Deck 15: Strategic Renewal Emea Edition

Question 1

IBM's transformation from a computer processor and hardware company, to a professional service organization, is a clear example of incremental renewal

Answer 1

False

Question 2

Resolving the paradox of flexibility is both a managerial and an organizational task

Answer 2

True

Question 3

Where firms combine isomorphic forces they may homogenize their strategies by conforming to industry rules, norms and shared logics

Answer 3

True

Question 4

During the post war-period (1950s to 2000s) Royal Dutch Shell has maintained an increased attention on an exploratory over an exploitative strategic renewal trajectory

Question 5

Three dimension of strategic renewal can be distinguished: content, context and process

Question 6

Strategic renewal can be understood as the adaptive choices and actions a firm undertakes to alter its path dependency and maintain a dynamic strategic fit with changing environments over time

Question 7

In 2009 in response to the latest global recession, Royal Dutch Shell initiated a reorganization aimed at enhancing accountability for operating performance and technology development within the organization, thereby improving decision making and execution speed and reducing costs

Question 8

Steady-state flexibility consists of routine capabilities based on the present structures and goals of the organization, providing the firm with a capacity to respond to dynamic changes in the environment

Question 9

Philips Semiconductors effected an entrepreneurial revitalization by radically transforming itself from a bureaucratic, conservative company into an innovative and responsive one

Question 10

In many industries, competition is increasingly characterized by long, stable periods in which firms can achieve sustainable competitive advantages

Question 11

The beliefs and assumptions of the organizational culture play a central role in the interpretation of environmental stimuli and the configuration of organizationally relevant strategic responses

Question 12

Organizational learning theory and the firm's absorptive capacity for new external knowledge are considered principal drivers of strategic renewal in strategy research

Question 13

Many large corporate giants such as GE, IBM and Philips have realized that they went too far with the process of revitalization

Question 14

If organizational changes occur that are not anticipated in the planning repertoire and are threatening to the idea system shared by the members of the organization, the result is a situation of strategic neglect

Question 15

Organizations such as Nike, Nintendo, Sun Microsytems and Toyota provide examples of superior external structural flexibility

Question 16

KLM Cargo has embarked on a radical change programme to fulfill its mission to become rank among the top three customer-driven suppliers of high-quality transport, distribution and information services worldwide

Question 17

The environmental condition characterized by rapidly escalating competition, high uncertainty, heterogeneity of players and constant disequilibrium and change is sometimes called 'the Red Queen effect' after a passage from Lewis Carroll's 'Through the Looking Glass'

Question 18

When firms in dynamic environments overexploit competences and highly specialized resources without focusing on exploration, core competences can become core rigidities and cause a renewal trap

Question 19

In an effort to restore profitability Blockbuster has initiated a plan to expand from the US to its peripheral markets including the UK and Spain

Question 20

The least likely trajectory of renewal that a firms go through is a transition from a chaotic state to flexible, planned and rigid states

Question 21

The comparability of performance indicators across different units is one of the main challenges of structural ambidexterity

Question 22

Organizations that succeed in the challenge of matching internal rates of change to external rates of change, balancing exploration and exploitation, and achieving a suitable level of self-organization can be called c-form

Question 23

'Progress groups', 'reflective clubs' and 'open space' meetings were all part of Novotel's transformational renewal journey

Question 24

The early days of Apple Computer involved the legend of two kids in a garage inventing a computer and then building a company where the old corporate rules were scrapped, but which also fostered chaos and conflict; this could be described as an example of

A) Ossification
B) Overexploration
C) Competence gap
D) Overexploitation

Question 25

Environmental factors at the end of the twentieth century and the beginning of the twenty-first century that may have had an effect on the oil and gas industry include all expect one of the following

A) Financial crisis in Asia
B) The technology bubble
C) Rise of the Russian ruble
D) Apparent accounting scandals

Question 26

Path dependence can be defined as

A) The current implementation of previous decisions
B) The allocation of resources to future actions based on the current stage of organizational development
C) The constraining influence of past stages of organizational development on future decisions and actions
D) The future direction of organizational development based on current decisions and actions

Question 27

The adaptation perspective on strategic renewal includes all except one of the following

A) Dynamic capabilities theory
B) Organizational learning theory
C) Absorptive capacity
D) Behavioural theory

Question 28

Shell is now experiencing an environment that includes the all except one of the following features

A) An underdeveloped industry
B) The need to sustain competitive advantage
C) New growth opportunities
D) Changing economic, regulatory and political conditions

Question 29

The types of isomorphism exhibited by firms include all except one of the following

A) Coercive
B) Routine
C) Normative
D) Mimetic

Question 30

Searching, directing and endorsing are the more passive roles of top managers within their overarching strategic decision-making role

Question 31

Firms such as 3M and HP have developed structures and cultures to achieve contextual ambidexterity in order to manage the tensions of exploration and exploitation concurrently within organizational units

Question 32

Patent exclusivity is essential in the pharmaceutical industry to enable companies to enjoy a period of high profitability necessary to justify the high costs of development for a novel therapeutic

Question 33

The selection perspective on strategic renewal includes all except one of the following theories

A) Evolutionary biology
B) Resource- based view
C) Population ecology theory
D) Instrumental theory

Question 34

Normative expectations are an external source of organizational inertia that involve the following

A) Shared identity, organizational culture, strong social ties, established expectations about roles
B) Long-term contracts with customers and suppliers, interlocking directorates, established customer base, long term obligations
C) Commitment to status quo, risk averseness, intolerance of ambiguity, bounded rationality
D) Collective rationality, industry recipes, cognitive inertia, societal expectations

Question 35

Of the four basic journeys of strategic renewal, transformational renewal may be very effective in the future business landscape

Question 36

Microsoft, DSM Chemicals, Shell and Unilever are examples of large corporations that have demonstrated cyclical ambidexterity

Question 37

A trajectory of routinization is the most likely to be successful for firms operating in the new mode of rapid, escalating hypercompetition

Question 38

The context dimension of strategic renewal relates to

A) The question of which core attributes of the current strategy need to be changed, replaced or refreshed
B) How and when effective strategies are shaped, validated and implemented efficiently within the firm
C) Whether the learning underlying strategic renewal actions is internally developed through experiential learning or externally acquired through acquisitive learning
D) The temporal sequence of events that unfold as organizational change occurs

Question 39

Although the four basic journeys of strategic renewal imply a different solution to the tension between top, middle and front line management, each of these journeys is fundamentally similar

Question 40

The exploratory learning orientation of an organization includes all except one of the following features

A) Has a bearing on long-term renewal
B) Builds on the cumulative knowledge and capabilities of the organization
C) Includes outcomes such as launching new products and services
D) Entails unlearning much of what the organization has done before

Question 41

A typology of organizational forms for coping with competitive environments includes all except one of the following ideal types

A) Rigid
B) Planned
C) Chaotic
D) Hierarchical

Question 42

Which of the following forms part of a reverse trajectory of revitalization

A) Stagnation
B) Strategic focus
C) Maturation
D) Strategic neglect

Question 43

Which of the following statements best reflects transformational renewal

A) Top management amplifies market pressures, often enforcing more rigorous standards than would otherwise be imposed
B) Managers shape the context within which strategic renewal emerges, speeding up adaptive processes
C) Cooperation between front line managers is strong, learning is intense and the diversity among levels and groups leads to learning, exploration and rejuvenation
D) May be very effective in the future business landscape

Question 44

In order to cope with the challenges facing the pharmaceutical industry, including the 'patents cliff', GlaxoSmithKline (GSK) has started to pursue all except one of the following avenues to renew their strategy

A) Capping the prices of the patented medicines it sells in the poorest countries to no more than 25% of the cost in wealthy markets
B) Shifting to a biotech like approach and creating small outfits of up to 80 scientists to pursue development programmes
C) Considering moving into new domains, such as its first move into the branded generics market through an alliance with Aspen Pharmacare Holdings
D) Shifting the focus from more targeted drugs earning a modest income to a few 'blockbuster drugs'

Question 45

External strategic flexibility includes all except one of the following

A) Creating new product-market combinations
B) Changing managerial roles
C) Using market power to deter entry and control competition
D) Engaging in political activities to counteract trade regulations

Question 46

By combining different levels of variety and speed of dynamic capabilities, four types of flexibility can be distinguished including all except one of the following

A) Steady-state
B) Tactical
C) Structural
D) Operational

Question 47

Strategic drift refers to a process in which

A) Consciously managed incremental changes keep pace with environmental changes
B) Consciously managed transformational changes anticipate environmental changes
C) Consciously managed incremental changes do not keep pace with environmental changes
D) Spontaneous organizational changes keep pace with environmental changes

Question 48

All except one of the following are main challenges of contextual ambidexterity as a mode of balancing exploration and exploitation

A) Managing transitions between exploration and exploitation
B) Managing contradictions within organizational units
C) Staffing qualified individuals with high tolerance for ambiguity
D) Measuring individual performance/contribution

Question 49

The four generic modes of balancing exploration and exploitation include all except one of the following

A) Continual
B) Contextual
C) Reciprocal
D) Structural

Question 50

The role of front line managers in strategic renewal can be described in all except one of the following ways

A) Observing trends, threats and opportunities for growth or change
B) Experimenting with new technologies
C) Championing initiatives for change
D) Proposing new initiatives and identifying radical new avenues for change

Question 51

In their more active role, top managers are entrusted with all except one of the following

A) Searching
B) Endorsing
C) Orchestrating
D) Directing

Question 52

Four idealized strategic renewal journeys can be identified, including all except one of the following

A) Transactional
B) Emergent
C) Facilitated
D) Directed

Question 53

Cyclical ambidexterity as a mode of balancing exploration and exploitation involves

A) Managing the tensions of exploration and exploration concurrently within organizational units
B) Striving towards balance across domains of activity
C) Focusing the allocation of resources and attention to exploration and exploitation in oscillating fashion
D) Designing the organization in such a form that it consists of highly differentiated units with targeted structural integration

Question 54

Structural flexibility consists of

A) Static procedures to optimize the firm's performance when the level of throughput and the nature of throughput remain relatively stable over time
B) Managerial capabilities for adapting the organization structure and its decision and communication processes, providing the firm with a capacity to respond to complex changes in the environment
C) Dynamic capabilities for adapting the goals of the organization, providing the firm with a capacity to respond to unpredictable changes in the environment
D) Routine capabilities based on present structures and goals of the organization, providing the firm with a capacity to respond to dynamic changes in the environment

Question 55

Organizational structure comprises

A) The set of beliefs and assumptions held relatively commonly throughout the organization and taken for granted by its members
B) The hardware and the software used in the transformation of inputs into outputs, as well as the configuration of the hardware and software
C) The dynamic capabilities for adapting the goals of the organization, providing the organization with a capacity to respond to unpredictable changes in the environment
D) The actual distribution of responsibilities and authority among the organization's personnel, the planning and control systems as well as the process regulations of decision-making, coordination, and execution

Question 56

Prior to the 'Back to the Future' project, Novotel could be described using all except one of the following statements

A) Too inward looking
B) Demonstrating operational and strategic flexibility
C) Facing managerial rigidities
D) Lacking adequate marketing knowledge

Question 57

The flexible organizational form can be described in all except one of the following ways

A) It adapts to disturbances without the organization losing its distinctiveness
B) The possibilities for variation are unlimited because there is no anchorage within a set of basic organizational capabilities
C) The innovative culture helps the organization to constructively incorporate new perspectives
D) It is effective in fundamentally unpredictable environments, which may also be dynamic and complex

Question 58

By following a trajectory of radical transformation where might the KLM Cargo be positioned

A) Somewhere between rigid organization and chaotic organization
B) Flexible organization
C) Somewhere between flexible organization and chaotic organization
D) Chaotic organization

Question 59

What is the average cost of developing a drug in the global pharmaceutical industry

A) €50 million
B) €1 billion
C) €500 million
D) €5 billion

Question 60

Sustained strategic renewal can be considered to rest on all except one of the following principles

A) Self-renewing organisations synchronize concurrent exploitation and exploration
B) Self-renewing organisations manage the requisite variety by regulating internal rates of change to equal or exceed relevant external rates of change
C) Self-renewing organisations are characterized by internal rates of change outstripping external rates of change and take self-organizing to an uncontrollable extent
D) Self-renewing organisations optimize self-organization by delegating decision making to the lowest possible level to maximize search depth and scope throughout the organization

Question 61

Describe the various trajectories of renewal.

Question 62

Provide a definition of strategic renewal. Why is this concept relevant to modern organisations? What are the main perspectives and dimensions of strategic renewal?

Question 63

What are the roles of managers in strategic renewal?

Question 64

Describe the flexibility paradox. What are the main elements of a strategic framework of flexibility?

Question 65

What does the term ambidexterity mean in the context of strategic renewal? What are the different modes of ambidexterity that can be identified?