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Student name:__________
1) Explain organizational structure.
2) Why should a firm centralize its decision making?
3) Explain the five reasons a firm should decentralize its decision making.
4) Describe the situation where an international division makes sense. How common is this
structure? What are the disadvantages of the structure?
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5) What are the main strengths and weaknesses of the worldwide product division structure?
6) What is a knowledge network? What is the advantage of such a system?
7) Consider the use of personal controls in international firms. In which type of firm is this
control most common?
8) Discuss the characteristics of a firm that is pursuing an international strategy.
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9) Discuss the sources of inertia in organizations. Is it easy to make organizational changes?
10) What are the basic principles for successful organizational change?
11) Discuss the issues involved in unfreezing an organization.
12) Discuss the issues involved in refreezing an organization.
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13) A firm’s organizational culture refers to the
A) norms and value systems that are shared among the employees of an organization.
B) formal organizational structure of the company.
C) control systems and incentives in place.
D) human resources component.
14) Organizational structure includes several elements. Which of the following is one of
them?
A) The establishment of integrating mechanisms to coordinate the activities of subunits.
B) The horizontal decision making that occurs daily, for example, on the plant floor to
improve operations.
C) The manner in which decisions are made and work is performed by individuals.
D) The informal division of the organization into cultural groups.
15) Which of the following terms refers to the metrics used to measure the performance of
subunits and make judgments about how well managers are running those subunits?
A) key processes
B) control systems
C) knowledge networks
D) job evaluations
16) Historically, Unilever measured the performance of national operating subsidiary
companies according to profitability. In this example, profitability is
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A) a control system.
B) a process.
C) an integrating mechanism.
D) an incentive.
17) The manner in which decisions are made and work is performed within the organization
is known as the firm’s
A) organizational culture.
B) incentives.
C) control systems.
D) processes.
18) The norms and values systems that are shared among the employees of a company are
referred to as
A) processes.
B) control systems.
C) incentives.
D) organizational culture.
19) _____ are the metrics used to measure the performance of subunits and make judgments
about how well managers are running those subunits.
A) Cultural controls
B) Control systems
C) Output controls
D) Incentives
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20) A firm’s _____ determines where in its hierarchy the decision-making power is
concentrated.
A) organizational architecture
B) vertical differentiation
C) organizational structure
D) horizontal differentiation
21) By centralizing decision making, a firm
A) allows managers to respond to environmental changes more quickly.
B) runs the risk of not being able to respond to environmental changes quickly.
C) can avoid the duplication of activities that occurs when similar activities are carried
on by various subunits within the organization.
D) often has issues with duplication of activities that occurs when similar activities are
carried on by various subunits within the organization.
22) _____ gives top-level managers the power and authority to be able to bring about needed
major organizational changes.
A) Personal control
B) Decentralization
C) Bureaucratic control
D) Centralization
23) A firm pursuing _____ will have a strong incentive to decentralize decision making.
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A) a localization strategy
B) a transnational strategy
C) a global standardization strategy
D) an international strategy
24) In firms pursuing _____, some operating decisions are relatively centralized, while others
are relatively decentralized.
A) a global standardization strategy
B) a transnational strategy
C) a localization strategy
D) an international strategy
25) Regardless of a firm’s domestic structure, its international division tends to be
A) organized on economy.
B) decentralized.
C) organized on geography.
D) centralized.
26) The _____ tends to be favored by firms with a low level of diversification whose
domestic structures are based on functions.
A) global matrix structure
B) worldwide product division structure
C) performance structure
D) worldwide area structure
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27) A _____ tends to be adopted by firms that are reasonably diversified and originally had
domestic structures based on product divisions.
A) worldwide product division structure
B) global matrix structure
C) worldwide area structure
D) performance structure
28) In a _____, individual managers belong to two hierarchies (a divisional hierarchy and an
area hierarchy) and have two bosses (a divisional boss and an area boss).
A) worldwide product division structure
B) classic matrix structure
C) worldwide area structure
D) performance structure
29) The need for coordination is greatest in
A) firms trying to pursue localization strategies.
B) international firms.
C) firms trying to profit from location and experience curve economies.
D) domestic corporations.
30) In a _____, all roles are viewed as integrating roles.
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A) worldwide area structure
B) process structure
C) worldwide product division structure
D) global matrix structure
31) _____ control is a type of control that tends to be most widely used in small firms.
A) Personal
B) Output
C) Bureaucratic
D) Cultural
32) In a company using _____, employees tend to control their own behavior, which reduces
the need for direct supervision.
A) bureaucratic controls
B) cultural controls
C) personal controls
D) output controls
33) _____ can be defined as the amount of time top management must devote to monitoring
and evaluating subunits’ performance.
A) Performance ambiguity
B) The formal matrix
C) The costs of control
D) Differentiation
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34) Firms pursuing a global standardization strategy must cope with a higher level of _____,
and this raises their costs of control.
A) vertical differentiation
B) cultural division
C) horizontal differentiation
D) performance ambiguity
35) Which of the following is most difficult for a leader?
A) to change an established organizational culture
B) to import an organizational culture into a new venture
C) to create an organizational culture from scratch in a new venture
D) to export an organizational culture
36) A firm’s _____ determines where in its hierarchy the decision-making power is
concentrated.
A) integrating mechanism
B) vertical differentiation
C) knowledge network
D) horizontal differentiation
37) What is horizontal differentiation?
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A) the mechanisms that enable each subunit to operate independently
B) the formal division of the organization into subunits
C) the location of decision-making responsibilities within a structure
D) the mechanisms for coordinating subunits
38) Integration mechanisms are the
A) formal division of the organization into subunits.
B) mechanisms that enable each subunit to operate independently.
C) mechanisms for coordinating subunits.
D) location of decision-making responsibilities within a structure.
39) Which of the following is one of the four main arguments favoring centralization?
A) It permits greater flexibility.
B) Motivational research favors it.
C) It can avoid the duplication of activities.
D) It gives top management time to focus on critical issues by delegating routine issues
to lower-level managers.
40) Which of the following is one of the five main arguments favoring decentralization?
A) It can facilitate coordination.
B) It can help ensure that decisions are consistent with organizational objectives.
C) It can give top-level managers the means to bring about needed major organizational
changes.
D) It permits greater flexibility.
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41) Centralization
A) gives top management time to focus on critical issues by delegating more routine
issues to lower-level managers.
B) can give top-level managers the means to bring about needed major organizational
changes by concentrating power and authority in one individual or a management team.
C) permits greater flexibility because decisions do not have to be “referred up the
hierarchy” unless they are exceptional in nature.
D) can be used to establish relatively autonomous, self-contained subunits within an
organization.
42) A firm that needs greater flexibility should choose _____ for its decision making.
A) horizontal differentiation
B) decentralization
C) localization strategy
D) control systems
43) Centralization and decentralization differ because centralization
A) hinders coordination, while decentralization facilitates coordination.
B) prevents top-level managers from making required organizational changes, while
decentralization gives top-level managers greater power to make organizational changes.
C) ensures that decisions are consistent with organizational objectives, while
decentralization can result in decisions at variance with organizational goals.
D) promotes flexibility, while decentralization reduces flexibility.
44) Which of the following decisions is typically centralized at a firm’s headquarters?
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A) production decisions
B) human resource management
C) marketing decisions
D) overall firm strategy
45) The emphasis on local responsiveness in firms pursuing a localization strategy creates
strong pressures for
A) centralizing all decisions regarding marketing, R&D, and human resource
management.
B) decentralizing operating decisions to foreign subsidiaries.
C) centralizing all operating decisions.
D) global learning.
46) Global learning based on the multidirectional transfer of skills between subsidiaries and
the corporate center is a central feature of a firm pursuing _____ strategy.
A) a localization
B) a global standardization
C) a transnational
D) an international
47) Which of the following would be a typical responsibility of a product division in a
worldwide product divisional structure?
A) operating decisions
B) overall strategic development of the firm
C) financial control of the various divisions
D) decisions regarding legal issues
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48) Which of the following statements is true about a product divisional structure?
A) In a product divisional structure, the responsibility for the financial control of the
firm is typically decentralized.
B) A product divisional structure tends to be organized on geography.
C) In a product divisional structure, each product division is set up as a self-contained,
largely autonomous entity with its own functions.
D) In a product divisional structure, the responsibility for operating decisions is
typically centralized.
49) Regardless of a firm’s domestic structure, its international division tends to be organized
on
A) product.
B) geography.
C) people.
D) economy.
50) Which of the following is a problem that arises due to an international division structure?
A) In an international division structure, a firm’s international division tends to be
organized on products.
B) The heads of domestic functions are presumed to be able to represent the interests of
all countries to headquarters.
C) The heads of foreign subsidiaries are not given as much voice in the organization as
the heads of domestic functions or divisions.
D) The dual-hierarchy structure can lead to conflict and perpetual power struggles
between the areas and the product divisions.
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51) In which of the following organizational structures are the domestic operations and
foreign operations isolated from each other leading to coordination problems?
A) global matrix structure
B) international division structure
C) worldwide product division structure
D) worldwide area structure
52) Which of the following is true regarding a worldwide area structure?
A) It tends to be favored by firms with a high degree of diversification.
B) It inhibits local responsiveness.
C) It tends to be favored by firms with a domestic structure based on functions.
D) Decision-making responsibilities are centralized.
53) A _____ encourages fragmentation of the organization into highly autonomous entities.
A) worldwide area structure
B) global matrix structure
C) worldwide product structure
D) global network structure
54) _____ tends to be adopted by firms that are reasonably diversified.
A) A worldwide area structure
B) An international division structure
C) A worldwide product division structure
D) A global matrix structure
55) The worldwide product division structure
A) is weak in local responsiveness.
B) inhibits the realization of location economies.
C) inhibits the realization of experience curve economies.
D) limits the transfer of core competencies between areas.
56) In the classic global matrix structure, horizontal differentiation proceeds along two
dimensions. These dimensions are
A) hierarchy and overall strategy.
B) target returns and sales potential.
C) marketing strategy and sales potential.
D) product division and geographic area.
57) In practice, the dual hierarchy in a global matrix structure
A) lessens all forms of conflict.
B) makes it easy to ascertain accountability.
C) results in extremely quick decision making.
D) can lead to perpetual power struggles.
58) The need for coordination between subunits is lowest in firms pursuing