Chapter 10 (MGT 485)

12. Which one of the following statements about recruiting and retaining capable employees is true? A. The quality of an organization's people is always an essential ingredient of successful strategy execution—knowledgeable, engaged employees are a company's best source of creative ideas for the nuts-and-bolts operating improvements that lead to operating excellence. B. Recruiting and retaining capable employees is an essential element of developing a distinctive competence. C. Recruiting and retaining capable employees is closely tied to developing strong information capital capabilities. D. It is very difficult for a company to competently execute its strategy and achieve operating excellence without a cadre of young managerial talent committed to staying with the company for at least a decade. E. In many industries, adding to a company's talent base and building intellectual capital are more important than having a good situational fit between the company's strategy and its external environment.

A. The quality of an organization's people is always an essential ingredient of successful strategy execution—knowledgeable, engaged employees are a company's best source of creative ideas for the nuts-and-bolts operating improvements that lead to operating excellence.

25. 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. a change in strategy nearly always calls for budget reallocations and resource shifting. B. accurate budgets are the key to exercising tight financial controls over organizational units. 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 fiscal discipline.

A. a change in strategy nearly always calls for budget reallocations and resource shifting.

18. Companies engaged in a single line of business most commonly utilize an organizational structure that can be A. a functional (departmental) organizational structure. B. either a centralized, principal, or critical-path organizational structure. C. either independent, consolidated, or hybrid profit centers. D. hybrid functional organizations with a combination of decentralized and centralized decision making. E. None of these choices is correct.

A. a functional (departmental) organizational structure.

38. 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 percent defect-free levels. C. a system of statistical procedures for achieving 100 percent 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 percent of the variability in how a task is performed.

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.

72. Proficient strategy execution requires executive managers to A. be current with events and closely monitor progress, put constructive pressure on the organization for operating excellence, and initiate corrective action when necessary to improve performance and achieve desired results. B. understand all the tasks required to implement the strategy so as to ensure staff will not shortchange any strategic-critical activity. C. attach great importance to gathering statistics that define every task effort and ensure limited variability. D. initiate a problem-solving search to ensure obstacles to success are identified. E. All of these choices are correct.

A. be current with events and closely monitor progress, put constructive pressure on the organization for operating excellence, and initiate corrective action when necessary to improve performance and achieve desired results.

1. Once company managers have decided on a strategy, the emphasis turns to A. converting the strategy into actions and good results. B. empowering employees to revise and reorganize value chain activities to match the strategy. C. establishing policies and procedures that instruct company personnel in the ways and means of executing the strategy. D. developing a detailed implementation plan that sets forth exactly what every department and every manager needs to do to proficiently execute the company's strategy. E. building the core competencies and competitive capabilities needed to execute the strategy.

A. converting the strategy into actions and good results.

41. Company strategies and value creating processes can't be effectively executed without internal information systems that include A. customer data, employee data, supplier/partner data, operations data, and financial performance data. B. TQM, reengineering, and Six Sigma programs. C. monetary and nonmonetary reward systems. D. activity-based cost accounting, benchmarking, and best practices. E. All of these choices are correct.

A. customer data, employee data, supplier/partner data, operations data, and financial performance data.

77. Successfully leading the effort to instill a spirit of high achievement into a company's culture and put constructive pressure on the organization to achieve good results A. entails such actions as treating employees with dignity and respect; celebrating individual, group, and company successes; and setting stretch objectives. B. hinges on the extent to which top management emphasizes a positive rather than a negative reward system. C. requires that top executives make operating excellence the company's only core value. D. calls for top executives to stress the adoption of best practices, push for continuous product innovation, and provide employees with a stream of suggestions for improving company operations. E. hinges on the degree to which lower-level managers and supervisors are good practitioners of MBWA.

A. entails such actions as treating employees with dignity and respect; celebrating individual, group, and company successes; and setting stretch objectives. B. hinges on the extent to which top management emphasizes a positive rather than a negative reward system.

33. 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 percent 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.

A. 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.

32. 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. 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.

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.

43. A well-designed reward system A. is focused on "what to achieve" to be rewarded as opposed to "what to do" and is management's most powerful tool for gaining employee commitment to superior strategy execution. 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 a 50-50 balance between positive and negative rewards and a 50-50 balance between monetary and nonmonetary rewards.

A. is focused on "what to achieve" to be rewarded as opposed to "what to do" and is management's most powerful tool for gaining employee commitment to superior strategy execution.

64. Changing a problem culture A. is one of the toughest managerial tasks because of the tendency of company personnel to cling to familiar practices 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 and describing in writing the kind of culture that is needed. 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 tendency of company personnel to cling to familiar practices and ways of doing things.

24. The disadvantages of a centralized organizational structure include A. making the organization sluggish in responding to changing conditions. B. a loss of top management control. C. putting too much decision-making authority in the hands of lower-level company personnel. D. making it hard to fix accountability when things do not go well and putting the organization at risk when bad decisions are made. E. impeding cross-unit coordination and capture of strategic fits.

A. making the organization sluggish in responding to changing conditions.

46. 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 nonmonetary incentives and rewarding people for diligently performing their assigned duties.

A. making the payoff for meeting or beating performance targets a major, not minor, piece of the total compensation package.

20. The chief advantage of a decentralized organizational structure is to A. put decision-making authority in the hands of those closest and most knowledgeable about the situation. B. make it easy to fix accountability when company performance targets are not met. C. increase productivity on the part of the workforce. D. enhance cross-unit coordination and capture of strategic fits. E. create a collegial, collaborative culture in which teamwork is a core value and decisions are made on the basis of consensus.

A. put decision-making authority in the hands of those closest and most knowledgeable about the situation.

65. The place for management to begin in trying to change a problem culture is by A. selling company personnel on the need for a new set of behaviors and work practices. B. spending heavily on programs to train employees in the ways and beliefs of the new culture to be implanted. C. visibly praising and rewarding 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. instituting incentive compensation programs that generously reward employees for adopting best practices.

A. selling company personnel on the need for a new set of behaviors and work practices.

8. Building an organization capable of good strategy execution entails A. staffing the organization, building core competencies and competitive capabilities, and structuring the organization and work effort. B. decentralizing authority for performing strategy-critical value chain activities, establishing at least two distinctive competencies, and hiring talented employees. C. investing heavily in employee training, using an empowered organization design and structure to maximize labor productivity, and employing effective incentive compensation systems. D. centralizing authority in the hands of a chief strategy implementer so as to create the leadership authority for driving implementation forward at a rapid pace. E. empowering employees, maximizing internal operating efficiency, and optimizing core competencies.

A. staffing the organization, building core competencies and competitive capabilities, and structuring the organization and work effort.

62. Companies with insular, inwardly focused cultures usually A. tend to possess arrogant overconfident mind-sets, thereby tending to underestimate the competencies and accomplishments of rival companies and overestimate their own progress. B. tend to concentrate on benchmarking to find out the best methods of doing things. C. tend to concentrate greed and ego gratification. D. tend to discount and doubt their own performance statistics. E. All of these choices are correct.

A. tend to possess arrogant overconfident mind-sets, thereby tending to underestimate the competencies and accomplishments of rival companies and overestimate their own progress.

28. 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 and procedures work better than fewer policies and 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 activities; employees should have no leeway to do things in a manner that deviates from the company's best practices standard.

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.

78. Successfully leading the effort to foster a results-oriented, high-performance culture generally requires simple leadership practices, such as A. treating employees with dignity and respect. B. encouraging employees to use initiatives and creativity in performing their work to continually make changes to operating practices. C. setting strain objectives to push the envelope on sales efforts. D. focusing attention on motivational techniques that instill self-interest, which is the cornerstone of the free enterprise system. E. celebrating management's success with high incentives and loyalty trips.

A. treating employees with dignity and respect.

54. Which one of the following statements about a high-performance culture is false? A. High-performance cultures are characterized by a pride in doing things right and a no-excuses sense of accountability. 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 energized to do things right. D. In a high-performance culture, there's a razor sharp focus on what needs to be done. 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.

53. The hallmarks of a high-performance corporate culture include A. frequently revised and updated values and ethics statements, a deep commitment to employee training, and unusually attractive fringe benefit packages for company personnel. B. a "can-do" spirit, pride in doing things right, no-excuses accountability, and a pervasive results- oriented work climate in which people go the extra mile to meet or beat stretch objectives. C. a balanced scorecard approach to measuring performance, strong emphasis on teamwork, strict enforcement of company policies and procedures, and incentive compensation for all employees. 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 (because the risks are more acceptable), 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 in which people go the extra mile to meet or beat stretch objectives.

37. 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 percent control is possible. B. all work is a process, all processes have variability, and all processes create data that explain variability. C. all work activities can be done accurately most of the time, empowered employees are necessary for effective control, and good statistical data are an empowered employee's best control tool. D. all work is a statistically controllable process, 100 percent control is possible, and every well- controlled process is defect-free. E. most business processes are subject to control, Six Sigma can remove variability in how processes are performed, and most defects can be eliminated.

B. all work is a process, all processes have variability, and all processes create data that explain variability.

61. 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 bold actions to capture emerging opportunities, have a widespread aversion to 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 to avoid 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 bold actions to capture emerging opportunities, have a widespread aversion to continuous improvement in performing value chain activities, and prefer following rather than leading market change.

10. The overriding aim in building a management team should be to A. select people who are committed to decentralizing decision making and empowering employees. B. assemble a critical mass of talented managers who can function as agents of change and further the cause of first-rate strategy execution. C. choose managers experienced in controlling costs and flattening the organization structure. D. select people who have similar management styles, leadership approaches, business philosophies, and personalities. E. choose managers who believe in having a strong corporate culture and deeply ingrained core values.

B. assemble a critical mass of talented managers who can function as agents of change and further the cause of first-rate strategy execution.

63. 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. delayering 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.

15. If management is to match a company's organization structure to its strategy in an effective way, then it is essential A. that company personnel be empowered to make both strategic decisions and operating decisions. B. for strategy-critical value-chain activities to be the main building blocks on the organization chart. C. that value chain activities be deliberately organized so as to produce maximum strategic fit. D. to define the jobs of company personnel in terms of the functions to be performed rather than in terms of the results to be achieved. E. for the company to be organized around cross-functional teams rather than around functional specialties and functional departments.

B. for strategy-critical value-chain activities to be the main building blocks on the organization chart.

67. 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 which aspects of the present culture are supportive of good strategy execution and which ones are not. 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 or her advice on how to proceed.

B. identifying which aspects of the present culture are supportive of good strategy execution and which ones are not.

5. The principal managerial actions and initiatives undertaken in the strategy execution process include which of the following? A. deciding how much to spend on employee training B. instituting policies and procedures that facilitate rather than impede effective strategy execution C. doing an effective job of empowering employees D. revamping the value chain in a manner calculated to maximize operating efficiency E. selecting a capable top management team

B. instituting policies and procedures that facilitate rather than impede effective strategy execution

17. The most common building blocks for a company's organizational structure A. are almost always the departments performing such key administrative support functions as finance, accounting, information technology, human resource management, and R&D. B. involve a functional or departmental structure that includes process, geographic, product, or customer groups performing one or more major processing steps along the value chain. C. typically consist of an unempowered employee department, an empowered employee department, teams of front-line supervisors, teams of middle-level managers and administrators, and the group of top-level executives who comprise the company's "executive suite." D. usually consist of supply chain management, components manufacture, assembly, distribution, and administration. E. usually consist of two divisions: a division charged with performing primary value chain activities and a division charged with performing support activities.

B. involve a functional or departmental structure that includes process, geographic, product, or customer groups performing one or more major processing steps along the value chain.

11. Recruiting and retaining capable employees A. is usually much more important to good strategy execution than is assembling a capable top management team. B. is important because the quality of an organization's people is always an essential ingredient of successful strategy execution—knowledgeable, engaged employees are a company's best source of creative ideas for the nuts-and-bolts operating improvements that lead to operating excellence. C. is more important during periods of rapid growth than during periods of crisis and attempted turnarounds. D. is an important organization-building element, particularly when it comes to transforming a competence into a core competence or distinctive competence. E. is easily the most critical aspect in building competitively valuable core competencies and capabilities.

B. is important because the quality of an organization's people is always an essential ingredient of successful strategy execution—knowledgeable, engaged employees are a company's best source of creative ideas for the nuts-and-bolts operating improvements that lead to operating excellence.

31. 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. C. instituting total quality management. D. making the most effective use of Six Sigma techniques. E. rapidly redesigning an organization's structure so as to rapidly create organizational competencies and capabilities.

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.

68. 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 may be stonewalling 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 may be stonewalling needed organizational and cultural changes

14. Which one of the following is not a means of building and strengthening competitively valuable resources and capabilities? A. engaging in experience-building activities such as collaborative efforts in R&D engineering and design B. shifting from decentralized to centralized decision-making so as to give senior executives more authority and control in driving cultural change C. acquiring capabilities through mergers and acquisitions D. entering into collaborative partnerships with suppliers, competitors, or other companies that possess needed expertise E. None of these choices is correct.

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

50. A company's corporate culture is best defined and identified by A. the strategy and business model that a company has adopted. B. the character of a company's internal work climate—as shaped by the company's core values, beliefs, and business principles. C. its statement of core values and its code of ethics. D. its internal politics. E. the traditions that company executives are committed to maintaining.

B. the character of a company's internal work climate—as shaped by the company's core values, beliefs, and business principles.

59. Unhealthy company cultures typically have such characteristics as A. tight budget controls, overly strict enforcement of long-standing 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; an insular, inwardly focused culture; and unethical or greed-driven behavior on the part of executives. 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; an insular, inwardly focused culture; and unethical or greed-driven behavior on the part of executives.

55. The hallmark of an adaptive corporate culture is 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 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 willingness on the part of organizational members to accept change and take on the challenge of introducing and executing new strategies.

36. 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.

C. consists of a disciplined, statistics-based system aimed at producing not more than 3.4 defects per million iterations for any business process.

4. Which of the following is not among the types of actions and initiatives undertaken by management in the strategy execution process? A. building an organization capable of executing the strategy B. instituting policies and procedures that facilitate rather than impede strategy execution C. deciding which core competencies and value chain activities to leave as is and which ones to overhaul and improve D. pushing for continuous improvement in how value chain activities are performed E. tying rewards directly to the achievement of strategic and financial targets and to good strategy execution

C. deciding which core competencies and value chain activities to leave as is and which ones to overhaul and improve

19. For decentralized decision making to be successful, it should be predicated on a belief that A. top executives should establish a collegial, collaborative culture in which decisions are made by general consensus on what to do and when. B. strict enforcement of detailed procedures backed by rigorous managerial oversight is necessary because company personnel cannot be counted on to act wisely or keep costs to a bare-bones level. C. decision-making authority should be pushed down to the lowest organizational level capable of making timely, informed, competent decisions. D. most company personnel have neither the time nor the inclination to direct and properly control the work they are performing and that they lack the knowledge and judgment to make wise decisions about how best to do their work. E. lower-level managers and employees should go up the ladder of command for approval on most all strategic and operating issues of much importance.

C. decision-making authority should be pushed down to the lowest organizational level capable of making timely, informed, competent decisions.

2. Executing strategy A. is primarily an operations-driven activity revolving around the management of people and business processes. B. tests a manager's ability to direct organizational change and achieve continuous improvement in operations and business processes. C. tests a manager's ability to create and nurture a strategy-supportive culture. D. tests a manager's ability to consistently meet or beat performance targets. E. All of these choices are correct.

E. All of these choices are correct.

35. A blended approach to Six Sigma implementation that is gaining in popularity is A. dealing exclusively with procedures to achieve defect-free manufacturing and assembly. B. finding other ways to contribute more to the achievement of operating excellence than either business process reengineering or Six Sigma quality control techniques. C. known as the ambidextrous organization, not only adept at employing continuous improvement in operating processes but also allowing R&D to operate under a set of rules that allows for the development of breakthrough innovations. D. for organizations to become 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. not considered the best tool for reengineering strategy-critical business processes.

C. known as the ambidextrous organization, not only adept at employing continuous improvement in operating processes but also allowing R&D to operate under a set of rules that allows for the development of breakthrough innovations.

26. A change in strategy nearly always entails 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. organizational 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 typically requires substantial new funding and budget revisions. E. adopting best practices and pushing for continuous improvement tend to reduce costs and overall resource requirements.

C. organizational 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.

40. The big difference between business process reengineering and continuous improvement programs such as TQM or Six Sigma is that A. reengineering is a tool for installing process organization, whereas TQM and Six Sigma concern defect-free production methods and delivering world-class customer service. B. reengineering helps create core competencies, whereas TQM and Six Sigma are tools for making a core competence stronger and more efficient. C. reengineering is a tool for achieving one-time quantum improvements, whereas TQM and Six Sigma programs aim at incremental progress 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.

C. reengineering is a tool for achieving one-time quantum improvements, whereas TQM and Six Sigma programs aim at incremental progress improvement (striving for inch-by-inch gains again and again in a never-ending stream).

73. Which of the following is most integral to the task of leading the drive for good strategy execution and operating excellence? A. pushing lower-level managers and supervisors to practice MBWA B. being a good motivator and a decisive decision maker C. staying on top of how well things are going, pushing organization units to achieve good results, pushing for corrective actions to improve both the company's strategy and how well it is being executed, and displaying ethical integrity and leading social responsibility initiatives D. practicing enlightened empowerment of employees and using a decentralized approach to decision making E. being good at designing a strategy-supportive reward structure

C. staying on top of how well things are going, pushing organization units to achieve good results, pushing for corrective actions to improve both the company's strategy and how well it is being executed, and displaying ethical integrity and leading social responsibility initiatives

60. Companies with politicized cultures A. are typically opposed to performance-based incentive compensation and employee empowerment. B. tend to be preoccupied with making sure the company has a safe, follow-the-industry-leader type of strategic vision and to avoid risky business strategies. C. tend be plagued with infighting that consumes a great deal of organizational energy and often results in the company's strategic agenda taking a backseat to political maneuvering. D. are typically opposed to sound strategic initiatives designed to promote the well-being of specific functions. E. are typically run by political managers who have little regard for high ethical standards.

C. tend be plagued with infighting that consumes a great deal of organizational energy and often results in the company's strategic agenda taking a backseat to political maneuvering.

74. MBWA refers to A. modifying businesses with action. B. a mission, balanced scorecard, and weighted assessment. C. the managerial practice of making regular visits to field operations and talking with many people at many different levels. D. the balanced scorecard perspectives of a company's strategy map. E. managing businesses with authority.

C. the managerial practice of making regular visits to field operations and talking with many people at many different levels.

13. Which of the following is generally not among the practices that companies use to staff jobs with the best people they can find? A. careful screening and evaluation of job applicants B. rotating people through jobs that span functional and geographic boundaries C. weeding out the 20 percent lowest-performing employees each year D. striving to retain talented, high-performing employees via promotions, salary increases, and other perks E. coaching average performers to improve their skills and capabilities

C. weeding out the 20 percent lowest-performing employees each year

34. Total quality management (TQM) emphasizes all but which one of the following? A. 100 percent 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

C. widespread adoption of industry standard operating practices

47. 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. Any incentive plan should extend to all managers and all employees, not just top management. D. Ways must be found to reward deserving nonperformers 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.

D. Ways must be found to reward deserving nonperformers who, for some reason, do not fare well under the incentive system.

45. 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 properly designed system of rewards and incentives. E. aggressive use of TQM and Six Sigma quality control programs.

D. a properly designed system of rewards and incentives.

57. Which of the following is not a common trait of an unhealthy company culture? A. a politicized internal environment B. hostility to change and a wariness of people who champion new ways of doing things C. aversion to looking outside the company for best practices, new managerial approaches, and innovative ideas D. aversion to incentive compensation, failure to recruit the best and brightest employees, subpar support for employee training, and overemphasis on working in teams E. disregard for high ethical standards and an overzealous pursuit of wealth and status on the part of key executives

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

39. 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 percent control over how a task is performed and eliminating 100 percent 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.

D. developing new processes or products at Six Sigma quality levels.

9. Putting together a capable top management team A. should take top priority in building competitively valuable core competencies. B. is particularly important when the firm is pursuing unrelated diversification or making a number of new acquisitions in related businesses. C. is important in building an organization capable of proficient strategy execution but is nearly always less crucial than doing a superior job of training and retraining employees. D. entails filling key managerial slots with people who are good at figuring out what needs to be done and skilled in "making it happen" and delivering good results. E. is particularly essential for executing a strategy to keep a company's costs lower than rivals' and become the industry's low-cost leader.

D. entails filling key managerial slots with people who are good at figuring out what needs to be done and skilled in "making it happen" and delivering good results.

27. Which one of the following is not a benefit of prescribing policies and operating procedures to aid management's task of implementing strategy? A. helping enforce consistency in how particular activities are performed B. providing top-down guidance to operating managers, supervisory personnel, and employees regarding how to alter past practice and how things need to be done now C. promoting the creation of a can-do 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. Two answers are correct: helping enforce consistency in how particular activities are performed, and providing top-down guidance to operating managers, supervisory personnel, and employees regarding how to alter past practice and how things need to be done now.

D. helping build employee commitment to adopting best practices and using the tools of TQM and Six Sigma

21. The organizing challenge of a decentralized structure that stresses employee empowerment is A. how to keep empowered employees from making lots of stupid decisions. B. establishing a collegial, collaborative culture so that decisions can be made by gaining a quick consensus on what to do and when to do it. C. how to avoid demotivating employees (because empowered employees are expected to take responsibility for their actions and decisions). D. how to exercise adequate control over the actions and decisions of empowered employees so that the business is not put at risk while trying to capture the benefits of empowerment. E. how to convince lower-level managers and employees that they are empowered.

D. how to exercise adequate control over the actions and decisions of empowered employees so that the business is not put at risk while trying to capture the benefits of empowerment.

7. The three components of building a capable organization are A. making periodic changes in the firm's internal organization to keep people from getting into a comfortable rut, instituting a decentralized approach to decision making, and developing the appropriate competencies and capabilities. B. hiring a capable top management team, empowering employees, and establishing a strategy- supportive corporate culture. C. putting a centralized decision-making structure in place, determining who should have responsibility for each value chain activity, and aligning the corporate culture with key policies, procedures, and operating practices. D. staffing the organization, building core competencies and competitive capabilities, and structuring the organization and work effort. E. optimizing the number of core competencies and competitive capabilities, making sure that all managers and employees are empowered, and maximizing internal operating efficiency.

D. staffing the organization, building core competencies and competitive capabilities, and structuring the organization and work effort.

52. Which one of the following is not a fundamental part of a company's culture? A. work practices and behaviors that define "how we do things around here" B. "Chemistry" that permeates its work environment C. the company's core values and business principles D. the company's strategic vision, strategic intent, and strategy E. the company's style of operating and ingrained behaviors and attitudes

D. the company's strategic vision, strategic intent, and strategy

16. The rationale for making strategy-critical value chain activities the primary building blocks in a company's organizational chart is based on the A. much shorter time it takes to build core competencies and competitive capabilities. B. benefit such an organizational scheme has in reducing costs. C. benefit such an organizational scheme has in improving the productivity of geographically scattered organizational units. D. thesis that if activities crucial to strategic success are to have the resources, decision-making influence, and organizational impact they need, they have to be centerpieces in the organizational scheme. E. benefit such an organizational scheme has in making the empowerment of employees more effective.

D. thesis that if activities crucial to strategic success are to have the resources, decision-making influence, and organizational impact they need, they have to be centerpieces in the organizational scheme.

69. 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 have stepped forward to advocate the shift to a different culture and who can serve as role models for the desired cultural behavior B. revising policies and procedures in ways that will help drive cultural change C. screening all candidates for new positions carefully and 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 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

23. Which one of the following falsely characterizes a centralized organizational structure? A. Top executives should retain authority over most strategic and operating decisions and keep a tight rein on business-unit heads, department heads, and the managers of key operating units. B. Strict enforcement of detailed procedures backed by rigorous managerial oversight is the most reliable way to keep the daily execution of strategy on track. C. Tight control by the manager in charge makes it easy to fix accountability when things do not go well. D. Most company personnel have neither the time nor the inclination to direct and properly control they work they are performing, and they lack the knowledge and judgment to make wise decisions about how best to do their work. E. A company that draws on the combined intellectual capital of its people can outperform a company that relies on command and control.

E. A company that draws on the combined intellectual capital of its people can outperform a company that relies on command and control.

58. Which of the following is not an example of an unhealthy company culture? A. insular, inwardly focused culture B. change-resistant culture C. unethical and greed-driven culture D. politicized culture E. hyper-adaptive culture

E. hyper-adaptive culture

22. A highly centralized organizational structure A. allows top executives to retain authority for most strategic and operating decisions. B. is based on strict enforcement of detailed procedures backed by rigorous managerial oversight as the most reliable way to keep the daily execution of strategy on track. C. allows for tight control from the top that makes it easy to fix accountability when things do not go well. D. relies on the assumption that most company personnel have neither the time nor the inclination to direct and properly control the work they are performing and, further, that they lack the knowledge and judgment to make wise decisions about how best to do their work. E. All of these choices are correct.

E. All of these choices are correct.

29. Ways to improve the performance of strategy-critical activities and promote superior strategy execution include A. business process reengineering. B. a corporate culture that has a core value of operating excellence. C. benchmarking. D. Six Sigma quality control and TQM techniques. E. All of these choices are correct.

E. All of these choices are correct.

3. Good strategy execution A. requires a team effort with managers who have strategy-executing responsibility and making all employees active participants in the execution process. B. requires getting things done effectively and efficiently. C. allows companywide performance measures to be met. D. requires middle and lower-level managers to ensure strategy-critical activities are successfully implemented. E. All of these choices are correct.

E. All of these choices are correct.

49. Some of the most important nonmonetary approaches to enhancing motivation and helping drive successful strategy execution include A. adopting promotion-from-within policies and acting on suggestions from employees. B. providing attractive perks and fringe benefits. C. creating a work atmosphere in which there is genuine sincerity, caring, and mutual respect among employees and management. D. using frequent words of praise to recognize employees for commendable performance. E. All of these choices are correct.

E. All of these choices are correct.

51. The character of a company's corporate culture is a product of A. the company's core values and business principles. B. its style of operating and ingrained behaviors and attitudes. C. the "chemistry" that permeates its work environment. D. the work practices and behaviors that define "how we do things around here." E. All of these choices are correct.

E. All of these choices are correct.

66. 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 choices are correct.

E. All of these choices are correct.

70. Symbolic culture-changing actions are best represented by A. those actions top executives take to lead by example. B. frugality if a low-cost strategy is being executed. C. ensuring all management actions are "walking the talk." D. ceremonial events to celebrate actions that exemplify the performance culture. E. All of these choices are correct.

E. All of these choices are correct.

71. Leading the strategy execution process requires A. senior managers to be out in the field, seeing for themselves how well operations are going. B. company managers to be diligent and adept in ferreting out problems and issues. C. managers to push for better results when the strategy execution effort is not going well. D. managers to have good business judgment in deciding what actions to take when corrective actions are necessary. E. All of these choices are correct.

E. All of these choices are correct.

76. Putting constructive pressure on the organization to achieve good results and operating excellence entails A. setting stretch objectives and creating an expectation that company personnel are to do their best in achieving performance targets. B. utilizing the full range of motivational techniques and compensation incentives to reward high performance. C. treating employees with dignity and respect. D. encouraging employees to use initiative and creativity in performing their work. E. All of these choices are correct.

E. All of these choices are correct.

48. 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 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 nonmonetary rewards and a work environment that avoids placing pressure on managers and employees to perform at high levels

E. a reward system that involves 50 percent nonmonetary rewards and a work environment that avoids placing pressure on managers and employees to perform at high levels

30. Which one of the following is not a tool that company managers can use to promote continuous improvement (operating excellence) in performing value chain activities? A. variability reduction analysis in work processes B. Six Sigma quality control techniques C. total quality management (TQM) D. business process reengineering E. adoption of standard industry techniques

E. adoption of standard industry techniques

6. The principal managerial actions and initiatives undertaken in the strategy execution process include which of the following? A. building an organization with the capabilities, people, and structure needed for execution B. instituting policies and procedures that facilitate rather than impede effective strategy execution C. allocating ample resources to required activities D. tying rewards directly to the achievement of performance objectives E. all of these choices are correct.

E. all of these choices are correct.

42. Essential state-of-the-art operating and information systems that support company strategies and value-creating internal processes include all of the following except A. customer database systems. B. information systems to track supplier/partner/collaborative ally data. C. human resources systems that maintain employee data. D. systems to record and report financial performance data. E. data management systems for undertaking benchmarking, TQM, and Six Sigma quality control.

E. data management systems for undertaking benchmarking, TQM, and Six Sigma quality control.

44. An important consideration in designing a strategy-supportive motivation and 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 focus employees' attention on "what to do." D. make across-the-board wage and salary increases the cornerstone of monetary rewards. E. make both monetary and nonmonetary rewards integral parts of the reward system.

E. make both monetary and nonmonetary rewards integral parts of the reward system.