MGT 301 CH. 11

Which of the following is a disadvantage of a functional strategy? A) It frequently lacks the tools required to pursue a cost-leadership strategy. B) It does not facilitate rich communication between members of the same department. C) It cannot effectively address a higher level of diversification.D) It does not allow organizations to be flexible or innovative.

C

Which of the following is an advantage offered by a functional structure? A) It allows for an efficient top-down communication chain and thus relies on a relatively tall structure. B) It facilitates a lower division of labor, which is linked to higher productivity. C) It allows for a higher degree of specialization and deeper domain expertise. D) It facilitates a lower level of specialization.

C

A planned emergence approach to strategic planning is most likely to be found in a highly centralized firm.

false

An open innovation model reduces a firm's absorptive capacity.

false

The University of Central Florida has a typical College of Business which houses several specific mini-departments such as management, marketing, finance, accounting, economics, and real estate. This College of Business best resembles a(n) ________ structure. A) simple B) functional C) multidivisional D) holarchy

B

________ describes the collectively shared values and norms of an organization's members. A) Competitive advantage B) Organizational structure C) Organizational culture D) Core competency

C

Susan works for a firm that has high degrees of formalization in their organizational structure. She understands that one of the main drawbacks of working in a firm with such high levels of formalization can often result in which of the following? A) a slower decision-making process B) increased organizational inertia C) less co-opetition D) increased vertical integration

A

Which of the following best exemplifies the use of input controls? A) McDonald's use of standard operating procedures B) GM's use of the multidivisional strategy C) Zappos' use of monitoring-free customer service calls D) Southwest Airlines' use of employee friendliness

A

________ refers to a firm's resistance to change the status quo that can set the stage for the firm's subsequent failure. A) PESTEL factors B) Formalization C) Organizational inertia D) Centralization

C

A firm that uses a structure that is organized along different business functions such as HR, R&D, Sales, and Marketing and also along different geographical areas such as different countries of the world is most likely using a ________ structure. A) global matrix B) multidivisional C) functional D) simple

A

Organizational design is A) the process of creating, implementing, and modifying the structure of an organization. B) primarily focused on replacing a firm's competitive advantage with competitive parity. C) a process that always functions independently of strategy formulation. D) primarily focused on formulating effective strategies, not implementing them.

A

Paper Street Soap Company, a cosmetics firm, has offices in New York, Texas, California, New Mexico, and New Jersey. Each of these offices is headed by a president who reports directly to Jennifer Watson, the CEO. The heads of the centralized HR, Finance, and Marketing teams report to Jennifer Watson as well. Managers in the various offices also report to the CEO directly. Based on this information, which of the following statements is most likely to be true? A) Jennifer Watson has a wide span of control. B) Paper Street Soap Company has a tall hierarchical structure. C) Jennifer Watson is underworked. D) Paper Street Soap Company is a mechanistic organization.

A

Which of the following is true of the process of organizing for competitive advantage? A) To maintain competitive advantage, companies need to restructure as they grow and the competitive environment changes. B) Strategy formulation and strategy implementation are independent activities. C) Organizing for competitive advantage is a static and not a dynamic process. D) Formulating an effective strategy is a necessary and sufficient condition for gaining and sustaining competitive advantage.

A

While working a night job at a call center, John creates an app called iFood, which can be used to place orders at restaurants, rate the restaurants, and make reservations. Because he receives good responses for his app, he quits his current job to focus his efforts on iFood. He creates a start-up called JohnBuilt1 and hires three people to help him improve iFood and maintain the servers that run it. In this scenario, JohnBuilt1 most likely has a ________ structure. A) simple B) matrix C) mechanistic D) functional

A

Why is the optimal organizational structure a multidivisional structure? A) Its focus is on driving down costs. B) Its focus is on producing differentiated products. C) Its focus is on retaining activities within a single geographic area. D) Its focus is on establishing a flat hierarchy operated in a decentralized fashion.

A

Which of the following statements is true of organizational culture? A) Changes in culture are too frequent to have any impact on strategic implementation. B) It is better for founder CEOs to create a relevant culture, structure, and strategy in the early stages. C) It is always better to focus on output control and performance than on organizational culture. D) According to research, more than 50 percent of firms change culture successfully.

B

Yubaba Inc., a fidget spinner manufacturing company, encourages its employees to enjoy their work by taking on additional responsibilities or switching jobs with each other. It allows its employees immense flexibility in charting their own career path within the organization. Bill has worked at Yubaba for eight years, but has never had a boss or supervised an employee. Which of the following is most likely true in this scenario? A) Yubaba Inc. is a mechanistic organization. B) Yubaba Inc. has a flat organizational structure. C) Yubaba Inc. has a high degree of centralization. D) Yubaba's organizational culture is governed by codified rules.

B

Oceanic Airlines Inc., a transportation firm, is headed by Denise Cordova, the CEO. Each functional department of the company—marketing, finance, and HR—has a president who reports to the CEO directly. Each department has various managers who manage teams. The managers report to the presidents, and the team leads report to the managers. Finally, the employees at the lowest level report to their team leads. It is rare for a lower-level employee to interact with the CEO of the company. In this scenario, Oceanic Airlines Inc. can be said to have a(n) A) organic organizational structure. B) decentralized organizational structure. C) tall hierarchical structure. D) flat hierarchical structure.

C

Which of the following types of organizations best helps match a differentiation strategy to a functional structure? A) ambidextrous organization B) mechanistic organization C) organic organization D) rigid organization

C

E Corp is a pharmaceutical company that has many breakthroughs in medicine to its credit. Unlike many other pharmaceutical companies, E Corp has a relaxed work environment where employees are free to discuss projects with each other. Employees are encouraged to choose the projects that interest them; communication between team members and their supervisors is open and easy. Because of the company's work culture, its employees feel motivated to work harder and display more entrepreneurial behaviors. In this scenario, E Corp Inc. is most likely an organization that is A) formalized. B) mechanistic. C) centralized. D) organic.

D

A primary advantage of the matrix organizational structure is that it simplifies decision making and communication in geographically diverse organizations.

false

Once a firm finds success in a given organizational structure, it should seek to reinforce and maintain that structure for the life of the firm.

false

The four key elements of a firm's organizational structure are specialization, centralization, formalization, and generalization.

false

Sirius Cybernetics Corp. produces touch-enabled wearable devices. Its research and development team recently became aware of a new, open-source technology produced by a firm overseas that would improve the processing speed and battery life of all Sirius Cybernetics devices. In this scenario, Sirius Cybernetics would be best served to embrace A) open innovation. B) closed innovation. C) disruptive innovation. D) radical innovation.

A

Delos Inc. is an apparel manufacturer. The management at Delos Inc. prefers moderate control over the operations of the different departments such as R&D, design, marketing, and sales. It allocates a budget to each function at the beginning of each quarter. This is an example of implementing control through A) output controls. B) input controls. C) multidivisional strategy. D) centralization.

B

Los Pollos Hermanos is a nationwide fast-food chain. Decision power resides at the top of the organization. Each job is documented in minute detail. The firm has many levels of supervision, including vice presidents and regional managers. The firm's headquarters provides detailed instructions to each of its franchisees so that they provide comparable quality and service across the board. Based on this scenario, which of the following is an accurate statement about Tony's? A) Los Pollos Hermanos has a low degree of specialization and formalization, a high degree of centralization, and relies on a flat hierarchy. B) Los Pollos Hermanos has a high degree of specialization and formalization, a low degree of centralization, and relies on a tall hierarchy .C) Los Pollos Hermanos has a high degree of specialization, formalization, and centralization and relies on a tall hierarchy. D) Los Pollos Hermanos has a low degree of specialization, formalization, and centralization and relies on a flat hierarchy.

C

Simple organizational structures often exhibit low levels of formalization and specialization. Which of the following is not a benefit of employing a simple organizational structure? A) being able to easily and quickly coordinate and communicate within the firm B) not having the need for sophisticated information technology/management systems C) employing specialists that can develop deep knowledge/expertise in their field D) being able to converse with the CEO and other upper level executives

C

Organizational design involves establishing a firm's structure, culture, and control mechanisms.

true

Successful ________ requires managers to design and shape structure, culture, and control mechanisms. A) strategy innovation B) strategy formulation C) strategy implementation D) strategy diversification

C

A change in company culture is most commonly accompanied by a change in leadership.

true

Firms that pursue a closed approach to innovation typically enjoy first-mover advantages.

true

Firms with a flat structure and a low degree of specialization tend to foster innovation better than firms with a tall structure and high degree of specialization.

true

Managerial decisions about a firm's strategy and their organizational structure should always be interrelated.

true

A firm's ________ determines how the work efforts of individuals and teams are orchestrated and how resources are distributed. A) norms B) culture C) structure D) control

C

Elvira is the CEO of All Things Inc. which employs a matrix structure which is the combination of the ________ and ________ structure. A) functional; M-form B) simple; functional C) M-form; simple D) network; functional

A

Vanessa just graduated from law school and wants to open her own law firm. Vanessa should probably adopt a(n) ______ structure for the firm. A) simple B) functional C) M-form D) matrix

A

A functional structure is recommended when a firm A) has a broad focus in terms of its product/service offerings. B) has a low level of diversification. C) has a low degree of specialization. D) diversifies into different product lines and geographies.

B

A high degree of formalization in an organization is most likely to A) improve customer service. B) slow down decision making. C) produce inconsistent results. D) increase creativity and innovation.

B

Jared works as a front-line employee for a nationwide retail store. He reports to a floor manager, who reports to a departmental manager, who reports to a regional supervisor, who reports to a vice president, who reports to the CEO. Which of the following best describes this retail store? A) flat structure B) tall structure C) centralized structure D) decentralize structure

B

Which of the following global strategies best matches with a multidivisional structure? A) international B) multidomestic C) global-standardization D) transnational

B

Which of the following real-world scenarios best exemplifies formalization? A) Zappos' focus on allowing its customer service employees to use their own approach rather than depend on scripts B) McDonald's use of standard operating procedures across the world C) W. L. Gore's associates organizing themselves in project-based teams that are led by sponsors, not bosses D) Yahoo's decision to fire its CEO after incurring huge losses

B

Why does strategy implementation often require changes within an organization? A) Strategy implementation is less important than strategy formulation. B) Strategy implementation transforms strategy into actions and business models. C) Strategy always follows structure. D) Strategy implementation does not affect resource allocation and power distribution within an organization.

B

A firm that uses a functional structure will typically have efficient top-down and bottom-up communication, but A) dual reporting relationships typically blur lines of authority. B) the top management team may fail in their coordination and control efforts of functional-level employees. C) communication may be hampered among the horizontal, distinct organizational functions. D) career paths and professional development are limited.

C

An organization that is organized according to strategic business units (SBUs) and also along organizational structures is most likely using a ________ structure. A) functional B) multidivisional C) matrix D) simple

C

Hooli, a web development firm, wants to implement an organic structure to foster innovation and attract the most talented creative minds. Which of the following features will make it difficult to do so? A) decision-making power distributed throughout the organization B) a wide span of control for managers C) dedication to a cost-leadership business strategy D) flexible job descriptions for employees

C

To effectively implement a differentiation strategy, managers rely on a functional structure that resembles an organization that is highly A) formalized. B) specialized. C) organic. D) mechanistic.

C

When a firm diversifies into different product lines and geographies, a ________ structure is preferred. A) simple B) functional C) multidivisional D) network

C

Which of the following is an unintended side effect of a high degree of specialization in an organization? A) decreased trade-off between breadth and depth of knowledge B) decreased opportunities for the division of labor C) reduced employee satisfaction due to repetition of tasks D) reduced productivity

C

Why are controls like budgets and operating procedures that McDonald's implements known as input controls? A) They are independent of an organization's culture. B) They are implemented by corporate headquarters. C) They are considered before employees make any decisions. D) They are ad hoc and not codified.

C

AT&T, IBM, Siemens, and Pfizer, have been shifting their innovation strategy toward a model designed to blend internal knowledge with external knowledge by sourcing strategic alliances. This example best represents the A) absorptive capacity model. B) not-invented-here syndrome. C) closed innovation framework. D) open innovation framework.

D

Duke & Duke is the parent company of GetItDone.com and NownNever Inc. To cut costs, Duke & Duke integrated GetItDone.com's and NownNever Inc.'s management functions with Duke & Duke's management, while keeping other functions such as product development independent. Duke & Duke has encourage the senior teams at both GetItDone and NownNever to exploit the success of their existing products while exploring new products for the future. This scenario best exemplifies a(n) A) multidivisional structure. B) organic organization. C) simple structure. D) ambidextrous organization.

D

Li runs a firm that has diversified into different product lines and geographies. She should probably use a(n) _______ organizational structure. A) functional B) simple C) network D) M-form

D

Paul runs an organization that implements a cost-leadership strategy. This business-level strategy supports both a ________ and ________ structure. A) matrix; organic B) M-form; vertical C) simple; organic D) functional; mechanistic

D

Umbrella Corp is a notebook manufacturing company based in Ohio. Umbrella Corps' main market is Texas. It aims at providing its products at better prices than its competitors. Which of the following structures is Umbrella Corp likely to use if it has functional setup? A) organic B) simple C) matrix D) mechanistic

D

Which of the following accurately describes an organic organization? A) an inflexible organization that fosters slow decision making and high employee motivation B) an inflexible organization that fosters fast decision making and high employee motivation C) a flexible organization that fosters slow decision making and high employee motivation D) a flexible organization that fosters fast decision making and high employee motivation

D

Which of the following statements is true of strategy in an organization? A) Strategy implementation is considered unsuccessful if it requires changes within an organization. B) To implement a strategy successfully, an organization's structure must be rigid. C) Strategy implementation does not affect resource allocation and power distribution within an organization. D) Organizational structure must follow strategy in order for firms to achieve superior performance.

D

________ define appropriate employee attitudes and behaviors. A) Values B) Artifacts C) Appraisals D) Norms

D

________ refers to the degree to which decision making is concentrated at the top of the organization. A) Specialization B) Formalization C) Naturalization D) Centralization

D

Angelika is the Chief Operating Officer of One Spice Inc., a firm that grows and processes the Naga Viper pepper, one of the world's hottest peppers. Angelika wants to better understand the relationship between her firm's organizational culture and the ability to achieve competitive advantage. The relationship between these two states that A) a firm is unable to achieve a competitive advantage if they are pursuing a differentiation strategy. B) a firm can achieve competitive advantage if their organizational culture follows the VRIO principles. C) a firm can achieve and sustain competitive advantage if their balanced scorecard is implemented correctly. D) a firm cannot achieve a competitive advantage when they have an effective organizational culture.

B

Jerry is one of the SBU managers for a firm that has been in business for over 50 years. The external environment in which they have operated has changed significantly in the past decade, but this firm is still operating under a "business as usual" mantra. Jerry can't seem to convince the upper level executives to reorganize the firm's structure and formal reporting relationships. This firm is probably experiencing A) a failed strategy. B) organizational inertia. C) a change in leadership. D) increased morale due to their organizational culture.

B

McDonald's operates Hamburger University that trains students to ensure consistent food quality across its outlets throughout the world. This indicates that McDonalds's A) is organic in nature. B) is mechanistic in nature. C) has an informal structure. D) has a decentralized structure.

B

Organizational culture can help a firm gain and sustain competitive advantage only if the culture makes a positive contribution to the firm's economic value creation and A) eventually gives way to core rigidity. B) obeys the VRIO principles. C) does not demonstrate causal ambiguity. D) displays an absence of social complexity.

B

Why does a functional structure rely on a flat organizational structure? A) The work in the organization is centrally coordinated by the CEO. B) It allows for a higher degree of specialization and domain expertise. C) It allows for efficient bottom-up and top-down communication .D) It allows for the implementation of a differentiation strategy.

C