Question 1

Brent Beshore,CEO of adventur.es,a private investment firm,walks around the office every day thanking people for their contributions.What purpose does this serve in terms of attaining behavioral control?

Accepted Answer

Rallies or pep talks by top executives also serve to reinforce the culture of a firm.Brent Beshore,CEO of adventur.es,a private investment firm,describes how he reinforces culture with personal contact.

Question 2

Continuous monitoring,in the contemporary approach,is beneficial because

Accepted Answer

In the contemporary approach,information control is part of an ongoing process of organizational learning that continuously updates and challenges the assumptions that underlie the strategy of the organization.The benefits of continuous monitoring include: time lags are dramatically shortened,changes in the competitive environment are detected earlier,and the ability of the organization to respond with speed and flexibility is enhanced.

Question 3

For businesses facing complex and turbulent business environments,which of the following is true?

Accepted Answer

Traditional control systems are most appropriate when the environment is stable and relatively simple,goals and objectives can be measured with a high level of certainty,and there is little need for complex measures of performance.

Question 4

As firms simultaneously downsize and face the need for increased coordination across organizational boundaries,a control system based primarily on ________ is dysfunctional.

Accepted Answer

As firms simultaneously downsize and face the need for increased coordination across organizational boundaries,a control system based primarily on rigid strategies,rules,and regulations is dysfunctional.In this context,rules that specify behaviors that are acceptable and unacceptable are known as boundaries and constraints.

Question 5

Top managers at ABC Company meet every Friday to review daily operational reports and year to date data.This is an example of

Accepted Answer

In the contemporary approach,information control is part of an ongoing process of organizational learning and must have several characteristics,including that the information is important enough to demand frequent and regular attention from all levels of the organization,and the data and information generated are best interpreted and discussed in face-to-face meetings.

Question 6

The traditional approach to strategic control is sequential.Which of the following is not one of the steps in the sequence?

Accepted Answer

The traditional approach to strategic control is sequential: (1)strategies are formulated and top management sets goals,(2)strategies are implemented,and (3)performance is measured against the predetermined goal set.

Question 7

Which of the following is not one of the characteristics of reward and incentive systems?

Accepted Answer

Reward and incentive systems represent a powerful means of influencing the culture of an organization,focusing efforts on high priority tasks,and motivating individual and collective task performance.Just as culture deals with influencing beliefs,behaviors,and attitudes of people within an organization,the reward system is an effective motivator and control mechanism by specifying who gets rewarded and why.

Question 8

Single-loop learning,according to Chris Argyris,is most appropriate when the environment is ________,goals and objective can be measured with a ________ of certainty,and there is ________ need for complex measures of performance.

Accepted Answer

Control is based on a feedback loop from performance measurement to strategy formulation.This process typically involves lengthy time lags,often tied to the company annual planning cycle.Such traditional control systems,termed single-loop learning by Chris Argyris of Harvard University,simply compare actual performance to a predetermined goal.They are most appropriate when the environment is stable and relatively simple,goals and objectives can be measured with a high level of certainty,and there is little need for complex measures of performance.

Question 9

Which of the following is not an example of how organizational culture exerts behavioral control?

Accepted Answer

Organizational culture is a system of shared values (what is important)and beliefs (how things work)that shape the people of a company,organizational structures,and control systems to produce behavioral norms (the way we do things around here).Culture sets implicit boundaries,unwritten standards of behavior,in dress,ethical matters,and the way an organization conducts its business.By creating a framework of shared values,culture encourages individual identification with the organization and its objectives.

Question 10

Tesco was forced to restate its earnings for the first half of 2014 to 431 million USD because senior managers in the U.K.food business had booked income early and delayed the booking of costs in order to improve appearances of financial performance.This scandal results from ________ and ________.

Accepted Answer

Strategic control is the process of monitoring and correcting the strategy and performance of a firm.Two central aspects of strategic control are informational control (the ability to respond effectively to environmental change)and behavioral control (the appropriate balance and alignment among the culture,rewards,and boundaries of a firm).In the case of Tesco,good governance is imperative.Shareholders and the board of directors must ensure that company management team members strive to fulfill their fiduciary duty of maximizing long-term shareholder value.As we just saw in the Tesco example,poor governance and control can lead to damaging scandals in firms.

Question 11

In the contemporary approach to strategic control,adapting to and anticipating both internal and external environmental change is an integral part.The relationships between ________,________,and ________ are highly interactive.

Accepted Answer

Adapting to and anticipating both internal and external environmental change is an integral part of strategic control.The relationships between strategy formulation,implementation,and control are highly interactive,as suggested by Exhibit 9.2.The exhibit also illustrates two different types of strategic control: informational control and behavioral control.

Question 12

Zappos and Amazon focus on customer service.What purpose does this serve in terms of attaining behavioral control?

Accepted Answer

Culture wears many different hats,each woven from the fabric of those values that sustain the primary source of competitive advantage for the organization.Zappos and Amazon focus on customer service to create a strong corporate culture.

Question 13

Ritz-Carlton hotels employees meet each day for 15 minutes to share stories about how they went the extra yard to meet customer needs.What is the intended outcome of these activities?

Accepted Answer

Stories can also help build a customer-centric culture.Inside the firm,the stories that employees share with each other become imprinted on the organizational mind.Thus,as employees share their positive stories of experiences with customers,they not only provide encouragement for other employees to better meet the needs of customers but also reinforce the storytelling employee desire to work hard to serve customers.For example,at Ritz-Carlton hotels,employees meet each day for 15 minutes to share stories about how they went the extra yard to meet customers' needs.These stories can even be more significant for new employees,helping them learn about the values of the firm.

Question 14

Informational control systems are concerned with which of the following questions?

Accepted Answer

In the contemporary approach,there are two different types of strategic control: informational control and behavioral control.Informational control is primarily concerned with whether or not the organization is doing the right things.

Question 15

Which of the following is not a key control lever of behavioral control?

Accepted Answer

Behavioral control is focused on implementation-doing things right.Effectively implementing strategy requires manipulating three key control levers: culture,rewards,and boundaries.

Question 16

Which of the following is not one of the characteristics of a contemporary control system?

Accepted Answer

Contemporary control systems must have four characteristics to be effective: focus on constantly changing information that has potential strategic importance;the information is important enough to demand frequent and regular attention from all levels of the organization;the data and information generated are best interpreted and discussed in face to face meetings;and the control system is a key catalyst for an ongoing debate about underlying data,assumptions,and action plans.

Question 17

Behavioral controls are aspects of strategic change that involve finding the appropriate ________ and ________ among the culture,rewards,and boundaries of the firm.

Accepted Answer

Strategic control is the process of monitoring and correcting the strategy and performance of a firm.Two central aspects of strategic control are informational control (the ability to respond effectively to environmental change)and behavioral control (the appropriate balance and alignment among the culture,rewards,and boundaries of a firm).

Question 18

Contemporary approaches to strategic control rely primarily on

Accepted Answer

In the contemporary approach,information control is part of an ongoing process of organizational learning that continuously updates and challenges the assumptions that underlie the strategy of the organization.In such double-loop learning,the assumptions,premises,goals,and strategies of the organization are continuously monitored,tested,and reviewed.

Question 19

Which of the following is the primary drawback of traditional strategic control systems?

Accepted Answer

Some question the value of rigid planning and goal-setting processes.Fixed strategic goals also become dysfunctional for firms competing in highly unpredictable competitive environments.Strategies need to change frequently and opportunistically.An inflexible commitment to predetermined goals and milestones can prevent the very adaptability that is required of a good strategy.

Question 20

Individual rationality ________ organizational rationality.

Accepted Answer

Generally speaking,people in organizations act rationally,each motivated by their personal best interest.However,the collective sum of individual behaviors of the employees of the organization does not always result in what is best for the organization;individual rationality is no guarantee of organizational rationality.

Quiz 9: Strategic Control and Corporate Governance