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CHAPTER 10 BUSINESS STRATEGY QUESTIONS WITH CORRECT ANSWERS
"1. The organizing challenge of a decentralized structure that stresses employee empowerment
is - CORRECT ANSWER D. how to exercise adequate control over the actions and decisions
of empowered employees so that the business is not put at risk while trying to capture the benefits of empowerment."
"2. In a highly centralized organizational structure, - CORRECT ANSWER E. All of these."
"3. Which one of the following falsely characterizes a centralized organizational structure? -
CORRECT ANSWER E. A company that draws on the combined intellectual capital of its
people can outperform a company that relies on command and control"
"4. The disadvantages of a centralized organizational structure include - CORRECT ANSWER
A. making the organization sluggish in responding to changing conditions." "5. The principal managerial actions and initiatives undertaken in the strategy execution process include
which of the following? - CORRECT ANSWER B. Instituting policies and procedures that
facilitate rather than impede effective strategy execution" "6. The principal managerial actions and initiatives undertaken in the strategy execution process include
which of the following? - CORRECT ANSWER E. All of these"
"7. The three components of building a capable organization are - CORRECT ANSWER D.
staffing the organization, building core competencies and competitive capabilities, and structuring the organization and work effort."
"8. Building an organization capable of good strategy execution entails - CORRECT ANSWER
A. staffing the organization, building core competencies and competitive capabilities, and structuring the organization and work effort."
"9. Putting together a capable top management team - CORRECT ANSWER D. entails filling
key managerial slots with people who are good at figuring out what needs to be done and skilled in "making it happen" and delivering good results."
"10. The overriding aim in building a management team should be to - CORRECT ANSWER B.
assemble a critical mass of talented managers who can function as agents of change and further the cause of first-rate strategy execution."
"11. Recruiting and retaining capable employees - CORRECT ANSWER B. is important
because the quality of an organization's people is always an essential ingredient of successful strategy execution—knowledgeable, engaged employees are a company's best source of creative ideas for the nuts-and-bolts operating improvements that lead to operating excellence." "12. Which one of the following statements about recruiting and retaining capable employees is
true? - CORRECT ANSWER A. The quality of an organization's people is always an essential
ingredient of successful strategy execution—knowledgeable, engaged employees are a company's best source of creative ideas for the nuts-and-bolts operating improvements that lead to operating excellence." "13. Which of the following is generally not among the practices that companies use to staff
jobs with the best people they can find? - CORRECT ANSWER C. Weeding out the 20%
lowest-performing employees each year" "14. Which one of the following is not a means of building and strengthening competitively
valuable resources and capabilities? - CORRECT ANSWER B. Shifting from decentralized to
centralized decision making so as to give senior executives more authority and control in driving cultural change." "15. If management is to match a company's organization structure to its strategy in an effective way, then
it is essential - CORRECT ANSWER B. for strategy-critical value-chain activities to be the main
building blocks on the organization chart." "16. The rationale for making strategy-critical value chain activities the primary building blocks
in a company's organizational chart is based on - CORRECT ANSWER D. the thesis that if
activities crucial to strategic success are to have the resources, decision-making influence, and organizational impact they need, they have to be centerpieces in the organizational scheme."
"26. A change in strategy nearly always entails budget reallocations because - CORRECT
ANSWER C. organizational 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." "27. Which one of the following is not a benefit of prescribing policies and operating procedures to aid
management's task of implementing strategy? - CORRECT ANSWER D. Helping build
employee commitment to adopting best practices and using the tools of TQM and Six Sigma"
"28. A useful guideline in designing strategy-facilitating policies and operating procedures is -
CORRECT ANSWER A. to prescribe enough policies to give organizational members clear
direction in implementing strategy and to place desirable boundaries on their actions, then empower them to act within these boundaries however they think makes sense."
"29. The backbone of identifying, studying, and implementing best practices is - CORRECT
ANSWER C. benchmarking."
"30. Which one of the following is not a tool that company managers can use to promote
continuous improvement (operating excellence) in performing value chain activities? -
CORRECT ANSWER E. Adoption of standard industry techniques"
"31. Business process reengineering is a tool for - CORRECT ANSWER B. pulling the pieces of
strategy-critical activities out of different departments and unifying their performance in a single department or cross-functional work"
"32. Reengineering how a firm performs a business process - CORRECT ANSWER 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."
"33. Total quality management (TQM) - CORRECT ANSWER A. is a philosophy of managing a
set of business practices that emphasizes continuous improvement in all phases of operations, 100% accuracy in performing tasks, involvement and empowerment of employees at all levels, team-based work design, benchmarking, and total customer satisfaction."
"34. Total quality management (TQM) emphasizes all but which one of the following? -
CORRECT ANSWER C. Widespread adoption of industry standard operating practices"
"35. The hallmark of an adaptive corporate culture is - CORRECT ANSWER C. willingness on
the part of organizational members to accept change and take on the challenge of introducing and executing new strategies."
"36. Which of the following statements about adaptive corporate cultures is false? - CORRECT
ANSWER B. The standout cultural traits are a "can-do" spirit, pride in doing things right, no-
excuses accountability, and a pervasive results-oriented work climate where people go the extra mile to meet or beat stretch objectives."
"37. Which of the following is not a common trait of an unhealthy company culture? -
CORRECT ANSWER D. An aversion to incentive compensation, failure to recruit the best and
brightest employees, subpar support for employee training, overemphasis on working in teams, and low ethical standards"
"38. Which of the following is not an example of an unhealthy company culture? - CORRECT
ANSWER E. Hyper-adaptive cultures"
"39. Unhealthy company cultures typically have such characteristics as - CORRECT ANSWER
C. a politicized internal environment, hostility to change, an insular, inwardly focused culture, and unethical or greed-driven behavior on the part of executives."
"40. Companies with politicized cultures - CORRECT ANSWER C. tend to drive managers to
consume a great deal of organizational energy and make the company's strategic agenda take a backseat role to political maneuvering." "41. Company strategies and value creating processes can't be effectively executed without internal
information systems that include - CORRECT ANSWER A. customer data, employee data,
supplier/partner data, operations data, and financial performance data."
"51. The character of a company's corporate culture is a product of - CORRECT ANSWER E.
All of these."
"52. Which one of the following is not a fundamental part of a company's culture? - CORRECT
ANSWER D. The company's strategic vision, strategic intent, and strategy"
"53. The hallmarks of a high-performance corporate culture include - CORRECT ANSWER B.
a "can-do" spirit, pride in doing things right, no-excuses accountability, and a pervasive results oriented work climate where people go the extra mile to meet or beat stretch objectives."
"54. Which one of the following statements about a high-performance culture is false? -
CORRECT ANSWER B. High-performance cultures often have a low regard for high ethical
standards, a strong preference for high-risk strategies, and a slow and methodical approach to responding to changes in the marketplace."
"55. Total quality management (TQM) programs - CORRECT ANSWER C. achieve the biggest
success when extended to employee efforts in all departments—human resources, R&D, accounting and records, information systems, and so forth."
"56. Six Sigma quality control - CORRECT ANSWER C. consists of a disciplined, statistics-
based system aimed at producing not more than 3.4 defects per million iterations for any business process"
"57. The statistical thinking underlying Six Sigma is based on the following three principles: -
CORRECT ANSWER B. All work is a process, all processes have variability, and all processes
create data that explains variability"
"58. The Six Sigma process of define, measure, analyze, improve, and control (DMAIC) is -
CORRECT ANSWER A. an improvement system for existing processes falling below
specification and needing incremental improvement; the DMAIC process is a particularly good vehicle for improving performance when there are wide variations in how well an activity is performed" "59. Six Sigma's DMADV process of define, measure, analyze, design and verify is a particularly good
vehicle for - CORRECT ANSWER D. developing new processes or products at Six Sigma
quality levels." "60. The big difference between business process reengineering and continuous improvement programs
such as TQM or Six Sigma is that - CORRECT ANSWER C. reengineering is a tool for achieving
onetime quantum improvements whereas TQM and Six Sigma programs aim at incremental progress improvement (striving for inch-by-inch gains again and again in a never-ending stream)."
"61. Companies with change-resistant cultures - CORRECT ANSWER C. are often overly
gung-ho about looking outside the company for best practices, new managerial approaches, and innovative ideas."
"62. Companies with insular, inwardly focused cultures usually - CORRECT ANSWER A. tend
to possess arrogant overconfident mind-sets, thereby tending to underestimate the competencies and accomplishments of rival companies and overestimate their own progress." "63. The single most visible factor that distinguishes successful culture-change efforts from failed attempts
is - CORRECT ANSWER B. competent leadership at the top."
"64. Changing a problem culture - CORRECT ANSWER A. is one of the toughest managerial
tasks because of the tendency of company personnel to cling to familiar practices and ways of doing things."
"65. The place for management to begin in trying to change a problem culture is - CORRECT
ANSWER A. by selling company personnel on the need for a new set of behaviors and work
practices."
"66. In moving to alter a problem culture, management should - CORRECT ANSWER E. All of
these."
"67. When trying to change a problem culture, management should undertake such steps as -
CORRECT ANSWER B. identifying which aspects of the present culture are supportive of
good strategy execution and which ones are not"
entails - CORRECT ANSWER E. All of these."
"77. Successfully leading the effort to instill a spirit of high achievement into a company's culture and put
constructive pressure on the organization to achieve good results - CORRECT ANSWER A.
entails such actions as treating employees with dignity and respect, celebrating individual, group, and company successes, and setting stretch objectives." "78. Successfully leading the effort to foster a results-oriented, high-performance culture
generally requires simple leadership practices, such as - CORRECT ANSWER A. treating
employees with dignity and respect."
