Test bank of 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) 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] ... 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. .. 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... 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