Exam 2

The formalization stage of an organizational life cycle involves:

the installation and use of rules, procedures, and control systems.

Which of the following is the only appropriate course of action when a company reaches a stage-4 crisis?

Reorganize with a new executive team combined with changes in structure, strategy, and culture

Which of the following statements best describes "mission drift"?

The organization's employees giving less emphasis to the social mission and placing more importance on generating revenue and profit

Hans is the CEO of a women's shoe manufacturer. For many years, his organization has been very successful at producing huge quantities of the most popular shoe styles, which are then sold in shoe and department stores across the country. A few years ago, in response to increasing competition, Hans decided his company should also produce specialty, "on trend" shoes, which typically sell for just one season. The demand for these shoes is far lower than it is for the classic styles, but his projected profit margins for these highly desirable styles are quite appealing. Since then, however, the plant has struggled to adapt to the new strategy. Using Woodward's theories, how would Hans diagnose the problem?

The plant's technology was aligned with a mass production strategy, but now the plant is expected to simultaneously engage in a small-batch production strategy.

Which of the following is true of international divisions?

They have their own hierarchy to handle businesses in various countries.

A mediating technology provides products or services that mediate or link clients from the external environment and, in doing so, allows each department to work independently.

True

A situation concerning right and wrong in which values are in conflict and cannot easily be resolved is called an ethical dilemma.

True

Craft technologies are characterized by a fairly stable stream of activities, but the conversion process is not analyzable or well understood.

True

Even platform organizations need a hierarchical structure for some aspects of the core business.

True

In the collectivity stage of an organizational life cycle, communication and control are mostly informal, although a few formal systems begin to appear.

True

Which of the following would be an example of an exchange platform organization?

Uber

Oculus VR is dedicated to developing virtual reality and augmented reality technologies for use in a wide range of applications. The organization's products are cutting edge, requiring significant financial investments that are risky, in that many of the early, innovative concepts do not pan out. What would be the ideal organizational size and structure for Oculus VR?

A small subsidiary or division of a large organization

The package delivery company you work for uses AI algorithms to monitor everything from the drivers' time spent at each stop to safety measures such as seatbelt use. As the district manager, you are well aware that drivers resent this kind of close scrutiny of their every move. Yet you support the use of AI to monitor behavior. What is the primary benefit you see?

AI algorithms have demonstrated a significant financial payoff for your organization.

Steve, Oliver, and Chrissy make up the planning department at a large commercial construction company. They all say they enjoy their jobs because every project is a little different, which challenges them to solve problems as they purchase materials, negotiate with subcontractors, and map out the logistics of building each new hotel, office building, or parking structure. What they don't like is that their supervisor, Tamara, requires them to run all of their plans and decisions by her, which requires lengthy meetings in which they have to explain and justify their actions. According to Perrow's model, what is causing conflict in this work environment?

An organic department design with low centralization and less vertical communication would work better for this nonroutine technology work environment.

The members of _____ teams come from different countries and meet face to face.

intercultural

Which of the following approaches to data analytics organizational structure ensures a critical mass of analysts who can obtain the necessary data and develop the necessary expertise to efficiently test and use the data?

Centralized approach

Village Greens, an organic, farm-to-table restaurant, is a hybrid organization. In addition to serving delicious food, the organization wants to educate the public on the health benefits of organic eating. What is one technique Village Greens could use to avoid "mission drift"?

Collaborate with organic food growers that supply ingredients to the restaurant

Another disappointing day. The reports on your desk indicate that sales of your organization's cookware and cooking utensils are down again... for the sixth quarter in a row! The sales manager was in your office earlier today, trying desperately to make things sound better than they are, but you know something is very wrong. What is your best course of action?

Conduct market research to determine why consumers no longer find your products desirable

You were thrilled when your employer named you the new Southeast Asia manager and put you in charge of setting up the organization's office there. But in only your second week at the new location, you encountered something unusual. A local government worker informed you that he would process your permit applications and other paperwork more quickly if you were willing to give him a cash payment, otherwise it may take up to 18 months to process them. Where you come from, that's a bribe, which is both unethical and illegal. Your career is riding on this promotion, so what should you do?

Consult with your organization's ethics committee and act accordingly

_____ means searching out and analyzing data from multiple sources across the enterprise, and increasingly from outside sources as well, to identify patterns and relationships that might be significant.

Data mining

Your organization, which is located in the U.S., manufactures inexpensive cell phones. In recent years, competition and changing consumer preferences in the domestic market have driven sales down, which is why you're considering entering the African market, where the demand for inexpensive cell phones is high. Which of the following provides the strongest motivation for you to expand globally?

Economies of scale

In addition to manufacturing paper and plastic cups that are sold directly to consumers, your organization makes plastic and paper cups used in fast-food restaurants. Yum! Brands, a huge international organization that owns KFC and other chains, is your biggest customer in the U.S. However, you've realized that if you could set up manufacturing and distribution centers in strategic locations around the globe, you could potentially become Yum!'s sole supplier of cups world-wide. Which of the following provides the strongest motivation for you to expand globally?

Economies of scope

You've got a big problem on your hands. As the director of the local passport office, you are well aware of the many forms that your office is required to process to grant passports to U.S. citizens. However, word has filtered up through the ranks that the systems for processing these forms is inefficient and frustrating. People often have to wait in line for hours to get their documents processed, and it's not unusual for them to express their anger to frontline employees. After conducting a stakeholder mapping exercise, you've concluded that a set of stakeholder groups are in conflict. Which groups are they?

Employees, customers, management, government

Andrew and his team work for a large poultry producer in Georgia. Each month they process orders, track payments, report on inventories, calculate profit and loss, and the like. All of these tasks must be done according to protocol, otherwise their reports to both shareholders and the government could be inaccurate, which could have serious repercussions. How would Perrow categorize this work environment?

Engineering

A hybrid organization is best served by a structure in which employees are divided into two departments: one focused on social welfare and the other focused on profit goals.

False

Actions like retrenchment and downsizing personnel are considered in the final stage of decline of an organizational life cycle.

False

An organization that wants to work toward both financial goals and positive social contributions must incorporate as a benefit corporation, the correct legal status for such an organization.

False

Perrow's study is classified as pertaining to organization-level technology, while Woodward's is classified as pertaining to department-level technology.

False

Sequential interdependence exists when the output of operation A is the input to operation B, and the output of operation B is the input back again to operation A.

False

The dissolution stage is not irreversible, major organizational restructuring can still turn things around.

False

You are in the process of starting up a hybrid organization that supports women in the emerging African nation of Namibia. You are supplying about 25 women with yarn and knitting needles, and they will knit hats and scarves from these materials. The women will then ship the finished goods back to the U.S., where your sales team will sell them to outlets across North America. As you start to hire your team members, what will be the best way to ensure they have the right mindset to work in a hybrid organization?

Hire only those candidates who have unrelated experience who can be trained to have a balanced mindset

Which of the following is true of a global product structure?

It provides a fairly straightforward way to effectively manage a variety of businesses and products around the world.

You've just joined the board of directors of Carolina Furniture Co., a well-respected furniture maker that's been in business for more than 80 years. Located in a rural area, it's the main employer in town with a loyal workforce proud of their contributions to quality craftsmanship. At the first board meeting, you discover a major conflict. The CEO, who assumed the role 18 months ago, is frustrated because she sees tremendous opportunity for mass customization, which is why she's invested a significant amount of money in computer-aided manufacturing equipment. The VP of production, however, says that all of his mid-level managers and supervisors have reported a powerful resistance to this new approach, which is why productivity is down. Based on what little you know, what do you suspect could be the main source of the problem?

Longtime employees are accustomed to specialized roles in a hierarchical organization, and management has not found a way to help them adapt to working in a smart factory.

In business for more than 30 years, you've seen the market for the engine parts you manufacture fluctuate, and you've learned the hard way that you've got to run a cost-effective business to weather the lean years. Recently, you've been wondering if you should invest in a new manufacturing plant in Asia or South America, where local raw materials and labor are less expensive. But then you'll have to balance that with the cost of the new plant, as well as the expense of shipping the finished goods back to your customers in the U.S. Which of the following provides the strongest motivation for you to expand globally?

Low-cost production factors

Which of the following is true of managers in the collectivity stage of an organization?

Lower-level managers begin to acquire more confidence and want more discretion.

_____ control occurs when price competition is used to evaluate the output and productivity of an organization or its major departments and divisions.

Market

You own a chain of 12 fast-casual restaurants in the Midwest. You've heard a lot about big data analytics, and you know that an analysis of data on your customers could help you operate your organization more efficiently. However, you realize that collecting and analyzing enough data to be useful will be time consuming and expensive. What is your best option for taking advantage of big data?

Outsource to a data intermediary that can collect data from other similar organizations and analyze the combined data

Which of the following refers to the set of moral principles and values that governs the behavior of a person or group with respect to what is right or wrong?

Personal ethics

You are the CEO of a major restaurant conglomerate that owns several national restaurant chains. Several years ago, you invested in AI to monitor service employees' performance, and since then you have seen an increase in hourly sales and a decrease in employee theft. These promising results have motivated you to expand the use of AI in your organization, but first you'd like to create a new chief artificial intelligence officer role. What is the main reason you'd like to create this new position?

You need someone to manage AI from a strategic standpoint and recommend uses for this impressive tool.

In a platform organization, _____ make more consistent, impartial, and faster decisions.

algorithmic systems

An organization's _____ technology is the work process that is directly related to the organization's mission.

core

With the ability to make decisions equal to or better than human beings, computer-based artificial intelligence is being rapidly adopted:

for core manufacturing and management functions.

Carter is a middle-level manager in his organization. He was satisfied with his job for the first three years, but he has decided to quit as he feels stifled by the bureaucracy and lack of innovation. Carter's organization is most likely in the _____ stage of the organizational life cycle.

formalization

Global Health Inc. is a multibillion-dollar pharmaceutical company with R&D and manufacturing facilities scattered across Europe and North America. Francesca, who works in the Milan R&D facility, is responsible for ensuring that all research data and analysis is catalogued and stored in a database where all members of the organization, especially those in R&D, can access it. She also facilitates virtual team meetings where research is shared and discussed and future research needs are determined. Francesca's role can best be described as a _____ manager.

functional

Companies that use a global _____ structure have typically been those with mature product lines and stable technologies.

geographic

The _____ strategy means that product design, manufacturing, and marketing strategy are standardized throughout the world, which is less costly than creating different products for different markets.

globalization

Separate sustainability departments are good for:

handling administrative details related to sustainability programs, such as reports.

Penrose Inc. is an American corporation that provides business consulting, information technology, and outsourcing services. The company has extensive experience in a number of international markets and has established facilities in several foreign countries. Penrose Inc. is in the _____ stage of international development.

multinational

Thanks to digital technology that can tie companies together into a seamless information flow, _____ has become a major trend.

outsourcing

Vintichic, a fashion house, plans to launch its new collection for summer. Each department has a part to play in producing the final product. The designers send the fabric and designs to the tailors, the tailors send the sewed clothes to the department that accessorize the clothes, the accessorizing department sends the clothes to the packaging and shipping department, and finally the packaging and shipping department transports the clothes to their various outlets throughout the world. In this scenario, the type of interdependence exhibited by the departments of the fashion house is _____ interdependence.

sequential