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Question
Which of the following statements about corporate diversification is incorrect?A. Creating added value for shareholders via diversification requires building a multibusiness company where the whole is greater than the sum of its parts.
B. Diversification moves that satisfy all three diversification tests have the greatest potential to grow shareholder value over the long term.
C. The more attractive an industry's prospects are for growth and good long-term profitability, the less expensive it can be to enter.
D. Diversification cannot be considered a success unless it results in added shareholder valuevalue that shareholders cannot capture for themselves by spreading their investments across the stocks of companies in different industries.
E. Shareholder value is not created by diversification unless it passes the "better off" or "1 + 1 = 3 test."
Answer
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Related questions
Q:
Identify and briefly discuss four steps that managers can take to change a culture that is out of step with the company's strategy.
Q:
What are the distinctive features of adaptive corporate cultures?
Q:
Why does a company's budget need to be closely linked to the needs of good strategy execution? Why might a change in strategy call for budget reallocations?
Q:
The purpose of managing by walking around or MBWA is to
A. learn more about company operations and see how activities are really being done.
B. gather information about what is happening from people at different organizational levels and learn firsthand how well the strategy execution process is proceeding.
C. give employees a chance to make suggestions for improvement.
D. gather information about what strategy to follow and to learn what competitors are doing.
E. be visible and accessible to employees.
Q:
Proficient strategy execution requires executive managers to
A. be current with events and closely monitor progress, put constructive pressure on the organization for operating excellence, and initiate corrective action when necessary to improve performance and achieve desired results.
B. understand all the tasks required to implement the strategy so as to ensure staff will not shortchange any strategic-critical activity.
C. attach great importance to gathering statistics that define every task effort and ensure limited variability.
D. initiate a problem-solving search to ensure obstacles to success are identified.
E. All of these choices are correct.
Q:
In moving to alter a problem culture, management should
A. identify which aspects of the present culture are supportive of good strategy execution and which ones are not.
B. specify what new actions, behaviors, and work practices should be prominent in the "new" culture.
C. talk openly about the problems of the present culture and how new behaviors will improve performance.
D. employ visible, forceful actionsboth substantive and symbolicto ingrain a new set of behaviors, practices, and cultural norms.
E. All of these choices are correct.
Q:
Unhealthy company cultures typically have such characteristics as
A. tight budget controls, overly strict enforcement of long-standing policies and procedures, and low ethical standards.
B. a preference for conservative strategies, an aversion to incentive compensation, and excessive emphasis on profitability.
C. a politicized internal environment; hostility to change; an insular, inwardly focused culture; and unethical or greed-driven behavior on the part of executives.
D. overemphasis on employee empowerment, a complacent approach to building competencies and capabilities, no coherent business philosophy, and excessively bureaucratic policies and procedures.
E. too little emphasis on innovation, a strong preference for hiring managers from outside the company, very few core values and traditions, and a weakly enforced code of ethics.
Q:
Which of the following is not an example of an unhealthy company culture?
A. insular, inwardly focused culture
B. change-resistant culture
C. unethical and greed-driven culture
D. politicized culture
E. hyper-adaptive culture
Q:
The business case for why companies should act in a socially responsible manner includes such reasons asA. it generates internal benefits (as concerns employee recruiting, workforce retention, training, and improved worker productivity).B. it reduces the risk of reputation-damaging incidents.C. it is in the best interest of shareholders.D. the potential for increased buyer patronage.E. All of these choices are correct.
Q:
The essence of socially responsible business behavior is
A. encouraging company personnel to run for political offices.
B. balancing strategic actions to benefit shareholders against the duty to be a good corporate citizen.
C. undertaking actions to balance the interests of all company stakeholders rather than just exclusively look out for the interests of shareholders.
D. making sizable contributions to political action committees representing the interests of the industry.
E. pursuing actions to keep prices low enough that the company's profits will not be viewed by the general public as obscenely high or exorbitant.
Q:
A company that adopts the principle of ethical relativism in providing guidance to company personnel
A. bases its 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. places itself in a perilous position if it is required to defend these activities to its stakeholders in countries with higher ethical expectations or standards because it has no ethical standards or principles of its own.
C. has no fair way to judge the ethical correctness of the conduct of company personnel.
D. has a one-size-fits-all set of ethical standards.
E. allows each company employee to determine what set of ethical standards to observe.
Q:
Which one of the following is not one of the major drivers of unethical managerial behavior?
A. intense competitive pressures
B. overzealous pursuit of personal gain, wealth, and other selfish interests
C. a company culture that puts the profitability and good business performance ahead of ethical behavior
D. heavy pressures on company managers to meet or beat earnings targets
E. the attitude among management that "the business of business is business, not ethics"
Q:
Checking a diversified firm's business portfolio for the competitive advantage potential of cross-business strategic fits entails consideration of
A. whether the parent company's competitive advantages are being deployed to maximum advantage in each of its business units.
B. whether the competitive strategies employed in each business act to reinforce the competitive power of the strategies employed in the company's other businesses.
C. whether the competitive strategies in each business possess good strategic fit with the parent company's corporate strategy.
D. the extent to which there are competitively valuable relationships between the value chains of sister business units and what opportunities they present to reduce costs, share use of a potent brand name, or transfer skills or technology or intellectual capital from one business to another.
E. how compatible the competitive strategies of the various sister businesses are and whether these strategies are properly aimed at achieving the same kind of competitive advantage.
Q:
The most common building blocks for a company's organizational structure
A. are almost always the departments performing such key administrative support functions as finance, accounting, information technology, human resource management, and R&D.
B. involve a functional or departmental structure that includes process, geographic, product, or customer groups performing one or more major processing steps along the value chain.
C. typically consist of an unempowered employee department, an empowered employee department, teams of front-line supervisors, teams of middle-level managers and administrators, and the group of top-level executives who comprise the company's "executive suite."
D. usually consist of supply chain management, components manufacture, assembly, distribution, and administration.
E. usually consist of two divisions: a division charged with performing primary value chain activities and a division charged with performing support activities.
Q:
If management is to match a company's organization structure to its strategy in an effective way, then it is essential
A. that company personnel be empowered to make both strategic decisions and operating decisions.
B. for strategy-critical value-chain activities to be the main building blocks on the organization chart.
C. that value chain activities be deliberately organized so as to produce maximum strategic fit.
D. to define the jobs of company personnel in terms of the functions to be performed rather than in terms of the results to be achieved.
E. for the company to be organized around cross-functional teams rather than around functional specialties and functional departments.
Q:
Recruiting and retaining capable employeesA. is usually much more important to good strategy execution than is assembling a capable top management team.B. is important because the quality of an organization's people is always an essential ingredient of successful strategy executionknowledgeable, engaged employees are a company's best source of creative ideas for the nuts-and-bolts operating improvements that lead to operating excellence.C. is more important during periods of rapid growth than during periods of crisis and attempted turnarounds.D. is an important organization-building element, particularly when it comes to transforming a competence into a core competence or distinctive competence.E. is easily the most critical aspect in building competitively valuable core competencies and capabilities.
Q:
Which of the following is not among the types of actions and initiatives undertaken by management in the strategy execution process?
A. building an organization capable of executing the strategy
B. instituting policies and procedures that facilitate rather than impede strategy execution
C. deciding which core competencies and value chain activities to leave as is and which ones to overhaul and improve
D. pushing for continuous improvement in how value chain activities are performed
E. tying rewards directly to the achievement of strategic and financial targets and to good strategy execution
Q:
Why should a company endeavor to be socially responsible in its actions and conduct?
Q:
Explain what is meant by "sustainable business practices," and using that explanation, provide three examples of companies that pursue sustainability strategies.
Q:
What is the difference between ethics and business ethics?
Q:
Which one of the following is false as concerns the merits of why acting in a socially responsible manner is "good business"?A. Companies with good reputations for contributing time and money to bettering society are better able to attract and retain employees compared to companies with tarnished reputations.B. There is a high correlation between socially responsible behavior that addresses social issues and a firm's competitive advantage and financial performance.C. To the extent that a company's socially responsible behavior wins applause from consumers and fortifies its reputation, a company may win additional patronage.D. Operating in a socially responsible manner protects the company from consumer, environmental, and human rights activist groups that are quick to criticize businesses whose behavior they consider to be out of line.E. Well-conceived social responsibility strategies help avoid or preempt legal and regulatory actions that could prove costly to the company.
Q:
Once a company has diversified into a collection of related or unrelated businesses and concludes that some strategy adjustments are needed, which one of the following is not one of the main strategy options that a company can pursue?A. Stick closely with the existing business lineup.B. Restructure the company's business lineup.C. Craft new initiatives to build or enhance the company's reputation.D. Divest some businesses and retrench to a narrower diversification base.E. Broaden the diversification base.
Q:
Discuss in some detail the difference between a localized multidomestic strategy and a global strategy, and give the pros and cons of each.
Q:
Briefly discuss why a domestic company desirous of entering foreign markets might see attractive advantages in forming strategic alliances with foreign companies.
Q:
Dispersing the performance of value chain activities to many different countries rather than concentrating them in a few country locations tends to be advantageous
A. when high transportation costs make it expensive to operate from central locations.
B. whenever buyer-related activities are best performed in locations close to buyers.
C. when diseconomies of large size exist, thereby making it more economical to perform an activity on a smaller scale in several different locations.
D. when it is desirable to hedge against (1) the risks of fluctuating exchange rates (such risks are greater when activities are concentrated in a single location); (2) supply interruptions (due to strikes, mechanical failures, or transportation delays); or (3) adverse political developments.
E. All of these choices are correct.
Q:
The competitive strategy of a firm pursuing a think global, act local approach to strategy making
A. entails little or no strategy coordination across countries.
B. usually involves cross-subsidizing the prices in those markets where there are significant country-to-country differences in the product attributes that customers are most interested in.
C. involves selling a mostly standardized product worldwide but varying a company's use of distribution channels and marketing approaches to accommodate local market conditions.
D. is essentially the same in all country markets where it competes, but it may nonetheless give local managers room to make minor variations where necessary to better satisfy local buyers and to better match local market conditions.
E. involves having strongly differentiated product versions for different countries and selling them under distinctly different brand names (one for each country or group of neighboring countries) so that there will be no doubt in customers' minds that the product is more local than global.
Q:
When a company operates in the markets of two or more different countries, its foremost strategic decision is
A. whether to use strategic alliances to help defeat its rivals.
B. whether to vary the company's competitive approach to fit specific market conditions and buyer preferences in each host country or whether to employ essentially the same strategy in all countries.
C. whether to maintain a national (one-country) manufacturing base and export goods to the other countries.
D. which foreign companies to team up with via strategic alliances or joint ventures.
E. whether to test the waters with an export strategy before committing to some other competitive approach.
Q:
Which is not one of the four conditions that make entry via an internally developed start-up strategy in a foreign country appealing?
A. When creating an internal start-up is cheaper than making an acquisition
B. When adding new production capacity will adversely impact the supply-demand balance in the local market
C. Having the ability to gain good distribution access
D. Having scale economies to compete against local rivals
E. All of these choices are correct.
Q:
Establishing a wholly owned subsidiary in a foreign market to take advantage of all essential value chain activities requires a strategy that
A. establishes a wholly owned subsidiary.
B. acquires a foreign company.
C. supports direct control over all aspects of operating in a foreign market.
D. establishes a start-up operation.
E. All of these choices are correct.
Q:
The strategic options for expansion into foreign markets include
A. employing a franchising strategy.
B. maintaining a national (one-country) production base and exporting goods to foreign markets.
C. licensing foreign firms to produce and distribute one's products.
D. establishing a subsidiary in a foreign market.
E. All of these choices are correct.