Chapter 8 Test Bank + Answers Structuring Organizations For - Understanding Business 12e Complete Test Bank by William Nickels. DOCX document preview.
Understanding Business, 12e (Nickels)
Chapter 08 Structuring Organizations for Today's Challenges
1) Organizing the structure of the company means deciding what jobs need to be done and who is responsible for doing them.
2) In a capitalist economy, organizations seldom reorganize due to changing markets.
3) One key to organizational success is to go back to basic principles and build the business on a sound foundation.
4) Small business organizations lack the size required to reap the benefits of labor specialization.
5) The purpose of a division of labor and specialization is to improve an employee's job performance.
6) Managing a growing business often requires managers to create departments to accomplish various tasks.
7) The process of creating individual departments to do specialized tasks is called departmentalization.
8) Division of labor refers to deciding how many jobs must be accomplished and then dividing them up amongst the labor force.
9) The success of the firm often depends on assigning the right tasks to the right person.
10) The process of setting up individual departments to do specialized tasks is called job specialization.
11) Correctly structuring a business organization allows managers to avoid delegating responsibility and authority to employees.
12) Division of labor is difficult to achieve in small businesses.
13) Departments are functional units within the business such as sales, accounting, finance, and marketing.
14) As indicated in the Making Ethical Decisions box, "Would You Sacrifice Safety for Profit?" organizational decisions that affect profits in a negative way should be avoided at all cost.
15) Corner Booksellers needs to reorganize its floor space. Management decided to reduce seating space in its stores in order to create room for new shelves to display the growing interest in books on clean eating. This company's effort is an example of how a firm may reduce its emphasis in one product line in order to serve customer preferences and trends.
16) To better organize his landscaping business, Scott started to divide each job into several parts. One is excavation and removal of old landscaping, the next is design, followed by purchasing, and finally installation of new plants. If he assigns a different employee to each part, this action would be an example of departmentalization.
17) Serena has long dreamed of opening her own restaurant. She, of course, knows that she will need to organize her business. Organizing begins with determining the work to be done.
18) When Eric Schmidt joined Google he tackled the organization function head-on. In speaking at a large conference with its founders, Sergey Brin and Larry Page, he commented that Google was running pretty well but "it just needed a little structure." Schmidt was referring to basic organization principles such as division of labor, specialization, and getting the departments running smoothly.
19) The driving force behind the change in business organizations is the change in consumer expectations.
20) Henri Fayol and Max Weber are best known for their contributions to accounting theory.
21) Fayol's principle of the division of labor says that functions should be divided into areas of specialization such as production, marketing, and finance.
22) One of Fayol's principles suggests that managers should have the right to give orders and expect others to follow.
23) Fayol's principle of esprit de corps says that employees should be divided into small groups that can be directed efficiently by a single manager.
24) Fayol's principles suggest that the goals of the firm are less important than the goals of individual workers.
25) According to Fayol's principle of authority, if you have authority you also have responsibility.
26) Fayol believed that the amount of decision-making power vested in top management should be the same in all situations.
27) Fayol believed that managers should treat employees and peers with respect and justice.
28) Clear communication among workers and keeping order in materials and people are included in Fayol's principles.
29) Max Weber's principles of organization were similar to those of Henri Fayol.
30) Weber believed that large organizations required everyone to follow the established rules and guidelines precisely.
31) Weber was critical of bureaucrats because he felt they undermined the efficiency of the organization.
32) Weber had a great deal of faith in managers. He was confident that a firm would do well if employees simply did as they were told.
33) Weber promoted the idea of the pyramid-shaped organization structure for large businesses.
34) Max Weber's organizational theories require an educated workforce to operate efficiently.
35) Weber was a strong proponent of bureaucracy.
36) Some business organizations still follow the 1940s organizational theory of Max Weber.
37) Weber believed that employees should be empowered to make their own decisions.
38) Job descriptions are an important part of Max Weber's organizational theory.
39) Max Weber believed that promotion should be based solely on seniority.
40) The design of a bureaucratic organization assumes a well-educated workforce.
41) An organizational hierarchy establishes one person at the top of an organization.
42) A chain of command is a line of authority that moves from the lowest level of the hierarchy to the top.
43) A hierarchy requires many top managers, but only a few middle managers.
44) According to Weber, a bureaucrat is a middle manager whose job is to implement top management's orders.
45) A bureaucracy empowers employees to quickly respond to customers' wants and desires.
46) A bureaucracy is an organization with many layers of managers who set rules and regulations and oversee all decisions.
47) Bureaucratic organizations establish rules and regulations that everyone is expected to follow.
48) Bureaucratic organizations are not very responsive to customers.
49) A bureaucracy is designed to be customer focused.
50) Bureaucratic organizations are structured to empower employees and please customers.
51) A bureaucratic style of organization is slow when responding to change.
52) Empowerment works only when employees are given the proper training and resources to respond.
53) The basic idea behind the organization design of Fayol and Weber was that management wanted to control workers.
54) An organization chart shows who is accountable for the completion of specific work and who reports to whom.
55) Looking at a traditional organization chart, you will view who reports to whom; you will have a sense of each person's authority and responsibility, and the type of work that they perform for the organization.
56) As organizations grew, the use of Fayol's principles led to rigid organizations that didn't always respond quickly to consumer requests.
57) In today's fast-paced business environment, Weber's bureaucratic ideas work well. These principles permit business to respond quickly to customer changes.
58) When we experience economies of scale, this means that as production levels rise (we make more of something), the cost of supplies and the cost of labor that go into the production go down.
59) The purpose of Weber's and Fayol's principles was for the benefit of management, as opposed to pleasing customers.
60) Weber put great trust in the creativity, skills, and pride of employees and believed that managers should act more as coaches than as bosses.
61) Most businesses adopt a bureaucratic organization in order to speed up their decision-making process.
62) Troy is a manager at a manufacturing company that creates commercial lighting fixtures. He thinks it is very important and less confusing if each worker has only one boss. Troy's view is consistent with Fayol's unity of command principle.
63) Angelo, a middle manager at a nonprofit, spends much of his time developing ways to implement the ideas from top management. Max Weber would have considered Angelo a bureaucrat.
64) Daniela thinks all workers should receive the same pay regardless of their position within a company. Daniela views on wages illustrate Fayol's principle of equity.
65) Ainsley is a middle manager at a large, multinational corporation. She prefers to involve her subordinates in decision making and gives her workers a reasonable amount of flexibility in how they do their jobs. Ainsley's management approach illustrates the principles first popularized by Max Weber.
66) Cruz works in the marketing department of a large firm. This is an example of Fayol's division of labor concept.
67) As a new employee in a bureaucratic organization, Madison can expect a great deal of independence and authority.
68) Corleone Industries' chain of command moves from the top of the hierarchy down to lower-level managers. The company is organized by department with specific rules and regulations that everyone is expected to follow. These characteristics suggest that Corleone Industries is an example of a bureaucratic organization.
69) A manager needs to be called to sign off on every return that a cashier performs at Sun and Fun Sportswear. The CEO continues this policy because he wants every manager to "look those customers right in the eye" and "stake their job on taking those items back." Clearly, Sun and Fun empowers its employees to make decisions at their jobs.
70) Dan was a team supervisor in a very large organization when the refrigerator in their lunchroom stopped functioning. He started the paperwork on the day it died, then the refrigerator request went out for bid. After that, two middle managers needed to approve acceptance of the bid and document their decision, and the purchasing director had final approval. The refrigerator arrived six months later. Max Weber would have approved of the decision process and its documentation at Dan's company to back up such a refrigerator purchase.
71) The degree to which an organization allows lower-level managers to make decisions reflects the degree of decentralization.
72) An advantage of decentralized authority is that those individuals closest to the customers and more familiar with local conditions make decisions.
73) Centralized authority provides for the delegation of authority to employees who are then better able to respond to customers' needs.
74) As a result of rapidly changing markets and global differences in consumer tastes, more firms are considering centralized authority.
75) A weakened corporate image is one of the disadvantages of a decentralized business organization.
76) In firms with centralized authority, each business unit is treated as if it is a completely separate and independent organization.
77) Span of control refers to the number of different markets a business can serve efficiently.
78) The optimum number of subordinates a manager should supervise is referred to as the span of control.
79) In today's business environment, the trend is to decrease the span of control.
80) The more standardized the work, the wider the span of control.
81) Managers near the top of an organization have the broadest span of control.
82) The more complex the job, the narrower the span of control.
83) When employees are self-managed, a company can implement a wider span of control.
84) Improvements in information technology have permitted companies to increase their span of control.
85) A tall organization structure consists of multiple levels of management.
86) A flat organizational structure is designed to be more responsive to the needs of management.
87) Flat organizations have fewer managers.
88) An advantage of a tall organization is that it ensures fast and efficient communications throughout the organization.
89) A recent business trend is the elimination of layers of management, creating flatter organizations and subsequently, a wider span of control.
90) Departmentalization is the dividing of organizational functions into separate units.
91) The traditional way to departmentalize an organization is by geographical area served.
92) Departmentalization by function allows employees opportunity to further develop their skills.
93) Departmentalization by function typically increases the cost of doing business.
94) Departmentalization by function groups employees based on similar skills, expertise, or resource use.
95) An advantage of departmentalization is groupthink.
96) Organizations that utilize functional departmentalization benefit from improved communication between departments.
97) Departmentalization creates an environment in which people are trained in a variety of managerial responsibilities.
98) Economies of scale can be achieved through departmentalization.
99) Some firms use a combination of departmentalization techniques.
100) The decision on how to departmentalize should depend on the customer and the product or service the firm is offering.
101) Departmentalizing by customer group has proven ineffective.
102) If there are several steps in getting the product to its final state, the company may choose to departmentalize by process.
103) Some companies have created hybrid versions of departmentalization, where they combine two or more traditional ways of departmentalizing.
104) When management structures the organization, it clarifies who gets to make decisions, how many people report to one manager, and how many different departments the company needs in order to operate effectively.
105) When management structures the organization, it makes decisions about which products and services it will offer and how it is going to finance the company.
106) Because top managers supervise the firm's most talented workers, they generally have a broader span of control than middle or first-line managers.
107) As the span of control widens, there is usually a reduction of middle management and an emphasis on empowerment.
108) A flat organization is less likely to respond quickly to customer needs.
109) To avoid losing that small-company-feel, fast growing companies try to maintain a flat organization structure.
110) Although a firm may experience better cost controls through departmentalization, it may not increase its responsiveness to customer needs.
111) Businesses seldom create separate departments to serve customers with different needs.
112) Yolklore Breakfast Cafes is a nationwide chain with locations all around the United States. Top management at Yolklore believes that customers in different regions have different tastes and that its cafes may face more intense competition in some regions than in others. Therefore, Yolklore's top management gives local managers the freedom to offer local flavors in addition to its traditional entrees, and the ability to decide on a reasonable pricing strategy for its meals. Yolklore typifies a decentralized organization.
113) Management at Leaves of Green, a nationwide vegetarian restaurant chain, believes that its customers value a predictable and consistent level of service and quality. When customers stop at one of its restaurants anywhere in the U.S., they should know what to expect in terms of menu, price and quality. In order to maintain this consistency, Leaves of Green should adopt a decentralized organization.
114) After a report identified low employee morale, managers for Night and Day Inn, Inc. were concerned. Employee responses showed frustration with their inability to deal directly with customers' concerns and complaints. Employees feel that if they were empowered with the authority to make decisions, customer satisfaction would dramatically increase. This illustrates one of the disadvantages of decentralized authority.
115) In the Rock Solid manufacturing plant of the Stone Works Granite Company, a foreman closely supervises her workers. She reports to the shift supervisor who reports to the head of the production department, who then reports to the assistant plant manager, who reports to the plant manager. The plant manager, in turn, reports to a district manager, who then reports to a product group manager, who reports to an assistant vice president of operations, who keeps in close touch with an executive vice president. The layers of management indicate that Stone Works Granite Company is a tall organization.
116) Sage is an experienced manager with excellent communications skills. The workers in her team are highly skilled and capable of doing their work with very little direct supervision. Sage's span of control is likely to be quite broad.
117) The Cairo Company is organized into departments such as finance, production, marketing, data processing, and accounting. Cairo has chosen to departmentalize by function.
118) Top management at Upper Limits, Inc. looks to encourage communication between different departments to stop employees from becoming narrow specialists. The best way to reach these goals is to departmentalize Upper Limit's organization by function.
119) Greener Grass, a business specializing outdoor sprinkler systems, serves several commercial customers, as well as residential customers. As the business expands, Greener Grass's management may want to consider departmentalizing by customer group and then by process.
120) Years ago, Johnny created a successful sportswear company that continues to provide uniforms for clients in the Midwest. As his business started to grow, Johnny added functional departments including a marketing department and an accounting department. But now, he sees that employees who specialized in these areas no longer share knowledge with each other in the same way they did when the business was smaller. As one of Johnny's consultants, you explain that as the company grows taller, it cannot avoid this pitfall, and he should focus on continued functional departmentalization, especially if he supports innovation and learning.
121) Genevieve works in the finance department at the headquarters of a large home improvement retailer. Her main responsibility is to keep an eye on department expenditures and figure out how to cut costs whenever possible. Tyson, the marketing director for the same company, shares information with Genevieve only when he absolutely has to. He finds her inflexible, and not understanding of what it takes to roll out a new product line. Genevieve and Tyson typify a disadvantage of departmentalization.
122) Traditional organizational models such as a line model or a line-and-staff model provide the flexibility demanded in a changing business environment.
123) In a line organization, there are many specialists who serve as advisors and assistants to the managers who make decisions.
124) Small businesses often use a line organization model.
125) Line organizations follow Fayol's traditional management rules.
126) Line managers issue orders, enforce discipline, and adjust the organization as conditions change.
127) In large businesses, a line organization provides firms the ability to respond quickly to a changing environment.
128) Line organizations clearly define the lines of authority and responsibility.
129) Line organizations often experience the problem of employees reporting to more than one boss.
130) A line organization in a large business often suffers from excessively slow lines of communication.
131) Staff personnel perform functions such as production and sales that contribute directly to the primary goals of the organization.
132) In a line-and-staff organization, staff positions are temporary jobs to train new line managers.
133) While staff personnel have the authority to make policy decisions, line personnel have the authority to advise and make suggestions.
134) An advantage of a line-and-staff organization is that it provides people that advise and assist line managers as they perform their jobs.
135) The matrix organization model brings together experts from different functional units of the firm to work on specific projects.
136) The team experts in a matrix organization remain part of the traditional line-and-staff structure.
137) A matrix organization produces an environment that discourages cooperation and teamwork.
138) Team participants in a matrix organization model may report to two managers at one time.
139) A disadvantage of the matrix organization is the temporary nature of the teams.
140) Matrix organizations give managers flexibility in assigning people to projects.
141) Matrix organization structures provide for more efficient use of organizational resources.
142) A recent trend in organization models is the development of cross-functional, self-managed teams of employees who work together on a long-term basis.
143) Cross-functional self-managed teams are groups of employees empowered to work with suppliers and customers to develop new products and give great service.
144) Cross-functional teams serve as advisory committees offering their expertise to line decision makers.
145) Cross-functional teams defy the trend toward customer-driven organizations.
146) Cross-functional teams consist of employees from different departments who work together on a long-term basis.
147) Cross-functional teams avoid involving groups outside of the firm to ensure their plans are not leaked to their competitors.
148) Cross-functional teams work best when the voice of the customer is brought into organizations.
149) Cross-functional teams work well when leadership of the team is shared.
150) Including customers and suppliers on cross-functional teams violates the interests of stockholders.
151) By structuring the company with cross-functional teams, there is a greater chance that a business is more responsive to social trends affecting customer preferences.
152) A matrix team for an aerospace company may consist of a project manager, a finance expert, a marketing specialist, a member of production, and two design engineers.
153) It is strategically not sensible for a firm to consider asking suppliers and customers to join a cross-functional self-managed team that is testing iterations of future products.
154) One disadvantage of the matrix style of organization is that it is more difficult to keep development projects on schedule. The model slows down the time from design to production, and then to market.
155) Due to the competitive nature among companies competing for the same customers, cross-functional teams never consist of individuals from more than one firm.
156) Cross-functional teams that go beyond company boundaries share production information but seldom market information.
157) Top Dog Company is a medium-sized organization with well-defined lines of authority and every employee reports to only one boss. However, the managers at Top Dog complain about not having expert support staff to offer advice. Because of the inefficient long lines of communication, opportunities are slipping through the cracks. These characteristics suggest that Top Dog employs a matrix organization.
158) Erin is an attorney working for Food Innovations, Incorporated. She provides legal advice and assistance to Food Innovations managers. Erin's job would be classified as a staff position.
159) McNulty Manufacturing builds small consumer kitchen products like mixers and toaster ovens. The industry is relatively stable, having few new advances in product development. McNulty should use a line or line-and-staff organizational structure to ensure efficient operations.
160) Jacob was temporarily assigned to work with a team of specialists from various departments to develop a new product, though his usual home is in the engineering department. After the project is completed, Joel will return to his regular position in the engineering department. This arrangement illustrates the use of a cross-functional team.
161) Paper Trail Publishing Company is deliberating the use of cross-functional teams. In order to be most effective, Paper Trail should include customers as members of the teams.
162) Brady developed two VR games. However, he didn't do it all on his own. He hired two programmers, a marketing specialist, and created a small company. He considers himself a pioneer and wants to position his company the same way. He solicits your advice as to how he should structure his organization as he moves forward, and you suggest that he hire a few potential customers to join his team of employees as beta testers. And, you suggest, maybe he should solicit globally. The structure you have described would simulate a line-and-staff organization.
163) Julio is the owner of Party Time, Inc., a small party supply company. The company provides tents, tables, chairs, and related paraphernalia for weddings, Bar and Bat Mitzvahs, graduations, birthdays, and many other celebratory events. As sales have grown, the organization has hired more employees and has departmentalized to more efficiently handle purchasing, sales, service, and accounting. Everyone is still responsible for achieving company goals. Upon seeing Party Time's organization chart, you agree it uses a line organization model.
164) Networking uses communication technology to link organizations, allowing them to work together on common objectives.
165) The Internet makes real-time availability of data possible.
166) Transparency describes the relationship between a firm and its stockholders.
167) Transparency allows two companies to work more efficiently together.
168) Most companies are no longer self-sufficient or self-contained.
169) Networking requires transparency to work most effectively.
170) A virtual corporation refers to a permanent network of firms linked by high-tech communication systems.
171) A virtual corporation is a networked organization made up of replaceable firms that join the network and leave it as needed.
172) Benchmarking requires organizations to compare each organizational function against the best in the world.
173) Competitive benchmarking rates an organization's products and operations against the industry average.
174) Competitive benchmarking compares a company's practices, processes, and products against others in its industry, with the goal of doing it better than the competition.
175) The functions that a company can perform as well as or better than anyone else in the world are known as that firm's optimized capabilities.
176) An organization's core competencies are those functions that the firm performs as well as or better than anyone else in the world.
177) If a particular function is one of a firm's core competencies, it typically performs this function itself rather than outsourcing it to another organization.
178) Assigning various functions that a firm might do for itself to outside organizations is known as competitive allocation.
179) Outsourcing involves assigning various functions to outside organizations.
180) Baby Boomers are often referenced as digital natives.
181) Restructuring involves the redesign of an organization to be more responsive to customers.
182) To better serve customers, many firms are restructuring to empower front-line employees.
183) Technology, like the Internet, has opened up opportunities for firms to sell to new markets.
184) Digital natives, those who grew up with the Internet and other devices, are an important customer group that most businesses want to reach.
185) Introducing change into an organization is an easy task for a manager.
186) Inverted organizations define the role of front-line employees as those workers who follow the orders of top and middle management.
187) Inverted organizations empower employees by adding multiple layers of management and long lines of communication.
188) In an inverted organization, the purpose of management is to assist and support the decisions of employees who work directly with customers.
189) Companies have learned that working transparently through real-time networks has provided competitive advantages in the marketplace.
190) Outsourcing has become commonplace, particularly when organizations want to focus on their core competencies.
191) Once a company has restructured a firm to be more competitive in today's market, it alleviates the need to scan the external environment.
192) The virtual corporation does all its business online with partners considered a permanent part of the network.
193) Farm to Table Foods is a wholesaler serving grocery stores nationwide. Communications technology allows Farm to Table to work closely with its suppliers and customers in real time. Networking allows these organizations to operate more efficiently.
194) Regional monopoly, Southeastern Electric, wants to improve services to customers. Management recently rated the company's processes and products against the results achieved by the world's best at similar processes and products. Southeastern Electric has adopted a policy of international standardization.
195) Superstars Soccer Camp recently outsourced its marketing work. This suggests that management at Superstars does not believe that marketing is one of the firm's core competencies.
196) Last week at Bigbux Financial Services, all advisors assisting over 150 clients each received an email from the VP of Operations. The email stated that every client's investment portfolio should consist of 50% individual stock purchases, 25% bonds, and 25% property. Advisors were ordered to review all client portfolios for compliance to this directive. Clearly, Bigbux is an inverted organization because management directives such as the one described are very common.
197) School Days Centers specialize in helping students with difficulties. With locations around the country, each center consists of a manager and several tutors and counselors. The counselors and tutors have a great deal of flexibility to design programs specifically for individual students. In fact, these first-line employees are considered to be the key people in the organization, and the manager's main function is to assist these employees in matters such as scheduling and securing necessary materials. This type of arrangement suggests that School Days is an inverted organization.
198) Javier is a self-employed patent attorney and it seems like he is always working! Large corporations hire him on an as-needed basis to review prospective ideas and help with securing patents for a variety of inventions including surgical instruments, medicines, and high-tech gadgets. Once he secures a contract, Javier knows approximately how many weeks or months he will work. Javier works for virtual corporations.
199) Milo was confident that baseball fans would fill the seats in his brewhouse if they just knew about the place. After all, he offered convenience, easy walking distance to the local MLB stadium, great local talent for entertainment and several fresh premium craft beers. He uses Twitter and Facebook to connect with potential customers, and offers free wifi for customers. These are worthy strategies for reaching digital natives.
200) Organizations with positive images for performing exceptional service to customers are usually friendly places to work, as well.
201) Organizational culture can produce either a positive or negative impact on an organization.
202) The very best organizations have cultures that emphasize service to others, especially customers.
203) Organizational culture refers to the widely shared values within a corporation that foster unity and cooperation.
204) The informal organization is created by the decisions of top management.
205) While most organizations have a formal organization structure, only poorly managed firms also have an informal organization.
206) A firm's informal organization refers to the structure that identifies the authority, responsibility, and position of people within the organization.
207) The informal organization of a business can help generate creative solutions and inspire teamwork and camaraderie.
208) The formal organization of a firm provides the lines of authority to follow in routine situations.
209) The grapevine refers to the formal channel used for confidential communications between members of top management.
210) An informal organization can be a valuable asset to managers attempting to create an environment of harmony among workers and establish the corporate culture.
211) The informal organization appears as dashed lines on a firm's organizational chart.
212) The informal organization is best suited for decision making on big issues.
213) The key people in a company's grapevine typically have considerable influence in the organization.
214) Successful managers will find the balance between promoting the informal organization and maintaining a formalized structure, as well.
215) Mohammed just started a managerial position at Abundance Bank. In order to be more effective in his new position, he should try to learn who the important people are in Abundance's informal organization.
216) During an afternoon coffee break, Evangeline, a production-line employee at Lilypad Linens, was told by a friend that one of the managers in finance is about to be fired. She is eager to learn if other friends at Lilypad know any more about the situation. This flow of information is an example of Lilypad's grapevine.
217) Rapid Response Security Firm, a company that provides on-site security services for malls and other retail environments, needs to review current procedures used by its professional officers to make certain they are in compliance with new laws. On crucial issues such as this, it is more important to gather information through the informal organization, as opposed to the formal organization.
218) Holden just learned that several people in New Hampshire needed to be treated for food poisoning after eating peanut butter that was produced and jarred in his plant. As he walks the back stairs at the plant, he thinks to himself, "It's time to get the informal organization in on this. We've got to stop this in its tracks!" Holden is taking the right approach to solving this serious problem.
219) Organizing a business begins with
A) acquiring the necessary resources.
B) choosing the best qualified employees.
C) developing an efficient plan of action.
D) determining the work to be done.
220) Dividing the required work among a group of employees is called
A) departmentalization.
B) delegation of responsibility.
C) division of labor.
D) separation of control.
221) Dividing tasks into smaller jobs is called
A) job enrichment.
B) job specialization.
C) departmentalization.
D) division of authority.
222) The process of setting up individual functional units of the business to do specialized tasks is called
A) departmentalization.
B) division of labor.
C) job specialization.
D) delegation of authority.
223) Job specialization is known to
A) minimize delegated authority and responsibility.
B) improve job performance.
C) create work teams and improve resource allocation.
D) establish procedures.
224) Which of the following is an example of a move to reorganize?
A) reducing the labor force within your business
B) revising plans by creating contingency plans
C) managing by objectives and clearing pathways for success
D) developing a way to monitor financial success
225) The proven success of job specialization lies in the fact that
A) it leads to groupthink.
B) it avoids the pitfalls of division of labor, where workers become removed from thinking conceptually about the business.
C) it is a detractor to others who are thinking about entering your industry because it successfully creates barriers to entry.
D) it adds efficiency to the business's operation by identifying tasks that some do better than others.
226) In the Making Ethical Decisions box titled "Would You Sacrifice Safety for Profit?" which of the following statements best expresses the theme of the discussion?
A) In the beginning, company procedures that require value judgments are often too costly. As the business grows, the owner can add ethical procedures to each job.
B) The principles of organization state that the only company objective is to gain profits for the owner(s) or stockholders. If your competitors are cutting corners with safety regulations, you should consider the same.
C) The only way to be profitable is to avoid risk. If new safety equipment becomes available that is applicable to your business, even if it slows productivity, you should adopt it.
D) The corporate culture you create as you begin your service will last a long time. Your workers will adopt your values.
227) As Elisa gets ready to open her new business, she has identified the tasks that need to be accomplished and has assigned employees to each task. This illustrates
A) management departmentalization.
B) division of labor.
C) specialization of priorities.
D) mass production economies.
228) To better organize his lawncare business, Steven is dividing each job into several parts. Mark is the fastest on the riding mower, Manny can rake up every tiny piece left on the lawn, and Steven is a master edger. If he assigns employees to their best strength, what would this action exemplify?
A) job specialization
B) departmentalization
C) delegation of authority
D) economies of scale
229) The concept of ________ suggests that as a firm produces more, the average cost of goods produced goes down.
A) natural growth
B) survival of the fittest
C) cost enhancement
D) economies of scale
230) Henri Fayol and Max Weber are best known for their contributions to
A) production theory.
B) marketing theory.
C) organization theory.
D) finance theory.
231) Organization theorists emerged during the era of mass production, meaning
A) the development of ways to produce a large quantity of product efficiently.
B) the development of ways to purchase raw materials in bulk.
C) the decline in the cost of production due to an increase in the cottage industry.
D) the era when most companies adopted very similar methods of producing goods and services, which led to standardization of organizational design.
232) Fayol's ________ principle states that each worker should report to one, and only one, boss.
A) division of labor
B) unity of command
C) esprit de corps
D) comparative advantage
233) Fayol's ________ principle says that tasks should be divided into areas of specialization.
A) departmentalization
B) comparative advantage
C) division of labor
D) centralization
234) Fayol's ________ principle says that workers' attitudes can create an environment of pride and loyalty within an organization.
A) esprit de corps
B) hierarchy of loyalty
C) unity of command
D) equity
235) ________ believed that managers were trustworthy and companies would do well if employees simply did what they were told.
A) John Keynes
B) Adam Smith
C) Peter Drucker
D) Max Weber
236) Max Weber used the term ________ to describe middle managers whose job was to implement the orders of top management.
A) management
B) autocrats
C) staff personnel
D) bureaucrats
237) A(n) ________ is a visual device that shows relationships among people and divides the organization's work.
A) organization chart
B) Venn diagram
C) corporate tree
D) Gantt chart
238) In Weber's view of a bureaucratic organization, the role of top management is to
A) empower workers and enable them to quickly respond to customer wants.
B) make decisions.
C) develop the rules and procedures needed to carry out the plans of bureaucrats.
D) directly supervise front-line employees to better control operations.
239) In Weber's view of a bureaucratic organization, the organization demands
A) a spirit of pride and loyalty among the workers.
B) cross-functional teams.
C) clearly established rules and guidelines that are to be precisely followed.
D) self-managed teams.
240) The line of authority that moves from the top of a hierarchy to the lowest level is called the
A) chain of logic.
B) chain of command.
C) organizational design.
D) delegation of contingent authority.
241) A(n) ________ consists of one person at the top of the organization and many levels of managers who are responsible to that person.
A) hierarchy
B) oligarchy
C) inverted organization
D) informal organization
242) A(n) ________ is used by an organization to show who is accountable for the completion of specific work and who reports to whom.
A) balance sheet
B) Venn diagram
C) stakeholder outline
D) organization chart
243) In a bureaucratic organization
A) departments communicate with each other on a regular basis.
B) employees follow strict rules and regulations.
C) customer satisfaction is the number one priority.
D) first-line workers are empowered to respond to the needs of customers.
244) One advantage of a bureaucratic organization is that
A) it is very responsive to the wants and needs of customers.
B) there are very few layers of management.
C) it encourages cooperation among different departments within the organization.
D) employees know they are expected to follow the rules and regulations.
245) ________ organizations are characterized by many layers of management and function with well-defined rules and procedures.
A) Matrix
B) Inverted
C) Ordered
D) Bureaucratic
246) Economies of scale
A) are available to small firms but not to large firms due to management inefficiencies.
B) are achieved when a firm reduces its average cost of production as it produces more.
C) can be avoided by purchasing supplies and raw materials in large quantities.
D) help explain the success of small businesses.
247) Max Weber favored which of the following?
A) inverted organizations
B) worker participation in decision making
C) staffing and promotions based on qualifications
D) flat organizations
248) Fayol believed that decision-making authority should remain in the hands of top management
A) in small organizations, but should be delegated to middle and first-line managers in large organizations.
B) in large organizations, but could be delegated to middle and first-line managers in small organizations.
C) in all types and sizes of organizations.
D) only in organizations subjected to significant government regulation.
249) Which of the following statements explains the unity of command principle of management?
A) All workers must share the same goal.
B) Every firm has one strong leader, and everyone should support that individual.
C) Workers can become frustrated and confused if they have more than one boss.
D) All authority should rest with top management, since only top managers carry the responsibility of bad decisions.
250) If companies follow the theories of Fayol and Weber, which of the following scenarios is likely to result?
A) Organization design will benefit by the emergence of quick decision making.
B) Organization design will eliminate systems of hierarchy and chains of command due to their hindrance of esprit de corps.
C) Organizations that grow will develop several layers of management and the time that it takes to make and carry out a decision will increase.
D) There will be a significant reduction of workforce due to specialization and departmentalization.
251) Which of the following statements most closely identifies the problem with adopting Fayol's principles of organization design for contemporary businesses?
A) Leaving some decision-making power to middle management has the effect of minimizing the effort and results that management would put into the other historical principles of organization.
B) These principles create organizations that don't respond quickly to customer needs.
C) The principles of Fayol and Weber hamper a firm's ability to determine if it is profitable.
D) Authority and responsibility quickly become unrelated.
252) Which of the following statements would best summarize Max Weber's views on the role of workers in an organization?
A) Workers should be empowered to do whatever it takes to satisfy the needs of customers.
B) Workers will be promoted within the organization depending upon "who they know," rather than "what they know."
C) Workers should simply follow well-defined procedures.
D) Although top managers must ultimately make the decisions, workers are an important creative resource for a firm, and top management should listen to their ideas.
253) According to Max Weber's views on bureaucratic organizations, Sean's function, as a middle manager at a bureaucratic company, would be to
A) make key operating decisions.
B) evaluate the daily performance of first-line employees.
C) ensure the organization achieves esprit de corps.
D) implement the decisions of top management.
254) At Better Neighbors Fencing, ten employees perform various aspects of the company's work. Two people are in sales; four perform installation; one purchases materials; one does billing; two perform after-sales inspections. This type of organization reflects Fayol's principle of
A) division of labor.
B) equity.
C) unity of command.
D) hierarchy of authority.
255) Joelle, a designer for a business that installs underground sprinkler systems for residential and commercial customers, is experiencing some frustration. She has two bosses, Reid and Bryan, who both share the ownership responsibilities of the business. While Reid is in charge of commercial accounts, Bryan is in charge of residential accounts. Sometimes, however, Reid and Bryan double book Joelle's time, creating irritations and animosity. Since they share managerial responsibility, there is no clear way to decide whose accounts are most important. This type of situation represents a violation of Fayol's ________ principle.
A) division of labor
B) clarity of objective
C) priority of assignment
D) unity of command
256) Cameron, a financial manager at Southeastern Bank, always attempts to treat each subordinate with respect and fairness. Cameron's treatment of employees is an example of Fayol's principle of
A) unity of command.
B) equity.
C) empowerment.
D) order.
257) Josie recently took a job in the marketing department for Beachside Bagels and Bakery. After just a few days on the job, Josie learned that the company has many layers of management, and seems to have a rule to cover almost every situation. These conditions suggest that Beachside Bagels and Bakery is a(n)
A) cross-functional organization.
B) decentralized organization.
C) oligopolistic organization.
D) bureaucratic organization.
258) When Barrett opened his auto body shop, his business plan included a(n) ________ that showed the relationships among employees in his organization and the lines of authority and responsibility.
A) business view map
B) department categorization
C) organization chart
D) operating matrix grid
259) Mountain Top Community College is a multi-district college in the Denver area with four campuses. Each campus has one president, two vice presidents, five deans, 12 department chairs, over 100 faculty members, and several persons in support roles. The presidents from each campus report to four vice chancellors and the vice chancellors report to the chancellor. It is clear that Mountain Top has a well-defined ________.
A) channel of academic culture
B) chain of command
C) responsibility environment
D) bureaucratic reallocation
260) Melissa's company is a bureaucratic organization. Melissa is likely to encounter which of the following conditions?
A) real time decisions
B) cross-functional teams
C) empowerment of first-line employees to better serve customers
D) many layers of management
261) Mason Mills management works hard to ensure that nobody in its organization has more than one boss and all workers are treated with fairness and respect. Additionally, work is divided into areas of specialization so that everyone knows to whom they should report. The management of Mason Mills reflects the ideas and principles of
A) John M. Keynes.
B) Peter Drucker.
C) Karl Marx.
D) Henri Fayol.
262) As a manager of a small clothing store, Archer favors detailed job descriptions, formal rules and regulations, thorough records, and standardized procedures. He also believes that staffing and promotion decisions should be based strictly on the qualifications of the people under consideration. Archer's attitudes suggest that he is strongly influenced by the ideas of
A) Thomas Piketty.
B) Max Weber.
C) Karl Marx.
D) Adam Smith.
263) Which of the following determines the degree of decentralization of a firm?
A) the degree to which lower-level management is empowered to make decisions
B) the chain of command used to follow the flow of authority from top of the hierarchy to the lowest levels
C) the geographical area served by the firm's operations
D) the degree of product standardization desired by the marketplace
264) In a(n) ________ organization, decision-making authority is concentrated at the top level of management.
A) bottom-up
B) decentralized
C) inverted
D) centralized
265) ________ means that decision-making authority is delegated to lower-level managers and employees.
A) Uniformity of authority
B) Decentralized authority
C) Specification of authority
D) Standardized authority
266) The optimum number of subordinates a manager can supervise is referred to as the
A) manager-subordinate ratio.
B) chain of command.
C) employee quota.
D) span of control.
267) The span of control for a manager
A) should never exceed 7 subordinates.
B) is no longer a relevant issue in today's computerized offices.
C) depends on a number of factors, and can vary from one manager to another.
D) varies somewhat from manager to manager, but most managers operate best with a span of control of about 9 employees.
268) Due to more emphasis on empowerment and more talented and better-educated lower-level management, span of control in organizations has ________.
A) increased
B) decreased
C) become an obsolete term in organization design
D) led to tall organizations
269) An organization that consists of many layers of management is referred to as a(n) ________ organization.
A) flat
B) wide
C) tall
D) deep
270) The ________ an organization's structure, the ________ the span of control.
A) flatter; wider
B) flatter; narrower
C) taller; wider
D) taller; flatter
271) An organization with only a few layers of management is known as a(n)
A) tall organization.
B) flat organization.
C) leveraged organization.
D) coordinated organization.
272) The trend today is for large organizations to improve their efficiency in communication and decision making by
A) creating specific rules for everyone to follow.
B) eliminating several layers of management.
C) restructuring into a bureaucratic organization.
D) reducing the span of control for managers.
273) ________ refers to the process of dividing organizational functions (sales, production, accounting/bookkeeping) into separate units.
A) Coordination
B) A chain of command
C) Empowerment
D) Departmentalization
274) The traditional technique used to departmentalize an organization is by
A) function.
B) customer group.
C) geographic area.
D) production process.
275) Which of the following is considered to be a disadvantage of functional departmentalization?
A) There may be a lack of communication among the different departments.
B) Employees must develop skills in depth.
C) The company must achieve economies of scale.
D) Top management has to direct and control department activities.
276) Which of the following is considered to be an advantage of functional departmentalization?
A) Employees begin to identify with their department and its goals rather than with the goals of the entire organization.
B) People in the same department tend to think very differently.
C) Departments are isolated from one another.
D) Employee skills can be developed in depth.
277) Which of the following factors help determine a manager's span of control?
A) the number of global competitors
B) the level of standardization of the work to be done
C) method of accounting for production
D) form of business ownership
278) Organizations that require consistent production standards to help create a high-quality public image would tend to favor
A) centralized authority.
B) an inverted organization.
C) a high level of employee empowerment.
D) flat organizational structures.
279) Today's preference for flat rather than tall organization structures is mainly due to a flat organization's ability to
A) encourage esprit de corps among employees in various departments.
B) increase the cost of labor through economies of scale.
C) respond quickly to customer demands.
D) increase sales through multiple customer contacts by several layers of management.
280) Within its production department, Sooner Manufacturing has shift leaders, supervisors, assistant plant managers, plant managers, product group managers, assistant division managers, division managers, an assistant vice president for production, and a vice president in charge of production. Given its multiple-layer management structure, Sooner Manufacturing is an example of a(n) ________ organization.
A) tall
B) wide
C) cross-functional
D) decentralized
281) Leaf Lovers Garden Centers is a chain of discount gardening stores throughout the United States. Top management realizes that among the different regions of the U.S., there are vastly different climates and soil conditions. Therefore, regional managers are given a great deal of freedom to decide exactly what types of plants, fertilizers, and other items to stock and how to best market these products. Leaf Lovers is an example of a ________ organization.
A) bureaucratic
B) top down
C) free form
D) decentralized
282) Bass Clef Music Company assigns workers to departments based on similar skills. Currently, the company has a marketing department, a production department, a finance department, and a human resources department. This suggests that Bass Clef departmentalizes by
A) process.
B) function.
C) user group.
D) tradition.
283) Watchful Eyes Industries manufactures a multitude of safety products like burglar alarms, smoke detectors, surveillance cameras, and specialty locks. Watchful Eyes doesn't just stick to households, they outfit businesses and government agencies as well. They have found that each market requires a different marketing strategy. Watchful Eyes would probably benefit from departmentalization by
A) function.
B) process.
C) customer type.
D) market opportunities.
284) As the head of the engineering department for her company, Jody works with her team on complex and challenging projects. The level of detail in this work requires Jody to spend a significant amount of time with each team member, providing advice and support. Due to the complexity and time involvement of each project, Jody has a(n) ________ span of control.
A) wide
B) narrow
C) unlimited
D) functional
285) On Air Studios organizes its jobs by activity, such as production, marketing, accounting, and finance. On Air Studios applies ________ departmentalization in order to maximize their efficiency.
A) product
B) customer
C) functional
D) standardized
286) Southeastern Bank organizes its loan operations based on the market served—consumer, small business, or nonprofit organizations. Departmentalization based on ________ allows Southeastern to better serve borrowers with different needs.
A) function
B) geography
C) process
D) customer group
287) Clean Sweep Corporation has seen rapid growth during its first five years. While still relatively small, Clean Sweep is now big enough that Sawyer, the firm's CEO, has decided to organize the firm into functional departments. Sawyer can likely expect which of the following to occur?
A) quick company response to a change in the business environment
B) excellent communications between different departments
C) increase in scope of the performance of functions
D) opportunities for employees to develop their skills in depth
288) International Inns and Conference Centers (IICC), a national chain of professional event centers, utilizes a centralized authority structure. Which of the following provides the most likely explanation for why management at IICC would favor centralized authority?
A) Top management at IICC intends to empower its first-line employees.
B) Top management at IICC wants to improve customer service response time.
C) Top management desires to maintain a uniform image and high-quality service.
D) IICC wants to utilize a cross-functional organization.
289) Bright Electronics has found it needs to reorganize, including a significant trim of its middle management. This action will likely result in
A) acquiring additional firms.
B) flattening the organization and empowering employees, allowing them to get closer to the customer.
C) increasing the size of its traditional departments to handle 24/7 operations.
D) centralizing its decision making to better control its total quality management program.
290) The marketing department manager at Creative Counselors International made a strong push to hire professionals with superior performance records in prior jobs. It didn't take long for these enthusiastic marketers to recognize the many talents within their department. They admired at how alike they were and how they seemed to agree with each other's work styles and ideas. After a while, it became difficult for others in the organization to present to this group. If the idea did not originate within the marketing team, marketers did not give it much credence. This phenomenon is called
A) departmentalization clique.
B) interoffice competition.
C) forward thinking friction.
D) groupthink.
291) Management at Leaves of Green, a nationwide vegetarian restaurant chain, believes that its customers value a predictable and consistent level of service and quality. When customers stop at one of its restaurants anywhere in the United States, they should know what to expect in terms of menu, price and quality. In order to maintain this consistency, Leaves of Green adopted a(n) ________ structure.
A) centralized authority
B) decentralized authority
C) hybrid authority
D) origination authority
292) A ________ organization is characterized by direct two-way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with all people reporting to only one supervisor.
A) matrix
B) cross-functional
C) line
D) line-and-staff
293) ________ are responsible for directly achieving organizational goals.
A) Organizational specialists
B) Line personnel
C) Chain of command managers
D) Staff personnel
294) Employees who perform functions that advise and assist line personnel are known as
A) middle managers.
B) empowered workers.
C) secondary employees.
D) staff personnel.
295) Which of the organization models follows all of Fayol's traditional management rules?
A) line organization
B) line-and-staff organization
C) cross-functional team
D) matrix
296) Staff positions in an organization
A) support and assist the line positions.
B) are superior to line positions.
C) are less well-paid than line positions.
D) are ways to employ past CEOs until they retire.
297) In a ________ organization, specialists from different parts of the organization are brought together on a temporary basis to work on specific projects.
A) matrix
B) line
C) line-and-staff
D) centralized
298) Line-and-staff organizations work well in organizations with
A) operations in high-growth industries.
B) stiff competition.
C) short product life cycles.
D) a relatively unchanging environment.
299) Matrix organizational structures were first developed in
A) Japan.
B) the aerospace industry.
C) the dot-com Internet industry.
D) the chemicals industry.
300) Which of the following was created as a solution to the temporary nature of the matrix structure?
A) line organizations
B) cross-functional self-managed teams
C) line-and-staff organizations
D) network organizations
301) Which of the following describes a group of employees from different departments working together on a long-term basis?
A) focus group
B) mixed function groups
C) cross-functional self-managed teams
D) intrapraneurial teams
302) Cross-functional self-managed teams work best when ________.
A) leadership is shared
B) there are at least two line and staff managers on the team
C) the teams consist of members of only two functional units
D) the academic levels of all members are comparable
303) Which of the following is an advantage of a line organization in a large business?
A) It does not require specialists to advise people along the line.
B) Responsibility and authority are clearly defined.
C) Each worker has several supervisors.
D) It is very flexible.
304) Which of the following positions would be classified as a staff position?
A) an assembly-line worker for a major auto manufacturer
B) the chief executive officer of a small corporation
C) a sales manager for a chain of clothing stores
D) an attorney in the legal department of a manufacturing corporation
305) Which of the following is an advantage of a matrix organization structure?
A) It is much cheaper to staff than other organization models.
B) It provides for efficient use of organizational resources.
C) The project teams are permanent.
D) It is a complex organization structure.
306) Which of the following is true of cross-functional teams?
A) Cross-functional teams are required not to share information across national boundaries.
B) Employees on the teams are frustrated by organizational rules and regulations.
C) Cross-functional teams work best when the voice of the customer is brought into the organization.
D) Cross-functional teams are disbanded once the current project is complete.
307) What is the main difference between a matrix-style organization model and a cross-functional team?
A) The matrix model has a limit on the number of functional units who send an expert to join the team, whereas the cross-functional team does not.
B) The matrix model is a temporary arrangement, whereas the cross-functional team is a more long-term arrangement.
C) The matrix model shares leadership responsibilities within the group, whereas the cross-functional team does not.
D) The matrix model is a more long-term arrangement, whereas the cross-functional team is a temporary arrangement.
308) The organizational structure of the U.S. Army's 1st Infantry Division provides for direct two-way lines of responsibility, authority, and communication running from the top to the bottom. Additionally, each person in the division reports to only one superior. The 1st Infantry Division is clearly an example of a(n)
A) matrix organization.
B) functional organization.
C) line organization.
D) service organization.
309) Corinne, part of the human resources department at a multinational corporation, works with several hundred employees. Her main function is to advise and assist managers in other departments, such as marketing and production, when they make staffing decisions. Corinne's position would be classified as a(n) ________ position.
A) staff
B) line
C) first-line
D) secondary
310) Jarvis is a production engineer at Rubber Ring Tires. He recently joined a team of specialists from other departments in the business, such as marketing and finance. This long-term team assignment has developed several new products. Jarvis enjoys working in this environment, partly because Rubber Ring's management has given the team the freedom and flexibility to make decisions. Recently, outsiders from Freestone's major distributors and suppliers have been included on the team. It appears that Jarvis's team is a(n)
A) interfunctional matrix organization.
B) multidivisional group think-tank.
C) multi-modal product development team.
D) cross-functional self-managed team.
311) Julio is the owner of Party Pros, Inc., a party supply company. The company provides tents, tables, chairs, and related products for weddings, Bar and Bat Mitzvahs, graduations, birthdays, and other celebrations. As sales have increased, the organization has brought on more personnel and departmentalized to more efficiently handle purchasing, sales, service, and accounting. Everyone is still responsible for achieving company goals. Upon seeing Celebration's organization chart, you agree it uses a
A) line organization model.
B) line-and-staff organization model.
C) matrix organization model.
D) cross-functional team organization model.
312) Brady developed two VR games. However, he didn't do it all on his own. He hired two programmers, a marketing specialist, and created a small company. He considers himself a pioneer and wants to position his company the same way. He solicits your advice as to how he should structure his organization as he moves forward, and you suggest that he hire a few potential customers to join his team of employees as beta testers. You also suggest that maybe he should solicit globally. You are suggesting to Brady that he put together a
A) line organization model.
B) line-and-staff organization model.
C) matrix organization model.
D) cross-functional team.
313) Qiang is a project manager at Enigma Industries and is able to borrow specialists from the organization on a regular basis to assist in major projects. After the project ends, the specialists return to their functional units to await new assignments. Enigma Industries utilizes a
A) line organization model.
B) bi-functional organization model.
C) lateral transfer organization model.
D) matrix organization model.
314) ________ is using communications technology and other means to link organizations and allow them to work together on common objectives.
A) Networking
B) Structural linking
C) Functional sharing
D) Strategic planning
315) Which of the following describes an environment in which data is instantly available via the Internet to organizational partners?
A) networking
B) real time
C) virtual business
D) e-commerce
316) Which term describes a company being so open to other companies working with it that electronic information is shared as if the companies were one?
A) online corporations
B) webworking
C) transparency
D) interconnected
317) Which of the following describes a temporary networked organization made up of replaceable firms that join and leave as needed?
A) online corporation
B) benchmark outsourcing system
C) network system
D) virtual corporation
318) The process of rating an organization's practices, processes, and products against the best of the world is known as
A) webworking.
B) outsourcing.
C) benchmarking.
D) core competencies.
319) Which of the following describes the activity of a firm that assigns specific functions, such as accounting or legal work, to other organizations rather than performing these functions themselves?
A) functional sharing
B) outsourcing
C) benchmarking
D) virtual distribution
320) ________ refers to companies headquartered abroad who elect to bring production and manufacturing to domestic subsidiaries.
A) Outsourcing
B) Insourcing
C) Production transition
D) Production transformation
321) ________ refer to those functions that an organization does as well as, or better than, any other organization in the world.
A) Primary functions
B) Comparative strengths
C) Residual functions
D) Core competencies
322) Younger people today are often called ________ because they have never known life without the Internet and cell phones.
A) the high-tech heroes
B) social networkers
C) digital natives
D) electronic eggheads
323) Which of the following are common responses of employees when faced with change?
A) "That's the way we've always done things."
B) "Perhaps I'll be able to get a promotion now."
C) "I'm excited to learn something new."
D) "This should be easy to accept."
324) Which of the following describes the redesigning of an organization so that it can more effectively and efficiently serve its customers?
A) reinventing
B) restructuring
C) radical reorganizing
D) extroverted reorganizing
325) An organization that has contact people at the top and the chief executive officer at the bottom is known as a(n)
A) bureaucracy.
B) oligarchy.
C) improvised organization.
D) inverted organization.
326) Empowering employees to better serve customers requires ________ front-line employees.
A) fewer
B) less training for
C) more support for
D) uniforms for
327) ________ is the term used to describe those functions that a firm can do as well or better than others. It performs these functions in-house, rather than outsourcing.
A) Benchmarks
B) Standard responsibilities
C) Operational requirements
D) Core competencies
328) In today's competitive environment, cost containment is extremely important to survival. Which of the following increases efficiency in the production and distribution of goods?
A) tablets
B) real-time data
C) assembly lines
D) self-managed teams
329) Which of the following statements best describes the evolution of organization design?
A) Companies have evolved to cross-functional teams because line models and line-and-staff models have become too costly to maintain.
B) Most companies are finding that the stages of product development are much slower than in the past because new products are much more complicated than products of several years ago. Matrix models work much better in the current environment.
C) The development of new technology allows for companies to be much more self-contained and able to maintain their competitive advantage due to more privacy.
D) Companies are now part of a vast network of global businesses, and part of a larger system.
330) Companies benefit today from interfirm cooperation. One of the ways they cooperate is through networking. Another way is by seeking technological knowledge and new processes from exemplary firms sometimes outside their own industries. This is called
A) competency capturing.
B) technology swapping.
C) benchmarking.
D) broadening the knowledge base.
331) One of the most difficult management challenges today is managing change. Why is this?
A) Change requires cooperation and an awareness of a need for change.
B) Change requires a lot of bailout money from the government.
C) Change requires decentralization of decision making.
D) Change will invariably result in an inverted organization and management does not want to relinquish its position power in order to make that happen.
332) In an inverted organization, the job of management is to
A) closely monitor employee performance.
B) establish rules and regulations to guide worker behavior.
C) make all of the basic decisions.
D) assist and support front-line people.
333) For an inverted organization to be effective, it requires
A) managers with strong position power.
B) managers who are both technologically savvy and conceptually savvy.
C) better educated, better trained, and better paid employees.
D) a focus on what is best for production.
334) The management of Entertainment Electronics sees itself as a topnotch producer of components used in DVD and Blu-ray players. The outstanding performance of the production department indicates that this activity is one of the firm's
A) fiscal responsibilities.
B) core competencies.
C) benchmark assets.
D) target competitive advantages.
335) Excite Enterprises, a corporation of amusement parks, uses an accounting firm to handle the payroll and tax functions for the company. Using the services of another firm in this manner is an example of
A) outsourcing.
B) functional reassignment.
C) core competencies.
D) benchmarking.
336) Cash Now Industries just hired 500 new workers to build ATMs and self-service check-out systems at its manufacturing plant in Tennessee. The company also plans to hire several hundred more employees by 2021. In the past, these machines were built primarily in Asia. Both shipping costs and quality control were cited as the reasons these companies have elected to change production strategy to
A) competency control.
B) benchmarking.
C) insourcing.
D) outsourcing.
337) Last Stop Shop, a regional discount retailer, carefully watches and compares its operations with the operations of its closest rivals. Last Stop Shop does
A) outsourcing.
B) functional positioning.
C) core competency ranking.
D) competitive benchmarking.
338) OnTrend, a cosmetology trade publication, utilizes the resources of other organizations as needed and business relationships are temporary as well as flexible. OnTrend is a networked organization made up of replaceable firms that join the network and leave it as needed. This unique organization is an example of
A) competitive benchmarking.
B) a virtual corporation.
C) core competency ranking.
D) real-time transparency.
339) Electrolush manufactures a variety of home appliances and has historically produced the components for their products in-house. However, the company now contracts with other firms to produce these components. This strategy of ________ is a current trend among U.S. manufacturers.
A) outsourcing
B) core positioning
C) foreign competency
D) competitive benchmarking
340) Donna is a sales representative for the Eastern Essentials Company. She really enjoys working for Eastern Essentials, because she and others are treated as highly valued employees. Sales reps are given freedom and flexibility in their relationships with customers. While there are only a few layers of management at Eastern Essentials, Donna has found that these managers try their best to support and assist her efforts. Based on Donna's experience, it appears that Eastern Essentials is a(n)
A) bureaucratic organization.
B) inverted organization.
C) tall organization.
D) casual organization.
341) The widely shared values within an organization that provide unity and cooperation to achieve common goals are together known as the
A) normative matrix.
B) predefined group values.
C) ethical system.
D) organizational culture.
342) The ________ of a business firm is the system that details lines of authority, responsibility, and position, similar to the structure on organization charts.
A) matrix reloaded structure
B) formal organization
C) informal organization
D) normative design
343) All organizations have two organizational systems,
A) the command system and the control system.
B) the formal organization and the informal organization.
C) the functioning system and backup system.
D) the primary organization and secondary organization.
344) The ________ is the system of relationships that develop spontaneously as employees meet and form power centers.
A) informal organization
B) bureaucratic structure
C) secondary organization
D) formal organization
345) In open organizations the informal organization can be
A) a hindrance to effective management.
B) an asset that promotes harmony among workers.
C) a roadblock to the corporate culture.
D) part of the formal organization.
346) The ________ is the nerve center of the informal organization.
A) organizational database
B) intranet
C) grapevine
D) company newsletter
347) The informal organization of a business is probably best suited to
A) give workers a clear idea of where they stand in the organization.
B) provide helpful guidelines about how to handle routine problems.
C) provide a mechanism that generates careful reasoned decisions about critical issues.
D) create a feeling of camaraderie among employees and encourage teamwork.
348) A firm's formal organization would be better suited than its informal organization to
A) create an atmosphere of friendship and camaraderie among workers.
B) find answers to critical problems that require logical analysis.
C) find creative solutions to short-term problems.
D) find a way around bureaucratic rules and regulations in order to get things done quickly.
349) Mario recently earned his Ph.D. in biochemistry and has been asked to join a lab at a prestigious university. After a month on the job, he remarked to a graduate student at his former university that the spirit of help and cooperation at the lab was remarkable. He enjoyed going to work each day and sometimes exchanged calls with other lab partners in the evening with ideas to improve each other's experiments. Mario mentioned, "Now I understand why this lab is considered one of the best in the nation!" Mario is referring to
A) the formal organization.
B) the inverted organization.
C) the balanced organization.
D) the organizational culture.
350) Realizing that it was time to invest in an updated information system, the CEO made an announcement in his weekly email to his team: "We are going to shake things up around here. We need to break apart our information system, and start over." Unfortunately, the message translated poorly in the minds of employees. A total shake-up such as this could impact employee morale. Progressive companies today incorporate strategies that continuously embrace
A) formal, symbolic walls that prevent one person from driving change to the detriment of others.
B) a stay the course environment. It is always best to play your game than try to embark on someone else's game.
C) a change-oriented culture.
D) a formal and information organization that assists with change.
351) Devin had worked for his company for several years and was considered to be a politically savvy employee. After earning several promotions, he became the new president of the company. Nina, a longtime colleague of Devin's, had reported to him back when he was a first-line supervisor. She understood how the human side of the organization worked and made certain that she maintained a direct line of communication with Devin. On the company's organization chart, Nina maintained a lower-level position; but, due to her open line of communication with Devin, she was able to successfully push her agenda. The human side of the organization is synonymous with the
A) inverted organization.
B) formal organization.
C) informal organization.
D) benchmark.
352) Raven experienced frustration with her new job at Watchful Eyes Security Systems—that is, until she befriended an assistant, Alyssa, who works in another department. Over lunch in the break room, Alyssa shared with Raven the way things really work at Watchful Eyes. Raven quickly learned that
A) what she learned in her business classes didn't really help her in the real world.
B) an unofficial informal organization exists that she can utilize to help her do her job.
C) organizational culture can be negative.
D) not all businesses have a formal organization.
353) If you are a new employee at Reinhold Industries, Javier is the man to see in the welding department. Though he may not be a manager, he is the person that most of the others in the department look to for advice and assistance. Javier is an important member of the firm's
A) supervisory management.
B) participatory control.
C) informal organization.
D) closet cabinet.
354) One of Carlos's coworkers was recently promoted to a middle management position at their company. He seems to have quickly distanced himself from Carlos and their other coworker, Donovan. In fact, yesterday Donovan described the situation by saying, "He's gone to the dark side." Carlos understands what Donovan means because managers keep themselves removed from other employees, and seldom seriously solicit ideas for improvements or change from those in the trenches. The disadvantage in continuing this type of organizational culture is
A) nobody takes management seriously.
B) the company will have to look outside the firm for new managers.
C) small, incremental improvements rather than radical change will become the norm.
D) the informal organization can hinder effective management.
355) Discuss Max Weber's views on organization theory.
356) What is a matrix organization? What advantages and disadvantages are associated with this type of organization?
357) What is a cross-functional, self-managed team? Who would serve on such teams? Why do cross-functional, self-managed teams often lead to networking?
358) Describe two major issues that are important in organizational design.
359) Explain the difference between a firm's formal organization and its informal organization. Why are both types of organization important to managers?
Mini-Case
Angelica Canizales is the CEO of Mucho Dinero Enterprises. Sales have dropped for four consecutive years and accountants have reported net losses in each of the last two years. Employees appear discouraged and frustrated. Recently, Angelica met with managers from marketing, production, and finance to listen to their views regarding the company's problems. The managers unanimously agreed that the main problem was a lack of communication among the several functional areas of the business. Each manager felt that the firm could increase quality and customer satisfaction with better interdepartmental communication. Angelica also met with marketing and production employees to get their respective opinions on the problems of the firm. One employee from the production department observed, "We have so many layers of management that it takes forever to make decisions." An employee from marketing complained, "This place is so bogged down with rules and regulations that there is no opportunity to be creative." Several employees shared their opinions regarding their bosses. Specifically, one employee said, "My boss never pays attention to my ideas. He just issues orders and expects me to obey them." Angelica decided, after listening to many comments from managers and employees and also suppliers and customers, that the only way to end Mucho Dinero's slide was to completely rethink the firm's structure and to make radical changes in its organization. She presented her ideas to the board of directors, promising to voluntarily resign if her efforts to reorganize did not return the firm to profitability.
360) Employee complaints that there are too many layers of management and too many rules and regulations suggest that Mucho Dinero is a(n)
A) flat organization.
B) bureaucratic organization.
C) inverted organization.
D) wide organization.
361) Angelica's decision to completely redesign Mucho Dinero's organization indicates that she believes the best approach to her firm's problems is
A) competitive benchmarking.
B) flexible departmentalization.
C) restructuring.
D) organizational therapy.
362) Currently, Mucho Dinero is organized into specialized departments such as marketing, finance, production, and personnel. These departments are designed to allow people with similar skills and expertise to work together. This approach is known as ________ departmentalization.
A) functional
B) process
C) interest group
D) task-oriented
363) In order to encourage more interdepartmental communication and cooperation, Angelica is thinking about setting up groups of workers from different departments to work together on a long-term basis. She is even thinking about asking people from some of Mucho Dinero's suppliers, customers, and distributors to join these groups. The type of group that Angelica is considering is known as a(n)
A) focus group.
B) dynamic group.
C) matrix team.
D) cross-functional team.
364) From her discussions with employees, Angelica learned quickly that production workers put their trust in 20-year veteran Willie McClaren. Many people told her that if you wanted something done, Willie was the person to see. Willie appears to be an important part of the
A) decentralized authority.
B) span of control.
C) informal organization.
D) functional structure.