Strategy – FAQ – 06

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List of FAQs

Q1

Effective strategy formulation can usually guarantee successful strategy implementation.

  1. True
  2. False

Q2

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

  1. True
  2. False

Q3

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

  1. True
  2. False

Q4

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

  1. True
  2. False

Q5

A bottom-up flow of communication is essential for developing bottom-up support.

  1. True
  2. False

Q6

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

  1. True
  2. False

Q7

Horizontal consistency is more important than vertical consistency in developing annual objectives.

  1. True
  2. False

Q8

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

  1. True
  2. False

Q9

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

  1. True
  2. False

Q10

Strategies clarify what can and cannot be done in pursuit of an organization’s objectives.

  1. True
  2. False

Q11

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

  1. True
  2. False

Q12

Avoidance, defusion, and confrontation are the classifications for the various types of conflict that can arise in organizations.

  1. True
  2. False

Q13

Well-run organizations are able to completely avoid conflict.

  1. True
  2. False

Q14

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.

  1. True
  2. False

Q15

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

  1. True
  2. False

Q16

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

  1. True
  2. False

Q17

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

  1. True
  2. False

Q18

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

  1. True
  2. False

Q19

A functional structure can be effective at eliminating short-term and narrow thinking.

  1. True
  2. False

Q20

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

  1. True
  2. False

Q21

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.

  1. True
  2. False

Q22

With a divisional structure by customer, an organization can effectively cater to the requirements of clearly defined customer groups.

  1. True
  2. False

Q23

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

  1. True
  2. False

Q24

The most complex of all organizational structures is a matrix structure.

  1. True
  2. False

Q25

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

  1. True
  2. False

Q26

When developing an organizational chart, the title president should be reserved for the top executive of the firm.

  1. True
  2. False

Q27

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

  1. True
  2. False

Q28

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

  1. True
  2. False

Q29

Restructuring is also called rightsizing.

  1. True
  2. False

Q30

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

  1. True
  2. False

Q31

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

  1. True
  2. False

Q32

Six Sigma is generally equally successful in retail firms and manufacturing firms.

  1. True
  2. False

Q33

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

  1. True
  2. False

Q34

Restructuring in many firms has made a manager’s job an invisible, thankless role.

  1. True
  2. False

Q35

A dual bonus system based on both annual objectives and long-term objectives is becoming common.

  1. True
  2. False

Q36

In Japan, performance rather than seniority has traditionally been the key factor in determining pay.

  1. True
  2. False

Q37

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

  1. True
  2. False

Q38

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

  1. True
  2. False

Q39

A rational change strategy means giving orders and enforcing those orders.

  1. True
  2. False

Q40

When the rational type change strategy is successful, strategy implementation can be relatively easy.

  1. True
  2. False

Q41

The advantage of the educative change strategy is that implementation is quick and relatively easy.

  1. True
  2. False

Q42

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

  1. True
  2. False

Q43

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.

  1. True
  2. False

Q44

A force change strategy is plagued by low commitment and high resistance.

  1. True
  2. False

Q45

Organizational change today should be viewed as a project or event rather than as a continuous project.

  1. True
  2. False

Q46

Changing a strategy to fit an existing culture is not as effective as changing a firm’s culture to fit a new strategy.

  1. True
  2. False

Q47

Strategists should strive to preserve, emphasize, and build upon aspects of an existing culture that are antagonistic to a proposed strategy.

  1. True
  2. False

Q48

Recruitment, promotion, and mentoring are ways to alter an organization’s culture.

  1. True
  2. False

Q49

When attachments to a culture are severed in an organization’s attempt to change direction, employees and managers often experience deep feelings of grief.

  1. True
  2. False

Q50

Production processes typically constitute less than 50 percent of a firm’s total assets.

  1. True
  2. False

Q51

JIT significantly increases the costs of implementing strategies.

  1. True
  2. False

Q52

Besides reducing worker alienation and stimulating productivity, ESOPs allow firms other benefits, such as substantial tax savings.

  1. True
  2. False

Q53

ESOPs work well even in firms with fluctuating payrolls and profits.

  1. True
  2. False

Q54

Strategy formulation…

  1. is managing forces during the action
  2. requires coordination among a few individuals
  3. is primarily an operational process
  4. requires special motivation and leadership skills
  5. all of the above

Q55

Which of these is true about strategy implementation?

  1. It is positioning forces before the action.
  2. It focuses on effectiveness.
  3. It is primarily an operational process.
  4. It is primarily an intellectual process.
  5. It requires intuitive skills.

Q56

Which of the following is a management issue central to strategy implementation?

  1. Devising policies
  2. Revising reward and incentive plans
  3. Minimizing resistance to change
  4. Developing an effective human resources function
  5. All of the above

Q57

Establishing objectives is a…

  1. executive-only activity
  2. centralized activity
  3. decentralized activity
  4. centralized-decentralized activity
  5. command-and-control activity

Q58

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

  1. monitoring progress toward long-term objectives
  2. establishing divisional priorities
  3. allocating resources
  4. evaluating managers
  5. all of the above

Q59

Which of the following is not true about objectives?

  1. They should be communicated throughout the organization.
  2. They should have an appropriate time dimension.
  3. They should use terms like “maximize,” “minimize,” and “as soon as possible.”
  4. They should be measurable.
  5. They should be consistent.

Q60

Which word or phrase would most be best to use in written objective statements?

  1. Maximize
  2. Minimize
  3. 10% increase
  4. Adequate
  5. As soon as possible

Q61

What term is used to describe specific guidelines, methods, procedures, rules, forms and administrative practices established to support and encourage work toward stated goals?

  1. Long-term objectives
  2. Policies
  3. Annual objectives
  4. Strategies
  5. Values

Q62

Policies…

  1. let both employees and managers know what is expected of them
  2. provide a basis for management control
  3. allow coordination across organizational units
  4. reduce the amount of time managers spend making decisions
  5. all of the above

Q63

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

  1. Avoidance
  2. Furlough
  3. Competition
  4. Resource allocation
  5. Conflict

Q64

________ is not a major factor that commonly prohibits effective resource allocation.

  1. Underprotection of resources
  2. Organizational politics
  3. Having vague strategy targets
  4. A reluctance to take risks
  5. A lack of sufficient knowledge

Q65

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

  1. integrated solution
  2. conflict
  3. compromise
  4. diffusion
  5. avoidance

Q66

Conflict in an organization is…

  1. always bad
  2. always good
  3. not always bad
  4. a sign of bankruptcy
  5. completely avoidable

Q67

What are the three categories of approaches for managing and resolving conflict?

  1. Avoidance, defusion, and confrontation
  2. Avoidance, apathy, and defusion
  3. Ignorance, indifference, and apathy
  4. Defusion, apathy, and avoidance
  5. Indifference, avoidance, and role-playing

Q68

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?

  1. Avoidance
  2. Resistance
  3. Compliance
  4. Defusion
  5. Confrontation

Q69

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

  1. Avoidance
  2. Resistance
  3. Compliance
  4. Defusion
  5. Confrontation

Q70

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

  1. Avoidance
  2. Resistance
  3. Compliance
  4. Defusion
  5. Confrontation

Q71

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

  1. Structure dictates how goals and objectives will be established.
  2. Structure dictates how resources will be allocated.
  3. Structure should be designed to facilitate the strategic pursuit of a firm.
  4. All of the above
  5. None of the above

Q72

What type of organizational structure promotes specialization of labor and allows rapid decision making?

  1. Divisional structure by product
  2. Functional structure
  3. Divisional structure by customer
  4. Strategic business unit
  5. Matrix structure

Q73

Which organizational structure is the most widely used?

  1. Departmental
  2. Strategic business unit
  3. Functional
  4. Decentralized
  5. Matrix

Q74

Medium-sized firms tend to use which type of structure?

  1. Divisional
  2. Matrix
  3. SBU
  4. Functional
  5. Centralized

Q75

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

  1. By geographic area
  2. By product
  3. By customer
  4. By process
  5. By cost

Q76

A divisional structure by product is most effective when…

  1. special emphasis needs to be placed on specific products
  2. an organization offers few products
  3. an organization’s products or services differ substantially
  4. special emphasis needs to be placed on specific services
  5. all of the above

Q77

How would Hershey’s current divisional structure most likely be classified?

  1. By geographic area
  2. By product
  3. By service
  4. By customer
  5. By process

Q78

A divisional structure by geographic area is most appropriate when…

  1. organizations have similar branch facilities located in widely dispersed areas.
  2. an organization offers only a limited number of products or services.
  3. consumption patterns for its products and/or services are the same worldwide.
  4. the company’s customers in different geographic locations have similar needs and characteristics.
  5. the firm serves one geographic area.

Q79

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

  1. By geographic area
  2. By customer
  3. By product
  4. By process
  5. By cost

Q80

Which organizational structure has the disadvantage of ambiguous roles for senior executives?

  1. Functional
  2. Divisional
  3. Strategic business unit
  4. Matrix
  5. Process

Q81

What is the most complex form of organizational structure?

  1. Divisional
  2. SBU
  3. Matrix
  4. Functional
  5. Geographic

Q82

When developing an organizational chart, you should…

  1. recommend dual titles for executives
  2. use the title “president” for the top executive of the firm
  3. make sure that the chief financial officer is not at the same level as the chief operating officer
  4. have division presidents report to a chief operating officer
  5. have employees report to more than one person in the chain of command

Q83

Restructuring is also referred to as…

  1. reengineering
  2. delayering
  3. diversifying
  4. upsizing
  5. integrating

Q84

Which term is primarily concerned with shareholder well-being rather than employee well-being?

  1. Benchmarking
  2. Reengineering
  3. Product redesign
  4. Process management
  5. Restructuring

Q85

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

  1. Restructuring
  2. Process redesign
  3. Reengineering
  4. Delayering
  5. Benchmarking

Q86

The primary benefit sought from restructuring is…

  1. employee involvement
  2. cost reduction
  3. increased morale
  4. increased number of hierarchical levels in the organization
  5. increased innovation

Q87

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

  1. Restructuring
  2. Downsizing
  3. Reengineering
  4. Delayering
  5. Recruiting

Q88

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?

  1. Restructuring
  2. Benchmarking
  3. Reengineering
  4. Rightsizing
  5. Delayering

Q89

All of the following statements regarding the recent trend in Japan of switching from seniority-based pay to performance-based approaches are true except…

  1. the switch is an effort to cut costs
  2. the switch is boosting employee morale
  3. the switch is an effort to increase productivity
  4. the switch opposes the traditional training of Japanese employees to cooperate rather than compete
  5. the switch goes against decades of encouraging workers to work in groups instead of individually

Q90

What pay strategy requires employees or departments to establish performance targets, which, if exceeded, result in bonuses for all members?

  1. Profit sharing
  2. Bonus system
  3. Salary
  4. Gain sharing
  5. Hourly wage system

Q91

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

  1. Does the plan capture attention?
  2. Do employees understand the plan?
  3. Is the plan improving communications?
  4. Does the plan pay out when it should?
  5. Does the plan reduce management layers?

Q92

What change strategy involves giving orders and enforcing those orders?

  1. Self-interest
  2. Educative
  3. Force
  4. Rational
  5. Defusion

Q93

Resistance to change can manifest itself through…

  1. absenteeism
  2. sabotaging production machines
  3. filing unfounded grievances
  4. unwillingness to cooperate
  5. all of the above

Q94

A change strategy that attempts to convince people that the change is to their personal advantage is…

  1. defusion
  2. force
  3. educative
  4. rational
  5. compromise

Q95

Which of the following is in keeping with the current view of organizational change?

  1. Organizational change is a project.
  2. Organizational change is a continuous process.
  3. Organizational change is an event.
  4. Organizational change involves unfreezing behavior, changing the behavior, and then refreezing the new behavior.
  5. All of the above

Q96

Formal statements of organizational philosophy, charters, creeds, materials used for recruitment and selection, and socialization help an organization…

  1. abide by SEC laws
  2. link culture to strategy
  3. set guidelines for firing
  4. increase profits
  5. manage conflicts between stakeholders

Q97

Changing a strategy to fit an existing culture…

  1. is usually less effective than changing a firm’s culture to fit a new strategy
  2. is usually more effective than changing a firm’s culture to fit a new strategy
  3. is just as effective as changing a firm’s culture to fit a new strategy
  4. is always the best option
  5. none of the above

Q98

All of the following are examples of offerings at companies to promote a corporate wellness culture except…

  1. stress management programs
  2. health fairs
  3. abundance of bicycle racks onsite
  4. free health insurance for employees who exercise regularly
  5. cash incentives for completing Ironman triathlons

Q99

All of the following are ways and means for altering an organization’s culture except…

  1. recruitment
  2. restructuring of an organization’s design
  3. role modeling
  4. retrenchment
  5. mentoring

Q100

Aspects of an existing culture that are antagonistic to a proposed strategy should be…

  1. preserved
  2. emphasized
  3. built upon
  4. changed
  5. celebrated