Deck 9: Organizational Agility

Question 1

The formal structure of an organization is primarily put in place to

A)control people, decisions, and actions.
B)develop a process for investing returns.
C)increase rates of promotion.
D)allow for intrapreneurship.
E)encourage entrepreneurship.

Answer 1

A

Question 2

Organic firms are ________ changing competitive demands.

A)faster at responding to
B)slower at responding to
C)usually unaware of
D)less likely to catch up with
E)unconcerned about

Answer 2

A

Question 3

A ________ gives value to customers, makes the company's products different from-and better than-those of competitors, and helps in creating new products.

A)hierarchy
B)mechanistic organization
C)board of directors
D)bureaucracy
E)core capability

Answer 3

E

Question 4

If jobholders rely more heavily on judgment than on rules, the organization most likely has a(n)________ structure.

A)mechanistic
B)hierarchical
C)matrix
D)organic
E)departmentalized

Question 5

In a lean manufacturing organization, the emphasis is on cost, efficiency, and hierarchy.

Question 6

The knowledge, expertise, or skill that underlies a company's ability to be a leader in providing a range of goods or services is known as a

A)dynamic network.
B)continuous process.
C)core capability.
D)cognitive ability.
E)knowledge flow.

Question 7

A value chain is the sequence of activities that flow from raw materials to the delivery of a good or service, with value subtracted at each step.

Question 8

In order to develop a world-class capability, a company should first

A)strive to win market share for specific products.
B)purchase more capital assets to improve profits.
C)hire more people in anticipation of economic downturns.
D)commit to excellence and leadership in capabilities.
E)maintain and grow the stock price.

Question 9

Bianca is CEO of That Special Something, a chain of fifteen, upscale gift shops in the western United States. She wants to expand her profits, and keep customers in the store for longer periods of time, by adding a small coffee and dessert shop to each store. With this in mind, Bianca is considering partnering with another company. Of the five candidates under consideration, the best choice would be the company

A)that offers coffee and baked goods at the lowest price, with an emphasis on maximizing profits and customer turnover.
B)that wants Bianca to handle all aspects of management related to the in-store coffee shops.
C)run by a CEO who insists on keeping full control of the coffee shops' marketing, staffing, and other elements.
D)with a go-with-the-flow attitude and a goal to turn a $2 million profit by the end of the first year.
E)that specializes in gourmet coffee and treats and is interested in helping host after-hours dessert and shopping events.

Question 10

It is a challenge for companies to be both big and small to capitalize on the advantages of each.

Question 11

A strategic alliance can be made with just about any other organization except one's competitors.

Question 12

A form of organization that is similar to Max Weber's description of a bureaucracy is a(n)________ organization.

A)specialized
B)organic
C)mechanistic
D)matrix
E)decentralized

Question 13

As operations manager for Osan Electronics, Jun is seeking to enhance the company's core capabilities in order to make it more competitive in an ever-changing market. To that end, the company should concentrate on

A)improving its relationship with its plastics supplier.
B)updating its website and shipping department.
C)developing new training standards for its stereo assembly line workers.
D)revamping their system for developing new electronics.
E)training its human resource department to deal with conflict more efficiently.

Question 14

Usually, companies with higher volumes of products tend to offer more varieties.

Question 15

Scott confided in his fellow division manager, "Jean, our company is bogged down with formal structural requirements. We must convince our executive leadership that today's fast-changing business environment requires that we be ________, that is, quick and agile. Our firm's survival is at stake."

A)responsive
B)large
C)quality-oriented
D)cost conscious
E)cautious

Question 16

Ricardo is the owner of Mex Magic, a chain of restaurants serving reasonably priced Mexican food with fresh, healthy ingredients. He has discovered that the rising price of avocados and some of the other fresh produce the restaurants use has been driving down profits. Customers have come to expect high-quality ingredients for a low price, and Mex Magic's marketing research has shown that the upscale interior of the stores, along with its great customer service, are a big draw. The feedback has also shown that a large percentage of the customers come with children. If Mex Magic is be truly responsive to its market environment while maximizing profits, Ricardo should

A)adapt to the rising cost of avocados by raising the price of guacamole on the menu.
B)reduce the wait staff, as well as the number of cashiers, in order to lower payroll costs.
C)add child-friendly entrees that include fries or chips instead of guacamole.
D)consider removing menu items that rely heavily on fresh ingredients.
E)expand the bar so as to draw in more adult customers, with or without children.

Question 17

To be successful, partners in a strategic alliance must pay the most attention to the ________ the partnership.

A)human relationships in
B)financial aspects of
C)public relations side of
D)hierarchical structure of
E)lines of authority in

Question 18

The ________ structure is an organizational form that emphasizes flexibility.

A)systematic
B)mechanistic
C)bureaucratic
D)scientific
E)organic

Question 19

Strategies and structures are based on the firm's core capabilities, its strategic alliances, its ability to learn, and its ability to engage all the people in the organization in achieving its objectives.

Question 20

Marcia Chan, CEO of Western Medical, told her executive management team, "We enjoy ________ capabilities-that is, we have the basic administrative, personnel, and operational functions necessary to sell our services. But we need to build upon our higher level ________ capabilities-those strategic activities that adapt rapidly to or even shape our business environment. Right now, we do the basic things right. But soon, I want us to be doing the right things at the right time. That will give us a sustainable competitive advantage."

A)strategic; tactical
B)ordinary; dynamic
C)internal; external
D)efficient; effective
E)methodical; fast-paced

Question 21

In a(n)________ organization, top management ensures that there is consensus about the direction in which the business is heading.

A)autocratic
B)high-involvement
C)mechanistic
D)network
E)customer-centric

Question 22

Continual feedback to participants regarding how they are doing compared with the competition and how effectively they are meeting the strategic agenda, is particularly important in

A)time-based competition.
B)customer relationship management.
C)total quality management.
D)small batch technology.
E)a high-involvement organization.

Question 23

Abila's family, which recently moved to the United States from Lebanon, is highly skilled in working with leather goods. They had a small manufacturing and distribution company back home, and they have decided to start a new company in the midwestern city where they now live. Abila's organizational and leadership abilities have made her a natural choice to run the venture, Levantine Leather Goods, and at first business is good. Levantine soon develops a reputation for personalized service, and customers know that special orders are never a problem. However, Abila and her company soon face stiff competition from Allied Equipment Supply, a nationwide retail chain that sells leather goods, among other items, as prices significantly lower than those charged by Levantine. In order to effectively compete, Abila's company should

A)go head-to-head with Allied Equipment Supply on the national level.
B)focus on providing quality goods in a timely fashion to niche markets.
C)stop providing customized service, which is costly and time-consuming.
D)adopt a low-price, high-volume strategy to retain its customer base.
E)dramatically increase its workforce in order to expand production.

Question 24

Large organizations are typically ________ than small ones.

A)less organic and more bureaucratic
B)more organic and less bureaucratic
C)more organic and more bureaucratic
D)less organic and more flexible
E)more organic and less flexible

Question 25

"We pride ourselves on being a high-involvement organization. That's a competitive advantage for us," said Sergei Romanoff, CEO of Industrial Machine Products, Inc., to his division presidents. "Therefore, as we consider expanding overseas, we must

A)build a taller and more centralized organizational structure."
B)maintain confidentiality about this strategic decision."
C)gain consensus and feedback from our lower-level managers about this business direction."
D)avoid providing feedback to our strategic planning team about how we are doing compared to our global competitors."
E)discourage employee participation if our planning activities are complex or require coordination and commitment."

Question 26

Organizations that are less organic and more bureaucratic are usually ________ organizations.

A)small
B)flat
C)nonbureaucratic
D)large
E)medium-sized

Question 27

Baker Thompson, CEO of Unicorn Construction, announced to his executives, "I have decided that we are going to pursue the largest highway project ever funded in this state. To give us the depth and breadth necessary to be considered for this five-year contract award, we will team with Parker Industrial, our toughest competitor, through a strategic alliance. Our strengths complement their weaknesses, and vice versa. To ensure that we have a true partnership with Parker Industrial on this major joint undertaking, I expect you to

A)work hard to develop a positive working relationship with Parker Industrial, our most formidable competitor."
B)pay attention to just the end result, not on how we will get there."
C)disallow any differences between the two organization."
D)place great emphasis on formal systems and structures."
E)let our highway project manager do what he does best-manage-without any oversight on our part."

Question 28

A strategic alliance is a(n)

A)organization skilled at creating, acquiring, and transferring knowledge and at modifying its behavior to reflect new knowledge and insights.
B)firm in which top management ensures that there is consensus about the direction in which the business is heading.
C)independent grassroots effort whose goal is to create a sustainable organization that helps solve important social problems.
D)way of managing in which everyone is committed to continuous improvement of his or her part of the organization.
E)formal relationship created among independent organizations with the purpose of joint pursuit of mutual goals.

Question 29

Scientific Solutions, Inc. and BuildIt Corporation occasionally compete with one another in the marketplace. A new business area is emerging that appeals to both firms. However, organizations that will successfully compete in the new business area will need to have a robust laboratory capability as well as an established construction capability. Scientific Solutions has the former, and BuildIt has the latter. Although unusual for two competitors, they negotiate and create a(n)________. Under the terms of this formal agreement, Scientific Solutions and BuildIt jointly pursue their mutual goals.

A)merger
B)strategic alliance
C)acquisition
D)vertical integration
E)related diversification

Question 30

"I'm happy to report that we have tripled in size in the past decade, and we are now the largest sporting goods retailer in the Northeast," said Chelsea Hughes, Executive VP of Strategy. "Our challenge going forward is to be big, yet act small, to capitalize on the advantages of each. One way that we can accomplish this is to

A)increase bureaucracy."
B)lessen opportunities for economies of scope."
C)acknowledge that buying power is not important."
D)decentralize decision making and organize around small, adaptive, team-based work units."
E)recognize that small size always hinders speed."

Question 31

Which of the following statements about types of economies is true?

A)An organization's small size often creates scale economies and economies of scope.
B)An organization's small size often creates scale economies but not economies of scope.
C)An organization's large size often creates scale economies and economies of scope.
D)An organization's large size often creates scale economies but not economies of scope.
E)An organization's large size often creates economies of scope but not scale economies.

Question 32

The planned elimination of positions or jobs is known as

A)buffering.
B)downsizing.
C)expanding.
D)offshoring.
E)outsourcing.

Question 33

When a chain of coffee shops teams with a communications company to provide faster wireless Internet service to its customers, this is an example of

A)continuous process.
B)a strategic alliance.
C)mass customization.
D)an organic structure.
E)the value chain.

Question 34

The advantages of a small organization include

A)scale economies.
B)lower proportional operating costs.
C)greater purchasing power.
D)easier access to capital.
E)greater employee involvement.

Question 35

A company that is exceptional at providing quality goods and services to targeted market niches is likely to be

A)small.
B)large.
C)bureaucratic.
D)narrow.
E)mechanistic.

Question 36

An ambidextrous organization should focus on exploration and

A)examination.
B)excellence.
C)expertise.
D)expectation.
E)exploitation.

Question 37

Large companies can typically lower costs per unit of production, meaning that large size allows for

A)large batching.
B)value chaining.
C)lean manufacturing.
D)scale economies.
E)economies of scope.

Question 38

Advantages of large organizations include

A)the ability to move fast.
B)the ability to target market niches.
C)a reduction of bureaucracy.
D)easier access to capital.
E)greater employee involvement.

Question 39

Structurally, a high-involvement organization is usually

A)task-oriented and bureaucratic.
B)flat and decentralized.
C)hierarchical and centralized.
D)customer-centric and centralized.
E)highly departmentalized.

Question 40

Sandra, the CEO of Danforth & Caldwell, seeks input from both her top management team and the lower levels of the company before she decides on strategies about the future direction of the company. Judging from this, Danforth & Caldwell is a(n)________ organization.

A)mechanistic
B)high-involvement
C)flat
D)just-in-time
E)authoritarian

Question 41

The recession that began in 2008 forced widespread downsizing across many industries, and although companies rehired workers once the recovery began, tough competition still dictates that they

A)attempt to reduce unemployment anxiety.
B)stay as lean as possible.
C)focus on retraining workers.
D)attempt to emulate other companies.
E)switch to more mechanistic methods.

Question 42

Diseconomies of scale refers to the

A)environmental forces that negatively impact business growth.
B)realization of lower per-unit costs.
C)costs associated with an organization being too big.
D)use of materials or processes in related products or services.
E)fluctuations in the national economy.

Question 43

The sequence of activities that flow from raw materials to the delivery of a good or service, with additional value created at each step, is known as the

A)customer chain.
B)value chain.
C)customer hierarchy.
D)value hierarchy.
E)service sequence.

Question 44

An effective option for employers considering downsizing is

A)laying off a portion of the workforce so that new people can be hired when needed.
B)making large and frequent layoffs to increase productivity.
C)engaging in massive hiring so that productivity is not affected.
D)replacing full-time employees with less expensive part-time or temporary workers.
E)implementing involuntary early retirement for employees over 50 years old.

Question 45

Total quality management is characterized by a strong orientation toward both external and internal

A)stockholders.
B)suppliers.
C)customers.
D)managers.
E)regulators.

Question 46

Franz wants to balance the strategic triangle for his company. To do this, he must consider the competition, the customer, and the

A)company itself.
B)government.
C)board of directors.
D)suppliers.
E)shareholders.

Question 47

A company that receives certification that it meets ISO 9001 standards is a company that

A)has achieved a total quality effort.
B)has begun the process of achieving quality.
C)has attained perfection within its field.
D)must make serious quality improvements.
E)can train other organizations in quality procedures.

Question 48

Economies of scope refers to the idea that

A)producing large quantities results in lower costs per unit produced.
B)materials and processes employed in one product can be used to make related products.
C)getting products to market ahead of the competition is, often, a key to success.
D)the producer with the greatest percentage of market share has maximum staying power.
E)the variety of products offered indicates sustainable economic growth.

Question 49

The company, the competition, and the customer make up the

A)profit gateway.
B)structure foundation.
C)strategic triangle.
D)control cycle.
E)profit pyramid.

Question 50

The strategic triangle of a business unit consists of

A)executives, board members, and employees.
B)distributors, consumers, and suppliers.
C)the company, the competition, and customers.
D)materials, production, and sales.
E)financiers, customers, and competitors.

Question 51

An organization that creates scale economies and economies of scope, which leads to advantages such as lower operating costs, greater purchasing power, and easier access to capital is likely to be characterized by

A)large size.
B)high flexibility.
C)mass customization.
D)centralized structure.
E)high agility.

Question 52

Cameron wants to improve her customer service department by using information technologies to create two-way conversations with customers to gain more knowledge of their wants and preferences. Cameron wants to institute ________ management.

A)total quality
B)customer relationship
C)mass customization
D)just-in-time
E)computer-integrated

Question 53

Among the support activities in the generic value chain is

A)research and development.
B)operational management.
C)outbound logistics.
D)technology development.
E)marketing and sales.

Question 54

The top management team at Universal Manufacturing Co., Inc., has decided that it needs to close one of its divisions and eliminate a level of middle management in the surviving divisions. This is an example of

A)smoothing.
B)domain selection.
C)downsizing.
D)buffering.
E)benchmarking.

Question 55

A multifaceted process focusing on creating two-way exchanges with customers to foster intimate knowledge of their needs, wants, and buying patterns is called ________ management.

A)customer relationship
B)total quality
C)human resource
D)customer analytics
E)buyer-behavior

Question 56

The term customer now refers to any

A)recipient of goods or services-the buyer or user.
B)user of the end product-the next person in the service chain.
C)consumer with whom a relationship is maintained.
D)recipient of work-the next person or unit in the production process.
E)consumer or user of the end product-whoever they may be.

Question 57

Because Jupiter Industries is a very large company, it can use the same process to manufacture multiple related products. This type of efficiency is referred to as an economy of

A)scale.
B)production.
C)agility.
D)scope.
E)size.

Question 58

Downsizing in organizations refers to the

A)planned elimination of positions or jobs.
B)decrease in product volume and variety.
C)transition from corporate equity to corporate debt.
D)sale of less efficient operating units.
E)decrease in the use of organizational resources.

Question 59

In Japanese operations strategy, kaizen refers to

A)zero defects.
B)total quality management.
C)value chain.
D)continuous improvement.
E)buffering.

Question 60

Assuming the situation is unlikely to change in the near future, a company is most likely to downsize when

A)their workforce moves elsewhere.
B)production costs increase.
C)demand for their product falls.
D)the supply chain is ruptured.
E)the market becomes overly competitive.

Question 61

If the move toward ________ is simply a harsh, haphazard cost-cutting approach, the result will be chaos, overworked people, and low morale.

A)flexible factories
B)lean manufacturing
C)computer-integrated manufacturing
D)quality management
E)mass customization

Question 62

One of the most important contributors to total quality management has been the introduction of statistical tools to analyze the causes of product defects, an approach called

A)six sigma quality.
B)concurrent engineering.
C)value chain management.
D)just-in-time (JIT).
E)ISO 9001.

Question 63

Ramon de la Cruz, CEO for Big Four Corporation, announced to his executive management team that he has decided to implement ________ at the Lakeview plant. The CEO stated, "With this implementation, I want to eliminate unnecessary steps in the production process and continually strive for improvement. We must emphasize productivity, quality, and cost-effectiveness. We must eliminate underused staff positions and waste."

A)lean manufacturing
B)mass customization
C)just-in-time delivery
D)computer-integrated manufacturing
E)formalization

Question 64

Among the primary activities in the generic value chain is

A)firm infrastructure.
B)human resource management.
C)technology development.
D)inbound logistics.
E)resource procurement.

Question 65

Erik, a management intern at Struebing, Inc., was tasked with investigating ways for Struebing to more effectively compete on a global basis. He was intrigued to learn about ________ as a framework by which to improve quality and to gain certification in accordance with these quality standards.

A)ISO 9001
B)TQM 2001
C)JIT
D)STP 5000
E)IPO

Question 66

With the cost of warehouse space and maintaining inventory increasing, Parker has decided to change the operation of his company to a "just-in-time" (JIT)mode, whereby manufacturing is initiated only upon customer order and only in very small lots, minimizing the company's warehouse and inventory costs. However, Parker is nervous about the change because he knows that JIT offers costs savings only when the costs of storing product are greater than the costs of

A)rework.
B)TQM.
C)delivery.
D)small batches.
E)large batches.

Question 67

An important component of time-based competition is

A)mass customization.
B)concurrent engineering.
C)product stockpiling.
D)bureaucratic structure.
E)reactive design.

Question 68

According to W. Edwards Deming's 14 points of quality, managers should

A)strive for short-term improvement.
B)ensure compliance at all costs.
C)eliminate slogans and buzzwords.
D)reinforce the use of numerical quotas.
E)implement a top-down management style.

Question 69

The "sigma" in the term "six sigma quality" refers to Greek letter used to designate the estimated standard deviation or variation in a process. The higher the sigma level, the ________ and the higher the quality.

A)higher the amount of variation
B)lower the quotient of indeterminacy
C)higher the index of deviation
D)lower the amount of variation
E)higher the quotient of indeterminacy

Question 70

In a small batch organization,

A)the structure is likely to be mechanistic.
B)decision making is typically centralized.
C)people tend to make mutual adjustments.
D)procedures are formal and rule-oriented.
E)the emphasis is on low variety and high volume.

Question 71

Jordan is the marketing head of Hastings Comprehensive Systems. He usually strives for long-term improvement rather than short-term profit, regardless of the economic environment. In the context of Deming's 14 points of quality, this is an example of

A)creating constancy of purpose.
B)adopting a new philosophy.
C)removing barriers to pride in workmanship.
D)taking action to accomplish the transformation.
E)offering training and retraining.

Question 72

In order to meet six sigma standards, the figure 99.99966 is significant because that is the percentage of

A)team members trained in total quality management.
B)products delivered through the value chain.
C)time that a product or process should be defect-free.
D)time that kaizen, or continuous improvement, is maintained.
E)products that comply with ISO 9001.

Question 73

A company that provides goods or services in very low volume or small batches is called a ________ shop.

A)job
B)batch
C)small
D)custom
E)specialty

Question 74

Decision making in a small batch organization is best described as

A)inorganic.
B)regulated.
C)decentralized.
D)rigid.
E)hierarchical.

Question 75

Leo's company produces a high volume of bicycle helmets, yet they come in a high variety of distinctive styles. The company is engaging in

A)individual production.
B)flexible production.
C)mass production.
D)mass customization.
E)individual customization.

Question 76

Integrative mechanisms that aid group problem solving, information sharing, and cooperation across business functions are all necessary for

A)computer-integrated manufacturing.
B)time-based competition.
C)customer relationship management.
D)total quality management.
E)high-involvement organizations.

Question 77

Fritz told his management team, "Our workflow occurs in an orderly, yet slow, process, from research to engineering to manufacturing. To be more competitive, we must speed up our research and product development through the use of ________. In this manner, we will incorporate the issues and perspectives of all the functions-including suppliers and customers-from the beginning of the process."

A)small batch processing
B)concurrent engineering
C)just-in-time production
D)large batch processing
E)standardization

Question 78

An integrative approach to management that supports the attainment of customer satisfaction through a wide variety of tools and techniques, resulting in high-quality goods and services is

A)total quality management.
B)customer relationship management.
C)value-added manufacturing.
D)mass customization methodology.
E)computer-integrated manufacturing.

Question 79

According to Deming's 14 points of quality, ________ are contrary to the idea of continuous improvement and must be eliminated.

A)numerical quotas
B)retraining programs
C)value chains
D)strategic alliances
E)just-in-time operations

Question 80

Jasmine manages a factory that manufactures automotive wiring harnesses. Her customers require that their suppliers be ________ certified, so that the suppliers' products are compliant with specified voluntary quality standards-standards that are recognized worldwide.

A)Sarbanes-Oxley
B)ISO 9001
C)small batch
D)large batch
E)JIT