiaries and apply them to other operations within the finn's global network.
A)True
B)False
Q2) For a strategic alliance, fmns should seek partners that are:
A)different in terms of vision and agendas.
B)known for being opportunistic.
C)willing to share costs and risks of product development.
D)radically different when it comes to strategic goals.
E)similar when it comes to capabilities.
Q3) What is meant by the term national competitive advantage, and what are the attributes of a nation that affect the global competitiveness of companies located within that nation?
Q4) Most manufacturing companies begin their global expansion by exporting.
A)True B)False
Q5) When a company licenses its technology it can quickly lose control over it.
A)True
B)False
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Chapter 9: Corporate-Level Strategy: Horizontal Integration,
Vertical Integration, and Strategic Outsourcing
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Sample Questions
Q1) Horizontal integration in an industry tends to:
A)increase the cost structure.
B)increase product differentiation.
C)undermine the company's competitive advantage.
D)increase rivalry within the industry.
E)reduce bargaining power over suppliers and buyers.
Q2) Even though companies may invest in specialized assets to build competitive advantage, it is seldom necessary that suppliers do so.
A)True
B)False
Q3) When a company outsources its noncore activities to specialists, it looses its capabilities to differentiate its fmal products.
A)True
B)False
Q4) A company should first choose a corporate-level strategy and then look at how changes will affect a company's current business model and strategies.
A)True
B)False
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Chapter 10: Corporate-Level Strategy: Related and
Unrelated Diversification
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Sample Questions
Q1) Which of the following is the probable consequence of an inability to integrate two divergent corporate cultures after an acquisition?
A)Low management turnover
B)Poor commercialization of the product
C)An inability to realize potential gains from synergies
D)The stock of highly diversified companies is valued lower
E)Risks are shared by all
Q2) To be commercially successful, new products must be developed with in mind.
A)manufacturing requirements
B)engineering technology
C)customer requirements
D)sales techniques
E)technical requirements
Q3) Identify and discuss the profitability justifications for pursuing a multibusiness model based on diversification.
Q4) Differentiate between joint venture and acquisition as a method to enter new industries.Discuss the advantages and disadvantages associated with each.
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Chapter 11: Corporate Performance, Governance, and Business Ethics
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Sample Questions
Q1) Explain the principles of agency theory, including the issues it addresses.What are some effective ways to deal with agency problems, as implied or stated by agency theory?
Q2) While many agency relationships work well, problems arise when agents and principals have different goals.
A)True
B)False
Q3) An agency relationship continues down a hierarchy within a company.
A)True
B)False
Q4) Jacob is a senior manager at Aries LLC.Jacob has been earning a lot of money in addition to his salary.He often misrepresents the fmancial information about the operations he handles; he acquires more fmancial resources than he actually needs to run operations.Which of the following concepts is illustrated in this scenario?
A)Glass-ceiling effect
B)Self-dealing
C)Agency strategy
D)Takeover constraints
E)Stock options
13
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Chapter 12: Implementing Strategy in Companies That
Compete in a Single Industry
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Sample Questions
Q1) The purpose of a(n) is to provide managers with incentives for employees as well as feedback on how the company performs.
A)control system
B)adaptive culture
C)organizational design
D)span of control
E)hierarchy of authority
Q2) Matrix structures:
A)have many hierarchical levels.
B)are appropriate for companies with many low-skilled workers.
C)group activities vertically by function and horizontally by product or project.
D)are appropriate for a firm pursuing a low-cost strategy.
E)have several product group hierarchies and two forms of horizontal differentiation.
Q3) Control through culture is ineffective because employees do not internalize values.
A)True
B)False
Q4) Identify and discuss the three building blocks of organizational structure.
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Chapter 13: Implementing Strategy in Companies That
Compete Across Industries and Countries
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Sample Questions
Q1) John is employed at Global Tech, an organization that operates within the technology industry.He is an experienced corporate manager who assumes the responsibility for managing complex transfers between two or more divisions.John has a(n) role in the company.
A)fmancial control
B)functional management
C)strategic
D)line management
E)integrating
Q2) Supernova Inc.wishes to enter a new market to expand its business.Realizing that the resources within the firm might not be sufficient to establish a new business unit, the company has entered into an agreement with Alba Inc.; both the companies will combine their resources and skills to establish and manage the new unit.Which of the following entry modes has Supernova Inc.adopted?
A)Internal new venture
B)Joint venture
C)Divestment
D)Acquisition
E)Outsourcing
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