Question 1

Which of the following is an advantage of a divisional type of organizational structure?
A) efficient use of managerial and technical talent
B) an enhanced ability to respond quickly to changes in the external environment
C) high degree of emphasis on long-term performance
D) uniformity in image and quality across divisions

Accepted Answer

The focus on products and markets by the divisional executives provides the corporation with an enhanced ability to respond quickly to important changes. Since there are functional departments within each division of the corporation, the problems associated with sharing resources across functional departments are minimized.

Question 2

Which of the following is not a primary factor that a large firm with international operations should consider when choosing the appropriate structure for its organization?
A) the extent of international expansion
B) the type of strategy (global, multidomestic, or transnational)
C) the degree of product diversity
D) the degree of market diversity

Accepted Answer

Deciding upon the most appropriate structure when a firm has international operations depends on three primary factors:the extent of international expansion, the type of strategy (global, multidomestic, or transnational), and the degree of product diversity.

Question 3

Successful organizations create ________ boundaries among the ________ activities as well as between the organization and its external customers,suppliers,and alliance partners.
A) impermeable; external
B) impermeable; internal
C) permeable; external
D) permeable; internal

Accepted Answer

One of the central concepts in this chapter is the importance of boundaryless organizations. Successful organizations create permeable boundaries among the internal activities as well as between the organization and its external customers, suppliers, and alliance partners.

Question 4

The appropriateness of the type of organizational structure depends upon the ________ and ________ of growth.
A) nature; magnitude
B) definition; accessibility
C) accessibility; nature
D) nature; definition

Accepted Answer

Most organizations begin very small and either die or remain small. Those that survive and prosper embark on strategies designed to increase the overall scope of operations and enable them to enter new product-market domains. Such growth places additional pressure on executives to control and coordinate the firm's increasing size and diversity. The most appropriate type of structure depends on the nature and magnitude of growth.

Question 5

Which of the following activities is not identified by organizational structure?
A) managerial
B) executive
C) social responsibility
D) administrative

Accepted Answer

Structure identifies the executive, managerial, and administrative organization of a firm and indicates responsibilities and hierarchical relationships.

Question 6

Structures help to ensure that ________ are used effectively in accomplishing the mission of the organization.
A) strategies
B) relationships
C) resources
D) boundaries

Accepted Answer

Structures help to ensure that resources are used effectively in accomplishing the mission of the organization.

Question 7

Organizations that make it to the growth stage,design strategies to
A) reduce the tendency to increase operational scope.
B) leave exiting product-market domains.
C) increase the overall scope of operations.
D) reduce the commitment to new product-market domains.

Accepted Answer

Most organizations begin very small and either die or remain small. Those that survive and prosper embark on strategies designed to increase the overall scope of operations and enable them to enter new product-market domains.

Question 8

One of the factors that explained the effectiveness of ambidextrous organizational designs in the O'Reilly and Tushman study was that the reward systems emphasized traditional unit goals.

Accepted Answer

The study found that there were many factors. The tight coordination and integration at the managerial levels enabled the newer units to share important resources from the traditional units, such as cash, talent, and expertise. Such sharing was encouraged and facilitated by effective reward systems that emphasized overall company goals.

Question 9

A strategy of related diversification requires most firms to organize around geographical areas or product lines.This type of organizational growth leads to a(n)________ structure.
A) divisional
B) functional
C) matrix
D) international

Accepted Answer

A strategy of related diversification requires a need to reorganize around product lines or geographic markets. This leads to a divisional structure.

Question 10

As illustrated in the opening case for Chapter 10,Boeing lost a lot of control and,therefore,incurred high operating costs for its build out of the 787 Dreamliner because it ________ design and manufacturing.
A) on-shored
B) internalized
C) outsourced
D) internationalized

Accepted Answer

There are a number of possible benefits to outsourcing activities as part of becoming an effective boundaryless organization. However, outsourcing can also create challenges. As in the case of Boeing, the firm lost a large amount of control by using independent suppliers to design and manufacture key subsystems of the 787.

Question 11

Organizational structure refers to the formalized patterns of interactions that link company ________,________,and ________.
A) processes; mechanisms; techniques
B) tasks; mechanisms; techniques
C) processes; people; mechanisms
D) tasks; technologies; people

Accepted Answer

Organizational structure refers to the formalized patterns of interactions that link company tasks, technologies, and people.

Question 12

The two vital ongoing activities necessary for creating boundaryless organizations that managers today must concern themselves with are
A) financial returns and marketplace value.
B) market share and shareholder value.
C) type of structure, mechanisms, processes, and techniques for enhancing permeability.
D) product marketability and capital structure.

Accepted Answer

Managers today are faced with two ongoing and vital activities in structuring and designing their organizations. First, they must decide on the most appropriate type of organizational structure. Second, they need to assess what mechanisms, processes, and techniques are most helpful in enhancing the permeability of both internal and external boundaries.

Question 13

When an organization with a simple structure increases its sales revenue and volume of outputs,it is most likely to develop a ________ structure.
A) divisional
B) functional
C) product-market
D) geographic

Accepted Answer

A new firm with a simple structure typically increases its sales revenue and volume of outputs over time. It may also engage in some vertical integration to secure sources of supply (backward integration) as well as channels of distribution (forward integration). The simple-structure firm then implements a functional structure to concentrate efforts on both increasing efficiency and enhancing its operations and products.

Question 14

When an organization with a functional structure diversifies into related product-markets,it generally
A) maintains its functional structure.
B) develops a divisional structure.
C) develops a matrix structure.
D) develops a worldwide product-division structure.

Accepted Answer

A firm with a functional structure may see its initial markets mature, so it looks beyond its present products and markets for possible expansion. A strategy of related diversification requires a need to reorganize around product lines or geographic markets. This leads to a divisional structure.

Question 15

Functional structures are usually found in organizations where there
A) is high volume production.
B) are unrelated product lines or service offerings.
C) is very little vertical integration.
D) there exists a strong need to decentralize decision making.

Accepted Answer

Functional structures are generally found in organizations in which there is a single or closely related product or service, high production volume, and some vertical integration.

Question 16

A simple structure is characterized by
A) high specialization and low centralization.
B) low specialization and high centralization.
C) low formality and low creativity.
D) high formality and low centralization.

Accepted Answer

The simple organizational structure is the oldest, and most common, organizational form. Most organizations are very small and have a single or very narrow product line in which the owner-manager makes most of the decisions. Decision making is highly centralized and there is little specialization of tasks.

Question 17

In large organizations,a strategy of diversification requires a need to reorganize around ________ or ________.
A) product lines; geographic markets
B) product lines; competition
C) competitor lines; geographic markets
D) distribution lines; competitor markets

Accepted Answer

A strategy of related diversification requires a need to reorganize around product lines or geographic markets. This leads to a divisional structure.

Question 18

Which of the following is an advantage of a functional type of organizational structure?
A) Decentralized decision-making enhances an organization-wide perspective across functions.
B) It facilitates the development of general management talent.
C) Pooling of specialists enhances coordination and control.
D) It is easy to establish uniform performance standards.

Accepted Answer

By bringing together specialists into functional departments, a firm is able to enhance its coordination and control within each of the functional areas.

Question 19

Which of the following statements about simple organizational structures is false?
A) Small firms with a narrow product-market scope will adopt such a structure.
B) Decision-making authority is highly centralized.
C) There is little specialization of tasks.
D) Creativity and individualism are rare.

Accepted Answer

The simple organizational structure is the oldest, and most common, organizational form. Most organizations are very small and have a single or very narrow product line in which the owner-manager (or top executive) makes most of the decisions. Decision making is highly centralized. There is little specialization of tasks. There are few rules and regulations. There exists an informal evaluation and reward system. A simple structure may foster creativity and individualism, since there are generally few rules and regulations.

Question 20

Which of the following is a disadvantage of a functional type of organizational structure?
A) Differences in functional orientation may impede communication and coordination.
B) Use of managerial and technical talent is inefficient due to pooling of expertise in functional areas.
C) Decision making is centralized at the top of the organization.
D) Managers tend to be overly concerned with long-term strategies that minimize the importance of functional area strengths.

Accepted Answer

The differences in values and orientations among functional areas may impede communication and coordination. Departments may come to view themselves as isolated, self-contained units with little need for interaction and coordination with other departments.

Quiz 10: Creating Effective Organizational Designs

Which of the following is an advantage of a divisional type of organizational structure?

Which of the following is not a primary factor that a large firm with international operations should consider when choosing the appropriate structure for its organization?

Successful organizations create boundaries among the activities as well as between the organization and its external customers,suppliers,and alliance partners.

The appropriateness of the type of organizational structure depends upon the and of growth.

Which of the following activities is not identified by organizational structure?

Structures help to ensure that ________ are used effectively in accomplishing the mission of the organization.

Organizations that make it to the growth stage,design strategies to

One of the factors that explained the effectiveness of ambidextrous organizational designs in the O'Reilly and Tushman study was that the reward systems emphasized traditional unit goals.

A strategy of related diversification requires most firms to organize around geographical areas or product lines.This type of organizational growth leads to a(n) ________ structure.

As illustrated in the opening case for Chapter 10,Boeing lost a lot of control and,therefore,incurred high operating costs for its build out of the 787 Dreamliner because it ________ design and manufacturing.

Organizational structure refers to the formalized patterns of interactions that link company ,,and .

The two vital ongoing activities necessary for creating boundaryless organizations that managers today must concern themselves with are

When an organization with a simple structure increases its sales revenue and volume of outputs,it is most likely to develop a ________ structure.

When an organization with a functional structure diversifies into related product-markets,it generally

Functional structures are usually found in organizations where there

A simple structure is characterized by

In large organizations,a strategy of diversification requires a need to reorganize around or .

Which of the following is an advantage of a functional type of organizational structure?

Which of the following statements about simple organizational structures is false?

Which of the following is a disadvantage of a functional type of organizational structure?