question

Behavioral controls are aspects of strategic change that involve finding the appropriate ______________ and ______________ among the culture, rewards, and boundaries of the firm.

answer

balance; alignment

question

The traditional approach to strategic control is sequential. Which of the following is not one of the steps in the sequence?

answer

Action plans are submitted by lower level managers.

question

Which of the following is the primary drawback of traditional strategic control systems?

answer

They lack the flexibility needed to adjust to changes in the environment.

question

For businesses facing complex and turbulent business environments, which of the following is true?

answer

Traditional strategic controls are usually inappropriate.

question

Contemporary approaches to strategic control rely primarily on _____________.

answer

double-loop learning

question

Informational control systems are concerned with which of the following?

answer

Is the organization doing the right things?

question

Continuous monitoring, in the contemporary approach, is beneficial because _____________.

answer

it reduces time lags

question

Which of the following is NOT one of the characteristics of a contemporary control system?

answer

It circumvents the need for face-to-face meetings among superiors, subordinates, and peers.

question

Top managers at ABC Company meet every Friday to review daily operational reports and year to date data. This is an example of _____________.

answer

informational control

question

As firms simultaneously downsize and face the need for increased coordination across organizational boundaries, a control system based primarily on ______________ is dysfunctional.

answer

boundaries and constraints

question

Which of the following is not an example of how organizational culture exerts behavioral control?

answer

Culture sets explicit boundaries.

question

The late Sam Walton, founder of Walmart, used to give pep rallies at local Walmart stores. What purpose did this serve?

answer

It helped reinforce and sustain the Walmart culture.

question

Which of the following is NOT one of the characteristics of reward and incentive systems?

answer

They represent a poor means of influencing the culture of an organization.

question

Individual rationality ______________ organizational rationality.

answer

does not always guarantee

question

When subcultures emerge that have shared values opposite from the dominant culture of an organization _____________.

answer

individuals begin working at cross purposes

question

Which of the following is not a characteristic of effective reward and incentive systems?

answer

The structure is fixed to assure employees of consistency.

question

Lack of a clear understanding of organizational goals and objectives is a probable cause of _____________.

answer

motivated self-interest

question

Effective boundaries and constraints _____________.

answer

minimize improper and unethical conduct

question

Effective short-term objectives should ______________ and _____________.

answer

be specific; measurable

question

Which of the following statements about action plans is true?

answer

Action plans must be specific so that managers will have a clear understanding of the resource requirements necessary to implement the plan.

question

Rules and regulations are examples of ______________ and _____________.�

answer

boundaries; constraints

question

The best way to minimize improper and unethical conduct is to ______________ and _____________.

answer

set boundaries; constraints

question

Which of the following approaches to behavioral strategic control would be the least appropriate for an organization in which there is a great need for innovation and a high degree of autonomy?

answer

rules

question

Most successful organizations minimize the need for explicit rules, regulations, and other boundaries by _____________.

answer

designing effective reward systems

question

Rule-based controls are least appropriate in organizations with which one of the following characteristics?

answer

Employees are highly skilled and independent.

question

Rules and regulations, rather than culture or rewards, would be used for strategic control at which type of company?

answer

manufacturer of mass produced products

question

Most organizations with strong cultures and a sound system of rewards and incentives can eventually internalize boundaries rather than use explicit rules and regulations. Which of the following is not a technique for moving in that direction?

answer

Minimize training and indoctrination.

question

The primary participants in corporate governance do not include _____________.

answer

the financial institutions

question

In order to minimize the temptation for managers to act in their own self-interest, governance mechanisms exist for implementation consideration. Which of the following is not a primary means for monitoring managerial behavior?

answer

a board of directors that acts in the best interests of shareholders to create short-term value

question

Individual and institutional shareholders have the same rights that include all except one of the following. Which one is not a shareholder right?

answer

the right to bring suit for damages, if the economy declines

question

Shareholders rely on CEOs to adopt policies and strategies that maximize the value of their shares. To motivate CEOs to maximize the value of their companies, boards of directors can consider all of the following options except one. Which one is it?

answer

Dismissal for poor performance is not an option.

question

Boards of directors have responded to financial crises, corporate scandals, regulator obligations, and investor requests for structural changes. In looking at the 2011 Harvard Business Review study of the changes in configuration of boards since 1987, which change has been brought about by government legislation?

answer

Percentage of the directors that are independent has increased.

question

CEO duality refers to a situation in which the _____________.

answer

CEO serves as both the CEO and the chair of the board of directors

question

In choosing sides concerning CEO duality, two schools of thought exist. Which of the following would not be a consideration for the Unity of Command school of thought?

answer

CEO duality slows down decision-making.

question

In choosing sides concerning CEO duality, two schools of thought exist. Which of the following would not be a consideration for the Agency Theory school of thought?

answer

Firm performance always is improved under CEO duality.

question

External governance control mechanisms include all of the following except _____________.

answer

competitors

question

In trying to assure that managerial actions lead to shareholder value maximization, a risk can come about if the market value of a firm becomes less than its book value. The risk is _____________.

answer

it becomes an attractive takeover target

question

The takeover constraint refers to _____________.

answer

the risk of being acquired by a hostile raider

question

It is generally argued that the takeover constraint deters management from _____________.

answer

engaging in opportunistic behavior

question

The failure of many auditing firms to raise red flags about accounting irregularities in companies such as Enron and WorldCom is generally attributed to all of the following factors except _____________.

answer

the failure of U.S. audit firms to hire technically qualified professionals

question

The reasons analyst recommendations are often more optimistic than warranted by an objective analysis of the facts include all of the following except that _____________.

answer

sell recommendations generate lower commissions than buy recommendations

question

All of the following are types of information that a firm is required to disclose except _____________.

answer

details of new products under development

question

In emerging economies and continental Europe, firms often can be characterized by all of the following except _____________.

answer

low family ownership and control

question

In principal-principal conflicts (conflicts between controlling shareholders and minority shareholders), the ownership (of equity) is _____________.

answer

concentrated

question

Conditions that must be met for principal-principal (PP) conflicts to occur include all of the following except _____________.

answer

legislation that protects the interests of minority shareholders

question

Expropriation of minority shareholders means that minority shareholders _____________.

answer

are adversely affected by the actions of controlling shareholders

question

In large organizations, a strategy of diversification requires a need to reorganize around ______________ or _____________.

answer

product lines; geographic markets

question

Which of the following is not a primary factor that a large firm with international operations should consider when choosing the appropriate structure for its organization?

answer

the degree of market diversity

question

When an organization with a simple structure increases its sales revenue and volume of outputs, it is most likely to develop a ______________ structure.

answer

functional

question

When an organization with a functional structure diversifies into related product-markets, it generally _____________.

answer

develops a divisional structure

question

A strategy of related diversification requires most firms to organize around geographical areas or product lines. This type of organizational growth leads to ______________ structure.

answer

a divisional

question

Which of the following statements about simple organizational structures is not true?

answer

Creativity and individualism are rare.

question

A simple structure is characterized by _____________.

answer

low specialization and high centralization

question

Functional structures are usually found in organizations where _____________.

answer

there is high volume production

question

Which of the following is an advantage of a functional type of organizational structure?

answer

C. Pooling of specialists enhances coordination and control.

question

56. Which of the following is a disadvantage of a functional type of organizational structure?

answer

A. Differences in functional orientation may impede communication and coordination.

question

57. Which of the following is an advantage of a divisional type of organizational structure?

answer

B. an enhanced ability to respond quickly to changes in the external environment

question

58. Which of the following is not a disadvantage of a divisional type of organizational structure?

answer

D. There is separation of strategic and operating control.

question

An organization such as ConAgra that has dozens of different divisions with similar products will probably have the greatest success with which form of organization structure?

answer

strategic business unit structure

question

Which of the following is not an advantage of a strategic business unit (SBU) type of organizational structure?

answer

The corporate office is more removed from the individual divisions.

question

Important advantages of a holding company structure include _____________.

answer

savings in personnel and overhead expenses associated with a small corporate office

question

Strategic business unit (SBU) and holding company structures result from extensive _____________.

answer

diversification

question

Strategic business unit (SBU) structures are best suited for corporations pursuing _____________, whereas holding company structures are best suited for companies with ______________ strategies.

answer

C. related diversification; unrelated diversification

question

A matrix organizational structure is characterized by a combination of the ______________ and _____________.

answer

functional structure; divisional structure

question

Complicated working relationships, intense power struggles, and excessive reliance on group processes are disadvantages of which type of organizational structure?

answer

matrix

question

Which of the following is considered to be an advantage of a matrix structure?

answer

increased responsiveness to the market

question

Generally speaking, discussions of the relationship between strategy and structure strongly imply that _____________.

answer

structure follows strategy

question

If an international firm has a multidomestic strategy and a relatively high level of product diversity, the best choice for its organizational structure is ______________ structure.

answer

a worldwide matrix

question

If an international firm has a global strategy and a relatively low level of product diversity, the best choice for its organizational structure is ______________ structure.

answer

a worldwide product division

question

The relationship between strategy and structure can be best described as _____________.

answer

strategy and structure influence each other

question

A global start-up faces many management challenges including _____________.

answer

communication and coordination across time zones

question

Which of the following is not a boundaryless organizational design?

answer

matrix

question

According to author, Jeffrey Pfeffer, which of the following is not an advantage of teams?

answer

Teams interact so closely and therefore coordination and integration becomes unnecessary.

question

Organizations are increasingly using teams for many reasons. The difference between a good team and an outstanding team has been found to be _____________.

answer

the way team members treat each other

question

Which of the following is NOT a disadvantage of the barrier-free form of organization?

answer

Additional integration issues result is a slower response to market changes.

question

What type of organization is defined as a central hub surrounded by networks of outside suppliers and specialists?

answer

modular organization

question

What is the name of the practice that many modular organization use to grow?

answer

outsourcing

question

What advantages does outsourcing not provide an organization?

answer

improved buyer positioning

question

Which of the following is NOT a strategic risk of outsourcing?

answer

loss of non-vital functions

question

Nike is a company that makes use of the concept of product expatriates. Product expatriates are _____________.

answer

managers of the company sent abroad to work at the plants of its suppliers

question

The phrase that best defines a virtual organization is _____________.

answer

a continually evolving network of independent companies

question

A virtual organization may be most appropriate for firms _____________.

answer

whose strategies require merging technologies

question

Virtual organizations ______________ whereas modular organizations _____________.

answer

give up part of their strategic control; retain full strategic control

question

Which of the following is not a disadvantage of virtual structures?

answer

difficulty in individual and organizational knowledge sharing

question

Coca-Cola, Ford Motor Company, H. J. Heinz, Nike, and Procter and Gamble are working together to develop plant-based plastics. Each company brings its own competency to the table. This collaboration is an example of a _____________.

answer

virtual organization

question

Organizations generally tend to become internally focused when faced with ______________ and _____________.

answer

resource scarcity; declining performance

question

If a firm outsources some parts of its value chain in order to reduce costs and increase quality and at the same time engages in multiple alliances to penetrate new markets, this is a example of a firm using a ______________ of organizational types.

answer

combination

question

Tools and techniques used to achieve effective coordination and integration of key activities in an organization include all of the following except _____________.

answer

horizontal diversification

question

Effective ambidextrous organizations have alignment, which means that _____________.

answer

there is a clear sense of how value is being created in the short-term and how activities are properly integrated and coordinated

question

Effective ambidextrous organizations maintain adaptability, which means that _____________.

answer

managers must remain proactive in expanding and/or modifying their product-market scope to anticipate and satisfy market conditions

question

According to the study by OReilly and Tushman, effective ambidextrous structures had all of the following attributes except _____________.

answer

managerial efforts were highly focused on revenue enhancement

question

Which of the following is an important characteristic of a leader?

answer

goal-oriented

question

Which of the following statements about leadership is not true?

answer

Leaders support the status quo and seek control mechanisms to maintain it.

question

Effective leadership is like a three-legged stool. Which of the following is not represented by one of the stool legs?

answer

dedication to maintaining the status quo

question

A strategic vision provides many benefits. Which of the following is not one of those benefits:

answer

diminished employee participation

question

Poor organizational design by leaders can result in all of the following except _____________.

answer

teams, systems, and organizational processes that facilitate implementation

question

The CEO scraps the company commission-based reward system, because it rewards employees for inappropriate behavior. This is an example of _____________.

answer

designing the organization

question

Leaders play a key role in developing and sustaining organization _____________.

answer

culture

question

Barriers in which the design of organization structure, information processing, and reporting relationships, impede the proper flow and evaluation of information are known as

answer

systemic barriers

question

Barriers associated with a managers tendency to look at issues from a biased or limited perspective are known as _____________.

answer

behavioral barriers

question

Refusal to share information, conflicts over resources, conflicts between departments and divisions, and petty interpersonal differences are symptoms of which type of barrier to change?

answer

political barriers

question

Which of the following does not explain why organizations are prone to inertia and slow to change?

answer

entry barriers

question

To overcome barriers to organizational change, companies work more collaboratively than in the past. In companies such as Microsoft, an important obstacle to effective collaboration is _____________.

answer

higher-level political battles

question

When faced with barriers to change, leaders can create a good climate for advancing the aims of the organization and making progress towards its goals by building ______________ and _____________.

answer

a learning organization; an ethical organization

question

Which of the following does not constitute organizational bases of leader power?

answer

referent power

question

The source of referent power is _____________.

answer

subordinate identification with the leader

question

Which of the following is not a part of the three broad sets of capabilities that a leader should possess?

answer

physical abilities

question

All of the following are components of emotional intelligence (EI) except _____________.

answer

self-promotion

question

Which component of emotional intelligence (EI) enables a manager to have a deep understanding of the existence and importance of cultural and ethnic differences?

answer

empathy

question

The following two components of emotional intelligence (EI) deal with personal ability to manage relationships with others.

answer

empathy and social skill

question

Which of the following is not a characteristic of a successful learning organization?

answer

It regularly engages in activities to reinforce the status quo.

question

Inspiring and motivating people with a mission or purpose is a ______________ for developing an organization that can learn and adapt.

answer

necessary, but not a sufficient condition

question

In order to create an environment where employees can achieve their potential as they move the organization towards its goals, the manager role needs to be that of _____________.

answer

a flexible resource

question

When important decisions need to be made at WBG Construction, CEO Greg Burrill asks all employees with relevant knowledge or a stake in the outcome for their thoughts. This collaborative approach recently led to a decision that not only sold a house but also inspired a new floor plan that appealed to a whole new segment of buyers. This is an example of _____________.

answer

employee empowerment

question

Functional benchmarking _____________.

answer

endeavors to determine best practices regardless of industry

question

Which of the following is not a guideline an organization can use to promote the challenging of the status quo?

answer

creating a results-based reward system

question

Companies that cultivate cultures of experimentation and curiosity make sure that ______________ is not, in essence, to be avoided at all costs.

answer

failure

question

Which of the following statements about ethics is not true?

answer

Ethics is not concerned with whether or not an act is socially desirable.

question

As a manager, when faced with ethical crises you should _____________.

answer

take the initiative to address the problem

question

Which of the following statements about ethical organizations is not true?

answer

The potential benefits of an ethical organization are few but direct.

question

Proactive measures to prevent organizational ethics problems do not include _____________.

answer

instituting a reward system which considers outcomes as its primary criterion

question

Which of the following statements would least likely be found in a corporate credo?

answer

maximize financial benefits for stakeholders at any cost

question

______________ refers to efforts to create designs and applications of technology to develop new products, while ______________ refers to efforts to improve the efficiency of organizational systems such as manufacturing and operations.

answer

Product innovation; process innovation

question

Whereas ______________ are often associated with a low cost leader strategy, ______________ are frequently an important aspect of a differentiation strategy.

answer

process innovations; product innovations

question

Incremental innovations _____________.

answer

are usually small improvements in products and processes

question

Radical innovations _____________.

answer

often represent technological breakthroughs

question

______________ produce fundamental changes that can transform a company or even revolutionize an industry, while ______________ enhance existing practices and often represent evolutionary applications of fundamental breakthroughs.

answer

Radical innovations; incremental innovations

question

Innovations that extend sales in an existing market, usually by enabling new products or services to be sold at higher margins are known as _____________.

answer

sustaining innovations

question

Which of the following is not characteristic of a disruptive innovation?

answer

It is usually more sophisticated technologically

question

Which of the following is not a dilemma faced by corporations trying to manage the innovation process?

answer

emphasizing marketing over management innovations

question

The innovation dilemma known as building capabilities versus collaborating refers to _____________.

answer

developing innovation skills internally versus partnering with qualified outsiders

question

The innovation dilemma known as seeds versus weeds refers to _____________.

answer

choosing to pursue investment in one innovative idea over another

question

Creative intelligence involves the ability to see patterns in data, integrating data, and making insights. Which of the following are the four patterns of action managers should take in order to develop more creative and higher potential innovations?

answer

questioning, observing, experimenting, and networking

question

Individuals with highly innovative DNA traits have the ability to connect seemingly unrelated questions, problems, and ideas from different fields that allows them the opportunity to creatively see opportunities others miss. This is referred to as _____________.

answer

associating

question

In the 1990s, DuPont used its knowledge of plastics to develop biodegradable plastic products. This is an example of _____________.

answer

defining its innovation efforts within the context of its strategic envelope

question

Which of the following is not an advantage of collaborating with strategic partners in order to innovate?

answer

decreasing economies of scale

question

McGrath and Keil researched the types of human resource management practices that effective firms use to capture value from their innovation efforts. Which of the following is not one of their findings?

answer

Integrate the performance of individuals with the performance of the innovation.

question

In a typical corporation, which of the following factors does not determine how entrepreneurial projects will be pursued?

answer

number of innovation projects in the pipeline

question

Two common forms of a focused approach to corporate entrepreneurship include ______________ and _____________.

answer

business incubators; new venture groups

question

According to the text, _____________, which support fledgling startups are often used to pursue specific entrepreneurial ventures developed by _____________.

answer

business incubators; new venture groups

question

Which of the following do corporate business incubators typically not provide?

answer

student interns

question

Which of the following is not part of a culture of entrepreneurship?

answer

Only those directly involved in the innovation effort are attuned to new opportunities to create business.

question

Common features of a dispersed approach to corporate entrepreneurship include all of the following except _____________.

answer

semi-autonomous new venture groups

question

In corporations with a strong entrepreneurial culture, the willingness and ability to change _____________.

answer

is considered a core capability

question

Product champions _____________.

answer

scavenge for resources and encourage others to back promising new ideas

question

Project ______________ involves justifying whether an opportunity is attractive in the marketplace; project ______________ involves evaluating the strategic and economic impact of a new venture.

answer

definition; impetus

question

On average, approximately what percentage of corporate ventures reaches profitability within six years?

answer

50 percent

question

Financial reasons for undertaking internal corporate venturing include _____________.

answer

obtaining above average returns

question

Strategic reasons for undertaking a corporate venture do not include _____________.

answer

reducing stakeholder commitment

question

One of the following is not a question that should be answered when evaluating the performance of corporate venturing efforts. Which is it?

answer

Is the venture attracting external venture funding?

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