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Question
A major conflict of interest between top executives and owners, is that top executives wish to diversify the firm in order to ____, whereas owners wish to diversify the firm to ____.
a. generate free cash flows; reduce the risk of total firm failure
b. increase the price of the firm's stock; increase the dividends paid out from free cash flows
c. reduce the risk of total firm failure; reduce their total portfolio risk
d. reduce their employment risk; increase the company's value
Answer
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Related questions
Q:
For 15 years, Edward was a compensation specialist at a mid-sized firm. He was laid off when the firm experienced financial setbacks. Edward has decided to open his own business as a compensation consultant to small firms. He can expect that his main source of human capital will be a bank line of credit.
a. True
b. False
Q:
A cost leadership strategy targets the industry's ____ customers.
a. most typical
b. poorest
c. least educated
d. most frugal
Q:
Before the firm decides what products to offer and what benefits and features they will have, the firm must decide all the following questions EXCEPT:
a. who the firm should serve.
b. when the customer's needs should be satisfied.
c. what needs the firm should satisfy.
d. what core competencies are needed to satisfy customer needs.
Q:
At Southwest Airlines, the complex interrelationship between its culture and human capital adds value for customers in ways that other airlines cannot, such as jokes on flights by flight attendants and cooperation between gate personnel and pilots.
a. True
b. False
Q:
Capabilities of an organization emerge spontaneously through the interaction of tangible and intangible resources.
a. True
b. False
Q:
Valuable capabilities allow the firm to exploit strengths or neutralize weaknesses in the internal environment.
a. True
b. False
Q:
The Renault Nissan alliance (Chapter 9 Mini Case) is an example of a _______ created to gain economies of scope by sharing resources and capabilities.
a. diversifying strategic alliance
b. vertical complementary alliance
c. synergistic strategic alliance
d. nonequity-based horizontal complementary alliance
Q:
To increase the likelihood of success between partners assuming that trust exists, ____ approach(es) should be used to manage cooperative strategies.
a. the cost minimization
b. the opportunity maximization
c. both the cost minimization and opportunity maximization
d. None of the these options are correct.
Q:
Reduction of competition can be accomplished through all of the following EXCEPT:
a. predatory alliances.
b. explicit collusion.
c. tacit collusion.
d. mutual forbearance.
Q:
Research in the airline industry suggests that tacit collusion reduces service quality and on-time performance.
a. True
b. False
Q:
Nonequity strategic alliances are formed when one partner owns a much larger (or inequitable) share of the joint venture than do the remaining partner(s).
a. True
b. False
Q:
Acquisitions are the most common cooperative strategy used in standard-cycle markets.
a. True
b. False
Q:
A global corporate-level strategy differs from a multi-domestic corporate-level strategy in that in a global strategy:
a. competitive strategy is dictated by the home office.
b. competitive strategy is decentralized and controlled by individual strategic business units.
c. products are customized to meet the individual needs of each country.
d. the firm sells in multiple countries.
Q:
A fundamental reason for a country's development of advanced and specialized factors of production is often its:
a. lack of basic resources.
b. monetary wealth.
c. small workforce.
d. protective tariffs.
Q:
A large domestic market can provide the country's industries a chance at dominating the world market because:
a. they have been able to develop economies of scale at home.
b. they have access to abundant and inexpensive factors of production.
c. the related and supporting industries will have been developed.
d. the nation's culture and educational system will be adapted to producing the labor force needed for the industry.
Q:
A multi-domestic corporate-level strategy has ____ need for global integration and ____ need for local market responsiveness.
a. low; low
b. low; high
c. high; low
d. high; high
Q:
Factors of production in Porter's model of international competitive advantage include all of the following EXCEPT:
a. labor.
b. capital.
c. infrastructure.
d. technology.
Q:
Monahegan Plasma Company is facing a performance downturn and realizes that a major rethinking of its strategy is in order. Under these circumstances, Monahegan Plasma would benefit from a(n):
a. internal CEO with short tenure.
b. external CEO with a heterogeneous top management team.
c. dual CEO/chairperson with a homogenous top management team.
d. CEO with long tenure who has a strong sense of hubris.
Q:
Which of the following is NOT one of the five dimensions thought to characterize an employee's entrepreneurial mind-set?
a. Autonomy
b. Reactivity
c. Risk taking
d. Innovativeness
Q:
The more heterogeneous and the larger the top management team, the easier it is to implement strategy effectively.
a. True
b. False
Q:
When a new CEO is selected from outside the firm, a change of strategy is likely, especially if the top management team is homogenous and highly cohesive.
a. True
b. False
Q:
The training of future strategic leaders yields a competitive advantage for a firm, in part because knowledge and skills are necessary for successful execution of strategy.
a. True
b. False
Q:
Members with substantive expertise in the firm's core functions and businesses aid the effectiveness of the top management team.
a. True
b. False
Q:
The balanced scorecard's perspective on learning and growth is intended to improve the firm's ability to innovate.
a. True
b. False
Q:
Effectively managing the firm's resource portfolio (financial, human, social, and organizational capital) may be the most important strategic leadership task.
a. True
b. False
Q:
The most critical ability of a strategic leader is the ability to attract and then manage human capital.
a. True
b. False
Q:
In the past, companies had a preference for insiders to fill top-level management positions because of the desire for continuity and a continuing commitment to the firm's current vision, mission, and chosen strategies.
a. True
b. False
Q:
Transformational leadership is the most effective strategic leadership style.
a. True
b. False
Q:
What is organizational culture? What must strategic leaders do to develop and sustain an effective organizational culture?
Q:
Define the three major dimensions of organizational structure: specialization, centralization, and formalization. How do these dimensions vary in organizations implementing the cost leadership, differentiation, and cost leadership/differentiation strategies?