Question 1

What are the disadvantages of vertical integration?

Accepted Answer

Control of overlapping input and output domains enhances an organization's competitive advantage in its core domain and creates new opportunities for value creation. But an organization also needs to look at the bureaucratic costs associated with owning its suppliers and distributors.
The more an organization pursues vertical integration the larger it becomes, and the bureaucratic costs associated with managing the strategy rise sharply because of communication and coordination problems and the simple fact that managers are expensive to employ. Too much vertical integration can be a strategic mistake.

Question 2

Which of the following corporate-level strategies is most likely to have the lowest bureaucratic costs?

Accepted Answer

A)  related diversification 
B)  forward vertical integration 
C)  unrelated diversification 
D)  backward vertical integration 
A)  related diversification 
B)  forward vertical integration 
C)  unrelated diversification 
D)  backward vertical integration C

Question 3

The more an organization pursues vertical integration the larger it becomes, and the bureaucratic costs associated with managing the strategy rise sharply.

Accepted Answer

A) True 
 B)False  True

Question 4

A firm pursuing a low-cost strategy will likely have a mechanistic structure.

Accepted Answer

A) True 
 B)False

Question 5

What type of organizational structure is typically used by an organization that pursues the strategy of unrelated diversification?

Accepted Answer

When a company pursues unrelated diversi

Question 6

A company pursuing a multidomestic strategy generally operates with a ________ structure.

Accepted Answer

A)  global matrix 
B)  global product team 
C)  multidivisional matrix 
D)  global geographic 
A)  global matrix 
B)  global product team 
C)  multidivisional matrix 
D)  global geographic

Question 7

As companies change from a multidomestic to an international, global, or transnational strategy, they require a more complex structure, control system, and culture to coordinate the value-creation activities associated with implementing that strategy.

Accepted Answer

A) True 
 B)False

Question 8

3M and HP, invest heavily to improve their skills in R&D and product design. This is an example of a ________ strategy.

Accepted Answer

A)  functional-level 
B)  business-level 
C)  supply-level 
D)  corporate-level 
A)  functional-level 
B)  business-level 
C)  supply-level 
D)  corporate-level

Question 9

Which of the following functions typically has the most organic structure?

Accepted Answer

A)  sales 
B)  manufacturing 
C)  materials management 
D)  R&D 
A)  sales 
B)  manufacturing 
C)  materials management 
D)  R&D

Question 10

What are the advantages of vertical integration?

Accepted Answer

Vertical integration is a strategy in wh

Question 11

Which of the following statements is true regarding a global strategy?

Accepted Answer

A)  A global strategy is oriented toward cost reduction. 
B)  A company pursuing a global strategy completely decentralizes control to subsidiaries and divisions in each country in which it operates. 
C)  The bureaucratic costs incurred to solve communications and measurement problems are much higher for a company pursuing a global strategy than that pursuing a transnational strategy. 
D)  The organizational structure required for pursuing a multidomestic strategy is more complex than that required for pursuing a global strategy. 
A)  A global strategy is oriented toward cost reduction. 
B)  A company pursuing a global strategy completely decentralizes control to subsidiaries and divisions in each country in which it operates. 
C)  The bureaucratic costs incurred to solve communications and measurement problems are much higher for a company pursuing a global strategy than that pursuing a transnational strategy. 
D)  The organizational structure required for pursuing a multidomestic strategy is more complex than that required for pursuing a global strategy.

Question 12

________ strategy is a plan to use and combine an organization's functional core competences to position it so it has a competitive advantage in its domain or segment of its industry.

Accepted Answer

A)  Functional-level 
B)  Corporate-level 
C)  Business-level 
D)  Environmental-level 
A)  Functional-level 
B)  Corporate-level 
C)  Business-level 
D)  Environmental-level

Question 13

Typically, an organization that uses a low-cost strategy ________.

Accepted Answer

A)  is not leaders in product development 
B)  produce a wide range of products to suit the needs of different groups of customers 
C)  operates in a complex, uncertain environment 
D)  responds quickly to the changes in the environment of the organization 
A)  is not leaders in product development 
B)  produce a wide range of products to suit the needs of different groups of customers 
C)  operates in a complex, uncertain environment 
D)  responds quickly to the changes in the environment of the organization

Question 14

Which of the following structures is the most appropriate for an organization that pursues a low-cost strategy?

Accepted Answer

A)  functional structure 
B)  product team structure 
C)  organic structure 
D)  matrix structure 
A)  functional structure 
B)  product team structure 
C)  organic structure 
D)  matrix structure

Question 15

Typically, the sales function in an organization uses a tall, centralized structure to coordinate its activities.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following strategies is most likely to have the highest bureaucratic costs?

Accepted Answer

A)  unrelated diversification 
B)  backward vertical integration 
C)  related diversification 
D)  forward vertical integration 
A)  unrelated diversification 
B)  backward vertical integration 
C)  related diversification 
D)  forward vertical integration

Question 17

Which of the following core competences is most likely to be used by a company to create value while pursuing unrelated diversification?

Accepted Answer

A)  engineering expertise 
B)  core competences in material management 
C)  top-management's ability to efficiently control a group of organizations 
D)  control over a scarce resource 
A)  engineering expertise 
B)  core competences in material management 
C)  top-management's ability to efficiently control a group of organizations 
D)  control over a scarce resource

Question 18

A shoe manufacturer acquires the retail stores that sell its shoes. This is an example of a(n) ________.

Accepted Answer

A)  forward vertical integration 
B)  unrelated diversification 
C)  market penetration 
D)  sequential horizontal integration 
A)  forward vertical integration 
B)  unrelated diversification 
C)  market penetration 
D)  sequential horizontal integration

Question 19

The skills of Microsoft's software design group are an example of ________.

Accepted Answer

A)  organizational resources 
B)  rites of integration 
C)  functional resources 
D)  rites of enhancement 
A)  organizational resources 
B)  rites of integration 
C)  functional resources 
D)  rites of enhancement

Question 20

Which of the following functions would be responsible for implementing a just-in-time inventory system?

Accepted Answer

A)  manufacturing 
B)  R&D 
C)  marketing 
D)  materials management 
A)  manufacturing 
B)  R&D 
C)  marketing 
D)  materials management

What are the disadvantages of vertical integration?

Which of the following corporate-level strategies is most likely to have the lowest bureaucratic costs?

The more an organization pursues vertical integration the larger it becomes, and the bureaucratic costs associated with managing the strategy rise sharply.

A firm pursuing a low-cost strategy will likely have a mechanistic structure.

What type of organizational structure is typically used by an organization that pursues the strategy of unrelated diversification?

A company pursuing a multidomestic strategy generally operates with a ________ structure.

As companies change from a multidomestic to an international, global, or transnational strategy, they require a more complex structure, control system, and culture to coordinate the value-creation activities associated with implementing that strategy.

3M and HP, invest heavily to improve their skills in R&D and product design. This is an example of a ________ strategy.

Which of the following functions typically has the most organic structure?

What are the advantages of vertical integration?

Which of the following statements is true regarding a global strategy?

________ strategy is a plan to use and combine an organization's functional core competences to position it so it has a competitive advantage in its domain or segment of its industry.

Typically, an organization that uses a low-cost strategy ________.

Which of the following structures is the most appropriate for an organization that pursues a low-cost strategy?

Typically, the sales function in an organization uses a tall, centralized structure to coordinate its activities.

Which of the following strategies is most likely to have the highest bureaucratic costs?

Which of the following core competences is most likely to be used by a company to create value while pursuing unrelated diversification?

A shoe manufacturer acquires the retail stores that sell its shoes. This is an example of a(n) ________.

The skills of Microsoft's software design group are an example of ________.

Which of the following functions would be responsible for implementing a just-in-time inventory system?

Organizations and Organizational Effectiveness

Stakeholders, Managers, and Ethics

Organizing in a Changing Global Environment

Basic Challenges of Organizational Design

Designing Organizational Structure: Authority and Control

Designing Organizational Structure: Specialization and Coordination

Creating and Managing Organizational Culture

Organizational Design, Competences, and Technology

Types and Forms of Organizational Change

Organizational Transformations: Birth, Growth, Decline, and Death

Decision Making, Learning, Knowledge Management, and Information Technology

Innovation, Intrapreneurship, and Creativity

Managing Conflict, Power, and Politics

Filters

Exam 8: Organizational Design and Strategy in a Changing Global Environment

What are the disadvantages of vertical integration?

Which of the following corporate-level strategies is most likely to have the lowest bureaucratic costs?

The more an organization pursues vertical integration the larger it becomes, and the bureaucratic costs associated with managing the strategy rise sharply.

A firm pursuing a low-cost strategy will likely have a mechanistic structure.

What type of organizational structure is typically used by an organization that pursues the strategy of unrelated diversification?

A company pursuing a multidomestic strategy generally operates with a ________ structure.

As companies change from a multidomestic to an international, global, or transnational strategy, they require a more complex structure, control system, and culture to coordinate the value-creation activities associated with implementing that strategy.

3M and HP, invest heavily to improve their skills in R&D and product design. This is an example of a ________ strategy.

Which of the following functions typically has the most organic structure?

What are the advantages of vertical integration?

Which of the following statements is true regarding a global strategy?

________ strategy is a plan to use and combine an organization's functional core competences to position it so it has a competitive advantage in its domain or segment of its industry.

Typically, an organization that uses a low-cost strategy ________.

Which of the following structures is the most appropriate for an organization that pursues a low-cost strategy?

Typically, the sales function in an organization uses a tall, centralized structure to coordinate its activities.

Which of the following strategies is most likely to have the highest bureaucratic costs?

Which of the following core competences is most likely to be used by a company to create value while pursuing unrelated diversification?

A shoe manufacturer acquires the retail stores that sell its shoes. This is an example of a(n) ________.

The skills of Microsoft's software design group are an example of ________.

Which of the following functions would be responsible for implementing a just-in-time inventory system?

Organizations and Organizational Effectiveness

Stakeholders, Managers, and Ethics

Organizing in a Changing Global Environment

Basic Challenges of Organizational Design

Designing Organizational Structure: Authority and Control

Designing Organizational Structure: Specialization and Coordination

Creating and Managing Organizational Culture

Organizational Design, Competences, and Technology

Types and Forms of Organizational Change

Organizational Transformations: Birth, Growth, Decline, and Death

Decision Making, Learning, Knowledge Management, and Information Technology

Innovation, Intrapreneurship, and Creativity

Managing Conflict, Power, and Politics

Filters