Strategic Decision Making
Final Test Solutions
Course Introduction
Strategic Decision Making explores the frameworks, tools, and cognitive processes involved in making critical decisions in complex, uncertain environments. The course examines how organizations and individuals formulate strategies, weigh alternatives, analyze risks, and anticipate outcomes to drive long-term success. Students will engage with real-world case studies, behavioral decision theory, and quantitative methods, developing the capacity to align decisions with organizational goals, manage biases, and adapt strategies in dynamic competitive landscapes.
Recommended Textbook
Strategic Management Concepts and Cases Competitiveness and Globalization 9th Edition by
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13 Chapters
1950 Verified Questions
1950 Flashcards
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Chapter 1: Strategic Management and Strategic Competitiveness
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130 Verified Questions
130 Flashcards
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Sample Questions
Q1) Research shows that a greater percentage of a firm's profitability is explained by the I/O rather than the resource-based model.
A)True
B)False
Answer: False
Q2) Returns can only be measured in accounting terms such as return on assets, return on equity, or return on sales.
A)True
B)False
Answer: False
Q3) Average returns are returns in excess of what an investor expects to earn from other investments with a similar amount of risk.
A)True
B)False
Answer: False
Q4) Resources are considered rare when they have no structural equivalent.
A)True
B)False
Answer: False
Page 3
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Chapter 2: The External Environment: Opportunities,
Threats, Industry Competition, and Competitor Analysis
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149 Verified Questions
149 Flashcards
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Sample Questions
Q1) The external environment facing business stays relatively constant over time.
A)True
B)False
Answer: False
Q2) All of the following are aspects of the political/legal segment of the general environment EXCEPT
A) antitrust laws.
B) attitudes and values.
C) free trade agreements between nations.
D) industries chosen for deregulation.
Answer: B
Q3) Which of the following is NOT an activity used in the external environmental analysis process?
A) Scanning
B) Decrypting
C) Monitoring
D) Assessing
Answer: B
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153 Verified Questions
153 Flashcards
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Sample Questions
Q1) The challenge and difficulty of making effective decisions are implied by preliminary evidence suggesting that one-half of organizational decisions fail.
A)True
B)False
Answer: True
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) ____ is an example of a capability that is based in the functional area of distribution.
A) Effective use of logistics management techniques
B) Effective control of inventories through point-of-purchase data collection
C) Effective organizational structure
D) Product and design quality
Answer: A
Page 5
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Chapter 4: Business Level Strategy
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140 Verified Questions
140 Flashcards
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Sample Questions
Q1) The activities in the value chains of companies using focus strategies are quite different than the activities in the value chains of companies using industry-wide business strategies.
A)True
B)False
Q2) The integration of a cost leadership and a differentiation strategy
A) is challenging because the firm must become competent in more primary and support activities.
B) forces a firm to adapt more slowly to changes in its environment.
C) allows the firm to avoid being "stuck in the middle."
D) requires such a large customer base that it is most practical for firms in the global marketplace.
Q3) According to the Chapter 4 Strategic Focus, Kazoo Toys has successfully implemented an integrated cost leadership /differentiation strategy by creating value for parents and children interested in purchasing unique toys while simultaneously having access to unique services.
A)True
B)False
Q4) What are the risks of an integrated cost leadership/differentiation strategy?
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Chapter 5: Competitive Rivalry and Competitive Dynamics
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142 Verified Questions
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Sample Questions
Q1) Among the drivers of competitive actions and responses, motivation refers to the perceived gains that will result from a firm which initiates an attack. If a firm perceives that its position will improve, it is more likely to attack.
A)True
B)False
Q2) Ninety percent of Wm. Wrigley Company's total revenue comes from chewing gum. This is an example of
A) market commonality.
B) standard-cycle markets.
C) economies of scale.
D) market dependence.
Q3) Both ____ and ____ affect the awareness and motivation of a firm to undertake actions and responses.
A) first-mover advantages, corporate size
B) market commonality, resource similarity
C) management capabilities, competitive analysis
D) speed of management decisions, management actions
Q4) What are the advantages and disadvantages of being a first mover, second mover, and late mover?
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Chapter 6: Corporate-Level Strategy
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166 Verified Questions
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Sample Questions
Q1) Which of the following is NOT a governance mechanism that may limit managerial tendencies to over-diversify?
A) the market for corporate control
B) the Board of Directors
C) surveillance technologies
D) executive compensation practices
Q2) Procter & Gamble (P&G) has a paper towel and baby diaper business that both use paper products. This is an example of value created through the sharing of activities.
A)True
B)False
Q3) If the businesses in the corporate portfolio are not worth more under the management of the corporation than they would be under any other ownership, then the corporate-level strategy has failed.
A)True
B)False
Q4) (Refer to the above Case Scenario ) How might JC's related diversification strategy result in economies of scope and market power?
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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162 Verified Questions
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Sample Questions
Q1) Research evidence suggests that horizontal acquisitions result in higher performance when the firms have similar strategies, assets, and capabilities.
A)True
B)False
Q2) It is relatively common for a firm to develop new products internally to diversify its product lines.
A)True
B)False
Q3) Horizontal, vertical, and related acquisitions to build market power
A) are likely to undergo regulatory review and analysis by financial markets.
B) are rarely permitted to occur across international borders.
C) typically involve a firm purchasing one of its suppliers or distributors.
D) concentrate on capturing value at more than one stage in the value chain.
Q4) The chapter Strategic Focus illustrates the use of cross-border acquisitions by Chinese companies in the oil industry for the purpose of gaining market power.
A)True
B)False
Q5) Describe the seven problems in achieving a successful acquisition.
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Chapter 8: International Strategy
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162 Verified Questions
162 Flashcards
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Sample
Questions
Q1) 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
Q2) In Porter's model, if a country has both ________ and __________ production factors, it is likely to serve an industry well by spawning strong home-country competitors that can also be successful global competitors.
A) basic; advanced
B) advanced; generalized
C) basic; generalized
D) advanced; specialized
Q3) Which of the following is NOT a typical disadvantage of licensing?
A) little control over the marketing of the products
B) licensees may develop a competitive product after the license expires
C) lower potential returns than the use of exporting or strategic alliances
D) incompatibility of the licensing partners
Q4) Identify and describe the major risks of international diversification.
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Chapter 9: Cooperative Strategy
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138 Verified Questions
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Sample Questions
Q1) In free market economies, ____ must decide how rivals can collaborate with their competitors without violating established regulations.
A) the invisible hand
B) the government
C) consumers
D) the business community
Q2) In managing cooperative strategies, research indicates that ____ can be a capability that is valuable, rare, imperfectly imitable, and often nonsubstitutable giving these firms a competitive advantage.
A) extensive capitalization
B) stability
C) trustworthiness
D) Internet competency
Q3) The use of strategic alliances
A) is unlikely to yield success if partnering firms are headquartered in the same country.
B) may be too restrictive to facilitate entry into new markets.
C) usually increases the investment necessary to introduce new products.
D) is more frequent than other types of cooperative strategies.
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11
Chapter 10: Corporate Governance
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Sample Questions
Q1) Research suggests that firms with ____ perform better, especially when collaboration among top management team members is important.
A) greater emphasis on stock options
B) larger proportion of insiders on the board of directors
C) smaller pay gap between the CEO and other top executives
D) benchmarking used for top executive pay
Q2) The market for corporate control is composed of individuals and firms that buy ownership positions or take over potentially undervalued corporations and make changes to those corporations, including the replacement of the top managers.
A)True
B)False
Q3) According to the chapter Strategic Focus, the weakness of corporate boards was exemplified by the fact that the President of the United States had to fire a highly ineffective CEO because the board of General Motors had failed to act in recent years.
A)True
B)False
Q4) Briefly compare and contrast corporate governance in the U.S., Germany, and Japan, and China.
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Chapter 11: Organizational Structure and Controls
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153 Verified Questions
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Sample Questions
Q1) Leslie is a newly-graduated certified public accountant with a specialty in corporate tax. She wishes to join an organization (not an accounting firm) that will allow her to concentrate on corporate tax and become deeply proficient in this area. Leslie should look for a position in a firm with a ____ structure.
A) simple
B) functional
C) multidivisional
D) network
Q2) The ____ structure is an organizational structure that combines both functional specialization and business product or project specialization.
A) functional
B) worldwide geographic area
C) network
D) matrix
Q3) Implementing the multidomestic strategy requires decentralization
A) to facilitate the tailoring of products to the demand in local markets.
B) to develop economies of scale.
C) in order to achieve economies of scope.
D) to reduce bureaucracy and speed up decision-making.
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Page 13
Chapter 12: Strategic Leadership
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Sample Questions
Q1) Internal labor markets consist of the career opportunities for managers within the firm for which they currently work.
A)True
B)False
Q2) The top management team is composed of the
A) heterogeneous group of advisors selected by the CEO.
B) CEO and chairperson of the board.
C) key managers who are responsible for selecting and implementing a firm's strategy.
D) officers listed in a firm's annual report and the board of directors.
Q3) What is organizational culture? What must strategic leaders do to develop and sustain an effective organizational culture?
Q4) The CEO is the individual with primary responsibility for effective strategic leadership within an organization.
A)True
B)False
Q5) (Refer to the above Case Scenario ) Where are these core resources likely to be located in the firm?
Q6) Define human capital and its importance to the firm's success.
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Chapter 13: Strategic Entrepreneurship
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147 Verified Questions
147 Flashcards
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Sample Questions
Q1) QuadroVax is investing heavily in research and development on new methods of vaccine development that would speed up the creation of vaccines for newly emerging viruses and to get these vaccines to the market rapidly. QuadroVax's shareholders can expect
A) immediate wealth creation.
B) a long wait for an uncertain payoff.
C) a long wait for a high probability payoff.
D) a large payoff in the short-term with rapidly decreasing wealth generation in the longer run.
Q2) Evidence demonstrates that large firms with well-funded R&D operations are more effective at innovation than are smaller firms.
A)True
B)False
Q3) Informal (often invisible) processes are best supported through ____ organizational structures.
A) vertical
B) horizontal
C) functionally-oriented
D) multidivisional
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Page 15