Question 1

Tasks and activities are grouped together by business function in a divisional organizational structure.

Accepted Answer

In a divisional organizational structure, tasks and activities are grouped based on product lines, markets, or geographical areas, not by business function.

Question 2

A functional structure can be effective at eliminating short-term and narrow thinking.

Accepted Answer

A functional structure can actually be a hindrance to long-term and strategic thinking, as employees are primarily focused on their specific department or function and may not consider the overall goals of the organization.

Question 3

With a divisional structure, it is possible that competition between divisions may become so intense that it leads to improved sharing of ideas and resources for the common good of the firm.

Accepted Answer

In a divisional structure, intense competition between divisions can actually lead to hoarding of resources and ideas, as divisions may prioritize their own success over the common good of the firm.

Question 4

Which organizational structure is the most widely used?
A) Departmental
B) Strategic business unit
C) Functional
D) Decentralized
E) Matrix

Accepted Answer

The functional organizational structure is the most widely used because it is simple, clear, and easy to implement. It groups employees by function, such as marketing, finance, and operations, and each department is responsible for its own tasks. This structure is efficient and allows for specialization and development of expertise within each department.

Question 5

What is the most complex form of organizational structure?
A) Divisional
B) SBU
C) Matrix
D) Functional
E) Geographic

Accepted Answer

The matrix structure is the most complex form of organizational structure because employees report to both a functional manager and a project or product manager. This leads to a dual reporting relationship and potentially conflicting priorities. It requires a high level of communication and coordination to ensure that goals are aligned and resources are allocated effectively.

Question 6

Which divisional structure stands out for effectiveness when a few major customers are of paramount importance and many different services are provided to these customers?
A) By geographic area
B) By customer
C) By product
D) By process
E) By cost

Accepted Answer

When a few major customers are of paramount importance and many different services are provided to these customers, the most effective divisional structure is by customer. This allows for a focus on the unique needs and preferences of each customer, personalized communication and service, and the ability to tailor offerings to meet their specific needs.

Question 7

With the matrix structure it is common for functional resources to be duplicated.

Accepted Answer

In a matrix structure, resources such as personnel and equipment are shared across projects and functional units, reducing the need for duplication.

Question 8

Policies largely dictate how structure will be established.

Accepted Answer

The answer of Policies largely dictate how structure will be...

Question 9

Which organizational structure has the disadvantage of ambiguous roles for some senior executives?
A) Functional
B) Divisional
C) Strategic Business Unit (SBU)
D) Matrix
E) Process

Accepted Answer

The answer of Which organizational structure has the disadvantage of...

Question 10

Most large companies have abandoned the functional structure in favor of decentralization.

Accepted Answer

Decentralization allows for more flexibility and quicker decision-making, which are crucial in today's fast-paced business environment. Many companies have recognized this and shifted away from the traditional functional structure in recent years.

Question 11

Medium-sized firms tend to use which type of structure?
A) Divisional
B) Matrix
C) SBU
D) Functional
E) Centralized

Accepted Answer

Medium-sized firms tend to use a divisional structure because it allows for flexibility and autonomy in each division while still maintaining a level of centralized control. This structure allows for each division to focus on its specific products or services, making it easier to respond to changes in the market. Additionally, it allows for better decision-making as decisions can be made at the divisional level rather than having to go through a centralized hierarchy.

Question 12

Because activities are organized according to the way work is actually performed, a divisional structure by process is similar to the matrix structure.

Accepted Answer

A divisional structure by process organizes a company around the production process, focusing on the sequence of operations, while a matrix structure combines two different structures (typically functional and project-based) to leverage the benefits of both, creating dual reporting relationships rather than organizing solely around work processes.

Question 13

A divisional structure by geographic area is most appropriate when
A) organizations have similar branch facilities located in widely dispersed areas.
B) an organization offers only a limited number of products or services.
C) consumption patterns for its products and/or services are the same worldwide.
D) the company's customers in different geographic locations have similar needs and characteristics.
E) the firm serves one geographic area.

Accepted Answer

A divisional structure by geographic area is most appropriate when organizations have similar branch facilities located in widely dispersed areas. This allows for each division to focus on the specific needs of the region and tailor their operations to the local market.

Question 14

With a divisional structure by customer, an organization can effectively cater to the requirements of clearly defined customer groups.

Accepted Answer

With a divisional structure by customer, each division focuses on serving a specific group of customers with unique needs and preferences. This allows the organization to tailor their strategies and offerings to more effectively meet the demands of their target customers.

Question 15

A divisional structure by product is most effective when
A) special emphasis needs to be placed on specific products.
B) an organization offers few products.
C) an organization's products or services differ substantially.
D) special emphasis needs to be placed on specific services.
E) all of the above

Accepted Answer

A divisional structure by product is most effective when special emphasis needs to be placed on specific products, an organization offers few products, or an organization's products or services differ substantially.

Question 16

What is NOT one of the basic ways a divisional structure can be organized?
A) By geographic area
B) By product
C) By customer
D) By process
E) By cost

Accepted Answer

The divisional structure can be organized according to geographic area, product, customer, and process. However, it is not typically organized by cost.

Question 17

The most complex of all organizational structures is a matrix structure.

Accepted Answer

A matrix structure involves employees working in multiple reporting relationships, with a functional manager as well as a project or product manager. This creates a more complex hierarchy and can lead to challenges in coordinating and prioritizing tasks.

Question 18

According to Alfred Chandler "changes in strategy lead to changes in organizational structure."

Accepted Answer

According to Chandler, changes in strategy lead to changes in organizational structure as the structure needs to be aligned with the strategy to effectively implement it.

Question 19

What type of organizational structure promotes specialization of labor and allows rapid decision making?
A) Divisional structure by product
B) Functional structure
C) Divisional structure by customer
D) Strategic business unit
E) Matrix structure

Accepted Answer

The functional structure promotes specialization of labor by grouping together employees with similar skills and expertise. This allows for efficient decision making within each specialized area.

Question 20

Medium-sized firms tend to be divisionally structured, whereas large firms tend to use an SBU (strategic business unit) or matrix structure.

Accepted Answer

Medium-sized firms typically have smaller operations and a simpler organizational structure, which often involves dividing the company into different departments or divisions based on functions or products. In contrast, larger firms usually have multiple business units or product lines, which are managed as separate strategic business units or through a matrix structure that involves multiple reporting lines and cross-functional teams.

Quiz 7: Implementing Strategies: Management, Operations, and Human Resource Issues

Tasks and activities are grouped together by business function in a divisional organizational structure.

A functional structure can be effective at eliminating short-term and narrow thinking.

With a divisional structure, it is possible that competition between divisions may become so intense that it leads to improved sharing of ideas and resources for the common good of the firm.

Which organizational structure is the most widely used?

What is the most complex form of organizational structure?

Which divisional structure stands out for effectiveness when a few major customers are of paramount importance and many different services are provided to these customers?

With the matrix structure it is common for functional resources to be duplicated.

Policies largely dictate how structure will be established.

Which organizational structure has the disadvantage of ambiguous roles for some senior executives?

Most large companies have abandoned the functional structure in favor of decentralization.

Medium-sized firms tend to use which type of structure?

Because activities are organized according to the way work is actually performed, a divisional structure by process is similar to the matrix structure.

A divisional structure by geographic area is most appropriate when

With a divisional structure by customer, an organization can effectively cater to the requirements of clearly defined customer groups.

A divisional structure by product is most effective when

What is NOT one of the basic ways a divisional structure can be organized?

The most complex of all organizational structures is a matrix structure.

According to Alfred Chandler "changes in strategy lead to changes in organizational structure."

What type of organizational structure promotes specialization of labor and allows rapid decision making?

Medium-sized firms tend to be divisionally structured, whereas large firms tend to use an SBU (strategic business unit) or matrix structure.