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| 1 | |
Which one of the following is not a valid reason why managers need to develop a "strategy-driven" budget? |
| | A) | Too little funding of strategy-critical value chain slows progress and impedes the efforts of organizational units to execute their pieces of the strategic plan proficiently. |
| | B) | Implementation of a new or revised strategy usually calls for budget reallocations that can entail downsizing of some organizational units and increases in the operating budgets of other units. |
| | C) | The funding requirements of a new strategy need to drive how capital allocations are made and the size of each unit's operating budget. |
| | D) | Aggressive resource reallocation is a prerequisite to creating the core competencies and organizational capabilities that are typically required for good strategy execution and operating excellence. |
| | E) | Visible actions to reallocate operating funds and move people into new organization units signal a determined management commitment to strategic change and frequently are needed to give credibility to catalyze the implementation process and give it credibility. |
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| 2 | |
Changes in strategy often entail budget reallocations because |
| | A) | more money will be needed to fund the new strategy initiatives. |
| | B) | the policy revisions and compensation incentives that tend to accompany strategy changes typically require different levels of funding. |
| | C) | organizational units important in the prior strategy are not necessarily as critical in executing the new strategy, thus making it desirable to reduce budget allocations for areas having a lesser strategy-executing role and to shift more resources to value chain activities and organizational units having a bigger strategy-executing role. |
| | D) | of the added costs associated with training and empowering employees to carry out the new strategy elements. |
| | E) | adopting best practices and pushing for operating excellence via business process reengineering, TQM, and Six Sigma programs tends to reduce costs and reduce overall resource requirements. |
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| 3 | |
Prescribing policies and operating procedures helps facilitate the task of implementing and executing strategy by |
| | A) | helping empower employees to adopt best practices and helping prevent the corporate culture from being unhealthy and/or weak. |
| | B) | providing top-down guidance on how certain things are to be done and promoting the creation of a work climate that facilitates good strategy execution. |
| | C) | guiding managers in the use of good motivational practices and helping them design the most effective type of incentive compensation programs. |
| | D) | indicating how business process reengineering needs to be accomplished and paving the way for instituting TQM or Six Sigma programs. |
| | E) | making it easier for employees to accept the need for state-of-the-art internal operating systems. |
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| 4 | |
The managerial task of creating strategy-supportive policies and procedures |
| | A) | generally entails having many policies rather than few policies (because it usually takes many policies and procedures to adequately spell out and fully explain how things are to be done correctly). |
| | B) | is important because strategies can rarely be executed proficiently without providing employees with explicit and very detailed direction in how value chain activities are to be performed. |
| | C) | is the most reliable way for management to retain control over how tasks are being performed by empowered employees (because very few employees will knowingly violate company policies). |
| | D) | is crucial if a company is to succeed in marshaling the resources needed to benchmark the company's performance of particular value chain activities against "best-in-industry" or "best-in-world' performers. |
| | E) | can aid good strategy execution by steering the actions and behavior of company personnel along a strategy-supportive path, placing limits on independent action, and helping enforce needed consistency in how strategy-critical activities are performed in geographically scattered organization units. |
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| 5 | |
A "best practice" |
| | A) | refers to the lowest-cost procedure for performing a specific task or activity. |
| | B) | refers to performing strategy-critical activities in a manner that results in fewer than 5 defects per million. |
| | C) | is a way of performing an activity that at least one company has proved works particularly well. |
| | D) | refers to the particular value chain activity that a firm performs best. |
| | E) | is a procedure for performing an activity that companies in an industry have "proven" is the most reliable and failsafe way to perform that activity. |
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| 6 | |
Identifying and adopting best practices |
| | A) | starts with benchmarking how well a company performs specific tasks and activities against best-in-industry or best-in-world performers. |
| | B) | is the most powerful technique a company's managers have for effectively and efficiently implementing and executing the chosen strategy. |
| | C) | needs to be directed chiefly at manufacturing and customer service activities, since these two areas are generally the most critical to successful strategy implementation and execution. |
| | D) | is a prerequisite to effective reengineering of core business processes and to creating strong core competencies. |
| | E) | provides a yardstick for setting internal performance targets and for deploying such tools as business process reengineering, TQM, and Six Sigma—all of which are aimed at promoting operating excellence and good strategy execution. |
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| 7 | |
Total quality management (TQM) |
| | A) | is a philosophy of managing that involves convincing employees that superior product quality is the most reliable key to competitive success in the marketplace. |
| | B) | generally works better than business process reengineering because of quicker employee buy-in, lower implementation costs, and easier-to-achieve results. |
| | C) | is a term used to describe companies that are best-in-industry in most of the relevant performance indicators. |
| | D) | is a philosophy of managing that emphasizes continuous improvement in all phases of company operations, 100% accuracy in performing activities, involvement and empowerment of employees at all levels to improve on how things are done, team-based work design, benchmarking, and total customer satisfaction. |
| | E) | is a tool for pursuing operating excellence and mistake-free management of a company's entire business whereas Six Sigma and business process reengineering are tools for pursuing stringent quality control and lower costs. |
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| 8 | |
Six Sigma quality control |
| | A) | is a tool that is superior to TQM in achieving top-notch quality in manufacturing a product. |
| | B) | consists of a disciplined, statistics-based system aimed at producing not more than 2.5 defects per million iterations for a manufacturing or assembly process. |
| | C) | consists of a disciplined, statistics-based system aimed at producing not more than 3.4 defects per million iterations for any business process. |
| | D) | is the best practice for managing manufacturing and assembly activities whereas business process reengineering is the best practice for achieving continuous improvement. |
| | E) | is generally more costly than using business process reengineering if management's objective is to manufacture or assemble a product in a manner that results in fewer than 50 defects per million items produced. |
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| 9 | |
Six Sigma's DMAIC process is a particularly good vehicle for |
| | A) | improving performance when there are small variations in how well an activity is performed; if there are wide variations, then the DMADV process has to be used. |
| | B) | developing new processes or products at Six Sigma quality levels. |
| | C) | companies wanting to improve customer service; Six Sigma DMADV has to be used to improve manufacturing or assembly processes. |
| | D) | minimizing the number of company personnel which require Black Belt training and thus keeping the costs for Six Sigma use below $250,000 per task. |
| | E) | improving performance when there are wide variations in how well an activity is performed. |
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| 10 | |
For a company to realize full value from TQM or Six Sigma initiatives, management should probably not take which one of the following action steps? |
| | A) | Display unequivocal management commitment to total quality and continuous improvement, including a quality vision and establishment of specific, measurable objectives for boosting quality and making continuous improvement |
| | B) | Screen job applicants rigorously and hire only those with the attitudes and aptitudes right for quality-based performance |
| | C) | Build a distinctive competence in quality control, especially as it applies to manufacturing/assembly and customer service |
| | D) | Provide quality training for most employees and stress prevention (doing it right the first time) rather than inspection (instituting ways to correct mistakes) |
| | E) | Preach that performance can, and must, be improved because competitors aren't resting on their laurels and customers are always looking for something better |
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| 11 | |
Which of the following statements regarding the strategy-executing role of internal support systems and information systems is inaccurate? |
| | A) | State-of-the-art internal support systems typically have the effect of raising a firm's unit costs because of the high dollar outlays required to develop and install such systems. |
| | B) | Well-conceived information and internal support systems can sometimes strengthen organizational capabilities enough to provide a competitive edge over rivals. |
| | C) | Well-conceived, state-of-the-art information and operating systems can help a company mobilize information, track performance, and get the right kinds of information to empowered employees to help them do their jobs better. |
| | D) | Well-conceived, state-of-the-art information systems help management monitor the decisions and behavior of empowered employees to see if they acting within specified limits. |
| | E) | Real-time information systems permit company managers to stay on top of implementation initiatives and daily operations, and to intervene if things seem to be drifting off course. |
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| 12 | |
Which of the following is and being careful to institute build-in ways to reward non-performers considered to be a strategy-facilitating motivational practice? |
| | A) | Choosing motivational techniques that build wholehearted commitment to operating excellence and winning attitudes among employees because of the high dollar outlays required to develop and install such systems. |
| | B) | Making sure that the ideas and suggestions of employees are valued and respected |
| | C) | Stating the company's strategic vision in terms that make employees feel they are part of doing something very worthwhile in a larger sense |
| | D) | Being careful to use motivational practices that will appeal to people who are chronic under-performers or non-performers |
| | E) | Sharing information with employees about financial performance, strategy, operational measures, market conditions, and competitors' actions |
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| 13 | |
A properly designed reward system |
| | A) | aligns the well-being of organizational members with their contributions to competent strategy execution and the achievement of performance targets. |
| | B) | aims at paying the highest wages and salaries in the industry to high-performing employees and stressing non-monetary rewards for low-performing employees. |
| | C) | is typically built around a 67%-33% mix between monetary and non-monetary rewards. |
| | D) | must emphasize weeding out employees who are consistently low performers (in the bottom 10% to 15%). |
| | E) | incorporates only positive motivational approaches and avoids subjecting employees to job insecurity, stress, or anxiety. |
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| 14 | |
Which of the following is themostimportant aspect of developing a strategy-supportive reward structure? |
| | A) | Motivating organizational units and individuals to work energetically to execute the strategy effectively and achieve the organization's vision |
| | B) | Making sure that individuals' rewards are tightly linked to meeting or beating strategically-relevant performance targets |
| | C) | Making sure that the rewards actually boost employee morale and job satisfaction |
| | D) | Selecting rewards that will boost worker productivity and lower labor costs |
| | E) | Motivating employees to be good team players |
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| 15 | |
Which of the following is not a desirable feature of a well-designed, strategy-supportive compensation and reward system? |
| | A) | Administering the reward system with scrupulous care and fairness |
| | B) | Having a bonus and incentive plan that applies to managers only (employees should generally not be included in incentive pay plans but should have attractive wages and salaries) |
| | C) | Making sure that the performance targets each individual or team is expected to achieve involve outcomes the individual or team can personally affect |
| | D) | Making liberal use of non-monetary rewards |
| | E) | Keeping the time between achieving the target performance outcomes and the payment of the reward as short as possible |
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| 16 | |
Performance-based incentives and rewards |
| | A) | have to be used cautiously and sometimes toned down in those foreign countries where incentive pay runs counter to local customs and cultural norms. |
| | B) | can have an adverse effect on employee performance because some managers and employees are not psychologically and emotionally strong enough to cope with performance-based pay systems. |
| | C) | tend to be less effective if the performance-based pay exceeds 10-15 percent of total compensation because failure to receive incentive rewards can hurt employee morale and curb their total income and living standards. |
| | D) | should be used sparingly because too much emphasis on pay-for-performance tends to have a negative impact on employee productivity. |
| | E) | have the disadvantage of making it harder for employees to focus diligently on performing their assigned duties. |
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| 17 | |
Exercising strategic leadership does not include which one of the following? |
| | A) | Pushing corrective actions to improve strategy execution and achieve the targeted results |
| | B) | Leading the development of stronger core competencies and competitive capabilities |
| | C) | Putting constructive pressure on the organization to achieve good results and operating excellence |
| | D) | Steering resources into strategy-critical activities and making sure that policies and procedures facilitate good strategy execution |
| | E) | Staying on top of what is happening, closely monitoring progress, ferreting out issues, and learning what obstacles lay in the path of good strategy execution |
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| 18 | |
Managers who are successful in exercising good strategic leadership |
| | A) | are wise decision-makers and very effective communicators. |
| | B) | spend a lot of time coaching others how to be good company role models. |
| | C) | typically practice MBWA and are good at deciding when corrective adjustments are needed and what corrective adjustments to make. |
| | D) | are good at delegating authority and responsibility to subordinates. |
| | E) | are good at knowing what policies and procedures it will take to promote good strategy execution. |
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| 19 | |
The strategic leadership task of putting constructive pressure on the organization to achieve good results and operating excellence |
| | A) | requires extensive training of company personnel in how to "be creative and come up with new ideas for improvement." |
| | B) | requires forceful and unrelenting top management actions to implement benchmarking, TQM or Six Sigma programs, and continuous change efforts. |
| | C) | entails nurturing a results-oriented work climate, promoting a strong sense of involvement on the part of company personnel, and emphasizing individual initiative and creativity. |
| | D) | avoiding the use of stretch objectives and making sure that would-be champions of change do not pursue maverick ideas that would be disruptive to the organization or troublesome to implement. |
| | E) | is often best accomplished by designating several high-profile company employees to act as a team of culture-change champions and charging them to find ways to ingrain continuous improvement as a cultural norm. |
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| 20 | |
Which of the following is not a part of top management's job (especially the CEO) in leading the effort to operate the company's business in an ethically-principled fashion? |
| | A) | The CEO and other senior executives must set an excellent example in their own ethical behavior and demonstrate character and integrity in their actions and decisions. |
| | B) | The company's CEO should strongly encourage the board of directors to develop a social responsibility strategy for the company to pursue. |
| | C) | The CEO and those around the CEO must visibly and frequently declare unequivocal support of the company's ethics code and take an uncompromising stand on expecting all company personnel to conduct themselves in an ethical fashion at all times. |
| | D) | The CEO and other senior executives must be prepared to make the hard call by removing people from key positions or terminating them when they are guilty of ethics violations and by reprimanding those who are lax in monitoring and enforcing ethics compliance. |
| | E) | The CEO and those around the CEO must be openly and unswervingly committed to ethical conduct and socially redeeming business principles and core values. |
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