Deck 11: Strategic Leadership Emea Edition

Question 1

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

Answer 1

True

Question 2

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

Answer 2

False

Question 3

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

Answer 3

True

Question 4

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

Question 5

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

Question 6

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

Question 7

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 8

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

Question 9

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

Question 10

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 11

Evidence suggests that women are a qualified source of talent as strategic leaders that have been fully utilized especially given the current competitive landscape.

Question 12

The chapter Opening Case reports on a survey which found that almost 90% of boards of corporations had a succession plan for their CEO.

Question 13

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 14

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

Question 15

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

Question 16

External environmental factors that may affect managerial discretion include industry structure, rate of market growth, and degree to which products can be differentiated.

Question 17

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

Question 18

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 19

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 20

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

Question 21

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 22

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 23

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 24

As noted in the chapter Opening Case, the average tenure of CEOs has ___________ in recent years.

A) been limited to a three year term in most corporations
B) remained about the same
C) become longer
D) become shorter

Question 25

External social capital is increasingly critical to firm success as few if any companies have all the resources to successfully compete against their rivals.

Question 26

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 27

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 28

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 29

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

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 ability to attract and 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 32

Strategic leaders are most likely to integrate ethical values into their decisions when the company has explicit ethics codes.

Question 33

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 34

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

Question 35

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 36

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

Question 37

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 38

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 39

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

Question 40

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

Question 41

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 42

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 43

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 44

The ____ is a framework firms can use to verify that they have established both strategic and financial controls to assess their performance.

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

Question 45

Research shows that ____________ is the most effective means of ensuring that employees comply with the firm's ethical requirements.

A) a written code of ethics
B) a statement in the firm's mission statement
C) a speech on ethics by the CEO of the company
D) a value-based culture

Question 46

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, markets, technologies, and operating procedures.
C) Use of the internal labor market reduces turnover among existing employees.
D) Insiders are more familiar with a firm's operating procedures.

Question 47

Which of the following is NOT one of the five dimensions thought to characterize an employee's entrepreneurial mindset?

A) autonomy
B) reactivity
C) risk taking
D) innovativeness

Question 48

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 49

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 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 control 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

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 52

In the balanced scorecard framework, ____ controls are used to assess the organization's success in creating a climate that supports change and innovation.

A) learning and growth
B) financial
C) operational
D) innovational

Question 53

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 54

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 55

Human capital refers to

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-added that the firm's workforce contributes to each product produced or service rendered.
D) knowledge and skills of the firm's work force.

Question 56

The goal of investing in human capital is to

A) increase the number of employees in the firm.
B) reduce organizational slack.
C) maximize current productivity per employee.
D) develop a workforce capable of continuous learning.

Question 57

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

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 influences employee behavior and how the firm's conducts its business.

Question 58

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 for firms.

Question 59

The effective development and management of the firm's ____ may be its only sustainable competitive advantage.

A) capital base
B) human capital
C) technology
D) organizational culture

Question 60

____ capital increases cooperation among individuals inside and outside the firm.

A) Human
B) Social
C) Visionary
D) Cultural

Question 61

What is organizational culture? What must strategic leaders do to develop and sustain an effective organizational culture?

Question 62

What is strategic leadership, who has primary responsibility for strategic leadership, and what are the five key strategic leadership actions?

Question 63

As a strategic leader, what actions could you take to establish and emphasize ethical practices in your firm?

Question 64

What are organizational controls? Why are strategic controls and financial controls important aspects of the strategic management process?

Question 65

What is a top management team, and how does it affect a firm's performance and its abilities to innovate and design and implement effective strategic changes?