Question 1

Chrysler reduced its product development time by adopting a matrix structure.

Accepted Answer

False

Question 2

Balancing centralization and decentralization is a concern in a geographic structure.

Accepted Answer

In a geographic structure, there are different locations or regions that operate somewhat independently but are still part of the larger organization. Balancing centralization and decentralization is important to ensure that the organization has the benefits of both strategies. Too much centralization can lead to bureaucracy and slow decision-making, while too much decentralization can result in inefficiencies and a lack of consistency across the organization. Therefore, finding the right balance is critical.

Question 3

A matrix structure is a mechanistic structure.

Accepted Answer

A matrix structure is considered an organic structure because it is flexible and allows for more collaboration and communication across different departments.

Question 4

In a product division structure, a centralized set of support functions service the needs of a number of different product lines.

Accepted Answer

A product division structure is characterized by a centralized set of support functions that serve multiple product lines within the organization. This helps to improve efficiency, reduce duplication of effort, and ensure consistent service delivery across different product lines.

Question 5

Amazon.com focused on the best way to divide into functions the total task of creating value for customers.

Accepted Answer

This statement is true. Amazon.com is known for its customer-centric approach and its focus on creating value for customers. The company has divided its operations into various functions such as technology, customer service, logistics, and marketing to effectively create value for customers.

Question 6

One disadvantage of the functional structure is that people are not able to supervise one another.

Accepted Answer

This statement is false. In a functional structure, employees are supervised by their functional manager who is responsible for overseeing their work within the specific function.

Question 7

Product team structures consist of groups of individuals whose allegiance is to specific products as opposed to specific functions.

Accepted Answer

Product team structures are organized around specific products and typically consist of individuals from various functions, such as engineering, marketing, and design, all working together to support the success of the product.

Question 8

Corporate headquarters staff often plays an integrating role in the organization by helping managers in different divisions share information.

Accepted Answer

Corporate headquarters staff typically serves as a central point of communication and coordination for different divisions within an organization. This can involve facilitating the sharing of information and resources, aligning strategic goals and initiatives, and promoting collaboration and teamwork across departments. As such, headquarters staff often plays an important integrating role in the organization.

Question 9

People in a group can supervise each other in a functional structure.

Accepted Answer

In a functional structure, people are grouped based on their skills and expertise, and they can supervise each other within their respective functions or departments. This promotes accountability and teamwork among team members.

Question 10

Because managers in each division hire managers and workers independently, the lack of an internal labor market is one disadvantage to a multidivisional structure.

Accepted Answer

The answer of Because managers in each division hire managers...

Question 11

Multidivisional structures have support functions that are placed in self-contained divisions.

Accepted Answer

This statement is true. In a multidivisional structure, support functions such as finance, human resources, and IT are typically placed within self-contained divisions rather than being centralized at the corporate level. This helps to promote autonomy and accountability within each division.

Question 12

Transfer pricing is used in a multidivisional structure so that one division can sell its product or service to another division.

Accepted Answer

Transfer pricing refers to the pricing of goods or services that are transferred between different divisions or departments of the same company. This is commonly used in a multidivisional structure where one division may sell its product or service to another division within the same organization. This can help to allocate costs correctly and ensure that each division is operating efficiently. Therefore, the statement is true.

Question 13

Liz Claiborne restructured by consolidating five divisions into two.

Accepted Answer

Liz Claiborne did indeed restructure by consolidating five divisions into two.

Question 14

A divisional structure groups functions according to the specific demands of products, markets, or customers.

Accepted Answer

This is a true statement. In a divisional structure, different divisions or units are created based on products, markets, or customers, and each division operates as a separate entity with its own set of functions, resources, and goals. This allows organizations to better respond to the unique needs and challenges of each division and to achieve greater operational efficiency and effectiveness.

Question 15

Each division within a product division structure can have a different organizational structure.

Accepted Answer

Each division within a product division structure can have its own unique organizational structure depending on factors such as the nature of the products or services being offered, the market being served, and the specific goals and objectives of that division within the larger product division structure.

Question 16

Decision-making authority is more decentralized in a product team structure than in a product division structure.

Accepted Answer

In a product team structure, the team members have more autonomy and decision-making authority, which allows for quicker decision-making and more agile responses to changes. In contrast, in a product division structure, decision-making power is typically centralized at the top of each division, leading to slower decision-making processes and a more rigid hierarchy.

Question 17

Because Amazon.com sells products in all parts of the world, it needed to move from a functional structure to a geographic structure in order to maximize efficiency.

Accepted Answer

The answer of Because Amazon.com sells products in all parts...

Question 18

When a company moves from a functional structure to the more complex product division structure, a corporate headquarters staff is added.

Accepted Answer

The answer of When a company moves from a functional...

Question 19

A product division structure enables a company to compete in more than one business.

Accepted Answer

A product division structure enables a company to compete in more than one product market, not more than one business.

Question 20

As organizations grow, they typically move to a more complex structure due to the inability to coordinate activities under a traditional functional structure.

Accepted Answer

As organizations grow, there is often an increase in the number of employees and functional areas, which can create challenges in communication, decision-making, and coordination. This can lead to a need for a more complex structure, such as a divisional or matrix structure, to help the organization effectively manage its operations.

Quiz 6: Designing Organizational Structure: Specialization and Coordination