Question 1

Firm and markets represent the two primary modes of economic organization in the capitalist economy.

Accepted Answer

Firm and markets are two fundamental components of the capitalist economy. Firms are the producers who organize and coordinate resources to produce goods and services, and markets are where buyers and sellers exchange goods and services for money. Together, they form the backbone of a market-oriented economy.

Question 2

Operating plans and capital expenditure budgets are the key mechanisms through which strategy drives resource allocation.

Accepted Answer

Operating plans and capital expenditure budgets are developed based on the strategic objectives and goals of an organization. These plans and budgets determine how resources including money, people, and time are allocated to different areas and activities. Therefore, strategy drives resource allocation through the development and implementation of these plans and budgets.

Question 3

A major organizational innovation of the first two decades of the 20^th century was the multidivisional corporation.

Accepted Answer

The multidivisional corporation, also known as the M-form, was a major organizational innovation of the first two decades of the 20th century. This structure allowed large companies to break down their operations into smaller divisions, each with its own management team and focused on a specific product, region, or customer group. This allowed for greater efficiency, coordination, and responsiveness to market changes.

Question 4

Conventionally, strategy is viewed as preceding organizational structure.Management writer Tom Peters states the opposite: "strategy follows structure." The relationship between strategy and structure is best described as:
A)Strategy and structure are interdependent
B)Designing organizational structure is a key component of strategy implementation
C)How a firm is organized may be a central feature of its strategy
D)All of the above

Accepted Answer

The relationship between strategy and structure is complex and interdependent. Strategy and structure influence each other, and how a firm is organized can be a central feature of its strategy. Designing organizational structure is also a key component of strategy implementation.

Question 5

Holding companies are organizational forms that exist primarily to facilitate control over large family-owned businesses.

Accepted Answer

Holding companies are typically established by families or individuals to control multiple businesses, often for tax or liability reasons. They own the majority of shares in these businesses and use their power to make strategic decisions and oversee their operations.

Question 6

The shared values embodied in an organization's culture cannot substitute for direct management control.

Accepted Answer

The answer of The shared values embodied in an organization's...

Question 7

For strategy to be effectively implemented, all enterprises need a strategic planning system.

Accepted Answer

The answer of For strategy to be effectively implemented, all...

Question 8

Organic structures are superior to mechanistic structures.

Accepted Answer

The answer of Organic structures are superior to mechanistic structures....

Question 9

Corporations are not the dominant organizational form in all industries-in agriculture and many service industries other forms of business enterprise predominate.

Accepted Answer

This statement is true. In industries such as agriculture and some service industries, other forms of business enterprise such as cooperatives and partnerships may be more prevalent than corporations.

Question 10

Jamie Dimon's comment, "I'd rather have first-rate execution and second-rate strategy anytime than brilliant ideas and mediocre management" reflects the view that strategy implementation is more important than strategy formulation.

Accepted Answer

Jamie Dimon's comment suggests that execution, or implementation, is more crucial to success than the brilliance of the initial strategy. Therefore, the statement supports the idea that strategy implementation is more important than strategy formulation.

Question 11

Hierarchy is a feature of all complex organizational forms whether human, biological, or physical.that

Accepted Answer

Hierarchy is a fundamental aspect of complex organizations, regardless of whether they are human, biological, or physical in nature. This is because hierarchy provides a structure for organizing and coordinating the activities of different members or parts of the organization, enabling it to function efficiently and effectively.

Question 12

When markets become unstable, bureaucratic approaches to management become more effective because they are a source of stability.

Accepted Answer

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Question 13

The fundamental organizational problem is that specialisation creates the need for cooperation and coordination.

Accepted Answer

Specialisation means individuals or departments focus on specific tasks, which can lead to a fragmentation of knowledge and skills. This fragmentation requires coordination and cooperation between the specialized units to achieve overall organizational goals. Without effective collaboration, communication and coordination, an organization may struggle to achieve its objectives.

Question 14

Contingency theory advocates that the best organizational design is one that can respond to multiple contingencies.

Accepted Answer

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Question 15

During recent decades, the hierarchical structures of business enterprises have become more oriented towards control than coordination.

Accepted Answer

The answer of During recent decades, the hierarchical structures of...

Question 16

The comment, "Brilliant strategy; lousy implementation" confirms the essential fact that strategy formulation and strategy implementation are distinct, separable activities.

Accepted Answer

The answer of The comment, "Brilliant strategy; lousy implementation" confirms...

Question 17

The rigidities of hierarchical control have resulted in most business enterprises no longer being organized as hierarchies.

Accepted Answer

The answer of The rigidities of hierarchical control have resulted...

Question 18

Firms exist in order to achieve the efficiency benefits of specialization and division of labor.

Accepted Answer

Firms are able to achieve efficiencies by allowing individuals to specialize in a particular task or function, which enables them to become more skilled and efficient at that task over time. This specialization can lead to an overall increase in productivity and efficiency for the firm as a whole. Additionally, firms can use the division of labor to allocate tasks and responsibilities to those individuals who are best suited to them, which can further improve efficiency and productivity.

Question 19

In determining how to group the employees into organizational units, the intensity with which they need to collaborate with one another is less important than the need for social harmony.

Accepted Answer

The intensity of collaboration is key to determining how to group employees into organizational units. Social harmony should be considered, but it should not override the importance of functional collaboration within the organization.

Question 20

Linking medium-term strategic planning to annual operating plans and an operating budget is undesirable since it encourages short-term thinking.

Accepted Answer

Linking medium-term strategic planning to annual operating plans and an operating budget is desirable as it ensures that the organization is moving in the right direction and achieving its goals in the long run. It helps to align the resources and efforts of the organization towards achieving the strategic objectives. However, it is important to avoid short-term thinking and focus on the long-term goals while implementing the annual operating plans and budget.

Quiz 6: Organization Structure and Management Systems: the Fundamentals of Strategy Implementation