MBA 701 Module 5 Self Assessment | Questions and Answers |
2026 Update | 100% Correct - LSUS. - 100 Questions and
Answers Already Graded A+ Premium Exam Tested And
Verified
Subject Area MBA 701 - Strategic Management and Leadership
Description This exam assesses advanced concepts in strategic management, leadership
theory, organizational behavior, and decision-making, with a focus on application
to complex business scenarios. It covers modules on competitive strategy,
corporate governance, change management, and ethical leadership, emphasizing
synthesis and critical evaluation.
Expected Grade A+
Total Questions 100
Duration 3 hours
Learning Outcomes 1. Analyze competitive dynamics using Porter's Five Forces and game theory.
2. Evaluate corporate governance structures and their impact on firm performance.
3. Apply transformational and transactional leadership models to organizational
challenges.
4. Assess the role of organizational culture in strategy implementation.
5. Synthesize ethical frameworks to resolve strategic dilemmas.
Accreditation Louisiana State University Shreveport (LSUS), accredited by the Association to
Advance Collegiate Schools of Business (AACSB).
Page 1
,1. In a rapidly consolidating industry, a firm's profitability is eroding due to intense
price competition. Which strategic move would most effectively mitigate the threat
of rivalry while simultaneously raising entry barriers?
Answer: Implementing a cost-leadership strategy by investing in scale-efficient
plants
Cost leadership through scale economies creates a cost advantage that deters new
entrants (who cannot match prices) and allows the firm to withstand price wars better
than rivals. Differentiation (B) may reduce rivalry but does not directly raise entry
barriers. Vertical integration (C) can raise entry barriers but is less directly aimed at
price rivalry. Strategic alliances (D) are often illegal or unstable.
2. A CEO must decide whether to invest in a new technology that could disrupt the
firm's existing product line. Using real options reasoning, which of the following
approaches best captures the strategic value of the investment?
Answer: Treat the investment as a call option that allows the firm to scale up if the
technology proves viable
Real options reasoning recognizes that an initial investment creates future strategic
opportunities (e.g., to expand, abandon, or defer), which can be valued like financial
options. NPV (A) ignores managerial flexibility. Payback (C) and WACC (D) are
standard financial tools but do not capture the value of strategic flexibility.
3. In a hostile takeover attempt, the target firm's board adopts a poison pill that
would dilute the acquirer's stake if it exceeds 15% ownership. Which of the
following is the most likely primary effect of this defense on shareholder value?
Answer: It decreases shareholder value by entrenching management and deterring
beneficial takeovers
Poison pills often entrench management by making takeovers prohibitively expensive,
which can reduce shareholder value by preventing value-creating acquisitions. While
some argue they strengthen bargaining position (D), empirical evidence suggests a net
negative effect. The other options are less supported.
Page 2
,4. A multinational corporation is expanding into a country with a high degree of
political instability. According to institutional theory, which strategy would most
effectively enhance the firm's legitimacy and reduce the liability of foreignness?
Answer: Partnering with a local firm that has strong government connections
Institutional theory emphasizes aligning with local norms, rules, and networks. A local
partner provides legitimacy and access to political connections, reducing the liability of
foreignness. Wholly-owned subsidiaries (B) may lack local embeddedness.
Standardization (C) may clash with local expectations. Short-term extraction (D)
undermines legitimacy.
5. Which of the following best illustrates the concept of 'dynamic capabilities' as a
source of sustained competitive advantage?
Answer: A firm's ability to reconfigure its resource base in response to rapid
technological change
Dynamic capabilities refer to a firm's capacity to integrate, build, and reconfigure
internal and external competencies to address rapidly changing environments. This is
distinct from mere resource possession (B) or operational efficiency (C). Brand equity
(D) is a static asset, not a capability.
6. A company is facing a major ethical scandal. Which leadership approach would
be most effective in restoring stakeholder trust and driving cultural change?
Answer: Transformational leadership that articulates a new vision and models
ethical behavior
Transformational leadership focuses on changing the organizational culture by aligning
values, articulating a compelling vision, and acting as a role model. This is crucial for
ethical turnarounds. Transactional leadership (B) maintains the status quo, laissez-faire
(C) lacks guidance, and charismatic leadership (D) may not ensure institutionalized
change.
Page 3
, 7. In the context of corporate governance, which of the following scenarios
represents the most severe agency problem?
Answer: A firm has a dual-class share structure where founders retain majority
voting power
Dual-class structures can entrench founders and allow them to pursue private benefits
at the expense of public shareholders, creating severe agency problems. Short-term
incentives (A) are problematic but can be mitigated. Independent boards (B) and active
monitoring (C) reduce agency problems.
8. A firm's strategy relies on being a 'first mover' in emerging markets. According to
the resource-based view, which condition is necessary for this strategy to yield a
sustained competitive advantage?
Answer: The firm's pioneering advantage must be causally ambiguous and socially
complex
For a first-mover advantage to be sustained, the underlying resources and capabilities
must be hard to imitate. Causal ambiguity and social complexity are isolating
mechanisms. Cost advantages (B) can erode, patents (C) expire, and financial resources
(D) are often imitable.
9. A company is considering entering a new market using a strategic alliance. Which
of the following governance structures is most likely to minimize the risk of
opportunistic behavior by the partner?
Answer: A joint venture with shared equity ownership
Joint ventures create mutual hostages and align incentives through shared equity,
reducing the likelihood of opportunism. Non-equity contracts (B) are difficult to enforce
in some contexts. Licensing (C) and supply agreements (D) have weaker monitoring and
alignment mechanisms.
10. A company's board is composed of a majority of inside directors. Which of the
following is the most likely consequence for strategic decision-making?
Answer: Greater access to firm-specific information, improving decision quality
Inside directors have deep knowledge of the firm's operations, which can inform
strategic decisions. However, they are less independent, which may reduce oversight (A,
D). They may also be more subject to CEO influence, potentially increasing agency
problems (C).
Page 4
2026 Update | 100% Correct - LSUS. - 100 Questions and
Answers Already Graded A+ Premium Exam Tested And
Verified
Subject Area MBA 701 - Strategic Management and Leadership
Description This exam assesses advanced concepts in strategic management, leadership
theory, organizational behavior, and decision-making, with a focus on application
to complex business scenarios. It covers modules on competitive strategy,
corporate governance, change management, and ethical leadership, emphasizing
synthesis and critical evaluation.
Expected Grade A+
Total Questions 100
Duration 3 hours
Learning Outcomes 1. Analyze competitive dynamics using Porter's Five Forces and game theory.
2. Evaluate corporate governance structures and their impact on firm performance.
3. Apply transformational and transactional leadership models to organizational
challenges.
4. Assess the role of organizational culture in strategy implementation.
5. Synthesize ethical frameworks to resolve strategic dilemmas.
Accreditation Louisiana State University Shreveport (LSUS), accredited by the Association to
Advance Collegiate Schools of Business (AACSB).
Page 1
,1. In a rapidly consolidating industry, a firm's profitability is eroding due to intense
price competition. Which strategic move would most effectively mitigate the threat
of rivalry while simultaneously raising entry barriers?
Answer: Implementing a cost-leadership strategy by investing in scale-efficient
plants
Cost leadership through scale economies creates a cost advantage that deters new
entrants (who cannot match prices) and allows the firm to withstand price wars better
than rivals. Differentiation (B) may reduce rivalry but does not directly raise entry
barriers. Vertical integration (C) can raise entry barriers but is less directly aimed at
price rivalry. Strategic alliances (D) are often illegal or unstable.
2. A CEO must decide whether to invest in a new technology that could disrupt the
firm's existing product line. Using real options reasoning, which of the following
approaches best captures the strategic value of the investment?
Answer: Treat the investment as a call option that allows the firm to scale up if the
technology proves viable
Real options reasoning recognizes that an initial investment creates future strategic
opportunities (e.g., to expand, abandon, or defer), which can be valued like financial
options. NPV (A) ignores managerial flexibility. Payback (C) and WACC (D) are
standard financial tools but do not capture the value of strategic flexibility.
3. In a hostile takeover attempt, the target firm's board adopts a poison pill that
would dilute the acquirer's stake if it exceeds 15% ownership. Which of the
following is the most likely primary effect of this defense on shareholder value?
Answer: It decreases shareholder value by entrenching management and deterring
beneficial takeovers
Poison pills often entrench management by making takeovers prohibitively expensive,
which can reduce shareholder value by preventing value-creating acquisitions. While
some argue they strengthen bargaining position (D), empirical evidence suggests a net
negative effect. The other options are less supported.
Page 2
,4. A multinational corporation is expanding into a country with a high degree of
political instability. According to institutional theory, which strategy would most
effectively enhance the firm's legitimacy and reduce the liability of foreignness?
Answer: Partnering with a local firm that has strong government connections
Institutional theory emphasizes aligning with local norms, rules, and networks. A local
partner provides legitimacy and access to political connections, reducing the liability of
foreignness. Wholly-owned subsidiaries (B) may lack local embeddedness.
Standardization (C) may clash with local expectations. Short-term extraction (D)
undermines legitimacy.
5. Which of the following best illustrates the concept of 'dynamic capabilities' as a
source of sustained competitive advantage?
Answer: A firm's ability to reconfigure its resource base in response to rapid
technological change
Dynamic capabilities refer to a firm's capacity to integrate, build, and reconfigure
internal and external competencies to address rapidly changing environments. This is
distinct from mere resource possession (B) or operational efficiency (C). Brand equity
(D) is a static asset, not a capability.
6. A company is facing a major ethical scandal. Which leadership approach would
be most effective in restoring stakeholder trust and driving cultural change?
Answer: Transformational leadership that articulates a new vision and models
ethical behavior
Transformational leadership focuses on changing the organizational culture by aligning
values, articulating a compelling vision, and acting as a role model. This is crucial for
ethical turnarounds. Transactional leadership (B) maintains the status quo, laissez-faire
(C) lacks guidance, and charismatic leadership (D) may not ensure institutionalized
change.
Page 3
, 7. In the context of corporate governance, which of the following scenarios
represents the most severe agency problem?
Answer: A firm has a dual-class share structure where founders retain majority
voting power
Dual-class structures can entrench founders and allow them to pursue private benefits
at the expense of public shareholders, creating severe agency problems. Short-term
incentives (A) are problematic but can be mitigated. Independent boards (B) and active
monitoring (C) reduce agency problems.
8. A firm's strategy relies on being a 'first mover' in emerging markets. According to
the resource-based view, which condition is necessary for this strategy to yield a
sustained competitive advantage?
Answer: The firm's pioneering advantage must be causally ambiguous and socially
complex
For a first-mover advantage to be sustained, the underlying resources and capabilities
must be hard to imitate. Causal ambiguity and social complexity are isolating
mechanisms. Cost advantages (B) can erode, patents (C) expire, and financial resources
(D) are often imitable.
9. A company is considering entering a new market using a strategic alliance. Which
of the following governance structures is most likely to minimize the risk of
opportunistic behavior by the partner?
Answer: A joint venture with shared equity ownership
Joint ventures create mutual hostages and align incentives through shared equity,
reducing the likelihood of opportunism. Non-equity contracts (B) are difficult to enforce
in some contexts. Licensing (C) and supply agreements (D) have weaker monitoring and
alignment mechanisms.
10. A company's board is composed of a majority of inside directors. Which of the
following is the most likely consequence for strategic decision-making?
Answer: Greater access to firm-specific information, improving decision quality
Inside directors have deep knowledge of the firm's operations, which can inform
strategic decisions. However, they are less independent, which may reduce oversight (A,
D). They may also be more subject to CEO influence, potentially increasing agency
problems (C).
Page 4
