Global strategic management Exam Questions with Correct Answers
a typical "one size fits all" strategy remains the most effective for firms "going global" - Answers
false;multinational enterprises rarely engage in foreign direct investment - Answers false;in the
global economic pyramid, the top tier includes the 2 billion people whose annual per capita
income is greater that $20,000 - Answers false (should be 1 billion);if a strategy is truly
successful, it will work not just for one firm but for all other firms as well - Answers false;the
concept of strategy as integration means that strategy is a combination of planned deliberate
actions and unplanned emergent activities - Answers true;the institution based view argues that
institutional forces provide an answer to similarities in firm performance but not differences -
Answers false (accounts for differences in firm strategy);although global strategy is associated
with business, the term globalization means the close integration of countries and people of the
world - Answers true;during the second half of the 20th century, when Hong Kong, Singapore,
South Korea and Taiwan refused to participate in the global economy they became known as
the "4 ToothlessTigers" - Answers False (they did participate in the global economy and were
known as the 4 Tigers);determining the scope of the firm involves not only growth of the firm
but also contraction - Answers true;the text stresses that realism indicates that all companies
should go global and endeavor to do so as quickly as possible in view of the vast opportunities
that exist - Answers false;the resource-based views suggests that firm-specific capabilities do
not drive performance differences - Answers true;the industry-based views claims that the
degree of competitiveness within the industry largely determines firm performance - Answers
false;the notion of strategy as one size fits all: - Answers fails to adequately accommodate
firms in emerging markets;when looking at the global economy as a pyramid, MNEs - Answers
traditionally believed that no money was to be made at the bottom of the pyramid (because
these are the lowest income group; however it is a mistake to overlook them and can lead to
competitive challenges);GE developed a portable electrocardiograph machine originally for
doctors in India and China that is not being sold in the US at a significantly lower price. This is
an example of: - Answers reverse innovation;substantial switching costs reduce the threat of
potential entry - Answers true;threat of substitutes is greater is switching costs are lower -
Answers true;core features of the fiver forces model remain remarkably insightful when
analyzing old industries but not new phenomenon, such as e-commerce - Answers
false;industrial organization economics is a branch of economics that seeks to better
understand how firms within an industry may be both centralized and regulated - Answers false
(realistic branch of economics; structure-conduct-performance model; goal is NOT to help firms
compete);primary contribution of IO (industrial organization economics) is structure-conduct-
performance model - Answers true;key proposition of five forces framework is that industry
structure is unrelated to firm performance and the strength of the 5 forces - Answers false;key
indicator of intense rivalry is low cost competitive actions and reactions - Answers false;high
exit costs from an industry tend to reduce intensity of a rivalry - Answers false;product
proliferation is a potential strategy used to reduce the treat of potential entry - Answers true;if
there are many buyers but only a few sellers, buyers tend to have the most bargaining power -
Answers false;if there are many sellers but only few buyers, sellers tend to have the most
, bargaining power - Answers false;choosing to perform activities differently from rivals or
perform different activities than competitors is the essence of the Three Generic Strategy -
Answers true;intel held numerous patents for semiconductors, allowing them to hold a
significant share of the world market. These patents were a significant barrier to entry for other
firms wanting to enter the semiconductor business. - Answers true;which of the following tends
to reduce the intensity of rivalry? - Answers new capacity can be added in small increments;by
finding a way to reduce per-unit costs of their products, a firm enjoys non-scale-based
advantages that provide greater profitability - Answers false;intangible resources and
capabilities are assets that are more easily quantified - Answers false;most goods and services
are produced through a chain of vertical activities that add value - Answers true;tightly bundled
resources/capabilities may be a disadvantage in high velocity environments - Answers true;IMB
is example of how capabilities may cease to add value and instead become core rigidities -
Answers true;the terms outsourcing and offshoring are: - Answers closely related but not
identical in meaning;managers who are involved in value chain analysis - Answers assess their
firms' resources and capabilities at a micro, activity-based level;which view of strategy focuses
on how individual firms differ from each other in one industry? - Answers resource-based view;a
firm's _______ are its tangible and intangible assets a firm uses to choose and implement its
strategy - Answers resources;a common mistake when evaluating a firm's capabilities is failing
to assess them relative to the capabilities are the firms rivals - Answers true;one of the most
valuable and organizationally complex resources that is difficult for other firms to imitate is
tacit knowledge within a given firm - Answers true;causal ambiguity is the hallmark of many
industries with ambiguous industry structure and blurred boundaries - Answers false;resource-
based studies of firm performance need to describe the measurement of firm specific factors
such as organizational learning, knowledge management, and managerial talent - Answers
true;in markets where high quality in a product is expected, providing that level of quality
provides little advantage, and at best could be considered competitive parity - Answers true;the
performance of a firm is not altered negatively or positively by non-value adding assets -
Answers false;a fundamental question in value chain analysis is whether a firms resources and
capabilities add value - Answers true;relational contracting is not advantageous when the size
of the economy is limited - Answers false;formal, market-supporting institutions lower
transaction costs and facilitate new entries - Answers true;ethics are universal. what is unethical
in one country will be unethical in other countries. - Answers false;richer, developed countries
tend to be less corrupt than poorer, developing countries - Answers false;how do institutions
reduce uncertainty - Answers arms length transaction (with third party enforcement);Company A
purchases its supplies directly from a foreign company. Because of the distance between the
two companies the transaction is considered an arms-length transaction. - Answers false (need
more info);in Porter's diamond model, factor endowments include such components as firm
strategy and inter-firm rivalry - Answers false (natural and human resources);strategic choices
are direct outcomes of the reduced interaction between institutions and firms - Answers
false;when speaking of culture, it is important to acknowledge that cultures include many
regional, ethical, and religious layers - Answers true;Hofstede proposed 5 dimensions of culture,
which included power distance and uncertainty avoidance - Answers true;Australia, considered
a typical "one size fits all" strategy remains the most effective for firms "going global" - Answers
false;multinational enterprises rarely engage in foreign direct investment - Answers false;in the
global economic pyramid, the top tier includes the 2 billion people whose annual per capita
income is greater that $20,000 - Answers false (should be 1 billion);if a strategy is truly
successful, it will work not just for one firm but for all other firms as well - Answers false;the
concept of strategy as integration means that strategy is a combination of planned deliberate
actions and unplanned emergent activities - Answers true;the institution based view argues that
institutional forces provide an answer to similarities in firm performance but not differences -
Answers false (accounts for differences in firm strategy);although global strategy is associated
with business, the term globalization means the close integration of countries and people of the
world - Answers true;during the second half of the 20th century, when Hong Kong, Singapore,
South Korea and Taiwan refused to participate in the global economy they became known as
the "4 ToothlessTigers" - Answers False (they did participate in the global economy and were
known as the 4 Tigers);determining the scope of the firm involves not only growth of the firm
but also contraction - Answers true;the text stresses that realism indicates that all companies
should go global and endeavor to do so as quickly as possible in view of the vast opportunities
that exist - Answers false;the resource-based views suggests that firm-specific capabilities do
not drive performance differences - Answers true;the industry-based views claims that the
degree of competitiveness within the industry largely determines firm performance - Answers
false;the notion of strategy as one size fits all: - Answers fails to adequately accommodate
firms in emerging markets;when looking at the global economy as a pyramid, MNEs - Answers
traditionally believed that no money was to be made at the bottom of the pyramid (because
these are the lowest income group; however it is a mistake to overlook them and can lead to
competitive challenges);GE developed a portable electrocardiograph machine originally for
doctors in India and China that is not being sold in the US at a significantly lower price. This is
an example of: - Answers reverse innovation;substantial switching costs reduce the threat of
potential entry - Answers true;threat of substitutes is greater is switching costs are lower -
Answers true;core features of the fiver forces model remain remarkably insightful when
analyzing old industries but not new phenomenon, such as e-commerce - Answers
false;industrial organization economics is a branch of economics that seeks to better
understand how firms within an industry may be both centralized and regulated - Answers false
(realistic branch of economics; structure-conduct-performance model; goal is NOT to help firms
compete);primary contribution of IO (industrial organization economics) is structure-conduct-
performance model - Answers true;key proposition of five forces framework is that industry
structure is unrelated to firm performance and the strength of the 5 forces - Answers false;key
indicator of intense rivalry is low cost competitive actions and reactions - Answers false;high
exit costs from an industry tend to reduce intensity of a rivalry - Answers false;product
proliferation is a potential strategy used to reduce the treat of potential entry - Answers true;if
there are many buyers but only a few sellers, buyers tend to have the most bargaining power -
Answers false;if there are many sellers but only few buyers, sellers tend to have the most
, bargaining power - Answers false;choosing to perform activities differently from rivals or
perform different activities than competitors is the essence of the Three Generic Strategy -
Answers true;intel held numerous patents for semiconductors, allowing them to hold a
significant share of the world market. These patents were a significant barrier to entry for other
firms wanting to enter the semiconductor business. - Answers true;which of the following tends
to reduce the intensity of rivalry? - Answers new capacity can be added in small increments;by
finding a way to reduce per-unit costs of their products, a firm enjoys non-scale-based
advantages that provide greater profitability - Answers false;intangible resources and
capabilities are assets that are more easily quantified - Answers false;most goods and services
are produced through a chain of vertical activities that add value - Answers true;tightly bundled
resources/capabilities may be a disadvantage in high velocity environments - Answers true;IMB
is example of how capabilities may cease to add value and instead become core rigidities -
Answers true;the terms outsourcing and offshoring are: - Answers closely related but not
identical in meaning;managers who are involved in value chain analysis - Answers assess their
firms' resources and capabilities at a micro, activity-based level;which view of strategy focuses
on how individual firms differ from each other in one industry? - Answers resource-based view;a
firm's _______ are its tangible and intangible assets a firm uses to choose and implement its
strategy - Answers resources;a common mistake when evaluating a firm's capabilities is failing
to assess them relative to the capabilities are the firms rivals - Answers true;one of the most
valuable and organizationally complex resources that is difficult for other firms to imitate is
tacit knowledge within a given firm - Answers true;causal ambiguity is the hallmark of many
industries with ambiguous industry structure and blurred boundaries - Answers false;resource-
based studies of firm performance need to describe the measurement of firm specific factors
such as organizational learning, knowledge management, and managerial talent - Answers
true;in markets where high quality in a product is expected, providing that level of quality
provides little advantage, and at best could be considered competitive parity - Answers true;the
performance of a firm is not altered negatively or positively by non-value adding assets -
Answers false;a fundamental question in value chain analysis is whether a firms resources and
capabilities add value - Answers true;relational contracting is not advantageous when the size
of the economy is limited - Answers false;formal, market-supporting institutions lower
transaction costs and facilitate new entries - Answers true;ethics are universal. what is unethical
in one country will be unethical in other countries. - Answers false;richer, developed countries
tend to be less corrupt than poorer, developing countries - Answers false;how do institutions
reduce uncertainty - Answers arms length transaction (with third party enforcement);Company A
purchases its supplies directly from a foreign company. Because of the distance between the
two companies the transaction is considered an arms-length transaction. - Answers false (need
more info);in Porter's diamond model, factor endowments include such components as firm
strategy and inter-firm rivalry - Answers false (natural and human resources);strategic choices
are direct outcomes of the reduced interaction between institutions and firms - Answers
false;when speaking of culture, it is important to acknowledge that cultures include many
regional, ethical, and religious layers - Answers true;Hofstede proposed 5 dimensions of culture,
which included power distance and uncertainty avoidance - Answers true;Australia, considered
