32. When an organization with a simple structure increases its sales revenue and volume of outputs, it is most likely to develop a
B) functional structure.
33. When an organization with a functional structure diversifies into related product-markets, it generally
B) develops a divisional structure.
A strategy of related diversification requires most firms to organize around geographical areas or product lines. This type of organizational growth leads to a(n)
A) divisional structure.
Generally speaking, discussions of the relationship between strategy and structure strongly imply that
B) structure follows strategy.
All of the following statements about simple organizational structures are true except
D) creativity and individualism are rare.
37. A simple structure is characterized by
B) low specialization and high centralization.
38. Functional structures are usually found in organizations where there is
A) high volume production.
At Sharp Corporation, work is divided into units that specialize in production, marketing, research and development, and other management tasks. This is an example of a
B) functional structure.
Which of the following is an advantage of a functional type of organizational structure?
C) pooling of specialists enhances coordination and control.
Which of the following is a disadvantage of a functional type of organizational structure?
A) differences in functional orientation may impede communication and coordination.
A divisional structure
C) facilitates the development of general managers.
Which of the following is an advantage of a divisional type of organizational structure?
B) an enhanced ability to respond quickly to changes in the external environment
All of the following are disadvantages of a divisional type of organizational structure except
D) there is separation of strategic and operating control.
An organization such as ConAgra that has dozens of different divisions with similar products will probably have the greatest success with which form of organization structure?
C) strategic business unit structure
All of the following are advantages of a strategic business unit (SBU) type of organizational structure except
D) the corporate office is more removed from the individual divisions.
47. Important advantages of a holding company structure include
A) savings in personnel and overhead expenses associated with a small corporate office.
Strategic business unit (SBU) and holding company structures result from extensive
Complete the following sentence: “Strategic business unit (SBU) structures are best suited for corporations pursuing _________________________, whereas holding company structures are best suited for companies with ________________________ strategies.”
C) related diversification, unrelated diversification
50. A matrix organizational structure is characterized by
A) dual reporting relationships.
B) a combination of functional and divisional organization structures.
C) efficient use of resources and expertise.
D) all of the above
Complicated working relationships, intense power struggles, and excessive reliance on group processes are disadvantages of what type of organizational structure?
Which of the following is considered to be an advantage of a matrix structure?
C) increased responsiveness to the market
If an international firm has a multidomestic strategy and a relatively high level of product diversity, the best choice for its organizational structure is
C) worldwide matrix.
If an international firm has a global strategy and a relatively low level of product diversity, the best choice for its organizational structure is
B) worldwide product division.
The relationship between strategy and structure can be best described as
C) strategy and structure influence each other.
56. The boundaries between levels in an organization’s hierarchy are known as
A) vertical boundaries.
Which of the following boundaries exist between the functional areas of an organization?
B) horizontal boundaries
Which of the following is not a boundaryless organizational design?
59. Which of the following is not an advantage of teams?
A) because teams interact so closely, coordination and integration becomes unnecessary.
According to the text, there are elements of team building that influence a team’s success. These include all of the following except
C) titles. Titles are important to a team’s success.
Organizations are increasingly using teams for many reasons. The difference between a good team and an outstanding team has been found to be
C) the way team members treat each other.
Which of the following is not a disadvantage of the barrier-free form of organization?
C) fewer internal barriers means fewer political issues to deal with.
What type of organization is defined as “a central hub surrounded by networks of outside suppliers and specialists”?
What is the name of the practice that many modular organization use to grow?
65. What advantages does outsourcing provide an organization?
D) all of the above
66. Which of the following is not a strategic risk of outsourcing?
D) loss of non-vital functions
Nike is a company that makes use of the concept of “product expatriates.” Product expatriates are
managers of the company sent abroad to work at the plants of its suppliers.
68. The phrase that best defines a virtual organization is
D) a continually evolving network of independent companies.
Lockheed Martin uses a coalition of three entities — its own company, academia, and government — to achieve its goals. This is an example of a
C) virtual organization.
Complete the following sentence: “Virtual organizations ____________________________ whereas modular organizations ____________________________.”
D) give up part of their strategic control, retain full strategic control
71. Which of the following is not a disadvantage of virtual structures?
A) difficulty in individual and organizational knowledge sharing.
Technical Computer Graphics uses small project teams and forms alliances with its teams, customers, and suppliers to accomplish projects. This is an example of
A) combining forms of organizational structure.
Organizations generally tend to become internally focused when faced with
D) all of the above.
Tools and techniques used to achieve effective coordination and integration of key activities in an organization include all of the following except
C) horizontal diversification.
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