Question 1

Flat organizational structures are characterized by
A) few levels of management and a relatively narrow span of control.
B) few levels of management and a relatively wide span of control.
C) many levels of management and a relatively narrow span of control.
D) many levels of management and a relatively wide span of control.
E) None of these.

Accepted Answer

A flat organizational structure is one that has few levels of management and a relatively wide span of control. This means that there are fewer layers of management between upper management and lower-level employees, and that each manager oversees a larger number of employees directly. This makes the organization more decentralized and allows for more autonomy and decision-making at lower levels.

Question 2

Tall organizational structures are characterized by
A) few levels of management and a relatively narrow span of control.
B) few levels of management and a relatively wide span of control.
C) many levels of management and a relatively narrow span of control.
D) many levels of management and a relatively wide span of control.
E) None of these.

Accepted Answer

Tall organizational structures have many levels of management and a relatively narrow span of control, meaning that each manager has fewer subordinates to manage. This results in a more hierarchical and bureaucratic organization with slower communication and decision-making processes.

Question 3

Which of the following is not one of the advantages of a functional structure?
A) Increasing specialization and productivity of workers
B) Sharing of task-specific knowledge
C) Easier for employees to monitor each other
D) Better focus on diverse customer needs
E) Greater ability for managers to exercise control

Accepted Answer

A functional structure is designed to focus on specific functions or departments within a company. One advantage is that it can increase specialization and productivity of workers, as well as facilitate the sharing of task-specific knowledge. Another advantage is that it can provide easier for employees to monitor each other and for managers to exercise control. However, a functional structure may not necessarily lead to a better focus on diverse customer needs, as it may not encourage cross-functional collaboration and communication.

Question 4

_______________ provides the vehicle through which managers can coordinate the activities of a company's various functions, divisions, and business units to take advantage of their skills and competencies.
A) Organizational structure
B) Decentralization
C) Organizational culture
D) Span of control
E) Strategic control

Accepted Answer

Organizational structure provides the framework for formalizing communication channels, decision-making authority, and tasks and responsibilities, which allow managers to coordinate the activities of a company's various functions, divisions, and business units to leverage their expertise and capabilities.

Question 5

In the ___________ structure activities are grouped by product line.
A) functional
B) product team
C) geographical
D) multi-divisional
E) product

Accepted Answer

In the product structure, activities are grouped by product line.

Question 6

Which of the following is not a problem in firms with a tall organizational structure?
A) Motivational problems
B) Wide spans of control
C) Information distortion
D) High managerial costs
E) Coordination problems

Accepted Answer

Wide spans of control are a problem in firms with a flat organizational structure, not a tall one. Tall structures typically have narrower spans of control with more layers of management, so this is not an issue in such organizations.

Question 7

In a multidivisional structure
A) support functions, such as accounting, are centralized at the top of the organization.
B) corporate headquarters staff have operating responsibility.
C) divisional managers have overall corporate strategic responsibility.
D) corporate headquarters is responsible for overseeing the company's long-term plans and providing guidance to divisional managers.
E) financial controls are necessarily weak.

Accepted Answer

In a multidivisional structure, corporate headquarters is responsible for overseeing the company's long-term plans and providing guidance to divisional managers. Divisional managers have operational responsibility while support functions may be centralized or decentralized depending on the specific structure, but they are not necessarily centralized at the top of the organization. Financial controls should not necessarily be weak in a multidivisional structure.

Question 8

Each organizational function needs to develop a distinctive competency in a value creation activity in order to increase
A) efficiency.
B) quality.
C) customer responsiveness.
D) innovation.
E) all of the above.

Accepted Answer

Developing a distinctive competency in value creation activity can help increase efficiency by reducing waste and optimizing processes, improve quality by delivering products and services that meet or exceed customer expectations, enhance customer responsiveness by understanding and meeting customer needs, and foster innovation by continually improving and introducing new ideas and products. Therefore, all of the above options are correct.

Question 9

The "minimum chain of command" principle states that firms should use the __________ levels of hierarchy that are necessary, and often result in organizational structures that are __________.
A) most; taller
B) fewest; taller
C) minimum; ineffective
D) minimum; flatter
E) highest; flat

Accepted Answer

The "minimum chain of command" principle suggests that firms should use the minimum levels of hierarchy necessary, which would result in a flatter organizational structure. This is because shorter chains of command are associated with faster decision-making and greater flexibility, which are important in modern business environments. Therefore, option D is the correct answer. Option A is incorrect because using the most levels of hierarchy would not align with this principle. Option B is incorrect because it suggests that firms should use the fewest levels of hierarchy, which is not necessarily true. Option C is also incorrect because it implies that using the minimum chain of command would result in an ineffective structure. Finally, option E is incorrect because using the highest levels of hierarchy contradicts the concept of a flatter structure.

Question 10

As new, small firms grow and mature, which structure are they likely to choose?
A) Simple
B) Geographic
C) Product
D) Matrix
E) Functional

Accepted Answer

As new small firms grow and mature, they are likely to choose a functional structure. This is because a functional structure provides a clear hierarchy, allows for specialization, and encourages efficient decision making. It also allows for better coordination and communication among employees, which is essential for small firms looking to expand and develop a competitive advantage. Simple and geographic structures are too limited for rapidly growing firms, while product and matrix structures can be too complex and difficult to manage.

Question 11

In the _________________, the manufacturing function is broken down into different product lines based on the similarities and differences among products.
A) The product structure
B) The product team structure
C) The matrix structure
D) The product and product team structures
E) The matrix and product team structures

Accepted Answer

The product structure is the manufacturing function broken down into different product lines based on similarities and differences among products.

Question 12

A camera manufacturer that has separate divisions for making personal cameras, movie cameras, and film acquired a small film developer and a car battery supplier. Which of the following structures is most appropriate for this firm?
A) Functional
B) Multidivisional
C) Geographic
D) Matrix
E) Product team

Accepted Answer

A multidivisional structure would be the most appropriate for this firm because it has separate divisions for personal cameras, movie cameras, and film. Acquiring a film developer and a car battery supplier would likely lead to further diversification and separate divisions, making the multidivisional structure the best choice. The other structures would not be as appropriate for this type of organization.

Question 13

When decision-making responsibilities are decentralized, benefits include all of the following except
A) increased motivation and accountability.
B) lower managerial costs from flattened hierarchy.
C) reduced information overload.
D) easier coordination of the organizational activities needed to pursue a company's strategies.
E) All of these are benefits of decentralization.

Accepted Answer

Decentralization means decision-making responsibilities are transferred to lower levels of management. This can lead to increased motivation and accountability (A), lower managerial costs (B), and reduced information overload (C) for top-level managers. However, decentralized decision-making can also make it more difficult to coordinate organizational activities needed to pursue a company's strategies (D), as individual units may pursue their own goals rather than aligning with overall organizational objectives. Therefore, D is not a benefit of decentralization.

Question 14

In the ___________ structure activities are grouped by geographic region.
A) geographical
B) product
C) functional
D) multidivisional
E) product team

Accepted Answer

The geographical structure groups activities based on geographic regions.

Question 15

The advantages of a multi-divisional structure do not include
A) enhanced corporate financial controls.
B) enhanced strategic controls.
C) reduced differentiation.
D) enhanced ability to overcome organizational limits to its growth.
E) stronger pursuit of internal efficiency.

Accepted Answer

Reduced differentiation is not an advantage of a multi-divisional structure. In fact, a multi-divisional structure is designed to increase differentiation between different business units or divisions within a larger organization, so that each division can focus on its specific products, services, customers, and markets. This greater differentiation can lead to more efficient and effective allocation of resources, clearer accountability, and improved performance.

Question 16

The two main innovations in a multidivisional structure (over a functional or product structure) are
A) a matrix structure at the divisional level and a flat structure at the corporate level.
B) a product structure at the divisional level and a functional structure at the corporate level.
C) the organization of business units into one or more divisions and the placement of corporate-level positions to oversee the activities and financial control over each division.
D) self-contained divisions with operating responsibility and a group of divisional managers with collective strategic responsibility.
E) a matrix structure at the divisional level and a functional structure at the corporate level.

Accepted Answer

The two main innovations in a multidivisional structure are the organization of business units into one or more divisions and the placement of corporate-level positions to oversee the activities and financial control over each division. This structure provides better control and coordination within each division and also allows for more efficient allocation of resources across the organization.

Question 17

Authority is _________________ when managers at the upper levels of the organizational hierarchy retain the authority to make the most important decisions.
A) decentralized
B) centralized
C) dispersed
D) universally effective
E) differentiated

Accepted Answer

Centralized authority refers to the decision-making power concentrated at the upper levels of an organization, where managers retain the authority to make the most important decisions. Decentralized authority, on the other hand, refers to dispersing decision-making power to lower levels of the organization. Dispersed, universally effective, and differentiated are not terms commonly used to describe authority structures in organizations.

Question 18

Which of the following structures results in the creation of an office of corporate headquarters staff?
A) Functional
B) Multi-divisional
C) Geographic
D) Matrix
E) Product team

Accepted Answer

In a multi-divisional structure, there are multiple divisions that have their own staff and resources. The central corporate headquarters staff is responsible for coordinating and overseeing the activities of these different divisions, making it the structure that leads to the creation of an office of corporate headquarters staff.

Question 19

To best meet the needs of its customers, a nationwide home supply company, such as Home Depot, should adopt a _______________ structure.
A) geographical
B) product
C) functional
D) multidivisional
E) product team

Accepted Answer

A geographical structure would allow the home supply company to have regional divisions that can cater to the specific needs and preferences of customers in each area. This would help the company tailor its products and services for customers in different locations, such as stocking items that are more popular in certain regions or adjusting marketing strategies to appeal to local audiences. Additionally, having regional divisions can facilitate faster and more efficient delivery of products to customers.

Question 20

In a multidivisional structure, which form of control is used to compare the relative performances of different divisions?
A) Output control
B) Bureaucratic control
C) Control through culture
D) Financial control
E) Adaptive control

Accepted Answer

Financial control is the form of control used to compare the relative performances of different divisions in a multidivisional structure. This involves measuring the financial performance of each division against predetermined targets or benchmarks, such as budgeted revenue, expenses, and profits. This enables the management to identify which divisions are performing well and which ones need improvement, and to take appropriate corrective actions.

Quiz 9: Implementing Strategy Through Organizational Design

Flat organizational structures are characterized by

Tall organizational structures are characterized by

Which of the following is not one of the advantages of a functional structure?

_______________ provides the vehicle through which managers can coordinate the activities of a company's various functions, divisions, and business units to take advantage of their skills and competencies.

In the ___________ structure activities are grouped by product line.

Which of the following is not a problem in firms with a tall organizational structure?

In a multidivisional structure

Each organizational function needs to develop a distinctive competency in a value creation activity in order to increase

The "minimum chain of command" principle states that firms should use the levels of hierarchy that are necessary, and often result in organizational structures that are .

As new, small firms grow and mature, which structure are they likely to choose?

In the _________________, the manufacturing function is broken down into different product lines based on the similarities and differences among products.

A camera manufacturer that has separate divisions for making personal cameras, movie cameras, and film acquired a small film developer and a car battery supplier. Which of the following structures is most appropriate for this firm?

When decision-making responsibilities are decentralized, benefits include all of the following except

In the ___________ structure activities are grouped by geographic region.

The advantages of a multi-divisional structure do not include

The two main innovations in a multidivisional structure (over a functional or product structure) are

Authority is _________________ when managers at the upper levels of the organizational hierarchy retain the authority to make the most important decisions.

Which of the following structures results in the creation of an office of corporate headquarters staff?

To best meet the needs of its customers, a nationwide home supply company, such as Home Depot, should adopt a _______________ structure.

In a multidivisional structure, which form of control is used to compare the relative performances of different divisions?