Question 1

Essential state-of-the-art operating and information systems that support company strategies and value-creating internal processes include all of the following except
A)customer database systems.
B)information systems to track supplier/partner/collaborative ally data.
C)human resources systems that maintain employee data.
D)systems to record and report financial performance data.
E)data management systems for undertaking benchmarking,TQM,and Six Sigma quality control.

Accepted Answer

All of the other options listed (A, B, C, and D) are essential systems that support company strategies and value-creating internal processes. However, the option E of data management systems for undertaking benchmarking, TQM, and Six Sigma quality control is not as essential as the others in terms of supporting company strategies and value-creating internal processes. While important for improving quality and efficiency, these systems are not core to a company's overall operating and information systems.

Question 2

Six Sigma quality control
A)is a strategy-implementer's best,most reliable tool for simultaneously achieving top-notch product quality and low manufacturing costs.
B)consists of a disciplined,statistics-based system aimed at producing not more than 2.5 defects per million iterations for a manufacturing or assembly process.
C)consists of a disciplined,statistics-based system aimed at producing not more than 3.4 defects per million iterations for any business process.
D)consists of a disciplined,statistics-based system aimed at fewer than 5.0 complaints per million customer transactions.
E)is a powerful tool for companies whose customers are very picky about product quality and product performance and who cannot afford for the product they use to break down and require repairs.

Accepted Answer

Six Sigma is a disciplined, statistics-based methodology aimed at reducing defects to 3.4 per million opportunities in any business process, not just manufacturing.

Question 3

The statistical thinking underlying Six Sigma is based on the following three principles:
A)All activities can be controlled,employee empowerment is the best control tool,and 100 percent control is possible.
B)All work is a process,all processes have variability,and all processes create data that explain variability.
C)All work activities can be done accurately most of the time,empowered employees are necessary for effective control,and good statistical data are an empowered employee's best control tool.
D)All work is a statistically controllable process,100 percent control is possible,and every well-controlled process is defect free.
E)Most business processes are subject to control,Six Sigma can remove variability in how processes are performed,and most defects can be eliminated.

Accepted Answer

The three principles that underlie Six Sigma are that all work is a process, all processes have variability, and all processes create data that explain variability. This means that Six Sigma seeks to identify and eliminate variability in processes to improve quality and reduce defects. The other answer choices contain some incorrect or incomplete statements about Six Sigma principles.

Question 4

A well-designed reward system
A)is focused on what to achieve to be rewarded as opposed to what to do and is management's most powerful tool for gaining employee commitment to superior strategy execution.
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 nonmonetary rewards.

Accepted Answer

A well-designed reward system should focus on what to achieve rather than what to do. It is essential in gaining employee commitment to superior strategy execution. The emphasis should be on the ability to achieve predetermined goals and objectives, which leads to positive outcomes.

Question 5

Enlisting employees' sustained and energetic commitment to good strategy execution and achievement of the strategic priorities and financial objectives is best done by
A)a resourceful and effective use of motivational incentives,both monetary and nonmonetary.
B)a clever and innovative use of benchmarking and best practices.
C)developing core competencies in the use of TQM,Six Sigma programs,and business process reengineering.
D)providing employees with a high degree of job security and attractive perks.
E)having top executives commit to making employees the company's most valuable competitive asset.

Accepted Answer

A resourceful and effective use of motivational incentives, both monetary and nonmonetary, is the best way to enlist employees' sustained and energetic commitment to good strategy execution and achievement of strategic priorities and financial objectives. It helps to align employees' goals with the organization's objectives and encourages them to strive for excellence. It also helps to create a high-performance culture and reinforces employees' contribution to the organization's success. Therefore, it is the most effective way to engage employees and ensure their commitment to strategy execution.

Question 6

Why is a company's corporate culture important?
A)Because it codifies formal traditions that company executives are committed to maintaining to ensure the company strategy-supportive culture is change resistant
B)Because it represents the integration of the strategy and business model that a company has adopted
C)Because it influences the organization's dedication to ethical conduct and accepted work practices
D)Because it influences the organization's actions and approaches to conducting business
E)Because it guides core values and its internal code of ethics

Accepted Answer

Because it influences the organization's actions and approaches to conducting business

Question 7

The guidelines for designing an incentive compensation system that will help drive successful strategy execution include
A)making the payoff for meeting or beating performance targets a major,not minor,piece of the total compensation package.
B)having a bonus and incentive plan that applies to managers only (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 that 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 nonmonetary incentives and rewarding people for diligently performing their assigned duties.

Accepted Answer

Making the payoff for meeting or beating performance targets a major piece of the total compensation package is important because it motivates employees to work towards achieving the company's objectives. It helps ensure that employees are aligned with the company's strategic goals and are motivated to perform their best to achieve them. Additionally, offering attractive wages and salaries is important to attract and retain talent, but it does not necessarily incentivize performance improvement.

Question 8

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)Any incentive plan should extend to all managers and all employees,not just top management
D)Ways must be found to reward deserving nonperformers who,for some reason,do not fare well 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 nonperformers goes against the purpose of a reward and incentive system, which is to encourage good strategy execution through rewarding good performance. The focus should be on rewarding those who meet or exceed performance targets, not those who do not perform well.

Question 9

The statistical thinking underlying Six Sigma is not based on the principle that
A)all work is a process.
B)all processes create data that explain variability.
C)100 percent control is possible,and every well-controlled process is defect free.
D)data that explain variability can be statistically analyzed.
E)all processes have variability.

Accepted Answer

The statement "100 percent control is possible, and every well-controlled process is defect-free" is not true and is not part of the statistical thinking underlying Six Sigma. Six Sigma aims to reduce variability and defects as much as possible, but it acknowledges that some amount of variability and defects is inherent in any process. The other options (A, B, D, and E) are all true statements that reflect the statistical thinking underlying Six Sigma.

Question 10

The Six Sigma process of define,measure,analyze,improve,and control (DMAIC)is
A)an improvement system for existing processes falling below specification and needing incremental improvement;the DMAIC process is a particularly good vehicle for improving performance when there are wide variations in how well an activity is performed.
B)an improvement system used to develop new processes or products at 100 percent defect-free levels.
C)a system of statistical procedures for achieving 100 percent control over how a task is performed.
D)an improvement system used to develop new processes or products at Six Sigma levels.
E)a system of statistical procedures for eliminating 100 percent of the variability in how a task is performed.

Accepted Answer

The DMAIC process is used to improve existing processes that are below specification and require incremental improvement. It is designed to address variations in performance and includes the steps of define, measure, analyze, improve, and control. The goal of DMAIC is to reduce defects and variability in processes to meet customer requirements. Option A is the best choice as it accurately describes the purpose and scope of the DMAIC process. Option B, C, D, and E do not accurately reflect the DMAIC process.

Question 11

The hallmarks of a high-performance corporate culture include
A)frequently revised and updated values and ethics statements,a deep commitment to employee training,and unusually attractive fringe benefit packages for company personnel.
B)a can-do spirit,pride in doing things right,no-excuses accountability,and a pervasive results-oriented work climate in which people go the extra mile to meet or beat stretch objectives.
C)a balanced scorecard approach to measuring performance,strong emphasis on teamwork,strict enforcement of company policies and procedures,and incentive compensation for all employees.
D)a deep commitment to pioneering new best practices,a preference for being a fast follower as opposed to a first mover or late mover (because the risks are more acceptable),and across-the-board bonuses for all personnel when the company meets or beats stretch objectives.
E)a deep commitment to top-notch quality and superior customer service,dedicated use of TQM and/or Six Sigma quality control programs,and the payment of big performance bonuses and stock options.

Accepted Answer

Option B encompasses the key elements of a high-performance corporate culture, including a positive attitude, accountability, results-oriented work climate, and commitment to excellence. Option A's focus on values and benefits is important but not necessarily a hallmark of high performance. Option C's emphasis on procedures and incentives may not foster innovation or adaptability. Option D's emphasis on following rather than leading may not lead to long-term success. Option E's focus on quality and compensation is important but not enough to define a high-performance culture.

Question 12

Which of the following organizations makes use of Six Sigma programs to improve quality and strategy execution?
A)La Tagliata Boutiques offers a different range of products at different outlets across London.
B)LG Electronics reengineers its value chain activities by creating cross-functional teams.
C)Memphis & Company applies advanced statistical methods to identify and remove the causes of defects.
D)Milwaukee Hospital improves the accuracy of administering the proper drug doses to patients.
E)Amtrak replaces its train repair facility in Beech Grove,Indiana,with mobile repair vans to cut operational costs by 40 percent.

Accepted Answer

The answer of Which of the following organizations makes use...

Question 13

Management's most powerful tool for winning employee commitment to good strategy execution and operating excellence is
A)the establishment of strategy-supportive policies and procedures.
B)empowering employees and encouraging them to adopt best practices.
C)setting stretch objectives.
D)a properly designed system of rewards and incentives.
E)aggressive use of TQM and Six Sigma quality control programs.

Accepted Answer

A properly designed system of rewards and incentives can motivate and encourage employees to commit to good strategy execution and operating excellence. By aligning rewards and incentives with desired behaviors and outcomes, management can create a culture of performance excellence and foster employee engagement and commitment. This can improve productivity, quality, customer satisfaction, and financial performance, and help the organization achieve its strategic goals.

Question 14

In trying to gain their employees' wholehearted commitment to good strategy execution and operating excellence,managers are well advised to use all of the following incentives except
A)adopting promotion-from-within policies and acting on suggestions from employees.
B)creating a work atmosphere in which there is genuine caring and mutual respect among workers and between management and employees.
C)giving awards and public recognition to high performers and showcasing company successes.
D)providing attractive perks and fringe benefits.
E)withholding information from employees about financial performance,strategy,and competitors' actions.

Accepted Answer

Withholding information from employees about financial performance, strategy, and competitors' actions is not a recommended incentive to gain employees' wholehearted commitment. Transparency in communication and providing employees with relevant information fosters trust, engagement, and alignment with organizational goals. Adopting promotion-from-within policies, creating a supportive work atmosphere, providing awards and public recognition, and offering attractive perks and fringe benefits are all effective motivators to engage and retain employees.

Question 15

The character of a company's corporate culture is a product of all of the following except
A)its approach to people management and the "chemistry" and "personality" that permeates its work environment.
B)its style of operating and ingrained behaviors and attitudes.
C)its standards of what is ethically acceptable and what is not and the stories that get told over and over to illustrate and reinforce the company's shared values,business practices,and traditions.
D)its work practices and behaviors that define "how we do things around here".
E)its lack of mechanisms for aligning,constraining,and regulating the actions,decisions,and behaviors of company personnel.

Accepted Answer

The lack of mechanisms for aligning, constraining, and regulating the actions, decisions, and behaviors of company personnel is not a contributing factor to the character of a company's corporate culture. All other options, A through D, are factors that contribute to the character of a company's corporate culture.

Question 16

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 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 50 percent nonmonetary rewards and a work environment that avoids placing pressure on managers and employees to perform at high levels

Accepted Answer

The choice that is not characteristic of a compensation and reward system designed to help drive successful strategy execution is E. A reward system that involves 50 percent non-monetary rewards and a work environment that avoids placing pressure on managers and employees to perform at high levels is not characteristic of a compensation and reward system designed to help drive successful strategy execution. A successful compensation and reward system should tie incentives to performance outcomes directly linked to good strategy execution and financial performance, keep the time between achieving the target performance outcome and the payment of the reward as short as possible, make sure the performance targets that each individual or team is expected to achieve involve outcomes that the individual or team can personally affect, and offer generous rewards for people who turn in outstanding performances.

Question 17

An important consideration in designing a strategy-supportive motivation and reward system is to
A)link the payment of all monetary rewards to the company's profitability.
B)employ incentives that will help motivate employees to work hard at performing their assigned duties and activities.
C)choose those types of rewards and incentives that focus employees' attention on what to do.
D)make across-the-board wage and salary increases the cornerstone of monetary rewards.
E)make both monetary and nonmonetary rewards integral parts of the reward system.

Accepted Answer

The best choice is to make both monetary and nonmonetary rewards integral parts of the reward system. This is because monetary rewards alone may not always be effective in motivating employees, and nonmonetary rewards such as recognition, promotion, and opportunities for growth and development can also play an important role in motivating and retaining employees. Also, a combination of both types of rewards can help ensure that employees are motivated to perform their duties and activities in the best possible manner.

Question 18

A company's corporate culture is best defined and identified by
A)the strategy and business model that a company has adopted.
B)the character of a company's internal work climate-as shaped by the company's core values,beliefs,and business principles.
C)its statement of core values and its code of ethics.
D)its internal politics.
E)the traditions that company executives are committed to maintaining.

Accepted Answer

A company's corporate culture is best defined by the work climate that is created by its core values, beliefs, and business principles. These values, beliefs, and principles are the foundation for the company's culture and shape the behaviors and attitudes of its employees. While a company's strategy, business model, core values, and code of ethics are all important components of its culture, they are not the defining factors. The internal work climate is what ultimately sets the tone for how employees interact with each other, customers, and the wider community.

Question 19

Which one of the following is not a fundamental part of a company's culture?
A)Work practices and behaviors that define "how we do things around here"
B)"Chemistry" that permeates its work environment
C)The company's core values and business principles
D)The company's strategic vision,strategic intent,and strategy
E)The company's style of operating and ingrained behaviors and attitudes

Accepted Answer

While a company's strategic vision, strategic intent, and strategy are important aspects of its overall operation, they are not necessarily a fundamental part of its culture. Rather, these elements are typically developed and implemented by leadership and may be subject to change over time as the company's priorities shift. The other options listed are all key components of a company's culture that help to shape its identity and guide the actions and decisions of its employees.

Question 20

The big difference between business process reengineering and continuous improvement programs such as TQM or Six Sigma is that
A)reengineering is a tool for installing process organization,whereas TQM and Six Sigma concern defect-free production methods and delivering world-class customer service.
B)reengineering helps create core competencies,whereas TQM and Six Sigma are tools for making a core competence stronger and more efficient.
C)reengineering is a tool for achieving one-time quantum improvements,whereas TQM and Six Sigma programs aim at incremental progress improvement (striving for inch-by-inch gains again and again in a never-ending stream).
D)business process reengineering requires benchmarking,whereas TQM and Six Sigma do not.
E)reengineering represents an effort to totally revamp a firm's value chain,whereas TQM looks at incrementally improving the performance of two or three targeted value chain activities.

Accepted Answer

Business process reengineering focuses on achieving significant, one-time improvements in a company's processes, while TQM and Six Sigma aim for continuous, incremental improvements. Though both approaches seek to improve efficiency and effectiveness, reengineering represents a more radical and immediate shift from the previous processes. TQM and Six Sigma are more gradually implemented, giving them time to become ingrained in the company's culture.

Quiz 10: Superior Strategy Executionanother Path to Competitive Advantage

Essential state-of-the-art operating and information systems that support company strategies and value-creating internal processes include all of the following except

Six Sigma quality control

The statistical thinking underlying Six Sigma is based on the following three principles:

A well-designed reward system

Enlisting employees' sustained and energetic commitment to good strategy execution and achievement of the strategic priorities and financial objectives is best done by

Why is a company's corporate culture important?

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

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

The statistical thinking underlying Six Sigma is not based on the principle that

The Six Sigma process of define,measure,analyze,improve,and control (DMAIC) is

The hallmarks of a high-performance corporate culture include

Which of the following organizations makes use of Six Sigma programs to improve quality and strategy execution?

Management's most powerful tool for winning employee commitment to good strategy execution and operating excellence is

In trying to gain their employees' wholehearted commitment to good strategy execution and operating excellence,managers are well advised to use all of the following incentives except

The character of a company's corporate culture is a product of all of the following except

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

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

A company's corporate culture is best defined and identified by

Which one of the following is not a fundamental part of a company's culture?

The big difference between business process reengineering and continuous improvement programs such as TQM or Six Sigma is that