Multiple Choice Answers

1. Which element should be avoided when designing a reward-incentive system?
a. Incentives should extend to all employees, not just executives
b. Make the targets for incentives really challenging to achieve
c. Publicize the reward system at the beginning of the year
d. Administer the system with care and fairness
e. Payoffs should occur as soon after results have been achieved

2. Which of the following is not a reason for a poor vision statement?
a. Too broad and grandiose
b. Focuses on a corporate value
c. Describes the status quo
d. Describes an achievable future state
e. Describes a strategy

3. Operational planning includes appropriate training and reward and incentive systems.

4. Which of the following is not a criterion for a strategic-planning process:
a. Key company managers must understand it
b. The complexity of the process must be commensurate with the culture
c. The schedule of the process must fit with that of the participants
d. Participants must take it seriously and commit to it
e. Involve both top managers and key operational managers

5. Corporations are complex systems and self-regulating systems.

6. Which of the following is not a good reason to use the Criteria Matrix?
a. It helps decide the “winning” alternative
b. It provides grist for arguments to sell the “winning” alternative
c. It allows opportunities to explore different criteria and ratings
d. It enables negatively and positively correlated criteria to be used together
e. It can be used to support an alternative you have favored from the outset

7. Which is not a source of funds for a company to finance a bundle?
a. Cash on hand and from operations
b. Selling stock if a public company or getting an equity investment
c. Retained earnings
d. Adding new long-term debt
e. Selling fixed assets

8. Which of the following makes strategy execution easy?
a. Poor employee buy-in
b. Inadequate resource allocation
c. Lack of executive will
d. An adaptive culture
e. Poorly articulated operational plans
9. One cannot judge a strategy without knowing the objectives—and vice versa.

10. Which of the following has little chance of being improved?
a. People’s underlying attitudes
b. Corporate sales, which were down 15% last month
c. Manufacturing costs, up 23% last quarter
d. Salesmen’s “hit rate,” only 1 in 10 last quarter
e. The rate of quality defects, which rose to an all-time high of 18% last month