Test bank of fred r david – strategic management, 13th edition ch08

Effective strategy formulation can usually guarantee successful strategy implementation... Strategy formulation is the managing of forces during the action, whereas strategy implementati

Name _

TRUE/FALSE Write 'T' if the statement is true and 'F' if the statement is false

1)

Effective strategy formulation can usually guarantee successful strategy implementation 1)

_

2)

Strategy formulation is the managing of forces during the action, whereas strategy implementation is the positioning of forces before the action

2)

_

3)

Strategy formulation requires coordination among a few individuals, but strategy implementation requires coordination among many

3)

_

4)

It is always easier to say you are going to do something (strategy formulation) than to actually do it (strategy implementation)

4)

_

5)

Unlike strategy formulation, strategy implementation varies considerably among different types and sizes

of organizations

5)

_

6)

A bottom-up flow of communication is essential for developing top-down support 6)

_

7)

Annual objectives are key components in the strategic-management process because they dictate how resources will be allocated

7)

_

8)

Horizontal consistency is more important than vertical consistency in developing annual objectives 8)

_

9)

Undesirable conduct such as distorting the record can be a result of overemphasis on achieving objectives.

9)

_

10)

Policies refer to specific guidelines, methods, procedures, rules, forms, and administrative practices established to support and encourage work toward stated goals

10)

11)

Strategies clarify what can and cannot be done in pursuit of an organization's objectives 11)

12)

Not allocating resources according to the priorities indicated by approved objectives is detrimental to the strategic-management process

12)

13)

Four types of resources that can be used to achieve desired objectives are financial, physical, human and technological

13)

14)

Avoidance, infusion and confrontation are the classifications for the various approaches for minimizing and resolving conflict

14)

15)

Conflict of any kind is avoidable in organizations 15)

16)

Concerning managing and resolving conflict, defusion includes such actions as ignoring the problem in the hope that the conflict will resolve itself

16)

17)

Holding a meeting at which conflicting parties present their views and work through their differences is part of the defusion strategy of managing conflict

17)

18)

Exchanging members of conflicting parties so each can gain an appreciation of the other's point of view exemplifies a confrontation approach

18)

19)

Medium-sized firms tend to be divisionally structured, whereas large firms tend to use an SBU (strategic business unit) or matrix structure

19)

20)

Tasks and activities are grouped together by business function in a divisional organizational structure 20)

21)

A functional structure can be effective at limiting short-term and narrow thinking 21)

22)

Most large companies have abandoned the functional structure in favor of decentralization 22)

23)

With a divisional structure, it is possible that competition between divisions may become so intense that it leads to the improved sharing of ideas and resources for the common good of the firm

23)

24)

When an organization has a divisional structure by customer, it can effectively cater to the requirements ofclearly defined customer groups

24)

25)

Because activities are organized according to the way work is actually performed, a divisional structure by process is similar to the matrix structure

25)

26)

The most complex of all designs is a matrix structure 26)

27)

With the matrix structure it is common for functional resources to be duplicated 27)

28)

When developing an organizational chart, the top executive of the firm should be reserved for the President

28)

29)

When developing an organizational chart, it is not wise to recommend a dual title for just one executive 29)

30)

In developing an organizational chart, avoid having a particular person reporting to more than one person above them in the chain of command

30)

31)

Restructuring is also called rightsizing 31)

32)

In terms of number of employees, restructuring usually involves increasing the size of the firm 32)

33)

Reengineering does not usually affect the organizational structure or chart, nor does it imply job loss or employee layoffs

33)

34)

Six Sigma is generally equally successful in retail firms and manufacturing firms 34)

35)

The focus of restructuring is changing the way work is actually carried out 35)

36)

Cornerstones of reengineering are decentralization, reciprocal interdependence and information sharing 36)

37)

An effective bonus system should be based on two key factors annual objectives and long-term objectives 37)

38)

People's anxieties are raised with the thought of change because they fear economic loss, inconvenience, uncertainty and a break in normal social patterns

38)

39)

Resistance to change can be considered the single greatest threat to successful strategy implementation 39)

40)

A rational change strategy means giving orders and enforcing those orders 40)

41)

Ideally, the rational type change strategy is the most desirable 41)

42)

The fastest of all approaches to implement change is the rational change strategy 42)

43)

The rational change strategy is one that presents information to convince people of the need for change 43)

44)

Recently, an increasing number of companies have been implementing less rigorous environmental policies

44)

45)

Managing as if the earth matters requires an understanding of how international trade, competitiveness and global resources are connected

45)

46)

Managing environmental affairs is primarily a technical function performed by specialists in a firm 46)

47)

Production processes typically constitute less than 50 percent of a firm's total assets 47)

48)

JIT significantly increases the costs of implementing strategies 48)

49)

Besides reducing worker alienation and stimulating productivity, employee stock-ownership plans allow firms other benefits, such as substantial depreciation savings

49)

50)

ESOPs work well even in firms with fluctuating payrolls and profits 50)

51)

Work/family issues are typically focused on the benefit to working women 51)

52)

In recent years, powerful Arab businesswomen have made their mark on the international scene

Strategy formulation 53)

A)

focuses on effectiveness

B)

is primarily an operational process

C)

requires coordination among many people

D)

is managing forces during the action

E)

all of the above 54)

Which of these is true about strategy implementation? 54)

A)

It is primarily an operational process

B)

It focuses on effectiveness

C)

It is primarily an intellectual process

D)

It is positioning forces before the action

E)

It requires intuitive skills 55)

How are objectives in the areas of profitability, growth and market share commonly established? 55)

A)

Geographic location

B)

Customer groups

C)

Business segment

D)

Product

E)

all of the above 56)

Establishing objectives is a 56)

A)

top-level activity

B)

command-and-control activity

C)

centralized activity

D)

decentralized activity

E)

centralized-decentralized activity 57)

Considerable time and effort should be devoted to assuring objectives are well conceived because they represent the basis for

57)

A)

establishing divisional priorities

B)

monitoring processes

C)

evaluating managers

D)

allocating resources

E)

all of the above 58)

Which of the following is not true about objectives? 58)

A)

They should be measurable

B)

They should be communicated throughout the organization

C)

They should have an appropriate time dimension

D)

They should incorporate policies

E)

They should be consistent 59)

Which term would most likely be incorporated into written objective statements? 59)

A)

all of the above

B)

Maximize

C)

Adequate

D)

10% increase

E)

Minimize 60)

What are guidelines, methods, procedures, rules, forms and administrative practices known as? 60)

A)

Strategies

B)

Annual objectives

C)

Long-term objectives

D)

Goals

E)

Policies 61)

Which of the following issues may not require a management policy? 61)

A)

To increase motivation

B)

To establish a high- or low-safety stock of inventory

C)

To discourage insider trading

D)

To offer numerous or few employee benefits

E)

To promote from within to or to hire from the outside 62)

Which term is best defined as a central management activity that allows for strategy execution? 62)

A)

Conflict

B)

Establishing annual objectives

C)

Policy-making

D)

Goal-setting

E)

Resource allocation 63)

is not a major factor in prohibiting effective resource allocation 63)

A)

Vague strategy targets

B)

Lack of sufficient knowledge

C)

Reluctance to take risks

D)

Underprotection of resources

E)

Organizational politics 64)

A disagreement between two or more parties on one or more issues is called a(n) 64)

A)

compromise

B)

diffusion

C)

conflict

D)

integrated solution

E)

avoidance 65)

Conflict in an organization is 65)

A)

always bad

B)

sometimes good and sometimes bad

C)

avoidable

D)

a sign of bankruptcy

E)

always good 66)

What are three categories for approaches to managing and resolving conflict? 66)

A)

Avoidance, defusion and confrontation

B)

Avoidance, payoff and defusion

C)

There are no good ways to manage conflict

D)

Confrontation, ignorance and objectivity

E)

Buy, sell and hold 67)

Which approach for managing and resolving conflict involves exchanging members of conflicting parties of that each can gain an appreciation of the others point of view?

67)

A)

Resistance

B)

Avoidance

C)

Defusion

D)

Compliance

E)

Confrontation 68)

Which approach for managing and resolving conflict involves ignoring the problem in hopes that the conflict will resolve itself?

68)

A)

Compliance

B)

Avoidance

C)

Resistance

D)

Confrontation

E)

Defusion 69)

Which approach for managing and resolving conflict involves playing down differences between conflicting parties while accentuating similarities and common interests?

69)

A)

Avoidance

B)

Defusion

C)

Resistance

D)

Confrontation

E)

Compliance 70)

Why do changes in company strategy often require changes in the way an organization is structured? 70)

A)

Structure dictates authority over projects

B)

Structure dictates strategy

C)

Structure dictates how resources will be obtained

D)

Structure dictates how goals and objectives will be established

E)

Structure dictates how money is spent 71)

What type of organizational structure do most small businesses follow? 71)

A)

Divisional structure by customer

B)

Functional structure

C)

Process type structure

D)

Divisional structure by product

E)

Matrix structure 72)

Which organizational structure is the most simple and inexpensive? 72)

A)

Departmental

B)

Decentralized

C)

Functional

D)

Strategic business unit

E)

Process 73)

Medium-sized firms are more likely to use which type of structure? 73)

A)

Matrix

B) Functional

C) Divisional

D) SBU

E) Process

74)

What is not one of the basic ways a divisional structure can be organized? 74)

A)

By product or service

B)

By cost

C)

By customer

D)

By process

E)

By geographic area 75)

A divisional structure by product is most effective when 75)

A)

special emphasis needs to be placed on specific products

B)

an organization's products or services differ substantially

C)

an organization offers few products

D)

special emphasis needs to be placed on specific services

E)

all of the above 76)

How would Hershey's current divisional structure most likely be classified? 76)

A)

By geographic area

B)

By service

C)

By customer

D)

By product

E)

By process 77)

A divisional structure by geographic area is most appropriate when 77)

A)

strict control and attention to product lines are needed

B)

an organization offers only a limited number of products or services

C)

organizations have similar branch facilities located in widely dispersed areas

D)

an organization has many skilled managers

E)

the firm serves one geographic area 78)

What is the best divisional structure when a few major customers are of paramount importance and many different services are provided to these customers?

78)

A)

By customer

B)

By cost

C)

By product

D)

By geographic area

E)

By process 79)

Which organizational structure has ambiguous roles for senior executives as a major disadvantage? 79)

A)

Strategic business unit (SBU)

B)

Functional

C)

Matrix

D)

Divisional

E)

Process 80)

What is the most complex form of organizational structure? 80)

A)

Divisional

B)

Matrix

C)

Geographic

D)

Functional

E)

Strategic business unit (SBU) 81)

When developing an organizational chart, you should 81)

A)

Make sure that the chief financial officer is not at the same level as the chief operating officer

B)

Use the title "president" for the top person

C)

Have division presidents report to a chief operating officer

D)

Recommend dual titles for executives

E)

Have the controller or treasurer report directly to the president 82)

Restructuring is also referred to as 82)

A)

integrating

B)

job security

C)

starting over

D)

diversifying

E)

delayering 83)

Which term is most often associated primarily with shareholder being rather than employee being?

well-83)

A)

Restructuring

B)

Reengineering

C)

Benchmarking

D)

Process management

E)

Product redesign 84)

Which of these involves comparing a firm against the best firms in the industry on a wide variety of performance-related criteria?

84)

A)

Process redesign

B)

Benchmarking

C)

Reengineering

D)

Restructuring

E)

Delayering 85)

The primary benefit sought from restructuring is 85)

A)

increased number of hierarchical levels in the organization

B)

increased innovation

C)

increased morale

D)

employee involvement

E)

cost reduction 86)

What action involves reconfiguring or redesigning work, jobs and processes for the purpose of improving costs, quality, service and speed?

86)

A)

Reengineering

B)

Downsizing

C)

Restructuring

D)

Delayering

E)

Benchmarking 87)

A firm uses information technology to break down functional barriers and to create a work system based

on business processes, products, or outputs rather than on functions or inputs in

87)

A)

restructuring

B)

benchmarking

C)

reengineering

D)

delayering

E)

decentralization 88)

Which pay strategy is not a form of incentive compensation? 88)

A)

Bonus system

B)

Hourly wage

C)

Profit sharing

D)

All of these are forms of incentive compensation

E)

Gain sharing 89)

Which of these is not one of the tests used to determine whether a performance-pay plan will benefit an organization?

89)

A)

Does the plan pay out when it should?

B)

Do employees understand the plan?

C)

Does the plan reduce management layers?

D)