Deck 12: Strategic Leadership

Question 1

The experience that results from long tenure in a firm is known to extend the breadth of an executive's knowledge base.

Answer 1

False

Question 2

A CEO may gain power by holding the titles of both CEO and Chairman of the Board.

Answer 2

True

Question 3

External environmental factors that may affect managerial discretion include industry structure, rate of market growth, and degree of product differentiation.

Answer 3

True

Question 4

Compared to homogeneous top management teams, heterogeneous top management teams are more likely to change their firm's strategies when necessary and to support innovation.

Question 5

The more homogeneous a top management team, the more likely those managers will be innovative and willing to pursue strategic change.

Question 6

In addition to determining new strategic initiatives, top-level managers also develop the appropriate organizational structure and reward systems of a firm.

Question 7

The CEO is the individual with primary responsibility for effective strategic leadership within an organization.

Question 8

Internal labor markets consist of the career opportunities for managers within the firm for which they currently work.

Question 9

The more heterogeneous and the larger the top management team, the easier it is to implement strategy effectively.

Question 10

The most critical ability of a strategic leader is the ability to manage human capital.

Question 11

The decision making discretion of top-level managers is determined partly by external environmental factors such as the industry structure, the industry's rate of growth, and the degree to which products can be differentiated.

Question 12

In order for the strategic leader to survive, he or she needs to make optimal decisions for the organization.

Question 13

Selection of an insider as a new CEO indicates a firm's desire to encourage innovation and strategic change.

Question 14

Typically, a vice president would NOT be considered to hold a high enough position to be included in the top management team of an organization.

Question 15

The CEO of YorkMark, Inc., has an exceptional amount of power in the organization. It is likely the board of directors is composed of the CEO's friends from other firms and insiders who report to the CEO.

Question 16

Firm size, firm age, the executive's tolerance for ambiguity, and his or her commitment to strategic outcomes are all factors that may affect managerial discretion.

Question 17

The average tenure of CEOs has been declining in the past decade.

Question 18

Strategic leadership is the ability to anticipate, envision, maintain flexibility, and empower others to create strategic change as necessary.

Question 19

Board members with substantive expertise in the firm's core functions and businesses aids the effectiveness of the top management team.

Question 20

Transformational leadership is the most effective strategic leadership style.

Question 21

An emphasis on strategic controls encourages managers to be risk averse.

Question 22

Incremental changes to a firm's culture can be used to implement strategies effectively.

Question 23

Competitive aggressiveness, proactiveness, risk aversion, innovativeness, and autonomy are the five dimensions characterizing the entrepreneurial mindset.

Question 24

Employees usually have a strong preference for firms to use the internal managerial labor market when selecting top management team members and the CEO.

Question 25

People are perhaps the only truly sustainable source of competitive advantage.

Question 26

Strategic control focuses on the content of strategic actions rather than their outcomes.

Question 27

The balanced scorecard focuses on both financial and non-financial controls.

Question 28

A firm's ability to act in a variety of competitively relevant ways is termed competitive agility.

Question 29

Corporate cultures emerge naturally in organizations, but their development is so subtle and poorly understood that top managers cannot influence their content.

Question 30

To influence employees' judgment and behavior, ethical practices must shape the firm's decision-making process, but should be a peripheral part of organizational culture.

Question 31

The strategic direction of a firm usually focuses on the coming three to five years.

Question 32

For 15 years, Edward was a compensation specialist at a mid-sized firm. He was laid off when the firm experienced financial setbacks. Edward has decided to open his own business as a compensation consultant to small firms. He can expect that his main source of human capital will be a bank line of credit.

Question 33

There are no longer barriers for talented women to rise to top management positions because women such as Catherine Elizabeth Hughes and Carly Fiorina have risen to top positions in prominent firms.

Question 34

The scandalous behavior of executives at Tyco, WorldCom, and Enron could be considered the result of excessive focus on organizational controls by the renegade CEOs.

Question 35

In related diversified firms, core competencies are exploited most effectively when they are developed and applied across different organizational units.

Question 36

The training of future strategic leaders yields a competitive advantage for a firm, in part because knowledge and skills are necessary for successful execution of strategy.

Question 37

When a new CEO is selected from outside the firm, a change of strategy is likely, especially if the top management team is homogenous and highly cohesive.

Question 38

The firm's envisioned future encourages employees to stretch beyond their expectations of accomplishment and requires significant change and progress to be realized.

Question 39

The firm's core ideology motivates the firm's employees through the company's heritage.

Question 40

Financial controls provide feedback about the outcomes of the firm's past actions and predictions about the results of the firm's future actions.

Question 41

Normally, the more involved a board of directors is in shaping the firm's strategic direction, the

A) more balanced the organization is.
B) higher the corporation's performance is.
C) more rapidly executive decisions can be make.
D) more difficult it becomes to make effective executive decisions.

Question 42

Criteria such as asset utilization improvements and changes in employee turnover rates are part of the internal business processes perspective of the balanced scorecard.

Question 43

An organization's ____ is composed of the key individuals who are responsible for selecting and implementing the firm's strategies.

A) top management team
B) board of directors
C) keiretsu
D) governance circle

Question 44

All of the following are external environmental sources that affect managerial discretion EXCEPT

A) industry structure.
B) corporate culture.
C) market growth rate.
D) potential for product differentiation.

Question 45

The balanced scorecard's perspective on learning and growth is intended to improve the firm's ability to innovate.

Question 46

The top management team is composed of the

A) heterogeneous group of advisors selected by the CEO.
B) CEO and chairperson of the board
C) key managers who are responsible for selecting and implementing a firm's strategy.
D) officers listed in a firm's annual report and the board of directors.

Question 47

Doug Conant has brought a transformational leadership style to Campbell's. His actions include all of the following EXCEPT

A) using a personal touch to interact with people.
B) establishing a system of quantitative feedback on individual job performance.
C) working with individuals to jointly set their performance expectations.
D) creating opportunities for every person to succeed.

Question 48

A heterogeneous top management team is composed of individuals with

A) different functional backgrounds, experience, and education.
B) similar commitments to the organization's core ideology and culture.
C) a high level of education and industry expertise.
D) long tenure in the organization who have held various functional positions.

Question 49

The most effective leadership style is ____ leadership.

A) pragmatic
B) charismatic
C) inspirational
D) transformational

Question 50

Dennis Koslowski, the disgraced former CEO of Tyco, seems to have felt there was no boundary between his own interests and the company's interest. He eliminated people who disagreed with him. He underestimated the obstacles confronting the company. His attitude was one of arrogance and extreme self-confidence. This attitude can be summed up as

A) managerial hubris.
B) executive isolation.
C) denial of reality.
D) CEO sociopathy.

Question 51

The ability to manage ____ may be the most important skill a strategic leader must have.

A) human capital
B) financial resources
C) responses to competitors' actions
D) investment strategies

Question 52

The balanced scorecard has not been widely implemented because of the amount of detail required in analyzing the organization and establishing the controls.

Question 53

.The primary responsibility for effective strategic leadership of the organization rests with the

A) board of directors
B) top management team.
C) CEO.
D) stakeholders.

Question 54

A characteristic of the manager that may affect managerial discretion is his/her

A) amount of industry experience.
B) level of education.
C) tolerance for ambiguity.
D) length of tenure.

Question 55

Recently, Sony selected Sir Howard Stringer as CEO. Sir Howard is not Japanese and he was not a Sony employee before his selection. Which of the following statements is FALSE?

A) Sony's top management team will be more heterogeneous with the addition of Sir Howard.
B) Sir Howard will have a broader perspective of the firm and its competitive environment than would a Sony insider.
C) If Sony's top management team is homogeneous, Sir Howard's future impact on Sony's strategy is ambiguous.
D) The decision-making process on Sony's top management team will be smoother and faster with the addition of Sir Howard.

Question 56

Executive headhunters have approached Charles about taking the position of senior vice president of marketing for a well-known company. Although this company has been highly successful since 1995, Charles has heard persistent rumors of overly aggressive marketing tactics, questionable reporting of sales data, and an atmosphere of intolerance of criticism. The CEO is a powerful and charismatic individual, who built the company from a small regional firm to an international powerhouse in only a decade. The other top managers have been hand-picked by the CEO, as have a number of the members of the board of directors. The salary for this position is very high and includes generous stock options. It would be a major step up in Charles' career and would position him to move to CEO of another company in the future. Charles has prided himself on his high moral values and is viewed as an exceptionally ethical person by his peers. What should Charles do?

A) Charles should take the job because he can effect real change in the culture of the organization, and take advantage of the personal financial and career opportunities.
B) Charles should realize that personal moral values and the realities of the corporate world differ in both quality and degree. Consequently, he can take a job in an ethically borderline company without tainting his personal moral standing.
C) Charles should not rely on rumors to dissuade him from making an advantageous career decision.
D) Charles should not take the job because the culture of the organization is set by the CEO and other top managers. He would have little influence on the organizational culture as one of many top managers.

Question 57

Which of the following is NOT a factor that determines the amount of a manager's decision discretion?

A) characteristics of the manager
B) characteristics of the organization
C) cohesiveness of the board of directors
D) the external environmental

Question 58

Which of the following is NOT associated with heterogeneous top management teams?

A) higher firm performance
B) identification of environmental changes
C) diminished debate among top managers
D) better strategic decisions

Question 59

The more heterogeneous the top management team, the

A) more difficult it will be for the team to implement strategies.
B) more likely it is that the team will be cohesive.
C) less innovative the team's decisions will tend to be.
D) less diverse the team membership will be.

Question 60

The board of directors for TundraPro, Inc., is searching for a new CEO. The firm is in need of new direction after suffering several years of declining performance and increasingly demoralized management and employees. The board has decided it needs a CEO who can be a transformational leader. To this specific end, the board needs to identify applicants who have

A) high levels of honesty, trustworthiness, and integrity.
B) high emotional intelligence.
C) excellent analytical skills.
D) low tolerance for ambiguity.

Question 61

Which of the following is NOT a benefit to the firm using the internal labor market to select a new CEO?

A) Internal hiring results in an increased level of innovation.
B) Insiders are familiar with the firm's products.
C) Use of the internal labor market reduces turnover among existing employees.
D) Insiders are more familiar with a firm's operating procedures.

Question 62

An example of the external labor market is the situation where

A) an assessment center operated by an external consulting firm evaluates company managers for promotion potential.
B) a new vice president of marketing is hired from a competitor.
C) the senior vice president of finance is promoted to CEO.
D) a vice president of human resources is sent to a university executive MBA program for professional development.

Question 63

The firm of Bergeron has existed for hundreds of years, having made exquisite clocks and watches. In its advertising it refers to clocks the firm made for such past royalty as Marie Antoinette and the Czars of Russia. Employees are constantly reminded of the firm's rich history and its long tradition of excellence of design and execution. Bergeron is motivating its employees through its

A) core ideology.
B) envisioned future.
C) organizational culture.
D) business strategy.

Question 64

CEO duality refers to

A) firms where there is both a president and a CEO.
B) CEOs who sit on the board of directors of other firms.
C) CEOs who hold office in more than one company.
D) the situation where the CEO is also chairperson of the board of directors.

Question 65

When the top management team is homogeneous and a new CEO is selected from inside the firm, it is

A) unlikely that the current strategy will change.
B) likely that product innovation will continue.
C) likely there will be a change in strategy.
D) unlikely the new CEO will have a long tenure.

Question 66

As the organizational environment become more complex, heterogeneous and ambiguous, firms need to

A) create more diverse leadership teams.
B) focus on their core customer base.
C) implement transformational leadership.
D) emphasize the training and development of internal managerial talent.

Question 67

The CEO/chairman of PharmaPacifica was recently killed in an airplane crash. This tragedy has thrown PharmaPacifica into turmoil as there is no one in the organization qualified to step into the former CEO's shoes. This is an example of

A) a failure of succession management.
B) managerial hubris.
C) the risk inherent in CEO duality.
D) excessive reliance on the internal managerial labor market.

Question 68

Which of the statements about CEO duality is FALSE?

A) CEO duality is associated with high CEO power.
B) CEO duality has been blamed for slow response to change by the organization.
C) CEO duality is relatively rare in the U.S. except in large Fortune 500 firms.
D) CEO duality is associated with the stewardship theory of organizational leadership.

Question 69

A CEO gains power from all of the following circumstances EXCEPT

A) when many of the outside directors are appointed by the CEO.
B) when the CEO is also the chairman of the board.
C) when tenure of the top management team is shorter than the tenure of the board.
D) the fact that inside board members report to the CEO.

Question 70

Two key strategic leadership actions include

A) monitoring the hiring of key employees and focusing on growth but not learning initiatives.
B) designing and then implementing the balanced scorecard.
C) setting appropriate financial targets and establishing an effective business level synergy.
D) determining strategic direction and establishing balanced organizational controls.

Question 71

Which of the following is NOT related to a CEO having long tenure in his or her position?

A) more effective strategic control
B) greater influence on board decisions
C) more limited perspective
D) high level of innovation

Question 72

A CEO's commitment to the status quo is influenced strongly by

A) his or her relationship with the board of directors.
B) whether he or she is also the chairperson of the board of directors.
C) his or her long tenure with the firm.
D) the level of social capital in the firm.

Question 73

Christina is evaluating Maximum Brands as an investment opportunity. She is very concerned about future financial performance by Maximum Brands. Christina is not a believer in stewardship theory. Christina will probably be most concerned if

A) there is CEO duality.
B) many of the members of the board of directors are outsiders.
C) the positions of chairman of the board and CEO are held by different persons.
D) there is an independent board leadership structure.

Question 74

Which of the following factors most encourages stability in a firm's strategy?

A) a new CEO hired from outside the firm but within the industry
B) a homogeneous top management team
C) a top management team with managers from different functional backgrounds
D) a new CEO hired from outside the industry

Question 75

Determining the strategic direction for the firm refers to developing

A) a balanced scorecard.
B) a tactical response to threats and opportunities.
C) a specific image and character.
D) competitive agility and speed.

Question 76

Jack Welch, the former CEO of GE, built GE's profitability, in part, by reducing the number of jobs, cutting costs, making acquisitions, developing a powerful financial services unit, and perhaps through questionable accounting practices. Jeffery Immelt, the new CEO, is making a massive effort to change the organization's strategy to focus on innovation, customer satisfaction, and sales growth because the competitive landscape is shifting. Immelt can expect

A) a smooth transition to the new organizational strategy because of the organizational slack generated by Jack Welch.
B) to replace the entire top management team because once individuals commit to a core ideology and an envisioned future, they are unlikely to change.
C) some resistance by organizational stakeholders because they have "bought in" to Jack Welch's organizational strategy.
D) that he will inherit the "iconic aura" surrounding Jack Welch, which will give him credibility with GE's stakeholders.

Question 77

Monahegan Plasma Company is facing a dire and immediate crisis that threatens the existence of the company. Rapid decision-making is needed in a volatile and uncertain environment. In this case, Monahegan Plasma would benefit from a

A) insider CEO with short tenure.
B) outsider CEO with a heterogeneous top management team.
C) dual CEO/chairperson with a homogenous top management team.
D) CEO with long tenure who has a strong sense of hubris.

Question 78

The failure of organizations to use the pool of managerial talents held by women can best be termed

A) deliberate policy of discrimination.
B) lack of assertiveness by women managers.
C) managerial isolation from social trends.
D) an opportunity cost to firms.

Question 79

The recent choices of CEOs in U.S. automobile manufacturers (Chrysler, Ford, and General Motors) have come from the external labor market. This indicates

A) the failure of the firms to develop appropriate talent internally.
B) significant change is likely in these firms.
C) the tenure of the CEO will be short.
D) the firms are preparing for significant tactical moves.

Question 80

The CEO of CLEO, Inc., in all her communications to employees consistently refers to her dream of CLEO becoming the company of choice for employee assistance programs. She keeps this theme uppermost and it is reflected in the firm's motto, the title of its Web newsletter, and even on the company t-shirts and mugs. This is an example of the firm's

A) core ideology.
B) organizational culture.
C) strategy.
D) envisioned future.