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

21.	The structure of a firm typically has almost no effect on its strategy.    FALSE The structure of an organization can also have an important influence on how it competes in the marketplace. It can also strongly influence the strategy, day-to-day operations, and performance of a firm.

AACSB: Analytic Blooms: Understand Learning Objective: 10-03 The implications of a firm's international operations for organizational structure. Level of Difficulty: 2 Medium Topic: Traditional Forms of Organizational Structure

22.

According to the text, boundaryless organizational structures are most effective when they replace rather than complement traditional organizational structures.    FALSE Boundaryless organizational designs need not replace the traditional forms of organizational structure, but they should complement them.

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

23.

Jack Welch, former CEO of GE, believes that all internal and external organizational boundaries should vanish completely.    FALSE Jack Welch, former CEO of GE, has suggested that boundaryless does not imply that all internal and external boundaries vanish completely, but that they become more open and permeable.

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

24.

Different types of boundaries place limits on organizations in order to foster high degrees of interaction with inside influences and varying levels of permeability.    FALSE There are primarily four types of boundaries that place limits on organizations. In the current dynamic business environment, different types of boundaries are needed to foster high degrees of interaction with outside influences and varying levels of permeability.

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

25.

In a barrier-free organization, differences in skills, authority, and talent disappear.    FALSE Just because work roles are no longer clearly defined, however, does not mean that differences in skills, authority, and talent disappear. A barrier-free organization enables a firm to bridge real differences in culture, function, and goals to find common ground that facilitates information sharing and other forms of cooperative behavior. Eliminating the multiple boundaries that stifle productivity and innovation can enhance the potential of the entire organization.

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

26.

An advantage of the barrier-free form of organizing is that internal cooperation and shared objectives are not required for it to work.    FALSE For barrier-free organizations to work effectively, the level of trust and shared interests among all parts of the organization must be raised. Barrier-free organizations also require a shift in the organization philosophy from executive to organizational development and from investments in high-potential individuals to investments in leveraging the talents of all individuals.

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

27.

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 administrative tasks previously performed by specialists.    TRUE Jeffrey Pfeffer, suggests that teams have three primary advantages. First, teams substitute peer-based control for hierarchical control of work activities. Second, teams frequently develop more creative solutions to problems because they encourage the sharing of the tacit knowledge held by individuals. Third, by substituting peer control for hierarchical control, teams permit the removal of layers of hierarchy and absorption of administrative tasks previously performed by specialists.

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

28.

According to the text, the factor that most distinguishes a superior team from a good team is talent.    FALSE Vision, talent, and motivation can carry a team only so far. Research has shown that super teams have higher levels of authenticity and caring, which allowed the full synergy of their individual talents, motivation, and vision.

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

29.

A barrier-free organization creates successful relationships between internal and external constituencies and sometimes with competitors as well.    TRUE Barrier-free organizations create successful relationships between both internal and external constituencies. There is one additional constituency, competitors, with whom some organizations have benefited as they developed cooperative relationships. For example, after struggling on their own to develop the technology, Ford, Renault-Nissan, and Daimler have agreed to cooperate with each other to develop zero emission, hydrogen fuel cell systems to power automobiles.

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

30.	Managers trained in rigid hierarchies do not find it difficult to transition to participative style required for effective teamwork.    FALSE Often, managers trained in rigid hierarchies find it difficult to make the transition to the more democratic, participative style that teamwork requires.

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

31.

Outsourcing in noncore functions of modular companies offers the advantage of decreased overall costs, but the company will be unable to focus on scarce resources in the areas where it holds competitive advantage.    FALSE In a modular company, outsourcing the noncore functions offers three advantages: A firm can decrease overall costs, stimulate new product development by hiring suppliers with superior talent to that of in-house personnel, avoid idle capacity, reduce inventories, and avoid being locked into a particular technology; It can focus scarce resources on the areas where it holds a competitive advantage. These benefits can translate into more funding for R and D hiring the best engineers, and providing continuous training for sales and service staff; it can tap into the knowledge and expertise of its specialized supply chain partners, adding critical skills and accelerating organizational learning.

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

32.

Because the modular form of organizing involves outsourcing vital functions, modular firms often forfeit full strategic control.    FALSE The modular organization outsources nonvital functions, tapping into the knowledge and expertise of best in class suppliers, but retains strategic control. Outsiders may be used to manufacture parts, handle logistics, or perform accounting activities.

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

33.	Modular companies can achieve rapid growth because they do not require large investments in fixed assets.    TRUE The modular type 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

34.

Outsourcing relieves companies of the requirement to maintain skill levels needed to manufacture essential components.    TRUE Too much outsourcing can result in a firm giving away too much skill and control. Outsourcing relieves companies of the requirement to maintain skill levels needed to manufacture essential components. They become more dependent upon their suppliers.

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

35.

One of the risks of outsourcing is a loss of cross-functional skills.    TRUE Cross-functional skills are acquired through the interaction of individuals in various departments within a company, which assists a department in solving problems. However, if a firm outsources key functional responsibilities, such as manufacturing, communication across departments can become more difficult. A firm and its employees must now integrate their activities with a new, outside 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

36.

The virtual type of organization is a network of independent companies linked together to share skills, costs, and access to the markets of each other.    TRUE 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

37.

The virtual organization is characterized by participating firms which pursue a collective strategy that enables them to cope with environmental uncertainty through cooperative efforts.    TRUE The virtual organization is characterized by participating firms that give up part of their control and accept interdependent destinies. Participating firms pursue a collective strategy that enables them to cope with uncertainty through cooperative efforts.

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

38.	Managing virtual structures requires new and difficult-to-acquire managerial skills.    TRUE One of the negatives associated with the virtual organization is that it requires new and difficult-to-acquire managerial skills.

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

39.

Horizontal organization structures facilitate resource sharing and help to create a sense of common purpose.    TRUE Horizontal organizational structures, which group similar or related business units under common management control, facilitate sharing resources and infrastructures to exploit synergies among operating units and help to create a sense of common purpose.

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

40.

One of the advantages of boundaryless structures is that they can be implemented without upgrading the skills of workers and managers.    FALSE As boundaryless structures are implemented, processes are reengineered, and organizations become increasingly dependent on sophisticated ITs, the skills of workers and managers alike must be upgraded to realize the full benefits.

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 41. Procter and Gamble used communities of practice and human resource practices to help it achieve effective collaboration and integration across its different business units. This effort resulted in the successful development of the Crest Whitestrips product and is an example of good use of boundary-constrained organizational design.    FALSE This is a good example of boundaryless organizational design in which effective collaboration and integration across the different business units of P and G resulted in the successful introduction of Crest Whitestrips. 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   42. 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.    TRUE Firms that achieve both adaptability and alignment are considered ambidextrous organizations, aligned and efficient in how they manage the business of today, but flexible enough to changes in the environment so that they will prosper tomorrow. AACSB: Analytic Blooms: Understand Learning Objective: 10-05 The need for creating ambidextrous organizational designs that enable firms to explore new opportunities and effectively integrate existing operations. Level of Difficulty: 2 Medium Topic: Creating Ambidextrous Organizational Designs