BUSINESS POLICY ANSWER

1. A
2. A
3. B
4. B
5. D
6. B
7. C
8. A
9. A
10. A
11. B
12. B
13. B
14. A
15. A
16. B
17. B
18. C
19. A
20. B
21. B
22. A
23. B
24. B
25. C
26. D
27. B
28. C
29. A
30.
OPERATIONAL MANAGEMENT
1. A
2. C
3. C
4. D
5. A
6. D
7. A
8. A
9. D
10. D
11. D
12. A
13. D
14. A
15. A
16. B
17. C
18. B
19. A
20. A
21. A
22. C
23. B
24. A
25. D
26. A
27. D
28. C
29. C
30. A
1. A feature of generic global commutative strategies that are directed at compacting
worldwide in the full product line of the industry refers to a "Broad-line global
competition" strategy. This strategy focuses on competing in all segments of the
industry on a global scale. It aims to offer a comprehensive range of products or
services to a wide customer base, targeting multiple market segments
simultaneously.

2. Among the types of strategies listed, the one used in targeting a particular
segment of the industry for worldwide competition is the "Protested niche strategy."
This strategy involves focusing on a specific niche market and tailoring products or
services to meet the unique needs and preferences of that market segment. It allows
a company to differentiate itself from competitors by providing specialized offerings.

3. The assumption that a business's basic purpose is to create value for the users of
its products and services is captured by the concept of "Value chain analysis." Value
chain analysis involves identifying all the activities involved in creating and delivering
a product or service and examining how each activity adds value to the final product.
By understanding the value chain, a business can identify opportunities for improving
efficiency, reducing costs, and enhancing customer satisfaction.

4. Among the options provided, the external stakeholder is the "Customers."

Customers are individuals or organizations that purchase or use a company's
products or services. As external stakeholders, they have a direct impact on the
success of a business, as their buying decisions influence revenue and profitability.
Meeting customer needs and preferences is essential for maintaining customer
satisfaction and loyalty.
1. False. Low-cost leaders do not necessarily depend on a unique capability to
achieve and sustain their low-cost position. They typically focus on cost reduction
strategies such as efficient production processes, economies of scale, and effective
supply chain management to offer products or services at a lower price compared to
their competitors. While having unique capabilities can be advantageous, it is not a
requirement for being a low-cost leader.

2. False. Marketing strategy encompasses more than just pricing, promoting, selling,
and distributing products. It involves analyzing market trends, identifying target
audiences, creating a positioning strategy, and developing marketing mix elements
such as product, price, promotion, and distribution. Market development strategy, on
the other hand, refers to expanding the market for existing products by targeting
new customer segments or geographical areas.

3. b. Statistical process control (SPC). Statistical process control is a quantitative-

oriented management practice aimed at monitoring and controlling the quality of
products or services during the production/operations process. It involves statistical
analysis of data collected from various stages of the process to identify and address
any variations or abnormalities. Just-in-time is a production strategy focused on
minimizing inventory levels, outsourcing involves contracting work to external
parties, and out costing is not a recognized term in the context of quality
management practices.

4. b. Strong position in a slow-growth market. Grand strategy models refer to broad

approaches or frameworks that organizations use to achieve their long-term
objectives. A strong position in a slow-growth market is a suitable grand strategy as it
allows the organization to maintain a dominant position and maximize its market
share despite the market's limited growth potential. Weak positions in either a rapid
growth market or a slow-growth market are not desirable strategies, as they may
result in lower market share and limited opportunities for expansion.
One of the following is not the reason for businesses to be ECO efficient.
a. Environmental regulations are decreasingly more stringent
b. Employees prefer o work environmentally conscious firms
c. Government provides incentives to environment friendly firms
d. Customers demand cleaner products

One of the following is the alternative choice in a purchasing strategy that the firm
orders a particular material or part from several venders.
a. Multiple sourcing
b. Mass customization
c. In parallel sourcing
d. Sole sourcing

Pro-activeness is a willingness by employees and their firm to accept risk in pursuit of

market place opportunity.
a. True
b. False

Suppliers exert bargaining power on participants in an industry by raising price, or

reducing the quality of purchased goods and services.
a. False
b. True

The direction and stability of political factors is a major consideration for managers in
formulating company strategy.
a. False
b. True

The relative dominance of a firm in the market place or industry is known as

_________.
a. marketing strategy
b. productivity
c. competitive position
d. profitability

1. b. Employees prefer to work for environmentally conscious firms. While employees

may prefer to work for environmentally conscious firms, it is not the sole reason for
businesses to be eco-efficient. The other options mentioned - environmental
regulations becoming more stringent, government incentives for environment-
friendly firms, and customer demand for cleaner products - are all significant factors
that drive businesses to prioritize eco-efficiency.

2. a. Multiple sourcing. Multiple sourcing is the alternative choice in a purchasing

strategy where a firm orders a particular material or part from several vendors. This
approach helps mitigate the risks associated with relying on a single supplier by
diversifying the sources of procurement. Mass customization refers to the ability to
customize products on a large scale, in parallel sourcing is not a recognized term in
the context of purchasing strategy, and sole sourcing involves relying on a single
vendor for a specific material or part.

3. a. True. Pro-activeness is indeed a willingness by employees and their firm to

accept risk in pursuit of marketplace opportunities. It involves taking initiative, being
innovative, and seizing opportunities before competitors do. This willingness to take
risks can lead to growth, competitive advantage, and overall success in the market.

4. b. True. Suppliers can exert bargaining power on participants in an industry by

raising prices or reducing the quality of purchased goods and services. When
suppliers have a strong position and there are limited alternative suppliers, they can
influence the terms of the purchasing agreement, potentially increasing costs for the
buyer. This bargaining power is one of the factors that affect the dynamics of supply
chain relationships.
5. b. True. The direction and stability of political factors, such as government policies,
regulations, and stability of the political environment, are major considerations for
managers in formulating company strategy. Political factors can impact business
operations, market access, trade policies, and the overall business environment.
Managers need to analyze and adapt to political changes to ensure the success and
sustainability of their strategies.

6. c. Competitive position. The relative dominance of a firm in the marketplace or

industry is known as competitive position. It refers to the firm's ability to outperform
competitors and achieve a favorable market position. This can be influenced by
factors such as market share, brand strength, customer loyalty, and differentiation
strategies. Marketing strategy focuses on the promotion and positioning of products,
productivity relates to the efficiency of resource utilization, and profitability refers to
the financial performance of the firm.

1. a. True. The strategic management model does provide a general overview of the
strategic management process. It helps organizations understand the key
components and steps involved in developing and implementing effective strategies.
The model typically includes elements such as mission and vision statements,
external and internal analysis, strategy formulation, strategy implementation, and
evaluation and control.

2. b. Licensing. The transfer of industrial property from the licensor to a motivated

licensee in a foreign country is called licensing. This involves granting the licensee the
right to produce or sell the licensor's products, use their trademarks, patents, or
technology, in exchange for royalties or fees. Liquidation refers to the process of
winding up a business and selling off its assets, outsourcing involves contracting
certain business functions to external parties, and a joint venture is a partnership
between two or more companies to pursue a specific business opportunity.
3. b. False. Turnaround strategy does not necessarily involve the sale of a firm or
major component. It is a strategic approach taken by struggling or underperforming
companies to reverse their decline and restore profitability. This may involve various
actions such as cost-cutting, restructuring, diversification, or innovation, but the sale
of the entire firm is not a defining characteristic of a turnaround strategy.

4. a. True. Value chain analysis is indeed based on the assumption that a business's
basic purpose is to create value for the users of its products or services. It involves
breaking down the activities of a business into primary and support activities,
analyzing them to identify opportunities for cost reduction, efficiency improvement,
and differentiation. By creating value for customers, businesses can achieve
competitive advantage and financial success.

5. b. They provide a basis for strategic control. Action plans and short-term objectives
do provide a basis for strategic control. They serve as milestones or targets that help
measure progress towards achieving long-term goals. By regularly monitoring and
evaluating performance against these short-term objectives, managers can assess
whether the strategic plans are on track and make necessary adjustments.

6. b. New product testing. New product testing is not a reason for expanding
globalization. The other options mentioned - tax incentives, high labor costs, and
safety net - can be factors that motivate companies to expand their operations
globally. New product testing, on the other hand, is typically conducted in the
development phase to ensure the viability and market acceptance of a product
before its full-scale launch.

7. c. Competitive position. The area of long-term objectives that refers to the relative
dominance of the firm in the marketplace or industry is competitive position. This
objective focuses on achieving a strong market position, outperforming competitors,
and gaining a sustainable competitive advantage. Productivity relates to the
efficiency of resource utilization, employee relations concern the relationship
between the company and its employees, and profitability refers to the financial
performance of the firm.

8. d. Company profile. The component of the strategic management model that

represents the quantity and quality of the company's financial, human, and physical
resources is the company profile. It provides an overview of the company's
capabilities, strengths, weaknesses, and resources. Long-term objectives relate to the
desired outcomes the company aims to achieve, the external environment considers
factors outside the company that can impact its performance, and the company
mission defines its purpose and core values.
Identify the one which is not the major responsibility of board of directors.
a. To mandate company compliance with legal and ethical dictates
b. To mandate company compliance with illegal and unethical dictates
c. To elect the company’s top officers
d. To establish and update the company mission

A buyer group is powerful if __________.

a. Its product is unique or at least differentiated
b. It poses a credible threat of integrating forward into the industry’s business
c. It is concentrated or purchased in large volumes
d. It is dominated by a few companies

Which one of the following is the characteristic of good leader?

.
a. Willing to delegate and empower
b. Being well – informed
c. Commitment
d. making decision by himself

1. b. To mandate company compliance with illegal and unethical dictates. This is not a
major responsibility of the board of directors. The board of directors is responsible
for overseeing the management of the company and ensuring that it operates within
legal and ethical boundaries. Their role is to provide strategic guidance, set policies,
and monitor the company's performance. Mandating compliance with illegal and
unethical practices goes against their responsibilities and fiduciary duty.

2. c. It is concentrated or purchased in large volumes. A buyer group is powerful if it

is concentrated or purchases in large volumes. When a buyer group represents a
significant portion of the market or has the ability to make large purchases, it gains
bargaining power over suppliers. This gives them the ability to negotiate better
terms, lower prices, and exert influence on the industry.

3. a. Willing to delegate and empower. A characteristic of a good leader is being

willing to delegate and empower others. Good leaders understand the importance of
building a strong team and trust their team members to take on responsibilities and
make decisions. By delegating tasks and empowering others, leaders can foster a
sense of ownership, encourage innovation, and create a more productive and
engaged workforce. Being well-informed, committed, and making decisions
independently are also important qualities, but the ability to delegate and empower
is particularly important for effective leadership.
Which one of the following is the characteristic of good leader?
.
a. Willing to delegate and empower
b. Being well – informed
c. Commitment
d. making decision by himself
A characteristic of a good leader is a. Willing to delegate and empower. Good leaders
understand the importance of building a strong team and trust their team members
to take on responsibilities and make decisions. By delegating tasks and empowering
others, leaders can foster a sense of ownership, encourage innovation, and create a
more productive and engaged workforce. This allows leaders to focus on higher-level
strategic tasks and provides opportunities for team members to grow and develop
their skills.

While being well-informed, committed, and making independent decisions are

important qualities for a leader, the ability to delegate and empower others is
particularly crucial. This characteristic helps create a collaborative and supportive
environment, where individuals are encouraged to contribute their unique
perspectives and strengths for the overall success of the team and organization.

9 Among the following types of decision making, one chooses the alternative with
the best weighted pay off.
.
a. Mini-max regret
b. Maxi-min
c. Laplace
d. Maxi-max
.
10 Among the following, one is not a method in market research approaches.
Select one:
a. Carrying out market surveys
b. Obtaining firm order commitment
c. Asking the sales people
d. Purchasing quality product
.
11 Among the following, which one can try to examine the relationship between
demands for another factor which influences demand?
.
a. Exponential smoothing
b. Simple moving average
c. Time series analysis
d Linear regression
.
12 Among the following, which one is not the main advantage of product layouts?
.
a. The system is highly susceptible to shutdown caused by equipment breakdowns.
b. There is a high utilization of equipment
c. There is a high rate of output.
d. There is a high utilization of labor

9. The type of decision making that involves choosing the alternative with the best
weighted pay off is called "Maxi-max." In this approach, the decision maker
maximizes the maximum possible payoff or benefit from each alternative. For
example, if you are considering different investment options, you would choose the
alternative that has the highest potential return, even if it also has the highest risk.

10. Among the given options, "d. Purchasing quality product" is not a method in
market research approaches. Market research approaches involve gathering and
analyzing data to understand consumer behavior, market trends, and other relevant
factors. The options a, b, and c are all methods commonly used in market research.
"Carrying out market surveys" involves collecting information directly from
consumers through surveys or questionnaires. "Obtaining firm order commitment"
involves getting commitments from potential customers to purchase a product or
service. "Asking the sales people" involves gathering insights and feedback from the
sales team who interact with customers directly.

11. The method that can be used to examine the relationship between demands for
another factor that influences demand is "d. Linear regression." Linear regression is a
statistical technique that helps determine the linear relationship between two
variables. In this case, it can be used to analyze how changes in the demand for one
factor (dependent variable) are related to changes in the demand for another factor
(independent variable). For example, you could use linear regression to examine how
changes in advertising expenditure affect the demand for a product.

12. Among the given options, "a. The system is highly susceptible to shutdown
caused by equipment breakdowns" is not a main advantage of product layouts.
Product layouts refer to the arrangement of equipment and resources in a
production process to achieve maximum efficiency and productivity. The advantages
of product layouts include "b. There is a high utilization of equipment," meaning that
the equipment is used efficiently and effectively to maximize output. Another
advantage is "c. There is a high rate of output," which means that the production
process is designed to achieve high levels of production. Lastly, "d. There is a high
utilization of labor" is also an advantage because labor is utilized optimally in a
product layout, minimizing idle time and increasing productivity.

13. The option that is not the primary regional factor consideration is "d. Site-related
factor." While site-related factors may be important in certain cases, the primary
regional factor considerations typically include the labor factor, location of markets,
and location of raw materials. The labor factor refers to the availability, skills, and
cost of labor in a specific region. The location of markets considers the proximity to
target customers and accessibility of distribution channels. The location of raw
materials pertains to the availability and proximity of necessary inputs for the
business's production process. Site-related factors, on the other hand, typically focus
on specific characteristics of a particular location or facility.
14. The statement "Back orders differentials are commonly used to shift demand
from peak periods to off-peak periods" is false. Back orders occur when a company
cannot fulfill customer orders due to insufficient inventory. Back orders are not
deliberately used to shift demand from peak to off-peak periods. Instead, businesses
strive to manage their inventory levels and production capacity to meet customer
demand and avoid back orders.

15. The statement "Exponential smoothing is not a viable technique at all for
forecasting demand for a new product" is false. Exponential smoothing is a
commonly used technique for forecasting demand, including for new products. It is a
time series forecasting method that assigns exponentially decreasing weights to past
observations, with recent observations given more importance. Exponential
smoothing can be applied to short-term and long-term forecasting, even when
historical data for a new product is limited.

16. The statement "A flow diagram traces the flow of information, customers,
employees, equipment, or materials through a process" is true. A flow diagram, also
known as a process flowchart or process map, visually represents the sequential flow
of activities, information, customers, employees, equipment, or materials in a
process. It aids in identifying inefficiencies, bottlenecks, and opportunities for
improvement in a process.

17. The inventory of raw materials that do not form an integral part of finished
products is called "c. raw material inventory." Raw material inventory comprises
materials and components used in the production process but have not yet been
incorporated into finished products. This inventory is typically managed to ensure a
smooth and uninterrupted production process.

18. The statement "Inventory problems arise when a resource must visit a number of
sites during a given time" is false. Inventory problems typically arise due to factors
such as inaccurate demand forecasting, inadequate inventory control, supply chain
disruptions, or inefficient order fulfillment processes. The need to visit multiple sites
by a resource is not directly related to inventory problems.

19. The statement "Long-range forecasts are forecasts that cover the time period
between one to three years" is true. Long-range forecasts typically refer to forecasts
that extend beyond the immediate future and cover a time horizon of one to three
years. These forecasts are used for strategic planning, capacity expansion, investment
decisions, and other long-term considerations.

20. The statement "Process reengineering uses cross-functional teams to rethink the
design of critical processes" is true. Process reengineering is a method used to
improve the efficiency and effectiveness of business processes. It involves analyzing
and redesigning key processes to achieve significant improvements in performance.
Cross-functional teams, comprising individuals from different departments or
functions within an organization, are often involved in process reengineering efforts
to bring diverse perspectives and expertise to the redesign process.

21. The statement "Product layout is designed to facilitate processing items or

providing service that presents variation in the processing requirement" is false.
Product layout, also known as assembly line layout, is designed for processing items
or providing services that have a standardized or repetitive processing requirement.
The layout is structured to maximize efficiency and minimize movement or disruption
in the production or service delivery process. In contrast, process layout is more
suitable for situations where there is variation in the processing requirements,
allowing flexibility and adaptability in the layout configuration.