Ch 10. key terms

Question 1

Functional Structure

Answer 1

R&D, MARKETING, PRODUCTION, ACCOUNTING ARE MANAGED BY A SPECIALIST
1. USUALLY, HAVE A SINGLE CLOSELY RELATED PRODUCT
2. ALL SPECIALIST ARE REPORTING TO CEO
3. CAN MAKE DEPARTMENTS ISOLATED AND SO THERE IS LESS COMMUNICATION ACROSS THE COMPANY
The structure enables the firm to group operations into functions, departments, or geographic areas

Question 2

Simple Structure

Answer 2

OWNER/MANAGER MAKES MOST OF THE DECISIONS & STAFF IS THE EXTENSION OF MANAGEMENT
1. FEW RULES
2. INFORMAL EVALUATION AND REWARD SYSTEM
3. HIGHLY CENTRALIZED
increases sales revenue and output over time
may engage in vertical integration

Question 3

Divisional Structure

Answer 3

is the outcome of a diversification strategy which intends to reorganize around the geographic area or product line

Question 4

Factors that international structure is based on

Answer 4

1. the extent of expansion
2. type of strategy
3. degree of product diversity

Question 5

Functional structure disadvantages

Answer 5

1. short term thinking of each department of what is best for the department rather than the organization as a whole
2. difficult to have a standard evaluation because some of the departments can be specifically linked to sales but others such as accounting or engineering are not linked to sales
3. CEO has to handle many problems

Question 6

STRATEGIC BUSINESS UNITS

Answer 6

1. SIMILAR PRODUCT OR MARKETS ARE GROUPED TO
2. ACHIEVE SYNERGY
3. EACH UNIT OPERATES AS PROFIT CENTER
4. DECENTRALIZATION OF AUTHORITY
5. QUICK RESPONSES TO CHANGES IN THE MARKET

Question 7

DIVISIONAL STRUCTURE ADVANTAGES

Answer 7

Separation of strategic & operating control
Quicker response to changes in the market environment
Fewer problems sharing resources across functions
Development of general management talent is enhanced

Question 8

DIVISIONAL STRUCTURE DISADVANTAGES

Answer 8

Very expensive duplication of functions possible
Dysfunctional competition among divisions
Differences in image & quality possible across divisions
Too much focus on short-term performance

Question 9

HOLDING COMPANY STRUCTURE ADVANTAGES

Answer 9

Cost savings due to fewer personnel and lower overhead
Divisional autonomy increases the motivation level of divisional executives
Quicker response to changes in the market environment

Question 10

HOLDING COMPANY DISADVANTAGE

Answer 10

1. Potential for synergies is very limited
2. The corporate office has little control
3. Difficult to replace key divisional executives if they leave
4. Turnaround may be difficult due to limited corporate staff support

Question 11

MATRIX ORGANIZATIONAL STRUCTURE

Answer 11

FUNCTIONAL DEPARTMENTS ARE COMBINED WITH PRODUCT GROUPS ON A PROJECT BASIS

INDIVIDUALS HAVE 2 MANAGERS

PROJECT MANAGERS AND FUNCTIONAL MANAGERS SHARE RESPONSIBILITY

Question 12

GEOGRAPHIC MANAGERS IN A MATRIX STRUCTURE ARE RESPONSIBLE

Answer 12

FOR PROFITABILITY OF BUSINESS IN THEIR REGION

Question 13

PRODUCT MANAGERS IN A MATRIX STRUCTURE ARE

Answer 13

RESPONSIBLE FOR DEVELOPMENT, PRODUCT, AND DISTRIBUTION OF THE LINE

Question 14

ADVANTAGES OF MATRIX DESIGN

Answer 14

1. Increases market responsiveness, collaboration & synergies
2. Allows more efficient utilization of resources
3. Improves flexibility, coordination & communication
4. Increases professional development

Question 15

DISADVANTAGE OF MATRIX STRUCTURE

Answer 15

1. Dual reporting relationships lead to uncertainty
2. regarding accountability
3. Can lead to power struggles & conflict
4. Relationships are complicated, need teamwork
5. Decision making takes longer

Question 16

MULTI-DOMESTIC STRATEGIES

Answer 16

USE GEOGRAPHIC DIVISION STRUCTURE

OR INTERNATIONAL DIVISION OR WORLDWIDE MATRIX

Question 17

GLOBAL STRATEGIES USE

Answer 17

Worldwide functional structure
Worldwide product division structure
Worldwide holding company structure

Question 18

BOUNDARYLESS ORGANIZATIONAL STRUCTURE

Answer 18

PERMEABLE BOUNDARIES ( VERTICAL, HORZINATAL). Boundaryless designs should not replace the traditional forms of organizational structure, but they should complement them.

Question 19

INTERNATIONAL STRUCTURES WITH A HIGH LEVEL OF AUTONOMY WITHIN GEOGRAPHIC CONSTRAINTS

Answer 19

INTERNATIONAL AND GEOGRAPHIC AREA DIVISION

Question 20

EFFICIENCY STRUCTURES THAT VIEW WORLD AS HOMOGENOUS

Answer 20

WORLDWIDE FUNCTION OR WORLDWIDE DIVISIONAL STRUCTURE

Question 21

REASONS TO OPT FOR GLOBAL EXPANSION

Answer 21

1. REQUIRED HUMAN RESOURCES ARE GLOBALLY DISPURSSED
2. IF FOREIGN FINANCING IS EASIER TO OBTAIN
3. PENETRATION OF PRODUCT HAS NOT YET BEEN DONE BY ANYONE
4. EASIER RECOVERY OF DEVELOPMENT COST

Question 22

DISADVANTAGES OF A BARRIER FREE STRUCTURE

Answer 22

1. POLITICAL BOUNDARIES UNSOUT AND OUT ARE DIFFICULT TO OVERCOME
2. LACKS STRONG LEADERSHIP
3. TIME CONSUMING & DIFFICULT TO MANAGE
4. LACKS A HIGH LEVEL OF TRUST

Question 23

ADVANTAGES TO A BARRIER FREE STRUCTURE

Answer 23

1. LEVERAGES COMPETENCY
2. QUICKER RESPONSE TO MARKET CHANGES
3. , CAN LEAD TO COORDINATED WIN WIN SITUATIONS

Question 24

THE 3 APPROACHES TO BOUNDRYLESS ORGANIZATION

Answer 24

BARRIER FREE TYPES FOCUSES ON MAKING ALL BOUNDARIES (EXTERNAL & INTERNAL) MORE PERMEABLE
MODULE AND VIRTUAL FOCUS ON A SEAMLESS EXTERNAL RELATIONSHIP (SUPPLIERS AND CUSTOMERS)