a. T
*b. F
4. The more stable is a firm’s external environment, the more likely it is that the firm’s resources and capabilities
will offer a more stable foundation for strategy than focusing upon its product market, or the needs of its customers.
[See p.115]
a. T
*b. F
5. The key lesson from the failure of Eastman Kodak is the difficulty of maintaining focus on a particular customer
need when the technology needed to satisfy that need changes radically.
[See p.116]
a. T
*b. F
6. The ability of established firms to reconfigure their resources and capabilities around new technologies means
that, typically, disruptive technologies are pioneered by established rather than new firms.
[See p.118]
a. T
*b. F
7. The profits arising from market power are called monopoly rents, whereas those arising from superior resources
are Ricardian rents
[See p.118]
*a. T
b. F
8. The analysis of resources and capabilities is a valuable tool of strategy analysis for business enterprises; it is less
applicable to not-for-profit organizations.
[See pp.116-118]
a. T
*b. F
,9. Corporate balance sheets do not include human resources (since these are not owned by the firm), apart from this
major exception, balance sheets offer a comprehensive picture of a firm’s resources.
[See pp.118 and 120]
a. T
*b. F
10. One indicator of the value of a firm’s intangible resources is the difference between its market capitalization and
the fair value of its tangible assets.
[See pp.120-121.
*a. T
b. F
11. Companies with the highest ratios of market value to book value tend to be those, either with valuable brands or
valuable proprietary technologies.
[See pp.120-121]
*a. T
b. F
12. The trend among companies to “hire for attitude; train for skills” is the result of research identifying that the
importance of psychological and social aptitudes in determining superior work performance.
[See p.123]
*a. T
b. F
13. “Organizational capability” and “organizational competence” refer to two concepts which, although related, are
different.
[See p.123]
a. T
*b. F
14. According to Prahalad and Hamel, a company’s core competences are those capabilities that are fundamental to
its strategy ad to its performance.
, [See p.123]
*a. T
b. F
15. Porter’s value chain is useful tool for understanding the sequence of activities that a firm performs but is of
limited value in mapping a firm’s resources and capabilities.
[See p.123]
a. T
*b. F
16. Organizational capabilities are based upon an organization’s processes and routines.
[See p.124]
*a. T
b. F
17. For a resource or capability to be a source of competitive advantage, two conditions must be present: scarcity
and relevance
[See p.126]
*a. T
b. F
18. A strong brand is unlikely to be a source of sustainable competitive advantage since brands lack durability and
can be purchased or created through advertising and promotion.
[See p.127]
a. T
*b. F
19. A key feature of efficient and reliable processes is that a firm has been able to perform them routinely. However,
routinizing a process does not necessarily make it a distinctive capability.
[See pp.124-125]
*a. T
b. F
*b. F
4. The more stable is a firm’s external environment, the more likely it is that the firm’s resources and capabilities
will offer a more stable foundation for strategy than focusing upon its product market, or the needs of its customers.
[See p.115]
a. T
*b. F
5. The key lesson from the failure of Eastman Kodak is the difficulty of maintaining focus on a particular customer
need when the technology needed to satisfy that need changes radically.
[See p.116]
a. T
*b. F
6. The ability of established firms to reconfigure their resources and capabilities around new technologies means
that, typically, disruptive technologies are pioneered by established rather than new firms.
[See p.118]
a. T
*b. F
7. The profits arising from market power are called monopoly rents, whereas those arising from superior resources
are Ricardian rents
[See p.118]
*a. T
b. F
8. The analysis of resources and capabilities is a valuable tool of strategy analysis for business enterprises; it is less
applicable to not-for-profit organizations.
[See pp.116-118]
a. T
*b. F
,9. Corporate balance sheets do not include human resources (since these are not owned by the firm), apart from this
major exception, balance sheets offer a comprehensive picture of a firm’s resources.
[See pp.118 and 120]
a. T
*b. F
10. One indicator of the value of a firm’s intangible resources is the difference between its market capitalization and
the fair value of its tangible assets.
[See pp.120-121.
*a. T
b. F
11. Companies with the highest ratios of market value to book value tend to be those, either with valuable brands or
valuable proprietary technologies.
[See pp.120-121]
*a. T
b. F
12. The trend among companies to “hire for attitude; train for skills” is the result of research identifying that the
importance of psychological and social aptitudes in determining superior work performance.
[See p.123]
*a. T
b. F
13. “Organizational capability” and “organizational competence” refer to two concepts which, although related, are
different.
[See p.123]
a. T
*b. F
14. According to Prahalad and Hamel, a company’s core competences are those capabilities that are fundamental to
its strategy ad to its performance.
, [See p.123]
*a. T
b. F
15. Porter’s value chain is useful tool for understanding the sequence of activities that a firm performs but is of
limited value in mapping a firm’s resources and capabilities.
[See p.123]
a. T
*b. F
16. Organizational capabilities are based upon an organization’s processes and routines.
[See p.124]
*a. T
b. F
17. For a resource or capability to be a source of competitive advantage, two conditions must be present: scarcity
and relevance
[See p.126]
*a. T
b. F
18. A strong brand is unlikely to be a source of sustainable competitive advantage since brands lack durability and
can be purchased or created through advertising and promotion.
[See p.127]
a. T
*b. F
19. A key feature of efficient and reliable processes is that a firm has been able to perform them routinely. However,
routinizing a process does not necessarily make it a distinctive capability.
[See pp.124-125]
*a. T
b. F
