Full Name: Nguyen Thi Viet Huong

Class: Advanced Finance 56 B

EXAM CRAFTING & EXECUTING STRATEGY
Chapter 10
1

Management's handling of the strategy implementation/execution process can be

considered successful
A)
so long as a company is profitable.
B)
C)
D)
E)

if and when the company meets or beats its performance targets and shows good
progress in achieving its strategic vision for the company.
once the company's management team convinces a majority of company
personnel that the company is headed in the right direction.
if management is able to put the strategy in place within 6 months.
once a capable top management team has been hired, employees have been
appropriately empowered, and effective training programs for company personnel
have been put in place.

Answer:
B
2

Which of the following is not one of the principal managerial components associated with
implementing and executing strategy?
A) Building an organization with the competencies, capabilities, and resource
strengths needed to carry out the strategy successfully.
B)
Allocating sufficient budgetary resources to the strategy execution process.
C)
D)
E)

Reducing the layers of management to a bare minimum and making sure

employees are empowered
Adopting best practices and pushing for continuous improvement in how value
chain activities are performed
Instilling a corporate culture that promotes good strategy execution

Answer:
C
3

The three organization-building actions paramount in the task of trying to execute a

company's strategy are

A)
B)
C)
D)
E)

delegating authority to down-the-line managers and doing a good job of

empowering employees, deciding which value chain activities to outsource, and
choosing an organization chart that suits the strategy.
persuasively communicating the case for organizational change to down-the-line
managers and employees, using organization structures based on empowered
teams, and selecting the right people to staff the organization.
staffing the organization, building and strengthening core competitive and
competitive capabilities, and structuring the organization and work effort.
de-layering management hierarchies, deciding which competencies and
capabilities to build, and deciding which value chain activities to outsource.
avoiding business process fragmentation, deciding which value chain activities to
outsource, and allocating sufficient time and resources to employee training.

Answer:
C
4

The overriding aim in building a management team should be to

A) 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 a few star managers acting individually can achieve.
B)
select people who are charismatic and good communicators.
C)
D)
E)

choose managers who have substantial experience in the industry.

assemble a team of people who believe in the same leadership approaches and use
the same approaches to people management.
choose managers who have the same core values and ethical standards.

Answer:
A
5

Employee training and retraining

A) tend to be strategically important in organizational efforts to create organizational
capabilities but are less useful in trying to help teach employees skills-based
competencies.
B) are often a valuable and necessary strategy-implementing and strategy-executing
element but cannot be relied upon to help teach empowered employees how to do
their jobs better.
C) come into play primarily when core business processes are fragmented across
several functional areas and departments and training is needed to teach
employees how to overcome the fragmentation through better cross-department
collaboration and cooperation.
2

D)

E)

merit high-priority on management's strategy-implementing agenda when a firm

revises its strategy in ways that call for new skills or different know-how,
operating methods, and competitive capabilities and also become a key activity in
businesses where technical know-how is changing so rapidly that a company loses
its ability to compete unless its skilled people have cutting-edge knowledge and
expertise.
becomes particularly significant in a company's organization-building effort if it
opts to decentralize decision-making and empower its employeesempowered
employees have to be trained to make the correct decisions.

Answer:
D
6

Which one of the following is not part of organizing the work effort in ways that promote
successful strategy execution?
A) Making internally performed strategy-critical value chain activities the main
building blocks in the organization structure
B) Deciding which value chain activities to perform internally and which to
outsource
C) Determining how much authority to centralize at the top and how much to
delegate to down-the-line managers and employees
D) Forming a special department or work unit to lead the company's effort to capture
strategic and resource fits
E) Providing for cross-unit coordination and the necessary collaboration with
suppliers and strategic allies
Answer:
D

Which of the following statements are right about matching the type of organizational
structure to strategy execution requirements?
A) The type of organizational structure that is most suitable for a given firm will
depend on the firm's size and complexity as well as strategy.
B) As firms grow and their needs for organizational structure evolve, their structural
form is likely to evolve.
C) The four basic types are the simple structure, the functional structure, the
multidivisional structure, and the matrix structure.
D) Organizational structures can be classified into a limited number of standard
types.
E)
All of these.
Answer:
E
3

10

Which one of the following falsely describes a centralized approach to decision-making?

A) Decisions on most matters of importance should be pushed to managers up the
line who have the experience, expertise, and judgment to decide what is the wisest
or best course of action.
B) Hierarchical command-and-control structures speed an organization's responses to
changing conditions because top-level managers are in a position to quickly
review the situation and make a final decision.
C) Tight control by a few senior managers makes it easy to fix accountability when
things do not go well.
D) There is an assumption that frontline personnel have neither the time nor the
inclination to direct and properly control the work they are performing, and that
they lack the knowledge and judgment to make wise decisions about how best to
do their work.
E) Top management operates on the belief 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.
Answer:
B

The basic tenets of a decentralized organizational structure include the thesis that
A) a company that draws on the combined intellectual capital of all its people can
outperform a command-and-control company.
B) lower-level managers and personnel seldom have the expertise and wisdom to
decide what is the wisest and best course of action; hence, tight management
control from the top makes the most sense.
C) decision-making authority should be put in the hands of the people closest to and
most familiar with the situation, and these people should be trained to exercise
good judgment.
D) most company personnel have neither the time nor the inclination to direct and
properly control they work they are performing.
E) a company that draws on the combined intellectual capital of all its people can
outperform a command-and-control company and decision-making authority
should be put in the hands of the people closest to and most familiar with the
situation, and these people should be trained to exercise good judgment.
Answer:
E

One of the big challenges of organizing and managing a work environment where
employees are empowered to make decisions in their area of responsibility is

A)
B)

C)
D)
E)

how to exercise control over the actions and decisions of empowered employees
so that the business is not put at risk while trying to capture the benefits of
employee empowerment.
how to avoid high levels of stress and anxiety among empowered employees
(since they are held accountable for their decisions). those individuals that are
given greater levels of authority and responsibility motivate and challenge those
senior managers who no longer have a heavy decision-making load.
how many employees to empower.
how to identify and weed out those empowered employees who prove to be poor
decision-makers.
keeping lower-level managers and employees properly trained in how to make
good decisions.

Answer: A
EXAM CRAFTING & EXECUTING STRATEGY
Chapter 11
1

From a strategy-implementing/strategy-executing perspective, a company's operating budget

should
A)
primarily be based on creating more core competencies than rivals have.
B)
C)
D)
E)

be strategy-driven and based primarily on how much each organizational unit needs
to carry out its piece of the strategic plan efficiently and effectively.
be based on the resources needed to lower the costs of performing each value chain
activity.
provide each operating unit with sufficient funds to undertake benchmarking, adopt
best practices, implement Six Sigma and/or TQM, and do cutting-edge business
process reengineering.
strongly support the company's established policies and procedures regarding how
things are to be done.

Answer:
B

Prescribing policies and operating procedures aid the task of implementing strategy by
A)
helping empower product champions and work teams.
B)

paving the way for instituting TQM or Six Sigma programs and adopting best
practices.

C)
D)
E)

by providing top-down guidance about how certain things need to be done.

helping prevent the corporate culture from being unhealthy and weak.
pushing employees to accept the need for state-of-the-art operating and support
systems.

Answer:
C

A "best practice"
A)
refers to the lowest-cost procedure for performing a specific task or activity.
B)
C)
D)
E)

refers to performing strategy-critical activities in a manner that results in fewer than

5 defects per million.
is the particular value chain activity that a firm performs best.
is a method of performing an activity that has been shown consistently deliver
superior results compared to other methods.
is a procedure for performing an activity that companies in an industry have
"proven" is the most reliable and failsafe way to perform that activity.

Answer:
D

Which of the nonmonetary rewards helps ensure that people in positions of responsibility
have knowledge specific to the business, technology, and operations they are managing?
A)
Relying on promotion from within whenever possible
B)
C)
D)
E)

Inviting and acting on ideas and suggestions from employees

Providing attractive perks and fringe benefits
Giving awards and other forms of public recognition to high performers
Creating a work atmosphere in which there is genuine caring

Answer:
A

Business process reengineering is a tool for

A)
remodeling and refreshing a strategy-critical core competence.
B)
C)
D)
E)

involves radically redesigning and streamlining how an activity is performed

reducing the size of a company's managerial bureaucracy.
boosting the quality of a company's product and the caliber of its customer service.
expediting the development of an important new competitive capability.

Answer:
B

Total quality management (TQM)

A) is a philosophy of managing that involves convincing employees that superior
product quality is the most reliable key to competitive success in the marketplace.
B) is a tool for providing customers with the highest quality product of any company
in the industry.
C) involves managing company operations in a manner calculated to quickly and
efficiently make quantum gains in the quality and effectiveness with which
production activities are performed.
D) is a philosophy that entails creating a total quality culture bent on continuously
improving the performance of every task and value chain activity.
E) involves managing company operations in a manner calculated to result in mistakefree management of a company's entire business.
Answer:
D

Six Sigma quality program

A) is a tool that is superior to TQM in achieving top-notch quality in manufacturing a
product.
B) consists of a disciplined, statistics-based system aimed at producing not more than
2.5 defects per million iterations.
C) utilizes advanced statistical methods to improve quality by reducing defects and
variability in the performance of business process.
D)
is the best practice for managing manufacturing and assembly activities.

E)

is a disciplined, statistics-based approach to manufacturing or assembling a product

and results in 5 defects per million iterations when implemented properly.

Answer:
C

The use of state-of-the-art information and operating systems

A) not only enable better strategy execution but also strengthen organizational
capabilities (perhaps enough to provide a competitive edge over rivals).
B)
are the most effective way to realize a competitive edge over rivals.
C)
D)
E)

help managers run a tight ship and properly monitor the actions and decisions of
empowered employees.
make it easier to develop strategy-supportive policies and procedures.
make the use of TQM or Six Sigma programs substantially more cost-effective.

Answer:
A

Management's most powerful tool for mobilizing employee commitment to competent

strategy execution and operating excellence is
A)
total quality management.
B)
C)
D)
E)

business process reengineering.

a properly designed reward structure.
making the company a great place to work in terms of pay scales, fringe benefits,
and employee perks.
effective screening of job applicants such that only the most motivated and
energetic people are hired.

Answer:
C

10

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

A)
B)
C)
D)
E)

Making the performance payoff a major, not minor, piece of the total compensation
package
Keeping performance incentives and bonuses to less than 15% of total
compensation
Not skirting the system to find ways to reward effort rather than results and making
sure that the performance targets that each individual or team is expected to achieve
involve outcomes that the individual or team can affect
Having incentives that extend to all managers and all workers and generously
rewarding people who turn in outstanding performances
Tying incentives to performance outcomes directly linked to good strategy
execution and financial performance and keeping the time between achieving the
target performance outcome and the payment of the reward as short as possible

Answer:
B