chapter 3 practice questions

Question 1

Mercedes-Benz aggressively pushed for product placement in Hollywood movies. This is an
example of which value chain primary or support activity?

A) support activity: general administration
B) primary activity: service
C) support activity: procurement
D) primary activity: marketing and sales

Answer 1

D) primary activity: marketing and sales

Question 2

________ is/are associated with collecting, storing, and distributing the product or service to buyers. They consist of warehousing, material handling, delivery operation, order processing,
and scheduling.

A) Services
B) Inbound logistics
C) Outbound logistics
D) Operation

Answer 2

C) Outbound logistics

Question 3

Which of the following is a support activity?

A) inbound logistics
B) customer service
C) technology development
D) operations

Answer 3

C) technology development

Question 4

Human resource management consists of activities involved in the recruiting, hiring, training,
development, and compensation of all types of personnel. It supports

A) only individual primary activities.
B) mostly support activities but does have some impact on primary activities.
C) only individual support activities.
D) both individual primary and support activities and the entire value chain

Answer 4

D) both individual primary and support activities and the entire value chain

Question 5

According to value-chain analysis, which of the following would be considered part of the
general administration in a firm?

A) information systems
B) technology development
C) human resource management
D) procurement

Answer 5

A) information systems

Question 6

Coca-Cola has developed data analytic technologies to produce orange juice that meets the taste demands of a global customer base. This is an example of using which value chain support activity?

A) marketing and sales
B) technology development
C) human resource management
D) procurement

Answer 6

B) technology development

Question 7

Facebook, Intuit, AB InBev, and others empower their recruiters to make offers on the spot
when they interview college students, without knowing what specific position they will fill.
These firms search for candidates with attributes such as being a self-starter and a problem- solver and make quick offers to preempt the market. This is an example of which value chain support activity?

A) operations
B) technology development
C) human resource management
D) procurement

Answer 7

C) human resource management

Question 8

The Germany truck and trailer manufacturer, Schmitz Cargobull, mainly serves customers who
are operators of truck or trailer fleets. What sets the company apart is its expertise in telematics
(the integrated application of telecommunications data) to monitor the current state of any
Schmitz Cargobull-produced trailer. What type of a value-chain support activity is this?

A) service
B) technology development
C) human resource management
D) general administration

Answer 8

D) general administration

Question 9

A marketing department that promises delivery faster than the ability of the production
department to produce is an example of a lack of understanding of the

A) interrelationships among value-creating activities within a firm.
B) organizational culture and leadership.
C) need to maintain the reputation of the company.
D) synergy of the business units

Answer 9

A) interrelationships among value-creating activities within a firm.

Question 10

Campbell Soup uses electronic networks to improve the efficiency of outbound logistics. These
networks also helped Campbell Soup manage the ordering of raw materials more efficiently,
improve its production scheduling, and help its customers better manage their inbound logistics
operations. This is an example of

A) interrelationships among activities within the firm.
B) relationships among activities within the firm and with other stakeholders that are part of
the expanded value chain of the firm.
C) relationships among activities outside of the firm.
D) interrelationships among activities outside of the firm

Answer 10

B) relationships among activities within the firm and with other stakeholders that are part of
the expanded value chain of the firm.

Question 11

In terms of value-chain analysis, a telephone operating company would find that negotiating and maintaining ongoing relations with regulatory bodies are important activities for achieving

A) inbound logistics.
B) customer awareness.
C) competitive advantage.
D) better employees

Answer 11

C) competitive advantage.

Question 12

German truck and trailer manufacturer, Schmitz Cargobull, mainly serves customers that are
operators of truck or trailer fleets. What sets the company apart is its expertise in telematics
(the integrated application of telecommunications data) to monitor the current state of any
Schmitz Cargobull-produced trailer. This is an example of using ________ to enhance customer
value and increase ________ position.

A) sales; competitive
B) operations; marketing
C) information technology; competitive
D) human resources; marketing

Answer 12

C) information technology; competitive

Question 13

Regarding the value-chain concept, the most important interrelationship is between the
organization and its

A) board of directors.
B) employees.
C) customers.
D) management.

Answer 13

C) customers.

Question 14

For a firm such as Nordstrom that has no manufacturing operations, value is added by
developing expertise in the procurement of finished goods and by displaying them in its stores
in a way that enhances sales. In the value chain, procurement activities become the primary
activity. This begins with ________ and ends with ________.

A) purchasing goods; operating stores
B) managing and distributing inventory; marketing and selling
C) partnering with vendors; marketing and selling
D) partnering with vendors; operating stores

Answer 14

C) partnering with vendors; marketing and selling

Question 15

The resource-based view (RBV) of the firm combines the following two perspectives:

A) the primary and support activities of the firm.
B) the interrelationships among the primary activities of the firm and corporate management.
C) the internal analysis of the firm and the external analysis of the industry and competitive
environment.
D) the industry and the competitive environment.

Answer 15

C) the internal analysis of the firm and the external analysis of the industry and competitive
environment.

Question 16

The three key types of resources that are central to the resource-based view of the firm are

A) tangible resources, intangible resources, and organizational structure.
B) culture, tangible resources, intangible resources.
C) tangible resources, intangible resources, and organizational capabilities.
D) tangible resources, intangible resources, and top management.

Answer 16

C) tangible resources, intangible resources, and organizational capabilities.

Question 17

In the resource-based view of the firm, examples of tangible resources include

A) financial resources, human resources, and firm competencies.
B) financial resources, physical resources, and technological resources.
C) financial resources, physical resources, and the capacity to combine intangible resources.
D) outstanding customer service, innovativeness of products, and reputation

Answer 17

B) financial resources, physical resources, and technological resources.

Question 18

_______ are typically embedded in unique routines and practices that have evolved and
accumulated over time such as effective work teams.

A) Tangible resources
B) Intangible resources
C) Reputational resources
D) Organizational capabilities

Answer 18

B) Intangible resources

Question 19

_______ are the competencies or skills that a firm employs to transform inputs into outputs.

A) Tangible resources
B) Reputational resources
C) Organizational capabilities
D) Intangible resource

Answer 19

C) Organizational capabilities

Question 20

To be considered strategic resources that contribute competitive advantage, they must have several characteristics. Which of the following is not one of these?

A) rare
B) valuable
C) inexpensive to imitate
D) costly to substitute

Answer 20

C) inexpensive to imitate

Question 21

Intangible resources are typically embedded in ________ routines and practices that have
evolved and accumulated over time.

A) common
B) standard
C) unique
D) obvioud

Answer 21

C) unique

Question 22

Groupon offers online coupons for bargains at local shops and restaurants. Which of the
following is a reason that rivals are limiting its growth?

A) Its core capability is not easily imitated.
B) Its core capability is easily imitated.
C) Not many firms possess the same capability.
D) There are few equivalent capabilities

Answer 22

B) Its core capability is easily imitated.

Question 23

A crash R&D program by one firm cannot replicate a successful technology developed by
another firm, when research findings cumulate. This is an example of

A) social complexity.
B) physical uniqueness.
C) path dependency.
D) causal ambiguity.

Answer 23

C) path dependency.

Question 24

Gerber Products Co. brands their baby food which gives them a resource that is potentially
intimitable because re-creating brand loyalty is likely to be a time-consuming process
competitors would find difficult to expedite. This is an example of using ________ conditions to build protection in the baby food market.

A) social complex
B) physical uniqueness
C) path dependent
D) causal ambiguity

Answer 24

C) path dependent

Question 25

Ashley Furniture controls all steps of its distribution systems, developing specific competencies
that are difficult to match. They are using ________ to build sustainable advantage.

A) path dependency
B) social complexity
C) physical uniqueness
D) tangible resources

Answer 25

A) path dependency

Question 26

A wide variety of firm resources that are costly to imitate due to the social engineering that is
required being beyond the capability of competitors include interpersonal relations among managers in the firm, its culture, and its reputation with its suppliers and customers. Such competitive advantages are based upon

A) path dependency.
B) social complexity.
C) physical uniqueness.
D) tangible resources

Answer 26

B) social complexity.

Question 27

All of the following are examples of socially complex organizational phenomena except

A) the culture of a firm.
B) complex physical technology.
C) interpersonal relations among managers of a firm.
D) leadership and trust

Answer 27

B) complex physical technology.

Question 28

Employees will be able to obtain a proportionately high level of profits they generate (relative to
the firm) if

A) suppliers are loyal to the firm.
B) their expertise is firm-specific.
C) the cost to the firm of replacing them is high.
D) the firm’s resources are path dependent

Answer 28

C) the cost to the firm of replacing them is high.

Question 29

Raymond Ozzie, the software designer who was critical in the development of Lotus Notes, was
able to dictate the terms under which IBM acquired Lotus. This illustrates that he had ________
bargaining power based on the ________ cost required by the firm to replace him.

A) low; low
B) low; high
C) high; low
D) high; high

Answer 29

D) high; high