Question 1

Whereas Porter concentrates attention externally on markets, advocates of the RBV focus attention:
A) externally on macro-external forces
B) externally on strategic groups
C) internally on organizational capabilities
D) internally on organizational structure

Accepted Answer

Advocates of the RBV focus attention internally on the organization's capabilities, resources, and competencies that can provide a sustainable competitive advantage. They believe that a firm's unique resources and capabilities are the primary source of its competitive advantage, rather than industry or market factors. This approach emphasizes the importance of leveraging internal strengths to create and sustain a competitive advantage.

Question 2

The RBV focuses on internal factors because:
A) An organization has control over its external factors only.
B) An organization has control over its internal factors only.
C) An organization has control over both internal and external factors.
D) An organization has no control over either internal or external factors.

Accepted Answer

The Resource-Based View (RBV) emphasizes an organization's internal capabilities in formulating strategy to achieve a competitive advantage. It posits that organizations can best understand and exploit their resources and capabilities, which are under their control, unlike external factors which are influenced by market dynamics and competition.

Question 3

Which of the following are isolating mechanisms identified by Penrose?
A) path dependencies in resource development
B) firm-specific knowledge possessed by managers
C) entrepreneurial vision of managers
D) all of these

Accepted Answer

Penrose identified all three isolating mechanisms - path dependencies in resource development, firm-specific knowledge possessed by managers, and entrepreneurial vision of managers.

Question 4

According to the RBV:
A) Resources provide the building blocks for constructing a firm's strategy.
B) Capabilities provide the building blocks for constructing a firm's strategy.
C) Resources and capabilities provide the building blocks for constructing a firm's strategy.
D) Human resources provide the building blocks for constructing a firm's strategy.

Accepted Answer

The Resource-Based View (RBV) suggests that a firm's resources and capabilities provide the building blocks for constructing a firm's strategy. Resources refer to a firm's assets and include things like financial resources, physical assets, and human resources. Capabilities refer to the firm's ability to use these resources to achieve a competitive advantage. Therefore, both resources and capabilities are important components of a firm's strategy according to the RBV.

Question 5

Capital is one of the basic types of resource identified by the RBV. Which of the following from this list is also a basic type of resource?
A) physical
B) labour
C) financial assets
D) debt

Accepted Answer

The answer of Capital is one of the basic types...

Question 6

Examples of capabilities could be the following:
A) a good track record in research and development
B) a reputation for using only high-quality inputs
C) a reputation for good customer service
D) all of these

Accepted Answer

All of these choices are examples of capabilities that a company could have. A good track record in research and development shows the company's ability to innovate and constantly improve their products. Having a reputation for using only high-quality inputs demonstrates their commitment to producing high-quality goods. Finally, having a reputation for good customer service suggests that the company values its customers and will go the extra mile to ensure their satisfaction. All of these capabilities can confer a competitive advantage and contribute to a company's long-term success.

Question 7

Which of the following statements is correct?
A) It is more difficult to assess tangible resources than intangible ones.
B) It is more difficult to assess intangible resources than tangible ones.
C) Tangible resources cannot be assessed.
D) Intangible resources cannot be assessed.

Accepted Answer

It is generally more difficult to assess intangible resources such as brand reputation or intellectual property than tangible resources such as financial assets or physical equipment, which can be easily quantified and measured.

Question 8

According to Barney, a firm orientated to a product market strategy is unlikely to generate economic rent for which reason:
A) If there are clear substitutes, then the buyers may choose one of them.
B) Other firms in the market cannot buy the same resources and eliminate any rent-making possibilities.
C) The market for such resources will value the assets to account for the future earnings potential, making the assets very expensive and eliminating the possibility of earning economic rent.
D) Competition is less important than resources and capabilities.

Accepted Answer

The market will price resources based on their future earnings potential, making them expensive and reducing the chance of earning economic rent.

Question 9

The VRIN characteristics stand for:
A) valuable, real, imitable, non-substitutable
B) valuable, rare, industrial, non-substitutable
C) valuable, real, independent, non-substitutable
D) valuable, rare, imperfectly imitable, non-substitutable

Accepted Answer

The correct VRIN characteristics are valuable, rare, imperfectly imitable, and non-substitutable. "Valuable" means that the resource or capability adds value to the firm and its products or services. "Rare" means that the resource or capability is not possessed by many other firms in the industry. "Imperfectly imitable" means that it is difficult for other firms to imitate or replicate the resource or capability. "Non-substitutable" means that there is no equivalent resource or capability that can be used instead.

Question 10

If each of the VRIN conditions is satisfied, then there is the possibility of a resource providing:
A) competitive advantage
B) sustainable competitive advantage
C) new market opportunities
D) more efficient and effective internal procedures

Accepted Answer

If each of the VRIN conditions (valuable, rare, inimitable, non-substitutable) is satisfied, then there is the possibility of a resource providing a sustainable competitive advantage. This means that the resource is not easily duplicated or substituted, and it could potentially provide a long-term advantage over competitors. The other choices may be possible outcomes of having valuable and rare resources, but they do not necessarily guarantee sustained advantage.

Question 11

Which of the following statements is correct?
A) Capabilities exist in functional areas, such as HR and marketing.
B) Capabilities occur when different functional capabilities are combined and integrated.
C) Any capability is only a source of competitive advantage when it is stronger than those of its immediate competitors.
D) all of these

Accepted Answer

All of the statements are correct. A refers to the existence of capabilities in specific functional areas, B refers to the combination and integration of different functional capabilities to create new capabilities, and C refers to the competitive advantage that a capability provides when it is stronger than those of competitors.

Question 12

An example of organizational assets is:
A) special manufacturing know-how
B) cheap suppliers
C) money in the pocket
D) the school that senior managers attended

Accepted Answer

Special manufacturing know-how is an example of organizational asset as it is a unique expertise possessed by the organization that gives it a competitive advantage over its rivals. Having this knowledge makes it easier for the organization to produce high-quality products at a lower cost, which in turn increases its profitability. The other options, cheap suppliers, money in the pocket, and the school that senior managers attended, are not examples of organizational assets.

Question 13

Which of these is NOT one of the central factors determining the sustainability of a firm's competitive advantage?
A) durability
B) transparency
C) transferability
D) accessibility

Accepted Answer

Accessibility is not typically considered a central factor in determining the sustainability of a firm's competitive advantage. The main factors are durability, transparency, and transferability.

Question 14

Core competencies are ______ (choose all that apply).
A) the glue that keeps teams together
B) the engine for new business development
C) the glue that binds suppliers and customers together
D) the engine for developing new collaborations

Accepted Answer

Core competencies are the engine for new business development. They are the unique abilities and strengths that a company possesses, which allow it to gain a competitive advantage and offer superior value to customers. Core competencies can include specialized knowledge, technical skills, strategic resources, and organizational capabilities. They are the foundation upon which a company builds its business and creates lasting success. A and C are incorrect because they refer to the idea of core values or principles that bind teams, suppliers, and customers together, which is distinct from core competencies. D is incorrect because while core competencies can help support collaboration, they are primarily focused on driving business development.

Question 15

Which one of the following is NOT a criterion that a core competence must fulfil?
A) The competency must be developed by the senior management of the organization.
B) The competency must provide potential access to a wide variety of markets.
C) The competency must make a significant contribution to an organization achieving its goals.
D) The competency must be difficult to imitate.

Accepted Answer

The development of a core competence does not necessarily have to be initiated by senior management. It can be developed by any level of the organization, as long as it fulfils the other criteria such as contributing significantly to the organization's goals, providing access to different markets, and being difficult to imitate.

Question 16

Which of the following has been put forward as a critique of the RBV?
A) a problematic view of knowledge
B) lacking a theory of a firm
C) a tautological argument
D) all of these

Accepted Answer

All three of these critiques have been put forward regarding the RBV. Some argue that the RBV has a problematic view of knowledge, as it treats it as an object that can be owned and controlled by a firm. Others suggest that it lacks a theory of the firm, as it focuses primarily on the resources and capabilities that a firm possesses rather than on the organization and structure of the firm itself. Finally, some argue that the RBV is tautological, as it defines resources and capabilities as those things that contribute to a firm's competitive advantage, without providing a clear explanation of how firms actually develop and leverage these resources and capabilities.

Question 17

Which of the following has been put forward as a critique of the RBV?
A) retrospective analysis not predictive
B) resources are too broad and vague a concept
C) what is inimitable is too hard to define in advance
D) all of these

Accepted Answer

All three of these critiques have been put forward by scholars to argue that the RBV has limitations. Retrospective analysis means looking back at a company's resources to explain success, which is not as useful for predicting future success. The concept of resources is also seen as overly broad and vague, creating difficulties in defining and measuring them. Finally, identifying what is truly inimitable (meaning it cannot be easily copied by competitors) may be challenging to do in advance.

Question 18

Dynamic capabilities are:
A) the routines of a firm that create competitive advantage
B) the processes of a firm that are able to reconfigure resources to respond to changes in the marketplace
C) the unique resources of a firm that achieve sustainable competitive advantage
D) the dynamic ways that firms use to achieve temporary advantages until competitors imitate them

Accepted Answer

Dynamic capabilities refer to the processes and organizational systems that allow a firm to respond effectively to changes in the marketplace and to reconfigure its resources to take advantage of new opportunities or to respond to threats. It involves a firm's ability to adapt and innovate in order to sustain competitive advantage over time.

Question 19

Which of the following is NOT an example of dynamic capabilities?
A) technological know-how
B) intellectual property
C) business process knowledge
D) friendly working environment

Accepted Answer

A friendly working environment is not an example of dynamic capabilities. Dynamic capabilities refer to a firm's ability to adapt and develop its resources and capabilities over time to respond to changing market conditions and customer needs. Technological know-how, intellectual property, and business process knowledge are all examples of dynamic capabilities because they can be leveraged to create competitive advantages and drive innovation.

Question 20

Which of the following is NOT an example of dynamic capabilities?
A) state-of-the-art machinery
B) customer and business relationships
C) reputation
D) organizational culture and values

Accepted Answer

Dynamic capabilities refer to a company's ability to adapt and respond to changes in the market and industry, often through intangible assets such as knowledge, relationships, and culture. State-of-the-art machinery, while important for efficient production, is not considered a dynamic capability as it does not directly relate to a company's ability to adapt and innovate.

Quiz 3: Strategy, Resources and Capabilities

Whereas Porter concentrates attention externally on markets, advocates of the RBV focus attention:

The RBV focuses on internal factors because:

Which of the following are isolating mechanisms identified by Penrose?

According to the RBV:

Capital is one of the basic types of resource identified by the RBV. Which of the following from this list is also a basic type of resource?

Examples of capabilities could be the following:

Which of the following statements is correct?

According to Barney, a firm orientated to a product market strategy is unlikely to generate economic rent for which reason:

The VRIN characteristics stand for:

If each of the VRIN conditions is satisfied, then there is the possibility of a resource providing:

Which of the following statements is correct?

An example of organizational assets is:

Which of these is NOT one of the central factors determining the sustainability of a firm's competitive advantage?

Core competencies are ______ (choose all that apply) .

Which one of the following is NOT a criterion that a core competence must fulfil?

Which of the following has been put forward as a critique of the RBV?

Which of the following has been put forward as a critique of the RBV?

Dynamic capabilities are:

Which of the following is NOT an example of dynamic capabilities?

Which of the following is NOT an example of dynamic capabilities?