MGT 4150 Final Review Chapters 8-12
Leading the drive for good strategy execution and operating excellence calls upon the manager-in-charge to
Practice MBWA, put construction pressure on the organization to achieve good results and operating excellence, and push corrective actions to improve strategy execution and achieve the targeted results
Which one of the following is not part of the leadership task of putting constructive pressure on the organization to achieve good results and operating excellence?
Providing employees with a stream of suggestions for improving company operations and eliminating negative or punitive elements from the company's reward system
Business process reengineering involves
Radically redesigning and streamlining how an activity is performed, with the intent of achieving quantum improvements in performance
The advantages of a centralized organization structure include
Reduced potential for conflicting actions and decisions on the part of lower-level managers , facilitation of strong top management leadership in crisis situations, and tight control by the manager in charge--it is easy to know who is accountable when things do not go well
Based on the information in Table 10.1, which of the following is NOT a chief advantage of a decentralized organizational structure?
Reduced risk of "bad" decisions, owing to holding empowered employees accountable for the actions they take
The chief advantages of a decentralized organizational structure include
Reducing the layers of management and encouraging lower-level managers and rank-and-file employees to exercise initiative and act responsibly
The process of building capabilities internally
Requires first developing the ability to do something, however imperfectly or inefficiently; second, translating this ability into a tried-and-true competence and/or capability by learning to do the activity consistently well and at an acceptable cost; and then continuing to polish, refine, and sharpen their performance of the competence or capability, striving not just for ongoing improvements but, ultimately, for best-in-industry or best-in-world proficiency
As shown in Figure 10.3, organizing a company's work effort in ways that promote successful strategy execution does NOT include which one of the following?
Revamping and streamlining the performance of value chain activities in ways that lower operating costs
Six Sigma programs
are based on three principles: all work is a process, all processes have variability, and all processes create data that explains variability
A company's values statement and code of ethics
have a major culture-building influence because they communicate what actions and behavior are expected of all company personnel
An effectively designed system of rewards and incentives
is management's single most powerful tool for mobilizing employee commitment to good strategy execution and operating excellence
Which of the following is NOT among the good business reasons why a company should be public-spirited and devote time and resources to social responsibility initiatives, environmental sustainability, and being good corporate citizens?
A business is obligated to act as a responsible citizen and do its fair share to promote the general welfare; otherwise it is in violation of its implied contract with society and subject to both heavy fines and an excess profits tax
The difference between a "cash-cow" business and a "cash hog" business is that
A cash cow business produces internal cash flows over and above what is needed to fund operations and capital investment whereas the internal cash flows of a cash hog business are too small to fully fund its operating needs and capital requirement
Which of the following is NOT an aspect of socially responsible behavior and good corporate citizenship?
Actions to establish and generously fund nonprofit subsidiaries charged with furthering worthy social causes
Economies of scope
Are cost reductions that flow from operating in multiple businesses
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 ethical norms take precedence over local ethical norms
Which one of the following statements about why instituting policies and procedures that facilitate good strategy implementation and execution is an important managerial task is false?
Astutely conceived policies and procedures help promote faster development of the right kinds of core competencies and competitive capabilities
Which of the following is NOT a good strategic reason why a company that is already diversified may choose to broaden its business base by building positions in new related or unrelated businesses?
Because the company has an imbalance of cash cow and cash hog businesses
Which one of the following is a tool that company managers can use to promote operating excellence in performing value chain activities?
Business process reengineering
The big difference between business process reengineering and continuous improvement programs like TQM or Six Sigma is that
Business process reengineering is a tool for achieving one-time quantum improvement whereas TQM and Six Sigma programs aim at ongoing incremental improvements
Which of the following is NOT an example of an unhealthy company culture that impedes good strategy execution?
Centralized, conservative cultures
Which of the following is not part of the procedure for evaluating pluses and minuses of a diversified company's strategy and deciding what actions to take to improve the company's performance?
Check whether the company has sufficient corporate parenting capabilities to cope with resource fit conflicts and strategic fit incompatibilities among the businesses the company has diversified into
Which of the following statements about company subcultures is inaccurate?
Companies that have instituted a values statement and a code of ethics very rarely have subcultures
The two biggest drawbacks or disadvantages of pursuing unrelated diversification strategies are
Demanding managerial requirements and no potential for competitive advantage beyond any benefits of corporate parenting and what each individual business can generate on its own
Which one of the following statements about the process of developing and strengthening execution-critical resources and capabilities is false?
Developing and strengthening the company's portfolio of resources and capabilities is high among the organization-building priorities when a company considers what needs to be done to execute its strategy with a high degree of proficiency
To create long-term economic value for shareholders by diversifying into one or more new businesses, a company must
Diversify into businesses that pass the industry attractiveness test, the cost-of-entry test, and the better-off test
The categories of managerial morality include:
Moral managers, immoral managers, and amoral managers
In a strong culture company,
Culturally approved behavior and ways of doing things flourish, while culturally disapproved behaviors and work practices get squashed
Which one of the following statements about a company's culture is false?
A company's culture, once established, tends to remain stable and entrenched over time
Which one of the following is NOT a typical characteristic of a weak company culture?
A complicated value chain and a very diverse set of core competencies--both of which act to create multiple subcultures
The three components of building an organization capable of good strategy execution are
(1) staffing the organization, (2) acquiring, developing, and strengthening the resources and capabilities important to good strategy execution, and (3) structuring the organization and work effort as shown in Figure 10.2
Which one of the following is NOT an accurate characterization of a centralized organizational structure?
(maybe) Because frontline company personnel have neither the time nor the inclination to direct and properly control the work they are performing and also lack the knowledge and judgement to make wise decisions about how best to do it, there is a distinct need for managerially prescribed policies and procedures for a wide range of activities, close supervision, and tight control by top executives
Which of the following is the best example of unrelated diversification?
A maker of camera-equipped copter drones acquiring a maker of athletic footwear
Which of the following is the best example of related diversification?
A producer of golf clubs and golf bags acquiring a maker of golf shoes and apparel
Which of the following are major drivers of unethical managerial behavior?
A company cultures that puts profitability and good business performance ahead of ethical behavior, overzealous pursuit of wealth and other selfish interests, and heavy pressures on company managers to meet or beat performance targets
Which of the following statements about why corporate cultures matter to the strategy execution process is false?
A weak culture is a powerful and valuable managerial ally in quickly and smoothly achieving good strategy execution because there are no deeply engrained beliefs, values, peer pressures, or behavior norms that management has to overcome or change in trying to mobilize enthusiastic employee commitment to instituting whatever internal changes may be needed to implement/execute the chosen strategy
The task of top executives in making corrective adjustments includes
Accurate analysis of the circumstances causing unacceptable performance, deciding when corrective adjustments are needed and what adjustments to make, and good implementation of the corrective actions that are initiated
A multinational company operating in some countries where bribery and kickback payments are an entrenched local custom and are not considered unethical is well-advised to
Avoid the payment of bribes and kickbacks in all countries and in all circumstances if the payment of bribes and kickbacks is forbidden in its code of ethical conduct and if top management is serious about enforcing this prohibition
Which one of the following is a way to reduce costs and strive to achieve a competitive advantage based on lower overall costs per pair sold than rival companies?
Avoiding bidding for endorsement contracts with celebrities--celebrity endorsement contracts always raise per pair costs
From the standpoint of promoting successful strategy execution, it is important that the firm's motivation and reward system
Be based on accomplishing the right results, not on dutifully performing assigned tasks
Which of the following motivational practices in LEAST likely to be effective in spurring stronger employee commitment to the strategy execution process?
Creating a no-pressure/no-adverse-consequences work environment and setting performance targets that are relatively easy for employees to achieve
Which of the following is NOT something that corporate executives committed to a strategy of unrelated diversification can do to aid efforts to achieve companywide financial results above and beyond what the individual businesses could achieve as stand-alone entities?
Be shrewd in identifying opportunities to acquire businesses that possess exceptionally good resource fits and/or that can significantly boost sales and market share by incorporating use of the parent company's technological expertise
Making provisions for coordination of internal organizational units is an important part of organizing the work effort because
Close cross-unit collaboration is usually needed to build core competencies and competitive capabilities--examples include such strategically important activities as speeding new products to market and providing superior customer service that involve the efforts of company personnel in different departments and organizational units
The school of ethical universalism holds that
Common moral agreement about right and wrong actions and behaviors across multiple cultures and countries gives rise to universal ethical standards
Which one of the following is not a characteristic of an adaptive culture?
Company personnel are strongly attached to traditional policies, procedures, operating methods, and ways of doing things, but are generally quite willing to shift to different strategies in order to go on the offensive to outcompete key rivals
Delegating greater authority to subordinate managers and employees
Creates a more horizontal organization structure with fewer management layers and usually acts to shorten organizational response times
Which of the following are standout traits of a high performance culture?
Emphasis on individual initiative and creativity and a pervasive results-oriented work climate
Which one of the following is NOT one of the steps company managers should take when trying to fix a problem culture?
Employing visible, forceful actions--both substantive and symbolic--to ingrain a new set of behaviors, operating practices, and cultural norms
From a strategy-implementing/strategy-executing perspective, which one of the following is not a typical and important benefit of systems that provide real-time information and performance tracking?
Enabling managers in companies with many empowered employees and work teams, to determine whether the actions and decisions of empowered personnel are producing acceptable operating outcomes
Successfully leading the effort to nurture a high-achieving, results-producing culture and put constructive pressure on the organization to achieve good results and operating excellence
Entails such actions as treating employees as valued partners contributors in organizational efforts to achieve good strategy execution, using empowerment to help create a fully engaged workforce, setting stretch objectives, and using the tools of benchmarking, best practices, business process reengineering, TQM, and Six Sigma to focus attention on internal operating improvements
Which of the following statements about steering needed resources to execution-critical value chain activities is false?
Good execution of a new or revised strategy often requires devoting more resources to some value chain activities and perhaps downsizing the operating budgets and resources devoted to activities/organizational units with a lesser role in the new strategy
Which one of the following is not a benefit of prescribing policies and operating procedures to aid management's task of implementing and executing strategy?
Helping build employee commitment to adopting best practices and using the tools of TQM, Six Sigma, and business process reengineering to improve the performance of value chain activities
Which one of the following statements about a high performance culture is false?
High performance cultures exhibit a strong preference for employing strategies that are likely to result in big profit increases, thereby enabling most company personnel to qualify for generous bonuses
Which one of the following is a way to improve the S/Q rating of branded pairs produced at a particular production facility?
Increasing per model expenditures for enhanced styling/features
Which of the following is not a recommended guideline for designing an effective incentive compensation system?
Making generous across-the-board wage and salary increases for all company personnel the cornerstone of monetary rewards and having a reward system that consists of at least 50 percent non-monetary rewards and incentives
Business process reengineering is a tool for
Radically redesigning and streamlining how an activity is performed, with the intent of achieving quantum improvements in performance
Which of the following is most integral to the task of leading the drive for good strategy execution and operating excellence?
Staying on top of how well things are going, putting constructive pressure on the organization to achieve good results, and pushing corrective actions to improve strategy execution and achieve the targeted results
Which one one of the following is NOT one of the major drivers of unethical managerial behavior?
Strong motivation
Which one of the following statements about total quality management (TQM) is false?
TQM produces significant results very quickly--very few additional benefits emerge after the first six months
The character of a company's corporate culture is NOT shaped by which of the following
The approaches to competing successfully that underpin the company's strategy
Which of the following statements about a strong-culture company is false?
The hallmarks of a strong-culture company are centralized decision-making, strict enforcement of company policies, and dedicated pursuit of a bold strategic intent
Which one of the following is not a typical characteristic of a weak company culture?
The relative ease with which management can rally company personnel to exert their best efforts to attain execution-critical performance targets (because there are no strong "how we do things around here" culture barriers to overcome
Which of the following is NOT a tool that company managers can use to promote operating excellence in performing value chain activities?
Total value chain excellence programs
Which one of the following statements about Six Sigma programs is false?
When performance of an activity or process reaches "Six Sigma quality," there are not more than ten defects/errors per million iterations
Good strategy execution requires that
a company's expenditures for operations and capital improvements be both strategy-driven (to in order to amply fund competent performance of strategy-critical value chain activities) and lean (in order to operate cost efficiently)
Which of the following is NOT an example of an unhealthy company culture
A slowly evolving culture
The Time Series Competitive Efforts section of the CIR which provides every company's management team with a means of reviewing how the regional competitive efforts of any company of interest have changed over the years is particularly useful for
Drawing conclusions about what level of competitive effort your company's two closest competitors may employ in the upcoming year and then determining what levels of competitive effort your company may need to employ on these same or other competitively relevant factors to successfully outmaneuver and outperform one or both of them
To create a system of rewards and incentives that promotes good strategy execution and timely achievement of important outcomes, a company must
Emphasize rewarding people for accomplishing results, not for just dutifully performing assigned tasks
Which of the following characterizes a company with a politicized culture?
Empire-building managers who jealously guard their decision-making prerogatives
Checking a diversified company's business portfolio for the competitive advantage potential of cross-business strategic fits does not involve determining whether sister business units have value chain match-ups that offer opportunities to
Employ the same basic competitive approach and pursue the same type of competitive advantage
Diversification merits strong consideration whenever a single-business company
Encounters worsening industry conditions that are expected to be long-lasting and adversely impair its financial performance
The top-level executive task of crafting a diversified company's overall or corporate strategy includes which one of the following?
Evaluating the growth and profitability aspects for each business and then investing aggressively in the most promising businesses with the best prospects, investing cautiously in businesses with just average prospects, and divesting businesses with unacceptable prospects
Which one of the following statements is INCORRECT as concerns the managerial task of executing strategy?
Executing strategy is primarily the function of the company's chief executive officer and other senior-level managers--it is their responsibility to see that strategy is executed successfully and their job to decide how to proceed and to personally supervise the details of the strategy execution process
Which one of the following actions does NOT results in higher levels of worker productivity in producing footwear?
Expenditures for TQM/Six Sigma programs
Strategic fit between two or more businesses exists when one or more activities comprising the value chains of different businesses are sufficiently similar to present opportunities
For cross-business use of a well-known and potent brand name and/or cross-business collaboration to build new or stronger competitively valuable resources and capabilities
If a company invests in production improvement Option D that will boost labor productivity by 50%, while its annual depreciation costs will rise by an amount equal to 10% of the investment costs associated with installing Option D, it is accurate to say that its labor costs per pair produced will decline
From $5.00 a pair to $3.33 for a production facility in the Asia-Pacific that currently has labor productivity of 3,600 pairs per worker and total regular compensation (which does not include overtime pay) of $18,000 annually
The nine-cell attractiveness strength matrix provides strong logic for
Fully funding the resources needs of competitively strong businesses in attractive industries, investing selectively in businesses with intermediate positions on the grid, and getting rid of competitively weak businesses in unattractive industries unless they either generate sizable cash flows that the corporation can usefully deploy elsewhere or have important strategic value despite their competitive weakness
Which one of the following is NOT a reason why companies might use outsourcing to improve performance of strategy-critical activities?
Greater flexibility in introducing new and improved products, lower payroll costs (because the company has fewer employees), greater ability to centralize decision-making, and increased ability to make strategy-critical activities the main building blocks in the company's organizational structure
Once a company has diversified into a collection of related or unrelated businesses and concludes that some strategy adjustments are needed, which one of the following is NOT one of the main strategy options that a company can pursue?
Have all of the company's businesses operate under a common brand name and craft new initiatives to build/enhance the reputation of this brand name worldwide
Outsourcing the performance of certain value chain activities can lead to such strategy-executing advantages as
Heightened strategic focus, lower costs, less internal bureaucracy, a better arsenal of competencies and capabilities, and speedier decision-making
Management's handling of the process of implementing and executing a company's strategy can be considered successful
If a company is meeting or beating its performance targets and has attained real proficiency in how strategy-critical value chain activities are performed
According to the ethical relativism school of thought
If the use of underage labor is acceptable in a particular culture/society/country, then it is ethical for a company to use underage labor in conducting its business activities in that culture/society/country
Which of the following is NOT among the principal managerial components of the strategy execution process?
Installing information and operating systems that enable company personnel to carry out their strategic roles proficiently
A strategy of diversifying into unrelated businesses
Involves entering any industry and operating any business where senior managers see opportunity to realize consistently good financial results--theres no deliberate effort to diversify only into businesses with strategic fit
A "best practice"
Is a method or technique employed by at least one enterprise and shown to be unusually effective in lowering costs, improving quality or performance, shortening time requirements, enhancing safety, or achieving one or more other highly positive operating outcomes
Diversifying into related businesses where competitively valuable strategic fit benefits can be captured and turned into a competitive advantage over business rivals whose operations do not offer comparable strategic-fit benefits
Is what fuels 1+1=3 gains in shareholder value--the necessary outcome for satisfying the better-off test and proving the business merit of a company's diversification effort
Which of the following statements regarding the importance of making strategy-critical value chain activities the main building blocks of the organizational structure is false?
It is generally agreed that the best organizational structure for a company depends on which one of the five generic competitive strategies the company has opted to purse--in other words, the major building blocks of the best organizational structure for a low-cost provider strategy differ from those for a broad differentiation strategy and differs yet again for focused low-cost, focused differentiation, and best-cost provider strategies
When it comes to the practice of some businesses paying bribes and kickbacks to secure government contracts, obtain a license or permit from government agencies, or win/retain the business of customers, it is fair to say that
It is very difficult (and logically inconsistent) for a multinational company to ethically justify such payments in countries where bribes and kickbacks are common practice when it does business in countries where such payments are illegal and/or when the company's code of ethics forbids such payments
A company's environmental sustainability strategy concerns
Its deliberate actions to protect the environment, provide for the longevity of natural resources, maintain ecological support systems for future generations, and guard against ultimate endangerment of the planet
If a company presently has a B+ credit rating, which one of the following will NOT contribute to a higher credit rating?
Larger retained earnings
Deliberate efforts to perpetuate a company's culture usually do NOT include which one of the following?
Maintaining a consistent strategy time
In organizing the work effort and creating an organization structure that promotes successful strategy execution, management needs to
Make internally-performed strategy-critical activities the main building blocks in the organization structure, decide how much authority to centralize at the top and how much to delegate to down-the-line managers and employees, and make sure the efforts of different organizational units are well-coordinated
Which of the following statements about total quality management (TQM) is true?
Management's job in instituting a TQM program is to kindle an organization wide search for ways to improve that involves all company personnel exercising initiative and using their ingenuity
Which of the following statements about creating dynamic and competitively valuable competencies and capabilities is false?
Most companies keep their portfolio of competencies and capabilities fresh and dynamic by either acquiring another company with recently remodeled resources and capabilities or by entering into collaborative partnerships with suppliers that are highly regarded for their innovativeness and cutting-edge know-how
Which of the following is NOT a particular sound or valid reason why deliberate pursuit of unethical strategies and tolerance of unethical conduct is a risky practice?
Most consumers are very ethically-aware and will quickly stop purchasing the products of any company that engages in shady behavior
In situations where it is relatively easy for rivals to readily duplicate the successful features of a company's strategy (making it difficult or impossible to outstrategize rivals and beat them in the marketplace with a superior strategy), the chief way for a company to achieve a durable competitive advantage over its rivals is to
Out execute them by building a competitively powerful portfolio of competencies and capabilities that (1) allows the company to perform certain value chain activities in a superior fashion and (2) is time-consuming and expensive for rivals to match or trump
If a management team wishes to boost the company's stock price, then it should consider
Pursuing actions to meet or beat the annual investor-expected EPS targets, raising the company's dividend each year by $0.30 per share or more, and repurchasing shares of common stock
Moral managers
See themselves as stewards of ethical behavior and believe it is important to exercise ethics leadership; they are ethically principled and purse success in business within the confines of both the letter and spirit of what is ethical and legal
According to Figure 12.2, the four steps that company managers need to take in fixing a problem culture does NOT include
Seeking the opinions of experience personnel about what is wrong with the culture, how it should be changed, and who should lead the culture-change process
Calculating quantitative competitive strength ratings for each of a diversified company's business unit involves
Selecting a set of competitive strength measures, weighing the importance of each measure, rating the strength of each of the company's businesses on each strength measure (often using a scale of 1-10), multiplying the strength ratings by the assigned weight to obtain a weighted rating, summing the weighted ratings for each business unit to obtain an overall competitive strength score, and using the overall competitive strength scores to evaluate the competitive strength of the company's business units, both individually and as a group
Calculating quantitative attractiveness ratings for the industries a company has diversified into involves
Selecting a set of industry attractiveness measures, weighing the importance of each measure, rating each industry on each attractiveness measure, multiplying the industry ratings by the assigned weight to obtain a weighted rating, adding the weighted ratings for each industry to obtain an overall industry attractiveness score, and using the overall industry attractiveness scores to evaluate the attractiveness of all the industries, both individually and as a group
The principal managerial components of the strategy execution process do NOT include which one of the following tasks?
Selecting which leadership style to employ and deciding which capabilities and core competencies to emphasize in performing execution-critical value chain activities
The managerial task of installing well-conceived state-of-the-art information and operating systems is important to successful strategy implementation and execution because
Such systems not only enable better strategy execution but also strengthen organizational capabilities--sometimes enough to produce a competitive edge if these systems give a firm capabilities that rivals fail top match or offset
According to the data in Table 9.1,
The Corruption Perception Index (CPI) scores in more than a dozen countries are higher (indicating lower perceived levels of corruption) than in the United States
Business ethics concerns
The application of general ethical principles and standards to the actions and decisions of businesses and the conduct of their personnel
Which one of the following is not a key aspect in defining and shaping the character of a company's corporate culture?
The company's strategic vision and mission and the approach to competing that underpins its strategy
The things to look for in identifying a diversified company's strategy do NOT include which of the following?
The competitive strategy each business is employing to try to build a competitive advantage over rivals
Which of the following statements about benchmarking and best practices is true?
The more that a company's organizational units use best practices in performing their work, the closer the company moves toward performing its value chain activities more effectively and efficiently--this is what progressing toward operational excellence is all about
Which one of the following statements regarding the task of staffing the organization in a manner that facilitates strategy execution is false or inaccurate?
The overriding aim in building a management team should be to replace weak executives who lack strong skills in closely supervising the people who work under them
The thesis that common moral agreement among most all cultures, societies, and religions about what is ethically right and ethically wrong gives rise to ethical standards that apply to members of all societies, all companies, and all business people it is associated with
The school of ethical universalism
According to the school of ethical relativism,
There can be no single set of worldwide ethical standards because what is deemed ethical or unethical depends on the religious beliefs, historic traditions and customs, core values and beliefs, and behavioral norms that prevail in particular cultures and countries
Which of the following is unlikely to be true in a strong culture company?
Top executives are reluctant to change established policies, procedures and work practices or back off strict enforcement of these policies, procedures and work practices (in order to avoid weakening the culture)
Which of the following is NOT accurate as concerns a company's competencies and capabilities?
When a company succeeds in hiring talented employees and training them properly, competencies and capabilities tend to blossom quickly and, once put in place, can last for a decade or more
Which of the following statements about putting together a capable top management team is false?
When a company's existing management team is not up to the task of figuring out what needs to be done and speeding the implementation process to a successful conclusion, the company's management team should always be revamped and strengthened by convincing weak executives to take early retirement and then promoting qualified people from within to take their place
Which of the following statements about Six Sigma programs is false?
When a performance of an activity or process reaches "Six Sigma quality," there are not more than 6.2 defects per million iterations
In which one of the following instances do the industry-low, industry-average, and industry-high values for the benchmarking data on pp. 6-7 of each issue of the FIR signal that one or more elements of a company's costs are likely to be too high relative to those of rival companies?
When the company's operating profit per branded pair sold in the Internet and Wholesale segments are the lowest in the industry in the Asia-Pacific region
Management's handling of the strategy implementation/execution process can be considered successful
if a company meets or beats its performance targets and learns to perform strategy-critical value chain activities with real proficiency
Total quality management (TQM)
is a management approach 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
In situations where rivals can readily copy the successful features of a company's strategy or duplicate its attempts to attract customers, the only dependable path to competitive advantage is for a company to
out execute rivals by developing a collection of resources and capabilities that enables the company to perform certain important value chain activities at lower cost than rivals or win greater effectiveness than rivals (thereby gaining the ability to deliver more value to customers via either a lower price or a more appealing product)
