Question 1

Which of the following is NOT a benefit to the firm using the internal labor market to select a new CEO?

Accepted Answer

The statement "Internal hiring results in an increased level of innovation" is actually a benefit to the firm using the internal labor market. Therefore, the answer is A.

Question 2

An example of the external labor market is the situation where

Accepted Answer

Hiring a new vice president of marketing from a competitor is an example of the external labor market because the company is seeking talent from outside of the organization to fill a vacant position. This is in contrast to options A, C, and D which all involve internal promotions or development programs within the company.

Question 3

The firm of Bergeron has existed for hundreds of years, having made exquisite clocks and watches. In its advertising it refers to clocks the firm made for such past royalty as Marie Antoinette and the Czars of Russia. Employees are constantly reminded of the firm's rich history and its long tradition of excellence of design and execution. Bergeron is motivating its employees through its

Accepted Answer

The answer of The firm of Bergeron has existed for...

Question 4

CEO duality refers to

Accepted Answer

CEO duality refers to the situation where the CEO is also the chairperson of the board of directors. This means that the CEO has both executive and non-executive roles and may have more power and influence within the organization. The issue with CEO duality is that it may lead to conflicts of interest and a lack of independent oversight, which can negatively impact corporate governance and performance.

Question 5

When the top management team is homogeneous and a new CEO is selected from inside the firm, it is

Accepted Answer

When the top management team is homogeneous, it indicates that there is a lack of diversity of ideas and perspectives within the team. Therefore, it is unlikely that a new CEO selected from within the firm will bring about significant changes in strategy. The current strategy is likely to continue as the new CEO is likely to share similar beliefs and values to the previous management team.

Question 6

As the organizational environment become more complex, heterogeneous and ambiguous, firms need to

Accepted Answer

With a more complex and heterogeneous environment, firms need a wider range of perspectives to navigate the challenges posed. Creating more diverse leadership teams can help bring a broader range of experiences and insights to decision-making. Additionally, diverse teams are better equipped to understand and engage with diverse stakeholders, whether they be customers or employees. Focusing on core customers (B) or implementing transformational leadership (C) can also be useful strategies, but they do not address the need for a more diverse leadership team. Emphasizing training and development of internal managerial talent (D) may help to build a diverse leadership team over time but is less effective in addressing the immediate challenges posed by a complex and ambiguous environment.

Question 7

The CEO/chairman of PharmaPacifica was recently killed in an airplane crash. This tragedy has thrown PharmaPacifica into turmoil as there is no one in the organization qualified to step into the former CEO's shoes. This is an example of

Accepted Answer

This situation illustrates a failure of succession management, as the organization did not have a plan in place for who would take over in the event of the CEO's unexpected departure.

Question 8

Which of the statements about CEO duality is FALSE?

Accepted Answer

CEO duality is actually quite common in the U.S. In fact, in a study of S&P 500 companies in 2019, 56% had a combined CEO and board chair role.

Question 9

A CEO gains power from all of the following circumstances EXCEPT

Accepted Answer

Shorter tenure of top management team does not necessarily give the CEO more power. On the contrary, it may create instability and a lack of experience within the leadership team which could reduce the CEO's power. On the other hand, options A, B, and D all provide the CEO with more power and control within the organization.

Question 10

Two key strategic leadership actions include

Accepted Answer

Determining strategic direction helps the organization in setting goals and objectives that align with its mission and vision. Establishing balanced organizational controls ensures that the company is properly aligned with its strategic direction and that progress is monitored towards achieving its goals.

Question 11

Which of the following is NOT related to a CEO having long tenure in his or her position?

Accepted Answer

The other options (A, B, and C) are all potential outcomes of a CEO having long tenure in their position, but there is no direct correlation between long CEO tenure and a high level of innovation. Some long-tenured CEOs may be innovative, while others may not be.

Question 12

A CEO's commitment to the status quo is influenced strongly by

Accepted Answer

A CEO's long tenure with the firm can lead to a stronger commitment to the status quo as they may be more invested in maintaining the current state of affairs. Relationship with the board of directors, being the chairperson of the board, or the level of social capital in the firm may have some influence, but long tenure is likely to have the strongest impact.

Question 13

Christina is evaluating Maximum Brands as an investment opportunity. She is very concerned about future financial performance by Maximum Brands. Christina is not a believer in stewardship theory. Christina will probably be most concerned if

Accepted Answer

Christina, not believing in stewardship theory, would likely be concerned about CEO duality, where the CEO also serves as the chairman of the board, as it may lead to conflicts of interest and less effective oversight.

Question 14

Which of the following factors most encourages stability in a firm's strategy?

Accepted Answer

A homogeneous top management team who share similar values, perspectives and experience tend to agree on strategy and make decisions that support stability.

Question 15

Determining the strategic direction for the firm refers to developing

Accepted Answer

Determining the strategic direction for the firm involves setting a specific vision, mission, values, and image for the organization. This provides a framework for decision-making, resource allocation, and performance measurement. Developing a balanced scorecard, a tactical response to threats and opportunities, or competitive agility and speed are all important aspects of strategy implementation, but they come after the strategic direction has been established.

Question 16

Jack Welch, the former CEO of GE, built GE's profitability, in part, by reducing the number of jobs, cutting costs, making acquisitions, developing a powerful financial services unit, and perhaps through questionable accounting practices. Jeffery Immelt, the new CEO, is making a massive effort to change the organization's strategy to focus on innovation, customer satisfaction, and sales growth because the competitive landscape is shifting. Immelt can expect

Accepted Answer

Since Jack Welch's strategy focused on cutting costs and reducing jobs, stakeholders have likely "bought into" this strategy and may resist Immelt's efforts to shift the organizational focus towards innovation, customer satisfaction, and sales growth. Therefore, Immelt can expect some resistance from organizational stakeholders during the transition period. While organizational slack may have been generated during Welch's tenure, it is unclear whether this will facilitate a smooth transition towards the new strategy. Replacing the entire top management team may not be necessary, as it is possible to communicate and implement changes while keeping some key individuals in place. Additionally, while Jack Welch has a strong reputation as a successful CEO, it is unclear how much of an "iconic aura" Immelt will inherit and whether this will give him credibility with GE's stakeholders.

Question 17

Monahegan Plasma Company is facing a dire and immediate crisis that threatens the existence of the company. Rapid decision-making is needed in a volatile and uncertain environment. In this case, Monahegan Plasma would benefit from a

Accepted Answer

The answer of Monahegan Plasma Company is facing a dire...

Question 18

The failure of organizations to use the pool of managerial talents held by women can best be termed

Accepted Answer

The failure to utilize the managerial talents held by women represents an opportunity cost to firms, as they miss out on the potential benefits that diversity in leadership can bring, such as fresh perspectives and better decision-making. This failure is not necessarily due to deliberate discrimination or lack of assertiveness by women managers, but rather a result of systemic issues and biases that limit the advancement of women to leadership positions.

Question 19

The recent choices of CEOs in U.S. automobile manufacturers (Chrysler, Ford, and General Motors) have come from the external labor market. This indicates

Accepted Answer

The fact that the CEOs were chosen from the external labor market suggests that the companies are looking for significant change, potentially indicating a larger strategic direction or corporate culture shift.

Question 20

The CEO of CLEO, Inc., in all her communications to employees consistently refers to her dream of CLEO becoming the company of choice for employee assistance programs. She keeps this theme uppermost and it is reflected in the firm's motto, the title of its Web newsletter, and even on the company t-shirts and mugs. This is an example of the firm's

Accepted Answer

The answer of The CEO of CLEO, Inc., in all...

Quiz 12: Strategic Leadership