Essentials of Strategic Management Ch4

/in /by

Evaluating a Company’s Resources, Capabilities, and
Competitiveness – CH4
1 Evaluating a company’s resources and
capabilities and competitive strength relative to its rivals using VRIN Tests
does not include developing answers to which one of the following questions?
A) Is the resource or capability rare?
B) How good is the company’s value chain?
C) Is the resource or capability competitively
valuable?
D) Is the resource or capability inimitable or
hard to copy?
E) Is the resource or capability
non-substitutable, or is it vulnerable to the threat of substitution from
different types of resources and capabilities?
2 Which one of the following is not a good
indicator of how well a company’s present strategy is working?
A) Whether it is achieving its stated
financial and strategic objectives.
B) Whether it is an above-average industry
performer.
C) Whether the firm’s sales and earnings are
increasing or decreasing.
D) Whether the company’s resource strengths
and competitive capabilities outnumber its resource weaknesses and competitive
vulnerabilities.
E) The rate at which new customers are acquired
and whether the company’s overall financial strength is improving or on the
decline.
3 Which one of the following groups of
characteristics is least likely to represent valuable company resources or
competitive capabilities?
A) Physical resources — state-of-the-art
manufacturing plants and equipment, efficient distribution facilities,
attractive real estate locations, or ownership of valuable natural resource
deposits.
B) Larger workforce, longer time in business,
lower profit margins, and smaller capital investment spend than rivals.
C) Intangible resources such as a well-known
brand name.
D) Organizational resources — information and
communication systems (servers, workstations, etc.), proven quality control
systems, and strong network of distributors or retail dealers.
E) Company culture — the norms of behavior,
business principles, and ingrained beliefs within the company.
4 Which
of the following statements is false?
A) A dynamic capability is the ability to
modify, deepen, or reconfigure the company’s existing resources and
capabilities in response to changes in the environment or market.
B) A company’s internal strengths should
always serve as the basis for its strategy.
C) Managers must look toward ing competitive
weaknesses that make the company vulnerable, dampen profitability, or
disqualify it from pursuing an attractive opportunity.
D) Managers need to keep close track of how
cost effectively the company can deliver value to customers relative to its
competitors.
E) None of the above.
5 Which of the following statements about market
opportunity is ?
A) Market opportunity is a big factor in
shaping a company’s strategy.
B)Depending on the prevailing circumstances, a
company’s opportunities can be plentiful or scarce and can range from wildly
attractive to unsuitable.
C) In evaluating the attractiveness of a
company’s market opportunities, managers have to guard against viewing every
industry opportunity as a suitable opportunity.
D) Answers A and B.
E) All of these.
6 A company that is at a disadvantage in the
marketplace because it lacks competitively valuable resources possessed by
rivals _______________
A) should adopt a new competitive strategy
that might better match the circumstances of the marketplace.
B) should abandon strategy elements that have
caused its weakness in the marketplace.
C) should undertake efforts to develop a
distinctive competence.
D) is virtually blockaded from using offensive
strategies and must rely on defensive strategies.
E) nearly always is relegated to a trailing
position in the industry.
7 A core competence _______________
A) is a more durable company resource than a
“distinctive competence.“
B) usually resides in a company’s technology
and physical assets (state-of-the-art plants and equipment, attractive real
estate locations, modern distribution facilities, and so on) whereas a company
competence usually resides in a company’s human assets.
C) is a capability that passes the
“competitively valuable” test.
D) is usually tied closely to the caliber of a
company’s manufacturing capability and/or its proprietary technology and know-how.
E) is better suited to helping a company
defend against external threats than in pursuing external market opportunities.
8 A distinctive competence _______________
A) is a more important competitive asset than
a core competence.
B) is a competitively valuable capability that
is performed with a very high level of proficiency.
C) resides in people and in a company’s
intellectual capital and not in its assets on the balance sheet.
D) is knowledge-based.
E) All of the above.
9 SWOT analysis _______________
A) is a simple but powerful tool for sizing up
a company’s internal strengths and competitive deficiencies, its market
opportunities, and the external threats to its future well-being.
B) is a tool for benchmarking whether a firm’s
strategy is closely matched to industry key success factors.
C) reveals whether a company is competitively
stronger than its closest rivals.
D) examines the company’s cost position
activity by activity.
E) is a competitive intelligence tool that
discloses rivals’ key weaknesses.
10 The industry or market opportunities that are
most relevant to a company and those that its strategy should aim at capturing
include _______________
A) opportunities that are well-matched to the
company’s competitive capabilities and resource strengths.
B) opportunities that the company has the
financial resources to pursue.
C) opportunities that offer important avenues
for growth.
D) opportunities where the company has the
greatest potential for competitive advantage.
E) All of the above.
11 Which of the following is not an example of an
external threat to a company’s future business prospects (see Table 4.2)?
A) Mounting intensity of competition among
industry rivals and costly new regulatory requirements.
B) Having a weaker brand image than rivals and
a smaller network of retailer dealers than rivals.
C) Shifts in buyer needs and preferences away
from using the industry’s product.
D) Vulnerability to unfavorable industry
driving forces and adverse demographic changes that are likely to curtail
demand for the industry’s product.
E) Growing bargaining power on the part of
customers and/or suppliers.
12 Which of the following analytical tools are
particularly useful for determining whether a company’s prices and costs are
competitive?
A) SWOT analysis, strategy assessment,
activity-based costing analysis, and key success factor analysis.
B) SWOT analysis, competitive strength
assessment, best practices analysis, and value chain analysis.
C) Value chain analysis and benchmarking.
D)Competitive position assessment, competitive
strength assessment, strategic group mapping, SWOT analysis, and value chain
analysis.
E) SWOT analysis, best practices analysis,
activity-based costing analysis, and competitive strength assessment.
13 A company’s value chain consists of
_______________
A) the activities a company performs in
converting its resource weaknesses into resource strengths.
B) the collection of activities it performs in
the course of designing, producing, marketing, delivering, and supporting its
product or service.
C) those activities a company performs that
represent “best practices.“
D) the activities that a company performs in
developing a distinctive competence.
E) the activities that represent a company’s
competencies, core competencies, distinctive competencies, and competitive
capabilities.
14 Benchmarking _______________
A) is inherently unethical if it involves
companies that are direct competitors because it involves gathering
competitively sensitive information about the operations and costs of rivals.
B) is not a valid tool for measuring the
cost-effectiveness of an activity unless it is restricted to companies in the
same industry.
C) entails comparing how different companies
perform various value chain activities and then making cross-company
comparisons of the costs of these activities.
D) loses much of its managerial usefulness if
it is done with the aid of third-party organizations.
E) entails calculating the costs of performing
each of the primary and related support activities in a company’s value chain.
15 A company’s cost competitiveness is largely a
function of _______________
A) whether it does a good enough job of
benchmarking its value chain activities against the value chains of competitors
so that it knows exactly how low to drive its costs to be cost-competitive.
B) how efficiently it manages its internally
performed value chain activities and the costs in the value chains of its
suppliers and forward channel allies.
C) whether it does a better job of building
its resource strengths more cost effectively than rivals.
D) whether it possesses more core competencies
and competitive capabilities than rivals.
E) how closely its internally performed
activities are linked to the activities performed by suppliers and to the
activities performed by forward channel allies.
16 Strategic actions to reduce the costs of
internally performed value chain activities and improve a company’s cost
competitiveness _______________
A) can aim at lowering costs (1) in the
suppliers’ part of the industry value chain, (2) in a company’s own internally
performed activities, and/or (3) in the forward channel portion of the value
chain.
B) work best when they aim at lowering the costs
of performing those tasks and activities where the company has core
competencies and distinctive competencies.
C) work best when aimed at increasing the
amount of the company’s low-cost competitive assets and decreasing the amount
of its high-cost competitive assets.
D) are likely to be most effective when they
are aimed at lowering the costs of the value chain activities that a company
performs internally.
E) are most likely to be successful when they
involve efforts to concentrate more company resources and talents on those
value chain activities where the company already has the lowest costs.
17 Strategic actions to eliminate an internal
cost disadvantage include _______________
A) implementing the use of best practices.
B) trying to eliminate some cost-producing
activities by revamping the value chain.
C) outsourcing high-cost activities to vendors
capable of performing the activity more cheaply.
D) investing in productivity-enhancing,
cost-saving technology.
E) All of these.
18 The options for attacking the high costs of
items purchased from suppliers does not include which one of the following?
A) Pressuring suppliers for more favorable
prices.
B) Integrating backward into the business of
high-cost suppliers and making the item in-house so as to better control the
cost.
C) Switching to lower priced substitute
inputs.
D) Raising prices to customers (so as to cover
the high costs).
E) Collaborating closely with suppliers to
identify mutual cost-saving opportunities.
19 Which one of the following is not something
that can be learned from doing a competitive strength assessment?
A) Identifying the competitive factors where a
company is strongest and weakest vis-à-vis key rivals and the kinds of
offensive/defensive actions the company can use to exploit its competitive
strengths and reduce its competitive vulnerabilities.
B) The extent to which a company’s customer
value proposition is superior to its rivals.
C) Which of the rated companies is
competitively strongest and what size competitive advantage it enjoys.
D) Whether a company has a net competitive
advantage or a net competitive disadvantage relative to key rivals (as indicated
by the differences among the companies’ competitive strength scores).
E) Which rival company is competitively
weakest and the areas where it is most vulnerable to competitive attack.
20 Identifying the strategic issues that company
managers need to address _______________
A) involves using the results of both industry
and competitive analysis and evaluations of the company’s internal situation
using the VRIN tests.
B) is facilitated by analysis of the company’s
cost structure and customer value proposition relative to its rivals.
C) sets the agenda for deciding what actions
to take next to improve the company’s performance and business outlook.
D) entails locking in on what challenges the
company has to overcome in order to be financially and competitively successful
in the years ahead.
Evaluating a Company’s Resources, Capabilities, and
Competitiveness – CH4
1 Evaluating a company’s resources and
capabilities and competitive strength relative to its rivals using VRIN Tests
does not include developing answers to which one of the following questions?
A) Is the resource or capability rare?
B) How good is the company’s value chain?
C) Is the resource or capability competitively
valuable?
D) Is the resource or capability inimitable or
hard to copy?
E) Is the resource or capability
non-substitutable, or is it vulnerable to the threat of substitution from
different types of resources and capabilities?
2 Which one of the following is not a good
indicator of how well a company’s present strategy is working?
A) Whether it is achieving its stated
financial and strategic objectives.
B) Whether it is an above-average industry
performer.
C) Whether the firm’s sales and earnings are
increasing or decreasing.
D) Whether the company’s resource strengths
and competitive capabilities outnumber its resource weaknesses and competitive
vulnerabilities.
E) The rate at which new customers are acquired
and whether the company’s overall financial strength is improving or on the
decline.
3 Which one of the following groups of
characteristics is least likely to represent valuable company resources or
competitive capabilities?
A) Physical resources — state-of-the-art
manufacturing plants and equipment, efficient distribution facilities,
attractive real estate locations, or ownership of valuable natural resource
deposits.
B) Larger workforce, longer time in business,
lower profit margins, and smaller capital investment spend than rivals.
C) Intangible resources such as a well-known
brand name.
D) Organizational resources — information and
communication systems (servers, workstations, etc.), proven quality control
systems, and strong network of distributors or retail dealers.
E) Company culture — the norms of behavior,
business principles, and ingrained beliefs within the company.
4 Which
of the following statements is false?
A) A dynamic capability is the ability to
modify, deepen, or reconfigure the company’s existing resources and
capabilities in response to changes in the environment or market.
B) A company’s internal strengths should
always serve as the basis for its strategy.
C) Managers must look toward ing competitive
weaknesses that make the company vulnerable, dampen profitability, or
disqualify it from pursuing an attractive opportunity.
D) Managers need to keep close track of how
cost effectively the company can deliver value to customers relative to its
competitors.
E) None of the above.
5 Which of the following statements about market
opportunity is ?
A) Market opportunity is a big factor in
shaping a company’s strategy.
B)Depending on the prevailing circumstances, a
company’s opportunities can be plentiful or scarce and can range from wildly
attractive to unsuitable.
C) In evaluating the attractiveness of a
company’s market opportunities, managers have to guard against viewing every
industry opportunity as a suitable opportunity.
D) Answers A and B.
E) All of these.
6 A company that is at a disadvantage in the
marketplace because it lacks competitively valuable resources possessed by
rivals _______________
A) should adopt a new competitive strategy
that might better match the circumstances of the marketplace.
B) should abandon strategy elements that have
caused its weakness in the marketplace.
C) should undertake efforts to develop a
distinctive competence.
D) is virtually blockaded from using offensive
strategies and must rely on defensive strategies.
E) nearly always is relegated to a trailing
position in the industry.
7 A core competence _______________
A) is a more durable company resource than a
“distinctive competence.“
B) usually resides in a company’s technology
and physical assets (state-of-the-art plants and equipment, attractive real
estate locations, modern distribution facilities, and so on) whereas a company
competence usually resides in a company’s human assets.
C) is a capability that passes the
“competitively valuable” test.
D) is usually tied closely to the caliber of a
company’s manufacturing capability and/or its proprietary technology and know-how.
E) is better suited to helping a company
defend against external threats than in pursuing external market opportunities.
8 A distinctive competence _______________
A) is a more important competitive asset than
a core competence.
B) is a competitively valuable capability that
is performed with a very high level of proficiency.
C) resides in people and in a company’s
intellectual capital and not in its assets on the balance sheet.
D) is knowledge-based.
E) All of the above.
9 SWOT analysis _______________
A) is a simple but powerful tool for sizing up
a company’s internal strengths and competitive deficiencies, its market
opportunities, and the external threats to its future well-being.
B) is a tool for benchmarking whether a firm’s
strategy is closely matched to industry key success factors.
C) reveals whether a company is competitively
stronger than its closest rivals.
D) examines the company’s cost position
activity by activity.
E) is a competitive intelligence tool that
discloses rivals’ key weaknesses.
10 The industry or market opportunities that are
most relevant to a company and those that its strategy should aim at capturing
include _______________
A) opportunities that are well-matched to the
company’s competitive capabilities and resource strengths.
B) opportunities that the company has the
financial resources to pursue.
C) opportunities that offer important avenues
for growth.
D) opportunities where the company has the
greatest potential for competitive advantage.
E) All of the above.
11 Which of the following is not an example of an
external threat to a company’s future business prospects (see Table 4.2)?
A) Mounting intensity of competition among
industry rivals and costly new regulatory requirements.
B) Having a weaker brand image than rivals and
a smaller network of retailer dealers than rivals.
C) Shifts in buyer needs and preferences away
from using the industry’s product.
D) Vulnerability to unfavorable industry
driving forces and adverse demographic changes that are likely to curtail
demand for the industry’s product.
E) Growing bargaining power on the part of
customers and/or suppliers.
12 Which of the following analytical tools are
particularly useful for determining whether a company’s prices and costs are
competitive?
A) SWOT analysis, strategy assessment,
activity-based costing analysis, and key success factor analysis.
B) SWOT analysis, competitive strength
assessment, best practices analysis, and value chain analysis.
C) Value chain analysis and benchmarking.
D)Competitive position assessment, competitive
strength assessment, strategic group mapping, SWOT analysis, and value chain
analysis.
E) SWOT analysis, best practices analysis,
activity-based costing analysis, and competitive strength assessment.
13 A company’s value chain consists of
_______________
A) the activities a company performs in
converting its resource weaknesses into resource strengths.
B) the collection of activities it performs in
the course of designing, producing, marketing, delivering, and supporting its
product or service.
C) those activities a company performs that
represent “best practices.“
D) the activities that a company performs in
developing a distinctive competence.
E) the activities that represent a company’s
competencies, core competencies, distinctive competencies, and competitive
capabilities.
14 Benchmarking _______________
A) is inherently unethical if it involves
companies that are direct competitors because it involves gathering
competitively sensitive information about the operations and costs of rivals.
B) is not a valid tool for measuring the
cost-effectiveness of an activity unless it is restricted to companies in the
same industry.
C) entails comparing how different companies
perform various value chain activities and then making cross-company
comparisons of the costs of these activities.
D) loses much of its managerial usefulness if
it is done with the aid of third-party organizations.
E) entails calculating the costs of performing
each of the primary and related support activities in a company’s value chain.
15 A company’s cost competitiveness is largely a
function of _______________
A) whether it does a good enough job of
benchmarking its value chain activities against the value chains of competitors
so that it knows exactly how low to drive its costs to be cost-competitive.
B) how efficiently it manages its internally
performed value chain activities and the costs in the value chains of its
suppliers and forward channel allies.
C) whether it does a better job of building
its resource strengths more cost effectively than rivals.
D) whether it possesses more core competencies
and competitive capabilities than rivals.
E) how closely its internally performed
activities are linked to the activities performed by suppliers and to the
activities performed by forward channel allies.
16 Strategic actions to reduce the costs of
internally performed value chain activities and improve a company’s cost
competitiveness _______________
A) can aim at lowering costs (1) in the
suppliers’ part of the industry value chain, (2) in a company’s own internally
performed activities, and/or (3) in the forward channel portion of the value
chain.
B) work best when they aim at lowering the costs
of performing those tasks and activities where the company has core
competencies and distinctive competencies.
C) work best when aimed at increasing the
amount of the company’s low-cost competitive assets and decreasing the amount
of its high-cost competitive assets.
D) are likely to be most effective when they
are aimed at lowering the costs of the value chain activities that a company
performs internally.
E) are most likely to be successful when they
involve efforts to concentrate more company resources and talents on those
value chain activities where the company already has the lowest costs.
17 Strategic actions to eliminate an internal
cost disadvantage include _______________
A) implementing the use of best practices.
B) trying to eliminate some cost-producing
activities by revamping the value chain.
C) outsourcing high-cost activities to vendors
capable of performing the activity more cheaply.
D) investing in productivity-enhancing,
cost-saving technology.
E) All of these.
18 The options for attacking the high costs of
items purchased from suppliers does not include which one of the following?
A) Pressuring suppliers for more favorable
prices.
B) Integrating backward into the business of
high-cost suppliers and making the item in-house so as to better control the
cost.
C) Switching to lower priced substitute
inputs.
D) Raising prices to customers (so as to cover
the high costs).
E) Collaborating closely with suppliers to
identify mutual cost-saving opportunities.
19 Which one of the following is not something
that can be learned from doing a competitive strength assessment?
A) Identifying the competitive factors where a
company is strongest and weakest vis-à-vis key rivals and the kinds of
offensive/defensive actions the company can use to exploit its competitive
strengths and reduce its competitive vulnerabilities.
B) The extent to which a company’s customer
value proposition is superior to its rivals.
C) Which of the rated companies is
competitively strongest and what size competitive advantage it enjoys.
D) Whether a company has a net competitive
advantage or a net competitive disadvantage relative to key rivals (as indicated
by the differences among the companies’ competitive strength scores).
E) Which rival company is competitively
weakest and the areas where it is most vulnerable to competitive attack.
20 Identifying the strategic issues that company
managers need to address _______________
A) involves using the results of both industry
and competitive analysis and evaluations of the company’s internal situation
using the VRIN tests.
B) is facilitated by analysis of the company’s
cost structure and customer value proposition relative to its rivals.
C) sets the agenda for deciding what actions
to take next to improve the company’s performance and business outlook.
D) entails locking in on what challenges the
company has to overcome in order to be financially and competitively successful
in the years ahead.

 
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Essentials of Strategic Management Ch7

/in /by

Essentials of Strategic Management Ch7

Question

Strategies for Competing in International Markets- CH7
1 Companies opt to expand into foreign markets
for such reasons as to _______________
A) boost returns on investment, broaden their
product lines, avoid tariffs and trade restrictions, and escape dealing with
strong labor unions.
B) gain access to new customers, achieve lower
costs and enhance the company’s competitiveness, capitalize on core
competencies, and spread business risk across a wider market base.
C) grow sales faster than the industry
average, reduce the competitive threats from rivals, and open up more
opportunities to enter into strategic alliances.
D) avoid having to employ an export strategy,
avoid the threat of cross-market subsidization from rivals, and enable the use
of a global strategy instead of a multidomestic strategy.
E) raise the entry barriers for industry
newcomers, neutralize the bargaining power of important suppliers, grow sales
faster, and increase the number of loyal customers.
2 One of the biggest strategic challenges to
competing in the international arena include _______________
A) whether to offer a mostly standardized
product worldwide or whether to customize the company’s offerings in each
different country market to match the tastes and preferences of local buyers.
B) whether to charge the same price in all
country markets.
C) whether the company should engage in
exporting, licensing, or franchising to enter new country markets.
D) how to take advantage of the low wage rates
prevailing in some countries.
E) whether to pursue a global strategy or an
international strategy.
3 Which one of the following is not a factor
that a company must contend with in competing in the markets of foreign
countries?
A) Variations in market growth rates from
country to country and important country-to-country differences in consumer
buying habits and buyer tastes and preferences.
B) Country-to-country variations in
host-government policies and trade requirements.
C) The fact that product designs suitable for
one country are sometimes inappropriate in another.
D) Vulnerability to adverse shifts in currency
exchange rates.
E) A need to convince shippers to keep
transportation costs low.
4 Which one of the following statements
concerning the effects of fluctuating exchange rates on companies competing in
foreign markets is true?
A) Domestic companies trying to combat
competition from foreign imports are hurt even more when their government’s
currency grows weaker in relation to the currencies of the countries where the
imported goods are being made.
B) Fluctuating foreign exchange rates greatly
reduce the risks of competing in foreign markets—the big problem occurs when
exchange rates are fixed at unreasonably low levels.
C) Domestic companies under pressure from
lower-cost imports are benefited when their government’s currency grows weaker
in relation to the currencies of the countries where the imported goods are
being made.
D) Manufacturers that are exporting much of
what they produce are benefited when their country’s currency grows stronger
relative to the currencies of the countries that the goods are being exported
to.
E)If the exchange rate of U.S. dollars for
euros changes from $1.15 per euro to $1.25 per euro, then it is to say that the U.S. dollar has grown
stronger.
5 Which of the following is/are not
“valid” strategy options for entering and/or competing in foreign
markets?
A) A global strategy where a company uses
essentially the same competitive strategy approach in all country markets where
it has a presence.
B) An import strategy, a strategic alliance
strategy, a profit sanctuary strategy, and a cross-market subsidization
strategy.
C) A localized multidomestic strategy.
D) An export strategy and using strategic
alliances or joint ventures with foreign companies as the primary vehicle for
entering foreign markets.
E)A franchising strategy and a strategy of
licensing foreign firms to use the company’s technology or to produce and
distribute the company’s products.
6 The advantages of manufacturing goods in a
particular country and exporting them to foreign markets _______________
A) are seriously compromised by the potential
for local government officials to raise tariffs on the imports of foreign-made
goods into their country.
B) are greatest when local consumers prefer
products manufactured inside the country’s borders.
C) are weakened when that country’s currency
grows stronger relative to the currencies of the countries where the output is
being sold.
D) can be wiped out when that country’s
currency grows weaker relative to the currencies of the countries where the
output is being sold.
E) are largely unaffected by tariffs or
quotas.
7 Using domestic plants as a production base for
exporting goods to selected foreign country markets _______________
A) is usually a superior approach to competing
in international markets.
B) can be a competitively successful strategy
when a company is focusing on vacant market niches in each foreign country.
C) can be an excellent initial strategy to
pursue international sales.
D) is usually a weak strategy when competitors
are pursuing licensing strategies.
E) can be a powerful strategy because the
company is not vulnerable to tariffs or quotas.
8 The advantages of using a licensing strategy
to participate in foreign markets include _______________
A) being especially well suited to exploit a
profit sanctuary.
B) being able to charge lower prices than
rivals.
C) enabling a company to achieve competitive
advantage quickly and easily.
D) being able to achieve lower costs than with
a localized multidomestic strategy.
E) being able to leverage the company’s
technical know-how or patents without committing significant additional
resources to markets that are unfamiliar, politically volatile, economically
uncertain, or otherwise risky.
9 The advantages of using a franchising strategy
to pursue opportunities in foreign markets include _______________
A) being particularly well suited to the
international expansion efforts of companies with global strategies.
B) having franchisees bear most of the costs
and risks of establishing foreign locations and requiring the franchiser to
expend only the resources to recruit, train, and support foreign franchisees.
C) helping build brand awareness in
international markets.
D) being well suited to companies that employ
cross-market subsidization.
E) gaining support from local governments in
the form of subsidies and meeting local content requirements.
10 A “think local, act local”
multidomestic type of strategy _______________
A) becomes more appealing the bigger the
country-to-country differences in buyer tastes, cultural traditions, and market
conditions.
B) always makes a company vulnerable to rivals
employing “think global, act global” strategies.
C) protects a multinational firm against
fluctuating exchange rates.
D) is generally an inferior strategy when one
or more foreign competitors is pursuing a global low-cost strategy.
E) employs essentially the same basic
competitive strategy theme in all country markets.
11 A localized or multidomestic strategy
_______________
A) is generally preferable to a global
strategy in situations where buyers are price sensitive because a “think
local, act local” type of multidomestic strategy is better suited to
achieving low unit costs than a global strategy.
B) is one where a company varies its product
offering and competitive approach from country to country in an effort to be
responsive to differing buyer preferences and market conditions.
C) has two big drawbacks: (1) it hinders
transfer of a company’s competencies and resources across country boundaries
because the strategies in different host countries can be grounded in varying
competencies and capabilities; and (2) it does not promote building a single,
unified competitive advantage, especially one based on low cost.
D) is generally inferior to a global strategy
when it comes to pursuing product differentiation.
E) Both B and C.
12 A “think global, act global”
approach to strategy making is preferable to a “think local, act
local” approach when _______________
A) customer preferences vary significantly
from country to country.
B) it is necessary to delegate strategy making
to local managers with firsthand knowledge of local conditions.
C) plants need to be scattered across many
countries to avoid high shipping costs.
D) country-to-country differences are small
enough to be accommodated with the framework of a mostly uniform global
strategy.
E) host governments enact regulations
requiring that products sold locally meet strict manufacturing specifications
or performance standards.
13 The chief difference between a “think
global, act global” and a “think global, act local” approach to
crafting a global strategy is that _______________
A) a “think global, act local”
approach involves charging much different prices in the various country markets
where the company competes.
B) a “think global, act local”
approach involves much less adherence to using the same basic competitive
strategy theme (low-cost, differentiation, best-cost, or focused) in all
country markets.
C) a “think global, act local”
approach involves considerably less adherence to utilizing the same
capabilities, distribution channels, and marketing approaches worldwide.
D) local managers are given more latitude in
adapting the global strategy approach as may be needed to accommodate local
buyer preferences and be responsive to local market and competitive conditions.
E) a “think global, act global”
approach involves selling under a single brand worldwide whereas a “think
global, act local” approach involves the use of multiple brands (often a
local brand for each local market).
14 Which of the following is not a potential
motivation for entering into strategic alliances or other cooperative
arrangements with foreign companies?
A) To gain wider access to attractive country
markets.
B) To gain better access to scale economies in
production and/or marketing.
C) To fill competitively important gaps in
their technical expertise and/or knowledge of local markets.
D) To better enable the use of a “think
global, act global” strategy and facilitate cross-market subsidization.
E) To share distribution facilities and dealer
networks, thus mutually strengthening the allies’ access to buyers.
15 Which of the following is not one of the ways
in which a company can pursue competitive advantage by expanding outside its
domestic market and competing multinationally?
A) Locating value chain activities among
various countries in a manner that lowers costs.
B) Pursuing blue ocean opportunities in the
company’s home country market.
C) Locating value chain activities among
various countries in a manner that helps achieve greater product
differentiation.
D)Cross-border coordination of its activities
in ways that contribute to building a competitive edge.
E) Employing a profit sanctuary strategy to
wage a strategic offensive.
16 Multinational competitors tend to concentrate
activities in a limited number of locations when _______________
A) prices and competitve conditions are
strongly linked across country markets to form a world market.
B) there are significant scale economies
and/or steep learning curve effects associated with performing certain
activities in a single location, costs of performing the activity are lower in
particular geographic locations, and certain locations have superior resources,
allow better coordination of related activities, or offer other valuable
advantages.
C) the risk of fluctuating exchange rates is
very high.
D) Host-country governments can be persuaded
to erect high tariff barriers to protect the company’s operations from foreign
competitors and when it is not imperative to be responsive to buyer needs and
competitive conditions in each country.
E) competitive conditions make it infeasible
to employ a profit sanctuary strategy or an export strategy.
17 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) if economies of scale are essential to
achieving acceptable production costs.
D) Both A and B.
E) None of the above.
18 Companies tend to concentrate their activities
in a limited number of locations _______________
A) When the costs of manufacturing or other
activities are significantly lower in some geographic locations than in others.
B) When there are significant scale economies.
C) When there is a steep learning curve
associated with performing an activity.
D) When certain locations have superior
resources, allow better coordination of related activities, or offer other
valuable advantages.
E) All of these.
19 Which of the following statements about
entering developing markets such as China, India, Russia, and Brazil is wrong?
A) Profitability in emerging markets rarely
comes quickly or easily.
B) Building a market for the company’s
products can often turn into a long-term process that involves reeducation of
consumers.
C) Entering an emerging market often involves
upgrading the local infrastructure (the supplier base, transportation systems,
distribution channels, labor markets, and capital markets).
D) Tailoring products to fit conditions in an
emerging country market such as China, however, often involves more than making
minor product changes and becoming more familiar with local cultures.
E) None of these.
20 Which of the following is not a typical option
that companies have to consider to tailor their strategy to fit the
circumstances of developing country markets?
A) Develop new sets of core competencies that
allow a company to offer value to consumers of emerging markets in ways
unmatched by rivals.
B) Prepare to compete on the basis of low
price.
C) Be prepared to modify aspects of the
company’s business model to accommodate local circumstances (but not so much
that the company loses the advantage of global scale and global branding).
D) Try to change the local market to better
match the way the company does business elsewhere.
E) Stay away from those emerging markets where
it is impractical or uneconomical to modify the company’s business model to
accommodate local circumstances.
 
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Essentials of Strategic Management.Ch10

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Essentials of Strategic Management.Ch10

Question

Superior Strategy Execution—Another Path to Competitive
Advantage- Ch10
1
Which of the following is not one of the principal
managerial components associated with implementing and executing strategy?
A) Adopting an organizational structure that
supports strategies intended to create customer value.
B) Ensuring that policies and procedures
facilitate rather than impede strategy execution.
C) Staffing the organization with people
having the right skills and expertise.
D) Reducing the layers of management to a bare
minimum and making sure employees are empowered.
E) Instilling a corporate culture that
promotes good strategy execution.
2 The overriding aim in building a management
team should be to _______________
A) assemble a critical mass of talented
managers who can function as agents of change and further the cause of
first-rate strategy execution.
B) select people who are charismatic and good
communicators.
C) choose managers who have substantial
experience in the industry.
D) assemble a team of people who believe in
the same leadership approaches and use the same approaches to people
management.
E) choose managers who have the same core
values and ethical standards.
3 Recruiting and retaining capable employees
_______________
A) is usually much more important to good
strategy execution than is assembling a capable top management team.
B) is easily the most critical aspect in
building competitively valuable core competencies and capabilities.
C) is more easily done by large multinational
corporations because of their deep financial resources and stimulating job
assignments.
D) is largely a function of the skills and
capabilities of the company’s human resources staff.
E) is important because the quality of an
organization’s people is always an essential ingredient of successful strategy
execution—knowledgeable, engaged employees are a company’s best source of
creative ideas for the nuts-and-bolts operating improvements that lead to
operating excellence.
4 Which of the following is generally not among
the practices that companies use to staff jobs with the best people they can
find, particularly if intellectual capital greatly aids good strategy
execution?
A) Providing promising employees with
challenging, interesting, and skill-stretching assignments.
B) Striving to retain talented,
high-performing employees via promotions, salary increases, performance
bonuses, stock options and equity ownership, fringe benefit packages, and other
perks.
C) Fostering a stimulating and engaging work
environment such that employees will consider the company a great place to
work.
D) Coaching average performers to improve
their skills and capabilities, while weeding out underperformers.
E) Hiring only people below the age of 35 who
have college degrees and a grade point average of B or better.
5 The rationale for making strategy-critical
value chain activities the primary building blocks in a company’s
organizational scheme is based on _______________
A) the contribution it makes to improving
labor productivity and reducing labor costs.
B) the benefits of keeping the layers of
management to a minimum.
C) the thesis that if activities crucial to
strategic success are to have the resources, decision-making influence, and
organizational impact they need, they have to be centerpieces in the
organizational scheme.
D) the benefit of keeping the organization
structure simple and easy for employees to understand.
E) making it easier to capture the benefits of
centralized decision making.
6 Which one of the following falsely describes a
centralized approach to decision making?
A) Little discretionary authority is granted
to frontline supervisors and rank-and-file employees.
B) Hierarchical command-and-control structures
speed an organization’s responses to changing conditions because top-level
managers are in a position to quickly review the situation and make a final
decision.
C) light control by a few senior managers
makes it easy to fix accountability when things do not go well.
D) There is an assumpton that frontline
personnel have neither the time nor the inclination to direct and properly
control the work they are performing, and that they lack the knowledge and
judgment to make wise decisions about how best to do their work.
E) Top executives retain authority for most
strategic and operating decisions.
7 A change in strategy nearly always entails
budget reallocations because _______________
A) new strategic initiatives can be costly or
capital intensive.
B) units important in the prior strategy but
having a lesser role in the new strategy may need downsizing while units and
activities that now have a bigger and more critical strategic role may need
more people, new equipment, additional facilities, and above-average increases
in their operating budgets.
C) the accompanying policy revisions and
compensation incentives tend to require different levels of funding than
before.
D) of corresponding changes in the company’s
organizational structure and budgetary requirements.
E) adopting best practices and pushing for
continuous improvement tend to reduce costs and reduce overall resource
requirements.
8 Prescribing policies and operating procedures
aid the task of implementing strategy by _______________
A) helping empower product champions and work
teams.
B) paving the way for instituting TQM or Six
Sigma programs and adopting best practices.
C) providing top-down guidance regarding how
things need to be none, enforcing consistency in how activities are performed,
and promoting the creation of a work climate that facilitates good strategy
execution.
D) helping prevent the corporate culture from
being unhealthy and weak.
E) pushing employees to accept the need for state-of-the-art
operating and support systems.
9 Business process reengineering is a tool for
_______________
A) remodeling and refreshing a
strategy-critical core competence.
B) pulling the pieces of strategy-critical
activities out of different departments and unifying their performance in a
single department or cross-functional work.
C) reducing the size of a company’s managerial
bureaucracy.
D) boosting the quality of a company’s product
and the caliber of its customer service.
E) expediting the development of an important
new competitive capability.
10 Total quality management (TQM) _______________
A) is a philosophy of managing that involves convincing
employees that superior product quality is the most reliable key to competitive
success in the marketplace.
B) is a tool for providing customers with the
highest quality product of any company in the industry.
C) involves managing company operations in a
manner calculated to quickly and efficiently make quantum gains in the quality
and effectiveness with which production activities are performed.
D) is a philosophy of managing a set of
business practices that emphasizes continuous improvement in all phases of
operations, 100 percent accuracy in performing tasks, involvement and
empowerment of employees at all levels, team-based work design, benchmarking,
and total customer satisfaction.
E) involves managing company operations in a
manner calculated to result in mistake-free management of a company’s entire
business.
11 Six Sigma quality control _______________
A) is a tool that is superior to TQM in
achieving top-notch quality in manufacturing a product.
B) consists of a disciplined, statistics-based
system aimed at producing not more than 2.5 defects per million iterations.
C) is based on three principles: (1) all work
is a process; (2) all processes have variability; and (3) all processes create
data that explain variability.
D) is the best practice for managing
manufacturing and assembly activities.
E) is a disciplined, statistics-based approach
to manufacturing or assembling a product and results in 5 defects per million
iterations when implemented properly.
12 Company strategies and value creating
processes can’t be effectively executed without internal operating systems that
include:
A) PCs, servers, web applications, and
e-business solutions.
B) TQM, reengineering, and Six Sigma programs.
C) customer data, employee data,
supplier/partner data, operations data, and financial performance data.
D) benchmarking and best practices.
E) All of these.
13 Management’s most powerful tool for mobilizing
employee commitment to competent strategy execution and operating excellence is
_______________
A) total quality management.
B) business process reengineering.
C) a properly designed reward structure.
D) making the company a great place to work in
terms of pay scales, fringe benefits, and employee perks.
E) effective screening of job applicants such
that only the most motivated and energetic people are hired.
14 Which of the following is not characteristic
of a compensation and reward system designed to help drive successful strategy
execution?
A) Making the performance payoff a major, not
minor, piece of the total compensation package.
B) Keeping performance incentives and bonuses
to less than 15 percent of total compensation.
C) Not skirting the system to find ways to
reward effort rather than results.
D) Having incentives that extend to all
managers and all workers and generously rewarding people who turn in
outstanding performances.
E) Making sure the time between achieving the
target performance outcome and the payment of the reward is as short as
possible.
15 Which of the following is not an important
nonmonetary approach to enhancing motivation and helping drive successful
strategy execution?
A) Adopting promotion from within policies and
acting on suggestions from employees.
B) Providing attractive perks and fringe
benefits.
C) Creating a work atmosphere in which there
is genuine sincerity, caring, and mutual respect among employees and
management.
D) Providing rank-and-file employees with
representation on the company’s board of directors.
E) Using frequent words of praise to recognize
employees for commendable performance.
16 Which one of the following is not something
that shapes and helps define a company’s culture?
A) The core values, beliefs, business
principles, and traditions that permeate the workplace.
B) The work practices and behaviors that
define “how we do things around here”: The company’s standards of
what is ethically acceptable and what is not, along with the legends and
stories that people repeat to illustrate and reinforce the company’s core
values, traditions, and business practices.
C) A company’s approach to people management
and its style of operating.
D) The strategy and business model that the
company has adopted.
E) The “chemistry” that permeates
its work environment.
17 Which of the following is not one of the five
types of unhealthy company cultures?
A) Bureaucratic cultures.
B) Change-resistant cultures.
C) Unethical and greed-driven cultures.
D) Politicized cultures.
E) Insular, inwardly focused cultures.
18 The hallmarks of a high-performance corporate
culture include _______________
A) a shared willingness to adapt core values and
ethical standards to fit the changing requirements of an evolving strategy, use
of a balanced scorecard approach to tracking company performance, and a gung-ho
approach to discovering best practices.
B) considerable political infighting that
typically consumes a great deal of organizational energy, often with the result
that what’s best for the company takes a backseat to political maneuvering.
C) a “can-do” spirit, pride in doing
things right, no-excuses accountability, and a pervasive results-oriented work
climate where people go the extra mile to meet or beat stretch objectives.
D) charismatic managerial leadership, a lean
management bureaucracy, and a must-be-invented-here mind set.
E) strong inclinations to adopt a wait-and-see
posture, carefully analyze several alternative responses, learn from the
missteps of early movers, and then move forward cautiously and conservatively
with initiatives that are deemed safe.
19 When trying to change a problem culture,
management should undertake such steps as _______________
A) selecting a team of rank-and-file employees
to lead the culture change effort.
B) hosting company outings to help build
camaraderie among employees and support for the culture change.
C) drawing up an action plan to change the
present culture and then persuading company personnel why this plan of action
is good and will be successful.
D) conducting an employee survey to determine
the organization’s cultural norms and what company personnel like and dislike
about the current culture.
E) identifying which aspects of the present
culture are supportive of good strategy execution and which ones are not.
20 Which one of the following is not a means of
building and strengthening competitively valuable resources and capabilities?
A) engaging in experience-building activities
such as collaborative efforts in R&D engineering and design.
B) acquiring capabilities through mergers and
acquisitions.
C) shifting from decentralized to centralized
decision making so as to give senior executives more authority and control in
driving cultural change.
D)entering into collaborative partnerships
with suppliers, competitors or other companies that possess needed expertise.
E) none of the above.
 
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Essentials of Strategic Management Ch9

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Essentials of Strategic Management Ch9

Question

Ethics, Corporate Social Responsibility, Environmental
Sustainability, and Strategy CH9
1 Business ethics encompasses _______________
A) the application of ethical principles and
standards to business activities, behavior, and decisions.
B) a business commitment to safe products,
high worker compensation, and protection of the environment.
C) conducting oneself appropriately in a
business setting.
D) developing a special set of ethical
standards for businesses to observe in conducting their affairs.
E) picking and choosing among various ethical
standards of society to arrive at a set of ethical standards that apply
directly to operating a business.
2
Ethical principles in business _______________
A) concern the behavioral guidelines a
company’s top management and board of directors set for company personnel
regarding “what is right” and “what is wrong” in conducting
the company’s business.
B)deal chiefly with the actions and behaviors
required to operate companies in a socially responsible manner.
C)are arrived at by picking and choosing among
the consensus ethical standards of society to come up with a set of ethica
standards that apply directly to operating a business.
D)are not materially different from ethical
principles in general and have to be judged in the context of society’s
standards of right and wrong, not by a special set of rules that businesspeople
decide to apply to their own conduct.
E) involve behavioral guidelines for balancing
the interests of nonowner stakeholders (customers, employees, suppliers, and
the communities in which the company has operations) against the interests of
company shareholders.
3 Unethical managerial behavior
tends to be driven by such factors as _______________
A) overzealous or obsessive pursuit of
personal gain, wealth, and other self interests; a company culture that puts
the profitability and good business performance ahead of ethical behavior; and
heavy pressures on company managers to meet or beat performance targets.
B) the lack of a company code of ethics.
C) a lack of training in what is ethical and
what is not.
D) onfusing differences between what is
ethical behavior in one’s personal life and what is ethically permissible in
business.
E) All of the above factors.
4 A company’s strategy needs to be ethical
because _______________
A) of the potential for embarrassment to top
management if the company’s unethical behavior is publicly exposed.
B) unethical strategies are inconsistent with
or else weaken the corporate culture.
C) ethics watchdogs are sure to blow the
whistle on the company’s unethical behavior.
D) of the risks of prosecution by governmental
authorities if an unethical strategy is disclosed.
E) a strategy that is unethical not only
damages the company’s reputation but it also can have costly consequences.
5 Which of the following are consequences of
pursuing a strategy that has unethical or shady components?
A) Government fines and penalties.
B) Legal and investigative costs incurred by
the company.
C) Customer defections.
D) Adverse effects on employee productivity.
E) All of these.
6 Notions of right and wrong, fair and unfair,
moral and immoral, ethical and unethical _______________
A) ultimately depend on a person’s own values
and beliefs.
B) ultimately depend on the
circumstances—nothing is really black or white when it comes to ethical
standards.
C) are governed mainly by religious views held
in different geographic regions of the world.
D) are present in all societies,
organizations, and individuals.
E) vary enormously from country to country
across the world.
7 According to the school of ethical
universalism, _______________
A) what behaviors are “ethically
right” and “ethically wrong” vary across religions, but the
boundaries of what is ethical or not are universal within religions.
B) concepts of right and wrong universally
apply to all business situations within a given country but can vary across
countries or cultures.
C) ethical guidelines exist only when there is
universal agreement as to what behaviors are “ethically right” and
“ethically wrong”; anything not universally viewed as unethical is
thus within the bounds of what is ethically permissible.
D) all societies and countries have some
definition of what is ethically permissible (in this sense ethics are
universal); however, the definitions of what is ethically permissible vary
according to the prevailing religious doctrines in each country.
E) many of the same standards of what’s
ethical and what’s unethical resonate with peoples of most societies regardless
of local traditions and cultural norms—hence, to the extent there is common
moral agreement about right and wrong actions, common ethical standards can be
used to judge the conduct of personnel at companies operating in a variety of
country markets and cultural circumstances.
8 The thesis that because different societies
and cultures have divergent values and standards of what is “ethically
right” and “ethically wrong” it is appropriate to judge behavior
as ethical/unethical in the light of local customs and social mores
_______________
A) is the basis for the theory of ethical
variation.
B) defines what is meant by “integrated
social contracts theory.“
C) is a view that characterizes the school of
ethical relativism.
D) accounts for why there is no such thing as
ethical standards for business enterprises.
E) is the reason codes of ethical and social
morality have been established country by country.
9
If one adopts the thinking of the school of ethical relativism,
then _______________
A) there are multiple sets of ethical
standards because what is ethical or unethical depends on local customs and
social mores and can vary from one culture or nation to another.
B) there is a “one-size-fits-all” set
of authentic ethical standards.
C) the preferred set of ethical standards is
the one that society at large has put in place in the form of laws and
regulations.
D) the prevailing ethical standards are the
product of a system of “integrated social contracts.“
E) no ethical standards are ever truly
“authentic”—they exist only to the extent that there is a temporary
shared conviction among company managers and company personnel that a
particular behavior is either ethically permissible or ethically impermissible.
10 Companies that adopt the principle of ethical
relativism in providing ethical guidance to company personnel _______________
A) are able to comply with the varying ethical
standards of the world’s different cultures.
B) have no fair way to judge the ethical ness
of the conduct of company personnel.
C) quickly find themselves on a slippery slope
with no ethical standards or principles of their own.
D) have a uniform code of ethical standards
that is applied globally.
E) end up allowing each company employee to
determine what set of ethical standards to observe.
11 According to integrated social contracts
theory, _______________
A) the views and principles of the school of
ethical universalism are definitely wrong; the
view is that ethics is a matter of personal responsibility not a matter
of management concern.
B) the ethical standards a company should try
to uphold are governed both by (1) a limited number of universal ethical
principles that are widely recognized as putting legitimate ethical boundaries
on actions and behavior in all situations and (2) the circumstances of local
cultures, traditions, and shared values that further prescribe what constitutes
ethically permissible behavior and what does not—however, universal ethical
norms take precedence over local ethical norms.
C) the standards of what is ethically
permissible and what is not should be based on a code of ethical and moral
conduct that each society/country/culture adopts and then enacts into law.
D) the standards of what is ethically
permissible should be determined by the terms of an “ethics contract”
that each company employee signs as a condition of employment.
E) the only valid ethical standards are those
that are universal—and then only if the standards are not absolute and provide
some wiggle room according to the circumstances of the each situation.
12 Integrated social contracts theory maintains
that _______________
A) all ethical standards are determined by
societal norms and individuals have an implied social contract to live up to
these standards.
B) “first order” universal ethical
norms always take precedence over “second order” local ethical norms.
C) there should be no absolute limits put on
what is ethically or morally right.
D) few nations or cultures have common moral
agreement on what is ethically right and wrong.
E) each country/culture/society has commonly
held views about what constitutes ethically appropriate actions/behaviors that
all individuals in that country/culture/society are obligated to observe.
13 The costs companies incur when ethical
wrongdoing is discovered and punished do not primarily include_______________
A) the costs to shareholders in the form of a
lower stock price (and possibly lower dividends).
B) he costs of providing remedial education
and ethics training to company personnel.
C) lost employee morale and higher degrees of
employee cynicism.
D) civil penalties arising from class-action
lawsuits and other litigation aimed at punishing the company for its offense
and the harm done to others.
E) increased dividend pay-out to restore the
trust of its shareholders.
14 The theory of corporate social responsibility
concerns _______________
A) a company’s duty to maximize shareholder
value.
B) the blending of shareholder interests and
employee interests.
C) a company’s duty to establish socially
acceptable core values and to have a strictly enforced code of ethical conduct.
D)the responsibility that top management has
for ensuring that the company’s actions and decisions are in the best interest
of society at large.
E) The company’s responsibility to balance
between strategic actions to benefit shareholders against the duty to be a good
corporate citizen.
15 Which of the following is not generally on a
company’s menu of actions to consider in crafting a strategy of social
responsibility?
A) Efforts to employ an ethical strategy and
observe ethical principles in operating the business.
B) Actions to provide suppliers, distributors,
and other value chain partners with handsome profit margins.
C) Making charitable contributions, supporting
community service endeavors, engaging in broader philanthropic initiatives, and
reaching out to make a difference in the lives of the disadvantaged.
D) Actions to build a workforce that is
diverse with respect to gender, race, national origin, and other aspects that
different people bring to the workplace.
E) Actions to protect the environment and, in
particular, to minimize or eliminate any adverse impact on the environment
stemming from the company’s own business activities.
16 The business case for an ethical strategy
_______________
A) focuses primarily on costs that are
difficult to quantify (for example, customer defections and adverse effects on
employee productivity) but can often be the most devastating.
B) emphasizes that pursuing unethical
strategies not only damages a company’s reputation but can also have costly,
wide-ranging consequences.
C) starts with numerous ethical rules and
guidelines and an environment where employees rely on these rules for moral
guidance.
D) starts with managers who understand there
is big difference between adopting values statements and codes of ethics that
serve merely as window dressing and those that truly paint the white lines for
a company’s actual strategy and business conduct.
E) begins with ethical guidelines that help
send the message that management takes the observance of ethical norms
seriously and that behavior falling outside ethical boundaries will have
negative consequences.
17 Environmental sustainability involves
_______________
A) a corporate commitment to address the unmet
noneconomic needs of society.
B) deliberate actions to protect the
environment, provide for the longevity of natural resources, maintain
ecological support systems for future generations, and guard against the
ultimate endangerment of the planet.
C) striking a balance between (1) the economic
responsibility to reward shareholders with profits, (2) the legal
responsibility by the company to laws in countries where it operates, (3) the
ethical responsibility to abide by society’s moral norms, and (4) the
discretionary philanthropic responsibility to contribute to the noneconomic
needs of society.
D) developing the resource strengths necessary
to develop a sustainable competitive advantage.
E) All of these.
18 Companies committed to environmental
sustainability _______________
A) make major contributions to local civic and
charitable organizations.
B) consider the commitment to the environment
as a “first order” priority, commitment to employees as a
“second order” priority, and commitment to shareholders as a
“third order” commitment.
C) believe it is essential to strike a balance
between shareholder interests and the interests of stakeholders such as
suppliers, customers, employees, and the communities in which they operate.
D) develop and market only products that are
“environmentally friendly.“
E) adopt sustainable business practices that
meet the needs of the present without compromising the ability to meet the
needs of the future.
19 Which one of the following is not a part of
the business case for why companies should act in a socially responsible
manner?
A) A strong commitment to socially responsible
behavior reduces the risk of reputation-damaging incidents.
B) The aggressive pursuit of market share,
revenues, and profits always puts the company in jeopardy of violating
society’s social responsibility expectations.
C) Conceived social responsibility strategies
work to the advantage of shareholders.
D) Socially responsible actions yield internal
benefits (particularly for employee recruiting, workforce retention, and
training costs) and can improve operational efficiency.
E) Social responsibility actions can lead to
increased buyer patronage.
20 The business case for why companies should act
in a socially responsible manner includes such reasons as _______________
A) improving operational efficiency.
B) avoiding criticism from consumer,
environmental, and human rights activist groups.
C) contributing to lower employee turnover and
better worker productivity.
D) the potential for increased buyer
patronage.
E) All of these.
 
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