Exam 2 Practice

The CEO and his top managers have asked themselves two important questions: (a) do customers value what the company is providing?; and (b) can the company make money doing that? This group is developing a ________.

• Strategy

• Competitive advantage

• Business model

• BCG matrix

Defining the organizational mission forces managers to identify what ________.

• Its competitive advantage is

• The organization is in business to do

• Its capabilities are

• Pending legislation will affect the organization

Computer peripherals provider Ascent plans to enter a new market in another country. Which one of the following represents a threat for Ascent?

• Ascent's profit margin in the previous year was its lowest on record and it will require long-term planning to improve margins.

• Ascent lacks the resources to enter the market on its own and has to find a partner in the new market.

• Ascent will have to plan its entry carefully as the laws in the country do not favor foreign businesses.

• Ascent needs to improve its service capabilities in the new country as this is an important source of revenue.

Heavy investment in ________ will help take advantage of the market's growth and help maintain high market share.

• Cash cows

• Stars

• Question marks

• Dogs

When the price of beef skyrockets, consumers switch to pork and chicken. This demonstrates ________.

• The threat of new entrants

• The threat of substitutes

• The bargaining power of buyers

• The bargaining power of suppliers

What is a strategic disadvantage of being a first mover?

• Least opportunity to build customer loyalty

• Risk of competitors imitating innovations

• No cost and learning benefit

• No control over resources

Which of the following statements accurately defines work specialization?

• It is the basis of grouping jobs together.

• Individual employees specialize in doing part of an activity rather than the entire activity.

• It is the line of authority extending from upper organizational levels to the lower levels.

• It clarifies who reports to whom.

________ departmentalization is based on the product or customer flow through the organization.

• Functional

• Product

• Customer

• Process

Melanie has noticed that everyone is very concerned about the line of authority within the hospital. This implies that the employees at the hospital are worried about the ________.

• unity of command

• chain of command

• span of control

• departmentalization

Which of the following is a characteristic of an organic organization?

• High specialization.

• Cross-functional teams.

• Rigid departmentalization.

• Narrow span of controls