Chapter 11 - Test 3

Question 1

Organizational Structure Four building
blocks

Answer 1

1. Specialization
2. Formalization
3. Centralization
4. Hierarchy

Question 2

Specialization

Answer 2

Describes the degree to which a task is divided into
separate jobs. Requires a tradeoff between depth and breadth of knowledge.

Question 3

Larger firm’s degree of specialization

Answer 3

high

Question 4

Smaller ventures degree of specialization

Answer 4

low

Question 5

Formalization

Answer 5

The extent to which employee behavior is
guided by rules and procedures

Question 6

Centralization

Answer 6

The degree to which decision-making is
concentrated at the top of the organization

Question 7

Hierarchy

Answer 7

The formal, position-based reporting lines

Question 8

Mechanistic Organization

Answer 8

Much specialization and formalization with centralized decision-making

Question 9

Organic Organization

Answer 9

Little specialization and formalization with decentralized decision-making

Question 10

Firm Strategy and Structure Relationship

Answer 10

interdependent and dynamic

Question 11

Simple Structure

Answer 11

Used by small firms with low organizational
complexity. Has a low degree of formalization and specialization.

Question 12

Functional Structure

Answer 12

Employees are grouped into functional areas based on domain expertise

Question 13

A functional structure works when

Answer 13

a firm has a narrow focus and a small geographic footprint

Question 14

Cost Leadership Strategy

Answer 14

Nurturing and upgrading core competencies

Question 15

Differentiation Strategy

Answer 15

Incorporate decentralized decision-making and foster innovation and creativity

Question 16

Blue Ocean Strategy

Answer 16

The focus is on controlling costs and fostering creativity with flexibility in mind

Question 17

Exploitation

Answer 17

Applying current knowledge to enhance firm performance in the short term

Question 18

Ambidexterity

Answer 18

A firm’s ability to address trade-offs over time

Question 19

Exploration

Answer 19

Searching for new knowledge that may enhance a firm’s future performance

Question 20

Each strategic business unit (SBU) has…

Answer 20

• Has profit-and-loss (P&L) responsibility
• Operated independently
• Led by a CEO who is responsible for SBU strategy and operations

Question 21

Related Diversification

Answer 21

• Cooperative M-Form
• Centralized decision making

Question 22

Unrelated Diversification

Answer 22

• Competitive M-Form
• Decentralized decision making

Question 23

Disadvantages of the Multidivisional Structure

Answer 23

• Adds another layer of corporate hierarchy
• SBUs competing

Question 24

Matrix Structure

Answer 24

• Leverages SBU (M-form) benefits
• leverages organizational structure benefits

Question 25

Structure for International

Answer 25

functional structure

Question 26

Structure for Multi-domestic

Answer 26

multi-divisional structure

Question 27

Structure for Global Standardization

Answer 27

multi-divisional structure

Question 28

Structure for Transnational

Answer 28

global matrix structure