Chapter 14

Question 1

What accurately characterized the reality of the global matrix structure?

Answer 1

It can be difficult to get work done because of power struggles between divisions

Question 2

This produces an inflexible organization that is unable to reach a decision quickly

Answer 2

Global matrix structure

Question 3

This refers to the totality of a firm’s organization, including formal organizational structure, control systems and incentives, organizational culture, processes and people

Answer 3

Organizational architecture

Question 4

By organizational structure, we mean what 3 things

Answer 4

The formal division of the organization into subunits
The location of decision-making responsibilities within that structure
The establishment of integrating mechanisms to coordinate the activities of subunits

Question 5

These are the metrics used to measure the performance of subunits and make judgments about how well managers are running those subunits

Answer 5

Control systems

Question 6

These are the decided used to reward appropriate managerial behavior

Answer 6

Incentives

Question 7

The manner in which decisions are made and work is performed within the organization

Answer 7

Processes

Question 8

This refers to the norms and value systems that are shared among the employees of an organization

Answer 8

Organizational culture

Question 9

This refers to not only the employees of the organization, but also the strategy used to recruit, compensate, and retain those individuals and the type of people that they are in terms of their skills, values, and orientation

Answer 9

People

Question 10

Organizational structure can be thought of in terms of what three dimensions

Answer 10

Vertical differentiation
Horizontal differentiation
Integrating mechanisms

Question 11

This refers to the location of decision-making responsibilities within a structure

Answer 11

Vertical differentiation

Question 12

This refers to the formal division of the organization into subunits

Answer 12

Horizontal differentiation

Question 13

These are mechanisms for coordinating subunits

Answer 13

Integrating mechanisms

Question 14

This structure tends to be favored by firms with a low degree of diversification and a domestic structure based on functions. The world is divided into geography areas

Answer 14

Worldwide area structure

Question 15

This tends to be adopted by firms that are reasonably diversified and, accordingly, ironically had domestic structures based on product divisions. Each division is a self contained, largely autonomous entity with full responsibility for its own value creation activities.

Answer 15

Worldwide product division structure

Question 16

What are the three components of a firm’s organizational structure?

Answer 16

The formal division of the organization into subunits
Location of decision-making responsibilities within the organization,
The establishment of integrating mechanisms to coordinate the activity in the subunits

Question 17

These are societies of individuals who perform collective tasks with their own distinctive cultures and subcultures

Answer 17

Organizations

Question 18

What are the three dimensions of organizational structure?

Answer 18

Vertical differentiation
Horizontal differentiation
Integrating mechanisms

Question 19

Level of performance ambiguity associated with transnational firms

Answer 19

High

Question 20

Level of performance ambiguity associated with global standardization firms

Answer 20

Medium

Question 21

Level of performance ambiguity associated with localization firms

Answer 21

Low

Question 22

The importance of local responsiveness in pursuing a localization strategy leads firms to adopt a ____ decision making model

Answer 22

Decentralized

Question 23

This allows for horizontal differentiation in product division and geographic areas

Answer 23

The global matrix structure

Question 24

Which control system is achieved by personal contact with subordinates

Answer 24

Personal

Question 25

The ______ strategy used both centralized control go realize location and experience effects that reduce costs, and decentralized decision making to meet the needs of local responsiveness

Answer 25

Transnational

Question 26

When performance ambiguity is high, the cost of control will be

Answer 26

High

Question 27

Three ways firms can divide themselves into subunits using horizontal differentiation

Answer 27

By type of business, by geographic area, by function

Question 28

Two benefits of the worldwide product division structure

Answer 28

Enhances the consolidation of value creation activities at key locations Facilitates the transfer of core competencies within a division's worldwide operations

Question 29

What conditions must be fulfilled to achieve superior enterprise profitability? (2)

Answer 29

Different elements of the firm's organizational architecture must be internally consistent Organizational architecture, the firm's strategy, and the competitive environment must be consistent

Question 30

Four main types of control systems

Answer 30

Personal controls Bureaucratic controls Output controls Cultural controls

Question 31

This control is achieved by personal contact with subordinates

Answer 31

Personal control

Question 32

This type of control tends to be most widely used in small firms, and also structured the relationships between managers at different levels in multinational enterprises

Answer 32

Personal controls

Question 33

This control is achieved through a system of rules and procedures that directs the actions of subunits

Answer 33

Bureaucratic control

Question 34

This control involves setting goals for subunits to achieve and expressing those goals in terms of relatively objective performance metrics such as profitability, productivity, growth, market share, and quality

Answer 34

Output control

Question 35

This control exists when employees "buy into" the norms and value systems of the firm. Employees tend to control their own behavior, which reduces the need for direct supervision

Answer 35

Cultural control

Question 36

The control system where goals are set for subunits to achieve and performance metrics are used to judge attainment of those goals is called

Answer 36

Output controls

Question 37

The basic principle of an incentive scheme for an individual employee is to link the incentive to

Answer 37

An output target

Question 38

The basic principle of this for an individual employee is to link the incentive to an output target

Answer 38

An incentive scheme

Question 39

This gives subunits an amount it can spend in a given year

Answer 39

A budget

Question 40

This gives headquarters control over how the money is spent by subunits

Answer 40

Capital spending rules

Question 41

Which strategy would reflect the lowest level of performance ambiguity

Answer 41

Localization

Question 42

The control system where employees tend to control their own behavior and need little direct supervision, because they have elected to follow the forms and values of the firm is

Answer 42

Cultural controls

Question 43

Facilitating coordination, making it easier for top-level managers to bring about change, eliminating duplication of activities and making decisions consistent with organizational objectives are arguments for ______ of decision making

Answer 43

Centralization

Question 44

The ___ strategy may use a mix of centralization and decentralization depending on the pressures for local responsiveness and the need to coordinate a dispersed value chain and transfer core competencies. There is a high need for coordination when using this strategy

Answer 44

The transnational strategy

Question 45

What is the method of control where actions of subunits are directed by a system of rules and procedures?

Answer 45

Bureaucratic

Question 46

The _____ strategy is the strategy in which businesses centralize functions such as R&D and marketing functions, but decentralize operating decisions to subsidiaries

Answer 46

The international strategy

Question 47

A _____ strategy has firms operating with worldwide area structures, where operating decisions are decentralized to functionally self-contained country subsidiaries

Answer 47

Localization

Question 48

Integrating mechanisms are used by a firm to help ____

Answer 48

Achieve coordination between subunits

Question 49

These are used by a firm to help achieve coordination between subunits

Answer 49

Integrating mechanisms

Question 50

The first principle of successful organizational change is to unfreeze the organization though

Answer 50

Shock therapy

Question 51

The norms and value systems of a company make up the company's ____ and are a source of organizational inertia

Answer 51

Culture

Question 52

This exists when the causes of a subunit's poor performance are not clear

Answer 52

Performance ambiguity

Question 53

Two measures a company might use when refreezing an organization

Answer 53

Change hiring policies | Educate staff