Question 1

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 functional specialization (typically organized by departments such as finance, marketing, or human resources) with business product or project specialization. This creates a dual reporting structure where employees report both to their functional manager and to a project or product manager. This structure is often used in complex organizations where multiple projects or products are being managed simultaneously.

Question 2

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 3

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 4

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 answer of The LG Company (Chapter 11Strategic Focus) has...

Question 5

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 6

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...

Question 7

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 8

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 a multidivisional organizational structure is intended to achieve cooperation among divisions, rather than competition. This cooperation allows for economies of scope to be achieved through sharing of resources and knowledge between divisions. Additionally, the multidivisional structure typically focuses on different markets and geographic areas, so sensitivity to cultural diversity may not be as important as economies of scope. The structure also strives for quick response to local customer needs, but this is not the primary purpose of integrative mechanisms within the structure. Thus, option A is the best choice.

Question 9

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 10

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 the most suitable for firms like Textron Inc. that frequently acquire and divest other firms. This structure allows for each division to operate autonomously and compete with each other while sharing resources and expertise from the corporate center. This structure allows for flexibility and adaptability in a rapidly changing market environment.

Question 11

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 12

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 13

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

The answer of In the competitive form of the multidivisional...

Question 14

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 15

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

Accepted Answer

The competitive multidivisional structure, also known as the "autonomous" or "independent" structure, creates a competitive environment among the firm's divisions, with each division operating independently and competing against each other for resources and business. This structure is typically found in large corporations with diverse business interests.

Question 16

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 having each school of the university become a profit center is similar to the concept of strategic business units (SBUs) in a multidivisional structure. In this structure, each SBU operates as a separate business entity that is responsible for its own profits and losses. This allows for better financial control and helps the organization focus on maximizing profits. The other options, network, functional, and matrix structures do not fit this scenario as well.

Question 17

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

The answer of When a corporation pursues a related-constrained diversification...

Question 18

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

A competitive form multidivisional structure is best suited for a firm pursuing an unrelated diversification strategy. This structure allows for each of the company's divisions to operate as separate business entities, competing with one another for resources and market share. It also allows for greater flexibility in adapting to changes in the market and in allocating resources to the most profitable divisions.

Question 19

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 multidivisional structure, the goal is to create competition among the divisions to motivate performance. The division that exceeded the rate-of-return goal has already shown that it has the best prospects for creating more wealth for the shareholders next year. Therefore, it is the most likely scenario that the highest performing division will get the highest capital allocation.

Question 20

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 the organizational structure that emphasizes financial controls for headquarters' evaluation of operating units while the operating units will emphasize strategic controls within their units' performance. Each SBU operates as a separate business within the overall organization, with its own strategy, structure, and financial controls. This allows headquarters to evaluate each SBU's financial performance independently while giving the SBUs the autonomy to focus on their own strategic objectives.

Quiz 11: Organizational Structure and Controls

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.

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.

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

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

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

The fewest integrative devices are used in the ____ structure.

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

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

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

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

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

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

A firm pursuing an unrelated diversification strategy will utilize a ____ 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?