BUS 479

If an international firm has a global strategy and a relatively low level of product diversity, the best choice for its organizational structure is?

Worldwide product division

The three primary means by which a firm can diversify are:

mergers and acquisitions; joint ventures and strategic alliances; internal development.

All of the following are guidelines for managing strategic alliances EXCEPT

Relying primarily on a contract to make the joint venture work

All of the following are disadvantages of a divisional type of organizational structure EXCEPT

There is separation of strategic and operating control

A company offering local telecommunications service combines resources with an international company that manufactures digital switching equipment to research a new type of telecommunications technology. This is an example of

strategic alliance

bought Miller Brewing and used its marketing expertise to improve Miller's market share. This justification for diversification is best described as

Capitalizing on core competencies

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

Develops a divisional structure

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

Differences in functional orientation may impede communication and coordination.

Strategic business unit (SBU) and holding company structures result from extensive

Diversification

"Identifies assets and activities that are rare, distinctive, and valuable" describes which of the following concepts?

Insight

Which of the following is not a boundaryless organizational design?

Matrix

Transaction costs include all of the following costs EXCEPT

agency costs

The corporate office of Cooper Industries adds value to its acquired businesses by performing such activities as auditing their manufacturing operations, improving their accounting activities, and centralizing union negotiations. This is an example of

attaining the benefits of parenting through unrelated diversification.

"A well-crafted corporate theory identifies complementarity that the company is singularly able to assemble or pursue by acquiring assets that can be combined with existing ones to create value."

cross-sight

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)

divisional structure

A new firm with simple structure typically increases its sales revenue and volume of outputs over time.

functional structure

At ABC Corporation, work is divided into units that specialize in production, marketing, research and development, and other management tasks. This is an example of a

functional structure

A simple structure is characterized by

low specialization and high centralization.

Complicated working relationships, intense power struggles, and excessive reliance on group processes are disadvantages of which type of organizational structure?

matrix

When management uses common production facilities or purchasing procedures to distribute different but related products, they are

sharing activities

Sharing core competencies is one of the primary potential advantages of diversification. In order for diversification to be most successful, it is important that

the similarity required for sharing core competencies must be in the value chain, not in the product

Vertical integration is attractive when

transaction cost are higher than internal admin costs

Unbalanced capacities that limit cost savings, difficulties in combining specializations, and reduced flexibility are disadvantages associated with ___________.

vertical integration