Ch11 Organization Structures and Design Exam Questions

Chapter 11: Organization Structures and Design

True/False

1. An organization structure is the system of tasks, workflows, reporting relationships, and communication channels that link together the work of diverse individuals and groups.

Learning Objective: 11.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. An organization chart includes major subunits in which positions reporting to a common manager are shown.

Learning Objective: 11.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A social network analysis is a tool that identifies formal structures and their social relationships.

Learning Objective: 11.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Informal networks are sources of emotional support and friendship that satisfy members’ social needs.

Learning Objective: 11.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. In a functional structure, people working on the same product, in the same area, with similar customers, or on the same processes, are grouped together.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Functional structures tend to work best in relatively stable environments where problems are predictable and the demands for change and innovation are limited.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. In a functional structure, the functions become formalized not only on the organization chart, but also in the mind-sets of people.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. One of the disadvantages of functional structures is that employees lack a clear career path within functions.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Organizations that do not communicate, coordinate, or problem solve across functions have a functional silo problem.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Divisional structures are common in organizations dealing with only one or a few products or services.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A product structure prompts managers to be responsive to changing market demands and customer tastes.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Geographical structures are typically used when there is a need to differentiate products or services in various locations, such as in different parts of a country.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A customer structure is the least common structure in the consumer products industry.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A divisional structure is characterized by reduced coordination across functional departments.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Divisional structures can create unhealthy rivalries as divisions compete for resources and top management attention.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Workers in a matrix structure are allowed to be part of only one formal group at a time.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Workers in a matrix structure report to two supervisors—one within the function and the other within the team.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A matrix structure is characterized by poor customer service.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. In a matrix structure, top managers are freed from lower-level problem solving to focus time on more strategic issues.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Team meetings in matrix structures are short and quick.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Organizations with team structures make extensive use of both permanent and temporary teams to solve problems, complete special projects, and accomplish day-to-day tasks.

Learning Objective: 11.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Project teams are permanent in nature and cannot be disbanded.

Learning Objective: 11.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Supplier strategic alliances link businesses in preferred supplier–customer relationships that guarantee a smooth and timely flow of quality supplies among the partners.

Learning Objective: 11.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Network structures result in increasing overhead and reducing operating efficiency.

Learning Objective: 11.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Empowerment refers to letting others make decisions and exercise discretion in their work.

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Agile organizations are structured to be slow moving so that they can adequately adjust to changing market conditions.

Learning Objective: 11.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Self-enhancement bias is the tendency to see yourself as more capable, intelligent, and ethical than others.

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

Multiple Choice

1. An organization structure refers to:
2. a relationship between two or more firms to meet a particular business need.
3. the group of employees who perform jobs together in the same location.
4. the network of employees in a particular team.
5. a system of tasks, reporting relationships, and communication linkages.
6. a cooperation agreement with another organization to jointly pursue activities of mutual interest.

Learning Objective: 11.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Sara’s job includes dividing up the work and assigning tasks to each employee. She identifies people responsible for each task, decides the reporting structure, and decides employees’ work relationships. Sarah is a part of the _____ team in her company.
2. financing
3. sourcing
4. controlling
5. decentralizing
6. organizing

Learning Objective: 11.1

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. In an organizational structure, division of work refers to:
2. lines that show who reports to whom.
3. positions and titles that show work responsibilities.
4. the vertical layers of management.
5. lines that show formal communication flows.
6. positions that report to a common manager.

Learning Objective: 11.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following are included in the basics of a formal organizational structure?
2. Communication channels
3. Friendship cliques
4. Social relationships
5. Grapevine structures
6. Sources of emotional support

Learning Objective: 11.1

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. In an organizational structure, major subunits refer to:
2. positions and titles that show work responsibilities.
3. lines that show who reports to whom.
4. positions that report to a common manager.
5. lines that show how formal communication flows.
6. the vertical layers of management.

Learning Objective: 11.1

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is true of a formal structure?
2. Formal structures work only in organizations with diverse operations that extend across many products, customers, and work processes.
3. The lines of the formal structure cut across levels and move from side to side.
4. Formal structures are characterized by the existence of “in” and “out” groups.
5. Lines in a formal structure are drawn from person to person according to frequency and type of relationship maintained.
6. A formal structure consists of vertical layers of management.

Learning Objective: 11.1

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is true of informal structures?
2. They represent supervisory relationships.
3. They help in preventing the occurrence of rumors.
4. They are sources of emotional support and friendship.
5. They show the vertical layers of management.
6. They are characterized by the presence of major subunits.

Learning Objective: 11.1

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following asks people to identify others to whom they turn for help most often, with whom they communicate regularly, and who gives them energy and motivation?
2. Social network analysis
3. Formal structures
4. Forces analysis
5. SWOT analysis
6. Four corners model

Learning Objective: 11.1

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Which of the following is a disadvantage of informal structures?
2. They are characterized by too many vertical layers of management.
3. They are typified by the presence of complex formal communication flows.
4. They have very centralized systems that restrict employee freedom.
5. They are characterized by the existence of “in” and “out” groups.
6. They discourage informal learning as people work and interact together throughout the workday.

Learning Objective: 11.1

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. A _____ structure groups together people with similar skills who perform similar tasks.
2. product
3. divisional
4. geographical
5. customer
6. functional

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Fredent Corporation, an apparel manufacturer, creates groups of employees with similar skills performing similar tasks. Members of each such group share technical knowledge, skills, and responsibilities. Which of the following structures is being used by Fredent Corporation?
2. Product structure
3. Divisional structure
4. Functional structure
5. Geographical structure
6. Customer structure

Learning Objective: 11.2

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following is true of a functional structure?
2. It is characterized by low-quality technical problem solving.
3. It consists of task assignments consistent with expertise and training.
4. It does not have the advantage of economies of scale.
5. It is common in complex organizations with diverse operations.
6. It is the ideal structure when there is a need to differentiate products or services in various locations.

Learning Objective: 11.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Which of the following is an advantage of a functional structure?
2. Economies of scale with efficient use of resources
3. Improved coordination across functional departments
4. Establishment of a sense of common purpose
5. Clear points of responsibility for product or service delivery
6. Expertise focused on specific customers, products, and regions

Learning Objective: 11.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. A _____ groups together people working on the same product, in the same area, with similar customers, or on the same processes.
2. functional structure
3. silos structure
4. divisional structure
5. vertical structure
6. matrix structure

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is true of a divisional structure?
2. It is common in organizations dealing with only one or a few products or services.
3. It tends to work best in relatively stable environments where problems are predictable.
4. Its main focus is to put together people within the same expertise and help them work together.
5. It is an attempt to gain the advantages and minimize the disadvantages of the matrix structure.
6. It overcomes the disadvantages of a functional structure, such as the functional chimneys problem.

Learning Objective: 11.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Rezter Group, a consumer goods company, owns several brands that produce different goods. Each brand is focused on a single consumer good and has a separate chief executive who is responsible for the manufacturing, sales, costs, profits, and losses of his or her brand. This implies that each brand at Rezter Group is applying a _____ structure in the organization.
2. geographical
3. product
4. customer
5. functional
6. process

Learning Objective: 11.2

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following is true of a product structure?
2. It groups together jobs and activities being performed in the same location.
3. It is used when there is a need to differentiate products or services in various locations.
4. It groups together jobs and activities that are serving the same customers or clients.
5. It clearly links costs, profits, problems, and successes in a market area with a central point of accountability.
6. It helps focus attention on the unique cultures and requirements of different nations.

Learning Objective: 11.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Slice-It Inc., a fast food organization operating in many countries, varies its menus in different countries according to local tastes and preferences. It groups together employees and tasks working in the same location. Which of the following structures is Slice-It Inc. using?
2. Geographical structure
3. Product structure
4. Customer structure
5. Functional structure
6. Process structure

Learning Objective: 11.2

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following is true about the geographical structure?
2. It helps focus attention on the unique cultures and requirements of particular regions.
3. Under this structure, jobs and activities are grouped together based on preferences of similar clients.
4. It groups together jobs and activities that are part of the same processes.
5. It groups together people with similar skills who perform similar tasks.
6. Under this structure, each product division is given a chief executive who is responsible for its own profits and losses.

Learning Objective: 11.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Amethyst Inc.’s organizational structure combines jobs that serve clients based on factors such as their ages, tastes, and preferences. Which of the following organizational structures exists at Amethyst Inc.?
2. Geographical structure
3. Product structure
4. Customer structure
5. Functional structure
6. Process structure

Learning Objective: 11.2

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. An order fulfillment by a catalog retailer, a procedure that takes an order from point of initiation by the customer to point of fulfilment by a delivered product is an example of a _____.
2. operational chimney
3. functional silo
4. directional array
5. work process
6. strategic alliance

Learning Objective: 11.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Employees who are involved in designing, engineering, and preparing models are grouped together at Zener Inc. Further, employees who engage in public relations, sales promotion, advertising, and direct marketing are put together in another team. Which of the following structures exists at Zener Inc.?
2. Geographical structure
3. Product structure
4. Customer structure
5. Client structure
6. Process structure

Learning Objective: 11.2

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following is an advantage of a divisional structure?
2. Expertise focused on specific customers, products, and regions
3. Economies of scale with efficient use of resources
4. Reduced costs because of common resources and efforts across divisions
5. Emphasis on the goals of the organization as a whole
6. No scope for unhealthy rivalries within the organization

Learning Objective: 11.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is a disadvantage of divisional structures?
2. There is reduced flexibility in adding, removing, or changing operations to meet changing demands.
3. They increase costs through the duplication of resources and efforts across divisions.
4. They reduce the level of coordination across functional departments.
5. They make it impossible to focus on specific customers, products, and regions.
6. They require the deletion of divisions in an organization.

Learning Objective: 11.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is true of a matrix structure?
2. Workers in a matrix structure are allowed to be part of only one team at a time.
3. A matrix structures does not have the ability to be flexible while dealing with regional differences.
4. It is accomplished by creating permanent teams that cut across functions to support specific products, projects, or programs.
5. A matrix structure is made up of temporary teams that are disbanded after each project.
6. A matrix structure involves top management in lower-level problem solving.

Learning Objective: 11.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Which of the following is an advantage of a matrix structure?
2. Improved strategic management
3. No scope for issues such as “groupitis” across teams
4. Clearly defined tasks and no conflict in work priorities
5. No power struggles across teams
6. Fast and effective team meetings

Learning Objective: 11.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is a disadvantage of a matrix structure?
2. The requirement of adding the team leaders to a matrix structure can result in higher costs.
3. A matrix structure results in reduced performance accountability through the program, product, or project managers.
4. Matrix structures are associated with very poor customer service.
5. A matrix structure stresses that top managers must engage in both lower-level problem as well as more strategic issues.
6. Matrix structures lead to reduced flexibility in adding, removing, or changing operations to meet changing demands.

Learning Objective: 11.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is true about a team structure?
2. A temporary team does not have prominence in a team structure.
3. A team structure is most often observed in a vertical organization.
4. The intention of a team structure is to create more effective lateral relations around and across the organization.
5. In a team structure, cross-functional structures are convened for a particular task or project and disbanded once the task is completed.
6. The main focus of a team structure is to improve and maintain the hierarchical system of management.

Learning Objective: 11.3

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is a horizontal structure that brings together members from different departments such as marketing, production, and accounting?
2. Divisional structure
3. Functional structure
4. Cross-functional team
5. Process structure
6. Product-oriented team

Learning Objective: 11.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is true of a project team?
2. Project teams are examples of traditional vertical structures.
3. Project teams are characterized by a lack of communication and coordination across functions.
4. Project teams are informal structures that group together jobs and activities focused on a single product or service.
5. Project teams are temporary and disband once the task is completed.
6. Project teams are created at the beginning of a project and cannot be disbanded as they are retained for future projects.

Learning Objective: 11.3

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is a limitation of having a team structure?
2. The total time spent together in a team meeting is not productive.
3. A team structure is associated with poor performance.
4. Project teams are informal structures that group together jobs and activities focused on a single product or service.
5. People working in a team structure often experience a reduced sense of identification.
6. A team structure is not very effective at mobilizing talents.

Learning Objective: 11.3

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A _____ structure has a central core of full-time employees surrounded by outside contractors and partners that supply essential services.
2. functional
3. divisional
4. team
5. network
6. matrix

Learning Objective: 11.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A network structure helps lower costs and improves flexibility in dealing with changing environments because:
2. it brings together members from different functional departments in the organization.
3. the central core is relatively small and the surrounding networks can be expanded or shrunk as needed.
4. the central core consists of temporary employees and focuses on cross-functional teams to improve lateral relations.
5. it has vertical levels of management and hierarchical levels of authority.
6. the central core is relatively big, and that provides the advantage of economies of scale.

Learning Objective: 11.3

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Which of the following is true about a network structure?
2. It does everything for itself with full-time employees.
3. It consists of networks that are composed of full-time employees.
4. It groups jobs and activities that are part of the same processes.
5. It consists of a relatively small central core that results in an increase in costs.
6. It employs a minimum staff and contracts out as much work as possible.

Learning Objective: 11.3

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Zack Books Ltd., an international library headquartered in Alabama, has many branches across different countries. It uses information technology to be in regular contact with its various outside suppliers of books and magazines. Which of the following organizational structures is being used by the library?
2. Functional structure
3. Network structure
4. Divisional structure
5. Team structure
6. Matrix structure

Learning Objective: 11.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. A strategic alliance is a(n):
2. contract that brings together members from different functional departments in an organization.
3. cooperation agreement with another organization to jointly pursue activities of mutual interest.
4. organizational structure that combines the functional and divisional structures.
5. set-up that eliminates internal boundaries among subsystems and external boundaries with the external environment.
6. arrangement that emphasizes formal authority, order, fairness, and efficiency.

Learning Objective: 11.3

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Feast-It Inc., a fast food corporation, entered into an agreement with Spark Inc., a company that manufactures cheese, mayonnaise, and other toppings. Feast-It Inc. exclusively uses the toppings produced by Spark Inc. This business agreement has resulted in benefits for both the companies. This is an example of a _____.
2. boundaryless organization
3. joint venture
4. cross-functional team
5. co-operative structure
6. strategic alliance

Learning Objective: 11.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Delix Juices Co., well-known for its fruit juices with catchy names, has recently signed an agreement with Finred Books Ltd. According to this agreement, Delix Juices Co. has an outlet at each Finred store. This agreement has led to an increase in profits for both the companies as sales of both have increased. This is an example of a _____.
2. boundaryless organization
3. joint venture
4. cross-functional team
5. strategic alliance
6. co-operative structure

Learning Objective: 11.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following is an advantage of a network structure?
2. Network structures are lean and fast.
3. If one part of the network breaks down or fails to deliver, the other parts of the network will continue working.
4. A network structure is characterized by technology that enables the organization to have control over activities contracted out.
5. A network structure has an efficient vertical management system.
6. Network structures have a relatively large central core that gives them stability.

Learning Objective: 11.3

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is a disadvantage of network structures?
2. The central core of network structures is relatively small and the surrounding networks tend to expand or shrink continuously.
3. There is a potential to experience a lack of loyalty among contractors who are used infrequently.
4. A network structure is characterized by lack of flexibility which leads to problems while dealing with changing environments.
5. Network structures are broad and complex.
6. Network structures tend to increase overheads of an organization and reduce its operating efficiency.

Learning Objective: 11.3

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Suppose you start a new business to compete with Uber. You design an easy-to-use app and arrange for drivers to get paid a percentage for each ride. This is an example of a ____.
2. cross-functional team
3. functional chimney
4. matrix structure
5. network structure
6. strategic alliance

Learning Objective: 11.3

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. A _____ uses IT and the Internet to engage a shifting network of strategic alliances.
2. formal structure
3. project team
4. virtual organization
5. bureaucratic structure
6. matrix organization

Learning Objective: 11.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Brandon & Sons Inc., a well-established electronics company, uses IT and the Internet to enter into business alliances with software firms spread across different nations to meet specific operating needs and objectives. Once the work is completed, the alliance rests until next called into action. Brandon & Sons Inc. is a _____.
2. cross-functional team
3. project team
4. virtual organization
5. methodical team
6. formal organization

Learning Objective: 11.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. An organizational design:
2. is the process of creating structures that accomplish mission and objectives.
3. is a system of tasks, reporting relationships, and communication linkages.
4. is a group of related tasks that collectively creates a valuable work product.
5. identifies the informal structures and their embedded social relationships that are active in an organization.
6. is a cooperation agreement with another organization to jointly pursue activities of mutual interest.

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The best organizational design is the one that:
2. emphasizes formal authority, order, fairness, and efficiency.
3. is centralized, with many rules and procedures, a clear-cut division of labor, narrow spans of control, and formal coordination.
4. emphasizes a vertical structure, hierarchy of authority, and promotion based on competency.
5. achieves a good match between structure and situational contingencies.
6. has narrow spans of control and structures of the pyramid form.

Learning Objective: 11.4

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A CEO at Widgets R Us takes a new opportunity at Create-A-Cart. The CEO knows the same matrix structure that worked at Widgets R Us ___ at Create-A-Cart because
2. will work; every organization emphasizes formal authority, order, fairness, and efficiency.
3. may not work; every organization faces its own set of unique problems and opportunities.
4. may not work; all organizations are not affected by situational contingencies such as task, technology, environment, and people.
5. will work; every organization has narrow spans of control and structures of the traditional pyramid form.
6. will work; all organizations have sufficient resources to jointly pursue mutual interests with another organization.

Learning Objective: 11.4

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Which of the following emphasizes formal authority, order, fairness, and efficiency?
2. Bureaucracy
3. Boundaryless organization
4. Decentralization
5. Strategic business unit
6. Strategic alliance

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is true of a bureaucracy?
2. It is characterized by open divisions of labor.
3. It encourages worker empowerment and teamwork.
4. It is built on a foundation of trust that people will do the right things on their own initiative.
5. It is a vertical structure with promotion based on competency.
6. It performs well in environments that demand flexibility in dealing with changing conditions.

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. LMZ Inc. functions with systematic order and a hierarchical system of management. It is characterized by formal channels of communication. The employees of the firm are required to strictly abide by the formal rules of the company. LMZ Inc. is a(n) _____.
2. adaptive organization
3. bureaucracy
4. decentralized organization
5. boundaryless organization
6. autocracy

Learning Objective: 11.4

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following is true of a mechanistic design?
2. It is a horizontal structure with decentralized authority.
3. It is characterized by wide spans of control.
4. It is characterized by a precise division of labor.
5. It is typified by informal means of coordination.
6. It is a design with very few rules and procedures.

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The staff at Grace Grocery Store is assigned specific tasks such as receiving supply, arranging stock, making sales, preparing cash registers, and so on. They perform the same task every day. The firm is characterized by formal means of coordination. Grace Grocery Store is functioning with a(n) _____ design.
2. organic
3. decentralized
4. mechanistic
5. adaptive
6. boundaryless

Learning Objective: 11.4

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Adzen Inc., an advertising firm, has a horizontal structure with simple rules and procedures. It achieves targets by having personal means of coordination. The firm values the existence of informal groups and does not believe in division of labor. Which of the following designs is being used by Adzen Inc.?
2. Organic
3. Centralized
4. Bureaucratic
5. Nonadaptive
6. Authoritative

Learning Objective: 11.4

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following is true of an organic design?
2. It is a horizontal structure with decentralized authority.
3. It has narrow spans of control.
4. It has a vertical structure of authority.
5. It is typified by many rules and procedures.
6. It is characterized by very precise division of labor.

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. ____ is the tendency to view oneself as more capable, intelligent, and ethical than others.
2. The authority-and-responsibility principle
3. A centralized system
4. A mechanistic design
5. The self-enhancement bias
6. A bureaucratic structure

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is true of managers with a self-enhancement bias?
2. They work with narrow spans of control and formal coordination.
3. They operate with a distinguished feature of promotion based on the relationships they have built.
4. They believe they are better at determining what is right than other people.
5. They are characterized by vertical structures with a clear-cut division of labor and a hierarchy of authority.
6. They work best for organizations doing routine tasks in stable environments.

Learning Objective: 11.4

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The CEO of Astro Inc., a graphics design firm, believes he is more capable, intelligent, and ethical than any of his other managers. He has a hard time letting his other top-level managers do their jobs without his direct supervision. This implies that the CEO of Astro Inc. _____.
2. suffers from the authority-and-responsibility principle
3. uses a centralized system
4. uses a bureaucratic organization
5. suffers from a self-enhancement bias
6. uses an authoritative organization

Learning Objective: 11.4

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following is true of trends in organizational designs?
2. The growth of new technologies for information systems and social media is reducing new possibilities for creativity.
3. Managers are trying to minimize the rate of delegation of work as it incurs heavy expenditures.
4. Delegation and horizontal structures are contributing to more centralization in organizations.
5. The complexity and uncertainty are prompting more organizations to shift toward organic designs.
6. Organizations are lowering costs and increasing efficiency by employing more staff personnel and using larger staff units.

Learning Objective: 11.4

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The chain of command:
2. is the number of subordinates directly reporting to a manager.
3. links all persons with successively higher levels of authority.
4. horizontally links all positions of an organization’s management.
5. operates with a minimum of bureaucratic features.
6. is the process of distributing and entrusting work to other persons.

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. _____ refers to the number of subordinates directly reporting to a manager.
2. Span of control
3. Chain of command
4. Delegation
5. Empowerment
6. Decentralization

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Oasis Inc. is an organization with a tall structure. Which of the following would be a characteristic of Oasis Inc.?
2. Oasis Inc. would reduce the number of employees in its organization.
3. Oasis Inc. would have an inadequate number of managers.
4. Oasis Inc. would allow for wider spans of control.
5. Oasis Inc. would be less flexible and more costly due to multiple layers of middle management.
6. Oasis Inc. would be a highly efficient, more flexible, and customer-sensitive organization.

Learning Objective: 11.4

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following is true of tall structures?
2. They have inadequate levels of management.
3. They are characterized by scarcity of employees.
4. They reduce overhead costs.
5. They are highly efficient and flexible.
6. They have narrow spans of control.

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Branxon Corporation functions with a flat structure. Which of the following would be a characteristic of Branxon Corporation?
2. Branxon Corporation would be functioning with many managers.
3. Branxon Corporation would permit workers to make their own decisions.
4. Branxon Corporation would tend to be more costly due to the existence of many levels of management.
5. Branxon Corporation would have a narrow span of control.
6. Branxon Corporation would have a scarcity of employees.

Learning Objective: 11.4

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following is true of flat structures?
2. They are inflexible.
3. They help in reducing overhead costs.
4. They have narrow spans of control.
5. They tend to be very efficient due to the existence of many managers.
6. They are not customer-sensitive.

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The process of entrusting work to others by giving them the right to make decisions and take action is referred to as _____.
2. adaption
3. mechanization
4. delegation
5. bureaucratization
6. centralization

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following holds true regarding delegation?
2. Authority should equal responsibility when work is delegated from a supervisor to a subordinate.
3. When a supervisor delegates a task, the subordinate should not be given authority regarding performance.
4. When done well, empowerment leads to delegation.
5. When work is delegated, authority of the subordinate should be higher than the responsibility given by the supervisor.
6. Delegation is conducted in order to ensure that employees do not make their own decisions regarding performance of tasks.

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is true regarding the process of delegation?
2. The manager seldom gives the right to the subordinate to take necessary actions along with the assigned task.
3. The responsibility given by the manager is an expectation for the subordinate to perform assigned tasks.
4. When a subordinate takes an assignment, he does not have an obligation to the manager to complete the job as agreed.
5. In the process of delegation, a manager does not have the power to create accountability.
6. A manager is allowed to provide the subordinate with responsibility but not the authority to perform.

Learning Objective: 11.4

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is true of empowerment?
2. It includes the concentration of authority for most decisions at the top level of an organization.
3. It is a result of successful concentration of authority.
4. It is the line of authority that vertically links each position with successively higher levels of management.
5. It assigns tasks and rules to employees with the intention of prohibiting employees from making their own decisions.
6. It results when delegation enables people to make decisions.

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following explains the purpose of empowering employees?
2. It encourages employees to work as per the decisions made by the top-level managers.
3. It vertically links each employee’s position with successively higher levels of management.
4. It allows people at all levels to make more decisions that affect themselves and their work.
5. It enables employees of an organization to work with strong hierarchical levels of authority.
6. It encourages employees to use more formal means of coordination with many rules and procedures.

Learning Objective: 11.4

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Centralization refers to the:
2. concentration of authority for most decisions at the top level of an organization.
3. dispersion of authority to make decisions throughout all organization levels.
4. system that allows others to make decisions and exercise discretion in their work.
5. process of creating wide spans of control and few hierarchical levels in organizations.
6. process of entrusting work to others by giving them the right to make decisions and take action.

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. At ZCN Bank, all operational decisions regarding promotional measures, interest rates, benefits, and customers are made completely by the top management. This implies that ZCN Bank has a(n) _____.
2. decentralized system
3. centralized system
4. boundaryless structure
5. informal structure
6. organic design

Learning Objective: 11.4

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. The dispersion of authority to make decisions throughout all organization levels is known as _____.
2. span of control
3. chain of command
4. decentralization
5. bureaucracy
6. centralization

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Franklin Inc. encourages its employees at all levels to provide ideas, opinions, and support the process of decision making. This indicates that the firm has a(n) _____.
2. decentralized system
3. centralized system
4. bureaucratic structure
5. formal structure
6. mechanistic design

Learning Objective: 11.4

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following is true with regard to centralization and decentralization?
2. Organizations cannot operate with decentralization without giving up centralized control.
3. Advances in information technology help top managers maintain centralized control.
4. Empowerment and horizontal structures are contributing to more centralization in organizations.
5. Organizations with organic designs are highly centralized.
6. Organizations with mechanistic designs are highly decentralized.

Learning Objective: 11.4

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. People in _____ positions provide technical expertise for other parts of the organization.
2. recruiting
3. management
4. line personnel
5. staff
6. mechanistic

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is true with regard to use of staff positions?
2. Organizations can lower costs and increase efficiency by employing fewer staff personnel.
3. When organizations have smaller staff units, they tend to incur high expenditures.
4. Line personnel provide expert advice and guidance to people in staff positions.
5. Organizations can create a central core of full time staff personnel to improve efficiency.
6. Organizations should focus on employing more staff personnel to increase efficiency.

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Leisure Viaje is a major tour operator in the country. Four senior managers look after the company’s operations in 20 locations. All these senior managers report to the general manager of the company who is stationed at the company headquarter in Chicago. This description represents the _____ of the company.
2. code of conduct
3. social network
4. organization chart
5. focal structure
6. mission

Learning Objective: 11.1

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Ramon Auto, an automobile manufacturer, operates in several countries. The company has three major brands which are headed by three separate managers. Each of these three managers look after all the jobs and activities associated with their respective brands. According to this information, which of the following organization structures is adopted by Ramon Auto?
2. Functional structure
3. Product structure
4. Geographical structure
5. Customer structure
6. Process structure

Learning Objective: 11.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Environment First, an organic farm forms a permanent team to ensure the people who manage the crop rotations, purchase the crop fertilizers, and observe the soil’s water retention work together to support the farm. Each member reports to someone on the permanent team as well as a person in their functional area. In the context of team structures, Environment First has the _____ structure.
2. bureaucratic
3. matrix
4. closed
5. geographical
6. network

Learning Objective: 11.2

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Traves Inc., a transcription services company, manages all its core processes with a small team of highly skilled employees. However, it outsources five of its processes to contractors. This helps the company to lower its costs and have a high degree of flexibility. In this context, Traves Inc. is using a(n) _____ structure to carry out its functions.
2. matrix
3. bureaucratic
4. network
5. geographical
6. product

Learning Objective: 11.2

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Brendon, a software engineer at Re-Soft Inc., has to report to two managers at the same time, a functional manager and a team manager. In the context of divisional structures, Brendon is working in a _____ structure.
2. geographical
3. customer
4. process
5. product
6. matrix

Learning Objective: 11.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Four engineers from the technology cell of a company are required to work together for a certain time on a job till the job is completed. This is an example of a(n) _____.
2. cross-functional team
3. outsourcing strategic alliance
4. boundaryless organization
5. project team
6. functional silo

Learning Objective: 11.3

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Crexons Inc. finds that there is too much bureaucracy in their organization. The CEO of the company desires to increase flexibility in the organizational structure. To accomplish this, he must _____.
2. create temporary matrix structures
3. empower the employees to make their own decisions
4. establish strict organizational policies
5. create functional silos to make sure the functions have well-defined boundaries.
6. divide the organization based on processes.

Learning Objective: 11.4

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. In Bill’s organization, employees are encouraged to use their skills without restrictions, provide views and concepts, and independently select the best line of solutions. This information indicates that Bill’s organization practices _____.
2. centralization
3. vertical integration
4. divestiture
5. horizontal integration
6. empowerment

Learning Objective: 11.4

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Isabelle, the CEO of Roll-En Pens, finds that vertical hierarchy exists in the organization. She plans to reduce the stress on this hierarchical structure and give more decision-making ability to the subordinates. In the context of tall and flat organizations, Isabelle is trying to create a(n) _____ organization.
2. bureaucratic
3. decentralized
4. informal
5. matrix
6. adaptive

Learning Objective: 11.4

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. At Sync-In Information Solutions, a startup in software solutions, most processes are determined by the few active partners of the business. Which of the following does this example illustrate?
2. Centralization
3. Empowerment
4. Divestiture
5. Vertical integration
6. Delegation

Learning Objective: 11.4

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

Essay

1. What are the potential advantages of matrix structures?

• Better communication and cooperation across functions.

• Improved decision making; problem solving takes place at the team level where the best information is available.

• Increased flexibility in adding, removing, or changing operations to meet changing demands.

• Better customer service; there is always a program, product, or project manager informed and available to

Answer questions.

• Better performance accountability through the program, product, or project managers.

• Improved strategic management; top managers are freed from lower-level problem solving to focus time on more strategic issues.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. What are the advantages and disadvantages of network structures?

The potential disadvantages of network structures lie largely with the demands of new management responsibilities. The more complex the business or mission of the organization, the more complicated it is to control and coordinate the network of contracts and alliances. If one part of the network breaks down or fails to deliver, the entire system suffers. In addition, there is the potential to lose control over activities contracted out and to experience a lack of loyalty among contractors who are used infrequently rather than on a long-term basis.

Learning Objective: 11.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Describe the steps involved in the process of delegation.

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

Text Entry

1. ___ is the process of arranging, connecting, and integrating people and resources to accomplish a goal.

Learning Objective: 11.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Organization ____ is a system of tasks, reporting relationships, and communication linkages.

Learning Objective: 11.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. An organization chart describes the _____ of work positions within an organization.

Learning Objective: 11.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. ____ structure is the official structure of the organization.

Learning Objective: 11.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Informal structure is the set of social networks found in ____ relationships among the members of an organization.

Learning Objective: 11.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A(n) ____ structure groups together people with similar skills who perform similar tasks.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The functional ____ problem is a lack of communication, coordination, and problem solving across functions.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A ____ structure groups together people and jobs performed in the same location.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A work ____ is a group of related tasks that collectively creates a valuable work product.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A matrix structure combines the functional and divisional approaches to create ____ cross-functional project teams.

Learning Objective: 11.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A(n) ____ organization is structured to be fast moving, open to change, and internally connected top to bottom and side to side.

Learning Objective: 11.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. ____ teams are convened for a particular task and are disbanded once the task is completed.

Learning Objective: 11.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Members of ____ teams share roles and leadership responsibilities while working toward a common goal.

Learning Objective: 11.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A network structure uses information technologies to link with networks of ____ suppliers and service contractors.

Learning Objective: 11.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A strategic ____ is a cooperation agreement with another organization to jointly pursue activities of mutual interest.

Learning Objective: 11.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Organizational ___ is the process of creating structures that accomplish the mission and objectives.

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A(n) ____ emphasizes formal authority, order, fairness, and efficiency.

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A mechanistic design is ____, with many rules and procedures, a clear-cut division of labor, narrow spans of control, and formal coordination.

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A(n) ____ design is decentralized, with fewer rules and procedures, open divisions of labor, wide spans of control, and more personal coordination.

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. ____ allows others to make decisions and exercise discretion in their work.

Learning Objective: 11.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge