Allocating resources can be a political and an ad hoc activity in firms that do not use strategic management. Why is this true? Does adopting strategic management ensure easy resource allocation? Why?

Answer: Allocating resources can be ad hoc and political in the absence of strategic management Because no good substitute approach for making major decisions exists. Intuition, subjectivity, and emotions are not adequate for making resource allocation decisions that have strategic ramification for an entire organization. Strategic management does not assure easy resource allocation, but it generally results in more effective resource allocation. 2. Compare strategy formulation with strategy implementation in terms of each being an art or a science. Answer: The strategy-formulation process is more of a science, whereas strategy implementation is more of an art. Strategy implementation involves motivating employees. However, neither strategy formulation nor strategy implementation is a pure science or art because, for example, intuition and good subjective judgment are always essential in strategy formulation. 3. Describe the relationship between annual objectives and policies. Answer: Interrelationships among organizational objectives, strategies, and policies are revealed

in the strategic-management model. Note that long-term objectives and strategies are part of the strategy-formulation process, whereas annual objectives and policies are part of strategy implementation. Clear policies facilitate attainment of annual objectives.

4. Identify a long-term objective and two supporting annual objectives for a familiar organization. Answer: Answers to this question vary for each student. An example might be for a business

school: Schools withoutAACSB accreditation might seek it as a long-term objective with increased scholarly output and increased outcome measures (job placement or field test scores) as supporting annual objectives.

6. Explain the following statement: Horizontal consistency of goals is as important as vertical consistency. Answer: This is a true statement. Horizontal consistency of objectives is as important as vertical consistency.An example of horizontal consistency could be that ³there is no need for the marketing department to plan on doubling sales if the production department cannot produce the additional units.´ 7. Describe several reasons why conflict may occur during objective-setting activities. Answer: The objective-setting process can lead to conflict due to competition over scarce resources, different expectations among individuals, different perceptions

among individuals, miscommunication, time pressure, personality incompatibility, and line and staff misunderstandings.

8. In your opinion, what approaches to conflict resolution would be best for resolving a disagreement between a personnel manager and a sales manager over the firing of a particular salesperson? Why?

Answer: Various approaches for minimizing and resolving conflict can be classified in three ways:

avoidance, defusion, and confrontation. Depending on the situation, any of these three alternative approaches could justifiably be most effective in solving a dispute between a personnel manager and sales manager.

9. Describe the organizational culture of your college or university. Answer: Answers to this question will vary by college or university. Every institution has different rituals, values, stories, legends, heroes, ceremonies, and the like. 10. Explain why organizational structure is so important in strategy implementation. Answer: Organizational structure is important in strategy implementation because a firms design dictates how resources will be allocated and how objectives will be established. In a geographically structured organization, for

example, objectives are stated in geographic terms and resources are allocated by region. 11. In your opinion, how many separate divisions could an organization reasonably have without using an SBU-type organizational structure? Why? Answer: The answer to this question depends on the size and type of divisions, but, generally speaking, a firm that hat has six or more divisions could benefit from an SBU-type of organizational structure 12. Would you recommend a divisional structure by geographic area, product, customer, or process for a medium-sized bank in your local area? Why? Answer: A divisional structure by geographic area is appropriate for organizations whose Strategies need to fit the particular needs and characteristics of customers in different geographic areas. A divisional structure by product type design is effective when special emphasis needs to be placed on specific products or services, when an organization offers only a limited number of products or services, when the nature of an organization product differs substantially, or when different marketing approaches are required for the organization various products. When a few major customers are of paramount importance and many different services are provided to these customers, then a divisional structure by customer can be most effective. A divisional structure by process can be particularly effective when distinct production processes represent the thrust of

competitiveness in an industry. A divisional structure by geographic area is most commonly used by medium-sized banks. 13. What are the advantages and disadvantages of decentralizing the wage and salary function of an organization? How could this be accomplished? Answer: Decentralizing the wage and salary function of an organization could allow a firmsreward system to be more closely linked to strategic performance. It also could allow decisions on salary increases, promotions, merit pay, and bonuses to be more closely aligned to support the long-term strategic objectives of an organization. .

15. As production manager of a local newspaper, what problems would you anticipate in implementing a strategy to increase the average number of pages in the paper by 40 percent?

Answer: Problems that could be encountered include the need to obtain additional advertising to cover the cost of additional pages, as well as needing additional employees. A problem could arise in deciding whether to raise the price of the paper. There may need to be an increase in the market area coverage of the paper. 16. Do you believe expenditures for childcare or fitness facilities are warranted from a Cost/benefit perspective? Why or why not?

Answer: Reports suggest that yes, these expenditures are warranted. Managers and employees become more committed to the firm when child care and fitness facilities are provided, or at least when some resources are allocated to these areas. 17. Explain why successful strategy implementation often hinges on whether the strategy- formulation process empowers managers and employees

Answer: Managers and employees make or break a firm. More and more, firms are empowering managers and employees through involvement in the strategic-management process. Lack of involvement or ³empowering´ often results in a lack of commitment to see the firm do well. 18. Compare and contrast the culture in Mexico, and Japan. Answer: Mexican and Japanese cultures are very different.

Mexico always has been and still is an authoritarian society in terms of schools, churches, businesses, and families. Employers seek workers who are agreeable, respectful, and obedient, rather than innovative, creative, and independent. Mexican workers tend to be activity oriented rather than problem solvers. Mexican employers are paternalistic, providing workers with more than a paycheck, but in return, they expect allegiance. The Japanese place great importance on group loyalty and consensus, a concept calledwa. Nearly all corporate activities in Japan encourage wa among

managers and employees. Wa requires that all members of a group agree and cooperate; this results in constant discussion and compromise. Most Japanese managers are reserved, quiet, distant, introspective, and other oriented, whereas most U.S. managers are talkative, insensitive, impulsive, direct, and individual oriented.

19. Discuss the glass ceiling in the United States, giving your ideas and suggestions. Answer: The glass ceiling refers to the set of obstacles (which are primarily cultural) that prevent women from rising above a certain hierarchical level in the majority of organizations. Ask your students to comment on the causes for the glass ceiling and how the glass ceiling can be removed in the United States. 20. Discuss three ways the book discusses linking performance and pay to strategies. Answer: Some methods of linking performance to pay include profit sharing, gain sharing, and bonus systems. Profit sharing is widely used but can be a less than desirable criterion since individuals may not be clearly able to affect profits. Gain sharing requires employees or departments to establish performance targets. If actual results exceed objectives, all members get bonuses. In a bonus system, if an organization meets certain agreed-upon objectives, every member of the enterprise shares in the benefits. Criteria for bonus systems include sales, profit, production efficiency, quality and safety.