Question 1

A major disadvantage of a matrix structure is that ________.
A) it limits the flow of information throughout the organization
B) it reduces the quality of decision making
C) it does not make optimum use of a firm's human resources
D) it often makes performance evaluations more complex

Accepted Answer

In a matrix structure, employees often have multiple bosses or superiors, which can make performance evaluations more complex as multiple individuals may have different expectations for the employee's work. This can also lead to confusion and conflicts about priorities and assignments. While options A, B, and C can be challenges with a matrix structure, they are not necessarily major disadvantages. With effective communication channels and clear leadership, information flow, decision-making, and human resource allocation can still be successful in a matrix structure.

Question 2

In a product structure,each product is treated as a ________; that is,the expenses related to a product are subtracted from the revenues generated by selling it.
A) profit center
B) cost center
C) core competency
D) functional division

Accepted Answer

In a product structure, each product is treated as a profit center because the expenses related to a product are subtracted from the revenues generated by selling it, and the resulting figure is the profit or loss generated by that product. This helps in assessing the profitability of each product and making decisions regarding investments, pricing, and production levels. Cost center refers to any unit or department within an organization that is responsible for incurring costs but does not generate revenues directly. Core competency refers to a unique strength or expertise that sets an organization apart from its competitors, and functional division refers to the grouping of similar tasks or activities within an organization.

Question 3

An advantage of the regional structure is that ________.
A) it usually fosters a strong sense of accountability for performance among managers
B) it reduces the likelihood of conflict and coordination difficulties
C) it reduces the duplication of functional resources across regions
D) it fosters competitive behavior among regions

Accepted Answer

The regional structure usually fosters a strong sense of accountability for performance among managers, as each region is responsible for its own performance targets and goals. This can increase motivation and drive among managers and employees, as they have a greater sense of ownership and responsibility for their region's success.

Question 4

Companies that advocate unity of command would be least likely to adopt which organizational structure?
A) customer
B) division
C) functional
D) matrix

Accepted Answer

The matrix structure is characterized by employees having dual reporting relationships and working on multiple projects or tasks simultaneously, which can result in conflicting orders and violate the unity of command principle. Therefore, companies that advocate unity of command would be least likely to adopt a matrix structure. The other options - customer, division, and functional - typically have clear reporting relationships and are more compatible with the unity of command principle.

Question 5

Which of the following is true about functional structures?
A) It is one of the most complex structures.
B) It increases the duplication of the firm's functional resources.
C) It facilitates specialization of the firm's functional knowledge.
D) It leads to a broad view of the organization's overall goals.

Accepted Answer

Functional structures facilitate specialization of the firm's functional knowledge, which means that each department or function can focus on its own area of expertise and become highly skilled in it. This can lead to increased efficiency and effectiveness in performing tasks related to that function. Options A, B, and D are incorrect as functional structures are generally simpler than other structures, do not increase duplication of resources, and do not necessarily lead to a broad view of overall goals.

Question 6

Which of the following is true regarding the customer structure?
A) It reduces the duplication of functional resources.
B) It decreases the firm's responsiveness to actions taken by competitors.
C) It often makes it difficult to coordinate between customer units and corporate objectives.
D) It is suitable when customers' needs and preferences are homogeneous.

Accepted Answer

The customer structure can make it difficult to coordinate between customer units and corporate objectives because it focuses on meeting the specific needs of different customer groups, which may not always align with the broader goals of the organization.

Question 7

________ is the practice of taking a significant activity within the organization and contracting that activity out to an independent party.
A) Insourcing
B) Outsourcing
C) Homeshoring
D) Networking

Accepted Answer

Outsourcing is the practice of taking a significant activity within the organization and contracting it out to an independent party. Insourcing is the opposite, where a business moves a function it previously outsourced back in-house. Homeshoring is a specific form of outsourcing where workers complete their tasks off-site but within the same country as the business. Networking refers to the act of creating and maintaining relationships with others in the industry for the purpose of exchanging information, advice, and referrals.

Question 8

Which of the following statements characterizes a firm that operates within a "high-networked" structure?
A) It uses outside organizations for only a limited number of minor value chain activities.
B) It has little contact with firms to which work has been outsourced.
C) It owns and executes most of its primary and support value chain activities.
D) It has more value chain activities networked to external organizations than it owns and executes internally.

Accepted Answer

A firm that operates within a "high-networked" structure has more value chain activities networked to external organizations than it owns and executes internally. This means that the firm relies heavily on external organizations to perform various value chain activities, such as manufacturing, logistics, and marketing. This allows the firm to focus on its core competencies while leveraging the expertise and resources of external organizations.

Question 9

A matrix structure ________.
A) is best suited to a changing and complicated business environment
B) simplifies the process of performance evaluation
C) increases organizational responsiveness to environmental changes
D) fosters a strong sense of accountability for performance among managers

Accepted Answer

A matrix structure is advantageous in a changing and complicated business environment because it allows for flexibility and quick adaptation to new challenges. However, it can also lead to complexity and difficulty in decision-making.

Question 10

A ________ consists of two organizational structures superimposed on each other.As a consequence,one person essentially reports to two bosses.
A) divisional structure
B) functional structure
C) matrix structure
D) regional structure

Accepted Answer

In a matrix structure, employees are supervised by two bosses - a functional manager and a project or product manager. This allows for a more flexible approach to managing complex projects and enables departments to work together more effectively.

Question 11

Which of the following is a characteristic of a product structure?
A) It maximizes economies of scale for functional areas.
B) It increases coordination among different product groups.
C) It reduces organizational responsiveness to market changes.
D) The performance of the firm's products is typically easier to evaluate.

Accepted Answer

The performance of the firm's products is typically easier to evaluate when a product structure is used. This is because a product structure groups products together based on their similar characteristics, which makes it easier to track and compare their performance.

Question 12

A ________ facilitates the use of modular products,each of which is different but which contain some of the same parts.Thus,modular parts are produced and assembled in different ways to produce several different products.
A) regional structure
B) customer structure
C) matrix structure
D) division structure

Accepted Answer

A divisional structure is commonly used in businesses that have multiple product lines or services. This type of structure allows for each division to have its own resources, decision-making capabilities, and focus on a specific market segment. Within each division, modular products can be produced and assembled in different ways to create various products. This allows for efficient use of resources and flexibility in adapting to changing customer demands.

Question 13

Which of the following is a weakness of the regional structure?
A) It reduces the firm's responsiveness to unique changes in the market.
B) It usually fosters a weak sense of accountability for performance among regional managers.
C) It reduces the duplication of functional resources across regions.
D) It often creates cross-regional coordination difficulties.

Accepted Answer

The regional structure can create coordination difficulties between different regions, as they may have different priorities and goals. This can slow down decision-making and hinder the firm's ability to respond quickly to changes in the market. The other options - A, B, and C - are not weaknesses of the regional structure.

Question 14

In which of the following ways are product and customer structures similar?
A) They both increase companies' ability to leverage global scale economies.
B) They both increase the international orientation of all managers.
C) They both boost responsiveness to changing market conditions.
D) They both result in ambiguous lines of authority.

Accepted Answer

Both product and customer structures allow companies to be more responsive to changing market conditions. A product structure is organized around specific products or product lines, and a customer structure is organized around specific customer groups or segments. In both cases, the focus is on meeting the unique needs and preferences of customers, which leads to greater responsiveness and agility in adapting to changing market conditions. The other options are incorrect: A is not necessarily true for both structures, B is not applicable to both structures, and D is not always the case for both structures.

Question 15

Which of the following structural combinations best depicts the U.S.military?
A) formal and decentralized
B) informal and decentralized
C) formal and centralized
D) informal and centralized

Accepted Answer

The U.S. military follows a formal and centralized structure, with clear channels of authority and a hierarchical chain of command. This is necessary for ensuring efficient and effective operations, coordination between various branches of the military, and adherence to strict discipline and standards. While there may be informal relationships within the military, the overall structure is formal and centralized.

Question 16

SLPL Limited adheres to a strategy that allows managers to focus on core competencies or the activities that are most likely to yield competitive advantage.In doing so,SLPL outsources most of the activities in its value chain to other companies,retaining just a few elements.From the above example,it can be concluded that SLPL has a ________ structure.
A) high-networked
B) divisional
C) matrix
D) global product

Accepted Answer

SLPL Limited is focusing on its core competencies and outsourcing most of its value chain activities, which is characteristic of a high-networked structure. This approach relies on a network of external companies to perform various functions, allowing the firm to concentrate on its strengths.

Question 17

A bank organizes itself around the basic services it provides: personal banking,corporate and business banking,and rural banking.Each service group has its own finance,marketing,operations,and human resource management departments.The bank is using a ________.
A) functional structure
B) product structure
C) division structure
D) matrix structure

Accepted Answer

A product structure groups activities based on the products or services offered by the organization. In this case, the bank is organized around the basic services it provides: personal banking, corporate and business banking, and rural banking.

Question 18

Which of the following is true about a divisional structure?
A) Organizing various product families within a division can increase functional duplication.
B) It reduces economies of scale for the firm's functional activities.
C) Cross-regional coordination within product families and within the division is often easier.
D) It ensures that division objectives are well aligned with corporate objectives.

Accepted Answer

A divisional structure organizes the company based on product families or geographic regions, which allows for easier coordination within these units. However, this can also lead to functional duplication and reduced economies of scale. The alignment of divisional objectives with corporate objectives may not always be ensured.

Question 19

Multinational firms usually use ________ structures when customer needs for a given product are similar throughout the international markets in which the firm participates.
A) global product
B) functional
C) divisional
D) multiproduct

Accepted Answer

The global product structure is the most appropriate choice when a multinational firm experiences similar customer needs for a particular product across different international markets. This structure centralizes decision-making for a specific product globally, allowing the firm to achieve economies of scale and uniformity in product design, production, and marketing. Functional, divisional, and multiproduct structures may not fit the requirement of similarity in customer needs across international markets.

Question 20

One of the major weaknesses of the ________ structure is that it often inhibits coordination and communication among different regions.
A) customer
B) functional
C) geographic
D) product

Accepted Answer

The geographic structure divides the organization into different regions, which can often create silos and hinder communication and coordination between those regions.

Quiz 6: Organizational Structure and Design

A major disadvantage of a matrix structure is that ________.

In a product structure,each product is treated as a ________; that is,the expenses related to a product are subtracted from the revenues generated by selling it.

An advantage of the regional structure is that ________.

Companies that advocate unity of command would be least likely to adopt which organizational structure?

Which of the following is true about functional structures?

Which of the following is true regarding the customer structure?

________ is the practice of taking a significant activity within the organization and contracting that activity out to an independent party.

Which of the following statements characterizes a firm that operates within a "high-networked" structure?

A matrix structure ________.

A ________ consists of two organizational structures superimposed on each other.As a consequence,one person essentially reports to two bosses.

Which of the following is a characteristic of a product structure?

A ________ facilitates the use of modular products,each of which is different but which contain some of the same parts.Thus,modular parts are produced and assembled in different ways to produce several different products.

Which of the following is a weakness of the regional structure?

In which of the following ways are product and customer structures similar?

Which of the following structural combinations best depicts the U.S.military?

A bank organizes itself around the basic services it provides: personal banking,corporate and business banking,and rural banking.Each service group has its own finance,marketing,operations,and human resource management departments.The bank is using a ________.

Which of the following is true about a divisional structure?

Multinational firms usually use ________ structures when customer needs for a given product are similar throughout the international markets in which the firm participates.

One of the major weaknesses of the ________ structure is that it often inhibits coordination and communication among different regions.