Harrison TB8-6e PDF

Title Harrison TB8-6e
Course Business Policy
Institution Eastern Michigan University
Pages 6
File Size 114 KB
File Type PDF
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Summary

Lecture notes, mandatory reading...


Description

Chapter 8: Strategic Control and Restructuring

Chapter 8 Strategic Control and Restructuring TRUE/FALSE QUESTIONS 1.

A strategic control system helps top managers evaluate organizational progress. Answer: T

2.

Feedforward control provides managers with information concerning outcomes from organizational processes. Answer: F

3.

Feedback control includes a timeframe for measuring performance. Answer: T

4.

Feedback control systems can motivate managers to pursue organizational interests as opposed to purely personal interests. Answer: T

5.

Budgets are a common type of feedforward control. Answer: F

6.

The first step in a strategic control system is measuring actual firm performance. Answer: F

7.

No strategy or organizational design works indefinitely. Answer: T

8.

Restructuring typically involves a renewed emphasis on the things an organization does well, combined with a variety of tactics to revitalize the organization and strengthen its competitive position. Answer: T

9.

Restructuring can be defined as a detailed analysis of a firm’s competitors and other external stakeholders and competitive forces. Answer: F

10.

Downscoping involves increasing an organization’s diversification while reducing its size. Answer: F

11.

Most firms that file for Chapter XI protection are able to retain most of their assets through the end of the reorganization process.

Chapter 8: Strategic Control and Restructuring

Answer: 12.

F

One example of a leveraged buyout is when a business unit is purchased by its managers. Answer: T

MULTIPLE CHOICE QUESTIONS 13.

A strategic control system helps managers to assess the relevance of the organization’s strategy: A. To its profitability B. To its progress in the accomplishment of its goals C. To the needs of its employees D. In order to specify product line extensions E. To its competitors’ strategies Answer: B

14.

When managers are trying to anticipate changes in the internal and external environments, they are using: A. Feedforward control B. Vertical control C. Feedback control D. Horizontal control E. Integrative control Answer: A

15.

Which type of control provides managers with information concerning outcomes from organizational activities? A. Feedforward control B. Vertical control C. Feedback control D. Horizontal control E. Integrative control Answer: C

16.

Feedback control systems perform the following functions in organizations: A. They help managers decide when and how to intervene in organizational processes by identifying areas requiring further attention B. They motivate managers to pursuer organizational interests C. Creating specific objectives ensures that managers understand the plans and strategies that guide organizational decisions D. All of these are true E. A and B are true, but not C Answer: D

Chapter 8: Strategic Control and Restructuring

17.

The elements in a feedback control system include all of the following except: A. Establishment of targets and time frames in which they should be accomplished B. Assignment of responsibility for achieving specific targets to managers C. Development of an action plan D. Establishment of policies E. Identification of key result areas Answer: D

18.

Feedforward control systems are especially important because of: A. Rapid changes in the broad environment B. Stability in the environment C. High profits D. The decreasing role of government regulation in the world economy E. Social audits Answer: A

19.

A control system that consists of rules, policies and guidelines to guide the behavior of organizational members is: A. Bureaucratic control B. Output control C. Clan control D. Process control E. Human resources systems Answer: A

20.

A control system that is based on socialization of organizational members is: A. Bureaucratic control B. Output control C. Clan control D. Process control E. Human resources systems Answer: C

21.

National cultures can be classified on their levels of Confucian dynamics. This means: A. The degree to which decisions are focused on the long term or short term B. The degree to which society draws strong distinctions between gender roles C. The degree to which members of society accept uneven power distribution D. The degree to which the focus of society is on the individual or the group E. The degree to which members of society are tolerant of uncertainty and ambiguity Answer: A

Chapter 8: Strategic Control and Restructuring

22.

Which of the following is not a dimension used to describe national cultures? A. The degree to which members of the society accept or expect uneven power distributions in society B. The degree to which the focus of society is on individuals or the group C. The degree to which the society draws strong distinctions between gender roles D. The degree to which members of the society reflect established ethical norms E. The degree to which members of society are tolerant of uncertainty and ambiguity Answer: D

23.

Common restructuring techniques include all of the following except: A. Chapter XI reorganization B. Leveraged buyouts C. Retrenchment D. Refocusing corporate assets on distinctive competencies E. These are all common restructuring techniques; there is no exception Answer: E

24.

If a firm sells units that are not consistent with the strategic direction of the organization, it is involved in: A. Low-cost leadership B. Leveraged buyouts C. Downscoping D. Outsourcing E. Downsizing Answer: C

25.

Which of the following restructuring actions is most likely to involve the divestiture of a business unit? A. Leveraged buyout B. Joint venture C. Downscoping D. Acquisition E. None of the above Answer: C

26.

Businesses that should be strongly considered for divestiture during restructuring include those: A. With high value in the financial markets B. With high R&D expenses C. With low operational relatedness D. With low to moderate risk

Chapter 8: Strategic Control and Restructuring

E. With high capital intensity Answer: C 27.

Retrenchment: A. Often involves work force reductions B. Is a growth strategy C. Involves an increase in the firm’s workforce D. Involves a loosening of cost controls E. Typically builds on the existing corporate culture Answer: A

28.

Which of the following provides an opportunity for an organization to work out a plan for solving its financial problems under the supervision of a federal court? A. Prepackaged reorganization strategy B. Chapter XIII bankruptcy C. Restructuring D. Downscoping E. Chapter XI reorganization Answer: E

29.

Chapter XI reorganization: A. Means that an organization must liquidate its assets B. Means that some management decisions must be approved by a court C. Is intended for companies that have lots of liquid assets but are locked into an unfair labor contract D. Is most successful if an organization has very high debt levels E. None of the above Answer: B

30.

Which of the following is a common outcome from leveraged buyouts? A. Work force stabilization or increase B. Opening of new plants C. Increase in debt D. Low financial returns for the executives who initiate the buyouts E. Increased innovation and R&D Answer: C

31.

A firm’s business cycle orientation includes: A. Forecasting resources B. Business-cycle sensitive management principles C. Business cycle literacy D. Supportive organizational culture E. All of the above Answer: E

Chapter 8: Strategic Control and Restructuring

ESSAY QUESTIONS 32. What is a strategic control system? What is the difference between feedforward and feedback controls? Answer: A strategic control system is “a system to support managers in assessing the relevance of the organization’s strategy to its progress in the accomplishment of its goals, and when discrepancies exist, to support areas needing attention.” There are two parts to strategic control. Feedforward control involves the analysis, by managers, of changes in the external and internal environments based on the analysis of inputs from stakeholders and the remote environment. Feedforward control helps managers to set goals or tolerance limits for firm performance. Feedback control provides managers with information concerning outcomes from organizational activities. It enables managers to determine whether goals have been met or the tolerance levels have been exceeded. 33. What is restructuring? Why might a firm restructure? What are some of the common restructuring techniques? Answer: Restructuring typically involves a renewed emphasis on the things an organization does well, combined with a variety of tactics to revitalize the organization and strengthen its competitive position. If a firm is successful with its strategies, that success alone will create a need for change, because the increases in sales volume and organizational size will demand different management methods and organizational structures. What is just as typical, however, is for customers, competitors, and technologies to interact to create a changing business environment, which also requires that the organization make changes. Common restructuring tactics include refocusing corporate assets on distinctive competencies, retrenchment, Chapter XI reorganization, leveraged buyouts, and changes to organizational structure. Organizations may use any one or a combination of the strategies when restructuring. 34. What is a divestiture? Describe the two common types of divestitures. What types of businesses should be divested? Answer: A divestiture is a reverse acquisition. One type of divestiture is a sell-off, in which a business unit is sold to another firm or, in the case of a leveraged buyout, to the business unit’s managers. Another form of divestiture is the spin-off, which means that current shareholders are issued a proportional number of shares in the spun-off business. The key advantage of a spin-off relative to other divestiture options is that shareholders still have the option of retaining ownership in the spun-off business. The businesses that should be divested during a restructuring include those that have little to do with the distinctive competencies of the organization....


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