Midterm Exam Questions

Spring 2015

ANSWER KEY - MTA

Faculty of Business Studies

Arab Open University

Time Allowed: 2 Hours

Please Read the Following Instructions:

 This exam will be marked out of 100 marks and is worth 30% of the total mark
of B325 course.
 You have to choose three questions out of a set of four questions.
 You are expected to refer to course materials, provide critical analysis, and use
diagrams, illustrations, and practical examples from your own experience,
where applicable.
 You should keep the organization of the exam paper neat, use good English, and
write clearly using good handwriting.
 Any work crossed through will NOT be marked.
 Any form of cheating will NOT be tolerated and will subject you to AOU
Cheating Policy.

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(The answers are indicative. Students may attempt to formulate their answer in a
different way as long as they cover main ideas)

Question 1 (34 Marks)

The answer for this question is based on chapter 1 - “Managing to Collaborate” book.

A world of collaboration is a world in which you feel inspired.

A. Define collaborative advantage and collaborative inertia (10 Marks/5 each)

Collaborative Advantage is when collaboration between several bodies (industries,

agencies, governmental bodies, etc.) allows to achieve efficiency, growth, progress, etc.
reference their alliance (5 Marks).

Collaborative Inertia is when collaboration between two or more entities induces a slow
progress without achieving any tangible outcome (5 Marks).

B. Discuss the bases for collaborative advantage. Support your answer with
examples (24 Marks/4 each).

1- Access to Resources: (4 Marks)

• Organizations often collaborate if they are unable to achieve their objectives with
their own resources.
• Collaboration with other organizations allows to bring together different resources
including technology or expertise.
• Example: Inter-Company collaboration over taking a product to the market è One
company provides the product and the other provides the access to the market.

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 • Types of industries that choose this type of collaboration: very small
entrepreneurial businesses, large companies such as pharmaceutical industry
(where both activities – marketing and production are complex), companies seeking
new markets in new geographical areas

2- Shared Risk: (4 Marks)

• Organizations collaborate because the consequences of failure on a project are too
high for them to risk taking it on alone è They share the risk
• Example: Collaboration between cost-intensive research and development
organizations

3- Efficiency: (4 Marks)
• Governments have often seen private organizations as being more efficient than
public ones. The latter has promoted public-private partnerships (collaboration).
• Four different perspectives on efficiency:
• Efficiency stems from the notion of economies of scale
• Efficiency related to outsourcing activities (example: companies may
outsource support activities such as cleaning and catering to other
companies who can gain economies of scale)
• Operational efficiency: many purchasing and supply chain alliances are of this
sort. Purchasing companies gain efficiencies by ensuring that the delivery of
product is done on time and as per the agreed price. Supplying organizations
gain efficiencies by having a relatively predictable market.
• Coordination of services as to avoid duplication and thus ensure efficiency

4- Coordination and Seamlessness: (4 Marks)

• As seen above, coordination is an important element to achieve efficiency.
• Coordination is the act of organizing, making different people or things work
together for a goal or effect to fulfill desired goals in an organization. Coordination is
a managerial function in which different activities of the business are properly
adjusted and interlinked.

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 • Yet, coordination and seamlessness are not always inter-related:
• Repetition (duplication of an activity)
• Omission (leaving gaps in activity)
• Divergence (diluting activity across a range of activities)
• Counter production (pursuing conflicting activities)
are pitfalls obstructing collaboration.

5- Learning: (4 Marks)
• Basis of collaboration è pursue joint activities è Mutual learning
• Example: staff from automobile industry acting as trainers for their suppliers of
components/parts

6- Moral Imperative: (4 Marks)

• The most important reason for being concerned in collaboration is a moral one.
• Issues facing society (such as crime, drug, poverty, conflict, health promotion,
economic development, etc.) cannot be achieved if the organization acts alone.
• Collaboration is essential to alleviate any problems at the organization, industry,
society and national levels.

Question 2 (33 Marks)

To support the structure and strategic nature of a supply chain network, a focal actor
tends to set the network strategy and coordinate its implementation in a hierarchical
manner.

The answer for this question is based on chapter 5 - “Organizational Collaboration”

book.

A. Define supply chain network and explain the need for a focal actor in the
supply chain network (10 Marks/5 Marks).
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Definition of Supply chain networks (SCN) (5 Marks)

SNC embody collaboration of more than two firms. Their members maintain highly-
intensive and recurrent interactions with each other based on formal and informal
contracts.

Need for a focal actor (5 Marks)

To support its structure and strategic nature, a focal actor tends to set the network strategy
and coordinate its implementation in a hierarchical manner. This focal actor is typically
recognized by the consumers as “responsible” for the specific product. The managerial task
of the focal actor is to deal with problems of cooperation and coordination. While the
problems of cooperation arise from the conflicts of interests, the problems of
coordination originate from unawareness of the existing interdependencies
or the lack of one’s knowledge about the behavior of others (uncertainty).
More specifically, problems of cooperation and coordination can be viewed as
a consequence of distinctive goals that are established at the firm and
network levels of collaboration.

B- To reach consensus on network-level goals, goal compatibility between the

network and firm levels is highly important. Define and discuss what is meant
by goal compatibility. Identify and discuss, in the case of absence of goal
compatibility, the two types of power that can be used (23 Marks).

Goal Compatibility (11 Marks)

 Consensus on network-level goals depends on firms’ perceptions of
compatibility with their own goals on an ongoing basis. Perceived
incompatibility of goals leads to conflict among network actors and
makes them perform worse. The task of the focal company is to
maintain goal compatibility between the different levels of the supply
chain network.

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  The degree of goal compatibility is generally measured by:
 how compatible social and organizational characteristics of the
network actors are. The social context in which partners operate
is partly defined by the cultural and institutional backgrounds of
the partners. Furthermore, the similarity of cultural values may
reduce misunderstanding between the partners while lack of fit
with a partner’s culture leads to poor communication and mutual
distrust.
 The extent to which the firm-level objectives match the network
level goals depends on organizational compatibility.
Dissimilarities in organizational structures and processes can
create problems in coordination by causing disagreements over
operating strategies, policies, and methods. Organizational
dissimilarities are typically manifested in differences of
capabilities and strategies of firms. Opinions of the network
actors about managerial routines, marketing policies, quality
control, etc. may differ from those of the focal company. Thus, it
is necessary to ensure a certain level of cultural, organizational
and strategic fit of the network actors.

Incidence of Absence of goal compatibility (12 Marks/6 each)

Where goal compatibility is absent, there is a need for a power process. The
notion of power typically arouses associations with explicit domination of one
actor over the others. We have two types of power: coercive power and non-
coercive power.

 Coercive power (6 Marks)

 The focal actor can employ hierarchical mechanisms (e.g.
control, sanctions) to make the participants comply with the

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 network-level goals. However, not always acting in such a way
will have positive effects on partner compliance. Moreover, the
exercise of power based on coercive sources, e.g. financial
penalties or withholding of important support, can aggravate
communication difficulties caused by cultural dissimilarities and
elevate any underlying causes of conflict to a manifest state.
Thus, the use of hierarchical authority can deepen
incompatibility between the network-level and firm-level goals,
especially in the case of great cultural and geographic distance.

 Non-coercive power (6 Marks)

 Partnering and supply chain management strategies include also
mechanisms which represent non-coercive bases of power. The
use of such mechanisms as rewards, identification, and
information exchange enhances the partners’ willingness to exert
effort for the network-level goals. Furthermore, such a
mechanism as recommendations helps to achieve the desired
perceptual change of objectives and subsequent performance of
the intended behaviors.

Question 3 (33 Marks)

Managing multicultural teams has its own challenges; yet its own strategies to face
these strategies.

The answer for this question is based on chapter 13 - “Organizational Collaboration”

book.

A. Identify the four challenges that multicultural teams face. Choose two
challenges to discuss in more detail (17 Marks).

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We can identify four challenges (2 Marks/0.5 each)
• Direct versus indirect communication;
• Trouble with accents and fluency;
• Differing attitudes toward hierarchy and authority;
• Conflicting norms for decision making.

Students have to choose two challenges out of the four challenges to discuss
(15 Marks/7.5 each).

Direct versus Indirect Communication

 Communication in Western cultures is typically direct and explicit. The
meaning is on the surface, and a listener doesn’t have to know much
about the context or the speaker to interpret it (direct communication)
 This is not true in many other cultures, where meaning is embedded in
the way the message is presented (indirect communication).
 In cross-cultural negotiations, the non-Westerner can understand the
direct communications of the Westerner, but the Westerner has
difficulty understanding the indirect communications of the non-
Westerner.
 The differences between direct and indirect communication can cause
serious damage to relationships when team projects run into problems.
o Communication challenges create barriers to effective teamwork
by reducing information sharing, creating interpersonal conflict,
or both

OR
Trouble with accents and fluency
 Although the language of international business is English,
misunderstandings or deep frustration may occur because of non-
native speakers’ accents, lack of fluency, or problems with translation

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 or usage. These may also influence perceptions of status or
competence.
 Non-fluent team members may well be the most expert on the team,
but their difficulty in communicating knowledge makes it hard for the
team to recognize and utilize their expertise. If teammates become
frustrated or impatient with a lack of fluency, interpersonal conflicts
can arise.
 Nonnative speakers may become less motivated to contribute, or
anxious about their performance evaluations and future career
prospects. The organization as a whole pays a greater price: Its
investment in a multicultural team fails to pay off.

OR

Differing attitudes towards hierarchy and authority

 A challenge inherent in multicultural teamwork is that, by design,
teams have a rather flat structure. But team members from some
cultures, in which people are treated differently according to their
status in an organization, are uncomfortable on flat teams.
 If they defer to higher status team members, their behavior will be
seen as appropriate when most of the team comes from a hierarchical
culture; but they may damage their stature and credibility – and even
face humiliation – if most of the team comes from an egalitarian
culture.
 As a result of differing cultural norms, if team members believe they
have been treated disrespectfully, the whole project can blow up.

OR

Conflicting norms for decision making

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  Cultures differ enormously when it comes to decision making –
particularly, how quickly decisions should be made and how much
analysis is required beforehand (example: U.S. managers like to make
decisions very quickly and with relatively little analysis by comparison
with managers from other countries).
 Managers from other cultures may, for example, decline to share
information until they understand the full scope of a project. What to
do? The best solution seems to be to make minor concessions on
process – to learn to adjust to and even respect another approach to
decision making.

B. Four strategies are mainly used to deal with the above challenges. Identify
these strategies and choose two to discuss in more detail (16 Marks)

The four strategies are (2 Marks/0.5each)

 Adaptation (acknowledging cultural gaps openly and working around them).
 Structural intervention (changing the shape of the team).
 Managerial intervention (setting norms early or bringing in a higher-level manager).
 Exit (removing a team member when other options have failed).

Students have to choose two out the four strategies to discuss (14 Marks/7 each)

Adaptation
 Some teams find ways to work with or around the challenges they face, adapting
practices or attitudes without making changes to the group’s membership or
assignments.
 Adaptation works when team members are willing to acknowledge and name their
cultural differences and to assume responsibility for figuring out how to live with
them.

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  It’s often the best possible approach to a problem, because it typically involves less
managerial time than other strategies; and because team members participate in
solving the problem themselves, they learn from the process.
 When team members have this mind-set, they can be creative about protecting their
own substantive differences while acceding to the processes of others.

OR

Structural intervention
 A structural intervention is a deliberate reorganization or reassignment
designed to reduce interpersonal friction or to remove a source of
conflict for one or more groups.
 This approach can be extremely effective when obvious subgroups
demarcate the team (for example, headquarters versus national
subsidiaries) or if team members are proud, defensive, threatened, or
clinging to negative stereotypes of one another.
 Another structural intervention might be to create smaller working
groups of mixed cultures or mixed corporate identities in order to get
at information that is not forthcoming from the team as a whole.
 The sub grouping technique involves risks, however. It buffers people
who are not working well together or not participating in the larger
group for one reason or another. Sooner or later the team will have to
assemble the pieces that the subgroups have come up with, so this
approach relies on another structural intervention: Someone must
become a mediator in order to see that the various pieces fit together.

OR

Managerial intervention
 When a manager behaves like an arbitrator or a judge, making a final
decision without team involvement, neither the manager nor the team

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 gains much insight into why the team has disagreed. But it is possible
for team members to use managerial intervention effectively to sort
out problems.
 Managerial intervention to set norms early in a team’s life can really
help the team start out with effective processes.
OR

Exit
 Leaving the team is not a rare strategy for managing challenges.
 In short-term situations, unhappy team members often just waited out
till the project end. When teams were permanent (long term job), the
exit of one or more members was a strategy of last resort, but it was
used – either voluntarily or after a formal request from management.
 Exit is likely when emotions are running high and too much face had
been lost on both sides to salvage the situation.

Question 4 (33 Marks)

Goals are conceived in general by individuals but also are conceptualized as

belonging to the organization.

The answer for this question is based on chapter 2 - “Organizational Collaboration”

book.

A. Identify, define and critically discuss in detail the two types of goals. Support
your answer with examples (15 Marks, 7.5 each).

Students need to identify the two types of goals: superordinate goal and SMART goal.

What is a Superordinate Goal (7.5 Marks)

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  A Superordinate goal is like a “slogan” to induce/encourage people, to
translate a message to people
 “A Superordinate goal captures “the heart”. It focuses mainly on affect; it
appeals to emotion.
 A Superordinate goal is a bottom-up goal. Bottom-Up goals are more
powerful than Top-Down goal since they are expressed in the language of the
employees.
 Three questions allow the development of Bottom-Up Superordinate goals:
 Why do we exist as a unit?
 Who should miss us if we are gone?
 What is our primary source of discontent?
 Examples of Superordinate Goal:
 “I have a dream” – Martin Luther King;
 “The just society” – Prime Minister of Canada, Pierre Trudeau;
 Ask not what your country can do for you – ask what you can do for your
country” – John F. Kennedy
 “Learning through entertainment” – Walt Disney

What is goal setting? (7.5 Marks)

 Goal setting is a cognitive variable (i.e. based on understanding, knowledge,

observation, reasoning), whereas Superordinate goal aims only to affect.
 Goal setting is the manifestation of needs and values.
 The purpose of goal setting is to make the Superordinate goal concrete, to
move it from emotional to concrete action steps.

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  To achieve that goal must be Specific, Measurable, Attainable, Relevant and
have a Time-frame.
 In other words, we need to have a SMART goal as to transfer a “Superordinate
goal” into a “concrete goal”.
 Example: Walt Disney
 Superordinate goal: “Learning through entertainment”
 SMART goal: Putting in place the Epcot center that allows people to be
more knowledgeable and wiser after passing a day at the center than
they were in the morning when they came.

B- Identify and discuss in detail the three characteristics needed to ensure a good
goal setting (18 Marks/6 each).

Students need to identify the need for

- Integrity
- Accessibility
- Measurement

Integrity (6 Marks)
 Commitment to Superordinate and SMART goals is a must.
 Managers need to make sure that what they are saying is in line with the pre-set
goals (Superordinate and SMART goals).
 They need to pay extreme attention to the signals that they send unconsciously.
 Leaders need to set learning goals to make people comfortable.
 Informal channels are seen in general better than formal channel as to the
achievement of goals (discussion with employees over coffee, at lunch, etc.). The
managers can ask the employees about their opinion as regards the SMART goals
set, if they are still applicable, what need to be changed, what actions are taken by
the management and are hindering the goal achievement.

Accessibility (6 Marks)

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  It is difficult to be an effective leader when you are inaccessible to the people who
are on your team.
 Leaders need to be accessible for two reasons:
 Let people know what they are doing is noticed and appreciated with regard
to goal attainment
 To encourage opposition with the goals that are set. People in general have a
tendency to commit to what they know is wrong (Groupthink). People need
to say their honest opinion if to achieve goal even if it is against leader
opinion
 Leaders need to reinforce their behavior in accordance to Superordinate and SMART
goals. If they do not do so, indifference/laziness might emerge. As such recognizing
people and being close to them is an effective way to laziness and indifference.
 Consequently, in goal setting, sense of unity, sense of one team is very important.
 In addition, employees need to feel that their needs and welfare are taken into
consideration.

Measurement (6 Marks)
 “Which gets measured, gets done”.
 Measurement conveys clearly what organizational decision makers believe is
important, versus what they say is important.
 Effective leaders ensure that the measurement system is aligned with the
Superordinate and SMART goals.
 When dysfunctional behavior is observed, the cause more frequently lies in the goals
and/or measurement system than it does in the person who is exhibiting the
behavior.
 Measurement systems have to be set in accordance with the goals. If you change the
goal, than the behavior should be changed and hence the measurement system.

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 END OF EXAM

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