Organizational Behavior, Design, and Change, 6e (Jones) Chapter 1 Organizations and Organizational Effectiveness 1) Studying organizations is relatively easy

because they are tangible. That is, we can see and touch them. Answer: FALS !i"": 1 #age $e": 1 L%: 1&1 ') %ne o" the di""iculties in studying organizations is that they are intangible. (n other words, we cannot touch or see them. Answer: T$) !i"": 1 #age $e": 1 L%: 1&1 *) ntre+reneurshi+ is the +rocess by which +eo+le recognize o++ortunities to structure organizations more e""iciently. Answer: FALS !i"": 1 #age $e": ' L%: 1&1 ,) Amazon.com was created to satis"y the need to buy boo-s over the (nternet. Answer: T$) !i"": 1 #age $e": * L%: 1&' .) The degree o" s+ecialization in small com+anies tends to be lower than that o" large com+anies. Answer: T$) !i"": ' #age $e": , L%: 1&* /) Transaction costs are the costs associated with negotiating, monitoring, and governing e0changes between +eo+le. Answer: T$) !i"": 1 #age $e": / L%: 1&' 1) The environment in which an organization o+erates is a ma2or source o" uncertainty. Answer: T$) !i"": 1 #age $e": / L%: 1&.

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3) %ne reason that organizations e0ist is so that they can e0ert +ower and control. Answer: T$) !i"": 1 #age $e": / L%: 1&1 4) %ne reason "or starting an organization is to create 2obs "or individuals. Answer: FALS !i"": * #age $e": / L%: 1&1 15) conomies o" sco+e are cost savings achieved when an organization manu"actures +roducts in large volumes. Answer: FALS !i"": 1 #age $e": / L%: 1&1 11) conomies o" scale are cost savings achieved when an organization manu"actures +roducts in large volumes. Answer: T$) !i"": 1 #age $e": / L%: 1&1 1') Transaction costs are the costs associated with negotiating, monitoring, and governing e0changes between +eo+le. Answer: T$) !i"": 1 #age $e": / L%: 1&1 1*) %rganizational structure is used to control and coordinate +eo+le6s actions. Answer: FALS !i"": ' #age $e": 1 L%: 1&' 1,) %rganizational theory is +rimarily concerned with how an organization can out+er"orm its com+etitors. Answer: FALS !i"": ' #age $e": 1 L%: 1&' 1.) %rganizations that o+erate in the same environment will always have similar organizational cultures. Answer: FALS !i"": ' #age $e": 3 L%: 1&'

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1/) %rganizational structure can be sha+ed by organizational culture. Answer: T$) !i"": ' #age $e": 3 L%: 1&' 11) The e0ternal resource a++roach evaluates an organization6s ability to obtain scarce resources. Answer: T$) !i"": ' #age $e": 1. L%: 1&, 13) The internal systems a++roach considers cor+orate culture. Answer: T$) !i"": ' #age $e": 1/ L%: 1&* 14) The internal systems a++roach evaluates an organization6s ability to obtain resources. Answer: FALS !i"": ' #age $e": 1/ L%: 1&* '5) The guiding +rinci+les that the organization "ormally states in its annual re+ort is called the mission statement. Answer: FALS !i"": ' #age $e": 13 L%: 1&* '1) %+erative goals give em+loyees direction. Answer: T$) !i"": ' #age $e": 14 L%: 1&* '') An organization6s mission as stated in +ublic documents is an o""icial goal. Answer: T$) !i"": ' #age $e": 13 L%: 1&* '*) %+erative goals can be either short or long term in nature. Answer: T$) !i"": ' #age $e": 14 L%: 1&* ',) %ne o" the main +roblems with 7ero06s structure was that the decentralized structure was not very e""ective "or creating new and innovative +roducts Answer: T$) !i"": ' #age $e": '/ L%: 1&*

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'.) (n the 7ero0 case, 8ulcahy6s structural changes were the +rimary reason "or the success"ul turnaround Answer: T$) !i"": ' #age $e": '/ L%: 1&* '/) 99999999 is a tool used by +eo+le to coordinate their actions to obtain something they desire or value. A) ntre+reneurshi+ :) An organization ;) A hierarchy !) Shareholder wealth Answer: : !i"": 1 #age $e": ' L%: 1&1 '1) 99999999 is recognizing the o++ortunity to satis"y a need and collecting resources to meet that need. A) %rganizational theory :) %rganizational behavior ;) ntre+reneurshi+ !) Strategic management Answer: ; !i"": ' #age $e": ' L%: 1&1 '3) <e""rey :ezos saw the o++ortunity to sell boo-s over the (nternet, which was growing. This is an e0am+le o" 99999999. A) organizational theory :) managerial e0+ertise ;) education !) entre+reneurshi+ Answer: ! !i"": 1 #age $e": ' L%: 1&1 '4) =hich o" the "ollowing is not a stage in the value creation +rocess> A) (n+ut :) ;onversion ;) %ut+ut !) 8ar-et Answer: ! !i"": ' #age $e": * L%: 1&1

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*5) An organization6s in+uts include all except 99999999. A) "inished goods :) raw materials ;) money and ca+ital !) in"ormation and -nowledge Answer: A !i"": 1 #age $e": * L%: 1&1 *1) (n the conversion +rocess, an organization creates value by a++lying all except 99999999. A) machinery :) raw materials ;) com+uters !) human s-ills Answer: : !i"": 1 #age $e": * L%: 1&1 *') An organization6s out+ut include all except 99999999. A) "inished goods :) services ;) su++liers !) value "or sta-eholders Answer: ; !i"": 1 #age $e": * L%: 1&1 **) An organization: A) "acilitates the division o" labor. :) increases transaction costs. ;) has little +ower over individuals. !) is a tangible entity. Answer: A !i"": ' #age $e": , L%: 1&1 *,) =hich o" the "ollowing is not a reason "or creating an organization> A) To achieve economies o" scale :) To manage the e0ternal environment ;) To +rovide +eo+le with 2obs !) To e0ert +ower and control to achieve goals Answer: ; !i"": ' #age $e": / L%: 1&1

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*.) The organization6s environment includes all except 99999999. A) distributors :) com+etitors ;) su++liers !) raw materials Answer: ! !i"": 1 #age $e": / L%: 1&. */) =hen an organization shares resources across several +roducts and tas-s, it is able to: A) minimize transaction costs. :) ma0imize transaction costs. ;) achieve economies o" scale. !) achieve economies o" sco+e. Answer: ! !i"": ' #age $e": / L%: 1&1 *1) :ecause a toy ma-er sells a large amount o" toys, it is able to ac?uire +lastic +roducts to ma-e the toys at a chea+er +rice than the com+etition. The toy ma-er is ta-ing advantage o": A) economies o" scale. :) economies o" sco+e. ;) organizational culture. !) organizational design. Answer: A !i"": ' #age $e": / L%: 1&1 *3) 99999999 are cost savings that result when goods and services are +roduced in large volume on automated +roduction lines. A) conomies o" sco+e :) conomies o" scale ;) (n+uts !) %ut+ut Answer: : !i"": 1 #age $e": / L%: 1&1

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*4) A large restaurant chain decides that they are going to start serving brea-"ast in order to better utilize the e0+ense e?ui+ment that they +urchased to coo- with. They are ta-ing advantage o": A) economies o" sco+e. :) economies o" scale. ;) transaction costs. !) out+uts. Answer: A !i"": ' #age $e": / L%: 1&1 ,5) 99999999 are the costs associated with negotiating, monitoring, and governing e0changes between +eo+le. A) conomies o" scale :) conomies o" cost ;) Transaction costs !) Salaries Answer: ; !i"": 1 #age $e": / L%: 1&1 ,1) =hen local store managers attem+t to s+ot trends and changes so they can res+ond to customer needs, they are: A) using large&scale technology. :) e0erting +ower and control. ;) managing the e0ternal environment. !) increasing division o" labor. Answer: ; !i"": ' #age $e": / L%: 1&. ,') 99999999 is the study o" how organizations "unction and how they a""ect and are a""ected by the environment in which they o+erate. A) %rganizational behavior :) %rganizational theory ;) %rganizational culture !) %rganizational structure Answer: : !i"": ' #age $e": 1 L%: 1&'

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,*) The +rocess o" selecting organizational structure and organizational culture is 99999999. A) organizational design :) organizational behavior ;) organizational domain !) organizational environment Answer: A !i"": ' #age $e": 4 L%: 1&' ,,) 99999999 is the "ormal system o" tas- and authority relationshi+s. A) %rganizational theory :) %rganizational behavior ;) %rganizational structure !) %rganizational culture Answer: ; !i"": ' #age $e": 1 L%: 1&' ,.) At 8icroso"t, to control scientists and ma-e use o" their talents, :ill @ates +ut them in teams. This was a change in 99999999. A) culture :) strategy ;) theory !) structure Answer: ! !i"": ' #age $e": 3 L%: 1&' ,/) %rganizational culture: A) remains the same once it is develo+ed. :) controls behavior within an organization. ;) is sha+ed +rimarily by an organization6s environment. !) is the "ormal system o" tas- and authority relationshi+s. Answer: : !i"": * #age $e": 3 L%: 1&' ,1) Finding new and im+roved ways o" using resources and ca+abilities to increase value is called: A) organizational design. :) environmental analysis. ;) organizational change. !) environmental scanning. Answer: ; !i"": * #age $e": 4 L%: 1&*

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,3) The +rocess by which organizations move "rom their +resent state to some desired "uture state is called 99999999. A) restructuring :) scanning the environment ;) organizational change !) transaction analysis Answer: ; !i"": ' #age $e": 4 L%: 1&* ,4) ;oca&;ola ta-es +ride in a long&term commitment to em+loyeesA #e+si is very +olitical and com+etitive. These are di""erences in 99999999. A) culture :) structure ;) theory !) design Answer: A !i"": ' #age $e": 4 L%: 1&' .5) The means an organization uses to achieve its goals are: A) organizational structure and organizational design. :) organizational culture and organizational design. ;) organizational structure and organizational culture. !) organizational theory and organizational culture. Answer: ; !i"": * #age $e": 4 L%: 1&' .1) =hich o" the "ollowing is not an advantage o" organizational design> A) (t can hel+ a com+any manage diversity. :) (t can increase organizational e""iciency. ;) (t can hel+ an organization control its environment. !) (t is a good a++roach "or evaluating organizational e""ectiveness. Answer: ! !i"": * #age $e": 4 L%: 1&' .') %rganizational design is: A) a way to measure organizational e""ectiveness. :) a way to measure organizational e""iciency. ;) a source o" com+etitive advantage. !) im+ortant only to large com+anies. Answer: ; !i"": ' #age $e": 4 L%: 1&*

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.*) %rganizational design: A) consists o" two com+onentsstrategic management and organizational behavior. :) can hel+ a com+any control its environment. ;) reduces innovation. !) does not allow "or contingencies. Answer: : !i"": ' #age $e": 4 L%: '&* .,) 99999999 is a means o" im+lementing strategy. A) %rganizational theory :) ntre+reneurshi+ ;) %rganizational design !) %rganizational missions Answer: ; !i"": ' #age $e": 4 L%: 1&* ..) =hich o" the "ollowing are contingencies that cause the organization to "ace uncertainty> A) %rganizational design and organizational +rocesses :) The technological environment and organizational design ;) The technological environment and organizational +rocesses !) The organizational environment and organizational design Answer: ; !i"": ' #age $e": 11 L%: 1&. ./) 99999999 is the ability o" one com+any to out+er"orm another because its managers are able to create more value "rom the resources at their dis+osal. A) Strategy :) ;om+etitive advantage ;) %rganizational design !) 8anagerial e0+ertise Answer: : !i"": ' #age $e": 1' L%: 1&. .1) The s+eci"ic +attern o" decisions and actions that managers ta-e in order to use core com+etences to achieve a com+etitive advantage is called 99999999. A) strategy :) change management ;) organizational design !) the organization6s mission Answer: A !i"": ' #age $e": 1' L%: 1&*

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.3) !i""erences in race, gender, and national origin o" organizational members +ertain to 99999999. A) organizational design :) e""iciency and innovation ;) diversity !) com+etitive advantage Answer: ; !i"": 1 #age $e": 1' L%: 1&* .4) =hen organizational design is +oor, 99999999. A) an organization will decline :) managers usually increase $B! e0+enses ;) bureaucratic costs are lower !) managers usually increase the number o" +roducts o""ered Answer: A !i"": ' #age $e": 1* L%: 1&* /5) =hich o" the "ollowing a++roaches is concerned with measuring +roductivity> A) 0ternal resource :) (nternal system ;) Technical !) Transaction cost Answer: ; !i"": ' #age $e": 11 L%: 1&, /1) The 99999999 is a method that allows managers to evaluate how e""ectively an organization manages and controls its e0ternal environment. A) e0ternal research a++roach :) internal research a++roach ;) technical a++roach !) transaction a++roach Answer: A !i"": ' #age $e": 1/ L%: 1&, /') The 99999999 is a method that allows managers to evaluate how e""ectively an organization "unctions and o+erates. A) e0ternal research a++roach :) internal research a++roach ;) technical a++roach !) economic a++roach Answer: : !i"": ' #age $e": 1/ L%: 1&,
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/*) (" a com+any uses the e0ternal resource a++roach, which o" the "ollowing goals will it consider most im+ortant> A) (ncreasing the rate o" +roduct innovation :) $aising stoc- +rice ;) $educing con"lict !) $educing +roduction costs Answer: : !i"": * #age $e": 1/ L%: 1&, /,) =hich o" the "ollowing a++roaches is most concerned with the conversion stage o" the value creation +rocess> A) 0ternal resource :) (nternal system ;) Strategic grou+ !) Technical Answer: ! !i"": ' #age $e": 11 L%: 1&, /.) (n the late 1445s, what did the toy ma-er 8attel do in res+onse to what it +erceived were changing consumer needs> A) Tried to become a ma2or +layer in the com+uter game mar-et :) $e&"ocused its e""orts on classic toys, such as :arbie ;) Tried to ac?uire more o" the game mar-et through lower +rices !) ntered the retail arena Answer: A !i"": * #age $e": 11 L%: 1&. //) A com+uter manu"acturer was concerned about its e""ectiveness, so it eliminated a level in its hierarchy and decentralized decision&ma-ing authority. =hich o" the "ollowing a++roaches is it using to evaluate organizational e""ectiveness> A) 0ternal resource :) (nternal system ;) Technical !) Transaction cost Answer: : !i"": ' #age $e": 1/ L%: 1&,

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/1) =hich o" the "ollowing a++roaches considers organizational culture> A) 0ternal resource :) (nternal system ;) Technical !) Transaction cost Answer: : !i"": ' #age $e": 11 L%: 1&, /3) 99999999 means develo+ing modern +roduction "acilities using new in"ormation technologies that can +roduce and distribute +roducts in a timely and cost&e""ective manner. A) ""iciency :) ;ontrol ;) (nnovation !) %rganizational design Answer: A !i"": ' #age $e": 1. L%: 1&' /4) 99999999 means develo+ing an organization6s s-ills and ca+acities so that the organization can discover and ta-e advantage o" new +roducts and +rocesses. A) ""iciency :) (nnovation ;) ;ontrol !) %rganizational theory Answer: : !i"": 1 #age $e": 1. L%: 1&' 15) 99999999 means having control over the e0ternal environment and having the ability to attract resources and customers. A) ""ectiveness :) 8anagerial e0+ertise ;) ;ontrol !) %rganizational strategy Answer: A !i"": ' #age $e": 11 L%: 1&, 11) The Ford 8otor case best illlustrates 99999999. A) how di""erent cultures can both succeed :) how not managing change can negatively im+act the organization ;) how a structure that is tall and ine""icient can cause an organization to decline. !) how im+ortant it is to restructure in the global economy Answer: ; !i"": * #age $e": 1, L%: 1&*
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1') The case, C8attel6s $oc-y $oadC best illlustrates 99999999. A) how mergers and ac?uisitions are not always the best strategy :) how o+erative goals can change over time ;) economies o" Scale in +roduction. !) the technical a++roach to measurement Answer: A !i"": * #age $e": 11 L%: 1&. 1*) 99999999 goals +rovide legitimacy to the organization. A) %+erative :) #ro"it ;) Long&term !) %""icial Answer: ! !i"": ' #age $e": 14 L%: 1&* 1,) The Southwest Airlines case illustrates 99999999. A) how a structure that results in lower costs can be a com+etitive advantage :) how Derb Eeheller created a C"un +lace to wor-C ;) the contingency a++roach to organizational design !) Dow economies o" sco+e can ma-e an airline +ro"itable Answer: A !i"": * #age $e": 13 L%: 1&, 1.) 99999999 goals +rovide em+loyee direction. A) %+erative :) #ro"it ;) Long&term !) %""icial Answer: A !i"": ' #age $e": 14 L%: 1&* 1/) %+erative goals: A) +rovide legitimacy to the organization. :) "ocus only on the long term. ;) "ocus only on the short term. !) can be used to measure how well an organization is managing its environment. Answer: ! !i"": * #age $e": 14 L%: 1&*

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11) $educing time to mar-et is: A) an o""icial goal. :) an o+erative goal. ;) a goal using the e0ternal resource a++roach. !) a goal using the technical a++roach. Answer: : !i"": * #age $e": 14 L%: 1&* 13) List "our e0am+les o" Corganizational in+uts.C Answer: $aw materials 8oney and ca+ital Duman resources (n"ormation and -nowledge ;ustomers !i"": ' #age $e": , L%: 1&1 14) List two e0am+les o" what an organization uses to trans"orm in+uts and add value. Answer: 8achinery ;om+uters Duman s-ills and abilities !i"": ' #age $e": , L%: 1&1 35) List "our e0am+les o" Corganizational out+uts.C Answer: Finished @oods Services !ividends Salaries Falue "or sta-eholders !i"": * #age $e": , L%: 1&1 31) List "our e0am+les o" "actors or entities im+acting the organization6s environment. Answer: customers shareholders su++liers distributors @overnment ;om+etitors !i"": ' #age $e": , L%: 1&1

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3') A large com+any was success"ul, but has been losing mar-et share and laying o"" wor-ers. #roduct develo+ment has been slow. =hat could be the source o" the +roblem, and what can be done to resolve it> Answer: (t is li-ely that the organization has neglected organizational design. (ts structure and culture may have wor-ed well in the +ast, but both culture and structure need to be continually evaluated. The organization needs to reevaluate both its structure and culture. To s+eed u+ +roduct develo+ment time, the organization could eliminate levels in the hierarchy and decentralize decision&ma-ing authority. (n addition, the structure can be designed to create cross& "unctional teams to increase innovation and "le0ibility. (n addition to changing the structure, the organization can "oster a culture that encourages innovation and ris- ta-ing. !i"": ' #age $e": 4 L%: 1&' 3*) ;om+are and contrast how structure +layed a role in the successG"ailure o" 8ichael !ell at !ell ;om+uter versus the Steven <obs at A++le com+uter. Answer: This case shows students how im+ortant the +ro+er structure is in organizing a com+any. <obs main mista-e was that he did not want a management role, yet he Cstuc- his "ingersC in others6 de+artments as the com+any grew. Dis management style seemed arbitrary and overbearing, and he o"ten +layed "avorites between em+loyees and teams. (n short, his structure didn6t wor- because he created a climate o" distrust and unhealthy com+etition between teams. 8ichael !ell, on the other hand, was able to create more o" a +artici+ative management a++roach in which he truly involved the em+loyees in the decision ma-ing +rocess. Although also very hands&on, he recognized the im+ortance o" team camaraderie and trust. (n addition, he recognized that a growing com+any needed e0+ert managers. The -ey to this ?uestion is to ma-e sure students understand that management is a se+arate "ield. ntre+reneurs may have good ideas, but structuring com+anies and using resources e""ectively involves an entirely se+arate s-ill&set. !i"": ' #age $e": 15 L%: 1&'

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3,) Hou are a consultant to ;om+any 7. The ; % insists that e""ectiveness must be evaluated by an increase in stoc- +rice to satis"y stoc-holders. The mar-eting vice +resident insists that the main goal is to reduce the time to bring +roducts to the customer. The manu"acturing vice +resident states that costs should be the -ey "ocus o" the organization. =hat a++roach is each manager using to evaluate organizational e""ectiveness, and what can this organization do to ensure that e""ectiveness is +ro+erly evaluated> Answer: @oals will o"ten con"lict, but the three ma2or tas-s o" management are control, innovation, and e""iciency. ach o" the three managers is evaluating e""ectiveness on one o" these three tas-s. The ; % is using the e0ternal resource a++roach, which measures an organization6s ability to control the environment. The mar-eting manager is using an internal systems a++roach, which is concerned with innovation. The manu"acturing manager is using a technical a++roach, which is concerned with e""iciency. (t is understandable why each manager uses their res+ective a++roachA a"ter all, those are the goals that the mangers are li-ely to be evaluated on. Dowever, it is very im+ortant "or an organization to evaluate all three tas-s: control, innovation, and e""iciency. All three a++roaches must be used. The com+any should concerned most about the overall collective +er"ormance o" the organization. !i"": ' #age $e": 13 L%: 1&, 3.) !escribe the value creation +rocess "or a university Answer: This relates to the 8c!onalds e0am+le in Figure 1.', but "or a service organization such as a university. Answers will vary, but ma-e sure students understand that the value creation +rocess a++lies to organizations that +roduce intangible goods also. !i"": ' #age $e": * L%: 1&1 3/) !iscuss how an organization can hel+ organizations manage their e0ternal environment. Answer: This ?uestion is based on "igure 1.*. 8a-e sure students -now why organizations e0ist, and also that they understand the basic de"inition o" the e0ternal environment !i"": ' #age $e": . L%: 1&1 31) =hat is the di""erence between economies o" scale and economies o" sco+e> Answer: conomies o" scale are cost savings "rom +roducing large volumes, economies o" sco+e are cost savings because o" the use o" shared resources. !i"": 1 #age $e": / L%: 1&1 33) @ive an e0am+le o" how a "ast&"ood restaurant can use economies o" sco+e to achieve cost savings. Answer: Answers need to re"lect the use o" underutilized resources. Serving brea-"ast, or staying o+en until midnight are a cou+le o" e0am+les. 8a-e sure the answers are not con"used with economies o" scale. !i"": * #age $e": / L%: 1&'

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34) @ive an e0am+le o" how a "ast&"ood restaurant can use economies o" scale to achieve cost savings. Answer: Answers should re"lect techni?ues that will result in large volume +roduction, such as using the same hamburger +atty "or various +roducts. !i"": * #age $e": / L%: 1&1 45) !iscuss how structure may have +layed a role in the +roblems associated with the ).S. auto industry. Answer: Hou can use %rganizational (nsight 1.' as a basis "or this ?uestion, along with any contem+orary news about this industry. !i"": * #age $e": 1, L%: 1&* 41) @ive one e0am+le each o" the e0ternal, internal, and technical a++roaches to measuring organizational e""ectiveness. Answer: See table 1.1 on +age 1.. !i"": * #age $e": 1. L%: 1&,

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