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Question Paper
Business Policy & Strategy (MB311) : October 2005
 
Section A : Basic Concepts (30 Marks)
•
This section consists of questions with serial number 1 - 30.
•
Answer all questions.
•
Each question carries one mark.
•
Maximum time for answering Section A is 30 Minutes.
1.
Which of the following is/are exit barriers?I. Investments in plant and equipment that have no alternative uses and cannot be sold off.II. Low fixed costs of exit.III. Emotional attachment with an industry.IV. Economic dependence on the industry.(a) Only (I) above (b) Only (II) above (c) Both (I) and (III) above(d) Both (III) and (IV) above (e) (I), (III) and (IV) above.
< Answer >
2.
In which of the following operations, after completion, the facilities are transferred to the host country?(a) Joint venture (b) Management contracts (c) Production sharing(d) Licensing (e) Turnkey operations.
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3.
Which of the following environment of an organization constitutes the values, beliefs, attitudes,opinions and lifestyles?(a) Social environment (b) Economic environment(c) Geographic environment (d) Demographic environment(e) Political environment.
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4.
Which of the following strategies of Porter, assumes that a firm can serve its strategic target marketmore effectively than its competitors who are serving much bigger market?(a) Overall cost leadership (b) Differentiation (c) Focus(d) Vertical merger (e) Concentration.
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5.
Which of the following is/are the basic characteristics which differentiate functional strategies from 
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grand strategies?I. Time horizon covered.II. Specificity.III. Participation in their development.(a) Only (I) above (b) Only (II) above (c) Both (I) and (II) above(d) Both (II) and (III) above (e) All (I), (II) and (III) above.
6.
Which of the following is a general guide that specifies the broad parameters within whichorganizational members are expected to operate in pursuit of organizational goals?(a) Strategy (b) Objective (c) Policy (d) Plan (e) Control.
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7.
Which of the following is
not
a
 
part of change process?(a) Recognition of need for change (b) Foster debate(c) Assign responsibility (d) Create consensus(e) Refreezing.
< Answer >
8.
Firms pursue, which of the following strategies to grow while remaining relatively simple?(a) Product development (b) Concentration (c) Innovation(d) Conglomerate diversification (e) Joint ventures.
< Answer >
9.
Which of the following is/are
true
of strategic leadership style?I. Small organizations are run democratically.II. Leadership style also relates to the role of planning and the importance of incremental change in
< Answer >
1
 
strategic management.III. In relatively stable environments both entrepreneurial leadership style and conservative leadershipstyle can be appropriate and successful.(a) Only (I) above (b) Only (II) above (c) Both (I) and (II) above(d) Both (II) and (III) above (e) All (I), (II) and (III) above.
10.
Which of the following refers to the development of long term plans for managing opportunities andthreats in the external environment and for utilizing the strengths and overcoming the weaknesseswithin the organization?
< Answer >
(a) Strategy formulation (b) Strategy implementation(c) Environmental scanning (d) Evaluation and control(e) Strategy dismantling.
11.
Which of the following is the term used to describe coercive management tactics and which means theruthless use of power, particularly coercive power and manipulation to attain personal goals?(a) Machiavellianism (b) Coercision (c) Concentration(d) Escapism (e) Cooption.
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12.
Which of the following requires its practitioners to justify every dollar they spend each new period?(a) Expenditure budget (b) Standard budget(c) Functional budget (d) Master budget(e) Zero-Base budget.
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13.
Which of the following is an anti takeover strategy, in which the target company issues bonds whichencourage holders to cash in at a high price?(a) Poison pill (b) Golden parachute (c) Poison puts(d) Leveraged recapitalizations (e) Leveraged buy out.
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14.
Which of the following provides managers with unity of direction that transcends individual, parochialand transitory needs?(a) Strategy (b) Policy (c) Plan (d) Vision (e) Mission.
< Answer >
15.
Because which of the following it is possible to manufacture goods at a lower average cost as comparedto other manufacturers with lower levels of output?(a) Economies of scale (b) Product differentiation (c) Diversification(d) Environmental analysis (e) Concentration.
< Answer >
16.
Which of the following is/are
true
about fragmented industries?I. A large number of large companies are contained in a fragmented industry.II. Aerospace, automobiles and pharmaceuticals constitute fragmented industries.III. Many fragmented industries possess low barriers of entry and have commodity products that arevery hard to differentiate.IV. Low barriers of entry during strong demand and high profits will lead to more new entrants hopingfor profitability.(a) Only (I) above (b) Only (II) above (c) Only (IV) above(d) Both (I) and (II) above (e) Both (III) and (IV) above.
< Answer >
17.
Which of these decision-making modes is characterized by reactive solutions to existing problems,rather than a proactive search for new opportunities?(a) Entrepreneurial mode (b) Planning mode (c) Adaptive mode(d) Logical mode (e) Operative mode.
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18.
The essence of formulating a competitive strategy is, relating the company to(a) Its competitors (b) Its customers (c) Its creditors(d) Its environment (e) Its suppliers.
< Answer >
19.
Which of the following is/are
true
regarding coalition?I. Coalitions such as technology licenses, supply agreements, joint ventures and marketingagreements are formed with a long-term orientation.II. Coalitions broaden the scope of operations by broadening the firm.III. The coalitions bestow the cost and differentiation advantages of vertical linkages without the firm
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2
 
 
having to go in for vertical integration.IV. Entering into a coalition is a laborious and time consuming process, which might involve manycompromises and thus can nullify the advantages expected of the coalition.(a) Only (I) above (b) Only (II) above(c) Both (I) and (III) above (d) (I), (III) and (IV) above(e) All (I), (II), (III) and (IV) above.
20.
Which of the following is
not
one of the five types of organizational structures identified by Mintzberg? 
< Answer >
(a) Simple structure (b) Machine bureaucracy (c) Matrix structure(d) Professional bureaucracy (e) Divisionalized form.
21.
Which strategy would be effective when the new products have a counter cyclical sales patterncompared to an organization's present products?(a) Forward integration (b) Retrenchment(c) Horizontal diversification (d) Market penetration (e) Divestiture.
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22.
What type of strategy is recommended when new channels of distribution are available that are reliable,inexpensive, and of good quality?(a) Market development (b) Product development(c) Joint venture (d) Horizontal integration (e) Divestiture.
< Answer >
23.
Which of the following statements is/are
true
about value chain analysis?I. Value chain analysis is based on the assumption that a business’s basic purpose is to create valuefor its suppliers.II. In this method of analysis, managers divide the activities of their firms into sets of separateactivities that add value.III. When managers divide the activities of their firms into sets of separate activities, the activities of the organization have to be identified and examined by managers.IV. Managers acquire an in depth understanding of their firm’s capabilities, its cost structure and howthese create competitive advantage or disadvantage.(a) Only (I) above (b) Both (II) and (III) above(c) Both (III) and (IV) above (d) Both (II) and (IV) above(e) (II), (III) and (IV) above.
< Answer >
24.
As per Mintzberg, in which of the following modes, strategies are framed by one powerful individualand focus solely on the organization’s opportunities?(a) Adaptive mode (b) Planning mode (c) Entrepreneurial mode(d) Exhaustive mode (e) Comprehensive mode.
< Answer >
25.
Which of the following cultures are cautious and conservative?(a) Inert (b) Adaptive (c) Mixed (d) Complex (e) Competitive.
< Answer >
26.
Which of the following is/are
not
the growth strategies?I. Concentration.II. Horizontal integration.III. Divestiture.IV. Joint ventures.(a) Only (III) above (b) Both (I) and (II) above(c) Both (II) and (IV) above (d) Both (II) and (III) above(e) (I), (II) and (IV) above.
< Answer >
27.
An organization has various objectives like profits, employees well being, and customer satisfaction.The objective of organizational development isI. Greater trust and collaboration between managers and business units.II. Effective decision making.III. Increased innovation.IV. Better customer services and higher profits.(a) Only (I) above (b) Only (II) above (c) Both (I) and (II) above(d) (I), (II) and (III) above (e) All (I), (II), (III) and (IV) above.
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