MGT 4150 Chapter 10
The three components of building a capable organization are
D. staffing the organization, acquiring, developing, and strengthening key resources and competitive capabilities, and structuring the organization and work effort.
Which of the following statements about developing organizational competencies and capabilities is FALSE?
Building organizational capabilities is best and most cost-effectively accomplished by hiring a cadre of people with the right talent and expertise, putting them together in a single work group, and then teaming the work group with key strategic allies/partners to mesh the skills, expertise, and competencies needed to perform the desired capabilities with some proficiency.
Which of the following is NOT one of the traits of core competencies and/or competitive capabilities?
Core competencies generally grow out of company efforts to master a strategy-critical technology or to invent and patent a valuable technology.
Which of the following statements about implementing and executing a new strategy is true?
Executing strategy is a job for a company's whole management team, not just a few senior managers.
Which of the following statements falsely characterizes the managerial task of executing strategy?
Implementing new strategic initiatives principally involves employing managerial techniques to overcome resistance to change.
Which of the following is NOT a characteristic of a network structure?
It established that no one firm has a central control over the others.
Which of the following is TRUE of the capability building process?
It requires two things: (1) developing the ability to do something, however imperfectly or inefficiently, and (2) molding these efforts into an organizational ability and as experience grows and personnel perform the activity consistently well and at an acceptable cost, it is transformed into a tried-and-true competence and as they continue to polish and refine their know-how into further improvements, they then create a real competitive capability.
What is the rule for organizing the work effort to support good strategy execution?
Match the firm's organizational structure to its unique strategy.
Which of the following statements about outsourcing the performance of value chain activities to outside specialists is FALSE?
Outsourcing support services often has the disadvantage of raising fixed and variable costs.
Which of the following is one of the first steps to take in launching the strategy execution process?
Put together a talented management team with the right mix of experiences, skills, and abilities to get things done.
Which of the following statements about recruiting and retaining capable employees is FALSE?
Recruiting and retaining capable employees are usually much more important to good strategy execution and the achievement of true operating excellence than is assembling a capable top management team.
What is the advantage of acquiring capabilities through merger and acquisition?
Speed, because developing new capabilities internally can take many years of effort.
Which of the following is NOT a characteristic of a highly centralized organizational structure?
The decision about where to draw the divisional lines depends foremost on the nature of the relatedness and the strategy-critical building blocks, in terms of which businesses have key value chain activities in common.
Which of the following is NOT true of implementing a strategy?
The level of personnel competence is irrelevant to proficient strategy execution.
Who is most likely to have strong strategy implementation capabilities?
Valery typically probes with tough, incisive questions.
Which of the following statements is NOT accurate with respect to building a company's competencies and capabilities?
When a company succeeds in hiring talented employees and training them properly, competencies and capabilities tend to develop quickly and, once put in place, can last for a decade or more.
The implementation process is likely to be hampered by missed deadlines, misdirected efforts, and managerial ineptness if
a capable results-oriented management team is not in place.
Which of the following does NOT exemplify a policy or procedure that facilitates strategy execution?
a fast food joint that has an onsite kindergarten and provides afterschool programs for its employees' children
Companies engaged in a single line of business most commonly utilize an organizational structure that can be:
a functional (departmental) organizational structure.
Which of the following does NOT describe the standard type of structural form of organization?
a network structure where independent organizations are involved in a common undertaking
In formulating an action agenda to implement and execute a new or different strategy, the place for managers to begin is with
a probing assessment of what the organization must do differently and better to carry out the strategy successfully.
The most important leadership trait in the strategy execution process is
a strong, confident sense of what to do and how to do it.
What does a good strategy execution require?
a team effort with all managers having strategy executing responsibility in their areas of authority, and making all employees active participants in the strategy execution process
In which of the following steps does updating the company's capabilities to match changing market conditions and customer expectations take place?
acquiring, developing, and strengthening key resources and capabilities
Building organizational bridges with external allies is aided by
appointing "relationship managers" and giving them responsibility for making particular strategic partnerships or alliances generate the intended benefits.
The overriding aim in building a management team should be to
assemble a critical mass of talented managers who can function as agents of change, work well together as a team, and produce organizational results that are dramatically better than what one or two star managers acting individually can achieve.
Firms generally leverage the expertise of their talent pool in building capabilities by
augmenting or recombining well-established capabilities with existing resources.
The managerial approach to implementing and executing a strategy should always
be customized to fit the particulars of a company's situation.
Core competencies and competitive capabilities are usually
bundles of skills and know-how that most often grow out of the collaborative efforts of cross-functional work groups and departments performing complementary activities at different locations in a firm's value chain.
Critics of companies that use outsourcing contend that shifting responsibility for performing value chain activities to outside specialists
can hollow out a company's knowledge base and capabilities, leaving it at the mercy of outsider suppliers, and short of the resource strengths to be a master of its own destiny.
The most common approaches to capability building include all of the following, EXCEPT
coaching average performers to improve their skills.
In companies where intellectual capital is crucial to good strategy execution, which of the following is generally NOT among the practices companies use to establish a talented knowledge base?
coaching underperformers and benchwarmers to improve their skills and capabilities
Which structure combines two or more organizational forms, with multiple reporting relationships, and is used to foster cross-unit collaboration?
composite structure
Once company managers have decided on a strategy, the emphasis turns to
converting the strategy into actions and good results.
Delegating greater authority to subordinate managers and employees
creates a more horizontal or flatter organizational structure with fewer management layers and usually acts to shorten organizational response times.
A multidivisional structure consists of a
decentralized structure with of a set of operating divisions organized along business, product, customer groups or geographic lines, and a central corporate headquarters that allocates resources, provides support functions, and monitors divisional activities.
Which of the following is part of strategy-supportive resources and capabilities?
deciding how much authority to delegate
Which of the following is NOT among the principal managerial components of the strategy execution process?
deciding which core competencies and value chain activities to leave as is and which ones to overhaul and improve
Which of the following is NOT among the types of actions and initiatives undertaken by management in the strategy execution process?
deciding which core competencies and value chain activities to leave as is and which ones to overhaul and improve
Organizing a company's work effort to promote successful strategy execution involves
deciding which value chain activities to perform in-house and which to outsource, and making internally performed strategy-critical value chain activities the main building blocks in the organization structure.
A decentralized organizational structure is predicated on the belief that
decision-making authority should be pushed down to the lowest organizational level capable of making timely, informed, and competent decisions.
When a company uses outsourcing to zero in on even better performance of those truly strategy-critical activities where its expertise is most needed, then it may also be able to
decrease internal bureaucracies, flatten its organizational structure, and shorten the time it takes to respond to changing market conditions.
Strategy execution
depends on management's ability to direct organizational change.
Which of the following is NOT part of organizing the work effort in ways that promote successful strategy execution?
determining which functions and organizational units require superior intellectual capital
Sometimes a company can short-circuit the task of building an organizational capability in-house by
either acquiring a company that has already developed the capability or else acquiring the desired capability through collaborative efforts with outsiders having the requisite skills, know-how, and expertise.
Managerial actions to develop core competencies and competitive capabilities internally generally take one of two forms. What are they?
either strengthening the company's base of skills, knowledge, and experience or coordinating and integrating the efforts of various work groups and departments
Which of the following is generally NOT among the common practices that companies use to staff jobs with talented people, particularly if intellectual capital greatly aids good strategy execution?
eliminating the bottom 10 percent of the lowest-performing employees each year to increase the overall quality performance metrics to above-average industry standards
Which of the following is unlikely to be a primary building block in a company's organizational structure
empowered employee departments
Putting together a capable top management team with the right mix of experiences, skills, and abilities
entails filling key managerial slots with smart people who are clear thinkers, good at figuring out what needs to be done, and who are skilled in "making it happen" and delivering good results.
Executing strategy is a make-things-happen task that tests a manager's ability to perform all of the following EXCEPT
focus on market conditions and the company's resources and capabilities.
If management is to match a company's organization structure to its strategy in an effective way, then it is essential
for strategy-critical value-chain activities to be the main building blocks on the organization chart.
Diversified companies striving to capture the benefits of synergy between separate businesses have to be aware of all of the following challenges EXCEPT
forming cross-business strategic fit by enforcing close collaboration.
Superior strategy execution capabilities are
hard to imitate.
Coordinating the work efforts of internal organization units is best accomplished by
having closely related activities report to a single executive who has the authority and organizational clout to coordinate, integrate, and arrange for the cooperation of units under their supervision.
The organizing challenge of a decentralized structure that stresses employee empowerment is
how to exercise control over the actions and decisions of empowered employees so that the business is not put at risk while trying to capture the benefits of empowerment.
Management's handling of the strategy implementation/execution process can be considered successful
if and when the company meets or beats its performance targets and shows good progress in achieving its strategic vision for the company.
Recruiting and retaining capable employees is
important because the quality of an organization's people is always an essential ingredient of successful strategy execution.
The strategic importance of deliberately trying to develop organizational competencies and capabilities is
improved strategy execution and a potential for competitive advantage.
It is ideal for key management slots to be filled from outside
in turnaround and rapid-growth situations.
How is a functional structure or unitary structure organized?
into functional departments, with departmental managers who report to the CEO and small corporate staff
The most common building blocks for a company's organizational structure
involve a functional or departmental structure that includes process, geographic, product, or customer groups performing one or more major processing steps along the value chain.
Implementing and executing a company's strategy
is a task for every manager and the whole management team, but ultimate responsibility for success or failure falls upon the top senior executives, especially the chief executive officer of the company.
The process of recruiting and retaining capable employees
is always an essential ingredient of successful strategy execution.
A company must do all of the following to match structure to strategy EXCEPT
knit the efforts of outsourced groups together.
Which of the following is a disadvantage of a centralized organizational structure?
lengthening response times and discouraging lower-level managers and rank-and-file employees from exercising initiative
Outsourcing value chain activities has such strategy executing advantages as
less internal bureaucracy, speedier decision making, and quicker responses to changing market conditions.
Larger firms with more complex organizational structures are
more decentralized in their decision making than smaller firms.
A dynamic capability is the
ongoing capacity to modify existing resources and capabilities to create new ones.
Which of the following is NOT part of a senior executive's agenda in big organizations with geographically scattered operating units?
orchestrating the action steps and implementation sequence
When it is difficult or impossible to out-strategize rivals (beat them with a superior strategy), the other main avenue to competitive advantage is to
out-execute them (beat them by performing certain value chain activities in superior fashion).
What makes the managerial task of executing strategy so challenging and demanding is the
people-management skills required, the resistance to change that has to be overcome, and the perseverance necessary to get a variety of initiatives launched and kept moving along.
When strategies fail, it is often because of
poor execution of the strategy.
Accessing capabilities through an external source can be accomplished through all of these EXCEPT
promoting qualified people with the right know-how in a timely and cost-effective manner.
Which of the following is NOT a reason why companies might use outsourcing to improve performance of strategy-critical activities?
promoting quick establishment of a total quality culture
Which of the following is a disadvantage of a decentralized organizational structure?
putting the organization at risk if higher-level management is unaware of their actions
Good strategy execution requires which of the following?
putting those resources and capabilities into place, strengthening them as needed, and then modifying them as market conditions evolve
Which of the following is an advantage of a decentralized organizational structure?
reducing the layers of management and encouraging lower-level managers and rank-and-file employees to exercise initiative and act responsibly
A disadvantage of the centralized organization is that it
results in higher-level managers being unaware of actions taken by empowered personnel under their supervision.
The traits of the capability building process involve all of the following EXCEPT
saving time by creating capabilities from scratch to remain aligned with external conditions and company strategy rather than updating and remodeling existing capabilities.
The approach to identifying the items needed to be placed on management's action agenda of the strategy execution plan always involves
senior management's judgment about how to proceed in light of prevailing circumstances.
Which one of the following is NOT a means of building and strengthening competitively valuable resources and capabilities?
shifting from decentralized to centralized decision-making so as to give senior executives more authority and control in driving cultural change
When an organization is referred to as a line and staff structure or a flat structure, it is normally considered a
simple structure.
Building an organization capable of good strategy execution entails
staffing the organization, acquiring, developing, and strengthening key resources and competitive capabilities, and structuring the organization and work effort.
Building an organization capable of good strategy execution entails
staffing the organization, building core competencies and competitive capabilities, and structuring the organization and work effort.
The three components of building a capable organization are
staffing the organization, building core competencies and competitive capabilities, and structuring the organization and work effort.
One of the big weaknesses of organization structures that do not have cross-business collaboration is
that pieces of strategically relevant activities and capabilities often end up scattered across many departments, with each pursuing its own priorities, projects, and agendas.
The two best signs of good strategy execution are whether
the company is meeting or beating its performance targets and whether it is performing value chain activities in a manner that is conducive to companywide operating excellence.
A firm's organizational structure is comprised of
the formal and informal arrangement of tasks, responsibilities, lines of authority, and reporting relationships by which the firm is administered.
In order to coordinate and control the complex set of activities, managers must ensure
the various parts of the organizational structure are aligned with one another and also matched to the requirements of the strategy.
The rationale for making strategy-critical value chain activities the primary building blocks in a company's organizational scheme is based on the
thesis that if activities crucial to strategic success are to have the resources, decision-making influence, and organizational impact, they have to be centerpieces in the organizational scheme.
While ultimate responsibility for implementing and executing strategy falls upon the shoulders of senior executives
top-level managers still have to rely on the active support and cooperation of middle and lower-level managers in pushing needed changes in functional areas and operating units.
General Electric has an up-or-out policy, where key personnel in underperforming units are pressured to boost performance to acceptable levels and keep it there or risk being replaced. What is this an example of?
tying rewards and incentives directly to the achievement of strategic and financial targets
Which of the following is generally NOT among the practices that companies use to staff jobs with the best people they can find?
weeding out the 20% lowest-performing employees each year
When are capabilities-motivated acquisitions essential?
when industry conditions, like technology advances, are central to growth and rivalry is intense
In which one of the following instances is the training and retraining of employees likely to make the LEAST important contribution to good strategy execution?
when the strategy execution effort is based on tried-and-true operating practices that vary little from year to year
