TerraLoc competes in the market for global positioning devices and services. The company manufactures its own GPS units, which are smaller than those of any other competitor and include a proprietary battery that lasts 200% longer than any other competitor's battery and that TerraLoc manufacturers on-site. TerraLoc also has developed proprietary software that is much faster and more precise than that of any competitor. When developing the proprietary battery, TerraLoc decided to manufacturer the battery in-house to reduce the possibility that the company it outsourced the battery manufacturing to might reverse engineer the battery and sell a similar product to competitors. This possibility was especially troubling given that the company expected a significant increase in demand due to the improved battery life. Additionally, TerraLoc sells its products and services through its own direct sales force to ensure that its representatives highlight the longer battery life of TerraLoc's units.
-TerraLoc is most likely to use the ________ organizational structure.
A) matrix
B) product-based multidivisional
C) functional
D) geography-based multidivisional

Question

Quizplus · Accepted Answer

TerraLoc's organizational structure is focused on manufacturing its proprietary GPS units and battery in-house to ensure quality control and prevent reverse engineering. This suggests a functional organizational structure where departments are organized by specialized functions such as manufacturing, research and development, and sales. In this structure, each department has a specific role to play in the production and sale of the product, and there is a clear chain of command. The other options, such as matrix, product-based multidivisional, and geography-based multidivisional, do not align with TerraLoc's specific focus on in-house manufacturing and direct sales.

TerraLoc Competes in the Market for Global Positioning Devices and Services