Deck 2: Leading Strategically

Question 1

The job of strategic leadership is reserved for top managers. Managers at lower levels can not be strategic leaders.

Answer 1

False

Question 2

Heterogeneous top management teams make decisions more quickly than homogeneous teams, but are less likely to make mistakes.

Answer 2

False

Question 3

Historically, Nissan has always made sure to include non-Japanese employees in its top management teams.

Answer 3

False

Question 4

According to the text, recent estimates suggest that up to 75% of a company's value may be contained in its intangible resources.

Question 5

When companies are performing poorly, they are more likely to select a new CEO from within the firm, so that employees are already familiar with and comfortable with the new CEO's personality and leadership style.

Question 6

At times it is hard to tell whether a succor is an insider or an outsider.

Question 7

According to the text, the majority of CEO successions involve hiring someone from outside the firm.

Question 8

A policy of hiring and promoting people from within the company to top management positions does little to motivate employees to perform well.

Question 9

When a new CEO is selected from within the company, she/he is less likely to make drastic strategic changes than when an outsider becomes the new CEO.

Question 10

According to the text, the majority of CEO successions involve hiring someone from inside the firm.

Question 11

Today's strategic leaders generally involve others in strategic management.

Question 12

A homogeneous top management team is more likely to make major mistakes than a heterogeneous top management team.

Question 13

The top management team at most firms is composed of people with the title of General Manager and higher.

Question 14

Wal-Mart was ranked #1 on Fortune's Most Admired Companies rankings from 2006-2008..

Question 15

When CEOs select members of their top management team, they usually prefer people who think differently from them and who will be willing to disagree with them.

Question 16

When firms are performing poorly they are more likely to use an outside CEO succession.

Question 17

In order to be successful, strategic leaders must only make revolutionary changes when they are new to an organization.

Question 18

A company's mission statement should be more concrete than the vision.

Question 19

Developing the top management team and a plan for management succession are important strategic leadership actions.

Question 20

The jobs of CEO and Chairman of the Board of Directors are essentially the same.

Question 21

One of 3M's biggest weaknesses has been the company's inability to incorporate new innovations into marketable products.

Question 22

A firm's intellectual property is developed by its

A) social capital.
B) human capital.
C) external social capital.
D) engineering department.

Question 23

Relationships with suppliers, alliance partners, venture capitalists and outsourcers are examples of external social capital.

Question 24

When top managers make decisions that are in the company's best interest rather than their own best interest, they are considered to be acting opportunistically.

Question 25

A company's vision is typically designed to be in effect for how long?

A) 3-5 years
B) 30-40 years
C) 40-50 years
D) None of these

Question 26

Which of the following statements concerning vision IS CORRECT?

A) Visions can vary greatly across firms
B) Visions are remarkably constant across all firms
C) Visions are remarkably constant across firms in the same industry
D) None of these

Question 27

Corporate governance begins with the Board of Directors.

Question 28

To build social capital, effective strategic leaders have well-developed

A) negotiation skills.
B) organizational skills.
C) relational skills.
D) planning skills.

Question 29

Because of the opportunity for unethical behavior, the SEC has started to carefully scrutinize

A) acquisitions.
B) divestitures.
C) internal CEO successions.
D) related-party transactions.

Question 30

To promote more effective corporate governance, institutional investors generally prefer

A) more interdependent inside directors.
B) more independent outside directors.
C) more interdependent outside directors.
D) fewer independent outside directors.

Question 31

Starbuck's current CEO is

A) Michael Dell
B) Howard Schultz
C) Anne Mulcahy
D) Dennis Kozlowski

Question 32

Companies develop employee training programs to enhance their human capital.

Question 33

Innovation is a hallmark of companies with entrepreneurial cultures.

Question 34

Tyco's new CEO Ed Breen believes that strategic leaders should

A) make acquisitions and build up the firm's debt to avoid becoming a takeover target
B) avoid revolutionary strategic changes until they have been with the company at least five years
C) use acquisitions to fuel growth and not waste time and money on internal sources of innovation
D) compete with brains as well as braun.

Question 35

All related-party transactions are unethical.

Question 36

Strategic leadership involves which of the following?

A) Developing a vision for the firm
B) Designing effective IT systems
C) Creating a "win at all costs" culture
D) Evaluating employee performance

Question 37

An entrepreneurial culture is more important in high technology companies than it is in low technology companies.

Question 38

General Mills has found success by resisting the trend toward healthier products.

Question 39

Human capital, organizational culture, and intellectual property are all examples of intangible resources.

Question 40

Which of the following companies operates with the vision to "dramatically change the industries within which it competes?"

A) Dell Computer
B) Apple Computer
C) eBay
D) Cisco Systems

Question 41

Which of the following could be classified as a "succession event?"

A) appointing an insider to become the new CEO
B) hiring a new CEO from outside the firm
C) making an acquisition and appointing the CEO from the acquired firm as the new CEO
D) all of these

Question 42

Buildings, manufacturing plants, offices, machinery and computers are all examples of

A) social capital
B) physical resources
C) intangible resources
D) organizational capital

Question 43

Which company's "ten-step talent" management development program is considered one of the most effective programs for developing strategic leaders?

A) General Electric
B) Ford
C) Wal-Mart
D) Google

Question 44

The group of managers charged with the responsibility to develop and implement a firm's strategies is best known as

A) the general management committee
B) the board of directors
C) the top management team
D) a stakeholder group

Question 45

A top management team that consists of people from different functional backgrounds and a variety of experience is considered to be

A) a heterogeneous team
B) a homogeneous team
C) more common in Japan than in the United States
D) a bad idea because they make decisions very quickly and are prone to making mistakes

Question 46

A companies top management team is generally composed of managers with the title of

A) CEO and above.
B) president and above.
C) vice-president and above.
D) vice-president and below.

Question 47

Entrepreneurial cultures

A) value innovation
B) encourage employees to identify and exploit new opportunities
C) encourage creativity and risk-taking
D) all of these

Question 48

Corporate governance begins with

A) the CEO.
B) the Board of Directors.
C) front-line managers.
D) everyone in the organization.

Question 49

External social capital can enable firms to

A) gain access to needed resources
B) increase or improve their ability to produce quality products
C) enter new markets
D) all of these

Question 50

Human capital, intellectual property and social capital are examples of

A) intangible resources
B) physical resources
C) tangible resources
D) organizational capital

Question 51

A top management team that is made up of people with very similar backgrounds and experience is considered to be

A) a heterogeneous team
B) a homogeneous team
C) more common in the United States than in Japan
D) a bad idea because they take too long to reach consensus

Question 52

The internal and external relationships that help a firm provide value to customers and other shareholders are known as

A) organizational capital
B) organizational learning
C) human capital
D) social capital

Question 53

Which of the following is most likely to help an organization expand its business into new markets?

A) human capital
B) external social capital
C) internal social capital
D) organizational capital

Question 54

Which of the following resources includes the knowledge and skills of the people working for the firm?

A) social capital
B) intellectual property
C) human capital
D) organizational capital

Question 55

When a company has "strong ties" with another firm, which of the following conditions exist?

A) trust exists between the parties and reciprocity is expected
B) top managers in both firms are compassionate and possess strong communication skills
C) leaders in both firms lead with their hearts as well as their heads
D) the companies share information, as well as financial capital

Question 56

When organizations continuously develop their knowledge and skills through training programs and on-the-job experiences they are focused on

A) developing social capital.
B) developing human capital.
C) balancing the scorecard.
D) developing entrepreneurial capital.

Question 57

What is one of the most common reasons that a board of directors chooses a new CEO from outside the organization?

A) Board desires to continue the strategies of the previous CEO
B) There are no insiders who are qualified to be CEO
C) Board desires to change the firm's strategies
D) None of these

Question 58

Which of the following companies DOES NOT appear in the top twenty of the Fortune list of the Most Admired Companies between 2006-2008?

A) FedEx
B) Google
C) General Motors
D) Wal-Mart

Question 59

Which type of top management team is likely to make the BEST decisions?

A) an entrepreneurial top management team
B) a heterogeneous top management team
C) a homogeneous top management team
D) a centralized top management team

Question 60

Which of the following types of CEO succession has the greatest potential to motivate employees to perform well?

A) outsider succession
B) inside/outside succession
C) insider succession
D) all of these

Question 61

What type of new strategic leader is the MOST likely to make drastic strategic changes?

A) a new strategic leader hired from outside the company
B) a new strategic leader hired from within the company
C) a new strategic leader hired from an acquired firm
D) none of these

Question 62

What type of control system focuses on the content of strategic actions rather than performance outcomes?

A) balanced control systems
B) organizational controls
C) strategic controls
D) financial controls

Question 63

Which of the following statements concerning the leadership of the Board of Directors IS CORRECT?

A) Over the past several years the percentage of non-employee board chairs has increased
B) Over the past several years the percentage of non-employee board chairs has decreased
C) Over the past several years the percentage of non-employee board chairs has remained constant
D) Over the past several years the percentage of CEOs who are also board chairs has risen to 55 percent

Question 64

Which of the following positions WOULD NOT be considered to be part of a company's top management team?

A) CEO
B) VP of Marketing
C) VP of Finance
D) Plant Manager

Question 65

According to the text, which of the following is the most common type of succession event?

A) hiring someone from outside the firm
B) hiring someone from inside the firm
C) hiring someone from outside the industry
D) all of these are equally common

Question 66

Apple's CEO was reimbursed $1.2 million for costs he incurred while using his personal jet for company business. This is an example of

A) managerial opportunism
B) unethical behavior
C) a related party transaction
D) fraudulent behavior

Question 67

According to the text, how can strategic leaders promote integrity and ethical behavior?

A) Develop standards for behavior among employees
B) Serve as role models for ethical behavior
C) Expect, praise and reward ethical behavior
D) All of these

Question 68

Which of the following is the BEST way for a company to ensure that performance standards are met and employees do not misuse the firm's resources?

A) build an entrepreneurial culture
B) develop an effective succession plan for top management
C) establish effective control systems
D) minimize the number of institutional investors

Question 69

Opportunistic behavior on the part of strategic leaders at Enron and Tyco has lead to an increase in the importance of

A) having insiders on a company's board of directors
B) institutional investing
C) corporate governance
D) related-party transactions

Question 70

Which of the following statements concerning an entrepreneurial culture IS INCORRECT?

A) It is important in both high and low technology firms
B) It allows companies to exploit new opportunities
C) It cannot tolerate failure
D) It encourages creativity and risk-taking

Question 71

What type of control system uses both financial and strategic controls simultaneously?

A) organizational control system
B) entrepreneurial control system
C) opportunistic control system
D) balanced scorecard control system

Question 72

Cisco Systems' CEO John Chambers analyzed the company's performance problems and decided to make fewer and more carefully planned acquisitions in order to improve performance. What type of control did Chambers' actions reflect?

A) financial control
B) strategic control
C) organizational control
D) cultural control

Question 73

What type of control system focuses primarily on generating sales revenue, maintaining reasonable expenses and remaining solvent?

A) balanced control systems
B) organizational controls
C) strategic controls
D) financial controls

Question 74

Which of the following strategic leaders is credited with restoring the entrepreneurial culture at Apple?

A) Steven Heyer
B) Ed Zander
C) Steve Jobs
D) Kevin Rollins

Question 75

Which of the following agencies is responsible for scrutinizing related party transactions?

A) Stockholder Protection Agency
B) Securities and Exchange Commission
C) Federal Trade Commission
D) World Trade Organization

Question 76

What are the two primary types of control systems that can be used to guide managerial decision-making?

A) business process controls and learning and growth controls
B) institutional controls and monetary controls
C) financial controls and strategic controls
D) cultural controls and performance appraisal

Question 77

When managers make decisions that are in their own best interests, rather than the best interests of their company, they are

A) acting entrepreneurially
B) acting strategically
C) acting opportunistically
D) none of these

Question 78

What legislation was passed in the United States in 2002 to require more managerial responsibility for company activities and outcomes?

A) White Collar Crime Act
B) Morgan-Zander Act
C) Kellner-Rollins Act
D) Sarbanes-Oxley Act

Question 79

In recent years, institutional investors in U.S. firms have demanded that boards of directors include more independent outsiders than inside officers. Why do these investors prefer independent outsiders on boards of directors?

A) They are more objective and more likely to agree with a CEO who is behaving opportunistically.
B) They are more subjective and less likely to agree with a CEO who is behaving entrepreneurially.
C) They are more objective and less likely to agree with a CEO who is behaving opportunistically.
D) They are more subjective and less likely to agree with a CEO who is behaving opportunistically.

Question 80

According to the text, strategic leaders can use all of the following behaviors to promote integrity and ethical behavior EXCEPT

A) appoint friends and associates to the company's board of directors
B) develop standards for behavior among employees
C) expect, praise and reward ethical behavior
D) serve as role models for ethical behavior