Business A Changing World 9th Edition Ferrell Test Bank 1

BUSINESS A CHANGING WORLD 9TH EDITION FERRELL
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Chapter 07
Organization, Teamwork, and Communication
True / False Questions
1. Organizational culture is expressed informally through a firm's mission statement or code of

ethics.
True False
2. Organizational structures are always explicitly defined.
True False
3. An organization's structure develops as managers assign tasks to work groups and specific
individuals and coordinate the diverse activities required to attain organizational objectives.
True False
4. Organizational growth requires organizing different resources.
True False
5. The more complex organizations become, the more they need to develop formal structures to
function efficiently.
True False
7-1
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Multiple Choice Questions
6. Which of the following is not part of organizational culture?
A. Values
B. Beliefs
C. Role models
D. Religion
E. Traditions
7. Which is not a means of formally expressing an organization's culture?
A. Ceremonies
B. Code of ethics
C. Mission statement
D. Manuals
E. Employee dress codes
8. Dress codes, work habits, extracurricular activities, and stories are informal expressions of an
organization's
A. grapevine.
B. lack of organization.
C. informality.
D. culture.
E. formality.
9. Organizational structure is defined as
A. the arrangement or relationship of positions within an organization.

B. a group of people working together to achieve an objective.
C. the division of labor into small specific tasks.
D. the grouping of jobs into working units.
E. the grouping of working units into departments or divisions.
7-2
10. When managers assign work activities to groups and individuals and coordinate the diverse
activities required to attain organizational objectives, they contribute to the development of
organizational
A. structure.
B. informality.
C. spontaneity.
D. growth.
E. accountability.
11. A department store's organizational structure defines the relationships between
A. salespersons and merchandise buyers.

B. credit managers and maintenance people.
C. department managers and customers.
D. maintenance people and salespersons.
E. all the individuals working together to achieve its objectives.
12. Which of the following requires an increasing degree of organizing within an organization?
A. Profits
B. Sales
C. Growth
D. Decline
E. Aging
13. Organizational cultures that lack positive values may result in
A. excessive profits.
B. inefficient division of labor.
C. productive and motivated employees.
D. unproductive and indifferent employees.
E. happy customers.
7-3
14. An organization's shared values, beliefs, traditions, philosophies, rules, and role models for
behavior represent its
A. formal organization.
B. information system.
C. organizational culture.
D. grapevine.
E. organizational manual.
Essay Questions
15. What is organizational culture and how is it expressed?
16. What is organizational structure? How does it develop?
7-4
17. The rationalization for specialization is that people can perform several tasks more efficiently than
just one.
True False
18. Departmentalization is the division of labor into small, specialized tasks and the assignment of
single tasks to employees.
True False
19. An advantage of functional departmentalization is that managers need only the skills that apply to
their department's function.
True False
20. Disadvantages of product departmentalization are that it duplicates functions and does not focus
on the organization's overall objectives.
True False
21. Product departmentalization allows the coordination of all activities related to a product or product
group and simplifies decision-making.
True False
22. The rationale for job specialization is that
A. it is more efficient.
B. workers become less bored.
C. workers shift from one job to another.
D. workers have fewer injuries.
E. it improves quality.
7-5
23. The benefits of division of labor were described in The Wealth of Nations by
A. Henry Ford.
B. John Adams.
C. Adam Smith.
D. Cyrus McCormick.
E. Sam Walton.
24. Adam Smith illustrated improvements in efficiency through the application of
A. departmentalization.
B. specialization.
C. generalization.
D. registration.
E. delegation.
25. Many experts believe people can perform most efficiently if they master just one task rather than
all tasks. A famous book that supports this point was published in 1776 and is titled
A. The Wealth of Nations.

B. The Principles of Scientific Management.
C. The Declaration of Independence.
D. The Prosperity of Specialization.
E. The 7 Habits of Highly Effective People.
26. Small businesses commonly employ
A. line departmentalization.
B. customer departmentalization.
C. functional departmentalization.
D. product departmentalization.
E. geographical departmentalization.
27. All of the following are approaches to departmentalization except
A. function.
B. product.
C. geographic region.
D. customer.
E. line.
7-6
28. A company that has departments for marketing, finance, personnel, and production is organized
by
A. product.
B. function.
C. territory.
D. customer.
E. geographic region.
29. If the type of departmentalization used by an organization tends to emphasize departmental units
rather than the organization as a whole and decision making is slow, then these would be
weaknesses indicative of _______ departmentalization.
A. territorial
B. functional
C. product
D. customer
E. process
30. _____ departmentalization arranges jobs around the needs of various types of customers.
A. Product
B. Functional
C. Geographical
D. Customer
E. Matrix
Essay Questions
7-7
31. What are some of the advantages of specialization? What are some of its disadvantages?
32. What are the different means of organizational departmentalization? Be sure to give an illustrative
example of each.
33. Accountability is the obligation employees have to carry out assigned tasks.
True False
34. In decentralized organizations, lower-level managers have a good understanding of their external
environment and need to react quickly to it.
True False
35. A wide span of management is best when a manager and subordinates are not in close
proximity.
True False
36. Flat organizations have narrow spans of management.
True False
7-8
37. A company with many layers of managers is considered tall.
True False
38. Which of the following concepts frees a manager to attend to matters that he or she is especially
qualified to deal with?
A. Delegation of authority
B. Responsibility
C. Accountability
D. Knowledge
E. Education
39. If Juan's manager gives him an assignment without providing Juan with the resources to
complete the assignment, Juan's manager is exhibiting improper
A. accountability.
B. organizational culture.
C. delegation of authority.
D. customer departmentalization.
E. centralization.
40. Joe is a copywriter in his company's marketing department. The copy for an ad placed in Time
magazine for his company spelled the company's name wrong. Who is ultimately responsible for
the mistake?
A. The copywriter
B. The marketing vice president
C. Time magazine
D. The customer
E. Nobody—things just happen
7-9
41. When the decisions of a company are very risky and low-level managers lack decision-making
skills, the company will tend to
A. decentralize.
B. delegate.
C. centralize.
D. organize.
E. specialize.
42. An organization operating in a complex and unpredictable environment is likely to be _______ in

order to improve responsiveness and enhance creativity.
A. highly centralized
B. decentralized
C. informal
D. formal
E. very productive
43. One of the things to consider when determining the appropriate span of management is
A. physical distances between subordinate and supervisor, and subordinate competence.

B. responsibilities of subordinate outside the organization.
C. organizational culture and ethical values.
D. the management style of the manager.
E. products that the company sells.
44. When superiors and subordinates are not in close proximity and the manager has many
responsibilities in addition to supervision, the appropriate span of management would be
A. big.
B. wide.
C. narrow.
D. flat.
E. circular.
7-10
45. Companies that have flat organizations tend also to have
A. tall spans of management.

B. minimal spans of management.
C. narrow spans of management.
D. short spans of management.
E. wide spans of management.
Essay Questions
46. What is a span of management? What are the differences between organizations with wide
versus narrow spans of management?
47. Define delegation of authority and show its relationship to responsibility.
7-11
48. Line structure is based on direct lines of authority from the top executive to the lowest level of
employee.
True False
49. The line-and-staff structure divides general managing duties into functional areas, each with a
separate supervisor.
True False
50. In a line-and-staff structure, staff managers do not have direct authority over line managers.
True False
51. Matrix structures are often complex and expensive, and can lead to confusion regarding who has
the ultimate authority.
True False
52. Multidivisional structures are not good at allowing for delegation of authority, and therefore do not
allow divisional and departmental managers a chance to specialize.
True False
53. Which of the following is not a basis for organizing using a multidivisional structure?
A. Geography
B. Project
C. Product
D. Customer
E. Function
7-12
54. An organizational form that is based on direct lines of authority from the top executive to the
lowest level of employees is called
A. line structure.
B. functional structure.
C. line-and-staff structure.
D. matrix structure.
E. a committee.
55. An advantage of line structure in organizations is
A. a clear chain of command.

B. a high level of centralization.
C. shared decision making.
D. that managers possess a wide range of knowledge.
E. there are many layers.
56. A disadvantage of line structure is
A. an unclear chain of command.

B. the speed of decision making.
C. that there are no direct lines of authority.
D. that it is very uncommon.
E. that managers must possess a wide range of knowledge and skills.
57. Which of the following organizational forms allows managers to take responsibility for the areas in
which they specialize?
A. Line structure
B. Functional structure
C. Line-and-staff structure
D. Matrix structure
E. A committee
7-13
58. Multidivisional structures
A. are temporary.
B. organize departments into larger divisions, often based on geography, product, and/or
customer.
C. bring together specialists from a variety of areas to work on a single project.
D. make slower decisions.
E. are less innovative but make quicker decisions.
59. Which of the following organizational forms is also called a project management structure?
A. Bureaucratic structure
B. Line structure
C. Multidivisional structure
D. Matrix structure
E. Line-and-staff structure
60. Which of the following organizational forms is most likely to be complex and expensive?
A. Line structure
D. Matrix structure
E. Committee
Essay Questions
61. What are the benefits and drawbacks of using a matrix structure to organize?
7-14
62. What is the difference between line structure and line-and-staff structure?
63. Regardless of how a business is organized, most of the essential work of business occurs in
individual work groups and teams.
True False
64. All groups are teams, but not all teams are groups.
True False
65. Teams can create more solutions for solving problems than individuals.
True False
66. Product-development teams are a special type of task force formed to devise, design, and
implement a new product.
True False
67. Quality assurance teams are groups of employees brought together to solve specific quality,
productivity, or service problems.
True False
7-15
68. Which of the following is formed to address specific quality, service, or productivity problems?
A. Self-directed work team

B. Product-development team
C. Work group
D. Quality-assurance team
E. Task force
69. Which of the following is a temporary group of employees, usually chosen for their expertise,
responsible for bringing out a specific change?

C. Work group
E. Task force
70. Work groups
A. have shared leadership roles.

B. have a specific purpose that the group itself delivers.
C. create collective work products.
D. have individual accountability.
E. encourage open-ended discussion.
71. Teams
A. have a strong, clearly focused leader.

B. have individual accountability.
C. share leadership and create collective work products.
D. run efficient meetings.
E. measure effectiveness indirectly.
72. A permanent, formal group that performs a specific task is a
A. task force.
B. product-development team.
C. project team.
D. committee.
E. self-directed work team.
7-16
73. A temporary group of employees responsible for bringing about a particular change is a
A. task force.
C. project team.
D. committee.
74. Project teams
A. are permanent, formal groups.

B. are composed of individuals from one functional area.
C. never last for more than six months.
D. run their operation and have control of a specific work project.
E. solve specific quality problems.
75. A special type of project team formed to devise, design, and implement a new product is a
A. product-development team.
B. committee.
C. task force.
D. coalition.
E. quality-assurance team.
Essay Questions
76. What is a self-directed work team?
7-17
77. Horizontal communication involves the traditional flow of information from upper organizational
levels downward.
True False
78. Downward communication typically involves directions, the assignment of tasks and
responsibilities, performance feedback, and certain details about the organization's strategies and
goals.
True False
79. The most significant informal communication occurs while playing golf.
True False
80. Communication flows within an organization are always formal.
True False
81. When individuals from different units and organizational levels communicate, it is diagonal
communication.
True False
82. Diagonal communication
A. is the traditional flow of communication from higher to lower levels of the organization.
B. occurs when individuals from different units and departments within an organization
communicate.
C. flows from lower organizational levels to higher ones.
D. occurs with communication between peers and colleagues.
E. is an informal method of communication in organizations that can improve decision making.
7-18
83. The increased use of electronic communication in the workplace has caused many organizations
to implement all but which of the following?
A. Formal policies on appropriate Internet use

B. Software programs to monitor employee Internet use
C. Most companies simply let employees do what they want on the Internet
D. Requiring employees to use corporate computers while at work
E. Consulting online resources on how to handle employee Internet usage
84. Which of the following is an informal communication channel?
A. Leaflets
B. Telecommunications
C. Job descriptions
D. Grievances
E. The grapevine
85. Which of the following is not typically part of downward communication?
A. Performance feedback
B. Assignment of tasks
C. Details on organizational strategy
D. Gossip
E. Directions
86. What is upward communication?
A. The traditional flow of communication from higher to lower levels of the organization
B. When individuals from different units and departments within an organization communicate
C. Communication that flows from lower organizational levels to higher ones
D. Communication between peers and colleagues
E. Communication among friends as well as in nonwork social relationships
87. Downward communication conveys
A. information about the grapevine.

B. explanations of decisions and orders.
C. complaints.
D. status reports.
E. policy questions.
7-19
88. Upward communication conveys
A. orders.
B. explanation of decisions.
C. requests for information.
D. progress reports and complaints.
E. information about procedures and methods.
89. When managers recognize that a grapevine exists, they should
A. eliminate it.
B. use it to their advantage by feeding it facts.
C. find out if its goals are contrary to the organization's goals.
D. send incorrect information through it.
E. send upward communications through it.
Essay Questions
90. How can managers use the "grapevine" to their advantage?
7-20
91. What did Quest Star do, structurally, to help it become more competitive with Japanese firms?
A. It increased the number of management layers

B. It flattened its layers of management
C. It reduced the emphasis on teams in the organization
D. It decided that its employees could not be trusted to make decisions
E. It increased managers' authority
92. Why are upper level managers facing frustration and increased stress as Quest Star transitions to
a new organizational structure?
A. They do not like their jobs

B. They are faced with training employees to supervise themselves
C. They miss the old system
D. The employees don't like the new system
E. Management does not trust employees to make decisions for themselves
Essay Questions
93. What techniques or skills should Quest Star employees have to assume a leadership role within a
work group?
7-21
94. If each Quest Star work group has a team representative, what problems will be faced in
supervising these representatives?
95. Evaluate the pros and cons of the system developed by Quest Star.
7-22
Chapter 07 Organization, Teamwork, and Communication Answer Key
1. Organizational culture is expressed informally through a firm's mission statement or code of

ethics.
FALSE
Examples of informal expressions of culture include dress codes (or the lack thereof), work
habits, extracurricular activities, and stories.
AACSB: Communication
Blooms: Remember
Learning Objective: 07-01 Define organizational structure; and relate how organizational structures develop.
Level of Difficulty: 1 Easy
Topic: Organizational Culture
2. Organizational structures are always explicitly defined.
FALSE
An organizational structure can be explicitly defined or merely implied.
AACSB: Reflective Thinking

Blooms: Understand
Topic: Developing Organizational Structure
3. An organization's structure develops as managers assign tasks to work groups and specific
individuals and coordinate the diverse activities required to attain organizational objectives.
TRUE
An organization's structure is created when managers assign work activities to work groups
and individuals, along with coordinating many different activities that are needed to reach the
organizational objectives.

Blooms: Remember
7-23
4. Organizational growth requires organizing different resources.
TRUE
Growth requires organizing—the structuring of human, physical, and financial resources to

achieve objectives in an effective and efficient manner.

Blooms: Remember
5. The more complex organizations become, the more they need to develop formal structures to
function efficiently.
TRUE
With more people and greater specialization, the organization needs to develop a formal
structure to function efficiently.

Blooms: Remember
Level of Difficulty: 2 Medium
6. Which of the following is not part of organizational culture?
A. Values
B. Beliefs
C. Role models
D. Religion
E. Traditions
Organizational culture is a firm's shared values, beliefs, traditions, philosophies, rules, and role
models for behavior.
AACSB: Diversity
Blooms: Understand
7-24
7. Which is not a means of formally expressing an organization's culture?
A. Ceremonies
B. Code of ethics
C. Mission statement
D. Manuals
E. Employee dress codes
A firm's culture may be expressed formally through its mission statement, codes of ethics,
memos, manuals, and ceremonies, but it is more commonly expressed informally.
AACSB: Diversity
Blooms: Understand
8. Dress codes, work habits, extracurricular activities, and stories are informal expressions of an
organization's
A. grapevine.
B. lack of organization.
C. informality.
D. culture.
E. formality.
Examples of informal expressions of culture include dress codes (or the lack thereof), work
habits, extracurricular activities, and stories.
AACSB: Diversity
Blooms: Understand
7-25
9. Organizational structure is defined as
A. the arrangement or relationship of positions within an organization.

B. a group of people working together to achieve an objective.
C. the division of labor into small specific tasks.
D. the grouping of jobs into working units.
E. the grouping of working units into departments or divisions.
Structure is the arrangement or relationship of positions within an organization.

Blooms: Remember
10. When managers assign work activities to groups and individuals and coordinate the diverse
activities required to attain organizational objectives, they contribute to the development of
organizational
A. structure.
B. informality.
C. spontaneity.
D. growth.
E. accountability.
An organization's structure develops when managers assign work tasks and activities to
specific individuals or work groups and coordinate the diverse activities required to reach the
firm's objectives.
Blooms: Remember
7-26
11. A department store's organizational structure defines the relationships between
A. salespersons and merchandise buyers.

B. credit managers and maintenance people.
C. department managers and customers.
D. maintenance people and salespersons.
E. all the individuals working together to achieve its objectives.
All the people occupying positions in the department store must work together to achieve the
store's objectives. The ways that they work together are defined by the store's organizational
structure.
Blooms: Apply
12. Which of the following requires an increasing degree of organizing within an organization?
A. Profits
B. Sales
C. Growth
D. Decline
E. Aging
Growth requires organizing.

Blooms: Remember
7-27
13. Organizational cultures that lack positive values may result in
A. excessive profits.
B. inefficient division of labor.
C. productive and motivated employees.
D. unproductive and indifferent employees.
E. happy customers.
Organizational cultures that lack positive values may result in unproductive and inefficient
employees, whose poor attitudes will be reflected externally to customers.

Blooms: Understand
Level of Difficulty: 3 Hard
14. An organization's shared values, beliefs, traditions, philosophies, rules, and role models for
behavior represent its
A. formal organization.
B. information system.
C. organizational culture.
D. grapevine.
E. organizational manual.
A firm's organizational culture is its shared values, beliefs, traditions, philosophies, rules, and
role models for behavior.
AACSB: Diversity
Blooms: Remember
Essay Questions
7-28
15. What is organizational culture and how is it expressed?
Organizational culture is a firm's shared values, beliefs, traditions, philosophies, rules, and role
models for behavior. It can be expressed formally through an organization's mission
statement, codes of ethics, memos, manuals, and ceremonies, but it is more commonly
expressed informally. Examples of informal expressions of culture include dress codes (or the
lack thereof), work habits, extracurricular activities, and stories. Employees often learn the
accepted standards through discussions with co-workers.

Blooms: Remember
16. What is organizational structure? How does it develop?
Organizational structure refers to the arrangement or relationship of positions within an

organization. This structure develops when managers assign work tasks and activities to
specific individuals or work groups and coordinate the diverse activities required to reach the
firm's objectives.

Blooms: Remember
17. The rationalization for specialization is that people can perform several tasks more efficiently
than just one.
FALSE
The rationale for specialization is efficiency; people can perform more efficiently if they master
just one task rather than all the tasks.

Blooms: Remember
Learning Objective: 07-02 Describe how specialization and departmentalization help an organization achieve its goals.
7-29
Topic: Assigning Tasks
18. Departmentalization is the division of labor into small, specialized tasks and the assignment of
single tasks to employees.
FALSE
Departmentalization is the grouping of jobs into working units usually called departments,
units, groups, or divisions.

Blooms: Remember
19. An advantage of functional departmentalization is that managers need only the skills that
apply to their department's function.
TRUE
Each of these functions is managed by an expert in the work done by the department—an
engineer supervises the production department; a financial executive supervises the finance
department, etc.

Blooms: Remember
20. Disadvantages of product departmentalization are that it duplicates functions and does not
focus on the organization's overall objectives.
TRUE
Organizing by products duplicates functions and resources and emphasizes the product rather
than achievement of the organization's overall objectives.

Blooms: Remember
7-30
21. Product departmentalization allows the coordination of all activities related to a product or
product group and simplifies decision-making.
TRUE
Product departmentalization organizes jobs around the products of the firm, simplifies decision
making, and helps coordinate all activities related to a product or product group.

Blooms: Remember
22. The rationale for job specialization is that
A. it is more efficient.
B. workers become less bored.
C. workers shift from one job to another.
D. workers have fewer injuries.
E. it improves quality.
The rationale for specialization is efficiency.

Blooms: Remember
7-31
23. The benefits of division of labor were described in The Wealth of Nations by
A. Henry Ford.
B. John Adams.
C. Adam Smith.
D. Cyrus McCormick.
E. Sam Walton.
In The Wealth of Nations, 18th-century economist Adam Smith discussed specialization, using
the manufacture of straight pins as an example.

Blooms: Remember
24. Adam Smith illustrated improvements in efficiency through the application of
A. departmentalization.
B. specialization.
C. generalization.
D. registration.
E. delegation.
Adam Smith used the concept of specialization to illustrate improvements in efficiency.

Blooms: Remember
7-32
25. Many experts believe people can perform most efficiently if they master just one task rather
than all tasks. A famous book that supports this point was published in 1776 and is titled
A. The Wealth of Nations.

B. The Principles of Scientific Management.
C. The Declaration of Independence.
D. The Prosperity of Specialization.
E. The 7 Habits of Highly Effective People.
Adam Smith wrote The Wealth of Nations to demonstrate specialization, the idea that people
can perform most efficiently if they master just one task rather than all tasks.

Blooms: Remember
26. Small businesses commonly employ
A. line departmentalization.
B. customer departmentalization.
C. functional departmentalization.
D. product departmentalization.
E. geographical departmentalization.
Functional departmentalization is common in small organizations.

Blooms: Remember
7-33
27. All of the following are approaches to departmentalization except
A. function.
B. product.
C. geographic region.
D. customer.
E. line.
Departments are commonly organized by function, product, geographic region, or customer.

Blooms: Remember
28. A company that has departments for marketing, finance, personnel, and production is
organized by
A. product.
B. function.
C. territory.
D. customer.
E. geographic region.
Functional departmentalization groups jobs that perform similar functional activities, such as
finance, manufacturing, marketing, and human resources.

Blooms: Remember
7-34
29. If the type of departmentalization used by an organization tends to emphasize departmental
units rather than the organization as a whole and decision making is slow, then these would
be weaknesses indicative of _______ departmentalization.
A. territorial
B. functional
C. product
D. customer
E. process
A weakness of functional departmentalization is that because it tends to emphasize

departmental units rather than the organization as a whole, decision making that involves
more than one department may be slow, and it requires greater coordination.

Blooms: Remember
30. _____ departmentalization arranges jobs around the needs of various types of customers.
A. Product
B. Functional
C. Geographical
D. Customer
E. Matrix
Customer departmentalization arranges jobs around the needs of various types of customers.

Blooms: Remember
Essay Questions
7-35
31. What are some of the advantages of specialization? What are some of its disadvantages?
Specialization, or division of labor, allows a company to divide work into small, specialized
tasks and assign employees to do each task. The advantage of specialization is that it
minimizes the time lost from workers shifting from one task to another. Thus, it improves
efficiency and quality.
However, overspecialization can result in bored and dissatisfied employees, poor quality work,
more injuries, and high employee turnover.

Blooms: Remember
32. What are the different means of organizational departmentalization? Be sure to give an
illustrative example of each.
The four means of departmentalization are functional, geographic, product, and customer.
Student's examples will vary, but be sure that they provide enough information to support their
example.

Blooms: Understand
33. Accountability is the obligation employees have to carry out assigned tasks.
FALSE
Accountability means that employees who accept an assignment have the authority to carry it
out and are answerable to a superior for the outcome.

Blooms: Remember
Learning Objective: 07-03 Determine how organizations assign responsibility for tasks and delegate authority.
7-36
Topic: Assigning Responsibility
34. In decentralized organizations, lower-level managers have a good understanding of their

external environment and need to react quickly to it.
TRUE
In decentralized business environments, lower-level managers who interact with the external
environment often develop a good understanding of it and thus are able to react quickly to
change.

Blooms: Understand
35. A wide span of management is best when a manager and subordinates are not in close
proximity.
FALSE
A narrow span of management is appropriate when superiors and subordinates are not in
close proximity, the manager has many responsibilities in addition to the supervision, the
interaction between superiors and subordinates is frequent, and problems are common.
Blooms: Remember
36. Flat organizations have narrow spans of management.
FALSE
Organizations with few layers are flat and have wide spans of management.
Blooms: Remember
7-37
37. A company with many layers of managers is considered tall.
TRUE
A company with many layers of managers is considered tall, and the span of management is
narrow.
Blooms: Remember
38. Which of the following concepts frees a manager to attend to matters that he or she is
especially qualified to deal with?
A. Delegation of authority
B. Responsibility
C. Accountability
D. Knowledge
E. Education
Delegation of authority frees a manager to concentrate on larger issues, such as planning and
dealing with problems and opportunities, that managers are more qualified to address.

Blooms: Remember
7-38
39. If Juan's manager gives him an assignment without providing Juan with the resources to
complete the assignment, Juan's manager is exhibiting improper
A. accountability.
B. organizational culture.
C. delegation of authority.
D. customer departmentalization.
E. centralization.
Delegation of authority involves giving employees not only tasks, but also the power to make
commitments, use resources, and take whatever actions are necessary to carry out those
tasks.

Blooms: Understand
40. Joe is a copywriter in his company's marketing department. The copy for an ad placed in Time
magazine for his company spelled the company's name wrong. Who is ultimately responsible
for the mistake?
A. The copywriter
B. The marketing vice president
C. Time magazine
D. The customer
E. Nobody—things just happen
The act of delegating authority to a subordinate does not relieve the superior of accountability
for the delegated job. Even though the vice president of marketing delegates work to
subordinates, he or she is still ultimately accountable to the president for all marketing
activities, including their mistakes.

Blooms: Apply
7-39
41. When the decisions of a company are very risky and low-level managers lack decision-making
skills, the company will tend to
A. decentralize.
B. delegate.
C. centralize.
D. organize.
E. specialize.
Businesses tend to be more centralized when the decisions to be made are risky and when
low-level managers are not highly skilled in decision making.

Blooms: Remember
42. An organization operating in a complex and unpredictable environment is likely to be _______

in order to improve responsiveness and enhance creativity.
A. highly centralized
B. decentralized
C. informal
D. formal
E. very productive
Decentralization is characteristic of organizations that operate in complex, unpredictable

environments.

Blooms: Remember
7-40
43. One of the things to consider when determining the appropriate span of management is
A. physical distances between subordinate and supervisor, and subordinate competence.

B. responsibilities of subordinate outside the organization.
C. organizational culture and ethical values.
D. the management style of the manager.
E. products that the company sells.
However, when superiors and subordinates are located close to one another, the manager
has few responsibilities other than supervision, the level of interaction between superiors and
subordinates is low, few problems arise, subordinates are highly competent, and a set of
specific operating procedures governs the activities of managers and their subordinates, a
wide span of management will be more appropriate.

Blooms: Remember
44. When superiors and subordinates are not in close proximity and the manager has many
responsibilities in addition to supervision, the appropriate span of management would be
A. big.
B. wide.
C. narrow.
D. flat.
E. circular.

Blooms: Understand
7-41
45. Companies that have flat organizations tend also to have
A. tall spans of management.

B. minimal spans of management.
C. narrow spans of management.
D. short spans of management.
E. wide spans of management.
Organizations with few layers are flat and have wide spans of management because
managers supervise larger number of employees and there are fewer organizational layers.

Blooms: Remember
Essay Questions
46. What is a span of management? What are the differences between organizations with wide
versus narrow spans of management?
Span of management refers to the number of subordinates who report to a particular manager.
A wide span of management exists when a manager directly supervises a very large number
of employees. A narrow span of management exists when a manager directly supervises only
a few subordinates.
The organization must consider factors when choosing the best span of management. A
narrow span of management is appropriate when superiors and subordinates are not in close
proximity, the manager has many responsibilities in addition to the supervision, the interaction
between superiors and subordinates is frequent, and problems are common. However, when
superiors and subordinates are located close to one another, the manager has few
responsibilities other than supervision, the level of interaction between superiors and
subordinates is low, few problems arise, subordinates are highly competent, and a set of
specific operating procedures governs the activities of managers and their subordinates, a
wide span of management will be more appropriate. Narrow spans of management are typical
in centralized organizations, while wide spans of management are more common in
decentralized firms.

Blooms: Remember
7-42
47. Define delegation of authority and show its relationship to responsibility.
The delegation of authority is the assigning of tasks to employees, giving them the power to
make commitments, use the resources, and take the actions that are necessary to accomplish
the tasks. Delegation creates a responsibility, or obligation, for the employee to carry out the
assigned task satisfactorily and makes the employee accountable for the proper execution of
the work. With many employees, this increased responsibility will lead to improved morale and
a greater drive to perform his or her job satisfactorily.

Blooms: Remember
48. Line structure is based on direct lines of authority from the top executive to the lowest level of
employee.
TRUE
Line structure, with its direct lines of authority that extend from the top manager to employees
at the lowest level of the organization, is the simplest organizational structure.

Blooms: Remember
Learning Objective: 07-04 Compare and contrast some common forms of organizational structure.
Topic: Forms of Organizational Structure
7-43
49. The line-and-staff structure divides general managing duties into functional areas, each with a
separate supervisor.
FALSE
The line-and-staff structure has a traditional line relationship between superiors and
subordinates, and specialized managers—called staff managers—are available to assist line
managers.

Blooms: Remember
50. In a line-and-staff structure, staff managers do not have direct authority over line managers.
TRUE
Staff managers do not have direct authority over line managers or over the line manager's
subordinates, but they do have direct authority over subordinates in their own departments.

Blooms: Remember
51. Matrix structures are often complex and expensive, and can lead to confusion regarding who
has the ultimate authority.
TRUE
Although matrix structures can foster flexibility, coordination, and creativity, they are
expensive, complex, and can create confusion as to which manager's authority has priority.

Blooms: Remember
7-44
52. Multidivisional structures are not good at allowing for delegation of authority, and therefore do
not allow divisional and departmental managers a chance to specialize.
FALSE
Multidivisional structures allow for delegation of authority, and therefore also allow divisional
and departmental managers a chance to specialize.

Blooms: Remember
53. Which of the following is not a basis for organizing using a multidivisional structure?
A. Geography
B. Project
C. Product
D. Customer
E. Function
Matrix structures are usually utilized for projects. Multidivisional structures can be organized
around geography, product, customer, function, or a combination.

Blooms: Remember
7-45
54. An organizational form that is based on direct lines of authority from the top executive to the
lowest level of employees is called
A. line structure.
B. functional structure.
C. line-and-staff structure.
D. matrix structure.
E. a committee.
A line structure has direct lines of authority that extend from the top manager to employees at
the lowest level of the organization.

Blooms: Remember
55. An advantage of line structure in organizations is
A. a clear chain of command.

B. a high level of centralization.
C. shared decision making.
D. that managers possess a wide range of knowledge.
E. there are many layers.
Line structures have a clear chain of command, which enables managers to make decisions
quickly.

Blooms: Remember
7-46
56. A disadvantage of line structure is
A. an unclear chain of command.

B. the speed of decision making.
C. that there are no direct lines of authority.
D. that it is very uncommon.
E. that managers must possess a wide range of knowledge and skills.
A line structure requires that managers possess a wide range of knowledge and skills.

Blooms: Remember
57. Which of the following organizational forms allows managers to take responsibility for the
areas in which they specialize?
A. Line structure
D. Matrix structure
E. A committee
In a line-and-staff structure, line managers can focus on their area of expertise in the operation
of the business, while staff managers provide advice and support to line departments on
specialized matters such as finance, engineering, human resources, and the law.

Blooms: Remember
7-47
58. Multidivisional structures
A. are temporary.
B. organize departments into larger divisions, often based on geography, product, and/or
customer.
C. bring together specialists from a variety of areas to work on a single project.
D. make slower decisions.
E. are less innovative but make quicker decisions.
A multidivisional structure organizes departments into larger groups called divisions. Just as
departments might be formed on the basis of geography, customer, product, or a combination
of these, so too divisions can be formed based on any of these methods of organizing.

Blooms: Remember
59. Which of the following organizational forms is also called a project management structure?
A. Bureaucratic structure
B. Line structure
C. Multidivisional structure
D. Matrix structure
E. Line-and-staff structure
The matrix structure is also called a project management structure because it is often set up
temporarily for interdepartmental projects. It superimposes the project structure on functional
structures.

Blooms: Understand
7-48
60. Which of the following organizational forms is most likely to be complex and expensive?
A. Line structure
D. Matrix structure
E. Committee
Matrix structures are generally expensive and quite complex, and employees may be
confused about whose authority has priority.

Blooms: Understand
Essay Questions
61. What are the benefits and drawbacks of using a matrix structure to organize?
Matrix structures provide flexibility, enhanced cooperation, and creativity, and they enable the
company to respond quickly to changes in the environment by giving special attention to
specific projects or problems. However, they are generally expensive and quite complex, and
employees may be confused as to whose authority has priority—the project manager's or the
immediate supervisor's.

Blooms: Remember
7-49
62. What is the difference between line structure and line-and-staff structure?
Line structure is based on direct lines of authority that extend from the top executive to
employees at the lowest level of the organization. The line-and-staff structure has a traditional
line relationship between superiors and subordinates, but includes staff managers to assist
line managers.

Blooms: Remember
63. Regardless of how a business is organized, most of the essential work of business occurs in
TRUE
Regardless of how they are organized, most of the essential work of business occurs in

Blooms: Remember
Learning Objective: 07-05 Distinguish between groups and teams; and identify the types of groups that exist in organizations.
Topic: The Role of Groups and Teams in Organizations
64. All groups are teams, but not all teams are groups.
FALSE
All teams are groups, but not all groups are teams.

Blooms: Remember
7-50
65. Teams can create more solutions for solving problems than individuals.
TRUE
Teams can create more solutions to problems than can individuals because multiple people
work together to solve the problem and bring different knowledge, skills and perspectives to
the table.
Blooms: Remember
66. Product-development teams are a special type of task force formed to devise, design, and
FALSE
Product development teams are a special type of project team formed to devise, design, and

Blooms: Remember
67. Quality assurance teams are groups of employees brought together to solve specific quality,
productivity, or service problems.
TRUE
Quality assurance teams are fairly small groups of workers brought together from throughout
the organization to solve specific quality, productivity, or service problems.

Blooms: Remember
7-51
68. Which of the following is formed to address specific quality, service, or productivity problems?

C. Work group
E. Task force
Quality-assurance teams, sometimes called quality circles, are fairly small groups of workers
brought together from throughout the organization to solve specific quality, productivity, or
service problems.
Blooms: Remember
69. Which of the following is a temporary group of employees, usually chosen for their expertise,
responsible for bringing out a specific change?

C. Work group
E. Task force
A task force is a temporary group of employees, usually chosen for their expertise, responsible
for bringing out a specific change.
Blooms: Remember
7-52
70. Work groups
A. have shared leadership roles.

B. have a specific purpose that the group itself delivers.
C. create collective work products.
D. have individual accountability.
E. encourage open-ended discussion.
Work groups emphasize individual work products, individual accountability, and even
individual leadership.
Blooms: Remember
71. Teams
A. have a strong, clearly focused leader.

B. have individual accountability.
C. share leadership and create collective work products.
D. run efficient meetings.
E. measure effectiveness indirectly.
Work teams share leadership roles, have both individual and mutual accountability, and create
collective work products.
Blooms: Remember
7-53
72. A permanent, formal group that performs a specific task is a
A. task force.
C. project team.
D. committee.
A committee is usually a permanent, formal group that does some specific task.

Blooms: Remember
73. A temporary group of employees responsible for bringing about a particular change is a
A. task force.
C. project team.
D. committee.
A task force is a temporary group of employees responsible for bringing about a particular
change.

Blooms: Remember
7-54
74. Project teams
A. are permanent, formal groups.

B. are composed of individuals from one functional area.
C. never last for more than six months.
D. run their operation and have control of a specific work project.
E. solve specific quality problems.
Project teams are similar to task forces, but they normally run their operation and have total
control of a specific work project.

Blooms: Remember
75. A special type of project team formed to devise, design, and implement a new product is a
A. product-development team.
B. committee.
C. task force.
D. coalition.
E. quality-assurance team.
A product-development team is a special type of project team formed to devise, design, and

Blooms: Remember
Essay Questions
7-55
76. What is a self-directed work team?
A self-directed work team is a group of employees responsible for an entire work process or
segment that delivers a product to an internal or external customer. These teams reduce the
need for extra layers of management and can help control costs.

Blooms: Remember
77. Horizontal communication involves the traditional flow of information from upper organizational
levels downward.
FALSE
Horizontal communication involves the exchange of information among colleagues and peers.

Blooms: Understand
Learning Objective: 07-06 Describe how communication occurs in organizations.
Topic: Communicating in Organizations
78. Downward communication typically involves directions, the assignment of tasks and
responsibilities, performance feedback, and certain details about the organization's strategies
and goals.
TRUE
Downward communication refers to the traditional flow of information from upper

organizational levels to lower levels. This type of communication typically involves directions,
the assignment of tasks and responsibilities, performance feedback, and certain details about
the organization's strategies and goals.

Blooms: Understand
7-56
79. The most significant informal communication occurs while playing golf.
FALSE
The most significant informal communication occurs through the grapevine.

Blooms: Understand
80. Communication flows within an organization are always formal.
FALSE
Along with the formal channels of communication, all firms communicate informally through
the grapevine which could improve decision making.

Blooms: Understand
81. When individuals from different units and organizational levels communicate, it is diagonal
communication.
TRUE
When individuals from different units and organizational levels communicate, it is known as
diagonal communication.

Blooms: Remember
7-57
82. Diagonal communication
A. is the traditional flow of communication from higher to lower levels of the organization.
B. occurs when individuals from different units and departments within an organization
communicate.
C. flows from lower organizational levels to higher ones.
D. occurs with communication between peers and colleagues.
E. is an informal method of communication in organizations that can improve decision
making.
Diagonal communication occurs when individuals from different units and departments within
an organization communicate.

Blooms: Understand
83. The increased use of electronic communication in the workplace has caused many
organizations to implement all but which of the following?
A. Formal policies on appropriate Internet use

B. Software programs to monitor employee Internet use
C. Most companies simply let employees do what they want on the Internet
D. Requiring employees to use corporate computers while at work
E. Consulting online resources on how to handle employee Internet usage
Most companies have taken steps to monitor and restrain employee Internet use while at
work. Excessive non-work-related Internet communications while on the job can result in lost
productivity and therefore lost profits for the company.

Blooms: Understand
7-58
84. Which of the following is an informal communication channel?
A. Leaflets
B. Telecommunications
C. Job descriptions
D. Grievances
E. The grapevine
The grapevine is the primary informal communication channel.

Blooms: Understand
85. Which of the following is not typically part of downward communication?
A. Performance feedback
B. Assignment of tasks
C. Details on organizational strategy
D. Gossip
E. Directions
Downward communication typically involves directions, the assignment of tasks and

and goals.

Blooms: Understand
7-59
86. What is upward communication?
A. The traditional flow of communication from higher to lower levels of the organization
B. When individuals from different units and departments within an organization communicate
C. Communication that flows from lower organizational levels to higher ones
D. Communication between peers and colleagues
E. Communication among friends as well as in nonwork social relationships
Upward communication flows from lower to higher levels of the organization and includes
information such as progress reports, suggestions for improvement inquiries, and grievances.

Blooms: Understand
87. Downward communication conveys
A. information about the grapevine.

B. explanations of decisions and orders.
C. complaints.
D. status reports.
E. policy questions.
Downward communication typically involves directions, the assignment of tasks and

and goals.

Blooms: Understand
7-60
88. Upward communication conveys
A. orders.
B. explanation of decisions.
C. requests for information.
D. progress reports and complaints.
E. information about procedures and methods.
Upward communication flows from lower to higher levels of the organization and includes
information such as progress reports, suggestions for improvement, inquiries, and grievances.

Blooms: Understand
89. When managers recognize that a grapevine exists, they should
A. eliminate it.
B. use it to their advantage by feeding it facts.
C. find out if its goals are contrary to the organization's goals.
D. send incorrect information through it.
E. send upward communications through it.
Managers who understand how the grapevine works also can use it to their advantage by
feeding it facts to squelch rumors and incorrect information.

Blooms: Remember
Essay Questions
7-61
90. How can managers use the "grapevine" to their advantage?
Managers who recognize the existence of a grapevine can use it to their advantage in several
ways. For one, they can use it as a "sounding device" regarding potential policy changes.
They can obtain valuable information that may facilitate decision making, although they should
verify all information, as grapevine information is not always accurate. Managers can attempt
to feed the grapevine facts to squelch rumors and incorrect information circulating through the
firm.

Blooms: Understand
91. What did Quest Star do, structurally, to help it become more competitive with Japanese firms?
A. It increased the number of management layers

B. It flattened its layers of management
C. It reduced the emphasis on teams in the organization
D. It decided that its employees could not be trusted to make decisions
E. It increased managers' authority
QS flattened its layers of management and instead uses teams and peer pressure to
accomplish the plant's goals.
AACSB: Analytic
Blooms: Apply
Learning Objective: 07-07 Analyze a business's use of teams.
Topic: Solve the Dilemma
7-62
92. Why are upper level managers facing frustration and increased stress as Quest Star
transitions to a new organizational structure?
A. They do not like their jobs

B. They are faced with training employees to supervise themselves
C. They miss the old system
D. The employees don't like the new system
E. Management does not trust employees to make decisions for themselves
Upper-level management is feeling increased stressed as QS transitions to the new

organizational structure because they have to train employees to supervise themselves and to
make decisions for themselves.
AACSB: Analytic
Blooms: Apply
Essay Questions
93. What techniques or skills should Quest Star employees have to assume a leadership role
within a work group?
To assume a leadership role within a work group, a Quest Star employee should have a very
good technical knowledge of the tasks conducted by the team. This individual should also
have some conceptual skills in order to relate the various activities performed within the group.
Finally, human relations skills are necessary for the leader to provide information to the rest of
the group and for the members of the group to give feedback to their leader.
AACSB: Analytic
Blooms: Apply
7-63
94. If each Quest Star work group has a team representative, what problems will be faced in
supervising these representatives?
Each team representative is likely to defend the interests of his or her own group and to
neglect the actions that may favor the performance of the other groups. In other words, the
degree of collaboration between teams is likely to be low.
AACSB: Analytic
Blooms: Apply
95. Evaluate the pros and cons of the system developed by Quest Star.
Students' responses will vary, but most will agree that the program introduced by QS is likely
to lead to greater employee involvement, innovation, improved collaboration between
employees of each team, and employees' enhanced sense of accomplishment. Overall, it is
likely to increase the firm's productivity and competitiveness. Students should be able to
defend their responses.
AACSB: Analytic
Blooms: Apply
7-64

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BUSINESS A CHANGING WORLD 9TH EDITION FERRELL

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Organization, Teamwork, and Communication

True / False Questions

1. Organizational culture is expressed informally through a firm's mission statement or code of

2. Organizational structures are always explicitly defined.

4. Organizational growth requires organizing different resources.

6. Which of the following is not part of organizational culture?

7. Which is not a means of formally expressing an organization's culture?

9. Organizational structure is defined as

A. the arrangement or relationship of positions within an organization.

11. A department store's organizational structure defines the relationships between

A. salespersons and merchandise buyers.

13. Organizational cultures that lack positive values may result in

15. What is organizational culture and how is it expressed?

16. What is organizational structure? How does it develop?

True / False Questions

Multiple Choice Questions

22. The rationale for job specialization is that

24. Adam Smith illustrated improvements in efficiency through the application of

A. The Wealth of Nations.

26. Small businesses commonly employ

27. All of the following are approaches to departmentalization except

True / False Questions

36. Flat organizations have narrow spans of management.

Multiple Choice Questions

42. An organization operating in a complex and unpredictable environment is likely to be _______ in

A. physical distances between subordinate and supervisor, and subordinate competence.

A. tall spans of management.

47. Define delegation of authority and show its relationship to responsibility.

True / False Questions

Multiple Choice Questions

55. An advantage of line structure in organizations is

A. a clear chain of command.

56. A disadvantage of line structure is

A. an unclear chain of command.

True / False Questions

Multiple Choice Questions

A. Self-directed work team

A. Self-directed work team

70. Work groups

A. have shared leadership roles.

A. have a strong, clearly focused leader.

72. A permanent, formal group that performs a specific task is a

74. Project teams

A. are permanent, formal groups.

76. What is a self-directed work team?

80. Communication flows within an organization are always formal.

Multiple Choice Questions

82. Diagonal communication

A. Formal policies on appropriate Internet use

84. Which of the following is an informal communication channel?

85. Which of the following is not typically part of downward communication?

86. What is upward communication?

87. Downward communication conveys

A. information about the grapevine.

89. When managers recognize that a grapevine exists, they should

90. How can managers use the "grapevine" to their advantage?

Multiple Choice Questions

A. It increased the number of management layers

A. They do not like their jobs

True / False Questions

1. Organizational culture is expressed informally through a firm's mission statement or code of