UNIVERSITY OF TECHNOLOGY, JAMAICA

SCHOOL OF BUSINESS ADMINISTRATION

MODULE NAME: INTRODUCTION TO MANAGEMENT (MAN1006)

PRINCIPLES OF MANAGEMENT (MAN1001)

UNIT 8 - Structure and Fundamentals of Organizing

Tutorial Questions

TRUE or FALSE

1. ____ The organizing function results in the creation of an organization structure.

2. ____ The organization structure shows not only reporting relationships but lines of authority and
responsibility.

3. ____ Work specialization is also referred to as division of labour.

4. ____ The concept of division of labour was first introduced by Henri Fayol.

5. ____ With the division of labour, one department may be subdivided into several sections that
relate to that functional area.

6. ____ Line departments perform tasks that reflect the organization’s primary goal and mission.

Short Answer Questions

7. The deployment of organizational resources to achieve strategic goals is known as
_______.

8. The framework in which the organization defines how tasks are divided, resources are
deployed, and departments are coordinated is called .

9. The visual representation of an organization's structure is called the .

10. Division of labor is also known as _______.

11. The degree to which organizational tasks are subdivided into individual jobs is called
.

12. The is an unbroken line of authority that links all persons in an organization
and shows who reports to whom.

13. When each employee is held accountable to only one supervisor, it is called ______.

14. The ______ refers to a clearly defined line of authority in the organization that includes
all employees.

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15. The three characteristics of authority are that it must be ______, ______, and ______.

16. is the formal and legitimate right of a manager to make decisions, issue
orders, and allocate resources to achieve organizationally desired outcomes.

17. is the duty to perform the task or activity an employee has been
assigned.

18. means that the people with authority and responsibility are subject to
reporting and justifying task outcomes to those above them in the chain of command.

19. is the process managers use to transfer authority and responsibility to

positions below them in the hierarchy.

20. ______ departments perform tasks that reflect the organization’s primary goal and
mission, while ______ departments include all those that provide specialized skills in
support of ______ departments.

21. means that people in management positions have formal authority to

direct and control immediate subordinates

22. The is the number of employees reporting to a supervisor.

23. A(n) ___ structure has a wide span, is horizontally dispersed, and has fewer
hierarchical levels.

24. With , decision authority is pushed downward to lower organization levels.

25. _______ means that decision authority is located near the top of the organization.

26. A(n) ______ structure has an overall narrow span and more hierarchical levels.

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 Discussion Questions

1. Define Span of Management. What was the original acceptable number of persons? Has
this number changed? Why?

2. Describe and contrast flat structure and tall structure.

3. Explain Centralization and Decentralization, contrasting their characteristics and

the factors that influence each.

4. What is departmentalization? Explain the different approaches: vertical, divisional,

Matrix, Team-based and Network, stating what they are and how they work. What is the
difference between the functional approach and the divisional approach.

5. What are the advantages and disadvantages of each approach?

6. Sandra Holt, manager of Electronics Assembly, asks Hector Cruz, her senior technician, to
handle things in the department while Sandra worked on the budget. She needed peace and
quiet for at least a week to complete her figures. After ten days, Sandra discovered that
Hector had hired a senior secretary, not realizing that Sandra had promised interviews to
two other people. Evaluate Sandra’s approach to delegation.

7. Many experts note that organizations have been making greater use of teams in recent
years. What factors might account for this trend?

8. An organizational consultant was heard to say, “Some aspect of functional structure

appears in every organization.” Do you agree? Explain.

9. The divisional structure is often considered almost the opposite of a functional structure.
Do you agree? Briefly explain the major differences in these two approaches to
departmentalization.

10. Some people argue that the matrix structure should be adopted only as a last resort
because the dual chains of command can create more problems than they solve. Do you
agree or disagree? Why?

11. What is the virtual network approach to structure? Is the use of authority and
responsibility different compared with other forms of departmentalization? Explain.

12. This unit suggested that structure should be designed to fit strategy. Some theorists argue that
strategy should be designed to fit the organization’s structure. With which theory do you agree?
Explain.

13. Carnival Cruise Lines provides pleasure cruises to the masses. C arnival has several ships and
works on high volume and low price rather than offering luxury cruises. What would you predict
about the organization structure of a Carnival Cruise ship compared with a company that had
smaller ships for wealthy customers?

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 CASE STUDY

Tucker Company

In 1993 the Tucker Company underwent an extensive reorganization that divided the company into
three major divisions. These new divisions represented Tucker’s three principal product lines. Mr.
Harnett, Tucker’s president, explained the basis for the new organization in a memo to the board of
directors as follows:

The diversity of our products requires that we reorganize along our major produce lines.
Toward this end I have established three new divisions: commercial jet engines, military jet
engines, and utility turbines. Each division will be headed by a new vice president who will
report directly to me. I believe that this new approach will enhance our performance
through the commitment of individual managers. It should also help us to identify
unprofitable areas where the special attention of management may be required.

For the most part, each division will be able to operate independently. That is, each will
have its own engineering, manufacturing, accounting departments, etc. In some cases,
however, it will be necessary for a division to utilize the services of other divisions or
departments. This is necessary because the complete servicing with individual divisional
staffs would result in unjustifiable additional staffing and facilities.

The companywide laboratory was one such service department. Functionally, it continued to
support all the major divisions. Administratively, however, the manager of the lab reported to the
manager of manufacturing in the military jet engine division.

From the time the new organization was initiated until February 1999, when the lab manager Mr.
Garfield retired, there was little evidence of interdepartmental or interdivisional conflict. His
replacement, Ms. Jones, unlike Mr. Garfield, was always eager to gain the attention of
management. Many of Jones’ peers perceived her as an empire builder who was interested in her
own advancement rather than the company’s well-being. After about six months in the new
position, Jones became involved in several interdepartmental conflicts over work that was being
conducted in her laboratory.

Historically, the engineering departments had used the lab as a testing facility to determine the
properties of materials selected by the design engineers. Jones felt that the lab should be more
involved in the selection of these materials and in the design of experiments and subsequent
evaluations of the experimental data.
Jones discussed this with Mr. Garner of the engineering department of the utility turbine
division. Garner offered to consult with Jones but stated that the final responsibility for the
selection of materials was charged to his department.

In the months that followed, Jones and Garner had several disagreements over the
implementation of the results. Garner told Jones that, because of her position at the testing lab,
she was unable to appreciate the detailed design considerations that affected the final decision on
materials selections. Jones claimed that Garner lacked the materials expertise that she, as a
metallurgist, had.

Garner also noted that the handling of his requests, which had been prompt under Garfield’s
management, was taking longer and longer under Jones’ management. Jones explained that
military jet engine divisional problems had to be assigned first priority because of the
administrative reporting structure.

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She also said that if she were more involved in Garner’s problems she could perhaps appreciate
when a true sense of urgency existed and could revise priorities.

The tensions between Garner and Jones reached a peak when one of Garner’s critical projects
failed to receive the scheduling that he considered necessary. Garner phoned Jones to discuss the
need for a schedule change. Jones suggested that they have a meeting to review the need for the
work. Garner then told Jones that this was not a matter of her concern and that her function was
merely to perform the tests as requested. He further stated that he was not satisfied with the low-
priority rating that his division’s work received. Jones reminded Garner that when Jones had
suggested a means of resolving this problem, Garner was not receptive. At this point, Garner lost
his temper and hung up on Jones.

Questions

1. Sketch out a simple organization chart showing Tucker company’s three divisions, including the
location of the laboratory. Why would the lab be located in the military jet engine division?

2. Analyze the conflict between Ms. Jones and Mr. Garner. Do you think the conflict is based on
personalities or on the way in which the organization is structured?

3. Sketch out a new organization chart showing how you would restructure Tucker Company so that
the laboratory would provide equal services to all divisions. What advantages and disadvantages do
you see in the new structure compared to the previous one?