Chapter 11 Test

When following a global standardization strategy, a(n) _______ structure is preferred. A. Functional B. M-form C. Simple D. Matrix

b

The primary avenues of culture change are __________. A. New leadership B. Mergers and acquisitions C. A change of structure D. All of these

d

The more _____ a firm, the more the structure will have to be designed to accommodate coordination. A. Focused B. Diversified C. Basic D. Concentrated

b

Usually when a firm's strategic business-level focus is cost leadership, it uses organic structure. A. True B. False

b

Decisions about strategy and structure are interrelated. A. True B. False

a

If a firm emphasizes performance and outcomes, it usually focuses more on output controls. A. True B. False

a

A company offering a limited line of standard products, that competes in a similar manner with a narrow, local market focus, and whose competitive advantage is a focus on low cost derived from gaining economies of scale should organize around a ________. A. Functional structure B. Matrix structure that combines functional departments with geographic divisions C. Geographic structure that creates independent units in each of the countries where the firm competes D. Group of product divisions, each with a geographic focus

a

Organic structure is preferred when a firm is pursuing differentiation strategies. A. True B. False

a

Organizational culture can be the basis of a firm's competitive advantage because __________. A. Culture can be regarded as valuable, rare, and inimitable assets B. Culture is trademarked and copyright protected C. Culture is universally the same across the firm D. Culture is usually a liability, not an asset

a

Organizational culture is difficult to imitate because of ________. A. Causal ambiguity and social complexity B. Core competence and competitive advantage C. Socialization and internalization D. None of these

a

Typically, an organization using a simple structure would be _________. A. Small B. Large C. Of any size if the firm is privately held D. Small if the firm is a public company

a

Walmart's effective strategy/structure configuration is ____________. A. Cost leadership/functional B. Differentiation/simple C. Integration/M-form D. Cost leadership/network

a

When leadership changes, so does the company's culture. A. True B. False

a

When pursuing international strategy, a(n) ______ structure is preferred. A. Functional B. M-form C. Simple D. Matrix

a

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

a

Zappos's culture guides employees' behavior and further enhances the firm's core competency. A. True B. False

a

______ defines what is considered important. A. Value B. Norm C. Socialization D. Founder imprinting

a

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

a

__________ describes the degree to which a task is divided into separate jobs. A. Specialization B. Formalization C. Centralization D. Hierarchy

a

McDonald's uses detailed standard operating procedures throughout the world to ensure product quality. Therefore, McDonald's has a high degree of _________. A. Specialization B. Formalization C. Centralization D. Hierarchy

b

Organizational design is __________. A. The method of entering international markets B. A process of creating, implementing, and modifying the structure of an organization C. A process of creating new competence within the organizational structure D. A way to streamline the organizational learning process

b

Organizational inertia often prompts top management to initiate structural change when organizational performance levels drop. A. True B. False

b

Specialization increases productivity without any side effects. A. True B. False

b

The degree of formalization for McDonald's is low. A. True B. False

b

What is the key method of input control? A. Human resources B. Budgets C. Key supplies D. Performance reviews

b

When a firm diversifies into different product lines and geographies, a(n) _______ structure is preferred. A. Simple B. M-form C. Functional D. Network

b

When a firm is small in size with low organizational complexity, a functional structure is often used. A. True B. False

b

When a firm pursues differentiation strategy, it usually employs a(n) ______ structure. A. Mechanistic B. Organic C. Competitive D. Centralized

b

When pursuing localization strategy, a(n) ________ structure is preferred. A. Functional B. M-form C. Simple D. Matrix

b

Which of the following is a TRUE statement about organizational structures for implementing strategies? A. A cost-leadership strategy requires a simple structure emphasizing high specialization, centralization, and structured job roles. B. A differentiation strategy requires an organic structure with limited formalization, broad job descriptions, and an emphasis on the product R&D and marketing functions. C. An integrated cost-leadership/differentiation strategy requires a command and control structure using high formalization, decentralized decision making, and vertical coordination. D. A focused strategy requires a functional structure featuring high levels of both specialization and formalization.

b

Which of the following statements is TRUE? A. Organizational culture cannot change because it represents the company's core values. B. Organizational culture can become a liability if it is not comprehended thoroughly by employees. C. Organizational culture is a set of codified rules that guide employees' behavior. D. Organizational culture usually comes from other organizations.

b

Which organizational form would you use to describe both Zappos and W. L. Gore? A. Specialized B. Organic C. Mechanistic D. Competitive

b

______ defines appropriate employee attitudes and behaviors. A. Value B. Norm C. Socialization D. Founder imprinting

b

_______ organizations are characterized by a high degree of specialization and formalization, with tall hierarchy that relies on centralized decision making. A. Organic B. Mechanistic C. Specialized D. Competitive

b

_______ seek to guide employee behavior by defining expected results. A. Input controls B. Output controls C. Budgets D. Standard procedures

b

____________ seeks to define and direct employee behavior through a set of codified rules and standard procedures. A. Output control B. Input control C. Cultural change D. Budget control

b

Carly Fiorina intended to change HP's culture by _________. A. Creating new rules and norms B. Laying off key talents C. Acquiring another company D. Liquidating the company

c

What are the three key levers a firm needs to design its organization for competitive advantage? A. Core competence, labor, quality product B. Structure, technology, and well-defined policy C. Structure, culture, and control D. Structure, strategy, and strategic alliances

c

When using a matrix structure, a firm tends to pursue a(n) ________ global strategy. A. International B. Standardized C. Transnational D. Localization

c

Which group is largely responsible for creating a firm's culture? A. Front line workers B. Lower management C. Top management D. Middle management

c

Which of the following does NOT cause a firm to move from a functional structure to a multidivisional structure? A. Increasing diversification B. International expansion C. The need for knowledge-sharing among specialists D. The need for greater amounts of data and information to operate

c

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

c

Structural stability affects the organization's ability to ____________. A. Resist organizational inertia B. Cope with uncertainty about cause-and-effect relationships in the global economy C. Develop new competitive advantages D.Predictably manage its daily work routines

d

The benefits of a simple structure include all of the following EXCEPT ________. A. Ease of coordination within the organization B. The lack of need for sophisticated information systems C. Active involvement by the owner-manager D. Specialists that can develop deep expertise

d

What is the framework that an organization adopts to divide tasks, deploy resources, and coordinate departments? A. Layer B. System C. Strategy D. Structure

d

Which of the following are the benefits of organic structure? A. Flexible information flow B. Faster decision making C. Higher employee motivation D. All of these

d

Which of the following is NOT associated with an organizational structure that supports a cost-leadership strategy? A. Centralization B. Formalization C. Specialization D. Integration

d

Organizational structure _________. A. Specifies the firm's formal reporting relationships, procedures, controls, and authority and decision-making processes B. Specifies the firm's informal reporting relationships, procedures, controls, and authority and decision-making processes C. Specifies the firm's formal value proposition, the markets it will serve, and how the firm will provide value in those markets D. Specifies the firm's control mechanisms, grievance procedures, reporting relationships, procedures, and authority over decision-making processes

a

Output controls can sometimes discourage collaboration among different strategic business units. However more and more work requires creativity and innovation, especially in highly developed economies. One way firms are grappling with this issue is: A. introducing results-only-work-environments to tap intrinsic motivations B. refining the budgeting process to encourage more department collaboration C. updating standard operation procedures to allow more process flexibility D. None of these.

a

The key elements of organizational structure are specialization, centralization, formalization, and hierarchy. A. True B. False

a

The main lesson from ChapterCase 11 about Zappos is that __________. A. Appropriate culture and structure is essential for strategic implementation B. Structure rarely evolves when strategy changes C. Employees need tighter control to ensure service quality D. Strategy has no impact on organizational culture

a

Usually, a company founder defines and shapes an organization's culture. This is called founder imprinting. A. True B. False

a

A firm's _______ specifies the work to be done and resource distribution. A. Strategy B. Structure C. Culture D. Control

b

A high degree of formalization streamlines the decision-making process. A. True B. False

b

A matrix structure is the combination of the ______ and ______ structure. A. Simple; functional B. Functional; M-form C. M-form; network D. Simple; network

b

A(n) ______ structure is recommended when a firm has a fairly narrow focus in terms of product/service offerings. A. Simple B. Functional C. M-form D. Network

b

Companies and business units using the differentiation strategy should emphasize extrinsic strategic controls. A. True B. False

b

John Garcia just graduated from law school and wants to open his own law office. It is best for John to use a(n) ______ structure. A. Functional B. Simple C. M-form D. Matrix

b

BP's failure to handle the Gulf oil spill in 2010 indicates that BP has a high degree of _______. A. Specialization B. Formalization C. Centralization D. Hierarchy

c

A ___________ structure allows the firm to connect centers of excellence, wherever their global location. A. Simple B. Functional C. Network D. M-form

c

A typical college of business (or school of management) has several areas such as management, marketing, finance, accounting, MIS, and so on. This is an example of a(n) _________ structure. A. Simple B. M-form C. Functional D. Matrix

c

All of the following are benefits of a matrix structure, EXCEPT __________. A. Flexibility in assigning teams B. Promotes cross-functional collaboration C. Structural simplicity D. Reduces the duplication of resources

c

In order to implement a cost-leadership strategy, a firm may choose a ________ structure. A. Simple and organic B. Functional and organic C. Functional and mechanistic D. Simple and M-form

c

Management using the M-form structure to support a(n) ___________ strategy should ideally concentrate decision making at the top of the organization. A. Single-business B. Domain business C. Related diversification D. Unrelated diversification

c

McDonald's uses _________ to enforce the input control. A. Budget B. Soft culture C. Standard procedures D. Structural complexity

c

Regional clusters, a collection of interdependent firms, represent a ______ structure. A. Simple B. Functional C. Network D. M-form

c

The number of levels of hierarchy determines a manager's ___________, which is how many employees directly report to a manager. A. Leadership B. Communication skill C. Span of control D. Authority

c

Typically, successful firms pursuing a differentiation strategy will __________. A. Have a very hierarchical structure B. Require a structure which is very formal C. Use cross-functional development teams D. Develop free-standing business units

c

Usually, employees learn about an organization's culture through _____. A. Values B. Norms C. Socialization D. Founder imprinting

c

In the M-form structure, divisions/functional areas can usually be organized around which of the following? A. Geographic markets B. Product/services C. Groups of related businesses D. All of these

d

Managers using M-form structures to support a(n) __________ strategy should decentralize decision making. A. Single business B. Domain business C. Related diversification D. Unrelated diversification

d

One disadvantage of the functional structure is that __________. A. Career paths and professional development are limited B. Dual reporting relationships blur lines of authority C. The CEO cannot coordinate and control the efforts of functional-level employees D. Communication is difficult among organizational functions

d

One of the drawbacks of a high degree of formalization is ______. A. The loss of competitive advantage B. Organizational inertia C. Multipoint competition D. A slow decision-marking process

d

Organizational ________ refers to a firm's resistance to change in the status quo. A. Strategy B. Culture C. Core competence D. Inertia

d

Which of the following is FALSE? A. A positive culture motivates employees by appealing to high ideals. B. Employees feel that they are part of a larger community by internalizing the firm's values and norms. C. A positive culture encourages employees to make decisions not only with their heads but also with their hearts. D. A strong control mechanism needs to be in place to ensure a smooth business operation.

d

Which of the following is TRUE? A. Organizations tend to change their structure too frequently, which erodes their competitive advantage. B. Large organizations can retain a simple structure as long as they have a differentiation strategy. C. Flexibility in structure is more important than stability. D. Strategy has a more important influence on structure than structure has on strategy.

d

Zappos's core competency is ________. A. Product quality B. Distribution C. Just in time production D. Customer service

d

_______ determines the formal, position-based reporting lines. A. Specialization B. Formalization C. Centralization D. Hierarchy

d

__________ organizations have a low degree of specialization and formalization as well as a flatter structure. A. Mechanistic B. Specialized C. Competitive D. Organic

d