Exam 11: Organizational Structure and Controls

High levels of formalization of rules and procedures which often emanate from the centralized staff are a characteristic of the structure used to implement the cost leadership strategy.

Describe the organizational structures used to implement the three international strategies.

The competitive form of the M-form structure is characterized by complete independence among the form's divisions. Unlike the divisions included in the cooperative structure, divisions that are part of the competitive structure do not share common strengths.

Firms seeking to compete on the basis of cost leadership particularly need support from the ____ and ____ functions.

An SBU structure consists of at least three levels: the top level, the corporate headquarters; the next level, the strategic business units (SBUs); and the final level, SBU divisions.

Which organizational structure will emphasize financial controls for headquarters' evaluation of operating units while the operating units will emphasize strategic controls within their units' performance?

Which of the following is NOT associated with an organizational structure that supports a cost leadership strategy?

Megaline, Inc., follows the competitive form of the multidivisional structure. It has five divisions. One division has not met the rate-of-return goals for the past year. One division has exceeded the rate-of-return goals. The other three divisions met the rate-of-return goals. The headquarters office is making decisions about where to allocate capital in the next year. Which scenario is the MOST likely?

One of the primary disadvantages of the global strategy and worldwide product divisional structure is that

To implement a related constrained strategy, firms should use the cooperative form of the multidivisional structure.

Distributed strategic networks are the organizational structure used to manage international cooperative strategies.

Organizational inertia often prompts top management to initiate structural change when organizational performance levels drop.

The integrated cost-leadership/differentiation strategy needs structural features that are partially centralized and partially decentralized, jobs that are semi-specialized, and rules and procedures that call for some formal and some informal job behavior.

Which of the following is NOT a variation of the multidivisional structure?

Firms implementing the multidomestic strategy often attempt to isolate themselves from global competitive forces by establishing protected market positions or by competing in industry segments that are most affected by differences among local countries.

McDonald's operates through a franchising system wherein the head office uses strategic and financial controls to ensure that the franchises are creating the greatest possible value. This is an example of a(an):

Centralized and formalized procedures allow for greater flexibility, an important factor for firms using a cost leadership strategy.

The centralized structure used by Borders (Chapter 11 Opening Case) did not provide information from local stores that might have been useful in changing its technology strategy more quickly than it did. This example illustrates the effect of structure on strategy.

Agatha Adams founded Insurance Specialists to process medical claims for physicians' practices. She plans to compete on the basis of cost, offering the lowest processing cost per claim in her market area. Ms Adams' company should

Companies and business units of large diversified firms using the cost leadership strategy should use strategic controls.