DBA Doctor of Business Administration/Business Management 5 — Questions and Answers
Question 1: Which ethical framework in business decision-making judges actions solely by their consequences and the greatest good for the greatest number?
- Deontological ethics
- Virtue ethics
- Utilitarian ethics (Correct answer)
- Contractarian ethics
Correct answer: Utilitarian ethics
Utilitarianism, associated with Bentham and Mill, evaluates decisions by net outcomes — maximizing total welfare or utility across all affected parties.
Question 2: In financial accounting, the 'matching principle' requires that:
- Assets and liabilities be reported at fair market value
- Expenses be recognized in the same period as the revenues they helped generate (Correct answer)
- Revenue be recognized only when cash is received
- All financial statements use the same accounting basis
Correct answer: Expenses be recognized in the same period as the revenues they helped generate
The matching principle ensures expenses are recorded in the period of associated revenue recognition, providing accurate profitability measurement.
Question 3: A firm's 'core competency,' as defined by Prahalad and Hamel, is best characterized as:
- A dominant market share in the firm's primary industry
- A collective learning and technical capability that is difficult for competitors to imitate (Correct answer)
- Proprietary technology protected by patents
- Superior financial resources enabling aggressive investment
Correct answer: A collective learning and technical capability that is difficult for competitors to imitate
Core competencies are deeply embedded organizational capabilities — skills, knowledge, and processes — that provide competitive advantage and cannot be easily copied.
Question 4: In organizational behavior, 'psychological safety,' as researched by Amy Edmondson, refers to a team climate where:
- Employees feel physically protected from workplace hazards
- Team members can take interpersonal risks without fear of negative consequences (Correct answer)
- Workers are shielded from stressful performance feedback
- Managers protect subordinates from executive criticism
Correct answer: Team members can take interpersonal risks without fear of negative consequences
Psychological safety enables candid communication, risk-taking, and learning from failure, which Edmondson found is critical to high-performing teams.
Question 5: The 'prisoner's dilemma' in game theory is most relevant to business strategy because it illustrates:
- How regulatory penalties shape corporate compliance behavior
- Why individually rational choices can produce collectively suboptimal outcomes (Correct answer)
- The optimal negotiation strategy in zero-sum competitive markets
- How information asymmetry leads to market failure
Correct answer: Why individually rational choices can produce collectively suboptimal outcomes
In the prisoner's dilemma, both players defecting is the Nash equilibrium despite mutual cooperation producing better collective results — mirroring price wars or arms races.
Question 6: Which forecasting method relies on expert consensus through iterative anonymous rounds of feedback to reduce individual bias?
- Time series decomposition
- Delphi method (Correct answer)
- Regression analysis
- Moving average smoothing
Correct answer: Delphi method
The Delphi method aggregates expert opinions through repeated questionnaire rounds with controlled feedback until convergence, reducing anchoring and social pressure biases.
Question 7: In corporate restructuring, 'divestiture' is strategically motivated primarily by the goal of:
- Acquiring complementary businesses to achieve synergies
- Shedding non-core units to focus resources on highest-value activities (Correct answer)
- Issuing new equity to reduce financial leverage
- Merging with a competitor to gain market scale
Correct answer: Shedding non-core units to focus resources on highest-value activities
Divestiture allows firms to monetize underperforming or non-strategic assets, reallocating capital and management attention to core competitive strengths.
DBA Doctor of Business Administration/Business Management 5
Which ethical framework in business decision-making judges actions solely by their consequences and the greatest good for the greatest number?