Computer MGT 195 2

| January 23, 2016

Q1. Typically, the best method of entry into a foreign market is the establishment of a wholly owned foreign subsidiary so that the

parent organization can maintain a high level of control.
a. true
b. false

Q2. A key tenet of a transnational strategy is improved adaptation to all competitive situations as well as flexibility by capitalizing

on communication and knowledge flows throughout the organization.
a. true
b. false

Q3. High levels of environmental awareness in Denmark have led to a decline in Denmark’s industrial competitiveness in the

international marketplace.
a. true
b. false

Q4. Multinational firms following a transnational strategy strive to optimize the tradeoffs associated with efficiency, local

adaptation, and learning.
a. true
b. false

Q5. Corporations with multiple foreign operations that act very independently of one another are following a multidomestic strategy.
a. true
b. false

Q6. According to Michael Porter, firms that have experienced intense domestic competition are:
a. Unlikely to have the time or resources to compete abroad
b. Most likely to design strategies aimed primarily at the domestic market
c. More likely to design strategies and structures that allow them to successfully compete abroad
d. More likely to demand protection from their governments

Q7. Industries in which proportionally more value is added in upstream activities are more likely to benefit from a global strategy

than those in which more value is added downstream (closer to the customer).
a. true
b. false

Q8. Which of the following is a disadvantage of a transnational strategy?
a. Less ability to realize cost savings through scale economies
b. Limited ability to adapt to local markets
c. Unique managerial challenges in fostering knowledge transfer
d. Single locations may lead to higher tariffs and transportation costs

Q9. When an industry is mature, a __________ strategy is considered to be one of the most effective approaches for a new entrant.
a. Focus
b. Differentiation
c. Overall low cost
d. Small business

Q10. The evaluation phase of opportunity recognition includes the ‘Aha!’ experience that often leads to new venture development.
a. true
b. false

Q11. Netflix CEO Reed Hastings made this important observation about dealing with rivals:
a. ‘In a highly competitive marketplace, firms must be paranoid about the multitude of potential rivals.’
b. ‘You can afford to ignore rivals in small markets, but you can never ignore rivals in large markets, such as on-line video

companies like YouTube.’
c. ‘There are tens and maybe hundreds of start-ups who think that they are going to eat Netflix’s lunch. The challenge for a

management team is to figure out which are real threats and which aren’t.’
d. ‘Netflix’s position is so strong that I don’t worry about new entrants.’

Q12. Founders using a pioneering new entry strategy look for opportunities to capitalize on proven market successes.
a. true
b. false

Q13. Because new ventures are typically small, they usually don’t have high economies of scale relative to competitors.
a. true
b. false

Q14. Venture capital is a form of public equity financing used to help young firms rapidly grow.
a. true
b. false

Q15. The majority of entrepreneurial start-ups are financed with:
a. Bank financing
b. Public financing (e.g., SBA loans)
c. Venture capital financing
d. Personal savings and the contributions of family and friends

Q16. The majority of entrepreneurial start-ups are financed with personal savings and the contributions of family and friends.
a. true
b. false

Q17. Intense rivalry involving actions and responses among similar competitors vying for the same customers in a marketplace is known

as:
a. Competitive dynamics
b. Resource similarity
c. Threat of substitutes
d. Pioneering new entry

Q18. When countercultures emerge that have shared values opposite from the dominant culture of an organization:
a. Organizational cohesiveness increases
b. Information is shared rather than hoarded
c. Individuals begin working at cross purposes
d. Individuals gain insights into overarching goals and objectives

Q19. The late Sam Walton, founder of Wal-Mart, used to give pep rallies at local Wal-Mart stores. What purpose did this serve?
a. It was used to remind employees of Wal-Mart’s rules and regulations
b. It helped reinforce and sustain Wal-Mart’s culture
c. It demonstrated to employees the importance of articulating explicit goals and objectives
d. It made Wal-Mart’s reward system very explicit

Q20. Most successful organizations minimize the need for explicit rules, regulations, and other boundaries by:
a. Posting written statements of the organization’s goals and objectives
b. Discouraging the formation of subcultures that isolate work groups
c. Designing effective reward systems
d. Encouraging employees to see themselves as free agents

Q21. Different functional areas within an organization often have different reward systems.
a. true
b. false

Q22. In emerging economies and continental Europe, principal-principal conflicts are frequent. These consist of conflicts between

controlling shareholders and executives.
a. true
b. false

Q23. An organization’s reward system is typically a weak method of motivating employees.
a. true
b. false

Q24. Public companies are required by law to disclose information regarding executive compensation packages.
a. true
b. false

Q25. The collective sum of individual behaviors of an organization’s employees generally results in what is best for the organization;

thus, individual rationality assures organizational rationality.
a. true
b. false

Q26. In principal-principal conflicts (conflicts between controlling shareholders and minority shareholders), the ownership (of equity)

is:
a. Widely dispersed (5-20% is considered ‘concentrated ownership’)
b. Controlled almost completely by management
c. Concentrated—often greater than 50% of equity is controlled by controlling shareholders
d. Often held by employee stock ownership programs
Q27. Complete the following sentence: ‘Strategic business unit (SBU) structures are best suited for corporations pursuing __________,

whereas holding company structures are best suited for companies with __________ strategies.’
a. Product-market diversification, international
b. International diversification, product-market
c. Related diversification, unrelated diversification
d. Unrelated diversification, related diversification

Q28. Which of the following is an advantage of a functional type of organizational structure?
a. Decentralized decision-making enhances an organization-wide perspective across functions
b. It facilitates the development of general management talent
c. Pooling of specialists enhances coordination and control
d. It is easy to establish uniform performance standards

Q29. The virtual type of organization is a network of independent companies linked together to share skills, costs, and access to one

another’s markets.
a. true
b. false

Q30. Nike is a company that makes use of the concept of ‘product expatriates.’ Product expatriates are:
a. Managers from the home country sent abroad to oversee the marketing of a company’s products
b. Managers from suppliers who come to work at a company’s headquarters
c. Managers of the company sent abroad to work at the plants of its suppliers
d. Local nationals hired by the company in the countries from which it sources products

Q31. If an international firm has a multidomestic strategy and a relatively high level of product diversity, the best choice for its

organizational structure is:
a. Worldwide functional
b. Worldwide product division
c. Worldwide matrix
d. International division

Q32. A firm’s structure typically has almost no effect on its strategy.
a. true
b. false

Q33. An organization such as ConAgra that has dozens of different divisions with similar products will probably have the greatest

success with which form of organization structure?
a. Functional structure
b. Matrix structure
c. Strategic business unit structure
d. Holding company structure

Q34. As firms grow, owner managers often need to hire functional specialists to handle the increased information-processing burden.
a. true
b. false

Q35. In order to create an environment where employees can achieve their potential as they move the organization towards its goals, the

manager’s role needs to be that of:
a. Resource allocator
b. Resource controller
c. A flexible resource
d. An advocator of the status quo

Q36. ‘Open book’ management is a technique for gathering and disseminating internal information so that all employees can be involved

in decision making and management.
a. true
b. false

Q37. The trend among many organizations is toward forms of empowerment that rely on trust, team building, and the expertise of

employees at all levels.
a. true
b. false

Q38. Functional benchmarking:
a. Is not very useful for organizations with a divisional organizational structure
b. Endeavors to determine best practices regardless of industry
c. Restricts the search for best practices to competitors
d. Is useful when researching industry-specific standards

Q39. Competitive benchmarking is a method of seeking the best examples of practices or processes that have essentially the same

function regardless of industry.
a. true
b. false

Q40. Although many organizations encourage creativity and risk taking, few successful companies tolerate failure.
a. true
b. false

Q41. Leaders who fail to institute proper systems and controls that facilitate ethical conduct share responsibility with those who

conceive, execute, and knowingly benefit from corporate misdeeds.
a. true
b. false

Q42. Emotional intelligence (EI) is one of the components of a high intelligence quotient (IQ).
a. true
b. false

Q43. The term ‘strategic envelope’ refers to the scope of a firm’s innovation efforts.
a. true
b. false

Q44. One of the pitfalls of real options analysis is that managers may have an incentive and know-how to ‘game the system’ and ‘back-

solve’ a formula to get a proposal approved. This can give rise to:
a. Managerial conceit
b. The illusion of control
c. Escalation of commitment
d. Agency problems

Q45. Which of the following statements about skunkworks is false?
a. They are independent work units
b. They are used to encourage creative thinking and brainstorming
c. They refer to a specialized type of outside contractor that corporations use to develop entrepreneurial ideas
d. They help managers set aside their usual routines and practices

Q46. Corporate ventures that use real options logic in decision making tend to keep total investment low in order to minimize the

downside risk of a project.
a. true
b. false

Q47. Dispersed approaches to corporate entrepreneurship are often found in organizations with a strong spirit of entrepreneurship.
a. true
b. false

Q48. The strategic goals of corporate entrepreneurship are often just as important as the financial goals.
a. true
b. false

Q49. Process innovations are often associated with a low cost leadership strategy.
a. true
b. false

Q50. __________ produce fundamental changes that can transform a company or even revolutionize an industry; __________ enhance existing

practices and often represent evolutionary applications of fundamental breakthroughs.
a. Technological breakthroughs; product-market breakthroughs
b. New technologies; new paradigms
c. Incremental innovations; radical innovations
d. Radical innovations; incremental innovations
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