Deck 12: Implementing Strategy in Companies That Compete in a Single Industry

Question 1

A product structure requires that support activities from a company's value chain be decentralized so that independent specialists in support activities exist within each product group.

Answer 1

False

Question 2

Organizational structure contributes to the strategy formulation by providing the framework of tasks and roles that reduces transaction difficulties and allows employees to think and behave in ways that allow a company to achieve superior performance.

Answer 2

False

Question 3

Effective organizational design can allow a company to obtain a competitive advantage but it has no impact on profitability.

Answer 3

False

Question 4

Control systems can help managers evaluate how efficiently they are producing goods and services.

Question 5

For each function,a cost leader adopts output controls that allow it to monitor and evaluate functional performance closely.

Question 6

Effective strategy implementation is very important for cost leaders,but it is of less importance to differentiators.

Question 7

The purpose of organizational structure is to provide managers with specific feedback on how well an organization and its members are performing and building competitive advantage.

Question 8

Controls at each level should provide the basis on which managers at the levels below design their control systems.

Question 9

An important purpose of control systems is to motivate employees to work toward increasing efficiency,quality,innovation,and responsiveness to customers.

Question 10

Flat structures can lead to information distortion when data are being sent either up or down the hierarchy.

Question 11

Building capabilities in organizational design that allow a company to develop a competitive advantage starts at the functional level.

Question 12

The need for integrating mechanisms is greater when a company's structure is more complex.

Question 13

The reward system affects motivation,however,the type of organizational culture that develops in a company is primarily affected by the founder's values and not the reward system.

Question 14

Research finds that centralization of authority is never advantageous,not even in time of crisis.

Question 15

Span of control refers to the number of subordinates who report directly to one supervisor.

Question 16

Control through culture is so powerful because once values have been internalized,individuals follow them without thinking about them.

Question 17

When companies become too tall and the chain of command too long,strategic managers tend to lose control over the hierarchy and,subsequently,their strategies.

Question 18

Information technology (IT)is playing an increasing role in strategy formulation.However,strategy implementation is not affected by IT in general.

Question 19

In 1995,Dell Computer changed its organization structure from a market structure to a functional structure and created separate divisions.This change would better serve its different groups of customers.

Question 20

A division is a way of grouping functions to allow an organization to better produce and dispose of its goods and services.

Question 21

Which of the following integrating mechanisms consists of one manager from each relevant function or division assigned to a team that meets to solve a specific mutual problem?

A) Direct contact
B) Liaison roles
C) Teams
D) Integrating roles
E) The matrix structure

Question 22

Information technology (IT)would be least helpful to managers who are addressing issues of

A) behavior control.
B) output control.
C) integration.
D) organizational culture.
E) standardization.

Question 23

Wal-Mart is a large,complex organization.It most likely utilizes a flat organizational structure.

Question 24

Bradley is a new employee in the sales department at a local Ford dealership.In his first few months on the job,he will be learning the organizational culture which is called organizational socialization.

Question 25

Control through organizational culture is so powerful because

A) it reduces the costs of organizational control in a large company.
B) self-control develops through the establishment of an internal system of organizational values.
C) it results in maximum decentralization and the elimination of bureaucracy.
D) it achieves increased performance through the alignment of organizational goals with societal expectations.
E) it achieves external control through motivated coworkers.

Question 26

Within a firm,a function is made up of workers who

A) perform the same types of tasks or hold similar positions.
B) are paid the same amount of compensation.
C) work at the same hierarchical level (for example, all middle managers).
D) have the same background and education.
E) have the same job title (for example, all are vice presidents).

Question 27

Control systems

A) enable a company to evaluate its performance.
B) help managers determine which generic strategy to pursue.
C) are used only at the business level.
D) allow firms to control the external environment.
E) are most effective for firms pursuing cost leadership.

Question 28

Restructuring always involves flattening the organizational hierarchy and downsizing the work force.

Question 29

Control through organizational culture

A) is less expensive than output control.
B) reduces mutual adjustment.
C) involves employees internalizing the norms and values of the organization.
D) includes setting individual goals.
E) reduces mutual adjustment and includes setting individual goals.

Question 30

One of the main differences between a product team and a team in a matrix structure is that a matrix team is more permanent than a team in a product structure.

Question 31

Cypress Semiconductor utilizes a computer-based information system.Such a system would allow managers to manage what employees and teams do in this decentralized organization.

Question 32

Standardization is a form of

A) output control.
B) financial control.
C) organizational inertia.
D) organizational culture.
E) behavior control.

Question 33

In manufacturing,functional strategy usually centers on improving efficiency and quality.

Question 34

Flat organizational structures are characterized by

A) few levels of management and a relatively narrow span of control.
B) few levels of management and a relatively wide span of control.
C) many levels of management and a relatively narrow span of control.
D) many levels of management and a relatively wide span of control.
E) none of these choices.

Question 35

Which of the following is not one of the company levels where strategic control systems measure performance?

A) Board of directors
B) Corporate
C) Divisional
D) Functional
E) Individual

Question 36

Johnson & Johnson is organized into Consumer,Medical,and Pharmaceutical units to serve the needs of its different customer groups.Johnson & Johnson is using a market structure.

Question 37

Union Pacific,one of the largest freight carriers in the United States,has a centralized organizational structure.The size of the company with such a structure has a potential for creating costly problems.

Question 38

When decision-making responsibilities are decentralized,benefits include all of the following except

A) increased motivation and accountability.
B) lower bureaucratic costs from flattened hierarchy.
C) reduced information overload.
D) easier coordination.
E) all of these are benefits of decentralization.

Question 39

Standardization is employed to squeeze out costs in manufacturing.Standardization may be achieved through standardization of

A) inputs.
B) work processes.
C) outputs.
D) work processes and outputs.
E) inputs, work processes, and outputs.

Question 40

Fortunately,whenever different functions work together,bureaucratic costs inevitably declines.

Question 41

Which of the following actions would you expect to see in a company that is undergoing a reengineering?

A) Hiring more managers
B) Hiring more workers
C) Examining activities from a customer's point of view
D) Investing more in product research and development (R&D)
E) Centralizing decision-making authority

Question 42

Restructuring is

A) a rethinking and redesign of a firm's business processes.
B) a radical readjustment of the organization's staffing and hierarchy.
C) a philosophy that states that mistakes, defects, and poor-quality materials are not acceptable and should be eliminated.
D) the shift that firms make from a functional to a more complex structure as the firm grows in complexity and size.
E) employed when a firm needs help in improving its functional strategies.

Question 43

Companies that are innovative and able to deal with environmental change with new strategies and structures probably have

A) weak cultures.
B) strong functional cultures.
C) adaptive cultures.
D) prescriptive cultures.
E) matrix structures.

Question 44

The degree to which a company specifies how decisions are to be made so that employees' behavior becomes predictable is referred to as

A) uniformity of output.
B) conformity of behavior.
C) standardization.
D) maximization of effort.
E) behavioral control.

Question 45

Which of the following structures is the flattest?

A) Functional
B) Geographic
C) Market
D) Matrix
E) Product

Question 46

Which of the following is required by a restructuring?

A) Eliminating business units
B) Rethinking business processes
C) Creating more business units
D) Flattening the organizational hierarchy
E) Broadening the span of control

Question 47

As a general principle,a company should always choose the hierarchal organization structure that has the

A) most levels of authority.
B) fewest levels of authority.
C) greatest number of people.
D) least number of people.
E) none of these

Question 48

If a firm finds that its functional structure is becoming too awkward as the firm grows in size and complexity,the firm can turn to

A) a simple structure.
B) downsizing.
C) reengineering.
D) restructuring.
E) outsourcing.

Question 49

Which form of control would you be most likely to find in a voluntary or charity organization?

A) Bureaucratic control through rules and procedures
B) Control through norms and values
C) Financial control through accurate financial statements
D) Output control
E) Incentive systems

Question 50

A drawback of the functional structure is

A) that each worker must report to more than one superior.
B) the difficulty in communicating and coordinating across functions.
C) too much decentralization of decision-making authority.
D) its lack of flexibility.
E) the need to downsize before implementing this structure.

Question 51

Essentially,centralization or decentralization are concepts that refer to the

A) levels where decisions are made in an organization.
B) number of hierarchical levels existing in an organization.
C) numbers of managers in an organization.
D) number of employees in an organization.
E) none of these.

Question 52

Which of the following is not one of the advantages of a geographic structure?

A) Cost inefficiencies from issues of scope
B) Responsiveness to the needs of regional customers
C) Lower transportation costs
D) More coordination and control than a functional structure
E) Centralization of key activities and functions that allow leveraging skills across regions

Question 53

A hospital examines its processes closely and then changes them radically to become more patient-centered.Among the changes are new ways of doing tasks and new groupings of workers.This is an example of

A) restructuring.
B) reengineering.
C) total quality management (TQM).
D) benchmarking.
E) downsizing.

Question 54

A matrix structure would be the most appropriate for which of the following firms?

A) A large multinational company with a distinctive competence in marketing
B) A company operating in the maturity stage of the industry life cycle
C) A medium-sized technological firm with an objective of fast product development time
D) A company with a high level of vertical differentiation
E) A company pursuing a cost-leadership strategy

Question 55

Matrix structures

A) have many hierarchical levels.
B) are appropriate for companies with many low-skilled workers.
C) group activities vertically by function and horizontally by product or project.
D) are appropriate for a firm pursuing a low-cost strategy.
E) have many hierarchical levels and two forms of horizontal differentiation.

Question 56

The process of deciding how a company should create,use,and combine organizational structure,control systems,and culture to pursue a business model successfully is referred to as

A) organizational structuring.
B) corporate systems design.
C) organizational design.
D) departmentalization.
E) structural landscaping.

Question 57

To a large degree,any organization's tasks are a function of its

A) market area.
B) labor supply.
C) supervisors.
D) strategy.
E) compensation plan.

Question 58

Which of the following structures requires centralization of value chain support activities?

A) The product structure
B) The product team structure
C) The matrix structure
D) The product and product team structures
E) The matrix and product team structures

Question 59

A cost-leadership strategy would be most effective with

A) output controls.
B) personal controls.
C) behavioral controls.
D) cultural controls.
E) no controls.

Question 60

A stereo manufacturer sells only leading-edge stereos to the upscale segment.Which of the following structures is the most appropriate for this firm?

A) Matrix
B) Multidivisional
C) Geographic
D) Functional
E) Simple

Question 61

In any organization,for-profit or not-for-profit,span of control refers to the

A) number of managers at the highest levels in the organization.
B) the CEO and his or her management team.
C) the number of subordinates who report directly to one manager.
D) the number of supervisors in a specific segment of a manufacturing activity.
E) none of these choices.

Question 62

Strategic control systems utilized to ensure long-run profitability include

A) personal control.
B) output control.
C) behavior control.
D) all of these.
E) none of these.

Question 63

A functional organizational structure offers a company which of the following advantages?

A) Specialization of activities leading to greater productivity
B) More efficient production activities
C) Greater control of activities by managers
D) All of these
E) None of these

Question 64

Describe the roles that organizational structure,strategic control systems,and organizational culture play in strategy implementation.

Question 65

The organization structure that organizations most commonly adopt to solve control problems that result from producing many different kinds of products for many different market segments is the

A) functional structure.
B) process structure.
C) matrix structure.
D) product structure.
E) differentiated structure.

Question 66

When a company engages in restructuring,it may be necessary to

A) increase the size of the work force.
B) increase the number of organizational levels.
C) lay off employees.
D) add to the operating costs.
E) none of these.

Question 67

A typical matrix organizational structure is

A) flat and decentralized.
B) flat and centralized.
C) tall and decentralized.
D) tall and centralized.
E) none of these.

Question 68

Identify and discuss the three building blocks of organizational structure.

Question 69

At Tyco Inc.,rules are published at the cubicle of all employees stating what is expected of them regarding time to arrive,time for lunch,when to take breaks,and when to socialize.This is an example of which of the following?

A) Output control
B) Personal control
C) Behavior control
D) Conversion activities
E) Strategic competencies

Question 70

An organization that has an adaptive culture is an organization that is

A) innovative.
B) resistant to major changes.
C) supportive of managers who take the initiative and make changes on their own.
D) A and C.
E) B and C.

Question 71

In a successful company,the purpose of a control system is to

A) provide managers with a set of incentives to motivate employees to work toward company goals.
B) provide managers with specific feedback on how well the organization and its members are performing.
C) provide managers with information that can be used to criticize employee performance objectively.
D) A and B.
E) B and C.

Question 72

At Zappos.com,the environment is a playful one.Employees often get their pictures taken wearing silly wigs and ring cowbells to greet guests who come into the organization.This atmosphere is part of the company's

A) orgaizational design.
B) organizational structure.
C) organizational culture.
D) strategic control systems.
E) competitive environment.

Question 73

Natalie and Shay are both employees at XYZ Company.Natalie,the marketing manager,often meets with Shay,the production manager in order to solve specific mutual problems.This is an example of which of the following?

A) A team
B) Liaison roles
C) Direct contract
D) Diverging mechanisms
E) Strategic control system

Question 74

The term used to describe how people learn an organization's culture and way of behaving in the organization is

A) organizational structure.
B) organizational development.
C) organizational design.
D) organizational behavior.
E) organizational socialization.

Question 75

The specific collection of values,norms,beliefs,and attitudes shared by people and groups in a company is commonly referred to as

A) organizational fit.
B) organizational culture.
C) organizational development.
D) organizational positioning.
E) all of these.

Question 76

Describe what is meant by the terms restructuring and reengineering,and discuss when and why they would be used.

Question 77

Consider the case of a family-run business that operates one small local retail shop and its subsequent expansion into more locations and more stores.Describe the changes that are likely to take place in that business's organizational structure as it grows in size,geographic dispersion,and complexity.Tell why the changes are beneficial for the business.

Question 78

Organizations strive to control employees' behavior by linking ____ systems to their control systems.

A) computer
B) disincentive
C) reporting
D) administrative
E) reward