31 Dec E) effective screening

Crafting and executing strategy-Thompson , Strickland, Gamble, Peterae,Janes & Sutton CH11

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) 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.

C) be based on the resources needed to lower the costs of performing each value chain activity.

D) 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.

E) strongly support the company’s established policies and procedures regarding how things are to be done.

2 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) by providing top-down guidance about how certain things need to be done, helping ensure consistency in how strategy-critical activities are performed, and by promoting the creation of a work climate that facilitates good strategy execution.

D) helping prevent the corporate culture from being unhealthy and weak.

E) pushing employees to accept the need for state-of-the-art operating and support systems.

3 A “best practice”

A) refers to the lowest-cost procedure for performing a specific task or activity.

B) refers to performing strategy-critical activities in a manner that results in fewer than 5 defects per million.

C) is the particular value chain activity that a firm performs best.

D) is a method of performing an activity that has been shown consistently deliver superior results compared to other methods.

E) 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.

4 Using benchmarking and best practices as a means of achieving operating excellence

A) is a four-step process that entails (1) benchmarking how well a company performs specific tasks and activities against best-in-industry or best-in-world performers, (2) adapting the various best practices to fit the company’s situation and then implementing them, (3) continuing to benchmark company performance of activities against best-in-industry or best-in-world performers, and (4) continuing to improve and refine the company’s performance of its activities and thereby move closer to operating excellence.

B) is essential if a company is to effectively and efficiently implement TQM and/or Six Sigma quality control systems.

C) needs to be directed chiefly at manufacturing and customer service activities, since these two areas are generally the most critical to good strategy execution.

D) is a prerequisite to effective reengineering of core business processes and to building strong core competencies.

E) is a potent tool for helping top managers set stretch performance targets and track a company’s progress in executing its strategy.

5 Business process reengineering is a tool for

A) remodeling and refreshing a strategy-critical core competence.

B) pulling the pieces of strategy-critical activities out of different departments and unifying their performance in a single department or cross-functional work group that has charge over the whole process and can be held accountable for performing the activity in a better, cheaper, and/or more strategy-supportive fashion.

C) reducing the size of a company’s managerial bureaucracy.

D) boosting the quality of a company’s product and the caliber of its customer service.

E) expediting the development of an important new competitive capability.

6 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 mistake-free management of a company’s entire business.

7 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.

8 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) help managers run a tight ship and properly monitor the actions and decisions of empowered employees.

D) make it easier to develop strategy-supportive policies and procedures..

E) make the use of TQM or Six Sigma programs substantially more cost-effective.

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

A) total quality management.

B) business process reengineering.

C) a properly designed reward structure.

D) making the company a great place to work in terms of pay scales, fringe benefits, and employee perks.

E) effective screening of job applicants such that only the most motivated and energetic people are hired.

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

A) Making the performance payoff a major, not minor, piece of the total compensation package

B) Keeping performance incentives and bonuses to less than 15% of total compensation

C) 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

D) Having incentives that extend to all managers and all workers and generously rewarding people who turn in outstanding performances

E) 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