Organization Theory and Design Canadian 2nd Edition Daft Test Bank

Organization Theory and Design
Canadian 2nd Edition Daft Test Bank

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1. A(n) _____ collects data from sales, purchases from suppliers, and inventory changes and stores them in a database.
a. inventory control system
b. automated analysis system
c. transaction processing system
d. decision support system
ANSWER: c
RATIONALE: Feedback: Transaction processing systems (TPSs) automate an organization’s routine, day-
to-day business transactions. A TPS collects data from transactions such as sales,
purchases from suppliers, and inventory changes, and stores them in a database.
POINTS: 1
LEARNING OBJECTIVES: ORGT.DAFT.16.08-01 - 08-01
NATIONAL STANDARDS: United States - AACSB: Technology
TOPICS: Information Technology Evolution
KEYWORDS: Bloom’s: Remember
2. The use of huge databases that combine all of a company's data and allow users to access the data directly, create
reports, and obtain responses to what-if questions is referred to as:
a. data mining.
b. data processing.
c. transaction processing.
d. data warehousing.
ANSWER: d
RATIONALE: Feedback: Data warehousing is the use of huge databases that combine all of a company’s
data and allow users to access the data directly, create reports, and obtain responses to
what-if questions. Software for business intelligence, also called analytic software, helps
users make sense of all these data.
POINTS: 1
3. Software for business intelligence, also called _____, helps users make sense of all of a company’s data.
a. dynamic software
b. analytic software
c. decision support software
d. warehousing software
ANSWER: b
RATIONALE: Feedback: Software for business intelligence, also called analytic software, helps users make
sense of all of a company’s data. Business intelligence refers to the high-tech analysis of a
company’s data in order to make better strategic decisions.
POINTS: 1
4. _____ means searching out and analyzing data from multiple sources across the enterprise, and increasingly from
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outside sources as well, to identify patterns and relationships that might be significant.
a. Data warehousing
b. Data processing
c. Data entry
d. Data mining
ANSWER: d
RATIONALE: Feedback: Sometimes referred to as data mining, business intelligence means searching out
and analyzing data from multiple sources across the enterprise, and increasingly from
Retailers are some of the biggest users of business intelligence software.
POINTS: 1
5. Which of the following helps managers to make smarter decisions?

a. Restricting the use of social media technologies
b. Using business intelligence software to analyze data
c. Restricting use of intranets for knowledge management
d. Using only horizontal linkages and not vertical linkages
ANSWER: b
RATIONALE: Feedback: By collecting the right data and using business intelligence software to analyze
them and spot trends and patterns, managers can make smarter decisions. For example, 1-
800-Flowers.com uses business intelligence to tweak its marketing.
POINTS: 1
KEYWORDS: Bloom’s: Understand
6. _____ refers to using technologies such as blogs, Facebook, or Twitter for interacting with and facilitating
communication and collaboration among employees, customers, and other stakeholders.
a. Social business
b. Decision support
c. Transaction processing
d. Business intelligence
ANSWER: a
RATIONALE: Feedback: Social business refers to using social media technologies such as blogs, social
networks, or Twitter for interacting with and facilitating communication and collaboration
among employees, customers, and other stakeholders. For example, Dr. Pepper built a
Facebook fan base of 8.5 million people. Managers put out two messages a day on the
company’s fan page and then mine the responses to see what people are thinking.
POINTS: 1
7. Shaina, a manager for a fashion magazine, puts out two messages a day on her company’s Facebook fan page. She does
this to obtain feedback from readers and also to determine what the readers would like to see in the magazine. This
scenario is an example of _____.
a. feedback processing
b. data warehousing
c. social business
d. business intelligence
ANSWER: c
RATIONALE: Feedback: This is an example of social business. Social business refers to using social
media technologies such as blogs, social networks, or Twitter for interacting with and
facilitating communication and collaboration among employees, customers, and other
stakeholders.
POINTS: 1
NATIONAL STANDARDS: United States - AACSB: Reflective Thinking
KEYWORDS: Bloom’s: Apply
8. _____ refers to technologies, skills, and processes for searching and examining massive, complex sets of data that
traditional data processing applications cannot handle to uncover hidden patterns and correlations.
a. Social business
b. Data warehousing
c. Big data analytics
d. Business intelligence
ANSWER: c
RATIONALE: Feedback: Big Data, one of the newest business technologies, is a natural outgrowth of
business intelligence. Big data analytics refers to technologies, skills, and processes for
searching and examining massive, complex sets of data that traditional data processing
applications cannot handle to uncover hidden patterns and correlations.
POINTS: 1
9. xIn connection with the shift to employee participation and empowerment, many companies are adopting a:
a. decentralized control process.
b. hierarchical control process.
c. vertical organizational structure.
d. centralized organizational structure.
ANSWER: a
RATIONALE: Feedback: In connection with the shift to employee participation and empowerment, many
companies are adopting a decentralized rather than a hierarchical control process.
Hierarchical control and decentralized control represent different philosophies of corporate
culture.
POINTS: 1
NATIONAL STANDARDS: United States - AACSB: Analytic
TOPICS: The Philosophy and Focus of Control Systems
10. _____ involves monitoring and influencing employee behavior through extensive use of rules, policies, order of
authority, written documentation, reward systems, and other formal mechanisms.
a. A vertical organizational structure
b. Decentralized control
c. A horizontal organizational structure
d. Hierarchical control
ANSWER: d
RATIONALE: Feedback: Hierarchical control involves monitoring and influencing employee behavior
through extensive use of rules, policies, hierarchy of authority, written documentation, reward
systems, and other formal mechanisms. In contrast, decentralized control relies on cultural
values, traditions, shared beliefs, and trust to foster compliance with organizational goals.
POINTS: 1
11. In contrast to hierarchical control, decentralized control relies on:

a. extensive use of rules and policies.
b. close personal supervision.
c. reward systems.
d. cultural values.
ANSWER: d
RATIONALE: Feedback: In contrast to hierarchical control, decentralized control relies on cultural values,
traditions, shared beliefs, and trust to foster compliance with organizational goals. Managers
operate on the assumption that employees are trustworthy and willing to perform effectively
without extensive rules and close supervision.
POINTS: 1
12. _____ define explicit rules, policies, and procedures for employee behavior.
a. Hierarchical methods
b. Decentralized methods
c. Traditional methods
d. Reorganized methods
ANSWER: a
RATIONALE: Feedback: Hierarchical methods define explicit rules, policies, and procedures for employee
behavior. Control relies on centralized authority, the formal hierarchy, and close personal
supervision.
POINTS: 1
13. _____ is based on values and assumptions that are almost opposite to those of hierarchical control.
a. Centralized control
b. Decentralized control
c. Vertical control
d. Horizontal control
ANSWER: b
RATIONALE: Feedback: Decentralized control is based on values and assumptions that are almost
opposite to those of hierarchical control. Rules and procedures are used only when
necessary.
POINTS: 1
14. Which of the following is true of decentralized control?

a. Rules and procedures are used only when necessary.
b. Managers do not rely on shared goals and values to control employee behavior.
c. Top-down authority is used.
d. Task-related job descriptions are given to employees.
ANSWER: a
necessary.
POINTS: 1
15. Which of the following is true of an organization with decentralized control?

a. The organization emphasizes extrinsic rewards, and task-related job descriptions are given to employees.
b. The organization assumes that people are incapable of self-discipline and cannot be trusted.
c. The organization uses detailed rules and procedures and formal control systems.
d. The organization places great emphasis on the selection and socialization of employees.
ANSWER: d
RATIONALE: Feedback: In organizations with decentralized control, managers rely on shared goals and
values to control employee behavior. The organization places great emphasis on the
selection and socialization of employees to ensure that workers have the appropriate values
needed to influence behavior toward meeting company goals.
POINTS: 1
16. Decentralized control differs from hierarchical control in that:
a. power is more dispersed in decentralized control.
b. top-down authority is used in decentralized control.
c. detailed rules and procedures and formal control systems are used in decentralized control.
d. organizational structure is vertical in decentralized control.
ANSWER: a
RATIONALE: Feedback: With decentralized control, power is more dispersed and is based on knowledge
and experience as much as formal position. The organizational structure is flat and
horizontal, with flexible authority and teams of workers solving problems and making
improvements.
POINTS: 1
17. With _____, the culture is adaptive, and managers recognize the importance of organizational culture for uniting
individual, team, and organizational goals for greater overall control.
a. centralized control
b. decentralized control
c. vertical control
d. hierarchical control
ANSWER: b
RATIONALE: Feedback: With decentralized control, the culture is adaptive, and managers recognize the
importance of organizational culture for uniting individual, team, and organizational goals for
greater overall control. Ideally, with decentralized control, employees will pool their areas of
expertise to arrive at procedures that are better than managers could come up with working
alone.
POINTS: 1
18. All effective control systems involve the use of _____ to determine whether organizational performance meets
established standards to help the organization attain its goals.
a. decentralization
b. hierarchical referral
c. feedback
d. employee referral
ANSWER: c
RATIONALE: Feedback: All effective control systems involve the use of feedback to determine whether
organizational performance meets established standards to help the organization attain its
goals. Managers set up systems for organizational control that consist of the four key steps in
the feedback control model.
POINTS: 1
19. Feedback control helps managers:

a. make needed adjustments to help the organization be successful.
b. emphasize decentralized control over employees.
c. have complete hierarchical control on their subordinates.
d. set organizational mission and vision.
ANSWER: a
RATIONALE: Feedback: Managers set up systems for organizational control that consist of the four key
steps in the feedback control model. Feedback control helps managers make needed
adjustments in work activities, standards of performance, or goals to help the organization be
successful.
POINTS: 1
20. Which of the following is the first step in the feedback control model?
a. Taking corrective action as needed
b. Establishing metrics and standards of performance
c. Comparing metrics of actual performance to standards
d. Setting strategic goals
ANSWER: d
RATIONALE: Feedback: Managers set up systems for organizational control that consist of the four key
steps in the feedback control model. The cycle of control includes setting strategic goals for
departments or the organization as a whole, establishing metrics and standards of
performance, comparing metrics of actual performance to standards, and correcting or
changing activities as needed.
POINTS: 1
21. Which of the following is not a perspective of the balanced scorecard?

a. Financial performance
b. Customer service
c. Learning and growth
d. Quality control
ANSWER: d
RATIONALE: Feedback: A BSC contains four major perspectives: financial performance, customer service,
internal business processes, and the organization’s capacity for learning and growth. Within
these four areas, managers identify key performance indicators (KPIs) the organization will
track.
POINTS: 1

22. Which of the following perspectives of a balanced scorecard includes traditional measures such as net income and
return on investment?
a. Learning and growth potential
b. Customer service indicators
c. Financial perspective
d. Quality control perspective
ANSWER: c
RATIONALE: Feedback: The financial perspective reflects a concern that the organization’s activities
contribute to improving short- and long-term financial performance. It includes traditional
measures such as net income and return on investment.
POINTS: 1
23. _____ focus on production and operating statistics, such as order fulfillment or cost per order.
a. Customer service indicators
b. Business process indicators
c. Learning and growth potentials
d. Quality control perspectives
ANSWER: b
RATIONALE: Feedback: Business process indicators focus on production and operating statistics, such as
order fulfillment or cost per order.
POINTS: 1
24. An organization’s _____ focuses on how well resources and human capital are being managed for the company’s
future.
a. business process indicator
b. customer service indicator
c. learning and growth potential
d. quality control perspective
ANSWER: c
RATIONALE: Feedback: The final component of a balanced scorecard looks at the organization’s potential
for learning and growth, focusing on how well resources and human capital are being
managed for the company’s future.
POINTS: 1

25. In recent years, the balanced scorecard has evolved into a system that helps managers see how:
a. organizational performance results from cause–effect relationships among the four mutually supportive
perspectives of balanced scorecard.
b. decentralized control is effective for organizations to achieve the preset goals, mission, and vision.
c. accuracy and responsiveness of employees improve drastically from the usage of outcome control instead of
behavior control in their organization.
d. each and every perspective of a balanced scorecard is dependent on each other.
ANSWER: a
RATIONALE: Feedback: In recent years, the balanced scorecard has evolved into a system that helps
managers see how organizational performance results from cause–effect relationships
among these four mutually supportive areas. Overall effectiveness is a result of how well
these four elements are aligned, so that individuals, teams, and departments are working in
concert to attain specific goals that cause high organizational performance.
POINTS: 1
26. A(n) _____ provides a visual representation of the key drivers of an organization’s success and shows how specific
outcomes in each area are linked.
a. feedback map
b. outcome map
c. strategy map
d. transaction map
ANSWER: c
RATIONALE: Feedback: The cause–effect control technique is the strategy map. A strategy map provides
a visual representation of the key drivers of an organization’s success and shows how
specific outcomes in each area are linked.
POINTS: 1
27. _____ is based on managers’ direct observation and supervision of employee actions to see whether the individual
follows rules and policies and performs tasks as instructed.
a. Feedback control
b. Outcome control
c. Behavior control
d. Transaction control
ANSWER: c
RATIONALE: Feedback: The reward system is often of paramount concern at the supervisory level. There
are two different approaches to evaluating and controlling team or individual performance
and allocating rewards. Behavior control is based on managers’ direct observation and
supervision of employee actions to see whether the individual follows rules and policies and
performs tasks as instructed.
POINTS: 1
28. _____ refers to the efforts to systematically find, organize, and make available a company’s intellectual capital and to
foster a culture of continuous learning and information sharing.
a. Feedback control
b. Outcome control
c. Knowledge management
d. Transaction management
ANSWER: c
RATIONALE: Feedback: Knowledge management refers to the efforts to systematically find, organize, and
make available a company’s intellectual capital and to foster a culture of continuous learning
and knowledge sharing. The company’s intellectual capital is the sum of its knowledge,
experience, understanding, relationships, processes, innovations, and discoveries.
POINTS: 1
TOPICS: Facilitating Employee Coordination and Efficiency
29. _____ are people who are at the center of an information network. These are people who are sought out for their
knowledge and information.
a. Brokers
b. Peripheral players
c. Hubs
d. Communicators
ANSWER: c
RATIONALE: Feedback: Hubs are people who are at the center of an information network. These are
people who are sought out for their knowledge and information. Hubs tend to have more
influence than other employees.
POINTS: 1
30. A form of outsourcing is to use _____, firms that collect data from multiple organizations and analyze the combined
data for them.
a. hubs
b. peripheral players
c. data summarizers
d. data intermediaries
ANSWER: d
RATIONALE: Feedback: A form of outsourcing is to use data intermediaries, firms that collect data from
multiple organizations and analyze the combined data for them. For example, Visa and
MasterCard do analysis on the billions of transactions from cardholders in 210 countries to
predict consumer and business trends and sell the data to others.
POINTS: 1
TOPICS: Adding Strategic Value
31. Executive information systems collect data from transactions such as sales, purchase from suppliers, and inventory
changes and store them in a database.
a. True
b. False
ANSWER: False
RATIONALE: Feedback: Transaction processing systems (TPSs) automate the organization’s routine, day-
to-day business transactions. A TPS collects data from transactions such as sales,
purchases from suppliers, and inventory changes, and stores them in a database.
POINTS: 1
32. Data warehousing is also known as data mining.

a. True
b. False
ANSWER: False
RATIONALE: Feedback: Data warehousing is the use of huge databases that combine all of a company’s
data and allow users to access the data directly, create reports, and obtain responses to
what-if questions. Data mining or business intelligence means searching out and analyzing
data from multiple sources across the enterprise, and increasingly from outside sources as
well, to identify patterns and relationships that might be significant.
POINTS: 1
33. Data mining software is designed to print out data from the government sector, particularly from census reports.
a. True
b. False
ANSWER: False
RATIONALE: Feedback: Business intelligence refers to the high-tech analysis of a company’s data in order
to make better strategic decisions. Data mining or business intelligence means searching out
and analyzing data from multiple sources across the enterprise, and increasingly from
POINTS: 1
34. Hierarchical control involves cultural values, traditions, shared beliefs, and trust to foster compliance with
organizational goals.
a. True
b. False
ANSWER: False
RATIONALE: Feedback: Hierarchical control involves monitoring and influencing employee behavior
through extensive use of rules, policies, hierarchy of authority, written documentation, reward
systems, and other formal mechanisms. In contrast, decentralized control relies on cultural
values, traditions, shared beliefs, and trust to foster compliance with organizational goals.
POINTS: 1
35. Hierarchical methods define explicit rules, policies, and procedures for employee behavior.
a. True
b. False
ANSWER: True
RATIONALE: Feedback: Hierarchical methods define explicit rules, policies, and procedures for employee
behavior. Control relies on centralized authority, the formal hierarchy, and close personal
supervision.
POINTS: 1
36. With hierarchical control, the organizational culture is flexible, and managers consider culture a useful means for
coordinating employees and the organization.
a. True
b. False
ANSWER: False
RATIONALE: Feedback: With hierarchical control, the organizational culture is somewhat rigid, and
managers do not consider culture a useful means of controlling employees and the
organization. Hierarchical methods define explicit rules, policies, and procedures for
employee behavior.
POINTS: 1
37. In decentralized control, managers rely on shared goals and values to control employee behavior.
a. True
b. False
ANSWER: True
necessary. Managers rely instead on shared goals and values to control employee behavior.
POINTS: 1
38. In decentralized control, the organizational structure is vertical, like a pyramid.

a. True
b. False
ANSWER: False
RATIONALE: Feedback: With decentralized control, power is more dispersed and is based on knowledge
and experience as much as formal position. The organizational structure is flat and
horizontal, with flexible authority and teams of workers solving problems and making
improvements.
POINTS: 1
39. Effective control systems involve the use of feedback to determine whether organizational performance meets
established standards to help the organization attain its goals.
a. True
b. False
ANSWER: True
RATIONALE: Feedback: All effective control systems involve the use of feedback to determine whether
organizational performance meets established standards to help the organization attain its
goals. Managers set up systems for organizational control that consist of the four key steps in
the feedback control model.
POINTS: 1
40. Establishing metrics and standards of performance is one of the four key steps in a feedback control model.
a. True
b. False
ANSWER: True
RATIONALE: Feedback: The cycle of control includes setting strategic goals for departments or the
organization as a whole, establishing metrics and standards of performance, comparing
metrics of actual performance to standards, and correcting or changing activities as needed.
POINTS: 1
41. The formal routines, reports, and procedures that use information to maintain or alter patterns in organization activities
are referred to as the balanced scorecard.
a. True
b. False
ANSWER: False
RATIONALE: Feedback: The balanced scorecard is a comprehensive management control system that
balances traditional financial measures with operational measures relating to a company’s
critical success factors.
POINTS: 1
42. Custom service indicators focus on production and operating statistics, such as order fulfillment or cost per order.
a. True
b. False
ANSWER: False
RATIONALE: Feedback: Business process indicators focus on production and operating statistics, such as
order fulfillment or cost per order.
POINTS: 1
43. Behavior control is based on monitoring and rewarding results, and managers might pay little attention to how those
results are obtained.
a. True
b. False
ANSWER: False
RATIONALE: Feedback: Outcome control is based on monitoring and rewarding results, and managers
might pay little attention to how those results are obtained. Behavior control is based on
managers’ direct observation and supervision of employee actions to see whether the
individual follows rules and policies and performs tasks as instructed.
POINTS: 1
44. With behavior control, people have a great deal of autonomy in terms of how they do their job.
a. True
b. False
ANSWER: False
RATIONALE: Feedback: Behavior control is based on managers’ direct observation and supervision of
employee actions to see whether the individual follows rules and policies and performs tasks
as instructed. With outcome control, managers don’t supervise employees in the traditional
sense. People have a great deal of autonomy in terms of how they do their jobs—and
sometimes in terms of where and when they do their jobs—as long as they produce desired
outcomes.
POINTS: 1
45. With outcome control, rather than monitoring how many hours an employee works, managers focus on how much
work the employee accomplishes.
a. True
b. False
ANSWER: True
RATIONALE: Feedback: With outcome control, managers do not supervise employees in the traditional
sense. Rather than monitoring how many hours an employee works, managers focus on how
much work the employee accomplishes.
POINTS: 1
46. A primary use of intranets is for knowledge management.

a. True
b. False
ANSWER: True
RATIONALE: Feedback: A primary use of intranets is for knowledge management. Knowledge
management refers to the efforts to systematically find, organize, and make available a
company’s intellectual capital and to foster a culture of continuous learning and knowledge
sharing.
POINTS: 1
47. Tacit knowledge is formal, systematic knowledge that can be written down and passed on to others.
a. True
b. False
ANSWER: False
RATIONALE: Feedback: Codified knowledge is formal, systematic knowledge that can be articulated,
written down, and passed on to others in documents, rules, or general instructions. Tacit
knowledge, on the other hand, is often difficult to put into words.
POINTS: 1
48. Two approaches to knowledge management are the use of dialogue and communities of practice.
a. True
b. False
ANSWER: False
RATIONALE: Feedback: Two approaches to knowledge management are codified knowledge and tacit
knowledge. The first approach deals primarily with the collection and sharing of codified
knowledge, largely through the use of sophisticated IT systems. The second approach
focuses on leveraging individual expertise and know-how—tacit knowledge—by connecting
people face to face or through interactive social media.
POINTS: 1
49. Peripheral players have the fewest number of connections and operate on the boundaries of a network.
a. True
b. False
ANSWER: True
RATIONALE: Feedback: Peripheral players have the fewest number of connections and operate on the
boundaries of a network. They are marginal players, but they can still be important because
they may have niche expertise or valuable outside contacts.
POINTS: 1
50. Hubs link specialized pools of knowledge and integrate the larger network within the organization.
a. True
b. False
ANSWER: False
RATIONALE: Feedback: Brokers are the people who have a knack for connecting people across
boundaries and subgroups. Brokers link specialized pools of knowledge and integrate the
larger network within the organization.
POINTS: 1
51. Social businesses always use a top-down approach.

a. True
b. False
ANSWER: False
RATIONALE: Feedback: Like most new activities or techniques within organizations, social business
typically starts slowly and gains momentum. Unlike some other activities, social business
often starts bottom-up, that is, with lower-level employees and managers who see value in
using social media, and then spreads throughout the rest of the organization.
POINTS: 1
52. Using data intermediaries is a form of data mining.

a. True
b. False
ANSWER: False
RATIONALE: Feedback: A form of outsourcing is to use data intermediaries, firms that collect data from
multiple organizations and analyze the combined data for them.
POINTS: 1
53. Information technology enables an organization to do more work with fewer people.
a. True
b. False
ANSWER: True
RATIONALE: Feedback: Even for traditional businesses, new IT enables the organization to do more work
with fewer people. Customers can buy insurance, clothing, tools and equipment, and
practically anything else over the Internet without ever speaking to an agent or salesperson.
POINTS: 1
TOPICS: Impact on Organization Design
54. One of the greatest outcomes of information technology is its potential to improve coordination, communication, and
collaboration across the firm.
a. True
b. False
ANSWER: True
RATIONALE: Feedback: Perhaps one of the greatest outcomes of information technology (IT) is its
potential to improve coordination, communication, and collaboration across the firm. IT
applications can connect people even when their offices, factories, or stores are scattered
around the world, and many traditional tools companies use look outdated to young
employees.
POINTS: 1
55. With a network structure, most activities are outsourced so that different companies perform the various functions
needed by the organization.
a. True
b. False
ANSWER: True
RATIONALE: Feedback: With a network structure, most activities are outsourced so that different
companies perform the various functions needed by the organization. The speed and ease of
electronic communication makes the network structure a viable option for companies that
want to keep costs low but expand activities or market presence.
POINTS: 1
56. Discuss transaction processing systems, and give an example of how a company utilizes the system.
ANSWER: Initially, IT systems in organizations were applied to operations. These initial applications
were based on the notion of machine-room efficiency—that is, current operations could be
performed more efficiently with the use of computer technology. The goal was to reduce
labor costs by having computers take over some tasks. These systems became known as
transaction processing systems (TPSs), which automate the organization’s routine, day-to-
day business transactions. A TPS collects data from transactions such as sales, purchases
from suppliers, and inventory changes, and stores them in a database. For example, at
Enterprise Rent-A-Car, a computerized system keeps track of the 1.4 million transactions the
company logs every hour. The system can provide front-line employees with up-to-the-
minute information on car availability and other data, enabling them to provide exceptional
customer service.
(Students’ examples may vary.)
POINTS: 1
57. Explain social business using an example.

ANSWER: Social business refers to using social media technologies such as blogs, social networks, or
Twitter for interacting with and facilitating communication and collaboration among
employees, customers, and other stakeholders. For example, Dr. Pepper built a Facebook fan
base of 8.5 million people. Managers put out two messages a day on the company’s fan page
and then mine the responses to see what people are thinking. Social business can improve an
organization’s efficiency, increase productivity, and facilitate faster and smoother operations
by improving communication, collaboration, and knowledge sharing within and across firms.
POINTS: 1
58. Explain big data analytics with an example.

ANSWER: Big data analytics refers to technologies, skills, and processes for searching and examining
massive, complex sets of data that traditional data processing applications cannot handle to
uncover hidden patterns and correlations. Walmart collects more than 2.5 petabytes of data
every hour from customer transactions and uses those data to make better decisions.
Facebook uses the personal data on a user’s page and tracks and monitors the user’s online
behavior, and then searches through all those data to identify and suggest potential “friends.”
POINTS: 1
59. Explain the concept of decentralized control with an example.

ANSWER: Decentralized control is based on values and assumptions that are almost opposite to those of
hierarchical control. Rules and procedures are used only when necessary. Managers rely
instead on shared goals and values to control employee behavior. The organization places
great emphasis on the selection and socialization of employees to ensure that workers have
the appropriate values needed to influence behavior toward meeting company goals. No
organization can control employees 100 percent of the time, and self-discipline and self-
control are what keep people performing their jobs up to standard. Empowerment of
employees, effective socialization, and training all can contribute to internal standards that
provide self-control. Nick Sarillo, who owns two Nick’s Pizza & Pub shops in Illinois, says
his management style is “trust and track,” which means giving people the tools and
information they need, telling them the result they need to achieve, and then letting them get
there in their own way. At the same time, Sarillo keeps track of results so the company stays
on solid ground.
POINTS: 1
60. Compare behavior control with outcome control.

ANSWER: The reward system is often of paramount concern at the supervisory level. There are two
different approaches to evaluating and controlling team or individual performance and
allocating rewards. One approach focuses primarily on how people do their jobs, whereas the
other focuses primarily on the outcomes people produce. Behavior control is based on
managers’ direct observation and supervision of employee actions to see whether the
individual follows rules and policies and performs tasks as instructed. With behavior control,
managers provide heavy supervision and monitoring, pay attention to the methods people use
to accomplish their jobs, and evaluate and reward people based on specific criteria, which
might include areas such as appearance, punctuality, skills, and activities. Information
technology has increased the potential for managers to use behavior control.
A second approach to control is to pay less attention to what people do than to what they
accomplish. Outcome control is based on monitoring and rewarding results, and managers
might pay little attention to how those results are obtained. With outcome control, managers
do not supervise employees in the traditional sense. People have a great deal of autonomy in
terms of how they do their jobs—and sometimes in terms of where and when they do their
jobs—as long as they produce desired outcomes. Rather than monitoring how many hours an
employee works, for example, managers focus on how much work the employee
accomplishes.
POINTS: 1
61. Briefly explain social network analysis.

ANSWER: A valuable technique enabled by IT is called social network analysis (SNA), which can help
managers learn about informal relationships and network structures within an organization.
With SNA they can know who has influence and who does not, who people turn to for
answers, who has the knowledge and technical capability to be innovative, and who has
leadership potential. SNA was developed by scientists as a social theory to diagram
relationships among people that differ from the formal hierarchy. Social networks include
people who turn to one another for help, advice, information, and support, whether or not
they are in the same work group. It is within these networks that much of an organization’s
work gets done.
POINTS: 1
62. What is social business? Discuss its advantages using relevant examples.
ANSWER: Social business refers to using social media technologies for interacting with and facilitating
communication and collaboration among employees, customers, and other stakeholders.
Social media include company online community pages and forums, blogs and wikis for
virtual collaboration, social media sites such as Facebook or LinkedIn, video channels such
as YouTube, and microblogging platforms such as Twitter and China’s Sina Weibo.
Social media can provide for more effective sharing of tacit knowledge. For example, the
simplicity and informality of Twitter make it a fast and easy way for people to communicate.
People can send a question and quickly get responses from all over the organization or from
outsiders. Because of the popularity of Facebook and Twitter in people’s personal lives, most
employees are comfortable with the idea of “following” and communicating with their
colleagues online. Using social networks for a business enables people to easily connect with
one another across organizational and geographical boundaries based on professional
relationships, shared interests, problems, or other criteria. A Symantec salesman in Dubai
created a group on the company’s network that exchanges sales tips from employees around
the world. People can use the social network to search for tags that will identify others with
knowledge and resources that can help them solve a problem or do their jobs better.
Moreover, the nature of social networking builds trust so that people are more likely to
cooperate and share information.
In addition, social media technology is being used by companies to build trusting
relationships with customers. An early leader in this realm was Morgan Stanley Wealth
Management. As director of digital strategy, Lauren Boyman worked closely with the
company’s sales manager and investment advisors to use Twitter and other social media for
communicating with clients.
POINTS: 1
63. What is a social media command center? Explain its functions using relevant examples.
ANSWER: A social media command center is a dedicated office where a company can monitor what is
being said about the company on social media platforms. For others, it is a couple of desks in
a room. From the command center, staff can get instant feedback about what customers are
talking about, which trends are emerging, the most recent customer complaints about the
company or others in the industry, and how competitors are doing. The Coca-Cola Company,
for example, recently pulled an advertising campaign for Diet Coke using the theme “You’re
on” after the ads were mocked on social media. Some bloggers said they evoked a cocaine
habit and the history of Diet Coke’s sibling, Coke, which once included small amounts of the
drug as an ingredient. Command center findings can be shared across the organization. Cisco
set up a two-screen kiosk in front of its CEO and CMO’s offices to give those top leaders an
ongoing look at what was being said about the company in real time. Dell uses its command
center to uncover information to help staff better understand customers. Gatorade was one of
the pioneers with its Mission Control Center, which provides valuable social intelligence
concerning how products are resonating with customers, detailed sentiment about marketing
campaigns, and so forth. Wells Fargo Bank built its Social Media Command Center to be an
early alert system for customer service and risk management issues. Managers are aware that
even one small misstep in social channels could have serious consequences. So one goal of
the bank’s social business program is to balance the potential for employee engagement with
mitigating the risk such engagement can create.
(Students’ examples may vary.
POINTS: 1
64. What is meant by big data?

ANSWER: One of the hottest terms in information technology is big data. Big data refers to any massive
data set that exceeds the boundaries and conventional processing capabilities of IT. Big data
requires a nontraditional approach; it requires that managers throw out the old way of
thinking and take a totally new approach.
Big data includes data sets with sizes beyond the ability of traditional software tools to
manage and process the data within an acceptable time frame. Big data analytics refers to the
process of examining these large data sets to uncover hidden patterns, correlations, and other
useful information and make better decisions. Because the data sets are so massive, big data
analytics often cannot be done with existing advanced analytics tools; thus a new class of big
data technology has emerged.
POINTS: 1
65. Discuss the working of a balanced design.

ANSWER: A balanced or hybrid design is an in-house approach which places a small number of data
scientists in a “center of excellence” led by a chief data officer while the remainder stay in
the various functional departments or business units. The Center of Excellence plays a
coordination role, assessing needs, prioritizing projects, and so forth. This might be thought
of as a hub and spoke design, such that a team of experts in a central unit is available to
provide coordination, answer questions, and provide assistance concerning data analytics to
various departments and business units. This design recognizes that each unit has its own
analytics priorities, such as strengthening promotional efforts for marketing or optimizing
inventory levels for operations. However, it also honors the need for building up analytics
expertise that can be applied organization-wide and coordinating the data analytics strategy.
An analyst from the Center of Excellence might be assigned to one of the units for a specific
project, which helps to build expertise within the unit.
POINTS: 1

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Organization Theory and Design

Canadian 2nd Edition Daft Test Bank

5. Which of the following helps managers to make smarter decisions?

11. In contrast to hierarchical control, decentralized control relies on:

14. Which of the following is true of decentralized control?

15. Which of the following is true of an organization with decentralized control?

19. Feedback control helps managers:

21. Which of the following is not a perspective of the balanced scorecard?

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32. Data warehousing is also known as data mining.

38. In decentralized control, the organizational structure is vertical, like a pyramid.

46. A primary use of intranets is for knowledge management.

51. Social businesses always use a top-down approach.

52. Using data intermediaries is a form of data mining.

57. Explain social business using an example.

58. Explain big data analytics with an example.

59. Explain the concept of decentralized control with an example.

60. Compare behavior control with outcome control.

61. Briefly explain social network analysis.

64. What is meant by big data?

65. Discuss the working of a balanced design.

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