Bus Strategy chapter 10
15. Building an organization capable of good strategy execution entails A. staffing the organization, building core competencies and competitive capabilities, and structuring the organization and work effort. B. decentralizing authority for performing strategy-critical value chain activities, establishing at least two distinctive competencies, and hiring talented employees. C. investing heavily in employee training, using an empowered organization design and organization structure in order to maximize labor productivity, and employing effective incentive compensation systems. D. centralizing authority in the hands of a chief strategy implementer so as to create the leadership authority for driving implementation forward at a rapid pace. E. empowering employees, maximizing internal operating efficiency, and optimizing core competencies.
A
1. Once company managers have decided on a strategy, the emphasis turns to A. converting the strategy (and any associated strategic plan) into actions and good results. B. empowering employees to revise and reorganize value chain activities to match the strategy. C. establishing policies and procedures that instruct company personnel in the ways and means of executing the strategy. D. developing a detailed implementation plan that sets forth exactly what every department and every manager needs to do to proficiently execute the company's strategy. E. building the core competencies and competitive capabilities needed to execute the strategy.
A
22. The capability-building process A. requires first developing the ability to do something, however imperfectly or inefficiently; second, translating this ability into a competence by learning to do the activity consistently well and at an acceptable cost; and then continuing to polish and refine its know-how in an effort to further improve its performance, ideally striving to match or beat rivals in performing the activity. B. entails establishing a new department with primary responsibility for developing the expertise to give the company the needed core competencies and capabilities. C. stands a better chance of succeeding if a company employs a traditional functional organization structure. D. is made much easier if a company abstains from outsourcing important value chain activities. E. aims at turning the company's distinctive competencies into core competencies.
A
25. Which of the following is not one of the traits of the capability-building process? A. Core competencies or capabilities are usually the product of astute company efforts to hire and train talented employees. B. Normally, core competencies and competitive capabilities emerge incrementally as a company acts to bolster skills that contributed to earlier successes. C. Core competencies or capabilities are most often bundles of skills and know-how that grow out of the combined efforts of cross-functional work groups and departments that perform complementary activities at several places in the firm's value chain. D. The key to leveraging a core competence into a distinctive competence (or transforming a capability into a competitively superior capability) is concentrating more effort and talent than rivals on strengthening the competence or capability to achieve competitive advantage. E. Evolving changes in customer needs and competitive conditions often require tweaking and adjusting a company's portfolio of competencies and intellectual capital to keep its capabilities freshly honed and on the cutting edge.
A
37. Outsourcing value chain activities has such strategy-executing advantages as A. less internal bureaucracy, speedier decision-making, quicker responses to changing market conditions, and heightened focus on performing a select few value chain activities (which can improve performance of those activities). B. facilitating the empowerment of employees (because there are less things to do internally). C. promoting a total quality management culture. D. reducing the need to establish a strongly implanted corporate culture. E. reducing the strategic importance of building valuable core competencies.
A
42. Which one of the following statements about outsourcing the performance of value-chain activities to outside specialists is false? A. Outsourcing support services often has cost-saving benefits but outsourcing primary value chain activities has the disadvantages of raising fixed costs, reducing variable costs, and making it harder to develop distinctive competencies. B. Outsourcing critics 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. C. Outsourcing the performance of certain value chain activities to able suppliers can add to a company's arsenal of capabilities and contribute to better strategy execution. D. The real debate surrounding outsourcing is not about whether too much outsourcing risks loss of control but about how to use outsourcing in a manner that produces greater competitiveness. E. Outsourcing can enable a company to heighten its strategic focus and concentrate its full energies and resources on even more competently performing those value chain activities that are at the core of its strategy and for which it can create unique value.
A
48. Building organizational bridges with external allies is aided by A. appointing "relationship managers" and giving them responsibility for making particular strategic partnerships or alliances generate the intended benefits. B. agreeing with allies to meet frequently and make all decisions pertaining to the alliance on the basis of mutual agreement and consensus. C. getting each strategic ally to agree to appoint someone as head of the collaborative effort and to give that person the authority to enforce tight coordination of joint activities. D. forming a 50-50 joint venture with each strategic partner and then assigning people to the joint venture who have the authority and responsibility to enforce tight coordination. E. entering into a written agreement detailing the roles and responsibilities of the company and the ally/partner, setting forth the results that are expected, establishing deadlines for achieving these results, and designating the people who are to be responsible for making the collaborative effort work successfully.
A
54. A decentralized organizational structure is predicated on a belief that A. decision-making authority should be put in the hands of the people closest to and most familiar with the situation, and these people should be trained to exercise good judgment. B. a command-and-control organizational scheme is the lowest cost way to organize the work effort. C. top executives oftentimes lack the expertise and wisdom to decide what is the wisest and best course of action. D. the best decisions emerge from a collegial, collaborative culture where decisions are made by general consensus (at least a majority vote) on what to do and when. E. organizing into work teams, having team members elect a team leader, and having team members vote on the best way to do things greatly reduces corporate bureaucracy.
A
55. The disadvantages of a centralized organizational structure include A. lengthening response times and discouraging lower-level managers and rank-and-file employees from exercising initiative. B. a loss of top management control. C. putting too much decision making authority in the hands of lower-level company personnel. D. making it hard to fix accountability when things do not go well and putting the organization at risk when bad decisions are made. E. impeding cross-unit coordination and capture of strategic fits.
A
58. The chief advantages of a decentralized organizational structure include A. reducing the layers of management and encouraging lower-level managers and rank-and-file employees to exercise initiative and act responsibly. B. making it easy to fix accountability when company performance targets are not met. C. higher productivity on the part of the work force and greater ability to become an industry low-cost leader. D. enhancing cross-unit coordination and capture of strategic fits. E. the emergence of a collegial, collaborative culture where teamwork is a core value and decisions are made on the basis of consensus.
A
59. Delegating greater authority to subordinate managers and employees A. creates a more horizontal or flatter organization structure with fewer management layers and usually acts to shorten organizational response times. B. usually slows down decision-making because so many more people are involved and it takes longer to reach a consensus on what to do and when to do it. C. can be a de-motivating factor because it requires people to take responsibility for their decisions and actions. D. is very, very risky because it usually results in lots of "bad" decisions on the part of employees and lower levels of financial performance. E. enhances greater cross-unit coordination and aids the capture of strategic fit benefits across related businesses.
A
6. Ultimate responsibility for seeing that strategy is executed successfully primarily falls upon the shoulders of A. a company's chief executive officer, its chief operating officer, and the heads of major units (business divisions, functional departments, and key operating units). B. first-line supervisors who have day-to-day responsibility for seeing that key value chain activities are done properly. C. the company's board of directors because board members are the final authority in overseeing and conducting daily operations. D. a company's whole management team—each manager is responsible for attending to what needs to be done in his/her respective area of authority and thus should be held accountable for success or failure. E. all company personnel because all employees are active participants in the strategy execution process and the caliber of their actions have a huge impact on the ultimate outcome.
A
7. While ultimate responsibility for implementing and executing strategy falls upon the shoulders of senior executives, A. 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. B. the pivotal and most decisive strategy-implementing actions are carried out by front-line supervisors who have day-to-day responsibility for seeing that key activities are done properly. C. it is a company's employees who most determine whether the drive for good strategy execution will succeed or fail. D. the success or failure of the implementation/execution effort hinges chiefly on doing an effective job of empowering employees to make day-to-day operating decisions that support good strategy execution. E. the success or failure of the implementation/execution effort hinges chiefly on a company's reward system and whether its policies and procedures are strategy-supportive.
A
18. Recruiting and retaining capable employees A. is usually much more important to good strategy execution than is assembling a capable top management team. B. is important because the quality of an organization's people is always an essential ingredient of successful strategy execution—knowledgeable, engaged employees are a company's best source of creative ideas for the nuts-and-bolts improvements that lead to operating excellence. C. is more important during periods of rapid growth than during periods of crisis and attempted turnarounds. D. is an important organization-building element, particularly when it comes to transforming a competence into a core competence or distinctive competence. E. is easily the most critical aspect in building competitively valuable core competencies and capabilities.
B
11. The principal managerial components of the strategy execution process include which of the following? A. Deciding how much to spend on employee training B. Instituting policies and procedures that facilitate strategy execution and tying rewards to the achievement of strategic and financial targets C. Doing an effective job of empowering employees D. Revamping the value chain in a manner calculated to maximize operating efficiency E. Selecting a capable top management team
B
17. The overriding aim in building a management team should be to A. select people who are committed to decentralizing decision-making and empowering employees. B. 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. C. choose managers experienced in controlling costs and flattening the organization structure. D. select people who have similar management styles, leadership approaches, business philosophies, and personalities. E. choose managers who believe in having a strong corporate culture and deeply ingrained core values.
B
32. The strategic importance of deliberately trying to develop organizational competencies and capabilities is A. lower cost for employee training. B. improved strategy execution and a potential for competitive advantage. C. increased ability to reduce total operating costs. D. the added ease with which strategic fit and resource fit benefits can be captured. E. enhanced ability to avoid the perils of outsourcing.
B
34. Organizing a company's work effort to promote successful strategy execution involves A. deciding how much to spend on training managers and employees. B. 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. C. choosing an organization structure that is a tight fit with the corporate culture. D. hiring a capable management team. E. instituting a compensation structure that reduces employee turnover and thus stabilizes the make-up of work teams.
B
38. 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 A. create a values-based corporate culture that excels in product innovation. B. decrease internal bureaucracies, flatten its organizational structure, shorten the time it takes to respond to changing market conditions, and capitalize on its partnerships with outsiders to enhance its arsenal of capabilities and thus contribute to better strategy execution. C. devote more resources to its social responsibility strategy, better empower employees, and reduce employee turnover. D. better police compliance with ethical standards, lower overall operating costs, and create two or more distinctive competencies. E. All of these.
B
39. Which one of the following is not a reason why companies might use outsourcing to improve performance of strategy-critical activities? A. Improving a company's chances for outclassing rivals in the performance of strategy-critical activities and turning a core competence into a distinctive competence B. Promoting quick establishment of a total quality culture C. Speeding internal decision-making and shortening the time it takes to respond to changing market conditions D. Capitalizing on the partnerships with outsiders to enhance its arsenal of capabilities and thus contribute to better strategy execution E. Helping decrease internal bureaucracies and flatten the organizational structure
B
4. What makes the managerial task of executing strategy so challenging and demanding is A. the trial-and-error experimentation that is required to come up with a workable organizational structure. B. the demanding 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. C. the time and effort it takes to build core competencies. D. the time, training, and creative effort it takes to empower employees and teach them responsible decision-making. E. the supervisory requirements associated with getting company personnel to do things the right way.
B
40. Outsourcing value chain activities to strategic partners can yield such advantages as A. quick creation of distinctive competencies, enhanced product quality, and better customer service. B. lower costs, less internal bureaucracy, speedier decision-making, more flexibility, and heightened strategic focus. C. lower cost adoption of best practices. D. reduced need to empower employees and rely on team-based organizational arrangements. E. facilitating the capture of cross-functional strategic fits and resource fits.
B
41. Outsourcing critics contend that shifting responsibility for performing value-chain activities to outside specialists A. has the disadvantage of raising fixed costs and reducing variable costs and makes it harder to develop distinctive competencies. B. 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. C. results in less organizational flexibility and leads to sometimes exorbitant costs in collaborating with outside suppliers and strategic partners. D. slows down decision-making on key strategic issues because outside suppliers have to be consulted first. E. lowers the morale of company employees, dampens a company's ability to implement best practices, and results in greater bureaucracy and slower decision-making.
B
43. A firm's organizational structure is comprised of A. resource strengths and competitive capabilities that allow it to incorporate attributes at lower costs than rivals whose products have similar attributes. B. the formal and informal arrangement of tasks, responsibilities, lines of authority, and reporting relationships by which the firm is administered. C. excellent marketing and sales skills to convince buyers to pay a premium price for the attributes/features incorporated in its product. D. sustainable distinctive competences to ensure cost reduction and competitiveness. E. None of these.
B
46. The primary building blocks within a company's organizational structure A. are almost always the departments performing such key administrative support functions as finance, accounting, information technology, human resource management, and R&D. B. can include process departments, traditional functional departments, geographic organizational units, and divisional units performing one or more major processing steps along the value chain (components manufacture, assembly, distribution), and individual businesses (in the case of a diversified company). C. typically consist of an un-empowered employee department, an empowered employee department, teams of front-line supervisors, teams of middle-level managers and administrators, and the group of top-level executives that comprise the company's "executive suite." D. usually consist of supply chain management, components manufacture, assembly, distribution, and administration. E. usually consist of two divisions—a division charged with performing primary value chain activities and a division charged with performing support activities.
B
50. Larger firms with more complex organizational structures are A. less decentralized in their decision making than smaller firms. B. more decentralized in their decision making than smaller firms. C. less decentralized in their decision making than larger firms. D. more decentralized in their decision making than larger firms. E. do not decentralize due to their operating size.
B
57. Which of the following is not one of the chief advantages of a decentralized organizational structure? A. Reducing the size of the corporate bureaucracy and the layers of management B. Making it easy to fix accountability when company performance targets are not met and enhanced capture of cross-business strategic fits C. Promoting greater motivation and involvement in the business on the part of more company personnel D. Spurring new ideas and creative thinking E. Encouraging lower level managers and rank-and-file employees to exercise initiative and act responsibly
B
61. The classic way to coordinate the work efforts of internal organization units is to A. establish a corporate culture where teamwork is a core value and decisions are made by general consensus among team leaders in the affected work units. B. have 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. C. have the heads of support activities report to the heads of primary, strategy-critical activities. D. establish monetary incentives that reward people for being cooperative team players. E. have frequent meetings among the heads of closely related activities and work units to establish mutually agreeable deadlines.
B
8. Implementing and executing a company's strategy A. is primarily the job of the company's board of directors since they direct the actions and policies of the top senior executives in executing the strategy. B. is a task for every manager and the whole management team but ultimate responsibility for success or failure falls upon the top senior executives. C. is primarily a responsibility of all company personnel because all personnel are active participants in the strategy execution process and their actions have a huge impact on the ultimate outcome. D. should be delegated to a chief strategy implementer appointed by the chief executive officer. E. is primarily a task for middle and lower-level managers because it is they who have responsibility for pushing the needed changes all the way down to the lowest levels of the organization.
B
9. Management's handling of the strategy implementation/execution process can be considered successful A. when the internal organization develops 2 or more core competencies in performing value chain activities. B. if and when the company meets or beats its performance targets and shows good progress in achieving its strategic vision for the company. C. if the company's culture is strong and strategy-supportive. D. if management is able to marshal adequate resources to put the strategy in place within 6-12 months. E. if managers and employees express strong support for the company's strategy and long-term direction.
B
49. The organizational characteristics of a network structure include A. links between a number of independent organizations. B. a central firm that is charged with coordination of cross-network activities. C. organizations working together in a common undertaking. D. extensive collaborative efforts among people in different specialties and different geographic locations. E. All of these.
E
10. Which of the following is not among the principal managerial components of the strategy execution process? A. Building an organization with the competencies, capabilities, and resource strengths needed to execute strategy successfully B. Instituting policies and procedures that facilitate rather than impede strategy execution C. Deciding which core competencies and value chain activities to leave as is and which ones to overhaul and improve D. Adopting best practices and pushing for continuous improvement in how value chain activities are performed E. Tying rewards directly to the achievement of strategic and financial targets and to good strategy execution
C
12. Which of the following is not among the principal managerial components of the strategy execution process? A. Exercising strong leadership to drive execution forward, keep improving on the details of execution, and achieve operating excellence as rapidly as feasible B. Marshaling sufficient money and people behind the drive for strategy execution C. Selecting and retaining capable employees, thereby enhancing the company's intellectual capital resources D. Instituting best practices and pushing for continuous improvement in how value chain activities are performed E. Instilling a corporate culture that promotes good strategy execution
C
19. Which one of the following statements about recruiting and retaining capable employees is false? A. The quality of an organization's people is always an essential ingredient of successful strategy execution. B. Recruiting and retaining capable employees is a particularly important organization-building task in enterprises where superior intellectual capital is a key resource and also a basis for competitive advantage. C. Recruiting and retaining capable employees is usually much more important to good strategy execution and the achievement of true operating excellence than is assembling a capable top management team. D. It is very difficult for a company to competently execute its strategy and achieve operating excellence without a large band of capable employees who are actively engaged in the process of making ongoing operating improvements. E. In many industries, adding to a company's talent base and building intellectual capital is more important to good strategy execution than additional investments in plants, equipment, and capital projects.
C
20. Which of the following is generally not among the practices that companies use to staff jobs with the best people they can find, particularly if intellectual capital greatly aids good strategy execution? A. Careful screening and evaluation of job applicants, along with continuous training and retraining of employees B. Rotating people through jobs that not only have great content but also span functional and geographic boundaries C. Weeding out the 20% lowest performing employees each year D. Encouraging employees to challenge existing ways of doing things, to be creative and innovative in proposing better ways of operating, and to push their ideas for new products or businesses E. Fostering a stimulating and engaging work environment such that employees will consider the company a great place to work
C
21. In companies where intellectual capital is crucial to good strategy execution, which of the following is generally not among the practices that companies use to establish a talented knowledge base? A. Providing promising employees with challenging, interesting, and skill-stretching assignments and also rotating them through jobs that not only have great content but also span functional and geographic boundaries B. Expecting employees to take full responsibility for staying up to date, thereby minimizing the need to train or retrain employees C. Coaching average performers to improve their skills and capabilities, while weeding out underperformers and benchwarmers D. Encouraging employees to challenge existing ways of doing things, to be creative and innovative in proposing better ways of operating, and to push their ideas for new products or businesses E. Fostering a stimulating and engaging work environment such that employees will consider the company a great place to work
C
24. Core competencies and competitive capabilities A. usually are lodged in the narrow skills and specialized work efforts of a single department, as opposed to the combined expertise and capabilities of specialists scattered across several departments. B. most usually stem from collaborative efforts with strategic allies. C. are usually bundles of skills and know-how that most often grow out of the combined efforts of cross-functional work groups and departments performing complementary activities at different locations in a firm's value chain. D. tend to result in competitive advantage when they involve highly specific technologies and are grounded in a company's own deep technical expertise. E. typically are built rapidly, usually in conjunction with important product innovations.
C
29. Sometimes a company can short-circuit the task of building an organizational capability in-house by A. putting in high incentive bonuses to reward individual employees who train hard to develop the desired capability. B. launching an extensive training effort to develop the capability quickly with newly hired employees. C. 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. D. using benchmarking and the adoption of best practices to imitate a capability that rivals have already developed. E. empowering a team of employees to develop the capability however they best fit.
C
3. Which one of the following statements falsely characterizes the managerial task of executing strategy? A. Executing strategy is an action-oriented, make-things-happen task. B. Executing strategy tests a manager's ability to direct organizational change, achieve continuous improvement in operations and business processes, create and nurture a strategy-supportive culture, and consistently meet or beat performance targets. C. The challenge of successfully implementing new strategic initiatives principally involves employing managerial techniques to overcome resistance to change. D. Strategy execution requires a team effort that entails every manager thinking through the answer to "What does my area have to do to implement its part of the strategic plan, and what should I do to get these things accomplished effectively and efficiently?" E. Implementing and executing strategy is primarily an operations-driven activity revolving around the management of people and business processes.
C
33. 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 A. do a better job of empowering employees and flattening the organization structure. B. outcompete them with a stronger corporate culture. C. out execute them (beat them by performing certain value chain activities in superior fashion). D. beat them with a healthy corporate culture based on such core values as high ethical standards, a strong sense of corporate social responsibility, and genuine concern for customer well-being. E. institute a more motivating and cost-efficient compensation and reward system.
C
45. Which of the following is unlikely to be a primary building block in a company's organizational structure? A. Traditional functional departments B. Process departments C. Empowered employee departments D. Divisional units performing one or more major processing steps along the value chain (components manufacture, assembly, distribution) E. Geographic organizational units
C
5. Which of the following statements about implementing and executing a new strategy is true? A. The managerial tasks of implementing and executing a new strategy call for essentially the same kinds of creative management talent and innovative thinking as does crafting strategy. B. Executing strategy is chiefly a financially-driven process aimed at squeezing the most profit out of conducting daily operations. C. Executing strategy is a job for a company's whole management team, not just a few senior managers; moreover, all employees are participants in the strategy execution process. D. Executing strategy depends heavily on the caliber of a CEO's business vision, industry and competitive analysis skills, and entrepreneurial creativity. E. Executing strategy tends to be a simpler, quicker management task to perform as compared to crafting a winning strategy.
C
53. A decentralized organizational structure is predicated on a belief that A. top executives should establish a collegial, collaborative culture where decisions are made by general consensus on what to do and when. B. strict enforcement of detailed procedures backed by rigorous managerial oversight is necessary because company personnel cannot be counted on act wisely or keep costs to a bare bones level. C. decision-making authority should be pushed down to the lowest organizational level capable of making timely, informed, competent decisions. D. most company personnel have neither the time nor the inclination to direct and properly control the work they are performing and that they lack the knowledge and judgment to make wise decisions about how best to do their work. E. lower-level managers and employees should go up the ladder of command for approval on most all strategic and operating issues of much importance
C
62. One of the big weaknesses of organization structures that do not have cross-business collaboration is A. making it hard to effectively empower employees. B. making it difficult to have closely related activities report to a single executive. C. that pieces of strategically relevant activities and capabilities often end up scattered across many departments each pursuing its own priorities, projects and agendas. D. impeding the use of outsourcing. E. making it hard to fix managerial accountability for poor results.
C
60. The organizing challenge of a decentralized structure which stresses employee empowerment is A. how to keep empowered employees from making lots of stupid decisions. B. establishing a collegial, collaborative culture so that decisions can be made by gaining a quick consensus on what to do and when to do it. C. how to avoid de-motivating employees (because empowered employees are expected to take responsibility for their actions and decisions). D. 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. E. how to convince lower-level managers and employees that they are empowered.
D
14. The three components of building a capable organization are A. making periodic changes in the firm's internal organization to keep people from getting into a comfortable rut, instituting a decentralized approach to decision-making, and developing the appropriate competencies and capabilities. B. hiring a capable top management team, empowering employees, and establishing a strategy-supportive corporate culture. C. putting a centralized decision-making structure in place, determining who should have responsibility for each value chain activity, and aligning the corporate culture with key policies, procedures, and operating practices. D. staffing the organization, building core competencies and competitive capabilities, and structuring the organization and work effort. E. optimizing the number of core competencies and competitive capabilities, making sure that all managers and employees are empowered, and maximizing internal operating efficiency.
D
16. Putting together a capable top management team A. should take top priority in building competitively valuable core competencies. B. is particularly important when the firm is pursuing unrelated diversification or making a number of new acquisitions in related businesses. C. is important in building an organization capable of proficient strategy execution, but is nearly always less crucial than doing a superior job of training and retraining employees. D. entails filling key managerial slots with smart people who are clear thinkers, good at figuring out what needs to be done, and skilled in "making it happen" and delivering good results. E. is particularly essential for executing a strategy to keep a company's costs lower than rivals and become the industry's low-cost leader.
D
27. Which of the following statements about developing organizational competencies and capabilities is false? A. Core competencies or capabilities are most often bundles of skills and know-how that grow out of the combined efforts of cross-functional work groups and departments performing complementary activities at different locations in a firm's value chain. B. Evolving changes in customer needs and competitive conditions often require tweaking and adjusting a company's portfolio of competencies and intellectual capital to keep its capabilities freshly honed and on the cutting edge. C. Normally core competencies and competitive capabilities emerge incrementally as a company (1) acts to bolster skills that contributed to earlier successes or (2) acts to respond to customer problems, new technological or market opportunities, and the competitive maneuvers of rivals. D. 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. E. The key to leveraging a core competence into a distinctive competence (or transforming a capability into a competitively superior capability) is concentrating more effort and talent than rivals on deepening and strengthening the competence or capability so as to achieve the dominance needed for competitive advantage.
D
28. Which of the following is not one of the traits of core competencies and/or competitive capabilities? A. The key to leveraging core competencies into competitive advantage is concentrating sufficient effort and talent on deepening and strengthening them that the firm achieves dominating depth and gains the capability to outperform rivals by a meaningful margin. B. Core competencies have to be tweaked and adjusted to keep them fresh and responsive to changing customer needs and market conditions. C. Core competencies typically are lodged in the combined efforts of different work groups and departments. D. Core competencies generally grow out of company efforts to master a strategy-critical technology or to invent and patent a valuable technology. E. Core competencies tend to emerge gradually rather than blossoming quickly.
D
35. Which one of the following is not part of organizing the work effort in ways that promote successful strategy execution? A. Providing for the necessary collaboration with suppliers and strategic allies B. Providing for cross-unit coordination and deciding which value chain activities to perform in-house and which ones to outsource C. Determining how much authority to centralize at the top and how much to delegate to down-the-line managers and employees D. Determining which functions and organizational units require superior intellectual capital E. Making internally performed strategy-critical value chain activities the main building blocks in the organization structure
D
44. The rationale for making strategy-critical value chain activities the primary building blocks in a company's organizational scheme is based on A. the much shorter time it takes to build core competencies and competitive capabilities. B. the benefit such an organizational scheme has in reducing costs. C. the benefit such an organizational scheme has in improving the productivity of geographically-scattered organizational units. D. the thesis that if activities crucial to strategic success are to have the resources, decision-making influence, and organizational impact they need, they have to be centerpieces in the organizational scheme. E. the benefit such an organizational scheme has in making the empowerment of employees more effective.
D
56. The chief disadvantages of a decentralized organizational structure include A. increasing the size of the corporate bureaucracy. B. slowing a company's response times to changing external events because approval of what course of action to take has to go up the chain of command to the top of the management bureaucracy. C. discouraging lower-level managers and rank-and-file employees from exercising initiative, engaging in creative thinking, and taking responsibility for their actions. D. putting the organization at risk if many "bad" decisions are made at lower levels in the organization—top management lacks "full control." E. creating more layers of management.
D
13. In devising an action agenda to implement and execute a new or different strategy, the place for managers to start is with A. the task of revising and enhancing the company's core competencies. B. choosing which leadership style to employ in trying to carry out the strategy successfully. C. evaluating whether existing policies and procedures are adequately strategy-supportive. D. allocating more resources to strategy-critical parts of the business. E. a probing assessment of what the organization must do differently and better to carry out the strategy successfully.
E
2. Executing strategy A. is primarily an operations-driven activity revolving around the management of people and business processes. B. tests a manager's ability to direct organizational change and achieve continuous improvement in operations and business processes. C. tests a manager's ability to create and nurture a strategy-supportive culture. D. tests a manager's ability to consistently meet or beat performance targets. E. All of these.
E
23. The capability-building process A. is first and foremost an activity in empowering employees, putting them on a single team (or in a single department), and giving them the tools and training to perform the desired activity with a high degree of proficiency. B. is a one-step process built around properly training and empowering employees to perform their assigned activities in a tightly-prescribed manner. C. can be a shortcut by weeding out underperforming employees and replacing them with people having stronger skills sets and know-how. D. is best done by forming a new department charged with developing the desired competence or capability. E. requires first developing the ability to do something, however imperfectly or inefficiently; second, translating this ability into a competence and/or capability by learning to do the activity consistently well and at an acceptable cost; and then continuing to polish and refine its know-how in an effort further improve its performance, ideally striving to match or beat rivals in performing the activity.
E
26. Which of the following are traits of the capability-building process? A. Evolving changes in customer needs and competitive conditions often require tweaking and adjusting a company's portfolio of competencies and intellectual capital to keep its capabilities freshly honed and on the cutting edge. B. Normally, a core competence or capability emerges incrementally out of company efforts either to bolster skills that contributed to earlier successes or to respond to customer problems, new technological and market opportunities, and the competitive maneuverings of rivals. C. Core competencies or capabilities are most often bundles of skills and know-how that grow out of the combined efforts of cross-functional work groups and departments performing complementary activities at different locations in a firm's value chain. D. The key to leveraging a core competence into a distinctive competence (or transforming a capability into a competitively superior capability) is concentrating more effort and talent than rivals on deepening and strengthening the competence or capability so as to achieve the dominance needed for competitive advantage. E. All of these.
E
30. Which of the following is not accurate as concerns a company's competencies and capabilities? A. Competencies and capabilities that grow stale can impair competitiveness unless they are refreshed, modified, or even phased out and replaced in response to ongoing market changes and shifts in company strategy. B. Core competencies have to be tweaked and adjusted to keep them fresh and responsive to changing customer needs and market conditions. C. The imperatives of keeping capabilities in step with ongoing strategy and market changes make it appropriate to view a company as a bundle of evolving competencies and capabilities. D. Even after core competencies and competitive capabilities are in place and functioning, company managers can't relax—they still have to wrestle with when and how to recalibrate existing competencies and capabilities and when and how to develop new ones. E. When a company succeeds in hiring talented employees and training them properly, competencies and capabilities tend to blossom quickly and, once put in place, can last for a decade or more.
E
31. 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? A. When a company shifts to a strategy requiring different skills, competitive capabilities, managerial approaches, and operating methods. B. When an organization is striving to build skills-based competencies. C. When technical know-how is changing so rapidly that a company loses its ability to compete unless its skilled people have cutting-edge knowledge and expertise. D. When the chosen strategy calls for deeper technological capability or building and using new capabilities. E. When the strategy execution effort is based on tried and true operating practices that vary little from year to year.
E
36. To organize the work effort around the needs of good strategy execution, management needs to A. make those strategy-critical activities/capabilities that are to be performed internally the main building blocks in the internal organization structure. B. determine whether some value chain activities can be outsourced more efficiently or effectively than they can be performed internally. C. decide how much authority to centralize at the top and how much to delegate to down-the-line managers and employees. D. provide for coordination and collaboration across the various organizational units and also with outside partners. E. All of these.
E
47. Which of the following is a basic structural form of organization? A. A functional structure where function is a major step in the firm's value chain. B. A simple structure where all major decisions and oversight are a duty of the central executive. C. A multidivisional structure where each division of the firm is an independent profit center. D. A matrix structure where there are two or more divisions organized to enhance cross-communication. E. All of these.
E
51. In a highly centralized organizational structure, A. top executive retain authority for most strategic and operating decisions. B. the thesis is that strict enforcement of detailed procedures backed by rigorous managerial oversight is the most reliable way to keep the daily execution of strategy on track. C. tight control from the top makes it easy to fix accountability when things do not go well. D. one of the basic tenets is that most company personnel have neither the time nor the inclination to direct and properly control the work they are performing and, further, that they lack the knowledge and judgment to make wise decisions about how best to do their work. E. All of these.
E
52. Which one of the following falsely characterizes a centralized organizational structure? A. Top executives should retain authority over most strategic and operating decisions and keep a tight rein on business-unit heads, department heads, and the managers of key operating units. B. Strict enforcement of detailed procedures backed by rigorous managerial oversight is the most reliable way to keep the daily execution of strategy on track. C. Tight control by the manager in charge makes it easy to fix accountability when things do not go well. D. Most company personnel have neither the time nor the inclination to direct and properly control the work they are performing and that they lack the knowledge and judgment to make wise decisions about how best to do their work. E. A company that draws on the combined intellectual capital of all of its people can outperform a company that relies on command-and-control.
E
63. A well-managed network structure typically includes one firm in a more central role, with A. the responsibility of ensuring that the right partners are included and the activities are coordinated. B. more effective collaboration and cooperation among partners. C. a hand-picked, integrated network of suppliers. D. an arrangement of independent organizations involved in a common undertaking. E. All of these.
E
64. Which one of the following must a company do to match structure to strategy? A. Choose a basic design to fit the company's particular business. B. Supplement the design structure with coordinating mechanisms. C. Institute networking and communication arrangements to support strategy execution. D. None of these. E. All of these.
E
