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Quiz on Chapter 3 - Evaluating a Firm's Internal Capabilities, created by Strategy IO on 28/12/2016.

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Chapter 3 - Evaluating a Firm's Internal Capabilities

Chapter 3 - Evaluating a Firm's Internal Capabilities

Question 1 of 49

1

________ in the RBV are defined as the tangible and intangible assets that a firm controls that it can use to conceive and implement its strategies.

Select one of the following:

  • Management controls

  • Capabilities

  • Resources

  • Compensation policies

Explanation

Question 2 of 49

1

________ are a subset of a firm's resources and are defined as tangible and intangible assets that enable a firm to take full advantage of other resources it controls.

Select one of the following:

  • Retained earnings

  • Capabilities

  • Human resources

  • Financial resources

Explanation

Question 3 of 49

1

A firm's marketing skills and teamwork as well as its cooperation among managers are examples of

Select one of the following:

  • financial resources.

  • human resources.

  • physical resources.

  • capabilities.

Explanation

Question 4 of 49

1

The training, experience, judgment, intelligence, relationships and insight of individual managers and workers in a firm are examples of

Select one of the following:

  • physical resources.

  • human resources.

  • organizational resources.

  • financial resources.

Explanation

Question 5 of 49

1

Computer hardware and software technology, robots used in manufacturing and automated warehouses are examples of which type of resources?

Select one of the following:

  • financial resources.

  • physical resources

  • human resources

  • organizational resources

Explanation

Question 6 of 49

1

A firm's formal reporting structure, its formal and informal planning and its controlling and coordinating systems are examples of which type of resources?

Select one of the following:

  • financial resources

  • physical resources

  • human resources

  • organizational resources

Explanation

Question 7 of 49

1

The VRIO assumption that some of the resource and capability differences among firms may be long lasting because it may be very costly for firms without certain resources and capabilities to develop or acquire them is known as

Select one of the following:

  • resource mobility.

  • resource homogeneity.

  • resource immobility.

  • resource heterogeneity.

Explanation

Question 8 of 49

1

________ implies that for a given business activity, some firms may be more skilled in accomplishing this activity than other firms.

Select one of the following:

  • Resource mobility

  • Resource homogeneity

  • Resource immobility

  • Resource heterogeneity

Explanation

Question 9 of 49

1

The theoretical roots of the resource-based view can be traced to research done by

Select one of the following:

  • David Ricardo.

  • Adam Smith.

  • Oliver Williamson.

  • Joseph Schumpeter.

Explanation

Question 10 of 49

1

Inputs whose quantity of supply is fixed and does not respond to price increases are said to be

Select one of the following:

  • elastic in supply.

  • inelastic in supply.

  • elastic in demand.

  • perfectly competitive.

Explanation

Question 11 of 49

1

To the extent that a firm's resources and capabilities enhance a firm's competitive position by enabling a firm to exploit its opportunities or neutralize its threats, these resources and capabilities are valuable and are known as

Select one of the following:

  • temporary competitive advantages.

  • sustainable competitive advantages.

  • core competencies.

  • strengths.

Explanation

Question 12 of 49

1

The set of business activities in which a firm engages to develop, produce, and market its products or services is known as its

Select one of the following:

  • value chain.

  • physical resources.

  • organizational resources.

  • human resources.

Explanation

Question 13 of 49

1

If in the process of maximizing its performance, a firm engages in activities that pollute the environment, the impact of that pollution is a(n)

Select one of the following:

  • capability.

  • externality.

  • competitive advantage.

  • weakness.

Explanation

Question 14 of 49

1

ESPN's development of an extensive offering of X-Games coverage that is unmatched by any other sports outlet is an example of which element of the VRIO framework?

Select one of the following:

  • organization

  • imitability

  • competitive parity

  • rarity

Explanation

Question 15 of 49

1

Most firms have a resource base that is composed primarily of resources and capabilities that are

Select one of the following:

  • valuable but not rare.

  • neither valuable nor rare.

  • valuable and rare.

  • rare but not valuable.

Explanation

Question 16 of 49

1

Which of the following is not one of the six distinct activities in McKinsey and Company's value chain model?

Select one of the following:

  • technology development

  • product design

  • manufacturing

  • inbound logistics

Explanation

Question 17 of 49

1

In general, as long as the number of firms that possess a particular valuable resource or capability is less than the number of firms needed to generate perfect competition dynamics in an industry, that resource or capability can be considered ________ and a potential source of competitive advantage.

Select one of the following:

  • valuable

  • rare

  • inimitable

  • un-substitutable

Explanation

Question 18 of 49

1

If firms that do not possess valuable and rare resources or capabilities face a cost disadvantage in obtaining these resources or capabilities compared to the firms that already possess them, these resources and capabilities are termed

Select one of the following:

  • rare.

  • valuable.

  • imperfectly imitable.

  • perfectly imitable.

Explanation

Question 19 of 49

1

Firms that possess and exploit costly-to-imitate, rare and valuable resources in choosing and implementing their strategies may enjoy a period of

Select one of the following:

  • temporary competitive advantage.

  • competitive disadvantage.

  • competitive parity.

  • sustained competitive advantage.

Explanation

Question 20 of 49

1

If a firm's resources and capabilities are costly to imitate because imitating firms may not understand the relationship between the resources and capabilities controlled by a firm and that firm's competitive advantage, this competitive advantage is said to be protected from imitation by

Select one of the following:

  • path dependence.

  • causal ambiguity.

  • unique historical conditions.

  • social complexity.

Explanation

Question 21 of 49

1

Resources and capabilities, such as interpersonal relations among managers and a firm's culture, that may be costly to imitate because they are beyond the ability of firms to systematically manage and influence are referred to as

Select one of the following:

  • socially complex.

  • causally ambiguous.

  • path dependent.

  • the result of unique historical conditions.

Explanation

Question 22 of 49

1

According to the research in strategic human resources management,

Select one of the following:

  • firms that are able to use human resource practices to develop socially complex human and organizational resources are able to gain competitive advantage over firms that do not engage in these practices.

  • firms that are able to use human resource practices to develop socially simplistic human and organizational resources are able to gain competitive advantage over firms that do not engage in these practices.

  • firms that are able to use human resource practices to develop socially complex human and organizational resources gain little advantage over firms that do not engage in these practices.

  • firms that are able to use human resource practices to develop socially complex human and organizational resources are at a competitive disadvantage when compared to firms that do not engage in these practices.

Explanation

Question 23 of 49

1

Which of the following statements regarding patents is accurate?

Select one of the following:

  • Patents always increase the costs of imitation.

  • Patents may decrease, rather than increase, the costs of imitation.

  • Patents always decrease the costs of imitation.

  • Patents have no impact on the costs of imitation.

Explanation

Question 24 of 49

1

The range of formal and informal mechanisms to ensure that managers are behaving in ways consistent with a firm's strategies are referred to as

Select one of the following:

  • formal reporting structures.

  • organizational charts.

  • compensation policies.

  • management control systems.

Explanation

Question 25 of 49

1

Which of the following is an example of formal management controls?

Select one of the following:

  • a firm's culture

  • the willingness of employees to monitor each other

  • budgeting and reporting activities

  • managerial motivation

Explanation

Question 26 of 49

1

Southwest Airlines' strong internal culture that helps ensure that employees act in ways consistent with the company's strategy is an example of a(n)

Select one of the following:

  • informal management control.

  • formal management control.

  • compensation policy.

  • formal reporting structure.

Explanation

Question 27 of 49

1

Resources that are valuable but not rare can be categorized as

Select one of the following:

  • organizational weaknesses.

  • distinctive competencies.

  • organizational strengths.

  • complementary resources and capabilities.

Explanation

Question 28 of 49

1

Resources that generate a temporary competitive advantage are

Select one of the following:

  • valuable, rare and costly to imitate.

  • valuable but neither rare nor costly to imitate.

  • valuable and either rare or costly to imitate.

  • valuable and rare but not costly to imitate.

Explanation

Question 29 of 49

1

If a resource or capability is valuable and rare but not costly to imitate, exploiting this resource will generate a(n)

Select one of the following:

  • sustained competitive advantage.

  • perfectly competitive environment.

  • temporary competitive advantage.

  • environment characterized by competitive parity.

Explanation

Question 30 of 49

1

Resources and capabilities that are valuable, rare, and costly to imitate are best described as

Select one of the following:

  • distinctive competencies.

  • entry barriers.

  • complementary resources and capabilities.

  • sustainable distinctive competencies.

Explanation

Question 31 of 49

1

If Delta Airlines were to significantly change its fare structure and flight schedule to enhance its competitive position in response to aggressive price cutting by Southwest Airlines, this would be an example of

Select one of the following:

  • explicit collusion.

  • tacit collusion.

  • competitive dynamics.

  • a harvest strategy.

Explanation

Question 32 of 49

1

Any actions a firm takes that have the effect of reducing the level of rivalry in an industry that also do not require firms in an industry to directly communicate or negotiate with each other can be thought of as

Select one of the following:

  • tacit cooperation.

  • tacit collusion.

  • explicit collusion.

  • competitive parity.

Explanation

Question 33 of 49

1

When tacit cooperation has the effect of reducing supply and increasing prices, it is known as

Select one of the following:

  • monopolistic competition.

  • explicit collusion.

  • competitive parity.

  • tacit collusion.

Explanation

Question 34 of 49

1

Tacit cooperation is only a viable strategy when

Select one of the following:

  • an industry is perfectly competitive.

  • an industry is heterogeneous with respect to the products it sells and their cost structure.

  • there is a strong market share leader in the industry.

  • there are low entry barriers in the industry.

Explanation

Question 35 of 49

1

The specific actions a firm takes to implement its strategies are known as

Select one of the following:

  • competitive advantages.

  • objectives.

  • goals.

  • tactics.

Explanation

Question 36 of 49

1

Which of the following statements regarding the resource-based view is accurate?

Select one of the following:

  • Competitively valuable resources and capabilities are controlled only by a firm's general managers.

  • Only lower level employees need to accept the responsibility of creating, nurturing and exploiting resources and capabilities that can generate competitive advantages for a firm.

  • Employees should define their jobs in functional terms instead of in competitive and economic terms.

  • Competitive advantage is too important to remain the sole property of senior management.

Explanation

Question 37 of 49

1

Which of the following statements regarding competitive parity and competitive advantage is accurate?

Select one of the following:

  • Some firms develop valuable, rare, and costly-to-imitate resources and capabilities in being efficient second movers, that is, in rapidly imitating and improving on the product and technological innovations of other firms.

  • Firms that benchmark their performance against the performance of successful competitors can expect to develop at least a temporary competitive advantage.

  • Firms must be first movers to gain competitive advantages.

  • Even if all a firm does is create value in the same way as its competitors, the firm can expect to earn at least a temporary competitive advantage.

Explanation

Question 38 of 49

1

If there is a conflict between the resources a firm controls and that firm's organization, ________ should be changed.

Select one of the following:

  • the resources

  • both

  • nothing

  • the organization

Explanation

Question 39 of 49

1

A process is said to be ________ when events early in the evolution of a process have significant effects on subsequent events.

Select one of the following:

  • causally ambiguous

  • path dependent

  • socially complex

  • path independent

Explanation

Question 40 of 49

1

LaserTech's new technology appears to be

Select one of the following:

  • valuable and rare but not costly to imitate.

  • valuable and either rare or costly to imitate.

  • valuable but neither rare nor costly to imitate.

  • valuable, rare and costly to imitate.

Explanation

Question 41 of 49

1

If one of LaserTech's rivals were to decide to divest its industrial laser manufacturing business in response to LaserTech's new technology, this would be an example of

Select one of the following:

  • competitive dynamics.

  • tacit collusion.

  • a sustainable distinctive competence.

  • competitive parity.

Explanation

Question 42 of 49

1

If LaserTech's new technological development were due to proprietary investments the company made when it was first founded twenty years ago, this would be an example of

Select one of the following:

  • social complexity.

  • tacit collusion.

  • path dependence.

  • causal ambiguity.

Explanation

Question 43 of 49

1

LaserTech's new technology is an example of

Select one of the following:

  • financial resources.

  • physical resources.

  • human resources.

  • organizational resources.

Explanation

Question 44 of 49

1

The inability of rivals to develop or acquire technology similar to that of LaserTech is an illustration of

Select one of the following:

  • resource immobility.

  • resource heterogeneity.

  • causal ambiguity.

  • path dependence.

Explanation

Question 45 of 49

1

Bates' culture is an example of a(n)

Select one of the following:

  • informal management control.

  • formal management control.

  • compensation policy.

  • formal reporting structure.

Explanation

Question 46 of 49

1

The budgeting and reporting activities that Bates uses are examples of

Select one of the following:

  • informal management controls.

  • formal reporting structures.

  • formal management controls.

  • primary value chain activities.

Explanation

Question 47 of 49

1

The reward system Bates uses to encourage employees to find ways to reduce costs is an example of a(n)

Select one of the following:

  • sustained distinctive competence.

  • informal management control.

  • formal reporting structure.

  • compensation policy.

Explanation

Question 48 of 49

1

The fact that it would be would be difficult and costly for firms to match Bates' capabilities in the tool industry indicates that these capabilities are

Select one of the following:

  • imperfectly imitable.

  • causally ambiguous.

  • substitutable.

  • perfectly imitable.

Explanation

Question 49 of 49

1

It would be costly for competitors to duplicate Bates due to

Select one of the following:

  • path dependence and causal ambiguity.

  • causal ambiguity and unique historical conditions.

  • path dependence and unique historical conditions.

  • causal ambiguity and patents.

Explanation

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