Exam 3

Which of the following is not a primary factor that a large firm with international operations should consider when choosing the appropriate structure for its organization?

the degree of market diversity

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

functional

When an organization with a functional structure diversifies into related product-markets, it generally

develops a divisional structure.

As illustrated in the opening case for Chapter 10, Boeing lost a lot of control and, therefore, incurred high operating costs for its build out of the 787 Dreamliner because it ________ design and manufacturing.

outsourced

Organizations that make it to the growth stage, design strategies to

increase the overall scope of operations.

A matrix organizational structure is characterized by a combination of the ________ structure and ________ structure.

functional; divisional

One of the reasons that Asian conglomerate business groups continue to grow and those in the United States are seen to be unfocused and unlikely to succeed is that

Asian conglomerates are made up of a set of legally separate corporations, each with its own board of directors and shareholders.

Functional structures are usually found in organizations where there

is high volume production.

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

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

Pooling of specialists enhances coordination and control.

Which of the following statements about simple organizational structures is false?

Creativity and individualism are rare.

The relationship between strategy and structure can be best described as

strategy and structure influence each other.

A global start-up faces many management challenges including

communication and coordination across time zones.

If a firm outsources some parts of its value chain in order to reduce costs and increase quality and at the same time engages in multiple alliances to penetrate new markets, this is an example of a firm using a ________ of organizational types.

combination

What advantages does outsourcing not provide an organization?

improved buyer positioning

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.

Virtual organizations ________ whereas modular organizations ________.

give up part of their strategic control; retain full strategic control

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

difficulty in individual and organizational knowledge sharing

The phrase that best defines a virtual organization is a(n)

continually evolving network of independent companies.

GM is creating an alliance with Lyft, a major ride-sharing service, to facilitate

creativity

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

Additional integration issues result in a slower response to market changes.

Effective ambidextrous organizations maintain adaptability, which means that

managers must remain proactive in expanding and/or modifying their product-market scope to anticipate and satisfy market conditions.

A study by Great Places to Work, a research and consulting firm, highlights the benefits of breaking down boundaries to get all employees interested in innovative opportunities. Firms in the ________ quartile on the inclusiveness rankings had experienced growth, on average, five times greater than firms ranked in the ________ quartile.

top; bottom

According to the study by O'Reilly and Tushman, effective ambidextrous structures had all the following attributes except

managerial efforts were highly focused on revenue enhancement.

Critics of flat leadership structures argue that flattening organizations face unintended negative consequences. Which is not one of these potential consequences?

decreased friction between units

Which of the following statements about leadership is false?

Leaders work to build a status quo and seek control mechanisms to maintain it.

Effective leadership is like a three-legged stool. Which of the following is not represented by one of the stool legs?

maintaining the status quo

According to the textbook, ________ and ________ must accept personal responsibility for developing and strengthening ethical behavior throughout the organization.

managers; top executives

Which of the following does not constitute organizational bases of leader power?

referent power

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

Former CEO of Check Point Software Technologies, Deborah Triant, says that debating is easy, listening with an open mind is not. She says that the worst thing a leader can do in the decision-making process is to voice an opinion before anyone else can. This is an example of a ________ skill.

social

CEOs who are ________ tend to have a wide circle of acquaintances as well as a knack for finding common ground and building rapport.

socially skilled

Leaders risk creating a culture of fear and micromanagement if they

create personal connections with their people through frequent unannounced visits.

Superbosses develop employees by doing all of the following except

set average expectations.

The central key to empowerment in a learning organization is

effective leadership.

Effective learning organizations must redistribute ________, ________, and ________ in order to assure that there is a common body of knowledge.

information; knowledge; rewards

Recognizing opportunities and threats in the external environment is vital to firm success. Complexity and rapid evolution make it critical for employees and managers to become more aware of ________ trends and events.

environmental

Superbosses set ________ expectations for those around them, but they also instill a sense of ________ and ________ in the team.

high; purpose; confidence

Strong leaders create a balance in giving ________ to employees while providing the ________ needed to build skills.

autonomy; mentoring

An ethically sound organization, drawing on the concepts of stakeholder management, can also strengthen its bonds among its ________, ________, and ________.

suppliers; customers; governmental agencies

Which of the following positive relationships is not supported with consistent results?

between ethical performance and measures of financial performance

A strong ethical orientation can have ________ on employee commitment and motivation to excel.

a positive effect

In the compliance-based approach to ethics management, the methods used include

reduced discretion, training, controls, audits, and penalties

In the integrity-based approach to ethics management, the objective is to

enable responsible conduct.

The ethical compass of an organization, in the integrity-based ethics approach to management, consists of the expected ________ and ________.

responsibilities; aspirations

Many situations that a firm faces have regular, identifiable patterns. Leaders tend to handle such routines by establishing ________ or ________ to be followed that can be applied ________ to each occurrence.

a policy; a procedure; uniformly

A highly ethical organization must have all the following elements except

payment plans.

This legal act provides considerable legal protection to employees of publicly traded companies who report unethical or illegal practices.

Sarbanes-Oxley Act

While carefully developed policies and procedures guide behavior, they need to be reinforced with all the following except

threats of dismissal.

Radical innovations

often occur because of technological change.

________ produce fundamental changes that can transform a company or even revolutionize an industry, while ________ enhance existing practices and often represent evolutionary applications of fundamental breakthroughs.

Radical innovations; incremental innovations

According to the characterization of innovations by Professor Clayton Christensen, the rise of the smartphone was ________ innovation rather than ________ innovation.

a sustaining; a disruptive

New technology is an important source of new ideas because it

provides the raw material that firms use to make innovative products and services.

Innovation involves using ________ knowledge to ________ organizational processes or create commercially viable products and services.

new; transform

In a typical corporation, which of the following factors does not determine how entrepreneurial projects will be pursued?

number of innovation projects in the pipeline

McGrath and Keil researched the types of human resource management practices that effective firms use to capture value from their innovation efforts. Which of the following is not one of their findings?

Integrate the performance of individuals with the performance of the innovation.

________ means individuals with highly innovative DNA traits have the ability to connect seemingly unrelated questions, problems, and ideas from different fields that allows them the opportunity to creatively see opportunities others miss.

Associating

Which of the following is not a dilemma faced by corporations trying to manage the innovation process?

emphasizing marketing versus management innovations

Researchers find that networking is an important part of the innovation process. Which of the following is not a benefit of connecting with dormant ties as found in the university research exposed in Insights from Research 12.1?

Interactions with dormant ties are longer than conversations with current ties.

Project ________ involves justifying whether an opportunity is attractive in the marketplace; project ________ involves evaluating the strategic and economic impact of a new venture.

definition; impetus

Which of the following is not part of a culture of entrepreneurship?

A select staff are assigned to be attuned to new opportunities to create business.

Firms are more likely to effectively leverage their technologies in new markets if they identify new applications of the technology by considering a ________ scope of ________ markets.

broad; potential

When considering the best entry mode for effectively leveraging its technologies in new markets, firms will consider all of the following choices except

enter the market by licensing the technology to a newcomer to the market.

Whereas ________ are willing to violate procedures and operate outside normal channels, ________ gather hard data and develop a strong case for why a project should be killed.

product champions; exit champions

The costly Motorola global satellite telecom project known as Iridium provides a useful illustration of the ________. Even though problems with the project existed during the lengthy development process, Motorola refused to pull the plug. Only after investing 5 billion USD and years of effort was the project abandoned.

lack of an exit champion

A(n) ________ manager's role is to question the viability of corporate venture projects.

exit champion

If managers believe that their abilities can reduce the risks inherent in decision making to a much greater extent that they actually can, they might demonstrate ________ and trust only their own judgment rather than conduct sufficient analysis.

managerial conceit

Real options analysis (ROA) is an investment analysis tool from the field of finance. When applied to entrepreneurship, it suggests a path that companies can use to manage the ________ associated with launching ________ ventures.

uncertainty; new

Real options analysis is most appropriate when

a small investment up front can be followed by a series of subsequent investments.

Walmart has an aggressive pricing structure that has forced smaller, local retailers out of business in many markets. Local cities responded with regulations that make it difficult for Walmart to move into or expand operations in these areas. This is an example of

community regulations not leading to competitive advantages.

Which of the following dimensions of entrepreneurial orientation is described as a forward-looking perspective characteristic of a marketplace leader that has the foresight to seize opportunities?

proactiveness

Which of the following is not one of the dimensions of entrepreneurial orientation?

opportunism

After 15 teams created 128 different phones, Chris Galvin, former CEO of Motorola, eliminated the autonomous teams being used to develop new wireless phones. This was necessary because such teams

often lack coordination.

One of the following statements about innovativeness is false. Which is it?

Innovativeness refers to making decisions and taking risks without certain knowledge of probable outcomes

XYZ's CEO scrapped the company's commission-based reward system because it was rewarding employees for inappropriate behavior. This is an example of

designing the organization.

Complete the following sentence. "Inspiring and motivating people with a mission or purpose are a for developing an organization that can learn and adapt."

necessary, but not a sufficient condition

Proactive measures to prevent organizational ethics problems include all of the following except

instituting a reward system which considers outcomes as its primary criterion.

Effective leaders should:

•Have empathy for others.
•Be astute judges of people.
•Be passionate, persistent about pursuing valued objectives.
•Create personal connections with people, take time to engage employees individually and in groups.

Effective leaders should NOT:

•Over-identify with others and make it difficult to make tough decisions.
•Become overly critical about shortcomings they perceive in others.
•Allow passion to close their minds to other possibilities.
•Make too many announced visits, creating a culture of fear and micromanagement.

Five key elements of a learning organization.

1.Inspiring and motivating people with a mission or purpose
2.Empowering employees at all levels.
3.Accumulating and sharing internal knowledge.
4.Gathering and integrating external information.
5.Challenging the status quo and enabling creativity.

Ethics

the principles of right and wrong that guide an individual in making decisions

Organizational ethics

promote an operating culture and determine acceptable behavior.

Ethical frameworks for integrity include:

Compliance-based ethics programs.
Integrity-based ethics programs.

Ethical role models:

•Must be consistent in their words and deeds.
•Their values and character must become transparent to an organization's employees.
•They must take responsibility for ethical lapses within the organization.
•Courageous behavior by leaders helps to strengthen an organization's ethical environment.

Leadership

the process of transforming organizations from what they are to what the leader would have them become

Successful leaders are:

•Proactive — dissatisfied with the status quo.
•Goal oriented — visualizing successful futures.
•Focused on the creation & implementation of a creative vision — understanding the process of bringing about change.

Designing the organization

requires building mechanisms to implement the leader's vision and strategies through:
•Structures and teams.
Systems and processes

Lack of appropriate design could cause problems:

•Managers who don't understand their responsibilities.
•Reward systems that are not motivating.
•Inappropriate financial control systems.
•Insufficient integrating mechanisms.

Organizations are prone to inertia, slow to learn, adapt, and change because of:

•Vested interests in the status quo.
•Systemic barriers.
•Behavioral barriers.
•Political barriers.
•Personal time constraints.

Valuable traits of successful leaders:

•Technical skills — accounting, operations research.
•Cognitive abilities — analytical reasoning, quantitative analysis.
•Emotional intelligence — self-management, managing relationships with others.
•Self-awareness, self-regulation, motivation, empathy, social skills.

Innovation requires new knowledge from:

•Latest technology.
•Results of experiments.
•Creative insights.
•Competitive information.

Innovation allows for:

•Transformation of organizational processes.
•Creation of new and commercially viable products and services.

Whereas are often associated with the low-cost leader strategy, are frequently an important aspect of the differentiation strategy.

process innovations; product innovations

•Product innovation:

•Creates new product designs.
•Applies technology to develop new products for end-users.
•Common during early stages of an industry's life cycle.
•Associated with a differentiation strategy.

•Process innovation:

•Improves the efficiency of an organizational process.
•Improves materials utilization, shortens cycle time, increases quality.
•Common during later stages of an industry's lifecycle.
•Associated with overall cost leadership strategies.

•Radical innovation:

•Major departure from existing practices.
•Usually as a result of technological change.
•Can be highly disruptive.
•Can transform or revolutionize a whole industry.

•Incremental innovation:

•Can enhance existing practices.
•Make small improvements in products and processes.
•Can create evolutionary applications of earlier innovations; provide new capabilities.

•Sustaining innovations:

•Extend sales in an existing market.
•Enable new products or services to be sold at higher margins, i.e., via the Internet.
•May be incremental or radical innovations.

•Disruptive innovations:

•Overturn markets with a new approach to meeting customer needs.
•Are technologically simpler and less sophisticated.
•Appeal to less demanding customers.
•Take time to take effect.

Corporate entrepreneurship

•Pursuit of new venture opportunities.
•Strategic renewal via "intrapreneuring."