Professional Documents
Culture Documents
The purpose of organizational structure is to provide managers with specific feedback on how well an organization
and its members are performing and building competitive advantage.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
2. An important purpose of control systems is to motivate employees to work toward increasing efficiency, quality,
innovation, and responsiveness to customers.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
3. A division is a way of grouping functions to allow an organization to better produce and dispose of its goods and
senriCes.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
4. Span of control refers to the number of subordinates who report directly to one supervisor.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.15.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
5. The reward system affects motivation, however, the type of organizational culture that develops in a company is
primarily affected by the founder's values and not the reward system.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.15.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Comprehension
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.15.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
7. Organizational structure contributes to the strategy formulation by providing the framework of tasks and roles that
reduces transaction difficulties and allows employees to think and behave in ways that allow a company to achieve
superior performance.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.15.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
8. Bradley is a new employee in the sales department at a local car dealership. In his first few months on the job, he
will be learning the norms and values of the organization. This refers to organizational socialization.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: SMIA.HILL.15.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thinking
KEYWORDS: Bloom's: Application
9. Effective organizational design can allow a company to obtain a competitive advantage but it has no impact on
profitability.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.15.12.02- Discuss how effective organizational design enables a
company to increase product differentiation, reduce its cost structure, and build
competitive advantage
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Comprehension
10. Control systems can help managers evaluate how efficiently they are producing goods and services.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.02- Discuss how effective organizational design enables a
company to increase product differentiation, reduce its cost structure, and build
competitive advantage
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
11. Controls at each level should provide the basis on which managers at the levels below design their control systems.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.02- Discuss how effective organizational design enables a
company to increase product differentiation, reduce its cost structure, and build
competitive advantage
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
12. Information technology (IT) is playing an increasing role in strategy formulation. However, strategy implementation
is not affected by IT in general.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.02- Discuss how effective organizational design enables a
company to increase product differentiation, reduce its cost structure, and build
competitive advantage
NATIONAL STANDARDS: United States- BUSPROG: Technology
KEYWORDS: Bloom's: Knowledge
13. Effective strategy implementation is very important for cost leaders, but it is of less importance to differentiators.
a. True
b. False
ANSWER: False
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.02- Discuss how effective organizational design enables a
company to increase product differentiation, reduce its cost structure, and build
competitive advantage
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Comprehension
14. For each function, a cost leader adopts output controls that allow it to monitor and evaluate functional performance
closely.
a. True
b. False
ANSWER: True
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.02- Discuss how effective organizational design enables a
company to increase product differentiation, reduce its cost structure, and build
competitive advantage
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
15. Flat structures can lead to information distortion when data are being sent either up or down the hierarchy.
a. True
b. False
ANSWER: False
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.03 -Explain why it is so important that managers keep the
organizational hierarchy as flat as possible and what factors determine the way they
decide to centralize or decentralize authority
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Comprehension
16. When companies become too tall and the chain of command too long, strategic managers tend to lose control over
the hierarchy and, subsequently, their strategies.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.03 -Explain why it is so important that managers keep the
organizational hierarchy as flat as possible and what factors determine the way they
decide to centralize or decentralize authority
NATIONAL STANDARDS: United States- BUSPROG: Communication
KEYWORDS: Bloom's: Knowledge
17. Research finds that centralization of authority is never advantageous, not even in time of crisis.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.03 -Explain why it is so important that managers keep the
organizational hierarchy as flat as possible and what factors determine the way they
decide to centralize or decentralize authority
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Comprehension
18. The need for integrating mechanisms is greater when a company's structure is more complex.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.03 -Explain why it is so important that managers keep the
organizational hierarchy as flat as possible and what factors determine the way they
decide to centralize or decentralize authority
NATIONAL STANDARDS: United States- BUSPROG: Communication
KEYWORDS: Bloom's: Knowledge
19. A product structure requires that support activities from a company's value chain be decentralized so that
independent specialists in support activities exist within each product group.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.03 -Explain why it is so important that managers keep the
organizational hierarchy as flat as possible and what factors determine the way they
decide to centralize or decentralize authority
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Comprehension
20. Silica Dustcloud Inc. is a decentralized organization. This means that the organization promotes flexibility and
reduces bureaucratic costs because lower-level managers are authorized to make on-the-spot decisions.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: SMIA.HILL.l5.12.03 -Explain why it is so important that managers keep the
organizational hierarchy as flat as possible and what factors determine the way they
decide to centralize or decentralize authority
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thinking
KEYWORDS: Bloom's: Application
21. An organization with a centralized structure has a potential for creating higher bureaucratic costs.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.03 -Explain why it is so important that managers keep the
organizational hierarchy as flat as possible and what factors determine the way they
decide to centralize or decentralize authority
NATIONAL STANDARDS: United States- BUSPROG: Analytic
KEYWORDS: Bloom's: Comprehension
22. Flat organizational structures are less flexible and tend to resist change.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.15.12.03 -Explain why it is so important that managers keep the
organizational hierarchy as flat as possible and what factors determine the way they
decide to centralize or decentralize authority
NATIONAL STANDARDS: United States- BUSPROG: Analytic
KEYWORDS: Bloom's: Comprehension
23. Silica Dustcloud Inc. plans to change its organization structure from a market structure to a functional structure and
create separate divisions. This change will better serve its different groups of customers.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: SMIA.HILL.15.12.04- Explain the many advantages of a functional structure and why
and when it becomes necessary to utilize a more complex form of organizational
structure
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thinking
KEYWORDS: Bloom's: Application
24. Building capabilities in organizational design that allow a company to develop a competitive advantage starts at the
functional level.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.15.12.04- Explain the many advantages of a functional structure and why
and when it becomes necessary to utilize a more complex form of organizational
structure
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
25. In manufacturing, functional strategy usually centers on improving efficiency and quality.
a. True
b. False
ANSWER: True
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.04- Explain the many advantages of a functional structure and why
and when it becomes necessary to utilize a more complex form of organizational
structure
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
26. Fortunately, whenever different functions work together, bureaucratic costs inevitably declines.
a. True
b. False
ANSWER: False
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.04- Explain the many advantages of a functional structure and why
and when it becomes necessary to utilize a more complex form of organizational
structure
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Comprehension
27. Ambrosia Inc. is organized into Consumer, Medical, and Pharmaceutical units to serve the needs of its different
customer groups. Ambrosia is using a market structure.
a. True
b. False
ANSWER: True
POINTS: I
DIFFICULTY: Moderate
LEARNING OBJECTIVES: SMIA.HILL.l5.12.05 -Differentiate between the more complex forms of
organizational structures managers adopt to implement specific kinds of business-level
strategies
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thinking
KEYWORDS: Bloom's: Application
28. One of the main differences between a product team and a team in a matrix structure is that a matrix team is more
permanent than a team in a product structure.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.15.12.05 -Differentiate between the more complex forms of
organizational structures managers adopt to implement specific kinds of business-level
strategies
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
29. Restructuring always involves flattening the organizational hierarchy and downsizing the work force.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.15.12.05 -Differentiate between the more complex forms of
organizational structures managers adopt to implement specific kinds of business-level
strategies
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Knowledge
30. The purpose of a(n) is to provide managers with incentives for employees as well as feedback on how the
company performs.
a. control system
b. adaptive culture
c. organizational design
d. span of control
e. hierarchy of authority
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.15.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
31. Organizational structure can be defined as:
a. the means through which a company assigns employees to specific tasks and roles and specifies how these
tasks and roles are to be linked together to increase efficiency, quality, innovation, and responsiveness to
customers.
b. the blueprint that states how managers intend to use organizational resources to most efficiently achieve
organizational goals.
c. the specific collection of values, norms, beliefs, and attitudes that are shared by people and groups in an
organization and that control the way they interact with each other and with stakeholders outside the
organization..
d. the degree to which a company specifies how decisions are to be made so that employees' behavior becomes
predictable.
e. the process of redesigning business processes to achieve dramatic improvements in performance, such as
cost, quality, service, and speed.
ANSWER: a
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
ANSWER: a
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
33. Standardization is a form of:
a. output control.
b. fmancial control.
c. organizational inertia.
d. organizational culture.
e. behavior control.
ANSWER: e
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
ANSWER: b POINTS:
I
DIFFICULTY: Challenging
LEARNING OBJECTIVES: SMIA.HILL.l5.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Evaluation
ANSWER: c
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
36. Which form of control would you most likely frnd in a voluntary or charity organization?
a. Bureaucratic control through rules and procedures
b. Control through norms and values
c. Financial control through accurate frnancial statements
d. Output control, since it is the cheapest
e. Incentive systems to motivate employees
ANSWER: b POINTS:
I
DIFFICULTY: Challenging
LEARNING OBJECTIVES: SMIA.HILL.l5.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Evaluation
37. Companies that are innovative and able to deal with environmental change with new strategies and structures
probably have:
a. weak cultures.
b. strong functional cultures.
c. adaptive cultures.
d. prescriptive cultures.
e. cost-conscious culture.
ANSWER: c
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
38. The process of deciding how a company should create, use, and combine organizational structure, control systems,
and culture to pursue a business model successfully is referred to as:
a. organizational behavior.
b. organizational norm.
c. organizational design.
d. organizational ecology.
e. organizational density.
ANSWER: c
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
39. To a large degree, any organization's tasks are a function of its:
a. market area.
b. labor supply.
c. supervisors.
d. strategies.
e. compensation plan.
ANSWER: d
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
40. The degree to which a company specifies how decisions are to be made so that employees' behavior becomes
predictable is referred to as:
a. uniformity of output.
b. conformity.
c. standardization.
d. maximization of effort.
e. behavioral control.
ANSWER: c
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
ANSWER: a
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
42. In any organization, for-profit or not-for-profit, span of control refers to the:
a. number of managers at the highest levels in the organization.
b. CEO and his or her management team.
c. number of subordinates who report directly to one manager.
d. number of supervisors in a specific segment of a manufacturing activity.
e. number of members elected or appointed to be the board of directors.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.15.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
43. The specific collection of values, norms, beliefs, and attitudes shared by people and groups in a company is
commonly referred to as:
a. organizational fit.
b. organizational culture.
c. organizational development.
d. organizational positioning.
e. organizational design.
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.15.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
44. The term used to describe how people learn an organization's culture and way of behaving in the organization is:
a. organizational structure.
b. organizational development.
c. organizational design.
d. organizational behavior.
e. organizational socialization.
ANSWER: e
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.15.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
45. Organizations strive to control employees' behavior by linking systems to their control systems.
a. disciplinary
b. disincentive
c. reporting
d. administrative
e. reward
ANSWER: e
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
46. At LittleHippo, an online retail company, the work environment is playful. Employees often get their pictures taken
wearing silly wigs and masks. This atmosphere is part of the company's:
a. organizational density.
b. organizational structure.
c. organizational culture.
d. strategic control systems.
e. competitive envirornnent.
ANSWER: c
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thinking
KEYWORDS: Bloom's: Comprehension
47. Natalie and Shay are both employees at Silica Dustcloud Inc. Natalie, the marketing manager, often meets with
Shay, the production manager, in order to solve specific mutual problems. Which of the following is this an example
of?
a. Organizational culture
b. Liaison roles
c. Direct contact
d. Diverging mechanisms
e. Strategic control
ANSWER: c
POINTS: I
DIFFICULTY: Moderate
LEARNING OBJECTIVES: SMIA.HILL.l5.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thinking
KEYWORDS: Bloom's: Application
48. At Silica Dustcloud Inc., rules are published at the cubicle of all employees stating what is expected of them
regarding time to arrive, time for lunch, when to take breaks, and when to socialize. Which of the following is this an
example of?
a. Output control
b. Personal control
c. Behavior control
d. Conversion activities
e. Strategic competencies
ANSWER: c
POINTS: I
DIFFICULTY: Moderate
LEARNING OBJECTIVES: SMIA.HILL.l5.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thinking
KEYWORDS: Bloom's: Application
ANSWER: d
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.02- Discuss how effective organizational design enables a
company to increase product differentiation, reduce its cost structure, and build
competitive advantage
NATIONAL STANDARDS: United States- BUSPROG: Technology
KEYWORDS: Bloom's: Comprehension
50. To reduce costs, cost leaders prefer to use to closely monitor and evaluate functional performance.
a. output controls
b. personal controls
c. behavioral controls
d. cultural controls
e. input controls
ANSWER: a
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.02- Discuss how effective organizational design enables a
company to increase product differentiation, reduce its cost structure, and build
competitive advantage
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
51. Which of the following strategic control systems do managers use to shape and influence the behavior of employees
in face-to-face interactions?
a. Personal control
b. Output control
c. Behavior control
d. Input control
e. Process control
ANSWER: a
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.02- Discuss how effective organizational design enables a
company to increase product differentiation, reduce its cost structure, and build
competitive advantage
NATIONAL STANDARDS: United States- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
52. Flat organizational structures are characterized by:
a. many levels of management compared to the size of the company.
b. slower repose to changes in the competitive environment.
c. a relatively wide span of control.
d. reduced flexibility in decision-making strategies.
e. an increase in bureaucratic costs.
ANSWER: c
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.03 -Explain why it is so important that managers keep the
organizational hierarchy as flat as possible and what factors determine the way they
decide to centralize or decentralize authority
NATIONAL STANDARDS: United States- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
53. When decision-making responsibilities are decentralized, benefits include all of the following except:
a. increased motivation and accountability.
b. lower bureaucratic costs from flattened hierarchy.
c. reduced information overload.
d. easier coordination of functions.
e. flexibility in decision-making.
ANSWER: d
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.03 -Explain why it is so important that managers keep the
organizational hierarchy as flat as possible and what factors determine the way they
decide to centralize or decentralize authority
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Comprehension
54. Companies choose the number of hierarchical levels they need on the basis of their strategies and the functional
tasks necessary to:
a. achieve diseconomies of scale.
b. create distinctive competencies.
c. enhance employee productivity.
d. enhance cross-departmental coordination.
e. attract skilled employees
ANSWER: b
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.03 -Explain why it is so important that managers keep the
organizational hierarchy as flat as possible and what factors determine the way they
decide to centralize or decentralize authority
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
ANSWER: a
POINTS: I
DIFFICULTY: Moderate
LEARNING OBJECTIVES: SMIA.HILL.l5.12.03 -Explain why it is so important that managers keep the
organizational hierarchy as flat as possible and what factors determine the way they
decide to centralize or decentralize authority
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Comprehension
56. A drawback of the functional structure is:
a. that each worker must report to more than one superior.
b. the difficulty in communicating and coordinating across functions.
c. too much decentralization of decision-making authority.
d. its lack of flexibility in decision-making.
e. the need to downsize before implementing this structure.
ANSWER: b
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.04- Explain the many advantages of a functional structure and why
and when it becomes necessary to utilize a more complex form of organizational
structure
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
57. If a firm fmds that its functional structure is becoming too complex as the firm grows in size, the firm can tum to:
a. a simple structure.
b. downsizing.
c. reengmeerrng.
d. restructuring.
e. outsourcing.
ANSWER: e
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.04- Explain the many advantages of a functional structure and why
and when it becomes necessary to utilize a more complex form of organizational
structure
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Comprehension
58. Which of the following advantages does a functional organizational structure offer a company?
a. Diversification of activities leading to greater productivity
b. Lesser communication problems
c. Reduction in manufacturing costs and increase in operational flexibility
d. Ease in gauging the contribution of products to overall profitability
e. Faster servicing of customers
ANSWER: c
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.04- Explain the many advantages of a functional structure and why
and when it becomes necessary to utilize a more complex form of organizational
structure
NATIONAL STANDARDS: United States- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
59. Eva Studio, an audio company, manufactures a wide range of sound systems such as noise-canceling headsets,
loudspeakers, and amplifiers. Employees in EvaStudio are grouped such that each group works only on one type of
sound system. Which of the following structures is EvaStudio is most likely to have employed?
a. Matrix
b. Multidivisional
c. Geographic
d. Functional
e. Product
ANSWER: e
POINTS: I
DIFFICULTY: Challenging
LEARNING OBJECTIVES: SMIA.HILL.l5.12.05 -Differentiate between the more complex forms of
organizational structures managers adopt to implement specific kinds of business-level
strategies
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thinking
KEYWORDS: Bloom's: Evaluation
60. Which of the following structures requires centralization of value chain support activities?
a. The product structure
b. The product team structure
c. The matrix structure
d. The functional structure
e. The innovative structure
ANSWER: a
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.05 -Differentiate between the more complex forms of
organizational structures managers adopt to implement specific kinds of business-level
strategies
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Comprehension
61. Which of the following is not one of the advantages of a geographic structure?
a. Promotion of innovation and product development due to intensive cross-functional integration
b. Responsiveness to the needs of regional customers
c. Lower transportation costs
d. More coordination and control than a functional structure
e. Centralization of key activities and functions that allow leveraging skills across regions
ANSWER: a
POINTS: I
DIFFICULTY: Moderate
LEARNING OBJECTIVES: SMIA.HILL.l5.12.05 -Differentiate between the more complex forms of
organizational structures managers adopt to implement specific kinds of business-level
strategies
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Comprehension
62. All employees part of a project team within a structure are known as two-boss employees.
a. functional
b. geographic
c. market
d. matrix
e. product
ANSWER: d
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.05 -Differentiate between the more complex forms of
organizational structures managers adopt to implement specific kinds of business-level
strategies
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Comprehension
ANSWER: c
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.05 -Differentiate between the more complex forms of
organizational structures managers adopt to implement specific kinds of business-level
strategies
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
64. A matrix structure would be the most appropriate for which of the following fmus?
a. A company in which each employee is required to have only one boss
b. A company operating in the maturity stage of the industry life cycle
c. A company which is dependent on rapid mobilization of resources for competitive success
d. A company with a high level of vertical differentiation
e. A company in which the speed of product development is not crucial
ANSWER: c
POINTS: 1
DIFFICULTY: Challenging
LEARNING OBJECTIVES: SMIA.HILL.15.12.05 -Differentiate between the more complex forms of
organizational structures managers adopt to implement specific kinds of business-level
strategies
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thinking
KEYWORDS: Bloom's: Synthesis
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.15.12.05 -Differentiate between the more complex forms of
organizational structures managers adopt to implement specific kinds of business-level
strategies
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Comprehension
66. Which of the following actions would you expect to see in a company that is undergoing a reengineering?
a. Hiring more managers
b. Hiring more workers
c. Examining activities from a customer's point of view
d. Investing more in product research and development (R&D)
e. Centralizing decision-making authority
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.15.12.05 -Differentiate between the more complex forms of
organizational structures managers adopt to implement specific kinds of business-level
strategies
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Comprehension
67. Restructuring is:
a. a rethinking and radical redesign of a firm's business processes.
b. a radical readjustment of the organization's staffrng and hierarchy.
c. a philosophy that states that mistakes, defects, and poor-quality materials are not acceptable and should be
eliminated.
d. the shift that firms make from a functional to a more complex structure as the finn grows in complexity and
SIZe.
ANSWER: b
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.05 -Differentiate between the more complex forms of
organizational structures managers adopt to implement specific kinds of business-level
strategies
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
68. A hospital examines its processes closely and then changes them radically to become more patient-centered. Among
the changes are new ways of doing tasks and new groupings of workers. This is an example of:
a. restructuring.
b. reengineering.
c. total quality management.
d. benchmarking.
e. downsizing.
ANSWER: b
POINTS: I
DIFFICULTY: Moderate
LEARNING OBJECTIVES: SMIA.HILL.l5.12.05 -Differentiate between the more complex forms of
organizational structures managers adopt to implement specific kinds of business-level
strategies
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thinking
KEYWORDS: Bloom's: Application
69. The organization structure that organizations most commonly adopt to solve control problems that result from
producing many different kinds of products for many different market segments is the:
a. functional structure.
b. process structure.
c. matrix structure.
d. product structure.
e. differentiated structure.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.15.12.05 -Differentiate between the more complex forms of
organizational structures managers adopt to implement specific kinds of business-level
strategies
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: SMIA.HILL.15.12.05 -Differentiate between the more complex forms of
organizational structures managers adopt to implement specific kinds of business-level
strategies
NATIONAL STANDARDS: United States- BUSPROG: Analytic
KEYWORDS: Bloom's: Comprehension
71. When a company engages in restructuring, it may be necessary to:
a. increase its basic business operations.
b. increase the number of organizational levels.
c. lay off employees.
d. add to the operating costs.
e. retain the functional processes.
ANSWER: c
POINTS: I
DIFFICULTY: Easy
LEARNING OBJECTIVES: SMIA.HILL.l5.12.05 -Differentiate between the more complex forms of
organizational structures managers adopt to implement specific kinds of business-level
strategies
NATIONAL STANDARDS: United States- BUSPROG: Analytic
KEYWORDS: Bloom's: Knowledge
72. Identify and discuss the three building blocks of organizational structure.
ANSWER: Organizational structure assigns employees to specific value creation tasks and roles
and specifies how these tasks and roles are to be linked together in a way that
increases efficiency, quality, innovation, and responsiveness to customers D distinctive
competencies that build competitive advantage.
The first building block of structure is grouping tasks, functions, and divisions. As
companies grow, they may need to revisit structure so that these groupings are done to
help create distinctive competencies.
The fmal building block of structure is integration and integrating mechanisms. The
greater the complexity of an organization's structure, the greater is the need for
coordination among the people, functions, and divisions to make the organizational
structure work efficiently. Tools of integration include direct contact, liaison roles, and
teams.
POINTS: I
DIFFICULTY: Challenging
LEARNING OBJECTIVES: SMIA.HILL.l5.12.01- Understand how organizational design requires managers to
select the right combination of organizational structure, control, and culture
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Analysis
73. Describe the roles that organizational structure, strategic control systems, and organizational culture play in strategy
implementation.
ANSWER: Structure helps organizations implement their strategies because structure determines
the processes by which information is communicated within the organization and by
which decisions are made. Structure also has important implications for organizational
flexibility and learning, and an important effect on the organization's ability to achieve
low costs or differentiation. Finally, structure is the primary mechanism for integration,
which is crucial for strategy implementation, particularly in larger organizations.
74. Consider the case of a family-run business that operates one small local retail shop and its subsequent expansion into
more locations and more stores. Describe the changes that are likely to take place in that business's organizational
structure as it grows in size, geographic dispersion, and complexity. Tell why the changes are beneficial for the
business.
ANSWER: The store probably followed this common pattern. It began with a simple structure
because the owner-manager could do all the work or with the help of just a few
employees. Each employee could be supervised directly by the owner, and the store's
performance could be monitored directly by the owner. However, as the business grew
and a second store was added, it was no longer possible for the owner to do it all.
More employees were hired, including another supervisor. Supervision and monitoring
became more difficult, too. As the number of stores continued to grow, they also
became more geographically widespread. Both the size and the dispersion of stores
created a need for many new employees and supervisors. Also, the increased size and
complexity necessitated specialization to be most efficient. Therefore, some employees
began to specialize in tasks such as payroll, training, store desigu, purchasing,
marketing, and so on. A functional structure was adopted to help the firm better cope
with these changes.
POINTS: I
DIFFICULTY: Challenging
LEARNING OBJECTIVES: SMIA.HILL.l5.12.05 -Differentiate between the more complex forms of
organizational structures managers adopt to implement specific kinds of business-level
strategies
NATIONAL STANDARDS: United States- BUSPROG: Reflective Thin- BUSPROG: Analytic
KEYWORDS: Bloom's: Evaluation
75. Describe what is meant by the terms restructuring and reengineering, and discuss when and why they would be
used.
ANSWER: While both can lead to improved performance, there are important differences between
these two approaches.