Practice free →
HomeBBAPrinciples of ManagementDesigning Organizational Structures › Which structural design suits a cost-control str…

Which structural design suits a cost-control strategy?

AMechanistic, for efficiency and tight control
BOrganic, for its loose departmentalization
COrganic, because decisions are decentralized
DNeither, since strategy and structure are separate
Answer & Solution
Correct answer: A. Mechanistic, for efficiency and tight control
1. Structure follows from strategy, because corporate goals are set in the strategy-making process. 2. A company using a cost-control strategy requires efficiency and tight control. 3. Those are supplied by a mechanistic organization. 4. Loose departmentalization and decentralized decisions are organic features that serve innovation instead. 5. Struggling firms often try to increase innovation and rein in costs at once, which is precisely why the choice is hard. 6. Treating strategy and structure as unrelated contradicts the stated link between the two. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 7 "Designing Organizational Structures", section 7.6 Organizational Design Considerations_
Solve this in the app — BBA practice & 24k+ MCQs →
Related questions