Question 1

A structure is a structure in which horizontal differentiation proceeds along two dimensions: product division and geographic area.

Accepted Answer

A)  global matrix
B)  international division
C)  worldwide product divisional
D)  worldwide area
E)  functionalF) A) and E)
G) A) and B)

Question 2

In a multidivisional structure, corporate managers can compare the performance of one division against another in terms of its cost structure or the profit it generates.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following statements is true in the context of a worldwide area structure?

Accepted Answer

A)  In a worldwide area structure, strategic direction of the finn and financial control are the responsibility of each area.
B)  A worldwide area structure tends to be favored by companies with a high degree of diversification.
C)  A worldwide area structure facilitates local responsiveness, which is why companies pursuing a localization strategy favor it.
D)  In a worldwide area structure, it is easy to transfer distinctive competencies and skills between areas and to realize operating efficiencies.
E)  A worldwide area structure helps a finn gain the benefits associated with global standardization.F) A) and B)
G) A) and C)

Question 4

When a finn implements a global strategy with a worldwide product divisional structure, it will be more responsive to the unique needs of each local country.

Accepted Answer

A) True 
 B)False

Question 5

Competition for resources is one of the drawbacks of the multidivisional structure.

Accepted Answer

A) True 
 B)False

Question 6

Reasons why a finn might benefit from the creation of a separate new-venture division include all of the following except:

Accepted Answer

A)  better protection of the division's autonomy.
B)  less scrutiny from top managers.
C)  removal from day-to-day pressures of the firm.
D)  ease in developing a culture that fosters innovation.
E)  risk-free and stable business operations.F) C) and E)
G) B) and C)

Question 7

Corporate managers must treat the internal new-venturing process as a form of entrepreneurship.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements is tme about related diversification in the context of a multidivisional stmcture?

Accepted Answer

A)  It makes it easier for corporate managers to assess the performance of individual divisions.
B)  It has the lowest bureaucratic costs.
C)  It requires sophisticated integrating devices to ensure coordination among divisions.
D)  It involves divisions that operate autonomously, and the company can easily reward managers based upon their division's individual performance.
E)  It provides scope for corporate managers to easily use output control.F) C) and D)
G) B) and E)

Question 9

Which of the following is an advantage of joint ventures?

Accepted Answer

A)  They are less expensive and easier to implement.
B)  They give companies good control over their core technological competencies.
C)  They always provide equal amounts of profits to both the parent companies.
D)  They involve the pooling of competent managers and resources from both companies.
E)  They involve minimal risks and conflicts.F) D) and E)
G) A) and C)

Question 10

It is important for corporate managers to be able to identify high-performing and underperforming divisions and to take corrective action as necessary.

Accepted Answer

A) True 
 B)False

Question 11

The multidivisional organization structure offers all of these advantages except:

Accepted Answer

A)  enhanced corporate financial control.
B)  enhanced strategic control.
C)  enhanced growth.
D)  lesser competition for resources.
E)  fewer coordination and control problems.F) B) and D)
G) A) and B)

Question 12

Different divisions in a finn with a Multidivisional structure are not given authority to adopt their own organizational structures.

Accepted Answer

A) True 
 B)False

Question 13

Vertical integration is a more expensive strategy to manage than unrelated diversification.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following statements is true in the context of internal venturing?

Accepted Answer

A)  The managers who pioneer the new venture lack autonomy and decision-making powers.
B)  Strict output controls are most appropriate for new venture divisions.
C)  Stock options are often used in new venture divisions.
D)  Most of the operational functions of the new venture division are centralized.
E)  New venture projects are never complete without the involvement of an external company.F) A) and B)
G) A) and C)

Question 15

Companies pursue a global diversification and differentiation strategy when they want to minimize costs.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements is true about vertical integration in the context of a multidivisional organizational structure?

Accepted Answer

A)  It is a less expensive strategy to manage than unrelated diversification.
B)  It makes delegation of authority easier between corporate and divisional managers.
C)  It does not require the exchange of information and skills among managers of different divisions.
D)  It is managed through a combination of corporate and divisional controls.
E)  It often increases the scope for transfer pricing problems.F) B) and D)
G) A) and B)

Question 17

Which of the following statements is true about the multidivisional structure?

Accepted Answer

A)  It is found to be creating more coordination and control problems than functional and product structures.
B)  It has divisions that are dependent on each other for day-to-day value chain operations.
C)  It has a flatter organizational structure compared to functional and product structures.
D)  It can have divisions which in tum have a functional, matrix, or a market structure.
E)  It is characterized by the absence of a corporate headquarters office.F) B) and E)
G) All of the above

Question 18

Which of the following corporate strategies results in the highest bureaucratic costs?

Accepted Answer

A)  Sequential resource integration
B)  Vertical integration
C)  Independent diversification
D)  Related diversification
E)  Unrelated diversificationF) A) and B)
G) None of the above

Question 19

Which of the following is a disadvantage of the multidivisional structure?

Accepted Answer

A)  It makes it difficult to assess the profitability of the finn.
B)  It does not give corporate managers the time they need to contemplate wider long-term strategic issues.
C)  It makes it mandatory for corporate managers to allocate equal amounts of resources to all the divisions.
D)  It creates more scope for communication problems and information overload compared to other structures.
E)  It makes it complex for corporate managers to strike a balance between centralization and decentralization.F) A) and B)
G) A) and E)

Question 20

Explain the benefits of the multidivisional structure for managing a finn that competes in several industries.

Accepted Answer

Mohawk should consider use of the global...

Exam 13: Implementing Strategy in Companies That Compete Across Industries and Countries

In a multidivisional structure, corporate managers can compare the performance of one division against another in terms of its cost structure or the profit it generates.

Correct AnswerverifiedShow Answer

Corporate managers must treat the internal new-venturing process as a form of entrepreneurship.

Correct AnswerverifiedShow Answer

Which of the following corporate strategies results in the highest bureaucratic costs?

Correct AnswerverifiedShow Answer

Which of the following is an advantage of joint ventures?

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Explain the benefits of the multidivisional structure for managing a finn that competes in several industries.

Correct AnswerverifiedMohawk should consider use of the global...View AnswerShow Answer

Reasons why a finn might benefit from the creation of a separate new-venture division include all of the following except:

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Which of the following statements is true about vertical integration in the context of a multidivisional organizational structure?

Correct AnswerverifiedShow Answer

Which of the following statements is tme about related diversification in the context of a multidivisional stmcture?

Correct AnswerverifiedShow Answer

A structure is a structure in which horizontal differentiation proceeds along two dimensions: product division and geographic area.

Correct AnswerverifiedShow Answer

Companies pursue a global diversification and differentiation strategy when they want to minimize costs.

Correct AnswerverifiedShow Answer

Which of the following statements is true in the context of internal venturing?

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Which of the following statements is true in the context of a worldwide area structure?

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When a finn implements a global strategy with a worldwide product divisional structure, it will be more responsive to the unique needs of each local country.

Correct AnswerverifiedShow Answer

Which of the following statements is true about the multidivisional structure?

Correct AnswerverifiedShow Answer

Different divisions in a finn with a Multidivisional structure are not given authority to adopt their own organizational structures.

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Vertical integration is a more expensive strategy to manage than unrelated diversification.

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It is important for corporate managers to be able to identify high-performing and underperforming divisions and to take corrective action as necessary.

Correct AnswerverifiedShow Answer

Competition for resources is one of the drawbacks of the multidivisional structure.

Correct AnswerverifiedShow Answer

The multidivisional organization structure offers all of these advantages except:

Correct AnswerverifiedShow Answer

Which of the following is a disadvantage of the multidivisional structure?

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Mohawk should consider use of the global...
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