STR581: Ch 2: Charting a company's direction

extreme stretch goals

warranted only under certain conditions

Which of the following are short term objectives?

1. quarterly 2. annual

If a company's board of directors is strong and independent, what should it be able to do?

1. stop management from taking actions that are too risky or inappropriate 2. guide and judge the CEO and other executives 3. certify to shareholders that the CEO is performing as the board expects

The most reliable leading indicators are ____.

strategic outcomes that measure competitiveness and market position

The most reliable leading indicators are ______.

strategic outcomes that measure competitiveness and market position

A sense of "where we are going" is called the company's

strategic vision

Which of the following are developed during the first stage in crafting a company strategy?

1. a set of core values 2. a strategic vision 3. a mission statement

Which of the following are true about how the content of a company's strategic plan is typically shared with different audiences?

1. a summary of the plan is published in the company's annual report 2. excerpts of the plan are posted on the company website

When a company faces sudden market changes or obstacles, managers should _____.

1. be innovative 2. adapt quickly

Which elements form part of a company's strategic plan?

1. company direction 2. basic business model 3. intended competitive moves

What will a typical strategic plan accomplish?

1. establish a time period for accomplishing goals 2. allocate resources that will help implement the plan

What are the obligations of a company's board of directors?

1. evaluating the company's direction and strategy 2. ensuring that the company's financial reports are accurate 3. evaluating the strategic leadership abilities of the CEO

At companies where core values are taken seriously, ______

1. executive demonstrate the values in their own behavior 2. executives attempt to make the values an integral part of the corporate culture

It is generally best for companies to craft objectives that _____

1. include a deadline for achieving the objective 2. can be measured

Financial objectives are important for ______

1. increasing revenue 2. increasing profit margins 3. achieving shareholder satisfaction

Performance targets should be set for the organization's ________.

1. individual work units 2. separate businesses 3. product lines

To implement a strategy, what elements will a manger usually needs to assemble?

1. information and operating systems 2. adequate resources for activities critical to strategic success 3. personnel with appropriate skills and expertise

Operating strategies are designed to manage ________.

1. key units, such as distribution centers 2. specific activities, such as internet sales

Top executives can unify the various strategies within a company by telling lower managers and other personnel about the organization's ______.

1. major components of the corporate strategy 2. objectives 3. vision

Which statements are true about assessing the effectiveness of a strategic plan?

1. managers should make adjustments in areas that aren't working well and continue strategies that are succeeding 2. managers should search diligently for ways the strategy can be improved 3. managers should evaluate how the strategy is working throughout the company

Which of the following should a manager do to implement a strategic plan?

1. motivate employees 2. build and strengthen competitive capabilities 3. direct organizational change

To ensure that employees will help execute the company's strategy, what should a manager do?

1. provide leadership to keep the strategy moving forward 2. reward them when they achieve performance goals 3. encourage a company culture that will help the strategy succeed

In which of the following situations, an adjustment of a company's strategy is most likely needed?

1. the company faces a drop in its market position 2. the company faces repeated failure to achieve performance goals

Who would be most involves in the crafting and implementation of functional strategies?

1. the general manager of the business 2. the people in charge of each function

What is the role of a company's board of directors?

1. to oversee top executives and ensure that they craft and implement an effective strategy 2. to ensure that the company is operating in the best interests of shareholders and other stakeholders

objectives

an organization's performance targets-- the specific results management wants to achieve

Typically, a company's strategy making must _____.

begin at the top of a company

financial objectives

communicate management's goals for financial performance

A toy-making business is part of a larger corporation that owns various other businesses. The toy-making business unit decides to increase its production of board games. This is an example of a(n) _______.

functional-area strategy

A manager of a plant owned by a food and beverage company for producing canned goods develops a strategy for updating its production lines while maintaining its quality controls. This is an example of a(n)______.

operating strategy

In a small, privately owned company, the strategic plan is most likely something that the owner has _______.

pondered without writing down

business strategy

primarily concerned with strengthening the company's market position and building competitive advantage in a single business company or in a single business unit of a diversified multi business corporation

When conditions outside or inside the company change enough to cause substantial disruptions, managers should ________.

reevaluate the organization's direction and strategy

To measure how well a company is moving in the intended direction, it is important to _____.

set objectives

stretch objectives

set performance targets high enough to stretch an organization to perform at its full potential and deliver the best possible results

Which of the following groups has a primary responsibility the need to challenge a chief operating office who is acting inappropriately in his position?

the board of directors

Business strategy, in contrast to corporate strategy, involves which of the following?

1. strengthening the market position of individual business units 2. improving the performance of individual business units

Sometimes a company's CEO is the main person who develops the organization's strategy. This most often happens in which of the following situations?

1. the CEO is the owner and manager of a small company 2. the CEO is the founder of a company that grew into a larger corporation 3. the CEO has unusually strong strategic leadership skills

Why might top executives involve lower-level managers in crafting and implementing a company strategy?

1. the managers know more details about the operation of their specific operating units than the executives do 2. the company's operations are spread across various industries and geographic areas 3. the organization is so bit and complex that top management cannot keep track of all the parts that make up the strategy

While developing a strategic vision, a company's managers might change which of the following?

1. the types of customers the company will serve 2. the products the company will offer 3. the markets in which the company will compete

Which statements are true about specific, measurable goals?

1. they help an organization remain focused on what it is trying to accomplish 2. they motivate personnel to try harder 3. they help an organization track its progress

two distinct types of performance targets

1. those relating to financial performance 2. those relating to strategic performance

Under what circumstances would an extreme stretch goal involving radical expectations be most likely to succeed?

1. when the company has plenty of resources available 2. when the company's recent performance has been strong

Who is ultimately responsible for the results that a company strategy produces?

CEO

Strategic performance is measured by the rise and fall of a company's

competitiveness

functional area strategies

concern the approaches employed in managing particular functions within a business like research and development, production, procurement of inputs, sales and marketing, distirbution, customer service, and finance

operating strategies

concern the relatively narrow approaches for managing key operating units and specific operating activities with strategic significance.

Why do some companies state their core values but make little effort to ensure that individual personnel and the company in general will abide by them?

The statement about values serves only to make the company look good

Long term objectives are intended to do which of the following?

1. Prevent a nearsighted management philosophy 2. Prompt action now to improve the organization's performance later

Why do companies designate a set of core values?

1. to guide the behavior of personnel 2. to encourage certain beliefs, traits, and behavioral norms 3. to guide the company as it pursues its vision and mission

To produce a value statement for a new company, management will typically _____.

1. write and initial draft and have employees read it 2. consider feedback from employees

Why do some companies state their core values but make little effort to ensure that individual personnel and the company in general will abide by them?

The statement about values serves to only make the company look good

What is a stretch objective?

a performance target that will require significant effort to achieve

balanced scorecard

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 and organization is performing

A measurement system that links financial performance goals with strategic goals is called a _______.

balanced scorecard

Honor, integrity, teamwork, superior customer service, and innovation are examples of company ___

core values

strategic vision

describes management's aspirations for the company's future and the course and direction charted to achieve them

mission statement

describes the scope and purpose of its present business

Masterful strategies come from ____.

doing key things differently from competitors

When a company strives to achieve and extreme stretch goal but fails because the goal was simply too difficult, what will most likely happen?

employees will lose their motivation

corporate strategy

establishes and overall game plan for managing a set of businesses in a diversified, multi business company

Who is the target audience of an organization's strategic vision statement?

everyone in the organization

Who is the target audience of an organizations strategic vision statement?

everyone in the organization

A well crafted vision statement should...

explain where top executives plan to take the company in the future

True or false: the crafting and implementing of company strategy is exclusively a function of the top management of an organization.

false

To mobilize employee support for a new strategic vision for a company, executives should

give convincing reasons for taking the organization in a new direction

strategic objectives

goals concerning a company's marketing standing and competitive position, and future business prospects

strategic plan

lays out its direction, business model, competitive strategy, and performance targets for some specified period of time

What are lagging indicators?

performance measurements resulting from decisions and activities in the past

The primary purpose of a vision statement is to ____.

provide the company with a sense of direction

Employees at various levels within an organization are best served by performance objectives that ______.

relate specifically to what their departments are doing

Employees at various levels within an organization are best served by performance objectives that...

relate specifically to what their departments are doing

The most reliable leading indicators are

strategic outcomes that measure competitiveness and market position

Who is primarily responsible for crafting and implementing business strategy in a multi business organization?

the head of each business unit

Which document spells out the direction a company will take as it anticipates future developments?

the strategic vision

When charting a company's direction, why do managers set objective?

to establish performance targets that the managers hope to achieve, using the company's mission and vision

Which mission statement is written in the most effective manner?

to provide nutritious food at an affordable price, served with a smile

The real purpose of a vision statement is ...

to serve as a management tool for giving the organization a sense of direction

What is the purpose of a company's strategic vision?

to steer the company toward long term growth and profits

Long term objectives are intended to do which of the following?

1. prom action now to improve the organization's performance later 2. prevent a nearsighted management philosophy

Which of the following are short term objectives?

1. quarterly objectives 2. annual objectives

Which of the following are not likely to happen if a company's financial objectives are met or exceeded?

1. revenues will decrease 2. senior executives will be fired 3. the company will go into bankruptcy

Which actions should be taken by organizational units within a company?

1. know their strategic role within the company 2. see themselves as part of a team that includes the entire company 3. produce results that help the company achieve its performance targets

What should the mission statement not focus on the company's goal of making a profit?

1. all commercial businesses aim to make a profit 2. making a profit is best seen as a result of the company's actual mission 3. the mission statement should define "who we are and what we do"

Which actions are often helpful for a company when it adopts a value statement?

1. combining its values, vision, and mission in one document 2. posting the finished values statement on the company website

Better financial performance typically results from which of the following?

1. competitive advantage 2. more competitive vitality 3. a stronger market standing

Why should the mission statement not focus on the company's goal of making a profit?

1. making a profit is best seen as a result of the company's actual mission 2. the mission statement should define "who we are and what we do" 3. all commercial businesses aim to make a profit

Which of the following are part of the fifth and final stage for crafting and executing a company's strategy?

1. monitoring developments 2. adjusting the mission statement 3. evaluating performance

During the final stage of developing and implementing a company strategy, what factors often cause the company to adjust its objectives or mission statement?

1. new opportunities 2. new ideas 3. changing conditions

What is a company slogan?

a brief phrase that summarizes the company's vision

stakeholders

a company's stockholders, employees suppliers, the communities in which the company operates, and society at large

Strategic performance is measured by the rise and fall of a company's ____

competitiveness

The most demanding and lengthy part of the strategy management process is _________.

implementing the strategy

company values

the beliefs, traits, and behavioral norms that company personnel are expected to display in conducting the company's business and pursuing its strategic vision and mission

As a company strategy is implemented, it will typically _______.

work well in some areas and not so well in others

Strategic objectives are goals concerned primarily with an organization's ____.

1. competitive position 2. market standing

Which factors to managers consider when establishing performance objectives?

1. competition from other businesses 2. the company's internal capabilities 3. economic conditions within the industry

When management discovers that there are strategic conflicts among the various levels of an organization, what should management do?

1. consider which low-level strategies might be changes to accommodate high-level strategies 2. adapt high-level strategies to incorporate more appealing ideas from lower levels 3. ensure all conflicts are resolved

Within the hierarchy of a company, a number of strategies are likely to have been developed and implemented by various people. Under what circumstances will the company perform most effectively?

1. top executives clearly communicate a company's strategy to company personnel 2. all employees understand the company's long-term direction 3. all the strategies are unified

Typically, a company's strategy making must ________.

begin at the top of a company

At companies where core values are taken seriously, ________.

1. executives attempt to make the values an integral part of the corporate culture 2. executives demonstrate the values in their own behavior

At companies where core values are taken seriously, ________.

1. executives demonstrate the values in their own behavior 2. executives attempt to make the values an integral part of the corporate culture

What are the best tactics to convince lower level managers and employees to support the company's strategic vision?

1. explaining why the company is taking a particular action 2. sharing updates and progress reports

Members of an organization are most likely to support a new strategic vision if the document ______.

1. is distributed throughout the organization 2. is explained by top executives to as many people as possible 3. explains where the organization is going and why

Which statements about a company's goal-setting process are true?

1. it should coordinate the efforts of each organizational unit 2. It should be a top-down process 3. it should involve all organizational units within the company

Which statements are true about specific, measurable goals?

1. they motivate personnel to try harder 2. the help an organization track its progress 3. they help an organization remain focused on what it is trying to accomplish

Stretch objectives are helpful because they ____.

1. prevent employees from settling for a comfortable level of performance 2. motivate employees to be more productive 3. help an organization perform at its full potential

well chosen objectives are:

1. specific 2. measurable 3. time limited 4. challenging 5. achievable

When setting objectives, which types of performance targets must be established?

1. strategic 2. financial

4 dimensions of a balanced scorecard

1. financial 2. customer 3. internal process 4. organizational (formerly called growth and learning)

The balanced-scorecard approach measures which of the following?

1. financial objectives 2. strategic objectives

A well-designed strategic vision is important to an organization because it...

1. helps managers coordinate efforts toward common goals 2. helps top executives clarify their sense of direction 3. motivates personnel at all levels to help achieve the vision

A company mission statement..

1. identifies the company's products and/or services 2. specifies the buyer needs that the company seeks to satisfy and the customer groups or markets that it serves 3. give the company its own identity

A company mission statement should do which of the following?

1. identify the company's customers or markets 2. establish the company's own identity 3. specify what services and products the company offers

Members of an organization are most likely to support a new strategic vision if the document...

1. is distributed throughout the organization 2. explains where the organization is going and why 3. is explained by top executives to as many people as possible

Which statements are true of a company's strategic vision?

1. it steers the organization in a specific direction 2. it is crafted by the company's top managers 3. it explains why the vision makes sound business sense

A company's mission statement describes the organization's ...

1. present business 2. present purpose

What entrepreneurial skills help managers craft and implement a successful company strategy?

1. noticing signs that the business climate is changing 2. daring to be innovative 3. adjusting the strategy as conditions shift

obligations of a company's board of directors

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 4. institute a compensation plan for top executives that rewards them for actions and results that serve stakeholder interests, and most especially those of shareholders

What purposes are served by a company slogan?

1. to define the organization's direction 2. to motivate personnel to overcome obstacles 3. to help employees maintain focus on the company's purpose

Organizing and guiding a new business activity is called______

entrepreneurship

managing the strategy execution process includes the following principle aspects

1. creating a strategy-supporting structure 2. staffing the organization to obtain needed skills and expertise 3. developing and strengthening strategy-supporting resources and capabilities 4. allocating ample resources to the activities critical to strategic success 5. ensuring the policies and procedures facilitate effective strategy execution 6. organizing the work effort along the lines of best practice 7. installing information and operating systems that enable company personnel to perform essential activities 8. motivating people and tying rewards directly to the achievement of performance objectives 9. creating a company culture conductive to successful strategy execution 10. exerting the internal leadership needed to propel implementation forward

What does the strategy making, strategy executing process entail?

1. developing a strategic vision that charts the company's long term direction, a mission statement that describes the company's purpose, and a set of core values to guide the pursuit of the vision and mission 2. setting objectives for measuring the company's performance and tracking its progress in moving in the intended long term direction 3. crafting a strategy for advancing the company along the path management has charted and achieving its performance objectives 4. executing the chosen strategy efficiently and effectively 5. monitoring developments, evaluating performance, and initiating corrective adjustments in the company's vision and mission statement, objectives, strategy, or approach to strategy execution in light of actual experience, changing conditions, new ideas, and new opportunities.