Question: A key issue in companies pursuing an unrelated diversification strategy is A How wide a net to cast in building a portfolio of unrelated businessesB Whether to keep or divest businesses whose technological approaches do not match the overall technology and R&D strategy of the corporationC How quickly to divest businesses whose competitive strategies do not closely match the competitive strategies of sister businessesD Whether to build shareholder value via paying higher dividends or via actions aimed at increasing the company’s stock priceE Whether to acquire new businesses that offer potential for achieving greater economies of scope or businesses that offer potential for achieving greater economies of scale
Question: In which of the following instances is retrenching to a narrower diversification base not likely to be an attractive or advisable strategy for a diversified company? A When a diversified company has struggled to make certain businesses attractively profitableB When a diversified company has too many cash cowsC When one or more businesses are cash hogs with questionable long-term potentialD When businesses in once-attractive industries have badly deterioratedE When a diversified company has businesses that have little or no strategic or resource fits with the core businesses that management wishes to concentrate on
Question: Which one of the following statements about recruiting and retaining capable employees is false? A The quality of an organization’s people is always an essential ingredient of successful strategy executionB Recruiting and retaining capable employees is a particularly important organization-building task in enterprises where superior intellectual capital is a key resource and also a basis for competitive advantageC Recruiting and retaining capable employees is usually much more important to good strategy execution and the achievement of true operating excellence than is assembling a capable top management teamD It is very difficult for a company to competently execute its strategy and achieve operating excellence without a large band of capable employees who are actively engaged in the process of making ongoing operating improvementsE In many industries, adding to a company’s talent base and building intellectual capital is more important to good strategy execution than additional investments in plants, equipment, and capital projects
Question: Calculating quantitative competitive strength ratings for each of a diversified company’s business units involves A Determining each industry’s key success factors, rating the ability of each business to be successful on each industry KSF, and adding the individual ratings to obtain overall measures of each business’s ability to compete successfullyB Identifying the competitive forces facing each business, rating the strength of these competitive forces industry-by-industry, and then ranking each business’s ability to be profitable, given the strength of the competition it facesC Selecting a set of competitive strength measures, weighting the importance of each measure, rating each business on each strength measure, multiplying the strength ratings by the assigned weight to obtain a weighted rating, adding the weighted ratings for each business unit to obtain an overall competitive strength score, and using the overall competitive strength scores to evaluate the competitive strength of all the businesses, both individually and as a groupD Determining which businesses possess good strategic fit with other businesses, identifying the portion of the value chain where this fit occurs, and evaluating the strength of the competitive advantage attached to each of the strategic fits to get an overall measure of competitive advantage potential – businesses with the highest/lowest competitive advantage potential have the most/least competitive strengthE Rating the caliber of each businesses strategic and resource fits, weighting the importance of each type of strategic/resource fit, calculating weighted strategic/resource fit scores, and adding the weighted ratings for each business to obtain an overall strength score for each business unit that indicates whether the company has adequate strategic/resource fits to be a strong market contender in each of the industries where it competes
Question: Which of the following is a diversified business with one major core business and a collection of small related or unrelated businesses? A Broadly Diversified EnterpriseB Narrowly Diversified EnterpriseC Multi-business EnterpriseD High-Compensation/Low-risk EnterpriseE Dominant Business Enterprise
Question: Which of the following are traits of the capability-building process? A Evolving changes in customer needs and competitive conditions often require tweaking and adjusting a company’s portfolio of competencies and intellectual capital to keep its capabilities freshly honed and on the cutting edgeB Normally, a core competence or capability emerges incrementally out of company efforts either to bolster skills that contributed to earlier successes or to respond to customer problems, new technological and market opportunities, and the competitive maneuverings of rivalsC Core competencies or capabilities are most often bundles of skills and know-how that grow out of the combined efforts of cross-functional workgroups and departments performing complementary activities at different locations in a firm’s value chainD The key to leveraging a core competence into a distinctive competence (or transforming a capability into a competitively superior capability) is concentrating more effort and talent than rivals on deepening and strengthening the competence or capability so as to achieve the dominance needed for competitive advantageE All of these
Question: The strategic importance of deliberately trying to develop organizational competencies and capabilities is A Lower cost for employee trainingB Improved strategy execution and a potential for competitive advantageC Increased ability to reduce total operating costsD The added ease with which strategic fit and resource fit benefits can be capturedE Enhanced ability to avoid the perils of outsourcing
Question: While ultimate responsibility for implementing and executing strategy falls upon the shoulders of senior executives A Top-level managers still have to rely on the active support and cooperation of middle and lower-level managers in pushing needed changes in functional areas and operating unitsB The pivotal and most decisive strategy-implementing actions are carried out by front-line supervisors who have day-to-day responsibility for seeing that key activities are done properlyC It is a company’s employees who most determine whether the drive for good strategy execution will succeed or failD The success or failure of the implementation/execution effort hinges chiefly on doing an effective job of empowering employees to make day-to-day operating decisions that support good strategy executionE The success or failure of the implementation/execution effort hinges chiefly on a company’s reward system and whether its policies and procedures are strategy supportive
Question: In companies where intellectual capital is crucial to good strategy execution, which of the following is generally not among the practices that companies use to establish a talented knowledge base? A Providing promising employees with challenging, interesting, and skill-stretching assignments and also rotating them through jobs that not only have great content but also span functional and geographic boundariesB Expecting employees to take full responsibility for staying up to date, thereby minimizing the need to train or retrain employeesC Coaching average performers to improve their skills and capabilities, while weeding out underperformers and benchwarmersD Encouraging employees to challenge existing ways of doing things, to be creative and innovative in proposing better ways of operating, and to push their ideas for new products or businessesE Fostering a stimulating and engaging work environment such that employees will consider the company a great place to work
Question: As a rule, all the industries represented in a diversified company’s business portfolio should be judged on such attractiveness factors as A Market size and projected growth rateB Emerging opportunities and threats, the intensity of competition, and the degree of industry uncertainty and business riskC Resource requirements and the presence of cross-industry strategic fitsD Seasonal and cyclical factors, industry profitability, and whether an industry has significant social, political, regulatory, and environmental problemsE All of these