MAN4720 Ch 11

Companies pursuing business-level strategies like cost leadership, differentiation, and integration should organize using a _____ structure. - matrix - multidivisional - functional - simple

Functional

Which of the following terms describes searching for new knowledge that may enhance a firm's future performance? - exploitation - ambidexterity - exploration - diversification

Exploration

A tightly coupled system of strategy and structure is prone to break apart when - input and output controls restrict information flow - organizational culture becomes adaptive to change - managers fail to recognize the need for organizational inertia - external and internal shifts put pressure on the system

External and internal shifts put pressure on the system

Motivation that is driven by external factors, such as rewards or punishments, is called ______ motivation. - input - extrinsic - autonomous - intrinsic

Extrinsic

True or false: Organizational culture should never change.

False

Which of the following types of control defines expected results in order to guide employee behavior? - output controls - input controls - upstream controls - throughput controls

Output controls

Which of the following tends to directly improve employee conformity and performance? - peer control - organizational inertia - open innovation - social complexity

Peer control

True or false: Firms that pursue either related or unrelated diversification generally employ a multidivisional structure.

True

True or false: The functional structure results in difficulty communicating across departments.

True

Select all that apply Which of the following are effects that a strong organizational culture can have on employee behavior? - stronger commitment, engagement, and effort - increased demand for hierarchy and supervision - more effective cooperation - behavior aligns more closely with the firm's strategic goals

- stronger commitment, engagement, and effort - more effective cooperation - behavior aligns more closely with the firm's strategic goals

Select all that apply A firm's organizational structure directly determines which of the following aspects of the firm? (Check all that apply.) - the distribution of resources - the orchestration of individual and team work efforts - the level of demand for the firm's products - the number of competitors in the firm's industry

- the distribution of resources - the orchestration of individual and team work efforts

Which of the following is a situation in which individuals follow a leader without challenging or critically evaluating the leader's ideas? - non-evaluation - anti-think - groupthink - grouping

Groupthink

When causal relationships among values, norms, artifacts, and the firm's performance are hard to establish, making it difficult to imitate a firm's culture, the culture is characterized by ______. - principal-agent problems - social complexity - managerial hubris - causal ambiguity

Causal ambiguity

Which of the following defines who reports to whom? - centralization - specialization - control - hierarchy

Hierarchy

Which of the following is a characteristic of a mechanistic organization? - low formalization - flat hierarchy - decentralization - high degree of specialization

High degree of specialization

Motivation that is driven by the employee's interest and the meaning of the work itself is called ______ motivation. - selfish - extrinsic - internal - intrinsic

Intrinsic

Employees learn about their firm's culture through ______. - socialization - initiation - integration - formalization

Socialization

Which of the following explains how values and norms act as a control mechanism? - They specifying the steps required in certain processes and operations - They reduce conformity among employees - They help employees address unpredictable problems - They decrease the degree of integration among functional units

They help employees address unpredictable problems

Which of the following is instrumental in creating a tightly coupled system of strategy and structure in an organization? - dynamic organizational strategy and structure - limited input and output controls - financial metrics that focus on long-term performance - managers that achieve a mastery of the firm's current environment

Managers that achieve a mastery of the firm's current environment

Select all that apply Which of the following are true of cross-functional teams? (Check all that apply.) - They work on a specific product or project - They represent a long-term or permanent change in organizational structure - They are made up of higher-level managers - They are meant to facilitate collaboration between departments

- They work on a specific product or project - They are meant to facilitate collaboration between departments

Select all that apply Which of the following are benefits of a functional structure that also apply to the matrix structure? (Check all that apply.) - decentralized focus - domain expertise - economies of scale - responsiveness

- decentralized focus - responsiveness

Select all that apply Which of the following are frequently associated with organic organizations? (Check all that apply.) - high levels of employee satisfaction - fast decision making - lower employee motivation - greater employee creativity - a rigid flow of information

- high levels of employee satisfaction - fast decision making - greater employee creativity

Select all that apply Which of the following are characteristics of simple organizational structures? (Check all that apply.) - low formalization - high degree of specialization - flat hierarchies - single leader makes all important decisions

- low formalization - flat hierarchies - single leader makes all important decisions

Select all that apply Which of the following are examples of input controls (check all that apply) - standard operating procedures - budgets - results-only-work-environments - carrot-and-stick approach

- standard operating procedures - budgets

Select all that apply What are two internal governance mechanisms put in place to align principal and agent incentives? (Check all that apply.) - illicit negativism - strategic control - reward systems - transnational formation

- strategic control - reward systems

Select all that apply Which two of the following accurately describe mechanistic organizations? (Check all that apply.) - they are highly specialized - they have a low level of specialization - they have a tall hierarchy - they rely on decentralized decision making

- they are highly specialized - they have a tall hierarchy

Because executives make decisions about structure and strategy, ______. - structure and culture are essentially the same thing - a firm's culture typically stays the same as it was when the firm was founded - a change in leadership often results in a change in culture - culture depends most heavily on the choices of employees

A change in leadership often results in a change in culture

Which type of structure uses domain expertise to separate employees into specific areas based on their purpose, such as sales and human resources? - an organic structure - an operational structure - a functional structure - a mechanistic structure

A functional structure

Which of the following structures is a combination of the multidivisional structure and the functional structure? - a waterfall structure - a universal structure - a simple structure - a matrix structure

A matrix structure

Firms that pursue ______ strategy tend to use a global matrix structure. - a transnational - a national - a divestiture - any global

A transnational

Which type of organization attempts to balance and harness different activities in trade-off situations? - double-faced organization - ambidextrous organization - functional structure organization - juggler organization - mechanistic organization

Ambidextrous organization

Which type of organization has a flat organizational structure and employs decentralized decision making? - a correlated organization - a mechanistic organization - an organic organization - a formalized organization

An organic organization

The organizational structure at Gore, in which everyone is encouraged to speak to anyone they wish to within the organization, is called a(n) ______ organizational form. - formal - boundaryless - unlimited - centralized

Boundaryless

How do founders leave their imprint on their organizations? - by formulating growth strategies - by taking their vision and making it into reality - by manipulating existing culture - by entering physical elements into the design

By taking their vision and making it into reality

The extent to which the ability to make decisions rests with the people at the top of a firm is referred to as ______. - formalization - control - centralization - specialization

Centralization

Which of the following tends to result in delayed response time and lower customer satisfaction? - decentralized decision making - emergent decision making - centralized decision making - local responsiveness

Centralized decision making

Which of the following is a benefit of a high degree of formalization in an organization? - increased creativity - excellent customer service - consistent results - fast decision making

Consistent results

Inkwell is a pen manufacturing company based in Massachusetts. Inkwell's main area of operation is Massachusetts, and it has a stronghold over the market. It employs a robust production system, which helps it sell pens at exceptionally low prices. In this scenario, which of the following strategies is Inkwell most likely using? - ambidextrous strategy - differentiation strategy - integration strategy - cost-leadership strategy

Cost-leadership strategy

A firm would use input controls if it wanted to ______. - understand and explain the role of functional units in the organizational structure - formalize different pay policies between levels of employees in the national and international markets - guide employee behavior by defining expected results, but leave the means to those results open to individual employees, groups, or SBUs - define and direct employee behavior through a set of explicit, codified rules and standard operating procedures

Define and direct employee behavior through a set of explicit, codified rules and standard operating procedures

The three key components of organizational ________ are structure, culture, and control. - design - control - culture - inertia

Design

The inability to effectively deal with higher levels of ______, a common result of growth, is a weakness of the functional structure. - diversification - hierarchy - division - communication within departments

Diversification

Strategic business units (SBUs) in a company that uses an unrelated-diversification strategy are in direct competition with each other because - each SBU is evaluated as a standalone, profit-and-loss center - decision making is concentrated at the top of the organization - each SBU shares its core competencies with the other SBUs - the firm follows a single business or dominant business strategy at the corporate level

Each SBU is evaluated as a standalone, profit-and-loss center

Which of the following is true of an M-form? - Each division operates independently - There is fluid movement between divisions - All levels of the firm are highly integrated - There is a flat organizational hierarchy

Each division operates independently

How does an organization's culture influence employee behavior? - Weak culture affects the organic component of the organization - Employees are motivated by positive culture because it appeals to their higher ideals - Negative culture determines the acceptable level of performance - Employee behavior is only influenced by negative culture

Employees are motivated by positive culture because it appeals to their higher ideals

Which of the following is typical of an organic organization? - centralized decision making - flexible division of labor - formalized job specification - clear command and control

Flexible division of labor

The Foamy Mug, a chain of coffee shops, ensures consistent quality and service in each of its cafés by using policy and procedure manuals that explicitly describe employee tasks. The Foamy Mug is characterized by a high degree of ______. - centralization - formalization - hierarchy - organic structure

Formalization

The organizational structure element that deals with the degree to which employees are guided by specific, codified rules and processes is known as ______. - specialization - formalization - globalization - hierarchy

Formalization

Sam Walton was responsible for Walmart's cost-leadership strategy that continues to guide the company to this day. His influence on the organization's culture is best described as - founder imprinting - differentiation - groupthink - co-opetition

Founder imprinting

Steve Jobs defined and shaped Apple's culture, and his influence continued even after he left the company. This is known as ______. - formalization - groupthink - matrix structure - founder imprinting

Founder imprinting

One disadvantage of a functional structure is that it - cannot be converted into an ambidextrous structure - frequently lacks effective communication channels across departments - does not facilitate rich and extensive communication between members of the same department - does not allow the setting up of cross-functional teams

Frequently lacks effective communication channels across departments

Firms that follow a single-business or dominant-business strategy at the corporate level generally employ a ______ structure. - functional - simple - matrix - multidivisional

Functional

Thanh works in the engineering and manufacturing division of his company. Other departments include marketing, accounting, human resources, and research and development. Each department reports to the CEO. Thanh's company is organized according to a(n) ______ structure. - matrix - simple - decentralized - functional

Functional

When a firm covers a limited geographic area and is narrowly focused in terms of product/service offerings, a ______ structure is recommended. - matrix - functional - simple - multidivisional

Functional

In order to implement a cost-leadership strategy effectively, a _________ structure is preferred in a firm. - functional and mechanistic - simple and organic - functional and organic - simple and M-form

Functional and mechanistic

Which type of structure is most commonly used by firms that pursue a transnational strategy? - funcitonal structure - multidivisional structure - simple structure - global matrix structure

Global matrix structure

Groups that are highly cohesive and lack diversity are at risk of falling victim to ______. - groupthink - matrix effects - imprinting - culture imitation

Groupthink

Why was Yahoo's CEO, Jerry Yang, forced out in 2008? - He focused on improving the user experience to drive online advertising revenues - He failed to implement necessary strategic changes after Yahoo lost its competitive advantage - He refused to accept the practice of obtaining consensus from his managers before making strategic changes - He made too many changes to the organizational structure of Yahoo

He failed to implement necessary strategic changes after Yahoo lost its competitive advantage

Which of the following is typical of mechanistic organizations? - low degree of specialization - high division of labor - flat organizational structure - distributed decision making

High division of labor

In terms of the key features of organic organizations, which of the following firms is most likely to have an organic structure? - Merton Inc., a retail chain, which implements a rigid division of labor - Meridian Inc., a clothing company, which aims to produce clothes at lower prices - Icebox, a software development firm, which focuses on building innovative products - Underscore, a publishing company, where decision power is concentrated at the top

Icebox, a software development firm, which focuses on building innovative products

Which of the following is a top-down approach to managing innovation that involves implementing structures and systems that foster creativity? - organizational inertia - induced innovation - the carrot-and-stick approach - autonomous action

Induced innovation

The organizational structure at Gore may be described as ______. - informal and decentralized - formal and decentralized - formal and centralized - informal and centralized

Informal and decentralized

The reliance of McDonald's on detailed instructions to ensure consistent quality and service worldwide is an example of standard operating procedures as ______. - liabilities - input controls - output controls - hierarchy

Input controls

_________ seek to define and direct employee behavior through a set of codified rules and standard procedures. - output controls - input controls - decentralization - co-opetition

Input controls

When corporate headquarters efficiently allocates capital to individual strategic business units, it acts as a(n) _____. - control-and-reward system - internal capital market - research and development unit - output control

Internal capital market

What is needed to motivate innovations through autonomous actions and increase the possibility of their success? - internal champions who are willing to support promising projects - strong punishments for employees who fail to innovate - systems and structures that foster and force innovation - a flat organizational structure

Internal champions who are willing to support promising projects

A characteristic of a matrix organizational structure is that it ______. - is inexpensive - is difficult to implement - clarifies employee accountability - is simple

Is difficult to implement

Alfred Chandler, famed business historian, suggests that a firms organizational structure should follow its business and corporate level strategy because organizational structure - is just as dynamic as a firm's strategy - is not as important as strategy - is static and remains intact throughout time - has little or no effect on strategic implementation

Is just as dynamic as a firm's strategy

Which of the following exemplifies the organic nature of W. L. Gore's organizational structure? - Its employees exhibit lower levels of entrepreneurial behaviors and innovation - It avoids the use of virtual teams - It has no formal chain of command or standard operating procedures - Its employees are not allowed to review each other during performance appraisals

It has no formal chain of command or standard operating procedures

Which of the following best indicates that W. L. Gore & Associates has an informal and decentralized organizational structure? - It prevents its associates from becoming shareholders in the company - It determines its employees' levels of compensation on the basis of their boss's evaluations - It is consistently ranked among the top 100 of the best companies to work for - It prefers face-to-face communication over email and does not have an organizational chart

It prefers face-to-face communication over email and does not have an organizational chart

Which of the following statements about blue ocean strategy is true? - Its success requires that the firm that implements the strategy be highly centralized - It requires reconciling the trade-offs between differentiation and low cost - Its goal is to reduce costs by offering a standardized product to the mainstream customer - It is the easiest type of strategy to implement

It requires reconciling the trade-offs between differentiation and low cost

Which of the following is a shortcoming of the matrix structure? - It cannot effectively address a higher level of diversification, which often stems from further growth - Its implementation is difficult due to significant organizational complexity and increased administrative costs - It frequently lacks effective communication channels across departments - It often leads to an overload for the founder and/or CEO when the firms experience growth

Its implementation is difficult due to significant organizational complexity and increased administrative costs

Why does management frequently fail at strategy implementation? - Managers cannot make needed adjustments because of their effect on the firm's resource allocation and power distribution - Managers are reluctant to implement strategies that will have effects on the diversification capability of the organization - Managers are unable to take into account implementation's effects on the external environment of the organization - Managers cannot effectively implement strategies because the organization is too flexible to accommodate the formulated strategy

Managers cannot make needed adjustments because of their effect on the firm's resource allocation and power distribution

Why is strategy implementation referred to as the "graveyard of strategy"? - The levers that managers have at their disposal during the implementation stage of a strategy are insufficient - The successful implementation of a strategy requires key functions in the organization to compete with each other - It is a process that is independent of strategy formulation and is not necessary to ensure continued success - Managers often fail to implement a chosen strategy successfully despite extensive analysis of business environments

Managers often fail to implement a chosen strategy successfully despite extensive analysis of business environments

Why do firms' strategies often follow their structures instead of the other way around? - Managers are eager to confront the inertia that often exists in established organizations - Strategy and structure are usually loosely coupled, providing them independent movement - External and internal pressures increase organizational inertia in an organization - Managers tend to consider strategies that do not change existing organizational structures

Managers tend to consider strategies that do not change existing organizational structures

When the span of control within an organization is wide, one manager supervises ______. - many employees - a few employees - one employee - a tall organizational structure

Many employees

Disadvantages of the ______ structure include organizational complexity, increased administrative costs, slow decision making, and difficulty in implementation. - simple - multidivisional - matrix - functional

Matrix

Samira works for a company with a strict top-down structure. Her daily tasks must conform carefully to written guidelines and rules, and she has very specific job responsibilities. Samira works for a(n) ______. - flat structure - holacracy - mechanistic organization - organic organization

Mechanistic organization

Since W. L. Gore's core competency is innovation, a(n) ________ would most likely be detrimental to its efforts. - mechanistic structure - organic structure - differentiation strategy - integration strategy

Mechanistic structure

The type of structure that is used by experienced firms and consists of distinct, essentially independent strategic business units is the ______ structure. - cross-functional - multidivisional - blue ocean - ambidextrous

Multidivisional

When a firm's organizational structure is tall, the span of control is ______. - wide - narrow - fluctuating - differentiated

Narrow

The primary way cultural change is enacted in a company is through ______. - technological advances - pricing policies - new leadership - new products

New leadership

Taki works for a start-up company that is highly centralized and its employees are not allowed to wear headphones while working. However, the company offers a flexible work schedule, free childcare, and free yoga classes. These rules and perks describe the company's ______. - corporate strategy - founder imprinting - organizational culture - internal capital market

Organizational culture

Which of the following terms encompasses a firm's member's shared values and norms? - organizational culture - organizational opportunity - organizational structure - organizational appropriateness

Organizational culture

The structure, processes, and procedures of an organization are designed, put into place, reviewed, and reworked through a process known as ______. - holacracy - strategy formulation - organizational design - diversification

Organizational design

Hiroshi is considering a job offer from a large pharmaceutical company. At his interview he asks who his boss would be and how jobs and teams are assigned. Hiroshi is asking about the company's ______. - strategic inertia - organizational structure - strategy implementation - competitive advantage

Organizational structure

When firms tie employee compensation and rewards to predetermined goals, such as a specific sales target, but do not specify the means to those results, they are using ______ controls. - output - sales - price - input

Output

Over time, 3M has relied on the results-only-work-environment (ROWE) framework and has morphed into a highly science-driven innovation company. At 3M, employees are encouraged to spend 15 percent of their time on projects of their own choosing. If any of these projects look promising, 3M provides financing through an internal venture-capital fund and other resources to further develop their commercial potential. This real-world scenario best illustrates - organizational culture - input controls - output controls - organizational strategy

Output controls

If a company fails to change its culture as the firm and environment change, the company's culture can turn into a core ______. - competency - imprint - rigidity - asset

Rigidity

What is the best way for organizations to overcome the lack of collaboration across departments in a functional structure? - encourage more specialization and narrower roles - reduce staffing and increase individual workloads - implement performance-based compensation - set up cross-functional teams

Set up cross-functional teams

Ravi works for a small company. The company owner makes all strategic decisions and manages the day-to-day operations. Ravi's company has a _____ structure. - multidivisional - matrix - functional - simple

Simple

Simple structures tend to be used by which group? - large companies with low organizational complexity - small companies with low organizational complexity - large companies with high organizational complexity - small companies with high organizational complexity

Small companies with low organizational complexity

Because organizational culture encompasses interactions among employees in all levels of the firm as well as the firm's relationships with its customers and suppliers, it is said to be ______. - causally ambiguous - structurally flat - socially complex - asocial

Socially complex

Leslie, Juan, and Felicia all work for the same company. Leslie pays the bills and invoices customers, Juan makes sure the company's computers and phones work, and Felicia interacts with customers and sellers of the firm's products. This is an example of ______. - inertia - specialization - centralization - formalization

Specialization

The element of organizational structure that separates the tasks of one job from the tasks of another is known as ______. - specialization - formulization - centralization - control

Specialization

A system that allows managers to specify goals, measure progress, and provide performance feedback by ensuring that the incentives of shareholders and employees are aligned is called a ______ system. - diversified - strategic control-and-reward - founder-imprinting - strategy-implementation

Strategic control-and-reward

Which of the following statements are true as it relates to the topic of organizational design? - Firms have a tendency to modify their organizational structures too often, which inhibits their ability to create a sustainable competitive advantage - Firms that are more flexible with their organizational structure are guaranteed to generate above average returns, relative to their competitors - Strategy should be more influential on designing an organizational structure versus how structure should influence strategy - Large firms can maintain a simple organizational structure so long as they are pursuing a cost-leadership strategy

Strategy should be more influential on designing an organizational structure versus how structure should influence strategy

When a firm's employees have internalized norms and share the firm's core values, the firm is said to have a(n) ______ culture. - unethical - weak - strong - elemental

Strong

In order for firms to achieve superior performance, ______. - structure must follow strategy - strategy must follow structure - structure must be independent of strategy - structure must be rendered obsolete by strategy

Structure must follow strategy

Which three key levers below are needed for an organization to effectively design its reporting relationships and broader organizational structure? - structure, culture, and control - structure, strategy, and strategic alliances - cost-leadership, differentiation, and blue ocean - mechanistic, organic, and ambidextrous organizations

Structure, culture, and control

If there are several levels of management between the lowest employee and the CEO, the firm has a ______ structure. - wide - flat - round - tall

Tall

Which of the following factors has led to a shift toward open innovation? - the decreasing supply and mobility of skilled workers - the decreasing availability of external options to commercialize ideas - the exponential growth of venture capital - the increasing capability of internal suppliers

The exponential growth of venture capital

Which of the following statements regarding input controls is true? - They are designed to be considered before employees make any business decisions - They are created by employees and then go up the chain of command - They are designed to be considered after value-creating activities have been implemented and results evaluated - They offer flexibility so that employees can make immediate changes if the situation calls for them

They are designed to be considered before employees make any business decisions

What is the goal of an internal capital market? - to facilitate communication between the internal divisions of a firm - to market the firm's product or services to other businesses rather than end consumers - to eliminate a firm's need for external sources of funding - to allocate capital more efficiently than would happen in an external capital market

To allocate capital more efficiently than would happen in an external capital market

What is the goal of a differentiation strategy? - to develop totally unique and innovative products, regardless of cost, that create demand where none previously existed - to create a competitive advantage by offering products or services at a higher perceived value, while keeping costs under control - to create a competitive advantage by reducing cost below that of competitors while still offering an acceptable value - to be both efficient and flexible, using centralization to control costs and decentralization to promote creativity

To create a competitive advantage by offering products or services at a higher perceived value, while keeping costs under control

What is the goal of organizational design? - to eliminate confusion about which job covers particular tasks - to enable managers to translate their chosen strategy into a realized one - to ensure that each employee is placed on a specific level within the firm's hierarchy - to reduce competitive advantage with other firms

To enable managers to translate their chosen strategy into a realized one