Deck 4: The Internal Organization: Resources, capabilities, and Core Competencies

Question 1

Individually,resources typically result in a sustainable competitive advantage.

Answer 1

False

Question 2

The sustainability of a competitive advantage depends upon the imitability of the core competence,the availability of substitutes for the core competence,and the rate of core competence obsolescence.

Answer 2

True

Question 3

Before the firm can make strategic decisions,managers must prioritize the decisions that generate adequate quarterly earning numbers.

Answer 3

False

Question 4

A resource has high strategic value even if it has no effect on the competitive advantage of the firm.

Question 5

Capabilities of an organization emerge over time through complex interactions between and among tangible and intangible resources.

Question 6

Firms can earn above-average returns even if they do not develop or sustain a competitive advantage.

Question 7

A firm's ability to achieve a competitive advantage is reflected in its financial capital base.

Question 8

Value of a product is measured by the variable and fixed costs associated with its production.

Question 9

For capabilities to be a source of competitive advantage,they must allow a firm to perform value-creating activities that competitors are also able to complete.

Question 10

A competitive advantage can be created when several resources are bundled together in a unique fashion.

Question 11

Not all resources and capabilities are core competencies.

Question 12

Analyzing the internal environment enables a firm to determine what it might be able to do by identifying what opportunities exist.

Question 13

Only capabilities that are valuable,rare,costly to imitate,and non-substitutable are sources of sustainable competitive advantage.

Question 14

Firms should seek to obtain a sustainable competitive advantage through implementation of strategies based on their particular resources,capabilities,and core competencies.

Question 15

Every core competence is a capability and every capability is a core competence.

Question 16

There are correct models and rules that must be followed when conducting a value chain analysis or the correct answer will not be determined.

Question 17

Capabilities may be costly to imitate if they are causally ambiguous or socially complex.

Question 18

Only capabilities that are valuable,common,costly to imitate,and substitutable can be strategic capabilities.

Question 19

A company can earn above-average returns only when the value it creates is less than the costs incurred to create that value.

Question 20

Capabilities can be developed quickly in response to changes in the new competitive landscape.

Question 21

Once a core competence has been identified and perfected,it is a stable source of competitive advantage.

Question 22

Compared to tangible resources,intangible resources are:

A) of less strategic value to the firm.
B) not the focus of strategic analysis.
C) a more potent source of competitive advantage.
D) more likely to be reflected on the firm's balance sheet.

Question 23

According to the discussion in the textbook,Polaroid:

A) did not recognize the shift from analog to digital technologies early enough.
B) was not able to overcome the inertia of its analog imaging capabilities so it could develop capabilities in digital imaging.
C) conducted inadequate internal analysis.
D) in the end,successfully negotiated the change in the competitive environment.

Question 24

The firm's reputation for quality is:

A) an example of a tangible resource.
B) not an issue of principal concern for a firm.
C) an example of an intangible resource that can provide a competitive advantage.
D) a resource for the firm on which funds can easily be borrowed.

Question 25

Tangible resources include:

A) assets that are people dependent such as know-how.
B) assets that can be seen and quantified.
C) organizational culture.
D) a firm's reputation.

Question 26

The objectives of various stakeholder groups often differ from one another,sometimes placing managers in situations in which they must make trade-offs.

Question 27

Sustainable development is strategically important business growth that depletes natural resources.

Question 28

Which of the following is NOT a factor affecting sustainability of a competitive advantage?

A) The availability of substitutes for a firm's core competence
B) The rate at which obsolescence of the core competence occurs
C) The imitability of a core competence
D) The availability of resources to the firm

Question 29

Which of the following statements is in disagreement with the discussion in your textbook about knowledge?

A) "Knowledge is power" and this is the rationale for individuals in organizations to hoard information.
B) Sharing knowledge does not diminish its value for any one person.
C) Knowledge is an intangible asset that can be leveraged.
D) Knowledge is not diluted when it is shared.

Question 30

Internal analysis enables a firm to determine:

A) what the firm can do.
B) what the firm should do.
C) what the firm should have done.
D) when the firm should act.

Question 31

The condition of uncertainty in managerial decision-making occurs when:

A) it is difficult to determine which core competency to nurture.
B) a wide range of internal issues must be examined.
C) there are changes in technologies,economic and political trends,and societal values.
D) managers are unable to determine the best course of action to take.

Question 32

Outsourcing is a way to add value to the business that converts an external value creating activity into an internal supplier.

Question 33

The proper matching of what a firm can do with what it might do allows the:

A) development of a top management team.
B) development of a successful low-cost strategy.
C) development of strategic intent,strategic mission,and the formulation of strategies.
D) formation of a strategic group.

Question 34

Which of the following is NOT an intangible asset?

A) Trademarks
B) Organizational culture
C) Production equipment
D) Brand name

Question 35

The three conditions that characterize difficult managerial decisions concerning resources,capabilities,and core competencies are:

A) complexity,rarity,and capacity.
B) uncertainty,complexity,and intraorganizational conflicts.
C) imitability,complexity,and interorganizational conflicts.
D) uncertainty,value,and availability of resources.

Question 36

Managers should establish measures that reflect how well the firm responds to needs and desires of key stakeholders.

Question 37

Outsourcing is a matter of convenience for most firms because they usually possess the resources and capabilities required for competitive advantage superiority in all primary and secondary activities.

Question 38

Intangible assets include:

A) the firm's reputation for its goods and services.
B) a firm's borrowing capacity.
C) depreciated capital assets.
D) manufacturing facilities.

Question 39

In the global economy,____ has made it increasingly difficult for a firm to develop and sustain a competitive advantage.

A) the Internet
B) the increasing homogenization of global culture
C) the increasing hostility to American culture
D) the development of second world economies into true global contenders

Question 40

Competitive advantage typically comes from:

A) individual resources.
B) one very outstanding resource.
C) several outstanding resources acting independently.
D) the unique bundling of several resources.

Question 41

Capabilities that other firms cannot develop easily are classified as:

A) costly to imitate.
B) rare.
C) valuable.
D) nonsubstitutable.

Question 42

Capabilities can be based on all of the following EXCEPT:

A) information-based resources.
B) intangible resources.
C) tangible resources.
D) unknown resources.

Question 43

What is the job of a Chief Learning Officer?

A) Implementing employee training and development programs
B) Educating customers about the firm's products
C) Developing an environment in which knowledge is widespread among employees
D) Establishing programs to promote education in the community

Question 44

Because knowledge acquisition and development has become so important in large companies,many firms have created a management position with the title of:

A) Vice President of Training and Development.
B) Senior Vice President of Training and Recruiting.
C) Chief Learning Officer.
D) Senior Information Executive.

Question 45

Organizational culture is:

A) usually quick to form.
B) a potential source of competitive advantage.
C) so difficult to analyze that most firms should choose to ignore it.
D) rarely unique to a single firm.

Question 46

The foundation for a firm's capabilities is (are) the:

A) ability to increase capacity as demand warrants.
B) amount of capital resources readily available.
C) good reputation a firm has built throughout its customer base.
D) skills and knowledge of its employees.

Question 47

When a firm such as Harley-Davidson has a strong brand name,it is challenged to:

A) develop another source of competitive advantage.
B) exploit the brand name as a competitive advantage.
C) develop new bundles of resources to be used to gain a competitive advantage.
D) identify new core competencies in the firm.

Question 48

The knowledge possessed by a firm's human capital is:

A) easily reproduced by competitor firms which allows them to obtain a competitive advantage.
B) a significant organizational capability and may be the root of all competitive advantage.
C) not a primary source of competitive advantage.
D) centered in a firm's top management team.

Question 49

____ 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

Question 50

McKinsey & Co.'s corporate culture is an example of a ____ capability.

A) valuable
B) substitutable
C) costly to imitate
D) rare

Question 51

McKinsey and Company recommends that firms identify ____ competencies around which their strategic actions can be framed.

A) 1 or 2
B) 3 or 4
C) 6 or 7
D) 10

Question 52

Global business leaders increasingly believe ____ may be the root of all competitive advantages.

A) knowledge
B) workforce skills
C) capital resources
D) business relationships

Question 53

A firm's resources and capabilities:

A) are always core competencies.
B) may be a source of incompetence.
C) are all a firm needs to focus on.
D) are inherited,not created.

Question 54

The critical executive skill of the age is fast becoming ____.

A) the ability to manage information systems.
B) the ability to balance and combine tangible and intangible resources.
C) the capacity to manage human intellect.
D) expertise in handling global relationships.

Question 55

When a resource or capability is valuable,rare,costly to imitate,and nonsubstitutable,firms may obtain:

A) a temporary competitive advantage.
B) a complex competitive advantage.
C) competitive parity.
D) a sustainable competitive advantage.

Question 56

To be a strategic capability,a capability must satisfy all of the following criteria EXCEPT:

A) be technologically innovative.
B) be hard for competing firms to duplicate.
C) be without good substitutes.
D) be valuable to customers.

Question 57

From the customer's point of view,a capability can be a core competence if it is:

A) easily accessible to workers.
B) supported by the top management team.
C) valuable and nonsubstitutable.
D) a stable feature of the firm's environment.

Question 58

Resources and capabilities are core competencies only when their use:

A) leads to a competitive advantage for the firm.
B) permits diffusion of threats in the external environment.
C) provides opportunities to defeat competitors.
D) encourages quick responses to changes in the global economy.

Question 59

Which of the following is a true statement about capabilities?

A) Capabilities derive from the firm's capacity to deploy resources that have been integrated to achieve a desired end state.
B) Capabilities emerge quickly when resources interact.
C) Human capital cannot be a firm's capability.
D) Capabilities become weaker and less valuable through repetition and practice.

Question 60

Amazon's ability to design the experience of e-shopping so it is enjoyable is an example of a(n) ____ capability.

A) valuable
B) rare
C) imitable
D) nonsubstitutable

Question 61

According to the textbook,UPS has built its success on the competitive fundamental strength of a unique:

A) value proposition
B) organizational strategy
C) organizational culture.
D) strategic intent

Question 62

FedEx based its success on the reconfiguration of a primary activity and a support activity.Which activities did they reconfigure?

A) operations and technological development
B) marketing / sales and procurement
C) service and firm infrastructure
D) outbound logistics and human resources

Question 63

Value chain analysis is a tool used to:

A) analyze a firm's external environment.
B) concentrate on a firm's internal environment without exercising a concern about the actions of those companies with which the firm competes.
C) understand the parts of the firm's organization that create value and those that do not.
D) determine how long an opportunity in a firm's external environment can be expected to last.

Question 64

In what way did Federal Express reconfigure the value chain that has resulted in changing the nature of the delivery business?

A) Decreased its technological development activity
B) Changed from an informal to a formal firm infrastructure
C) Reconfigured its outbound logistics and human resource management
D) Changed its procurement policies and procedures

Question 65

A firm's inability to understand how a competitor uses its capabilities to gain competitive advantage is an example of:

A) social complexity.
B) causal ambiguity.
C) the rarity of a capability.
D) the nonsubstitutability of a capability.

Question 66

Causally ambiguous means that:

A) the connection between cause and effect of capital is unclear in the firm.
B) rivals find it difficult to understand how the firm uses its capabilities to gain competitive advantage.
C) the connection between industry and firm performance is unclear.
D) the effect of a firm's resources are unclear to the firm itself.

Question 67

Capabilities are non-substitutable when:

A) there are no direct substitutes in the five forces model.
B) the firm's products cannot be a substitute for others' products.
C) the switching costs in the industry are very high.
D) they do not have strategic equivalents.

Question 68

In a globally competitive economy,the most valuable links on the value chain relate(s) to:

A) knowledge about customers.
B) corporate analysts.
C) the firm's primary activities.
D) the firm's support activities.

Question 69

Outsourcing is the:

A) selling of a value-creating activity to other firms in an industry.
B) selling of a value-creating activity to other firms,whether or not they are in your industry.
C) purchase of a value-creating activity from an external supplier.
D) use of computers to obtain data from the Internet.

Question 70

Southwest Airlines uses causal ambiguity to make its value-creating strategy difficult to imitate,and this is possible because of the firm's focus on:

A) globalization.
B) culture,technology,and human capital.
C) its unique branding of products.
D) cutting-edge advertising campaigns.

Question 71

Value creating primary activities include:

A) purchasing raw materials and supplies.
B) developing an appropriate corporate structure.
C) selecting appropriate distribution channels.
D) planning corporate strategy and setting goals.

Question 72

A major reason outsourcing is being used is that:

A) it allows top managers to focus on operational details.
B) few firms possess superior capability in all primary and support activities.
C) it permits unlimited access to capital resources.
D) competitors do not have access to the same external sources.

Question 73

Which of the following is NOT true about value chain analysis?

A) The value chain is a template the firm can use to understand its cost position.
B) This analysis helps to identify the single most important means that will facilitate strategy implementation.
C) Both primary and support activities should be analyzed.
D) It can be used to guide the implementation of business-level strategies.

Question 74

Four skills are essential for managers involved in outsourcing programs.Which of the following is NOT one of these skills?

A) strategic thinking
B) deal making
C) partnership governance
D) marketing expertise

Question 75

Value chain support activities include:

A) converting inputs into product.
B) developing advertising and promotional campaigns.
C) distributing the product to customers.
D) recruiting,hiring,and training personnel.

Question 76

When selecting activities to outsource,firms should select activities that:

A) capture and create value.
B) neutralize external threats.
C) are critical to their success.
D) are nonstrategic capabilities.

Question 77

Examples of support activities include all of the following EXCEPT:

A) technology development.
B) infrastructure.
C) service after the sale.
D) procurement.

Question 78

Which of the following is NOT a reason that costly to imitate capabilities can emerge?

A) Environmental opportunity
B) Social complexity
C) Historical conditions
D) Causal ambiguity

Question 79

Primary activities are:

A) involved with the support of the organization.
B) involved in a product's physical creation,its distribution,and its service after the sale.
C) the most important activities in the firm.
D) the activities that the top management team most values.

Question 80

Primary activities include all of the following EXCEPT:

A) outbound logistics.
B) operations.
C) marketing.
D) procurement.