Question 1

Providing top-down guidance can aid the task of implementing strategy
A)provided it promotes greater use of and commitment to best practices and total quality management.
B)because really effective internal policies and procedures are not easily duplicated by other firms.
C)because astutely conceived policies or procedures can result in competitive advantage.
D)by helping align the actions and behavior of company personnel with the requirements for good strategy execution, placing limits on independent action, and helping overcome resistance to change.
E)by making it easier to impose tight budget controls and avoid wasting scarce resources.

Accepted Answer

Providing top-down guidance can aid the task of implementing strategy by helping align the actions and behavior of company personnel with the requirements for good strategy execution, placing limits on independent action, and helping overcome resistance to change. This ensures that everyone is working towards the same goals and objectives, and prevents individuals from going off course.

Question 2

What is a good example of how NOT to facilitate strategy execution?
A)Kia's service centers follow similar routines when receiving vehicles for servicing.
B)Ford encourages its staff to refrain from engaging in practices out of sync with the company's mission.
C)Honda's personnel follow a 227 page manual to ensure that its showrooms have similar operating practices across regions.
D)Chevrolet's electric vehicle service center personnel receive the same specialized training and replicate the caliber of customer service across locations.
E)Tesla resists standardization of the way activities are performed at its service centers because its personnel have primarily been poached from BMW, Chevrolet, and VW's electric vehicle divisions.

Accepted Answer

Tesla's resistance to standardization, despite having personnel from diverse backgrounds, is a poor strategy for execution. Standardization helps in ensuring consistency and efficiency across operations, which is crucial for scaling and maintaining quality.

Question 3

A useful guideline in designing strategy-facilitating policies and operating procedures is
A)to prescribe enough policies to give organizational members clear direction in implementing strategy and to place reasonable boundaries on their actions. This then empowers them to act within these boundaries in pursuit of company goals.
B)that strictly enforced policies work better than loosely enforced policies.
C)that more policies/procedures work better than fewer policies/procedures, and that strict enforcement always beats lax enforcement.
D)to let individuals act in an empowered and self-directed way, subject only to the constraint that their actions and behavior be ethical and in step with the corporate culture.
E)to prescribe enough policies and procedures that little is left to chance in performing value chain activities, and employees should have no leeway to do things in a manner that deviates from the company's best-practices standard.

Accepted Answer

Prescribing enough policies to provide clear direction while allowing reasonable flexibility empowers organizational members to pursue company goals effectively.

Question 4

A "best practice" refers to a
A)policy or procedure that is unusually effective.
B)method of performing an activity or business process that consistently delivers superior results compared to other approaches and that at least one company has demonstrated works particularly well in terms of delivering operating excellence.
C)strategy-critical activity that results in sustainable competitive advantage.
D)value chain activity that is a company's distinctive competence.
E)particular value chain activity that management has given top priority to performing in world-class fashion.

Accepted Answer

A best practice is a method of performing an activity or business process that consistently delivers superior results compared to other approaches and that at least one company has demonstrated works particularly well in terms of delivering operating excellence. It is not just a policy or procedure that is effective, but a tried and tested approach that has been proven to be the best way of achieving a desired outcome.

Question 5

New strategies often entail budget reallocations because
A)revamping the performance of value chain activities can be costly.
B)the accompanying policy revisions and compensation incentives tend to require different levels of funding than before.
C)business units important in the prior strategy but having a lesser role in the new strategy may need downsizing, while units and activities that now have a bigger and more critical strategic role may need more people, new equipment, additional facilities, and above-average increases in their operating budgets.
D)empowering employees to carry out the new strategy elements and shifting to a total quality management type of culture to build skills in competent strategy execution typically require substantial new funding and budget revisions.
E)adopting best practices and pushing for continuous improvement tends to reduce costs and reduce overall resource requirements.

Accepted Answer

New strategies often require reallocation of budgets because some business units may need to be downsized while others need more resources to fulfill their new roles. This means that budget priorities need to be reevaluated and adjusted accordingly. Revamping value chain activities, policy revisions, compensation incentives, and empowering employees might require additional funding, but it's not always the case. In some cases, adopting best practices and continuous improvement can even reduce costs and overall resource requirements. Therefore, options A, B, D, and E are not the best choices as they don't fully capture the need for budget reallocation that arises from strategic changes.

Question 6

Visible actions to reallocate operating funds and move people into different and new organizational units
A)can be dysfunctional in trying to implement a new strategy because of the anxiety and insecurity that big changes in budgets cause among company personnel.
B)signal a determined commitment to strategic change and can help catalyze and give credibility to the implementation process.
C)run the risk of inadvertently creating barriers to building the needed competencies and capabilities.
D)tend to impede the task of empowering employees and shifting to a new, more strategy-supportive culture.
E)are rarely necessary in implementing a new strategy unless the new strategy entails a radically different set of value chain activities.

Accepted Answer

Visible actions to reallocate operating funds and move people into different and new organizational units can signal a determined commitment to strategic change and can help catalyze and give credibility to the implementation process. While there may be anxiety and insecurity among company personnel, taking visible actions can help overcome resistance to change and encourage employees to embrace the new strategy. However, there is a risk of inadvertently creating barriers to building the needed competencies and capabilities or impeding the task of empowering employees, so careful planning and communication are necessary. It is not necessarily true that visible actions are rarely necessary unless the new strategy entails a radical shift in value chain activities.

Question 7

Merely fine-tuning the execution of a company's existing strategy normally requires
A)big shifts of resources from one area to another.
B)a larger allocation of resources to the effort.
C)trimming costs and shifting resources to activities that have a higher priority.
D)creativity in finding ways for cost reductions, i.e. ways to do less with less.
E)cost-cutting in key value chain activities.

Accepted Answer

Merely fine-tuning the execution of a company's existing strategy does not necessarily require big shifts of resources or a larger allocation of resources. Instead, it may require trimming costs and shifting resources to activities that have a higher priority, which means reallocating existing resources rather than adding new ones. This approach can help the company focus on its core activities and improve performance without significantly increasing costs.

Question 8

A company's operating budget must
A)be strategy-driven in order to amply fund the performance of key value chain activities.
B)be risk-averse, so as not to run the risk of inadvertently creating barriers to building the needed competencies and capabilities.
C)be employee-driven to gain commitment to strengthening the company's core competencies and competitive capabilities.
D)trim costs of key value chain activities to achieve cost efficiency in new strategic initiatives.
E)follow traditional and time-tested methods of budgeting to support rapid adjustments in strategy.

Accepted Answer

The operating budget should be strategy-driven in order to ensure sufficient funds are allocated towards key value chain activities that support the company's overall strategy and competitive advantage.

Question 9

Good strategy execution can involve policies and procedures manuals in order to maintain consistency in product quality and service behavior patterns to allow for
A)activities that need to be strictly prescribed and activities to allow room for independent action on the part of company personnel.
B)differences in product range and quality across company outlets.
C)an extremely narrow scope of independent thinking and action of company staff.
D)a written strategy but not the routines for running the business.
E)ample leeway in how staff perform activities at different company outlets.

Accepted Answer

Policies and procedures manuals can provide a framework for activities that need to be strictly prescribed, while also allowing for some independent action on the part of company personnel. This can help maintain consistency in product quality and service behavior patterns, while still giving staff some freedom to make decisions and take actions that are appropriate for their specific situations. This can be especially important in businesses with multiple outlets or locations, where some variation may be necessary to meet local needs but overall consistency is still important.

Question 10

Well-conceived policies and operating procedures facilitate good strategy execution by
A)leaving it up to employees regarding how things are to be done.
B)removing roadblocks to creativity and innovation.
C)fostering a work climate that preserves the status quo whenever possible.
D)enforcing consistency in how strategy-critical activities are performed.
E)channeling individual and group efforts along a strategy-supportive path.

Accepted Answer

Enforcing consistency in how strategy-critical activities are performed ensures that there is uniformity in the execution process, which reduces errors and increases efficiency. Well-conceived policies and operating procedures help establish this consistency, making it easier for employees to understand what is expected of them and how to carry out their tasks. A lack of consistency can lead to confusion, decreased productivity, and missed opportunities.

Question 11

Managers charged with implementing and executing strategy need to be deeply involved in the budgeting and resource allocation process because of all the following reasons EXCEPT
A)too little funding deprives organizational units of the necessary resources to execute their piece of the strategic plan while too much funding wastes organizational resources and reduces financial performance.
B)resource allocation involves screening of requests for people, facilities, and equipment, and approving them whether they contribute to the strategy execution effort or not.
C)without major budget reallocations there is little chance that desired core competencies and organizational capabilities will emerge.
D)lean, carefully managed budgets protect the company's financial condition and eliminate the wasteful use of cash.
E)a change in strategy nearly always calls for budget reallocations and resource shifting.

Accepted Answer

Resource allocation specifically aims to approve requests that contribute to the strategy execution effort, not to approve them regardless of their contribution.

Question 12

NOT among the reasons that Wegmans Food Markets delivers above-average profit margins and has below-average employee turnover rates in comparison to its supermarket industry rivals is
A)its recruitment and staffing policy of filling at least half of its open opportunities internally.
B)a regular series of programs designed to "hear," capture, and implement employees' ideas.
C)company events such as "open-door" days, team huddles, focus groups, and two-way Q&As with senior management.
D)rewards and benefits substantially lower than supermarket industry averages in order to boost profit margins.
E)multimillion dollar investments in the training and education of its employees.

Accepted Answer

The given reasons all contribute to Wegmans' success, except for option D. In fact, Wegmans is known for providing above-average rewards and benefits to its employees, not below-average. This contradicts option D, making it the correct answer.

Question 13

Apple decides to reallocate resources by curtailing online ad budgets and investing heavily in scratch-resistant Sapphire, the material that differentiates the Apple Watch from rival wearable computing device brands. What is MOST LIKELY the reason for Apple's reallocation of resources?
A)making critical value chain activities less effective
B)supporting the new strategic initiative of the brand
C)signaling commitment to online sales of the brand
D)signaling commitment to offline sales of the brand
E)impeding the efforts of rivals to hoard Sapphire

Accepted Answer

Apple's reallocation of resources signals a commitment to investing heavily in scratch-resistant Sapphire, which differentiates the Apple Watch from rival wearable computing device brands. This supports the new strategic initiative of the brand, indicating that they are prioritizing the development of new and innovative products and enhancing their competitive advantage over rivals.

Question 14

Prescribing policies and operating procedures aids the task of implementing strategy by
A)helping ensure that worker eligibility for incentive bonuses is measured consistently and awarded fairly.
B)fostering the use of best practices, TQM, Six Sigma, and continuous improvement efforts.
C)acting as a powerful lever for changing employee attitudes about the need for a different incentive and reward system.
D)helping build employee commitment to strengthening the company's core competencies and competitive capabilities.
E)placing limits on ineffective independent action and channeling efforts of individuals along a path more conducive to good strategy execution and operating excellence.

Accepted Answer

Prescribing policies and operating procedures help in channeling the efforts of individuals towards good strategy execution and operating excellence by limiting ineffective independent actions. This ensures that all employees in the organization follow a cohesive approach towards achieving the company's goals and objectives. Additionally, it also helps in standardizing processes and enhancing organizational efficiency.

Question 15

In 2013, Google decided to kill its 20 percent time policy, which allowed its staff to work on side projects of their choice, one day per week. The decision to end the 20 percent time policy was most likely made in order to
A)deter entry of rival companies into Google's Internet advertising market space.
B)increase Google's external debt and equity capital funding requirements.
C)lower Google's cost of handling online transactions.
D)permit reallocation of resources to enhance Google's strategy execution capabilities.
E)increase B2B demand for Google's existing diversified Internet services businesses.

Accepted Answer

Ending the 20 percent time policy allowed Google to allocate more resources towards enhancing its strategy execution capabilities. This meant that employees could focus more on their main roles and responsibilities, rather than on side projects. By doing so, Google could better prioritize its resources and ensure that they were being used to meet the company's strategic goals.

Question 16

A company's ability to marshal adequate resources in support of new strategic initiatives and steer them to the appropriate organizational units is important to the strategy execution process because
A)changes in strategy often require resource reallocation, and organizational units need the proper funding to carry out their part of the strategic plan effectively and efficiently.
B)accurate budgets are the key to exercising tight financial controls over what organization units can and cannot do in carrying out management's directives to execute the chosen strategy proficiently.
C)tight budget control is management's most powerful tool for first-rate strategy execution.
D)lean, carefully managed budgets protect the company's financial condition and eliminate the wasteful use of cash.
E)lean, strictly enforced budgets are management's best and most used means of getting organizational units to exercise the fiscal discipline needed to execute the chosen strategy in a cost-efficient manner.

Accepted Answer

The ability to marshal adequate resources and allocate them properly is critical to strategy execution because changes in strategy may require a reallocation of resources, and each unit needs the proper funding to execute their part of the plan effectively and efficiently. Without proper resource allocation, strategy execution may fail.

Question 17

In prescribing policies and procedures that facilitate independent action on the part of empowered employees for good strategy execution, companies need to do ALL of the following EXCEPT
A)give organization members clear direction and place reasonable boundaries on their actions.
B)empower employees to act within the company's set boundaries in pursuit of company goals.
C)allow company personnel to act with some defined degree of freedom, especially when individual creativity and initiative are more essential to good strategy execution than standardization and strict conformity.
D)institute policies that give employees substantial leeway to carry out activities in the way they think is best.
E)produce policy manuals on strategy execution that prescribe exactly how daily operations are to be conducted.

Accepted Answer

The other choices (A, B, C, and D) all suggest ways in which companies can facilitate independent action on the part of empowered employees. However, producing policy manuals that prescribe exactly how daily operations are to be conducted would be counterproductive to this goal, as it would stifle individual creativity and initiative. The other choices emphasize the importance of giving employees some degree of freedom within defined boundaries in order to execute strategy effectively.

Question 18

From a strategy-implementing/strategy-executing perspective, operating budget allocations should
A)primarily be based on the number of new strategic initiatives being implemented in each operating department.
B)be based on the number of people employed in each of the divisions.
C)be strategy-driven and based on how much each organizational unit needs to carry out its piece of the strategic plan efficiently and effectively.
D)be linked to the costs of performing value chain activities as determined by benchmarking against best-in-industry competitors.
E)depend on how much stretch there is in each department's objectives and what additional resources are needed to help reach these performance targets.

Accepted Answer

Operating budget allocations should be linked to the needs of each organizational unit to carry out its piece of the strategic plan efficiently and effectively. This ensures that resources are allocated in a way that supports the overall strategy, rather than just based on headcount or arbitrary factors.

Question 19

Imagine you are a consultant to a local donut shop chain. You have been asked to design a superior strategy execution effort for the owners of the company. What process management tool would you most likely NOT provide to the owners?
A)best practices methods to drive continuous improvement in how internal operations are and should be conducted at the donut chain.
B)benchmarking of the donut chain's operating activities and business processes against "best-in-industry" and "best-in-world" performers.
C)"best-in-company" operating activities and processes to standardize how the different locations of the donut chain perform the same functions.
D)operating practices that generate economies of scale and scope without a reconfiguration of the donut chain's current value chain activities.
E)performance yardsticks for judging effectiveness and efficiency for particular value chain activities and business processes that are deemed strategically critical for the donut chain.

Accepted Answer

The tool that would most likely not be provided to the owners is operating practices that generate economies of scale and scope without a reconfiguration of the donut chain's current value chain activities. This is because such practices would not necessarily improve the efficiency or effectiveness of the donut chain's operations and may not align with the overall strategy of the business. The other options listed (A, B, C, and E) are all valuable process management tools that could help the owners design a superior strategy execution effort for the donut shop chain.

Question 20

Cavco Construction divests funds from its commercial property ventures to invest in gated community properties close to New York, signaling a change of strategy. Which of the following statements about Cavco is most likely true?
A)Cavco is impeding the efforts to proficiently execute the strategy.
B)Cavco is merely fine-tuning its existing strategy to test efficiency.
C)Cavco is marshalling resources to support a new strategic initiative.
D)Cavco is hampering work climate conducive for good strategy execution.
E)Cavco is focusing on activities that are a low priority in the strategy execution effort.

Accepted Answer

The statement indicates that Cavco is divesting funds from its current commercial property ventures to invest in gated community properties near New York, which suggests a new strategic direction. Therefore, option C is most likely true, as Cavco is marshalling resources to support a new strategic initiative. None of the other options seem to be supported by the information given in the statement.

Quiz 11: Managing Internal Operations

Providing top-down guidance can aid the task of implementing strategy

What is a good example of how NOT to facilitate strategy execution?

A useful guideline in designing strategy-facilitating policies and operating procedures is

A "best practice" refers to a

New strategies often entail budget reallocations because

Visible actions to reallocate operating funds and move people into different and new organizational units

Merely fine-tuning the execution of a company's existing strategy normally requires

A company's operating budget must

Good strategy execution can involve policies and procedures manuals in order to maintain consistency in product quality and service behavior patterns to allow for

Well-conceived policies and operating procedures facilitate good strategy execution by

Managers charged with implementing and executing strategy need to be deeply involved in the budgeting and resource allocation process because of all the following reasons EXCEPT

NOT among the reasons that Wegmans Food Markets delivers above-average profit margins and has below-average employee turnover rates in comparison to its supermarket industry rivals is

Apple decides to reallocate resources by curtailing online ad budgets and investing heavily in scratch-resistant Sapphire, the material that differentiates the Apple Watch from rival wearable computing device brands. What is MOST LIKELY the reason for Apple's reallocation of resources?

Prescribing policies and operating procedures aids the task of implementing strategy by

In 2013, Google decided to kill its 20 percent time policy, which allowed its staff to work on side projects of their choice, one day per week. The decision to end the 20 percent time policy was most likely made in order to

A company's ability to marshal adequate resources in support of new strategic initiatives and steer them to the appropriate organizational units is important to the strategy execution process because

In prescribing policies and procedures that facilitate independent action on the part of empowered employees for good strategy execution, companies need to do ALL of the following EXCEPT

From a strategy-implementing/strategy-executing perspective, operating budget allocations should

Imagine you are a consultant to a local donut shop chain. You have been asked to design a superior strategy execution effort for the owners of the company. What process management tool would you most likely NOT provide to the owners?

Cavco Construction divests funds from its commercial property ventures to invest in gated community properties close to New York, signaling a change of strategy. Which of the following statements about Cavco is most likely true?