Entrepreneurship
Final Test Solutions
Course Introduction
This course explores the fundamentals of entrepreneurship, focusing on the process of turning innovative ideas into viable business ventures. Students will examine key topics such as opportunity recognition, business model development, market analysis, funding strategies, and the challenges faced by entrepreneurs in both startup and established environments. Through case studies, group projects, and interaction with successful entrepreneurs, the course offers practical insights and tools necessary for launching and managing new enterprises, fostering creative thinking and strategic decision-making skills essential for entrepreneurial success.
Recommended Textbook
Strategic Management 6th Edition by Graham Hubbard
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557 Flashcards
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Chapter 1: What Is Strategy
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Sample Questions
Q1) According to agency theory,organisational underperformance is due to excessive competition.
A)True
B)False
Answer: False
Q2) Which of the following is the most likely factor to be unique to each country and affects the opportunities available to organisations originating in that particular country?
A)Individual/national values
B)Limited capital markets
C)Central role of government
D)Small local markets
Answer: A
Q3) Cooperative strategy envisages groups of firms competing with one another.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Analysing Business Strategy: Creating Value
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Sample Questions
Q1) A mission statement is a statement that:
A)should be used instead of a vision statement
B)was always different from the vision statement
C)over time,became commonly focused on mundane matters
D)operationalises the vision statement for the current business situation
Answer: D
Q2) Hay and Williamson argued that for a strategy to be effectively understood and accepted:
A)the strategy should provide direction in the form of a worthwhile,relevant goal
B)it should help work teams see the leverage provided by the interaction of their own tasks and initiatives occurring elsewhere in the organisation
C)it can be used by shop stewards as guidance for trade-offs in collective bargaining deals
D)it facilitates communication by establishing a common language which everyone can use
Answer: D
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4
Chapter 3: Analysing the External Environment
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Sample Questions
Q1) In an industry,not all competitors compete directly with each other.Comment. Answer: In an industry,several different groups of competitors operate.These groups are called strategic groups because each group consists of competitors competing along similar strategic dimensions,such as product quality,range and geographic scope,whereas other organisations in the industry have either a different strategy or a different target product-market.For example,despite the existence of many major competitors,the global car industry may be split into at least four or five different strategic groups based on size and pricing/image dimensions,such as small prestige cars (Ferrari and Porsche),medium normal cars (Volkswagen,Toyota,Honda,Ford),small cheap cars (Kia,Subaru,Dihatsu)and medium to large prestige cars (Jaguar,Rolls Royce). Businesses generally stay within their own strategic groups due to various mobility barriers and they rarely compete with firms belonging to other strategic groups.For example,for many years in the airline industry large full-service carriers have lagged low-cost carriers in terms of profitability.Nonetheless,the inability to change various asset-based fixed costs (e.g.airport terminal costs),variable costs (e.g.labour rates and conditions)and service offerings (e.g.frequent flyer programs,airport lounges)has precluded full-service airlines from migrating to the low-cost model.
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Chapter 4: Analysing the External Environment
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Sample Questions
Q1) Strengths in the traditional SWOT analysis do not usually address the test of 'better than most competitors',which is a crucial test for competitive advantage.
A)True
B)False
Q2) How does the emergence of sustainability as a macro-environment issue affect the analysis of organisational capabilities?
Q3) Equivalent terms used by others and in practice for the word "capabilities" do not include the current terminology of:
A)Valuables
B)Competences
C)Skills
D)Resources
Q4) Why have some authors criticised the resources and capabilities focus of looking at an organisation over time?
Q5) Describe the links between resources,capabilities and strategic capabilities.
Q6) Capabilities exist only in the key departments of the organisation.
A)True
B)False
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Chapter 5: Measuring Strategic Organisation Performance
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Sample Questions
Q1) The 'total shareholder return' approach is more stable in an absolute sense on an annual basis.
A)True
B)False
Q2) The best use of performance measurement systems with several variables would be obtained by the development of ___ ___ ___ ___ of relationships between variables.
A) analysis of variance models
B) variance and analysis models
C) cause and effect models
D)sensitivity and polarity models
Q3) Total shareholder return is calculated as the ___ in the share price plus the ___ divided by the ___:
A) change in share price,dividends paid,closing share price
B) increase in total equity,retained earnings,opening share price
C) increase in dividends,taxation paid,return on equity
D)increase in share price,dividends paid,initial share price
Q4) The 'performance measurement cube' extends the balanced scorecard approach.
A)True B)False
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Chapter 6: GAP Analysis and Business-Level Strategic Options
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Sample Questions
Q1) 'Not to grow' is an inappropriate organisational desire.
A)True
B)False
Q2) The 5Qs approach and the notion of business models can be readily applied to not-for-profit (NFP)organisations.
A)True
B)False
Q3) Firms with well-defined business models allow them to make strategic choices concerning different parts of their operations that will support and reinforce each otherthus leading to competitive advantages.
A)True
B)False
Q4) Family-owned small businesses do not desire to achieve growth due to many factors excluding:
A)need to delegate authority to non-family member
B)taking on responsibility of employing large number of people
C)making sufficient profits
D)threat of attracting scrutiny of anti-competitive authority such as ACCC
Q5) Describe how to build a well-defined business model.
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Chapter 7: Strategic Decision-Making
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Sample Questions
Q1) The criteria that apply to rational decisions do NOT include a requirement that they:
A)allow for interdependent means and ends
B)are fully informed
C)are internally consistent and logical
D)aim at achieving the end goal
Q2) The process of 'satisficing' calls for conducting a limited rather than exhaustive search of possible alternatives.
A)True
B)False
Q3) In relation to ambiguity in decision-making:
A)the rational model is based on the assumption that information is known B)causality of events is ambiguous
C)both of the above
D)none of the above
Q4) What are the keys that help in avoiding catastrophic errors that lead to business failure?
Q5) A dialectic enquiry is not suitable for decisions of high risk.
A)True
B)False
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Chapter 8: Dynamic Competitive Strategy
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Sample Questions
Q1) One of the principles of game theory is that all managers must think similarly if cooperation is to be promoted.
A)True
B)False
Q2) D'Aveni has argued that the situation of hypercompetition is best addressed through short-term and temporary advantage.
A)True
B)False
Q3) D'Aveni identified four 'competitive areas':
A)cost advantage,deep holds,strong pockets,timing-know-how
B)side pockets,strangleholds,knowledge-timing,total quality management
C)timing-know-how,cost-quality,deep pockets,strongholds
D)strongholds,cost-benefit,timing-anyhow,long pockets
Q4) D'Aveni postulated that 'hypercompetition' arises when:
A)disequilibrium and rapid change by players create constant dynamic movement
B)rapid disequilibrium movement by key players creates dynamic changes
C)rapidly changing environment creates dynamic disequilibrium and movement by players
D)dynamic movement by players creates constant disequilibrium and rapid change
Q5) Describe the PARTS model set forth by Nalebuff and Brandenburger.
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Chapter 9: Corporatemulti-Business Strategy
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Sample Questions
Q1) Collis and Montgomery argued that five factors needed to be considered to explain the role of corporate head offices in maximising corporate synergies and minimising corporate costs.
A)True
B)False
Q2) Studies show that organisations which are vertically integrated are less volatile in activity and profitability than non-vertically integrated organisations.
A)True
B)False
Q3) The first golden rule of corporate strategy suggests that the corporate centre's value creation should be equal to the coordination costs.
A)True
B)False
Q4) Compare the BCG and GE tools and contrast their relative strengths and weaknesses as analytical devices.
Q5) In what ways can a 'corporate centre' add value to the corporation? Is it essential to have a 'corporate centre'?
Q6) Discuss any two advantages offered by a parent organisation to a new business.
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Chapter 10: Acquisitions and Alliances
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Sample Questions
Q1) The objective of preservation acquisition is to preserve the green credentials of the acquired organisation.
A)True
B)False
Q2) In many industries,the winners will be the companies that:
A)avoid joint ventures because they are difficult to manage
B)only form partnership with companies which know how to manage joint ventures successfully
C)outsource the management of joint venture
D)most quickly learn to manage joint venture effectively
Q3) A rational acquisition process involves five steps:
A)corporate espionage,option ranking,valuation,demand profiling,deal closure
B)intelligence gathering,share trading,ASX announcement,Part A Offer,Part B Acceptance
C)terms of payment,due diligence,negotiation,valuation,search for a target
D)advertise for acquisitions,data analysis,cash flow model,terms of endearment,purchase
Q4) Explain why companies might want to undertake an alliance.
Q5) Explain what causes acquisitions to occur in waves and give examples.
Q6) Explain the differences between absorption and preservation acquisitions.
Page 12
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Chapter 11: International Strategy
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Sample Questions
Q1) The most obvious immediate difficulty in seeking offshore opportunities is the difference of language.
A)True
B)False
Q2) The inward-looking perspective of internalisation includes all of the following except:
A)acting as licensor to a foreign company
B)importing/sourcing
C)acting as licensee from a foreign company
D)managing as the wholly owned subsidiary of a foreign firm
Q3) In segmenting markets in countries abroad,all of the following fundamental questions must be addressed except:
A)Is there a market segment in the potential export market that will value the product characteristics of the exporter's product?
B)Does the segment have various customers groups?
C)Is this market segment large enough to justify the costs of exporting?
D)Is this segment adequately served by existing domestic producers or other exporters?
Q4) Describe the four alternative approaches used to manage worldwide operation.
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13
Chapter 12: Capabilities, Systems and Structure
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Sample Questions
Q1) At the centre of Hubbard et al.'s model of strategy implementation is the pervasive role of ___ and ___.
A)illusion,reality
B)ethics,morals
C)communication,perception
D)cause,effect
Q2) Operating systems determine:
A)the quality of what is not produced
B)what is produced and how
C)both of the above
D)none of the above
Q3) The issues Hubbard,Rice and Galvin cite in introducing a reward system do NOT include:
A)people are very good at manipulating reward systems
B)rewards are difficult to take away once they are introduced
C)reward schemes are becoming increasingly costly
D)there is limited evidence of the relationship between rewards and performance
Q4) In developing the design of an organisation's structure,what are the issues that the organisation should consider?
Q5) Is outsourcing an ethical practice? Discuss.
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Chapter 13: Leadership, People and Culture
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Sample Questions
Q1) It is clear that attitudes,as much as abilities,are a desirable basis for choosing the 'right' people.
A)True
B)False
Q2) Cognition theory assumes that cognition represents the world as the person sees it and that action is preceded by understanding.
A)True
B)False
Q3) Pfeffer's practices that characterise most successful people-oriented organisations do NOT include:
A)security of employment
B)extensive training is provided
C)high compensation compared to performance
D)reduced status distinctions across levels of the organisation
Q4) Sustainability is an element of implementation,but not a criterion for decision-making about implementation choices.
A)True
B)False
Q5) 'Leaders are born,not made.' Discuss the validity of this statement.
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Chapter 14: Change Management
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Sample Questions
Q1) The reasons why change might be resisted do NOT include:
A)the importance of work to individuals
B)change means extra efficiency gains
C)change is a surprise
D)lack of trust in management
Q2) Implementing strategy clearly requires consideration of both content and process.
A)True
B)False
Q3) Briefly describe the variables that a general model of the process of change management needs to consider.
Q4) Passive change is the most successful way to block change from occurring as managers eventually run out of energy,time and resources to implement change.
A)True B)False
Q5) Reversal of the eight failures for transformational change are needed for successful change to occur.
A)True B)False
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