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227 Cards in this Set
- Front
- Back
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Business ethics concerns:
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the application of general ethical principles to the actions and decisions of companies and the conduct of their personnel.
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Ethical principles in business:
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are not materially different from ethical principles in general.
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Ethical principles as they apply to the conduct of personnel and business decisions:
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deal primarily with the company’s duty to comply with legal requirements, conform to ethical norms of society, and ethical principles in general.
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Notions of right and wrong, fair and unfair, moral and immoral, ethical and unethical:
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are present in all societies and cultures, and in organizations and individuals, with some of the most important concepts of what is right and what is wrong (for example, being truthful) resonating with people of most cultures, and are thus universal.
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The contentions that (1) many of the same standards of what’s ethical and what’s unethical resonate withpeoples of most societies regardless of local traditions and cultural norms and (2) to the extent there iscommon moral agreement about right and wrong actions, common ethical standards are can be used to judgethe conduct of personnel at companies operating in a variety of country markets and cultural circumstancesare defining beliefs of:
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the school of ethical universalism.
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The school of ethical universalism holds that:
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the most fundamental conceptions of right and wrong are universal and apply to members of all societies, all companies, and all businesspeople.
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According to the school of ethical universalism:
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to the extent there is common moral agreement about right and wrong actions and behaviors across multiple cultures and countries, there exists a set of universal ethical standards to which all societies, all companies, and all individuals can be held accountable.
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According to the school of ethical universalism:
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universal ethical principles set forth the traits and behaviors that are considered virtuous and that a good person is supposed to believe in and to display. As such, these norms put limits on what actions andbehaviors fall inside the boundaries of what is right and which ones fall outside—such universal normsinclude honesty, respecting the rights of others, practicing the Golden Rule, and not acting in a mannerthat harms others or pillages the environment.
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If one concurs with the school of ethical universalism, then one believes that:
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many basic moral standards travel well across cultures and countries and really do not vary significantly according to local cultural beliefs, social mores, religious convictions, and/or the circumstances of the situation.
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The strength of the beliefs underlying ethical universalism is that
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it draws upon the collective views of multiple societies and cultures to put some clear boundaries on what constitutes ethical business behavior and what constitutes unethical business behavior no matter what country market or culture a company is operating in.
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The contention that since there are cross-country or cross-cultural differences in ethical standards, it isappropriate to judge behavior as ethical/unethical in the light of local customs and social mores should takeprecedence over a single set of ethical standards or what may be applicable in a company’s home market:
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defines what is meant by ethical relativism.
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The school of ethical relativism holds that:
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when there are cross-country or cross-cultural differences in what is deemed fair or unfair, what constitutes proper regard for human rights, and what is considered ethical or unethical in businesssituations, it is appropriate for local moral standards to take precedence over what the ethical standardsmay be elsewhere.
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According to the school of ethical relativism:
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there are important occasions when local cultural norms and morality and the circumstances of the situation determine whether certain behaviors are right or wrong, for there are no absolutes when it comes to business ethics.
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If one accepts the tenets of the school of ethical relativism, then it follows that:
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All of these.
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Which one of the following statements about the ethical relativism school of thinking is FALSE?
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The best and fairest way for a multinational company to approach the enforcement of ethical standards companywide is to reject ethical universalism and pursue ethical relativism.
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According to the advocates of ethical relativism:
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if the use of underage labor and/or the payment of bribes/kickbacks are acceptable in a particular culture/ society/country, then a case can be made that it is morally correct and ethical for a company to use these practices in conducting its business activities in that culture/society/country.
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A belief in ethical relativism leads to the conclusion that:
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whether the use of underage labor and the payment of bribes/kickbacks should be deemed ethical or unethical depends on the moral standards, values, and business norms that prevail in particular cultures, societies, countries, or circumstances.
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The degree of cross-country variability in paying bribes and kickbacks to grease business transactions:
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is one of the thorniest ethical problems that multinational companies face because paying bribes is normal and customary in some countries and ethically or legally forbidden in others.
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Multinational companies that forbid the payment of bribes and kickbacks in their codes of ethical conductand that are serious about enforcing this prohibition:
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face a particularly vexing problem of losing business to competitors that have no scruples—an outcome that penalizes ethical companies and company personnel.
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According to the ethical relativism school of thinking:
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there can be no one-size-fits-all template (set of authentic ethical norms) against which to gauge the conduct of company personnel, due to cross-cultural differences in ethical standards.
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Codes of conduct based on ethical relativism can be ethically dangerous for multinational companiesbecause:
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All of these.
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Companies that adopt the principle of ethical relativism in providing ethical guidance to company personnel:
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quickly find themselves on a slippery slope with no higher order moral compass if they operate in countries where ethical standards vary considerably from country to country.
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The contention that ethical standards should reflect the collective views of multiple societies in establishinga set of universal ethical principles (that are widely recognized as laying legitimacy to ethical boundarieson actions and behavior in all situations) and in allowing inclusion of a set of prevailing customary actionsof local cultures or groups (with their traditions and shared values), that further prescribe to what representsethically permissible behavior and what does not, constitutes the basic principles of:
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integrated social contracts theory.
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According to integrated social contracts theory, the ethical standards a company should try to uphold:
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are governed both by (1) a limited number of universal ethical principles that are widely recognized as putting legitimate ethical boundaries on actions and behavior in all situations, and (2) the circumstancesof local cultures, traditions, and shared values that further prescribe what constitutes ethically permissiblebehavior. But universal ethical norms always take precedence over local norms.
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According to integrated social contracts theory:
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All of these.
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Which one of the following is NOT a key element of integrated social contracts theory?
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Integrated social contracts theory rejects the slippery slope of ethical relativism and embraces ethical universalism.
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Integrated social contracts theory maintains that:
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adherence to universal ethical norms always takes precedence over local ethical norms
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The strength of integrated social contracts theory is that it:
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accommodates the best parts of ethical universalism and ethical relativism
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Within the integrated social contracts approach, we find that a multinational company’s code of conductinvolves universal norms that must be enforced worldwide and also the inclusion of local moral standards(traditions and cultures) by the host country, thereby allowing for ethical diversity which avoids:
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All of these.
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The litmus test of a company’s code of ethics is
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the extent to which it is embraced in crafting strategy and in the day-to-day operations of the business.
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Which of the following is NOT a key question that senior executives must ask whenever a new strategicinitiative is under review?
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Would the potential outcome of the proposed action pose a risk of embarrassment?
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Senior executives can ensure compliance with the ethical code of conduct by considering:
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whether the proposed action is fully compliant and in harmony with the code of ethical conduct and whether stakeholders would consider anything ethically objectionable
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The major drivers of unethical managerial behavior include:
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ethically corrupt corporate cultures, heavy pressures on company managers to meet or beat performance targets, and overzealous pursuit of personal gain, wealth, and other self-interests.
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Unethical managerial behavior tends to be driven by such factors as:
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All of these
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Which one of the following is NOT one of the major drivers of unethical managerial behavior?
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Intense competitive pressures.
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When managers take advantage of their position to further their own private interests rather than those of thefirm, what generally occurs?
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Self-dealing
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Short-termism is defined as:
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the tendency for managers to focus excessive attention on short-term performance objectives at the expense of longer-term strategic objectives.
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Cultural demands to employ unethical means if circumstances become challenging can prompt:
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clever ways to operate outside established policies to boost profits.
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When high ethical principles are deeply ingrained in the corporate culture of a company, culture can:
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All of the above.
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A company’s strategy needs to be ethical because
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(1) a strategy that is unethical in whole or in part is morally wrong and reflects badly on the character of the company personnel involved and (2) an ethical strategy is good business and in the best interest of shareholders.
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Which of the following represents a justifiable reason for why a company’s strategy should be ethical?
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All of these.
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Which of the following is NOT a particularly sound or valid reason why a company’s strategy should be ethical?
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Most all shareholders believe it is honorable for their company to pursue an ethical strategy (even though it usually entails making less profit) and are turned off by company efforts to make greater profits via unethical means.
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The strength of the beliefs underlying the moral case for an ethical strategy:
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All of these.
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The business case for an ethical strategy
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emphasizes that pursuing unethical strategies not only damages a company’s reputation but can also have costly consequences that are wide-ranging.
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Visible costs which are incurred by companies and imposed for ethical wrongdoing can include:
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All of the above.
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Internal administrative costs which are incurred by companies for ethical wrongdoing include the followingexcept
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those costs attached to adverse effects on employee productivity.
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A company’s unethical behavior risks doing considerable damage to the company’s shareholders in the formof:
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All of these.
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The essence of socially responsible business behavior is that a company:
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should balance strategic actions to benefit shareholders against the duty to be a good corporate citizen.
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The notion of social responsibility as it applies to businesses is concerned with
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a company’s duty to operate in an honorable manner, provide good working conditions for employees, be a good steward of the environment, and actively work to better the quality of life in the localcommunities where it operates and in society at large.
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Which of the following is NOT generally on a company’s menu of actions to consider in crafting a strategyof social responsibility?
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Actions to look out exclusively for the best interests of its owners, the shareholders.
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Which of the following is NOT something a company should usually consider in crafting a strategy of socialresponsibility?
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Actions to benefit shareholders (such as raising the dividend or boosting the stock price).
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Which of the following should be on a company’s menu of actions to consider in crafting a strategy of socialresponsibility?
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All of these.
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A company’s social responsibility strategy is typically comprised of all but which one of the followingelements?
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Actions to keep the company’s profits at a reasonable and acceptable level to ensure the company’s products/pricing will not be viewed by the general public as obscenely high or exorbitant
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Striving to be socially responsible entails touching such bases as:
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what, if any, actions to take to protect or enhance the environment (beyond what is legally required).
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Good corporate citizens
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pursue discretionary activities that contribute to the betterment of society, especially in areas where government has chosen not to focus its efforts or has fallen short.
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The “triple bottom line” refers to what three performance metrics a company should simultaneously succeedin?
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Economic, social, and environmental
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The three dimensions of performance are often referred to in terms of the “three pillars” and include:
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All of these
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Triple-bottom-line (TBL) reporting is emerging as an important way for companies to:
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make the results of their CSR strategies apparent to stakeholders and for stakeholders to hold companies accountable for their impact on society.
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A company’s environmental sustainability strategy consists of its deliberate actions to:
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operate the business in a manner that saps the longevity of sustainability effects.
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An environmental sustainability strategy consists of a company’s deliberate actions to:
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meet the current needs of customers, suppliers, shareholders, employees, and other stakeholders in amanner that protects the environment, provides for the longevity of natural resources, maintains ecological support systems for future generations, and guards against ultimate endangerment of the planet.
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Which of the following is NOT something a company should consider in crafting an environmentalsustainability strategy?
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Actions to support the Global Environmental Council’s fund, which allocates grants based on a competitive basis.
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The Global Reporting Initiative promotes:
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greater transparency and facilitates benchmarking CSR efforts across firms and industries.
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Which of the following statements regarding a company’s social responsibility and sustainability strategy isFALSE?
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A company is not demonstrating an adequate degree of social responsibility or endeavoring to be amodel corporate citizen unless it spends 5 percent (or more) of pretax profits on social responsibilityinitiatives.
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CSR strategies and environmental sustainability strategies that both provide valuable benefits and fulfillcustomer needs in a superior fashion can lead to competitive advantage:
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All of these
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When a company’s social responsibility initiatives become part of the way it operates its business every day,these initiatives are:
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likely to be fully effective in creating a competitive advantage.
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The moral case for why a company should actively promote the betterment of society and act in a mannerbenefitting all its stakeholders:
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boils down to “it’s the right thing to do.”
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Which one of the following is NOT part of the moral case for why a company should actively promote thebetterment of society?
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Acting in a socially responsible manner is in the overall best interest of shareholders.
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The business case for why companies should act in a socially responsible manner includes such reasons as:
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it generates internal operating benefits (as concerns employee recruiting, workforce retention, employee morale, and training costs).
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The business case for CSR and environmentally sustainable business practices suggests such actions can:
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All of These
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Which one of the following is NOT a part of the business case for why companies should act in a sociallyresponsible manner?
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Every business has a moral duty to be a good corporate citizen.
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Which one of the following is FALSE as it concerns the merits of why acting in a socially responsiblemanner is good business?
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Acting in a socially responsible manner nearly always results in higher profits and a higher stock price for shareholders.
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Once company managers have decided on a strategy, the emphasis turns to:
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converting the strategy into specific actions and behaviors and delivering good results.
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The approach to identifying the items needed to be placed on management’s action agenda of the strategyexecution plan, always involves:
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senior management’s judgment about how to proceed in light of prevailing circumstances
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Good strategy execution requires:
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a team effort with all managers having strategy executing responsibility in their areas of authority, and making all employees active participants in the strategy execution process.
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Which of the following is NOT among the principal managerial components of the strategy executionprocess?
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Deciding which core competencies and value chain activities to leave as is and which ones to overhaul and improve
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The principal managerial components of the strategy execution process include which of the following?
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Instituting policies and procedures that facilitate strategy execution and tying rewards and incentives to the achievement of strategic and financial targets.
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Which of the following is NOT among the principal managerial components of the strategy executionprocess?
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Selecting and retaining capable employees, thereby enhancing the company’s intellectual capital resources
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In formulating an action agenda to implement and execute a new or different strategy, the place for managersto begin is with:
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a probing assessment of what the organization must do differently and better to carry out the strategy successfully.
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When strategies fail, it is often because of:
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poor execution of the strategy
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The two best signs of good strategy execution are:
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whether the company is meeting or beating its performance targets and whether they are performing value chain activities in a manner that is conducive to companywide operating excellence.
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The most important leadership trait in the strategy execution process is:
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a strong, confident sense of what to do and how to do it.
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Executing strategy is a make-things-happen task that tests a manager’s ability to:
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All of these.
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Which one of the following statements falsely characterizes the managerial task of executing strategy?
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Implementing new strategic initiatives principally involves employing managerial techniques to overcome resistance to change.
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What makes the managerial task of executing strategy so challenging and demanding is:
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the demanding people-management skills required, the resistance to change that has to be overcome, and the perseverance necessary to get a variety of initiatives launched and kept moving along
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Which of the following statements about implementing and executing a new strategy is true?
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Executing strategy is a job for a company’s whole management team, not just a few senior managers. Moreover, all company personnel are actively involved in the strategy execution process.
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Ultimate responsibility for seeing that strategy is executed successfully primarily falls upon the shoulders of:
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a company’s chief executive officer, its chief operating officer, and the heads of major units (business divisions, functional departments, and key operating units).
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While ultimate responsibility for implementing and executing strategy falls upon the shoulders of seniorexecutives:
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top-level managers still have to rely on the active support and cooperation of middle and lower-levelmanagers in pushing needed changes in functional areas and operating units.
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Implementing and executing a company’s strategy:
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is a task for every manager and the whole management team, but ultimate responsibility for success or failure falls upon the top senior executives, especially the chief executive officer of the company.
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Management’s handling of the strategy implementation/execution process can be considered successful:
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if and when the company meets or beats its performance targets and shows good progress in achieving its strategic vision for the company.
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The three components of building a capable organization are:
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staffing the organization, acquiring, developing, and strengthening key resources and competitive capabilities, and structuring the organization and work effort.
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Building an organization capable of good strategy execution entails:
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staffing the organization, acquiring, developing, and strengthening key resources and competitive capabilities, and structuring the organization and work effort.
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Putting together a capable top management team with the right mix of experiences, skills, and abilities:
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entails filling key managerial slots with smart people who are clear thinkers, good at figuring out what needs to be done, and who are skilled in “making it happen” and delivering good results.
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Which of the following is one of the first steps to take in launching the strategy execution process?
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Put together a talented management team with the right mix of experiences, skills, and abilities to get things done.
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The paramount aim in building a management team should be to:
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assemble a critical mass of talented managers who can function as agents of change, work well together as a team, and produce organizational results that are dramatically better than what one or two star managers acting individually can achieve.
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Recruiting and retaining capable employees:
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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 improvements that lead to operating excellence.
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Which one of the following statements about recruiting and retaining capable employees is false?
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Recruiting and retaining capable employees are usually much more important to good strategy execution and the achievement of true operating excellence than is assembling a capable top management team.
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Which of the following is generally NOT among the common practices that companies use to staff jobs withtalented people, particularly if intellectual capital greatly aids good strategy execution?
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Eliminating the bottom 10 percent of the lowest-performing employees each year to increase the overall quality performance metrics to above-average industry standards.
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In companies where intellectual capital is crucial to good strategy execution, which of the following isgenerally NOT among the practices companies use to establish a talented knowledge base?
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Coaching average performers to improve their skills and capabilities, while weeding out underperformers and benchwarmers.
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Good strategy execution requires which of the following?
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Putting those resources and capabilities into place, strengthening them as needed, and then modifying them as market conditions evolve.
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A dynamic capability:
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is the ongoing capacity to modify existing resources and capabilities to create new ones.
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The most common approaches to capability building include
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Internal development.
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The capability building process
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requires two things: (1) developing the ability to do something, however imperfectly or inefficiently, and (2) molding these efforts into an organizational ability and as experience grows and personnelperform the activity consistently well and at an acceptable cost, it is transformed into a tried-and-truecompetence and as they continue to polish and refine their know-how into further improvements, theythen create a real competitive capability.
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The capability-building process:
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requires two things: (1) developing the ability to do something, however imperfectly or inefficiently, and (2) molding these efforts into an organizational ability and as experience grows and personnelperform the activity consistently well and at an acceptable cost, it is transformed into a tried-and-truecompetence and as they continue to polish and refine their know-how into further improvements, theythen create a real competitive capability
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Core competencies and competitive capabilities:
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are usually bundles of skills and know-how that most often grow out of the collaborative efforts of cross- functional work groups and departments performing complementary activities at different locations in a firm’s value chain.
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Which of the following is NOT one of the traits of the capability building process?
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Core competencies or capabilities are usually the product of astute company efforts to hire and train talented employees.
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The traits of the capability building process involve which of the following?
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All of these
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Which of the following statements about developing organizational competencies and capabilities is false?
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Building organizational capabilities is best and most cost-effectively accomplished by hiring a cadreof people with the right talent and expertise, putting them together in a single work group, and thenteaming the work group with key strategic allies/partners to mesh the skills, expertise, and competencies needed to perform the desired capabilities with some proficiency.
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Which of the following is NOT one of the traits of core competencies and/or competitive capabilities?
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Core competencies generally grow out of company efforts to master a strategy-critical technology or to invent and patent a valuable technology.
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How do firms leverage the expertise of their talent pool in building capabilities?
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Generally by augmenting or recombining well-established capabilities with existing resources
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Managerial actions to develop core competencies and competitive capabilities internally generally take oneof two forms. What are they?
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Either strengthening the company’s base of skills, knowledge, and experience or coordinating and integrating the efforts of various work groups and departments.
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Which of the following is NOT accurate as concerns a company’s competencies and capabilities?
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When a company succeeds in hiring talented employees and training them properly, competencies and capabilities tend to develop quickly and, once put in place, can last for a decade or more.
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Sometimes a company can short-circuit the task of building an organizational capability in-house by:
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either acquiring a company that has already developed the capability or else acquiring the desired capability through collaborative efforts with outsiders having the requisite skills, know-how, and expertise.
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What is the advantage of acquiring capabilities through merger and acquisition?
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Speed, since developing new capabilities internally can take many years of effort
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When are capabilities-motivated acquisitions essential?
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When industry conditions, like technology advances are central to growth and rivalry is intense
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In which one of the following instances is the training and retraining of employees likely to make theLEAST important contribution to good strategy execution?
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When the strategy execution effort is based on tried-and-true operating practices that vary little from year to year.
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The strategic importance of deliberately trying to develop organizational competencies and capabilities is:
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improved strategy execution and a potential for competitive advantage.
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Accessing capabilities through an external source can be accomplished through:
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All of these
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When it is difficult or impossible to out-strategize rivals (beat them with a superior strategy), the other mainavenue to competitive advantage is to:
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out execute them (beat them by performing certain value chain activities in superior fashion).
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Superior strategy execution capabilities are the only source of sustainable competitive advantage:
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All of these
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What is the rule for organizing the work effort to support good strategy execution?
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A firm’s organizational structure should be matched to its unique strategy.
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Organizing a company’s work effort to promote successful strategy execution involves:
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deciding which value chain activities to perform in-house and which to outsource, and making internally performed strategy-critical value chain activities the main building blocks in the organization structure.
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Which one of the following is NOT part of organizing the work effort in ways that promote successfulstrategy execution?
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Determining which functions and organizational units require superior intellectual capital
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To organize the work effort around the needs of good strategy execution, management needs to:
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All of these
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Outsourcing value chain activities has such strategy executing advantages as:
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less internal bureaucracy, speedier decision making, quicker responses to changing market conditions, and heightened focus on performing a select few value chain activities (which can improve performance of those activities).
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When a company uses outsourcing to zero in on even better performance of those truly strategy-criticalactivities where its expertise is most needed, then it may also be able to:
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decrease internal bureaucracies, flatten its organizational structure, shorten the time it takes to respond to changing market conditions, and capitalize on its partnerships with outsiders to enhance its arsenal of capabilities and thus contribute to better strategy execution.
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Which one of the following is NOT a reason why companies might use outsourcing to improve performanceof strategy-critical activities?
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Promoting quick establishment of a total quality culture
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Outsourcing value chain activities to strategic partners can yield such advantages as
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lower costs, less internal bureaucracy, speedier decision making, more flexibility, and heightened strategic focus.
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Outsourcing critics contend that shifting responsibility for performing value chain activities to outsidespecialists:
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can hollow out a company’s knowledge base and capabilities, leaving it at the mercy of outsidersuppliers, and short of the resource strengths to be a master of its own destiny.
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Which one of the following statements about outsourcing the performance of value chain activities to outsidespecialists is false?
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Outsourcing support services often has cost-saving benefits but outsourcing primary value chain activities has the disadvantages of raising fixed costs, reducing variable costs, and making it harder to develop distinctive competencies.
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A firm’s organizational structure is comprised of:
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the formal and informal arrangement of tasks, responsibilities, lines of authority, and reporting relationships by which the firm is administered.
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In order to coordinate and control the complex set of activities, managers must ensure:
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the various parts of the organizational structure are aligned with one another and also matched to the requirements of the strategy.
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The rationale for making strategy-critical value chain activities the primary building blocks in a company’sorganizational scheme is based on:
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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.
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Which of the following is unlikely to be a primary building block in a company’s organizational structure?
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Empowered employee departments
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The primary building blocks within a company’s organizational structure:
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can include process departments, traditional functional departments, geographic organizational units,and divisional units performing one or more major processing steps along the value chain (components manufacture, assembly, distribution), and individual businesses (in the case of a diversified company).
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Which of the following details the standard type of structural form of organization?
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All of these
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When an organization is referred to as a line and staff structure or a flat structure, it is normally considered:
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a simple structure.
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A functional structure or unitary structure (or U-forms as they are sometimes called) are organized:
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into functional departments, with departmental managers who report to the CEO and small corporatestaff.
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A multidivisional structure consists of:
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a decentralized structure consisting of a set of operating divisions organized along business, product, customer groups or geographic lines, and a central corporate headquarters that allocates resources, provides support functions, and monitors divisional activities.
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What is the name of a structure that combines two or more organizational forms, with multiple reportingrelationships, and that is used to foster cross-unit collaboration?
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Composite structure
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Larger firms with more complex organizational structures are:
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more decentralized in their decision making than smaller firms.
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In a highly centralized organizational structure:
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All of these
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Which one of the following falsely characterizes a centralized organizational structure?
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A company that draws on the combined intellectual capital of its people can outperform a company that relies on command-and-control hierarchal structure.
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A disadvantage of the centralized organization is:
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All of these
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A decentralized organizational structure is predicated on the belief that:
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decision-making authority should be pushed down to the lowest organizational level capable of making timely, informed, and competent decisions.
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A decentralized organizational structure is predicated on the belief that:
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decision-making authority should be put in the hands of the people closest to and most familiar with the situation, and these people should be trained to exercise good judgment.
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The disadvantages of a centralized organizational structure include:
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lengthening response times and discouraging lower-level managers and rank-and-file employees from exercising initiative.
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The chief disadvantages of a decentralized organizational structure include:
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putting the organization at risk if empowered employees happen to make many “bad” decisions, especially if higher-level management is unaware of their actions.
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Which of the following is NOT one of the chief advantages of a decentralized organizational structure?
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It makes it easy to fix accountability when company performance targets are not met and cross-business strategic fits are loosely applied.
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The chief advantages of a decentralized organizational structure include:
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reducing the layers of management and encouraging lower-level managers and rank-and-file employees to exercise initiative and act responsibly.
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Delegating greater authority to subordinate managers and employees:
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creates a more horizontal or flatter organizational structure with fewer management layers and usually acts to shorten organizational response times.
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The organizing challenge of a decentralized structure which stresses employee empowerment is:
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how to exercise control over the actions and decisions of empowered employees so that the business is not put at risk while trying to capture the benefits of empowerment.
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The classic way to coordinate the work efforts of internal organization units is to:
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have closely related activities report to a single executive who has the authority and organizational clout to coordinate, integrate, and arrange for the cooperation of units under their supervision.
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One of the big weaknesses of organization structures that do not have cross-business collaboration is:
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that pieces of strategically relevant activities and capabilities often end up scattered across many departments, with each pursuing its own priorities, projects, and agendas.
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Diversified companies striving to capture the benefits of synergy between separate businesses have to beaware of many challenges, EXCEPT:
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forming cross-business strategic fit by enforcing close collaboration.
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Building organizational bridges with external allies is aided by:
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appointing “relationship managers” and giving them responsibility for making particular strategic partnerships or alliances generate the intended benefits.
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A well-managed network structure typically includes one firm in a more central role, with:
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All of these
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The organizational characteristics of a network structure include:
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All of these
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Which one of the following must a company do to match structure to strategy?
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All of these
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CH 11
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CH 11- you should have told me
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Managers charged with implementing and executing strategy need to be deeply involved in the budgetingand resource allocation process because:
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All of these
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From a strategy-implementing/strategy-executing perspective, operating budget allocations should:
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be strategy-driven and be based on how much each organizational unit needs to carry out its piece of the strategic plan efficiently and effectively.
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New strategies often entail budget reallocations because:
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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 mayneed more people, new equipment, additional facilities, and above-average increases in their operatingbudgets.
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Visible actions to reallocate operating funds and move people into different and new organizational units:
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signal a determined commitment to strategic change and can help catalyze and give credibility to the implementation process.
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A company’s operating budget must be both:
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strategy-driven in order to amply fund the performance of key value chain activities and lean in order to operate as cost effectively as possible.
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Merely fine-tuning the execution of a company’s existing strategy normally requires that companies embrace:
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trimming costs and shifting resources to activities that have a higher priority.
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In what ways do well-conceived policies and operating procedures facilitate strategy execution?
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All of these
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Prescribing policies and operating procedures aids the task of implementing strategy by:
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placing limits on ineffective independent action. They also channel efforts of individuals along a path more conducive to good strategy execution and operating excellence.
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Prescribing new policies and operating procedures can aid the task of implementing strategy:
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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.
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A useful guideline in designing strategy-facilitating policies and operating procedures is:
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to prescribe enough policies to give organizational members clear direction in implementing strategyand to place reasonable boundaries on their actions. This then empowers them to act within these boundaries in pursuit of company goals.
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WhichoneofthefollowingisNOTabenefitofprescribingpoliciesandoperatingprocedurestoaidmanage-ment’s task of implementing strategy?
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Helping build employee commitment to adopting best practices and using the tools of TQM and Six Sigma
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What do companies need to do (in prescribing policies and procedures) to promote the creation of a favorablework climate that facilitates independent action on the part of empowered employees for good strategyexecution?
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All of these
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Company managers can significantly advance the cause of superior strategy execution by doing all of thefollowing, EXCEPT:
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instituting operating practices that generate economies of scale and scope with current value chain activities.
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A “best practice” refers to:
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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.
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A “best practice”:
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is 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.
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The idea behind benchmarking and best practices is to:
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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.
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The backbone of the process of identifying, studying, and implementing best practices is:
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benchmarking.
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Which one of the following is NOT a tool that company managers can use to promote operating excellencein performing value chain activities?
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Adopt standard industry techniques.
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Which of the following is NOT a tool that managers can use to promote operating excellence and further thecause of good strategy execution?
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Strategic resource training
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Because functional organization structures often result in pieces of strategically relevant activities andcapabilities being scattered across many different functional departments, companies have found that:
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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.
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Business process reengineering is a tool for:
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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 singledepartment or cross-functional work group that is in charge of the whole process, with the intent ofachieving quantum improvements in performance.
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Reengineering how a firm performs a business process:
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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 wholeprocess and can be held accountable for performing the activity in a cheaper, better, and/or more stra-tegy-supportive fashion.
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Total quality management (TQM):
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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 percentaccuracy in performing tasks (zero defects), involvement and empowerment of employees at all levels,team-based work design, benchmarking, and total customer satisfaction.
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Total quality management (TQM) emphasizes all but which one of the following?
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Adoption of industry standard operating practices
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Total quality management (TQM) programs:
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entail creating a corporate culture bent on continuously improving the performance of every task and every value chain activity.
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Which one of the following statements about total quality management (TQM) is false?
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TQM produces significant results very quickly, with very little benefit emerging after the first six months.
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Six Sigma programs:
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utilize advanced statistical methods to improve quality by reducing defects and variability in the performance of business processes.
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Six Sigma quality control:
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consists of a disciplined, statistics-based system aimed at producing not more than 3.4 defects per million iterations for any business process.
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Six Sigma processes:
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can be used for both improving existing business processes and for developing new processes or products.
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The Six Sigma process of define, measure, analyze, improve, and control (DMAIC) is:
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an improvement system for existing processes falling below specification and needing incremental improvement.
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Six Sigma’s DMADV process of define, measure, analyze, design, and verify is a particularly good vehiclefor:
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developing new processes or products at Six Sigma quality levels.
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The statistical thinking underlying Six Sigma is based on the following three principles:
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All work is a process, all processes have variability, and all processes create data that explains variability.
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Which one of the following statements about Six Sigma quality programs is true?
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While Six Sigma programs often improve the efficiency of numerous operating processes, there is evidence that the approach can stifle innovative activities.
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A company that successfully and methodically applies Six Sigma methods to its value chain, activity byactivity, can:
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make major strides in improving the proficiency with which its strategy is executed without sacrificing innovation.
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An ambidextrous organization is one that:
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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.
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The big difference between business process reengineering and continuous improvement programs likeTQM or Six Sigma is that:
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reengineering is a tool for achieving one-time quantum improvement, whereas TQM and Six Sigma programs aim at ongoing incremental improvement.
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To obtain maximum benefits from benchmarking, best practices, reengineering, TQM, and Six Sigmaprograms aimed at facilitating better strategy execution, managers need to:
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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.
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Without a strategic framework, managers lack the context in which:
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to fix things that really matter to business-unit performance and competitive success.
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To build a total quality culture and achieve full value from the use of TQM or Six Sigma initiatives, managerscan take such action steps as:
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signaling unequivocal and unyielding commitment to total quality, continuous improvement, and operating excellence; encouraging quality-supportive behaviors on the part of employees, empoweringemployees to make changes to improve quality; and using online systems to give employees immediateaccess to best practice information and experiences.
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Althoughitisrelativelyeasyforrivalstoimplementprocessmanagementtools,itismuchmoredifficultandtime-consuming for them to:
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instill a deeply ingrained culture of operating excellence.
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Installing well-conceived, state-of-the-art support systems is an important managerial component ofimplementing and executing strategy because:
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such support systems not only enable better strategy execution but also strengthen organizational capabilities (perhaps enough to provide a competitive edge over rivals).
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Well-conceived, state-of-the-art information and operating systems:
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not only enable better strategy execution but also strengthen organizational capabilities (perhaps enough to provide a competitive edge over rivals).
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The broad areas that internal information business systems need to cover include:
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All of the above
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The areas that information systems need to cover include all but which one of the following?
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Corporate culture data
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Information systems provide managers with a means for:
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All of these.
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Which of the following is not integral to superior strategy execution and operating excellence?
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These are all integral pieces of the process of managing strategy execution and overseeing operations.
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Which of the following is NOT a way in which managers can monitor the operating performance ofemployees to ensure superior strategy execution?
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Leaving empowered employees to meet performance standards and guidelines
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Management’s most powerful tool for mobilizing organizational commitment to competent strategyexecution and operating excellence is the:
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proper use of a reward structure with motivational incentives and rewards.
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Management’s most powerful tool for winning employee commitment to good strategy execution andoperating excellence is:
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a structure of rewards and incentives tied tightly to the achievement of the organization’s strategic priorities.
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The strategic role of a company’s reward system is to:
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enlist employees’ commitment to successful strategy execution and operating excellence by rewarding them, both monetarily and non-monetarily, for their valuable contributions.
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Reward and incentive systems serve as:
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an indirect type of control mechanism that conserves on more costly control mechanisms of supervisory oversight.
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Enlisting employees’ sustained and energetic commitment to good strategy execution and achievement ofthe strategic priorities and financial objectives is best done by:
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resourceful and effective use of motivational incentives, both monetary and non-monetary
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In trying to gain employees’ wholehearted commitment to good strategy execution and operating excellence,managers are well advised to use such incentives as:
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All of these
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Which one of the following is NOT likely to be effective in trying to gain employees’ wholeheartedcommitment to good strategy execution and operating excellence?
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Adopting aggressive management efforts to eliminate stress, anxiety, and job insecurity from the work environment
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A motivation and incentive system that is aimed at spurring stronger employee commitment to good strategyexecution:
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should focus on incorporating more positive than negative motivational elements.
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From the standpoint of promoting successful strategy execution, it is important that the firm’s motivationand reward system:
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accentuate positive rewards but also carry the risk of an “up-or-out” policy for performance that does not meet expectations.
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A reward system that accentuates positive rewards for good performance:
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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.
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A no-pressure/no-adverse-consequences work environment does not necessarily lead to:
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None of these, because it depends on the organization’s motivational approaches.
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To create a strategy-supportive system of rewards and incentives, a company must:
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reward people for accomplishing results, not just for dutifully performing assigned tasks.
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Motivational and incentive compensation practices that aim at winning the commitment of companypersonnel to good strategy execution typically:
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entail decidedly positive rewards for meeting or beating performance targets, but also impose sufficiently negative consequences when actual performance falls short of the target.
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The first principle in designing an effective compensation system and the most dependable way to keeppeople focused on strategy execution and the achievement of performance targets is to:
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generously reward and recognize people who meet or beat performance targets and to deny rewards and recognition to those who don’t.
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A well-designed reward system:
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ties rewards to performance outcomes directly linked to good strategy execution and the achievement of financial and strategic objectives.
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An important consideration in designing a strategy-supportive reward system is to:
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make non-monetary rewards and recognition an integral part of the reward system.
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The guidelines for designing an incentive compensation system that will help drive successful strategyexecution include:
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making the performance payoff tiered, based on the actual performance level achieved (that is, for meeting or beating performance targets a major, not minor, piece of the total compensation package).
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Which of the following is NOT a sound guideline for designing a reward and incentive system that helpspromote good strategy execution?
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The reward system must reward non-performers who, despite expending tremendous effort, have not fared well in achieving the benchmarks under the incentive system.
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Which of the following is NOT characteristic of a compensation and reward system designed to help drivesuccessful strategy execution?
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A reward system that involves high (say 50 percent of base salary) non-monetary rewards and a work environment that avoids placing pressure on managers and employees to perform at high levels
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The resolute standard for judging whether individuals, teams, and organizational units have done a good jobmust be measured by:
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whether they meet or beat performance targets that reflect good strategy execution.
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None for little guy
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You did it to yourself
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