Crafting and Executing Strategy, 22e (Thompson)
Chapter 12 Corporate Culture and Leadership
1) Why is a company’s corporate culture important?
A) It represents the integration of the strategy and business model that a company has adopted.
B) It influences the organization’s actions and approaches to conducting business.
C) It guides core values and its internal code of ethics.
D) It influences the dedication to ethical conduct and accepted work practices.
E) It codifies formal traditions that company executives are committed to maintaining to ensure
the company’s strategy-supportive culture is change resistant.
2) Apple Inc.’s corporate culture is a product of all of the following EXCEPT
A) the shared values and core business principles and beliefs that management preaches and
practices.
B) its standards of what is ethically acceptable and what is not and the stories that get told over
and over to illustrate and reinforce the company’s shared values, business practices, and
traditions.
C) the company’s approach to people management and the “chemistry” and “personality” that
permeates its work environment.
D) the work practices and behaviors that define “how we do things around here.”
E) its lack of mechanisms for aligning, constraining, and regulating the actions, decisions, and
behaviors of company personnel.
3) A company’s culture does NOT specifically mention
A) the work practices and behaviors that define “how we do things around here.”
B) the company’s standard of what is ethically acceptable and what is not, along with the
“chemistry” and “personality” that permeates its work environment.
C) the core values and business principles that management preaches and practices.
D) the company’s strategic vision, strategic intent, and culture strategy.
E) the legends and stories that people repeat to illustrate and reinforce the company’s core values,
traditions, and business practices.
4) A company’s culture is in part defined and identified by
A) its internal work climate and personality—as shaped by its shared values, work practices,
traditions, and ingrained attitudes and behaviors that define “how we do things around here.”
B) whether it employs a low-cost provider, best-cost provider, differentiation, or focused
strategy.
C) whether decision-making is centralized or decentralized and whether it is a single-business
company or a diversified company.
D) how strongly its strategic vision is linked to its core values.
E) whether it is a well-known industry leader, an up-and-coming company that is gaining market
share, a middle-of-the-pack company unlikely to move up in the industry ranks, or an industry
also-ran that may or may not survive.
5) A company’s culture is NOT indicative of
A) its company psyche and organizational DNA.
B) its self-replicating operating system that defines how things are done.
C) its core competencies and capabilities along the value chain.
D) company traditions and stories that exemplify behavioral norms.
E) accepted work practices that are held in high esteem.
6) You are considering employment opportunities after graduation. What would you be
UNLIKELY to seek out in identifying a prospective employer’s company’s culture?
A) the company’s defined spirit and character that pervades the work climate
B) the company’s resource strengths, core competencies, and competitive capabilities
C) the company’s revered traditions and oft-repeated stories about “heroic acts” and “how we do
things around here”
D) the company’s approach to people management and the official policies, procedures, and
operating practices that paint the white lines for the behavior of company personnel
E) the company’s shared values, business principles, and ethical standards that management
preaches and practices
7) You are considering employment opportunities after graduation. What would you look for in
identifying a prospective employer’s company’s culture?
A) the atmosphere, spirit and character that pervades the work climate and the values, business
principles, and ethical standards that management preaches and practices
B) the track record in meeting or beating its financial and strategic performance targets
C) the intensity and makeup of the company’s value chain
D) the strategic intent and competitive strategy inherent within the company’s efforts for
successful strategy execution
E) the resource strengths, core competencies, and competitive capabilities that permeate the
organization
8) The characterization of these companies’ corporate cultures are all correct EXCEPT
A) W. L. Gore’s culture promotes multidiscipline teams to organize around opportunities and in
the process leaders emerge.
B) Walmart’s culture encourages the zealous pursuit of low costs and frugal operating practices.
C) Nordstrom’s corporate culture is centered on delivering exceptional service to customers.
D) Apple’s employee-centric culture fosters openness and sharing of company-developed
technology.
E) Epic Systems’ corporate culture is based on the slogan “Do good. Have fun. Make money.”
9) A company’s value statement and code of ethics
A) help to mold the culture and communicate what kinds of actions and behaviors are expected
of all company personnel.
B) help prevent it from coming across to customers and the general public as greedy.
C) serve the valuable purpose of making its suppliers hesitant to engage in business practices that
are unethical.
D) are the most important factors determining its reputation with customers, suppliers,
employees, shareholders, and society at large.
E) should always be made a prominent and visible part of the company’s strategic intent and
strategy.
10) Many executives want the work climate at their companies to mirror certain values and
ethical standards because they
A) desire validation of the company’s formal values statement and code of ethics.
B) want to impress outsiders and create a positive company image.
C) want to increase the likelihood that the public will ignore any future lapses in approved
behavior.
D) are committed to improving the company’s strategy execution, performance, and reputation.
E) are certain that their company’s strategic intent and strategy execution efforts will come to
naught without those values and standards.
11) A corporate culture founded on ethical business principles and socially approved values
A) virtually guarantees that a company will be (or soon become) the acknowledged industry
leader because of the ethical and socially approved manner in which its business is being
conducted.
B) doesn’t necessarily impact a company’s long-term strategic success favorably or unfavorably.
C) does more to detract from a company’s chances for strategic success and market leadership
than to help it.
D) is a positive force underlying a company’s long-term financial success and reduces the
likelihood of lapses in ethical and socially approved behavior that can damage the company’s
reputation.
E) is seldom more than window-dressing and is generally regarded by customers, suppliers,
employees, shareholders, and society at large as nothing more than good public relations.
12) The two culture-building roles of a company’s stated values and ethical standards are to
A) communicate the company’s good intentions and establish a corporate conscience.
B) confirm the integrity of company personnel and signal the above-board nature of the
company’s business principles and operating methods.
C) steer company personnel toward doing the right thing and convince outsiders that the
company is socially responsible.
D) foster a work climate where company personnel share common and strongly held convictions
about how the company’s business is to be conducted and to provide them with guidance about
how to do their jobs, steering them toward both doing things right and doing the right things.
E) provide a basis for designing culture-supportive incentive compensation plans and reinforcing
the appropriateness of particular ethical and moral actions.
13) Codes of ethics and statements of core values
A) are the single most effective measure of enforcing ethical behavior and cultural norms,
provided they are written down and every employee is given a copy.
B) serve as yardsticks for gauging the appropriateness of particular actions, decisions, and
behaviors.
C) serve as the best benchmarks for judging whether the corporate culture is deeply ingrained,
planted and accepted or not.
D) need to be personally written and presented by the CEO to reinforce the company values and
convictions so that employees will take it seriously.
E) serve to give top-priority emphasis to every employee in training programs a company
conducts.
14) Imagine that you have been tasked with developing a list of your company’s core values.
What would likely NOT be a core value that you would put on your list?
A) a commitment to having fun and creating a fun work environment
B) a commitment to operating excellence and superior results
C) mandating full compliance with all laws and regulations
D) exhibiting such qualities as integrity, fairness, trustworthiness, pride of workmanship, respect
for co-workers, and ethical behavior
E) exhibiting teamwork and cooperative attitudes
15) Epic Systems’ code of ethics does NOT include
A) prohibiting giving or accepting bribes, kickbacks, or gifts.
B) expecting all company personnel to display honesty and integrity in their actions and avoid
conflicts of interest.
C) barring dealing with suppliers that employ child labor or engage in other unsavory practices.
D) committing to a no-layoff policy and to adequate funding of employee retirement programs.
E) avoiding use of company assets, resources, and property for personal or other inappropriate
purposes.
16) A company’s stated core values and ethical principles are
A) important because of their role in ensuring that company executives will not engage in
unethical behavior or behave in a manner that is contrary to the company’s core values.
B) typically tightly linked to its strategic vision and strategy.
C) the best indicators of a company’s social responsibility strategy.
D) meant to foster a work climate where company personnel share common and strongly held
convictions about how the company’s business is to be conducted and provide guidance in
displaying the core values in their actions and behaviors.
E) strictly enforced in strong culture companies and weakly enforced in weak culture companies.
17) Companies employ various techniques to embed core values and ethical standards EXCEPT
A) incorporating the statement of values and the code of ethics into orientation programs for new
employees and training courses for managers and employees.
B) making the display of core values and ethical principles a factor in evaluating each person’s
job performance.
C) encouraging everyone to use their influence in helping enforce observance of core values and
ethical standards.
D) using ceremonial occasions to recognize individuals and groups who display the values and
ethical principles.
E) instituting standard practices and procedures for employees to follow as a foundation for
maintaining ethical and cultural norm conflict clashes and behavioral lapses.
18) Once values and ethical standards have been formally adopted, a company must
A) require every employee to memorize the company’s formal statement of core values and code
of ethics.
B) make it unequivocally clear that the company’s core values and ethical standards are strictly
enforced cultural norms.
C) rely only on word-of-mouth indoctrination and company tradition to instill values and ethical
conduct.
D) grant compensation increases and promotions only to those managers who are willing to act
as evangelists for the company’s core values and ethical standards.
E) hold periodic ceremonies to vilify employees that do not live up to the company’s core values
or who are found guilty of violating the company’s code of ethics.
19) Transforming core values and ethical standards into cultural norms NEVER involves
A) instituting procedures for enforcing ethical standards.
B) immediately dismissing any employee caught violating the company’s code of ethics or
disregarding core values.
C) screening out job applicants who do not exhibit compatible character traits.
D) periodically having ceremonial occasions to recognize individuals and groups who display the
values and ethical principles.
E) having senior executives frequently reiterate the importance and role of company values and
ethical principles at company events and internal communications to employees.
20) The retelling of legendary stories does a lot for establishing a company’s core values, but it
should NOT
A) place pressure on company personnel to display core values and to do their part in keeping
the companies traditions alive.
B) illustrate the kind of behavior the company reveres.
C) inspire company personnel to perform similarly and reinforce the depth of commitment that
people have displayed.
D) reflect an aspect of company culture no longer current.
E) steer company personnel toward both doing things right and doing the right thing.
21) Epic Systems’ stated values and ethical standards impact its corporate culture in all of the
following ways EXCEPT
A) communicating the company’s good intentions.
B) validating the integrity and above-board nature of the company’s business principles and
operating methods.
C) steering company personnel toward both doing things right and doing the right thing.
D) establishing a corporate conscience.
E) identifying how best to adapt to changing market conditions.
22) Company folktales and stories frequently
A) articulate a company’s strategic vision and strategic intent.
B) capture a significant part of a company’s culture.
C) are indicative of a company’s openness in sharing its financial performance and strategic plan
with all staff members.
D) mirror formal documentation about what are a company’s best practices and performance
benchmarks.
E) document troublesome customers who return products or who encounter problems with
deliveries.
23) Once established, company cultures can be perpetuated by
A) relying on word-of-mouth indoctrination and the power of tradition to instill the culture’s
fundamentals, as well as frequent reiteration of core values by senior managers and group
members, and regular ceremonies honoring members who display desired cultural behaviors.
B) avoiding frequent or dramatic reorganizations that could disturb existing relationships and
networking among departments and company personnel.
C) making adherence to cultural beliefs and cultural norms the defining features of the
company’s strategic vision.
D) rewarding departments that observe cultural norms with above-average budget increases and
penalizing those who don’t with budget cuts.
E) making cultural values and beliefs the centerpiece of the company’s competitive strategy.