Question 1

The costs of operating a multi-divisional structure are high compared to the functional structure.

Accepted Answer

Multi-divisional structure involves more coordination, communication, and administration due to the presence of several divisions. This results in higher costs compared to the functional structure, where the organization is split into departments based on functions, such as finance, marketing, or production. The functional structure is relatively simpler, with a clear hierarchy and fewer layers of management, resulting in lower costs of operation.

Question 2

The profitability of different business divisions is hard to ascertain in the multi-divisional structure.

Accepted Answer

The answer of The profitability of different business divisions is...

Question 3

Corporate managers must carefully control interactions with division managers to ensure that both short- and long-term goals are being met.

Accepted Answer

Corporate managers need to ensure that all divisions are working towards achieving the overall goals of the company. They need to monitor and control interactions to ensure that each division is aligned with the strategic objectives of the company. By doing so, they can ensure that short-term and long-term goals are being met.

Question 4

The multi-divisional structure allows each division to adopt the structure that best suits its needs.

Accepted Answer

The multi-divisional structure is designed to allow each division to operate independently and adopt a structure that best suits its unique needs and goals. This allows for greater flexibility and specialization, which can improve overall organizational performance.

Question 5

Divisional battles may lead to battles over transfer pricing.

Accepted Answer

Divisional battles occur when different divisions within a company compete for resources and power. Transfer pricing refers to the prices that are charged for goods and services transferred between different divisions of the same company. As divisions may have different goals and objectives, transfer pricing can become a contentious issue and may lead to divisional battles.

Question 6

Organizational control is the process by which managers monitor the ongoing activities of an organization and its members to evaluate whether activities are being performed efficiently and effectively.

Accepted Answer

Organizational control involves monitoring and evaluating the efficiency and effectiveness of an organization's activities and members.

Question 7

The implementation issue for managers is to match differentiation with the level of integration to make organizational structure work efficiently.

Accepted Answer

Managers need to balance differentiation and integration to ensure the organizational structure functions effectively. This involves determining the appropriate level of differentiation (such as creating different departments or teams for specific tasks) while also maintaining enough integration (such as communication and collaboration across departments) to avoid silos and facilitate coordination. Failure to balance these aspects can result in inefficiencies and hinder the achievement of organizational goals.

Question 8

The most common measures managers and other stakeholders use to monitor and evaluate a company's performance are financial controls.

Accepted Answer

Financial controls, such as balance sheets, income statements, and cash flow statements, are commonly used by managers and stakeholders to monitor and evaluate a company's performance.

Question 9

Output controls exist when strategic managers establish goals and measures to evaluate efficiency, quality, innovation, and responsiveness to customers.

Accepted Answer

Output controls are a type of control that involves setting goals and measures to evaluate efficiency, quality, innovation, and responsiveness to customers, among other aspects. Therefore, the statement is true.

Question 10

Behavior control is a system of control based on the establishment of a comprehensive system of rules and procedures to direct the actions or behavior of divisions, functions, and individuals.

Accepted Answer

This statement accurately describes the concept of behavior control.

Question 11

The product-team structure relies on the multi-divisional teams.

Accepted Answer

The product-team structure typically organizes teams around specific products or product lines, focusing on end-to-end responsibility for the product, rather than dividing the organization into multiple divisions based on function or geography.

Question 12

In a firm with a multi-divisional structure, corporate managers oversee the actions of divisional managers.

Accepted Answer

In a multi-divisional structure, corporate managers typically have oversight over the actions of divisional managers, and may make strategic decisions for the company as a whole.

Question 13

Strategic control systems are the formal target-setting, measurement, and feedback systems that enable strategic managers to evaluate whether a company is implementing its strategy successfully.

Accepted Answer

Strategic control systems are indeed the formal target-setting, measurement, and feedback systems used by strategic managers to evaluate the successful implementation of a company's strategy.

Question 14

An organization that divides manufacturing and operations be regions uses geographic structure.

Accepted Answer

Geographic structure is a type of organizational structure that divides operations based on geography or regional locations. This type of structure is often used by organizations with multiple locations or branches in different regions to ensure efficient management and coordination of operations.

Question 15

In a multi-divisional structure corporate managers can compare the performance of one division against another in terms of its cost structure or the profit it generates.

Accepted Answer

In a multi-divisional structure, corporate managers can compare the performance of one division against another in terms of its cost structure or the profit it generates. This is because each division operates as a separate entity with its own financial statements, allowing for easy analysis and comparison.

Question 16

One advantage of the multi-divisional structure over a functional structure is that each distinct product line or business unit is placed in its own self-contained unit or division, with all support functions.

Accepted Answer

This is true since the multi-divisional structure allows for greater autonomy and accountability of each business unit, as well as better management of resources and specialization in each division's functions. This can lead to improved efficiency, flexibility, and responsiveness to market changes.

Question 17

A complex form of integrating mechanisms is needed when a company's structure is complex.

Accepted Answer

When a company has a complex structure, it usually means that different departments, teams and individuals are heavily interdependent on each other, which makes integrating mechanisms complex as well. Therefore, a complex form of integrating mechanisms is needed to ensure cohesion and effective coordination across the organization.

Question 18

When more than two functions or divisions share a common problem, a task force may be the appropriate integrating mechanism.

Accepted Answer

This statement is true. When there is a common problem that affects more than two functions or divisions within an organization, a task force can be formed to collaborate and find a solution. The task force usually includes members from each function or division and they work together to overcome the issue. The task force can also act as an integrating mechanism by bringing together diverse perspectives and skills from different parts of the organization to find a common solution.

Question 19

Competition for resources is one of the advantages of the multi-divisional structure.

Accepted Answer

Competition for resources is actually a disadvantage of the multi-divisional structure as each division may compete for limited resources, such as funding or talent, which can create conflicts and inefficiencies.

Question 20

In the multi-divisional structure day-to-day operations are the responsibility of corporate headquarters.

Accepted Answer

In the multi-divisional structure, day-to-day operations are the responsibility of each division, not corporate headquarters. Corporate headquarters is responsible for setting overall strategy, coordinating between divisions, and providing support services to the divisions.

Quiz 9: Implementing Strategy Through Organizational Design