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What are multidivisional structures? How are they implemented?

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As a firm diversifies into different pro...

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While working a night job at a call center, Eric creates an app called EatOut, which can be used to place orders at restaurants, rate the restaurants, and make reservations. Because he receives good responses for his app, he quits his current job to focus his efforts on EatOut. He creates a start-up called BestApps and hires three people to help him improve EatOut and maintain the servers that run it. In this scenario, BestApps most likely has a ________ structure.


A) simple
B) matrix
C) mechanistic
D) functional

E) A) and C)
F) A) and D)

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Keyhole Corporation is the parent company of Inspire.com and Roker Inc. To cut costs, Keyhole integrated InSpire.com's and Roker Inc.'s management functions with Keyhole's management, while keeping other functions such as product development independent. Keystone has encourage the senior teams at both Inspire and Roker to exploit the success of their existing products while exploring new products for the future. This scenario best exemplifies a(n)


A) multidivisional structure.
B) organic organization.
C) simple structure.
D) ambidextrous organization.

E) All of the above
F) A) and C)

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Once a firm finds success in a given organizational structure, it should seek to reinforce and maintain that structure for the life of the firm.

A) True
B) False

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Why is it difficult to imitate the organizational culture of firms like Southwest Airlines and Zappos?


A) Their culture reflects complex relationships with their employees, customers, and suppliers.
B) They produce products that cannot be copied easily because of their complex designs.
C) The employees in the organization themselves are unaware of the factors contributing to their organizational culture.
D) It is not commercially viable for other companies to implement the same culture.

E) B) and C)
F) All of the above

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In which of the following ways does Zappos achieve organizational control?


A) It continually changes the organizational values that guide its employees.
B) It refrains from monitoring its employees' calls.
C) It encourages employees to be creative and innovate and to go the extra mile to deliver a wonderful customer experience.
D) It enforces that each group member's compensation depends in part on the group's overall productivity.

E) B) and D)
F) A) and D)

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Firms with a flat structure and a low degree of specialization tend to foster innovation better than firms with a tall structure and high degree of specialization.

A) True
B) False

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Organizational design is


A) the process of creating, implementing, and modifying the structure of an organization.
B) primarily focused on replacing a firm's competitive advantage with competitive parity.
C) a process that always functions independently of strategy formulation.
D) primarily focused on formulating effective strategies, not implementing them.

E) C) and D)
F) A) and C)

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________ define appropriate employee attitudes and behaviors.


A) Values
B) Artifacts
C) Appraisals
D) Norms

E) A) and D)
F) C) and D)

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Tina is the inventor of a personal fitness tracking device, and she is in the process of hiring employees after receiving investment funding. When considering how to structure her company, she should


A) emulate the structure of the leading firm in the industry.
B) first establish a strategy and let that be her guide.
C) choose the structure that will give her the most control.
D) ask employees what structure they are most comfortable with.

E) None of the above
F) B) and C)

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Tony's Tacos is a nationwide fast-food chain. Decision power resides at the top of the organization. Each job is documented in minute detail. The firm has many levels of supervision, including vice presidents and regional managers. Tony's headquarters provides detailed instructions to each of its franchisees so that they provide comparable quality and service across the board. Based on this scenario, which of the following is an accurate statement about Tony's?


A) Tony's has a low degree of specialization and formalization, a high degree of centralization, and relies on a flat hierarchy.
B) Tony's has a high degree of specialization and formalization, a low degree of centralization, and relies on a tall hierarchy.
C) Tony's has a high degree of specialization, formalization, and centralization and relies on a tall hierarchy.
D) Tony's has a low degree of specialization, formalization, and centralization and relies on a flat hierarchy.

E) A) and D)
F) B) and C)

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A planned emergence approach to strategic planning is most likely to be found in a highly centralized firm.

A) True
B) False

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Which of the following best exemplifies the use of input controls?


A) McDonald's use of standard operating procedures
B) GM's use of the multidivisional strategy
C) Zappos' use of monitoring-free customer service calls
D) Southwest Airline's use of employee friendliness

E) None of the above
F) A) and B)

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Which of the following features helps match a cost-leadership strategy to a functional structure?


A) decentralization
B) process and product innovations
C) flexibility and mutual adjustment
D) focus on economies of scale

E) B) and D)
F) A) and B)

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Two leading home appliance companies, Redwood Inc. and Boxer Technologies, are in competition for market share. In their quest for exciting new products, Redwood employs an open innovation model, while Boxer pursues a closed innovation model. Which of the following statements is most likely true?


A) Redwood has a greater chance of capturing market share.
B) Boxer has a superior absorptive capacity.
C) Boxer will protect its intellectual property with patents and trade secrets.
D) Redwood is most concerned with securing first-mover advantages.

E) A) and C)
F) B) and D)

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An organization that is organized according to strategic business units (SBUs) and also along organizational structures is most likely using a ________ structure.


A) functional
B) multidivisional
C) matrix
D) simple

E) None of the above
F) B) and C)

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Galaxy Toys Inc., a toy manufacturing company, encourages its employees to enjoy their work by taking on additional responsibilities or switching jobs with each other. It allows its employees immense flexibility in charting their own career path within the organization. Chris has worked at Galaxy Toys for eight years, but has never had a boss or supervised an employee. Which of the following is most likely true in this scenario?


A) Galaxy Toys Inc. is a mechanistic organization.
B) Galaxy Toys Inc. has a flat organizational structure.
C) Galaxy Toys Inc. has a high degree of centralization.
D) Galaxy Toys' organizational culture is governed by codified rules.

E) A) and B)
F) A) and C)

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Butterfly Technologies produces touch-enabled wearable devices. Its research and development team recently became aware of a new, open-source technology produced by a firm overseas that would improve the processing speed and battery life of all Butterfly devices. In this scenario, Butterfly would be best served to embrace


A) open innovation.
B) closed innovation.
C) disruptive innovation.
D) radical innovation.

E) B) and D)
F) A) and B)

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InSeason Inc. started a chain of organic supermarkets that had initial success. The managers achieved a mastery of the firm's current environment, thereby filling a need in the market. However, InSeason defined and measured it success by financial metrics, with a focus on short-term performance. As a result, the firm put in place metrics and systems to accommodate and manage increasing firm size due to continued success. As a result of this tightly coupled system, InSeason developed a


A) resistance to change.
B) innovative approach.
C) significant value gap.
D) holacratic system.

E) A) and D)
F) B) and C)

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What are the implications of centralization on strategic management processes in an organization?

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Centralization refers to the degree to w...

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