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244 PART 3 • STRATEGY IMPLEMENTATION

Key Terms and Concepts

Annual Objectives (p. 215) Furloughs (p. 237)
Avoidance (p. 220) Gain Sharing (p. 232)
Benchmarking (p. 230) Glass Ceiling (p. 242)
Bonus System (p. 233) Horizontal Consistency of Objectives (p. 217)
Conflict (p. 220) Just-in-Time (JIT) (p. 237)
Confrontation (p. 220) Matrix Structure (p. 226)
Culture (p. 235) Policy (p. 217)
Decentralized Structure (p. 222) Profit Sharing (p. 232)
Defusion (p. 220) Rational Change Strategy (p. 234)
Delayering (p. 229) Reengineering (p. 230)
Divisional Structure by Geographic Area, Product, Resistance to Change (p. 234)
Customer, or Process (p. 224) Resource Allocation (p. 219)
Downsizing (p. 229) Restructuring (p. 229)
Educative Change Strategy (p. 234) Rightsizing (p. 229)
Employee Stock Ownership Plans (ESOP) (p. 238) Self-Interest Change Strategy (p. 234)
Establishing Annual Objectives (p. 215) Six Sigma (p. 230)
Force Change Strategy (p. 234) Strategic Business Unit (SBU) Structure (p. 225)
Functional Structure (p. 222) Vertical Consistency of Objectives (p. 217)

Issues for Review and Discussion

1. List the five labor cost-saving activities that you believe would be most effective for
(1) Best Buy, (2) your university, and (3) the U.S. Postal Service. Give a rationale for
each company.
2. Define and give an example of furloughs as they could apply to your business school.
3. The chapter says strategy formulation focuses on effectiveness, whereas strategy implemen-
tation focuses on efficiency. Which is more important, effectiveness or efficiency? Give an
example of each concept.
4. In stating objectives, why should terms such as increase, minimize, maximize, as soon as
possible, adequate, and decrease be avoided?
5. What are four types of resources that all organizations have? List them in order of impor-
tance for your university or business school.
6. Considering avoidance, defusion, confrontation, which method of conflict resolution do
you prefer most? Why? Which do you prefer least? Why?
7. Explain why Chandler’s strategy-structure relationship commonly exists among firms.
8. If you owned and opened three restaurants after you graduated, would you operate from
a functional or divisional structure? Why?
9. Explain how to choose between a divisional-by-product and a divisional-by-region
organizational structure.
10. Think of a company that would operate best in your opinion by a division-by-services
organizational structure. Explain your reasoning.
11. What are the two major disadvantages of an SBU-type organizational structure? What are the
two major advantages? At what point in a firm’s growth do you feel the advantages offset the
disadvantages? Explain.
12. In order of importance in your opinion, list six advantages of a matrix organizational
structure.
13. Why should division head persons have the title president rather than vice president?
14. Is Six Sigma more a restructuring or reengineering management technique? Why?
15. Compare and contrast profit sharing with gain sharing as employee performance
incentives.
16. List three resistance to change strategies. Give an example when you would use each method
or approach.
17. In order of importance in your opinion, list six techniques or activities widely used to alter an
organization’s culture.