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Q1: In what ways did the cognitive revolution in 1950s influence theories on decision making in organizations

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Answer: It provides a radical critique of the instrumental and positivist view of human beings.

Q2: Allison described three different decision-making models. What was his major conclusion concerning the three models

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Answer: The three models offer complementary perspectives on how decision making is emerging.

Q3: What is the significance of group thinking in the context of decision making

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Answer: It describes how a group can create shared patterns of understanding that narrow their capacity to take ‘open-minded’ decisions.

Q4: What are the major sources of group thinking

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Answer: Group thinking derives from the exaggerated belief in the group’s competence and moral.

Q5: What is true about institutional theory

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Answer: Institutional theory points out that organizations are influenced by numerous factors, such as political decisions, consumer behaviour and economic conditions, outside the organization.

Q6: How can institutions be defined in the context of organizations? Pick the correct statement

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Answer: An institution can be defined as having shared rules and typifications that identify categories of social actors.

Q7: In what ways does new and old institutionalism differ

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Answer: New institutionalism is paying more attention to symbolic and cultural factors.

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

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Answer: Coercive isomorphism describes institutionalized rules and procedures that are compulsory to adhere to.

Q9: In Hofstede’s study of national cultures an important analytical category was low/high power distance. What is true about this category

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Answer: Power distance measures the degree of perceived hierarchical relations in the firm.

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

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Answer: Innovation involves the ability of the organization to change internally and to adapt to the market.

Q11: Innovation is a rapidly growing field of study. Which of the following alternatives is true about the current research scene

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Answer: Innovation research is focused on both products and services.

Q12: Research on innovation suggests that innovation work typically goes through distinct phases. What is true about these phases

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Answer: The normative innovation literature describes innovation as a linear process.

Q13: What is true about the links between innovation and entrepreneurship

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Answer: Innovation work is often initiated by individuals who are entrepreneurial in their orientation.

Q14: The concept of interessment is important in describing the social nature of innovation. What is true about this concept? Pick the correct statement

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Answer: It is the process of enrolling partners and spokesmen for new innovations.

Q15: Social nature of innovations is discussed. Pick the statement that best captures this view on innovation

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Answer: The social nature of innovation makes the observation that the world of innovators is never solely technological.

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

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Answer: Innovation involves elements of destruction as well as creation.

Q17: Which statement best captures the so-called systemic view of innovation

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Answer: It describes the interrelated fields of organizations that mutually support and help one another.

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

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Answer: Complex product systems have many interconnected and customized elements organized in a hierarchical way.

Q19: What is true about innovation and organizational size

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Answer: Research results are inconsistent in showing the effectiveness of large firms in facilitating innovation.

Q20: Two basic theoretical perspectives of change in organizations. Which are they? Pick the correct option

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Answer: Planned change and emergent change

Q21: Selznick described organizations as institutions. What is the significance of this for our understanding of change

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Answer: By using the term institution he pointed at organizations as responsive, adaptive organisms.

Q22: Kurt Lewin described change as passing through a number of distinct phases. Which are the phases

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Answer: Unfreezing, moving and freezing

Q23: Change is an important concept in the systems view of organizations. Which statement best captures the systems view on change

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Answer: The systems view argues that change requires an understanding of the system as a whole.

Q24: The new institutional theory offers new perspectives on change. Which of the following statements best captures the essence of new institutional theory

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Answer: Through processes of isomorphism, organizations become more like each other.

Q25: What are the major challenges with radical change processes? Pick the correct option

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Answer: Radical change involves major changes in belief systems in organizations.

Q26: Which of the following statements captures the basic definition of continuous improvement

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Answer: It is a strategy for achieving large-scale changes through a step-wise process.

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

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Answer: Resistance to change occurs because of fear of change.

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

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Answer: Make sure that all conflicts are avoided.

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

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Answer: Resistance to change seems to imply that the problem mainly lies with the subordinates.

Q30: If you save £230 for 4 years at 5 per cent simple interest, how much interest would you earn

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Answer: £46

Q31: If you save £230 for 4 years at 5 per cent compound interest, how much interest will you earn

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Answer: £49.57

Q32: The payback period is the time it takes for future returns to payback the initial capital outlay

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Answer: Wrong – False

Q33: If investment A has an IRR of 8% and investment B has an IRR of 4% then A is probably the better investment

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Answer: Correct – True

Q34: The IRR is

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Answer: The effective annual percentage rate of return on the capital outlay

Q35: Compound interest is when the interest earned on the principal

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Answer: Accumulates with the principal after being added at the end of the time period

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

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Answer: Just over 14 years

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

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Answer: £33,550

Q38: Special computer packages have been developed to undertake real-life simulation

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Answer: Correct – True

Q39: Simulations can keep track of several different kinds of information, including: orders, inventory, and financial planning

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Answer: Correct – True

Q40: Random numbers are used

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Answer: To describe the uncertainty of input values

Q41: Monte Carlo simulation ensures that

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Answer: The simulated probability distribution will be the same as the actual probability distribution

Q42: The Excel function RAND() can be used to generate random numbers between 0 and 1

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Answer: Correct – True

Q43: The Excel function RANDBETWEEN() can be used to generate random numbers between 0 and 1

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Answer: Wrong – False

Q44: To simulate a uniform distribution use the Excel expression: = a + (b – a)*RAND()

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Answer: Correct – True

Q45: To generate a random number from a normal distribution use the Excel function: =NORM.INV(RAND(), μ, s)

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Answer: Correct – True

Q46: The binomial distribution can be simulated using the Excel function: = BINOM.INV(n, p, RAND())

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Answer: Correct – True

Q47: Which of the following statements corresponds to the general definition of learning provided? Pick the correct option

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Answer: Learning refers to the change in a person’s behaviour in a given situation.

Q48: What is the meaning of conditioning in learning theory

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Answer: It describes as the process of responding to external stimuli.

Q49: Reinforcement is an important concept in learning theory. Which statement is true about reinforcement

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Answer: Reinforcement deals with the process of stimulating certain behaviours to occur.

Q50: What are the basic assumptions of the information perspective on learning

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Answer: It deals with how individuals process information and respond to the external world.

Q51: Which of the following statements is true about the communities of practice perspective on learning

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Answer: The communities of practice perspective argues that learning takes place in social settings in which a shared world of practice is developed.

Q52: Why is the shift from the individual to the organizational level tricky in studying learning

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Answer: Learning is a concept connected to individuals; organizations, per se, cannot learn.

Q53: Etzioni describes three types of organization in terms of their use of knowledge. Which are they

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Answer: Professional organizations, service organizations and non-professional organizations

Q54: The distinction between expert and local knowledge is important in knowledge management theory. What is true about the two forms of knowledge

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Answer: Expert knowledge is typically protected by layers of procedures and routines that are out of reach for laymen.

Q55: What is true about knowledge work

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Answer: It is work that requires formal education.

Q56: Why is the concept of risk important in order to understand decision making in organizations

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Answer: It is important because the possibility of different decision alternatives needs to be weighed against the risks that may arise.

Q57: A global – as opposed to international – strategy involves

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Answer: a single strategy for the entire global network of subsidiaries and partners.

Q58: A global consumer culture means that

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Answer: there is a world-wide demand for the same global brands.

Q59: What is the importance of globalization for multinational firms

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Answer: A multinational firm can gain a competitive advantage in a foreign country.

Q60: A Born Global firm is a firm that

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Answer: from its birth seeks competitive advantage by using resources from different countries and by selling its products in multiple countries.

Q61: A partnership between companies in different lines of business, is called

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Answer: Diversification alliance

Q62: A global mandate gives the subsidiary

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Answer: global responsibility for a single product line.

Q63: What is NOT an advantage of outsourcing

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Answer: Protect proprietary knowledge

Q64: A change agent is the individual who

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Answer: helps implement change.

Q65: Strategic management can be defined as

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Answer: a process of setting long-term direction for the organization.

Q66: Which of the following is NOT an example of a global strategy

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Answer: The British subsidiary of global insurance group Aviva develops a new product for the UK market.

Q67: Alan Rugman said that

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Answer: Most economic activity is regional – not global.

Q68: Which of the following is NOT a dimension of global strategy

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Answer: Localization

Q69: What three broad factors determine global strategy of multinational firms

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Answer: Macro globalizing drivers, industry globalizing drivers, internal globalizing drivers

Q70: What are the four industry globalizing drivers

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Answer: Market drivers, cost drivers, government drivers, and competitive drivers

Q71: Global economies of scale arise when

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Answer: a product or a process can be performed more cheaply at greater volume than at lesser volume.

Q72: Governments can encourage globalization of industries by

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Answer: creating common international technical standards

Q73: Strategic fit can be defined as

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Answer: matching the resources and activities of a firm to the external environment.

Q74: PEST analysis is

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Answer: a broad framework to help managers understand the environment in which their business operates.

Q75: Which of the following is NOT an example of a political risk

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Answer: Cost of production

Q76: Multinational firms engaged in corruption

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Answer: are likely to become less innovative.

Q77: Technology scanning refers to

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Answer: the process of identifying technologies in the external business environment.

Q78: Michael Porter has argued that

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Answer: the logic of old economy strategies remains the same for internet-based companies.

Q79: The Diamond Model assumes that

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Answer: The national home base of a firm plays a key role in shaping that firm’s competitive advantage in global markets.

Q80: The Diamond Model suggests that four factors determine a firm’s competitive advantage

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Answer: 1) home demand conditions; 2) home factor conditions; 3) firm strategy, structure and rivalry; 4) related and supporting industries.

Q81: The idea of a Double Diamond suggests that managers of a multinational firm based in a small country should

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Answer: assess the conditions of competitiveness in both their home country and the large neighbouring country when developing corporate strategies.

Q82: What is the purpose of the CAGE framework

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Answer: The CAGE framework analyses bilateral differences and commonalities between two countries.

Q83: Strategic group analysis refers to

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Answer: identifying firms with similar strategies or competing on similar bases.

Q84: Mobility barriers are

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Answer: barriers which prevent other firms entering the strategic group and threatening the existing members.

Q85: Michael Porter has argued that the most important determinant of a firm’s profitability is/are

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Answer: Industry attractiveness

Q86: The Five Forces Model can be used to

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Answer: analyse a firm’s competitive position in a specific market segment or similar market segments.

Q87: Obstacles which potential newcomers would encounter when entering a market are called

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Answer: Barriers to entry

Q88: Which of the following is NOT an example of barriers to entry

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Answer: Buyer switching costs

Q89: The concept of the International Product Life Cycle suggests that

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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.

Q90: The International Product Life Cycle does not apply to non-standard industrial products such as

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Answer: Luxury products

Q91: Forecasts are

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Answer: educated assumptions about future trends and events.

Q92: Which multinational firm pioneered the use of scenarios

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Answer: Shell

Q93: Google.com is an example of a firm that

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Answer: changed the business environment within its industry.

Q94: The resource-based perspective suggests that unique firm resources should be the starting point for developing successful strategies

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Answer: unique firm resources should be the starting point for developing successful strategies.

Q95: SWOT is an abbreviation for

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Answer: Internal Strengths (S), Internal Weaknesses (W), External Opportunities (O), External Threats (T).

Q96: The concept of core competencies was originally devised by

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Answer: C. K. Prahalad and Gary Hamel

Q97: The VRIO framework can be used to identify

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Answer: a firm’s core competencies.

Q98: Value added is

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Answer: the difference between the cost of inputs and the market value of outputs.

Q99: Global value systems are sometimes referred to as

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Answer: Global value chains

Q100: The systematic collection of information about rivals in order to assist the development of firm strategies is called

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Answer: Competitor intelligence