GBA chapter 10

The managerial approach to implementing and executing a strategy should always:

A. be customized to fit the particulars of a company’s situation.

B. involve only minor changes to the existing strategy.

C. require radical strategy changes for successful execution.

D. rely on the active support of frontline employees.

E. focus on market conditions and the company’s resources and capabilities.

a

The approach to identifying the items needed to be placed on management’s action agenda of the strategy execution plan always involves:

A. generalized activities that will underscore the particulars of the company’s situation.

B. some definitive managerial recipe for successful strategy execution that works for all company situations and all types of strategies, or that works for all types of managers.

C. a set of unimportant managerial tasks that must be covered no matter what the circumstances.

D. senior management’s judgment about how to proceed in light of prevailing circumstances.

E. a high-end differentiation strategy for proficient implementation and execution.

d

What does a good strategy execution require?

A. 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

B. Incremental changes to current operating practices be implemented to ensure existing resource capabilities are not impacted too severely

C. Little consensus building, despite the magnitude of the proposed changes, because employees know the benefits gained from the planning process

D. The strategy-critical value chain activities to be simplified so that all company personnel can be cognizant of the benefits of the execution parameters

E. Additional investments in capital projects rather than adding to a company’s talent base and building intellectual capital

a

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

The principal managerial components of the strategy execution process include:

A. deciding how much to spend on employee training.

B. instituting policies and procedures that facilitate strategy execution and tying rewards and incentives 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

Which of the following does NOT exemplify a policy or procedure that facilitates strategy execution?

A. A nonprofit agency that addresses only specific societal problems through public services

B. A toy manufacturing company that plans on reaching three different segments of the market

C. A fast food joint that has an onsite kindergarten and provides afterschool programs for its employees’ children

D. A sporting goods seller that monitors consumers’ preferences for gear and accessories on its blog

E. A bedding linen manufacturing company that recycles its water to cool the machines in the factory

c

In formulating an action agenda to implement and execute a new or different strategy, the place for managers to begin 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

When strategies fail, it is often because of:

A. poor execution of the strategy.

B. shortfalls exposed with the strategic management design process.

C. inadequate support for the management team responsible for the planning process.

D. secondary operating practices that hinder the required changes.

E. lack of sufficient information about operating systems.

a

The two best signs of good strategy execution are whether:

A. the company is challenging its current performance targets and whether value chain activities are fully integrated within the strategic response criteria.

B. managers are personally leading the change process and whether they are meeting deadlines set for budgetary requirements.

C. 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.

D. managers are fully behind the changes and whether the company’s value chain managers are executing them diligently.

E. the company identifies what the organization must do and how to make the necessary internal changes.

c

The most important leadership trait in the strategy execution process is:

A. a strong, confident sense of what to do and how to do it.

B. strong communication skills (both written and verbal) covering motivating intent.

C. strong management skills to ensure a systematic approach to administration.

D. strong organizational skills so as to make actions structured toward results.

E. strong empathy skills when employees run into challenging moments.

a

Executing strategy is a make-things-happen task that tests a manager’s ability to perform all of the following EXCEPT:

A. manage the people, talents, and business processes of an operations-driven activities company.

B. direct organizational change and achieve continuous improvement in operations and business processes.

C. create and nurture a strategy-supportive culture.

D. meet or beat performance targets consistently.

E. focus on market conditions and the company’s resources and capabilities.

e

Which 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. Implementing new strategic initiatives principally involves employing managerial techniques to overcome resistance to change.

D. Executing strategy requires a team effort which entails that every manager think 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

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 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

Which of the following statements about implementing and executing a new strategy is true?

A. Executing strategy calls 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.

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

Ultimate responsibility for seeing that a 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 the day-to-day responsibility of 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 the strategy’s 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

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 frontline supervisors who have the day-to-day responsibility of 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

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, especially the chief executive officer of the company.

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

Management’s handling of the strategy implementation/execution process can be considered successful:

A. when the internal organization develops two 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 to 12 months.

E. if managers and employees express strong support for the company’s strategy and long-term direction.

b

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, acquiring, developing, and strengthening key resources 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

Building an organization capable of good strategy execution entails:

A. staffing the organization, acquiring, developing, and strengthening key resources 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

Which of the following is NOT part of a senior executive’s agenda in big organizations with geographically scattered operating units?

A. Communicating the case for change

B. Directing resources to the right places

C. Building consensus for how to proceed

D. Establishing deadlines and measures of progress

E. Orchestrating the action steps and implementation sequence

e

Which of the following is part of strategy-supportive resources and capabilities?

A. Recruiting and retaining talented employees

B. Instituting organizational arrangements

C. Establishing lines of authority

D. Creating reporting relationships

E. Deciding how much authority to delegate

e

In which of the following steps does updating the company’s capabilities to match changing market conditions and customer expectations take place?

A. Staffing the organization

B. Recruiting and retaining talented employees

C. Acquiring, developing, and strengthening key resources and capabilities

D. Organizing value chain activities and business processes

E. Structuring the organization and work effort

c

Which of the following is NOT true of implementing a strategy?

A. It is critical to ensure strategy-supportive resources and capabilities are in place.

B. The level of personnel competence is irrelevant to proficient strategy execution.

C. It is important to assemble a strong management team.

D. Strengthening the firm’s core competencies is a top priority.

E. A poorly structured organization can lead to higher bureaucratic costs.

b

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?

A. Staffing the organization with managers and employees capable of executing the strategy well

B. Developing the resources and organizational capabilities required for successful strategy execution

C. Tying rewards and incentives directly to the achievement of strategic and financial targets

D. Adopting best practices and business processes to drive continuous improvement in strategy execution activities

E. Exercising the internal leadership needed to propel strategy implementation forward

c

Putting together a capable top management team with the right mix of experiences, skills, and abilities:

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 who are 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

Which of the following is one of the first steps to take in launching the strategy execution process?

A. Ensure all requirements of the value chain are fulfilled.

B. Form a mission statement as a basis for managers to achieve organizational objectives.

C. Go on the offensive by employing moves to make its product offering more distinctive and appealing to buyers.

D. Put together a talented management team with the right mix of experiences, skills, and abilities to get things done.

E. Strive to be more profitable than rivals and aim for a competitive edge based on bigger profit margins.

d

The paramount 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

Recruiting and retaining capable employees is:

A. usually much more important to good strategy execution than is assembling a capable top-management team.

B. important because the quality of an organization’s people is always an essential ingredient of successful strategy execution.

C. more important during periods of rapid growth than during periods of crisis and attempted turnarounds.

D. an important organization-building element, particularly when it comes to transforming a competence into a core competence or distinctive competence.

E. easily the most critical aspect in building competitively valuable core competencies and capabilities.

b

Which 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 if critical value chain activities are to be performed competently.

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 are 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

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?

A. Careful screening and evaluation of job applicants, along with continuous training and retraining programs for employees that continue throughout their careers

B. Rotating people through jobs that not only have great content but also span functional and geographic boundaries

C. Eliminating the bottom 10 percent of the lowest-performing employees each year to increase the overall quality performance metrics to above-average industry standards

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

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?

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. Providing employees promotions, salary increases, performance bonuses, stock options, and other perks

C. Coaching underperformers and benchwarmers to improve their skills and capabilities

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

The implementation process is likely to be hampered by missed deadlines, misdirected efforts, and managerial ineptness, if:

A. a capable results-oriented management team is not in place.

B. the personnel have different management styles.

C. top managers start asking tough, incisive questions.

D. important details require attention.

E. an additional investment in capital projects is required.

a

Who is most likely to have strong strategy implementation capabilities?

A. Michael has a talent for asking tough, incisive questions.

B. Samantha is often sympathetic to her team members’ failures.

C. Carl can complete a job in half the time as his colleagues.

D. Lily prefers completing a task by herself.

E. Rodrigo advocates promoting qualified people from within the firm.

a

It is ideal for key management slots to be filled from outside:

A. in turnaround and rapid-growth situations.

B. when problems with the old strategy are obvious.

C. in a worst-case scenario.

D. when the managerial whole is greater than the sum of individual efforts.

E. in a centralized structure.

a

Good strategy execution requires which of the following?

A. Putting those resources and capabilities into place, strengthening them as needed, and then modifying them as market conditions evolve

B. A universal business model to raise profits and lower costs

C. Strengthening the competitive environment arena outside the company’s operating territory

D. A planned budget to protect the company’s financial condition and eliminate wasteful use of cash

E. Passive pressures stemming from the dominance of outside market buyers

a

A dynamic capability is the:

A. ongoing capacity to modify existing resources and capabilities to create new ones.

B. improvement evaluation process for eliminating waste in the firm.

C. functional and operating resources management process.

D. ongoing capability to understand and establish a rival commitment to resource alignment.

E. most compelling product or service a firm .

a

The most common approaches to capability building include all of the following, EXCEPT:

A. developing capabilities internally.

B. acquiring capabilities through mergers and acquisitions.

C. accessing capabilities via collaborative partnerships.

D. renewing capabilities to align with customer expectations.

E. coaching average performers to improve their skills.

e

Which of the following is TRUE of the capability building process?

A. 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.

B. It entails (1) deciding which value chain activities to perform internally and which ones to outsource; and (2) deciding how much authority to centralize at the top and how much to delegate to down-the-line managers and employees.

C. It is essential (1) when the company does not have the ability to create the needed capability internally (perhaps because it is too far afield from its existing capabilities), and (2) when industry conditions, technology, or competitors are moving at such a rapid clip that time is of the essence.

D. It involves (1) staffing the organization with people capable of executing the strategy well, (2) developing the resources and building the organizational capabilities needed for successful strategy execution, and (3) creating an organizational structure supportive of the strategy execution process.

E. It must (1) supplement the design with appropriate coordinating mechanisms, and (2) institute whatever networking and communications arrangements are necessary to support effective execution of the firm’s strategy.

a

Core competencies and competitive capabilities are usually:

A. 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. observed to stem from collaborative efforts with strategic allies.

C. 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.

D. found to result in competitive advantage when they involve highly specific technologies and are grounded in a company’s own deep technical expertise.

E. built rapidly, usually in conjunction with important product innovations.

c

The traits of the capability building process involve all of the following EXCEPT:

A. evolving changes in customer needs and competitive conditions that 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. a core competence or capability that 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 that 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), which concerns concentrating more effort and talent than rivals on deepening and strengthening a competence or capability so as to achieve the dominance needed for competitive advantage.

E. saving time by creating capabilities from scratch to remain aligned with external conditions and company strategy rather than updating and remodeling existing capabilities.

e

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

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 so 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 blossom quickly.

d

Firms generally leverage the expertise of their talent pool in building capabilities by:

A. updating existing capabilities.

B. establishing a new arsenal of resource capabilities by phasing out existing capabilities.

C. refreshing existing capabilities.

D. augmenting or recombining well-established capabilities with existing resources.

E. building resource capabilities from scratch so it is easy and less time-consuming.

d

Managerial actions to develop core competencies and competitive capabilities internally generally take one of two forms. What are they?

A. Either strengthening the company’s base of skills, knowledge, and experience or coordinating and integrating the efforts of various work groups and departments

B. Either putting in high incentive bonuses to reward individual employees who train hard to develop the desired capability or launching an extensive training effort to develop the capability quickly with newly hired employees

C. Either using benchmarking and the adoption of best practices to imitate a capability that rivals have already developed or empowering a team of employees to develop the capability however they best see fit

D. Either using developed dynamic capabilities or acquiring the capability from outside sources

E. Either by enforcing close cross-business collaboration or by centralizing the performance of functions requiring close coordination at the corporate level

a

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 develop quickly and, once put in place, can last for a decade or more.

e

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 see fit.

c

What is the advantage of acquiring capabilities through merger and acquisition?

A. Speed, since developing new capabilities internally can take many years of effort

B. Empowerment, since you can capture the essence of the capability and refocus the firm

C. Price, as it is always cheaper to buy a whole company and pull out the capabilities individually

D. Assets, as it the basis of the sale

E. Investment, since resources and capabilities are considerable stronger

a

When are capabilities-motivated acquisitions essential?

A. When industry conditions, like technology advances are central to growth and rivalry is intense

B. When first-mover advantages for products or services can be added to the portfolio lineup

C. When the acquired firm can be purchased at a discount due to underperformance

D. When a market opportunity can slip by faster than a needed capability can be created internally

E. When the capabilities involve tacit knowledge and complex routines

a

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 a 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

The strategic importance of deliberately trying to develop organizational competencies and capabilities is:

A. lower costs for employee training.

B. improved strategy execution and a potential for competitive advantage.

C. an increased ability to reduce total operating costs.

D. the added ease with which strategic fit and resource fit benefits can be captured.

E. the enhanced ability to avoid the perils of outsourcing.

b

Accessing capabilities through an external source can be accomplished through all of these EXCEPT:

A. outsourcing, but depends on what can safely be delegated to outside suppliers.

B. joint ventures, which depend on how well the partners will work together.

C. strategic alliances, which should be selected as much for management style, culture, and goals as for their resources and capabilities.

D. learning-based collaborative partnerships for the purpose of learning how the partner does things, internalizing its methods, and thereby acquiring its capabilities.

E. promoting qualified people with the right know-how in a timely and cost-effective manner.

e

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 rivals 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

Superior strategy execution capabilities are:

A. easy for rivals to copy.

B. socially simple..

C. develop quickly.

D. easy to achieve.

E. hard to imitate.

e

What is the rule for organizing the work effort to support good strategy execution?

A. Match the firm’s organizational structure to its unique strategy.

B. Decide on how much to spend on training managers and employees.

C. Choose an organization structure that is a tight fit with the corporate culture.

D. Ensure the firm hires a capable management team.

E. Learn how the collaborative partner does things.

a

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 an inexpensive yet capable management team.

E. instituting a compensation structure that reduces employee turnover and thus stabilizes the makeup of work teams.

b

Which of the following is NOT part of organizing the work effort in ways that promote successful strategy execution?

A. Facilitating collaboration with external partners 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. Maintaining expertise and resource depth in performing those internally strategy-critical value chain activities that underpin its long-term competitive success and provide for the main building blocks in the organization structure

d

Outsourcing value chain activities has such strategy executing advantages as:

A. less internal bureaucracy, speedier decision making, and quicker responses to changing market conditions.

B. facilitating the empowerment of employees (because there are fewer 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

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, and shorten the time it takes to respond to changing market conditions.

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. reduce the potential for information overload and improve the quality of decision making in each domain.

b

Which 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

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

Which of the following statements about outsourcing the performance of value chain activities to outside specialists is FALSE?

A. Outsourcing support services often has the disadvantage of raising fixed and variable costs.

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 supplierscan 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

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 competencies to ensure cost reduction and competitiveness.

E. a number of independent functional units involved in some common undertaking, with one unit typically in a more central role.

b

In order to coordinate and control the complex set of activities, managers must ensure:

A. the organizational structure enables bureaucratic waste and strives for eliminating imposed capacity limitations of the strategy.

B. the various parts of the organizational structure are aligned with one another and also matched to the requirements of the strategy.

C. they have enough employees dedicated to the various functions to attain economies of scale benefits.

D. they can orchestrate the process with forceful administration and political maneuvering.

E. they accommodate situational idiosyncrasies to build a competitively capable organization.

b

The rationale for making strategy-critical value chain activities the primary building blocks in a company’s organizational scheme is based on the:

A. much shorter time it takes to build core competencies and competitive capabilities.

B. benefit such an organizational scheme has in reducing costs.

C. benefit such an organizational scheme has in improving the productivity of geographically scattered organizational units.

D. 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.

E. benefit such an organizational scheme has in making the empowerment of employees more effective.

d

Which of the following is unlikely to be a primary building block in a company’s organizational structure?

A. Functional departments

B. Process and operations departments

C. Empowered employee departments

D. Divisional units performing major processing steps

E. Geographic organizational units

c

Which of the following does NOT describe the standard type of 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. A network structure where independent organizations are involved in a common undertaking

e

When an organization is referred to as a line and staff structure or a flat structure, it is normally considered:

A. a simple structure.

B. a functional structure.

C. a matrix structure.

D. a multidivisional structure.

E. a departmental structure.

a

How is a functional structure or unitary structure organized?

A. With a central executive handling all major decisions

B. To lighten the load of senior executives so they can concentrate on value chain action agendas

C. Specifically to manage unrelated diversification opportunities

D. Into functional departments, with departmental managers who report to the CEO and small corporate staff

E. With top-heavy management, and senior executives forming a central office of the chairman

d

A multidivisional structure consists of a:

A. centralized structure combining corporate overhead with support functions.

B. 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.

C. decentralized structure or divisional structure that monitors performance and allocates funding to those divisions wanting to grow.

D. decentralized format of senior executives with large overhead staff to manage and control all the business lines.

E. centralized structure that controls the coordination across the more diversified and complex functions within the organization.

b

Which structure combines two or more organizational forms, with multiple reporting relationships, and is used to foster cross-unit collaboration?

A. Matrix structure

B. Composite structure

C. Divisional structure

D. Network structure

E. Functional structure

b

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 with simpler structures.

D. more centralized in their decision making than smaller firms.

E. not decentralized due to their operating size.

b

Which of the following is NOT a characteristic of a highly centralized organizational structure?

A. Top-level managers retain decision authority for most strategic and operating activities.

B. Strict control and enforcement of detailed procedures backed by rigorous managerial accountability is the most reliable way to keep the daily execution of strategy on track.

C. Tight control from the top is a more effective means for coordinating company actions and 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, they lack the knowledge and judgment to make wise decisions about how best to do their work.

E. 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.

e

A disadvantage of the centralized organization is that it:

A. lengthens response times by those closest to the market conditions because they must seek approval for their actions.

B. does not encourage responsibility among lower-level managers and rank-and-file employees.

C. discourages lower-level managers and rank-and-file employees from exercising any initiative.

D. diverts authority away from those closest to, and most knowledgeable about, the situation for actions.

E. results in higher-level managers being unaware of actions taken by empowered personnel under their supervision.

e

A decentralized organizational structure is predicated on the 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 to 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, and 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

Which of the following is a disadvantage of a centralized organizational structure?

A. Lengthening response times and discouraging lower-level managers and rank-and-file employees from exercising initiative

B. Losing top-level 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 the capture of strategic fits

a

Which of the following is a disadvantage of a decentralized organizational structure?

A. Increasing the size of the corporate bureaucracy

B. Reducing a company’s response times to changing external events

C. Discouraging lower-level managers and rank-and-file employees from exercising initiative

D. Putting the organization at risk if higher-level management is unaware of their actions

E. Creating more layers of management

d

Which of the following is an advantage of a decentralized organizational structure?

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. Generating higher productivity on the part of the workforce and a greater ability to become an industry low-cost leader

D. Enhancing cross-unit coordination and the capture of strategic fits

E. Establishing the emergence of a collegial, collaborative culture where teamwork is a core value and decisions are made on the basis of consensus

a

Delegating greater authority to subordinate managers and employees:

A. creates a more horizontal or flatter organizational 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 risky because it usually results in lots of "bad" decisions on the part of employees, as well as lower levels of financial performance.

E. enhances greater cross-unit coordination and aids the capture of strategic fit benefits across related businesses.

a

The organizing challenge of a decentralized structure that 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

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

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, with 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

Diversified companies striving to capture the benefits of synergy between separate businesses have to be aware of all of the following challenges EXCEPT:

A. giving business-unit heads full rein to operate independently.

B. having pieces of strategically relevant activities and capabilities scattered across many departments, with each pursuing its own priorities, projects, and agendas.

C. centralizing performance of functions requiring close coordination at the functional level.

D. serving the interests of individual businesses and not the company as a whole.

E. forming cross-business strategic fit by enforcing close collaboration.

e

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 that has 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

Which of the following is NOT a characteristic of a network structure?

A. It ensures that the right partners are included and the activities are coordinated.

B. It encourages a more effective collaboration and cooperation among partners.

C. It includes a hand-picked, integrated network of suppliers.

D. It is an arrangement of independent organizations involved in a common undertaking.

E. It established that no one firm has a central control over the others.

e

A company must do all of the following to match structure to strategy EXCEPT:

A. choose a basic organizational design and modify it 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. set up "ideal" organizational arrangements despite having to disturb existing relationships.

E. knit the efforts of outsourced groups together.

e