INTB 409 Test #2

A company's ability to marshal adequate resources in support of new strategic initiatives and steer them to the appropriate organizational unites is important to the strategy execution process because...

changes in strategy often require resource reallocation and organizational units need the proper funding to carry out their part of the strategic plan effectively and efficiently.

Managers charged with implementing and executing strategy need to be deeply involved in the budgeting and resource allocation process because...

- too little funding deprives organizational units of the resources to carry out their piece of strategic plan and too much funding wastes organizational resources -a change in strategy nearly always calls for budget reallocations and resource shifting

From a strategy- implementing/strategy-executing perspective, budget allocations should...

be strategy-driven and based primarily on how much each organizational unit needs to carry out its piece of the strategic plan efficiently and effectively

New strategies often entail budget reallocations because..

units important in the prior strategy but having lesser a role in the new strategy, may need downsizing while units and activities that now have a bigger and more critical strategic role may need more people, new equipment, additional facilities, and above-average increases in their operating budgets

Visible actions to reallocate operating funds and move people into different organizational units..

signal a determined commitment to strategic change and can help catalyze and give credibility to the implementation process

Prescribing policies and operating procedures aids the task of implementing strategy by

placing limits on independent action and painting new white lines to steer the actions and behavior of company personnel in a manner that is more conducive to good strategy execution and operating excellence

Prescribing new policies and operating procedures can aid the task of implementing strategy

by helping align the actions and behavior company personnel with the requirements for good strategy execution, placing limits on independent action, and helping overcome resistance to change

A usefull guideline in designing strategy-facilitating policies and operating procedures is

to prescribe enough policies to give organizational members clear direction in implementing strategy and to place desirable boundaries on their actions, then empower them to act within these boundaries however they think they make sense.

What its not a benefit of prescribing policies and operating procedures to aid management's task of implementing strategy?

helping build employee commitment to adopting best practices and using the tools and TQM and Six Sigma

Company managers can significantly advance the cause of superior strategy execution by

- using various process management tools to drive continuous improvement in how internal operations are conducted - benchmarking the company's performance of particular activities and business processes against "best-in- industry" performers - examining "best-in-company" performers if a company's different organizational units is performing the same functions at different locations - benchmarking the company's performance of particular activities and business processes against "best-in-world" performers

A "best practice" refers to..

a technique for performing an activity or business process that at least one company has demonstrated works particularly well in terms of delivering some highly positive operating outcome

A "best practice"

is a technique for performing an activity or business process that at least one company has demonstrated works particularly well in terms of delivering some highly positive operating outcome

The idea behind benchmarking and best practices is to

identify companies that are the best performers of an activity and then modify and adapt their practices to fit the company's own specific circumstances and operating requirements.

What is benchmarking?

the backbone of identifying, studying, and implementing best practices

What is not a tool that company managers can use to promote operating excellence in performing value chain activities?

adoption of standard industry techniques

What is not a tool that managers can use to promote operating excellence and further the cause of good strategy execution?

strategic resource training

Because functional organization structures often result in pieces of strategically relevant activities and capabilities being scattered across many different functional departments, companies have found that

there is merit in using business process re-engineering to pull the pieces of strategy-critical processes out of different departments and unify their performance in a single department or cross-functional work group that has charge over the whole process

Business process re-engineering is a tool for..

pulling the pieces strategy-critical activities out of different departments and unifying their performance in a single department or cross-functional work group that has charge over the whole process and can be held accountable for performing the activity in a more strategy-supportive fashion

Reengineering how a firm performs a business process

is a tool pulling the pieces of strategy-critical processes out of different departments and unifying their performance in a single department or cross-functional work group that has charge over the whole process and can be held accountable for performing the activity in a cheaper, better, and/ or more strategy supportive fashion.

Total Quality Management

is a philosophy of managing a set of business practices that emphasizes continuous improvement in all phases of operations, 100% accuracy in performing tasks, involvement and empowerment of employees at all levels team-based work design, benchmarking, and total customer staisfaction

What does Total Quality Management not emphasize?

widespread adoption of industry standard operating practices.

Total quality management programs

entail creating a corporate culture bent on continuously improving the performance of every task and every value-cahin activity

TQM does not produce significant results very quickly- very little benefit emerges after the first six months

...

Six Sigma quality control

consists of a disciplined, statistics-based system aimed at producing not more than 3.4 defects per million iterations for any business process

Six Sigma processes

can be used for both improving existing business processes and for developing new processes or products

The Six Sigma of define, measure, analyze, improve, and control (DMAIC) is

an improvement system for existing processes falling below specification and needing incremental improvement

Six Sigma's DMADV process of define, measure, analyze, design and verify is a particularly good vehicle for

developing new processes or products at Six Sigma quality levels.

The statistical thinking underlying Six Sigma is based on the following three principles..

all work is a process, all processes have variability, and all processes create data that explains variability

What is true about Six Sigma quality programs?

While Six Sigma programs often improve the efficiency of numerous operating processes, there is evidence that the approach can stifle innovative activities

The big difference between business process reengineering and continuous improvement programs like TQM or Six Sigma is that..

reengineering is a tool for achieving one-time quantum improvement whereas TQM and Six Sigma programs aim at incremental improvement ( striving for inch-by-inch gains again and again in a never-ending stream)

To obtain maximum benefits from benchmarking, best practices, reengineering, TQM, and Six Sigma programs aimed at facilitating better strategy execution, managers need to

start with a clear idea of what specific outcomes really matter, such as Six Sigma defect rate or superior customer satisfaction, and then build a total quality culture that is genuinely committed to achieving these outcomes

To build a total quality culture and achieve full value from the use of TQM or Six Sigma initiatives, managers can take such action steps as

signaling unequivocal and unyielding commitment to total quality and operating excellence; encouraging quality- supportive behaviors on the part of employees, empowering employees to make changes to improve quality; and using online systems to give employees immediate access to best practice information and experiences

Installing well-conceived state of the art support systems are an important managerial component of implementing and executing strategy because

such support systems not only enable better strategy execution but also strengthen organizational capabilities( perhaps enough to proved a competitive edge over rivals

Well conceived, state-of-the- art information and operating systems

not only enable better strategy execution but also strengthen organizational capabilities ( perhaps enough to provide a competitive edge over rivals)

The areas that information systems need to cover are

- financial performance data -supplier/partner/collaborative data -customer data -operations data

What area do information systems not need to cover?

- corporate culture idea

Information systems provide managers with a means for monitoring

- daily team performance in real time -the performance of empowered workers to see that they are acting within the specified limits -daily and weekly operating statistics

Management's most powerful tool for mobilizing employee commitment to competent strategy execution and operating excellence is

proper use of incentives and rewards

Management's most powerful tool for winning employee commitment to good strategy execution and operating excellence is

a system of rewards and incentives tied tightly to the achievement of the targeted strategic and financial performance

The strategic role of a company's reward system is to

enlist employee's energetic commitment to competent strategy execution and operating excellence by rewarding them, both monetarily and non-monetarily, for their contributions

Enlisting employees' sustained and energetic commitment to good strategy execution and achievement of the targeted strategic and financial objectives is best done by

resourceful and effective use of motivational incentives, both monetary and non-monetary

In trying to gain employees' wholehearted commitment to good strategy execution and operating excellence,managers are well advised to use such incentives

-attractive perks and fringe benefits -frequent words of praise, special recognition at company gatherings, stimulating assignments, and opportunities to transfer to attractive locations - a more ( or less) job security - opportunities for rapid promotion ( or the risk of being sidelined)

What is not likely to be effective in trying to gain employees' wholehearted commitment to good strategy execution and operating excellence?

- aggressive management efforts to eliminate stress, anxiety, and job insecurity from the work environment

A motivation and incentive system that is aimed at spurring stronger execution

should focus on incorporating more positive than negative motivational incentives

From the standpoint of promoting successful strategy execution, it is important that the firm's motivation and reward system

accentuate positive rewards but also carry the risk of punishment for poor performance

A reward system that accentuates positive rewards for good performance

has considerable appeal because when cooperation is positively enlisted and rewarded, rather than strong-aimed by orders and threats ( implicit or explicit), people tend to respond with more enthusiasm, dedication, creativity, and intiative

Motivational incentive compensation practices that aim at winning the commitment of company personnel to good strategy execution typically

strike middle ground- entailing decidedly positive rewards for meeting or beating performance targets but also imposing sufficiently negative consequences when actual performance falls short of the target

The most dependable way to keep people focused on strategy execution and the achievement of performance targets is to

generously reward and recognize people who meet or beat performance targets and to deny rewards and recognition to those who don't

A well-designed reward system

aligns the well-ebing of organization members with their contributions to competent strategy execution and the achievement of performance targets

An important consideration in designing a strategy-supportive reward system is to

make non-monetary rewards and recognition an integral part of the reward system

The guidelines for designing an incentive compensation system that will help drive successful strategy execution include

making the payoff for meeting or beating performance targets a major, not minor, piece of the total compensation package

Which of the following is not a sound guideline for designing a reward and incentive system that helps promote good strategy execution?

Ways must be found to reward deserving non-performers who, for some reason, do not fare well under the incentive system

What is not a characteristics of a compensation and reward system designed to help drive successful strategy execution?

A reward system that involves 50 percent non-monetary rewards and a work environment that avoids placing pressure on managers and employees to perform at high levels.

According to the cost allocation principles used in the company's accounting systems, if a company spends $3 million on advertising in a given geographic region, sells 600,000 branded pairs online in the region , and sells 2.4 million branded pairs to footwear retailers in the region then...

advertising costs per pair sold online would be $1.00 and advertising costs per pair sold to retailers would be $1.00.

Based on information on the Help Screen for the Plant Operations Report (see the Plant Investment section), if a company adds new plant capacity at a cost of $50 million, then its annual depreciation costs will rise by

$2,500,000

In supplying private-label footwear to chain retailers, the sizes of a company's margins over direct costs should be viewed as

how much private-label sales added to the company's pretax profits, assuming that the company's margins on branded footwear were sufficient to cover all administrative expenses and all interest costs.

Income Statement Data Year 12
(in 000s)
Net Revenues from Footwear Sales $ 300,000
Cost of Pairs Sold 190,000
Warehouse Expenses 15,000
Marketing Expenses 40,000
Administrative Expenses 8,000
Operating Profit (Loss) 47,000
Interest Income (expenses) (10,000)
Pre-tax Profit (Loss) 37,000
Income Taxes 11,100
Net Profit (Loss) $ 25,900

Admin expenses are 3.9% of net revenues.

The accounts payable entry on the company's balance sheet represents

25% of the year's materials costs incurred in making branded and private-label footwear that are owed to suppliers and that will be paid for in the first quarter of the upcoming year (payments for materials delivered by suppliers are not due and payable for 90 days following delivery).

If a company wants to enhance the profitability of differentiating its branded product offering from rivals by offering say 500 models, then it should seek to reduce the costs associated with producing 500 models at its plants by

instituting plant upgrade option B and perhaps consolidating the production of branded footwear in just one plant (to only incur the payment of production run setup costs one time

An exchange rate shift that causes the Sing$ to be stronger versus the US$ - signaled by a positive percentage number for the Exchange Rate Impact on Cost of Pairs shipped from an Asia-Pacific plant to North America (US$ per Sing$) in the Exchange Rate box on your Corporate Lobby screen

weakens the cost-competitiveness of footwear made in Asia-Pacific plants and exported to North American distribution centers for sale to footwear customers in North America.

As explained on the Help screen for the Cash Flow Statement, if a company generates revenues of $280 million in Year 11, revenues of $300 million in Year 12, and revenues of $300 million in Year 13, then its cash receipts from footwear sales will be

25% of Year 11 revenues and 75% of Year 12 revenues for a total cash inflow of $295 million in Year 12

If a company pays a production worker a base wage of $2,800 and a piecework incentive of $0.30 per pair, if a production worker's annual productivity is 2,500 pairs per year, and if a plant's reject rate averages 4%, then the average annual compensation of production workers would be

$3,520 (because workers do not receive a piecework incentive on pair rejected due to defects)

Based on information on both the Help screens for the Plant Operations Report and the Private-Label Sales Report, which of the following statements regarding how plant costs are allocated between branded and private-label footwear is true?

Annual plant supervision costs and plant depreciation costs are allocated between branded production and private-label production according to their respective percentages of total pairs produced—thus, if 95% of the total pairs produced at a plant are branded then 95% of annual plant supervision costs and plant depreciation costs are allocated to branded production.

Based on information on the Help screen for the Marketing and Admin Report (see the section on Administration Expenses), which of the following statements regarding your company's administrative costs is false?

Administrative costs are allocated between branded production and private-label production according to their respective percentages of total pairs sold.thus, if 65% of the total pairs sold are branded then 65% of annual administrative costs are allocated to branded footwear.

As is explained on both the Help screens for the Branded Sales Report and the Private-Label Sales Report, when exchange rate shifts result in a stronger US$ and a weaker Singapore $, then the Sing$ collected on footwear sales in the Asia-Pacific, when converted into US$, result in

foreign exchange losses that have the effect of reducing company revenues and profits.

Which one of the following actions is most likely to result in higher production costs per branded pair at one of your company's plants?

Increasing the number of branded models/styles produced from 150 to 500.

According to the cost allocation procedures discussed on the Help screens for the Private Label Sales Report and the Marketing and Admin Report, should a company win contracts to supply chain retailers with private-label shoes, which of the following are included as part of a company's production costs for private-label footwear?

Production run set-up costs Expenditures for best practices training Plant supervision costs Plant depreciation

The top-level executive task of crafting a diversified company's overall or corporate strategy includes what?

Evaluating the growth and profitability prospects for each business and then investing aggressively in the most promising businesses with the best prospects, investing cautiously in businesses with just average prospects, and divesting businesses with unacceptable prospects

When single-country markets are not large enough to allow a firm to achieve optimum scale, the effect is best described as:

a HIGH cost globalization driver

A worldwide trend towards relaxation of trade barriers would
best be considered:

a HIGH government globalization driver

Which of the following BEST describes the concept of a "Lead Country"?

a country with significant innovation and/or demanding customers in your industry

In global strategy analysis, experience curve effects are most appropriately included:

as a cost globalization driver

The following are all components of which one of Yip's globalization drivers?
High Level of Exports and Imports in Country
Interdependence of Countries in Region
Transferable Competitive Advantage Possible
Competitors from different continents in Country

Competitive Globalization Drivers

In the article, "Two misplaced debates in Business Strategy", one of the debates concerns whether the world markets are global, multinational or semi-global. What is the nature of the second debate?

The dilemma of whether one should use a global standardization or local customization strategy.

Which one of Bartlett & Ghoshal's strategies
Is most likely to be used with globally standardized luxury goods?

Home replication

According to the article, "The glocal strategy of global brands", there are three strategies available in global marketing. One is global strategy (uniform product, uniform message), one is local strategy (customized product, customized message), and the third is:

Glocal Strategy: Customized Product/Uniform Message Or Uniform Product/Customized Message

According to the "Two misplaced debates in business Strategy" article, what are the three types of markets found in the world?

Pure global, pure multinational, and semiglobal

According to the article, "The glocal strategy of global brands", what are the two dimensions that comprise the authors' alternative framework for global marketing?

Product strategy and communication strategy

Procter & Gamble describes itself as having broad segment scope. What are the segment "tiers" that P&G targets?

super-premium, premium, middle and value products

Which element of the company is primarily responsible for
P&G's Aggregation Strategy?

Global Business Services (GBS) -- it implements P&G's ERP system

In the article, "Is Everyone Nuts? P&G Now A Dog? And Unilever A Star?" ,
what reason is given for Unilever's stock price outperforming P&G's?

P&G's stock price didn't fall as much as Unilever's during the crash, and therefore did not have to recover as much

In the article, "In Brand Management, if Apple's the New P&G,
What the Hell is P&G?", what reason is cited as one of the main causes
of P&G's problems?

increasing geographic and segment scope too fast

Suppose a country requires that at least 25% of the value of all automobiles sold within its borders must be added within that country. This requirement is:

This is a local content rule, a type of non-tariff barrier.

The tax breaks given to Boeing to entice the company to locate a new production facility in South Carolina:

Are a type of subsidy

Super Bowl commercials designed to increase sales of
Miller Lite beer in America is which intensive grand strategy?

Market penetration

Which of the following is an example of a "strong corporate brand"?

Intel

Sony's launches of Playstation 2, then PS3, then PS4, are examples of which intensive grand strategy?

Product development

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INTB 409 Test #2

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A company’s ability to marshal adequate resources in support of new strategic initiatives and steer them to the appropriate organizational unites is important to the strategy execution process because…

changes in strategy often require resource reallocation and organizational units need the proper funding to carry out their part of the strategic plan effectively and efficiently.

Managers charged with implementing and executing strategy need to be deeply involved in the budgeting and resource allocation process because…

– too little funding deprives organizational units of the resources to carry out their piece of strategic plan and too much funding wastes organizational resources -a change in strategy nearly always calls for budget reallocations and resource shifting

From a strategy- implementing/strategy-executing perspective, budget allocations should…

be strategy-driven and based primarily on how much each organizational unit needs to carry out its piece of the strategic plan efficiently and effectively

New strategies often entail budget reallocations because..

units important in the prior strategy but having lesser a role in the new strategy, may need downsizing while units and activities that now have a bigger and more critical strategic role may need more people, new equipment, additional facilities, and above-average increases in their operating budgets

Visible actions to reallocate operating funds and move people into different organizational units..

signal a determined commitment to strategic change and can help catalyze and give credibility to the implementation process

Prescribing policies and operating procedures aids the task of implementing strategy by

placing limits on independent action and painting new white lines to steer the actions and behavior of company personnel in a manner that is more conducive to good strategy execution and operating excellence

Prescribing new policies and operating procedures can aid the task of implementing strategy

by helping align the actions and behavior company personnel with the requirements for good strategy execution, placing limits on independent action, and helping overcome resistance to change

A usefull guideline in designing strategy-facilitating policies and operating procedures is

to prescribe enough policies to give organizational members clear direction in implementing strategy and to place desirable boundaries on their actions, then empower them to act within these boundaries however they think they make sense.

What its not a benefit of prescribing policies and operating procedures to aid management’s task of implementing strategy?

helping build employee commitment to adopting best practices and using the tools and TQM and Six Sigma

Company managers can significantly advance the cause of superior strategy execution by

– using various process management tools to drive continuous improvement in how internal operations are conducted – benchmarking the company’s performance of particular activities and business processes against "best-in- industry" performers – examining "best-in-company" performers if a company’s different organizational units is performing the same functions at different locations – benchmarking the company’s performance of particular activities and business processes against "best-in-world" performers

A "best practice" refers to..

a technique for performing an activity or business process that at least one company has demonstrated works particularly well in terms of delivering some highly positive operating outcome

A "best practice"

is a technique for performing an activity or business process that at least one company has demonstrated works particularly well in terms of delivering some highly positive operating outcome

The idea behind benchmarking and best practices is to

identify companies that are the best performers of an activity and then modify and adapt their practices to fit the company’s own specific circumstances and operating requirements.

What is benchmarking?

the backbone of identifying, studying, and implementing best practices

What is not a tool that company managers can use to promote operating excellence in performing value chain activities?

adoption of standard industry techniques

What is not a tool that managers can use to promote operating excellence and further the cause of good strategy execution?

strategic resource training

Because functional organization structures often result in pieces of strategically relevant activities and capabilities being scattered across many different functional departments, companies have found that

there is merit in using business process re-engineering to pull the pieces of strategy-critical processes out of different departments and unify their performance in a single department or cross-functional work group that has charge over the whole process

Business process re-engineering is a tool for..

pulling the pieces strategy-critical activities out of different departments and unifying their performance in a single department or cross-functional work group that has charge over the whole process and can be held accountable for performing the activity in a more strategy-supportive fashion

Reengineering how a firm performs a business process

is a tool pulling the pieces of strategy-critical processes out of different departments and unifying their performance in a single department or cross-functional work group that has charge over the whole process and can be held accountable for performing the activity in a cheaper, better, and/ or more strategy supportive fashion.

Total Quality Management

is a philosophy of managing a set of business practices that emphasizes continuous improvement in all phases of operations, 100% accuracy in performing tasks, involvement and empowerment of employees at all levels team-based work design, benchmarking, and total customer staisfaction

What does Total Quality Management not emphasize?

widespread adoption of industry standard operating practices.

Total quality management programs

entail creating a corporate culture bent on continuously improving the performance of every task and every value-cahin activity

TQM does not produce significant results very quickly- very little benefit emerges after the first six months

Six Sigma quality control

consists of a disciplined, statistics-based system aimed at producing not more than 3.4 defects per million iterations for any business process

Six Sigma processes

can be used for both improving existing business processes and for developing new processes or products

The Six Sigma of define, measure, analyze, improve, and control (DMAIC) is

an improvement system for existing processes falling below specification and needing incremental improvement

Six Sigma’s DMADV process of define, measure, analyze, design and verify is a particularly good vehicle for

developing new processes or products at Six Sigma quality levels.

The statistical thinking underlying Six Sigma is based on the following three principles..

all work is a process, all processes have variability, and all processes create data that explains variability

What is true about Six Sigma quality programs?

While Six Sigma programs often improve the efficiency of numerous operating processes, there is evidence that the approach can stifle innovative activities

The big difference between business process reengineering and continuous improvement programs like TQM or Six Sigma is that..

reengineering is a tool for achieving one-time quantum improvement whereas TQM and Six Sigma programs aim at incremental improvement ( striving for inch-by-inch gains again and again in a never-ending stream)

To obtain maximum benefits from benchmarking, best practices, reengineering, TQM, and Six Sigma programs aimed at facilitating better strategy execution, managers need to

start with a clear idea of what specific outcomes really matter, such as Six Sigma defect rate or superior customer satisfaction, and then build a total quality culture that is genuinely committed to achieving these outcomes

To build a total quality culture and achieve full value from the use of TQM or Six Sigma initiatives, managers can take such action steps as

signaling unequivocal and unyielding commitment to total quality and operating excellence; encouraging quality- supportive behaviors on the part of employees, empowering employees to make changes to improve quality; and using online systems to give employees immediate access to best practice information and experiences

Installing well-conceived state of the art support systems are an important managerial component of implementing and executing strategy because

such support systems not only enable better strategy execution but also strengthen organizational capabilities( perhaps enough to proved a competitive edge over rivals

Well conceived, state-of-the- art information and operating systems

not only enable better strategy execution but also strengthen organizational capabilities ( perhaps enough to provide a competitive edge over rivals)

The areas that information systems need to cover are

– financial performance data -supplier/partner/collaborative data -customer data -operations data

What area do information systems not need to cover?

– corporate culture idea

Information systems provide managers with a means for monitoring

– daily team performance in real time -the performance of empowered workers to see that they are acting within the specified limits -daily and weekly operating statistics

Management’s most powerful tool for mobilizing employee commitment to competent strategy execution and operating excellence is

proper use of incentives and rewards

Management’s most powerful tool for winning employee commitment to good strategy execution and operating excellence is

a system of rewards and incentives tied tightly to the achievement of the targeted strategic and financial performance

The strategic role of a company’s reward system is to

enlist employee’s energetic commitment to competent strategy execution and operating excellence by rewarding them, both monetarily and non-monetarily, for their contributions

Enlisting employees’ sustained and energetic commitment to good strategy execution and achievement of the targeted strategic and financial objectives is best done by

resourceful and effective use of motivational incentives, both monetary and non-monetary

In trying to gain employees’ wholehearted commitment to good strategy execution and operating excellence,managers are well advised to use such incentives

-attractive perks and fringe benefits -frequent words of praise, special recognition at company gatherings, stimulating assignments, and opportunities to transfer to attractive locations – a more ( or less) job security – opportunities for rapid promotion ( or the risk of being sidelined)

What is not likely to be effective in trying to gain employees’ wholehearted commitment to good strategy execution and operating excellence?

– aggressive management efforts to eliminate stress, anxiety, and job insecurity from the work environment

A motivation and incentive system that is aimed at spurring stronger execution

should focus on incorporating more positive than negative motivational incentives

From the standpoint of promoting successful strategy execution, it is important that the firm’s motivation and reward system

accentuate positive rewards but also carry the risk of punishment for poor performance

A reward system that accentuates positive rewards for good performance

has considerable appeal because when cooperation is positively enlisted and rewarded, rather than strong-aimed by orders and threats ( implicit or explicit), people tend to respond with more enthusiasm, dedication, creativity, and intiative

Motivational incentive compensation practices that aim at winning the commitment of company personnel to good strategy execution typically

strike middle ground- entailing decidedly positive rewards for meeting or beating performance targets but also imposing sufficiently negative consequences when actual performance falls short of the target

The most dependable way to keep people focused on strategy execution and the achievement of performance targets is to

generously reward and recognize people who meet or beat performance targets and to deny rewards and recognition to those who don’t

A well-designed reward system

aligns the well-ebing of organization members with their contributions to competent strategy execution and the achievement of performance targets

An important consideration in designing a strategy-supportive reward system is to

make non-monetary rewards and recognition an integral part of the reward system

The guidelines for designing an incentive compensation system that will help drive successful strategy execution include

making the payoff for meeting or beating performance targets a major, not minor, piece of the total compensation package

Which of the following is not a sound guideline for designing a reward and incentive system that helps promote good strategy execution?

Ways must be found to reward deserving non-performers who, for some reason, do not fare well under the incentive system

What is not a characteristics of a compensation and reward system designed to help drive successful strategy execution?

A reward system that involves 50 percent non-monetary rewards and a work environment that avoids placing pressure on managers and employees to perform at high levels.

According to the cost allocation principles used in the company’s accounting systems, if a company spends $3 million on advertising in a given geographic region, sells 600,000 branded pairs online in the region , and sells 2.4 million branded pairs to footwear retailers in the region then…

advertising costs per pair sold online would be $1.00 and advertising costs per pair sold to retailers would be $1.00.

Based on information on the Help Screen for the Plant Operations Report (see the Plant Investment section), if a company adds new plant capacity at a cost of $50 million, then its annual depreciation costs will rise by

$2,500,000

In supplying private-label footwear to chain retailers, the sizes of a company’s margins over direct costs should be viewed as

how much private-label sales added to the company’s pretax profits, assuming that the company’s margins on branded footwear were sufficient to cover all administrative expenses and all interest costs.

Income Statement Data Year 12
(in 000s)
Net Revenues from Footwear Sales $ 300,000
Cost of Pairs Sold 190,000
Warehouse Expenses 15,000
Marketing Expenses 40,000
Administrative Expenses 8,000
Operating Profit (Loss) 47,000
Interest Income (expenses) (10,000)
Pre-tax Profit (Loss) 37,000
Income Taxes 11,100
Net Profit (Loss) $ 25,900

Admin expenses are 3.9% of net revenues.

The accounts payable entry on the company’s balance sheet represents

25% of the year’s materials costs incurred in making branded and private-label footwear that are owed to suppliers and that will be paid for in the first quarter of the upcoming year (payments for materials delivered by suppliers are not due and payable for 90 days following delivery).

If a company wants to enhance the profitability of differentiating its branded product offering from rivals by offering say 500 models, then it should seek to reduce the costs associated with producing 500 models at its plants by

instituting plant upgrade option B and perhaps consolidating the production of branded footwear in just one plant (to only incur the payment of production run setup costs one time

An exchange rate shift that causes the Sing$ to be stronger versus the US$ – signaled by a positive percentage number for the Exchange Rate Impact on Cost of Pairs shipped from an Asia-Pacific plant to North America (US$ per Sing$) in the Exchange Rate box on your Corporate Lobby screen

weakens the cost-competitiveness of footwear made in Asia-Pacific plants and exported to North American distribution centers for sale to footwear customers in North America.

As explained on the Help screen for the Cash Flow Statement, if a company generates revenues of $280 million in Year 11, revenues of $300 million in Year 12, and revenues of $300 million in Year 13, then its cash receipts from footwear sales will be

25% of Year 11 revenues and 75% of Year 12 revenues for a total cash inflow of $295 million in Year 12

If a company pays a production worker a base wage of $2,800 and a piecework incentive of $0.30 per pair, if a production worker’s annual productivity is 2,500 pairs per year, and if a plant’s reject rate averages 4%, then the average annual compensation of production workers would be

$3,520 (because workers do not receive a piecework incentive on pair rejected due to defects)

Based on information on both the Help screens for the Plant Operations Report and the Private-Label Sales Report, which of the following statements regarding how plant costs are allocated between branded and private-label footwear is true?

Annual plant supervision costs and plant depreciation costs are allocated between branded production and private-label production according to their respective percentages of total pairs produced—thus, if 95% of the total pairs produced at a plant are branded then 95% of annual plant supervision costs and plant depreciation costs are allocated to branded production.

Based on information on the Help screen for the Marketing and Admin Report (see the section on Administration Expenses), which of the following statements regarding your company’s administrative costs is false?

Administrative costs are allocated between branded production and private-label production according to their respective percentages of total pairs sold.thus, if 65% of the total pairs sold are branded then 65% of annual administrative costs are allocated to branded footwear.

As is explained on both the Help screens for the Branded Sales Report and the Private-Label Sales Report, when exchange rate shifts result in a stronger US$ and a weaker Singapore $, then the Sing$ collected on footwear sales in the Asia-Pacific, when converted into US$, result in

foreign exchange losses that have the effect of reducing company revenues and profits.

Which one of the following actions is most likely to result in higher production costs per branded pair at one of your company’s plants?

Increasing the number of branded models/styles produced from 150 to 500.

According to the cost allocation procedures discussed on the Help screens for the Private Label Sales Report and the Marketing and Admin Report, should a company win contracts to supply chain retailers with private-label shoes, which of the following are included as part of a company’s production costs for private-label footwear?

Production run set-up costs Expenditures for best practices training Plant supervision costs Plant depreciation

The top-level executive task of crafting a diversified company’s overall or corporate strategy includes what?

Evaluating the growth and profitability prospects for each business and then investing aggressively in the most promising businesses with the best prospects, investing cautiously in businesses with just average prospects, and divesting businesses with unacceptable prospects

When single-country markets are not large enough to allow a firm to achieve optimum scale, the effect is best described as:

a HIGH cost globalization driver

A worldwide trend towards relaxation of trade barriers would
best be considered:

a HIGH government globalization driver

Which of the following BEST describes the concept of a "Lead Country"?

a country with significant innovation and/or demanding customers in your industry

In global strategy analysis, experience curve effects are most appropriately included:

as a cost globalization driver

The following are all components of which one of Yip’s globalization drivers?
High Level of Exports and Imports in Country
Interdependence of Countries in Region
Transferable Competitive Advantage Possible
Competitors from different continents in Country

Competitive Globalization Drivers

In the article, "Two misplaced debates in Business Strategy", one of the debates concerns whether the world markets are global, multinational or semi-global. What is the nature of the second debate?

The dilemma of whether one should use a global standardization or local customization strategy.

Which one of Bartlett & Ghoshal’s strategies
Is most likely to be used with globally standardized luxury goods?

Home replication

According to the article, "The glocal strategy of global brands", there are three strategies available in global marketing. One is global strategy (uniform product, uniform message), one is local strategy (customized product, customized message), and the third is:

Glocal Strategy: Customized Product/Uniform Message Or Uniform Product/Customized Message

According to the "Two misplaced debates in business Strategy" article, what are the three types of markets found in the world?

Pure global, pure multinational, and semiglobal

According to the article, "The glocal strategy of global brands", what are the two dimensions that comprise the authors’ alternative framework for global marketing?

Product strategy and communication strategy

Procter & Gamble describes itself as having broad segment scope. What are the segment "tiers" that P&G targets?

super-premium, premium, middle and value products

Which element of the company is primarily responsible for
P&G’s Aggregation Strategy?

Global Business Services (GBS) — it implements P&G’s ERP system

In the article, "Is Everyone Nuts? P&G Now A Dog? And Unilever A Star?" ,
what reason is given for Unilever’s stock price outperforming P&G’s?

P&G’s stock price didn’t fall as much as Unilever’s during the crash, and therefore did not have to recover as much

In the article, "In Brand Management, if Apple’s the New P&G,
What the Hell is P&G?", what reason is cited as one of the main causes
of P&G’s problems?

increasing geographic and segment scope too fast

Suppose a country requires that at least 25% of the value of all automobiles sold within its borders must be added within that country. This requirement is:

This is a local content rule, a type of non-tariff barrier.

The tax breaks given to Boeing to entice the company to locate a new production facility in South Carolina:

Are a type of subsidy

Super Bowl commercials designed to increase sales of
Miller Lite beer in America is which intensive grand strategy?

Market penetration

Which of the following is an example of a "strong corporate brand"?

Intel

Sony’s launches of Playstation 2, then PS3, then PS4, are examples of which intensive grand strategy?

Product development

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