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| 1 | |
Which one of the following is not a valid strategy-related reason why managers need to be deeply involved in the budgeting and resource allocation process? |
| | A) | Too little funding deprives organizational units of the resources to carry out their piece of the strategic plan and too much funding wastes organizational resources and reduces financial performance. |
| | B) | A change in strategy nearly always calls for budget reallocations and resource shifting. |
| | C) | The funding requirements of any change in strategy need to drive capital allocations and the size of each unit's operating budget. |
| | D) | Without budget reallocations it is hard, if not impractical, to match organization structure to the chosen strategy; moreover, aggressive resource reallocation is a prerequisite to creating needed core competencies and organizational capabilities. |
| | E) | Visible actions to reallocate operating funds and move people into new organizational units signal a determined commitment to strategic change and frequently are needed to catalyze the implementation process and give it credibility. |
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| 2 | |
From a strategy-implementing/strategy-executing perspective, budget allocations should: |
| | A) | primarily be based on creating more core competencies than rivals have. |
| | B) | be strategy-driven and based primarily on how much each organizational unit needs to carry out its piece of the strategic plan efficiently and effectively. |
| | C) | be based on the resources needed to lower the costs of performing each value chain activity. |
| | D) | provide each operating unit with sufficient funds to undertake benchmarking, adopt best practices, implement Six Sigma and/or TQM, and do cutting-edge business process reengineering. |
| | E) | strongly support the company's established policies and procedures regarding how things are to be done. |
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| 3 | |
Prescribing policies and operating procedures aid the task of implementing strategy by: |
| | A) | helping empower product champions and work teams. |
| | B) | paving the way for instituting TQM or Six Sigma programs and adopting best practices. |
| | C) | by helping align the actions and behavior company personnel with the requirements for good strategy execution, placing limits on independent action, helping overcome resistance to change, helping enforce consistency in how things are done in scattered geographic units, and promoting the creation of a work climate that facilitates good strategy execution. |
| | D) | helping prevent the corporate culture from being unhealthy and weak. |
| | E) | pushing employees to accept the need for state-of-the-art operating and support systems. |
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| 4 | |
Which one of the following is false when it comes to designing strategy-facilitating policies and operating procedures? |
| | A) | More policies/procedures work better than few policies/procedures and strict enforcement of a weak policy always beats lax enforcement of a good policy. |
| | B) | Instituting strategy-facilitating policies can mean more policies, fewer policies, or different policies. |
| | C) | A useful guideline is to prescribe enough policies to give organizational members clear direction in implementing strategy and to place desirable boundaries on their actions, then empower them to act within these boundaries however they think makes sense. |
| | D) | The managerial role of establishing and enforcing new policies and operating practices is to paint a different set of white lines, place limits on independent behavior, and channel individual and group efforts along a path more conducive to executing the strategy. |
| | E) | One of the big policy-making issues concerns what activities need to be rigidly prescribed and what activities ought to allow room for independent action on the part of empowered personnel. |
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| 5 | |
A "best practice": |
| | A) | refers to the lowest-cost procedure for performing a specific task or activity. |
| | B) | refers to performing strategy-critical activities in a manner that results in fewer than 5 defects per million. |
| | C) | is the particular value chain activity that a firm performs best. |
| | D) | is a way of performing an activity that at least one company has proved works particularly well. |
| | E) | is a procedure for performing an activity that companies in an industry have "proven" is the most reliable and failsafe way to perform that activity. |
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| 6 | |
Using benchmarking and best practices as a means of achieving operating excellence: |
| | A) | is a four-step process that entails (1) benchmarking how well a company performs specific tasks and activities against best-in-industry or best-in-world performers, (2) adapting the various best practices to fit the company's situation and then implementing them, (3) continuing to benchmark company performance of activities against best-in-industry or best-in-world performers, and (4) continuing to improve and refine the company's performance of its activities and thereby move closer to operating excellence. |
| | B) | is essential if a company is to effectively and efficiently implement TQM and/or Six Sigma quality control systems. |
| | C) | needs to be directed chiefly at manufacturing and customer service activities, since these two areas are generally the most critical to good strategy execution. |
| | D) | is a prerequisite to effective reengineering of core business processes and to building strong core competencies. |
| | E) | is a potent tool for helping top managers set stretch performance targets and track a company's progress in executing its strategy. |
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| 7 | |
Which of the following is not a tool that managers can use to promote operating excellence and further the cause of good strategy execution? |
| | A) | Benchmarking and adoption of best practices |
| | B) | Business process reengineering |
| | C) | Operating and support systems analysis |
| | D) | Six Sigma quality control techniques |
| | E) | TQM |
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| 8 | |
Business process reengineering is a tool for: |
| | A) | remodeling and refreshing a strategy-critical core competence. |
| | B) | pulling the pieces of strategy-critical activities out of different departments and unifying their performance in a single department or cross-functional work group that has charge over the whole process and can be held accountable for performing the activity in a better, cheaper, and/or more strategy-supportive fashion. |
| | C) | reducing the size of a company's managerial bureaucracy. |
| | D) | boosting the quality of a company's product and the caliber of its customer service. |
| | E) | expediting the development of an important new competitive capability. |
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| 9 | |
Total quality management (TQM): |
| | A) | is a philosophy of managing that involves convincing employees that superior product quality is the most reliable key to competitive success in the marketplace. |
| | B) | is a tool for providing customers with the highest quality product of any company in the industry. |
| | C) | involves managing company operations in a manner calculated to quickly and efficiently make quantum gains in the quality and effectiveness with which production activities are performed. |
| | D) | is a philosophy of managing a set of business practices that emphasizes continuous improvement in all phases of operations, 100% accuracy in performing tasks, involvement and empowerment of employees at all levels, team-based work design, benchmarking, and total customer satisfaction. |
| | E) | involves managing company operations in a manner calculated to result in mistake-free management of a company's entire business. |
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| 10 | |
Which one of the following statements about total quality management (TQM) is false? |
| | A) | TQM aims at instilling enthusiasm and commitment to doing things right from the top to the bottom of the organization. |
| | B) | TQM produces significant results very quickly—very little benefit emerges after the first six months. |
| | C) | TQM doctrine preaches that there's no such thing as "good enough" and that everyone has a responsibility to participate in continuous improvement. |
| | D) | Effective use of TQM entails creating a corporate culture bent on continuously improving the performance of every task and every value-chain activity |
| | E) | While TQM concentrates on the production of quality goods and fully satisfying customer expectations, it achieves its biggest successes when it is also extended to employee efforts in all departments. |
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| 11 | |
Six Sigma quality control: |
| | A) | is a tool that is superior to TQM in achieving top-notch quality in manufacturing a product. |
| | B) | consists of a disciplined, statistics-based system aimed at producing not more than 2.5 defects per million iterations. |
| | C) | is based on three principles: (1) all work is a statistically controllable process; (2) no well-controlled process allows variability; and (3) defect-free work requires tight statistical controls. |
| | D) | is the best practice for managing manufacturing and assembly activities. |
| | E) | is a disciplined, statistics-based approach to manufacturing or assembling a product and results in 5 defects per million iterations when implemented properly. |
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| 12 | |
Six Sigma's DMAIC process is a particularly good vehicle for: |
| | A) | improving performance when there are small variations in how well an activity is performed; if there are wide variations, then the DMADV process has to be used. |
| | B) | developing new processes or products at Six Sigma quality levels. |
| | C) | companies wanting to improve customer service; Six Sigma DMADV has to be used to improve manufacturing or assembly processes. |
| | D) | minimizing the number of company personnel which require Black Belt training and thus keeping the costs for Six Sigma use below $250,000 per task. |
| | E) | improving performance when there are wide variations in how well an activity is performed. |
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| 13 | |
Building a total quality culture and realizing full value from TQM or Six Sigma initiatives does not entail which one of the following? |
| | A) | Visible, unequivocal, and unyielding commitment to total quality and continuous improvement, including a quality vision and specific, measurable objectives for boosting quality and making continuous improvement |
| | B) | Screening job applicants rigorously and hiring only those with the attitudes and aptitudes right for quality-based performance |
| | C) | Building a distinctive competence in quality control, especially as it applies to manufacturing/assembly and customer service |
| | D) | Providing quality training for most employees and stressing prevention (doing it right the first time) rather than inspection (instituting ways to correct mistakes) |
| | E) | Preaching that performance can, and must, be improved because competitors aren't resting on their laurels and customers are always looking for something better |
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| 14 | |
The use of state-of-the-art information and operating systems aid the task of implementing and executing strategy because: |
| | A) | such support systems not only enable better strategy execution but also strengthen organizational capabilities (perhaps enough to provide a competitive edge over rivals). |
| | B) | they are the most effective and technologically sophisticated way to realize a competitive edge over rivals. |
| | C) | they help managers run a tight ship and properly monitor the actions and decisions of empowered employees. |
| | D) | such systems make it easier to develop strategy-supportive policies and procedures. |
| | E) | they make the use of TQM or Six Sigma programs substantially more cost-effective. |
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| 15 | |
From a strategy-implementing/strategy-executing perspective, which one of the following is not a benefit of installing well conceived state-of-the-art information and operating systems? |
| | A) | Helping mobilize information and use knowledge effectively |
| | B) | Speeding decision-making and shortening organizational response times |
| | C) | Strengthening organizational capabilities |
| | D) | Better enabling company managers to stay on top of implementation initiatives and daily operations, and to intervene if things seem to be drifting off course |
| | E) | Enabling companies to wisely set stretch objectives and then to tie incentives and rewards to the achievement of these objectives |
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| 16 | |
Management's most powerful tool for mobilizing employee commitment to competent strategy execution and operating excellence is: |
| | A) | total quality management. |
| | B) | business process reengineering. |
| | C) | a properly designed reward structure. |
| | D) | making the company a great place to work in terms of pay scales, fringe benefits, and employee perks. |
| | E) | effective screening of job applicants such that only the most motivated and energetic people are hired. |
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| 17 | |
A well-designed reward system: |
| | A) | makes strategically relevant measures of performance the dominant basis for incentive compensation. |
| | B) | should strive for a 75%-25% mix between positive and negative rewards. |
| | C) | should strive for a 67%-33% mix between monetary and non-monetary rewards. |
| | D) | must emphasize weeding out employees who are consistently low performers (in the bottom 10% to 15%). |
| | E) | All of these. |
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| 18 | |
Enlisting employees' sustained and energetic commitment to good strategy execution and achievement of the targeted strategic and financial objectives is best done by: |
| | A) | making sure that individuals' rewards are tightly linked to performing their assigned duties. |
| | B) | making sure that individuals' rewards are tightly linked to achieving the desired results (meeting or beating performance targets). |
| | C) | providing employees with a high degree of job security. |
| | D) | selecting rewards that will boost worker productivity and lower labor costs. |
| | E) | hiring job applicants that are good team players. |
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| 19 | |
Which of the following motivational practices is least likely to be effective in spurring stronger employee commitment to good strategy execution? |
| | A) | Stating the strategic vision in inspirational terms that make employees feel they are a part of doing something worthwhile in a larger social sense |
| | B) | Having knockout facilities and providing attractive perks and fringe benefits |
| | C) | Making sure that the ideas and suggestions of employees are valued and and that those with merit are promptly acted on |
| | D) | Creating a "family" work atmosphere where there is genuine sincerity, caring, and mutual respect among workers and between management and employees |
| | E) | Creating a no-pressure/no-adverse-consequences work environment where employees have a high degree of job security |
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| 20 | |
Which of the following is not characteristic of a compensation and reward system designed to help drive successful strategy execution? |
| | A) | Making the performance payoff a major, not minor, piece of the total compensation package |
| | B) | Keeping performance incentives and bonuses to less than 15% of total compensation |
| | C) | Not skirting the system to find ways to reward effort rather than results and making sure that the performance targets that each individual or team is expected to achieve involve outcomes that the individual or team can affect |
| | D) | Having incentives that extend to all managers and all workers and generously rewarding people who turn in outstanding performances |
| | E) | Tying incentives to performance outcomes directly linked to good strategy execution and financial performance and keeping the time between achieving the target performance outcome and the payment of the reward as short as possible |
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