Q&A Hero

Q: Identify the types of control systems that are appropriate for firms pursuing a cost-leadership strategy.

Q: (p. 102) Access to distribution channels is a major source of which competitive force? A. Bargaining power of buyers B. Threat of entry C. Threat of substitute products D. Bargaining power of suppliers

Q: Identify the most appropriate organizational structure for a firm pursuing a cost-leadership strategy, and identify the two basic responsibilities of the CEO in this type of organization.

Q: (p. 98) In the economists' "perfectly competitive" industry jockeying for position is unbridled and entry to the industry is A. Very easy B. Prohibited by regulations C. Moderated due to national security concerns D. Very hard

Q: Identify which bases of cost leadership are more likely to be rare and costly to imitate.

Q: (p. 102) Differentiation of inputs represents a determinant of A. Entry B. Rivalry C. Buyer power D. Supplier power

Q: Identify how cost leadership helps neutralize each of the major threats in an industry.

Q: (p. 100) Brand identity is a determinant of which of these forces driving industry competition? A. Entry B. Rivalry C. Buyer power D. Supplier power

Q: Discuss the difference between the learning curve and economies of scale.

Q: (p. 100) Which of these is a determinant of entry, according to Porter? A. Presence of substitute input B. Ability to backward integrate C. Exit barriers D. Economies of scale

Q: Identify four reasons why economies of scale can exist and four reasons why diseconomies of scale can exist.

Q: (p. 99) Which of these, according to Porter is NOT a force driving industry competition? A. Threat of new entrants B. Bargaining power of buyers C. Bargaining power of distributors D. Threat of substitutes

Q: Identify six reasons firms can differ in their costs.

Q: (p. 98) Collectively, competitive forces determine the ultimate: A. Growth of a firm B. Survival of a firm C. Profitability of a firm D. Viability of a firm

Q: Differentiate between business strategies and corporate strategies and define the nature of a cost-leadership strategy.

Q: (p. 98) The state of competition is an industry, according to Porter, depends on ______ basic forces. A. 3 B. 5 C. 8 D. 2

Q: Sematech is a producer of computer chips. To gain an advantage over other computer chip makers, Sematech focuses on reducing its costs below all of its competitors and has aligned its value chain accordingly. Recently, several of Sematech's competitors have begun to reduce the company's competitive advantage. In response to this threat, Sematech has decided to add production capacity in an effort to lower costs.If Sematech were to choose to narrow its product line in an effort to reduce costs, this would be an example ofA) technological software.B) a policy choice.C) a competitive advantage.D) a learning-curve effect.

Q: (p. 97) All of these are key characteristics of eco-efficient corporations EXCEPT A. Eco-efficiency is insular B. Eco-efficient firms are proactive C. Eco-efficiency is designed in D. Flexibility is imperative for eco-efficient strategy implementation

Q: (p. 97) Which of these represent a key characteristic of eco-efficient corporations? A. Eco-efficient firms are reactive B. Eco-efficiency is added on C. Flexibility is imperative for eco-efficient strategy implementation D. Eco-efficiency is insular

Q: (p. 97) One of the most important steps a firm can take in achieving a competitive position with regard to the eco-efficiency strategy is to A. Outsource the operations to a developing country B. Fully capitalize on technological developments C. Shift from service to manufacturing operations D. Mandate that all suppliers, distributors and customers reduce their resource consumption

Q: (p. 95) Company actions that produce more useful goods and services while continuously reducing recourse consumption and pollution refers to A. Product differentiation B. Economics of scale C. Barriers to entry D. Eco-efficiency

Q: (p. 96) Which of these is NOT an example of a federal ecological legislation? A. Air Quality Act B. Refuse Act C. Occupational Safety and Health Act D. Resource Recovery Act

Q: (p. 95) Business is now being held responsible for: A. Using only underground dumping sites B. Cleaning up its previous environmental damage C. Municipal sewer systems D. Ensuring that a "thermal blanket" is created

Q: (p. 93) Threats to life-supporting ecology caused principally by human activities is an industrial society are commonly referred to as A. Technology B. Co-efficiency C. Pollution D. Product differentiation

Q: (p. 93) The term ______ refers to the relationships among human beings and other living things and the air, soil and water that supports them. A. Pollution B. Ecology C. Operating environment D. Remote environment

Q: (p. 93) The quasi-science of anticipating environmental and competitive changes and estimating their importance to an organizations operation refers to A. Technological forecasting B. Ecology C. Industry environment D. Operating environment

Q: (p. 93) Awareness of technological changes in its industry helps the firm to: A. Interpret new regulations B. Act slowly and carefully C. Exploit new markets D. Forecast social change

Q: Firms implementing cost-leadership strategies will have ________ layers in their reporting structure. A) many B) relatively simple C) relatively few D) relatively complex

Q: (p. 92) Political activity may have a significant impact on which of the following governmental functions? A. Religious orientation B. Customer function C. Manufacturer function D. Social changes

Q: A marketing manager is an example of a(n) ________ manager. A) ambidextrous B) divisional C) functional D) unitary

Q: (p. 90) Encompassed in political considerations is/are: A. Social values B. Disposable income C. Anti-trust laws D. Age distribution

Q: In ________ structures, employees report to two or more people. A) unilateral B) functional C) divisional D) matrix

Q: (p. 90) Political factors define the ______ parameters within which firms must operate. A. Economic B. Legal and regulatory C. Global D. Social and cultural

Q: The U in U-form structure stands for A) "uniform." B) "unitary." C) "unilateral." D) "unambiguous."

Q: (p. 89) A profound social change in the recent years has been A. The accelerating interest of consumers and employers in quality of life issue B. The decelerating interest of foreigners seeking jobs and immigrant status in the U.S. C. The remarkably high placement of U.S. high school education in math and science in the world D. The global warming effect

Q: Cost-leadership firms are typically characterized by very ________ cost-control systems. A) tight B) flexible C) loose D) decentralized

Q: (p. 89) One of the most profound social changes in recent years is: A. The decreased population B. An increasing number of women in the workforce C. The heavy reliability of children in the workforce D. Increased education of U.S. citizens

Q: Which of the following compensation policies is most likely to enhance a firm's ability to pursue a low-cost strategy? A) Awarding employees bonuses based on the total amount of goods produced B) Awarding employees bonuses based on customer comment cards C) Awarding employees bonuses that are equal to 50% of the total cost savings achieved based on employee suggestions and initiatives D) Awarding employees bonuses based solely on how long they have been employed with the company

Q: (p. 89) The considerations involving the beliefs, values, attitudes and opinions of those in a firm's environment represent the ______. A. Social factors B. Personal factors C. Economic factors D. Political factors

Q: Firms pursuing a cost-leadership strategy are typically characterized by A) loose cost control systems. B) a de-emphasis on quantitative cost goals and costs. C) infrequent cost control reports. D) close supervision of labor, raw materials and inventory.

Q: (p. 87) When we consider the level of disposable income, we are normally considering: A. Technological factors B. Economic factors C. Political factors D. Social factors

Q: The only person in a functional organization to have a multifunctional perspective is the A) CFO. B) CEO. C) COO. D) marketing manager.

Q: (p. 87) Which environment compromises factors in the immediate competitive situation that affect a firm's success in acquiring needed resources? A. Industry B. Remote C. Economic D. Operating

Q: (p. 87) Supplier power is an example of a factor that falls within the _________ environment. A. Economic B. Operating C. Industry D. Remote

Q: In a functional structure, each of the major business functions is managed by a A) functional manager. B) divisional manager. C) chief executive officer. D) line manager.

Q: (p. 87) The ______ environment compromises factors that originate beyond and usually irrespective of, any single firm's operating situation. A. Remote B. Industry C. Operating D. Internal

Q: Firms implementing cost-leadership strategies will generally adopt a A) multidivisional structure. B) product divisional structure. C) functional organizational structure. D) matrix structure.

Q: (p.87) The factors beyond the control of the firm that influence its choice of direction and action, organizational structure and internal processes refers to A. Directional strategies B. External environment C. Organizational processes D. Internal environment

Q: Cost advantages based on learning-curve economies are A) rare, but they usually are not costly to duplicate. B) costly to duplicate, but they usually are not rare. C) both rare and usually costly to duplicate. D) not rare and usually are not costly to duplicate.

Q: (p. 87) The remote external environment includes: A. Creditors B. Industry factors C. Employee D. Ecological factors

Q: When managers committed to an incorrect course of action increase their commitment to this action even as its limitations become manifest, this is known as A) de-escalation of commitment. B) diseconomies of scale. C) escalation of commitment. D) economies of scale.

Q: Which of the following statements is accurate? A) In general, economies of scale are relatively easy-to-duplicate bases of cost leadership, but diseconomies of scale are not. B) In general, diseconomies of scale are relatively easy-to-duplicate bases of cost leadership, but economies of scale are not. C) In general, neither economies of scale nor economies are relatively easy-to-duplicate bases of cost leadership. D) In general, both economies of scale and diseconomies of scale are relatively easy-to-duplicate bases of cost leadership.

Q: (p. 87) A firm's external environment includes a remote sector, industry sector and an operating sector. The remote sector includes which of the following categories? A. Political, technological, economic and social B. Political, supplier power, economic and labor C. State government, production, social and economic D. Mission, company profile and competition

Q: Perhaps the only time economies of scale are not subject to low-cost duplication is when the ________ size of operations is a significant percentage of ________ in an industry. A) minimum; marginal demand B) efficient; total demand C) maximum; marginal demand D) efficient; marginal demand

Q: (p. 87) The external environment can be divided into various subcategories: A. Remote, political, social B. Remote, social, operational C. Remote, industry, operating D. Technological and social

Q: Which of the following is less likely to be a rare source of cost advantage? A) Technological software B) Learning-curve advantages C) Differential low-cost access to productive inputs D) Policy choices

Q: (p. 65) A major consequence of the 2000-2002 accounting scandals was the ______ . A. Sherman Antitrust Act B. Waxman-Hatch Act C. Enron Act D. Sarbanes-Oxley Act

Q: Which of the following is likely to be a rare source of cost advantage? A) Technological software B) If the efficient size of a firm or plant is significantly smaller than the total size of an industry C) Cost disadvantages based on diseconomies of scale D) Technological hardware

Q: (p. 66) Approximately _____ percent of senior corporate auditors now report directly to the Board of Directors audit committee. A. 30 B. 55 C. 75 D. 90

Q: (p. 65) The most significant change in the restructuring of governance structure due to the Sarbanes-Oxley Act is the A. Elimination of the external board members B. Heightened role of corporate internal auditors C. Removal of CFO from any overseeing role related to final financial statements D. Creation of inside corporate accountants reporting to external accounting firms

Q: Which of the following statements about cost leadership and the threat of buyers is accurate? A) If buyers demand increased quality or service, cost leaders can absorb these costs and may still have a cost advantage over the competition. B) Being a cost leader encourages buyer backward vertical integration. C) Firms pursuing a cost-leadership strategy are especially vulnerable to powerful buyers who insist on low prices or higher quality and service from their suppliers. D) Cost leaders are not able to absorb costs associated with buyers' demands for increased quality or service.

Q: (p. 65) A major consequence of the Sarbanes-Oxley Act has been the A. Political fallout in the Congress B. Outsourcing of jobs in lower wage countries C. Super growth in accounting firms in the U.S. D. Restructuring of the governance structure of American corporations

Q: If the potential responses of competing firms are likely to be very detrimental to the costs advantages of cost leaders, firms pursuing a cost-leadership competitive strategy should A) drop their prices below competitors' prices to increase overall economic performance through increased volumes of profitable sales. B) raise their prices above competitors, increasing overall economic performance through higher margins. C) focus on a specific niche market to avoid direct competition with aggressive competitors. D) set their prices equal to competitors' prices, sacrificing some market share for increased profit margins and the release of less information.

Q: Which of the following statements is accurate? A) A cost-leadership competitive strategy increases the threat of new entrants by lowering cost-based barriers to entry. B) Firms with a low-cost position can reduce the threat of rivalry in an industry. C) Cost leaders are especially vulnerable to substitute products. D) Cost leaders are especially vulnerable to the threat of suppliers.

Q: (p. 65) If a company must restate its financial statements, per the Sarbanes-Oxley Act, the A. CEO and CFO must relinquish any bonus or incentive-based compensation B. CEO and CFO must resign C. CFO is prosecuted for falsifying information while CEO is charged a penalty D. CEO must find a new board of directors for the company

Q: Firms for whom the price of the products or services they sell is determined by market conditions and not by the individual decision of the firms are known as A) profit takers. B) price makers. C) price takers. D) profit makers.

Q: (p. 65) The Sarbanes-Oxley Act includes provisions restricting the corporate control of all of these EXCEPT A. Attorneys B. Customers C. Executives D. Accounting firms

Q: Choices that firms make about the kinds of products and services they will sell that impact their relative cost position are known as A) technological hardware. B) policy choices. C) technological software. D) corporate level strategies.

Q: (p. 63) Which of these is true about Sarbanes-Oxley Act? A. The CEO and CFO must verify every report containing the company's financial statements B. The directors and executive officers are required to trade the company's 401(k) plan, profit sharing plan and retirement plan during the black out period C. Companies are required to extend personal loans to its executives and directors D. The Act requires that the audit committee must be composed entirely of inside officers

Q: The quality of relations among labor and management, an organization's culture, and the quality of management controls are all examples of A) technological hardware. B) technological software. C) productive inputs. D) economies of scale.

Q: (p. 62) Which law revised and strengthened auditing and accounting standards? A. Federal Fair Packaging and Labeling Act B. Sarbanes-Oxley Act C. Truth in Lending Act D. National Environmental Policy Act

Q: Machines and robots are examples of A) technological software. B) economies of scale. C) learning-curve effects. D) technological hardware.

Q: (p. 61) One of the most contentious social responsibility issues confronting multinational firms pertains to A. Animal welfare B. Children C. Working conditions D. Human rights

Q: In order to create a cost advantage, the cost of acquiring low-cost productive inputs must be ________ the cost savings generated by these factors. A) greater than B) equal to C) less than D) greater than or equal to

Q: (p. 60) Which of these is the largest and fastest growing segment of social investing? A. Guideline portfolio investing B. Global investing C. Stockholder activism D. Ethical and economic responsibilities

Q: ________ are any supplies used by a firm in conducting its business activities. A) Productive assets B) Productive inputs C) Productive outputs D) Productive inventory

Q: (p. 60) Large-scale social investing can be broken down into the two broad areas of A. Domestic and global B. Stockholder and stakeholder investing C. Guideline portfolio investing and shareholder activism D. Ethical and economic responsibilities

Q: Learning-curve-cost advantages are A) restricted only to manufacturing firms. B) restricted only to firms in services industries. C) restricted only to firms in extraction industries. D) not restricted to manufacturing.

Q: (p. 60) Much of the impetus for social investing originated with A. Educational systems B. Religious organization C. Small businesses D. Governmental regulations

Q: Which of the following statements regarding the learning curve and economies of scale is accurate? A) Just as diseconomies of scale are presumed to exist if a firm gets too large, there is a corresponding increase in costs in the learning-curve model as the cumulative volume of production grows. B) Where diseconomies of scale are presumed to exist if a firm gets too large, there is no corresponding increase in costs in the learning-curve model as the cumulative volume of production grows. C) Where diseconomies of scale are presumed to exist if a firm gets too small, there is no corresponding increase in costs in the learning-curve model as the cumulative volume of production grows. D) Just as diseconomies of scale are presumed to exist if a firm gets too small, there is a corresponding increase in costs in the learning-curve model as the cumulative volume of production grows.