Question 1

Arnold Schwartz, CEO and founder of Schwartz Engineering, has repeatedly rebuffed efforts by other firms in other countries 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.An advantage would be that Schwartz Engineering would gain assistance from those other firms in meeting other countries' regulatory requirements.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

Sharing proprietary processes in strategic alliances can risk losing competitive advantage if partners gain access to and potentially replicate or misuse these processes.

Question 2

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

Accepted Answer

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

Question 3

A strategic network can be characterized as a loose federation of partners participating in the network's operations on a flexible basis.

Accepted Answer

A strategic network often involves a group of organizations or individuals that collaborate flexibly to achieve common goals, without rigid structures or hierarchies.

Question 4

One reason a long-tenured top-level manager may hesitate to conclude the firm's structure is a problem is that doing so:

Accepted Answer

Admitting that the firm's structure is a problem implies that past decisions, which the manager may have been involved in, were flawed, potentially reflecting poorly on their judgment and leadership.

Question 5

What are the two general types of measures that make up financial controls?

Accepted Answer

Financial controls are generally categorized into accounting-based measures, which focus on financial statements and internal accounting, and market-based measures, which focus on market performance and investor perceptions.

Question 6

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

Accepted Answer

Vertical alliances involve organizations at different stages of the value chain, while alliances of organizations in the same stage are known as horizontal alliances.

Question 7

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 8

The management team at Krandal Industries emphasizes financial controls over strategic ones.Accounting-based measures are used to evaluate the firm's performance based on its own history and on industry averages.It is most likely that Krandal uses what type of strategy?

Accepted Answer

Krandal Industries' emphasis on financial controls and accounting-based measures suggests a focus on financial performance across diverse business units, typical of an unrelated diversified strategy.

Question 9

Selecting the organizational structure and controls that effectively implement the chosen strategy is a challenge for managers because:

Accepted Answer

Selecting an organizational structure requires balancing flexibility to adapt to changes and stability to maintain efficiency and control, making it a complex task for managers.

Question 10

Strategic controls allow corporate-level managers to:

Accepted Answer

Strategic controls help managers evaluate whether the firm's strategies align with its capabilities and opportunities, ensuring that the firm is positioned to achieve its strategic objectives.

Question 11

Organizational structure specifies the firm's:

Accepted Answer

Organizational structure defines the formal reporting relationships, procedures, controls, and authority and decision-making processes within a firm, which is described in choice A.

Question 12

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

Accepted Answer

Distributed strategic networks are indeed used to manage international cooperative strategies, as they allow organizations to coordinate and leverage resources and capabilities across different geographic locations effectively.

Question 13

Alfred Chandler found that firms grow in a predictable pattern and that the firm's growth patterns determine its structural form.Which of the following forms corresponds to the FINAL stage in Chandler's theory?

Accepted Answer

Chandler's theory suggests that as firms grow, they evolve from simple to functional, then to vertically integrated, and finally to a multidivisional structure to manage increased complexity and diversification.

Question 14

In most cases, the focus strategy is best managed using a __________ structure.

Accepted Answer

A focus strategy is best managed using a simple structure because it allows for flexibility and quick decision-making, which is essential for targeting a specific market niche.

Question 15

Andermeyer Jewelers, which specializes in high-end jewelry, has been in existence since the 1870s and has served generations of wealthy families.Owned and managed by the Andermeyer family since its founding, it has never had more than 20 designers and jewelers in its shop.Andermeyer Jewelers should use the __________ structure.

Accepted Answer

A simple structure is suitable for small organizations with a limited number of employees, like Andermeyer Jewelers, which has fewer than 20 designers and jewelers.

Question 16

Which of the following statements is true?

Accepted Answer

Strategy typically dictates the structure an organization adopts, as the structure needs to support the strategic goals and objectives.

Question 17

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 18

Structural stability affects the organization's ability to:

Accepted Answer

Structural stability allows an organization to manage its daily work routines consistently and predictably, ensuring smooth operations.

Question 19

Typically, an organization using a simple structure would be:

Accepted Answer

A simple structure is typically used by small organizations due to its minimal hierarchy and centralized decision-making.

Question 20

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

Adopting a multidivisional structure could help manage the distinct businesses more effectively by allowing each division to operate semi-autonomously, focusing on their specific technology and marketing needs.

Quiz 11: Organizational Structure and Controls