Question 1

Typically, the sales function in an organization uses a tall, centralized structure to coordinate its activities.

Accepted Answer

Typically, the sales function in an organization uses a more decentralized structure to be closer to customers and adapt quickly to their needs, rather than a tall, centralized structure.

Question 2

The bureaucratic costs associated with managing unrelated diversification are much greater than those associated with related diversification.

Accepted Answer

False

Question 3

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

Accepted Answer

A mechanistic structure is hierarchical and emphasizes formal rules and procedures. This structure is often used by firms pursuing a low-cost strategy as it allows for efficient and standardized operations.

Question 4

Organizations following a low-cost business-level strategy typically produce a wide range of products to suit the needs of different groups of customers.

Accepted Answer

Organizations following a low-cost business-level strategy typically produce a narrow range of standardized products or services to achieve economies of scale and minimize production costs.

Question 5

The strategy of related diversification involves an organization entering a new domain in which it can use one or more of its existing core competences to create a low-cost or differentiated competitive advantage in that new domain.

Accepted Answer

This statement correctly describes the strategy of related diversification. The organization enters a new domain that is related to its existing business, using its existing core competences to create a competitive advantage. By leveraging its strengths and resources in this way, the organization can potentially gain a foothold in a new market or industry and achieve greater success.

Question 6

Typically, the manufacturing function in an organization uses an organic structure and decentralized decision-making.

Accepted Answer

Typically, the manufacturing function in an organization uses a more mechanistic structure with centralized decision-making to ensure efficiency, standardization, and quality control.

Question 7

A corporate-level strategy is a plan of action to strengthen an organization's functional and organizational resources, as well as its coordination abilities, in order to create core competences.

Accepted Answer

Corporate-level strategy focuses on the overall scope and direction of the corporation and the way in which its business units work together to achieve corporate objectives. It's more about what mix of businesses the corporation should own and how it should manage those businesses to maximize synergy and shareholder value, rather than strengthening functional and organizational resources directly.

Question 8

An organization's strategy is a specific pattern of decisions and actions that managers take to use core competences to achieve a competitive advantage and outperform competitors.

Accepted Answer

This statement accurately describes an organization's strategy.

Question 9

Developing competitive advantage increases an organization's ability to obtain scarce resources.

Accepted Answer

Developing a competitive advantage allows an organization to stand out from competitors and attract resources such as investment, talented employees, and customers. This increases their ability to obtain scarce resources, as they have a unique offering that sets them apart from others in the market.

Question 10

Organizations with a strategy of unrelated diversification are likely to use a conglomerate structure.

Accepted Answer

A conglomerate structure is characterized by a corporation that operates in multiple unrelated industries or markets, which aligns with the strategy of unrelated diversification. Therefore, organizations with this strategy are likely to use a conglomerate structure.

Question 11

A speedy response to market changes is not vital to the competitive success of an organization that is following a low-cost business-level strategy.

Accepted Answer

A low-cost business-level strategy focuses on minimizing costs to gain a competitive advantage. Speedy response to market changes is not a critical factor in this strategy.

Question 12

The more an organization pursues vertical integration the larger it becomes, and the bureaucratic costs associated with managing the strategy rise sharply.

Accepted Answer

Vertical integration involves an organization taking ownership or control over its supply chain, which typically leads to expansion and increased size. However, as the organization becomes larger, the burden of managing the various components of the supply chain also increases, resulting in higher bureaucratic costs.

Question 13

A functional-level strategy is a plan to combine functional core competences in order to position the organization so that it has a competitive advantage in its domain.

Accepted Answer

The answer of A functional-level strategy is a plan to...

Question 14

According to contingency theory, an organization's design should ensure that all the functions in the organization use the same organizational structure.

Accepted Answer

Contingency theory suggests that an organization's design should be matched to the specific circumstances and environment it operates in. Therefore, there cannot be a one-size-fits-all approach to organizational structure, and different functions within the organization may require different structures.

Question 15

Coca-Cola uses its marketing skills to defend its niche against PepsiCo. This is an example of a functional-level strategy.

Accepted Answer

The answer of Coca-Cola uses its marketing skills to defend...

Question 16

An organization's brand name is considered to be a functional resource.

Accepted Answer

An organization's brand name is considered to be an intangible asset rather than a functional resource. It represents the company's reputation, values, and identity, and helps to differentiate it from competitors. Brand names can have a significant impact on consumer perceptions and purchasing decisions, making it a valuable asset for organizations.

Question 17

The plant equipment possessed by a company is considered to be an organizational resource.

Accepted Answer

Plant equipment is a physical asset that belongs to a company and can be used to carry out business activities. As such, it is considered to be an organizational resource.

Question 18

Organizations pursuing differentiation business-level strategy generally operate in a simple, stable, and slow-moving environment.

Accepted Answer

Organizations pursuing differentiation business-level strategy generally operate in complex, dynamic, and fast-moving environments. This is because they often invest in research and development, marketing, and branding to create unique products or services that stand out from their competitors. This requires a deep understanding of customer needs and preferences, as well as staying ahead of industry trends and advancements.

Question 19

Business-level strategy is the responsibility of the top-management team.

Accepted Answer

Business-level strategy involves decisions about how to compete within a specific industry or market segment, and it is the responsibility of top-management to develop and implement this strategy.

Question 20

A strategy in which an organization takes over and owns its distributors is known as backward vertical integration.

Accepted Answer

Backward vertical integration occurs when a company acquires or merges with suppliers upstream in its production process, not distributors. Taking over distributors is known as forward vertical integration.

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