Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
Chapter 02
Strategic Human Resource Management
True / False Questions
1. The goal of strategic management in an organization is to deploy and allocate resources in a
way that provides the company with a competitive advantage.
True False
2. Strategic management is more than a collection of strategic types. It is a process to increase
the likelihood of achieving a company's goals.
True False
3. The strategic management process includes two distinct yet interdependent phases: strategy
formulation and strategy implementation.
True False
4. Strategic decision makers often pay less attention to the "how to compete" issue, which
results in poor strategic decisions.
True False
5. Although one-way linkage does recognize the importance of human resources in
implementing the strategic plan, it precludes the company from considering human resource
issues while formulating the strategic plan.
True False
6. Untapped labor pools are an example of a strategic opportunity in an organization's operating
environment.
True False
2-1
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
7. The responsibility of keeping tabs on the external environment for human resource – related
opportunities and threats rests with the top management.
True False
8. Strategic choice is the way an organization attempts to fulfill its mission and achieve its
long-term goals.
True False
9. Research has indicated that a majority of companies have fully integrated HRM into the
strategy formulation process.
True False
10. HRM has the primary responsibility for three of the five implementation variables: task,
people, and reward systems.
True False
11. Job analysis involves the gathering of detailed information about jobs.
True False
12. Historically, narrow job designs have been used to increase innovation.
True False
13. Today, with the advent of total quality management methods and a variety of employee
involvement programs, such as quality circles, jobs are becoming broader in scope.
True False
2-2
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
14. A company's strategy will have a direct impact upon the firm's recruitment efforts, but only
an indirect impact on its selection procedures and the types of employees selected.
True False
15. The downside of providing a high level of pay and benefits is that it can lead to employee
complacency.
True False
16. By tying pay to performance, a company can elicit specific activities and levels of
performance from employees.
True False
17. According to research, HRM practices and employee performance are positively related.
True False
18. Increasing the use of HRM practices will automatically result in increased profitability.
True False
19. An overall cost leadership strategy is achieved by creating new product features or unique
customer services.
True False
20. Differentiation companies will have compensation systems that are geared toward internal
rather than external equity.
True False
2-3
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
21. Jobholder actions are behaviors required of an individual in his/her role as a job holder in a
social work environment.
True False
22. Concentration strategies traditionally include vertical and horizontal integration.
True False
23. Research indicates that downsizing has been largely successful in achieving goals of
increased productivity and profitability.
True False
24. According to research results, early retirement programs are one of the more effective
approaches to downsizing.
True False
25. Downsizing can lead to feelings of guilt and/or envy among survivors.
True False
Multiple Choice Questions
26. _____ is the skillful employment and coordination of tactics.
A. Strategy
B. HRM
C. Business model
D. Structure
2-4
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
27. What is the name of the process that manages the pattern or plan that integrates an
organization's major goals, policies, and action sequences into a cohesive whole?
A. Long-range planning
B. Strategy implementation
C. Management by objectives
D. Strategic management
28. When an organization develops integrated manufacturing systems such as advanced
manufacturing technology and just-in-time inventory control, then one of the responsibilities of
SHRM is to:
A. assess the skills required to run these systems.
B. ensure the availability of the physical resources (plant, equipment, and technology) required
to implement these systems.
C. test the applicability of these systems.
D. document the use of these systems within the organization.
29. _____ can be thought of as the pattern of planned human resource deployments and
activities intended to enable an organization to achieve its goals.
A. HRM
B. Strategy implementation
C. Strategic HRM
D. Strategy formulation
30. Company X is a retail firm specializing in menswear. It has identified its main competitors
as firms providing formal attire to working males between the ages of 22-35. Company X is at
the _____ phase.
A. strategy implementation
B. strategy formulation
C. strategic management
D. strategic planning
2-5
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
31. Strategy formulation involves all but one of the following. Name the exception.
A. Defining the firm's mission and goals
B. Assessing the firm's external opportunities and threats
C. Defining the firm's organizational structure
D. Generating various strategic alternatives
32. The process that involves allocating resources, developing structures, hiring skilled
employees, and developing appropriate reward systems is known as:
A. strategy formulation.
B. strategy implementation.
C. strategic planning.
D. strategic management.
33. All of the following are strategy decisions about competition EXCEPT:
A. How long to compete?
B. Where to compete?
C. How to compete?
D. With what to compete?
34. Strategic decision makers often pay less attention to the _____ issue, resulting in poor
strategic decisions.
A. "when to compete"
B. "where to compete"
C. "how to compete"
D. "with what will we compete"
35. In an organization, a strategic planning group consists of all but one of the following. Name
the exception.
A. Chief executive officer
B. Presidents
C. Regional business head
D. Chief financial officer
2-6
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
36. _____ levels of integration seem to exist between the HRM function and the strategic
management function.
A. Two
B. Four
C. Five
D. Three
37. Which is the lowest level of integration between the HRM function and the strategic
management function?
A. Administrative linkage
B. Two-way linkage
C. Integrative linkage
D. Executive linkage
38. At which level of integration is HR's attention and time focused solely on day-to-day
activities?
A. Administrative linkage
B. One-way linkage
C. Two-way linkage
D. Integrative linkage
39. At which level of integration is the HR department simply engaged in regulatory work that
is unrelated to the company's core business needs?
A. Administrative linkage
B. One-way linkage
C. Two-way linkage
D. Integrative linkage
2-7
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
40. Which of the following often leads to strategic plans that the company cannot successfully
implement?
A. Congruent linkage
B. Integrative linkage
C. Two-way linkage
D. One-way linkage
2-8
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
41. Which of the following is NOT a step in two-way linkage?
A. The strategic planning team informs the HRM function of the various strategies the
company is considering.
B. HRM executives analyze the HR implications of the various strategies, presenting the results
of this analysis to the strategic planning team.
C. After a strategic planning decision has been made, the strategic plan is passed on to the HRM
executive, who develops programs to implement it.
D. Top management makes decisions about strategies without input from functional managers.
42. Integrative linkage is:
A. dynamic, multifaceted, and based on continuing rather than sequential interaction.
B. dynamic, multifaceted, and based on sequential rather than continuing interaction.
C. simple, based on a single rather than continuing interaction.
D. simple, based on a continuing rather than single interaction.
43. In which level of integration are the strategic planning function and the HRM function
interdependent?
A. Administrative linkage
B. One-way linkage
C. Two-way linkage
D. Integrative linkage
44. The first component in the strategy formulation process is:
A. establishment of corporate goals.
B. formulation of a statement of mission.
C. completion of an external analysis.
D. strategic choice.
2-9
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
45. The _____ is a statement of the organization's reason for being that usually specifies the
customers served, the needs satisfied and/or the values received by the customers, and the
technology used.
A. goal
B. mission
C. strategy
D. vision
46. An organization's _____ is what it hopes to achieve in the medium- to long-term
future.
A. goal
B. mission
C. strategy
D. vision
47. _____ consists of examining the organization's operating environment to identify the
strategic opportunities and threats.
A. Strategic formulation
B. Internal analysis
C. External analysis
D. Strategic choice
48. _____ attempts to identify the organization's strengths and weaknesses.
A. Strategic formulation
B. Internal analysis
C. External analysis
D. Strategic choice
49. The purpose of the SWOT analysis is to:
A. choose the best strategy.
B. consider the downside of each strategic alternative.
C. generate a large number of strategic alternatives.
D. realign HR practices.
2-10
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
50. The last step in the strategy formulation is:
A. establishment of corporate goals.
B. formulation of a statement of mission.
C. completion of an internal and external analysis.
D. strategic choice.
51. HRM is primarily responsible for three of the following variables in the strategy
implementation process. Identify the exception.
A. Selection, training, and development of people
B. Task design
C. Reward systems
D. Customer awareness
52. Which of the following statements is TRUE regarding strategy implementation?
A. HR has an influence over all the variables involved in the strategy implementation process.
B. HR is seldom involved in strategy implementation activities.
C. HR has primary responsibility for all five of the major components to strategy
implementation.
D. HR practices are completely independent from strategy implementation.
53. Which process addresses what tasks should be grouped into a particular job?
A. Job analysis
B. Internal analysis
C. External analysis
D. Job design
54. _____ is the process through which the organization seeks applicants for potential
employment.
A. Selection
B. Recruitment
C. Screening
D. Development
2-11
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
55. The process by which a firm attempts to identify qualified applicants—those with the
knowledge, skills, abilities, and other characteristics necessary to help the firm achieve its
goals—is known as:
A. selection.
B. recruitment.
C. interviewing.
D. testing.
56. The process that allows employees to improve their ability to meet the challenges of a
variety of existing or new jobs is:
A. training.
B. development.
C. learning.
D. acquisition.
57. _____ is a planned effort to facilitate the learning of job-related knowledge, skills, and
behavior by employees.
A. Training
B. Development
C. Learning
D. Acquisition
58. Firms that are diversified are more likely to use performance measures that are:
A. selective.
B. qualitative.
C. quantitative.
D. objective.
2-12
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
59. Identify the type of firms which tend to have evaluation systems that call for subjective
assessments of performance for evaluating managers.
A. Diversified organizations
B. Homogeneous organizations
C. Parallel organizations
D. Steady-state organizations
2-13
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
60. When executives are unclear about the specific behaviors that lead to effective
performance, they tend to focus on evaluating the _____ performance results of their
subordinate managers.
A. objective
B. subjective
C. qualitative
D. perceptive
61. _____ is used to ensure that employee activities and outcomes are congruent with the
organization's objectives.
A. An incentive
B. Training
C. Performance management
D. Development
62. High-tech firms in the growth stage tend to use compensation systems that:
A. are highly geared toward benefits.
B. devote a lower percentage of total pay to incentives.
C. are highly geared toward incentive pay.
D. devote equal percentages to pay and benefits.
63. Which type of companies tend to use compensation systems devoting a lower percentage of
total pay to incentives and a high percentage to benefits?
A. Growing companies
B. Mature companies
C. Startup companies
D. Acquired companies
64. Company X wants to become the lowest cost producer in the industry. What should it do?
A. Construct efficient large-scale facilities.
B. Create a product that is different from others available in the market.
C. Invest heavily in branding their product.
D. Reduce expenditure on production facilities.
2-14
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
65. Apple computers come with their own proprietary operating systems. What kind of a
strategy is this?
A. Overall cost leadership
B. Differentiation
C. Reactor
D. Prospector
66. What type of strategy is used by a firm that specifically defines required skills and seeks
efficiency through worker participation?
A. Cost
B. Differentiation
C. Focus
D. Analyzer
67. IBM has consistently emphasized its brand image and its reputation for superior service
while charging a higher price for its computers. This is an example of which one of Porter's
generic strategies?
A. Overall cost leadership
B. Differentiation
C. Focus
D. Prospectors
68. A company engaged in a differentiation strategy is likely to focus on all but one of the
following. Name the exception.
A. Encourage creativity through broadly defined jobs with general job descriptions.
B. Engage in limited socialization of newcomers.
C. Promote internally, with internally consistent pay systems.
D. Develop results-based performance management systems.
2-15
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
69. Employees in companies with a differentiation strategy would need to be:
A. highly concerned with quantity.
B. comfortable with stability.
C. highly creative and cooperative.
D. risk averse.
2-16
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
70. Company X develops results-based performance management systems and conducts
divisional – corporate performance evaluations to encourage risk taking on the part of
managers. Which strategy is this company following?
A. Cost
B. External growth
C. Directional
D. Differentiation
71. What type of strategy is used by a firm that focuses on what it does best within established
markets?
A. Concentration
B. Internal growth
C. External growth
D. Divestment
72. What type of strategy attempts to expand a company's resources or to strengthen its market
position through acquiring or creating new businesses?
A. Internal growth strategy
B. Diversification growth strategy
C. External growth strategy
D. Expansion growth strategy
73. Which one of the following is NOT an internal growth strategy?
A. Vertical integration
B. Market development
C. Joint venture
D. Innovation
74. Firms that seek to scale down their operations are following a(n):
A. concentration strategy.
B. internal growth strategy.
C. external growth strategy.
D. divestment strategy.
2-17
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
75. Company Z's appraisals tend to be more behavioral because the company environment is
more certain and the behaviors necessary for effective performance are established. Which
strategy is this company following?
A. Concentration strategy
B. Internal growth strategy
C. External growth strategy
D. Divestment strategy
76. For companies following a(n) _____ strategy, joint ventures require extensive training in
conflict resolution techniques because of the problems associated with combining people from
two distinct organizational cultures.
A. concentration
B. internal growth
C. external growth
D. divestment
77. The most prevalent HR problem for firms facing external growth strategies is:
A. hiring the right people.
B. standardizing practices across the organization.
C. finding the right companies to purchase.
D. determining the fair-market price of acquisitions.
78. Some companies now heavily weigh a firm's _____ before embarking on a merger or
acquisition.
A. operational efficiency
B. human capital
C. culture
D. infrastructure
2-18
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
79. Downsizing is likely to result in:
A. increased employee trust and commitment.
B. avoidance of a takeover.
C. increased innovation.
D. compensation plans tied to company performance.
2-19
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
80. Which of the following desired outcomes of downsizing is most likely to be achieved?
A. Increased market share
B. Reduced expenses
C. Increased productivity
D. Reduced bureaucracy
81. Which of the following desired outcomes of downsizing is least likely to be achieved?
A. Increased innovation
B. Increased customer satisfaction
C. Avoidance of a takeover
D. Improved cash flows
82. Which of the following is NOT one of the results that can be achieved by an organization's
downsizing?
A. Changing an organization's culture
B. Dissolving labor union contracts
C. Getting rid of "dead wood"
D. Making way for fresh ideas
83. Which of the following is an opportunity that downsizing provides for HRM?
A. The HRM function must "surgically" reduce the workforce by cutting only the workers who
are less valuable in their performance.
B. Boosting the morale of employees who remain after the reduction.
C. Building trust and maintaining communication with remaining employees.
D. Changing the organization's culture and making way for fresh ideas.
84. _____ strategies are the result of the rational decision-making process used by top managers
as they develop a strategic plan.
A. Emergent
B. Intended
C. Divergent
D. Accidental
2-20
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
85. Most strategies that companies espouse are:
A. concentration strategies.
B. directional strategies.
C. emergent strategies.
D. intended strategies.
86. Which of the following strategies evolves from the grassroots of an organization and can be
thought of as what organizations actually do?
A. Concentration
B. Directional
C. Emergent
D. Intended
87. Which of the following is essential if a company is to take advantage of emergent
strategies?
A. A formal organizational structure
B. A weak corporate culture
C. An externally-based compensation system
D. An effective communications system
88. Most _____ strategies are identified by those lower in the organizational hierarchy, where it
is often the rank-and-file employees who provide ideas for new markets, new products, and new
strategies.
A. concentration
B. directional
C. emergent
D. intended
2-21
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
89. In which type of an organization do employees expand their capacity to achieve the results
that they desire?
A. Diversified organizations
B. Emergent organizations
C. Learning organizations
D. Strategic organizations
2-22
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
90. A company is in a constant state of _____ through monitoring the environment, assimilating
information, making decisions, and flexibly restructuring to compete in that environment.
A. expanding
B. learning
C. exploring
D. evolving
Essay Questions
91. Discuss four ways an HR department can ensure involvement with a firm's strategic
management process.
92. List the four levels of integration that can exist between the HR function and the strategic
management functions.
93. Discuss the three steps in a two-way linkage between the HR function and the strategic
management functions.
2-23
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
94. Identify and explain the steps in formulating a strategy.
95. List the five variables that determine success in strategy implementation, and indicate those
over which HRM has major responsibility.
96. Discuss the six HRM practices from which companies can choose for implementing their
strategy.
97. Compare and contrast Porter's generic strategies of cost leadership and differentiation.
2-24
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
98. Describe two of the four directional strategies that firms have used to meet objectives.
99. Discuss the different challenges faced by HR in firms emphasizing internal vs. external
growth.
100. Discuss the challenges and opportunities (advantages) for HR in a downsizing, or
right-sizing, effort.
2-25
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
Chapter 02 Strategic Human Resource Management Answer Key
True / False Questions
1. (p. 72) The goal of strategic management in an organization is to deploy and allocate resources
in a way that provides the company with a competitive advantage.
TRUE
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-1
Topic: Introduction
2. (p. 75) Strategic management is more than a collection of strategic types. It is a process to
increase the likelihood of achieving a company's goals.
TRUE
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-1
Topic: What is Strategic Management?
3. (p. 75) The strategic management process includes two distinct yet interdependent phases:
strategy formulation and strategy implementation.
TRUE
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-2
Topic: Components of the Strategic Management Process
2-26
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
4. (p. 77) Strategic decision makers often pay less attention to the "how to compete" issue, which
results in poor strategic decisions.
FALSE
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-2
Topic: Linkage Between HRM and the Strategic Management Process
5. (p. 79) Although one-way linkage does recognize the importance of human resources in
implementing the strategic plan, it precludes the company from considering human resource
issues while formulating the strategic plan.
TRUE
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-4
Topic: Role of HRM in Strategy Formulation
6. (p. 80) Untapped labor pools are an example of a strategic opportunity in an organization's
operating environment.
TRUE
AACSB: Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-4
Topic: Strategy Formulation
7. (p. 81) The responsibility of keeping tabs on the external environment for human resource –
related opportunities and threats rests with the top management.
FALSE
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-4
Topic: Strategy Formulation
2-27
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
8. (p. 81) Strategic choice is the way an organization attempts to fulfill its mission and achieve its
long-term goals.
TRUE
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-4
Topic: Strategy Formulation
9. (p. 83) Research has indicated that a majority of companies have fully integrated HRM into the
strategy formulation process.
FALSE
AACSB: Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-4
Topic: Strategy Formulation
10. (p. 83) HRM has the primary responsibility for three of the five implementation variables:
task, people, and reward systems.
TRUE
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-5
Topic: Strategy Implementation
11. (p. 86) Job analysis involves the gathering of detailed information about jobs.
TRUE
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-5
Topic: HRM Practices
2-28
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
12. (p. 86) Historically, narrow job designs have been used to increase innovation.
FALSE
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-5
Topic: HRM Practices
13. (p. 86) Today, with the advent of total quality management methods and a variety of employee
involvement programs, such as quality circles, jobs are becoming broader in scope.
TRUE
AACSB: Reflective Thinking Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-5
Topic: HRM Practices
14. (p. 87) A company's strategy will have a direct impact upon the firm's recruitment efforts, but
only an indirect impact on its selection procedures and the types of employees selected.
FALSE
AACSB: Reflective Thinking Skills
BT: Comprehension
Difficulty: Medium
Learning Objective: 2-5
Topic: HRM Practices
15. (p. 89) The downside of providing a high level of pay and benefits is that it can lead to
employee complacency.
FALSE
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-5
Topic: HRM Practices
2-29
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
16. (p. 89) By tying pay to performance, a company can elicit specific activities and levels of
performance from employees.
TRUE
AACSB: Business Knowledge and Analytic Skills
BT: Comprehension
Difficulty: Medium
Learning Objective: 2-5
Topic: HRM Practices
17. (p. 90) According to research, HRM practices and employee performance are positively
related.
TRUE
AACSB: Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-5
Topic: HRM Practices
18. (p. 90) Increasing the use of HRM practices will automatically result in increased
profitability.
FALSE
AACSB: Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-5
Topic: HRM Practices
19. (p. 90) An overall cost leadership strategy is achieved by creating new product features or
unique customer services.
FALSE
AACSB: Value Creation Through the Integrated Production and Distribution of Goods, Services, and Information
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-5
Topic: Strategic Types
2-30
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
20. (p. 91) Differentiation companies will have compensation systems that are geared toward
internal rather than external equity.
FALSE
AACSB: Value Creation Through the Integrated Production and Distribution of Goods, Services, and Information
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-5
Topic: HRM Needs in Strategic Types
21. (p. 91) Jobholder actions are behaviors required of an individual in his/her role as a job holder
in a social work environment.
FALSE
AACSB: Group/Individual Dynamics in Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-5
Topic: HRM Needs in Strategic Types
22. (p. 92) Concentration strategies traditionally include vertical and horizontal integration.
FALSE
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-6
Topic: Directional Strategies
23. (p. 94) Research indicates that downsizing has been largely successful in achieving goals of
increased productivity and profitability.
FALSE
AACSB: Reflective Thinking Skills
BT: Comprehension
Difficulty: Medium
Learning Objective: 2-6
Topic: Directional Strategies
2-31
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
24. (p. 95) According to research results, early retirement programs are one of the more effective
approaches to downsizing.
FALSE
AACSB: Reflective Thinking Skills
BT: Comprehension
Difficulty: Medium
Learning Objective: 2-6
Topic: Directional Strategies
25. (p. 95) Downsizing can lead to feelings of guilt and/or envy among survivors.
TRUE
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-6
Topic: Directional Strategies
Multiple Choice Questions
26. (p. 74) _____ is the skillful employment and coordination of tactics.
A. Strategy
B. HRM
C. Business model
D. Structure
Webster's New American Dictionary defines strategy as the "skillful employment and
coordination of tactics" and as "artful planning and management."
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-1
Topic: What is Strategic Management?
2-32
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
27. (p. 74) What is the name of the process that manages the pattern or plan that integrates an
organization's major goals, policies, and action sequences into a cohesive whole?
A. Long-range planning
B. Strategy implementation
C. Management by objectives
D. Strategic management
Strategic management is a process, an approach to addressing the competitive challenges an
organization faces.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-1
Topic: What is Strategic Management?
28. (p. 75) When an organization develops integrated manufacturing systems such as advanced
manufacturing technology and just-in-time inventory control, then one of the responsibilities of
SHRM is to:
A. assess the skills required to run these systems.
B. ensure the availability of the physical resources (plant, equipment, and technology) required
to implement these systems.
C. test the applicability of these systems.
D. document the use of these systems within the organization.
SHRM is a pattern of planned human resource deployments and activities intended to enable an
organization to achieve its goals.
AACSB: Business Knowledge and Analytic Skills
BT: Comprehension
Difficulty: Medium
Learning Objective: 2-1
Topic: What is Strategic Management?
2-33
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
29. (p. 75) _____ can be thought of as the pattern of planned human resource deployments and
activities intended to enable an organization to achieve its goals.
A. HRM
B. Strategy implementation
C. Strategic HRM
D. Strategy formulation
An example of SHRM is when firms develop integrated manufacturing systems such as
advanced manufacturing technology, just-in-time inventory control, and TQM in an effort to
increase their competitive position.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-1
Topic: What is Strategic Management?
30. (p. 75) Company X is a retail firm specializing in menswear. It has identified its main
competitors as firms providing formal attire to working males between the ages of 22-35.
Company X is at the _____ phase.
A. strategy implementation
B. strategy formulation
C. strategic management
D. strategic planning
Strategy formulation is the process of deciding on a strategic direction by defining a company's
mission and goals, its external opportunities and threats, and its internal strengths and
weaknesses.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-2
Topic: Components of the Strategic Management Process
2-34
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
31. (p. 75) Strategy formulation involves all but one of the following. Name the exception.
A. Defining the firm's mission and goals
B. Assessing the firm's external opportunities and threats
C. Defining the firm's organizational structure
D. Generating various strategic alternatives
The task of defining the firm's organizational structure is an aspect of strategy implementation
process.
AACSB: Reflective Thinking Skills
BT: Comprehension
Difficulty: Medium
Learning Objective: 2-2
Topic: Components of the Strategic Management Process
32. (p. 75) The process that involves allocating resources, developing structures, hiring skilled
employees, and developing appropriate reward systems is known as:
A. strategy formulation.
B. strategy implementation.
C. strategic planning.
D. strategic management.
Strategy implementation is the process of devising structures and allocating resources to enact
the strategy a company has chosen.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-2
Topic: Components of the Strategic Management Process
2-35
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
33. (p. 77) All of the following are strategy decisions about competition EXCEPT:
A. How long to compete?
B. Where to compete?
C. How to compete?
D. With what to compete?
The strategy decisions consist of addressing the issues of where to compete, how to compete,
and with what to compete to achieve the firm's missions and goals.
AACSB: Reflective Thinking Skills
BT: Comprehension
Difficulty: Medium
Learning Objective: 2-2
Topic: Linkage Between HRM and the Strategic Management Process
34. (p. 77) Strategic decision makers often pay less attention to the _____ issue, resulting in poor
strategic decisions.
A. "when to compete"
B. "where to compete"
C. "how to compete"
D. "with what will we compete"
When firms make decisions without fully understanding what resources would be needed to
compete in a particular market, they end up making poor strategic decisions.
AACSB: Business Knowledge and Analytic Skills
BT: Comprehension
Difficulty: Medium
Learning Objective: 2-2
Topic: Linkage Between HRM and the Strategic Management Process
2-36
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
35. (p. 78) In an organization, a strategic planning group consists of all but one of the following.
Name the exception.
A. Chief executive officer
B. Presidents
C. Regional business head
D. Chief financial officer
A firm's strategic management decision-making process usually takes place at its top levels,
with a strategic planning group consisting of the chief executive officer, the chief financial
officer, the president, and various vice presidents.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-3
Topic: Role of HRM in Strategy Formulation
36. (p. 79) _____ levels of integration seem to exist between the HRM function and the strategic
management function.
A. Two
B. Four
C. Five
D. Three
The four levels of integration are: administrative linkage, one-way linkage, two-way linkage,
and integrative linkage.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-3
Topic: Role of HRM in Strategy Formulation
2-37
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
37. (p. 79) Which is the lowest level of integration between the HRM function and the strategic
management function?
A. Administrative linkage
B. Two-way linkage
C. Integrative linkage
D. Executive linkage
In administrative linkage the HRM function's attention is focused on day-to-day activities and
is completely divorced from any component of the strategic management process in both
strategy formulation and strategy implementation.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-4
Topic: Role of HRM in Strategy Formulation
38. (p. 79) At which level of integration is HR's attention and time focused solely on day-to-day
activities?
A. Administrative linkage
B. One-way linkage
C. Two-way linkage
D. Integrative linkage
In administrative linkage the HRM function's attention is focused on day-to-day activities and
is completely divorced from any component of the strategic management process in both
strategy formulation and strategy implementation.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-4
Topic: Role of HRM in Strategy Formulation
2-38
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
39. (p. 79) At which level of integration is the HR department simply engaged in regulatory work
that is unrelated to the company's core business needs?
A. Administrative linkage
B. One-way linkage
C. Two-way linkage
D. Integrative linkage
In administrative linkage the HRM function's attention is focused on day-to-day activities and
is completely divorced from any component of the strategic management process in both
strategy formulation and strategy implementation.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-4
Topic: Role of HRM in Strategy Formulation
40. (p. 79) Which of the following often leads to strategic plans that the company cannot
successfully implement?
A. Congruent linkage
B. Integrative linkage
C. Two-way linkage
D. One-way linkage
In one-way linkage, the firm's strategic business planning function develops the strategic plan
and then informs the HRM function of the plan.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-4
Topic: Role of HRM in Strategy Formulation
2-39
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
41. (p. 79-80) Which of the following is NOT a step in two-way linkage?
A. The strategic planning team informs the HRM function of the various strategies the
company is considering.
B. HRM executives analyze the HR implications of the various strategies, presenting the results
of this analysis to the strategic planning team.
C. After a strategic planning decision has been made, the strategic plan is passed on to the HRM
executive, who develops programs to implement it.
D. Top management makes decisions about strategies without input from functional managers.
The two-way linkage integration occurs in three sequential steps: the strategic planning team
informs the HRM function of the various strategies the company is considering; then HRM
executives analyze the human resource implications of the various strategies, presenting the
results of this analysis to the strategic planning team; finally the strategic plan is passed on to
the HRM executive, who develops programs to implement it.
AACSB: Reflective Thinking Skills
BT: Comprehension
Difficulty: Medium
Learning Objective: 2-4
Topic: Role of HRM in Strategy Formulation
42. (p. 80) Integrative linkage is:
A. dynamic, multifaceted, and based on continuing rather than sequential interaction.
B. dynamic, multifaceted, and based on sequential rather than continuing interaction.
C. simple, based on a single rather than continuing interaction.
D. simple, based on a continuing rather than single interaction.
Integrative linkage is dynamic and multifaceted, based on continuing rather than sequential
interaction.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-4
Topic: Role of HRM in Strategy Formulation
2-40
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
43. (p. 80) In which level of integration are the strategic planning function and the HRM function
interdependent?
A. Administrative linkage
B. One-way linkage
C. Two-way linkage
D. Integrative linkage
The strategic planning function and the HRM function are interdependent in two-way linkage.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-4
Topic: Role of HRM in Strategy Formulation
44. (p. 80) The first component in the strategy formulation process is:
A. establishment of corporate goals.
B. formulation of a statement of mission.
C. completion of an external analysis.
D. strategic choice.
Organization's mission is the first component in the strategy formulation process.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-4
Topic: Strategy Formulation
2-41
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
45. (p. 80) The _____ is a statement of the organization's reason for being that usually specifies
the customers served, the needs satisfied and/or the values received by the customers, and the
technology used.
A. goal
B. mission
C. strategy
D. vision
The mission statement is often accompanied by a statement of a company's vision and/or
values.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-4
Topic: Strategy Formulation
46. (p. 80) An organization's _____ is what it hopes to achieve in the medium- to long-term
future.
A. goal
B. mission
C. strategy
D. vision
An organization's goals are what it hopes to achieve in the medium- to long-term future; they
reflect how the mission will be operationalized.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-4
Topic: Strategy Formulation
2-42
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
47. (p. 80) _____ consists of examining the organization's operating environment to identify the
strategic opportunities and threats.
A. Strategic formulation
B. Internal analysis
C. External analysis
D. Strategic choice
External analysis consists of examining the organization's operating environment to identify the
strategic opportunities and threats.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-4
Topic: Strategy Formulation
48. (p. 80) _____ attempts to identify the organization's strengths and weaknesses.
A. Strategic formulation
B. Internal analysis
C. External analysis
D. Strategic choice
Internal analysis attempts to identify the organization's strengths and weaknesses. It focuses on
the quantity and quality of resources available to the organization— financial, capital,
technological, and human resources.
AACSB: Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-4
Topic: Strategy Formulation
2-43
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
49. (p. 81) The purpose of the SWOT analysis is to:
A. choose the best strategy.
B. consider the downside of each strategic alternative.
C. generate a large number of strategic alternatives.
D. realign HR practices.
After going through the SWOT analysis, the strategic planning team has all the information it
needs to generate a number of strategic alternatives.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-4
Topic: Strategy Formulation
50. (p. 81) The last step in the strategy formulation is:
A. establishment of corporate goals.
B. formulation of a statement of mission.
C. completion of an internal and external analysis.
D. strategic choice.
After generating a number of strategic alternatives, the strategic managers compare these
alternatives' ability to attain the organization's strategic goals; then they make their strategic
choice.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-4
Topic: Strategy Formulation
2-44
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
51. (p. 83) HRM is primarily responsible for three of the following variables in the strategy
implementation process. Identify the exception.
A. Selection, training, and development of people
B. Task design
C. Reward systems
D. Customer awareness
HRM has primary responsibility for three of the five implementation variables: task, people,
and reward systems.
AACSB: Reflective Thinking Skills
BT: Comprehension
Difficulty: Medium
Learning Objective: 2-5
Topic: Strategy Implementation
52. (p. 83) Which of the following statements is TRUE regarding strategy implementation?
A. HR has an influence over all the variables involved in the strategy implementation process.
B. HR is seldom involved in strategy implementation activities.
C. HR has primary responsibility for all five of the major components to strategy
implementation.
D. HR practices are completely independent from strategy implementation.
HRM has primary responsibility for three of these five implementation variables: task, people,
and reward systems. In addition, HRM can directly affect the two remaining variables: structure
and information and decision processes.
AACSB: Reflective Thinking Skills
BT: Comprehension
Difficulty: Medium
Learning Objective: 2-5
Topic: Strategy Implementation
2-45
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
53. (p. 86) Which process addresses what tasks should be grouped into a particular job?
A. Job analysis
B. Internal analysis
C. External analysis
D. Job design
Job design addresses what tasks should be grouped into a particular job.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-5
Topic: HRM Practices
54. (p. 86) _____ is the process through which the organization seeks applicants for potential
employment.
A. Selection
B. Recruitment
C. Screening
D. Development
Recruitment is the process through which the organization seeks applicants for potential
employment.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-5
Topic: HRM Practices
2-46
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
55. (p. 86-87) The process by which a firm attempts to identify qualified applicants—those with
the knowledge, skills, abilities, and other characteristics necessary to help the firm achieve its
goals—is known as:
A. selection.
B. recruitment.
C. interviewing.
D. testing.
Selection refers to the process by which it attempts to identify applicants with the necessary
knowledge, skills, abilities, and other characteristics that will help the company achieve its
goals.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-5
Topic: HRM Practices
56. (p. 87) The process that allows employees to improve their ability to meet the challenges of a
variety of existing or new jobs is:
A. training.
B. development.
C. learning.
D. acquisition.
Development involves acquiring knowledge, skills, and behavior that improve employees'
ability to meet the challenges of a variety of existing jobs or jobs that do not yet exist.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-5
Topic: HRM Practices
2-47
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
57. (p. 87) _____ is a planned effort to facilitate the learning of job-related knowledge, skills, and
behavior by employees.
A. Training
B. Development
C. Learning
D. Acquisition
Training refers to a planned effort to facilitate the learning of job-related knowledge, skills, and
behavior by employees.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-5
Topic: HRM Practices
58. (p. 88) Firms that are diversified are more likely to use performance measures that are:
A. selective.
B. qualitative.
C. quantitative.
D. objective.
Diversified companies are more likely to use quantitative measures of performance to evaluate
managers because top managers have less knowledge about how work should be performed by
those below them in the hierarchy.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-5
Topic: HRM Practices
2-48
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
59. (p. 88) Identify the type of firms which tend to have evaluation systems that call for subjective
assessments of performance for evaluating managers.
A. Diversified organizations
B. Homogeneous organizations
C. Parallel organizations
D. Steady-state organizations
Companies that are "steady state" (not diversified) tend to have evaluation systems that call for
subjective performance assessments of managers.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-5
Topic: HRM Practices
60. (p. 88) When executives are unclear about the specific behaviors that lead to effective
performance, they tend to focus on evaluating the _____ performance results of their
subordinate managers.
A. objective
B. subjective
C. qualitative
D. perceptive
When executives are unclear about the specific behaviors that lead to effective performance,
they tend to focus on evaluating the objective performance results of their subordinate
managers.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-5
Topic: HRM Practices
2-49
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
61. (p. 88) _____ is used to ensure that employee activities and outcomes are congruent with the
organization's objectives.
A. An incentive
B. Training
C. Performance management
D. Development
Performance management is used to ensure that employees' activities and outcomes are
congruent with the organization's objectives. It entails specifying those activities and outcomes
that will result in the firm's successfully implementing the strategy.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-5
Topic: HRM Practices
62. (p. 89) High-tech firms in the growth stage tend to use compensation systems that:
A. are highly geared toward benefits.
B. devote a lower percentage of total pay to incentives.
C. are highly geared toward incentive pay.
D. devote equal percentages to pay and benefits.
High-tech companies in the growth stage used compensation systems that were highly geared
toward incentive pay, with a lower percentage of total pay devoted to salary and benefits.
AACSB: Reflective Thinking Skills
BT: Knowledge
Difficulty: Hard
Learning Objective: 2-5
Topic: HRM Practices
2-50
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
63. (p. 89) Which type of companies tend to use compensation systems devoting a lower
percentage of total pay to incentives and a high percentage to benefits?
A. Growing companies
B. Mature companies
C. Startup companies
D. Acquired companies
Mature companies (both high-tech and traditional) devoted a lower percentage of total pay to
incentives and a high percentage to benefits.
AACSB: Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-5
Topic: HRM Practices
64. (p. 90) Company X wants to become the lowest cost producer in the industry. What should it
do?
A. Construct efficient large-scale facilities.
B. Create a product that is different from others available in the market.
C. Invest heavily in branding their product.
D. Reduce expenditure on production facilities.
According to Porter, the "overall cost leadership" is achieved by constructing efficient
large-scale facilities, by reducing costs through capitalizing on the experience curve, and by
controlling overhead costs and costs in such areas as research and development, service, sales
force, and advertising.
AACSB: Reflective Thinking Skills
BT: Application
Difficulty: Medium
Learning Objective: 2-5
Topic: Strategic Types
2-51
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
65. (p. 90) Apple computers come with their own proprietary operating systems. What kind of a
strategy is this?
A. Overall cost leadership
B. Differentiation
C. Reactor
D. Prospector
The "differentiation" strategy, according to Porter, attempts to create the impression that the
company's product or service is different from that of others in the industry.
AACSB: Reflective Thinking Skills
BT: Application
Difficulty: Medium
Learning Objective: 2-5
Topic: Strategic Types
66. (p. 91) What type of strategy is used by a firm that specifically defines required skills and
seeks efficiency through worker participation?
A. Cost
B. Differentiation
C. Focus
D. Analyzer
Companies engaged in cost strategies tend to specifically define the skills they require and
invest in training employees in these skill areas.
AACSB: Value Creation Through the Integrated Production and Distribution of Goods, Services, and Information
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-5
Topic: HRM Needs in Strategic Types
2-52
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
67. (p. 90) IBM has consistently emphasized its brand image and its reputation for superior
service while charging a higher price for its computers. This is an example of which one of
Porter's generic strategies?
A. Overall cost leadership
B. Differentiation
C. Focus
D. Prospectors
The "differentiation" strategy, according to Porter, attempts to create the impression that the
company's product or service is different from that of others in the industry. The perceived
differentiation can come from creating a brand image, from technology, from offering unique
features, or from unique customer service.
AACSB: Reflective Thinking Skills
BT: Application
Difficulty: Medium
Learning Objective: 2-5
Topic: Strategic Types
68. (p. 91) A company engaged in a differentiation strategy is likely to focus on all but one of the
following. Name the exception.
A. Encourage creativity through broadly defined jobs with general job descriptions.
B. Engage in limited socialization of newcomers.
C. Promote internally, with internally consistent pay systems.
D. Develop results-based performance management systems.
Promoting internally, with internally consistent pay systems is an attribute of the companies
engaged in cost strategies.
AACSB: Reflective Thinking Skills
BT: Comprehension
Difficulty: Hard
Learning Objective: 2-5
Topic: HRM Needs in Strategic Types
2-53
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
69. (p. 91) Employees in companies with a differentiation strategy would need to be:
A. highly concerned with quantity.
B. comfortable with stability.
C. highly creative and cooperative.
D. risk averse.
Employees in companies with a differentiation strategy need to be highly creative and
cooperative. Employees in these companies are expected to exhibit role behaviors that include
cooperating with others, developing new ideas, and taking a balanced approach to process and
results.
AACSB: Group/Individual Dynamics in Organizations
BT: Comprehension
Difficulty: Hard
Learning Objective: 2-5
Topic: HRM Needs in Strategic Types
70. (p. 91) Company X develops results-based performance management systems and conducts
divisional – corporate performance evaluations to encourage risk taking on the part of
managers. Which strategy is this company following?
A. Cost
B. External growth
C. Directional
D. Differentiation
Differentiation companies develop results-based performance management system and
divisional – corporate performance evaluations to encourage risk taking on the part of
managers.
AACSB: Group/Individual Dynamics in Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-5
Topic: HRM Needs in Strategic Types
2-54
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
71. (p. 92) What type of strategy is used by a firm that focuses on what it does best within
established markets?
A. Concentration
B. Internal growth
C. External growth
D. Divestment
With "concentration" strategy, a company attempts to focus on what it does best within its
established markets and can be thought of as "sticking to its knitting."
AACSB: Business Knowledge and Analytic Skills
BT: Comprehension
Difficulty: Easy
Learning Objective: 2-6
Topic: Directional Strategies
72. (p. 92) What type of strategy attempts to expand a company's resources or to strengthen its
market position through acquiring or creating new businesses?
A. Internal growth strategy
B. Diversification growth strategy
C. External growth strategy
D. Expansion growth strategy
The "external growth" strategy attempts to expand a company's resources or to strengthen its
market position through acquiring or creating new businesses.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-6
Topic: Directional Strategies
2-55
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
73. (p. 92) Which one of the following is NOT an internal growth strategy?
A. Vertical integration
B. Market development
C. Joint venture
D. Innovation
Companies attempting to integrate vertically or horizontally or to diversify are exhibiting an
"external growth" strategy, usually through mergers or acquisitions.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-6
Topic: Directional Strategies
74. (p. 92) Firms that seek to scale down their operations are following a(n):
A. concentration strategy.
B. internal growth strategy.
C. external growth strategy.
D. divestment strategy.
A "divestment," or downsizing, strategy is one made up of retrenchment, divestitures, or
liquidation. These strategies are observed among companies facing serious economic
difficulties and seeking to pare down their operations.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-6
Topic: Directional Strategies
2-56
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
75. (p. 92) Company Z's appraisals tend to be more behavioral because the company environment
is more certain and the behaviors necessary for effective performance are established. Which
strategy is this company following?
A. Concentration strategy
B. Internal growth strategy
C. External growth strategy
D. Divestment strategy
Appraisals in concentration strategy tend to be more behavioral because the environment is
more certain, and the behaviors necessary for effective performance tend to be established
through extensive experience.
AACSB: Group/Individual Dynamics in Organizations
BT: Application
Difficulty: Medium
Learning Objective: 2-6
Topic: Directional Strategies
76. (p. 92) For companies following a(n) _____ strategy, joint ventures require extensive training
in conflict resolution techniques because of the problems associated with combining people
from two distinct organizational cultures.
A. concentration
B. internal growth
C. external growth
D. divestment
Joint ventures require extensive training in conflict resolution techniques because of the
problems associated with combining people from two distinct organizational cultures.
AACSB: Group/Individual Dynamics in Organizations
BT: Comprehension
Difficulty: Medium
Learning Objective: 2-6
Topic: Directional Strategies
2-57
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
77. (p. 93) The most prevalent HR problem for firms facing external growth strategies is:
A. hiring the right people.
B. standardizing practices across the organization.
C. finding the right companies to purchase.
D. determining the fair-market price of acquisitions.
Many HRM programs face problems in integrating and standardizing practices across the
company's businesses since all the options for external growth consist of acquiring or
developing new businesses, and these businesses often have distinct cultures.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-6
Topic: Directional Strategies
78. (p. 93) Some companies now heavily weigh a firm's _____ before embarking on a merger or
acquisition.
A. operational efficiency
B. human capital
C. culture
D. infrastructure
According to a report by the Conference Board, "people issues" may be one of the major
reasons that mergers do not always live up to expectations.
AACSB: Group/Individual Dynamics in Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-6
Topic: Directional Strategies
2-58
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
79. (p. 95) Downsizing is likely to result in:
A. increased employee trust and commitment.
B. avoidance of a takeover.
C. increased innovation.
D. compensation plans tied to company performance.
Companies going through downsizing often develop compensation programs that tie the
individual's compensation to the company's success.
AACSB: Reflective Thinking Skills
BT: Comprehension
Difficulty: Medium
Learning Objective: 2-6
Topic: Directional Strategies
80. (p. 95) Which of the following desired outcomes of downsizing is most likely to be achieved?
A. Increased market share
B. Reduced expenses
C. Increased productivity
D. Reduced bureaucracy
According to the table 2.3 Effects of Downsizing on Desired Outcomes, reduced expenses is the
most likely desired outcome of downsizing to be achieved.
AACSB: Business Knowledge and Analytic Skills
BT: Comprehension
Difficulty: Hard
Learning Objective: 2-6
Topic: Strategy Implementation
2-59
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
81. (p. 95) Which of the following desired outcomes of downsizing is least likely to be achieved?
A. Increased innovation
B. Increased customer satisfaction
C. Avoidance of a takeover
D. Improved cash flows
According to the table 2.3 Effects of Downsizing on Desired Outcomes, improved cash flows is
the least likely desired outcome of downsizing to be achieved.
AACSB: Business Knowledge and Analytic Skills
BT: Comprehension
Difficulty: Hard
Learning Objective: 2-6
Topic: Strategy Implementation
82. (p. 95-96) Which of the following is NOT one of the results that can be achieved by an
organization's downsizing?
A. Changing an organization's culture
B. Dissolving labor union contracts
C. Getting rid of "dead wood"
D. Making way for fresh ideas
Downsizing often allows the company to "get rid of dead wood" and make way for fresh ideas
and is often a unique opportunity to change an organization's culture. In firms characterized by
antagonistic labor – management relations, downsizing can force the parties to cooperate and to
develop new, positive relationships.
AACSB: Business Knowledge and Analytic Skills
BT: Comprehension
Difficulty: Medium
Learning Objective: 2-6
Topic: Directional Strategies
2-60
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
83. (p. 95-96) Which of the following is an opportunity that downsizing provides for HRM?
A. The HRM function must "surgically" reduce the workforce by cutting only the workers who
are less valuable in their performance.
B. Boosting the morale of employees who remain after the reduction.
C. Building trust and maintaining communication with remaining employees.
D. Changing the organization's culture and making way for fresh ideas.
Downsizing often allows the company to "get rid of dead wood" and make way for fresh ideas
and is often a unique opportunity to change an organization's culture.
AACSB: Reflective Thinking Skills
BT: Comprehension
Difficulty: Medium
Learning Objective: 2-6
Topic: Directional Strategies
84. (p. 96) _____ strategies are the result of the rational decision-making process used by top
managers as they develop a strategic plan.
A. Emergent
B. Intended
C. Divergent
D. Accidental
Intended strategies are the result of the rational decision-making process used by top managers
as they develop a strategic plan.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-6
Topic: Emergent Strategies
2-61
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
85. (p. 96) Most strategies that companies espouse are:
A. concentration strategies.
B. directional strategies.
C. emergent strategies.
D. intended strategies.
Most strategies that companies espouse are intended strategies.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-6
Topic: Emergent Strategies
86. (p. 97) Which of the following strategies evolves from the grassroots of an organization and
can be thought of as what organizations actually do?
A. Concentration
B. Directional
C. Emergent
D. Intended
Emergent strategies, on the other hand, consist of the strategies that evolve from the grassroots
of the organization and can be thought of as what organizations actually do, as opposed to what
they intend to do.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-6
Topic: Emergent Strategies
2-62
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
87. (p. 97) Which of the following is essential if a company is to take advantage of emergent
strategies?
A. A formal organizational structure
B. A weak corporate culture
C. An externally-based compensation system
D. An effective communications system
HRM plays an important role in facilitating communication throughout the organization, and it
is this communication that allows for effective emergent strategies to make their way up to top
management since most emergent strategies are identified by those lower in the organizational
hierarchy.
AACSB: Business Knowledge and Analytic Skills
BT: Comprehension
Difficulty: Medium
Learning Objective: 2-6
Topic: Emergent Strategies
88. (p. 97) Most _____ strategies are identified by those lower in the organizational hierarchy,
where it is often the rank-and-file employees who provide ideas for new markets, new products,
and new strategies.
A. concentration
B. directional
C. emergent
D. intended
However, most emergent strategies are identified by those lower in the organizational
hierarchy.
AACSB: Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-6
Topic: Emergent Strategies
2-63
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
89. (p. 97) In which type of an organization do employees expand their capacity to achieve the
results that they desire?
A. Diversified organizations
B. Emergent organizations
C. Learning organizations
D. Strategic organizations
"Learning organization," is the idea in which people continually expand their capacity to
achieve the results they desire.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-6
Topic: Enhancing Firm Competitiveness
90. (p. 97) A company is in a constant state of _____ through monitoring the environment,
assimilating information, making decisions, and flexibly restructuring to compete in that
environment.
A. expanding
B. learning
C. exploring
D. evolving
For a company to have a unique ability to adapt to an ever-changing environment, it requires to
be in a constant state of learning through monitoring the environment, assimilating information,
making decisions, and flexibly restructuring to compete in that environment.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-6
Topic: Enhancing Firm Competitiveness
Essay Questions
2-64
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
91. (p. 72) Discuss four ways an HR department can ensure involvement with a firm's strategic
management process.
In the strategic management process, the human resource department should:
1. have input into the strategic plan;
2. have specific knowledge of the organization's strategic goals;
3. know what types of employee skills, behaviors, and attitudes are needed to support the
strategic plan; and
4. develop programs to ensure that employees possess these skills, behaviors, and attitudes.
AACSB: Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-1
Topic: Introduction
92. (p. 79-80) List the four levels of integration that can exist between the HR function and the
strategic management functions.
1. Administrative linkage
2. One-way linkage
3. Two-way linkage
4. Integrative linkage
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 2-4
Topic: Role of HRM in Strategy Formulation
2-65
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
93. (p. 79-80) Discuss the three steps in a two-way linkage between the HR function and the
strategic management functions.
1. Strategic planning team informs HR functions of various strategies the firm is considering.
2. HR executives analyze HR implications of various strategies, presenting results of analysis to
the strategy planning team.
3. The strategy plan is passed on to HR executives who develop programs to implement it.
AACSB: Group/Individual Dynamics in Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-4
Topic: Role of HRM in Strategy Formulation
94. (p. 80-81) Identify and explain the steps in formulating a strategy.
 Mission—The mission is a statement of the organization's reason for being; it usually
specifies the customers served, the needs satisfied and/or the values received by the customers,
and the technology used.
 Goals—Goals are what a company hopes to achieve in the medium- to long-term future; they
reflect how the mission will be operationalized.
 External analysis—The external analysis consists of examining the organization's operating
environment to identify the strategic opportunities and threats facing the firm.
 Internal analysis—The internal analysis attempts to identify the organization's strengths and
weaknesses.
 Strategic choice—The strategic choice is the organization's strategy; it describes the ways the
organization will attempt to fulfill its mission and achieve its long-term goals.
AACSB: Reflective Thinking Skills
BT: Comprehension
Difficulty: Medium
Learning Objective: 2-4
Topic: Strategy Formulation
2-66
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
95. (p. 83) List the five variables that determine success in strategy implementation, and indicate
those over which HRM has major responsibility.
Five variables include:
1. Organizational structure.
2. Job analysis and task design. (Major responsibility)
3. Selection, training and development of people. (Major responsibility)
4. Reward systems. (Major responsibility)
5. Information systems.
AACSB: Business Knowledge and Analytic Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 2-5
Topic: Strategy Implementation
2-67
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
96. (p. 85-90) Discuss the six HRM practices from which companies can choose for implementing
their strategy.
The six HRM practices are job analysis/design, recruitment/selection, training and
development, performance management, pay structure/incentives/benefits, and labor/employee
relations.
1. Job analysis is the process of getting detailed information about jobs. Job design addresses
what tasks should be grouped into a particular job.
2. Recruitment is the process through which the organization seeks applicants for potential
employment. Selection refers to the process by which it attempts to identify applicants with the
necessary knowledge, skills, abilities, and other characteristics that will help the company
achieve its goals.
3. Training refers to a planned effort to facilitate the learning of job-related knowledge.
Development involves acquiring knowledge, skills, and behavior that improve employees'
ability to meet the challenges of a variety of existing jobs or jobs that do not yet exist.
4. Performance management is used to ensure that employee' activities and outcomes are
congruent with the organization's objectives.
5. Pay systems, incentives, and benefits help a company elicit specific activities and levels of
performance from employees.
6. Finally, labor unions and employee relations can strongly affect a company's potential for
gaining competitive advantage.
AACSB: Reflective Thinking Skills
BT: Comprehension
Difficulty: Medium
Learning Objective: 2-5
Topic: HRM Practices
2-68
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
97. (p. 90) Compare and contrast Porter's generic strategies of cost leadership and differentiation.
Cost leadership—Emphasizes lowest cost leadership in the industry. The strategy is achieved
by constructing efficient, large-scale facilities; capitalizing on the experience curve; and by
controlling overhead expenses and costs in such areas as research and development, service,
sales force, and advertising.
Differentiation—Creates the impression that firm's products or services are different from
others in the industry. Offers unique features; creates brand image or offers unique customer
services. If a company is successful in differentiating its product, it will achieve above-average
returns, and the differentiation may protect it from price sensitivity.
AACSB: Value Creation Through the Integrated Production and Distribution of Goods, Services, and Information
BT: Comprehension
Difficulty: Medium
Learning Objective: 2-5
Topic: Strategic Types
98. (p. 92) Describe two of the four directional strategies that firms have used to meet objectives.
1. Concentration strategy focuses on what is done the best.
2. Internal growth strategies involve channeling company's resources toward building upon
existing strengths. Options generally include market development, product development,
innovation, and joint venture.
3. External growth strategies include integrating horizontally or vertically or diversifying.
4. Divestment strategy is one made of retrenchment, divestitures, or liquidation.
AACSB: Business Knowledge and Analytic Skills
BT: Comprehension
Difficulty: Easy
Learning Objective: 2-6
Topic: Directional Strategies
2-69
Full file at
http://testbankwizard.eu/Test-Bank-for-Human-Resource-Management-Gaining-a-Competitive-Advantage-7th-E
dition-by-Noe
99. (p. 92-93) Discuss the different challenges faced by HR in firms emphasizing internal vs.
external growth.
Internal growth—Requires a firm to constantly train and promote individuals and to hire their
replacements. Appraisals need to be based on knowledge of the new skills needed.
Compensation packages must focus on achieving growth targets. If involved with joint
ventures, resolving conflicts between different organizational cultures becomes important.
External growth—Consists of conflict resolution also, but the major problem is the integration
and standardization of HR programs from acquired organizations.
AACSB: Reflective Thinking Skills
BT: Comprehension
Difficulty: Medium
Learning Objective: 2-6
Topic: Directional Strategies
100. (p. 94-96) Discuss the challenges and opportunities (advantages) for HR in a downsizing, or
right-sizing, effort.
Challenges include:
1. "Surgically" reduce workforce by cutting only the workers who are less valuable in their
performance.
2. Boosting the morale of employees who remain after the reduction.
3. Building trust and maintaining communication with remaining employees.
4. Developing a compensation system that ties individual compensation to company
performance.
5. Establishing ownership and gainsharing plans.
Opportunities include:
1. Getting rid of dead wood.
2. Making way for fresh ideas.
3. Changing the organization's culture.
4. Demonstrating to top-management decision makers the role HRM plays in managing change
effectively.
AACSB: Reflective Thinking Skills
BT: Comprehension
Difficulty: Hard
Learning Objective: 2-6
Topic: Directional Strategies
2-70