MGMT 425 EXAMS ALL ANSWERS AND QUESTIONS
SET A+
✔✔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 and the
top administration has decided to implement a policy of "each tub on its own bottom," a
colorful phrase that indicates that each school of the university is to become a profit
center. This scheme is somewhat parallel to the ______________ organizational
structure.
a. network
b. strategic business unit multidivisional
c. functional
d. matrix - ✔✔B
✔✔WHICH of the following multidivisional structures is CORRECTLY paired with the
appropriate corporate-level strategy?
a. competitive form with related constrained strategy
b. cooperative form with unrelated strategy
c. SBU form with related linked strategy
d. competitive form with related linked strategy - ✔✔C
✔✔A Firm pursuing a related-constrained diversification strategy would typically need
all of the following EXCEPT:
a. centralization of some organizational functions for the sake of coordination.
b. frequent, direct contact between division managers.
c. division managers' rewards based on division financial performance.
d. temporary teams or task forces formed around specific projects. - ✔✔C
✔✔WHEN a corporation pursues a related-constrained diversification strategy, financial
controls may not add value to strategy implementation efforts since it is difficult to:
a. use them without reducing cooperation among divisional managers.
b. transfer capital between units.
c. maintain an arms-length relationship between headquarters and the divisions.
,d. identify which objective criteria to monitor. - ✔✔A
✔✔THE Heavy use of integrative mechanisms in the cooperative multidivisional
organizational structure is intended to achieve:
a. economies of scope.
b. cost efficiencies.
c. sensitivity to cultural diversity.
d. quick response to local customer needs. - ✔✔A
✔✔WHICH of the following is a TRUE statement about implementing corporate-level
strategies and effective organizational structures?
a. Firms pursuing a related-linked strategy should implement a competitive structure
with a competitive culture and centralized strategic planning activities.
b. Firms pursuing an unrelated diversification strategy should use an SBU structure with
a small corporate staff, emphasize the R&D function, and integrate divisions to achieve
synergies.
c. Firms pursuing a related-linked strategy should use an SBU structure, emphasize
interdependence among divisions, and manage the strategic planning function from the
central office.
d. Firms pursuing a related-constrained strategy should implement a cooperative
structure, use integrative devices to link divisions, centralize the R&D function, and
emphasize sharing. - ✔✔D
✔✔THE Cooperative multidivisional firm:
a. establishes profit centers based on products or markets.
b. has a flat organizational structure which broadens jobs and empowers workers.
c. is a structure organized around both functional specialization and business projects.
d. is a structure requiring heavy use of horizontal integrative devices. - ✔✔D
✔✔WHICH of the following is NOT a variation of the multidivisional structure?
a. competitive form
b. regional form
c. cooperative form
d. strategic business unit form - ✔✔B
✔✔INCREASINGLY diversified firms that have decided to shift to a related-constrained
strategy should change their organizational structure to the ___________ structure.
a. combination
b. functional
c. network
d. multidivisional - ✔✔D
✔✔THE _________ structure is the most appropriate structure for implementing the
integrated cost leadership/differentiation strategy.
a. simple
,b. functional
c. multidivisional
d. strategic business unit - ✔✔B
✔✔SUCCESSFUL implementation of the differentiation strategy requires a structure
that:
a. has specialized jobs.
b. decentralizes decision-making.
c. focuses on the finance function.
d. is dominated by the operations function. - ✔✔B
✔✔THE Integrated cost leadership/differentiation strategy is difficult to implement
mostly because:
a. the primary and support activities required to implement the cost leadership and
differentiation strategies conflict.
b. this strategic approach demands more flexibility than most firms can manage.
c. the dual reporting relationships required for this strategy slows organizational
decision making.
d. the cost leadership strategy requires less structured job roles than does the
differentiation strategy. - ✔✔A
✔✔WHICH of the following is a TRUE statement about organizational structures for
implementing business-level strategies?
a. A cost leadership strategy requires a simple structure emphasizing high
specialization, centralization, and structured job roles.
b. A differentiation strategy requires a functional structure with limited formalization,
broad job descriptions, and an emphasis on the R&D and marketing functions.
c. An integrated cost leadership/differentiation strategy requires a multidivisional
structure using high formalization, decentralized decision-making, and vertical
coordination.
d. A focused strategy requires a functional structure featuring high levels of both
specialization and formalization. - ✔✔B
✔✔TYPICALLY, a successful firm pursuing a differentiation strategy will:
a. have a very hierarchical structure.
b. require a structure which is very formal.
c. use cross-functional development teams.
d. develop free-standing business units. - ✔✔C
✔✔FIRMS Seeking to differentiate particularly need support from the _________ and
___________ functions.
a. finance, accounting
b. engineering, operations
c. product R&D, marketing
d. management information, finance - ✔✔C
, ✔✔AGATHA Adams has founded Insurance Specialists to process medical claims for
physicians' practices. She plans to compete on the basis of cost, offering the lowest
processing cost per claim in her market area. Ms Adams' company should:
a. be the strategic center firm in a network structure.
b. have a specialized multidivisional structure.
c. develop alliances with firms with complementary competencies.
d. have a highly centralized, functional structure. - ✔✔D
✔✔WHICH of the following is NOT associated with an organizational structure that
supports a cost leadership strategy?
a. centralization
b. specialization
c. formalization
d. integration - ✔✔D
✔✔TO successfully implement a cost leadership strategy, there is a need for:
a. freedom from constraining rules.
b. centralization of authority.
c. communication between functional silos.
d. sharing of competencies among divisions. - ✔✔B
✔✔SOME experts consider the ________ structure to be one of the 20th century's most
significant organizational innovations because of its value to diversified firms.
a. network
b. cooperative
c. multi-divisional
d. functional - ✔✔C
✔✔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. - ✔✔C
✔✔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. - ✔✔A
SET A+
✔✔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 and the
top administration has decided to implement a policy of "each tub on its own bottom," a
colorful phrase that indicates that each school of the university is to become a profit
center. This scheme is somewhat parallel to the ______________ organizational
structure.
a. network
b. strategic business unit multidivisional
c. functional
d. matrix - ✔✔B
✔✔WHICH of the following multidivisional structures is CORRECTLY paired with the
appropriate corporate-level strategy?
a. competitive form with related constrained strategy
b. cooperative form with unrelated strategy
c. SBU form with related linked strategy
d. competitive form with related linked strategy - ✔✔C
✔✔A Firm pursuing a related-constrained diversification strategy would typically need
all of the following EXCEPT:
a. centralization of some organizational functions for the sake of coordination.
b. frequent, direct contact between division managers.
c. division managers' rewards based on division financial performance.
d. temporary teams or task forces formed around specific projects. - ✔✔C
✔✔WHEN a corporation pursues a related-constrained diversification strategy, financial
controls may not add value to strategy implementation efforts since it is difficult to:
a. use them without reducing cooperation among divisional managers.
b. transfer capital between units.
c. maintain an arms-length relationship between headquarters and the divisions.
,d. identify which objective criteria to monitor. - ✔✔A
✔✔THE Heavy use of integrative mechanisms in the cooperative multidivisional
organizational structure is intended to achieve:
a. economies of scope.
b. cost efficiencies.
c. sensitivity to cultural diversity.
d. quick response to local customer needs. - ✔✔A
✔✔WHICH of the following is a TRUE statement about implementing corporate-level
strategies and effective organizational structures?
a. Firms pursuing a related-linked strategy should implement a competitive structure
with a competitive culture and centralized strategic planning activities.
b. Firms pursuing an unrelated diversification strategy should use an SBU structure with
a small corporate staff, emphasize the R&D function, and integrate divisions to achieve
synergies.
c. Firms pursuing a related-linked strategy should use an SBU structure, emphasize
interdependence among divisions, and manage the strategic planning function from the
central office.
d. Firms pursuing a related-constrained strategy should implement a cooperative
structure, use integrative devices to link divisions, centralize the R&D function, and
emphasize sharing. - ✔✔D
✔✔THE Cooperative multidivisional firm:
a. establishes profit centers based on products or markets.
b. has a flat organizational structure which broadens jobs and empowers workers.
c. is a structure organized around both functional specialization and business projects.
d. is a structure requiring heavy use of horizontal integrative devices. - ✔✔D
✔✔WHICH of the following is NOT a variation of the multidivisional structure?
a. competitive form
b. regional form
c. cooperative form
d. strategic business unit form - ✔✔B
✔✔INCREASINGLY diversified firms that have decided to shift to a related-constrained
strategy should change their organizational structure to the ___________ structure.
a. combination
b. functional
c. network
d. multidivisional - ✔✔D
✔✔THE _________ structure is the most appropriate structure for implementing the
integrated cost leadership/differentiation strategy.
a. simple
,b. functional
c. multidivisional
d. strategic business unit - ✔✔B
✔✔SUCCESSFUL implementation of the differentiation strategy requires a structure
that:
a. has specialized jobs.
b. decentralizes decision-making.
c. focuses on the finance function.
d. is dominated by the operations function. - ✔✔B
✔✔THE Integrated cost leadership/differentiation strategy is difficult to implement
mostly because:
a. the primary and support activities required to implement the cost leadership and
differentiation strategies conflict.
b. this strategic approach demands more flexibility than most firms can manage.
c. the dual reporting relationships required for this strategy slows organizational
decision making.
d. the cost leadership strategy requires less structured job roles than does the
differentiation strategy. - ✔✔A
✔✔WHICH of the following is a TRUE statement about organizational structures for
implementing business-level strategies?
a. A cost leadership strategy requires a simple structure emphasizing high
specialization, centralization, and structured job roles.
b. A differentiation strategy requires a functional structure with limited formalization,
broad job descriptions, and an emphasis on the R&D and marketing functions.
c. An integrated cost leadership/differentiation strategy requires a multidivisional
structure using high formalization, decentralized decision-making, and vertical
coordination.
d. A focused strategy requires a functional structure featuring high levels of both
specialization and formalization. - ✔✔B
✔✔TYPICALLY, a successful firm pursuing a differentiation strategy will:
a. have a very hierarchical structure.
b. require a structure which is very formal.
c. use cross-functional development teams.
d. develop free-standing business units. - ✔✔C
✔✔FIRMS Seeking to differentiate particularly need support from the _________ and
___________ functions.
a. finance, accounting
b. engineering, operations
c. product R&D, marketing
d. management information, finance - ✔✔C
, ✔✔AGATHA Adams has founded Insurance Specialists to process medical claims for
physicians' practices. She plans to compete on the basis of cost, offering the lowest
processing cost per claim in her market area. Ms Adams' company should:
a. be the strategic center firm in a network structure.
b. have a specialized multidivisional structure.
c. develop alliances with firms with complementary competencies.
d. have a highly centralized, functional structure. - ✔✔D
✔✔WHICH of the following is NOT associated with an organizational structure that
supports a cost leadership strategy?
a. centralization
b. specialization
c. formalization
d. integration - ✔✔D
✔✔TO successfully implement a cost leadership strategy, there is a need for:
a. freedom from constraining rules.
b. centralization of authority.
c. communication between functional silos.
d. sharing of competencies among divisions. - ✔✔B
✔✔SOME experts consider the ________ structure to be one of the 20th century's most
significant organizational innovations because of its value to diversified firms.
a. network
b. cooperative
c. multi-divisional
d. functional - ✔✔C
✔✔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. - ✔✔C
✔✔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. - ✔✔A
