Question 1

A product management structure:

Accepted Answer

Decentralizing decision making allows for more input from specialized product teams within the SBU, which can lead to more innovative and effective product development. Increasing the amount of product specialization within the SBU also helps ensure that there are individuals with deep knowledge of the product who can contribute to decision making.

Question 2

A company which seeks to maximize fixed assets per employee and percent of capacity utilization relative to its competitors is most likely following a _____ business strategy.

Accepted Answer

A low-cost defender strategy focuses on efficiency and cost minimization, which includes maximizing fixed assets per employee and capacity utilization to reduce costs.

Question 3

A product-management organizational design would most likely be appropriate when the firm sells:

Accepted Answer

A product-management organizational design is most suitable for a firm that sells a large number of products in an unstable environment. This structure allows for flexibility and quick responses to market changes, which are crucial in a dynamic and complex setting.

Question 4

Evaluation and reward systems that place more emphasis on sales volume or market share objectives are most appropriate for businesses pursuing:

Accepted Answer

Market share and sales volume are most relevant for businesses pursuing prospector strategies, which focus on innovation and entering new markets. These businesses need to rapidly grow their market share and sales volume to establish a strong position in new markets. Differentiated defender strategies focus on providing unique products or services and maintaining a loyal customer base, while low-cost defender strategies concentrate on reducing costs to compete on price. Reactor strategies are implemented in response to unexpected events or changes in the environment and do not represent a deliberate strategy.

Question 5

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

Accepted Answer

Formalization refers to the extent to which rules, procedures, and policies are defined and standardized in an organization. It indicates the degree to which there is a clear definition of job roles, responsibilities, and communication channels among employees. Therefore, formalization is the best choice in this case.

Question 6

Which of the following organizational structures would an entrepreneurial start-up most likely use?

Accepted Answer

Entrepreneurial start-ups typically use a functional organizational structure due to its simplicity and focus on core business functions. This structure allows for clear roles and responsibilities, which is crucial for small and growing businesses.

Question 7

D.G Corporation sells coffee beans to various companies.The company also has its own coffee houses where it sells brewed coffee directly to consumers.The intermediaries and marketing activities involved in selling to the two set of clients are very different and so the company has appointed separate managers for each section.This is an appropriate illustration of:

Accepted Answer

This is an appropriate illustration of market management, where the company has appointed separate managers to handle different sets of clients based on their marketing needs and intermediaries involved in selling to them. In this case, the company has divided its market into two segments and assigned a separate manager for each segment, i.e., coffee bean sales to various companies and brewed coffee sales to consumers in their coffeehouses.

Question 8

A SBU using a prospector strategy will perform best in terms of sales volume growth and market share gains when its structure has _____ levels of centralization and _____ levels of specialization.

Accepted Answer

A prospector strategy, which focuses on innovation and market exploration, benefits from low levels of centralization to allow for more autonomy and flexibility at lower levels of the organization. High levels of specialization are also advantageous as they enable the organization to develop expertise in new and diverse areas, fostering innovation and adaptation to changing market conditions.

Question 9

In a low-cost defender SBU will perform best on critical ROI and cash flow dimensions when:

Accepted Answer

High levels of formalization in a low-cost defender SBU help ensure efficiency and cost control, which are crucial for achieving strong ROI and cash flow.

Question 10

A company's production department has many managers who are experts in different fields.The department has a packaging manager,assembly manager,quality manager,and an inspection manager.This division of management responsibilities is an example of:

Accepted Answer

The division of management responsibilities based on different areas of expertise is an example of specialization. Formalization refers to the degree to which an organization has rules, procedures, and written documentation. Centralization refers to the degree to which decision-making authority is held by a small number of individuals at the top of the organization. Standardization refers to the degree to which processes and procedures are consistent across different parts of the organization.

Question 11

In the context of low-cost defender strategy,SBU will perform best on ROI dimension when resolution is:

Accepted Answer

The answer of In the context of low-cost defender strategy,SBU...

Question 12

In the context of differentiated defender strategy,SBU will perform best on ROI dimension when resolution is:

Accepted Answer

A differentiated defender strategy benefits from a participative approach for issues related to differential advantage, as it encourages innovation and responsiveness to market changes, while a hierarchical approach for other issues ensures efficiency and control, optimizing ROI.

Question 13

Which of the following is defined as the division of tasks and activities across positions within the organizational unit?

Accepted Answer

Specialization is the division of tasks and activities among the different positions within an organizational unit. This helps to increase efficiency and effectiveness by allowing employees to focus on their specific areas of expertise.

Question 14

Which of the following 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 at the top levels of an organization's hierarchy. This means that important decisions are made by a relatively small group of people who hold the most power and authority within the organization.

Question 15

Adaptiveness and innovativeness are enhanced when:

Accepted Answer

Informal coordination allows for greater communication and exchange of ideas among members, leading to increased adaptiveness and innovativeness. Limiting specialization or centralizing decision-making can hinder creativity and innovation. Rigid rules and policies can also stifle the ability to adapt and innovate.

Question 16

When a company or SBU has many product-market entries,the:

Accepted Answer

When a company or SBU has many product-market entries, the simple functional form of organization is inadequate because it does not allow for coordination across different products and markets. A more complex form of organization, such as a matrix or divisional structure, is needed to effectively manage multiple product-market entries.

Question 17

Which of the following functional areas is likely to play the most crucial role in low-cost defender businesses?

Accepted Answer

In low-cost defender businesses, the ability to efficiently manage finances is crucial for achieving cost leadership. As such, financial management is likely to play the most crucial role in these businesses. While all functional areas are important, sales and marketing efforts may not be as critical since these businesses are typically competing on price rather than advertising or brand recognition. R&D may also be less important as low-cost defenders often focus on providing reliable, standardized products instead of investing in innovation.

Question 18

In the case of a prospector strategy,SBU will perform best on critical volume and sharegrowth dimensions when its functional strengths include:

Accepted Answer

The prospector strategy involves introducing new products or services to the market. Therefore, SBU will perform best on the critical volume and share growth dimensions when its functional strengths include product R&D and engineering to create innovative and attractive products to gain market share. Financial management and control, distribution, and control, and financial management and distribution are important for any business but are not as crucial for a prospector strategy as product R&D and engineering.

Question 19

The _____ form of organization is the simplest and most bureaucratic design.

Accepted Answer

The functional form of organization is the simplest and most bureaucratic design. This type of organization is structured based on functional areas, such as marketing, finance, and operations. The employees are grouped by their expertise or skill set, and each group reports to a department head or manager. This results in a hierarchical structure with clear lines of authority and specialization. However, this type of structure can be slow to respond to changes and lacks flexibility.

Question 20

When using a prospector strategy,a SBU will perform best on volume and share-growth dimensions when:

Accepted Answer

A prospector strategy focuses on innovation and market development, which requires flexibility and responsiveness. Low levels of formalization in the organizational structure support this by allowing for quicker decision-making and adaptation to new opportunities, aligning with the goals of a prospector strategy.

Quiz 17: Organizing and Planning for Effective Implementation