Strategic Management Final Exam 22
Questions & Answers 100% Correct!!
Structural stability affects the organization's ability to:
a. resist organizational inertia.
b. cope with uncertainty about cause-and-effect relationships in the global economy.
c. develop new competitive advantages.
d. consistently and predictably manage its daily work routines. - ANSWERD
Selecting the organizational structure and controls that effectively implement the chosen strategy is a
challenge for managers because
a. firms must be flexible while retaining a degree of stability.
b. managers are never able to obtain all the information necessary to make the best selection.
c. the structure of a firm should not duplicate the structures of its competitors.
d. the environment changes too rapidly for corporations to maintain a consistent corporate structure.
- ANSWERA
Financial controls are most important in the ____ strategy.
a. single business
b. related constrained
c. unrelated diversified
d. vertical complementary - ANSWERC
____ controls are objective criteria that allow corporate managers to evaluate the returns earned by
individual business units.
a. Strategic
b. Managerial
c. Financial
d. Environmental - ANSWERC
Alfred Chandler found that firms grow in a predictable pattern, and that the firm's growth patterns
determine its structural form. Which form corresponds to the FINAL stage in Chandler's theory?
,a. functional
b. simple
c. vertically integrated
d. multidivisional - ANSWERD
One reason why a long-tenured top-level manager may hesitate to conclude the firm's structure is a
problem is that doing so
a. indicates to competitors that the firm is vulnerable to a hostile takeover.
b. will only lead to inefficiencies.
c. requires the firm undertake multi-year restructuring period that will delay retirement.
d. suggests that their previous choices were not the best ones. - ANSWERD
Strategic controls allow corporate-level managers to
a. evaluate business-level performance on objective criteria.
b. concentrate on day-to-day corporate operations.
c. assess performance of employees and managers in each business unit.
d. examine the fit between what the firm might do and what it can do. - ANSWERD
Andermeyer Jewelers has been in existence since the 1870s. It specializes in high-end jewelry using
both colored precious stones and diamonds. Generations of wealthy families have patronized
Andermeyer. Andermeyer has been owned and managed by the Andermeyer family since its
founding, and has never had more than 20 designers and jewelers in its shop. Andermeyer Jewelers
should use the ____ structure.
a. simple
b. functional
c. matrix
d. network - ANSWERA
Typically, an organization using a simple structure would be
a. large.
b. small.
c. of any size if the firm is privately held.
d. a family-owned-and-managed firm of any size. - ANSWERB
,In most cases, the focus strategy is best managed using a ____ structure.
a. simple
b. functional
c. multidivisional
d. vertical - ANSWERA
The benefits of a simple structure include all of the following EXCEPT
a. ease of coordination within the organization.
b. no need for sophisticated information systems.
c. active involvement by the owner-manager.
d. specialists can develop deep expertise. - ANSWERD
Functional structures work best for firms for all of the following strategies EXCEPT
a. cost leadership.
b. differentiation.
c. related constrained diversification strategy.
d. single or dominant business corporate strategy. - ANSWERC
Leslie is a newly-graduated certified public accountant with a specialty in corporate tax. She wishes
to join an organization (not an accounting firm) that will allow her to concentrate on corporate tax
and become deeply proficient in this area. Leslie should look for a position in a firm with a ____
structure.
a. simple
b. functional
c. multidivisional
d. network - ANSWERB
One disadvantage of the functional structure is that
a. career paths and professional development are limited.
b. dual reporting relationships blur lines of authority.
c. the CEO cannot coordinate and control the efforts of functional level employees.
, d. communication and coordination are difficult among organizational functions. - ANSWERD
Which of the following does NOT cause a firm to move from a functional structure to a
multidivisional structure?
a. increasing diversification
b. coordination and control issues
c. need for knowledge-sharing among specialists
d. greater amounts of data and information to process - ANSWERC
The multidivisional structure was initially designed to produce three major benefits over the
functional form. Which of the following is NOT one of the three benefits?
a. aligning the corporate structure with the demands of global expansion
b. more accurate monitoring of the performance of each business
c. facilitation of comparison between divisions
d. stimulating managers of poorly performing divisions to look for ways of improving performance -
ANSWERA
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
a. coordination and control problems.
b. bureaucratic inefficiencies.
c. excessive competition among division managers.
d. limited communication among functional specialists. - ANSWERA
The noted business historian Alfred Chandler viewed the multidivisional structure as an innovative
response to
a. an emerging professional management philosophy.
b. the increasing demand by consumers for both quality and low-price.
c. coordination and control problems.
d. a shift toward the global economy. - ANSWERC
Questions & Answers 100% Correct!!
Structural stability affects the organization's ability to:
a. resist organizational inertia.
b. cope with uncertainty about cause-and-effect relationships in the global economy.
c. develop new competitive advantages.
d. consistently and predictably manage its daily work routines. - ANSWERD
Selecting the organizational structure and controls that effectively implement the chosen strategy is a
challenge for managers because
a. firms must be flexible while retaining a degree of stability.
b. managers are never able to obtain all the information necessary to make the best selection.
c. the structure of a firm should not duplicate the structures of its competitors.
d. the environment changes too rapidly for corporations to maintain a consistent corporate structure.
- ANSWERA
Financial controls are most important in the ____ strategy.
a. single business
b. related constrained
c. unrelated diversified
d. vertical complementary - ANSWERC
____ controls are objective criteria that allow corporate managers to evaluate the returns earned by
individual business units.
a. Strategic
b. Managerial
c. Financial
d. Environmental - ANSWERC
Alfred Chandler found that firms grow in a predictable pattern, and that the firm's growth patterns
determine its structural form. Which form corresponds to the FINAL stage in Chandler's theory?
,a. functional
b. simple
c. vertically integrated
d. multidivisional - ANSWERD
One reason why a long-tenured top-level manager may hesitate to conclude the firm's structure is a
problem is that doing so
a. indicates to competitors that the firm is vulnerable to a hostile takeover.
b. will only lead to inefficiencies.
c. requires the firm undertake multi-year restructuring period that will delay retirement.
d. suggests that their previous choices were not the best ones. - ANSWERD
Strategic controls allow corporate-level managers to
a. evaluate business-level performance on objective criteria.
b. concentrate on day-to-day corporate operations.
c. assess performance of employees and managers in each business unit.
d. examine the fit between what the firm might do and what it can do. - ANSWERD
Andermeyer Jewelers has been in existence since the 1870s. It specializes in high-end jewelry using
both colored precious stones and diamonds. Generations of wealthy families have patronized
Andermeyer. Andermeyer has been owned and managed by the Andermeyer family since its
founding, and has never had more than 20 designers and jewelers in its shop. Andermeyer Jewelers
should use the ____ structure.
a. simple
b. functional
c. matrix
d. network - ANSWERA
Typically, an organization using a simple structure would be
a. large.
b. small.
c. of any size if the firm is privately held.
d. a family-owned-and-managed firm of any size. - ANSWERB
,In most cases, the focus strategy is best managed using a ____ structure.
a. simple
b. functional
c. multidivisional
d. vertical - ANSWERA
The benefits of a simple structure include all of the following EXCEPT
a. ease of coordination within the organization.
b. no need for sophisticated information systems.
c. active involvement by the owner-manager.
d. specialists can develop deep expertise. - ANSWERD
Functional structures work best for firms for all of the following strategies EXCEPT
a. cost leadership.
b. differentiation.
c. related constrained diversification strategy.
d. single or dominant business corporate strategy. - ANSWERC
Leslie is a newly-graduated certified public accountant with a specialty in corporate tax. She wishes
to join an organization (not an accounting firm) that will allow her to concentrate on corporate tax
and become deeply proficient in this area. Leslie should look for a position in a firm with a ____
structure.
a. simple
b. functional
c. multidivisional
d. network - ANSWERB
One disadvantage of the functional structure is that
a. career paths and professional development are limited.
b. dual reporting relationships blur lines of authority.
c. the CEO cannot coordinate and control the efforts of functional level employees.
, d. communication and coordination are difficult among organizational functions. - ANSWERD
Which of the following does NOT cause a firm to move from a functional structure to a
multidivisional structure?
a. increasing diversification
b. coordination and control issues
c. need for knowledge-sharing among specialists
d. greater amounts of data and information to process - ANSWERC
The multidivisional structure was initially designed to produce three major benefits over the
functional form. Which of the following is NOT one of the three benefits?
a. aligning the corporate structure with the demands of global expansion
b. more accurate monitoring of the performance of each business
c. facilitation of comparison between divisions
d. stimulating managers of poorly performing divisions to look for ways of improving performance -
ANSWERA
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
a. coordination and control problems.
b. bureaucratic inefficiencies.
c. excessive competition among division managers.
d. limited communication among functional specialists. - ANSWERA
The noted business historian Alfred Chandler viewed the multidivisional structure as an innovative
response to
a. an emerging professional management philosophy.
b. the increasing demand by consumers for both quality and low-price.
c. coordination and control problems.
d. a shift toward the global economy. - ANSWERC
