Q&A Hero

Q: How can policies control decisions while defining allowable discretion in which operating personnel can execute business strategies? Describe several ways.

Q: What does it mean to empower employees? How are policies related to the idea of empowerment?

Q: What is outsourcing? What are the benefits and risks of outsourcing?

Q: In what three fundamental ways do functional tactics differ from business or corporate strategies? Briefly describe each.

Q: How do short-term objectives help implement strategy?

Q: (p. 321) A firm with a strategic goal of streamlining operations should use ________ to reward the long-term focus on efficiency and cost control. A. Restricted stock plans B. Stock options C. Cash D. Golden parachutes

Q: (p. 321) A firm seeking to globalize operations would use ________ as its bonus compensation plan. A. Restricted stock plans B. Golden parachutes C. Golden handcuffs D. Stock options

Q: (p. 321) A firm with a strategic goal of reducing executive turnover would use _________ to provide an incentive for longer executive tenure. A. Cash B. Stock options C. Golden parachutes D. Golden handcuffs

Q: (p. 321) A firm with a strategic goal of growing the share price incrementally should implement a: A. Restricted stock plan B. Stock option plan C. Cash-based plan D. Golden parachute

Q: (p. 319) _______ are executive bonus compensation plans that focus on accounting measures of performance and are designed to offset the limitations of market-based measures of performance. A. Cash restricted plans B. Golden handcuffs C. Restricted stock plans D. Cash-based

Q: (p. 319) If the executive quits is fired or simply retires, he would be best protected by a _________, which is designed to retain talented executives. A. Golden handcuff B. Golden parachute C. Cash based plan D. Stock option

Q: (p.318) __________ represent a form of executive compensation where compensation is deferred. A. Golden handcuffs B. Golden parachutes C. Golden stock options D. Unrestricted stock options

Q: (p. 316) Restricted stock plans offer: A. Higher downside risk to executives B. More limited downside risk to executives C. No downside risk to executives D. Limited upside risk to executives

Q: (p. 316) A ________ is designed to provide benefits of direct executive stock ownership. A. Restricted stock plan B. Cash based plan C. Golden parachute D. Golden handcuffs plan

Q: (p. 316) ________ offers employees more certainty, even if there is less potential for a big win. A. The use of stock options B. A golden parachute C. Stock grants D. Restricted stock

Q: (p. 316) __________ are much easier to value than options because they are equivalent to a stock transfer at the market price. A. Restricted stock grants B. Golden handcuffs C. Golden parachutes D. Cash plans

Q: (p. 315) ________ provide incentive for the executive to create wealth for shareholders as measured by increases in the firm's share price. A. Stock option grants B. Golden handcuffs C. Golden parachutes D. Cash-based plans

Q: (p. 315) Golden handcuffs: A. Have no downside risk to executives, who always profits unlike other shareholders B. Have a weak correlation between earnings measures and shareholder wealth creation C. Make it hard to explain the dimensions of managerial performance using the movement in share price D. May promote risk-averse decision making due to the downside risk borne by the executive

Q: (p. 315) There is a weak correlation between earnings measures and shareholder wealth creation with the use of a: A. Golden handcuffs plan B. Cash based plan C. Restricted stock plan D. Stock option grant

Q: (p. 318) The rationale behind golden handcuffs is that the plan: A. Promotes longer executive tenure than other forms of compensation B. Offsets the limitations of focusing on market-based measures of performance C. Offers an incentive for executives to remain with the firm D. Provides incentive for the executive to create wealth for shareholders as measured by increase in the firm's share price

Q: (p. 315) ______ dilute shareholders equity when they are exercised A. Golden handcuffs B. Stock options C. Golden parachutes D. Restricted stock plans

Q: (p. 314) Stock options have typically represented _______ of a CEO's average pay package. A. Less than 30 percent B. Less than 50 percent C. More than 50 percent D. More than 90 percent

Q: (p. 314) A common measure of _______ creation is appreciation of company stock price A. shareholder wealth B. revenue C. sales D. job

Q: (p. 314) ______ provide the executive with the right to purchase company stock at a fixed price in the future. A. Golden handcuffs B. Stock options C. Golden parachutes D. Restricted stock plans

Q: (p. 314) A common measure of shareholder wealth creation is appreciation of company A. revenues B. stock price C. employees D. stockholders

Q: (p. 314) The success of bonus compensation as an incentive hinges on: A. The executive in question B. The success of the firm C. The match between the plan and the firm's strategic objectives D. The positive link between shareholder wealth and personal wealth maximization

Q: (p. 314) The goal of ______ is not the only goal that executives may pursue. A. Organizational policies B. Organizational rewards C. Managerial rewards D. Shareholder wealth maximization

Q: (p. 314) The goal of an executive bonus compensation plan is to: A. Motivate executives to achieve maximization of shareholder wealth B. Motivate executives to achieve maximization of personal wealth C. Differentiate executives from other managers D. Ensure the success of the firm

Q: (p. 313) Policies can be externally imposed or ______ A. stakeholder driven B. mandated by stockholders C. internally derived D. mandated by the stock market

Q: (p. 314) ________ theoretically reward(s) the actions of people within an organization. A. Development B. Compensation C. Policies D. Action plans

Q: (p. 313) The ______ significance of policies can vary. A. visionary B. routine C. strategic D. important

Q: (p. 313) Policies can be ________. One good example of this is the use of equal employment opportunity practices. A. Internally derived B. Negative C. Externally imposed D. Very simple in nature

Q: (p. 313) The strategic ________ of policies can vary. A. Direction B. Plan C. Significance D. Advantage

Q: (p. 313) Which of the following is NOT a benefit of formal, written policies? A. They make variation in the treatment of individual problems more likely B. They reduce misunderstanding C. They systematically enhance indirect control and organization-wide coordination of the key purposes of policies D. They communicate the authorization or sanction of policies more clearly

Q: (p. 313) Policies offer predetermined answers to _____ problems. A. unique B. formal C. routine D. informal

Q: (p. 313) Policies may be ________ or _________. A. Written and informal; unwritten and formal B. Written and formal; unwritten and formal C. Written and formal; unwritten and informal D. Written and informal; unwritten and informal

Q: (p. 312) Policies reduce _______ in day to day decision making. A. The need for operating personnel B. The number of routine problems C. The speed with which decisions can be made D. Uncertainty

Q: (p. 312) Policies counteract resistance to or rejection of chosen _______. A. vision statements B. strategies C. mission statements D. capabilities

Q: (p. 312) Policies ensure ______ action. A. slower B. quicker C. indirect D. loose

Q: (p. 312) Policies ________ basic aspects of organization behavior. A. Negotiate B. Institutionalize C. Justify D. Determine

Q: (p. 311) Policies establish __________ over independent action. A. strategic control B. Indirect control C. direct control D. visionary control

Q: (p. 311) Policies establish __________ over _________ by clearly stating how things are to be done _________. A. Indirect control; dependent action; in the future B. Indirect control; independent action; now C. Direct control; independent action; in the future D. Direct control; dependent action; now

Q: (p. 311) Policies are also sometimes called A. standard operating procedures B. action plans C. functional tactics D. business strategy objectives

Q: (p. 311) _______ communicate guidelines to decisions. A. Policies B. Action plans C. Functional tactics D. Business strategy objectives

Q: (p. 311) __________ increase managerial effectiveness by standardizing many routine decisions and clarifying the discretion managers and subordinates can exercise in implementing functional tactics. A. Outsourcing B. Standard operating procedures C. Corporate cultures D. Action plans

Q: (p. 311) One way operating managers _____ is through the use of policies. A. outsource B. strategize C. politicize D. empower

Q: (p. 311) __________ are directives designed to guide the thinking, decisions and actions of managers and their subordinates in implementing a firm's strategy. A. Functional tactics B. Action plans C. Short-term objectives D. Policies

Q: (p. 311) One way operating managers ensure decision making is consistent with the mission, strategy and tactics of the business while allowing considerable latitude to operating personnel is through the use of: A. Empowerment B. Policies C. Strategic evaluation D. Facilitating strategic design

Q: (p. 311) ________ is the act of allowing an individual or team the right and flexibility to make decisions and initiate action. A. Management B. Micromanagement C. Empowerment D. Developing strategy

Q: (p. 309) ___________ is the most frequently outsourced functional activity at 75 percent. A. Marketing B. Payroll C. Travel D. HR

Q: (p. 308) _________ is the main force behind the outsourcing trend. A. Relentless cost cutting B. Achieving internal synergies C. Better capital budgeting D. Keeping control internal

Q: (p. 308) Relentless cost cutting is the main force behind the trend of _____. A. Strategic planning B. Outsourcing C. Goal setting D. Globalization

Q: (p. 308) __________ is acquiring an activity, service or product necessary to provide a company's products or services from "outside" the people or operations controlled by that acquiring company. A. Specialization B. Fragmentation C. Outsourcing D. Acquisition or merging

Q: (p. 308) __________ obtaining work previously done by employees inside the companies from sources outside the company. A. Specialization B. Fragmentation C. Outsourcing D. Acquisition or merging

Q: (p. 308) Outsourcing starts for most firms with: A. The outsourcing of production B. The outsourcing of the marketing function C. The outsourcing of payroll production D. The outsourcing of corporate strategy decisions

Q: (p. 307) Involving operating managers can increase the __________ of operating managers to the strategies developed. A. Resistance B. Limitations C. Commitment D. Evaluation

Q: (p. 307) Operating managers must establish short-term objectives and operating strategies that contribute to: A. Business-level goals B. Corporate-level goals C. Goals toward diversification D. Specialization

Q: (p. 307) Which of the following is NOT a way that specificity in functional tactics contributes to successful implementation? A. Helping ensure that functional managers know what needs to be done and can focus on accomplishing results B. Limiting the need for top management's confidence in and sense of control over the business strategy C. Clarifying for top management how functional managers intend to accomplish the business strategy D. Facilitating coordination among operating units within the firm by clarifying areas of interdependence and potential conflict

Q: (p. 307) Functional tactics are more _________ than business strategies. A. Specific B. Focused on the general direction of the firm C. Focused on a commitment to corporate strategy D. Long-term

Q: (p. 307) Business strategies provide _______ direction. A. General B. Focused C. Generic D. Narrow

Q: (p. 307) The ___________ of functional tactics allows functional managers to adjust to changing current conditions. A. Shorter time horizon B. Focus on growth C. Specificity D. Business focus

Q: (p. 307) __________ identify activities to be undertaken now or in the immediate future. A. Long-term tactics B. Business strategies C. Corporate strategies D. Functional tactics

Q: (p. 307) Which is NOT one of the differences between business strategies and functional tactics? A. Reinforcement of the strategy B. Time horizon C. Specificity D. Participants who develop them

Q: (p. 304) Every ________ in a company executes functional tactics that support the business's strategy and help accomplish strategic objectives. A. Competitive rivalry B. Supplier/customer C. Value chain activity D. Business unit manager

Q: (p. 304) Functional tactics translate _______ into action designed to accomplish specific short-term objectives. A. Corporate strategy B. Grand strategy C. Competitive will D. Business strength

Q: (p. 304) ________ are key, routine activities that must be undertaken in each functional area. A. Business tactics B. Resource tactics C. Functional tactics D. Corporate tactics

Q: (p. 305) One benefit of short-term objectives and action plans is its _________, which clarify personal and group roles in a firm's strategies and help realistically challenge managers to perform well. These objectives are particularly effective when linked to the firm's reward structure. A. Motivational payoff B. Structured clarity C. Compensation structure D. Complicated nature

Q: (p. 305) One benefit of short-term objectives and action plans is that they provide a __________. They can provide clear, measurable mechanisms for developing budgets, schedules and trigger points, which help control the implementation of strategy. A. Basis for strategy evaluation B. Basis for motivation C. Basis for strategy implementation D. Basis for strategic control

Q: (p. 304) Functional tactics translate thought (______) into action designed to accomplish specific short-term objectives. A. policies B. mission C. vision D. grand strategy

Q: (p. 305) A benefit of functional tactics is that the ____ of developing them, when done right, can be a forum for raising and resolving conflicts between strategic intent and operational realities due to operational issues not immediately known to higher management. A. Process B. Strategy C. Time D. Clarity

Q: (p. 305) Short-term objectives and action plans give operating personnel a better understanding of their role in the firm's ______. A. Goals B. Financial performance C. Strategic management D. Mission

Q: (p. 304) The link between short-term and long-term objectives should resemble ________ through the firm from basic long-term objectives to specific short-term objectives in key operation areas. A. Cascades B. Building blocks C. Small barriers D. Fences

Q: (p. 304) Some firms assign ____ to establish and communicate the relative priority of objectives. A. rewards B. objectives C. weights D. policies

Q: (p. 304) Words like "primary," "top," and "secondary," may be used to indicate: A. Long-term objectives B. Measurability C. Priority D. Strategic objectives

Q: (p. 304) A(n) _______ does not necessarily communicate the real difference in the importance of objectives. A. Simple flow B. Simple ranking C. Statistical measure D. Established priority

Q: (p. 303) Difficulties in quantifying objectives can often be overcome by initially focusing on _________ and then identifying _________. A. Measurability; functions B. Measurable activity; measurable outcomes C. Measurable outcomes; measurable activity D. Line units; measurable activity

Q: (p. 303) It is far easier to quantify the objectives of ______, like production, than of certain ______ areas like personnel. A. Line units; function B. Staff units; line C. Outcomes; staff D. Line units; staff

Q: (p. 304) ________ can help avoid conflicting assumptions about the relative importance of annual objectives, which could otherwise inhibit progress toward strategic effectiveness. A. Establishing priorities B. Establishing action plans C. Distinguishing the measurable objectives D. Establishing measurable outcomes

Q: (p. 303) Short-term objectives are more consistent when they clearly state what is to be accomplished, when it will be accomplished and how its accomplishment will be: A. Qualified B. Benchmarked C. Measured D. Strategized

Q: (p. 303) Difficulties in quantifying objectives often can be overcome by initially focusing on measurable activity and then identifying measurable A. resources B. capabilities C. outcomes D. policies