Chapter 11

Question 1

concerns the organization,
coordination, and integration of how work gets done
• Key to gaining and sustaining a competitive advantage

Answer 1

STRATEGIC IMPLEMENTATION

Question 2

Managers attempt to coordinate implementation efforts (work)

and motivate employees through ____

Answer 2

ORGANIZATIONAL DESIGN

Question 3

____ is the process of creating, implementing,
monitoring, and modifying the structure, processes, and procedures of an
organization
• The goal is to allow managers to translate strategy into reality

Answer 3

ORGANIZATIONAL DESIGN

Question 4

Implies that organizational design must be flexible enough to accommodate the
formulated strategy and future growth/expansion

Answer 4

STRUCTURE FOLLOWS STRATEGY

Question 5

Three (3) levers of organizational design

Answer 5

Structure – determines how work efforts of individuals and teams are orchestrated
• Culture – shared norms and values of organizational members
• Control systems – internal governance mechanisms used to align incentives of
employees with owners

Question 6

___ determines how the work
efforts of individuals and teams are orchestrated and how
resources are distributed

Answer 6

ORGANIZATIONAL STRUCTURE

Question 7

Four (4) key elements of an organizational structure

Answer 7

• Specialization
• Formalization
• Centralization
• Hierarchy

Question 8

describes the degree to which a task is divided into
separate jobs (i.e., degree of labor division)

Answer 8

SPECIALIZATION

Question 9

captures the extent to which employee behavior is

steered by explicit and codified rules/procedures

Answer 9

FORMALIZATION

Question 10

refers to the degree to which decision making is

concentrated at the top of the organization

Answer 10

CENTRALIZATION

Question 11

determines the formal, position-based reporting lines and

stipulates who reports to whom

Answer 11

HIERARCHY

Question 12

a firm’s

resistance to change the status quo

Answer 12

ORGANIZATIONAL INERTIA

Question 13

the founder(s) tend to make all the
important decisions and run the day-to-day operations

Answer 13

SIMPLE STRUCTURE

Question 14

groups employees into distinct

functional areas based on domain expertise

Answer 14

A FUNCTIONAL STRUCTURE

Question 15

Drawbacks to functional structure

Answer 15

• Can lack effective communication channels between departments
• E.g., R&D manager may not effectively communicate with marketing,
misunderstanding the design changes that consumers demand
• Puts more pressure on CEO to coordinate effectively
• One remedy might be to set up temporary CROSS-FUNCTIONAL
TEAMS that include members from different functional areas
• Difficult to address a higher level of diversification, which often comes
from further growth
• Thus, managers may find it necessary to again restructure

Question 16

consists of several distinct

strategic business units (SBUs)

Answer 16

The MULTIDIVISIONAL FORM

Question 17

A MATRIX STRUCTURE

Answer 17

combines the M-FORM and FUNCTIONAL
structures
• Each SBU is organized under a single corporate office (M-form), but a second
layer of structure is provided by either:
• Geographic region (i.e., North America, South America, etc)
• Functional area (i.e., R&D, marketing, accounting, etc)
• Product/service offering (i.e., product/service 1, 2, 3, etc)
• Allows firms to gain benefits from M-form (i.e., domain expertise, economies
of scale, efficient information processing) with benefits of functional structure
(i.e., responsiveness and decentralized focus)

Question 18

Drawbacks of a Matrix structure

Answer 18

Difficult to implement
• Reporting structures are not very clear (e.g., employees have >1 boss)
• Can slow decision-making and increase administrative costs

Question 19

___ describes the collectively shared values and

norms of an organization’s members

Answer 19

ORGANIZATIONAL CULTURE

Question 20

Employees learn and effect a firm’s culture through ___

whereby values and norms are internalized

Answer 20

SOCIALIZATION

Question 21

Culture is expressed through ___

Answer 21

Artifacts

Question 22

Artifacts

Answer 22

elements of the firm

Question 23

Rules of conduct

Answer 23

written rules defining appropriate behavior

Question 24

Vocabulary

Answer 24

the language, acronyms, jargon, slang, signs, slogans, songs, etc
that define the organization

Question 25

Rituals

Answer 25

rites, ceremonies, and taboos

Question 26

Myths and stories

Answer 26

—the history, saga, myths, and legends of the firm

Question 27

FOUNDER IMPRINTING

Answer 27

the influence of the founder(s) on the definition and

shape of a firm’s culture

Question 28

How does a culture change?

Answer 28

• Very difficult to change, especially over time, BUT CAN CHANGE WHEN:
• New leadership emerges
• Merger or acquisition

Question 29

STRATEGIC CONTROL-AND-REWARD SYSTEMS

Answer 29

are internal
governance mechanisms put in place to align the incentives of
principals (owners) and agents (employees)

Question 30

INPUT CONTROLS

Answer 30

seek to define and direct employee
behavior through a set of explicit, codified rules and standard
operating procedures

Question 31

OUTPUT CONTROLS

Answer 31

seek to guide employee behavior by

defining expected results (outputs)