Question 1

Well-conceived policies and operating procedures facilitate good strategy execution by
A) leaving it up to employees regarding how things are to be done.
B) removing roadblocks to creativity and innovation.
C) fostering a work climate that preserves the status quo whenever possible.
D) enforcing consistency in how strategy-critical activities are performed.
E) channeling individual and group efforts along a strategy-supportive path.

Accepted Answer

Enforcing consistency in how strategy-critical activities are performed ensures that the execution of the strategy is in line with the intended goals and objectives. This helps to avoid any potential confusion or deviation from the planned strategy.

Question 2

From a strategy-implementing/strategy-executing perspective, operating budget allocations should
A) primarily be based on the number of new strategic initiatives being implemented in each operating department.
B) be based on the number of people employed in each of the divisions.
C) be strategy-driven and based on how much each organizational unit needs to carry out its piece of the strategic plan efficiently and effectively.
D) be linked to the costs of performing value chain activities as determined by benchmarking against best-in-industry competitors.
E) depend on how much stretch there is in each department's objectives and what additional resources are needed to help reach these performance targets.

Accepted Answer

Operating budget allocations should be strategy-driven, meaning they should be based on how much each organizational unit needs to carry out its piece of the strategic plan efficiently and effectively. This ensures that resources are allocated in a way that supports the organization's overall goals and objectives. While factors such as the number of people employed in each division or the number of new initiatives being implemented may be considered, they should not be the primary driver of budget allocations. The costs of performing value chain activities and department performance targets may also be taken into account, but ultimately the focus should be on supporting the organization's strategic plan.

Question 3

Providing top-down guidance can aid the task of implementing strategy
A) provided they promote greater use of and commitment to best practices and total quality management.
B) because really effective internal policies and procedures are not easily duplicated by other firms.
C) because astutely conceived policies or procedures can result in competitive advantage.
D) by helping align the actions and behavior of company personnel with the requirements for good strategy execution, placing limits on independent action, and helping overcome resistance to change.
E) by making it easier to impose tight budget controls and avoid wasting scarce resources.

Accepted Answer

Providing top-down guidance can aid the task of implementing strategy by helping align the actions and behavior of company personnel with the requirements for good strategy execution, placing limits on independent action, and helping overcome resistance to change. This can lead to better execution of the strategy and ultimately result in competitive advantage. Options A, B, and E do not directly relate to the benefits of top-down guidance for implementing strategy.

Question 4

Merely fine-tuning the execution of a company's existing strategy normally requires
A) big shifts of resources from one area to another.
B) a larger allocation of resources to the effort.
C) trimming costs and shifting resources to activities that have a higher priority.
D) creativity in finding ways for cost reductions, i.e. ways to do less with less.
E) cost-cutting in key value chain activities.

Accepted Answer

Merely fine-tuning the execution of a company's existing strategy does not require big shifts of resources or a larger allocation of resources. It requires trimming costs and shifting resources to activities that have a higher priority. Cost-cutting in key value chain activities or creativity in finding ways for cost reductions may or may not be necessary depending on the specific situation, but they are not the primary focus of fine-tuning the execution of an existing strategy.

Question 5

New strategies often entail budget reallocations because
A) revamping the performance of value chain activities can be costly.
B) the accompanying policy revisions and compensation incentives tend to require different levels of funding than before.
C) business units important in the prior strategy but having a lesser role in the new strategy may need downsizing, while units and activities that now have a bigger and more critical strategic role may need more people, new equipment, additional facilities, and above-average increases in their operating budgets.
D) empowering employees to carry out the new strategy elements and shifting to a total quality management type of culture to build skills in competent strategy execution typically require substantial new funding and budget revisions.
E) adopting best practices and pushing for continuous improvement tends to reduce costs and reduce overall resource requirements.

Accepted Answer

When implementing new strategies, it is common for business units that played a lesser role in the new strategy to need downsizing and for those with a bigger role to require more resources and funding. This may lead to budget reallocations as the company adjusts to the new strategic direction. Choices A, B, and D may also require budget reallocations, but they are not the primary reasons for budget reallocation, as stated in option C. Choice E, on the other hand, suggests that adopting best practices and continuous improvement may reduce costs and resource requirements, which is the opposite of budget reallocation.

Question 6

Prescribing policies and operating procedures aids the task of implementing strategy by
A) helping ensure that worker eligibility for incentive bonuses is measured consistently and awarded fairly.
B) fostering the use of best practices, TQM, Six Sigma, and continuous improvement efforts.
C) acting as a powerful lever for changing employee attitudes about the need for a different incentive and reward system.
D) helping build employee commitment to strengthening the company's core competencies and competitive capabilities.
E) placing limits on ineffective independent action and channeling efforts of individuals along a path more conducive to good strategy execution and operating excellence.

Accepted Answer

Prescribing policies and operating procedures help to place limits on ineffective independent action and channeling efforts of individuals along a path more conducive to good strategy execution and operating excellence. By establishing clear guidelines for how tasks should be performed and standards for expected outcomes, employees are more likely to align their actions with the company's strategic goals. This helps to ensure that resources are being used efficiently and effectively, and reduces the risk of costly mistakes or missteps.

Question 7

A company's ability to marshal adequate resources in support of new strategic initiatives and steer them to the appropriate organizational units is important to the strategy execution process because
A) changes in strategy often require resource reallocation, and organizational units need the proper funding to carry out their part of the strategic plan effectively and efficiently.
B) accurate budgets are the key to exercising tight financial controls over what organization units can and cannot do in carrying out management's directives to execute the chosen strategy proficiently.
C) tight budget control is management's most powerful tool for first-rate strategy execution.
D) lean, carefully managed budgets protect the company's financial condition and eliminate the wasteful use of cash.
E) lean, strictly enforced budgets are management's best and most used means of getting organizational units to exercise the fiscal discipline needed to execute the chosen strategy in a cost-efficient manner.

Accepted Answer

A company's resources must be allocated appropriately to support new strategic initiatives. Without adequate resources, organizational units may not be able to effectively carry out their part of the strategic plan. Resource reallocation may be necessary to ensure the success of the new strategy, and accurate budgeting is one tool that can be used to help manage this process. However, budget control alone is not necessarily the most powerful tool for strategy execution, and lean or strict budgets may not always be the best approach, depending on the needs of the organization.

Question 8

Apple decides to reallocate resources by curtailing online ad budgets and investing heavily in scratch-resistant Sapphire, the material that differentiates the Apple Watch from rival wearable computing device brands. What is MOST LIKELY the reason for Apple's reallocation of resources?
A) making critical value chain activities less effective
B) supporting the new strategic initiative of the brand
C) signaling commitment to online sales of the brand
D) signaling commitment to offline sales of the brand
E) impeding the efforts of rivals to hoard Sapphire

Accepted Answer

By investing more heavily in scratch-resistant Sapphire, Apple is supporting a new strategic initiative for the brand - differentiation through materials innovation. By curtailing online ad budgets, Apple is likely reallocating resources to focus on this initiative rather than other marketing efforts.

Question 9

In prescribing policies and procedures that facilitate independent action on the part of empowered employees for good strategy execution companies need to do ALL of the following EXCEPT
A) give organization members clear direction and place reasonable boundaries on their actions.
B) empower employees to act within the company's set boundaries in pursuit of company goals.
C) allow company personnel to act with some defined degree of freedom, especially when individual creativity and initiative are more essential to good strategy execution than standardization and strict conformity.
D) institute policies that give employees substantial leeway to carry out activities the way they think best.
E) produce policy manuals on strategy execution that prescribe exactly how daily operations are to be conducted.

Accepted Answer

The statement "produce policy manuals on strategy execution that prescribe exactly how daily operations are to be conducted" contradicts the idea of allowing employees to act with some defined degree of freedom and individual creativity, which is essential for good strategy execution. Therefore, the company should not produce policy manuals that prescribe exactly how daily operations are to be conducted.

Question 10

A company's operating budget must
A) be strategy-driven in order to amply fund the performance of key value chain activities.
B) be risk-averse, so as not to run the risk of inadvertently creating barriers to building the needed competencies and capabilities.
C) be employee-driven to gain commitment to strengthening the company's core competencies and competitive capabilities.
D) trim costs of key value chain activities to achieve cost efficiency in new strategic initiatives.
E) follow traditional and time-tested methods of budgeting to support rapid adjustments in strategy.

Accepted Answer

An operating budget should be strategy-driven to ensure that key value chain activities are sufficiently funded to support the achievement of strategic goals. This involves identifying and prioritizing the activities that contribute the most to the company's competitive advantage, and allocating resources accordingly. A risk-averse approach (option B) may result in underinvestment in essential capabilities and competencies, while an employee-driven budget (option C) may not be aligned with overall strategic objectives. Trimming costs of value chain activities (option D) can be important for achieving cost efficiency, but should be balanced with the need to support strategic initiatives. Finally, relying solely on traditional budgeting methods (option E) may not be sufficient for ensuring agility and responsiveness to changes in the competitive environment.

Question 11

Company managers can significantly advance the cause of superior strategy execution by doing all of the following EXCEPT
A) employing best practices methods and using process management tools to drive continuous improvement in how internal operations are conducted.
B) adopting benchmarking of the company's operating activities and business processes against "best-in-industry" and "best in world" performers.
C) adopting "best-in-company" operating activities and processes when a company's various organizational units are performing the same functions differently.
D) instituting operating practices that generate economies of scale and scope with current value chain activities.
E) develop performance yardsticks for judging effectiveness and efficiency for particular value chain activities and business processes deemed strategically critical.

Accepted Answer

The only option that does not advance the cause of superior strategy execution is D as it focuses more on generating economies of scale and scope which may not necessarily be aligned with the company's overall strategy. The other options focus on improving internal operations, benchmarking against best practices, adopting best-in-company operating activities, and developing performance yardsticks, all of which can help advance the cause of superior strategy execution.

Question 12

Visible actions to reallocate operating funds and move people into different and new organizational units
A) can be dysfunctional in trying to implement a new strategy because of the anxiety and insecurity that big changes in budgets cause among company personnel.
B) signal a determined commitment to strategic change and can help catalyze and give credibility to the implementation process.
C) run the risk of inadvertently creating barriers to building the needed competencies and capabilities.
D) tend to impede the task of empowering employees and shifting to a new, more strategy-supportive culture.
E) are rarely necessary in implementing a new strategy unless the new strategy entails a radically different set of value chain activities.

Accepted Answer

Visible actions to reallocate operating funds and move people into different and new organizational units signal a determined commitment to strategic change and can help catalyze and give credibility to the implementation process. While there may be anxiety and insecurity among personnel during the transition, this can be addressed through effective communication and support. The risk of inadvertently creating barriers to building needed competencies and capabilities can be managed through careful planning and execution. Empowering employees and shifting to a new strategy-supportive culture may actually be facilitated by the reallocation of funds and people, as it can demonstrate the importance of these new priorities. While such actions may not be necessary for every new strategy, they can be a powerful tool for driving change in many organizations.

Question 13

A useful guideline in designing strategy-facilitating policies and operating procedures is
A) to prescribe enough policies to give organizational members clear direction in implementing strategy and to place reasonable boundaries on their actions. This then empowers them to act within these boundaries in pursuit of company goals.
B) that strictly enforced policies work better than loosely enforced policies.
C) that more policies/procedures work better than fewer policies/procedures, and that strict enforcement always beats lax enforcement.
D) to let individuals act in an empowered and self-directed way, subject only to the constraint that their actions and behavior be ethical and in step with the corporate culture.
E) to prescribe enough policies and procedures that little is left to chance in performing value chain activities, and employees should have no leeway to do things in a manner that deviates from the company's best-practices standard.

Accepted Answer

The answer of A useful guideline in designing strategy-facilitating policies...

Question 14

Managers charged with implementing and executing strategy need to be deeply involved in the budgeting and resource allocation process because of all the following reasons EXCEPT
A) too little funding deprives organizational units of the necessary resources to execute their piece of the strategic plan while too much funding wastes organizational resources and reduces financial performance.
B) resource allocation involves screening of requests for people, facilities and equipment, and approving them, whether they contribute to the strategy execution effort or not.
C) without major budget reallocations there is little chance that desired core competencies and organizational capabilities will emerge.
D) lean, carefully managed budgets protect the company's financial condition and eliminate the wasteful use of cash.
E) a change in strategy nearly always calls for budget reallocations and resource shifting.

Accepted Answer

Resource allocation specifically aims to approve requests that contribute to the strategy execution effort, not to approve them regardless of their contribution.

Question 15

A "best practice" refers to a
A) policy or procedure that is unusually effective.
B) method of performing an activity or business process that consistently delivers superior results compared to other approaches and that at least one company has demonstrated works particularly well in terms of delivering operating excellence.
C) strategy-critical activity that results in sustainable competitive advantage.
D) value chain activity that is a company's distinctive competence.
E) particular value chain activity that management has given top priority to performing in world-class fashion.

Accepted Answer

A "best practice" is a method of performing an activity or business process that consistently delivers superior results compared to other approaches and that at least one company has demonstrated works particularly well in terms of delivering operating excellence. It is a proven and effective way of doing things that can be adopted by other organizations to improve their own performance.

Question 16

eBay, an online auction business, streamlines its retail business by listing PayPal, a digital payments company, as a separately traded company. eBay's move is likely to
A) promote the entry of rival companies into the digital payments industry.
B) increase the cost of handling transactions online.
C) curtail the cost of handling transactions online.
D) enhance eBay's strategy execution capabilities.
E) increase the demand for on-line auctions.

Accepted Answer

By listing PayPal as a separate company, eBay can focus more on its core auction business, potentially enhancing its strategy execution capabilities by allowing each company to concentrate on its specific market and operational strategies.

Question 17

Which of the following exemplifies good strategy execution?
A) The policy document of Dominos ensures consistency in service behavior patterns across outlets.
B) The policy document of Pizza Today allows for differences in product range and quality across outlets.
C) The policy document of Boston Pizza leaves ample scope for each member of the staff to act independently.
D) The policy document of Little Caesars discusses strategy but not the routines for running the outlets.
E) The policy document of Pizza Inn is averse to standardization of the way activities are performed.

Accepted Answer

Good strategy execution involves ensuring consistency and alignment in behavior patterns across outlets, which is exemplified by the policy document of Dominos.

Question 18

Cavco Construction divests funds from its commercial property ventures to invest in gated community properties close to New York, signaling a change of strategy. Which of the following statements about Cavco is most likely true?
A) Cavco is impeding the efforts to proficiently execute the strategy.
B) Cavco is merely fine-tuning its existing strategy to test efficiency.
C) Cavco is marshalling resources to support new strategic initiative.
D) Cavco is hampering work climate conducive for good strategy execution.
E) Cavco is focusing on activities that are a low priority in the strategy execution effort.

Accepted Answer

The statement suggests that Cavco is divesting funds from its commercial property ventures to invest in gated community properties close to New York, which indicates a change of strategy. Therefore, it is most likely that Cavco is marshalling resources to support a new strategic initiative.

Question 19

Which of the following is NOT a benefit of prescribing policies and operating procedures to aid management's task of implementing strategy?
A) placing limits on independent action and helping overcome resistance to change
B) providing top-down guidance to operating managers, supervisory personnel, and employees regarding how things need to be done and what behavior is expected
C) promoting the creation of a work climate that facilitates good strategy execution
D) helping build employee commitment to adopting best practices and using the tools of TQM and Six Sigma
E) helping enforce consistency of effort in how particular activities are performed in geographically scattered organization units ered operating units.

Accepted Answer

Building employee commitment to adopting best practices and using the tools of TQM and Six Sigma is not a specific benefit of prescribing policies and operating procedures. However, it may indirectly result from effectively implementing policies and procedures that contribute to a positive work climate and consistent performance standards.

Question 20

Which of the following does NOT facilitate strategy execution?
A) Hyundai service centers follow same routines when receiving vehicles for servicing.
B) Ford encourages staff to skip practices out of sync with the company's mission.
C) General Motors showrooms have similar operating practices across regions.
D) Chevrolet Service center replicates the caliber of customer service across locations.
E) Renault is averse to standardization of the way activities are performed at its service centers.

Accepted Answer

Standardization of activities typically facilitates strategy execution by ensuring consistency and efficiency. Renault's aversion to standardization implies a lack of uniformity, which can hinder effective strategy execution.

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

Well-conceived policies and operating procedures facilitate good strategy execution by

From a strategy-implementing/strategy-executing perspective, operating budget allocations should

Providing top-down guidance can aid the task of implementing strategy

Merely fine-tuning the execution of a company's existing strategy normally requires

New strategies often entail budget reallocations because

Prescribing policies and operating procedures aids the task of implementing strategy by

A company's ability to marshal adequate resources in support of new strategic initiatives and steer them to the appropriate organizational units is important to the strategy execution process because

Apple decides to reallocate resources by curtailing online ad budgets and investing heavily in scratch-resistant Sapphire, the material that differentiates the Apple Watch from rival wearable computing device brands. What is MOST LIKELY the reason for Apple's reallocation of resources?

In prescribing policies and procedures that facilitate independent action on the part of empowered employees for good strategy execution companies need to do ALL of the following EXCEPT

A company's operating budget must

Company managers can significantly advance the cause of superior strategy execution by doing all of the following EXCEPT

Visible actions to reallocate operating funds and move people into different and new organizational units

A useful guideline in designing strategy-facilitating policies and operating procedures is

Managers charged with implementing and executing strategy need to be deeply involved in the budgeting and resource allocation process because of all the following reasons EXCEPT

A "best practice" refers to a

eBay, an online auction business, streamlines its retail business by listing PayPal, a digital payments company, as a separately traded company. eBay's move is likely to

Which of the following exemplifies good strategy execution?

Cavco Construction divests funds from its commercial property ventures to invest in gated community properties close to New York, signaling a change of strategy. Which of the following statements about Cavco is most likely true?

Which of the following is NOT a benefit of prescribing policies and operating procedures to aid management's task of implementing strategy?

Which of the following does NOT facilitate strategy execution?