Capstone test 4 -2

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The ability to attract and manage ____ may be the most important skill a strategic leader must have.
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human capital
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As noted in the chapter Opening Case, the average tenure of CEOs has ___________ in recent years.
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become shorter
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According to the discussion about succession plans for CEOs in the chapter Opening Case, all of the following are correct EXCEPT
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Apple has a succession plan for CEO Steve Jobs and anticipates an easy transition to a new CEO.
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The primary responsibility for effective strategic leadership of the organization rests with the
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CEO
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The most effective leadership style is ____ leadership.
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transformational
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The board of directors for TundraPro, Inc., is searching for a new CEO. The firm is in need of new direction after suffering several years of declining performance and increasingly demoralized management and employees. The board has decided it needs a CEO who can be a transformational leader. To this specific end, the board needs to identify applicants who have
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high emotional intelligence.
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Which of the following is NOT a factor that determines the amount of a manager’s decision discretion?
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cohesiveness of the board of directors
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All of the following are external environmental sources that affect managerial discretion EXCEPT
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corporate culture.
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A characteristic of the manager that may affect managerial discretion is his/her
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tolerance for ambiguity.
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The top management team is composed of the
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key managers who are responsible for selecting and implementing a firm’s strategy.
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A heterogeneous top management team is composed of individuals with
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different functional backgrounds, experience, and education.
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Executive headhunters have approached Charles about taking the position of senior vice president of marketing for a well-known company. Although this company has been highly successful since 1995, Charles has heard persistent rumors of overly aggressive marketing tactics, questionable reporting of sales data, and an atmosphere of intolerance of criticism. The CEO is a powerful and charismatic individual, who built the company from a small regional firm to an international powerhouse in only a decade. The other top managers have been hand-picked by the CEO, as have a number of the members of the board of directors. The salary for this position is very high and includes generous stock options. It would be a major step up in Charles’ career and would position him to move to CEO of another company in the future. Charles has prided himself on his high moral values and is viewed as an exceptionally ethical person by his peers. What should Charles do?
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Charles should not take the job because the culture of the organization is set by the CEO and other top managers. He would have little influence on the organizational culture as one of many top managers.
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The more heterogeneous the top management team, the
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more difficult it will be for the team to implement strategies.
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Which of the following is NOT associated with heterogeneous top management teams?
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diminished debate among top managers
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Recently, Sony selected Sir Howard Stringer as CEO. Sir Howard is not Japanese and he was not a Sony employee before his selection. Which of the following statements is FALSE?
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The decision-making process on Sony’s top management team will be smoother and faster with the addition of Sir Howard.
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An organization’s ____ is composed of the key individuals who are responsible for selecting and implementing the firm’s strategies
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top management team
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Normally, the more involved a board of directors is in shaping the firm’s strategic direction, the
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higher the corporation’s performance is.
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A CEO gains power from all of the following circumstances EXCEPT
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when tenure of the top management team is shorter than the tenure of the board.
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CEO duality refers to
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the situation where the CEO is also chairperson of the board of directors.
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Which of the statements about CEO duality is FALSE?
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CEO duality is relatively rare in the U.S. except in large Fortune 500 firms.
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Christina is evaluating Maximum Brands as an investment opportunity. She is very concerned about future financial performance by Maximum Brands. Christina does not believe that the CEO can act as a steward. Christina will probably be most concerned if
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there is CEO duality.
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Which of the following is NOT related to a CEO having long tenure in his or her position?
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high level of innovation
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An example of the external labor market is the situation where
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a new vice president of marketing is hired from a competitor.
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A CEO’s breadth of knowledge base is constrained by
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his or her long tenure with the firm.
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Which of the following is NOT a benefit to the firm using the internal labor market to select a new CEO?
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Internal hiring results in an increased level of innovation.
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The CEO/chairman of PharmaPacifica was recently killed in an airplane crash. This tragedy has thrown PharmaPacifica into turmoil as there is no one in the organization qualified to step into the former CEO’s shoes. This is an example of
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a failure of succession management.
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Monahegan Plasma Company is facing a performance downturn and realizes that a major rethinking of its strategy is in order. Under these circumstances, Monahegan Plasma would benefit from a
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external CEO with a heterogeneous top management team.
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As the organizational environment becomes more complex, heterogeneous, and ambiguous, firms need to
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create more heterogeneous top management teams.
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When the top management team is homogeneous and a new CEO is selected from inside the firm, it is
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unlikely that the current strategy will change.
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The recent choice of Ursula Burns (chapter Strategic Focus) as CEO of Xerox is an example of internal succession as Burns was previously a senior manager and president at Xerox. Which effect on strategy does this model of succession suggest?
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Stable strategy or stable strategy with innovation.
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Which of the following factors most encourages stability in a firm’s strategy?
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Internal CEO succession and a homogeneous top management team.
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The failure of organizations to use the pool of managerial talents held by women can best be termed
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an opportunity cost for firms.
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Two key strategic leadership actions include
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determining strategic direction and establishing balanced organizational controls.
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Determining the strategic direction for the firm refers to developing
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a specific image and character.
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The CEO of CLEO, Inc., in all her communications to employees consistently refers to her dream of CLEO becoming the company of choice for employee assistance programs. She keeps this theme uppermost and it is reflected in the firm’s motto, the title of its Web newsletter, and even on the company t-shirts and mugs. This is an example of the firm’s
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envisioned future.
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The firm of Bergeron has existed for hundreds of years, having made exquisite clocks and watches. In its advertising it refers to clocks the firm made for such past royalty as Marie Antoinette and the Czars of Russia. Employees are constantly reminded of the firm’s rich history and its long tradition of excellence of design and execution. Bergeron is motivating its employees through its
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core ideology.
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GE performed exceptionally well under Jack Welch, the former CEO of GE. Jeffery Immelt, the new CEO, has made changes to the firm’s corporate-level strategy and structure. His changes have been made even more difficult because GE is experiencing performance problems partly the result of the difficult economic climate. Immelt can expect
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some resistance by organizational stakeholders who are accustomed to Jack Welch and the high performance which he brought to GE.
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Exploiting and developing core competencies is part of the key strategic leadership action “Effectively Managing the Firm’s Resource Portfolio.” Which of the following is most important for developing and using core competencies?
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high-quality human capital.
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Omicron Artificial Intelligence has a core competency of being able to respond quickly to competitors’ actions and to opportunities in the marketplace. This is an example of competitive
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speed
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Human capital refers to
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knowledge and skills of the firm’s work force.
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Billy Kroghmen is the son of a very prominent Fortune 500 CEO. Billy has had troubles. He failed out of multiple colleges, universities, and correspondence schools. He finally received his undergraduate degree from a university with only a post office box for an address. He then enrolled in the school’s combined graduate accounting and law school programs, graduating with honor with degrees in both areas. After graduation, he twice failed both the CPA and bar exams, managing to set record low scores on the ethics portions of both. Despite these academic setbacks, Billy’s career now seems to be thriving. He has been appointed to a number of “blue ribbon” government committees, is on the board of directors of two corporations and one prestigious not-for-profit organization. In at least one instance, a donor credited Billy with the idea for making a large contribution to the not-for-profit. Widespread speculation is that his career advancement is based largely on social relationships through friends and family. We would classify Billy as ____ on ____ capital, and ____ on ____ capital.
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high; social; low; human
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The goal of investing in human capital is to
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develop a workforce capable of continuous learning.
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Which of the following will increase the probability that a lower-level manager will become a successful strategic leader?
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training and development programs.
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Faced with declining enrollment and increased competition from not-for-profit organizations offering inexpensive art courses for new hobbyists, the for-profit Delta Academy of Art has steadfastly stayed true to its mission of offering high-quality classical art instruction for both beginners and advanced artists at high tuition. Delta has been noted for the excellence of its artistic training for decades. This is an example of
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competence becoming a liability.
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The effective development and management of the firm’s ____ may be its only sustainable competitive advantage.
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human capital
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To successfully implement a firm’s strategy, the workforce must be viewed as a
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resource to be maximized.
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Clarita Cosmetics is confronting a decline in sales due largely to a general economic downturn. The top management team is debating whether to lay off employees. In the debate, the following statements are made. Which of the statements is FALSE?
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A layoff will increase the slack at Clarita Cosmetics and allow the firm to absorb the increased number of errors employees may make until they learn their new tasks.
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____ capital increases cooperation among individuals inside and outside the firm.
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social
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Which key strategic leadership action plays a key role in influencing how the firm conducts its business and regulates and controls employees’ behavior?
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Sustaining an Effective Organizational Culture.
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Which of the following statements is TRUE regarding effective organizational cultures?
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Organizational culture can be a source of competitive advantage because it influences employee behavior and how the firm’s conducts its business.
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Which of the following is NOT one of the five dimensions thought to characterize an employee’s entrepreneurial mindset?
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reactivity
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The top management team at Ingenuity, Inc., has assigned a team of scientists to a multi-year project to investigate the viability of growing large amounts of fur from cloned cells of minks and foxes to produce no-kill fur products for coats and other clothing items. This idea would satisfy all the dimensions of the entrepreneurial orientation EXCEPT
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competitive autonomy.
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The CEO of Icon Image Associates wishes to radically change the corporate culture of the firm. She knows that she must convince others at Icon Image of the necessity for the culture change and gain their active support. The CEO knows that the key players in energizing the culture change and fostering alignment with the new strategic vision are
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middle managers.
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Competitive aggressiveness describes a firm’s
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propensity to take actions that allow it to outperform rivals consistently and substantially.
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Shaping and reinforcing a new organizational culture requires all of the following EXCEPT
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adherence to the firm’s traditional core values.
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Organizational controls provide
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the parameters within which strategies are to be implemented.
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Research shows that ____________ is the most effective means of ensuring that employees comply with the firm’s ethical requirements.
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a value-based culture
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Managerial actions that support development of an ethical organizational culture include all of the following EXCEPT
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disciplining whistle-blowers.
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The Enron employee who reported the financial manipulations at the company to her superiors can be considered to have engaged in
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an act of courage.
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The ____ is a framework firms can use to verify that they have established both strategic and financial controls to assess their performance.
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balanced scorecard
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____ provide information about the results of past actions, but do not communicate the drivers of the firm’s future performance.
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Financial controls
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The premise of the balanced scorecard is that firms jeopardize future performance possibilities when they
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overemphasize financial controls and neglect strategic controls.
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Four perspectives are integrated to form the balanced scorecard framework. The financial perspective focuses on the view of the firm by the
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shareholder
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Strategic control focuses on the ________ of strategic actions whereas financial controls focus on the _____ of strategic actions.
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content; outcomes
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In the balanced scorecard framework, ____ controls are used to assess the organization’s success in creating a climate that supports change and innovation.
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learning and growth
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Criteria for reevaluating internal business processes using the balanced scorecard include all of the following EXCEPT
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increases in employee skills.
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Which of the following is NOT one of the four perspectives in the balanced scorecard framework?
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entrepreneurial
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According to the chapter Strategic Focus, all of the following are leadership actions of Mike Duke, the new CEO of Wal-Mart EXCEPT
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A greater emphasis on domestic markets and less emphasis on international markets especially given the failures of Wal-Mart in Germany and Korea.

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