Question 1

One of the primary disadvantages of the global strategy and worldwide product divisional structure is that
A)it is difficult to achieve economies of scale.
B)the firm must develop centers to offer after-sales service to customers.
C)it is difficult to respond effectively to local market needs and preferences.
D)achieving economies of scale with this strategy/structure combination is nearly impossible.

Accepted Answer

The primary disadvantage of the global strategy and worldwide product divisional structure is that it is difficult to respond effectively to local market needs and preferences. This structure focuses on standardization and centralization, which may not be suitable for diverse markets with specific needs and preferences. As a result, the firm may lose its competitive advantage in these markets, leading to lower sales and profits.

Question 2

Describe the organizational structure associated with a firm that pursues an unrelated diversification strategy.

Accepted Answer

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Question 3

Discuss the organizational structures used to implement the different business-level strategies.

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Question 4

Which of the following is NOT a preliminary task of the strategic center firm in a strategic network?
A)strategic outsourcing
B)encouraging friendly rivalry among network members
C)allocating internal capital
D)supporting development of new core competencies

Accepted Answer

Allocating internal capital is not typically a preliminary task of the strategic center firm in a strategic network. The focus is more on strategic outsourcing, fostering competition, and supporting core competencies development.

Question 5

Toyota heavily uses a strategic network of vertical relationships. Toyota enables engineers in supplier firms to communicate easily with companies with which Toyota has contracts for services. This results in the suppliers and Toyota (the strategic center firm)being more
A)interdependent.
B)competitive with one another.
C)creative.
D)complementary.

Accepted Answer

Toyota's strategic network of vertical relationships fosters interdependence between the suppliers and the strategic center firm. By enabling easier communication and collaboration, the different parties in this network are able to work together more closely towards a common goal. This interdependence helps to build stronger and more effective supply chains which benefits each of the companies involved.

Question 6

Define the three major dimensions of organizational structure: specialization,centralization,and formalization. How do these dimensions vary in organizations implementing the cost leadership,differentiation,and cost leadership/differentiation strategies?

Accepted Answer

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Question 7

McDonald's operates through a franchising system wherein the head office uses strategic and financial controls to ensure that the franchises are creating the greatest possible value. This is an example of a(n)
A)worldwide product divisional structure.
B)strategic network.
C)SBU multidivisional structure.
D)simple structure.

Accepted Answer

McDonald's franchising system operates as a strategic network, where the head office maintains strategic and financial controls to ensure value creation by the franchises. This differs from the other structure types mentioned, as they do not involve this degree of control and coordination.

Question 8

Discuss the organizational structures used to implement corporate-level strategies.

Accepted Answer

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Question 9

The need for the organization to combine local responsiveness and efficiency is most critical in a______strategy.
A)multidomestic
B)transnational
C)global
D)focus

Accepted Answer

Transnational strategy aims to combine local responsiveness with global efficiency. Therefore, the need for the organization to balance both is most critical in a transnational strategy. In a multidomestic strategy, the focus is on addressing local market needs, while a global strategy is primarily focused on achieving efficiency through standardized operations. A focus strategy is when an organization targets a specific segment or niche, so the need for balancing local responsiveness and efficiency may not be as crucial as in a transnational strategy.

Question 10

After years of negotiating short-term contracts with its suppliers,Icon Images has decided to agree to longer-term contracts. In doing this,Icon Images is hoping to
A)reduce transaction costs.
B)increase negotiating leverage with suppliers.
C)become less dependent on its suppliers.
D)move toward horizontal alliances with its suppliers.

Accepted Answer

By agreeing to longer-term contracts with its suppliers, Icon Images can reduce the number of transactions needed to purchase goods and services, thus reducing transaction costs. With longer-term contracts, there is less need for constant renegotiation and switching of suppliers, which can be time-consuming and expensive. This can also help to establish a more stable relationship with suppliers and provide them with more certainty about future demand, which may lead to better pricing and terms. Therefore, option A is the best choice. Options B, C, and D are not directly related to the benefits of longer-term contracts.

Question 11

In Japan,the center firm in a strategic network of vertical relationships might be expected to undertake all of the following EXCEPT
A)reducing its transaction costs by promoting longer-term contracts with subcontractors.
B)enabling engineers in upstream companies to have better communication with those companies with which it has contracts for services.
C)encouraging subcontractors to modernize their facilities and providing them with technical and financial assistance to do so.
D)decreasing communications between network members to reduce communication costs.

Accepted Answer

Decreasing communication between network members would not be a desirable strategy as communication is essential for vertical relationships in Japan. The other options would be expected of a center firm in a strategic network of vertical relationships.

Question 12

IKEA is a global furniture retailer with more than 300 outlets in 39 countries and regions. IKEA focuses on lowering its costs as well as understanding customer needs,especially younger ones. IKEA's international strategy
A)transnational; combination
B)global; worldwide product divisional
C)multidomestic; worldwide geographic area
D)competitive; strategic business unit multidivisional

Accepted Answer

IKEA's international strategy is transnational with a combination of global and local elements. While it has a global standardized product line, it also adapts to local tastes and preferences, and decentralizes its operations to the local level. Additionally, IKEA's emphasis on cost reduction and understanding of customer needs aligns with a transnational strategy.

Question 13

Describe the organizational structures used to implement cooperative strategies,giving attention to the role of the strategic center firm.

Accepted Answer

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Question 14

Airlines have forged a number of complementary strategic alliances,in part because many airlines are not profitable. Some airlines participate in several alliances simultaneously. This tends to
A)make the partners' true loyalties and intentions unclear.
B)make the role of the strategic center firms more critical to alliance success.
C)distribute the alliances along several segments of the airline industry value chain.
D)be most effective when the alliances are with airlines headquartered in different nations.

Accepted Answer

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Question 15

Discuss the difference between strategic controls and financial controls.

Accepted Answer

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Question 16

It is easiest to identify the company that functions as the strategic center firm in
A)horizontal complementary strategic alliances.
B)vertical complementary strategic alliances.
C)corporate-level cooperative partnerships.
D)international cooperative partnerships.

Accepted Answer

In vertical complementary strategic alliances, the strategic center firm is the one that controls the critical upstream or downstream link in the value chain. This is because the alliance is formed between firms that are at different stages of the value chain, and the strategic center firm holds the key to ensuring successful coordination and integration between the partners.

Question 17

Ichabod Industries has a Latin American Division,a European Division,an Industrial Lubricants Division,and a
Food Service Division. Ichabod Industries probably uses the______organizational structure.
A)horizontal complementary strategic alliance
B)competitive multidivisional
C)strategic business unit multidivisional
D)hybrid combination

Accepted Answer

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Question 18

Describe the organizational structures used to implement the three international strategies.

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Question 19

Toyota and its suppliers have a relationship in which Toyota encourages suppliers to modernize their facilities and provides them with technical and financial assistance to do so. It also promotes longer-term contracts with suppliers and enables engineers in the supplier companies to have better communication with Toyota. This is an example of a(n)
A)worldwide product divisional structure.
B)functional structure.
C)SBU multidivisional structure.
D)strategic network.

Accepted Answer

The relationship between Toyota and its suppliers, in which Toyota encourages modernization and provides technical and financial assistance, longer-term contracts, and better communication, is an example of a strategic network.

Question 20

Describe the three major types of organizational structure and their appropriate use.

Accepted Answer

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Quiz 11: Organizational Structure and Controls

One of the primary disadvantages of the global strategy and worldwide product divisional structure is that

Describe the organizational structure associated with a firm that pursues an unrelated diversification strategy.

Discuss the organizational structures used to implement the different business-level strategies.

Which of the following is NOT a preliminary task of the strategic center firm in a strategic network?

Toyota heavily uses a strategic network of vertical relationships. Toyota enables engineers in supplier firms to communicate easily with companies with which Toyota has contracts for services. This results in the suppliers and Toyota (the strategic center firm) being more

Define the three major dimensions of organizational structure: specialization,centralization,and formalization. How do these dimensions vary in organizations implementing the cost leadership,differentiation,and cost leadership/differentiation strategies?

McDonald's operates through a franchising system wherein the head office uses strategic and financial controls to ensure that the franchises are creating the greatest possible value. This is an example of a(n)

Discuss the organizational structures used to implement corporate-level strategies.

The need for the organization to combine local responsiveness and efficiency is most critical in a______strategy.

After years of negotiating short-term contracts with its suppliers,Icon Images has decided to agree to longer-term contracts. In doing this,Icon Images is hoping to

In Japan,the center firm in a strategic network of vertical relationships might be expected to undertake all of the following EXCEPT

IKEA is a global furniture retailer with more than 300 outlets in 39 countries and regions. IKEA focuses on lowering its costs as well as understanding customer needs,especially younger ones. IKEA's international strategy

Describe the organizational structures used to implement cooperative strategies,giving attention to the role of the strategic center firm.

Airlines have forged a number of complementary strategic alliances,in part because many airlines are not profitable. Some airlines participate in several alliances simultaneously. This tends to

Discuss the difference between strategic controls and financial controls.

It is easiest to identify the company that functions as the strategic center firm in

Ichabod Industries has a Latin American Division,a European Division,an Industrial Lubricants Division,and a Food Service Division. Ichabod Industries probably uses the______organizational structure.

Describe the organizational structures used to implement the three international strategies.

Describe the three major types of organizational structure and their appropriate use.