Deck 12: Strategic Leadership

Question 1

As the dynamics of competition accelerate, people become a highly significant source of competitive advantage.

Answer 1

True

Question 2

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

Answer 2

False

Question 3

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

Answer 3

True

Question 4

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

Question 5

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 6

When the new CEO is from inside the firm and a heterogeneous top management team is in place, the strategy may not change, but innovation is likely to continue.

Question 7

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

Question 8

Effectively managing the firm's resource portfolio (financial, human, social, and organizational capital) is an important strategic leadership task.

Question 9

Transformational leadership is considered to be one of the most effective strategic leadership styles.

Question 10

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 11

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

Question 12

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

Question 13

As a member of the board at Bered Group, strategic plan development is your number one responsibility, followed closely by succession planning.

Question 14

Strategic leaders are most likely to integrate ethical values into their decisions when the company has explicit ethics codes that are integrated into the business through extensive ethics training.

Question 15

Some companies have a preference for insiders to fill top-level management positions because of the desire for continuity and a continuing commitment to the firm's existing vision, mission, and chosen strategies.

Question 16

An internal managerial labor market consists of a firm's opportunities for managerial positions and the qualified employees within that firm.

Question 17

Rewarding those who use proper channels and procedures to report observed wrongdoings is an example of an action that should be taken by a strategic leader to develop an ethical organizational culture.

Question 18

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

Question 19

Financial controls provide feedback about outcomes achieved from past actions and predictions about future performance.

Question 20

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 21

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

Question 22

One critical ability of a strategic leader is skill in attracting and managing human capital.

Question 23

The advantages of long tenure (firm-specific human and social capital, knowledge, and power) seem to outweigh the disadvantages of rigidity and maintaining the status quo.

Question 24

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 25

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 26

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

Question 27

Organizational culture is a complex set of ideologies, symbols, and core values that are shared throughout the firm, but its development is so subtle and poorly understood that top managers cannot influence its content.

Question 28

Members with substantive expertise in the firm's core functions and businesses aid the effectiveness of the top management team.

Question 29

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

Question 30

Criteria, such as percentage of repeat business and improvements in innovation ability, are part of the learning and growth perspective of the balanced scorecard.

Question 31

It is not always beneficial to have a top-management team that is heterogeneous.While the firm benefits from debates engendered by the different viewpoints, it ultimately suffers from the lower quality of the team's decisions.

Question 32

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

Question 33

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 34

The CEO of YorkMark, Inc., has an exceptional amount of power in the organization.It is likely the board of directors is composed of sympathetic outside members and insiders who report to the CEO.

Question 35

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

Question 36

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

Question 37

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

Question 38

Including talent from both the internal and external labor markets increases the likelihood that the firm will be able to form an effective top management team.

Question 39

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 40

The CEO of Alacore invested significant effort into expanding the firm's capabilities in technology development and marketing, especially in customer service, to give Alacore a competitive advantage over its rivals.In this situation, the CEO was reshaping capabilities into core competencies.

Question 41

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 42

Clarita Cosmetics is confronting a decline in sales due largely to a general economic downturn.The top management team is debating whether to lay off employees.Which of the following statements made during the debate is false?

A) If Clarita Cosmetics lays off a large number of employees, a significant loss of human capital will cause further downturns in the firm's performance.
B) A moderate-sized layoff at Clarita Cosmetics will probably improve firm performance.
C) If Clarita Cosmetics restructures, it ought to increase investments in training and development.
D) A layoff will increase the slack at Clarita Cosmetics and allow the firm to absorb the increased number of errors employees may make until they learn their new tasks.

Question 43

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

Question 44

The underlying premise of the balanced scorecard is that firms jeopardize their future performance when strategic controls are emphasized at the expense of financial controls.

Question 45

A CEO may gain power by holding the titles of both CEO and chairman of the board.

Question 46

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 47

The most effective leadership style is __________ leadership.

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

Question 48

Which of the following will increase the probability that a lower-level manager will become a successful strategic leader?

A) Appointing many outside board members
B) Increasing the firm's sales
C) Increasing the homogeneity of the top management team
D) Training and development programs

Question 49

The balanced scorecard focuses on both financial and nonfinancial controls.

Question 50

The premise of the balanced scorecard is that firms jeopardize future performance possibilities when they:

A) overemphasize financial controls and neglect strategic controls.
B) overemphasize strategic controls and neglect financial controls.
C) overemphasize strategic and financial controls and neglect ethical controls.
D) neglect short-term controls of all kinds in favor of long-term strategic controls.

Question 51

Chaymark Ltd.has successfully shared complementary resources with other firms.Chaymark has achieved a level of transparency with those firms that has created trust and will enable additional sharing of resources in the future.What type of capital has Chaymark developed and used?

A) Human
B) Social
C) Financial
D) Organizational

Question 52

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 53

Shaping and reinforcing a new organizational culture requires all of the following EXCEPT:

A) effective communication.
B) effective performance appraisals.
C) adherence to the firm's traditional core values.
D) an appropriate reward system.

Question 54

Top management team members and CEOs who have long tenure on the team and in the organization have a greater influence on board decisions.

Question 55

The Enron employee who reported the financial manipulations at the company to her superiors can be considered to have engaged in:

A) managerial opportunism.
B) white-collar crime.
C) vindictive disloyalty.
D) an act of courage.

Question 56

A leader's style is commonly based upon what?

A) The leader's work experience
B) The leader's educational background
C) The leader's race or ethnicity
D) The leader's personal ideology and experience

Question 57

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

Question 58

A firm will closely examine different segments of the balanced scorecard, depending on what it wants to learn about itself as it seeks balance.For example, PeliCorp wants to understand what processes it should emphasize in order to successfully use its competitive advantage.About which perspective is PeliCorp most concerned?

A) Internal
B) Financial
C) Customer
D) Learning and growth

Question 59

When a company does not possess all of the resources needed to successfully compete against its rivals, external social capital becomes increasingly critical to the firm's success.

Question 60

Billy Kroghmen is the son of a very prominent Fortune 500 CEO.Billy has had troubles.He failed out of multiple colleges, universities, and correspondence schools.He finally received his undergraduate degree from a university with only a post office box for an address.He then enrolled in the school's combined graduate accounting and law school programs, graduating with honors and degrees in both areas.After graduation, he twice failed both the CPA and bar exams, managing to set record low scores on the ethics portions of both.Despite these academic setbacks, Billy's career now seems to be thriving.He has been appointed to a number of "blue ribbon" government committees and is on the board of directors of two corporations and one prestigious not-for-profit organization.In at least one instance, a donor credited Billy with the idea for making a large contribution to the not-for-profit.Widespread speculation is that his career advancement is based largely on social relationships through friends and family.We would classify Billy as __________ on __________ capital, and __________ on __________ capital.

A) high; social; low; human
B) high; human; high; social
C) high; human; low; social
D) None of these is correct.

Question 61

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

A) Higher firm performance
B) Innovation and strategic change
C) Diminished debate among top managers
D) Better strategic decisions

Question 62

The top management team at Ingenuity, Inc., has assigned a team of scientists to a multiyear project to investigate the viability of growing large amounts of fur from cloned cells of minks and foxes to produce no-kill fur products for coats and other clothing items.This idea would satisfy all of the following dimensions of the entrepreneurial mind-set EXCEPT:

A) innovativeness.
B) risk taking.
C) proactiveness.
D) competitive autonomy.

Question 63

Organizational controls provide:

A) the parameters within which strategies are to be implemented.
B) goals and objectives that must be achieved.
C) information on action steps to be taken to implement the corporate strategy.
D) managers with guidelines on how to treat employees.

Question 64

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) a high level of integrity and a low tolerance for ambiguity.
B) high emotional intelligence and high tolerance for ambiguity.
C) a high level of integrity and high emotional intelligence.
D) a low tolerance for ambiguity and a high level of experience.

Question 65

The __________ is a tool firms use to determine if they are achieving an appropriate balance when using strategic and financial controls as a means of positively influencing performance.

A) managerial model
B) holistic control system
C) balanced scorecard
D) internal auditing system

Question 66

Which of the following statements regarding effective organizational cultures is true?

A) Once a corporate culture is developed, strategic leaders can focus on other activities.
B) A strategy that is historically new for a firm should be implemented by incremental changes in the organization's culture.
C) A central task of strategic leaders is to revise the corporate culture on an annual basis after analyzing the changes occurring in the competitive environment.
D) Organizational culture can be a source of competitive advantage because it helps regulate and control employee behavior and influences how the firm conducts its business.

Question 67

Competitive aggressiveness describes a firm's:

A) tendency to engage in new ideas and creative processes.
B) willingness to allow employees to take actions free of organizational constraints.
C) ability to be a leader in the marketplace.
D) propensity to take actions that allow it to outperform rivals consistently and substantially.

Question 68

Which key strategic leadership action plays a key role in influencing how the firm conducts its business and regulates and controls employees' behavior?

A) Effectively managing the firm's resource portfolio
B) Determining strategic direction
C) Regulating and controlling employees
D) Sustaining an effective organizational culture

Question 69

Strategic control focuses on the __________ of strategic actions, whereas financial controls focus on the __________ of strategic actions.

A) revenues; costs
B) long-term financial outcomes; short-term financial performance
C) content; outcomes
D) outcomes; content

Question 70

Determining the strategic direction of a firm involves:

A) implementation of a balanced scorecard.
B) developing an entrepreneurial mind-set.
C) specifying the vision and the strategy to achieve that vision.
D) exploiting and maintaining core competencies.

Question 71

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) Internal CEO succession and a homogeneous top management team
C) External CEO succession and a heterogeneous top management team
D) A new CEO hired from outside the industry

Question 72

Firms needing to change their strategies should:

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

Question 73

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 made.
D) more difficult it becomes to make effective executive decisions.

Question 74

Four perspectives are integrated to form the balanced scorecard framework.The financial perspective focuses on the view of the firm by the:

A) customer.
B) employee.
C) shareholder.
D) general society.

Question 75

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 76

Which of the following 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 United States except in smaller firms.
D) If the CEO acts as a steward, CEO duality facilitates effective decisions and actions.

Question 77

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 individuals 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 78

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 79

Human capital refers to the:

A) the net present value of the future competencies of the workforce.
B) the amount of money purchasers of the firm would pay for the continuing employment of the present workforce.
C) the value that the firm's workforce contributes to each product produced or service rendered.
D) knowledge and skills of a firm's entire workforce.

Question 80

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) A broader knowledge base