Human Resource Management: An Asian Perspective (Second Edition)

Chapter 3: Strategic HRM and the HR Scorecard Multiple Choice 1. a. b. c. d. e. 2. a. b. c. d. e. 3. a. b. c. d. e. 4. a. b. c. d. e. 5. a. b. c. d. e. A _____ is the companys plan for how it will match its internal strengths and weaknesses with external opportunities and threats to maintain a competitive advantage. strategic plan situation analysis environmental scan SWOT analysis tactical plan (a; easy) Which of the following is not part of strategic planning? evaluating the firms internal and external situation defining the business and developing a mission translating the mission into strategic goals crafting a course of action implementing strategies (e; moderate) The purpose of a strategic plan it to identify ways to create or maintain a(n) _____. differential advantage competitive advantage instrumental advantage success factor all of the above (b; moderate) What is the first step in the strategic management process? perform external and internal audits define the business and its mission translate the mission into strategic goals formulate a strategy implement the strategy (b; easy) A _____ is a general statement of intended direction that evokes emotional feelings in organization members. mission strategic plan code of ethics vision none of the above (d; easy)

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Human Resource Management: An Asian Perspective (Second Edition)

6. a. b. c. d. e. 7. a. b. c. d. e. 8. a. b. c. d. e. 9. a. b. c. d. e. 10. a. b. c. d. e.

Vision statements focus on the _____. past present future all of the above none of the above (c; easy) A _____ lays out what a business strives to be while the _____ lays out what it should be now. mission; vision vision; mission dream; vision goal; accomplishment CEO; CFO (b; easy) Defining the business and its mission is the _____ step in the strategic management process. first second third fourth fifth (a; moderate) Performing external and internal audits is the _____ step in the strategic management process. first second third fourth fifth (b; moderate) The third step in the strategic management process is _____. perform external and internal audits define the business and its mission translate the mission into strategic goals formulate a strategy implement the strategy (c; easy)

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Chapter 3: Strategic HRM and the HR Scorecard

11.

a. b. c. d. e. 12.

The sales director at WebMD is developing goals regarding sales revenue targets and the number of new medical-related content providers like hospitals and HMOs it must sign up per year. Which step of the strategic management process is WebMD working on? perform external and internal audits define the business and its mission translate the mission into strategic goals formulate a strategy implement the strategy (c; moderate) Several years ago, General Motors began a company-wide strategy to improve product quality and customer satisfaction. Reports showed that GMs product recalls for the first half of that year were higher than for the entire previous year. GM explained that the figures supported the corporate commitment to quality and satisfaction. Which step of the strategic management process was GM dealing with? perform external and internal audits define the business and its mission translate the mission into strategic goals formulate a strategy evaluate performance (e; moderate) A _____ serves to communicate who a company is, what it does, and where it is headed. mission strategic plan code of ethics vision none of the above (a; easy) The _____ of a national energy ministry is to improve energy systems that support the economy. mission strategic plan code of ethics vision none of the above (a; moderate) The _____ of a national energy ministry is for the country to have affordable, reliable and safe energy supply. mission strategic plan vision code of ethics none of the above (c; moderate)

a. b. c. d. e. 13. a. b. c. d. e. 14. a. b. c. d. e. 15. a. b. c. d. e.

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Human Resource Management: An Asian Perspective (Second Edition)

16. a. b. c. d. e. 17. a. b. c. d. e. 18. a. b. c. d. e. 19. a. b. c. d. e. 20. a. b. c. d. e. 21. a. b. c. d. e.

The primary tool used in step two of strategic planning, external and internal audits, is the _____. 2 x 2 matrix 3 x 3 matrix SWOT analysis break-even analysis none of the above (c; moderate) SWOT is an acronym for _____. success will overcome threats strengths, weaknesses, opportunities, and threats strategic worldwide opportunities terms system-wide organizational tactics none of the above (b; easy) A strategy can also be called a _____. plan goal course of action tactic mission (c; moderate) A _____ answers the question, how do we get from here to there? goal tactic strategy mission vision (c; easy) Translating strategy into action is the essence of the _____ step in the strategic management process. perform external and internal audits define the business and its mission translate the mission into strategic goals formulate a strategy to achieve strategic goals implement the strategy (e; moderate) A companys _____ strategy identifies the portfolio of businesses that comprise the company and ways in which these businesses relate to each other. functional business-level corporate-level vertical integration competitive (c; moderate)

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Chapter 3: Strategic HRM and the HR Scorecard

22. a. b. c. d. e. 23. b. d. e. 24. a. b. c. d. e. 25. b. d. e. 26. a. b. c. d. e.

_____ is the process of assessing progress toward strategic goals and taking corrective action as needed. Strategic management Strategic planning Consolidation Strategic control Diversification (d; moderate) What does a companys corporate-level strategy identify? a. how to build and strengthen the businesss long-term competitive position in the marketplace the portfolio of businesses that comprise the company c. the basic courses of action that each department will pursue in order to help the business attain its competitive goals the possibility of becoming a low-cost leader the sources of uniqueness in the industry (b; moderate) A companys _____ strategy identifies the how to build and strengthen the businesss long-term competitive position in the marketplace. functional business-level corporate-level vertical integration competitive (b; moderate) What does a companys business-level strategy identify? a. how to build and strengthen the businesss long-term competitive position in the marketplace the portfolio of businesses that comprise the company c. the basic courses of action that each department will pursue in order to help the business attain its competitive goals the possibility of becoming a low-cost leader the sources of uniqueness in the industry (a; moderate) A companys _____ strategy identifies the basic courses of action that each department will pursue in order to help the business attain its competitive goals. functional business-level corporate-level vertical integration competitive (a; moderate)

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Human Resource Management: An Asian Perspective (Second Edition)

27. b. d. e. 28. a. b. c. d. e.

What does a companys functional-level strategy identify? a. how to build and strengthen the businesss long-term competitive position in the marketplace the portfolio of businesses that comprise the company c. the basic courses of action that each department will pursue in order to help the business attain its competitive goals the possibility of becoming a low-cost leader the sources of uniqueness in the industry (c; moderate) A _____ strategy implies that the firm will expand by adding new product lines. consolidation diversification geographic expansion integration competitive (b; moderate) Hotel International may acquire a furniture-making business. What type of strategy is the hotel using? consolidation diversification geographic expansion integration competitive (b; moderate) 30. A _____ means the firm is expanding by producing its own materials or acquiring a retail outlet to sell its own products. consolidation diversification geographic expansion vertical integration competitive (d; moderate) 29.

f. g. h. i. j.

a. b. c. d. e. 31. a. b. c. d. e.

A few years ago, FedEx acquired Kinkos. FedEx stations had long existed in Kinkos stores to provide customers a convenient location. The acquisition illustrated that FedEx was following a _____ strategy. vertical integration diversification geographic expansion horizontal integration competitive (a; moderate)

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Chapter 3: Strategic HRM and the HR Scorecard

32. a. b. c. d. e. 33. a. b. c. d. e. 34.

SuperMart is closing many of its retail stores to reduce its company size. This is an example of a _____ strategy. consolidation diversification geographic expansion integration competitive (a; moderate) Tasty Noodle plans to open stores in more Asian cities during the two years. This is an example of _____. consolidation diversification geographic expansion integration competitive (c; moderate) Wal-Mart is well known for lowest prices. Offering the lowest prices is its _____. functional strategy competitive advantage distinctive competence corporate strategy all of the above (b; moderate) A(n) _____ is anything that allows an organization to differentiate its products or service from those of its competitors to increase market share. functional strategy competitive advantage distinctive competence corporate strategy all of the above (b; moderate) Companies like Ferrari can be called _____ because they carve out a market niche and compete by providing a product that customers can get in no other way. market leaders focusers carvers unique offerings complementary competitors (b; easy)

a. b. c. d. e. 35. a. b. c. d. e. 36. a. b. c. d. e.

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Human Resource Management: An Asian Perspective (Second Edition)

37. a. b. c. d. e. 38. a. b. c. d. e. 39. a. b. c. e. 40. a. b. c. e. 41. a. b. c.

Volvo stresses the safety of its cars. Volvo is following a _____ competitive strategy. cost leadership focus differentiation functional integration (c; moderate) Which of the following is a type of competitive strategy? cost leadership vertical integration consolidation horizontal integration expansion (a; moderate) Which of the following illustrates a focus strategy? Good-Mart offers the lowest prices Best-Mart sells upscale brands Mercedes Benz emphasizes status and quality d. Comfy Rent-a-Car targets referrals through car dealerships and insurance agents Sofy toilet paper claims to be the softest on the market (d; difficult) Which of the following illustrates a cost leadership strategy? Good-Mart offers the lowest prices Best-Mart sells upscale brands Mercedes Benz emphasizes status and quality d. Comfy Rent-a-Car targets referrals through car dealerships and insurance agents Sofy toilet paper claims to be the softest on the market (a; moderate) Which of the following illustrates a differentiation strategy? Good-Mart offers the lowest prices Big-Saving Mart promotes itself as a way to save Mercedes Benz emphasizes status and quality d. Comfy Rent-a-Car targets referrals through car dealerships and insurance agents e. Cut-Price Mart promises to cut shoppers grocery bills (c; difficult)

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Chapter 3: Strategic HRM and the HR Scorecard

42. a. b. c. d. e. 43.

Michael Porter emphasizes that all a firms activities should be tailored to its strategy by ensuring that a firms functional strategies support its corporate and competitive strategies. This is called _____. match leverage fit stretch height (c; moderate) Econ Airlines pursues a low-cost leader strategy and then tailors its activities to that strategy. For instance, it has quick turnarounds at the gate which results in more flying time for each plane and more departures with fewer planes. Econ Airlines is an example of the _____ point of view. match leverage fit stretch height (c; moderate) Leveraging resources by supplementing what a company has and doing more with what it has to take advantage of an opportunity means that the company has a _____ point of view. match leverage fit stretch height (d; moderate) Which of the following basic strategic planning roles is fulfilled by HR managers? perform external and internal audits execute strategy translate the mission into strategic goals formulate strategy both b and d (e; moderate) A companys basic _____ is made up of HR professionals, the HR system, and the resulting employee behaviors. HR architecture structure strategy HR function none of the above (a; easy)

a. b. c. d. e. 44. a. b. c. d. e. 45. a. b. c. d. e. 46. a. b. c. d. e.

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Human Resource Management: An Asian Perspective (Second Edition)

47. a. b. c. d. e. 48. a. b. c. d. e. 49. a. b. c. d. e. 50.

Human resource policies and practices are part of the ______. HR function HR system HR architecture employee culture company norms (b; difficult) Which of the following is not an organizational practice included in HighPerformance Work Systems? job enrichment job enlargement employee development flexible work assignments team-based organizations (b; difficult) Managers use a(n) _____ to measure the HR functions effectiveness and efficiency in producing employee behaviors the company needs to achieve its strategic goals. metric HR Scorecard time high performance work system MBO format (b; easy) The concise measurement system used by companies to show the quantitative standards the firm uses to measure HR activities, employee behaviors resulting from the activities, and the strategically relevant organizational outcomes of those employee behaviors is called a(n) _____. evaluation system HR scorecard appraisal system evaluation benchmark annual report (b; moderate) What is the second step in using the HR Scorecard approach? outline the companys value chain identify the strategically-required organizational outcomes define the business strategy design the HR scorecard measurement system evaluate the measurement system (a; moderate) s

a. b. c. d. e. 51. a. b. c. d. e. 52.

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Chapter 3: Strategic HRM and the HR Scorecard

What is the first step in using the HR Scorecard approach? a. outline the companys value chain b. identify the strategically-required organizational outcomes c. define the business strategy d. design the HR scorecard measurement system e. evaluate the measurement system (c; moderate) 53. a. b. c. d. e. 54. a. b. c. d. e. 55. a. b. c. d. e. 56. a. b. c. d. e. 57. a. b. c. d. e. What is the final step in using the HR Scorecard approach? outline the companys value chain identify the strategically-required organizational outcomes define the business strategy design the HR scorecard measurement system evaluate the measurement system (e; moderate) Identify the Strategically Required Organizational Outcomes is the _____ step in using the HR Scorecard approach. first second third fourth fifth (c; moderate) Outline the companys value chain is the _____ step in using the HR Scorecard approach. first second third fourth fifth (b; moderate) Define the business strategy is the _____ step in using the HR Scorecard approach. first second third fourth fifth (a; moderate) Identifying the Required Workforce Competencies and Behaviors is the _____ step in using the HR Scorecard approach. second third fourth fifth sixth (c; moderate) 40

Human Resource Management: An Asian Perspective (Second Edition)

58. a. b. c. d. e. 59. a. b. c. d. e. 60. a. b. c. d. e. 61. a. b. c. d. e. 62. a. b. c. d. e.

Identifying the strategically relevant HR system policies and activities is the _____ step in using the HR Scorecard approach. second third fourth fifth sixth (d; moderate) During which step of the HR Scorecard approach are the HR enablers and deliverables identified? second third fourth fifth sixth (d; moderate) During which step of the HR Scorecard approach are the proper metrics decided upon? second third fourth fifth sixth (e; moderate) Which stage of the HR Scorecard approach is repeated periodically to ensure validity of the measures? outline the companys value chain identify the strategically-required organizational outcomes define the business strategy design the HR scorecard measurement system evaluate the measurement system (e; moderate) A companys _____ identifies the primary activities that create value for customers and the related support activities. value chain HR scorecard strategy tactical approach none of the above (a; easy)

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Chapter 3: Strategic HRM and the HR Scorecard

63. a. b. c. d. e. 64. a. b. c. d. e. 65. a. b.

HR system activities that help produce valuable workforce competencies and behaviors are called _____. performance drivers HR deliverables HR competencies strategic outcomes both a and b (e; moderate) Which of the following is not a type of measure used to assess HR performance drivers such as employee motivation and morale? employee attitude surveys employee turnover number of qualified applicants per position employee commitment survey scores customer complaints (c; difficult) Which of the following is a type of measure for assessing HR performance drivers like employee motivation? proportion of merit pay determined by formal performance appraisal percentage of employees eligible for annual merit plan c. percentage of difference in incentive pay between the low performing and high performing employees d. percentage of retention of high performing employees e. percentage of jobs filled from within (d; difficult) Which of the following is not a type of measure for assessing HR enablers such as testing, training, and reward policies? proportion of merit pay determined by formal performance appraisal percentage of employees eligible for annual merit plan c. percentage of difference in incentive pay between the low performing and high performing employees d. employee attitude surveys e. percentage of jobs filled from within (d; difficult) Which of the following is a type of measure for assessing HR enablers? level of cross-cultural teamwork level of organizational learning requests for transfer customer complaints number of hours of training employees receive each year (e; moderate)

66. a. b.

67. a. b. c. d. e.

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Human Resource Management: An Asian Perspective (Second Edition)

68. a. b. c. d. e. 69. a. b. c. d. e. 70. a. b. c. d. e.

HR enablers consist of all of the following except _____. selection policies practices employee capabilities reward policies training policies (c; moderate) HR performance drivers include all of the following except _____. employee morale reward policies employee commitment employee values employee motivation (b; moderate) The _____ scorecard is to the company what the HR scorecard is to the HR function. corporate business-level competitive balanced functional (d; moderate) True/ False

71. 72. 73. 74. 75. 76. 77. 78. 79.

There are six steps in the strategic management process. (T; easy) HR managers need to support corporate productivity and performance improvement efforts. (T; moderate) Employees play a minimal role in the performance improvement efforts of their employers. (F; easy) HR is only involved in the execution of a companys strategic plan. (F; moderate) A mission statement is a general statement of a companys intended direction that evokes emotional feelings in the organizations members. (F; easy) A vision statement is broader and more future-oriented than a mission statement. (T; easy) Mission statements tend to focus on past successes. (F; easy) Strategy implementation draws more on the leading management function than on the functions of planning, organizing, staffing, and controlling. (F; difficult) Consolidation keeps the companys strategy up to date by assessing progress toward strategic goals and taking corrective action as needed. (F; moderate) 43

Chapter 3: Strategic HRM and the HR Scorecard

80. 81. 82. 83. 84. 85. 86. 87. 88. 89.

Managers engage in three levels of strategic planning. (T; moderate) Cost leadership, differentiation, and focus strategies all types of corporatelevel strategy. (F; moderate) A vertical integration strategy means that the firm will expand by adding new product lines. (F; easy) McDonalds addressed its lagging profitability by first closing stores operating below its guidelines. McDonalds used a consolidation strategy. (T; moderate) Pizza Huts strategy for competing against Dominos is a business-level strategy. (T; moderate) FedExs acquisition of Kinkos is a corporate-level strategic move. (T; moderate) Dells strategy of developing an HR portal on the company website to support its low-cost competitive strategy is an example of an integration strategy. (F; difficult) The concept of stretch states that a firms activities must be tailored to its strategy. (F; easy) Leveraging resources is a necessary action for companies stretching to take advantage of an opportunity. (T; moderate) Strategic human resource management means formulating and executing HR systems that produce the employee competencies and behaviors the company needs to achieve its strategic aims. (T; moderate) A companys HR strategy is a type of competitive strategy. (F; difficult) Many executives see HR as a cost center. (T; easy) HR managers fulfill the first two steps of the strategic management process. (F; moderate) The basic HR architecture includes three components: the HR system, HR professionals, and the resulting employee behaviors. (T; moderate) HR managers use the HR Scorecard to measure the success of the value chain throughout an organization. (F; moderate) The HR Scorecard measures the HR functions effectiveness and efficiency in producing desirable employee behaviors. (T; easy) A companys specific strategy is irrelevant to the HR Scorecard because human resources always strive for productive employee behaviors. (F; moderate)

90. 91. 92. 93. 94. 95. 96.

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Human Resource Management: An Asian Perspective (Second Edition)

97.

To create an HR Scorecard, the manager should understand the causal links between the HR activities, the employee behaviors, the organizational outcomes, and the organizations performance. (T; moderate) The balanced scorecard does for the company as a whole what the HR scorecard does for the HR function. (T; easy) The balanced scorecard is an accounting tool based on a computerized model. (F; moderate) In a service business, the product is satisfied guests. (T; moderate) Essay/ Short Answer

98. 99. 100.

101.

What are the three basic challenges HR managers must address in formulating HR strategies? Which of these is the most difficult for HR? (moderate) Answer: The three challenges are the need to support corporate productivity and performance improvement efforts, to encourage employees to plan an expanded role in employers performance improvement efforts, and to be more involved in the design and execution of the companys strategic plan. The final challenge is key as HR has traditionally been involved more in the execution rather than the design of strategic plans.

102.

What is strategic management? Define the term. List and describe the six steps in the strategic management process. (moderate) Answer: Strategic management is the process of identifying and executing the organizations mission, by matching the organizations capabilities with the demands of its environment. The steps are as follows: Step 1: Define the Business and Its Mission Step 2: Perform External and Internal Audits Step 3: Translate the Mission into Strategic Goals Step 4: Formulate a Strategy to Achieve the Strategic Goals Step 5: Implement the Strategy Step 6: Evaluate Performance

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Chapter 3: Strategic HRM and the HR Scorecard

103.

Explain the difference between a vision and a mission. Are both necessary for organizations? (moderate) Answer: A companys vision is a general statement of the companys intended direction that evokes emotional feelings in organization members. It is broader than a mission statement. It is future-oriented while mission statements are oriented in the present. Mission statements state what a company is doing right now while vision statements are what a company strives to become. Both are encouraged for organizations but some organizations have only a mission statement. Others may have neither a mission nor a vision.

104.

During the strategic management process, managers may use a SWOT analysis. Explain how to use a SWOT analysis and provide an example using a wellknown company. (moderate) Answer: The SWOT analysis is used during the second step of the strategic management process. It facilitates the audit of external and internal situations. SWOT stands for strengths, weaknesses, opportunities, and threats. Managers can create a chart listing the strengths of the company, the weaknesses, and opportunities in the environment and threats in the environment. The chart makes it easy to see where strengths can lead to opportunities or how weaknesses may need to be solved to avoid threats. Students should provide an example with this answer.

105.

Explain the three levels of strategic planning. What is the purpose or focus for each level? Which level do HR strategies represent? (easy) Answer: The three levels are corporate-level, business-level, and functionallevel strategies. Corporate-level strategy identifies the portfolio of businesses that comprise the company and the ways in which these businesses relate to each other. The business-level strategy is the next level. It identifies how to build and strengthen the businesss long-term competitive position in the marketplace. The lowest level is the functional-level strategies. Functional strategies identify the basic course of action that each department will pursue in order to help the business attain its competitive goals. HR strategies are a type of functional strategy.

106.

There are three primary forms of business-level or competitive strategies. Describe them and give an example of each one. (moderate) Answer: The three forms of competitive strategies are cost leadership, differentiation, and focus. Cost leadership means offering the lowest prices and/or emphasizing low costs and efficiency as a source of competitive advantage. Wal-Mart is an example of a company pursuing a cost leadership strategy. Differentiation means emphasizing a source of difference between a company and its competitors. The differential advantage becomes the source of competitive advantage. Target follows a differentiation strategy. A focus strategy means that a company pursues a small niche in the market place. Ferrari follows this strategy. 46

Human Resource Management: An Asian Perspective (Second Edition)

107.

Some strategic planning experts emphasize fit while others support the use of stretch. Explain these two opposing concepts. Which do you think is best? (difficult) Answer: The fit point of view means that all of a firms activities must be tailored to fit its strategy. This ensures that a firms functional strategies support its corporate and competitive strategies. Southwest Airlines is an example of a firm using the fit approach. On the other hand, stretch means leveraging resources to take advantage of opportunities. Stretch is the riskier of the two approaches. Fit is necessary overall to ensure success but stretch allows a firm to grow and better compete in the market place. Ultimately, firms should strive to incorporate fit while considering stretch to take advantage of opportunities.

108.

Describe the components of a companys basis HR architecture. (easy) Answer: A companys basic HR architecture is made up of three elements: HR professionals, the HR system, and the employee behaviors and competencies required for the companys strategy. The HR professionals have the necessary skills to build a strategy-oriented HR system. The HR system is made up of the HR policies and activities such as how the company recruits, selects, trains, and rewards employees.

109.

What is a High-Performance Work System? Explain the effects of such a system. (moderate) Answer: A high-performance work system is what managers now expect from the HR system. It means that the HR system is designed to maximize the overall quality of human capital throughout the organization. Based on ongoing research, firms that use HPWS practices perform at a significantly higher level than those that do not.

110.

What is the HR Scorecard approach? Identify the seven steps in using the HR Scorecard approach to create a strategy-oriented HR system. (moderate) Answer: The HR Scorecard is a concise measurement system that shows the quantitative standards, or metrics the firm uses to measure HR activities, and to measure the employee behaviors resulting from these activities, and to measure the strategically relevant organizational outcomes of those employee behaviors. The seven steps are as follows: Step 1: Define the business strategy Step 2: Outline the companys value chain Step 3: Identify the strategically required organizational outcomes Step 4: Identify the required workforce competencies and behaviors Step 5: Identify the strategically relevant HR system policies and activities Step 6: Design the HR Scorecard measurement system Step 7: Periodically evaluate the measurement system

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