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Strategic Management Practice Test: Building an Organization Capable of Good Strategy Execution

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Strategic Management Practice Test: Building an Organization Capable of Good Strategy Execution

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25 Questions

1. Recruiting and retaining capable employees

is more important during periods of rapid growth than during periods of crisis and attempted turnarounds.is important because the quality of an organization’s people is always an essential ingredient of successful strategy execution—knowledgeable, engaged employees are a company’s best source of creative ideas for the nuts-and-bolts improvements that lead to operating excellence.is an important organization-building element, particularly when it comes to transforming a competence into a core competence or distinctive competence.is usually much more important to good strategy execution than is assembling a capable top management team.is easily the most critical aspect in building competitively valuable core competencies and capabilities.

2. A decentralized organizational structure is predicated on a belief that

lower-level managers and employees should go up the ladder of command for approval on most all strategic and operating issues of much importance. most company personnel have neither the time nor the inclination to direct and properly control they work they are performing and that they lack the knowledge and judgment to make wise decisions about how best to do their work.strict enforcement of detailed procedures backed by rigorous managerial oversight is necessary because company personnel cannot be counted on act wisely or keep costs to a bare bones level.top executives should establish a collegial, collaborative culture where decisions are made by general consensus on what to do and when.decision-making authority should be pushed down to the lowest organizational level capable of making timely, informed, competent decisions.

3. Which of the following runs counter to the organizational trends in today’s companies?

Few barriers between people at different vertical ranks, between functions and disciplines, and between units in different locationsExtensive collaborative efforts among people in different specialties and different geographic locationsExtensive use of Internet technology and e-commerce business practicesDevoting considerable management attention to building a company capable of outcompeting rivals on the basis of superior resource strengths and competitive capHighly centralized decision-making (made possible by much greater use of corporate intranets)

4. In companies where intellectual capital is crucial to good strategy execution, which of the following is generally not among the practices that companies use to establish a talented knowledge base?

Fostering a stimulating and engaging work environment such that employees will consider the company a great place to workCoaching average performers to improve their skills and capabilities, while weeding out underperformers and benchwarmersExpecting employees to take full responsibility for staying up to date, thereby minimizing the need to train or retrain employeesEncouraging employees to challenge existing ways of doing things, to be creative and innovative in proposing better ways of operating, and to push their ideas for new products or businessesProviding promising employees with challenging, interesting, and skill-stretching assignments and also rotating them through jobs that not only have great content but also span functional and geographic boundaries

5. Which of the following is not accurate as concerns a company’s competencies and capabilities?

Competencies and capabilities that grow stale can impair competitiveness unless they are refreshed, modified, or even phased out and replaced in response to ongoing market changes and shifts in company strategy.When a company succeeds in hiring talented employees and training them properly, competencies and capabilities tend to blossom quickly and, once put in place, can last for a decade or more.Even after core competencies and competitive capabilities are in place and functioning, company managers can’t relax—they still have wrestle with when and how to recalibrate existing competencies and capabilities and when and how to develop new ones.Core competencies have to be tweaked and adjusted to keep them fresh and responsive to changing customer needs and market conditions.The imperatives of keeping capabilities in step with ongoing strategy and market changes make it appropriate to view a company as a bundle of evolving competencies and capabilities.

6. Which of the following is not among the principal managerial components of the strategy execution process?

Selecting and retaining capable employees, thereby enhancing the company’s intellectual capital resourcesMarshaling sufficient money and people behind the drive for strategy executionExercising strong leadership to drive execution forward, keep improving on the details of execution, and achieve operating excellence as rapidly as feasibleInstituting best practices and pushing for continuous improvement in how value chain activities are performedInstilling a corporate culture that promotes good strategy execution

7. Building an organization capable of good strategy execution entails

centralizing authority in the hands of a chief strategy implementer so as to create the leadership authority for driving implementation forward at a rapid pace.staffing the organization, building core competencies and competitive capabilities, and structuring the organization and work effort.investing heavily in employee training, using an empowered organization design and organization structure in order to maximize labor productivity, and employing effective incentive compensation systems.decentralizing authority for performing strategy-critical value chain activities, establishing at least two distinctive competencies, and hiring talented employees.empowering employees, maximizing internal operating efficiency, and optimizing core competencies.

8. While ultimate responsibility for implementing and executing strategy falls upon the shoulders of senior executives,

the success or failure of the implementation/execution effort hinges chiefly on doing an effective job of empowering employees to make day-to-day operating decisions that support good strategy execution.it is a company's employees who most determine whether the drive for good strategy execution will succeed or fail.the pivotal and most decisive strategy-implementing actions are carried out by front-line supervisors who have day-to-day responsibility for seeing that key activities are done properly.the success or failure of the implementation/execution effort hinges chiefly on a company's reward system and whether its policies and procedures are strategy-supportive.top-level managers still have to rely on the active support and cooperation of middle and lower-level managers in pushing needed changes in functional areas and operating units.

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

Speeding internal decision-making and shortening the time it takes to respond to changing market conditionsCapitalizing on the partnerships with outsiders to enhance its arsenal of capabilities and thus contribute to better strategy executionHelping decrease internal bureaucracies and flatten the organizational structurePromoting quick establishment of a total quality cultureImproving a company’s chances for outclassing rivals in the performance of strategy-critical activities and turning a core competence into a distinctive competence

10. Which of the following is not one of the chief advantages of a decentralized organizational structure?

Encouraging lower level managers and rank-and-file employees to exercise initiative and act responsiblyReducing the size of the corporate bureaucracy and the layers of managementSpurring new ideas and creative thinkingPromoting greater motivation and involvement in the business on the part of more company personnelMaking it easy to fix accountability when company performance targets are not met and enhanced capture of cross-business strategic fits

11. Which one of the following falsely characterizes a centralized organizational structure?

Strict enforcement of detailed procedures backed by rigorous managerial oversight is the most reliable way to keep the daily execution of strategy on track.Top executives should retain authority over most strategic and operating decisions and keep a tight rein on business-unit heads, department heads, and the managers of key operating units.Most company personnel have neither the time nor the inclination to direct and properly control they work they are performing and that they lack the knowledge and judgment to make wise decisions about how best to do their work.Tight control by the manager in charge makes it easy to fix accountability when things do not go well.A company that draws on the combined intellectual capital of all of its people can outperform a company that relies on command-and-control.

12. Putting together a capable top management team

is particularly important when the firm is pursuing unrelated diversification or making a number of new acquisitions in related businesses.is important in building an organization capable of proficient strategy execution, but is nearly always less crucial than doing a superior job of training and retraining employees.should take top priority in building competitively valuable core competencies.is particularly essential for executing a strategy to keep a company’s costs lower than rivals and become the industry’s low-cost leader.entails filling key managerial slots with smart people who are clear thinkers, good at figuring out what needs to be done, and skilled in “making it happen” and delivering good results.

13. 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

outexecute them (beat them by performing certain value chain activities in superior fashion).do a better job of empowering employees and flattening the organization structure.institute a more motivating and cost-efficient compensation and reward system. outcompete them with a stronger corporate culture.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.

14. The chief disadvantages of a decentralized organizational structure include

increasing the size of the corporate bureaucracy.slowing a company’s response times to changing external events because approval of what course of action to take has to go up the chain of command to the top of the management bureaucracy.discouraging lower-level managers and rank-and-file employees from exercising initiative, engaging in creative thinking, and taking responsibility for their actions.putting the organization at risk if many “bad” decisions are made at lower levels in the organization—top management lacks “full control.”creating more layers of management.

15. 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?

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 expertiseWhen a company shifts to a strategy requiring different skills, competitive capabilities, managerial approaches, and operating methodsWhen the chosen strategy calls for deeper technological capability or building and using new capabilities.When an organization is striving to build skills-based competenciesWhen the strategy execution effort is based on tried and true operating practices that vary little from year to year.

16. Building organizational bridges with external allies is aided by

getting each strategic ally to agree to appoint someone as head of the collaborative effort and to give that person the authority to enforce tight coordination of joint activities.forming a 50-50 joint venture with each strategic partner and then assigning people to the joint venture who have the authority and responsibility to enforce tight coordination.appointing “relationship managers” and giving them responsibility for making particular strategic partnerships or alliances generate the intended benefits.entering into a written agreement detailing the roles and responsibilities of the company and the ally/partner, setting forth the results that are expected, establishing deadlines for achieving these results, and designating the people who are to be respoagreeing with allies to meet frequently and make all decisions pertaining to the alliance on the basis of mutual agreement and consensus.

17. In devising an action agenda to implement and execute a new or different strategy, the place for managers to start is with

allocating more resources to strategy-critical parts of the business.the task of revising and enhancing the company’s core competencies.evaluating whether existing policies and procedures are adequately strategy-supportive.a probing assessment of what the organization must do differently and better to carry out the strategy successfullychoosing which leadership style to employ in trying to carry out the strategy successfully.

18. Organizing a company’s work effort to promote successful strategy execution involves

hiring a capable management team.instituting a compensation structure that reduces employee turnover and thus stabilizes the make-up of work teams.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.choosing an organization structure that is a tight fit with the corporate culture.deciding how much to spend on training managers and employees.

19. Which one of the following statements falsely characterizes the managerial task of executing strategy?

Implementing and executing strategy is primarily an operations-driven activity revolving around the management of people and business processes. Executing strategy tests a manager’s ability to direct organizational change, achieve continuous improvement in operations and business processes, create and nurture a strategy-supportive culture, and consistently meet or beat performance targets.Executing strategy is an action-oriented, make-things-happen task.Strategy execution requires a team effort that entails every manager thinking through the answer to “What does my area have to do to implement its part of the strategic plan, and what should I do to get these things accomplished effectively and efficientlThe challenge of successfully implementing new strategic initiatives principally involves employing managerial techniques to overcome resistance to change.

20. The overriding aim in building a management team should be to

select people who have similar management styles, leadership approaches, business philosophies, and personalities.choose managers who believe in having a strong corporate culture and deeply ingrained core values.select people who are committed to decentralizing decision-making and empowering employees.choose managers experienced in controlling costs and flattening the organization structure.assemble a critical mass of talented managers who can function as agents of change, work well together as a team, and produce organizational results that are dramatically better than what one or two star managers acting individually can achieve.

21. Once company managers have decided on a strategy, the emphasis turns to

empowering employees to revise and reorganize value chain activities to match the strategy.converting the strategy (and any associated strategic plan) into actions and good results.establishing policies and procedures that instruct company personnel in the ways and means of executing the strategy.building the core competencies and competitive capabilities needed to execute the strategy.developing a detailed implementation plan that sets forth exactly what every department and every manager needs to do to proficiently execute the company's strategy.

22. Which of the following is not among the principal managerial components of the strategy execution process?

Deciding which core competencies and value chain activities to leave as is and which ones to overhaul and improveTying rewards directly to the achievement of strategic and financial targets and to good strategy execution Instituting policies and procedures that facilitate rather than impede strategy executionBuilding an organization with the competencies, capabilities, and resource strengths needed to execute strategy successfullyAdopting best practices and pushing for continuous improvement in how value chain activities are performed

23. The primary building blocks within a company’s organizational structure

usually consist of two divisions—a division charged with performing primary value chain activities and a division charged with performing support activities.can include process departments, traditional functional departments, geographic organizational units, and divisional units performing one or more major processing steps along the value chain (components manufacture, assembly, distribution), and individual businesses (in the case of a diversified company).typically consist of an un-empowered employee department, an empowered employee department, teams of front-line supervisors, teams of middle-level managers and administrators, and the group of top-level executives that comprise the company’s “executive suare almost always the departments performing such key administrative support functions as finance, accounting, information technology, human resource management, and R&D.usually consist of supply chain management, components manufacture, assembly, distribution, and administration.

24. In a highly centralized organizational structure,

the thesis is that strict enforcement of detailed procedures backed by rigorous managerial oversight is the most reliable way to keep the daily execution of strategy on track.one of the basic tenets is that most company personnel have neither the time nor the inclination to direct and properly control they work they are performing and, further, that they lack the knowledge and judgment to make wise decisions about how best to All of these.top executive retain authority for most strategic and operating decisions.tight control from the top makes it easy to fix accountability when things do not go well.

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

improved strategy execution and a potential for competitive advantage.lower cost for employee training.increased ability to reduce total operating costs.the added ease with which strategic fit and resource fit benefits can be captured.enhanced ability to avoid the perils of outsourcing.

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25 Questions

❤ If you liked Fatskills, consider supporting us by checking out The Life Manuals You Never Got.

About | Explore | User Guide | Topics | Subjects | Doubt Solver | Career Aptitude Test | Answers | Free Tools | OSHA Basics Quiz | What Should We Know? Privacy | Terms |

Without work one finishes nothing. - Ralph Waldo Emerson© 2026 Fatskills.com

All trademarks, logos and brand names are the property of their respective owners. All company, product and service names used in this website are for identification purposes only. Use of these names, trademarks and brands does not imply endorsement.

About | Explore | User Guide | Topics | Subjects | Doubt Solver | Career Aptitude Test | Answers | Free Tools | OSHA Basics Quiz | What Should We Know?
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Without work one finishes nothing. - Ralph Waldo Emerson
© 2026 Fatskills.com