The Upper Management of a Toy Company Has Decided That

question 106

Multiple Choice

The upper management of a toy company has decided that more divisions would be useful. They decided that one-year-olds have different needs than two-year-olds, so they created a division for each age. They also decided that people in the northern part of the state have different needs than the people in the central part of the state and the southern part of the state, so they created three more divisions. Lastly, they decided that because they serve schools, daycares, families with many kids, and families with few kids, they needed four more divisions. How would an expert on organizational structures MOST LIKELY rate this strategy?

• A) Poor; operating that many divisions will drastically increase operation costs.
• B) Poor; divisions never work and lead to motivation problems amongst the employees.
• C) Excellent; customer service will be flawless and on target.
• D) Excellent; competition between divisions for resources will incite passion amongst the employees.

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Definitions:

Interim Financial Statements

Financial reports covering a period shorter than a fiscal year, providing a view of a company's financial health in mid-year.

Public Companies

Companies that have issued securities through an initial public offering and are traded on at least one stock exchange or in the over-the-counter market.

IFRS 8

An International Financial Reporting Standard that requires companies to report financial information by business segment.

Mutual Life Insurance

An insurance company that is owned by its policyholders, who share in the profits through dividends or reduced premiums.