Exam 11: Organizational Structure and Controls

Firms such as Textron Inc.that frequently acquire firms and divest assets are MOST likely to use the __________ structure.

RueLim Industries has experienced tremendous growth recently.Two downsides to this expansion have been increased costs and negative environmental effects.If RueLim wants to reduce costs, it would make sense to purse a corporate-level strategy.But such a strategy could not be used to mitigate the environmental effects of the company's growth.

A strategic network can be characterized as a loose federation of partners participating in the network's operations on a flexible basis.

Toyota uses a strategic network of vertical relationships.Toyota enables engineers in supplier firms to communicate easily with companies with which Toyota has contracts for services.This results in the suppliers and Toyota (the strategic center firm) being more:

The simple structure is used by owner-managed firms that are characterized by informal relationships, few rules, limited task specialization, and unsophisticated information systems.

As a firm grows, it typically shifts from a simple structure to a functional structure.

Alliances of organizations in the same stage on the value chain are known as vertical alliances.

In the competitive form of the multidivisional structure, the focus of headquarters is on all of the following EXCEPT:

The divisions within each strategic business unit (SBU) are related in terms of shared products or markets, but the divisions of one SBU have little in common with the divisions of the other SBUs.

Which of the following statements about organizational structures for implementing business-level strategies is true?

Icarus Aviation, Athena Instrumentation, and Hercules Miniaturization are strategic business units of Olympia Industries.One can expect that Icarus, Athena, and Hercules:

The need for the organization to combine local responsiveness with economies of scale is most critical in a __________ strategy.

With a related diversification corporate-level strategy, financial controls are used by corporate leaders to verify the sharing of appropriate strategic factors such as knowledge, markets, and technologies across businesses.

The cooperative form is an M-form structure in which horizontal integration is used to bring about interdivisional cooperation.

Over time, large and complex organizations must customize their structure to fit their unique strategic needs.

Galatea Foods was founded in Greece by Galatea Chronos in 1978, and the company spread rapidly through Western Europe.Ms.Chronos retains the office of CEO.The Spanish division is headed by her oldest son.The North European division is headed by her only daughter, and the French-Italian division is headed by Ms.Chronos' brother.Each of those divisions operates independently and makes decisions based on national interests where they are located.This company probably uses the __________ strategy.

In an SBU structure, __________ is/are evaluated using strategic controls, whereas __________ is/are evaluated using financial controls.

Strategic controls are 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 advantages.

In most cases, the focus strategy is best managed using a __________ structure.

Firms switch from a functional structure to a multidivisional structure because greater levels of environmental complexity and uncertainty make it necessary for the firm to develop cooperative relationships with its stakeholders.