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| 1 | |
Which one of the following statements falsely characterizes the managerial task of executing strategy? |
| | A) | Executing strategy requires team effort and is a job for a company's whole management team—indeed, the bigger the organization or the more geographically scattered its operating units, the more that successful strategy execution depends of the cooperation and implementing skills of operating managers who can push the needed changes at the lowest organizational levels and, in the process, deliver good results. |
| | B) | Strategy execution requires every manager to think through the answer to "What does my area have to do to implement its part of the strategic plan, and what should I do to get these things accomplished effectively and efficiently?" |
| | C) | Implementing and executing strategy is primarily an operations-driven activity revolving around the management of people and business processes. |
| | D) | Successful strategy execution depends on doing a good job of building and strengthening competitive capabilities, motivating and rewarding people in a strategy-supportive manner, and instilling a discipline of getting things done. |
| | E) | Crafting strategy is a harder, more complex, and more time-consuming task than is directing and supervising the task of good strategy execution. |
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| 2 | |
Management's handling of the strategy implementation/execution process can be considered successful: |
| | A) | so long as a company is profitable. |
| | B) | if and when the company meets or beats its performance targets and shows good progress in achieving its strategic vision for the company. |
| | C) | once the company's management team convinces a majority of company personnel that the company is headed in the right direction. |
| | D) | if management is able to put the strategy in place within 6 months. |
| | E) | once a capable top management team has been hired, employees have been appropriately empowered, and effective training programs for company personnel have been put in place. |
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| 3 | |
Which of the following is not one of the principal managerial components associated with implementing and executing strategy? |
| | A) | Building an organization with the competencies, capabilities, and resource strengths needed to carry out the strategy successfully. |
| | B) | Ensuring that policies and procedures facilitate rather than impede strategy execution |
| | C) | Reducing the layers of management to a bare minimum and making sure employees are empowered |
| | D) | Adopting best practices and pushing for continuous improvement in how value chain activities are performed |
| | E) | Instilling a corporate culture that promotes good strategy execution |
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| 4 | |
The three organization-building actions paramount in the task of trying to execute a company's strategy are: |
| | A) | delegating authority to down-the-line managers and doing a good job of empowering employees, deciding which value chain activities to outsource, and choosing an organization chart that suits the strategy. |
| | B) | persuasively communicating the case for organizational change to down-the-line managers and employees, using organization structures based on empowered teams, and selecting the right people to staff the organization. |
| | C) | staffing the organization, building core competitive and competitive capabilities, and structuring the organization and work effort. |
| | D) | de-layering management hierarchies, deciding which competencies and capabilities to build, and deciding which value chain activities to outsource. |
| | E) | avoiding business process fragmentation, deciding which value chain activities to outsource, and allocating sufficient time and resources to employee training. |
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| 5 | |
The overriding aim in building a management team should be to: |
| | A) | assemble a critical mass of talented managers who can function as agents of change, work well together as a team, and produce organizational results that are dramatically better than what a few star managers acting individually can achieve. |
| | B) | select people who are charismatic and good communicators. |
| | C) | choose managers who have substantial experience in the industry. |
| | D) | assemble a team of people who believe in the same leadership approaches and use the same approaches to people management. |
| | E) | choose managers who have the same core values and ethical standards. |
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| 6 | |
Which one of the following statements about recruiting and retaining capable employees is false? |
| | A) | The quality of an organization's people is always an essential ingredient of successful strategy execution—knowledgeable, engaged employees are a company's best source of creative ideas for the nuts-and-bolts operating improvements that lead to operating excellence. |
| | B) | In many industries, adding to a company's talent base and building intellectual capital is more important to good strategy execution than additional investments in plants, equipment, and capital projects. |
| | C) | The best companies make a point of recruiting and retaining talented employees—the objective is to make the company's entire work force (managers and rank-and-file employees) a genuine resource strength. |
| | D) | Recruiting and retaining capable employees is the single most important key to success in executing strategy. |
| | E) | One technique that companies use to enhance the caliber of their workforce is to coach average performers to improve their skills and capabilities, while weeding out underperformers and benchwarmers. |
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| 7 | |
Which of the following is generally not among the practices that companies use to staff jobs with the best people they can find, particularly if intellectual capital greatly aids good strategy execution? |
| | A) | Providing promising employees with challenging, interesting, and skill-stretching assignments |
| | B) | Striving to retain talented, high-performing employees via promotions, salary increases, performance bonuses, stock options and equity ownership, fringe benefit packages, and other perks |
| | C) | Fostering a stimulating and engaging work environment such that employees will consider the company a great place to work |
| | D) | Encouraging employees to challenge existing ways of doing things, to be creative and innovative in proposing better ways of operating, and to push their ideas for new products or businesses |
| | E) | Hiring only people below the age of 35 who have college degrees and a grade point average of B or better |
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| 8 | |
The capability-building process |
| | A) | requires first developing the ability to do something, however imperfectly or inefficiently; second, translating this ability into a competence and/or capability by learning to do the activity consistently well and at an acceptable cost; and then continuing to polish and refine its know-how in an effort further improve its performance, ideally striving to match or beat rivals in performing the activity. |
| | B) | hinges on establishing first-rate employee training programs to teach employees the desired capability. |
| | C) | involves outsourcing most value chain activities and focusing the company's resources or energies on those one or two activities where it wishes to develop a competitive capability. |
| | D) | is made much easier if company employees are provided with such incentives as salary increases, performance bonuses, and stock options to motivate them to develop the desired skills and expertise. |
| | E) | becomes more certain of success when a company forms a strategic alliance with a company that already possesses the desired capability and then works closely with the ally to learn how to perform the desired capability. |
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| 9 | |
Building core competencies and strong organizational capabilities in performing one or more strategy-critical activities in the value chain: |
| | A) | is an ongoing exercise because of the imperatives of keeping competencies and capabilities in step with ongoing strategy and market changes; as a consequence, it is appropriate to view a company as a bundle of evolving competencies and capabilities. |
| | B) | is best and most cost-effectively accomplished by hiring a cadre of people with the right talent and expertise, putting them together in a single work group, and then teaming the work group with key strategic allies/partners to mesh the skills, expertise, and competencies needed to perform the desired capabilities with some proficiency. |
| | C) | requires spending more money on developing competence-related capabilities than competitors. |
| | D) | is primarily the responsibility of the employee training department and first-line supervisors as opposed to being the organization-building responsibility of senior managers. |
| | E) | is basically a team-building exercise and should be the first thing managers do in establishing an organizational structure. |
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| 10 | |
Which of the following is not one of the traits of the capability-building process? |
| | A) | Normally, core competencies and competitive capabilities emerge incrementally as a company acts (1) to bolster skills that contributed to earlier successes or (2) to respond to customer problems, new technological or market opportunities, and the competitive maneuvers of rivals. |
| | B) | The key to leveraging a core competence into a distinctive competence (or transforming a capability into a competitively superior capability) is concentrating more effort and talent than rivals on deepening and strengthening the competence or capability so as to achieve the dominance needed for competitive advantage. |
| | C) | Core competencies or capabilities are most often bundles of skills and know-how that grow out of the combined efforts of cross-functional work groups and departments that perform complementary activities at several places in the firm's value chain. |
| | D) | Core competencies or capabilities can usually be built and perfected within 12 months provided a company hires capable personnel, trains them thoroughly, and rewards the people who are involved in the capability-building effort with attractive compensation incentives. |
| | E) | Competencies and capabilities that grow stale can impair competitiveness unless they are refreshed, modified, or even phased out and replaced in response to ongoing market changes and shifts in company strategy. |
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| 11 | |
Employee training and retraining: |
| | A) | tend to be strategically important in organizational efforts to create organizational capabilities but are less useful in trying to help teach employees skills-based competencies. |
| | B) | are often a valuable and necessary strategy-implementing and strategy-executing element but cannot be relied upon to help teach empowered employees how to do their jobs better. |
| | C) | come into play primarily when core business processes are fragmented across several functional areas and departments and training is needed to teach employees how to overcome the fragmentation through better cross-department collaboration and cooperation. |
| | D) | merit high-priority on management's strategy-implementing agenda when a firm revises its strategy in ways that call for new skills or different know-how, operating methods, and competitive capabilities and also become a key activity in businesses where technical know-how is changing so rapidly that a company loses its ability to compete unless its skilled people have cutting-edge knowledge and expertise. |
| | E) | becomes particularly significant in a company's organization-building effort if it opts to decentralize decision-making and empower its employees—empowered employees have to be trained to make the correct decisions. |
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| 12 | |
When it is difficult or impossible to out-strategize rivals (beat them with a superior strategy), the other main avenue to competitive advantage is to: |
| | A) | institute a lower cost organization structure. |
| | B) | outcompete them with smarter managers. |
| | C) | outexecute them (beat them by performing certain value chain activities in superior fashion). |
| | D) | do a better job of empowering and motivating employees. |
| | E) | have more effective policies and procedures. |
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| 13 | |
Which one of the following is not part of organizing the work effort in ways that promote successful strategy execution? |
| | A) | Making internally performed strategy-critical value chain activities the main building blocks in the organization structure |
| | B) | Deciding which value chain activities to perform internally and which to outsource |
| | C) | Determining how much authority to centralize at the top and how much to delegate to down-the-line managers and employees |
| | D) | Forming a special department or work unit to lead the company's effort to capture strategic and resource fits |
| | E) | Providing for cross-unit coordination and the necessary collaboration with suppliers and strategic allies |
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| 14 | |
Outsourcing activities not critical to effective strategy execution: |
| | A) | can have the disadvantage of "hollowing out" a company, leaving it without some of the skills and capabilities needed to be a master of its own destiny. |
| | B) | works best where minimal interdepartmental cooperation is needed. |
| | C) | can act to decrease internal bureaucracies, flatten the organizational structure, and add to a company's arsenal of capabilities, plus it makes strategic sense whenever outsiders can perform them at lower cost and/or with higher value-added than the buyer company can perform them internally. |
| | D) | makes it easier to structure the organization into efficiently-sized departments and work groups but has the disadvantage of hindering the development of managers with cross-functional experience. |
| | E) | Both A and C. |
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| 15 | |
Which one of the following falsely describes a centralized approach to decision-making? |
| | A) | Decisions on most matters of importance should be pushed to managers up the line who have the experience, expertise, and judgment to decide what is the wisest or best course of action. |
| | B) | Hierarchical command-and-control structures speed an organization's responses to changing conditions because top-level managers are in a position to quickly review the situation and make a final decision. |
| | C) | Tight control by a few senior managers makes it easy to fix accountability when things do not go well. |
| | D) | There is an assumption that frontline personnel have neither the time nor the inclination to direct and properly control the work they are performing, and that they lack the knowledge and judgment to make wise decisions about how best to do their work. |
| | E) | Top management operates on the belief that strict enforcement of detailed procedures backed by rigorous managerial oversight is the most reliable way to keep the daily execution of strategy on track. |
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| 16 | |
The basic tenets of a decentralized organizational structure include the thesis that: |
| | A) | a company that draws on the combined intellectual capital of all its people can outperform a command-and-control company. |
| | B) | lower-level managers and personnel seldom have the expertise and wisdom to decide what is the wisest and best course of action; hence, tight management control from the top makes the most sense. |
| | C) | decision-making authority should be put in the hands of the people closest to and most familiar with the situation, and these people should be trained to exercise good judgment. |
| | D) | most company personnel have neither the time nor the inclination to direct and properly control they work they are performing. |
| | E) | Both A and C. |
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| 17 | |
One of the big challenges of organizing and managing a work environment where employees are empowered to make decisions in their area of responsibility is: |
| | A) | how to exercise control over the actions and decisions of empowered employees so that the business is not put at risk while trying to capture the benefits of employee empowerment. |
| | B) | how to avoid high levels of stress and anxiety among empowered employees (since they are held accountable for their decisions). Those individuals that are given greater levels of authority and responsibility motivate and challenge those senior managers who no longer have a heavy decision-making load. |
| | C) | how many employees to empower. |
| | D) | how to identify and weed out those empowered employees who prove to be poor decision-makers. |
| | E) | keeping lower-level managers and employees properly trained in how to make good decisions. |
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| 18 | |
The rationale for making strategy-critical value chain activities the primary building blocks in a company's organizational scheme is based on: |
| | A) | the contribution it makes to improving labor productivity and reducing labor costs. |
| | B) | the benefits of keeping the layers of management to a minimum. |
| | C) | the thesis that if activities crucial to strategic success are to have the resources, decision-making influence, and organizational impact they need, they have to be centerpieces in the organizational scheme. |
| | D) | the benefit of keeping the organization structure simple and easy for employees to understand. |
| | E) | making it easier to capture the benefits of centralized decision-making. |
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| 19 | |
One of the big weaknesses of traditional functional organization structures is: |
| | A) | that pieces of strategically relevant activities and capabilities often end up scattered across many departments—remedying this deficiency often entails reengineering the work effort and pulling the people who performed the pieces in functional departments into a group that works together to perform the whole process, thus creating process departments. |
| | B) | fragmenting the decision-making of empowered employees. |
| | C) | making it difficult to centralize decision-making and thereby allow top managers to maintain adequate control over the strategy execution process. |
| | D) | creating more layers of management and a bigger internal bureaucracy. |
| | E) | weakening the effectiveness of both strategic alliances and outsourcing. |
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| 20 | |
Which of the following runs counter to the organizational trends in today's companies? |
| | A) | Empowering company personnel to act on their own judgments and redesigning work processes to achieve greater streamlining and tighter cohesion |
| | B) | Rapid dissemination of information, rapid learning, and rapid response times |
| | C) | Growing use of vertical integration and centralized decision-making to speed responses to changing market conditions and accelerate the building of core competencies and competitive capabilities |
| | D) | Networking with outsiders to improve existing organization capabilities and create new ones |
| | E) | Devoting considerable management attention to building a company capable of outcompeting rivals on the basis of superior resource strengths and competitive capabilities |
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