MBA 705 EXAM 3 STRATEGIC MANAGEMENT
COMPLETE PREPARATION GUIDE AND KEY
CONCEPT SUMMARY
◉ Centralization:
Answer: An organizational decision-making approach with most
strategic and operating decisions made by managers at the top of the
organization structure (at corporate headquarters).
◉ Corporate Restructuring:
Answer: A change in the organization's structure to improve
efficiency and firm performance, including such activities as
realigning divisions in the firm, reducing the amount of cash under
the discretion of senior executives, and acquiring or divesting
business units.
◉ Decentralization:
Answer: Decentralization: An organizational decision-making
approach with most strategic and operating decisions made by
managers at the business unit level.
◉ Downsizing:
,Answer: Downsizing: A means of organizational restructuring that
eliminates part or all of one or more hierarchical levels from the
organization and pushes decision-making downward in the
organization.
◉ Flat Organization:
Answer: Flat Organization: An organization characterized by
relatively few hierarchical levels and a wide span of control.
◉ Functional Structure:
Answer: Functional Structure: A form of organizational structure
whereby each subunit of the organization engages in firm-wide
activities related to a particular function, such as marketing, HR,
finance, or production.
◉ Geographic Divisional Structure:
Answer: Geographic Divisional Structure: A form of organizational
structure in which jobs and activities are grouped on the basis of
geographic location—for example, northeast region, Midwest region,
and far west region.
◉ Horizontal Growth:
Answer: An increase in the breadth of an organization's structure.
,◉ Horizontal Structure:
Answer: An organizational structure with fewer hierarchies
designed to improve efficiency by reducing layers in the
bureaucracy.
◉ Matrix Structure:
Answer: A form of organizational structure that combines the
functional and product divisional structures.
◉ Multidivisional Structure:
Answer: A structural form with two or more divisions based on
products (a product divisional structure) or geography (a
geographic divisional structure); also called an M-form.
◉ Organizational Structure:
Answer: The formal means by which work is coordinated in an
organization.
◉ Product Divisional Structure:
Answer: A form of organizational structure whereby the
organization's activities are divided into self-contained entities, each
responsible for producing, distributing, and selling its own products.
◉ Strategy Implementation:2 Key Points
, Answer: }Consider the plan for implementation before adopting a
strategic alternative.
}The greater the strategic change, the more complex the
implementation.
◉ Profit Center:
Answer: A well-defined organizational unit headed by a manager
accountable for its revenues and expenditures.
◉ Simple Structure:
Answer: An organizational form whereby each employee often
performs multiple tasks, and the owner/ manager is involved in all
aspects of the business.
◉ Span of Control:
Answer: The number of employees reporting directly to a given
manager.
◉ Tall Organization:
Answer: n organization characterized by many hierarchical levels
and a narrow span of control.
◉ Vertical Growth:
COMPLETE PREPARATION GUIDE AND KEY
CONCEPT SUMMARY
◉ Centralization:
Answer: An organizational decision-making approach with most
strategic and operating decisions made by managers at the top of the
organization structure (at corporate headquarters).
◉ Corporate Restructuring:
Answer: A change in the organization's structure to improve
efficiency and firm performance, including such activities as
realigning divisions in the firm, reducing the amount of cash under
the discretion of senior executives, and acquiring or divesting
business units.
◉ Decentralization:
Answer: Decentralization: An organizational decision-making
approach with most strategic and operating decisions made by
managers at the business unit level.
◉ Downsizing:
,Answer: Downsizing: A means of organizational restructuring that
eliminates part or all of one or more hierarchical levels from the
organization and pushes decision-making downward in the
organization.
◉ Flat Organization:
Answer: Flat Organization: An organization characterized by
relatively few hierarchical levels and a wide span of control.
◉ Functional Structure:
Answer: Functional Structure: A form of organizational structure
whereby each subunit of the organization engages in firm-wide
activities related to a particular function, such as marketing, HR,
finance, or production.
◉ Geographic Divisional Structure:
Answer: Geographic Divisional Structure: A form of organizational
structure in which jobs and activities are grouped on the basis of
geographic location—for example, northeast region, Midwest region,
and far west region.
◉ Horizontal Growth:
Answer: An increase in the breadth of an organization's structure.
,◉ Horizontal Structure:
Answer: An organizational structure with fewer hierarchies
designed to improve efficiency by reducing layers in the
bureaucracy.
◉ Matrix Structure:
Answer: A form of organizational structure that combines the
functional and product divisional structures.
◉ Multidivisional Structure:
Answer: A structural form with two or more divisions based on
products (a product divisional structure) or geography (a
geographic divisional structure); also called an M-form.
◉ Organizational Structure:
Answer: The formal means by which work is coordinated in an
organization.
◉ Product Divisional Structure:
Answer: A form of organizational structure whereby the
organization's activities are divided into self-contained entities, each
responsible for producing, distributing, and selling its own products.
◉ Strategy Implementation:2 Key Points
, Answer: }Consider the plan for implementation before adopting a
strategic alternative.
}The greater the strategic change, the more complex the
implementation.
◉ Profit Center:
Answer: A well-defined organizational unit headed by a manager
accountable for its revenues and expenditures.
◉ Simple Structure:
Answer: An organizational form whereby each employee often
performs multiple tasks, and the owner/ manager is involved in all
aspects of the business.
◉ Span of Control:
Answer: The number of employees reporting directly to a given
manager.
◉ Tall Organization:
Answer: n organization characterized by many hierarchical levels
and a narrow span of control.
◉ Vertical Growth:
