Question 1

The fewest integrative devices are used in the ____ structure.
A) simple
B) competitive multidivisional
C) SBU
D) network

Accepted Answer

The answer of The fewest integrative devices are used in...

Question 2

A firm pursuing a related-constrained diversification strategy would typically need all of the following EXCEPT
A) centralization of some organizational functions for the sake of coordination.
B) frequent, direct contact between division managers.
C) division managers' rewards based on division financial performance.
D) temporary teams or task forces formed around specific projects.

Accepted Answer

The answer of A firm pursuing a related-constrained diversification strategy...

Question 3

Which of the following is a TRUE statement about implementing corporate-level strategies and effective organizational structures?
A) Firms pursuing a related-linked strategy should implement a competitive structure with a competitive culture and centralized strategic planning activities.
B) Firms pursuing an unrelated diversification strategy should use an SBU structure with a small corporate staff, emphasize the R&D function, and integrate divisions to achieve synergies.
C) Firms pursuing a related-linked strategy should use an SBU structure, emphasize interdependence among divisions, and manage the strategic planning function from the central office.
D) Firms pursuing a related-constrained strategy should implement a cooperative structure, use integrative devices to link divisions, centralize the R&D function, and emphasize sharing.

Accepted Answer

The answer of Which of the following is a TRUE...

Question 4

The ____ structure is an organizational structure that combines both functional specialization and business product or project specialization.
A) functional
B) worldwide geographic area
C) network
D) matrix

Accepted Answer

The matrix structure combines both functional specialization and business product or project specialization. In this structure, employees are grouped based on their specialized functional area and also work on specific projects or products. This allows for more flexibility and cross-functional collaboration within the organization.

Question 5

In the ____ structure hierarchy, the headquarters relies on strategic controls to set rate-of-return targets and financial controls to monitor divisional performance relative to those targets.
A) functional
B) cooperative
C) competitive
D) SBU

Accepted Answer

The answer of In the ____ structure hierarchy, the headquarters...

Question 6

The heavy use of integrative mechanisms in the ____ multidivisional organizational structure is intended to achieve ____.
A) cooperative; economies of scope
B) competitive; cost efficiencies
C) functional; sensitivity to cultural diversity
D) SBU; quick response to local customer needs

Accepted Answer

The heavy use of integrative mechanisms in the multidivisional organizational structure is intended to achieve cooperative advantages, such as economies of scope. The use of integrative mechanisms allows for better coordination and communication between the different divisions, which helps to achieve these cooperative advantages. Therefore, choice A is the best answer.

Question 7

The most centralized and most costly form of the multidivisional structure is the
A) integrated.
B) competitive.
C) SBU.
D) cooperative.

Accepted Answer

The answer of The most centralized and most costly form...

Question 8

In an SBU structure, ____ is/are evaluated using strategic controls, whereas ____ is/are evaluated using financial controls.
A) each SBU, divisions within the SBUs
B) divisions within the SBUs, each SBU
C) managers of the SBUs, headquarters staff
D) headquarters staff, managers of the SBUs

Accepted Answer

The answer of In an SBU structure, ____ is/are evaluated...

Question 9

A firm pursuing an unrelated diversification strategy will utilize a ____ structure.
A) network
B) cooperative form multidivisional
C) competitive form multidivisional
D) functional

Accepted Answer

Unrelated diversification involves entering into industries or markets that the firm has no prior experience or knowledge about. This increases the complexity of management and requires a competitive form multidivisional structure where each division operates independently and competes with other divisions in the firm. This structure allows the firm to achieve greater efficiency and flexibility by allocating resources to divisions that offer the best opportunities for growth.

Question 10

Icarus Aviation, Athena Instrumentation, and Hercules Miniaturization are strategic business units of Olympia Industries. One can expect that Icarus, Athena, and Hercules
A) use integrative mechanisms to share core competencies among themselves.
B) compete with one another in Olympia's internal capital markets.
C) are not necessarily related to one another in terms of products or markets.
D) are network member firms while Olympia is the strategic center firms.

Accepted Answer

The answer of Icarus Aviation, Athena Instrumentation, and Hercules Miniaturization...

Question 11

A private university is made up of various "schools," such as the School of Journalism, the School of Business, the School of Law, the School of Arts and Sciences, and so forth. The university is experiencing some financial problems and the top administration has decided to have each school of the university become a profit center. This scheme is somewhat parallel to the organizational ____ structure.
A) network
B) strategic business unit multidivisional
C) functional
D) matrix

Accepted Answer

The scheme of making each school a profit center is similar to the multidivisional structure, in which each division operates as a separate profit center with its own goals and financial targets. This allows for greater accountability and enables each division to make strategic decisions based on its specific needs and goals.

Question 12

The LG Company (Chapter 11Strategic Focus) has units operating in significantly different industries and uses financial controls to manage its portfolio. LG is most likely using the ___________ structure.
A) combination-matrix
B) cooperative form multidivisional
C) competitive form multidivisional
D) strategic business unit multidivisional

Accepted Answer

The competitive form multidivisional structure is used by firms like LG that operate in diverse industries and rely on financial controls to manage their portfolio, allowing each division to compete for resources and performance evaluation.

Question 13

Megaline, Inc., follows the competitive form of the multidivisional structure. It has five divisions. One division has not met the rate-of-return goals for the past year. One division has exceeded the rate-of-return goals. The other three divisions met the rate-of-return goals. The headquarters office is making decisions about where to allocate capital in the next year. Which scenario is the MOST likely?
A) The poorest performing division will get the highest capital allocation so that it can fix its problems and achieve the rate-of-return goal next year.
B) The highest performing division will get the highest capital allocation because it has the best prospects for creating more wealth for the shareholders next year.
C) The average performing divisions which met the rate-of-return goals will receive the highest allocation because their performance exactly matched corporate requirements.
D) All divisions will receive the same capital allocation for the next year because this organizational structure rewards divisional managers based on achievement of strategic goals.

Accepted Answer

In a competitive form of the multidivisional structure, each division is expected to perform competitively to achieve the rate-of-return goals. The division that has exceeded the rate-of-return goal should be given the highest capital allocation because it has proven its ability to create wealth for the shareholders. Allocating capital to the struggling division may not guarantee it will perform better next year, and distributing equal capital to all divisions disregards the difference in their performance. Therefore, option B is the most logical approach.

Question 14

In the competitive form of the multidivisional structure, the focus of headquarters is on all the following EXCEPT
A) integration.
B) performance appraisal.
C) resource allocation.
D) long range planning.

Accepted Answer

In the competitive form of the multidivisional structure, the focus of headquarters is on performance appraisal, resource allocation, and long-range planning, but not on integration, as divisions operate independently to compete with each other.

Question 15

In the ____ multidivisional structure there is complete independence among the firm's divisions.
A) cooperative
B) matrix
C) competitive
D) SBU

Accepted Answer

In a competitive multidivisional structure, each division operates as a separate business entity, with complete autonomy in decision-making and resource allocation. This structure is commonly used when a company has multiple business units that operate in different markets or industries.

Question 16

When a corporation pursues a related-constrained diversification strategy, financial controls may not add value to strategy implementation efforts since it is difficult to
A) use them without reducing cooperation among divisional managers.
B) transfer capital between units.
C) maintain an arms-length relationship between headquarters and the divisions.
D) identify which objective criteria to monitor.

Accepted Answer

Financial controls can hinder cooperation among divisional managers in a related-constrained diversification strategy, where synergy and collaboration are crucial.

Question 17

Firms such as Textron Inc. that frequently acquire and divest other firms are most likely to use the ____ structure.
A) matrix
B) competitive multidivisional
C) hybrid combination
D) horizontal complementary strategic alliance

Accepted Answer

The competitive multidivisional structure is also known as the M-form structure and is commonly used by firms that frequently acquire and divest other firms. This structure allows for the company to have multiple business units or divisions, each with their own functional departments, that operate independently and compete against each other in the marketplace. This structure allows for efficient coordination of various business units and provides flexibility for mergers and acquisitions. Therefore, option B) is the best choice.

Question 18

Which organizational structure will emphasize financial controls for headquarters' evaluation of operating units while the operating units will emphasize strategic controls within their units' performance?
A) Functional structure
B) Cooperative M-Form
C) SBU Form
D) Competitive M-Form

Accepted Answer

The SBU (Strategic Business Unit) form is designed to give more autonomy and strategic control to each operating unit while still maintaining financial control at the headquarters level. This is achieved by dividing the organization into semi-autonomous units or SBUs, each responsible for its own profits and losses. The headquarters will focus on evaluating the financial performance of each SBU while the operating units will emphasize strategic controls within their units' performance.

Question 19

Which of the following multidivisional structures is CORRECTLY paired with the appropriate corporate-level strategy?
A) competitive form with related constrained strategy
B) cooperative form with unrelated strategy
C) SBU form with related linked strategy
D) competitive form with related linked strategy

Accepted Answer

The answer of Which of the following multidivisional structures is...

Question 20

The CEO of Transector, Inc., set a 6.5 percent rate-of-return target for all divisions for the past year. Now, at the end of the year, three of Transector's seven divisions have not met this rate-of-return goal. The division managers of these three under-performing divisions have all secretly contacted executive placement firms to investigate openings at other firms, because they know their future at Transector is in jeopardy as financial performance is all-important at Transector. Transector probably uses the ____ structure.
A) competitive form of the multidivisional
B) SBU form of the multidivisional
C) worldwide geographic area
D) distributed strategic network

Accepted Answer

The answer of The CEO of Transector, Inc., set a...

Quiz 11: Organizational Structure and Controls

The fewest integrative devices are used in the ____ structure.

A firm pursuing a related-constrained diversification strategy would typically need all of the following EXCEPT

Which of the following is a TRUE statement about implementing corporate-level strategies and effective organizational structures?

The ____ structure is an organizational structure that combines both functional specialization and business product or project specialization.

In the ____ structure hierarchy, the headquarters relies on strategic controls to set rate-of-return targets and financial controls to monitor divisional performance relative to those targets.

The heavy use of integrative mechanisms in the multidivisional organizational structure is intended to achieve .

The most centralized and most costly form of the multidivisional structure is the

In an SBU structure, is/are evaluated using strategic controls, whereas is/are evaluated using financial controls.

A firm pursuing an unrelated diversification strategy will utilize a ____ structure.

Icarus Aviation, Athena Instrumentation, and Hercules Miniaturization are strategic business units of Olympia Industries. One can expect that Icarus, Athena, and Hercules

The LG Company (Chapter 11Strategic Focus) has units operating in significantly different industries and uses financial controls to manage its portfolio. LG is most likely using the ___________ structure.

In the competitive form of the multidivisional structure, the focus of headquarters is on all the following EXCEPT

In the ____ multidivisional structure there is complete independence among the firm's divisions.

When a corporation pursues a related-constrained diversification strategy, financial controls may not add value to strategy implementation efforts since it is difficult to

Firms such as Textron Inc. that frequently acquire and divest other firms are most likely to use the ____ structure.

Which organizational structure will emphasize financial controls for headquarters' evaluation of operating units while the operating units will emphasize strategic controls within their units' performance?

Which of the following multidivisional structures is CORRECTLY paired with the appropriate corporate-level strategy?