Deck 9: Executing Strategy Through Organizational Design

Question 1

A functional structure tends to create highly-skilled specialists.

Answer 1

True

Question 2

Horizontal linkages refer to unofficial relationships such as personal friendships, rivalries, and politics.

Answer 2

False

Question 3

Matrix structures rely heavily on horizontal relationships.

Answer 3

True

Question 4

Multidivisional structures tend to be more costly to operate than functional structures.

Question 5

A big advantage of a functional structure is that it allows a firm to act quickly.

Question 6

Strategic decision making in a simple structure tends to be highly centralized.

Question 7

Using a multidivisional structure violates the unity of command principle.

Question 8

Division of labor can improve efficiency.

Question 9

Creating a structure that effectively coordinates a firm's activities increases the firm's likelihood of being successful.

Question 10

A functional structure works best for organizations that offer a wide variety of products lines.

Question 11

Division of labor can improve coordination between different tasks and the people who perform them.

Question 12

Horizontal linkages tie supervisors and subordinates together.

Question 13

Simple organizational structures rely on formal systems of division of labor.

Question 14

Vertical linkages are of great importance when close coordination is needed across different segments of an organization.

Question 15

Multidivisional structures create cross-functional teams that each work on a different project.

Question 16

Horizontal linkages are relationships between equals in an organization.

Question 17

Informal linkages do not appear in organizational charts.

Question 18

Organizations such as engineering and consulting firms that need to maximize their flexibility to service projects of limited duration can benefit from the use of a matrix structure.

Question 19

Vertical linkages are often called committees, task forces, or teams.

Question 20

A functional structure keeps costs low and creates efficiency.

Question 21

Which of the following is a basic building block of an organizational structure?

A) Vertical linkage
B) Horizontal division
C) Lateral linkage
D) Informal linkage
E) Lateral division

Question 22

In the eighteenth century, The Wealth of Nations quantified the tremendous advantages that division of labor offered for a pin factory. The author of this famous book is:

A) Henry Ford
B) Adam Smith
C) Dave Ketchen
D) Jeremy Short
E) John Smith

Question 23

Enchanted Toys Inc., an American toy manufacturing firm, splits up the process of creating a toy into a series of smaller tasks. Each task is performed by a group of people who are specialized in that task. In this example, Enchanted Toys Inc. uses which of the following processes?

A) Division of labor
B) Vertical linkages
C) Unity of command
D) Horizontal linkages
E) Decentralization

Question 24

Output control focuses on measurable results within an organization.

Question 25

Most organizations use a diagram called an organizational chart to depict their _____.

A) growth trajectory
B) consumer profile
C) product life-cycle
D) competitive strategy
E) organizational structure

Question 26

Three basic types of control systems are available to executives: input control, behavioral control, and tribe control.

Question 27

Management by objectives is more effective than clan control in guiding employee behavior.

Question 28

Embracing business fads could lead executives to make bad decisions.

Question 29

Clan control is most appropriate in settings where creativity is vital.

Question 30

________was central to Henry Ford's development of assembly lines in his automobile factory. Ford noted, "Nothing is particularly hard if you divide it into small jobs."

A) Division of labor
B) Vertical linkages
C) Horizontal linkages
D) Informal linkages
E) Hierarchy of authority

Question 31

MBO is a process wherein managers and employees work together to create goals.

Question 32

Which of the following components of an organizational chart ties supervisors and subordinates together?

A) Horizontal linkages
B) Lateral linkages
C) Horizontal divisions
D) Vertical linkages
E) Lateral divisions

Question 33

Behavioral control focuses on controlling the actions that ultimately lead to results.

Question 34

Which of the following is the solution to the challenge created by division of labor- figuring out how to coordinate different tasks and the people who perform them?

A) Concentration strategy
B) Blue ocean strategy
C) Organizational structure
D) Disintermediation
E) Decentralization

Question 35

Most business fads are harmless, and they rarely create any long-term problems for those that embrace them.

Question 36

All profits of a sole proprietorship are the property of the owner.

Question 37

Double taxation is a disadvantage unique to partnerships.

Question 38

Corporations involve the separation of ownership and management.

Question 39

Clan control is an informal type of control.

Question 40

A quality circle is a formal group of employees that meets regularly to brainstorm solutions to organizational problems.

Question 41

_____ show the lines of responsibility through which a supervisor delegates authority to subordinates, oversees their activities, evaluates their performance, and guides them toward improvement when necessary.

A) Horizontal linkages
B) Lateral linkages
C) Informal linkages
D) Vertical linkages
E) Lateral divisions

Question 42

In which of the following organizational structures is an organizational chart not usually needed?

A) A matrix structure
B) A functional structure
C) A multidivisional structure
D) A simple structure
E) A bureaucratic structure

Question 43

Which of the following statements about functional structures is accurate?

A) They do not rely on formal systems of division of labor.
B) They tend to create highly-skilled specialists.
C) They allow a firm to implement strategic moves quickly.
D) They tend to increase costs and reduce efficiency.
E) They lead to increased conflicts within departments.

Question 44

Organizations that use a _____ type of organizational structure tend to have very few rules and regulations.

A) matrix
B) functional
C) multidivisional
D) simple
E) bureaucratic

Question 45

_____ are relationships between equals in an organization.

A) Horizontal linkages
B) Lateral linkages
C) Informal linkages
D) Vertical divisions
E) Lateral divisions

Question 46

Which of the following is used by executives when mapping out the vertical linkages in an organizational structure?

A) A gang plank
B) Portfolio planning
C) The BCG matrix
D) The attractiveness-strength matrix
E) The unity of command principle

Question 47

Which of the following best describes vertical linkages?

A) They refer to the relationships between equals in an organization.
B) They tie supervisors and subordinates together.
C) They are often called committees, task forces, or teams.
D) They do not appear in organizational charts but can have a significant influence on how firms operate.
E) They refer to unofficial relationships, such as personal friendships, rivalries, and politics.

Question 48

_____ refer to unofficial relationships such as personal friendships, rivalries, and politics.

A) Horizontal linkages
B) Lateral linkages
C) Informal linkages
D) Vertical linkages
E) Lateral divisions

Question 49

The _____ principle states that each person should only report directly to one supervisor.

A) gang plank
B) bricolage
C) informal linkage
D) division of labor
E) unity of command

Question 50

The process of evaluating and rewarding employee performance tends to be informal in organizations that follow a _____ type of organizational structure.

A) matrix
B) functional
C) multidivisional
D) simple
E) bureaucratic

Question 51

Carlton Group Inc., a firm that manufactures ceramic and porcelain tiles, structures its organization into the following departments: marketing, production, human resources, finance, and customer service. Each employee is grouped into one these departments and each department is headed up by a manager. Carlton Group Inc. is most likely using a _____ organizational structure.

A) matrix
B) functional
C) mosaic
D) simple
E) boundaryless

Question 52

Strategic decision making in a _____ organizational structure tends to be highly centralized, with the owner often making all the important decisions.

A) matrix
B) functional
C) multidivisional
D) simple
E) boundaryless

Question 53

If a firm consisting of more than one person is following a _____ organizational structure, tasks tend to be distributed among them in an informal manner rather than each person developing a narrow area of specialization.

A) matrix
B) functional
C) multidivisional
D) simple
E) bureaucratic

Question 54

Which of the following is true about horizontal linkages?

A) They are of great importance when close coordination is needed across different segments of an organization.
B) They show the lines of responsibility through which a supervisor delegates authority to subordinates.
C) They tie supervisors and subordinates together.
D) They do not appear in organizational charts but can have a significant influence on how firms operate.
E) They refer to unofficial relationships, such as personal friendships, rivalries, and politics.

Question 55

_____ are of great importance when close coordination is needed across different segments of an organization.

A) Horizontal linkages
B) Lateral linkages
C) Informal linkages
D) Vertical divisions
E) Lateral divisions

Question 56

Which of the following best describes informal linkages?

A) They are relationships between equals in an organization.
B) They show the lines of responsibility through which a supervisor delegates authority to subordinates.
C) They tie supervisors and subordinates together.
D) They are often called committees, task forces, or teams.
E) They refer to unofficial relationships, such as personal friendships, rivalries, and politics.

Question 57

_____ organizational structures do not rely on formal systems of division of labor.

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

Question 58

Paul Kelly is the store manager at the Fresh Produce Grocery Store, in Cincinnati. He has a close friendship with Matthew, who works as a cashier at the store, with whom he shares an interest in comic books and graphic novels. This is an example of which of the following structures?

A) Horizontal linkages
B) Lateral linkages
C) Informal linkages
D) Vertical divisions
E) Lateral divisions

Question 59

_____ are often called committees, task forces, or teams.

A) Horizontal linkages
B) Lateral linkages
C) Informal linkages
D) Vertical divisions
E) Lateral divisions

Question 60

Claire is the owner and chef at Vanilla and Sugar, a cafe that also offers a range of baked products. Claire employs two people who help her with various tasks at the cafe. At Vanilla and Sugar, tasks tend to be distributed among the two employees in an informal manner rather than each person developing a narrow area of specialization. Vanilla and Sugar is most likely to have a _____ structure.

A) simple
B) functional
C) multidivisional
D) matrix
E) bureaucratic

Question 61

McDonald's experienced a situation where the French division of the company ran a surprising advertisement in a magazine that included a quote from a nutritionist that asserted children should not eat at a McDonald's more than once per week. McDonald's executives in Chicago were concerned about the message sent to their customers, and they made it clear that they strongly disagreed with the nutritionist. What kind of organization structure empowers divisions to act quickly, but can lead to actions that do not fit with the company's overall strategy?

A) A multidivisional structure
B) A functional structure
C) A mosaic structure
D) A matrix structure
E) A connected structure

Question 62

A functional structure differs from a simple structure in that a functional structure:

A) does not require an organizational chart.
B) relies on a formal system of division of labor.
C) promotes informal distribution of tasks amongst employees.
D) tends to have very few rules and regulations.
D) tends to use an informal process of evaluating and rewarding employee performance.

Question 63

A multidivisional structure can be costly because, when a company has seven divisions like GE that each require special skills and knowledge, it can reduce a company's profit margin. In GE's case, departments devoted to important aspects of public relations, business development, legal, global research, human resources, and finance are maintained centrally to provide services to all seven divisions. This creates ________ and saves money.

A) opportunities
B) accessibility
C) consistency
D) sustainability
E) efficiency

Question 64

Conflicts within departments are relatively rare in organizations that follow a _____ structure because all the people in a particular department share the same background and training, and as such, they tend to get along with each other.

A) matrix
B) functional
C) mosaic
D) simple
E) multidivisional

Question 65

A _____ structure can help develop new managers by putting a person without managerial experience in charge of a relatively small project as a test to see if the person has a talent for leading others.

A) multidivisional
B) functional
C) mosaic
D) matrix
E) connected

Question 66

Which of the following statements represents a challenge associated with matrix structures?

A) Each employee is assigned one direct boss.
B) Creates opportunities for unsavory employees to avoid responsibility.
C) Create cross-functional teams that each work on different projects.
D) Organizations have a difficult time developing new managers.
E) Communication across functional lines is difficult and confusing.

Question 67

_____ control focuses on measurable results within an organization.

A) Behavioral
B) Hierarchical
C) Informal
D) Clan
E) Output

Question 68

Which of the following statements about matrix structures is accurate?

A) They do not rely on formal systems of division of labor.
B) They divide employees into departments based on product areas and/or geographic regions.
C) They work best for organizations that offer narrow and stable product lines.
D) They violate the unity of command principle.
E) They tend to rely heavily on vertical linkages.

Question 69

Employees at Pinetree Publications, a book publishing firm based in New York, are divided into departments based on product areas, such as academic books, autobiographies, fiction, and politics. Pinetree Publications is most likely using which of the following organizational structures?

A) functional
B) simple
C) matrix
D) boundaryless
E) multidivisional

Question 70

In-fighting and politics among project managers around the issue of what people are assigned to each project is a potential concern for organizations following a _____ structure.

A) multidivisional
B) functional
C) boundaryless
D) matrix
E) simple

Question 71

Which of the following is a disadvantage of using a functional structure?

A) Reduced specialization.
B) Slow execution of strategic changes.
C) Increased costs.
D) Increased inefficiency.
E) Informal distribution of tasks.

Question 72

One of the main reasons for changing an organization's structure is improving:

A) analysis
B) efficiency
C) control
D) output
E) functions

Question 73

Which of the following is true about behavioral control?

A) It is often used in settings where creativity is vital.
B) It is an informal type of control.
C) It focuses on controlling the actions that ultimately lead to results.
D) It relies on shared expectations and values of employees.
E) It focuses on measurable results within an organization.

Question 74

Because _____ structures are slow to execute change, they tend to work best for organizations that offer narrow and stable product lines.

A) multidivisional
B) functional
C) mosaic
D) simple
E) boundaryless

Question 75

_____ control is an informal type of control.

A) Behavioral
B) Hierarchical
C) Qualitative
D) Clan
E) Output

Question 76

Which of the following organizational structures relies heavily on horizontal relationships?

A) A multidivisional structure
B) A functional structure
C) A mosaic structure
D) A matrix structure
E) A connected structure

Question 77

_____ allow executives to track how well the organization is performing, identify areas of concern, and then take action to address the concerns.

A) Organizational charts
B) Management by objectives
C) Pareto analyses
D) Concentration strategies
E) Organizational control systems

Question 78

A big advantage of a _____ structure is that it allows a firm to act quickly.

A) multidivisional
B) functional
C) mosaic
D) boundaryless
E) bureaucratic

Question 79

The dress codes that are enforced within many organizations are an example of _____ control.

A) behavioral
B) hierarchical
C) informal
D) clan
E) output

Question 80

_____ control relies on shared traditions, expectations, values, and norms to lead people to work toward the good of their organization.

A) Behavioral
B) Hierarchical
C) Quantitative
D) Clan
E) Output