Strategy Module Quiz

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Questions and Answers

Which statement regarding costs at the break-even point is false?

The sum of fixed and variable costs is equal to total sales at break-even.

The total sales at break-even will always exceed total costs.

Within a given relevant range, variable cost per unit may change with production volume. (correct)

Within a given relevant range, fixed costs are unaffected by changes in production volume.

Which of the following is NOT a recognized function of accounting?

Scorekeeping

Attention directing

Problem solving

Financing (correct)

What primarily distinguishes financial accounting from management accounting?

That only management accounting deals with cost analysis.

That only financial accounting pertains to monetary transactions.

That only financial accounting provides information for accountability.

The stakeholders addressed with the accounting information. (correct)

Which statement about responsibility centers is false?

A 'cost center' refers to responsibility centers that only consider revenue. Signup and view all the answers

By 'control', which meaning is primarily intended?

Using information to achieve set objectives. Signup and view all the answers

Which method is NOT typically used in capital expenditure evaluation?

Assessing the financial costs reported in the income statement. Signup and view all the answers

Which statement about contribution is false?

Contribution equals the sum of a product's selling price and variable cost. Signup and view all the answers

The balance sheet remains balanced primarily because:

The total value of assets equals the total value of equity and liabilities. Signup and view all the answers

What is the primary aim of corrective action when following up actual results that deviate from budgeted numbers?

Changing behavior of people in the organization Signup and view all the answers

What does 'throughput contribution' primarily focus on in an organization?

Maximizing the value created from bottleneck resources in an organization Signup and view all the answers

Which of the following best describes budgeting?

A medium-term operational financial plan Signup and view all the answers

Which of these is not considered a variant of transfer pricing?

Share of fixed cost Signup and view all the answers

When an organization operates at full capacity, which of the following methods can help in meeting customer demands?

Ranking products for prioritization Signup and view all the answers

Which of the following best describes Key Success Factors (KSF) in an industry?

What customers want and what a firm needs to do to survive competition Signup and view all the answers

What is the primary viewpoint of the CSR concept?

The firm is embedded in an ecosystem it needs to adapt to Signup and view all the answers

Using product design to achieve cost advantage primarily focuses on which of the following?

Designing products to ease production and reduce costs Signup and view all the answers

The bargaining power of buyers decreases profitability when:

Customers are well-informed about products and production conditions Signup and view all the answers

Why do firms need a clear strategy?

It provides coherent guidance for decision-making Signup and view all the answers

What issue is associated with being 'stuck-in-the-middle' in business strategy?

Sales may stagnate and fail to grow Signup and view all the answers

What is necessary for the success of a low-cost strategy?

Maintaining the lowest costs in the industry Signup and view all the answers

What is essential for making a differentiation strategy successful?

Having a unique feature in your product offering Signup and view all the answers

Competitor analysis primarily helps a company to achieve which of the following?

Foresee competitors' strategies, decisions, and reactions Signup and view all the answers

What is a crucial factor in generating sustainable competitive advantage?

Accessing at least one unique capability Signup and view all the answers

The concept of corporate strategy primarily focuses on what aspect?

How to grow a business Signup and view all the answers

In the five forces model, what situation drives down profitability in the industry?

Excess production capacity Signup and view all the answers

What does the concept of 'strategic fit' primarily refer to?

The alignment of business environment and the firm’s resources Signup and view all the answers

What does PEST-analysis describe?

The macro-environment for a business Signup and view all the answers

What does a strategic group analysis identify?

A group of companies pursuing strategies along the same central dimensions Signup and view all the answers

What concept is defined as 'the way we do things around here'?

Culture Signup and view all the answers

Stories carry history, values and what else?

Group identity Signup and view all the answers

Which team configuration is extensively used at the White House to allow the president to focus on external relations?

Simple hierarchy Signup and view all the answers

If a manager encounters an important problem that seems impossible to solve, what would Bolman and Deal suggest?

Use different lenses to analyze the problem. Signup and view all the answers

In 'Theory of the Firm', what do Jensen and Meckling believe is the primary value of stock analysts?

To provide oversight on managers Signup and view all the answers

Which of the following structural configurations responds slowly to external change?

The professional bureaucracy Signup and view all the answers

According to Mintzberg, what does a simple structure consist of?

A large operating core with few managerial layers Signup and view all the answers

What do Bolman and Deal identify as a characteristic of organizations that challenge managers?

Conflicting goals and objectives Signup and view all the answers

What is the significance of high replicability of a resource or capability?

It is a good base for competitive advantage. Signup and view all the answers

What does a stakeholder approach imply about the business enterprise?

Top management needs to align all interests in the enterprise. Signup and view all the answers

When is the value chain particularly useful?

To analyze value-creating activities in the organization. Signup and view all the answers

What outcome is typically associated with employee participation?

Increases both productivity and morale. Signup and view all the answers

How does the political frame view organizations?

As competitive environments full of conflict. Signup and view all the answers

How are organizational goals set according to the political frame?

Through a process of negotiation and bargaining. Signup and view all the answers

What is a characteristic of personal power in an organization?

It is based on social relationships and interpersonal skills. Signup and view all the answers

What does the symbolic view of an organization focus on?

Understanding the organization as a dynamic stage design. Signup and view all the answers

Study Notes

Week 1: Strategy Module Quiz - Grant

Key Success Factors (KSF): Describe factors neutralizing competitors, competitive advantages of market leaders, and factors driving market growth, and what customers want and what a firm needs for survival in a competitive market.
CSR Concept: Focuses on a broader definition of return on investment (Corporate Social Returns), viewing the firm within an ecosystem needing adaptation and as a donor for social activities (Corporate Social Responsibility). Focuses on corporate responsibilities, with profit as a less important component/focus.
Product Design for Cost Advantage: Designing products to be easily produced and keep production costs low is key. Avoiding standardized concepts and maintaining low design costs is important.
Bargaining Power of Buyers and Industry Profitability: High buyer power in an industry drives down profitability. Factors are high cost of changing between products, informed customers, diversified needs among customers, or if the product is not differentiated.
Importance of Strategy: Strategy provides a coherent theme that simplifies decision-making within a firm, and crucial for recruitment and investor confidence, and is essential for legal permissions.
Stuck-in-the-middle Problem: The middle market is the smallest, and there are difficulties in classifying products within specific industries, as well as generating a weak position in the market.
Sustainable Low-Cost Strategy: Achieving success in low-cost strategies is sustainable only by having the lowest cost in the industry and signaling low product quality.

Week 1: Additional Concepts

Differentiation Strategy Success: Successful differentiation requires unique features, different channels in reaching customers, signaling that a newly updated product model is being offered, and or that the firm has a highest market volume in that industry.
Competitor Analysis: Analyzing competitors' resources, identifying the most profitable competitors, and forecasting their strategies/reactions is a valuable part of competitor analysis.
Sustainable Competitive Advantage: Generated through having access to multiple unique capabilities within an organization and/or to many different resources.
Corporate Strategy: Involves determining the industries or market sectors in which to compete.

Week 2: Organizations Module Quiz - Bolman, Deal

Employee Participation: Studies show employee participation increases both morale and productivity.
Political Frame: Organizations are viewed as "jungles" or places where goals are mutually agreed upon by coalitions, or set through negotiation and bargaining. It's not a process of consensus or top-down edict.
Personal Power: Legitimate authority, attractiveness and social adeptness, ability to reward (jobs, money, support), and the ability to punish and interfere.
Symbolic View: Structure is designed by goals and environment. Organizational structure is a stage design for the workplace.
Leadership in the Human Resource Frame: Leadership is about advocacy and empowerment in organizations.
"Way We Do Things Around Here": This concept is referred to as culture in an organization. This includes values, myths, metaphors, and stories..
Organizational Challenges: Organizations are complex, surprising, deceptive, ambiguous.

Week 3 & 4: Management Control

Break-Even Volume: The point where profit equals loss, or the safety margin equal to the sum of variable costs.
Accounting Functions: Accounting plays a role in problem-solving, directing attention, and record keeping.
Financial vs. Management Accouting: Financial accounting provides information for external stakeholders, while management accounting focuses on internal stakeholders.
Responsibility Centers: Responsibility centers apply to controlling people within an organization and include profit centers and cost centers.
Control: Using information to meet organizational goals.
Capital Expenditure Evaluation: Methods for evaluating capital expenditure is done differently based on the organization and its goals.

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Description

Test your understanding of key success factors in strategy, the role of corporate social responsibility, and the importance of product design for cost advantage. This quiz also covers the impact of buyer bargaining power on industry profitability. Assess your knowledge on these vital concepts in strategic management.

Strategy Module Quiz - Week 1

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