Miscellaneous MCQs

| March 14, 2016

Question: In companies where intellectual capital is crucial to good strategy execution, which of the following is generally not among the practices that companies use to establish a talented knowledge base?

A Providing promising employees with challenging, interesting, and skill-stretching assignments and also rotating them through jobs that not only have great content but also span functional and geographic boundaries

B Expecting employees to take full responsibility for staying up to date, thereby minimizing the need to train or retrain employees

C Coaching average performers to improve their skills and capabilities, while weeding out underperformers and benchwarmers

D Encouraging employees to challenge existing ways of doing things, to be creative and innovative in proposing better ways of operating, and to push their ideas for new products or businesses

E Fostering a stimulating and engaging work environment such that employees will consider the company a great place to work

Question: Diversification merits strong consideration whenever a single-business company

A Has integrated backward and forward as far as it can

B Is faced with diminishing market opportunities and stagnating sales in its principal business

C Has achieved industry leadership in its main line of business

D Encounters declining profits in its mainstay business

E Faces strong competition and is struggling to earn a good profit

Question: According to integrated social contracts theory

A Universal ethical principles apply in those situations where most all societies – endowed with rationality and moral knowledge – have common moral agreement on what is wrong and thereby put limits on what actions and behaviors fall inside the boundaries of what is right and which ones fall outside

B Commonly held views about what is morally right and wrong form a contract with society that is binding on all individuals, groups, organizations, and businesses in terms of establishing right and wrong and in drawing the line between ethical and unethical behaviors

C Universal ethical principles or norms leave some moral free space for the people in a particular country (or local culture or even a company) to make specific interpretations of what other actions may or may not be permissible within the bounds defined by universal ethical principles

D Universal ethical norms always take precedence over local ethical norms

E All of the above

Question: Once company managers have decided on a strategy, the emphasis turns to

A Converting the strategy (and any associated strategic plan) into actions and good results

B Empowering employees to revise and reorganize value chain activities to match the strategy

C Establishing policies and procedures that instruct company personnel in the ways and means of executing the strategy

D Developing a detailed implementation plan that sets forth exactly what every department and every manager needs to do to proficiently execute the company’s strategy

E Building the core competencies and competitive capabilities needed to execute the strategy

Question: A company’s culture is typically grounded in and shaped by

A Its core competencies and competitive capabilities

B Its long-term strategic success or lack thereof

C The degree to which top management is committed to achieving market leadership

D Its core values and the bar it sets for ethical standards

E The company’s strategic intent and its reward system

Question: Putting together a capable top management team

A Should take top priority in building competitively valuable core competencies

B Is particularly important when the firm is pursuing unrelated diversification or making a number of new acquisitions in related businesses

C Is important in building an organization capable of proficient strategy execution but is nearly always less crucial than doing a superior job of training and retraining employees

D Entails filling key managerial slots with smart people who are clear thinkers, good at figuring out what needs to be done, and skilled in making it happen and delivering good results

E Is particularly essential for executing a strategy to keep a company’s costs lower than rivals and become the industry’s low-cost leader

Question: The areas that information systems need to cover include all but which one of the following?

A Financial performance data

B Corporate culture data

C Customer data

D Operations data

E Employee data

Question: Which of the following is an important appeal of a related diversification strategy?

A Related diversification is an effective way of capturing valuable financial fit benefits

B Related diversification offers more competitive advantage potential than does unrelated diversification

C Related diversification offers significant opportunities to strongly differentiate a company’s product offerings from those of rivals

D Related diversification is more likely to pass the cost-of-entry test and the capital gains test than unrelated diversification

E Related diversification is typically more profitable than unrelated diversification, which is a major factor in helping related diversification pass the attractiveness test

Question: Which of the following is not characteristic of a compensation and reward system designed to help drive successful strategy execution?

A Tying incentives to performance outcomes directly linked to good strategy execution and financial performance

B Keeping the time between achieving the target performance outcome and the payment of the reward as short as possible

C Making sure that the performance targets that each individual or team is expected to achieve involve outcomes that the individual or team can personally affect

D Generous rewards for people who turn in outstanding performances

E A reward system that involves 50 percent non-monetary rewards and a work environment that avoids placing pressure on managers and employees to perform at high levels

Question: Information systems provide managers with a means for monitoring

A Daily team performance in real time

B The performance of empowered workers to see that they are acting within the specified limits

C Daily and weekly operating statistics

D All of these

E None of these

Question: According to the school of ethical relativism

A Concepts of ethically right and ethically wrong are relative across countries and cultures but are universal within countries or cultures

B Individuals and businesses have a basic right to moral free space and that it is inappropriate to specify ethically permissible and ethically impermissible actions and behaviors

C There are important occasions when local cultural norms and the circumstances of the situation determine whether certain behaviors are right or wrong

D Concepts of right and wrong as applied to business situations are always a function of each company’s own set of values, beliefs, and ethical convictions (as stated in the company’s code of ethical conduct)

E Standards of what is ethically right and ethically wrong as applied to business behavior are determined solely by whatever business norms prevail in a particular country/culture/society and these business norms are certain to vary across countries/cultures/societies

Question: The backbone of identifying, studying, and implementing best practices is

A Business process reengineering

B A corporate culture that has a core value of operating excellence

C Benchmarking

D Six Sigma quality control techniques

E Innovative application of TQM techniques

Question: Paying bribes and kickbacks to grease business transactions

A Violates ethical principles of right and wrong in all countries

B Is ethically acceptable according to the principle of ethical universalism and ethically unacceptable according to the principle of ethical relativism

C Is acceptable to immoral managers but not to amoral managers

D Is one of the thorniest ethical problems that multinational companies face because paying bribes is normal and customary in some countries and ethically or legally forbidden in others

E Is more acceptable in dealing with a company’s suppliers than in dealing with a company’s customers

Question: The character of a company’s corporate culture is a product of

A The core values and business principles that management preaches and practices

B Its standards of what is ethically acceptable and what is not and the stories that get told over and over to illustrate and reinforce the company’s values, business practices, and traditions

C The company’s approach to people management and the chemistry and personality that permeates its work environment

D The work practices and behaviors that define how we do things around here

E All of these

Question: The most popular strategy for entering new businesses and accomplishing diversification is

A Forming a joint venture with another company to enter the target industry

B Internal startup

C Acquisition of an existing business already in the chosen industry

D Forming a strategic alliance with another company to enter the target industry

E None of the above – strategic alliances and joint ventures are equally popular and rank well ahead of acquisition and internal start-up in terms of frequency of use

Question: Frequently, a significant part of a company’s culture is captured in

A The company’s strategic vision and strategic intent

B The stories that get told over and over again to illustrate to newcomers the importance of certain values and the depth of commitment that various company personnel have displayed

C How much stretch is built into the company’s financial and strategic performance targets

D The vigor and enthusiasm with which it engages in benchmarking and seeks out best practices

E The company’s track record in taking market share away from rivals

Question: Companies that adopt the principle of ethical relativism in providing ethical guidance to company personnel

A Base their standards of what is ethical and what is unethical on the Global Code of Ethical Conduct first developed in 1935 and since subscribed to by the governments of 180 countries

B Quickly find themselves on a slippery slope with no higher order moral compass if they operate in countries where ethical standards vary considerably from country to country

C Have no fair way to judge the ethical correctness of the conduct of company personnel

D Have a one-size-fits-all set of ethical standards

E End up allowing each company employee to determine what set of ethical standards to observe

Question: The three components of building a capable organization are

A Making periodic changes in the firm’s internal organization to keep people from getting into a comfortable rut, instituting a decentralized approach to decision making, and developing the appropriate competencies and capabilities

B Hiring a capable top management team, empowering employees, and establishing a strategy-supportive corporate culture

C Putting a centralized decision-making structure in place, determining who should have responsibility for each value chain activity, and aligning the corporate culture with key policies, procedures, and operating practices

D Staffing the organization, building core competencies and competitive capabilities, and structuring the organization and work effort

E Optimizing the number of core competencies and competitive capabilities, making sure that all managers and employees are empowered, and maximizing internal operating efficiency

Question: Which of the following statements regarding a company’s social responsibility and sustainability strategy is false?

A A company is not demonstrating an adequate degree of social responsibility or endeavoring to be a model corporate citizen unless it spends 5% (or more) of pretax profits on social responsibility initiatives

B Social responsibility strategies that have the effect of both providing valuable social benefits and fulfilling customer needs in a superior fashion can lead to competitive advantage

C A few companies have integrated social responsibility and/or environmental sustainability objectives into their missions and overall performance targets; they view social performance and environmental metrics as an essential component of judging the company’s overall future performance

D Unless a company’s social responsibility initiatives become part of the way it operates its business every day, the initiatives are unlikely to be fully effective

E While the strategies and actions of all socially responsible companies have a sameness in the sense of drawing on the same categories of socially responsible behavior, each company’s version of being socially responsible is unique

Question: The classic way to coordinate the work efforts of internal organization units is to

A Establish a corporate culture where teamwork is a core value and decisions are made by general consensus among team leaders in the affected work units

B Have closely related activities report to a single executive who has the authority and organizational clout to coordinate, integrate, and arrange for the cooperation of units under their supervision

C Have the heads of support activities report to the heads of primary, strategy-critical activities

D Establish monetary incentives that reward people for being cooperative team players

E Have frequent meetings among the heads of closely related activities and work units to establish mutually agreeable deadlines

Question: The corporate strategy process does not entail

A Crafting, implementing, and executing plans

B Fine-tuning and adjusting corporate vision and objectives

C A continuous process of crafting and executing strategy to fit changing circumstances

D Recycling the linked stages of executing strategy

E Any of these

Question: In a strong culture company

A Values and behavioral norms are like crabgrass – deeply rooted and hard to weed out

B There is wide support for high ethical standards among both managers and employees

C A company has more strategy flexibility because it can change its strategy and be confident that the culture will welcome the strategy changes and be an ally in implementing whatever changes are called for

D There is little room for employee empowerment, because independent-thinking empowered employees may well make decisions or engage in actions that weaken the culture

E Management insists that official policies and procedures be followed religiously

Question: The basic premise of unrelated diversification is that

A The least risky way to diversify is to seek out businesses that are leaders in their respective industries

B The best companies to acquire are those that offer the greatest economies of scope rather than the greatest economies of scale

C The best way to build shareholder value is to acquire businesses with strong cross-business financial fit

D Any company that can be acquired on good financial terms and that has satisfactory growth and earnings potential represents a good acquisition and a good business opportunity

E The task of building shareholder value is better served by seeking to stabilize earnings across the entire business cycle than by seeking to capture cross-business strategic fits

Question: A best practice

A Is a technique for performing an activity or business process that at least one company has demonstrated works particularly well in terms of delivering some highly positive operating outcome

B Refers to the best-known procedure for performing a specific task or activity so as to achieve the lowest possible costs

C Refers to performing activities in a manner that conforms to established industry standards

D Refers to a company’s core competence

E Refers to performing a particular value chain activity in world-class fashion (one unmatched by any other company in the world)

Question: The transaction costs of completing a business agreement, or deal of some sort, over and above the price of the deal can include

A The costs of searching for an attractive target

B The costs of evaluating its worth

C Bargaining costs

D The costs of completing the transaction

E All of the above

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