Management 9th Edition Daft Test Bank

Management 9th Edition Daft Test Bank
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Chapter 9—Designing Adaptive Organizations
TRUE/FALSE
1. The deployment of organizational resources to achieve strategic goals refers to organizing.
ANS: T PTS: 1 DIF: 1 REF: 244

NAT: AACSB Analytic | Creation of Value TYP: F
2. Organizing defines what to do while strategy defines how to do it.
ANS: F PTS: 1 DIF: 2 REF: 244

3. Strategy defines what to do; organizing defines how to do it.

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

5. A structure graph is a visual representation of an organization's structure, showing communication

and lines of power.

6. Despite the apparent advantages of specialization, many organizations are moving away from this
principle.

7. The idea that organizations develop a well-defined line of authority in the organization that
includes all employees is suggested by the virtual network approach.

8. The principle of unity of command suggests that managers within an organization should reach
agreement on the goals and objectives of the organization.

259
260 Chapter 9/Designing Adaptive Organizations
9. Authority is the right to use resources, make decisions and issue orders in an organization.

10. The duty to perform the task or activity an employee has been assigned is called accountability.

11. The flip side of the authority coin is responsibility.

12. Most organizations today discourage managers to delegate authority to the lower levels given the
challenges to meet customer needs and adapt to the environment.

13. Staff departments perform tasks that reflect the organization's primary goal and mission.

14. The right to advise, recommend, and counsel in the staff specialists' area of expertise is included in
staff authority.

15. The number of employees reporting to a supervisor is his or her span of management.

16. People in management positions have formal authority to direct and control immediate
subordinates.

17. According to MANAGER'S SHOPTALK in Chapter 9, the attempt by top management to

decentralize decision making often gets bogged down because middle manager are unable to
delegate.

Chapter 9/Designing Adaptive Organizations 261
18. According to MANAGER'S SHOPTALK in Chapter 9, managers are most comfortable making
familiar decisions.

NAT: AACSB Analytic | Strategy TYP: F
19. A relatively few hierarchical levels and a correspondingly narrow span of management refers to a
flat structure.

20. The trend in recent years has been toward narrower spans of control as a way to facilitate
delegation.

21. A tall structure is a management structure characterized by an overall narrow span of management
and a relatively large number of hierarchical levels.

22. Certainty in the environment is usually associated with decentralization.

23. The basis for grouping positions into departments and departments into the total organization is
referred to as departmentalization.

24. Two contemporary approaches to departmentalization are the use of teams and groups.

25. At Fox End, people are grouped together in departments by common skills and work activities,
including a sales department and a production department. This is an example of vertical functional
approach.

NAT: AACSB Analytic | Creation of Value TYP: A
26. At Creative Expressions, departments are grouped together into separate self-contained groups
based on common products and product lines. This is an example of departmental approach.

27. The functional structure offers a way to decentralize decision making and provide direction from
the teams in the field.

28. Because the chain of command converges at the top, the functional structure provides a way to
decentralize decision making and provide unified direction from all managers.

29. Quick response to external changes is an advantage of vertical functional structure.

30. The functional structure is sometimes called a product, a program, or self-contained unit structure.

31. Divisions are created, in functional structures, as self-contained units with separate functional
departments for each division.

32. The divisional structure encourages decentralization.

33. In a geographic-based structure, all functions in a specific country or region report to the same
division manager.

34. Aspects of both functional and divisional structures simultaneously in the same part of the
organization are combined in the virtual network approach.

NAT: AACSB Analytic | Information Technologies TYP: F
35. The horizontal structure provides traditional control within functional departments, and the vertical
structure provides coordination across departments.

36. In a matrix approach to departmentalization, two chains of command exist, with top priority given
to the team managers.

37. The confusion and frustration caused by the dual chain of command is the major problem of the
matrix structure.

NAT: AACSB Analytic | Group Dynamics TYP: F
38. A cross-functional team normally has two or more groups of employees who are in continuing
conflict because of a difference in goals and values.

39. The overseer of both the product and functional chains of command, responsible for the entire
matrix is the matrix boss.

40. In a virtual network approach to structure, the organization becomes a small broker and
departments are independent contracting services to the broker for a profit.

41. The nature of the virtual network structure means that the subcontractor becomes a permanent part
of and an internal division of the organization.

42. Permanent teams are groups of employees are organized in a way similar to a formal department.

43. The modular approach is similar to virtual networking.

44. The divisional structure fosters excellent coordination within divisions, but coordination across
divisions is often poor.

45. One of the disadvantages of team approach is that employees often experience conflicts and dual
loyalties.

46. Flexibility and competitiveness on a global scale are the biggest advantage of the virtual network
approach to structure.

47. In divisional approach, coordination across divisions is great; whereas coordination within
divisions is often poor.

48. The matrix approach can be highly effective in a complex, rapidly changing environment in which
the organization needs to be flexible and adaptable.

49. One major disadvantage of the virtual network approach is the lack of hands-on control.

50. The structure of an organization is not complete without designing the horizontal as well as the
vertical dimensions of structure.

51. Coordination is the quality of collaboration across departments.

52. Coordination is especially important in the international arena.

53. Reengineering is the outcome of information and cooperation.

54. A permanent team designed to solve short-term problems refers to a task force.

55. A project manager is a person responsible for coordinating the activities of several departments for
the completion of a specific project.

56. Reengineering basically means preserving the past by establishing the sequence of activities by
how work was done.

57. The radical redesign of business processes to achieve dramatic improvements in cost, quality,
service, and speed is called reengineering, or sometimes called business change reengineering.

58. An organized group of related tasks and activities that work together to transform inputs into
outputs and create value is called a process.

59. According to estimates, only 10 percent of reengineering efforts fail to reach their intended goals.

60. In today's environment, organizations with stronger horizontal designs typically perform better.

61. When an organization uses a differentiation strategy, it strives for internal efficiency.

62. With a cost leadership strategy, the organization attempts to develop innovative products unique to
the market.

63. Permissive expectations typically would fit in a traditional vertical structure with fixed rules and a
clear hierarchy of authority.

64. Flexible authority expectations typically would fit with horizontal organizing, such as managing
teams, projects, and reengineering.

65. Two contingency factors affecting structure are strategic goals and the environment.

66. The pure functional structure is appropriate for achieving internal efficiency goals.

67. The functional structure is appropriate when the primary goal is innovation and flexibility.

68. A vertical structure that emphasizes specialization and centralization is appropriate when
environmental uncertainty is high.

69. A rigid, vertical structure in an uncertain environment prevents the organization form adapting to
change.

70. A loose, horizontal structure in a stable environment is inefficient.

MULTIPLE CHOICE
1. Which of the following refers to the deployment of organizational resources to achieve strategic
goals?
a. Planning
b. Controlling
c. Organizing
d. Leading
e. Strategic management
ANS: C PTS: 1 DIF: 1 REF: 244
2. Strategy defines ____ to do (it) while organizing defines ____ to do (it).

a. how; what
b. how; why
c. what; how
d. what; why
e. when; what
3. Organizational structure includes which of these?

a. The set of formal tasks assigned to individuals
b. The set of formal tasks assigned to departments
c. The design of systems to ensure effective coordination of employees across departments
d. Formal reporting relationships
e. All of these are part of organizational structure.
ANS: E PTS: 1 DIF: 1 REF: 244
4. Organization structure is defined as the

a. visual representation of the organization.
b. framework in which the organization defined how tasks are divided, resources are
deployed, and departments are coordinated.
c. division of labor.
d. unbroken line of authority that links all individuals in the organization.
e. none of these.
ANS: B PTS: 1 DIF: 1 REF: 244
5. The organization chart

a. shows the characteristics of the organization's vertical structure.
b. is a visual representation of the organization's structure.
c. details the formal reporting relationships that exist within an organization.
d. all of these.
e. both shows the characteristics of the organization's vertical structure and is a visual
representation of the organization's structure.
ANS: D PTS: 1 DIF: 2 REF: 244
6. Which of the following refers to the degree to which organizational tasks are subdivided into
individual jobs?
a. Multitasking
b. Lines of authority
c. Work specialization
d. Autonomy
e. Team structure
7. When work specialization is extensive

a. employees perform a single task.
b. employees perform many tasks.
c. employees are often highly challenged.
d. employees are often inefficient.
e. jobs tend to be large.
ANS: A PTS: 1 DIF: 2 REF: 245
8. Louise works in the manufacturing department at Ice Sculptures. The work in Louise's department
is low in task specialization. As a result, Louise
a. usually performs a single task.
b. does a variety of tasks and activities.
c. is often bored.
d. is rarely challenged.
e. generally goofs-off.
9. Jacob was recently looking at his company's organization chart in an attempt to discover who
reports to whom. Jacob is studying his organization's
a. degree of formalization.
b. amount of differentiation.
c. degree of centralization.
d. chain of command.
e. division of labor.
10. ____ is also referred to as work specialization.

a. Division of labor
b. Unity of command
c. Scalar chain
d. Esprit de corps
e. virtual network approach
11. Unity of command and the scalar principle are both closely related to the
a. amount of work specialization in an organization.
b. degree of formalization.
c. chain of command.
d. amount of bureaucracy in the organization.
e. matrix structure.
12. ____ means that each employee is held accountable to only one supervisor.
a. Scalar principle
b. Unity of command
d. Division of labor
e. Span of management
13. The formal and legitimate right of a manager to make decisions is

a. delegation.
b. responsibility.
c. authority.
d. span of management.
e. leadership.
14. ____ refers to a clearly defined line of authority in the organization that includes all employees.
a. Scalar principle
b. Unity of command
15. The people with authority and responsibility are subject to reporting and justifying task outcomes
to those above them in the chain of command is called
a. delegation.
b. line authority.
c. staff authority.
d. accountability.
e. hierarchy.
16. Which of the following characteristics distinguishes authority?

a. It is vested in people, not positions.
b. Subordinates accept it.
c. It flows across the horizontal hierarchy.
d. It emerges from the organizational values.
e. Individuals are born with this power.
17. Gina wishes to transfer authority and responsibility to her subordinates. This process is known as
a. accountability.
b. coordination.
c. delegation.
d. departmentalization.
e. passing the buck.
18. Which department performs tasks that reflect the organization's primary goals and mission?
a. Line
b. Staff
c. Primary
d. Functional
e. Strategic planning
19. ____ departments include all of those that provide specialized skills in support of ____
departments.
a. Line; staff
b. Staff; line
c. Primary; functional
d. Functional; primary
e. Line; functional
20. Which of the following typically is NOT considered a staff department?

a. Strategic planning
b. Accounting
c. Manufacturing
d. Human resources
e. Research and development
21. Carly's Clothes, Inc. manufactures children's clothes. Which of the following departments for
Carly's Clothes can be considered a line department?
a. Finance department
b. Human Resources department
c. Research and development department
d. Manufacturing department
e. Marketing department
22. Which of the following refers to the number of employees reporting to a supervisor?
a. The line of authority
b. The span of management
c. The chain of command
d. The management chain
e. Delegation
23. Traditionally, a span of management of about ____ has been recommended.

a. three
b. five
c. fifteen
d. seven
e. twenty
24. Dustin's subordinates are highly trained and all perform similar tasks. Brittany's subordinates are
spread over two locations and she has little available in the way of support systems. Which of the
following statements is most correct?
a. Nichole's span of management can be larger than Kevin's.
b. Nichole will have problems with unity of command.
c. Kevin's span of management can be larger than Nichole's.
d. Kevin has more problems with work specialization.
e. None of these.
25. According to MANAGER'S SHOPTALK in Chapter 9, all of the following are effective ways for a
manager to delegate EXCEPT:
a. delegate the whole task
b. select the right person
c. save feedback for completion of the project
d. evaluate and reward performance
e. give thorough instruction
26. Which of the following organizations have a flat structure compared to others?
a. Organization A with eleven hierarchical levels
b. Organization B with three hierarchical levels
c. Organization C with eight hierarchical levels
d. Organization D with six hierarchical levels
e. Organization E with seven hierarchical levels
27. Which of the following factors is NOT associated with larger span of control?
a. Work performed by subordinates in stable and routine.
b. Subordinates perform similar work tasks.
c. Subordinates are located at various different locations.
d. Subordinates are highly trained and need little direction.
e. Rules and procedures defining task activities are available.
28. Relative to a flat organizational structure, a tall structure has a ____ span of management and ____
hierarchical levels.
a. wide, fewer
b. narrow, fewer
c. narrow, wider
d. narrow, more
e. wide, more
29. ____ is the trend in recent years.

a. Greater work specialization
b. Less delegation
c. Wider spans of management
d. Narrower spans of management
e. Tall structure
30. Barney and Betty work at Mountain Peak, Inc. Although they both work on the assembly line, they
have the authority to make many decisions about their job. Mountain Peak can be said to have
a. a high degree of decentralization.
b. a wide span of management.
c. a high degree of centralization.
d. a narrow span of management.
e. no management.
31. ____ means that decision authority is located near the ____ of the organization.
a. Centralization, bottom
b. Decentralization, top
c. Centralization, top
d. Centralization, middle
e. None of these
32. Change and uncertainty in the environment are usually associated with
a. work specialization.
b. decentralization.
c. centralization.
d. tight vertical control.
e. division of labor.
33. Which of the following is the basis for grouping positions into departments and departments into
the total organization?
a. Departmentalization
b. Centralization
c. Decentralization
d. Formalization
e. Specialization
34. The functional, ____, and ____ are traditional approaches that rely on the chain of command to
define departmental groupings and reporting relationships along the hierarchy.
a. divisional, teams
b. divisional, matrix
c. matrix, teams
d. matrix, networks
e. teams, networks
35. Which of the following is not an approach to structural design that reflects different uses of the
chain of command?
a. Matrix approach
b. Team-based approach
c. Process approach
d. Divisional approach
e. Virtual network approach
36. Kara's department is made up of people with similar skills and work activities. Her organization
uses the ____ approach to departmentalization.
a. team-based
b. horizontal matrix
c. divisional
d. vertical functional
e. process
37. Mondavi Corporation has a finance department, a marketing department, and a production
department. Mondavi
a. uses a functional structure.
b. has a geographic structure.
c. uses a divisional structure.
d. uses product-based structure.
e. uses a matrix structure.
38. When departments are grouped together on the basis of organizational outputs, the organization is
using a
a. functional structure.
b. matrix structure.
c. divisional structure.
d. virtual network structure.
e. team-based structure.
39. Stephanie works in one of seven research and development departments at Tara's Terrace, Inc. This
would suggest that Tara's Terrace has a
b. divisional structure.
c. wide span of control.
d. high degree of centralization.
e. matrix structure.
40. According to your text, in very large companies, a

a. functional structure is necessary.
b. matrix structure is a requirement.
c. divisional structure is essential.
d. team approach should be avoided.
e. divisional structure is inefficient.
41. Self-contained unit structure is a term used for

a. divisional structure.
b. functional structure.
c. term structure.
d. matrix structure.
e. virtual network structure.
42. Relative to the functional structure, the divisional structure

a. encourages decentralization.
b. has a higher degree of work specialization.
c. has a more pronounced division of labor.
d. has excellent coordination within functions.
e. results in an efficient use of resources.
43. All functions in a specific country or region report to the same division manager in ____ divisions.
a. functional
b. matrix
c. geographic-based
d. teams
e. networks
44. Global companies often use a ____ structure to achieve simultaneous coordination of products
across countries.
a. functional
b. divisional
c. matrix
d. product-based
e. process-based
45. A formal chain of command for both functional and divisional relationships is provided by the
____ approach to structure.
a. horizontal matrix
b. vertical functional
c. divisional
d. product
e. team-based
46. Kent works at the Tick Tock, Inc. He has two bosses, one a functional manager and the other a
divisional manager. Tick Tock, Inc. has a
b. divisional structure.
c. geographic structure.
d. matrix structure.
e. product structure.
47. Boars' Nest Distributors is continually hampered by an inability to adapt to an unstable

environment. Which of the following is a plausible explanation as to why?
a. Boars' Nest's structure is too loose.
b. Boars' Nest's structure is too horizontal.
c. Boars' Nest uses a vertical structure.
d. All of these.
e. Both Boars' Nest's structure is too loose and structure is too horizontal.
48. Makai's Marketing Mix (MMM) does not use its resources wisely. The employees at MMM spend
too much time in meetings and not enough time focusing on the task at hand. MMM's management
should consider changing the organizational structure from ____ to ____.
a. horizontal, vertical
b. team based, horizontal
c. vertical, team based
d. mechanistic, rigid
e. team-based, virtual network
49. Which of the following structures is an incorrect fit in an unstable organizational environment?
a. A horizontal structure
b. A vertical structure
c. A loose organizational structure
d. An organic structure
e. All of these.
50. Which of the following is a contemporary approach to structural design in departmentalization?

a. Functional
b. Divisional
c. Traditional divisions
d. Teams
e. Geographic-based
51. The team approach to departmentalization is a response to

a. lack of participative teams.
b. centralized decision-making.
c. the competitive global environment.
d. All of these.
e. Both lack of participative teams and centralized decision-making.
52. The ____ is the product or functional boss, who is responsible for one side of the matrix.
a. matrix boss
b. production supervisor
c. department boss
d. top leader
e. two-boss employee
53. ____ are brought together as a formal department in the organization.

a. Cross-functional teams
b. Permanent teams
c. Formal teams
d. Ad-hoc teams
e. Task teams
54. ____ is an organization structure that divides the major functions of the organization into separate
companies.
a. The diversification approach
b. The team approach
c. The virtual network approach
d. The BCG approach
e. The functional approach
55. Waldt works for a large company. Recently, his organization began to contract out such functions
as training, engineering, and computer service. This approach is consistent with a
b. team structure.
c. divisional structure.
d. virtual network structure
e. service structure.
56. ____ is an organization structure that divides the major functions of the organization into separate
companies and coordinates their activities from a small headquarters organization.
a. The diversification approach
b. The team approach
c. The virtual network approach
d. The BCG approach
e. The functional approach
57. In the ____ approach, a manufacturing company uses outside suppliers to provide entire chunks of
a product, which are then assembled into a final product by a handful of workers.
a. virtual network
b. modular
c. virtual organization
d. team
e. matrix
58. All of the following are advantages of a functional structure EXCEPT

a. economies of scale.
b. excellent coordination between functions.
c. in-depth skill specialization and development.
d. high quality technical problem solving.
e. career progress within functional departments.
59. An advantage of functional structures is the

a. resulting economies of scale.
b. enlarged tasks for employees.
c. easy pinpointing of responsibility for product problems.
d. development of general management skills.
e. flexibility in an unstable environment.
60. Shooting Star, Inc. has wide spans of management, centralized decision making, and poor
coordination across departments. It is likely structured
a. along divisional lines.
b. along functional lines.
c. based on the team approach.
d. based on the virtual network approach.
e. none of these.
61. Organ Rentals Corporation has been having numerous problems. Communication across
departments is poor and decisions are backing up at the top of the organization. Organ Rentals uses
a ____ structure.
a. geographic
b. product
c. functional
d. matrix
e. team-based
62. All of the following are advantages of a divisional structure EXCEPT

a. high concern for customers' needs.
b. fast response, flexibility in an unstable environment.
c. emphasis on overall product and division goals.
d. development of general management skills.
e. there is little duplication of services across divisions.
63. Which is an advantage of the divisional structure?

a. Concern for customers' needs is high
b. There is little duplication of services across divisions
c. There is good coordination across divisions
d. Top management retains tight control of the organization
e. There is no competition for corporate resources
64. Advantages of the matrix structure include

a. it increases employee participation.
b. it makes efficient use of human resources.
c. it works well in a changing environment.
d. it develops both general and specialist management skills.
e. all of these.
65. Which of the following is(are) an advantage of team structure?

a. Increased barriers among departments
b. Unplanned decentralization
c. Time and resources spent on meetings
d. Less response time, quicker decisions
e. All of these
66. The use of teams may lead to too much

a. division of labor.
b. decentralization.
c. authority and responsibility in top management's hands.
d. formalization.
e. narrow span of management.
67. Disadvantages of the virtual network approach include

a. a lack of hands-on control.
b. the possibility of losing an important part of the organization.
c. weakened employee loyalty.
d. all of these.
e. a lack of hands-on control and weakened employee loyalty.
68. Theresa works in an organization where coordination across organizational units is poor and the
units perceived themselves to be in competition with one another for organizational resources.
These characteristics are consistent with which of the following structures?
a. A matrix structure
b. A functional structure
c. A divisional structure
d. A team-based structure
e. A virtual network structure
69. The matrix structure violates which of the following principles of management?
a. Unity of direction
b. Unity of command
70. All of the following are the major disadvantages of the matrix structure EXCEPT
a. it generates a large amount of conflict.
b. managers spend much time resolving conflict.
c. the confusion caused by the dual chain of command.
d. the power imbalance that can result between the sides of the matrix.
e. enlarged tasks for employees.
71. The biggest advantage to a virtual network approach is ____ and ____ on a global scale.
a. flexibility; competitiveness
b. coordination; organization
c. communication; organization
d. communication; no cost
e. flexibility; coordination
72. Which of the following structures is the leanest of all organization forms because little supervision
is required?
a. Functional approach
b. Virtual network approach
c. Team approach
d. Matrix approach
e. Divisional approach
73. Which of the following happens as organizations grow?

a. Positions and departments are deleted
b. Management layers are eliminated to save cost
c. Managers have to find ways to tie different departments
d. Top management becomes more autocratic
e. None of these
74. Coordination is defined as

a. the ability of the organization to produce timely products.
b. the quality of collaboration across departments.
c. differentiation.
d. the quantity of goods produced by the organization.
e. all of these.
75. Innovative Creations Corporation is designed along functional lines. New product development is
very slow and the process is plagued by many problems. One of the problems is that the people in
marketing never communicate with the people in production. This is an example of poor
a. coordination.
b. planning.
c. motivating.
d. leading.
e. controlling.
76. When the organization is structured along ____ lines, coordination is required.
a. functional
b. divisional
c. team
d. all of these
e. functional or divisional
77. The outcome of information and cooperation is

a. organization.
b. planning.
c. coordination.
d. differentiation.
e. controlling.
78. A task force is a ____ committee formed to solve a specific problem.

a. standing
b. permanent
c. temporary
d. all of these
e. none of these
79. Marissa was recently assigned to a committee whose task is to research new product opportunities.
Once this group generates a list of six or seven viable options, it will be disbanded. This group is
also known as a
a. team.
b. standing committee.
c. permanent committee.
d. task force.
e. none of these
80. A ____ individual responsible for coordinating the activities of several departments.
a. department manager
b. line manager
c. project manager
d. middle manage
e. moderating manager
81. Lisa is responsible for coordinating the efforts of several different departments. Which of the
following titles best describes her position?
a. Department manager
b. Middle manager
c. First-level supervisor
d. Project manager
e. Chairman of the board
82. Typically, project managers have authority over ____ but not over ____ assigned to it.
a. people, the project
b. the project, people
c. resources, the project
d. people, other resources
e. finances, products
83. Which of the following leads to strong coordination across functional areas and greater flexibility
in responding to changes in the environments?
a. Reengineering
b. Layoffs
c. Downsizing
d. A temporary committee
e. An ad hoc committee
84. An organized group of related tasks and activities that work together to transform inputs into
outputs and create value refers to the
a. task force.
b. reengineering.
c. project.
d. process.
e. production plan.
85. The purpose of ____ is to organize resources to accomplish organizational goals.

a. strategy
b. motivation
c. structure
d. control
e. leadership
86. Because reengineering is expensive, time consuming, and usually painful to implement, it seems
best
a. for companies to search for alternatives.
b. suited for companies facing serious competitive threats.
c. for companies to eliminate any ideas of reengineering.
d. suited for companies with high profit margins.
e. suited for companies with high-quality leaders.
87. An organization strives for internal efficiency with a(n) ____ strategy.
a. integration
b. diversification
c. differentiation
d. defensive
e. cost leadership
88. With a(n) ____ strategy, the organization attempts to develop innovative products unique to the
market.
a. differentiation
b. integration
c. reengineering
d. cost leadership
e. defensive
89. A pure functional structure is most appropriate for achieving

a. innovation.
b. differentiation.
c. internal efficiency goals.
d. flexibility.
e. all of these
90. Which of the following structures is most consistent with a strategy of stability?
a. Team based structure
b. Organic structure
c. Matrix structure
d. Functional structure
e. Learning structure
91. The pure functional structure does not enable the organization to be
a. cost leader.
b. efficient.
c. flexible.
d. stable.
e. All of these.
92. Which of the following structures works best in an uncertain organizational environment?
a. A tight structure
b. A mechanistic structure
c. A horizontal structure
d. A functional structure
e. A vertical structure
93. ____ works best in a stable organizational environment.

a. A loose organizational structure
b. A vertical structure
c. An organic structure
d. A horizontal structure
e. A loose organizational structure or an organic structure
94. Which of the following is an incorrect fit in a stable organizational environment?

a. A tight structure
b. A rigid structure
c. A functional structure
d. A horizontal structure
e. A vertical structure
CASE
Scenario - Javier Gomez
Javier is a veteran manager with Pixel International, Inc. (PII). Recently PII purchased a small
business in the printing industry. Javier has been assigned the task of managing this new
acquisition and is currently deciding how best to design its structure. Currently, employees are
assigned to one of three departments, including sales, production, and legal defense.
1. In determining Javier's span of management, he should consider all of the following EXCEPT
a. Is the work performed by subordinates stable and routine?
b. Do subordinates perform similar tasks?
c. Are rules and procedures defining task activities available?
d. Do Javier's personal preferences and style favor a larger or small span?
e. All of these.
ANS:
e
PTS: 1 DIF: 2 REF: 249

NAT: AACSB Analytic | Creation of Value KEY: Scenario Questions
TYP: A
2. The analysis of whether the new division should be centralized or decentralized should include all
of the following EXCEPT
a. the level of change and uncertainty in the environment.
b. corporate history and culture.
c. the threat of crisis or the risk of company failure.
d. the structure of competitors and customers.
e. all of these should be included.
ANS:
d

TYP: A
3. Current departmentalization of Javier's new division can be characterized primarily as

a. vertical functional.
b. divisional.
c. horizontal matrix.
d. team-based.
e. none of these.
ANS:
a

TYP: A
4. If Javier organizes with a horizontal matrix structure, some potential advantages that he could
anticipate include all of the following, EXCEPT
a. a more efficient use of resources.
b. greater flexibility and adaptability to a changing environment.
c. development of both general and specialist management skills.
d. decreased need for coordination among managers.
e. all of these are potential advantages.
ANS:
d

TYP: F
COMPLETION
1. The deployment of organizational resources to achieve strategic goals is known as

____________________.
ANS: organizing

2. The framework in which the organization defines how tasks are divided, resources are deployed,
and departments are coordinated is called ____________________.
ANS: organization structure

3. The visual representation of an organization's structure is called the ____________________.
ANS: organization chart

4. Division of labor is also known as ____________________.
ANS: work specialization

5. The degree to which organizational tasks are subdivided into individual jobs is called
____________________.
ANS: work specialization

6. The ____________________ is an unbroken line of authority that links all persons in an

organization and shows who reports to whom.
ANS: chain of command

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

____________________.
ANS: unity of command

8. The ____________________ refers to a clearly defined line of authority in the organization that
includes all employees.
ANS: scalar principle

9. The three characteristics of authority are that it must be ____________________,

____________________, and ____________________.
ANS: vested in organizational positions not people; accepted by subordinates; flowing down the
vertical hierarchy.

10. ____________________ is the formal and legitimate right of a manager to make decisions, issue
orders, and allocate resources to achieve organizationally desired outcomes.
ANS: Authority

11. ____________________ is the duty to perform the task or activity an employee has been assigned.
ANS: Responsibility

12. ____________________ means that the people with authority and responsibility are subject to
reporting and justifying task outcomes to those above them in the chain of command.
ANS: Accountability

13. ____________________ is the process managers use to transfer authority and responsibility to
positions below them in the hierarchy.
ANS: Delegation

14. ____________________ departments perform tasks that reflect the organization's primary goal and
mission, while ____________________ departments include all those that provide specialized
skills in support of ____________________ departments.
ANS: Line; staff; line

15. ____________________ means that people in management positions have formal authority to
direct and control immediate subordinates.
ANS: Line authority

16. The ____________________ is the number of employees reporting to a supervisor.
ANS: span of management

17. A(n) ____________________ structure has a wide span, is horizontally dispersed, and has fewer
hierarchical levels.
ANS: Flat

18. A(n) ____________________ structure has an overall narrow span and more hierarchical levels.
ANS: tall

19. With ____________________, decision authority is pushed downward to lower organization

levels.
ANS: decentralization

20. ____________________ means that decision authority is located near the top of the organization.
ANS: Centralization

21. A(n) ____________________ structure is the grouping of positions into departments based on
similar skills, expertise, and resource use.
ANS: functional

22. The ____________________ structure occurs when departments are grouped together based on
organizational outputs.
ANS: divisional

23. The divisional structure is sometimes called a(n) ____________________,

____________________, or ____________________.
ANS: product structure; program structure; self-contained unit structure

24. An alternative for assigning divisional responsibility is to group company activities by

____________________.
ANS: geographic region

25. The ____________________, combines aspects of both functional and divisional structures
simultaneously, in the same part of the organization.
ANS: matrix approach

26. ____________________ teams consist of employees from various functional departments who are
responsible to meet as a team and resolve mutual problems.
ANS: Cross-functional

27. In the ____________________ approach of structural design, departments are independent,

contracting services to the central hub for a profit.
ANS: virtual network

28. The ____________________ structure means that the firm subcontracts many of its major
functions to separate companies and coordinates their activities from a small headquarters
organization.
ANS: virtual network

29. The ____________________ approach is when a manufacturing company uses outside suppliers to
provide large components of the product, which are then assembled into a final product by a few
workers.
ANS: modular

30. The quality of collaboration across departments is known as ____________________.
ANS: coordination

31. A(n) ____________________ is a temporary team designed to solve a short-term problem

involving several departments.
ANS: task force

32. A(n) ____________________ is a person who is responsible for coordinating the activities of
several departments for the completion of a specific project.
ANS: project manager

33. A(n) ____________________ is a person who is responsible for coordinating the activities of
several departments for the completion of a specific project.
ANS: project manager

34. ____________________ is the radical redesign of business processes to achieve dramatic

improvements in cost, quality, service, and speed.
ANS: Reengineering

35. A(n) ____________________ structure is most appropriate when the external environment is
stable.
ANS: vertical

SHORT ANSWER
1. List the five approaches to departmentalization.
ANS:
Vertical functional, divisional, horizontal matrix, teams, and virtual network.

2. List three disadvantages of the divisional structure.
ANS:
Choose three of the following -- duplication of resources across divisions, less technical depth and
specialization in divisions, poor coordination across divisions, less top management control, and
competition for corporate resources.

3. List the advantages of the virtual network structure.
ANS:
Global competitiveness, workforce flexibility/challenge, and reduced administrative overhead.

ESSAY
1. Compare and contrast authority, responsibility, accountability, and delegation.
ANS:
Authority is defined as the formal and legitimate rights of a manager to make decisions, issue
orders, and allocate resources. Responsibility is the duty to perform the task that has been assigned.
Many argue that authority and responsibility go hand-in-hand, i.e., in order for someone to fulfill
their responsibility, they must have an equivalent level of authority. Accountability means that
those with authority and responsibility are subject to reporting and justifying task outcomes to
those higher in the chain of command. Accountability brings authority and responsibility together.
The principle of delegation allows managers to transfer authority and responsibility to those lower
in the organizational hierarchy. Delegation should increase an organization's flexibility by allowing
people "on the spot" to make decisions.
PTS: 1 DIF: 3 REF: 246-247

2. Briefly explain the concept of line and staff departments and authority.
ANS:
Line departments perform tasks that reflect the organization's primary task and mission. Staff
departments include all those departments that provide specialized skills in support of line
departments. In a typical production firm, line departments make and sell the product, while staff
departments might include accounting and human resource management. Line authority means that
people in management positions have the formal power to direct immediate subordinates. Staff
authority is the right to advise, recommend, and counsel in the staff specialist's area of expertise.

3. Define span of management and explain if there is an ideal span of management.
ANS:
The span of management, or span of control, is the number of employees who report directly to one
supervisor. There is not an ideal span of management. The number depends upon several
characteristics of the situation including the nature of the work done by the subordinates, the
locations where the work is done, the training and education of the workers, the level of definition
of the task, the time available to the manager, and the manager's personal preferences and style.

4. List the factors that are associated with less supervisor involvement and thus larger spans of
control.
ANS:
(1) Work performed by subordinates is stable and routine. (2) Subordinates perform similar work
tasks. (3) Subordinates are concentrated in a single location. (4) Subordinates are highly trained
and need little direction in performing tasks. (5) Rules and procedures defining task activities are
available. (6) Support systems and personnel are available for the manager. (7) Little time is
required in nonsupervisory activities such as coordination with other departments or planning. (8)
Managers' personal preferences and styles favor a large span.

5. Identify the three factors that typically influence centralization versus decentralization.
ANS:
(1) Greater change and uncertainty in the environment are usually associated with decentralization.
(2) The amount of centralization or decentralization should fit in the firm's strategy. (3) In times of
crisis of company failure, authority may be centralized at the top.

6. What is the horizontal matrix approach to departmentalization and what are its main advantages?
ANS:
A horizontal matrix structure utilizes functional and divisional chains of command simultaneously
in the same part of the organization. This structure has dual lines of authority and purposely
violates the principle of unity of command. Major advantages include: (1) more efficient use of
human resources because specialists can be transferred from one division to another; (2) increased
adaptability; (3) increased management skills; (4) greater interdisciplinary cooperation; and (5)
enlarged tasks for employees.
PTS: 1 DIF: 2 REF: 254-255 | 258

7. What is(are) the difference(s) between cross-functional and permanent teams?
ANS:
Cross-functional teams consist of employees from various functional departments who are
responsible to meet as team and resolve mutual problems. Team members typically still report to
their functional departments, but they also report to the team, one member of whom may be the
leader. Permanent teams are groups of employees who are brought together similar to a formal
department. Each team brings together employees from all functional areas focused on a specific
task or project. Emphasis is on horizontal communication and information sharing because
representatives from all functions are coordinating their work and skills to complete a specific
organizational task.
PTS: 1 DIF: 2 REF: 255-256

8. What is the team approach to departmentalization and what are its main disadvantages?
ANS:
There are at least two different types of teams. Cross-functional teams consist of employees from
various functional departments who are responsible to meet as team and resolve mutual problems.
While team members still report to their functional manager, they will also report to the team,
perhaps to a team leader. Permanent teams consist of groups of employees who are brought
together as a formal department. Similar to a divisional structure, although much smaller in the
number of employees involved, permanent teams are often the result of reengineering.
Disadvantages of the team structure include dual loyalties and conflict, the time and resources
spent on meetings, and unintended/ineffective decentralization, which may occur because team
members do not have the conceptual skills to be effective.
PTS: 1 DIF: 2 REF: 254-255 | 258

9. Define task forces and project management.
ANS:
A task force is a temporary team or committee designed to solve a short-term problem involving
several department A project manager is a person who is responsible for coordinating the activities
of several departments for the completion of a specific project.

10. Describe reengineering and what it involves.
ANS:
Reengineering, sometimes called business process reengineering, is the radical redesign of business
processes to achieve dramatic improvements in cost, quality, service, and speed. Reengineering
involves a shift to a horizontal structure based on teams. Basically, it means starting over, throwing
out all the notions of how work was done and deciding on how it can best be done now.


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1. The deployment of organizational resources to achieve strategic goals refers to organizing.

ANS: T PTS: 1 DIF: 1 REF: 244

2. Organizing defines what to do while strategy defines how to do it.

ANS: F PTS: 1 DIF: 2 REF: 244

3. Strategy defines what to do; organizing defines how to do it.

ANS: T PTS: 1 DIF: 2 REF: 244

ANS: T PTS: 1 DIF: 1 REF: 244

5. A structure graph is a visual representation of an organization's structure, showing communication

ANS: F PTS: 1 DIF: 1 REF: 244

ANS: T PTS: 1 DIF: 2 REF: 245

ANS: F PTS: 1 DIF: 2 REF: 245

ANS: F PTS: 1 DIF: 2 REF: 245

ANS: T PTS: 1 DIF: 1 REF: 246

ANS: F PTS: 1 DIF: 1 REF: 246

11. The flip side of the authority coin is responsibility.

ANS: T PTS: 1 DIF: 1 REF: 246

ANS: F PTS: 1 DIF: 2 REF: 247

ANS: F PTS: 1 DIF: 2 REF: 247

ANS: T PTS: 1 DIF: 2 REF: 247

ANS: T PTS: 1 DIF: 1 REF: 247

ANS: T PTS: 1 DIF: 1 REF: 247

17. According to MANAGER'S SHOPTALK in Chapter 9, the attempt by top management to

ANS: T PTS: 1 DIF: 1 REF: 248

ANS: T PTS: 1 DIF: 1 REF: 248

ANS: F PTS: 1 DIF: 2 REF: 249

ANS: F PTS: 1 DIF: 2 REF: 249

ANS: T PTS: 1 DIF: 2 REF: 249

22. Certainty in the environment is usually associated with decentralization.

ANS: F PTS: 1 DIF: 2 REF: 250

ANS: T PTS: 1 DIF: 1 REF: 250

ANS: F PTS: 1 DIF: 2 REF: 250

ANS: T PTS: 1 DIF: 3 REF: 252

ANS: F PTS: 1 DIF: 2 REF: 252

ANS: F PTS: 1 DIF: 2 REF: 252

ANS: F PTS: 1 DIF: 3 REF: 252

29. Quick response to external changes is an advantage of vertical functional structure.

ANS: F PTS: 1 DIF: 2 REF: 252

ANS: F PTS: 1 DIF: 1 REF: 252

ANS: F PTS: 1 DIF: 2 REF: 253

32. The divisional structure encourages decentralization.

ANS: T PTS: 1 DIF: 1 REF: 253

ANS: T PTS: 1 DIF: 2 REF: 253

ANS: F PTS: 1 DIF: 1 REF: 254

ANS: F PTS: 1 DIF: 2 REF: 254

ANS: F PTS: 1 DIF: 3 REF: 255

ANS: T PTS: 1 DIF: 1 REF: 255

ANS: F PTS: 1 DIF: 2 REF: 255

ANS: F PTS: 1 DIF: 2 REF: 255

ANS: T PTS: 1 DIF: 1 REF: 256

ANS: F PTS: 1 DIF: 2 REF: 256

ANS: T PTS: 1 DIF: 2 REF: 256

43. The modular approach is similar to virtual networking.

ANS: T PTS: 1 DIF: 1 REF: 257

ANS: T PTS: 1 DIF: 2 REF: 258

ANS: T PTS: 1 DIF: 1 REF: 258

ANS: T PTS: 1 DIF: 1 REF: 258

ANS: F PTS: 1 DIF: 2 REF: 259

ANS: T PTS: 1 DIF: 3 REF: 259

ANS: T PTS: 1 DIF: 2 REF: 260

ANS: T PTS: 1 DIF: 1 REF: 260

51. Coordination is the quality of collaboration across departments.

ANS: T PTS: 1 DIF: 1 REF: 261

2. Strategy defines to do (it) while organizing defines to do (it).