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Chapter 3 - Evaluating a Firm's Internal Capabilities

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Quiz on Chapter 3 - Evaluating a Firm's Internal Capabilities, created by Strategy IO on 28/12/2016.
Strategy IO
Quiz by Strategy IO, updated more than 1 year ago
Strategy IO
Created by Strategy IO almost 8 years ago
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Resource summary

Question 1

Question
________ 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.
Answer
  • Management controls
  • Capabilities
  • Resources
  • Compensation policies

Question 2

Question
________ 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.
Answer
  • Retained earnings
  • Capabilities
  • Human resources
  • Financial resources

Question 3

Question
A firm's marketing skills and teamwork as well as its cooperation among managers are examples of
Answer
  • financial resources.
  • human resources.
  • physical resources.
  • capabilities.

Question 4

Question
The training, experience, judgment, intelligence, relationships and insight of individual managers and workers in a firm are examples of
Answer
  • physical resources.
  • human resources.
  • organizational resources.
  • financial resources.

Question 5

Question
Computer hardware and software technology, robots used in manufacturing and automated warehouses are examples of which type of resources?
Answer
  • financial resources.
  • physical resources
  • human resources
  • organizational resources

Question 6

Question
A firm's formal reporting structure, its formal and informal planning and its controlling and coordinating systems are examples of which type of resources?
Answer
  • financial resources
  • physical resources
  • human resources
  • organizational resources

Question 7

Question
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
Answer
  • resource mobility.
  • resource homogeneity.
  • resource immobility.
  • resource heterogeneity.

Question 8

Question
________ implies that for a given business activity, some firms may be more skilled in accomplishing this activity than other firms.
Answer
  • Resource mobility
  • Resource homogeneity
  • Resource immobility
  • Resource heterogeneity

Question 9

Question
The theoretical roots of the resource-based view can be traced to research done by
Answer
  • David Ricardo.
  • Adam Smith.
  • Oliver Williamson.
  • Joseph Schumpeter.

Question 10

Question
Inputs whose quantity of supply is fixed and does not respond to price increases are said to be
Answer
  • elastic in supply.
  • inelastic in supply.
  • elastic in demand.
  • perfectly competitive.

Question 11

Question
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
Answer
  • temporary competitive advantages.
  • sustainable competitive advantages.
  • core competencies.
  • strengths.

Question 12

Question
The set of business activities in which a firm engages to develop, produce, and market its products or services is known as its
Answer
  • value chain.
  • physical resources.
  • organizational resources.
  • human resources.

Question 13

Question
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)
Answer
  • capability.
  • externality.
  • competitive advantage.
  • weakness.

Question 14

Question
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?
Answer
  • organization
  • imitability
  • competitive parity
  • rarity

Question 15

Question
Most firms have a resource base that is composed primarily of resources and capabilities that are
Answer
  • valuable but not rare.
  • neither valuable nor rare.
  • valuable and rare.
  • rare but not valuable.

Question 16

Question
Which of the following is not one of the six distinct activities in McKinsey and Company's value chain model?
Answer
  • technology development
  • product design
  • manufacturing
  • inbound logistics

Question 17

Question
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.
Answer
  • valuable
  • rare
  • inimitable
  • un-substitutable

Question 18

Question
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
Answer
  • rare.
  • valuable.
  • imperfectly imitable.
  • perfectly imitable.

Question 19

Question
Firms that possess and exploit costly-to-imitate, rare and valuable resources in choosing and implementing their strategies may enjoy a period of
Answer
  • temporary competitive advantage.
  • competitive disadvantage.
  • competitive parity.
  • sustained competitive advantage.

Question 20

Question
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
Answer
  • path dependence.
  • causal ambiguity.
  • unique historical conditions.
  • social complexity.

Question 21

Question
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
Answer
  • socially complex.
  • causally ambiguous.
  • path dependent.
  • the result of unique historical conditions.

Question 22

Question
According to the research in strategic human resources management,
Answer
  • 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.

Question 23

Question
Which of the following statements regarding patents is accurate?
Answer
  • 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.

Question 24

Question
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
Answer
  • formal reporting structures.
  • organizational charts.
  • compensation policies.
  • management control systems.

Question 25

Question
Which of the following is an example of formal management controls?
Answer
  • a firm's culture
  • the willingness of employees to monitor each other
  • budgeting and reporting activities
  • managerial motivation

Question 26

Question
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)
Answer
  • informal management control.
  • formal management control.
  • compensation policy.
  • formal reporting structure.

Question 27

Question
Resources that are valuable but not rare can be categorized as
Answer
  • organizational weaknesses.
  • distinctive competencies.
  • organizational strengths.
  • complementary resources and capabilities.

Question 28

Question
Resources that generate a temporary competitive advantage are
Answer
  • 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.

Question 29

Question
If a resource or capability is valuable and rare but not costly to imitate, exploiting this resource will generate a(n)
Answer
  • sustained competitive advantage.
  • perfectly competitive environment.
  • temporary competitive advantage.
  • environment characterized by competitive parity.

Question 30

Question
Resources and capabilities that are valuable, rare, and costly to imitate are best described as
Answer
  • distinctive competencies.
  • entry barriers.
  • complementary resources and capabilities.
  • sustainable distinctive competencies.

Question 31

Question
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
Answer
  • explicit collusion.
  • tacit collusion.
  • competitive dynamics.
  • a harvest strategy.

Question 32

Question
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
Answer
  • tacit cooperation.
  • tacit collusion.
  • explicit collusion.
  • competitive parity.

Question 33

Question
When tacit cooperation has the effect of reducing supply and increasing prices, it is known as
Answer
  • monopolistic competition.
  • explicit collusion.
  • competitive parity.
  • tacit collusion.

Question 34

Question
Tacit cooperation is only a viable strategy when
Answer
  • 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.

Question 35

Question
The specific actions a firm takes to implement its strategies are known as
Answer
  • competitive advantages.
  • objectives.
  • goals.
  • tactics.

Question 36

Question
Which of the following statements regarding the resource-based view is accurate?
Answer
  • 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.

Question 37

Question
Which of the following statements regarding competitive parity and competitive advantage is accurate?
Answer
  • 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.

Question 38

Question
If there is a conflict between the resources a firm controls and that firm's organization, ________ should be changed.
Answer
  • the resources
  • both
  • nothing
  • the organization

Question 39

Question
A process is said to be ________ when events early in the evolution of a process have significant effects on subsequent events.
Answer
  • causally ambiguous
  • path dependent
  • socially complex
  • path independent

Question 40

Question
LaserTech's new technology appears to be
Answer
  • 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.

Question 41

Question
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
Answer
  • competitive dynamics.
  • tacit collusion.
  • a sustainable distinctive competence.
  • competitive parity.

Question 42

Question
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
Answer
  • social complexity.
  • tacit collusion.
  • path dependence.
  • causal ambiguity.

Question 43

Question
LaserTech's new technology is an example of
Answer
  • financial resources.
  • physical resources.
  • human resources.
  • organizational resources.

Question 44

Question
The inability of rivals to develop or acquire technology similar to that of LaserTech is an illustration of
Answer
  • resource immobility.
  • resource heterogeneity.
  • causal ambiguity.
  • path dependence.

Question 45

Question
Bates' culture is an example of a(n)
Answer
  • informal management control.
  • formal management control.
  • compensation policy.
  • formal reporting structure.

Question 46

Question
The budgeting and reporting activities that Bates uses are examples of
Answer
  • informal management controls.
  • formal reporting structures.
  • formal management controls.
  • primary value chain activities.

Question 47

Question
The reward system Bates uses to encourage employees to find ways to reduce costs is an example of a(n)
Answer
  • sustained distinctive competence.
  • informal management control.
  • formal reporting structure.
  • compensation policy.

Question 48

Question
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
Answer
  • imperfectly imitable.
  • causally ambiguous.
  • substitutable.
  • perfectly imitable.

Question 49

Question
It would be costly for competitors to duplicate Bates due to
Answer
  • path dependence and causal ambiguity.
  • causal ambiguity and unique historical conditions.
  • path dependence and unique historical conditions.
  • causal ambiguity and patents.
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