Question 1

Company Zeta is a company that hires employees based on their ability to fit into the ten core values of the company. There is a team dedicated to setting up fun events, lunches and programs. Employee team building is stimulated through the group cleaning of communal spaces and random group lunches with employees from different teams within the company. These strategies are an example of addressing which of the following?
A) Organizational architecture
B) Organizational structure
C) Organizational processes
D) Organizational culture
E) Organizational controls

Accepted Answer

The strategies mentioned are all focused on building and promoting a specific company culture, which is an aspect of organizational culture.

Question 2

Company Beta is looking for a strategy to boost its performance due to an increasingly tougher competitive environment. Bureaucratic inefficiencies associated with a tall hierarchy have been identified. Company Beta has decided to lay off people and reduce the number of layers in the hierarchy from nine to five. This move has grown Beta's profits and revenues. This strategy is called delayering.

Accepted Answer

The given scenario describes a delayering strategy where Company Beta has reduced the layers in its organizational hierarchy to improve efficiency, and this has led to an increase in profits and revenues.

Question 3

PeopleFinder, a start-up social media network, is a decentralized organization. This means that the organization promotes flexibility and reduces bureaucratic costs; lower-level managers are authorized to make on-the-spot decisions.

Accepted Answer

The statement describes the characteristics of a decentralized organization, and PeopleFinder is identified as one.

Question 4

Which of the following is NOT an element of organizational architecture?
A) Location
B) Culture
C) Processes
D) Structure
E) People

Accepted Answer

While location is an important factor for businesses, it is not considered an element of organizational architecture. Organizational architecture typically includes the design of a company's structure, processes, culture, and people.

Question 5

Which form of control would you MOST likely 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, since it is the cheapest
E) Incentive systems to motivate employees

Accepted Answer

In a voluntary or charity organization, individuals are motivated by shared values and beliefs rather than strict rules and procedures. Therefore, control through norms and values would be the most likely form of control in these types of organizations. Financial control (C) and output control (D) may be important, but not necessarily the primary form of control. Incentive systems (E) may also be used to motivate and reward volunteers, but again, not the primary form of control.

Question 6

The purpose of which of the following is to provide managers with incentives for motivating employees as well as feedback on how the company performs?
A) Control system
B) Adaptive culture
C) Organizational design
D) Span of control
E) Hierarchy of authority

Accepted Answer

Control system is designed to provide feedback to managers about how the company is performing and to motivate employees. It is a mechanism for monitoring and adjusting performance to achieve desired outcomes. It includes various performance measures, targets, and incentives that are used to align the behavior of employees with the objectives of the organization. The control system helps managers to identify areas of improvement and implement corrective action when necessary.

Question 7

Matrix structure and teams are favored by firms in stable and low technology environments due to the high need for coordination and complex integration mechanisms.

Accepted Answer

Matrix structure and teams are actually favored by firms in complex and high-technology environments, where there is a need for flexible and fast responses to changing market conditions. In stable and low technology environments, more traditional hierarchical structures may be sufficient for coordination and integration.

Question 8

​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.

Accepted Answer

A matrix team is generally temporary and created to accomplish a specific project, while a product team is focused on a particular product and is a more permanent structure within the organization.

Question 9

​To build capabilities in organizational design that would allow a company to develop a competitive advantage, strategic managers must start at the functional level.

Accepted Answer

Starting at the functional level enables strategic managers to identify areas where organizational design can be improved for greater efficiency and effectiveness. This sets the foundation for building a competitive advantage by streamlining processes and optimizing resources at all levels of the organization.

Question 10

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

Accepted Answer

The more complex a company's structure, the more departments and functions there are to coordinate and communicate with each other. This necessitates the need for integrating mechanisms, such as cross-functional teams, task forces, or committees, to ensure that all parts of the company are working towards a common goal and that information flows smoothly between them.

Question 11

Organizational culture is the:
A) norms and value systems that are shared among the employees of an organization.
B) means through which a company assigns employees to specific tasks and roles and specifies how these tasks and roles are to be linked together to increase efficiency, quality, innovation, and responsiveness to customers.
C) process of deciding how a company should create, use, and combine organizational structure, control systems, and culture to pursue a business model successfully.
D) clear and unambiguous chain of command that defines each manager's relative authority from the CEO down through top, to middle, to first-line managers.
E) principle that a company should design its hierarchy with the fewest levels of authority necessary to use organizational resources effectively.

Accepted Answer

Organizational culture refers to the shared values, beliefs, behaviors, attitudes, and norms that define the way things are done in an organization. This culture shapes the identity and personality of the organization and affects how employees interact with each other, customers, and the external environment. The other choices describe other aspects of organizational design and management, such as organizational structure, control systems, business models, and hierarchy, but do not capture the essence of organizational culture.

Question 12

Control through organizational culture is so powerful because it:
A) eliminates the need for managers in large companies.
B) enables employees to follow organizational values, after they've internalized them, without thinking about them.
C) results in maximum decentralization and the elimination of bureaucracy.
D) achieves increased performance through the alignment of organizational goals with external societal expectations.
E) achieves external control through motivated coworkers.

Accepted Answer

Organizational culture helps to shape the behavior of employees by establishing values and norms that are expected to be followed. When employees internalize these values, they will act in accordance with them without needing to be explicitly directed by managers. This results in a powerful form of control that is not reliant on hierarchical structures but rather on a shared belief system within the organization.

Question 13

Tom's leads a team at Empire Holdings. The team's responsibilities are to develop courses of action that decide how to allocate resources within a firm, how new products are developed, and how the performance of managers will be evaluated and given feedback. Tom's team is responsible for which of the following?
A) Organizational architecture
B) Organizational structure
C) Organizational processes
D) Organizational culture
E) Organizational controls

Accepted Answer

Tom's team is responsible for developing courses of action for how resources are allocated, new products are developed, and how performance is evaluated and given feedback, which all fall under the category of organizational processes.

Question 14

Flat organizational structures are less flexible and tend to resist change.

Accepted Answer

Flat organizational structures are actually more flexible and promote change due to their horizontal communication channels and lack of strict hierarchy. It is the traditional, hierarchical structures that tend to resist change.

Question 15

Walmart is an example of a business that uses a centralized vertical differentiation strategy because all purchasing decisions are made at its headquarters in Arkansas which allows them to take advantage of their bargaining power, driving down costs and passing on those savings to consumers in the form of lower prices, which enables the company to grow its market share and profits.

Accepted Answer

Walmart's centralized purchasing approach is a key aspect of its vertical differentiation strategy, enabling it to negotiate better deals with suppliers and offer competitive prices to customers.

Question 16

Silica Dustcloud Inc. plans to change its organization structure from a market structure to a functional structure and create separate divisions. This change will better serve its different groups of customers.

Accepted Answer

Switching to a functional structure means organizing departments by their function within the company (e.g., marketing, finance, HR) rather than focusing on serving different groups of customers, which is more characteristic of a market structure.

Question 17

In a business with a matrix structure and a high degree of integration, this dynamic environment calls for bureaucratic controls to be used for financial budgets and output controls to be applied to the different functions and to cross-functional product development teams.

Accepted Answer

In a matrix structure with high integration, bureaucratic controls (such as financial budgets) are necessary to maintain consistency and accountability, while output controls are used to ensure performance and coordination among different functions and teams.

Question 18

Decentralization and centralization decisions are absolute for the entire business, it doesn't make sense to centralize some decisions and decentralize others, depending on the type of decision and the firm's strategy because it causes confusion among business units.

Accepted Answer

Decentralization and centralization are not absolute and can coexist within the same organization. Businesses often centralize strategic decisions at the higher levels while decentralizing operational decisions to lower levels to leverage local knowledge and increase responsiveness, without necessarily causing confusion.

Question 19

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.

Accepted Answer

When a company becomes too tall, there are too many levels of management between the top-level strategic managers and lower-level employees, which can lead to miscommunication and inefficiencies, making it difficult for strategic managers to ensure their strategies are being implemented effectively.

Question 20

Which of the following is responsible for the establishment and maintaining of organizational culture?
A) The culture of an enterprise can be shaped by landmark events in its history
B) Formal and informal socialization mechanisms
C) Founders or important leaders can have a profound impact on organizational culture
D) Informal rules of behavior that employees are expected to adopt if they want to fit in and succeed within the organization
E) All of these are responsible for the establishment and maintaining of organizational culture.

Accepted Answer

All of these (A, B, C, D) are responsible for the establishment and maintaining of organizational culture. The culture of an organization can be shaped by significant events in its history, formal and informal socialization mechanisms, the influence of founders or important leaders, and the informal rules of behavior that employees are expected to adopt. All of these factors together contribute to the establishment and maintenance of organizational culture.

Quiz 12: Implementing Strategy Through Organization

PeopleFinder, a start-up social media network, is a decentralized organization. This means that the organization promotes flexibility and reduces bureaucratic costs; lower-level managers are authorized to make on-the-spot decisions.

Which of the following is NOT an element of organizational architecture?

Which form of control would you MOST likely find in a voluntary or charity organization?

The purpose of which of the following is to provide managers with incentives for motivating employees as well as feedback on how the company performs?

Matrix structure and teams are favored by firms in stable and low technology environments due to the high need for coordination and complex integration mechanisms.

​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.

​To build capabilities in organizational design that would allow a company to develop a competitive advantage, strategic managers must start at the functional level.

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

Organizational culture is the:

Control through organizational culture is so powerful because it:

Flat organizational structures are less flexible and tend to resist change.

Silica Dustcloud Inc. plans to change its organization structure from a market structure to a functional structure and create separate divisions. This change will better serve its different groups of customers.

In a business with a matrix structure and a high degree of integration, this dynamic environment calls for bureaucratic controls to be used for financial budgets and output controls to be applied to the different functions and to cross-functional product development teams.

Decentralization and centralization decisions are absolute for the entire business, it doesn't make sense to centralize some decisions and decentralize others, depending on the type of decision and the firm's strategy because it causes confusion among business units.

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.

Which of the following is responsible for the establishment and maintaining of organizational culture?

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.

To build capabilities in organizational design that would allow a company to develop a competitive advantage, strategic managers must start at the functional level.

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