MCQ unknowns

Question 1

Which of the following statements about the relationship between innovation and invention are true?

Answer 1

a) invention is often the result of an individuals effort, innovation typically involves business organisations

Question 2

The main factor that determines the relative effectiveness of patents in protecting an innovator is:

Answer 2

d) the characteristics of the innovation that is being protected

Question 3

Monsanto’s NutraSweet artificial sweetener, Pfizer’s Viagra, and Pilkington’s float glass process are innovations that are examples of:

Answer 3

b) strong regimes of appropriability because of the effectiveness of patent protection

Question 4

Cross functional product development teams, product champions, and incubators are organizational devices used:

Answer 4

b) to reconcile the conflicting requirements of operations and innovations

Question 5

The different stages of the industry life cycles are defined primarily on the basis of:

Answer 5

a) The rate of growth of industry sales

Question 6

Which of the following developments is not a typical feature of the transition from the “introductory” to the “growth” phase of the industry life cycle?

Answer 6

c) the shift of production from advanced to emerging countries

Question 7

A technical standard tends to emerge in an industry if:

Answer 7

d) network effects exist

Question 8

Which statement best describes the extent to which different industries conform to the same life cycle pattern?

Answer 8

a) The duration of the life cycle varies from industry to industry

Question 9

The field of “organizational ecology” studies:

Answer 9

b) changes in the population of firms in an industry

Question 10

Which of the following is not a source of organizational inertia?

Answer 10

d) The hierarchical structure of large firms

Question 11

When an industry is subject to technological change, the ability of new entrants to displace incumbent firms will be increased if:

Answer 11

a) the technological change represents an architectural innovation rather than a component innovation

Question 12

The approach that Hyundai Motor and Panasonic have taken to developing organizational capabilities involves:

Answer 12

d) A product sequencing approach in which each product phase is linked to the development of specific capabilities

Question 13

In 1990, C.K. Prahalad and Gary Hamel introduced the concept of “core competence.” Their argument was that:

Answer 13

c) strategy should be focused on both developing and exploiting’ distinctive capabilities

Question 14

To exploit its tangible assets more effectively requires that a firm:

Answer 14

b) economizes on underutilized assets and redeploys assets into more profitable uses.

Question 15

Intangible resources tend to be more valuable than tangible resources because:

Answer 15

c) the are more likely to provide a sustainable competitive advantage

Question 16

“Benchmarking” is:

Answer 16

c) a way to compare a firm’s resources and capabilities against those of the competitors

Question 17

The firm’s ability to appropriate the rents generated by its organizational capabilities:

Answer 17

d) depends on the extent to those capabilities are embedded in team based processes that are heavily dependant upon corporate systems.

Question 18

When a company has weaknesses relative to competitors among strategically important resources and capabilities, the appropriate strategic response is to:

Answer 18

c) outsource those activities where third parties can offer superior capabilities while positioning the business to reduce vulnerable to remaining weaknesses.

Question 19

The principal impact of digital technology on business during the next decade is likely to be:

Answer 19

d) external intelligence

Question 20

Most of the biggest mergers and acquisitions since 2000 have been horizontal—i.e. between companies in the same industry. This reflects the fact that:

Answer 20

c) horizontal mergers and acquisitions offer the greatest potential for value creation through cost reduction and moderating competition

Question 21

Studies that compare post-merger accounting profitability with the pre-merger accounting profitability of the companies involved show little consistency. This is because:
it to the companies’ performance prior to merging. The problem here is separating
the effects of the merger from the multitude of other factors that influence
companies’ performance over time. returns fails to provide conclusive evidence on the performance outcomes of mergers and acquisition is that:

Answer 21

d) neither a or b - we do not know why studies of the effects of mergers on firm performance have been s inconclusive

Question 22

In technology-based industries, the most common reason for established companies to acquire small, start-up firms is in order to:

Answer 22

b) acquire capabilities in emerging areas of technology

Question 23

A major motive for the acquisition of public companies by private equity companies is:

Answer 23

b) to create value through increasing financial leverage

Question 24

The continuing popularity of mergers and acquisitions among companies despite the lack of empirical evidence of their benefits suggests:

Answer 24

c) both a and b

Question 25

Strategic alliances frequently play an important role in a firm’s internationalization strategy because:

Answer 25

b) internationalizing firms often lack the local knowledge and access to distribution channels that a local partner can provide

Question 26

The fundamental issue that Implementing corporate strategy addresses is:

Answer 26

a) how the multibusiness company can best create value for its different businesses

Question 27

Besides managing the overall corporate portfolio of businesses, corporate management can add value to individual businesses by:

Answer 27

a) managing the individual businesses, exploiting linkages between them, and managing change

Question 28

A major limitation of the BCG matrix is:

Answer 28

c) neither market growth nor relative market share are reliable indicators of a business future profitability

Question 29

what are the two dimensions of the Ashridge portfolio?

Answer 29

c) the parents potential to create value and to destroy value in a business

Question 30

Although sharing resources among the different businesses within the multibusiness corporation can offer substantial cost economies, these savings are often offset by:

Answer 30

c) The costs of coordinating such resource sharing

Question 31

The general trend of the past four decades has been for companies to divest their “noncore” businesses. Exceptions to this trend include:

Answer 31

c) both a and b

Question 32

When a company in industry A acquires a company in industry B, Porter’s “better-off” test is satisfied when:

Answer 32

c) the competitive advantage of either or both businesses is increased

Question 33

Demand-side economies of scope are economies that accrue to customers from buying bundles of different products. Examples of economies of scope include:

Answer 33

c) both a and b

Question 34

Several decades of empirical evidence indicates that the relationship between diversification and performance:

Answer 34

c) is neither consistent or systematic

Question 35

Despite the heterogeneity of the goods and services supplied by LVMH (e.g. leather bags and shoes, wine and spirits, fashion clothing, jewelry and watches), we can consider LVMH’s diversification to be into strategically-related industries because:

Answer 35

d) the different businesses all require global marketing to high income consumers, hence draw upon similar management capabilities.

Question 36

Global industries are those where:

Answer 36

d) both trade and direct investment are high

Question 37

With internationalization, the threat of new entry into domestic industries are increases because:

Answer 37

c) barriers to entry that would deter domestic firms may be easily overcome by large firms from other countries

Question 38

The value chain for a product will tend to be dispersed across different countries when:

Answer 38

a) different stages of the value chain require different types of resources and capabilities

Question 39

The “centralized hub” strategy that Japanese multinationals pursued during the 1970s and 1980s is likely to be most successful in industries with:

Answer 39

b) large economies of scale and limited need for differentiation

Question 40

The Dutch-based electrical and consumer electronics multinational, Philips, has transferred the headquarters for several of its global business away from the Netherlands. In terms of Bartlett and Ghoshal’s typology of multinational strategies, this represents a transition from:

Answer 40

c) decentralised federation to a transnational

Question 41

The Dutch-based electrical and consumer electronics multinational, Philips, has transferred the headquarters for several of its global business away from the Netherlands. In terms of Bartlett and Ghoshal’s typology of multinational strategies, this represents a transition from:

Answer 41

c) decentralised federation to a transnational

Question 42

The costs of national differentiation can be low if:

Answer 42

d) a common basic design and common components are used

Question 43

McKinsey & Company’s finding that found that successful MNCs are underperforming successful “national
Champions” is evidence of:

Answer 43

a) The benefits of exploiting the benefits of multinationality being outweighed by the cost imposed by the complexity

Question 44

The growth in the scope of business enterprises for most of the 19th and 20th centuries can be attributed to a drop in administrative costs of firms relative to the transaction costs of market. This resulted from:

Answer 44

d) innovation in information and communications technology and in management

Question 45

Which of the following factors is not conducive to vertical integration between two adjacent stages of production?

Answer 45

d)

Question 46

Which of the following factors has not contributed to the trend towards outsourcing in recent decades:

Answer 46

b) increasing emphasis on cost efficiency

Question 47

19. McDonalds–like most other fast-food chains–prefers to franchise rather than directly operate its retail outlets. An advantage of franchising over vertical integration is:

Answer 47

b) franchising subjects the operators of retail outlets to “high-powered” incentives

Question 48

The main lesson to be drawn from the delays to the launch of Boeing’s 787 Dreamliner is that, when developing complex products that embody diverse new technologies:

Answer 48

c) the principal firm must possess well developed integration capabilities