Organizational Structure and Controls

Question 1

Specifies the firm’s formal reporting relationships, procedures, controls, and authority and decision-making processes

Answer 1

organizational structure

Question 2

Guide the use of strategy, indicate how to compare actual results with expected results, and suggest corrective actions to take when the difference is unacceptable

Answer 2

organizational controls

Question 3

Largely subjective criteria intended to verify that the firm is using appropriate strategies for the conditions in the external environment and the company’s competitive advantage

Answer 3

strategic controls

Question 4

Largely objective criteria used to measure the firm’s performance against previously established quantitative standards

Answer 4

financial controls

Question 5

A structure in which the owner-manager makes all major decisions and monitors all activities while the staff serves as an extension of the manager’s supervisory authority

Answer 5

simple structure

Question 6

Consists of a chief executive officer and a limited corporate staff, with functional line managers in dominant organizational areas such as production, accounting, marketing, R&D, engineering, and human resources

Answer 6

functional structure

Question 7

Consists of a corporate office and operating divisions, each operating division a separate business or profit center in which the top corporate officer delegates responsibilities for day-to-day operations and business-unit strategy to division managers

Answer 7

multidivisional (M-form) structure

Question 8

An M-form structure in which horizontal integration is used to bring about interdivisional cooperation

Answer 8

cooperative form

Question 9

An M-form consisting of three levels: corporate headquarters, strategic business units (SBUs), and SBU divisions

Answer 9

strategic business unit (SBU) form

Question 10

An M-form structure characterized by complete independence among the firm’s divisions that compete for corporate resources

Answer 10

competitive form

Question 11

Emphasizes national interests and facilitates the firm’s efforts to satisfy local differences

Answer 11

worldwide geographic area structure

Question 12

Decision-making authority is centralized in the worldwide division headquarters to coordinate and integrate decisions and actions among divisional business units

Answer 12

worldwide product divisional structure

Question 13

A structure drawing characteristics and mechanisms from both the worldwide geographic area structure and the worldwide product divisional structure

Answer 13

combination structure