MGMT 449 CHAPTER 11 (Done)

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

A. 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.

B. accurate budgets are the key to exercising tight financial controls over what organization units can and cannot do in carrying out management's directives to execute the chosen strategy proficiently.

C. tight budget control is management's most powerful tool for first-rate strategy execution.

D. lean, carefully managed budgets protect the company's financial condition and eliminate the wasteful use of cash.

E. lean, strictly enforced budgets are management's best and most used means of getting organizational units to exercise the fiscal discipline needed to execute the chosen strategy in a cost-efficient manner.

A

2. Managers charged with implementing and executing strategy need to be deeply involved in the budgeting and resource allocation process because of all the following reasons EXCEPT:

A. too little funding deprives organizational units of the necessary resources to execute their piece of the strategic plan while too much funding wastes organizational resources and reduces financial performance.

B. resource allocation involves screening of requests for people, facilities and equipment, and approving them, whether they contribute to the strategy execution effort or not.

C. without major budget reallocations there is little chance that desired core competencies and organizational capabilities will emerge.

D. lean, carefully managed budgets protect the company's financial condition and eliminate the wasteful use of cash.

E. a change in strategy nearly always calls for budget reallocations and resource shifting.

B

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

A. primarily be based on the number of new strategic initiatives being implemented in each operating department.

B. be based on the number of people employed in each of the divisions.

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

D. be linked to the costs of performing value chain activities as determined by benchmarking against best-in-industry competitors.

E. depend on how much stretch there is in each department's objectives and what additional resources are needed to help reach these performance targets.

C

4. New strategies often entail budget reallocations because:

A. revamping the performance of value chain activities can be costly.

B. the accompanying policy revisions and compensation incentives tend to require different levels of funding than before.

C. business units important in the prior strategy but having a lesser 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.

D. empowering employees to carry out the new strategy elements and shifting to a total quality management type of culture to build skills in competent strategy execution typically require substantial new funding and budget revisions.

E. adopting best practices and pushing for continuous improvement tends to reduce costs and reduce overall resource requirements.

C

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

A. can be dysfunctional in trying to implement a new strategy because of the anxiety and insecurity that big changes in budgets cause among company personnel.

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

C. run the risk of inadvertently creating barriers to building the needed competencies and capabilities.

D. tend to impede the task of empowering employees and shifting to a new, more strategy-supportive culture.

E. are rarely necessary in implementing a new strategy unless the new strategy entails a radically different set of value chain activities.

B

6. A company's operating budget must:

A. be strategy-driven in order to amply fund the performance of key value chain activities.

B. be risk-averse, so as not to run the risk of inadvertently creating barriers to building the needed competencies and capabilities.

C. be employee-driven to gain commitment to strengthening the company's core competencies and competitive capabilities.

D. trim costs of key value chain activities to achieve cost efficiency in new strategic initiatives.

E. follow traditional and time-tested methods of budgeting to support rapid adjustments in strategy.

A

7. Merely fine-tuning the execution of a company's existing strategy normally requires :

A. big shifts of resources from one area to another.

B. a larger allocation of resources to the effort.

C. trimming costs and shifting resources to activities that have a higher priority.

D. creativity in finding ways for cost reductions, i.e. ways to do less with less .

E. cost-cutting in key value chain activities.

C

8. Apple decides to reallocate resources by curtailing online ad budgets and investing heavily in scratch-resistant Sapphire, the material that differentiates iPhone from competitive brands. What is MOST LIKELY the reason for reallocation of resources?

A. Making critical value chain activities less effective

B. Supporting the new strategic initiative of the brand

C. Signalling commitment to online sales of the brand

D. Signalling commitment to offline sales of the brand

E. Impeding the efforts of rivals to hoard Sapphire

B

9. Kimberly-Clark, the manufacturer of Kleenex tissues and Huggies diapers, streamlines its healthcare business by listing Halyard Health as a separately traded company. The company's move is likely to:

A. promote healthcare wings of rival companies.

B. increase the cost of manufacturing medical devices.

C. curtail the cost of manufacturing medical devices.

D. enhance the strategy execution capabilities of the company.

E. increase the demand for personal protective equipment.

D

10. Cavco Construction divests funds from its commercial property ventures to invest in gated community properties close to New York, signaling a change of strategy. Which of the following statements about Cavco is most likely true?

A. Cavco is impeding the efforts to proficiently execute the strategy.

B. Cavco is merely fine-tuning its existing strategy to test efficiency.

C. Cavco is marshalling resources to support new strategic initiative.

D. Cavco is hampering work climate conducive for good strategy execution.

E. Cavco is focusing on activities that are a low priority in the strategy execution effort.

C

11. Well-conceived policies and operating procedures facilitate strategy execution in all of the following ways EXCEPT they:

A. provide top-down guidance regarding how things are to be done.

B. help ensure consistency in how execution-critical activities are performed.

C. promote the creation of a work climate that facilitates good strategy execution.

D. facilitate cost cutting (finding ways to do less with less) while undertaking new strategic initiatives.

E. channel individual and group efforts along a strategy-supportive path.

D

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

A. helping ensure that worker eligibility for incentive bonuses is measured consistently and awarded fairly.

B. fostering the use of best practices, TQM, Six Sigma, and continuous improvement efforts.

C. acting as a powerful lever for changing employee attitudes about the need for a different incentive and reward system.

D. helping build employee commitment to strengthening the company's core competencies and competitive capabilities.

E. placing limits on ineffective independent action and channelling efforts of individuals along a path more conducive to good strategy execution and operating excellence.

E

13. Providing top-down guidance can aid the task of implementing strategy:

A. provided they promote greater use of and commitment to best practices and total quality management.

B. because really effective internal policies and procedures are not easily duplicated by other firms.

C. because astutely conceived policies or procedures can result in competitive advantage.

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

E. by making it easier to impose tight budget controls and avoid wasting scarce resources.

D

14. A useful guideline in designing strategy-facilitating policies and operating procedures is:

A. to prescribe enough policies to give organizational members clear direction in implementing strategy and to place reasonable boundaries on their actions. This then empowers them to act within these boundaries in pursuit of company goals.

B. that strictly enforced policies work better than loosely enforced policies.

C. that more policies/procedures work better than fewer policies/procedures, and that strict enforcement always beats lax enforcement.

D. to let individuals act in an empowered and self-directed way, subject only to the constraint that their actions and behavior be ethical and in step with the corporate culture.

E. to prescribe enough policies and procedures that little is left to chance in performing value chain activities, and employees should have no leeway to do things in a manner that deviates from the company's best-practices standard.

A

15. Which of the following is NOT a benefit of prescribing policies and operating procedures to aid management's task of implementing strategy?

A. Placing limits on independent action and helping overcome resistance to change

B. Providing top-down guidance to operating managers, supervisory personnel, and employees regarding how things need to be done and what behavior is expected

C. Promoting the creation of a work climate that facilitates good strategy execution

D. Helping build employee commitment to adopting best practices and using the tools of TQM and Six Sigma

E. Helping enforce consistency of effort in how particular activities are performed in geographically scattered organization units

D

16. In prescribing policies and procedures that facilitate independent action on the part of empowered employees for good strategy execution companies need to do ALL of the following EXCEPT:

A. give organization members clear direction and place reasonable boundaries on their actions.

B. empower employees to act within the company's set boundaries in pursuit of company goals.

C. allow company personnel to act with some defined degree of freedom, especially when individual creativity and initiative are more essential to good strategy execution than standardization and strict conformity.

D. institute policies that give employees substantial leeway to carry out activities the way they think best.

E. produce policy manuals on strategy execution that prescribe exactly how daily operations are to be conducted.

E

17. Which of the following exemplifies good strategy execution?

A. The policy document of Dominos ensures consistency in service behavior patterns across outlets.

B. The policy document of Pizza Today allows for differences in product range and quality across outlets.

C. The policy document of Boston Pizza leaves ample scope for each member of the staff to act independently.

D. The policy document of Little Caesars discusses strategy but not the routines for running the outlets.

E. The policy document of Pizza Inn is averse to standardization of the way activities are performed.

A

18. Which of the following does NOT facilitate strategy execution?

A. Hyundai service centers follow same routines when receiving vehicles for servicing.

B. Ford encourages staff to skip practices out of sync with the company's mission.

C. General Motors showrooms have similar operating practices across regions.

D. Chevrolet Service center replicates the caliber of customer service across locations.

E. Renault is averse to standardization of the way activities are performed at its service centers.

E

19. Company managers can significantly advance the cause of superior strategy execution by doing all of the following EXCEPT:

A. employing best practices methods and using process management tools to drive continuous improvement in how internal operations are conducted.

B. adopting benchmarking of the company's operating activities and business processes against "best-in-industry" and "best in world" performers.

C. adopting "best-in-company" operating activities and processes when a company's various organizational units are performing the same functions differently.

D. instituting operating practices that generate economies of scale and scope with current value chain activities.

E. develop performance yardsticks for judging effectiveness and efficiency for particular value chain activities and business processes deemed strategically critical.

D

20. A "best practice" refers to:

A. a policy or procedure that is unusually effective.

B. a method of performing an activity or business process that consistently delivers superior results compared to other approaches and that at least one company has demonstrated works particularly well in terms of delivering operating excellence.

C. a strategy-critical activity that results in sustainable competitive advantage.

D. a value chain activity that is a company's distinctive competence.

E. a particular value chain activity that management has given top priority to performing in world-class fashion.

B

21. A "best practice" refers to:

A. a method of 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.

B. the best-known procedure for performing a specific task or activity so as to achieve the lowest possible costs.

C. performing activities in a manner that conforms to established industry standards.

D. a company's core competence.

E. performing a particular value chain activity in "world-class" fashion (one unmatched by any other company in the world).

A

22. The idea behind benchmarking and best practices is to:

A. identify which companies are the best performers of a strategically relevant activity and then copy their methods exactly.

B. search the world for a company that performs a strategically relevant task or value chain activity at the lowest possible cost and then use business process reengineering techniques to try to meet or beat the costs of the world's low-cost performer of that activity.

C. perform each activity in the industry value chain according to standard industry practice and then regularly benchmark the company's performance to see if it is actually achieving the industry standard.

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

E. determine whether a company has a "world-class" value chain.

D

23. The backbone of the process of identifying, studying, and implementing best practices is:

A. business process reengineering

B. a corporate culture that has a core value of operating excellence

C. benchmarking

D. Six Sigma quality control techniques

E. the innovative application of TQM techniques

C

24. Which of the following is NOT a method that company managers can use to promote operating excellence in performing value chain activities?

A. Utilize benchmarking.

B. Adapt best practices.

C. Install TQM and/or Six Sigma quality control techniques.

D. Undertake business process reengineering.

E. Adopt standard industry techniques.

E

25. Which of the following is NOT a tool or method that managers can use to promote operating excellence and further the cause of good strategy execution?

A. Benchmarking

B. Business process reengineering

C. Strategic resource training

D. TQM and Six Sigma quality control techniques

E. Best practices

C

26. 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:

A. it is necessary to give these functional departments the freedom to collaborate closely with each other to achieve the desired degree of coordination.

B. it is necessary to outsource those activities that are fragmented to strategic partners in order to achieve the needed coordination.

C. there is merit in using business process reengineering to radically redesign and streamline strategy-critical processes and workflow from different departments and unifying their performance into a single department or cross-functional work group that has charge over the whole process.

D. TQM is a potent way to reengineer the work effort, avoid the shortcomings of a functional organization structure, and achieve rapid-response capability.

E. it makes good organizational sense to combine those functional departments where fragmentation is a problem into a single department.

C

27. Business process reengineering is a tool for:

A. expediting the redesign of existing products and shortening the design-to-market cycle.

B. radically redesigning and streamlining how an activity (workflow) is performed, by pulling the pieces of strategy-critical activities out of different departments and unifying their performance in a single department or cross-functional work group.

C. instituting total quality management.

D. making the most effective use of Six Sigma techniques.

E. the rapid redesign of an organization's structure so as to quickly create organizational competencies and capabilities.

B

28. Reengineering how a firm performs a business process:

A. is a tool for 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 is in charge of the whole process.

B. is the most frequently used tool of total quality management (TQM).

C. requires that a company have many strategic partnerships and alliances with outsiders.

D. is typically cheaper and easier than using Six Sigma techniques to achieve the same cost savings.

E. is usually a company's most important "best practice" for achieving operating excellence.

A

29. Total quality management (TQM):

A. entails creating a total quality culture that strives for continuously improving the performance of every value chain activity and is driven by a philosophy of managing a set of business practices: 100 percent accuracy in performing tasks (zero defects), involvement and empowerment of employees at all levels, team-based work design, benchmarking, and total customer satisfaction.

B. is a valuable tool for helping company managers identify what the best practice is for performing a particular activity at a high level of quality.

C. works best when used in conjunction with Six Sigma quality control techniques.

D. is an excellent tool for reengineering business processes and making quantum gains in the efficiency and effectiveness with which the processes are performed.

E. is a philosophy of doing things that aims at mistake-free management of a company's entire business.

A

30. Total quality management (TQM) emphasizes all of the following EXCEPT which?

A. 100 percent accuracy in performing tasks

B. Continuous improvement in all phases of operations

C. Adoption of industry standard operating practices

D. Benchmarking and total customer satisfaction

E. Empowerment of employees and team-based work design

C

31. Total quality management (TQM) programs:

A. deal exclusively with procedures to achieve defect-free manufacturing and assembly.

B. nearly always contribute more to the achievement of operating excellence than either business process reengineering or Six Sigma quality control techniques.

C. entail creating a corporate culture bent on continuously improving the performance of every task and every value chain activity.

D. are considerably more effective in improving manufacturing and assembly activities than they are in improving such value chain activities as R&D, human resources management, supply chain management, information technology, sales, and marketing and finance.

E. are generally considered the best tool for reengineering strategy-critical business processes.

C

32. Which of the following statements about total quality management (TQM) is FALSE?

A. TQM aims at instilling enthusiasm and commitment to doing things right from the top to the bottom of the organization.

B. TQM produces significant results very quickly, with very little benefit emerging after the first six months.

C. TQM doctrine preaches that there's no such thing as "good enough" and that everyone has a responsibility to participate in continuous improvement.

D. Effective use of TQM entails creating a corporate culture bent on continuously improving the performance of every task and every value chain activity.

E. Total quality management (TQM) is a philosophy of managing a set of business practices that emphasizes continuous improvement in all phases of operations, 100 percent accuracy in performing tasks, involvement and empowerment of employees at all levels, team-based work design, benchmarking, and total customer satisfaction.

B

33. Six Sigma programs:

A. utilize advanced statistical methods to improve quality by reducing defects and variability in the performance of business processes.

B. consist of a disciplined, statistics-based system aimed at producing not more than 2.5 defects per million iterations for a manufacturing or assembly process.

C. are based on three principles: (1) all work is a statistically controllable process; (2) no well-controlled process allows variability; and (3) defect-free work requires tight statistical controls.

D. suggest that all activities can be controlled, employee empowerment is the best control tool, and 100 percent control is possible.

E. radically redesign and streamline how an activity is performed.

A

34. Six Sigma quality control:

A. is a strategy implementer's best, most reliable tool for simultaneously achieving top-notch product quality and low manufacturing costs.

B. consists of a disciplined, statistics-based system aimed at producing not more than 2.5 defects per million iterations for a manufacturing or assembly process.

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

D. consists of a disciplined, statistics-based system aimed at fewer than 5.0 complaints per million customer transactions.

E. is a powerful tool for companies whose customers are very picky about product quality and product performance and who can't afford for the product they use to break down and require repairs.

C

35. Six Sigma processes:

A. are based on three principles: (1) all work is a statistically controllable process; (2) no well-controlled process allows variability; and (3) defect-free work requires tight statistical controls.

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

C. can be used for improving products or business processes but not for developing new products or new processes.

D. consists of a disciplined, statistics-based system aimed at producing not more than 10 defects per million iterations for a manufacturing or assembly process.

E. can be used for developing new products or new business processes but not for improving existing products or business processes.

B

36. The Six Sigma process of define, measure, analyze, improve, and control (DMAIC) is:

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

B. an improvement system used to develop new processes or products at 100 percent defect-free levels.

C. a system of statistical procedures for achieving 100 percent control over how a task is performed.

D. an improvement system used to develop new processes or products at Six Sigma levels.

E. a system of statistical procedures for eliminating 100 percent of the variability in how a task is performed.

A

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

A. improving performance when there are small variations in how well an activity is performed. If there are wide variations, then the Six Sigma DMVSI process has to be used.

B. achieving 100 percent control over how a task is performed and eliminating 100 percent of the variability in how a task is performed.

C. improving performance when there are wide variations in how well an activity is performed.

D. developing new processes or products at Six Sigma quality levels.

E. improving customer satisfaction, whereas Six Sigma improves manufacturing processes.

D

38. The statistical thinking underlying Six Sigma is based on which of the following three principles?

A. All activities can be controlled, employee empowerment is the best control tool, and 100 percent control is possible.

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

C. All work activities can be done accurately most of the time, empowered employees are necessary for effective control, and good statistical data is an empowered employee's best control tool.

D. All work is a statistically controllable process, 100percent control is possible, and every well-controlled process is defect-free.

E. Most business processes are subject to control, Six Sigma can totally remove variability in how processes are performed, and most defects can be eliminated.

B

39. Which of the following statements about Six Sigma quality programs is true?

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

B. Six Sigma is a philosophy of managing a set of business practices that emphasizes continuous improvement in all phases of operations and 100 percent accuracy in performing tasks.

C. Six Sigma's DMAIC process is a particularly good vehicle for improving performance when there are only small variations in how well an activity is performed.

D. The focus of Six Sigma programs is on the development of new products or new business processes but not on improving existing products or business processes.

E. Six Sigma is a system of statistical procedures for eliminating 92 percent of the variability in how a task is performed.

A

40. A company that successfully and methodically applies Six Sigma methods to its value chain, activity by activity, can:

A. clearly consider what it will take to overtake rivals with the industry's overall best strategy.

B. make major strides in improving the proficiency with which its strategy is executed without sacrificing innovation.

C. increase its bargaining power with suppliers and create better seller-supplier collaborations.

D. assess the extent to which rivals have competitively valuable competencies or capabilities.

E. construct a business model that entails a value proposition based on quality.

B

41. An ambidextrous organization is one that:

A. pursues incremental improvements in operating efficiency, while R&D and other processes that allow the company to develop new ways of offering value to customers are given freer rein.

B. is capable of using efficiency and effectiveness with equal skill.

C. is very skillful and versatile with operating activity.

D. is managed by employing continuous improvement in operating practices while managing employees as a loosely integrated network of efficiency.

E. employs identical improvement methods for both operating processes and R&D.

A

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

A. reengineering is a tool for installing process organization, whereas TQM/Six Sigma concern defect-free production methods and delivering world-class customer service.

B. reengineering helps create core competencies, whereas TQM/Six Sigma are tools for making a core competence stronger and more efficient.

C. reengineering is a tool for achieving one-time quantum improvement, whereas TQM and Six Sigma programs aim at ongoing incremental improvements.

D. business process reengineering requires benchmarking, whereas TQM and Six Sigma do not.

E. reengineering represents an effort to totally revamp a firm's value chain, whereas TQM looks at incrementally improving the performance of two or three targeted value chain activities and Six Sigma is primarily for reducing manufacturing defects.

C

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

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

B. have annual contests to see which part of the company is making the greatest strides in approaching operating excellence.

C. strive for 100 percent control over the variability in how each and every value chain activity is performed.

D. have at least 50 percent of company personnel earn "green belts" in Six Sigma techniques.

E. build core competencies in TQM, Six Sigma, benchmarking, best practices adoption, and business process reengineering.

A

44. Without a strategic framework, managers lack the context in which to:

A. fix things that really matter to business-unit performance and competitive success.

B. carry out company-wide goals related to the dynamics of a single business model.

C. employ the company's resources in the pursuit of sustainable competitive advantage.

D. communicate aspirations for the company.

E. analyze the emerging market opportunities more precisely.

A

45. 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:

A. signaling unequivocal and unyielding commitment to total quality, continuous improvement, 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.

B. requiring all company personnel to attend Six Sigma training programs and achieve "black belt" status.

C. instituting greater centralization of decision making to help enforce strict compliance with quality control policies and procedures.

D. stressing 100 percent accurate individual performance rather than group or team performance.

E. dismissing employees who repeatedly fail to achieve 100percent accuracy in their work after a 12-month trial period.

A

46. Although it is relatively easy for rivals to implement process management tools, it is much more difficult and time-consuming for them to:

A. instill a deeply ingrained culture of operating excellence.

B. keep employees well-informed about the strides being made with continuous improvement.

C. unify the managerial efforts behind improving operating practices as a commendable goal.

D. combine the pursuit of financial objectives with the pursuit of its strategic objectives.

E. understand the barriers to installing new operating activities.

A

47. Which of the following exemplifies one of the most widely used methods of gauging how well a company is executing its strategy?

A. Merrill & Company has a disconnected organizational arrangement whereby pieces of an activity are performed in different functional departments.

B. Oceania identifies agents of change who are convinced about sticking to the old ways of doing things.

C. Honwell narrates success stories of rival brands to convince its personnel about traditional wisdom.

D. Fizz-Cola judges the efficiency of internal operations by benchmarking them against best-in-industry performers.

E. Motorola develops the data to measure how poorly rival brands perform against the best-practice standards across industry.

D

48. Which of the following does NOT exemplify business process reengineering?

A. Blue Mountain creates teams of mixed-occupation freelancers to design Christmas cards.

B. Speedmore integrates three distribution units to form a consolidated zonal distribution center.

C. Bank of America automates global transaction services in a quest for operational efficiencies.

D. PayPal segregates payment notification operations from mobile transfer operations to expand its customer base.

E. Florida Power eliminates work depots, entrusting the task of repair to crew members in a mobile van.

D

49. Which of the following takes the route of business process reengineering to attain operational excellence?

A. AT&T works toward creating a total quality culture by continuously reviewing the performance of every value chain activity.

B. Acer Phones uses advanced statistical methods to remove the causes of defects at its manufacturing units.

C. Ericsson introduces continuous-improvement business philosophy at its customer care centers.

D. Cellkon pulls the pieces of an activity out of different departments to create a cross-functional work group.

E. Honeywell strives to incrementally reduce defects through an ongoing assessment process.

D

50. Which of the following makes use of Six Sigma programs to improve quality and strategy execution?

A. Memphis & Company applies advanced statistical methods to identify and remove the causes of defects.

B. Milwaukee Hospital relocates its pathological lab to reach out to consumers in suburbs.

C. LG Electronics reengineers its value chain activities by creating cross-functional teams.

D. La Tagliata Boutiques offers a different range of products at different outlets across London.

E. Duke Energy replaces work depots by mobile repair vans reducing operational costs by 40 percent.

A

51. Installing well-conceived, state-of-the-art support systems is an important managerial component of implementing and executing strategy because:

A. such systems are essential to being able to engage in effective benchmarking and continuous improvement.

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

C. they help managers run a tight ship and preserve strong, centralized control over internal activities.

D. they are the basis for revamping value chains, boosting labor productivity, and reducing operating costs.

E. decentralized decision making and employee empowerment cannot work well without having well-conceived information and operating systems to accurately benchmark internally performed value chain activities against best-in-industry and best-in-class performers.

B

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

A. are essential because business process reengineering efforts, TQM, Six Sigma, and benchmarking programs can't be carried out effectively without them.

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

C. make it simple and easy to spot cost overruns and inefficiencies.

D. are valuable tools for shortening a company's value chain, boosting workforce morale and productivity, and simplifying the task of adopting best practices.

E. help managers run a tight ship and preserve strong, centralized control over internal activities

B

53. The broad areas that internal information business systems need to cover include all of the following EXCEPT:

A. financial performance data.

B. supplier/strategic partner data.

C. customer data.

D. operations data.

E. competitor data.

E

54. The broad areas that internal information business systems need to cover include all of the following EXCEPT:

A. financial performance data.

B. corporate culture data.

C. customer data.

D. operations data.

E. employee data.

B

55. Information systems provide managers with a means for monitoring all of the following EXCEPT:

A. the results that flow from the actions of subordinates.

B. the performance of empowered workers.

C. weekly operating statistics.

D. employees with over-the-shoulder supervision.

E. daily operating statistics.

D

56. Which of the following is NOT integral to superior strategy execution and operating excellence?

A. Having real-time information systems that permit company managers to stay on top of implementation initiatives and daily operations and to intervene if things seem to be drifting off course

B. Having state-of-the-art operating systems, information systems, and real-time data

C. Having access to online systems that provide statistical information about operating activities

D. Having the systems capability to identify and diagnose problems, so as to take corrective actions

E. Having access to employee data of competitors

E

57. Which of the following is NOT a recommended way for managers to monitor the operating performance of employees to ensure superior strategy execution?

A. Scrutinizing daily and weekly operating statistics without resorting to constant over-the-shoulder supervision

B. Utilizing self-managed work groups in peer-based control environments

C. Removing some layer of management hierarchy and relying on strong peer pressure to keep team members operating between the white lines

D. Leaving employees to their own devices in meeting performance standards

E. Using information systems capability to monitor team performance in real time

D

58. A company wants to plan a state-of-the-art information and operating system to enable better strategy execution. Which of the following is the most likely reason for the company's move?

A. It wants to embrace modern technology.

B. It wants to gain a competitive edge over rivals.

C. It wants to spot cost overruns and inefficiencies.

D. It wants to increase workforce productivity and retention.

E. It wants to boost management morale.

B

59. Management's most powerful tool for mobilizing organizational commitment to competent strategy execution and operating excellence is the:

A. diligent and persistent use of benchmarking and best practices.

B. proper use of a reward structure with motivational incentives.

C. implementation of TQM and/or Six Sigma programs.

D. periodic giving of inspirational speeches aimed at arousing employees' emotional energy.

E. process of providing employees with a high degree of job security (ideally, via a no-layoff policy).

B

60. Management's most powerful tool for winning employee commitment to good strategy execution is:

A. the establishment of strategy-supportive policies and procedures.

B. empowering employees and encouraging them to adopt best practices.

C. setting stretch objectives.

D. a structure of rewards and incentives tied tightly to the achievement of the organization's strategic priorities.

E. aggressive use of TQM and Six Sigma quality control programs.

D

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

A. compensate employees for performing their assigned duties in a diligent fashion.

B. boost employee morale in ways that create widespread job satisfaction.

C. enlist employees' commitment to successful strategy execution by rewarding them, both monetarily and non-monetarily, for their valuable contributions.

D. relieve managers of the burden of closely monitoring each employee's performance.

E. boost labor productivity and help lower the firm's overall labor costs.

C

62. Reward and incentive systems serve as a(n):

A. direct stimulus for satisfying the basic expectations of the standard job and mechanisms.

B. indirect motivational tool designed to convert employee commitment into high-powered incentives.

C. indirect type of control mechanism that conserves on more costly control mechanisms of supervisory oversight.

D. direct base-pay financial compensation mechanism that competes with rival companies' salary bands for similar work efforts.

E. negative motivational element.

C

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

A. having top executives commit to making employees the company's most valuable competitive asset.

B. developing core competencies in the use of TQM, Six Sigma programs, and business process reengineering.

C. resourceful and effective use of motivational incentives, both monetary and nonmonetary.

D. clever and innovative use of benchmarking and best practices.

E. providing employees with a high degree of job security and attractive perks.

C

64. In trying to gain employees' wholehearted commitment to good strategy execution and operating excellence, managers are well advised to use all of the following incentives EXCEPT:

A. providing attractive perks and fringe benefits.

B. giving awards and public recognition to high performers and showcasing company successes.

C. creating a work atmosphere in which there is genuine caring and mutual respect among workers and between management and employees.

D. relying on opportunities for promoting from within wherever possible.

E. .withholding information from employees about financial performance, strategy, and competitors' actions.

E

65. Which of the following is NOT likely to be effective in trying to gain employees' wholehearted commitment to good strategy execution?

A. Strictly enforcing all rules in the employee handbook with the use of fines.

B. Giving awards and public recognition to high performers and showcasing company successes.

C. Providing a comfortable and attractive working environment

D. Providing opportunities for promotion from within wherever possible

E. Providing attractive perks and fringe benefits

A

66. A motivation and incentive system that is aimed at spurring stronger employee commitment to good strategy execution:

A. should focus on incorporating more positive than negative motivational elements.

B. should be tied first and foremost to whether employees satisfactorily perform their assigned duties in an ethical and honorable manner.

C. must involve deliberately assigning employees heavy workloads and tight deadlines.

D. D. needs to put top priority on making employees happy and secure in their jobs.

E. must avoid the potential for negative consequences if performance is subpar.

A

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

A. be completely free of such elements as tension, pressure, anxiety, job insecurity, and tight deadlines—a no-pressure/no-adverse-consequences work environment is essential.

B. emphasize only positive types of rewards.

C. accentuate positive rewards but also carry out the "up-or-out" policy for performance that does not meet expectations.

D. not deny rewards to employees who put forth good effort and try hard, though performance is subpar.

E. reduce job insecurity and give employees an incentive to stay busy and work hard.

C

68. A reward system that accentuates positive rewards for good performance:

A. works best in strong culture organizations, while negative motivational approaches and reward systems tend to be most successful in weak culture organizations.

B. is especially effective in aligning the well-being of organizational members with achieving the company's performance targets; reward systems with negative elements tend to be very dysfunctional in motivating employees.

C. seldom works very well because the threat of denying rewards to sub-par performers is typically the most powerful motivator.

D. works fine so long as 100 percent emphasis is placed on monetary incentives.

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

E

69. A no-pressure/no-adverse-consequences work environment does not necessarily lead to:

A. superior strategy execution or operating excellence.

B. satisfactory outcomes because there is always a cadre of ambitious people who relish the challenge.

C. workforce morale issues.

D. establishing more positive than negative motivational reward elements.

E. excessive shortfall in performance.

A

70. To create a strategy-supportive system of rewards and incentives, a company must:

A. reward people for accomplishing results, not just for dutifully performing assigned tasks.

B. focus jobholders' attention and energy on what to do as opposed to what to achieve.

C. demand jobholders' 100 percent attendance since it guarantees results.

D. hold jobholders' responsible for their function and not burden them with being accountable.

E. incorporate negative motivational elements to assure results.

A

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

A. use only positive rewards and never involve the use of tension, fear, job insecurity, stress, or anxiety.

B. entail decidedly positive rewards for meeting or beating performance targets, but also impose sufficiently negative consequences when actual performance falls short of the target.

C. aim at creating a no-pressure/no-adverse-consequences work environment.

D. entail paying the highest wages and salaries in the industry for all jobholder positions and also stressing nonmonetary rewards, like cash bonuses for high-performing employees.

E. put top priority on making employees happy and secure in their jobs.

B

72. The first principle in designing an effective compensation system and the most dependable way to keep people focused on strategy execution and the achievement of performance targets is to:

A. establish ethical compensation policies and convince employees that they are the firm's most valuable competitive asset.

B. design monetary and nonmonetary incentives that boost labor productivity and help lower the firm's overall labor costs.

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

D. pay employees a bonus for each strategic and financial objective that the company achieves.

E. allow employees to propose what rewards they would like to receive to achieve the company's stretch objectives.

C

73. A well-designed reward system:

A. ties rewards to performance outcomes directly linked to good strategy execution and the achievement of financial and strategic objectives.

B. should be free of elements that induce stress, anxiety, tension, pressure to perform, and job insecurity.

C. puts the primary emphasis on denying rewards to those who fail to perform tasks in the prescribed fashion.

D. emphasizes weeding out employees who are average performers.

E. strives for a 50-50 balance between positive and negative rewards and a 50-50 balance between monetary and nonmonetary rewards.

A

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

A. link the payment of all monetary rewards to the company's bottom-line profitability.

B. employ incentives that will help motivate employees to put in long hours and sacrifice personal ambitions and aspirations to pursue the priorities of management.

C. choose those types of rewards and incentives that will focus employees' attention on total customer satisfaction.

D. make across-the-board wage and salary increases the cornerstone of monetary rewards.

E. make nonmonetary rewards and recognition an integral part of the reward system.

E

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

A. making the performance payoff a major, not minor, piece of the total compensation package.

B. having incentives that apply to the management team (employees should generally not be included in incentive pay plans but should have attractive wages and salaries).

C. having an outside wage and salary expert administer the system so there is no doubt as to its fairness and impartiality.

D. basing the incentives on group performance rather than individual performance.

E. making minimal use of nonmonetary incentives and rewarding people for diligently performing their assigned duties.

A

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

A. The reward system must be administered with scrupulous objectivity and fairness.

B. The payoff for meeting or beating performance targets must be a major, not minor, piece of the total compensation package.

C. The incentive plan should extend to all managers and all employees, not just top management.

D. The reward system must reward nonperformers who, despite expending tremendous effort, have not fared well in achieving the benchmarks under the incentive system.

E. Make sure that the performance targets each individual or team is expected to achieve involve outcomes that the individual or team can personally affect.

D

77. Which of the following is NOT characteristic of a compensation and reward system designed to help drive successful strategy execution?

A. Tying incentives to performance outcomes directly linked to good strategy execution and financial performance

B. Keeping the time between achieving the target performance outcome and the payment of the reward as short as possible

C. Making sure that the performance targets that each individual or team is expected to achieve involve outcomes that the individual or team can personally affect

D. Providing generous rewards for people who turn in outstanding performances

E. Offering rewards that amount to 3 percent of an employee's total compensation

E

78. The resolute standard for judging whether individuals, teams, and organizational units have done a good job must be measured by:

A. comparing industry performance standards against the company's own internal criteria.

B. the level of rapid growth in industry (buyer) demand.

C. whether they meet or beat performance targets that reflect good strategy execution.

D. the number of rivals existing in the marketplace and their growth results.

E. the relative competitive strengths of the industry leaders and how vulnerable they are to mimicry.

C

79. The managing director of a paper products company, wanted to introduce nonmonetary incentives to enhance employee motivation and spur strategy execution. When presented with some ideas, he chose all of the following EXCEPT:

A. rewarding employees even for subpar performance.

B. giving awards and public recognition to high performers and showcasing company successes.

C. providing a comfortable and attractive working environment.

D. providing opportunities for promotion from within wherever possible.

E. providing attractive perks and fringe benefits.

A

80. The top management at a new social media technology company would like to revamp its incentive compensation system to attract ambitious employees. What would be their best approach?

A. Make the performance bonus at least 3 to 4 percent of base salary to have some impact.

B. Make the performance bonus at least 10 to 12 percent of base salary to have some impact.

C. Make the performance payoff equal for average and below-average performers.

D. Set unrealistic performance standards, but with an equally high compensation.

E. Reward people who work very hard, even if they fall short of achieving performance targets.

B

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MGMT 449 CHAPTER 11 (Done)

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

A. 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.

B. accurate budgets are the key to exercising tight financial controls over what organization units can and cannot do in carrying out management’s directives to execute the chosen strategy proficiently.

C. tight budget control is management’s most powerful tool for first-rate strategy execution.

D. lean, carefully managed budgets protect the company’s financial condition and eliminate the wasteful use of cash.

E. lean, strictly enforced budgets are management’s best and most used means of getting organizational units to exercise the fiscal discipline needed to execute the chosen strategy in a cost-efficient manner.

A

2. Managers charged with implementing and executing strategy need to be deeply involved in the budgeting and resource allocation process because of all the following reasons EXCEPT:

A. too little funding deprives organizational units of the necessary resources to execute their piece of the strategic plan while too much funding wastes organizational resources and reduces financial performance.

B. resource allocation involves screening of requests for people, facilities and equipment, and approving them, whether they contribute to the strategy execution effort or not.

C. without major budget reallocations there is little chance that desired core competencies and organizational capabilities will emerge.

D. lean, carefully managed budgets protect the company’s financial condition and eliminate the wasteful use of cash.

E. a change in strategy nearly always calls for budget reallocations and resource shifting.

B

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

A. primarily be based on the number of new strategic initiatives being implemented in each operating department.

B. be based on the number of people employed in each of the divisions.

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

D. be linked to the costs of performing value chain activities as determined by benchmarking against best-in-industry competitors.

E. depend on how much stretch there is in each department’s objectives and what additional resources are needed to help reach these performance targets.

C

4. New strategies often entail budget reallocations because:

A. revamping the performance of value chain activities can be costly.

B. the accompanying policy revisions and compensation incentives tend to require different levels of funding than before.

C. business units important in the prior strategy but having a lesser 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.

D. empowering employees to carry out the new strategy elements and shifting to a total quality management type of culture to build skills in competent strategy execution typically require substantial new funding and budget revisions.

E. adopting best practices and pushing for continuous improvement tends to reduce costs and reduce overall resource requirements.

C

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

A. can be dysfunctional in trying to implement a new strategy because of the anxiety and insecurity that big changes in budgets cause among company personnel.

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

C. run the risk of inadvertently creating barriers to building the needed competencies and capabilities.

D. tend to impede the task of empowering employees and shifting to a new, more strategy-supportive culture.

E. are rarely necessary in implementing a new strategy unless the new strategy entails a radically different set of value chain activities.

B

6. A company’s operating budget must:

A. be strategy-driven in order to amply fund the performance of key value chain activities.

B. be risk-averse, so as not to run the risk of inadvertently creating barriers to building the needed competencies and capabilities.

C. be employee-driven to gain commitment to strengthening the company’s core competencies and competitive capabilities.

D. trim costs of key value chain activities to achieve cost efficiency in new strategic initiatives.

E. follow traditional and time-tested methods of budgeting to support rapid adjustments in strategy.

A

7. Merely fine-tuning the execution of a company’s existing strategy normally requires :

A. big shifts of resources from one area to another.

B. a larger allocation of resources to the effort.

C. trimming costs and shifting resources to activities that have a higher priority.

D. creativity in finding ways for cost reductions, i.e. ways to do less with less .

E. cost-cutting in key value chain activities.

C

8. Apple decides to reallocate resources by curtailing online ad budgets and investing heavily in scratch-resistant Sapphire, the material that differentiates iPhone from competitive brands. What is MOST LIKELY the reason for reallocation of resources?

A. Making critical value chain activities less effective

B. Supporting the new strategic initiative of the brand

C. Signalling commitment to online sales of the brand

D. Signalling commitment to offline sales of the brand

E. Impeding the efforts of rivals to hoard Sapphire

B

9. Kimberly-Clark, the manufacturer of Kleenex tissues and Huggies diapers, streamlines its healthcare business by listing Halyard Health as a separately traded company. The company’s move is likely to:

A. promote healthcare wings of rival companies.

B. increase the cost of manufacturing medical devices.

C. curtail the cost of manufacturing medical devices.

D. enhance the strategy execution capabilities of the company.

E. increase the demand for personal protective equipment.

D

10. Cavco Construction divests funds from its commercial property ventures to invest in gated community properties close to New York, signaling a change of strategy. Which of the following statements about Cavco is most likely true?

A. Cavco is impeding the efforts to proficiently execute the strategy.

B. Cavco is merely fine-tuning its existing strategy to test efficiency.

C. Cavco is marshalling resources to support new strategic initiative.

D. Cavco is hampering work climate conducive for good strategy execution.

E. Cavco is focusing on activities that are a low priority in the strategy execution effort.

C

11. Well-conceived policies and operating procedures facilitate strategy execution in all of the following ways EXCEPT they:

A. provide top-down guidance regarding how things are to be done.

B. help ensure consistency in how execution-critical activities are performed.

C. promote the creation of a work climate that facilitates good strategy execution.

D. facilitate cost cutting (finding ways to do less with less) while undertaking new strategic initiatives.

E. channel individual and group efforts along a strategy-supportive path.

D

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

A. helping ensure that worker eligibility for incentive bonuses is measured consistently and awarded fairly.

B. fostering the use of best practices, TQM, Six Sigma, and continuous improvement efforts.

C. acting as a powerful lever for changing employee attitudes about the need for a different incentive and reward system.

D. helping build employee commitment to strengthening the company’s core competencies and competitive capabilities.

E. placing limits on ineffective independent action and channelling efforts of individuals along a path more conducive to good strategy execution and operating excellence.

E

13. Providing top-down guidance can aid the task of implementing strategy:

A. provided they promote greater use of and commitment to best practices and total quality management.

B. because really effective internal policies and procedures are not easily duplicated by other firms.

C. because astutely conceived policies or procedures can result in competitive advantage.

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

E. by making it easier to impose tight budget controls and avoid wasting scarce resources.

D

14. A useful guideline in designing strategy-facilitating policies and operating procedures is:

A. to prescribe enough policies to give organizational members clear direction in implementing strategy and to place reasonable boundaries on their actions. This then empowers them to act within these boundaries in pursuit of company goals.

B. that strictly enforced policies work better than loosely enforced policies.

C. that more policies/procedures work better than fewer policies/procedures, and that strict enforcement always beats lax enforcement.

D. to let individuals act in an empowered and self-directed way, subject only to the constraint that their actions and behavior be ethical and in step with the corporate culture.

E. to prescribe enough policies and procedures that little is left to chance in performing value chain activities, and employees should have no leeway to do things in a manner that deviates from the company’s best-practices standard.

A

15. Which of the following is NOT a benefit of prescribing policies and operating procedures to aid management’s task of implementing strategy?

A. Placing limits on independent action and helping overcome resistance to change

B. Providing top-down guidance to operating managers, supervisory personnel, and employees regarding how things need to be done and what behavior is expected

C. Promoting the creation of a work climate that facilitates good strategy execution

D. Helping build employee commitment to adopting best practices and using the tools of TQM and Six Sigma

E. Helping enforce consistency of effort in how particular activities are performed in geographically scattered organization units

D

16. In prescribing policies and procedures that facilitate independent action on the part of empowered employees for good strategy execution companies need to do ALL of the following EXCEPT:

A. give organization members clear direction and place reasonable boundaries on their actions.

B. empower employees to act within the company’s set boundaries in pursuit of company goals.

C. allow company personnel to act with some defined degree of freedom, especially when individual creativity and initiative are more essential to good strategy execution than standardization and strict conformity.

D. institute policies that give employees substantial leeway to carry out activities the way they think best.

E. produce policy manuals on strategy execution that prescribe exactly how daily operations are to be conducted.

E

17. Which of the following exemplifies good strategy execution?

A. The policy document of Dominos ensures consistency in service behavior patterns across outlets.

B. The policy document of Pizza Today allows for differences in product range and quality across outlets.

C. The policy document of Boston Pizza leaves ample scope for each member of the staff to act independently.

D. The policy document of Little Caesars discusses strategy but not the routines for running the outlets.

E. The policy document of Pizza Inn is averse to standardization of the way activities are performed.

A

18. Which of the following does NOT facilitate strategy execution?

A. Hyundai service centers follow same routines when receiving vehicles for servicing.

B. Ford encourages staff to skip practices out of sync with the company’s mission.

C. General Motors showrooms have similar operating practices across regions.

D. Chevrolet Service center replicates the caliber of customer service across locations.

E. Renault is averse to standardization of the way activities are performed at its service centers.

E

19. Company managers can significantly advance the cause of superior strategy execution by doing all of the following EXCEPT:

A. employing best practices methods and using process management tools to drive continuous improvement in how internal operations are conducted.

B. adopting benchmarking of the company’s operating activities and business processes against "best-in-industry" and "best in world" performers.

C. adopting "best-in-company" operating activities and processes when a company’s various organizational units are performing the same functions differently.

D. instituting operating practices that generate economies of scale and scope with current value chain activities.

E. develop performance yardsticks for judging effectiveness and efficiency for particular value chain activities and business processes deemed strategically critical.

D

20. A "best practice" refers to:

A. a policy or procedure that is unusually effective.

B. a method of performing an activity or business process that consistently delivers superior results compared to other approaches and that at least one company has demonstrated works particularly well in terms of delivering operating excellence.

C. a strategy-critical activity that results in sustainable competitive advantage.

D. a value chain activity that is a company’s distinctive competence.

E. a particular value chain activity that management has given top priority to performing in world-class fashion.

B

21. A "best practice" refers to:

A. a method of 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.

B. the best-known procedure for performing a specific task or activity so as to achieve the lowest possible costs.

C. performing activities in a manner that conforms to established industry standards.

D. a company’s core competence.

E. performing a particular value chain activity in "world-class" fashion (one unmatched by any other company in the world).

A

22. The idea behind benchmarking and best practices is to:

A. identify which companies are the best performers of a strategically relevant activity and then copy their methods exactly.

B. search the world for a company that performs a strategically relevant task or value chain activity at the lowest possible cost and then use business process reengineering techniques to try to meet or beat the costs of the world’s low-cost performer of that activity.

C. perform each activity in the industry value chain according to standard industry practice and then regularly benchmark the company’s performance to see if it is actually achieving the industry standard.

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

E. determine whether a company has a "world-class" value chain.

D

23. The backbone of the process of identifying, studying, and implementing best practices is:

A. business process reengineering

B. a corporate culture that has a core value of operating excellence

C. benchmarking

D. Six Sigma quality control techniques

E. the innovative application of TQM techniques

C

24. Which of the following is NOT a method that company managers can use to promote operating excellence in performing value chain activities?

A. Utilize benchmarking.

B. Adapt best practices.

C. Install TQM and/or Six Sigma quality control techniques.

D. Undertake business process reengineering.

E. Adopt standard industry techniques.

E

25. Which of the following is NOT a tool or method that managers can use to promote operating excellence and further the cause of good strategy execution?

A. Benchmarking

B. Business process reengineering

C. Strategic resource training

D. TQM and Six Sigma quality control techniques

E. Best practices

C

26. 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:

A. it is necessary to give these functional departments the freedom to collaborate closely with each other to achieve the desired degree of coordination.

B. it is necessary to outsource those activities that are fragmented to strategic partners in order to achieve the needed coordination.

C. there is merit in using business process reengineering to radically redesign and streamline strategy-critical processes and workflow from different departments and unifying their performance into a single department or cross-functional work group that has charge over the whole process.

D. TQM is a potent way to reengineer the work effort, avoid the shortcomings of a functional organization structure, and achieve rapid-response capability.

E. it makes good organizational sense to combine those functional departments where fragmentation is a problem into a single department.

C

27. Business process reengineering is a tool for:

A. expediting the redesign of existing products and shortening the design-to-market cycle.

B. radically redesigning and streamlining how an activity (workflow) is performed, by pulling the pieces of strategy-critical activities out of different departments and unifying their performance in a single department or cross-functional work group.

C. instituting total quality management.

D. making the most effective use of Six Sigma techniques.

E. the rapid redesign of an organization’s structure so as to quickly create organizational competencies and capabilities.

B

28. Reengineering how a firm performs a business process:

A. is a tool for 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 is in charge of the whole process.

B. is the most frequently used tool of total quality management (TQM).

C. requires that a company have many strategic partnerships and alliances with outsiders.

D. is typically cheaper and easier than using Six Sigma techniques to achieve the same cost savings.

E. is usually a company’s most important "best practice" for achieving operating excellence.

A

29. Total quality management (TQM):

A. entails creating a total quality culture that strives for continuously improving the performance of every value chain activity and is driven by a philosophy of managing a set of business practices: 100 percent accuracy in performing tasks (zero defects), involvement and empowerment of employees at all levels, team-based work design, benchmarking, and total customer satisfaction.

B. is a valuable tool for helping company managers identify what the best practice is for performing a particular activity at a high level of quality.

C. works best when used in conjunction with Six Sigma quality control techniques.

D. is an excellent tool for reengineering business processes and making quantum gains in the efficiency and effectiveness with which the processes are performed.

E. is a philosophy of doing things that aims at mistake-free management of a company’s entire business.

A

30. Total quality management (TQM) emphasizes all of the following EXCEPT which?

A. 100 percent accuracy in performing tasks

B. Continuous improvement in all phases of operations

C. Adoption of industry standard operating practices

D. Benchmarking and total customer satisfaction

E. Empowerment of employees and team-based work design

C

31. Total quality management (TQM) programs:

A. deal exclusively with procedures to achieve defect-free manufacturing and assembly.

B. nearly always contribute more to the achievement of operating excellence than either business process reengineering or Six Sigma quality control techniques.

C. entail creating a corporate culture bent on continuously improving the performance of every task and every value chain activity.

D. are considerably more effective in improving manufacturing and assembly activities than they are in improving such value chain activities as R&D, human resources management, supply chain management, information technology, sales, and marketing and finance.

E. are generally considered the best tool for reengineering strategy-critical business processes.

C

32. Which of the following statements about total quality management (TQM) is FALSE?

A. TQM aims at instilling enthusiasm and commitment to doing things right from the top to the bottom of the organization.

B. TQM produces significant results very quickly, with very little benefit emerging after the first six months.

C. TQM doctrine preaches that there’s no such thing as "good enough" and that everyone has a responsibility to participate in continuous improvement.

D. Effective use of TQM entails creating a corporate culture bent on continuously improving the performance of every task and every value chain activity.

E. Total quality management (TQM) is a philosophy of managing a set of business practices that emphasizes continuous improvement in all phases of operations, 100 percent accuracy in performing tasks, involvement and empowerment of employees at all levels, team-based work design, benchmarking, and total customer satisfaction.

B

33. Six Sigma programs:

A. utilize advanced statistical methods to improve quality by reducing defects and variability in the performance of business processes.

B. consist of a disciplined, statistics-based system aimed at producing not more than 2.5 defects per million iterations for a manufacturing or assembly process.

C. are based on three principles: (1) all work is a statistically controllable process; (2) no well-controlled process allows variability; and (3) defect-free work requires tight statistical controls.

D. suggest that all activities can be controlled, employee empowerment is the best control tool, and 100 percent control is possible.

E. radically redesign and streamline how an activity is performed.

A

34. Six Sigma quality control:

A. is a strategy implementer’s best, most reliable tool for simultaneously achieving top-notch product quality and low manufacturing costs.

B. consists of a disciplined, statistics-based system aimed at producing not more than 2.5 defects per million iterations for a manufacturing or assembly process.

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

D. consists of a disciplined, statistics-based system aimed at fewer than 5.0 complaints per million customer transactions.

E. is a powerful tool for companies whose customers are very picky about product quality and product performance and who can’t afford for the product they use to break down and require repairs.

C

35. Six Sigma processes:

A. are based on three principles: (1) all work is a statistically controllable process; (2) no well-controlled process allows variability; and (3) defect-free work requires tight statistical controls.

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

C. can be used for improving products or business processes but not for developing new products or new processes.

D. consists of a disciplined, statistics-based system aimed at producing not more than 10 defects per million iterations for a manufacturing or assembly process.

E. can be used for developing new products or new business processes but not for improving existing products or business processes.

B

36. The Six Sigma process of define, measure, analyze, improve, and control (DMAIC) is:

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

B. an improvement system used to develop new processes or products at 100 percent defect-free levels.

C. a system of statistical procedures for achieving 100 percent control over how a task is performed.

D. an improvement system used to develop new processes or products at Six Sigma levels.

E. a system of statistical procedures for eliminating 100 percent of the variability in how a task is performed.

A

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

A. improving performance when there are small variations in how well an activity is performed. If there are wide variations, then the Six Sigma DMVSI process has to be used.

B. achieving 100 percent control over how a task is performed and eliminating 100 percent of the variability in how a task is performed.

C. improving performance when there are wide variations in how well an activity is performed.

D. developing new processes or products at Six Sigma quality levels.

E. improving customer satisfaction, whereas Six Sigma improves manufacturing processes.

D

38. The statistical thinking underlying Six Sigma is based on which of the following three principles?

A. All activities can be controlled, employee empowerment is the best control tool, and 100 percent control is possible.

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

C. All work activities can be done accurately most of the time, empowered employees are necessary for effective control, and good statistical data is an empowered employee’s best control tool.

D. All work is a statistically controllable process, 100percent control is possible, and every well-controlled process is defect-free.

E. Most business processes are subject to control, Six Sigma can totally remove variability in how processes are performed, and most defects can be eliminated.

B

39. Which of the following statements about Six Sigma quality programs is true?

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

B. Six Sigma is a philosophy of managing a set of business practices that emphasizes continuous improvement in all phases of operations and 100 percent accuracy in performing tasks.

C. Six Sigma’s DMAIC process is a particularly good vehicle for improving performance when there are only small variations in how well an activity is performed.

D. The focus of Six Sigma programs is on the development of new products or new business processes but not on improving existing products or business processes.

E. Six Sigma is a system of statistical procedures for eliminating 92 percent of the variability in how a task is performed.

A

40. A company that successfully and methodically applies Six Sigma methods to its value chain, activity by activity, can:

A. clearly consider what it will take to overtake rivals with the industry’s overall best strategy.

B. make major strides in improving the proficiency with which its strategy is executed without sacrificing innovation.

C. increase its bargaining power with suppliers and create better seller-supplier collaborations.

D. assess the extent to which rivals have competitively valuable competencies or capabilities.

E. construct a business model that entails a value proposition based on quality.

B

41. An ambidextrous organization is one that:

A. pursues incremental improvements in operating efficiency, while R&D and other processes that allow the company to develop new ways of offering value to customers are given freer rein.

B. is capable of using efficiency and effectiveness with equal skill.

C. is very skillful and versatile with operating activity.

D. is managed by employing continuous improvement in operating practices while managing employees as a loosely integrated network of efficiency.

E. employs identical improvement methods for both operating processes and R&D.

A

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

A. reengineering is a tool for installing process organization, whereas TQM/Six Sigma concern defect-free production methods and delivering world-class customer service.

B. reengineering helps create core competencies, whereas TQM/Six Sigma are tools for making a core competence stronger and more efficient.

C. reengineering is a tool for achieving one-time quantum improvement, whereas TQM and Six Sigma programs aim at ongoing incremental improvements.

D. business process reengineering requires benchmarking, whereas TQM and Six Sigma do not.

E. reengineering represents an effort to totally revamp a firm’s value chain, whereas TQM looks at incrementally improving the performance of two or three targeted value chain activities and Six Sigma is primarily for reducing manufacturing defects.

C

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

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

B. have annual contests to see which part of the company is making the greatest strides in approaching operating excellence.

C. strive for 100 percent control over the variability in how each and every value chain activity is performed.

D. have at least 50 percent of company personnel earn "green belts" in Six Sigma techniques.

E. build core competencies in TQM, Six Sigma, benchmarking, best practices adoption, and business process reengineering.

A

44. Without a strategic framework, managers lack the context in which to:

A. fix things that really matter to business-unit performance and competitive success.

B. carry out company-wide goals related to the dynamics of a single business model.

C. employ the company’s resources in the pursuit of sustainable competitive advantage.

D. communicate aspirations for the company.

E. analyze the emerging market opportunities more precisely.

A

45. 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:

A. signaling unequivocal and unyielding commitment to total quality, continuous improvement, 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.

B. requiring all company personnel to attend Six Sigma training programs and achieve "black belt" status.

C. instituting greater centralization of decision making to help enforce strict compliance with quality control policies and procedures.

D. stressing 100 percent accurate individual performance rather than group or team performance.

E. dismissing employees who repeatedly fail to achieve 100percent accuracy in their work after a 12-month trial period.

A

46. Although it is relatively easy for rivals to implement process management tools, it is much more difficult and time-consuming for them to:

A. instill a deeply ingrained culture of operating excellence.

B. keep employees well-informed about the strides being made with continuous improvement.

C. unify the managerial efforts behind improving operating practices as a commendable goal.

D. combine the pursuit of financial objectives with the pursuit of its strategic objectives.

E. understand the barriers to installing new operating activities.

A

47. Which of the following exemplifies one of the most widely used methods of gauging how well a company is executing its strategy?

A. Merrill & Company has a disconnected organizational arrangement whereby pieces of an activity are performed in different functional departments.

B. Oceania identifies agents of change who are convinced about sticking to the old ways of doing things.

C. Honwell narrates success stories of rival brands to convince its personnel about traditional wisdom.

D. Fizz-Cola judges the efficiency of internal operations by benchmarking them against best-in-industry performers.

E. Motorola develops the data to measure how poorly rival brands perform against the best-practice standards across industry.

D

48. Which of the following does NOT exemplify business process reengineering?

A. Blue Mountain creates teams of mixed-occupation freelancers to design Christmas cards.

B. Speedmore integrates three distribution units to form a consolidated zonal distribution center.

C. Bank of America automates global transaction services in a quest for operational efficiencies.

D. PayPal segregates payment notification operations from mobile transfer operations to expand its customer base.

E. Florida Power eliminates work depots, entrusting the task of repair to crew members in a mobile van.

D

49. Which of the following takes the route of business process reengineering to attain operational excellence?

A. AT&T works toward creating a total quality culture by continuously reviewing the performance of every value chain activity.

B. Acer Phones uses advanced statistical methods to remove the causes of defects at its manufacturing units.

C. Ericsson introduces continuous-improvement business philosophy at its customer care centers.

D. Cellkon pulls the pieces of an activity out of different departments to create a cross-functional work group.

E. Honeywell strives to incrementally reduce defects through an ongoing assessment process.

D

50. Which of the following makes use of Six Sigma programs to improve quality and strategy execution?

A. Memphis & Company applies advanced statistical methods to identify and remove the causes of defects.

B. Milwaukee Hospital relocates its pathological lab to reach out to consumers in suburbs.

C. LG Electronics reengineers its value chain activities by creating cross-functional teams.

D. La Tagliata Boutiques offers a different range of products at different outlets across London.

E. Duke Energy replaces work depots by mobile repair vans reducing operational costs by 40 percent.

A

51. Installing well-conceived, state-of-the-art support systems is an important managerial component of implementing and executing strategy because:

A. such systems are essential to being able to engage in effective benchmarking and continuous improvement.

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

C. they help managers run a tight ship and preserve strong, centralized control over internal activities.

D. they are the basis for revamping value chains, boosting labor productivity, and reducing operating costs.

E. decentralized decision making and employee empowerment cannot work well without having well-conceived information and operating systems to accurately benchmark internally performed value chain activities against best-in-industry and best-in-class performers.

B

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

A. are essential because business process reengineering efforts, TQM, Six Sigma, and benchmarking programs can’t be carried out effectively without them.

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

C. make it simple and easy to spot cost overruns and inefficiencies.

D. are valuable tools for shortening a company’s value chain, boosting workforce morale and productivity, and simplifying the task of adopting best practices.

E. help managers run a tight ship and preserve strong, centralized control over internal activities

B

53. The broad areas that internal information business systems need to cover include all of the following EXCEPT:

A. financial performance data.

B. supplier/strategic partner data.

C. customer data.

D. operations data.

E. competitor data.

E

54. The broad areas that internal information business systems need to cover include all of the following EXCEPT:

A. financial performance data.

B. corporate culture data.

C. customer data.

D. operations data.

E. employee data.

B

55. Information systems provide managers with a means for monitoring all of the following EXCEPT:

A. the results that flow from the actions of subordinates.

B. the performance of empowered workers.

C. weekly operating statistics.

D. employees with over-the-shoulder supervision.

E. daily operating statistics.

D

56. Which of the following is NOT integral to superior strategy execution and operating excellence?

A. Having real-time information systems that permit company managers to stay on top of implementation initiatives and daily operations and to intervene if things seem to be drifting off course

B. Having state-of-the-art operating systems, information systems, and real-time data

C. Having access to online systems that provide statistical information about operating activities

D. Having the systems capability to identify and diagnose problems, so as to take corrective actions

E. Having access to employee data of competitors

E

57. Which of the following is NOT a recommended way for managers to monitor the operating performance of employees to ensure superior strategy execution?

A. Scrutinizing daily and weekly operating statistics without resorting to constant over-the-shoulder supervision

B. Utilizing self-managed work groups in peer-based control environments

C. Removing some layer of management hierarchy and relying on strong peer pressure to keep team members operating between the white lines

D. Leaving employees to their own devices in meeting performance standards

E. Using information systems capability to monitor team performance in real time

D

58. A company wants to plan a state-of-the-art information and operating system to enable better strategy execution. Which of the following is the most likely reason for the company’s move?

A. It wants to embrace modern technology.

B. It wants to gain a competitive edge over rivals.

C. It wants to spot cost overruns and inefficiencies.

D. It wants to increase workforce productivity and retention.

E. It wants to boost management morale.

B

59. Management’s most powerful tool for mobilizing organizational commitment to competent strategy execution and operating excellence is the:

A. diligent and persistent use of benchmarking and best practices.

B. proper use of a reward structure with motivational incentives.

C. implementation of TQM and/or Six Sigma programs.

D. periodic giving of inspirational speeches aimed at arousing employees’ emotional energy.

E. process of providing employees with a high degree of job security (ideally, via a no-layoff policy).

B

60. Management’s most powerful tool for winning employee commitment to good strategy execution is:

A. the establishment of strategy-supportive policies and procedures.

B. empowering employees and encouraging them to adopt best practices.

C. setting stretch objectives.

D. a structure of rewards and incentives tied tightly to the achievement of the organization’s strategic priorities.

E. aggressive use of TQM and Six Sigma quality control programs.

D

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

A. compensate employees for performing their assigned duties in a diligent fashion.

B. boost employee morale in ways that create widespread job satisfaction.

C. enlist employees’ commitment to successful strategy execution by rewarding them, both monetarily and non-monetarily, for their valuable contributions.

D. relieve managers of the burden of closely monitoring each employee’s performance.

E. boost labor productivity and help lower the firm’s overall labor costs.

C

62. Reward and incentive systems serve as a(n):

A. direct stimulus for satisfying the basic expectations of the standard job and mechanisms.

B. indirect motivational tool designed to convert employee commitment into high-powered incentives.

C. indirect type of control mechanism that conserves on more costly control mechanisms of supervisory oversight.

D. direct base-pay financial compensation mechanism that competes with rival companies’ salary bands for similar work efforts.

E. negative motivational element.

C

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

A. having top executives commit to making employees the company’s most valuable competitive asset.

B. developing core competencies in the use of TQM, Six Sigma programs, and business process reengineering.

C. resourceful and effective use of motivational incentives, both monetary and nonmonetary.

D. clever and innovative use of benchmarking and best practices.

E. providing employees with a high degree of job security and attractive perks.

C

64. In trying to gain employees’ wholehearted commitment to good strategy execution and operating excellence, managers are well advised to use all of the following incentives EXCEPT:

A. providing attractive perks and fringe benefits.

B. giving awards and public recognition to high performers and showcasing company successes.

C. creating a work atmosphere in which there is genuine caring and mutual respect among workers and between management and employees.

D. relying on opportunities for promoting from within wherever possible.

E. .withholding information from employees about financial performance, strategy, and competitors’ actions.

E

65. Which of the following is NOT likely to be effective in trying to gain employees’ wholehearted commitment to good strategy execution?

A. Strictly enforcing all rules in the employee handbook with the use of fines.

B. Giving awards and public recognition to high performers and showcasing company successes.

C. Providing a comfortable and attractive working environment

D. Providing opportunities for promotion from within wherever possible

E. Providing attractive perks and fringe benefits

A

66. A motivation and incentive system that is aimed at spurring stronger employee commitment to good strategy execution:

A. should focus on incorporating more positive than negative motivational elements.

B. should be tied first and foremost to whether employees satisfactorily perform their assigned duties in an ethical and honorable manner.

C. must involve deliberately assigning employees heavy workloads and tight deadlines.

D. D. needs to put top priority on making employees happy and secure in their jobs.

E. must avoid the potential for negative consequences if performance is subpar.

A

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

A. be completely free of such elements as tension, pressure, anxiety, job insecurity, and tight deadlines—a no-pressure/no-adverse-consequences work environment is essential.

B. emphasize only positive types of rewards.

C. accentuate positive rewards but also carry out the "up-or-out" policy for performance that does not meet expectations.

D. not deny rewards to employees who put forth good effort and try hard, though performance is subpar.

E. reduce job insecurity and give employees an incentive to stay busy and work hard.

C

68. A reward system that accentuates positive rewards for good performance:

A. works best in strong culture organizations, while negative motivational approaches and reward systems tend to be most successful in weak culture organizations.

B. is especially effective in aligning the well-being of organizational members with achieving the company’s performance targets; reward systems with negative elements tend to be very dysfunctional in motivating employees.

C. seldom works very well because the threat of denying rewards to sub-par performers is typically the most powerful motivator.

D. works fine so long as 100 percent emphasis is placed on monetary incentives.

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

E

69. A no-pressure/no-adverse-consequences work environment does not necessarily lead to:

A. superior strategy execution or operating excellence.

B. satisfactory outcomes because there is always a cadre of ambitious people who relish the challenge.

C. workforce morale issues.

D. establishing more positive than negative motivational reward elements.

E. excessive shortfall in performance.

A

70. To create a strategy-supportive system of rewards and incentives, a company must:

A. reward people for accomplishing results, not just for dutifully performing assigned tasks.

B. focus jobholders’ attention and energy on what to do as opposed to what to achieve.

C. demand jobholders’ 100 percent attendance since it guarantees results.

D. hold jobholders’ responsible for their function and not burden them with being accountable.

E. incorporate negative motivational elements to assure results.

A

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

A. use only positive rewards and never involve the use of tension, fear, job insecurity, stress, or anxiety.

B. entail decidedly positive rewards for meeting or beating performance targets, but also impose sufficiently negative consequences when actual performance falls short of the target.

C. aim at creating a no-pressure/no-adverse-consequences work environment.

D. entail paying the highest wages and salaries in the industry for all jobholder positions and also stressing nonmonetary rewards, like cash bonuses for high-performing employees.

E. put top priority on making employees happy and secure in their jobs.

B

72. The first principle in designing an effective compensation system and the most dependable way to keep people focused on strategy execution and the achievement of performance targets is to:

A. establish ethical compensation policies and convince employees that they are the firm’s most valuable competitive asset.

B. design monetary and nonmonetary incentives that boost labor productivity and help lower the firm’s overall labor costs.

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

D. pay employees a bonus for each strategic and financial objective that the company achieves.

E. allow employees to propose what rewards they would like to receive to achieve the company’s stretch objectives.

C

73. A well-designed reward system:

A. ties rewards to performance outcomes directly linked to good strategy execution and the achievement of financial and strategic objectives.

B. should be free of elements that induce stress, anxiety, tension, pressure to perform, and job insecurity.

C. puts the primary emphasis on denying rewards to those who fail to perform tasks in the prescribed fashion.

D. emphasizes weeding out employees who are average performers.

E. strives for a 50-50 balance between positive and negative rewards and a 50-50 balance between monetary and nonmonetary rewards.

A

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

A. link the payment of all monetary rewards to the company’s bottom-line profitability.

B. employ incentives that will help motivate employees to put in long hours and sacrifice personal ambitions and aspirations to pursue the priorities of management.

C. choose those types of rewards and incentives that will focus employees’ attention on total customer satisfaction.

D. make across-the-board wage and salary increases the cornerstone of monetary rewards.

E. make nonmonetary rewards and recognition an integral part of the reward system.

E

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

A. making the performance payoff a major, not minor, piece of the total compensation package.

B. having incentives that apply to the management team (employees should generally not be included in incentive pay plans but should have attractive wages and salaries).

C. having an outside wage and salary expert administer the system so there is no doubt as to its fairness and impartiality.

D. basing the incentives on group performance rather than individual performance.

E. making minimal use of nonmonetary incentives and rewarding people for diligently performing their assigned duties.

A

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

A. The reward system must be administered with scrupulous objectivity and fairness.

B. The payoff for meeting or beating performance targets must be a major, not minor, piece of the total compensation package.

C. The incentive plan should extend to all managers and all employees, not just top management.

D. The reward system must reward nonperformers who, despite expending tremendous effort, have not fared well in achieving the benchmarks under the incentive system.

E. Make sure that the performance targets each individual or team is expected to achieve involve outcomes that the individual or team can personally affect.

D

77. Which of the following is NOT characteristic of a compensation and reward system designed to help drive successful strategy execution?

A. Tying incentives to performance outcomes directly linked to good strategy execution and financial performance

B. Keeping the time between achieving the target performance outcome and the payment of the reward as short as possible

C. Making sure that the performance targets that each individual or team is expected to achieve involve outcomes that the individual or team can personally affect

D. Providing generous rewards for people who turn in outstanding performances

E. Offering rewards that amount to 3 percent of an employee’s total compensation

E

78. The resolute standard for judging whether individuals, teams, and organizational units have done a good job must be measured by:

A. comparing industry performance standards against the company’s own internal criteria.

B. the level of rapid growth in industry (buyer) demand.

C. whether they meet or beat performance targets that reflect good strategy execution.

D. the number of rivals existing in the marketplace and their growth results.

E. the relative competitive strengths of the industry leaders and how vulnerable they are to mimicry.

C

79. The managing director of a paper products company, wanted to introduce nonmonetary incentives to enhance employee motivation and spur strategy execution. When presented with some ideas, he chose all of the following EXCEPT:

A. rewarding employees even for subpar performance.

B. giving awards and public recognition to high performers and showcasing company successes.

C. providing a comfortable and attractive working environment.

D. providing opportunities for promotion from within wherever possible.

E. providing attractive perks and fringe benefits.

A

80. The top management at a new social media technology company would like to revamp its incentive compensation system to attract ambitious employees. What would be their best approach?

A. Make the performance bonus at least 3 to 4 percent of base salary to have some impact.

B. Make the performance bonus at least 10 to 12 percent of base salary to have some impact.

C. Make the performance payoff equal for average and below-average performers.

D. Set unrealistic performance standards, but with an equally high compensation.

E. Reward people who work very hard, even if they fall short of achieving performance targets.

B

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