Chapter 6 Organizing the Business

1) Which term refers to the specification of jobs to be done within an organization and the ways in which
those jobs relate to one another?
A) delegation
B) a mission statement
C) job specialization
D) role responsibility
E) organizational structure

2) Which of the following clarifies structure and shows employees where they fit into a firm's operations?
A) delegation
B) departmentalization
C) organization charts
D) mission statement
E) job descriptions

3) Which term covers grouping jobs into logical units?

A) specialization
B) accountability
C) authorization
D) departmentalization
E) process management

4) What kind of departmentalization happens when an organization is divided into operations related to
different products?
A) functional departmentalization
B) process departmentalization
C) customer departmentalization
D) geographic departmentalization
E) regional departmentalization

5) What is the main organizational characteristic of decentralized firms?

A) flat
B) tall
C) diverse
D) multi-layered
E) matrix

6) Which feature characterizes the organization of centralized firms?

A) flat
B) tall
C) very large
D) responsive to change
E) well capitalized

7) Which factor plays a key role in determining an organization's structure?

A) competition and technology
B) location and life-cycle stage
C) profitability and leverage
D) research and development
E) mission and strategy

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8) Determining how people performing certain tasks can best be grouped together is called what?
A) departmentalization
B) specialization
C) controlling
D) leadership
E) directing

9) What type of departmentalization does Kraft Foods use by having separate divisions for different types
of foods?
A) customer
B) functional
C) geographic
D) product
E) brand

10) Vlasic has separate departments to transform cucumbers into fresh-packed pickles, pickles cured in
brine, and relishes. What is this an example of?
A) functional departmentalization
B) process departmentalization
C) customer departmentalization
D) geographic departmentalization
E) centralized departmentalization

11) What is dividing a store into a men's department, a women's department, and a luggage department an
example of?
A) product departmentalization
B) customer departmentalization
C) process departmentalization
D) geographic departmentalization
E) international departmentalization

12) A snack food firm has one division for the United States, one for Europe, and another for Asia. How
is this firm departmentalized?
A) by customer
B) by process
C) by geography
D) by function
E) by productivity

13) In what type of organization do most lower-level decisions need to be approved by upper
management before they can be implemented?
A) line
B) staff
C) decentralized
D) centralized
E) learning

14) At McDonald's, most advertising is handled at the corporate level, and any local advertising must be
approved by a regional manager. What kind of organization is McDonald's demonstrating?
A) authoritarian
B) committee
C) decentralized
D) centralized
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E) team

15) In what type of organization is decision-making authority delegated to levels of management at

various points below the top?
A) centralized
B) decentralized
C) point-of-sale
D) geographic
E) autocratic

16) With relatively few layers of managers, what do decentralized organizations tend to reflect?
A) tall organizational structure
B) short organizational structure
C) flat organizational structure
D) elliptical organizational structure
E) triangular organizational structure

17 Companies with centralized authority systems typically require multiple layers of management. What
type of organizational structures are these companies utilizing?
A) tall
B) short
C) flat
D) broad
E) oblique

18) With its many organizational layers, what type of organizational structure does the U.S. Army
demonstrate?
A) tall
B) step
C) flat
D) broad
E) triangular

19) In tall organizations, which feature describes the span of control?

A) short
B) tall
C) wide
D) narrow
E) vertical

20) Which of the following begins when a manager assigns responsibility to a subordinate?
A) centralization
B) delegation
C) liability
D) authority
E) training

21) Firms with what structure are structured around departments for each basic business action?
A) divisional structure
B) matrix structure
C) functional structure
D) international structure
E) regional structure
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22) Which of the following structures relies on product departmentalization?
A) matrix
B) functional
C) divisional
D) international
E) regional

23) The organization of the health care producer Johnson & Johnson includes consumer health care
products, medical devices and diagnostics, and pharmaceuticals. What kind of organizational structure
does this company use?
A) departments
B) regions
C) units
D) divisions
E) committees

24) Procter & Gamble has Baby Care, Beauty Care, Health Care, and Home and Fabric Care divisions in
its U.S. operations. What is this an example of?
A) customer departmentalization
B) process departmentalization
C) geographic departmentalization
D) functional departmentalization
E) product departmentalization

25) American Wood Products has three divisions. The Lumberjack division is involved in harvesting trees
and transporting them to lumber mills. The Milling division transforms cut timber into dimensional
lumber for building. The Paper Products division makes paper and cardboard from the remnants of the
milling process. What type of departmentalization is this an example of?
A) functional departmentalization
B) process departmentalization
C) customer departmentalization
D) geographic departmentalization
E) brand departmentalization

26) Silver Designs is a high-end clothing manufacturer. They have three divisions producing clothes for
men, women, and teens. What is this an example of?
A) functional departmentalization
B) process departmentalization
C) customer departmentalization
D) product departmentalization
E) geographic departmentalization

27) Jack Welch, former CEO of General Electric, stated, "If you don't let managers make their own
decisions, you're never going to be anything more than a one-person business." What style of
management is Welch proposing?
A) authentic management
B) linear management
C) centralized management
D) group management
E) decentralized management

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28) At Ace Products, three vice presidents report to the CEO, including the VP for Finance, the VP for
Marketing, and the VP for Operations. What type of structure does Ace Products have?
A) divisional
B) matrix
C) regional
D) functional
E) international

29) Thomas Corp. has three basic departments: children's books, games, and toys. What type of structure
does the company have?
A) divisional
B) matrix
C) functional
D) process
E) global

At Appleson Publishing, products are produced by a team representing different functional groups, none
of which have supervisory authority over any of the others. Represented departments include Design,
Production, and Marketing. Design department members are skilled at identifying customer requirements
and creating product specifications. Their success is measured by return on product investment, which
takes into account both the money earned by a product and the money spent on that product. Production
department members are skilled at project execution. They are responsible for creating products
according to the Design department members' specification. The Production department is considered
successful when it completes projects according to schedule and project spending does not exceed the
project's budget. Marketing department members are responsible for building profitable relationships with
target market segments. They are skilled at communicating a product's value and persuading customers to
make purchases. Marketing department members' success is measured by the revenue that the products
generate.
30) Which of the following questions would MOST likely lead to a conflict between Design department
members and Production department members?
A) Should Appleson invest in a new project that requires heavy initial investment but is expected to lead
to a large stream of revenue in the long run?
B) Should a project be launched later than planned in order to make changes that will make it more
attractive to customers?
C) Should product management focus on the needs that customers have already expressed or should it try
to anticipate unexpressed needs?
D) Is the team project process at Appleson more effective than it would be if it followed a more
traditional organizational structure?
E) When projects do not meet expectations, is the failure likely to be caused by faulty product design or
inadequate market development?

All American Burger is a nationwide fast food chain that competes with McDonald's, Burger King, and
Wendy's. Management at All American Burger is debating whether to have a more centralized or a more
decentralized organizational structure.

31) Which of the following, if true, would MOST strongly support the conclusion that All American
Burger should operate in a highly centralized manner?
A) All American Burger restaurants are spread over a large geographic area.
B) A greater number of managers have expressed an interest in making policy.
C) Entry-level workers at All American Burger are likely to be part-time or flex-time employees.
D) The organizations that choose more centralized operations are likely to be organizations in crisis.
E) Customers choose All American Burger, in large part, because of the consistency of the dining
experience.
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