MGT 6890 Chapter 12, MGT 6890 Chapter 11, MGT 6890 - Final Exam (Quiz Questions), MGT 6890 Chapter 10, MGT 6890 Chapter 8, MGT 6890 Chapter 9, MGT 6890 Chapter 7, MGT 6890 Chapter 6

Over the past three decades, CEO compensation has increased substantially. As of 2013, the AFL-CIO's Executive PayWatch database reported that American CEOs make _____ the pay of average workers.

331 times

When a global company must make marketing and sales decisions in different countries that are characterized by a variety of competitive conditions, which of the following types of organization is most advantageous?

A decentralized organization

Which of the following is recommended when a firm's need for differentiation through innovation is high and the degree of environmental change is low?

A functional structure with high integration through the use of teams

Which of the following is recommended when a firm's need for differentiation through innovation is low and the degree of environmental change is low?

A functional structure with low integration through direct contact and liaison roles

Which of the following is recommended for a firm with a stable environment that is not involved in product development?

A strong culture that encourages employee cooperation

_____ looks at the problems that can arise in a business relationship when one person delegates decision-making authority to another.

Agency theory

Weave Corporation operates effectively with a matrix structure with very high integration. Which of the following is likely true about its strategy and environment?

Both its need for differentiation through innovation and the degree of environmental change are high.

The use of a budget is an example of which method of control?

Bureaucratic controls

Which of the following is an argument in favor of centralization?

Centralization can facilitate coordination.

Among the following stakeholder categories, which is usually the LEAST important for an organization to satisfy?

Communities

As senior manager of a subunit of Tally Company, one of Maria's responsibilities is to measure the performance of the subunit and make judgments about how well the managers are running it. Which of the following metrics will Maria use?

Controls

Employees within an organization exhibit particular patterns of behavior based on their shared norms and value systems. These patterns constitute an organization's:

Culture

Which of the following arguments for decentralization is true?

Decentralization can result in more informed decisions.

Grane Manufacturing would like to encourage the development of a knowledge network within the company. Which of the following approaches would most likely be successful for this task?

Encouraging informal contacts between the company's managers

Which of the following statements regarding positive reinforcement is accurate?

Forms of positive reinforcement can run from congratulations for a job well done, to awards, pay increases, bonuses, and enhanced career prospects for those responsible.

Markups Co. would like to be in the top 5% of walnut exporters by the end of the coming year. This future state is considered Markups':

Goal

_____ refer(s) to the formal division of the organization into subunits.

Horizontal differentiation

Which of the following statements regarding performance ambiguity is true?

In firms where divisions are tightly integrated, top managers will have to deal with greater performance ambiguity than top managers in less complex multidivisional organizations.

_____ have the added benefit of fostering a degree of peer control.

Incentive controls

_____ is(are) designed to facilitate self-control.

Incentive controls

Organizations use _____, which are closely tied to performance metrics, to encourage desired employee behavior.

Incentives

Which of the following is an informal integrating mechanism used to coordinate subunits in an organization?

Knowledge network

Incentive controls are meant to do which of the following?

Lower the need for other control mechanisms

In a multibusiness enterprise where the strategy is one of unrelated diversification, the head office typically controls the divisions in which of the following ways?

Market controls allocate capital resources between different divisions.

Which of the following is a goal rather than a standard?

Market share will be increased by 5% over the next year.

Which of the following statements regarding culture as a control mechanism is accurate?

Microsoft's culture of working long hours eventually led to many good employees experiencing burnout and leaving the company.

Which of the following statements regarding people within an organization is accurate?

Much of the value of human capital is contextual in the sense that employees can achieve things within an organization that would not be possible if they were working as independent contractors.

Which of the following statements about organizational architecture is true?

Organizational architecture is a system that encompasses structure, controls, incentives, processes, culture, and human capital.

_____ refer(s) to the values, norms, and assumptions that are shared among employees of an organization.

Organizational culture

As a manager, Jorey can identify tasks and, by using specific measurements, determine whether employees have successfully completed those tasks. Jorey is using what type of controls?

Output controls

_____ control occurs when employees pressure others within their team or work group to perform up to or in excess of the expectations of the organization.

Peer

Which of the following statements regarding personal control is accurate?

Personal control is associated with centralization of power.

Jarrod is owner of a small tax accounting firm. He is a charismatic manager who commands the personal allegiance of his employees. Which method of control would work best for Jarrod?

Personal controls

General Electric enjoyed a high level of competitive success because it adopted a variety of total quality management principles. Its radical improvement in quality is a direct result of which process?

Six Sigma

A _____ is a performance requirement that an organization is meant to attain on an ongoing basis.

Standard

CEOs and other top executives have successfully increased their incomes to extreme proportions primarily through which of the following means?

Stock options

An organization that divides activities according to functions, product lines, or locations is using:

Subunits

Which of the following is problematic in tall hierarchies?

Tall hierarchies are expensive.

Which of these formal integrating mechanisms used to coordinate subunits is the most complex?

Teams

Which of the following statements regarding the sources of organizational culture is accurate?

The culture of an enterprise can be shaped by landmark events in its history.

Which of the following statements regarding the relationship between organizational structure and strategy is true?

The most effective organizational structure needs to align with the organization's strategy.

Which governance mechanism is supposed to be invoked only when other governance mechanisms have failed?

The takeover constraint

Abstract ideas about what a group believes to be good, right, and desirable are called:

Values

Which of the following statements regarding the organization of a multibusiness enterprise is accurate?

Within each division in a multibusiness enterprise, there will be a functional organization.

The capital that stockholders provide to a company is seen as risk capital because:

a return on that investment is not guaranteed.

All of the following contribute to the proper functioning of a knowledge network EXCEPT:

a strong organizational culture that promotes independence of subunits.

A company _____ satisfy the claims of all stakeholders.

cannot always

Making a matrix structure work requires:

clear lines of responsibility.

Often, a firm's _____, or valuable, knowledge-based resources, are embedded in its organizational processes.

core competencies

When different software engineering groups were working on the software code for Windows, Office, and MSN so that all products were Web-enabled and worked seamlessly with each other, Microsoft achieved the tight coordination needed through:

cross-functional teams.

At Microsoft, under the leadership of Bill Gates, staff worked long hours because of:

cultural norms.

With _____, the decision-making authority rests with lower-level managers or other employees.

decentralization

The process of reducing the number of levels in a management hierarchy is called:

delayering.

The board of directors of a company are:

directly elected by stockholders.

Buying many new businesses in an attempt to increase the size of the company through diversification is known as:

empire building.

Increased company growth does not always improve long-term profitability because:

expanding into market segments that earn lower profit margins lowers overall profitability.

The customers, suppliers, and creditors of a company are its:

external stakeholders.

The term "organizational architecture" refers to the totality of a firm's organizational arrangements, including all of the following EXCEPT its:

financial capital.

The best way for managers to maximize shareholder value is to:

find a balance between profitability and profit growth.

Dechen works for a company that has only a few layers that exercise a wide span of control. Dechen works in a:

flat hierarchy.

Masters Company has an R&D department, a production department, a marketing department, and a sales department, with a top manager overseeing these departments. Masters Company has a _____ structure.

functional

The first step in a typical control system is to:

generate the right goals, subgoals, and standards.

An autonomous, self-contained subunit is one that:

has all the resources and decision-making power required to run day-to-day operations.

Michele Buck is the CEO for Hershey Company. She also sits on the company's board of directors. In this role, Buck is a(n):

inside director.

Because product development processes cut across organizational boundaries, such as across the R&D, manufacturing, and marketing departments, performing processes effectively often requires the establishment of formal _____ and incentives for cross-unit cooperation.

integrating mechanisms

Peyton is a member of the board of directors for Unity Point Health Partners. In this capacity, Peyton is a(n):

internal stakeholder.

All of the following are drawbacks of the matrix structure EXCEPT:

it can result in slower product development.

The best way for managers to generate the funds for future dividend payments and keep the stock price appreciating is to pursue strategies that maximize:

long-term profitability.

Organizational processes are defined as the:

manner in which decisions are made and work is performed within the organization.

The main problem with _____ is that fostering internal competition between divisions for capital and the right to develop new products can make it difficult to establish cooperation between divisions for mutual gain.

market controls

High-tech firms based in rapidly changing environments sometimes adopt a _____ structure in which they try to achieve tight coordination between functions, particularly R&D, production, and marketing.

matrix

General Motors (GM), which has diversified into multiple business areas, pioneered the _____ structure.

multidivisional

In Doller Company's office setting, employees do not yell at clients, nor do they arrive to work intoxicated or harass co-workers. These _______ prescribe what is considered to be appropriate behavior in Doller's office setting.

norms

A board member who does not receive a majority of the shareholder vote is:

not legally required to resign.

The span of control refers to the:

number of a manager's direct reports.

Quinn Company has set a goal of increasing its total sales by 5% in the coming year. As part of that goal, the company would like for each salesperson to add at least two sales contacts per week to their current average. This subgoal for the salespeople is also called a(n):

objective.

Once a week, the marketing team for the company's best-selling product holds a meeting to discuss the current marketing campaign, share any feedback received about the campaign, and evaluate the online reviews it has received from customers. The team uses this _____ to decide its next moves.

organizational process

Critics of the existing governance system charge that:

outside directors may become captive of inside directors and merely rubber-stamp management decisions.

Executives who sit on the board of directors and are NOT full-time employees of the company are known as:

outside directors.

Senior management cannot determine whether the failure of a cross-functional product development team to hit predetermined output targets is due to the poor performance of team members or the failure of their respective departments to provide appropriate levels of support to the team. This describes:

performance ambiguity.

In an agency relationship, the person delegating authority is the _____ and the person to whom authority is delegated is the _____.

principal; agent.

A company that sacrifices the needs of some stakeholders in order to meet the needs of others is:

prioritizing needs.

The major goals of a business enterprise are normally stated in terms of:

profitability and profit growth.

Following the steps in a typical control system, if performance exceeds goals and standards, then the next step is to:

provide positive reinforcement.

Stockholders provide the company with _____ and expect management to attempt to maximize their _____.

risk capital; return on investment

Balancing the needs of different stakeholder groups is in the long-term interests of the company's owners. Another word for owners here would be:

shareholders.

The controls that are adopted by a single-business firm with high integration between functions:

should be adopted by multidivisional organizations with high integration between divisions.

A company's _____ are usually put in a different class from other stakeholder groups.

stockholders

Firms that exhibit high performance over a prolonged period tend to have:

strong but adaptive cultures.

A manager sees that performance has fallen short of current goals and standards. If the manager is following the steps in a typical control system, then the next step would be to:

take corrective action.

The responsibility of _____ is to monitor corporate strategy decisions and ensure that those decisions are consistent with stockholder interests.

the board of directors

Influence costs are caused by the loss of efficiency related to:

the deliberate distortions of information passed along through layers of hierarchy.

Organizational structure is a combination of three main aspects. In addition to the location of decision-making responsibilities, organizational structure includes:

the formal division of the organization into subunits and the establishment of integrating mechanisms to coordinate the activities of the subunits.

Managers can generally operate with a wide span of control if all of the following conditions are met EXCEPT:

the number of subordinates is no more than six.

Centralization is usually favored over decentralization when:

the realization of economies of scale is an important factor.

The risk of being acquired by another company motivates top managers to act in stockholders' best interests because:

top managers usually lose their jobs after a company takeover.

The global success of many Japanese manufacturing enterprises in the early 1980s was based in part on their early adoption of:

total quality management.

Whether decision-making authority is centralized or decentralized is an aspect of:

vertical differentiation.

In a multibusiness enterprise, the firm will have a need for integrating mechanisms to coordinate the activities of different product divisions in all of the following situations EXCEPT:

where its focus is primarily on boosting profitability through superior internal governance.

To the extent that functions can be divided into teams, and output controls applied to those teams, this will facilitate:

wider spans of control.