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Exam 12: Strategic Leadership

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Question 51

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Normally, the more involved a board of directors is in shaping the firm's strategic direction, the

A) more balanced the organization is.
B) higher the corporation's performance is.
C) more rapidly executive decisions can be make.
D) more difficult it becomes to make effective executive decisions.

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Question 52

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Criteria for reevaluating internal business processes using the balanced scorecard include all of the following EXCEPT

A) asset utilization improvements.
B) improvements in employee morale.
C) increases in employee skills.
D) changes in turnover rates.

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Question 53

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CEO duality refers to

Case Scenario 3: Zachary, Wesley & Partners. Zachary, Wesley & Partners (ZW&P) is a leveraged buyout (LBO) firm that specializes in friendly buyouts of mid-sized U.S. retailing and manufacturing firms. ZW&P shuns turnarounds and hostile takeovers; its typical deals retain the existing management team and provide extensive funding for what is perceived to be an already sound strategy. It focuses on this type of firm because the partners have good contacts in retailing and manufacturing and they are typically able to avoid bidding wars when the LBO is negotiated. The firm has been immensely profitable over the years, in part due to the very extensive and selective due diligence process used to winnow down the list of prospective targets. Fewer than one out of one hundred candidates are even approached, and only a fraction of these passes further screens in the LBO negotiations. The resulting profitability has, in turn, given ZW&P a strong reputation in the financial community for successful deals, and among managers for being able to put together needed financing with good business plans. -(Refer to Case Scenario 3) What are this firm's core resources and capabilities?

When the new CEO is from inside the firm and a heterogeneous top management team is in place, the strategy may not change, but innovation is likely to continue.

The goal of investing in human capital is to

Which of the following is NOT associated with heterogeneous top management teams?

Discuss how the managerial succession process and the composition of the top management team interact to affect strategy.

For 15 years, Edward was a compensation specialist at a mid-sized firm. He was laid off when the firm experienced financial setbacks. Edward has decided to open his own business as a compensation consultant to small firms. He can expect that his main source of human capital will be a bank line of credit.

Employees usually have a strong preference for firms to use the internal managerial labor market when selecting top management team members and the CEO.

Case Scenario 2: Yepsen Timber Farms, Inc. Yepsen Timber Farms, Inc., (YTF) was started around 1933 by Danish immigrants. The firm's primary operations were timber harvesting on several thousand acres in Oregon acquired in part under the Homestead Act, and in part through direct purchase. The firm was founded, initially as a partnership, between brothers Mogens and John (Jack) Yepsen. The Yepson brothers were among the first four graduates at Oregon Agricultural College (now Oregon State University), worked for the forest service and private industry in Oregon for a number of years, then quit their respective jobs to manage the forest they had been developing for a number of years. While timber is considered a low-tech type business, Mogens and Jack were very innovative from the standpoint that they established "tree farms," that is, harvesting then replanting acreage so that it would yield timber on a sustainable basis. At the time, and in certain parts of the world to this day, timber lands were typically "clear cut" where all the trees were stripped from a property, then the timber harvester simply moved to another parcel. This practice left thousands of acres barren, and often damaged valuable animal habitats and watershed. The brothers also introduced hybrid Pine and Douglas Fir trees that grew considerably faster than the native forest stock. These factors allowed them to grow trees that would be ready for market in 25 years, about half the time of that required to grow native trees. The brothers' idea about regeneration, care for the environment, and hybridization defined the YTF business. Never would land be harvested faster than it could replenish itself, or in a manner that threatened habitats or watersheds. Eventually, Mogens and Jack passed on and their only surviving children, Marjorie, Mary Jane, Burton, and Betty inherited the property. Two of these heirs took a strong interest in further building the portfolio of Oregon properties, and also converted the holdings to an S-Corp. to allow for the distribution of ownership and earnings to their own children. Under their guidance, YTF was tremendously successful and garnered much community acclaim for its sustainable farming practices. Now, the four siblings are in their 70s and few of their children have expressed much interest in managing the extensive portfolio of timber holdings. Among those that have expressed an interest, some are very knowledgeable about forestry, while others have a track record of incompetence and self-promotion. At the same time, ownership is now spread among some 40 children, nieces, nephews, and grandchildren of the four siblings. Many of these individuals' only interest in YTF is the annual dividend check they receive. -(Refer to Case Scenario 2) What culture did Mogens and Jack nurture in YTF?

Faced with declining enrollment and increased competition from not-for-profit organizations offering inexpensive art courses for new hobbyists, the for-profit Delta Academy of Art has steadfastly stayed true to its mission of offering high-quality classical art instruction for both beginners and advanced artists at high tuition. Delta has been noted for the excellence of its artistic training for decades. This is an example of

Managerial actions that support development of an ethical organizational culture include all of the following EXCEPT

HP's new CEO who came from SAP (Chapter 12 Opening Case) is less likely to initiate strategic change because he is not familiar with the industry in which HP competes.

All of the following are external environmental sources that affect managerial discretion EXCEPT

Incremental changes to a firm's culture can be used to implement strategies effectively.

Criteria such as asset utilization improvements and changes in employee turnover rates are part of the internal business processes perspective of the balanced scorecard.

Case Scenario 3: Zachary, Wesley & Partners. Zachary, Wesley & Partners (ZW&P) is a leveraged buyout (LBO) firm that specializes in friendly buyouts of mid-sized U.S. retailing and manufacturing firms. ZW&P shuns turnarounds and hostile takeovers; its typical deals retain the existing management team and provide extensive funding for what is perceived to be an already sound strategy. It focuses on this type of firm because the partners have good contacts in retailing and manufacturing and they are typically able to avoid bidding wars when the LBO is negotiated. The firm has been immensely profitable over the years, in part due to the very extensive and selective due diligence process used to winnow down the list of prospective targets. Fewer than one out of one hundred candidates are even approached, and only a fraction of these passes further screens in the LBO negotiations. The resulting profitability has, in turn, given ZW&P a strong reputation in the financial community for successful deals, and among managers for being able to put together needed financing with good business plans. -(Refer to Case Scenario 3) ZW&P's core resources are its financial and technological resources.

The top management team at Ingenuity, Inc., has assigned a team of scientists to a multi-year project to investigate the viability of growing large amounts of fur from cloned cells of minks and foxes to produce no-kill fur products for coats and other clothing items. This idea would satisfy all the dimensions of the entrepreneurial orientation EXCEPT

Organizational controls provide