FINAL EXAMINATION INTERNATIONAL COLLEGE AT BEIJING, CAU APRIL 2012
MODULE NAME Sample Test LEVEL 2
INSTRUCTOR(S) Tom Smith TOOLS ALLOWED Calculator DURATION 2hrs
Multiple choice questions, choose only one answer for each question.(20x1)
1. Japanese strategy guru Kenichi Ohmae stresses that scarce resources must be focused on the
key factors for success. He proposes a simple model known as Ohmae's 3 C's for identifying
these key areas. What are the 3 C's?
A. Cash-flow, Capital and Creditors
B. Climate, Culture and Customs
C. Customers, Competition and the Corporation
D. Contracts, Contacts and Cash-flow
2. Organisational resources can be classified into three broad categories. What are these
A. Tangible, intangible and organizational capability.
B. Buildings, machines and people
C. Land, labor and capital
3. Which of the following statements best defines the concept of value added?
A. It refers to the price premium a consumer is willing to pay over and above the price
competitors can command.
B. The difference between the market value of output and the cost of inputs.
C. It is the total value of resources used for producing a good or service.
D. Value added is the amount added to unit cost to arrive at the selling price of a product
4. It follows from the definition of value added that value can be added in two ways. Which of
the items listed below is NOT one of them?
A. Raising the value of outputs.
B. By lowering costs.
C. Charging higher prices
5. Which of the following is a support activity in the value chain model?
A. Inbound logistics.
B. Marketing and sales
6. Hamel and Prahalad suggest core competencies are the basis of competitive advantage. What
is a 'core competence'?
A. It is the basic skills set that an employee needs to function effectively in a given role.
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B. An ability to do something which all organizations must possess (i.e. it is 'core' to that
business) in order to satisfy customer needs.
C. A group of production skills and technologies that enable an organization to provide a
particular benefit to customers.
D. It refers to the basic organizational strengths that relate to the core business rather than
other areas of business the organization is developing.
7. What is meant by the term organizational culture?
A. It refers to the set of beliefs, values and learned ways of managing of an organization
and is reflected in its structures, systems and the approach to developing corporate
B. It refers to the social life that grows up among the members of an organization and
results in greater bonding among them and so aids team working and builds
C. It is refers to the level of sophistication that prevails among the management of the
organization and affects their ability to think in complex ways.
D. It is a biological metaphor applied to organizations to suggest they can be nurtured and
grown (i.e. cultivated).
8. Which of the following is not one of the influences on culture cited in the text?
A. Nature of the product or service.
C. History and ownership.
9. What is the cultural web?
A. It is a model used to analyze highly political cultures where a lot of political activity
and power struggles impact on corporate strategy.
B. It is a term used to describe organizations that are stuck in a particular culture and are
unable to change to meet the needs of a new strategy.
C. It is a method of bringing together the basic elements that are helpful in analyzing the
nature of the culture a particular organization possesses.
D. It is the network of relationships in an organization through which the culture is
transmitted to new recruits.
10. What are the two principal reasons for organizational conflict?
A. Lack of direction and vague objectives.
B. Insecurity and lack of information.
C. Differing goal and threats to territory.
D. Personality clashes and misunderstanding of policy.
11. From his analysis of the data from a survey of 116,000 IBM employees Hofstede identified
four (later five) dimensions of culture. Which of the following is NOT one of them?
A. Masculinity vs. femininity.
B. Individualism vs. collectivism.
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C. Power distance.
E. Uncertainty avoidance.
12. Which of the following is NOT a source of finance for companies?
A. Government loans.
B. Retained profits.
C. Share issues.
E. Sale of assets.
13. What is the major drawback of debt financing?
A. Increasing debt changes the gearing ratio of the firm.
B. Interest payments must be made before shareholder dividends and irrespective of
fluctuations in profits. Thus shareholders bear the risk of profit fluctuations.
C. Lenders often require security of the loan against assets of the company.
D. You have to pay back the money.
14. What exactly is shareholder value added (SVA)?
A. SVA is the difference between the price paid for shares and the price received when
they are sold.
B. SVA refers to the total value of all dividends received by a shareholder over the period
they own a block of shares.
C. SVA is the amount by which a given shareholder increases the capital employed in a
D. SVA is the difference between the return on capital and the cost of capital multiplied by
the investment made by the shareholders in the business.
15. Which of the following is NOT one of the key aspects of financial resource analysis for
A. Differences in tax rates and regulations.
B. Risk management, including currency.
C. International inflation rates.
D. International fund remittances.
16. What task does the operations function in a manufacturing organization perform?
A. The operations function includes all activities involved in the development,
manufacture, marketing, sales and after sales support of products and services.
B. The operations function covers all manufacturing processes in an organization and
includes raw materials sourcing, purchasing, production and manufacturing,
distribution and logistics.
C. The operations function covers the manufacturing of products or services.
17. Three general trends have shaped the environment affecting the operations function. Which
of the following is NOT one of them?
A. Changes to health and safety legislation.
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B. Technological environment (especially in electronics and communications)
C. Discontinuities in technology.
D. Global activity and cost reduction.
18. Which Japanese company is widely credited with development of such manufacturing
techniques as flexible manufacturing, Kaizen and Kanban?
19. Operations strategy faces two major structural constraints. What are they?
A. Operations resources are inflexible and benefit from large production runs.
B. Operations resources are highly specialized and depreciate rapidly.
C. Operations resources are expensive and have a long life.
D. Operations resources take time to plan and build and are expensive to change.
20. Which of the following is NOT a key focus of the analysis of an organization’s operations?
A. Supplier relationships.
B. Make or buy?
C. Product design prior to manufacture.
D. Quality management.
Cost reduction strategy at Bajaj, the India-based motorcycle maker
Bajaj Motor is India’s biggest scooter and motorcycle manufacturer, yet it faces intense
competition from some of the world’s leading scooter and motorcycle manufacturers. This
case explores how it was using supplier strategies originally developed by General Motors to
reduce its costs and remain competitive.
In 1998, Bajaj Motor, India’s biggest scooter and motorcycle manufacturer was struggling to
shake off a strong challenge from Honda, Suzuki and Piaggio in its home market. The
family-owned company, which lacks the technological resources of its competitors, had to
compensate by watching its expense. “We must remain the lowest cost producer in the world,”
says Rahul Bajaj, the chairman.
But no matter how hard Bajaj tries to control costs and improve productivity at its plants near
Pune, in West India, the incremental savings are a sliver(薄片) of the sale price of its bikes. This
is because most of the costs are incurred before the components enter Bajaj’s factory gates.
“In-house costs make up about 10 to 12 per cent of the sales price,” says Sangiv Bajaj, general
manager of corporate finance. Advertising and distribution costs account for a further 3 to 4
per cent. By contrast, “about 65 per cent of the sales price comes from costs outside our direct
control”. This can rise to 75 per cent for new models. Bajaj has recently realized that further
big cost savings are more likely to come from its suppliers than from the manufacturing
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