HUMAN RESOURCE MANAGEMENT – CORE
COMPETENCE EXAN PRACTICE QUESTIONS AND
ANSWERS
TRUE/FALSE Apple has combined some of its tangible resources (such as financial resources and
research laboratories) and intangible resources (such as scientists, engineers, and organizational
routines) to complete research and development tasks to create a capability in R&D
T
TRUE/FALSE The length of time a firm can expect to create value by using its core competencies is a
function of how quickly competitors can successfully imitate a good, service, or process
T
TRUE/FALSE The trust that a firm has built between itself and its suppliers is an example of a costly-to-
imitate capability that other firms cannot easily develop.
T
TRUE/FALSE Capabilities may be costly to imitate if firms have unique and valuable organizational
cultures, are causally ambiguous, or are socially complex
T
TRUE/FALSE At Southwest Airlines, the complex interrelationship between the firm's culture and human
capital adds value for customers in ways that other airlines cannot, such as jokes on flights by flight
attendants and cooperation between gate personnel and pilots
T
,T/FInterpersonal relationships, trust, friendships among managers and between managers and
employees, and a firm's reputation with suppliers and customers are all examples of complex social
phenomena that make capabilities easy to imitate
F
TRUE/FALSE A company can earn above-average returns only when the value it creates is less than the
costs incurred to create that value
F
TRUE/FALSE Value chain activities in the value chain create value, whereas support functions generate
costs
F``
TRUE/FALSE One criterion for a resource or capability to be a source of competitive advantage is that it
must allow the firm to perform a value-creating activity that competitors cannot perform
T
TRUE/FALSE A firm should outsource only activities where it cannot create value or where it is at a
substantial disadvantage compared to competitors
T
TRUE/FALSE Firms should never outsource a primary activity because of the danger of the activity being
imitated by rivals.
F
TRUE/FALSE Two concerns about outsourcing are the potential loss of a firm's innovative ability and the
loss of jobs within the focal firm.
T
,TRUE/FALSE Any core competency has the potential to lose its value-creating ability
T
All competitive advantages have:
a. a limited life.
b. unrestricted sustainability.
c. the ability to earn above-average returns indefinitely.
d. protections against imitability
a. a limited life.
It is increasingly difficult for a firm to develop and sustain a competitive advantage because of the
effects of globalization and:
a. the rapid development of the Internet's capabilities.
b. extensive use of outsourcing within the borders of the United States.
c. the declining number of inventions and patents developed by U.S. citizens.
d. the simultaneous erosion of the U.S. work ethic and the U.S. education
a. the rapid development of the Internet's capabilities.
A marketing manager at GTA Technology wants the next generation of a particular application to include
certain features. The product manager of that app insists that the feature would be costly to implement
and could not be achieved by the desired release date unless additional resources, both financial and
human, were directed to the app. The marketing manager insists that this is necessary, while the
product manager feels that the inclusion of these features would not validate the extra investment. It is
now up to the project manager to decide how to proceed. Which of the following conditions is most
affecting the project manager's decision?
a. Uncertainty
b. Complexity
, c. Intraorganizational conflict
d. Sustainability
c. Intraorganizational conflict
Which of the following is NOT a factor affecting sustainability of a competitive advantage?
a. Availability of substitutes for a firm's core competence
b. Rate at which obsolescence of the core competence occurs because of environmental changes
c. Imitability of a core competence
d. Length of time the core competence has existed
d. Length of time the core competence has existed
Internal analysis enables a firm to determine what it:
a. can do
b. should do.
c. will do.
d. might do.
a. can do
The proper matching of what a firm CAN DO with what it MIGHT DO:
a. balances the internal characteristics of the firm with the characteristics of the external
environment.
b. overcomes the rigidity and inertia resulting from a history of success.
c. yields insights the firm requires to select its strategy.
d. develops core competencies based on human knowledge
c. yields insights the firm requires to select its strategy.
COMPETENCE EXAN PRACTICE QUESTIONS AND
ANSWERS
TRUE/FALSE Apple has combined some of its tangible resources (such as financial resources and
research laboratories) and intangible resources (such as scientists, engineers, and organizational
routines) to complete research and development tasks to create a capability in R&D
T
TRUE/FALSE The length of time a firm can expect to create value by using its core competencies is a
function of how quickly competitors can successfully imitate a good, service, or process
T
TRUE/FALSE The trust that a firm has built between itself and its suppliers is an example of a costly-to-
imitate capability that other firms cannot easily develop.
T
TRUE/FALSE Capabilities may be costly to imitate if firms have unique and valuable organizational
cultures, are causally ambiguous, or are socially complex
T
TRUE/FALSE At Southwest Airlines, the complex interrelationship between the firm's culture and human
capital adds value for customers in ways that other airlines cannot, such as jokes on flights by flight
attendants and cooperation between gate personnel and pilots
T
,T/FInterpersonal relationships, trust, friendships among managers and between managers and
employees, and a firm's reputation with suppliers and customers are all examples of complex social
phenomena that make capabilities easy to imitate
F
TRUE/FALSE A company can earn above-average returns only when the value it creates is less than the
costs incurred to create that value
F
TRUE/FALSE Value chain activities in the value chain create value, whereas support functions generate
costs
F``
TRUE/FALSE One criterion for a resource or capability to be a source of competitive advantage is that it
must allow the firm to perform a value-creating activity that competitors cannot perform
T
TRUE/FALSE A firm should outsource only activities where it cannot create value or where it is at a
substantial disadvantage compared to competitors
T
TRUE/FALSE Firms should never outsource a primary activity because of the danger of the activity being
imitated by rivals.
F
TRUE/FALSE Two concerns about outsourcing are the potential loss of a firm's innovative ability and the
loss of jobs within the focal firm.
T
,TRUE/FALSE Any core competency has the potential to lose its value-creating ability
T
All competitive advantages have:
a. a limited life.
b. unrestricted sustainability.
c. the ability to earn above-average returns indefinitely.
d. protections against imitability
a. a limited life.
It is increasingly difficult for a firm to develop and sustain a competitive advantage because of the
effects of globalization and:
a. the rapid development of the Internet's capabilities.
b. extensive use of outsourcing within the borders of the United States.
c. the declining number of inventions and patents developed by U.S. citizens.
d. the simultaneous erosion of the U.S. work ethic and the U.S. education
a. the rapid development of the Internet's capabilities.
A marketing manager at GTA Technology wants the next generation of a particular application to include
certain features. The product manager of that app insists that the feature would be costly to implement
and could not be achieved by the desired release date unless additional resources, both financial and
human, were directed to the app. The marketing manager insists that this is necessary, while the
product manager feels that the inclusion of these features would not validate the extra investment. It is
now up to the project manager to decide how to proceed. Which of the following conditions is most
affecting the project manager's decision?
a. Uncertainty
b. Complexity
, c. Intraorganizational conflict
d. Sustainability
c. Intraorganizational conflict
Which of the following is NOT a factor affecting sustainability of a competitive advantage?
a. Availability of substitutes for a firm's core competence
b. Rate at which obsolescence of the core competence occurs because of environmental changes
c. Imitability of a core competence
d. Length of time the core competence has existed
d. Length of time the core competence has existed
Internal analysis enables a firm to determine what it:
a. can do
b. should do.
c. will do.
d. might do.
a. can do
The proper matching of what a firm CAN DO with what it MIGHT DO:
a. balances the internal characteristics of the firm with the characteristics of the external
environment.
b. overcomes the rigidity and inertia resulting from a history of success.
c. yields insights the firm requires to select its strategy.
d. develops core competencies based on human knowledge
c. yields insights the firm requires to select its strategy.
