Deck 4: The Competitive Environment

Question 1

In the context of M-form organizations, the primary function of the corporate-level HR department is to:

A) facilitate synergy across businesses.
B) help the top management in constructing basic functional departments.
C) motivate employees to attain organizational goals.
D) gain a sustained competitive advantage over competitors.

Answer 1

A

Question 2

Employees are potentially an excellent source of competitive advantage for an organization because:

A) they cannot refuse to follow the commands of the top executives of the organization.
B) they are difficult to copy or replace.
C) they formulate the organization's purpose and mission statement.
D) they cannot be hired by the competitors of the organization.

Answer 2

B

Question 3

Regardless of the specific organization design, in recent years many firms have been:

A) taking a hierarchical approach to organizational control.
B) increasing the number of levels of management.
C) increasing bureaucracy.
D) moving toward becoming flat organizations.

Answer 3

D

Question 4

A company that attempts to develop an image or reputation for its product or service that sets the company apart from its competitors most likely uses a _____.

A) diversification strategy
B) differentiation strategy
C) stability strategy
D) defender strategy

Question 5

Corporate strategies deal with how a firm will compete in each market where it conducts business.

Question 6

A key challenge for HR managers with firms using a retrenchment strategy is recruiting and training the large numbers of qualified employees.

Question 7

A prospector strategy works best when a business operates in an environment with relatively little uncertainty and risk and high stability.

Question 8

Which of the following strategies is frequently used by organizations after a period of retrenchment?

A) Related diversification
B) Unrelated diversification
C) A stability strategy
D) A turnaround strategy

Question 9

In the context of a turnaround strategy, the role of human resource managers is to:

A) help optimize the transition process for displaced workers through outplacement counseling.
B) decide how to retain existing employees when the firm cannot offer salary increases or promotions.
C) look for new avenues for geographic and brand expansion of the firm.
D) recruit employees based on intuition rather than using systematic selection techniques.

Question 10

If an organization uses a differentiation strategy, performance management must be focused on recognizing and rewarding performance leading to improved quality.

Question 11

A cost leadership strategy allows a firm to charge the highest possible prices for its products.

Question 12

In the context of the strategic alternatives of the adaptation model, which of the following strategies is assumed to work best when a business operates in an environment with relatively little uncertainty and risk and a high degree of stability?

A) A defender strategy
B) The prospector strategy
C) The analyzer strategy
D) A turnaround strategy

Question 13

Which of the following terms refers to the relatively stable set of psychological attributes or traits that distinguish one person from another?

A) Personality
B) Attitude
C) Motivation
D) Reinforcement

Question 14

Which of the following statements is true of a mission statement?

A) It specifies the basic reason for the existence of an organization.
B) It attempts to identify the weaknesses of an organization and the threats that it is likely to face.
C) It often provides subtle cues about the importance that an organization places on its human resources.
D) It always signals an organization's true priorities.

Question 15

A company that adopts a stability strategy plans to expand into new products or markets and intends to manage them by adopting the strategies used for managing its current businesses.

Question 16

The top management team of a firm needs to consult with the human resource management (HRM) team before deciding to pursue a growth strategy.

Question 17

The top management team of a company includes the chief operating officer (COO) of the company.

Question 18

In the context of organization design, the functional design is used when an organization has implemented a strategy of unrelated diversification.

Question 19

In the context of the adaptation model, HR managers in firms that pursue the analyzer strategy are most likely to:

A) recruit employees who like working with specific guidelines in a stable environment.
B) retain stable employees who exhibit high levels of commitment and loyalty to the firm.
C) recruit and retain entrepreneurial employees who are highly flexible and more dedicated to their craft or profession than to the organization itself.
D) recruit and retain employees who might be moderately entrepreneurial and flexible but who will also be quite dedicated and loyal to the organization.

Question 20

An agency problem occurs when there is a conflict of interest between the managers and the shareholders.

Question 21

Which of the following is the set of forces that causes people to behave in certain ways?

A) Altruism
B) Motivation
C) Personality
D) Attitude

Question 22

In the context of human resource management, companies can establish a competitive advantage by:

A) hiring the right people and training them to be effective.
B) implementing a hierarchical management scheme.
C) adopting a centralized approach to organizational control.
D) focusing solely on their external environment.

Question 23

Which of the following is a difference between the functional design and the divisional design of organizations?

A) The functional design is used by large corporations, whereas the divisional design is used by small and new organizations.
B) The functional design looks similar to the H-form design, whereas the divisional design looks similar to the U-form design.
C) In the functional design, senior management usually provides coordination across departments, whereas in the divisional design, coordination is usually decentralized down to the various operating companies.
D) In the functional design, each business unit within a firm has its own human resource department, whereas in the divisional design, a firm has a single corporate-level human resource department to manage all human resource activities.

Question 24

Sandra is the chief operating officer of a fast-moving consumer goods (FMCG) company. She is responsible for the overall strategic operation of the company and for communicating the company's vision to the employees. In this case, Sandra is most likely to be part of the:

A) technical team of the company.
B) labor union of the company.
C) top management team of the company.
D) employee association of the company.

Question 25

Anyx Inc., an electronics firm, manufactures home appliances as well as automobile engines. It also owns and operates an insurance firm and a software development firm. Which of the following strategies does Anyx Inc. use?

A) The diversification strategy
B) The turnaround strategy
C) The retrenchment strategy
D) The stability strategy

Question 26

The group of senior executives responsible for the overall strategic operation of a firm is called the firm's _____.

A) labor union
B) trusteeship council
C) top management team
D) human resource department

Question 27

When an organization adopts a turnaround strategy, its HR managers need to be involved in:

A) recruiting entrepreneurial employees who are highly flexible and ambitious.
B) retaining the existing employees when the firm cannot offer any advancement opportunities.
C) decreasing the size of the organization's workforce.
D) rotating managers across various businesses of the corporation.

Question 28

A cost leadership strategy is one that:

A) allows a company to charge the lowest possible prices for its products.
B) focuses on hiring experienced employees who may remain with the company for a long time.
C) has reward systems based on quality rather than on the quantity of output.
D) focuses on maximizing the overall costs as much as possible.

Question 29

In the context of the adaptation model, which of the following strategies works best when the business environment is dynamic and growing and has considerable uncertainty and risk?

A) A defender strategy
B) The prospector strategy
C) The analyzer strategy
D) A retrenchment strategy

Question 30

Which of the following individuals would a company that uses a defender strategy prefer to retain the most?

A) Ron, a sales manager, who is one of the oldest employees of the company and is highly dedicated to his job
B) Marlene, a senior accountant, who seldom adheres to company policies but is good at her work
C) Tyler, a creative writer, who is very passionate about his work and prefers taking calculated artistic risks
D) Lena, a receptionist, who is friendly and approachable but keeps changing jobs

Question 31

Widget Corp. is often known for its motto "Don't put all your eggs in one basket." Over the course of the past 15 years, the company has acquired a wide array of firms, which operate in different markets that are not associated with each other. In the context of corporate strategies, it is evident that Widget Corp. has adopted a(n) _____.

A) related diversification strategy
B) differentiation strategy
C) analyzer strategy
D) unrelated diversification strategy

Question 32

In the context of the adaptation model, which of the following is a strategic alternative that is seen as a strategic failure and is not held up as a model that any firm should emulate?

A) The defender
B) The prospector
C) The analyzer
D) The reactor

Question 33

In the context of the adaptation model, HR managers in organizations using a defender strategy are most likely to recruit and retain:

A) employees who are highly skilled in their job irrespective of their commitment to the organization.
B) stable employees who exhibit high levels of commitment and loyalty to the organization.
C) entrepreneurial employees who are highly flexible and more dedicated to their craft or profession than to the organization itself.
D) employees who might be moderately entrepreneurial and flexible but who will also be quite dedicated and loyal to the organization.

Question 34

Which of the following statements is true of the corporate strategy of an organization?

A) It addresses how the organization will manage its operations.
B) It should be closely tied to the human resource management practices within the organization.
C) It deals with how the organization will compete in each market where it conducts business.
D) It should provide guidelines about how the organization will manage its human resources.

Question 35

Labor relations is the process of dealing with employees who are represented by _____.

A) a task force
B) the board of directors of the firm
C) the government
D) a union

Question 36

Which of the following statements is true of flat organizations?

A) They are highly bureaucratic.
B) They rely heavily on teamwork.
C) They are more rigid than vertical organizations.
D) They cannot adapt easily to changing environments.

Question 37

Which of the following occurs when an organization finds that its current operations are not effective, and major changes, such as rightsizing, are usually needed to rectify the problem?

A) A diversification strategy
B) A turnaround strategy
C) A growth strategy
D) A stability strategy

Question 38

In the context of the adaptation model, which of the following is a strategic alternative that managers can select to match their organization's strategy with the basic conditions of their organization's environment?

A) The defender strategy
B) The focus strategy
C) Retrenchment
D) Unrelated diversification

Question 39

If we examine fundamental human resource management (HRM) practices, it seems reasonable to suggest that:

A) it is enough to hire a competitor's employees to gain significant competitive advantage.
B) HRM teams do not play a significant role in firms using a growth strategy.
C) using systematic selection techniques is better than hiring based on intuition.
D) chief executive officers are the true owners of modern corporations-not the stockholders.

Question 40

The set of values that helps an organization's members understand what the organization stands for, how it accomplishes what it wants to accomplish, and what it considers important is called the organization's _____.

A) profile
B) purpose
C) culture
D) design

Question 41

One form of organization design used by many small or new organizations is the _____.

A) functional design
B) M-form design
C) H-form design
D) divisional design

Question 42

Which of the following statements best defines a stability strategy?

A) It is adopted by a company that plans to stay in its current businesses and intends to manage them as they are already being managed.
B) It is used by companies that are adding new products, product lines, or businesses to their existing core products, product lines, or businesses.
C) It occurs when an organization finds that its current operations are not effective.
D) It can be pursued externally through mergers, joint ventures, and the acquisition of other businesses.

Question 43

According to the adaptation model of business strategy, which of the following strategies is most appropriate in relatively stable conditions with a moderate degree of uncertainty and risk?

A) The reactor strategy
B) The prospector strategy
C) The analyzer strategy
D) The defender strategy

Question 44

Wedding Bells, a company founded in 1910, is the market leader in the bridal gown industry in the United States. It sells bridal gowns and caters only to this niche market segment. It has never diversified its product line to other garments or any other business. It concentrates exclusively on guarding its position in the bridal gown market. In the context of business strategies, which of the following strategies does Wedding Bells follow?

A) The defender strategy
B) The analyzer strategy
C) The prospector strategy
D) The reactor strategy

Question 45

Ross Brand Inc., a multinational corporation, began its operations with three businesses in the frozen food industry. Since its inception, the company has acquired other fast-food companies. Which type of organization design would be most appropriate for Ross Brand Inc.'s strategy?

A) The contemporary design
B) The U-form design
C) The M-form design
D) The conglomerate design

Question 46

Identify a human resource management (HRM) practice that can lead to improved firm performance.

A) Continuous training
B) Pay secrecy
C) Pay inversion
D) Job embeddedness

Question 47

Which of the following tend to have many rules and formal procedures that might limit a firm's ability to formulate an ideal strategy?

A) Psychological contracts
B) Unionized firms
C) Organizational citizenship behaviors
D) Self-directed work teams

Question 48

In the context of the adaptation model, which of the following is a similarity between an organization using the defender strategy and an organization using the focus strategy?

A) Both focus on diversifying their products and services.
B) Both ignore the environment in which their businesses operate.
C) Both target a specific segment of the market for their products or services.
D) Both work best in conditions of high uncertainty and risk.

Question 49

Straps Inc. is a leading manufacturer of high-end watches. It is renowned for its reliability and quality and enjoys a monopoly in its home market. It has now adopted a differentiation strategy to expand its business into neighboring countries. Which of the following human resource strategies should Straps Inc. follow to maintain the same momentum in the new markets?

A) It should exclusively focus on marketing to people from the business industry.
B) It should hire workers who can provide exemplary customer service.
C) It should keep the size of its workforce small to increase efficiency.
D) It should hire employees on short-term contracts.

Question 50

A company can shield itself from the adverse effects of business cycles, unexpected competition, and other economic fluctuations while operating several unique businesses in different markets by using _____.

A) a retrenchment strategy
B) unrelated diversification
C) a differentiation strategy
D) related diversification

Question 51

Identify one popular approach to business strategy where a business seeks ways to become accustomed to its environment.

A) Related diversification
B) Retrenchment
C) The identity model
D) The adaptation model

Question 52

Which of the following individuals would a company that uses the prospector strategy prefer to retain the most?

A) Shawn, a sales manager, who makes sure that his team members never exceed the budget allotted to them
B) Marla, a senior accountant, who is very loyal to the organization but is rigid in her approach to work
C) Thomas, a creative writer, who is very passionate about his work and prefers taking artistic risks to meet the changing industry needs
D) Maria, a receptionist, who is exceptionally good at her work but is overqualified for the job and has come to dislike it

Question 53

Which of the following statements is true of the union in an organization?

A) Unionized firms tend to have fewer rules than nonunionized firms.
B) Labor unions in the United States are more concerned with social issues than they are in most other countries.
C) It can play an important role in formulating and implementing the human resource strategy of the organization.
D) It cannot facilitate strategic changes in the organization.

Question 54

Identify an organizational design that looks similar to the H-form design except that the businesses are closely related to one another.

A) The functional design
B) The unitary-form design
C) The conglomerate design
D) The divisional design

Question 55

Which of the following strategies is used by companies that are adding new products, product lines, or businesses to their existing core products, product lines, or businesses?

A) A diversification strategy
B) A differentiation strategy
C) A retrenchment strategy
D) A stability strategy

Question 56

Which of the following is a human resource management (HRM) practice that can lead to improved firm performance?

A) Having self-directed work teams
B) Having pay secrecy and pay compression policies
C) Using pay inversion to motivate employees
D) Conducting informal performance appraisals

Question 57

Which of the following strategies is used when an organization tries to target a specific segment of the marketplace for its products or services?

A) The prospector strategy
B) The focus strategy
C) The analyzer strategy
D) The reactor strategy

Question 58

Which of the following is a critical component that affects how strategies are formulated and how they are implemented?

A) Performance management
B) Unionization
C) Staffing
D) Salary structure

Question 59

The role of the board of directors in an organization is to:

A) hire successful employees from competitors' firms to gain advantage in the market.
B) encourage a monoculture among employees throughout the organization and create an ethnocentric internal work environment.
C) hire employees based on intuition rather than using systematic selection techniques.
D) monitor the actions of the top management team to ensure that stockholders' interests are protected.

Question 60

When a fast-moving consumer goods (FMCG) company faced bankruptcy, the company decided to encourage its employees to contribute their ideas toward organizational development and growth. The organization also asked its human resource team to assess the employees' levels of commitment toward organizational effectiveness. To improve the FMCG company's organizational performance, it is evident that the company most likely used _____.

A) self-directed work teams
B) attitude surveys
C) job enrichment
D) job embeddedness

Question 61

Briefly explain the impact of an organization's culture on the formulation of its human resource strategies.

Question 62

Describe the factors that affect human resource (HR) strategy formulation.

Question 63

Briefly explain the influence of an organization's purpose and mission on its human resource practices.

Question 64

Compare related and unrelated diversification.

Question 65

How would an organization conduct an evaluation of its human resource (HR) function?