Question 1

The key duties of a company's board of directors in the strategy-making, strategy-executing process include
A) coming up with compelling strategy proposals of their own to debate against those put forward by top management.
B) overseeing the company's financial accounting and financial reporting practices and evaluating the caliber of senior executives' strategy-making/strategy-executing skills.
C) taking the lead in developing the company's business model and strategic vision.
D) taking the lead in formulating the company's strategic plan but then delegating the task of implementing and executing the strategic plan to the company's CEO and other senior executives.
E) approving the company's operating strategies, functional-area strategies, business strategy, and overall corporate strategy.

Accepted Answer

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Question 2

Every corporation should have a strong independent board of directors that does all of the following EXCEPT
A) is well informed about the company's performance and exercises its fiduciary duty to protect shareholders responsibly.
B) guides management in choosing a strategic direction and makes independent judgments about the validity and wisdom of management's proposed strategic actions.
C) evaluates the leadership skills of the CEO and other senior executives.
D) has the courage to curb management actions deemed inappropriate or unduly risky.
E) is responsible for leading the strategy-making, strategy-executing process.

Accepted Answer

While the board of directors should play an active role in guiding and evaluating the company's direction, it should not be responsible for leading the strategy-making and execution process. This is the role of the company's management team. Therefore, option E is the only choice that is not part of the board's responsibilities.

Question 3

Sheryl, the CEO of REBBL, manufacturer and marketer of herbal elixirs and tonics, decides to express the essence of her organization's vision with the help of a slogan. How does this help her and her organization?

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Question 4

The leadership challenges that top executives face in making corrective adjustments when things are not going well include
A) knowing when to replace poorly performing subordinates and when to do a better job of coaching them to do the right things.
B) being able to discern whether to promote better achievement of strategic performance targets or whether to promote better achievement of financial performance targets.
C) deciding when adjustments are needed and what adjustments to make.
D) having the analytic skills to separate the problems due to a bad strategy from the problems due to bad strategy execution.
E) deciding whether the company would be better off making adjustments that curtail the achievement of strategic objectives or that curtail the achievement of financial objectives.

Accepted Answer

The other options listed may also be leadership challenges that top executives face, but the ability to recognize when adjustments are needed and what adjustments to make is the most fundamental challenge. This includes the ability to evaluate both strategic and financial performance and to make difficult decisions about personnel changes or changes to objectives. Having the analytical skills to evaluate strategy and execution is also important, but this falls under the broader challenge of knowing when and how to make corrective adjustments.

Question 5

What is the managerial value of a good strategic vision?

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Question 6

What are the five integrated stages of the strategy-making, strategy-executing process, and which tasks does each stage entail?

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Question 7

Define and briefly explain what is meant by each of the following terms. a) strategic vision
b) stretch objectives
c) strategic objective
d) balanced scorecard
e) strategic intent

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Question 8

Is there a difference between a strategic vision and a mission statement? Please explain.

Accepted Answer

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Question 9

In the strategy-making, strategy-executing process, effective corporate governance requires a company's board of directors to
A) play the lead role in forming the company's strategy and then directly supervising the efforts and actions of senior executives in implementing and executing the strategy.
B) provide guidance and counsel to the CEO in carrying out his/her duties as chief strategist and chief strategy implementer.
C) oversee the company's strategic direction, evaluate the caliber of senior executives' skills, handle executive compensation, and oversee financial reporting practices.
D) work closely with the CEO, senior executives, and the strategic planning staff to develop a strategic plan for the company and then oversee how well the CEO and senior executives carry out the board's directives in implementing and executing the strategic plan.
E) review and approve the company's business model and also review and approve the proposals and recommendations of the CEO as to how to execute the business model.

Accepted Answer

Effective corporate governance requires the board of directors to oversee the company's strategic direction, evaluate the caliber of senior executives' skills, handle executive compensation, and oversee financial reporting practices. Options A, B, and D describe a more hands-on approach by the board, while option E is too specific and limited in its scope.

Question 10

A well-conceived strategic vision helps prepare a company for the future. True or false? Explain and justify your answer.

Accepted Answer

A well-conceived strategic vision is distinctive and specific to a particular organization; it avoids generic, feel-good statements like "We will become a global leader and the first choice of customers in every market we serve." The real purpose of a vision statement is to serve as a management tool for giving the organization a sense of direction. A well-thought-out, forcefully communicated strategic vision pays off in several respects: (1) It crystallizes senior executives' own views about the firm's long-term direction; (2) it reduces the risk of rudderless decision making; (3) it is a tool for winning the support of organization members to help make the vision a reality; (4) it provides a beacon for lower-level managers in setting departmental objectives and crafting departmental strategies that are in sync with the company's overall strategy; and (5) it helps an organization prepare for the future. When top executives are able to demonstrate significant progress in achieving these five benefits, the first step in organizational direction setting has been successfully completed.

Question 11

Which one of the following is NOT among the chief duties/responsibilities of a company's board of directors insofar as the strategy-making, strategy-executing process is concerned?
A) hiring and firing senior-level executives and working with the company's chief strategic planning officer to improve the company's strategy when performance comes up short of expectations
B) being inquiring critics and exercising strong oversight over the company's direction, strategy, and business approaches
C) evaluating the caliber of senior executives' strategy-making/strategy-executing skills
D) instituting a compensation plan for top executives that rewards them for actions and results that serve stakeholders' interests, most especially those of shareholders
E) overseeing the company's financial accounting and financial reporting practices

Accepted Answer

Hiring and firing senior-level executives and working with the company's chief strategic planning officer to improve the company's strategy when performance comes up short of expectations is typically a responsibility of the company's management team, not the board of directors.

Question 12

Margot is in the process of developing financial and strategic objectives for her luxury jewelry and accessories company. She realizes she needs to add short-term and longer-term performance targets. Is it important for her to spell out both short-term and long-term performance targets? Which time frame is more important? Are there tradeoffs involved? Explain.

Accepted Answer

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Question 13

The task of top executives when the company faces disruptive changes in its environment is to not only raise questions about the appropriateness of its direction and strategy, but also to
A) know when to continue with the present corporate culture and when to shift to a different and better corporate culture.
B) ferret out the causes and decide when adjustments are needed and what adjustments are needed for improved performance and operating excellence.
C) figure out whether to arrive at decisions quickly or slowly in choosing among the various alternative adjustments.
D) decide whether to try to fix the problems of poor strategy execution or simply shift to a strategy that is easier to execute correctly.
E) decide how to identify the problems that need fixing.

Accepted Answer

When a company faces disruptive changes, top executives need to identify the causes of the challenges and decide what adjustments are needed for improved performance and operating excellence. This involves taking a close look at the company's strategy and direction and making changes accordingly. Option A is incorrect because simply changing the corporate culture may not be sufficient to address the challenges posed by disruptive changes. Option C is incorrect because the decision-making process should be guided by the urgency and nature of the challenges, rather than a predetermined timeline. Option D is incorrect because shifting to an easier-to-execute strategy may not fully address the challenges facing the company. Option E is incorrect because identifying problems is only the first step - top executives must also take steps to address these problems.

Question 14

Explain why an organization needs a strategic vision. What purpose does a strategic vision serve?

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Question 15

Corporate governance failures at Fannie Mae and Freddy Mac included all of the following EXCEPT
A) a lack of understanding regarding the risks of subprime loan strategies.
B) a strong independent board of directors that was responsible for making independent judgments about the validity and wisdom of management's proposed strategic actions.
C) inadequate monitoring of the CEO and other senior executives.
D) fraudulent executive compensation systems.
E) ineffective oversight of the accounting principles employed to accurately determine earnings.

Accepted Answer

The statement "a strong independent board of directors that was responsible for making independent judgments about the validity and wisdom of management's proposed strategic actions" is not true as the board was not fully independent and had close ties to the management of Fannie Mae and Freddie Mac.

Question 16

Proficient strategy execution does NOT include
A) organizational learning.
B) creating a company culture and work climate conducive to successful strategy implementation and execution.
C) vigilantly searching for ways to improve performance.
D) the board of directors oversight of management's proposed strategic actions.
E) surveying employees on how employee job satisfaction can be improved.

Accepted Answer

While surveying employees for feedback on job satisfaction is important, it is not a direct component of proficient strategy execution. The other choices all contribute to successful strategy implementation and execution.

Question 17

What is meant by the term "stretch objectives"? Is it important that companies establish stretch objectives? Why or why not?

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Question 18

Explain the difference between financial objectives and strategic objectives. Give examples of each.

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Question 19

Why does an organization need both financial and strategic objectives?

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Question 20

Identify the key characteristics of a well-stated organizational objective.

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Quiz 2: Leading the Process of Crafting and Executing Strategy

The key duties of a company's board of directors in the strategy-making, strategy-executing process include

Every corporation should have a strong independent board of directors that does all of the following EXCEPT

Sheryl, the CEO of REBBL, manufacturer and marketer of herbal elixirs and tonics, decides to express the essence of her organization's vision with the help of a slogan. How does this help her and her organization?

The leadership challenges that top executives face in making corrective adjustments when things are not going well include

What is the managerial value of a good strategic vision?

What are the five integrated stages of the strategy-making, strategy-executing process, and which tasks does each stage entail?

Define and briefly explain what is meant by each of the following terms. a) strategic vision b) stretch objectives c) strategic objective d) balanced scorecard e) strategic intent

Is there a difference between a strategic vision and a mission statement? Please explain.

In the strategy-making, strategy-executing process, effective corporate governance requires a company's board of directors to

A well-conceived strategic vision helps prepare a company for the future. True or false? Explain and justify your answer.

Which one of the following is NOT among the chief duties/responsibilities of a company's board of directors insofar as the strategy-making, strategy-executing process is concerned?

The task of top executives when the company faces disruptive changes in its environment is to not only raise questions about the appropriateness of its direction and strategy, but also to

Explain why an organization needs a strategic vision. What purpose does a strategic vision serve?

Corporate governance failures at Fannie Mae and Freddy Mac included all of the following EXCEPT

Proficient strategy execution does NOT include

What is meant by the term "stretch objectives"? Is it important that companies establish stretch objectives? Why or why not?

Explain the difference between financial objectives and strategic objectives. Give examples of each.

Why does an organization need both financial and strategic objectives?

Identify the key characteristics of a well-stated organizational objective.