Q1: In what ways did the cognitive revolution in 1950s influence theories on decision making in organizations
Answer: It provides a radical critique of the instrumental and positivist view of human beings.Answer
Q2: Allison described three different decision-making models. What was his major conclusion concerning the three models
Answer: The three models offer complementary perspectives on how decision making is emerging.Answer
Q3: What is the significance of group thinking in the context of decision making
Answer: It describes how a group can create shared patterns of understanding that narrow their capacity to take ‘open-minded’ decisions.Answer
Q4: What are the major sources of group thinking
Answer: Group thinking derives from the exaggerated belief in the group’s competence and moral.Answer
Q5: What is true about institutional theory
Answer: Institutional theory points out that organizations are influenced by numerous factors, such as political decisions, consumer behaviour and economic conditions, outside the organization.Answer
Q6: How can institutions be defined in the context of organizations? Pick the correct statement
Answer: An institution can be defined as having shared rules and typifications that identify categories of social actors.Answer
Q7: In what ways does new and old institutionalism differ
Answer: New institutionalism is paying more attention to symbolic and cultural factors.Answer
Q8: DiMaggio and Powell describe three forms of isomorphism in their article on institutional theory. What is true about coercive isomorphism? Pick the correct option
Answer: Coercive isomorphism describes institutionalized rules and procedures that are compulsory to adhere to.Answer
Q9: In Hofstede’s study of national cultures an important analytical category was low/high power distance. What is true about this category
Answer: Power distance measures the degree of perceived hierarchical relations in the firm.Answer
Q10: Thompson has introduced some important observations on innovation that elaborate upon Schumpeter’s view. What is true about Thompson’s view on innovation? Pick the correct statement
Answer: Innovation involves the ability of the organization to change internally and to adapt to the market.Answer
Q11: Innovation is a rapidly growing field of study. Which of the following alternatives is true about the current research scene
Answer: Innovation research is focused on both products and services.Answer
Q12: Research on innovation suggests that innovation work typically goes through distinct phases. What is true about these phases
Answer: The normative innovation literature describes innovation as a linear process.Answer
Q13: What is true about the links between innovation and entrepreneurship
Answer: Innovation work is often initiated by individuals who are entrepreneurial in their orientation.Answer
Q14: The concept of interessment is important in describing the social nature of innovation. What is true about this concept? Pick the correct statement
Answer: It is the process of enrolling partners and spokesmen for new innovations.Answer
Q15: Social nature of innovations is discussed. Pick the statement that best captures this view on innovation
Answer: The social nature of innovation makes the observation that the world of innovators is never solely technological.Answer
Q16: Schumpeter is one of the founding fathers for the scientific study of entrepreneurship and innovation. Which of the following statements best captures his view on innovation
Answer: Innovation involves elements of destruction as well as creation.Answer
Q17: Which statement best captures the so-called systemic view of innovation
Answer: It describes the interrelated fields of organizations that mutually support and help one another.Answer
Q18: The concept of complex product systems is used to describe innovation processes in certain industries, for instance the construction industry. What is true about such systems
Answer: Complex product systems have many interconnected and customized elements organized in a hierarchical way.Answer
Q19: What is true about innovation and organizational size
Answer: Research results are inconsistent in showing the effectiveness of large firms in facilitating innovation.Answer
Q20: Two basic theoretical perspectives of change in organizations. Which are they? Pick the correct option
Answer: Planned change and emergent changeAnswer
Q21: Selznick described organizations as institutions. What is the significance of this for our understanding of change
Answer: By using the term institution he pointed at organizations as responsive, adaptive organisms.Answer
Q22: Kurt Lewin described change as passing through a number of distinct phases. Which are the phases
Answer: Unfreezing, moving and freezingAnswer
Q23: Change is an important concept in the systems view of organizations. Which statement best captures the systems view on change
Answer: The systems view argues that change requires an understanding of the system as a whole.Answer
Q24: The new institutional theory offers new perspectives on change. Which of the following statements best captures the essence of new institutional theory
Answer: Through processes of isomorphism, organizations become more like each other.Answer
Q25: What are the major challenges with radical change processes? Pick the correct option
Answer: Radical change involves major changes in belief systems in organizations.Answer
Q26: Which of the following statements captures the basic definition of continuous improvement
Answer: It is a strategy for achieving large-scale changes through a step-wise process.Answer
Q27: According to Kurt Lewin, there are a number of reasons for resistance to change. Which statements fits with Lewin’s view on resistance to change
Answer: Resistance to change occurs because of fear of change.Answer
Q28: The literature on change in organizations suggests a number of ways of dealing with resistance to change. Which of the following statements does not describe a way of dealing with resistance
Answer: Make sure that all conflicts are avoided.Answer
Q29: There are authors that question the traditional view on resistance to change. Which of the following statements is an argument given by the proponents of this view
Answer: Resistance to change seems to imply that the problem mainly lies with the subordinates.Answer
Q30: If you save £230 for 4 years at 5 per cent simple interest, how much interest would you earn
Answer: £46Answer
Q31: If you save £230 for 4 years at 5 per cent compound interest, how much interest will you earn
Answer: £49.57Answer
Q32: The payback period is the time it takes for future returns to payback the initial capital outlay
Answer: Wrong – FalseAnswer
Q33: If investment A has an IRR of 8% and investment B has an IRR of 4% then A is probably the better investment
Answer: Correct – TrueAnswer
Q34: The IRR is
Answer: The effective annual percentage rate of return on the capital outlayAnswer
Q35: Compound interest is when the interest earned on the principal
Answer: Accumulates with the principal after being added at the end of the time periodAnswer
Q36: If the future value of an investment is £30,000 and rate of interest to be applied is 5%, how long would it take £15,000 invested today to achieve this future value
Answer: Just over 14 yearsAnswer
Q37: The purchase price of an annuity that guarantees an end of year income of £5,000 over 10 years if the current annuity rate is 8% is
Answer: £33,550Answer
Q38: Special computer packages have been developed to undertake real-life simulation
Answer: Correct – TrueAnswer
Q39: Simulations can keep track of several different kinds of information, including: orders, inventory, and financial planning
Answer: Correct – TrueAnswer
Q40: Random numbers are used
Answer: To describe the uncertainty of input valuesAnswer
Q41: Monte Carlo simulation ensures that
Answer: The simulated probability distribution will be the same as the actual probability distributionAnswer
Q42: The Excel function RAND() can be used to generate random numbers between 0 and 1
Answer: Correct – TrueAnswer
Q43: The Excel function RANDBETWEEN() can be used to generate random numbers between 0 and 1
Answer: Wrong – FalseAnswer
Q44: To simulate a uniform distribution use the Excel expression: = a + (b – a)*RAND()
Answer: Correct – TrueAnswer
Q45: To generate a random number from a normal distribution use the Excel function: =NORM.INV(RAND(), μ, s)
Answer: Correct – TrueAnswer
Q46: The binomial distribution can be simulated using the Excel function: = BINOM.INV(n, p, RAND())
Answer: Correct – TrueAnswer
Q47: Which of the following statements corresponds to the general definition of learning provided? Pick the correct option
Answer: Learning refers to the change in a person’s behaviour in a given situation.Answer
Q48: What is the meaning of conditioning in learning theory
Answer: It describes as the process of responding to external stimuli.Answer
Q49: Reinforcement is an important concept in learning theory. Which statement is true about reinforcement
Answer: Reinforcement deals with the process of stimulating certain behaviours to occur.Answer
Q50: What are the basic assumptions of the information perspective on learning
Answer: It deals with how individuals process information and respond to the external world.Answer
Q51: Which of the following statements is true about the communities of practice perspective on learning
Answer: The communities of practice perspective argues that learning takes place in social settings in which a shared world of practice is developed.Answer
Q52: Why is the shift from the individual to the organizational level tricky in studying learning
Answer: Learning is a concept connected to individuals; organizations, per se, cannot learn.Answer
Q53: Etzioni describes three types of organization in terms of their use of knowledge. Which are they
Answer: Professional organizations, service organizations and non-professional organizationsAnswer
Q54: The distinction between expert and local knowledge is important in knowledge management theory. What is true about the two forms of knowledge
Answer: Expert knowledge is typically protected by layers of procedures and routines that are out of reach for laymen.Answer
Q55: What is true about knowledge work
Answer: It is work that requires formal education.Answer
Q56: Why is the concept of risk important in order to understand decision making in organizations
Answer: It is important because the possibility of different decision alternatives needs to be weighed against the risks that may arise.Answer
Q57: A global – as opposed to international – strategy involves
Answer: a single strategy for the entire global network of subsidiaries and partners.Answer
Q58: A global consumer culture means that
Answer: there is a world-wide demand for the same global brands.Answer
Q59: What is the importance of globalization for multinational firms
Answer: A multinational firm can gain a competitive advantage in a foreign country.Answer
Q60: A Born Global firm is a firm that
Answer: from its birth seeks competitive advantage by using resources from different countries and by selling its products in multiple countries.Answer
Q61: A partnership between companies in different lines of business, is called
Answer: Diversification allianceAnswer
Q62: A global mandate gives the subsidiary
Answer: global responsibility for a single product line.Answer
Q63: What is NOT an advantage of outsourcing
Answer: Protect proprietary knowledgeAnswer
Q64: A change agent is the individual who
Answer: helps implement change.Answer
Q65: Strategic management can be defined as
Answer: a process of setting long-term direction for the organization.Answer
Q66: Which of the following is NOT an example of a global strategy
Answer: The British subsidiary of global insurance group Aviva develops a new product for the UK market.Answer
Q67: Alan Rugman said that
Answer: Most economic activity is regional – not global.Answer
Q68: Which of the following is NOT a dimension of global strategy
Answer: LocalizationAnswer
Q69: What three broad factors determine global strategy of multinational firms
Answer: Macro globalizing drivers, industry globalizing drivers, internal globalizing driversAnswer
Q70: What are the four industry globalizing drivers
Answer: Market drivers, cost drivers, government drivers, and competitive driversAnswer
Q71: Global economies of scale arise when
Answer: a product or a process can be performed more cheaply at greater volume than at lesser volume.Answer
Q72: Governments can encourage globalization of industries by
Answer: creating common international technical standardsAnswer
Q73: Strategic fit can be defined as
Answer: matching the resources and activities of a firm to the external environment.Answer
Q74: PEST analysis is
Answer: a broad framework to help managers understand the environment in which their business operates.Answer
Q75: Which of the following is NOT an example of a political risk
Answer: Cost of productionAnswer
Q76: Multinational firms engaged in corruption
Answer: are likely to become less innovative.Answer
Q77: Technology scanning refers to
Answer: the process of identifying technologies in the external business environment.Answer
Q78: Michael Porter has argued that
Answer: the logic of old economy strategies remains the same for internet-based companies.Answer
Q79: The Diamond Model assumes that
Answer: The national home base of a firm plays a key role in shaping that firm’s competitive advantage in global markets.Answer
Q80: The Diamond Model suggests that four factors determine a firm’s competitive advantage
Answer: 1) home demand conditions; 2) home factor conditions; 3) firm strategy, structure and rivalry; 4) related and supporting industries.Answer
Q81: The idea of a Double Diamond suggests that managers of a multinational firm based in a small country should
Answer: assess the conditions of competitiveness in both their home country and the large neighbouring country when developing corporate strategies.Answer
Q82: What is the purpose of the CAGE framework
Answer: The CAGE framework analyses bilateral differences and commonalities between two countries.Answer
Q83: Strategic group analysis refers to
Answer: identifying firms with similar strategies or competing on similar bases.Answer
Q84: Mobility barriers are
Answer: barriers which prevent other firms entering the strategic group and threatening the existing members.Answer
Q85: Michael Porter has argued that the most important determinant of a firm’s profitability is/are
Answer: Industry attractivenessAnswer
Q86: The Five Forces Model can be used to
Answer: analyse a firm’s competitive position in a specific market segment or similar market segments.Answer
Q87: Obstacles which potential newcomers would encounter when entering a market are called
Answer: Barriers to entryAnswer
Q88: Which of the following is NOT an example of barriers to entry
Answer: Buyer switching costsAnswer
Q89: The concept of the International Product Life Cycle suggests that
Answer: Products go through an international life cycle, during which a developed country is initially an exporter, then loses its export markets, and finally could become an importer of the product from developing countries.Answer
Q90: The International Product Life Cycle does not apply to non-standard industrial products such as
Answer: Luxury productsAnswer
Q91: Forecasts are
Answer: educated assumptions about future trends and events.Answer
Q92: Which multinational firm pioneered the use of scenarios
Answer: ShellAnswer
Q93: Google.com is an example of a firm that
Answer: changed the business environment within its industry.Answer
Q94: The resource-based perspective suggests that unique firm resources should be the starting point for developing successful strategies
Answer: unique firm resources should be the starting point for developing successful strategies.Answer
Q95: SWOT is an abbreviation for
Answer: Internal Strengths (S), Internal Weaknesses (W), External Opportunities (O), External Threats (T).Answer
Q96: The concept of core competencies was originally devised by
Answer: C. K. Prahalad and Gary HamelAnswer
Q97: The VRIO framework can be used to identify
Answer: a firm’s core competencies.Answer
Q98: Value added is
Answer: the difference between the cost of inputs and the market value of outputs.Answer
Q99: Global value systems are sometimes referred to as
Answer: Global value chainsAnswer
Q100: The systematic collection of information about rivals in order to assist the development of firm strategies is called
Answer: Competitor intelligenceAnswer
