BUS 401 FINAL EXAM QUESTIONS AND
ANSWERS COMPLETE AND VERIFIED
RATED A.
Flexibility refers to how costly it is for a firm to alter its strategic and
organizational decisions.
True
Flexibility is always valuable.
False
Flexibility is only valuable when the decision-making setting a firm is
facing is uncertain.
True
A decision-making setting is uncertain when the future value of an
exchange cannot be known when investments in that exchange are being
made.
True
A flexibility-based approach to vertical integration suggests that when the
decision-making setting regarding a business activity is highly uncertain,
firms should form a strategic alliance to enter this activity instead of
vertically integrating.
True
Outsourcing can help firms reduce costs and focus their efforts on those
business functions that are central to their competitive advantage.
True
Vertical integration is a type of
A) business strategy.
,B) generic strategy.
C) differentiation strategy.
D) corporate strategy.
D. corporate strategy
The number of steps in a firm's value chain that it accomplishes within its
boundaries describes the firm's level of
A) product differentiation.
B) diversification.
C) vertical integration.
D) competitive dynamics.
C. Vertical integration
When Apple, Inc. opened retail stores to sell its computers and iPods, this
was an example of
A) forward vertical integration.
B) backward vertical integration.
C) forward horizontal integration.
D) backward horizontal integration.
A. Forward vertical integration
If Dell computers were to open its own factory to manufacture the LCD
televisions it sells at its online store, this would be an example of
A) forward vertical integration.
B) product differentiation.
C) forward horizontal integration.
D) backward vertical integration.
D. backward vertical integration
________ exists when a firm is unfairly exploited in an exchange.
A) Competitive advantage
B) Business level strategy
C) Opportunism
D) Corporate level strategy
,C. Opportunism
A(n) ________ is any investment in an exchange that has significantly
more value in the current exchange than it does in alternative exchanges.
A) opportunity-specific investment
B) transaction-specific investment
C) competition-specific investment
D) opportunistic investment
B. transaction-specific investment
________ refers to how costly it is for a firm to alter its strategic and
organizational decisions.
A) Flexibility
B) Dynamic capability
C) Opportunism
D) Uncertainty
A. Flexibility
If a firm decided to maintain relationships with several different call center
management companies, each of which have adopted different
technological solutions to the problem of how to use call center employees
to assist customers who are using very complex products, to reduce the
uncertainty of whether the people staffing the phone can help the firm's
customers, this would be consistent with which explanation of vertical
integration?
A) Opportunism-based
B) Flexibility-based
C) Firm capabilities-based
D) Alliance-based
B. Flexibility based
If a computer company decided to open its own call centers to provide
technical support to its corporate customers because the employees in
these call centers need a significant level of in-depth training that was
highly specialized to the computer company's products, this would be
, consistent with which explanation of vertical integration?
A) Opportunism-based
B) Flexibility-based
C) Firm capabilities-based
D) Alliance-based
C. Firm capabilities based
Investments made by employees that have more value in a particular
company than in alternative companies are known as
A) firm-specific investments.
B) individual-specific investments.
C) group-specific investments.
D) corporate-specific investments.
A. firm specific investments
Firm-specific investments are a type of ________ investments.
A) operational
B) contingent
C) transaction-specific
D) horizontal
C. transaction-specific
If Digipics were to begin manufacturing lenses for the cameras they
assembled, this would be an example of
A) backward vertical integration.
B) a strategic alliance.
C) forward vertical integration.
D) opportunism.
A. backward vertical integration
If Digipics were to begin selling the cameras it assembled directly to
customers through a website operated by the company, this would be an
example of
A) backward vertical integration.
B) a strategic alliance.
ANSWERS COMPLETE AND VERIFIED
RATED A.
Flexibility refers to how costly it is for a firm to alter its strategic and
organizational decisions.
True
Flexibility is always valuable.
False
Flexibility is only valuable when the decision-making setting a firm is
facing is uncertain.
True
A decision-making setting is uncertain when the future value of an
exchange cannot be known when investments in that exchange are being
made.
True
A flexibility-based approach to vertical integration suggests that when the
decision-making setting regarding a business activity is highly uncertain,
firms should form a strategic alliance to enter this activity instead of
vertically integrating.
True
Outsourcing can help firms reduce costs and focus their efforts on those
business functions that are central to their competitive advantage.
True
Vertical integration is a type of
A) business strategy.
,B) generic strategy.
C) differentiation strategy.
D) corporate strategy.
D. corporate strategy
The number of steps in a firm's value chain that it accomplishes within its
boundaries describes the firm's level of
A) product differentiation.
B) diversification.
C) vertical integration.
D) competitive dynamics.
C. Vertical integration
When Apple, Inc. opened retail stores to sell its computers and iPods, this
was an example of
A) forward vertical integration.
B) backward vertical integration.
C) forward horizontal integration.
D) backward horizontal integration.
A. Forward vertical integration
If Dell computers were to open its own factory to manufacture the LCD
televisions it sells at its online store, this would be an example of
A) forward vertical integration.
B) product differentiation.
C) forward horizontal integration.
D) backward vertical integration.
D. backward vertical integration
________ exists when a firm is unfairly exploited in an exchange.
A) Competitive advantage
B) Business level strategy
C) Opportunism
D) Corporate level strategy
,C. Opportunism
A(n) ________ is any investment in an exchange that has significantly
more value in the current exchange than it does in alternative exchanges.
A) opportunity-specific investment
B) transaction-specific investment
C) competition-specific investment
D) opportunistic investment
B. transaction-specific investment
________ refers to how costly it is for a firm to alter its strategic and
organizational decisions.
A) Flexibility
B) Dynamic capability
C) Opportunism
D) Uncertainty
A. Flexibility
If a firm decided to maintain relationships with several different call center
management companies, each of which have adopted different
technological solutions to the problem of how to use call center employees
to assist customers who are using very complex products, to reduce the
uncertainty of whether the people staffing the phone can help the firm's
customers, this would be consistent with which explanation of vertical
integration?
A) Opportunism-based
B) Flexibility-based
C) Firm capabilities-based
D) Alliance-based
B. Flexibility based
If a computer company decided to open its own call centers to provide
technical support to its corporate customers because the employees in
these call centers need a significant level of in-depth training that was
highly specialized to the computer company's products, this would be
, consistent with which explanation of vertical integration?
A) Opportunism-based
B) Flexibility-based
C) Firm capabilities-based
D) Alliance-based
C. Firm capabilities based
Investments made by employees that have more value in a particular
company than in alternative companies are known as
A) firm-specific investments.
B) individual-specific investments.
C) group-specific investments.
D) corporate-specific investments.
A. firm specific investments
Firm-specific investments are a type of ________ investments.
A) operational
B) contingent
C) transaction-specific
D) horizontal
C. transaction-specific
If Digipics were to begin manufacturing lenses for the cameras they
assembled, this would be an example of
A) backward vertical integration.
B) a strategic alliance.
C) forward vertical integration.
D) opportunism.
A. backward vertical integration
If Digipics were to begin selling the cameras it assembled directly to
customers through a website operated by the company, this would be an
example of
A) backward vertical integration.
B) a strategic alliance.
