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Questions and Answers
What is the term used to describe the unproductive use of functional resources by divisional managers?
What is the primary role of an intrapreneur manager?
What is the term used to describe a collection of employees linked by technology who rarely meet face-to-face?
What is the term used to describe the process of establishing a fair price for a resource or skill developed in one division that is to be transferred to another division?
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What is the primary purpose of a knowledge management system?
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What is the term used to describe a cluster of different companies whose actions are coordinated by contracts and outsourcing agreements?
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What type of organization connects employees through laptops, smartphones, and global video teleconferencing?
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What is the primary function of a knowledge management system?
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What is the primary characteristic of a self-contained division?
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What is the main goal of a Business-to-Business (B2B) Marketplace?
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What is the primary role of a corporate headquarters staff?
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What is the main advantage of a multidivisional structure?
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Study Notes
Organizational Structures
- Virtual organization: a collection of employees linked by laptops, smartphones, and global video teleconferencing who may rarely meet face-to-face, but who join and leave project teams as their skills are needed.
- Multidivisional structure: a complex organizational design that allows a company to grow and diversify while reducing coordination and control problems, using self-contained divisions and a separate corporate headquarters staff.
Self-Contained Divisions
- Defined as an independent business unit or division that contains all the value chain functions it needs to pursue its business model successfully.
- Treated as a separate financial unit, with financial controls used to establish performance goals and measure profitability (profit center).
Corporate Headquarters Staff
- A team of top executives, as well as their support staff, responsible for overseeing a company's long-term multi-business model and providing guidance to increase the value created by the company's self-contained divisions.
Challenges in Organizational Structures
- Organizational slack: the unproductive use of functional resources by divisional managers that can go undetected unless corporate managers monitor their activities.
- Information distortion: the manipulation of facts supplied to corporate managers to hide declining divisional performance.
- Transfer pricing: the problem of establishing the fair or "competitive" price of a resource or skill developed in one division that is to be transferred and sold to another division.
Integration and Innovation
- Integrating roles: managers who work in full-time positions established specifically to improve communication between divisions.
- Intrapreneurs: managers who pioneer and lead new venture projects or divisions, and act as inside or internal entrepreneurs.
- New-venture division: a separate and independent division established to give its managers the autonomy to develop a new product.
Knowledge Management and Networking
- Knowledge management system: a company-specific information system that systematizes the knowledge of all its employees and provides access to employees who have the expertise needed to solve problems as they arise.
- Business-to-business (B2B) Marketplace: an industry-specific trading network established to connect buyers and sellers through the Internet to lower costs.
- Network structure: a cluster of different companies whose actions are coordinated by contracts and outsourcing agreements rather than by a formal hierarchy of authority.
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Description
This quiz covers key concepts in business management, including virtual organization, knowledge management systems, and business-to-business marketplaces. Test your understanding of these important business principles.