Review for Exam 1 Flashcards
Management innovations such as total quality, benchmarking, and business process reengineering cannot lead to sustainable competitive advantage because:
D. every company is trying to implement them and hence it does not make a company different from others.
According to Henry Mintzberg, the realized strategies of a firm:
A. is a combination of deliberate and emergent strategies
Members of boards of directors are
elected by the shareholders as their representatives
Examples of ___ include: To be the happiest place on earth (Disneyland), and Restoring patients to full life (Medtronic).
A. vision statements
One of the most famous examples of a vision is that of Disneyland (To be the happiest place on earth). Another example is that of Medtronic (Restoring patients to full life).
Successful organizations are effective in motivating people. Employees work best when:
C. they are striving toward specific goals
Gathering competitive intelligence
is a good business practice
In the general environment, many relationships exist among the various elements. General environmental trends can have positive and negative impacts on various industries. For example, the aging population might have a ___ impact on the health care industry and a ____ impact on the baby product industry. These are called ___ impacts.
B. positive; negative; technological/demographic
Which of the following statements about strategic groups is FALSE?
B. Strategic groupings are of little help to a firm in assessing mobility barriers that protect a group from attacks by other groups.
As the competitive environment changes, strategic management must focus on different aspects of the organization. Recently, strategic management has moved from focusing on tangible resources to
C. intangible resources
In the knowledge economy, if a large portion of company value is in intellectual and human assets, the difference between the market value and book value of the company should ___ a company with mostly physical and financial assets.
B. be larger than
In firms where knowledge and the management of knowledge workers are relatively important contributors to developing products and services, and physical resources are less critical, the ratio of market-to-book value tends to be much higher.
Today, the loyalty of a knowledge worker to his or her employing firm has ___ compared to his or her loyalty to his or her profession and colleagues.
C. decreased
The rise to prominence of knowledge workers as a vital source of competitive advantage is changing the balance of power in organizations today. Knowledge workers place professional development and personal enrichment (financial and otherwise) above company loyalty.
Managing a knowledge intensive workforce is very challenging. The best way for a firm to manage its workforce is to
C. balance efforts in attraction, selection, and retention of top talent.
Many companies use referrals by current employees as a source for new hiring and even monetarily reward them because
D. current employees are careful in their recommendations because of their credibility and also because it is less expensive than the fees paid to headhunters.
GE Medical Systems offers a monetary reward for referrals, but it is peanuts compared to the fees that it typically pays to headhunters for each person hired. When someone refers a former colleague or friend for a job, his or her credibility is on the line. Thus, employees will be careful in recommending people for employment, unless they are reasonably confident that these people are good candidates.
Maintaining a competitive workforce is very challenging in the current economy. The role of evaluating human capital, in recent years, has
D. increased
In the current environment, collaboration and interdependence are vital to organizational success. Individuals must share their knowledge and work constructively to achieve collective, not just individual, goals. Traditional systems evaluate performance from a single perspective (i.e., top down) and generally do not address the softer dimensions of communications and social skills, values, beliefs, and attitudes.
The least effective way to retain human capital is to
C. requiring employees to sign agreements that prevent them from working for competitors in the future.
Many companies use referrals by current employees as a source for new hiring and even monetarily reward
them because __________________.
D. current employees are careful in their recommendations and it is less expensive than the fees paid to headhunters
GE Medical Systems offers a monetary reward for referrals, but it is peanuts compared to the fees that it typically pays to headhunters for each person hired. When someone refers a former colleague or friend for a job, his or her credibility is on the line. Thus, employees will be careful in recommending people for employment, unless they are reasonably confident that these people are good candidates.
Among the downsides of social capital is/are:
D. social capital may both breed “groupthink” and the socialization processes to create it (orientation, training, etc.) can be expensive
There are several downsides to social capital. Some firms have been adversely affected by very high levels of social capital because it may breed groupthink, a tendency not to question shared beliefs. Additionally, the socialization processes (orientation, training, etc.) can be expensive in terms of both financial resources and managerial commitment.
the creation of knowledge assets is typically characterized by…
D. hight upfront cots and low variable costs
One of the challenges of knowledge-intensive organizations is to capture and codify the knowledge and experience that resides in the heads of its employees. Once a knowledge asset (e.g., a software code or processes) is developed and paid for, it can be reused many times at very low cost, assuming that it doesn’t have to be substantially modified each time.
Generally, employees are most likely to stay with an organization if
B. the organization’s mission and values align with employee’s mission and values.
People who identify with and are more committed to the core mission and values of the organization are less likely to stray or bolt to the competition. Paying people more is seldom the most important factor in attracting and retaining human capital.
Human capital and social capital are vital for superior firm performance. If a firm has strong human capital, the firm may exploit this by building social capital. This can be accomplished
C. encouraging the sharing of ideas between employees in the firm
In the knowledge economy, the development of social capital (the friendships and working relationships among talented individuals) gains importance, because it helps tie knowledge workers to a given firm. The interaction, sharing, and collaboration will create a situation in which a worker will develop firm-specific ties and be less likely to bolt for a higher salary offer.
Social capital has downsides. Which of the following is a downside?
A. High social capital may breed “groupthink,” ie a tendency not to question shared beliefs.
Which of the following reasons explains why painter Vincent van Gogh died penniless, while painter Pablo Picasso left a $740 million estate upon this death?
A. Picasso had a wider range of social connections and bridging relationships.
Mary Stinson was required to take over a project after the entire team left the company. She was able to reconstruct what the team had accomplished through reading e-mails exchanged by the members of the team. This is an example of
A. using explicit knowledge.
Explicit (or codified) knowledge, on the other hand, is knowledge that can be documented, widely distributed, and easily replicated. Here, Mary was able to use knowledge assets created by previous employees to complete the work.
With experience, unit costs of production decline as ___ increases in most industries.
B. output
With experience, unit costs of production decline as output increases in most industries. The experience curve, developed by the Boston Consulting Group in 1968, is a way of looking at efficiency gains that come with experience. For a range of products, as cumulative experience doubles, costs and labor hours needed to produce a unit of product decline by 10 to 30 percent.
Research has consistently shown that firms that achieve both cost leadership and differentiation advantages tend to perform
C. higher than firms that achieve either a cost or a differentiation advantage.
Research supports the notion that firms that identify with one or more of the forms of competitive advantage outperform those that do not. There has been a rich history of strategic management research addressing this topic. One study found that businesses combining multiple forms of competitive advantage (differentiation and overall cost leadership) outperformed businesses that used only a single form.
Which of the following is FALSE regarding how a differentiation strategy can help a firm to improve its competitive position relative to the Porter five forces model?
C. Supplier power is increased because suppliers will be able to charge higher prices for their inputs
Supplier power is also decreased, because there is a certain amount of prestige associated with being the supplier to a producer of highly differentiated products and services.
A differentiation strategy enables a business to address the five competitive forces by
A. lessening competitive rivalry by distinguishing itself.
Differentiation provides protection against rivalry since brand loyalty lowers customer sensitivity to price and raises customer switching costs.
Which statement regarding competitive advantages is true?
B. If several competitors pursue similar differentiation tactics, they may all be perceived as equal in the mind of the consumer.
Potential pitfalls of a differentiation strategy include the idea that perceptions of differentiation may vary between buyers and sellers. The issue here is that beauty is in the eye of the beholder. Companies must realize that although they may perceive their products and services as differentiated, their customers may view them as commodities.
