MGMT 310 Mindtap Quizes

Which of the following is a disadvantage of vertical integration? a) Lack of strategic flexibility b) Lack of access to technology c) Lack of quality control d) Lack of coordination

a) Lack of strategic flexibility A disadvantage to vertical integration is lack of strategic flexibility.

Which of the following approaches to management compared an organization to a well-oiled machine and the manager to a machine operator? a) The contingent view of management b) Taylor's scientific management approach c) The human relations movement d) Weber's bureaucratic organization structure

b) Taylor's scientific management approach

Which of the following is most likely to happen when a firm reaches maturity? a. The emphasis on coordination sometimes lessens. b. The binding rules of the employees become stricter. c. The division of labor and job specialization increases. d. The decision rights are delegated to all employees irrespective of their performance.

a. The emphasis on coordination sometimes lessens.

SWOT analysis is a tool that allows the managers of a firm to: a) check the progress of projects that are yet to be completed and set more realistic deadlines for them. b) analyze and evaluate the strengths, weaknesses, opportunities, and threats faced by their competitors in the market. c) get an overview of the firm's internal strengths and weaknesses and predict external threats and opportunities. d) compare the firm's processes and performance metrics with those of its competitors and other leading players in the industry.

c) get an overview of the firm's internal strengths and weaknesses and predict external threats and opportunities. SWOT analysis is a tool that allows managers to take a snapshot of their firm's internal strengths and weaknesses as well as the opportunities and threats that are evident in the external environment.

If a television channel such as CNN purchased a company that manufactured television sets, it would be engaged in _________.

Forward integration

As a firm matures and grows in size, it tends to emphasize division of labor and specify distinct coordinating mechanisms to: a. make broader decision rights. b. remove all boundaries and binding rules for the employees of the firm. c. reduce job specialization. d. ensure greater efficiency and control.

d. ensure greater efficiency and control.

The process by which firms impact the nature of their overarching industrial environment and adapt their organization in response to evolving contextual factors is called _____. a. mutual adaptation b. acquisition c. diversification d. vertical integration

a. mutual adaptation

Which of the following factors discourages the entry of new players into a market by reducing consumers' preference to purchase from them? a) Unequal access to distribution channels b) Demand-side benefits of scale c) Supply-side economies of scale d) Incumbency advantages

b) Demand-side benefits of scale Demand-side benefits of scale arise when any buyers' willingness to pay for that product increases as the number of other buyers for that product increases.

The _______ test asks the question: Is the industry profitable or capable of being profitable? a) better-off b) cost of entry c) ownership d) attractiveness

d) attractiveness This is the question answered through the attractiveness test.

The main weakness of the matrix structure is that it: a. combines the negative elements of both functional and divisional structures. b. does not preserve the balance of power of functional and product sources. c. does not allow flexibility in allocation of resources among functions and divisions. d. creates confusing and inefficient scenarios for managers working in a functional group as well as across divisions

d. creates confusing and inefficient scenarios for managers working in a functional group as well as across divisions

The Bechtel Corporation has a __________ Incorrect structure, with employees reporting to both project managers and functional managers

network

_____ involve(s) the cost savings that a firm achieves through the distribution of capital among different business units. a) Economies of scale b) Financial economies c) Externality d) Market power

b) Financial economies Financial economies can be achieved by efficiently allocating capital among units and by purchasing a new business and restructuring its assets with the goal of selling it back into the marketplace at a higher price.

In a __________ Correct organization, managers make most of the decisions, define their employees' jobs, and establish policies and procedures for their employees.

centralized

Which of the following is an example of an intangible resource of a firm? a) Brand name b) Raw materials c) Machinery d) Computing systems

a) Brand name Intangible resources include a firm's internal processes, brand names, technology, culture, and intellectual property.

_____ is defined as a strategy in which a firm engages in several different businesses that may or may not be related in order to create more value than if the businesses existed as stand-alone entities. a) Diversification b) Cost leadership c) Focus d) Outsourcing

a) Diversification Diversification is a strategy in which a firm engages in several different businesses that may or may not be related in an attempt to create more value than if the businesses existed as stand-alone entities.

Which of the following organizational structures is most likely to have the highest levels of accountability? a) Divisional b) Network c) Matrix d) Functional

a) Divisional Organizations that emphasize managerial accountability are best served by the divisional structure.

Which of the following statements is true of a clan approach to control? a) It is ideal for organizations that have constantly changing environments. b) It is ideal for large organizations operating in steady environments. c) It is appropriate for price-competitive and cost-sensitive industries. d) It involves high levels of supervision and extensive rules.

a) It is ideal for organizations that have constantly changing environments. Clans are preferred when conditions are uncertain and work activities are difficult to measure.

Which of the following is a disadvantage of a functional organizational structure? a) It is not suited to deal with the environmental changes in an organization. b) It is unsuitable for small businesses or businesses with a limited number of products or services. c) It fails to support an easy flow of communication in a firm. d) It does not facilitate a straightforward approach to supervision and management.

a) It is not suited to deal with the environmental changes in an organization. Organizations with a functional form are often unable to deal with changes in the business environment.

CEO Al makes most of the key decisions at Al's Autos. Which of the following statements is most likely to be true? a) The activity of the different organizational units is highly coordinated. b) Al's Autos is well positioned to attract highly skilled, highly motivated employees. c) Decisions are always made by the person closest to the needed information.

a) The activity of the different organizational units is highly coordinated.

The CEO of Al's Autos is considering moving to a matrix structure. What would be the best reason to make such a move? a) To improve communication across functions b) To take advantage of economies of scale C) To increase the company's efficiency

a) To improve communication across functions

One advantage of related diversification is: a) it allows for the sharing of resources among business units. b) it can achieve financial economies through restructuring. c) it gives the firm improved coordination and quality control. d) it can allow a sick or dying company to use capital generated in a profitable division to prop it up for a short period of time.

a) it allows for the sharing of resources among business units. The sharing of resources among business units is an important driver of success in related diversification strategies.

The test that a manager can use to determine whether a firm should undertake an acquisition involves two components—a better-off test and a(n) a) ownership test. b) motivation test. c) strategy test. d) resource test.

a) ownership test. The ownership test asks the question: Does ownership of the business unit produce a greater competitive advantage than an alternative arrangement would produce?

If the costs of vertical integration outweigh the benefits, what are our alternatives to achieve corporate advantage? Check all that apply. a) Outsourcing order fulfillment to a warehouse company b) Entering into a long-term contract with the restaurant chain to buy dinnerware c) Purchasing a candy manufacturer d) Using spot contracts to purchase clay as it is needed

a, b

Which of the following characteristics would you expect Al's Autos to have? Check all that apply. a) Lines of control are very clear, with little ambiguity about priorities or accountability. b) Employee specialization leads to increased efficiency and development of competencies. c) The firm will be highly adaptable in the face of environmental changes. d) A key task of senior management is to coordinate activities of different departments.

a, b

Which of the following measures can a firm use to fight the commoditization of its products? a. Aligning with another firm to offer a product or service that delivers greater value for the customer b. Creating a separate organization or team to work on future opportunities while the rest of the firm focuses on the primary business c. Centralizing a core function such as manufacturing or sales so that economies of scale can be developed in the middle of an otherwise divisional structure d. Specifying distinct coordinating mechanisms to ensure greater efficiency and control in the company

a. Aligning with another firm to offer a product or service that delivers greater value for the customer ****OR*** outsourcing noncore functions

As CEO of Berkshire Hathaway, an American multinational conglomerate, Warren Buffett manages the challenges associated with _________ Correct related to synchronizing the operations of multiple different business units.

administrative costs

Which of the following is a valid difference between a divisional and a functional organizational structure? a) Employees in a divisional structure often develop more expertise than those in a purely functional structure. b) In divisional structures, core functions are often duplicated in each division. c) There is greater potential for competitive behavior between divisions in a functional structure. d) Compared with a functional structure, a divisional structure allows for lesser accountability.

b) In divisional structures, core functions are often duplicated in each division. This is a weakness of divisional structures relative to the functional form.

Which of the following refers to activities involved with collecting, storing, and physically distributing a final product to customers? a) Operations b) Outbound logistics c) Inbound logistics d) Marketing

b) Outbound logistics Examples of outbound logistics are warehousing, material handling, and order processing.

What problem might the CEO expect if the company switches to a matrix structure? a) The company will emphasize making product lines or serving geographic areas at the expense of developing functional expertise. b) Some managers will be unable to reconcile competing priorities. c) Communication will decrease across organizational units.

b) Some managers will be unable to reconcile competing priorities.

Which of the following functions is a support activity of a firm? a) Operations b) Technological development c) Marketing and sales d) Outbound and inbound logistics

b) Technological development Support activities of a firm include firm infrastructure, human resource management, technology development, and procurement.

An advantage of the bureaucratic approach to organizational control is that it: a) encourages employees to be self-regulating. b) can withstand high turnover. c) can easily adapt to the environment. d) elicits commitment.

b) can withstand high turnover. Bureaucracies are able to withstand high turnover.

Forward integration occurs when a firm: a) manufactures its own raw materials for making its finished products. b) owns or controls the distribution channels for its main products. c) conducts market research internally. d) acquires businesses that are unrelated to its core product.

b) owns or controls the distribution channels for its main products. Forward integration occurs when a firm owns or controls the customers or distribution channels for its main products.

Deelited Inc. is a company that manufactures soft toys for children. The company operates on a very large scale, and this has enabled it to price its toys at competitive rates while still retaining good product quality. Since it is extremely difficult for a new entrant to sell toys at such low prices, few competitors have emerged for Deelited in the past five years. In this case, the low threat that Deelited Inc. faces from new entrants can be attributed to: a) high capital requirements of the industry. b) supply-side economies of scale. c) incumbency advantages. d) demand-side benefits of scale.

b) supply-side economies of scale. Supply-side economies of scale arise when a firm manufactures products in high volumes, resulting in lower production costs.

A buyer will have high bargaining power relative to a supplier when: a) the demand for the supplier's product is high. b) the supplier's products are largely undifferentiated. c) the supplier's products are highly specialized. d) there are few suppliers who provide the required product.

b) the supplier's products are largely undifferentiated. In this case, the buyer has the power to force down prices in the industry.

_____ involves developing relationships with parties outside a firm to increase the value of the firm's offerings. a) Capability development b) Coordination c) Connection d) Cooperation

c) Connection Connection can occur, for example, through outsourcing noncore functions or aligning with another firm to offer a product or service that delivers greater value for the customer.

Which of the following is a component of Porter's 5-Forces Model? a) Bargaining power of competitors b) Barriers to existence c) Threat of substitutes d) Rivalry among suppliers

c) Threat of substitutes The 5-Forces Model includes the threat of new entrants, bargaining power of customers, threat of substitutes, bargaining power of suppliers, and rivalry among existing competitors.

The process by which managers transfer decision rights to individual employees is known as: a) disposition. b) simulation. c) delegation. d) initiation.

c) delegation. Delegation is the process by which managers transfer decision rights to individual employees.

As a firm matures and grows in size, it tends to emphasize: a) broad decision rights. b) less job specialization. c) division of labor. d) open boundaries.

c) division of labor. Mature firms tend to emphasize division of labor.

Companies that seek to pursue a cost leadership strategy will most likely make organizational design decisions that emphasize: a) speed. b) creativity. c) operational efficiency. d) flexibility.

c) operational efficiency. Companies that pursue a cost leadership strategy most often make organizational design decisions that stress operational efficiency, cost reduction, and internal integration or alignment.

The choice between related or unrelated diversification often results from an assessment of: a) the supply-chain efficiency of a firm. b) a demand-supply graph. c) the resources of a firm. d) the stability of the market.

c) the resources of a firm. The choice between related and unrelated diversification often results from an assessment of the firm's resources.

According to the _____, the organization's structure should fit the firm's environment. a. organizational view b. shareholder view c. contingent view d. managerial view

c. contingent view

To sustain long-term competitiveness, firms need to implement organizational design decisions that: a. don't bind employees into rules and regulations. b. delegate decision rights to people other than top-level managers. c. support current strategic imperatives yet are flexible enough to adapt to changing market conditions. d. are similar to divisional structures in that they should be less fluid and more tedious on the employees.

c. support current strategic imperatives yet are flexible enough to adapt to changing market conditions.

_____ exist when the costs of operating two or more businesses are less than the costs of operating the businesses independently. a) Economies of agglomeration b) Economies of scale c) Economies of disagglomeration d) Economies of scope

d) Economies of scope Economies of scope exist when the costs of operating two or more businesses or producing two or more products with the same corporate structure is less than the costs of operating the businesses independently or producing each product separately.

Which of the following is true of a differentiation strategy? a) An advantage of differentiation is that customers do not have to pay a premium price for a firm's product, even if that product is truly differentiated in terms of value. b) A firm can achieve and sustain differentiation as long as its price premium is less than the extra costs incurred in being unique. c) Differentiation strategies based on distribution systems are generally unsuccessful. d) More than one firm can compete successfully based on differentiation in an industry.

d) More than one firm can compete successfully based on differentiation in an industry. In this strategy, a firm focuses on the facets of its value proposition that are most valued by its target customers, increasing differentiation and garnering a premium price from customers.

An organizational structure characterized by formal structures that control employee behavior in a top-down, hierarchical fashion is known as a: a) decentralized organizational structure. b) network organizational structure. c) behaviorist organizational structure. d) centralized organizational structure.

d) centralized organizational structure. A centralized organization is characterized by formal structures that control employee behavior by concentrating decisions in a top-down, hierarchical fashion.

A _____ strategy aims to provide a product or service at as low a price as possible to a broad audience. a) mass distribution b) focus c) value-added d) cost leadership

d) cost leadership Cost leadership is a strategy that aims to provide a product or service at the lowest price to a broad audience.

A firm can become more customer-centric by: a) adopting new functional or divisional units to concentrate exclusively on the sales and promotion departments respectively. b) increasing the amount of informal structures within the organization. c) ensuring that employees do not work across multiple products and services while creating connections across the boundaries of the firm. d) developing a cooperative environment in which workers are given incentives for working across silos to deliver customer solutions.

d) developing a cooperative environment in which workers are given incentives for working across silos to deliver customer solutions. The focus should be on developing a more collaborative mindset across silos with a common goal of serving customers more effectively.

A corporate advantage occurs when a firm: a) introduces new products in a product category in order to provide more choice for its customers. b) builds its core competencies in a particular business in order to increase its profits. c) introduces a new brand logo and package design for its most successful product in a division. d) maximizes its resources to build a competitive advantage across its various business lines.

d) maximizes its resources to build a competitive advantage across its various business lines. To gain a corporate advantage, a firm must maximize its resources to build a competitive advantage across its various business units.

Which of the following is true of divisional forms? a. Divisional forms develop the same level of functional expertise as that of a pure functional form. b. Divisional forms have poor accountability than other forms. c. In divisional forms, coordination among functions is less fluid and more tedious than other forms. d. In divisional forms, firms can be organized around products, geographies, or even clients.

d. In divisional forms, firms can be organized around products, geographies, or even clients.

Al's Autos has a _________ structure.

functional