Question 1

Numerous activities are duplicated in a ________ structure.

Accepted Answer

In a multidivisional structure, each division operates as a separate entity with its own resources and functions, leading to duplication of activities across divisions.

Question 2

When a company must change a product's characteristics quickly to respond to changing customer preferences, a structure is most appropriate.

Accepted Answer

A product team structure is designed to quickly respond to changes in customer preferences by establishing cross-functional teams to develop, design, and produce new products. This structure is ideal when there is a need for product adaptation and innovation.

Question 3

The IS department of a large organization decides to sell its information to the other divisions in order to better track profits. This is called ________.

Accepted Answer

The practice of selling information or goods from one division to another within a company is known as transfer pricing. In this scenario, the IS department is selling information to the other divisions in order to better track profits, which is an example of transfer pricing.

Question 4

A computer manufacturer sells computers online to individual customers, and also has sales reps in the field that market the same computer systems to large businesses. Which of the following structures would be most appropriate for this organization?

Accepted Answer

A market structure would be most appropriate as it allows the organization to focus on different customer segments, such as individual customers and large businesses, tailoring their strategies and operations to meet the specific needs of each market.

Question 5

Which of the following structures is the flattest?

Accepted Answer

Matrix is the flattest structure as it has no clear hierarchy and employees report to multiple managers.

Question 6

The creation of an internal labor market is an advantage of the ________ structure.

Accepted Answer

The multidivisional structure creates an internal labor market by allowing employees to move between divisions, which can lead to increased employee development and retention.

Question 7

Chrysler moved from a ________ structure to a ________ structure.

Accepted Answer

Chrysler moved from a divisional structure to a product team structure. This shift allowed for greater coordination between functions and divisions, as well as more efficient decision-making and faster product development.

Question 8

Deciding how much decision-making authority to centralize at corporate headquarters and how much to decentralize to the divisions can be a disadvantage of the ________ structure.

Accepted Answer

The question specifically mentions the disadvantage of deciding how much decision-making authority to centralize or decentralize, which is a key feature of the multidivisional structure. Therefore, B is the best choice. The other structures mentioned (matrix, product division, and functional) may have their own advantages and disadvantages, but they are not directly related to the centralization or decentralization of decision-making authority.

Question 9

A ________ structure has specialists from support functions combined into product development teams that specialize in the needs of a particular kind of product.

Accepted Answer

The description given clearly matches the definition of a product team structure - where specialists from support functions are combined into teams that specialize in the development of a specific product. The other options listed do not fit this description as well.

Question 10

Which of the following is not a divisional structure?

Accepted Answer

A matrix structure is a type of divisional structure that combines functional and product-based divisions. Product team, market, and geographic structures are all examples of divisional structures.

Question 11

Bureaucratic costs are greatest in a ________ structure.

Accepted Answer

Bureaucratic costs refer to the expenses incurred in maintaining a bureaucratic system, such as formal hierarchy, standard procedures, and rules and regulations. In a multidivisional structure, where the organization is divided into several semi-autonomous units, each with its own management team and resources, there is a higher likelihood of bureaucratic costs since there are more layers of authority and decision-making. This can lead to duplication of efforts, lack of coordination, and slower response times, all of which contribute to higher costs. In contrast, a market structure, where the organization operates in a highly competitive environment and is driven by customer demand, tends to have fewer bureaucratic costs since it requires flexibility and responsiveness rather than rigid structures and procedures. A geographic or product division structure may have some bureaucratic costs, depending on their level of centralization and standardization.

Question 12

Transfer pricing is most commonly used in a ________ structure.

Accepted Answer

Transfer pricing is most commonly used in a multidivisional structure, where different units or divisions are responsible for different products or services. This allows for the transfer of goods or services between divisions to be priced appropriately, avoiding overcharging or undercharging, and ensuring that each division is fairly compensated for its contributions. Geographic or product team structures may also utilize transfer pricing, but it is typically not as common as in a multidivisional structure. A product division structure is similar to a multidivisional structure and may also utilize transfer pricing.

Question 13

Decision making is most decentralized in a ________ structure.

Accepted Answer

Product team structure is most decentralized in terms of decision making since each team is responsible for making their own decisions regarding their respective products. This structure allows for a faster and more efficient decision-making process because the team members have more expertise in their area of specialization. In contrast, geographic and functional structures are more centralized, with top-level management making most of the decisions, and product division structures have some decentralization but not as much as product team structures.

Question 14

A geographic structure is most appropriate for which of the following companies?

Accepted Answer

A geographic structure is suitable for a retailer operating in multiple regions, as it allows the company to tailor its strategies and operations to the specific needs and preferences of each region.

Question 15

A market structure organizes people according to:

Accepted Answer

The answer of A market structure organizes people according to:
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Question 16

Which of the following is an advantage of the multidivisional structure?

Accepted Answer

The multidivisional structure creates an internal labor market where employees can be transferred or promoted across different divisions, providing opportunities for career advancement and job security. This can lead to increased employee motivation and retention. However, the other options are not advantages of the multidivisional structure. Decentralization may increase development time but may also lead to coordination problems. Information sharing may be difficult between different divisions, and bureaucratic costs may increase due to the need for more management layers to oversee each division.

Question 17

Which of the following is a difference between the product team and the matrix structures?

Accepted Answer

In a matrix structure, employees move between teams based on the project or product they are working on, while in a product team structure, employees are dedicated to one specific product and do not move between teams. The other options are incorrect: A) hierarchy is not necessarily linked to the type of structure, C) is the opposite of what actually happens in a product team structure, and D) is not a unique characteristic of either structure, as some matrix structures may also have dual reporting.

Question 18

Hallmark organized around categories of greeting cards such as Mother's Day cards and Christmas cards. This structure is called ________.

Accepted Answer

Hallmark organized around specific products, in this case, categories of greeting cards. This structure is known as a product team structure.

Question 19

A ________ structure organizes divisions according to the requirements of the different locations in which an organization appears.

Accepted Answer

A geographic divisional structure is designed to group activities based on the specific needs and demands of different geographic regions. This structure is ideal for organizations that operate in multiple regions with distinct market characteristics, customer preferences, and legal requirements. By creating separate divisions for each geographic location, companies can tailor their strategies, products, and services to the unique needs of each market. This structure also helps companies to build local expertise, foster stronger relationships with customers and suppliers, and respond quickly to regional changes and opportunities.

Question 20

Wal-Mart needs to meet global customer needs, so it has a ________ structure.

Accepted Answer

A market structure would allow Wal-Mart to focus on meeting the specific needs and preferences of different customer markets across the globe. This can be achieved through localized marketing, product assortment, and pricing strategies. A team structure, where employees work together to accomplish specific goals, may also be important, but it is not directly related to meeting global customer needs. A product division structure may be too focused on internal product categories and not flexible enough to adapt to diverse global markets. A functional structure may be necessary for internal organization, but it may not be the best approach for customer-facing activities.

Quiz 6: Designing Organizational Structure: Specialization and Coordination