Test Bank for Organizational Theory Design and

Change 7th Edition Jones 0132729946

9780132729949
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Organizational Theory, Design, and Change, 7e (Jones)

Chapter 5 Designing Organizational Structure: Authority and Control

1) The shape of an organization, depicted by its organizational chart, determines how effectively
the organization's decision-making and communication systems work.
Answer: TRUE
Page Ref: 121
Difficulty: Easy
LO: 5-1

2) When each employee performs only a small part of a total task, identifying the employees
individual contribution to the task becomes easy.
Answer: FALSE
Page Ref: 122
Difficulty: Easy
LO: 5-1

3) As the number of levels in its managerial hierarchy increases, it becomes difficult for the
organization to control its members.
Answer: FALSE
Page Ref: 122
Difficulty: Easy
LO: 5-1

4) An organization in which the hierarchy has many levels relative to the size of the organization

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is known as an organic organization.
Answer: FALSE
Page Ref: 122
Difficulty: Easy
LO: 5-1

5) A tall organization has fewer managers to direct and control employees activities than a flat
organization with the same number of employees.
Answer: FALSE
Page Ref: 123
Difficulty: Easy
LO: 5-1

6) Research suggests that the increase in the size of the managerial component in an organization
is less than proportional to the increase in size of the organization as it grows.
Answer: TRUE
Page Ref: 123
Difficulty: Easy
LO: 5-1

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7) Most organizations have a pyramid-like structure with fewer and fewer managers at each level
up in the hierarchy.
Answer: TRUE
Page Ref: 123
Difficulty: Easy
LO: 5-1

8) As the number of levels in the hierarchy increases, the relative difference in the authority
possessed by managers at each level decreases.
Answer: TRUE
Page Ref: 126
Difficulty: Easy
LO: 5-2

9) Managers of a flat organization possess relatively less authority and responsibility than those
of a tall organization.
Answer: FALSE
Page Ref: 126
Difficulty: Easy
LO: 5-2

10) A flat organization has fewer managers and hierarchical levels than a tall organization.
Answer: TRUE
Page Ref: 126
Difficulty: Easy
LO: 5-2

11) The greater the number of managers the lower the bureaucratic costs.
Answer: FALSE
Page Ref: 126
Difficulty: Moderate
LO: 5-2

12) The greater the number of hierarchical levels in an organization, the lower the bureaucratic
costs.
Answer: FALSE
Page Ref: 126
Difficulty: Moderate
LO: 5-2

13) An organization with a tall structure will also experience fewer communication, motivation,
and cost problems than a flat organization.
Answer: FALSE
Page Ref: 127
Difficulty: Easy
LO: 5-2

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14) Parkinson's law states that "Work expands so as to fill the time available."
Answer: TRUE
Page Ref: 127
Difficulty: Easy
LO: 5-2

15) According to the principle of minimum chain of command, an organization should choose
the minimum number of hierarchical levels consistent with its goals and the environment in
which it operates.
Answer: TRUE
Page Ref: 127
Difficulty: Easy
LO: 5-2

16) A manager’s span of control includes subordinates he or she supervises directly and
subordinates that he or she supervises indirectly (by supervising their direct boss).
Answer: FALSE
Page Ref: 129
Difficulty: Moderate
LO: 5-2

17) If the span of control of each manager increases as the number of employee’s increases, then
the number of managers or hierarchical levels does not increase in proportion to increases in the
number of employees.
Answer: TRUE
Page Ref: 129
Difficulty: Easy
LO: 5-2

18) When subordinates tasks are complex and dissimilar, a manager’s span of control needs to be
wide.
Answer: FALSE
Page Ref: 130
Difficulty: Easy
LO: 5-2

19) Horizontal differentiation leads to the emergence of specialized subunits—functions or

divisions.
Answer: TRUE
Page Ref: 130
Difficulty: Easy
LO: 5-3

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20) If tasks are routine and similar so that all subordinates perform the same task, then the span
of control should be small.
Answer: FALSE
Page Ref: 130
Difficulty: Moderate
LO: 5-2

21) A manager's ability to supervise and control subordinates' behavior directly is limited by two
factors: the complexity and the interrelatedness of subordinates' tasks.
Answer: TRUE
Page Ref: 130
Difficulty: Easy
LO: 5-1

22) An increase in the horizontal differentiation leads to an increase in the vertical

differentiation.
Answer: TRUE
Page Ref: 132
Difficulty: Easy
LO: 5-2

23) Standardization makes it easier to increase span of control.

Answer: TRUE
Page Ref: 133
Difficulty: Easy
LO: 5-3

24) Decentralization enables even a relatively tall structure to be more flexible in its responses to
changes in the external environment.
Answer: TRUE
Page Ref: 133
Difficulty: Easy
LO: 5-3

25) Decentralization does not eliminate the need for many hierarchical levels in a large and
complex organization.
Answer: TRUE
Page Ref: 133
Difficulty: Easy
LO: 5-3

26) According to Weber, rational-legal authority emerges due to qualities that a person possess,
such as charisma or wealth.
Answer: FALSE
Page Ref: 135
Difficulty: Moderate
LO: 5-3
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27) In a bureaucracy, obedience is owed to a person because of the level of authority and
responsibility associated with the organizational position the person occupies.
Answer: TRUE
Page Ref: 135
Difficulty: Easy
LO: 5-4

28) Weber's first principle indicates that choices affecting the design of an organization's
hierarchy should be based on the needs of the task, not on the needs of the person performing the
task.
Answer: TRUE
Page Ref: 135
Difficulty: Easy
LO: 5-4

29) According to Weber's third principle of bureaucratic structure, a role's task responsibility and
decision-making authority and its relationship to other roles in the organization should be clearly
specified.
Answer: TRUE
Page Ref: 135
Difficulty: Easy
LO: 5-4

30) Role ambiguity occurs when two or more people have different views of what another person
should do and, as a result, make conflicting demands on the person.
Answer: FALSE
Page Ref: 136
Difficulty: Easy
LO: 5-4

31) Role conflict occurs when a person's tasks or authority are not clearly defined and the person
becomes afraid to act on or take responsibility for anything.
Answer: FALSE
Page Ref: 136
Difficulty: Easy
LO: 5-4

32) The primary advantage of a bureaucracy is that it lays out the ground rules for designing an
organizational hierarchy that efficiently controls interactions between organizational levels.
Answer: TRUE
Page Ref: 137
Difficulty: Easy
LO: 5-4

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33) In a bureaucratic organization, individuals can be held accountable for what they do, and
such accountability reduces the transaction costs.
Answer: TRUE
Page Ref: 138
Difficulty: Easy
LO: 5-4

34) Contingent workers are employees who belong to self-managed teams.

Answer: FALSE
Page Ref: 142
Difficulty: Easy
LO: 5-5

35) Contingent workers do not receive indirect benefits such as health insurance or pensions.
Answer: TRUE
Page Ref: 142
Difficulty: Easy
LO: 5-5

36) An organization in which the hierarchy has many levels relative to the size of the
organization is a(n) ________ organization.
A) tall
B) flat
C) decentralized
D) organic
Answer: A
Page Ref: 122
Difficulty: Easy
LO: 5-1

37) Which of the following is most likely to be done by an organization to improve its ability to
control its members and influence their behavior?
A) increase the use of self-managed team
B) increase employee empowerment
C) increase the number of levels in its managerial hierarchy
D) increase the extent of decentralization
Answer: C
Page Ref: 122
Difficulty: Easy
LO: 5-1

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38) Which of the following statements is true regarding direct supervision?
A) Direct supervision allows managers to ensure that subordinate are not hiding any crucial
information.
B) The method of direct supervision is more effective in flat rather than tall organizations.
C) Direct supervision is not suitable for on-the-job task learning.
D) The method of direct supervision is more effective in organic rather than in inorganic
structure.
Answer: A
Page Ref: 122
Difficulty: Easy
LO: 5-1

39) Which of the following statements is most likely to be true regarding a tall organization?
A) A tall organization has few levels in its hierarchy relative to its size.
B) Generally organizations with less than 1000 employees have tall structures.
C) A tall organization has more managers to direct and control employees' activities than does a
flat organization with the same number of employees.
D) The taller an organization, the more decentralized are its operations.
Answer: C
Page Ref: 123
Difficulty: Easy
LO: 5-1

40) As an organization grows, ________.

A) an increase in the number of managers is more than proportional to the increase in size
B) an increase in the number of managers is less than proportional to the increase in size
C) an increase in the number of managers is proportional to the increase in size
D) the number of managers remains constant
Answer: B
Page Ref: 123
Difficulty: Easy
LO: 5-1

41) Which of the following statements is true regarding organizational structure?

A) As the number of levels in the hierarchy increases, the relative difference in the authority
possessed by managers at each level increases.
B) Most organizations have the same number of managers at all levels in the organization.
C) As the number of hierarchical levels increases, the number of communication problems
decreases.
D) Most organizations have a pyramid-like structure and fewer and fewer managers at each level
up in the hierarchy.
Answer: D
Page Ref: 123
Difficulty: Moderate
LO: 5-1

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42) An organization that has few levels in its hierarchy relative to its size is known as a
________ organization.
A) tall
B) flat
C) formalized
D) standardized
Answer: B
Page Ref: 123
Difficulty: Easy
LO: 5-1

43) Research evidence suggests that an organization with 3,000 employees is most likely to have
________ levels in its hierarchy.
A) five
B) six
C) seven
D) nine
Answer: C
Page Ref: 123
Difficulty: Easy
LO: 5-1

44) As the number of hierarchical levels increases, ________.

A) the degree of formalization decreases
B) the possibility that the information will be distorted decreases
C) the degree of decentralization increases
D) communication problems get progressively worse
Answer: D
Page Ref: 125
Difficulty: Moderate
LO: 5-2

45) As ________, the relative difference in the authority possessed by managers at each level in
the organizational hierarchy decreases.
A) the number of shareholders of an organization decreases
B) the number of levels in the hierarchy increases
C) the total number of employees in the organization decreases
D) the degree of centralization of the organizational structure increases
Answer: B
Page Ref: 126
Difficulty: Easy
LO: 5-2

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46) Which of the following statements is true regarding a flat organization?
A) A flat organization has more managers than a tall organization.
B) The flatter the organization, the less motivated are the employees.
C) Managers of a flat organization possess relatively more authority than those of a tall
organization.
D) A flat organization has more hierarchical levels than a tall organization.
Answer: C
Page Ref: 126
Difficulty: Easy
LO: 5-2

47) Adding more managers to a company is most likely to result in ________.

A) increase in the degree of centralization
B) flattening of the organizational structure
C) higher bureaucratic costs
D) decrease in the number of hierarchical levels
Answer: C
Page Ref: 126
Difficulty: Moderate
LO: 5-2

48) Which of the following is most likely to increase the bureaucratic costs?
A) changing the organization structure from functional to divisional
B) decreasing the number of managers
C) increasing the number of hierarchical levels
D) decreasing the level of standardization
Answer: C
Page Ref: 126
Difficulty: Moderate
LO: 5-2

49) Which of the following observations made by Parkinson led to the development of the
Parkinson's law?
A) A division of labor increases efficiency.
B) As the number of levels in the hierarchy increases, the quality of the communication
improves.
C) The use of flat organization structure improves the motivation of the employees.
D) Managers seek to increase the number of their subordinates.
Answer: D
Page Ref: 127
Difficulty: Easy
LO: 5-2

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50) The ________ states that work expands to fill the time available.
A) Parkinson's law
B) principle of the minimum chain of command
C) Gissel doctrine
D) Bradford's law
Answer: A
Page Ref: 127
Difficulty: Easy
LO: 5-2

51) According to the principle of minimum chain of command, ________.

A) managers seek to increase the number of their subordinates so as to improve their status in the
organization
B) an organization should be kept as flat as possible
C) the use of functional organizational structure improves the speed of decision-making
D) an increase in the number of hierarchical levels leads to an increase in the bureaucratic costs
Answer: B
Page Ref: 127
Difficulty: Moderate
LO: 5-2

52) According to the principle of ________, an organization should choose the minimum number
of hierarchical levels consistent with its goals and the environment in which it operates.
A) economies of scope
B) minimum chain of command
C) unity of direction
D) horizontal differentiation
Answer: B
Page Ref: 127
Difficulty: Easy
LO: 5-2

53) As compared to a tall organization, an organization with a flat structure is most likely to
experience ________.
A) more communication problems
B) fewer motivation problems
C) fewer benefits of economies of scope
D) higher bureaucratic costs
Answer: B
Page Ref: 127
Difficulty: Moderate
LO: 5-2

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54) Rose supervises Iris, who in turn supervises Violet and Daisy. Violet has four subordinates
and Daisy has six. Which of the following options represents the accurate spans of control for
each of these supervisors?
A) Rose 13, Iris 2, Violet 4, Daisy 6
B) Rose 13, Iris 12, Violet 4, Daisy 6
C) Rose 1, Iris 2, Violet 4, Daisy 6
D) Rose 3, Iris 12, Violet 4, Daisy 6
Answer: C
Page Ref: 129
Difficulty: Easy
LO: 5-2

55) Which of the following terms refers to the number of subordinates a manager directly
supervises?
A) span of control
B) chain of authority
C) degree of standardization
D) level of centralization
Answer: A
Page Ref: 129
Difficulty: Easy
LO: 5-2

56) Which of the following is one of the ways in which an organization can avoid becoming too
tall yet maintain effective control of its workforce?
A) encouraging upward communication but discouraging downward communication
B) conducting 360 degrees appraisal of the employees
C) increasing its managers' span of control
D) increasing the number of levels in the hierarchy
Answer: C
Page Ref: 129
Difficulty: Moderate
LO: 5-2

57) Which of the following is most likely to happen if the span of control is too wide?
A) The speed of decision-making will increase.
B) The number of managers at the higher levels in the hierarchy will be more than the number of
managers at the lower levels in the hierarchy.
C) The division of labor will be too low.
D) Subordinates will shirk responsibility.
Answer: D
Page Ref: 130
Difficulty: Easy
LO: 5-2

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58) It is more difficult to increase the span of control when ________.
A) tasks are routine or similar
B) tasks are highly interrelated
C) the structure of the organization is highly decentralized
D) the organization operates in a stable environment
Answer: B
Page Ref: 130
Difficulty: Easy
LO: 5-2

59) Under which of the following situations is it easier to increase the span of control?
A) The tasks are routine.
B) The tasks are complex.
C) The tasks are highly interrelated.
D) The tasks need to be performed by highly skilled professionals.
Answer: A
Page Ref: 130
Difficulty: Easy
LO: 5-2

60) A manager associated with which of the following entities is most likely to have the widest
span of control?
A) a plant that produces hammers
B) a science lab that does complex genetic research
C) a plant that manufactures airplanes
D) an R&D department in a drug manufacturing company
Answer: A
Page Ref: 130
Difficulty: Easy
LO: 5-2

61) When there are limits on the usefulness of direct, personal supervision by managers,
organizations have to find other ways to control their activities. In such a situations, which of the
following, typically, is the first step taken by the organizations?
A) decreasing the level of standardization
B) increasing the level of horizontal differentiation
C) increasing the division of labor
D) increasing the span of control
Answer: B
Page Ref: 130
Difficulty: Moderate
LO: 5-3

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62) Which of the following functions will most likely have the tallest hierarchy?
A) Manufacturing
B) Sales
C) R&D
D) Accounting
Answer: A
Page Ref: 131
Difficulty: Easy
LO: 5-3

63) Usually, Sales has a relatively ________ hierarchy because supervisors use ________.
A) flat; centralization
B) flat; standardization
C) tall; centralization
D) tall; standardization
Answer: B
Page Ref: 131
Difficulty: Easy
LO: 5-3

64) Which of the following factors is most likely to increase vertical differentiation within an
organization because it leads to the creation of many subunit hierarchies within the organization?
A) increasing level of formalization
B) increasing employee empowerment
C) increasing horizontal differentiation
D) increasing upward communication but decreasing downward communication
Answer: C
Page Ref: 132
Difficulty: Moderate
LO: 5-3

65) As the hierarchy of an organization becomes taller, ________.

A) the number of managers decreases drastically
B) the process of coordination gets simplified
C) the complexity of the organization's specific environment increases
D) managers begin to spend more and more time monitoring and supervising their subordinates
Answer: D
Page Ref: 132
Difficulty: Easy
LO: 5-3

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66) When authority is ________, the authority to make significant decisions is delegated to
people throughout the hierarchy, not concentrated at the top.
A) standardized
B) formalized
C) decentralized
D) differentiated
Answer: C
Page Ref: 132
Difficulty: Easy
LO: 5-3

67) Which of the following is the most direct effect of decentralization?

A) the time required to make decisions increases
B) the flexibility of the organization decreases
C) the specific environment of the organization gets stabilized
D) the monitoring burden on top managers is reduced
Answer: D
Page Ref: 132
Difficulty: Easy
LO: 5-3

68) Which of the following actions most likely enables even a relatively tall structure to be more
flexible in its responses to changes in the external environment?
A) promoting downward communication and discouraging upward communication
B) increasing the specialization and division of labor
C) increasing vertical differentiation
D) decentralizing authority
Answer: D
Page Ref: 133
Difficulty: Moderate
LO: 5-3

69) Which of the following is most likely to be the effect of standardization?

A) The actions of the employees become predictable.
B) Managers span of control decreases.
C) The number of levels in the hierarchy increases.
D) The need for division of labor decreases.
Answer: A
Page Ref: 133
Difficulty: Moderate
LO: 5-3

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70) Standardization ________.
A) enables a manager to increase his or her span of control
B) makes it necessary to increase the number of levels in the hierarchy
C) increases the need for direct supervision
D) can be used only in a highly centralized organization
Answer: A
Page Ref: 133
Difficulty: Moderate
LO: 5-3

71) Which of the following terms refers to a form of organizational structure in which people can
be held accountable for their actions because they are required to act in accordance with well-
specified and agreed-upon rules and standard operating procedures?
A) an organic organization
B) a bureaucracy
C) a matrix organization
D) an autocracy
Answer: B
Page Ref: 134
Difficulty: Easy
LO: 5-3

72) ________, a German sociologist, developed bureaucratic organizing principles that underlie
effective organizational structure.
A) Frederick Herzberg
B) Abraham Maslow
C) Max Weber
D) Daniel Bell
Answer: C
Page Ref: 134
Difficulty: Easy
LO: 5-4

73) Weber's bureaucratic model is based on ________ authority.

A) traditional
B) elected
C) rational-legal
D) charismatic
Answer: C
Page Ref: 134
Difficulty: Easy
LO: 5-4

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74) Which of the following is one of Weber's bureaucratic principles?
A) A tall organization should use a decentralized organizational structure and narrow span of
control.
B) In order to decrease environmental complexity, an organization should centralize its
operations.
C) Organizational roles are held on the basis of technical competence.
D) Employees should be allowed to participate in decision-making.
Answer: C
Page Ref: 134
Difficulty: Moderate
LO: 5-4

75) With reference to Weber's principles of bureaucratic structure, which of the following terms
refers to the authority a person possesses because of his or her position in an organization?
A) rational-legal authority
B) transactional authority
C) charismatic authority
D) transformational authority
Answer: A
Page Ref: 135
Difficulty: Easy
LO: 5-4

76) According to Weber's principles of bureaucratic structure, the authority a person possesses
results from ________.
A) the person's social status
B) the position of the person in the organization
C) the educational qualification of the person
D) the person's charisma
Answer: B
Page Ref: 135
Difficulty: Easy
LO: 5-4

77) Which of the following statements is true according to Weber's principles of bureaucratic
structure?
A) Classroom training should be given to all the employees to improve their theoretical
knowledge.
B) In a stable environment, an organization should use a centralized organizational structure with
narrow spans of control.
C) A role's task responsibility and decision-making authority should be clearly specified.
D) A 360 degrees appraisal should be conducted for all the employees at least twice a year.
Answer: C
Page Ref: 135
Difficulty: Moderate
LO: 5-4

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78) Role ________ occurs when two or more people have different views of what another person
should do, and as a result, make opposing demands on the person.
A) conflict
B) divergence
C) contravention
D) ambiguity
Answer: A
Page Ref: 136
Difficulty: Easy
LO: 5-4

79) Joe, an accountant, works for Jack and Judy. Jack told Joe to use the straight-line method for
calculating depreciation, and Judy told Joe to use the double-declining-balance method to
compute depreciation. Joe is experiencing a role ________.
A) divergence
B) ambiguity
C) conflict
D) contravention
Answer: C
Page Ref: 136
Difficulty: Moderate
LO: 5-4

80) Role ________ occurs when a person's tasks or authority are not clearly defined and the
person becomes afraid to act on or take authority for anything.
A) conflict
B) ambiguity
C) struggle
D) divergence
Answer: B
Page Ref: 136
Difficulty: Easy
LO: 5-4

81) Bob and Amy are simply instructed to attract new clients, but are not given specific
guidelines regarding how to accomplish this goal. Because they work for a conservative
company, they are afraid to take risks. Bob and Amy are experiencing a role ________.
A) ambiguity
B) conflict
C) divergence
D) contravention
Answer: A
Page Ref: 136
Difficulty: Moderate
LO: 5-4

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82) Which of the following characteristics of an organization is recommended by Weber's
principles of bureaucratic structure?
A) loosely defined roles
B) a small span of control
C) use of standard operating procedures
D) decentralization
Answer: C
Page Ref: 136
Difficulty: Easy
LO: 5-4

83) Which of the following types of organizations is most likely to be characterized by clearly
defined roles, decision-making authority, rules, and standard operating procedures?
A) an organic organization
B) a bureaucratic organization
C) a flat organization
D) a vertically differentiated organization
Answer: B
Page Ref: 136
Difficulty: Easy
LO: 5-4

84) Weber's principles can help a CEO with his or her responsibility for ________.
A) selecting the top-management team
B) designing the organizational hierarchy
C) allocating resources to divisions
D) determining the goals of an organization
Answer: B
Page Ref: 137
Difficulty: Moderate
LO: 5-4

85) Bureaucracy ________.

A) hinders integration within the organization
B) increases transaction costs
C) separates the position from the person
D) hinders a company’s ability to compete in the marketplace against other organizations for
scarce resources
Answer: C
Page Ref: 138
Difficulty: Moderate
LO: 5-4

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86) Which of the following is a potential disadvantage of a bureaucratic structure?
A) stagnation
B) role conflict
C) lack of standard operating procedures
D) role ambiguity
Answer: A
Page Ref: 138
Difficulty: Easy
LO: 5-4

87) In the case of a bureaucracy, if managers fail to control the development of the
organizational hierarchy properly then the organization is most likely to become ________.
A) flexible
B) decentralized
C) unresponsive to the needs of customers
D) very flat
Answer: C
Page Ref: 139
Difficulty: Easy
LO: 5-4

88) Which of the following is one of the important trends that is accelerating as the result of
advances in IT?
A) conducting classroom training for newly hired employees
B) using self-managed teams
C) using a highly centralized organizational structure
D) using a tall organizational hierarchy with several levels
Answer: B
Page Ref: 141
Difficulty: Moderate
LO: 5-5

89) ________ teams are formal work groups consisting of people who are jointly responsible for
ensuring that the team accomplishes its goals and who are empowered to lead themselves.
A) Transitory
B) Contingent
C) Self-managed
D) Transactional
Answer: C
Page Ref: 142
Difficulty: Easy
LO: 5-4

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90) ________ is the process of giving employees throughout the organization the authority to
make important decisions and to be responsible for their outcomes.
A) Empowerment
B) Value engineering
C) Operant conditioning
D) Reciprocal logrolling
Answer: A
Page Ref: 142
Difficulty: Easy
LO: 5-5

91) Which of the following statements is true regarding contingent workers?

A) Contingent workers are highly useful in developing core competences.
B) Contingent workers receive indirect benefits such as health insurance or pensions.
C) Coordinating and motivating contingent workers is difficult.
D) Contingent workers increase operating costs.
Answer: C
Page Ref: 142
Difficulty: Moderate
LO: 5-5

92) ________ teams are work groups consisting of people from different work areas who are
empowered to direct and coordinate different projects.
A) Contingent
B) Transactional
C) Cross-functional
D) Transitory
Answer: C
Page Ref: 142
Difficulty: Easy
LO: 5-5

93) What are the two things that an organization can do to improve its ability to control?
Answer: An organization can do two things to improve its ability to control—that is, coordinate
and motivate—its members: (1) It increases the number of managers it uses to monitor, evaluate,
and reward employees; and (2) it increases the number of levels in its managerial hierarchy so
that the hierarchy of authority becomes taller over time.
Page Ref: 122
Difficulty: Easy
LO: 5-1

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94) Discuss the significance of direct supervision.
Answer: Direct supervision allows managers to shape and influence the behavior of
subordinates as they work face to face in the pursuit of a company's goals. Direct supervision is a
vital method of control because managers can continually question, probe, and consult with
subordinates about problems or new issues they are facing to get a better understanding of the
situation. It also ensures that subordinates are performing their work effectively and not hiding
any information that could cause problems down the line. Personal control also creates greater
opportunity for on-the-job task learning to occur and competences to develop, as well as greater
opportunities to prevent free-riding or shirking. Moreover, when managers personally supervise
subordinates, they lead by example and in this way can help subordinates develop and increase
their personal management skills.
Page Ref: 122
Difficulty: Moderate
LO: 5-1

95) What is the major difference between a tall organization and a flat organization?
Answer: A tall organization is an organization in which the hierarchy has many levels relative to
the size of the organization. Whereas, a flat organization is an organization that has few levels in
its hierarchy relative to its size.
Page Ref: 122-123
Difficulty: Easy
LO: 5-1

96) What are the various problems with tall hierarchies?

Answer: The various problems with tall hierarchies are:
1. Communication problems: As the chain of command lengthens, communication between
managers at the top and bottom of the hierarchy takes longer. decision-making slows, and the
slowdown hurts the performance of organizations that need to respond quickly to customers'
needs or the actions of competitors.
2. Motivation problems: As the number of levels in the hierarchy increases, the relative
difference in the authority possessed by managers at each level decreases, as does their area of
responsibility. This leads to lower levels of motivation.
3. Bureaucratic costs: The greater the number of managers and hierarchical levels, the greater the
bureaucratic costs—that is, the costs associated with running and operating an organization.
Page Ref: 124-126
Difficulty: Moderate
LO: 5-2

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97) Discuss the Parkinson's law problem.
Answer: Parkinson argued that growth in the number of managers and hierarchical levels is
controlled by two principles: (1) "An official wants to multiply subordinates, not rivals," and (2)
"Officials make work for one another."

Managers value their rank, grade, or status in the hierarchy. Managers seek to increase the
number of their subordinates. In turn, these subordinates realize the status advantages of having
subordinates, so they try to increase the number of their subordinates, causing the hierarchy to
become taller and taller. As the number of levels increases, managers must spend more of their
time monitoring and controlling the actions and behaviors of their subordinates and thus create
unnecessary work for themselves.
Page Ref: 127
Difficulty: Moderate
LO: 5-2

98) What is the principle of minimum chain of command?

Answer: According to the principle of minimum chain of command, an organization should
choose the minimum number of hierarchical levels consistent with its goals and the environment
in which it operates. In other words, an organization should be kept as flat as possible, and top
managers should be evaluated for their ability to monitor and control its activities with the fewest
managers possible.
Page Ref: 127
Difficulty: Easy
LO: 5-2

99) Define span of control. What are the various factors that affect the span of control?
Answer: The number of subordinates a manager directly manages is known as span of control.
Perhaps the single most important factor limiting the managerial span of control is the inability
to exercise adequate supervision over the activities of subordinates as they grow in number.
Research has shown that an arithmetic increase in the number of subordinates is accompanied by
an exponential increase in the number of subordinate relationships that a manager has to
supervise. When subordinates' tasks are complex and dissimilar, a manager's span of control
needs to be small. If tasks are routine and similar so that all subordinates perform the same task,
the span of control can be widened. Managers supervising subordinates who perform highly
complex, interrelated tasks have a much narrower span of control than managers supervising
workers who perform separate, relatively routine tasks.
Page Ref: 129-130
Difficulty: Moderate
LO: 5-2

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100) Discuss the significance of decentralization.
Answer: As the hierarchy becomes taller and the number of managers increases, communication
and coordination problems grow. Managers begin to spend more and more time monitoring and
supervising their subordinates and less time planning and goal setting, and organizational
effectiveness suffers. One solution to this problem is to decentralize authority because now less
direct managerial supervision is needed. When authority is decentralized, the authority to make
significant decisions is delegated to people throughout the hierarchy, not concentrated at the top.
The delegation of authority to lower-level managers reduces the monitoring burden on top
managers and reduces the need for "managers to monitor managers."
Page Ref: 132
Difficulty: Moderate
LO: 5-3

101) List the six bureaucratic principles developed by Max Weber.

Answer: The six bureaucratic principles developed by Max Weber are:
Principle One: A bureaucracy is founded on the concept of rational-legal authority.
Principle Two: Organizational roles are held on the basis of technical competence.
Principle Three: A role's task responsibility and decision-making authority and its relationship to
other roles should be clearly specified.
Principle Four: The organization of roles in a bureaucracy is such that each lower office in the
hierarchy is under the control and supervision of a higher office.
Principle Five: Rules, standard operating procedures, and norms should be used to control the
behavior and the relationship between roles in an organization.
Principle Six: Administrative acts, decisions, and rules should be formulated and put in writing.
Page Ref: 134
Difficulty: Moderate
LO: 5-4

102) What is management by objectives?

Answer: Management by objectives (MBO) is a system of evaluating subordinates on their
ability to achieve specific organizational goals or performance standards and to meet operating
budgets. Most organizations make some use of MBO because it is pointless to establish goals
and then fail to evaluate whether or not they are being achieved. MBO involves three specific
steps:
Step 1: Specific goals and objectives are established at each level of the organization.
Step 2: Managers and their subordinates together determine the subordinates' goals.
Step 3: Managers and their subordinates periodically review the subordinates' progress toward
meeting goals.
Page Ref: 139
Difficulty: Easy
LO: 5-4

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