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Chapter 2 Strategy and Human Resources Planning
Human Resource Management (University of the Fraser Valley)
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Chapter 2 - Strategy and Human Resources Planning

1. What is the first step in the strategic planning process?
a. putting together the human resource management team
b. executing the human resource plan
c. establishing the mission, vision, and values of the organization
d. aligning the human resource plan and the strategic plan
ANSWER: c
2. What is the relationship between human resource planning and strategic human resource management?
a. Strategic human resource management is narrower in scope than human resource
planning.
b. Strategic human resource management is broader in scope than human resource
planning.
c. Human resource planning is the same as strategic human resource management.
d. Human resource planning is more important than strategic human resource
management.
ANSWER: b
3. Which of the following is a typical activity undertaken by human resource management professionals in a SWOT
analysis?
a. gauging the external supply of labour
b. analyzing the organization’s core competencies
c. reconciling labour supply and demand
d. analyzing the industry and competitors
ANSWER: a
4. Which of the following is a typical activity undertaken by human resource management professionals at the strategy
implementation stage?
a. conducting human resource forecasting for the demand of labour
b. helping to capture the underlying business philosophy
c. helping to analyze the workforce’s culture
d. using performance management to achieve organizational strategy
ANSWER: d
5. HR planning requires HR managers to focus more on an alignment between HR plans and which of the following?
a. the organization’s financial strategy b. the organization’s marketing position
c. the organization’s strategic plan d. the competitive environment
ANSWER: c
6. On the entrance to Mac Pencils’ factory are the words “to provide the world with high-quality and dependable pencils.”
What is this an example of?
a. strategic b. mission
vision
c. core values d. core
resources
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ANSWER: b
7. Which of the following best captures the strategic intent of the organization?
a. its mission b. its vision
c. its core d. its strategic human resource plan
values
ANSWER: b
8. Which of the following best describes the core values of a company?

a. They represent the alignment of the strategic plan with the human resource
plan.
b. They are strong enduring beliefs and principles of the company.
c. They are the basic purpose of the organization.
d. They provide a perspective on where the company is headed.
ANSWER: b
9. During its strategic retreat, the top management team at IAMME Gold Corporation pondered on the question “What’s
the organization reason for being?” What was the team most likely focusing on?
a. the firm’s strategic vision b. the firm’s core values
c. the firm’s mission d. the firm’s competitive position
ANSWER: c
10. As part of its strategic planning process, TJX Corporation is involved in a systematic, regular monitoring of major
external forces influencing the organization. What is this process called?
a. external b. human resource
forecasting planning
c. Markov analysis d. environmental scanning
ANSWER: d
11. Which of the following is NOT generally considered a component of a firm’s competitive environment?
a. rival firms b. new entrants
c. labour d. suppliers
laws
ANSWER: c
12. Which of the following deliberations on the competitive environment generally involves an active role by HR
managers?
a. an analysis of new entrants
b. an analysis of the supply and demand for labour
c. coordination with suppliers
d. minimizing the technical advantages of rival
firms
ANSWER: b
13. What do we call integrated knowledge sets within an organization that distinguish it from its competitors and deliver

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value to customers?
a. core b. competitive advantage
capabilities
c. human capital d. organizational competencies
ANSWER: a
14. An organizations’ core capabilities consist of three components. Which of the following is NOT one of them?
a. processe b. systems
s
c. people d. cultural
audit
ANSWER: d
15. What do we consider the firm’s resources to be when they improve the efficiency or effectiveness of the company?
a. difficult to imitate b. valuable
c. organized d. rare
ANSWER: b
16. Which statement best describes strategic knowledge workers?

a. They have skills that are valuable but not unique.
b. They have firm-specific skills directly related to company strategy.
c. They have unique skills directly linked to the company’s strategy.
d. As consultants, they have strategic skills.
ANSWER: c
17. Which statement best describes the skills of core employees?

a. Their skills are not directly related to company strategy.
b. They have firm-specific skills directly related to company strategy.
c. They have skills that are valuable but not unique.
d. Their skills are available to all firms.
ANSWER: c
18. From an organization’s perspective, what is an important shortcoming of having to rely on part-time employees?
a. limited b. costs of continuous replacement
benefits
c. lack of training d. no job security
ANSWER: b
19. As part of the strategic planning process, XYZ Inc. recently examined the attitudes and activities of the company’s
workforce. What was XYZ doing?
a. an environmental b. a cultural audit
scan
c. a trend analysis d. a demand forecast
ANSWER: b

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20. Which of these groups is a secondary stakeholder of an organization?
a. investor b. employees
s
c. supplier d. news
s reporters
ANSWER: d
21. What is values-based hiring?

a. hiring employees whose values correspond to their corporate cultures
b. hiring employees based on good ethical values
c. hiring decisions that lead to new values being adopted by the
company
d. hiring executives who then instill their values in the company
ANSWER: a
22. Which of the following best describes forecasting human resources needs?
a. It is scientific and relatively error-free.
b. It is difficult and should only be done on rare occasions.
c. It should rely strictly on quantitative approaches, which utilize sophisticated analytical
models.
d. It estimates the number and type of people that are needed to meet organizational
objectives.
ANSWER: d
23. Which of the following should you take into account when forecasting demand?
a. absenteeism b. turnover
c. business d. labour mobility
cycles
ANSWER: c
24. Which of the following is used in forecasting the demand of labour?

a. replacement b. Markov analysis
charts
c. trend analysis d. succession
planning
ANSWER: c
25. XYZ Corporation wants to track the percentage and actual number of employees who remain in each of the firm’s job
from one year to the next. Which of the following would XYZ Corporation benefit from?
a. a replacement b. a skills inventory
chart
c. a Markov analysis d. a succession
plan
ANSWER: c

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26. Manning Logistics laid off nine employees from data-entry positions in its finance division. Two weeks later, it hired
15 employees into data-entry positions in the inventory division. What mistake has the company committed?
a. faulty cultural audit b. not forecasting properly
c. faulty goal d. not analyzing the internal labour
alignment force
ANSWER: b
27. What is the difference between trend analysis and management forecasts?
a. Trend analysis is used to analyze the business environment and management forecasts
predict labour needs.
b. Trend analysis uses organizational indexes and management forecasts utilize statistical
techniques.
c. Trend analysis is quantitative and management forecasts are qualitative.
d. Trend analysis has proven success and management forecasts have major
shortcomings.
ANSWER: c
28. Which of the following is a graphical representation of all organizational jobs along with the numbers of employees
currently occupying those jobs and future employment requirements?
a. a Markov b. a trend analysis
analysis
c. a skills inventory d. a staffing table
ANSWER: d
29. What is the most important information obtained from a Markov analysis?
a. human capital readiness
b. what types of attitudes employees have
c. what positions are going to be coming open and will require a new
hire
d. how many individuals are ready for promotion
ANSWER: c
30. Which of the following is NOT a qualitative approach to demand forecasting?

a. trend analysis b. Delphi technique
c. soliciting expert opinion d. management forecast
ANSWER: a
31. Which of the following is the process of identifying, developing, and tracking key individuals so that they may
eventually assume top-level positions?
a. target forecasting b. predicted change
c. succession d. replacement
planning selection
ANSWER: c
32. As part of the SWOT analysis, the internal analyses of the firm would include an analysis of which of the following?

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a. opportunitie b. strategy
s
c. threats d. weaknesses
ANSWER: d
33. Which of the following is included in an external analysis of an organization in a SWOT analysis?
a. An analysis of its strengths. b. An analysis of its core
capabilities.
c. An analysis of its d. An analysis of its opportunities.
weaknesses.
ANSWER: d
34. Which of the following is a cooperative strategy pursued by firms?

a. joint ventures b. mergers
c. acquisitions d. diversificatio
n
ANSWER: a
35. In what way can HR best help ensure that a strategic alliance or joint venture goes smoothly in the beginning?
a. plan labour supply needs for both organizations
b. systematically monitor employee morale for both organizations
c. teach employees about the other organization
d. assess the compatibility of the two organizational cultures
ANSWER: d
36. What do we call the internal alignment of HR practices to establish a configuration that is mutually enforcing?
a. vertical fit b. horizontal
fit
c. HR d. enforcing fit
alignment
ANSWER: b
37. What do we call reducing the workforce through the departure of employees who resign or retire?
a. attrition b. contraction
c. contracting d. termination
out
ANSWER: a
38. Organization Y is a unionized textiles manufacturing company that is downsizing. What will Organization Y most
likely use when deciding whom to lay off first?
a. seniority
b. the payroll
c. what skills and abilities the company needs to
thrive
d. talent

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ANSWER: a
39. Severance pay is usually calculated based on which of the following?

a. the employee’s years of service and salary
b. complex formulas administered by the federal
government
c. the employee’s skills and abilities
d. the employee’s education and performance
ANSWER: a
40. ATM Company has experienced a recent growth in its business. Which of the following is NOT a likely response to its
new HR demands?
a. Hire full-time b. Ask employees to work over-time
employees
c. Allow for attrition d. Use contract workers
ANSWER: c
41. What is an HR “dashboard”?

a. a strategic tool developed by the Boston Consulting Group
b. a SWOT analysis at the HR level
c. a balanced scorecard
d. a software that tracks and graphically displays HR
statistics
ANSWER: d
42. What is the term for the process that is used to identify “best practices”?
a. benchmarking b. balancing the
scorecard
c. HR d. Markov analysis
“dashboard”
ANSWER: a
43. Which term refers to an enthusiastically adopted tool for mapping a firm’s strategy in order to ensure strategic
alignment?
a. target forecasting b. predicted focus
c. balanced d. replacement selection
scorecard
ANSWER: c
44. Which of the following is an important use of the balanced scorecard?

a. to help balance internal and external fit
b. to help managers translate their firms’ strategic goals into operational objectives
c. to help managers balance the costs and benefits of HR strategies
d. to help with the SWOY analysis

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ANSWER: b
45. Which of the following can be used to translate strategic goals to operational objectives?
a. a Markov b. a replacement chart
analysis
c. a skills inventory d. a balanced
scorecard
ANSWER: d
Scenario 2.1
Blockbuster Canada was the first of its kind in Canada in the movie and games rental business and operated for more than
21 years. However, with the advent of more modern technology accessible mainly through Netflix and Rogers On
Demand, Blockbuster struggled to stay relevant in a tech-savvy environment where videos and games could now be
rented conveniently from the comfort of one’s couch via computer or TV. Despite efforts to try to stay relevant,
Blockbuster did not leverage technology that had become an important part of their consumer base’s daily lives. As a
result, Blockbuster was not able to fight off the competition.
46. Refer to Scenario 2.1. To remain competitive, Blockbuster Canada needed to systematically monitor the major
external forces influencing the movie/game rental business. Which of the following would be important to its success?
a. analysis of the internal b. environmental scanning
environment
c. changes in demographics d. changes in its mission, vision, and values
ANSWER: b
47. Refer to Scenario 2.1. Blockbuster Canada managers could have successfully advanced the company and remained
relevant by focusing on which of the following?
a. an environmental analysis
b. what they do best, traditional rentals
c. technological changes including information technology and
innovations
d. incentives to keep consumers coming back
ANSWER: c
48. Refer to Scenario 2.1. What is one of the most important assessments a firm like Blockbuster could have made in
order to stay relevant?
a. identifying the needs of its customers b. identifying the needs of its
producers
c. identifying the needs of its d. teaming up with the competition
employees
ANSWER: a
49. Refer to Scenario 2.1. Blockbuster’s competitive environment includes which of the following?
a. its customers, HR strategy, new entrants, core capabilities
b. its environmental scanning and analysis
c. its environmental analysis, strategic planning, and HR strategy

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d. its customers, rival firms, new entrants, substitutes, and
suppliers
ANSWER: d
50. Refer to Scenario 2.1. For years, Blockbuster survived as a successful entity with various competitors until Netflix and
Rogers On Demand began making movies and games available online. Which of the following most likely contributed to
Blockbuster going out of business?
a. economic, global, political, and environmental factors
b. technological, psychological, and physical factors
c. technological changes, social concerns, and demographic and labour market
trends
d. the lack of knowledge workers
ANSWER: c
Scenario 2.2
Avie Products Inc. is planning to add a third shift to its production schedule. It currently has 450 workers involved in all
aspects of its fertilizer business, best done in Canada. A recent surge in demand from its global customers is driving the
need for more workers; however, Simi Meher, the CEO, is concerned that the surge may be temporary, especially in light
of the recent economic downturns in the global environment where Avie does business.
51. Refer to Scenario 2.2. Which approach could Avie use to forecast demand for its products?
a. staffing tables b. Markov analysis
c. skill inventories d. trend analysis
ANSWER: d
52. Refer to Scenario 2.2. What would assist Avie in determining how many additional workers it would need for the third
shift?
a. reconciling supply and b. Markov analysis
demand
c. replacement charting d. trend analysis
ANSWER: a
53. Refer to Scenario 2.2. What is the best strategy for Avie to follow with respect to workers on the third shift?
a. hire full-time employees to get their
commitment
b. hire part-time staff
c. get management to do the extra work
d. outsource the work to India
ANSWER: b
54. Refer to Scenario 2.2. Assume that Avie goes ahead with the third shift. What can the company use to evaluate the
effectiveness of this strategy in a year’s time?
a. Markov b. trend analysis
analysis
c. skill inventories d. benchmarking

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ANSWER: d
55. Strategic human resource management combines human resource planning and strategic planning.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
56. Increased emphasis on HR issues becomes especially critical when organizations consider global strategies, relocation
of plants, product innovation plans, and so forth.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
57. Human resources planning plays a key role in organizational strategy implementation because organizational leaders
must make decisions regarding resource allocations to human capital, among other things.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
58. Forecasting labour supply is an aspect of human resource planning.

a. True
b. False
a. True
b. Fals
e
ANSWER: True
59. Human resources planning (HRP) is the conducting of recruitment and selection methods according to a strategic plan.
a. True
b. False
a. True
b. Fals
e
ANSWER: Fals
e
60. The mission statement of an organization is a description of the organization’s vision and values.

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a. True
b. False
a. True
b. Fals
e
ANSWER: Fals
e
61. Organizational core values are the strong enduring beliefs and principles that a company uses as a foundation for its
decisions.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
62. Environmental scanning involves the systematic monitoring of internal factors influencing the organization.
a. True
b. False
a. True
b. Fals
e
ANSWER: Fals
e
63. Economic factors in environmental scanning include general and global conditions.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
64. Gauging demographic trends is an aspect of the external analysis in a SWOT analysis.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
65. Utilizing a balanced scorecard is an aspect of the internal analysis in a SWOT analysis.
a. True
b. False
a. True

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b. Fals
e
ANSWER: Fals
e
66. National and regional unemployment rates are often considered a general barometer of labour supply.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
67. Investors are primary stakeholders of an organization.

a. True
b. False
a. True
b. Fals
e
ANSWER: True
68. Suppliers are secondary stakeholders of an organization.

a. True
b. False
a. True
b. Fals
e
ANSWER: Fals
e
69. Internal analysis provides strategic decision makers with an inventory of organizational skills and resources.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
70. A cultural audit asks questions such as “How do employees spend their time?”
a. True
b. False
a. True
b. Fals
e
ANSWER: True

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71. Core capabilities are integrated skills and knowledge sets within an organization that distinguish it from its
competitors and deliver value to customers.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
72. Core capabilities provide a long-term basis for technological innovation, product development, and service delivery.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
73. In general, contract labour possesses skills and knowledge of less strategic value to the organization than core
knowledge workers.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
74. Organizations such as Canadian Tire and CIBC conduct cultural audits to examine the attitudes and activities of the
external workforce.
a. True
b. False
a. True
b. Fals
e
ANSWER: Fals
e
75. A cultural audit may examine how people are empowered.

a. True
b. False
a. True
b. Fals
e
ANSWER: True
76. A cultural audit asks questions such as “What is the ethnic make-up of my workforce?”
a. True
b. False

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a. True
b. Fals
e
ANSWER: Fals
e
77. There are two approaches to HR forecasting: quantitative and qualitative.

a. True
b. False
a. True
b. Fals
e
ANSWER: True
78. Trend analysis is a qualitative approach to labour demand forecasting.

a. True
b. False
a. True
b. Fals
e
ANSWER: Fals
e
79. Trend analysis relies on a single business factor.

a. True
b. False
a. True
b. Fals
e
ANSWER: True
80. Forecasting may be as informal as having one person familiar with the organization anticipate HR needs.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
81. Management forecasts are quantitative measurements of future employment needs.

a. True
b. False
a. True
b. Fals
e
ANSWER: Fals

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e
82. The Delphi technique works best in organizations where dynamic technological changes affect staffing levels.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
83. Staffing tables provide data on external labour supply sources.

a. True
b. False
a. True
b. Fals
e
ANSWER: Fals
e
84. Markov analysis is a systematic monitoring of the major external forces influencing an organization.
a. True
b. False
a. True
b. Fals
e
ANSWER: Fals
e
85. Markov analysis focuses on the number of employees in particular jobs and their skill levels, compensation, and job
tenure.
a. True
b. False
a. True
b. Fals
e
ANSWER: Fals
e
86. Succession planning is the process of identifying, developing, and tracking key individuals so that they may
eventually assume top-level positions.
a. True
b. False
a. True
b. Fals
e
ANSWER: True

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87. Replacement charts are listings of current jobholders who are potential replacements if an opening occurs.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
88. SWOT analysis includes the strengths only for strategy formulation purposes.
a. True
b. False
a. True
b. Fals
e
ANSWER: Fals
e
89. For Microsoft, brand recognition can be classified as a strength in the SWOT analysis.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
90. Value creation is what the firm adds to a product or service by virtue of making it; it’s the amount of benefits provided
by the product or service once the costs of making it are subtracted.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
91. Through human resources planning, organizations strive for a proper balance between demand considerations and
supply considerations.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
92. Decisions about employee layoffs are usually based on seniority and/or performance.
a. True
b. False
a. True

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b. Fals
e
ANSWER: True
93. A disadvantage of overemphasizing seniority is that less competent employees receive the same rewards and security
as more competent employees.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
94. Attrition is the fastest way to achieve workforce reduction.

a. True
b. False
a. True
b. Fals
e
ANSWER: Fals
e
95. In unionized firms, layoffs are typically based on performance.

a. True
b. False
a. True
b. Fals
e
ANSWER: Fals
e
96. Attrition and early retirement are means for organizations to reduce excess labour.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
97. Under the umbrella of layoff strategies are several work reduction options: reduced workweek, reduced shifts,
transfers to related companies, and so on.
a. True
b. False
a. True
b. Fals
e

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ANSWER: True
98. The use of part-time employees creates a problem of labour costs at fast-food restaurants.
a. True
b. False
a. True
b. Fals
e
ANSWER: Fals
e
99. Over time, organizations may try to reduce their workforce by relying on attrition.
a. True
b. False
a. True
b. Fals
e
ANSWER: Fals
e
100. Severance pay is a lump-sum payment given to terminated employees.

a. True
b. False
a. True
b. Fals
e
ANSWER: True
101. Benchmarking is the process of comparing the organization’s processes and practices with those of other companies.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
102. Internal fit (or alignment) means that HR practices are aligned with one another in a mutually reinforcing
configuration.
a. True
b. False
a. True
b. Fals
e
ANSWER: True
103. Describe how human resources planning is integrated with strategic planning.

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ANSWER Through strategic planning, organizations set major objectives and develop plans to
: achieve those objectives. HRP provides a set of inputs that determine what is or is
likely to be possible, given the number of available people, training needs, and other
people-related issues. HR strategies and action plans are developed according to the
overall strategic goals that evolve from the strategy formulation process. During the
strategy implementation phase, HRP must make resource allocation decisions, and
implement policy, practices, and training that support the decisions and outcomes of the
strategic planning process.
104. Describe the three key elements of the HRP model.

ANSWER The three key elements in the HR planning process are (1) forecasting demand, (2)
: forecasting supply, and (3) balancing supply and demand considerations.
Forecasting demand involves estimating in advance the number and type of people
needed to meet organizational objectives. It may involve a quantitative approach using
statistical analysis and mathematical models or a qualitative approach focusing on
employee performance and promotability.
Forecasting supply determines if there are sufficient numbers and types of employees
available to staff anticipated openings. Sources of supply can be external or internal.
HR planning should strive for a proper balance between the emphasis placed on
demand considerations and that placed on supply considerations. Demand
considerations are based on the forecast of trends in business activity. Supply
considerations involve the determination of where and how candidates with the
required qualifications are to be found to fill vacancies.
105. Identify and briefly describe three strategies that managers frequently use to cope with a labour shortage.
ANSWER (1) Overtime (i.e., asking employees to work extra hours) is a strategy used by most
: firms during peak periods. (2) Increasingly, organizations are using part-time
employees to increase flexibility in scheduling and reducing payroll costs. Many
organizations use part-time or contract employees to cover the absences of regular, full-
time employees. (3) In addition, nine out of ten Canadian companies—both large and
small—make some use of temporary employees. “Temps” are typically used for short-
term assignments, vacation fill-ins, for peak work periods, or to cover for employees
taking sick leave, pregnancy leave, and so forth.
106. Explain how the balanced scorecard can be used by HR professionals in measuring a firm’s strategic alignment?
ANSWER The balanced scorecard (BSC) can be used by HR professionals to map a firm’s
: strategy to ensure strategic alignment. The BSC is a framework that helps managers
translate their firm’s strategic goals into operational objectives. The model has four
related cells: (1) financial, (2) customer, (3) processes, and (4) learning.
The logic behind BSC is firmly rooted in HRM. People management and learning help
organizations improve their internal processes and provide excellent customer service.
Internal processes—product development, service, and the like—are critical for
creating customer satisfaction and loyalty; they are also important for ensuring
productivity to contain costs for better financial performance. Customer value creation,
in turn, drives up revenues, which enhances profitability.

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At Starbucks, for example, key metrics can be used to help translate strategic goals to
operational imperatives. For instance, under customer metrics, Starbucks might look at
the percentage of repeat customers, the number of new customers, and growth rate.
Under people metrics, HR professionals might measure the numbers of suggestions
provided by employees, participation in Starbucks’ stock-sharing program, employee
turnover, and training hours spent. Each of these cells links vertically. HR management
issues such as rewards, training, and suggestions can be linked to efficient processes
(e.g., brewing the perfect cup, delivering top-notch customer service). These processes
then lead to better customer loyalty and growth. Growth and customer loyalty in turn
lead to higher profitability and market value.

lOMoARcPSD|31319220
Chapter 1 - Test bank
Human Resource Planning (Sheridan College)
Studocu is not sponsored or endorsed by any college or university

lOMoARcPSD|31319220
Name: Class: Date:
CHAPTER 1 - STRATEGIC MANAGEMENT
1. In order to achieve success implementing change, what two concepts do HR managers need to match together?
a. motivation and hiring practices
b. position modules and salary theories
c. principles and salary theories
d. HRM practices and organizational goals
ANSWER: d
2. What type of strategy is an agreed-upon plan that is arrived at through formal planning processes?
a. discarded
b. emergent
c. realized
d. intended
ANSWER: d
3. Managers in a department store have decided that the shoe department is not a profitable part of the store and that
it would be better suited to being an independent organization that rented space from the store. What type of
strategy is demonstrated if the shoe department is separated from the department store into a separate entity?
a. merger
b. divestiture
c. bankruptcy
d. growth
ANSWER: b
4. What type of objective is represented by the ratio “return on investment?”

a. soft
b. short-term
c. long-term
d. hard
ANSWER: d
5. What are the two primary types of inputs that influence an organization’s competitive advantage?
a. profitability and human capital
b. reputation and superior performance
c. culture and distinct advantage
d. capabilities and tangible assets
ANSWER: d

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6. What type of competency is represented by resources and capabilities that serve as a firm’s competitive
advantage?
a. core
b. central
c. cultural
d. collective
ANSWER: a
7. Which of the following represents either a growth or a stability strategy?

a. merger
b. turnaround
c. bankruptcy
d. liquidation
ANSWER: a
8. If employees understand the behaviours and performance levels that will be rewarded on the job, what type of
benefit is produced that will help managers formulate a strategy?
a. clarity
b. incentives
c. change
d. efficiency
ANSWER: b
9. What is a tangible corporate goal that represents a point of view about the competitive positions a company hopes
to build over a decade?
a. strategic plan
b. strategic intent
c. strategic implementation
d. strategic formulation
ANSWER: d
10. If a formulated plan is called an intended strategy, what strategy depicts the implemented plan?
a. intentional
b. ideal
c. realized
d. predicted
ANSWER: c

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11. If an organization fails to engage in strategic planning, it will be burdened by many challenges. Which of the
following is NOT one of these challenges?
a. failure to involve senior managers and executives so that there is no buy-in
b. failure to use the plan as the guide to make decisions and evaluate performance
c. failure to align incentives and other HR policies to the achievement of strategy
d. failure to incorporate information generated from 360-degree reviews
ANSWER: d
12. Which strategy is synonymous with logical incrementalism?

a. intended
b. emergent
c. discarded
d. realized
ANSWER: b
13. If all organizations are different, what strategic concept demonstrates this reality?
a. solitary
b. unrivalled
c. exclusive
d. unique
ANSWER: d
14. Which of the following represents either a restructuring or stability strategy?

a. merger
b. liquidation
c. incremental
d. joint venture
ANSWER: b
15. McDonald’s incorporated many unique strategies to turn the restaurant around. Which of the following is part of a
different restaurant’s corporate strategy?
a. aligning itself with Paul Newman’s salad dressing
b. allowing free refills for all beverages
c. introducing new foods that reflected regional food interests
d. opening stores in non-traditional locations
ANSWER: b

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16. If a firm is applying a growth strategy, it will typically be focused on certain HR practices. Which of the following
activities represent strategies that are NOT a growth strategy?
a. hoarding by managers
b. aggressive recruitment
c. rapidly rising wages
d. increased job creation
ANSWER: a
17. How is the successful implementation of strategy judged?

a. by whether it satisfies top management’s expectations
b. by whether it realizes organizational goals and objectives
c. by whether it engages employees to do their best
d. by whether it meets financial targets and ratios
ANSWER: d
18. Salad-O is a fast food outlet located in a shopping mall that tries to compete with Greens-Away by offering
gourmet salad dressings. Which of Porter’s competitive strategies is Salad-O applying?
a. low-cost provider
b. broad differentiation
c. market niche with lower cost
d. market niche with differentiation
ANSWER: b
19. “Our company is committed to honesty and improving society.” What type of statement does this quote describe?
a. attitude
b. policy
c. strategic
d. value
ANSWER: d
20. Some organizations drift aimlessly during times of economic turmoil. What might be a concrete reason for an
organization to be so unfocused?
a. The organization did not produce a vision statement to unite its employees.
b. The organization did not complete its long-term plan for the next three to five years.
c. The organization did not conduct a succession plan for its older managers.
d. The organization did not build a culture that supported work–life balance.
ANSWER: a

lOMoARcPSD|31319220
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21. What is the process called that formulates organizational goals, objectives, action plans, and the mission statement?
a. formulation
b. analysis
c. strategy
d. planning
ANSWER: c
22. According to the textbook, what are the three types of corporate strategy?
a. liquidation, bankruptcy, and growth
b. mergers, acquisitions, and joint ventures
c. growth, restructuring, and stability
d. turnaround, bankruptcy, and divestiture
ANSWER: c
23. In order for senior managers to determine who the company’s customers are, where they are located, and what
product or service characteristics the customers value, the managers must develop a statement of the fundamental
benefits of the products or services being offered in the marketplace. What is this statement known as?
a. value proposition
b. vision statement
c. value statement
d. vision proposition
ANSWER: a
24. Southwest Airlines has used multiple strategies since its inception in 1974. Why has its current focus on
organizational culture been such an effective strategy for the airline?
a. Southwest’s culture is variable and substitutable like the strategies it applies.
b. Southwest’s culture is inspirational so that its employees achieve greater work–life balance.
c. Southwest’s culture is unique, and strategic mimicry by other airlines is not possible.
d. Southwest’s culture is responsible for its low-cost, low-price, no-frills flights strategy.
ANSWER: c
25. Which concept refers to a list that produces the sequential steps required to get the job done?
a. principles
b. procedures
c. program
d. policies
ANSWER: b

lOMoARcPSD|31319220
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26. Which of the following is typical of an organization that follows Porter’s best-cost provider strategy?
a. a hamburger served by a waiter on a plate with potato salad
b. a hamburger and fries in a paper bag served by the drive-through operator
c. a hamburger and baked potato placed on a tray and served by the takeout counter clerk
d. a hamburger and baby greens salad in a plastic bubble package bought at the grocery store
ANSWER: a
27. An organization is influenced by a variety of elements from the external environment. On the other hand, which of
the following appears to be derived from the internal environment of the organization?
a. technology
b. laws and regulations
c. HR diversity policy
d. demographic shifts
ANSWER: c
28. Rand Solar Technologies Ltd. is planning its future. In the process, the senior leadership team is preparing the
organization’s objectives, competitive scopes, and action plans to achieve its goals. What is the leadership team
doing?
a. conducting a SWOT analysis
b. identifying the organization’s competitive advantage
c. formulating the organization’s strategy
d. applying principles of strategic management
ANSWER: c
29. What type of strategy changes incrementally due to environmental changes?

a. intended
b. discarded
c. realized
d. emergent
ANSWER: d

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30. The President and CEO of Walmart outlined the company’s overall strategy and all its business interests. The focus
of the strategy was on long-term growth and survival. What type of strategy is Walmart adopting?
a. corporate
b. business
c. international
d. expansion
ANSWER: a
31. The senior leadership team at Walmart outlined the company’s corporate strategy, which included plans for
increasing its products and services. What type of strategy is Walmart adopting?
a. restructuring
b. divestiture
c. business
d. growth
ANSWER: d
32. The owner of Whites Barbecues outlined the company’s strategy. The focus of the strategy was concerned with
how to build the company’s competitive position. What type of strategy is Whites Barbecues adopting?
a. corporate
b. business
c. international
d. expansion
ANSWER: b
33. On the Quality Greens Farm Market website are the words “to make healthy, locally grown farm food products
accessible to lower-income residents.” What is this an example of?
a. mission
b. vision
c. values
d. objectives
ANSWER: c

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34. What type of objective would include being ethical and environmentally responsible?
a. long-term
b. short-term
c. soft
d. hard
ANSWER: c
35. Which of the following best describes the core values of a company?
a. the organization’s long-term plan
b. the basic direction of the organization
c. the basic beliefs that govern workers’ behaviour in an organization
d. the reason an organization exists
ANSWER: c
36. Cupcasions is a small bakery that crafts and sells gourmet cupcakes and special-occasion cakes. To achieve its
business objectives, the managers scan their external environment for threats and opportunities so they can make
proactive changes to their strategic plan. What external factors would they scan for?
a. tangible assets
b. business processes
c. changing demographics
d. market leadership
ANSWER: c
37. What is entire process of conceptualizing the mission of an organization, identifying the strategy, and developing
long-range performance goals?
a. strategic plan
b. strategic intent
c. strategic implementation
d. strategic formulation
ANSWER: b

lOMoARcPSD|31319220
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38. Pacific Kayaks Ltd. provides ocean kayaks with distinctive qualities valued by customers. The company attracts
customers because it sets itself apart from the competition. It is successful because it has access to leading scientific
research on polyethylene, a very abrasion-resistant material used in the construction of its kayaks. The company
also has a strong sales and marketing team and a corporate reputation for quality and innovation. What competitive
strategy is Pacific Kayaks Ltd. using?
a. low-cost provider
b. differentiation
c. market niche with lower cost
d. focus strategy
ANSWER: b
39. RightWay Fencing Ltd. monitors the technological and economic trends in its external environment as well as its
internal assets and resource capabilities. What is it most likely performing?
a. a competitive environment scan
b. an environment scan
c. a strategic plan
d. a SWOT analysis
ANSWER: d
40. SunCore Consulting monitors demographic and labour market trends. It is most likely performing which of the
following?
a. a human resource scan
b. an environment scan
c. a strategic analysis
d. a labour market analysis
ANSWER: b
41. The senior leadership team at Price Warehouse have decided on the competitive position Price Warehouse wants
to achieve. Price Warehouse is well-positioned to compete for the largest number of customers through the lowest
prices. What type of strategy is Price Warehouse adopting?
a. broad differentiation strategy
b. low-cost provider strategy
c. focused strategy based on lower cost
d. focused strategy based on differentiation
ANSWER: b

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42. An organization is influenced by a variety of elements from the internal environment. On the other hand, which of
the following appears to be derived from the external environment of the organization?
a. technology and legislation
b. land and buildings
c. diversity policies and safety practices
d. skills and abilities of employees
ANSWER: c
43. If no two organizations are the same, then logically all organizational strategies are unique.
a. True
b. False
ANSWER: True
44. A company can have one corporate strategy but many business strategies.
a. True
b. False
ANSWER: True
45. When a company can no longer pay its creditors, the company may file for bankruptcy.
a. True
b. False
ANSWER: True
46. A vision statement would answer the questions “Who are we?” and “Why are we here?”
a. True
b. False
ANSWER: False
47. To be successful, a company must adopt only one corporate strategy.

a. True
b. False
ANSWER: False
48. The decision to merge with another company is an example of a growth strategy.
a. True
b. False
ANSWER: True

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49. If an organization decides that the company is an ideal size and decides to maintain it, then the organization is
adopting a growth strategy.
a. True
b. False
ANSWER: True
50. Strategic intent is an intangible corporate goal.

a. True
b. False
ANSWER: False
51. Porter’s model of business strategy has been criticized for having categories that overlap.
a. True
b. False
ANSWER: True
52. There are three competitive positions used in most strategy textbooks: cost, differentiation, and flexibility.
a. True
b. False
ANSWER: False
53. The question, “Should we be in business?” is an example of a business strategy.

a. True
b. False
ANSWER: False
54. The strategic planning process is dynamic and evolves as environmental conditions change.
a. True
b. False
ANSWER: True
55. Examples of corporate strategy include decisions to compete internationally or to merge with other companies.
a. True
b. False
ANSWER: True

lOMoARcPSD|31319220
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56. A discarded strategy is one that was found to be inappropriate because of changing circumstances.
a. True
b. False
ANSWER: True
57. In general, a restructuring strategy is one that deals with companies that are operating at a surplus and are typically
described as “money-making.”
a. True
b. False
ANSWER: False
58. Values guide the behaviour of individuals within an organization.

a. True
b. False
ANSWER: True
59. Hard objectives deal with social issues such as the ethics and values of an organization.
a. True
b. False
ANSWER: False
60. A “harvest” strategy can also be conceptualized as a “retrenchment” strategy because the goal is to restructure and
not grow.
a. True
b. False
ANSWER: True
61. Emergent strategy is the plan that changes incrementally due to environmental changes.
a. True
b. False
ANSWER: True
62. An acquisition is seen as two organizations joining to gain economies of scale, whereas a merger occurs when one
company acquires another.
a. True
b. False
ANSWER: False

lOMoARcPSD|31319220
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63. Dynamic capabilities are the abilities of an organization to adapt and renew its competencies in accordance with a
changing business environment.
a. True
b. False
ANSWER: True
64. Competitive advantage of an organization includes the characteristics that enable it to earn higher rates of interest
on its investments than its competitors.
a. True
b. False
ANSWER: False
65. Opportunities and threats are environmental conditions external to the firm that have limited benefit and are
harmful to the organization.
a. True
b. False
ANSWER: False
66. “Core competencies” refers to the integrated knowledge sets within an organization that distinguish it from its
competitors and deliver value to customers.
a. True
b. False
ANSWER: True
67. SWOT analysis refers to the systematic and regular monitoring of environmental factors influencing the organization.
a. True
b. False
ANSWER: True
68. What is a corporate strategy? Identify the three major corporate or organization-wide strategies outlined by the
authors in the text and discussed in class and provide examples of each.
ANSWER: Corporate Strategies are focused on overall strategy for the company and its businesses or interests.
These strategies are usually focused on long-term growth and survival goals.
There are three corporate strategy options:

∙ Restructuring (turnaround, divestiture, liquidation, bankruptcy)
∙ Growth (incremental growth, international growth, mergers and acquisitions)
∙ Stability (maintain the status quo)

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69. Compare and contrast corporate and business strategy. What is the difference between the two?
ANSWER: Business strategy focuses on one line of business as opposed to the overall corporation. Business
strategy involves building a strong competitive position as opposed to determining if this is the business
to be in. Business strategy is an action plan for managing one line of business. Corporate strategy asks,
“Should we be in business? What business should we be in?” Business strategy asks, “How should we
compete? Should we compete by offering products at prices lower than those of the competition or by
offering the best service?”
70. List the steps (from initial planning to end stages) in strategic planning.
ANSWER: 1. Establish the mission, vision, and values

2. Develop objectives
3. Analyze the external environment
4. Identify the competitive advantage
5. Determine the competitive position
6. Implement the strategy
7. Evaluate the performance
71. What are some of the benefits of strategy formulation to organizations? Identify and briefly describe five benefits.
ANSWER: ∙ Clarity – to help focus and guide decision-making about resource allocations
∙ Coordination – everyone working together towards the same goals
∙ Efficiency – daily decision-making guided toward the question “does it fit our strategy?”
∙ Incentives – employees understanding the behaviours and performance that will be rewarded
∙ Change – if major change is under consideration, then understanding current strategy is essential
∙ Career development – clear outline of organization’s strategy can help you decide if you want to work
for the company, if there is a skills fit, and what training and development you will need in order to
facilitate the achievement of strategy
∙ Understanding of the strategic planning process is the essential first step to creating an HR strategy
that makes sense for the organization
72. Compare and contrast the HRM practices of a company using a low-cost provider strategy with one using a
differentiation strategy.
ANSWER: Low-cost providers provide a product or service at a price lower than that of its competitors while
appealing to a broad range of customers. A major emphasis with this type of strategy is to reduce cost;
therefore, contingent workers are recruited and paid minimal hourly wages. There is a high turnover of
staff and minimal on-the-job training. There are minimal opportunities for career growth and
advancement. Businesses using a differentiation strategy seek to differentiate their products in ways that
will appeal to a broad range of buyers. More staff training may be required in businesses employing this
type of strategy. There is more emphasis on product knowledge and customer service. There may be
more opportunities for advancement in this type of business.

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73. Cupcasions is a small bakery that crafts and sells gourmet cupcakes and cakes. Besides scanning and monitoring its
external environment, the managers also consider what competitive advantage the organization possesses—that is,
what characteristics enable them to generate more value for customers at a lower cost, thereby earning higher rates
of profit than its competitors. List the three categories of resources and describe one example of a resource that
Cupcasions would have that would allow them to perform more effectively or efficiently than its competitors.
ANSWER: Tangible assets: These are future economic resources that have substance and form from which an
organization will benefit. Examples are land, inventory, building, location, cash, and technology.
Intangible assets: These are future economic resources that have been generated from past
organizational events. These assets lack substance and form. Examples are human capital, reputation,
goodwill, trust, and copyright.
Capabilities: These are a complex combination of people and processes that represent the firm’s
capacity to exploit resources to achieve the firm’s objectives. Examples are managerial capabilities,
innovative capabilities, marketing capabilities, and organizational cultures.
74. According to the resource-based view, an organization’s sustained competitive advantage must meet four criteria.
List these four criteria.
ANSWER: 1. They are valuable to the firm’s strategy (they help generate value/reduce cost).
2. They are rare (competitors don’t have them).
3. They are inimitable (they cannot easily be copied by competitors).
4. They can be organized by the firm (the firm can exploit the resources)
75. With the information from external environment and internal competence analysis,
managers can summarize the conclusions using a SWOT analysis. What is a SWOT analysis?
ANSWER: A SWOT analysis is a tool for analyzing a company’s resource capabilities and deficiencies, its market
opportunities, and the external threats to its future. SWOT is an acronym for Strengths, Weaknesses,
Opportunities, and Threats. A strength is something that a company does well or an attribute that
makes it more competitive. A weakness is something that an organization does poorly, or a condition,
such as location, that puts it at a disadvantage relative to competitors. Opportunities and threats are
environmental conditions external to the firm that may be beneficial or harmful.

lOMoARcPSD|31319220
Name: Class: Date:
76. Describe one step in the strategic planning process. Identify an organization you are familiar with (such as from your
work experience or from the course textbook). Provide an example of how your chosen organization performs the
one strategic planning step.
ANSWER: 1. Establish the mission, vision, and values

2. Develop objectives
3. Analyze the external environment
4. Identify the competitive advantage
5. Determine the competitive position
6. Implement the strategy
7. Evaluate the performance
One Step: Analyze the external environment. To achieve the company’s objectives, managers must be
aware of threats and opportunities in the external environment. By scanning and monitoring technology,
laws and regulations, the economy, sociocultural factors, and changing demographics, managers can
make reactive and proactive changes to the strategic plan.

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Chapter 2 Strategy and Human Resources Planning

Human Resource Management (University of the Fraser Valley)

Studocu is not sponsored or endorsed by any college or university

Name Clas Dat

Chapter 2 - Strategy and Human Resources Planning

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8. Which of the following best describes the core values of a company?

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16. Which statement best describes strategic knowledge workers?

17. Which statement best describes the skills of core employees?

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21. What is values-based hiring?

24. Which of the following is used in forecasting the demand of labour?

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30. Which of the following is NOT a qualitative approach to demand forecasting?

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34. Which of the following is a cooperative strategy pursued by firms?

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Chapter 2 - Strategy and Human Resources Planning

39. Severance pay is usually calculated based on which of the following?

41. What is an HR “dashboard”?

44. Which of the following is an important use of the balanced scorecard?

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58. Forecasting labour supply is an aspect of human resource planning.

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67. Investors are primary stakeholders of an organization.

68. Suppliers are secondary stakeholders of an organization.

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75. A cultural audit may examine how people are empowered.