Creating Effective Organizational Designs

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Question 1
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The strategy and structure of a firm change as the firm increases in size, diversifies into new product markets, and limits its geographic scope.

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Question 2
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A strategy of related diversification requires a need to reorganize only around product lines. This leads to a divisional structure.

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Question 3
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When a firm has international operations, choosing the most appropriate structure depends upon the extent of international expansion, the type of strategy, and the degree of market density.

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Question 4
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The most appropriate type of organizational structure to select is dependent upon the product or service the company provides.

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Question 5
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In a simple structure where the owner manager makes most of the important decisions, extensive rules and regulations are used to maintain order.

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Question 6
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As firms grow, owner managers often need to hire functional specialists to handle the increased information-processing burden.

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Question 7
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To enhance integration and control of related product market activities, the functional structure minimizes centralization.

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Question 8
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Operational decision making in a large business places excessive demands on top management of the firm.

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Question 9
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A worldwide product division structure is used when global strategies require that each division be responsible for overall efficiency and performance.

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Question 10
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Global start-ups occur after a corporation has exhausted all other possibilities for domestic growth.

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Question 11
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Three major contingencies that influence the chosen structure of a company are: the type of strategy that drives its foreign operations, its product diversity, and the extent to whichthecompany is dependent on foreign sales.

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Question 12
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Logitech International is an example of a company that began as a global start-up, with headquarters in both California and Switzerland and operations in both countries.

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Question 13
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Jack Welch, former CEO of GE, believes that all internal and external organizational boundaries should vanish completely.

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Question 14
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In a barrier-free organization, differences in skills, authority, and talent disappear.

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Question 15
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According to author Jeffrey Pfeffer, the advantages of teams are that employees control themselves, develop more creative solutions to problems, and permit the absorption of administrativetasks previously performed by specialists.

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Question 16
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Managers trained in rigid hierarchies do not find it difficult to transition to participative style required for effective teamwork.

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Question 17
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Ambidextrous organizational designs are useful for firms that wish to create modest, incremental innovations at the same time as dramatic, breakthrough innovation. This is done by maintaining adaptability and alignment of values and coordination across organizational activities.

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Question 18
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One of the challenges of an ambidexterity in a firm is that it must ensure that it remains proactive in expanding or modifying its product-market scope to anticipate and satisfy marketconditions.

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Question 19
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Firms that place too strong a priority on either adaptability or alignment can expect short term gains only.

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Question 20
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The O'Reilly and Tushman study on ambidextrous organizational designs found that there was little support for the argument that organizational structure, management practices employedandperformance of both the breakthrough initiative and the traditional business are related.

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