Question 1

Telescopic Inc., a web development firm, is headed by Rob Dennis, the CEO. Each functional department of the company-marketing, finance, and HR-has a president who reports to the CEO directly. Each department has various managers who manage teams. The managers report to the presidents, and the team leads report to the managers. Finally, the employees at the lowest level report to their team leads. It is rare for a lower-level employee to interact with the CEO of the company. In this scenario, Telescopic Inc. can be said to have a(n)

Accepted Answer

A)   organic organizational structure.
B)   decentralized organizational structure.
C)   tall hierarchical structure.
D)   flat hierarchical structure. C

Question 2

A firm that successfully balances exploitation of current opportunities and exploration of future possibilities is considered ambidextrous.

Accepted Answer

A) True 
 B)False  True

Question 3

Discuss the not-invented-here syndrome with the help of an example.

Accepted Answer

Student examples will vary. A sample answer follows:
Firms following the closed innovation model are at risk of falling prone to the not-invented-here syndrome: "If the R&D leading to a discovery and a new development project was not conducted in-house, it cannot be good." As documented, the pharmaceutical company Merck suffers from the not-invented-here syndrome. That is, if a product was not created and developed at Merck, it could not be good enough. Merck's culture and organizational systems perpetuate this logic, which assumes that since the company hired the best people, the smartest people in the industry must work for Merck, and so the best discoveries must be made at Merck. The company leads the industry in terms of R&D spending, because Merck believes that if it is the first to discover and develop a new drug, it would be the first to market.

Question 4

Discuss how a cost-leadership strategy is used with a functional structure.

Accepted Answer

The answer of Discuss how a cost-leadership strategy is used...

Question 5

________ refers to a firm's resistance to change the status quo that can set the stage for the firm's subsequent failure.

Accepted Answer

A)   PESTEL factors
B)   Formalization
C)   Organizational inertia
D)   Centralization

Question 6

Discuss how a differentiation strategy is used with a functional structure.

Accepted Answer

The answer of Discuss how a differentiation strategy is used...

Question 7

As demonstrated by business historian Alfred Chandler in his seminal book "Strategy and Structure," organizational structure must follow strategy. Why?

Accepted Answer

The answer of As demonstrated by business historian Alfred Chandler...

Question 8

Cheetah, a web development firm, wants to implement an organic structure to foster innovation and attract the most talented creative minds. Which of the following features will make it difficult to do so?

Accepted Answer

A)   decision-making power distributed throughout the organization
B)   a wide span of control for managers
C)   dedication to a cost-leadership business strategy
D)   flexible job descriptions for employees

Question 9

W. L. Gore & Associates is organized in such a way that it has no formal job titles, job descriptions, or chains of command. This implies that it has

Accepted Answer

A)   a formalized structure.
B)   a decentralized structure.
C)   organizational inertia.
D)   a top-down management style.

Question 10

When a firm diversifies into different product lines and geographies, a ________ structure is preferred.

Accepted Answer

A)   simple
B)   functional
C)   multidivisional
D)   network

Question 11

Jen works as a front-line employee for a nationwide retail store. She reports to a floor manager, who reports to a departmental manager, who reports to a regional supervisor, who reports to a vice president, who reports to the CEO. Which of the following best describes this retail store?

Accepted Answer

A)   flat structure
B)   tall structure
C)   centralized structure
D)   decentralize structure

Question 12

BioCure Inc. is a pharmaceutical company that has many breakthroughs in medicine to its credit. Unlike many other pharmaceutical companies, BioCure has a relaxed work environment where employees are free to discuss projects with each other. Employees are encouraged to choose the projects that interest them; communication between team members and their supervisors is open and easy. Because of the company's work culture, its employees feel motivated to work harder and display more entrepreneurial behaviors. In this scenario, BioCure Inc. is most likely an organization that is

Accepted Answer

A)   formalized.
B)   mechanistic.
C)   centralized.
D)   organic.

Question 13

Which of the following is an advantage offered by a functional structure?

Accepted Answer

A)   It allows for an efficient top-down communication chain and thus relies on a relatively tall structure.
B)   It facilitates a lower division of labor, which is linked to higher productivity.
C)   It allows for a higher degree of specialization and deeper domain expertise.
D)   It facilitates a lower level of specialization.

Question 14

Which of the following statements is true of organizational culture?

Accepted Answer

A)   Changes in culture are too frequent to have any impact on strategic implementation.
B)   It is better for founder CEOs to create a relevant culture, structure, and strategy in the early stages.
C)   It is always better to focus on output control and performance than on organizational culture.
D)   According to research, more than 50 percent of firms change culture successfully.

Question 15

Which of the following types of groups is most susceptible to groupthink?

Accepted Answer

A)   a diverse group
B)   a cohesive group
C)   a heterogeneous group
D)   a decentralized group

Question 16

Why does a functional structure rely on a flat organizational structure?

Accepted Answer

A)   The work in the organization is centrally coordinated by the CEO.
B)   It allows for a higher degree of specialization and domain expertise.
C)   It allows for efficient bottom-up and top-down communication.
D)   It allows for the implementation of a differentiation strategy.

Question 17

Why should managers using the M-form organizational structure to support a related-diversification strategy ideally concentrate decision making at the top of the organization?

Accepted Answer

A)   It allows a high level of integration.
B)   It helps contain the core competencies within a strategic business unit (SBU) .
C)   It leads to competition between SBUs.
D)   It helps evaluate each SBU as a stand-alone profit-and-loss center.

Question 18

Why does a firm use an organic organization combined with a functional structure when implementing a differentiation strategy?

Accepted Answer

A)   It allows the firm to create incentives to foster process innovation in order to drive down cost.
B)   It allows the firm to reduce its cost below that of competitors while offering acceptable value.
C)   It allows the firm to constantly upgrade core competencies in R&D, innovation, and marketing.
D)   It allows the firm to nurture and constantly upgrade necessary core competencies in manufacturing and logistics.

Question 19

Turquoise Games relies on its employees to provide innovative ideas for new educational products. To foster intrinsic motivation in its workforce, Turquoise should

Accepted Answer

A)   offer bonuses to employees whose ideas go into production.
B)   threaten to fire employees who do not come up with at least one new idea per week.
C)   give employees a "free day" every two weeks to pursue ideas for new educational toys.
D)   distribute a list of standard operating procedures for employees to follow.

Question 20

Which of the following accurately describes an organic organization?

Accepted Answer

A)   an inflexible organization that fosters slow decision making and high employee motivation
B)   an inflexible organization that fosters fast decision making and high employee motivation
C)   a flexible organization that fosters slow decision making and high employee motivation
D)   a flexible organization that fosters fast decision making and high employee motivation

Exam 11: Organizational Design: Structure, Culture, and Control