Hello friends in this post we are going to discuss about The Internal Organization Resources Capabilities Core Competencies and Competitive Advantages Question Answers | The Internal Organization MCQ with answers | The Internal Organization objective type questions
51. The challenge and difficulty of making effective decisions are implied by preliminary evidence suggesting that __________ of organizational decisions fail.
a. one-fourth
b. one-fifth
c. one-tenth
d. one-half
ANSWER: d
52. A decision that results in failure:
a. is a career-ending event because it is so unusual.
b. often results from lack of accountability.
c. fosters organizational inertia.
d. allows for learning.
ANSWER: d
53. The three conditions that characterize difficult managerial decisions concerning resources, capabilities, and core competencies are:
a. complexity, rarity, and human intellectual capital.
b. uncertainty, complexity, and intraorganizational conflicts.
c. imitability, complexity, and interorganizational conflicts.
d. imitability, comparability, and human intellectual capital.
ANSWER: b
54. A person who has made a successful decision when no obviously correct model or rule is available or when relevant data are unreliable or incomplete has exercised:
a. foresight
b. judgment.
c. effective strategic thinking.
d. decisiveness.
ANSWER: b
55. One reason executive judgment can be a particularly important source of competitive advantage is that judgment:
a. allows a firm to build a strong reputation.
b. compensates for lower returns during harsh market conditions.
c. increases human intellectual capacity.
d. allows for superior bundling of resources.
ANSWER: a
56. One of the managers at RDK has a successful track record that goes back several years. As a result, he has become extremely confident in his judgment, and has begun to make decisions without taking the time to evaluate contingencies that he feels are not relevant. This has led to some mistakes recently. The over-confidence exhibited by this manager is an example of what?
a. Cognitive bias
b. Intelligent risk-taking
c. Executive judgment
d. Value capability
ANSWER: a
57. When considering the relationships among the various characteristics a firm possesses, it is necessary to understand that _________ are the most numerous.
a. resources
b. capacities
c. capabilities
d. corecompetencies
ANSWER: a
58. Capabilities typically come from:
a. individual resources.
b. one unique resource.
c. several outstanding resources used independently.
d. combining resources.
ANSWER: d
59. All of the following are tangible resources EXCEPT:
a. production equipment.
b. distribution centers.
c. a firm’s reputation.
d. formal reporting structures.
ANSWER: c
60. Tangible resources include:
a. assets that are people-dependent, such as know-how.
b. assets that can be observed and quantified.
c. organizational culture.
d. a firm’s reputation.
ANSWER: b
61. Compared to intangible resources, in terms of their value, tangible resources are __________ constrained because they are __________ to leverage.
a. less; easier
b. less; harder
c. more;harder
d. more; easier
ANSWER: c
62. Compared to tangible resources, intangible resources are:
a. of less strategic value to the firm.
b. less likely to be the focus of strategic analysis.
c. a superior source of capabilities.
d. more likely to be reflected on the firm’s balance sheet.
ANSWER: c
63. Compared to tangible resources, intangible resources are __________ and __________.
a. less visible; more difficult to copy
b. less visible; less difficult to copy
c. more visible; more difficult to copy
d. more visible; less difficult to copy
ANSWER: a
64. At a manufacturing facility, which of the following would be categorized as an intangible resource?
a. The forklift
b. The quality control process
c. The forklift driver
d. The financial investment into building the warehouse
ANSWER: b
65. Which of the following is NOT a reputational resource?
a. Customers’ opinions that the firm’s products are high quality
b. Employees’ opinions of their supervisors’ fairness
c. Suppliers’ opinions that the firm pays its bills in a timely manner
d. Customers’ opinions that using the firm’s products makes them attractive
ANSWER: b
66. An investor is considering buying a restaurant that has been in operation for a number of years. The restaurant has a highly regarded chef and many long-term kitchen and wait staff who work together smoothly. It has a reputation for dishes of consistently high quality and an appealing dining atmosphere. Which of the following should the investor consider when making a decision?
a. The investor should realize that the success of this restaurant is so heavily based on human resources that the business will likely be subject to inertia in the future.
b. The investor may find that the restaurant’s financial statements undervalue the true value of its resources.
c. The investor should be aware that intangible assets are difficult to leverage into additional businesses.
d. The investor should search for a firm that has competitive advantages based on tangible resources.
ANSWER: b
67. Which of the following is a true statement about capabilities?
a. Capabilities are often developed in specific functional areas such as manufacturing, R&D, and marketing.
b. Valuable capabilities are based almost entirely on tangible resources.
c. Capabilities based on human capital are more vulnerable to obsolescence than other intangible capabilities because of the tendency for employee knowledge to become outdated.
d. The link between firm financial performance and capabilities is dependent on whether the capabilities are based on tangible or intangible resources.
ANSWER: a
68. When firms lay off employees, they are:
a. treating employees as an intangible resource.
b. recognizing the reduced value of labor in the value chain.
c. eroding the organization’s knowledge resources.
d. temporarily sacrificing a tangible asset that is easily replaced.
ANSWER: c
69. Because firms combine tangible and intangible resources to create capabilities:
a. these capabilities are fragile and subject to sudden loss of value.
b. capabilities are often based on developing, carrying, and exchanging information and knowledge through the firm’s human capital.
c. capabilities are easily transferred from one firm to another as employees change jobs.
d. these types of capabilities are considered primary activities in the value chain.
ANSWER: b
70. __________ can be viewed as the capacity to take action.
a. Strategic assets
b. Human capital
c. Core competencies
d. Functional capabilities
ANSWER: c
71. __________ is an example of a capability that is based in the functional area of distribution.
a. Effective use of logistics management techniques
b. Effective control of inventories through point-of-purchase data collection
c. Effective organizational structure
d. Product and design quality
ANSWER: a
72. The PRQ chain of retail stores has achieved a high level of efficiency in its inventory control by collecting data at the point of purchase. This is an example of a capability in which specific functional area?
a. Research and development
b. Distribution
c. Management
d. Management information systems
ANSWER: d
73. Innovation, consumer understanding, brand-building, go-to-market, and scale are activities that P&G performs well and are examples of the company’s:
a. tangible resources.
b. intangible resources.
c. core competencies.
d. capabilities.
ANSWER: c
74. To provide a sustainable competitive advantage, a capability must satisfy all of the following criteria EXCEPT be:
a. technologically innovative.
b. hard for competing firms to duplicate.
c. without good substitutes.
d. valuable to customers.
ANSWER: a
75. From a customer’s point of view, for an organization’s capability to be a core competence, it must be:
a. inimitable and unique.
b. valuable and unique.
c. inimitable and nonsubstitutable.
d. valuable and nonsubstitutable.
ANSWER: b
76. Valuable capabilities allow the firm to:
a. exploit threats in its external environment.
b. neutralize opportunities in its internal environment.
c. exploit opportunities or neutralize threats in its external environment.
d. exploit opportunities and threats in its internal environment.
ANSWER: c
77. Consider the criteria necessary for sustainable competitive advantage. Which of the following combinations would most likely bring about a temporary competitive advantage and the possibility for above-average returns?
a. Valuable, rare, not costly to imitate, and possibly substitutable
b. Valuable, rare, costly to imitate, and possibly substitutable.
c. Valuable, not rare, not costly to imitate, and possibly substitutable.
d. Valuable, not rare, costly to imitate, and substitutable.
ANSWER: a
78. A major department store chain has a strict policy of banning photographs or videos of its sales floor or back-room operations. It also does not allow academics to conduct studies of it for publication in research journals. In fact, some of its own top managers refer to the management’s policies on secrecy as “verging on paranoid.” These policies indicate that the top management of the firm believes the organization’s core competencies are:
a. causally ambiguous.
b. unobservable.
c. imitable.
d. common.
ANSWER: c
79. Several months ago, a restaurant developed a new appetizer that is a hit with customers. Many customers go to the restaurant just for the appetizer, and it was at the center of a recent highly positive review by a food critic. Preparation involves common ingredients and average culinary skills but requires a very high oven temperature, which significantly increases utility costs. Several competing restaurants have since added their own version of the appetizer to their menu. Which of the following criterion for assessing capabilities/core competencies is met?
a. The restaurant has the capability to develop something that is valuable.
b. The restaurant has the capability to develop something that is rare.
c. The restaurant has the capability to develop something that is costly to imitate.
d. All of these criteria are met.
ANSWER: a
80. In the airline industry, frequent flyer programs, ticket kiosks, and e-ticketing are all examples of capabilities that are __________ but no longer __________.
a. rare; valuable
b. valuable; rare
c. socially complex; rare
d. valuable; causally ambiguous
ANSWER: b
81. The capabilities used to create the sustainability/green initiatives at Walmart and Target are __________ but less likely to be __________.
a. rare; valuable
b. valuable; rare
c. socially complex; rare
d. valuable; causally ambiguous
ANSWER: b
82. Costly-to-imitate capabilities can emerge for all of the following reasons EXCEPT:
a. lack of scientific transference.
b. social complexity.
c. unique historical conditions.
d. causal ambiguity.
ANSWER: a
83. A financial management firm has existed for more than 70 years. Some of its original clients’ grandchildren are now clients of the firm themselves. The partners and staff of the firm have spent most or all of their careers with the firm. Many have even married into each other’s families. This firm has capabilities that would be costly to imitate primarily because of its:
a. access to large amounts of financial capital.
b. causally ambiguous core competencies.
c. social complexity.
d. unique historical conditions.
ANSWER: c
84. Southwest Airlines has a complex interrelationship between its culture and staff that adds value in ways that other airlines cannot, such as jokes on flights or the cooperation between gate personnel and pilots. These examples illustrate which of the following criteria for sustainable competitive advantage?
a. Valuable
b. Rare
c. Costly to imitate
d. Nonsubstitutable
ANSWER: c
85. McDonald’s culture, with an emphasis on cleanliness, consistency, service, and the training that reinforces the value of these characteristics, illustrates which of the following criteria for sustainable competitive advantage?
a. Valuable
b. Rare
c. Costly to imitate
d. Nonsubstitutable
ANSWER: c
86. Organizational culture is:
a. amorphous and changeable.
b. not easily imitable.
c. so difficult to analyze that most firms should choose to ignore it.
d. typically fragile in the face of changes in the external environment.
ANSWER: b
87. Gamma, Inc., has struggled for industry dominance with Ardent, Inc., its main competitor, for years. Gamma has gathered and analyzed large amounts of competitive intelligence about Ardent. It has observed as much of the firm’s internal functioning and technology as it can legally, yet Gamma cannot understand why Ardent has a competitive advantage over it. The source of Ardent’s success is:
a. social complexity.
b. causally ambiguous.
c. organizational culture.
d. historical conditions.
ANSWER: b
88. If a firm offers a service that is valuable, rare, and costly to imitate, but a substitute exists for the service, the firm will:
a. achieve competitive parity.
b. have a competitive disadvantage.
c. have a temporary competitive advantage.
d. gain a sustainable competitive advantage.
ANSWER: c
89. ACME Corp. is a leading provider of radios to the commercial market. Its products all rely on printed circuit-board technology. ACME has protected its market leadership with continued advancements in this technology, which it patents. A competitor has developed a radio for this market with equal performance but that uses a software-based technology instead of circuit boards. ACME’s technology leadership fails which of the following capability tests?
a. Value test
b. Rareness test
c. Substitutability test
d. Costly-to-imitate test
ANSWER: c
90. Firms that achieve competitive parity can expect to:
a. earn below-average returns.
b. earn average returns.
c. earn above-average returns.
d. initially earn above-average returns, declining to average returns.
ANSWER: b
91. A veterinary practice has added a pet boarding and grooming facility. Most of the practice’s competitors also provide these services. The veterinary practice is gaining competitive:
a. advantage.
b. parity.
c. disadvantage.
d. neutrality.
ANSWER: b
92. A local restaurant, Farm Fresh Ingredients, has become highly successful through its menu, based solely on organically raised chicken and beef, and organic seasonal produce. It has opened new locations in other cities, and these new locations are becoming highly profitable. Farm Fresh can expect that, at best, its competitive advantage will be:
a. permanent.
b. sustainable.
c. temporary.
d. defensible.
ANSWER: c
93. Value chain activities are the:
a. activities or tasks most likely to be imitated by competitors.
b. activities or tasks the firm completes in order to produce products and then sell, distribute, and service those products in ways that create value for customers.
c. activities or tasks the firm completes to support the work being done to produce, sell, distribute, and service the products the firm is producing.
d. activities or tasks most crucial to implementing the firm’s business strategy.
ANSWER: b
94. Which of the following would be categorized as a value chain activity?
a. Hiring new employees
b. Securing financial capital
c. Investing in organizational functions
d. Conducting customer feedback surveys
ANSWER: d
95. Which of the following would be categorized as a support function?
a. Developing an advertising campaign
b. Handling customer orders
c. Training employees
d. Procuring raw materials
ANSWER: c
96. Value chain analysis is a tool used to:
a. analyze a firm’s external environment for value-creating opportunities.
b. analyze a firm’s value chain activities and support functions in isolation from its competitors’ value chain.
c. understand the parts of the firm’s operation that create value and those that do not.
d. identify the firm’s core competencies in each of the primary activities of the firm.
ANSWER: c
97. Firms that have strong positive relationships with suppliers and customers are said to have __________, an essential ingredient to creating value.
a. customer value
b. social capital
c. effective marketing
d. an attractive industry
ANSWER: b
98. Knowledge transfer and access to resources the firm does not own but needs to complete activities within the value chain are enhanced by:
a. guidelines for sharing knowledge and resources.
b. social capital.
c. penalties for not sharing knowledge and resources.
d. training employees on how to cooperate.
ANSWER: b
99. Why is trust necessary to build social capital?
a. Contracts between a firm and its suppliers cannot be enforced.
b. Firms must be reassured that they will be reimbursed for their expenses.
c. Contracts do not exist between a firm and its customers.
d. Partners must be confident that neither party will take advantage of the other .
ANSWER: d
100. Outsourcing is the:
a. spinning off of a value-creating activity to create a new firm.
b. selling of a value-creating activity to other firms.
c. purchase of a value-creating activity from an external supplier.
d. use of computers to obtain value-creating data from the Internet.