Question 1

The guidelines for designing an incentive compensation system that will help drive successful strategy execution include:
A) making the performance payoff tiered,based on the actual performance level achieved (that is,for meeting or beating performance targets a major,not minor,piece of the total compensation package).
B) having incentives that apply to the management team (employees should generally not be included in incentive pay plans but should have attractive wages and salaries).
C) having an outside wage and salary expert administer the system so there is no doubt as to its fairness and impartiality.
D) basing the incentives on group performance rather than individual performance.
E) making minimal use of non-monetary incentives and rewarding people for diligently performing their assigned duties.

Accepted Answer

Tiered compensation systems provide a greater reward for achieving higher levels of performance, which can motivate employees to strive for better results.

Answer: D 
 Group-based incentives can encourage collaboration and teamwork, which can be important for achieving strategic goals.

Answer: E 
 Non-monetary incentives, such as recognition programs or opportunities for growth and development, can be valuable for motivating employees to perform to the best of their abilities. Additionally, employees should be rewarded for performing their assigned duties well, as this is the foundation for achieving overall success.

Therefore, the best choices are A, D, and E.

Question 2

Give three examples of support systems that a company can install to support the execution of its strategy.

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Question 3

What is the role of budgets and resource allocation in successfully implementing and executing strategy? Why does a company's budget need to be closely linked to the needs of good strategy execution?

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Question 4

What is the difference between Six Sigma DMAIC programs and Six Sigma DMADV programs?

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Question 5

Identify and describe ways that policies and procedures facilitate strategy execution.

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Question 6

Discuss how the Six Sigma process of define,measure,analyze,improve,and control (DMAIC)works.What is the logic underlying the DMAIC process?

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Question 7

A well-designed reward system:
A) ties rewards to performance outcomes directly linked to good strategy execution and the achievement of financial and strategic objectives.
B) should be free of elements that induce stress,anxiety,tension,pressure to perform,and job insecurity.
C) puts the primary emphasis on denying rewards to those who fail to perform tasks in the prescribed fashion.
D) emphasizes weeding out employees who are consistently low performers.
E) strives for a 50-50 balance between positive and negative rewards and a 50-50 balance between monetary and non-monetary rewards.

Accepted Answer

A well-designed reward system should be directly linked to performance outcomes that align with the organization's strategic objectives and financial goals. This helps to ensure that employees are incentivized to work towards achieving these goals, and that the organization is able to achieve the desired outcomes. Therefore, choice A is the best choice.

Question 8

What action steps can managers take to build a total quality culture and instill a strong commitment to continuously improving how strategy is being executed?

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Question 9

While Six Sigma programs often improve the efficiency of many operating activities and processes,there is evidence that innovation can be stifled by Six Sigma programs.True or false? Explain.

Accepted Answer

Despite its potential benefits, Six Sigma is not without its problems. There is evidence, for example, that Six Sigma techniques can stifle innovation and creativity. The essence of Six Sigma is to reduce variability in processes, but creative processes, by nature, include quite a bit of variability. In many instances, breakthrough innovations occur only after thousands of ideas have been abandoned and promising ideas have gone through multiple iterations and extensive prototyping.

Question 10

Which of the following is NOT characteristic of a compensation and reward system designed to help drive successful strategy execution?
A) Tying incentives to performance outcomes directly linked to good strategy execution and financial performance.
B) Keeping the time between achieving the target performance outcome and the payment of the reward as short as possible.
C) Making sure that the performance targets that each individual or team is expected to achieve involve outcomes that the individual or team can personally affect.
D) Generous rewards for people who turn in outstanding performances.
E) A reward system that involves high (say 50 percent of base salary)non-monetary rewards and a work environment that avoids placing pressure on managers and employees to perform at high levels.

Accepted Answer

A compensation and reward system designed to help drive successful strategy execution would not involve high non-monetary rewards as the primary focus is on financial performance and outcomes directly linked to good strategy execution. Additionally, a work environment that avoids placing pressure on managers and employees to perform at high levels would not incentivize and motivate individuals to drive successful strategy execution.

Question 11

What is the value of total quality management from a strategy-executing standpoint? How does TQM differ from business process reengineering?

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Question 12

Explain what Six Sigma quality control programs are all about and how their use can contribute to a company's strategy execution effort.

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Question 13

Company strategies cannot be implemented or executed well without a number of real-time state-of-the-art support and control information systems to carry out business operations.Discuss the benefits and give examples of real-time systems by industry?

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Question 14

The first principle in designing an effective compensation system and the most dependable way to keep people focused on strategy execution and the achievement of performance targets is to:
A) establish ethical compensation policies and convince employees that they are the firm's most valuable competitive asset.
B) design monetary and non-monetary incentives that boost labor productivity and help lower the firm's overall labor costs.
C) generously reward and recognize people who meet or beat performance targets and to deny rewards and recognition to those who don't.
D) pay employees a bonus for each strategic and financial objective that the company achieves.
E) allow employees to propose what rewards they would like to receive to achieve the company's stretch objectives.

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Question 15

The resolute standard for judging whether individuals,teams,and organizational units have done a good job must be measured by:
A) comparing industry performance standards against the company's own internal criteria.
B) the level of rapid growth in industry (buyer)demand.
C) whether they meet or beat performance targets that reflect good strategy execution.
D) the number of rivals existing in the marketplace and their growth results.
E) the relative competitive strengths of the industry leaders and how vulnerable they are to mimicry.

Accepted Answer

The best standard for judging whether individuals, teams, and organizational units have done a good job is whether they meet or beat performance targets that reflect good strategy execution. This ensures that the focus remains on effective strategy execution rather than external factors like industry growth, the number of rivals, or the competitive strengths of industry leaders. Comparing industry performance standards against the company's own internal criteria may be helpful in setting performance targets, but it does not provide a clear standard for evaluating performance. Similarly, rapid growth in industry demand may be a positive indicator, but it does not necessarily reflect good strategy execution.

Question 16

An important consideration in designing a strategy-supportive reward system is to:
A) link the payment of all monetary rewards to the company's bottom-line profitability.
B) employ incentives that will help motivate employees to put in long hours and sacrifice personal ambitions and aspirations to pursue the priorities of management.
C) choose those types of rewards and incentives that will focus employees' attention on total customer satisfaction.
D) make across-the-board wage and salary increases the cornerstone of monetary rewards.
E) make non-monetary rewards and recognition an integral part of the reward system.

Accepted Answer

Non-monetary rewards and recognition can be just as powerful, if not more so, than monetary rewards in motivating employees. A reward system that includes creative and meaningful non-monetary incentives can help promote employee engagement, productivity, and satisfaction without placing undue emphasis on financial gain.

Question 17

Which of the following is NOT a sound guideline for designing a reward and incentive system that helps promote good strategy execution?
A) The reward system must be administered with scrupulous objectivity and fairness.
B) The payoff for meeting or beating performance targets must be a major,not minor,piece of the total compensation package.
C) The incentive plan should extend to all managers and all employees,not just top management.
D) The reward system must reward non-performers who,despite expending tremendous effort,have not fared well in achieving the benchmarks under the incentive system.
E) Make sure that the performance targets each individual or team is expected to achieve involve outcomes that the individual or team can personally affect.

Accepted Answer

Rewarding non-performers would not promote good strategy execution as it would not align with the incentive to achieve performance targets. The reward system should be designed to incentivize and reward high performers, not those who do not meet the benchmarks.

Question 18

Motivational and incentive compensation practices that aim at winning the commitment of company personnel to good strategy execution typically:
A) use only positive rewards and never involve the use of tension,fear,job insecurity,stress,or anxiety.
B) entail decidedly positive rewards for meeting or beating performance targets,but also impose sufficiently negative consequences when actual performance falls short of the target.
C) aim at creating a no-pressure/no-adverse-consequences work environment.
D) entail paying the highest wages and salaries in the industry for all jobholder positions and also stressing non-monetary rewards,like cash bonuses for high-performing employees.
E) put top priority on making employees happy and secure in their jobs.

Accepted Answer

Motivational and incentive compensation practices that aim at winning the commitment of company personnel to good strategy execution usually involve positive rewards for meeting or exceeding performance targets, but also include negative consequences when actual performance falls short of the target. This approach creates a sense of urgency and accountability that is necessary for effective strategy execution. It also ensures that employees are motivated to perform well, while also being aware of the consequences of poor performance. Option A is incorrect as it is not always feasible to use only positive rewards. Option C and E are incorrect as some pressure and consequences are needed for strategy execution. Option D is incorrect as paying the highest wages and salaries for all job positions is not always feasible and may not be effective in motivating employees.

Question 19

It is often said that competent strategy execution entails unyielding managerial commitment to best practices and continuous improvement.Why does this make good strategic sense?

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Question 20

What three principles underlie the statistical thinking of Six Sigma quality control programs?

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Quiz 11: Managing Internal Operations: Actions That Promote Good Strategy Execution

The guidelines for designing an incentive compensation system that will help drive successful strategy execution include:

Give three examples of support systems that a company can install to support the execution of its strategy.

What is the role of budgets and resource allocation in successfully implementing and executing strategy? Why does a company's budget need to be closely linked to the needs of good strategy execution?

What is the difference between Six Sigma DMAIC programs and Six Sigma DMADV programs?

Identify and describe ways that policies and procedures facilitate strategy execution.

Discuss how the Six Sigma process of define,measure,analyze,improve,and control (DMAIC)works.What is the logic underlying the DMAIC process?

A well-designed reward system:

What action steps can managers take to build a total quality culture and instill a strong commitment to continuously improving how strategy is being executed?

While Six Sigma programs often improve the efficiency of many operating activities and processes,there is evidence that innovation can be stifled by Six Sigma programs.True or false? Explain.

Which of the following is NOT characteristic of a compensation and reward system designed to help drive successful strategy execution?

What is the value of total quality management from a strategy-executing standpoint? How does TQM differ from business process reengineering?

Explain what Six Sigma quality control programs are all about and how their use can contribute to a company's strategy execution effort.

Company strategies cannot be implemented or executed well without a number of real-time state-of-the-art support and control information systems to carry out business operations.Discuss the benefits and give examples of real-time systems by industry?

The first principle in designing an effective compensation system and the most dependable way to keep people focused on strategy execution and the achievement of performance targets is to:

The resolute standard for judging whether individuals,teams,and organizational units have done a good job must be measured by:

An important consideration in designing a strategy-supportive reward system is to:

Which of the following is NOT a sound guideline for designing a reward and incentive system that helps promote good strategy execution?

Motivational and incentive compensation practices that aim at winning the commitment of company personnel to good strategy execution typically:

It is often said that competent strategy execution entails unyielding managerial commitment to best practices and continuous improvement.Why does this make good strategic sense?

What three principles underlie the statistical thinking of Six Sigma quality control programs?