Deck 8: Organizational Design and Strategy in a Changing Global Environment

Question 1

Hitachi pursues a related diversification strategy.

Answer 1

True

Question 2

A firm pursuing a low-cost strategy will likely have a mechanistic structure.

Answer 2

True

Question 3

Communication flows laterally between divisions and vertically between corporate headquarters and divisions in a company that pursues an unrelated diversification strategy.

Answer 3

False

Question 4

A company will have more manufacturing locations if it pursues a global strategy instead of an international strategy.

Question 5

An organization that pursues a transnational strategy will rely on centralized decision making.

Question 6

A company can sometimes avoid direct competition with the low-cost leader or dominant differentiator by pursuing a focus strategy.

Question 7

A company pursuing unrelated diversification has many coordination problems because divisions refuse to share information with each other.

Question 8

Developing core competences enables an organization to attract new resources.

Question 9

A global expansion strategy involves choosing the best strategy to expand to overseas markets.

Question 10

An organization's brand name is considered to be an organizational resource.

Question 11

To successfully pursue a transnational strategy, an organization must create a global network.

Question 12

A multidomestic strategy would have divisions that need few integrating mechanisms.

Question 13

________ are the skills and abilities in value creation activities that allow a company to achieve superior efficiency, quality, innovation, or customer responses.

A) Rites of enhancement
B) Core competences
C) Ceremonies
D) Environmental contingencies

Question 14

The skills of Microsoft's software design group are an example of ________.

A) organizational culture
B) coordination abilities
C) functional resources
D) strategic planning

Question 15

Value creation at the global levels begins when an organization transfers a core competence to an overseas market.

Question 16

The need for complex integrating mechanisms, such as teams, is low in organizations that pursue a multidomestic strategy.

Question 17

A multidivisional matrix structure is appropriate for a company pursuing unrelated diversification.

Question 18

It would be pointless in a conglomerate structure to try and develop common corporate cultures.

Question 19

Google achieved success primarily because of its functional strategy of providing information at the lowest cost.

Question 20

________ is the pattern of decisions and actions that managers take to use core competences to achieve a competitive advantage and outperform competitors.

A) Centralization
B) Innovation
C) Strategy
D) Value creation

Question 21

All of the following are selected at the business level except ________.

A) a low-cost strategy
B) organizational domain
C) a differentiation strategy
D) a diversification strategy

Question 22

A U.S. auto manufacturer establishes plants in Europe and in Asia. This is an example of ________.

A) global expansion
B) unrelated diversification
C) vertical integration
D) related diversification

Question 23

Developing core competences is the direct responsibility of ________.

A) the CEO
B) corporate managers
C) divisional managers
D) functional managers

Question 24

________ suggests that each function should create a structure to match its resources.

A) Contingency theory
B) Transaction cost theory
C) Strategic choice
D) Resource dependence theory

Question 25

A source of competitive advantage is ________.

A) uncertainty
B) an effective culture
C) centralized decision making
D) rules and standard operating procedures

Question 26

Which of the following functions would be responsible for implementing a just-in-time inventory system?

A) Materials management
B) Marketing
C) Manufacturing
D) R&D

Question 27

Land is an example of ________ .

A) shareholder's equity
B) an organizational resource
C) an intangible asset
D) a functional resource

Question 28

Procter & Gamble combined the skills of marketing, manufacturing, and product development. This is an example of ________.

A) coordination abilities
B) managerial expertise
C) decentralization
D) flattening the hierarchy

Question 29

Taking core competencies and combining them to exploit opportunities overseas is part of ________.

A) functional-level strategy
B) global expansion strategy
C) corporate-level strategy
D) business-level strategy

Question 30

Which of the following companies will most likely have a mechanistic structure?

A) A medical equipment manufacturer that has a core competence in manufacturing
B) A pharmaceutical company that has a core competence in R&D
C) A soft-drink company that has a core competence in marketing
D) A telecommunications company that operates in a dynamic environment

Question 31

Traditionally, manufacturing concentrated on all of the following except:

A) transferring control to managers.
B) creating a mechanistic hierarchy.
C) decreasing the level of skill required to perform a task.
D) increasing mutual adjustment.

Question 32

Taking core competencies and combining them to exploit opportunities in the environment is part of ________.

A) corporate-level strategy
B) business-level strategy
C) global level strategy
D) functional-level strategy

Question 33

Honda takes its strength in engine production and uses it to produce cars, motor bikes, and lawnmowers, creating value in different markets. This is an example of ________ strategy.

A) marketing
B) corporate-level
C) business-level
D) development

Question 34

________ strategy is a plan to use and develop core competences so that the organization can not only can protect and enlarge its domain but can also expand into new domains.

A) Global level
B) Functional-level
C) Business-level
D) Corporate-level

Question 35

McDonald's developed breakfast items such as the Egg McMuffin that could be produced quickly. This is an example of a(n) ________.

A) craft
B) core competence
C) innovation
D) invention

Question 36

Which of the following core competences is most difficult to imitate?

A) Reputation
B) Coordination abilities
C) Top-management skills
D) R&D expertise

Question 37

Organizational strategy is formulated at all of the following levels except at the ________.

A) functional level
B) individual level
C) corporate level
D) business level

Question 38

Which of the following activities can be a source of both a low-cost advantage and a differentiation advantage?

A) Creating new products
B) Targeting customer groups
C) Forming long-term relationships with suppliers
D) Developing innovative training programs

Question 39

Coordination abilities refer to:

A) the attributes that provide a competitive edge.
B) linking functional and organizational resources.
C) planning the organization's strategy.
D) the skills possessed by functional personnel.

Question 40

Mutual adjustment is the primary mechanism used to control activities in which of the following departments?

A) R&D
B) Sales
C) Manufacturing
D) Materials management

Question 41

Which of the following strategies generally requires the most integration?

A) Long-term contracts
B) Differentiation
C) Focus
D) Low-cost

Question 42

________ is the entry into a new domain that is related in some way to an organization's domain.

A) Unrelated diversification
B) Vertical integration
C) Differentiation
D) Related diversification

Question 43

________ is a strategy in which an organization takes over and owns its suppliers or distributors.

A) Vertical integration
B) Environmental scanning
C) Market penetration
D) Differentiation

Question 44

Which function typically has the most organic structure?

A) R&D
B) Materials management
C) Sales
D) Manufacturing

Question 45

The primary disadvantage of vertical integration is:

A) decreased product quality.
B) loss of control over inputs.
C) increased bureaucratic costs.
D) increased number of opportunistic suppliers.

Question 46

________ can help an organization overcome subunit orientations.

A) A mechanistic structure
B) Organizational culture
C) A low-cost strategy
D) A functional structure

Question 47

A focus strategy is a(n) ________.

A) business-level strategy
B) corporate-level strategy
C) individual-level strategy
D) functional-level strategy

Question 48

Which of the following is not a corporate-level strategy?

A) Global expansion
B) Market penetration
C) Related diversification
D) Vertical integration

Question 49

A ________ strategy is a plan whereby an organization produces high-priced, quality products aimed at particular market segments.

A) low-cost business-level
B) global
C) differentiation business-level
D) environmental

Question 50

American Home Products and Monsanto called off their merger because:

A) their products were different.
B) their cultures were too different.
C) they pursued a low-cost strategy.
D) they had a short-term focus.

Question 51

Which structure is most appropriate for a differentiated company that has a competitive advantage based on fast customer responsiveness?

A) Product division
B) Functional
C) Geographic
D) Product team

Question 52

Wal-Mart uses a ________ strategy to achieve a competitive advantage.

A) market penetration
B) low-cost business-level
C) diversification
D) differentiation

Question 53

McDonald's core competences in manufacturing, marketing, and materials management create a competitive advantage over rivals Burger King and Wendy's. This is an example of a(n) ________ strategy.

A) business-level
B) value creation
C) educational
D) environmental

Question 54

Quick responsiveness to market changes is least critical for a company:

A) pursuing a focus strategy.
B) pursuing a low-cost strategy.
C) using strategic alliances to develop new technology.
D) pursuing a differentiation strategy.

Question 55

Which of the following strategies most helps a company to avoid the problem of opportunistic suppliers?

A) Product development
B) Global expansion
C) Vertical integration
D) Related diversification

Question 56

Which of the following structures fosters a low-cost culture?

A) Mechanistic structure
B) Matrix structure
C) Market structure
D) Organic structure

Question 57

Amazon.com used a ________ strategy.

A) differentiation
B) low-cost/differentiation
C) low-cost
D) computer

Question 58

A shoe manufacturer acquires the retail stores that sell its shoes. This is an example of ________.

A) backward development
B) market development
C) related diversification
D) forward vertical integration

Question 59

Which function typically has the most mechanistic structure?

A) R&D
B) Human resources
C) Sales
D) Manufacturing

Question 60

Which structure is most appropriate for an organization that pursues a low-cost strategy?

A) Geographic
B) Functional
C) Product team
D) Multidivisional

Question 61

Related diversification involves all of the following except:

A) exploiting a core competence in a new domain.
B) having a high level of integration.
C) maintaining small corporate headquarters staff.
D) having the potential for divisional conflicts over resources.

Question 62

Which of the following strategies has the highest bureaucratic costs?

A) Vertical integration
B) Unrelated diversification
C) Joint venture
D) Related diversification

Question 63

Which of the following structures is characterized by a small corporate headquarters staff?

A) Product division
B) Conglomerate
C) Multidivisional matrix
D) Multidivisional

Question 64

Which of the following corporate-level strategies has the lowest bureaucratic costs?

A) Unrelated diversification
B) Vertical integration
C) Differentiation
D) Related diversification

Question 65

The main disadvantage of a multidomestic strategy is:

A) customized products are available.
B) core competences are shared.
C) core competences are not shared.
D) local responsiveness is enhanced.

Question 66

Hitachi manages its 28 divisions by:

A) using a mechanistic, centralized structure.
B) promoting economical values.
C) using complex integrating mechanisms, such as integrating roles.
D) Using a conglomerate structure to control division activities.

Question 67

A computer manufacturer uses its competence in product design to produce laser printers. This company is pursuing which of the following strategies?

A) Unrelated diversification
B) Vertical integration
C) Related diversification
D) Product development

Question 68

A retail clothing chain buys a real estate business and an investment banking firm. Which of the following structures is most appropriate for this organization?

A) Multidivisional matrix
B) Market
C) Product division
D) Conglomerate

Question 69

Which of the following strategies involves entering a completely new domain?

A) Market penetration
B) Product development
C) Market development
D) Unrelated diversification

Question 70

An international strategy is most appropriate when pressures for global integration are and pressures for local responsiveness are:

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

Question 71

Which of the following strategies enables a company to obtain the strongest differentiation advantage in foreign markets?

A) Multidomestic
B) Unrelated diversification
C) Global
D) International

Question 72

An organization operating in more than one industry will use a ________ structure.

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

Question 73

Which of the following structures is a variant of the multidivisional structure?

A) Product division
B) Conglomerate
C) Matrix
D) Product team

Question 74

A multidomestic strategy is characterized by all of the following except ________.

A) global learning
B) relatively low bureaucratic costs
C) high local responsiveness
D) decentralized decision making

Question 75

Which of the following strategies can an organization use to respond to pressures for local responsiveness?

A) International
B) Unrelated diversification
C) Global
D) Multidomestic

Question 76

Which of the following core competences will a company use to pursue unrelated diversification?

A) Engineering expertise
B) Top-management's ability to efficiently control a group of organizations
C) Manufacturing and human resource core competences
D) Brand name

Question 77

A ________ strategy is often used for situations in which both local responsiveness and cost reduction are needed.

A) product development
B) contingency
C) transnational
D) diversification

Question 78

In a ________, each business is placed in a self-contained division and there is no contact between divisions.

A) functional
B) hierarchy
C) conglomerate structure
D) matrix

Question 79

Unrelated diversification is characterized by all of the following except:

A) restructuring inefficient units.
B) relatively high bureaucratic costs.
C) evaluating divisions on a profit basis.
D) maintaining a small corporate headquarters' staff.

Question 80

The drug company Schering-Plough struggled globally because:

A) The global matrix structure was overly bureaucratic.
B) The integrating mechanisms used were too simple.
C) The multidomestic strategy led to duplication of activities.
D) FDA regulations hampered competition in the industry.