Strategic Management

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There is no link between a firm's strategy and its structure.

False

In a simple structure where the owner manager makes most of the important decisions, extensive rules and regulations are used to maintain order.

False

3) As Power Corporation grew, it shied away from being an operator of the business it ended up owning.

T

4) A simple organizational structure may lead to problems such as unclear boundaries of authority and few career advancement options.

T

5) One disadvantage of a functional structure is that differences in functional orientation may impede organization coordination and communication.

T

6) To enhance integration and control of related product market activities, the functional structure minimizes centralization.

F

7) A major disadvantage of adopting a divisional structure is the tendency for managers to focus on short-term objectives.

T

8) Rogers communications has only two divisions: wireless and media.

F

9) The strategic business unit (SBU) and holding company structure are variants of the functional form of structure.

F

10) The strategic business unit (SBU) structure is also referred to as the conglomerate structure.

F

11) The matrix structure attempts to combine the advantages of the functional and product-oriented structure.

T

12) A matrix organization is organized strictly along product lines.

F

13) A major disadvantage of the matrix structure is that it duplicates the use of specialized personnel, equipment, and facilities.

F

14) A worldwide product division structure is used when global strategies require that each division be responsible for overall efficiency and performance.

T

15) The purpose of boundaryless forms of organizing is to facilitate the widespread sharing of knowledge and information across internal and external boundaries of the organization.

T

16) Boundaryless structures replace traditional structures.

F

17) In a barrier-free organization, differences in skills, authority, and talent disappear.

F

18) An advantage of the barrier-free form of organizing is that internal cooperation and shared objectives are not required for it to work.

F

19) Because the modular form of organizing involves outsourcing vital functions, modular firms often forfeit full strategic control.

F

20) Modular companies can achieve rapid growth because they don't require large investments in fixed assets.

T

21) Outsourcing relieves companies of the requirement to maintain skill levels needed to manufacture essential components.

T

22) One of the risks of outsourcing is a loss of cross-functional skills.

T

23) The virtual type of organization is a network of independent companies linked together to share skills, costs, and access to one another's markets.

T

24) The virtual organization is characterized by participating firms which pursue a collective strategy that enables them to cope with environmental uncertainty through cooperative efforts.

T

25) Managing virtual structures requires new and difficult-to-acquire managerial skills.

T

26) When an organization with a simple structure increases its sales revenue and volume of outputs, it is most likely to develop a

Functional Structure

27) Canadian conglomerate Power Corporation had its original corporate roots in THE

The Electricity Generating Industry

28) A strategy of related diversification requires most firms to organize around geographical areas or product lines. This type of organizational growth leads to a

Divisional Structure

29) Generally speaking, discussions of the relationship between strategy and structure strongly imply that

Structure Follows Strategy

30) All of the following statements about simple organizational structures are true except:

Creativity and Individualism are Rare

31) A simple structure is characterized by

Low Specialization and High Centralization

32) Functional structures are usually found in organizations where there is

High Volume Production

33) At Sharp Corporation, work is divided into units that specialize in production, marketing, research and development, and other management tasks. This is an example of a

Functional Structure

34) Which of the following is an advantage of a functional type of organizational structure?

Pooling of Specialists Enhances Coordination and control

35) Which of the following is a disadvantage of a functional type of organizational structure?

Differences in Functional Orientation May Impede Communication and coordination

36) A divisional structure

Facilitates the development of general managers

37) Which of the following is an advantage of a divisional type of organizational structure?

An enhanced ability to respond quickly to changes in the external environment

38) All of the following are disadvantages of a divisional type of organizational structure except:

There is a seperation of strategic and operating control

40) All of the following are advantages of a strategic business unit (SBU) type of organizational structure except:

THE CORPORATE OFFICE IS MORE REMOVED FROM THE INDIVIDUAL DIVISIONS.

41) Important advantages of a holding company structure include

SAVINGS IN PERSONNEL AND OVERHEAD EXPENSES ASSOCIATED WITH A SMALL CORPORATE OFFICE.

42) Diversified Canadian conglomerate Weston has put its businesses into three primary SBUs, which are

FISHERIES, BAKERIES, AND RETAIL.

43) Complicated working relationships, intense power struggles, and excessive reliance on group processes are disadvantages of what type of organizational structure?

MATRIX

44) Which of the following is considered to be an advantage of a matrix structure?

INCREASED RESPONSIVENESS TO THE MARKET.

45) If an international firm has a multidomestic strategy and a relatively high level of product diversity, the best choice for its organizational structure is

WORLDWIDE MATRIX.

46) If an international firm has a global strategy and a relatively low level of product diversity, the best choice for its organizational structure is

WORLDWIDE PRODUCT DIVISION.

47) The boundaries between levels in an organization's hierarchy are known as

VERTICAL BOUNDARIES.

48) Which of the following boundaries exist between the functional areas of an organization?

HORIZONTAL BOUNDARIES.

49) Which of the following is not a boundaryless organizational design?

MATRIX

50) Organizations are increasingly using teams for many reasons. The difference between a good team and an outstanding team has been found to be

THE WAY TEAM MEMBERS TREAT EACH OTHER.

51) Which of the following is not a disadvantage of the barrier-free form of organization?

FEWER INTERNAL BARRIERS MEANS FEWER POLITICAL ISSUES TO DEAL WITH.

52) What type of organization is defined as "a central hub surrounded by networks of outside suppliers and specialists"?

MODULAR

53) What is the name of the practice that many modular organizations use to grow?

OUTSOURCING

54) What advantages does outsourcing provide an organization?

ALL OF THE ABOVE

55) Which of the following is not a strategic risk of outsourcing?

LOSS OF NON-VITAL FUNCTIONS

56) The phrase that best defines a virtual organization is

A CONTINUALLY EVOLVING NETWORK OF INDEPENDENT COMPANIES.

57) Complete the following sentence: "Virtual organizations _______ whereas modular organizations________

GIVE UP PART OF THEIR STRATEGIC CONTROL, RETAIN FULL STRATEGIC CONTROL."

58) Which of the following is not a disadvantage of virtual structures?

DIFFICULTY IN INDIVIDUAL AND ORGANIZATIONAL KNOWLEDGE SHARING.

1) For firms competing in highly unstable and turbulent industries, "traditional" strategic controls are most appropriate.

F

2) Sales quotas, operating budgets, and production schedules are examples of "traditional" controls.

T

3) Quotas are examples of "traditional controls."

T

4) Enron, WorldCom, and other US companies have suffered from management abuses; Canada's public companies have not survived unscathed.

T

5) "Contemporary" strategic controls involve comparing actual performance to predetermined goals.

F

6) Continuous monitoring enhances an organization's ability to respond with speed and flexibility.

T

7) The US Congress introduced the Sarbanes-Oxley Act in 2002 to ensure better governance of public corporations. Similar provisions have NOT been put in place in Canada.

F

8) For young managers who see themselves as free agents, behavioral controls such as rewards and culture can be an effective way to enhance organizational loyalty.

T

9) Once a strong and healthy organizational culture has been established, it becomes self-sustaining.

F

10) An organization's reward system is typically a weak method of motivating employees.

F

11) Different functional areas within an organization often have different reward systems. TRUE

T

12) Reward systems that reinforce an organization's core values and contribute to organizational cohesiveness are the least effective type. FALSE

F

13) For a reward system to be effective, it must be perceived as fair and equitable. TRUE

T

14) Boundaries and constraints, when used properly, can minimize improper and unethical conduct.

T

15) In terms of corporate culture, Cirque du Soleil's focus is on customer service, not innovation.

F

16) Short-term objectives and action plans are types of boundaries that channel the efforts of employees toward goal accomplishment.

T

17) Unexpected events (such as wildcat strikes or new government regulations) have little effect on short-term objectives that need to remain fixed to be effective.

F

18) Action plans permit a degree of autonomy for managers who sometimes must modify activities to achieve the desired outcome.

T

19) In firms that follow related diversification strategies, reward and control systems rely on qualitative indicators since the organization needs to reward and reinforce behaviors that facilitate sharing and collaboration.

T

20) Product diversification by a company is a cheaper way to reduce shareholder risk than portfolio diversification by shareholders.

F

21) The risk of being acquired by hostile raiders is often referred to as the takeover constraint.

T

22) Auditors are appointed by the Securities and Exchange Commission to audit a company's financial statements.

F

23) Stock analysts generally issue more "sell" recommendations than "buy" recommendations.

F

24) Public companies are required by law to disclose information regarding executive compensation packages.

T

25) The Sarbanes-Oxley Act of 2002 requires that CEOs and CFOs of publicly-listed companies must reveal off-balance-sheet finances and vouch for the accuracy of information provided.

T

26) The Sarbanes-Oxley Act of 2002 does not apply to Canadian publicly listed companies operating in the US that are listed on US stock exchanges.

F

27) The "traditional" approach to strategic control is sequential. Which of the following is not one of the steps in the sequence?

ACTION PLANS ARE SUBMITTED BY LOWER LEVEL MANAGERS.

28) The primary drawback of "traditional" strategic control systems is that

THEY LACK THE FLEXIBILITY NEEDED TO ADJUST TO CHANGES IN THE ENVIRONMENT.

29) For business facing complex and turbulent business environments,

TRADITIONAL STRATEGIC CONTROLS ARE USUALLY INAPPROPRIATE.

30) McGill University's Prof. Mintzberg, writing about leaders and strategy, had observations which

CAST DOUBT ON THE VALUE OF RIGID PLANNING AND GOAL-SETTING PROCESSES.

31) Contemporary approaches to strategic control rely primarily on

DOUBLE-LOOP LEARNING.

32) Which of the following is not one of the characteristics of a contemporary control system?

IT CIRCUMVENTS THE NEED FOR FACE-TO-FACE MEETINGS AMONG SUPERVISORS, SUBORDINATES, AND PEERS.

33) In terms of building and strong and effective corporate culture, Canada's Cirque du Soleil was described as focusing on

INNOVATION

34) Which of the following approaches to behavioral strategic control should be utilized least in an organization in which there is a great need for innovation and a high degree of autonomy?

BOUNDARIES

35) Most successful organizations minimize the need for explicit rules, regulations, and other boundaries by

DESIGNING EFFECTIVE REWARD SYSTEMS.

36) All of the following are examples of how organizational culture exerts behavioral control except:

CULTURE SETS EXPLICIT BOUNDARIES

37) In terms of providing short-term objectives and action plans, which Canadian company was mentioned by the text in Chapter 10 as having the vision of being a "national champion and Canada's most trusted company"?

CANADIAN TIRE.

38) Which of the following is not one of the functions of reward and incentive systems?

THEY REPRESENT A POOR MEANS OF INFLUENCING AN ORGANIZATION'S CULTURE.

39) All of the following are characteristics of effective reward and incentive systems except:

THE STRUCTURE IS FIXED TO ENSURE EMPLOYEES OF CONSISTENCY.

40) The causes of counterproductive behavior in organizations include

ALL OF THE ANSWERS ARE CORRECT.

41) Effective short-term objectives have all of the following priorities except

AN EMPHASIS ON "DO YOUR BEST" GOALS.

42) In firms with overall low-cost strategies, the culture should foster_______levels of interdependence and rewards should be based primarily on _______ measures of output.

LOW, Financial

43) In firms with differentiation strategies, the culture should foster ______ levels of interdependence and rewards should be based primarily on _______ measures of output.

High, Behavioral

44) In firms with related diversification strategies, the culture should foster ______ levels of interdependence and rewards should be based primarily on _________measures of output.

High, Behavioral

45) External control mechanisms include all of the following except

COMPETITORS.

46) Managerial opportunism can take all of the following forms except

JOB-HOPPING.

47) By takeover constraint, we mean

THE RISK OF BEING ACQUIRED BY A HOSTILE RAIDER.

48) It is generally argued that the takeover constraint deters management from

ENGAGING IN OPPORTUNISTIC BEHAVIOR.

49) The failure of many auditing firms to raise red flags about accounting irregularities in companies such as Enron and WorldCom is generally attributed to all of the following factors except

THE FAILURE OF U.S. AUDIT FIRMS TO FOLLOW INTERNATIONALLY ACCEPTED ACCOUNTING STANDARDS.

50) Canadian IT company Nortel was cited by the text as an example of "flawed corporate governance" because

ALL OF THE ANSWERS ARE CORRECT.

51) All of the following are types of information that a firm is required to disclose except

DETAILS OF NEW PRODUCTS UNDER DEVELOPMENT.

Chap. 11:

...

1) Royal Group of Woodbridge became North America's largest PVC extruder.

T

2) Setting a direction is the leadership activity that involves developing a strategic vision of what the organization could become.

T

3) Designing and organization is the leadership activity that involves building structures, teams, systems, and processes that facilitate the implementation of a leader's vision.

T

4) Leaders play an important role in sustaining an organization's culture, but they are powerless to change it.

F

5) Leaders are not expected to accept personal responsibility for ethical behavior in an organization because ethics is a matter of individual choice.

F

6) Systemic barriers to change refer to elements of an organization's design, structure, and reporting relationships that impede the flow of information.

T

7) Behavioral barrier to change occur because of conflicts between departments, conflicts arising from power relationships, and refusal to share information.

F

8) The two broad bases of a leader's power are organizational and hierarchal.

F

9) "Coercive power" is the power exercise by use of fear of punishment for errors of either omission or commission by employees.

T

10) In terms of the strategy of expansion, with over 2,400 outlets in Canada, Tim Hortons has much room for growth.

F

11) Emotional Intelligence (EI) is generally a better predictor of life success than Intelligence Quotient (IQ).

T

12) Empathy, one of the components of Emotional Intelligence (EI), refers to one's proficiency in managing relationships and building networks.

F

13) Organizational learning works best when an organization's leaders gather information and teach it to employees who are like their students.

F

14) Successful learning organizations have a proactive, creative approach to the unknown.

T

15) A key function of the leaders in a learning organization is to generate an organization-wide commitment to the status quo.

F

16) Inspiring and motivating people with a mission or purpose is a necessary and sufficient condition for developing a learning organization.

F

17) To successfully empower employees to achieve organizational goals, leaders must perform the tasks of resource allocation and power brokering.

F

18) In the "top-down" approach to empowerment, leaders clarify the mission, delegate responsibility, and hold people accountable for results.

T

19) Canadian steel company Dofasco's 7,300 employees are NON unionized.

T

20) "Open book" management is a technique for gathering and disseminating internal information so that all employees can be involved in decision making and management.

T

21) Business ethics is the application of ethical standards to commercial enterprise.

T

22) Ethical behavior can be reinforced through the use of an appropriate reward and evaluation system.

T

23) An effective way to instill ethical behavior in an organization is to distribute rewards strictly on the basis of outcomes.

F

25) Which of the following is an important characteristic of a leader?

GOAL-ORIENTED

26) According to the text, effective leadership is like a three-legged stool consisting of all the following except

DEDICATION TO MAINTAINING THE STATUS QUO.

27) The leader's role in developing a strategic vision provides many benefits including

ALL OF THE ANSWERS ARE CORRECT.

28) Poor organizational design by leaders can result in all of the following except

TEAMS, SYSTEMS, AND ORGANIZATIONAL PROCESSES THAT FACILITATE IMPLEMENTATION.

29) In terms of nurturing a corporate culture, Canada's Cirque du Soleil was transformed by Guy Laliberte who

PUSHED HIMSELF AND HIS ARTISTS TO CONTINUOSLY EXPERIMENT.

30) Leaders play a key role in developing and sustaining an organization's

CULTURE.

31) Canadian icon Tim Hortons' future plans

INVOLVE EXPANDING ON THEIR 250 FRANCHISES THEY HAVE IN THE U.S.

32) Refusal to share information, conflicts over resources, conflicts between departments and divisions, and petty interpersonal differences are symptoms of which type of barrier to change?

POLITICAL BARRIERS

33) Which of the following explains why organizations are prone to inertia and slow to change?

ALL OF THE ANSWERS ARE CORRECT

34) All of the following constitute organizational bases of a leader's power except

REFERENT POWER.

35) Expert power is

DERIVED FROM THE LEADER'S CAPABILITY AND KNOWLEDGE IN A PARTICULAR FIELD.

36) Coercive power IS

THE POWER EXERCISED BY USE OF FEAR OF PUNISHMENT FOR ERRORS OF OMISSION OR COMMISSION BY EMPLOYEES.

37) The source of referent power is

A SUBORDINATE'S IDENTIFICATION WITH THE LEADER.

38) The three broad sets of capabilities that a leader should possess include all of the following except

CALCULATIVE ABILITIES

39) All of the following are components of Emotional Intelligence (EI) except

SELF-PROMOTION.

40) Which of the following is not a characteristic of a successful learning organization?

THEY REGULARLY ENGAGE IN ACTIVITIES TO REINFORCE THE STATUS QUO.

41) Complete the following sentence: "Inspiring and motivating people with a mission or purpose is a __________________ for developing an organization that can learn and adapt."

NECESSARY BUT NOT A SUFFICIENT CONDITION

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