Question 1

Process management rests on the assumption that over time businesses create and build up processes that no longer establish value for the firm and may even hinder its business.

Accepted Answer

The answer of Process management rests on the assumption that...

Question 2

Which of the following statements about organizational structure is false?

Accepted Answer

The strategy-structure relationship is not a one-way street. Rather, the relationship between a firm's strategy and its structure is a dynamic one, with each influencing the other. The firm's structure is shaped by its strategy, but it also affects the firm's ability to implement its strategy.

Question 3

If a firm has staked out a low-cost position, it:

Accepted Answer

If a firm has staked out a low-cost position, it needs to ensure that efficiency is the principal focus of its structure. This means that the firm should focus on streamlining its operations, reducing waste and inefficiencies, and maximizing productivity in order to drive down costs and maintain its competitive advantage. Procuring low-cost labor or focusing on the 'one best method' may be strategies for achieving this goal, but they are not the primary focus. The effectiveness of the firm's structure is important, but it is secondary to its efficiency in achieving a low-cost position.

Question 4

Which of the following statements about the typical organizational form of businesses owned by Overseas Chinese is false?

Accepted Answer

The statement that the complex structure works well for Overseas Chinese businesses due to the nature of the decisions that are required is false. In fact, the complex structure can sometimes make decision-making slower and more difficult for these businesses.

Question 5

_____ was developed principally by researchers in economics and finance to highlight the fact that individual employees will often act in their own self-interest rather than in the interest of their employer.

Accepted Answer

Agency theory is a commonly used framework in economics and finance that emphasizes the possibility of conflicts of interest between principals (such as company owners/managers) and agents (such as employees). The theory suggests that agents may prioritize their own interests over those of their principals. By understanding these potential conflicts, principals can create incentives and structures that align the interests of both parties. Other options such as strategic choice theory, institutional theory, and contract theory do not emphasize conflicts of interest between principals and agents.

Question 6

What is the benefit of a functional structure?

Accepted Answer

The answer of What is the benefit of a functional...

Question 7

From Senge's perspective, success comes from an organic organization that fully engages individuals and permits experimentation.

Accepted Answer

In Senge's perspective, an organic organization that fully engages individuals and permits experimentation is crucial for success.

Question 8

What is the risk of a functional structure?

Accepted Answer

In a functional structure, employees tend to become more focused on their specific functional area, which can lead to silos within the organization where departments are more concerned with their own goals rather than the goals of the organization as a whole. This can hinder cross-departmental collaboration and alignment towards the company's overall objectives.

Question 9

Individuals always make better decisions than teams in complex or ambiguous settings.

Accepted Answer

Teams can bring diverse perspectives and expertise to decision-making in complex or ambiguous settings, helping to identify blind spots, explore multiple options, and reach more informed conclusions. Collaboration and collective input can lead to better outcomes than relying on a single individual's judgment. However, it is important for teams to have effective communication, clear roles and responsibilities, and a shared understanding of goals and priorities to make the most of their collective intelligence.

Question 10

Which of the following statements about M-division firms is true?

Accepted Answer

The answer of Which of the following statements about M-division...

Question 11

Increasing the administrative component:

Accepted Answer

Increasing the administrative component can increase the bureaucracy and layers of decision-making within an organization, which can ultimately slow down the decision-making process and increase the time needed to make decisions. This can hinder planning, coordination, and training efforts within the organization. While it may facilitate communication among departments to some extent, it may also lead to inefficiencies and decreased commitment to the organization as a whole.

Question 12

Informal organizations are the unofficial connections that exist among individuals in a business.

Accepted Answer

Informal organizations are the social structures that form spontaneously within a company. They are not officially designated and are not part of the formal organizational chart.

Question 13

The _____ is the proportion of support staff to line workers.

Accepted Answer

The administrative component refers to the proportion of support staff to line workers, indicating the level of administrative support or overhead in an organization.

Question 14

Which of the following argues that work expands to fill the time available?

Accepted Answer

Parkinson's Law argues that work expands to fill the time available, meaning that if someone has a task to complete with no deadline or time constraint they will take longer to complete it than if they had a deadline or time constraint.

Question 15

Typically, the _____ structure is not used by international firms that have operations in large numbers of countries.

Accepted Answer

The functional structure is typically not used by international firms with operations in large countries because it centralizes decision-making and operations, which can be inefficient for managing diverse and geographically dispersed operations. International firms often require structures that can accommodate the complexity and diversity of operating in multiple countries, such as the matrix, multidivisional, or strategic business unit (SBU) structures, which allow for more flexibility and responsiveness to local conditions.

Question 16

According to the text, the simple organizational structure is often associated with:

Accepted Answer

The simple organizational structure is often associated with family-owned businesses because it typically features a central authority figure, such as a family member, who makes most of the decisions, and there are few, if any, layers of management. This structure allows for quick decision-making and close personal relationships among employees, which are common characteristics of family-owned businesses.

Question 17

As a firm grows it may find that the various parts of the business are too large to effectively coordinate with a simple functional structure. In this case, the firm develops a(n):

Accepted Answer

As the business grows and becomes more complex, a multidivisional structure may be necessary. This structure separates the company into multiple divisions, each with its own functional structure, allowing for better coordination and control.

Question 18

What is the drawback of a divisional structure?

Accepted Answer

Divisional structures often lead to duplication of resources and efforts across divisions, as each division may have its own functional departments, leading to inefficiencies.

Question 19

A _____ organizational structure is typical of new ventures.

Accepted Answer

A simple organizational structure is more common in new ventures. This is because new ventures typically have a small team or are just starting out, so a simple structure is easier to manage and allows for clear communication and decision-making. A functional structure would be more appropriate for a larger, established organization with multiple departments or functions. A matrix structure is typically used when multiple projects are being managed simultaneously and requires more complex coordination. A divisional structure is used when an organization is structured by product, geography, or customer segment.

Question 20

In environments where change is rapid, an organizational structure needs to able to adapt and respond as quickly as the environment.

Accepted Answer

An adaptive and responsive organizational structure is crucial in fast-paced environments to ensure the organization can keep up with the changes and remain competitive.

Quiz 13: The Structure of the International Firm