Question 1

Which of the following is a poor example of a resource?

Accepted Answer

D

Question 2

A firm's capabilities can:

Accepted Answer

D

Question 3

An activity system illustrates how the following items relate to and reinforce each other:

Accepted Answer

An activity system shows how product attributes and key resources are interconnected and support each other to create value and competitive advantage.

Question 4

Which of the following is not a necessary condition for the effective implementation of a pay for performance system?

Accepted Answer

The effectiveness of a pay for performance system does not necessarily require managers to receive a high bonus for the piece rate work of their employees. This condition is more about the incentive structure for managers rather than a necessary condition for the system's overall effectiveness. Conditions A, B, and C directly impact the system's fairness and motivation, which are crucial for its success.

Question 5

Two or more resources or activities are consistent when:

Accepted Answer

Consistency between resources or activities occurs when they align and work together towards the firm's overarching strategy, enhancing the effectiveness and efficiency of achieving strategic goals.

Question 6

Which of the following is not a characteristic of complementary resources?

Accepted Answer

Complementary resources are those that enhance each other's effectiveness and contribute to a firm's capabilities, but they do not necessarily dominate a firm's organizational structure. This dominance is not a characteristic of complementary resources, as they are meant to work in synergy rather than overshadow other aspects of an organization.

Question 7

Which of the following is not an organizational dimension of capability development?

Accepted Answer

Investor relations is not considered an organizational dimension of capability development. Organizational dimensions of capability development typically include aspects that directly affect how an organization operates and evolves its capabilities, such as organizational culture, control systems, and incentive systems. Investor relations, while important for securing funding and support, is more related to external communication and financial aspects rather than the internal development of organizational capabilities.

Question 8

Consistency among activities makes the most sense:

Accepted Answer

Consistency among activities is crucial when a firm is pursuing cost leadership or high value advantage because it ensures that all efforts are aligned towards the same strategic goal, either minimizing costs or maximizing value, thereby enhancing efficiency and effectiveness.

Question 9

Matrix structures are developed to deal with:

Accepted Answer

Matrix structures are designed to address the complexities of operating in multiple markets or dealing with various product lines, essentially handling competing forces regarding positioning in the market. They enable an organization to focus on more than one dimension simultaneously, such as product and geographic location, to effectively compete and respond to market demands.

Question 10

Which of the following is not a problem associated with incentive systems?

Accepted Answer

Customer retention is not typically considered a problem associated with incentive systems. Incentive systems are designed to motivate employees or teams, focusing on issues like ensuring the incentives align with company goals (alignment), managing how different parts of the organization depend on each other (interdependency), and ensuring that the outcomes tied to incentives are within the control of the individuals or teams (controllability). Customer retention is generally a broader business goal that might be indirectly influenced by an effective incentive system but is not a problem of the system itself.

Question 11

Value Chains and Activity Systems generate the same information.

Accepted Answer

Value Chains focus on the sequence of activities that a company performs to design, produce, sell, deliver, and support its product, emphasizing the transformation process from inputs to outputs. Activity Systems, on the other hand, map out how a company's activities interact and reinforce each other to create a competitive advantage, focusing on the interconnections and synergies between different activities rather than the sequence.

Question 12

The more consistent an organization's activities, the easier they are to change.

Accepted Answer

Consistency in an organization's activities often leads to established routines and resistance to change, as people become accustomed to existing processes and may resist alterations to the status quo.

Question 13

Managers typically resort to hierarchical referral first when they have a problem.

Accepted Answer

Managers often try to solve problems on their own or within their team before resorting to hierarchical referral, as escalating issues up the hierarchy can be seen as a failure to manage effectively.

Question 14

A functional organization is effective in reducing the firm's costs.

Accepted Answer

A functional organization groups employees based on their functions or roles, leading to operational efficiencies, specialization, and economies of scale, which can effectively reduce the firm's costs.

Question 15

Organizing by geography makes sense when the regions the firm competes in differ strategically.

Accepted Answer

Organizing by geography allows a firm to tailor its strategies and operations to the unique characteristics and demands of different regions, which is beneficial when those regions differ significantly in terms of market conditions, consumer preferences, legal environments, or competitive landscapes.

Question 16

Matrix structures are less expensive to manage than structures without dual reporting relationships.

Accepted Answer

Matrix structures often involve dual reporting relationships, which can lead to increased complexity and higher management costs compared to structures without such dualities.

Question 17

The internal consistency of firms with a superior value- or cost-based market position poses a strong barrier to imitation.

Accepted Answer

The internal consistency of firms with a superior value- or cost-based market position refers to how well-aligned their activities, resources, and capabilities are in supporting their strategic position. This alignment makes it difficult for competitors to imitate their strategy without also replicating the complex web of internal processes and decisions that support it, thus acting as a strong barrier to imitation.

Question 18

The ability to engage in both single and double loop learning is critical to effective strategy execution.

Accepted Answer

Single-loop learning involves making adjustments to strategies based on outcomes, while double-loop learning involves questioning and modifying the underlying assumptions and beliefs behind strategies. Both are critical for adapting and refining strategies to ensure effective execution.

Question 19

Learning from failure is less useful in the context of well-defined goals.

Accepted Answer

Learning from failure is useful in all contexts, including well-defined goals, as it provides insights into what does not work and how strategies can be adjusted for better outcomes.

Question 20

A firm's social network can strongly affect its coordination systems and culture.

Accepted Answer

A firm's social network, which includes the relationships and interactions within and outside the organization, can significantly influence how it coordinates activities and shapes its organizational culture by affecting communication, collaboration, and the dissemination of norms and values.

Quiz 4: Strategy Execution