Question 1

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 2

Firms seeking to compete on the basis of cost leadership particularly need support from the ____ and ____ functions.
A) finance, accounting
B) manufacturing, process R&D
C) product R&D, marketing
D) management information, finance

Accepted Answer

Firms seeking to compete on the basis of cost leadership need to focus on efficient manufacturing and process R&D in order to reduce costs and improve production processes. While finance and accounting play important roles in managing costs, they do not directly contribute to improving manufacturing efficiency. Product R&D and marketing are more focused on product differentiation and creating value for the customer, which is not the primary goal of cost leadership. Management information is important for decision-making, but it is not directly related to cost reduction.

Question 3

The ____ structure is the most appropriate structure for implementing the integrated cost leadership /differentiation strategy.
A) simple
B) functional
C) multidivisional
D) strategic business unit

Accepted Answer

The answer of The ____ structure is the most appropriate...

Question 4

____ is the degree to which rules and procedures govern work.
A) Formalization
B) Centralization
C) Specialization
D) Unification

Accepted Answer

Formalization refers to the degree to which rules and procedures govern work. Centralization refers to the degree to which decision-making is concentrated in a few individuals or groups. Specialization refers to the degree to which tasks are divided into separate jobs. Unification is not a management concept.

Question 5

In the chapter Strategic focus, Hewlett-Packard implemented a _________ strategy using the ______ structure.
A) related constrained; SBU form multidivisional
B) unrelated diversification; competitive form multidivisional
C) related linked; SBU form multidivisional
D) related constrained; cooperative form multidivisional

Accepted Answer

The answer of In the chapter Strategic focus, Hewlett-Packard implemented...

Question 6

The cooperative multidivisional firm
A) establishes profit centers based on products or markets.
B) has a flat organizational structure which broadens jobs and empowers workers.
C) is a structure organized around both functional specialization and business projects.
D) is a structure requiring heavy use of horizontal integrative devices.

Accepted Answer

The answer of The cooperative multidivisional firm
A) establishes profit centers...

Question 7

To successfully implement a cost leadership strategy, there is a need for
A) freedom from constraining rules.
B) centralization of authority.
C) communication between functional silos.
D) sharing of competencies among divisions.

Accepted Answer

The answer of To successfully implement a cost leadership strategy,...

Question 8

Successful implementation of the differentiation strategy requires a structure that
A) has specialized jobs.
B) decentralizes decision-making.
C) focuses on the finance function.
D) is dominated by the operations function.

Accepted Answer

Decentralizing decision-making allows for flexibility and responsiveness to customer needs, which is crucial for successfully implementing a differentiation strategy. Specialized jobs may also be useful, but they are not necessarily tied to the differentiation strategy. Focusing on finance or operations alone does not ensure the success of differentiation.

Question 9

Agatha Adams founded Insurance Specialists to process medical claims for physicians' practices. She plans to compete on the basis of cost, offering the lowest processing cost per claim in her market area. Ms Adams' company should
A) be the strategic center firm in a network structure.
B) have a specialized multidivisional structure.
C) develop alliances with firms with complementary competencies.
D) have a highly centralized, functional structure.

Accepted Answer

The answer of Agatha Adams founded Insurance Specialists to process...

Question 10

Typically, a successful firm pursuing a differentiation strategy will
A) have a very hierarchical structure.
B) require a structure which is very formal.
C) use cross-functional development teams.
D) develop free-standing business units.

Accepted Answer

Cross-functional development teams are typically used in a differentiation strategy because this strategy entails creating unique and innovative products that stand out from competitors. Such products often require input from different departments or functions within the organization, which is best achieved through cross-functional teams. A hierarchical or formal structure may hinder creativity and innovation, while free-standing business units may be better suited for a focus strategy.

Question 11

The BEST multidivisional structure to use
A) is the competitive form.
B) is the SBU form.
C) is the cooperative form.
D) depends on the degree of diversification.

Accepted Answer

The answer of The BEST multidivisional structure to use
A) is...

Question 12

Which of the following is a TRUE statement about organizational structures for implementing business-level strategies?
A) A cost leadership strategy requires a simple structure emphasizing high specialization, centralization, and structured job roles.
B) A differentiation strategy requires a functional structure with limited formalization, broad job descriptions, and an emphasis on the product R&D and marketing functions.
C) An integrated cost leadership/differentiation strategy requires a multidivisional structure using high formalization, decentralized decision-making, and vertical coordination.
D) A focused strategy requires a functional structure featuring high levels of both specialization and formalization.

Accepted Answer

A differentiation strategy requires flexibility and creativity, which can be facilitated by a functional structure with limited formalization and broad job descriptions. This allows employees to focus on innovation and customer needs rather than rigid processes and procedures. A cost leadership strategy may require a more centralized and structured approach to achieve cost savings and efficiency. An integrated cost leadership/differentiation strategy may benefit from a multidivisional structure to coordinate different product lines or business units. A focused strategy may also benefit from a functional structure but may require high levels of specialization and formalization to excel in a narrow market segment.

Question 13

Firms seeking to differentiate particularly need support from the ____ and ____ functions.
A) finance, accounting
B) engineering, operations
C) product R&D, marketing
D) management information, finance

Accepted Answer

Product R&D and marketing are the functions that can help a firm differentiate its products from competitors. Product R&D can help create new and innovative products, while marketing can help promote and communicate the unique features and benefits of those products to customers.

Question 14

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 have both financial and strategic controls. The headquarters will evaluate operating units' financial performance while allowing the units to have control over their own strategic decisions. The Cooperative M-Form emphasizes collaboration between departments, while the Competitive M-Form focuses on competition between divisions. The Functional structure is designed for specialized departments to operate independently.

Question 15

The integrated cost leadership/differentiation strategy is difficult to implement mostly because
A) different primary and support activities are emphasized when using cost leadership and differentiation strategies.
B) this strategic approach demands more flexibility than most firms can manage.
C) the dual reporting relationships required for this strategy slow organizational decision-making.
D) the cost leadership strategy requires less structured job roles than does the differentiation strategy.

Accepted Answer

Implementing the integrated cost leadership/differentiation strategy requires emphasizing different primary and support activities compared to using only one of the strategies, which can be difficult for firms to manage. Additionally, balancing cost leadership and differentiation can be a challenge, as it requires striking a balance between efficiency and uniqueness. The other options mentioned (B, C, and D) are not accurate reasons why this strategy is difficult to implement.

Question 16

Like Cisco, Hewlett-Packard moved away from its formerly _______ decentralized towards a ______ strategy using the __________ structure (chapter Strategic Focus).
A) decentralized; related constrained; cooperative M-form
B) decentralized; related linked; SBU M-form
C) centralized; unrelated; competitive M-form
D) centralized; related constrained; cooperative M-form

Accepted Answer

Cisco and Hewlett-Packard both moved away from decentralized strategies towards related constrained strategies using the M-form structure.

Question 17

Wal-Mart's effective strategy/structure configuration is
A) cost leadership/functional.
B) differentiation/functional.
C) related-constrained/multidivisional.
D) related-linked/multidivisional.

Accepted Answer

Wal-Mart's effective strategy is focused on cost leadership, as it offers the lowest possible prices for its products to customers. It achieves this through its functional structure, which emphasizes efficiency, cost cutting, and standardized processes across its stores. This allows Wal-Mart to minimize costs and pass on the cost savings to its customers, enabling it to maintain its competitive advantage in the retail industry.

Question 18

Increasingly diversified firms that have decided to shift to a related-constrained strategy should change their organizational structure to the ____ structure.
A) functional
B) competitive form of the multidivisional
C) SBU form of the multidivisional
D) cooperative form of the multidivisional

Accepted Answer

A related-constrained strategy involves businesses that are related in terms of product, market, or technology. The cooperative form of the multidivisional structure is best suited for this strategy as it facilitates sharing of resources and activities among the divisions, promoting synergy and coordination.

Question 19

____ is the degree to which decision making authority is retained at higher managerial levels.
A) Formalization
B) Centralization
C) Specialization
D) Unification

Accepted Answer

Centralization refers to the degree to which decision-making authority is retained at higher levels of management. A high level of centralization means that decisions are made by top management, while a low level of centralization means that decisions are made by lower-level employees.

Question 20

Which of the following is NOT a variation of the multidivisional structure?
A) competitive form
B) regional form
C) cooperative form
D) strategic business unit form

Accepted Answer

The answer of Which of the following is NOT a...

Quiz 11: Organizational Structure and Controls

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

Firms seeking to compete on the basis of cost leadership particularly need support from the and functions.

The ____ structure is the most appropriate structure for implementing the integrated cost leadership /differentiation strategy.

____ is the degree to which rules and procedures govern work.

In the chapter Strategic focus, Hewlett-Packard implemented a ___ strategy using the structure.

The cooperative multidivisional firm

To successfully implement a cost leadership strategy, there is a need for

Successful implementation of the differentiation strategy requires a structure that

Agatha Adams founded Insurance Specialists to process medical claims for physicians' practices. She plans to compete on the basis of cost, offering the lowest processing cost per claim in her market area. Ms Adams' company should

Typically, a successful firm pursuing a differentiation strategy will

The BEST multidivisional structure to use

Which of the following is a TRUE statement about organizational structures for implementing business-level strategies?

Firms seeking to differentiate particularly need support from the and functions.

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?

The integrated cost leadership/differentiation strategy is difficult to implement mostly because

Like Cisco, Hewlett-Packard moved away from its formerly _ decentralized towards a strategy using the ______ structure (chapter Strategic Focus) .

Wal-Mart's effective strategy/structure configuration is

Increasingly diversified firms that have decided to shift to a related-constrained strategy should change their organizational structure to the ____ structure.

____ is the degree to which decision making authority is retained at higher managerial levels.

Which of the following is NOT a variation of the multidivisional structure?