Chapter 11-Combined
Exploitation
Applying current knowledge to enhance firm performance in the short term.
Which of the following is true of an M-form?
Each division operates independently.
scope of competition
The _______________ determines whether to pursue a specific narrow part of the market or to go after the broader market.
Economic
The shared value creation framework encourages managers to focus on which of the following needs?
When a firm covers a limited geographic area and is narrowly focused in terms of product/service offerings, a ______ structure is recommended.
functional
international global strategy's structure
functional
A(n) _____ is the business term for the population of customers for a business owner's products or services.
market
what do managers use the key levers of structure, culture, and control for?
motivate employees coordinate work
multidomestic global strategy's structure
multidivisional -geographic areas -decentralized decision making
Simple structures tend to be used by which group?
small companies with low organizational complexity
Employees learn about their firm's culture through ______.
socialization
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
Michael Porter identifies five different threats of competition for any business. Which of the following choices is not one of Michael Porter's five threats?
Investors
Which of the following is the advantage of knowing the magic number?
It helps in evaluating if the proposed business can deliver the desired return.
The framework for R&D that involves permeable firm boundaries and allows for sharing of ideas and inventions is known as ______.
Open innovation
_____ refers to the size of the market, whereas _____ refers to the geographic range covered by the market.
Scale;scope
specialization
The element of organizational structure that separate the tasks of one job from the tasks of another is known as
organization design
The structure, processes, and procedures of an organization are designed, put into place, reviewed, and reworked through a process known as
Happiness
Which of the following is NOT an example of an artifact of an organization's culture?
values
Which of the following is the most important yet least visible element of organization culture
gaining momentum
With the growing popularity of the Internet, the pay-as-you-go model is _______________.
Because executives make decisions about structure and strategy, ______.
a change in leadership often results in a change in culture
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 of the following is the most observable element of organizational culture?
artifacts
the degree to which decision making is concentrated in the top tiers of a firm is referred to as ______
centralization
Which type of structure is most commonly used by firms that pursue a transnational strategy?
global matrix structure
Which of the following is typical of mechanistic organizations?
high division of labor
what is the goal of an internal capital market?
to be more efficient at allocating capital through its budgeting process than what could be achieved in external capital markets
the performance of other firms in its industry
In order to determine if Home Depot has a competitive advantage, we must compare Home Depot's performance to _______________.
experience curve
The concept of a(n) _______________ attempts to combine both learning effects and process improvements.
vision
The element of a firm's strategy that summarizes the ultimate goals of the firm is known as the _______________.
Which of the following are effects that a strong organizational culture can have on employee behavior? Multiple select question. stronger commitment, engagement, and effort behavior aligns more closely with the firm's strategic goals increased demand for hierarchy and supervision more effective cooperation
stronger commitment, engagement, and effort behavior aligns more closely with the firm's strategic goals more effective cooperation
In order for firms to achieve superior performance, ______.
structure must follow strategy
a change in leadership often results in a change in culture
Because executives make decisions about structure and strategy, _______________.
Which of the following is true of an M-form? Multiple choice question. All levels of the firm are highly integrated. Each division operates independently. There is a flat organizational hierarchy. There is fluid movement between divisions.
Each division operates independently.
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.
True or false: Firms that pursue either related or unrelated diversification generally employ a multidivisional structure.
True
Which three key levers can managers use when shaping their organization into a firm with the highest level of competitive advantage?
culture control structure
The fourth step of a small business' strategic planning process involves:
determining the best strategic direction and strategy for the firm.
True or false: Organizational culture should never change.
false
which of the following types of control defines expected results in order to guide employee behavior?
output controls
What are two internal governance mechanisms put in place to align principal and agent incentives? (Check all that apply.) Multiple select question. reward systems transnational formation illicit negativism strategic control
reward systems strategic control
the functional areas present in a functional structure frequently correspond to
stages in the value chain
examples of artifacts of an organization's culture
what events are celebrated design and layout of physical space symbols
Which of the following are the four essential aspects of an organizational structure? (Check all that apply.)
centralization specialization hierarchy formalization
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
Companies pursuing business-level strategies like cost leadership, differentiation, and integration should organize using a _____ structure.
functional
Which of the following use codified policies and procedures to define and direct employee behavior? Multiple choice question. input controls output controls positive forces formed cultures
input controls
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) ______. Multiple choice question. holacracy organic organization mechanistic organization flat structure
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
when a firm's organizational structure is tall, the span of control is
narrow
key elements of organizational culture
norms values artifacts
Ravi works for a small company. The company owner makes all strategic decisions and manages the day-to-day operations. Ravi's company has a ______ structure. Multiple choice question. matrix multidivisional simple functional
simple
Leslie, Juan, and Felicia all work for the same company. Leslie pays the bills and invoices customers, Juan makes sure the company's computers and phones work, and Felicia interacts with customers and sellers of the firm's products. This is an example of ______. Multiple choice question. specialization formalization centralization inertia
specialization
The element of organizational structure that separates the tasks of one job from the tasks of another is known as ______. Multiple choice question. control formalization specialization centralization
specialization
the element of organizational structure that separates the tasks of one job from the tasks of another is known as
specialization
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.) Multiple select question. the orchestration of individual and team work efforts the number of competitors in the firm's industry the level of demand for the firm's products the distribution of resources
the orchestration of individual and team work efforts the distribution of resources
what is important is defined by ______; which attitudes and behavior are deemed appropriate are defined by _____
values; norms
true of cross-functional teams
work on a specific product or project meant to facilitate collaboration between departments
LO 11-4 / Compare and contrast mechanistic versus organic organizations.
■ Organic organizations are characterized by a low degree of specialization and formalization, a flat organizational structure, and decentralized decision making. ■ Mechanistic organizations are described by a high degree of specialization and formalization, and a tall hierarchy that relies on centralized decision making. ■ The comparative effectiveness of mechanistic versus organic organizational forms depends on the context.
related diversification unrelated diversification
Competitive M-form
two or more firms achieve the same performance results
Competitive parity occurs when _______________.
Which of the following is the second step of a small business' strategic planning process?
Considering the customers and the benefits to offer them
specialization
Leslie, Juan and Felica all work for the same company. Leslie pays the bills and invoices customers, Juan makes sure the company's culture computers and phones work, and Felica interacts with customers and sellers of the firm's products. This is an example of
Specialization
Leslie, Juan, and Felicia all work for the same company. Leslie pays the bills and invoices customers, Juan make sure the company's computers and phones work, and Felicia interacts with customers and sellers of the firm's products. This is an example of _______________.
Organizational Design
The process of creating, implementing, monitoring, and modifying the structure, processes, and procedures of an organization.
motivation that is driven by external factors, such as rewards or punishments, is called ____ motivation
extrinsic
mechanistic organizations
high degree of specialization and formalization tall hierarchy centralized decision making
strategy implementation is essentially
how a firm performs its work
When a company's culture is defined and shaped by the people who start it, it is known as founder ______. Multiple choice question. formalization incorporation ideology imprinting
imprinting
when a company's culture is defined and shaped by the people who start it, it is known as founder _____
imprinting
A firm's unwillingness to alter how things are currently done is known as ______. Multiple choice question. organic specialization insubordination inertia strategy implementation
inertia
Motivation that is driven by the employee's interest and the meaning of the work itself is called ______ motivation.
intrinsic
a disadvantage of a matrix organizational structure is that it
is hard to implement
Which of the following terms encompasses a firm's member's shared values and norms? Multiple choice question. organizational culture organizational appropriateness organizational structure organizational opportunity
organizational culture
Which of the following are benefits of a functional structure that also apply to the matrix structure? (Check all that apply.) Multiple select question. responsiveness domain expertise economies of scale decentralized focus
responsiveness decentralized focus
The functional areas present in a functional structure frequently correspond to which of the following?
stages in the value chain
The functional areas present in a functional structure frequently correspond to which of the following? Multiple choice question. company office locations stages in the value chain the customers being served employee salary averages
stages in the value chain
LO 11-1 / Define organizational design and list its three components.
■ Organizational design is the process of creating, implementing, monitoring, and modifying the structure, processes, and procedures of an organization. ■ The key components of organizational design are structure, culture, and control. ■ The goal is to design an organization that allows managers to effectively translate their chosen strategy into a realized one.
Organizational Structure
A key building block of organizational design that determines how the work efforts of individuals and teams are orchestrated and how resources are distributed.
Strategic Control-Andreward Systems
A key building block of organizational design; internal-governance mechanisms put in place to align the incentives of principals (shareholders) and agents (employees).
Founder Imprinting
A process by which the founder defines and shapes an organization's culture, which can persist for decades after his or her departure.
Less intense competition from imitators.
A producer of consumer headphones that successfully differentiates its products with a patented noise-canceling technology and celebrity endorsements will enjoy which of the following benefits?
a higher degree of specialization than smaller companies
Companies such as Apple and Comcast tend to have
artifacts
Corporate culture is expressed through ____, which are elements such as vocabulary and the type of clothing worn by employees
Artifacts
Corporate culture is expressed through _______________, which are elements such as vocabulary and the type of clothing worn by employees.
How does an organization's culture influence employee behavior? Multiple choice question. Negative culture determines the acceptable level of performance. Employee behavior is only influenced by negative culture. Weak culture affects the organic component of the organization. Employees are motivated by positive culture because it appeals to their higher ideals.
Employees are motivated by positive culture because it appeals to their higher ideals.
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.
Input Controls
Mechanisms in a strategic control-and-reward system that seek to define and direct employee behavior through a set of explicit, codified rules and standard operating procedures that are considered prior to the value-creating activities.
Which of the following are the two major classification systems that code industries?
NAICS and SIC
Which of the following statements about Michael Porter's Five-Forces Model of Industry Competition is not true?
Not sub/alt five rivals are direct
Which of the following is true of the introduction stage of a product?
Not(sales are almost always high 0
reporting structures are often unclear
One of the disadvantages of a matrix structure is that
Mechanistic Organization
Organizational form characterized by a high degree of specialization and formalization, and a tall hierarchy that relies on centralized decision making.
Organic Organization
Organizational form characterized by a low degree of specialization and formalization, a flat organizational structure, and decentralized decision making.
Simple Structure
Organizational structure in which the founders tend to make all the important strategic decisions as well as run the day-today operations.
Matrix Structure
Organizational structure that combines the functional structure with the M-form.
True or false: The functional structure results in difficulty communicating across departments.
True
any price they want
Under the wholesale model, RETAILERS (not the wholesalers) sell goods for _______________.
Which of the following are the key elements of organizational culture? (Check all that apply.)
artifacts values norms
A type of life cycle growth stage marked by a very rapid increase in sales in a relatively short time is called the _____.
boom
Which are examples of strategic control-and-reward systems? (Check all that apply.)
organizational culture input controls output controls
concentrate decision-making at the top of the organization
When supporting a related-diversification strategy with the M-form organizational structure, managers typically _______________.
pay-as-you-go
When you join the vehicle-sharing company Zoooomm, you are allowed to use a motorized scooter whenever you like, though you do not have to own the machine. You have to pay by the hours of usage. Zoooomm operates on a(n) _______________ model.
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
firms that pursue a ____ strategy tend to use a global matrix structure
transnational
to control costs while offering products or services at a higher perceived value, thereby creating a competitive advantage
What is the goal of differentiation strategy
self-interest
Which of the following has NOT been found to be an ethical norm in business?
if there are several levels of management between the lowest employee and the CEO, the firm has a _____ structure
tall
Strategy implementation is essentially __.
how a firm performs its work
True or false: Organizational culture should never change. True false question. True False
False
use a functional structure that has mechanistic organizational elements
Which of the following must a firm do in order to effectively implement a cost leadership strategy
it is often necessary to achieve consistent and predictable results
Which of the following statements about formalization is true
A Matrix Structure
Which of the following structures is a combination of the multidivisional structure and the functional structure?
Exploration
Which of the following terms describe searching for new knowledge that may enhance a firm's future performance?
exploration
Which of the following terms describes searching for new knowledge that may enhance a firms future performance
ambidextrous organization
Which type of organization attempts to balance and harness different activities in trade-off situations
a functional structure
Which type of structure uses domain expertise to separate employees into specific areas based on their purpose, such as sales and human resources
ambidextarity
a firm's ability to address trade-offs not only at one point but also over time. it encourages managers to balance exploitation with exploration
Which of the following are benefits of a functional structure that also apply to the matrix structure? (Check all that apply.)
decentralized focus responsiveness
A firm would use input controls if it wanted to ______. Multiple choice question. guide employee behavior by defining expected results, but leave the means to those results open to individual employees, groups, or SBUs understand and explain the role of functional units in the organizational structure formalize different pay policies between levels of employees in the national and international markets define and direct employee behavior through a set of explicit, codified rules and standard operating procedures
define and direct employee behavior through a set of explicit, codified rules and standard operating procedures
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
the inability to effectively deal with higher levels of ____, a common result of growth, is a weakness of the functional structure
diversification
the organizational structure element that deals with the degree to which employees are guided by specific, codified rules and processes is know as _________
formalization
Steve Jobs defined and shaped Apple's culture, and his influence continued even after he left the company. This is known as ______. Multiple choice question. formalization founder imprinting matrix structure groupthink
founder imprinting
Firms that follow a single-business or dominant-business strategy at the corporate level generally employ a ______ structure.
functional
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 offerings, a ____ structure is recommended
functional
Effective strategy implementation, in general, will help a firm __.
gain and sustain competitive advantage
transnational global strategy's structure
global matrix -balance of centralized and decentralized -additional layer of hierarchy to coordinate with
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 are characteristics of simple organizational structures? (Check all that apply.) Multiple select question. low formalization high degree of specialization flat hierarchies single leader makes all important decisions
low formalization flat hierarchies single leader makes all important decisions
Which of the following are characteristics of simple organizational structures? (Check all that apply.
low formalization single leader makes all important decisions flat hierarchies
why does strategy implementation frequently fall?
managers cannot make the needed adjustments because of how implementation affects the firm's resource allocation and power distribution
What do managers use the key levers of structure, culture, and control for? (Check all that apply.)
to motivate employees to coordinate work
A _____ displays characteristics related to the nature of a product or service itself.
value benefit
Which of the following is the most important yet least visible element of organizational culture?
values
Gross profit is defined as:
what is left after deducting the cost of goods sold.
LO 11-3 / Define organizational structure and describe its four elements.
■ An organizational structure determines how firms orchestrate employees' work efforts and distribute resources. It defines how firms divide and integrate tasks, delineates the reporting relationships up and down the hierarchy, defines formal communication channels, and prescribes how employees coordinate work efforts. ■ The four building blocks of an organizational structure are specialization, formalization, centralization, and hierarchy (see Exhibit 11.3 ).
LO 11-2 / Explain how organizational inertia can lead established firms to failure.
■ Organizational inertia can lead to the failure of established firms when a tightly coupled system of strategy and structure experiences internal or external shifts. ■ Firm failure happens through a dynamic, four-step process (see Exhibit 11.2 ).
LO 11-7 / Compare and contrast different strategic control-and-reward systems.
■ Strategic control-and-reward systems are internal governance mechanisms put in place to align the incentives of principals (shareholders) and agents (employees). ■ Strategic control-and-reward systems allow managers to specify goals, measure progress, and provide performance feedback. ■ In addition to the balanced-scorecard framework, managers can use organizational culture, input controls, and output controls as part of the firm's strategic control-and-reward systems. ■ Input controls define and direct employee behavior through explicit and codified rules and standard operating procedures. ■ Output controls guide employee behavior by defining expected results, but leave the means to those results open to individual employees, groups, or SBUs.
Core Rigidity
A former core competency that turned into a liability because the firm has failed to hone, refine, and upgrade the competency as the environment changed.
_____ is the idea and actions that explain how a firm will make its profits.
Strategy
Multi-Divisional Structure (M-form)
Organizational structure that consists of several distinct strategic business units (SBUs), each with its own profit-and-loss (P&L) responsibility.
LO 11-6 / Describe the elements of organizational culture, and explain where organizational cultures can come from and how they can be changed.
■ Organizational culture describes the collectively shared values and norms of its members. ■ Values define what is considered important, and norms define appropriate employee attitudes and behaviors. ■ Corporate culture finds its expression in artifacts, which are observable expressions of an organization's culture.
stay the same
Economies of scale present an opportunity to increase profits because as the number of units within the relevant range increases, fixed costs _______________.
financial performance
Economist Michael Porter and many others argue that the value of public stock companies is to narrowly defined in terms of _______________, leading to scandals and economic crises.
Which of the following is a value benefit
NOT cost savings
Which of the following is a tactical action?
New distribution channels
A _____ is a narrowly defined segment of the population that is likely to share interests or concerns.
Niche market
Which of the following is a strategic action?
Not increase marketing efforts
Most small businesses are more _____ than _____.
Not(profit-directed;inno/I It) cost-directed
improve the firm's strategic position
Positive adjustments in product features, customer service, and complements may enable managers to _______________.
Exlploration
Searching for new knowledge that may enhance future performance.
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
If a company fails to change its culture as the firm and environment change, the company's culture can turn into a core ______.
rigidity
If a company fails to change its culture as the firm and environment change, the company's culture can turn into a core ______. Multiple choice question. asset rigidity competency imprint
rigidity
if a company fails to change its culture as the firm and environment change, the company's culture can turn into a core
rigidity
aspirational vision
A(n) _______________ can help employees feel that they are doing something worthwhile and are part of something important and meaningful.
Differentiation
A(n) _______________ strategy may fail when the focus of the competition shifts to price rather than unique product features.
Which of the following statements is not true of degree of similarity?
Imitation minus one degree of similarity is called incremental innovation.
organizational design
In the _______________ step of the strategy implementation phase of the AFI strategy framework, managers would examine how the firm should be structured in order to implement the desired strategy.
"How do external forces affect our strategy and competitive advantage?"
In the external analysis phase of the AFI strategy framework, managers should ask, _______________
organizational design
The structure, processes, and procedures of an organization are designed, put into place, reviewed, and reworked three process known as _______________.
Which of the following statements regarding input controls is true? Multiple choice question. They are designed to be considered before employees make any business decisions. They are created by employees and then go up the chain of command. They offer flexibility so that employees can make immediate changes if the situation calls for them. They are designed to be considered after value-creating activities have been implemented and results evaluated.
They are designed to be considered before employees make any business decisions.
Which of the following explains how values and norms act as a control mechanism?
They help employees address unpredictable problems.
Which of the following is an advantage of picking customer-desired benefits that a business owner's competitors do not offer?
They make the firm stand out from the competition.
How high should our profit be?
To formulate an appropriate business-level strategy, managers must answer the "who-what-why-and-how" questions of competition. Which of the following would NOT be the appropriate question to answer?
Their actions that are costly, long-term oriented, and difficult to reverse.
What are strategic commitments?
Logos
Which of the following is NOT a key element of organizational culture?
a leadership group with relevant prior industry experience
Which of the following is NOT an element of a good strategy according to the AFI framework?
A processed food manufacturer distributes frozen vegetables tainted with E. coli.
Which of the following is NOT an example of a moral hazard?
Value
Which of the following is NOT one of the variables managers primarily manipulate in order to answer the question, "How should we compete?"
Groupthink
Which of the following is a situation in which individuals follow a leader without challenging or critically evaluating the leader's ideas?
Tesla generated 500,000 preorders for an unseen model.
Which of the following is the best indicator that Tesla's strategy is working as intended?
the organizational structure at Gore, in which everyone is encouraged to speak to anyone they wish to within the organization, is called ____ organization form
boundaryless or lattice
How do founders leave their imprint on their organizations? Multiple choice question. by manipulating existing culture by formulating growth strategies by taking their vision and making it into reality by entering physical elements into the design
by taking their vision and making it into reality
the four essential aspects of an organizational structure
centralization hierarchy specialization formalization
Simple structures tend to be used by which group? Multiple choice question. large companies with high organizational complexity large companies with low organizational complexity small companies with low organizational complexity small companies with high organizational complexity
small companies with low organizational complexity
business ethics
The code of professional conduct based on societal norms and expectations is known as _______________.
Which of the following are examples of input controls? (Check all that apply.)
budgets standard operating procedures
The primary way cultural change is enacted in a company is through ______.
new leadership
single business dominant business
Functional Structure
Information asymmetry
_______________ is when agents are better informed than principals.
determines the allocations of resources and the organization and operations of works
a firm's organizational struct
Characteristics of simple organizational structures
low formalization decentralized decision making flat hierarchies
Value benefits are important because:
they lead to higher prices.
True or false: Firms that are supporting an unrelated-diversification strategy through the use of the M-form structure should decentralize decision making.
true
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
that create more value for consumers than competitors' offerings
A firm can gain a competitive advantage by providing goods and services _______________.
Output Controls
Mechanisms in a strategic control-and-reward system that seek to guide employee behavior by defining expected results (outputs), but leave the means to those results open to individual employees, groups, or SBUs.
adhering to core organizational values
Merck's choice to pull the drug Vioxx off the market in 2004 is an example of _______________?
_____ is a type of life cycle stage following a boom in which there is a rapid decrease in the number of firms in an industry.
Shake-out
Strategy Implementation
The part of the strategic management process that concerns the organization, coordination, and integration of how work gets done. It is key to gaining and sustaining competitive advantage.
Which of the following structures is a combination of the multidivisional structure and the functional structure?
a matrix structure
Amy plans to open a laundromat with a gym. She got the idea from the laundromat with a bar and game rooms, which she visits regularly. She wants to test her idea by starting out in a small space with the focus on the laundromat and a small space allocated for gym equipments. Amy's idea is an example of _____.
an incremental innovation
Which type of organization has a flat organizational structure and employs decentralized decision making?
an organic organization
Retrenchment is:
an organizational life cycle stage in which established firms must find new approaches to improve the business.
The framework for R&D that involves permeable firm boundaries and allows for sharing of ideas and inventions is known as ______. Multiple choice question. open innovation network organizational structure organizational culture closed innovation
open innovation
Which of the following is typical of an organic organization?
flexible division of labor
a matrix structure
Which of the following structures is a combination of the multidivisional structure and the functional structure
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
A perceptual map is:
graphic display which positions products according to their scores on important strategic dimensions.
define and direct employees behavior through a set of explicit, codified rules and standard operating procedures
A firm would use input controls if it wanted to
a diagnosis of the competitive advantage
A good strategy consists of three elements. The first element is accomplished through analysis of the firm's external and internal environments. We also call this _______________.
Groupthink
A situation in which opinions coalesce around a leader without individuals critically evaluating and challenging that leader's opinions and assumptions.
Which of the following terms encompasses a firm's member's shared values and norms?
organizational culture
ineffective strategy implementation
What is the main reason why boards of directors fire CEO's
Which of the following terms describes applying current knowledge to enhance firm performance in the short term?
exploitation
agency theory
The idea that a corporation is simply a collection of legal contracts is known as _______________.
Mechanistic organizations tend to have ______. Multiple choice question. fluid environments codified operating procedures decentralized decision making flat organizational hierarchy
codified operating procedures
The inability to effectively deal with higher levels of ______, a common result of growth, is a weakness of the functional structure.
diversification
Which of the following tends to directly improve employee conformity and performance?
peer control
Which of the following is true of a blue ocean strategy?
It results in a new product or service.
Product-Oriented
What type of vision is most likely to fail?
Moral Hazard
A situation in which one party has an incentive to shirk their responsibility because the costs will fall to the other party is known as _______________.
Through a bottom-up initiative
How did Zappos formulate its list of 10 core values?
through a bottom-up initiative
How did Zappos formulate its list of ten core values
is difficult to implement
A characteristic of a matrix organization structure is that it
Charge a higher price than the cost leader.
A firm pursuing a blue ocean strategy can increase its profit margins by implementing which of the following pricing options?
cost drivers
A firm that hopes to achieve a competitive advantage by maintaining an efficient supply chain and taking advantage of economies of scale and a well-trained staff is focusing on _______________.
Bundling
A firm uses the _______________ business model when it sells a set of products that have different levels of demand for a price less than their total combined prices.
multidomestic
A firm using a strategy is likely to have a multidivisional structure with the multiple divisions representing different geographic regions and decentralized decision making
inertia
A firm's unwillingness to alter how things are currently done is known as
highly centralized
A top-down strategic plan generally takes place in which type of organization
highly centralized
A top-down strategic plan generally takes place in which type of organization?
_____ is a strategic action.
Acquiring a competitor
Which of the following types of value benefits is most likely to be offered by a product if it helps the community, a group, the environment, or the world?
Altruism
Formalization
An element of organizational structure that captures the extent to which employee behavior is steered by explicit and codified rules and procedures.
Specialization
An element of organizational structure that describes the degree to which a task is divided into separate jobs (i.e., the division of labor).
Hierarchy
An element of organizational structure that determines the formal, position-based reporting lines and thus stipulates who reports to whom.
Centralization
An element of organizational structure that refers to the degree to which decision making is concentrated at the top of the organization.
What is important is defined by ; which attitudes and behavior are deemed appropriate are defined by . Listen to the complete question
Blank 1: values Blank 2: norms
In the goal step of the strategic planning process, the key is to:
Bring together the decisions that underlie the business plan
How should we compete?
Business-level strategy addresses which overarching question?
_____ is the particular way a firm implements customer benefits that keeps the firm ahead of other firms in the market.
Competitive advantage
How does an organization's culture influence employee behavior?
Employees are motivated by positive culture because it appeals to their higher ideals.
the leaders of the organization also adhere to the values
Employees tend to adhere to organizational core values when _______________.
In the context of entry wedges, _____ occurs because government agencies, government-sponsored commercial contracts, and many big businesses have policies that provide for quotas for buying from small businesses.
Favored purchasing
a transnational
Firms that pursue _______________ strategy tend to use a global matrix structure.
Which of the following is a generic strategy that targets a portion of the market, called a segment or niche?
Focus strategy
_____ are classic strategies for businesses of all types and they include differentiation, cost, and focus.
Generic strategies
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.
by taking their vision and making it into reality
How do founders leave their imprint on their organizations
By taking their vision and making it into reality.
How do founders leave their imprint on their organizations?
tall
If there are several levels of management between the lowest employee and the CEO, the firm has a _____ structure
board of directors
In a public stock company, the centerpiece of corporate governance is the _______________.
vision
In crafting a strategic management plan, leaders must first determine the company's long-term objective. This means leaders must first define the organization's _______________.
_____ is the general name for the line of product or service being sold, or the firms in that line of business.
Industry
Which of the following statements about industry, industry dynamics, and industry lifecycle is true?
Industry refers not only to your product or service, but also to all your competitors selling that product or service.
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 about closed innovation are true? (Check all that apply.)
It is time-consuming. It is a costly approach.
Which of the following statements is true regarding the entry wedge of supply shortage?
It occurs when a new product is in demand.
As a firm gets more experience, it can often work with fewer mistakes and greater efficiencies, thereby lowering costs. This leads to the cost benefit of _____.
Learning
In an imitative strategy, an entrepreneur:
More or less what others are doing
Functional Structure
Organizational structure that groups employees into distinct functional areas based on domain expertise.
red
Products in the affordable "business-casual" clothing market have largely become commoditized, and most retailers have begun to compete mainly on price rather than product features. In this environment, it is impossible for one retailer to gain market share without another losing it. This is an example of a(n) _______________ ocean.
Externalities
Social consequences of business activities, including pollution, energy loss, and dangerous accidents, are known as _______________.
founder imprinting
Steve Jobs define and shaped Apples culture, and his influence continued even after he left the company. This is known as
It should use the shared value creation framework.
Svanhildur's company is committed to corporate social responsibility but also understands that growth and profit are imperative for survival. What should Svanhildur's company do to achieve this balance?
Organizational Culture
The collectively shared values and norms of an organization's members; a key building block of organizational design.
formalization
The foamy mug, a chain of coffee shops, ensures consistent quality and service in each of its cafes by using policy and procedure manuals that explicitly describe employees tasks. The foamy mug is characterized by a high degree of
stages in the value chain
The functional areas present in a functional structure frequently correspond to which of the following
exceed the traditional imperative to increase profits
The idea of corporate social responsibility (CSR) suggests that a firm's obligation should _______________.
Corporate Governance
The mechanism used to guide a company toward meeting and strategic goals within the bounds of the law is known as
bring down
The minimum efficient scale indicates the level of output needed to _______________ the cost per unit as much as possible.
Span of Control
The number of employees who directly report to a manager.
boundaryless
The organizational structure at Gore, in which everyone is encouraged to speak to anyone they wish to within the organization, is called a(n) _______________ organizational form.
strategy implementation
The process of the strategic management process that concerns the organization, coordination, and integration of work processes is
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 statements about open innovation is true? Multiple choice question. Ideas and inventions become the property of the firm funding the venture. The sharing of ideas and inventions from within the firm and from outside sources can go both ways. External R&D always produces more interesting ideas than internal R&D. It is time-consuming and often unsuccessful.
The sharing of ideas and inventions from within the firm and from outside sources can go both ways.
Multi-divisional
The type of structure that is used by experienced firms and consists of distinct, essentially independent strategic business units is the _______________ structure.
Which two of the following accurately describe mechanistic organizations? (Check all that apply.)
They are highly specialized. They have a tall hierarchy.
Which two of the following accurately describe mechanistic organizations? (Check all that apply.) Multiple select question. They are highly specialized. They rely on decentralized decision making. They have a low level of specialization. They have a tall hierarchy.
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.
Motivation that is driven by external factors, such as rewards or punishments, is called ______ motivation.
extrinsic
the trade-offs required by strategic positioning
Walmart and Nordstrom maintain very different strategic positions, one based on cost-leadership and the other based on differentiation through superior customer service. This is an example of _______________.
To control costs while offering products or services at a higher perceived value, thereby creating a competitive advantage.
What is the goal of a differentiation strategy?
to enable managers to translate their chosen strategy into a realized one
What is the goal of organizational design
strategy follows structure
When "____" managers limit themselves to strategies that maintain the status quo
strategy follows structure
When "_______________, " managers limit themselves to strategies that maintain the status quo.
functional
When a firm covers a limited geographic area and is narrowly focused in terms of product/service offerings, a(n) _______________ structure is recommended.
strong
When a firm's employees have internalized norms and share the same firm's core values, the firm is said to have a(n) _______________ culture.
many employees
When the span of control within an organization is wide, one manager supervises _______________.
The orchestration of the work efforts of individuals and teams.
Which of the following activities would be defined by a firm's organizational structure?
They are meant to facilitate collaboration between departments.
Which of the following are true of cross-functional teams?
Amazon sold e-books for its e-reader device at a loss to promote sales of the e-reader.
Which of the following describes how Amazon disrupted the traditional wholesale model for book publishers?
a firm's organizational structure
Which of the following determines the allocation of resources and the organization and operations of workers
A firm's organizational structure
Which of the following determines the allocation of resources and the organization and operations of workers?
Zipcar-by-the-hour
Which of the following industries does NOT use a subscription model?
Centralized Decision-Making
Which of the following is NOT a characteristic of a simple organizational structures?
each division operate independently
Which of the following is true of an M-form
Which type of structure uses domain expertise to separate employees into specific areas based on their purpose, such as sales and human resources? Multiple choice question. an operational structure an organic structure a functional structure a mechanistic structure
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? Multiple choice question. a matrix structure a universal structure a simple structure a waterfall 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
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
How do founders leave their imprint on their organizations? Multiple choice question. by formulating growth strategies by manipulating existing culture by entering physical elements into the design by taking their vision and making it into reality
by taking their vision and making it into realiy
reasons why it is difficult to imitate the cultures of successful firms
casual ambiguity social complexity
During the 20th century, companies tended to carry out R&D internally, an approach known as ______.
closed innovation
When supporting a related-diversification strategy with the M-form organizational structure, managers typically ______.
concentrate decision making at the top of the organization
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 is true of an m-form?
each division operates independently
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 are true of the network structure
enable firms to access communities of practice supported by policies and procedures that are uniform company-wide
An opportunity that makes it possible for a new business to gain a foothold in a market is referred to as a(n) _____.
entry wedge
which of the following terms describes the usage of 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
terms describing searching for new knowledge that may enhance a firm's future performance
exploration
frequently associated with organic organizations
greater employee satisfaction swifter decision making greater employee creativity
a situation in which individuals follow a leader without challenging or critically evaluating the leader's ideas
groupthink
an example of how values and norms provide control
helping employees address unpredictable problems
a firm's unwillingness to alter how things are currently done is known as
inertia
mcdonald's reliance on detailed instructions to ensure consistent quality and service worldwide is an example of standard operating procedures as ____ control
input
Which of the following use codified policies and procedures to define and direct employee behavior?
input control
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
When corporate headquarters efficiently allocates capital to individual strategic business units, it acts as a(n) _____.
internal capital market
The life cycle stage in which a product or service is being invented is known as the _____.
introduction stage
A characteristic of a matrix organizational structure is that it ______.
is difficult to implement
A firm that is organized according to SBUs but also is decentralized in that different geographic locations are fully functional is likely organized in the ______ structure. Multiple choice question. multidivisional matrix simple functional
matrix
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
global standardization strategy's structure
multidivisional -product divisions -centralized decision making
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
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 ______. Multiple choice question. founder imprinting organizational culture internal capital market corporate strategy
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
The structure, processes, and procedures of an organization are designed, put into place, reviewed, and reworked through a process known as ______. Multiple choice question. strategy formulation organizational design diversification holacracy
organizational design
the structure, processes, and procedures of an organization are designed, put into place, reviewed, and reworked through a process known as
organizational design
Graciela's used to be the industry leader in restaurant supplies, but over the years competition grew and the company's market share declined. Graciela's has launched several marketing campaigns and introduced new products and services. However not much else in the company has changed, and it still relies on the same team of managers. Graciela's is experiencing ______. Multiple choice question. competitive advantage structure following strategy a flexible organizational structure organizational inertia
organizational inertia
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
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 ______. Multiple choice question. organizational structure strategy implementation strategic inertia competitive advantage
organizational structure
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. Multiple choice question. output price input sales
output
Which of the following types of control defines expected results in order to guide employee behavior?
output controls
Which of the following types of control defines expected results in order to guide employee behavior? Multiple choice question. output controls throughput controls upstream controls input controls
output controls
Which are examples of strategic control-and-reward systems? (Check all that apply.) Multiple select question. managerial hubris reward point systems for customers output controls input controls organizational culture
output controls input controls organizational culture
Imitation plus one degree of similarity results in:
patterning a business on existing firms.
Which of the following are examples of artifacts of an organization's culture? (Check all that apply.)
private offices formal vocabulary dress code
Which of the following is true of the entry wedge of second sourcing?
provides a competitive pressure to ensure that suppliers keep providing the best service and prices.
The first step of the strategic planning process for a small business is:
reviewing and confirming the goals that define the firm.
What are two internal governance mechanisms put in place to align principal and agent incentives? (Check all that apply.)
reward systems strategic control
What is the best way for organizations to overcome the lack of collaboration across departments in a functional structure?
set up cross-functional teams
what are two internal governance mechanisms put in place to align principal and agent incentives?
strategic control reward systems
A system that allows managers to specify goals, measure progress, and provide performance feedback by ensuring that the incentives of shareholders and employees are aligned is called a ______ system. Multiple choice question. diversified founder-imprinting strategic control-and-reward strategy-implementation
strategic control-and-reward
a matrix structure is intended to combine the benefits of which two structure types?
the functional structure the m-form
Which of the following are factors that influenced the shift from closed innovation to open innovation? (Check all that apply.) Multiple select question. the lack of innovative ideas within companies the increasing supply and mobility of skilled workers the growth of venture capital the reduced availability of global external suppliers
the increasing supply and mobility of skilled workers the growth of venture capital
Which of the following structures is divided into several distinct business units, each of which has its own profit-and-loss center? Multiple choice question. the multi-divisional structure the formalized structure the integrated structure the functional structure
the multi-divisional structure
What is the goal of an internal capital market?
to allocate capital more efficiently than would happen in an external capital market
a goal of a differentiation strategy
to control costs while offering products or services at a higher perceived value, thereby creating a competitive advantage
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 is the goal of organizational design? Multiple choice question. to ensure that each employee is placed on a specific level within the firm's hierarchy to reduce competitive advantage with other firms to enable managers to translate their chosen strategy into a realized one to eliminate confusion about which job covers particular tasks
to enable managers to translate their chosen strategy into a realized one
LO 11-5 / Describe different organizational structures and match them with appropriate strategies.
■ To gain and sustain competitive advantage, not only must structure follow strategy, but also the chosen organizational form must match the firm's business strategy. ■ The strategy-structure relationship is dynamic, changing in a predictable pattern—from simple to functional structure, then to multidivisional (M-form) and matrix structure—as firms grow in size and complexity. ■ In a simple structure, the founder tends to make all the important strategic decisions as well as run the day-to-day operations. ■ A functional structure groups employees into distinct functional areas based on domain expertise. Its different variations are matched with different business strategies: cost leadership, differentiation, and integration (see Exhibit 11.6 ). ■ The multidivisional (M-form) structure consists of several distinct SBUs, each with its own profit-and-loss responsibility. Each SBU operates more or less independently from one another, led by a CEO responsible for the business strategy of the unit and its day-to-day operations (see Exhibit 11.7 ). ■ The matrix structure is a mixture of two organizational forms: the M-form and the functional structure (see Exhibit 11.9 ). ■ Exhibits 11.8 and 11.10 show how best to match different corporate and global strategies with respective organizational structures.
