chapter 7 organizing the business...

Chapter 7 Organizing the Business Enterprise1) Organizational structure refers to:

A) determining how best to use available material resourcesB) structuring the necessary resources to complete a particular taskC) the specification of the jobs to be done within a business and how those jobs relate to one anotherD) developing an organizational chartE) determining which employees report to whom

Answer: CDiff: 2 Page Ref: 206

2) Which term is defined as the specification of the jobs to be done and the ways in which those jobs relate toone another?A) chain of commandB) span of controlC) organizational strategyD) organizational determinantsE) organizational structure

Answer: EDiff: 3 Page Ref: 207

3) Roger is analyzing the jobs to be done in his company, their specific overall purpose, and how the jobs relateto each other. Roger is analyzing the company's:A) departmentalizationB) organizational chartC) chain of commandD) organizational structureE) job descriptions

Answer: DDiff: 1 Page Ref: 207

4) The term organizational structure is defined as:A) the relationship between the chain of command in a decentralized organizationB) the specification of the way in which the organization manages the projectsC) the specification of the jobs to be done within a business and the relationship of these jobs with eachother

D) teams of individuals temporarily working on a special project togetherE) the specification of the jobs to be done within a business, and how much decentralization will bepermitted


5) Which of the following elements determine an organization's structure?A) the organization's strategyB) the organization's missionC) the organization's technologyD) the organization's purposeE) all of the above


6) The planned reduction in the scope of an organization's activity isA) distribution.B) resizing.C) downsizing.D) directing.E) none of the above


7) In early 1999, Ford executives announced changes intended to eliminate corporate bureaucracy, speeddecision making, and improve communication and working relationships among people at different levels ofthe organization. These changes are examples of the ________ function of management.A) directingB) controllingC) organizingD) planningE) none of the above


8) Which of the following clarify structure and show employees where they fit into a firm's operations?A) organization chartsB) departmentalizationC) delegationD) mission statementE) responsibility

Answer: ADiff: 1 Page Ref: 207

9) Which of the following was not identified in the text as one of the determinants of organizational structure?A) organizational strategyB) purpose of the organizationC) organizational profitD) organizational missionE) organizational size


10) Which of the following does not account for different organizational structures?A) an institution's strategyB) an institution's profitsC) an institution's missionD) changes in environmental circumstancesE) an institution's purpose

Answer: BDiff: 2 Page Ref: 207

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11) What is the purpose of organization charts?A) portrays the firm's structure and the relationship of employees within the organizationB) used to plan marketing campaignsC) a valuable tool for agencies experiencing a large increase in research and development of newproducts

D) shows the grouping of jobs into logical unitsE) determines which jobs need to be accomplished and who will perform them


12) Which term is defined as a physical depiction of the company's structure showing employee titles and theirrelationship to one another?A) organizational determinantsB) organizational structureC) organizational strategyD) chain of commandE) organization chart


13) What would an organization use to show a new employee his/her position in the firm and its relationship toother positions?A) organizational strategyB) manual of positions and relationshipsC) departmentalization planD) organization chartE) job specialization list


14) What is the meaning of the individual boxes shown on an organization chart?A) each box represents a product or service provided by the organizationB) each box is appropriately labelled as a function or a process in the flow of materials/servicesC) each box represents a job within the companyD) each box represents a group of peopleE) each box indicates a different geographical departmentalization


15) What is the meaning of the solid lines connecting the boxes on an organization chart?A) identifies the relationship to the important staff departmentsB) identifies the products or services available from the organizationC) identifies the level of specialization within the organizationD) identifies the relationship between the processes in the flow of materials/servicesE) identifies the reporting relationship, or chain of command, within the organization


16) How are corporate reporting relationships shown on an organization chart?A) solid lineB) dotted lineC) arrow with the letter RD) arrowE) dashed line with the letter R


17) The chain of command has the following characteristics except:A) it shows the flow of decision-making power in a firmB) when the chain of command is not clear, many different kinds of problems can ariseC) solid lines in an organization chart show the chain of commandD) the chain of command shows both the informal and formal organizational structureE) it shows the reporting relationships within a business


18) Scott is looking at a chart showing the company's organization structure. He notices that there is a solid lineconnecting Judy and Charles to Kara. This means that:A) Kara has more seniority than Judy or CharlesB) all reports created by Judy and Charles must be sent to KaraC) there is a direct telephone line between Judy and Charles and KaraD) Judy and Charles both report to KaraE) the product flows from Judy and Charles to Kara


19) The process of identifying the specific jobs that need to be done and designating the people who willperform them leads toA) mission enhancement.B) job specialization.C) group tasks.D) segmentation.E) departmentalization.


20) Which of the following is an advantage of job specialization?A) Employees can better coordinate their work compared to the work done by others.B) Workers will not need to be trained.C) Workers jobs are easier to learn.D) both A and CE) all of the above


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21) In a Disney animated feature, the job of one cartoonist may be to draw the face of a single characterthroughout the feature. This is an example ofA) mission enhancement.B) job specialization.C) segmentation.D) departmentalization.E) group tasks.


22) Which of the following is a natural part of organizational growth?A) entrepreneurshipB) outsourcingC) job specializationD) retrenchmentE) forming a union


23) Which of the following is a disadvantage of specialization?A) Employees may become bored and careless.B) Employees may become overpaid.C) Employees may derive less satisfaction from their jobs.D) all of the aboveE) both A and B


24) Grouping jobs into logical units is calledA) departmentalization.B) development of the grapevine.C) specialization.D) authorization.E) process management.


25) Determining who will do what is referred to asA) responsibility.B) departmentalization.C) authority.D) accountability.E) specialization.


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26) Determining how people performing certain tasks can best be grouped together is calledA) directing.B) planning.C) specialization.D) departmentalization.E) controlling.


27) The extent to which a larger job is broken down into smaller tasks is referred to asA) departmentalization.B) accountability.C) specialization.D) responsibility.E) authority.


28) Michael is in the process of taking the department's "job" and breaking it down into smaller and smaller"jobs." Michael is working on:A) job specializationB) job classificationC) job analysisD) job matrix structureE) departmentalization

Answer: ADiff: 1 Page Ref: 208-209

29) Karen, a human resources manager, is looking at the specific jobs in her organization. She would like to seewhat tasks each employee is doing. She is primarily investigating:A) chain of commandB) organization chartC) organizational structureD) job specializationE) departmentalization


30) When a business wants to develop an organizational structure, it first has to look at ________ and ________.A) job specialization, departmentalizationB) organization chart, job specializationC) organization chart, chain of commandD) chain of command, departmentalizationE) job specialization, chain of command


31) David has grouped some jobs together in such a way that they can be treated like they were a small business,responsible for its costs, revenues, and profits. David has created a:A) profit centreB) profit and loss centreC) process departmentD) functional departmentE) departmentalized work group


32) The men's clothing department at Sears is an example of a:A) departmentalized work groupB) functional departmentC) profit centreD) process departmentE) profit and loss centre


33) Departmentalization is the process of:A) creating separate revenue centresB) grouping jobs into logical unitsC) creating separate profit centresD) developing an organization chartE) creating chains of command


34) What term identifies a separate unit that is responsible for its own costs and profits?A) profit centreB) centralized departmentC) customer departmentalizationD) specializationE) accounting department


35) Departmentalization can best be explained as:A) the determination of who will do whatB) the duty to perform an assigned taskC) the number of employees managed by a single supervisorD) the grouping of specialized jobs into logical unitsE) the level at which decisions are made


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36) Departmentalization may occur along which of the following lines?A) productB) functionalC) geographicD) customerE) all of the above


37) Which of the following best describes customer departmentalization?A) the firm is divided according to the functions performed in a particular grouping of specialistsB) the company is departmentalized according to the process used to produce goods/services forcustomers

C) the company is divided along the lines of specific goods/services produced for consumersD) the firm is divided according to the production processE) the company is divided according to a specific customer target


38) Which of the following is an advantage of customer departmentalization?A) top managers can determine when resources need to be changed because of increasing demand in aparticular geographic area

B) greater expertise can be developed when specialists of one function work togetherC) top managers can easily see how the production process is workingD) employees will make more money and have more job securityE) the business benefits from efficiencies and customers get better service


39) A bank such as CIBC is likely to use the ________ form of departmentalization.A) processB) functionalC) productD) geographicE) customer


40) What type of departmentalization is used by an organization whose departments are named television sets,radios, etc.?A) processB) geographicC) functionalD) productE) electronic


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41) Hewlett-Packard has recently reorganized to increase customer responsiveness and improve decisionmaking by creating highly autonomous teams. These teams are:A) profit and loss centresB) profit centresC) functional departmentsD) process departmentsE) departmentalized work groups


42) Stores like HMV, and the Blockbuster are most likely to create departments by:A) customerB) geographyC) functionD) processE) product


43) As you enter your favourite store looking for a graduation gift for your cousin, you notice the signssuspended from the ceiling: Men's, Women's, Children's, Infant's. The store is departmentalized by:A) productB) processC) customerD) functionE) geography


44) Customer, product, and geographic departmentalization have the following characteristic in common (hint:choose the best answer):A) they are departments based on similar organizational outputB) they help form organizational chartsC) they are forms of work groupsD) they are profit centres based on customers, product, and geography respectivelyE) they appear in all businesses


45) What type of departmentalization is used by Levi Strauss, which has a division for the U.S. market, one forthe European market, and one for the Pacific Rim market?A) tri-continentalB) productC) geographicD) customerE) functional


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46) What is product departmentalization?A) departments are developed according to the specific task or activity performed thereB) the organization is divided according to the specific good being cratedC) the organization is divided according to the specific area of the country or world which it servesD) the organization is divided according to the process involved to produce a productE) an organization is targeted toward a specific category of customers


47) Which method of departmentalization is used to divide the organization according to the part of the worldor country being served?A) processB) productC) functionD) customerE) geographic


48) The text describes how pickle maker Vlasic has separate departments to transform cucumbers intofresh-packed pickles, pickles cured in brine, and relishes. They have chosen departmentalization by:A) functionB) customerC) geographyD) productE) process


49) A short-run machine shop has arranged all of the drill presses in one area, all the lathes in another, all thesurface grinders in still another, etc. Because of the differences in equipment and operator skills, the machineshop has chosen departmentalization by:A) functionB) productC) customerD) geographyE) process


50) As part of your annual physical, you notice that while at the hospital you'll be sent to X-ray, to Lab for bloodworkups, to another department for stress testing, and so on. You realize that since each test requiresdifferent equipment and worker skills, the hospital is departmentalized by:A) processB) customerC) geographicD) functionalE) product


51) What is geographic departmentalization?A) the organization is divided according to the products being createdB) an organization is targeted toward a specific category of customersC) departments are developed according to the specific task or activity performed thereD) the organization is divided according to the specific good producedE) the organization is divided according to the specific area of the country or world which it serves


52) Which form of departmentalization is a department store such as Sears most likely to use?A) functionalB) processC) customerD) geographicE) production


53) Many international companies have organized themselves by North America, Europe, Pacific, and SouthAmerica divisions. This is ________ departmentalization.A) productB) geographicC) functionalD) processE) customer


54) Bigbucks Bank has separate departments for consumer loans and commercial loans. It is departmentalizedby:A) processB) customerC) geographyD) productE) function


55) In reviewing the organizational structure of your company, you notice that Engineering is subdivided intomechanical, electrical, and software. Additionally, the Accounting Department is subdivided into AccountsPayable, Accounts Receivable, and Asset Management. What type of departmentalization has the companyselected?A) productB) processC) functionalD) customerE) geographic


56) The Ice Cubes Coffee Company has department titles such as accounting, human resource management,marketing and production. What is the form of departmentalization being used at Ice Cubes Coffee?A) productB) functionalC) processD) geographicE) customer


57) Which organizational structure does a company use with departments such as marketing, manufacturing,legal, and human resources?A) processB) customerC) M.M.H.L. structureD) functionalE) product


58) A(n)________ organizational structure is designed to help a company succeed in international marketsA) internationalB) globalC) intercontinentalD) exportE) foreign exchange


59) Which of the following best describes responsibility?A) the number of people supervised by one managerB) the duty to perform an assigned taskC) the liability of subordinates for accomplishing tasks assigned by managersD) the power to make the decisions necessary to complete a taskE) the assignment of a task, responsibility, or authority by a manager to a subordinate


60) Which of the following best describes authority?A) the number of people supervised by one managerB) the liability of subordinates for accomplishing tasks assigned by managersC) the assignment of a task, responsibility, or authority by a manager to a subordinateD) the duty to perform an assigned taskE) the power to make the decisions necessary to complete a task


61) Which of the following best describes delegation?A) the power to make the decisions necessary to complete a taskB) the assignment of a task, responsibility, or authority by a manager to a subordinateC) the liability of subordinates for accomplishing tasks assigned by managersD) the number of people supervised by one managerE) the duty to perform an assigned task


62) ________ is the assignment of a task, responsibility, or authority by a manager to a subordinate.A) ResponsibilityB) DelegationC) AuthorityD) DecentralizationE) Centralization


63) Which of the following best describes accountability?A) the power to make the decisions necessary to complete a taskB) the number of people supervised by one managerC) the liability of subordinates for accomplishing tasks assigned by managersD) the assignment of a task, responsibility, or authority by a manager to a subordinateE) the duty to perform an assigned task


64) Bob has had some problems with some of the tasks that he has assigned to his subordinates. The likeliestproblem might be:A) he has assigned authority without assigning responsibility or accountabilityB) he has assigned responsibility without assigning accountabilityC) he has assigned responsibility and accountability without assigning authorityD) he has assigned authority and responsibility without assigning accountabilityE) he has not assigned authority, accountability or responsibility


65) The duty to perform an assigned task is known as:A) span of controlB) responsibilityC) delegationD) authorityE) accountability


66) Authority is best described as:A) the duty to perform an assigned taskB) the assignment of a task to a subordinateC) the liability of subordinates to accomplish all the tasks assigned by managersD) the power to make the decisions necessary to complete a taskE) the number of people under the supervision of a manager


67) What is responsibility?A) power to make decisionsB) number of people experienced by one managerC) assignment of a task to a subordinateD) number of managers supervising one employeeE) duty to perform an assigned task


68) What term describes a manager's action of assigning a task to a subordinate?A) subordinate empowermentB) accountabilityC) delegationD) authorityE) responsibility


69) What term means the liability of subordinates for accomplishing tasks assigned by managers?A) general liabilityB) authorityC) delegationD) accountabilityE) responsibility


70) Which of the following is an advantage of delegation?A) permits the manager to exercise closer control over subordinatesB) permits the manager to focus on the day-to-day operationsC) easier to punish workers who perform tasks poorlyD) subordinates are not held accountable for tasks assigned by delegationE) increases work skills of subordinates


71) The requirement for a subordinate to show the results of assigned duties to a supervisor is:A) empowermentB) integrationC) delegationD) specializationE) accountability


72) You are the manager of the Marketing Department. In order to get office and art supplies you must submit apurchase requisition. Company policy states that you can only approve up to $500, any more must have thesignature of your boss. Based on this you are lacking in which of the following?A) delegationB) responsibilityC) span of controlD) authorityE) accountability


73) At Roger's company the new products are developed using a team approach. The vice presidents ofproduction, marketing, finance, and engineering meet weekly to cover topics of common interest and newproducts are usually on the agenda. Recently there have been numerous delays in the launching of most ofthe new products and along with the delays has come much finger-pointing. Which of the following items islacking in this situation and probably a major cause for the poor performance?A) responsibilityB) delegationC) accountabilityD) authorityE) span of control


74) Scott's management style is one where he gets his subordinates heavily involved in department activities.After assigning specific tasks he follows up with them to be sure that they are completing the assignedactivities. What is Scott's assigning of activities called?A) responsibilityB) accountabilityC) delegationD) span of controlE) authority


75) Scott's management style is one where he gets his subordinates heavily involved in department activities.After assigning specific tasks he follows up with them to be sure that they are completing the assignedactivities. What is the name for the duty that Scott believes his subordinates owe him?A) responsibilityB) accountabilityC) delegationD) span of controlE) authority


76) The power to make the decisions necessary to complete a task is called:A) empowermentB) accountabilityC) delegationD) authorityE) responsibility


77) In order to ensure standardization at McDonald's, most lower-level decisions must be approved by uppermanagement. Which of the following terms applies to this strategy?A) functional authorityB) wide span of controlC) responsibilityD) decentralized organizationE) centralized organization


78) Centralization is the concentration of authority for most decisions with:A) the supervisorsB) the shareholdersC) the top managersD) the middle managersE) the board


79) What type of decision-making structure is used when upper management must approve lower leveldecisions?A) supervisory check/re-check systemB) centralizedC) decentralizedD) delegationE) authority structure


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80) Which organization delegates certain decision-making authority to lower level managers in order to be moreresponsive to customers' needs?A) quasi-centralizedB) decentralizedC) centralizedD) chain of commandE) span of control


81) What are the circumstances under which decision-making authority is likely to be decentralized?A) a company where the top managers control everythingB) a large organization where top managers cannot personally supervise every detailC) a small owner-operated companyD) when high dollar value decisions are madeE) a company where managers practice little delegation


82) What group has decision-making authority in a centralized organization?A) teamsB) first-line managersC) top managersD) everyone except the top managersE) middle managers


83) Distribution of authority deals with the concepts of ________ and ________ of decisions.A) accountability, centralizationB) decentralization, centralizationC) authority, decentralizationD) responsibility, authorityE) authority, accountability


84) An organization which begins to eliminate management levels in a "downsizing" restructuring is movingtoward:A) a tall, centralized structureB) an informal organizationC) a flat, decentralized structureD) a line organizationE) It is not possible to tell with this information.


85) Span of control refers to:A) the authority for tasksB) decentralization of decision-makingC) accountability to complete tasksD) the number of people managed by one managerE) the responsibility for tasks


86) The term "span of control" refers to:A) the organizational level which makes most of the decisionsB) the number of management levels within the organizationC) the accountability to complete tasksD) the number of people that one supervisor can manageE) the number of specialists in the organization, such as engineers and accountants


87) What type of authority flows up and down the chain of command?A) staff authorityB) line authorityC) specialists' authorityD) reverse vertical authorityE) team authority


88) Which departments are directly linked to the production and sales of specific products?A) staffB) teamC) advisoryD) product specific delegationE) line


89) Which of the following items would tend to support wider spans of control as the best choice?A) subordinates perform diverse tasksB) subordinates perform non routine tasksC) one subordinate's tasks depend on another subordinate's tasksD) subordinates work independently of each otherE) subordinates perform complex tasks


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90) Kara is an accounts receivables clerk in the accounting department. Her boss is Tina who oversees the workof several clerks. The type of authority which Tina has is:A) committee and team authorityB) staff authorityC) command authorityD) line authorityE) direct authority


91) Hillary has just graduated from law school and has taken a position with a legal firm. At first she will assistthe partners but eventually she will handle cases on her own. Hillary is:A) a line member of the firmB) a staff member of the firmC) a committee member of the firmD) a member of the management teamE) a work team member of the firm


92) Line authority covers those people who ________, while staff authority covers those people who ________.A) are in human resource departments, are involved in manufacturing or salesB) advise line managers, advise staff managersC) do things, advise line managersD) advise staff managers, do thingsE) do things, sell things


93) Which of the following would be a staff member in a manufacturing firm?A) painting department chiefB) machine shop foremanC) assembly line workerD) packing and shipping department headE) corporate attorney


94) A corporate attorney is reviewing the marketing department's contract with a new advertising agency. Theterm for the type of authority he has is:A) staff authorityB) committee authorityC) direct authorityD) command authorityE) line authority


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95) Which of the following would be a staff member in a manufacturing firm?A) marketing managerB) human resources managerC) assembly line workerD) machine shop foremanE) purchasing department manager


96) In reviewing the firm's organization chart, Martin, who is an attorney, notices that there is a dotted linebetween him and the V.P. of Sales. This means that:A) Martin has the final decision regarding any legal matters in Sales.B) Martin will assist the V.P. but the V.P. will make the final decision.C) Martin has a line responsibility to the V.P.D) Martin and the V.P. serve on the same committee or work team.E) the V.P. is Martin's boss.


97) Ted, the Human Resources manager, is reviewing a batch of resumes that are in response to a jobadvertisement in a local paper. After selecting six candidates the resumes are sent to the Sales Manager forselection of the candidates to be interviewed. Ted has what kind of authority?A) expert authorityB) command authorityC) direct authorityD) staff authorityE) line authority


98) A group of top managers has been selected to guide the restructuring of the company's business. Because ofthe critical nature of its activities the group has been granted:A) executive authorityB) line authorityC) staff authorityD) committee and team authorityE) temporary authority


99) Work Teams are:A) groups of employees who work together and can plan and organize their own workB) a form of staff authorityC) the same as committeesD) a line departmentE) sports clubs


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100) What do the solid lines shown on an organizational chart mean?A) team authorityB) accountabilityC) staff authorityD) line authorityE) informal organization communications channel

Answer: DDiff: 2 Page Ref: 208, 219

101) The following are either advantages or disadvantages of the functional structure except:A) employees have clearly defined career pathsB) focuses attention on the key activities that must be performedC) increases accountabilityD) conflicts may arise among the functional areasE) no single function is responsible for overall organizational performance


102) Which of the following is NOT an advantage of the functional structure?A) no single function is responsible for overall organizational performanceB) the structure is simple and easy to understandC) employees have clearly defined career pathsD) focuses attention on the key activities that must be performedE) there is little duplication of activities


103) Scott has reviewed the organizational structure of his company and found that there is a lot of functionalspecialization within each area, employees seem to have clearly defined career paths, and that there is littleduplication of activities. He is most likely working in a company with a(n) ________ structure.A) matrixB) conglomerateC) functionalD) divisionalE) international


104) What is an advantage of the functional organization?A) coordinating highly specialized functions is easyB) the functions are performed by experts in their fieldC) the members of the organization speak a foreign languageD) members of the organization report to two or more managersE) the organization is staffed with people who have expert knowledge about the product


105) United Technologies Corp.'s departments include Pratt & Whitney, Carrier Air Conditioning, Otis Elevator,and Flight Systems. UTC has a(n) ________ organizational structure.A) multinationalB) matrixC) divisionalD) functionalE) international


106) Which organizational structure relies on product departmentalization?A) matrixB) projectC) divisionalD) internationalE) functional


107) What term describes a department that looks like a separate business in that it produces and markets its ownproducts?A) profit centreB) decentralizedC) diversified enterpriseD) teamE) division


108) Which organizational structure is typically organized around several divisions?A) divisionalB) internationalC) matrixD) productE) functional


109) The following are either advantages or disadvantages of the divisional structure except:A) activities may be duplicated across divisionsB) a lack of communication among divisions may occurC) focuses attention on the key activities that must be performedD) company politics may affect the allocation of resourcesE) accommodates change and expansion


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110) Which of the following is NOT an advantage of the divisional structure?A) change and expansion are facilitatedB) accountability is increasedC) activities may be duplicated across divisionsD) develops expertise in the various divisionsE) training for top management is encouraged


111) Michael is analyzing the structure of his new employer. It is highly flexible and can readily adapt tochanging circumstances. It also is heavily dependent upon committee and team authority. The firm isprobably using the ________ structure.A) divisionalB) functionalC) conglomerateD) internationalE) matrix


112) At Thermos, interdisciplinary teams have become focused on their target market rather than on the product.This is one of the major advantages of the ________ organization.A) internationalB) conglomerateC) matrixD) functionalE) divisional


113) In which structure will an individual report to two or more managers?A) functionalB) matrixC) divisionalD) duopolyE) conglomerate


114) Which of the following is the best explanation of a matrix structure?A) a matrix divides the organization into divisions, each of which operates as a semi-autonomous unitB) a matrix occurs when one firm purchases another and combines the staff activitiesC) teams are formed in which employees report to two or more managersD) a matrix structure is based upon the geographical area of the worldE) a matrix occurs when the organization is restructuring from a tall to a flat organization


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115) An organization that customarily uses teams of individuals from several departments to work on specialprojects is using a(n) ________ organizational structure.A) decentralizedB) line and staffC) internationalD) matrixE) conglomerate


116) Which organizational structure is used in the following situation? The firm is making a sales proposal whichmust include suggested computer hardware, software, an overall systems design, and estimated costs. Aproject manager is assigned who assembles a group of company specialists from various departments toprepare the proposal to the customer.A) centralized structureB) strategic business unit structureC) product departmentalizationD) geographic departmentalizationE) matrix structure


117) As the world grows increasingly complex and fast paced, organizations continue to seek new forms oforganization that permit them to compete effectively. The following are all examples of the new formsexcept:A) global organizationB) team organizationC) virtual organizationD) boundaryless organizationE) learning organization


118) A ________ organization relies almost entirely on project type teams, with little or no underlying functionalhierarchy.A) teamB) boundarylessC) virtualD) flexibleE) learning


119) A ________ organization has little or no formal structure, with only a handful of permanent employees.A) teamB) learningC) virtualD) boundarylessE) flexible


120) A ________ organization seeks to integrate continuous improvement with continuous employeedevelopment.A) boundarylessB) teamC) learningD) virtualE) flexible


121) Which of the following organizational systems is the part that can be seen and represented in chart form?A) formal organizationB) product organizationC) grapevineD) normal organizationE) informal organization


122) The type of organization within which people do their jobs in different ways and interact with other peoplein ways that do not follow formal lines of communication is called theA) informal organization.B) divisional organization.C) international organization.D) rational organization.E) matrix organization.


123) Everyday social interactions among employees that transcend formal jobs and job interrelationships arecalled theA) gossip structure.B) formal organization.C) process organization.D) informal organization.E) production organization.


124) ________ are groups of people who decide to interact among themselves.A) Staff membersB) Informal groupsC) Line departmentsD) GrapevinesE) Matrix structures


125) The ________ is an informal communication network that runs through an organization.A) grapevineB) intranetC) intrapreneurD) span of controlE) message center


126) Creating and maintaining the innovation and flexibility of a small business environment within the confinesof a large, bureaucratic structure is referred to asA) basic structuring.B) intrapreneuring.C) process organization.D) extrapolating.E) none of the above


127) Compaq Computer has used ________ to create and maintain the innovation and flexibility of a smallbusiness environment within the large, bureaucratic structure.A) formal organizationB) grapeviningC) intrapreneuringD) informal organizationE) entrepreneurship


128) Which of the following represents a disadvantage of informal communications?A) studies have shown that the rumours and gossip on the grapevine are almost always accurateB) managers can easily interrupt the flow of information which the employees may believe to beimportant

C) rumours and distorted or inaccurate information may be flowing through the grapevine at a fast rateD) it flows through the chain of commandE) good news may spread very rapidly through the informal channel


129) Intrapreneuring is:A) the activities of entrepreneursB) seeking ideas for business activities by looking at what competitors are doingC) the process of creating and maintaining the innovation and flexibility of a small business environmentwithin the confines of a large organization

D) used only in small businessesE) selling by employees of their own product or service while on company time or using companyresources


130) Each firm has the same basic organizational elements and thus the same basic structure.Answer: FALSEDiff: 1 Page Ref: 207

131) Organizational structure involves the relationships of jobs within an organization.Answer: TRUEDiff: 1 Page Ref: 207

132) Organizational structure is defined as "the specification of the jobs to be done within a business and howthose jobs relate to one another."Answer: TRUEDiff: 1 Page Ref: 207

133) An organizational structure is influenced by the firm's mission and size, but not by the technology used inthe firm.Answer: FALSEDiff: 1 Page Ref: 207

134) The purpose of a marketing department or accounting department is essentially the same in everyorganization; therefore, organizational structure is standardized within Canadian business firms.Answer: FALSEDiff: 2 Page Ref: 207

135) Most organizations change their structures on a continuing basis.Answer: TRUEDiff: 2 Page Ref: 207

136) The chain of command shown on an organization chart reflects manager and subordinate relationships.Answer: TRUEDiff: 1 Page Ref: 207-208

137) The chain of command refers to the awesome responsibilities borne by managers.Answer: FALSEDiff: 1 Page Ref: 208

138) Job specialization means that an individual job is broken into specific tasks which are then assigned todifferent individuals.Answer: TRUEDiff: 1 Page Ref: 208

139) The two basic building blocks of all business organizations are specialization and departmentalization.Answer: TRUEDiff: 1 Page Ref: 208

140) In small organizations, jobs tend to be unspecialized.Answer: TRUEDiff: 1 Page Ref: 209

141) Since it was first incorporated Ford Motor Co, has maintained its original organizational structureAnswer: FALSEDiff: 1 Page Ref: 207

142) Creating profit centres is a special case of departmentalization.Answer: TRUEDiff: 2 Page Ref: 210

143) The process of grouping together jobs into logical units is known as departmentalization.Answer: TRUEDiff: 1 Page Ref: 210

144) Attempts to separate the work force into departments that are based on anything other than customers havebeen unsuccessful.Answer: FALSEDiff: 2 Page Ref: 210

145) Customer departmentalization tends to make a retail store more efficient and sales people tend to gainexpertise in their specific department.Answer: TRUEDiff: 2 Page Ref: 210

146) Process departmentalization is based upon the steps in producing a good or service.Answer: TRUEDiff: 1 Page Ref: 211

147) Larger firms tend to use several different types of departmentalization for various levels in the organization.Answer: TRUEDiff: 2 Page Ref: 211

148) Responsibility is the power to make decisions for those tasks that you have been given the authority toperform.Answer: FALSEDiff: 2 Page Ref: 213

149) Delegation occurs when a manager assigns a task to a subordinate who then is accountable to the managerfor completion of the task.Answer: TRUEDiff: 1 Page Ref: 214

150) The assignment of a task, a responsibility, and/or authority by a manager to a subordinate is known asdelegation.Answer: TRUEDiff: 1 Page Ref: 214

151) In a centralized organization, most of the decision-making authority is held by upper-level managers.Answer: TRUEDiff: 1 Page Ref: 215

152) Many managers have trouble delegating tasks to others.Answer: TRUEDiff: 1 Page Ref: 214

153) Span of control refers to the type and number of different tasks for which one is responsible.Answer: FALSEDiff: 1 Page Ref: 217

154) Increasing top-heavy bureaucracies is a common goal of decentralization,Answer: FALSEDiff: 1 Page Ref: 216

155) If any line department fails to complete its task, the company cannot sell and deliver finished goods.Answer: TRUEDiff: 2 Page Ref: 219

156) Staff departments aid line departments in making decisions but do not have the authority to make finaldecisions.Answer: TRUEDiff: 2 Page Ref: 219

157) Functional organization structures are used primarily by large, corporate businesses.Answer: FALSEDiff: 2 Page Ref: 221

158) A team organization relies almost exclusively on project type teams with little or no underlying functionalhierarchy.Answer: TRUEDiff: 2 Page Ref: 225

159) In some organizations the matrix structure is temporary and the team is broken up while in other firms thestructure is permanent.Answer: TRUEDiff: 2 Page Ref: 223

160) Global Research Consortium offers research and consulting services to firms doing business in Asia and is anexample of a learning organization.Answer: FALSEDiff: 2 Page Ref: 226

161) A properly structured formal organization is necessary to eliminate the effects of the informal structure,which is based upon social interactions among friends and acquaintances.Answer: FALSEDiff: 2 Page Ref: 227

162) The informal organization is sometimes just as powerful, if not more powerful, than the formal structure.Answer: TRUEDiff: 1 Page Ref: 227

163) Studies of the grapevine network within organizations have shown that the rumours and gossip on thegrapevine are almost always accurate, and that a prudent individual may act wisely based on thatinformation.Answer: FALSEDiff: 2 Page Ref: 228

164) Intrapreneuring is an organizational device primarily suited to small organizations.Answer: FALSEDiff: 2 Page Ref: 228

165) What is an organization chart?Answer: An organization chart is a diagram depicting a company's structure, showing employees where they

fit into its operations.Diff: 2 Page Ref: 207

166) Explain the meaning of the term "organizational structure."Answer: ∙ a tool which shows the specification of the jobs to be done within a business and how those jobs

relate to one anotherDiff: 2 Page Ref: 207

167) Identify the two building blocks of organizational structure.Answer: Specialization and departmentalization.Diff: 2 Page Ref: 208

168) What is specialization?Answer: Specialization is determining who will do what.Diff: 2 Page Ref: 208

169) Identify five forms of departmentalization?Answer: Customer, product, process, geographic, and functional.Diff: 2 Page Ref: 210-211

170) The following organization chart shows the top two levels of management at Ace Products, a manufacturerof copiers, printers, and fax machines.

Based on this organization chart, how is Ace Products departmentalized?Answer: Ace Products appears to be departmentalized by customer.Diff: 2 Page Ref: 210


Based on this organization chart, how is Ace Products departmentalized?Answer: Ace Products appears to be departmentalized by product.Diff: 2 Page Ref: 210


Based on this organization chart, how is Ace Products departmentalized?Answer: Ace Products appears to be departmentalized by geography.Diff: 2 Page Ref: 210

173) What is responsibility?Answer: Responsibility is the duty to perform an assigned task.Diff: 2 Page Ref: 213

174) What is authority?Answer: Authority is the power to make the decisions necessary to complete a task.Diff: 2 Page Ref: 213

175) What is delegation?Answer: Delegation is the assignment of a task, responsibility, or authority by a manager to a subordinate.Diff: 2 Page Ref: 214

176) What is accountability?Answer: Accountability is the liability of subordinates for accomplishing tasks assigned by managers.Diff: 2 Page Ref: 214

177) What is a centralized organization?Answer: In a centralized organization, upper-level managers hold most decision-making authority.Diff: 2 Page Ref: 215

178) What is a decentralized organization?Answer: In a decentralized organization, much of the decision-making authority is delegated to lower levels of

management.Diff: 2 Page Ref: 216

179) Identify two characteristics of flat organizations.Answer: Flat organizations have few layers of management and wide spans of control.Diff: 2 Page Ref: 217

180) Identify two characteristics of tall organizations.Answer: Tall organizations have multiple layers of management and narrow spans of control.Diff: 2 Page Ref: 217

181) What is span of control?Answer: The span of control is the number of people supervised by one manager.Diff: 2 Page Ref: 217

182) Identify the three forms of authority.Answer: Line authority, staff authority, and committee and team authority.Diff: 2 Page Ref: 219-220

183) What type of authority flows up and down the chain of command?Answer: Line authority.Diff: 2 Page Ref: 219

184) What type of authority is held by specialists in law, accounting, and human resource management?Answer: Staff authority.Diff: 2 Page Ref: 219

185) Identify the four basic forms of organizational structure.Answer: Functional, divisional, project and international.Diff: 2 Page Ref: 220

186) What is a team organization?Answer: A team organization relies almost exclusively on project-type teams, with little or no underlying

functional hierarchy.Diff: 2 Page Ref: 225

187) Is the informal organization positive or negative?Answer: The informal organization can be both positive and negative.Diff: 2 Page Ref: 227

188) What is the grapevine?Answer: The grapevine is the informal communication network that runs through an organization.Diff: 2 Page Ref: 228

189) What is the informal organization?Answer: The informal organization is the network of everyday social interactions among company employees

that is unrelated to the firm's formal authority structure.Diff: 2 Page Ref: 227

190) What is intrapreneuring?Answer: Intrapreneuring is the process of creating and maintaining the innovation and flexibility of a small

business environment within the confines of a large organization.Diff: 2 Page Ref: 229

191) What is the purpose of developing an organization chart? How are these charts used?Answer: ∙ to illustrate to employees how their job fits into the organization

∙ they are used to show the chain of command (authority) and flow of formal communicationDiff: 2 Page Ref: 207-208

192) What are the two basic building blocks of organizational structure?Answer: ∙ specialization: determining who will do what

∙ departmentalization : determining how people performing certain tasks can best be grouped togetherDiff: 1 Page Ref: 208

193) Describe the five most common methods of departmentalization within an organization. Identify theadvantages of each method.Answer: ∙ customer: departmentalization according to types of customers likely to buy a given product

∙ product: departmentalization according to the products being created∙ process: departmentalization according to the production process used to create a good or service∙ geographic: departmentalization according to the area of the country or world supplied∙ functional: departmentalization according to functions or activities

Diff: 2 Page Ref: 210-211

194) Discuss the three-step process used to establish the decision-making hierarchy.Answer: ∙ Assigning tasks: determining who can make decisions and specifying how they should be made

∙ Performing tasks: implementing decisions that have been made∙ Distributing authority: determining whether the organization is to be centralized or decentralized


195) Why should a manager maintain equilibrium between authority and responsibility?Answer: ∙ with authority comes responsibility

∙ you cannot hold an employee responsible for a task without giving her/him the authority to use thefirm's resources to carry out the tasks

Diff: 2 Page Ref: 213

196) What elements work together to determine an organization's structure? What types of circumstance affectthis structure?Answer: ∙ elements working together include an organization's purpose, mission and strategy

∙ size, technology and changes in the environmental circumstance affect an organization's structureDiff: 2 Page Ref: 207

197) Explain what is meant by "span of control." What factors need to be considered when establishing the span ofcontrol for a manager?Answer: ∙ span is the number of people managed by one supervisor/manager

∙ factors which determine this are: ∙ employees' abilities ∙ the supervisor's managerial skills ∙ similarity and simplicity of tasks ∙ extent to which tasks are interrelated


198) Compare and contrast the three forms of authority: line, staff, and committee and team authority.Answer: ∙ line authority is based on chain of command and operates vertically?a telling function

∙ staff authority is based on expertise and flows horizontally?an advising function∙ committee authority is based on granting power for a specified period to perform a specialized task


199) Describe the purposes of a learning organization.Answer: ∙ main purpose is to integrate continuous improvement with employee learning and development,

other purposes include: ∙ facilitating life long learning ∙ improving quality ∙ continuous improvement ∙ performance measurements


200) Discuss the advantages and disadvantages of a functional structure.Answer: ∙ see table 7.1 on page 239Diff: 2 Page Ref: 221

201) Describe the divisional structure and the advantages and disadvantages for companies. Also give anexample of a real company who uses this type of structure.Answer: ∙ a divisional structure allows a firm to be divided into segments each of which then operates and

makes decisions on their own∙ e.g., General Motors, Chevrolet, Pontiac∙ see Table 7.2 on page 240


202) As the world grows increasingly complex and fast paced, organizations continue to seek new forms oforganization that permit them to compete effectively. Identify and describe some of these new forms.Answer: ∙ boundaryless organization: one in which traditional boundaries and structures are minimized or

eliminated altogether∙ team organization: relies almost exclusively on project-type teams, with little or no underlyingfunctional hierarchy∙ virtual organization : has little or no formal structure∙ learning organization: works to integrate continuous improvement with continuous employeelearning and development


203) What should be the reaction of a manager who discovers the existence of a grapevine in the organization?Answer: ∙ probably do nothing!

∙ a good manager, with good people skills, can use it to his/her advantage in their informational andinterpersonal role.


204) What factors exist to cause the grapevine to work effectively?Answer: ∙ a relaxed management style

∙ a decentralized organization∙ a warm working environment∙ a motivated employee group∙ shared decision making


205) Why is intrapreneuring important to the firm and the individual worker?Answer: ∙ it creates an innovative environment within the firm and gives employees a sense of responsibility

and satisfaction when they can be flexible in determining how a task should be doneDiff: 3 Page Ref: 229

chapter 7 organizing the business...

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