CHAPTER 22 1) A division of a firm is a) a logical sub-organization of the firm b) a level within the firm in which a large degree of autonomy is vested c) a level of hierarchy within a firm that def ...

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CHAPTER 22
1)
A division of a firm is
a)
a logical sub-organization of the firm
b)
a level within the firm in which a large degree of autonomy is vested
c)
a level of hierarchy within a firm that defines the scope of a manager
d)
all of the above
ANS: A
2) An example of organizational architecture based on the different functions of a firm
is when divisions are defined as
a)
R&D, Engineering, Production, Marketing, Sales
b)
Component 1 Plant, Component 2 Plant, Component 3 Plant, Final Assembly
c)
Store 1, Store 2, Store 3, Region A, Region B, Sales Division
d)
Business Customers, Educational Customers, Household Customers
ANS: A
3)
An example of organizational architecture based on production of intermediate
products is when divisions are defined as
a)
R&D, Engineering, Production, Marketing, Sales
b)
Component 1 Plant, Component 2 Plant, Component 3 Plant, Final Assembly
c)
Store 1, Store 2, Store 3, Region A, Region B, Sales Division
d)
Business Customers, Educational Customers, Household Customers
ANS: B
4) An example of organizational architecture based on customer location is when
divisions are defined as
a)
R&D, Engineering, Production, Marketing, Sales
b)
Component 1 Plant, Component 2 Plant, Component 3 Plant, Final Assembly
c)
Store 1, Store 2, Store 3, Region A, Region B, Sales Division
d)
Business Customers, Educational Customers, Household Customers
ANS: C
5) An example of organizational architecture based on customer type is when divisions
are defined as
a)
R&D, Engineering, Production, Marketing, Sales
b)
Component 1 Plant, Component 2 Plant, Component 3 Plant, Final Assembly
c)
Store 1, Store 2, Store 3, Region A, Region B, Sales Division
d)
Business Customers, Educational Customers, Household Customers
ANS: D
6)
A profit center is
a)
evaluated based on minimizing costs within the division
b)
evaluated based on maximizing costs within the division
c)
evaluated based on minimizing profits generated by the division
d)
evaluated based on maximizing profits generated by the division
ANS: D
7)
Managers of profit centers earn more when their divisions
a)
increase their sales and decrease their costs

b)
decrease their sales and increase their costs
c)
increase the costs of the components for which they are responsible
d)
none
ANS: A
8)
A cost center is
a)
evaluated based on minimizing costs within the division
b)
evaluated based on maximizing costs within the division
c)
evaluated based on minimizing profits generated by the division
d)
evaluated based on maximizing profits generated by the division
ANS: A
9)
Managers of profit centers earn more when their divisions
a)
increase their sales and increase their costs
b)
decrease their sales and increase their costs
c)
decrease the costs of the components for which they are responsible
d)
increase the costs of the components for which they are responsible
ANS: C
10)
Conflicts can arise between divisions because
a)
some activities across divisions benefit from coordination
b) manag