MNG3702 EXAM EXAM WITH QUESTIONS
AND ANSWERS/PLUS A RATIONALE
UPDATED 2026 A+/INSTANT DOWNLOAD PDF
Table of Contents
1. Strategic Planning and Goal Setting
2. Strategic Implementation and Organizational Structure
3. Competitive Advantage and Value Chains
4. Strategic Control and Performance Measurement
5. Corporate Governance and Business Ethics
1. A multi-business organization is evaluating its portfolio using the BCG Matrix. Business Unit A
has a high market share in a slow-growth industry, while Business Unit B has a low market share
in a high-growth industry. As a strategist, how should resources be allocated to maximize long-
term corporate value?
A. Allocate surplus cash from Unit A to sustain and grow Unit B to capture market share.
B. Divest Unit A immediately to focus entirely on the high-growth potential of Unit B.
C. Reduce investment in Unit B to improve short-term liquidity while maintaining Unit A.
D. Liquidate both units to reinvest in emerging markets unrelated to current operations.
Answer: A
CORRECT ANSWER : A
Rationale: Unit A is a "Cash Cow," generating stable cash flow, while Unit B is a "Question
Mark" requiring significant investment. Option A is correct because the cash generated from the
, cow should fund the potential stars. Options B, C, and D are incorrect as they either prematurely
exit a profitable unit or starve a high-potential unit of necessary resources.
2. A firm is undergoing a major strategic shift from a cost-leadership strategy to a differentiation
strategy. Which organizational structure change is most critical to ensure successful execution?
A. Centralizing all decision-making authority within the corporate head office.
B. Implementing cross-functional teams and decentralized decision-making processes.
C. Increasing strict hierarchical layers to monitor cost-saving initiatives.
D. Reducing R&D budgets to prioritize operational efficiency and speed to market.
Answer: B
CORRECT ANSWER : B
Rationale: Differentiation requires innovation and responsiveness, which are fostered by
decentralization and cross-functional collaboration. Option A is incorrect because centralization
stifles innovation. Option C reinforces a cost-focus rather than a differentiation focus, and
Option D directly contradicts the resource needs for differentiation.
3. An organization discovers that its internal culture is actively resisting the new strategic direction
imposed by top management. What is the most effective approach for the strategist to align
culture with strategy?
A. Issue a formal memo mandate requiring all employees to change their behavior immediately.
B. Fire the department heads who express concern regarding the new strategy.
C. Engage in iterative change management, involving middle managers in the adaptation of
the strategy.
D. Ignore the resistance, assuming that once the strategy is implemented, the culture will adjust
automatically.
Answer: C
CORRECT ANSWER : C
Rationale: Culture change is best achieved through participation and communication rather
than top-down force. Option C is correct as it builds buy-in. Options A, B, and D are ineffective,
often leading to increased turnover, lower morale, and failure of the strategic implementation.
,4. When conducting a VRIO analysis, a firm identifies that a specific technology is valuable, rare,
and costly to imitate, but the firm lacks the organizational processes to exploit it. How is this
resource classified?
A. Sustainable competitive advantage.
B. Temporary competitive advantage.
C. Competitive parity.
D. Unused organizational capability.
Answer: B
CORRECT ANSWER : B
Rationale: VRIO stands for Value, Rarity, Imitability, and Organization. If a firm lacks the 'O'
(Organization) to exploit the resource, it cannot achieve a sustained advantage. Option B is
correct because the resource provides value but remains under-leveraged. Options A, C, and D
are incorrect based on the framework definitions.
5. A firm is entering a foreign market using a strategic alliance model. What is the primary risk
associated with this strategy compared to a wholly-owned subsidiary?
A. High capital investment requirements.
B. Total loss of control over the brand image.
C. Potential for opportunistic behavior and loss of proprietary knowledge.
D. Lack of local market knowledge.
Answer: C
CORRECT ANSWER : C
Rationale: Strategic alliances involve sharing resources and knowledge, creating the risk that
the partner may misuse proprietary data or become a competitor. Option A is incorrect because
alliances are lower cost than subsidiaries. Option B is a risk but not as significant as the
knowledge leakage in C. Option D is incorrect as the partner is typically chosen to provide local
knowledge.
6. Which performance measurement tool is most effective for balancing financial objectives with
the underlying drivers of long-term strategic success?
A. Return on Investment (ROI).
, B. Balanced Scorecard.
C. Economic Value Added (EVA).
D. Market Share Analysis.
Answer: B
CORRECT ANSWER : B
Rationale: The Balanced Scorecard integrates financial, customer, internal process, and
learning/growth perspectives. Options A, C, and D are narrow financial or operational metrics
that do not capture the multidimensional nature of strategic success.
7. A company determines that its current Porter’s Five Forces analysis shows high bargaining
power of buyers and high threat of substitutes. What strategic move is most appropriate?
A. Aggressively lower prices to regain market share.
B. Invest in product differentiation and brand loyalty to reduce sensitivity to substitutes.
C. Seek vertical integration with suppliers to reduce costs.
D. Exit the industry immediately due to the high threats.
Answer: B
CORRECT ANSWER : B
Rationale: Differentiation makes a product unique, reducing the impact of substitute products
and buyer bargaining power. Option A would only intensify price wars. Option C addresses cost
but not buyer power or substitutes, and Option D is an extreme reaction before attempting
strategic repositioning.
8. When implementing a turnaround strategy for a failing division, which action should be the
immediate priority?
A. Expanding the product line to increase market coverage.
B. Stabilizing cash flows and cutting non-essential operational costs.
C. Launching an expensive national marketing campaign.
D. Hiring new executive leadership from outside the industry.
Answer: B
AND ANSWERS/PLUS A RATIONALE
UPDATED 2026 A+/INSTANT DOWNLOAD PDF
Table of Contents
1. Strategic Planning and Goal Setting
2. Strategic Implementation and Organizational Structure
3. Competitive Advantage and Value Chains
4. Strategic Control and Performance Measurement
5. Corporate Governance and Business Ethics
1. A multi-business organization is evaluating its portfolio using the BCG Matrix. Business Unit A
has a high market share in a slow-growth industry, while Business Unit B has a low market share
in a high-growth industry. As a strategist, how should resources be allocated to maximize long-
term corporate value?
A. Allocate surplus cash from Unit A to sustain and grow Unit B to capture market share.
B. Divest Unit A immediately to focus entirely on the high-growth potential of Unit B.
C. Reduce investment in Unit B to improve short-term liquidity while maintaining Unit A.
D. Liquidate both units to reinvest in emerging markets unrelated to current operations.
Answer: A
CORRECT ANSWER : A
Rationale: Unit A is a "Cash Cow," generating stable cash flow, while Unit B is a "Question
Mark" requiring significant investment. Option A is correct because the cash generated from the
, cow should fund the potential stars. Options B, C, and D are incorrect as they either prematurely
exit a profitable unit or starve a high-potential unit of necessary resources.
2. A firm is undergoing a major strategic shift from a cost-leadership strategy to a differentiation
strategy. Which organizational structure change is most critical to ensure successful execution?
A. Centralizing all decision-making authority within the corporate head office.
B. Implementing cross-functional teams and decentralized decision-making processes.
C. Increasing strict hierarchical layers to monitor cost-saving initiatives.
D. Reducing R&D budgets to prioritize operational efficiency and speed to market.
Answer: B
CORRECT ANSWER : B
Rationale: Differentiation requires innovation and responsiveness, which are fostered by
decentralization and cross-functional collaboration. Option A is incorrect because centralization
stifles innovation. Option C reinforces a cost-focus rather than a differentiation focus, and
Option D directly contradicts the resource needs for differentiation.
3. An organization discovers that its internal culture is actively resisting the new strategic direction
imposed by top management. What is the most effective approach for the strategist to align
culture with strategy?
A. Issue a formal memo mandate requiring all employees to change their behavior immediately.
B. Fire the department heads who express concern regarding the new strategy.
C. Engage in iterative change management, involving middle managers in the adaptation of
the strategy.
D. Ignore the resistance, assuming that once the strategy is implemented, the culture will adjust
automatically.
Answer: C
CORRECT ANSWER : C
Rationale: Culture change is best achieved through participation and communication rather
than top-down force. Option C is correct as it builds buy-in. Options A, B, and D are ineffective,
often leading to increased turnover, lower morale, and failure of the strategic implementation.
,4. When conducting a VRIO analysis, a firm identifies that a specific technology is valuable, rare,
and costly to imitate, but the firm lacks the organizational processes to exploit it. How is this
resource classified?
A. Sustainable competitive advantage.
B. Temporary competitive advantage.
C. Competitive parity.
D. Unused organizational capability.
Answer: B
CORRECT ANSWER : B
Rationale: VRIO stands for Value, Rarity, Imitability, and Organization. If a firm lacks the 'O'
(Organization) to exploit the resource, it cannot achieve a sustained advantage. Option B is
correct because the resource provides value but remains under-leveraged. Options A, C, and D
are incorrect based on the framework definitions.
5. A firm is entering a foreign market using a strategic alliance model. What is the primary risk
associated with this strategy compared to a wholly-owned subsidiary?
A. High capital investment requirements.
B. Total loss of control over the brand image.
C. Potential for opportunistic behavior and loss of proprietary knowledge.
D. Lack of local market knowledge.
Answer: C
CORRECT ANSWER : C
Rationale: Strategic alliances involve sharing resources and knowledge, creating the risk that
the partner may misuse proprietary data or become a competitor. Option A is incorrect because
alliances are lower cost than subsidiaries. Option B is a risk but not as significant as the
knowledge leakage in C. Option D is incorrect as the partner is typically chosen to provide local
knowledge.
6. Which performance measurement tool is most effective for balancing financial objectives with
the underlying drivers of long-term strategic success?
A. Return on Investment (ROI).
, B. Balanced Scorecard.
C. Economic Value Added (EVA).
D. Market Share Analysis.
Answer: B
CORRECT ANSWER : B
Rationale: The Balanced Scorecard integrates financial, customer, internal process, and
learning/growth perspectives. Options A, C, and D are narrow financial or operational metrics
that do not capture the multidimensional nature of strategic success.
7. A company determines that its current Porter’s Five Forces analysis shows high bargaining
power of buyers and high threat of substitutes. What strategic move is most appropriate?
A. Aggressively lower prices to regain market share.
B. Invest in product differentiation and brand loyalty to reduce sensitivity to substitutes.
C. Seek vertical integration with suppliers to reduce costs.
D. Exit the industry immediately due to the high threats.
Answer: B
CORRECT ANSWER : B
Rationale: Differentiation makes a product unique, reducing the impact of substitute products
and buyer bargaining power. Option A would only intensify price wars. Option C addresses cost
but not buyer power or substitutes, and Option D is an extreme reaction before attempting
strategic repositioning.
8. When implementing a turnaround strategy for a failing division, which action should be the
immediate priority?
A. Expanding the product line to increase market coverage.
B. Stabilizing cash flows and cutting non-essential operational costs.
C. Launching an expensive national marketing campaign.
D. Hiring new executive leadership from outside the industry.
Answer: B
