,1. A firm's core competency is valuable, rare, but easily imitable. According to RBV,
this resource provides:
A. Temporary competitive advantage
B. Sustained competitive advantage
C. Competitive parity
D. No competitive advantage
Answer: A. Temporary competitive advantage
The resource-based view (Barney, 1991) states that a resource must be valuable, rare,
imperfectly imitable, and non-substitutable for sustained advantage. If it is imitable,
any advantage is temporary. Thus A is correct; B requires inimitability, C occurs when
resources are not rare, and D when not valuable.
2. Which strategy is most appropriate for a high-growth industry with weak
competitive forces?
A. Market penetration
B. Product development
C. Diversification
D. Retrenchment
Answer: A. Market penetration
In a high-growth industry with weak forces, firms can grow by increasing market share
with existing products (market penetration). Product development (B) is for new
products in existing markets; diversification (C) is riskier; retrenchment (D) is for
declining industries.
3. A manager uses a decision-making approach that seeks optimal solutions but is
limited by cognitive biases. This is:
A. Bounded rationality
B. Rational model
C. Intuitive decision making
D. Escalation of commitment
Answer: A. Bounded rationality
Bounded rationality (Simon) describes decision making limited by information,
cognitive capacity, and time, leading to satisficing rather than optimizing. The rational
model (B) assumes perfect information; intuition (C) is gut feeling; escalation (D) is
persisting with failing courses.
Page 2
,4. In Fiedler's contingency model, a leader with low LPC score is most effective in:
A. High-control situations
B. Moderate-control situations
C. Low-control situations
D. All situations equally
Answer: A. High-control situations
Fiedler's model posits that task-oriented leaders (low LPC) perform best in very
favorable (high-control) or very unfavorable (low-control) situations.
Relationship-oriented (high LPC) leaders excel in moderate-control situations. Thus A
is correct; B is for high LPC; C is also for low LPC but less common; D is incorrect.
5. Which of the following is a key assumption of Theory X?
A. Employees inherently dislike work and must be coerced.
B. Employees seek responsibility and self-actualization.
C. Employees are motivated by intrinsic rewards.
D. Employees thrive under participative management.
Answer: A. Employees inherently dislike work and must be coerced.
McGregor's Theory X assumes employees dislike work, avoid responsibility, and
require close supervision and coercion. Theory Y (B, C, D) assumes employees are
self-motivated and seek responsibility. Thus A is correct.
6. A company's ethical climate is best described as:
A. The shared perceptions of what is ethically correct behavior.
B. The legal compliance framework.
C. The code of conduct document.
D. The personal morals of the CEO.
Answer: A. The shared perceptions of what is ethically correct behavior.
Ethical climate refers to the shared perceptions of ethical priorities and expected
behaviors within an organization. It is distinct from formal compliance (B), written
codes (C), or individual leaders' morals (D).
Page 3
, 7. In a just-in-time (JIT) inventory system, a key benefit is:
A. Reduced holding costs
B. Increased safety stock
C. Higher order quantities
D. Longer lead times
Answer: A. Reduced holding costs
JIT minimizes inventory levels by receiving goods just as needed, reducing holding
costs. It does not increase safety stock (B), encourages smaller order quantities (C), and
aims to reduce lead times (D).
8. Which team development stage is characterized by intragroup conflict?
A. Storming
B. Forming
C. Norming
D. Performing
Answer: A. Storming
Tuckman's stages: forming (orientation), storming (conflict), norming (cohesion),
performing (productivity). Intragroup conflict is typical of the storming stage. Thus A
is correct.
9. A firm pursuing a cost leadership strategy is most likely to:
A. Emphasize efficiency and scale economies.
B. Focus on unique product features.
C. Target a narrow market segment.
D. Invest heavily in R&D for innovation.
Answer: A. Emphasize efficiency and scale economies.
Cost leadership (Porter) aims to be the low-cost producer through efficiency, scale, and
cost control. Differentiation (B) focuses on uniqueness; focus (C) targets a niche;
innovation (D) supports differentiation. Thus A is correct.
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this resource provides:
A. Temporary competitive advantage
B. Sustained competitive advantage
C. Competitive parity
D. No competitive advantage
Answer: A. Temporary competitive advantage
The resource-based view (Barney, 1991) states that a resource must be valuable, rare,
imperfectly imitable, and non-substitutable for sustained advantage. If it is imitable,
any advantage is temporary. Thus A is correct; B requires inimitability, C occurs when
resources are not rare, and D when not valuable.
2. Which strategy is most appropriate for a high-growth industry with weak
competitive forces?
A. Market penetration
B. Product development
C. Diversification
D. Retrenchment
Answer: A. Market penetration
In a high-growth industry with weak forces, firms can grow by increasing market share
with existing products (market penetration). Product development (B) is for new
products in existing markets; diversification (C) is riskier; retrenchment (D) is for
declining industries.
3. A manager uses a decision-making approach that seeks optimal solutions but is
limited by cognitive biases. This is:
A. Bounded rationality
B. Rational model
C. Intuitive decision making
D. Escalation of commitment
Answer: A. Bounded rationality
Bounded rationality (Simon) describes decision making limited by information,
cognitive capacity, and time, leading to satisficing rather than optimizing. The rational
model (B) assumes perfect information; intuition (C) is gut feeling; escalation (D) is
persisting with failing courses.
Page 2
,4. In Fiedler's contingency model, a leader with low LPC score is most effective in:
A. High-control situations
B. Moderate-control situations
C. Low-control situations
D. All situations equally
Answer: A. High-control situations
Fiedler's model posits that task-oriented leaders (low LPC) perform best in very
favorable (high-control) or very unfavorable (low-control) situations.
Relationship-oriented (high LPC) leaders excel in moderate-control situations. Thus A
is correct; B is for high LPC; C is also for low LPC but less common; D is incorrect.
5. Which of the following is a key assumption of Theory X?
A. Employees inherently dislike work and must be coerced.
B. Employees seek responsibility and self-actualization.
C. Employees are motivated by intrinsic rewards.
D. Employees thrive under participative management.
Answer: A. Employees inherently dislike work and must be coerced.
McGregor's Theory X assumes employees dislike work, avoid responsibility, and
require close supervision and coercion. Theory Y (B, C, D) assumes employees are
self-motivated and seek responsibility. Thus A is correct.
6. A company's ethical climate is best described as:
A. The shared perceptions of what is ethically correct behavior.
B. The legal compliance framework.
C. The code of conduct document.
D. The personal morals of the CEO.
Answer: A. The shared perceptions of what is ethically correct behavior.
Ethical climate refers to the shared perceptions of ethical priorities and expected
behaviors within an organization. It is distinct from formal compliance (B), written
codes (C), or individual leaders' morals (D).
Page 3
, 7. In a just-in-time (JIT) inventory system, a key benefit is:
A. Reduced holding costs
B. Increased safety stock
C. Higher order quantities
D. Longer lead times
Answer: A. Reduced holding costs
JIT minimizes inventory levels by receiving goods just as needed, reducing holding
costs. It does not increase safety stock (B), encourages smaller order quantities (C), and
aims to reduce lead times (D).
8. Which team development stage is characterized by intragroup conflict?
A. Storming
B. Forming
C. Norming
D. Performing
Answer: A. Storming
Tuckman's stages: forming (orientation), storming (conflict), norming (cohesion),
performing (productivity). Intragroup conflict is typical of the storming stage. Thus A
is correct.
9. A firm pursuing a cost leadership strategy is most likely to:
A. Emphasize efficiency and scale economies.
B. Focus on unique product features.
C. Target a narrow market segment.
D. Invest heavily in R&D for innovation.
Answer: A. Emphasize efficiency and scale economies.
Cost leadership (Porter) aims to be the low-cost producer through efficiency, scale, and
cost control. Differentiation (B) focuses on uniqueness; focus (C) targets a niche;
innovation (D) supports differentiation. Thus A is correct.
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