Restructuring at Digital Arts (Scenario)

question 40

Multiple Choice

Restructuring at Digital Arts (Scenario)
Victor Lee is the founder and president of Digital Arts, a Vancouver-based company that makes games for popular electronic game consoles. The company has experienced tremendous growth over the years, but now Victor is concerned that the company's structure has become too tall and rigid. He explains, "Twenty years ago we started with five people and one product. Today we are a global operation with 500 people employed in six countries producing over 200 game titles." Digital Arts is currently organized into five specialized departments: product development, production, marketing, accounting, and human resources. To coordinate the workflow, many rules and regulations have been introduced. Victor now worries that the increased bureaucracy is beginning to stifle innovation. He ponders several restructuring options.
-Victor begins to wonder if they would not be better off to simply refocus their efforts on what they have always done best: design games.They could shrink the company back to a small core of game designers and contract out the other major business functions.This strategy is most consistent with a ________ organization.

• A)boundaryless
• B)network
• C)virtual
• D)matrix

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Definitions:

Autonomous Consumption

Consumer spending that does not change in response to fluctuations in income, reflecting basic, non-discretionary expenditures.

Disposable Income

The funds set aside by households for spending and saving after income tax subtractions.

APC

Average Propensity to Consume, which refers to the percentage of income that an individual or group spends on consumer goods and services as opposed to saving.

Japan

A country located in East Asia, known for its rich culture, technological advancements, and as the world's third-largest economy by nominal GDP.