Deck 6: Designing Organizational Structure: Specialization and Coordination

Question 1

Chrysler reduced its product development time by adopting a matrix structure.

Answer 1

False

Question 2

Balancing centralization and decentralization is a concern in a geographic structure.

Answer 2

True

Question 3

A matrix structure is a mechanistic structure.

Answer 3

False

Question 4

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

Question 5

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

Question 6

One disadvantage of the functional structure is that people are not able to supervise one another.

Question 7

Product team structures consist of groups of individuals whose allegiance is to specific products as opposed to specific functions.

Question 8

Corporate headquarters staff often plays an integrating role in the organization by helping managers in different divisions share information.

Question 9

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

Question 10

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 11

Multidivisional structures have support functions that are placed in self-contained divisions.

Question 12

Transfer pricing is used in a multidivisional structure so that one division can sell its product or service to another division.

Question 13

Liz Claiborne restructured by consolidating five divisions into two.

Question 14

A divisional structure groups functions according to the specific demands of products, markets, or customers.

Question 15

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

Question 16

Decision-making authority is more decentralized in a product team structure than in a product division structure.

Question 17

Because Amazon.com sells products in all parts of the world, it needed to move from a functional structure to a geographic structure in order to maximize efficiency.

Question 18

When a company moves from a functional structure to the more complex product division structure, a corporate headquarters staff is added.

Question 19

A product division structure enables a company to compete in more than one business.

Question 20

As organizations grow, they typically move to a more complex structure due to the inability to coordinate activities under a traditional functional structure.

Question 21

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

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

Question 22

Horizontal differentiation begins when a company adopts a ________ structure.

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

Question 23

TheB.A.R. and Grille restaurant has expanded its locations to now include several major U.S. cities. All major functions, such as pricing, menu design, and hiring will still be done by Bob and Amanda. Which structure should they move towards?

A) Geographic
B) Market
C) They do not need to change their structure because of these changes
D) Hybrid

Question 24

A multidivisional matrix is a structure that entails several divisions adopting the matrix structure.

Question 25

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) location
B) measurement
C) customer
D) strategic

Question 26

A hybrid structure is most effective when the market is too unstable to just use one structure.

Question 27

As TheB.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) product structure
B) functional structure
C) hierarchy of authority
D) simple structure

Question 28

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) core
B) product
C) functional
D) team

Question 29

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

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

Question 30

Location problems occur in a ________ structure.

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

Question 31

Employee roles are clearly defined in a matrix structure.

Question 32

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

Question 33

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

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

Question 34

A hybrid structure is for complex organizations that have many divisions and need to make use of several different structures.

Question 35

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

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

Question 36

TheB.A.R. and Grille restaurant has added a banquet room to serve large groups of customers. Which structure would they most likely move towards?

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

Question 37

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) customer
B) strategic
C) location
D) communication

Question 38

How did William McComb restructure Liz Claiborne's organization?

A) He created a network organization to outsource the major production functions.
B) He consolidated from five to two divisions.
C) He created product team structures to handle multiple product lines.
D) He moved them towards a multidivisional matrix structure.

Question 39

TheB.A.R. and Grille restaurant has expanded its menu to include Chinese food. This is causing some problems because the cooks don't know how to cook the food, and the waitstaff doesn't have the skills to serve many of the dishes, which require preparation at the table. They currently have a functional structure. Which structure should they move towards?

A) Network
B) Market
C) Matrix
D) Product

Question 40

One problem with the matrix structure is that employees must report to two different bosses.

Question 41

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

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

Question 42

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

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

Question 43

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

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

Question 44

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

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

Question 45

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 decision-making authority.
D) centralized support functions at the top of the organization.

Question 46

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

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

Question 47

A product division structure:

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

Question 48

A product 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.

Question 49

An advantage of the multidivisional system is:

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

Question 50

A functional structure is most appropriate for companies that:

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

Question 51

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

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

Question 52

A corporate headquarters staff is created in a ________ structure.

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

Question 53

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

Question 54

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

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

Question 55

A geographic structure organizes people according to:

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

Question 56

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) multidivisional
D) product division

Question 57

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

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

Question 58

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

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

Question 59

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) Product division
C) Market
D) Multidivisional

Question 60

Most large U.S. companies use the ________ structure.

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

Question 61

Numerous activities are duplicated in a ________ structure.

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

Question 62

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

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

Question 63

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

Question 64

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

Question 65

Which of the following structures is the flattest?

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

Question 66

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

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

Question 67

Chrysler moved from a ________ structure to a ________ structure.

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

Question 68

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

Question 69

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

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

Question 70

Which of the following is not a divisional structure?

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

Question 71

Bureaucratic costs are greatest in a ________ structure.

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

Question 72

Transfer pricing is most commonly used in a ________ structure.

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

Question 73

Decision making is most decentralized in a ________ structure.

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

Question 74

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

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

Question 75

A market structure organizes people according to:

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

Question 76

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

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

Question 77

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

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

Question 78

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) geographic
D) simple

Question 79

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

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

Question 80

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

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