MGMT6 6th Edition Chuck Williams Test

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Course Pre-Assessment CH 06
MGMT6

MULTIPLE CHOICE

1. Which of the following is a condition that must be met if a firm's resources are to be used to achieve a
sustainable competitive advantage?
a. differentiation
b. imperfectly imitable resources
c. diversification
d. entrepreneurial orientation
e. a matrix organizational structure
ANS: B PTS: 1 REF: 6.1 OBJ: 6.1
TOP: AACSB Analytic

2. The first step in the strategy-making process is to:

a. assess the need for strategic change
b. conduct a situation analysis
c. choose strategic alternatives
d. evaluate the impact of changes on the internal environment
e. create a strategic budget
ANS: A PTS: 1 REF: 6.2a OBJ: 6.2
TOP: AACSB Analytic

3. In a situational analysis, a strategic group is a group of __________ that top managers choose for
comparing, evaluating, and benchmarking their company's strategic threats and opportunities.
a. non-industry-specific companies
b. expert managers
c. trade journals and other relevant periodicals
d. other firms within an industry
e. consulting firms that use the Delphi technique
ANS: D PTS: 1 REF: 6.2b OBJ: 6.2
TOP: AACSB Analytic

4. Which of the following is a mechanism used to examine external threats and opportunities facing a
firm as well as its internal strengths and weaknesses?
a. organizational scanning
b. internal marketing
c. shadow-strategy task forces
d. benchmarking
e. a situational analysis
ANS: E PTS: 1 REF: 6.2b OBJ: 6.2
TOP: AACSB Analytic

5. In any organization, the __________ are the less visible, internal decision-making routines,
problem-solving processes, and organization cultures that determine how efficiently inputs can be
turned into outputs.
a. imperfectly imitable resources
b. valuable resources
c. distinctive competencies
 d. core capabilities
e. sources of innovation
ANS: D PTS: 1 REF: 6.2b OBJ: 6.2
TOP: AACSB Analytic

6. The term __________ refers to the overall organizational strategy that addresses the question "What
business or businesses are we in or should we be in?"
a. firm-level strategy
b. corporate-level strategy
c. industry-level strategy
d. portfolio strategy
e. vision
ANS: B PTS: 1 REF: 6.3 OBJ: 6.3
TOP: AACSB Analytic

7. The __________ is a portfolio strategy that managers use to categorize their corporation's businesses
by growth rate and relative market share. This strategy guides them on how to decide how to invest
corporate funds.
a. investment matrix
b. SWOT matrix
c. BCG matrix
d. portfolio management matrix
e. Maslow grid
ANS: C PTS: 1 REF: 6.3a OBJ: 6.3
TOP: AACSB Analytic

8. The research on diversification in portfolio management indicates that the best approach is probably:
a. related differentiation
b. related diversification
c. unrelated diversification
d. repositioning
e. no diversification
ANS: B PTS: 1 REF: 6.3a OBJ: 6.3
TOP: AACSB Analytic

9. Significant cost reductions, layoffs of employees, closing of poorly performing stores, offices, or
manufacturing plants, or closing or selling entire lines of products or services would be characteristic
of a __________ strategy.
a. portfolio
b. retrenchment
c. stability
d. firm-level
e. rehabilitation
ANS: B
A retrenchment strategy shrinks the size or the scope of the business.

PTS: 1 REF: 6.3b OBJ: 6.3 TOP: AACSB Analytic

10. According to Michael Porter, five industry forces determine an industry's overall attractiveness and
potential for long-term profitability. Which of the following is one of those forces Porter identified?
 a. existence of complementary products
b. organizational structure
c. existing benchmarks
d. span of management
e. bargaining power of suppliers
ANS: E
See Exhibit 6.6.

PTS: 1 REF: 6.4a OBJ: 6.4 TOP: AACSB Analytic

11. An organization implementing a(n) ____________________ strategy would NOT follow a

consistent strategy.
a. defender
b. pioneer
c. analyzer
d. reactor
e. prospector
ANS: D
Companies using a reactor strategy simply react to changes in the external environment.

PTS: 1 REF: 6.4c OBJ: 6.4 TOP: AACSB Analytic

12. Resource similarity and __________ are factors that determine the extent to which firms will be in
direct competition with each other.
a. market commonality
b. resource similarity
c. related diversification
d. product differentiation
e. customer autonomy
ANS: A PTS: 1 REF: 6.5a OBJ: 6.5
TOP: AACSB Analytic