Strategic Organization Design Coursera Quiz Answers

All Weeks Strategic Organization Design Coursera Quiz Answers

Strategic Organization Design Week 01 Coursera Quiz Answers

Quiz 1: Understanding Organizations

Q1. Stakeholders can be…

• … facility managers.
• … customers.
• … suppliers.
• … employees.
• … lobbyists.

Q2. Which of the statements are true?

• Structural dimensions are influenced by contextual dimensions.
• The majority of organizations today are striving for greater vertical coordination of work activities.
• In response to environmental changes, successful firms try to keep the boundaries within their organization as stable as possible in order to keep up their competitive advantage.
• Greater horizontal coordination of work activities implies a higher degree of hierarchy.
• Contextual dimensions comprise formalization, specialization, hierarchy of authority, centralization, professionalism, and personnel ratios.

Quiz 2: Basics of Organization Design

Q1. Organization design…

• … provides structure to organizations.
• … describes a set of an organization’s fundamental problems.
• … increases organizational performance and effectiveness.

Q2. Professionalism and personnel ratios fall into the category of

• contextual dimensions.
• structural dimensions.

Quiz 3: Structure Organizations

Q1. BMW is planning to fabricate a new hybrid car. The production of this vehicle requires special components which cannot be produced in the same way as the respective parts of BMW’s regular series. BMW requires 400 batches of brakes every year in order to produce the amount of hybrid cars that meets the demand of its customers.

The additional costs for fabricating them in-house would include the purchase of a new machine which produces the components of the new brakes and costs €250.000,-. Maintenance charges sum up to €10.000,- per year. The price for the material and staff required to produce one batch of these transaction-specific brakes would amount to €100,- per unit.

Alternatively BMW can find a supplier of ready-made brakes matching its hybrid car. Finding the right supplier is however costly as well. BMW needs to compare prices and qualities of the various manufacturers requires time and effort. After finding the right supplier, BMW has to negotiate a contract, agree on terms and conditions, control the supplier and sanction him in case of a violation of the contract. The price for one batch of brakes obtained from this supplier sums up to €500,- per unit.

How high can the remaining external transaction costs at maximum be, so that BMW does not decide to produce the brakes in-house? Only take the first year of production into account!

• €10.000,-
• €50.000,-
• €75.000,-
• €100.000,-
• €120.000,-

Q2. Is this statement true?

According to economic theory, transactions only take place in markets.

• True.
• False.

Q3. An organization…

• … is about many actors coming together to achieve individual goals.
• … is linked to the external environment.
• … has identifiable boundaries e.g. via membership.
• … always requires a formal design.
• … exists when the sum of transaction costs within the organization exceeds the price for the same transaction in the market.

Q4. This is an example for an organization:

• Amnesty International.
• University (e.g. LMU Munich).
• Friends coming together to visit a music festival.
• FC Bayern Munich.
• People on the same train.

Q5. Transaction costs…

• … comprise finding the right contract partner, producing a good, drawing up a contract, inspecting it, negotiating the terms and conditions, sanctioning the partner if the contract has been violated.
• … are incurred as organizations need to discover what prices are. Information asymmetries result in need e.g. for costly contracting.
• … are always lower in organizations than in markets.
• … only exist in market transactions.
• … are studied in order to assess whether a firm should produce goods or services itself or purchase them externally (make-or-buy decision).

Q6. Why do firms exist?

• Because they bring together resources to achieve desired goals.
• To realize economies of scale and scope and, hence, produce goods and services efficiently.
• As an efficient alternative to the market by reducing transaction costs.
• To maintain the status quo in the market.
• As it is easier for members of an organization to achieve one’s individual goal.

Q7. Universal challenges for organizations comprise…

• … task division.
• … the provision of information.
• … four elements and there are no other challenges to organizations.
• … summarized division of labor and integration of effort.
• … maintenance of organizational property like buildings and car pool.
• … the intrinsic and extrinsic motivation of their employees.

Q8. Which of the statements are true?

• An employee – shareholder relationship describes an agency problem.
• In the context of the agency problem, the agent is giving directions, whereas the principal is taking these directions.
• The agency problem is a challenge within the category of task allocation.
• The principal and the agent have partly differing goals and risk preferences which is why the reward provision should be designed in a way to align the interests of the two parties.

The agency problem emerges in the context of reward provision.

Q9. Mark the incorrect answer:

• BMW engages in charitably events in order to…
• … improve its image.
• … solely spend money so that they can save on taxes.
• increase their corporate social responsibility which is a common challenge for today’s businesses.

Q10. The cooperation problem…

• … emerges as the division of labor generates interdependencies between tasks and agents.
• … refers to the challenge of harmonizing different activities of individuals and units.
• … refers to the challenge of aligning the interest of individuals and units with the same goals.
• … along with the coordination problem, are challenges emerging from organizational structure.
• … can be counteracted with devices such as shared values, performance incentives, and increased competition between employees.

Strategic Organization Design Week 02 Coursera Quiz Answers

Quiz 1: Understanding Complexity

Q1. Interdependencies exist within and between organizations of the same type only.

• False
• True

Q2. Interdependencies typically include (grouped) tasks and/or technologies.

• True
• False

Q3. Tasks are interdependent when the value created by doing both at once and the sum of the value created from doing each by itself are unequal.

• False
• True

Q4. IS.to is a new innovative start-up that operates in the market for ‚internet of things’, employing 20 individuals. Which structure is most likely to be observed at IS.to?

• A
• B
• C

Quiz 2: Managing Complexity

Q1. Interdependencies should be avoided altogether.

• True.
• False.

Q2. A goal frame …

• … comprises a focal goal together with its framing effects. It combines both motive and knowledge.
• is a mental model of courses of action leading to a subgoal.

Q3. What is true about modularity?

• The key concept of modularity is to group elements into clusters by accounting for all of their interdependencies with others.
• The main challenge of using modularity to minimize interdependencies is to make sure this benefit does not come not at the expense of the overall system’s performance.
• Interdependencies can be minimized by using modularity in all kinds of systems.
• Modularity groups tasks, individuals and products into clusters.

Quiz 3: Complexity and Interdependence

Q1. Task interdependence implies a greater need for information processing, as task interdependence generates agent interdependence.

• True
• False

Q2. Task interdependence arises between grouped and not individual tasks, as grouped tasks are interdependent by definition.

• True
• False

Q3. Tasks are interdependent when the value created by doing both at once and the sum of the value created from doing each by itself are unequal.

• False
• True

Q4. Specifically, task interdependence implies an increase in the value created by performing two tasks at once compared to the sum of value created from performing each individually.

• False
• True

Q5. An example for grouped task interdependence is the relationship between the tasks of the kitchen and the waiting staff in a restaurant such as Da Antonio’s.

• True
• False

Q6. FC Bayern Munich faces Atletico Madrid in the UEFA Champions League. Every player performs a certain task in order to win the match for his team. Which statements are true?

• The tasks of all players exhibit complementarity.
• The tasks of players of both FC Bayern Munich and Atletico Madrid are interdependent.
• The coach’s job is to account for the complexity of the game and make use of certain interdependencies.
• The referee’s job is to reduce interdependencies between the players of competing teams.
• The tasks of players of FC Bayern Munich are interdependent.

Q7. Which of the following statements is true?


• Complexity is likely to be greater when one craftsman builds a chair rather than when several workers subdivide tasks necessary to build a chair.
• Interdependence may be a result of division of labor.
• If performing each task by itself results in different input consumption and output value than performing both, an output-related factor inducing interdependence exists.
• Interdependence may arise through division of labor, use of common inputs, slack resources, and one task being the other one’s input.

Q8. Division of labor (DOL)…

• … creates interdependencies resulting in an increase in complexity.
• … indirectly leads to role uncertainty.
• … always facilitates integration of interdependent tasks and agents, as it creates clear responsibilities for agents.
• … increases the amount of individuals with different subgoals.
• … is greater in a company with an assembly line than in a crafts company in which every employee manufactures one order by himself

Q9. According to Puranam (2014), individual behavior in organizations is characterized by three main elements:

• Goals, representations and choice process
• Goals, representations and knowledge
• Goals, subgoals and motivation
• Experience, knowlegde and intuition
• Motivation, knowledge and social pressure

Q10. Decentralization is typically observed when:

• the firm operates in a dynamic environment that requires quick decision making.
• managers are willing to share responsibilities, but not the accompanying power.
• a company is locally centrallized.
• employees are willing to accept more power.

Strategic Organization Design Week 03 Coursera Quiz Answers

Quiz 1: Understanding the Firm Environment

Q1. The environmental sectors comprise…

• …both an organization’s task and corporate environment.
• … the industry sector.
• … the education sector.
• … the human resources sector.
• … the technology sector.

Quiz 2: Industry-Specific Design

Q1. In knowledge industries…

• … employees are typically intrinsically motivated.
• … employees are typically extrinsically motivated.

Quiz 3: Understand your Surroundings

Q1. BMW operates in the automotive industry which is characterized by a unique, very competitive organizational environment. How does its environment affect BMW?

• The economic conditions sector dictates the regulations for the CO2 emissions that BMW’s cars must satisfy.
• The international sector affects BMW indirectly, as it operates in domestic and foreign markets.
• BMW’s decision to manufacture hybrid cars can be interpreted to be a response to the changes within the sociocultural sector, i.e. greater public ecological sensibility.
• BMW’s and Audi’s general environment are quite similar as they both operate in the same market.

Q2. As discussed in the lecture, the government sector is of greater importance to entrepreneurs than to incumbent firms.

• True.
• False.

Q3.By choosing a certain market to operate in, firms are able to decide on…

• … their organizational domain.
• … their environmental field of action.
• … whether the government sector affects them or not.

Q4. There are two main reasons why organizations care about their environment. Access to information and money.

• True.
• False.

Q5. Which field exhibits high uncertainty?

• A
• B
• C
• D

Q6. Which of the following statements are true?

• The need for collaboration with other firms might emerge through resource scarcity.
• While subenvironments within the company may differ, the ones within departments remain the same.
• An increase in the environment’s complexity and rate of change implies a decrease in the number of positions and departments in firms.
• Centralization is a main characteristic of a mechanistic organization design. Mechanistic design of firms is typically found in stable environments.

Q7. All industries pass through various life cycle stages. Amongst others, these stages can be measured in terms of changes in demand growth. The early stage of an industry is characterized by a few firms starting operations increasing their market shares. After major players in the market establish themselves, an industry becomes mature. In this phase, it gradually slows its growth, but continues to improve its profitability. Eventually, an industry will begin to decline, i.e. lose markets, sales and profits.

• This is correct.
• This is incorrect.

Q8. The automotive industry can be considered a mature industry. Therefore,…

• … incumbent companies focus on generating cost advantages, e.g. by reducing unit costs through an increase in produced quantities.
• … the dominant technology changes frequently to adapt to environmental changes.
• … entry barriers are rather low which allows potential entrants to access the market quite easily.
• … a company’s potential to differentiate its product range is limited.

Q9. The successful game developing start-up IS.to is hiring new employees. What should the HR manager responsible for recruitment in this knowledge-intense setting consider?

• The applicant must possess a profund knowledge in his area of competence.
• The applicant should be willing to perform predefined tasks and not work autonomously.
• The manager should take care that the future employee has a high tolerance for setbacks, as tasks may require multiple attempts to complete.
• The manager should design the wage structure in a way that closely links rewards to efforts.
• The future employee should be highly extrinsically motivated, as it is easier for managers to motivate employees extrinsically rather than intrinsically.

Q10. If an emerging industry is successful, it can grow rapidly. Industries in the growth stage perform well and increase in sales and profits. Afterwards they will reach maturity. Mature industries tend to grow at a slower rate or not at all, while still providing stable profits. Eventually, a mature industry may become a declining industry if the basic product or service provided becomes obsolete.

• That’s correct.
• That’s incorrect.

Strategic Organization Design Week 04 Coursera Quiz Answers

Quiz 1: Corporate Office

Q1. A corporate office depends on operating units for decision-making and control, i.e. leadership.

• True.
• False.

Q2. The corporate office …

• … makes beneficial connections between business units.
• … combines different forms of expertise.
• … typically does not take care of activities such as audit and financial reporting, which are best carried out by operating units themselves.

Quiz 2: Decide on a Corporate Office

Q1. Typical activities of the corporate office include…

• … R&D.
• … hiring.
• … IT.
• … corporate planning.
• … taxation.

Q2. The corporate office is beneficial for firms…

• … that have a higher coordination need due to integrated businesses.
• … in which the bottom-level expertise is larger than the top-level expertise.
• … by providing leadership only via centralization.
• … in which the main power lies at the top of the organization.
• … with a related portfolio.

Q3. The __ firms move towards a related portfolio, the more likely that the corporate office uses a combination of direct strategic and operational control in addition to a financial control system.

• less
• more

Q4. The size of the corporate office

• … is often large in firms with great portfolio relatedness.
• … tends to grow if left unchecked.
• … reflects its quality.
• … is typically small in single business firms.

Q5. The presence of a corporate office fosters organizations’ speed and creativity in the value-creating process.

• True.
• False.

Q6. Consider obligatory activities regarding governance and regulations that all firms must care about, for example adhering to new banking regulations set by the central bank. According to the lecture, these should be carried out…

• … at company level.
• … by each unit.
• … by the head of each unit.
• … by the corporate office.

Q7. Forming alliances that benefit operating units is a way the corporate office can support good decision-making at a local level.

• True.
• False.

Q8. Typical activities that are managed by the corporate office…

• … ensure consistency within an umbrella brand.
• … public relations.
• … are shared across units.
• … involve capital.
• … involve career management of high performers.

Q9. The primary roles of the corporate office comprise

• … shared services.
• … unit performance improvement.
• … compliance.
• … maintenance.
• … resource planning.

Q10. If an activity is performed outside the operating unit affected, it is always centralized.

• True.
• False.

Strategic Organization Design Week 05 Coursera Quiz Answers

Quiz 1: The Organizational Life Cycle

Q1. The stages of industry and organizational life cycles …

• … always coincide.
• … do not necessarily coincide.

Q2. In its entrepreneurial stage, a company focuses on producing multiple products and services.

• True.
• False.

Quiz 2: Efficiency Considerations

Q1. A firm’s competitive approach needs to be supported by the organization design. Therefore, a low-cost leadership strategy should follow an efficiency approach, which is characterized by…

• … strong horizontal coordination.
• … empowered employees.
• … tight control.
• … valuing efficiency over flexibility.
• … decentralization.

Q2. Organizations in the collectivity life cycle stage are less likely to take risks than those in the entrepreneurial stage.

• False.
• True.

Q3. Amongst others, scale benefits can be achieved via grouping, as reflected in the use of functional organization structure.

• True.
• False.

Quiz 3: Flexibility Considerations

Q1. The importance of flexibility decreases as a firm grows as it focuses on efficiency evermore.

• True.
• False.

Q2. Efficiency costs comprise…

• … quicker response time.
• … lower overall scale due to larger grouping as a result of divisional structures.
• … an increase in structure complexity.

Quiz 4: Design for Growth

Q1. Companies go through various life cycle stages.

• The life cycle stages of companies and industries do not necessarily need to coincide.
• The firm enters into different life cycle stages as it grows and matures. This implies a continuous trade-off between flexibility and efficiency.
• Organizational goals remain the same throughout the firm’s life cycle stages.
• Organizational life cycle stages comprise introduction, growth, maturity, and decline.

Q2. Organizational goals typically..

• … change throughout an organization’s life cycle.
• … include continued growth in the entrepreneurial stage.
• … target establishing a complete organization within the elaboration stage.
• …focus on producing single products or services during the entrepreneurial stage.
• … target market expansion in the entrepreneurial stage.

Q3. Porter’s competitive strategies…

• … reflect how environments determine the attractiveness of strategies.
• … differ depending on the competitive scope of the environment.
• … differentiate amongst others between low cost and uniqueness.
• … comprise low-cost leadership, differentiation, focused low-cost leadership and focused differentiation.
• … consider different forms of competitive advantage that organizations have.

Q4. Low-cost leadership implies a firm competing by distinguishing products or services from competitors. This can be achieved e.g. through respective advertising, designing distinctive product features, offering exceptional service, or providing a new technology. Is this statement true?

• True.
• False.

Q5. When designing for efficiency, a company can choose specific design elements in order to support its respective strategy. These include:

• Decentralization, employee autonomy, a high degree of specialization, emphasis on efficient procurement and distribution systems.
• Employees frequently learning and experimenting, fluid and flexible organization, strong horizontal coordination.
• Empowered employees, direct contact between employees and customers, rewarding employees for creativity and risk taking.
• Strong, centralized authority, tight control, standard operating procedures, routine tasks, emphasis on efficient procurement and distribution systems.
• Focus on flexibility, delegation of tasks, empowered employees and little control.

Q6. DataGeek is a software company that has just entered the market. As it is situated in its entrepreneurial stage, it offers single software solutions which are inferior to those of the competing incumbents. What will DataGeek most likely do?

• It will pursue a low-cost leadership strategy in order to gain market share and achieve stability.
• In order to grow and innovate, it will take risks rather than focusing on stability.

Q7. Growth is important for organizations in order to …

• …reduce unit costs by increasing the total quantity produced, i.e. leveraging economies of scope.
• … gain steady profits on the basis of an established, well diffused technology.
• …be able to take on risk.
• …compete globally.

Q8. gaME is a game developing company which has grown significantly since it started its operations. As gaME competes in a very dynamic environment, its manager is thinking about changing certain design elements in order to enable a better and quicker response to changes and uncertainties. What should he do?

• Design a learning organization, as this reduces frequent reorganizing.
• Increase response times to make sure the decision made is carefully considered and approved by the highest level of management.
• Rely on empowered employees.
• Implement a more vertical structure in order to remain in charge of important decisions.
• Focus on adaptability.

Q9. In the elaboration phase…

• … managers prepare for the entrepreneurial phase.
• … organizations require revitalization.
• … bureaucracy has reached its limit.
• …a high degree of formal control is required.
• … a simplification of formal systems occurs.

Q10. In order to minimize frequent reorganizing, organizations today are increasingly being designed as learning organizations. This trend is especially common in …

• … dynamic environments, where adaptability is essential.
• … stable environments, where benefits to learning are high as they can be maintained over the course of time.

Strategic Organization Design Week 06 Coursera Quiz Answers

Quiz 1: Final Exam

Q1. Typical characteristics of an organization are…

• … a link to the external environment.
• … that all transaction costs occur within their boundaries.
• … a deliberately structured and coordinated activity.
• … identifiable boundaries.

Q2. Which answer is correct regarding organizational challenges?

• When providing information, managers must consider both extrinsic and intrinsic motivation of their employees.
• Task division refers the problem of managing different tasks in a specific order to reach a goal in due time.
• Classical organizational challenges are task division, task application, reward provision and information provision.
• Public awareness for ethics and social responsibility is a current challenge that many organizations face.

Q3. Organization design is important for an organization’s performance. Which of the following statements are correct?

• Among others, stakeholder include the government, suppliers, customers, and competitors.
• Effectiveness requires exact details about the required resources, whereas the goals and strategy do not require determination.
• Efficiency is an important consideration of organizations. It tells us how how much input organizations need to reach a given goal.
• Efficiency and Effectiveness are both important for a clear structure and increasing performance.

Q4. Which statement is correct concerning structural dimensions?

• Structural dimensions depend on the organization’s members and change when people leave.
• Structural dimensions include the following aspects: formalization, hierarchy, centralization, specialization, professionalism and personnel ratio.
• If there are many different levels in the organization chart, the organization has a low level of formalization.
• Structural dimensions characterize the whole organization, including the organizational setting.

Q5. Which of the following statements about coordination and cooperation are true?

• Mutual adjustment as coordination device describes the simplest form of coordination.
• The cooperation problem surrounds the problem of how to harmonize different activities of individuals and units.
• Performance incentives are cooperation devices reflecting high cost and control.
• Coordination and cooperation problems exist due to organizational structure.

Q6. How would the correct departmentalization look like, if it is divided by tasks?

• A
• B
• C
• B.
• C.
• A.

Q7. Which statement is true concerning interdependence?

• The sum of the value of executing two interdependent tasks separately is different than the value of doing both at once.
• Agent interdependence implies that the value of agent A’s actions is independent from agent B’s action and vice versa.
• By definition, task interdependence exists only between grouped tasks.

Q8. Which formula reflects complementarity between two tasks A and B?

• U(A+B) > U(A) + U(B)
• U(A+B) < U(A) + U(B)
• U(A+B) = U(A) + U(B)

Q9. Complexity….

• … and interdependence are synonyms.
• … exists because there are no limits to understanding, managing, and learning about interdependencies between multiple tasks.
• … exists when a system is made up of a large number of parts that interact in a non-simple way.
• … is not expressed in the development of weather on earth. This example is commonly used to describe a complicated phenomenon.

Q10. In this course, we learned about when tasks complement and substitute one another. The same logic can also be applied to products. Which of the following statements are correct?

• A garage is a complementary product to a car.
• The charger delivered together with your mobile device is a substitute to your phone.
• A chair and a table are complements.

Q11. What is true about division of labor (DOL)?

• Bounded rationality is the main reason for DOL.
• We connect customization with DOL.
• DOL restricts organizational differentiation.
• DOL creates complex interdependencies which lead to task uncertainty and, thus, slow down information processing. By creating these interdependencies between tasks and agents, DOL complicates integration.

Q12. Which statements are true about managing interdependencies?

• Modularity is a strategy for managing complexity in decomposable systems with few interdependencies. This is why clustering tasks plays an important role.
• Organizations can use modularity to minimize interdependencies surrounding tasks, individuals and products.
• An example for customization is when a factory worker is involved in the production of many chairs, but always focuses only on executing only a certain task, such as assembling the chair seat.
• Tasks can be clustered to reflect customization or specialization, which depends on the decomposability of task structure and/or products.

Q13. Which of the following statements is true?

• Goals are the main source of human behavior and always reflect an individual aim.
• Goals are typically horizontal in nature, i.e. compete with one another.
• Representations are mental models of courses of action formed by learning and adapted via experience. They are very important in order to describe individual behavior in organizations.
• Mary wants to write her doctoral thesis besides working in a regular job for a company. She is sure that earning some money will help ease her concern about financing her life and help her do well on her thesis. Working on the side however turns out to be very stressful. Mary has to invest time every evening and on the weekends in order to reach her goals. Her frustration rises, as she hardly has any times for her friends and family anymore. Mary hardly proceeds with her dissertation, as her motivation is very low.
• This situation portrays a typical problem of choice process – high correspondence between representations and reality.
• Organization design should keep individuals on the right track by influencing their goal frames, shaping representations and letting individuals decide alone what is the best for themselves.

Q14. Decentralization is typical if…

• … employees want to take more responsibility.
• … the organization provides services.
• … the company is represented in many different locations.
• … the environment is stable, which means that there is no pressure for fast decision making.

Q15. Which of the following sectors are part of the environment, that organizations interact directly with to achieve goals?

• The human resources sector.
• The infrastructure sector.
• The market sector.
• The industry sector.
• The raw materials sector.
• The government sector.
• The international sector.

Q16. Which statement is true about the organizational environment?

• Organizations can choose their environmental field of action, i.e. organization domain.
• It is very important for organizations, primarily as it provides information and representations.

Q17. Which statements are true concerning a simple and unstable environment?

• Zara, H&M, iTunes, Spotify find themselves in such environments.
• Complexity is high and environmental change is frequent.
• The Ludwig-Maximilians-University finds itself in such an environment.
• This environment is characterized by high-moderate uncertainty.

Q18. Characteristics of a mechanistic design are…

• … vertical communication.
• …adjustment of tasks via employee teamwork.
• …centralization of knowledge and control of tasks.
• …lower hierarchy of authority and control, few rules.

Q19. Which statements are correct concerning strategy and environment?

• If there is a high degree of uncertainty, the organization should reduce positions and departments, build relationships and enable a high-speed response.
• If the valued resources are very scarce, organizations should establish relationships and influence key sectors.
• Using advertising and public relations does not support the establishment of favorable relationships.
• Firms should acquire control over resources to minimize dependence.
• Contracts between producers of complementary goods are an example of a strategic partnership. These can also take the form of joint ventures.

Q20. Which statements are true concerning the importance of industry for an organization?

• … If an industry is very mature the entry barriers are very low, as an established infrastructure eases entry.
• Industry characteristics and maturity determine the nature of competition.
• The different industry life cycle stages are introduction, growth, maturity and stability.
• In industries with network effects, firms that compete may also cooperate.

Q21. Which of the following statements are correct about knowledge industries?

• Employees are intrinsically motivated and may know more than their managers.
• High- rather than low-powered incentives are a key design solution.
• Tasks typically require a high level of knowledge and few attempts to complete.
• Granting individuals autonomy may be useful both in dealing with expert and non-expert individuals.

Q22. DataCrave is a small, functionally organized software development company. It is active in just one line of business. Employees possess great expertise in their respective fields of competence. DataCrave’s management is considering to implement a corporate office, as it has heard about its many benefits. What would you advise?

• Implement a corporate office.
• Do not implement a corporate office.

Q23. Most conglomerates have a corporate office that is…

… small, focusing mostly on financial management as well as selecting leadership teams for each business unit.

• … small, focusing on human resource management and executive development.
• … large, focusing on financial management only.
• … large, focusing on internal audit and recognizing high performers within each business unit.
• … large, focusing on recognizing and supporting high performers in each business unit.

Q24. The corporate office increases business performance by performing activities that provide value to operating units by creating and sharing organizational capabilities.

• False.
• True.

Q25. The formalization stage describes the final stage within an organization’s life cycle.

• True.
• False.

Q26. Sony has entered the market for virtual reality and, therefore, constitutes a good example of an …

• … established company operating in an established industry.
• … established company operating in a young industry.

Q27. The cost advantage strategy is typically used by organizations …

• …by companies in life cycle stages characterized by growth.
• …in young industries.
• …by innovators, i.e. young firms.
• …in mature industries.

Q28. A firm’s focus on efficiency is influenced by its environment and the organizational life cycle stage it is currently in.

• True.
• False.

Q29. Firms in the formalization phase typically choose..

• … a differentiation strategy.
• … a low-cost strategy.

Q30. Functional structure is typically implemented in companies that are…

• …large with multiple sets of consumers.
• …offering fairly consistent product lines.
• …selling high-priced products and services.

Q31. For some organizations, scale can actually decrease organizational efficiency, as …

• …it may cause employees to work slower.
• … coordination costs increase.

Q32. The entrepreneurial stage is characterized by a …

• … horizontal structure.
• … vertical structure.

Q33. A product division structure makes sense for organizations with multiple product lines that have similar underying business models.

• True.
• False.

Q34. In the formalization stage …

• … middle management is concerned with operational tasks.
• … top management focuses on strategic issues and planning.
• … managers typically delegate tasks.

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