Business Policy & Strategic Management Ch 7-9

True

According to Alfred Chandler "changes in strategy lead to changes in organizational structure." Ch 7 p. 214

E

According to the information in the text, how many Fortune 500 have women CEOs? A) Two B) Five C) Twelve D) Eighteen E) Twenty-six Ch 7 p. 228

D

All of the following are examples of offerings at companies to promote a corporate wellness culture EXCEPT A) stress management programs. B) health fairs. C) abundance of bicycle racks onsite. D) free health insurance for employees who exercise regularly. E) cash incentives for completing Ironman triathlons. Ch 7 p. 234

D

All of the following are ways and means for altering an organization's culture EXCEPT A) recruitment. B) restructuring of an organization's design. C) role modeling. D) retrenchment. E) mentoring. Ch 7 p. 232 Table 7-17

B

All of the following statements regarding the recent trend in Japan of switching from seniority-based pay to performance-based approaches are true EXCEPT A) the switch is an effort to cut costs. B) the switch is boosting employee morale. C) the switch is an effort to increase productivity. D) the switch opposes the traditional training of Japanese employees to cooperate rather than compete. E) the switch goes against decades of encouraging workers to work in groups instead of individually. Ch 7 p. 226 (bottom of page)

A

An absence of conflict can signal ________ within an organization. A) indifference and apathy B) insight and apathy C) indifference and indignation D) disputes E) all of the above Ch 7 p. 213

True

Annual objectives are key components in the strategic-management process because they dictate how resources will be allocated. Ch 7 p. 208 #1 in list of 5

D

Aspects of an existing culture that are antagonistic to a proposed strategy should be A) preserved. B) emphasized. C) built upon. D) changed. E) celebrated. ch 7 p. 232

True

Avoidance, defusion, and confrontation are the classifications for the various types of conflict that can arise in organizations Ch 7 p. 213

C

Which organizational structure has the disadvantage of ambiguous roles for some senior executives? A) Functional B) Divisional C) Strategic Business Unit (SBU) D) Matrix E) Process Ch 7 p. 218

C

Which organizational structure is the most widely used? A) Departmental B) Strategic business unit C) Functional D) Decentralized E) Matrix Ch 7 p. 215

E

Which term is primarily concerned with shareholder well-being rather than employee well-being? A) Benchmarking B) Reengineering C) Product redesign D) Process management E) Restructuring Ch 7 p. 222

C

Which word or phrase would be most suitable to use in written objective statements? A) Maximize B) Minimize C) 10 percent increase D) Adequate E) As soon as possible Ch 7 p. 209

D

Why do changes in company strategy often require changes in the way an organization is structured? A) Structure dictates how objectives and policies will be established. B) Structure dictates how resources will be allocated. C) Structure should be designed to facilitate the strategic pursuit of a firm. D) All of the above E) None of the above Ch 7 p. 213-214

True

With a divisional structure by customer, an organization can effectively cater to the requirements of clearly defined customer groups. Ch 7 p. 217

False

With a divisional structure, it is possible that competition between divisions may become so intense that it leads to improved sharing of ideas and resources for the common good of the firm. Ch 7 p. 215-216

False

With the matrix structure it is common for functional resources to be duplicated. Ch 7 p. 218

D

For upper-level executives, ________ is the major variable used for compensation incentives. A) Balanced Scorecard performance B) revenue C) net income D) stock price E) none of the above ch 7 p. 226

True

Reengineering does not usually affect the organizational structure or chart, nor does it imply job loss or employee layoffs. Ch 7 p. 222

True

Resistance to change can be considered the single greatest threat to successful strategy implementation Ch 7 p. 223

E

Resistance to change can manifest itself through A) absenteeism. B) sabotaging production machines. C) filing unfounded grievances. D) unwillingness to cooperate. E) all of the above Ch 7 p. 223

False

Six Sigma is generally equally successful in retail firms and manufacturing firms. Ch 7 p. 223

False

Strategies clarify what can and cannot be done in pursuit of an organization's objectives. Ch 7

False

Strategists should strive to preserve, emphasize, and build upon aspects of an existing culture that are antagonistic to a proposed strategy. Ch 7 p. 232

True

Structure dictates how resources will be allocated Ch 7 p. 214

False

Tasks and activities are grouped together by business function in a divisional organizational structure. Ch 7 p. 215-216

True

The United States is a leader globally in promoting women and minorities into mid- and top-level managerial positions in business. Ch 7 p. 229

False

The advantage of the educative change strategy is that implementation is quick and relatively easy. Ch 7 p. 223

Various approaches for managing and resolving conflict can be classified into three categories: avoidance, defusion, and confrontation. Avoidance includes such actions as ignoring the problem in hopes the conflict will resolve itself, or physically separating the conflicting individuals or groups. Defusion can include playing down differences between conflicting parties while accentuating similarities and common interests, compromising so there is neither a clear winner nor loser, resorting to majority rule, appealing to a higher authority, or redesigning present positions. Confrontation is exemplified by exchanging members of conflicting parties so each can gain an appreciation of the other's point of view, or by holding a meeting at which conflicting parties present their views and work through their differences.

The approaches for managing and resolving conflict in an organization can be classified into three categories. Name these three categories and give an example for each. Ch 7 p. 213

False

The focus of restructuring is changing the way work is actually carried out. Ch 7 p. 222

True

The most complex of all organizational structures is a matrix structure. Ch 7 p.218

B

The primary benefit sought from restructuring is A) employee involvement. B) cost reduction. C) increased morale. D) increased number of hierarchical levels in the organization. E) increased innovation. Ch 7 p. 222

False

The rational change strategy is one that presents information to convince people of the need for change Ch 7 p. 223

False

The work and family issue is overwhelmingly a women's issue. Ch 7 p. 227

True

Undesirable conduct such as distorting the records can be a result of overemphasis on achieving objectives. Ch 7 p. 210

True

Unlike strategy formulation, strategy implementation varies considerably among different types and sizes of organizations. Ch 7 p. 207

False

JIT significantly increases the costs of implementing strategies Ch 7 p. 224

D

"All of our locations will be open at least two evenings per week until 8:30 p.m." is an example of a(n) A) administration. B) goal. C) objective. D) policy. E) procedure. Ch 7 p. 211

False

"Beginning in March, production employees will have the option of working up to 12 hours of overtime per week." is an example of a procedure. Ch 7 p. 211 (example of a Policy)

E

1) Which of the following is a management issue central to strategy implementation? A) Devising policies B) Revising reward and incentive plans C) Minimizing resistance to change D) Developing an effective human resources function E) All of the above Ch 7

D

A change strategy that attempts to convince people that the change is to their personal advantage is A) defusion. B) force. C) educative. D) rational. E) compromise Ch 7 p. 223

B

A disagreement between two or more parties on one or more issues is called a(n) A) integrated solution. B) conflict. C) compromise. D) defusion. E) avoidance. Ch 7 p. 213

A

A divisional structure by geographic area is most appropriate when A) organizations have similar branch facilities located in widely dispersed areas. B) an organization offers only a limited number of products or services. C) consumption patterns for its products and/or services are the same worldwide. D) the company's customers in different geographic locations have similar needs and characteristics. E) the firm serves one geographic area. Ch 7 p. 216

E

A divisional structure by product is most effective when A) special emphasis needs to be placed on specific products. B) an organization offers few products. C) an organization's products or services differ substantially. D) special emphasis needs to be placed on specific services. E) all of the above Ch 7 p. 216

True

A dual bonus system is based on both annual objectives and long-term objectives. Ch 7 p. 225

True

A firm's annual objectives can be stated by business segment. Ch 7 p. 209

True

A force change strategy is plagued by low commitment and high resistance. Ch 7 p. 223

False

A functional structure can be effective at eliminating short-term and narrow thinking. Ch 7 p. 215

False

A rational change strategy means giving orders and enforcing those orders. Ch 7 p. 223

True

A recent study reports that nearly 90 percent of employers today offer some kind of wellness incentives or prizes to employees who "get healthier." Ch 7 p. 234

False

A tax benefit of ESOP plans is that they empower owners to work as employees. Ch 7 p. 224

True

Besides reducing worker alienation and stimulating productivity, ESOPs allow firms other benefits, such as substantial tax savings. Ch 7 p. 224

False

Because activities are organized according to the way work is actually performed, a divisional structure by process is similar to the matrix structure. Ch 7 p. 217-218

E

Considerable time and effort should be devoted to assuring objectives are well conceived because they represent the basis for A) monitoring progress toward long-term objectives. B) establishing divisional priorities. C) allocating resources. D) evaluating managers. E) all of the above Ch 7 p. 208 list of 5

A

Changing a strategy to fit an existing culture A) is usually less effective than changing a firm's culture to fit a new strategy. B) is usually more effective than changing a firm's culture to fit a new strategy. C) is just as effective as changing a firm's culture to fit a new strategy. D) is always the best option. E) none of the above Ch 7 p. 232

True

Changing a strategy to fit an existing culture is not as effective as changing a firm's culture to fit a new strategy. Ch 7 p. 232

False

Changing a strategy to fit an existing culture is usually more effective than changing a firm's culture to fit a new strategy. Ch 7 p. 232

C

Conflict in an organization is A) always bad. B) always good. C) not always bad. D) a sign of bankruptcy. E) completely avoidable. Ch 7 p. 213

False

Conflict is highly unusual in well-run organizations. Ch 7 p. 213

True

Recruitment, promotion, and mentoring are ways to alter an organization's culture. Ch 7 p. 232

Work/family strategies have become so popular among companies today that the strategies now represent a competitive advantage for those firms that offer such benefits as elder care assistance, flexible scheduling, job sharing, adoption benefits, an on-site summer camp, employee help lines, pet care, and even lawn service referrals. New corporate titles such as work and life coordinator and director of diversity are becoming common. A corporate objective to become more lean and mean must today include consideration for the fact that a good home life contributes immensely to a good work life. The work/family issue is no longer just a women's issue. A corporate objective to become more lean and mean must today include consideration for the fact that a good home life contributes immensely to a good work life.

Discuss how work life/home life balance is being addressed by organizations Ch 7 p. 227

False

Effective strategy formulation can usually guarantee successful strategy implementation Ch 7 p.206

True

Exchanging members of conflicting parties so each can gain an appreciation of the other's point of view exemplifies a confrontation approach. Ch 7 p. 213

An ESOP is a tax-qualified, defined-contribution, employee-benefit plan whereby employees purchase stock of the company through borrowed money or cash contributions. ESOPs control more than $600 billion in corporate stock in the United States. ESOPs empower employees to work as owners. Besides reducing worker alienation and stimulating productivity, ESOPs allow firms other benefits, such as substantial tax savings.

Explain the nature and role of ESOPs in strategic management Ch 7 p. 224-225

B

Formal statements of organizational philosophy, charters, creeds, materials used for recruitment and selection, and socialization help an organization A) abide by SEC rules. B) link culture to strategy. C) set guidelines for firing. D) increase profits. E) manage conflicts between stakeholders. Ch 7 p. 232

True

Four types of resources that can be used to achieve desired objectives are financial, physical, human, and technological. Ch 7 p. 211 (Allocate Resources section)

D

Glass ceiling refers to A) the reality that most companies do not offer paternity leave for fathers as a benefit. B) the understanding that a good home life for employees contributes to a good work life and value for the firm. C) the focus on flexible scheduling, job sharing, and other quality of life benefits. D) the invisible barrier in many firms that bars women and minorities from top-level management positions. E) the decline since 1970 in the percentage of women with college degrees. Ch 7 p. 228

False

Holding a meeting at which conflicting parties present their views and work through their differences is part of the defusion technique of managing conflict. Ch 7 p. 213 (part of confrontation technique)

False

Horizontal consistency is less important than vertical consistency in developing annual objectives, but it still contributes to improved objectives. Ch 7 p. 210

In contrast to restructuring, reengineering is concerned more with employee and customer well-being than shareholder well-being. Reengineering does not usually affect the organizational structure or chart, nor does it imply job loss or employee layoffs. Whereas restructuring is concerned with eliminating or establishing, shrinking or enlarging, and moving organizational departments and divisions, the focus of reengineering is changing the way work is actually carried out. Reengineering is characterized by many tactical (short-term, business-function-specific) decisions, whereas restructuring is characterized by strategic (long-term, affecting all business functions) decisions

How does reengineering differ from restructuring? Ch 7 p. 222

False

Implementing strategy affects all the functional areas of a business and may influence some divisional areas of a business. Ch 7

E

In 2017, which governmental entity will impose penalties up to $450 on any employee who fails to undergo certain health screenings or treatment plans? A) City of Boston B) City of New York C) Hennepin County Minnesota D) State of Massachusetts E) State of Maryland Ch 7 p. 234

False

In Japan, performance rather than seniority has traditionally been the key factor in determining pay. Ch 7 p. 226

True

In developing an organizational chart, avoid having a particular person reporting to more than one person in the chain of command. Ch 7 p. 220

False

In publicly held U.S. companies it is becoming increasingly common to combine the positions of chairperson of the board and the CEO. Ch 7 p. 219

False

In terms of number of employees, restructuring usually involves increasing the size of the firm. Ch 7 p. 222

False

In the context of conflict management and resolution, ignoring the problem in the hopes that the conflict will resolve itself is classified as a defusion technique. Ch 7 p. 213 (It's Avoidance)

True

It is always easier to say you are going to do something (strategy formulation) than to actually do it (strategy implementation). Ch 7 p. 206

B

Just-in-time describes A) implementing strategies just before bankruptcy. B) delivering materials just as they are needed. C) a scheduling method for meetings. D) a personnel planning method. E) a process for improving quality Ch 7 p. 224

The four basic ways a divisionally structured firm could be organized are: 1) by geographic area, 2) by product or service, 3) by customer, and 4) by process.

List the four basic ways a divisionally structured firm could be organized. Ch 7 p. 215

Students should list three of the following: 1) represent the basis for allocating resources; 2) are a primary mechanism for evaluating managers; 3) are the major instrument for monitoring progress toward achieving long-term objectives; 4) establish organizational, divisional, and departmental priorities; and 5) they are essential for keeping a strategic plan on track.

List three of the primary reasons annual objectives are essential for strategy implementation Ch 7 p. 208

True

Medium-sized firms tend to be divisionally structured, whereas large firms tend to use an SBU (strategic business unit) or matrix structure. Ch 7

A

Medium-sized firms tend to use which type of structure? A) Divisional B) Matrix C) SBU D) Functional E) Centralized Ch 7

True

Most large companies have abandoned the functional structure in favor of decentralization. Ch 7 p. 215

Possible answers include: 1) to offer extensive or limited management development workshops and seminars; 2) to centralize or decentralize employee-training activities; 3) to recruit through employment agencies, college campuses and/or newspapers; 4) to promote from within or to hire from the outside; 5) to promote on the basis of merit or on the basis of seniority; 6) to tie executive compensation to long-term and/or annual objectives; 7) to offer numerous or few employee benefits; 8) to negotiate directly or indirectly with labor unions; 9) to delegate authority for large expenditures or to retain this authority centrally; 10) To allow much, some, or no overtime work; 11) to establish a high- or low-safety stock of inventory; 12) to use one or more suppliers; 13) to buy, lease, or rent new production equipment; 14) the degree of quality control; 15) to establish many or only a few production standards; 16) to operate one, two, or three shifts; 17) to discourage using insider information for personal gain; 18) to discourage sexual harassment; 19) to discourage smoking at work; 20) to discourage insider trading; and 21) to discourage moonlighting.

Name at least six issues indicated by the authors that may require a management policy. Ch 7 p. 212 in Table 7-4

False

Organizational change today should be viewed as a project or event rather than as a continuous process. Ch 7 p. 223

True

People's anxieties are raised with the thought of change because they fear economic loss, inconvenience, uncertainty, and a break in normal social patterns. Ch 7 p. 223

E

Policies A) let both employees and managers know what is expected of them. B) provide a basis for management control. C) allow coordination across organizational units. D) reduce the amount of time managers spend making decisions. E) all of the above Ch 7 p. 211 in list of 6

False

Policies largely dictate how structure will be established. Ch 7 p. 213 (Beginning of Math Structure with Strategy)

True

Policies refer to specific guidelines, methods, procedures, rules, forms, and administrative practices established to support and encourage work toward stated goals. Ch 7 p. 211

C

Wellness programs A) are too expensive for most companies to afford. B) are desired by employees but don't provide value to the company. C) are becoming more prevalent as companies realize the benefits to the firm. D) attract prospective employees who then fail to take advantage of them. E) are facing legal challenges from the health-care industry. Ch 7 p. 234

C

What action involves reconfiguring or redesigning work, jobs, and processes for the purpose of improving cost, quality, service, and speed? A) Restructuring B) Downsizing C) Reengineering D) Delayering E) Recruiting Ch 7 p. 222

Student answers should include five of the following: Strategy formulation is positioning forces before the action, whereas strategy implementation is managing forces during the action. Strategy formulation focuses on effectiveness, whereas strategy implementation focuses on efficiency. Strategy formulation is primarily an intellectual process, whereas strategy implementation is primarily an operational process. Strategy formulation requires good intuitive and analytical skills, whereas strategy implementation requires special motivational and leadership skills. Strategy formulation requires coordination among a few individuals, whereas strategy implementation requires coordination among many individuals. Strategy formulation is science with tools and techniques, whereas strategy implementation is an art to energize people. Strategy formulation and strategy implementation are both difficult to do well, but strategy implementation is considerably more difficult to do well. Strategy orientation is process oriented, whereas strategy implementation is people oriented. Strategy formulation is primarily the responsibility of top managers, whereas strategy implementation is primarily the responsibility of mid and lower level managers.

What are five differences between strategy formulation and strategy implementation? Ch 7 p. 208 Figure 7-2

A divisional structure has some clear advantages. The first is that accountability is clear. Also, it creates career development opportunities for managers, allows local control of local situations, leads to a competitive climate within an organization, and allows new businesses and products to be added easily. A divisional structure does have its limitations. A divisional structure is costly because each division requires functional specialists who must be paid, there exists some duplication of staff services, facilities and personnel, and better-qualified individuals require higher salaries. It is also costly because it requires an elaborate headquarters-driven control system. Competition between divisions may become so intense that it is dysfunctional. A divisional structure can lead to limited sharing of ideas and resources. Some regions, products, or customers may receive special treatment.

What are the advantages and disadvantages of a divisional organizational structure? Ch 7 p. 216 Table 7-8

A

What are the three categories of approaches for managing and resolving conflict? A) Avoidance, defusion, and confrontation B) Avoidance, apathy, and defusion C) Ignorance, indifference, and apathy D) Defusion, apathy, and avoidance E) Indifference, avoidance, and role-playing Ch 7 p. 213

Although there are various approaches for implementing changes, three commonly used strategies are a force change strategy, an educative change strategy, and a rational or self-interest change strategy. A force change strategy involves giving orders and enforcing those orders; this strategy has the advantage of being fast, but low commitment and high resistance plague it. An educative change strategy is one that presents information to convince people of the need for change; the disadvantage of an educative change strategy is that implementation becomes slow and difficult. However, this type of strategy evokes greater commitment and less resistance than does the force change strategy. Finally, a rational or self-interest change strategy is one that attempts to convince individuals the change is to their personal advantage. When this appeal is successful, strategy implementation can be relatively easy.

What are the three commonly used strategies or approaches for implementing changes in an organization? Give an advantage and/or disadvantage for each type of approach Ch 7 p. 223

C

What change strategy involves giving orders and enforcing those orders? A) Self-interest B) Educative C) Force D) Rational E) Defusion Ch 7 p. 223

E

What is NOT one of the basic ways a divisional structure can be organized? A) By geographic area B) By product C) By customer D) By process E) By cost Ch 7 p. 215

C

What is the most complex form of organizational structure? A) Divisional B) SBU C) Matrix D) Functional E) Geographic Ch 7 p. 218

D

What pay strategy requires employees or departments to establish performance targets, which, if exceeded, result in bonuses for all members? A) Profit sharing B) Bonus system C) Salary D) Gain sharing E) Hourly wage system Ch 7 p. 226

B

What term is used to describe specific guidelines, methods, procedures, rules, forms and administrative practices established to support and encourage work toward stated goals? A) Long-term objectives B) Policies C) Annual objectives D) Strategies E) Values Ch 7 p. 211

B

What type of organizational structure promotes specialization of labor and allows rapid decision making? A) Divisional structure by product B) Functional structure C) Divisional structure by customer D) Strategic business unit E) Matrix structure Ch 7 p. 215

True

When attachments to a culture are severed in an organization's attempt to change direction, employees and managers often experience deep feelings of grief. Ch 7 p. 232 (bottom of page)

True

When developing an organizational chart, it is not wise to recommend that any executive have a dual title. Ch 7 p. 219

False

When developing an organizational chart, the title president should be reserved for the top executive of the firm. Ch 7 p. 219

D

When developing an organizational chart, you should A) recommend dual titles for executives. B) use the title "president" for the top executive of the firm. C) make sure that the chief financial officer is not at the same level as the chief operating officer (COO). D) have division presidents report to a chief operating officer (COO). E) have employees report to more than one person in the chain of command. Ch 7 p. 220

True

When the rational type change strategy is successful, strategy implementation can be relatively easy. Ch 7 p. 223

E

Which approach for managing and resolving conflict involves exchanging members of conflicting parties so that each can gain an appreciation of the other's point of view? A) Avoidance B) Resistance C) Compliance D) Defusion E) Confrontation Ch 7 p. 213

A

Which approach for managing and resolving conflict involves ignoring the problem in hopes that the conflict will resolve itself? A) Avoidance B) Resistance C) Compliance D) Defusion E) Confrontation Ch 7 p. 213

D

Which approach for managing and resolving conflict involves playing down differences between conflicting parties, while accentuating similarities and common interests? A) Avoidance B) Resistance C) Compliance D) Defusion E) Confrontation Ch 7 p. 213

B

Which divisional structure stands out for effectiveness when a few major customers are of paramount importance and many different services are provided to these customers? A) By geographic area B) By customer C) By product D) By process E) By cost Ch 7 p. 217

E

Which is NOT a characteristic of policies? A) let both employees and managers know what is expected of them B) provide a basis for management control C) allow coordination across organizational units D) reduce the amount of time managers spend making decisions E) represent the basis for allocating resources Ch 7 p. 211 in list of 6

A

Which is NOT a major factor that commonly prohibits effective resource allocation? A) Underprotection of resources B) Organizational politics C) Having vague strategy targets D) A reluctance to take risks E) A lack of sufficient knowledge Ch 7 p. 211 (2nd paragraph under Allocate Resources)

C

Which of the following is NOT a management issue central to strategy implementation? A) Devising policies B) Revising reward and incentive plans C) Performing an internal audit D) Minimizing resistance to change E) Developing an effective human resources function Ch 7

C

Which of the following is NOT true about objectives? A) They should be communicated throughout the organization. B) They should have an appropriate time dimension. C) They should use terms like "maximize," "minimize," and "as soon as possible." D) They should be measurable. E) They should be consistent. Ch 7 p. 209

B

Which of the following is in keeping with the current view of organizational change? A) Organizational change is a project. B) Organizational change is a continuous process. C) Organizational change is an event. D) Organizational change involves unfreezing behavior, changing the behavior, and then refreezing the new behavior. E) All of the above Ch 7 p. 223