Assignment:
Striving for Operating Excellence
Your Results:
The answer for each question is indicated by a .
1. Which one of the following is not a valid strategy-related reason why managers need to be deeply involved in the budget-making process?
A) Too little funding of strategy-critical organizational units impedes their ability to execute their pieces of the strategic plan proficiently.
B) Implementation of a new or revised strategy usually entails budget reallocation.
C) The funding requirements of any change in strategy need to drive capital allocations and the size of each unit's operating budget.
D) Without budget reallocations it is hard, if not impractical, to match organization structure to the chosen strategy; moreover, aggressive resource reallocation is a prerequisite to creating needed core competencies and organizational capabilities.
E) Forceful actions to reallocate operating funds and move people into new organization units signal a determined management commitment to strategic change and are frequently needed to give credibility to efforts to implement strategic changes.
2. Changes in strategy often entail budget reallocations because
A) more money will be needed to fund the new strategy initiatives.
B) the policy revisions and compensation incentives that tend to accompany strategy changes typically require different levels of funding.
C) the value chain activities and organizational units critical to executing the old strategy are not necessarily as critical in executing the new strategy, thus making it desirable to reduce budget allocations to areas having a lesser strategy-executing role and to increase budget allocations for those value chain activities having a bigger strategy-executing role.
D) substantial budget revisions are usually needed to empower employees to carry out the new strategy elements.
E) adopting best practices and pushing for continuous improvement tends to reduce costs and reduce overall resource requirements.
3. Prescribing policies and operating procedures aid the task of implementing strategy by
A) helping empower product champions and work teams and helping prevent the corporate culture from being unhealthy and weak.
B) helping enforce needed consistency in how particular strategy-critical activities are performed in geographically scattered operating units and providing personnel with top-down guidance on how certain things are to be done and what behavior is expected.
C) helping managers determine the appropriate size of departmental staffing and operating budgets in order ought to be for organizational units to carry out their assigned piece of the strategy in a competent fashion.
D) indicating how business process reengineering needs to be accomplished and paving the way for instituting TQM or Six Sigma programs and adopting best practices.
E) making it easier for employees to accept the need for state-of-the-art internal operating systems.
4. The managerial task of creating strategy-supportive policies and procedures
A) generally entails having many policies rather than few policies (because it usually takes many policies and procedures to adequately spell out and fully explain how things are to be done ly).
B) is important because strategies can rarely be executed proficiently without providing employees with explicit direction in how value chain activities are to be performed.
C) is the most reliable way for management to retain control over how tasks are being performed by empowered employees (because very few employees will knowingly violate company policies).
D) must be well done if a company is to succeed in imitating the practices and procedures of best-in-industry or best-in-world performers.
E) can aid good strategy execution by placing limits on independent action and channeling individual and group efforts in the desired directions.
5. 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 a way of performing an activity that at least one company has proved works particularly well.
D) is the particular value chain activity that a firm performs best.
E) is a procedure for performing an activity that companies in an industry have "proven" is most reliable and failsafe way to perform that activity.
6. Identifying and adopting best practices
A) starts with benchmarking how well a company performs specific tasks and activities against best-in-industry or best-in-world performers.
B) is essential if a company is to effectively and efficiently implement and execute its strategy.
C) needs to be directed chiefly at manufacturing and customer service activities, since these two areas are generally the most critical to successful strategy implementation and execution.
D) is a prerequisite to effective reengineering of core business processes and to creating strong core competencies.
E) provides a yardstick for setting internal performance targets and for gauging organizational competence in executing strategy.
7. Which of the following is not a tool that managers can use to promote operating excellence and further the cause of good strategy execution?
A) Benchmarking
B) Best practice implementation
C) Value chain analysis
D) Six Sigma quality control techniques
E) TQM
8. Total quality management (TQM) involves managing company operations in a manner calculated to
A) identify and implement the best practice is for performing a particular value chain activity.
B) result in the lowest possible costs.
C) produce continuous improvement in all phases of operations, promote 100% accuracy in performing tasks, and move toward total customer satisfaction.
D) make quantum gains in the efficiency and effectiveness with which the value chain activities are performed.
E) result in mistake-free management of a company's entire business.
9. 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) generally works better than business process reengineering because of quicker employee buy-in, lower implementation costs, and easier-to-achieve results.
C) is a term used to describe companies that are best-in-industry in most of the relevant performance indicators.
D) is a philosophy of managing that emphasizes continuous improvement in all phases of company operations, 100% accuracy in performing activities, involvement and empowerment of employees at all levels to improve on how things are done, team-based work design, benchmarking, and efforts to fully satisfy customer expectations.
E) is a management approach where managers go through in-depth training to learn how to create effective policies and procedures and to install effective internal support systems.
10. Six Sigma quality control
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 for a manufacturing or assembly process.
C) consists of a disciplined, statistics-based system aimed at producing not more than 3.4 defects per million iterations for any 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 fewer than 5 defects per million iterations when implemented properly.
11. Six Sigma's DMAIC process is a particularly good vehicle for
A) improving performance when there are small variations in how well an activity is performed; if there are wide variations, then the DMADV process has to be used.
B) developing new processes or products at Six Sigma quality levels.
C) companies wanting to improve customer service; Six Sigma DMADV has to be used to improve manufacturing or assembly processes.
D) minimizing the number of company personnel which require Black Belt training and thus keeping the costs for Six Sigma use below $250,000 per task.
E) improving performance when there are wide variations in how well an activity is performed.
12. Building a total quality culture and realizing full value from TQM or Six Sigma initiatives does not entail which one of the following?
A) Unequivocal management commitment to total quality and continuous improvement, along with articulation of a quality vision and establishment of specific, measurable objectives for boosting quality and making continuous improvements
B) Screening job applicants rigorously and hiring only those with the attitudes and aptitudes right for quality-based performance
C) Building a distinctive competence in quality control, especially as it applies to manufacturing/assembly and customer service
D) Providing quality training for most employees and stressing prevention (doing it right the first time) rather than inspection (instituting ways to mistakes)
E) Preaching that performance can, and must, be improved because competitors aren't resting on their laurels and customers are always looking for something better
13. The use of state-of-the-art information and operating systems aid the task of implementing and executing strategy because
A) such systems make it easier to develop strategy-supportive policies and procedures.
B) they are one of the most effective ways to realize a competitive edge over rivals).
C) they help managers run a tight ship and properly monitor the actions and decisions of empowered employees.
D) they not only help promote operating excellence and better strategy execution but they can also strengthen organizational capabilities enough to provide a competitive edge over rivals.
E) they make the use of TQM or Six Sigma programs substantially more cost-effective.
14. Which of the following statements regarding the strategy-executing role of internal support systems and information systems is inaccurate?
A) State-of-the-art internal support systems typically have the effect of raising a firm's unit costs because of the high dollar outlays required to develop and install such systems.
B) Well-conceived information and internal support systems can sometimes strengthen organizational capabilities enough to provide a competitive edge over rivals.
C) Well-conceived, state-of-the-art information and operating systems can help a company mobilize information, use knowledge effectively, redeploy resources quickly, and respond faster.
D) Well-conceived, state-of-the-art information systems help empowered employees do their jobs better and make better decisions.
E) Real-time information systems help company managers to stay on top of implementation initiatives and daily operations, and to intervene if things seem to be drifting off course.
15. Motivational and incentive compensation practices that contribute to high levels of employee performance typically
A) entail paying the highest wages and salaries in the industry to high-performing employees and stressing non-monetary rewards for low-performing employees.
B) incorporate only positive motivational approaches and are carefully designed to avoid subjecting employees to job insecurity, stress, or anxiety.
C) incorporate a blend of positive and negative motivational features and also utilize both monetary and non-monetary rewards.
D) emphasize making employees happy and secure in their jobs through both hard times and good times.
E) involve reducing the compensation of low-performing employees while, at the same time, giving high-performing employees lucrative bonuses and making them eligible to participate in an assortment of incentive compensation plans.
16. A well-designed reward system
A) makes strategically relevant measures of performance the dominant basis for incentive compensation.
B) should strive for a 75%-25% mix between positive and negative rewards.
C) should strive for a 67%-33% mix between monetary and non-monetary rewards..
D) must emphasize weeding out employees who are consistently low performers (in the bottom 10% to 15%).
E) All of these.
17. Which of the following is themostimportant aspect of developing a strategy-supportive reward structure?
A) Motivating organizational units and individuals to work energetically to execute the strategy effectively and achieve the organization's vision
B) Making sure that individuals' rewards are tightly linked to meeting or beating strategically-relevant performance targets
C) Making sure that the rewards actually boost employee morale and job satisfaction
D) Selecting rewards that will boost worker productivity and lower labor costs
E) Motivating employees to be good team players
18. Which of the following is not a desirable feature of a well-designed, strategy-supportive compensation and reward system?
A) Administering the reward system with scrupulous care and fairness
B) Avoiding performance incentives where the payoff is less than 20% of total compensation
C) Making sure that the performance targets each individual is expected to achieve involve outcomes the individual can affect
D) Making liberal use of non-monetary rewards
E) Keeping the time between performance reviews and payment of the rewards short
19. The guidelines for designing an incentive compensation system that will help drive successful strategy execution include
A) making the payoff for meeting or beating performance targets a major piece of the total compensation package.
B) having a bonus and incentive plan that applies to managers only (employees should generally not be included in incentive pay plans but should have attractive wages and salaries).
C) having an outside wage and salary expert administer the system, so that there is no doubt as to its fairness and impartiality.
D) not skirting the system to find ways to reward non-performers.
E) Both A and D.
20. Performance-based compensation systems
A) have to be used cautiously and sometimes toned down in certain foreign countries, because incentive compensation runs counter to local customs and cultural norms.
B) can have an adverse effect on employee performance because some managers and employees are not psychologically and emotionally strong enough to cope with performance-based pay systems.
C) tend to be less effective if the performance-based pay exceeds 10-15 percent of total compensation because failure to receive incentive rewards can hurt employee morale and curb their living standards.
D) should be used sparingly because too much emphasis on pay-for-performance tends to have a negative impact on employee productivity.
E) have the disadvantage of making it harder for employees to focus diligently on the duties and functions they are supposed to perform.