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chapter 9
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Indicate whether the statement is true or false.
1. A key output metric for some global businesses is market share, or the percentage of the business in a certain
market that is captured by a product or service the organization provides.
a.
True
b.
False
2. When R&D discoveries in the United States operations of Anadarko Petroleum Corporation can easily be
communicated to and accepted by its operations in Ghana, it is an example of Anadarko's absorptive capacity.
a.
True
b.
False
3. The plan for ABC International to build and open a textile manufacturing plant in China within the next two-
and-one-half years would be an example of an operational plan.
a.
True
b.
False
4. The president of a small company makes a point to touch base with every employee each day; this is an
example of an interpersonal control.
a.
True
b.
False
5. Hershey Corporation has expanded and extended its business by developing new products and increasing
global reach, but has done so in a very careful manner, avoiding undue risks and protecting its existing business
operations. For this reason, it would fall into the category of an analyzer.
a.
True
b.
False
6. Tacit knowledge is easier to communicate than explicit knowledge.
a.
True
b.
False
7. A financial budget is a perfect example of an output control.
a.
True
b.
False
8. Target Corporation is often accused of being a defender in terms of its market strategies and strategic
implementation.
a.
True
b.
False
9. Organizational culture can be a very effective control mechanism for an organization, particularly when the
norms of a given business’s culture are fully accepted by that organization’s workforce.
a.
True
b.
False
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10. The stakeholder model of strategy formulation believes businesses exist to benefit not just their
shareholders, but also all the various groups that have a meaningful stake in their operations. Such groups, for
example, might include a company’s employees, customers, and the community where it operates.
a.
True
b.
False
11. CEOs who rise internally within the company, but who have followed a nontraditional path to the executive
suite, (e.g.,, Nancy McKinstry, the CEO of Dutch publishing company Wolters Kluwer NV) are referred to as
“outside-insiders.”
a.
True
b.
False
12. Walmart deciding to buy more apparel products from lower-priced Chinese manufacturers (rather than from
somewhat more expensive apparel manufacturers in the United States) during the next six months is an example
of an operational plan.
a.
True
b.
False
13. Smithfield Foods Company, the world’s largest pork producer, has set the clear organizational goal of
getting 10 cents profit for each pound of its processed pork products that is sold. This is an example of an output
control and measurement.
a.
True
b.
False
14. For global companies that take more of a "shareholder" approach to strategy formation, corporate social
responsibility (CSR) ir probably the most important output control of all.
a.
True
b.
False
15. Organizational change in a business is almost always most effective when pushed from the bottom by the
company’s rank-and-file employees.
a.
True
b.
False
Indicate the answer choice that best completes the statement or answers the question.
16. Companies that are _____ take a middle ground between being prospectors and defenders.
a.
neutrals
b.
maintainers
c.
reactors
d.
analyzers
e.
coordinators
17. An organizational initiative that aims to limit defects or problems to 3.4 per million is a(n)
a.
absorptive capacity.
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b.
bureaucratic control.
c.
growth measurement.
d.
interpersonal control.
e.
Six Sigma initiative.
18. A lamp manufacturing company has a written, ten-step process that describes how to put together its best-
selling table lamp. This is an example of _____.
a.
tacit knowledge
b.
explicit knowledge
c.
absorptive capacity
d.
working capacity
e.
stored capacity
19. A(n) _____ plan for Best Buy might be to build and open 50 new stores in the United States and Canada
within the next two-and-one-half years.
a.
reactionary
b.
standing
c.
strategic
d.
tactical
e.
operational
20. Former General Electric CEO Jack Welch was well known for regularly meeting one-on-one with all senior
managers and business unit heads. Welch was practicing _____ control.
a.
interpersonal
b.
intrapersonal
c.
bureaucratic
d.
output
e.
input
21. Las Vegas hotelier MGM Mirage recently spent $8.5 billion on a new resort that adds almost 5,000 new
rooms to a market that some argue is already saturated. Which of the following output controls and
measurement is MGM Mirage using?
a.
Profits
b.
Employee turnover
c.
Growth
d.
Productivity
e.
Market share
22. Starbucks Corporation takes more of a _____ approach toward strategy formulation.
a.
customer-based
b.
stakeholder
c.
profit-oriented
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d.
shareholder
e.
utilitarian
23. Altria Group, Inc., may feel that the importance of “fiscal discipline” in its stated mission mandates that it
reduce its operations and concentrate upon making its existing U.S.-based Marlboro operations as efficient and
profitable as possible. In short, Altria will be most concerned with maintaining its existing strategic position.
This is an example of Miles and Snows’ _____ typology.
a.
defender
b.
prospector
c.
reactor
d.
analyzer
e.
coordinator
24. An operational plan is
a.
less than one year.
b.
one to three years.
c.
three to five years.
d.
five to seven years.
e.
seven to ten years.
25. A top salesperson "just knows how to sell" but has a difficult time communicating how she does it. Her
ability to sell is an example of _____.
a.
tacit knowledge
b.
explicit knowledge
c.
absorptive capacity
d.
working capacity
e.
stored capacity
26. _____controls involve establishing specific goals given metrics and then measuring to what extent these
goals are being achieved at certain time intervals.
a.
Interpersonal
b.
Intrapersonal
c.
Organic
d.
Output
e.
Input
27. Determining whether to adopt a shareholder or stakeholder orientation is a major ______ for a business.
a.
strategic goal formulation
b.
operational plan
c.
bureaucratic control
d.
tactical plan
e.
Six Sigma initiative
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28. If Dunkin Donuts (DD) were to follow the actions of Starbucks and copy all of their strategies and pricing,
DD could be described as a(n) _____.
a.
defender
b.
prospector
c.
reactor
d.
analyzer
e.
coordinator
29. Knowledge that is codifiable and easy to communicate or write down is called _____ knowledge.
a.
tacit
b.
explicit
c.
absorptive
d.
working
e.
stored
30. To make sure it has enough employees on hand during the busy holiday season, Target plans to hire
thousands of temporary, seasonal help for the final three months of the calendar year. This is an example of a(n)
_____ plan.
a.
intentional
b.
equipped
c.
strategic
d.
tactical
e.
operational
31. For generations there has been a norm of “highest quality in journalism” at the New York Times newspaper.
In this context, the newspaper’s reporters don’t require close supervision to do great journalistic work. This is
an example of the organizational _____ at the New York Times.
a.
culture
b.
background
c.
traditions
d.
customs
e.
mores
32. Of the following, which is NOT true about knowledge management and systems?
a.
The ability of organizations to recognize, assimilate, and apply new knowledge is down is called
absorptive capacity.
b.
Knowledge that is codifiable and easy to communicate or write down is called explicit knowledge.
c.
Traditionally, making necessary transformations of tacit knowledge into explicit knowledge has
presented major challenges for global businesses.
d.
New technologies such as the Internet have aided global businesses absorptive capacity.
e.
Absorptive capacity refers to systems of rules and regulations promulgated within a global business.
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33. In a(n) _______, a global business explains why it exists and what it plans to accomplish.
a.
strategy formulation
b.
mission statement
c.
annual budget
d.
prospectus
e.
code of ethics
34. Organizational_____ involves implementation of a different business or cultural path for an organization.
a.
culture
b.
change
c.
rightsizing
d.
control
e.
downsizing
35. ABC Manufacturing focuses on implementing a basic market strategy of concentrating upon existing
operations and protecting their home turf. ABC can be described as a _____.
a.
defender
b.
prospector
c.
reactor
d.
analyzer
e.
coordinator
36. A rule that all employees in the organization (including the CEO) must fly coach when they travel on
commercial airlines represents a consistent _____ control within an organization.
a.
interpersonal
b.
intrapersonal
c.
bureaucratic
d.
output
e.
input
37. Hershey Corporation has assiduously expanded and extended its business by developing new products and
increasing global reach, but it has done so in a very careful manner, avoiding undue risks and protecting its
existing business operations. This is an example of Miles and Snows’ _____ typology.
a.
defender
b.
prospector
c.
reactor
d.
analyzer
e.
coordinator
38. The large oil exploration company, Anadarko Petroleum Corporation, takes a(n) ______ toward strategy
formulation, placing a very clear emphasis in strategy formulation upon how its business decisions will help
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deliver and ongoing and competitive rate of return to its owners.
a.
supplier
b.
environmental
c.
global
d.
shareholder
e.
stakeholder
39. In the banking industry, a particular bank’s efficiency ratio is a closely monitored metric. If one bank can
achieve a profit of $2 million per year with 90 employees, and another bank needs to employ 200 employees to
achieve the same level of profits, the first bank’s employees are more efficient than the second. Which of the
following output controls and measurement is the banking industry using?
a.
Profits
b.
Quality control
c.
Growth
d.
Productivity
e.
Market share
40. “In everything we do, we’re driven by a common mission: saving people money so they can live better.”
This is an example of Wal-Mart’s _____.
a.
vision statement
b.
mission statement
c.
business plan
d.
flow chart
e.
strategy chart
41. Organizations that have basic strategic implementations involving extending their success through global
expansions and finding new market opportunities are called _____.
a.
defenders
b.
prospectors
c.
reactors
d.
analyzers
e.
coordinators
42. While ______ are the owners of the given business, ______ are individuals or groups that have a vested
interest in the business.
a.
employees; customers
b.
customers; employees
c.
shareholders; stakeholders
d.
employees; shareholders
e.
stakeholders; shareholders
43. Anadarko Petroleum Corporation may decide that the best long-term way to implement its strategic goal of
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providing financial returns to its shareholders could be to explore for oil in other parts of the world where it has
not yet explored, such as Africa. This is an example of Miles and Snows’ _____ typology.
a.
defender
b.
prospector
c.
reactor
d.
analyzer
e.
coordinator
44. A company following a shareholder model of strategy formulation would be MOST focused on its ______.
a.
customers
b.
executives
c.
suppliers
d.
employees
e.
owners
45. One output control measure frequently used by global businesses is productivity or ______.
a.
employee turnover
b.
quality control
c.
maturity
d.
efficiency
e.
market share
Enter the appropriate word(s) to complete the statement.
46. Corporate ______ responsibility is an important output control for many companies intent on "giving back"
to their communities.
47. _______ are one to three year plans formulated for implementing strategic goals.
48. _________ are organizations that have a strategic implementation involving responding to strategic actions
initiated by competitors.
49. Systems of rules and regulations promulgated within a global business are called ______ controls.
50. _________ involves implementation of a different business or cultural path for an organization.
51. Organizations that have a basic strategic implementation involveing extending their success through global
expansion, and finding new market opportunities are referred to as _______.
52. ________ refers to the ability of organizations to recognize, assimilate and apply new knowledge.
53. Goals relating to profits, growth, productivity, and market share are all types of ______ controls.
54. The _______ model of strategy formulation operates from the premise that the key strategic purpose of a
business is to maximize financial returns for its owners.
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55. Knowledge that is informal in nature and difficult to communicate is known as _____ knowledge.
56. In meeting its strategic goals, Keegan Enterprises plans to buy trailer hitches manufactured in Croatia over
the next six months. This business idea is best identified as which one of the following?
a.
An operational plan
b.
A business strategy
c.
A demonstration of organizational change
d.
A reactor formulation
e.
A tactical plan
Scenario – Keegan Enterprises
Keegan Enterprises is owned by Stanley Keegan of Wichita, Kansas. Stanley started Keegan Enterprises in
1990 and has watched his company grow to become the second largest producer of van trailers in the
world. Keegan Enterprises earned $60 million in profit last year and currently has over 17,000 workers around
the globe.
In order to achieve its stated mission and goals, Keegan Enterprises has implemented several changes to its
business strategy over the past few years. While accomplishing the necessary changes has not been easy or
without challenge, Keegan Enterprises appears to be stronger and more unified today than ever before. Stanley
Keegan is looking forward to facing future challenges and watching the forward growth of his business. He
would like to see his company in the number one spot as the world’s largest producer of van trailers in the
world.
57. Keegan Enterprises acknowledges it has undertaken changes within the company’s strategy. This
organizational change can involve the implementation of a different business or cultural path for the
organization. Which one of the following is least likely to be true regarding Keegan’s organizational change?
a.
Organizational change is often met with considerable resistance
b.
The most accepted organizational change is led by top management
c.
At times organizational change is better accepted if initiated by an outsider of the
company
d.
Organizational change indicates a company is in serious financial distress
e.
Organizational change can involve both the business strategy and the culture of
the company
Scenario – Blackford Industries, Inc.
Blackford Industries, Inc. was established in 2004 by Jeanna and Sean Blackford. The company produces a
wide array of restaurant equipment and supplies for restaurant owners throughout the United States. This
company has grown substantially year after year since its inception. It attributes its success to having extensive
knowledge of the industry it serves. Both owners have advanced culinary degrees from prestigious colleges and
feel they understand the needs of their clients thoroughly.
Blackford Industries, Inc. is led by clearly defined guidelines established by its owners. The company’s
philosophy is one of caring for and about each customer. Blackford is known for treating each of its employees
as if they were members of their family. Its business practices are honest and trustworthy. The company
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demonstrates its high level of integrity with each of its business dealings.
Sean and Jeanna are currently considering expanding their business into the European marketplace as this
market is fairly unexplored by competitors with American restaurant supplies. They see the vast potential of
this market and are aware of the challenges such a decision presents to them. The decision about the company’s
international expansion will be made by the end of this year.
58. According to Professors Raymond Miles and Charles Snow, under which of their classifications would
Blackford Industries, Inc. must likely fall?
a.
Reactors
b.
Protectionists
c.
Prospectors
d.
Defenders
e.
Challengers
59. Blackford Industries, Inc. realizes that each decision it makes affects may stakeholders of the company. Of
the following, which one is least likely to be considered a stakeholder of the company?
a.
The board members of the competitors
b.
The community the business is located in
c.
The customers of the business
d.
The employees of the business
e.
The suppliers of the business
60. One of the remarkable actions of Blackford Industries, Inc. is the treatment of its employees like
family. Additionally, the fair and honest way this company conducts its business transactions and the way it
respects and treats its customers is most likely a reflection of which one of the following?
a.
Corporate strategy
b.
Organizational culture
c.
Organizational change
d.
Government mandates
e.
Organizational stakeholder’s credo
61. If Keegan Enterprises was characterized as an analyzer by Miles and Snow, which one of the following
would not be true of this company?
a.
Companies that use the analyzer strategy take steps to extend their markets while
avoiding excessive risk
b.
Companies that use the analyzer strategy defend existing operations while taking
steps to extend their markets
c.
Companies recognized as analyzers take a middle ground between being
prospectors and defenders
d.
Companies using an analyzer strategy take extensive risks to expand into global
markets
e.
Strategic implementation using an analyzer strategy can be impeded by legal,
technological, and political challenges
62. Describe how global companies can utilize the various types of control systems.
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63. Describe Miles and Snow’s four basic types of longer-term strategic implementation for global businesses.
Provide an example of each.
64. Define organizational culture and explain the role it plays in controlling organizational activities.
65. Differentiate between explicit and tacit knowledge. Explain the role these play in the coordination of
strategy implementation for global businesses.
66. Differentiate between the shareholder and stakeholder model of strategy formulation.
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Answer Key
1. True
2. True
3. False
4. True
5. True
6. False
7. False
8. False
9. True
10. True
11. False
12. True
13. True
14. False
15. False
16. d
17. e
18. b
19. d
20. a
21. c
22. b
23. a
24. a
25. a
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26. d
27. a
28. c
29. b
30. e
31. a
32. e
33. b
34. b
35. a
36. c
37. d
38. d
39. d
40. b
41. b
42. c
43. b
44. e
45. d
46. social
47. Tactical plans
48. Reactors
49. bureaucratic
50. Organizational change
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51. prospectors
52. Absorptive capacity
53. output
54. shareholder
55. tacit
56. a
57. d
58. c
59. a
60. b
61. d
62. Student answers will vary.
63. Student answers will vary.
64. Student answers will vary.
65. Student answers will vary.
66. Student answers will vary.
