Business Development Chapter 10 Communicate Guidelines Decisions

Document Type
Test Prep
Book Title
Strategic Management 13th Edition
John Pearce, Richard Robinson
Chapter 10 - Implementation
50. (p. 296) _______ communicate guidelines to decisions.
51. (p. 296) Policies are also sometimes called
52. (p. 296) Policies establish __________ over _________ by clearly stating how things are to
be done _________.
53. (p. 296) Policies establish __________ over independent action.
54. (p. 297) Policies ________ basic aspects of organization behavior.
55. (p. 297) Policies ensure ______ action.
56. (p. 297) Policies counteract resistance to or rejection of chosen _______.
57. (p. 297) Policies reduce _______ in day to day decision making.
58. (p. 298) Policies may be ________ or _________.
59. (p. 298) Policies offer predetermined answers to _____ problems.
60. (p. 298) Which of the following is NOT a benefit of formal, written policies?
61. (p. 298) The strategic ________ of policies can vary.
62. (p. 298) Policies can be ________. One good example of this is the use of equal employment
opportunity practices.
63. (p. 298) The ______ significance of policies can vary.
64. (p. 299) ________ theoretically reward(s) the actions of people within an organization.
65. (p. 299) Policies can be externally imposed or ______
66. (p. 299) The goal of an executive bonus compensation plan is to:
67. (p. 299) The goal of ______ is not the only goal that executives may pursue.
68. (p. 299) The success of bonus compensation as an incentive hinges on:
69. (p. 299) A common measure of shareholder wealth creation is appreciation of company
70. (p. 299) ______ provide the executive with the right to purchase company stock at a fixed
price in the future.
71. (p. 299) A common measure of _______ creation is appreciation of company stock price
72. (p. 299) Stock options have typically represented _______ of a CEO's average pay package.
73. (p. 299) ______ dilute shareholders’ equity when they are exercized
74. (p. 300) The rationale behind golden handcuffs is that the plan:
75. (p. 300) There is a weak correlation between earnings measures and shareholder wealth
creation with the use of a:
76. (p. 300) Golden handcuffs:
77. (p. 300) ________ provide incentive for the executive to create wealth for shareholders as
measured by increases in the firm's share price.
78. (p. 300) __________ are much easier to value than options because they are equivalent to a
stock transfer at the market price.
79. (p. 300) ________ offers employees more certainty, even if there is less potential for a big
80. (p. 300) A ________ is designed to provide benefits of direct executive stock ownership.
81. (p. 300) Restricted stock plans offer:
82. (p.300) __________ represent a form of executive compensation where compensation is
83. (p. 300) If the executive quits is fired or simply retires, he would be best protected by a
_________, which is designed to retain talented executives.
84. (p. 305) _______ are executive bonus compensation plans that focus on accounting measures
of performance and are designed to offset the limitations of market-based measures of
85. (p. 305) A firm with a strategic goal of growing the share price incrementally should
implement a:
86. (p. 306) A firm with a strategic goal of reducing executive turnover would use _________ to
provide an incentive for longer executive tenure.
87. (p. 306) A firm seeking to globalize operations would use ________ as its bonus
compensation plan.
88. (p. 306) A firm with a strategic goal of streamlining operations should use ________ to
reward the long-term focus on efficiency and cost control.
Chapter 10 - Implementation
Essay Questions
89. How do short-term objectives help implement strategy?
Learning Objective: 1
90. What are three important qualities of effective short-term objectives? Briefly describe
each of these in your answer.
Learning Objective: 2
91. What are functional tactics? Briefly describe them and provide one example of their use.
Learning Objective: 3
92. In what three fundamental ways do functional tactics differ from business or corporate
strategies? Briefly describe each.
93. What is outsourcing? What are the benefits and risks of outsourcing?
Learning Objective: 4
94. What does it mean to empower employees? How are policies related to the idea of
Learning Objective: 5
95. How can policies control decisions while defining allowable discretion in which operating
personnel can execute business strategies? Describe several ways.
Learning Objective: 5
96. What are stock options? How do they motivate executives and key employees to achieve
maximization of shareholder wealth?
97. What are restricted stock options? How do they motivate executives and key employees
to achieve maximization of shareholder wealth?
Learning Objective: 7
98. What are golden handcuffs? How do they motivate executives and key employees to
achieve maximization of shareholder wealth?
Learning Objective: 7
99. What are golden parachutes? How do they motivate executives and key employees to
achieve maximization of shareholder wealth?
Learning Objective: 7
100. Briefly match the appropriate type of bonus compensation to the strategic goal being
pursued. What is the rationale behind these match-ups?

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