Cma Mock Exam Solution

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Fall 2011 Mock Entrance Examination 1 Solutions

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Fall 2011 – Mock Entrance Examination 1

TABLE OF CONTENTS

Examination: Answer Key ...................................................................................... 1 Strategic Management...................................................................... 3 Risk Management and Government ................................................ 13 Performance Management
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Distractors: a) The focus on inventory management should be increased under a cost leadership strategy. c) Focusing on product development would be more appropriate for a differentiation strategy than for a cost leadership strategy. d) Increasing the focus on quality control would be more appropriate for a differentiation strategy than for a cost leadership strategy.

6.

Answer: d. With licencing, a company provides technological know-how to a licensee in the foreign country. Although quality control can be a factor in the licensing contract, the licensee, not the licensor, would have the actual control over product and service quality. Distractors: a) An exporting strategy would result in increased cost savings from economies of scale by producing the product at a single location. b) An advantage of a strategic alliance is that it strengthens the competitiveness in a foreign market by allowing the parties to focus on what they do best. c) An advantage of an exporting as an entry strategy in a foreign market is that is has the lowest degree of risk. Establishing a subsidiary in the foreign country has a high degree of risk.

7.

Answer: a. A mechanistic structure gives rise to cultures that have predictability and stability as end states. A change in corporate strategy that is not compatible with the current structure and culture would be difficult to implement successfully. Because the

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