Q&A Hero

Q: (p. 59) Which of these incidents can be credited for the resurgence of environmentalism with formation of the Coalition for Environmentally Responsible Economics (CERES)? A. Exxon Valdez B. Johnson and Johnson's Tylenol case C. Arthur Anderson incident D. WorldCom

Q: ________ focus(es) on the relationship between the volume of production and a given point in time and average unit costs, the ________ focus(es) on the relationship between cumulative production and average costs. A) Economies of scale; learning curve B) Competitive advantage; economies of scale C) Learning curve; economies of scale D) Economies of scale; competitive advantage

Q: (p. 59) All of these are broad trends that are driving businesses to adopt CSR frameworks EXCEPT: A. The resurgence of environmentalism B. Increasing buyer power C. The globalization of business D. The technological developments

Q: If Temper Company, a manufacturer of mattresses, was considering moving its production facilities to China but decided against it because the additional costs of shipping the mattresses back to the U.S. would offset the cost savings associated with moving the production facilities, the increased costs associated with shipping would be an example of A) learning-curve economies. B) diseconomies of scale. C) economies of scale. D) competitive advantages.

Q: (p. 57) Which of these is NOT true about CSR and the bottom line? A. Some CSR activities incur no dollar costs at all B. Philanthropic activities of a corporation are undertaken at a discounted cost to the firm C. Socially responsible behavior comes at a prohibitive cost especially given the regulations D. Socially responsible practices may create savings and, as a result, increase profits

Q: Which of the following is not a potential source of diseconomies of scale? A) Physical limits to efficient size B) Worker de-motivation C) Distance to markets and suppliers D) Learning-curve economies

Q: ________ levels of production are associated with ________ levels of employee specialization. A) High, high B) High, low C) Low, high D) Low, moderated

Q: (p. 57) In the case of corporate social responsibility, costs and benefits are both ______ and ______. A. Social; political B. Ethical; discretionary C. Economic; social D. Political; ethical

Q: (p. 57) _______ is the idea that business has a duty to serve society in general as well as the financial interests of stockholders. A. Corporate social responsibility B. Discretionary responsibility C. Ethical responsibility D. Utilitarian responsibility

Q: According to the "two-thirds rule," it would cost a firm ________ to build a plant with a capacity of 100,000 units. A) 2/3*100,000 B) 100,000 / 2/3 C) 100,000 raised to the 2/3 power D) 2 * 100,000 / 3

Q: (p. 57) Managers need to know that, in the view of the general public, _______ and _______ responsibilities are required, _______ responsibility is expected and _______ responsibility is desired. A. Legal; ethical; economic; discretionary B. Economic; legal; ethical; discretionary C. Ethical; economic; discretionary; legal D. Legal; economic; discretionary; ethical

Q: The link between volume of production and the cost of building manufacturing operations is particularly important in industries characterized by A) process innovations. B) product manufacturing. C) product innovation. D) process manufacturing.

Q: (p. 57) Through _______, managers attempt to enhance the image of their companies, products and services by supporting worthy causes. A. Good citizenship B. Public relations activities C. Full corporate responsibilities D. Social audits

Q: As the volume of production in a firm increases, the average cost per unit decreases until some optimal volume of production is reached, after which the average costs of production begin to rise because of A) diseconomies of scale. B) economies of scope. C) diseconomies of scope. D) economies of scale.

Q: (p. 57) Public relations activities and good citizenship are examples of which responsibilities of a business organization? A. Legal B. Ethical C. Discretionary D. Economic

Q: ________ are said to exist when the increase in firm size (measured in terms of volume of production) are associated with lower costs (measured in terms of average costs per unit of production). A) Sustainable competitive advantages B) Economies of scale C) Temporary competitive advantages D) Economies of scope

Q: The best example of a firm following a cost-leadership business strategy is A) Mercedes Benz. B) Macy's. C) Wal-Mart. D) Rolls Royce.

Q: (p. 57) _______ responsibilities are those that are voluntarily assumed by a business organization. A. Legal B. Ethical C. Discretionary D. Economic

Q: A firm that chooses a ________ focuses on gaining advantages by reducing its cost below all of its competitors. A) diversification strategy B) product-differentiation business strategy C) corporate strategy D) cost-leadership business strategy

Q: (p. 53) _______ responsibilities are the most basic social responsibilities of the firm. A. Legal B. Ethical C. Economic D. Discretionary

Q: Cost-leadership and product-differentiation strategies are so widely recognized that they are often called A) common business strategies. B) generic corporate strategies. C) generic business strategies. D) common corporate strategies.

Q: (p. 55) Which responsibilities reflect the company's notion of right and proper business behavior? A. Ethical B. Economic C. Legal D. Discretionary

Q: Actions firms take to gain competitive advantages by operating in multiple markets or industries simultaneously are known as A) business-level strategies. B) corporate-level strategies. C) functional-level strategies. D) macro-level strategies.

Q: (p. 53) ________ responsibilities reflect the form's obligations to comply with the laws that regulate business activities. A. Discretionary B. Economic C. Political D. Legal

Q: Actions that firms take to gain competitive advantage in a single market or industry are known as A) business-level strategies. B) corporate-level strategies. C) functional-level strategies. D) macro-level strategies.

Q: (p. 53) The duty of managers, as agents of the company owners, to maximize stockholder wealth is referred to as ________ responsibilities. A. Legal B. Discretionary C. Economic D. Ethical

Q: The U in U-form structure stands for "unitary."

Q: (p. 53) Which of these represents the most basic responsibilities of business? A. Economic B. Political C. Legal D. Ethical

Q: Even the best formulated strategy is competitively irrelevant if it is not implemented.

Q: (p. 53) Which of the following is NOT a type of social commitment that strategic managers need to consider? A. Economic B. Political C. Legal D. Ethical

Q: (p. 53) Each firm regardless of ____ must decide how to meet its perceived social responsibility. A. Industry B. National origin C. Profitability D. Size

Q: Compensation at cost-leadership firms is usually tied directly to product innovation and customer service efforts.

Q: (p. 53) Which of these represent a pollution prevention strategy in an organization? A. Automation of manufacturing facility B. Transforming business from manufacturing to service operations C. Changing the materials used or redesigning how operations are bid out D. Creating a pollution pit and putting all waste in it monthly

Q: Cost-leadership firms are typically characterized by very tight cost control systems; frequent and detailed cost control reports; an emphasis on quantitative cost goals and targets; and close supervision of labor, raw materials, inventory, and other costs.

Q: Firms implementing cost-leadership strategies will generally adopt what is known as a functional organizational structure.

Q: (p. 52) Which of these are NOT outside stakeholders? A. Customers B. Stockholders C. Creditors D. Union

Q: In general, economies of scale and diseconomies of scale are relatively easy-to-duplicate bases of cost leadership.

Q: (p. 52) Individuals and groups who are stockholders or employees of firms are called: A. Outsiders B. Insiders C. Internal stakeholders D. A special interest group

Q: Cost advantages based on diseconomies of scale are likely to be rare.

Q: (p. 52) Which of the following are inside stakeholders? A. Board of directors B. Customers C. Suppliers D. Creditors

Q: (p. 52) Which of these is NOT a principal set of inputs to the company mission? A. Demands of stakeholder groups B. Identification of CSR auditors C. Managerial operating philosophy D. Determinants of the product market offerings

Q: When the efficient size of a firm or plant is significantly smaller than the total size of an industry, there will usually be numerous efficient firms/plants in that industry, and a cost-leadership strategy based on economies of scale will be rare.

Q: Sources of cost advantage that are unlikely to be rare include learning-curve economies, differential low-cost access to productive inputs and technological software.

Q: (p. 51) Fair competition is a: A. Customer claim B. Creditor claim C. Union claim D. Competitor claim

Q: (p. 51) Competitors as a stakeholder would have which of the following claims on a firm? A. Share in fringe benefits B. Election of board of directors C. Continuing source of business D. Business statesmanship on the part of peers

Q: If cost-leadership strategies can be implemented by numerous firms in an industry, or if no firms face a cost disadvantage in imitating a cost-leadership strategy, then being a cost leader does not generate a sustained competitive advantage for a firm.

Q: Given the relatively low margins of firms pursuing a cost-leadership strategy, firms pursuing this strategy are especially vulnerable to buyers having their revenues reduced to a point where they are unable to earn normal or above-normal performance.

Q: (p. 51) Professional relationship in contracting for, purchasing and receiving goods and services represent the claim of which of these stakeholders vis--vis the firm? A. Local communities B. Customers C. Suppliers D. Creditors

Q: (p. 51) Adequate working conditions, freedom from arbitrary and capricious behavior on the part of company officials and share in fringe benefits are claims of which of these stakeholders? A. Customers B. Employees C. Suppliers D. Competitors

Q: A cost-leadership competitive strategy can reduce both the threat of substitutes and the threat of suppliers that a firm may face.

Q: The threat of rivalry is increased when low-cost firms set their prices equal to those of higher cost competitors.

Q: (p. 51) Participation in distribution of profits and election of board of directors are claims of which of these stakeholders vis--vis the firm? A. Stockholders B. Customers C. Suppliers D. Government

Q: A cost-leadership competitive strategy helps reduce the threat of entry by creating cost-based barriers to entry.

Q: (p. 51) The demands of stakeholder groups constitute one principal set of inputs to the company A. Annual report B. Credit report C. Mission D. Public relations message

Q: Firms for whom the price of the products or services they sell is determined by market conditions and not by the individual decisions of the firms themselves are known as price makers.

Q: (p. 51) Freedom to participate in collective bargaining is a typical claim of which stakeholder group? A. Stockholders B. Creditors C. Employees D. Society

Q: In general, firms that are attempting to implement a cost-leadership strategy will choose to produce relatively simple standardized products that sell for relatively low prices compared to the products and prices of firms pursuing other business or corporate strategies.

Q: (p. 51) Continuing source of business is a typical claim of which stakeholder group? A. Stockholders B. Employees C. Suppliers D. Society

Q: (p. 51) Freedom from arbitrary and capricious behavior on the part of company officials is a typical claim of which stakeholder group? A. Stockholders B. Creditors C. Employees D. Society

Q: Technological software includes things like the quality of relations among labor and management, an organization's culture, and the quality of managerial controls.

Q: (p. 51) Security of pledged assets is a typical claim of which stakeholder group? A. Stockholders B. Employees C. Creditors D. Society

Q: Physical technology-based cost advantages apply only in manufacturing firms.

Q: (p. 51) Economic, social, and psychological satisfaction in the place of employment is a typical claim of which stakeholder group? A. Stockholders B. Creditors C. Employees D. Society

Q: One of the least important productive inputs in almost all companies is labor and it is unlikely that differential low cost access to labor can give a firm a cost advantage.

Q: (p. 50) The claims of various stakeholder groups often A. converge B. submerge C. conflict D. blend

Q: Productive inputs are any supplies used by a firm in conducting its business activities.

Q: (p. 50) The process of reconciliation of the claims made on the firm is necessary because A. The number of claims against any firm is so large B. The government mandates that reconciliation be achieved C. The claims of various groups often conflict D. A firm is susceptible to liability suits

Q: Differential low-cost access to productive inputs may create cost differences among firms producing similar products in an industry.

Q: (p. 50) With regards to stakeholders' specific claims vis--vis the firm, the claims of various stakeholders groups A. Are always in sync B. Are never resolved C. Must be ignored D. Often conflict

Q: Efforts to move down the learning curve quickly by acquiring market share are likely to generate only normal economic performance.

Q: (p. 50) Which of these is NOT a step in incorporating the interests of stakeholders into its mission statement? A. Identification of stakeholders B. Understanding the stakeholders' specific claims vis--vis the firm C. Incorporating all the claims of various stakeholders into the mission with equal emphasis D. Coordination of the claims with other elements of the company mission

Q: Learning curve-cost advantages are restricted solely to manufacturing and the advantage associated only with the manufacturing business function.

Q: (p. 50) Which of these stakeholders, according to a survey of board of directors, was perceived to be least important? A. Government B. Society C. Employees D. Stockholders

Q: If a firm gets too large, it will eventually experience both diseconomies of scale and an increase in costs associated with the learning-curve effect as cumulative volume of production grows.

Q: (p. 50) According to a survey of over 2000 board of directors, which of these stakeholders were perceived to be most important? A. Stockholders B. Employees C. Customers D. Society

Q: Economies of scale focus on the relationship between the cumulative volume of production and average unit costs, while the learning curve focuses on the relationship between the volume of production at a given time and average unit costs.

Q: (p. 50) A firms claimants are sometimes referred to as its A. Board B. Institutions C. Stakeholders D. Top management

Q: The link between cumulative volumes of production and cost has been formalized in the concept of the learning curve.

Q: (p. 50) A firms claimants are collectively referred to as A. Stockholders B. Employees C. Stakeholders D. Customers

Q: Large transportation costs can offset cost reductions attributable to the exploitation of economies of scale in manufacturing.