Multidivisional Structure in Corporations
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Questions and Answers

What type of organizational structure did U.S. companies such as DuPont and General Motors move from in the early 20th century?

  • Hierarchical structure
  • Matrix structure
  • Multidivisional structure
  • Functional structure (correct)

    • Why does Apple commit to a functional organization?

  • To increase organizational complexity
  • To facilitate rapid decision-making
  • To create products that enrich people's daily lives (correct)
  • To encourage competition among teams

    • How does the text describe Apple’s organizational structure?

  • Static and unchanging
  • Multidivisional and rigid
  • Hierarchical and stagnant
  • Functional and ever-evolving (correct)

    • What has influenced Apple's organizational structure to change over time?

    <p>Increased importance of artificial intelligence</p> Signup and view all the answers

    In what way does Apple demonstrate that the functional structure may benefit companies facing technological change and industry upheaval?

    <p>By continually innovating within product categories</p> Signup and view all the answers

    What is one of the key purposes of Apple's commitment to a functional organization?

    <p>Creating products that improve daily lives</p> Signup and view all the answers

    What is one of the key reasons companies often cling to having general managers in charge of business units, according to the passage?

    <p>Making the change to a functional organization is difficult and challenging</p> Signup and view all the answers

    According to the passage, what is one of the key benefits of Apple's functional organization structure?

    <p>It aligns decision rights with expertise within the organization</p> Signup and view all the answers

    What is one of the potential 'intermediate steps' the passage suggests companies could take to cultivate the 'experts-leading-experts' model?

    <p>When filling senior management roles, prioritize deep expertise over general management skills</p> Signup and view all the answers

    What does the passage suggest is a key challenge or 'external challenge' that companies face when considering a transition to a functional organization?

    <p>The daunting nature of the organizational change itself</p> Signup and view all the answers

    What does the passage suggest is a key aspect of Apple's functional organization that enables it to continue innovating and prospering?

    <p>The alignment of decision rights with the expertise of its employees</p> Signup and view all the answers

    What does the passage suggest is a key reason why companies may be hesitant to transition to a functional organization like Apple's?

    <p>Difficulty in transitioning an individual-oriented incentive system to a more collaborative one</p> Signup and view all the answers

    What is the key benefit of organizing experts in a functional structure, as described in the text?

    <p>It allows for deeper specialization and collaboration among experts.</p> Signup and view all the answers

    What is the potential downside of organizing experts across business units rather than in a functional structure?

    <p>It would dilute their collective expertise and reduce their ability to solve problems.</p> Signup and view all the answers

    What principle does the text describe as essential for 'speedy and effective cross-functional decision-making at the highest levels'?

    <p>Leaders should have detailed knowledge of the work being done three levels down in their organization.</p> Signup and view all the answers

    What is a potential consequence of managers attending decision-making meetings without the necessary details?

    <p>The decision must be made without the details.</p> Signup and view all the answers

    What example does the text provide to illustrate Apple's attention to detail in product design?

    <p>The exact shape of product corners.</p> Signup and view all the answers

    What does the text suggest about the level of detail that Apple's senior leaders expect from their teams compared to other organizations?

    <p>Apple's senior leaders are more likely to drill down into details than leaders in many other companies.</p> Signup and view all the answers

    What structural change did Jobs implement in Apple upon his return as CEO?

    <p>Transition from a multidivisional to a functional structure</p> Signup and view all the answers

    What distinguishes Apple's organizational chart design from conventional companies?

    <p>Senior vice presidents control product development and sales processes</p> Signup and view all the answers

    In what way does Apple's current structure differ from what is typically advised for large, complex companies?

    <p>Operating with no conventional general managers</p> Signup and view all the answers

    What organizational challenge do entrepreneurial firms face as they grow, according to business history and theory?

    <p>Shifting from a multidivisional to a functional structure</p> Signup and view all the answers

    Why is Apple's retention of its functional structure considered remarkable according to the text?

    <p>It goes against the trend of companies transitioning to multidivisional structures</p> Signup and view all the answers

    What is one of the challenges companies face when attempting to transition to a functional organization like Apple's?

    <p>Reallocation of power among managers</p> Signup and view all the answers

    Why does the passage mention that Apple's functional organization is rare among very large companies?

    <p>Loss of alignment of decision rights with expertise</p> Signup and view all the answers

    What is one of the vital elements that might be lost when large companies shift to business units instead of a functional organization?

    <p>Expertise leading decision-making</p> Signup and view all the answers

    According to the passage, why do companies often resist transitioning to a functional organization like Apple's?

    <p>Complexity of making the change</p> Signup and view all the answers

    What does the passage suggest might be a consequence of not aligning decision rights with expertise in large companies?

    <p>Loss of alignment in decision-making</p> Signup and view all the answers

    What was one of the key issues associated with Apple's conventional structure when Steve Jobs returned in 1997?

    <p>The organizational design stifled innovation and led to internal conflicts.</p> Signup and view all the answers

    In what way did Apple's decentralized business units contribute to internal conflicts, according to the text?

    <p>There were frequent disputes over transfer prices among managers.</p> Signup and view all the answers

    What role did organizational design play in Apple's innovation success, as highlighted in the text?

    <p>It enabled a functional organization approach with a unique leadership model.</p> Signup and view all the answers

    How did Apple's organizational structure change under Steve Jobs' leadership compared to the initial conventional setup in 1997?

    <p>It moved from a decentralized structure to a more centralized approach.</p> Signup and view all the answers

    What was the fundamental reason behind Steve Jobs' decision to redefine Apple's organizational structure upon his return in 1997?

    <p>To address the stifling effect of conventional management on innovation.</p> Signup and view all the answers

    What is a key advantage of Apple's functional organization structure in fostering innovation?

    <p>It enables experts from different functional areas to collaborate seamlessly on developing new products and technologies.</p> Signup and view all the answers

    According to the passage, what is a potential challenge associated with Apple's functional organization?

    <p>Potential for decision-making to become slow and inefficient due to the need for cross-functional coordination.</p> Signup and view all the answers

    According to the passage, what is a key factor that has influenced the evolution of Apple's organizational structure over time?

    <p>The increasing importance of emerging technologies such as artificial intelligence.</p> Signup and view all the answers

    Based on the information provided, which of the following statements best describes the rationale behind Apple's functional organization?

    <p>It allows Apple to focus on creating innovative products that enrich people's daily lives by leveraging cross-functional expertise.</p> Signup and view all the answers

    According to the passage, which of the following statements best describes the transition from functional to multidivisional structures in the early 20th century?

    <p>It was a response to the increasing complexity of managing large corporations with diverse product lines.</p> Signup and view all the answers

    According to the passage, what is the key benefit of Apple's functional organizational structure in enabling innovation?

    <p>It aligns expertise and decision rights within the organization.</p> Signup and view all the answers

    What does the passage suggest is a potential downside of companies organizing experts across different business units rather than in a functional structure?

    <p>It can make it more difficult to make quick, cross-functional decisions.</p> Signup and view all the answers

    What does the passage imply is a key reason why companies may be hesitant to transition to a functional organization like Apple's?

    <p>It can reduce the ability of general managers to meet numerical targets and be held accountable.</p> Signup and view all the answers

    What does the passage suggest is a key aspect of Apple's functional organization that enables it to continue innovating and prospering?

    <p>Its commitment to aligning decision-making authority with deep subject matter expertise.</p> Signup and view all the answers

    What does the passage suggest is a key challenge or 'external challenge' that companies face when considering a transition to a functional organization?

    <p>Resistance from shareholders and investors to the potential increase in costs.</p> Signup and view all the answers

    According to the passage, what is the primary reason for Apple's emphasis on having managers with deep expertise in their respective functions?

    <p>To ensure that decisions are made collaboratively by the most qualified individuals</p> Signup and view all the answers

    Which of the following statements best describes Apple's approach to leadership and management?

    <p>Managers with deep expertise lead teams of specialists within their respective functions</p> Signup and view all the answers

    Based on the information provided, what can be inferred about the potential drawbacks of Apple's functional organization structure?

    <p>It may lead to a lack of cross-functional coordination and siloed decision-making</p> Signup and view all the answers

    According to the passage, what is one of the key reasons why Apple believes its functional organization structure is effective?

    <p>It attracts and retains top talent who seek to work with and learn from other experts in their field</p> Signup and view all the answers

    Based on the information provided, which of the following statements is true regarding Apple's approach to innovation and continuous improvement?

    <p>Apple's functional structure enables experts to collaborate and debate during decision-making processes</p> Signup and view all the answers

    According to the passage, what is the key benefit of Apple's functional organization structure where experts lead experts?

    <p>It allows for deeper specialization and expertise development among employees</p> Signup and view all the answers

    What principle does the text describe as essential for 'speedy and effective cross-functional decision-making at the highest levels' in Apple's organization?

    <p>Leaders should know the details of their organization three levels down</p> Signup and view all the answers

    What is a potential consequence of managers attending decision-making meetings without the necessary details, as described in the passage?

    <p>The decision will be made without the full context and information</p> Signup and view all the answers

    According to the passage, what is one of the key reasons companies often cling to having general managers in charge of business units rather than adopting a functional organization like Apple's?

    <p>General managers are more familiar and comfortable with traditional organizational structures</p> Signup and view all the answers

    What does the passage suggest might be a consequence of not aligning decision rights with expertise in large companies?

    <p>It can lead to slower and less effective cross-functional decision-making</p> Signup and view all the answers

    What is one of the key purposes of Apple's commitment to a functional organization, as described in the text?

    <p>To retain and develop deep technical expertise within the organization</p> Signup and view all the answers

    What does the passage suggest is a key challenge or 'external challenge' that companies face when considering a transition to a functional organization like Apple's?

    <p>Concerns about the loss of customer-centricity and responsiveness</p> Signup and view all the answers

    What is one of the vital elements that might be lost when large companies shift to business units instead of a functional organization, as implied by the passage?

    <p>The opportunity for employees to develop deep technical expertise</p> Signup and view all the answers

    What does the passage suggest is a key aspect of Apple's functional organization that enables it to continue innovating and prospering?

    <p>Its commitment to developing deep technical expertise within teams</p> Signup and view all the answers

    According to the passage, what is a key reason why companies may be hesitant to transition to a functional organization like Apple's?

    <p>They are concerned about the potential for internal conflicts and lack of coordination across different functions.</p> Signup and view all the answers

    What is a key advantage of Apple's functional organization structure in fostering innovation, as described in the passage?

    <p>It empowers functional experts to make decisions within their areas of expertise.</p> Signup and view all the answers

    What does the passage suggest is a potential downside of organizing experts across business units rather than in a functional structure?

    <p>It can result in a loss of specialized expertise and depth of knowledge within each function.</p> Signup and view all the answers

    What does the passage suggest might be a consequence of not aligning decision rights with expertise in large companies?

    <p>It can lead to slower and less effective decision-making.</p> Signup and view all the answers

    What is the key benefit of Apple's functional organization structure in enabling innovation, as described in the passage?

    <p>It empowers functional experts to make decisions within their areas of expertise.</p> Signup and view all the answers

    What is the primary reason Apple has maintained its functional organizational structure, even as the company has grown significantly in size and complexity?

    <p>To promote a culture of continuous innovation and adaptability to technological changes</p> Signup and view all the answers

    What is a key challenge or 'external challenge' that companies face when considering a transition to a functional organization like Apple's?

    <p>Convincing business unit leaders to relinquish control and accountability over their P&amp;L statements</p> Signup and view all the answers

    What is one of the key benefits of Apple's functional organizational structure in enabling innovation, as described in the text?

    <p>It empowers functional experts to lead their respective areas without the constraints of traditional general managers</p> Signup and view all the answers

    What does the passage suggest is a potential downside of companies organizing experts across different business units rather than in a functional structure?

    <p>It can result in a loss of the vital elements that enable innovation and continuous improvement</p> Signup and view all the answers

    What is a key aspect of Apple's functional organization that the passage suggests enables the company to continue innovating and prospering?

    <p>The alignment of decision-making authority with the appropriate functional expertise</p> Signup and view all the answers

    What is a potential drawback of organizing experts across business units rather than in a functional structure, as implied by the passage?

    <p>It hinders the alignment of decision rights with expertise.</p> Signup and view all the answers

    According to the passage, what is one of the key factors that enables Apple to continue innovating and prospering through its functional organization?

    <p>Allowing leaders with deep expertise to take on new responsibilities.</p> Signup and view all the answers

    What is a potential challenge companies face when attempting to transition to a functional organization like Apple's, as suggested by the passage?

    <p>Reallocating power among managers and changing incentive systems.</p> Signup and view all the answers

    What is the primary difference between Apple's management model and typical companies?

    <p>Apple's managers are experts leading experts.</p> Signup and view all the answers

    Which of the following statements best describes the rationale behind Apple's functional organization, as implied by the passage?

    <p>It aligns decision-making authority with relevant expertise.</p> Signup and view all the answers

    Why does Apple believe in having experts lead experts?

    <p>World-class talent prefers to work with others in their specialty.</p> Signup and view all the answers

    What does the text suggest is a core principle of Apple's functional organization?

    <p>Experts in each area manage their respective specialties.</p> Signup and view all the answers

    Based on the information provided, what can be inferred about the potential drawbacks of Apple's functional organization structure?

    <p>It may create challenges in reallocating power among managers.</p> Signup and view all the answers

    How does Apple's approach to management differ from the conventional model?

    <p>Experts lead in their specialized areas.</p> Signup and view all the answers

    What is the key factor influencing decision-making in Apple's functional organization?

    <p>'Experts leading experts' model.</p> Signup and view all the answers

    What is a key advantage of Apple's functional organization structure in fostering innovation, as described in the passage?

    <p>It allows for greater specialization and deep expertise in specific functions.</p> Signup and view all the answers

    According to the passage, what is one of the key reasons companies often cling to having general managers in charge of business units, rather than adopting a functional organization like Apple's?

    <p>There is a fear of losing control and decision-making authority over specific product lines.</p> Signup and view all the answers

    What principle does the text describe as essential for 'speedy and effective cross-functional decision-making at the highest levels' in Apple's organization?

    <p>Aligning decision rights with deep functional expertise across the organization.</p> Signup and view all the answers

    According to the passage, what is a potential consequence of managers attending decision-making meetings without the necessary details and expertise?

    <p>It might result in suboptimal decisions and hinder the company's ability to innovate.</p> Signup and view all the answers

    Based on the information provided, what can be inferred about the potential drawbacks of Apple's functional organization structure?

    <p>It could make it challenging to align decision rights with the appropriate expertise.</p> Signup and view all the answers

    According to the passage, what is a key reason why Apple's functional organization structure fosters innovation?

    <p>It allows for deep expertise to be aligned with decision-making authority.</p> Signup and view all the answers

    What is a potential drawback of Apple's functional organization structure mentioned in the passage?

    <p>It risks having managers attend meetings without the necessary expertise.</p> Signup and view all the answers

    According to the passage, what organizational structure did Apple transition away from under Steve Jobs' leadership?

    <p>A decentralized business unit structure.</p> Signup and view all the answers

    What does the passage suggest is a key challenge companies face when considering a transition to a functional organization like Apple's?

    <p>Overcoming resistance from general managers who fear losing authority.</p> Signup and view all the answers

    According to the passage, what was one of the key issues associated with Apple's conventional structure before Steve Jobs' return in 1997?

    <p>Conflicts between functional experts and general managers.</p> Signup and view all the answers

    What principle does Apple prioritize that contributes to speedy cross-functional decision-making at the highest levels?

    <p>Leaders knowing details three levels down</p> Signup and view all the answers

    Why does the text imply that organizing experts across business units might dilute collective expertise?

    <p>It prevents problem-solving collaboration</p> Signup and view all the answers

    What is one reason why immersion in details is highlighted as a key principle at Apple?

    <p>To support cross-functional decision-making</p> Signup and view all the answers

    How can Apple's organization structure be described in terms of leadership within specialized areas?

    <p>Specialists leading non-specialists</p> Signup and view all the answers

    Why do Apple's senior leaders pay extreme attention to product design details like rounded corners?

    <p>To showcase market differentiation</p> Signup and view all the answers

    What is a potential consequence of managers attending decision-making meetings without necessary details?

    <p>Postponement of decisions</p> Signup and view all the answers

    In what way does Apple's functional organization foster innovation according to the text?

    <p>By maximizing problem-solving capabilities</p> Signup and view all the answers

    What is one key aspect of Apple's organizational structure that enables it to continue prospering and innovating?

    <p>Specialists leading specialists</p> Signup and view all the answers

    What challenge do companies face when considering a transition to a functional organization like Apple's?

    <p>Resistance to change culture</p> Signup and view all the answers

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