1
Summer Corp., a retailer of consumer electronics, has been experiencing high profits because an increasing percentage of the customers have sufficient disposable income to afford its products. Similar companies have also experienced a boom in customer demand. Which of the following macroeconomic forces is Summer Corp. experiencing?
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Inflation
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Currency exchange rate
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Economic growth
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Interest rate
2
The management of Neptune Inc. creates a definite plan of action that will surely create profits for the company. It allocates and sectionalizes its machinery and personnel. The main office is moved to a prime location that helps attract customers and facilitates competitive development. This plan of action helps Neptune Inc. retain its competitive advantage and has also grow as a company. Which of the following terms does this scenario best illustrate?
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Functional strategy
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Business unit strategy
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Strategic tools
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Strategic management process
3
Blue Corp., a car manufacturing company, reaches its five-year goal of becoming market leader in the domestic market. Upon reaching saturation in the local market, it decides to expand its market globally in order to increase its profits. Which of the following is likely to be the primary reason for Blue to enter the global market?
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Longer product life
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Product differentiation
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Sales growth
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Lower-cost resources
4
A survey is conducted among the customers of a supermarket chain. This survey reveals that the majority of these customers prefer to buy Lia, a brand of soap, because they feel that the company Lia Products Inc. has created a product that is of worth to the customers. The reason for the customers’ preference is because the company constantly delivers what it promises. In this scenario, the factor that has made the brand of soap named Lia popular among these customers can be best categorized as _____.
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inimitability
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rarity
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value
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prestige
5
MorrisWhitaker Inc., a metallurgical firm, wants to create a new production plan. This step involves formalizing and institutionalizing new behaviors, methods, processes, or routines. This is an example of the _____ phase of organizational change.
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monitoring
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refreezing
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changing
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unfreezing
6
Noel, the CEO of a firm operating in the electronics industry, wants to change the environmental trends, store keeping facilities, and distribution strategy by creating a new plan for the production plant immediately. This need for change can be achieved by _____.
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refreezing
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building a guiding coalition
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gernerating urgency
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creating a response profile
7
An organization studies the strategies of its competitors closely. At the current stage, it studies factors such as geographic location, characteristics of business model, services provided, and time management. At this stage, the organization is identifying the competitor’s _____.
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organizational structure
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resources and capabilities
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goals and achievements
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objectives
8
Which of the following statements is true of corporate culture?
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It consists of behavioral assumptions that are considered inappropriate for organizational members.
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Put simply, culture is just how things are done in any organization.
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An organization’s culture, by itself, can be regarded as good.
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Culture proves to be very weak because it cannot inform action without the need for supervision.
9
Which of the following statements is true about strategic alliances?
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Strategic alliances usually lead to one of the firms losing their relational advantage.
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In strategic alliances, companies may choose to cooperate at any stage along the value chain.
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In strategic alliances, the power to make decisions is always evenly distributed amidst the firms.
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Strategic alliances exclude functions that are bought through bidding.
10
Ruth works for an electronics manufacturing company, Zeeway Inc., whose employees volunteer over 1 million hours per year on initiatives that include environmental conservation, economic empowerment, and literacy programs. Which of the following best represents Zeeway’s initiative?
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Incremental innovation
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Corporate social responsibility
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Competition response strategy
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Strategic alliance
11
All assets, capabilities, organizational processes, firm attributes, information, knowledge, and so on,
controlled by a firm that enable the firm to conceive of and implement strategies that improve its efficiency and effectiveness most accurately defines the term _____.
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capabilities
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resources
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priorities
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functions
12
Which of the following statements is true about strategy?
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It is the ability of an individual to perform tasks.
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It represents the most important S in the 7 S model.
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It refers to the priorities, values, and virtues that members of an organization see as important.
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It includes recruitment, hiring, training, promotion, and compensation.
13
TrueBiz Corp. follows a system wherein all the activities of the company are directed toward converting parts of a product into an entire finished good. These activities are done in tandem so that a perfected product can be created which can be sold to a prospective customer. This is an example of a _____.
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product line
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supplier chain
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value chain
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pricing chain
14
The management at WonderPlanners Inc. wants to improve their production and operating capabilities by adopting a leaner process. As such, the employees of WonderPlanners are asked to eliminate the excess use of efforts and materials. WonderPlanners Inc. finally manages to achieve a competitive advantage after its employees follow these new practices repeatedly over time. From the information given in this scenario, we can infer that WonderPlanners Inc. has developed _____.
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dynamic capabilities
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service inimitability
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network externalities
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competitive parity
15
Rest & Sleep Inc. is a mattress manufacturing firm. By manufacturing related products such as bed covers, comforters and quilts, and pillows, it has gained significant competitive advantage as it has managed to create profits in all these markets as well. Rest & Sleep creates a challenge for the other companies in the market by providing unique value through its customer services and warranties. Which of the following terms best describes what Rest & Sleep Inc. is practicing?
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Unrelated diversification
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Corporate strategy
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Business unit strategy
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Market penetration
16
CharmingBells Inc. has been running into a loss gradually, but the board of directors are reluctant to shut the company down because it has invested millions of dollars’ worth of equipment which can only be used in that industry. Moreover, the people in CharmingBells Inc. have become emotionally attached to the company and do not want the company completely shut down. This scenario best illustrates _____.
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high fixed costs
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used production capacity
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unused production capacity
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high exit barriers
17
Jason, a visually impaired employee of Melony Inc., believes that his workplace has given him independence and self-confidence, thereby increasing his morale. Which of the following has been exemplified by Melony in this scenario?
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Superordinate goal
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Capacity building
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Social value
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Legal responsibility
18
Which of the following is the main purpose of a strategic management process?
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Ensuring that all employees have managers and supervisors to lead their teams
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Creating an organization that functions systematically according to its vision, mission, and goals
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Creating a high-level plan that can be implemented without fierce competition and undue risk
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Specifying a high-level plan that an organization will employ to achieve competitive advantage
19
Which of the following statements best describes the term internal analysis?
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It examines the efficiency of employees through the help of standardized tests and group discussions.
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It examines the emotions of a firm’s employees in order to identify their weaknesses.
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It studies the infrastructure of a company to gauge the number of employees it can recruit.
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It examines a company’s resources and capabilities to configure a firm’s ability to deliver unique value.
20
BizTechno Inc. has always retained competitive advantage over its competitors. The company has offered customer satisfaction for many years by providing the best services and benefits for them. The resources, capabilities, and the organizational structure of the organization have also created an increased edge over its competitors. Which of the following does this scenario best illustrate?
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Value chain
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Employee specialization
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Business model
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Task specialization
21
Which of the following statements is true of a fragmented industry?
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It involves companies selling the same brand of products that are scattered in different locations.
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It is characterized by rivalry that is typically less intense.
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It is difficult to keep track of the pricing and competitive moves of multiple players.
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It usually has very few competitors and tends to be dominated by a few large firms.
22
A software industry implements a new structural change in the corporate hierarchy. Employees are provided with a clear statement of desired outcomes and endpoints for organizational change. This is an example of _____.
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building a guiding coalition
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agenerating urgency
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creating a vision
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creating a response profile
23
A(n) _____ is a legal structure for organizing a business where the organization is a distinct and separate entity from its owners.
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general partnership
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limited partnership
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proprietorship
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corporation
24
Walker and Harris are senior research fellows at a global non-profit organization. They are working on a project that studies the growth trend of a multinational corporation, Garcia Inc. When Walker and Harris decide to consolidate their study findings, Walker is of the opinion that Garcia is in the ‘change process’ phase, while Harris believes that the company is in the ‘refreeze’ phase. Which of the following statements, if true, would strengthen Harris’ belief?
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Garcia Inc. decides to adapt to its environment and learn new growth-inducing behaviors.
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Garcia Inc. adopts a trial and error method to decide on the best growth strategy.
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Garcia Inc. formalizes and institutionalizes its new growth strategies.
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Garcia Inc. publicly admits that the current situation is not working.
25
A reduction in costs per unit due to increases in efficiency of production as the number of goods being produced increases best defines the term _____.
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economies of finance
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economies of wealth
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economies of scale
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economies of scope
26
Katherine is the CEO of a car dealership company called Red Cars. When looking for new investors for the company, she usually says that Red Cars wants to, “Be the best automotive retailer in the eyes of its customers, employees, and shareholders.” Which of the following does this statement best reflect?
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Red Cars’ strategy
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Red Cars’ resource
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Red Cars’ mission
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Red Cars’ capabilities
27
A tool that measures four broad areas of organizational performance which are financial results, customer goals, internal business processes, and learning and growth is called the _____.
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balance scorecard
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manager’s log
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performance indication register
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metric tool
28
The relatively fixed costs such as the costs of plant and equipment, which do not increase with an increase in the number of units manufactured, are known as _____.
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fixed cost of supply
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fixed cost of demand
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fixed cost of scale
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fixed cost of production
29
Godwel Inc., an insurance company, wants to assign accountability for particular tasks. It wants to measure the performance of every unit of the company. Which of the following organizational elements will help Godwel accomplish the given task?
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Style
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Strategy
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Skill
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Structure
30
SevenCloud Inc., a soft drink company, provided service to fair amount of customers for a whole year until a new company called Sparkle Inc. came up. Sparkle provided flavored water as a new product in the beverage market. Customers were eager to try out this new product and purchased it because they believed that it a better substitute for aerated beverages. SevenCloud was afraid that if the trend continued, it would soon run the risk of going out of business. In this scenario, which of the following did SevenCloud Inc. experience?
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Threat
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Weakness
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Opportunity
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Merger
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