Policy Chapter 11

59) Which of the following is an advantage of using a functional structure when pursuing a cost-leadership strategy? A) It allows a cost-leader to upgrade core competencies in manufacturing and logistics. B) It enables a cost-leader to build products that are different from its competitors' offerings. C) It enables a cost-leader to increase costs above that of its competitors. D) It allows a cost-leader to operate in a decentralized organizational structure.

A) It allows a cost-leader to upgrade core competencies in manufacturing and logistics.

69) Why should managers using the M-form organizational structure to support a related- diversification strategy ideally concentrate decision making at the top of the organization? A) It allows a high level of integration. B) It helps contain the core competencies within a strategic business unit (SBU). C) It leads to competition between SBUs. D) It helps evaluate each SBU as a stand-alone profit-and-loss center.

A) It allows a high level of integration.

92) One of Black Mesa's core values is to provide unbeatable customer service, a commitment introduced to the company by its founder more than 10 years ago. This value is expressed in the company's "Always You" campaign, which promises a no-questions-asked returns policy and an offer to stitch the customer's initials onto any item for free using a patented sewing technique, two features that are not offered by any of Black Mesa's competitors. Although the campaign has resulted in a 10 percent decline in profits, Black Mesa has decided to continue to pursue its founder's vision to reward customers and maintain employees' sense of purpose. Why does Black Mesa's culture, exemplified by the "Always You" campaign, fail to support a competitive advantage? A) It does not increase economic value creation for the firm. B) It is not a rare resource. C) Always lacks founder imprinting. D) The culture is not difficult to imitate.

A) It does not increase economic value creation for the firm.

32) What most likely happens when a firm optimizes its organizational structure to its current situation? A) It plants the seed of subsequent failure: the tightly coupled system can break apart when internal or external pressures occur. B) It achieves superior performance. C) It makes it difficult for managers to make the necessary changes due to its effects on resource allocation and power distribution. D) It transforms strategy into actions and business models.

A) It plants the seed of subsequent failure: the tightly coupled system can break apart when internal or external pressures occur.

75) Why is the optimal organizational structure a multidivisional structure? A) Its focus is on driving down costs. B) Its focus is on producing differentiated products. C) Its focus is on retaining activities within a single geographic area. D) Its focus is on establishing a flat hierarchy operated in a decentralized fashion.

A) Its focus is on driving down costs.

76) Which of the following provides an example of a common drawback of a functional strategy? A) Jack had a difficult time communicating efficiently with the manager of another department. B) Leslie was surprised about the inflexibility of her firm when it rejected her marketing plan. C) Chris's manager dismissed his idea because it was too innovative. D) Denise did not accept the position with the firm because it has an ineffective cost- leadership strategy.

A) Jack had a difficult time communicating efficiently with the manager of another department.

43) Paper Street Soap Company, a cosmetics firm, has offices in New York, Texas, California, New Mexico, and New Jersey. Each of these offices is headed by a president who reports directly to Jennifer Watson, the CEO. The heads of the centralized HR, Finance, and Marketing teams report to Jennifer Watson as well. Managers in the various offices also report to the CEO directly. Based on this information, which of the following statements is most likely to be true? A) Jennifer Watson has a wide span of control. B) Paper Street Soap Company has a tall hierarchical structure. C) Jennifer Watson is underworked. D) Paper Street Soap Company is a mechanistic organization.

A) Jennifer Watson has a wide span of control.

77) Stratton Oakmont pursues a related diversification strategy, deriving less than 70 percent of revenues from its original business unit, Stratton Piedmont, and maintaining several related units including Stratton Wellmont and Stratton Fredmont. Which of the following structures is most likely to support this strategy? A) M-Form with centralized decision-making power (cooperative multidivisional) B) M-Form with decentralized decision-making power (competitive multidivisional) C) functional with centralized decision-making power D) functional with decentralized decision-making power

A) M-Form with centralized decision-making power (cooperative multidivisional)

94) Which of the following best exemplifies the use of input controls? A) McDonald's use of standard operating procedures B) GM's use of the multidivisional strategy C) Zappos' use of monitoring-free customer service calls D) Southwest Airlines' use of employee friendliness

A) McDonald's use of standard operating procedures

53) Sarah, a recent fashion design school graduate, has received praise for her clothing designs from her peers and friends on social networking sites; this has inspired her to set up a store where she can design and sell apparel. After experiencing some success with sales, she recruits two employees to handle customers at the store. However, she handles other day-to-day affairs herself, while continuing to design clothes. Which of the following is likely to be a pitfall of this organizational structure established by Sarah? A) Once the firm starts growing and attracting more customers she is likely to feel overloaded. B) Hiring more employees will result in loss of intellectual property. C) People are highly unlikely to buy clothes from a store run by a fashion design student. D) The online admiration of her designs will not translate into sales.

A) Once the firm starts growing and attracting more customers she is likely to feel overloaded.

89) Why is it difficult to imitate the organizational culture of firms like Southwest Airlines and Zappos? A) Their culture reflects complex relationships with their employees, customers, and suppliers. B) They produce products that cannot be copied easily because of their complex designs. C) The employees in the organization themselves are unaware of the factors contributing to their organizational culture. D) It is not commercially viable for other companies to implement the same culture.

A) Their culture reflects complex relationships with their employees, customers, and suppliers.

99) Which of the following is true of the process of organizing for competitive advantage? A) To maintain competitive advantage, companies need to restructure as they grow and the competitive environment changes. B) Strategy formulation and strategy implementation are independent activities. C) Organizing for competitive advantage is a static and not a dynamic process. D) Formulating an effective strategy is a necessary and sufficient condition for gaining and sustaining competitive advantage.

A) To maintain competitive advantage, companies need to restructure as they grow and the competitive environment changes.

14) Susan works for a firm that has high degrees of formalization in their organizational structure. She understands that one of the main drawbacks of working in a firm with such high levels of formalization can often result in which of the following? A) a slower decision-making process B) increased organizational inertia C) less co-opetition D) increased vertical integration

A) a slower decision-making process

35) Fang and Bone Corp. is a successful drug manufacturer. Because the pharmaceutical industry features a high rate of change and the threat of disruption is high, Fang and Bone Corp. should A) be prepared to restructure as the landscape changes. B) stick with the structure that brought it success no matter what happens. C) attempt to implement an unstructured organization. D) switch to whichever structure is most common in the industry.

A) be prepared to restructure as the landscape changes.

62) Blue Cat Restaurant Group relies on a highly centralized functional structure to ensure consistency in the quality and taste of its products and to drive down costs via process innovations. However, as a consequence of its highly compartmentalized structure, the firm has found it difficult to transfer information and ideas from one department to the next. With the launch of its new line of breakfast foods coming up, how can the Blue Cat Restaurant Group improve its ability to collaborate without sacrificing the benefits of its current structure? A) by establishing cross-functional teams B) by switching to a simple structure C) by switching to a competitive M-form structure D) by decreasing managers' span of control

A) by establishing cross-functional teams

22) Elvira is the CEO of All Things Inc. which employs a matrix structure which is the combination of the ________ and ________ structure. A) functional; M-form B) simple; functional C) M-form; simple D) network; functional

A) functional; M-form

72) A firm that uses a structure that is organized along different business functions such as HR, R&D, Sales, and Marketing and also along different geographical areas such as different countries of the world is most likely using a ________ structure. A) global matrix B) multidivisional C) functional D) simple

A) global matrix

98) 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 by A) introducing results-only-work-environments to tap intrinsic motivations. B) refining the budgeting process to encourage more department collaboration. C) updating standard operating procedures to allow more process flexibility. D) using output controls only when the goal is to ensure a predictable outcome.

A) introducing results-only-work-environments to tap intrinsic motivations.

78) Sirius Cybernetics Corp. produces touch-enabled wearable devices. Its research and development team recently became aware of a new, open-source technology produced by a firm overseas that would improve the processing speed and battery life of all Sirius Cybernetics devices. In this scenario, Sirius Cybernetics would be best served to embrace A) open innovation. B) closed innovation. C) disruptive innovation. D) radical innovation.

A) open innovation.

34) Hooper's Store Inc. started a chain of organic supermarkets that had initial success. The managers achieved a mastery of the firm's current environment, thereby filling a need in the market. However, Hooper's Store defined and measured it success by financial metrics, with a focus on short-term performance. As a result, the firm put in place metrics and systems to accommodate and manage increasing firm size due to continued success. As a result of this tightly coupled system, Hooper's Store developed a(n) A) resistance to change. B) innovative approach. C) significant value gap. D) holacratic system.

A) resistance to change.

15) Vanessa just graduated from law school and wants to open her own law firm. Vanessa should probably adopt a(n) ______ structure for the firm. A) simple B) functional C) M-form D) matrix

A) simple

52) While working a night job at a call center, John creates an app called iFood, which can be used to place orders at restaurants, rate the restaurants, and make reservations. Because he receives good responses for his app, he quits his current job to focus his efforts on iFood. He creates a start-up called JohnBuilt1 and hires three people to help him improve iFood and maintain the servers that run it. In this scenario, JohnBuilt1 most likely has a ________ structure. A) simple B) matrix C) mechanistic D) functional

A) simple

82) Employees learn about an organization's culture through the process of A) socialization. B) exploitation. C) co-opetition. D) acculturation.

A) socialization.

28) Organizational design is A) the process of creating, implementing, and modifying the structure of an organization. B) primarily focused on replacing a firm's competitive advantage with competitive parity. C) a process that always functions independently of strategy formulation. D) primarily focused on formulating effective strategies, not implementing them.

A) the process of creating, implementing, and modifying the structure of an organization.

83) The most important yet least visible element of organizational culture is A) values. B) norms. C) laws. D) artifacts.

A) values.

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

B) It is better for founder CEOs to create a relevant culture, structure, and strategy in the early stages.

37) Which of the following real-world scenarios best exemplifies formalization? A) Zappos' focus on allowing its customer service employees to use their own approach rather than depend on scripts B) McDonald's use of standard operating procedures across the world C) W. L. Gore's associates organizing themselves in project-based teams that are led by sponsors, not bosses D) Yahoo's decision to fire its CEO after incurring huge losses

B) McDonald's use of standard operating procedures across the world

29) Why does strategy implementation often require changes within an organization? A) Strategy implementation is less important than strategy formulation. B) Strategy implementation transforms strategy into actions and business models. C) Strategy always follows structure. D) Strategy implementation does not affect resource allocation and power distribution within an organization.

B) Strategy implementation transforms strategy into actions and business models.

44) Yubaba Inc., a fidget spinner manufacturing company, encourages its employees to enjoy their work by taking on additional responsibilities or switching jobs with each other. It allows its employees immense flexibility in charting their own career path within the organization. Bill has worked at Yubaba for eight years, but has never had a boss or supervised an employee. Which of the following is most likely true in this scenario? A) Yubaba Inc. is a mechanistic organization. B) Yubaba Inc. has a flat organizational structure. C) Yubaba Inc. has a high degree of centralization. D) Yubaba's organizational culture is governed by codified rules.

B) Yubaba Inc. has a flat organizational structure.

85) Which of the following types of groups is most susceptible to groupthink? A) a diverse group B) a cohesive group C) a heterogeneous group D) a decentralized group

B) a cohesive group

24) Angelika is the Chief Operating Officer of One Spice Inc., a firm that grows and processes the Naga Viper pepper, one of the world's hottest peppers. Angelika wants to better understand the relationship between her firm's organizational culture and the ability to achieve competitive advantage. The relationship between these two states that A) a firm is unable to achieve a competitive advantage if they are pursuing a differentiation strategy. B) a firm can achieve competitive advantage if their organizational culture follows the VRIO principles. C) a firm can achieve and sustain competitive advantage if their balanced scorecard is implemented correctly. D) a firm cannot achieve a competitive advantage when they have an effective organizational culture.

B) a firm can achieve competitive advantage if their organizational culture follows the VRIO principles

40) In 2013, CEO Hsieh announced that Zappos would implement a reorganization in which, as Hsieh said, "... employees ... act more like entrepreneurs and self-direct their work ..." Hsieh changed Zappos from A) a holacracy to a hierarchy. B) a hierarchy to a holacracy. C) a decentralized structure to a formalized structure. D) a bottom-up to a top-down style.

B) a hierarchy to a holacracy.

70) Weyland Yutani Inc. is an electronic appliances manufacturer that has many strategic business units (SBUs), among which, television and computers share a close relationship. These SBUs have to fight each other for R&D funding because there is a combined amount set aside for these two units. However, they share technological findings with each other and work together to ensure that their combined output is better that of the other SBUs. Such a relationship between SBUs in a business is referred to as A) competition. B) co-opetition. C) exploitation. D) exploration.

B) co-opetition.

31) Tom is the inventor of a personal fitness tracking device, and he is in the process of hiring employees after receiving investment funding. When considering how to structure his company, he should A) emulate the structure of the leading firm in the industry. B) first establish a strategy and let that be him guide. C) choose the structure that will give him the most control. D) ask employees what structure they are most comfortable with.

B) first establish a strategy and let that be him guide.

17) The University of Central Florida has a typical College of Business which houses several specific mini-departments such as management, marketing, finance, accounting, economics, and real estate. This College of Business best resembles a(n) ________ structure. A) simple B) functional C) multidivisional D) holarchy

B) functional

58) A functional structure is recommended when a firm A) has a broad focus in terms of its product/service offerings. B) has a low level of diversification. C) has a low degree of specialization. D) diversifies into different product lines and geographies.

B) has a low level of diversification.

95) Delos Inc. is an apparel manufacturer. The management at Delos Inc. prefers moderate control over the operations of the different departments such as R&D, design, marketing, and sales. It allocates a budget to each function at the beginning of each quarter. This is an example of implementing control through A) output controls. B) input controls. C) multidivisional strategy. D) centralization.

B) input controls.

48) McDonald's operates Hamburger University that trains students to ensure consistent food quality across its outlets throughout the world. This indicates that McDonalds's A) is organic in nature. B) is mechanistic in nature. C) has an informal structure. D) has a decentralized structure.

B) is mechanistic in nature.

73) Which of the following global strategies best matches with a multidivisional structure? A) international B) multidomestic C) global-standardization D) transnational

B) multidomestic

91) Organizational culture can help a firm gain and sustain competitive advantage only if the culture makes a positive contribution to the firm's economic value creation and A) eventually gives way to core rigidity. B) obeys the VRIO principles. C) does not demonstrate causal ambiguity. D) displays an absence of social complexity.

B) obeys the VRIO principles.

23) Leslie has completed the organizational design of her firm but is now interested in the second key informal building block, which she believes will help her firm achieve a competitive advantage. Specifically, she's interested in how things will get done on a day-to-day basis and the intangible piece of her organization that cannot be easily codified. Leslie wants to build an effective A) employee handbook. B) organizational culture. C) list of standard operating procedures. D) innovation strategy.

B) organizational culture.

13) Jerry is one of the SBU managers for a firm that has been in business for over 50 years. The external environment in which they have operated has changed significantly in the past decade, but this firm is still operating under a "business as usual" mantra. Jerry can't seem to convince the upper level executives to reorganize the firm's structure and formal reporting relationships. This firm is probably experiencing A) a failed strategy. B) organizational inertia. C) a change in leadership. D) increased morale due to their organizational culture.

B) organizational inertia.

39) A high degree of formalization in an organization is most likely to A) improve customer service. B) slow down decision making. C) produce inconsistent results. D) increase creativity and innovation.

B) slow down decision making

45) Jared works as a front-line employee for a nationwide retail store. He reports to a floor manager, who reports to a departmental manager, who reports to a regional supervisor, who reports to a vice president, who reports to the CEO. Which of the following best describes this retail store? A) flat structure B) tall structure C) centralized structure D) decentralize structure

B) tall structure

54) Which of the following is an advantage offered by a functional structure? A) It allows for an efficient top-down communication chain and thus relies on a relatively tall structure. B) It facilitates a lower division of labor, which is linked to higher productivity. C) It allows for a higher degree of specialization and deeper domain expertise. D) It facilitates a lower level of specialization.

C) It allows for a higher degree of specialization and deeper domain expertise.

55) Why does a functional structure rely on a flat organizational structure? A) The work in the organization is centrally coordinated by the CEO. B) It allows for a higher degree of specialization and domain expertise. C) It allows for efficient bottom-up and top-down communication. D) It allows for the implementation of a differentiation strategy.

C) It allows for efficient bottom-up and top-down communication.

60) Why does a firm use an organic organization combined with a functional structure when implementing a differentiation strategy? A) It allows the firm to create incentives to foster process innovation in order to drive down cost. B) It allows the firm to reduce its cost below that of competitors while offering acceptable value. C) It allows the firm to constantly upgrade core competencies in R&D, innovation, and marketing. D) It allows the firm to nurture and constantly upgrade necessary core competencies in manufacturing and logistics.

C) It allows the firm to constantly upgrade core competencies in R&D, innovation, and marketing.

65) Which of the following is a disadvantage of a functional strategy? A) It frequently lacks the tools required to pursue a cost-leadership strategy. B) It does not facilitate rich communication between members of the same department. C) It cannot effectively address a higher level of diversification. D) It does not allow organizations to be flexible or innovative.

C) It cannot effectively address a higher level of diversification.

49) Los Pollos Hermanos is a nationwide fast-food chain. Decision power resides at the top of the organization. Each job is documented in minute detail. The firm has many levels of supervision, including vice presidents and regional managers. The firm's headquarters provides detailed instructions to each of its franchisees so that they provide comparable quality and service across the board. Based on this scenario, which of the following is an accurate statement about Tony's? A) Los Pollos Hermanos has a low degree of specialization and formalization, a high degree of centralization, and relies on a flat hierarchy. B) Los Pollos Hermanos has a high degree of specialization and formalization, a low degree of centralization, and relies on a tall hierarchy. C) Los Pollos Hermanos has a high degree of specialization, formalization, and centralization and relies on a tall hierarchy. D) Los Pollos Hermanos has a low degree of specialization, formalization, and centralization and relies on a flat hierarchy.

C) Los Pollos Hermanos has a high degree of specialization, formalization, and centralization and relies on a tall hierarchy.

80) ________ describes the collectively shared values and norms of an organization's members. A) Competitive advantage B) Organizational structure C) Organizational culture D) Core competency

C) Organizational culture

33) ________ refers to a firm's resistance to change the status quo that can set the stage for the firm's subsequent failure. A) PESTEL factors B) Formalization C) Organizational inertia D) Centralization

C) Organizational inertia

79) Two leading home appliance companies, Globex Inc. and Pug Tech, are in competition for market share. In their quest for exciting new products, Globex employs an open innovation model, while Pug Tech pursues a closed innovation model. Which of the following statements is most likely true? A) Globex has a greater chance of capturing market share. B) Pug Tech has a superior absorptive capacity. C) Pug Tech will protect its intellectual property with patents and trade secrets. D) Globex is most concerned with securing first-mover advantages.

C) Pug Tech will protect its intellectual property with patents and trade secrets.

88) Which of the following real-world scenarios best exemplifies the use of organizational culture to build competitive advantage? A) W. L. Gore & Associates organizes its employees into project-based teams. B) Apple develops high-tech products that are preferred by consumers across the world. C) Southwest Airlines pilots sometimes help load baggage, which results in quick turnaround time. D) GM offers compensation if its products do not meet a consumer's expectations.

C) Southwest Airlines pilots sometimes help load baggage, which results in quick turnaround time.

46) The Estelle Leonard Talent Agency recently underwent a reorganization. Based on customer feedback, the company eliminated many of its middle management positions and implemented a flatter structure. Which of the following is a possible drawback of this decision? A) Employees will have less power and autonomy, resulting in a loss of morale. B) Internal communications and decision-making processes will be slower. C) The increased span of control for remaining managers may lead to higher levels of stress and possible burnout. D) Employees will be forced to take on more specialized roles and may become bored by repetitive tasks.

C) The increased span of control for remaining managers may lead to higher levels of stress and possible burnout.

96) Why are controls like budgets and operating procedures that McDonald's implements known as input controls? A) They are independent of an organization's culture. B) They are implemented by corporate headquarters. C) They are considered before employees make any decisions. D) They are ad hoc and not codified.

C) They are considered before employees make any decisions.

100) Nerissa sets up a business consulting firm in which the employees are motivated because they find their work interesting and creative. She carefully hires workers who fit well with their assigned tasks. Also, she clearly defines the results expected of each worker, but allows the workers to determine the means to these results. Which of the following best describes Nerissa's business? A) a firm that relies on high input controls to tap into intrinsic motivation B) a firm that relies on high input controls to tap into extrinsic motivation C) a firm that relies on high output controls to tap into intrinsic motivation D) a firm that relies on high output controls to tap into extrinsic motivation

C) a firm that relies on high output controls to tap into intrinsic motivation

26) Sean is having hard time replicating his competitors' strong organizational culture because of ________ and ________, which stem from the VRIO framework. A) tangible; intangible budgets B) organizational socialization; input controls C) causal ambiguity; social complexity D) historical conditions; external opportunities

C) causal ambiguity; social complexity

18) A firm that uses a functional structure will typically have efficient top-down and bottom- up communication, but A) dual reporting relationships typically blur lines of authority. B) the top management team may fail in their coordination and control efforts of functional-level employees. C) communication may be hampered among the horizontal, distinct organizational functions. D) career paths and professional development are limited.

C) communication may be hampered among the horizontal, distinct organizational functions.

51) Hooli, a web development firm, wants to implement an organic structure to foster innovation and attract the most talented creative minds. Which of the following features will make it difficult to do so? A) decision-making power distributed throughout the organization B) a wide span of control for managers C) dedication to a cost-leadership business strategy D) flexible job descriptions for employees

C) dedication to a cost-leadership business strategy

16) Simple organizational structures often exhibit low levels of formalization and specialization. Which of the following is not a benefit of employing a simple organizational structure? A) being able to easily and quickly coordinate and communicate within the firm B) not having the need for sophisticated information technology/management systems C) employing specialists that can develop deep knowledge/expertise in their field D) being able to converse with the CEO and other upper level executives

C) employing specialists that can develop deep knowledge/expertise in their field

101) Aperture Science relies on its employees to provide innovative ideas for new educational products. To foster intrinsic motivation in its workforce, Aperture Science should A) offer bonuses to employees whose ideas go into production. B) threaten to fire employees who do not come up with at least one new idea per week. C) give employees a "free day" every two weeks to pursue ideas for new educational toys. D) distribute a list of standard operating procedures for employees to follow.

C) give employees a "free day" every two weeks to pursue ideas for new educational toys.

71) An organization that is organized according to strategic business units (SBUs) and also along organizational structures is most likely using a ________ structure. A) functional B) multidivisional C) matrix D) simple

C) matrix

66) When a firm diversifies into different product lines and geographies, a ________ structure is preferred. A) simple B) functional C) multidivisional D) network

C) multidivisional

67) PolyCon's, a large and successful retail chain on the East Coast, decides to expand its operations across the United States. Which of the following organizational structures should PolyCon's use? A) basic B) simple C) multidivisional D) functional

C) multidivisional

63) Which of the following types of organizations best helps match a differentiation strategy to a functional structure? A) ambidextrous organization B) mechanistic organization C) organic organization D) rigid organization

C) organic organization

57) To effectively implement a differentiation strategy, managers rely on a functional structure that resembles an organization that is highly A) formalized. B) specialized. C) organic. D) mechanistic.

C) organic.

38) Which of the following is an unintended side effect of a high degree of specialization in an organization? A) decreased trade-off between breadth and depth of knowledge B) decreased opportunities for the division of labor C) reduced employee satisfaction due to repetition of tasks D) reduced productivity

C) reduced employee satisfaction due to repetition of tasks

102) Successful ________ requires managers to design and shape structure, culture, and control mechanisms. A) strategy innovation B) strategy formulation C) strategy implementation D) strategy diversification

C) strategy implementation

36) A firm's ________ determines how the work efforts of individuals and teams are orchestrated and how resources are distributed. A) norms B) culture C) structure D) control

C) structure

42) Oceanic Airlines Inc., a transportation firm, is headed by Denise Cordova, the CEO. Each functional department of the company—marketing, finance, and HR—has a president who reports to the CEO directly. Each department has various managers who manage teams. The managers report to the presidents, and the team leads report to the managers. Finally, the employees at the lowest level report to their team leads. It is rare for a lower-level employee to interact with the CEO of the company. In this scenario, Oceanic Airlines Inc. can be said to have a(n) A) organic organizational structure. B) decentralized organizational structure. C) tall hierarchical structure. D) flat hierarchical structure.

C) tall hierarchical structure.

41) ________ refers to the degree to which decision making is concentrated at the top of the organization. A) Specialization B) Formalization C) Naturalization D) Centralization

D) Centralization

93) In which of the following ways does Zappos achieve organizational control? A) It continually changes the organizational values that guide its employees. B) It refrains from monitoring its employees' calls. C) It encourages employees to be creative and innovate and to go the extra mile to deliver a wonderful customer experience. D) It enforces that each group member's compensation depends in part on the group's overall productivity.

D) It enforces that each group member's compensation depends in part on the group's overall productivity.

84) Which of the following statements best describes groupthink? A) It is a process by which the founder defines and shapes an organization's culture, which can persist for decades after his or her departure. B) It is a situation in which organizations compete with one another for resources, but they also need to cooperate to share competencies. C) It is a process whereby employees internalize an organization's values and norms through immersion in its day-to-day operations. D) It is a situation in which opinions coalesce around a leader without individuals critically challenging and evaluating that leader's opinions and assumptions.

D) It is a situation in which opinions coalesce around a leader without individuals critically challenging and evaluating that leader's opinions and assumptions.

20) Li runs a firm that has diversified into different product lines and geographies. She should probably use a(n) _______ organizational structure. A) functional B) simple C) network D) M-form

D) M-form

81) ________ define appropriate employee attitudes and behaviors. A) Values B) Artifacts C) Appraisals D) Norms

D) Norms

68) Omni Consumer Products operates as a strategic business unit (SBU) under Total Inc., a home-furnishings manufacturer. From this information, it may be reasonable to infer that A) Omni Consumer Products does not have its own profit-and-loss responsibility. B) Omni Consumer Products is dependent on the other SBUs in Total Inc. C) Omni Consumer Products has a matrix organizational structure. D) Omni Consumer Products is led by its own CEO (or equivalent general manager).

D) Omni Consumer Products is led by its own CEO (or equivalent general manager).

30) Which of the following statements is true of strategy in an organization? A) Strategy implementation is considered unsuccessful if it requires changes within an organization. B) To implement a strategy successfully, an organization's structure must be rigid. C) Strategy implementation does not affect resource allocation and power distribution within an organization. D) Organizational structure must follow strategy in order for firms to achieve superior Performance.

D) Organizational structure must follow strategy in order for firms to achieve superior Performance.

86) What is most likely to happen if a firm relies too long on a competency without honing, refining, and upgrading as the firm and the environment change? A) The firm's original core competency can turn from a liability into an asset. B) The firm's organizational inertia can turn into its core rigidity. C) The firm's competitive parity can turn into its competitive advantage. D) The firm's culture can turn from a core competency into a core rigidity.

D) The firm's culture can turn from a core competency into a core rigidity.

50) Which of the following accurately describes an organic organization? A) an inflexible organization that fosters slow decision making and high employee motivation B) an inflexible organization that fosters fast decision making and high employee motivation C) a flexible organization that fosters slow decision making and high employee motivation D) a flexible organization that fosters fast decision making and high employee Motivation

D) a flexible organization that fosters fast decision making and high employee Motivation

64) Duke & Duke is the parent company of GetItDone.com and NownNever Inc. To cut costs, Duke & Duke integrated GetItDone.com's and NownNever Inc.'s management functions with Duke & Duke's management, while keeping other functions such as product development independent. Duke & Duke has encourage the senior teams at both GetItDone and NownNever to exploit the success of their existing products while exploring new products for the future. This scenario best exemplifies a(n) A) multidivisional structure. B) organic organization. C) simple structure. D) ambidextrous organization.

D) ambidextrous organization

25) Denise wants to clearly communicate and create a ________, a key input control, before her team tackles business activities. This way the team will be able to better allocate her firm's scarce resources in order to accomplish the tasks at hand. A) mission statement B) carrot-and-stick approach C) results-only-work-environment (ROWE) D) budget

D) budget

87) GM's insistence on sticking to a bureaucratic culture combined with its M-form structure and its subsequent failure to adapt to changing customer preferences for more fuel-efficient cars, produce higher quality, and create innovative designs best exemplifies A) decentralization. B) founder imprinting. C) groupthink. D) core rigidity.

D) core rigidity.

61) Which of the following features helps match a cost-leadership strategy to a functional structure? A) decentralization B) process and product innovations C) flexibility and mutual adjustment D) focus on economies of scale

D) focus on economies of scale

74) Which of the following organizational structures matches best with an international strategy? A) simple B) matrix C) multidivisional D) functional

D) functional

21) Bill Lewis is the CEO of Nordic Technologies Inc., a firm that offers 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. Bill should use a A) group of strategic business units that each have a geographic focus. B) matrix structure that combines functional departments with geographic divisions. C) simple structure. D) functional structure.

D) functional structure.

19) Paul runs an organization that implements a cost-leadership strategy. This business-level strategy supports both a ________ and ________ structure. A) matrix; organic B) M-form; vertical C) simple; organic D) functional; mechanistic

D) functional; mechanistic

56) Umbrella Corp is a notebook manufacturing company based in Ohio. Umbrella Corps' main market is Texas. It aims at providing its products at better prices than its competitors. Which of the following structures is Umbrella Corp likely to use if it has functional setup? A) organic B) simple C) matrix D) mechanistic

D) mechanistic

27) AT&T, IBM, Siemens, and Pfizer, have been shifting their innovation strategy toward a model designed to blend internal knowledge with external knowledge by sourcing strategic alliances. This example best represents the A) absorptive capacity model. B) not-invented-here syndrome. C) closed innovation framework. D) open innovation framework.

D) open innovation framework.

47) E Corp is a pharmaceutical company that has many breakthroughs in medicine to its credit. Unlike many other pharmaceutical companies, E Corp has a relaxed work environment where employees are free to discuss projects with each other. Employees are encouraged to choose the projects that interest them; communication between team members and their supervisors is open and easy. Because of the company's work culture, its employees feel motivated to work harder and display more entrepreneurial behaviors. In this scenario, E Corp Inc. is most likely an organization that is A) formalized. B) mechanistic. C) centralized. D) organic.

D) organic.

97) A company that is using extrinsic motivation as an output control mechanism will most likely A) organize training sessions for employees. B) cut budgets during recessions. C) implement a peer review system. D) threaten to lay off employees if they do not achieve targets.

D) threaten to lay off employees if they do not achieve targets.