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Q:
(p. 70) Philanthropy without active engagement
A. Is the best corporate move to satisfy the governmental regulations
B. Helps organizations win the competitive war on consumerism
C. Has been criticized as narrow and self-serving
D. Is like mission without vision
Q:
In general, imitation can occur in one of two ways: direct duplication or substitution.
Q:
(p. 70) According to research, the primary vehicle for achieving superior financial performance from social responsibility is via
A. Gift giving
B. Global marketing efforts
C. Internal audit effects
D. Reputation effects
Q:
(p. 70) Recent research has found that, on balance, ______ relationships can be expected from CSR.
A. Negative
B. Positive
C. No
D. Inverse
Q:
A sustained competitive advantage can be competed away by strategic imitation.
Q:
(p. 70) The CSR debates have surfaced in a more positive way in the last 30 years due to which of these?
A. Government mandates
B. Competitive pressures
C. New businesses set up shop with altruism in mind
D. Declining shares of U.S. businesses in the global markets
Q:
When firms without a resource or capability face a cost disadvantage in obtaining or developing it compared to firms that already possess it, this resource or capability is described as perfectly imitable.
Q:
(p. 71) A form of engagement in which companies provide on going and sustained commitments to a social project or issue refers to
A. CSI
B. CSR
C. Social audit
D. Economic responsibilities
Q:
In general, as long as the number of firms that possess a particular valuable resource or capability is less than the number of firms needed to generate perfect competition dynamics in an industry, that resource can be considered rare and a potential source of competitive advantage.
Q:
Most firms have a resource base that is composed primarily of valuable but common resources and capabilities, some of which are essential if a firm is to gain competitive parity.
Q:
(p. 78) Which of these refers to the moral principles that reflect society's beliefs about the actions of an individual or group that are right and wrong?
A. CSR
B. Social audit
C. Ethics
D. Utilitarian approach
Q:
A resource can be a source of competitive advantage even if the resource is controlled by numerous firms.
Q:
(p. 67) In addition to monitoring and evaluating firm social performance, managers use social audits for all of these EXCEPT
A. Scan the external environment
B. Obtain governmental subsidies for their operations
C. Institutionalize CSR within the firm
D. Determine firm vulnerabilities
Q:
(p.67-68) Which of these is NOT true about social audit?
A. Given the availability of complete information and programs, to be comprehensive and accepted by the general public, a social audit must be conducted by the company itself
B. A social audit attempts to measure a company's actual social performance against the social objectives it had set for itself
C. The social audit may be used for more than simply monitoring and evaluating firm social performance
D. Once the social audit is complete, it may be distributed both internally and externally
Q:
Primary value chain activities include activities such as inbound logistics, outbound logistics, sales and marketing and services.
Q:
(p. 67) Which of these attempts to measure a company's actual social performance against the social objectives it has set for itself?
A. Social audit
B. Mission statement
C. Sarbanes-Oxley Act
D. Discretionary responsibilities
Q:
The value chain model developed by McKinsey and Company divides value-creating activities into two large categories: primary activities and support activities.
Q:
If a firm creates environmental pollution in the process of manufacturing its goods, the pollution is known as an externality.
Q:
Briefly describe the problems that can result from agency and what steps can be taken to resolve them.
Q:
How do moral hazard and adverse selection cause agency problems?
Q:
A firm's value chain is the set of business activities in which it engages to develop and produce, but not to market, its products and services.
Q:
Define agency theory. What are agency costs?
Q:
The value of a firm's resources and capabilities will generally manifest itself in either higher revenues or lower costs or both once a firm starts using these resources and capabilities to exploit opportunities or neutralize threats.
Q:
Who are the board of directors? What are their major responsibilities?
Q:
In general, firms that use their resources and capabilities to exploit opportunities to neutralize threats will see no increase in their net revenues nor a decrease in their net costs compared to the situation where they are not using these resources and capabilities to exploit opportunities or neutralize threats.
Q:
How is a vision statement different from a mission statement?
Q:
Within the VRIO framework, resources and capabilities that are not valuable are also known as weaknesses.
Q:
Identify and briefly explain the newest trends in mission components.
Q:
Within the VRIO framework, valuable resources and capabilities are also known as strengths.
Q:
In the VRIO framework, the R represents resources.
Q:
What is meant by company self-concept? Why is it an important mission statement component?
Q:
Differentiate between company philosophy and public image. Why should organizations care to have either or both of these in its mission?
Q:
A firm's plant and equipment, its geographic location and its access to raw materials are all examples of physical resources.
Q:
What are the three economic goals that guide the strategic direction of business organizations? Explain each of them briefly.
Q:
Inputs whose quantity of supply is fixed and whose demand does not respond to price increases are said to be elastic in supply.
Q:
Identify and briefly describe the three indispensable components of the mission statement.
Q:
The assumption of resource immobility holds that it may be very costly for firms without certain resources and capabilities to develop or acquire them.
Q:
When a mission statement is redefined or revised, what components should be present? Explain.
Q:
One of the key assumptions of the RBV is resource homogeneity.
Q:
Briefly describe the process of defining the company mission for a specific business.
Q:
Organizational resources include the training, experience, judgment, intelligence, relationships and insight of individual managers and workers in a firm, while human resources are an attribute of collections of individuals.
Q:
Define mission statement. Describe the importance of developing an explicit mission statement.
Q:
Financial resources include only the profits a firm has made earlier in its history and that it has reinvested in itself.
Q:
(p. 42) Backloaded compensation refers to
A. Board of directors getting back stock as compensation
B. Executives receiving handsome premium for superior future performance
C. Suppliers getting bonuses for organization's performance
D. Managers getting bonuses for past performances
Q:
Resources in the resource based view are defined as the tangible and intangible assets that a firm controls, which it can use to conceive of and implement its strategies.
Q:
(p. 42) Which of these represent a solution to the agency problem?
A. Backloaded compensation for executives
B. Separate the interests of the owners and agents
C. Minimize executive risk-taking
D. Focus performance measures on personal goals of executives
Q:
Capabilities are a subset of a firm's resources and are defined as tangible and intangible assets that enable a firm to take full advantage of other resources it controls.
Q:
(p. 42) Managers stature in the business community is commonly associated with company
A. type
B. age
C. size
D. growth
Q:
Define the nature of competitive dynamics and identify three reasons why a firm might not respond to another firm's competitive advantage.
Q:
(p. 41-42) Which of the following is NOT a problem resulting from agency?
A. Executive attempt to diversify their corporate risk
B. Executives avoid risks
C. Executives pursue growth in company earnings rather than size
D. Executives act to protect their status
Q:
(p. 40) Which of these represent the most popular solution to moral dilemma and adverse selection problems?
A. To more closely align the owners and agents interests through the use of executive bonus plans
B. To allow the managers to act more as hired-hands only
C. To remove vision components from mission
D. To ensure board of directors report and work for the CEO
Q:
Discuss the questions underlying the VRIO framework and use these questions to differentiate between a simple distinctive competence and a sustained distinctive competence.
Q:
(p. 40) An agency problem caused by the limited ability of stockholders to precisely determine the competencies and priorities of executives at the time they are hired refers to
A. Self-concept
B. Adverse selection
C. Moral hazard problem
D. Concern for quality
Q:
Identify four components of a firm's organization that are relevant to the question of organization and discuss what role they play in building a competitive advantage.
Q:
(p. 40) When executives manipulate personnel records to keep or acquire key company personnel, this is an example of
A. Moral hazard problem
B. Adverse selection
C. Self-concept
D. Concern for quality
Q:
Identify two forms of imitation and describe four sources of costly imitation.
Q:
(p. 38) When owners have limited access to company information making executives free to pursue their own interests refers to
A. Moral hazard problems
B. Adverse selection
C. Self-concept
D. Concern for quality
Q:
Discuss whether a firm must be must be the only one to possess a valuable resource or capability in order for the firm to benefit from the resource or capability's rarity or if other firms may own it as well.
Q:
(p. 40) When executives presell products at year-end to trigger their annual bonuses even though the deep discounts that they must offer will threaten the price stability of their products for the upcoming year, this is an example of
A. Moral hazard problem
B. Adverse selection
C. Self-concept
D. Concern for quality
Q:
Define the concept of a value chain and distinguish between two commonly used value chain models.
Q:
(p. 40) When executives unrealistically assess acquisition targets outlooks in order to increase the probability of increasing organizational size through their acquisition, this is an example of
A. Moral hazard problem
B. Adverse selection
C. Self-concept
D. Concern for quality
Q:
Identify the four questions represented in the VRIO framework that one must ask about a resource or capability to determine its competitive potential.
Q:
Identify and describe the two fundamental assumptions about the resources and capabilities that firms may control that the RBV rests on.
Q:
(p. 38) Which of these conditions is also called shirking?
A. Moral hazard problems
B. Adverse selection
C. Self-concept
D. Concern for quality
Q:
Identify the four broad categories that a firm's resources and capabilities can be classified into.
Q:
(p. 38) Which of these conditions is also called self-interest combined with a smile?
A. Moral hazard problems
B. Adverse selection
C. Self-concept
D. Concern for quality
Q:
Describe the difference between resources and capabilities.
Q:
(p. 38) The cost of agency problems and the cost of actions taken to minimize them are called
A. Moral hazard problems
B. Adverse selection
C. Company creed
D. Agency costs
Q:
(p. 38) In general, ____ seek stock value maximization.
A. Employees
B. Hired-hand managers
C. Owners
D. Suppliers and distributors
Q:
The Bates Company has been producing tools for over fifty years. In that time the company has been acknowledged as a producer of high quality tools at a reasonable price. Bates competitive prices can be attributed to three factors. First, the company recognized early in its development that tools made from specific blends of various types of metal were less costly to produce and had superior performance compared to traditional metals. Accordingly, Bates made investments in developing tools made for specialty metals long before other competitors and has made a series of investments over its operating history that have put it far ahead of its competitors in terms of product development. Industry analysts believe that based on these investments it would be difficult and extremely costly, if it were even possible, for rivals to catch up with Bates. Second, in recognizing the importance of certain metals, Bates was able to sign long-term contracts with suppliers of the metals that have provided Bates with a lasting cost advantage. Finally, Bates maintains its cost advantages by using a thorough budgeting and reporting system that allows it to closely control costs, and these systems are supported by a frugal company culture and financial incentives that reward employees for finding ways to save money throughout the company.It would be costly for competitors to duplicate Bates due toA) path dependence and causal ambiguity.B) causal ambiguity and unique historical conditions.C) path dependence and unique historical conditions.D) causal ambiguity and patents.
Q:
(p. 38) Agency problems arise when the interests of owners and managers
A. diverge
B. converge
C. are compatible
D. are similar
Q:
(p. 38) _______ delegate authority to ______
A. owners; managers
B. managers; owners
C. managers; suppliers
D. customers; managers
Q:
(p. 38) Whenever there is a separation of the owners (principals) and the managers (agents) of a firm, the potential exists for the wishes of the ____ to be ignored.
A. owners
B. managers
C. employees
D. customers
Q:
(p. 38) A set of ideas on organizational control based on the belief that the separation of the ownership from management creates the potential for the wishes of owners to be ignored refers to the
A. Agency theory
B. Adverse selection principle
C. Moral hazard problem
D. Self concept
Q:
LaserTech is a manufacturer of industrial lasers and has developed a new, patented technology that allows its customers to manufacture their products more precisely with a higher level of consistency and at a lower cost than they could previously. LaserTech's executives believe that no rivals have a similar technology and that it would be very difficult for rivals to copy this technology since the benefits of the new technology can only be realized within LaserTech's system, which includes processes that are protected by trade secrets, making it difficult for rivals to understand the relationship between the company's new technology and its competitive advantage.The inability of rivals to develop or acquire technology similar to that of LaserTech is an illustration ofA) resource immobility.B) resource heterogeneity.C) causal ambiguity.D) path dependence.
Q:
(p. 38) The board of director's greatest impact on the behavior of a firm results from its
A. Industry experience
B. Dependence on the CEO
C. Determination of company mission
D. Mandate of company compliance with legal and ethical dictates
Q:
(p. 36) Which of these is NOT a responsibility of the board of directors?
A. To establish and update the company mission
B. To mandate company compliance with legal and ethical dictates
C. To determine the amount and timing of the dividends paid to stockholders
D. To work under the guidance of the CEO
Q:
(p. 36) In overseeing the management of a firm, the board of directors operates as representatives of the
A. Governmental agencies
B. Firms stockholders
C. Firms employees
D. Top management
Q:
(p. 36) A companys Board of Directors is elected by its
A. managers
B. stockholders
C. customers
D. employees
Q:
(p. 36) The strategic managers at the highest level of the organization:
A. Review employee complaints
B. Declare the firm's sense of values
C. Are appointed
D. Prepare budgets