Question 1

Competition for resources is one of the drawbacks of the multidivisional structure.

Accepted Answer

In a multidivisional structure, each division operates as a separate entity competing for resources and funding with other divisions within the same company. This can lead to conflicts over budgets and resources, which can have a negative impact on overall performance.

Question 2

Few integrating mechanisms are needed when a company uses a global-area structure.

Accepted Answer

True

Question 3

It is important for corporate managers to be able to identify high-performing and underperforming divisions and to take corrective action as necessary.

Accepted Answer

Identifying high-performing and underperforming divisions is crucial for corporate managers to make informed decisions and take necessary corrective actions to improve company performance.

Question 4

In a firm with a multidivisional structure,corporate managers oversee the actions of divisional managers.

Accepted Answer

In a multidivisional structure, corporate managers are responsible for overseeing and coordinating the actions of divisional managers.

Question 5

SAP is the world's leading supplier of software for the videogame industry.

Accepted Answer

SAP is primarily known for their enterprise resource planning (ERP) software and services, and are not a major player in the video game industry.

Question 6

In a multidivisional structure,corporate managers can compare the performance of one division against another in terms of its cost structure or the profit it generates.

Accepted Answer

In a multidivisional structure, corporate managers have the ability to compare the performance of different divisions based on various factors such as cost structure and profits generated. This comparison helps in identifying the strengths and weaknesses of each division and taking necessary actions to improve their performance. Therefore, the given statement is true.

Question 7

Companies pursue a localization strategy when they want to maximize responsiveness to the unique needs of customers in each country.

Accepted Answer

A localization strategy involves adapting a company's products, services, and marketing to meet the specific needs and preferences of customers in different countries or regions. This can involve tailoring products or services to local languages, cultures, regulations, and distribution channels, among other factors. By doing so, companies can better connect with local customers and gain a competitive edge in each market.

Question 8

In an unrelated multidivisional structure,the idea of corporate culture is meaningless.

Accepted Answer

In an unrelated multidivisional structure, each division operates independently and has its own unique culture. As a result, the idea of a corporate culture that is shared across all divisions is meaningless.

Question 9

Oracle experienced difficulty in understanding its customers' needs and problems because Oracle was not using the very software it sold to other companies.

Accepted Answer

This statement is true according to the given information.

Question 10

Different divisions in a firm with a multidivisional structure are not given authority to adopt their own organizational structures.

Accepted Answer

Different divisions in a firm with a multidivisional structure are given the authority to adopt their own organizational structures. This is because each division operates as a separate entity within the larger organization, and may have unique needs and challenges that require a customized approach to organizing its resources and processes. However, there may be some guidelines or parameters set by the corporate headquarters to ensure consistency and alignment with overall company goals and strategies.

Question 11

Firms pursuing related diversification typically rely more on output control than on culture control.

Accepted Answer

The answer of Firms pursuing related diversification typically rely more...

Question 12

When implementing an international strategy,many companies create global divisions that they add to their existing divisional structures.

Accepted Answer

This statement is true. Many companies create global divisions as a way to coordinate international operations and integrate them into their existing organizational structure.

Question 13

The more interdependent the divisions in a multidivisional structure,the greater are the bureaucratic costs associated with obtaining the potential benefits from a particular strategy.

Accepted Answer

When divisions are highly interdependent, there is a greater need for coordination and communication, which can result in increased bureaucratic costs, such as additional managerial layers, more meetings, and more paperwork. These costs can reduce the potential benefits of a particular strategy.

Question 14

In September 2006,Ford Motor Company announced a plan to sell both its U.S.and global operations.

Accepted Answer

This statement is false. In September 2006, Ford announced a plan to restructure its operations and cut costs, but it did not announce plans to sell its operations.

Question 15

Vertical integration is a less expensive strategy to manage than is unrelated diversification.

Accepted Answer

The answer of Vertical integration is a less expensive strategy...

Question 16

Companies pursue a global standardization strategy when they want to minimize costs.

Accepted Answer

Pursuing a global standardization strategy involves creating and using standardized products, processes, and marketing across all international markets. This can lead to economies of scale, reduced production costs, and increased efficiency, which enables companies to minimize costs.

Question 17

The organizational hierarchy is flatter in a multidivisional structure than in a product or functional structure.

Accepted Answer

The answer of The organizational hierarchy is flatter in a...

Question 18

A firm that is pursuing a localization strategy will typically use a global-area structure.

Accepted Answer

A localization strategy emphasizes adapting products and marketing to local markets. A global-area structure groups countries into regions based on geographic proximity and cultural similarities, which aligns with the localization strategy's focus on local adaptation.

Question 19

Divisional battles may lead to battles over transfer pricing.

Accepted Answer

Divisional battles often occur when different divisions of a company have conflicting interests and goals. One potential area of conflict is transfer pricing, which involves determining the price at which goods or services are transferred between different divisions of the same company. Because transfer pricing can impact the profitability of each division, there may be disagreements and negotiations over what the appropriate price should be, leading to divisional battles.

Question 20

In the multidivisional structure,each division typically contains only a partial set of value chain activities.

Accepted Answer

In the multidivisional structure, each division is responsible for a specific set of value chain activities, but not all of them. This allows for specialization and efficiency within each division.

Quiz 13: Implementing Strategy in Companies That Compete Across Industries and Countries