Questions Chapter 5

Directional Strategies
 True/False Questions

Question
Question stem Choice Reference
title

TF05.01 The mission attempts to capture the organization’s distinctive purpose. T Directional Strategies

TF05.02 The vision consists of the principles that are held dear by members of the F Directional Strategies
organization.
TF05.03 The vision creates a mental image of what leaders want the organization to achieve when it is T Directional Strategies
accomplishing its purpose or mission.
TF05.04 Strategic goals are those overarching end results that the organization pursues to T Directional Strategies
accomplish its mission and achieve its vision.
TF05.05 A complex environment makes it difficult to establish a clear purpose for an organization. F Develop A Statement of
Mission
TF05.06 An organizational mission is a broadly defined and enduring statement of purpose that T Mission: A Statement of
distinguishes a health care organization from other organizations of its type and identifies the Distinctiveness
scope of its operations in product, service, and competitive terms.

TF05.07 Mission statements do not reference the principal services delivered or products provided F Components of Mission
by the organization. Statements

TF05.08 A mission statement helps all employees focus their efforts on the most important T Building a Mission
priorities. Statement

TF05.09 In organizations with a planning staff, the development of a mission statement is a F Top-Level Leadership: A
task that should be assigned to the planning staff. Must for Mission
Development
TF05.10 The mission statement is relevant only to the present and is not relevant to the future. F Top-Level Leadership: A
Must for Mission
Development
TF05.11 An organizational vision is a description of the organization when it is fulfilling its T Develop a Statement of
purpose. Vision
TF05.12 Directional strategies are designed primarily to tell organizational members what they F Review Results of
must do to be successful in a complex environment. Situational Analysis
TF05.13 When the purpose or mission of an organization is understood the complexity of the T Develop A Statement of
environment can be reduced because decision makers can focus on fewer things. Mission
Question
Question stem Choice Reference
title

TF05.14 The history of an organization is its vision. F History and Vision

TF05.15 How a leader views the organizational environment is an important determinant of T Vision and t h e
vision. Environment
TF05.16 Creative tension is the means of reconciling an organization’s vision with its strengths and T Vision and Internal
weaknesses. Capacity

TF05.17 Pathfinding is the job of building a vision for an organization. T Health Care Strategists
as Pathfinders
TF05.18 A vision-led organization is guided by a philosophy that is obvious in the daily life of the F Health Care Strategists
organization. as Pathfinders

TF05.19 Strategic leadership has traditionally focused on mid-level management positions in an F Health Care Strategists
organization. as Pathfinders

TF05.20 A vision is coherent when it “fits” with other statements, including the mission and values. T Characteristics of Effective
Vision
TF05.21 An effective vision clarifies the picture of the future by stabilizing the strategic capabilities of the F Characteristics of Effective
organization. Vision

TF05.22 Values are the fundamental principles of organizations and people. T Develop a Statement
of Values as Guiding
Principles
TF05.23 It is important that managers, employees, and key stakeholders understand the values that are T Develop a Statement
expected in an organization. of Values as Guiding
Principles
Question
Question stem Choice Reference
title

TF05.24 Critical success factors are those things that organizations must do in order for the T Critical Success Factors
organization to achieve high performance. for the Service Category

TF05.25 A board process that involves both constructive and destructive debate will likely lead to a F Board Process: Missing
successful board. Link?

TF05.26 As part of managing strategic momentum, managers assess the performance of the T Managing Strategic
organization and try to determine whether the mission, vision, values, and goals are Momentum – Evaluating
appropriate. Directional Strategies

TF05.27 The board of directors should not be involved in the development of an organization’s F Practical Lessons for
mission, vision, and value statements. Health Care Strategic
Thinkers
TF05.28 An organization mission statement is an attempt to capture an organization’s purpose T Mission: A Statement
and commit it to writing. of Distinctiveness

TF05.29 A mission statement is in effect “carved in stone” and must never be changed or it will F Mission: A Statement
cause needless confusion among the leadership as well as employees. of Distinctiveness

TF05.30 Mission statements may be accurately looked upon as superordinate goals that stand T Mission: A Statement
the test of time and help top management navigate the through turbulent times of of Distinctiveness
change.

TF0531 Mission drift occurs when the mission of an organization is altered and the organization T Mission: A Statement
fades into areas it should not pursue. of Distinctiveness

TF05.32 Mission creep takes place when a health care organization takes on more and more T Mission: A Statement
activities to the point where the diversity of the activities becomes unmanageable. of Distinctiveness

TF05.33 Identifying the scope of operations in terms of services and markets is not an important F Characteristics of
characteristic of mission statements. Mission Statements

TF05.34 When an organization includes in a mission statement its commitment to high quality, T Components of
professional and compassionate care it is stating what it considers to be its desired Mission Statements
public image.
Question
title Question stem Choice Reference

TF05.35 A vision-led approach is a philosophy where leaders are committed to high levels of F Health Care Strategists as
performance that can be achieved because this level has been achieved in the past. Pathfinders

TF05.36 The keeper of the vision is ordinarily an executive who is a champion that communicates and T Health Care Strategists as
models the vision for others in the organization. Pathfinders

TF05.37 A vision communicates when it is shared and people believe in the importance of cooperation in T Characteristics of Effective
creating the future that managers, employees, and other stakeholders desire. Vision

TF05.38 It is important that visions empower patients first because there is time to empower employees F Characteristics of Effective
later after the patients become fully aware and supportive of the vision. Vision

TF05.39 Critical success factors are the benchmarks that organizations must accomplish if they are to T Critical Success Factors for
be successful in a particular industry. the Service Category

TF05.40 There is no reason for strategic goals to relate to critical success factors since they are F Develop Strategic Goals
anchored in the directional strategies.
 Multiple Choice Questions

Question Question stem Selections Choice Reference

title

MC05.01 Which of the following are a- External environment, internal environment, b Directional Strategies
directional strategies: strengths, and weaknesses.
b- Mission, vision, values, and strategic goals.
c- Service and structure analysis, competitive
analysis, service areas, and service categories.
d- Leadership, systems thinking, and strategic
mapping.
MC05.02 Which of the following are a- To make money. d Characteristics of Mission
common purposes or missions b- To deliver health services in as convenient a way as Statements
for organizations: possible.
c- To provide health care to indigent patients.
d- All of the above.
MC05.03 Which of the following is NOT a- Defines similarities with other health care a Characteristics of Mission
a characteristic of an organizations of its type. Statements
organizational mission b- Identifies the scope of operations.
statement: c- An enduring statement of purpose.
d- Identifies the scope of products and services.
MC05.04 Visions are about: a- Competitive analysis and the external c Develop AStatement of
environment. Vision
b- Stakeholder needs.
c- Ideals, standards, and desired future states.
d- Executive management and leadership.
MC05.05 Health care leaders acquire a - An appreciation of the history of the organization. d Origins of Vision
vision from: b- A perception of the opportunities present in the
environment.
c- An understanding of the strategic capacity of the
organization to take advantage of these opportunities.
d- All of the above.
Question Question stem Selections Choice Reference
title

MC05.06 The term “pathfinding” a- The means of identifying an organization’s b Health Care Strategists
is: mission. as Pathfinders
b- The job of building a vision for an organization.
c- External analysis.
d- A directional strategy.
MC05.07 Which of the following is a- Keeping the role of quality as a strategic goal before b Health Care Strategists
NOT a role of middle all employees. as Pathfinders
management in determining b- Selecting the CEO.
the strategic direction of an c- Being involved in the redefinition of
organization: organizational vision.
d- Appealing to the economic motives important to health
care employees.
MC05.08 Which of the following IS a a- Visions are permanent and do not need to be c Characteristics of
characteristic of an challenged or changed. Effective Vision
effective vision: b- Visions come alive through broad generalities.
c- Visions must make sense in the relevant
community, be flexible, and stand the test of time. If the
vision is pragmatically irrelevant, it will not inspire high
performance.
d- Visions are critical parts of control systems and
determine the quality of products, services, and
management practices of an organization.

MC05.09 Values and beliefs are a- External analysis. d Develop A

directional strategies that b- Defining internal strengths and weaknesses. Statement of Values
provide the focus and c- Product and service quality. as Guiding
parameters for: d- Strategic goals. Principles

MC05.10 Which of the following a- Do our mission, vision, and values fit the needs of our b Managing Strategic
questions would NOT be stakeholders? Momentum –
asked when evaluating b- Do our products and services meet the highest quality Evaluating Directional
directional strategies: standards? Strategies
c- Are we doing some things now that we should not be
doing?
d- Is the image of the organization what it should be?
Question Question stem Selections Choice Reference
title

MC05.11 Which of the following is NOT a a- They initially set all other activities in motion. d Why Directional
reason for the importance of b- They create the first signs of momentum. Strategies Are
directional strategies. c- They provide a sense of direction in decision making. Important
d- None of the above.

MC05.12 The primary function of an a- Capture the organization’s distinctiveness. a Mission: A Statement of
effective mission statement is b- Provide a sense of hope for the future. Distinctiveness
to: c- Make explicit the organization’s operating assumptions.
d- Elaborate the expected behavioral norms.

MC05.13 Mission statements remind a- What are we doing that we should continue to do but do in d Mission: A Statement of
health care strategists to ask a different way? Distinctiveness
which of the following b- What are we doing that we should continue to do?
questions about themselves c- What are we doing that we should stop doing?
and others: d- All the above.
MC05.14 Which of the following are best a- A public relations firm. c Top-Level Leadership:
prepared to develop an b- Organizational consultants. A Must for Mission
effective mission statement: c- Well informed organizational members. Development
d- Representatives from all areas of the organization.

MC05.15 Which of the following are a- Mission. b Develop A Statement of

about ideals, hope, standards b- Vision. Vision
and desirable future states: c- Values.
d- Strategic Goals.

MC05.16 Which of the following is NOT a a- History of the organization. d Origins of Vision
source of vision development b- Perception of the opportunities present in the
by health care leaders: environment.
c- Strategic capacity of the organization to take advantage of
opportunities.
d- All of the above can be a source of vision development.

MC05.17 Which of the following a- Vision statements should be strictly factual and not appeal d Characteristics of
statements is true about to emotions. Effective Vision
effective vision statements: b- Vision statements should always state the hope in
quantitative terms.
c- Vision statements must be structured and rarely changed.
d- Vision statements should be clear and about excellence.
Question Question stem Selections Choice Reference
title

MC05.18 Which of the following is NOT a- Risk involved in early entry to a market. b A Cautionary Note: The
related to the liability of b- Established reputations of pioneering organizations. Problem of Newness
newness: c- Steep learning curve in new markets.
d- Variable demand and limited financial outlays.

MC05.19 Which of the following is NOT a- Critical success factors are the same for each service c Critical Success
true regarding critical success category. Factors for the Service
factors: b- Critical success factors are similar for all members of a Category
strategic group.
c- Critical success factors do not vary from one service
category to another.
d- All the above statements are true regarding critical
success factors.
MC05.20 Strategic goals should: a- Be formulated by leaders but stated in terms that can be d Develop Strategic
understood by all employees. Goals
b- Be limited in number.
c- Be a link between critical success factors and unit
objectives.
d- Strategic goals should bell of the above.

MC05.21 Which of the following are a- Fiduciary responsibility mode – stewardship of assets. d Roles and
accepted modes of board of b- Strategic mode – collaborating with leaders to develop Responsibilities of
director governance: visions of the future. Boards of Directors (or
c- Generative mode – engaging in shared decision making. Trustees) in Strategic
d- All the above are accepted modes of board governance. Management

MC05.22 What is meant by CEO duality? a- CEO functions as chief executive officer and chief c Health Care
operation officer. Performance and the
b- CEO holds board membership on two outside boards of Usual Suspects
directors.
c- CEO functions as chief executive officer and chairman of
the board of directors.
d- CEO has worked her/his way up the organization and
understands the dual perspective of leaders and followers.
Question Question stem Selections Choice Reference
title

MC05.23 When boards of directors are a- Representative governing boards. b Health Care
formed primarily to provide b- Philanthropic governing boards. Performance and the
representation of diverse c- Corporate governing boards. Usual Suspects
stakeholders, and fund raising d- Interlocked boards.
is one of their primary duties, in
fund raising they are referred to
as:
MC05.24 Behaviors that lead to effective a- Engaging in constructive conflicts, especially with the d Board Process: Missing
board of director performance CEO. Link?
are: b- Understanding the appropriate level of board of director
involvement in decision making.
c- Addressing problems and decisions comprehensively.
d- All the above.

MC05.25 Which of the following are a- Do our directional strategies allow enough flexibility to d Managing Strategic
appropriate questions to ask allow for innovation? Momentum –
regarding directional b- Do our directional strategies relate to our critical success Evaluating Directional
strategies? factors? Strategies
c- Do our directional strategies reflect our desired public
image?
d- All the above are appropriate.
 Short Essay Questions

Question Question stem Rationale Reference

title

SE05.01 Why are mission, vision, The mission attempts to capture the organization’s distinctive purpose or Directional
values, and strategic goals reason for being. The vision creates a mental image of what leaders Strategies
termed “directional want the organization to achieve when it is accomplishing its purpose or
strategies”? mission. It is the organization’s hope for the future. Values are the
principles that are held dear by members of the organization. These are
guiding principles the managers and employees will not compromise
while they are in the process of achieving the mission and pursuing the
vision and strategic goals. Strategic goals are those overarching end
results that the organization pursues to accomplish its mission and
achieve its vision.
SE05.02 What are the differences The mission is developed from the needs of all the stakeholders – Mission: A Statement of
between a mission statement groups who have a vested interest in the success and survival of the Distinctiveness and
and a vision statement? organization. Vision, on the other hand, is an expression of hope. It is a Develop AStatement of
description of the organization when it is fulfilling its purpose. Vision Vision
involves creating compelling images of the future and produces a map
of what could be and, more important, what a leader wants the future to
be.
SE05.03 Why are values important to Values are the fundamental principles that organizations and people Develop a
an organization? stand for – along with the mission and vision, they make an organization Statement of
unique. Most often, discussions of organizational values relate to ethical Values as Guiding
behavior and socially responsible decision making. Ethical and social Principles
responsibility values are extremely important, not just to a single
hospital, HMO, or long-term care facility, but to all citizens. There are,
however, other values that may be specific to an organization and
characterize its members’ behavior in the past or the behavior to which
members collectively aspire.
Question Question stem Rationale Reference
title

SE05.04 How do strategic goals Strategic goals should relate to critical success factor activities, Develop Strategic Goals
relate to critical success providing more specific direction in accomplishing the mission and
factors? vision. At the same time, strategic goals should be broad enough to
allow considerable discretion for managers to formulate their objectives
for individual units. The most appropriate strategic goals possess the
following characteristics:
1. Strategic goals should relate specifically to activities that are critical
to accomplish the mission. Strategic goals that focus on activities which
are not mission critical have the potential to divert leadership attention
and employee energy.
2. Strategic goals should be the link between critical success factors
and strategic momentum (carrying out unit objectives).
3. Strategic goals should be limited in number. When too many
goals are pursued, the “trivial many” rather than the “critical few”
activities are accomplished.
4. Strategic goals should be formulated by leaders but should be
stated in terms that can easily be understood and appreciated by
everyone in the organization.
SE05.05 Why is it important for an There is a tendency for decision makers to attempt to do too many Critical Success Factors
organization to develop a list things at one time. In many cases if decision makers do not carefully for the Service Category
of its critical success manage their time they will be distracted by the hundreds of tasks that
factors? seem critical to success (e.g. checking e-mail, reading routine reports,
talking on the phone, etc.) but in reality, are not very consequential in
terms of the success of the organization. It is important for decision
makers to think about and identify those relatively few things in their
service category that genuinely make a difference in the success and
failure of the organization. This is where critical success factors come in.
Great care should be taken in identifying and keeping an eye on the
success factors.
SE05.06 What is meant by the liability Health care strategists rightly place a great deal of emphasis on being A Cautionary Note: The
of newness? innovative with regard to the services offered and the ability to offer Problem of Newness
existing services in new and creative ways. The rush to enter new
markets is certainly a key to innovation in health care as well as other
industries. However, being the first in a service category is not without its
dangers. Pioneering organizations face increased uncertainty and risk,
must be committed to a relatively longer learning curve, and often
required larger financial outlays than originally expected.
Question Question stem Rationale Reference
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SE05.07 What are some of the An effective vision statement must consider a number of things. First, it Origins of Vision
important factors that must take into account the history of the organization. This history may
influence the formulation include a number of things that can affect the organization’s hope for
of an effective vision the future – the philosophy of the founder, the good and bad times of
statement? the organization and numerous other things. The environment the
organization faces will also influence the formulation of the vision. If the
environment seems uncertain and dismal the aspiration level in the
vision may be reduced. The internal capacity of the organization will
also affect the vision. If resources are scarce the vision may reflect
lower hope for the future whereas if the resources are great the
organization may aspire to even greater levels of attainment.
SE05.08 Why are values sometimes Values are the fundamental principles that organizations and people Develop a Statement of
referred to as guiding stand for – along with the mission and vision, they shape organizational Values as Guiding
principles? culture. Most often, discussions of organizational values relate to ethical Principles
behavior and socially responsible decision making. Ethical and social
responsibility values are important to all organizations and stakeholders.
Values are the behavioral norms that determine if managerial behavior
is right or wrong, proper or improper, and so on. For this reason, values
are frequently referred to as guiding principles because they guide the
behavior of organizational members. Values should be more than slick
public relations statements. “Talking the talk” is insufficient; “walking the
walk” is what matters when it comes to values.

SE05.09 How are strategic goals Once strategic leaders are confident that the mission, vision, and values Develop Strategic Goals
related to mission, vision, are well formulated, understood, communicated, and expressed in writing,
and values? they are able to focus on the activities that will make the most progress
toward accomplishing the mission and moving the organization toward a
realization of its vision – its strategic goals. Well-written mission
statements are the beginning point for strategic goal setting. Goal setting
should be focused on those areas that are critical to mission
accomplishment.
Question Question stem Rationale Reference
title

SE05.10 What are the four modes of Four modes of governance have been applied to boards of directors. Roles and Responsibilities
governance as applied to First is the fiduciary responsibility mode or stewardship of assets; the of Board of Directors (or
boards of directors? second is the strategic mode which involves collaborating with Trustees) in Strategic
management to develop a vision for the future; the third is the generative Management
mode where the board engages in shared creative thinking to make
sense of data available to decision makers, and the fourth is the idea of
the progressive board that focuses on contributions of individual
members and is cohesive and comprehensive. In the strategic mode,
boards of directors or boards of trustees are responsible for making
policies – providing general guidelines under which the organization will
operate. Therefore, boards are important in formulating the mission,
vision, and value statements of the organization and, depending on the
nature of the membership boards can represent very complex issues in
organizational governance.