A firm pursuing a low-cost strategy will likely have a ...

[nevelica]

A firm pursuing a low-cost strategy will likely have a mechanistic structure.
 
  Indicate whether the statement is true or false

Question 2

Explain the difference between a wheel configuration and a circle configuration of a top-management team.
 
  What will be an ideal response?

[makaylafy]

Answer to Question 1

TRUE

Answer to Question 2

The way the top-management team is constructed and the type of people who are on it affect the level of organizational learning.

In the wheel configuration, organizational learning is decreased because managers from the different functions report separately to the CEO. Rather than coordinate their own actions as a team, they send all information to the CEO, who processes this information, arrives at a decision, and communicates the decision back to the top managers. Research suggests that the wheel works best when problems are simple and require minimal coordination among top team members. When problems are complex and nonprogrammed decision-making is required, the wheel configuration slows organizational learning because all coordination takes place through the CEO.
In the circle configuration, top managers from different functions interact with one another and with the CEO. That is, they function as a team, which promotes team and organizational learning. Research has suggested that the circle works best for complex problems requiring coordination among group members to arrive at a solution. The circle design solves complex problems much more quickly than the wheel arrangement. Communication around the circle takes less time because there is more opportunity for team and organization learning between all top managers.