Question 1

McDonald's experienced a situation where the French division of the company ran a surprising advertisement in a magazine that included a quote from a nutritionist that asserted children should not eat at a McDonald's more than once per week. McDonald's executives in Chicago were concerned about the message sent to their customers, and they made it clear that they strongly disagreed with the nutritionist. What kind of organization structure empowers divisions to act quickly, but can lead to actions that do not fit with the company's overall strategy?

Accepted Answer

A multidivisional structure allows divisions to operate independently and make quick decisions, but this can sometimes result in actions that are not aligned with the company's overall strategy.

Question 2

A functional structure differs from a simple structure in that a functional structure:

Accepted Answer

A functional structure relies on a formal system of division of labor, where the organization is divided into departments based on specific functions or roles, unlike a simple structure which is more informal and less structured.

Question 3

A multidivisional structure can be costly because, when a company has seven divisions like GE that each require special skills and knowledge, it can reduce a company's profit margin. In GE's case, departments devoted to important aspects of public relations, business development, legal, global research, human resources, and finance are maintained centrally to provide services to all seven divisions. This creates ________ and saves money.

Accepted Answer

Centralizing departments like public relations, legal, and finance allows GE to provide these services efficiently across all divisions, reducing redundancy and saving money.

Question 4

Conflicts within departments are relatively rare in organizations that follow a _____ structure because all the people in a particular department share the same background and training, and as such, they tend to get along with each other.

Accepted Answer

In a functional structure, employees are grouped based on their similar skills and expertise, which reduces conflicts as they share common backgrounds and training.

Question 5

A _____ structure can help develop new managers by putting a person without managerial experience in charge of a relatively small project as a test to see if the person has a talent for leading others.

Accepted Answer

A matrix structure allows for employees to report to multiple managers and work on various projects, providing opportunities for individuals to lead small projects and develop managerial skills.

Question 6

Which of the following statements represents a challenge associated with matrix structures?

Accepted Answer

Matrix structures can lead to confusion and ambiguity in responsibility, allowing some employees to avoid accountability.

Question 7

_____ control focuses on measurable results within an organization.

Accepted Answer

Output control focuses on measurable results, such as financial performance, productivity, and other quantifiable outcomes within an organization.

Question 8

Which of the following statements about matrix structures is accurate?

Accepted Answer

Matrix structures violate the unity of command principle because employees report to multiple managers, which can lead to confusion and conflicts.

Question 9

Employees at Pinetree Publications, a book publishing firm based in New York, are divided into departments based on product areas, such as academic books, autobiographies, fiction, and politics. Pinetree Publications is most likely using which of the following organizational structures?

Accepted Answer

Pinetree Publications is using a multidivisional structure, where the organization is divided into departments based on product areas or divisions, such as academic books, autobiographies, fiction, and politics.

Question 10

In-fighting and politics among project managers around the issue of what people are assigned to each project is a potential concern for organizations following a _____ structure.

Accepted Answer

In a matrix structure, employees report to multiple managers for different aspects of their work, which can lead to conflicts and politics over resource allocation and project assignments.

Question 11

Which of the following is a disadvantage of using a functional structure?

Accepted Answer

A functional structure can lead to slow execution of strategic changes due to its rigid hierarchy and focus on specialization, which can hinder flexibility and adaptability.

Question 12

One of the main reasons for changing an organization's structure is improving:

Accepted Answer

Improving efficiency is a common reason for changing an organization's structure.

Question 13

Which of the following is true about behavioral control?

Accepted Answer

Behavioral control focuses on regulating the actions and behaviors of employees to ensure that they align with the organization's goals, rather than focusing solely on the outcomes or results.

Question 14

Because _____ structures are slow to execute change, they tend to work best for organizations that offer narrow and stable product lines.

Accepted Answer

Functional structures are slow to execute change because they are organized around specific functions or departments, making them suitable for organizations with narrow and stable product lines.

Question 15

_____ control is an informal type of control.

Accepted Answer

Clan control is an informal type of control that relies on shared values, beliefs, and traditions within an organization.

Question 16

Which of the following organizational structures relies heavily on horizontal relationships?

Accepted Answer

A matrix structure relies heavily on horizontal relationships as it involves employees reporting to multiple managers across different functional and project lines, promoting collaboration across departments.

Question 17

_____ allow executives to track how well the organization is performing, identify areas of concern, and then take action to address the concerns.

Accepted Answer

Organizational control systems are tools that help executives monitor performance, identify issues, and implement corrective actions.

Question 18

A big advantage of a _____ structure is that it allows a firm to act quickly.

Accepted Answer

A multidivisional structure allows a firm to act quickly because it gives each division its own management team and resources. This allows each division to make decisions quickly without having to go through a central authority.

Question 19

The dress codes that are enforced within many organizations are an example of _____ control.

Accepted Answer

Behavioral control is a type of control that uses rules and regulations to influence employee behavior. Dress codes are an example of behavioral control because they specify what employees are allowed to wear to work.

Question 20

_____ control relies on shared traditions, expectations, values, and norms to lead people to work toward the good of their organization.

Accepted Answer

Clan control relies on shared traditions, expectations, values, and norms to guide and motivate employees to work towards the organization's goals.

Quiz 9: Executing Strategy Through Organizational Design