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Strategic Management Practice Test: Managing Internal Operations and Promoting Good Strategy Execution

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Strategic Management Practice Test: Managing Internal Operations and Promoting Good Strategy Execution

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1. A best practice""

refers to performing activities in a manner that conforms to established industry standards.refers to a company’s core competence.refers to the best-known procedure for performing a specific task or activity so as to achieve the lowest possible costs.refers to performing a particular value chain activity in “world-class” fashion (one unmatched by any other company in the world).is a technique for performing an activity or business process that at least one company has demonstrated works particularly well in terms of delivering some highly positive operating outcome.

2. A motivation and incentive system that is aimed at spurring stronger employee commitment to good strategy execution

must avoid the potential for negative consequences if performance is subpar.needs to put top priority on making employees happy and secure in their jobs.must involve deliberately assigning employees heavy workloads and tight deadlines.should be tied first and foremost to whether employees satisfactorily perform their assigned duties in an ethical and honorable manner.focus on incorporating more positive than negative motivational incentives.

3. Motivational and incentive compensation practices that aim at winning the commitment of company personnel to good strategy execution typically

strike a middle ground—entailing decidedly positive rewards for meeting or beating performance targets but also imposing sufficiently negative consequences when actual performance falls short of the target.put top priority on making employees happy and secure in their jobs.entail paying the highest wages and salaries in the industry and also stressing non-monetary rewards for high-performing employees.use only positive rewards and never involve the use of tension, fear, job insecurity, stress, or anxiety.aim at creating a no-pressure/no-adverse-consequences work environment.

4. Because functional organization structures often result in pieces of strategically relevant activities and capabilities being scattered across many different functional departments, companies have found that

it makes good organizational sense to combine those functional departments where fragmentation is a problem into a single department. TQM is a potent way to reengineer the work effort, avoid the shortcomings of a functional organization structure, and achieve rapid-response capability.it is necessary to give these functional departments the freedom to collaborate closely with each other to achieve the desired degree of coordination.it is necessary to outsource those activities that are fragmented to strategic partners in order to achieve the needed coordination.there’s merit in using business process reengineering to pull the pieces of strategy-critical processes out of different departments and unify their performance in a single department or cross-functional work group that has charge over the whole process.

5. Installing well-conceived state-of-the-art support systems are an important managerial component of implementing and executing strategy because

such systems are essential to being able to engage in effective benchmarking and continuous improvement.they are the basis for revamping value chains, boosting labor productivity, and reducing operating costs.such support systems not only enable better strategy execution but also strengthen organizational capabilities (perhaps enough to provide a competitive edge over rivals).they help managers run a tight ship and preserve strong, centralized control over internal activities.decentralized decision-making and employee empowerment cannot work well without having well-conceived information and operating systems to accurately benchmark internally-performed value chain activities against best-in-industry and best-in-class performe

6. Six Sigma’s DMADV process of define, measure, analyze, design and verify is a particularly good vehicle for

improving customer satisfaction whereas Six Sigma DMADV is used to improve manufacturing processes.achieving 100% control over how a task is performed and eliminating 100% of the variability in how a task is performed.developing new processes or products at Six Sigma quality levels.improving performance when there are wide variations in how well an activity is performed.improving performance when there are small variations in how well an activity is performed; if there are wide variations, then the Six Sigma DMVSI process has to be used.

7. Which one of the following statements about total quality management (TQM) is false?

Effective use of TQM entails creating a corporate culture bent on continuously improving the performance of every task and every value-chain activity.TQM aims at instilling enthusiasm and commitment to doing things right from the top to the bottom of the organization. TQM doctrine preaches that there’s no such thing as “good enough” and that everyone has a responsibility to participate in continuous improvement.Total quality management (TQM) is a philosophy of managing a set of business practices that emphasizes continuous improvement in all phases of operations, 100 percent accuracy in performing tasks, involvement and empowerment of employees at all levels, teTQM produces significant results very quickly—very little benefit emerges after the first six months.

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

Ways must be found to reward deserving non-performers who, for some reason, do not fare well under the incentive system.Make sure that the performance targets each individual or team is expected to achieve involve outcomes that the individual or team can personally affect.The reward system must be administered with scrupulous objectivity and fairness.The incentive plan should extend to all managers and all employees, not just top management.The payoff for meeting or beating performance targets must be a major, not minor, piece of the total compensation package.

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

acting as a powerful lever for changing employee attitudes about the need for a different incentive and reward system.by placing limits on independent action and painting new white lines to steer the actions and behavior of company personnel in a manner that is more conducive to good strategy execution and operating excellence.fostering the use of best practices, TQM, Six Sigma, and continuous improvement efforts.helping ensure that worker eligibility for incentive bonuses is measured consistently and awarded fairly.helping build employee commitment to strengthening the company's core competencies and competitive capabilities.

10. Well conceived, state-of-the-art information and operating systems

All of these.are valuable tools for shortening a company’s value chain, boosting work force morale and productivity, and simplifying the task of adopting best practices.are essential because business process reengineering efforts, TQM, Six Sigma, and benchmarking programs can't be carried out effectively without them.not only enable better strategy execution but also strengthen organizational capabilities (perhaps enough to provide a competitive edge over rivals).make it simple and easy to spot cost overruns and inefficiencies.

11. Some caution needs to be exercised in using performance-based compensation systems in multinational enterprises because

in some countries, incentive compensation runs counter to local customs and cultural norms.it detracts from having employees focus diligently on the duties and functions they are supposed to perform.managers and employees in some countries are not psychologically and emotionally strong enough to cope with performance-based pay systems.too much emphasis on pay-for-performance tends to have a negative impact on employee productivity.if performance-based pay exceeds 5 percent of total compensation, the result can be a serious decline in employee morale in those countries where pay scales are low.

12. Six Sigma processes

consists of a disciplined, statistics-based system aimed at producing not more than 10 defects per million iterations for a manufacturing or assembly process.are based on three principles: (1) all work is a statistically controllable process; (2) no well-controlled process allows variability; and (3) defect-free work requires tight statistical controls.can be used for both improving existing business processes and for developing new processes or products.can be used for developing new products or new business processes but not for improving existing products or business processes.can be used for improving products or business processes but not for developing new products or new processes.

13. The strategic role of a company's reward system is to

compensate employees for performing their assigned duties in a diligent fashion.relieve managers of the burden of closely monitoring each employee's performance.boost employee morale in ways that create widespread job satisfaction.boost labor productivity and help lower the firm's overall labor costs. enlist employees' energetic commitment to competent strategy execution and operating excellence by rewarding them, both monetarily and non-monetarily, for their contributions.

14. To build a total quality culture and achieve full value from the use of TQM or Six Sigma initiatives, managers can take such action steps as

instituting greater centralization of decision-making to help enforce strict compliance with quality control policies and procedures.signaling unequivocal and unyielding commitment to total quality and operating excellence; encouraging quality-supportive behaviors on the part of employees, empowering employees to make changes to improve quality; and using online systems to give employees immediate access to best practice information and experiences.stressing 100% accurate individual performance rather than group or team performance.dismissing employees who repeatedly fail to achieve 100% accuracy in their work after a 12-month trial period.requiring all company personnel to attend Six Sigma training programs and achieve “black belt” status.

15.

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
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ean, carefully managed budgets protect the company\'s financial condition and eliminate wasteful use of cash.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.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.Tight budget control is management\'s most powerful tool for first-rate strategy executionlean, 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.

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

basing the incentives on group performance rather than individual performance.having an outside wage and salary expert administer the system, so that there is no doubt as to its fairness and impartiality.making minimal use of non-monetary incentives and rewarding people for diligently performing their assigned duties.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).making the payoff for meeting or beating performance targets a major, not minor, piece of the total compensation package.

17. To obtain maximum benefits from benchmarking, best practices, reengineering, TQM, and Six Sigma programs aimed at facilitating better strategy execution, managers need to

build core competencies in TQM, Six Sigma, benchmarking, best practices adoption, and business process reengineering.have annual contests to see which part of the company is making the greatest strides in approaching operating excellence.have at least 50% of company personnel earn “green belts” in Six Sigma techniques.strive for 100% control over the variability in how each and every value chain activity is performed.start with a clear idea of what specific outcomes really matter, such as a Six Sigma defect rate or superior customer satisfaction, and then build a total quality culture that is genuinely committed to achieving these outcomes.

18. Enlisting employees’ sustained and energetic commitment to good strategy execution and achievement of the targeted strategic and financial objectives is best done by

resourceful and effective use of motivational incentives, both monetary and non-monetary.providing employees with a high degree of job security and attractive perks. having top executives commit to making employees the company’s most valuable competitive asset.developing core competencies in the use of TQM, Six Sigma programs, and business process reengineering.clever and innovative use of benchmarking and best practices.

19. The areas that information systems need to cover include

Financial performance dataCustomer dataAll of the aboveSupplier/partner/collaborative dataOperations data

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

that more policies/procedures work better than few policies/procedures and that strict enforcement always beats lax enforcement.to prescribe enough policies to give organizational members clear direction in implementing strategy and to place desirable boundaries on their actions, then empower them to act within these boundaries however they think makes sense.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.to prescribe enough policies and procedures that little is left to chance in performing value chain activities employees should have no leeway to do things in a manner that deviates from the company’s best practices standard.that strictly-enforced policies work better than loosely-enforced policies.

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

aggressive use of TQM and Six Sigma quality control programs.empowering employees and encouraging them to adopt best practices.setting stretch objectives.the establishment of strategy-supportive policies and procedures.a system of rewards and incentives tied tightly to the achievement of the targeted strategic and financial performance.

22. The backbone of identifying, studying, and implementing best practices is

Six Sigma quality control techniques.a corporate culture that has a core value of operating excellence.business process reengineering.innovative application of TQM techniques. benchmarking.

23. Prescribing new policies and operating procedures can aid the task of implementing strategy

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

24. Which one of the following is not a tool that company managers can use to promote operating excellence in performing value chain activities?

Business process reengineeringAdoption of standard industry techniquesTQM and/or Six Sigma quality control techniquesBenchmarkingAdoption of best practices

25. Management’s most powerful tool for mobilizing employee commitment to competent strategy execution and operating excellence is

TQM and/or Six Sigma programs.proper use of incentives and rewards.periodic inspirational speeches aimed at arousing employees’ emotional energy.diligent and persistent use of benchmarking and best practices.providing employees with a high degree of job security (ideally, via a no-layoff policy).

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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 |

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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
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