MBA 710 – ASSESSMENT 3 PRACTICE EXAM (FULL) Strategic
Management, Managerial Economics, Financial Management,
Organizational Behavior, Marketing Management, Operations
Management, & Business Ethics
SECTION A: STRATEGIC MANAGEMENT (Questions 1–45)
1. The primary purpose of a SWOT analysis is to:
A. Forecast financial returns
B. Evaluate internal and external strategic factors
C. Analyze employee performance
D. Set pricing strategy
Answer: B
Explanation: SWOT (Strengths, Weaknesses, Opportunities, Threats) is a strategic tool used to assess an
organization's internal capabilities and external environment. Strengths and weaknesses are internal
factors (controllable), while opportunities and threats are external factors (uncontrollable).
2. A firm achieves competitive advantage when it:
A. Matches competitors' prices
B. Consistently performs better than rivals in value creation
C. Reduces all costs to zero
D. Avoids innovation
Answer: B
Explanation: Competitive advantage exists when a firm creates more economic value than its rivals,
either through lower costs (cost leadership) or through differentiation that commands a premium price.
3. Porter's Five Forces model is used to:
A. Evaluate internal leadership
B. Assess industry competitiveness
,C. Measure employee satisfaction
D. Analyze financial statements only
Answer: B
Explanation: Porter's Five Forces (threat of new entrants, bargaining power of suppliers, bargaining
power of buyers, threat of substitute products, and rivalry among existing competitors) analyzes the
structural factors that determine industry profitability and competitive intensity.
4. A differentiation strategy focuses on:
A. Lowest cost production
B. Unique product offerings that command a premium price
C. Reducing workforce size
D. Market exit
Answer: B
Explanation: Differentiation strategy involves creating unique, superior products or services that
customers value, allowing the firm to charge a premium price. Examples include Apple (design) and
Mercedes-Benz (quality).
5. The value chain helps firms:
A. Increase tax efficiency
B. Identify value-adding activities
C. Replace leadership structures
D. Eliminate competition
Answer: B
Explanation: The value chain, developed by Michael Porter, breaks down a firm's activities into primary
(inbound logistics, operations, outbound logistics, marketing & sales, service) and support activities to
identify sources of competitive advantage and cost reduction opportunities.
6. A blue ocean strategy focuses on:
A. Competing in existing markets
B. Creating new, uncontested market space
C. Reducing product quality
,D. Outsourcing all operations
Answer: B
Explanation: Blue ocean strategy (Kim & Mauborgne) involves creating new market spaces (blue oceans)
where competition is irrelevant, rather than fighting in crowded, competitive markets (red oceans).
7. The romantic view of leadership attributes organizational success primarily to:
A. External economic conditions
B. The leader's vision and actions
C. Employee performance
D. Government regulations
Answer: B
Explanation: The romantic view positions the leader as the central force driving organizational success,
celebrating individual agency and strategic vision. In contrast, the external control perspective argues
that external forces largely determine performance outcomes.
8. In the stakeholder symbiosis view:
A. Stakeholders compete for limited resources in a zero‑sum game
B. Stakeholders are independent with no mutual influence
C. Stakeholders are dependent upon each other for mutual success, creating shared benefits
D. Only shareholders and employees matter for organizational success
Answer: C
Explanation: The stakeholder symbiosis perspective rejects zero‑sum assumptions, recognizing that
creating value for customers, employees, suppliers, communities, and shareholders can be mutually
reinforcing.
9. Which three mechanisms are considered essential for effective corporate governance?
A. Government regulation, media oversight, and employee unions
B. An effective board of directors, shareholder activism, and proper managerial rewards/incentives
C. Quarterly earnings reports, external audits, and whistleblower hotlines
D. Executive sessions, diversity quotas, and stock buybacks
, Answer: B
Explanation: Effective corporate governance requires an engaged board that monitors management,
active shareholders who hold management accountable, and incentive structures that align managerial
interests with long‑term shareholder value creation.
10. VRIO framework (Value, Rarity, Imitability, Organization) is used to assess:
A. Financial liquidity
B. Internal resources and capabilities for sustainable competitive advantage
C. Market share
D. Customer satisfaction
Answer: B
Explanation: The VRIO framework, developed by Jay Barney, evaluates whether a firm's resources
provide sustained competitive advantage. Resources must be Valuable, Rare, costly to Imitate, and the
Organization must be able to exploit them.
11. Which of the following is NOT one of Porter's Five Forces?
A. Threat of new entrants
B. Bargaining power of suppliers
C. Bargaining power of government
D. Rivalry among existing competitors
Answer: C
Explanation: Porter's Five Forces include threat of new entrants, bargaining power of suppliers,
bargaining power of buyers, threat of substitute products, and intensity of rivalry. Government is
considered part of the macro‑environment (PESTEL) or a factor affecting the five forces.
12. A cost leadership strategy requires a firm to:
A. Differentiate its products from competitors
B. Achieve the lowest operational costs in the industry while maintaining acceptable quality
C. Focus on a narrow market segment
D. Invest heavily in R&D for new products
Answer: B
Management, Managerial Economics, Financial Management,
Organizational Behavior, Marketing Management, Operations
Management, & Business Ethics
SECTION A: STRATEGIC MANAGEMENT (Questions 1–45)
1. The primary purpose of a SWOT analysis is to:
A. Forecast financial returns
B. Evaluate internal and external strategic factors
C. Analyze employee performance
D. Set pricing strategy
Answer: B
Explanation: SWOT (Strengths, Weaknesses, Opportunities, Threats) is a strategic tool used to assess an
organization's internal capabilities and external environment. Strengths and weaknesses are internal
factors (controllable), while opportunities and threats are external factors (uncontrollable).
2. A firm achieves competitive advantage when it:
A. Matches competitors' prices
B. Consistently performs better than rivals in value creation
C. Reduces all costs to zero
D. Avoids innovation
Answer: B
Explanation: Competitive advantage exists when a firm creates more economic value than its rivals,
either through lower costs (cost leadership) or through differentiation that commands a premium price.
3. Porter's Five Forces model is used to:
A. Evaluate internal leadership
B. Assess industry competitiveness
,C. Measure employee satisfaction
D. Analyze financial statements only
Answer: B
Explanation: Porter's Five Forces (threat of new entrants, bargaining power of suppliers, bargaining
power of buyers, threat of substitute products, and rivalry among existing competitors) analyzes the
structural factors that determine industry profitability and competitive intensity.
4. A differentiation strategy focuses on:
A. Lowest cost production
B. Unique product offerings that command a premium price
C. Reducing workforce size
D. Market exit
Answer: B
Explanation: Differentiation strategy involves creating unique, superior products or services that
customers value, allowing the firm to charge a premium price. Examples include Apple (design) and
Mercedes-Benz (quality).
5. The value chain helps firms:
A. Increase tax efficiency
B. Identify value-adding activities
C. Replace leadership structures
D. Eliminate competition
Answer: B
Explanation: The value chain, developed by Michael Porter, breaks down a firm's activities into primary
(inbound logistics, operations, outbound logistics, marketing & sales, service) and support activities to
identify sources of competitive advantage and cost reduction opportunities.
6. A blue ocean strategy focuses on:
A. Competing in existing markets
B. Creating new, uncontested market space
C. Reducing product quality
,D. Outsourcing all operations
Answer: B
Explanation: Blue ocean strategy (Kim & Mauborgne) involves creating new market spaces (blue oceans)
where competition is irrelevant, rather than fighting in crowded, competitive markets (red oceans).
7. The romantic view of leadership attributes organizational success primarily to:
A. External economic conditions
B. The leader's vision and actions
C. Employee performance
D. Government regulations
Answer: B
Explanation: The romantic view positions the leader as the central force driving organizational success,
celebrating individual agency and strategic vision. In contrast, the external control perspective argues
that external forces largely determine performance outcomes.
8. In the stakeholder symbiosis view:
A. Stakeholders compete for limited resources in a zero‑sum game
B. Stakeholders are independent with no mutual influence
C. Stakeholders are dependent upon each other for mutual success, creating shared benefits
D. Only shareholders and employees matter for organizational success
Answer: C
Explanation: The stakeholder symbiosis perspective rejects zero‑sum assumptions, recognizing that
creating value for customers, employees, suppliers, communities, and shareholders can be mutually
reinforcing.
9. Which three mechanisms are considered essential for effective corporate governance?
A. Government regulation, media oversight, and employee unions
B. An effective board of directors, shareholder activism, and proper managerial rewards/incentives
C. Quarterly earnings reports, external audits, and whistleblower hotlines
D. Executive sessions, diversity quotas, and stock buybacks
, Answer: B
Explanation: Effective corporate governance requires an engaged board that monitors management,
active shareholders who hold management accountable, and incentive structures that align managerial
interests with long‑term shareholder value creation.
10. VRIO framework (Value, Rarity, Imitability, Organization) is used to assess:
A. Financial liquidity
B. Internal resources and capabilities for sustainable competitive advantage
C. Market share
D. Customer satisfaction
Answer: B
Explanation: The VRIO framework, developed by Jay Barney, evaluates whether a firm's resources
provide sustained competitive advantage. Resources must be Valuable, Rare, costly to Imitate, and the
Organization must be able to exploit them.
11. Which of the following is NOT one of Porter's Five Forces?
A. Threat of new entrants
B. Bargaining power of suppliers
C. Bargaining power of government
D. Rivalry among existing competitors
Answer: C
Explanation: Porter's Five Forces include threat of new entrants, bargaining power of suppliers,
bargaining power of buyers, threat of substitute products, and intensity of rivalry. Government is
considered part of the macro‑environment (PESTEL) or a factor affecting the five forces.
12. A cost leadership strategy requires a firm to:
A. Differentiate its products from competitors
B. Achieve the lowest operational costs in the industry while maintaining acceptable quality
C. Focus on a narrow market segment
D. Invest heavily in R&D for new products
Answer: B
