Strategic Management (B&M) - RUG - Practice exam (2)


Question 1

Which characteristics describe monopolistic or imperfect competition?

  1. Some to vary few firms, high differentiation of products

  2. Some to vary few firms, low differentiation of products

  3. Many firms, no differentiation of products

  4. Many firms, some differentiation of products

Question 2

According to the lectures, which of the following best describes the relationship between Porter’s Five Forces analysis and the PEST analysis?

  1. A PEST analysis focuses on process issues while a Five Forces analysis focuses on content issues.

  2. A Five Forces analysis describes the industry (i.e., the micro-economic environment) that the firm is in, while a PEST describes the broader (macro-economic) environment that the industry is in

  3. A Five Forces analysis describes the external environment, while PEST analysis describes the internal environment of the firm

  4. The findings from a Five Forces analysis provide the input (the data) for a PEST analysis

Question 3

According to the lecture on organizational learning, which term refers to key individuals or interest groups using their power to prevent change and maintain the status quo?

  1. Co-evolutionism

  2. Institutionalism

  3. Neo-institutionalism

  4. Isomorphism

Question 4

What strategic options in decision-making are available to organizations that have a low knowledge of new markets, but have high capabilities?

  1. No options

  2. Trade options

  3. Bounded options

  4. Full set of options

Question 5

Imagine an SBU within a corporate portfolio that has the second largest market share in a mature market. According to the lecture on the BCG-matrix, this SBU would be a:

  1. Dog

  2. Questionmark

  3. Cash cow

  4. Star

Question 6

Henderson and Clark (1990) review two kinds of dynamic processes in modular systems: modular innovation and architectural innovation. Which statement(s) is (are) true?

I Modular innovation retains the architecture of the network, including its joints, but modifies the modules. The changes occur in innovations and improvements of the modular components.

II In architectural innovation, the modules are largely unchanged, but the architecture that connects them (the jointing system) is changed. The speed of innovation can be fast, as a key part of the system, the modular structure, is retained. New joints between these modules are installed.

  1. Only statement I is true

  2. Only statement II is true

  3. Both statements are true

  4. Both statements are false

Question 7

Which statement(s) is (are) true with regard to decision-making?

I Planning facilitates decision makers in analyzing and codifying what appear initially as complex problems. Planning processes help decision makers identify key performance indicators by which progress of the decision can be monitored and judged.

II The chaos perspective on decision-making does not seek to simplify and reduce uncertainty. It avoids over-simplification of the process and allows decision makers to appreciate and expect the role of politics and influence to be a natural part of decision-making process.

  1. Only statement I is true

  2. Only statement II is true

  3. Both statements are true

  4. Both statements are false

Question 8

According to the lecture, the chairperson is a two-tier board is in principle

  1. Not the CEO

  2. A non-executive

  3. A outsider

  4. All of the above

Question 9

What is meant by customer surplus?

  1. When the product is more valuable to the consumer than the price he/she pays for it

  2. The amount of new customers the firm attracts by introducing a new product

  3. The excess demand by customers caused by applying a differentiation strategy

  4. There are many substitution possibilities available to the customers

Question 10

Which is NOT a limitation of risk analysis techniques?

  1. Models can be over-reliant on past relations between variables which may not hold true for the current or future situations

  2. Models may exclude important variables and parameters

  3. They can easily be interpreted as being falsely precise (since they are numerically complex)

  4. They use soft factors such as cultural and social differences, which are very rich but might be irrelevant to success or failure.

Question 11

Which of the following refers to a set of firm-specific skills and processes directed towards the attainment of competitive advantage?

  1. Core competences

  2. Differentiation strategy

  3. Business model

  4. Competitive scope

Question 12

Which of the following is NOT one of the types of strategic alliances found amongst non-competing firms?

  1. Vertical partnership

  2. Co-opetition

  3. Joint ventures

  4. Cross-industry agreements

Question 13

What are the underlying assumptions of game theories?

  1. Players are assumed to have perfect knowledge of the rules (shared equally between them)

  2. Players are always want to maximize their returns

  3. Players are assumed to be rational in their choices and behaviors

  4. All of the above

Question 14

What is NOT one of the criticisms by Doyle (2000) against the use of accounting-based performance metrics?

  1. Managers and analysts use accounting earnings and accounting profits as a benchmark only because financial accounts are readily available and the measures, themselves, are easy to calculate

  2. Accounting profits exclude investments, ignore the time value of money and produce a focus on short-term results

  3. Managers may uncritically focus on accounting numbers without recognizing the judgments, conventions and realities involved in the construction of those numbers

  4. The measurement of accounting earnings can be arbitrary, subjective and easily manipulated by management

Question 15

Which of the following statements illustrates “oppo rtunity costs”?

  1. The essence of strategy is taking the opportunity to perform activities differently from rivals

  2. Strategic positions provide windows of opportunities

  3. Strategic choice should focus on return on investment by maximizing opportunity costs

  4. A dollar invested ‘here’ is a dollar not invested ‘ there’,

Question 16

What can be reasons why relationships between subordinate managers and corporate (senior) managers are often mis-aligned?

  1. Subordinate managers want to preserve autonomy and not be wholly controlled by senior managers

  2. Subordinate managers may be looking to be promoted to senior levels

  3. Subordinate managers act in ways which enhance their prospects of promotion rather than effective strategy execution

  4. All of the above reasons

Question 17

In the 1870s the QWERTY configuration was selected by the creators of the TypeWriter brand in order to slow down typists so as to reduce jamming of the keys. The Dvorak layout patented in 1932 is a more efficient layout and allows faster typing. The fact that the slower QWERTY system still dominates the market can be explained in terms of:

  1. Opportunity costs

  2. Switching costs

  3. Sunk costs

  4. Moore’s law

Question 18

Which statement(s) is (are) true with regard to competition?

  1. Perfectly competitive markets are characterized by free entry, perfect information and commodity-like products. The consequences of such “ perfect” competition is that price is the only competitive variable, that firms are essentially identical and, therefore, that there are no super-normal profits to be had.

  2. Imperfections in markets provide the possibility for rents (super-normal profits) and rent-seeking activities. Imperfections could be, for example, differences in information about production possibilities, or consumer ignorance about product benefits.

  1. Only statement I is true

  2. Only statement II is true

  3. Both statements are true

  4. Both statements are false

Question 19

Senge (1990) emphasizes the importance of what he calls “adaptive learning” and “generative learning”. Which of the following statements regard ing organizational learning is true?

  1. Adaptive learning is similar to single-loop learning

  2. Generative learning is similar to single-loop learning

  3. In double-loop learning, individuals, groups and organizations adjust their behavior according to fixed organizational goals, norms and assumptions

  4. In single-loop learning, organizational goals, norms and assumptions as well as behavior are all open to change

Question 20

Which statement(s) is (are) true with regard to pricing, price elasticity, costs and profits?

  1. With a cost advantage and high price elasticity, it pays to under-price competitors to gain share

  2. With a differentiation advantage and high price elasticity, it pays to maintain price parity (same price as rivals) and rely on the differentiation advantage to increase market share

  3. With a cost advantage and low price elasticity, a margin strategy involves maintaining price parity with rivals and relying on fatter profits margins to generate superior performance

  4. All of the above mentioned statements are true

Question 21

Which of the following is a motive for acquisition?

  1. Getting rid of competitors from an over-saturated industry

  2. Rapidly acquiring new skills

  3. Gaining access to new markets

  4. All of the above

Question 22

Which types of organizations have relatively little need for ling-term scenario analysis?

  1. Those operating in hypercompetitive environments classified by high levels of ambiguity

  2. Those that maintain high levels of flexibility and are able to react quickly to any changes

  3. Those operating in competitive environments classified by high levels of uncertainty

  4. Those unable to react quickly and effectively to changing events as they occur

Question 23

According to the lecture on strategic groups, what is true about mobility barriers?

  1. Barriers don’t make a position profitable, but they do allow existing profits to be sustained

  2. Barriers trigger rapid growth in marketshare

  3. Barriers are what make niches profitable and sustain those profits over time

  4. None of the above

Question 24

According to the lecture material on decision-making processes, which of the following is one of the characteristics of wicked problems?

  1. A low level of interconnectedness

  2. Frequent repetition

  3. A high level of uncertainty

  4. A low level of complexity

Question 25

Which of the following statements is (are) true?

  1. (I) Generative learning increases familiarity with existing strategy and routines, improves short-term effectiveness and the capacity to make decisions and act.
  2. (II) Adaptive learning is associated with barriers to conceptualizing new ways of evaluating strategies, becoming rigid and resistant to change, may result in performance downturn in the long term.
  1. Only statement I is true

  2. Only statement II is true

  3. Both statements are true

  4. Both statements are false

Question 26

According to the lecture, which of the following is NOT advisable for businesses in the new economy?

  1. Emphasize the protection of intellectual property rights

  2. Use inverse pricing (the best product is sold at the lowest price)

  3. Use of open standards

  4. Manage expectations

Question 27

Which statement(s) is (are) true?

  1. According to McGee et al. strategic planning is the process by which the firm organizes its resources and actions in relation to an external environment in order to achieve its goals and objectives. This is conducted in a very hierarchical and formal manner.

  2. According to Mintzberg and Waters (1985), some strategies may be planned, at least in their first stages, but many more just simply emerge in an organization without being consciously intended or being deliberate acts

  3. Logical incrementalism (Quinn, 1980) combines rational-resource allocation thinking with practical learning by doing; longer-term plans and targets with evolutionary, learning-based patterns of movement on the way

  4. All of the above statements are true

Question 28

When applying Porter’s 5 forces model for a given firm, which of the forces would be most directly influenced if that firm is threatened to engage in vertical integration?

  1. Buyer power

  2. Pressure from substitutes

  3. Threat of new entrants

  4. Intensity of rivalry

Question 29

Which statement is true according to the Chesbrough & Rosenbloom?

  1. A cost leadership strategy would be expected to increase variable costs but to decrease both fixed costs and fixed assets associated with economies of scale.
  2. A differentiation strategy would be expected to raise costs. Costs would go up because of the variable costs (such as quality and service levels) and fixed costs (such as advertising and R&D)
  1. Only statement I is true

  2. Only statement II is true

  3. Both statements are true

  4. Both statements are false

Question 30

Which organization type, designed by Michaud and Thoenig, is characterized by its calm external contexts, bureaucratic character, short-term perspective and individuals within who have no incentive to change?

  1. Mercenary organization

  2. Fragmented organization

  3. Organic organization

  4. Self-sufficient organization

Question 31

The principal-agent model in which principals are the shareholders and the agents are corporate managers:

  1. Assumes that the goals of the principal and the goals of the agent will conflict

  2. Assumes that the sole purpose of the firm is to maximize shareholder value.

  3. Assumes that social relations in economic interaction can be reduces to sets of contracts between principals and agents

  4. All of the above are true

Question 32

Regarding the inimitability of resources, path dependency refers to:

  1. Not really knowing what (combinations of) assets are responsible for the existing success

  2. Cumulative learning and experience over time, which is difficult to replicate over short periods.

  3. The socially complex system that gives rise to the competitive advantage

  4. All of the above

Question 33

What perspective is included in the strategy map developed by Kaplan and Norton (2001)?

  1. Social-cultural perspective

  2. Political perspective

  3. Customer perspective

  4. Ecological perspective

Question 34

BMW forcing an alliance with Rolls Royce in aircraft engines in order to enter a new market is an example of:

  1. Cross-industry agreement

  2. Vertical partnership

  3. Complementary alliance

  4. Pre-competitive alliance

Question 35

Which of the following is true according to prospect theory?

  1. The 50% chance of losing $40,000 is preferred over the guaranteed loss of $20,000

  2. The disappointment at losing $20,000 is greater than the pleasure of gaining the same amount

  3. The guaranteed gain of $20,000 is preferred over the 50% chance of gaining $40,000

  4. All of the above

Question 36

Which of the following is a support activity in Porter’s value chain model:

  1. Inbound logistics

  2. Human resource management

  3. Operations

  4. Service

Question 37

According to the lecture covering network-level strategy, a strategic network can be described as:

  1. A cross between a clan and a hierarchy

  2. A hierarchy with a non-zero-sum game

  3. A market with a non-zero-sum game

  4. A market with a zero-sum game

Question 38

Which term addresses what strategic decisions are about and what the intention is?

  1. Strategic context

  2. Strategic content

  3. Strategic product

  4. Strategic process

Question 39

According to the lecture on Mintzberg’s view on decision-making, which approach is most appropriate when many elements have to be combined into creative solutions, commitment on those solutions is key, and communication across boundaries is essential?

  1. Doing first

  2. Being first

  3. Seeing first

  4. Thinking first

Question 40

According to the lecture on corporate strategy, which integration mechanism is based on all the SBUs having similar resources, activities and product features?

  1. Centralization

  2. Coordination

  3. Standardization

  4. Concentration


1 d

11 a

21 d

31 d

2 b

12 b

22 b

32 b

3 b

13 d

23 a

33 c

4 c

14 a

24 c

34 a

5 a

15 d

25 b

35 d

6 c

16 d

26 a

36 b

7 c

17 b

27 d

37 c

8 d

18 c

28 a

38 b

9 a

19 a

29 b

39 c

10 d

20 d

30 b

40 c

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