Behavioral controls are aspects of strategic change that involve finding the appropriate ______________ and ______________ among the culture, rewards, and boundaries of the firm.

43.

Behavioral controls are aspects of strategic change that involve finding the appropriate ______________ and ______________ among the culture, rewards, and boundaries of the firm.    A.  balance; alignment B.  measure; balance C.  alignment; balance D.  measure; outcome Strategic control is the process of monitoring and correcting the strategy and performance of a firm. Two central aspects of strategic control are informational control (the ability to respond effectively to environmental change) and behavioral control (the appropriate balance and alignment among the culture, rewards, and boundaries of a firm).

AACSB: Analytic Blooms: Understand Learning Objective: 09-01 The value of effective strategic control systems in strategy implementation. Level of Difficulty: 2 Medium Topic: Ensuring Informational Control: Responding Effectively to Environmental Change

44.

The traditional approach to strategic control is sequential. Which of the following is not one of the steps in the sequence?    A.  Action plans are submitted by lower level managers. B.  Performance is measured against the predetermined goal. C.  Strategies are implemented. D.  Strategies are formulated and top management sets goals. The traditional approach to strategic control is sequential: (1) strategies are formulated and top management sets goals, (2) strategies are implemented, and (3) performance is measured against the predetermined goal set.

AACSB: Analytic Blooms: Remember Learning Objective: 09-02 The key difference between "traditional" and "contemporary" control systems. Level of Difficulty: 1 Easy Topic: Ensuring Informational Control: Responding Effectively to Environmental Change

45.

Which of the following is the primary drawback of traditional strategic control systems?    A.  They are only appropriate when the environment is stable and simple. B.  Goals and objectives cannot be measured with a high level of certainty. C.  They lead to complacency. D.  They lack the flexibility needed to adjust to changes in the environment. Some question the value of rigid planning and goal-setting processes. Fixed strategic goals also become dysfunctional for firms competing in highly unpredictable competitive environments. Strategies need to change frequently and opportunistically. An inflexible commitment to predetermined goals and milestones can prevent the very adaptability that is required of a good strategy.

AACSB: Analytic Blooms: Understand Learning Objective: 09-02 The key difference between "traditional" and "contemporary" control systems. Level of Difficulty: 2 Medium Topic: Ensuring Informational Control: Responding Effectively to Environmental Change

46.

For businesses facing complex and turbulent business environments, which of the following is true?    A.  Goals and objectives that are uncertain prevent opportunism. B.  Traditional strategic controls are usually inappropriate. C.  Complacency about predetermined milestones can prevent adaptability. D.  Detailed plans are needed to maintain order. Traditional control systems are most appropriate when the environment is stable and relatively simple, goals and objectives can be measured with a high level of certainty, and there is little need for complex measures of performance.

AACSB: Analytic Blooms: Understand Learning Objective: 09-02 The key difference between "traditional" and "contemporary" control systems. Level of Difficulty: 2 Medium Topic: Ensuring Informational Control: Responding Effectively to Environmental Change

47.

Contemporary approaches to strategic control rely primarily on _____________.    A.  feedback controls B.  single-loop learning C.  double-loop learning D.  comparative learning In the contemporary approach, information control is part of an ongoing process of organizational learning that continuously updates and challenges the assumptions that underlie the strategy of the organization. In such double-loop learning, the assumptions, premises, goals, and strategies of the organization are continuously monitored, tested, and reviewed.

AACSB: Analytic Blooms: Understand Learning Objective: 09-03 The imperative for "contemporary" control systems in today's complex and rapidly changing competitive and general environments. Level of Difficulty: 2 Medium Topic: Ensuring Informational Control: Responding Effectively to Environmental Change

48.

Informational control systems are concerned with which of the following?    A.  Is the organization doing things right? B.  Is the organization doing the right things? C.  Are rules and regulations being followed as information is processed? D.  Is the environment of the organization a necessary and sufficient condition for success? In the contemporary approach, there are two different types of strategic control: informational control and behavioral control. Informational control is primarily concerned with whether or not the organization is doing the right things.

AACSB: Analytic Blooms: Remember Learning Objective: 09-03 The imperative for "contemporary" control systems in today's complex and rapidly changing competitive and general environments. Level of Difficulty: 1 Easy Topic: Ensuring Informational Control: Responding Effectively to Environmental Change

49.

Continuous monitoring, in the contemporary approach, is beneficial because _____________.    A.  it reduces time lags B.  it increases the time it takes to detect changes in the competitive environment C.  organizational flexibility is reduced D.  organization response time is increased In the contemporary approach, information control is part of an ongoing process of organizational learning that continuously updates and challenges the assumptions that underlie the strategy of the organization. The benefits of continuous monitoring include: time lags are dramatically shortened; changes in the competitive environment are detected earlier; and the ability of the organization to respond with speed and flexibility is enhanced.

AACSB: Analytic Blooms: Understand Learning Objective: 09-03 The imperative for "contemporary" control systems in today's complex and rapidly changing competitive and general environments. Level of Difficulty: 2 Medium Topic: Ensuring Informational Control: Responding Effectively to Environmental Change

50.

Which of the following is NOT one of the characteristics of a contemporary control system?    A.  It is a key catalyst for an ongoing debate about underlying data, assumptions, and action plans. B.  It must focus on constantly changing information that is strategically important. C.  It circumvents the need for face-to-face meetings among superiors, subordinates, and peers. D.  It generates information that is important enough to demand regular and frequent attention. Contemporary control systems must have four characteristics to be effective: focus on constantly changing information that has potential strategic importance; the information is important enough to demand frequent and regular attention from all levels of the organization; the data and information generated are best interpreted and discussed in face to face meetings; and the control system is a key catalyst for an ongoing debate about underlying data, assumptions, and action plans.

AACSB: Analytic Blooms: Understand Learning Objective: 09-03 The imperative for "contemporary" control systems in today's complex and rapidly changing competitive and general environments. Level of Difficulty: 2 Medium Topic: Ensuring Informational Control: Responding Effectively to Environmental Change

51.

Top managers at ABC Company meet every Friday to review daily operational reports and year to date data. This is an example of _____________.    A.  behavioral control B.  informational control C.  strategy formulation D.  strategy implementation In the contemporary approach, information control is part of an ongoing process of organizational learning and must have several characteristics, including that the information is important enough to demand frequent and regular attention from all levels of the organization, and the data and information generated are best interpreted and discussed in face-to-face meetings.

AACSB: Analytic Blooms: Understand Learning Objective: 09-03 The imperative for "contemporary" control systems in today's complex and rapidly changing competitive and general environments. Level of Difficulty: 2 Medium Topic: Ensuring Informational Control: Responding Effectively to Environmental Change

52.

As firms simultaneously downsize and face the need for increased coordination across organizational boundaries, a control system based primarily on ______________ is dysfunctional.    A.  boundaries and constraints B.  culture and rewards C.  organizational loyalty D.  innovation and risk taking As firms simultaneously downsize and face the need for increased coordination across organizational boundaries, a control system based primarily on rigid strategies, rules, and regulations is dysfunctional. In this context, rules that specify behaviors that are acceptable and unacceptable are known as boundaries and constraints.

AACSB: Analytic Blooms: Understand Learning Objective: 09-04 The benefits of having the proper balance among the three levers of behavioral control: culture; rewards and incentives; and boundaries. Level of Difficulty: 2 Medium Topic: Attaining Behavioral Control: Balancing Culture, Rewards, and Boundaries

53.

Which of the following is not an example of how organizational culture exerts behavioral control?    A.  Culture helps maintain control by creating behavioral norms. B.  Culture generates unwritten standards of acceptable behavior. C.  Culture encourages individual identification with the organization and its objectives. D.  Culture sets explicit boundaries. Organizational culture is a system of shared values (what is important) and beliefs (how things work) that shape the people of a company, organizational structures, and control systems to produce behavioral norms (the way we do things around here). Culture sets implicit boundaries, unwritten standards of behavior, in dress, ethical matters, and the way an organization conducts its business. By creating a framework of shared values, culture encourages individual identification with the organization and its objectives.

AACSB: Analytic Blooms: Understand Learning Objective: 09-04 The benefits of having the proper balance among the three levers of behavioral control: culture; rewards and incentives; and boundaries. Level of Difficulty: 2 Medium Topic: Attaining Behavioral Control: Balancing Culture, Rewards, and Boundaries

54.

The late Sam Walton, founder of Walmart, used to give pep rallies at local Walmart stores. What purpose did this serve?    A.  It was used to remind employees of Walmart rules and regulations. B.  It helped reinforce and sustain the Walmart culture. C.  It demonstrated to employees the importance of articulating explicit goals and objectives. D.  It made the Walmart reward system very explicit. Rallies or pep talks by top executives also serve to reinforce the culture of a firm. The late Sam Walton was known for his pep rallies at local Walmart stores.

AACSB: Analytic Blooms: Understand Learning Objective: 09-04 The benefits of having the proper balance among the three levers of behavioral control: culture; rewards and incentives; and boundaries. Level of Difficulty: 2 Medium Topic: Attaining Behavioral Control: Balancing Culture, Rewards, and Boundaries

55.

Which of the following is NOT one of the characteristics of reward and incentive systems?    A.  They represent a poor means of influencing the culture of an organization. B.  They focus efforts on high priority tasks. C.  They motivate high levels of individual and collective task performance. D.  They represent an effective control mechanism. Reward and incentive systems represent a powerful means of influencing the culture of an organization, focusing efforts on high priority tasks, and motivating individual and collective task performance. Just as culture deals with influencing beliefs, behaviors, and attitudes of people within an organization, the reward system is an effective motivator and control mechanism by specifying who gets rewarded and why.

AACSB: Analytic Blooms: Understand Learning Objective: 09-04 The benefits of having the proper balance among the three levers of behavioral control: culture; rewards and incentives; and boundaries. Level of Difficulty: 2 Medium Topic: Attaining Behavioral Control: Balancing Culture, Rewards, and Boundaries

56.

Individual rationality ______________ organizational rationality.    A.  is a good indicator of B.  will ensure C.  is often the opposite of D.  does not always guarantee Generally speaking, people in organizations act rationally, each motivated by their personal best interest. However, the collective sum of individual behaviors of the employees of the organization does not always result in what is best for the organization; individual rationality is no guarantee of organizational rationality.

AACSB: Analytic Blooms: Understand Learning Objective: 09-04 The benefits of having the proper balance among the three levers of behavioral control: culture; rewards and incentives; and boundaries. Level of Difficulty: 2 Medium Topic: Attaining Behavioral Control: Balancing Culture, Rewards, and Boundaries

57.

When subcultures emerge that have shared values opposite from the dominant culture of an organization _____________.    A.  organizational cohesiveness increases B.  information is shared rather than hoarded C.  individuals begin working at cross purposes D.  individuals gain insights into overarching goals and objectives Subcultures within organizations may reflect differences among functional areas, products, services, and divisions. To the extent that reward systems reinforce such behavioral norms, attitudes, and belief systems, cohesiveness is reduced; important information is hoarded rather than shared, individuals begin working at cross-purposes, and they lose sight of overall goals.

AACSB: Analytic Blooms: Understand Learning Objective: 09-04 The benefits of having the proper balance among the three levers of behavioral control: culture; rewards and incentives; and boundaries. Level of Difficulty: 2 Medium Topic: Attaining Behavioral Control: Balancing Culture, Rewards, and Boundaries

58.

Which of the following is not a characteristic of effective reward and incentive systems?    A.  Performance measures are clear and highly visible. B.  The structure is fixed to assure employees of consistency. C.  The compensation system is perceived as fair and equitable. D.  Objectives are well understood, and broadly accepted. Effective reward and incentive systems share a number of common characteristics. Among these are: objectives are clear, well understood, and broadly accepted; performance measures are clear and highly visible; the compensation system is perceived as fair and equitable; and the structure is flexible. It can adapt to changing circumstances.

AACSB: Analytic Blooms: Understand Learning Objective: 09-04 The benefits of having the proper balance among the three levers of behavioral control: culture; rewards and incentives; and boundaries. Level of Difficulty: 2 Medium Topic: Attaining Behavioral Control: Balancing Culture, Rewards, and Boundaries

59.

Lack of a clear understanding of organizational goals and objectives is a probable cause of _____________.    A.  productive behavior B.  counterproductive motivation C.  counterproductive behavior D.  motivated self-interest Counterproductive behavior can arise because of motivated self-interest, lack of a clear understanding of goals and objectives, or outright malfeasance.

AACSB: Analytic Blooms: Understand Learning Objective: 09-04 The benefits of having the proper balance among the three levers of behavioral control: culture; rewards and incentives; and boundaries. Level of Difficulty: 2 Medium Topic: Attaining Behavioral Control: Balancing Culture, Rewards, and Boundaries

60.

Effective boundaries and constraints _____________.    A.  tend to inhibit efficiency and effectiveness B.  distract employees who are trying to focus on organizational priorities C.  minimize improper and unethical conduct D.  tend to limit organizational growth Boundaries and constraints can serve many useful purposes for organizations, including focusing individual efforts on strategic priorities, providing short-term objectives and action plans to channel efforts, improving efficiency and effectiveness, and minimizing improper and unethical conduct.

AACSB: Analytic Blooms: Understand Learning Objective: 09-04 The benefits of having the proper balance among the three levers of behavioral control: culture; rewards and incentives; and boundaries. Level of Difficulty: 2 Medium Topic: Attaining Behavioral Control: Balancing Culture, Rewards, and Boundaries