1. Real options analysis is most appropriate when
the total investment required is small, but the environment is uncertain.
the investment required can be justified by Discounted Cash Flow (DCF) techniques.
a small investment up front can be followed by a series of subsequent investments.
there is no prospect
2. Complete the following sentence: “Virtual organizations __________ whereas modular organizations __________.”
are usually permanent; are usually temporary
accept interdependent destinies; pursue collective strategies
pursue collective strategies; forfeit strategic control
give up part of their strategic control; retain full strategic control
3. The phrase that best defines a virtual organization is
a dot.com company.
a type of modular structure.
an organization that uses information technology to integrate different functions.
a continually evolving network of independent companies.
4. Effective ambidextrous organizations have alignment, which means that
employees are rewarded according to both profit and sales growth.
managers are focused on growth opportunities.
there is a clear sense of how value is being created in the short-term and how activities are properly integrated and coordinated.
divisional-level goals are consistent with overall corporate goals.
5. Important advantages of a holding company structure include
savings in personnel and overhead expenses associated with a small corporate office.
a high level of awareness at the corporate office of issues facing individual divisions.
a high level of control of division executives by executives at the corporate level.
gaining synergistic benefits across businesses.
6. An organization such as ConAgra that has dozens of different divisions with similar products will probably have the greatest success with which form of organization structure?
Strategic business unit structure
Holding company structure
7. What is the name of the practice that many modular organizations use to grow?
8. Which of the following statements would least likely be found in a corporate credo?
Maximize financial benefits for stakeholders.
Provide secure and stable employment for employees.
Establish an environment that enhances professional growth.
Support community organizations and projects.
9. Leaders play a key role in developing and sustaining an organization’s
rules and regulations.
10. The “bottom-up” perspective of empowerment
clarifies the organization’s values and mission.
builds teams to encourage cooperative behavior.
communicates specific plans.
encourages employees to “ask permission rather than forgiveness.”
11. Which of the following is not a characteristic of a successful learning organization?
They create a proactive, creative approach to the unknown.
They actively solicit the involvement of employees at all levels.
They regularly engage in activities to reinforce the status quo.
They enable everyone to use their intelligence and apply their imagination.
12. Coercive power is
the power exercised by use of fear of punishment for errors of omission or commission by employees.
the power of persuasion exercised by a charismatic leader to get compliance from reluctant subordinates.
is the type that arises from a manager’s access, control, and distribution of information that is not freely available to everyone in an organization.
the ability of the leader or manager to confer rewards for positive behaviors or outcomes.
13. 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?
all of these
14. Expert power
is derived from organizationally conferred decision-making authority.
arises from a manager’s access, control, and distribution of information that is not freely available to everyone in an organization.
is derived from referent power.
is derived from the leader’s capability and knowledge in a particular field.
15. Strategic reasons for undertaking a corporate venture include which of the following?
entering into new markets
expanding capabilities by acquiring new knowledge
building the corporation’s base of resources
all of these
16. Product champions
are typically senior executives.
are usually inventors of some sort.
scavenge for resources and encourage others to back promising new ideas.
are strong supporters of the status quo.
17. The innovation dilemma known as seeds versus weeds refers to
choosing to pursue radical rather than incremental innovations.
choosing to pursue product rather than process innovations.
promoting organizational stars onto innovation teams rather than involving all employees in innovation efforts.
none of these.
18. __________ 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.
Technological breakthroughs; product-market breakthroughs
New technologies; new paradigms
Incremental innovations; radical innovations
Radical innovations; incremental innovations
19. Which kind of risk taking requires that a company borrow heavily or commit a large portion of its resources in order to grow?
business risk taking
financial risk taking
personal risk taking
technological risk taking
20. A simple structure is characterized by
high specialization and low centralization.
low specialization and high centralization.
low formality and low creativity.
high formality and low centralization.