What type of organization is defined as a central hub surrounded by networks of outside suppliers and specialists?

71.

Which of the following is NOT a disadvantage of the barrier-free form of organization?    A.  Lack of strong leadership can lead to coordination problems. B.  Democratic process can be time-consuming and difficult to manage. C.  Additional integration issues result is a slower response to market changes. D.  If trust among employees is not sufficiently high, organizational performance may suffer. A barrier-free structure enables a quicker response to market changes through a single-goal focus, but lacks strong leadership and common vision, which can lead to coordination problems, is time-consuming, and has difficult-to-manage democratic processes, and sometimes lacks high levels of trust, which can impede performance.

AACSB: Analytic Blooms: Understand Learning Objective: 10-04 The different types of boundaryless organizations-barrier-free; modular; and virtual-and their relative advantages and disadvantages. Level of Difficulty: 2 Medium Topic: Boundaryless Organizational Designs

72.

What type of organization is defined as a central hub surrounded by networks of outside suppliers and specialists?    A.  matrix organization B.  virtual organization C.  modular organization D.  barrier-free organization The modular organization becomes a central hub surrounded by networks of outside suppliers and specialists and parts can be added or taken away. Both manufacturing and service units may be modular.

AACSB: Analytic Blooms: Understand Learning Objective: 10-04 The different types of boundaryless organizations-barrier-free; modular; and virtual-and their relative advantages and disadvantages. Level of Difficulty: 2 Medium Topic: Boundaryless Organizational Designs

73.

What is the name of the practice that many modular organization use to grow?    A.  operational effectiveness B.  outsourcing C.  strategic leveraging D.  strategic enabling The modular organization outsources nonvital functions, tapping into the knowledge and expertise of best in class suppliers, but retains strategic control.

AACSB: Analytic Blooms: Understand Learning Objective: 10-04 The different types of boundaryless organizations-barrier-free; modular; and virtual-and their relative advantages and disadvantages. Level of Difficulty: 2 Medium Topic: Boundaryless Organizational Designs

74.

What advantages does outsourcing not provide an organization?    A.  accessing best in class goods and services B.  enabling rapid expansion with relatively low capital investment C.  focusing scarce resources on core competencies D.  improved buyer positioning In a modular company, outsourcing the noncore functions offers several advantages. A firm can tap into the knowledge and expertise of best in class suppliers, can focus scarce resources on the areas where it holds a competitive advantage, and the modular structure enables a company to leverage relatively small amounts of capital and a small management team to achieve seemingly unattainable strategic objectives.

AACSB: Analytic Blooms: Understand Learning Objective: 10-04 The different types of boundaryless organizations-barrier-free; modular; and virtual-and their relative advantages and disadvantages. Level of Difficulty: 2 Medium Topic: Boundaryless Organizational Designs

75.

Which of the following is NOT a strategic risk of outsourcing?    A.  loss of critical skills B.  loss of cross-functional skills C.  loss of control over a supplier D.  loss of non-vital functions The main strategic concerns of outsourcing are (1) loss of critical skills or developing the wrong skills, (2) loss of cross-functional skills, and (3) loss of control over a supplier.

AACSB: Analytic Blooms: Understand Learning Objective: 10-04 The different types of boundaryless organizations-barrier-free; modular; and virtual-and their relative advantages and disadvantages. Level of Difficulty: 2 Medium Topic: Boundaryless Organizational Designs

76.

Nike is a company that makes use of the concept of product expatriates. Product expatriates are _____________.    A.  managers from the home country sent abroad to oversee the marketing of company products B.  managers from suppliers who come to work at the company headquarters C.  managers of the company sent abroad to work at the plants of its suppliers D.  local nationals hired by the company in the countries from which it sources products The outsourced products may give suppliers too much power over the manufacturer. Suppliers that are key to the success of the manufacturer can hold the manufacturer hostage. Nike manages this potential problem by sending full-time product expatriates to work at the plants of its suppliers.

AACSB: Analytic Blooms: Remember Learning Objective: 10-04 The different types of boundaryless organizations-barrier-free; modular; and virtual-and their relative advantages and disadvantages. Level of Difficulty: 1 Easy Topic: Boundaryless Organizational Designs

77.

The phrase that best defines a virtual organization is _____________.    A.  a dot-com company B.  a type of modular structure C.  an organization that uses information technology to integrate different functions D.  a continually evolving network of independent companies The virtual organization can be viewed as a continually evolving network of independent companies (suppliers, customers, even competitors) linked together to share skills, costs, and access to the markets of each other.

AACSB: Analytic Blooms: Remember Learning Objective: 10-04 The different types of boundaryless organizations-barrier-free; modular; and virtual-and their relative advantages and disadvantages. Level of Difficulty: 1 Easy Topic: Boundaryless Organizational Designs

78.

A virtual organization may be most appropriate for firms _____________.    A.  whose strategies require merging technologies B.  whose product life cycles are just beginning C.  who have no need to get to market quickly with new offers D.  who have no need to meet competitive pressures This new structure may be appropriate for firms whose strategies require merging technologies (e.g., computing and communication) or for firms exploiting shrinking product life cycles that require simultaneous entry into multiple geographical markets. It may be effective for firms that desire to be quick to the market with a new product or service.

AACSB: Analytic Blooms: Understand Learning Objective: 10-04 The different types of boundaryless organizations-barrier-free; modular; and virtual-and their relative advantages and disadvantages. Level of Difficulty: 2 Medium Topic: Boundaryless Organizational Designs

79.

Virtual organizations ______________ whereas modular organizations _____________.    A.  are usually permanent; are usually temporary B.  accept interdependent destinies; pursue collective strategies C.  pursue collective strategies; forfeit strategic control D.  give up part of their strategic control; retain full strategic control Unlike the modular type, in which the local firm maintains full strategic control, the virtual organization is characterized by participating firms that give up part of their control and accept interdependent destinies.

AACSB: Analytic Blooms: Understand Learning Objective: 10-04 The different types of boundaryless organizations-barrier-free; modular; and virtual-and their relative advantages and disadvantages. Level of Difficulty: 2 Medium Topic: Boundaryless Organizational Designs

80.

Which of the following is not a disadvantage of virtual structures?    A.  difficulty in individual and organizational knowledge sharing B.  potential loss of operational control among partners C.  loss of strategic control over emerging technology D.  difficulty in determining where one company ends and another begins due to close interdependencies Virtual structures encourage individual and organizational knowledge sharing but make it harder to determine where one company ends and another begins, due to close interdependencies among players. Also, they may lead to potential loss of operational control among partners, or result in the loss of strategic control over emerging technology.

AACSB: Analytic Blooms: Understand Learning Objective: 10-04 The different types of boundaryless organizations-barrier-free; modular; and virtual-and their relative advantages and disadvantages. Level of Difficulty: 2 Medium Topic: Boundaryless Organizational Designs