MGM101 Fall 2012 Section 201

Test #3 Short Answer Questions Version B

1. Describe how work is organized in firms utilizing a functional organizational structure.
List and describe two advantages and two disadvantages of a functional organizational
structure. (5 Marks)
One mark for proper description of how work is organized, 1 mark for each appropriate
advantage and disadvantage of this structure provided:
Work organized by grouping together people with similar skills and who perform similar tasks
such as the finance department
Advantages - economies of scale, efficient use of resources, tasks assigned consistent with
expertise, high-quality technical problem solving, in-depth training and skill development within
function, clear career paths
Disadvantage - difficulties pinpointing responsibility for broader cross-functional issues,
functional chimneys restrict communication and coordination across functions, lack of sense of
common purpose within organization, can slow decision making and harm performance
2. There are many theories that attempt to explain effective leadership, each providing us
with a different perspective about the nature of leadership. The Competency Perspective
suggests that there are certain competencies are associated with effective leaders. Based
on your readings, what does effective leadership mean? Describe how Power Motivation
and Emotional Intelligence help individuals become effective leaders. Explain one of the
major limitations of The Competency perspective. (4 Marks)
One mark for proper description of effective leadership, one mark for each proper description of
how Power Motivation and Emotional Intelligence can make a leader effective, one mark for
proper explanation of Competency limitation.
Effective Leadership The ability to get high performance from his or her subordinates
Power Motivation The unconscious drive to acquire status and power and to have an impact on
others, want to gain power so that they can influence others to get things done
Emotional Intelligence The ability to monitor ones own and others feelings and emotions, to
discriminate among them, and to use this information to guide ones thinking and actions, they
are more effective because they elicit trust and confidence, earn respect and gain cooperation,
better able to deal with ambiguity, foster loyalty
Limitations Not all traits are equally as important, not all great leaders demonstrate all traits,
and importance of traits is context dependent

3. The strategic model suggests that managements goal should be to align three strategic
objectives (What we need to do, what can we do, what do we want to do?) to reduce
strategic tensions. Describe what is meant by any two of these strategic objectives and
why they may cause strategic tensions. (3 Marks)
One mark for each proper description of strategic objective and one mark for accurate
description of source of tension.
A -What we need to do? Focuses on an external evaluation that identifies opportunities and
threats in the competitive environment. Help organizations establish strategic direction for
growth and path for future success.
B - What can we do? Focuses on an internal evaluation of the organizations capabilities.
Allows managers to leverage organizations strengths and address weaknesses
C - What do we want to do? Focuses on managements intentions, preferences and desires.
Organizations cannot do everything so management must establish their priorities to focus their
attention.
Some examples of tensions include:
A/B tension Organizations may not have the capability to take advantage of opportunities
available in the marketplace (no money to fund growth in emerging market), there may be
limited opportunities in the market to leverage the organizations strengths, emerging market
threats may threaten an organizations strengths (exporter to US facing appreciating dollar
value).
B/C Organization may not be capable of achieving managements objectives (management
wants to substantially increase sales but current resources are already stretched), Management
may not establish objectives that utilize organizations capabilities (significant cash reserves are
not utilized because management is conservative in their planning for expansion).
A/C Many opportunities may be available but management does not exploit them (European
market growth opportunity not pursued because management focus is on South American
expansion), management may avoid riskier, but potentially more lucrative, opportunities
(management may be risk averse to protect their jobs) or may take unnecessary risks with there is
low likelihood of success.
4. We discussed the article Cultural quotient test tells much about individual in class.
Explain the purpose of conducting a cultural quotient evaluation and provide two reasons
why this is important for Canadian managers. (3 marks)
One mark for proper description of purpose of CQ evaluation, and one mark for each proper
explanation of its importance.
Cultural Quotient evaluates an individuals willingness, capacity and strategy to understand
others cultural attributes.
It is important to Canadian managers because bridges communication and collaboration gaps,
diversity in the Canadian workplace is increasing, 250,000 new immigrants enter Canada each
year, other cultures have values and beliefs that may affect how employees may behave or react
in situations, lack of understanding could lead to turnover