Sample Final Exam Questions

1. One skill that a senior strategy analyst possesses is the ability to recognize when two companies would
be better off cooperating than working independently. Senior analysts know that in a cooperative strategy,
firms combine which two elements to create a competitive advantage?
a. Resources and capabilities
b. Resources and firm equity
c. Firm equity and core competencies
d. Corporate funding and technology licenses

2. As noted in the training meeting on strategic alliances, firms form alliances for a variety of reasons.
Which of the following is a reason firms would form a strategic alliance?
a. Additional resources
b. Create value
c. Reduce uncertainty
d. All of the above

3. Two firms want to form an alliance to focuses on maximizing their partnership’s value creation
opportunities. Per your training on strategic alliances, you know that this is called:
a. Profit maximization
b. Implementation strategy
c. Cost minimization
d. Opportunity maximization

4. Which of the three types of strategic alliances encourages shared value between companies and
requires the cooperating companies to own a portion of the venture that they create together?
a. Equity strategic alliance
b. Joint venture
c. Non-equity strategic alliance
d. Competitive alliance

5. Tesla Motors has initiated partnerships with several other companies. The companies were discussed
by ASI consultant Paul Gregg, and CEO Porter in several training meetings. List three of these
companies:

Panasonic, Lotus, Toyota, Daimler

6. Complementary Strategic Alliances are a specialty of ASI. CEO Porter encourages all clients to
consider cooperation in addition to direct competition. However, not all companies are designed to work
well together. A limitation that ASI analysts are aware when companies consider forming an alliance is:
a. The companies were incorporated in different states
b. The companies have different learning rates
c. Both companies have similar reputations
d. None of the above

7. During the training meeting on cooperative strategies, we discussed business-level and corporate-level
strategies. Recall that there are three common corporate-level strategies that we can consider for our
clients, and these are:
a. domestic, international, and global
b. cost-leadership, differentiated, integrated
c. diversifying, synergistic, and franchising
d. None of the above

8. If a client asks, “Is it true that multinational companies typically outperform firms that only operate
domestically?” – your answer should be:
a. Yes
b. No

9. One risk that we advise our clients about when they consider using an international cooperative
strategy is that their partner may act opportunistically. State in one sentence what this means:

The partner acts primarily for the benefit of the partner only, not both/all companies

10. We advise clients that there are two primary ways that they can manage risks associated with
cooperative strategies. One way is to use detailed contracts and monitor these contracts. The other way is:
a. Performing a thorough background check on your partner
b. Buying a security bond in the event the partner defaults
c. Developing a parallel relationship with another partner for backup
d. Developing trusting relationships between partners

11. A client of ASI wants to diversify his company. He says to you that 95% or more of his company’s
revenue comes from a single business. You reply, to him that he is pursuing a ____________ level of
diversification.
a. Very High
b. High
c. Moderate
d. Low

12. One of your client’s comes and tells you that he wants to increase his cost savings. You advise him to
share some of his resources and capabilities to some of his other businesses. You are telling your client to
follow _______________
a. Diversification
b. Economics of scope
c. Economics of scale
d. Strategic alliances

13. Companies pursuing very high levels of diversification have less than 70% of revenue coming from
the dominant business, and there are common links between the businesses.
a. True
b. False

14. Dr. Porter talked about Steve Jobs in his lecture on corporate-level strategy? Which of the following
two things did Steve Jobs focus on when he was a CEO?
a. Strategic alliances
b. Quality and innovation
c. Risk reduction
d. Sharing core competencies

15. According to Dr. Porter’s lecture on corporate-level strategy, it is easy to shift from cost leadership to
differentiation strategy.
a. True
b. False
16. In Dr. Porter’s lecture, he mentioned that Apple follows a _______________ strategy.
a. Cost leadership
b. Differentiation
c. Diversification
d. Franchising

17. A junior analyst asks you for advice with a client that he is working with. His question is, “I have a
client who wants to increase cost savings through improved allocations of financial resources based on
investments inside or outside the firm. What type of diversification strategy should the client follow?”
You consider the question, and then answer:
a. Unrelated diversification
b. Operational relatedness
c. Corporate relatedness
d. Related diversification

18. According to Dr. Porter’s lecture, corporate-level strategy is a bunch of business-level strategies that
are different and are bundled together
a. True
b. False

19. According to Dr. Porter’s lecture, how is business-level strategy and corporate-levels strategy related?
a. Business level strategy is a predecessor of corporate-level strategy
b. Corporate-level strategy is a predecessor of business-level strategy
c. Both always create value to the firm
d. Both always lead to competitive advantage

20. A client of ASI tells you that the business units are compartmentalized in his company and are not
working properly. You think and suggest that he should create ________ between the business units.
a. Control
b. Competition
c. Diversification
d. Synergy

21. A client of ASI asks you about the decision that Netflix made regarding the plan to split their online
DVD rentals from streaming rentals. Specifically, the client asks what type of decision was made by
Netflix. You reply, this was most likely a ___________ decision.
a. strategic
b. tactical
c. permanent
d. business-level

22. A second client of ASI asks you why Netflix made the decision to split their online DVD rentals from
streaming rentals. You reply, this was most likely a decision to change the ___________ of the
corporation.
a. control
b. tax liability
c. liability
d. structure
23. As a client’s business grows, three key activities that the top management team needs to focus on are
formulating, implementing and controlling strategy. As discussed in the training meeting, these are three
______________ activities which are best performed ________________.
a. static, simultaneously
b. reciprocating, step-by-step
c. static, sequentially
d. dynamic, simultaneously

24. Considering the different types of strategic control available to a client’s management team, which of
the following is the most difficult and usually the most important when it comes to achieving the client’s
strategy?
a. Informational control
b. Implementation control
c. Behavioral control
d. Product control

25. Which of the following controls is typically used to measure performance against previously
established quantitative standards?
a. Organizational
b. Financial
c. Strategy
d. Internal

26. A junior analyst asks you for advice with a client that he is working with. His question is, “I have a
client who wants to expand her business. She currently makes all the decisions, but she feels she needs to
delegate decisions along lines of specialization as her company grows. What organizational structure
should I recommend?” You consider the question, and then answer:
a. simple form
b. m-form
c. functional form
d. corporate form

27. The Multidivisional Structure consists of three forms. Which of those forms does not share resources
or common corporate strengths?
a. Competitive form
b. Functional form
c. Cooperative Form
d. SBU Form

28. When a client asks you for advice about the one structure that is generally best for companies within
the same industry, you should confidently reply, functional.
a. True
b. False

29. A change in strategy usually results in a change in structure and vice versa. If a client asks which one
is typically the most important, you should confidently reply, strategy.
a. True
b. False
30. One example of leadership that we discussed in the training session on leadership was what Tim
Cook, the new CEO of Apple, is doing to demonstrate his leadership interests. Examples that we
discussed included all of the following EXCEPT:
a. Selling information gathered on consumer preferences
b. Matching amounts donated to charities by employees
c. Attempting to make a change in Apple’s structure
d. Encouraging more of a team atmosphere

31. When making strategy decisions, it is important for managers to know when to act as well as when
not to act. A similar concept for leaders and managers is managerial discretion. When advising clients
about the factors that managers need to consider regarding discretion, which of the following should be
discussed?
a. External Environment
b. Characteristics of Manager
c. Characteristics of the Organization
d. All of the above impact managerial discretion

32. In the Gettysburg video segment you were directed to watch, what does Colonel Joshua Lawrence
Chamberlain mention the soldiers are “in the end, all fighting for”?
a. The reputation of the Union army
b. Each other
c. Civil rights
d. Glory of victory

33. Having the right resources in place to implement a “firing solution,” a term used in submarine warfare
per CEO Porter’s grandfather’s training, is similar to finding the right balance between which of the
following?
a. Information Control and Behavioral Control
b. Information Control and Information Sharing
c. Financial Control and Management
d. Human Resources and Behavioral Control

34. In Jim Collins book Good to Great, five levels of leadership are defined. When advising a client about
the highest level of leadership, you will remind them that it encompasses the first four levels as well as
which of the following key personal characteristic of the leader?
a. Hubris
b. Humility
c. Ability to multitask
d. Personable

35. At ASI, we know that companies are often described as an array of activities. It follows then that
strategic leaders facilitate the development of appropriate strategic _______________ and determine how
to implement them.
a. plans
b. acquisitions
c. designs
d. actions

36. When clients ask for guidelines to use to develop their leadership style, it’s important to take the time
to get them to reflect on their own life experiences and to recognize that these experiences form a very
influential foundation for their own leadership style.
a. True
b. False

37. There are several fundamental differences between leading and managing. One set of differences is
leaders are typically called upon during times of ______________, and managers are typically called
upon during times of _________________.
a. status quo, change
b. change, status quo
c. fast growth, slow growth
d. slow growth, fast growth

38. Top management teams are not required by law; a company can be run entirely by the CEO.
However, top management teams provide many valuable functions regarding their influence on the
leadership of a company. One key function is they help the CEO avoid making poor decision due to
limited CEO knowledge and:
a. corporate tax liability.
b. changes in HR policies.
c. CEO hubris.
d. CEO fatigue.

39. You were directed to watch the video of Martin Luther King when he spoke about many issues in his
speech on 8/23/1968, entitled “I have a dream.” One point that he made that applies to leaders of today, is
when he said, “We have also come to this hallowed spot to remind America of the fierce urgency of
______.”
a. The Future
b. Civil Rights
c. Now
d. Economics

40. According to Dr. Porter’s lecture, opportunity maximization means maximizing partnership’s value
creation opportunities
a. True
b. False