LSUS CHEN - MBA 706 MODULE 4 EXAMINATION
PRACTICE TEST.
INTRODUCTION:
This comprehensive practice examination is designed to prepare LSUS MBA 706 students for the
Module 4 capstone assessment covering strategy execution, organizational design, and strategic
leadership. Aligned with Dr. Chen's textbook and current LSUS curriculum standards, this 75-
question assessment tests mastery of strategic implementation, governance structures,
performance measurement systems, and ethical leadership. The examination encompasses
critical concepts from corporate governance to organizational culture that determine whether
strategies succeed or fail in competitive markets.
DOMAIN 1: STRATEGY EXECUTION & IMPLEMENTATION (Questions 1-15)
Question 1: According to Kaplan and Norton (creators of the Balanced Scorecard), what
percentage of organizations fail to execute their strategies effectively?
A. Less than 25%
B. Approximately 50%
C. Over 90%
D. Nearly 100%
Answer: C
Rationale: Kaplan and Norton's research indicates that over 90% of organizations fail to execute
their strategies effectively due to vision barriers, people barriers, and misaligned resource
allocation. This statistic underscores why strategy execution is often considered more difficult
than strategy formulation.
Question 2: Which barrier to strategy execution occurs when employees do not understand the
organization's strategic goals?
A. People barrier
B. Vision barrier
C. Management barrier
D. Resource barrier
Answer: B
,Rationale: The vision barrier occurs when employees cannot connect their daily work to the
overall strategy, often resulting from poor communication cascading from senior leadership.
Without strategic clarity, employees continue routine activities rather than prioritizing strategic
initiatives.
Question 3: What is the primary difference between strategy formulation and strategy
execution?
A. Formulation is done by front-line employees; execution by top management
B. Formulation focuses on developing the plan; execution focuses on implementing it
C. Formulation is short-term; execution is long-term
D. Formulation requires external consultants; execution requires internal staff
Answer: B
Rationale: Strategy formulation involves analyzing the competitive environment and developing
strategic plans, while execution involves putting those plans into action through resource
allocation, structural alignment, and performance management systems.
Question 4: The "strategy-execution gap" refers to:
A. The time lag between planning and implementation
B. The disconnect between strategic plans and actual implementation results
C. The difference between intended and emergent strategy
D. The budget shortfall for strategic initiatives
Answer: B
Rationale: The strategy-execution gap describes the failure to translate strategic plans into
desired results, often caused by poor communication, misaligned incentives, inadequate
resources, or organizational resistance to change.
Question 5: Which budgeting approach requires managers to justify all expenses each period
based on strategic priorities rather than using previous budgets as a baseline?
A. Incremental budgeting
B. Zero-based budgeting
C. Activity-based budgeting
D. Flexible budgeting
, Answer: B
Rationale: Zero-based budgeting requires building budgets from zero each period, justifying
every expense based on strategic priorities rather than historical spending patterns. This
prevents automatic funding of legacy activities that may no longer support current strategy.
Question 6: The most common reason strategies fail is:
A. Poor strategy formulation
B. Poor execution
C. Insufficient market research
D. Competitor retaliation
Answer: B
Rationale: Research consistently shows that strategies most often fail due to poor execution
rather than flawed formulation. Organizations frequently develop sound strategies but lack the
organizational capabilities, culture, or leadership to implement them effectively.
Question 7: Which approach to strategy execution combines senior management direction with
front-line employee input?
A. Top-down approach
B. Bottom-up approach
C. Bilateral communication approach
D. Hierarchical approach
Answer: C
Rationale: The bilateral communication approach combines top-down direction from leadership
with bottom-up input from employees, creating buy-in while maintaining strategic alignment.
This hybrid model often proves most effective for complex strategy implementation.
Question 8: An action plan specifies:
A. Only the financial resources needed for strategic initiatives
B. Who, what, when, where, and how for strategic initiatives
C. The mission and vision of the organization
D. Competitor analysis and market positioning
PRACTICE TEST.
INTRODUCTION:
This comprehensive practice examination is designed to prepare LSUS MBA 706 students for the
Module 4 capstone assessment covering strategy execution, organizational design, and strategic
leadership. Aligned with Dr. Chen's textbook and current LSUS curriculum standards, this 75-
question assessment tests mastery of strategic implementation, governance structures,
performance measurement systems, and ethical leadership. The examination encompasses
critical concepts from corporate governance to organizational culture that determine whether
strategies succeed or fail in competitive markets.
DOMAIN 1: STRATEGY EXECUTION & IMPLEMENTATION (Questions 1-15)
Question 1: According to Kaplan and Norton (creators of the Balanced Scorecard), what
percentage of organizations fail to execute their strategies effectively?
A. Less than 25%
B. Approximately 50%
C. Over 90%
D. Nearly 100%
Answer: C
Rationale: Kaplan and Norton's research indicates that over 90% of organizations fail to execute
their strategies effectively due to vision barriers, people barriers, and misaligned resource
allocation. This statistic underscores why strategy execution is often considered more difficult
than strategy formulation.
Question 2: Which barrier to strategy execution occurs when employees do not understand the
organization's strategic goals?
A. People barrier
B. Vision barrier
C. Management barrier
D. Resource barrier
Answer: B
,Rationale: The vision barrier occurs when employees cannot connect their daily work to the
overall strategy, often resulting from poor communication cascading from senior leadership.
Without strategic clarity, employees continue routine activities rather than prioritizing strategic
initiatives.
Question 3: What is the primary difference between strategy formulation and strategy
execution?
A. Formulation is done by front-line employees; execution by top management
B. Formulation focuses on developing the plan; execution focuses on implementing it
C. Formulation is short-term; execution is long-term
D. Formulation requires external consultants; execution requires internal staff
Answer: B
Rationale: Strategy formulation involves analyzing the competitive environment and developing
strategic plans, while execution involves putting those plans into action through resource
allocation, structural alignment, and performance management systems.
Question 4: The "strategy-execution gap" refers to:
A. The time lag between planning and implementation
B. The disconnect between strategic plans and actual implementation results
C. The difference between intended and emergent strategy
D. The budget shortfall for strategic initiatives
Answer: B
Rationale: The strategy-execution gap describes the failure to translate strategic plans into
desired results, often caused by poor communication, misaligned incentives, inadequate
resources, or organizational resistance to change.
Question 5: Which budgeting approach requires managers to justify all expenses each period
based on strategic priorities rather than using previous budgets as a baseline?
A. Incremental budgeting
B. Zero-based budgeting
C. Activity-based budgeting
D. Flexible budgeting
, Answer: B
Rationale: Zero-based budgeting requires building budgets from zero each period, justifying
every expense based on strategic priorities rather than historical spending patterns. This
prevents automatic funding of legacy activities that may no longer support current strategy.
Question 6: The most common reason strategies fail is:
A. Poor strategy formulation
B. Poor execution
C. Insufficient market research
D. Competitor retaliation
Answer: B
Rationale: Research consistently shows that strategies most often fail due to poor execution
rather than flawed formulation. Organizations frequently develop sound strategies but lack the
organizational capabilities, culture, or leadership to implement them effectively.
Question 7: Which approach to strategy execution combines senior management direction with
front-line employee input?
A. Top-down approach
B. Bottom-up approach
C. Bilateral communication approach
D. Hierarchical approach
Answer: C
Rationale: The bilateral communication approach combines top-down direction from leadership
with bottom-up input from employees, creating buy-in while maintaining strategic alignment.
This hybrid model often proves most effective for complex strategy implementation.
Question 8: An action plan specifies:
A. Only the financial resources needed for strategic initiatives
B. Who, what, when, where, and how for strategic initiatives
C. The mission and vision of the organization
D. Competitor analysis and market positioning
