The primary factors that cause firms to change from a functional structure to an M-form structure are the CEO's increasingly limited ability to set a strategic direction for the firm and the focus of functional managers on local issues.

Question

Quizplus · Accepted Answer

The statement is incorrect. The primary factors that cause firms to change from a functional structure to an M-form structure are the need to address increased environmental complexity, diversification, and the desire for greater flexibility and innovation. CEO's strategic direction-setting ability and functional managers' focus on local issues may still be important considerations, but they are not the primary factors driving the change.

The Primary Factors That Cause Firms to Change from a Functional