Midterm Exam Questions

Fall 2014

ANSWER KEY - MTA

Faculty of Business Studies

Arab Open University

Time Allowed: 2 Hours

Please Read the Following Instructions:

 This exam will be marked out of 100 marks and is worth 30% of the total
mark of B325 course.
 Question 1 is a MANDATORY QUESTION. You have to choose
TWO questions from the other three questions.
 You are expected to refer to course materials, provide critical analysis,
and use diagrams, illustrations, and practical examples from your own
experience, where applicable.
 You should keep the organization of the exam paper neat, use good
English, and write clearly using good handwriting.
 Any work crossed through will NOT be marked.
 Any form of cheating will NOT be tolerated and will subject you to AOU
Cheating Policy.
(The answers are indicative. Students may attempt to formulate their answer
in a different way as long as they cover main ideas)

MANDATORY QUESTION

Question 1 (34 Marks)

The answer for this question is based on chapter 1 - “Managing to Collaborate”
book.

A world of collaboration is a world in which anything is possible.

A. Define collaborative advantage and collaborative inertia (10 Marks)

Collaborative Advantage is when collaboration between several bodies (industries,

agencies, governmental bodies, etc.) allows to achieve efficiency, growth, progress,
etc. reference their alliance (5 Marks).

Collaborative Inertia is when collaboration between two or more entities induces a

slow progress without achieving any tangible outcome (5 Marks).

B. Discuss the bases for collaborative advantage. Support your answer

with examples (24 Marks).

1- Access to Resources: (4 Marks)

• Organizations often collaborate if they are unable to achieve their objectives
with their own resources.
• Collaboration with other organizations allows to bring together different
resources including technology or expertise.
 • Example: Inter-Company collaboration over taking a product to the market
 One company provides the product and the other provides the access to
the market.

• Types of industries that choose this type of collaboration: very small

entrepreneurial businesses, large companies such as pharmaceutical
industry (where both activities – marketing and production are complex),
companies seeking new markets in new geographical areas

2- Shared Risk: (4 Marks)

• Organizations collaborate because the consequences of failure on a project
are too high for them to risk taking it on alone  They share the risk
• Example: Collaboration between cost-intensive research and development
organizations

3- Efficiency: (4 Marks)
• Governments have often seen private organizations as being more efficient
than public ones. The latter has promoted public-private partnerships
(collaboration).
• Four different perspectives on efficiency:
• Efficiency stems from the notion of economies of scale
• Efficiency related to outsourcing activities (example: companies may
outsource support activities such as cleaning and catering to other
companies who can gain economies of scale)
• Operational efficiency: many purchasing and supply chain alliances
are of this sort. Purchasing companies gain efficiencies by ensuring
that the delivery of product is done on time and as per the agreed
price. Supplying organizations gain efficiencies by having a relatively
predictable market.
• Coordination of services as to avoid duplication and thus ensure
efficiency
4- Coordination and Seamlessness: (4 Marks)
• As seen above, coordination is an important element to achieve efficiency.
• Coordination is the act of organizing, making different people or things work
together for a goal or effect to fulfill desired goals in an organization.
Coordination is a managerial function in which different activities of the
business are properly adjusted and interlinked.
• Yet, coordination and seamlessness are not always inter-related:
• Repetition (duplication of an activity)
• Omission (leaving gaps in activity)
• Divergence (diluting activity across a range of activities)
• Counter production (pursuing conflicting activities)
are pitfalls obstructing collaboration.

5- Learning: (4 Marks)
• Basis of collaboration  pursue joint activities  Mutual learning
• Example: staff from automobile industry acting as trainers for their suppliers
of components/parts

6- Moral Imperative: (4 Marks)

• The most important reason for being concerned in collaboration is a moral
one.
• Issues facing society (such as crime, drug, poverty, conflict, health promotion,
economic development, etc.) cannot be achieved if the organization acts
alone.
• Collaboration is essential to alleviate any problems at the organization,
industry, society and national levels.
CHOOSE TWO FROM THE THREE FOLLOWING QUESTIONS

Question 2 (33 Marks)

To improve the performance and powerfully drive behavior, we need to set

specific and challenging goals. Nevertheless, goals can have both positive and
negative outcomes.

The answer for this question is based on chapter 3 from “Organizational

Collaboration” book.

A. List the main negative outcomes of a specific and challenging goal (6

Marks; 1 each)

Goals outcomes are not always positive. Some negative side effects are associated with
goal setting such as:
- A narrow focus that neglects non-goal areas,
- Distorted risk preferences,
- Rise in unethical behavior
- Inhibited learning
- Corrosion of organizational culture
- Reduced intrinsic motivation
Consequently, goal setting needs to be regarded as a prescription-strength medication
that requires careful dosing, consideration of harmful side effects, and close
supervision.
As such, goal setting has been promoted as an answer to improve employee
motivation and performance in organization.

B. Discuss how a narrow goal can hinder an employee’s performance.

Support your answer with appropriate examples (14 Marks, 7 each).

With goals, people narrow their focus on the specific task required and hence
outcome expected. Such intense focus will “blind” people from other important issues
that appear to them unrelated to the goal

Tendency to focus too narrowly on goals is compounded when managers plan the
wrong course by setting the wrong goal (e.g. setting revenue instead of profit goals).
Consequently, setting the correct/appropriate goal is a difficult process.

 Goal setting may cause people to ignore important dimensions of performance

that are not specified by the goal-setting system
o Example: a group of students are requested to proof read a paragraph
that contains both grammatical and content errors. When students
were given instruction to correct grammar or content (specific goal),
the result was not that satisfying. Many grammar or content errors
were not corrected given that the focus was not general but specific
(either on grammar or on content) Yet, when students were requested
 to correct the paragraph as a whole with no specific indications (do
your best), students were more likely to correct both grammatical and
content errors  when no specific goal is set, people will look at the
general image which might give better results.
o The example provided is only indicative, students can provide other
examples.

 When managers set specific goals, they often fail to determine the broader
results of their directives. The presence of goals might lead employees to focus
on short-term gains and lose sight of potential devastating long-term effects on
the organization.

C. Discuss and explain how a challenging goal can induce unethical

behavior. Support your answer with appropriate examples (13 Marks).

 Goal setting is seen as a powerful motivation tool yet; it can lead and promote
unethical behavior.
 Goal setting can promote two different types of cheating behavior (unethical
behavior):
o When motivated by a goal, people may choose to use unethical
methods to reach it. Example: at sears, and in order to reach the
specific, challenging goal set by the administration, employees charged
customers for unnecessary repairs
o Goal setting can motivate people to report that they have met the goal
when in fact they fell short. Example: employees from a certain
organization who were driven to reach sales target reported sales that
never took place.
  Goal setting is not the only cause of employee unethical behavior. It is an
important ingredient but other aspects interfere as well:
o Lax oversight
o Financial incentives for meeting performance targets
o Organizational culture with a week commitment to ethics.
 The interplay between goal setting and organizational culture is extremely
important.
o An ethical organizational culture can restrain in the harmful effects of
goal setting, but at the same time, the use of goals can influence
organizational culture.
o Given that small decisions within an organization can have broad
implications for organizational culture, the aggressive goal setting
within an organization increases the likelihood of creating an
organizational climate ripe for unethical behavior.

Question 3 (33 Marks)

Discussion of purpose can be the main agenda item of a meeting or can take
place implicitly, perhaps over a prolonged period, as an inevitable implication
of the process seeking to reach agreement about what to do.

The answer for this question is based on chapter 6 or chapter 7 - “Managing to

Collaborate” book.

A. Discuss the aim ownership of a negotiation process (15 Marks).

Aim Ownership:
During negotiation, each member of the group uses their knowledge and
interpretation of what they take be the aims of the organization.
• Organization aims (5 Marks): Since collaborations are set up by individuals
acting on behalf of organizations, the aims of their organizations are likely to
be particularly relevant to the negotiation of collaborative purpose. Group
members may, or may not, presume to have complete knowledge of these
aims. The organizations aims may, or may not, connect to the original or
officially stated purpose of the collaboration leading consequently to the fact
that these aims are often viewed as part of the “hidden agenda”.

• Individual aims (5 Marks): Each group member also brings to the process of
negotiating the purposes of the collaboration, an individual set of personal
values and constraints, and hence aims. Some of the individual will influence,
and be influenced by collaboration and by any discussion with the group.
Some of them will be, as the organization aims, hidden from the rest of the
group.

• Aims owned by the group (5 Marks): the process of working and negotiating
together often leads to a sense of a group identity. Aims that are therefore
owned by group, and attributed to the group, may emerge.

B. Explain routes to achievement of these aims (18 marks)

• We can distinguish between: (1) aims that are to be achieved via

collaboration, and (2) those that an individual, an organization or even
another collaboration can pursue separately.
• When discussing organization and individual aims, we noted that a
subset of these would be related to the interests of the collaboration
• In practice, participants are likely to try to pursue only a subset of that
subset through the collaboration.
 • Others remain to be addressed through the organization alone or even
in an individual’s private capacity.
• Disentangling aims that do relate to a particular collaboration from
those that do not has become hence problematic.
• It is common for individual members to combine agendas across the
various organizational and inter-organizational initiatives that they
are involved in when they see connections between the various
agendas. Others who are not involved, do not see these related
agendas

Question 4 (33 Marks)

To support the structure and strategic nature of a supply chain network, a

focal actor tends to set the network strategy and coordinate its
implementation in a hierarchical manner.

The answer for this question is based on chapter 5 - “Organizational

Collaboration” book.

A. Explain the need for a focal actor in the supply chain network (9
Marks).

- Need for a focal firm

To support supply chain network structure and strategic nature, a focal actor tends to
set the network strategy and coordinate its implementation in a hierarchical manner.
This focal actor is typically recognized by the consumers as “responsible” for the
specific product. The managerial task of the focal actor is to deal with problems of
cooperation and coordination.
While the problems of cooperation arise from the conflicts of interests, the problems
of coordination originate from unawareness of the existing interdependencies or the
lack of one’s knowledge about the behavior of others (uncertainty). More specifically,
problems of cooperation and coordination can be viewed as a consequence of
distinctive goals that are established at the firm and network levels of collaboration.

B. Discuss the challenges and main responsibilities handled by a focal

actor (24 Marks).

- Challenge facing focal company and action to be taken: (12 Marks)

o Challenge facing the focal company: the structuring of the exchange
relationships so that its suppliers and customers remain in the
relationships and act in the best interests of all the parties.
o From the focal company’s perspective, it is necessary to develop a
strategic approach which accounts for the objectives of all the chain
actors and is agreed upon by them. Such an approach is defined as a
collective strategy. Collective strategies are seen as a type of strategy
implemented for and by collaborating organizations. Because
collaboration per se implies joint work of numerous actors to achieve
common goals, collective strategies can be subsumed as those aiming to
create a framework for the achievement of common goals.
 - In supply chain networks, adoption of the collective strategy is most often
initiated by the focal actor who goes beyond addressing its own goals and
proposes ways to achieve network goals.
- The focal firm has to take particular interest in the achievement of both levels
of goals; those of the network and those of the firm.
- Definition of the network level goals: The network level goals are defined as
the predefined set of outcomes which can be achieved only if all the network
actors work together to achieve them. Such goals can be regarded as common
to or shared by all the network members, and their achievement is the essence
of collaboration.

- Responsibilities of the focal firm: (12 Marks)

The focal firm is responsible not only for implementation of collective strategies but
also for setting network level goals. The focal firm has to ensure that all the members
pursue network-level goals.

o Network-level goals are not to be considered solely. The firm-level

goals are to be measured as well because networks involve
relationships among individual firms.
o Although effective functioning of the network requires goal
consensus among the members, each actor enters the network with
its own objectives. An attempt to achieve them can affect the
achievement of network level goals.
o Firm-level goals might include, for example, access to resources or
markets, increased sales, risk reduction, etc.
o Non-achievement of goals of the particular members can lead to the
network’s collapse if these members cannot be equally substituted.
For a network to perform effectively, it is very importance that the goals set at the
different levels are achieved to a satisfactory extent. The focal company has to
consider specific interrelationships that can occur between goals of the different
levels and can create conditions either favoring or constraining the achievement of
the whole network’s goals. Hence, the effectiveness of the supply chain network is
subject to influence by network goals.

END OF EXAM