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Organizational Behavior – Multiple Choice Questions

1 .An organization has competitive advantage in the markets in which it competes but its culture is rather inwards looking and complacent. In this situation it is unlikely that competitive advantage will be?
a) Copied c) Sustainable b) Eroded d) Threshold

2. The VIRUS acronym in relation to strategic resources stands for? a) Valuable, Intimate, Rare, Un-Substitutable b) Valuable, Inimitable, Robust, Un-Substitutable c) Variable, Inimitable, Robust, Un-Substitutable d) Value, Inimitable, Rare, Un-Substitutable 3. The things that an organization does with its strategic assets are known as? a) Strategic activities c) Threshold activities b) Competences d) Threshold competences

4. Which type of asset is rarely strategic? a) Brand name c) Reputation b) Financial assets d) Land and property

5. Which type of assets can be considered as the most heterogeneous? a) Human c) Physical b) Financial d) Intangible

6. When there is a fit between the goals of the organization and the goals of individuals, this is known as?

marketing and delivery of the product or service d) Directly involved in the production and delivery of the product or service b) Support activities d) Outsourced activities . marketing and delivery of the product or service b) Those activities that are all undertaken in-house c) Those activities that support the production. The value chain is subdivided into two main headings. Synergies allow businesses to add value to one another whereas the extent to which the corporate centre can add value to each of its businesses is called? a) Relatedness c) Competencies b) Size d) Vision 9.a) Goal fit c) Goal hierarchy fit b) Goal congruence d) Goal coordination 7. In the value chain. Which of the following are NOT likely to be sources of relatedness between businesses? a) Similarities in size b) Operating in industries with similar success factors c) Similarities in production technologies d) Selling to customers with similar demographic characteristics 8. These are primary activities and ? a) Peripheral activities c) Secondary activities 10. primary activities are? a) Directly involved in the production.

One of the strategic decisions relating to the value chain concerns vertical integration.11. This would involve ? a) Deciding whether to locate operations in the home country or in a foreign location b) Deciding whether the activity should be performed within the organization or by a different firm c) Deciding to link all activities using Enterprise Resource Planning d) Deciding whether to share certain activities across different products and markets 13. A firm outsources many of its value chain activities. lower control . A network of firms providing different parts of a value-chain in the production of a product or service is known as? a) Franchising c) Orchestrating b) Nearshoring d) Co-specialization 15. Firm A has decided to use an outside travel firm for making travel arrangements but it is based on the premises of Firm A. Compared to a firm that does everything in-house this is likely to incur? a) Higher transaction costs. The 'operations' in a passenger airline service would be? a) The manufacture of the aircraft b) Getting passengers and baggage from A to B by means of flying in an aircraft c) The design of the price structure and yield plan d) Selling the tickets to passengers 12. This is an example of? a) Nearshoring c) Insourcing b) Offshoring d) Outsourcing 14.

When a firm promises more than it can actually deliver to win a contract. Organizational structures and systems can be judged using five dimensions (ABCDE) to assess whether they are achieving an appropriate balance. this is known as: a) Adverse selection c) Moral hazard 17. Decentralization and? .b) Higher transaction costs. Which of the following is correct? a) An organization's structure would be expected to evolve as it grew larger and more diverse b) Every organization starts out with a simple structure. higher control c) Lower transaction costs. Bureaucracy. A 'vertical architecture' is one which? a) Has a tall hierarchy b) Has many layers of management c) Extends beyond the boundaries of legal ownership d) Is very bureaucratic 20. Cultural Control. then moves to a functional structure before becoming divisionalized c) Network structures are superior to functional ones d) Organizational performance will suffer if the structure is not stable 18. higher control d) Lower transaction costs. These five dimensions are Autonomy. lower control 16. The shape or format of reporting and decision making relationships can be defined as the organizational? a) Span of control c) Hierarchy b) Architecture d) Chain of command b) Inverse selection d) Trust hazard 19.

A corporate parent can offer an individual business a number of 'propositions'. select propositions and? a) Lend propositions c) Leverage propositions b) Locate proposition d) Leap propositions 24.a) Equal Opportunities c) Equality and Diversity b) Economic Incentives d) Evidence of Learning 21. stretch propositions. These are build propositions. An organization that divides its structure into two main parts . link propositions.one dealing with product groups and one dealing with customer segments is called? a) A front-back structure c) A back to back structure b) A product-customer structure d) A matrix structure 23. An organization structure that is in the main a functional or divisional structure but also includes project teams to deal with specific issues is called? a) An M-form structure c) A networked structure b) A front-back structure d) A hybrid structure 22. The parenting style 'financial control' will tend to be most suitable in which type of portfolio? a) A broad portfolio of fast growing businesses b) Stable businesses with low investment needs c) A narrow portfolio of closely related businesses d) A rapidly changing business environment 25. Which type of corporate parenting style has the closest relationship with its individual businesses? a) Co-evolution c) Strategic Control b) Corporate flexibility d) Strategic planning 26. What is the main reason why organizations enter alliances? .

a focus strategy involves? a) Selling a limited range of products b) Selling to a narrow customer segment c) Selling to one region only d) Selling simple products that are cheap to produce 29. On average. the clothes retailer is for most of its products following which generic strategy? a) Focused differentiation c) Cost Focus b) Hybrid d) No Frills 30. In Porter's Generic Strategies model. and copy it b) To obtain synergies between other organizations' resources and their own c) To increase their capacity to learn d) Because they have not enough cash to acquire the other organization 27. diversification comes about when a firm is involved in two or more? a) Businesses c) Segments b) Markets d) Industries 32. H&M.a) To find out how the other organization works.According to Bowman's generic strategies model a high price. the highest levels of profitability are shown by? . low-perceived value strategy is only feasible in? a) An oligopoly c) A concentrated industry b) A monopoly d) A fragmented industry 28.At corporate level. Substantial changes to the range of offerings or the markets served or both are known as? a) Differentiation c) Relocation b) Diversification d) Brand extension 31.

Economies of scale are derived from? a) Achieving cheaper unit costs through making larger quantities b) Using cheaper raw materials c) Increasing the breadth of the portfolio d) Increasing the number of markets served 34. Which of the following might NOT be an advantage of increasing the number of countries in which a clothing firm does business? a) Exposure to demanding customers with exotic tastes . Which of the following might be sources of synergy between two business units? a) They have similar customers and use the same distribution channels b) The profits from one can be used to finance the other when its gets into trouble c) They both have a website d) They are both located in the same town 36.a) Firms focused on just one or two products b) Firms with a moderately diverse range of related products and Businesses c) Firms with a very diverse range of related products and businesses d) Firms with a diverse range of unrelated products and businesses 33. Which of the following outcomes is NOT an advantage of a completely vertically integrated business? a) Potentially greater control is achieved b) Potentially greater quality is achieved c) Lowering of risk is achieved d) Lower price of supplies is achieved 35.

A 'market driven' firm will typically? a) Develop new products and then find someone to sell them to . the 'threat of new entrants' relates to? a) Barriers to entry c) Switching costs b) Substitutes d) Buyer power 38. rapid technological change. In the context of environmental analysis. In the Six Forces.An industry characterized by irregular patterns of stability. A situation in which the joint moves of two firms can determine how much money each firm can make or lose can be explained using the story of? a) The Trojan Horse c) The Prisoner's Dilemma b) The Icarus Paradox d) The Icarus Dilemma 40. high uncertainty and global competition can be described as? a) Hypercompetitive c) Atypical b) Hyperactive d) Co-optetive 39.b) Increased efficiency c) Making life more difficult for competitors d) Increased access to funding 37. 'munificence' means? a) The extent to which resources are freely available to support firms in an industry and enable them to grow b) The extent to which it is diverse c) The extent to which it is stable or turbulent d) The extent to which the industry follows the conventional life-cycle stages 41.

Which of the following outcomes is a potential benefit of outsourcing? .Porter's generic strategies are? a) Low price. focus b) Cost leadership. A B2C market is ? a) Business to commercial c) Business to contract b) Business to consumer d) Business to corporate b) Subdividing industries d) Subdividing organizations into departments 44. if an organization does not follow either a cost leadership strategy or a differentiation strategy they are? a) Hybrid c) Typical b) Stuck in the middle d) No frills b) Uniformity d) Convergence of tastes 47. focus d) Low cost. cost focus. Segmentation is a compromise between two ideals: mass marketing and? a) Customization c) Innovation 45. focus differentiation c) Price leadership. Segmentation is a way of ? a) Subdividing markets c) Differentiating products 43. differentiation. differentiation. differentiation.b) Define the target market and produce products that will satisfy those customers' needs c) Operate in a product-oriented fashion d) Suffer from market-myopia 42. differentiation. focus differentiation 46.According to Porter.

tax.a) Higher flexibility c) Lower transaction costs 48. legally separate firm 49. The Resource-based view of the firm could also be described as? a) The outside-in approach c) The outsider approach b) The inside-out approach d) The insider approach 51. The number of months that a business has sufficient cash in the bank to cover outgoings is called ? a) Cash flow c) Cash gearing b) Cash burn d) Cash assets 52. A joint venture can be defined as? b) Higher control d) Better linkages between activities a) Two firms collaborate together on a specific project b) One firm licenses its intellectual property to another firm c) Two firms merge together d) Two firms come together to form a third. The financial terms 'gearing' or 'leverage' are also known as which ratio? a) Earnings before interest. depreciation and amortization b) Interest cover c) Debt/equity ratio d) Cash flow . Tacit knowledge is seen as important feature of competitive advantage in which approach to strategy? a) Resource-based view of the firm c) Industrial organization b) Competitive positioning approach d) Evolutionary approach 50.

However.53.In the context of strategic methods. it is a valid option to 'do nothing'. this is an? a) Input measure of innovation c) Input measure of profitability b) Output measure of innovation d) Output measure of profitability 56. If a firm's debtors are rising it could be an indication of? a) Poor stock turnover c) Poor cash flow b) Weak financial management d) The firm is under capacity b) Shareholder value d) Gearing ratio 55. this can lead to:? a) A core competence c) An infinite option future b) A competency trap d) A limited-option future 57. Which of the following strategies could be considered a 'breakthrough' strategy? a) Ryanair's 'no-frills' service b) Virgin Atlantic's 'upper-class' service c) British Airway's painted tail-fins d) Virgin Atlantic's limousine service 58. For clues as to why a firm is performing badly. The slowest way to grow a business is likely to be through? a) A merger c) Internal development b) outsourcing d) A strategic alliance 59. If we measure the number of new products that Sony has launched in the last three years. 'learning risk' can be defined as? .When formulating strategic options. what type of measure would be useful? a) Operational performance measures c) Return on capital employed 54.

Which of the following industries would be classified as a 'creative' industry? .A firm that has become too large has decided to set up part of the organization as an independent company. Which of the following would NOT normally be an advisable strategy in the introductory stage of the industry life cycle? a) Differentiating on superior product technology b) Internationalization c) Collaborating with competitors to build the industry's profile d) Aiming to maximize efficiency and lower costs 63.The merger between AOL and Time Warner was intended to take advantage of? a) Industry convergence c) Industry fragmentation b) Industry divergence d) International expansion 61. Which of the following would NOT normally be an advisable strategy in a progressive mature industry? a) Differentiating on superior product technology b) Internationalization c) Divesting non-core activities d) Aiming to maximize efficiency and lower costs 64.a) Losing knowledge to alliance partners b) Developing patents that have no market value c) Failing to bring in new ideas from outside the firm d) The financial cost of learning about a new market 60. This is known as? a) Liquidation c) Float-off b) A management buyout d) A sell-out 62.

Which of the following is NOT an important element to look for when selecting an alliance partner? a) Very similar culture and resources b) Compatible expectations and objectives c) They should have as much to lose as you do if the alliance fails d) Resources that complement your own 67. firms also included a supplement detailing the? a) Goodwill c) Brand reputation b) Intellectual capital d) Knowledge 68.It was recognized in the 1990s that physical assets are not the only thing that needs to be included in the valuation of a firm.'Dominant design' can be defined as? b) Pharmaceuticals d) Lap top computers a) The design that is accepted and expected by customers and producers b) The best design in the industry c) The most innovative design in the industry d) The design that producers are forced to adopt 66. Something that you learn to do by practicing rather than from reading a manual is known as? a) Explicit knowledge b) Codified knowledge .a) Musical instruments c) Televisions 65. In Europe. A graph showing a rise in demand over a number of years can be described as? a) Raw data c) Narrative b) Information d) Knowledge 69.

Knowledge that is known to a specific set of people who understand what particular references mean.c) Embodied knowledge d) Symbolic knowledge 70. One of the traps into which organizations can fall with respect to organizational learning is that they misread the reasons for success or failure. This is an example of which type of learning? a) Single-loop learning c) Surface learning b) Double-loop learning d) Deep learning 73. Which of the following attributes is NOT seen as being necessary for an organization to become a 'learning organization'? a) Cultural diversity b) Top management commitment c) Openness to new ideas d) Willingness to experiment and risk making mistakes 74. Organizations that are good at developing relevant capabilities to respond to a changing context are known as? a) Knowing organizations c) Learning organizations b) Stretch organizations d) Absorptive organizations 72. whereas people outside of that group don't know what they mean is known as? a) Clique knowledge c) Cultural knowledge b) Elite knowledge d) Symbolic knowledge 71. An organization adjusts its pricing in response to falling customer demand. This trap is known as? a) Causal ambiguity b) Superstitious learning .

In assessing an organization's success or failure. there are three stages. When trying to judge whether a firm's strategies 'feel' right. the assessment is likely to be? a) Qualitative c) Hypothetical b) Quantitative d) Unconscious 77. working out what to observe and measure.c) Surface learning d) Mistaken attribution learning 75. the most appropriate measure of profit is? a) Before interest and tax c) Before interest b) After interest and tax d) After tax . From a strategist's point of view. One of the main problems with explicit knowledge is that? a) It is difficult to transfer c) It is not fluid b) It is easier to obtain it d) It inhibits further learning 76. Which of the following is the least useful measurement of performance? a) Stakeholders' targets b) Top management's targets c) Comparing against best practice in the industry d) Comparing against competitors 79. establishing the standards against which to measure and? a) Writing up the results c) Drawing conclusions b) Benchmarking d) Providing recommendations 78.

dealing with the paradox of premature commitment versus not enough commitment involves some kind of? a) Trade-off c) Lock-out b) Lock-in d) Diversification 83. It is more useful to use? a) A ratio c) Share price b) Debtors d) Financial measure 81. the liberalizing of international trade and tariff regimes could go in which section or sections? . According to Porter. Corporate governance is concerned with? a) Executive remuneration. The principal-agent problem is concerned with? a) Procurement b) Appropriation of shareholders' investment by a firm's managers c) How to control a firm's distributors and dealers d) Corporate social responsibility 85.A raw number such as profit is not all that useful on its own.80. auditing and accounting procedures. In terms of the PESTLE analysis. and organizations' management structures b) Elections to the board of directors c) Relationships with national governments d) Corporate-level strategy 84. Diversification into many unrelated areas is an example of ? a) Risk management c) Uncertainty reduction b) Good management d) Sustainability 82. disclosure of information.

conduct – performance 91.a) Political c) Political and economic and legal 86. The Six Forces framework is based on the principle of? a) Resource-based view c) Econometrics b) Conduct . Typically. An 'industry recipe' can be defined as? b) Legal d) Political and environmental a) An accepted pattern of operating and competing b) A tactic for anticipating a competitor's next move c) The hidden competences that are difficult to imitate d) A strategic group 87.Which of the following statements is not true when describing a successful strategy? a) It provides some property that is unique or distinctive . profits are highest in which stage of the industry life-cycle? a) Introduction c) Maturity b) Growth d) Decline 88. Which of the following industries is least likely to follow the conventional life-cycle model? a) Software development c) Insurance broking b) Coal mining d) Hairdressing 89.performance d) Structure . Brandenburger and Nalebuff added a sixth force to Porter's Five Forces. It is known as? a) The threat of substitutes c) Seller power b) The power of complementors d) Government regulation 90.structure .

A strategic decision can be distinguished from other types of decisions by three factors. Knowledge which is difficult to define and codify is known as? a) Explicit c) Tacit b) Tangible d) Random 94. Logical incrementalism' can be described as? a) Careful design and planning b) Emergent . Competitive advantage based on the creation of opportunities using internal resources is characterized by which approach/view? a) The positioning approach c) The resource-based view b) The outside-in approach d) The knowledge-management approach 95.b) It provides the means for renewing competitive advantage c) It addresses changes in the external environment d) It guarantees long term survival 92. A strategic manager that seeks to reach acceptable profit targets as opposed to making as much profit as possible is making decisions of which type? a) Satisfactory c) Irrational b) Satisficing d) Optimal 96 . it is best described as which type of strategy? a) Transnational c) Multi-national b) Global d) Global-local 93. When a firm seeks the benefits of global integration and local adaptation. time-scale and? a) Commitment c) Impact b) Riskiness d) Longevity 97. these are magnitude.

distinctiveness. external environment c) Distinctiveness. internal resources. At what level is this decision likely to be made? a) Business c) Functional b) Corporate d) International 100. fit d) Sustainability. sustainability b) Fit. McDonalds is deciding whether to expand into manufacturing kitchen equipment in China. An organization in which strategy development is characterized by internal political negotiation and self-interest is operating in which strategy-making mode? a) The transitive mode c) The command mode b) The muddling through mode d) The emotional mode 99. These are? a) Fit. external environment . internal resources. distinctiveness.c) Cautious resource allocation analysis d) Top management rational 98. The authors believe there are three tests that can be applied to judge whether a strategy is 'good'.

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