Question 1

When a company uses outsourcing to zero in on even better performance of those truly strategy-critical activities where its expertise is most needed,then it may also be able to:
A) create a values-based corporate culture that excels in product innovation.
B) decrease internal bureaucracies,flatten its organizational structure,shorten the time it takes to respond to changing market conditions,and capitalize on its partnerships with outsiders to enhance its arsenal of capabilities and thus contribute to better strategy execution.
C) devote more resources to its social responsibility strategy,better empower employees,and reduce employee turnover.
D) better police compliance with ethical standards,lower overall operating costs,and create two or more distinctive competencies.
E) All of these.

Accepted Answer

Outsourcing can lead to decreased internal bureaucracies, flattened organizational structure, quicker response time to changes in the market, and enhancing its capabilities through partnerships with outsiders. This can ultimately contribute to better strategy execution. While outsourcing can indirectly impact some of the other choices, none of them directly relate to outsourcing the way that B does.

Question 2

Which one of the following is NOT a reason why companies might use outsourcing to improve performance of strategy-critical activities?
A) Improving a company's chances for outclassing rivals in the performance of strategy-critical activities and turning a core competence into a distinctive competence.
B) Promoting quick establishment of a total quality culture.
C) Speeding internal decision making and shortening the time it takes to respond to changing market conditions.
D) Capitalizing on the partnerships with outsiders to enhance its arsenal of capabilities and thus contribute to better strategy execution.
E) Helping decrease internal bureaucracies and flatten the organizational structure.

Accepted Answer

Promoting quick establishment of a total quality culture is not a reason why companies might use outsourcing to improve performance of strategy-critical activities. The other options (A, C, D, and E) are all legitimate reasons for outsourcing.

Question 3

In order to coordinate and control the complex set of activities,managers must ensure:
A) the organizational structure enables bureaucratic waste and strives for eliminating imposed capacity limitations of the strategy.
B) the various parts of the organizational structure are aligned with one another and also matched to the requirements of the strategy.
C) they have enough employees dedicated to the various functions to ensure economies of scale benefits.
D) they can orchestrate the process with forceful administration and political maneuvering.
E) All of these.

Accepted Answer

Ensuring that the various parts of the organizational structure are aligned with each other and also matched to the requirements of the strategy is essential for effective coordination and control of activities. Option A is incorrect because it suggests unnecessary bureaucracy and does not address alignment with strategy. Option C is only relevant for certain situations and does not apply universally. Option D is not a desirable approach as it can lead to negative consequences such as high employee turnover and low morale. Therefore, option B is the best choice.

Question 4

The strategic importance of deliberately trying to develop organizational competencies and capabilities is:
A) lower costs for employee training.
B) improved strategy execution and a potential for competitive advantage.
C) an increased ability to reduce total operating costs.
D) the added ease with which strategic fit and resource fit benefits can be captured.
E) the enhanced ability to avoid the perils of outsourcing.

Accepted Answer

Deliberately developing organizational competencies and capabilities can lead to improved execution of the organization's strategies and potentially provide a competitive advantage. This is because having specialized skills, knowledge, and resources that are difficult for competitors to imitate can create a unique value proposition for customers and position the organization in a favorable position in the market.

Question 5

When are capabilities-motivated acquisitions essential?
A) When industry conditions,like technology advances are central to growth and rivalry is intense.
B) When first-mover advantages for products or services can be added to the portfolio lineup.
C) When the acquired firm can be purchased at a discount due to underperformance.
D) When a market opportunity can slip by faster than a needed capability can be created internally.
E) When the capabilities involve tacit knowledge and complex routines.

Accepted Answer

The answer of When are capabilities-motivated acquisitions essential?
A) When industry...

Question 6

Which one of the following statements about outsourcing the performance of value chain activities to outside specialists is false?
A) Outsourcing support services often has cost-saving benefits but outsourcing primary value chain activities has the disadvantages of raising fixed costs,reducing variable costs,and making it harder to develop distinctive competencies.
B) Outsourcing critics contend that shifting responsibility for performing value chain activities to outside specialists can hollow out a company's knowledge base and capabilities,leaving it at the mercy of outsider suppliers,and short of the resource strengths to be a master of its own destiny.
C) Outsourcing the performance of certain value chain activities to able suppliers can add to a company's arsenal of capabilities and contribute to better strategy execution.
D) The real debate surrounding outsourcing is not about whether too much outsourcing risks loss of control but about how to use outsourcing in a manner that produces greater competitiveness.
E) Outsourcing can enable a company to heighten its strategic focus and concentrate its full energies and resources on even more competently performing those value chain activities that are at the core of its strategy and for which it can create unique value.

Accepted Answer

Outsourcing primary value chain activities does not necessarily raise fixed costs or make it harder to develop distinctive competencies. It may, however, reduce variable costs if done properly. Therefore, statement A is false.

Question 7

What is the rule for organizing the work effort to support good strategy execution?
A) A firm's organizational structure should be matched to its unique strategy.
B) Decide on how much to spend on training managers and employees.
C) Choose an organization structure that is a tight fit with the corporate culture.
D) Ensure the firm hires a capable management team.
E) All of these.

Accepted Answer

The rule for organizing the work effort to support good strategy execution is that a firm's organizational structure should be matched to its unique strategy. This means that the company's structure should enable effective execution of the chosen strategic approach. The structure should be designed to support the key capabilities required of the strategy, and the organization's resources and assets should be aligned accordingly.

Question 8

To organize the work effort around the needs of good strategy execution,management needs to:
A) make those strategy-critical activities/capabilities that are to be performed internally the main building blocks in the internal organization structure.
B) determine whether some value chain activities can be outsourced more efficiently or effectively than they can be performed internally.
C) decide how much authority to centralize at the top and how much to delegate to down-the-line managers and employees.
D) provide for coordination and collaboration across the various organizational units and also with outside partners.
E) All of these.

Accepted Answer

All of these options are essential steps that management needs to take in order to organize the work effort around the needs of good strategy execution. Making strategy-critical activities/capabilities the main building blocks of the internal organization structure ensures that the necessary resources and attention are allocated to these activities. Determining whether some value chain activities can be outsourced more efficiently or effectively offers opportunities for cost savings and enhanced performance. Deciding how much authority to centralize at the top and how much to delegate to down-the-line managers and employees ensures efficient decision-making and effective execution. Providing for coordination and collaboration across organizational units and with outside partners ensures that the organization can work cohesively towards strategy execution. Therefore, all of these are necessary steps for organizing the work effort around the needs of good strategy execution.

Question 9

When it is difficult or impossible to out-strategize rivals (beat them with a superior strategy),the other main avenue to competitive advantage is to:
A) do a better job of empowering employees and flattening the organization structure.
B) outcompete rivals with a stronger corporate culture.
C) out execute them (beat them by performing certain value chain activities in superior fashion).
D) beat them with a healthy corporate culture based on such core values as high ethical standards,a strong sense of corporate social responsibility,and genuine concern for customer well-being.
E) institute a more motivating and cost-efficient compensation and reward system.

Accepted Answer

When it is difficult or impossible to out-strategize rivals, the other main avenue to competitive advantage is to out execute them by performing certain value chain activities in superior fashion. This can be achieved by improving operational effectiveness and efficiency, reducing costs, and improving quality, speed, and flexibility. Therefore, option C is the best choice.

Question 10

Outsourcing critics contend that shifting responsibility for performing value chain activities to outside specialists:
A) has the disadvantage of raising fixed costs and reducing variable costs and makes it harder to develop distinctive competencies.
B) can hollow out a company's knowledge base and capabilities,leaving it at the mercy of outsider suppliers,and short of the resource strengths to be a master of its own destiny.
C) results in less organizational flexibility and leads to sometimes exorbitant costs in collaborating with outside suppliers and strategic partners.
D) slows down decision making on key strategic issues because outside suppliers have to be consulted first.
E) lowers the morale of company employees,dampens a company's ability to implement best practices,and results in greater bureaucracy and slower decision making.

Accepted Answer

Outsourcing can lead to a loss of core competencies and knowledge within the company, making it reliant on external suppliers. This can leave a company vulnerable and at the mercy of these suppliers, limiting its ability to control its own destiny.

Question 11

What is the advantage of acquiring capabilities through merger and acquisition?
A) Speed,since developing new capabilities internally can take many years of effort.
B) Empowerment,since you can capture the essence of the capability and refocus the firm.
C) Price,as it is always cheaper to buy a whole company and pull out the capabilities individually.
D) Assets,as it the basis of the sale.
E) All of these.

Accepted Answer

Acquiring capabilities through merger and acquisition can save time as developing new capabilities internally can take many years of effort.

Answer: B
 Acquiring capabilities through merger and acquisition can allow a firm to capture the essence of the capability and refocus the firm, which can result in empowerment.

Therefore, the best choices are A and B.

Question 12

Which one of the following is NOT part of organizing the work effort in ways that promote successful strategy execution?
A) Facilitating collaboration with external partners and strategic allies.
B) Providing for cross-unit coordination and deciding which value chain activities to perform in-house and which ones to outsource.
C) Determining how much authority to centralize at the top and how much to delegate to down-the-line managers and employees.
D) Determining which functions and organizational units require superior intellectual capital.
E) Maintaining expertise and resource depth in performing those internally strategy-critical value chain activities that underpin its long-term competitive success and provide for the main building blocks in the organization structure.

Accepted Answer

Determining which functions and organizational units require superior intellectual capital is more about talent management and human resources strategy rather than organizing work effort for strategy execution.

Question 13

Organizing a company's work effort to promote successful strategy execution involves:
A) deciding how much to spend on training managers and employees.
B) deciding which value chain activities to perform in-house and which to outsource,and making internally performed strategy-critical value chain activities the main building blocks in the organization structure.
C) choosing an organization structure that is a tight fit with the corporate culture.
D) hiring a capable management team.
E) instituting a compensation structure that reduces employee turnover and thus stabilizes the makeup of work teams.

Accepted Answer

Organizing the work effort to promote successful strategy execution involves making internally performed strategy-critical value chain activities the main building blocks in the organization structure. This helps the organization to streamline its operations and create a structure that is in line with its strategic goals. Other choices may also be important, but they are not directly related to organizing the company's work effort.

Question 14

Sometimes a company can short-circuit the task of building an organizational capability in-house by:
A) putting in high-incentive bonuses to reward individual employees who train hard to develop the desired capability.
B) launching an extensive training effort to develop the capability quickly with newly hired employees.
C) either acquiring a company that has already developed the capability or else acquiring the desired capability through collaborative efforts with outsiders having the requisite skills,know-how,and expertise.
D) using benchmarking and the adoption of best practices to imitate a capability that rivals have already developed.
E) empowering a team of employees to develop the capability however they best fit.

Accepted Answer

Acquiring a company that has already developed the desired organizational capability or collaborating with outsiders who already have the skills and expertise can help a company rapidly acquire the capability without the need to invest significant resources in building it in-house. This can also help the company gain a competitive advantage by quickly adding value to their offerings. Option A may not be as effective since it focuses on individual incentives rather than building a broader capability across the organization. Option B could be time-consuming and may not guarantee the desired results. Option D may be helpful but may not work in all cases. Option E may not be efficient since it relies on a team to develop the capability, which may take longer than necessary.

Question 15

Outsourcing value chain activities has such strategy executing advantages as:
A) less internal bureaucracy,speedier decision making,quicker responses to changing market conditions,and heightened focus on performing a select few value chain activities (which can improve performance of those activities).
B) facilitating the empowerment of employees (because there are fewer things to do internally).
C) promoting a total quality management culture.
D) reducing the need to establish a strongly implanted corporate culture.
E) reducing the strategic importance of building valuable core competencies.

Accepted Answer

Outsourcing value chain activities can help a company reduce internal bureaucracy and focus on performing select activities, leading to quicker responses to changing market conditions and improved performance in those activities. This can enhance the company's ability to execute its strategy. The other options are not necessarily inherent advantages of outsourcing value chain activities.

Question 16

A firm's organizational structure is comprised of:
A) resource strengths and competitive capabilities that allow it to incorporate attributes at lower costs than rivals whose products have similar attributes.
B) the formal and informal arrangement of tasks,responsibilities,lines of authority,and reporting relationships by which the firm is administered.
C) excellent marketing and sales skills to convince buyers to pay a premium price for the attributes/features incorporated in its product.
D) sustainable distinctive competences to ensure cost reduction and competitiveness.
E) None of these.

Accepted Answer

Organizational structure refers to the formal and informal arrangement of tasks, responsibilities, lines of authority, and reporting relationships by which the firm is administered. Option A refers to the firm's capabilities, Option C pertains to marketing and sales skills, and Option D refers to distinctive competences, which are separate concepts from organizational structure. Option E is incorrect as one of the provided options must be correct.

Question 17

Accessing capabilities through an external source can be accomplished through:
A) outsourcing,but depends on what can safely be delegated to outside suppliers.
B) joint ventures,which depend on how well the partners will work together.
C) strategic alliances,which should be selected as much for management style,culture,and goals as for their resources and capabilities.
D) learning-based collaborative partnerships for the purpose of learning how the partner does things,internalizing its methods,and thereby acquiring its capabilities.
E) All of these.

Accepted Answer

All of the options mentioned (outsourcing, joint ventures, strategic alliances, and learning-based collaborative partnerships) can be used to access capabilities through an external source. Each of these options has its own benefits and risks, and the best choice depends on the specific situation and the goals of the organization. Therefore, using a combination of these methods may be the most effective approach.

Question 18

In which one of the following instances is the training and retraining of employees likely to make the LEAST important contribution to good strategy execution?
A) When a company shifts to a strategy requiring different skills,competitive capabilities,managerial approaches,and operating methods.
B) When an organization is striving to build skills-based competencies.
C) When technical know-how is changing so rapidly that a company loses its ability to compete unless its skilled people have cutting-edge knowledge and expertise.
D) When the chosen strategy calls for a deeper technological capability or building and using new capabilities.
E) When the strategy execution effort is based on tried-and-true operating practices that vary little from year to year.

Accepted Answer

In a scenario where the strategy execution effort is based on tried-and-true operating practices that vary little from year to year, the training and retraining of employees are likely to make the least important contribution to good strategy execution. This is because the operating practices are already well-established, and employees would have already been trained to perform their tasks efficiently. Thus, further training would not yield much improvement in strategy execution.

Question 19

Superior strategy execution capabilities are the only source of sustainable competitive advantage:
A) when strategies are easy for rivals to copy.
B) because such capabilities are socially complex and develop with experience over long periods of time and thus are hard to mimic.
C) because there is no substitute for superior strategy execution.
D) when the only way to achieve success is to ensure the firm out-executes its competitors.
E) All of these.

Accepted Answer

The answer of Superior strategy execution capabilities are the only...

Question 20

Outsourcing value chain activities to strategic partners can yield such advantages as:
A) quick creation of distinctive competencies,enhanced product quality,and better customer service.
B) lower costs,less internal bureaucracy,speedier decision making,more flexibility,and heightened strategic focus.
C) lower cost adoption of best practices.
D) a reduced need to empower employees and rely on team-based organizational arrangements.
E) facilitating the capture of cross-functional strategic fits and resource fits.

Accepted Answer

Outsourcing value chain activities to strategic partners can help lower costs, reduce internal bureaucracy, speed up decision making, provide more flexibility, and enhance strategic focus. These advantages can improve the overall efficiency and effectiveness of the organization. However, the other answer choices are either incorrect (such as D) or only partially represent the benefits of outsourcing (such as A and E).

Quiz 10: Building an Organization Capable of Good Strategy Execution: People, Capabilities, and Structure

When a company uses outsourcing to zero in on even better performance of those truly strategy-critical activities where its expertise is most needed,then it may also be able to:

Which one of the following is NOT a reason why companies might use outsourcing to improve performance of strategy-critical activities?

In order to coordinate and control the complex set of activities,managers must ensure:

The strategic importance of deliberately trying to develop organizational competencies and capabilities is:

When are capabilities-motivated acquisitions essential?

Which one of the following statements about outsourcing the performance of value chain activities to outside specialists is false?

What is the rule for organizing the work effort to support good strategy execution?

To organize the work effort around the needs of good strategy execution,management needs to:

When it is difficult or impossible to out-strategize rivals (beat them with a superior strategy) ,the other main avenue to competitive advantage is to:

Outsourcing critics contend that shifting responsibility for performing value chain activities to outside specialists:

What is the advantage of acquiring capabilities through merger and acquisition?

Which one of the following is NOT part of organizing the work effort in ways that promote successful strategy execution?

Organizing a company's work effort to promote successful strategy execution involves:

Sometimes a company can short-circuit the task of building an organizational capability in-house by:

Outsourcing value chain activities has such strategy executing advantages as:

A firm's organizational structure is comprised of:

Accessing capabilities through an external source can be accomplished through:

In which one of the following instances is the training and retraining of employees likely to make the LEAST important contribution to good strategy execution?

Superior strategy execution capabilities are the only source of sustainable competitive advantage:

Outsourcing value chain activities to strategic partners can yield such advantages as: