Exam 11: Organizational Structure and Controls

A simple structure is an organizational form in which the owner-manager makes all major decisions directly and monitors all activities, while the staff serves as an extension of the manager's supervisory authority.

Agatha Adams founded Insurance Specialists to process medical claims for physicians' practices.She plans to compete on the basis of cost, offering the lowest processing cost per claim in her market area.Ms.Adams' company should:

Successfully implementing a cost leadership strategy requires:

Distributed strategic networks are the organizational structure used to manage international cooperative strategies.

One reason a long-tenured top-level manager may hesitate to conclude the firm's structure is a problem is that doing so:

The management team at Krandal Industries emphasizes financial controls over strategic ones.Accounting-based measures are used to evaluate the firm's performance based on its own history and on industry averages.It is most likely that Krandal uses what type of strategy?

Airlines have forged a number of complementary strategic alliances, in part because many airlines are not profitable.Some airlines participate in several alliances simultaneously.This tends to:

Alfred Chandler found that firms grow in a predictable pattern and that the firm's growth patterns determine its structural form.Which of the following forms corresponds to the FINAL stage in Chandler's theory?

Companies and business units using the differentiation strategy should emphasize financial rather than strategic controls.

LG Company has units operating in significantly different industries and uses financial controls to manage its portfolio.LG is MOST likely using the __________ structure.

Ortiz is a manager of BRS Corp.Ortiz's division did not meet financial targets this year.Ramirez, manager of another division, has indicated that Ortiz's division incurred significant costs which resulted in Ramirez's division setting record profits for the year.As a result, performance for BRS as a whole exceeded projections.Which of the following pairings of organizational structures for BRS and bonus for Ortiz is most plausible?

One disadvantage of the functional structure is that:

Organizational controls guide the use of strategy, indicate how to compare actual results with expected results, and suggest corrective actions to take when the difference is unacceptable.

RexMacDonald, Inc., uses a differentiation strategy that relies on cooperation, communication, and sharing of ideas among employees.In order to foster this behavior, RexMacDonald should emphasize strategic controls over financial controls.

A centralized structure does not provide information from local stores that would be useful in changing its technology quickly.This example illustrates the effect of structure on strategy.

Which of the following does NOT cause a firm to move from a functional structure to a multidivisional structure?

After years of negotiating short-term contracts with its suppliers, Icon Images has decided to agree to longer-term contracts.In doing this, Icon Images is hoping to:

Leslie is a newly graduated certified public accountant with a specialty in corporate tax.She wishes to join an organization (NOT an accounting firm) that will allow her to concentrate on corporate tax and become deeply proficient in this area.Leslie should look for a position in a firm with a __________ structure.

The integrated cost leadership/differentiation strategy needs structural features that are partially centralized and partially decentralized, jobs that are semispecialized, and rules and procedures that call for some formal and some informal job behavior.

A firm pursuing a related constrained diversification strategy would typically need all of the following EXCEPT: