Organizational Management
Textbook Exam Questions
Course Introduction
Organizational Management explores the foundational principles and practices essential for effectively leading and governing organizations. This course examines key management theories, strategic planning, organizational structure, decision-making processes, leadership styles, and human resource management. Students will analyze real-world case studies to understand how managers foster productivity, adapt to change, resolve conflicts, and align teams with organizational goals. The course also emphasizes ethical considerations and the impact of organizational culture on the overall success and sustainability of businesses.
Recommended Textbook
Strategic Management 4th Edition by Frank Rothaermel
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12 Chapters
1217 Verified Questions
1217 Flashcards
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Chapter 1: What Is Strategy
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100 Flashcards
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Sample Questions
Q1) If Zephyr Electronics obtains an 18 percent return on invested capital, which of the following will help determine if it has a competitive advantage over other pharmaceutical companies?
A) comparing the return to the return on invested capital obtained by other firms in the industry
B) assessing the value based on the shareholders' expectations of return on their capital
C) evaluating the liquidity ratios for other pharmaceutical companies
D) comparing the value to the history of the firm's return of investment over a number of years
Answer: A
Q2) Core values provide ethical guidelines for how individual employees will behave.
A)True
B)False
Answer: True
Q3) Managers should create two sets of core values, one for employees and one for themselves.
A)True
B)False
Answer: False
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Page 3
Chapter 2: Strategic Leadership: Managing the Strategy Process
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101 Verified Questions
101 Flashcards
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Sample Questions
Q1) Mercurial Foods is the parent company of several chain restaurants offering a variety of cuisines. The top management at Mercurial has decided to enter the frozen foods industry based on its assessment of the profit potential in that industry. Which of the following strategies does this best illustrate?
A) corporate strategy
B) business strategy
C) functional strategy
D) divisional strategy
Answer: A
Q2) After a firm has identified its key stakeholders in stakeholder impact analysis, the immediate next step is to
A) recognize the opportunities and threats the stakeholders present.
B) identify stakeholders' interests and claims.
C) formulate a stakeholder strategy.
D) address the stakeholders' concerns.
Answer: B
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Chapter 3: External Analysis: Industry Structure,
Competitive Forces, and Strategic Groups
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101 Verified Questions
101 Flashcards
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Sample Questions
Q1) Which of the following statements is true about strategic groups?
A) It is not possible to have two different strategic groups within the same industry.
B) Rivalry within the same strategic group tends to be lower than rivalry between different strategic groups.
C) Profitability varies between different strategic groups.
D) Companies within the same strategic group are complementors to each other.
Answer: C
Q2) Zoom Zoom Car Rental follows a cost-leadership strategy. Which of the following firms will most likely be its direct competitor?
A) Classic Car Rentals Inc., which follows a cost-increase strategy
B) Paul Bunyan Car and Truck Rentals, which follows a differentiation strategy
C) Reliable Rental Cars, which follows a low-cost strategy
D) Rent-an-Auto LLC, which follows a standardization strategy
Answer: C
Q3) Firms within the same industry automatically belong to the same strategic group.
A)True
B)False
Answer: False
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Chapter 4: Internal Analysis: Resources, Capabilities, and Core Competencies
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105 Flashcards
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Sample Questions
Q1) A music distributor that decides to launch a proprietary music streaming service to respond to changes in music consumption trends exhibits dynamic capabilities.
A)True
B)False
Q2) A firm will fail to create a sustained competitive advantage when the
A) fit between its internal strengths and the external environment is static.
B) source of its competitive advantage is causally ambiguous.
C) source of its competitive advantage is socially complex.
D) resource bundles exhibit heterogeneity and immobility.
Q3) Discuss resource immobility as a critical assumption in the resource-based model of a firm.
Q4) Which of the following statements accurately describes a firm's resource stock?
A) Resource stocks are a firm's level of resources that are common to competitors.
B) Resource stocks are a firm's future estimate of both tangible and intangible resources.
C) Resource stocks are a firm's current level of intangible resources.
D) Resource stocks are a firm's level of investments to maintain or build a resource.
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Page 6
Chapter 5: Competitive Advantage, Firm Performance, and Business Models
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) A firm will always see its stock price appreciate when it demonstrates measurable growth.
A)True
B)False
Q2) Polygon sells its e-book readers at the cost price of $15 each. However, the company makes its profits when users have to download or buy books online. Which of the following business models is Polygon implementing?
A) subscription-based
B) razor-razor-blade
C) pay-as-you-go
D) direct sales
Q3) List the dimensions on which a firm can create greater economic value.
Q4) A high percentage of R&D/Revenue ratio indicates a(n)
A) strong focus on innovation to improve current products and services.
B) inefficiency in the management to focus on new products.
C) strong focus on marketing and sales to promote products and services.
D) negligent investment toward research and development.
Q5) What is risk capital?
Q6) What does "total return to shareholders" mean?
Q7) What is the relationship between producer surplus and consumer surplus? Page 7
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Page 8
Chapter 6: Business Strategy: Differentiation, Cost
Leadership, and Blue Oceans
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Sample Questions
Q1) Nendry is the owner of a firm that produces sports drinks. Since there are a number of firms in the industry competing on cost, Nendry has decided to pursue a differentiation strategy. In this case, she should
A) focus on adding unique features to her product that customers will value.
B) concentrate on improving process technologies to achieve economies of scale.
C) enforce strict budget controls at all levels of the organization.
D) devote all resources to reducing the value gap.
Q2) Which of the following provides an example of a firm in a red ocean?
A) Chique Apparel offered clothing at a low price but failed to differentiate its product as being exclusive.
B) Cheap Apparel offered clothing at a price matching that of its competitors and, as a result, it had lower profit margins.
C) Goode Apparel offered clothing at a mid-range price but failed to differentiate its product as being of decent quality.
D) Top Drawer Apparel offered clothing at a higher price than competitors and, as a result, failed to make a profit.
Q3) What does the success of business-level strategies depend on?
Q4) Explain blue ocean strategy with the help of an example.
Page 9
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Chapter 7: Business Strategy: Innovation, Entrepreneurship, and Platforms
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100 Verified Questions
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Sample Questions
Q1) While the personal computer industry is flooded and growing with laptops and tablets, Malik recently bought a desktop, his first personal computer. He realized that a computer at home would be helpful for his children for their school projects, and he could use it to maintain the simple accounts of his plumbing business. Which of the following customer segments does Ivan best represent?
A) early adopters
B) category captains
C) laggards
D) early majority
Q2) Explain some of the features of the introduction stage of the industry life cycle.
Q3) The typical four-step innovation process begins with
A) the modification and recombination of an existing product or process.
B) the presentation of an idea as findings derived from basic research.
C) the commercialization of an invention by entrepreneurs.
D) a competitor's attempt to imitate an innovation.
Q4) Describe network effects and their potential to help or hurt a platform business.
Q5) Briefly discuss the strategic implications of the crossing-the-chasm framework.
Page 10
Q6) Explain the reasons for increasingly rapid technological diffusion and adoption.
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Chapter 8: Corporate Strategy: Vertical Integration and Diversification
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Sample Questions
Q1) The core competency of GoGo Motors is its fuel-efficient engine found in its cars. These engines are developed and built in-house. The company realizes that the growing demand for "green" vehicles has created a new market opportunity. Thus, it uses its existing technology to develop an engine that improves the fuel efficiency of recreational motorhomes. In this scenario, GoGo Motors is
A) leveraging existing core competencies to target the chasm between the early adopter and early majority market segment.
B) redeploying and recombining existing core competencies to compete in future markets.
C) building new core competencies to create and compete in future markets.
D) building new core competencies to protect and extend current market position.
Q2) ________ are best described as costs that occur due to political maneuvering by managers to control capital and resource allocation and the resulting inefficiencies stemming from suboptimal allocation of scarce resources.
A) Fixed costs
B) Influence costs
C) Coordination costs
D) Opportunity costs
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Chapter 9: Corporate Strategy: Strategic Alliances, Mergers, and Acquisitions
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Sample Questions
Q1) A candy company called Hearts Aflame Inc. forms an agreement with another candy company called Dreamcatcher Inc. Through this agreement, Hearts Aflame owns 30 percent of Dreamcatcher. However, Dreamcatcher does not own any part of Hearts Aflame. This type of agreement is called a(n)
A) non-equity alliance.
B) equity alliance.
C) joint venture.
D) capital venture.
Q2) Organizations seeking strategic alliances often pursue non-equity alliances because they are the easiest to create and to sever. However, the short duration of these alliances often means there is little trust or commitment on either side.
A)True
B)False
Q3) Which of the following is an advantage of equity alliances when compared to non-equity alliances?
A) They are more flexible and easy to initiate and terminate.
B) They require smaller capital investments.
C) They produce stronger ties between partners.
D) They are based on contracts rather than ownership.
Page 12
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Chapter 10: Global Strategy: Competing Around the World
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Sample Questions
Q1) Culinary Solutions Inc. manufactures cooking and baking equipment and has its base in the country of Vandevar. It has approximately 300 stores across the country and is already active in three foreign countries. It attempts to establish itself in the country of Balalaika, and uses its low-cost strategy to do so. However, due to the additional costs associated with training, coordinating across geographic distances, and other costs associated with doing business in an unfamiliar cultural and economic environment, Culinary Solutions Inc. incurs huge financial losses in Balalaika. In this scenario, Culinary Solutions Inc.'s failure to establish itself successfully in Balalaika occurs most likely because
A) it overestimated its need to protect its intellectual property.
B) it underestimated its liability of foreignness when entering the Balalaika market.
C) it underestimated its dwindling reputation before it enters the Balalaika market.
D) it overestimates the geographic and cultural distance between Vandevar and Balalaika.
Q2) How do firms make decisions to pursue a global strategy?
Q3) Discuss how demand conditions within Porter's diamond framework affect national competitive advantage.
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Chapter 11: Organizational Design: Structure, Culture, and Control
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Sample Questions
Q1) A planned emergence approach to strategic planning is most likely to be found in a highly centralized firm.
A)True
B)False
Q2) Output controls can sometimes discourage collaboration among different strategic business units. However, more and more work requires creativity and innovation, especially in highly-developed economies. One way firms are grappling with this issue is by
A) introducing results-only-work-environments to tap intrinsic motivations.
B) refining the budgeting process to encourage more department collaboration.
C) updating standard operating procedures to allow more process flexibility.
D) using output controls only when the goal is to ensure a predictable outcome.
Q3) Which of the following best exemplifies the use of input controls?
A) McDonald's use of standard operating procedures
B) GM's use of the multidivisional strategy
C) Zappos' use of monitoring-free customer service calls
D) Southwest Airline's use of employee friendliness
Q4) What are the characteristics of mechanistic organizations? Explain with the help of an example.
Page 14
Q5) Discuss how a differentiation strategy is used with a functional structure.
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Chapter 12: Corporate Governance and Business Ethics
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Sample Questions
Q1) Nate is a recent graduate who states that he has interned at a major accounting firm so that his value as a candidate for employment increases. A start-up recruits Nate based on his stated credentials without verifying them. Two days into the job, Nate's team lead realizes that Nate does not know much of what he claimed to know during the interview. This scenario best exemplifies
A) moral hazard.
B) adverse selection.
C) shared value creation.
D) corporate governance.
Q2) Adverse selection in a public stock company occurs when A) information asymmetry increases the likelihood of selecting inferior alternatives. B) a firm's work tasks, incentives, and employment contracts minimize opportunism by agents.
C) a principal is not aware of the context from which information from an agent is derived.
D) an agent manipulates information to benefit stockholders.
Q3) How does a leveraged buyout affect a public company?
Q4) Describe moral hazard with an example.
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