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60 Cards in this Set
- Front
- Back
Ethical principles in business
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Are not materially different from ethical principles in general
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The contentions that (1) many of the same standards of what's ethical and what's unethical resonate with peoples of most societies regardless of local traditions and cultural norms and (2) to the extent there is common moral agreement about right and wrong actions, common ethical standards can be used to judge the conduct of personnel at companies operating in a variety of country markets and cultural circumstances are defining beliefs of
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The school of ethical universalism
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Paying bribes and kickbacks to grease business transactions
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Is one of the thorniest ethical problems that multinational companies face because paying bribes is normal and customary in some countries and ethically or legally forbidden in others
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According to integrated social contracts theory, the ethical standards a company should try to uphold
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Are governed both by (1) a limited number of universal ethical principles that are widely recognized as putting legitimate ethical boundaries on actions and behavior in all situations and (2) the circumstances of local cultures, traditions and shared values that further prescribe what constitutes ethically permissible behavior and what does not—but universal norms always take precedence over local ethical norms
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The three categories of managers that stand out with regard to the beliefs and commitments they have to ethical and moral principles in business affairs are:
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Moral managers, amoral managers and immoral managers
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An unintentionally amoral manager is one who
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Holds firmly to the view that anything goes, so long as actions and behaviors are not clearly ruled out by prevailing legal and regulatory requirements
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The major drivers of unethical managerial behavior include
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Ethically corrupt corporate cultures and overzealous or obsessive pursuit of wealth accumulation, power, status and other selfish interests
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The compliance approach to dealing with or managing ethical conduct
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Is favored at companies whose managers (1) lean toward being somewhat amoral but recognize the value of having ethically upstanding reputations or (2) are moral and see strong compliance methods as the best way to impose and enforce ethical rules and high ethical standards
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The notion of social responsibility as it applies to businesses concerns
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A company's duty to operate in an honorable manner, provide good working conditions for employees, be a good steward of the environment and actively work to better the quality of life in the local communities where it operates and in society at large
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In judging how far a company should go in pursuing social responsibility initiatives, it is fair to say that
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There is no simple or widely accepted standard for judging when a company has or has not gone far enough in fulfilling its citizenship responsibilities
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Executing strategy
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All of these
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What makes the managerial task of executing strategy so challenging and demanding is
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The demanding people-management skills required, the resistance to change that has to be overcome and the perseverance necessary to get a variety of initiatives launched and kept moving along
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The principal managerial components of the strategy execution process include which of the following?
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Instituting policies and procedures that facilitate rather than impede strategy execution and tying rewards to the achievement of strategic and financial targets and to good strategy execution
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In devising an action agenda to implement and execute a new or different strategy, the place for managers to start is with
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A probing assessment of what the organization must do differently and better to carry out the strategy successfully—then they should consider precisely how to make the necessary internal changes as rapidly as possible
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The capability-building process
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Requires first developing the ability to do something, however imperfectly or inefficiently; second, translating this ability into a competence and/or capability by learning to do the activity consistently well and at an acceptable cost; and then continuing to polish and refine its know-how in an effort further improve its performance, ideally striving to match or beat rivals in performing the activity
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Building organizational competencies and capabilities
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Involves a multi-stage process that is hard for rivals to replicate and that occurs over a period of months and years
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A key to transforming a company's core competencies and competitive capabilities into competitive advantage hinges on
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Building competitively valuable competencies and capabilities that (1) are very difficult or costly for rivals to emulate, (2) push a company closer to true operating excellence and (3) give a company an edge over rivals in the marketplace
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Outsourcing critics contend that shifting responsibility for performing value-chain activities to outside specialists
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Can hollow out a company's knowledge base and capabilities, leaving it at the mercy of outsider suppliers and short of the resource strengths to be a master of its own destiny
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Delegating greater authority to subordinate managers and employees
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Creates a more horizontal or flatter organization structure with fewer management layers and usually acts to shorten organizational response times
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The organizational characteristics of many of today's companies include
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All of these
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The guidelines for designing an incentive compensation system that will help drive successful strategy execution include
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Making the payoff for meeting or beating performance targets a major, not minor, piece of the total compensation package
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From the standpoint of promoting successful strategy execution, it is important that the firm's motivation and reward system
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Accentuate positive rewards but also carry the risk of punishment for poor performance
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To build a total quality culture and achieve full value from the use of TQM or Six Sigma initiatives, managers can take such action steps as
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Signaling unequivocal and unyielding commitment to total quality and operating excellence; setting measurable objectives for quality and continuous improvement; screening out job applicants who don't have the right aptitudes or attitudes for quality-based performance; instituting employee training programs; and using online systems to give employees immediate access to best practice information and experiences
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The Six Sigma process of define, measure, analyze, improve and control (DMAIC) is
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An improvement system for existing processes falling below specification and needing incremental improvement—the DMAIC process is a particularly good vehicle for improving performance when there are wide variations in how well an activity is performed
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Six Sigma processes
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Can be used for both improving existing business processes and for developing new processes or products
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Total quality management (TQM) programs
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Entail creating a corporate culture bent on continuously improving the performance of every task and every value-chain activity
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Which of the following is not a tool that managers can use to promote operating excellence and further the cause of good strategy execution?
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Strategic resource training
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Business process reengineering is a tool for
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Pulling the pieces of strategy-critical activities out of different departments and unifying their performance in a single department or cross-functional work group that has charge over the whole process and can be held accountable for performing the activity in a better, cheaper and/or more strategy-supportive fashion
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Prescribing new policies and operating procedures can aid the task of implementing strategy
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By helping align the actions and behavior company personnel with the requirements for good strategy execution, placing limits on independent action, helping overcome resistance to change, helping enforce consistency in how things are done in scattered geographic units and promoting the creation of a work climate that facilitates good strategy execution
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Managers charged with implementing and executing strategy need to be deeply involved in the budgeting and resource allocation process because
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Both A and B
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A company is said to be an international competitor when
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It competes in a select few foreign markets (and perhaps has only modest ambitions to enter additional country markets)
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One of the biggest strategic challenges to competing in the international arena include
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Whether to offer a mostly standardized product worldwide or whether to customize the company's offerings in each different country market to more precisely match the tastes and preferences of local buyers
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A U.S. manufacturer that exports goods made at its U.S. plants for shipment to foreign markets
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Becomes more competitive in foreign markets when the U.S. dollar declines in value against the currencies of the countries to which it is exporting
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The defining characteristic of multicountry competition is
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A market situation where there's considerable cross-country variation in market conditions and in the companies that are contending for leadership—with the result that the market contest among rivals in one country is not closely connected to the market contests in other countries
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The generic strategic options for competing in foreign markets include
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All of the above
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The advantages of using an export strategy to build a customer base in foreign markets include
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Minimizing risk and capital requirements
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A "think global, act global" approach to strategy-making is preferable to a "think local, act local" approach when
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Country-to-country differences are small enough to be accommodated with the framework of a mostly uniform global strategy
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The essential difference between a "think global, act global" and a "think global, act local" approach to strategy-making is that
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The "think global, act local" approach gives local managers more latitude to make minor strategy variations where necessary to better satisfy local buyers and to better match local market conditions
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To use location to build competitive advantage, a company that operates multinationally or globally must
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Consider (1) whether to concentrate each activity it performs in a few select countries or disperse performance of the activity to many nations and (2) in which countries to locate particular activities
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The classic reason why companies choose to locate a particular value chain activity in a particular country is
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Low cost
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The most important drivers shaping a company's most appealing strategic options fall into two broad categories:
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The nature of industry and competitive conditions and the firm's own resource strengths and weaknesses, competitive capabilities, opportunities and threats and market position
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To be successful in emerging industries, companies usually have to fashion a strategy that includes such strategic elements as
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Pushing hard to perfect the technology, improve product quality and develop additional attractive performance features
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A company competing in a rapid-growth industry
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Needs a strategy predicated on growing faster than the market average, so that it can boost its market share and improve its competitive standing vis-à-vis rivals
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The transition to a slower-growth, maturing industry environment tends to result in
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Growing buyer sophistication and more head-to-head competition for market share
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In a maturing market where the rates of growth are on the decline, rival firms can often improve their competitive position in the marketplace by
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Pruning marginal products and models, improving value chain efficiency, trimming costs, emphasizing cost reduction, acquiring rival firms at bargain prices, building new or more flexible competitive capabilities and expanding internationally
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A slow-exit type of end-game strategy involves
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A gradual phasing down of operations coupled with an objective of generating the greatest possible harvest of cash from the business for as long as possible
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Competitive success in fast-changing or high velocity markets tends to hinge on a company's ability to
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Improvise, experiment, adapt, reinvent and regenerate as market and competitive conditions shift rapidly and sometimes unpredictably
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Runner-up firms or second-tier firms often have to overcome such obstacles as
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Less money to spend on mass media advertising, difficulty in gaining customer recognition, less access to scale economies and limited funds for capital expansion or making acquisitions
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The overriding objective of a harvesting strategy is to
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Maximize short-term cash flows from operations
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Which of the following is not among the ten commandments for crafting successful business strategies?
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Always pursue full vertical integration so as to have full command of the industry value chain
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Diversification merits strong consideration whenever a single-business company
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Is faced with diminishing market opportunities and stagnating sales in its principal business
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The three tests for judging whether a particular diversification move can create value for shareholders are
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The attractiveness test, the cost-of-entry test and the better-off test
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The cost-of-entry test for evaluating whether diversification into a particular industry is likely to build shareholder value involves
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Considering whether a company's costs to enter the target industry are low enough to preserve attractive profitability or so high that the potentials for good profitability and return on investment are eroded
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A company can best accomplish diversification into new industries by
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Acquiring a company already operating in the target industry, creating a new subsidiary internally to compete in the target industry or forming a joint venture with another company to enter the target industry
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A joint venture is an attractive way for a company to enter a new industry when
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A firm is missing some essential skills or capabilities or resources and needs a partner to supply the missing expertise and competencies or fill the resource gaps
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A company pursuing a related diversification strategy would likely address the issue of what additional industries/businesses to diversify into by
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Identifying an attractive industry whose value chain has good strategic fit with one or more of the firm's present businesses
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The best place to look for cross-business strategic fits is
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Anywhere along the respective value chains of related businesses—no one place is best
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Different businesses are said to be "unrelated" when
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There is an absence of competitively valuable strategic fits between their respective value chains
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Which of the following is the best example of unrelated diversification?
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An electrical equipment manufacturer acquiring an athletic footwear company
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A "cash hog" type of business
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Is one that generates cash flows that are too small to fully fund its operations and growth
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