STR 581 Wk 2 – Practice: Knowledge Check

What is not considered to be among the major risks of outsourcing value chain activities presently performed in-house?

Multiple Choice

• A company may farm out the wrong types of activities and thereby hollow out its own capabilities.
• A company’s ability to lead the development of innovative new products may be weakened in the outsourcing process.
• A company’s loss of direct control may make it difficult to monitor and coordinate activities of outside suppliers.
• A company may be less flexible in accommodating shifting buyer preferences.
• Outside parties may not make investments specific to the needs of the outsourcing company’s value chain.

The mix of performing an activity internally, as well as outsourcing in any given stage of the vertical chain, refers to which vertical integration strategy?

Multiple Choice

• a tapered integration strategy
• a backward integration strategy
• a partial integration strategy
• a full integration strategy

Strategic offensives should be based on

Multiple Choice

• the creation of high profits and the reduction of costs.
• satisfying employees and creating a stable work environment to increase long-term profits and reduce turnover.
• sizing up an organization’s internal and external situation.
• those areas of strength where the company has its greatest competitive advantage over targeted rivals.
• implementing and executing chosen strategy efficiently and effectively.

Compared to vertical integration or horizontal mergers/acquisitions strategies, the principal advantages of joint venture partnerships and alliances include

Multiple Choice

• potential resource pooling and risk sharing, more adaptive response capabilities, and greater speed of deployment.
• potential facilitation of best practices, optimization of production capacity, and relevant synergistic savings.
• potential profitability of the alliance and related experience-curve economics.
• potential material additions to a company’s technological capabilities, strengthening of its competitive position, and boosting of its profitability.
• potential transactional and relational optimization of operating practices and competencies.

Imagine you have been asked to present a strategy implementation plan to the top management of Patagonia, a Los Angeles, California-based manufacturer and marketer of outdoor activewear and extreme adventure gear. Which implementation option would your presentation likely not include as a means of building and strengthening Patagonia’s competitively valuable resources and capabilities?

Multiple Choice

• Patagonia needs to shift from decentralized to centralized decision-making to give senior executives more authority and control in driving cultural change.
• Patagonia needs to engage in experience-building activities such as collaborative efforts in R&D engineering and design.
• Patagonia needs to select and assemble a team of people with the requisite skills and experience, upgrading or expanding individual abilities as needed, and then molding the efforts of those individuals into a collaborative effort to create an organizational ability.
• Patagonia needs to acquire capabilities through mergers and acquisitions.
• Patagonia needs to enter into collaborative partnerships with suppliers, competitors, or other companies that possess needed expertise.

Successful execution of Deloitte’s talent management strategy included all of the following elements except

Multiple Choice

• a clear path to partnership that served as a motivational tool for top performers, often leading to career acceleration.
• formal training programs, including mandatory training hours for all its employees to ensure that individuals continued to further their professional development.
• creation of special programs for high performers, such as its Global Fellows program and its Emerging Leaders Development Program.
• sanctions placed on employees for missed deadlines, misdirected or wasteful efforts, or managerial ineptness.
• sponsorship that helped rising leaders navigate the firm, develop new competencies, expand their networks, and hone the skills needed to accelerate their careers.

Which of the following best describes the multidivisional structure?

Multiple Choice

• It is a structure that combines two or more organizational forms, with multiple reporting relationships.
• It is a decentralized structure consisting of a set of operating divisions organized along business, customer, product, or geographic lines, and central corporate headquarters.
• It is organized along functional lines, where a function represents a major step in the firm’s value chain.
• It consists of a central executive who handles major decisions and oversees all operations with the help of a small staff.
• It is a highly centralized organizational structure, where top executives retain authority for most strategic and operating decisions and keep a tight rein on business-unit heads.

To win employees’ sustained, energetic commitment to the strategy execution process, management must

Multiple Choice

• create a corporate culture that fosters dedication and loyalty.
• comply with ethical standards and become good corporate citizens.
• provide job variety and promotion opportunities.
• provide attractive perks and fringe benefits.
• be resourceful in designing and using motivational incentives.

Why does a company’s budget need to be closely linked to the needs of good strategy execution?

Multiple Choice

• Organizational units always need the proper funding to carry out their part of the strategic plan effectively and efficiently.
• Scarce funding slows progress and impedes the efforts of organizational units to execute their pieces of the strategic plan proficiently.
• If internal cash flows prove insufficient to fund the planned strategic initiatives, then management must raise additional funds through borrowing or selling additional shares.
• Excess funding wastes organizational resources and reduces financial performance.
• Tight budget control that involve reallocations and resource shifting is management’s most powerful tool for first-rate strategy execution.

One of the most widely used and effective tools for gauging how well a company is executing pieces of its strategy entails

Multiple Choice

• benchmarking the company’s performance of activities and business processes against “best-in-industry” performers.
• using process management tools to drive continuous improvement in how internal operations are conducted.
• calculating competitive strength scores for each business.
• checking the competitive advantage potential of cross-business strategic fit.
• using a nine-cell matrix to simultaneously portray industry attractiveness and competitive strength.