Fred r david – strategic management, 13th edition ch10

Exam Name _ TRUE/FALSE Write 'T' if the statement is true and 'F' if the statement is false 1) Leadership is defined as a process of influence that is shared in nature between leaders and followers 1) _ 2) In the Arab world leaders have not had a strong impact on the welfare of societies 2) _ 3) Certain Arab corporations are positioned among the best in the global marketplace 3) _ 4) In formulating and evaluating strategies, leadership has a vital role to play 4) _ 5) The Boston Consulting Group recognized eight Arab companies as being among the top global challengers 5) _ 6) Most Arab executives who have initiated profound changes and built successful corporations have lost sight of their responsibility towards their business and the future of the region 6) _ 7) According to the GCC's definition, farsighted vision is a short-term outlook that recognizes the importance of building sustainable institutions for the current generation 7) _ 8) According to the GCC's definition, a willingness to seek ideas from around the world and customize them for the GCC's unique circumstances is an example of global perspective 8) _ 9) According to the GCC's definition, an example of regional and global perspective is the fact that the GCC's leaders are not just building their own organizations but are also acting in concert to establish the region as a global player 9) _ 10) An example of practical openness, according to the GCC's definition, is a willingness to seek ideas from around the world but only if they reflect cultural ideas which are new to the GCC 10) 11) The desired qualities that should be nurtured in leaders of the next generation, according to the GCC's definition, are far-sighted vision, ability to generate profit, and communication skills 11) 12) The spread of desired qualities in leaders of the next generation can be achieved by communicating the values and practices shown by successful CEOs in the Arab region 12) 13) In the Arab region, the successful CEOs have always delegated the shaping of their organizations' culture 13) 14) In conducting business in the region, Arab executives have sometimes left certain initiatives and actions to chance 14) 15) The COO of Mubadala Development Company has commented that his company originally invested for purely financial returns without a strategic objective 15) 16) Executives rarely differ in their orientations or in their strategy implementation 16) 17) In the autocratic form of leadership, there are strict rules and regulations regarding procedures and coordination 17) 18) In the autocratic form of leadership, consultation always takes place 18) 19) In the autocratic form of leadership, sharing of strategic information or coaching of subordinates is not likely to happen 19) 20) Benevolent leaders not set specified rules and policies 20) 21) The tradition-driven executives are particularly concerned with group harmony 21) 22) The tradition-driven leaders usually make decisions at the top and centralize control, and maintain formality in operational aspects and conduct 22) 23) In tradition-driven leadership situations, subordinates may exhibit commitment to goal implementation because of their involvement in performance 23) 24) The spiritually enlightened leaders are guided by ehsan (perfection, excellence) and general Islamic assumptions 24) 25) The spiritually enlightened executives are sensitive to their organizational and personal image and monitor business trends 25) 26) The spiritually enlightened executives seek input and participation from their subordinates in articulating their strategic vision 26) 27) The business scene in the Arab world shows that Arab CEOs not usually have multiple roles 27) 28) As part of their strategic managerial roles, most managers in the region are active in securing critical financial resources and in representing the company to outsiders 28) 29) Unlike the early generation of executives who depended mostly on intuition, the new executives are increasingly involved in strategy evaluation 29) 30) Operations-related managerial roles center on strategy implementation, fair and efficient division of labor, effective control systems, reward systems, providing feedback, and anticipation of problems 30) 31) Managers in the Arab world, in the era of global competition, have had to be more willing than their predecessors to participate in strategic implementation 31) 32) Managers in the Arab world are generally uncomfortable with leadership activities and roles 32) 33) In formulating strategy and engaging in implementation, CEOs have to play multiple roles and reconcile the pressing demands of various stakeholders 33) 34) Among the most useful indicators of effective leadership is having a succession plan in place for the next CEO 34) 35) Having a succession plan shows CEOs are preoccupied with the future and not focused on building a strong culture immediately 35) 36) The Arab private sector has always had a tradition of effective succession planning 36) 37) Since the majority of the firms in the Arab region are family-owned businesses, a smooth transition is necessary to ensure the survivability and vitality of the business 37) 38) In the Arab world, there should be a clearly defined process for the selection of a CEO successor 38) 39) Whether the new CEO is from within or from outside the organization, the role of CEO is similar to other operating roles 39) 40) The period between the announcement of the appointment and the actual 'changing of the guard' (the assumption of responsibility) should be considered a honeymoon period for the new CEO 40) 41) Business organizations that have sustained growth and achieved remarkable market positions not necessarily have a strong organizational culture 41) 42) The articulation of corporate values enhances loyalty among employees and creates a positive image in the marketplace 42) 43) Culture has a minor effect on strategy execution 43) 44) The founders of an organization are usually the ones who set the tone and vision for the organization 44) 45) As an organization grows in size and more employees join it, they bring with them their own beliefs and values, but these don't change the existing culture 45) 46) In the Arab world, where tradition is deeply ingrained in the mind of the people, employees easily accept identification with the organizational culture when the leaders are concerned with moral conduct and are known for their thoughtfulness and inspirational roles 46) 47) Whilst promoting a strong and positive culture is vital for a company, it does not have much of an affect on strategy implementation 47) 48) Strong culture helps to ensure that a company is cohesive and employees have a strong bond with the company and its mission 48) 49) Similarly to the West, companies in the Arab world usually deal swiftly with the symptoms of an unhealthy culture 49) 50) It is essential that senior managers provide a mechanism to effectively tackle aspects of an unhealthy culture and prevent the temptation to be complacent 50) 51) Transparency is not so crucial for safeguarding cultural adaptation and preventing the emergence of an unhealthy culture 51) 52) A strong organizational culture is a strategic advantage for an organization 52) 53) Culture is one of the most critical factors in strategy formulation and implementation 53) 54) A strong culture helps a company formulate and communicate a coherent strategy, as well as helping to focus employees' energy throughout an organization into implementing the strategy 54) 55) Companies that have high divergence between culture and strategy often experience higher performance and encounter relatively fewer difficulties in implementation 55) 56) Where existing culture does not smoothly facilitate strategy execution, senior executives face serious problems 56) 57) Executives should not give priority to changes that might differ from existing norms and values 57) 58) Increasingly in the Arab world, corporations have become an influencing factor in economic development and improving the welfare of the people 58) MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question 59) The essence of leadership is the ability 59) A) to articulate vision, organize and deploy resources, and sustain productive involvement and inspirational performance B) to set a single direction for their organization and ensure everyone adheres to it C) to ensure successful results are delivered, regardless of whether everyone agrees or not D) to articulate vision, delegate the organization of resources, and leave communication to other executives E) to communicate the organization's main purpose and mission, but not to get too involved in strategy execution 60) All of the following UAE based Arab companies were recognized by Boston Consulting Group as being among the top 100 global challengers, except 60) A) Agility B) Etisalat C) Dubai World D) Emaar Properties E) Emirates Airlines 61) The Arab companies recognized by Boston Consulting Group as being among the top 100 global challengers were selected for their 61) A) ability to create value during economic instability, for their robust revenues and profits, for their hefty purchasing power, for significant activity in mergers and acquisitions, and for their cautious attitudes toward risk B) ability to survive during economic instability, for their hefty purchasing power, for making profits without mergers and acquisitions, and for their bold attitudes toward risk C) ability to create value during economic instability, for their robust revenues and profits, for their hefty purchasing power, for significant activity in mergers and acquisitions, and for their bold attitudes toward risk D) ability to make profit during economic stability, for their hefty purchasing power, for significant activity in mergers and acquisitions, and for their bold attitudes toward risk 62) Responsible leaders understand that strategy has two primary objectives These are 62) A) to link their corporations to the rest of the market and achieve competitive advantage B) to differentiate their corporations from the rest of the market and have comparative advantage C) to differentiate their corporations from the rest of the market and achieve competitive advantage D) E) Engage with boards of directors as strategic partners 79) Issues that should be primarily confined to CEOs include 79) A) monitoring financial performance B) setting performance expectations, accountability, and organizational culture C) making appointments to senior management positions D) planning information technology systems E) all the above 80) Unlike most of their counterparts in the west, Arab CEOs face three interwoven challenges Which of the following is not one of those challenges? 80) A) finding appropriate locations from which to operate B) building a thriving economy while being sensitive to political demands and government intervention C) Meeting social and cultural expectations D) Coping with intense global competition and overcoming hurdles in order to venture abroad 81) Which of the following have the pioneer generation of CEOs relied on to establish their businesses? 81) A) Rich and deep sources of data about their markets B) Gut feelings and unique insights grounded on a keen alertness to emerging opportunities, as well as basic common sense C) Generosity and shared insights from other CEOs D) Strategic planning 82) Which of the following is not a common issue that can complicate power transitions and business? 82) A) Conflicting interests and priorities B) Rivalry among family members C) Matrimonial relationships among powerful executives D) Reluctance of the founding fathers to nominate a successor 83) Which of the following is not a standard activity that companies should pursue in order to increase their chances of finding a good CEO that will maintain quality performance? 83) A) The board of directors should be actively involved in the executive search process B) Ensure that there is a pool of trained internal candidates C) Have a succession plan D) The board of directors should allow external recruiters to lead the process 84) During the period following the selection of a new CEO, which particular three guidelines are suggested to help ensure successful transition? 84) A) Issue a communication that the previous CEO is still in charge in the short term; stay confident but remember how much there is to learn; alert shareholders to the possibility of a period of turbulence B) All decision making should be done by the board of directors in the short term; ensure the previous CEO leaves as soon as possible; avoid any strategic decisions C) Make it clear who is in charge; use the interim period wisely; and stay confident but remember how much there is to learn D) Ensure the previous CEO stays for as long as possible; avoid sending out any press releases during this period; ensure the new CEO spends time learning about the company E) Avoid making any major changes; send the new CEO on a training course; use the interim period wisely 85) Which of the following can be said of a new CEO, regardless of whether they come from within or from outside the organization 85) A) A new CEO will always learn faster if they learn independently B) The role of CEO is basically no different from other operating roles C) The role of CEO is different from other operating roles D) A new CEO should always learn everything about their role from the previous CEO 86) Which of the following best describes a strong corporate culture? 86) A) Shared values and beliefs are widely and deeply held B) Employees all need to belong to the same religion C) Lots of different values can coexist D) Conflicts usually get resolved 87) Which of the following is not a characteristic of a strong culture? 87) A) Values and beliefs among members B) Ease of absorbing change C) Adaptability D) Social norms 88) Employees who consider violating cultural standards 88) A) represent a healthy expression of creativity which is welcomed by managers B) will experience tremendous pressure from other employees and managers to observe those standards C) will inevitably lose their jobs D) are almost always promoted sooner than employees who adhere to company culture 89) Which of the following is not considered a relevant way to sustain organizational norms and principles? 89) A) Communicate and promote company legends B) Reiterating the roots of the organization C) Acknowledge the contribution of others to the progress and achievement of the organization D) Make sure there is noplace within the company for those who break cultural standards E) Discourage any questionning of organizational priorities 90) Which of the following is not a way in which a strategy-culture fit can help a company's strategy execution? 90) A) It helps employees feel better about their jobs, the company they work for, and the merits of what the company is attempting to achieve B) It provides unlimited bonuses, perks, and incentives for the employees C) It directs organizational energy towards effective strategy implementation D) It encourages actions, behaviors, and work practices supportive of effective strategy execution 91) Which of the following is not characteristic of an unhealthy culture? 91) A) Coping with regular change B) Unethical and greed-driven C) Politicized culture D) Insular or inward focus 92) Under the conditions of incompatibility between culture and strategy, executives have to consider various options for managing 92) A) leader-subordinates relationships B) culture-company relationships C) manager-line staff relationships D) culture-strategy relationships 93) Leadership and are instrumental for strategy formulation and execution 93) A) organizational culture B) organizational resources C) corporate citizenship D) organizational image ESSAY Write your answer in the space provided or on a separate sheet of paper 94) What are the four forms of leadership? 95) Describe the importance of leadership and culture in the strategic management process 96) Describe the three categories of the evolving role of the CEOs 97) Explain some of the rules for successful CEO transitions 98) How does corporate culture affect strategy execution? 99) Outline at least four ways to sustain organizational norms and principles 100) What are the characteristics of an unhealthy culture? Quote examples from the companies situated in the Arab world 101) Describe the three ways a strategy-culture fit helps a company’s strategy execution 102) What are the various options for managing culture-strategy relationship? 1) TRUE 2) FALSE 3) TRUE 4) TRUE 5) FALSE 6) FALSE 7) FALSE 8) FALSE 9) TRUE 10) FALSE 11) FALSE 12) TRUE 13) FALSE 14) TRUE 15) TRUE 16) FALSE 17) TRUE 18) FALSE 19) TRUE 20) FALSE 21) TRUE 22) FALSE 23) TRUE 24) TRUE 25) TRUE 26) TRUE 27) FALSE 28) TRUE 29) TRUE 30) TRUE 31) TRUE 32) FALSE 33) TRUE 34) TRUE 35) FALSE 36) FALSE 37) TRUE 38) TRUE 39) FALSE 40) TRUE 41) FALSE 42) TRUE 43) FALSE 44) TRUE 45) FALSE 46) TRUE 47) FALSE 48) TRUE 49) FALSE 50) TRUE 51) FALSE 52) TRUE 53) TRUE 54) TRUE 55) FALSE 56) TRUE 57) FALSE 58) TRUE 59) A 60) A 61) C 62) C 63) D 64) B 65) C 66) B 67) B 68) D 69) D 70) B 71) C 72) D 73) B 74) A 75) B 76) E 77) C 78) B 79) B 80) A 81) B 82) C 83) D 84) C 85) C 86) A 87) D 88) B 89) E 90) B 91) A 92) D 93) A 94) Autocratic - Leadership decisions are made at the top, and there are strict rules and regulations regarding procedures and coordination Consultation rarely takes place and sharing of strategic information or coaching of subordinates is not likely to happen Therefore, implementation may fall short of expectations Benevolent (Sheikocratic) - Tends to involve a centralized authority and an inclination toward personal relations These leaders, too, may set specified rules and policies, but may manage business affairs informally Input is received from subordinates but may not necessarily be incorporated Often, leaders rely on intuition rather than on objective data Implementation of directions depends on how the leader is involved and the degree of his subordinates’ commitment to the success of the organization Tradition-Driven (Group-Oriented) - Concerned with group harmony and the viability of the organization to be sustained through coaching, involvement, and attentiveness to input from subordinates Leaders might make decisions at the top and centralize control, but are often attentive to feedback from subordinates and maintain informality in operational aspects and conduct Because of their involvement in performance, subordinates may exhibit commitment to goal implementation Spiritually Enlightened - Organizational interests are aligned with the welfare and viability of the community Leaders are guided by ehsan and general Islamic assumptions They seek to take advantage of opportunities in business and the political arena but are directly influenced by an in-built motivation to pursue goodness and are guided by deeply held beliefs In articulating their strategic vision, they seek input and participation from their subordinates 95) Leadership and organizational culture are instrumental for strategy formulation and execution Particular attention should be given to leadership because leaders of the organization not only shape the culture and develop and oversee strategy implementation, but are also the ones who are ultimately responsible for steering organizational direction and cultural change These roles involve motivating and inspiring others to action, providing critical information and guidance, clarifying cultural norms and values, fostering cooperative environments, and resolving conflicts, among others Managers in the Arab world are generally comfortable with these activities and roles Because of the personal aspects of relationships, these activities take on an added value and managers undertake them with exceptional enthusiasm Increasingly in the Arab world, corporations have become an influencing factor in economic development and improving the welfare of the people Accordingly, organizational leaders have vital roles, both in their organizations and in society How leaders develop and act, therefore, is important for organizational performance and growth Their strategic roles should be given priority and their aspirations and relations to employees and customers are essential for enhancing loyalty and performance in the marketplace Likewise, culture can either make strategy implementation easier or harder So, linking strategy to culture is vital for highperformance organizations Managing strategy—culture relationships gives insight on what has to be done to energize employees, deploy resources, and achieve high performance 96) Strategic Managerial Roles These activities are related to strategy formulation, innovation activities, making critical information available, setting long-term objectives, articulating an organizational vision, securing scarce resources, and enhancing the image of the corporation Operations-Related Managerial Roles Operational roles center on strategy implementation, fair and efficient division of labor, effective control systems, reward systems, providing feedback, and anticipation of problems In the Gulf region, there are two major obstacles to senior managers’ involvements in such activities a heavy reliance on expatriates to perform tasks and an unwillingness to involve themselves in details Leadership Roles These roles involve motivating and inspiring others to action, providing critical information and guidance, clarifying cultural norms and values, fostering cooperative environments, and resolving conflicts, among others 97) An indicator of effective leadership is having a succession plan in place for the next CEO There are a few rules for successful CEO transitions • Make it clear who is in charge In many family-owned businesses, the founder or the senior member often stays around in the organization It should be clear, however, for the board and employees, that the new CEO is the ultimate decision-maker The founder or the senior family member may serve as the wise man or confidant for the new CEO • Use the interim period wisely The period between the announcement of the appointment and the actual ‘changing of the guard’ (the assumption of responsibility) should be considered a honeymoon period for the new CEO During this period, the new CEO should become familiar with who’s who within the organization, its history, and its strategic intent is essential and should be treated as an opportunity for building social and political capital • Stay confident but remember how much there is to learn Whether the new CEO is from within or from outside the organization, the role of CEO is different from other operating roles This is because only the CEO can link external consistencies with internal organization The new CEO has to learn independently while keeping spirit and confidence up, even in times of adversity 98) Culture shapes and influences strategy execution as it represents the shared values and beliefs across an organization The wider and more deeply held these values and beliefs within an organization, the stronger the corporate culture Business organizations such as Dallah Albaraka and Zain, that have sustained growth and achieved remarkable market positions, have a strong organizational culture For example, Dallah Albaraka communicates elements of its culture to all stakeholders in its brochures, website, and other activities This articulation of corporate values such as society, customers, partners, and employees enhances loyalty among employees and creates a positive image in the marketplace A company’s deeply held values and beliefs provide employees with both a sense of identity with the company, and an understanding of what is acceptable or unacceptable behavior Thus, employees who may think of violating cultural standards will experience tremendous pressure from other employees and managers to observe those standards Senior managers’ own behavior and general conduct are also crucial in setting a standard for other employees, and for expressing to stakeholders the values and culture of the company Over time, employees’ patterns of behavior become part of the company culture and reinforce their commitment to the company, which also helps to ensure strategies are executed effectively 99) Students should choose from the following Reiterating the roots of the organization, how it was started and evolved, and the role of the founder Emphasize ethical standards Acknowledge the contribution of others to the progress and achievement of the firm Highlight important norms and themes Communicate and promote company legends Make sure that there is no place within the company for those who break cultural standards Reorient members of the organization to guiding values and top priorities, and introduce new employees to themes, stories, and norms Senior managers must reinforce important values and norms through their actions and pronouncements within and outside the organization 100) An unhealthy culture exhibits several characteristics Chief among them are • Politicized culture - Political infighting and conflicting priorities among senior members of the organization create a climate that is not conducive to smooth operations, and end up consuming the energy and resources of the company on issues which have nothing to with corporate goals For example, in 2007, Forsyth Partners of Dubai was forced to close down due to “irreconcilable differences of opinion and infighting” among its board members • Change-resistance - Resistance to change can be damaging to company progress and growth; it not only reinforces avoiding taking risk but also makes it harder to engage in creative opportunities, or compete in open and dynamic markets For example, in the GCC area, it was reported that contractors are resistant to new ideas and tend to look at the bottom line rather than the design • Insular or inward focus - The dominant aspect of the inwardly-focused culture is that managers and senior personnel discount developments taking place in the market, and are skeptical about the worth of suggestions and input from their customers, suppliers, or competitors This can mean the company will have difficulty coping with current developments and will miss benefiting from important market trends • Unethical and greed-driven - When senior managers encourage, tolerate, or overlook the violation of ethical standards and behavior, corruption and scandals thrive For example, the Algerian government had to intervene in enforcing rules and regulations as a result of corruption scandals hitting Sonatrach, a state oil and gas company The scandal halted the development of several petrochemicals and refining projects due to the involvement of senior executives, as some of the contracts were awarded through an over-thecounter (OTC) or off-exchange trading basis, without tendering 101) A strategy—culture fit helps a company’s strategy execution in three ways Culture that encourages actions, behaviors, and work practices supportive of effective strategy execution provides personnel with clear guidance on how to get things done and its members consciously exercise pressure on each other to conform to acceptable behaviors and norms Deeply rooted culture directs organizational energy towards effective strategy implementation A culture grounded in many of the needed strategy-executing behaviors helps employees feel better about their jobs, the company they work for, and the merits of what the company is attempting to achieve 102) Engage in a major overhaul of existing staff and start restructuring (change culture) For example, where the required change is vast and represents a departure from the previous organizational culture, a new owner may find it useful to change the management staff and recruit new managers who share the new owner's beliefs This too may require reorienting employees to new norms of competition, performance standards, and productivity In a situation where there is no change in ownership but senior managers are planning to change direction, engage in innovation, enter new markets, and acquire new technologies, senior executives need to examine what has to be done They may have to coopt some managers, restructure the organization, recruit new managers, or introduce changes gradually If all these attempts are not producing desired results, a major overhaul may be the only choice Avoid clashing with the existing culture If a company requires a few strategic changes that have low compatibility with the existing culture, then senior executives must consider options which not clash directly with the culture or which minimize resentment of change for example, creating a separate firm or division; using teams, taskforces, or project coordinators; subcontracting, bringing in outsiders, or selling the company Link up to a reward system and underscore the importance of identifying with the organization Where a company is contemplating several changes and these changes appear to be consistent with the existing culture, there may be a need to energize personnel through active involvement of senior managers and to link execution to reward while highlighting organizational identity and loyalty Strengthen the existing culture Where there are few changes and these changes are fairly compatible with prevailing norms, the best option is for the company to strengthen the existing culture and to take advantage of the contemplated changes to further its strategic initiatives and work environment [Students should support their answers by using examples from pages 340-341 of the textbook] ... their organizations and in society How leaders develop and act, therefore, is important for organizational performance and growth Their strategic roles should be given priority and their aspirations... major overhaul of existing staff and start restructuring (change culture) For example, where the required change is vast and represents a departure from the previous organizational culture, a... Autocratic - Leadership decisions are made at the top, and there are strict rules and regulations regarding procedures and coordination Consultation rarely takes place and sharing of strategic