Companies with change-resistant cultures are:
A. typically opposed to performance-based incentive compensation and employee
empowerment.
B. prone to be preoccupied with avoiding risks and are unlikely to pursue actions to
capture emerging opportunities.
C. often overly gung ho about looking outside the company for best practices, new
managerial approaches, and innovative ideas.
D. often preoccupied with making sure the company has an aggressive strategic vision
that embraces risky business strategies.
E. typically run by amoral managers who have little regard for high ethical standards.
Which of the following statements about recruiting and retaining capable employees is
FALSE?
A. The quality of an organization’s people is always an essential ingredient if critical
value chain activities are to be performed competently.
B. Recruiting and retaining capable employees is a particularly important
organization-building task in enterprises where superior intellectual capital is a key
resource and also a basis for competitive advantage.
C. 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.
D. It is very difficult for a company to competently execute its strategy and achieve
operating excellence without a large band of capable employees who are actively
engaged in the process of making ongoing operating improvements.
E. In many industries, adding to a company’s talent base and building intellectual
capital is more important to good strategy execution than additional investments in
plants, equipment, and capital projects.
A company’s competitive strength scores pinpoint its strengths and weaknesses against
rivals and:
A. suggest the company use its strengths to exploit its own competitive liabilities.
B. point directly to the kinds of offensive/defensive actions it can use to exploit its
competitive strengths and reduce its competitive liabilities.
C. point directly to the company to use its weaknesses as offensive moves to challenge
rivals’ weaknesses.
D. suggest receptivity for astute companies to drive their operating practices if the
strength scores are very low.
E. point directly to accepting the competitive strength scores on face value.
Outsourcing critics contend that shifting responsibility for performing value chain
activities to outside specialists:
A. has the disadvantage of raising fixed costs and reducing variable costs and makes it
harder to develop distinctive competencies.
B. can hollow out a company’s knowledge base and capabilities, leaving it at the mercy
of outsider suppliers, and short of the resource strengths to be a master of its own
destiny.
C. results in less organizational flexibility and leads to sometimes exorbitant costs in
collaborating with outside suppliers and strategic partners.
D. slows down decision making on key strategic issues because outside suppliers have
to be consulted first.
E. lowers the morale of company employees, dampens a company’s ability to
implement best practices, and results in greater bureaucracy and slower decision
making.
Recruiting and retaining capable employees is:
A. usually much more important to good strategy execution than is assembling a
capable top-management team.
B. important because the quality of an organization’s people is always an essential
ingredient of successful strategy execution.
C. more important during periods of rapid growth than during periods of crisis and
attempted turnarounds.
D. an important organization-building element, particularly when it comes to
transforming a competence into a core competence or distinctive competence.E. easily
the most critical aspect in building competitively valuable core competencies and
capabilities.
Correctly diagnosing an industry’s key success factors:
A. points to those things that every firm in the industry needs to attend to in order to
develop product propositions.
B. hints at the firm’s ability to generate above-average profitability.
C. reveals that the firm’s capabilities and resources are aligned with operating practices
of industry participants.
D. raises a company’s chances of crafting a sound strategy.
E. raises a company’s sustainability dimensions and market characteristics in line with
industry dynamics.
What makes the marketplace a competitive battlefield is:
A. the race of industry members to build strong defenses against the industry’s driving
forces.
B. the constant rivalry of firms to strengthen their standing with buyers and win a
competitive edge over rivals.
C. the ongoing race among rival sellers to have the highest-quality product.
D. the ongoing efforts of industry members to introduce new and improved
products/services at a faster rate than their rivals.
E. the ongoing race among rivals to achieve the fastest rate of growth in revenues and
profits.
Which of the following is NOT an example of an external threat to a company’s future
profitability?
A. The lack of a distinctive competence
B. New legislation that entails burdensome and costly government regulations
C. Slowdowns in market growth
D. More intense competitive pressures
E. The introduction of restrictive trade policies in countries where the company does
business
Multinational companies that forbid the payment of bribes and kickbacks in their codes
of ethical conduct and that are serious about enforcing this prohibition:
A. are generally advocates of the ethical relativism school of thought.
B. are misguided in their efforts because bribes and kickbacks are really no different
from tipping for service at restaurants as you pay for a service rendered.
C. face a particularly vexing problem of losing business to competitors that have no
scruples-an outcome that penalizes ethical companies and company personnel.
D. are out-of-step with business reality given that the preponderance of company
managers are immoral.
E. are in a distinct minority compared to companies that view the payment of bribes and
kickbacks as a legitimate or permissible practice.
Benchmarking provides a company with which of the following?
A. Hard evidence of cost competitiveness
B. Proof of resource availability
C. A company strategy
D. Verification of total cost ownership
E. Improvements to internal processes
A multidivisional structure consists of a:
A. centralized structure combining corporate overhead with support functions.
B. decentralized structure with 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.
C. decentralized structure or divisional structure that monitors performance and
allocates funding to those divisions wanting to grow.
D. decentralized format of senior executives with large overhead staff to manage and
control all the business lines.
E. centralized structure that controls the coordination across the more diversified and
complex functions within the organization.
An example of how companies can revamp their value chain to reduce costs is to:
A. have suppliers locate their plants close to companies’ own facilities.
B. continue to utilize traditional methods of distribution and sales.
C. not make any changes in product manufacturing but change end distribution
methods.
D. increase extra services to increase staffing requirements.
E. facilitate the learning curve by providing superior training to new employees.
Management’s strategic vision for an organization:
A. charts a strategic course for the organization (“where we are going”) and provides a
rationale for why this directional path makes good sense.
B. describes in fairly specific terms the organization’s strategic objectives, and strategy.
C. spells out how the company will become a big moneymaker and boost shareholder
value.
D. addresses the critical issue of “why our business model needs to change and how we
plan to change it.”
E. spells out the organization’s strategic intent and the actions and moves that will be
undertaken to achieve it.
A company that sets aside 2 percent of its pre-tax profits to build and then fund a
cancer-recovery facility for teens is an example of a corporate social responsibility
action to:
A. enhance employee well-being.
B. support philanthropy.
C. protect and sustain the environment.
D. ensure honorable and ethical action.
E. promote workforce diversity.
Which of the following is NOT an advantage of strategic alliances, joint ventures, and
cooperative agreements between domestic and foreign firms?
A. Competing on a more global scale while still preserving their independence
B. Gaining better access to scale economies in production and/or marketing
C. Filling competitively important gaps in their technical expertise and/or knowledge of
local markets
D. Sharing distribution facilities and dealer networks, thus mutually strengthening their
access to buyers
E. Creating permanent arrangements between the domestic and foreign firms
A company’s strategy stands a better chance of succeeding when:
A. it is developed through a collaborative process involving all managers and staff from
all levels of the organization.
B. managers employ conservative strategic moves based on past experience and form
an underlying basis of control.
C. it is predicated on competitive moves aimed at appealing to buyers in ways that set
the company apart from rivals.
D. managers copy the strategic moves of successful companies in its industry.
E. managers focus on meeting or beating shareholder expectations.
In which one of the following instances is the training and retraining of employees
likely to make the LEAST important contribution to good strategy execution?
A. When a company shifts to a strategy requiring different skills, competitive
capabilities, managerial approaches, and operating methods
B. When an organization is striving to build skills-based competencies
C. When technical know-how is changing so rapidly that a company loses its ability to
compete unless its skilled people have cutting-edge knowledge and expertise
D. When the chosen strategy calls for a deeper technological capability or building and
using new capabilities
E. When the strategy execution effort is based on tried-and-true operating practices that
vary little from year to year
What defines an insular, inwardly focused culture?
A. The firm never underestimates rivals because of their proven track record in
defending challenges.
B. The firm believes they have all the answers because of their past great market
success and is thus overconfident.
C. The firm’s unflinching belief in the company’s superiority breeds a champion’s
attitude and thus they thrive on doing better by adapting to fresh thinking from outside
the company.
D. The firm values their customers’ opinions and fully understands their needs and
expectations.
E. The firm has a commitment to hiring young people who can offer fresh thinking and
new perspectives.
A mobile manufacturer decides to reduce the price of its latest line of smart phones,
which are not the cheapest but have features that are popular among most users. Which
strategy is the manufacturer using?
Assume a firm is at a cost disadvantage with rivals because of higher distributor/dealer
costs than rivals. Identify three strategic moves that it can make to restore cost parity.
What is the strategy-making value of identifying an industry’s key success factors?
Why do a company’s core competencies matter in crafting strategy?
What action steps can managers take to realize full value from TQM or Six Sigma
initiatives and promote a culture of operating excellence?
Is it more accurate to think of strategy as being “proactive” or as being “reactive”?
Why?
Explain the difference between a centralized and a decentralized organizational
structure. Which one is more likely to further the cause of good strategy execution?
Why?
Identify the three types of business costs of ethical failures. Provide examples for each
type of cost.
Under what circumstances is it advantageous for a company competing in foreign
markets to concentrate its value chain activities in a select few locations?
Explain what Six Sigma quality control programs are and the two types of programs
that they include.