Question 1

Flat structures can lead to information distortion when data are being sent either up or down the hierarchy.

Accepted Answer

Flat structures typically have fewer hierarchical levels, which can reduce the chances of information distortion as there are fewer layers for the information to pass through.

Question 2

Effective organizational design can allow a company to obtain a competitive advantage but it has no impact on profitability.

Accepted Answer

Effective organizational design can improve productivity and efficiency, leading to cost savings and increased revenue, which ultimately affects profitability. A company with a well-designed organizational structure can allocate resources more effectively and respond better to changes in the market, which can give it a competitive advantage.

Question 3

Controls at each level should provide the basis on which managers at the levels below design their control systems.

Accepted Answer

This statement is true as controls at higher levels of management should serve as a framework for designing control systems at lower levels. This ensures alignment and consistency in the organization's overall control strategy.

Question 4

When companies become too tall and the chain of command too long, strategic managers tend to lose control over the hierarchy and, subsequently, their strategies.

Accepted Answer

As companies become too tall and the chain of command too long, it becomes difficult to communicate effectively and efficiently throughout the organization, which can lead to strategic managers losing control over the hierarchy and their strategies.

Question 5

Silica Dustcloud Inc.is a decentralized organization.This means that the organization promotes flexibility and reduces bureaucratic costs because lower-level managers are authorized to make on-the-spot decisions.

Accepted Answer

A decentralized organization distributes decision-making authority and encourages flexibility in lower-level managers, which reduces bureaucratic costs.

Question 6

The purpose of organizational structure is to provide managers with specific feedback on how well an organization and its members are performing and building competitive advantage.

Accepted Answer

The purpose of organizational structure is to define roles, responsibilities, and the hierarchy within an organization, facilitating coordination and communication, not specifically to provide feedback on performance or competitive advantage.

Question 7

Information technology (IT) is playing an increasing role in strategy formulation.However, strategy implementation is not affected by IT in general.

Accepted Answer

IT can have a significant impact on strategy implementation, through the use of technology to automate processes, improve communication and collaboration, and provide real-time information for decision-making. IT can also create new opportunities for innovation and disruption in business models, which can affect strategy implementation.

Question 8

A division is a way of grouping functions to allow an organization to better produce and dispose of its goods and
senriCes.

Accepted Answer

This statement is true. Divisions are often created within an organization to group together functions or departments that are related to each other, allowing for greater efficiency in producing and delivering goods or services. Additionally, divisions may be established to specialize in specific areas or to target different customer segments, helping the organization better meet the needs and preferences of its customers.

Question 9

For each function, a cost leader adopts output controls that allow it to monitor and evaluate functional performance closely.

Accepted Answer

Cost leaders closely monitor functional performance to achieve their cost advantage. By adopting output controls, they can monitor and evaluate performance closely and make necessary adjustments to maintain their cost leadership.

Question 10

The need for integrating mechanisms is greater when a company's structure is more complex.

Accepted Answer

When a company's structure is more complex, there are more departments, functions, and processes involved. Integrating mechanisms help in coordinating and aligning these different aspects. Therefore, the need for integrating mechanisms is greater in such situations.

Question 11

The reward system affects motivation, however, the type of organizational culture that develops in a company is primarily affected by the founder's values and not the reward system.

Accepted Answer

The answer of The reward system affects motivation, however, the...

Question 12

Bradley is a new employee in the sales department at a local car dealership.In his first few months on the job, he will be learning the norms and values of the organization.This refers to organizational socialization.

Accepted Answer

This statement is true. Organizational socialization refers to the process by which new employees learn the values, norms, and culture of an organization in order to become fully integrated and effective members of the organization.

Question 13

Organizational structure contributes to the strategy formulation by providing the framework of tasks and roles that reduces transaction difficulties and allows employees to think and behave in ways that allow a company to achieve superior performance.

Accepted Answer

Organizational structure provides the framework for defining roles, responsibilities, and relationships within a company, which helps to minimize transaction difficulties and enables employees to work together effectively towards achieving strategic goals. This is why organizational structure is an important factor in strategy formulation.

Question 14

An important purpose of control systems is to motivate employees to work toward increasing efficiency, quality,
innovation, and responsiveness to customers.

Accepted Answer

Control systems provide feedback and performance measurement to employees, which can motivate them to work towards improving efficiency, quality, innovation, and customer responsiveness.

Question 15

Effective strategy implementation is very important for cost leaders, but it is of less importance to differentiators.

Accepted Answer

Effective strategy implementation is important for all types of strategies, including cost leadership and differentiation. Both types of strategies require successful execution to achieve competitive advantage and organizational success.

Question 16

Span of control refers to the number of subordinates who report directly to one supervisor.

Accepted Answer

Span of control is defined as the number of subordinates supervised directly by a manager or supervisor.

Question 17

Research finds that centralization of authority is never advantageous, not even in time of crisis.

Accepted Answer

Centralization of authority can be advantageous in times of crisis as it allows for quick decision-making and a unified direction, which can be critical in managing urgent situations effectively.

Question 18

Control through culture is ineffective because employees do not internalize values.

Accepted Answer

Control through culture can be highly effective as employees often internalize the values and norms of the organization, which guides their behavior and decision-making in alignment with the company's goals.

Question 19

A product structure requires that support activities from a company's value chain be decentralized so that independent specialists in support activities exist within each product group.

Accepted Answer

Decentralizing support activities in a product structure is not a requirement; companies can choose to centralize or decentralize support activities based on their strategy and operational needs.

Question 20

Control systems can help managers evaluate how efficiently they are producing goods and services.

Accepted Answer

Control systems provide managers with feedback and information regarding the effectiveness and efficiency of their operations. This information can be used to evaluate how well goods and services are being produced and identify areas for improvement.

Quiz 12: Implementing Strategy in Companies That Compete in a Single Industry