Business Policy
Exam Answer Key
Course Introduction
Business Policy is a strategic management course that explores the formulation, implementation, and evaluation of organizational policies and strategies. It examines how firms establish objectives, analyze internal and external environments, and make critical decisions to achieve long-term success and competitive advantage. The course integrates knowledge from various business disciplines, emphasizing case studies, analytical models, and real-world applications to develop problem-solving, leadership, and decision-making skills essential for effective management and governance in modern organizations.
Recommended Textbook
Crafting and Executing Strategy 19th Edition by Arthur A. Thompson
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12 Chapters
1405 Verified Questions
1405 Flashcards
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Page 2
Chapter 1: What Is Strategy and Why Is It Important
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70 Verified Questions
70 Flashcards
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Sample Questions
Q1) Which one of the following does NOT account for WHY a company's strategy evolves from one version to another?
A) A need to promote stability and retain the status quo.
B) The need to abandon some strategy elements that are no longer working well.
C) A need to respond to changing customer requirements and expectations.
D) A need to react to fresh strategic maneuvers on the part of rival firms.
E) The proactive efforts of company managers to improve this or that aspect of the strategy.
Answer: A
Q2) A company achieves a competitive advantage when:
A) it provides buyers with superior value compared to rival sellers or offers the same value at a lower cost.
B) it has a profitable business model.
C) it is able to maximize shareholder wealth.
D) it is consistently able to achieve both its strategic and financial objectives.
E) its strategy and its business model are well-matched and in sync.
Answer: A
Q3) Why is a company's strategy partly proactive and partly reactive?
Answer: No Answer
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Page 3
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) A company that pursues and achieves strategic objectives:
A) is likely to weaken the achievement of its short-term and long-term financial objectives.
B) believes that the company's financial performance is not as important as it really is.
C) is generally not strongly focused on its true mission of making a profit.
D) is frequently in a better position to improve its future financial performance because of the increased competitiveness that flows from the achievement of strategic objectives.
E) is likely to be a weak financial performer because diverting resources to the pursuit of strategic objectives takes away from the achievement of financial performance targets.
Answer: D
Q2) Explain why a company's strategy is really a collection of strategies.
Answer: No Answer
Q3) What are the five integrated tasks of the strategy-making,strategy-executing process,and what does each one involve?
Answer: No Answer
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Chapter 3: Evaluating a Companys External Environment
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143 Verified Questions
143 Flashcards
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Sample Questions
Q1) An industry contains one strategic group when all sellers:
A) are subject to the same driving forces.
B) are placing about the same emphasis on various distribution channels.
C) use the same key success factors to differentiate their products.
D) pursue essentially identical strategies and have similar market positions.
E) pursue varying distribution channels and product attributes,and where their customer service attributes differentiate them in the marketplace.
Answer: D
Q2) Buyer bargaining power is stronger when:
A) winning the business of certain high-profile customers offers a seller important market exposure or prestige.
B) the extent and importance of collaborative partnerships and alliances between particular sellers and buyers is credible.
C) buyers cannot integrate backward into the product market of sellers.
D) sellers' products are differentiated,making it easy and inexpensive for buyers to switch to competing brands.
E) the industry's products are standardized or undifferentiated.
Answer: E
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5
Chapter 4: Evaluating a Companys Resources, Capabilities, and Competitiveness
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171 Verified Questions
171 Flashcards
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Sample Questions
Q1) Which of the following is NOT an example of a threat to a company's future profitability and well-being?
A) The likely entry of potent new competitors
B) The lack of a well-known brand name with which to attract new customers and help retain existing customers
C) Shifts in buyer needs and tastes away from the industry's product
D) Costly new regulatory requirements
E) Growing bargaining power on the part of the company's major customers and major suppliers
Q2) Which of the following is NOT an example of a company's dynamic capability?
A) A capacity to improve existing resources and capabilities
B) Upgrades to R&D resources to drive product innovation
C) A capacity to add new resources and capabilities to the competitive asset portfolio
D) An ability to replace degraded resources with acquired capabilities
E) An ability to keep antiquated resources by disregarding innovative capabilities
Q3) What is benchmarking and why is it a strategically important analytical tool?
Q4) What are the three parameters of conducting a SWOT analysis?
Q5) Explain why a weighted competitive strength assessment is important.
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Chapter 5: The Five Generic Competitive Strategies: Which
One to Employ
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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) A company's biggest vulnerability in employing a best-cost provider strategy is:
A) relying too heavily on outsourcing.
B) getting squeezed between the strategies of firms employing low-cost provider strategies and high-end differentiation strategies.
C) getting trapped in a price war with low-cost leaders.
D) being timid in cutting its prices far enough below high-end differentiators to win away many of their customers.
E) not having a sustainable distinctive competence in cost reduction.
Q2) Opportunities to differentiate a company's product offering:
A) are most reliably found in the R&D portion of the value chain.
B) are typically located in the sales and marketing portion of the value chain.
C) can exist in activities all along an industry's value chain.
D) usually are tied to product quality and customer service.
E) are most frequently attached to a company's manufacturing expertise and to its ability to achieve scale economies in production.
Q3) What are the keys to sustaining a focused low-cost strategy?
Q4) What are the distinctive features of a best-cost provider strategy? Under what circumstances is a best-cost provider strategy appealing?
Page 7
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Chapter 6: Strengthening a Companys Competitive
Position: Strategic Moves, Timing, and Scope of Operations
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) An outsourcing strategy:
A) is nearly always a more attractive strategic option than merger and acquisition strategies.
B) carries the substantial risk of raising a company's costs.
C) carries the substantial risk of making a company overly dependent on its suppliers.
D) increases a company's risk exposure to changing technology and/or changing buyer preferences.
E) involves farming out certain value chain activities presently performed in-house to outside vendors.
Q2) The strategic impetus for forward vertical integration is to:
A) gain better access to end users and better market visibility.
B) achieve the same scale economies as wholesale distributors and/or retail dealers.
C) control price at the retail level.
D) bypass distributors and dealers and sell direct to consumers at the company's website.
E) build a core competence in mass merchandising.
Q3) What are the strategic disadvantages of a backward vertical integration strategy?
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Page 8
Chapter 7: Strategies for Competing in International Markets
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139 Verified Questions
139 Flashcards
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Sample Questions
Q1) What are the four things a company needs to consider or do if it is to make the most of strategic alliances with foreign partners?
Q2) For a company to create a home country advantage and become competitively strong in a foreign market,it should base its strategy around which of the following factors?
A) The proximity of suppliers,end users,and complementary industries.
B) Different styles of management and organization and the degree of local rivalry.
C) The availability and relative prices of inputs.
D) Demand conditions in the industry's home market,including size and growth potential and the nature of domestic buyers' needs and wants.
E) The level of rivalry existing in the foreign market.
Q3) Under what circumstances is it advantageous for a company competing in foreign markets to disperse certain value chain activities across many countries?
Q4) Under what circumstances is it advantageous for a company competing in foreign markets to concentrate its value chain activities in a select few locations?
Q5) Briefly identify the special features of competing in foreign markets.
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Chapter 8: Corporate Strategy: Diversification and the Multibusiness Company
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174 Verified Questions
174 Flashcards
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Sample Questions
Q1) The task of crafting a company's overall corporate strategy for a diversified company encompasses:
A) picking the new industries to enter and deciding on the means of entry.
B) initiating actions to boost the combined performance of the businesses the firm has entered.
C) pursuing opportunities to leverage cross-business value chain relationships and strategic fit into competitive advantage.
D) establishing investment priorities and steering corporate resources into the most attractive business units.
E) All of these.
Q2) Which of the following questions does not relate to the choice of how best to enter a new business?
A) Does the company have all of the resources and capabilities it requires to enter the business through internal development or is it lacking some critical resources?
B) Are there entry barriers to overcome?
C) Is speed an important factor in the firm's chances for successful entry?
D) How much money will the company make in the first year?
E) Which is the least costly mode of entry,given the company's objectives?
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Chapter 9: Ethics, corporate Social Responsibility, Environmental Sustainability, and Strategy
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90 Verified Questions
90 Flashcards
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Sample Questions
Q1) The school of ethical relativism holds that:
A) what constitutes ethical or unethical conduct varies according to the religious convictions of each society or each culture within a country.
B) when there are cross-country or cross-cultural differences in what is deemed fair or unfair,what constitutes proper regard for human rights,and what is considered ethical or unethical in business situations,it is appropriate for local moral standards to take precedence over what the ethical standards may be elsewhere.
C) concepts of right and wrong are always governed by business norms in each country,culture,or society.
D) concepts of right and wrong are always a function of each individual's own set of values,beliefs,and ethical convictions.
E) concepts of right and wrong as they apply to business behavior are always varying shades of gray,never absolute (that is,black or white).
Q2) Identify the three types of business costs of ethical failures.Provide examples for each type of cost.
Q3) What is the case for why business strategies should be ethical?
Q4) What is the difference between ethics and business ethics?
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Chapter 10: Building an Organization Capable of Good
Strategy Execution: People, Capabilities, and Structure
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105 Verified Questions
105 Flashcards
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Sample Questions
Q1) What makes the managerial task of executing strategy so challenging and demanding is:
A) the trial-and-error experimentation that is required to come up with a workable organizational structure.
B) the demanding people-management skills required,the resistance to change that has to be overcome,and the perseverance necessary to get a variety of initiatives launched and kept moving along.
C) the time and effort it takes to build core competencies.
D) the time,training,and creative effort it takes to empower employees and teach them responsible decision making.
E) the supervisory requirements associated with getting company personnel to do things the right way.
Q2) When it proves to be infeasible to outcompete rivals by crafting a superior strategy,the next best avenue to beating them out for industry leadership is to out execute them-that is,beat them with superior strategy execution.True or false? Explain.
Q3) A decentralized organizational structure is more likely to further the cause of good strategy execution than is a centralized organization structure.True or false? Justify your answer.
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Chapter 11: Managing Internal Operations: Actions That Promote
Good Strategy Execution
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88 Flashcards
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Sample Questions
Q1) Focusing jobholders' attention and energy on what to do as opposed to what to achieve makes the work environment results-oriented.True or false? Explain your answer.
Q2) Company strategies cannot be implemented or executed well without a number of real-time state-of-the-art support and control information systems to carry out business operations.Discuss the benefits and give examples of real-time systems by industry?
Q3) While Six Sigma programs often improve the efficiency of many operating activities and processes,there is evidence that innovation can be stifled by Six Sigma programs.True or false? Explain.
Q4) In creating a strategy-supportive reward structure,it is important to define jobs and assignments in terms of the results to be accomplished not just in terms of the duties to be performed.True or false? Explain and justify your answer.
Q5) Explain what Six Sigma quality control programs are all about and how their use can contribute to a company's strategy execution effort.
Q6) Identify and describe ways that policies and procedures facilitate strategy execution.
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Chapter 12: Corporate Culture and Leadership: Keys to Good Strategy Execution
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106 Verified Questions
106 Flashcards
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Sample Questions
Q1) Which of the following is NOT an integral part of transforming core values and ethical standards into cultural norms?
A) Instituting procedures for enforcing ethical standards.
B) Immediately dismissing any employee caught violating the company's code of ethics or disregarding core values.
C) Screening out job applicants who do not exhibit compatible character traits.
D) Periodically having ceremonial occasions to recognize individuals and groups who display the values and ethical principles.
E) Having senior executives frequently reiterate the importance and role of company values and ethical principles at company events and internal communications to employees.
Q2) Identify and briefly discuss the key features that can be used to describe the corporate culture of a company.
Q3) What are the benefits of a tight culture-strategy matchup?
Q4) What is the role of managerial leadership in changing a problem corporate culture?
Q5) Identify the two types of healthy cultures and briefly explain how healthy cultures can aid in good corporate strategy execution.
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