Allied Tech Is a Multidomestic Company That Is Undergoing Organizational

question 13

Multiple Choice

Allied Tech is a multidomestic company that is undergoing organizational restructuring. Matt, the chief executive officer, meets with the heads of all the departments to decide the type of structure that would be most suitable for the firm. The heads agree that the firm would benefit from a divisional structure. However, Matt is not convinced with the idea. Which of the following statements justifies Matt's viewpoint in this scenario?

• A) Organizations with a divisional structure often struggle to respond to market needs and opportunities, especially if these affect more than one functional unit simultaneously.
• B) If the company adopts a divisional structure, it will not be able to organize units by the geographic location in which it serves.
• C) A divisional structure will lead to inefficient knowledge flows between units and high coordination costs.
• D) If the company adopts a divisional structure, it will not be able to develop specific and unique offerings for each target group.

---

Definitions:

Inventory

The total amount of goods and materials a company has in stock, including raw materials, work-in-progress, and finished goods.

Beginning Inventory

The price of items on offer for purchase at the onset of an accounting cycle.

Markup

An addition to the purchase cost of items intended to cover both operational costs and generate a profit.

Net Sales

The revenue from sales transactions after subtracting returns, allowances for damaged or missing goods, and discounts.