Question 1

The three structural characteristics which differ between organizational structures include all of the following EXCEPT
A) centralization.
B) formalization.
C) specialization.
D) intermediation.

Accepted Answer

The three structural characteristics that differ between organizational structures include centralization, formalization, and specialization. Intermediation is not a commonly discussed structural characteristic of organizational structures.

Question 2

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 global strategy and worldwide product divisional structure often struggle to respond effectively to local market needs and preferences. This is because the focus is on standardizing products and operations across all countries, rather than tailoring them to specific markets. As a result, companies using this strategy/structure combination risk losing out to competitors who can better meet local demand.

Question 3

A firm that frequently acquires and divests other firms is most likely to use the ____ structure.
A) matrix
B) competitive multidivisional
C) hybrid combination
D) horizontal complementary strategic alliance

Accepted Answer

The competitive multidivisional structure allows for a firm to easily acquire and divest other firms by creating separate divisions for each acquired firm within the overall structure. This allows for a high level of autonomy and competition between divisions, fostering innovation and growth.

Question 4

Which of the following multidivisional structures is CORRECTLY paired with the appropriate corporate-level strategy?
A) competitive form with related constrained strategy
B) cooperative form with unrelated strategy
C) SBU form with related linked strategy
D) competitive form with related linked strategy

Accepted Answer

The SBU (strategic business unit) form is designed to have each business unit operate independently and focus on its own specific market. The related linked strategy is appropriate for this structure because it involves the sharing of resources and knowledge between units in order to create synergies and competitive advantage. The competitive form is focused on having each unit compete with each other, which is not suitable for an SBU structure. The cooperative form, which involves the units working together and sharing resources, does not align with an unrelated strategy.

Question 5

Increasingly diversified firms that have decided to shift to a related-constrained strategy should change their organizational structure to the ____ structure.
A) functional
B) competitive form of the multidivisional
C) SBU form of the multidivisional
D) cooperative form of the multidivisional

Accepted Answer

The answer of Increasingly diversified firms that have decided to...

Question 6

To successfully implement a cost leadership strategy, there is a need for
A) freedom from constraining rules.
B) centralization of authority.
C) communication between functional silos.
D) sharing of competencies among divisions.

Accepted Answer

The answer of To successfully implement a cost leadership strategy,...

Question 7

The most centralized and most costly form of the multidivisional structure is the
A) integrated.
B) competitive.
C) SBU.
D) cooperative.

Accepted Answer

The answer of The most centralized and most costly form...

Question 8

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

The answer of Airlines have forged a number of complementary...

Question 9

A firm pursuing a related-constrained diversification strategy would typically need all of the following EXCEPT
A) centralization of some organizational functions for the sake of coordination.
B) frequent, direct contact between division managers.
C) division managers' rewards based on division financial performance.
D) temporary teams or task forces formed around specific projects.

Accepted Answer

The answer of A firm pursuing a related-constrained diversification strategy...

Question 10

The ____ structure is an organizational structure that combines both functional specialization and business product or project specialization.
A) functional
B) worldwide geographic area
C) network
D) matrix

Accepted Answer

The matrix structure combines both functional specialization and business product or project specialization. This type of structure allows employees to work in multiple areas across the organization and promotes cross-functional collaboration.

Question 11

In the ____ multidivisional structure there is complete independence among the firm's divisions.
A) cooperative
B) matrix
C) competitive
D) SBU

Accepted Answer

The competitive multidivisional structure, also known as the decentralized structure, allows for complete independence among the firm's divisions. Each division operates as a separate entity and competes against other divisions within the company as well as against external competitors. This structure allows for flexibility and fast decision-making at the divisional level but can lead to internal conflicts and duplication of efforts.

Question 12

Implementing the multidomestic strategy requires decentralization
A) to facilitate the tailoring of products to the demand in local markets.
B) to develop economies of scale.
C) in order to achieve economies of scope.
D) to reduce bureaucracy and speed up decision-making.

Accepted Answer

Multidomestic strategy focuses on catering to the specific needs and demands of local markets, which requires tailoring products according to the local preferences. Decentralization brings decision-making closer to the local markets, which helps in better understanding of the market needs and quicker response to changes in demand patterns. This facilitates the implementation of multidomestic strategy.

Question 13

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 company to have better communication with Toyota. This is an example of a(an):
A) worldwide product divisional structure.
B) functional structure.
C) SBU multidivisional structure.
D) strategic network.

Accepted Answer

The relationship between Toyota and its suppliers, which involves encouraging modernization, providing technical and financial assistance, promoting longer term contracts, and enabling better communication among engineers, is an example of a strategic network. This is because it involves the development of relationships and partnerships with key suppliers, with the aim of creating mutual benefits and achieving strategic goals. A strategic network is a type of organizational structure that emphasizes collaboration and shared resources among partners to achieve common goals.

Question 14

In an SBU structure, ____ is/are evaluated using strategic controls, whereas ____ is/are evaluated using financial controls.
A) each SBU, divisions within the SBUs
B) divisions within the SBUs, each SBU
C) managers of the SBUs, headquarters staff
D) headquarters staff, managers of the SBUs

Accepted Answer

The answer of In an SBU structure, ____ is/are evaluated...

Question 15

The integrated cost leadership/differentiation strategy is difficult to implement mostly because
A) different primary and support activities are emphasized when using cost leadership and differentiation strategies.
B) this strategic approach demands more flexibility than most firms can manage.
C) the dual reporting relationships required for this strategy slow organizational decision-making.
D) the cost leadership strategy requires less structured job roles than does the differentiation strategy.

Accepted Answer

The integrated cost leadership/differentiation strategy requires a focus on both primary and support activities, emphasizing the need for efficiency and cost minimization while also incorporating differentiation factors such as quality and innovation. This makes it difficult to implement because different strategies require different priorities and may lead to conflicting demands on resources and capabilities.

Question 16

Which organizational structure will emphasize financial controls for headquarters' evaluation of operating units while the operating units will emphasize strategic controls within their units' performance?
A) Functional structure
B) Cooperative M-Form
C) SBU Form
D) Competitive M-Form

Accepted Answer

SBU Form, or Strategic Business Unit Form, is designed to allow operating units to focus on strategic controls while headquarters evaluates financial controls. This is because SBUs are given more autonomy and are responsible for their own profits and losses, while still being accountable to the overall company's strategic goals. In this structure, SBUs function like individual businesses within a larger corporate structure, allowing for both centralized financial control and decentralized strategic control.

Question 17

In the ____ structure hierarchy, the headquarters relies on strategic controls to set rate-of-return targets and financial controls to monitor divisional performance relative to those targets.
A) functional
B) cooperative
C) competitive
D) SBU

Accepted Answer

The answer of In the ____ structure hierarchy, the headquarters...

Question 18

In the competitive form of the multidivisional structure, the focus of headquarters is on all the following EXCEPT
A) integration.
B) performance appraisal.
C) resource allocation.
D) long range planning.

Accepted Answer

The answer of In the competitive form of the multidivisional...

Question 19

Typically, a successful firm pursuing a differentiation strategy will
A) have a very hierarchical structure.
B) require a structure which is very formal.
C) use cross-functional development teams.
D) develop free-standing business units.

Accepted Answer

A differentiation strategy seeks to differentiate a product or service from competitors through unique features, quality, or branding. This often requires cross-functional development teams that can bring together expertise from different departments to create a unique product offering. A hierarchical or formal structure may hinder creativity and limit the ability to create innovative products. Additionally, developing free-standing business units may not always align with a differentiation strategy as it may create inconsistency across different units and dilute the brand's uniqueness.

Question 20

A worldwide geographic area structure is an organizational form in which
A) multiple alliances across the globe link complementary businesses.
B) standardized products are offered across country markets.
C) national interests dominate and management adapts to local or cultural differences.
D) responsiveness to local demand is combined with economies of scale.

Accepted Answer

The answer of A worldwide geographic area structure is an...

Quiz 13: Organizational Structure and Controls Emea Edition

The three structural characteristics which differ between organizational structures include all of the following EXCEPT

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

A firm that frequently acquires and divests other firms is most likely to use the ____ structure.

Which of the following multidivisional structures is CORRECTLY paired with the appropriate corporate-level strategy?

Increasingly diversified firms that have decided to shift to a related-constrained strategy should change their organizational structure to the ____ structure.

To successfully implement a cost leadership strategy, there is a need for

The most centralized and most costly form of the multidivisional structure is the

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 firm pursuing a related-constrained diversification strategy would typically need all of the following EXCEPT

The ____ structure is an organizational structure that combines both functional specialization and business product or project specialization.

In the ____ multidivisional structure there is complete independence among the firm's divisions.

Implementing the multidomestic strategy requires decentralization

In an SBU structure, is/are evaluated using strategic controls, whereas is/are evaluated using financial controls.

The integrated cost leadership/differentiation strategy is difficult to implement mostly because

Which organizational structure will emphasize financial controls for headquarters' evaluation of operating units while the operating units will emphasize strategic controls within their units' performance?

In the ____ structure hierarchy, the headquarters relies on strategic controls to set rate-of-return targets and financial controls to monitor divisional performance relative to those targets.

In the competitive form of the multidivisional structure, the focus of headquarters is on all the following EXCEPT

Typically, a successful firm pursuing a differentiation strategy will

A worldwide geographic area structure is an organizational form in which