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Strategic Management

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Apply Your Knowledge

This chapter focuses on issues relating to compensation and benefits. Complete the following review questions and exam questions as a way of reviewing and reinforcing the knowledge and skills you’ll need to perform your responsibilities as an HR professional, and to increase the likelihood that you will pass the PHR examination.

Review Questions

  1. Describe the managerial function "planning."
  2. Describe what is meant by the "mission" of an organization.
  3. What is a code of ethics, and why is it important to an organization?
  4. Describe the "introduction" phase of the organizational life cycle.
  5. Describe the controlling processes of project management.

Exam Questions

  1. Which of the following is not a category of processes within project management?
    1. Planning
    2. Executing
    3. Coordinating
    4. Controlling
  2. Which of the following statements about change is most true?
    1. HR professionals must proactively seek to understand change and what causes change.
    2. HR must serve as an employee advocate during times of change.
    3. HR must ensure that the pace of change does not exceed the organization's ability to adapt to it.
    4. HR must serve as a management advocate during times of change.
  3. Which of the following statements about values is not true?
    1. Values are often expressed through terms such as "communication" and "decision making."
    2. Values impact behaviors that are exhibited on a day-day-to-day basis in the workplace.
    3. Values are the beliefs on which an organization is built.
    4. Values shape and guide strategic—as well as day-to-day—decision making.
  4. The first step in the scientific method is
    1. Develop a hypothesis.
    2. Question and observe.
    3. Scan existing secondary research.
    4. Conduct a needs analysis.
  5. The primary purpose of an HR audit is
    1. To ascertain how well the HR department—through all of its various functional areas—has aligned itself with the organization's strategic objectives.
    2. To ascertain the degree to which the HR department has complied with all legal requirements, and the potential financial exposure associated with existing levels of non-compliance.
    3. To ascertain the performance of the HR department with respect to the nature and quality of the consultative services it provides to its internal clients.
    4. To ascertain the degree to which the HR department is poised to meet the current, future, and emerging human capital and talent needs of the organization.
  6. Which of the following is not one of the four perspectives of the balanced scorecard?
    1. The financial perspective
    2. The external perspective
    3. The learning and growth perspective
    4. The business process perspective
  7. Effectiveness can be defined as
    1. A ratio of "inputs" to "outputs"
    2. The degree to which goals are met
    3. The degree to which goals reflect desired outputs
    4. A ratio of "outputs" to "inputs"
  8. Which of the following is not specifically recognized as being critically important to successfully implementing any strategic plan?
    1. Commitment
    2. Credibility
    3. Collaboration
    4. Communication
  9. Project managers seek to accomplish their objectives by gaining control over five factors, one of which is:
    1. Regulatory compliance
    2. Risk
    3. Reward structures
    4. Staffing
  10. All of the following are compelling reasons for organizations to engage in a strategic planning process except:
    1. Developing a clearer awareness of how the organization "measures up" internally and externally
    2. Engaging individuals throughout the organization in a meaningful organizational effort
    3. Enabling employees to prepare themselves to react positively and constructively to future events
    4. Creating—or reaffirming—the vision, mission, and values of the organization

    Answers to Review Questions

    1. Planning, the first of five managerial functions, lays the groundwork for how managers will work toward accomplishing the organization's goals. Through planning, managers decide what needs to get done, when it needs to get done, who will do it, how it will get done, and where it will be done. In the absence of planning, the organization—and the people in it—will lack direction, and perhaps even just "coast along."
    2. An organization's mission statement articulates, in essence, its reason for being. It may speak to the nature of the organization's business or purpose, its customers, and sometimes even its employees and its role in the community. A mission statement should be broad (but not overly generalized), brief, clear, unambiguous, and designed to last for "the long haul." Since the goals of an organization must be based on the mission, the mission is far bigger than any goal—and thus must be must be able to withstand the test of time.
    3. Establishing an organizational code of ethics is one important part of creating an ethical culture. The ethics code should begin with an introduction from the CEO that reaffirms the organization's commitment to the code. The code itself needs to start with the mission, vision, and values of the organization. From there, an organization's code of ethics needs to address myriad issues from the varying perspectives of employees, customers, shareholders, suppliers, and the community at large.
    4. "Introduction" (or "birth") is the first step in the employee lifecycle. During this phase, excitement and energy run high, and cash flow may be quite tight. Struggling start-ups often find themselves searching for solid footing—financially as well operationally. The core group of highly talented employees who are part of a start-up operations may focus fixedly on the founder as a source of direction, wisdom, and inspiration.
    5. In the introduction phase, employees may find themselves paid above market rates as a reflection of the founder's desire to "entice" them to come on board. Alternatively, if money is in short supply, during the introduction phase of the lifecycle employees may earn less cash compensation and have those diminished earnings offset by other non-cash rewards (equity, intrinsic rewards, and so on).

      Depending upon the organization, HR may or may not have a formal presence in this phase of the organizational life cycle.

    6. Controlling processes include managing the scope of the project and making sure the project stay in line with the original objectives. A significant degree of follow-up is required to carry out controlling processes.

Answers to Exam Questions

  1. Answer C is the best choice. "Coordinating" is a management function, not a project management process. Answers A, B, and D are not the best choices, since they each identify a project management process (those processes include initiation, planning, executing, controlling, and closing).
  2. Answer A is the best choice. HR professionals must seek to understand change and what causes change—ideally before change descends upon the organization. Change, itself, brings considerable challenges of its own—and often does not afford HR professionals with the luxury of time to "study" change theory or process (those are lessons that HR professionals need to undertake in advance). Answer C is not the best choice, since HR’s role is not to regulate the pace of change. At times, the pace of change may not be controllable. At other times, the pace of change may, in fact, be controllable, but the organization’s leaders may decide that it is not appropriate or advisable to slow the pace of change. Answers B and D are not the best choices; HR must serve as a "truth advocate®" during times of change (in fact, at all times), not as dedicated advocates of management or employees.
  3. Answer A is the best choice. Words like "communication" and "decision making" are terms that are often used to describe competencies (also called success factors), not values. Answers B, C, and D are not the best choices, since each makes a true statement about values.
  4. Answer B is the best choice. "Question and observe" is, in fact, the first step in the scientific method. Answer A is not the best choice, since developing a hypothesis is the second step in the scientific method. Answer C is not the best choice, since the scientific method is a form of primary research, and is therefore separate and distinct from secondary research. Answer D is not the best choice, since "conducting a needs analysis and assessment" is the first step in the ADDIE process, not the scientific method.
  5. Answer A is the best choice. The primary and overarching purpose of an HR audit is to ascertain how well the HR department has aligned itself with the organization’s strategic objectives. Answers B, C, and D are not the best responses; while each identifies a possible component of an HR audit, none of these is broad enough to encompass the overarching purpose of an HR audit.
  6. Answer B is the best choice. Though various elements of the balanced scorecard take external factors into consideration, the "external perspective" is not one of the four specific perspectives. Answers A, C, and D are not the best choices, since they each identify one of the perspectives of the balanced scorecard.
  7. Answer B is the best choice. Effectiveness is a measure of the degree to which goals—carefully established goals—are met.
  8. Answer C is the best choice. While collaboration is an important element of the strategic planning process, it is not recognized as on one of the "three Cs"—the most important keys to successful strategic planning. Those "three Cs" are commitment (answer A), credibility (answer (B), and communication (answer D).
  9. Answer B is the best choice. The five factors over which project managers seek to establish control are time, cost, quality, scope, and risk (answer B is "risk"). Project managers do not specifically seek to establish control over regulatory compliance (answer A), reward structures (answer C), or staffing (answer D), although all of those elements will be considerations as they work to attain their objectives.
  10. Answer D is the best choice. The focus of strategic planning is on "proactivity," not "reactivity." Therefore, through strategic planning, the organization creates an opportunity for individuals at all levels of the organization to proactively shape and influence the future, rather than just react to it. Answers A, B, and C are not the best responses, since each one articulates a compelling reason to engage in strategic planning.
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