Deck 6: Designing Organizational Structure: Specialization and Coordination

Question 1

When a company must change a product's characteristics quickly to respond to changing customer preferences, a _ structure is most appropriate.

A)product team
B)multidivisional
C)geographic
D)functional

Answer 1

A

Question 2

A geographic structure organizes people according to:

A)the type of customer they serve.
B)the functions they perform.
C)what the people are required to produce.
D)the regional market they serve.

Answer 2

D

Question 3

Which of the following is a disadvantage of a network organization?

A)Higher bureaucratic costs
B)Lower quality
C)Mechanistic behavior
D)Motivation problems

Answer 3

D

Question 4

If control problems are due to the number and complexity of a company's products, which of the following structures is least appropriate?

A)Product team
B)Market
C)Product division
D)Multidivisional

Question 5

Transfer pricing is most commonly used in a structure.

A)multidivisional
B)product team
C)product division
D)geographic

Question 6

Bureaucratic costs are greatest in a structure.

A)multidivisional
B)product division
C)geographic
D)market

Question 7

A structure is a design that groups people together on the basis of their common expertise and experience or because they use the same resources.

A)team
B)core
C)product
D)functional

Question 8

Employees have two bosses in a structure.

A)product team
B)geographic
C)multidivisional matrix
D)multidivisional

Question 9

A product structure organizes people according to:

A)what the people are required to produce.
B)the functions they perform.
C)the type of customer they serve.
D)the regional market they serve.

Question 10

Success at Amazon.com has been due to the functional structure, which has provided all of the following except:

A)software development in the R&D department.
B)a narrow selection of books available in bookstores.
C)operations management in the information systems department.
D)planning in the strategic planning department.

Question 11

A computer manufacturer sells computers online to individual customers, and also has sales reps in the field that market the same computer systems to large businesses. Which of the following structures would be most appropriate for this organization?

A)Product division
B)Multidivisional
C)Product team
D)Market

Question 12

Which of the following is an advantage of a matrix structure?

A)A corporate staff oversees project teams.
B)Conflict over resources is reduced.
C)Teams are stable, which leads to core competences.
D)The importance of both cost and quality is recognized.

Question 13

What did BMO do in order to better manage IT investments?

A)Differentiated
B)Diversified
C)Centralized
D)Simplified
E)Both B and D

Question 14

A corporate headquarters staff is created in a structure.

A)product division
B)product team
C)multidivisional
D)matrix

Question 15

The IS department of a large organization decides to sell its information to the other divisions in order to better track profits. This is called .

A)an integrating mechanism
B)transfer pricing
C)multidivisional matrix
D)a communication problem

Question 16

With the new structure, General Motors realized all of the following except:

A)efficiency measured through statistics.
B)centralized decision- making.
C)added investment in profitable divisions.
D)increased morale.

Question 17

A _ _ structure provides for more integration between corporate and divisional managers and between divisional managers.

A)product division
B)complex
C)market
D)multidivisional matrix

Question 18

Chrysler moved from a _ structure to a structure.

A)functional/market
B)functional/geographic
C)division/product team
D)market/functional

Question 19

Which of the following mechanisms does a network structure use to coordinate activities?

A)Hierarchy of authority
B)Integrating roles
C)Teams
D)Contracts

Question 20

As The B.A.R. and Grille restaurant grew, the owners grouped people together on the basis of their common skills and expertise. This is called a .

A)hierarchy of authority
B)product structure
C)simple structure
D)functional structure

Question 21

A structure organizes divisions according to the requirements of the different locations in which an organization appears.

A)product
B)functional
C)simple
D)geographic divisional

Question 22

The creation of an internal labor market is an advantage of the structure.

A)functional
B)market
C)matrix
D)multidivisional

Question 23

Nike's product design and research function are located in Oregon and all the other production functions are outsourced to companies around the world. Nike uses a structure.

A)network
B)centralized
C)product team
D)geographic

Question 24

Employees move between teams most often in a _ structure.

A)product team
B)matrix
C)market
D)multidivisional matrix

Question 25

Deciding how much decision- making authority to centralize at corporate headquarters and how much to decentralize to the divisions can be a disadvantage of the structure.

A)multidivisional
B)matrix
C)functional
D)product division

Question 26

Integration is highest in a _ structure.

A)multidivisional matrix
B)product division
C)market
D)geographic

Question 27

As an organization grows, a functional structure does not create .

A)learning problems
B)customer problems
C)location problems
D)communication problems

Question 28

A geographic structure is most appropriate for which of the following companies?

A)An oil producer that sells gas, a commodity, in five different regions
B)A telecommunications company that makes technologically complex equipment
C)A retailer who specializes in clothing and operates in five different regions of the United States
D)A large manufacturer that wants to produce automobiles in Mexico and computers in Southeast Asia

Question 29

The matrix structure requires a level of vertical coordination and a level of horizontal coordination.

A)high/low
B)low/high
C)low/low
D)high/high

Question 30

Which of the following is not a divisional structure?

A)Product team
B)Geographic
C)Market
D)Matrix

Question 31

Which of the following is a difference between the product team and the matrix structures?

A)Employees move between teams in a product team structure but not in a matrix structure.
B)Employees move between teams in a matrix structure but not in a product team structure.
C)Employees have two bosses in a product team structure and only one boss in a matrix structure.
D)A matrix structure has a taller hierarchy than a product team structure.

Question 32

A food manufacturer is experiencing coordination problems between its frozen food division and its canned food division. The main control problem is that each product requires an entirely separate system for ordering supplies, packaging the product, and storing the product upon completion. Which structure would help solve these coordination problems?

A)Multidivisional
B)Matrix
C)Market
D)Product division

Question 33

Hallmark organized around categories of greeting cards such as Mother's Day cards and Christmas cards. This structure is called _.

A)product team
B)functional
C)simple
D)geographic

Question 34

A market structure organizes people according to:

A)the functions they perform.
B)the regional markets they serve.
C)what the people are required to produce.
D)the types of customers they serve.

Question 35

Core competences first emerge when a company adopts a _ structure.

A)multidivisional
B)product team
C)functional
D)product division

Question 36

An advantage of the multidivisional system is:

A)decreased control.
B)profitability cannot be evaluated.
C)corporate managers monitor divisional managers.
D)responsibility is unclear.

Question 37

Caterpillar needed to restructure its organization in order to reduce costs because of competition. Which structure did it use?

A)Geographic
B)Multidivisional matrix
C)Matrix
D)Product Team

Question 38

A multidivisional matrix structure:

A)has low bureaucratic costs.
B)has a flatter hierarchy than a multidivisional structure.
C)enhances coordination between corporate headquarters and the divisions.
D)is a design in which most divisions have a matrix structure.

Question 39

A company will be able to handle more complex product choices when it moves from a structure to a structure.

A)multidivisional/matrix
B)multidivisional/market
C)functional/product division
D)functional/geographic

Question 40

A regional company markets ice cream, milk, and frozen yogurt. A structure is the most appropriate structure for this firm.

A)market
B)product team
C)product division
D)multidivisional

Question 41

Most large U.S. companies use the structure.

A)product team
B)multidivisional matrix
C)global
D)multidivisional

Question 42

is the moving of a value creation activity that was done inside the organization to the outside, where it is done by another company.

A)Outsourcing
B)Networking
C)Decentralization
D)Production

Question 43

Disadvantages of the matrix structure include .

A)conflict over resources
B)duplication of functions
C)a tall hierarchy
D)lack of concern for cost

Question 44

Which of the following is an advantage of the multidivisional structure?

A)Bureaucratic costs are low.
B)An internal labor market is created.
C)Development time is fast due to decentralization.
D)Functional specialists from each division can easily share information with each other.

Question 45

Location problems occur in a structure.

A)multidivisional
B)geographic
C)functional
D)matrix

Question 46

If control problems are due to different types of customers purchasing similar products, which of the following structures would be most appropriate?

A)Product team
B)Multidivisional
C)Market
D)Product division

Question 47

Which of the following structures maximizes the use of employees?

A)Multidivisional matrix
B)Matrix
C)Functional
D)Geographic

Question 48

A product division structure:

A)allows a company to operate in several markets.
B)has centralized support functions at the top of the organization.
C)has a corporate headquarters staff.
D)has self- contained operating units.

Question 49

A construction equipment manufacturer sells tractors and other farming equipment to individual farmers, large agricultural cooperatives, food processors, and the government. The company operates solely in the Midwest region of the United States. Which of the following structures is most appropriate for this organization?

A)Multidivisional
B)Functional
C)Product division
D)Market

Question 50

A _ _ structure has specialists from support functions combined into product development teams that specialize in the needs of a particular kind of product.

A)task force
B)group
C)product team
D)functional

Question 51

When a company moves from a functional structure to a divisional structure, it generally:

A)increases vertical differentiation and increases horizontal differentiation.
B)does not change differentiation but increases integration.
C)increases vertical differentiation and decreases horizontal differentiation.
D)increases horizontal differentiation and reduces vertical differentiation.

Question 52

Wal- Mart needs to meet global customer needs, so it has a structure.

A)market
B)team
C)product division
D)functional

Question 53

Production, marketing, and sales have little opportunity to specialize in the needs of a customer group. This is a problem associated with a functional structure.

A)communication
B)customer
C)strategic
D)location

Question 54

All of the following are potential disadvantages of the multidivisional structure except:

A)high bureaucratic costs.
B)inability to monitor divisions.
C)transfer pricing problems.
D)conflict over resources.

Question 55

Specialist activities are duplicated in a structure.

A)multidivisional
B)functional
C)geographic
D)matrix

Question 56

can sometimes overcome control problems in a functional structure, making it unnecessary to move to a more complex structure.

A)Increasing horizontal differentiation
B)Improving integration
C)Increasing vertical differentiation
D)Diversification

Question 57

A functional structure is most appropriate for companies that:

A)sell many products to one type of customer.
B)sell many products in one location.
C)sell a small number of products to one type of customer.
D)sell one product in many locations.

Question 58

The move to a more complex structure is based on all design choices except:

A)increasing formalization.
B)increasing integration.
C)increasing vertical differentiation.
D)increasing horizontal differentiation.

Question 59

Which of the following is not an advantage of a network organization?

A)Ability to act in an organic manner
B)Ability to develop core competences
C)Lower production costs
D)Lower bureaucratic costs

Question 60

The boundaryless organization is characterized by all of the following except:

A)a matrix structure.
B)members who are transferred to projects as their services are needed.
C)the use of contracts.
D)the use of electronic means to connect people.

Question 61

In a product division structure, a centralized set of support functions service the needs of a number of different product lines.

Question 62

A structure has support functions placed in self- contained divisions.

A)team
B)multidivisional
C)functional
D)geographic

Question 63

A _ structure has functions grouped together according to the specific demands of products, markets, or customers.

A)differentiated
B)functional
C)divisional
D)simple

Question 64

Mellon Bank centralized its advertising, market research, and computer functions.

Question 65

A large U.S. company operated in several businesses, including computers, disk drives, financial services, and defense satellites. Each division was self- contained. However, due to an economic downturn and changing market conditions, the company sold its noncore businesses of financial services and defense satellites in order to focus only on
computer- related products. However, after making these sales, its costs were still high. What was the problem and how can it be resolved?

Question 66

Which of the following structures is the flattest?

A)Product team
B)Geographic
C)Market
D)Matrix

Question 67

Horizontal differentiation begins when a company adopts a structure.

A)global
B)matrix
C)product division
D)functional

Question 68

Each division within a product division structure can have a different organizational structure.

Question 69

Amazon.com focused on the best way to divide into functions the total task of creating value for customers.

Question 70

A high- tech company is likely to experience more disadvantages using a network structure than a low- tech company.

Question 71

Under the leadership of Alfred Sloan, General Motors:

A)eliminated the corporate level in the organization.
B)grouped businesses into self- contained divisions.
C)centralized support functions at the top of the organization.
D)centralized decision- making authority.

Question 72

People in a group can supervise each other in a functional structure.

Question 73

Decision- making is most decentralized in a structure.

A)product division
B)functional
C)geographic
D)product team

Question 74

X company is organized into five product divisions and has been successful in the past. However, due to changing conditions and increased competition, its market share has started to erode. What should this company do to maintain its competitive advantage?

Question 75

Because managers in each division hire managers and workers independently, the lack of an internal labor market is one disadvantage to a multidivisional structure.

Question 76

A matrix structure is characterized by .

A)vague authority relationships
B)fixed product teams
C)a tall hierarchy
D)low integration

Question 77

As a consultant to a technological company, you find in surveys that most employees are stressed in their jobs. Complaints include different people telling employees to do different things, and employees not having the opportunity to get to know coworkers. What is the problem and how can it be resolved?

Question 78

Which of the following is a difference between the product division structure and the multidivisional structure?

A)Divisions are independent in a multidivisional structure, but not in a product division structure.
B)Vertical differentiation is increased in the product division structure, but not in the multidivisional structure.
C)Support functions are centralized at the top of the organization in a multidivisional structure, but decentralized to the divisions in a product division structure.
D)Horizontal differentiation is increased in the multidivisional structure, but not in the product division structure.

Question 79

Employee roles are clearly defined in a matrix structure.

Question 80

Top managers spend so much time resolving everyday problems that they can't address long- term company issues. This is a _ problem associated with the functional structure.

A)strategic
B)measurement
C)customer
D)location