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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 partnerships 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 companys 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 clients 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. Porters lecture on corporate-level strategy, it is easy to shift from cost leadership to differentiation strategy. a. True b. False

16. In Dr. Porters 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. Porters 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. Porters 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 clients 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 clients management team, which of the following is the most difficult and usually the most important when it comes to achieving the clients 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 Apples 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 Porters grandfathers 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, its 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. Porters lecture, opportunity maximization means maximizing partnerships value creation opportunities a. True b. False