Question 1

Functional structure provides people with the opportunity to learn from one another and become more specialized and productive.

Accepted Answer

Functional structure is designed to group employees with similar skills and expertise together, which allows them to learn from each other and become more specialized in their area of work. This specialization and knowledge sharing can lead to increased productivity within the organization.

Question 2

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

Accepted Answer

In a product division structure, the support functions such as marketing, finance, HR, etc. are centralized and support multiple product lines within the same division. Each product line has its own dedicated resources for R&D and manufacturing.

Question 3

Use of multidivisional structure avoids duplication of organizational activities.

Accepted Answer

Multidivisional structures can actually lead to duplication of activities across divisions, as each division may have its own set of functions such as marketing, finance, and HR.

Question 4

In a multidivisional structure, each division is independent and self-contained.

Accepted Answer

In a multidivisional structure, each division operates as an independent business unit, responsible for its own operations, products, and profits, allowing for specialization and focused management.

Question 5

The more centralized an organization, the more of a problem communication will be.

Accepted Answer

In a centralized organization, decision making is done by higher-level management, which can lead to slower communication down the chain of command. Additionally, employees may feel less empowered to speak up and share ideas, leading to a further breakdown in communication.

Question 6

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

Accepted Answer

A functional structure organizes a company according to common functions, such as marketing, sales, finance, and production, rather than by products, markets, or customers.

Question 7

Servicing the needs of new kinds of customer groups and tailoring products to suit them are relatively simple in a functional structure.

Accepted Answer

Tailoring products to suit new customer groups may require a more flexible and adaptable organizational structure than a traditional functional structure.

Question 8

Most Fortune 500 companies use a functional structure because it allows them to grow and expand their operations while maintaining control over their activities.

Accepted Answer

The answer of Most Fortune 500 companies use a functional...

Question 9

A multidivisional structure is characterized by a corporate headquarters staff which is composed of corporate managers who are responsible for overseeing the activities of the divisional managers heading up the different divisions.

Accepted Answer

A multidivisional structure is also known as a "divisional structure" or "M-form structure" where the corporate headquarters monitors the performance of the different divisions that operate as semi-autonomous units, each with its own functional departments such as marketing, finance, operations, etc.

Question 10

In a multidivisional structure, corporate headquarters can identify the divisions in which an investment of capital will yield the highest returns.

Accepted Answer

In a multidivisional structure, the corporate headquarters has the ability to analyze the performance of each division and allocate capital strategically to the divisions that can yield the highest returns. This is a key advantage of the multidivisional structure.

Question 11

The structure that organizations most commonly adopt to solve the control problems that result from producing many different kinds of products in many different locations for many different types of customers is the divisional structure.

Accepted Answer

The divisional structure allows for the creation of semi-autonomous divisions that can specialize in different products, locations, or customer groups. This helps to solve control issues and allow for more efficient management of diverse operations.

Question 12

The higher the level of differentiation, the more complex the integrating mechanisms that managers need to use to control organizational activities.

Accepted Answer

As the level of differentiation in an organization increases, the activities become more specialized and the need for coordination and integration increases. This requires managers to use more complex integrating mechanisms such as standardization, mutual adjustment, and formalization.

Question 13

As an organization increases the kinds of goods it manufactures or the services it provides, a functional structure becomes more effective at coordinating task activities.

Accepted Answer

As an organization increases the variety of goods it manufactures or services it provides, a divisional structure tends to be more effective because it allows for specialization in specific product lines or services, improving coordination and focus.

Question 14

A divisional structure is a design that groups people into separate functions or departments because they share common skills and expertise because they make use of the same resources.

Accepted Answer

A divisional structure groups employees based on products, services, markets, or geographical locations, not because they share common skills or resources.

Question 15

As an organization with a functional structure grows, the cost of each function's contribution to the development of each product becomes increasingly simple to measure.

Accepted Answer

As an organization with a functional structure grows, the complexity of operations increases, making it more difficult to accurately measure the cost contribution of each function to the development of each product due to increased interdepartmental dependencies and overhead costs.

Question 16

A functional structure has greater vertical and horizontal differentiation than a divisional structure and employs more complex integrating mechanisms.

Accepted Answer

A divisional structure typically has greater vertical and horizontal differentiation due to its focus on diverse product lines or geographic areas, requiring more complex integrating mechanisms to coordinate its varied operations, unlike the functional structure which is organized around specific functions or activities.

Question 17

A product structure is a type of a functional structure.

Accepted Answer

A product structure is a type of a divisional structure, which groups employees and resources by product line or business unit, whereas a functional structure groups employees based on their specialized skills and functions.

Question 18

Multidivisional structures tend to be the tallest of all organizational structures.

Accepted Answer

Multidivisional structures involve multiple levels of management and can result in a tall organizational structure.

Question 19

Functional structure is the foundation of horizontal differentiation.

Accepted Answer

Functional structure is a type of organizational structure characterized by functional departments that perform specialized tasks. This results in horizontal differentiation, as different departments have different functions and responsibilities within the organization.

Question 20

The goal behind the change to a divisional structure is to create smaller, more manageable subunits within an organization.

Accepted Answer

The statement is true. A divisional structure breaks down a large organization into smaller units, called divisions, each with its own functional areas and responsibilities. This allows for better communication, increased efficiency, and more focused decision-making within each division.

Quiz 6: Designing Organizational Structure: Specialization and Coordination