MGT 4150- Exam 3: Chapters 9, 10 & 12

Strategy is about competing differently than rivals, thus strategy success is about: A) the sources of sustained advantages and superior profitability. B) those emergent, unplanned, reactive, and adaptive strategies that are more appropriate than deliberate or intended ones that drive the realized strategy. C) matching internal resources and capabilities to the industry environment. D) keeping the firm current with the rapid pace of change in the industry. E) All of these.

A) the sources of sustained advantages and superior profitability.

Staffing

- Assemble a strong management team and a cadre of competent employees - Putting together a talented management team with the right mix of experience, skills, and abilities is the first step

Decentralized decision making

- Authority delegated to lower-level managers and employees - Decision-making authority should be put in the hands of the people closest to, and most familiar with, the situation - Those with decision-making authority should be trained to exercise good judgment - A firm that draws on the combined intellectual capital of all its employees can outperform a command-and-control firm

Centralized decision making

- Authority is retained by top management - Decisions on most matters of importance should be in the hands of top-level managers who have the experience, expertise, and judgment to decide what is the best course of action - Lower-level personnel have neither the knowledge, the time, nor the inclination to properly manage the tasks they are performing - Strong control from the top is a more effective means for coordinating the firm's actions

Matching organizational structure to the strategy

- Decide which value chain activities to perform internally and which ones to outsource - Align the firm's organizational structure with it's strategy - Decide how much authority to centralize at the top and how much to delegate to down-the-line managers and employees - Facilitate collaboration with external partners and strategic allies

Superior strategy execution capabilities

- Difficult to imitate and socially complex process that takes time to develop - Maximize resources and competitive - Lower cost and permit firm to deliver more value to customers - Enable a firm to react quickly to market changes, beat competitors, and gain market dominance - The only source of sustainable competitive advantage when strategies are easy for rivals to copy

Decentralized Structure Advantages

- Encourages employees to exercise initiative and act responsibly - Promotes greater motivation and involvement in the business on the part of more company personnel - Spurs new ideas and creative thinking - Allows fast response to market change - Entails fewer layers of management

Committing to Executing a Strategy

- Entails figuring out the specific techniques, actions, and behaviors necessary for a smooth strategy-supportive operation - Following through to get things done and deliver results - Making things happen (leadership) and making them happen right (management)

3 Thought processes for ethical standards:

- Ethical Universalism - Ethical Relativism - Integrated Social Contracts theory

Training is important in:

- Executing a strategy that requires different skills, competitive capabilities, and operating methods - Organizational efforts to build skills-based competencies - Supplying technical know-how to employees when rapidly changing technology puts firm in danger of losing its ability to compete

Drivers of unethical behavior

- Faulty internal oversight allows self-dealing in pursuit of personal gain - Short-termism pressure to meet or beat short-term targets - Weak or corrupt ethical culture or environment

Test of strategic leadership

- Firm has a good strategy and business model - Strategy competently executed - Firm achieving performance targets

Centralized Structure Advantages

- Fixes accountability through tight control from the top - Eliminates potential for conflicting goals and actions on the part of lower-level managers - Facilitates quick decision making and strong leadership under crisis situations

Two key factors to a strong culture

- Founder or strong leader with strong values - Commitment by the firm to ethical behavior

Outsourcing execution-related benefits

- Helps in outclassing rivals and in turning a core competence into a distinctive competence - Decreases bureaucracies, flattens structure, speeds decision making and shorten respond time to changing market conditions - Adds firm's capabilities

Decentralized Structure Disadvantages

- Higher-level managers may be unaware of actions taken by empowered personnel under their supervision - Puts the organization at risk if empowered employees happen to make "bad" decisions - Can impair cross-unit collaboration

Changing a problem culture

- Identify facets of the present culture that pose obstacles - Specify new actions, behaviors and work practices - Talk openly - Follow with visible, forceful actions

Business case for CRS and Env. Sustainability

- Increase reputation and buyer patronage - Reduced risk of reputation-damaging incidents - Lower turnover costs and enhanced employee retention and recruiting - Increased revenue - Best serve long-term interests of stakeholders

Recruiting, training, and retaining CAPABLE EMPLOYEES

- Intensively screen and evaluate applicants - Provide training programs throughout emps careers - Rotate promising ppl through challenging, and skill-stretching intentional assignments - Make work environment stimulating and engaging - Financial incentives and other perks to retain - Coach average performers to improve skills and capabilities, while weeding out under-performers

Two best signs of good strategy execution are whether a company...

- Is meeting or beating performance targets - Is performing value chain activities in a manner that is conducive to company-wide operating excellence

Strategy Execution

- Is operations-driven, involving management of both people and business processes - Is a job for the whole management team, not just a few senior managers - Can take years longer to develop as a real proficiency than developing a strategy - Requires a determined commitment to change, action and performance

Ethics code Litmus Test

- Is what we are proposing to do fully compliant with our code of ethics? - Action in harmony with our core values? - Is action ethically objectionable?

Structure is aligned with strategy when

- Its design contributes to the creation of value for customers - Its parts are aligned with one another and also matched to the requirements of the strategy - It lowers operating costs through lower bureaucratic costs and operational efficiency

Centralized Structure Disadvantages

- Lengthens response times by those closest to the market conditions because they must seek approval for their actions - Does not encourage responsibility among lower-level managers and rank-and-file employees - Discourages lower-level managers and rank-and-file employees from exercising any initiative

Simple Structure

- Line-and-staff structure - Consists of a central executives (often the owner-manager) who handles all major decisions and oversees all operations with the help of a small staff

Integrative social contracts theory

- Middle ground between universalism and relativism - Collective views of multiple societies from universal ethical principles (first order) - Cultures or groups can specify locally ethical actions (second-order)

Forces that cause firm's culture to evolve

- New or revolutionary technologies - Diversification into new business - Rapid growth - Merger or acquisition - Shifting internal conditions - New marketplace challenges

Moral case for CRS and Env. Sustainability

- Operate ethically and legally - Provide good work conditions for employees - Be a good environmental steward - Display good corporate citizenship

Access capabilities via collaborative partnerships (approaches to acquiring capabilities from an external source)

- Outsource the function requiring the capabilities to a key supplier or another provider - Collaborate with a firm that has complementary resources and capabilities - Engage in a collaborative partnership for the purpose of learning how the partner does things

Environmental Sustainability Strategy

- Protect the environment - Longevity of natural resources - Maintain ecological support systems for future generations - Guard against ultimate endangerment of the planet

Transforming core values and ethical standards into cultural norms

- Recruit and hire compatible applicants - Incorporate values and ethics into orientation and training - Senior executives frequently reiterate - Use value statements and code of ethics as benchmarks - Use core values when evaluating performance - Encourage all employees to help enforce (peer pressure) - Ceremonial occasions to recognize - Strict ethical enforcement procedures

Substantive culture-changing actions

- Replace key executives - Promote individuals - Appoint outsiders - Screening candidates for position carefully - Culture-training - Compensation incentives

Perpetuating the culture

- Screening and selecting new employees - Systematic indoctrination of new members - Vocal support by senior managers - Rewarding those who display cultural norms - Ceremonies honoring employees - Telling and retelling of the firm's legends

When strategies fail the Litmus Test

- Sizable civil fines and lawsuits - Devastating image and PR hits - Sharp stock price drops as investors lose confidence - Criminal indictments and convictions

10 Basic Tasks of the strategy Execution Process

- Staff organization with the right people - Build organizational capabilities - Establish a strategy-supportive organizational structure - Allocate sufficient resources - Institute policies and procedures - Drive continuous improvement - Install Info and operating systems - Tie incentives to achievement of goals - Install corporate culture - Exercise strong leadership

What are the drivers of unethical strategies and business behavior?

1. Faulty Oversight & Self Dealing 2. Pressure for Short-term Performance 3. A Weak or Corrupt Ethical Culture

B (it provides company personnel with clear guidance regarding "how we do things around here and produces significant peer pressures from co-workers to conform to culturally acceptable norms)

A work environment where the culture is in sync with the chosen strategy & is conducive to good strategy execution is considered a valuable managerial ally because: a) there is much less risk of embarrassing ethical violations. b) it provides company personnel with clear guidance regarding "how we do things around here and produces significant peer pressures from co-workers to conform to culturally acceptable norms". c) there is reduced need to incorporate negative motivational practices and punitive-type incentives into the reward structure and in the company's approach to people management. d) there is reduced need to employ benchmarking, best practice programs, reengineering, Six Sigma, and TQM to achieve competitive advantage. e) the culture can be readily incorporated into the company's strategic vision and facilitate the achievement of stretch objectives.

Which one of the following does NOT account for WHY a company's strategy evolves from one version to another? A) A need to promote stability and retain the status quo. B) The need to abandon some strategy elements that are no longer working well. C) A need to respond to changing customer requirements and expectations. D) A need to react to fresh strategic maneuvers on the part of rival firms. E) The proactive efforts of company managers to improve this or that aspect of the strategy.

A) A need to promote stability and retain the status quo.

Acquire capabilities through mergers and acquisitions

A question of... - Market opportunity (when a market opp can slip by faster then a needed capability can be created internally) - Competitive necessity (when industry conditions, technology, or competitors are moving at such a rapid clip that time is of the essence) - Successful integration (tacit knowledge and complex routines may not transfer readily from one organizational unit to another

Moral Case

A strategy that is unethical is morally wrong and reflects badly on the character of the firm's personnel

Which of the following builds a moral case for corporate social responsibility and environmentally sustainable business practices?

A strong commitment to socially responsible behavior reduces the risk of reputation-damaging incidents.

A company achieves a competitive advantage when: A) it provides buyers with superior value compared to rival sellers or offers the same value at a lower cost. B) it has a profitable business model. C) it is able to maximize shareholder wealth. D) it is consistently able to achieve both its strategic and financial objectives. E) its strategy and its business model are well-matched and in sync.

A) it provides buyers with superior value compared to rival sellers or offers the same value at a lower cost.

Excellent execution of an excellent strategy is: A) the best test of managerial excellence and the best recipe for making a company a standout performer. B) a solid indication that managers are maximizing profits and looking out for the best interests of shareholders. C) the best test of whether a company is a "true" industry leader. D) the best evidence that managers have a winning business model. E) the best test of whether a company enjoys sustainable competitive advantage.

A) the best test of managerial excellence and the best recipe for making a company a standout performer.

76. Which of the following techniques are utilized by leaders to stay informed on how well strategy execution process is progressing? A. Managing by walking around (MBWA). B. Managing business with action (MBWA). C. Multi-business warning actions (MBWA). D. Managers being well-advised (MBWA). E. None of these.

A. Managing by walking around (MBWA).

Business Case

An ethical strategy can be both good business and serve the self-interest of shareholders

Which of the following is NOT true regarding the effect of ethical standards on a company's strategy?

An ethical strategy results in higher employee turnover.

53. What defines an insular, inwardly focused culture? A. The firm never underestimates rivals because of their proven track record in defending challenges. B. The firm believes they have all the answers because of their past great market success and is thus, overconfident. C. The firm's unflinching belief in the company's superiority breeds a champion's attitude and thus they thrive on doing better by adapting to fresh thinking from outside the company. D. The firm values their customer's opinions and fully understands their needs and expectations. E. All of these.

B. The firm believes they have all the answers because of their past great market success and is thus, overconfident.

The pattern of actions and business approaches that would NOT define a company's strategy include: A) actions to strengthen market standing and competitiveness by acquiring or merging with other companies. B) actions to strengthen competitiveness via strategic coalitions and partnerships. C) actions to upgrade competitively important resources and capabilities. D) actions to gain sales and market share with lower prices despite increased costs. E) actions to strengthen the bargaining position of suppliers and distributors with rivals.

D) actions to gain sales and market share with lower prices despite increased costs.

Good strategy combined with good strategy execution: A) offers a surefire guarantee for avoiding periods of weak financial performance. B) are the two best signs that a company is a true industry leader. C) are more important management functions than forming a strategic vision and setting objectives. D) are the most telling signs of good management. E) signal that a company has a superior business model.

D) are the most telling signs of good management.

To improve performance, there are many different avenues for outcompeting rivals such as: A) realizing a higher cost structure and lower operating profit margins than rivals in order to drive sales growth. B) achieving products analogous with competitors so as to be competitive in the same markets. C) pursing similar personalized customer service or quality dimensions as rivals. D) confining their operations to local or regional markets or developing product superiority or even concentrating on a narrow product lineup. E) None of these.

D) confining their operations to local or regional markets or developing product superiority or even concentrating on a narrow product lineup.

The objectives of a well-crafted strategy require management to strive to: A) match rival businesses products and quality dimensions in the marketplace. B) build profits for short-term success. C) realign the market to provoke change in rival companies. D) develop lasting success that can support growth and secure the company's future over the long term. E) re-create their business models regularly.

D) develop lasting success that can support growth and secure the company's future over the long term.

A winning strategy is one that A) makes the company a market leader, is ethically and socially responsible, and maximizes profits. B) is highly profitable and boosts the company's market share. C) passes the profitability test, the ethics and social responsibility test, the customer satisfaction test, and the shareholder wealth test. D) fits the company's internal and external situation, builds sustainable competitive advantage, and boosts company performance. E) passes the ethical standards test, the competitive advantage test, and the profitability test.

D) fits the company's internal and external situation, builds sustainable competitive advantage, and boosts company performance.

A viable business model includes a valuable customer value proposition that A. is always partly deliberate/planned and partly emergent/reactive. B. is an essential component of pursuing the company's strategic intent. C. suggests the greater the value provided and the lower the price, the more attractive the value proposition. D. lays out the approach to satisfying buyer wants and needs at a premium price. E. must set forth management's long-term action plan for achieving market leadership.

C. suggests the greater the value provided and the lower the price, the more attractive the value proposition

Question 2 - Business ethics concerns: A. developing a consensus among companies worldwide as to what ethical principles businesses should be expected to observe in the course of conducting their operations. B. what ethical behaviors should be expected of company personnel in the course of doing their jobs. C. the application of general ethical principles to the actions and decisions of companies and the conduct of their personnel. D. developing a special set of ethical standards for businesses to observe in conducting their affairs. E. picking and choosing among the consensus ethical standards of society to arrive at a set of ethical standards that apply directly to operating a business.

C. the application of general ethical principles to the actions and decisions of companies and the conduct of their personnel.

26. The hallmark of a strong-culture company is A. strictly enforced policies and procedures. B. a strongly entrenched competitive strategy. C. the dominating presence of certain deeply-rooted values, norms of behavior that are widely shared and operating approaches that "regulate" the conduct of a company's business and the climate of its workplace. D. decentralized decision-making and empowered employees. E. a deep commitment to benchmarking, best practices, and operating excellence.

C. the dominating presence of certain deeply-rooted values, norms of behavior that are widely shared and operating approaches that "regulate" the conduct of a company's business and the climate of its workplace.

78. The leadership challenges that top executives face in making corrective adjustments when things are not going well include A. knowing when to replace poorly performing workers and when to do a better job of coaching them to do the right things. B. being able to discern whether to emphasize adjustments that will promote better achievement of strategic performance targets or whether to emphasize adjustments that will promote better achievement of financial performance targets. C. undertaking a thorough analysis of the situation, exercising good business judgment in deciding what actions to take and then ensuring good implementation of the corrective actions that are initiated. D. having the analytical skills to separate the problems due to a bad strategy from the problems due to bad strategy execution. E. deciding whether the company would be better off making adjustments that curtail the achievement of strategic objectives or that curtail the achievement of financial objectives or that curtail the achievement of some of both.

C. undertaking a thorough analysis of the situation, exercising good business judgment in deciding what actions to take and then ensuring good implementation of the corrective actions that are initiated.

1) technologies 2) diversification 3) rapid growth 4) merger/acquisition 5) internal 6) challenges

Causes of cultural change: 1) new or revolutionary ________ 2) ______ into new business 3) _____ _____ of the firm 4) ______ or ____ of another firm 5) shifting ______ conditions 6) new _____ in the marketplace

Determining how much authority to delegate

Centralized decision making Decentralized decision making

Matrix structure

Combines two or more organizational forms, with multiple reporting relationships. It is used to foster cross-unit collaboration.

High Performance Cultures

Commitment to achieving stretch objectives and accountability

Value statement and code of ethics

Communicates expectations of how employees should conduct themselves in the workplace

Which of the following companies incurs mainly internal administrative costs due to unethical practices?

Company D must retrain its employees who are using their Twitter accounts to post workplace frustrations.

Organizational structure

Comprises the formal and informal arrangement of tasks, responsibilities, lines of authority, and reporting relationships for the firm

Environmental Sustainability Strategy

Consists of the firm's deliberate actions to: protect the environment provide for the longevity of natural resources maintain ecological support systems for future generations guard against ultimate endangerment of the planet

Structuring

Create strategy-supportive organization capable of good strategy execution.

The most trustworthy signs of a well-managed company are A) a strong emphasis on offensive strategies rather than defensive strategies. B) a strategy matched to fast-evolving market conditions and bigger profit margins than rivals and a steady upward trend in net income. C) attractive bottom-line performance and a proven business model. D) good strategy and good strategy execution. E) having a profitable business model, a willingness to change the company's business model whenever circumstances warrant, and having a sustainable competitive advantage.

D) good strategy and good strategy execution.

28. The characteristics of a strong culture company include: A. deeply-rooted values and operating approaches that "regulate" the conduct of a company's business and the climate of its workplace. B. strong managerial commitment to display company values and principles in their own actions and behavior. C. dedicated efforts on the part of management to communicating values and business principles to organization members and explaining how they relate to the company's business environment. D. ingrained shared values and business principles guide management in making decisions. E. All of these.

E. All of these.

32. A strongly implanted corporate culture has a powerful influence on behavior because A. most corporate personnel have acknowledged and accepted the cultural traditions. B. of management's expectations and co-worker peers pressure to conform. C. over-time people who do not like the culture tend to leave. D. over-time achieving low-workforce-turnover is a catalyst for conformity and acceptance. E. All of these.

E. All of these.

50. What is the distinctive characteristic of an unhealthy corporate culture? A. The presence of counterproductive cultural traits that adversely impact the work climate and company performance. B. The preoccupation with risk management and capitalizing on related market opportunities. C. The decision-making effort is broad-based and subject to rapid -change environment pressure. D. The ethical behavior is driven by subcultures that can drive performance. E. All of these.

E. All of these.

52. What makes a politicized internal environment so unhealthy? A. The fact that political infighting consumes a great deal of organizational energy. B. The continuous empire-building is common practice as managers pursue their own agendas. C. The building of autonomous fiefdoms pervades the work climate. D. The overabundance of political maneuvering takes away from efforts to execute strategy. E. All of these.

E. All of these.

54. What defines an unethical and greed-driven culture? A. Company managers and staff have little regard for ethical standards. B. Companies run by executives that are driven by greed and ego gratification. C. Executives exude the "ends-justify-the-means" mentality in pursuing overambitious operating and financial targets. D. Companies that adopt accounting principles that make their financial performance appear better than it really is. E. All of these.

E. All of these.

62. In moving to alter a problem culture, management should A. identify which aspects of the present culture are supportive of good strategy execution and which ones are not. B. specify what new actions, behaviors, and work practices should be prominent in the "new" culture. C. talk openly about the problems of the present culture and how new behaviors will improve performance. D. employ visible, forceful actions—both substantive and symbolic—to ingrain a new set of behaviors, practices and cultural norms. E. All of these.

E. All of these.

70. Symbolic culture changing actions include A. displaying a "lead by example" philosophy. B. reinforcing and celebrating culture-change successes. C. praising individuals and groups that exemplify the new desired behavior. D. ensuring actions match the rhetoric E. All of these.

E. All of these.

77. Which of the following managerial practices are used to successfully lead the effort to foster a results-oriented, high-performance culture? A. Using empowerment to help create a fully engaged workforce. B. Making champions out of the people who spearhead new ideas and/or turn in winning performances. C. Celebrating individual, group, and company successes. D. Treating employees as valued partners in the drive for operating excellence and good business performance. E. All of these.

E. All of these.

79. Which of the following is an example of leadership actions or managerial practices taken to foster a results-oriented, high-performance culture? A. Treating employees as valued partners. B. Utilize people-management practices to build morale and foster pride. C. Setting stretch objectives and clearly communicating expectations for reaching targets. D. Using motivational techniques and compensation incentives to inspire employees. E. All of these.

E. All of these.

A company may develop an emergent strategy due to A. strategic moves by rival firms. B. unexpected shifts in customer preferences. C. fast-changing technological developments. D. new market opportunities. E. All of these.

E. All of these.

A company's strategy evolves over time as a consequence of A. the need to keep strategy in step with changing market conditions and changing customer needs and expectations. B. the proactive efforts of company managers to fine-tune and improve one or more pieces of the strategy. C. the need to abandon some strategy features that are no longer working well. D. the need to respond to the newly-initiated actions and competitive moves of rival firms. E. All of these.

E. All of these.

In the course of crafting a strategy, it is common for management to A. decide to abandon certain strategy elements that have grown stale or become obsolete. B. modify the current strategy when market and competitive conditions take an unexpected turn or some aspects of the company's strategy hit a stone wall. C. modify the current strategy in response to the fresh strategic maneuvers of rival firms. D. take proactive actions to improve this or that piece of the strategy. E. All of these.

E. All of these.

Proven approaches to winning a sustainable competitive advantage include which of the following? A. Strategies keyed to developing a low-cost-based advantage. B. Strategies keyed to creating a broad differentiation-based advantage. C. Focusing on a narrow market niche within an industry. D. Developing a best-cost provider strategy. E. All of these.

E. All of these.

Questino 5 - The three dimensions of performance are often referred to in terms of the "three pillars" and include: A. People, planet, and profit. B. People, which refers to the various social initiatives that make up the CSR strategies. C. Planet, which refers to a firm's ecological impact and environmental practices. D. Profit encompasses the economic impact (value and costs) that the company has on society. E. All of these.

E. All of these.

Question 3 - Unethical managerial behavior tends to be driven by such factors as: A. the pervasiveness of immoral & amoral business people. B. overzealous pursuit of personal gain, wealth, and other selfish interests. C. a company culture that puts the profitability and good business performance ahead of ethical behavior. D. heavy pressures on company managers to meet or beat earnings targets. E. All of these.

E. All of these.

Question 4 - Which of the following represents a justifiable reason for why a company's strategy should be ethical? A. An unethical strategy reflects badly on the character of the company personnel involved. B. A strategy that is unethical in whole or in part is morally wrong. C. Pursuing an unethical strategy damages a company's reputation and can have costly consequences. D. An ethical strategy is good business and is in the best interest of shareholders. E. All of these.

E. All of these.

self-dealing in the pursuit of personal gain

Faulty internal oversight allows....

Ethical Relativism

Hold that differing beliefs, customs, and behavioral norms across countries and cultures give rise to multiple sets of standards of what is ethically right or wrong.

Ethical Universalism

Holds that common understandings across multiple cultures and countries about what constitutes right and wrong give rise to universal ethical standards that apply to all societies, all firms, and all business people

Ethical Universalism

Holds that common understandings across multiple cultures and countries about what constitutes right and wrong give rise to universal ethical standards that apply to all societies, all firms, and all businesspeople

Ethical Relativism

Holds that differing beliefs, customs, and behavioral norms across countries and cultures give rise to multiple sets of standards of what is ethically right or wrong

Five

How many components are there of a Corporate Social Responsibility Strategy

E

In moving to alter a problem culture, management should: a) identify which aspects of the present culture are supportive of good strategy execution and which ones are not. b) specify what new actions, behaviors, and work practices should be prominent in the "new" culture. c) talk openly about the problems of the present culture and how new behaviors will improve performance. d) employ visible, forceful actions—both substantive and symbolic—to ingrain a new set of behaviors, practices and cultural norms. e) All of these.

What are the benefits associated with the business case for CSR & environmentally sustainable business practices?

Increased reputation & buyer patronage Reduced risk of reputation-damaging incidents Lower turnover costs and enhanced employee recruiting and workforce retention Increased revenue enhancement opportunities due to support of CSR and sustainability CSR and sustainability best serve long-term interests of shareholders (stakeholder)

culture that promotes good strategy execution

Instill a corporate...

Which one of the following is NOT a key element of integrated social contracts theory?

Integrated social contracts theory rejects the slippery slope of ethical relativism and embraces ethical universalism.

E

The three dimensions of performance are often referred to in terms of the "three pillars" and include: a) People, planet, and profit. b) People, which refers to the various social initiatives that make up the CSR strategies. c) Planet, which refers to a firm's ecological impact and environmental practices. d) Profit encompasses the economic impact (value and costs) that the company has on society. e) All of these.

Which of the following statements about the ethical relativism school of thinking is FALSE?

When there are cross-country or cross-cultural differences in ethical standards, it is appropriate for ethical standards in a company's home market to take precedence over what the local ethical standards may be.

E

Which of the following represents a justifiable reason for why a company's strategy should be ethical? a) An unethical strategy reflects badly on the character of the company personnel involved. b) A strategy that is unethical in whole or in part is morally wrong. c) Pursuing an unethical strategy damages a company's reputation and can have costly consequences. d) An ethical strategy is good business and is in the best interest of shareholders. e) All of these.

Adaptive Cultures

Willingness to accept change and take on challenges

Which of the following is NOT a key question that senior executives must ask whenever a new strategic initiative is under review?

Would the potential outcome of the proposed action pose a risk of embarrassment?

The notion of social responsibility as it applies to businesses is concerned with

a company's duty to operate in an honorable manner and provide good working conditions for employees.

The three dimensions of performance are often referred to in terms of the "three pillars" and include all of the following EXCEPT

a company's efforts to reduce research and development funding to boost profits.

Multi-divisional structure

a decentralized structure consisting of a set of operating divisions organized along business, product, customer group, or geographic lines, and a central corporate headquarters that allocates resources, provides support functions, and monitors divisional activities.

Studies done on the correlation of between good corporate behavior and good financial performance have generally found

a small positive correlation.

Ethical principles in business: a) deal chiefly with the actions and behaviors required to operate companies in a socially responsible manner. b) deal chiefly with the rules each company's top management and board of directors make about "what is right" and "what is wrong." c) are not materially different from ethical principles in general. d) are generally less stringent than the ethical principles for society at large. e) are generally more stringent than the ethical principles for society at large.

c) are not materially different from ethical principles in general.

Ethical principles as they apply to the conduct of personnel and business decisions

deal primarily with the company's duty to comply with legal requirements and conform to ethical norms of society, in general.

The contention that since there are cross-country or cross-cultural differences in ethical standards, it is appropriate to judge behavior as ethical/unethical in the light of local customs and social mores should take precedence over a single set of ethical standards or what may be applicable in a company's home market

defines what is meant by ethical relativism.

Which of the following would increase the likelihood of ethical lapses as well as poor long-term company performance?

dramatic cuts in research and development expenditures in years when low earnings are reported by the company

Define Business Ethics.

general ethical principles to the actions and decisions of businesses and the conduct of their personnel. Are not materially different from ethical principles in general because business actions have to be judged in the context of society's standards of right & wrong.

The business case for why companies should act in a socially responsible manner includes such reasons as it

generates internal operating benefits (as concerns employee recruiting, workforce retention, employee morale, and training costs).

Good corporate citizens

go beyond meeting society's expectations for ethical strategies and business behavior by fostering social benefit and balancing the interests of all.

Unethical managerial behavior tends to be driven by such factors as

overzealous or obsessive pursuit of personal gain, wealth, and other self interests; a company culture that puts the profitability and good business performance ahead of ethical behavior; and heavy pressures on company managers to meet or beat performance targets.

Define Ethics.

principles of right or wrong conduct.

Sourcing a supply from a small, women-owned business is an example of a corporate social responsibility action to

promote workforce diversity.

A company that promotes carpooling among its employees, has cut its printer-paper usage in half, and has installed solar panels on its roof is an example of a corporate social responsibility action to

protect and sustain the environment.

The business case for why companies should act in a socially responsible manner DOES NOT include such reasons as

reducing the triple bottom line.

Sustainability

relationship of a firm to its environment and its use of natural resources

Which of the following is NOT NECESSARILY a consequence of pursuing a strategy that has unethical or shady components?

sharp drops in the price of company stock

The business case for CSR and environmentally sustainable business practices suggests such actions could lead to all of the following EXCEPT

shorter supply chain.

A company that sets aside 2 percent of its pre-tax profits to build and then fund a cancer-recovery facility for teens is an example of a corporate social responsibility action to

support philanthropy.

Which of the following is NOT generally an action for a company to consider in crafting a strategy of social responsibility?

taking steps to provide suppliers, distributors, and other value chain partners with handsome profit margins

The theory of corporate social responsibility concerns

the company's responsibility to balance between strategic actions to benefit shareholders against the duty to be a good corporate citizen.

The litmus test of a company's code of ethics is

the extent to which it is embraced in crafting strategy and in the day-to-day operations of the business.

Corporate culture

the meshing of shared values, beliefs, business principles, and traditions that imbues a firm's operating style, behavioral norms, ingrained attitudes, and work atmosphere

The school of ethical universalism holds that

the most fundamental conceptions of right and wrong are universal and apply to members of all societies, all companies, and all businesspeople.

Senior executives can ensure compliance with the ethical code of conduct by considering whether

the proposed action is fully compliant and in harmony with the code of ethical conduct and whether stakeholders would consider anything ethically objectionable.

The contentions that (1) many of the same standards of what's ethical and what's unethical resonate with peoples of most societies regardless of local traditions and cultural norms and (2) to the extent there is common moral agreement about right and wrong actions, common ethical standards can be used to judge the conduct of personnel at companies operating in a variety of country markets and cultural circumstances, are defining beliefs of which of the following?

the school of ethical universalism but not the school of ethical relativism

Short-termism is defined as

the tendency for managers to focus on immediate performance objectives at the expense of longer-term strategic objectives.

According to the ethical relativism school of thinking,

there can be no one-size-fits-all template (set of authentic ethical norms) against which to gauge the conduct of company personnel, due to cross-cultural differences in ethical standards.

According to the school of ethical universalism

to the extent there is common moral agreement about right and wrong actions and behaviors across multiple cultures and countries, there exists a set of universal ethical standards to which all societies and all individuals can be held accountable.

Moral case

unethical is morally wrong and reflects badly on the character of the firm's personnel

A manufacturer and marketer of prescription pharmaceuticals decided to raise the price of its anti-malaria drug from $15.00 per dose to $750.00 per dose, a price increase of 5,000%. Following a public outcry, the CEO was forced to resign, the company was forced to retract the price hike, and the company's stock price sharply declined. Which of the following has the company incurred?

visible and intangible costs

A multinational automobile manufacturer issues a public statement that the company's vehicle emissions tests had been falsified to meet environmental compliance standards over recent years using software specifically designed for that purpose. Following the news, the CEO is replaced, vehicle sales plummet, and the company's stock price sharply declines. Which of the following has the company incurred?

visible and intangible costs

Striving to be socially responsible entails touching such bases as

what, if any, actions to take to protect or enhance the environment (beyond what is legally required).

The school of ethical relativism holds that

when there are cross-country or cross-cultural differences in what is deemed ethical or unethical in business situations, it is appropriate for local moral standards to take precedence over what the ethical standards may be elsewhere.

A belief in ethical relativism leads to the conclusion that

whether the use of underage labor and the payment of bribes/kickbacks should be deemed ethical or unethical depends on the moral standards, values, and business norms that prevail in particular cultures, societies, countries, or circumstances.

Which of the following is not one of the most frequently used strategic approaches to building competitive advantage? A) Striving for a competitive edge based on bigger profit margins B) Developing expertise and resource strengths that give the company competitive capabilities that rivals can't easily imitate or trump with capabilities of their own C) Striving to be the industry's low-cost provider, thereby aiming for a cost-based competitive advantage over rivals D) Focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of serving the special needs and tastes of buyers comprising the niche E) Outcompeting rivals based on differentiating features

A) Striving for a competitive edge based on bigger profit margins

What is the foremost question in running a business enterprise? A) What must managers do, and do well, to make a company a winner in the marketplace? B) What can employees do, and do well, to ensure customer satisfaction? C) What can shareholders do, and do well, to ensure a profitable company? D) None of these. E) All of these.

A) What must managers do, and do well, to make a company a winner in the marketplace?

Changing circumstances and ongoing managerial efforts to improve the strategy A. account for why a company's strategy evolves over time. B. explain why a company's strategic vision undergoes almost constant change. C. make it very difficult for a company to have concrete strategic objectives. D. make it very hard to know what a company's strategy really is. E. All of the above.

A. account for why a company's strategy evolves over time.

Winning a competitive edge over competitors generally hinges on which of the following? A. Having a competitive product offering. B. Building valuable expertise and capabilities not readily matched and offering a distinctive product. C. Building experience, know-how, and specialized capabilities that have been perfected over a long period of time. D. Having "hard to beat" capabilities and impressive product innovation. E. All of these.

E. All of these.

What are the 3 Thought Processes for Ethical Standards?

1. The School of Ethical Universalism 2. The School of Ethical Relativism 3. Integrated Social Contracts Theory

The 10 Basic Tasks of the Strategy Execution Process

- Staff the organization with the right people for executing the strategy - Build the organizational capabilities required for successful strategy execution - Establish a strategy-supportive organization structure - Allocate sufficient resources to strategy execution effort - Institute policies and procedures that facilitate strategy execution - Adopt best practices and business processes that drive continuous improvement - Install information and operating systems that support strategy execution activities - Tie rewards and incentives directly to the achievement of strategic and financial targets. - Instill a corporate culture that promotes good strategy execution - Exercise strong leadership to propel strategy execution forward

Three types of paramount actions to build an Organization Capable of Proficient Strategy Execution

- Staffing the organization - Acquiring, developing, and strengthening key resources and capabilities - Structuring the organization and work effort

Develop capabilities internally (managerial actions to develop competencies and capabilities)

- Strengthen the firm's base of skills, knowledge, and intellect - Coordinate & integrate the efforts of work groups & departments

Symbolic culture-changing actions

- Top executives and upper management behaviors - Ceremonial events - Physical symbols like flyers or poster.

Application of Integrative social contracts theory

- Universal ethical principles take precedence over local norms - A local customs is not ethical if it violates universal ethical norms - Application of codes of ethics should first follow universal standards with allowance for local ethical diversity and influence

Examples of RELATIVISM issues

- Use of underage labor - Bribes and kickbacks - Relativism equates to multiple set of standards - Use of local morality to guide ethical behavior

Management by Walking Around (MBWA)

- Used by leaders to stay informed - Involves spending time with people, asking questions, listening to opinions and concerns, gathering firsthand information

Facilitating collaboration with external partners and strategic allies

- Using "relationship managers" to build and maintain cooperative arrangements of value both parties - Strategic alliances - Outsourcing arrangements - Joint ventures - Cooperative partnership

Costs incurred from ethical wrong doing

- Visible cost: Gov fines, lawsuits, cost to shareholders - Internal Administrative Costs: Legal and investigative costs, cost from remedial education, cost of corrective actions - Intangible or Less visible costs: Customer defections, loss of reputation, lost employee moral, high turnover, difficulty attracting talent, emp productivity, harsh government regulations

A company's culture is grounded and shaped by its:

- core values - ethical standards

Three approaches to building and strengthening capabilities

1- Develop capabilities internally 2- Acquire capabilities through mergers and acquisitions 3- Access capabilities via collaborative partnerships

What are the three types of costs companies incur when ethical wrongdoing is discovered?

1. Visible Costs 2. Internal Administrative Costs 3. Intangible or less Visible Costs

1) Founder or strong leader with strong values 2) Commitment by the firm to ethical behavior

2 key factors contribute to strong culture:

Which of the following statements regarding a company's CSR and sustainability strategies is FALSE?

A company is not demonstrating an adequate degree of social responsibility or endeavoring to be a model corporate citizen unless it spends 5 percent (or more) of pretax profits on social responsibility initiatives.

B (by the company's shared values, ingrained attitudes, core beliefs and company traditions that determine norms of behavior, accepted work practices of "how we do things around here," and styles of operating)

A company's corporate culture is BEST defined and identified by: a) the integration of the strategy and business model that a company has adopted. b) by the company's shared values, ingrained attitudes, core beliefs and company traditions that determine norms of behavior, accepted work practices of "how we do things around here," and styles of operating. c) its ingrained statement of core values and its internal code of ethics. d) its internal politics that influence the dedication to ethical conduct and accepted work practices. e) the formal traditions that company executives are committed to maintaining to ensure the company strategy-supportive culture is change resistant.

Core values and ethical standards

A company's culture is grounded in and shaped by its:

D (its core values and the bar it sets for ethical standards)

A company's culture is typically grounded in and shaped by: a) its core competencies and competitive capabilities. b) its long-term strategic success or lack thereof. c) the degree to which top management is committed to achieving market leadership. d) its core values and the bar it sets for ethical standards. e) its strategic intent and its reward system.

profitability and business performance

A culture that puts ___ ___ ___ ___ ahead of ethical behavior

Corporate Social Responsibility (CSR)

A firm's duty to operate in an honorable manner, provide good working conditions for employees, encourage workforce diversity, be a good steward of the environment, and actively work to better the quality of life in the local communities and society at large. Profit, People, Planet

Which of the following statements about a company's strategy is false? A) Normally, companies have a narrow window of strategic freedom in choosing the hows of strategy because all competitors are facing the same market conditions and competitive pressures and, therefore, have to cope with them using very similar strategies. B) A company's strategy results in achieving sustainable competitive advantage when an attractive number of buyers prefer its products or services over the offerings of competitors and when the basis for this preference is durable. C) A company's strategy is based partly on trial-and-error organizational learning about what has worked well and what hasn't. D) A company's strategy and strategic moves are only partly the result of proactive plotting and management design. E) A company's strategy is a work in progress, not a one-time management exercise.

A) Normally, companies have a narrow window of strategic freedom in choosing the hows of strategy because all competitors are facing the same market conditions and competitive pressures and, therefore, have to cope with them using very similar strategies.

Which of the following is NOT one of the basic reasons that a company's strategy evolves over time? A) The need on the part of company managers to initiate fresh strategic actions that boost employee commitment and create a results-oriented culture. B) The proactive efforts of company managers to fine-tune and improve one or more pieces of the strategy. C) An ongoing need to abandon those strategy features that are no longer working well D) The need to respond to the actions and competitive moves of rival firms. E) The need to keep strategy in step with changing market conditions and changing customer needs and expectations.

A) The need on the part of company managers to initiate fresh strategic actions that boost employee commitment and create a results-oriented culture.

Every strategy needs: A) a distinctive element that attracts customers and produces a competitive edge. B) to include similar characteristics to rival company strategies. C) to pursue conservative growth built on historical strengths. D) to employ diverse and sundry operating practices for producing greater control over sales growth targets. E) to mimic the plans of the industry's most successful companies.

A) a distinctive element that attracts customers and produces a competitive edge.

One of the frequently used successful and dependable strategic approaches is: A) to come up with a distinctive element that builds strong customer loyalty and yields a winning competitive edge. B) to aggressively pursue all of the growth opportunities the company can identify. C) to develop a product/service with more innovative performance features than what rivals are offering and to provide customers with better after-the-sale service. D) to come up with a business model that enables a company to earn bigger profits per unit sold than rivals. E) to charge a lower price than rivals and thereby win sales and market share away from rivals.

A) to come up with a distinctive element that builds strong customer loyalty and yields a winning competitive edge.

71. Changing a problem culture is A. never a short-term exercise. B. always a short-term exercise. C. requires a determined effort by a limited number of employees. D. usually easier than it is to instill a strategy-supportive culture from scratch. E. achieved by overnight transformations.

A. never a short-term exercise.

philanthropy (participate in community service, and better the quality of life worldwide)

Actions to support...

Which one of the following does not account for why a company's strategy evolves from one version to another? A. A desire on the part of company managers to develop new strategy elements on the fly B. The need to abandon some strategy elements that are no longer working well C. A need to respond to changing customer requirements and expectations D. A need to react to fresh strategic maneuvers on the part of rival firms E. The proactive efforts of company managers to improve this or that aspect of the strategy

A. A desire on the part of company managers to develop new strategy elements on the fly

43. Which one of the following statements about a high performance culture is true? A. Results-oriented, high performance cultures are permeated with a spirit of achievement and have a good track record in meeting or beating performance targets. B. High performance cultures often have a low regard for high ethical standards (because some disregard for ethics is a normal part of meeting or beating performance targets). C. The challenge in creating a high performance culture is to come up with a strategic vision and strategy that wins enthusiastic support from most all company personnel. D. In a high performance culture, the clear and unyielding expectation is that all company personnel will strictly follow company policies and procedures. E. In high performance cultures, there's strong managerial commitment to paying big bonuses and granting generous stock options.

A. Results-oriented, high performance cultures are permeated with a spirit of achievement and have a good track record in meeting or beating performance targets.

7. Which one of the following is something to look for in identifying a company's culture? A. The atmosphere, spirit and character that pervades the work climate and the values, business principles, and ethical standards that management preaches and practices. B. The track record in meeting or beating its financial and strategic performance targets. C. The intensity and make-up of the company's value chain. D. The strategic intent and competitive strategy inherent within the company's efforts for successful strategy execution. E. The resource strengths, core competencies, and competitive capabilities that permeate the organization.

A. The atmosphere, spirit and character that pervades the work climate and the values, business principles, and ethical standards that management preaches and practices.

80. Which of the following is NOT an example of leadership actions or managerial practices taken to foster a results-oriented, high-performance culture? A. Treating employees as individuals with no regard for their rank or contributions. B. Building morale and fostering pride. C. Setting stretch objectives and clearly communicating expectations for reaching targets. D. Using motivational techniques and compensation incentives to inspire employees. E. None of these.

A. Treating employees as individuals with no regard for their rank or contributions.

4. A company's culture is in part defined and identified by: A. a company's internal work climate and personality—as shaped by its shared values, work practices, traditions, and ingrained attitudes and behaviors that define "how we do things around here." B. whether it employs a low-cost provider, best-cost provider, differentiation or focused strategy. C. whether decision-making is centralized or decentralized and whether it is a single-business company or a diversified company. D. how strongly its strategic vision is linked to the company's core values. E. whether it is a well-known industry leader, an up-and-coming company that is gaining market share, a middle-of-the-pack company unlikely to move up in the industry ranks, or an industry also-ran that may or may not survive.

A. a company's internal work climate and personality—as shaped by its shared values, work practices, traditions, and ingrained attitudes and behaviors that define "how we do things around here."

The most important aspect(s) of a company's business strategy A. are the actions and moves in the marketplace that managers take to gain a sustainable competitive advantage. B. is figuring out how to maximize profits and shareholder value. C. concerns how to improve the efficiency of its business model. D. deals with how management plans to maximize profits while, at the same time, operating in a socially responsible manner. E. is figuring out how to become the industry's low-cost provider.

A. are the actions and moves in the marketplace that managers take to gain a sustainable competitive advantage.

33. A strongly implanted culture provides huge assist in executing strategy because company managers can use the tradition, beliefs, values, common bonds, or behavioral norms: A. as levers to mobilize commitment to executing the chosen strategy. B. as reinforcement for convincing staff that the strategy is sound and molded in tradition. C. to ensure the staff will embrace the new strategy like they have in the past. D. to manipulate jobholders into thinking traditions are important. E. All of these.

A. as levers to mobilize commitment to executing the chosen strategy.

Crafting a strategy involves A. blending deliberate/planned initiatives with emergent/unplanned reactive responses to changing circumstances, while abandoning planned strategy elements that have failed in the marketplace. B. developing a five-year strategic plan and then fine-tuning it during the remainder of the plan period. C. trying to imitate as much of the market leader's strategy as possible so as not to end up at a competitive disadvantage. D. doing everything possible (in the way of price, quality, service, warranties, advertising, and so on) to make sure the company's product/service is very clearly differentiated from the product/service offerings of rivals. E. All of these accurately characterize the managerial process of crafting a company's strategy.

A. blending deliberate/planned initiatives with emergent/unplanned reactive responses to changing circumstances, while abandoning planned strategy elements that have failed in the marketplace.

9. A company's values statement and code of ethics: A. helps to mold the culture and communicate what kinds of actions and behaviors are expected of all company personnel. B. helps prevent it from coming across to customers and the general public as greedy. C. serve the valuable purpose of making its suppliers hesitant to engage in business practices that are unethical. D. are the most important factors determining its reputation with customers, suppliers, employees, shareholders, and society at large. E. should always be made a prominent and visible part of the company's strategic intent and strategy.

A. helps to mold the culture and communicate what kinds of actions and behaviors are expected of all company personnel.

59. The place for management to begin in trying to change a problem culture is A. identifying facets of the present culture that are obstacles to executing the company's strategy and meeting performance targets. B. by spending heavily on programs to train employees in the ways and beliefs of the new culture to be implanted. C. to visibly praise and reward people who exhibit traits and behaviors that undermine the existing culture. D. writing a new values statement and describing in highly motivating terms the kind of culture that is needed. E. to institute incentive compensation programs that generously reward employees for adopting best practices.

A. identifying facets of the present culture that are obstacles to executing the company's strategy and meeting performance targets.

57. Changing a problem culture: A. is one of the toughest managerial tasks because of the heavy anchor of ingrained behaviors and ways of doing things. B. is best done by instituting an aggressive program to train employees in the ways and beliefs of the new culture to be implanted. C. is best done by selecting a team of key employees to lead the culture change effort. D. requires writing a new statement of core values, having a series of lengthy meetings with employees to explain the new culture and the reasons why cultural change is needed, and then having both employees and shareholders vote to ratify and adopt the new culture. E. can be done quickly only if managers tie incentive compensation to exhibiting the desired new cultural behaviors and if managers visibly praise people who exhibit the desired new cultural traits.

A. is one of the toughest managerial tasks because of the heavy anchor of ingrained behaviors and ways of doing things.

The elements of a company's business model are A. its customer value proposition as well as the company's profit formula. B. its business strategy, its collection of competitively valuable resources, and a strong management team. C. its deliberate strategy, its emergent strategy, and its realized strategy. D. its actions to capture emerging market opportunities and defend against threats to the company's business prospects, its actions to strengthen competitiveness via strategic alliances, and its actions to enter new geographic or product markets. E. management's answers to "Where are we now?" "Where do we want to go?" and "How are we going to get there?"

A. its customer value proposition as well as the company's profit formula.

69. The most important symbolic actions are those that top executives take to A. lead by example. B. lead by influence. C. follow by example. D. follow the majority. E. lead to the contrary.

A. lead by example.

23. Once established, company cultures can be perpetuated by: A. relying on word-of-mouth indoctrination and the power of tradition to instill the culture's fundamentals, as well as frequent reiteration of core values by senior managers and group members, and regular ceremonies honoring members who display desired cultural behaviors. B. avoiding frequent or dramatic reorganizations that could disturb existing relationships and networking among departments and company personnel. C. making adherence to cultural beliefs and cultural norms the defining features of the company's strategic vision. D. rewarding departments that observe cultural norms with above-average budget increases and penalizing those who don't with budget cuts. E. making cultural values and beliefs the centerpiece of the company's competitive strategy.

A. relying on word-of-mouth indoctrination and the power of tradition to instill the culture's fundamentals, as well as frequent reiteration of core values by senior managers and group members, and regular ceremonies honoring members who display desired cultural behaviors.

The competitive moves and business approaches a company's management is using to grow the business, compete successfully, attract and please customers, conduct operations, respond to changing economic and market conditions, and achieve organizational objectives is referred to as its A. strategy. B. mission statement. C. strategic intent. D. business model. E. strategic vision.

A. strategy.

A company's strategy is a "work in progress" and evolves over time because of A. the ongoing need of company managers to react and respond to changing industry and competitive conditions. B. the ongoing need to imitate the new strategic moves of the industry leaders. C. the need to make regular adjustments in the company's strategic vision. D. the importance of developing a fresh strategic plan every year. E. the frequent need to modify key elements of the company's business model.

A. the ongoing need of company managers to react and respond to changing industry and competitive conditions.

One of the keys to successful strategy-making is A. to come up with one or more strategy elements that act as a magnet to draw customers and yield a lasting competitive edge. B. to aggressively pursue all of the growth opportunities the company can identify. C. to develop a product/service with more innovative performance features than what rivals are offering and to provide customers with better after-the-sale service. D. to come up with a business model that enables a company to earn bigger profits per unit sold than rivals. E. to charge a lower price than rivals and thereby win sales and market share away from rivals.

A. to come up with one or more strategy elements that act as a magnet to draw customers and yield a lasting competitive edge.

27. In a strong culture company, A. values and behavioral norms are like crabgrass—deeply rooted and hard to weed out. B. there is wide support for high ethical standards among both managers and employees. C. a company has more strategy flexibility because it can change its strategy and be confident that the culture will welcome the strategy changes and be an ally in implementing whatever changes are called for. D. there is little room for employee empowerment, because independent-thinking empowered employees may well make decisions or engage in actions that weaken the culture. E. management insists that official policies and procedures be followed religiously.

A. values and behavioral norms are like crabgrass—deeply rooted and hard to weed out.

A company's business model A. zeros in on how and why the business will generate revenues sufficient to cover costs and produce attractive profits and return on investment. B.is management's storyline for how the strategy will result in achieving the targeted strategic objectives. C.details the ethical and socially responsible nature of the company's strategy. D.explains how it intends to achieve high profit margins. E.sets forth the actions and approaches that it will employ to achieve market leadership.

A. zeros in on how and why the business will generate revenues sufficient to cover costs and produce attractive profits and return on investment.

Which of the following is NOT part of the moral case for why a company should actively promote the betterment of society?

Acting in a socially responsible manner is in the best financial interest of shareholders.

Which of the following is FALSE as it concerns the merits of why acting in a socially responsible manner is good business?

Acting in a socially responsible manner nearly always results in higher profits and a higher stock price for shareholders.

well-being and make the company a great place to work

Actions to enhance employee...

operate honorably and ethically

Actions to ensure the company....

workforce diversity

Actions to promote...

and sustain the environment

Actions to protect...

Sustainable Business Practices

Are those practices of a firm that meet the needs of the present without compromising the ability to meet the needs of the future

Which of the following is NOT one of the managerial considerations in determining how to compete successfully? A) How can a company attract, keep, and please customers? B) How can the company modify its entire product line to emphasize their internal service attributes? C) How should the company respond to changing economic and market conditions? D) How should the company be competitive against rivals? E) How should the company position itself in the marketplace?

B) How can the company modify its entire product line to emphasize their internal service attributes?

Which one of the following is not related to actions and approaches that comprise a company's strategy? A) How to attract and please customers. B) How to prove to shareholders that the company's business model is viable C) How to compete against rivals. D) How to capitalize on attractive opportunities to grow the business. E) How to achieve the company's performance targets.

B) How to prove to shareholders that the company's business model is viable

Which of the following statements about a company's strategy is true? A) Crafting an excellent strategy is more important than executing it well. B) Managers at all companies face three central questions in thinking strategically about their company's present circumstances and prospects: What's the company's present situation? Where does the company need to go from here? How should it get there? C) A company's strategy deals with whether the revenue-cost-profit economics of its business model demonstrate the viability of the business enterprise as a whole. D) Masterful strategies come partly (maybe mostly) by doing things in much the same way as the industry leader but then being better than the leader in one particular area that counts heavily with buyers. E) Whether a company's strategy is ethical or not does not matter a lot because most customers and most suppliers are relatively unconcerned whether a company they do business with engages in sleazy practices or turns a blind eye to below-board behavior on the part of its employees.

B) Managers at all companies face three central questions in thinking strategically about their company's present circumstances and prospects: What's the company's present situation? Where does the company need to go from here? How should it get there?

A winning strategy must pass which three tests? A) The Dominant Market Test, the Sustainable Advantage Test, and the Profit Test B) The Fit Test, the Competitive Advantage Test, and the Performance Test C) The Sustainable Advantage Test, the Fit Test, and the Profit Test D) The Performance Test, the Dominant Market Test, and the Fit Test E) The Fit Test, the Sustainable Advantage Test, and the Dominant Market Test

B) The Fit Test, the Competitive Advantage Test, and the Performance Test

Which of the following statements about a company's strategy is true? A) Crafting an excellent strategy is more important than executing it well. B) The objective of a well-crafted strategy is not merely temporary competitive success and profits in the short run, but rather the sort of lasting success that can support growth and secure the company's future over the long C) A company's strategy deals with whether the revenue-cost-profit economics of its business model demonstrate the viability of the business enterprise as a whole. D) Masterful strategies come partly (maybe mostly) by doing things in much the same way as the industry leader but then being better than the leader in one particular area that counts heavily with buyers. E) Whether a company's strategy is ethical or not does not matter a lot because most customers and most suppliers are relatively unconcerned whether a company they do business with engages in sleazy practices or turns a blind eye to below-board behavior on the part of its employees.

B) The objective of a well-crafted strategy is not merely temporary competitive success and profits in the short run, but rather the sort of lasting success that can support growth and secure the company's future over the long

Management's blueprint for how and why the company's business approaches will generate revenues sufficient to cover costs and produce attractive profits and returns on investment: A) best describes what is meant by a company's strategy. B) best describes what is meant by a company's business model. C) accounts for why a company's financial objectives are at the stated level. D) portrays the essence of a company's business purpose or mission. E) is what is meant by the term strategic intent.

B) best describes what is meant by a company's business model.

Crafting and executing strategy are top-priority managerial tasks because: A) they are necessary ingredients of a sound business model. B) good strategy coupled with good strategy execution are the most telling signs of good management and greatly raises the chances that a company will be a standout performer in the marketplace. C) the management skills of top executives are sharpened as they work their way through the strategymaking, strategy-executing process. D) doing these tasks helps executives develop an appropriate strategic vision, strategic intent, and a set of strategic objectives. E) of the contribution they make to maximizing value for shareholders.

B) good strategy coupled with good strategy execution are the most telling signs of good management and greatly raises the chances that a company will be a standout performer in the marketplace.

A company's business model: A) concerns the actions and business approaches that will be used to grow the business, conduct operations, please customers, and compete successfully. B) is management's blueprint for how it will generate revenues sufficient to cover costs and yield an attractive profit. C) concerns what combination of moves in the marketplace it plans to make to outcompete rivals. D) deals with how it can simultaneously maximize profits and operate in a socially responsible manner that keeps its prices as low as possible. E) concerns how management plans to pursue strategic objectives, given the larger imperative of meeting or beating its financial performance targets.

B) is management's blueprint for how it will generate revenues sufficient to cover costs and yield an attractive profit.

A company's realized strategy evolves from one version to the next due to: A) changing management direction because of understanding several appealing strategy alternatives. B) the proactive efforts of company managers to improve the current strategy, a need to respond to changing customer requirements and expectations, and a need to react to fresh strategic maneuvers on the part of rival firms. C) ongoing turnover in the managerial and executive ranks (new managers often decide to shift to a different strategy). D) pressures from shareholders to boost profit margins and pay higher dividends. E) the importance of keeping the company's business model fresh and up-to-date.

B) the proactive efforts of company managers to improve the current strategy, a need to respond to changing customer requirements and expectations, and a need to react to fresh strategic maneuvers on the part of rival firms.

Which of the following is not an aspect of a company's strategy? A) Striving for a competitive edge over rivals B) How to achieve targeted objectives C) Making a profit D) How to respond to changing market conditions E) How to manage each functional piece of the business and develop needed organizational capabilities

C) Making a profit

42. Which one of the following statements about a high performance culture is false? A. Results-oriented, high performance cultures are permeated with a spirit of achievement and have a good track record in meeting or beating performance targets. B. High performance cultures often have a low regard for high ethical standards, a strong preference for high-risk strategies, and a slow and methodical approach to responding to changes in the marketplace. C. The challenge in creating a high performance culture is to inspire high loyalty and dedication on the part of employees, such that they are both energized and preoccupied with putting forth their very best efforts to do things right and be unusually productive. D. In a high performance culture, the clear and unyielding expectation is that all company personnel, from senior executives to front-line employees will display high performance behaviors and a passion for making the company successful. E. In high performance cultures, there's a strong sense of involvement on the part of company personnel and emphasis on individual initiative and creativity.

B. High performance cultures often have a low regard for high ethical standards, a strong preference for high-risk strategies, and a slow and methodical approach to responding to changes in the marketplace.

Which of the following is not something a company's strategy is concerned with? A. Management's choices about how to attract and please customers B. How quickly and closely to copy the strategies being used by successful rival companies C. Management's choices about how to grow the business D. Management's choices about how to compete successfully E. Management's action plan for conducting operations and improving the company's financial and market performance

B. How quickly and closely to copy the strategies being used by successful rival companies

19. Which of the following is NOT an integral part of transforming core values and ethical standards into cultural norms? A. Instituting procedures for enforcing ethical standards. B. Immediately dismissing any employee caught violating the company's code of ethics or disregarding core values. C. Screening out job applicants who do not exhibit compatible character traits. D. Periodically having ceremonial occasions to recognize individuals and groups who display the values and ethical principles. E. Having senior executives frequently reiterate the importance and role of company values and ethical principles at company events and internal communications to employees.

B. Immediately dismissing any employee caught violating the company's code of ethics or disregarding core values.

Which of the following is not something to look for in identifying a company's strategy? A. Actions to respond to changing market conditions or other external factors. B. Management actions to revise the company's financial and strategic performance targets. C. Actions to strengthen competitive capabilities and correct competitive weaknesses. D. Actions to capture emerging market opportunities and defend against external threats to the company's business prospects. E. Actions to gain sales and market share via lower prices, more performance features, more appealing design, or other such actions.

B. Management actions to revise the company's financial and strategic performance targets.

Which of the following is not something a company's strategy is concerned with? A. Management's choices about how to attract and please customers B. Management's choices about how quickly and closely to copy the strategies being used by successful rival companies C. Management's choices about how to grow the business D. Management's choices about how to outcompete rivals E. Management's action plan for conducting operations and improving the company's strategic and financial performance

B. Management's choices about how quickly and closely to copy the strategies being used by successful rival companies

65. Which one of the following is a substantive culture-changing action that a company's managers can undertake to alter a problem culture? A. Identifying aspects of the present culture that pose problems. B. Revising policies and procedures in ways that will help drive cultural change and replacing senior executives who are resisting and obstructing needed organizational and cultural changes. C. Empowering employees to adopt whatever new work practices they believe will be an improvement. D. Making a concerted effort to turn the company's core competencies into distinctive competencies. E. Shifting from decentralized to centralized decision-making so as to give senior executives more authority and control in driving cultural change.

B. Revising policies and procedures in ways that will help drive cultural change and replacing senior executives who are resisting and obstructing needed organizational and cultural changes.

6. Which one of the following is NOT something to look for in identifying a company's culture? A. The company's defined spirit and character that pervades the work climate. B. The company's resource strengths, core competencies, and competitive capabilities. C. The company's revered traditions and oft-repeated stories about "heroic acts" and "how we do things around here". D. The company's approach to people management and the official policies, procedures, and operating practices that paint the white lines for the behavior of company personnel. E. The company's shared values, business principles, and ethical standards that management preaches and practices.

B. The company's resource strengths, core competencies, and competitive capabilities.

Adapting to new conditions and constantly evaluating what is working and what needs to be improved are normal parts of the strategy-making process which result in: A) a profitability-driven strategy. B) a broad market entry strategy C) an evolving strategy. D) unlimited revenue generation. E) None of these.

C) an evolving strategy.

46. Which of the following statements about adaptive corporate cultures is false? A. The hallmark of adaptive corporate cultures is willingness on the part of organizational members to accept change and take on the challenge of introducing and executing new strategies. B. The standout cultural traits are a "can-do" spirit, pride in doing things right, no-excuses accountability, and a pervasive results-oriented work climate where people go the extra mile to meet or beat stretch objectives. C. Company personnel share a feeling of confidence that the organization can deal with whatever threats and opportunities come down the pike they are receptive to risk taking, experimentation, innovation, and changing strategies and practices. D. Adaptive cultures are exceptionally well-suited to companies with fast-changing strategies and market environments. E. For an adaptive culture to remain intact over time, top management must orchestrate organizational changes in a manner that (1) demonstrates genuine care for the well-being of all key constituencies and (2) tries to satisfy all their legitimate interests simultaneously.

B. The standout cultural traits are a "can-do" spirit, pride in doing things right, no-excuses accountability, and a pervasive results-oriented work climate where people go the extra mile to meet or beat stretch objectives.

Which of the following is not one of the central questions in evaluating a company's business prospects? A. What is the company's present situation? B. What are the key products or service attributes demanded by consumers? C. Where does the company need to go from here? D. How should it get there? E. All of these are pertinent in evaluating a company's business prospects.

B. What are the key products or service attributes

41. The hallmarks of a high performance corporate culture include: A. a deep commitment to employee training, and unusually attractive fringe benefit packages for company personnel and frequently revised and updated values and ethics statements,. B. a "can-do" spirit, pride in doing things right, no-excuses accountability, and a pervasive results-oriented work climate where people go the extra mile to meet or beat stretch objectives. C. a strong emphasis on teamwork, strict enforcement of company policies and procedures, and incentive compensation for all employees aligned with a balanced scorecard approach to measuring performance,. D. a deep commitment to pioneering new best practices, a preference for being a fast-follower as opposed to a first-mover or late-mover, and across-the-board bonuses for all personnel when the company meets or beats stretch objectives. E. a deep commitment to top-notch quality and superior customer service, dedicated use of TQM and/or Six Sigma quality control programs, and the payment of big performance bonuses and stock options.

B. a "can-do" spirit, pride in doing things right, no-excuses accountability, and a pervasive results-oriented work climate where people go the extra mile to meet or beat stretch objectives.

51. Companies with change-resistant cultures A. are typically opposed to performance-based incentive compensation and employee empowerment. B. are prone to be preoccupied with avoiding risks, are unlikely to pursue actions to capture emerging opportunities, are frequently lax when it comes to product innovation and continuous improvement in performing value chain activities, and prefer following rather than leading market change. C. are often overly gung-ho about looking outside the company for best practices, new managerial approaches, and innovative ideas. D. tend to be preoccupied with making sure the company has a safe, follow-the-industry-leader type of strategic vision and avoids risky business strategies. E. are typically run by amoral managers who have little regard for high ethical standards.

B. are prone to be preoccupied with avoiding risks, are unlikely to pursue actions to capture emerging opportunities, are frequently lax when it comes to product innovation and continuous improvement in performing value chain activities, and prefer following rather than leading market change.

72. Leading the drive for good strategy execution and operating excellence calls upon senior executives to A. be very personable, an effective communicator, and skilled in the empowerment of company personnel. B. be out front personally leading the implementation process and driving the pace of progress. C. delegate little to subordinates and, instead, personally exert a strong, highly visible influence on the company's approaches to strategy execution. D. be creative in establishing policies and procedures that will instill high standards of operating excellence. E. be charismatic, a decisive decision-maker, and make inspiring speeches at company events.

B. be out front personally leading the implementation process and driving the pace of progress.

1. A company's corporate culture is BEST defined and identified by: A. the integration of the strategy and business model that a company has adopted. B. by the company's shared values, ingrained attitudes, core beliefs and company traditions that determine norms of behavior, accepted work practices of "how we do things around here," and styles of operating. C. its ingrained statement of core values and its internal code of ethics. D. its internal politics that influence the dedication to ethical conduct and accepted work practices. E. the formal traditions that company executives are committed to maintaining to ensure the company strategy-supportive culture is change resistant.

B. by the company's shared values, ingrained attitudes, core beliefs and company traditions that determine norms of behavior, accepted work practices of "how we do things around here," and styles of operating.

58. The single most visible factor that distinguishes successful culture-change efforts from failed attempts is A. forceful management actions to empower employees to adopt new operating practices. B. competent leadership at the top. C. de-layering the management hierarchy. D. developing a new values statement that inspires company personnel to put forth their best efforts to achieve performance targets. E. convincing employees that top management is genuinely committed to high ethical standards and the exercise of corporate social responsibility.

B. competent leadership at the top.

61. When trying to change a problem culture, management should undertake such steps as A. selecting a team of key employees to lead the culture change effort and design a plan for cultural change. B. identifying facets of the present culture that are supportive of good strategy execution and which ones are not and then specifying what new actions, behaviors, and work practices are needed in the new culture to improve performance. C. drawing up an action plan to change the present culture and then persuading company personnel why this plan of action is good and will be successful. D. conducting an employee survey to determine the organization's cultural norms and what company personnel like and dislike about the current culture. E. employing a consultant with expertise in culture change and following his/her advice on how to proceed.

B. identifying facets of the present culture that are supportive of good strategy execution and which ones are not and then specifying what new actions, behaviors, and work practices are needed in the new culture to improve performance.

37. A work environment where the culture is in sync with the chosen strategy and is conducive to good strategy execution it is considered a valuable managerial ally because: A. there is much less risk of embarrassing ethical violations. B. it provides company personnel with clear guidance regarding "how we do things around here and produces significant peer pressures from co-workers to conform to culturally acceptable norms". C. there is reduced need to incorporate negative motivational practices and punitive-type incentives into the reward structure and in the company's approach to people management. D. there is reduced need to employ benchmarking, best practice programs, reengineering, Six Sigma, and TQM to achieve competitive advantage. E. the culture can be readily incorporated into the company's strategic vision and facilitate the achievement of stretch objectives.

B. it provides company personnel with clear guidance regarding "how we do things around here and produces significant peer pressures from co-workers to conform to culturally acceptable norms".

A company's strategy evolves from one version to the next because of A. changing management conclusions about which of several appealing strategy alternatives is actually best. B. management's ongoing efforts to fine-tune the strategy and to adjust certain strategy elements in response to new learning and unfolding events. C. ongoing turnover in the managerial and executive ranks (new managers often decide to shift to a different strategy). D. pressures from shareholders to boost profit margins and pay higher dividends. E. the importance of keeping the company's business model fresh and up-to-date.

B. management's ongoing efforts to fine-tune the strategy and to adjust certain strategy elements in response to new learning and unfolding events.

60. Companies, especially ones with multinational operations and/or newly acquired businesses, typically have A. strong cultures B. multiple cultures (or subcultures) rather than a single culture. C. weak cultures. D. adaptive cultures. E. low performance cultures.

B. multiple cultures (or subcultures) rather than a single culture.

13. Codes of ethics and statements of core values: A. are the single most effective measure of enforcing ethical behavior and cultural norms, provided they are written down and every employee is given a copy. B. serve as yardsticks for gauging the appropriateness of particular actions, decisions and behaviors. C. serve as the best benchmarks for judging whether the corporate culture is deeply ingrained, planted and accepted or not. D. need to be personally written and presented by the CEO to reinforce the company values and convictions so that employees will take it seriously. E. serve to give top priority emphasis to every employee in training program a company conducts.

B. serve as yardsticks for gauging the appropriateness of particular actions, decisions and behaviors.

22. Frequently, a significant part of a company's culture is captured in: A. the company's strategic vision and strategic intent. B. the stories that get told over and over again to illustrate the importance of certain values and the depth of commitment that various company personnel have displayed. C. how much stretch is built into the company's financial and strategic performance targets. D. the vigor and enthusiasm with which it engages in benchmarking and seeks out best practices. E. the company's track record in taking market share away from rivals.

B. the stories that get told over and over again to illustrate the importance of certain values and the depth of commitment that various company personnel have displayed.

18. To deeply ingrain core values and ethical standards, a company must: A. provide every employee with a copy of the company's statement of core values and code of ethics. B. turn the espoused core values and ethical standards into strictly enforced cultural norms. C. encourage company personnel to observe the core values and ethical standards. D. give big pay raises and bonuses to individuals and groups who display the company's core values and observe its ethical standards. E. fire employees who do not live up to the core values or who are found guilty of violating the code of ethics.

B. turn the espoused core values and ethical standards into strictly enforced cultural norms.

According to the moral case, why should company strategies be ethical?

Because a strategy that is unethical is morally wrong and reflects badly on the character of the firm's personnel.

According to the business case, why should company strategies be ethical?

Because an ethical strategy can be both good business and serve the self-interest of shareholders.

C (the application of general ethical principles to the actions and decisions of companies and the conduct of their personnel.)

Business ethics concerns: a) developing a consensus among companies worldwide as to what ethical principles businesses should be expected to observe in the course of conducting their operations. b) what ethical behaviors should be expected of company personnel in the course of doing their jobs. c) the application of general ethical principles to the actions and decisions of companies and the conduct of their personnel. d) developing a special set of ethical standards for businesses to observe in conducting their affairs. e) picking and choosing among the consensus ethical standards of society to arrive at a set of ethical standards that apply directly to operating a business.

Crafting a deliberate strategy involves developing strategy elements that: A) imitate as much of the market leader's strategy as possible so as not to end up at a competitive disadvantage. B) comprise a five-year strategic plan and then fine-tuning it during the remainder of the plan period; big changes in strategy are thus made only once every five years. C) consist of a blend of proactive new planned initiatives plus ongoing strategy elements continued from prior periods. D) doing everything possible (in the way of price, quality, service, warranties, advertising, and so on) to make sure the company's product/service is very clearly differentiated from the product/service offerings of rivals. E) All of these accurately characterize the managerial process of crafting a company's strategy.

C) consist of a blend of proactive new planned initiatives plus ongoing strategy elements continued from prior periods.

The most telling signs of a well-managed company are: A) the eagerness with which executives set stretch financial and strategic objectives and develop an ambitious strategic vision. B) aggressive pursuit of new opportunities and a willingness to change the company's business model whenever circumstances warrant. C) good strategy-making combined with good strategy execution. D) a visionary mission statement and a willingness to pursue offensive strategies rather than defensive strategies. E) a profitable business model and a balanced scorecard approach to measuring the company's performance.

C) good strategy-making combined with good strategy execution.

A creative distinctive strategy that sets a company apart from rivals and that gives it a sustainable competitive advantage: A) is a reliable indicator that the company has a profitable business model. B) is every company's strategic vision. C) is a company's most reliable ticket to above-average profitability and a competitive advantage, despite the best efforts of competitors to match or surpass this advantage. D) signals that the company has a bold, ambitious strategic intent that places the achievement of strategic objectives ahead of the achievement of financial objectives. E) is the best indicator that the company's strategy and business model are well-matched and properly synchronized.

C) is a company's most reliable ticket to above-average profitability and a competitive advantage, despite the best efforts of competitors to match or surpass this advantage.

A company's business model A) determines whether its strategy will be ethical or not and meet government regulations. B) is management's storyline for how the strategy will result in achieving sustainable competitive advantage and delivering superior customer satisfaction over the long-term. C) is management's blueprint for delivering a valuable product or service to customers in a manner that will generate revenues sufficient to cover costs and yield an attractive profit D) identifies how the company plans to outmaneuver and outcompete key rivals and become a market leader. E) sets forth the actions and approaches that it will rely on to earn the best profit margins in the industry.

C) is management's blueprint for delivering a valuable product or service to customers in a manner that will generate revenues sufficient to cover costs and yield an attractive profit

Crafting and executing strategy are top-priority managerial tasks because: A) it helps management create tight fits between a company's strategic vision and business model. B) it allows all company personnel, and especially senior executives, to know the answer to "who are we, what do we do, and where are we headed?" C) it is management's prescription for doing business, its roadmap to competitive advantage, a game plan for pleasing customers, and its formula for improving performance. D) it provides clear guidance as to what the company's business model and strategic intent are, and helps keep managerial decision-making from being rudderless. E) it establishes how well executives perform these tasks and are the key determinants of executive compensation.

C) it is management's prescription for doing business, its roadmap to competitive advantage, a game plan for pleasing customers, and its formula for improving performance.

A company's strategies stand a better chance of succeeding when: A) it is developed through a collaborative process involving all managers and staff from all levels of the organization. B) managers employ conservative strategic moves based on past experience and form an underlying basis of control. C) it is predicated on competitive moves aimed at appealing to buyers in ways that set the company apart from rivals. D) managers copy the strategic moves of successful companies in its industry. E) managers focus on meeting or beating shareholder expectations.

C) it is predicated on competitive moves aimed at appealing to buyers in ways that set the company apart from rivals.

Company strategies evolve because A) it is a bad idea to do too much strategizing until a company has been in business long enough to know what strategies will work best. B) most managers like to develop the strategy in bits and pieces rather than all at once. C) of changing circumstances and ongoing management efforts to improve the strategy D) many managers are conservative, preferring to carefully contemplate the best responses to new developments and avoiding the risks associated with developing a complete strategy too quickly. E) a strategy does not really transition to a well-crafted stage until a company has been trying to execute it for a number of years and has learned what works and what doesn't.

C) of changing circumstances and ongoing management efforts to improve the strategy

The heart and soul of any strategy is A) to identify actions and operating approaches that will validate the company's business model work. B) to identify business approaches that will produce good bottom-line results. C) the actions and moves in the marketplace that managers are taking to improve the company's financial performance, strengthen its long-term competitive position, and gain a competitive edge over rivals. D) the actions a company takes to steal substantial sales and market share away from rivals. E) pursuing competitive maneuvers that will make the company a market leader.

C) the actions and moves in the marketplace that managers are taking to improve the company's financial performance, strengthen its long-term competitive

The nitty-gritty issue surrounding a company's business model is whether A) the strategy is capable of producing sustainable competitive advantage. B) it matches the company's external and internal situation. C) the chosen strategy makes good business sense from a money-making perspective. D) the company's strategy and strategic moves are mostly proactive. E) the company's strategy stands a really good chance of hitting a home-run in the marketplace.

C) the chosen strategy makes good business sense from a money-making perspective.

44. What is the hallmark of an adaptive corporate culture? A. A shared willingness to adapt core values to fit the changing requirements of an evolving strategy. B. A conservative strategy, prudent risk-taking, and strong peer pressures to observe cultural norms. C. A clear willingness on the part of organizational members to accept change and take on the challenge of introducing and executing new strategies. D. A commitment to the types of core values and ethical standards that make a company a great place to work. E. A strong preference for performance-based compensation systems—especially the payment of bonuses and stock options.

C. A clear willingness on the part of organizational members to accept change and take on the challenge of introducing and executing new strategies.

25. Which one of the following statements about a company's culture is false? A. The more new employees a company is hiring the more important it becomes to screen job applicants every bit as much for how well their values, beliefs, and personalities match up with the culture as for their technical skills and experience. B. The longer people stay at an organization, the more that they come to embrace and mirror the corporate culture—their values and beliefs tend to be molded by mentors, fellow workers, company training programs, and the reward structure. C. A company's culture, once established, tends to remain stable and entrenched over time. D. Typically, key elements of the culture originate with a founder or certain strong leaders who articulated them as a set of business principles, company policies, operating approaches, and ways of dealing with employees, customers, vendors, shareholders, and local communities where the company has operations. E. Company cultures can be perpetuated by the telling and retelling of company legends, by regular ceremonies honoring members who display desired cultural behaviors, and by visibly rewarding those who display cultural norms and penalizing those who don't.

C. A company's culture, once established, tends to remain stable and entrenched over time.

35. Which one of the following is Not a typical characteristic of a weak company culture? A. A lack of values and principles that are consistently preached or widely shared. B. A tendency among employees to view their jobs as a just a way of making a living. C. A complicated value chain and a very diverse set of core competencies—both of which act to create multiple subcultures. D. Few widely-revered traditions and few culture-induced norms. E. No strong employee allegiance to what the company stands for or to operating the business in well-defined ways.

C. A complicated value chain and a very diverse set of core competencies—both of which act to create multiple subcultures.

29. Which of the following contribute to the emergence and sustainability of a strong culture? A. Senior executives that walk the talk of high ethical standards. B. A strong emphasis on developing innovative core competencies and competitive capabilities. C. A sincere, long-standing company commitment to operating the business according to established traditions, thereby creating an internal environment that supports decision making and strategies based on cultural norms. D. Centralized decision-making and strict enforcement of company policies. E. A longstanding commitment to strict enforcement of established policies and procedures and steadfast unwillingness to change these policies and procedures.

C. A sincere, long-standing company commitment to operating the business according to established traditions, thereby creating an internal environment that supports decision making and strategies based on cultural norms.

38. Which of the following is a benefit of closely aligning the corporate culture with the requirements for proficient strategy execution? A. A good strategy-culture alignment makes it possible to establish a much bolder strategic vision and strategic intent. B. A good strategy-culture alignment enhances a company's cost competitiveness. C. A tight strategy-culture fit steers company personnel into displaying behaviors and adopting operating practices that promote good strategy execution. D. A tight strategy-culture alignment enhances the creation of core competencies and distinctive competencies. E. A tight strategy-culture alignment makes it easier to change a company's culture over time—as a company's strategy evolves, the culture automatically evolves also.

C. A tight strategy-culture fit steers company personnel into displaying behaviors and adopting operating practices that promote good strategy execution.

63. Which one of the following is not an appropriate step management can take to change a problem culture? A. Identifying which aspects of the present culture are supportive of good strategy execution and which ones are not B. Specifying what new actions, behaviors, and work practices should be prominent in the "new" culture C. Appointing a team of key managers and employees to design a plan for cultural change and then lead the internal effort to change the culture D. Talking openly about the problems of the present culture and how new behaviors will improve performance E. Employing visible, forceful actions—both substantive and symbolic—to ingrain a new set of behaviors, practices and cultural norms

C. Appointing a team of key managers and employees to design a plan for cultural change and then lead the internal effort to change the culture

68. Which one of the following is NOT likely to be an effective management action (making a compelling case to employees) about culture-remodeling efforts that can create a better strategy-culture fit? A. Citing reasons why and how certain behavioral norms and work practices in the current culture pose obstacles to good execution of new strategic initiatives B. Explaining how new behaviors and work practices that are to be introduced and have important roles in the new culture will be more advantageous and produce better results C. Calling upon first-level supervisors and rank-and-file employees to identify cultural barriers to good strategy execution and then lead the cultural change effort D. Granting pay raises to individuals who step out front, lead the adoption of the desired work practices, display the new-style behaviors, and achieve pace-setting results E. Revising policies and procedures in ways that will help drive cultural change

C. Calling upon first-level supervisors and rank-and-file employees to identify cultural barriers to good strategy execution and then lead the cultural change effort

Managers in all types of businesses must address the central strategic question A. Where are we now? B. Where do we want to go from here? C. How are we going to get there? D. When will we know we are there? E. All of these

C. How are we going to get there?

14. Which of the following topics would least likely be contained in a company's statement of its core values? A. A commitment to having fun and creating a fun work environment. B. A commitment to operating excellence and superior results. C. Mandating full compliance with all laws and regulations. D. Exhibiting such qualities as integrity, fairness, trustworthiness, pride of workmanship, Golden Rule behavior, respect for co-workers, and ethical behavior. E. Exhibiting teamwork and cooperative attitudes.

C. Mandating full compliance with all laws and regulations.

Which of the following is not a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage? A. Aiming for a cost-based competitive advantage B. Outcompeting rivals on the basis of such differentiating features as higher quality, wider product selection, added performance, better service, or more attractive styling C. Striving to be more profitable than rivals by aiming for a competitive edge based on bigger profit margins D. Focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of satisfying the needs and tastes of buyers comprising the niche E. Developing expertise and resources that give the company competitive capabilities that rivals can't easily imitate or trump with capabilities of their own

C. Striving to be more profitable than rivals by aiming for a competitive edge based on bigger profit margins

Which of the following is not one of the basic reasons that a company's strategy evolves over time? A. An ongoing need to abandon those strategy features that are no longer working well B. The proactive efforts of company managers to improve the company's financial performance and secure a competitive advantage C. The need on the part of company managers to make regular adjustments in the company's business model D. The need to respond to the actions and competitive moves of rival firms E. The need to keep strategy in step with changing industry and competitive conditions

C. The need on the part of company managers to make regular adjustments in the company's business model

36. Which one of the following statements about a weak company culture is true? A. In a weak culture company, there is virtually no employee support for the company's strategic vision and strategy. B. Weak culture companies do not usually have a code of ethics and have little regard for high ethical standards. C. Weak cultures provide little assistance in executing strategy because there are no traditions, values, or behavioral norms that management can use as levers to mobilize commitment to executing the chosen strategy. D. Weak culture companies are fairly receptive to change and to people who champion new ways of doing things. E. In a weak culture company, there is usually little teamwork, a dearth of intellectual capital, and inattention to building core competencies.

C. Weak cultures provide little assistance in executing strategy because there are no traditions, values, or behavioral norms that management can use as levers to mobilize commitment to executing the chosen strategy.

48. Unhealthy company cultures typically have such characteristics as: A. tight budget controls, overly strict enforcement of longstanding policies and procedures, and low ethical standards. B. a preference for conservative strategies, an aversion to incentive compensation, and excessive emphasis on profitability. C. a politicized internal environment, hostility to change and an aversion to looking outside the company for best practices, new managerial approaches, and innovative ideas. D. overemphasis on employee empowerment, a complacent approach to building competencies and capabilities, no coherent business philosophy, and excessively bureaucratic policies and procedures. E. too little emphasis on innovation, a strong preference for hiring managers from outside the company, very few core values and traditions, and a weakly enforced code of ethics.

C. a politicized internal environment, hostility to change and an aversion to looking outside the company for best practices, new managerial approaches, and innovative ideas.

81. The task of top executives in making corrective adjustments includes A. knowing when to continue with the present corporate culture and when to shift to a different and better corporate culture. B. being good at figuring out whether to arrive at decisions quickly or slowly in choosing among the various alternative adjustments. C. a thorough analysis of the situation and exercising good business judgment in deciding what actions to take. D. deciding whether to try to fix the problems of poor strategy execution or simply shift to a strategy that is easier to execute correctly. E. deciding how to identify the problems that need fixing.

C. a thorough analysis of the situation and exercising good business judgment in deciding what actions to take.

67. Changing a problem culture to create better alignment with strategy generally does not involve A. replacing old-culture managers with new-breed managers. B. designing compensation incentives that boost the pay of teams and individuals who display the desired cultural behaviors and hit change-resisters in the pocketbook. C. altering the company's strategic vision and/or its strategic and financial objectives. D. using company gatherings and ceremonial occasions to praise individuals and groups that display the desired new cultural traits and behaviors. E. both symbolic and substantive actions by executives to implant new cultural behaviors.

C. altering the company's strategic vision and/or its strategic and financial objectives.

A company's business model A. details the manner in which the company will pass the three tests of a winning strategy. B. indicates how the strategy will result in achieving the targeted strategic objectives. C. clarifies (1) how the business will provide customers with value, and (2) why the business will generate revenues sufficient to cover costs and produce attractive profits. D. explains how it intends to achieve high profit margins. E. sets forth the actions and approaches that it will employ to achieve market leadership.

C. clarifies (1) how the business will provide customers with value, and (2) why the business will generate revenues sufficient to cover costs and produce attractive profits.

A company's strategy and its quest for competitive advantage are tightly connected because A. without a competitive advantage a company cannot become the industry leader. B. without a competitive advantage a company cannot have a profitable business model. C. crafting a strategy that yields a competitive advantage over rivals is a company's most reliable means of achieving above-average profitability and financial performance. D. a competitive advantage is what enables a company to achieve its strategic objectives. E. how a company goes about trying to please customers and outcompete rivals is what enables senior managers choose an appropriate strategic vision for the company.

C. crafting a strategy that yields a competitive advantage over rivals is a company's most reliable means of achieving above-average profitability and financial performance.

A creative, distinctive strategy that sets a company apart from rivals and that gives it a sustainable competitive advantage A. is a reliable indicator that the company has a profitable business model. B. is every company's strategic vision. C. is a company's most reliable ticket to above-average profitability—indeed, the tight connection between competitive advantage and profitability means that the quest for sustainable competitive advantage always ranks center stage in crafting a strategy. D. signals that the company has a bold, ambitious strategic intent that places the achievement of strategic objectives ahead of the achievement of financial objectives. E. is the best indicator that the company's strategy and business model are well-matched and properly synchronized.

C. is a company's most reliable ticket to above-average profitability—indeed, the tight connection between competitive advantage and profitability means that the quest for sustainable competitive advantage always ranks center stage in crafting a strategy.

A company's strategy stands a better chance of succeeding when A. it is developed through a collaborative process involving managers from all levels of the organization. B. managers employ conservative strategic moves. C. it is predicated on competitive moves aimed at appealing to buyers in ways that set the company apart from rivals. D. managers copy the strategic moves of successful companies in its industry. E. managers focus on meeting or beating shareholder expectations.

C. it is predicated on competitive moves aimed at appealing to buyers in ways that set the company apart from rivals.

Which of the following is a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage? A) Striving to be the industry's low-cost provider, thereby aiming for a product-based competitive advantage B) Outcompeting rivals on the basis of such differentiating features as same quality, narrower product selection, or same value for the money C) Developing a best-cost provider strategy that gives the company competitive capabilities so that rivals can easily imitate with capabilities of their own to even the playing field D) Focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of serving the special needs and tastes of buyers comprising the niche E) All of these.

D) Focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of serving the special needs and tastes of buyers comprising the niche

Which of the following questions tests the merits of the firm's strategy and distinguishes it as a winning strategy? A) Is the company's strategy ethical and socially responsible and does it put enough emphasis on good product quality and good customer service? B) Is the company putting too little emphasis on growth and profitability and too much emphasis on behaving in an ethical and socially responsible manner? C) Is the strategy resulting in the development of additional competitive capabilities? D) Is the strategy helping the company achieve a sustainable competitive advantage and is it resulting in better company performance? E) Does the strategy strike a good balance between maximizing shareholder wealth and maximizing customer satisfaction?

D) Is the strategy helping the company achieve a sustainable competitive advantage and is it resulting in better company performance?

Which one of the following is not something to look for in trying to identify and understand what a company's strategy is? A) Actions to strengthen the firm's bargaining position with suppliers, distributors, and others. B) Actions to gain sales and market share via more performance features, more appealing design, better quality or customer service, wider product selection, or other such actions. C) Actions to gain sales and market share with lower prices based on lower costs. D) Its actions to revise the company's strategic vision and business model E) Actions to enter new product or geographic markets or to exit existing ones

D) Its actions to revise the company's strategic vision and business model

Which one of the following is not something to look for in identifying a company's strategy? A) Its actions to enter new geographic or product markets or exit existing ones and its actions to form strategic alliances and collaborative partnerships B) Its actions to merge with or acquire another company in order to strengthen the company's business position C) Its actions to capture emerging market opportunities and defend against external threats to the company's business prospects D) The company's actions to validate and improve upon its business model E) The actions and approaches that define how a company manages such functions as R&D, production, sales and marketing, and finance

D) The company's actions to validate and improve upon its business model

It is normal for a company's strategy to end up being A) little different from management's original planned set of actions and business approaches since making on-the-spot changes is too risky. B) a combination of defensive moves to protect the company's market share and offensive initiatives to set the company's product offering apart from rivals. C) pretty much like the strategies of other industry members since all companies are confronting much the same market conditions and competitive pressures. D) a blend of proactive actions to improve the company's competitiveness and financial performance and as-needed reactions to unanticipated developments and fresh market conditions. E) a mirror image of its business model, so as to avoid impairing company profitability.

D) a blend of proactive actions to improve the company's competitiveness and financial performance and as-needed reactions to unanticipated developments and fresh market conditions.

In crafting a company's strategy: A) management's biggest challenge is how closely to mimic the strategies of successful companies in the industry. B) managers have comparatively little freedom in choosing the "hows" of strategy. C) managers are wise not to decide on concrete courses of action in order to preserve maximum strategic flexibility. D) managers need to come up with a sustainable competitive advantage that draws in customers and produces a competitive edge over rivals. E) managers are well-advised to be risk-averse and develop a "conservative" strategy—"dare-to-bedifferent" strategies rarely are successful.

D) managers need to come up with a sustainable competitive advantage that draws in customers and produces a competitive edge over rivals.

The customer value proposition lays out the company's approach to: A) meeting profitability guidelines without the risk of losing customers. B) operating efficiently given the current level of customers. C) embracing rival company approaches to gaining customers. D) satisfying buyer wants and needs at a price customers will consider a good value. E) None of the above.

D) satisfying buyer wants and needs at a price customers will consider a good value.

A company's business model: A) sets forth management's game plan for maximizing profits for shareholders. B) details exactly how management's strategy will result in the achievement of the company's strategic intent. C) explains how it will achieve high profit margins while at the same time charging relatively low prices to customers. D) sets forth the key components of the enterprise's business approach, indicates how revenues will be generated, and makes a case for why the strategy can deliver value to customers in a profitable manner. E) sets forth management's long-term action plan for achieving market leadership.

D) sets forth the key components of the enterprise's business approach, indicates how revenues will be generated, and makes a case for why the strategy can deliver value to customers in a profitable manner.

A company's strategy is a "work in progress" and evolves over time because of: A) the importance of developing a fresh strategic plan every year (which also has the benefit of keeping employees from becoming bored with executing the same strategy year after year). B) the ongoing need to imitate the new strategic moves of the industry leaders. C) the need to make regular adjustments in the company's strategic vision. D) the ongoing need of company managers to react and respond to changing market and competitive conditions. E) the frequent need to modify key elements of the company's business model.

D) the ongoing need of company managers to react and respond to changing market and competitive conditions.

Which of the following statements about a company's realized strategy is true? A. A company's realized strategy is mostly hidden to outside view and is deliberately kept under wraps by top-level managers. B. A company's realized strategy is typically planned well in advance and usually deviates little from the planned set of actions. C. A company's realized strategy generally changes very little over time unless a newly appointed CEO decides to take the company in a new direction with a new strategy. D. A company's realized strategy is typically a blend of deliberate/planned initiatives and emergent/unplanned reactive strategy elements. E. A company's realized strategy is developed mostly on the fly because of the constant efforts of managers to keep rival companies at a disadvantage.

D. A company's realized strategy is typically a blend of deliberate/planned initiatives and emergent/unplanned reactive strategy elements.

Which of the following statements about a company's strategy is true? A. A company's strategy is mostly hidden to outside view and is deliberately kept under wraps by top-level managers (so as to catch rival companies by surprise when the strategy is launched). B. A company's strategy is typically planned well in advance and usually deviates little from the planned set of actions and business approaches because of the risks of making on-the-spot changes. C. A company's strategy generally changes very little over time unless a newly-appointed CEO decides to take the company in a new direction with a new strategy. D. A company's strategy is typically a blend of proactive and reactive strategy elements. E. A company's strategy is developed mostly on the fly because of the constant efforts of managers to come up with fresh moves to keep the company's product offering clearly different and set apart from the product offerings of rival companies.

D. A company's strategy is typically a blend of proactive and reactive strategy elements.

34. Which one of the following is a typical characteristic of a weak company culture? A. Very little cultural support for the company's strategic vision and strategy. B. No code of ethics and deep hostility to change and to people who champion new ways of doing things. C. A complicated value chain that acts to create multiple subcultures. D. A lack of values and principles that are consistently preached or widely shared. E. No strong sense of teamwork.

D. A lack of values and principles that are consistently preached or widely shared.

39. Which of the following statements about the match between a company's culture and its strategy is false? A. When a company's present work climate promotes attitudes and behaviors that are well suited to first-rate strategy execution, its culture functions as a valuable ally in the strategy execution process. B. A deeply embedded culture tightly matched to the strategy aids the cause of competent strategy execution by steering company personnel to culturally-approved behaviors and work practices and thus making it far simpler to root out operating practices that are a misfit. C. It is in management's best interest to dedicate considerable effort to embedding a corporate culture that encourages behaviors and work practices conducive to good strategy execution. D. A tight strategy-culture alignment facilitates building core competencies and distinctive competencies that lead to low operating costs and a cost-based competitive advantage. E. When a company's culture is grounded in many of the needed strategy-executing behaviors, employees feel genuinely better about their jobs and what the company is trying to accomplish as a consequence, greater numbers of company personnel exert their best efforts to execute the strategy and achieve performance targets.

D. A tight strategy-culture alignment facilitates building core competencies and distinctive competencies that lead to low operating costs and a cost-based competitive advantage.

83. Which of the following is the best test of good strategic leadership? A. Whether the company has a good strategy and business model. B. Whether the enterprise is meeting or beating its performance targets. C. Whether the strategy is being completely executed. D. All of these. E. None of these.

D. All of these.

47. Which of the following is NOT a common trait of an unhealthy company culture? A. A politicized internal environment and empire-building managers who jealously guard their turf. B. Hostility to change and a wariness of people who champion new ways of doing things. C. An aversion to looking outside the company for best practices, new managerial approaches, and innovative ideas. D. An aversion to incentive compensation, failure to recruit the best and brightest employees, subpar support for employee training, overemphasis on working in teams, and low ethical standards. E. Overzealous pursuit of wealth and status on the part of key executives.

D. An aversion to incentive compensation, failure to recruit the best and brightest employees, subpar support for employee training, overemphasis on working in teams, and low ethical standards.

A company's realized strategy is made up of A. deliberate/planned initiatives that have proven themselves in the marketplace and newly launched initiatives aimed at further boosting performance. B. emergent/reactive adjustments to unanticipated strategic moves by rivals, unexpected changes in customer preferences, and new market opportunities. C. tactical plans to imitate the key elements of the strategies employed by rivals. D. Both A and B. E. All of these.

D. Both A and B.

30. Which of the following is NOT a factor in contributing to the emergence and sustainability of a strong culture? A. Continuity of leadership, small group size, stable group membership, geographic concentration, and considerable organizational success. B. A founder or strong leader who establishes values, principles, and practices that are consistent and sensible in light of customer needs, competitive conditions, and strategic requirements. C. A sincere, long-standing company commitment to operating the business according to established traditions, thereby creating an internal environment that supports decision making and strategies based on cultural norms. D. Centralized decision-making, strict enforcement of company policies, and a strong commitment to being the market share leader. E. A genuine concern for the well-being of the organization's three biggest constituencies—customers, employees, and shareholders.

D. Centralized decision-making, strict enforcement of company policies, and a strong commitment to being the market share leader.

31. Which of the following statements about a strong-culture company is false? A. In a strong-culture company, culturally-approved behaviors and ways of doing things are nurtured while culturally-disapproved behaviors and work practices get squashed. B. In strong culture companies, senior managers make a point of reiterating key principles and core values to organization members more importantly, they make a conscious effort to display these principles and values in their own actions and behavior and they insist that company values and business principles be reflected in the decisions and actions taken by all company personnel. C. Continuity of leadership, small group size, stable group membership, geographic concentration, and considerable organizational success all contribute to the emergence and sustainability of a strong culture. D. Centralized decision-making, strict enforcement of company policies, diligent pursuit of a distinctive competence, and a bold strategic intent are the hallmarks of a strong-culture company. E. In a strong-culture company, values and behavioral norms are like crabgrass: deeply rooted and hard to weed out.

D. Centralized decision-making, strict enforcement of company policies, diligent pursuit of a distinctive competence, and a bold strategic intent are the hallmarks of a strong-culture company.

15. Which of the following topics would least likely be contained in a company's code of ethics? A. Prohibiting giving or accepting bribes, kickbacks, or gifts. B. Expecting all company personnel to display honesty and integrity in their actions and avoid conflicts of interest. C. Barring dealing with suppliers that employ child labor or engage in other unsavory practices. D. Committing to a no-layoff policy and to adequate funding of employee retirement programs. E. Avoiding use of company assets, resources, and property for personal or other inappropriate purposes.

D. Committing to a no-layoff policy and to adequate funding of employee retirement programs.

75. When management is leading the drive for good strategy execution and operating excellence it calls for the following actions on their part, EXCEPT A. staying on top of what is happening. B. monitoring progress closely. C. Putting constructive pressure on the organization to execute the strategy with excellence. D. Initiating corrective actions to improve strategy execution, when necessary. E. None of these.

D. Initiating corrective actions to improve strategy execution, when necessary.

Which of the following questions ought to be used to test the merits of one strategy over another and distinguish a winning strategy from a mediocre or losing strategy? A. Is the company's strategy ethical and socially responsible and does it put enough emphasis on good product quality and good customer service? B. Is the company putting too little emphasis on growth and profitability and too much emphasis on behaving in an ethical and socially responsible manner? C.Is the strategy resulting in the development of additional competitive capabilities? D. Is the strategy helping the company achieve a sustainable competitive advantage and is it resulting in better company performance? E.Does the strategy strike a good balance between maximizing shareholder wealth and maximizing customer satisfaction?

D. Is the strategy helping the company achieve a sustainable competitive advantage and is it resulting inbetter company performance?

Which of the following questions ought to be used to distinguish a winning strategy from a so-so or flawed strategy? A. Does the strategy contain a sufficient number of emergent/reactive elements? B. Is the company putting too little emphasis on growth and profitability and too much emphasis on behaving in an ethical and socially responsible manner? C. Is the strategy resulting in the development of additional competitive capabilities? D. Is the strategy well-matched to the company's situation, helping the company achieve a sustainable competitive advantage, and resulting in better company performance? E. Does the strategy strike a good balance between maximizing shareholder wealth and maximizing customer satisfaction?

D. Is the strategy well-matched to the company's situation, helping the company achieve a sustainable competitive advantage, and resulting in better company performance?

24. Which one of the following is NOT particularly helpful in perpetuating a company's culture? A. Systematic indoctrination of new members in the culture's fundamentals. B. Frequent reiteration of core values by senior managers and group members. C. Visibly rewarding those who display cultural norms and penalizing those who don't. D. Maintaining a consistent strategic vision and strategic intent over time. E. Telling and retelling of company legends and regular ceremonies honoring members who display desired cultural behaviors.

D. Maintaining a consistent strategic vision and strategic intent over time.

3. Which one of the following is NOT a fundamental part of a company's culture? A. The work practices and behaviors that define "how we do things around here". B. The company's standard of what is ethically acceptable and what is not, along with the "chemistry" and "personality" that permeates its work environment. C. The core values and business principles that management preaches and practices. D. The company's strategic vision, strategic intent, and culture strategy. E. The legends and stories that people repeat to illustrate and reinforce the company's core values, traditions, and business practices.

D. The company's strategic vision, strategic intent, and culture strategy.

66. Which one of the following is NOT a substantive culture-changing action that a company's managers can undertake to alter a problem culture? A. Promoting individuals who are known to possess the desired cultural traits, who have stepped forward to advocate the shift to a different culture, and who can serve as role models for the desired cultural behavior B. Appointing outsiders with the desired cultural attributes to high-profile positions C. Screening all candidates for new positions carefully, hiring only those who appear to fit in with the new culture D. Urging company personnel to search outside the company for work practices and operating approaches that may be an improvement over what the company is presently doing and paying sizable bonuses to those employees who identify practices that the company ends up adopting E. Designing compensation incentives that boost the pay of teams and individuals who display the desired cultural behaviors and hit change-resisters in the pocketbook

D. Urging company personnel to search outside the company for work practices and operating approaches that may be an improvement over what the company is presently doing and paying sizable bonuses to those employees who identify practices that the company ends up adopting

74. Which of the following is NOT one of the leadership roles that senior managers have to play in pushing for good strategy execution and operating excellence? A. Learning the obstacles in the path of good execution and clearing the way for progress. B. Being out in the field, seeing how well operations are going. C. Being out front personally leading the execution process and driving the pace of progress. D. Weeding out managers who are consistently in the ranks of the lowest performers (the bottom 10 percent) and who are not enthusiastic about the strategy or how it is being executed. E. Delegating authority to middle and lower-level managers and creating a sense of empowerment among employees to move the implementation process forward.

D. Weeding out managers who are consistently in the ranks of the lowest performers (the bottom 10 percent) and who are not enthusiastic about the strategy or how it is being executed.

56. When should a culture be changed as rapidly as it can be managed? A. Never, because the actions and behaviors needed to execute the new strategy successfully are well entrenched, and thus are not changeable. B. Changing a culture is among the toughest management tasks and therefore it should not be done hastily for it is natural for company personnel to cling to existing practices and to be wary of new approaches. C. When the leadership at the top wants to establish a new culture that replicates the existing cultural behaviors in meeting the needs of successful strategy-execution. D. When a strong culture is unhealthy or otherwise out of sync with the actions and behaviors needed to execute the strategy successfully. E. When the case for cultural reform is not credible, symbolic nor substantive.

D. When a strong culture is unhealthy or otherwise out of sync with the actions and behaviors needed to execute the strategy successfully.

55. When is a subculture MOST problematic? A. When the multiple subcultures are compatible with the overarching corporate culture and are supportive of strategy-execution. B. When the multiple subcultures clash and coordinating efforts to craft and execute strategy within each subculture is relatively easy. C. When the multiple subcultures foster team work and support a collaborative approach to strategy execution. D. When multiple subcultures have embraced conflicting business philosophies which are inconsistent with superior strategy execution. E. All of these.

D. When multiple subcultures have embraced conflicting business philosophies which are inconsistent with superior strategy execution.

It is normal for a company's strategy to end up being A. a blend of offensive actions and defensive moves to counteract changing market conditions to improve the company's profitability. B. a combination of conservative moves to protect the company's market share and somewhat more risky initiatives to set the company's product offering apart from rivals. C. a close imitation of the strategy employed by the recognized industry leader. D. a blend of deliberate planned actions to improve the company's competitiveness and financial performance and as-needed unplanned reactions to unanticipated developments and fresh market conditions. E. more a product of clever entrepreneurship than of efforts to clearly set a company's product/service offering apart from the offerings of rivals.

D. a blend of deliberate planned actions to improve the company's competitiveness and financial performance and as-needed unplanned reactions to unanticipated developments and fresh market conditions.

16. A company's stated core values and ethical principles: A. are important because of their role in ensuring that company executives will not engage in unethical behavior or behave in a manner that is contrary to the company's core values. B. are typically tightly linked to its strategic vision and strategy. C. are the best indicators of a company's social responsibility strategy. D. are fostering a work climate where company personnel share common and strongly-held convictions about how the company's business is to be conducted and provide guidance in displaying the core values in their actions and behaviors. E. are strictly enforced in strong culture companies and weakly enforced in weak culture companies.

D. are fostering a work climate where company personnel share common and strongly-held convictions about how the company's business is to be conducted and provide guidance in displaying the core values in their actions and behaviors.

Good strategy combined with good strategy execution A. offers a surefire guarantee for avoiding periods of weak financial performance. B. are the two best signs that a company is a true industry leader. C. are more important management functions than forming a strategic vision and setting objectives. D. are the most trustworthy signs of good management. E. signal that a company has a superior business model.

D. are the most trustworthy signs of good management.

20. The retelling of legendary stories does a lot for establishing a company's core values, but they should NOT: A. place pressure on company personnel to display core values and to do their part in keeping the companies traditions alive. B. illustrate the kind of behavior the company reveres. C. inspire company personnel to perform similarly and reinforce the depth of commitment that people have displayed. D. communicate the company's good intentions towards ethical behavior. E. steer company personnel toward both doing things right and doing the right thing.

D. communicate the company's good intentions towards ethical behavior.

A company's strategy consists of A. actions to develop a more appealing business model than rivals. B. plans involving alignment of organizational activities and strategic objectives. C. offensive and defensive moves to generate revenues and increase profit margins. D. competitive moves and approaches that managers have developed to grow the business, attract and please customers, conduct operations, and achieve targeted objectives. E. its strategic vision, its strategic objectives, and its strategic intent.

D. competitive moves and approaches that managers have developed to grow the business, attract and please customers, conduct operations, and achieve targeted objectives.

12. The two culture-building roles of a company's stated values and ethical standards are to: A. communicate the company's good intentions and establish a corporate conscience. B. confirm the integrity of company personnel and signal the above-board nature of the company's business principles and operating methods. C. steer company personnel toward doing the right thing and convince outsiders that the company is socially responsible. D. foster a work climate where company personnel share common and strongly held convictions about how the company's business is to be conducted and to provide them with guidance about how to do their jobs- steering them toward both doing things right and doing the right things. E. provide a basis for designing culture-supportive incentive compensation plans and reinforcing the appropriateness of particular ethical and moral actions.

D. foster a work climate where company personnel share common and strongly held convictions about how the company's business is to be conducted and to provide them with guidance about how to do their jobs- steering them toward both doing things right and doing the right things.

11. A corporate culture founded on ethical business principles and socially approved values: A. virtually guarantees that a company will be (or soon become) the acknowledged industry leader because of the ethical and socially approved manner in which its business is being conducted. B. doesn't necessarily impact a company's long-term strategic success favorably or unfavorably. C. does more to detract from a company's chances for strategic success and market leadership than to help it. D. is a positive force underlying a company's long-term financial success and reduces the likelihood of lapses in ethical and socially approved behavior that can damage the company's reputation. E. is seldom more than window-dressing and is generally regarded by customers, suppliers, employees, shareholders, and society at large as nothing more than good public relations.

D. is a positive force underlying a company's long-term financial success and reduces the likelihood of lapses in ethical and socially approved behavior that can damage the company's reputation.

8. A company's culture is typically grounded in and shaped by: A. its core competencies and competitive capabilities. B. its long-term strategic success or lack thereof. C. the degree to which top management is committed to achieving market leadership. D. its core values and the bar it sets for ethical standards. E. its strategic intent and its reward system.

D. its core values and the bar it sets for ethical standards.

leadership to propel strategy execution forward

Exercise strong...

A company's business model A. sets forth management's game plan for maximizing profits for shareholders. B. details exactly how management's strategy will result in the achievement of the company's strategic intent. C. explains how it will achieve high profit margins while at the same time charging relatively low prices to customers. D. sets forth the key components of the enterprise's business approach, indicates how revenues will be generated, and makes a case for why the strategy can deliver value to customers in a profitable manner. E. sets forth management's long term action plan for achieving market leadership.

D. sets forth the key components of the enterprise's business approach, indicates how revenues will be generated, and makes a case for why the strategy can deliver value to customers in a profitable manner.

The difference between a company's strategy and a company's business model is that A. a company's strategy is management's game plan for achieving strategic objectives while its business model is management's game plan for achieving financial objectives. B. the strategy concerns how to compete successfully and the business model concerns how to operate efficiently. C. a company's strategy is management's game plan for realizing the strategic vision whereas a company's business model is the game plan for accomplishing the business purpose or mission. D. strategy relates broadly to a company's competitive moves and business approaches (which may or may not lead to profitability) while its business model relates to whether the revenues and costs flowing from the strategy demonstrate that the business is viable from the standpoint of being able to earn satisfactory profits and returns on investment. E. a company's strategy concerns how to please customers while its business model concerns how to please shareholders.

D. strategy relates broadly to a company's competitive moves and business approaches (which may or may not lead to profitability) while its business model relates to whether the revenues and costs flowing from the strategy demonstrate that the business is viable from the standpoint of being able to earn satisfactory profits and returns on investment.

40. When a company's culture is out of sync with what is needed for strategic success and good strategy execution, A. the strategy has to be changed to fit the culture as rapidly as possible. B. the company's strategic vision, strategic intent, and strategy have to be adjusted to better reflect ingrained core values and cultural norms. C. management needs to go on the offensive to reinterpret the culture and explain to company personnel why there really is good overall cultural fit with the strategy. D. the culture has to be changed to accommodate the requirements of good strategy execution as rapidly as can be managed. E. management must urge company to participate in an all-out effort to create a different portfolio of competencies and capabilities that will permit the strategy to be changed in ways that will fit the culture.

D. the culture has to be changed to accommodate the requirements of good strategy execution as rapidly as can be managed.

10. At companies where executives believe in the merits of practicing the values and ethical principles that have been espoused: A. the executives have usually personally written the statement of core values and the code of ethics. B. the company's pursuit of higher profits is tempered, so that the company will not come across to customers and the general public as greedy. C. the company's chances for strategic success and market leadership are substantially reduced because company personnel are hesitant to engage in business practices that are unethical. D. the stated core values and ethical principles are the foundation of the corporate culture. E. the core values and ethical standards are made a prominent and visible part of the company's strategic intent and strategy.

D. the stated core values and ethical principles are the foundation of the corporate culture.

45. In adaptive corporate cultures, A. the prevailing view is that the best way of looking out for the interests of employees is to change core values and cultural norms in whatever ways are needed to fit the changing requirements of an evolving strategy. B. company personnel are amenable to changing policies and operating practices as long as the core elements of the company's strategic vision and strategy remain intact. C. members are willing to embrace a proactive approach to trying new ideas, altering operating practices, and changing pieces of the strategy provided it doesn't imperil their job security, entail cuts in compensation, or require different work practices. D. there's a spirit of doing what's necessary to ensure long-term organizational success provided that core values and business principles are not compromised and provided top management undertakes the changes in a manner that exhibits genuine concern for the legitimate interests of stakeholders. E. there is little need for policies and procedures because group members willingly accept experimentation and innovation.

D. there's a spirit of doing what's necessary to ensure long-term organizational success provided that core values and business principles are not compromised and provided top management undertakes the changes in a manner that exhibits genuine concern for the legitimate interests of stakeholders.

Define Ethical Universalism and what is its effect on business ethics?

Definition: Holds that common understandings across multiple cultures and countries about what constitutes right & wrong give rise to universal ethical standards that apply to all societies, all firms, and all businesspeople. Effect: Whether a business-related action is right or wrong is judged by universal standards.

Define School of Ethical Relativism and what is its effect on business ethics.

Definition: Holds that differing beliefs, customs, and behavioral norms across countries and cultures give rise to multiple sets of standards of what is ethically right or wrong. Effect: Whether business-related actions are right or wrong depends on local ethical standards.

A company's strategy: A) is shaped partly by management analysis and choice and partly by the necessity of adapting and learning by doing. B) is fluid, representing the temporary outcome of an ongoing process that, on the one hand, involves reasoned and creative management efforts to craft an effective strategy and, on the other hand, involves ongoing responses to market change and constant experimentation and tinkering. C) stands a better chance of succeeding when it is predicated on actions, business approaches, and competitive moves aimed at appealing to buyers in ways that set a company apart from rivals and carving out its own market position. D) is revealed in part by its actions to gain sales and market share via lower prices, more performance features, more appealing design, better quality or customer service, wider product selection, and other competitive tactics. E) All of the above.

E) All of the above.

A company's strategy evolves over time as a consequence of: A) the need to keep strategy in step with changing circumstances, market conditions, and changing customer needs and expectations. B) the proactive efforts of company managers to fine-tune and improve one or more pieces of the strategy. C) the need to abandon some strategy features that are no longer working well. D) the need to respond to the newly initiated actions and competitive moves of rival firms. E) All of these.

E) All of these.

Managers must be prepared to modify their strategy in response to: A) changing circumstances that affect performance and their desire to improve the current strategy. B) competitor moves in the market and shifting needs of buyers. C) stagnating market and restrictive industrial opportunities. D) mounting evidence that the strategy is less effective. E) All of these.

E) All of these.

Winning a sustainable competitive edge over competitors generally hinges on which of the following? A) Having a distinctive competitive product offering. B) Building competitively valuable expertise and capabilities not readily matched, and offering a distinctive product offering. C) Building experience, know-how, and specialized capabilities that have been perfected over a long period of time. D) Having "hard to beat" capabilities and impressive product innovation. E) All of these.

E) All of these.

Which one of the following questions can be used to distinguish a winning strategy from a mediocre or losing strategy? A) How good is the company's business model? B) Is the company a technology leader? C) Does the company have low prices in comparison to rivals? D) Is the company putting too little emphasis on behaving in an ethical and socially responsible manner? E) How well does the strategy fit the company's situation?

E) How well does the strategy fit the company's situation?

A company's strategy and its quest for competitive advantage are tightly related because A) a company's strategy determines whether it will have lower or higher costs than rivals and thus be at a competitive advantage or disadvantage. B) competitive advantage is essential to having a profitable business model. C) choosing a competitive advantage to pursue also helps a company choose which business model is most appropriate. D) competitive advantage enables a company to achieve its strategic objectives. E) a company is almost certain to have better profits and financial performance when its strategy produces a competitive advantage over rivals.

E) a company is almost certain to have better profits and financial performance when its strategy produces a competitive advantage over rivals.

A viable business model A) is derived from the company's strategic vision. B) lays out a compelling case for how the strategy will yield competitive advantage. C) should explain how the company will achieve high profit margins while at the same time charging relatively low prices to customers. D) must be closely linked to the company's business strategy. E) must generate revenues sufficient to cover costs and deliver good profitability.

E) must generate revenues sufficient to cover costs and deliver good profitability.

The actual strategy a company employs is A) is known only to top-level managers and is kept hidden from outside view for reasons of competitive sensitivity. B) usually deviates little from management's planned set of actions and business approaches since making on-the-spot changes is too risky. C) pretty much like the strategies of other industry members since all companies are confronting much the same market conditions and competitive pressures. D) seldom consistent with its business model because of ongoing changes in market conditions and competitive pressures. E) partly proactive (in the sense of reflecting management's plans and intentions)and partly reactive to changing circumstances.

E) partly proactive (in the sense of reflecting management's plans and intentions)and partly reactive to changing circumstances.

Management's storyline for how and why the company's product offerings and competitive approaches will generate a revenue stream and have an associated cost structure that produces attractive earnings and returns on investment is A) called a company's strategy. B) referred to as a company's strategic intent. C) referred to as a company's primary financial objective. D) what a company's mission statement is all about. E) referred to as a company's business model.

E) referred to as a company's business model.

Competing differently from rivals—doing what competitors don't do or, even better, doing what they can't do is referred to as its A) strategic offensive for becoming a market leader. B) business model. C) long-term strategic direction. D) mission statement. E) strategy.

E) strategy.

A company achieves sustainable competitive advantage when A) it has a low-cost business model. B) it is able to increase shareholder value. C) sufficient numbers of buyers believe the company has demonstrated a commitment to environmental sustainability. D) it is consistently able to achieve both its strategic and financial objectives. E) when it provide buyers with lasting reasons to prefer its products or services over those of competitors.

E) when it provide buyers with lasting reasons to prefer its products or services over those of competitors.

Which of the following is something to look for in identifying a company's strategy? A. Actions to gain sales and market share. B. Actions to strengthen marketing standing and competitiveness by merging with or acquiring rival companies. C. Actions to enter new geographic or product markets or exit existing ones. D .Actions and approaches used in managing R&D, production, sales and marketing, finance, and other key activities. E. All of above are pertinent in identifying a company's strategy

E. All of above are pertinent in identifying a company's strategy

73. In leading the push for proficient strategy execution and operating excellence, the roles of top-level managers include A. Being out in the field, seeing how well operations are going. B. Delegating authority to middle and lower-level managers and creating a sense of empowerment among employees to move the implementation process forward. C. Gathering information firsthand and gauging the progress being made. D. Learning the obstacles in the path of good execution and clearing the way for progress. E. All of these

E. All of these

A well-conceived strategy is value creating producing excellence in company performance and is best when the gains are achieved A. in profitability and financial strength B. in competitive strength and market standing C. in developing distinctive competencies and sustainability D. in developing a desirable competitive edge E. All of these

E. All of these

2. The character of a company's corporate culture is a product of: A. the shared values and core business principles and beliefs that management preaches and practices. B. its standards of what is ethically acceptable and what is not and the stories that get told over and over to illustrate and reinforce the company's shared values, business practices, and traditions. C. the company's approach to people management and the "chemistry" and "personality" that permeates its work environment. D. the work practices and behaviors that define "how we do things around here." E. All of these.

E. All of these.

Which of the following is a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage? A. Striving to be the industry's low-cost provider, thereby aiming for a cost-based competitive advantage. B. Outcompeting rivals on the basis of such differentiating features as higher quality, wider product selection, added performance, better service, more attractive styling, or technological superiority. C. Developing competitively valuable resources and capabilities that rivals can't easily match, copy, or trump with capabilities of their own. D. Focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of serving the special needs and tastes of buyers comprising the niche. E. All of these.

E. All of these.

49. Which of the following is not an example of an unhealthy company culture? A. Insular inwardly-focused cultures. B. Change-resistant cultures. C. Unethical and greed-driven cultures. D. Politicized cultures. E. Hyper-adaptive cultures.

E. Hyper-adaptive cultures.

17. Which of the following is NOT a technique that companies employ to hammer in and ingrain core values and ethical standards? A. Incorporating the statement of values and the code of ethics into orientation programs for new employees and training courses for managers and employees. B. Making the display of core values and ethical principles a factor in evaluating each person's job performance. C. Encouraging everyone to use their influence in helping enforce observance of core values and ethical standards. D. Using ceremonial occasions to recognize individuals and groups who display the values and ethical principles. E. Instituting standard practices and procedures for employees to follow as a foundation for maintaining ethical and cultural norm conflict clashes and behavioral lapses.

E. Instituting standard practices and procedures for employees to follow as a foundation for maintaining ethical and cultural norm conflict clashes and behavioral lapses.

5. A company's culture is NOT manifested in which one of the following? A. Its approaches to people management and problem-solving and in the "chemistry" and "personality" that permeates the work environment. B. Its revered traditions and the stories that get told over and over to illustrate the importance of certain values. C. Its acceptance of the peer pressures that exist to do things in particular ways and conform to expected norms. D. Its approach to people management and its official policies, procedures, and operating practices that paint the white lines for the behavior of company personnel. E. Its strategic vision, strategic intent, and strategy.

E. Its strategic vision, strategic intent, and strategy.

Which of the following is not an element of a company's business strategy? A. Actions to respond to changing market conditions or other external factors B. Actions to strengthen competitiveness via strategic alliances and collaborative partnerships C. Actions to strengthen internal capabilities and competitively valuable resources D. Actions to manage the functional areas of the business E. Management actions to revise the company's financial and strategic performance targets

E. Management actions to revise the company's financial and strategic performance targets

21. Which of the following is NOT one of the positive impacts that a company's stated values and ethical standards have on its corporate culture? A. Communicating the company's good intentions. B. Validating the integrity and above-board nature of the company's business principles and operating methods. C. Steering company personnel toward both doing things right and doing the right thing. D. Establishing a corporate conscience. E. None of these.

E. None of these.

82. The corporate strategy process does NOT entail A. crafting, implementing and executing plans. B. fine-tuning and adjusting corporate vision and objectives. C. a continuous process of crafting and executing strategy to fit changing circumstances. D. recycling the linked stages of executing strategy. E. None of these.

E. None of these.

64. The menu of actions management can take to change problem culture does NOT include which one of the following? A. Making a compelling case for why the company's new strategic direction and culture-remodeling efforts are in the organization's best interests and why company personnel should wholeheartedly join the effort to doing things somewhat differently. B. Replacing senior executives who are strongly identified with the old culture and who may be stonewalling needed organizational and cultural changes. C. Promoting individuals who are known to possess the desired cultural traits, who have stepped forward to advocate the shift to a different culture, and who can serve as role models for the desired cultural behavior. D. Revising policies and procedures in ways that will help drive cultural change. E. Shifting from decentralized to centralized decision-making so as to give senior executives more authority and control in driving the cultural change.

E. Shifting from decentralized to centralized decision-making so as to give senior executives more authority and control in driving the cultural change.

The heart and soul of a company's strategy-making effort A. is figuring out how to become the industry's low-cost provider. B. is figuring out how to maximize the profits and shareholder value. C. concerns how to improve the efficiency of its business model. D. deals with how management plans to maximize profits while, at the same time, operating in a socially responsible manner that keeps the company's prices as low as possible. E. involves coming up with moves and actions that produce a durable competitive edge over rivals.

E. involves coming up with moves and actions that produce a durable competitive edge over rivals.

If one accepts the tenets of the school of ethical relativism, then which of the following is NOT true?

Ethical standards for businesses are established on the basis of conceptions of right and wrong that apply to all businesses.

Which of the following is NOT a part of the business case for why companies should act in a socially responsible manner?

Every business has a moral duty to be a good corporate citizen.

Which one of the following is NOT a part of the business case for why companies should act in a socially responsible manner?

Every business has a moral duty to be a good corporate citizen.

Corporate Social Responsibility

Is a firm's duty to operate in an honorable manner

Define Corporate Social Responsibility (CSR).

Is a firm's duty to operate in an honorable manner: (review Figure 9.2 on slide #24 in PP)

Business Ethics

Is the application of general ethical principles to the actions and decisions of businesses and the conduct of their personnel

The Ethics Code Litmus Test:

Is what we are proposing to do fully compliant with our code of ethics? Are there areas of ambiguity? Is this action in harmony with our core values? Are any conflicts or potential problems evident? Is this action ethically objectionable? Would our stakeholders, our competitors, the SEC under the Sarbanes-Oxley Act, or the news and social media view this action as ethically objectionable?

How does a company's unethical behaviors risk doing direct damage to a company's creditors?

It could lead to default on loans due to potential business fallout.

What is the function of the Global Reporting Initiative?

It promotes greater transparency and facilitates benchmarking CSR efforts across firms and industries.

Which of the following is an activity a company engages in to enhance the quality of life for its employees in an attempt to fulfill its corporate social responsibility?

It provides work-at-home opportunities.

The strength of the beliefs underlying the moral case for an ethical strategy relates to all EXCEPT which of the following?

It starts with managers that involve themselves in creating strategies based on risks and loss of reputation that implementing an unethical strategy can cost.

Which of the following regarding integrated social contracts theory is NOT true?

Local ethical norms always take precedence over universal ethical norms.

Although exposing children to hazardous work and long work hours is unquestionably deplorable, which of the following, if true, leads to a moral dilemma?

Many child laborers come from poverty-stricken families.

Functional structure

Organized into functional departments, with departmental managers who report to the CEO and small corporate staff

When strategy fails is is often because...

Poor execution.

Sustainable Business Practices

Practices that meet the needs of the present without compromising the ability to meet needs in the future

Define Integrative Social Contracts Theory.

Provides a middle-ground balance between universalism and relativism. 1. The collective views of multiple societies form some universal ethical principles (1st order) that all persons have a contractual duty to observe in all situations. 2. Within the contract, cultures or groups can specify locally ethical actions (2nd order).

Developing

Renew, upgrade, and revise resources and capabilities to match chosen strategy. (train and re-train)

Review Figure 9.3 - The Triple Bottom Line: Excelling on Three Measures of Company Performance (Also known as the "Three Pillars") (PP slide #28)

Review Figure 9.3

Which of the following is NOT a particularly sound or valid reason why a company's strategy should be ethical?

Senior executives fear public embarrassment if caught doing something perceived as unethical.

meet or beat short-term performance targets

Short-termism pressure to..

Identify facets of the present cultures

Step 1 of changing a problem culture

Specify new actions, behaviors

Step 2 of changing a problem culture

Talk openly

Step 3 of changing a problem culture

Follow with visible, forceful actions

Step 4 of changing a problem culture

Business Ethics

The application of general ethical principles to the actions and decisions of businesses and the conduct of their personnel

Integrative social contracts theory

The collective views of multiple societies form of some universal ethical principles that all persons have a contractual duty to observe in all situation and within the contract, cultures or group can specify locally ethical actions

Which of the following is true of ethical relativism?

There are important occasions when local cultural norms and morality and the circumstances of the situation determine whether certain behaviors are right or wrong, for there are no absolutes when it comes to business ethics.

Which one of the following is false as concerns the merits of why acting in a socially responsible manner is "good business"?

There is a high correlation between socially responsible behavior that addresses social issues and a firm's competitive advantage and financial performance.

Which of the following is true of the school of ethical universalism?

They are ethical principles that set forth the traits and behaviors considered virtuous and that a good person is supposed to believe in and display.

How do ethical principles apply to businesses?

They are not materially different from ethical principles in general.

Which of the following is NOT true about why codes of conduct based on ethical relativism are ethically dangerous for multinational companies?

They create standards that mostly relate to ethical codes in a company's home market, which might trigger compliance issues in the local market.

How do good corporate citizens function?

They pursue discretionary activities that contribute to the betterment of society, especially in areas where government has chosen not to focus its efforts or has fallen short.

E

Unethical managerial behavior tends to be driven by such factors as: a) the pervasiveness of immoral and amoral business people. b) overzealous pursuit of personal gain, wealth, and other selfish interests. c) a company culture that puts the profitability and good business performance ahead of ethical behavior. d) heavy pressures on company managers to meet or beat earnings targets. e) All of these.

faulty oversight and self dealing, pressure of short-term performance, a weak or corrupt ethical environment

What are the 3 main categories of unethical behavior drivers

Profit, People, and Planet

What are the 3p's

Managing by wandering around

What does MBWA mean?

The strength of integrated social contracts theory is that it

accommodates the best parts of ethical universalism and ethical relativism.

Which of the following is NOT something a company should usually consider in crafting a strategy of social responsibility?

actions to benefit shareholders such as raising the dividend or boosting the stock price

Which of the following is NOT something a company should consider in crafting an environmental sustainability strategy?

actions to couple environmental degradation and economic growth

A company's social responsibility strategy typically comprises all of the following EXCEPT

actions to keep the company's profits at a reasonable and acceptable level to ensure the company's products/pricing will not be viewed by the general public as obscenely high or exorbitant.

Integrated social contracts theory maintains that

adherence to universal ethical norms always takes precedence over local ethical norms.

Which one of the following is NOT a part of the business case for why companies should act in a socially responsible manner?

aggressive pursuit of market share, revenues, and profits

According to integrative social contracts theory, the ethical standards a company should try to uphold

are governed both by (1) a limited number of universal ethical principles that are widely recognized as putting legitimate ethical boundaries on actions and behavior in all situations and (2) the circumstances of local cultures, traditions, and shared values that further prescribe what constitutes ethically permissible behavior and what does not—but universal norms always take precedence over local ethical norms.

According to integrated social contracts theory, the ethical standards a company should try to uphold

are governed both by a limited number of universal ethical principles and the circumstances of local cultures, traditions, and shared values.

Ethical principles in business

are not materially different from ethical principles in general.

Notions of right and wrong, fair and unfair, moral and immoral, ethical and unethical

are present in all societies, organizations, and individuals.

Network structure

arrangement linking a number of independent organizations involved in some common undertaking

Which of the following activities does NOT reflect short termism?

avoiding stock repurchases made to increase earnings-per-share of a company

Notions of right and wrong, fair and unfair, moral ad immoral, ethical and unethical: a) vary enormously from religion to religion and country to country across the world. b) are present in all societies and cultures, and in organizations and individuals, with some of the most important concepts of what is right and what is wrong (for example, being truthful) resonating with people of most cultures, and are thus universal. c) ultimately depends on the circumstances--nothing is really black or white when it comes to ethical standards. d) are governed mainly by the thinking and writings of religious clerics at the School of Morally Correct Thinking and Behavior in Geneva, Switzerland. e) ultimately depends on a person's own values and beliefs.

b) are present in all societies and cultures, and in organizations and individuals, with some of the most important concepts of what is right and what is wrong (for example, being truthful) resonating with people of most cultures, and are thus universal.

The essence of socially responsible business behavior is

balancing strategic actions to benefit shareholders against the duty to be a good corporate citizen.

The moral case for why a company should actively promote the betterment of society and act in a manner benefitting all its stakeholders

boils down to "it's the right thing to do."

When high ethical principles are deeply ingrained in the corporate culture of a company, culture can function as a powerful mechanism for all of the following EXCEPT

boosting short-termism.

Which of the following is most likely to be morally valid from the perspective of ethical relativism?

bribing a government official in an underdeveloped country to obtain a permit to build a hospital

Business ethics concerns: a) developing a consensus among companies worldwide as to what ethical principles businesses should be expected to observe in the course of conducting their operations. b) what ethical behaviors should be expected of company personnel in the course of doing their jobs. c) the application of general ethical principles to the actions and decisions of companies and the conduct of their personnel. d) developing a special set of ethical standards for businesses to observe in conducting their affairs. e) picking and choosing among the consensus ethical standards of society to arrive at a set of ethical standards that apply directly to operating a business.

c) the application of general ethical principles to the actions and decisions of companies and the conduct of their personnel.

Multinational companies that forbid the payment of bribes and kickbacks in their codes of ethical conduct and that are serious about enforcing this prohibition

face a particularly vexing problem of losing business to competitors that have no scruples—an outcome that penalizes ethical companies and company personnel.

Cultural demands to employ unethical means if circumstances become challenging can prompt

clever ways to operate outside established policies to boost profits.

Ethics

concerns principles of right or wrong conduct

Internal administrative costs which are incurred by companies for ethical wrongdoing include all of the following EXCEPT

costs attached to adverse effects on employee productivity.

Ethical principles as they apply to the conduct of personnel and business decisions: a) deal chiefly with standards a company has (and that are elaborated in its code of ethics) about what is right and wrong insofar as the conduct of its business is concerned and about what behaviors are expected of company personnel. b) deal chiefly with the behaviors that a company's board of directors expects of all company personnel in both their conduct on the job and off the job. c) involve the rules a company's top management and board of directors make about "what is right" and "what is wrong." d) deal primarily with the company's duty to comply with legal requirements, conform to ethical norms of society, and ethical principles in general. e) are generally less stringent than the ethical principles for society at large because it is well understood that businesses should not be expected to operate any differently than what the law requires of them

d) deal primarily with the company's duty to comply with legal requirements, conform to ethical norms of society, and ethical principles in general.

The three dimensions of performance are often referred to in terms of the "three pillars" and include: a) People, planet, and profit. b) People, which refers to the various social initiatives that make up the CSR strategies. c) Planet, which refers to a firm's ecological impact and environmental practices. d) Profit encompasses the economic impact (value and costs) that the company has on society. e) All of these.

e) All of options are correct.

Unethical managerial behavior tends to be driven by such factors as: a) the pervasiveness of immoral and amoral business people. b) overzealous pursuit of personal gain, wealth, and other selfish interests. c) a company culture that puts the profitability and good business performance ahead of ethical behavior. d) heavy pressures on company managers to meet or beat earnings targets. e) All of these.

e) All of the above.

Which of the following represents a justifiable reason for why a company's strategy should be ethical? a) An unethical strategy reflects badly on the character of the company personnel involved. b) A strategy that is unethical in whole or in part is morally wrong. c) Pursuing an unethical strategy damages a company's reputation and can have costly consequences. d) An ethical strategy is good business and is in the best interest of shareholders. e) All of these.

e) All of these.

The "triple bottom line" refers to what three performance metrics a company should simultaneously succeed in?

economic, social, and environmental

Business Case

ethical strategy can be both good business and server the self-interest of shareholders

Which of the following factors does NOT necessarily drive unethical managerial behavior?

executive compensation independent of company performance

Core values

fosters a work climate and provides company personnel with guidance

According to the advocates of ethical relativism,

if the use of underage labor and/or the payment of bribes/kickbacks are acceptable in a particular culture/society/country, then a case can be made that it is morally correct and ethical for a company to use these practices in conducting its business activities in that culture/society/country.

The results of strategies that cannot pass the test of moral scrutiny often are NOT manifested in

increased customer loyalty.

The contention that ethical standards should reflect the collective views of multiple societies in establishing a set of universal ethical principles (that are widely recognized as laying legitimacy to ethical boundaries on actions and behavior in all situations) and in allowing inclusion of a set of prevailing customary actions of local cultures or groups (with their traditions and shared values), that further prescribe to what represents ethically permissible behavior and what does not, constitutes the basic principles of

integrated social contracts theory.

The contention that ethical standards should be governed both by (1) a limited number of universal ethical principles that are widely recognized as putting legitimate ethical boundaries on actions and behavior in all situations and (2) the circumstances of local cultures, traditions, and shared values that further prescribe what constitutes ethically permissible behavior and what does not are the basic principles of

integrative social contracts theory.

Following a public outcry, the CEO of a nationwide consumer bank was forced to apologize to and recompense customers for whom the bank had set up false credit card and auto loan accounts, over 100,000 account managers were terminated, and the company's stock price also sharply declined. Which of the following did the company incur?

internal administrative costs, tangible costs, and intangible costs

The degree of cross-country variability in paying bribes and kickbacks to grease business transactions

is one of the thorniest ethical problems that multinational companies face because paying bribes is normal and customary in some countries and ethically or legally forbidden in others.

Sustainability

is the relationship of a firm to its use of natural resources

The strength of the beliefs underlying ethical universalism is that

it draws upon the collective views of multiple societies and cultures to put some clear boundaries on what constitutes ethical business behavior and what constitutes unethical business behavior no matter what country or culture a company is operating in.

A company's strategy needs to be ethical because

it is good business and in the best interest of shareholders.

Visible costs that are incurred by companies and imposed for ethical wrongdoing include all of the following EXCEPT

legal and investigative costs.

When a company's social responsibility initiatives become part of the way it operates its business every day, these initiatives are

likely to be fully effective in creating a competitive advantage.

Triple-bottom-line (TBL) reporting is emerging as an important way for companies to

make the results of their CSR strategies apparent to stakeholders and for stakeholders to hold companies accountable for their impact on society.

If one concurs with the school of ethical universalism, then one believes that

many basic moral standards travel well across cultures and countries and really do not vary significantly according to local cultural beliefs, social mores, religious convictions, and/or the circumstances of the situation.

Companies that adopt the principle of ethical relativism in providing ethical guidance to company personnel

may quickly find themselves on a slippery slope with no higher order moral compass if they operate in countries where ethical standards vary considerably from country to country.

An environmental sustainability strategy consists of a company's deliberate actions to

meet the current needs of customers, suppliers, shareholders, employees, and other stakeholders in a manner that protects the environment, provides for the longevity of natural resources, maintains ecological support systems for future generations, and guards against ultimate endangerment of the planet.

Corporate culture

meshing of shared values, beliefs, business principles, and traditions that imbues a firm's operating style, behavioral norms, ingrained attitudes, and work atmosphere.

A company's environmental sustainability strategy consists of its deliberate actions to

operate the business in a manner that promotes the longevity of sustainability effects.