Question 1

Which of the following is not true of a Stage I corporation?
A) It is typified by the entrepreneur.
B) The entrepreneur tends to make all the important decisions personally.
C) The Stage I corporation has little formal structure.
D) Planning tends to be long range and progressive.
E) The greatest strength of a Stage I corporation is its flexibility and dynamism.

Accepted Answer

Planning in a Stage I corporation tends to be short-term and reactive rather than long range and progressive.

Question 2

A candidate for a fourth stage in corporate development is the
A) conglomerate structure.
B) functional structure.
C) divisional structure.
D) matrix structure.
E) hybrid structure.

Accepted Answer

The answer of A candidate for a fourth stage in...

Question 3

A corporation run by a team of managers with functional specializations and which successfully operates in one industry is said to be a
A) Stage I company.
B) Stage II company.
C) Stage III company.
D) Stage IV company.
E) Stage V company.

Accepted Answer

A corporation with functional specializations and successful operation in one industry is typically a Stage II company. Stage I companies are typically led by an entrepreneurial founder, while Stage III, IV, and V companies are characterized by more complex structures and strategies, such as expansion into new markets or industries.

Question 4

During Stage II of the organizational life cycle,the structure most likely to be implemented is
A) entrepreneur-dominated.
B) functional management.
C) decentralization into profit or investment centers.
D) structural surgery.
E) dismemberment of structure.

Accepted Answer

During Stage II of the organizational life cycle, organizations typically move towards a more structured form of management to handle increased complexity and demands. This often involves implementing functional management, where the organization is divided into departments or units based on specialized functions (e.g., marketing, finance, operations). This structure helps in organizing tasks more efficiently and is suitable for the growth phase that characterizes Stage II.

Question 5

In Stage III of a corporation,when various units of the company optimize their sales and profits without regard to the overall corporation,the organization may be experiencing a crisis of
A) leadership.
B) control.
C) autonomy.
D) decentralization.
E) empowerment.

Accepted Answer

When units of a corporation prioritize their own sales and profits without considering the overall well-being of the corporation, it indicates a lack of control or centralized decision-making. This can lead to inefficiencies and conflicts within the organization.

Question 6

Objectives that are personal and subjective and are typified by an entrepreneurial spirit describe what stage of corporate development?
A) Stage I company
B) Stage II company
C) Stage III company
D) Stage IV company
E) Stage V company

Accepted Answer

Personal and subjective objectives and an entrepreneurial spirit are characteristic of the early stages of corporate development, typically Stage I. This stage is also referred to as the development or startup stage, where the company is often run by the founder or a small team with a clear vision and mission for the business.

Question 7

When the drive of the entrepreneur is no longer enough to keep the Stage I company from floundering,this type of crisis is called
A) a crisis of autonomy.
B) a crisis of confidence.
C) a crisis of clarity.
D) a crisis of differentiation.
E) a crisis of leadership.

Accepted Answer

A crisis of leadership occurs when the entrepreneur's drive and leadership abilities are no longer enough to keep the company afloat. It often happens in Stage I when the company is still in its infancy and heavily relies on the entrepreneur's vision and direction. The crisis of leadership can lead to a loss of focus, direction, and motivation among employees, which can ultimately result in failure.

Question 8

When the people managing diversified product lines in a functionally structured corporation need more decision-making freedom than top management is willing to delegate to them,there is a crisis of
A) autonomy.
B) confidence.
C) clarity.
D) differentiation.
E) leadership.

Accepted Answer

When functional managers need more decision-making freedom than top management is willing to grant, there is a crisis of autonomy. Autonomy refers to the degree of independence and self-governance that functional managers have in decision-making processes. A crisis of autonomy can arise when functional managers feel that their decision-making abilities are constrained or restricted, which can ultimately hinder their ability to effectively manage their product lines.

Question 9

In a Stage I company,if the entrepreneur falters,the company usually flounders.This is labeled by Greiner as a crisis of
A) autonomy.
B) confidence.
C) clarity.
D) differentiation.
E) leadership.

Accepted Answer

In Stage I of the organizational life cycle, the success of the company highly depends on the leadership and vision of the entrepreneur. Therefore, if the entrepreneur falters or fails, the company is likely to struggle or fail as well. This crisis is labeled as a leadership crisis by Greiner.

Question 10

What is the additional phase in the organizational life cycle that may occur sometime during the maturity or decline stages?
A) pause phase
B) acquisition phase
C) recovery phase
D) temporal displacement phase
E) revival phase

Accepted Answer

The additional phase that may occur sometime during the maturity or decline stages is the revival phase. This is a temporary phase where an organization experiences a renewed sense of growth or innovation after a period of decline. It may involve new leadership, restructuring, or a shift in strategy.

Question 11

Stage IV of a corporation could involve a pressure-cooker crisis.

Accepted Answer

Stage IV of a corporation, also known as the bureaucracy stage, is characterized by an emphasis on rules and regulations, increased formalization, and a focus on internal control. However, this stage can also lead to a pressure-cooker crisis, where a seemingly minor issue can escalate to a major problem due to the rigidity of the bureaucracy. This can result in a crisis for the corporation.

Question 12

During Stage V of the organizational life cycle,the popular strategy is
A) concentration in a niche.
B) horizontal and vertical growth.
C) liquidation or bankruptcy.
D) concentric and conglomerate diversification.
E) profit strategy followed by retrenchment.

Accepted Answer

The answer of During Stage V of the organizational life...

Question 13

Any change in corporate strategy is very likely to require some sort of change in the way an organization is structured and in the kind of skills needed in particular positions.

Accepted Answer

When corporate strategy changes, the goals and direction of the organization may shift, requiring a different structure and skill set to effectively execute the new strategy.

Question 14

Alfred Chandler,known for his study of large American corporations,concluded that
A) organic structure is best for firms in a changing environment.
B) mechanistic structure is best for firms in a changing environment.
C) structure follows strategy.
D) strategy follows structure.
E) strategic business units are the key to effective decentralization.

Accepted Answer

Chandler's famous theorem "Structure follows strategy" conveys the idea that a company's structure should be designed to support its chosen strategy. Therefore, choice C is the correct answer.

Question 15

The concept that structure follows strategy was developed by Alfred Chandler.

Accepted Answer

This statement is true. Alfred Chandler, a business historian and Harvard professor, wrote extensively on the relationship between a firm's strategy and its structure. He argued that a firm's structure should be designed in alignment with its strategic goals and objectives.

Question 16

Stage III in the organizational life cycle is the
A) birth stage.
B) growth stage.
C) maturity stage.
D) decline stage.
E) death stage.

Accepted Answer

Stage III is characterized by the maturity stage, where the organization has established a stable position in the market and has reached a level of consistent growth. The focus is on maintaining profitability and efficiency, as well as innovation to sustain the organization's success. This stage may last for an extended period, but eventually, the organization may enter a decline stage if it fails to adapt to changes in the market or address internal challenges.

Question 17

Stage V in the organizational life cycle is the
A) birth stage.
B) growth stage.
C) maturity stage.
D) decline stage.
E) death stage.

Accepted Answer

The answer of Stage V in the organizational life cycle...

Question 18

An external block preventing a corporation from moving from one stage to another is
A) unfavorable economic conditions.
B) strategic myopia.
C) organizational inflexibility.
D) lack of ability.
E) lack of resources.

Accepted Answer

Unfavorable economic conditions are an external factor that can prevent a corporation from progressing, as they are outside the control of the organization and can significantly impact its operations and growth opportunities.

Question 19

According to Chandler and others,which factors MUST be closely aligned to avoid the consequences of poor organizational performance?
A) management, workforce, and customers
B) operations, marketing, and finance
C) strategy, structure, and environment
D) rules, goals, and tasks
E) hierarchy, contacts, and integrators

Accepted Answer

According to Chandler and other scholars, in order to avoid the consequences of poor organizational performance, the factors that must be closely aligned are strategy, structure, and environment. This means that an organization's overall goals and direction must be aligned with its internal structure and the external environmental factors that influence its operations. While other factors such as management, workforce, and marketing are certainly important, they are secondary to this core alignment of strategy, structure, and environment.

Question 20

Research generally supports Chandler's proposition that structure follows strategy as well as the reverse proposition that structure influences strategy.

Accepted Answer

Research has shown that there is a reciprocal relationship between strategy and structure, and that both can influence each other. Chandler's famous assertion that "structure follows strategy" has also been supported by empirical evidence.

Quiz 10: Strategy Implementation: Organizing and Structure

Which of the following is not true of a Stage I corporation?

A candidate for a fourth stage in corporate development is the

A corporation run by a team of managers with functional specializations and which successfully operates in one industry is said to be a

During Stage II of the organizational life cycle,the structure most likely to be implemented is

In Stage III of a corporation,when various units of the company optimize their sales and profits without regard to the overall corporation,the organization may be experiencing a crisis of

Objectives that are personal and subjective and are typified by an entrepreneurial spirit describe what stage of corporate development?

When the drive of the entrepreneur is no longer enough to keep the Stage I company from floundering,this type of crisis is called

When the people managing diversified product lines in a functionally structured corporation need more decision-making freedom than top management is willing to delegate to them,there is a crisis of

In a Stage I company,if the entrepreneur falters,the company usually flounders.This is labeled by Greiner as a crisis of

What is the additional phase in the organizational life cycle that may occur sometime during the maturity or decline stages?

Stage IV of a corporation could involve a pressure-cooker crisis.

During Stage V of the organizational life cycle,the popular strategy is

Any change in corporate strategy is very likely to require some sort of change in the way an organization is structured and in the kind of skills needed in particular positions.

Alfred Chandler,known for his study of large American corporations,concluded that

The concept that structure follows strategy was developed by Alfred Chandler.

Stage III in the organizational life cycle is the

Stage V in the organizational life cycle is the

An external block preventing a corporation from moving from one stage to another is

According to Chandler and others,which factors MUST be closely aligned to avoid the consequences of poor organizational performance?

Research generally supports Chandler's proposition that structure follows strategy as well as the reverse proposition that structure influences strategy.