Strategic Management Task
Strategic Management Task
Strategic Management Task
Chapter 7
MCQ
1) Which kind of corporate strategy deals with the manner in which the firm
coordinates activities and builds corporate synergies through resource sharing and
development?1) _______
A) parenting strategy
B) functional strategy
C) portfolio strategy
D) cooperative strategy
E) directional strategy
3) According to the BCG Growth Share Matrix, products that typically bring in far
more money than is needed for maintenance of their market share are called3)
_______
A) cash cows.
B) lost leaders.
C) dogs.
D) question marks.
E) stars.
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5) When P&G, Kimberly-Clark, and Scott Paper compete with each other in
varying combinations of consumer paper products, they are said to be engaging
in5) _______
A) laissez-faire competition.
B) multipoint competition.
C) horizontal competition.
D) oligopolistic competition.
E) strategic competition.
7) Which strategy might be the most likely when management realizes that the
current industry is unattractive and that the firm lacks outstanding skills that it
could easily transfer to related products or services in other industries?7) _______
A) concentration
B) horizontal growth
C) concentric diversification
D) vertical growth
E) conglomerate diversification
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9) Which external growth strategy was demonstrated when Procter & Gamble
completely absorbed Gillette?9) _______
A) acquisitions
B) mergers
C) strategic alliances
D) concentration
E) diversification
10) The most logical growth strategy for a corporation with current product lines
with real growth potential in a growing industry is10) ______
A) concentric diversification.
B) concentration.
C) stability.
D) retrenchment.
E) conglomerate integration.
11) An attempt to explain that vertical integration is more efficient than contracting
for goods and services in the marketplace when the transaction costs of buying
goods on the open market becomes too great has been proposed by11) ______
A) transaction growth theory.
B) freakonomics.
C) transaction cost economics.
D) population theory.
E) institution theory.
12) The stability strategy is appropriate for all of the following circumstances
EXCEPT 12) ______
A) appropriate when the industry is in decline.
B) when a firm is continuing its current activities without a significant change in
direction.
C) useful in the short-run but can be dangerous if followed too long.
D) popular with small business owners who have found a niche and are happy with
their success.
E) most appropriate for reasonably successful corporations in a reasonably
predictable environment.
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Essay Questions:
a- Full integration
a firm internally makes 100% of its key supplies and completely controls its
distributors:
An example of vertical integration is a store, like Target, which has its own store
brands. It owns the manufacturing, controls the distribution, and is the retailer.
(shoes, accessories, cloth, ….)
b- Taper integration
a firm internally produces less than half of its own requirements and buys the rest
from outside suppliers: (1) Coca-Cola and Pepsi both having integrated bottling
subsidiaries while also relying on independent bottlers for production and
distribution in some markets, or (2) BMW which uses both in-house market
research from its Corporate Center Development and external market research
from independent, specialized firms
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c- Quasi-integration
a company does not make any of its key supplies but purchases most of its
requirements from outside suppliers that are under its partial control: Electronic
integration stands for a form of vertical quasi -integration achieved through the
deployment of a proprietary inter-organizational system , which is considered as a
cheaper way to gain integration advantage than conventional vertical integration:
Apple
d- Long-term contracts
Agreements between two firms to provide agreed-upon goods and services to each
other for a specific period of time: construction companies using forklifts, cranes,
heavy equip,..
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• The External Landscape: Mergers and acquisitions are not done in a business
vacuum. There are competitors, customers and vendors/strategic partners to
consider. It’s important to manage all of these relationships.
6) Developing and implementing a portfolio strategy for each business unit and a
corporate policy for managing all the alliances of the entire company are crucial to
the success or failure of the company. Comment on this statement to explain the
tasks necessary for Managing a Strategic Alliance Portfolio
1. Developing and implementing a portfolio strategy for each business unit and a
corporate policy for managing all the alliances of the entire company
2. Monitoring the alliance portfolio in terms of implementing business units’
strategies and corporate strategy and policies
3. Coordinating the portfolio to obtain synergies and avoid conflicts among
alliances
4. Establishing an alliance management system to support other tasks of multi-
alliance management
Merger
A transaction involving two or more corporations in which stock is exchanged but
in which only one corporation survives
Acquisition
100% purchase of another company
Hostile Takeover (From the Internet)
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A hostile takeover is the acquisition of one company (called the target company)
by another (called the acquirer) that is accomplished by going directly to the
company's shareholders or fighting to replace management to get the acquisition
approved.
8) Discuss what is meant by corporate parenting, what are the required steps for a
company to develop a corporate parenting strategy?
Corporate parenting
• Views a corporation in terms of resources and capabilities that can be used
to build business unit value as well as generate synergies across business
units
• Generates corporate strategy by focusing on the core competencies of the
parent corporation and the value created from the relationshipbetween the
parent and its businesses
9) The BCG (Growth-Share) Matrix is old but has stood the test of time. How
significant and practicably usable is it today, explain the limitation of using this
technique.
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Chapter 8
Leveraged buyout
company is acquired in a transaction financed largely by debt usually obtained from
a third party such as an insurance company or an investment banker. Private equity
companies often use LBOs to buy and later sell a company at a profit. The most
successful examples of LBOs are Wesray Capital acquired Gibson Greeting Cards,
Blackstone Group purchased Hilton Hotels.
Reverse stock split
A reverse stock split is a corporate action in which a company reduces the number
of shares it has outstanding by a set multiple. This is the opposite of a stock split, in
which a company increases its outstanding shares by a set multiple. Opposite to
(Apple 2014 case 7 for1)
11) There are many choices for a company to deal with R&D strategy; it can be
either a technological leader, or a technological follower, or an open innovation
company. Comment on this statement to enumerate the difference between each
approach.
Technological leader
Pioneering an innovation
Technological follower
Imitating the products of competitors
Open innovation
Firm uses alliances and connections with corporate, government, academic labs and
consumers to develop new products and processes
Outsourcing
Purchasing from someone else a product or service that had been previously
provided internally (the reverse of vertical integration)
Offshoring
Offshoring is the practice of relocating business activities, including jobs, to a
location outside the home country of operation
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13) What is the difference between Multiple sourcing, Sole sourcing, and Parallel
sourcing?
Multiple sourcing
The purchasing company orders a particular part from several vendors
Sole sourcing
Relies on only one supplier for a particular part
Parallel sourcing
Two suppliers are the sole suppliers of two different parts, but they are also backup
suppliers for each other’s parts
15) Several strategies that could be considered corporate, business or functional are
very dangerous. Managers who have made poor analyses or lack creativity may be
trapped into considering some of the strategies to avoid. Comment on this statement.
Failure almost always stems from the actions of the decision maker, not from bad
luck or situational limitations.
16) If there is little fit between corporate strategy and corporate culture, what are the
critical decisions the management must investigate?
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17) A common misbelief is that downsizing action is a response of a failing
organization, downsizing is associated with the idea of business process
reengineering and can be used to sustain competitive advantage? Comment on this
statement.
Downsizing (right-sizing?)
•Eliminate unnecessary work
Not across the board cuts
•Contract out work for cost savings but…
Chapter 9
MCQ
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2) It is advisable to have management from all levels participate in the strategy
formulation process2) _______
A) course of action.
B) program.
C) guidelines.
D) procedures.
E) budgets.
A) coordinated strategies
B) shared know-how
C) new business creation
D) economies of scale
E) shared tangible resources
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5) According to Gooldand Campbell, when companies coordinate the flow of
products or services of one unit with that of another unit to reduce inventory and
increase production efficiency, the synergistic effect is known as5) _______
6) The radical redesign of business processes to achieve major gains in cost, service,
or time is called6) _______
A) action planning.
B) management by objectives.
C) statistical process control.
D) total quality management.
E) Business Process reengineering.
7) The program which incorporates the statistical approach of Six Sigma with the
lean manufacturing program originally developed by Toyota is known as7) _______
A) flexible manufacturing.
B) Lean Six Sigma.
C) job enlargement.
D) reengineering.
E) just-in-time.
8) What term refers to the study of individual tasks in an attempt to make them more
relevant to the company and to the employee(s)?8) _______
A) position matching
B) responsibility shift
C) job design
D) task conversion
E) functional duties
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9) The combining of tasks to give a worker more of the same type of duties to
perform is known as9) _______
A) job rotation.
B) job motivation.
C) job combination.
D) job enlargement.
E) job enrichment.
10) How does job rotation combat the adverse consequences of task
specialization?10) ______
A) by forming natural work units to provide the worker with more responsibility
B) by combining different tasks, thereby giving them more responsibilities
C) by giving the worker more autonomy through alterations in the job
D) by altering the work to provide the worker with more control over activities
E) by moving workers through several jobs, thereby exposing them to increased task
variety
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13) A highly developed international company with a deep involvement throughout
the world, plus a worldwide perspective in its management and decision making is
called a(n)13) ______
A) multidomesticcorporation.
B) Stage IV corporation.
C) global corporation.
D) international corporation.
E) multinational corporation.
Essay Questions
a) Timing tactic
deals with when a company implements a strategy
*First mover
first company to manufacture and sell a new product or service
*Late movers
may be able to imitate the technological advances of others, keep risks down by
waiting until a new technological standard or market is established and take
advantage of the first mover’s natural inclination to ignore market segments
20) What are the different offensive tactics a company can use to attack a
competitor’s position?
•Frontal assault: the challenger firm and is intended to have a head on attack on the
competitor by matching him in all the aspects Viz, product, price, place, promotion.
•Flanking maneuver: the challenger firm is intended to attack the weak points or
blind spots of the competitor
•Bypass attack:the most indirect marketing strategy adopted by the challenging
firm with a view to surpassing the competitor by attacking itseasier markets.
•Encirclement: The Encirclement Attack is a war strategy adopted by the challenger
firm intended to attack the competitor on all the major fronts using wide product
range or market location range.
•Guerilla warfare: is an attack strategy concept designed for businesses to promote
their products or services in an unconventional way with little budget to spend
21) According to Goold and Campbell, synergy can take place in one of six forms.
Explain
• Shared know-how
• Coordinated strategies
• Shared tangible resources
• Economies of scale or scope
• Pooled negotiating power
• New business creation
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22) In a classic study of large U.S. corporations such as DuPont, General Motors,
Sears and Standard Oil, Alfred Chandler concluded that structure follows
strategy—that is, changes in corporate strategy lead to changes in organizational
structure. In light of this statement enumerate What is the particular sequence
proposed by Chandler of what occurs?
The external and internal challenges that may block this development
Internal
Lack of resources
Lack of ability
Refusal of top management to delegate
External
Economic conditions
Labor shortages
Lack of market growth
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24) Entrepreneurs who start businesses generally have four tendencies that work
very well for small new ventures but become Achilles’ heels for these same
individuals when they try to manage a larger firm with diverse needs, departments,
priorities and constituencies. Comment on this statement
25) What is meant by the term “Business Process Re-Engineering”, and what are
the principles that support this process?
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26) What is synergy? According to Goold and Campbell, what are the six forms it
can take?
Synergy
Exists for a divisional corporation if the return on investment is greater than what
the return would be if each division were an independent business
Chapter 10
MCQ
1) According to a study of downsizing in the automobile-related industry, all of the
following are problems associated with inappropriate downsizing EXCEPT1)
_______
A) Blanket offers for early retirement prompted even valuable employees to leave.
B) Surviving employees had to do extra work in addition to their own.
C) Outsourcing was eliminated.
D) Surviving employees experienced decreased morale.
E) The wrong jobs were eliminated.
2) Research suggests that boards of directors tend to look outside the firm for the
next CEO under which following circumstance?2) _______
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3) Which one of the following is NOT part of the process of MBO?3) _______
A) Uncertainty avoidance
B) masculinity-femininity
C) individualism-collectivism
D) Power distance
E) Long-term orientation
A) Deculturation
B) Assimilation
C) Separation
D) Integration
E) Segmentation
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7) According to Hofstede, which cultural dimension describes the extent to which a
society values individual freedom and independence of action compared with a
tight social framework and loyalty to the group?7) _______
A) Uncertainty avoidance
B) masculinity-femininity
C) individualism-collectivism
D) Power distance
E) Long-term orientation
8) According to the text, the process of replacing a key top manager is called8)
_______
A) Executive strategy.
B) Executive placement.
C) Executive outside succession.
D) Executive succession.
E) Executive search.
A) Stability
B) Integration
C) Growth
D) Retrenchment
E) Hold
10) Which type of chief executive officer with a great deal of experience in that
particular industry would be appropriate for a corporation following a
concentration strategy emphasizing vertical or horizontal growth?10) ______
A) Professional liquidator
B) Dynamic industry expert
C) Turnaround specialist
D) Analytical portfolio manager
E) Cautious profit planner
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11) One research study of TQM successes and failures concluded that a key
ingredient in TQM programs is11) ______
12) To ensure employees are gaining the appropriate mix of experience to prepare
employees for future responsibilities, many corporations move people from one job
to another utilizing the technique of12) ______
A) Job rotation.
B) Job enrichment.
C) Job specialization.
D) Job enlargement.
E) Job design.
13) One of the big common mistakes by corporations sending executives on global
assignments is NOT13) ______
14) According to the text, what is the "key" to effective management of change in
culture?14) ______
A) Operationalization
B) Planning
C) Evaluation
D) Staffing
E) Communication
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Essay Questions
27) What are Hofstede's dimensions of national culture?
28) Executives with a particular mix of skills and experiences may be classified as
an executive type and paired with a specific corporate strategy. What are the
different executive types that might change with the development stage of the
company?
Executive type
• Dynamic industry expert –growth
• Analytical portfolio manager –diversification
• Cautions profit planner –stability
• Turnaround specialist –weak company/active market
• Professional liquidator –company can’t be saved
29) What are some of the approaches a company can take to identify and prepare
its people for important positions?
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33) What is executive succession? Discuss the hiring of insiders versus outsiders
Chapter 11
30) Distinguish between behavior and output controls. Provide examples of each
Output controls
Specify what is to be accomplished by focusing on the end result through the use
of objectives
Behavior controls
Specify how something is done through policies, rules, standard operating
procedures and orders from supervisors
Input controls (Extra)
Emphasize resources
31) List the five-step feedback model of the evaluation and control process
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32) What is the most commonly used measure of corporate performance (in terms
of profits)? Discuss the limitations of using this measure.
34) What is ERP? What are the three reasons why ERP could fail?
35) What is the balanced scorecard? What are the four areas to be addressed?
Balanced scorecard
Combines financial measures that tell the results of actions already taken with
operational measures on customer satisfaction, internal processes and the
corporation’s innovation and improvement activities—the drivers of future
financial performance
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6. Emphasize the reward of meeting or exceeding standards rather than punishment
for failing to meet standards.
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