Chapter 3 The Manager's Role in Strategic Human Resource Management
Sweet Leaf Tea, a Texas-based maker of bottled iced tea, is a small but fast-growing firm that has gained a loyal following for its use of fresh, organic ingredients in its beverages. Although beverage industry experts recommended that Sweet Leaf replace the organic cane sugar and honey it uses with less costly high-fructose corn syrup, Sweet Leaf refused because of the company's mission to provide a high-quality, organic beverage to consumers. The 11-year old company has 50 employees, and its products are available in 30% of the U.S. market. Sweet Leaf Tea recently received multi-million dollar investments which will enable the business to expand its national presence. Which of the following, if true, best supports the idea that Sweet Leaf Tea has implemented a competitive strategy of differentiation? A) New Sweet Leaf Tea customers are initially attracted to the unique labels and logo on the bottles. B) Loyal customers of Sweet Leaf Tea seek products that are USDA certified organic despite the associated higher costs. C) Other brands of bottled iced tea compete with Sweet Leaf Tea by offering new flavors at competitive prices. D) Sweet Leaf Tea sells both lemonade and teas in a variety of flavors that appeal to consumers of all ages. E) Sweet Leaf Tea has not raised its prices in several years due to fears of losing regional customers.
B
What is the first step in the strategic management process? A) formulating a strategy B) defining the current business C) translating a mission into goals D) performing internal and external audits E) implementing an environmental scan
B
Which of the following refers to a process for assigning financial and nonfinancial goals to the HR management-related chain of activities required for achieving the company's strategic aims and for monitoring results? A) strategy map B) HR scorecard C) internal auditing D) HR feedback scale E) digital dashboard
B
Which of the following refers to any factors that allow a company to differentiate its product or service from those of its competitors to increase market share? A) functional strategy B) competitive advantage C) distinctive competence D) competitive focusers E) related diversification
B
?As with many failed mergers and acquisitions, the Bank of America acquisition of Merrill Lynch was unsuccessful because of problems with ________. A) technology B) financing C) geography D) personnel E) stock prices
D
?Harley-Davidson sells a line of boots, helmets, and leather jackets indicating that the the firm is pursuing which of the following strategies? A) cost leadership B) conglomerate diversification C) geographic expansion D) related diversification E) horizontal integration
D
?Which of the following is the final step in the strategic human resource management process? A) formulating HR policies and practices B) identifying a firm's workforce requirements C) formulating an effective business strategy D) developing detailed HR scorecard measures E) testing current employees for skills and knowledge
D
? A strategic audit would most likely be used by an HR manager to assess a firm's procedures and practices in regards to employee benefits.
F
? Offshoring is limited to lower skilled manufacturing jobs within the garment industry.
F
? All of the following are commonly used HR metrics EXCEPT ________. A) communication expenses B) absence rate C) cost per hire D) human capital ROI E) health care costs per employee
A
? Since most well-run firms utilize a hierarchy of goals to guide major decisions, ________ is especially important to managers at every level to prevent departments from working at cross-purposes. A) strategic planning B) financial auditing C) employee testing D) employee benchmarking E) annual personnel training
A
? The main contents of a typical business plan include all of the following EXCEPT ________. A) political forecast B) business description C) marketing plan D) financial plan E) personnel plan
A
? Which of the following is the primary benefit of MBO? A) MBO is an effective method for determining the relationship between an employee's goals and the goals of supervisors and subordinates. B) Feedback provided by customers who participate in an MBO program enhances a firm's marketing efforts. C) Implementing an MBO program requires very little time and provides extensive employee motivation. D) MBO is an informal yet highly effective technique of documenting a firm's long-term goals and objectives. E) An MBO program encourages employee participation during department meetings and company conferences.
A
?During a merger or an acquisition, due diligence reviews performed by human resource teams are most likely to assess all of the following EXCEPT ________. A) accounting procedures B) organizational culture C) employee compensation D) employee benefits E) labor relations
A
A company's business-level strategy identifies the ________. A) ways to build and strengthen a firm's long-term competitive position in the marketplace B) tools for diversifying a business portfolio through the acquisition of a multi-national enterprise C) specific courses of action that each department will pursue to help a firm accomplish its vision D) means to becoming a low-cost leader within a highly competitive industry E) ways to carve out a market niche in order to compete for high-end customers
A
A(n) ________ is a firm's method for matching its internal strengths and weaknesses with external opportunities and threats to maintain a competitive advantage. A) strategic plan B) situation analysis C) environmental scan D) SWOT analysis E) tactical plan
A
Formulating and executing human resource policies and practices that produce the employee competencies and behaviors a company needs to achieve its strategic aims is known as ________. A) strategic human resource management B) human resource performance systems C) strategic human resource metrics D) high-performance personnel management E) personnel management by objectives
A
Reese Enterprises seeks to fill upper-level positions internally whenever possible and uses validated selection tests when considering external hires. This most likely suggests the company is developing a ________. A) high-performance work system B) scorecard management system C) benchmark D) management by objectives strategy E) selection metric
A
Sweet Leaf Tea, a Texas-based maker of bottled iced tea, is a small but fast-growing firm that has gained a loyal following for its use of fresh, organic ingredients in its beverages. Although beverage industry experts recommended that Sweet Leaf replace the organic cane sugar and honey it uses with less costly high-fructose corn syrup, Sweet Leaf refused because of the company's mission to provide a high-quality, organic beverage to consumers. The 11-year old company has 50 employees, and its products are available in 30% of the U.S. market. Sweet Leaf Tea recently received multi-million dollar investments which will enable the business to expand its national presence. Which of the following, if true, would most likely undermine the argument that Sweet Leaf Tea should implement a corporate-level strategy of vertical integration? A) Sweet Leaf Tea lacks the facilities or knowledge to produce the raw ingredients for its beverages. B) Market research suggests that Sweet Leaf Tea customers primarily purchase only one flavor of tea. C) Most loyal customers of Sweet Leaf Tea purchase the beverage at neighborhood convenience stores. D) Sweet Leaf Tea has decided to lower its prices by replacing cane sugar with corn syrup in some of its beverages. E) Sugar farmers used by Sweet Leaf Tea have agreed to a fixed price for the next 5 years so that the company can keep prices low.
A
The 2008 announcement by Starbucks that it would be closing approximately 600 of its stores suggests the firm was using a ________ strategy. A) consolidation B) diversification C) geographic expansion D) vertical integration E) product development
A
The ________ of the California Energy Commission indicates that the organization assesses and acts through public and private partnerships to improve energy systems that promote a strong economy and a healthy environment. A) mission statement B) strategic plan C) code of ethics D) vision statement E) organizational code
A
Which of the following terms refers to the process of comparing and analyzing the practices of one firm with those of a high-performing company? A) benchmarking B) diversifying C) offshoring D) strategizing E) outsourcing
A
? All of the following are services that human resource consulting companies provide during mergers and acquisitions EXCEPT ________. A) aligning compensation programs B) overseeing database recovery systems C) developing change management plans D) designing and implementing staffing models E) managing employee communications strategies
B
? Which of the following audits is used by HR managers to determine whether a firm is adhering to relevant laws and regulations? A) strategic audit B) compliance audit C) organizational audit D) best practices audit E) function specific audit
B
? Which of the following is used to manage employee performance and to align all employees with the key objectives a firm needs to achieve its strategic goals? A) functional planning system B) HR Scorecard C) annual HR benchmarks D) high performance work system E) MBO format
B
? Which of the following provides a comprehensive view of both a firm's current situation and its goals for the next 3 to 5 years? A) SWOT analysis B) business plan C) value proposition D) financial plan E) operations plan
B
?According to studies, combining high-performance HR practices with modern technology most likely leads to increases in all of the following areas EXCEPT ________. A) worker productivity B) media mentions C) annual sales D) product quality E) financial performance
B
A diversification corporate strategy implies that a firm will ________. A) become an industry's low-cost leader B) expand by adding new product lines C) reduce the company's size to increase market share D) save money by producing its own raw materials E) increase profits by offering one popular product
B
Companies like Ferrari are known as ________ because they carve out a market niche and compete by providing a product that customers can attain in no other way. A) cost leaders B) focusers C) visionaries D) market leaders E) complementary competitors
B
Human resource strategies are the ________ used to support a firm's strategic goals. A) visions and objectives B) policies and practices C) missions and goals D) plans and evaluations E) theories and tools
B
In order to generate the desired workforce skills, competencies, and behaviors that a firm needs to achieve its strategic goals, human resource management must first develop ________. A) HR consultants B) HR strategies C) HR databases D) employee cultures E) company norms
B
The concise measurement system used by companies to show the quantitative standards the firm uses to measure HR activities, employee behaviors resulting from the activities, and the strategically relevant organizational outcomes of those employee behaviors is called a(n) ________. A) evaluation system B) HR scorecard C) appraisal system D) evaluation benchmark E) annual report
B
The primary purpose of strategic human resource management is to ________. A) develop human resource policies that align with the industry standard B) link a company's strategic plan with its human resource strategies C) create stringent appraisal systems that highlight employee weaknesses D) eliminate bonuses for top management and distribute the cost savings among subordinates E) use offshoring to reduce human resource costs and to initiate globalization
B
Which of the following is most likely a true statement about high-performance companies? A) Most employees are members of a local labor union. B) Most employees receive regular performance appraisals. C) Employee turnover is extremely high. D) Only executives are eligible for incentive pay. E) The majority of jobs are filled externally.
B
? Exporting jobs from developed countries to countries with low labor force costs is known as ________. A) freelancing B) unionizing C) offshoring D) integrating E) networking
C
? In order to implement a marketing plan, Apple needs a(n) ________ that will address its productive assets like the factories, machines, and facilities required to manufacture and distribute its popular iPods. A) balance sheet B) pricing strategy C) operations plan D) income statement E) personnel plan
C
? Raj and his manager meet for lunch to jointly set Raj's quarterly sales goals. Raj's manager will periodically assess the progress Raj makes towards those goals. Raj and his manager are most likely participating in ________. A) strategic planning initiatives B) corporate-level strategizing C) management by objectives D) human resource arbitration E) job instruction training
C
? Strategic planning primarily benefits a firm's managers by ________. A) outlining procedures for firing employees B) creating a hierarchy of decision-makers C) establishing goals to be accomplished D) allowing employees to provide input E) clarifying the supply chain network
C
? Which of the following is the most important human resource issue to address during the first few months of a merger? A) interviewing and hiring low-level managers B) modifying benefits packages C) identifying and retaining key talent D) modifying employee pay grades E) eliminating annual employee reviews
C
A company's ________ strategy identifies the portfolio of businesses that comprise a firm and the ways in which these businesses relate to each other. A) functional B) business unit C) corporate-level D) competitive E) departmental
C
A course of action that a firm can pursue to achieve its strategic aims is known as a ________. A) vision B) goal C) strategy D) tactic E) mission
C
A firm's functional strategies identify the broad activities that each ________ will pursue in order to help the firm accomplish its competitive goals. A) board member B) supplier C) department D) executive E) employee
C
The primary tool used by managers who are performing external and internal audits as part of the strategic management process is the ________. A) BCG matrix B) QSPM matrix C) SWOT chart D) EPS/EBIT table E) MBO assessment
C
The sales director at WebMD is calculating annual sales revenue targets and the number of new medical-related content providers that the firm needs to maintain a competitive advantage. In which step of the strategic management process is the sales director involved? A) performing external and internal audits B) defining the business and its mission C) translating a mission into strategic goals D) evaluating strategic decisions E) implementing a strategy
C
Which of the following activities most likely indicates that a firm is implementing a vertical integration strategy? A) selling unprofitable divisions B) offshoring low-skill jobs C) producing raw materials D) aggressively selling a new product E) purchasing a competitor's firm
C
Which of the following is a simple guide used to compile relevant information about economic, competitive, and political trends that may affect a firm? A) organization chart B) workforce requirement matrix C) environmental scanning worksheet D) external resource system table E) potential globalization network
C
Which of the following terms refers to the quantitative measure of a human resource management yardstick such as employee turnover or qualified applicants per position? A) human resource audit B) high-performance work system C) human resource metric D) management by objectives E) human resource scorecard
C
? All of the following are roles that departmental managers would most likely have in the strategic planning process EXCEPT ________. A) assisting top managers in devising a strategic plan B) developing functional, departmental plans C) implementing functional, departmental plans D) deciding the businesses in which a firm will be involved E) providing input to top management about industry trends
D
? High-performance work systems have become necessary for U.S. firms due to ________. A) unemployment rates B) federal regulations C) increased minimum wages D) global competition E) cost leadership
D
? The purpose of the marketing plan that is included within a business plan is to ________. A) clarify the projected profits of a firm's products B) set long-term objectives for a firm's middle managers C) assign measurable goals for a firm's sales team D) specify the features of a firm's product or service E) describe the benefits of performing an industry analysis
D
? What is the first step of the HR audit process? A) planning the audit budget B) attaining top management support C) drafting an audit team D) determining the scope of the audit E) compiling internal and external checklists
D
Sweet Leaf Tea, a Texas-based maker of bottled iced tea, is a small but fast-growing firm that has gained a loyal following for its use of fresh, organic ingredients in its beverages. Although beverage industry experts recommended that Sweet Leaf replace the organic cane sugar and honey it uses with less costly high-fructose corn syrup, Sweet Leaf refused because of the company's mission to provide a high-quality, organic beverage to consumers. The 11-year old company has 50 employees, and its products are available in 30% of the U.S. market. Sweet Leaf Tea recently received multi-million dollar investments which will enable the business to expand its national presence. Which of the following, if true, would best support the argument that Sweet Leaf Tea should implement a corporate-level strategy of market penetration? A) Sweet Leaf Tea can expand its customer base and reduce costs by selling its products directly at Sweet Leaf stores. B) Sweet Leaf Tea can develop a national name by adding new product lines, such as organic snack foods and organic coffee. C) Sweet Leaf Tea's marketing research indicates that customers would purchase the organic beverages more frequently if the prices were lower. D) Sweet Leaf Tea can achieve growth by aggressively selling its beverages in current markets where loyal customers will help boost word-of-mouth. E) Sweet Leaf Tea's competitors primarily focus their marketing and distribution efforts on regional grocery-store chains rather than big box national retailers.
D
The primary purpose of implementing high-performance practices such as recruiting, screening, and training is to ________. A) foster a strong organizational culture B) eliminate the tendency to hire interns for full-time positions C) create management opportunities for new hires D) develop a trained and self-motivated workforce E) utilize benchmarks to compare personnel skills within an industry
D
What is the first step in the management planning process? A) evaluating the alternatives B) making forecasts of trends C) implementing a course of action D) setting an objective E) comparing options
D
Which of the following is a strategic planning tool that shows the "big picture" of how each department's performance contributes to achieving the company's overall strategic goals? A) HR audit B) strategic plan C) digital dashboard D) strategy map E) HR scorecard
D
Which of the following provides a summary of a firm's intended direction and shows, in broad terms, "what we want to become"? A) mission statement B) strategic plan C) code of ethics D) vision statement E) marketing plan
D
Which of the following refers to an analysis by which an organization measures where it currently stands and determines what it has to accomplish to improve its HR functions? A) HR methodology B) HR benchmark C) HR checklist D) HR audit E) HR ratio
D
Which of the following terms refers to a set of human resource management policies and practices that promote organizational effectiveness? A) management by objectives system B) human resource metric C) corporate-level strategy D) high-performance work system E) strategic human resource map
D
Winchester Rugs operates a web site called www.buyrugsdirect.com, so Winchester Rugs is most likely using a strategy of ________. A) consolidation B) conglomerate diversification C) geographic expansion D) vertical integration E) horizontal integration
D
? All of the following practices are most likely implemented by companies with high-performance work systems EXCEPT ________. A) hiring employees based on validated selection tests B) filling positions with internal candidates C) utilizing self-managing work teams D) providing extensive training to employees E) providing pay increases based on service years
E
? High-performance work organizations are most likely characterized by all of the following EXCEPT ________. A) multi-skilled work teams B) empowered front-line workers C) extensive training D) labor management cooperation E) commitment to high production rates
E
? SMART goals set by managers are ________. A) specific, measurable, aggressive, required, and tested B) short-term, motivational, attainable, relevant, and total C) standardized, manageable, accurate, restrictive, and tested D) short-term, measurable, aggressive, risky, and timely E) specific, measurable, attainable, relevant, and timely
E
? Strategic planning expert Michael Porter uses the term ________ to describe how a firm's departmental strategies and competitive aims should align for the greatest impact. A) strategic objectives B) visionary strategy C) vertical strategy D) strategic management E) strategic fit
E
? Which of the following most likely serves as the basis for the HR strategies developed by the majority of firms? A) mission statements B) potential strengths C) supervisory objectives D) competitive advantages E) workforce requirements
E
?Acquiring control of competitors in the same or similar markets with the same or similar products is known as ________. A) market penetration B) product development C) vertical integration D) geographic expansion E) horizontal integration
E
?Which of the following best explains the increased success of mergers and acquisitions in recent years? A) improvements in wireless communication technology B) union support of employee rights in multiple industries C) fewer restrictions regarding corporate globalization D) federal legislation regarding employee wages and rights E) consistent involvement of human resource management
E
A ________ presents a manager with desktop graphs and charts that illustrate where the company stands on metrics from the HR scorecard process. A) strategy map B) HR benchmark C) business plan D) scanning worksheet E) digital dashboard
E
A company's ________ strategy identifies how to build and strengthen the business's long-term competitive position in the marketplace. A) functional B) economic C) corporate-level D) horizontal E) competitive
E
All of the following are steps involved in the strategic management process EXCEPT ________. A) evaluating the firm's internal and external situation B) defining the business and developing a mission C) translating the mission into strategic goals D) crafting a course of action E) offshoring low-skill jobs
E
The use of human resource metrics is essential for ________. A) management by objectives B) emergent employee behaviors C) corporate-level strategies D) related diversification E) evidence-based management
E
Which of the following is the most significant difference between managerial planning and the basic planning process? A) evaluation of alternative methods B) comparisons of strengths and weaknesses C) establishment of clear objectives D) assessment of long-term goals E) interference from corporate hierarchies
E
Which of the following strategies identifies the broad activities that each department will pursue in order to help a business attain its competitive goals? A) competitive B) business-level C) corporate-level D) consolidation E) functional
E
A firm's marketing plan typically guides every functional department within a firm, including sales, manufacturing, and finance.
F
A mission statement is a general statement of a company's intended direction that evokes emotional feelings in the organization's members.
F
A vertical integration strategy means that a firm will expand by adding new product lines.
F
According to goal-setting studies, assigned goals rather than participatively set goals consistently result in increased employee performance and reduced employee resistance.
F
Consolidation keeps the company's strategy up to date by assessing progress toward strategic goals and taking corrective action as needed.
F
Cost leadership, differentiation, and focus strategies are types of corporate-level strategies.
F
Effective goals set by managers are specific, measurable, attainable, relevant, and tentative.
F
Goals are initiated by the bottom level of an organization according to the hierarchy of goals approach to strategic planning.
F
HR scorecards present managers with desktop graphs and charts of how a firm's HR strategies compare to those of other firms in the same industry.
F
High-performance companies are less likely than low-performance companies to invest in costly employee training programs.
F
Strategy implementation focuses more on translating a mission into goals than on the functions of organizing, staffing, and controlling.
F
? According to the U.S. Department of Labor, high-performance work organizations include multi-skilled work teams, empowered front-line workers, and extensive training.
T
? Employers adjust HR strategies and policies during significant changes in the economic and financial markets, such as recessions.
T
? Human resource audits and benchmarking are two critical tools used by managers who implement an evidence-based approach to human resource management.
T
? Human resource managers, department managers, and supervisors influence the number of qualified applicants for a position.
T
A business-level strategy is implemented by Pizza Hut, Domino's, Papa John's and Little Caesar's in their competition with each other for pizza customers.
T
A management objectives grid will most likely be used by a department manager to summarize for subordinates what their goals are in light of the department's goals.
T
A vision statement is broader and more future-oriented than a mission statement.
T
Companies with empowered, highly trained, flexible workforces have a competitive advantage.
T
Human resource metrics are used to assess a firm's HR performance and to compare one firm's HR performance with another firm's.
T
Human resource practices, such as hiring based on selection tests, pay raises based on work performance, and training provided to new and experienced employees, contribute to a company's ability to achieve high-performance levels.
T
Managers engage in three levels of strategic planning.
T
McDonald's addressed its lagging profitability by first closing stores operating below its guidelines. McDonald's used a consolidation strategy.
T
Strategic human resource management means formulating and executing HR systems that produce the employee competencies and behaviors a firm needs to achieve its strategic aims.
T
The basic steps in the management planning process include setting objectives, determining alternative courses of action, and evaluating which options are best.
T
The pro forma profit and loss statement on a firm's financial plan shows the revenue, cost, and profit/loss implications of a firm's marketing, production, and personnel plans.
T
The specific human resource policies and practices used to support a firm's strategic goals are known as human resource strategies.
T
There are seven steps in the strategic management process.
T