A dynamic industry expert is someone with an analytical mind who is highly knowledgeable in other industries and can manage diverse product lines.

FALSE

IHOP's CEO, Julia Stewart, built a reputation as a turnaround specialist.

TRUE

A professional liquidator was the executive type called in to Montgomery Ward when the company declared bankruptcy for the second time.

TRUE

Chandler proposed that the most appropriate CEO for a firm remains constant as the company proceeds through its life cycle.

FALSE

Analyzers tend to have CEOs with a marketing/sales background.

TRUE

Executive succession is the process of replacing a key top manager.

TRUE

Succession planning has become the most important topic discussed by boards of directors.

TRUE

Firms in trouble seldom choose outsiders to lead them.

FALSE

Downsizing refers to the planned elimination of positions or jobs; it is often used to implement retrenchment strategies.

TRUE

Companies that pursue related diversification strategies through internal development make greater use of interdivisional transfers of people than do companies that grow through unrelated acquisitions.

TRUE

A good retrenchment strategy can be implemented well in terms of organizing, but poorly in terms of staffing.

TRUE

Research indicates that companies undertaking cost-cutting programs are four times more likely than others to cut costs again, typically by reducing staff.

TRUE

To successfully downsize, companies must invest in the remaining employees.

TRUE

To improve organizational learning, many multinational corporations are providing their managers with international assignments as long as five years.

TRUE

Research indicates that a multinational corporation performs at a higher level when its CEO has international experience.

TRUE

European multinational corporations seldom use people with an international orientation to staff their management positions.

FALSE

Implementation of staffing involves leading through coaching people to use their abilities and skills most effectively and efficiently to achieve organizational objectives.

TRUE

While an organization's culture can exert a powerful influence on the behavior of all employees, it can seldom affect a company's ability to shift its strategic direction.

FALSE

Corporate culture does not necessarily have to support the strategy of the firm.

FALSE

The key to the effective management of change is communication.

TRUE

Assimilation involves the relatively balanced give-and-take of culture and managerial practices between the merger practices.

FALSE

When Boeing created a separate unit to house the newly acquired operations of McDonnell-Douglas, they were managing the different cultures through separation.

TRUE

Integration involves the disintegration of one company's culture resulting from unwanted and extreme pressure from the other to impose its culture and practices.

FALSE

An action plan states what actions are going to be taken, by whom, during what time frame, and with what expected results.

TRUE

One component of an effective action plan is the determination of the expected financial and physical consequences of each action.

TRUE

TQM links organizational objectives and the behavior of individuals.

FALSE

TQM is an operational philosophy committed to customer satisfaction and continuous improvement.

TRUE

One objective of TQM is better, less variable quality of the product and service.

TRUE

An essential ingredient of MBO is that an employee must be just as concerned with pleasing the internal customer as the external customer.

FALSE

According to Hofstede's dimensions of national culture, uncertainty avoidance is the extent to which a society accepts an unequal distribution of power in organizations.

FALSE

According to Hofstede's dimensions of national culture, long-term orientation is the extent to which society is oriented toward the long versus the short term.

TRUE

The hiring of new people with new skills, firing of people with inappropriate or substandard skills, and/or training existing employees to learn new skills are included the process of

A) training.

B) staffing.

C) structuring.

D) operating.

E) financing.

Answer: B

All of the following reflect characteristics of a successful integration manager EXCEPT

A) a deep knowledge of the acquiring company.

B) a flexible management style.

C) an ability to work in cross-functional project teams.

D) a propensity to hire likeminded people.

E) a willingness to work independently.

Answer: D

Training is especially important in reinforcing the customer service culture at Zappos where

A) new employees are offered $4,000 to quit.

B) training lasts 7 weeks.

C) training includes tests.

D) trainees must graduate to be an employee.

E) all of the above

Answer: E

According to the American Society of Training and Development, the average annual expenditure per employee on corporate training and development is

A) $0.

B) $362.

C) $748.

D) $1,182.

E) $2,361.

Answer: D

Executives with a particular mix of skills and experiences may be classified as an executive type and paired with

A) a specific personal characteristic.

B) a specific corporate strategy.

C) a certain educational background.

D) a specific experience background.

E) a specific industry.

Answer: B

Which of the following statements is true concerning the career life cycle for top executives?

A) During the early years of executives' tenures, they tend to experiment extensively with product lines to learn about their business.

B) It is possible that a current CEO may not be appropriate to implement a new strategy.

C) The harvest stage occurs when executives' accumulated knowledge allows them to reduce experimentation and increase performance.

D) There is an inverted U-shaped relationship between top executive tenure and the firm's financial performance.

E) all of the above

Answer: E

Which type of chief executive officer with a great deal of experience in that particular industry would be appropriate for a corporation following a concentration strategy emphasizing vertical or horizontal growth?

A) professional liquidator

B) dynamic industry expert

C) turnaround specialist

D) analytical portfolio manager

E) cautious profit planner

Answer: B

Which type of chief executive officer who is highly knowledgeable in other industries and can manage diverse product lines would be appropriate for a corporation following a diversification strategy?

A) professional liquidator

B) dynamic industry expert

C) turnaround specialist

D) analytical portfolio manager

E) cautious profit planner

Answer: D

Which type of chief executive officer with a conservative style, a production or engineering background, and experience with controlling budgets, capital expenditures, inventories, and standardization procedures would be appropriate for a corporation following a stability strategy?

A) professional liquidator

B) dynamic industry expert

C) turnaround specialist

D) analytical portfolio manager

E) cautious profit planner

Answer: E

Successful prospector firms tend to be headed by CEOs with backgrounds in the areas of

A) research/engineering and general management.

B) accounting/finance, manufacturing/production, and general management.

C) marketing/sales.

D) human resources and strategy.

E) purchasing and logistics.

Answer: A

Successful defender firms tend to be headed by CEOs with backgrounds in the areas of

A) research/engineering and general management.

B) accounting/finance, manufacturing/production, and general management.

C) marketing/sales.

D) human resources and strategy.

E) purchasing and logistics.

Answer: B

Successful analyzer firms tend to be headed by CEOs with backgrounds in the areas of

A) research/engineering and general management.

B) accounting/finance, manufacturing/production, and general management.

C) marketing/sales.

D) human resources and strategy.

E) purchasing and logistics.

Answer: C

What did a study of 173 firms over a 25-year period reveal about CEOs of successful corporations?

A) They tended to have less loyalty than former CEOs, switching companies at a faster pace.

B) They tended to have the same functional specialization as the former CEO.

C) They tended to be more aggressive in their risk-taking than former CEOs.

D) They tended to rely more on skills developed through group decision making.

E) They tended to be turnaround specialists.

Answer: B

According to the text, the process of replacing a key top manager is called

A) executive succession.

B) executive placement.

C) executive strategy.

D) executive search.

E) executive outside succession.

Answer: A

Research suggests that boards of directors tend to look outside the firm for the next CEO under which following circumstance?

A) when the company is prosperous

B) when the company is having temporary difficulty

C) when the company is in trouble

D) when the company needs to follow a stability strategy

E) when the company needs to expand in order to continue growing

Answer: C

One study reported the percentage of senior executives that left a firm after a new CEO took office was ________ when the new CEO was an insider and ________ when the new CEO was an outsider.

A) 35; 10

B) 20; 34

C) 30; 30

D) 20; 10

E) 40; 20

Answer: B

What percent of large U.S. companies have CEO succession plans in place?

A) 10

B) 25

C) 50

D) 75

E) 90

Answer: C

Which one of the following is NOT one of the activities and techniques typically used in an assessment center to evaluate a person's suitability for advancement?

A) leaderless group discussions

B) management games

C) in-basket exercises

D) IQ tests

E) case analyses

Answer: D

According to the text, assessment centers have been able to accurately predict subsequent

A) job satisfaction.

B) job performance and career success.

C) organizational commitment.

D) organizational attachment.

E) management longevity.

Answer: B

To ensure employees are gaining the appropriate mix of experience to prepare employees for future responsibilities, many corporations move people from one job to another utilizing the technique of

A) job design.

B) job specialization.

C) job rotation.

D) job enlargement.

E) job enrichment.

Answer: C

According to a study of downsizing in the automobile-related industry, all of the following are problems associated with inappropriate downsizing EXCEPT

A) outsourcing was eliminated.

B) blanket offers for early retirement prompted even valuable employees to leave.

C) surviving employees experienced decreased morale.

D) surviving employees had to do extra work in addition to their own.

E) the wrong jobs were eliminated.

Answer: A

Downsizing is often used to implement a(n) ________ strategy.

A) retrenchment

B) growth

C) stability

D) hold

E) integration

Answer: A

Which of the following is NOT a guideline proposed for successful downsizing?

A) Contract out work that others can do cheaper.

B) Plan for long-run efficiencies.

C) Make across-the-board cuts.

D) Communicate the reasons for actions.

E) Invest in the remaining employees.

Answer: C

According to the text, a complete package for an executive working in another country costs

A) $50,000 to $75,000 annually.

B) $100,000 to $200,000 annually.

C) $150,000 to 250,000 annually.

D) $200,000 to $500,000 annually.

E) $300,000 to $1 million annually.

Answer: E

One of the big common mistakes by corporations sending executives on global assignments is NOT

A) raising their salaries.

B) educating executives about customs and values in other countries.

C) providing training for the regulatory environment.

D) providing excellent health care.

E) giving executives the opportunity to visit home.

Answer: B

According to the text, which one of the following is NOT one of the dangers of using primarily foreign nationals to staff managerial positions in subsidiaries?

A) the increased likelihood of suboptimization

B) difficulty for the MNC to meet long-term, worldwide objectives

C) the ability for communication and coordination becomes increasingly difficult

D) promotes anger and jealousy within the nationalistic host government

E) problems in coordinating activities of several international subsidiaries leads to problems in operating in a global industry

Answer: D

The percentage of U.S.-based expatriate managers who fail to adjust to a host country's social and business environment is

A) 6% or less.

B) approximately 35%.

C) between 50% and 75%.

D) around 80%.

E) greater than 90%.

Answer: B

The percentage of European and Japanese-based expatriate managers who fail to adjust to a host country's social and business environment is

A) 6% or less.

B) approximately 35%.

C) between 50% to 75%.

D) around 80%.

E) greater than 90%.

Answer: A

Which of the following practices was NOT identified by a study of 750 U.S., Japanese, and European companies that do a good job of managing foreign assignments?

A) When making international assignments they focus on transferring knowledge and developing global leadership.

B) They offer foreign assignments to people whose technical skills are matched or exceeded by their cross-cultural abilities.

C) They offer assignments to those who want to return home early to share their experiences.

D) They end foreign assignments with a deliberate repatriations process with career guidance.

E) They end foreign assignments with a deliberate repatriation process with jobs where the employees can apply what they learned in their assignments.

Answer: C

When managing corporate culture, the first question management must ask is

A) what the change in strategy means to the corporate culture.

B) whether a change in culture is needed.

C) whether an attempt to change the culture is worth the likely costs.

D) whether it is possible to manage around the culture.

E) whether stakeholders will be impacted.

Answer: A

Which CEO of Home Depot learned the dangers of attempting to change corporate culture?

A) Jack Welch

B) Robert Nardelli

C) Alfred Chandler

D) Julia Stewart

E) Antonio Perez

Answer: B

According to the text, what is the "key" to effective management of change in culture?

A) planning

B) operationalization

C) evaluation

D) staffing

E) communication

Answer: E

Which one of the following is NOT one of the characteristics possessed by companies that have made successful major culture changes?

A) The CEO has a strategic vision of what the company could become.

B) If the vision is difficult, the CEO immediately terminates the goal.

C) The vision is translated into objective, well-defined goals with appropriate incentives and recognition aides.

D) The CEO communicates to all employees where the organization stands in relation to the competition and its outlook on the future.

E) The CEO constantly updates the workforce as to the progress of the company in achieving those elements identified as important in attaining the vision.

Answer: B

Which one of the following is NOT one of the four general methods of managing two different cultures?

A) separation

B) deculturation

C) integration

D) assimilation

E) segmentation

Answer: E

Which method of managing disparate cultures involves a relatively balanced give-and-take of cultural and managerial practices between the merger partners, and no strong imposition of cultural change on either company?

A) separation

B) deculturation

C) integration

D) assimilation

E) segmentation

Answer: C

When Renault purchased a controlling interest in Japan's Nissan Motor Company to form one successful auto group from two with particular sensitivity to Nissan's culture, which approach to managing culture was employed?

A) separation

B) integration

C) deculturation

D) assimilation

E) segmentation

Answer: B

Which method of managing disparate cultures involves one organization's domination over another willing organization?

A) separation

B) deculturation

C) integration

D) assimilation

E) segmentation

Answer: D

Which method of managing disparate cultures is characterized by a separation of the two companies' cultures because of their differences?

A) separation

B) deculturation

C) integration

D) assimilation

E) segmentation

Answer: A

Which method of managing disparate cultures is the most common and most destructive method of dealing with two different cultures because one company imposes its demands at the expense of another company's culture?

A) separation

B) deculturation

C) integration

D) assimilation

E) segmentation

Answer: B

When Admiral was acquired by Maytag Corporation, the Admiral employees were willing to accept the dominance of Maytag's strong quality-oriented culture because they respected it. This demonstrates which approach to managing culture?

A) integration

B) separation

C) deculturation

D) assimilation

E) segmentation

Answer: D

When AT&T acquired NCR Corporation, the NCR managers were replaced with an AT&T management team. Which management strategy was employed in terms of culture?

A) integration

B) separation

C) deculturation

D) assimilation

E) segmentation

Answer: C

The strategy implementation tool used to determine what actions are going to be taken, by whom, during what time frame, and with what expected results is called a(n)

A) mission statement.

B) action plan.

C) MBO.

D) TQM.

E) succession plan.

Answer: B

Strategic goals can be accomplished through defining an action plan. Which one of the following is NOT one of the components which make up an action plan?

A) the specific actions to be taken

B) who will perform the action

C) during what time frame the action will be completed

D) where the action will be done

E) what are the expected results of the action

Answer: D

Action plans are important for several reasons. Which one of the following is NOT one of these reasons?

A) If the action plan is implemented properly, it ensures that the strategy will be a success.

B) It serves as a link between strategy formulation and evaluation and control.

C) The action plan specifies what needs to be done differently from the way operations are currently carried out.

D) During the evaluation and control process, an action plan helps in the appraisal of the performance and identifying remedial actions needed.

E) Motivation may be improved with the assignment of specific responsibility.

Answer: A

What does "MBO" stand for?

A) Market Buy-Out

B) Mergers, Buy-outs, and Options

C) Multinational Business Organization

D) Manufacturing Backlog Order

E) Management By Objectives

Answer: E

Which one of the following is NOT part of the process of MBO?

A) establishing and communicating organizational objectives

B) setting individual objectives that help implement organizational ones

C) reinforcing rules and regulations

D) developing an action plan of activities needed to achieve the objectives

E) periodically reviewing performance as it relates to the objectives

Answer: C

Which of the following is NOT descriptive of the purpose of MBO?

A) MBO provides an opportunity for the corporation to connect the objectives of people at each level to those at the next higher level.

B) MBO operates independently and requires very little supervision or administration.

C) The goals at each level ideally contribute directly towards overall organizational objectives.

D) MBO provides a potential method of integrating the physical, financial and human resource plans of an organization as it relates to the goals of the individual.

E) MBO ties the corporate, business, and functional objectives together along with the strategies used to achieve them.

Answer: B

"TQM" refers to

A) Total Questioning Methods.

B) Terrible Quantitative Management.

C) Tremulous Qualitative Methodology.

D) Total Quality Management.

E) Total Quality Methods.

Answer: D

Which of the following is NOT one of TQM's objectives?

A) greater flexibility in adjusting to customers' shifting requirements

B) lower cost through quality improvement and elimination of non-value-adding work

C) increased alignment of employee goals with management's objectives

D) quicker, less variable response in processes to customer needs

E) better, less variable quality of the product and service

Answer: C

Which of the following is NOT an essential ingredient of TQM?

A) intense focus on customer satisfaction

B) internal as well as external customers

C) action planning

D) continuous improvement

E) accurate measurement of every critical variable in a company's operations

Answer: C

Approximately what percent of manufacturing companies have implemented some form of quality management practices?

A) 92

B) 76

C) 50

D) 22

E) 10

Answer: A

One research study of TQM successes and failures concluded that a key ingredient in TQM programs is

A) effective communication in all levels of management.

B) excellent customer satisfaction.

C) top management.

D) formidable manufacturing practices.

E) respected lower level employees.

Answer: C

Which one of the following was NOT one of the cultural dimensions that Hofstede found which could explain the success or failure of certain management practices?

A) uncertainty avoidance

B) masculinity-femininity

C) individualism-collectivism

D) cultural diversity

E) power distance

Answer: D

According to Hofstede, which cultural dimension describes the extent to which a society accepts an unequal distribution of power in organizations?

A) uncertainty avoidance

B) masculinity-femininity

C) power distance

D) individualism-collectivism

E) long-term orientation

Answer: C

Nations like Greece and Japan whose people want career stability, formal rules, and clear-cut measures of performance would score high on which of Hofstede's cultural dimensions?

A) uncertainty avoidance

B) masculinity-femininity

C) individualism-collectivism

D) power distance

E) long-term orientation

Answer: A

According to Hofstede, which cultural dimension describes the extent to which a society values individual freedom and independence of action compared with a tight social framework and loyalty to the group?

A) uncertainty avoidance

B) masculinity-femininity

C) individualism-collectivism

D) power distance

E) long-term orientation

Answer: C

According to Hofstede, which cultural dimension describes the extent to which society is oriented toward money and things or towards people?

A) uncertainty avoidance

B) masculinity-femininity

C) individualism-collectivism

D) power distance

E) long-term orientation

Answer: B

According to Hofstede's cultural dimensions, which country scored among the highest on individualism?

A) Hong Kong

B) Germany

C) Pakistan

D) United States

E) Mexico

Answer: D

According to Hofstede's cultural dimensions, which country scored lowest on power distance?

A) Malaysia

B) Mexico

C) Germany

D) United States

E) Great Britain

Answer: C

According to Hofstede's cultural dimensions, which country scored among the lowest on uncertainty avoidance?

A) Malaysia

B) Mexico

C) Austria

D) United States

E) Great Britain

Answer: D

According to Hofstede, which cultural dimension describes the extent to which a society emphasizes the importance of hard work, education, and persistence as well as the importance of thrift?

A) uncertainty avoidance

B) masculinity-femininity

C) individualism-collectivism

D) long-term orientation

E) power distance

Answer: D

Hofstede's work on national culture was extended to nine cultural dimensions by

A) RHR International.

B) Project GLOBE.

C) Alfred Chandler.

D) Nahavardi and Malekzadeh.

E) McKinsey & Company.

Answer: B

What is an executive type? What is their significance to strategy?

Answer: Executives with a particular mix of skills and experiences may be classified as an executive type and paired with a specific corporate strategy. A corporation following a concentration strategy emphasizing vertical or horizontal growth would probably want an aggressive new chief executive with a great deal of experience in that particular industry — a dynamic industry expert.

A diversification strategy, in contrast, might call for someone with an analytical mind who is highly knowledgeable in other industries and can manage diverse product lines — an analytical portfolio manager. A corporation choosing to follow a stability strategy would probably want as its CEO a cautious profit planner, a person with a conservative style, a production or engineering background, and experience with controlling budgets, capital expenditures, inventories, and standardization procedures. Weak companies in a relatively attractive industry tend to turn to a type of challenge-oriented executive known as the turnaround specialist to save the company. If a company cannot be saved, a professional liquidator might be called on by a bankruptcy court to close the firm and liquidate its assets.

Because priorities certainly change over an organization's life, successful corporations need to select managers who have the skills and characteristics appropriate to the organization's particular stage of development and position in its life cycle.

What is executive succession? Discuss the hiring of insiders versus outsiders.

Answer: Executive succession is the process of replacing a key top manager. Succession planning has become the most important topic discussed by boards of directors. Prosperous firms tend to look outside for CEO candidates only if they have no obvious internal candidates. Hiring an outsider to be a CEO is a risky gamble. CEOs from the outside tend to introduce significant change and high turnover among the current management. Firms in trouble overwhelmingly choose outsiders to lead them. Boards realize that the best way to force a change in strategy is to hire a new CEO with no connections to the current strategy.

What are some of the approaches a company can take to identify and prepare its people for important positions?

Answer: A company can identify and prepare its people in several ways. One approach is to establish a sound performance appraisal system to identify good performers with promotion potential. The human resource system should also be examined to be sure that diverse people are hired and promoted. Many large organizations are using assessment centers to evaluate a person's suitability for an advanced position. They use special interviews, management games, in-basket exercises, leaderless group discussions, case analyses, decision-making exercises, and oral presentation to assess the potential of employees for specific positions. Assessment centers have been generally able to accurately predict subsequent job performance and career success. Job rotation is also used in many large corporations to ensure that employees are gaining the appropriate mix of experiences to prepare them for future responsibilities. Rotating people among divisions is one way that the corporation can improve the level of organizational learning.

List the guidelines proposed for successful downsizing.

Answer: The following guidelines have been proposed for successful downsizing:

Eliminate unnecessary work instead of making across-the-board cuts.

Contract out work that others can do cheaper.

Plan for long-run efficiencies.

Communicate the reasons for actions.

Invest in the remaining employees.

Develop value-added jobs to balance out job elimination.

What three general practices were identified by Black and Gregersen in companies which do a good job of managing foreign assignments?

Answer: Black and Gregersen found that the companies which do a good job of managing foreign assignments follow three general principles:

When making international assignments, they focus on transferring knowledge and developing global leadership.

They make foreign assignments to people whose technical skills are matched or exceeded by their cross-cultural abilities.

They end foreign assignments with a deliberate repatriation process with career guidance and jobs where the employees can apply what they learned in their assignments.

What are the four general methods of managing two different cultures?

Answer: There are four general methods of managing two different cultures. Integration involves a relatively balanced give-and-take of cultural managerial practices between the merger partners, and no strong imposition of cultural change on either company. It merges the two cultures in such a way that the separate cultures of both firms are preserved in the resulting culture.

Assimilation involves the domination of one organization over the other. The domination is not forced, but it is welcomed by members of the acquired firm, who may feel for many reasons that their culture and managerial practices have not produced success. Separation is characterized by a separation of the two companies' cultures. They are structurally separated, without cultural exchange. Deculturation involves the disintegration of one company's culture resulting from unwanted and extreme pressure from the other to impose its culture and practices. This is the most common and most destructive method of dealing with two different cultures. It is often accompanied by much confusion, conflict, resentment, and stress.

What information should an action plan include?

Answer: An action plan should include the following information:

Specific actions to be taken to make the program operational.

Dates to begin and end each action.

Person (identified by name and title) responsible for carrying out each action.

Person responsible for monitoring the timeliness and effectiveness of each action.

Expected financial and physical consequences of each action.

Contingency plans.

What are the four elements of the MBO process?

Answer: The Management by Objectives (MBO) process involves the following:

Establishing and communicating organizational objectives.

Setting individual objectives (through superior-subordinate interaction) that help implement organizational ones.

Developing an action plan of activities needed to achieve the objectives.

Periodically reviewing performance as it relates to the objectives and including the results in the annual performance appraisal.

What is TQM and what are its essential ingredients?

Answer: Total Quality Management (TQM) is an operational philosophy committed to customer satisfaction and continuous improvement. TQM is committed to quality/excellence and to being the best in all functions. TQM's essential ingredients are:

An intense focus on customer satisfaction.

Internal as well as external customers.

Accurate measurement of every critical variable in a company's operations.

Continuous improvement of products and services.

New work relationships based on trust and teamwork.

What are Hofstede's dimensions of national culture?

Answer: Hofstede's dimensions of national culture are as follows:

Power distance (PD) is the extent to which a society accepts an unequal distribution of power in organizations.

Uncertainty avoidance (US) is the extent to which a society feels threatened by uncertain and ambiguous situations.

Individualism-collectivism (I-C) is the extent to which a society values individual freedom and independence of action compared with a tight social framework and loyalty to the group.

Masculinity-femininity (M-F) is the extent to which a society is oriented toward money and things (masculine) or toward people (feminine).

Long-term orientation (LT) is the extent to which society is oriented toward the long versus the short term.