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BUSINESS STRATEGY CHAPTER 10 CORRECT QUESTIONS AND ANSWERS
“Which of the following statements best describes the process of crafting a business strategy?
- Crafting a business strategy is an operations-driven activity based on managing people.
- Crafting a business strategy involves continually meeting or surpassing performance targets.
- Crafting a business strategy tests a manager's ability to instill discipline in colleagues.
- Crafting business strategy is based on the analysis of market conditions and the company's
resources. - CORRECT ANSWER Crafting business strategy is based on the analysis of market
conditions and the company's resources." "Staffing the organization of a company involves
- assembling a management team and hiring employees.
- establishing lines of authority and channels of communication.
- accumulating the financial resources necessary to execute the strategy.
- ensuring that the company can adapt to market conditions and meet customer expectations. -
CORRECT ANSWER assembling a management team and hiring employees."
"When implementing a business strategy, a manager needs the skill to
- integrate the work of different groups into a cohesive whole.
- keep controversial issues from cropping up.
- build a consensus and keep projects moving.
- achieve proficiency with the strategy in a short period of time. - CORRECT ANSWER -
integrate the work of different groups into a cohesive whole.
- build a consensus and keep projects moving." "The process of executing strategy
- usually involves all value chain activities.
- falls primarily on the shoulders of middle- and lower-level managers.
- is ultimately the responsibility of frontline workers.
- focuses on the manufacturing and supply components of the value chain. - CORRECT
ANSWER usually involves all value chain activities."
"True or false: When executing strategy, managers make use of a basic action agenda that serves
as a recipe for successful strategy execution. - CORRECT ANSWER False"
"Which of the following statements accurately describe the process of executing a business strategy?
- Executing a business strategy requires managers who work effectively with colleagues.
- Executing a business strategy often requires a manager to prioritize short-term goals over long- term goals.
- Executing a business strategy is an analysis-driven activity.
- Executing a business strategy is an action-driven activity. - CORRECT ANSWER - Executing a
business strategy requires managers who work effectively with colleagues.
- Executing a business strategy is an action-driven activity." "Which of the following are basic managerial tasks associated with executing business strategy?
- linking incentives to achieving the financial goals of the strategy.
- establishing cooperative relationships with competitors.
- creating a culture within the organization that promotes effective strategy execution.
- installing systems that allow personnel to carry out their roles in the strategy execution process.
- CORRECT ANSWER - linking incentives to achieving the financial goals of the strategy.
- creating a culture within the organization that promotes effective strategy execution.
- installing systems that allow personnel to carry out their roles in the strategy execution process." "What three key actions are required to build an organization capable of good strategy execution?
- installing information systems that support strategy execution activities
- finding and growing the needed resources and skills necessary for strong strategy execution
- implementing sound structure within the organization
- developing strong management and finding the right employees for the organization -
CORRECT ANSWER - finding and growing the needed resources and skills necessary for strong
strategy execution
- implementing sound structure within the organization
- developing strong management and finding the right employees for the organization"
- come from similar backgrounds.
- have experience delivering results.
- are clear thinkers.
- are reluctant to make decisions. - CORRECT ANSWER - have experience delivering results.
- are clear thinkers." "Which of the following statements regarding the execution of a strategy are true?
- Some managers have more success than other managers with certain approaches to implementing strategy.
- Many of the policies and procedures in a business strategy need to be customized to fit the particulars of a company's situation.
- Making minor changes to an existing strategy requires the same procedures as implementing radical strategy changes.
- Implementing new strategy in a struggling company requires the same set of procedures as
implementing new strategy in a high-performing company. - CORRECT ANSWER - Some
managers have more success than other managers with certain approaches to implementing strategy.
- Many of the policies and procedures in a business strategy need to be customized to fit the particulars of a company's situation." "Managers who possess the skill required to implement strategy are not afraid to
- ignore the company's core values to meet goals.
- openly question the authority of executives above them.
- reprimand mid-level managers in front of their subordinates.
- ask incisive questions. - CORRECT ANSWER ask incisive questions."
"Which of the following statements about executing business strategy is the most accurate?
- Managers can trust that a strategy-supportive organizational structure will emerge naturally during the strategy execution process.
- Certain managerial tasks must always be carried out in order to execute strategy effectively.
- Allocating budgetary resources properly ensures that a strategy will be properly executed.
- Capable internal leadership plays a small role in moving strategy forward. - CORRECT
ANSWER Certain managerial tasks must always be carried out in order to execute strategy
effectively."
"Which of the following statements about the benefits of assembling a highly capable management team is correct?
- Most people with managerial talent lack the ethics required to work collaboratively.
- Talented managers are likely to step on each other's toes and interfere with each other's work.
- Having a managerial team rather than one person in charge usually confuses frontline workers.
- Managers who work well together can produce better results than one or two managers
working on their own. - CORRECT ANSWER Managers who work well together can produce
better results than one or two managers working on their own." "When setting an action agenda for implementing a business strategy, a business manager should begin by
- assessing what the organization needs to do differently in order to carry out the strategy.
- creating an organizational structure that can support the execution of the strategy.
- filling key positions in the company with the personnel who will carry out the strategy.
- allocating funds to the various divisions within the organization that will participate in executing
the strategy. - CORRECT ANSWER assessing what the organization needs to do differently in
order to carry out the strategy." "What is a company's best source of creative ideas for ground-level improvements that lead to operating excellence?
- newly hired graduates from top-notch universities
- knowledgeable and engaged employees
- outside consultants with experience in the industry
- senior executives - CORRECT ANSWER knowledgeable and engaged employees"
"In small organizations, top managers are typically required to
- direct resources throughout a large number of geographically scattered units.
- establish action steps and interact directly with frontline managers and employees.
- build consensus and delegate responsibilities to middle- and low-level managers throughout the organization.
- waiting a week to respond to an email concerning a workflow issue - CORRECT ANSWER
scheduling a weekly meeting with mid-level managers to check on the progress of frontline employees" "A company may choose to outsource certain value chain activities because
- outsourcing an activity may allow a company to concentrate its efforts on activities that are at the core of its strategy.
- another company may have the capability to perform those activities more efficiently.
- a company will likely find it beneficial to turn core strategy activities over to another company.
- outsourcing may add costs to the final price of goods and services. - CORRECT ANSWER -
outsourcing an activity may allow a company to concentrate its efforts on activities that are at the core of its strategy.
- another company may have the capability to perform those activities more efficiently." "Obtaining a critical mass of managerial talent is important because
- managers need to work together to maintain the status quo when implementing new strategy.
- managers need to compete with each other until the most talented person assumes control of the group.
- a highly capable managerial team is likely to exchange ideas and propose sound operational improvements.
- skilled managers in a team are apt to limit each other's potential. - CORRECT ANSWER a
highly capable managerial team is likely to exchange ideas and propose sound operational improvements." "In addition to helping companies develop strategy-critical competencies, outsourcing can also help a company
- add layers of complexity to the decision-making process.
- complicate its organizational structure.
- eliminate bureaucracies that can stall business processes.
- adapt to changes in the market quickly. - CORRECT ANSWER - eliminate bureaucracies that
can stall business processes.
- adapt to changes in the market quickly."
"What strategies do leading companies use to attempt to staff their companies with the right kinds of personnel?
- Recruit the most qualified people.
- Hold back new employees from assignments that promote growth.
- Subject employees to tight surveillance.
- Offer competitive compensation packages. - CORRECT ANSWER - Recruit the most qualified
people.
- Offer competitive compensation packages."
"True or False: Partnerships can give a company a competitive advantage in local markets. -
CORRECT ANSWER True"
"Which of the following statements about developing resources and capabilities is true?
- If a company is relying on a strategy that has succeeded in the past, managers may still need to refresh the company's resources and capabilities.
- Successful companies rarely adopt strategies that require the addition of new resources and capabilities.
- Building resources and capabilities is critical only when a company is implementing a new strategy.
- If a company is implementing a new strategy, it is likely that managers can get by on existing
resources and capabilities. - CORRECT ANSWER If a company is relying on a strategy that has
succeeded in the past, managers may still need to refresh the company's resources and capabilities." "To limit the risk associated with outsourcing, many companies outsource
- strategically less important activities.
- only after consulting directly with activist groups.
- strategically more important activities.
- to companies based overseas rather than within national boundaries. - CORRECT ANSWER
strategically less important activities." "Which of the following statements about the organizational structure of a business is true?
- simple structure
- matrix structure" "Outsourcing can help
- eliminate the need to work closely with suppliers.
- a technology firm slow down the rate of product evolution in the software market.
- car companies produce new models more quickly.
- consumer electronics companies get next-generation products to market ahead of the
competition. - CORRECT ANSWER - car companies produce new models more quickly.
- consumer electronics companies get next-generation products to market ahead of the competition." "Characteristics of the simple structure include
- complex hierarchical relationships.
- a high degree of task specialization.
- minimal use of training.
- few rules. - CORRECT ANSWER - minimal use of training.
- few rules." "Fast-food enterprises can rely on effective partnerships with local franchises to
- construct an effective national marketing strategy.
- ensure consistency across locations.
- ensure that food products meet corporate standards for quality.
- maintain proper levels of cleanliness and staff courtesy toward customers. - CORRECT
ANSWER - ensure consistency across locations.
- ensure that food products meet corporate standards for quality.
- maintain proper levels of cleanliness and staff courtesy toward customers." "A functional organizational structure is
- a combination structure in which the organization is organized along two or more dimensions at once.
- a decentralized structure consisting of a set of operating divisions organized along market lines.
- a structure that is organized along functional lines, where a function represents a major component of the firm's value chain.
- a structure in which a central executive handles all major decisions and oversees organizational
operations. - CORRECT ANSWER a structure that is organized along functional lines, where a
function represents a major component of the firm's value chain." "A company that enters into an outsourcing relationship runs the risk of
- experiencing a hostile takeover from the company handling the outsourced work.
- becoming overly reliant on outside suppliers.
- assuming complete control of its own destiny.
- overdeveloping its expertise in strategy-critical areas of the value chain. - CORRECT ANSWER
becoming overly reliant on outside suppliers." "Which of the following correctly describe the two extremes of organizational decision-making latitude? (Check all that apply.)
- To centralize decision making, which gives top executives considerable control over daily operations
- To decentralize decision making, which typically restricts mid-level managers
- To centralize decision making, which typically locates power at the bottom of the organization
- To decentralize decision making, which can give mid-level managers more authority to make
decisions - CORRECT ANSWER - To centralize decision making, which gives top executives
considerable control over daily operations
- To decentralize decision making, which can give mid-level managers more authority to make decisions" "Which of the following statements about the relationship between value chain activities are true?
- All value chain activities are equally critical to successful strategy implementation.
- Companies should make critical value chain activities the centerpieces of their organizational structure.
- Some value chain activities are more critical than others for effective strategy execution.
- Companies should make the most simple value chain activities the foundation of their
organizational structure. - CORRECT ANSWER - Companies should make critical value chain
activities the centerpieces of their organizational structure.
- a combination structure in which the organization is structured along two or more dimensions at once.
- a decentralized structure consisting of a set of operating divisions organized along market lines.
- a structure that is organized along functional lines, where a function represents a major component of the firm's value chain.
- a structure in which a central executive handles all major decisions and oversees organizational
operations. - CORRECT ANSWER a structure in which a central executive handles all major
decisions and oversees organizational operations." "Which of the following statements is true about decentralized organizational structures?
- Decentralized systems require large management teams to create organizational efficiencies.
- Decentralized systems require limited use of communication technologies because few people need access to data.
- Mid-level managers and frontline employees are inclined to show initiative and be more productive in decentralized systems.
- Mid-level managers and frontline employees have few responsibilities in a decentralized
system. - CORRECT ANSWER Mid-level managers and frontline employees are inclined to
show initiative and be more productive in decentralized systems." "Which of the following statements about a functional organizational structure are true?
- Functional structures are known as departmental structures.
- In functional structures, the chief executive directly oversees operations within each functional unit.
- The main advantage of functional structure over simple structure is greater task specialization.
- Functional structures are known as flat structures. - CORRECT ANSWER - Functional
structures are known as departmental structures.
- The main advantage of functional structure over simple structure is greater task specialization." "Which of the following scenarios best corresponds to the disadvantages of decentralized organizational systems?
- Production rises because top managers are able to keep managers focused on companywide objectives.
- Quarterly profits fall because of minimal collaboration among different units in the company.
- Outside suppliers become aggravated because a plant supervisor does not have the authority to respond to their concerns.
- Production falls, but top executives are able to identify the exact source of the problem and
correct it with little difficulty. - CORRECT ANSWER Quarterly profits fall because of minimal
collaboration among different units in the company." "Which of the following statements about delegating authority in a company is most accurate?
- Under any organizational structure, frontline employees must determine how much authority to retain and how much to delegate.
- Companies rarely give substantial decision-making authority to plant managers and heads of operational units.
- Top managers have a variety of options when considering how much authority to delegate to people at lower levels of the organization.
- The organizational structure a company puts severe constraints on how the company can
choose to delegate authority. - CORRECT ANSWER Top managers have a variety of options
when considering how much authority to delegate to people at lower levels of the organization." "Which of the following scenarios best reflects an advantage of a centralized organizational structure?
- A top-level executive is able to identify the accountable parties when a company fails to meet a production quota.
- A top-level executive is unable to initiate and sustain a uniform response to a crisis.
- Disagreements among mid-level managers lead to inefficiencies in coordinating value chain activities.
- Frontline workers are unaware of who is in charge of business processes. - CORRECT
ANSWER A top-level executive is able to identify the accountable parties when a company fails
to meet a production quota." "Which of the following statements are true concerning a centralized organizational system?
- Top-level managers may have difficulty interpreting technical information that is key to operations in lower levels of the company.
- Top-level managers have little difficulty maintaining a full understanding of all key issues and processes.
