GBA 490 Chapter 12

A

26. (p. 396) The Six Sigma process of define, measure, analyze, improve and control (DMAIC) is A. An improvement system for existing processes falling below specification and needing incremental improvement—the DMAIC process is a particularly good vehicle for improving performance when there are wide variations in how well an activity is performed B. An improvement system used to develop new processes or products at 100% defect-free levels C. A system of statistical procedures for achieving 100% control over how a task is performed D. An improvement system used to develop new processes or products at Six Sigma levels E. A system of statistical procedures for eliminating 100% of the variability in how a task is performed AACSB: 3 Difficulty: Medium Taxonomy: Comprehension

C

. (p. 389) From a strategy-implementing/strategy-executing perspective, budget allocations should A. Primarily be based on the number of new strategic initiatives being implemented in each department B. Be based on the number of people employed in each of the divisions C. Be strategy-driven and based primarily on how much each organizational unit needs to carry out its piece of the strategic plan efficiently and effectively D. Be linked to the costs of performing value chain activities as determined by benchmarking against best-in-industry competitors E. Depend on how much stretch there is in each department's objectives and what additional resources are needed to help reach these performance targets AACSB: 3 Difficulty: Medium Taxonomy: Comprehension

A

. (p. 393) A useful guideline in designing strategy-facilitating policies and operating procedures is A. To prescribe enough policies to give organizational members clear direction in implementing strategy and to place desirable boundaries on their actions, then empower them to act within these boundaries however they think makes sense B. That strictly-enforced policies work better than loosely-enforced policies C. That more policies/procedures work better than few policies/procedures and that strict enforcement always beats lax enforcement D. To let individuals act in an empowered and self-directed way, subject only to the constraint that their actions and behavior be ethical and in step with the corporate culture E. To prescribe enough policies and procedures that little is left to chance in performing value chain activities¾employees should have no leeway to do things in a manner that deviates from the company's best practices standard AACSB: 3 Difficulty: Medium Taxonomy: Comprehension

A

1. (p. 389) A company's ability to marshal adequate resources in support of new strategic initiatives and steer them to the appropriate organizational units is important to the strategy execution process because A. Changes in strategy often require resource reallocation and because organizational units need the proper funding to carry out their part of the strategic plan effectively and efficiently—too much funding wastes resources and reduces financial resources while too little funding slows progress and impedes the efforts of organizational units to carry execute their pieces of the strategic plan proficiently B. Accurate budgets are the key to exercising tight financial controls over what organization units can and cannot do in carrying out management's directives to execute the chosen strategy proficiently C. Tight budget control is management's most powerful tool for first-rate strategy execution D. Lean, carefully managed budgets protect the company's financial condition and eliminate wasteful use of cash E. Lean, strictly enforced budgets are management's best and most used means of getting organizational units to exercise the fiscal discipline needed to execute the chosen strategy in a cost-efficient manner AACSB: 3 Difficulty: Easy Taxonomy: Comprehension

B

10. (p. 393 - 394) A "best practice" refers to A. A policy or procedure that is unusually effective B. A technique for performing an activity or business process that at least one company has demonstrated works particularly well (in terms of significantly lowering costs, improving quality or performance, shortening time requirements, enhancing safety or delivering some other highly positive operating outcome) C. Performing a strategy-critical activity in a fashion that results in sustainable competitive advantage D. The value chain activity that is a company's distinctive competence E. A particular value chain activity that management has given top priority to performing in world-class fashion AACSB: 3 Difficulty: Medium Taxonomy: Knowledgen

A

11. (p. 393 - 394) A "best practice" A. Is a technique for performing an activity or business process that at least one company has demonstrated works particularly well (in terms of significantly lowering costs, improving quality or performance, shortening time requirements, enhancing safety or delivering some other highly positive operating outcome) B. Refers to the best-known procedure for performing a specific task or activity so as to achieve the lowest possible costs C. Refers to performing activities in a manner that conforms to established industry standards D. Refers to a company's core competence E. Refers to performing a particular value chain activity in "world-class" fashion (one unmatched by any other company in the world) AACSB: 3 Difficulty: Medium Taxonomy: Knowledge

D

12. (p. 394) The idea behind benchmarking and best practices is to A. Identify which companies are the best performers of a strategically-relevant activity and then exactly copy their methods B. Search the world for a company that performs a strategically relevant task or value chain activity at the lowest possible cost and then use business process reengineering techniques to try to meet or beat the costs of the world's low-cost performer of that activity C. Perform each activity in the industry value chain according to standard industry practice and then regularly benchmark the company's performance to see if it is actually achieving the industry standard D. Identify companies that are the best performers of an activity and then modify and adapt their practices to fit the company's own specific circumstances and operating requirements the more that a company uses best practices in conducting its operations the closer it moves toward operating excellence and proficient strategy execution E. Determine whether a company has a "world-class" value chain

E

14. (p. 394 - 395) Which one of the following is not a tool that company managers can use to promote operating excellence in performing value chain activities? A. Benchmarking B. Adoption of best practices C. TQM and/or Six Sigma quality control techniques D. Business process reengineering E. Adoption of standard industry techniques AACSB: 3 Difficulty: Easy Taxonomy: Comprehension Business Process Reengineering

C

15. (p. 395) Because functional organization structures often result in pieces of strategically relevant activities and capabilities being scattered across many different functional departments, companies have found that A. It is necessary to give these functional departments the freedom to collaborate closely with each other to achieve the desired degree of coordination B. It is necessary to outsource those activities that are fragmented to strategic partners in order to achieve the needed coordination C. There's merit in using business process reengineering to pull the pieces of strategy-critical processes out of different departments and unify their performance in a single department or cross-functional work group that has charge over the whole process and that can be held accountable for performing the activity in a cheaper, better and/or more strategy-supportive fashion D. TQM is a potent way to reengineer the work effort, avoid the shortcomings of a functional organization structure and achieve rapid-response capability E. It makes good organizational sense to combine those functional departments where fragmentation is a problem into a single department AACSB: 3 Difficulty: Medium Taxonomy: Comprehension

B

16. (p. 395) Business process reengineering is a tool for A. Expediting the redesign of existing products and shortening the design-to-market cycle B. Pulling the pieces of strategy-critical activities out of different departments and unifying their performance in a single department or cross-functional work group that has charge over the whole process and can be held accountable for performing the activity in a better, cheaper and/or more strategy-supportive fashion C. Instituting total quality management D. Making the most effective use of Six Sigma techniques E. Rapid redesign of an organization's structure so as to rapidly create organizational competencies and capabilities AACSB: 3 Difficulty: Medium Taxonomy: Knowledge

A

17. (p. 395) Reengineering how a firm performs a business process A. Is a tool for pulling the pieces of strategy-critical processes out of different departments and unifying their performance in a single department or cross-functional work group that has charge over the whole process and that can be held accountable for performing the activity in a cheaper, better and/or more strategy-supportive fashion B. Is the most frequently used tool of total quality management (TQM) C. Requires that a company have many strategic partnerships and alliances with outsiders D. Is typically cheaper and easier-to-do than using Six Sigma techniques to achieve the same cost savings E. Is usually a company's most important "best practice" for achieving operating excellence AACSB: 3 Difficulty: Medium Taxonomy: Knowledgen

E

18. (p. 394 - 395) Which of the following is not a tool that managers can use to promote operating excellence and further the cause of good strategy execution? A. Benchmarking and the adoption of best practices B. Business process reengineering C. TQM D. Six Sigma quality control techniques E. Strategic resource training AACSB: 3 Difficulty: Easy Taxonomy: Comprehension Total Quality Management Programs

A

19. (p. 396) Total quality management (TQM) A. Is a philosophy of managing a set of business practices that emphasizes continuous improvement in all phases of operations, 100% accuracy in performing tasks, involvement and empowerment of employees at all levels, team-based work design, benchmarking and total customer satisfaction B. Is a valuable tool for helping company managers identify what the best practice is for performing a particular activity C. Works best when used in conjunction with Six Sigma quality control techniques D. Is an excellent tool for reengineering business processes and making quantum gains in the efficiency and effectiveness with which the processes are performed E. Is a philosophy of doing things that aims at mistake-free management of a company's entire business AACSB: 3 Difficulty: Medium Taxonomy: Knowledge

E

2. (p. 389 - 390) Managers charged with implementing and executing strategy need to be deeply involved in the budgeting and resource allocation process because A. Too little funding deprives organizational units of the resources to carry out their piece of the strategic plan and too much funding wastes organizational resources and reduces financial performance B. A change in strategy nearly always calls for budget reallocations and resource shifting C. Without major budget reallocations there is no chance for the desired core competencies and organizational capabilities to emerge D. Lean, carefully managed budgets protect the company's financial condition and eliminate wasteful use of cash E. Both A and B AACSB: 3 Difficulty: Easy Taxonomy: Comprehension

C

20. (p. 396) Total quality management (TQM) emphasizes all but which one of the following? A. 100% accuracy in performing tasks B. Continuous improvement in all phases of operations C. Widespread adoption of industry standard operating practices D. Benchmarking and total customer satisfaction E. Empowerment of employees and team-based work design AACSB: 3 Difficulty: Easy Taxonomy: Comprehension

C

21. (p. 396) Total quality management (TQM) programs A. Deal exclusively with procedures to achieve defect-free manufacturing and assembly B. Nearly always contribute more to the achievement of operating excellence than either business process reengineering or Six Sigma quality control techniques C. Entail creating a corporate culture bent on continuously improving the performance of every task and every value-chain activity D. Are considerably more effective in improving manufacturing and assembly activities than they are in improving such value chain activities as R&D, human resources management, supply chain management, information technology, sales and marketing and finance E. Are generally considered the best tool for reengineering strategy-critical business processes AACSB: 3 Difficulty: Medium Taxonomy: Comprehension

B

22. (p. 396) Which one of the following statements about total quality management (TQM) is false? A. TQM aims at instilling enthusiasm and commitment to doing things right from the top to the bottom of the organization B. TQM produces significant results very quickly—very little benefit emerges after the first six months C. TQM doctrine preaches that there's no such thing as "good enough" and that everyone has a responsibility to participate in continuous improvement D. Effective use of TQM entails creating a corporate culture bent on continuously improving the performance of every task and every value-chain activity E. Total quality management (TQM) is a philosophy of managing a set of business practices that emphasizes continuous improvement in all phases of operations, 100 percent accuracy in performing tasks, involvement and empowerment of employees at all levels, team-based work design, benchmarking and total customer satisfaction AACSB: 3 Difficulty: Medium Taxonomy: Comprehension Six Sigma Quality Control

C

23. (p. 396) Six Sigma quality control A. Is a strategy-implementer's best, most reliable tool for simultaneously achieving top-notch product quality and low manufacturing costs B. Consists of a disciplined, statistics-based system aimed at producing not more than 2.5 defects per million iterations for a manufacturing or assembly process C. Consists of a disciplined, statistics-based system aimed at producing not more than 3.4 defects per million iterations for any business process D. Consists of a disciplined, statistics-based system aimed at fewer than 5.0 complaints per million customer transactions E. Is a powerful tool for companies whose customers are very picky about product quality and product performance and who can't afford for the product they use to break down and require repairs AACSB: 3 Difficulty: Medium Taxonomy: Knowledge

B

24. (p. 396) Six Sigma processes A. Are based on three principles: (1) all work is a statistically controllable process (2) no well-controlled process allows variability and (3) defect-free work requires tight statistical controls B. Can be used for both improving existing business processes and for developing new processes or products C. Can be used for improving products or business processes but not for developing new products or new processes D. Consists of a disciplined statistics-based system aimed at producing not more than 10 defects per million iterations for a manufacturing or assembly process E. Can be used for developing new products or new business processes but not for improving existing products or business processes

B

25. (p. 397) The statistical thinking underlying Six Sigma is based on the following three principles: A. All activities can be controlled, employee empowerment is the best control tool and 100% control is possible B. All work is a process, all processes have variability and all processes create data that explains variability C. All work activities can be done accurately most of the time, empowered employees are necessary for effective control and good statistical data is an empowered employee's best control tool D. All work is a statistically controllable process 100% control is possible and every well-controlled process is defect-free E. Most business processes are subject to control Six Sigma can totally remove variability in how processes are performed and most defects can be eliminated

D

27. (p. 396) Six Sigma's DMADV process of define, measure, analyze, design and verify is a particularly good vehicle for A. Improving performance when there are small variations in how well an activity is performed if there are wide variations then the Six Sigma DMVSI process has to be used B. Achieving 100% control over how a task is performed and eliminating 100% of the variability in how a task is performed C. Improving performance when there are wide variations in how well an activity is performed D. Developing new processes or products at Six Sigma quality levels E. Improving customer satisfaction whereas Six Sigma DMADV is used to improve manufacturing processes

C

28. (p. 399) The big difference between business process reengineering and continuous improvement programs like TQM or Six Sigma is that A. Reengineering is a tool for installing process organization whereas TQM/Six Sigma concern defect-free production methods and delivering world-class customer service B. Reengineering helps create core competencies whereas TQM/Six Sigma are tools for making a core competence stronger and more efficient C. Reengineering is a tool for achieving one-time quantum improvement whereas TQM and Six Sigma programs aim at incremental improvement (striving for inch-by-inch gains again and again in a never-ending stream) D. Business process reengineering requires benchmarking whereas TQM and Six Sigma do not E. Reengineering represents an effort to totally revamp a firm's value chain whereas TQM looks at incrementally improving the performance of two or three targeted value-chain activities and Six Sigma is primarily for reducing manufacturing defects AACSB: 3 Difficulty: Medium Taxonomy: Comprehension

A

29. (p. 400) To obtain maximum benefits from benchmarking, best practices, reengineering, TQM and Six Sigma programs aimed at facilitating better strategy execution, managers need to A. Start with a clear idea of what specific outcomes really matter (whether it be a Six Sigma or lower defect rate, on-time delivery, faster cycle time, superior customer satisfaction, lower costs or whatever) then they have to build a total quality culture that is genuinely committed to achieving these outcomes B. Have annual contests to see which part of the company is making the greatest strides in approaching operating excellence C. Strive for 100% control over the variability in how each and every value chain activity is performed D. Have at least 50% of company personnel earn "green belts" in Six Sigma techniques E. Build core competencies in TQM Six Sigma, benchmarking, best practices adoption and business process reengineering

C

3. (p. 394) The backbone of identifying, studying and implementing best practices is A. Business process reengineering B. A corporate culture that has a core value of operating excellence C. Benchmarking D. Six Sigma quality control techniques E. Innovative application of TQM techniques AACSB: 3 Difficulty: Medium Taxonomy: Knowledge

A

30. (p. 400) To build a total quality culture and achieve full value from the use of TQM or Six Sigma initiatives, managers can take such action steps as A. Signaling unequivocal and unyielding commitment to total quality and operating excellence setting measurable objectives for quality and continuous improvement, screening out job applicants who don't have the right aptitudes or attitudes for quality-based performance, instituting employee training programs and using online systems to give employees immediate access to best practice information and experiences B. Requiring all company personnel to attend Six Sigma training programs and achieve "black belt" status C. Instituting greater centralization of decision-making to help enforce strict compliance with quality control policies and procedures D. Stressing 100% accurate individual performance rather than group or team performance E. Dismissing employees who repeatedly fail to achieve 100% accuracy in their work after a 12-month trial period

B

31. (p. 402) Installing well-conceived state-of-the-art support systems are an important managerial component of implementing and executing strategy because A. Such systems are essential to being able to engage in effective benchmarking and continuous improvement B. Such support systems not only enable better strategy execution but also strengthen organizational capabilities (perhaps enough to provide a competitive edge over rivals) C. They help managers run a tight ship and preserve strong, centralized control over internal activities D. They are the basis for revamping value chains, boosting labor productivity and reducing operating costs E. Decentralized decision-making and employee empowerment cannot work well without having well-conceived information and operating systems to accurately benchmark internally-performed value chain activities against best-in-industry and best-in-class performers AACSB: 3 Difficulty: Hard Taxonomy: Comprehension

B

32. (p. 402) Well conceived, state-of-the-art information and operating systems A. Are essential because business process reengineering efforts, TQM, Six Sigma and benchmarking programs can't be carried out effectively without them B. Not only enable better strategy execution but also strengthen organizational capabilities (perhaps enough to provide a competitive edge over rivals) C. Make it simple and easy to spot cost overruns and inefficiencies D. Are valuable tools for shortening a company's value chain, boosting work force morale and productivity and simplifying the task of adopting best practices E. All of these AACSB: 3 Difficulty: Hard Taxonomy: Comprehension

E

33. (p. 403) From a strategy-implementing/strategy-executing perspective, which one of the following is not a benefit of installing well conceived state-of-the-art information and operating systems? A. Helping mobilize information and use knowledge effectively B. Speeding decision-making and shortening organizational response times C. Strengthening organizational capabilities D. Better enabling company managers to stay on top of implementation initiatives and daily operations and to intervene if things seem to be drifting off course E. Providing the data for undertaking benchmarking, TQM and Six Sigma quality control AACSB: 3 Difficulty: Medium Taxonomy: Comprehension Tying Rewards and Incentives to Good Strategy Execution

B

34. (p. 404) Management's most powerful tool for mobilizing employee commitment to competent strategy execution and operating excellence is A. Diligent and persistent use of benchmarking and best practices B. Proper use of incentives and rewards C. TQM and/or Six Sigma programs D. Periodic inspirational speeches aimed at arousing employees' emotional energy E. Providing employees with a high degree of job security (ideally, via a no-layoff policy) AACSB: 3 Difficulty: Easy Taxonomy: Comprehension

C

35. (p. 404) The strategic role of a company's reward system is to A. Compensate employees for performing their assigned duties in a diligent fashion B. Boost employee morale in ways that create widespread job satisfaction C. Enlist employees' energetic commitment to competent strategy execution and operating excellence by rewarding them, both monetarily and non-monetarily, for their contributions D. Relieve managers of the burden of closely monitoring each employee's performance E. Boost labor productivity and help lower the firm's overall labor costs AACSB: 3 Difficulty: Medium Taxonomy: Comprehension

C

36. (p. 404) Enlisting employees' sustained and energetic commitment to good strategy execution and achievement of the targeted strategic and financial objectives is best done by A. Having top executives commit to making employees the company's most valuable competitive asset B. Developing core competencies in the use of TQM, Six Sigma programs and business process reengineering C. Resourceful and effective use of motivational incentives, both monetary and non-monetary D. Clever and innovative use of benchmarking and best practices E. Providing employees with a high degree of job security and attractive perks AACSB: 3 Difficulty: Medium Taxonomy: Comprehension

E

37. (p. 405) In trying to gain employees' wholehearted commitment to good strategy execution and operating excellence, managers are well advised to use such incentives as A. Base pay increases and performance bonuses B. Frequent words of praise, special recognition at company gatherings, stimulating assignments and opportunities to transfer to attractive locations C. More (or less) job security D. Opportunities for rapid promotion (or the risk of being sidelined) E. All of these AACSB: 3 Difficulty: Easy Taxonomy: Comprehension

A

38. (p. 405) Which one of the following is not likely to be effective in trying to gain employees' wholehearted commitment to good strategy execution and operating excellence? A. Aggressive management efforts to eliminate stress, anxiety and job insecurity from the work environment B. Extensive use of such nonmonetary carrot-and-stick incentives as frequent words of praise (or constructive criticism), special recognition at company gatherings and being given stimulating assignments C. Base pay increases, more (or less) job security and opportunities for high-performing employees to transfer to attractive locations D. Opportunities for rapid promotion (or the risk of being sidelined in a routine or dead-end job) E. Performance bonuses AACSB: 3 Difficulty: Easy Taxonomy: Comprehension

A

39. (p. 405) Which one of the following is likely to be the least effective way of gaining employees' wholehearted commitment to good strategy execution and operating excellence? A. Regular across-the-board pay increases for all employees B. Such non-monetary incentives as frequent words of praise, special recognition at company gatherings, stimulating assignments and increased opportunities for high-performing employees to transfer to attractive locations C. Performance bonuses D. Opportunities for rapid promotion for high-performing employees (or, in the case of underperforming employees, the risk of being sidelined or fired) E. Profit-sharing plans and stock option awards AACSB: 3 Difficulty: Medium Taxonomy: Comprehension

C

4. (p. 390) New strategies often entail budget reallocations because A. Revamping the performance of value chain activities can be costly B. The accompanying policy revisions and compensation incentives tend to require different levels of funding than before C. Units important in the prior strategy but having a lesser role in the new strategy may need downsizing while units and activities that now have a bigger and more critical strategic role may need more people, new equipment, additional facilities and above-average increases in their operating budgets D. Empowering employees to carry out the new strategy elements and shifting to a total quality management type of culture to build skills in competent strategy execution typically require substantial new funding and budget revisions E. Adopting best practices and pushing for continuous improvement tends to reduce costs and reduce overall resource requirements AACSB: 3 Difficulty: Medium Taxonomy: Comprehension

B

40. (p. 408) Which of the following motivational practices is least likely to be effective in spurring stronger employee commitment to good strategy execution? A. Stating the strategic vision in inspirational terms that make employees feel they are a part of doing something worthwhile in a larger social sense B. Setting performance targets that are relatively easy for employees to achieve and thereby making it relatively easy for all employees to get sizable performance bonuses C. Making sure that the ideas and suggestions of employees are valued and that those with merit are promptly acted on D. Creating a "family" work atmosphere where there is genuine sincerity, caring and mutual respect among workers and between management and employees E. Having knockout facilities and providing attractive perks and fringe benefits AACSB: 3 Difficulty: Medium Taxonomy: Comprehension Striking the Right Balance between Rewards and Punishment

C

41. (p. 408) A motivation and incentive system that is aimed at spurring stronger employee commitment to good strategy execution A. Must aim at creating a no-pressure/no-adverse-consequences work environment B. Should be tied first and foremost to whether employees satisfactorily perform their assigned duties in an ethical and honorable manner C. Mustgenerouslyreward and recognize individuals and groups who meet or beat performance targets and deny rewards and recognition to those who don't D. Needs to put top priority on making employees happy and secure in their jobs E. Must avoid the potential for negative consequences if performance is subpar AACSB: 3 Difficulty: Medium Taxonomy: Comprehension

C

42. (p. 408) From the standpoint of promoting successful strategy execution, it is important that the firm's motivation and reward system A. Be completely free of such elements as tension, pressure, anxiety, job insecurity and tight deadlines—a no-pressure/no-adverse-consequences work environment is essential B. Emphasize only positive types of rewards C. Accentuate positive rewards but also carry the risk of punishment for poor performance D. Not deny rewards to employees who put forth good effort and try hard E. Reduce job insecurity and give employees an incentive to stay busy and work hard AACSB: 3 Difficulty: Medium Taxonomy: Comprehension

E

43. (p. 407 - 408) A reward system that accentuates positive rewards for good performance A. Works best in strong culture organizations, while negative motivational approaches and reward systems tend to be most successful in weak culture organizations B. Is especially effective in aligning the well-being of organizational members with achieving the company's performance targets reward systems with negative elements tend to be very dysfunctional in motivating employees C. Seldom works very well because the threat of denying rewards to sub-par performers is typically the most powerful motivator D. Works fine so long as 100% emphasis is placed on monetary incentives E. Has considerable appeal because when cooperation is positively enlisted and rewarded rather than strong-armed by orders and threats (implicit or explicit), people tend to respond with more enthusiasm, dedication, creativity and initiative

B

44. (p. 408) Motivational and incentive compensation practices that aim at winning the commitment of company personnel to good strategy execution typically A. Use only positive rewards and never involve the use of tension, fear, job insecurity, stress or anxiety B. Strike a middle ground—entailing decidedly positive rewards for meeting or beating performance targets but also imposing sufficiently negative consequences (if only withholding rewards) when actual performance falls short of the target (but the negative consequences of underachievement should not be so severe or demoralizing as to impede a renewed and determined effort to overcome existing obstacles and hit the targets in upcoming periods) C. Aim at creating a no-pressure/no-adverse-consequences work environment D. Entail paying the highest wages and salaries in the industry and also stressing non-monetary rewards for high-performing employees E. Put top priority on making employees happy and secure in their jobs AACSB: 3 Difficulty: Medium Taxonomy: Comprehension Linking the Reward System to Strategically relevant Performance Outcomes

C

45. (p. 408) The most dependable way to keep people focused on strategy execution and the achievement of performance targets is to A. Establish ethical compensation policies and convince employees that they are the firm's most valuable competitive asset B. Design monetary and non-monetary incentives that boost labor productivity and help lower the firm's overall labor costs C. Generously reward and recognize people who meet or beat performance targets and to deny rewards and recognition to those who don't—the underlying principle must be to reward people for accomplishing results, not for just dutifully performing assigned tasks D. Pay employees a bonus for each strategic and financial objective that the company achieves E. Allow employees to propose what rewards they would like to receive to achieve the company's stretch objectives AACSB: 3 Difficulty: Medium Taxonomy: Comprehension

A

46. (p. 408 - 409) A well-designed reward system A. Is focused on "what to achieve" (the specified performance targets) in order to be rewarded and recognized and is not focused on "what to do." B. Should be free of elements that induce stress, anxiety, tension, pressure to perform and job insecurity C. Puts the primary emphasis on denying rewards to those who fail to perform tasks in the prescribed fashion D. Emphasizes weeding out employees who are consistently low performers E. Strives for 50-50 balance between positive and negative rewards and 50-50 balance between monetary and non-monetary rewards AACSB: 3 Difficulty: Medium Taxonomy: Comprehension

E

47. (p. 411) An important consideration in designing a strategy-supportive reward system is to A. Link the payment of all monetary rewards to the company's profitability B. Employ incentives that will help motivate employees to work hard at performing their assigned duties and activities C. Choose those types of rewards and incentives that will focus employees' attention on "what to do." D. Make across-the-board wage and salary increases the cornerstone of monetary rewards E. Make non-monetary rewards and recognition an integral part of the reward system AACSB: 3 Difficulty: Medium Taxonomy: Comprehension

C

48. (p. 410) To win strong employee commitment to competent strategy execution, management A. Has to have a 50-50 balance between monetary and non-monetary rewards and tie bonuses and incentives more to group performance than individual performance B. Must allow employees to participate in setting the setting key performance targets, in designing the nature and types of incentives and in establishing core values and beliefs C. Must use incentives and rewards in ways that align the well-being of organization members with their contributions to competent strategy execution and the achievement of performance targets D. Should generally emphasize empowering employees, establishing an employee-centered corporate culture and basing bonuses and incentives more on individual performance than on group performance E. Has to create an inspiring strategic vision, effectively communicate it to employees and then reward company personnel for exhibiting dedicated effort in trying to make the vision a reality AACSB: 3 Difficulty: Hard Taxonomy: Comprehension

D

49. (p. 408) Management's most powerful tool for winning employee commitment to good strategy execution and operating excellence is A. The establishment of strategy-supportive policies and procedures B. Empowering employees and encouraging them to adopt best practices C. Setting stretch objectives D. A system of rewards and incentives tied tightly to the achievement of the targeted strategic and financial performance E. Aggressive use of TQM and Six Sigma quality control programs AACSB: 3 Difficulty: Medium Taxonomy: Comprehension

B

5. (p. 390) Visible actions to reallocate operating funds and move people into different organizational units A. Can be dysfunctional in trying to implement a new strategy because of the anxiety and insecurity that big changes in budgets cause among company personnel B. Signal a determined commitment to strategic change and can help catalyze and give credibility to the implementation process C. Run the risk of inadvertently creating barriers to building the needed competencies and capabilities D. Tend to impede the task of empowering employees and shifting to new, more strategy-supportive culture E. Are rarely necessary in implementing a new strategy unless the new strategy entails a radically different set of value chain activities AACSB: 3 Difficulty: Medium Taxonomy: Comprehension Instituting Policies and Procedures that Facilitate Strategy Execution

A

50. (p. 410) The guidelines for designing an incentive compensation system that will help drive successful strategy execution include A. Making the payoff for meeting or beating performance targets a major, not minor, piece of the total compensation package B. Having a bonus and incentive plan that applies to managers only (employees should generally not be included in incentive pay plans but should have attractive wages and salaries) C. Having an outside wage and salary expert administer the system, so that there is no doubt as to its fairness and impartiality D. Basing the incentives on group performance rather than individual performance E. Making minimal use of non-monetary incentives and rewarding people for diligently performing their assigned duties AACSB: 3 Difficulty: Medium Taxonomy: Comprehension

D

51. (p. 410 - 411) Which of the following is not a sound guideline for designing a reward and incentive system that helps promote good strategy execution? A. The reward system must be administered with scrupulous objectivity and fairness B. The payoff for meeting or beating performance targets must be a major, not minor, piece of the total compensation package C. The incentive plan should extend to all managers and all employees, not just top management D. Ways must be found to reward deserving non-performers who, for some reason, do not fare well under the incentive system E. Make sure that the performance targets each individual or team is expected to achieve involve outcomes that the individual or team can personally affect AACSB: 3 Difficulty: Medium Taxonomy: Comprehension

E

52. (p. 410 - 411) Which of the following is not characteristic of a compensation and reward system designed to help drive successful strategy execution? A. Tying incentives to performance outcomes directly linked to good strategy execution and financial performance B. Keeping the time between achieving the target performance outcome and the payment of the reward as short as possible C. Making sure that the performance targets that each individual or team is expected to achieve involve outcomes that the individual or team can personally affect D. Generous rewards for people who turn in outstanding performances E. A reward system that involves 50 percent non-monetary rewards and a work environment that avoids placing pressure on managers and employees to perform at high levels AACSB: 3 Difficulty: Easy Taxonomy: Comprehension

A

53. (p. 411) Some caution needs to be exercised in using performance-based compensation systems in multinational enterprises because A. In some countries, incentive compensation runs counter to local customs and cultural norms B. Managers and employees in some countries are not psychologically and emotionally strong enough to cope with performance-based pay systems C. If performance-based pay exceeds 5 percent of total compensation, the result can be a serious decline in employee morale in those countries where pay scales are low D. Too much emphasis on pay-for-performance tends to have a negative impact on employee productivity E. It detracts from having employees focus diligently on the duties and functions they are supposed to perform

D

6. (p. 391 - 392) Prescribing new policies and operating procedures can aid the task of implementing strategy A. Provided they promote greater use of and commitment to best practices and total quality management B. Because really effective internal policies and procedures are not easily duplicated by other firms C. Because astutely conceived policies or procedures can result in competitive advantage D. By helping align the actions and behavior company personnel with the requirements for good strategy execution, placing limits on independent action, helping overcome resistance to change, helping enforce consistency in how things are done in scattered geographic units and promoting the creation of a work climate that facilitates good strategy execution E. By making it easier to impose tight budget controls and avoid wasting scarce resources AACSB: 3 Difficulty: Medium Taxonomy: Comprehension

E

8. (p. 391) Prescribing policies and operating procedures aids the task of implementing strategy by A. Helping ensure that worker eligibility for incentive bonuses is measured consistently and awarded fairly B. Fostering the use of best practices, TQM, Six Sigma and continuous improvement efforts C. Acting as a powerful lever for changing employee attitudes about the need for a different incentive and reward system D. Helping build employee commitment to strengthening the company's core competencies and competitive capabilities E. By placing limits on independent action and painting new white lines to steer the actions and behavior of company personnel in a manner that is more conducive to good strategy execution and operating excellence AACSB: 3 Difficulty: Medium Taxonomy: Comprehension

D

9. (p. 391 - 393) Which one of the following is not a benefit of prescribing policies and operating procedures to aid management's task of implementing strategy? A. Painting a set of white lines that places limits on independent behavior and channels individual and group efforts along a path more conducive to executing the strategy B. Providing top-down guidance to operating managers, supervisory personnel and employees regarding how things need to be done and what behavior is expected C. Promoting the creation of a work climate that facilitates good strategy execution D. Helping build employee commitment to adopting best practices and using the tools of TQM and Six Sigma E. Helping enforce consistency in how particular activities are performed in geographically scattered organization units AACSB: 3 Difficulty: Medium Taxonomy: Comprehension Adopting Best Practices and Striving for Continuous Improvement