Chapter 2: Business processes
Multiple-choice questions
1. Which are the three levels that strategy can be seen to operate at?
(i) The internal level.
(ii) The external level.
(iii) The business portfolio level.
(iv) The inter-organisation level.
(v) The intra-organisation level.
(vi) The competitive level.
a. (i) (ii) (vi)
*b. (i) (iii) (vi)
c. (iii) (iv) (v)
d. (iv) (v) (iii)
Correct answer: b
Learning objective 2.1 – identify and interpret the components of organisational strategy and
mission.
2. An example of a strategic level decision would be:
a. determining the quantity of raw materials to purchase.
b. appointing a new line manager responsible for running the delivery
department.
c. reconfiguring the production line design to eliminate wasted time due to
bottlenecks.
*d. deciding whether or not to acquire the remaining shares of a partially owned
subsidiary.
Correct answer: d
Learning objective 2.1 – identify and interpret the components of organisational strategy and
mission.
, Chapter 2: Business processes
3. Michael Porter sees a business as having two options when deciding on a strategy.
These two options are:
a. economies of scale and entry barrier.
b. economies of scope and differentiation.
c. price competition and product abundance.
*d. differentiation and cost leadership.
Correct answer: d
Learning objective 2.1 – identify and interpret the components of organisational strategy and
mission.
4. Michael Porter sees the implementation and attainment of strategies as consisting of
five steps. Which of the following is NOT one of the steps?
a. Fit.
b. Uniqueness.
*c. Operational efficiency.
d. Sustainability.
Correct answer: c
Learning objective 2.1 – identify and interpret the components of organisational strategy and
mission.
5. Michael Porter puts forward five forces that shape the industry in which a firm
operates. Which of the following is NOT one of the forces?
a. Threat of new entrants.
*b. Legislative power of the government.
c. Rivalry among existing competitors.
d. Threat of substitute products or services.
Correct answer: b
Learning objective 2.1 – identify and interpret the components of organisational strategy and
mission.
6. There are two perspectives of organisational design:
a. logical and physical.
b. internal and external.
*c. functional and business process.
d. scientific and practical.
Correct answer: c
Learning objective 2.2 – critique alternative organisational structures, reflecting on their
strengths and weaknesses and the implications for organisational operations.
Learning objective 2.3 – identify and describe a business process.
2.1
, 7. The logical consequence of Taylor’s scientific management approach was that
organisations:
*a. developed rigid hierarchies that sought to tightly control lower levels of the
organisation.
b. developed highly interactive and flexible structures that could easily adapt to
changing environments.
c. had employees who questioned procedures and sought to continually redefine
their role.
d. streamlined the information flows across the organisation.
Correct answer: a
Learning objective 2.2 – critique alternative organisational structures, reflecting on their
strengths and weaknesses and the implications for organisational operations.
Learning objective 2.3 – identify and describe a business process.
8. Scientific management is concerned with:
a. streamlined work flows across the organisation.
b. hierarchical control of the organisation through three levels of management.
*c. clearly defining individual employee’s responsibilities and tasks.
d. dividing the business structure into the optimal number of functional divisions.
Correct answer: c
Learning objective 2.2 – critique alternative organisational structures, reflecting on their
strengths and weaknesses and the implications for organisational operations.
Learning objective 2.3 – identify and describe a business process.
9. Which of the following is not a benefit of a functionally based organisational design?
a. Control and coordination.
b. Stability.
*c. Communication efficiency.
d. Task specificity.
Correct answer: c
Learning objective 2.2 – critique alternative organisational structures, reflecting on their
strengths and weaknesses and the implications for organisational operations.
Learning objective 2.3 – identify and describe a business process.
2.2
Multiple-choice questions
1. Which are the three levels that strategy can be seen to operate at?
(i) The internal level.
(ii) The external level.
(iii) The business portfolio level.
(iv) The inter-organisation level.
(v) The intra-organisation level.
(vi) The competitive level.
a. (i) (ii) (vi)
*b. (i) (iii) (vi)
c. (iii) (iv) (v)
d. (iv) (v) (iii)
Correct answer: b
Learning objective 2.1 – identify and interpret the components of organisational strategy and
mission.
2. An example of a strategic level decision would be:
a. determining the quantity of raw materials to purchase.
b. appointing a new line manager responsible for running the delivery
department.
c. reconfiguring the production line design to eliminate wasted time due to
bottlenecks.
*d. deciding whether or not to acquire the remaining shares of a partially owned
subsidiary.
Correct answer: d
Learning objective 2.1 – identify and interpret the components of organisational strategy and
mission.
, Chapter 2: Business processes
3. Michael Porter sees a business as having two options when deciding on a strategy.
These two options are:
a. economies of scale and entry barrier.
b. economies of scope and differentiation.
c. price competition and product abundance.
*d. differentiation and cost leadership.
Correct answer: d
Learning objective 2.1 – identify and interpret the components of organisational strategy and
mission.
4. Michael Porter sees the implementation and attainment of strategies as consisting of
five steps. Which of the following is NOT one of the steps?
a. Fit.
b. Uniqueness.
*c. Operational efficiency.
d. Sustainability.
Correct answer: c
Learning objective 2.1 – identify and interpret the components of organisational strategy and
mission.
5. Michael Porter puts forward five forces that shape the industry in which a firm
operates. Which of the following is NOT one of the forces?
a. Threat of new entrants.
*b. Legislative power of the government.
c. Rivalry among existing competitors.
d. Threat of substitute products or services.
Correct answer: b
Learning objective 2.1 – identify and interpret the components of organisational strategy and
mission.
6. There are two perspectives of organisational design:
a. logical and physical.
b. internal and external.
*c. functional and business process.
d. scientific and practical.
Correct answer: c
Learning objective 2.2 – critique alternative organisational structures, reflecting on their
strengths and weaknesses and the implications for organisational operations.
Learning objective 2.3 – identify and describe a business process.
2.1
, 7. The logical consequence of Taylor’s scientific management approach was that
organisations:
*a. developed rigid hierarchies that sought to tightly control lower levels of the
organisation.
b. developed highly interactive and flexible structures that could easily adapt to
changing environments.
c. had employees who questioned procedures and sought to continually redefine
their role.
d. streamlined the information flows across the organisation.
Correct answer: a
Learning objective 2.2 – critique alternative organisational structures, reflecting on their
strengths and weaknesses and the implications for organisational operations.
Learning objective 2.3 – identify and describe a business process.
8. Scientific management is concerned with:
a. streamlined work flows across the organisation.
b. hierarchical control of the organisation through three levels of management.
*c. clearly defining individual employee’s responsibilities and tasks.
d. dividing the business structure into the optimal number of functional divisions.
Correct answer: c
Learning objective 2.2 – critique alternative organisational structures, reflecting on their
strengths and weaknesses and the implications for organisational operations.
Learning objective 2.3 – identify and describe a business process.
9. Which of the following is not a benefit of a functionally based organisational design?
a. Control and coordination.
b. Stability.
*c. Communication efficiency.
d. Task specificity.
Correct answer: c
Learning objective 2.2 – critique alternative organisational structures, reflecting on their
strengths and weaknesses and the implications for organisational operations.
Learning objective 2.3 – identify and describe a business process.
2.2
