Question 1

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

Accepted Answer

False

Question 2

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

Accepted Answer

When a CEO also holds the title of Chairman of the Board, they have more control over the company's decisions because they lead both the management team and the board of directors. This can result in increased power for the CEO.

Question 3

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

Accepted Answer

External environmental factors such as industry structure, rate of market growth, and degree of product differentiation can greatly impact a manager's discretion and decision-making. These factors can influence the level of competition, customer demand, and market trends, which in turn can affect a manager's ability to make effective decisions for their organization.

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.

Accepted Answer

Heterogeneous top management teams bring diverse perspectives and experiences to the decision-making process, which can lead to better problem-solving and decision-making outcomes. They are more likely to think outside the box and consider unconventional solutions, which can support innovation and adaptation to changing market conditions. Homogeneous teams, on the other hand, may be more prone to groupthink and less likely to challenge the status quo.

Question 5

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

Accepted Answer

Research suggests that a diverse top management team, with different perspectives and backgrounds, may be more likely to generate new ideas and approaches to strategic change. Homogeneity can lead to groupthink and a lack of creativity.

Question 6

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

Accepted Answer

Top-level managers are responsible for developing and implementing the organizational structure and reward systems that support the firm's strategic initiatives. This is necessary to ensure that the company is able to achieve its goals in a sustainable and effective manner.

Question 7

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

Accepted Answer

The CEO, or Chief Executive Officer, is typically responsible for setting the strategic direction and overseeing the overall operations of an organization.

Question 8

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

Accepted Answer

Internal labor markets refer to the career opportunities and paths available to employees within a specific organization. This includes managers within the firm for which they currently work. Therefore, the statement is true.

Question 9

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

Accepted Answer

Research suggests that having a larger and more diverse top management team can lead to more conflict, communication challenges, and difficulties in decision-making, which can hinder effective strategy implementation. A smaller and more homogeneous top management team may be better positioned to align around a common vision and execute strategy with greater efficiency.

Question 10

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

Accepted Answer

Strategic leaders must effectively manage and develop their employees to achieve long-term goals and succeed in a competitive marketplace. A company's talent and culture can be key drivers of success, and it is the responsibility of strategic leaders to attract, retain, and develop talented individuals who can help the organization reach its potential.

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.

Accepted Answer

External environmental factors such as industry structure, rate of growth, and differentiation of products can influence the decision-making discretion of top-level managers.

Question 12

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

Accepted Answer

The answer of In order for the strategic leader to...

Question 13

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

Accepted Answer

The selection of an insider as a new CEO typically suggests a continuation of the current strategy and a focus on maintaining the status quo rather than encouraging 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.

Accepted Answer

A vice president is typically considered a part of 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.

Accepted Answer

A CEO with exceptional power often indicates a lack of checks and balances, which can occur if the board is composed of friends and insiders who are less likely to challenge the CEO's decisions.

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.

Accepted Answer

These are all factors that have been identified as potentially influencing managerial discretion.

Question 17

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

Accepted Answer

Various studies and reports suggest that the average tenure of CEOs has been declining in the past decade, with estimates ranging from 5 to 8 years on average.

Question 18

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

Accepted Answer

Strategic leadership involves all of these abilities, as it requires a leader to have a long-term vision, adapt to changes in the environment, and inspire and empower their team to achieve their goals.

Question 19

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

Accepted Answer

Board members with expertise in the firm's core functions and businesses provide valuable insights and guidance to the top management team, ultimately enhancing the effectiveness of the organization.

Question 20

Transformational leadership is the most effective strategic leadership style.

Accepted Answer

Transformational leadership emphasizes inspiring, empowering, and developing followers to reach their full potential and achieve organizational goals. It has been shown to be effective in improving job satisfaction, motivation, and performance of followers, leading to greater organizational success.

Quiz 12: Strategic Leadership