Test Bank For Strategic Analysis in Action, 10th Edition by Crossan, Maurer, Rowe, Rouse All Chapte

Test Bank For Strategic Analysis in Action, 10th Edition by Crossan, Maurer, Rowe, Rouse

Contents Chapter 1

A General Management Perspective

Chapter 2

Strategy

Chapter 3

The Diamond-E Framework

Chapter 4

Tools for Environment Analysis

Chapter 5

Environment Analysis: The Strategy–Environment Linkage

Chapter 6

Resource and Capabilities Analysis: The Strategy–Resource Linkage

Chapter 7

Organizational Analysis: The Strategy–Organizational Design Linkage

Chapter 8

Management Preference Analysis: The Strategy–Management Preference Linkage

Chapter 9

Strategic Choice and Strategic Processes

Chapter 10

Implementing Strategy: Change Agenda and Starting Conditions

Chapter 11

Implementing Strategy: Guidelines and Action

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Chapter One: A General Management Perspective Multiple Choice MC 1-1 a. b. c. d.

Answer: Difficulty: Heading:

MC 1-2 a. b. c. d.

Answer: Difficulty: Heading: MC 1-3 a. b. c. d.

Answer: Difficulty: Heading:

MC 1-4 a. b. c. d.

Answer: Difficulty: Heading:

A general management perspective is a pre-requisite in order to become a manager an understanding of the requirements of the strategic planning process essential for all employees a capacity for appreciating the issues associated with organizational performance d challenging Introductory Paragraphs

A general management perspective as consistent with having the ability to make difficult trade-offs in isolation

a strategic leadership perspective or a cross-enterprise leadership perspective. meeting the requirements of the regulators for full disclosure sticking with a successful strategy even in a rapidly changing environment b moderate Introductory Paragraphs

The job of the general manager is to planning, organizing, managing, and controlling

create, capture, and appropriately distribute value for the enterprise. developing and implementing the strategic plan and evaluating performance-to-plan assessing the strengths and weaknesses of the organization and identifying opportunities and threats b easy The Job of the General Manager In addition to setting direction, creating strategy, and implementing change, a fourth fundamental component to a general manager‘s job is ensure all functional management possess a general management perspective assessing performance ensuring the organization is maximizing internal capabilities prioritizing long term direction despite ongoing short-term challenges b challenging The Job of the General Manager

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MC 1-5 a. b. c. d.

Answer: Difficulty: Heading: MC 1-6 a. b. c. d.

Answer: Difficulty: Heading:

MC 1-7 a. b. c. d.

Answer: Difficulty: Heading: MC 1-8 a. b. c. d.

Answer: Difficulty: Heading: MC 1-9 a.

Organizational performance is based on two sets of measures: the strengths of the general manager and the profitability of the firm the health of the organization and the operational performance of the firm the safety record of the firm and the quality standards for the product the satisfaction of the shareholders and the return on investment b easy Assessing Performance Before a general manager embarks on the strategy-making process, they need to understand and know the starting position of the organization. This is accomplished via receiving feedback from all levels of management in the firm analyzing the environment and identifying opportunities and threats developing the business plan creating a meaningful and solid assessment of company performance d moderate The Job of the General Manager

Typical measures of operating performance are profitability, market performance and problem solving profitability, financial position and market performance profitability, financial position and sustainability profitability, market performance and sustainability b Moderate Assessing Performance When assessing the operating performance of a company, a typical Financial Position indicator includes key expense ratios return on equity leverage ratios market share c challenging Assessing Performance Reasons that management fail to understand where the business stands in terms of organizational health may include negative feedback to upper-level managers may be implicitly or explicitly

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b. c. d.

Answer: Difficulty: Heading:

MC 1-10 a. b. c. d.

Answer: Difficulty: Heading: MC 1-11 a. b. c. d.

Answer: Difficulty: Heading:

MC 1-12 a. b. c. d.

Answer: Difficulty: Heading:

discouraged lower return on equity than originally planned high levels of employee retention market share a easy Assessing Performance

Two common measures of operating performance are number of new product focus groups employee turnover and retention rates sales revenue and gross margin fuel costs and labour rates c challenging Assessing Performance One common measure of organizational health is employee satisfaction rates positive media coverage of the Chief Executive Officer number of training hours per employee firm designated as a best company to work for a challenging Using the Performance Matrix An enterprise where operational performance is negative and organizational health is positive is what type of organization?

An organization in crisis.

A troubled organization.

A complacent organization.

A healthy organization. c moderate Using the Performance Matrix

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MC 1-13 a. b. c. d.

Answer: Difficulty: Heading:

MC 1-14 a. b. c. d.

Answer: Difficulty: Heading:

MC 1-15 a. b. c. d.

Answer: Difficulty: Heading:

MC 1-16 a. b. c. d.

Answer: Difficulty: Heading:

An enterprise where both operation and organizational performance are positive is what type of organization?

An organization in crisis.

A troubled organization.

A complacent organization.

A healthy organization. d moderate Using the Performance Matrix An enterprise where operating performance is positive and organizational health is negative is what type of organization?

An organization in crisis.

A troubled organization.

A complacent organization.

A healthy organization. b moderate Using the Performance Matrix An enterprise where both operating and organizational performance are negative is what type of organization?

An organization in crisis.

A troubled organization.

A complacent organization.

A healthy organization. a moderate Using the Performance Matrix

One of the reasons for developing a vision statement for an organization is to match the competition prevent confusion over the purpose of the business satisfy the stakeholders comply with corporate policy b moderate Setting Direction: Vision, Mission, Values

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MC 1-17 a. b. c. d.

Answer: Difficulty: Heading:

MC 1-18 a. b. c. d.

Answer: Difficulty: Heading:

MC 1-19 a. b. c. d.

Answer: Difficulty: Heading:

MC 1-20

a. b. c. d.

Answer: Difficulty: Heading:

A vision consists of two components statement of purpose and a metaphor for the business goal statement and an objective guiding philosophy and a tangible image an action and an outcome c easy Setting Direction, Vision Mission and Values The core purpose and core values of an organization represent its moral intent code of conduct compact with shareholders guiding philosophy d easy Setting Direction, Vision Mission and Values

In 2007 Apple dropped ―Computer‖ from its name. From a visioning perspective this is an example of revitalization establishing why they exist update a sense of vision carrying out a public relations exercise d challenging Setting Direction, Vision Mission and Values

In the Collins and Porras framework, core values and core purpose need to be paired with an envisioned future, including a vivid description that is reachable in 1 to 2 years 3 to 5 years 5 to 10 years over 10 years d easy Setting Direction, Vision

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Mission and Values MC 1-21 a. b. c. d.

Answer: Difficulty: Heading:

MC 1-22 a. b. c. d.

Answer: Difficulty: Heading:

MC 1-23 a. b. c. d.

Answer: Difficulty: Heading:

MC 1-24 a. b. c. d.

Answer: Difficulty: Heading:

Good vision statements are best described as feasible and challenging feasible and readily implemented desirable and resistant to change desirable and singular in their purpose a challenging Setting Direction, Vision Mission and Values The key difference between vision and strategy is that the vision provides operational guidelines; strategy sets general priorities provides the map; strategy sets the priorities sets general priorities; strategy presents specific actions provides broad direction; strategy sets general priorities d challenging From Vision, Mission, and Values to Strategy

The key difference between tactics and strategy is that that tactics provides the map; strategy sets direction focus on short term; strategy long term sets general priorities; strategy provides a broad direction are declaring; strategy is enduring a moderate From Vision, Mission, and Values to Strategy

Failure to translate a vision into a strategy is sometimes known as corporate slide organizational lag faulty implementation strategic drift d easy From Vision, Mission, and

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Values to Strategy MC 1-25 a. b. c. d.

Two aspects of the general manager's job that must be addressed before the strategymaking process can begin are setting direction and developing the business plan analyzing the environment and identifying opportunities and threats developing the business plan and obtaining Board of Directors' approval to implement assessing performance and setting direction

Answer: Difficulty: Heading:

d easy Summary

True/False TF 1-26

Answer: Difficulty: Heading:

TF 1-27 Answer: Difficulty: Heading:

TF 1-28

Answer: Difficulty: Heading:

TF 1-29

Answer: Difficulty: Heading:

A general manager is an individual who has responsibility for all functional aspects of the business. t easy The Job of the General Manager The general manager is expected to create value for the organization. t easy The Job of the General Manager

Although the general manager holds a particular position in the organization, any individual in a functional position can also have a general management perspective. t moderate The Job of the General Manager

The general manager is required to establish a long term direction for the organization. t easy The Job of the General

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Manager TF 1-30

Answer: Difficulty: Heading:

TF 1-31

Answer: Difficulty: Heading: TF 1-32 Answer: Difficulty: Heading:

TF 1-33 Answer: Difficulty: Heading:

TF 1-34 Answer: Difficulty: Heading: TF 1-35 Answer: Difficulty: Heading: TF 1-36

Answer:

The general manager should set direction, create strategy, implement change, and control the process. f moderate The Job of the General Manager Organizational performance is based on two sets of measures: operational performance and financial health. f moderate Assessing Performance Market share is an example of an operating performance measure. t easy Assessing Performance

Employee turnover is an example of an operating performance measure. t easy Assessing Performance

Organizational learning is considered an operating measure. f easy Assessing Performance Anonymous employee surveys are often used to gauge organizational health. t moderate Assessing Performance The performance matrix is often considered when classifying operating performance and organizational health. t

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Difficulty: Heading:

TF 1-37 Answer: Difficulty: Heading:

TF 1-38

Answer: Difficulty: Heading:

TF 1-39

Answer: Difficulty: Heading:

TF 1-40 Answer: Difficulty: Heading:

TF 1-41

Answer: Difficulty: Heading: TF 1-42 Answer: Difficulty: Heading:

easy Using the Performance Matrix A complacent organization has positive organizational and operating performance. f moderate Using the Performance Matrix A troubled organization has positive operating performance and negative organizational health. t moderate Using the Performance Matrix A firm could be considered to be in crisis if both operating performance and organizational health are negative. t moderate Using the Performance Matrix

Successful companies often have an enduring set of core values. t moderate Setting Direction: Vision, Mission, Values Values represent the basic beliefs that govern individual and group behaviour in an organization. t easy Guiding Philosophy Strongly held core values can become a liability over time. t challenging Guiding Philosophy

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TF 1-43 Answer: Difficulty: Heading: TF 1-44 Answer: Difficulty: Heading:

TF 1-45

Answer: Difficulty: Heading:

TF 1-46 Answer: Difficulty: Heading:

TF 1-47 Answer: Difficulty: Heading:

TF 1-48 Answer: Difficulty: Heading:

TF 1-49 Answer: Difficulty:

Core purpose defines the reason an organization exists. t moderate Guiding Philosophy A good vision statement should be one that is readily achievable. f moderate Reasonable Expectations of a Vision Process Linking the vision with organizational strategy is a critical task of the general manager. t moderate Reasonable Expectations of a Vision Process

Strategy determines specific actions while Tactics set general priorities f moderate From Vision, Mission, and Values to Strategy

Vision addresses the medium term while Strategy addresses the long term f moderate From Vision, Mission, and Values to Strategy The vision for the organization is intended to provide direction and guidance. f moderate From Vision, Mission, and Values to Strategy Strategy is about inspiring and motivating an organization. f moderate

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Heading:

TF 1-50

Answer: Difficulty: Heading:

From Vision, Mission, and Values to Strategy

The realities of general management demand a more flexible tool than planning and a more precise tool than vision to deal with ends and means. t moderate Strategic Analysis, Planning, and Business Plans

Chapter Two: Strategy Multiple Choice MC 2-1 a. b. c. d.

Answer: Difficulty: Heading:

MC 2-2 a. b. c. d.

Answer: Difficulty: Heading:

MC 2-3 a. b. c. d.

The four components of the strategy model are goals, products, markets, and activities financial resources, goals, markets, and products focus, goals, activities, and financial resources value, goals, focus, and activities d moderate The Essentials of the Strategy Model

How will you measure success year over year will address which of the following Business Strategy component?

Value Proposition Goals Core Activities Product Market Focus b easy The Essentials of the Strategy Model

In the hands of the general manager, strategy is a tool for establishing, directing, and controlling the operation of an organization creating, sustaining, and monitoring the direction of an organization establishing, implementing, and monitoring the performance of an organization creating, sustaining, and assessing the operation of an organization

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Answer: Difficulty: Heading:

MC 2-4 a. b. c. d.

Answer: Difficulty: Heading: MC 2-5 a. b. c. d.

Answer: Difficulty: Heading: MC 2-6 a. b. c. d.

Answer: Difficulty: Heading: MC 2-7 a. b. c. d.

Answer: Difficulty: Heading:

b easy The Role of Strategy

A 15% return on investment and a reduction in re-infection rates are examples of shareholder priorities soft goals hard goals corporate values c moderate Goals Examples of Hard Business Goals can include financial performance of the business social conduct of the business operation of the corporate office Total Return to Shareholders in key expense ratios d moderate Goals With a harvest strategy, you would expect the level of investment in plant and equipment to be lower than for a growth strategy the same as that for a growth strategy higher than for a growth strategy unrelated to the strategy a moderate Describing Goal Structures The product market component of strategy refers to price and market position size of the target product market product and market choice the consumer needs of the target product market c moderate Product/Service Market Focus and Competitive Advantage

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MC 2-8 a. b. c. d.

Answer: Difficulty: Heading:

MC 2-9 a. b. c. d.

Answer: Difficulty: Heading:

MC 2-10 a. b. c. d.

Answer: Difficulty: Heading:

MC 2-11 a. b. c. d.

A value proposition that focuses on proprietary properties is a business that is focused on execution price diversification features d moderate Describing Value Propositions

An organization that provides products at a lower price than its competitors is competing on the basis of brand recognition cost differentiation competitive parity b easy Product/Service Market Focus and Competitive Advantage An organization that provides exclusive products is competing on the basis of differentiation cost goodwill competitive difference a moderate Product/Service Market Focus and Competitive Advantage A firm that discounts and offers rebates is pursuing a value proposition based on features execution price reliability

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Answer: Difficulty: Heading:

MC 2-12 a. b. c. d.

Answer: Difficulty: Heading: MC 2-13 a. b. c. d.

Answer: Difficulty: Heading: MC 2-14 a. b. c. d.

Answer: Difficulty: Heading: MC 2-15 a. b. c. d.

Answer: Difficulty: Heading:

c moderate Describing Value Propositions

Core activities are considered standard for all businesses within an industry critical to the operation of the business essential functions for the market leader outsourced activities b easy Core Activities Three key functions for a vertically integrated firm are supply management, production, and sales resource agreements, manufacturing, and marketing capital acquisition, equipment, and plant operations raw material supply, manufacturing, and distribution d challenging Describing Core Activities Three key functions for a firm that competes on the basis of its technology are supply agreements, employee recruitment, and contracted services research and development, joint ventures, and assembly patents, technical publications, and employee recruitment research and development, component supply, and service d challenging Describing Core Activities Which component of the Walmart Business Strategy is addressed by having ―everyday low prices‖ Goals Product Market Focus Core Activities Value Proposition d moderate Putting Strategy Components Together

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MC 2-16 a. b. c. d.

A sound competitive strategy rests on operational excellence financial stability unique capabilities benchmarking

Answer: Difficulty: Heading:

c challenging Other Strategy Perspectives

MC 2-17 a. b. c. d.

Answer: Difficulty: Heading:

MC 2-18 a. b. c. d.

Answer: Difficulty: Heading:

MC 2-19 a. b. c. d.

Answer: Difficulty: Heading:

MC 2-20

Corporate strategy can be recognized by the organization's head office location and corporate management processes financial performance and number of shareholders product market focus and mission statement business portfolio and corporate resources d easy Describing Corporate Strategy A corporate strategy of better than 70% of revenues from a single business unit is consolidation constrained business harvest dominant business unit d easy Describing Corporate Strategy The central challenge for corporate general management is in negotiating corporate supply agreements managing diverse operations from a central location adding value to the individual business units hedging exchange rate risks c easy Corporate Strategy and Corporate General Management A pure play corporate strategy will likely occur

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a. b. c. d.

Answer: Difficulty: Heading:

MC 2-21 a. b. c. d.

Answer: Difficulty: Heading:

MC 2-22 a. b. c. d.

Answer: Difficulty: Heading:

MC 2-23 a. b. c. d.

Answer: Difficulty: Heading:

where between 70 and 95% of revenue comes from a single business unit where less than 70% of revenues comes from a dominant business a pure play will only exist in companies with multiple business units when at least 95% of company revenues comes from one business unit d challenging Describing Corporate Strategy

Core Activities address which of the following questions?

What are the business aims with respect to growth, profitability and risk?

What are the primary value-adding activities that the business intends to perform?

What are the products and/or services the business plans to sell?

How does the business intend to attract customers? b easy Essentials of the Strategy Model McCain‘s approach to build a competitive differentiation and advantage in its worldwide french-fried potato business can be described as an effective goal structure a product market focus a well-defined value proposition a distinctive core competency b moderate Product/Service Market Focus and Competitive Advantage A firm that focuses on convenience and delivery is competing on the basis of price features customer satisfaction execution d easy Describing Value

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Propositions MC 2-24 a. b. c. d.

If less than 70 percent of revenue comes from any one business unit, a common corporate strategy will be related constrained a pure play related linked unrelated diversification

Answer: Difficulty: Heading:

MC 2-25 a. b. c. d.

d challenging Describing Corporate Strategy A related constrained corporate strategy occurs where less than 70 percent of revenue comes from a business and there are no common links between the businesses where between 70 and 95 percent of revenues comes from a single business unit where less than 70 percent of revenue comes from any one business unit but the underlying businesses are closely linked where less than 70 percent of revenue comes from any one business unit and there are limited links between the businesses

Answer: Difficulty: Heading:

c moderate Describing Corporate Strategy

True/False TF 2-26 Answer: Difficulty: Heading: TF 2-27 Answer: Difficulty: Heading: TF 2-28 Answer: Difficulty:

Every organization has an implied strategy. t easy Strategy 10% annual growth is an example of an organizational goal.

T Moderate Goals The key components of a business strategy are goals, product, market, and financing.

F Easy

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Heading: TF 2-29 Answer: Difficulty: Heading: TF 2-30 Answer: Difficulty: Heading: TF 2-31

Answer: Difficulty: Heading:

TF 2-32 Answer: Difficulty: Heading: TF 2-33

Answer: Difficulty: Heading: TF 2-34 Answer: Difficulty: Heading:

TF 2-35

Answer: Difficulty: Heading:

Goals The 'base case' strategy is the current strategy adjusted for inflation.

F Challenging The Role of Strategy Strategy can be used to set direction for the organization.

T Challenging The Role of Strategy Business strategy focuses on how an organization will create value for a portfolio of business lines. f moderate The Role of Strategy

Returns to the shareholder are an example of a 'hard' business goal. t easy Goals A growth strategy implies a focus on investment without sacrificing current profitability. f challenging Describing Goal Structures A penetration strategy suggests there is continuing growth in current markets. t moderate Product/Service Market Focus An organization's value proposition reflects the benefits it has chosen to offer in the marketplace. t easy Value Proposition

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TF 2-36 Answer: Difficulty: Heading: TF 2-37 Answer: Difficulty: Heading: TF 2-38 Answer: Difficulty: Heading: TF 2-39 Answer: Difficulty: Heading: TF 2-40 Answer: Difficulty: Heading:

TF 2-41

Answer: Difficulty: Heading:

TF 2-42

Answer: Difficulty: Heading:

Convenience is an example of a value proposition. t easy Value Proposition Operational effectiveness can generate sustained profitability for an organization. f moderate Value Proposition Corporate strategy focuses on creating a competitive advantage across industries. t moderate Corporate Strategy Business strategy focuses on creating a competitive advantage within an industry. t easy Corporate Strategy Functional strategy focuses on executing the business strategy. t easy Corporate Strategy

The corporate management typically determines the industries in which the organization will compete. t moderate Describing Corporate Strategy

The contribution of the corporate office to the success of the business units is expected to exceed the cost of the office. t moderate Describing Corporate Strategy

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TF 2-43 Answer: Difficulty: Heading:

TF 2-44 Answer: Difficulty: Heading:

TF 2-45

Answer: Difficulty: Heading:

TF 2-46

Answer: Difficulty: Heading:

TF 2-47

Answer: Difficulty: Heading:

TF 2-48

Answer: Difficulty:

Sharing corporate resources is an example of corporate cost synergy. t easy Corporate Strategy and Competitive Advantage A conglomerate is an organization where the business units are highly integrated. f challenging Describing Corporate Strategy In a highly diversified organization, there are numerous opportunities for the corporate office to add value. f challenging Describing Corporate Strategy

How will you measure success year over year? This a question that will address the Value Proposition component of business strategy f moderate Describing Corporate Strategy

The primary value-adding activities that the business intends to perform and how does it intend to perform them addresses the Core Activities of the Business Strategy t moderate Describing Corporate Strategy

If you are dealing with an organization that encompasses multiple products/services and markets, you will find it helpful to visualize the product/service market focus using a cross-reference format, or matrix, that arranges product/services entries against market segments. t moderate

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Heading:

Describing Product Service Market Focus For Wal-Mart, everyday low prices is a business strategy that addresses Core Activities

TF 2-49

Answer: Difficulty: Heading:

TF 2-50

f easy Putting Strategy Components Together

The way some organizations describe their strategy may be closer to a ―perspective‖ about the way they do things.

Answer: Difficulty: Heading:

t easy Other Strategy Perspectives

Chapter Three: The Diamond-E Framework Multiple Choice

MC 3-1 a. b. c. d.

Answer: Difficulty: Heading:

MC 3-2 a. b. c. d.

Answer: Difficulty: Heading:

MC 3-3

The Diamond-E model is a framework for financial assessment market evaluation product decisions strategic analysis d easy Introducing the Diamond-E Framework Three key components of the Diamond-E model are product/market focus, corporate goals, and strategy organization, strategy, and environment financial resources, management preferences, and the product/market focus corporate goals, internal strengths, and external threats b easy Introducing the Diamond-E Framework A viable strategy needs to be aligned with the

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a. b. c. d.

financial resources of the firm organization's internal capabilities priorities of the shareholders organization's current market position

Answer: Difficulty: Heading:

b easy The Criterion of Consistency

MC 3-4 a. b. c. d.

Answer: Difficulty: Heading:

MC 3-5 a. b. c. d.

Answer: Difficulty: Heading: MC 3-6 a. b. c. d.

Answer: Difficulty: Heading:

MC 3-7 a. b. c. d.

Opportunities for the organization are found in its financial statements external environment internal capabilities the value chain activities b easy Introducing the Diamond-E Framework The underlying logic of the Diamond-E model is consistency, meaning the financial resources of the firm are matched with the priorities of the shareholders strategy is in keeping with the priorities of suppliers strategy is consistent with the internal and external environment financial resources of the firm are matched with its strengths c moderate The Criterion of Consistency Environmental risks typically arise from inconsistencies between strategy and the sustainability of the organization the financial resources of the organization and its strengths strategy and external opportunities and challenges the financial resources of the organization and its technology assets c challenging Consistency, Opportunity, and Risk A long term capability risk can be described as

Internal capabilities develop inconsistently with strategy.

Errors in reading the environment cause strategic failure.

Strategic demands exceed the capacity to execute.

Environmental changes make the strategy obsolete.

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Answer: Difficulty: Heading:

MC 3-8 a. b. c. d.

Answer: Difficulty: Heading:

MC 3-9 a. b. c. d.

Answer: Difficulty: Heading:

MC 3-10 a. b. c. d.

Answer: Difficulty: Heading:

MC 3-11 a. b. c. d.

Answer: Difficulty:

a moderate Consistency, Opportunity, and Risk When evaluating a strategic proposal, an important consideration is the implications for the organization's employees suppliers contractors current strategy d easy Using the Diamond-E Framework Undertaking a thorough PEST and Porter‘s analysis is an example of dealing with the Strategy-Resources linkage Strategy-Organization linkage Strategy-Management linkage Strategy-Environment linkage d easy Using the Diamond-E Framework The strategy-environment linkage aligns strategy with the regulatory environment in which the organization operates strategic opportunities and challenges with external forces strategy with the financial environment of the organization strategic opportunities and challenges with the internal environment b moderate The Strategy-Environment Linkage A technique known as a gap analysis is used to evaluate the strategy-resources linkage resources-organization linkage strategy-management preferences linkage resources-environment linkage a easy

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Heading:

MC 3-12 a. b. c. d.

Answer: Difficulty: Heading:

MC 3-13 a. b. c. d.

Answer: Difficulty: Heading:

MC 3-14 a. b. c. d.

Answer: Difficulty: Heading: MC 3-15 a. b. c. d.

Answer: Difficulty: Heading:

The Strategy-Resources Linkage The strategic preferences of the management team need to be considered to avoid conflict develop an appropriate strategy counter environmental threats leverage internal capabilities b moderate The Strategy-Management Preferences Linkage An organization's capabilities are influenced by its financial resources and employee development program leadership and the priorities of the Board of Directors structure and management processes culture and corporate governance c easy The Strategy-Organization Linkage Strategic tension refers to the constraints that exist between what an organization has done in the past and what it could do in the future could do and how the management team wants to proceed should do and its product/market focus should do and what it can do d moderate Strategic Tension Organizations that engage in informal strategic reviews on an on-going basis are concerned about their organization's financial stability having misgivings about their organization's strategic direction in a position to respond in a timely manner to strategic possibilities following the lead of their major competitors c moderate The Process of Strategic Analysis

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MC 3-16 a. b. c. d.

Answer: Difficulty: Heading:

MC 3-17 a. b. c. d.

Answer: Difficulty: Heading: MC 3-18 a. b. c. d.

Answer: Difficulty: Heading:

MC 3-19 a. b. c. d.

Answer: Difficulty: Heading:

MC 3-20 a.

The first step in the process of strategic analysis is to develop a set of mutually exclusive options establish the need for action evaluate the competitive environment undertake a gap analysis b easy The Process of Strategic Analysis If organizational performance is not in keeping with expectations, the recommended strategic approach is to check vulnerabilities develop new core competencies introduce cost cutting measures problem solve and undertake remedial action d moderate Step 1: Base Case Analysis When reviewing an organization's strategic proposals, one of the considerations should be the uniqueness of the proposals cost of retraining the workforce regulatory reporting requirements level of risk given the nature of the opportunity d moderate Step 2: Strategy Formulation and Testing A key component of the execution and decision stage is forecasting future performance under the current strategy cost of closing capability gaps and building commitment within the organization assessing performance short-listing most viable proposals d moderate Step 3: Strategy Formulation and Testing The second step in the process of strategic analysis is to develop and evaluate proposals to address business opportunities and challenges

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b. c. d.

Answer: Difficulty: Heading:

MC 3-21 a. b. c. d.

Answer: Difficulty: Heading:

MC 3-22 a. b. c. d.

Answer: Difficulty: Heading: MC 3-23 a. b. c. d.

Answer: Difficulty: Heading: MC 3-24 a. b. c.

assess past performance forecast future performance under current strategy move to build commitment and develop required capabilities a moderate The Process of Strategic Management The third step in the process of strategic analysis is to forecast future performance under current strategy use the Diamond-E framework to shape and short-list proposals prepare performance forecasts for short-listed proposals commit, implement and review d easy The Process of Strategic Management When a firm satisfies key stakeholder interests at the expense of not delivering exactly what the market needs, the firm is most likely guided by what the firm ―needs‖ to do what the firm‘s capabilities ―can‖ do what the firm‘s management preference ―wants‖ to do what the firm‘s belief in what it ―should‖ do c challenging Strategic Tension A corporate strategy that prioritizes the resource capabilities of the firm is likely guided by what the firm ―needs‖ to do what the firm‘s capabilities ―can‖ do what the firm‘s management preference ―wants‖ to do what the firm‘s belief in what it ―should‖ do b moderate Strategic Tension Kodak procrastinating for years before deciding to enter the market for digital photography is an example of inconsistencies with strategy and resources inconsistencies between strategy and environment inconsistencies with strategy and capabilities

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d.

inconsistencies between current and proposed strategies

Answer: Difficulty: Heading:

MC 3-25 a. b. c. d.

b challenging Consistency, Opportunity, and Risk Management roll-out of a new comprehensive compensation scheme is likely addressing short-term environmental risks long-term environmental risks short-term capability risks long-term capability risks

Answer: Difficulty: Heading:

d moderate Consistency, Opportunity, and Risk

True/False TF 3-26 Answer: Difficulty: Heading:

TF 3-27

Answer: Difficulty: Heading:

TF 3-28 Answer: Difficulty: Heading:

TF 3-29

Answer: Difficulty:

Strategy describes the opportunities the business is pursuing in the marketplace. t easy Introducing the Diamond-E Framework A viable strategy is one that is consistent with the realities of the internal and external environment.

T Moderate Introducing the Diamond-E Framework Once a strategy has been established it seldom needs to be changed.

F Moderate The Strategy-Resources Linkage Changes in the external environment can cause a strategy to become obsolete in the short term.

F Easy

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Heading:

TF 3-30

Answer: Difficulty: Heading:

TF 3-31 Answer: Difficulty: Heading:

TF 3-32 Answer: Difficulty: Heading:

TF 3-33

Answer: Difficulty: Heading:

TF 3-34

Answer: Difficulty: Heading:

TF 3-35

Consistency, Opportunity, and Risk

A short-run environmental risk is a strategy that demands too much of an organization.

F Moderate Consistency, Opportunity, and Risk

Complacency can cause an organization's internal capabilities to erode over time.

T Moderate Consistency, Opportunity, and Risk Strategy tends to emerge from a series of discrete decisions made over time.

T Easy Strategy, Strategic Proposals, and Strategic Analysis One of the outcomes of the environmental assessment is an identification of the strengths of the organization.

F Moderate Strategy, Strategic Proposals, and Strategic Analysis

The implication of changes in the external environment is an important factor when assessing the strategy-resources linkage. f moderate The Strategy-Resources Linkage

Differences in individual strategic preferences may causing conflict among the managers as well as with the desired strategy.

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Answer: Difficulty: Heading:

TF 3-36

Answer: Difficulty: Heading:

TF 3-37 Answer: Difficulty: Heading:

TF 3-38

Answer: Difficulty: Heading:

TF 3-39 Answer: Difficulty: Heading:

TF 3-40

Answer: Difficulty: Heading:

TF 3-41

t easy The Strategy-Management Linkage Organization gaps often require the strategy to be revised is the nature and feasibility of the gaps are too costly and time consuming to overcome t moderate The Strategy-Organization Linkage

Managerial preferences can be a strategic constraint. t moderate The Strategy-Resources Linkage

If the strategy-organization linkage is flawed, then the organizational structure may need to be changed. t moderate The Strategy-Organization Linkage Culture is a critical variable when it comes to developing organizational capabilities. t moderate Consistency, Opportunity and Risk One of the challenges faced by the management team when developing strategy is to determine what the organization can do versus what it is capable of doing. t moderate Consistency, Opportunity and Risk The process of strategic analysis should be part of the everyday agenda of the management team.

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Answer: Difficulty: Heading:

TF 3-42

Answer: Difficulty: Heading: TF 3-43

Answer: Difficulty: Heading: TF 3-44

Answer: Difficulty: Heading: TF 3-45 Answer: Difficulty: Heading:

TF 3-46 Answer: Difficulty: Heading:

TF 3-47 Answer: Difficulty: Heading:

TF 3-48

t easy The Process of Strategic Analysis The base case forecasts organizational performance for the most conservative of the strategic proposals under consideration. f moderate Step 1: Base Case Analysis A comparison of the firm's performance relative to its competitors can identify areas of strength as well as vulnerabilities. t challenging Step 1: Base Case Analysis Not all businesses have a strategy, so the management team may have to create one to begin the strategic analysis process. f moderate Step 1: Base Case Analysis The Diamond-E model is used primarily for developing new strategic initiatives. f moderate Step 2: Strategy Formulation and Testing An analysis of implementation issues should inform the formulation of strategy. t moderate Step 3: Decision and Execution Once the strategic proposals have been evaluated, the next step is implementation. f easy The Process of Strategic Analysis Having to make key decision on several imperfect proposals turn into an excuse for

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endless delays Answer: Difficulty: Heading:

TF 3-49

Answer: Difficulty: Heading: TF 3-50

Answer: Difficulty: Heading:

t moderate Step 3 Decision and Execution An organization that adopts an imperfect strategy based on management preferences is guided by what the organization ―needs to do‖ f moderate Strategic Tension Embarking on a strategy that is going to require a significant hiring campaign to close resource gaps is a strategy that is not guided by what the organization ―can do‖ t moderate Strategic Tension

Chapter Four: Tools for Environment Analysis Multiple Choice MC 4-1 a. b. c. d.

Answer: Difficulty: Heading:

MC 4-2 a. b. c. d.

Answer: Difficulty: Heading:

An analysis of the environment in which an organization operates is also known as political-legal general socio-cultural industry d easy Tools for Environmental Analysis In terms of PEST forces, an example of a Micro force Social Technological Competition Political c easy PEST

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MC 4-3

Will generational shifts in values, attitudes, and beliefs affect your business?

This is a question that can be addressed by understanding which PEST force?

a. b. c. d.

Social Technological Economical Political

Answer: Difficulty: Heading:

a easy PEST

MC 4-4 a. b. c. d.

Answer: Difficulty: Heading: MC 4-5 a. b. c. d.

Answer: Difficulty: Heading: MC 4-6 a. b. c. d.

Answer: Difficulty: Heading:

Porter‘s five competitive forces that shape all industries are regulations, suppliers, inflation rate, consumer preference, and technology threat of new entrants, power of buyers and suppliers, substitutes, and competitive rivalry power of buyers, number of suppliers, maturity of the industry, product differentiation, and economies of scale threat of technology, supplier substitutions, buyer power, increasing number of competitors, and demographics b moderate Porter‘s Five Forces Model Porter‘s Five Forces model will determine the profitability of the firm industry competitors suppliers b moderate Porter‘s Five Forces Model Compared to new entrants, existing firms that have made substantial investments in their operations have a timing advantage technological disadvantage cost advantage competitive disadvantage c moderate Potential Entrants

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MC 4-7 a. b. c. d.

Answer: Difficulty: Heading: MC 4-8 a. b. c. d.

Answer: Difficulty: Heading: MC 4-9 a. b. c. d.

Answer: Difficulty: Heading: MC 4-10 a. b. c. d.

Answer: Difficulty: Heading: MC 4-11 a. b. c. d.

Answer:

Cost disadvantages for new entrants can arise from technology, location, and raw materials learning, government subsidies, and socio-cultural factors location, raw materials, and demographic factors technology, government subsidies, and competitive rivalry a moderate Potential Entrants High switching costs are considered an example of barrier to entry buyer power supplier power threat of substitution c easy Suppliers Raw material shortages usually benefit new entrants consumers buyers suppliers d moderate Suppliers Suppliers who provide a differentiated product may have power if they sell to a number of different industries price the product at the industry average sell to a limited number of industries price the product above the industry average a moderate Suppliers Buying groups that have full information and earn low profits are considered to be unattractive as customers have power in the buying-selling process be candidates for backward integration have little or no power in the buying-selling process b

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Difficulty: Heading: MC 4-12 a. b. c. d.

Answer: Difficulty: Heading: MC 4-13 a. b. c. d.

Answer: Difficulty: Heading:

MC 4-14 a. b. c. d.

Answer: Difficulty: Heading:

MC 4-15 a. b. c. d.

Answer: Difficulty: Heading:

MC 4-16

moderate Buyers Substitute products reduce profitability by lowering switching costs increasing advertising costs increasing competitive rivalry setting the ceiling price d easy Substitute Products In emerging industries where demand is growing, competitive rivalry is too difficult to gauge low moderate high b moderate Intensity of Competitive Rivalry In industries with high barriers to exit, competitive rivalry is too difficult to gauge low moderate high d easy Intensity of Competitive Rivalry For existing firms, an attractive industry is one with high barriers to entry, low supplier power, and low buyer power low supplier power, high buyer power, and high competitive rivalry high barriers to entry, high competitive rivalry, and high exit costs low growth, low barriers to entry, and high supplier power a challenging Intensity of Competitive Rivalry The primary activities of an organization‘s value chain often include

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a. b. c. d.

Answer: Difficulty: Heading:

MC 4-17 a. b. c. d.

Answer: Difficulty: Heading:

MC 4-18 a. b. c. d.

Answer: Difficulty: Heading:

MC 4-19 a. b. c. d.

Answer: Difficulty: Heading:

MC 4-20

logistics, operations, and marketing operations, sales, and human resource management procurement, operations, and service marketing, technology development, and logistics a easy Industry and Organizational Value Chain Analysis The purpose of an organization‘s value chain is to demonstrate how the activities

structure the organization differ from the organization‘s competitors are integrated contribute to costs d moderate Industry and Organizational Value Chain Analysis The support activities of an organization‘s value chain often include Inbound Logistics Marketing and Sales Customer Service Procurement d moderate Industry and Organizational Value Chain Analysis

When competitors attempt to read and interpret the signals sent by one another to determine motivation and intent to cooperate or compete; it is known as explicit collusion gathering competitive intelligence tacit collusion normal operating behavior in a competitive industry c moderate Cooperation and Competition: Game Theory

External forces that can impact an industry include

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a. b. c. d.

Answer: Difficulty: Heading:

MC 4-21 a. b. c. d.

Answer: Difficulty: Heading: MC 4-22 a. b. c. d.

Answer: Difficulty: Heading:

MC 4-23 a. b. c. d.

Answer: Difficulty: Heading:

MC 4-24 a. b. c.

political, energy, sustainability, and training procedure, environmental, supplier, and tactical position, economic, service, and procedural political, economic, social, and technical d easy PEST

Stakeholders can be categorized based on preferences, language, and utility position, location, and understanding purpose, interests, and discretion power, legitimacy, and urgency d easy Stakeholder Analysis Government policies, such as licensing issues, are most likely to impact bargaining power of buyers bargaining power of suppliers threat of substitute products or services threat of new entrants d easy Cooperation and Competition: Game Theory

Game theory is concerned with predicting the results of all companies in an industry choosing of an optimal strategy in an industry introducing cooperation in an industry engaging in collusion in an industry b moderate Cooperation and Competition: Game Theory Constant changes in the disk drive industry is a new economy example of the new economics of information the long tail disruptive innovation

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d.

unbundling

Answer: Difficulty: Heading: MC 4-25 a. b. c. d.

C easy New Economy Models When Chris Anderson proposes the new economy is not about scarcity, but rather about abundant choice; which New Economy Model is he referring to? the new economics of information the long tail disruptive innovation unbundling

Answer: Difficulty: Heading:

b moderate New Economy Models

True/False TF 4-26

Answer: Difficulty: Heading: TF 4-27

Answer: Difficulty: Heading: TF 4-28

Answer: Difficulty: Heading: TF 4-29 Answer: Difficulty: Heading: TF 4-30

The likelihood of superior performance for firms in an industry where the competitive forces are weak is high. t easy Porter‘s Five Forces Model New entrants who are diversifying from outside an industry are not always at a cost disadvantage. t moderate Potential Entrants It is relatively inexpensive to establish a market presence in an industry with strong product differentiation. f moderate Potential Entrants The threat of competitive retaliation is not considered a barrier to entry. f moderate Potential Entrants Suppliers have power if they can pass cost increases on to their customers.

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Answer: Difficulty: Heading: TF 4-31

Answer: Difficulty: Heading: TF 4-32 Answer: Difficulty: Heading:

TF 4-33 Answer: Difficulty: Heading:

TF 4-34 Answer: Difficulty: Heading:

TF 4-35

Answer: Difficulty: Heading:

TF 4-36

Answer: Difficulty:

t east Suppliers Because consumers have choice, they also have considerable power to influence market prices. f moderate Buyers Intensive advertising and price wars suggest competitive rivalry is high. t moderate Intensity of Competitive Rivalry Each activity in a firm‘s value chain should contribute to margin. t moderate Industry and Organizational Value Chain Analysis Firms competing in the same industry will have identical value chains. f moderate Industry and Organizational Value Chain Analysis

Both primary and support activities contribute both to a firm‘s costs as well as to the ability of a firm to deliver value to its customers t easy Industry and Organizational Value Chain Analysis

The impact of changes in social forces on an industry occurs over a relatively long period of time. t moderate

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Heading: TF 4-37 Answer: Difficulty: Heading: TF 4-38

Answer: Difficulty: Heading: TF 4-39

Answer: Difficulty: Heading: TF 4-40

Answer: Difficulty: Heading: TF 4-41 Answer: Difficulty: Heading:

TF 4-42

Answer: Difficulty: Heading: TF 4-43 Answer: Difficulty: Heading:

PEST Scenario planning incorporates alternative futures into the strategic planning process. t easy PEST In Porter‘s view, strategy in industries dominated by internet technologies is fundamentally different from strategy in other industries. f moderate New Economy Models Technology and electronic commerce have the potential to transform a firm‘s value chain. t moderate New Economy Models With a blue ocean strategy, firms seek to exploit existing demand among existing customers. f easy Blue Ocean Strategy With a red ocean strategy, firms seek to create uncontested market spaces. f easy Blue Ocean Strategy

The key challenge for global firms lies in managing the tradeoff between global integration and local responsiveness. t challenging Global Industry Models Competitors are not considered stakeholders for the purpose of stakeholder analysis. f easy Stakeholder Analysis

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TF 4-44 Answer: Difficulty: Heading: TF 4-45 Answer: Difficulty: Heading:

TF 4-46 Answer: Difficulty: Heading:

TF 4-47

Answer: Difficulty: Heading:

TF 4-48 Answer: Difficulty: Heading: TF 4-49

Answer: Difficulty: Heading: TF 4-50

Dominant stakeholders are often vocal but have little legitimacy or power. f moderate Stakeholder Analysis One aspect of an industry value chain can be more profitable than another. t moderate Industry and Organization Values Chain Analysis Competitive cooperation is considered illegal in many jurisdictions. f challenging Cooperation and Competition: Game Theory Analytical frameworks have a tendency to add complexity to the evaluation of an industry. f moderate Scenario Planning

Corporate Social Responsibility can be a source of competitive advantage. t easy Stakeholder Analysis Dominant Stakeholders possess all three attributes (power, legitimacy and urgency) in the stakeholder typology f easy Stakeholder Analysis Environmental analysis will not affect strategic options if the firm is currently not experiencing threats to the current operating environment.

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Answer: Difficulty: Heading:

f moderate Summary

Chapter Five: Environment Analysis: The Strategy– Environment Linkage Multiple Choice MC 5-1 a. b. c. d.

Answer: Difficulty: Heading:

MC 5-2 a. b. c. d.

Answer: Difficulty: Heading: MC 5-3 a. b. c. d.

Answer: Difficulty: Heading: MC 5-4 a. b.

The relevant environment for strategic analysis is the organization‘s competitive sphere political jurisdiction boundaries industry or market segment d easy Step 1: Focus the Environment Analysis From the Profit Model would observe the airline industry as operating in an environment of low variable cost structures high fixed cost structures low break-even points low fixed cost structure b moderate Profit as a Focusing Tool A company who successful gains market share which acts as a barrier to entry may be working in an industry exhibiting high break-even points low fixed cost structure low variable cost structure low break-even points a moderate Profit as a Focusing Tool Organization‘s that are outperforming their industry have aligned operations with efficiency strategy with environment

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c. d.

Answer: Difficulty: Heading:

MC 5-5 a. b. c. d.

Answer: Difficulty: Heading:

MC 5-6 a. b. c. d.

Answer: Difficulty: Heading:

MC 5-7 a. b. c. d.

Answer: Difficulty: Heading:

MC 5-8 a. b. c.

managerial preferences with mission strategy with competitors b moderate Step 1: Focus the Environment Analysis Strategic goals establish managerial preferences performance expectations operation efficiency targets organizational boundaries b easy Demand

An organization‘s value proposition is based on managerial preferences and organizational capabilities competitive pressures and organizational response customer appeal and competitive differentiation consumer demand and technological solutions c moderate The Strategic Proposal as a Focusing Tool

If an organization‘s fixed costs are relatively high, then the strategic focus is on minimizing variable costs maximizing through-put reducing fixed costs increasing leverage b challenging The Profit Model as a Focusing Tool

Strategic proposals requiring significant up-front investment would benefit from a lengthy implementation period worst case scenario planning strong leadership

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d.

price stability in the marketplace

Answer: Difficulty: Heading:

b challenging The Profit Model as a Focusing Tool

MC 5-9 a. b. c. d.

Answer: Difficulty: Heading:

MC 5-10 a. b. c. d.

Answer: Difficulty: Heading:

MC 5-11 a. b. c. d.

Answer: Difficulty: Heading:

MC 5-12 a. b. c. d.

A macro-environment scan is a search for short-term changes in the external environment economic forces with competitive implications long-term social, economic, and technical trends alignment of strategy with environment c easy Minimizing the Risks of Focus A focused environment analysis is focuses on social trends current and future changes in technology An informal and continuous process Formal analysis of fit between organization and the defined environment d moderate Minimizing the Risks of Focus

Environmental forces can be classified as market structure, consumer preferences, technology, and supplier base supply, demand, competition, and governmental time horizon, break-even point, barriers to entry, pace of change product market focus, governmental, organizational boundaries, and demand b easy Step 2: Test the StrategyEnvironmental Linkage One of the considerations when evaluating the fit between a strategic proposal and demand is the preferences of the management team likelihood of competitive reaction response of the regulators bargaining power of the buyers

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Answer: Difficulty: Heading:

MC 5-13 a. b. c. d.

Answer: Difficulty: Heading:

MC 5-14 a. b. c. d.

Answer: Difficulty: Heading:

MC 5-15 a. b. c. d.

Answer: Difficulty: Heading: MC 5-16 a. b. c. d.

Answer:

d easy Demand

One of the considerations when evaluating the fit between a strategic proposal and supply is competition for raw materials customer bargaining power threat of new entrants likelihood of competitive response a easy Supply

Wal-Mart‘s reluctance to expand to expanding countries like Brazil was due in part by expensive land high fixed costs supplier capabilities High break-even point a easy Supply

One of the considerations when testing the strategic proposal competition link is

break-even point Technology bargaining power of suppliers industry attractiveness d moderate Supply Trade policy is one of the considerations associated with the linkage between strategy and environment import government export c

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Difficulty: Heading: MC 5-17 a. b. c. d.

Answer: Difficulty: Heading: MC 5-18 a. b. c. d.

Answer: Difficulty: Heading:

MC 5-19 a. b. c. d.

Answer: Difficulty: Heading: MC 5-20 a. b. c. d.

Answer: Difficulty: Heading: MC 5-21 a.

easy Government Research grants are an example of industrial support entry barriers wage subsidies government support d easy Government In the strategy environment linkage business environment model (BEAM) assessing individual competitor strategies is a test of your organization‘s proposal to demand government supply competition d easy Competition

A key priority in the early stages of analysis of the strategy/environment linkage is data collection break-even analysis goal setting Focus d moderate Step 3: Forecast Performance Where the strategy/environment linkage is marginal, the proposal should be reserved for scenario planning retained for comparison purposes re-evaluated subjected to rigorous cost- benefit analysis c moderate Step 3: Forecast Performance

The purpose of forecasting the performance of a strategic proposal is to ensure management is committed to the initiative

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b. c. d.

Answer: Difficulty: Heading: MC 5-22 a. b. c. d.

Answer: Difficulty: Heading:

MC 5-23 a. b. c. d.

Answer: Difficulty: Heading:

MC 5-24 a. b. c. d.

Answer: Difficulty: Heading:

MC 5-25 a. b.

sustainability of the enterprise stakeholder priorities have been addressed consistency with the strategic goals d moderate Step 3: Forecast Performance

A small winery that intends to age all of its products is an example of an industry with high fixed cost structures high variable cost structures high break even points structures inflexible investment structures d moderate The Profit Model as a Focusing Tool

Defining the right time horizon will involve the following factors: pace of external change, flexibility of commitment, implementation horizon flexibility of commitment, resource capabilities and implementation horizon pace of external change, resource capabilities and flexibility of commitment pace of external change, implementation horizon and resource capabilities a moderate Defining the Right Time Horizon

A focused environmental analysis will involve issue-continuous informal process analysis of fit with forces in defined environments fundamental social economic and technical trends identify events of potential impact to the business b challenging Minimizing the Risks of Focus

When analyzing competition for raw material in the business environment analysis model (BEAM) the environmental force being considered is Supply Government

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c. d.

Demand Competition

Answer: Difficulty: Heading:

a moderate Step 2: Test the StrategyEnvironment Linkage

True/False TF 5-26

Answer: Difficulty: Heading:

TF 5-27

Answer: Difficulty: Heading:

TF 5-28

Answer: Difficulty: Heading:

TF 5-29

Answer: Difficulty: Heading:

TF 5-30

The firm‘s current performance assessment will determine the time horizon for the environment analysis. t easy Step 1: Focus the Environment Analysis A strong performance record suggests the fit between strategy and the environment is marginal. f moderate Performance Assessment as a Focusing Tool

A proposal‘s value proposition—the very core of strategy—defines a tangible benchmark for testing customer appeal and competitive differentiation. t moderate Performance Assessment as a Focusing Tool

A proposal to enter a new geographic region requires the analyst to consider shortterm market conditions. f moderate Performance Assessment as a Focusing Tool In organizations with high fixed costs, operating volumes are a key consideration.

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Answer: Difficulty: Heading:

TF 5-31

Answer: Difficulty: Heading:

TF 5-32

Answer: Difficulty: Heading:

TF 5-33 Answer: Difficulty: Heading:

TF 5-34

Answer: Difficulty: Heading:

TF 5-35

Answer: Difficulty: Heading:

TF 5-36

f easy The Profit Model as a Focusing Tool In organizations with high variable costs, the assumptions associated with key input costs are of critical importance. t moderate The Profit Model as a Focusing Tool A strategic proposal where will be little salvage value if things do not work out is an example of an inflexible investment structure. t easy The Profit Model as a Focusing Tool

The timing of investment commitments creates differing levels of risk for the firm. t easy The Profit Model as a Focusing Tool The impact of shortening the product life cycle is to compress the time horizon for planning purposes. t challenging Defining the Right Time Horizon The time horizon for strategic proposals that require significant organizational change for success is relatively short. f moderate Defining the Right Time Horizon If the environmental analysis is too narrow in scope, new market opportunities could be overlooked.

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Answer: Difficulty: Heading:

TF 5-37

Answer: Difficulty: Heading:

TF 5-38

Answer: Difficulty: Heading:

TF 5-39

Answer: Difficulty: Heading:

TF 5-40

Answer: Difficulty: Heading:

TF 5-41

Answer: Difficulty: Heading:

TF 5-42

t moderate Minimizing the Risks of Focus On-going environmental scans are used to reduce the risk of missing threats arising from unconventional sources on the fringe of the business environment. t moderate Minimizing the Risks of Focus New technology is often the mechanism used by outsiders to overcome barriers to entry in traditional industries. t challenging Minimizing the Risks of Focus Environmental scans and recycling are two mechanisms used to prevent strategic myopia in the analysis process. t moderate Minimizing the Risks of Focus Testing the strategy-environmental linkage requires a rigorous assessment of the potential costs and benefits of each proposal. f easy Step 2: Test the StrategyEnvironment Linkage New product failures can be viewed as an example of a strategy that was not well aligned with the demand conditions of the environment. t moderate Demand

Industrial buyers, such as automakers, often have a high degree of buyer power.

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Answer: Difficulty: Heading:

TF 5-43 Answer: Difficulty: Heading: TF 5-44

Answer: Difficulty: Heading: TF 5-45

Answer: Difficulty: Heading:

TF 5-46

Answer: Difficulty: Heading:

TF 5-47

Answer: Difficulty: Heading: TF 5-48

Answer: Difficulty: Heading:

t easy Demand

The internet has reduced the bargaining power for both buyers and suppliers. f challenging Demand In retailing, the ability of suppliers to support the firm‘s strategic initiatives is a consideration when evaluating the strategy/demand linkage. f easy Demand In service-intensive industries, employee recruitment is a consideration when evaluating the strategy-supply linkage. t moderate Supply

Knowing your competitors, like knowing your customers, is crucial to sustainability and profitability. t moderate Competition

Regulatory oversight and governmental investments have changed the business environment since 2008. t moderate Government The consequences of not implementing the strategic proposals as planned should be considered a part of the test of strategy-environment linkages. f easy Government

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TF 5-49

Answer: Difficulty: Heading:

TF 5-50

Answer: Difficulty: Heading:

Strategic goals for revenue growth need to be evaluated based on projected operating costs. f easy Step 3: Forecast Performance

Even though total analysis is not complete at the Strategy-Environment linkage stage, it is still useful to evaluate the strategic proposal with other viable options. t easy Step 4: Rank against other proposals

Chapter Six: Resource and Capabilities Analysis: The Strategy–Resource Linkage Multiple Choice MC 6-1 a. b. c. d.

Answer: Difficulty: Heading:

MC 6-2 a. b. c. d.

Answer: Difficulty:

Some of the resources required to execute a strategic proposal include forecasts, budgets, and sales projections financial, procedural, and environmental operating, management, and equipment financial, operating, and marketing D easy The Nature of Resources versus Capabilities

Scale of facilities and link to the scientific community our Resource category examples related to corporate reputation human resources development marketing C easy

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Heading:

MC 6-3 a. b. c. d.

Answer: Difficulty: Heading:

MC 6-4 a. b. c. d.

Answer: Difficulty: Heading:

MC 6-5 a. b. c. d.

Answer: Difficulty: Heading:

MC 6-6 a. b. c.

The Nature of Resources versus Capabilities

Core competencies are skills possessed by companies that underlie their products and business units skills possessed only by the organization easy to identify and define never change over time A moderate Other Characterizations of Resources

The core skills of an organization represent managerial know-how and strong links to the investor community knowledge and experience developed over time proprietary technology and alliances with the scientific community capacity to raise capital and flexible work rules B moderate Other Characterizations of Resources

Using the VRIO framework, if an organization‘s service offering is valuable but not rare, the organization is most likely to be experiencing Sustained competitive advantage, above normal economic performance temporary competitive advantage, above normal economic performance competitive parity, normal economic performance competitive disadvantage, below normal economic performance C challenging Other Characterizations of Resources

Resources that have the potential to give an organization a competitive advantage are expensive, readily transferrable, covered by patents, and developed over time single purpose, embedded in organizational routines, easy to copy, short lived valuable, rare, difficult to copy, and organized effectively

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d.

Answer: Difficulty: Heading:

MC 6-7 a. b. c. d.

Answer: Difficulty: Heading:

MC 6-8 a. b. c. d.

Answer: Difficulty: Heading:

MC 6-9 a. b. c. d.

Answer: Difficulty: Heading:

codified, sustainable, technical, and sufficient C easy Competitive Advantage from Resources and Capabilities

Using the VRIO framework, if an organization‘s service offering is valuable, rate but not costly to imitate, the organization is most likely to be experiencing Sustained competitive advantage, above normal economic performance temporary competitive advantage, above normal economic performance competitive parity, normal economic performance competitive disadvantage, below normal economic performance B challenging Other Characterizations of Resources

The advantage provided by resources that are held by few competitors is enduring sustainable temporary enabling C moderate Competitive Advantage from Resources and Capabilities Resources with the potential to provide a sustainable advantage as opposed to a competitive advantage can be modified by the competitor upgraded reasonably easily purchased in factor markets leveraged by the organization D challenging Other Characterizations of Resources

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MC 6-10 a. b. c. d.

Answer: Difficulty: Heading:

MC 6-11

Competitive advantages that are not intuitively obvious are an example of causal ambiguity competitive parity inimitable resources path-dependency A moderate Competitive Advantage from Resources and Capabilities

The capacity to stimulate and support strategies based on cost efficiency and price is an example of what organizational capability

a. b. c. d.

Cross-unit synergies productivity innovation speed

Answer: Difficulty: Heading:

B moderate

MC 6-12 a. b. c. d.

An organization‘s resources can be enhanced or undermined by how rare the resources are the organization‘s product market focus the break-even point the organization‘s social values

Answer: Difficulty: Heading:

D moderate Competitive Advantage from Resources and Capabilities

MC 6-13 a. b. c. d.

A resource-pushed strategy is one that lacks sufficiency leverages unique capabilities is sustainable can be readily copied

Answer: Difficulty: Heading:

B moderate The Driving Role of Resources

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MC 6-14 a. b. c. d.

Answer: Difficulty: Heading:

MC 6-15 a. b. c. d.

Answer: Difficulty: Heading:

MC 6-16 a. b. c. d.

Answer: Difficulty: Heading:

MC 6-17 a. b. c. d.

Answer: Difficulty: Heading:

The purpose of evaluating the strategy-resources linkage is to test for profitability managerial fit material gaps sustainability D challenging Competitive Advantage from Resources and Capabilities One of the elements taken into consideration when conducting a resource analysis by strategy component is managerial preferences break-even point government regulation value proposition D easy Resource Analysis

One of the considerations when evaluating resource gaps is the cost of failure likelihood of government subsidies nature of a competitive response product market focus a easy Step 3: Develop Gap-Closing Analysis Strategic proposals that fit well with the environment and available resources are further evaluated based on

product-market focus break-even point the level of initial investment managerial preferences d moderate Step 3: Develop Gap-Closing Analysis

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MC 6-18 a. b. c. d.

Answer: Difficulty: Heading: MC 6-19 a. b. c. d.

Answer: Difficulty: Heading:

MC 6-20 a. b. c. d.

Answer: Difficulty: Heading:

MC 6-21 a. b. c. d.

Answer: Difficulty: Heading:

MC 6-22 a. b. c.

In a rapidly changing environment, organizations need resources that are stable easily replicated adaptable single-use c moderate Dynamic Capabilities Diversification can be defined as an organization‘s ability to define the scope of its operations divest of non-core activities match the capabilities of its competitors leverage its current resources d moderate Resources and the Scope of the Firm A firm‘s value chain of activities is sometimes referred to as horizontal integration competitive parity structural functionality vertical integration d easy Resources and the Scope of the Firm The scope of a firm is traditionally defined by its work force, assets, and location product line, production capacity, and technological base product market, geography, and vertical integration technology, employee capabilities, and procedures c easy Resources and the Scope of the Firm The purpose of assessing an organization‘s capabilities is to determine what the competition might do in response government might choose to regulate suppliers might try to copy

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d.

Answer: Difficulty: Heading:

MC 6-23 a. b. c. d.

Answer: Difficulty: Heading:

MC 6-24 a. b. c. d.

Answer: Difficulty: Heading:

MC 6-25 a. b. c. d.

Answer: Difficulty: Heading:

organization might do to leverage an opportunity d moderate The Driving Role of Resources

Supplier relationships, logistics reliability and efficiency, and quality reputation are examples of the following resource category: operations development financial corporate reputation a moderate The Nature of Resources versus Capabilities

The Dow Chemical company is the leader in the low-cost production of commodity chemicals. Dow‘s ability to execute this is observed as a core competence distinctive competence core skill distinctive skill B moderate Other Characterizations of Resources When considering the VRIO model, understanding how many competing firms possess specific, valuable resources and capabilities answers the question of value rareness inimitability organization b moderate Competitive Advantage from Resources and Capabilities

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True/False TF 6-26 Answer: Difficulty: Heading:

TF 6-27

Answer: Difficulty: Heading:

TF 6-28

Answer: Difficulty: Heading:

TF 6-29

Answer: Difficulty: Heading:

TF 6-30

Answer: Difficulty:

Resources provide an organization with the potential to act. t easy The Nature of Resources versus Capabilities

Having depth, experience, skills, and flexibility of management, professional staff, and workforce all contribute to a strong human resource capability t moderate The Nature of Resources versus Capabilities

One of the requirements to sustained competitive advantage is to have a resource or capability that is costly to imitate T moderate The Nature of Resources versus Capabilities

Resources considered to be valuable give the organization a sustainable competitive advantage. f moderate The Nature of Resources versus Capabilities Resources that are easy to imitate or readily substitutable give the organization a competitive advantage. f moderate

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Heading:

TF 6-31 Answer: Difficulty: Heading:

TF 6-32

Answer: Difficulty: Heading:

TF 6-33

Answer: Difficulty: Heading:

TF 6-34

Answer: Difficulty: Heading:

TF 6-35 Answer: Difficulty: Heading: TF 6-36

Answer: Difficulty: Heading:

The Nature of Resources versus Capabilities Unique historical conditions can give an organization a competitive advantage. t easy Competitive Advantage from Resources and Capabilities Interconnected organizational capabilities are seldom sources of competitive advantage. f moderate Competitive Advantage from Resources and Capabilities The social values of an organization can enhance or undermine the resources of the organization. t easy Competitive Advantage from Resources and Capabilities Resources can drive strategy, but they seldom constrain strategy.

f easy The Dual Role of Resources and Capabilities Innovative strategic proposals built on unique resources are unlikely to fail. f challenging Resource Analysis Inwardly focused firms that base their strategies on leveraging existing resources are well positioned to take advantage of changes in customer preferences. f challenging The Driving Role of Resources

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TF 6-37

Answer: Difficulty: Heading: TF 6-38 Answer: Difficulty: Heading:

TF 6-39

Answer: Difficulty: Heading:

TF 6-40 Answer: Difficulty: Heading:

TF 6-41

Answer: Difficulty: Heading:

TF 6-42 Answer: Difficulty: Heading:

TF 6-43

One of the factors to consider when evaluating the strategy-resource linkage is the feasibility of closing any material gaps. t moderate Resource Analysis Qualitative resource requirements are often difficult to predict. t moderate Step 1: Identify Resource Requirements A strategy based on superior product features will require a careful analysis of the development resources of the organization. t moderate Step 1: Identify Resource Requirements Strategic proposals with formidable resource gaps should be abandoned. f challenging Step 2: Test the StrategyResource Linkage Gap-closing initiatives that depend on some form of organization change are riskier than those entailing additional costs. t challenging Step 3: Develop Gap-Closing Analysis

Above normal profits are possible even if a resource is inexpensive to imitate. f moderate The Nature of Resources versus Capabilities

Failure to implement a strategic proposal may result in penalties such as loss of market position.

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Answer: Difficulty: Heading:

TF 6-44

Answer: Difficulty: Heading:

TF 6-45

Answer: Difficulty: Heading:

TF 6-46

Answer: Difficulty: Heading:

TF 6-47 Answer: Difficulty: Heading:

TF 6-48

Answer: Difficulty: Heading:

t moderate Step 3: Develop Gap-Closing Analysis In rapidly changing environments, organizations need resources that can be reconfigured relatively easily. t easy Step 3: Develop Gap-Closing Analysis Strategic alliances are sometimes used to complement the capabilities of the organization. t moderate Dynamic Capabilities

The creation of new markets, new products, new processes are examples of a productive organizational capabilities. f moderate Organizational Capabilities

An acquisition could be a mechanism for addressing a resource gap. t moderate Resources and the Scope of the Firm The purpose of testing the strategy-resource linkage is to establish where value can be created. t moderate Resources and the Sharing Economy

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TF 6-49 Answer: Difficulty: Heading:

TF 6-50

Answer: Difficulty: Heading:

Leveraging current resources is an example of horizontal diversification. f easy Resources and the Scope of the Firm

The first to market with new products, first to develop new technologies exhibits an organizational capability of speed t easy Organizational Capabilities

Chapter Seven: Organizational Analysis: The Strategy– Organizational Design Linkage Multiple Choice

MC 7-1 a. b. c. d.

Answer: Difficulty: Heading:

MC 7-2 a. b. c. d.

Answer: Difficulty: Heading: MC 7-3

An example of an organizational capability is thorough data collection, thorough analysis believing everything comes down to money Decision making close to the customer Ability to be a low-cost producer d easy Choosing a Structure

In dynamic environments, competitive advantages arise from dominant scale adaptive organizational capabilities attractive niche markets exploiting resources b moderate Choosing a Structure An organization striving to be a low-cost producer will require the supporting cultural

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belief that a. b. c. d.

we would rather be right than quick. we believe in delegation of responsibility and authority everything comes down to money. new product ideas are precious

Answer: Difficulty: Heading:

c easy Organizational Design and Capabilities

MC 7-4 a. b. c. d.

Organizational capabilities are related to order and control culture and behaviour mission and vision finance and marketing

Answer: Difficulty: Heading:

b easy Organizational Design and Capabilities

MC 7-5 a. b. c. d.

Answer: Difficulty: Heading: MC 7-6 a. b. c. d.

Answer: Difficulty: Heading: MC 7-7 a.

The example of business units, functional units, and geographic regions working together cooperatively illustrates boundary management innovation cross-unit synergies productivity c moderate Leadership Behavior Speed and innovation are examples of employee competencies research and development tactics organizational capabilities managerial preferences c easy Leadership Behavior To develop new organizational capabilities culture and behavior will need to change

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b. c. d.

Answer: Difficulty: Heading: MC 7-8 a. b. c. d.

Answer: Difficulty: Heading:

MC 7-9 a. b. c. d.

Answer: Difficulty: Heading:

MC 7-10 a. b. c. d.

Answer: Difficulty: Heading: MC 7-11 a. b. c. d.

Answer:

new management will have to be hired employees will require additional compensation the business environment must remain stable a moderate Leadership Behavior A cultural belief in employee empowerment suggests an organizational capability of cross-cultural effectiveness cost efficiency customer responsiveness product market focus c challenging Organizational Design and Capabilities Organizational capabilities can be influenced by quality and delivery promises made to customers resource gaps discretionary stakeholders management processes d easy Organizational Design and Capabilities The interactions of managers with their subordinates is a(n) capability observable behaviour constraint unique resource b moderate Organizational Design Levers Organizations that are indifferent to market-based information are internally focused using competitive standards commodity-based driven by external challenges a

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Difficulty: Heading: MC 7-12 a. b. c. d.

Answer: Difficulty: Heading: MC 7-13 a. b. c. d.

Answer: Difficulty: Heading:

MC 7-14 a. b. c. d.

Answer: Difficulty: Heading:

MC 7-15 a. b. c. d.

Answer: Difficulty: Heading:

moderate Decision-Making Processes Organizations that are driven by external challenges are using internal standards market focused resource-based focused on issues of culture b moderate Decision-Making Processes One action that can be taken to address a capability gap is to change the management focus performance standards organization structure mission statement c easy Changing Organizational Structure Reporting relationships are an element of an organization‘s mission external environment procedures structure d easy Organizational Structure

An organizational capability to be more often right than wrong with major capital investments must have the following related behavior decision making close to the customer thorough data collection, thorough analysis focus on activities that add financial value financial and time support for fledgling projects b easy Organizational Design and Capabilities

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MC 7-16 a. b. c. d.

Answer: Difficulty: Heading:

MC 7-17 a. b. c. d.

Answer: Difficulty: Heading:

MC 7-18 a. b. c. d.

Answer: Difficulty: Heading:

MC 7-19 a. b. c. d.

Answer: Difficulty: Heading:

MC 7-20

If an organization is structured by product line, communication will be difficult across geographic regions functional units organizational boundaries product groups d moderate Types of Organizational Structures

One of the drawbacks of a product organization is

the performance of each product line is hard to measure consumers have a single point of contact high need for cross-functional coordination management duplication d moderate Types of Organizational Structures One of the strengths of geographically organized firms is global efficiency limited duplication of effort local responsiveness global standards c challenging Types of Organizational Structures Matrix organizations are characterized by simplicity centralized control clear power balances ambiguity d moderate Types of Organizational Structures

A change in organizational structure that results in a negative outcome is an example of

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a. b. c. d.

Answer: Difficulty: Heading:

MC 7-21 a. b. c. d.

Answer: Difficulty: Heading:

MC 7-22 a. b. c. d.

Answer: Difficulty: Heading:

MC 7-23 a. b. c. d.

Answer: Difficulty: Heading:

a frozen preference group think recycling an unintended consequence d easy Performance Assessment and Reward Process A supporting cultural belief that new product ideas are precious will typically be supported by the following behavior(s): thorough data collection; thorough analysis decision making close to the consumer focusing on activities that add financial value financial and moral support for fledgling projects d moderate Organizational Design and Capabilities The organizational capability to be a low cost producer will require which of the following cultural beliefs? we would rather be right than quick we believe in delegation of responsibility and authority everything comes down to money new product ideas are precious c easy Organizational Design and Capabilities If a firm operates in international markets with localized tastes and preferences, the firm ideally will organize its structure as a functional organization product organization geographic organization matrix organization c moderate Types of Organizational Structures

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MC 7-24 a. b. c. d.

A leader that encourages international careers and no race-based bias is demonstrating an organizational capability in productivity innovation cross-cultural effectiveness cross-unit synergies

Answer: Difficulty: Heading: MC 7-25 a. b. c. d.

c moderate Leadership Behavior Enhancing organizational capabilities in Innovation will required a behavior that focus on the key cost drivers of the organization speeding up decision making and operating processes how one handles well-intended failure encourages group behavior

Answer: Difficulty: Heading:

c challenging Leadership Behavior

True/False TF 7-26

Answer: Difficulty: Heading:

TF 7-27

Answer: Difficulty: Heading:

TF 7-28

Answer: Difficulty: Heading:

TF 7-29

Traditional approaches to strategy assume competitive advantage can be derived from exploiting organizational capabilities and resources. t moderate Organizational Design and Capabilities Organizational capabilities that lend themselves to rapid adaptation have the potential to create sustainable competitive advantages. t moderate Organizational Design and Capabilities The capacity to support strategies based on cost efficiency is an example of a productivity capability. t easy Organizational Design and Capabilities Culture is not a factor when attempting to develop an organizational capability in

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innovation.

Answer: Difficulty: Heading:

TF 7-30

Answer: Difficulty: Heading:

TF 7-31

Answer: Difficulty: Heading:

TF 7-32

Answer: Difficulty: Heading:

TF 7-33

Answer: Difficulty: Heading:

TF 7-34

Answer: Difficulty: Heading:

f challenging Organizational Design and Capabilities

Cross-unit synergies can take place in an environment where information sharing is limited. f easy Leadership behavior

One of the actions that may be required to close an organizational gap is a change in leadership. t moderate Organizational Design and Capabilities One of the functions of an organizational chart is to align the tasks of the organization with employee strengths. f moderate Organizational Design and Capabilities The ability to analyze performance by profit centers is one of the strengths of a product organizational structure. t challenging Types of Organizational Structures A geographical organizational structure is useful for firms planning to internationalize. t challenging Types of Organizational

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Structures TF 7-35

Answer: Difficulty: Heading:

TF 7-36

Answer: Difficulty: Heading:

TF 7-37

Answer: Difficulty: Heading:

TF 7-38

Answer: Difficulty: Heading:

TF 7-39 Answer: Difficulty: Heading:

TF 7-40

Managers in a matrix organization are encouraged to focus on worldwide product strategies only. f easy Types of Organizational Structures

If an organization wants to expand its‘ capabilities in speed to market, it will require a behavior that supports innovation and experimentation. f moderate Types of Organizational Structures

Learning from competitors is an example of how an alliance could enhance a firm‘s organizational capabilities.

T challenging Types of Organizational Structures

One of the organizational design tests advanced by Goold and Campbell is: Does the design meet the requirement for simplicity?

F Moderate Changing Organizational Structures Performance assessment has the potential to shape organizational capabilities.

T Moderate Management Process

Operating processes are those associated with how decisions are made within an organization.

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Answer: Difficulty: Heading: TF 7-41

Answer: Difficulty: Heading: TF 7-42

Answer: Difficulty: Heading: TF 7-43

Answer: Difficulty: Heading: TF 7-44

Answer: Difficulty: Heading: TF 7-45

Answer: Difficulty: Heading:

F Moderate Operating Processes Job rotation between organizational units is a technique for increasing cross-unit cooperation.

T Easy Operating Processes Changing the reward processes to improve productivity can sometimes result in unintended consequences.

T Moderate Operating Processes Changing the reward processes to alter behaviours may require a change in leadership behaviour.

T Moderate Operating Processes Changing the organizational structure to alter behaviours is probably not the most effective solution.

T challenging Leadership Behavior How the manager behaves is not considered an instrumental factor in bringing about a change in organizational capability.

F Moderate Do You Have the Right Leaders?

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TF 7-46

Answer: Difficulty: Heading:

TF 7-47

Answer: Difficulty: Heading:

TF 7-48

Answer: Difficulty: Heading:

TF 7-49

Answer: Difficulty: Heading: TF 7-50

Answer: Difficulty: Heading:

Today‘s leaders are often evaluated on the basis of the results they achieve as well as on how those results are achieved.

T Moderate Do You Have the Right Leaders?

A way to promote the desired behavior is to create promotion criteria that rewards for achieved goals as well as how those goals were attained..

T Moderate Do You Have the Right Leaders?

Frequent changes in organizational structure or processes lead to increased employee commitment to the strategic initiatives of the firm.

F challenging Using All Three Leverage Points

A strong company culture can easily change deeply ingrained behavior that management wishes to change.

F challenging Culture ―Deep-seated‖ culture can be a real asset if it supports the behavior and capabilities required by the proposed strategy t moderate Culture

Chapter Eight: Management Preference Analysis: The Strategy–Management Preference Linkage Multiple Choice MC 8-1

The mandate of the Board of Directors is

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a. b. c. d.

Answer: Difficulty: Heading:

MC 8-2 a. b. c. d.

Answer: Difficulty: Heading:

MC 8-3 a. b. c. d.

Answer: Difficulty: Heading:

MC 8-4 a. b. c. d.

Answer: Difficulty: Heading:

profitability shareholder wealth regulatory compliance corporate governance d easy Reconciling Stakeholder Interests Corporate governance is the mechanism that advances the agenda of the shareholders sets the boundaries for the management constrains the organization reconciles competing shareholder interests b challenging Reconciling Stakeholder Interests

Managers that exhibit a character dimension of collaboration exhibit fair, equitable, proportionate, even-handed, socially responsible brave, determined, tenacious, resilient, confident cooperative, collegial, open-minded, flexible, interconnected takes ownership, accepts consequences, conscientious, responsible c moderate Competencies

Corporate controls on the actions of managers are supported by competitors regulatory constraints economic conditions product market focus b moderate Corporate Governance

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MC 8-5 a. b. c. d.

Answer: Difficulty: Heading:

MC 8-6 a. b. c. d.

Answer: Difficulty: Heading:

MC 8-7 a. b. c. d.

Answer: Difficulty: Heading:

MC 8-8 a. b.

Boards of Directors are often not as effective as they might be because the board too peripheral to the organization is focused on meeting the needs of the shareholders is dominated by internal management does not make the day-to-day decisions of the corporation c moderate Corporate Governance

A leadership style that is categorized as patient, calm, composed, self-controlled, and prudent can be described as humility courage temperance transcendence c easy Corporate Governance

Corporate social responsibility refers to a corporation‘s duty to compensate for benefits received from a harmful or unjust situation pay its fair share of taxes make a profit use its assets for the benefit of the shareholders a moderate Corporate Social Responsibility

Expecting corporations to address social ills is often countered with the argument based on efficient use of resources furthers the firm‘s self interest

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c. d.

misappropriation of assets function of wealth creation

Answer: Difficulty: Heading:

c moderate Corporate Social Responsibility

MC 8-9 a. b. c. d.

Answer: Difficulty: Heading:

MC 8-10 a. b. c. d.

Answer: Difficulty: Heading:

MC 8-11 a. b. c. d.

Answer: Difficulty: Heading:

MC 8-12 a.

Management preferences with respect to strategy serve to simplify the decision-making process bridge the gap between the internal and external environment promote flexibility motivate the efforts of the firm d moderate Management as a Key Stakeholder Managers with a strong need for achievement are most likely to favor stable performance aggressive growth targets following the competition the status quo b moderate Personal Attributes

―We must not be dependent on one single product line‖ is an example of a management belief that impacts product market focus value proposition core activities goals a moderate Frozen Preference

Managerial preferences have an indirect role on the strategic choices

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b. c. d.

environmental assessment risk levels break-even point

Answer: Difficulty: Heading:

b easy Personal Attributes

MC 8-13 a. b. c. d.

Answer: Difficulty: Heading:

MC 8-14 a. b. c. d.

Answer: Difficulty: Heading:

MC 8-15 a. b. c. d.

Answer: Difficulty: Heading: MC 8-16 a. b. c. d.

A frozen preference occurs when a manager abandons a strategic option follows a ‗wait and see‘ position on a strategic issue takes a high-profile position on a strategic issue recycles a strategic option c challenging Job Context

An example of top management value proposition that could impact strategy analysis and action is

―We must grow in volume and ROI‖ ―We must not be dependent on one single product line.‖ ―We must be a leader in manufacturing to keep costs down and quality up.‖ ―We must compete on innovation in processes and basic products, not price‖ d moderate Competencies

Strategic proposals that are extensions of the current strategy are most likely to generate controversy agreement disagreement negativity b moderate Competencies One technique for addressing minor discrepancies between the required and observed strategic preferences of the management team is to rework all of the proposals reassign one of the managers combine two or three of the proposals compare the forecasts of firm performance

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Answer: Difficulty: Heading:

MC 8-17

a. b. c. d.

Answer: Difficulty: Heading:

MC 8-18 a. b. c. d.

Answer: Difficulty: Heading:

MC 8-19 a. b. c. d.

Answer: Difficulty: Heading:

MC 8-20 a. b.

d moderate Step 3: Develop Gap Closing Analysis When persuasion fails to resolve moderate conflict between required and observed managerial preferences, modifying the strategy may not be the best solution because the new proposal

has insufficient support to be successful could fail the test of product market focus will stall the analysis process has to be compatible with the environment and the resources d easy Step 3: Develop Gap Closing Analysis

Examples of Core Activity proposition preferences may include specific market focus market dominance price features and execution activities to internalize, degree of integration d easy Step 1: Identify the Required Management Preferences

A cohesive management group that endorses a strategic initiative inconsistent with the strategic needs of the business could be considered an example of a politicized work environment frozen preference group think network effects c moderate Step 3: Develop Gap Closing Analysis The easiest way to reconcile the strategy/managerial preferences linkage is by taking organizational action asking the Board of Directors to decide

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c. d.

Answer: Difficulty: Heading:

MC 8-21 a. b. c. d.

Answer: Difficulty: Heading:

MC 8-22 a. b. c. d.

Answer: Difficulty: Heading:

MC 8-23 a. b. c. d.

Answer: Difficulty: Heading:

modifying strategy deferring a decision a moderate Step 3: Develop Gap Closing Analysis

Strategy needs to be consistent with the firm‘s management preferences as well as with the management preferences of customers suppliers regulators competitors d easy Management Preferences and Competitive Analysis

An economic argument against Corporate Social Responsibility is the inefficient use of resources when employed for other purposes. This is also known as inefficiency mismanagement misallocation misappropriation c moderate Corporate Social Responsibility

Bravery, determination, tenacity, and confidence are associated elements of which character dimension? humanity temperance drive courage d moderate Competencies

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MC 8-24 a. b. c. d.

If a firm operates from a position of self-interest and mistrust which impairs its ability to make good business decisions, the firm is lacking which character dimension? integrity collaboration accountability justice

Answer: Difficulty: Heading: MC 8-25 a. b. c. d.

a moderate Competencies ―We need to control every input to our product‖ is an example of a management belief that impacts which of the following areas? goals product market focus value proposition core activities

Answer: Difficulty: Heading:

d moderate Frozen Preference

True/False TF 8-26

Answer: Difficulty: Heading:

TF 8-27

Answer: Difficulty: Heading:

TF 8-28

Answer: Difficulty: Heading:

The general manager‘s role is to create value for the stakeholders using organizational resources. t challenging Value Creation, Capture, and Distribution One of the key considerations when evaluating the strategy-management preference linkage is: how value should be distributed. t moderate Value Creation, Capture, and Distribution The key stakeholder groups for most organization are shareholders, employees, and customers. t easy Reconciling Stakeholder Interests

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TF 8-29

Answer: Difficulty: Heading:

TF 8-30

Answer: Difficulty: Heading:

TF 8-31

Answer: Difficulty: Heading: TF 8-32 Answer: Difficulty: Heading: TF 8-33 Answer: Difficulty: Heading: TF 8-34 Answer: Difficulty: Heading: TF 8-35 Answer: Difficulty: Heading: TF 8-36

The interests of shareholders, employees, and customers are readily reconciled as all three parties want the organization to succeed. f challenging Reconciling Stakeholder Interests In many jurisdictions, the principal role of the Board of Directors is to act in the best interests of the shareholders. f easy Reconciling Stakeholder Interests Corporate performance crises are the result of failures in judgment on the part of senior management. t moderate Corporate Governance Internal controls and regulation are low-cost substitutes for integrity. f moderate Corporate Governance Strategic preferences of managers are derived from personal attributes. t easy Roots of Strategic Preference Insisting on the need for a brand name is an example of a managerial belief. t moderate Frozen Preference Job context defines the scope and nature of a manager‘s responsibilities. f moderate Job Context Having openly endorsed a strategic option, managers will find it difficult to modify

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their position.

Answer: Difficulty: Heading: TF 8-37

Answer: Difficulty: Heading: TF 8-38

Answer: Difficulty: Heading: TF 8-39

Answer: Difficulty: Heading:

TF 8-40

Answer: Difficulty: Heading:

TF 8-41

Answer: Difficulty: Heading:

t easy Frozen Preference Most strategic proposals will have similar consequences for senior managers in different job positions. f moderate Job Context Expectations of subordinates have little influence on a manager‘s strategic preferences. f easy Job Context Good managers engage in candid introspection with respect to the strategic choice processes of the organization. t moderate Matching Preferences and Strategy Strategic proposals that call for new ways of thinking about the business are likely to be contentious. t easy Step 1: Identify the Required Management Preferences A compromise solution is often used to address moderate conflicts between required and observed managerial preferences. t easy Step 3: Develop Gap-Closing Analysis

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TF 8-42

Answer: Difficulty: Heading:

TF 8-43 Answer: Difficulty: Heading: TF 8-44 Answer: Difficulty: Heading:

TF 8-45

Answer: Difficulty: Heading:

TF 8-46 Answer: Difficulty: Heading:

TF 8-47

Answer: Difficulty: Heading:

TF 8-48

When it is not possible to find a workable solution to conflicts between strategy and managerial preferences, the manager may need to be reassigned. t easy Step 3: Develop Gap-Closing Analysis The existence of Courage may contribute to agreement with poor decisions. f moderate Competencies An organization lacking humanity will allow short term gains to dictate strategy. f moderate Competencies

In highly politicized firms, managers often have hidden agendas that could compromise the strategic planning process. t challenging Framing the Gap-Closing Issues – Groups of Managers It is seldom useful to try predicting the response of competitors to emerging threats. f moderate Management Preferences and Competitive Analysis The personal history of the managers of competing firms can sometimes suggest how their firms will respond to strategic threats. t moderate Management Preferences and Competitive Analysis

Widespread lethargy and low productivity are examples of an organization lacking in drive.

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Answer: Difficulty: Heading: TF 8-49

t moderate Competencies An organization with a strong preference for budgets, personnel changes and investments may be too entrenched in goals and could make change harder to manage.

Answer: Difficulty: Heading: TF 8-50

t easy Frozen Preference Serious conflicts when choosing a strategy can lead to a disintegration of the business.

Answer: Difficulty: Heading:

t moderate Framing the Gap-Closing Issues – Groups of Managers

Chapter Nine: Strategic Choice and Strategic Processes Multiple Choice MC 9-1 a. b. c. d.

Answer: Difficulty: Heading:

MC 9-2 a. b. c. d.

Answer: Difficulty: Heading:

MC 9-3

One of the key organizational functions of strategy is to reduce ambiguity anticipate market trends assist with governance coordinate activities and behaviours D Easy Strategy as a Dynamic Process In situations of environmental uncertainty, a pre-determined strategic direction helps the organization negotiate the environment limits the organization promotes stability within the organization meets the expectations of stakeholders B challenging Strategy as a Dynamic Process One of the drawbacks of strategy is that it

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a. b. c. d.

Answer: Difficulty: Heading:

MC 9-4 a. b. c. d.

increases ambiguity over-simplifies increases complexity can be a negotiating ploy B moderate Strategy as a Dynamic Process

An intended strategy is controlled and focused on the present action-oriented and opportunistic planned and controlled episodic and spontaneous

Answer: Difficulty: Heading:

C Easy Strategy as a Dynamic Process

MC 9-5 a. b. c. d.

An intended strategy is planned and controlled bottom up and ongoing opportunistic and intuitive action-oriented and opportunistic

Answer: Difficulty: Heading:

a Easy Strategy as Planning

MC 9-6 a. b. c. d.

Answer: Difficulty: Heading: MC 9-7 a. b. c.

The relationship between strategic planning and performance is Positive subject to interpretation undetermined Negative C moderate Strategy as Planning One of the functions of the strategic planning process is to assess the internal and external environment set the annual budget prepare for the annual shareholders' meeting

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d.

Answer: Difficulty: Heading:

MC 9-8 a. b. c. d.

Answer: Difficulty: Heading:

MC 9-9 a. b. c. d.

Answer: Difficulty: Heading: MC 9-10 a. b. c. d.

Answer: Difficulty: Heading:

MC 9-11 a. b. c. d.

satisfy the shareholders A challenging Strategy as Planning

A PEST analysis will be part of which of the following sections of a strategic plan Overview of the Opportunity Risk Assessment and Contingency Plans Specific Elements of the Plan Market Opportunity and Industry Trends D Moderate Strategy as Planning

What mechanism can be used to improve the strategic planning process? discuss at the weekly operations meeting include customers and suppliers in the process use an internal facilitator limit the number of people involved in the process B moderate Strategy as Planning One of the elements of a formal strategic plan should be a contingency plan employee opinion survey statement from the Chair of the Board of Directors a list of the officers of the company A Easy Strategy as Planning

Some would argue that the only sustainable competitive advantage for an organization stems from its financial strength relationships learning ability supplier base

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Answer: Difficulty: Heading: MC 9-12 a. b. c. d.

Answer: Difficulty: Heading:

MC 9-13 a. b. c. d.

Answer: Difficulty: Heading:

MC 9-14 a. b. c. d.

Answer: Difficulty: Heading: MC 9-15 a. b. c. d.

Answer: Difficulty: Heading:

C Easy Strategy as Learning When strategy is viewed as a learning process, the decision making is top down number of individuals involved decreases timeframe becomes longer range of perspectives considered increases D challenging Strategy as Learning

Errors in judgment with respect to decision making are the result of a perspective shift inexperience cultural norms cognitive biases D Easy Strategy as Learning

The belief that one event has caused the other without proof or consideration of other potential confounding factor is known as Just world framing false consensus unwarranted causation D moderate Cognitive Biases The predisposition to relate two or more pieces of information simply because they are consumed within a similar timeframe confirmatory evidence bias hindsight bias illusory correlation unwarranted causation D moderate Cognitive Biases

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MC 9-16 a. b. c. d.

Answer: Difficulty: Heading:

MC 9-17 a. b. c. d.

Answer: Difficulty: Heading:

MC 9-18 a. b. c. d.

Answer: Difficulty: Heading:

MC 9-19 a. b. c. d.

Answer: Difficulty: Heading:

One of ways of limiting cognitive biases is to ask lots of questions restrict the amount of time spent on data collection accept that events which are concurrent are probably related count on the capabilities of the senior management team A moderate Cognitive Biases

An outcome of institutionalizing at the organization level will be conversation and dialogues experiences interactive systems rules and procedures D moderate Organizational Learning and Strategic Renewal Within the framework of strategic renewal, an outcome of integrating at the group level will be conversation and dialogues shared understanding experiences rules and procedures B moderate Organizational Learning and Strategic Renewal

One of the tensions that exists between intended and emergent strategy relates to commitment and resources mission and vision exploration and exploitation supply and demand C Easy Reconciling the Tensions in Strategic Renewal

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MC 9-20 a. b. c. d.

Answer: Difficulty: Heading:

MC 9-21 a. b. c. d.

Answer: Difficulty: Heading:

MC 9-22 a. b. c. d.

Answer: Difficulty: Heading: MC 9-23 a. b. c. d.

Answer: Difficulty: Heading:

Entrepreneurial organizations tend to need better feed-forward systems fewer procedures more networks stronger feedback systems D moderate Reconciling the Tensions in Strategic Renewal

In situations that require managing the processes of feedback and exploitation, the most appropriate style of leadership is managerial transformational Visionary transactional D moderate Leadership for Strategic Renewal Underestimating the complexity of problems, creating an illusion that we have management capabilities, is an example of which cognitive bias? false consensus Framing overconfidence representativeness C moderate Cognitive Biases If an individual tends to overestimate the degree to which he/she would have predicted the correct outcome, he/she exhibits: hindsight bias illusory correlation false consensus overconfidence A moderate Cognitive Biases

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MC 9-24 a. b. c. d.

Answer: Difficulty: Heading: MC 9-25 a. b. c. d.

Answer: Difficulty: Heading:

Shared understandings, mutual advancement and interactive systems are common integrating processes at the level business unit Group organization individual B Easy Cognitive Biases The Strategic Learnings Assessment Map (SLAM) depicts the tensions in strategic renewal between employees, management and customers employees, suppliers and customers individuals, groups, and management individuals, groups and organizations D Easy Reconciling the Tensions in Strategic Renewal

True/False TF 9-26 Answer: Difficulty: Heading:

TF 9-27 Answer: Difficulty: Heading:

TF 9-28

Strategy enables an organization to negotiate its environment successfully.

T moderate Strategy as a Dynamic Process Strategy coordinates activities and behaviours.

T Easy Strategy as a Dynamic Process

An intended strategy is one that emerges by trial and error over time.

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Answer: Difficulty: Heading:

TF 9-29 Answer: Difficulty: Heading: TF 9-30

Answer: Difficulty: Heading:

TF 9-31 Answer: Difficulty: Heading:

TF 9-32

Answer: Difficulty: Heading: TF 9-33

Answer: Difficulty: Heading: TF 9-34

Answer: Difficulty:

F Easy Strategy as a Dynamic Process – Strategy as Planning It would be unusual for a well-formulated strategy to fail during execution.

F moderate Cognitive Biases Intended and emergent strategies are oriented towards the future.

F moderate Strategy as a Dynamic Process – Strategy as Planning The strategic planning process and the budgeting process have similar purposes.

F Easy Strategy as a Dynamic Process – Strategy as Planning The performance benefits associated with strategy are often dependent on the quality of the conversation that takes place during the planning process.

T moderate Strategy as Planning In many organizations, strategic planning tools have been replaced with financial tools.

T Easy Strategy as Planning An internal facilitator who knows the organization well is the best choice for facilitating the strategic planning process.

F Easy

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Heading: TF 9-35

Answer: Difficulty: Heading:

TF 9-36

Answer: Difficulty: Heading: TF 9-37 Answer: Difficulty: Heading: TF 9-38 Answer: Difficulty: Heading:

TF 9-39

Answer: Difficulty: Heading:

TF 9-40 Answer: Difficulty: Heading:

TF 9-41

Strategy as Planning When strategy is viewed from a learning perspective, the scope of individuals involved in the process is reduced.

F moderate Strategy as Learning

A tendency to collect supporting information is a cognitive bias known as illusory correlation.

F moderate Cognitive Biases Root cause analysis is a good technique for avoiding information biases.

T challenging Cognitive Biases Organizational learning takes place at the employee, group, and enterprise level.

T moderate Organizational Learning and Strategic Renewal With respect to strategic renewal, the feed-forward process is the mechanism by which the organization is able to leverage its learning.

F moderate Reconciling the Tensions in Strategic Renewal

Entrepreneurial organizations could benefit from more intended strategy.

T Easy Reconciling the Tensions in Strategic Renewal Improvisation is a strategic renewal technique appropriate primarily for the entrepreneurial firm.

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Answer: Difficulty: Heading:

TF 9-42

Answer: Difficulty: Heading:

TF 9-43 Answer: Difficulty: Heading:

TF 9-44 Answer: Difficulty: Heading:

TF 9-45

Answer: Difficulty: Heading:

TF 9-46

Answer: Difficulty: Heading: TF 9-47

Answer: Difficulty:

F moderate Reconciling the Tensions in Strategic Renewal Transactional leaders are an appropriate choice for managing the processes of feedback and exploitation.

T easy Reconciling the Tensions in Strategic Renewal Strategic leadership takes on the key tasks of the visionary and the managerial leader.

T moderate Leadership for Strategic Renewal Strategic leaders are future oriented and concerned with risk taking.

F easy Leadership for Strategic Renewal There is an inverse relationship between an executive's emotional maturity and firm performance.

F challenging Leadership for Strategic Renewal

Having the tendency to believe that others agree with you more than is actually warranted is a false consensus bias.

T moderate Cognitive Biases Having a tendency to evaluate an alternative as a potential gain or as a potential loss is known as a Gambler‘s Fallacy bias.

F moderate

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Heading: TF 9-48 Answer: Difficulty: Heading:

TF 9-49 Answer: Difficulty: Heading: TF 9-50

Answer: Difficulty: Heading:

Cognitive Biases An intended strategy is planned and controlled.

T moderate Strategy as Planning

Emergent strategies tend to be action-oriented and intuitive.

T moderate Strategy as Planning As an organization grows spontaneous interactions are replaced with formalized routine to take concerted actions.

T challenging Organizational Learning and Strategic Renewal

Chapter Ten: Implementing Strategy: Change Agenda and Starting Conditions Multiple Choice

MC 10-1 a. b. c. d.

Answer: Difficulty: Heading: MC 10-2 a. b. c. d.

One of the challenges faced by managers wishing to implement strategic change is financial constraints organizational readiness priorities of the Board of Directors likelihood of a competitive response b moderate The Change Plan A key decision faced by managers in developing a strategic change plan is in deciding how to present the plan when to advise the Board of Directors who should lead the process how to inform employees

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Answer: Difficulty: Heading:

MC 10-3 a. b. c. d.

Answer: Difficulty: Heading:

MC 10-4 a. b. c. d.

Answer: Difficulty: Heading: MC 10-5 a. b. c. d.

Answer: Difficulty: Heading:

MC 10-6 a. b. c. d.

Answer: Difficulty: Heading:

c easy The Change Plan

One of the functions of the Diamond-E analysis process is to identify the change agenda priorities of the Board of Directors product market focus assess the strength of the competition a moderate Change agenda

In an organization that is currently outperforming its industry, the need for change is likely to be mandated anticipatory reactionary urgent b moderate The Change Plan A crisis change situation is often characterized by significant time pressure and low internal commitment high internal commitment and low management capability high management capability and significant pressure low internal commitment and resistance to change b easy Need for Change: The Crisis Curve A major challenge in crisis change situations is uncommitted employees a lack of clarity seriously depleted resources a need for order c moderate Crisis Change

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MC 10-7 a. b. c. d.

Answer: Difficulty: Heading:

MC 10-8 a. b. c. d.

Answer: Difficulty: Heading:

MC 10-9 a. b. c. d.

Answer: Difficulty: Heading:

MC 1010 a. b. c. d.

Answer: Difficulty: Heading: MC 1011

Anticipatory change situations are the most challenging for managers because there is low management capability limited capacity for change a disconnect between strategy and vision no sense of urgency d easy Anticipatory Change

In reactive change situations, managers need to concentrate on the bottom line personal credibility priorities of the Board of Directors core business activities d moderate Reactive Change

When assessing the organizational readiness of employees, managers need to consider commitment and capability passion and commitment stamina and engagement knowledge and experience a easy Organizational Readiness for Change One of the more troublesome aspects of resistance to change is passive resistance a lack of clarity limited collaboration unexamined realities a moderate Target Group Readiness The options for addressing gaps between available and required skills within the workforce are fewer under what type of situation?

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a. b. c. d.

Answer: Difficulty: Heading: MC 1012 a. b. c. d.

Answer: Difficulty: Heading:

MC 1013 a. b. c. d.

Answer: Difficulty: Heading:

MC 1014 a. b. c. d.

Answer: Difficulty: Heading:

MC 10-

anticipatory transactional reactionary crisis d moderate Crisis Change As part of their assessment of organizational readiness, managers need to consider customer resistance supplier cooperation personal capabilities competitive reactions c easy Personal Readiness for Change Urgency driven by personal motivations needs to be consistent with product market focus competitive rivalry shareholder expectations the business agenda d moderate Personal Readiness for Change

One of the mechanisms used by executives to close gaps in their knowledge is to appoint someone else to lead the change initiative reduce the scope of the change initiative hire a consultant extend the period of implementation c moderate Implementing Strategic Changes According to Kotter, one of the key tasks of effective general managers in change

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15 a. b. c. d.

Answer: Difficulty: Heading: MC 1016 a. b. c. d.

Answer: Difficulty: Heading: MC 1017 a. b. c. d.

Answer: Difficulty: Heading:

MC 1018 a. b. c. d.

Answer: Difficulty: Heading: MC 1019 a.

situations is managing their time addressing personal knowledge gaps evaluating the capabilities of their direct reports building networks d The View from Below If strategic performance is sliding and management is unsure where to start, the business could be experiencing the following type of change: status quo anticipatory reactive crisis c Moderate The Change Plan If a firm is experiencing little or no time pressure and a low internal commitment for change, the need for change will be unnecessary anticipatory reactionary crisis b moderate Need for Change: The Crisis Curve A lack of urgency to adopt and implement change by employees is often explained by being unaware of the need to change having a full commitment to the change accepting the reality of the situation agreeing with management changes and trusting the direction of the company a easy Strategic Decline Change effort known as Theory E emphasizes building a culture of trust

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b. c. d.

Answer: Difficulty: Heading: MC 1020 a. b. c. d.

Answer: Difficulty: Heading: MC 1021 a. b. c. d.

Answer: Difficulty: Heading: MC 1022 a. b. c. d.

Answer: Difficulty: Heading: MC 1023 a. b. c. d.

having a significant emotional commitment fostering a collaborative environment maximizing economic value D Easy Leadership Style Change effort known as Theory O emphasizes economic incentives organizational restructuring employee efficiency a culture of trust and commitment D Moderate Leadership Style When internal barriers are struggling to effectively manage external threats the organization is experiencing an economic recession decreasing productivity strategic decline poor management C Challenging Strategic Decline The resistance of the Eastman Kodak Company management to respond to the threat of new, lower margin digital technology is an example of market leadership management preference employee morale strategic decline D Moderate Strategic Decline

When beginning the process of change, understanding who will be most affected by the proposed change is an example of urgency personal readiness organizational readiness leadership style

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Answer: Difficulty: Heading: MC 1024 a. b. c. d.

C Moderate The Change Plan Understanding and mandating that change must be implemented within 6 months is an example of pace a priority objective leadership style priority target

Answer: Difficulty: Heading: MC 1025 a. b. c. d.

a challenging The Change Plan A company that experiences good strategic performance and capability may incur the following when implementing strategy low management capability high resistance for the need for change mixed internal commitment for change urgency to respond quickly

Answer: Difficulty: Heading:

c challenging The Need for Change: Crisis Curve

True/False

TF 10-26

Answer: Difficulty: Heading:

TF 10-27 Answer: Difficulty: Heading:

A common obstacle associated with implementing strategic change is a lack of organizational readiness. t moderate The Change Plan

If the change agenda is perceived to be necessary, resistance to change is reduced. f moderate The Change Plan

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TF 10-28

Answer: Difficulty: Heading: TF 10-29

Answer: Difficulty: Heading: TF 10-30

Answer: Difficulty: Heading:

TF 10-31

Answer: Difficulty: Heading:

TF 10-32

Answer: Difficulty: Heading:

TF 10-33

Answer: Difficulty: Heading: TF 10-34

In situations where performance is improving over time, the urgency for change is likely to be reactionary. f moderate The Change Plan In situations where performance is in serious decline, the internal commitment to change is likely to be high. t moderate The Change Plan Financial measures are considered leading indicators of performance.

f easy The Need for Change: The Crisis Curve One of the key challenges faced by managers in crisis change situations is a depleted resource base. t moderate The Need for Change: The Crisis Curve Evidence suggests that insiders have the best chance for managing a firm through a crisis change situation. f easy The Need for Change: The Crisis Curve In situations where an industry is beginning to undergo some form of transformation, the change agenda is likely to be anticipatory. t challenging Anticipatory Change Management response to time pressures associated with deteriorating performance is what determines whether a change agenda is reactionary or crisis.

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Answer: Difficulty: Heading: TF 10-35 Answer: Difficulty: Heading:

TF 10-36 Answer: Difficulty: Heading:

TF 10-37

Answer: Difficulty: Heading: TF 10-38

Answer: Difficulty: Heading: TF 10-39

t challenging Crisis Change Target group readiness is comprised of commitment and capability. t easy Target Group Readiness

Resistance to change is more likely in situations characterized by ambiguity. t moderate Target Group Readiness

One of the reasons for shrinking a business in a crisis change situation is to simplify the business to the point where it can be operated effectively with available resources. t moderate Target Group Readiness In crisis change situations, the leadership capabilities do not factor into the organizational assessment of readiness. f moderate Target Group Readiness The urgency of the change agenda for the manager should be in keeping with the urgency of the change agenda for the organization.

Answer: Difficulty:

t moderate

Heading:

Target Group Readiness

TF 10-40

Answer: Difficulty: Heading: TF 10-41

The target groups in a change situation assess managerial capabilities in terms of credibility and power. t easy Target Group Readiness One of the key tasks of a general manager is considered to be building networks.

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Answer: Difficulty: Heading: TF 10-42

Answer: Difficulty: Heading: TF 10-43

Answer: Difficulty: Heading: TF 10-44

Answer: Difficulty: Heading:

TF 10-45

Answer: Difficulty: Heading:

TF 10-46

Answer: Difficulty: Heading: TF 10-47 Answer: Difficulty: Heading:

t easy The View from Below A middle manager usually has only two relationships to manage: superior and subordinate. f easy The View from Below For middle managers, the key challenge in strategic change situations is in translating the language of strategy into operational terms for employees. t easy The View from Below Individuals on the front-line of an organization do not necessarily need to be strategic thinkers. f moderate The View from Below

Organizational readiness for strategic change depends on the commitment and capabilities of all stakeholders. f moderate The View from Below

Knowing how you are going to manage the change process is an illustration of your leadership style t moderate The Change Plan The next step after establishing a change plan is to establish the need for change f moderate Analysis of Starting Conditions

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TF 10-48 Answer: Difficulty: Heading: TF 10-49

Answer: Difficulty: Heading:

TF 10-50

Answer: Difficulty: Heading:

Theory E is often referred to as hard as it drives change through economic incentives. t moderate Leadership Style Change is risky. Roughly 70% of all organizational changes do not deliver on promised results. t moderate Implementing Strategic Change Maple Leaf Foods reaction to a listeriosis outbreak in 2008 is an example of anticipatory change. f moderate Crisis Change

Chapter Eleven: Implementing Strategy: Guidelines and Action Multiple Choice MC 11-1 a. b. c. d.

Answer: Difficulty: Heading:

MC 11-2 a. b. c. d.

One of the considerations when developing a strategic action plan is the product market focus contingency allocation corporate governance leadership style d easy Establishing Guidelines for Action One of the elements of a strategic change agenda is often a list of key competitors required behaviours critical suppliers dominant stakeholders

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Answer: Difficulty: Heading:

MC 11-3 a. b. c. d.

Answer: Difficulty: Heading:

MC 11-4 a. b. c. d.

Answer: Difficulty: Heading:

MC 11-5 a. b. c. d.

Answer: Difficulty: Heading:

MC 11-6 a. b. c. d.

b moderate Priority Objectives

The behaviour-related objectives of a change agenda are considered easier to address than the non-behaviour related objectives the ones that should be addressed after the change process is well underway harder to address than the non-behaviour related objectives the ones that should be assigned to middle managers to implement at an appropriate time c moderate Behavioural versus NonBehavioural Objectives

In crisis strategic change situations, change agents are likely to lack foresight stamina capability commitment c moderate Adopters and Resistors

In reactive change situations, the target for management attention should be the proactive resistors bystanders that could block progress change agents subordinates b moderate Adopters and Resistors

To effect behavioural change in crisis strategic change situations, managers might be tempted to use consultation and delegation results-driven change techniques power and delegation responsibility-driven change techniques

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Answer: Difficulty: Heading:

MC 11-7 a. b. c. d.

Answer: Difficulty: Heading: MC 11-8 a. b. c. d.

Answer: Difficulty: Heading:

MC 11-9 a. b. c. d.

Answer: Difficulty: Heading: MC 1110 a. b. c. d.

b moderate Picking Starting Points for Action

One of the risks of using a participative leadership style in a crisis strategic change situation is the issue of poor problem definition not enough time high after-the-fact costs inappropriate solution b challenging The Participative Style For the directive leadership style to be effective, managers must not only know what action is required but also have weak competitors time for consultation an organization that is performing well power to force compliance d easy Directive Leadership

A directive approach to effecting behavioural change does not work well in strategic change situations characterized as anticipatory reactionary transformative crisis a easy Directive Leadership A key assumption underlying the use of a participative leadership style in anticipatory strategic change situations is an appropriate change agenda will emerge from the process managerial competence in using the style a strong sense of urgency weak competitors

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Answer: Difficulty: Heading: MC 1111 a. b. c. d.

Answer: Difficulty: Heading:

MC 1112 a. b. c. d.

Answer: Difficulty: Heading: MC 1113 a. b. c. d.

Answer: Difficulty: Heading: MC 1114 a. b. c. d.

Answer: Difficulty:

a moderate The Participative Style The pace of change encompasses both scope and

outlook vision mission significance d easy PACE

In crisis strategic change situations, obtaining external support for the change agenda will likely require attractive promotional material rigorous data collection extensive face-to-face contact serious self-evaluation d moderate Crisis Change One of the advantages of an incremental strategic change process is that it limits organizational involvement ensures survival reduces the need for behavioural changes builds organizational capacity for effective execution d moderate Anticipatory Change Pivotal change targets in the strategic change process are likely to be bystanders resistors supporters and resistors supporters c easy

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Heading: MC 1115 a. b. c. d.

Answer: Difficulty: Heading: MC 1116 a. b. c. d.

Answer: Difficulty: Heading: MC 1117 a. b. c. d.

Answer: Difficulty: Heading: MC 1118 a. b. c. d.

Answer: Difficulty: Heading: MC 11-

Reactive Change The percentage of expected financial value delivered by most strategic change initiatives is roughly less than 20% 35% 50% 60% d easy Monitoring Performance In a proposed change where the required capabilities are low and the employees are actively opposed, management will be faced with defensive resistors proactive resistors bystanders change agents in waiting a easy Adopters and Resistors In anticipatory change situations with capable employees who want to commit to recommended strategies, the priority targets are categorized as proactive resistors bystanders change agents in waiting change agents d easy Adopters and Resistors A risk of a Directive Management style could include slow decision making potential to lose focus inability to make tough decisions wrong diagnosis, wrong remedy d moderate Leadership Style A benefit of a participative management style is

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19 a. b. c. d.

Answer: Difficulty: Heading:

MC 1120 a. b. c. d.

economizing on time working efficiently approaching decision-making with speed and commitment flexibility d easy Leadership Style

Select the most accurate statement: time periods for action plans should always be at the discretion of the implementing manager crisis change should be measured in months reactive change should be measured in hours anticipatory change should have a maximum length of 90 days

Answer: Difficulty: Heading:

d Challenging Implementing Pace Decisions

MC 1121 a. b. c. d.

When engaging in anticipatory change

Answer: Difficulty: Heading: MC 1122 a. b. c. d.

Answer: Difficulty: Heading: MC 1123

decide what organizational changes need to occur make strategic decisions as quickly as possible buy time to put the right plan in place take time to develop support and direction d Moderate Generic Guidelines A risk of a participative leadership style is avoidance of tough decisions too quick to make a decision passive resistance active resistance a moderate Leadership Style A characteristic of a participative leader is

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a. b. c. d.

has the power to influence change knows the problem and solution change will be made through collaboration directive in expectations

Answer: Difficulty: Heading:

MC 1124 a. b. c. d.

c Challenging Leadership Style

Wanting to change but lacking the required capabilities to do so is an example of a change agents change agent in waiting defensive resistor bystander

Answer: Difficulty: Heading: MC 1125 a. b. c. d.

b moderate Adopters and Resistors An organization with strong capabilities and a willingness to embrace required changes are known as defensive resistor change agent in waiting change agents bystander

Answer: Difficulty: Heading:

c moderate Adopters and Resistors

True/False TF 11-26

Answer: Difficulty: Heading:

TF 11-27

Change agents are those that are committed to the change and have the capabilities to contribute. t easy Adopters and Resistors

Results-driven change focuses on commitment and capabilities.

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Answer: Difficulty: Heading: TF 11-28

Answer: Difficulty: Heading:

TF 11-29

Answer: Difficulty: Heading:

TF 11-30

Answer: Difficulty: Heading: TF 11-31

Answer: Difficulty: Heading: TF 11-32 Answer: Difficulty: Heading: TF 11-33

Answer: Difficulty: Heading: TF 11-34

f easy Adopters and Resistors In crisis strategic change situations, one of the starting actions is to improve organizational readiness. f easy Picking Starting Points for Action One of the tactics used by directive leaders is to focus on collaborative exploration of causes. f easy Leadership Style: Directive Leadership One of the key benefits of the directive approach to strategic change initiatives is efficiency. t easy Directive Leadership Participative leadership works best in crisis strategic change situations because the situation requires better problem definition. f moderate The Participative Style Pace is considered to be both the amount of change and the allowable time. t easy PACE The time-to-crisis calculation is an important consideration in reactive strategic change situations. t moderate Generic Guidelines One of the techniques for managing the pace of change is to map out the actions for

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the next twelve months.

Answer: Difficulty: Heading:

TF 11-35

Answer: Difficulty: Heading: TF 11-36 Answer: Difficulty: Heading: TF 11-37

Answer: Difficulty: Heading: TF 11-38

Answer: Difficulty: Heading:

TF 11-39

Answer: Difficulty: Heading: TF 11-40

Answer: Difficulty: Heading:

f easy Implementing Pace Decisions

A common error in crisis strategic change situations is for managers to attempt to save too much of the business. t easy Crisis Change A recovery plan is often required in anticipatory strategic change situations. f moderate Anticipatory Change In anticipatory strategic change situations, one of the first steps is to build an understanding of the changing environment. t moderate Anticipatory Change An incremental approach to instituting strategic change is thought to be beneficial as it prevents premature closure on an inappropriate target. t challenging Anticipatory Change

An effective tactic in crisis strategic change situations is to incorporate feedback at all stages of the process to clarify what actions are needed. f moderate Crisis Change One of the first tasks for managers in reactive strategic change situations is to calculate the time to crisis. t easy Reactive Change

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TF 11-41 Answer: Difficulty: Heading:

TF 11-42

Answer: Difficulty: Heading:

TF 11-43

Answer: Difficulty: Heading: TF 11-44 Answer: Difficulty: Heading: TF 11-45

Answer: Difficulty: Heading: TF 11-46 Answer: Difficulty: Heading: TF 11-47

Answer: Difficulty:

Pivotal change targets are supporters and resistors. t easy Reactive Change

In reactive strategic change situations, once remedial action has been started, any downward trend in performance will immediately begin to reverse. f moderate Reactive Change

In a crisis strategic change situation, the planning time frame should be at least 18 months. f challenging Creating an Action Plan A key element in long term planning is to include a provision for contingencies. t moderate Creating an Action Plan One of the most common reasons that the expected financial value of many strategic change initiatives is often not realized is the leadership was not committed. f moderate Monitoring Performance Sense of urgency is also tightly linked to emotions. t moderate Action Priorities

Change agents are people who believe that change is necessary but lack the capabilities to execute their desired path. f moderate

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Heading: TF 11-48

Answer: Difficulty: Heading: TF 11-49

Answer: Difficulty: Heading:

TF 11-50

Answer: Difficulty: Heading:

Adopters and Resistors Organizations with neutral support and capabilities run the risk of being a bystander when it comes to change. t moderate Adopters and Resistors Results driven change requires precise and measurable results and placing people in positions of responsibility to achieve them. t moderate Picking Starting Points for Action

Participative leadership has benefit of being flexible and effective due to its collaborative exploration of causes and remedies. t moderate Leadership Style

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