Exam 11: Organizational Structure and Controls

Specialization refers to the extent to which authority for decision making is retained at higher managerial levels.

Firms such as Textron Inc. that frequently acquire and divest other firms are most likely to use the ______ structure.

The need for the organization to combine local responsiveness and efficiency is most critical in a ______ strategy.

Firms using the differentiation strategy need to respond quickly to environmental opportunities and threats. The structural features that are best for these requirements are centralization, specialization, and many rules and procedures.

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. This company probably uses the ______ strategy.

There are three variations of the multidivisional structure.

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

Jumbo Industrial Supply has grown from a one-location firm with a restricted product line to a multi-state organization with numerous product lines and a large sales staff. Sales have doubled every year for the last three years. It currently has a simple structure with Jared Smith, the owner-manager, making all major decisions. Jumbo is probably now experiencing or will soon experience:

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

Walmart's effective strategy/structure configuration is:

Ortiz is a manager of BRS Corp. Ortiz's division did not meet financial targets this year. Ramirez, manager of another division, has indicated that Ortiz's division incurred significant costs which resulted in Ramirez's division setting record profits for the year. As a result, performance for BRS as a whole exceeded projections. Which pairing of organizational structures for BRS and bonus for Ortiz is most plausible?

In the ______ structure hierarchy, the headquarters relies on strategic controls to set rate-of-return targets and financial controls to monitor divisional performance relative to those targets.

To properly execute strategic controls in firms using related diversification, the executives must have a deep understanding of each unit's business-level strategy.

If firms band together in a large number of vertical complementary strategic alliances, there is a danger that the government will suspect them of illegal collusive activities.

When a corporation pursues a related constrained diversification strategy, financial controls may not add value to strategy implementation efforts because it is difficult to:

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

Describe the three major types of organizational structure and their appropriate use.

A private university is made up of various "schools," such as the School of Journalism, the School of Business, the School of Law, the School of Arts and Sciences, and so forth. The university is experiencing some financial problems, so the administration has decided to have each school of the university become a profit center. This scheme is somewhat parallel to the ______ organizational structure.

A firm pursuing a related constrained diversification strategy would typically need all of the following EXCEPT:

Selecting the organizational structure and controls that effectively implement the chosen strategy is a challenge for managers because: