Strategic Management (B&M) - RUG - Practice exam (1)

Questions

Question 1

According to Mintzberg (2.4 Decision-making: It's not what you think), which decision-making approach is associated with organizational behavior, Karl Weick, and the following process: enactment => selection => retention ?

1. Doing first
2. Being first
3. Thinking first
4. Seeing first

Question 2

Which approach claims that powerful people with the firm prevent learning in order to maintain their own power base?

1. Knowledge-based view
2. Institutionalism
3. Communities of practice
4. Neo-institutionalism

Question 3

In the context of efficient production and plant size, indivisibility means that:

1. economies of scope require certain combinations of products to be produced together.
2. co-specialized assets that must be kept together.
3. the slope of the learning curve will be much steeper initially.
4. an input cannot be scaled down below a minimum size, and can only be scaled up in multiples of that size.

Question 4

In Prospect theory, the relationship between outcomes and the value of those outcomes is drawn as:

1. A straight line
2. An S-shaped curve
3. A U-shaped curve
4. An inverted U-shaped (bell) curve

Question 5

In the Turnbell report, which type of risk is associated with the following issues: loss of key people, succession problems and reputation damage?

1. Compliance risk
2. Operational risk
3. Strategic risk
4. Financial risk

Question 6

Which of Porter’s generic strategies is associated with a narrow market scope and commodity products?

1. Cost focus
2. Differentiation focus
3. Cost differentiation
4. Differentiation

Question 7

Which of the following is not true about strategic groups?

1. Firm profits are very similar within groups, and very different across groups.
2. Groups differ in terms of how much the firms compete within the group.
3. Groups differ in terms of the amount of bargaining power they have with customers and/or suppliers.
4. Some groups might be more affected by substitute products than other groups.

Question 8

According to Mintzberg (Decision-making: It's not what you think), which decision-making approach is most appropriate when many elements have to be combined into creative solutions, commitment on those solutions is key, and communication across boundaries is essential?

1. Doing first
2. Being first
3. Seeing first
4. Thinking first

Question 9

Which of the following is the most effective way to transfer tacit knowledge to new workers?

1. They should attend university courses covering that topic.
2. They should read a report in which an expert in the firm has written down all the key points.
3. They should work as an apprentice with frequent and close contact with an expert.
4. They should read technical journals and trade publications on that issue.

Question 10

Which organizational structure enables business managers to maximize economies of specialization, by allowing them to focus on their products and markets, while freeing corporate managers from the distractions of day-to-day operations?

1. M-form.
2. Functional Holding.
3. U-form.
4. All of the above.

Question 11

Barney discusses several reasons why a resource would be imperfectly imitable (hard to copy perfectly). Which of the following is not one of these reasons?

1. social complexity
2. unique historical conditions
3. causal ambiguity
4. low substitutability

Question 12

In transaction cost economics (Network Level Strategy), the term “hierarchy” essentially refers to:

1. The ranking of transaction partners based on (potential) profitability for the firm.
2. A perfect market.
3. A firm.
4. All of the above.

Question 13

In agency theory, who is (are) the principal(s)?

1. The managers (in general)
2. The CEO
3. The shareholders
4. Labour

Question 14

Which of the following is NOT one of the perspectives in the balanced scorecard?

1. external environment (buyer/supplier power, substitutes, potential entrants)
2. customer (new products, speed of response, preferred supplier)
3. financial (survival, success, future prospects)
4. innovation (technology leadership, product innovation)

Question 15

Which type of acquisition integration approach has a high strategic direction from the centre and a high need for resource transfer?

1. Collaboration
2. Subjugation
3. Intensive care
4. Arm’s length

Question 16

Porter discusses three generic strategies. Which of the following is necessarily true regarding a focus strategy? The firm focuses on:

1. a specific market segment and does not try to attract other types of buyers.
2. one business unit (SBU) and harvests/liquidates/divests other parts of the corporation.
3. one product characteristic that is important to buyers in the general market.
4. all of the above.

Question 17

When an outcome depends greatly on the events that took place leading up to it, it is often impossible to reproduce that outcome. This is referred to as:

1. radical innovation.
2. externalities.
3. discontinuous technology.
4. path dependency.

Question 18

In the material from Lecture 1, Rumelt gives four criteria for evaluating a strategy. Which criterion has to do with making sure that the strategy does not overwhelm the available resources?

1. Consistency
2. Advantage
3. Consonance
4. Feasibility

Question 19

Richard Branson runs Virgin using norms and values like “question authority” and “staff first, then customers and shareholders.” In terms of Mintzberg’s five P’s for strategy (in Lecture 1), this reflects the view of strategy as:

1. Pattern.
2. Position.
3. Perspective.
4. Ploy

Question 20

Which term refers to the core value of a product regardless of the number of users?

1. Consumer surplus
2. Autarky value
3. Network externalities
4. Synchronization value

Question 21

According to Mintzberg & Waters, the term “unrealized strategy” refers to

1. Deliberate strategies that did not achieve the desired performance levels in terms of market share, ROI, etc.
2. A set of actions (tactics) that already emerged, but managers have not recognized the pattern.
3. Strategies that exist at a (Freudian) subconscious level.
4. Intended strategies that were not implemented (not put into action).

Question 22

According to Argyris & Schoon, what type of learning is associated with individuals, groups and organization adjusting their behavior according to fixed organizational goals, norms, and assumptions?

1. Exploration
2. Single loop
3. Second order
4. Generative

Question 23

According to Hamel, Doz & Prahalad (Collaborate with Your Competitors and Win), the most stable and effective alliances would be among which types of partners?

1. two small firms
2. two large firms
3. two moderately sized firms
4. a large firm and a small firm

Question 24

Which of the following factors has the least influence on intensity of rivalry in Porter’s Five Forces model?

1. Major exit barriers
2. Several equally strong players
3. Few chances for differentiation
4. Sideways competition

Question 25

According to Barney (the resources-based view), entry barriers can only provide a sustainable competitive advantage under which condition(s)?

1. Resources must be homogeneously distributed across firms.
2. Resources are perfectly mobile.
3. All of the above.
4. None of the above.

Question 26

Which of the following routes is called the ‘success route’ in the BCG Growth-Share Matrix?

1. Dog - Star - Cash Cow
2. Dog - Question Mark - Star
3. Question Mark - Star - Cash Cow
4. Question Mark - Cash Cow - Star

Question 27

Barney (the resources-based view) lists several criteria that are associated with a sustainable competitive advantage. How should these criteria be interpreted when analyzing the firm’s resources?

1. For each separate criterion, try to find at least one resource that fits it.
2. A weak rating on one or more criteria means that the resource could not support a sustainable competitive advantage.
3. Throw out the high and low scores on the criteria and take the middle (median) score for each resource as the most representative score.
4. Emphasize just the high scores on the strongest criteria; the weaker scores are irrelevant.

Question 28

According to Freeman & Reed (Stockholders and Stakeholders), what set of actors might use political power in a “Real world” stakeholder grid?

1. Actors with an equity stake
2. Actors with an economic stake
3. Actors known as influencers
4. All of the above

Question 29

Porter discusses three generic strategies. Which of the following is true regarding a differentiation strategy?

1. A firm selects a unique position on one or more attributes (dimensions) that are important to buyers in general.
2. A corporation is split into a number of different strategic business units (SBUs).
3. A single firm develops a broad portfolio of products targeting a number of different markets.
4. A firm identifies the needs of a specific group of buyers and tailors its strategy to serve that group to the exclusion of other groups.

Question 30

A musician might have more skills and resources than her rivals to create hit songs. However, if the recording studios have too much power, they get rich and the musician gets virtually nothing. According the resource-based view, what kind of problem is the musician facing?

1. Path dependence
2. Inimitability
3. Appropriability
4. Social complexity

Question 31

What do McGee et al say about the proportion of dogs that realistically should be the portfolio?

1. Virtually all dogs should be divested to bring the percentage of dogs in the portfolio close to zero.
2. Corporations should invest in dogs to change (up to half of) them into cash cows for a balanced portfolio.
3. By definition, most businesses are dogs and the wholesale divestment of dogs by all corporations is logically impossible.
4. None of the above.

Question 32

What does the following refer to: a constraining process that forces one unit in the population to resemble other units that face the same set of environmental conditions?

1. co-evolution
2. network externalities
3. a PEST analysis
4. isomorphism

Question 33

What technique investigates what would happen if the assumptions underlying a strategic decision were questioned or changed?

1. sensitivity analysis
2. strategic decay
3. chaos theory
4. none of the above

Question 34

What type of resource is reputation?

1. Tangible
2. Relational
3. Competence
4. None of the above

Question 35

Critical success factors are those elements in the industry that are perceived to be important to:

1. shareholders.
2. competitors.
3. customers.
4. suppliers.

Question 36

Which of the following illustrates the concept of consumer surplus?

1. A firm only needs 1000 customers to survive, but it has 1,500.
2. You buy a car that is worth 20,000 to you, but you only pay 15,000 for it.
3. The existing firms are overwhelmed by too many consumers (demand > supply).
4. all of the above.

Question 37

What does punctuated equilibrium refer to?

1. All things being equal, firms will have normal profits.
2. Mobility barriers separate groups within an industry.
3. Periods of stability are interrupted by periods of change.
4. None of the above.

Question 38

The increasing utility that a user derives from the consumption of a product as the number of other users who consume the same product increases is, according to Katz and Shapiro (1985), referred to as:

1. Economies of scale
2. Complimentary consumption
3. Consumer surplus
4. Network externalities

Question 39

Which of the following best describes the concept of the learning curve?

1. Time-to-market decreases as a function of the number of innovations developed.
2. Technical performance increases in an S-shaped curve as a function of effort.
3. The ability to learn is normally distributed across firms (i.e., a bell-shaped curve).
4. Cost per unit drops as a function of the cumulative output (total number of units produced).

Question 40

According to the lecture material on network-level strategy, a strategic network can be described as

1. a market with a non-zero-sum game.
2. a hierarchy with a non-zero-sum game.
3. a market with a zero-sum game.
4. a cross between a clan and a hierarchy.

Answers