MANA 4322 Chapter 10 Test Bank

Multiple Choice Questions 38. Generally speaking, discussions of the relationship between strategy and structure strongly imply that A. strategy follows structure. B. structure follows strategy. C. strategy can effectively be formulated without considering structural elements. D. structure typically has a very small influence on a firm's strategy. 39. When an organization with a simple structure increases its sales revenue and volume of outputs, it is most likely to develop a A. divisional structure. B. functional structure. C. product-market structure. D. geographic structure. 40. When an organization with a functional structure diversifies into related product-markets, it generally A. maintains its functional structure. B. develops a divisional structure. C. develops a matrix structure. D. develops a worldwide product-division structure. 41. A strategy of related diversification requires most firms to organize around geographical areas or product lines. This type of organizational growth leads to a(n) A. divisional structure. B. functional structure. C. matrix structure. D. international structure. 42. All of the following statements about simple organizational structures are true EXCEPT which? A. Small firms with a narrow product-market scope will adopt such a structure. B. Decision making authority is highly centralized. C. There is little specialization of tasks. D. Creativity and individualism are rare. Answer: D 43. A simple structure is characterized by A. high specialization and low centralization. B. low specialization and high centralization. C. low formality and low creativity. D. high formality and low centralization 44. Functional structures are usually found in organizations where there is A. high volume production. B. unrelated product lines or service offerings. C. very little vertical integration. D. a strong need to decentralize decision making. 45. At ABC Corporation, work is divided into units that specialize in production, marketing, research and development, and other management tasks. This is an example of a A. simple structure. B. functional structure. C. divisional structure. D. matrix structure. 46. Which of the following is an advantage of a functional type of organizational structure? A. Decentralized decision-making enhances an organization-wide perspective across functions. B. It facilitates the development of general management talent. C. Pooling of specialists enhances coordination and control. D. It is easy to establish uniform performance standards. 47. Which of the following is a disadvantage of a functional type of organizational structure? A. Differences in functional orientation may impede communication and coordination. B. Use of managerial and technical talent is inefficient due to pooling of expertise in functional areas. C. Decision making is centralized at the top of the organization. D. Managers tend to be overly concerned with long-term strategies that minimize the importance of functional area strengths. 48. A divisional structure A. is organized around functional area departments. B. typically improves the performance of firms pursuing a strategy of vertical integration. C. facilitates the development of general managers. D. enhances centralized decision making.