Deck 9: Creating Effective Organizational Designs

Question 1

Which of the following is the best way to design reward and evaluation systems?

A) They should be designed around shareholder priorities.
B) They should be designed around customer priorities.
C) They should be designed around profitability goals.
D) There is no best way to design reward and evaluation systems.

Answer 1

D

Question 2

A strategy of related diversification requires most firms to organize around geographical areas or product lines. This type of organizational growth leads to a(n)

A) divisional structure.
B) functional structure.
C) matrix structure.
D) international structure.

Answer 2

A

Question 3

Generally speaking, discussions of the relationship between strategy and structure strongly imply that

A) strategy follows structure.
B) structure follows strategy.
C) strategy can effectively be formulated without considering structural elements.
D) structure typically has a very small influence on a firm's strategy.

Answer 3

B

Question 4

If an international firm has a multidomestic strategy and a relatively high level of product diversity, the best choice for its organizational structure is

A) worldwide functional.
B) worldwide product division.
C) worldwide matrix.
D) international division.

Question 5

All of the following are advantages of a strategic business unit (SBU) type of organizational structure, except

A) divisions with similar products, markets, or technologies are formed into homogeneous groups that can achieve synergies.
B) divisional executives can respond quickly to market changes and opportunities.
C) planning and control by the corporate office is more manageable.
D) the corporate office is more removed from the individual divisions.

Question 6

Diversified Canadian conglomerate Weston has put its businesses into three primary SBUs, which are

A) bakeries, retail and food processing.
B) retail, shipping, and online sales through Loblaws.com.
C) baked goods, unbaked goods, and grains and oilseeds.
D) retail, wholesale, and manufacturing.

Question 7

Which of the following is an advantage of a functional type of organizational structure?

A) Decentralized decision-making enhances an organization-wide perspective across functions.
B) It facilitates the development of general management talent.
C) Pooling of specialists enhances coordination and control.
D) It is easy to establish uniform performance standards.

Question 8

Brinker International found that the diverse markets served by their bakeries and restaurants made it difficult focus on the unique aspects faced by each chain and consequently changed from a

A) simple structure to a functional structure
B) divisional structure to a matrix structure
C) functional structure to a divisional structure
D) virtual structure to an ambidextrous structure

Question 9

Which of the following is a disadvantage of a functional type of organizational structure?

A) Differences in functional orientation may impede communication and coordination.
B) Use of managerial and technical talent is inefficient due to pooling of expertise in functional areas.
C) Decision making is centralized at the top of the organization.
D) Managers tend to be overly concerned with long-term strategies that minimize the importance of functional area strengths.

Question 10

A simple structure is characterized by

A) high specialization and low centralization.
B) low specialization and high centralization.
C) low formality and low creativity.
D) high formality and low centralization.

Question 11

Complicated working relationships, intense power struggles, and excessive reliance on group processes are disadvantages of what type of organizational structure?

A) Divisional
B) Matrix
C) Holding company
D) Functional

Question 12

Important advantages of a holding company structure include

A) savings in personnel and overhead expenses associated with a small corporate office.
B) a high level of awareness at the corporate office of issues faced by individual divisions.
C) a high level of control of division executives by executives at the corporate level.
D) gaining synergistic benefits across businesses.

Question 13

When an organization with a simple structure increases its sales revenue and volume of outputs, it is most likely to develop a

A) divisional structure.
B) functional structure.
C) product-market structure.
D) geographic structure.

Question 14

Which of the following is considered to be an advantage of a matrix structure?

A) The layering of matrices
B) Increased clarity in reporting relationships
C) Increased responsiveness to the market
D) Fewer power struggles and reduced conflict

Question 15

All of the following statements about simple organizational structures are , except

A) small firms with a narrow product-market scope will adopt such a structure.
B) decision making authority is highly centralized.
C) there is little specialization of tasks.
D) creativity and individualism are rare.

Question 16

A divisional structure

A) is organized around functional area departments.
B) typically improves the performance of firms pursuing a strategy of vertical integration.
C) facilitates the development of general managers.
D) enhances centralized decision making.

Question 17

At Sharp Corporation, work is divided into units that specialize in production, marketing, research and development, and other management tasks. This is an example of a

A) simple structure.
B) functional structure.
C) divisional structure.
D) matrix structure.

Question 18

Which of the following is an advantage of a divisional type of organizational structure?

A) Efficient use of managerial and technical talent
B) An enhanced ability to respond quickly to changes in the external environment
C) A high degree of emphasis on long term performance
D) Uniformity in image and quality across divisions

Question 19

Functional structures are usually found in organizations where there is

A) high volume production.
B) unrelated product lines or service offerings.
C) very little vertical integration.
D) a strong need to decentralize decision making.

Question 20

All of the following are disadvantages of a divisional type of organizational structure, except

A) it can be very expensive compared to a functional organizational structure.
B) there is a strong tendency for divisions to focus on short-term performance.
C) there can be dysfunctional competition among divisions.
D) there is separation of strategic and operating control.

Question 21

A simple organizational structure may lead to problems such as unclear boundaries of authority and few career advancement options.

Question 22

Which of the following is not a strategic risk of outsourcing?

A) Loss of critical skills
B) Loss of cross-functional skills
C) Loss of control over a supplier
D) Loss of non-vital functions

Question 23

Complete the following sentence: "Virtual organizations ______________ whereas modular organizations ________________."

A) are usually permanent; are usually temporary
B) accept interdependent destinies; pursue collective strategies
C) pursue collective strategies; forfeit strategic control
D) give up part of their strategic control; retain full strategic control

Question 24

What is the name of the practice that many modular organizations use to grow?

A) Operational effectiveness
B) Outsourcing
C) Strategic leveraging
D) Strategic enabling

Question 25

All of the following describe disadvantages of virtual structures, except:

A) difficulty in individual and organizational knowledge sharing.
B) potential loss of operational control among partners.
C) loss of strategic control over emerging technology.
D) difficulty in determining where one company ends and another begins due to close interdependencies.

Question 26

Which of the following is not a boundaryless organizational design?

A) Virtual
B) Modular
C) Matrix
D) Barrier-free

Question 27

Which of the following is not a disadvantage of the barrier-free form of organization?

A) Lack of strong leadership can lead to coordination problems.
B) Democratic process can be time-consuming and difficult to manage.
C) Fewer internal barriers means fewer political issues to deal with.
D) If trust among employees is not sufficiently high, organizational performance may suffer.

Question 28

At Nucor, a successful steel producer, reward and incentive systems are reflected in its:

A) Senior management
B) Culture
C) Board of directors
D) Profitability

Question 29

One disadvantage of a functional structure is that differences in functional orientation may impede organization coordination and communication.

Question 30

In a simple structure where the owner-manager makes most of the important decisions, extensive rules and regulations are used to maintain order.

Question 31

The boundaries between levels in an organization's hierarchy are known as

A) vertical boundaries.
B) horizontal boundaries.
C) external boundaries.
D) geographic boundaries.

Question 32

Organizations are increasingly using teams for many reasons. The difference between a good team and an outstanding team has been found to be

A) the combined technical skills of the members.
B) similarities in the way team members solve problems.
C) the way team members treat each other.
D) similarities in the age and experience of team members.

Question 33

If an international firm has a global strategy and a relatively low level of product diversity, the best choice for its organizational structure is

A) worldwide functional.
B) worldwide product division.
C) worldwide matrix.
D) international division.

Question 34

There is no link between a firm's strategy and its structure.

Question 35

An organization that has both adaptability and alignment is known as

A) a matrix organization
B) an ambidextrous organization
C) a virtual organization
D) a boundaryless organization

Question 36

What type of organization is defined as "a central hub surrounded by networks of outside suppliers and specialists"?

A) Matrix
B) Virtual
C) Modular
D) Barrier-free

Question 37

A major disadvantage of adopting a divisional structure is the tendency for managers to focus on short-term objectives.

Question 38

To enhance integration and control of related product market activities, the functional structure minimizes centralization.

Question 39

The phrase that best defines a virtual organization is

A) a dot.com company.
B) a type of modular structure.
C) an organization that uses information technology to integrate different functions.
D) a continually evolving network of independent companies.

Question 40

Which of the following boundaries exist between the functional areas of an organization?

A) Vertical boundaries
B) Horizontal boundaries
C) External boundaries
D) international boundaries

Question 41

The strategic business unit (SBU) structure is also referred to as the conglomerate structure.

Question 42

An ambidextrous organization achieves both adaptability and alignment.

Question 43

The virtual organization's pursue a collective strategy that enables them to cope with environmental uncertainty through cooperation.

Question 44

The purpose of boundaryless forms of organizing is to facilitate the widespread sharing of knowledge and information across internal and external boundaries of the organization.

Question 45

The strategic business unit (SBU) and holding company structure are variants of the functional form of structure.

Question 46

Outsourcing relieves companies of the requirement to maintain skill levels needed to manufacture essential components.

Question 47

"Ambidexterity" involves the ability to manage two contradictory strategies faced by today's managers.

Question 48

When an organization is said to have 'alignment' this means that they have a clear send of how value is being created in the short term and how activities are integrated and properly coordinated.

Question 49

Modular companies can achieve rapid growth because they don't require large investments in fixed assets.

Question 50

The virtual type of organization is a network of independent companies linked together to share skills, costs, and access to one another's markets.

Question 51

The matrix structure attempts to combine the advantages of the functional and product-oriented structure.

Question 52

In a barrier-free organization, differences in skills, authority, and talent disappear.

Question 53

One of the risks of outsourcing is a loss of cross-functional skills.

Question 54

Because the modular form of organizing involves outsourcing vital functions, modular firms often forfeit full strategic control.

Question 55

How do structures change as organizations grow and mature? What are the dominant patterns of growth?

Question 56

A matrix organization is organized strictly along product lines.

Question 57

A major disadvantage of the matrix structure is that it duplicates the use of specialized personnel, equipment, and facilities.

Question 58

An advantage of the barrier-free form of organizing is that internal cooperation and shared objectives are not required for it to work.

Question 59

A worldwide product division structure is used when global strategies require that each division be responsible for overall efficiency and performance.

Question 60

Boundaryless structures replace traditional structures.

Question 61

Briefly describe the strategic business unit (SBU) organizational structure. What are the advantages of this form of organizing?

Question 62

Discuss how changes in today's workforce and the business environment have led to the increasing use of the boundaryless organizational design.

Question 63

Discuss the basic idea of the modular organizational structure.

Question 64

Describe the attributes of a matrix organizational structure. What are the disadvantages associated with using the matrix organizational form?

Question 65

Outline the three main contingencies that seem to influence the structure adopted by firms with international operations.

Question 66

Describe the attributes of a simple organizational structure. What are the advantages and disadvantages associated with using the simple organizational form?

Question 67

According to research by Charles O'Reilly and Michael Tushman, what are the four primary ways that companies structure their breakthrough projects?

Question 68

Outline the basic ideas behind the ambidextrous organizational design.

Question 69

What are the advantages and disadvantages associated with using the divisional organizational form?

Question 70

Discuss the uses and challenges of the barrier-free organizational structure.

Question 71

Explain why there is no "one best way" to design strategic rewards systems.

Question 72

Describe the attributes of a functional organizational structure.