MGT 6890 - Final Exam (Quiz Questions and Complete Answers)

The story in the video describes how the CEO of Japan Airlines, Haruka Nishimatsu, serves as an example of: A) The way a strategic leader creates a formal strategic plan. B) Internal analysis of a company's assets and resources. C) Several of the characteristics of a high performing strategic leader. D) Establishing measurable goals for a company's success. - ANSWER C The decision to take less salary in a year when the company was less profitable and employees' pay was cut is an example of Nishimatsu's: A) illusion of control. B) dialectic inquiry. C) hubris. D) commitment. - ANSWER D The employees believe that their CEO is approachable and "feel close to him." The CEO is demonstrating: A) Illusion of control. B) Emotional intelligence. C) Being well informed. D) Reasoning by analogy. - ANSWER B Many of the things described in this video are leadership traits that strategic managers might aspire to, but they might also lead a manager astray. Identify which of these cognitive biases might come into play as a result of Nishimatsu's leadership style. A) Availability error B) Representativeness C) Devil's advocacy D) Escalating commitment - ANSWER B Nishimatsu's open-door policy, knocking down office walls, eating with employees in the cafeteria and meeting with managers who have ideas is: A) a process for developing the mission statement. B) a means for executing scenario planning with his top leadership team. C) a process for implementing a SWOT analysis, focusing on threats present in the industry. D) a way to decentralize planning or promote strategy as an emergent process within his organization. - ANSWER D T/F Cost reductions gained through mass-producing a standardized output are a source of scale economies. - ANSWER T T/F Deregulation of the mortgage industry is an example of how political and legal forces can impact an industry. - ANSWER T T/F Government deregulation of telephone service lowered the barriers to entry and lowered industry profit rates. - ANSWER T T/F Growing demand tends to reduce rivalry because all companies can sell more without taking market share away from each other. - ANSWER T T/F In Porter's competitive forces framework, the stronger the five forces, the ability of established companies to raise prices and earn greater profits becomes more limited. - ANSWER T Market segments are distinct groups of customers within a market that can be distinguished from each other based on their individual attributes and specific demands. - ANSWER T One of the defining characteristics of the mature stage of the industry life-cycle is that growth is low or zero. - ANSWER T Opportunities arise when a company can take advantage of conditions in its environment to formulate and implement strategies that allow it to become more profitable. - ANSWER T Rapid growth in demand enables companies to expand their revenues and profits without taking market share away from competitors. - ANSWER T Starbucks and an independent local café are different in terms of their business techniques. They both sell coffee, and therefore belong to the same strategic group. - ANSWER F Strong brand loyalty and high customer switching costs are low barriers to entering an industry. - ANSWER F Successful innovation cannot transform the nature of industry competition. - ANSWER F Suppliers are most powerful when the products that they sell have many substitutes. - ANSWER F The more commodity-like that an industry's product is, the lower the intensity of any price war that may develop. - ANSWER F The punctuated equilibrium view can be described as a freezing, but not unfreezing, process in an industry's life-cycle. - ANSWER F The risk of entry by potential competitors is a function of the height of the barriers to entry. - ANSWER T Threats arise when conditions in the external environment endanger the integrity and profitability of a company's business. - ANSWER T To determine its opportunities and threats, a firm should focus on internal processes and capabilities. - ANSWER F When buyers are in a weak bargaining position, companies in the industry must lower their prices to increase profits. - ANSWER F