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 merely serves as an extension of the manager's supervisory authority.

Ichabod Industries has a Latin American Division, a European Division, an Industrial Lubricants Division, and a Food Service Division. Ichabod Industries probably uses the ______ organizational structure.

Strategic controls allow corporate-level managers to:

Typically, an organization using a simple structure would be:

The three structural characteristics that differ among organizational structures include all of the following EXCEPT:

The divisions within each SBU are related in terms of shared products or markets, but the divisions of one SBU have little in common with the divisions of the other SBUs.

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.

To implement a related linked strategy, a firm usually needs an SBU structure.

The simple structure is used by owner-managed firms which are characterized by informal relationships, few rules, limited task specialization, and unsophisticated information systems.

IKEA is a global furniture retailer with more than 300 outlets in 39 countries and regions. IKEA focuses on lowering its costs as well as understanding customer needs, especially younger ones. IKEA's international strategy is best described as ______, and the appropriate organizational structure to implement this strategy is the ______ structure.

The organizational structure for an internationally diversified firm requires trade-offs between global integration and local market responsiveness.

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

Arnold Schwartz, CEO and founder of Schwartz Engineering, has repeatedly rebuffed efforts by other firms to draw Schwartz Engineering into strategic alliances. Schwartz Engineering has built its highly successful business around proprietary processes invented by Mr. Schwartz in the 1980s. Mr. Schwartz is concerned that his firm will be required to share the sources of its competitive advantage with alliance partners. This is a reasonable fear.

The Amos Ball Printing Company was established in 1866. Currently, Amos Ball V is the CEO and chairman of the board. The company has traditionally used a functional structure. Five years ago, the company branched into online publishing and small-batch printing in addition to its regular large-batch operations. Both new businesses are significantly different in technology and marketing from each other and from Ball's traditional business. Despite the hiring of experienced professionals in these new endeavors, performance continues to be poor and is affecting Ball's overall performance. Which of the following statements is TRUE?

The ______ structure is best for implementing the related-constrained diversification strategy.

The heavy use of integrative mechanisms in the ______ multidivisional organizational structure is intended to achieve _______.

In an SBU structure, ______ is/are evaluated using strategic controls, whereas ______ is/are evaluated using financial controls.

______ controls are objective criteria that allow corporate managers to evaluate the returns earned by individual business units.

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.

Andermeyer Jewelers, which specializes in high-end jewelry, has been in existence since the 1870s and has served generations of wealthy families. Owned and managed by the Andermeyer family since its founding, it has never had more than 20 designers and jewelers in its shop. Andermeyer Jewelers should use the ______ structure.