Chapter 10

16. The two best signs of good strategy execution are whether a company is meeting or beating its performance targets and whether it is performing value chain activities in a manner that is conducive to companywide operating excellence. A. True B. False

A. True

24. The thesis underlying centralized structures is that strict enforcement of detailed procedures backed by rigorous managerial oversight is the most reliable way to keep the daily execution of strategy on track. A. True B. False

A. True

15. Which of the following is a basic tenet of decentralized organizational structures? A. Those with decision-making authority should be trained to exercise good judgment. B. Strong control from the top is a more effective means for coordinating company actions. C. Decisions on most matters of importance should be in the hands of top-level managers who have the experience, expertise, and judgment to decide what is the best course of action. D. Facilitates quick decision making and strong leadership under crisis situations. E. Lower-level personnel have neither the knowledge, the time, nor inclination to properly manage the tasks they are performing

A. Those with decision-making authority should be trained to exercise good judgment.

12. The most common approaches to capability building include A. developing new capabilities via collaborative partnerships. B. developing and strengthening capabilities internally. C. acquiring capabilities through mergers and acquisitions. D. None of answers A through C listed above are common approaches to capability building. E. All of answers A through C listed above are common approaches to capability building.

E. All of answers A through C listed above are common approaches to capability building.

32. Functional organizational structures are also called A. hybrid forms. B. M-forms. C. F-forms. D. simple forms. E. U-forms

E. U-forms

25. Superior strategy execution capabilities allow companies to get the most from their other organizational resources and competitive capabilities. In this way they contribute to the success of a firm's business model. A. True B. False

A. True

27. Efforts to decentralize decision making and give company personnel some leeway in conducting operations must be tempered with the need to maintain adequate control and cross-unit coordination. A. True B. False

A. True

34. Simple organizational structures are also called line-and-staff structures or flat structures. A. True B. False

A. True

7. An advantage of matrix organizational structures is that they facilitate the sharing of plant and equipment, specialized knowledge, and other key resources, but they have a potential disadvantage for confusion among employees due to dual reporting relationships and divided loyalties. A. True B. False

A. True

8. Good organizational design may contribute to the firm's ability to create value for customers and realize a profit. A. True B. False

A. True

31. Matrix organizational structures are also called ___________ structures. A. composite B. simple form C. hybrid form D. M-form E. U-form

A. composite

2. Which of the following is not a chief advantage of centralized organizational structures? A. Facilitates quick decision making and strong leadership under crisis situations. B. Allows fast response to market change. C. Fixes accountability through tight control from the top. D. Eliminates potential for conflicting goals and actions on the part of lower-level managers. E. All of the above are chief advantages of centralized organizational structures.

B. Allows fast response to market change.

5. Which of the following is not a chief advantage of decentralized organizational structures? A. Encourages company employees to exercise initiative and act responsibly. B. Facilitates quick decision making and strong leadership under crisis situations. C. Spurs new ideas and creative thinking. D. Entails fewer layers of management. E. Promotes greater motivation and involvement in the business on the part of more company personnel.

B. Facilitates quick decision making and strong leadership under crisis situations.

21. The two best signs of good strategy execution are whether a company is meeting or beating its performance targets and whether its senior managers consistently receive performance bonuses. A. True B. False

B. False

30. Building new competencies and capabilities is a multistage process that occurs over a period of days and weeks. It is something that usually can be accomplished rather quickly. A. True B. False

B. False

6. Network structures have the advantage of facilitating the sharing of plant and equipment, specialized knowledge, and other key resources, but they have a potential disadvantage for confusion among employees due to dual reporting relationships and divided loyalties. A. True B. False

B. False

9. Superior strategy execution capabilities are one of many sources of sustainable competitive advantage when strategies are easy for rivals to copy. A. True B. False

B. False

26. Which of the following is a basic tenet of centralized organizational structures? A. Those with decision-making authority should be trained to exercise good judgment. B. Strong control from the top is a more effective means for coordinating company actions. C. A company that draws on the combined intellectual capital of all its employees can outperform a command-and-control company. D. Encourages employees to exercise initiative and act responsibly. E. Decision-making authority should be put in the hands of the people closest to, and most familiar with, the situation.

B. Strong control from the top is a more effective means for coordinating company actions.

22. A _____________ organizational structure is a combination structure that overlays one type of structure onto another type, with multiple reporting relationships. It is used to foster cross-unit collaboration. A. functional B. matrix C. multidivisional D. network E. simple

B. matrix

33. A multidivisional structure can present problems to a company pursuing related diversification, because having independent business units--each running its own business in its own way--inhibits cross-business collaboration and the capture of cross-business synergies. To solve this type of problem, firms turn to more complex structures, such as the _________ structure. A. star. B. matrix. C. functional. D. U-form. E. M-form

B. matrix.

18. The formal and informal arrangement of tasks, responsibilities, lines of authority, and reporting relationships by which the firm is administered is commonly known as its A. policy guide. B. organizational structure. C. decision style. D. task administration. E. culture.

B. organizational structure.

20. Which of the following practices are not common among companies dedicated to staffing jobs with the most capable people they can find? A. Providing employees with training programs that continue throughout their careers. B. Offering promising employees challenging, interesting, and skill-stretching assignments. C. Avoiding rotating people through jobs that span functional and geographic boundaries. Rotations tend result in people having shallow skill sets and only a rudimentary understanding of the organization and its issues. D. Coaching average performers to improve their skills and capabilities, while weeding out underperformers. E. Making the work environment stimulating and engaging so that employees will consider the company a great place to work.

C. Avoiding rotating people through jobs that span functional and geographic boundaries. Rotations tend result in people having shallow skill sets and only a rudimentary understanding of the organization and its issues.

3. Which of the following is not one of the principal components of the strategy execution process? A. Allocating sufficient resources (budgetary and otherwise) to the strategy execution effort. B. Staffing the organization with managers and employees capable of executing the strategy well. C. Determining the best generic competitive strategy that is matched to current market conditions. D. Developing the resources and organizational capabilities required for successful strategy execution. E. Instituting policies and procedures that facilitate strategy execution.

C. Determining the best generic competitive strategy that is matched to current market conditions.

17. Which of the following is a primary disadvantage of centralized organizational structures? A. May result in higher-level managers being unaware of actions taken by empowered personnel under their supervision. B. Generally generates less profits when compared to decentralized organizational structures. C. Lengthens response times by those closest to the market conditions because they must seek approval for their actions. D. Can lead to inconsistent or conflicting approaches by different managers and employees. E. Can impair cross-unit collaboration.

C. Lengthens response times by those closest to the market conditions because they must seek approval for their actions.

14. The ultimate goal of decentralized decision making is to A. facilitate quick decision making and strong leadership under crisis situations. B. fix accountability through tight control from the top. C. put authority in the hands of those persons closest to and most knowledgeable about the situation. D. eliminate the potential for conflicting goals and actions on the part of lower-level managers. E. None of the above are the ultimate goal of decentralized decision making.

C. put authority in the hands of those persons closest to and most knowledgeable about the situation.

29. The structure in which a central executive (often the owner-manager) handles all major decisions and oversees the operations of the organization with the help of a small staff is commonly referred to as A. network. B. functional. C. simple. D. matrix. E. multidivisional.

C. simple.

1. Multidivisional organizational structures are also called A. F-forms. B. U-forms. C. hybrid forms. D. M-forms. E. simple forms.

D. M-forms.

4. Good strategy execution is primarily A. the responsibility of senior management. B. the responsibility of middle management. C. the responsibility of rank-and-file employees. D. a team effort involving both managers and employees. E. the responsibility of the board of directors.

D. a team effort involving both managers and employees

28. A ____________ organizational structure is organized into functional departments, with departmental managers who report to the CEO and small corporate staff. A. network B. matrix C. multidivisional D. functional E. simple

D. functional

A _____________ organizational structure is a decentralized structure consisting of a set of operating divisions organized along business, product, customer group, or geographic lines, and a central corporate headquarters that allocates resources, provides support functions, and monitors divisional activities. A. matrix B. simple C. network D. multidivisional E. functional

D. multidivisional

10. A _____________ structure is the arrangement linking a number of independent organizations involved in some common undertaking with one firm typically in a more central role. A. matrix B. simple C. functional D. network E. multidivisional

D. network

11. The four basic types of organizational structure are A. the multidivisional, the matrix, the coordinated, and the dispersed. B. the centralized, the decentralized, the simple, and the functional. C. the centralized, the decentralized, the network, and the matrix. D. the simple, the functional, the multidivisional, and the matrix. E. the simple, the functional, the coordinated, and the dispersed.

D. the simple, the functional, the multidivisional, and the matrix.

13. Which of the following is a primary disadvantage of decentralized organizational structures? A. Generally generates less profits when compared to centralized organizational structures. B. Does not encourage responsibility among lower-level managers and rank-and-file employees. C. Discourages lower level-managers and rank-and-file employees from exercising any initiative. D. Lengthens response times by those closest to the market conditions because they must seek approval for their actions. E. Can impair cross-unit collaboration.

E. Can impair cross-unit collaboration

19. According to textbook Figure 10.2, which of the following are the three key actions in building an organization capable of proficient strategy execution? A. Determining appropriate compensation levels and building effective reward systems; acquiring, developing, and strengthening key resources and capabilities; structuring the organization and work effort. B. Instituting policies and procedures that facilitate strategy execution; acquiring, developing, and strengthening key resources and capabilities; structuring the organization and work effort. C. Staffing the organization; determining appropriate compensation levels and building effective reward systems; structuring the organization and work effort. D. Staffing the organization; acquiring, developing, and strengthening key resourcesand capabilities; determining appropriate compensation levels and building effective reward systems. E. Staffing the organization; acquiring, developing, and strengthening key resources and capabilities; structuring the organization and work effort.

E. Staffing the organization; acquiring, developing, and strengthening key resources and capabilities; structuring the organization and work effort.