BUSI 400: Chapter 10

Place the organizational structures below in the order typically followed by corporations as they grow, with the initial structure at the top.

1. Simple Structure 2. Functional Structure 3. Divisional Structure 4. International Structures

Which of the following are possible consequences for a company that outsources manufacturing? (Check all that apply.)

A company can lose critical skills or develop the wrong skills. A company may lose control over a supplier. A company may lose cross-functional skills needed for the manufacture of essential components.

Which of the following is the organizational design in which firms bridge real differences in culture, function, and goals to find common ground that facilitates information sharing and other forms of cooperative behavior?

Barrier-free

Which of the following developments in the business of a firm often lead to a change in the firm's organizational structure? (Check all that apply.)

Diversification into new product markets Increases in the size of the business Expansion in the geographic scope of the business

Which of the following statements about divisional organizational structures are true? (Check all that apply.)

Divisions are relatively autonomous units governed by a central corporate office. Each division has its own functional specialists who are organized into departments. They are sometimes called multidivisional structures or M-Form.

True or false: A divisional structure unifies strategic and operating control.

False

Which of the following is a business organization that from inception seeks to derive significant advantage from the use of resources and the sale of outputs in multiple countries?

Global start-up

Which of the following statements about a functional organizational structure are true? (Check all that apply.)

It has functional groupings, such as accounting, finance, production, and marketing. It is commonly used by organizations that have a single product or service, high production volume, and some vertical integration. The coordination of the functional areas is an important task for the CEO.

Which of the following statements concerning organizational structure are correct? (Check all that apply.)

It helps ensure that resources are used effectively. It identifies hierarchical relationships. It influences the flow of information and the nature of human interactions.

Which of the following statements are true about a virtual organization? (Check all that apply.)

It is a network of suppliers, customers, and even competitors that share costs and access to one another's markets. It allows units from different companies to exploit complementary skills. Through the sharing of knowledge and expertise, it enables member businesses to do more than they could individually.

Which of the following statements about a holding company organizational structure are true? (Check all that apply.)

It is the most appropriate structure for firms that use an unrelated diversification corporate strategy. It is often referred to as a conglomerate. It includes units with a great deal of autonomy.

Which of the following are strategic concerns of outsourcing? (Check all that apply.)

Loss of control over a supplier Loss of critical skills or developing the wrong skills Loss of cross-functional skills

Which of the following statements about the strategic business unit organizational structure are correct? (Check all that apply.)

One goal of using strategic business units is to leverage core competencies. Each strategic unit operates as a profit center. Divisions with similar products, markets, or technologies are grouped into homogeneous units.

Which of the following statements about a matrix organizational structure are correct? (Check all that apply.)

Some individuals report to two managers: the project manager and the functional area manager. Some large multinationals rely on the structure to combine product groups and geographical units. It is a combination of the functional and divisional structures.

Which of the following statements regarding the value of teams for barrier-free organizations are correct? (Check all that apply.)

Teams can help remove layers of hierarchy. Teams often develop more creative solutions to problems because members share tacit knowledge. The amount of time managers spend on controlling employees is reduced.

Which of the following statements about a modular organizational design are correct? (Check all that apply.)

The company becomes a central hub surrounded by networks of outside suppliers and specialists. Manufacturing and service units may be modular. Managers outsource nonvital functions.

Which of the following statements about the advantages of a divisional organizational structure are correct? (Check all that apply.)

The development of general management talent is enhanced due to multiple levels of general managers. Divisional managers can focus their efforts on improving operations in their individual product markets. Corporate officers are able to devote their time to overall strategic issues for the entire firm.

A firm's strategy dictates which of the following aspects? (Check all that apply.)

The division of tasks Authority relationships within the organization The need for integration of activities

Which of the following statements about creating permeable internal boundaries are correct? (Check all that apply.)

The level of organization-wide trust must be high. Teams are an important aspect of barrier-free structures. The focus must be on leveraging all employees' talents.

Which of the following are the three major contingencies that influence the structure of an international company? (Check all that apply.)

The type of strategy driving a company's foreign operations The company's product diversity The extent to which a firm is dependent on foreign sales

Ambidextrous organizational designs are more effective for which of the following reasons? (Choose all that apply.)

They help to improve the performance of the existing business. They are efficient in launching breakthrough products or services.

Which of the following are the two contradictory challenges faced by today's managers? (Check all that apply.)

They must exploit the value of their existing assets and competencies. They must explore new opportunities and adjust to volatile markets in order to avoid complacency.

Which of the following are true statements about global start-up businesses? (Check all that apply.)

They use inputs from around the world right from the beginning. Geographic boundaries of nation-states are irrelevant. They sell products and services in multiple countries right from the beginning.

A simple organizational structure works best for which of the following types of organizations?

Very small companies with a single or very narrow product line

A(n) ______ organizational design attempts to simultaneously pursue modest, incremental innovations as well as more dramatic breakthrough innovations.

ambidextrous

A ______ organizational design refers to an organization in which the boundaries, including vertical, horizontal, external, and geographic boundaries, are permeable.

boundaryless

Which of the following are characteristics of horizontal organizational structures? (Check all that apply.)

consistency in employee training employee job rotation cross-functional teams and interdivisional committees to improve understanding and cooperation among operating units

A ______ organizational structure is an organizational form in which products, projects, or product markets are grouped internally.

divisional

A ______ structure is an organizational form in which the major functions of the firm are grouped internally.

functional

The ______ organizational structure is a variation of the divisional organizational structure in which the divisions have a high degree of autonomy from other divisions and from the corporate headquarters.

holding company

A(n) ______ organizational structure groups similar or related business units under common management control and facilitates sharing resources and infrastructures to exploit synergies among operating units to help create a sense of common purpose.

horizontal

The ______ organizational structure is an organizational form in which there are multiple lines of authority and some individuals report to at least two managers.

matrix

A ______ organization is an organizational form in which nonvital functions are outsourced, which uses the knowledge and expertise of outside suppliers while retaining strategic control.

modular

One important characteristic of boundaryless organizational designs is that internal and external boundaries are ______.

more open and permeable

The formalized patterns of interactions that link a firm's tasks, technologies, and people is known as ______.

organizational structure

A ______ structure is an organizational form in which the owner-manager makes most of the decisions and controls activities, and the staff serves as an extension of the top executive.

simple

A ______ organizational structure is an organizational form in which products, projects, or product market divisions are grouped into homogeneous units.

strategic business unit

The ______ that a firm selects influences the ______ that the company uses.

strategy; structure

Managers working for global companies must align their strategies with the organization's ______.

structure

Handling opposing demands in ambidextrous organizational structures is difficult for managers, because ______.

there will always be some degree of conflict

A(n) ______ organization is a continually evolving network of independent companies that are linked together to share skills, costs, and access to one another's markets.

virtual

Barrier-free organizational designs have replaced more bureaucratic designs, because ______.

work roles are less defined and more fluid