Question 1

In a typical control system, after performance is compared to established goals and standards, next actions are different depending on whether the performance meets the goals and standards or there is variance between performance and established goals and standards.

Accepted Answer

If the performance meets the goals and standards, the system will continue with the current operations. If there is variance, then corrective actions will be taken to bring the performance back in line with the goals and standards.

Question 2

The human capital of an organization includes the norms and value systems, people within an organization as well as the employees.
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Accepted Answer

Human capital primarily refers to the attributes of a workforce (skills, knowledge, and experience). Norms and value systems are part of an organization's culture, not its human capital.

Question 3

The nature of work being performed has an effect on whether the span of control is narrow or wide which can influence the height of the management hierarchy.

Accepted Answer

The nature of work being performed can determine whether the span of control is narrow or wide, which in turn can affect the height of the management hierarchy. If work is complex and requires close supervision, the span of control may be narrow and the management hierarchy tall. If work is routine and straightforward, the span of control may be wide and the management hierarchy flatter.

Question 4

In a firm with a multidivisional structure, the object is to try to achieve tight coordination between functions with emphasis on R&D, production, and marketing.

Accepted Answer

In a multidivisional structure, the emphasis is typically on decentralization, with each division operating semi-autonomously, focusing on its own operations and profitability rather than tight coordination between different functions across divisions.

Question 5

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 6

Control systems can help managers evaluate how efficiently a company is producing goods and providing services.

Accepted Answer

Control systems provide managers with data and feedback on the performance and productivity of a company's operations. This allows them to assess the efficiency of the company's processes and make adjustments to improve performance.

Question 7

​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 rewards to employees for achieving goals and objectives, which motivates them to work toward improving efficiency, quality, innovation, and responsiveness to customers.

Question 8

Organization architecture is the totality of a firm's organizational arrangements, including its formal organizational structure, controls systems, incentive systems, organizational culture, organizational processes, and human capital.

Accepted Answer

This statement accurately defines organization architecture as the sum of different aspects of a firm's organizational setup.

Question 9

Organizational structure has three dimensions and the horizontal differentiation element refers to the location of decision-making responsibilities within a structure and also to the number of layers in a hierarchy.

Accepted Answer

This statement is true. Horizontal differentiation refers to the location of decision-making responsibilities and the number of layers in a hierarchy within an organizational structure.

Question 10

In a multidivisional structure, corporate managers can compare the performance of one division to another in terms of its cost structure or the profit it generates.

Accepted Answer

In a multidivisional structure, corporate managers can compare the performance of one division to another in terms of its cost structure or the profit it generates. This is one of the advantages of this organizational structure.

Question 11

Different divisions in a firm with a multidivisional structure are not given authority to adopt their own organizational structures.

Accepted Answer

Different divisions in a firm with a multidivisional structure are given some degree of authority to adopt their own organizational structures as long as they fit into the overall structure of the firm.

Question 12

Deciding how to allocate resources within a firm, strategies for developing new products, and how performance of managers will be evaluated are all part of the organizational culture of a company.

Accepted Answer

These aspects are part of strategic management and operational planning rather than organizational culture. Organizational culture refers to the shared values, beliefs, and norms that influence the way employees think, feel, and behave within an organization.

Question 13

Problems such as identifying profitability, lack of accountability, and poor control, led businesses away from a multidivisional structure to a functional business structure.

Accepted Answer

The shift was actually from a functional business structure to a multidivisional structure to address issues like lack of accountability, poor control, and identifying profitability within different parts of large organizations.

Question 14

The organizational hierarchy is flatter in a multidivisional structure than in a product or functional structure.

Accepted Answer

A multidivisional structure typically has a more complex hierarchy with multiple divisions, each with its own functional departments, compared to a product or functional structure which may have a simpler, more centralized hierarchy.

Question 15

No matter how high a hierarchy grows, one problem associated with efficiency is that information passed from one level to the next can be accidently or deliberately distorted.

Accepted Answer

The answer of No matter how high a hierarchy grows,...

Question 16

Company Alpha wants to give top management time to focus on critical issues through increased delegation and the reduction the amount of information top managers have to process. The company also wants to give employees a greater degree of individual freedom and control over their work. The best vertical differentiation option for Company Alpha is centralization.

Accepted Answer

Centralization involves consolidating decision-making power at the top of the organizational hierarchy, which is not aligned with Company Alpha's objectives of reducing the amount of information top managers have to process and giving employees greater control over their work. Decentralization, on the other hand, is a better option as it involves delegating decision-making power to lower levels of the hierarchy, allowing top management to focus on critical issues while giving employees greater autonomy.

Question 17

When differentiation through innovation is high and environmental change is high, the best strategy is a matrix structure with very high integration.

Accepted Answer

The answer of When differentiation through innovation is high and...

Question 18

One of the reasons that IBM almost failed and went bankrupt in the 1990's was due to its outdated corporate culture of consensus-based decision making which while effective in the 1970's, did not allow it to be competitive in the rapid decision making and entrepreneurial risk taking culture of the 1990s,

Accepted Answer

This statement is true. IBM's outdated corporate culture of consensus-based decision making was one of the factors that led to its near failure and bankruptcy in the 1990s. This culture, which was effective in the more stable and slower-paced business environment of the 1970s, did not allow for quick decision making and entrepreneurial risk taking that was necessary to compete in the rapidly changing technology industry of the 1990s. IBM eventually had to overhaul its culture and adopt a more innovative and agile approach to stay competitive.

Question 19

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 culture.

Accepted Answer

Organizational culture refers to the shared values, beliefs, norms, and practices that guide the behavior of individuals within an organization. New employees must learn and adapt to the culture of the organization as they integrate into the workforce.

Question 20

In the multidivisional structure, each division typically contains only a partial set of value-chain activities.

Accepted Answer

In a multidivisional structure, each division typically operates as a separate business or profit center, containing most or all of the value-chain activities necessary to produce and market its own products or services.

Quiz 12: Implementing Strategy Through Organization