MAN 4720 Strategic Management Final Exam 2026

MAN 4720 Strategic Management Final Exam - FIU Spring 2026 How to win a format war? Supply complements, killer apps, aggressive pricing, license technology, cooperate with competitors Strategies to deter entry in mature industries? capacity, brand loyalty What is price signaling? Product proliferation, limit pricing, excess Firms communicating pricing intentions to coordinate pricing without explicit collusion T/F: Leadership strategy in declining industry = becoming the dominant player What is a divestment strategy? TRUE Exiting a declining industry by selling off the business Four main global strategies? International, Global standardization, Localization (multidomestic), Transnational T/F: Transnational strategy = low cost AND local responsiveness simultaneously TRUE Advantages of global expansion? skills, experience curve Expand market, location economies, leverage subsidiary Modes of entry into foreign markets? Exporting, Licensing, Franchising, Joint ventures, Wholly owned subsidiaries T/F: Wholly owned subsidiaries = highest control but highest cost and risk TRUE What are location economies? locations worldwide Cost advantages from performing activities in optimal T/F: Localization strategy = high local responsiveness pressure + low cost pressure Main disadvantage of licensing? TRUE Risk of giving away tech know-how and losing quality control T/F: International strategy = low cost pressure + low local responsiveness pressure TRUE Pressures for local responsiveness? Differences in tastes, infrastructure, distribution channels, government demands, traditions Main risk of a joint venture? Losing control over technology + conflict between partners What is horizontal integration? Acquiring/merging with competitors in the same industry What is vertical integration? Expanding into upstream (backward) or downstream (forward) value chain stages Benefits of vertical integration? Barriers to entry, specialized asset investments, product quality protection, improved scheduling Risks of vertical integration? Increased costs, reduced flexibility, inability to change suppliers, bureaucratic costs Related vs. unrelated diversification? Related: leveraging competencies in connected industries. Unrelated: financial reasons in unconnected industries Why do acquisitions fail? Overpayment, overestimated synergies, culture clash, poor integration, management hubris What is corporate governance? System of rules/practices/processes directing and controlling a company, balancing stakeholder interests What is the principal-agent problem? Managers pursue their own interests instead of shareholders' interests Role of the board of directors? Monitor management, approve major decisions, set exec compensation, represent shareholders Governance mechanisms to reduce agency problems? Board oversight, stock-based compensation, auditors/financial statements, takeover constraint T/F: Agency theory = principals (shareholders) vs. agents (managers) T/F: Information asymmetry is a key source of the agency problem TRUE T/F: Stock options align manager and shareholder interests TRUE TRUE What is a golden parachute? Generous severance for top execs if they lose jobs due to a takeover T/F: Friedman: only social responsibility of business is to increase profits TRUE Stakeholder approach to social responsibility? Consider ALL stakeholders (employees, customers, suppliers, communities) not just shareholders T/F: Self-dealing = managers feathering their own nests with company money Main ethical issues in strategy? TRUE Self-dealing, info manipulation, anticompetitive behavior, exploitation, poor working conditions, environmental harm, corruption T/F: Culture valuing results above ethics can encourage unethical behavior TRUE T/F: Inside directors are full-time employees who also sit on the board TRUE T/F: FoxCon employees attempted suicide due to pressure building Apple products T/F: Autonomy, Beneficence, maximizing value are priorities for ALL CEOs TRUE FALSE T/F: Nike manufactures shoes in countries including USA FALSE — Nike does NOT manufacture in the USA T/F: Handy argues the sole purpose of a company is to make money beyond just making money FALSE — purpose is T/F: Managers seldom have trouble spotting problems using financial reports they often have trouble FALSE — T/F: Ethics are innate and difficult to teach FALSE — ethics can be taught and developed Balanced Score Card enables a company to: Adopt a more holistic approach to firm performance (beyond just financial metrics) Jim Keady wanted Nike to: Be accountable for how its foreign suppliers treated their employees T/F: Dallas Cowboys and Forever 21 demonstrate sustainable sourcing According to Handy, purpose of a business is to: FALSE Make a profit so it can build something better Most likely control in a charity organization? Control through norms and values What establishes/maintains organizational culture? All of: landmark events, socialization mechanisms, founders/leaders, informal rules Which control creates an internal market for resources? Market controls Hiring on core values + fun events + team building = organizational: NOT a high-integration strategy? (assigning output targets to functions) output targets = LOW integration, not high integration Culture Assigning different Purpose of output controls? Measure performance against goals and standards What induces division cooperation in high-integration diversified firms? Incentive controls Low integration control works best for: Company diversifying into UNRELATED services