COB 487 EXAM QUESTIONS & ANSWERS
Firm mission statements should be _______ and __________ - Answer -
understandable and different
Capital structure of the firm - Answer -is the split between debt and equity in the firm
Stock price - Answer -the prediction of what people think the future earnings of the
company will be
Backdating - Answer --A way of changing the options for management, by dating back
to a previous stock price to give management more time
- since the stock price of the frim is tied to the corporate's managements performance
two ways to use value chains - Answer -find resources and check alignment
the one thing you must do before starting a Porter's five forces analysis is - Answer -
define the industry
1) an increase in the minimum wage would be a change in the ________ macro .
2) it would also directly influence _______ under Porter's Five Forces - Answer -1)
political/legal
2)supplier power
If you saw someone drowning and didn't stop to help you would be breaking these two
fundamental rules of common morality - Answer -mutual-aid and respect for persons
ceo duality - Answer -when the ceo serves as the chairperson of the board
-the most common way that the oversight of the board can be constrained
according to Gallagher the key to how well a firm does is how well the firm ________ on
its strategy - Answer -aligns
Focus business-level strategy - Answer -Specialization in one segment of a market,
and focusing all of the organization's resources on that segment
being the first mover is ONLY advantageous if you get at least one of the 3 advantages
which are.. - Answer -1. create customer switching costs
2. gain a reputational advantage
3. gain a scarce asset (location)
goals only need to be _______ and ________ - Answer -specific and measurable
representativeness bias - Answer -A cognitive bias resulting from the tendency to
generalize inappropriately from a small sample
, prior hypothesis bias - Answer -A cognitive bias resulting from the tendency to base
decisions on strong prior beliefs even if evidence shows that those beliefs are wrong.
industry - Answer -defined as a group of producers or close substitutes
Inertia - Answer -The tendency to resist a change
the 5 forces model assumes that - Answer -there is only an X amount of money in the
industry and these 5 forces are trying to come and take that money away
supplier power - Answer --The suppliers' ability to influence the prices they charge for
supplies
-relative size of suppliers to firms in industry
cost is based off _____ not _______ - Answer -cost, price
differentiation needs to be a ________ price - Answer -premium
High rivalry is consistent with - Answer -low profits/breaking even.
Stakeholders - Answer --anyone who influences or is influenced by an organization
(both internal and external)
-broad concept
-shareholders and stockholders are only examples of stakeholders
Illusion of control bias - Answer --the risk of overestimating our ability to control or
manage events
-successful people who believe they have a lot of control over what happens to them
-when a company CEO believes they are always right and in control because they are
the CEO since they have been successful in life
Technology - Answer -refers to how things are done
Market cap - Answer -A way to measure a company's value
(Number of shares) X (the price of the shares)
economies of scale - Answer -average cost per unit reductions as output increases
-apart of the Low cost business level strategy
high economies of scale - Answer -are a barrier to entry
minimum efficient scale - Answer --the point at which all significant unit cost reductions
from production increases have been realized
-the level of output at which all economies of scale are exhausted
-critical entry barrier
Firm mission statements should be _______ and __________ - Answer -
understandable and different
Capital structure of the firm - Answer -is the split between debt and equity in the firm
Stock price - Answer -the prediction of what people think the future earnings of the
company will be
Backdating - Answer --A way of changing the options for management, by dating back
to a previous stock price to give management more time
- since the stock price of the frim is tied to the corporate's managements performance
two ways to use value chains - Answer -find resources and check alignment
the one thing you must do before starting a Porter's five forces analysis is - Answer -
define the industry
1) an increase in the minimum wage would be a change in the ________ macro .
2) it would also directly influence _______ under Porter's Five Forces - Answer -1)
political/legal
2)supplier power
If you saw someone drowning and didn't stop to help you would be breaking these two
fundamental rules of common morality - Answer -mutual-aid and respect for persons
ceo duality - Answer -when the ceo serves as the chairperson of the board
-the most common way that the oversight of the board can be constrained
according to Gallagher the key to how well a firm does is how well the firm ________ on
its strategy - Answer -aligns
Focus business-level strategy - Answer -Specialization in one segment of a market,
and focusing all of the organization's resources on that segment
being the first mover is ONLY advantageous if you get at least one of the 3 advantages
which are.. - Answer -1. create customer switching costs
2. gain a reputational advantage
3. gain a scarce asset (location)
goals only need to be _______ and ________ - Answer -specific and measurable
representativeness bias - Answer -A cognitive bias resulting from the tendency to
generalize inappropriately from a small sample
, prior hypothesis bias - Answer -A cognitive bias resulting from the tendency to base
decisions on strong prior beliefs even if evidence shows that those beliefs are wrong.
industry - Answer -defined as a group of producers or close substitutes
Inertia - Answer -The tendency to resist a change
the 5 forces model assumes that - Answer -there is only an X amount of money in the
industry and these 5 forces are trying to come and take that money away
supplier power - Answer --The suppliers' ability to influence the prices they charge for
supplies
-relative size of suppliers to firms in industry
cost is based off _____ not _______ - Answer -cost, price
differentiation needs to be a ________ price - Answer -premium
High rivalry is consistent with - Answer -low profits/breaking even.
Stakeholders - Answer --anyone who influences or is influenced by an organization
(both internal and external)
-broad concept
-shareholders and stockholders are only examples of stakeholders
Illusion of control bias - Answer --the risk of overestimating our ability to control or
manage events
-successful people who believe they have a lot of control over what happens to them
-when a company CEO believes they are always right and in control because they are
the CEO since they have been successful in life
Technology - Answer -refers to how things are done
Market cap - Answer -A way to measure a company's value
(Number of shares) X (the price of the shares)
economies of scale - Answer -average cost per unit reductions as output increases
-apart of the Low cost business level strategy
high economies of scale - Answer -are a barrier to entry
minimum efficient scale - Answer --the point at which all significant unit cost reductions
from production increases have been realized
-the level of output at which all economies of scale are exhausted
-critical entry barrier
