Smartbook Chapter 11

How does an organization's culture influence employee behavior?

Employees are motivated by positive culture because it appeals to their higher ideals.

Which of the following is a true statement about the building blocks of an organizational structure?

Hierarchy is one of the building blocks of an organizational structure.

Which of the following statements about open innovation is true?

The sharing of ideas and inventions from within the firm and from outside sources can go both ways.

Which of the following explains how values and norms act as a control mechanism?

They help employees address unpredictable problems.

True or false: Firms that pursue either related or unrelated diversification generally employ a multidivisional structure.

True

Which type of organization has a flat organizational structure and employs decentralized decision making?

an organic organization

Which three key levers can managers use when shaping their organization into a firm with the highest level of competitive advantage?

culture control structure

A firm would use input controls if it wanted to ______.

define and direct employee behavior through a set of explicit, codified rules and standard operating procedures

Which type of structure is most commonly used by firms that pursue a transnational strategy?

global matrix structure

The reliance of McDonald's on detailed instructions to ensure consistent quality and service worldwide is an example of standard operating procedures as ______.

input controls

Which are examples of strategic control-and-reward systems? (Check all that apply.)

organizational culture input controls output controls

When firms tie employee compensation and rewards to predetermined goals, such as a specific sales target, but do not specify the means to those results, they are using ______ controls.

output

Which of the following types of control defines expected results in order to guide employee behavior?

output controls

Which of the following tends to directly improve employee conformity and performance?

peer control

Which of the following are examples of artifacts of an organization's culture? (Check all that apply.)

private offices formal vocabulary dress code

What are two internal governance mechanisms put in place to align principal and agent incentives? (Check all that apply.)

reward systems strategic control

If a company fails to change its culture as the firm and environment change, the company's culture can turn into a core ______.

rigidity

Employees learn about their firm's culture through ______.

socialization

When a firm's employees have internalized norms and share the firm's core values, the firm is said to have a(n) ______ culture.

strong

Which of the following structures is divided into several distinct business units, each of which has its own profit-and-loss center?

the multi-divisional structure

A firm's organizational structure directly determines which of the following aspects of the firm? (Check all that apply.)

the orchestration of individual and team work efforts the distribution of resources

What is the goal of an internal capital market?

to allocate capital more efficiently than would happen in an external capital market

What is the best way for organizations to overcome the lack of collaboration across departments in a functional structure?

set up cross-functional teams

Which of the following is true of an M-form?

Each division operates independently.

True or false: The functional structure results in difficulty communicating across departments.

True

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

low formalization single leader makes all important decisions flat hierarchies

Hiroshi is considering a job offer from a large pharmaceutical company. At his interview he asks who his boss would be and how jobs and teams are assigned. Hiroshi is asking about the company's ______.

organizational structure

In order for firms to achieve superior performance, ______.

structure must follow strategy

During the 20th century, companies tended to carry out R&D internally, an approach known as ______.

closed innovation

The inability to effectively deal with higher levels of ______, a common result of growth, is a weakness of the functional structure.

diversification

The functional areas present in a functional structure frequently correspond to which of the following?

stages in the value chain

What must a firm that pursues a cost-leadership strategy do in order to nurture and constantly upgrade core competencies in manufacturing and logistics?

use a functional structure that has mechanistic organizational elements

Which of the following is the most important yet least visible element of organizational culture?

values

Which of the following statements about closed innovation are true? (Check all that apply.)

It is time-consuming. It is a costly approach.

Simple structures tend to be used by which group?

small companies with low organizational complexity

The framework for R&D that involves permeable firm boundaries and allows for sharing of ideas and inventions is known as ______.

Open innovation

Which of the following is typical of mechanistic organizations?

high division of labor

Strategy implementation is essentially __.

how a firm performs its work

True or false: Firms that are supporting an unrelated-diversification strategy through the use of the M-form structure should decentralize decision making.

true

Teju, like his colleagues, wears jeans and t-shirts to work, and he has a standing desk in an open floor plan. When he and his team reach a project milestone, they celebrate by going to a local karaoke bar. These are all examples of the firm's ______.

artifacts

Which of the following is the most observable element of organizational culture?

artifacts

Which of the following are the key elements of organizational culture? (Check all that apply.)

artifacts values norms

Match the global strategy (on the left) with the appropriate structure (on the right).

International = functional Multidomestic= multidivisional with divisions according to geographic areas; decentralized decision making Global Standardization =multidivisional with divisions according to products; centralized decision making Transnational= global matrix; balance of centralized and decentralized decision making, two layers of hierarchy (geographic and product)

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

It enables firms to access communities of practice. It should be supported by uniform, company-wide policies and procedures.

Why does management frequently fail at strategy implementation?

Managers cannot make needed adjustments because of their effect on the firm's resource allocation and power distribution.

Which two of the following accurately describe mechanistic organizations? (Check all that apply.)

They are highly specialized. They have a tall hierarchy.

Which of the following are true of cross-functional teams? (Check all that apply.)

They are meant to facilitate collaboration between departments. They work on a specific product or project.

Because executives make decisions about structure and strategy, ______.

a change in leadership often results in a change in culture

Which type of structure uses domain expertise to separate employees into specific areas based on their purpose, such as sales and human resources?

a functional structure

Which two of the following accurately describe organic organizations? (Check all that apply.)

a low degree of specialization a flat organizational structure

Which of the following structures is a combination of the multidivisional structure and the functional structure?

a matrix structure

Which of the following technologies enables a firm to connect its centers of excellence independent of where they are located in the world?

a network structure

Firms that pursue ______ strategy tend to use a global matrix structure.

a transnational

Which of the following are effects that a strong organizational culture can have on employee behavior?

behavior aligns more closely with the firm's strategic goals stronger commitment, engagement, and effort more effective cooperation

Which of the following are examples of input controls? (Check all that apply.)

budgets standard operating procedures

Which of the following are the four essential aspects of an organizational structure? (Check all that apply.)

centralization specialization hierarchy formalization

Which of the following are benefits of a functional structure that also apply to the matrix structure? (Check all that apply.)

decentralized focus responsiveness

Firms that follow a single-business or dominant-business strategy at the corporate level generally employ a ______ structure.

functional

When a firm covers a limited geographic area and is narrowly focused in terms of product/service offerings, a ______ structure is recommended.

functional

Effective strategy implementation, in general, will help a firm __.

gain and sustain competitive advantage

A firm using a(n) ______ strategy is likely to have a multidivisional structure with the multiple divisions representing different products and centralized decision making.

global standardization

Which of the following use codified policies and procedures to define and direct employee behavior?

input control

When corporate headquarters efficiently allocates capital to individual strategic business units, it acts as a(n) _____.

internal capital market

Motivation that is driven by the employee's interest and the meaning of the work itself is called ______ motivation.

intrinsic

A characteristic of a matrix organizational structure is that it ______.

is difficult to implement

Disadvantages of the ______ structure include organizational complexity, increased administrative costs, slow decision making, and difficulty in implementation.

matrix

Samira works for a company with a strict top-down structure. Her daily tasks must conform carefully to written guidelines and rules, and she has very specific job responsibilities. Samira works for a(n) ______.

mechanistic organization

A firm using a(n) ______ strategy is likely to have a multidivisional structure with the multiple divisions representing different geographic areas and decentralized decision making.

multidomestic

The primary way cultural change is enacted in a company is through ______.

new leadership

Taki works for a start-up company that is highly centralized and its employees are not allowed to wear headphones while working. However, the company offers a flexible work schedule, free childcare, and free yoga classes. These rules and perks describe the company's ______.

organizational culture

Which of the following terms encompasses a firm's member's shared values and norms?

organizational culture

The structure, processes, and procedures of an organization are designed, put into place, reviewed, and reworked through a process known as ______.

organizational design

What is the goal of a differentiation strategy?

to create a competitive advantage by offering products or services at a higher perceived value, while keeping costs under control

What is the goal of organizational design?

to enable managers to translate their chosen strategy into a realized one

What do managers use the key levers of structure, culture, and control for? (Check all that apply.)

to motivate employees to coordinate work

When supporting a related-diversification strategy with the M-form organizational structure, managers typically ______.

concentrate decision making at the top of the organization

Which of the following terms describes applying current knowledge to enhance firm performance in the short term?

exploitation

Which of the following terms describes searching for new knowledge that may enhance a firm's future performance?

exploration

Motivation that is driven by external factors, such as rewards or punishments, is called ______ motivation.

extrinsic

True or false: Organizational culture should never change.

false

Which of the following is typical of an organic organization?

flexible division of labor

Companies pursuing business-level strategies like cost leadership, differentiation, and integration should organize using a _____ structure.

functional