Scenario 4.1
LMNO Corporation is a U.S.-based company with four distinct businesses, including a national music and video store chain, a rap music production company, a talent agency that represents several famous rap stars, and a digital video disc (DVD) production facility that makes and records music videos on DVDs. LMNO is in the process of acquiring another company, its major music store rival BeBop Records. Because its rap stars are so famous, LMNO charges crazed fans a higher price for its music compact discs and DVD videos. The fans don't mind, as they often have the opportunity to meet the rap stars in person at various LMNO music stores throughout the year. LMNO has a policy of promotion from within as well as a no-layoff policy, and all managers are required to rotate through each business before they can be promoted.
-Refer to Scenario 4.1. Which organizational form or design is LMNO likely to have adopted?
A) Functional, or U-form
B) Conglomerate, or H-form
C) Divisional, or M-form
D) Horizontal
E) Vertical

Question

Quizplus · Accepted Answer

LMNO Corporation's four distinct businesses indicate that it has a divisional, or M-form, organizational structure. Each business operates as a separate division with its own functional units, such as marketing and operations, allowing for more autonomy and specialization within each division. The rotation requirement for managers also supports a divisional structure, as it encourages familiarity with and understanding of each business. Additionally, LMNO's acquisition strategy, where it acquires a major music store rival, fits with a divisional structure where each business operates as a distinct entity.

Scenario 4.1 LMNO Corporation Is a U.S.-Based Company with Four Distinct Businesses