Deck 10: Building an Organization Capable of Good Strategy Execution

Question 1

Aimée, owner of The Discerning Equestrian, a local apparel, tack, and equipment outlet, is facing growing competition from online retailers such as Equestrian.com. She has sought your advice about the managerial task of executing strategy. What would you NOT be likely to advise her to do?

A)Be action-oriented, and make things happen.
B)Direct organizational change, achieve continuous improvement in operations and business processes, create and nurture a strategy-supportive culture, and consistently meet or beat performance targets.
C)Employ new techniques to overcome managerial resistance to change.
D)Direct a team effort which entails that every manager think through the answer to "What does my area have to do to implement its part of the strategic plan, and what should I do to get these things accomplished effectively and efficiently?"
E)Focus solely on your operations, management of people, and business processes.

Answer 1

C

Question 2

The three components of building a capable organization are

A)optimizing the number of core competencies and competitive capabilities, making sure that all managers and employees are empowered, and maximizing internal operating efficiency.
B)putting a centralized decision-making structure in place, determining who should have responsibility for each value chain activity, and aligning the corporate culture with key policies, procedures, and operating practices.
C)staffing the organization, building core competencies and competitive capabilities, and structuring the organization and work effort.
D)making periodic changes in the firm's internal organization to keep people from getting into a comfortable rut, instituting a decentralized approach to decision-making, and developing the appropriate competencies and capabilities.
E)hiring a capable top management team, empowering employees, and establishing a strategy-supportive corporate culture.

Answer 2

C

Question 3

Strategy execution

A)requires revamping the value chain in order to maximize operating efficiency.
B)depends on management's ability to direct organizational change.
C)involves selecting a capable management team.
D)consists of choosing among broad or narrow low-cost and differentiation strategies to compete against rivals.
E)requires deciding which core competencies and value chain activities to leave as is and which ones to overhaul and improve.

Answer 3

B

Question 4

Deloitte's successful execution of its talent management strategy does NOT involve

A)sponsorship to help rising leaders navigate the firm, develop new competencies, expand their network, and hone the skills needed to accelerate their careers.
B)formal training programs, including mandatory training hours for all of its employees to ensure that individuals continue to further their professional development.
C)punishment for missed deadlines, misdirected or wasteful efforts, and managerial ineptness.
D)special programs for high performers, such as its Global Fellows program and its Emerging Leaders Development Program.
E)a clear path to partnership that serves as a motivational tool for top performers, often leading to career acceleration.

Question 5

Building an organization capable of good strategy execution entails

A)investing heavily in employee training, using an empowered organization design and organization structure in order to maximize labor productivity, and employing effective incentive compensation systems.
B)staffing the organization, building core competencies and competitive capabilities, and structuring the organization and work effort.
C)empowering employees, maximizing internal operating efficiency, and optimizing core competencies.
D)decentralizing authority for performing strategy-critical value chain activities, establishing at least two distinctive competencies, and hiring talented employees.
E)centralizing authority in the hands of a chief strategy implementer so as to create the leadership authority for driving implementation forward at a rapid pace.

Question 6

What are the principal managerial components of the strategy execution process developed by Zara, the world's largest fashion retail chain?

A)producing and marketing high fashion clothing that retail for luxury prices
B)using periodic deep discounting to move unsold clothing inventory
C)tightly aligning design, production, advertising, and real estate with the overall strategy of fast fashion
D)meeting industry standards in how value chain activities are performed
E)spending no money on advertising, which is a hallmark of cost-effective strategy execution

Question 7

When strategies fail, it is often because of

A)poor execution of the strategy.
B)shortfalls exposed with the strategic management design process.
C)inadequate support for the management team responsible for the planning process.
D)secondary operating practices that hinder the required changes.
E)lack of sufficient information about operating systems.

Question 8

The approach to identifying the items needed to be placed on management's action agenda of the strategy execution plan always involves

A)generalized activities that will underscore the particulars of the company's situation.
B)some definitive managerial recipe for successful strategy execution that works for all company situations and all types of strategies, or that works for all types of managers.
C)a set of unimportant managerial tasks that must be covered no matter what the circumstances.
D)senior management's judgment about how to proceed in light of prevailing circumstances.
E)a high-end differentiation strategy for proficient implementation and execution.

Question 9

Implementing and executing strategy successfully requires

A)the same kinds of creative management talent and innovative thinking capabilities as crafting strategy.
B)a financially driven process aimed at squeezing the most profit out of conducting daily operations.
C)the efforts of a company's whole management team, not just a few senior managers.
D)a high caliber CEO that possesses the business vision, industry and competitive analysis skills, and entrepreneurial creativity needed to navigate the competitive landscape.
E)less managerial expertise and effort to perform well, at least in comparison with crafting a winning strategy.

Question 10

While outsourcing has allowed Apple to reap the benefits of lower cost and more flexible manufacturing, its lack of direct control has proven to be a challenge. How did Apple step in to improve working conditions at Foxconn, one of its major suppliers?

A)Apple paid for the installation of suicide prevention nets below Foxconn's factory windows
B)Apple discontinued its relationship with Foxconn in the best interests of Apple customers who were concerned over labor practices at the factories that manufacture the iPhone.
C)Apple tightened its supplier standards and increased its efforts at monitoring conditions and enforcing its standards, such as over 700 comprehensive site audits each year to ensure compliance
D)Apple used its immense sales volume and strong cash position and preferred treatment from suppliers as leverage to induce Foxconn to increase the salaries of the 1.3 million people on its payroll
E)Apple discontinued all outsourcing activities in Asia and transferred the manufacture and production of its products to low wage countries in Latin America.

Question 11

The most important leadership trait in the strategy execution process is

A)a strong, confident sense of what to do and how to do it.
B)strong communication skills (both written and verbal)covering motivating intent.
C)strong management skills to ensure a systematic approach to administration.
D)strong organizational skills so as to make actions structured toward results.
E)strong empathy skills when employees run into challenging moments.

Question 12

In formulating an action agenda to implement and execute a new or different strategy, the place for managers to begin is with

A)the task of revising and enhancing the company's core competencies.
B)choosing which leadership style to employ in trying to carry out the strategy successfully.
C)evaluating whether existing policies and procedures are adequately strategy-supportive.
D)allocating more resources to strategy-critical parts of the business.
E)a probing assessment of what the organization must do differently and better to carry out the strategy successfully.

Question 13

What makes the managerial task of executing strategy so challenging and demanding is the

A)trial-and-error experimentation that is required to come up with a workable organizational structure.
B)people-management skills required, the resistance to change that has to be overcome, and the perseverance necessary to get a variety of initiatives launched and kept moving along.
C)time and effort it takes to build core competencies.
D)time, training, and creative effort it takes to empower employees and teach them responsible decision-making.
E)supervisory requirements associated with getting company personnel to do things the right way.

Question 14

Once company managers have decided on a strategy, the emphasis turns to

A)building the core competencies and competitive capabilities needed to execute the strategy.
B)developing a detailed implementation plan that sets forth exactly what every department and every manager needs to do to proficiently execute the company's strategy.
C)establishing policies and procedures that instruct company personnel in the ways and means of executing the strategy.
D)converting the strategy into actions and good results.
E)empowering employees to revise and reorganize value chain activities to match the strategy.

Question 15

The two best signs of good strategy execution are whether

A)the company is challenging its current performance targets and whether value chain activities are fully integrated within the strategic response criteria.
B)managers are personally leading the change process and whether they are meeting deadlines set for budgetary requirements.
C)the company is meeting or beating its performance targets and whether it is performing value chain activities in a manner that is conducive to companywide operating excellence.
D)managers are fully behind the changes and whether the company's value chain managers are executing them diligently.
E)the company identifies what the organization must do and how to make the necessary internal changes.

Question 16

What does a good strategy execution require?

A)a team effort with all managers having strategy executing responsibility in their areas of authority, and making all employees active participants in the strategy execution process
B)incremental changes to current operating practices be implemented to ensure existing resource capabilities are not impacted too severely
C)little consensus building, despite the magnitude of the proposed changes, because employees know the benefits gained from the planning process
D)the strategy-critical value chain activities to be simplified so that all company personnel can be cognizant of the benefits of the execution parameters
E)additional investments in capital projects rather than adding to a company's talent base and building intellectual capital

Question 17

Imagine that you are about to become the manager of a local chain consisting of four upscale restaurants. To prepare for the position, you have been reviewing the 10 managerial tasks of successful strategy execution. What would NOT be among those tasks?

A)managing the people, talents, and business processes of an operations-driven restaurant chain.
B)directing organizational change and achieving continuous improvement in restaurant operations and business processes.
C)creating and nurturing a strategy-supportive culture across all restaurant locations.
D)developing and meeting, or exceeding performance targets consistently.
E)focusing on how market conditions impact your restaurant chain's resources and capabilities.

Question 18

Although ultimate responsibility for implementing and executing strategy falls upon the shoulders of senior executives,

A)top-level managers still have to rely on the active support and cooperation of middle and lower-level managers in pushing needed changes in functional areas and operating units.
B)the pivotal and most decisive strategy-implementing actions are carried out by frontline supervisors who have the day-to-day responsibility of seeing that key activities are done properly.
C)it is a company's employees who most determine whether the drive for good strategy execution will succeed or fail.
D)the success or failure of the implementation/execution effort hinges chiefly on doing an effective job of empowering employees to make day-to-day operating decisions that support good strategy execution.
E)the success or failure of the implementation/execution effort hinges chiefly on a company's reward system and whether its policies and procedures are strategy-supportive.

Question 19

Practices that the most successful companies like Alphabet, Boston Consulting Group, Edward Jones, Deloitte, Facebook, Genentech, Intuit, and Salesforce.com use to hire the best people they can find do NOT include

A)weeding out the 20 percent lowest-performing employees each year.
B)coaching average performers to improve their skills and capabilities.
C)striving to retain talented, high-performing employees via promotions, salary increases, and other perks.
D)rotating people through jobs that span functional and geographic boundaries.
E)careful screening and evaluation of job applicants.

Question 20

The managerial approach to implementing and executing a strategy should always

A)be customized to fit the particulars of a company's situation.
B)involve only minor changes to the existing strategy.
C)require radical strategy changes for successful execution.
D)rely on the active support of frontline employees.
E)focus on market conditions and the company's resources and capabilities.

Question 21

The most common building blocks for a company's organizational structure

A)usually consist of two divisions-a division charged with performing primary value chain activities and a division charged with performing support activities.
B)involve a functional or departmental structure that includes process, geographic, product, or customer groups performing one or more major processing steps along the value chain.
C)typically consist of an unempowered employee department, an empowered employee department, teams of front-line supervisors, teams of middle-level managers and administrators, and the group of top-level executives that comprise the company's "executive suite."
D)are almost always the departments performing such key administrative support functions as finance, accounting, information technology, human resource management, and R&D.
E)usually consist of supply chain management, components manufacture, assembly, distribution, and administration.

Question 22

Imagine that you are a senior executive of a large organization such as Starbucks that has geographically scattered operating units. What would NOT be on your agenda?

A)communicating the case for change
B)directing resources to the right places
C)building consensus for how to proceed
D)establishing deadlines and measures of progress
E)orchestrating the action steps and implementation sequence

Question 23

The implementation process is likely to be hampered by missed deadlines, misdirected efforts, and managerial ineptness if

A)a capable results-oriented management team is not in place.
B)the personnel have different management styles.
C)top managers start asking tough, incisive questions.
D)important details require attention.
E)an additional investment in capital projects is required.

Question 24

If management is to match a company's organization structure to its strategy in an effective way, then it is essential

A)for strategy-critical value-chain activities to be the main building blocks on the organization chart.
B)that value chain activities be deliberately organized so as to produce maximum strategic fit.
C)for the company to be organized around cross-functional teams rather than around functional specialties and functional departments.
D)to define the jobs of company personnel in terms of the functions to be performed rather than in terms of the results to be achieved.
E)that company personnel be empowered to make both strategic decisions and operating decisions.

Question 25

The three components of building a capable organization are

A)making periodic changes in the firm's internal organization to keep people from getting into a comfortable rut, instituting a decentralized approach to decision-making, and developing the appropriate competencies and capabilities.
B)hiring a capable top management team, empowering employees, and establishing a strategy-supportive corporate culture.
C)putting a centralized decision-making structure in place, determining who should have responsibility for each value chain activity, and aligning the corporate culture with key policies, procedures, and operating practices.
D)staffing the organization, acquiring, developing, and strengthening key resources and competitive capabilities, and structuring the organization and work effort.
E)optimizing the number of core competencies and competitive capabilities, making sure that all managers and employees are empowered, and maximizing internal operating efficiency.

Question 26

Management's handling of the strategy implementation/execution process can be considered successful

A)when the internal organization develops two or more core competencies in performing value chain activities.
B)if and when the company meets or beats its performance targets and shows good progress in achieving its strategic vision for the company.
C)if the company's culture is strong and strategy-supportive.
D)if management is able to marshal adequate resources to put the strategy in place within 6 to 12 months.
E)if managers and employees express strong support for the company's strategy and long-term direction.

Question 27

Implementing and executing a company's strategy

A)is primarily the job of the company's board of directors since they direct the actions and policies of the top senior executives in executing the strategy.
B)is a task for every manager and the whole management team, but ultimate responsibility for success or failure falls upon the top senior executives, especially the chief executive officer of the company.
C)is primarily a responsibility of all company personnel because all personnel are active participants in the strategy execution process and their actions have a huge impact on the ultimate outcome.
D)should be delegated to a chief strategy implementer appointed by the chief executive officer.
E)is primarily a task for middle and lower-level managers because it is they who have responsibility for pushing the needed changes all the way down to the lowest levels of the organization.

Question 28

Putting together a capable top management team with the right mix of experiences, skills, and abilities

A)should take top priority in building competitively valuable core competencies.
B)is particularly important when the firm is pursuing unrelated diversification or making a number of new acquisitions in related businesses.
C)is important in building an organization capable of proficient strategy execution, but is nearly always less crucial than doing a superior job of training and retraining employees.
D)entails filling key managerial slots with smart people who are clear thinkers, good at figuring out what needs to be done, and who are skilled in "making it happen" and delivering good results.
E)is particularly essential for executing a strategy to keep a company's costs lower than rivals and become the industry's low-cost leader.

Question 29

Recruiting and retaining capable employees is

A)usually much more important to good strategy execution than is assembling a capable top-management team.
B)important because the quality of an organization's people is always an essential ingredient of successful strategy execution.
C)more important during periods of rapid growth than during periods of crisis and attempted turnarounds.
D)an important organization-building element, particularly when it comes to transforming a competence into a core competence or distinctive competence.
E)easily the most critical aspect in building competitively valuable core competencies and capabilities.

Question 30

You are considering a career with Enterprise Holdings, parent of the Alamo, Enterprise, and National car rental companies. What facets of Enterprise's talent management strategy are NOT likely to be strategy-supportive?

A)staffing the organization with managers and employees capable of executing the strategy well and promoting from within.
B)creating an environment in which employees are made to feel that their views and suggestions count
C)employing people who have similar management styles, leadership approaches, business philosophies, and personalities.
D)providing people with opportunities to gain experience in a variety of international settings
E)making the work environment stimulating and engaging so that employees will consider the company a great place to work

Question 31

The primary activities involved in building an organization's strategy-supportive resources, capabilities, and organizational structure are NOT concerned with

A)putting together a strong management team.
B)developing a set of resources and capabilities suited to the current strategy and at the same time updating resources and capabilities as external conditions and the firm's strategy change.
C)instituting organizational arrangements that facilitate good strategy execution; establishing lines of authority and reporting relationships; deciding how much decision-making authority to delegate.
D)overseeing all strategic activities including: related and unrelated diversification, internal business development, joint ventures and alliances, mergers and acquisitions, modes of entry into international markets, ethics training and sustainability programs, and relationships with key stakeholders.
E)training and retaining company personnel to maintain knowledge-based and skills-based capabilities.

Question 32

The process of recruiting and retaining capable employees is

A)more important during periods of rapid growth than during periods of crisis and attempted turnarounds.
B)always an essential ingredient of successful strategy execution.
C)an essential element of developing a distinctive competence.
D)closely tied to developing strong information capital capabilities.
E)more important than having a good situational fit between the company's strategy and its external environment.

Question 33

Companies that depend upon and highly value the contribution of intellectual capital to good strategy execution, generally do NOT

A)provide their employees with challenging, interesting, and skill-stretching assignments and also rotating them through jobs that not only have great content but also span functional and geographic boundaries.
B)implement rewards and benefits programs such as promotions, salary increases, performance bonuses, stock options, and other perks.
C)invest time and money into coaching underperformers and benchwarmers to improve their skills and capabilities.
D)encourage their employees to challenge existing ways of doing things, to be creative and innovative in proposing better ways of operating, and to push their ideas for new products or businesses.
E)foster a stimulating and engaging work environment so that their employees will consider the company a great place to work.

Question 34

Recruiting and retaining capable employees does NOT entail

A)the quality of an organization's people, which is always an essential ingredient if critical value chain activities are to be performed competently.
B)recruiting and retaining capable employees, which is a particularly important organization-building task in enterprises where superior intellectual capital is a key resource and also a basis for competitive advantage.
C)recruiting and retaining capable employees, which is usually much more important to good strategy execution and the achievement of true operating excellence than is assembling a capable top management team.
D)a large band of capable employees who are actively engaged in the process of making ongoing operating improvements.
E)adding to a company's talent base and building intellectual capital while foregoing investments in plants, equipment, and capital projects.

Question 35

Because of the many managerial tasks involved and the role of leadership in strategy execution, when implementing a strategy

A)it is critical to ensure that all anticipated strategy-supportive resources and capabilities are already in place.
B)assembling a strong management team is especially important.
C)changing market conditions are likely to throw the entire strategy execution efforts off track.
D)strengthening the firm's core competencies is the number one priority.
E)an effectively structured organization can lead to higher bureaucratic costs.

Question 36

The overriding aim in building a management team should be to

A)ensure oversight of every step of the value chain.
B)assemble a critical mass of talented managers who can function as agents of change, work well together as a team, and produce organizational results that are dramatically better than what one or two star managers acting individually can achieve.
C)choose managers experienced in gathering competitive intelligence.
D)select people who have similar management styles, leadership approaches, business philosophies, and personalities.
E)choose managers who are competent in executing a strategy to keep a company's costs lower than rivals and become the industry's low-cost leader.

Question 37

Steps to update a company's capabilities to match changing market conditions and customer expectations take place often include

A)staffing the organization.
B)recruiting and retaining talented employees.
C)acquiring, developing, and strengthening key resources and capabilities.
D)organizing value chain activities and business processes.
E)structuring the organization and work effort.

Question 38

An initial step that companies typically take in launching the strategy execution process is often to

A)ensure all requirements of the value chain are fulfilled.
B)form a mission statement as a basis for managers to achieve organizational objectives.
C)go on the offensive by employing moves to make its product offering more distinctive and appealing to buyers.
D)put together a talented management team with the right mix of experiences, skills, and abilities to get things done.
E)strive to be more profitable than rivals and aim for a competitive edge based on bigger profit margins.

Question 39

Facebook has hired you to manage its launch team for its new dating app. What would be the highest priority on your list of activities to ensure a successful launch and implementation of this new app?

A)staffing the organization, acquiring, developing, and strengthening key resources and competitive capabilities, and structuring the organization and work effort.
B)decentralizing authority for performing strategy-critical value chain activities, establishing at least two distinctive competencies, and hiring talented employees.
C)investing heavily in employee training, using an empowered organization design and organization structure in order to maximize labor productivity, and employing effective incentive compensation systems.
D)centralizing authority in the hands of a chief strategy implementer so as to create the leadership authority for driving implementation forward at a rapid pace.
E)empowering employees, maximizing internal operating efficiency, and optimizing core competencies.

Question 40

Glassdoor is a California-based social media company that provides a space for employees and former employees to anonymously review companies and their management. You have recently had a job offer to relocate and work for Glassdoor. Based on what you have learned about strategy-supportive talent management practices, what might be a good reason NOT to accept Glassdoor's offer?

A)Glassdoor provides careful screening and evaluation of job applicants, along with continuous training and retraining programs for employees that continue throughout their careers
B)Glassdoor has a policy of rotating people through jobs that not only have great content but also span functional and geographic boundaries
C)Glassdoor has a track record of eliminating the bottom 10 percent of the lowest-performing employees each year to increase the overall quality performance metrics to above-average industry standards
D)Glassdoor has developed a culture in which it encourages employees to challenge existing ways of doing things, to be creative and innovative in proposing better ways of operating, and to push their ideas for new products or businesses
E)Glassdoor is dedicated to fostering a stimulating and engaging work environment such that employees will consider the company a great place to work

Question 41

What is the advantage of acquiring capabilities through merger and acquisition?

A)Speed, because developing new capabilities internally can take many years of effort.
B)Empowerment, because you can capture the essence of the capability and refocus the firm.
C)Price, because it is always cheaper to buy a whole company and pull out the capabilities individually.
D)Assets, because they are the basis of the sale.
E)Investment, because resources and capabilities are considerable stronger.

Question 42

Managerial actions to develop core competencies and competitive capabilities internally generally take one of two forms. What are they?

A)either strengthening the company's base of skills, knowledge, and experience or coordinating and integrating the efforts of various work groups and departments
B)either putting in high incentive bonuses to reward individual employees who train hard to develop the desired capability or launching an extensive training effort to develop the capability quickly with newly hired employees
C)either using benchmarking and the adoption of best practices to imitate a capability that rivals have already developed or empowering a team of employees to develop the capability however they best see fit
D)either using developed dynamic capabilities or acquiring the capability from outside sources
E)either by enforcing close cross-business collaboration or by centralizing the performance of functions requiring close coordination at the corporate level

Question 43

Imagine you have been asked to present a strategy implementation plan to the top management of Didrickson, a Swedish multidomestic manufacturer and marketer of outdoor activewear. Your presentation would NOT likely include which implementation option as a means of building and strengthening its competitively valuable resources and capabilities?

A)Didrickson needs to engage in experience-building activities such as collaborative efforts in R&D engineering and design
B)Didrickson needs to shift from decentralized to centralized decision-making so as to give senior executives more authority and control in driving cultural change
C)Didrickson needs to acquire capabilities through mergers and acquisitions
D)Didrickson needs to enter into collaborative partnerships with suppliers, competitors, or other companies that possess needed expertise.
E)Didrickson needs to select and assemble a team of people with the requisite skills and experience, upgrading or expanding individual abilities as needed, and then molding the efforts of individuals into a collaborative effort to create an organizational ability.

Question 44

The capability building process entails

A)developing the ability to do something, however imperfectly or inefficiently, and molding these efforts into an organizational ability, and as experience grows and personnel perform the activity consistently well and at an acceptable cost, it is transformed into a tried-and-true competence and as they continue to polish and refine their know-how into further improvements, they then create a real competitive capability.
B)deciding which value chain activities to perform internally and which ones to outsource; and deciding how much authority to centralize at the top and how much to delegate to down-the-line managers and employees.
C)creating the needed capability internally when industry conditions, technology, or competitors are moving at such a rapid clip that time is of the essence.
D)a wait-and-see attitude, because companies often implement strategy inefficiently or imperfectly.
E)appropriate coordinating mechanisms, and those networking and communications arrangements considered necessary to support effective execution of the firm's strategy.

Question 45

Sometimes a company can short-circuit the task of building an organizational capability in-house by

A)putting in high-incentive bonuses to reward individual employees who train hard to develop the desired capability.
B)launching an extensive training effort to develop the capability quickly with newly hired employees.
C)either acquiring a company that has already developed the capability or else acquiring the desired capability through collaborative efforts with outsiders having the requisite skills, know-how, and expertise.
D)using benchmarking and the adoption of best practices to imitate a capability that rivals have already developed.
E)empowering a team of employees to develop the capability however they best see fit.

Question 46

Good strategy execution requires which of the following?

A)putting those resources and capabilities into place, strengthening them as needed, and then modifying them as market conditions evolve
B)a universal business model to raise profits and lower costs
C)strengthening the competitive environment arena outside the company's operating territory
D)a planned budget to protect the company's financial condition and eliminate wasteful use of cash
E)passive pressures stemming from the dominance of outside market buyers

Question 47

What is NOT part of the process of upgrading core competencies and competitive capabilities?

A)Core competencies can be leveraged into competitive advantage by concentrating sufficient effort and talent on deepening and strengthening them so that the firm achieves dominating depth and gains the capability to outperform rivals by a meaningful margin.
B)Core competencies have to be tweaked and adjusted to keep them fresh and responsive to changing customer needs and market conditions.
C)Core competencies typically are lodged in the combined efforts of different work groups and departments.
D)Core competencies generally grow out of company efforts to master a strategy-critical technology or to invent and patent a valuable technology.
E)Core competencies tend to emerge gradually rather than blossom quickly.

Question 48

Core competencies and competitive capabilities are usually

A)lodged in the narrow skills and specialized work efforts of a single department, as opposed to the combined expertise and capabilities of specialists scattered across several departments.
B)observed to stem from collaborative efforts with strategic allies.
C)bundles of skills and know-how that most often grow out of the collaborative efforts of cross-functional work groups and departments performing complementary activities at different locations in a firm's value chain.
D)found to result in competitive advantage when they involve highly specific technologies and are grounded in a company's own deep technical expertise.
E)built rapidly, usually in conjunction with important product innovations.

Question 49

Firms generally leverage the expertise of their talent pool in building capabilities by

A)updating existing capabilities.
B)establishing a new arsenal of resource capabilities by phasing out existing capabilities.
C)refreshing existing capabilities.
D)augmenting or recombining well-established capabilities with existing resources.
E)building resource capabilities from scratch so it is easy and less time-consuming.

Question 50

Which of the following statements is NOT accurate with respect to building a company's competencies and capabilities?

A)Building new competencies and capabilities is a multistage process that occurs over a period of months and years.
B)Core competencies have to be tweaked and adjusted to keep them fresh and responsive to changing customer needs and market conditions.
C)As experience grows and company personnel learn how to perform the activities consistently well and at an acceptable cost, the ability evolves into a tried-and-true competence.
D)It is generally much easier and less time-consuming to update and remodel a company's existing capabilities as external conditions and company strategy change than it is to create them from scratch.
E)When a company succeeds in hiring talented employees and training them properly, competencies and capabilities tend to develop quickly and, once put in place, can last for a decade or more.

Question 51

The most common approaches to capability building include all of the following, EXCEPT

A)developing capabilities internally.
B)acquiring capabilities through mergers and acquisitions.
C)accessing capabilities via collaborative partnerships.
D)renewing capabilities to align with customer expectations.
E)divesting underperforming units.

Question 52

Accessing capabilities through an external source can be accomplished through all of these EXCEPT

A)outsourcing, but depends on what can safely be delegated to outside suppliers.
B)joint ventures, which depend on how well the partners will work together.
C)strategic alliances, which should be selected as much for management style, culture, and goals as for their resources and capabilities.
D)learning-based collaborative partnerships for the purpose of learning how the partner does things, internalizing its methods, and thereby acquiring its capabilities.
E)promoting qualified people with the right know-how in a timely and cost-effective manner.

Question 53

Who is most likely to have strong strategy implementation capabilities?

A)Valery typically probes with tough, incisive questions.
B)Greg is often sympathetic to his team members' problems and shortcomings.
C)Maria can complete a job in half the time as her colleagues.
D)Jorge prefers to launch, manage, and complete projects by himself.
E)Chong advocates promoting qualified people from within the firm.

Question 54

Training and retraining of employees likely to make the LEAST important contribution to good strategy execution is

A)when a company shifts to a strategy requiring different skills, competitive capabilities, managerial approaches, and operating methods.
B)when an organization is striving to build skills-based competencies.
C)when technical know-how is changing so rapidly that a company loses its ability to compete unless its skilled people have cutting-edge knowledge and expertise.
D)when the chosen strategy calls for a deeper technological capability or building and using new capabilities.
E)when the strategy execution effort is based on tried-and-true operating practices that vary little from year to year.

Question 55

When are capabilities-motivated acquisitions essential?

A)when industry conditions, like technology advances, are central to growth and rivalry is intense
B)when first-mover advantages for products or services can be added to the portfolio lineup
C)when the acquired firm can be purchased at a discount due to underperformance
D)when a market opportunity can slip by faster than a needed capability can be created internally
E)when the capabilities involve tacit knowledge and complex routines

Question 56

The traits of the capability-building process involve all of the following EXCEPT

A)evolving changes in customer needs and competitive conditions that often require tweaking and adjusting a company's portfolio of competencies and intellectual capital to keep its capabilities freshly honed and on the cutting edge.
B)a core competence or capability that emerges incrementally out of company efforts either to bolster skills that contributed to earlier successes or to respond to customer problems, new technological and market opportunities, and the competitive maneuverings of rivals.
C)core competencies or capabilities that are most often bundles of skills and know-how that grow out of the combined efforts of cross-functional work groups and departments performing complementary activities at different locations in a firm's value chain.
D)the key to leveraging a core competence into a distinctive competence (or transforming a capability into a competitively superior capability), which concerns concentrating more effort and talent than rivals on deepening and strengthening a competence or capability so as to achieve the dominance needed for competitive advantage.
E)saving time by creating capabilities from scratch to remain aligned with external conditions and company strategy rather than updating and remodeling existing capabilities.

Question 57

A dynamic capability is the

A)ongoing capacity to modify existing resources and capabilities to create new ones.
B)improvement evaluation process for eliminating waste in the firm.
C)functional and operating resources management process.
D)ongoing capability to understand and establish a rival commitment to resource alignment.
E)most compelling product or service in a firm.

Question 58

The strategic importance of deliberately trying to develop organizational competencies and capabilities is

A)lower costs for employee training.
B)improved strategy execution and a potential for competitive advantage.
C)an increased ability to reduce total operating costs.
D)the added ease with which strategic fit and resource fit benefits can be captured.
E)the enhanced ability to avoid the perils of outsourcing.

Question 59

It is ideal for key management slots to be filled from outside

A)in turnaround and rapid-growth situations.
B)when problems with the old strategy are obvious.
C)in a worst-case scenario.
D)when the managerial whole is greater than the sum of individual efforts.
E)in a centralized structure.

Question 60

The capabilities and core competencies that Zara has developed in the execution of its strategy, i.e. rapid production processes and new apparel introductions, are NOT concerned with

A)bundles of skills and know-how that grew out of the combined efforts of Zara's cross-functional work groups and departments performing complementary activities at different locations in a firm's value chain.
B)evolving changes in customer needs and competitive conditions that often required tweaking and adjusting Zara's portfolio of competencies and intellectual capital to keep its capabilities freshly honed and on the cutting edge.
C)acts to bolster skills that contributed to Zara's earlier successes, or acts to respond to customer problems, new technological or market opportunities, and the competitive maneuvers of rivals.
D)cost-effectively hiring a cadre of people with the right talent and expertise, putting them together in a single work group, and then teaming the work group with Zara's key strategic allies/partners to mesh the skills, expertise, and competencies needed to perform the desired capabilities with some proficiency.
E)leveraging Zara's core competence into a distinctive competence (or transforming a capability into a competitively superior capability), by concentrating more effort and talent than rivals on deepening and strengthening the competence or capability so as to achieve the dominance needed for competitive advantage.

Question 61

Superior strategy execution capabilities are

A)easy for rivals to copy.
B)socially simple.
C)develop quickly.
D)easy to achieve.
E)hard to imitate.

Question 62

Companies are UNLIKELY to use outsourcing to improve performance of strategy-critical activities when they are engaged in

A)improving a company's chances for outclassing rivals in the performance of strategy-critical activities and turning a core competence into a distinctive competence.
B)promoting quick establishment of a total quality culture.
C)speeding internal decision-making and shortening the time it takes to respond to changing market conditions.
D)capitalizing on the partnerships with outsiders to enhance its arsenal of capabilities and thus contribute to better strategy execution.
E)helping decrease internal bureaucracies and flatten the organizational structure.

Question 63

Organizing the work effort in ways that promote successful strategy execution is NOT likely to include

A)facilitating collaboration with external partners and strategic allies
B)providing for cross-unit coordination and deciding which value chain activities to perform in-house and which ones to outsource
C)determining how much authority to centralize at the top and how much to delegate to down-the-line managers and employees
D)determining which functions and organizational units require superior intellectual capital
E)maintaining expertise and resource depth in performing those internally strategy-critical value chain activities that underpin its long-term competitive success and provide for the main building blocks in the organization structure

Question 64

Critics of companies that use outsourcing contend that shifting responsibility for performing value chain activities to outside specialists

A)has the disadvantage of raising fixed costs and reducing variable costs and makes it harder to develop distinctive competencies.
B)can hollow out a company's knowledge base and capabilities, leaving it at the mercy of outside suppliers, and short of the resource strengths to be a master of its own destiny.
C)results in less organizational flexibility and leads to sometimes exorbitant costs in collaborating with outside suppliers and strategic partners.
D)slows down decision-making on key strategic issues because outside suppliers have to be consulted first.
E)lowers the morale of company employees, dampens a company's ability to implement best practices, and results in greater bureaucracy and slower decision-making.

Question 65

In order to coordinate and control the complex set of activities, managers must ensure

A)the organizational structure enables bureaucratic waste and strives for eliminating imposed capacity limitations of the strategy.
B)the various parts of the organizational structure are aligned with one another and also matched to the requirements of the strategy.
C)they have enough employees dedicated to the various functions to attain economies of scale benefits.
D)they can orchestrate the process with forceful administration and political maneuvering.
E)they accommodate situational idiosyncrasies to build a competitively capable organization.

Question 66

If management is to match a company's organization structure to its strategy in an effective way, then it is essential

A)that company personnel be empowered to make both strategic decisions and operating decisions.
B)for strategy-critical value chain activities to be the main building blocks on the organization chart.
C)that value chain activities be deliberately organized so as to produce maximum strategic fit.
D)to define the jobs of company personnel in terms of the functions to be performed rather than in terms of the results to be achieved.
E)for the company to be organized around cross-functional teams rather than around functional specialties and functional departments.

Question 67

A firm's organizational structure is comprised of

A)resource strengths and competitive capabilities that allow it to incorporate attributes at lower costs than rivals whose products have similar attributes.
B)the formal and informal arrangement of tasks, responsibilities, lines of authority, and reporting relationships by which the firm is administered.
C)superior marketing and sales skills to convince buyers to pay a premium price for the attributes/features incorporated in its product.
D)sustainable distinctive competencies to ensure cost reduction and competitiveness.
E)a number of independent functional units involved in some common undertaking, with one unit typically in a more central role.

Question 68

Primary building blocks in a company's organizational structure do NOT include

A)functional departments
B)process and operations departments
C)empowered employee departments
D)divisional units performing major processing steps
E)geographic organizational units

Question 69

A multidivisional structure consists of a

A)centralized structure combining corporate overhead with support functions.
B)decentralized structure with of a set of operating divisions organized along business, product, customer groups or geographic lines, and a central corporate headquarters that allocates resources, provides support functions, and monitors divisional activities.
C)decentralized structure or divisional structure that monitors performance and allocates funding to those divisions wanting to grow.
D)decentralized format of senior executives with large overhead staff to manage and control all the business lines.
E)centralized structure that controls the coordination across the more diversified and complex functions within the organization.

Question 70

Organizing a company's work effort to promote successful strategy execution involves

A)deciding how much to spend on training managers and employees.
B)deciding which value chain activities to perform in-house and which to outsource, and making internally performed strategy-critical value chain activities the main building blocks in the organization structure.
C)choosing an organization structure that is a tight fit with the corporate culture.
D)hiring an inexpensive yet capable management team.
E)instituting a compensation structure that reduces employee turnover and thus stabilizes the makeup of work teams.

Question 71

A simple organizational structure is also known as a ________ structure.

A)line-and-staff
B)functional
C)matrix
D)multidivisional
E)three-dimensional

Question 72

How is a functional structure or unitary structure organized?

A)with a central executive handling all major decisions
B)to lighten the load of senior executives so they can concentrate on value chain action agendas
C)specifically to manage unrelated diversification opportunities
D)into functional departments, with departmental managers who report to the CEO and small corporate staff
E)with top-heavy management, and senior executives forming a central office of the chairman

Question 73

Companies engaged in a single line of business most commonly utilize an organizational structure that can be

A)either independent, consolidated, or hybrid profit centers.
B)a functional (departmental)organizational structure.
C)either centralized, principal, or critical-path in nature.
D)highly decentralized matrices.
E)hybrid functional organizations with a combination of decentralized and centralized decision-making.

Question 74

What is the rule for organizing the work effort to support good strategy execution?

A)Match the firm's organizational structure to its unique strategy.
B)Decide how much to spend on training managers and employees.
C)Choose an organization structure that is a tight fit with the corporate culture.
D)Ensure the firm hires a capable management team.
E)Learn how the collaborative partner does things.

Question 75

Among the known structural forms of organization, which is non-existent?

A)a functional structure where function is a major step in the firm's value chain
B)a simple structure where all major decisions and oversight are a duty of the central executive
C)a multidivisional structure where each division of the firm is an independent profit center
D)a matrix structure where there are two or more divisions organized to enhance cross-communication
E)a network structure where independent organizations are involved in a common undertaking

Question 76

What is NOT a rationale for a company to pursue outsourcing as a strategy execution step in order to enhance the performance of value chain activities?

A)Outsourcing support services often has the disadvantage of raising fixed and variable costs.
B)Outsourcing critics contend that shifting responsibility for performing value chain activities to outside specialists can hollow out a company's knowledge base and capabilities, leaving it at the mercy of outside suppliers, and short of the resource strengths to be a master of its own destiny.
C)Outsourcing the performance of certain value chain activities to able suppliers can add to a company's arsenal of capabilities and contribute to better strategy execution.
D)The real debate surrounding outsourcing is not about whether too much outsourcing risks loss of control but about how to use outsourcing in a manner that produces greater competitiveness.
E)Outsourcing can enable a company to heighten its strategic focus and concentrate its full energies and resources on even more competently performing those value chain activities that are at the core of its strategy and for which it can create unique value.

Question 77

When a company uses outsourcing to zero in on even better performance of those truly strategy-critical activities where its expertise is most needed, then it may also be able to

A)create a values-based corporate culture that excels in product innovation.
B)decrease internal bureaucracies, flatten its organizational structure, and shorten the time it takes to respond to changing market conditions.
C)devote more resources to its social responsibility strategy, better empower employees, and reduce employee turnover.
D)better police compliance with ethical standards, lower overall operating costs, and create two or more distinctive competencies.
E)reduce the potential for information overload and improve the quality of decision-making in each domain.

Question 78

When it is difficult or impossible to out-strategize rivals (beat them with a superior strategy), the other main avenue to competitive advantage is to

A)do a better job of empowering employees and flattening the organization structure.
B)outcompete rivals with a stronger corporate culture.
C)out-execute them (beat them by performing certain value chain activities in superior fashion).
D)beat them with a healthy corporate culture based on such core values as high ethical standards, a strong sense of corporate social responsibility, and genuine concern for customer well-being.
E)institute a more motivating and cost-efficient compensation and reward system.

Question 79

The rationale for making strategy-critical value chain activities the primary building blocks in a company's organizational scheme is based on the

A)much shorter time it takes to build core competencies and competitive capabilities.
B)benefit such an organizational scheme has in reducing costs.
C)benefit such an organizational scheme has in improving the productivity of geographically scattered organizational units.
D)thesis that if activities crucial to strategic success are to have the resources, decision-making influence, and organizational impact, they have to be centerpieces in the organizational scheme.
E)benefit such an organizational scheme has in making the empowerment of employees more effective.

Question 80

Outsourcing value chain activities has such strategy executing advantages as

A)shrinking internal bureaucracies, decreasing delays in decision-making, and accelerating responses to changing market conditions.
B)facilitating the empowerment of employees (because there are fewer things to do internally).
C)promoting a total quality management culture.
D)reducing the need to establish a strongly implanted corporate culture.
E)reducing the strategic importance of building valuable core competencies.