Question 1

The centralized structure used by Borders (Chapter 11 Opening Case) did not provide information from local stores that might have been useful in changing its technology strategy more quickly than it did. This example illustrates the effect of structure on strategy.

Accepted Answer

The statement accurately reflects the impact of the centralized structure of Borders on its technology strategy.

Question 2

Organizational structures must be both stable and flexible.

Accepted Answer

Organizational structures must be stable enough to provide consistency and clarity in roles and responsibilities, but also flexible enough to adapt to changing circumstances and new opportunities.

Question 3

In the Chapter 10 Opening Case about Borders shows that although strategy has a more important influence on structure, once a particular structure is in place, that structure influences strategy.

Accepted Answer

The Opening Case about Borders illustrates how the company's strategy and changing market conditions led to a shift in their organizational structure. This example supports the idea that strategy influences structure, but also shows how once a structure is established, it can also constrain or enable certain strategic decisions.

Question 4

To properly execute strategic controls in firms using related diversification, the executives must have a deep understanding of each unit's business-level strategy.

Accepted Answer

To ensure effective strategic controls, executives must have a comprehensive understanding of each business unit's strategy in related diversification. This will enable them to identify potential areas of synergy and make informed decisions regarding resource allocation and portfolio management.

Question 5

Companies and business units of large diversified firms using the cost leadership strategy should use strategic controls.

Accepted Answer

The answer of Companies and business units of large diversified...

Question 6

Organizational inertia often prompts top management to initiate structural change when organizational performance levels drop.

Accepted Answer

The answer of Organizational inertia often prompts top management to...

Question 7

Strategy has a more important influence on strategy, although once in place, structures influence strategy.

Accepted Answer

Strategy is the driving force behind the actions taken by a company, and structures are put in place to support and implement the strategy. Therefore, strategy has a greater influence on the direction and priorities of a company, but structures can impact the implementation and effectiveness of the strategy.

Question 8

Over time, large and complex organizations must customize their structure to fit their unique strategic needs.

Accepted Answer

As organizations grow and evolve, they often need to adjust their structure in order to effectively carry out their strategies and achieve their goals. This may involve changes to the size, composition, and arrangement of various teams and departments, as well as shifts in reporting hierarchies and communication channels. By customizing their structure in this way, organizations can better align their resources, capabilities, and processes with their overall strategic vision, and optimize their ability to adapt to changing market conditions and other external factors.

Question 9

RexMacDonald, Inc., uses a differentiation strategy that relies on cooperation, communication, and sharing of ideas among employees. In order to foster this behavior, RexMacDonald should emphasize strategic controls over financial controls.

Accepted Answer

Strategic controls are more focused on the behavior and actions of employees, which aligns with RexMacDonald's emphasis on cooperation, communication, and idea-sharing. Financial controls, on the other hand, are more focused on the financial performance of the company and may not necessarily encourage the desired behavior among employees.

Question 10

Strategic controls are largely subjective criteria intended to verify that the firm is using appropriate strategies for the conditions in the external environment and the company's competitive advantages.

Accepted Answer

Strategic controls are designed to ensure that the company's strategies are aligned with the external environment and help it leverage its competitive advantages. Since these criteria are inherently subjective, they often involve qualitative judgments and performance evaluations that require interpretation by managers and other stakeholders. Examples of strategic controls include market share, customer loyalty, new product development, and employee engagement.

Question 11

As a firm grows, it typically shifts from a simple structure to a functional structure.

Accepted Answer

As a firm grows, it needs to become more organized and efficient. A simple structure may work for small firms, but as a company becomes larger, it often needs a functional structure to handle the increased complexity and specialization of tasks. In a functional structure, employees are grouped by their specialized functions, such as accounting, marketing, and operations. This allows for more effective coordination and use of resources within the organization.

Question 12

An overriding lesson from the Chapter 10 Opening Case about Borders is that failure to properly structure an organization can contribute to poor strategic decisions and eventually bankruptcy.

Accepted Answer

The Chapter 10 Opening Case about Borders illustrates that an organization's structure can have a major impact on its strategic decisions and long-term success. Borders' failure to adapt to changing market conditions and embrace technology, in part due to its siloed and bureaucratic organizational structure, ultimately led to its bankruptcy.

Question 13

Organizational controls guide the use of strategy, indicate how to compare actual results with expected results, and suggest corrective actions to take when the difference is unacceptable.

Accepted Answer

Organizational controls are designed to guide the use of strategy, monitor actual results, and suggest necessary corrective actions to meet the expected results. Therefore, the statement is true.

Question 14

According to Michael Dell, an overemphasis on financial controls to produce attractive short-term results contributed to performance difficulties at Dell, Inc. This point emphasizes the importance of properly balancing the use of strategic and financial controls.

Accepted Answer

The statement is true as Michael Dell has stated in interviews that the overemphasis on financial controls led to performance difficulties at Dell, Inc., highlighting the need for a balance between strategic and financial controls.

Question 15

Research shows that structure has a more important influence on strategy than the reverse and hence the emphasis of the chapter on the subject of structure.

Accepted Answer

The answer of Research shows that structure has a more...

Question 16

Companies and business units using the differentiation strategy should emphasize financial rather than strategic controls.

Accepted Answer

The answer of Companies and business units using the differentiation...

Question 17

With a related diversification corporate-level strategy, financial controls are used by corporate leaders to verify the sharing of appropriate strategic factors such as knowledge, markets, and technologies across businesses.

Accepted Answer

The answer of With a related diversification corporate-level strategy, financial...

Question 18

Research has consistently shown that there is one best way to structure all organizations, regardless of competitive strategy.

Accepted Answer

Research has shown that there is no one-size-fits-all approach to structuring organizations. The best structure for an organization depends on factors such as its competitive strategy, goals, culture, industry, and size, among others. Different structures, such as functional, divisional, matrix, and network, may be appropriate for different organizations depending on their unique circumstances.

Question 19

As shown in the Chapter Opening 11 Case, Borders was able to structure its operations in ways that allowed it to manage the different businesses in each country and market effectively.

Accepted Answer

The answer of As shown in the Chapter Opening 11...

Question 20

The simple structure is used by owner-managed firms which are characterized by informal relationships, few rules, limited task specialization, and unsophisticated information systems.

Accepted Answer

This statement accurately describes the characteristics of a simple structure, which is commonly found in owner-managed firms.

Quiz 11: Structure and Controls with Organizations