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Chapter 7-Strategic Managment

Effective strategy formulation can usually guarantee successful strategy implementation.
False
Strategy formulation is the managing of forces during the action, whereas strategy implementation is the positioning of forces before the action.
False
Strategy formulation requires coordination among a few individuals, but strategy implementation requires coordination among many.
True
It is always easier to say you are going to do something (strategy formulation) than to actually do it (strategy implementation).
True
Unlike strategy formulation, strategy implementation varies considerably among different types and sizes of organizations.
True
A bottom-up flow of communication is essential for developing bottom-up support.
False
Annual objectives are key components in the strategic-management process because they dictate how resources will be allocated.
True
Horizontal consistency is more important than vertical consistency in developing annual objectives.
False
Undesirable conduct such as distorting the records can be a result of overemphasis on achieving objectives.
True
Policies refer to specific guidelines, methods, procedures, rules, forms, and administrative practices established to support and encourage work toward stated goals.
True
Strategies clarify what can and cannot be done in pursuit of an organization’s objectives.
False
A recent study reports that nearly 90 percent of employers today offer some kind of wellness incentives or prizes to employees who “get healthier.”
True
Four types of resources that can be used to achieve desired objectives are financial, physical, human, and technological.
True
Avoidance, defusion, and confrontation are the classifications for the various types of conflict that can arise in organizations.
False
Well-run organizations are able to completely avoid conflict.
False
In the context of conflict management and resolution, ignoring the problem in the hopes that the conflict will resolve itself is classified as a defusion technique.
False
Holding a meeting at which conflicting parties present their views and work through their differences is part of the defusion technique of managing conflict.
False
Exchanging members of conflicting parties so each can gain an appreciation of the other’s point of view exemplifies a confrontation approach.
True
Medium-sized firms tend to be divisionally structured, whereas large firms tend to use an SBU (strategic business unit) or matrix structure.
True
Tasks and activities are grouped together by business function in a divisional organizational structure.
False
A functional structure can be effective at eliminating short-term and narrow thinking.
False
Most large companies have abandoned the functional structure in favor of decentralization.
True
With a divisional structure, it is possible that competition between divisions may become so intense that it leads to improved sharing of ideas and resources for the common good of the firm.
False
With a divisional structure by customer, an organization can effectively cater to the requirements of clearly defined customer groups.
True
Because activities are organized according to the way work is actually performed, a divisional structure by process is similar to the matrix structure.
False
The most complex of all organizational structures is a matrix structure.
True
With the matrix structure it is common for functional resources to be duplicated.
False
When developing an organizational chart, the title president should be reserved for the top executive of the firm.
False
When developing an organizational chart, it is not wise to recommend a dual title for just one executive.
True
In developing an organizational chart, avoid having a particular person reporting to more than one person above them in the chain of command.
True
Restructuring is also called rightsizing.
True
In terms of number of employees, restructuring usually involves increasing the size of the firm.
False
Reengineering does not usually affect the organizational structure or chart, nor does it imply job loss or employee layoffs.
True
Six Sigma is generally equally successful in retail firms and manufacturing firms.
False
The focus of restructuring is changing the way work is actually carried out.
False
Restructuring in many firms has made a manager’s job an invisible, thankless role.
True
A dual bonus system based on both annual objectives and long-term objectives is becoming common.
True
In Japan, performance rather than seniority has traditionally been the key factor in determining pay.
False
People’s anxieties are raised with the thought of change because they fear economic loss, inconvenience, uncertainty, and a break in normal social patterns.
True
Resistance to change can be considered the single greatest threat to successful strategy implementation.
True
A rational change strategy means giving orders and enforcing those orders.
False
When the rational type change strategy is successful, strategy implementation can be relatively easy.
True
The advantage of the educative change strategy is that implementation is quick and relatively easy.
False
The rational change strategy is one that presents information to convince people of the need for change.
False
Strategists should strive to create a work environment in which change is recognized as necessary and beneficial so that individuals can more easily adapt to change.
True
A force change strategy is plagued by low commitment and high resistance.
True
Organizational change today should be viewed as a project or event rather than as a continuous project.
False
Changing a strategy to fit an existing culture is not as effective as changing a firm’s culture to fit a new strategy.
True
Strategists should strive to preserve, emphasize, and build upon aspects of an existing culture that are antagonistic to a proposed strategy.
False
Recruitment, promotion, and mentoring are ways to alter an organization’s culture.
True
When attachments to a culture are severed in an organization’s attempt to change direction, employees and managers often experience deep feelings of grief.
True
Production processes typically constitute less than 50 percent of a firm’s total assets.
False
JIT significantly increases the costs of implementing strategies.
False
Besides reducing worker alienation and stimulating productivity, ESOPs allow firms other benefits, such as substantial tax savings.
True
ESOPs work well even in firms with fluctuating payrolls and profits.
False
The work and family issue is strictly a women’s issue.
False
The United States leads the world in promoting women and minorities into mid- and top-level managerial positions in business.
True
Strategy formulation
A) is managing forces during the action.
B) requires coordination among a few individuals.
C) is primarily an operational process.
D) requires special motivation and leadership skills.
E) all of the above
B) requires coordination among a few individuals.
Which of these is true about strategy implementation?
A) It is positioning forces before the action.
B) It focuses on effectiveness.
C) It is primarily an operational process.
D) It is primarily an intellectual process.
E) It requires intuitive skills.
C) It is primarily an operational process.
Which of the following is a management issue central to strategy implementation?
A) Devising policies
B) Revising reward and incentive plans
C) Minimizing resistance to change
D) Developing an effective human resources function
E) All of the above
E) All of the above
Establishing objectives is a
A) executive-only activity.
B) centralized activity.
C) decentralized activity.
D) centralized-decentralized activity.
E) command-and-control activity.
C) decentralized activity.
Considerable time and effort should be devoted to assuring objectives are well conceived because they represent the basis for
A) monitoring progress toward long-term objectives.
B) establishing divisional priorities.
C) allocating resources.
D) evaluating managers.
E) all of the above
E) all of the above
Which of the following is NOT true about objectives?
A) They should be communicated throughout the organization.
B) They should have an appropriate time dimension.
C) They should use terms like “maximize,” “minimize,” and “as soon as possible.”
D) They should be measurable.
E) They should be consistent.
C) They should use terms like “maximize,” “minimize,” and “as soon as possible.”
Which word or phrase would most be best to use in written objective statements?
A) Maximize
B) Minimize
C) 10% increase
D) Adequate
E) As soon as possible
C) 10% increase
What term is used to describe specific guidelines, methods, procedures, rules, forms and administrative practices established to support and encourage work toward stated goals?
A) Long-term objectives
B) Policies
C) Annual objectives
D) Strategies
E) Values
B) Policies
Policies
A) let both employees and managers know what is expected of them.
B) provide a basis for management control.
C) allow coordination across organizational units.
D) reduce the amount of time managers spend making decisions.
E) all of the above
E) all of the above
Which term is best defined as a central management activity that allows for strategy execution?
A) Avoidance
B) Furlough
C) Competition
D) Resource allocation
E) Conflict
D) Resource allocation
________ is NOT a major factor that commonly prohibits effective resource allocation.
A) Underprotection of resources
B) Organizational politics
C) Having vague strategy targets
D) A reluctance to take risks
E) A lack of sufficient knowledge
A) Underprotection of resources
A disagreement between two or more parties on one or more issues is called a(n)
A) integrated solution.
B) conflict.
C) compromise.
D) diffusion.
E) avoidance.
B) conflict.
Conflict in an organization is
A) always bad.
B) always good.
C) not always bad.
D) a sign of bankruptcy.
E) completely avoidable.
C) not always bad.
What are the three categories of approaches for managing and resolving conflict?
A) Avoidance, defusion, and confrontation
B) Avoidance, apathy, and defusion
C) Ignorance, indifference, and apathy
D) Defusion, apathy, and avoidance
E) Indifference, avoidance, and role-playing
A) Avoidance, defusion, and confrontation
Which approach for managing and resolving conflict involves exchanging members of conflicting parties so that each can gain an appreciation of the other’s point of view?
A) Avoidance
B) Resistance
C) Compliance
D) Defusion
E) Confrontation
E) Confrontation
Which approach for managing and resolving conflict involves ignoring the problem in hopes that the conflict will resolve itself?
A) Avoidance
B) Resistance
C) Compliance
D) Defusion
E) Confrontation
A) Avoidance
Which approach for managing and resolving conflict involves playing down differences between conflicting parties, while accentuating similarities and common interests?
A) Avoidance
B) Resistance
C) Compliance
D) Defusion
E) Confrontation
D) Defusion
Why do changes in company strategy often require changes in the way an organization is structured?
A) Structure dictates how goals and objectives will be established.
B) Structure dictates how resources will be allocated.
C) Structure should be designed to facilitate the strategic pursuit of a firm.
D) All of the above
E) None of the above
D) All of the above
What type of organizational structure promotes specialization of labor and allows rapid decision making?
A) Divisional structure by product
B) Functional structure
C) Divisional structure by customer
D) Strategic business unit
E) Matrix structure
B) Functional structure
Which organizational structure is the most widely used?
A) Departmental
B) Strategic business unit
C) Functional
D) Decentralized
E) Matrix
C) Functional
Medium-sized firms tend to use which type of structure?
A) Divisional
B) Matrix
C) SBU
D) Functional
E) Centralized
A) Divisional
What is NOT one of the basic ways a divisional structure can be organized?
A) By geographic area
B) By product
C) By customer
D) By process
E) By cost
E) By cost
A divisional structure by product is most effective when
A) special emphasis needs to be placed on specific products.
B) an organization offers few products.
C) an organization’s products or services differ substantially.
D) special emphasis needs to be placed on specific services.
E) all of the above
E) all of the above
How would Hershey’s current divisional structure most likely be classified?
A) By geographic area
B) By product
C) By service
D) By customer
E) By process
A) By geographic area
A divisional structure by geographic area is most appropriate when
A) organizations have similar branch facilities located in widely dispersed areas.
B) an organization offers only a limited number of products or services.
C) consumption patterns for its products and/or services are the same worldwide.
D) the company’s customers in different geographic locations have similar needs and characteristics.
E) the firm serves one geographic area.
A) organizations have similar branch facilities located in widely dispersed areas.
What is the best divisional structure when a few major customers are of paramount importance and many different services are provided to these customers?
A) By geographic area
B) By customer
C) By product
D) By process
E) By cost
B) By customer
Which organizational structure has the disadvantage of ambiguous roles for senior executives?
A) Functional
B) Divisional
C) Strategic business unit
D) Matrix
E) Process
C) Strategic business unit
What is the most complex form of organizational structure?
A) Divisional
B) SBU
C) Matrix
D) Functional
E) Geographic
C) Matrix
When developing an organizational chart, you should
A) recommend dual titles for executives.
B) use the title “president” for the top executive of the firm.
C) make sure that the chief financial officer is not at the same level as the chief operating officer.
D) have division presidents report to a chief operating officer.
E) have employees report to more than one person in the chain of command.
D) have division presidents report to a chief operating officer.
Restructuring is also referred to as
A) reengineering.
B) delayering.
C) diversifying.
D) upsizing.
E) integrating.
B) delayering.
Which term is primarily concerned with shareholder well-being rather than employee well-being?
A) Benchmarking
B) Reengineering
C) Product redesign
D) Process management
E) Restructuring
E) Restructuring
Which of these involves comparing a firm against the best firms in the industry on a wide variety of performance-related criteria?
A) Restructuring
B) Process redesign
C) Reengineering
D) Delayering
E) Benchmarking
E) Benchmarking
The primary benefit sought from restructuring is
A) employee involvement.
B) cost reduction.
C) increased morale.
D) increased number of hierarchical levels in the organization.
E) increased innovation.
B) cost reduction.
What action involves reconfiguring or redesigning work, jobs, and processes for the purpose of improving cost, quality, service, and speed?
A) Restructuring
B) Downsizing
C) Reengineering
D) Delayering
E) Recruiting
C) Reengineering
A firm uses information technology to reconfigure work, jobs, and processes. As a result, cost, quality, service, and speed are improved. What has the firm engaged in?
A) Restructuring
B) Benchmarking
C) Reengineering
D) Rightsizing
E) Delayering
C) Reengineering
In 2013, ________ of CEO compensation was directly associated with the performance of the firm, rather than salary.
A) less than 10 percent
B) almost 25 percent
C) over 50 percent
D) exactly 75 percent
E) a full 100 percent
C) over 50 percent
All of the following statements regarding the recent trend in Japan of switching from seniority-based pay to performance-based approaches are true EXCEPT
A) the switch is an effort to cut costs.
B) the switch is boosting employee morale.
C) the switch is an effort to increase productivity.
D) the switch opposes the traditional training of Japanese employees to cooperate rather than compete.
E) the switch goes against decades of encouraging workers to work in groups instead of individually.
B) the switch is boosting employee morale.
What pay strategy requires employees or departments to establish performance targets, which, if exceeded, result in bonuses for all members?
A) Profit sharing
B) Bonus system
C) Salary
D) Gain sharing
E) Hourly wage system
D) Gain sharing
Which of these is NOT one of the tests used to determine whether a performance-pay plan will benefit an organization?
A) Does the plan capture attention?
B) Do employees understand the plan?
C) Is the plan improving communications?
D) Does the plan pay out when it should?
E) Does the plan reduce management layers?
E) Does the plan reduce management layers?
What change strategy involves giving orders and enforcing those orders?
A) Self-interest
B) Educative
C) Force
D) Rational
E) Defusion
C) Force
Resistance to change can manifest itself through
A) absenteeism.
B) sabotaging production machines.
C) filing unfounded grievances.
D) unwillingness to cooperate.
E) all of the above
E) all of the above
A change strategy that attempts to convince people that the change is to their personal advantage is
A) defusion.
B) force.
C) educative.
D) rational.
E) compromise.
D) rational.
Which of the following is in keeping with the current view of organizational change?
A) Organizational change is a project.
B) Organizational change is a continuous process.
C) Organizational change is an event.
D) Organizational change involves unfreezing behavior, changing the behavior, and then refreezing the new behavior.
E) All of the above
B) Organizational change is a continuous process.
Formal statements of organizational philosophy, charters, creeds, materials used for recruitment and selection, and socialization help an organization
A) abide by SEC laws.
B) link culture to strategy.
C) set guidelines for firing.
D) increase profits.
E) manage conflicts between stakeholders.
B) link culture to strategy.
Changing a strategy to fit an existing culture
A) is usually less effective than changing a firm’s culture to fit a new strategy.
B) is usually more effective than changing a firm’s culture to fit a new strategy.
C) is just as effective as changing a firm’s culture to fit a new strategy.
D) is always the best option.
E) none of the above
A) is usually less effective than changing a firm’s culture to fit a new strategy.
All of the following are examples of offerings at companies to promote a corporate wellness culture EXCEPT
A) stress management programs.
B) health fairs.
C) abundance of bicycle racks onsite.
D) free health insurance for employees who exercise regularly.
E) cash incentives for completing Ironman triathlons.
D) free health insurance for employees who exercise regularly.
All of the following are ways and means for altering an organization’s culture EXCEPT
A) recruitment.
B) restructuring of an organization’s design.
C) role modeling.
D) retrenchment.
E) mentoring.
D) retrenchment.
Aspects of an existing culture that are antagonistic to a proposed strategy should be
A) preserved.
B) emphasized.
C) built upon.
D) changed.
E) celebrated.
D) changed.
Just-in-time describes
A) implementing strategies just before bankruptcy.
B) delivering materials just as they are needed.
C) a scheduling method for meetings.
D) a personnel planning method.
E) a process for improving quality.
B) delivering materials just as they are needed.
A concern in matching managers with strategy is that jobs have relatively ________ responsibilities, while people are ________ in their personal development.
A) static; dynamic
B) dynamic; static
C) quick; slow
D) exciting; dull
E) dull; exciting
A) static; dynamic
Glass ceiling refers to
A) the reality that most companies do not offer paternity leave for fathers as a benefit.
B) the understanding that a good home life for employees contributes to a good work life and value for the firm.
C) the focus on flexible scheduling, job sharing, and other quality of life benefits.
D) the invisible barrier in many firms that bars women and minorities from top-level management positions.
E) the decline in the percentage of women with college degrees between 1970 and today.
D) the invisible barrier in many firms that bars women and minorities from top-level management positions.
In 2012, how many Fortune 500 have women CEOs?
A) Two
B) Five
C) Twelve
D) Eighteen
E) Twenty-two
E) Twenty-two
Wellness programs
A) are too expensive for most companies to afford.
B) are desired by employees but don’t provide value to the company.
C) are becoming more prevalent as companies realize the benefits to the firm.
D) attract prospective employees who then fail to take advantage of them.
E) are facing legal challenges from the health-care industry.
C) are becoming more prevalent as companies realize the benefits to the firm.
Which company estimates wellness programs have cumulatively saved the company $250 million on health-care costs in the past decade?
A) Ford Motor Company
B) Johnson & Johnson
C) Coca-Cola
D) TJX
E) Boeing
B) Johnson & Johnson

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