Chapter 10_Policy – Flashcards
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1. (p. 302) Business strategies, grand strategies, and ______ are critically important in crafting a successful future.
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A. Long-term objectives
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2. (p. 302) To make business strategies, grand strategies and long-term objectives a reality, the people in an organization who ________ need guidance in exactly what they need to do.
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A. "Do the work"
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3. (p. 302) ___________ are measurable outcomes achievable or intended to be achieved in one year or less.
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C. Short-term objectives
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4. (p. 302) Short-term objectives are usually:
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B. Quantitative
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5. (p. 302) Short-term objectives __________ long-term objectives.
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B. Operationalize
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6. (p. 302) If X-Corp.'s car polish division has committed to a 30 percent gain in revenue over six years, they must consider the specific target in revenue during the current quarter to indicate they are making appropriate progress. This smaller objective for the fiscal quarter is called a:
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A. Short-term objective
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7. (p. 302) Discussion about and agreement on short-term objectives help raise issues and potential conflicts within an organization that usually:
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D. Require organizational coordination
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8. (p. 302) Short-term objectives assist strategy implementation by identifying measurable outcomes of action plans or functional activities, which can make feedback, correction and evaluation
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A. More relevant and acceptable
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9. (p. 303) Short-term objectives are usually accompanied by subsequent:
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C. Action plans
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10. (p. 303) _______ are usually accompanied by subsequent action plans.
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C. Short-term objectives
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11. (p. 303) Which of the following items is NOT an example of how action plans enhance short-term objectives?
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B. Link to long-term strategy
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12. (p. 303) ______ identify who is responsible for each action in the plan.
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C. Action plans
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13. (p. 303) Which of the following is NOT an example of a quality of effective short-term objectives?
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C. Definition of the market
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14. (p. 303) Difficulties in quantifying objectives often can be overcome by initially focusing on measurable activity and then identifying measurable
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C. outcomes
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24. (p. 305) A benefit of functional tactics is that the ____ of developing them, when done right, can be a forum for raising and resolving conflicts between strategic intent and operational realities due to operational issues not immediately known to higher management.
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A. Process
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25. (p. 304) Functional tactics translate thought (______) into action designed to accomplish specific short-term objectives.
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D. grand strategy
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26. (p. 305) One benefit of short-term objectives and action plans is that they provide a __________. They can provide clear, measurable mechanisms for developing budgets, schedules and trigger points, which help control the implementation of strategy.
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D. Basis for strategic control
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27. (p. 305) One benefit of short-term objectives and action plans is its _________, which clarify personal and group roles in a firm's strategies and help realistically challenge managers to perform well. These objectives are particularly effective when linked to the firm's reward structure.
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A. Motivational payoff
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28. (p. 304) ________ are key, routine activities that must be undertaken in each functional area.
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C. Functional tactics
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29. (p. 304) Functional tactics translate _______ into action designed to accomplish specific short-term objectives.
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B. Grand strategy
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30. (p. 304) Every ________ in a company executes functional tactics that support the business's strategy and help accomplish strategic objectives.
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C. Value chain activity
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31. (p. 307) Which is NOT one of the differences between business strategies and functional tactics?
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A. Reinforcement of the strategy
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32. (p. 307) __________ identify activities to be undertaken now or in the immediate future.
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D. Functional tactics
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33. (p. 307) The ___________ of functional tactics allows functional managers to adjust to changing current conditions.
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A. Shorter time horizon
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34. (p. 307) Business strategies provide _______ direction.
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A. General
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35. (p. 307) Functional tactics are more _________ than business strategies.
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A. Specific
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36. (p. 307) Which of the following is NOT a way that specificity in functional tactics contributes to successful implementation?
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B. Limiting the need for top management's confidence in and sense of control over the business strategy
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37. (p. 307) Operating managers must establish short-term objectives and operating strategies that contribute to:
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A. Business-level goals
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38. (p. 307) Involving operating managers can increase the __________ of operating managers to the strategies developed.
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C. Commitment
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39. (p. 308) Outsourcing starts for most firms with:
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C. The outsourcing of payroll production
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40. (p. 308) __________ obtaining work previously done by employees inside the companies from sources outside the company.
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C. Outsourcing
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41. (p. 308) __________ is acquiring an activity, service or product necessary to provide a company's products or services from "outside" the people or operations controlled by that acquiring company.
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C. Outsourcing
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42. (p. 308) Relentless cost cutting is the main force behind the trend of _____.
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B. Outsourcing
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43. (p. 308) _________ is the main force behind the outsourcing trend.
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A. Relentless cost cutting
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44. (p. 309) ___________ is the most frequently outsourced functional activity at 75 percent.
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B. Payroll
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45. (p. 311) ________ is the act of allowing an individual or team the right and flexibility to make decisions and initiate action.
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C. Empowerment
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46. (p. 311) One way operating managers ensure decision making is consistent with the mission, strategy and tactics of the business while allowing considerable latitude to operating personnel is through the use of:
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B. Policies
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47. (p. 311) __________ are directives designed to guide the thinking, decisions and actions of managers and their subordinates in implementing a firm's strategy.
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D. Policies
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48. (p. 311) One way operating managers _____ is through the use of policies.
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D. empower
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49. (p. 311) __________ increase managerial effectiveness by standardizing many routine decisions and clarifying the discretion managers and subordinates can exercise in implementing functional tactics.
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B. Standard operating procedures
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50. (p. 311) _______ communicate guidelines to decisions.
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A. Policies
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51. (p. 311) Policies are also sometimes called
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A. standard operating procedures
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52. (p. 311) Policies establish __________ over _________ by clearly stating how things are to be done _________.
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B. Indirect control; independent action; now
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53. (p. 311) Policies establish __________ over independent action.
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B. Indirect control
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54. (p. 312) Policies ________ basic aspects of organization behavior.
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B. Institutionalize
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55. (p. 312) Policies ensure ______ action.
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B. quicker
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56. (p. 312) Policies counteract resistance to or rejection of chosen _______.
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B. strategies
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57. (p. 312) Policies reduce _______ in day to day decision making.
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D. Uncertainty
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58. (p. 313) Policies may be ________ or _________.
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C. Written and formal; unwritten and informal
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59. (p. 313) Policies offer predetermined answers to _____ problems.
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C. routine
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60. (p. 313) Which of the following is NOT a benefit of formal, written policies?
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A. They make variation in the treatment of individual problems more likely
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61. (p. 313) The strategic ________ of policies can vary.
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C. Significance
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62. (p. 313) Policies can be ________. One good example of this is the use of equal employment opportunity practices.
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C. Externally imposed
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63. (p. 313) The ______ significance of policies can vary.
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C. strategic
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64. (p. 314) ________ theoretically reward(s) the actions of people within an organization.
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B. Compensation
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65. (p. 313) Policies can be externally imposed or ______
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C. internally derived
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66. (p. 314) The goal of an executive bonus compensation plan is to:
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A. Motivate executives to achieve maximization of shareholder wealth
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67. (p. 314) The goal of ______ is not the only goal that executives may pursue.
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D. Shareholder wealth maximization
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68. (p. 314) The success of bonus compensation as an incentive hinges on:
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C. The match between the plan and the firm's strategic objectives
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69. (p. 314) A common measure of shareholder wealth creation is appreciation of company
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B. stock price
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70. (p. 314) ______ provide the executive with the right to purchase company stock at a fixed price in the future.
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B. Stock options
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71. (p. 314) A common measure of _______ creation is appreciation of company stock price
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A. shareholder wealth
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72. (p. 314) Stock options have typically represented _______ of a CEO's average pay package.
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C. More than 50 percent
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73. (p. 315) ______ dilute shareholders' equity when they are exercised
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B. Stock options
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74. (p. 318) The rationale behind golden handcuffs is that the plan:
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C. Offers an incentive for executives to remain with the firm
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75. (p. 315) There is a weak correlation between earnings measures and shareholder wealth creation with the use of a:
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B. Cash based plan
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76. (p. 315) Golden handcuffs:
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D. May promote risk-averse decision making due to the downside risk borne by the executive
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77. (p. 315) ________ provide incentive for the executive to create wealth for shareholders as measured by increases in the firm's share price.
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A. Stock option grants
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78. (p. 316) __________ are much easier to value than options because they are equivalent to a stock transfer at the market price.
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A. Restricted stock grants
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79. (p. 316) ________ offers employees more certainty, even if there is less potential for a big win.
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D. Restricted stock
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80. (p. 316) A ________ is designed to provide benefits of direct executive stock ownership.
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A. Restricted stock plan
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81. (p. 316) Restricted stock plans offer:
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C. No downside risk to executives
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82. (p.318) __________ represent a form of executive compensation where compensation is deferred.
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A. Golden handcuffs
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83. (p. 319) If the executive quits is fired or simply retires, he would be best protected by a _________, which is designed to retain talented executives.
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B. Golden parachute
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84. (p. 319) _______ are executive bonus compensation plans that focus on accounting measures of performance and are designed to offset the limitations of market-based measures of performance.
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D. Cash-based
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85. (p. 321) A firm with a strategic goal of growing the share price incrementally should implement a:
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C. Cash-based plan
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86. (p. 321) A firm with a strategic goal of reducing executive turnover would use _________ to provide an incentive for longer executive tenure.
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D. Golden handcuffs
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87. (p. 321) A firm seeking to globalize operations would use ________ as its bonus compensation plan.
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D. Stock options
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88. (p. 321) A firm with a strategic goal of streamlining operations should use ________ to reward the long-term focus on efficiency and cost control.
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A. Restricted stock plans
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89. How do short-term objectives help implement strategy?
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Please refer to the discussion titled "Short-Term Objectives," on pages 302-303.
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90. What are three important qualities of effective short-term objectives? Briefly describe each of these in your answer.
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Please refer to the discussion titled "Qualities of Effective Short-Term Objectives" on pages 303-304.
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91. What are functional tactics? Briefly describe them and provide one example of their use.
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Please refer to the discussion titled "Functional Tactics That Implement Business Strategies," on pages 304-305.
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92. In what three fundamental ways do functional tactics differ from business or corporate strategies? Briefly describe each.
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Please refer to the discussion titled "Differences between Business Strategies and Functional Tactics," on pages 305-308.
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93. What is outsourcing? What are the benefits and risks of outsourcing?
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Please refer to the discussion titled "Outsourcing Functional Activities" on pages 308-310.
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94. What does it mean to empower employees? How are policies related to the idea of empowerment?
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Please refer to the discussion titled "Empowering Operating Personnel: The Role of Policies," on pages 310-311.
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95. How can policies control decisions while defining allowable discretion in which operating personnel can execute business strategies? Describe several ways.
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Please refer to the discussion titled "Creating Policies That Empower," on pages 311-314.
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96. What are stock options? How do they motivate executives and key employees to achieve maximization of shareholder wealth?
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Please refer to the discussion titled "Stock options," on pages 314-317.
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97. What are restricted stock options? How do they motivate executives and key employees to achieve maximization of shareholder wealth?
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Please refer to the discussion titled "Restricted Stock" on page 317.
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98. What are golden handcuffs? How do they motivate executives and key employees to achieve maximization of shareholder wealth?
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Please refer to the discussion titled "Golden Handcuffs," on page 318.
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99. What are golden parachutes? How do they motivate executives and key employees to achieve maximization of shareholder wealth?
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Please refer to the discussion titled "Golden Parachutes," on pages 318-319.
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100. Briefly match the appropriate type of bonus compensation to the strategic goal being pursued. What is the rationale behind these match-ups?
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Please refer to the figure in the text titled "Exhibit 10.12, Compensation Plan Selection Matrix," on page 321.
