Question 1

Research has consistently shown that there is one best way to structure all organizations, regardless of competitive strategy.

Accepted Answer

There is not one best way to structure all organizations as the structure of an organization should be aligned with its competitive strategy and specific goals. Different strategies require different structures, such as functional, divisional, matrix, or network structures.

Question 2

Companies and business units of large diversified firms using the cost leadership strategy should use strategic controls.

Accepted Answer

False

Question 3

Strategy has a more important influence on strategy, although once in place, structures influence strategy.

Accepted Answer

Strategy is the guiding force behind an organization's actions and decisions, and ultimately determines the direction and success of the organization. Structures, on the other hand, are the systems and frameworks put in place to support the implementation of strategy. While structures can impact strategy by limiting or enabling certain actions, strategy takes precedence in shaping and driving organizational outcomes. However, once structures are established, they can also influence and shape future strategies.

Question 4

In the Chapter 10 Opening Case about Borders shows that although strategy has a more important influence on structure, once a particular structure is in place, that structure influences strategy.

Accepted Answer

The case highlights that the structure of Borders influenced its ability to pivot its strategy in response to changing market conditions, indicating that structure can have an impact on strategy. However, it also notes that strategy is generally the more influential factor in shaping organizational structure.

Question 5

Research shows that structure has a more important influence on strategy than the reverse and hence the emphasis of the chapter on the subject of structure.

Accepted Answer

The answer of Research shows that structure has a more...

Question 6

Organizational inertia often prompts top management to initiate structural change when organizational performance levels drop.

Accepted Answer

The answer of Organizational inertia often prompts top management to...

Question 7

Over time, large and complex organizations must customize their structure to fit their unique strategic needs.

Accepted Answer

Large and complex organizations often require customization in their structure to fit their specific goals and strategy. This can involve changes in departmental structures, leadership roles, or communication channels to better meet the organization's needs.

Question 8

Organizational structures must be both stable and flexible.

Accepted Answer

Organizational structures need to be stable to provide consistency and predictability, but also flexible enough to adapt to changing circumstances and new opportunities. A completely fixed or completely fluid organizational structure would not be effective in the long term.

Question 9

According to Michael Dell, an overemphasis on financial controls to produce attractive short-term results contributed to performance difficulties at Dell, Inc. This point emphasizes the importance of properly balancing the use of strategic and financial controls.

Accepted Answer

Michael Dell stated that an overemphasis on financial controls had led to performance difficulties at Dell, Inc, highlighting the importance of balancing the use of strategic and financial controls.

Question 10

Companies and business units using the differentiation strategy should emphasize financial rather than strategic controls.

Accepted Answer

Companies and business units using the differentiation strategy should emphasize strategic controls, as they need to constantly innovate and maintain a unique value proposition in order to stand out from competitors. Financial controls alone may not be sufficient to achieve this differentiation.

Question 11

Organizational controls guide the use of strategy, indicate how to compare actual results with expected results, and suggest corrective actions to take when the difference is unacceptable.

Accepted Answer

Organizational controls serve as a guide to ensure that strategies are being implemented effectively and efficiently. They provide a framework for measuring actual results against expected results and allow leaders to identify deviations and take corrective actions if necessary.

Question 12

As a firm grows, it typically shifts from a simple structure to a functional structure.

Accepted Answer

As a firm grows, it becomes more complex and requires a more organized structure. A simple structure may work in the early stages, but as the firm grows, it typically shifts to a functional structure to better handle the increased workload and need for specialized roles.

Question 13

To properly execute strategic controls in firms using related diversification, the executives must have a deep understanding of each unit's business-level strategy.

Accepted Answer

Strategic controls are essential for monitoring and evaluating the performance of different business units in firms pursuing related diversification. To design these controls, executives must have a detailed understanding of each unit's business-level strategy, such as their target customers, competitive advantage, value proposition, and key success factors. This knowledge is necessary to set appropriate goals, define relevant performance indicators, allocate resources effectively, and make informed decisions about investments, divestitures, or restructuring initiatives. Without such insight, strategic controls may be ineffective or misaligned with the unit's objectives, leading to suboptimal outcomes and wasted resources.

Question 14

As shown in the Chapter Opening 11 Case, Borders was able to structure its operations in ways that allowed it to manage the different businesses in each country and market effectively.

Accepted Answer

The answer of As shown in the Chapter Opening 11...

Question 15

RexMacDonald, Inc., uses a differentiation strategy that relies on cooperation, communication, and sharing of ideas among employees. In order to foster this behavior, RexMacDonald should emphasize strategic controls over financial controls.

Accepted Answer

Strategic controls are more effective in promoting cooperation and communication, as they focus on the overall goals and values of the organization rather than just financial performance. Financial controls may actually hinder creativity and collaboration among employees.

Question 16

An overriding lesson from the Chapter 10 Opening Case about Borders is that failure to properly structure an organization can contribute to poor strategic decisions and eventually bankruptcy.

Accepted Answer

The opening case about Borders highlights how their failure to properly structure their organization and adapt to changing market trends eventually led to poor strategic decisions and bankruptcy.

Question 17

Strategic controls are largely subjective criteria intended to verify that the firm is using appropriate strategies for the conditions in the external environment and the company's competitive advantages.

Accepted Answer

Strategic controls are usually based on subjective criteria and are designed to ensure that the firm's strategies are suitable for the external environment and the company's competitive advantages. These controls assess the effectiveness of the firm's strategy and its ability to meet its goals and objectives. Examples of strategic controls may include key performance indicators, market share, customer satisfaction ratings, and financial performance metrics.

Question 18

With a related diversification corporate-level strategy, financial controls are used by corporate leaders to verify the sharing of appropriate strategic factors such as knowledge, markets, and technologies across businesses.

Accepted Answer

The answer of With a related diversification corporate-level strategy, financial...

Question 19

The simple structure is used by owner-managed firms which are characterized by informal relationships, few rules, limited task specialization, and unsophisticated information systems.

Accepted Answer

The statement accurately describes the characteristics and use of the simple structure in owner-managed firms.

Question 20

The centralized structure used by Borders (Chapter 11 Opening Case) did not provide information from local stores that might have been useful in changing its technology strategy more quickly than it did. This example illustrates the effect of structure on strategy.

Accepted Answer

The statement is true. It suggests that the centralized structure used by Borders did not facilitate the flow of information from local stores that might have been useful in changing its technology strategy in a more timely manner. This indicates that the company's structure impacted its ability to adapt its strategy to changing market conditions and technological developments.

Quiz 11: Organizational Structure and Controls