Course Introduction
Strategic Decision Making
Exam Practice Tests
Strategic Decision Making explores the processes, frameworks, and tools used by organizations to make high-stakes decisions that shape long-term success. The course covers topics such as rational and bounded rationality models, risk analysis, group decision-making dynamics, competitive and cooperative strategies, and the role of intuition versus data-driven analysis. Through real-world case studies, simulations, and structured exercises, students will develop the critical thinking and analytical skills necessary to evaluate complex situations and devise sound strategies that align with organizational goals and the external environment.
Recommended Textbook
The Management of Strategy Concepts and Cases International 10th Edition by Hitt
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13 Chapters
2022 Verified Questions
2022 Flashcards
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Page 2
Chapter 1: Strategic Management and Strategic Competitiveness
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135 Verified Questions
135 Flashcards
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Sample Questions
Q1) (Refer to Case Scenario 2) Jewell Company's statement that it intends to increase shareholder value by continuing to build a company with superior earnings per share growth and return on investment indicates the importance of the capital market stakeholder group to the company.
A)True
B)False
Answer: True
Q2) While patents may be an effective way of protecting proprietary technology in some industries such as pharmaceuticals, many firms competing in the electronics industry do not apply for patents.
A)True
B)False
Answer: True
Q3) An effective vision stretches and challenges people and can result in increased innovation as illustrated by Apple's CEO Steve Jobs who is known to think bigger and differently than most people ("putting a dent in the universe").
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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164 Verified Questions
164 Flashcards
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Sample Questions
Q1) Developing a political strategy by the newly formed General Motors would likely be ineffective as firms are generally unable to influence the political/legal environment.
A)True
B)False
Answer: False
Q2) Competitor intelligence could ethically come from all the following EXCEPT A) court records.
B) financial reports.
C) trade show discussions.
D) eavesdropping.
Answer: D
Q3) Eavesdropping is an ethical way to obtain information about competitors' actions.
A)True
B)False
Answer: False
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Page 4
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153 Verified Questions
153 Flashcards
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Sample Questions
Q1) Coca-Cola's brand name is a tangible source of competitive advantage for the company.
A)True
B)False Answer: False
Q2) Firms should outsource only activities where they can create the most value or where they are at an advantage compared to competitors.
A)True
B)False Answer: False
Q3) At Southwest Airlines, the complex interelationship between its culture and human capital adds value for customers in ways that other airlines cannot, such as jokes on flights by flight attendants and cooperation between gate personnel and pilots.
A)True
B)False
Answer: True
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Chapter 4: Business Level Strategy
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147 Verified Questions
147 Flashcards
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Sample Questions
Q1) All of the following are ways that a good or service can be differentiated EXCEPT
A) Responsive customer service
B) Perceived prestige and status
C) Economies of scale and efficient operations
D) Engineering design and performance
Q2) A nationwide chain of pet stores wishes to identify the tradeoffs that its customers are willing to make between low-cost products such as generic pet foods and differentiated features such as pick-up and delivery of pets for grooming. The best technique for this firm to learn this information would be to use
A) information networks.
B) a flexible manufacturing system.
C) differentiation development planning.
D) Enterprise Resource Planning.
Q3) The benefit of a flexible manufacturing system is that
A) the lot size needed to manufacture a firm's product efficiently is reduced.
B) the necessary skill levels of workers are reduced, allowing the firm to reduce costs.
C) it lends itself to empowerment of employees.
D) it captures the cost savings of economies of scale.
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Chapter 5: Competitive Rivalry and Competitive Dynamics
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150 Verified Questions
150 Flashcards
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Sample Questions
Q1) The competitive actions and responses in __________ markets are designed to seek large market shares, to gain customer loyalty through brand names, and to carefully control the firm's operations in order to consistently provide the same positive experience for customers.
A) standard-cycle
B) fast-cycle
C) slow-cycle
D) intermediate-cycle
Q2) Because of the demanding technology development required, disruptive innovations such as the iPhone are usually confined to a single industry where it can focus on competing against a few rivals (Chapter 5 Opening Case).
A)True
B)False
Q3) A firm is likely to respond to an attack by a competitor in all of the following situations EXCEPT
A) the attack is by a price predator.
B) the attack makes the firm's market position less defensible.
C) the attack damages the firm's ability to use its capabilities.
D) the attack improves the competitor's market position.
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Page 7
Chapter 6: Corporate-Level Strategy
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162 Verified Questions
162 Flashcards
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Sample Questions
Q1) When a firm simultaneously practices operational relatedness and corporate relatedness,
A) it is difficult for investors to observe the value created by the firm.
B) the firm is likely to be overvalued by investors.
C) the firm will suffer from diseconomies of scope which outweigh cost savings generated.
D) the firm is seeking to create value through financial economies.
Q2) Acquisitions to increase market power require that the firm have a ____ diversification strategy.
A) unrelated
B) related
C) dominant business
D) single business
Q3) Which of the following reasons for diversification is most likely to increase the firm's value?
A) increasing managerial compensation
B) reducing costs through business restructuring
C) taking advantage of changes in tax laws
D) conforming to antitrust regulation
Q4) (Refer to Case Scenario 2) Why would the acquisition of Plastico be good for JC?
Page 8
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Chapter 7: Merger and Acquisition Strategies
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174 Verified Questions
174 Flashcards
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Sample Questions
Q1) The expenses incurred by firms trying to create synergy through acquisition are called ____ costs.
A) differentiation
B) diversification
C) transaction
D) interaction
Q2) Currently, the rationale for making an acquisition includes each of the following EXCEPT
A) To increase market power.
B) To decrease taxes paid by shareholders.
C) To overcome entry barriers.
D) To increase diversification.
Q3) How difficult is it for merger and acquisition strategies to create value and which firms benefit the most from M & A activity?
Q4) An advantage of using horizontal, vertical, or related acquisitions is that they are not subject to regulatory review.
A)True
B)False
Q5) What are the results of the three forms of restructuring?
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Chapter 8: International Strategy
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167 Verified Questions
167 Flashcards
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Sample Questions
Q1) In Porter's model, a specialized factor of production would include
A) abundant natural resources.
B) a large workforce.
C) an extensive highway transportation system.
D) workers with advanced engineering skills.
Q2) In addition to the four basic dimensions of Porter's "diamond" model, ____ may also contribute to the success or failure of firms.
A) national work ethic
B) educational requirements
C) government policy
D) national pride
Q3) Which pair of industries would NOT be considered as "related and supporting" under Porter's diamond model?
A) Japanese cameras and copiers
B) Italian leather-processing and shoes
C) U.S. computers and software
D) Highway systems and the supply of debt capital
Q4) Identify and describe the modes of entering international markets. What are their advantages and disadvantages?
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Chapter 9: Cooperative Strategy
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148 Verified Questions
148 Flashcards
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Sample Questions
Q1) A cooperative agreement between a hotel chain and a casino operator would be viewed as a horizontal complementary strategic alliance because as separate entities, the two firms would compete for the same customer.
A)True
B)False
Q2) A major risk of a network cooperative strategy is that firms gain access to their partner's partners thus exposing their proprietary processes to loss or theft.
A)True
B)False
Q3) The primary responsibility of the franchisor, such as McDonald's or Hilton International is to
A) learn about the brand and technology from the franchisee.
B) test the franchisee for potential future acquisition.
C) transfer to the franchisee knowledge and skills needed to compete at the local level.
D) provide feedback to the franchisee regarding how the franchisor could become more effective and efficient.
Q4) Identify the competitive risks associated with cooperative strategies.
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11
Chapter 10: Corporate Governance
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170 Verified Questions
170 Flashcards
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Sample Questions
Q1) Boards of directors are now becoming more involved in A) the strategic decision making process.
B) selecting new CEOs.
C) the firm's tax issues.
D) governmental relations.
Q2) The market for corporate control serves as a means of governance when A) the firm is overpriced in the market.
B) internal controls have failed.
C) the corporation has greatly exceeded performance expectations.
D) the top management team's interests and the owners' interests are aligned.
Q3) Executive compensation is a governance mechanism that seeks to align the interests of managers and owners through salaries, bonuses, and long-term incentive compensation such as stock awards and options.
A)True
B)False
Q4) Research evidence suggests that ownership concentration is` associated with lower levels of firm diversification which conforms to the interests of stockholders.
A)True
B)False
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Chapter 11: Organizational Structure and Controls
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157 Verified Questions
157 Flashcards
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Sample Questions
Q1) Describe the organizational structures used to implement cooperative strategies, giving attention to the role of the strategic center firm.
Q2) The primary disadvantage of the multidomestic strategy and worldwide geographic area structure relates to limited
A) centralization.
B) coordination across divisions.
C) ability to meet local market needs.
D) potential for global efficiency.
Q3) The marketing and R&D functions are emphasized in the differentiation strategy's functional structure.
A)True
B)False
Q4) (Refer to Case Scenario 2) What basic structural form would you recommend for both Pal and Mettolink? What must each firm be careful to avoid with this structure?
Q5) Companies and business units using the differentiation strategy should emphasize financial rather than strategic controls.
A)True
B)False
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Chapter 12: Strategic Leadership
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148 Verified Questions
148 Flashcards
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Sample Questions
Q1) Because of the challenges top executives face, they often are more effective when they operate as top management teams.
A)True
B)False
Q2) The top management team at Ingenuity, Inc., has assigned a team of scientists to a multi-year project to investigate the viability of growing large amounts of fur from cloned cells of minks and foxes to produce no-kill fur products for coats and other clothing items. This idea would satisfy all the dimensions of the entrepreneurial orientation EXCEPT
A) innovativeness.
B) risk taking.
C) proactiveness.
D) competitive autonomy.
Q3) What is a top management team, and how does it affect a firm's performance and its abilities to innovate and design and implement effective strategic changes?
Q4) (Refer to Case Scenario 1) Why do you think the Walt Disney Company had so much difficulty being innovative in the decades following Walt's death?
Q5) (Refer to Case Scenario 2) What culture did Mogens and Jack nurture in YTF?
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Chapter 13: Strategic Entrepreneurship
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147 Verified Questions
147 Flashcards
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Sample Questions
Q1) As a process, entrepreneurship results in the "creative destruction" of existing products (goods or services) or methods of producing them and replaces them with new products and production methods.
A)True
B)False
Q2) The essence of entrepreneurship is to capture most of the existing markets from less aggressive and innovative competitors.
A)True
B)False
Q3) An entrepreneurial mind-set, cross-functional product development teams, and shared values/leadership are the three ways that firms implement internal innovations.
A)True
B)False
Q4) To be successful, an autonomous process for developing new products relies on
A) the diffusion of tacit knowledge.
B) the acquisition of innovative firms.
C) strategic alliances with other firms.
D) internal corporate venturing.
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Page 15