Chapter 2: Strategic Human Resource Management

Which of the following statements is true of the administrative linkage level between the human resource management function and the strategic management function? A) In this level, the human resource management department is completely divorced from any component of the strategic management process. B) This level recognizes the importance of human resources in implementing the strategic plan. C) In this level, the human resource management designs systems and/or programs that implement the strategic plan. D) This level allows for consideration of human resource issues during the strategy formulation process. E) In this level, the human resource management functions are built right into the strategy formulation and implementation processes.

A) In this level, the human resource management department is completely divorced from any component of the strategic management process.

Samuel, a plant manager, sets targets for his work lines every week. He rewards those who succeed and he makes note of those who do not reach their set target, placing them on warning. How would you describe this company's cost strategy? A) The company has a high concern for quantity. B) The company has a long-term focus. C) The company performs tasks that are not independent. D) The company is willing to take risks. E) The company undertakes challenging and nonrepetitive work.

A) The company has a high concern for quantity.

Sean, the HR manager, has been asked to share issues in the strategy formulation process. How do you know this is part of a two-way linkage? A) The strategic planning function and the human resource management function are interdependent. B) The two-way linkage level is the lowest level of integration. C) The human resource management executive has no time to take a strategic outlook toward human resource issues. D) The human resource function is limited to monitoring day-to-day activities. E) The strategic planning function and the human resource management function are completely dependent.

A) The strategic planning function and the human resource management function are interdependent.

Which of the following is the lowest level of integration between the human resource management function and the strategic management function? A) administrative linkage B) two-way linkage C) integrative linkage D) executive linkage E) one-way linkage

A) administrative linkage

Juanita, the HR manager, checks her email, completes paperwork, and returns voicemail. These activities are part of the A) administrative linkage. B) one-way linkage. C) two-way linkage. D) integrative linkage. E) executive linkage.

A) administrative linkage.

A company employing a differentiation strategy requires employees who A) are highly creative and cooperative. B) have high concern for quantity. C) tend to be risk averse. D) have a short-term focus. E) have less tolerance for ambiguity.

A) are highly creative and cooperative.

In Your Eyes, Inc., a high-end eyewear manufacturer, has training programs to ensure that its current employees always design and manufacture eyewear in keeping with its high quality standards. Which of the following directional strategies has In Your Eyes adopted? A) concentration B) liquidation C) benchmarking D) rightsizing E) divestment

A) concentration

Which of the following is a strategy made up of retrenchment and liquidation? A) divestment strategy B) concentration strategy C) internal growth strategy D) external growth strategy E) diversification strategy

A) divestment strategy

Companies attempting to integrate vertically or horizontally or to diversify exhibit a(n) ________ strategy. A) external growth B) divestment C) concentration D) liquidation E) internal growth

A) external growth

A company that follows an overall cost leadership strategy A) focuses on becoming the lowest cost producer in an industry. B) strives to reduce the cost of products in its industry. C) does not use automated procedures and systems. D) endeavors constantly to increase the quality of its products. E) focuses on creating products that provide high value for their cost.

A) focuses on becoming the lowest cost producer in an industry.

To achieve 100 percent compliance on the next 3 years' compliance inspections is an example of a A) goal. B) mission. C) strategy. D) vision. E) value.

A) goal.

Which of the following linkages has its human resource management functions built right into the strategy formulation and implementation processes? A) integrative linkage B) administrative linkage C) one-way linkage D) two-way linkage E) executive linkage

A) integrative linkage

Fisher Inc. wants to bring radical change to the current skills that exist in the organization, so they are going to employ ________ strategies. A) internal growth B) emergent C) concentration D) downsizing E) integrative

A) internal growth

When an organization develops integrated manufacturing systems such as advanced manufacturing technology and just-in-time inventory control, it needs to assess the employee skills required to run these systems and train them accordingly. These assessments and training programs intended to enable an organization to achieve its goals fall under A) strategic human resource management. B) the job characteristics model. C) diversity management. D) the employee stock ownership plan. E) participative management.

A) strategic human resource management.

CellServ Inc., a large manufacturer of cell phones, has decided to enhance revenues by expanding its product line. It has identified the talking watch market as a possible market to expand and has identified Genesys, Inc. as a potential competitor. CellServ Inc. is currently in the ________ stage of the strategic management process. A) strategy formulation B) strategy evaluation C) strategy execution D) strategy consultation E) strategy implementation

A) strategy formulation

Taher, an employee with Wilco Plumbing, has been transferred to a different division within the company. To facilitate a smooth transition, the company has initiated a program for Taher that will provide him with the knowledge and skills required to perform the new role effectively. Which of the following human resource management practices did Wilco Plumbing perform? A) training B) job analysis C) performance management D) selection E) recruitment

A) training

The goal of ________ in an organization is to deploy and allocate resources in a way that it provides the company with a competitive advantage. A)strategic management B)the HRM function C)competitive analysis D)controlling systems E)cost analysis

A)strategic management

________, goals, external analysis, internal analysis, and strategic choices are the five major components of the strategy formulation process. A) Recruitment B) Mission C) Orientation D) Job designing E) Job engagement

B) Mission

When Smart Electric condensed all its parts factories into one large location, the company increased research and development and customer service, and decreased its sales force. How would this practice help the company to become a low-cost producer? A) The company created a product that was different from other products in the market. B) The company constructed efficient large-scale facilities. C) The company invested heavily in branding its product. D) The company invested in creating a unique customer service process. E) The company started using the latest machines for its production facility.

B) The company constructed efficient large-scale facilities.

Which of the following is true of one-way linkage? A) In this level, the human resource management executive has no time or opportunity to take a strategic outlook toward human resource issues. B) This level often leads to strategic plans that the company cannot successfully implement. C) In this level, the human resource management functions are built right into the strategy formulation process. D) In this level, the human resource management function is involved in both strategy formulation and strategy implementation. E) It lets the human resource management executive give strategic planners information about the company's human resource capabilities.

B) This level often leads to strategic plans that the company cannot successfully implement.

Alkort Inc. employs cost strategies to ensure efficient production. Therefore, the company is likely to A) focus on high-quality production rather than efficient production. B) be very specific in the skills they require from their employees. C) shy away from investing in training employees in the skills they need. D) seek greater creativity by providing broader career paths to employees than companies that employ differentiation strategy. E) encourage their employees to take greater risks.

B) be very specific in the skills they require from their employees

Jodannis Inc. is an online retailer of home and garden products, including furniture and accessories. The company is known for its unique approach to customer support, which is known for going above and beyond in satisfying customer complaints and issues. What kind of a strategy is Jodannis using? A) cost leadership B) differentiation C) disintermediation D) penetration E) cannibalization

B) differentiation

A common practice for companies in today's market is to look within at what is working and what is not. This is an example of a(n) A) job analysis. B) internal analysis. C) job characteristics model. D) competitor analysis. E) job modeling.

B) internal analysis.

Strategies focusing on market development, product development, innovation, or joint ventures make up the ________ strategy of an organization. A) retrenchment B) internal growth C) divestment D) liquidation E) benchmarking

B) internal growth

A company where employees constantly assimilate knowledge through monitoring the environment, making decisions, and flexibly restructuring the company to compete in that environment is known as a ________ organization. A) legacy B) learning C) downsized D) traditional E) transactional

B) learning

Sandra retired from a large, multinational paper company last year. She receives health care benefits as well as a pension from the company. At present, Sandra falls under the category of a A) contingent workforce. B) legacy workforce. C) temporary workforce. D) consultant workforce. E) contract workforce.

B) legacy workforce.

Javier, an HR manager at a technology firm, is entrusted with the task of hiring a member for a new team. He has already received information about what the new role will entail as well as the tasks that the new employee will be performing. He is currently using several media to seek applicants for the role. Which of the following human resource management (HRM) practices is Javier performing? A) job designing B) recruitment C) performance management D) training E) job analysis

B) recruitment

Using websites like Indeed.com, Monster.com, and LinkedIn, a company can begin A) selection. B) recruitment. C) training. D) development. E) appraisal.

B) recruitment.

The ________ process helps a firm to identify job applicants with the necessary knowledge, skills, abilities, and other characteristics to help the firm achieve its goals. A) appraisal B) selection C) performance management D) training E) differentiation

B) selection

Talkin & Co. is a large manufacturer of pocketbooks and accessories. It has always lagged behind its closest competitor, SwagBag. It plans to overtake SwagBag by leveraging its strength in women's purses and entering markets in the Midwest that it had traditionally ignored. Talkin & Co. is in the ________ phase. A) strategy implementation B) strategy formulation C) administrative linking D) selecting and training E) task designing

B) strategy formulation

Strategic planning groups decide on a strategic direction during the ________ phase. A) strategy formulation B) strategy implementation C) administrative linkage D) strategic analysis E) market development

B) strategy implementation

The ________ component of the strategic management process consists of structuring the organization, allocating resources, ensuring that the firm has skilled employees in place, and developing reward systems that align employee behavior with the organization's strategic goals. A) task designing B) strategy implementation C) administrative linking D) strategy formulation E) operational implementation

B) strategy implementation

A(n) ________ is a story of how a firm will create value for customers and how it will do so profitably. A)design specification B)business model C)job characteristics model D) administrative linkage E)process architecture

B)business model

The ________ margin is calculated as the number of units sold times the contribution margin. A)holding cost B)gross C)profit D)fixed cost E)overhead rate

B)gross

Buttons, Inc. is evaluating its resources so that it can compete with other companies. They have evaluated their plant, equipment, and geographic location. What other physical resource do they need to evaluate to complete this scan? A)controlling system B)technology C)planning system D)employee skill E)experience of employees

B)technology

Which of the following is an example of a fixed cost? A)raw materials B)utilities C)operating cost D)direct labor costs E)packaging costs

B)utilities

Which of the following statements is true of the strategic implementation stage of the strategic management process? A) During this stage, an organization analyzes its strengths and weaknesses. B) This is the first stage of the strategic management process, which is sequential in nature. C) During this stage, an organization follows through on a strategy chosen in the strategy formulation stage. D) During this stage, an organization defines its mission and goals. E) This stage is independent of the formulation stage in the strategic management process.

C) During this stage, an organization follows through on a strategy chosen in the strategy formulation stage.

Which of the following statements is true of intended and emergent strategies? A) The new focus on strategic human resource management has tended to focus primarily on emergent strategies. B) Intended strategies and emergent strategies are very similar to each other in the way they are developed. C) Intended strategies are the result of the rational decision-making process used by top managers as they develop a strategic plan. D) Emergent strategies can be thought of as what organizations intend to do as opposed to what they actually do. E) Most emergent strategies are identified by those who are at the top of the organizational hierarchy.

C) Intended strategies are the result of the rational decision-making process used by top managers as they develop a strategic plan.

Which of the following statements is true of the SWOT analysis? A) It can be used to identify an organization's internal strengths and weaknesses, but not the external threats posed by competitors. B) It can be used to identify an organization's external strengths and weaknesses, but not its internal strengths and weaknesses. C) It gives the strategic planning team of an organization all the information it needs to generate a number of strategic alternatives. D) It fails to recognize the opportunities and threats in the external environment that are people-related. E) An analysis of a company's internal strengths and weaknesses using the SWOT analysis eliminates the need for input from the HRM function.

C) It gives the strategic planning team of an organization all the information it needs to generate a number of strategic alternatives.

________ is what is left after a firm pays its variable costs and fixed costs. A) Contribution margin B) Overhead cost C) Profit D) Variance E) Holding cost

C) Profit

________ is a planned effort to facilitate the learning of job-related knowledge, skills, and behavior by employees. A) Recruitment B) Development C) Training D) Performance management E) Selection

C) Training

Tinory Inc. supplies widgets to specific tools used by mechanical engineers. There was talk of expanding its product line, but the company has chosen to focus on creating the best widgets possible for its market. Tinory also is ensuring that all employees maintain the requisite skills to develop and create these widgets. The company is using a(n) ________ strategy. A) internal growth B) emergent C) concentration D) job design E) cost

C) concentration

Rovers & Steinfeld is a consulting firm that helps organizations examine their operating environments. Their scope of work would be considered a(n) A) job modeling. B) internal analysis. C) external analysis. D) value chain analysis. E) job analysis.

C) external analysis.

Saunders Supplies has recently acquired Dish & Co. and TableTop. Since they all are similar in market share, Saunders Supplies is planning to rebrand Dish & Co. to be a meal delivery company and TableTop to be a tableware and linen company. This is an example of which strategy? A) internal growth strategy B) retrenchment strategy C) external growth strategy D) divestment strategy E) concentration strategy

C) external growth strategy

An organization uses ________ to measure the quantity and quality of its resources. A) job modeling B) realistic job preview C) internal analysis D) value chain analysis E) job analysis

C) internal analysis

Inert Graphics sold 300,000 graphics cards and had a gross margin of $900,000. However, its fixed costs were $750,000 and its variable costs were $200,000. Inert Graphics had a A) profit of $50,000. B) breakeven bottom line. C) loss of $50,000. D) profit of $150,000. E) loss of $150,000.

C) loss of $50,000.

To provide excellent customer service to those in the electrical industry through the use of high-tech solutions is an example of a A) work structure. B) goal. C) mission. D) code of conduct. E) vision.

C) mission.

At least annually, companies evaluate employees based on their activities and outcomes aligned with the organization's objectives. This then leads to discussions of future individual goals and professional development opportunities. This practice demonstrates that a company has a practice of A) divestment. B) differentiation. C) performance management. D) job enlargement. E) realistic job preview.

C) performance management.

The strategic management decision-making process usually takes place at a firm's highest levels, with a firm's strategic planning group, which includes A) middle managers and directors. B) the chief executive officer and supervisors. C) the chief executive officer and the president. D) accountants and supervisors. E) the directors and labor union representatives.

C) the chief executive officer and the president

In a(n) ________, an organization is restricted from considering the human resource issues while formulating its strategic plan. A) integrative linkage B) one-way linkage C) two-way linkage D) administrative linkage E) analytical linkage

C) two-way linkage

Cakes Galore, a new bakery in town, is attempting to maximize profits but knows the company cannot charge too much for its cakes and pastries in this market. As the company explores locations, the owner notes rent, property taxes, and parking. These are examples of ________ costs. A)acquisition B)procurement C)fixed D)variable E)marginal

C)fixed

Which of the following is a challenge of downsizing? A) It becomes difficult to change an organization's culture after downsizing. B) It fails to force employees to cooperate with management. C) It restricts organizations from developing new and positive relationships. D) It is difficult to boost the morale of employees who remain after downsizing. E) It is not an effective strategy if an organization wants to make way for fresh ideas.

D) It is difficult to boost the morale of employees who remain after downsizing.

External analysis and internal analysis combined constitute the A) value analysis. B) training analysis. C) development analysis. D) SWOT analysis. E) recruitment analysis

D) SWOT analysis.

Which of the following statements is true regarding companies that are not diversified? A) Such companies typically use quantitative measures of performance to evaluate managers. B) In such companies, top managers have less knowledge about managers below them in the hierarchy. C) In such companies, executives tend to focus on evaluating the objective performance results of their subordinate managers. D) They have evaluation systems that call for subjective performance assessments of managers. E) People above the first-level managers in the hierarchy of such companies have limited knowledge about work-related tasks that should be performed.

D) They have evaluation systems that call for subjective performance assessments of managers.

Which of the following statements is true of companies that employ differentiation strategies? A) They primarily focus on efficient production. B) They only train employees in specific required skill areas. C) They want their employees to be risk averse. D) They want their employees to take a balanced approach to process and results. E) They expect their employees to exhibit role behaviors that are relatively repetitive.

D) They want their employees to take a balanced approach to process and results.

Strategies emphasizing market share or operating costs are considered ________ strategies. A) innovation B) divestment C) downsizing D) concentration E) cannibalization

D) concentration

On Board & Co. is facing financial difficulties mainly due to losses incurred by its water sports division. As a consequence, it has decided to shut down operations of this division. Which of the following strategies has On Board adopted? A) concentration strategy B) internal growth strategy C) external growth strategy D) divestment strategy E) diversification strategy

D) divestment strategy

During the strategic implementation stage of the strategic management process, an organization A) decides on a strategic direction. B) defines its mission and goals. C) establishes external opportunities and threats. D) ensures that it has skilled employees in place. E) determines its internal strengths and weaknesses.

D) ensures that it has skilled employees in place.

As a company prepares to look for talent in a particular position or group, it can evaluate the tasks needed, complete a talent inventory of current skill sets, and prepare a job description with knowledge, skills, and abilities (KSAs). This practice is also known as A) job analysis. B) internal analysis. C) external analysis. D) job design. E) realistic job preview.

D) job design.

A ________ workforce describes the former workers to whom a firm still owes financial obligations. A) contingent B) consultant C) temporary D) legacy E) contract

D) legacy

The one-way linkage level A) is the lowest level of integration. B) restricts companies from considering human resource issues while formulating a strategic plan. C) is multifaceted, based on continuing rather than sequential interaction. D) often leads to strategic plans that companies cannot successfully implement. E) segregates the human resource management department from other components of the strategic management process.

D) often leads to strategic plans that companies cannot successfully implement.

Watrous & Sons has completed its strategic business plan and informed HR of how many employees will now need to be hired or retrained. This is an example of A) integrative linkage. B) executive linkage. C) two-way linkage. D) one-way linkage. E) administrative linkage

D) one-way linkage.

Which of the following describes the ways an organization will attempt to fulfill its mission and achieve its long-term goals? A) internal analysis B) external analysis C) vision statement D) strategic choice E) code of conduct

D) strategic choice

Untapped labor pools are an example of a(n) ________ to an organization's operating environment. A) external linkage B) internal linkage C) marketing advantage D) strategic threat E) strategic opportunity

D) strategic threat

Tamara is leading the strategic groups through an exercise to define the company's mission and goals through a SWOT (strengths, weaknesses, opportunities, and threats) analysis. She is employing A) strategy implementation. B) task design. C) selection and training. D) strategy formulation. E) strategy evaluation.

D) strategy formulation.

Which of the following statements is true of variable costs incurred by firms? A)These costs are independent of the number of goods produced by firms. B)The rent and interest paid by firms are examples of variable costs. C)These costs are the difference between what firms charge for their products and the fixed costs of the products. D)These costs change directly with the units produced. E)These costs are the total amount of margin made by a firm

D)These costs change directly with the units produced.

Which of the following is true regarding the differentiation strategy? A) The differentiation strategy cannot protect a company from price sensitivity. B) Brand images play a negligible role in differentiation strategies. C) Companies using the differentiation strategy have to build large-scale facilities. D) Companies have to control their overhead costs to use the differentiation strategy. E) Companies achieve above-average returns if they succeed in their differentiation strategy.

E) Companies achieve above-average returns if they succeed in their differentiation strategy.

________ attempts to identify an organization's strategic opportunities and threats. A) Competitive analysis B) Marketing analysis C) Internal analysis D) Strategic analysis E) External analysis

E) External analysis

________ is a planned effort to facilitate the learning of job-related knowledge, skills, and behavior by employees. A) Internal growth B) Performance evaluation C) Concentration D) Job design E) Training

E) Training

The basic premise behind strategy implementation is that A) boosting employee productivity is more important than effectiveness in production. B) short-term orientation is detrimental to an organization's economic success. C) external analysis and internal analysis should be performed during implementation. D) the quality of resources is more important than the quantity of resources. E) choice of organizational processes and structural forms makes an economic difference.

E) choice of organizational processes and structural forms makes an economic difference.

Companies engaged in a(n) ________ strategy require employees to have a high concern for quantity and a short-term focus. A) integrative B) emergent C) concentration D) job design E) cost

E) cost

Marius has been brought in as a consultant for a large organization. He is tasked with identifying the goals, policies, and action sequences the company should take to offset competitive challenges. Marius will be implementing A) operational management. B) transactional management. C) management by objectives. D) process mapping. E) strategic management.

E) strategic management.

Bebor Financial offers a high level of pay relative to that of competitors. This can ensure that A) the company's overall labor costs are low. B) employees are highly satisfied with the work. C) the organization is always in the growth stage. D) organizational productivity is satisfactory. E) the company attracts high-quality employees.

E) the company attracts high-quality employees

In the two-way linkage level, A) the human resource management executive has no time or opportunity to take a strategic outlook toward human resource issues. B) the strategic planning function and the HRM function are independent of each other. C) the second step involves the strategic planning team informing the human resource management function of various strategies. D) the last step involves human resource management executives analyzing the human resource implications of the strategies suggested in the previous steps. E) the human resource issues are allowed for consideration during the strategy formulation process.

E) the human resource issues are allowed for consideration during the strategy formulation process.

True or False: An overall cost leadership strategy is achieved primarily by offering unique product features.

False

True or False: Companies engaged in cost strategies develop internally consistent pay systems with negligible pay differentials between superiors and subordinates.

False

True or False: Companies that are not diversified use objective measures of performance to evaluate managers.

False

True or False: Differentiation companies will have compensation systems that are geared toward internal rather than external equity.

False

True or False: Executives who have extensive knowledge of the behaviors that lead to effective performance tend to focus on evaluating the objective performance results of their subordinate managers.

False

True or False: Strategies emphasizing market share or operating costs are called "external growth" strategies.

False

True or False: The strategy a company is pursuing does not have an impact on the types of employees that it seeks to recruit and select

False

True or False: To be maximally effective, the human resource management function of a company must be isolated from the company's strategic management process

False

True or False: A learning organization constantly monitors its environment, assimilates information, makes decisions, and flexibly restructures itself to compete in an ever-changing environment.

True

True or False: Companies going through downsizing often develop compensation programs that tie an individual's compensation to the company's success.

True

True or False: Employees in companies with a differentiation strategy need to be highly creative and be risk takers.

True

True or False: Job design addresses what tasks should be grouped into a particular job.

True

True or False: Maria is excited to meet with her supervisor and go over her year-end review. She has heard that there can be an increase in pay for high performance. Companies do tie pay to performance.

True

True or False: Standard & Cramer is planning to downsize. Management sees a positive outcome being the opportunity to change the company's culture.

True

True or False: Strategic choice describes the way an organization attempts to fulfill its mission and achieve its long-term goals.

True

True or False: Strategy implementation includes structuring an organization and allocating resources

True