Question 1

The resource-based theory views the firm as a bundle of resources capable of creating value for shareholders and other stakeholders.

Accepted Answer

The resource-based theory posits that a firm's resources and capabilities are key to achieving competitive advantage and creating value for shareholders and stakeholders.

Question 2

Competitive advantage represents the ability of an organization to consistently outperform rivals in a given market.

Accepted Answer

Competitive advantage allows an organization to deliver greater value or lower costs than its competitors, leading to superior performance.

Question 3

A typical organization has a long list of distinctive competencies.

Accepted Answer

A typical organization usually has a few distinctive competencies that set it apart from competitors, rather than a long list.

Question 4

Socially complex activities can be, and usually are, understood by one individual and are easy for outsiders to replicate.

Accepted Answer

Socially complex activities often involve tacit knowledge, cultural nuances, and interpersonal dynamics that are difficult for outsiders to fully understand and replicate.

Question 5

Royal Bank of Scotland has followed a strategy of offering a variety of products under one brand name.

Accepted Answer

The answer of Royal Bank of Scotland has followed a...

Question 6

The appropriability of resources refers to whether a competitor can capture the profit it generates.

Accepted Answer

The appropriability of resources refers to the extent to which a firm can capture the profits generated from its resources. If a competitor can easily capture the profits, then the appropriability of the resources is low.

Question 7

In the UK, Marks and Spencer allotted 10% of store space for employee welfare activities such as in-house medical care.

Accepted Answer

Marks and Spencer allotted 10% of store space for employee welfare activities such as in-house medical care.

Question 8

The metaphor of the bathtub in describing management of resources describes the level of water in the tub as 'resource stocks' and the water entering the tub as 'resource flows'.

Accepted Answer

The bathtub metaphor is commonly used to illustrate resource management, where the water level represents the stock of resources, and the inflow and outflow of water represent the flow of resources into and out of the system.

Question 9

In the 1990s, the UK's Marks and Spencer stores expanded through Canada, Europe and the United States.

Accepted Answer

Marks and Spencer expanded internationally during the 1990s, including opening stores in Canada, Europe, and the United States.

Question 10

Employee socialization occurs not only by formal instruction, but also by observing other employees at work.

Accepted Answer

Employee socialization involves both formal training and informal learning through observation and interaction with colleagues.

Question 11

Most competitive resources are not causally ambiguous (e.g., the connection between activities and success is readily apparent).

Accepted Answer

Causal ambiguity refers to the difficulty in understanding the exact reasons behind a firm's success, making it hard to replicate. Most competitive resources are causally ambiguous, as their connection to success is not readily apparent.

Question 12

When things go well, people tend to attribute success to their own efforts.

Accepted Answer

This is known as the self-serving bias, where individuals attribute positive outcomes to internal factors like their own efforts, while attributing failures to external factors.

Question 13

After World War II, the two railroad firms, Rock Island and Chicago-Northwestern, differed in their explanation of their economic downturns.

Accepted Answer

The Rock Island and Chicago-Northwestern railroads had different perspectives on their economic challenges post-World War II, reflecting varied strategic and operational issues.

Question 14

Luck can play a role in the resource environments available to a given company at a point in time.

Accepted Answer

Luck can influence the availability of resources, such as market conditions or technological breakthroughs, which can impact a company's success.

Question 15

The seven steps in managing resources include defining distinctive competencies by doing comparison with other firms.

Accepted Answer

Defining distinctive competencies involves identifying what sets a firm apart from its competitors, which often requires comparison with other firms to understand unique strengths and capabilities.

Question 16

Competence-destroying change in the environment can involve new competitors, regulation, or new technology.

Accepted Answer

Competence-destroying change refers to shifts that render existing skills, technologies, or business models obsolete, often due to new competitors, regulations, or technological advancements.

Question 17

The web's harmful affect on brick and mortar travel agency business is an example of 'competence-enhancing' change.

Accepted Answer

The web's impact on brick-and-mortar travel agencies is an example of 'competence-destroying' change, as it undermines the traditional skills and business models of these agencies.

Question 18

Resource stocks can experience an increase in value, an instance of 'competence-destroying' change.

Accepted Answer

Resource stocks typically increase in value due to 'competence-enhancing' changes, such as improved extraction technologies or increased demand, rather than 'competence-destroying' changes, which would undermine existing capabilities.

Question 19

Current competence and the resources that support it tend to erode.

Accepted Answer

Competence and resources can erode over time due to changes in technology, market dynamics, and organizational shifts, requiring continuous adaptation and renewal.

Question 20

Every strategist inherits a stock of resources and must sometimes leave them behind, and assets more appropriate to changing conditions must be developed.

Accepted Answer

Strategists often need to adapt to changing conditions by developing new assets and resources, while sometimes leaving behind those that are no longer suitable.

Quiz 2: Developing Resources