Question 1

If firms band together in a large number of vertical complementary strategic alliances, there is a danger that the government will suspect them of illegal collusive activities.

Accepted Answer

The answer of If firms band together in a large...

Question 2

For firms in a vertical complementary alliance (such as between Toyota and its suppliers), it is more difficult to identify the strategic center firm than in a horizontal complementary alliance (e.g., airline alliances).

Accepted Answer

The answer of For firms in a vertical complementary alliance...

Question 3

In the hybrid form of the combination structure, some divisions are oriented toward products while others are oriented toward market areas.

Accepted Answer

In the hybrid form of the combination structure, some divisions are oriented toward products while others are oriented toward market areas. This allows for a combination of both product and market focus, which can be beneficial for companies operating in complex and diverse industries.

Question 4

The Chapter 11 Strategic Focus illustrates the use of the competitive form of the multidivisional structure to implement an unrelated diversification strategy by the LG Company.

Accepted Answer

The chapter describes LG's use of the competitive form of the multidivisional structure to pursue an unrelated diversification strategy.

Question 5

The worldwide geographic area structure differs from the worldwide product divisional structure in the level of centralization of decision-making.

Accepted Answer

The worldwide geographic area structure is more decentralized, with decision-making authority dispersed among regional or country managers. In contrast, the worldwide product divisional structure is more centralized, with decision-making authority concentrated at the top of each product division.

Question 6

Organizational structure

Accepted Answer

Organizational structure specifies the formal aspects of a company, such as reporting relationships, procedures, controls, and decision-making processes. It does not include informal aspects or the firm's value proposition. It may include control mechanisms and grievances procedures, but those are part of the formal structure.

Question 7

Distributed strategic networks are the organizational structure used to manage international cooperative strategies.

Accepted Answer

Distributed strategic networks, also known as network structures, are commonly used in international cooperative strategies as they allow for decentralized decision-making and cooperation among the various partners involved.

Question 8

A strategic network can be characterized as a loose federation of partners revolving around a strategic center firm.

Accepted Answer

A strategic network is a group of partners and collaborators that are aligned with a central firm or organization to achieve a shared goal or objective. This network is not a tightly controlled or structured entity but rather a flexible and adaptable arrangement that allows for easy communication and collaboration among participants.

Question 9

The worldwide product divisional structure has centralized decision-making authority in the worldwide division headquarters to coordinate and integrate decisions and actions among business units.

Accepted Answer

The statement correctly describes the characteristics of a worldwide product divisional structure.

Question 10

Which of the following is TRUE?

Accepted Answer

The relationship between strategy and structure is interdependent, but strategy has a greater influence on structure than the other way around. The chosen structure should be aligned with the chosen strategy to achieve desired outcomes.

Question 11

In the Chapter 11 Strategic Focus on the LG Company, the removal of the CEO after two quarters of losses shows illustrates the characteristic use of strategic controls in the competitive form of multidivisional structure.

Accepted Answer

The answer of In the Chapter 11 Strategic Focus on...

Question 12

An important lesson from the Chapter 11 Opening Case about Borders is that

Accepted Answer

The case highlights that while a firm's structure usually follows the strategy, once in place, structure can have a significant effect on strategy. Borders' decentralized structure made it difficult for the company to respond effectively to changes in the book industry, leading to poor decision-making and ultimately bankruptcy. This suggests that a mismatch between strategy and structure can have serious consequences, and that firms need to periodically evaluate their structure to ensure that it remains aligned with their strategic goals. Option A is incorrect because Borders' structure was the problem, not its strategy implementation. Option B is not supported by the case, and option D is only partially correct as poor decision-making was an effect of the decentralized structure.

Question 13

The selection of an organizational structure for an internationally diversified firm should consider the international corporate level strategy the firm is using.

Accepted Answer

The international corporate level strategy plays a crucial role in determining the organizational structure of an internationally diversified firm. The structure should be aligned with the strategy to ensure effective implementation and execution of the firm's objectives. Therefore, it is important to consider the strategy when selecting the most appropriate structure.

Question 14

Alliances of organizations in the same position on the value chain are known as vertical alliances.

Accepted Answer

The answer of Alliances of organizations in the same position...

Question 15

Firms implementing the multidomestic strategy often attempt to isolate themselves from global competitive forces by establishing protected market positions or by competing in industry segments that are most affected by differences among local countries.

Accepted Answer

This statement is true. Multidomestic strategy involves tailoring products, marketing, and operations to the specific needs of local markets, which can provide some protection from global competition.

Question 16

The Amos Ball Printing Company was established in 1866. Currently, Amos Ball V is the CEO and chairman of the board. The company has traditionally used a functional structure. Five years ago, the company branched into online publishing and small-batch printing in addition to its regular large-batch operations. Both new businesses are significantly different in technology and marketing from each other and from Ball's traditional business. Despite the hiring of experienced professionals in these new endeavors, performance continues to be poor and is affecting Ball's overall performance. Which of the following statements is TRUE?

Accepted Answer

The company's poor performance in the new businesses suggests that the functional structure may not be well-suited for these endeavors. Adopting a multidivisional structure would allow for more autonomy and flexibility in managing these separate businesses, potentially improving their performance. Additionally, the fact that Amos Ball V is the CEO and chairman of the board suggests that he has significant power to make changes to the organization's structure. Waiting for overall performance to improve may result in further setbacks and losses, so it would be more appropriate to address the issue sooner rather than later. Finally, while the businesses may be different in technology and marketing, they are still under the umbrella of the same company and could benefit from coordinated efforts within one corporate structure.

Question 17

A firm's ____ specifies the work to be done and how to do it given the firm's strategy or strategies.

Accepted Answer

The answer of A firm's ____ specifies the work to...

Question 18

Arnold Schwartz, CEO and founder of Schwartz Engineering, has repeatedly rebuffed efforts by other firms to draw Schwartz Engineering into strategic alliances. Schwartz Engineering has built its highly-successful business around proprietary processes invented by Mr. Schwartz in the 1980s. Mr. Schwartz is concerned that his firm will be required to share the sources of its competitive advantage with alliance partners. This is a reasonable fear.

Accepted Answer

The passage clearly states that Mr. Schwartz is concerned about having to share the sources of his firm's competitive advantage with alliance partners, making it a reasonable fear. Therefore, it is true that his fear is reasonable.

Question 19

Internal competition for corporate resources is effective for companies with an unrelated diversification strategy, but dysfunctional for companies with a related-constrained strategy.

Accepted Answer

This is because a related-constrained strategy involves businesses that are closely related and share common resources and capabilities, so internal competition can lead to inefficiencies and conflicts. However, for unrelated diversification, the businesses are not closely related, and internal competition can drive innovation and improve overall performance.

Question 20

The organizational structure for an internationally diversified firm requires trade-offs between global integration and local market responsiveness.

Accepted Answer

An internationally diversified firm operating in multiple countries needs to balance the need for global integration with local market responsiveness. This means that the organizational structure must be designed to ensure that the company can achieve economies of scale by standardizing processes and products globally, while also being able to adapt to local market needs and preferences.

Quiz 11: Organizational Structure and Controls