Question 1

The noted business historian Alfred Chandler viewed the multidivisional structure as an innovative response to
A) an emerging professional management philosophy.
B) the increasing demand by consumers for both quality and low-price.
C) coordination and control problems.
D) a shift toward the global economy.

Accepted Answer

Alfred Chandler saw the multidivisional structure as a solution to the coordination and control problems faced by large and complex organizations. By creating semi-autonomous divisions that could focus on specific products or markets, the parent company could better manage its overall operation and ensure that each department was held accountable for its performance. This allowed the company to better adapt to changes in the marketplace and respond to customer needs.

Question 2

One disadvantage of the functional structure is that
A) career paths and professional development are limited.
B) dual reporting relationships blur lines of authority.
C) the CEO cannot coordinate and control the efforts of functional level employees.
D) communication is difficult among organizational functions.

Accepted Answer

The answer of One disadvantage of the functional structure is...

Question 3

Organizational structure
A) specifies the firm's formal reporting relationships, procedures, controls, and authority and decision-making processes.
B) specifies the firm's informal reporting relationships, procedures, controls, and authority and decision-making processes.
C) specifies the firm's formal value proposition, the markets it will serve, and how the firm will provide value in those markets.
D) specifies the firm's control mechanisms, grievance procedures, reporting relationships, procedures, and authority over decision-making processes.

Accepted Answer

Organizational structure specifies the formal arrangement of jobs within an organization and is concerned with the reporting relationships and hierarchy of authority, decision-making processes, controls, and procedures. It outlines the roles and responsibilities of employees and specifies how tasks are to be performed and coordinated to achieve organizational goals. Thus, option A is the best choice. Option B is incorrect because informal reporting relationships are not part of the organizational structure, but rather the informal communication channels that exist within an organization. Option C is incorrect because it refers to the firm's strategy and value proposition, which are different from the organizational structure. Option D is incorrect because it only focuses on control mechanisms and grievance procedures, which are part of the broader human resource management function.

Question 4

Alliances of organizations in the same position on the value chain are known as vertical alliances.

Accepted Answer

The answer of Alliances of organizations in the same position...

Question 5

Firms implementing the multidomestic strategy often attempt to isolate themselves from global competitive forces by establishing protected market positions or by competing in industry segments that are most affected by differences among local countries.

Accepted Answer

This statement correctly describes the approach of firms implementing the multidomestic strategy, which emphasizes localization and adaptation to local markets. By establishing protected market positions or focusing on industry segments with high local differentiation, these firms can limit direct competition with global rivals and benefit from local advantages.

Question 6

Selecting the organizational structure and controls that effectively implement the chosen strategy is a challenge for managers because
A) firms must be flexible while retaining a degree of stability.
B) managers are never able to obtain all the information necessary to make the best selection.
C) the structure of a firm should not duplicate the structures of its competitors.
D) the environment changes too rapidly for corporations to maintain a consistent corporate structure.

Accepted Answer

Selecting the organizational structure and controls that effectively implement the chosen strategy is a challenge for managers because firms must balance the need to be flexible and adaptable to changing environments while also maintaining a degree of stability and consistency. It is important for firms to find the right balance between these two conflicting needs in order to optimize their performance and achieve their strategic objectives.

Question 7

Distributed strategic networks are the organizational structure used to manage international cooperative strategies.

Accepted Answer

Distributed strategic networks are indeed the organizational structure used to manage international cooperative strategies. This structure is characterized by various members who form separate nodes, each with its own set of resources and capabilities, but who come together to exchange knowledge, resources, and competencies in order to achieve shared objectives.

Question 8

Strategic controls allow corporate-level managers to
A) evaluate business-level performance on objective criteria.
B) concentrate on day-to-day corporate operations.
C) assess performance of employees and managers in each business unit.
D) examine the fit between what the firm might do and what it can do.

Accepted Answer

Strategic controls are used to evaluate whether the firm's strategy is aligned with its capabilities and resources. This involves examining the fit between what the firm can do and what it might choose to do. Option A is incorrect as it describes operational controls, which are used to evaluate business-level performance. Option B is incorrect as it implies a focus on operational rather than strategic issues. Option C is incorrect as it describes managerial controls, which are used to assess the performance of employees and managers in each business unit.

Question 9

In the hybrid form of the combination structure, some divisions are oriented toward products while others are oriented toward market areas.

Accepted Answer

In the hybrid form of the combination structure, some divisions are oriented toward products while others are oriented toward market areas. This structure combines both product and geographic structures.

Question 10

The benefits of a simple structure include all of the following EXCEPT
A) ease of coordination within the organization.
B) no need for sophisticated information systems.
C) active involvement by the owner-manager.
D) specialists can develop deep expertise.

Accepted Answer

The answer of The benefits of a simple structure include...

Question 11

Structural stability affects the organization's ability to:
A) resist organizational inertia.
B) cope with uncertainty about cause-and-effect relationships in the global economy.
C) develop new competitive advantages.
D) predictably manage its daily work routines.

Accepted Answer

Structural stability refers to an organization's ability to maintain a stable and predictable work environment. This means that it can manage its daily work routines in a predictable manner, which can lead to operational efficiency and improved productivity. Choices A, B, and C are not directly related to structural stability.

Question 12

Alfred Chandler found that firms grow in a predictable pattern, and that the firm's growth patterns determine its structural form. Which form corresponds to the FINAL stage in Chandler's theory?
A) functional
B) simple
C) vertically integrated
D) multidivisional

Accepted Answer

According to Chandler's theory, the final stage of a firm's growth pattern corresponds to the multidivisional structure. This structure involves the creation of multiple self-contained units that are managed centrally but have autonomy in their operations. This structure allows the firm to efficiently manage a complex and diverse set of products, markets, and geographies.

Question 13

A strategic network can be characterized as a loose federation of partners revolving around a strategic center firm.

Accepted Answer

A strategic network is a network of partners who work together towards a common goal or objective, with a strategic center firm at the core. However, this network is not a formal or tightly integrated one, but rather a loose and flexible one.

Question 14

For firms in a vertical complementary alliance (such as between Toyota and its suppliers), it is more difficult to identify the strategic center firm than in a horizontal complementary alliance (e.g., airline alliances).

Accepted Answer

The answer of For firms in a vertical complementary alliance...

Question 15

Typically, an organization using a simple structure would be
A) large.
B) small.
C) of any size if the firm is privately held.
D) a family-owned-and-managed firm of any size.

Accepted Answer

A simple structure is typically used by small organizations with low levels of complexity and formality.

Question 16

The divisions within each SBU are related in terms of shared products or markets, but the divisions of one SBU have little in common with the divisions of the other SBUs.

Accepted Answer

This statement accurately describes the structure of an SBU (strategic business unit) in which the different divisions within the same SBU are related and have shared products or markets, but the SBUs themselves may operate independently from each other and have little in common with each other.

Question 17

The worldwide product divisional structure has centralized decision-making authority in the worldwide division headquarters to coordinate and integrate decisions and actions among business units.

Accepted Answer

The statement accurately describes the worldwide product divisional structure, which concentrates decision-making power at the division level to ensure conformity and coherence across business units worldwide.

Question 18

The selection of an organizational structure for an internationally diversified firm should consider the international corporate level strategy the firm is using.

Accepted Answer

The selection of an organizational structure must be aligned with the international corporate level strategy of the firm, as different strategies may require different structures to effectively manage the complexities of an international operation.

Question 19

One reason why a long-tenured top-level manager may hesitate to conclude the firm's structure is a problem is that doing so
A) indicates to competitors that the firm is vulnerable to a hostile takeover.
B) will only lead to inefficiencies.
C) requires the firm undertake multi-year restructuring period that will delay retirement.
D) suggests that their previous choices were not the best ones.

Accepted Answer

A long-tenured top-level manager may hesitate to conclude the firm's structure is a problem because it suggests that their previous choices were not the best ones, which can be a blow to their ego and reputation. They may also fear that admitting to a problem could lead to the loss of their position or authority within the organization.

Question 20

The organizational structure for an internationally diversified firm requires trade-offs between global integration and local market responsiveness.

Accepted Answer

This is because a globally integrated organizational structure seeks to standardize operations across all markets for efficiency and cost savings, while a locally responsive structure must be adapted to local market conditions and customer preferences for better sales and customer satisfaction. Achieving both requires balancing the two approaches, which can be challenging for multinational companies.

Quiz 13: Organizational Structure and Controls Emea Edition

The noted business historian Alfred Chandler viewed the multidivisional structure as an innovative response to

One disadvantage of the functional structure is that

Organizational structure

Alliances of organizations in the same position on the value chain are known as vertical alliances.

Firms implementing the multidomestic strategy often attempt to isolate themselves from global competitive forces by establishing protected market positions or by competing in industry segments that are most affected by differences among local countries.

Selecting the organizational structure and controls that effectively implement the chosen strategy is a challenge for managers because

Distributed strategic networks are the organizational structure used to manage international cooperative strategies.

Strategic controls allow corporate-level managers to

In the hybrid form of the combination structure, some divisions are oriented toward products while others are oriented toward market areas.

The benefits of a simple structure include all of the following EXCEPT

Structural stability affects the organization's ability to:

Alfred Chandler found that firms grow in a predictable pattern, and that the firm's growth patterns determine its structural form. Which form corresponds to the FINAL stage in Chandler's theory?