Quiz Chp 2
When trade-offs have to be made between achieving long-term and achieving short-term objectives, Multiple Choice long-term objectives should take precedence unless the short-term performance targets have unique importance. long-term objectives should never take precedence until the short-term objective is achieved. short-term objectives should take precedence unless the long-term performance targets are not achievable. short-term objectives should take precedence because they focus attention on delivering performance improvement. long-term objectives should never take precedence until the short-term objective is achieved.
long-term objectives should take precedence unless the short-term performance targets have unique importance. When trade-offs have to be made between achieving long-term objectives and achieving short-term objectives, long-term objectives should take precedence (unless the achievement of one or more short-term performance targets has unique importance).
Which one of the following is not an integral part of the managerial process of crafting and executing strategy? Multiple Choice Developing a strategic vision Choosing a strategic intent Setting objectives and crafting a strategy to achieve them Evaluating performance and initiating corrective adjustments in the company's long-term direction, objectives, strategy, or execution in light of actual experience, changing conditions, new ideas, and new opportunities Implementing and executing the chosen strategy efficiently and effectively
Choosing a strategic intent The managerial process of crafting and executing a company's strategy is an ongoing, continuous process consisting of five integrated stages: (1) developing a strategic vision; (2) setting objectives; (3) crafting strategy; (4) implementing and executing the chosen strategy; and (5) evaluating and analyzing the external environment and the company's internal situation and performance.
Which one of the following is not a characteristic of an effectively worded strategic vision statement (see Table 2.2)? Multiple Choice Directional (is forward-looking; describes the strategic course that management has charted and the kinds of product-market-customer-technology changes that will help the company prepare for the future) Concrete and unambiguous (leaves no doubt as to what the company is trying to accomplish for shareholders) Graphic (paints a clear picture) Easy to communicate (ideally, explainable in 10 minutes) Focused and flexible (specific enough to provide managers with guidance in making decisions and allocating resources but stops short of a once-and-for-all-time statement because the strategic path may need to be changed as market-customer-technology circumstances change)
Concrete and unambiguous (leaves no doubt as to what the company is trying to accomplish for shareholders) From Table 2.2, it is evident that an effectively worded vision statement is graphic, directional, focused, flexible, feasible, desirable, and easy to communicate. A surprising number of the vision statements found on company websites and in annual reports are vague and unrevealing, saying very little about the company's future product-market-customer-technology focus.
Which one of the following is not among the chief duties/responsibilities of a company's board of directors insofar as the strategy-making, strategy-executing process is concerned? Multiple Choice Directing senior executives as to what the company's long-term direction, objectives, business model, and strategy should be, and, further, closely supervising senior executives in their efforts to implement and execute the strategy Overseeing the company's financial accounting and financial reporting practices Evaluating the caliber of senior executives' strategy-making/strategy-executing skills Being inquiring critics and exercising strong oversight over the company's direction, strategy, and business approaches Instituting a compensation plan for top executives that rewards them for actions and results that serve stakeholders' interests, most especially those of shareholders
Directing senior executives as to what the company's long-term direction, objectives, business model, and strategy should be, and, further, closely supervising senior executives in their efforts to implement and execute the strategy Although senior managers have lead responsibility for crafting and executing a company's strategy (vision, mission, objectives) and business model, it is the duty of the board of directors to exercise strong oversight to: (1) monitor the company's performance, (2) guide and judge the CEO and other top executives, (3) curb management actions it believes are inappropriate or unduly risky, (4) certify to shareholders that the CEO is doing what the board expects, (5) provide insight and advice to management, and (6) remain intensely involved in debating the pros and cons of key decisions and actions.
Which of the following is not among the principal managerial tasks associated with managing the strategy execution process? Multiple Choice Ensuring that policies and procedures facilitate rather than impede effective execution Installing information and operating systems that enable company personnel to perform essential activities Exerting the internal leadership needed to drive implementation forward Engaging the services of staffing firms to maintain the company's personnel data Tying rewards and incentives directly to the achievement of performance objectives
Engaging the services of staffing firms to maintain the company's personnel data Good strategy execution entails managers paying careful attention to how key internal business processes are performed and seeing to it that employees' efforts are directed toward the accomplishment of desired operational outcomes. Use of external staffing firms is not among the list of activities for managing the strategy execution process.
According to both the text discussion and the summary in Table 2.3, which of the following is not a common shortcoming of company vision statements? Multiple Choice Incomplete or vague—short on specifics Overly reliant on superlatives (best, most successful, recognized leader, global or worldwide leader, first choice of buyers) Overly broad—so umbrella-like and all-inclusive that the company could head in almost any direction, pursue most any opportunity, or enter most any business Lacking in analysis—based more on managerial emotion and excessive ambition than on what is realistically achievable Not distinctive—provides no unique company identity; could apply to companies in any of several industries (or at least several rivals operating in the same industry or market arena)
Lacking in analysis—based more on managerial emotion and excessive ambition than on what is realistically achievable From Table 2.3, it is evident that an ineffectively worded vision statement is not forward-looking, too broad, bland or uninspiring, not distinctive, and overly reliant on superlatives.
Accounting scandals that led to investigations of such well-known companies as AOL Time Warner, Global Crossing, Enron, Qwest Communications, and WorldCom resulted in the conviction of a number of corporate executives and the passage of the Sarbanes-Oxley Act of 2002. In these cases, the board of directors did not fulfill which of the following important obligations? Multiple Choice Overseeing the company's financial accounting and financial reporting practices Instituting a compensation plan for top executives that rewards them for actions that serve stakeholder interests Critically appraising the company's direction, strategy, and business approaches Creating meeting agendas to deal with regulatory compliance issues Hiring and firing senior-level executives and working with the company's chief strategic planning officer to improve the company's strategy when performance came up short of expectations
Overseeing the company's financial accounting and financial reporting practices A company's board of directors has the following four important obligations to fulfill: (1) oversee the company's financial accounting and financial reporting practices; (2) critically appraise the company's direction, strategy, and business approaches; (3) evaluate the caliber of senior executives' strategic leadership skills; and (4) institute a compensation plan for top executives that rewards them for actions and results that serve shareholder interests. Faulty oversight of corporate accounting and financial reporting practices by audit committees and corporate boards during the early 2000s resulted in the federal investigation of more than 20 major corporations between 2000 and 2002, and the passage of the Sarbanes-Oxley Act of 2002.
The task of crafting a strategy is Multiple Choice the function and responsibility of a few high-level executives. more of a collaborative group effort that involves all managers and sometimes key employees striving to arrive at a consensus on what the overall best strategy should be. the function and responsibility of a company's strategic planning staff. a job for a company's whole management team—senior executives plus the managers of business units, operating divisions, functional departments, manufacturing plants, and sales districts (as per the strategy-making hierarchy shown in Figure 2.2). first and foremost the function and responsibility of a company's board of directors.
a job for a company's whole management team—senior executives plus the managers of business units, operating divisions, functional departments, manufacturing plants, and sales districts (as per the strategy-making hierarchy shown in Figure 2.2). Strategic initiatives taken at various organizational levels must be tightly coordinated to achieve companywide performance targets. In most companies, crafting a strategy is a collaborative team effort that includes managers in various positions and at various organizational levels. Crafting a strategy is rarely something only high-level executives do.
The difference between a company's mission statement and the concept of a strategic vision is that Multiple Choice the mission statement lays out the desire to make a profit, whereas the strategic vision addresses what strategy the company will employ in trying to make a profit. a mission statement deals with "where we are headed," whereas a strategic vision provides the critical answer to "how will we get there." a mission statement deals with what a company is trying to do, and a vision concerns what a company ought to do. a mission statement typically concerns an enterprise's present business scope and purpose —"who we are, what we do, and why we are here"—whereas the focus of a strategic vision is on the direction the company is headed and what its future product-customer-market-technology focus will be. a mission statement is about what to accomplish for shareholders, whereas a strategic vision concerns what to accomplish for customers.
a mission statement typically concerns an enterprise's present business scope and purpose —"who we are, what we do, and why we are here"—whereas the focus of a strategic vision is on the direction the company is headed and what its future product-customer-market-technology focus will be. The defining characteristic of a well-conceived strategic vision is what it says about the company's future strategic course—"where we are headed and what our future product-customer-market-technology focus will be." The mission statements of most companies say much more about the enterprise's present business scope and purpose—"why we exist."
Corporate governance failures at Volkswagen included all of the following except Multiple Choice a lack of understanding regarding the risks of installing "defeat devices" during emissions testing of at least 11 million VW vehicles equipped with diesel engines. fraudulent executive compensation systems at Volkswagen. a strong independent board of directors that was responsible for making independent judgments about the validity and wisdom of management's proposed strategic actions. inadequate monitoring of VW's Chairman, Ferdinand Piëch, its CEO, Martin Winterkorn, and other senior executives. incomplete understanding and ineffective oversight of the technologies employed to accurately determine automobile emissions.
a strong independent board of directors that was responsible for making independent judgments about the validity and wisdom of management's proposed strategic actions. According to the illustration capsule in Concepts & Connections 2.4, Volkswagen did not have a strong independent board of directors that (1) was well informed about the company's performance, (2) provided independent oversight of the CEO and other top executives, (3) lacked the courage to curb management actions that were fraudulent and/or inappropriate and/or unduly risky, (4) kept regulatory agencies such as the EPA informed on a timely basis, and (5) prevented elevation of new board members from among the ranks of managers who had presided over past scandals.
Every corporation should have a strong, independent board of directors that does all of the following except Multiple Choice be intensely involved with and responsible for leading the strategy-making, strategy-executing process. guide and judge the CEO and other top executives. certify to shareholders that the CEO is doing what the board expects. be intensely involved in debating the pros and cons of key decisions and actions. be well informed about the company's performance.
be intensely involved with and responsible for leading the strategy-making, strategy-executing process. Every corporation should have a strong independent board of directors that (1) is well informed about the company's performance, (2) guides and judges the CEO and other top executives, (3) has the courage to curb management actions the board believes are inappropriate or unduly risky, (4) certifies to shareholders that the CEO is doing what the board expects, (5) provides insight and advice to management, and (6) is intensely involved in debating the pros and cons of key decisions and actions.
As Figure 2.2 shows, the strategy-making hierarchy in a single business company consists of Multiple Choice business strategy, divisional strategies, and departmental strategies. business strategy, functional area strategies, and operating strategies. business strategy and operating strategy. managerial strategy, business strategy, and divisional strategies. corporate strategy, divisional strategies, and departmental strategies.
business strategy, functional area strategies, and operating strategies. In single-business companies, the corporate and business levels of the strategy-making hierarchy merge into a single level—business strategy—because the strategy for the entire enterprise involves only one distinct business. So, a single-business company has three levels of strategy: business strategy, functional-area strategies, and operating strategies.
Management is obligated to monitor new external developments, evaluate the company's progress, and make corrective adjustments in order to Multiple Choice decide whether to continue or change the company's strategic vision, objectives, strategy and/or strategy execution methods. determine whether the company has a balanced scorecard for judging its performance. determine what changes should be made to its strategy map. determine whether the company's business model is well matched to changing market and competitive circumstances. stay on track in achieving the company's mission and strategic vision.
decide whether to continue or change the company's strategic vision, objectives, strategy and/or strategy execution methods. A company's direction, objectives, and strategy have to be revisited any time external or internal conditions warrant. A company's vision, objectives, strategy, and approach to strategy execution are never final; managing strategy is an ongoing process, not an every-now-and-then task.
The primary role of a functional strategy is to Multiple Choice describe the mission and strategic intent of each key functional piece of the business. create compatible degrees of strategic intent among a company's different business functions. unify the company's various operating-level strategies. determine how to support particular activities in ways that support the overall business strategy and competitive approach. assess what competitive capabilities to build in support of the overall company strategy and what to do to unify the firm's skills, competencies, and resource strengths across all the various key pieces of a company's business.
determine how to support particular activities in ways that support the overall business strategy and competitive approach. Functional-area strategies are concerned with the actions related to particular functions or processes within a business—like research and development (R&D), production, procurement of inputs, sales and marketing, distribution, customer service, and finance.
Corporate strategy Multiple Choice determines balanced scorecard financial and strategic objectives. should be based on a flexible strategic vision and mission. is subject to being changed much less frequently than either a company's objectives or its mission statement. is primarily concerned with strengthening a company's market position and building competitive advantage. ensures consistency in strategic approach among businesses of a diversified, multibusiness corporation.
ensures consistency in strategic approach among businesses of a diversified, multibusiness corporation. As shown in Figure 2.2, corporate strategy is orchestrated by the CEO and other senior executives, and establishes an overall game plan for managing a set of businesses in a diversified, multibusiness company. Corporate strategy addresses the questions of how to capture cross-business synergies, what businesses to hold or divest, which new markets to enter, and how to best enter new markets—by acquisition, by creation of a strategic alliance, or through internal development.
A balanced scorecard for measuring company performance Multiple Choice entails balancing the pursuit of good bottom-line profit against the pursuit of nonprofit objectives (although achieving profitability targets is nearly always given greater emphasis). involves putting equal emphasis on the achievement of financial objectives, strategic objectives, and social responsibility objectives. entails setting both financial and strategic objectives and putting a balanced emphasis on their achievement. helps prevent the pursuit of strategic objectives from dominating the pursuit of financial objectives. is necessary to prevent the drive for achieving financial objectives from weakening the attention paid to social responsibility, community citizenship, and other worthy goals.
entails setting both financial and strategic objectives and putting a balanced emphasis on their achievement. The balanced scorecard is a widely used method for combining the use of both strategic and financial objectives, tracking their achievement, and giving management a more complete and balanced view of how well an organization is performing.
A company's strategic plan consists of Multiple Choice actions and market maneuvers the company plans to use to achieve a sustainable competitive advantage. management's vision mapping out where a company is headed, the company's financial and strategic objectives, and management's strategy to achieve the objectives and move the company along the chosen strategic path. a company's strategic vision, strategic objectives, strategic intent, and strategy. an organization's strategy and management's specific, detailed plans for implementing it. the specific actions management intends to take in detouring strategic inflection points and executing its overall strategy.
management's vision mapping out where a company is headed, the company's financial and strategic objectives, and management's strategy to achieve the objectives and move the company along the chosen strategic path. Developing a strategic vision charts a company's long-term direction, while setting objectives helps measure the company's performance and track its progress in moving toward that intended long-term direction. These are two of the three stages involved in crafting a strategic plan. A strategic plan maps out where a company is headed, establishes strategic and financial targets, and outlines the competitive moves and approaches to be used in achieving the desired business results.
Company objectives Multiple Choice need to be broken down into performance targets for each of the organization's separate businesses, product lines, functional departments, and individual work units. are needed only in those areas directly related to a company's short-term and long-term profitability. help answer the question of "Where do we want to go". determine the geographic and business scope of the company's operations. should be set in a manner that does not conflict with the performance targets of lower-level organizational units.
need to be broken down into performance targets for each of the organization's separate businesses, product lines, functional departments, and individual work units. Objective setting does not stop with the establishment of companywide performance targets but needs to be broken into performance targets for each of the organization's separate businesses, product lines, functional departments, and individual work units. This is necessary to guide employees within various functional areas and operating levels via narrow objectives relating directly to their departmental activities, rather than to broad organizational-level goals.
An engaging and convincing strategic vision for a company Multiple Choice concerns management's view of how to transition the company's business model from where it is now to where it needs to be. should be explained after the company's strategic intent, strategy, and business model have been conveyed to company personnel. should be crafted in language that inspires and motivates company personnel to unite behind executive efforts to get the company moving in the intended direction. ought to put "who we were and what we are doing" in writing rather than orally so as to leave no room for company personnel to misinterpret what the strategic vision really is. involves how fast to pursue the chosen strategy and reach the targeted levels of performance.
should be crafted in language that inspires and motivates company personnel to unite behind executive efforts to get the company moving in the intended direction. Developing a strategic vision charts a company's long-term direction. It is particularly important for executives to provide a compelling rationale for a dramatically new strategic vision and company direction. When company personnel do not understand or accept the need for redirecting organizational efforts, they are prone to resist change. Hence, explaining the basis for the new direction, addressing employee concerns head-on, calming fears, lifting spirits, and providing updates and progress reports as events unfold all become part of the task in mobilizing support for the vision and winning commitment to needed actions.
Establishing and achieving strategic objectives merits very high priority on management's agenda because Multiple Choice strategic outcomes provide better benefits to shareholders in both the short run and the long run. a company cannot have a shrewd strategic vision without having aggressive and competitively astute strategic objectives. strategic outcomes are leading indicators of a company's future financial performance and business prospects. well-chosen strategic objectives help managers craft a good strategy. a company cannot achieve its strategic intent and strategic vision or gain a competitive advantage over rivals without having and achieving strategic objectives.
strategic outcomes are leading indicators of a company's future financial performance and business prospects. In contrast to strategic objectives, which are leading indicators of a company's market standing and competitive vitality, a company's financial objectives are really lagging indicators that reflect the results of past decisions and organizational activities.
Operating strategies consist of Multiple Choice what a company's various operating departments plan to do to help execute the company's overall strategy. the strategic intent of each operating unit. the relatively narrow strategic initiatives and approaches for managing key operating units (plants, distribution centers, geographic units) and specific operating activities (the management of specific brands, supply chain-related activities, and website sales and operations). the specific actions a company's various operating departments plan to take to unify efforts to achieve a sustainable competitive. what a company will do once its strategic plan is adopted and approved by the company's board of directors.
the relatively narrow strategic initiatives and approaches for managing key operating units (plants, distribution centers, geographic units) and specific operating activities (the management of specific brands, supply chain-related activities, and website sales and operations). Operating strategies concern the relatively narrow strategic initiatives and approaches for managing key operating units (plants, distribution centers, geographic units) and specific operating activities such as materials purchasing or Internet sales.
