8.

2 - Three Levels of Strategy in Organizations

1. Research has shown that strategic thinking and planning positively affect a
firm's performance and financial success.
a. True
b. False
ANSWER:  True

3. Top managers and chief executives have the final responsibility for strategic
planning.
a. True
b. False
ANSWER:  True

7. Core competence is the plan of action that prescribes resource allocation and
other activities for dealing with the environment.
a. True
b. False
ANSWER:  False
9. Corporate-level strategy pertains to the organization as a whole.
a. True
b. False
ANSWER: True
11. The three levels of strategy are business, corporate and global.
a. True
b. False
ANSWER: False
16. The administration and implementation of the strategic plan is strategy
execution.
a. True
b. False
ANSWER: True
28. Unrelated diversification occurs when an organization expands into a totally
new line of business.
a. True
b. False
ANSWER: True
31. Differentiation, cost leadership and focus are three of Porter's competitive
strategies.
a. True
b. False
ANSWER: True

32. Cost leadership is a type of competitive strategy with which the organization
seeks to distinguish its products or services from that of competitors.
a. True
b. False
ANSWER: False
33. Organization's with a focus strategy concentrate on a specific regional market
or buyer group.
a. True
b. False
ANSWER: True
44. To remain market competitive, companies should develop strategies that focus
on core competencies, providing synergy and creating value for _____.
a. customers
b. suppliers
c. stockholders
d. employees
e. board members
ANSWER: a
The plan of action that prescribes resource allocation and other interrelated
activities for dealing with the environment and helping the organization attain its
goals is known as a(n) _____.
 a. goal
b. objective
c. mission
d. vision
e. strategy
ANSWER: e
47. Which of the following is an intangible asset that an organization derives
considerable competitive advantage from relative to its industry competition?
a. Strategy
b. Synergy
c. Cash cow
d. Core competence
e. Multi domesticity
ANSWER: d
52. Which of the following pertains to the organization as a whole?
a. Business-level strategy
b. Functional-level strategy
c. Corporate-level strategy
d. Operational-level strategy
e. Competitive-level strategy
ANSWER: c
117. Name and describe the three types of global strategies. The three types of
global strategies are globalization, multidomestic and transnational. Globalization
means that a company's product design and advertising strategies are standardized
throughout the world. This approach is based on the assumption that a single
global market exists for many consumer and industrial products. The theory is that
people everywhere want to buy the same products and live the same way.
Multidomestic strategies believe that competition in each country is handled
independently of industry competition in other countries. Thus, marketing,
advertising and product design is encouraged to be modified and adapted to the
specific needs of each country the company is present in. Many companies reject
the idea of a single global market. Transnational strategies seek to achieve both
global integration and national responsiveness. A true transnational strategy is
difficult to achieve, because one goal requires close global coordination while the
other goal required local flexibility. However, many industries are finding that,
although increased competition means they must achieve global efficiency,
growing pressure to meet local needs demands national responsiveness.
116. Briefly discuss Porter's three competitive strategies. Porter identified three
competitive strategies: differentiation, cost leadership and focus. A differentiation
strategy involves the organization attempting to distinguish its product or service
from those of its competition. Advertising, product features and customer service
are some of the ways an organization can successfully differentiate. A cost
leadership strategy is based on the organization achieving a low-cost position
relative to the competition. A company may achieve a cost leadership through the
operation of efficient facilities, cutting costs or maintaining tight cost control.
When a company uses a differentiation or a cost leadership strategy in a particular
market or buyer group, they are employing a focus strategy. This strategy allows
the organization to concentrate on a narrow market niche.
Ch. 6 Fundamentals of Organizing
• Organizing is the process of establishing orderly uses for all resources
within the management
system. Orderly uses emphasize the attainment of management system
objectives and
assist managers not only in making objectives apparent but in clarifying
which resources will
be used to attain them.
A primary focus of organizing is determining both what individual
employees will do in an organization and how their individual efforts should
best be combined to advance the attainment of organizational objectives.
Organizing is arranging and structuring work to accomplish organizational
goals. It’s an important process during which managers design an
organization’s structure.
• Organizational structure is the formal arrangement of jobs within an
organization. This structure, which can be shown visually in an
organizational chart, also serves many purposes.
• When managers create or change the structure, they’re engaged in
organizational design, a process that involves decisions about different
elements.
Organizing:
− Deciding how best to group organization activities and resources
− Organization can impact firm’s competitiveness
Organization structure:
− The set of elements that can be used to configure an organization
− Includes job design, job groups, reporting relationships, authority,
coordinating activities, and differentiating among positions
Organization refers to the result
of the organizing process.
In essence, each organizational resource represents an investment from which the
management system must get a return. Appropriate organization of these resources
increases the efficiency and effectiveness of their use. Henri Fayol developed 16
general guidelines for
organizing resources.
The organizing function is extremely important to the management system because
it is the
primary mechanism managers use to activate plans. Organizing creates and
maintains relationships between all organizational resources by indicating which
resources are to be used for specified activities and when, where, and how they are
to be used.
A thorough organizing effort helps managers minimize costly weaknesses, such as
duplication of effort and idle organizational resources.
There are five main steps of the organizing process:
1. Reflect on plans and objectives.
2. Establish major tasks.
3. Divide major tasks-into subtasks.
4. Allocate resources and directives for subtasks.
5. Evaluate the results of implemented organizing strategy.
The management of a restaurant can serve as an illustration of how the organizing
process works. The first step the restaurant manager would take to initiate the
organizing process would be to reflect on the restaurant's plans and objectives.
Because planning involves determining how the restaurant will attain its
objectives, and organizing involves determining how the restaurant's resources will
be used to activate plans, the restaurant manager must start to organize by
understanding planning.
The second and third steps of the organizing process focus on tasks to be
performed
within the management system. The manager must designate major tasks or jobs to
be done
within the restaurant.
Two such tasks are serving customers and cooking food. Then the tasks must be
divided into subtasks. For example, the manager might decide that serving
customers
includes the subtasks of taking orders and clearing tables.
The fourth organizing step is determining who will take orders, who will clear the
tables, and what the details of the relationship between these individuals will be.
The size of tables and how they are to be set are other factors to be considered at
this point.
In the fifth step, evaluating the results of the implemented organizing strategy, the
manager gathers feedback on how well the strategy is working. This feedback
should furnish information that can be used to improve the existing organization.
For example, the manager may find that a particular type of table is not large
enough and that larger ones must be purchased if the restaurant is to attain its
goals.
Classical organizing theory comprises the cumulative insights of early
management
writers on how organizational resources can best be used to enhance goal
attainment. The
writer who probably had the most profound influence on classical organizing
theory was
Max Weber.
According to Weber, the main components of an organizing effort are detailed
procedures and rules, a clearly outlined organizational hierarchy, and impersonal
relationships among organization members.
There are four main considerations of classical organizing theory that all modern
managers should incorporate into their organizing efforts:
1. Structure
In any organizing effort, managers must choose an appropriate structure. Structure
refers to the designated relationships among resources of the management system.
Its purpose is to facilitate the use of each resource, individually and collectively, as
the management system
attempts to attain its objectives.
Organization structure is represented primarily by means of a graphic illustration
called
an organization c h a r t . Traditionally, an organization chart is constructed in
pyramid form, with individuals toward the top of the pyramid having more
authority and responsibility than those toward the bottom.
The relative positioning of individuals within boxes on the chart indicates broad
working relationships, and lines between boxes designate formal lines of
communication between individuals.
Departmentalization:
- Functional dept (engineering, a/c, manufacturing, HR, purchasing, mrkt.)
- Geographic dept. (Europe, N.Africa, Middle East, etc.)
- Product dept. (chemicals, iron & steel, textile, food, construction, etc.)
- Customer dept. (retail accounts, wholesale a/c, government a/c.)
Does your college have a department of student services or financial aid
department? Are you taking this course through a management department?
After deciding what job tasks will be done by whom, common work activities need
to be grouped back together so work gets done in a coordinated and integrated
way. How jobs are grouped together is called departmentalization.
In the next example, five common forms of functional departmentalization
(engineering, accounting, HR, purchasing, and marketing) are used, although an
organization may develop its own unique classification.
For instance, a hotel might have departments such as front desk operations, sales
and catering, housekeeping and laundry, and maintenance. Geographical
Departmentalization
Vice President for Sales:
- Sales Director, North Africa
- Sales Director, Central Asia
- Sales Director, Europe
- Sales Director, Middle East
- Sales Director, Italy
Product Departmentalization
- Chemical
- Iron & steel
- Textile
- Food stuff
- Commodities
Customer Departmentalization
- Manager, Retail accounts
- Manager, Wholesale accounts
- Manager, Government accounts
Divisional approach
– Grouping based on organizational output, product, program, business
Geographic or Customer-based divisions group activities by geography or
customer
Today most large organizations continue to use combinations of most or all of
these types of departmentalization. For example, a major Japanese electronics firm
organizes its divisions along functional lines, its manufacturing units around
processes, its sales units around seven geographic regions, and its sales regions
into four customer groupings.
Black & Decker organizes its divisions along functional lines, its manufacturing
units around processes, its sales around geographic regions, and its sales regions
around customer groupings. One popular departmentalization trend is the
increasing use of customer departmentalization. Because getting and keeping
customers is essential for success, this approach works well because it emphasizes
monitoring and responding to changes in customers’ needs.
Another popular trend is the use of teams, especially as work tasks have become
more complex and diverse skills are needed to accomplish those tasks. One
specific type of team that more organizations are using is a cross-functional team,
which is a work team composed of individuals from various functional specialties.
For instance, at Ford’s material planning and logistics division, a cross-functional
team of employees from the company’s finance, purchasing, engineering, and
quality control areas, along with representatives from outside logistics suppliers,
has developed several work improvement ideas. The second main consideration of
any organizing effort is how to divide labor. Division of labor is the assignment of
various portions of a particular task among a number of organization members."
Rather than one individual doing the entire job, several individuals perform
different parts of it. Production is divided into a number of steps, with the
responsibility for completing various steps assigned to specific individuals.
The essence of division of labor is that individuals specialize in doing part of a task
rather than the entire task. A commonly used illustration of division of labor is the
automobile production line. Rather than one person assembling an entire car,
specific portions of the car are assembled by various workers. The third main
consideration of any organizing effort is span of management—the number of
individuals a manager supervises. The more individuals a manager supervises, the
greater the span of management. Conversely, the fewer individuals a manager
supervises, the smaller the span of management. The span of management has a
significant effect on how well managers carry out their responsibilities.
Span of management is also called span of control, span of authority, span of
supervision, and span of responsibility. The central concern of span of
management is to determine how many individuals a manager can supervise
effectively.
Span of Management
• The number of employees reporting to a supervisor
• Less supervision/larger spans of control
 Work is stable and routine
 Subordinates perform similar work
 Subordinates are in one location
 Highly trained/require little direction
 Rules and procedures are defined
 Few planning or nonsupervisory activities
 Manager’s preference
10-4c Factors Influencing Span of Management (1 of 2)
• Competence of supervisor and subordinates:
• The greater the competence, the wider the potential span
• Physical dispersion of subordinates:
• The greater the dispersion, the narrower the potential span
• Extent of nonsupervisory work in manager’s job:
• The more nonsupervisory work, the narrower the potential span
• Degree of required interaction:
• The less required interaction, the wider the potential span
10-4c Factors Influencing Span of Management (2 of 2)
• Extent of standardized procedures:
• The more procedures, the wider the potential span
• Similarity of tasks being supervised:
• The more similar the tasks, the wider the potential span
• Frequency of new problems:
• The higher the frequency, the narrower the potential span
• Preferences of supervisors and subordinates
The fourth main consideration of any organizing effort is scalar relationships —
the chain 'of command. Every organization is built on the premise that the
individual at the top possesses the most authority and that other individuals'
authority is scaled downward according to their relative position on the
organization chart.
The lower a person's position on the organization chart, then, the less authority that
person possesses. The scalar relationship, or chain of command, is related to the
unity of command. Suppose you were at work and had a problem with some issue
that came up. What would you do? Who would you go to help you resolve that
issue? People need to know who their boss is. That’s what the chain of command is
all about.
The chain of command is the line of authority extending from upper organizational
levels to lower levels, which clarifies who reports to whom. Managers need to
consider it when organizing work because it helps employees with questions such
as “Who do I report to?” or “Who do I go to if I have a problem?” To understand
the chain of command, you have to understand three other important concepts:
authority, responsibility, and unity of command
Most fundamental method of channeling the activity of individuals within an
organization:
responsibility is the obligation to perform assigned activities. It is the self-
assumed commitment
to handle a job to the best of one's ability. The source of responsibility lies within
the individual.
A person who accepts a job agrees to carry out a series of duties or activities or to
see that someone else carries them out. The act of accepting the job means that the
person is obligated to a superior to see that job activities are successfully
completed. Because responsibility is an obligation that a person accepts, there is no
way it can be delegated or passed on to a subordinate. An individual's job activities
within an organization are usually summarized in a formal statement called a job
description—a list of specific activities that must be performed by whoever holds
the position. Unclear job descriptions can confuse employees and may cause them
to lose interest in their jobs. On the other hand, a clear job description can help
employees to become successful by focusing their efforts on the issues that are
important for their position. When properly designed, job descriptions
communicate job content to employees, establish performance levels that
employees must maintain, and act as a guide that employees should follow to help
the organization reach its objectives.
10-2 Designing Jobs
Job design:
• The determination of an individual’s work-related responsibilities
Job specialization:
• The degree to which the overall task of the organization is broken down and
divided into smaller component parts
10-2c Alternatives to Specialization (1 of 2)
• Job rotation:
• Involves systematically moving employees from one job to another
• Can increase flexibility and lower costs, but jobs are still boring, and
satisfaction quickly wanes
• Job enlargement:
• Increases the total number of tasks workers perform.
• Though positive consequences happen, training costs increase, unions
argue for more pay, and work remains boring
10-2b Specialization
Benefits:
• Workers become proficient at task
• Transfer time between tasks decreases
• The narrow job definition allows for specialized equipment
• Training costs are relatively low
• Limitations:
• Worker boredom and dissatisfaction
• Can lead to higher absenteeism and lower quality of work
 • Anticipated benefits do not always occur
• Managers should avoid extreme specialization
Individuals are assigned job activities to channel their behavior within the
organization appropriately. Once they have been given specific assignments, they
must be given a commensurate amount of authority to perform those assignments
satisfactorily.
Authority is the right to perform or command. It allows its holder to act in certain
designated ways and to directly influence the actions of others through orders. It
also allows its holder to allocate the organization's resources to achieve
organizational objectives.
Three main types of authority can exist within an organization:
1. Line authority
2. Staff authority
3. Functional authority
Each type exists only to enable individuals to carry out the different types of
responsibilities with which they have been charged.
Line authority , the most fundamental authority within an organization, reflects
existing superior—subordinate relationships. It consists of the right
to make decisions and to give orders concerning the production-, sales-, or finance-
related behavior of subordinates. In general, line authority pertains to matters
directly involving management system production, sales, and finance and, as a
result, the attainment of objectives.
People directly responsible for these areas within the organization are delegated
line authority to assist them in performing their obligatory activities.
Line departments perform primary business tasks
– Sales
– Production
Whereas line authority involves giving orders concerning production activities,
staff authority consists of the right to advise or assist those who possess line
authority as well as other staff personnel. Staff authority enables those responsible
for improving the effectiveness of line personnel to perform their required tasks.
Examples of organization members with staff authority are people working in the
accounting and human resource departments.
Obviously, line and staff personnel must work together closely to maintain the
efficiency and
effectiveness of the organization.
 • Line authority means that people in management positions have formal
authority to direct and control immediate subordinates
• Staff authority is narrower and includes the right to advise, recommend,
counsel in the staff specialists’ area of expertise
Functional authority consists of the right to give orders within a segment of the
organization in which this right is normally nonexistent. This authority is usually
assigned to individuals to complement the line or staff authority they already
possess.
Functional authority generally covers only specific task areas and is operational
only for designated amounts of time. Typically, it is given to individuals who, in
order to meet responsibilities in their own areas, must be able to exercise some
control over organization members in other areas.
The vice president for finance in an organization is an example of someone with
functional authority. Among his or her basic responsibilities is the obligation to
monitor the financial situation of the whole management system. To do so requires
having appropriate financial information continually flowing in from various
segments of the organization. The vice president for finance, therefore, is usually
delegated the functional authority to order various depts to furnish the kinds and
amounts of information he or she needs to perform an analysis. In effect, this
functional authority allows the vice president for finance to give orders to
personnel within depts in which he or she normally cannot give orders.
10-5 Distributing Authority
• Authority:
• Power that has been legitimized by the organization
• Normal outgrowth of increasing organizational size
• Delegation:
• The process by which managers assign work to subordinates
• Responsibility is the duty to perform the task or activity as assigned
• Accountability is the mechanism through which authority and responsibility
are aligned
• Delegation is the process managers use to transfer authority and
responsibility down the chain
Accountability refers to the management philosophy whereby individuals are held
liable, or accountable, for how well they use their authority and live up to their
responsibility of performing predetermined activities. The concept of
accountability implies that if an individual does not perform predetermined
activities, some type of penalty, or punishment, is ustifiable.
Delegation is the actual process of assigning job activities and corresponding
authority to specific individuals within the organization.
10-5a The Delegation Process
• Delegation
• The primary reason is to allow the manager to get more work done.
• The process involves three steps:
• The manager assigns responsibility or tasks.
• The manager gives authority needed to do the job.
• The manager establishes accountability.
• Problems arise when managers are unwilling or unable to delegate.
• Chain of command:
• A clear and distinct line of authority among the positions in an
organization
• Includes two distinct components:
• Unity of command: Suggests that each person within an
organization must have a clear reporting relationship to only
one boss
• Scalar principle: Suggests that there must be a clear and
unbroken line of authority that extends from the lowest to the
highest position in the organization
One of the questions that needs to be answered when organizing is “At what
organizational level are decisions made?” Centralization is the degree to which
decision making takes place at upper levels of the organization. If top managers
make key decisions with little input from below, then the organization is more
centralized. On the other hand, the more that lower-level employees provide input
or actually make decisions, the more decentralization there is.
Keep in mind that centralization-decentralization is not an either-or concept. The
decision is relative, not absolute—that is, an organization is never completely
centralized or decentralized.
• Centralization – decision authority is located near the top of the
organization
• Decentralization – decision authority is pushed downward to all levels
• Factors that influence centralization versus decentralization:
 – Change and uncertainty are usually associated with decentralization
– Strategic fit
– Crisis requires centralization
– Tall organization:
• Many layers of management with a limited span of
control
• More expensive
• Fosters communication problems
• Flat organization:
• Wider span of management
• Flat structures lead to higher levels of employee morale and productivity
• Manager has more administrative responsibility
She was recently named, for the fourth year straight, the Most Powerful Woman in
Business by Fortune magazine and was named one of the 100 most powerful
women in the world by Forbes magazine.
“She” is Indra Nooyi, CEO of PepsiCo. Born in India, Ms. Nooyi joined PepsiCo
as head of corporate strategy in 1994 and moved quickly up the ladder to become
chief executive officer. In 2007, she also assumed the role of chairman of
PepsiCo’s board of directors.
1. The deployment of organizational resources to achieve strategic goals refers to
organizing.
a. True
b. False
ANSWER: True
2. The framework in which the organization defines how tasks are divided,
resources are deployed and departments are coordinated is called organizational
structure.
a. True
b. False
ANSWER: True
3. Authority is the right to use resources, make decisions and issue orders in an
organization.
a. True
b. False
ANSWER: True
4. Line departments perform tasks that reflect the organization’s primary goal and
mission.
a. True
b. False
ANSWER: True
5. The number of employees reporting to a supervisor is his or her span of
management.
a. True
b. False
ANSWER: True
6. Many hierarchical levels and a correspondingly narrow span of management
refers to a flat structure.
a. True
b. False
ANSWER: False
7. The trend in recent years has been toward narrower spans of control as a way to
facilitate delegation.
a. True
b. False
ANSWER: False
8. A tall structure is a management structure characterized by an overall narrow
span of management and a relatively large number of hierarchical levels.
a. True
b. False
ANSWER: True
9.The basis for grouping positions into departments and departments into the total
organization is referred to as departmentalization.
a. True
b. False
ANSWER: True
10. For companies to operate effectively, the amount of centralization or
decentralization should fit the firm’s strategy.
a. True
b. False
ANSWER: True
11. For companies to operate effectively, the amount of centralization or
decentralization should fit the firm’s strategy.
a. True
b. False
ANSWER: True
12. A project manager is a person responsible for coordinating the activities of
several departments for the completion of a specific project.
a. True
b. False
ANSWER: True
13. The radical redesign of business processes to achieve dramatic improvements
in cost, quality, service and speed is called reengineering.
a. True
b. False
ANSWER: True
14. The distinctive feature of the project manager position is that the person is not
a member of one of the departments being coordinated.
a. True
b. False
ANSWER: True
15. When an organization uses a differentiation strategy, it strives for internal
efficiency.
a. True
b. False
ANSWER: False
16. The pure functional structure is appropriate for achieving internal efficiency
goals.
a. True
b. False
ANSWER: True
17. Which of the following refers to the deployment of organizational resources to
achieve strategic goals?
a. Planning
b. Controlling
c. Organizing
d. Leading
e. Strategic management
ANSWER: c
18. Strategy defines _____ to do (it) while organizing defines _____ to do (it).
a. how; what
b. how; why
c. what; how
d. what; why
e. when; what
ANSWER: c
19. Organizational structure includes which of these
a. The set of formal tasks assigned to individuals
b. The set of formal tasks assigned to departments
c. The design of systems to ensure effective coordination of employees
across departments
d. Formal reporting relationships
e. All of these are part of organizational structure.
ANSWER: e
20. Organization structure is defined as the:
a. visual representation of the organization.
b. framework in which the organization defines how tasks are divided,
resources are deployed, and departments are coordinated.
c. division of labour.
d. unbroken line of authority that links all individuals in the
organization.
e. none of these.
ANSWER: b
21. The organization chart:
a. shows the characteristics of the organization's vertical structure.
b. is a visual representation of the organization's structure.
c. details the formal reporting relationships that exist within an
organization.
d. all of these.
e. None of these.
ANSWER: d
22. _____ is also referred to as work specialization.
a. Division of labour
 b. Unity of command
c. Scalar chain
d. Esprit de corps
e. Virtual network approach
ANSWER: a
23. A manager was looking at the company's organization chart in an attempt to
discover who reports to whom. The manager is studying the organization's:
a. degree of formalization.
b. amount of differentiation.
c. degree of centralization.
d. chain of command.
e. division of labour.
ANSWER: d
24. _____ means that each employee is held accountable to only one supervisor.
a. Management principle
b. Unity of command
c. Work specialization
d. Division of labour
e. Span of management
ANSWER: b
25. The formal and legitimate right of managers to make decisions is called their
_____.
a. delegation
b. responsibility
c. authority
d. span of management
e. leadership
ANSWER: c
26. _____ refers to a clearly defined line of authority in the organization that
includes all employees.
a. Scalar principle
b. Unity of command
c. Work specialization
d. Division of labour
e. Span of management
ANSWER: a
27. How does managerial authority flow through the organizational hierarchy
a. Vertically
b. Sporadically
c. Horizontally
d. Circular
e. Periodically
ANSWER: a
28. The people with authority and responsibility are subject to reporting and
justifying task outcomes to those above them in the chain of command. This is
called _____.
a. delegation
b. line authority
c. staff authority
d. accountability
e. hierarchy
ANSWER: d
29. A manager wishes to transfer authority and responsibility to subordinates. This
process is known as:
a. accountability.
b. coordination.
c. delegation.
d. departmentalization.
e. passing the buck.
ANSWER: c
30. Which department performs those tasks that reflect the organization's primary
goals and mission
a. Line
b. Staff
c. Primary
d. Functional
e. Strategic planning
ANSWER: a
31. Which of the following refers to the number of employees reporting to a
supervisor?
a. The line of authority
b. The span of management
c. The chain of command
d. The management chain
e. Delegation
ANSWER: b
32. To help employees learn more about the different roles within a company, a
manager regularly assigns the employees tasks that are not part of their normal
routine. This is an example of:
a. irresponsibility
b. delegation
c. authority
d. chain of command
e. irrational decision making
ANSWER: b
33. Which of the following five organizations should have a flatter structure than
the others?
a. Organization A with 2 hierarchical levels
b. Organization B with 4 hierarchical levels
c. Organization C with 6 hierarchical levels
d. Organization D with 8 hierarchical levels
e. Organization E with 10 hierarchical levels
ANSWER: a
34. The employees of Manager A are highly trained and all perform similar tasks
in the same location. The employees of Manager B are spread over three or four
locations. In addition, Manager B provides almost no support systems to many of
these employees. Which of the following statements is most correct?
a. Manager A’s span of management can be larger than Manager’s B
span of management.
b. Manager B’s span of management can be larger than Manager A’s
span of management.
c. Manager A can have more problems with unity of command than
Manager B.
d. All of these
e. None of these
ANSWER: b
35. Compared to a flat organizational structure, a tall structure has a _____ span of
management and _____ hierarchical levels.
a. wide; fewer
b. narrow; fewer
c. narrow; wider
d. narrow; more
e. wide; more
ANSWER: d
Ch. 4; soru 80’den itibaren …..
36. _____ is a recent trend in organizational structure.
a. Greater work specialization
b. Less delegation
c. Wider spans of management
d. Narrower spans of management
e. Tall structure
ANSWER: c
37. An assembly-line employee has the authority to make many decisions about
the job. The employee can be said to have:
a. a high degree of decentralization.
b. a wide span of management.
 c. a high degree of centralization.
d. a narrow span of management.
e. no management.
ANSWER: a
38. _____ means that decision authority is located near the _____ of the
organization.
a. Centralization; bottom
b. Decentralization; top
c. Centralization; top
d. Centralization; middle
e. None of these
ANSWER: c
39. Which of the following is the basis for grouping positions into departments and
in turn departments into the total organization?
a. Departmentalization
b. Centralization
c. Decentralization
d. Formalization
e. Specialization
ANSWER: a
40. William has seven levels of management between himself and the company’s
CEO. In contrast, his friend at another company Marie has four levels of
management between her and the company CEO. By comparison, William’s
company has what type of organizational structure?
a. Narrow
b. Wide
c. Flat
d. Tall
e. Identical
ANSWER: d
41. The use of too many teams in a company may lead to:
a. division of labour.
b. decentralization.
c. authority and responsibility in top management's hands.
d. formalization.
e. narrow span of management.
ANSWER: b
42. All functions in specific countries or regions report to the same divisional
manager in _____ divisions.
a. functional
b. matrix
c. geographic-based
 d. teams
e. networks
ANSWER: c
43. A company has operations in North America, South America, Europe and Asia.
The CEO’s direct supervisors are VPs for each of the four continents. The
company can best be described as using what organizational structure?
a. Network
b. Matrix
c. Functional
d. Divisional
e. Geographic
ANSWER: e
44. _____ teams are brought together as a formal department in the organization.
a. Cross-functional
b. Permanent
c. Formal
d. Ad-hoc
e. Task
ANSWER: b
45. All of the following are effective ways for a manager to delegate
responsibilities EXCEPT:
a. delegate entire tasks.
b. select the right employees.
c. do not provide instructions until the project has been completed.
d. evaluate and reward performance.
e. provide clear-cut instructions.
ANSWER: c
46. An advantage of functional structures is the:
a. resulting economies of scale.
b. enlarged tasks for employees.
c. easy pinpointing of responsibility for product problems.
d. development of general management skills.
e. flexibility in an unstable environment.
ANSWER: a
47. A company is designed along functional lines. New product development is
very slow and the process is plagued by problems. One of the problems is that
marketing does not communicate with production. This is an example of poor
_____.
a. coordination
b. planning
c. motivating
d. leading
 e. controlling
ANSWER: a
48. . Which of the following happens as organizations grow?
a. Positions and departments are deleted.
b. Management layers are eliminated to save cost.
c. Managers have to find new ways to link different departments.
d. Top management becomes more autocratic.
e. None of these.
ANSWER: c
49. When an organization is structured along _____ lines, coordination is required.
a. functional
b. divisional
c. team
d. All of these
e. None of these
ANSWER: d
50. The outcome of information and cooperation is _____.
a. organization
b. planning
c. coordination
d. differentiation
e. controlling
ANSWER: c
51. A task force is _____ committee(s) formed to solve a specific problem.
a. a standing
b. a permanent
c. a temporary
d. all of these
e. None of these
ANSWER: c
52. A committee is expected to generate a list of six or seven solutions to a
problem before being disbanded. The committee is known as a _____.
a. team
b. standing committee
c. permanent committee
d. task force
e. None of these
ANSWER: d
53. Which of the following leads to strong coordination across functional areas and
greater flexibility in responding to changes in the environments?
a. Reengineering
b. Layoffs
 c. Downsizing
d. Temporary committee
e. Ad hoc committee
ANSWER: a
54. A(n) ____ is responsible for coordinating the activities of several departments.
a. department manager
b. line manager
c. project manager
d. operative
e. moderating manager
ANSWER: c
55. A manager is responsible for coordinating the efforts of several different
departments. Which of the following titles best describes the management
position?
a. Department manager
b. Middle manager
c. First-level supervisor
d. Project manager
e. Chairman of the board
ANSWER: d
56. Project managers have authority over _____ but not over the _____ assigned to
the project.
a. people; the project
b. the project; employees
c. resources; the project
d. people; other resources
e. finances; products
ANSWER: b
57. A company has a finance department, a marketing department and a production
department. The company:
a. uses a functional structure.
b. has a geographic structure.
c. uses a divisional structure.
d. uses product-based structure.
e. uses a matrix structure.
ANSWER: a
58. An organization strives for internal efficiency with a(n) _____ strategy.
a. integration
b. diversification
c. differentiation
d. defensive
e. cost leadership
ANSWER: e
59. 138. With a(n) _____ strategy, the organization attempts to develop innovative
products unique to the market.
a. differentiation
b. integration
c. reengineering
d. cost leadership
e. defensive
ANSWER: a
60. A company produces high volumes of products using standardized production
runs, but does very little product customization. The company uses which type of
technology structure?
a. Service production
b. Mass production
c. Large-batch production
d. Small-batch production
e. Continuous process production
ANSWER: b
61. _____ refers to the fact that services are perishable and cannot be stored in
inventory.
a. Boundarylessness
b. Tangible output
c. Intangible output
d. Flexible operations
e. Centralization
ANSWER: c

62. 150. The deployment of organizational resources to achieve strategic goals is

known as _____.
ANSWER: organizing

63. The framework in which the organization defines how tasks are divided,
resources are deployed and departments are coordinated is called _____.
ANSWER: organization structure
64. 152. The visual representation of an organization's structure is called the
_____.
ANSWER: organization chart
65. Division of labour is also known as _____.
ANSWER: work specialization
66. The degree to which organizational tasks are subdivided into individual jobs is
called _____.
ANSWER: work specialization
67. The _____ is an unbroken line of authority that links all persons in an
organization and shows who reports to whom.
ANSWER: chain of command
68. 156. When each employee is held accountable to only one supervisor, it is
called _____.
ANSWER:  unity of command
69. The _____ refers to a clearly defined line of authority in the organization that
includes all employees.
ANSWER:  scalar principle
70. _____ is the formal and legitimate right of a manager to make decisions, issue
orders and allocate resources to achieve organizationally desired outcomes.
ANSWER:  Authority
71. 160. _____ is the duty to perform the task or activity an employee has been
assigned.
ANSWER:  Responsibility
72. _____ is the duty to perform the task or activity an employee has been
assigned.
ANSWER: Responsibility
73. _____ 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.
ANSWER: Accountability
74. _____ is the process managers use to transfer authority and responsibility to
positions below them in the hierarchy.
ANSWER: Delegation
75. The _____ is the number of employees reporting to a supervisor.
ANSWER: span of management
76. 166. A(n) _____ structure has a wide span, is horizontally dispersed and has
fewer hierarchical levels.
ANSWER: flat
77. A(n) _____ structure has an overall narrow span and more hierarchical levels.
ANSWER: tall
78. With _____ decision authority is pushed downward to lower organization
levels.
ANSWER: decentralization
79. _____ means that decision authority is located near the top of the organization.
ANSWER: Centralization
80. A(n) ______ structure is the grouping of positions into departments based on
similar skills, expertise and resource use.
ANSWER: functional
81. _____ teams consist of employees from various functional departments who
are responsible to meet as a team and resolve mutual problems.
ANSWER: Cross-functional
82. A(n) _____ is a temporary team designed to solve a short-term problem
involving several departments.
ANSWER: task force
83. A(n) _____ is a person who is responsible for coordinating the activities of
several departments for the completion of a specific project.
ANSWER: project manager
87. Describe reengineering and what it involves.
ANSWER: Reengineering, sometimes called business process reengineering, is
the radical redesign of business processes to achieve dramatic improvements in
cost, quality, service, and speed. Reengineering involves a shift to a horizontal
structure based on teams. Basically, it means starting over, throwing out all the
notions of how work was done and deciding on how it can best be done now.

88. Define task forces and project management.

ANSWER: A task force is a temporary team or committee designed to solve a
short-term problem involving several department. A project manager is a person
who is responsible for coordinating the activities of several departments for the
completion of a specific project.
84. _____ is the radical redesign of business processes to achieve dramatic
improvements in cost, quality, service and speed.
ANSWER: Reengineering
85. . _____ refers to services that are perishable and, unlike physical products,
cannot be stored in inventory.
ANSWER: Intangible output
86. Define span of management and explain if there is an ideal span of
management.
ANSWER: The span of management, or span of control, is the number of
employees who report directly to one supervisor. There is not an ideal span of
management. The number depends upon several characteristics of the situation
including the nature of the work done by the subordinates, the locations where the
work is done, the training and education of the workers, the level of definition of
the task, the time available to the manager and the manager's personal preferences
and style.