Question 1

A product management structure centralizes decision making while increasing the amount of product specialization within the SBU.

Accepted Answer

False

Question 2

Differentiated defenders perform best when their organization structures incorporate moderate levels of formalization,centralization,and specialization.

Accepted Answer

Differentiated defenders, also known as defenders with a focus on a specific market or product, perform best when their organization structures balance moderate levels of formalization, centralization, and specialization. This enables them to have clear roles and responsibilities, centralized decision-making, and expertise in their specific market or product. High levels of these factors can lead to slow decision-making and difficulty adapting to change, while low levels can result in a lack of coordination and unclear direction.

Question 3

Evaluation and reward systems that place relatively more emphasis on sales and share growth are appropriate for businesses pursuing prospector strategies.

Accepted Answer

Prospector strategies involve a focus on innovation and growth, often through the development of new products and new markets. Sales and share growth are important metrics for evaluating the success of these strategies, so it is appropriate for businesses pursuing prospector strategies to place more emphasis on these metrics in their evaluation and reward systems.

Question 4

Top-down strategic planning systems are particularly well-suited to prospector businesses operating in unstable environments.

Accepted Answer

Top-down strategic planning systems involve a centralized approach to decision-making and goal setting. This can be helpful for prospector businesses that need to quickly adapt to changing environments and pursue new growth opportunities. The top-down approach allows for clear direction and coordination among different parts of the organization. In contrast, in stable environments, a bottom-up approach may be more appropriate where employees at all levels are involved in identifying opportunities and making decisions.

Question 5

Competence in new product R&D is very critical for the success of a low-cost defender.

Accepted Answer

A low-cost defender strategy primarily focuses on minimizing costs and optimizing processes to offer products at competitive prices, rather than emphasizing new product R&D, which is more critical for companies pursuing differentiation through innovation.

Question 6

In prospector service organizations,employees do not have a critical role in identifying potential new services.

Accepted Answer

In prospector service organizations, employees play a critical role in identifying potential new services. This is because they are often the ones who have the most direct contact with customers and can provide insights into their needs and preferences. The organization may also encourage and incentivize employees to come up with innovative ideas for new services.

Question 7

The simplicity of the product management organization makes it the most common organizational form among entrepreneurial start-ups.

Accepted Answer

The answer of The simplicity of the product management organization...

Question 8

Prospector business units are likely to perform better on the critical dimensions of new product success when organizational decision making is relatively centralized.

Accepted Answer

Prospector business units, which focus on innovation and exploring new market opportunities, tend to perform better when decision-making is decentralized. This allows for greater flexibility and responsiveness to new information and opportunities, which is crucial for innovation and new product success.

Question 9

A business's organizational structure,internal policies,procedures,and resources must fit its chosen strategy or else implementation will fall short.

Accepted Answer

A business's strategy guides its operations and decisions. Therefore, its structure, policies, procedures, and resources must align with the chosen strategy to effectively implement it. If there is a mismatch between the strategy and these internal factors, the implementation will not be successful.

Question 10

The functional form of organization is most appropriate for businesses pursuing differentiated defender and analyzer strategies,particularly when they operate in industries with complex and relatively unstable market and competitive environments.

Accepted Answer

The functional form of organization is best suited for businesses pursuing a cost leadership strategy or those in stable and simple market environments, not for differentiated defender and analyzer strategies in complex and unstable markets.

Question 11

In centralized units,middle- and lower-level managers have more autonomy and participate in a wider range of decisions.

Accepted Answer

In centralized units, the decision-making power is concentrated at the top level, resulting in less autonomy for middle- and lower-level managers.

Question 12

The matrix form is the least bureaucratic or centralized and the most specialized type of organization.

Accepted Answer

The matrix form of organization is known for being less bureaucratic and centralized than other forms, such as a functional or divisional structure. It is also known for its specialized teams that work together to achieve a specific goal or project. Therefore, the statement is true.

Question 13

SBU autonomy is relatively low for firms adopting a prospector business strategy.

Accepted Answer

SBU (Strategic Business Unit) autonomy refers to the degree of independence and decision-making power granted to each business unit within a company. Prospector business strategy involves constant expansion and innovation, requiring a high level of SBU autonomy to explore new markets and opportunities. Therefore, SBU autonomy is expected to be relatively high for firms adopting a prospector strategy, making option A incorrect.

Question 14

Specialization is the degree to which formal rules and standard policies and procedures govern decisions and working relationships.

Accepted Answer

Specialization refers to the division of labor where each worker or group of workers becomes highly skilled at doing a particular task or a narrow range of tasks, rather than the governance of decisions and relationships by formal rules and policies.

Question 15

Centralization refers to the location of decision authority and control within an organization's hierarchy.

Accepted Answer

Centralization refers to the concentration of decision-making authority and control within the upper levels of an organization's hierarchy, with lower levels having limited autonomy and discretion.

Question 16

Product management organizations have the advantage of identifying and reacting more quickly to the threats and opportunities faced by individual product-market entries.

Accepted Answer

Product management organizations are specifically focused on managing individual product-market entries, which allows them to be more agile and responsive to changes and opportunities in the market.

Question 17

Successful implementation of a given strategy is more likely when the business has the functional competencies demanded by its strategy.

Accepted Answer

Functional competencies refer to the knowledge, skills, and abilities required to perform the tasks and activities necessary for the successful execution of a strategy. If a business possesses these necessary competencies, it is more likely to successfully implement its strategy. Conversely, if the business lacks the required competencies, it will struggle to carry out its strategy effectively.

Question 18

SBUs will perform best on critical volume and share-growth dimensions when its functional strengths include marketing,sales,and product R&D,in a low cost defender strategy.

Accepted Answer

A low-cost defender strategy primarily focuses on efficiency, cost minimization, and scale economies, rather than on marketing, sales, and product R&D, which are more aligned with differentiation and innovation strategies aimed at growth and market share expansion.

Question 19

Functional organizations rely primarily on hierarchical mechanisms for resolving conflicts across functional areas.

Accepted Answer

In a functional organization, each department or function operates in silos, and the hierarchy plays a vital role in conflict resolution across different functional areas. The department heads or managers typically resolve day-to-day conflicts, while higher-level executives may get involved in more significant disputes. Hence, functional organizations rely mainly on hierarchical mechanisms for resolving conflicts across functional areas.

Question 20

Adaptiveness and innovativeness are enhanced when decision-making authority is centralized.

Accepted Answer

Centralized decision-making can lead to a lack of diversity in perspectives and ideas, which can hinder adaptiveness and innovativeness. Decentralized decision-making allows for a wider range of input and creativity, which can lead to more adaptive and innovative solutions.

Quiz 17: Organizing and Planning for Effective Implementation