MULTIPLE CHOICE

142. If managers use their judgment when applying the techniques, the criteria of suitability, acceptability and feasibility will identify the best strategy.

True. False.

143. What is most often the limitation when assessing return using costbenefit analysis?

• Difficulty in quantification.
• Clear identification of the key stakeholders.
• Difficulties in establishing the timescales to be applied.
• Identifying objectives of the strategy.

144. Profitability analyses for assessing the acceptability of a strategy include:

• Return on capital employed (ROCE); ratio analysis; and funds flow analysis.
• Return on capital employed (ROCE); payback period; and discounted cash flow

(DCF).

• Payback period; discounted cash flow; and decision trees.
• Ranking; decision trees; and scenarios.

145. Acceptability' assessment concerns:

• The strategic fit of the strategy to the future trends and changes in the environment.
• The resources and competences required to implement the strategy.
• The expected performance outcomes, such as risk, return and stakeholder

reactions, if a strategy is implemented.

• The stakeholder reaction to a strategy.

146. Which of the following best describes a 'deliberate' strategy?

• A strategic direction that emerges from a stream of decisions.
• A strategy that is the product of competitive pressure.
• An expression of desired strategic direction, intentionally formulated or

planned by managers.

• An expression of desired strategic direction deliberately formulated or planned

by managers that is realized in the fullness of time.

147. The purposes of strategic planning systems are:

• To assist in the communication, coordination and control of strategy.
• To provide a structured means of analyzing and thinking about complex

strategic problems and expanding the planning horizons of strategists.

• To develop ownership of the strategy.
• All of the above.

148. Which four of the following are the central tenets of organisational learning?

• Experimentation is the norm.
• Employees should be appointed on the basis of their previous educational

success.

• Organisations are pluralistic.
• Managers facilitate rather than direct.

149. The resource allocation process explanation of strategy development says:

• That strategy develops as the outcome of the taken-for-granted assumptions and behaviors in organisations.
• That strategy develops as the outcome of resource allocation routines in organisations.
• That strategy develops as the outcome of processes of bargaining a negotiation among powerful internal or external interest groups.
• That strategy develops as the outcome of logical incrementalism.

150. What is the cultural explanation of strategy development?

• Strategy development must not be based on the taken-for-granted assumptions and behaviors in organisations.
• Strategy development occurs as the outcome of the taken-for-granted assumptions and behaviors in organisations.
• According to Hofstede's theories, strategies that work in one culture cannot be transferred to another culture.

151. What term is used for an organisation capable of continual regeneration from a variety of knowledge, experience and skills of individuals within a culture that encourages mutual questioning and challenge around a shared purpose or vision?

• Strategic organisation.
• Learning organisation.
• Pluralistic organisation.
• Emergent organisation.

152. A 'learning organisation' requires:

• A stable hierarchy.
• A shared vision and culture that is challenging and questioning.
• A questioning culture.
• Knowledge management systems.

153. Strategies most often develop in organisations:

• As the outcome of cultural and political processes in the organisation.
• Through formal strategic planning processes.
• Through multiple processes that vary according to the type of organisation and

the context of that organisation.

• Through a process of learning by doing, often known as 'logical incremental'.

154. Middle managers are likely to see strategy development in terms of intended, rational, analytical planned processes, whereas SEOs see strategy development more as a result of cultural and political processes.

• False.
• True.

155. Organisations in complex situations are most likely to succeed if they use:

• Strategies that have been successful in the past.
• Different processes for different purposes.
• Top-down strategic planning.
• Different processes for different purposes and different strategy development

roles at different organisational levels.

156. What term is used for the structures, processes and relationships through which an organisation operates?

• The organisational design.
• The organisation's culture.

• The organisation's configuration.
• The organisational paradigm.

157. The speed of change and increased levels of uncertainty in the business environment have increased. What is the most important result from this for organisations?

• They must become learning organisations.
• They must develop into international organisations.
• Their structures must become more rigid and stronger.
• They must have flexible designs and be skilled at reorganizing.

158. Transnational corporations are required to simultaneously achieve local responsiveness and global coordination. For this to work, global managers need to:

• Cross national and functional boundaries while also being sensitive to local needs.
• Ensure global innovation and learning.
• Spot talent and foster innovation.
• All of the above.

159. Functional structures are based on:

• Business units.
• Geographic divisions.
• The primary activities of an organisation such as production, finance and

marketing.

• Product divisions

160. A 'holding company' structure can be defined as:

• One that is holding control over product or market divisions.
• One that is an investment company consisting of shareholdings in separate

businesses.

• One that is managed by a group of managers who are shareholders.
• One that is holding control based on portfolio management principles.

161. Balanced scorecards are a means of control through:

• Qualitative measures.
• Performance targets.
• Portfolio management.

162. Market systems as control processes typically involve:

• A system for the allocation of resources.
• Outsourcing of activities.
• Using real market forces in the allocation of resources.
• A formalized system of contracting for resources.

163. Cultural systems of control are aiming at:

• Standardization of outputs.
• Standardization of norms/behaviors.
• Standardization of skills and behaviors.
• Standardization of processes.

164. Adopting a 'financial control' approach from the corporate center involves:

• Retaining financial control and strategic planning principles.
• Complete devolution of both financial and strategic issues.
• Complete devolution of strategic issues but retention of major financial

controls.

• Providing financial devolution but retaining strategic planning principles.

165. The 'strategic control' approach is characterized by:

• Agreement between the center and divisions within central guidelines.
• Complete devolution of strategic and financial controls.
• The retention of strategic and financial controls in a top-down approach.
• Complete devolution of strategic controls but retention of financial controls.

166. Which three of the following are typical dilemmas in organizing for success?

• Holding the ring versus holistic solutions.
• Vertical accountability versus horizontal integration.
• Empowering versus best practice.
• Centralizing and decentralizing.

167. A company is dominated by principles of hierarchy and vertical accountability, and is highly antagonistic to radical innovation. Which approach would be most suitable if management wanted to develop a new venture?

Subdivide the organisation, setting up a new division.

• Reorganize the whole organisation around the new venture.
• Change the company culture.

168. A dilemma for managers in the interconnectedness of configurations is which element drives the others. The aim is to ensure that strategic elements drive structural elements.

False. True.

169. There are different styles of managing strategic change. Which of the following are the potential benefits of 'direction' as a change style?

• Clarity and speed.
• Increasing ownership of a decision or process.
• Maintaining control over the change process while also involving people in it.
• Overcoming lack of information or misinformation.

170. The style of leading change associated with persuasion' is best described as:

• Personal authority is used to set direction and the means of change.
• A strategic leader retains coordination and authority but delegates elements of

the change process.

• Gaining support for change by generating understanding and commitment.
• Involvement in setting the strategy agenda and resolving strategic issues by

groups.

171. What type of change leadership involves 'incremental realignment'?

• Reconstruction.
• Adaptation.
• Revolution.
• Evolution.

172. Which of the following description does NOT correctly apply to revolutionary change?

• It involves major strategic change.
• It occurs incrementally.
• It is rapid.
• It is likely to involve cultural change.

173. What type of change involves incremental transformation?

• Adaptation.
• Evolution.
• Revolution.
• Reconstruction.

174. Political processes in managing change may involve:

• Senior managers.
• Employees.
• All stakeholders.
• The Board of Directors.

175. Strategic change levers may be symbolic in nature. Which of the following do you think is the most powerful symbol?

• Behavior of managers.
• Changes to systems such as reward, information and control systems.
• Use of stories such as newsletters.
• Physical changes in the work environment, such as relocations or changes to

office space.

176. Which of the following is least likely to be used as a mechanism for managing change from a political perspective?

• Using symbols, rituals and language to legitimize change.
• Building alliances and networks.
• Associating with powerful stakeholder groups.
• Looking for windows of opportunity.