Question 1

Which of the following is a TRUE statement about implementing corporate-level strategies and effective organizational structures?
A) Firms pursuing a related-linked strategy should implement a competitive structure with a competitive culture and centralized strategic planning activities.
B) Firms pursuing an unrelated diversification strategy should use an SBU structure with a small corporate staff, emphasize the R&D function, and integrate divisions to achieve synergies.
C) Firms pursuing a related-linked strategy should use an SBU structure, emphasize interdependence among divisions, and manage the strategic planning function from the central office.
D) Firms pursuing a related-constrained strategy should implement a cooperative structure, use integrative devices to link divisions, centralize the R&D function, and emphasize sharing.

Accepted Answer

The answer of Which of the following is a TRUE...

Question 2

In the ____ multidivisional structure there is complete independence among the firm's divisions.
A) cooperative
B) matrix
C) competitive
D) SBU

Accepted Answer

In a competitive multidivisional structure, each division operates as a separate business competing against each other for resources and profits. There is little to no cooperation among the divisions and they operate with complete independence.

Question 3

A firm pursuing a related-constrained diversification strategy would typically need all of the following EXCEPT
A) centralization of some organizational functions for the sake of coordination.
B) frequent, direct contact between division managers.
C) division managers' rewards based on division financial performance.
D) temporary teams or task forces formed around specific projects.

Accepted Answer

The answer of A firm pursuing a related-constrained diversification strategy...

Question 4

A firm pursuing an unrelated diversification strategy will utilize a ____ structure.
A) network
B) cooperative form multidivisional
C) competitive form multidivisional
D) functional

Accepted Answer

A competitive form multidivisional structure is well-suited for a firm pursuing an unrelated diversification strategy. In this type of structure, each division operates like a separate company, with its own products, markets, and functions. Divisions compete with each other for resources and funding, and the corporate office serves as a form of oversight and coordination. This structure enables the firm to pursue a wide range of businesses, without the need for close coordination between them.

Question 5

Icarus Aviation, Athena Instrumentation, and Hercules Miniaturization are strategic business units of Olympia Industries. One can expect that Icarus, Athena, and Hercules
A) use integrative mechanisms to share core competencies among themselves.
B) compete with one another in Olympia's internal capital markets.
C) are not necessarily related to one another in terms of products or markets.
D) are network member firms while Olympia is the strategic center firms.

Accepted Answer

The answer of Icarus Aviation, Athena Instrumentation, and Hercules Miniaturization...

Question 6

A private university is made up of various "schools," such as the School of Journalism, the School of Business, the School of Law, the School of Arts and Sciences, and so forth. The university is experiencing some financial problems and the top administration has decided to have each school of the university become a profit center. This scheme is somewhat parallel to the organizational ____ structure.
A) network
B) strategic business unit multidivisional
C) functional
D) matrix

Accepted Answer

The decision to have each school become a profit center indicates that they will be operating as individual units with their own profit and loss responsibilities, which is a characteristic of a strategic business unit multidivisional structure. This type of structure is often used by large organizations to improve efficiency and profitability, particularly during times of financial difficulty.

Question 7

When a corporation pursues a related-constrained diversification strategy, financial controls may not add value to strategy implementation efforts since it is difficult to
A) use them without reducing cooperation among divisional managers.
B) transfer capital between units.
C) maintain an arms-length relationship between headquarters and the divisions.
D) identify which objective criteria to monitor.

Accepted Answer

The answer of When a corporation pursues a related-constrained diversification...

Question 8

The LG Company (Chapter 11Strategic Focus) has units operating in significantly different industries and uses financial controls to manage its portfolio. LG is most likely using the ___________ structure.
A) combination-matrix
B) cooperative form multidivisional
C) competitive form multidivisional
D) strategic business unit multidivisional

Accepted Answer

The answer of The LG Company (Chapter 11Strategic Focus) has...

Question 9

The ____ structure is an organizational structure that combines both functional specialization and business product or project specialization.
A) functional
B) worldwide geographic area
C) network
D) matrix

Accepted Answer

The matrix structure combines functional specialization and business product or project specialization. It allows for a more flexible approach to organizing resources and expertise, as teams are formed around specific projects or products while still having access to functional experts.

Question 10

Which organizational structure will emphasize financial controls for headquarters' evaluation of operating units while the operating units will emphasize strategic controls within their units' performance?
A) Functional structure
B) Cooperative M-Form
C) SBU Form
D) Competitive M-Form

Accepted Answer

The SBU form (Strategic Business Unit) is the best choice in this scenario. It allows for each operating unit to have its own strategic control and focus on its specific business goals, while also providing financial controls and evaluation from headquarters. This structure facilitates the alignment of each SBU's strategy with the overall corporate strategy, while still allowing for flexibility and autonomy within each unit. The other options do not provide the same balance between financial and strategic controls. The functional structure is focused solely on functional areas, such as accounting or marketing, and may not allow for cross-functional collaboration. Cooperative M-Form emphasizes the sharing of resources and skills across operating units, but does not necessarily prioritize financial controls. The Competitive M-Form is focused on competition among operating units and may not have a strong emphasis on financial controls.

Question 11

In the ____ structure hierarchy, the headquarters relies on strategic controls to set rate-of-return targets and financial controls to monitor divisional performance relative to those targets.
A) functional
B) cooperative
C) competitive
D) SBU

Accepted Answer

The answer of In the ____ structure hierarchy, the headquarters...

Question 12

Which of the following multidivisional structures is CORRECTLY paired with the appropriate corporate-level strategy?
A) competitive form with related constrained strategy
B) cooperative form with unrelated strategy
C) SBU form with related linked strategy
D) competitive form with related linked strategy

Accepted Answer

The SBU (strategic business unit) form is typically used in conjunction with a related linked strategy, where there is some synergy or sharing between the different business units. The competitive form is typically used with a related constrained strategy, where the firm focuses on a narrow range of related products or services. The cooperative form is typically used with an unrelated strategy, where the firm operates in diverse industries and does not have any natural synergies or connections between its business units. Therefore, the only correct pairing is choice C.

Question 13

The CEO of Transector, Inc., set a 6.5 percent rate-of-return target for all divisions for the past year. Now, at the end of the year, three of Transector's seven divisions have not met this rate-of-return goal. The division managers of these three under-performing divisions have all secretly contacted executive placement firms to investigate openings at other firms, because they know their future at Transector is in jeopardy as financial performance is all-important at Transector. Transector probably uses the ____ structure.
A) competitive form of the multidivisional
B) SBU form of the multidivisional
C) worldwide geographic area
D) distributed strategic network

Accepted Answer

The answer of The CEO of Transector, Inc., set a...

Question 14

The fewest integrative devices are used in the ____ structure.
A) simple
B) competitive multidivisional
C) SBU
D) network

Accepted Answer

The answer of The fewest integrative devices are used in...

Question 15

In the competitive form of the multidivisional structure, the focus of headquarters is on all the following EXCEPT
A) integration.
B) performance appraisal.
C) resource allocation.
D) long range planning.

Accepted Answer

The answer of In the competitive form of the multidivisional...

Question 16

Megaline, Inc., follows the competitive form of the multidivisional structure. It has five divisions. One division has not met the rate-of-return goals for the past year. One division has exceeded the rate-of-return goals. The other three divisions met the rate-of-return goals. The headquarters office is making decisions about where to allocate capital in the next year. Which scenario is the MOST likely?
A) The poorest performing division will get the highest capital allocation so that it can fix its problems and achieve the rate-of-return goal next year.
B) The highest performing division will get the highest capital allocation because it has the best prospects for creating more wealth for the shareholders next year.
C) The average performing divisions which met the rate-of-return goals will receive the highest allocation because their performance exactly matched corporate requirements.
D) All divisions will receive the same capital allocation for the next year because this organizational structure rewards divisional managers based on achievement of strategic goals.

Accepted Answer

In a competitive multidivisional structure, the headquarters office focuses on allocating resources to the division that has the highest potential to create more wealth for shareholders. This means that the highest performing division will most likely receive the highest capital allocation since it was able to exceed the rate-of-return goals for the past year. The poorest performing division may receive less capital allocation or may undergo restructuring to improve its performance. The average performing divisions which met the rate-of-return goals may receive capital allocation to maintain their performance, but the focus will be on supporting the high performing division to maximize the overall success of the company. Therefore, option B is the most likely scenario.

Question 17

Firms such as Textron Inc. that frequently acquire and divest other firms are most likely to use the ____ structure.
A) matrix
B) competitive multidivisional
C) hybrid combination
D) horizontal complementary strategic alliance

Accepted Answer

Textron Inc. frequently acquires and divests other firms, so it will benefit from a competitive multidivisional structure. This type of structure is characterized by separate business units or divisions that compete with each other for resources and customers. This structure allows Textron to be flexible in its decision-making, adapt to changes in the market, and have a clearer focus on each business unit's performance. Additionally, it enables Textron to quickly integrate newly acquired firms into existing divisions and divest underperforming units as needed.

Question 18

The most centralized and most costly form of the multidivisional structure is the
A) integrated.
B) competitive.
C) SBU.
D) cooperative.

Accepted Answer

The answer of The most centralized and most costly form...

Question 19

The heavy use of integrative mechanisms in the ____ multidivisional organizational structure is intended to achieve ____.
A) cooperative; economies of scope
B) competitive; cost efficiencies
C) functional; sensitivity to cultural diversity
D) SBU; quick response to local customer needs

Accepted Answer

The heavy use of integrative mechanisms, such as cross-functional teams and shared resources, in a multidivisional organizational structure is intended to achieve economies of scope. This means leveraging resources and capabilities across multiple divisions to achieve cost efficiencies and improve performance. Choice B could be a possible answer, but it is less likely as a competitive multidivisional structure would focus more on differentiation and innovation rather than cost efficiencies. Choices C and D are not accurate as functional and SBU structures have different integrative mechanisms and goals.

Question 20

In an SBU structure, ____ is/are evaluated using strategic controls, whereas ____ is/are evaluated using financial controls.
A) each SBU, divisions within the SBUs
B) divisions within the SBUs, each SBU
C) managers of the SBUs, headquarters staff
D) headquarters staff, managers of the SBUs

Accepted Answer

According to an SBU (Strategic Business Unit) structure, divisions within the SBUs are evaluated using strategic controls, whereas each SBU is evaluated using financial controls. Therefore, the best choice is B, where strategic controls are used for divisions and financial controls are used for each SBU. The other choices are not accurate as managers of the SBUs and headquarters staff do not directly relate to the evaluation process in an SBU structure.

Quiz 11: Structure and Controls with Organizations

Which of the following is a TRUE statement about implementing corporate-level strategies and effective organizational structures?

In the ____ multidivisional structure there is complete independence among the firm's divisions.

A firm pursuing a related-constrained diversification strategy would typically need all of the following EXCEPT

A firm pursuing an unrelated diversification strategy will utilize a ____ structure.

Icarus Aviation, Athena Instrumentation, and Hercules Miniaturization are strategic business units of Olympia Industries. One can expect that Icarus, Athena, and Hercules

When a corporation pursues a related-constrained diversification strategy, financial controls may not add value to strategy implementation efforts since it is difficult to

The LG Company (Chapter 11Strategic Focus) has units operating in significantly different industries and uses financial controls to manage its portfolio. LG is most likely using the ___________ structure.

The ____ structure is an organizational structure that combines both functional specialization and business product or project specialization.

Which organizational structure will emphasize financial controls for headquarters' evaluation of operating units while the operating units will emphasize strategic controls within their units' performance?

In the ____ structure hierarchy, the headquarters relies on strategic controls to set rate-of-return targets and financial controls to monitor divisional performance relative to those targets.

Which of the following multidivisional structures is CORRECTLY paired with the appropriate corporate-level strategy?

The fewest integrative devices are used in the ____ structure.

In the competitive form of the multidivisional structure, the focus of headquarters is on all the following EXCEPT

Firms such as Textron Inc. that frequently acquire and divest other firms are most likely to use the ____ structure.

The most centralized and most costly form of the multidivisional structure is the

The heavy use of integrative mechanisms in the multidivisional organizational structure is intended to achieve .

In an SBU structure, is/are evaluated using strategic controls, whereas is/are evaluated using financial controls.