Fundamentals of Management, 7e (Robbins/DeCenzo/Coulter) Chapter Organizational Structure and Culture 1) Organizational design is the process in which managers change or develop an organization's structure Answer: TRUE Explanation: By definition, organization design requires a manager to develop an organization's structure, or change the structure in some way Diff: Page Ref: 124 Objective: 5.1 2) There are four basic elements in organizational structure Answer: FALSE Explanation: There are six elements: work specialization, departmentalization, authority and responsibility, span of control, centralization and decentralization, and formalization Diff: Page Ref: 124 Objective: 5.1 3) The original ideas about organizational design formulated by Fayol and Weber are now largely obsolete Answer: FALSE Explanation: Surprisingly, many of the ideas of Fayol and Weber about organizational design are still valid today Diff: Page Ref: 124 Objective: 5.1 4) When work specialization originally began to be implemented early in the twentieth century, employee productivity initially rose Answer: TRUE Explanation: Initially, managers saw huge increases in productivity as a result of specialization However, when work became overly specialized employee morale and motivation dropped, erasing many productivity gains Diff: Page Ref: 125 Objective: 5.1 5) Today, most managers see work specialization as a source of ever-increasing productivity Answer: FALSE Explanation: Today managers see a limit to the amount of productivity increase they can see from specialization Specialization that is not deadening to employees tends to work best Monotonous assembly-line work seems to have diminishing returns Diff: Page Ref: 125 Objective: 5.1 Copyright © 2011 Pearson Education, Inc 6) The advantage of work specialization is that it tends to result in high employee motivation and high productivity Answer: FALSE Explanation: The opposite occurs—too much work specialization results in lower motivation and productivity Diff: Page Ref: 125 Objective: 5.1 7) Departmentalization is a how jobs are grouped Answer: TRUE Explanation: The grouping of jobs along lines of function, product, and other criteria defines departmentalization Diff: Page Ref: 126 Objective: 5.1 8) Staff authority is the ability to direct the work of any employee who does not have a higher rank in the organization Answer: FALSE Explanation: Staff authority is authority over support staff only, not general employees Thus a payroll manager has authority over payroll staff but not other organization employees Diff: Page Ref: 126 AACSB: Analytic Skills Objective: 5.1 9) Grouping jobs on the basis of major product areas is termed customer departmentalization Answer: FALSE Explanation: Grouping along the lines of product areas is termed product departmentalization, not customer departmentalization Diff: Page Ref: 126 Objective: 5.1 10) Line authority can be exerted only after a manager checks with his or her superior Answer: FALSE Explanation: Line authority does not require checking with superiors It can be exerted as the manager sees fit without any kind of consultation Diff: Page Ref: 128 Objective: 5.1 11) Unity of command prevents an employee from trying to follow two conflicting commands at once Answer: TRUE Explanation: The original management theorists stated that subordinates should not be put in the position to try to follow two or more conflicting commands at once Unity of command ensured that the command from the highest organizational level be followed Diff: Page Ref: 129 Objective: 5.1 Copyright © 2011 Pearson Education, Inc 12) Power is a right that a manager has when he or she has a higher rank in an organization Answer: FALSE Explanation: Power can arise from rank, but it also can arise from a particular skill, knowledge, or access within the organization The boss's secretary has power to gain access to the boss without having a high rank in the organization Diff: Page Ref: 130 Objective: 5.1 13) When decisions tend to be made at lower levels in an organization, the organization is said to be centralized Answer: FALSE Explanation: Centralized decisions originate at higher rather than lower levels of an organization Diff: Page Ref: 132 Objective: 5.1 14) Traditional organizations are structured in a pyramid, with the power and authority located in the pyramid's broad base Answer: FALSE Explanation: The power and authority in a traditional organization resides at the narrow point of the pyramid where top management is located, not the base Diff: Page Ref: 133 Objective: 5.1 15) The two prevalent organization structure models in today's world are the organic organization and the inorganic organization Answer: FALSE Explanation: The two structures are termed organic and mechanistic Diff: Page Ref: 134 Objective: 5.2 16) A mechanistic organization is bureaucratic and hierarchical Answer: TRUE Explanation: Mechanistic organizations are formal, hierarchical, impersonal, specialized, and heavily dependent on rules and protocols Diff: Page Ref: 134 Objective: 5.2 17) An organic organization tends to be flexible and have few formal rules Answer: TRUE Explanation: An organic organization tries to be nimble in a dynamic business climate, paring down bureaucratic complexity and focusing on innovation, flexibility, and creativity Diff: Page Ref: 134 Objective: 5.2 Copyright © 2011 Pearson Education, Inc 18) Innovators need the efficiency, stability, and tight controls of a mechanistic structure rather than an organic structure Answer: FALSE Explanation: Innovators usually better in a flexible organic structure where they are given leeway to think creatively Diff: Page Ref: 135 AACSB: Analytic Skills Objective: 5.2 19) The relationship between organizational size and structure tends to be linear Answer: FALSE Explanation: The greater the size of the organization, the more mechanistic it tends to be However, the relationship is not at all linear, but rather seems to jump at certain levels in numbers of employees An organization with fewer than 100 employees, for example, may be very organic, while adding just a few more employees could cause the organization to suddenly take on more mechanistic characteristics Diff: Page Ref: 135-136 AACSB: Analytic Skills Objective: 5.2 20) Joan Woodward attempted to view organizational structure from a technological perspective Answer: TRUE Explanation: Woodward looked at how production methods affected organization structure Diff: Page Ref: 136 AACSB: Technology Objective: 5.2 21) Woodward concluded that mass production worked best with an organic organization structure Answer: FALSE Explanation: Woodward found that a mechanistic structure, rather than an organic structure, worked best with mass production technology Diff: Page Ref: 136 AACSB: Technology Objective: 5.2 22) The stability of a mechanistic structure seems to work best in today's dynamic and uncertain business environment Answer: FALSE Explanation: Most managers feel that today's dynamic environment calls for a more organic approach, not a more mechanistic approach Diff: Page Ref: 136 AACSB: Technology Objective: 5.2 Copyright © 2011 Pearson Education, Inc 23) The strength of a simple system is that everything depends on a single person Answer: FALSE Explanation: Having a single person be the repository of all organizational knowledge and power is a liability rather than a strength in many cases, if the person suddenly becomes unavailable or unwilling to perform his or her duties Diff: Page Ref: 137 Objective: 5.3 24) A strength of a functional structure is that it avoids duplication Answer: TRUE Explanation: Putting specialties together makes departments efficient For example, expensive equipment can get used in one central place, eliminating the need for the same equipment to be located elsewhere in the organization Diff: Page Ref: 138 Objective: 5.3 25) A weakness of the divisional structure is that duplication tends to occur Answer: TRUE Explanation: A divisional structure can duplicate entire departments whose tasks could otherwise be carried out by a single, centrally located department Diff: Page Ref: 138 Objective: 5.3 26) In a team structure, team members are not held responsible for their decisions Answer: FALSE Explanation: The opposite occurs—team members make decisions and are accountable for their decisions Diff: Page Ref: 139 Objective: 5.3 27) In a team structure there is a clear line of managerial authority from top to bottom Answer: FALSE Explanation: A team makes decisions on its own For the most part, a team is not subject to decisions or orders that come from outside of the team Diff: Page Ref: 139 Objective: 5.3 28) When an employee in a matrix structure finishes a project, she goes back to her functional department Answer: TRUE Explanation: A matrix structure maintains departments When projects are finished, employees return to their original department Diff: Page Ref: 139 Objective: 5.3 Copyright © 2011 Pearson Education, Inc 29) Employees in an organization with a matrix design can have two bosses for the same job Answer: TRUE Explanation: An employee in a project group can have a project manager in addition to a manager from his or her functional department Diff: Page Ref: 140 Objective: 5.3 30) A significant advantage of the matrix structure is the clear chain of command from top to bottom of the organization Answer: FALSE Explanation: In a matrix structure in which employees can have multiple supervisors, the chain of command can become confused and conflicts can arise Diff: Page Ref: 140 Objective: 5.3 31) When an employee in a project structure finishes a project, he goes back to his original department Answer: FALSE Explanation: In a project structure an employee has no original department Instead, after the project ends the employee enrolls in a new project Diff: Page Ref: 140 Objective: 5.3 32) Vertical boundaries separate employees by their rank in an organization Answer: TRUE Explanation: Vertical boundaries refer to the classic corporate pyramid in which rank is measured by how high vertically you are on the pyramid Diff: Page Ref: 141 Objective: 5.3 33) Horizontal boundaries separate employees by the amount of power they have in an organization Answer: FALSE Explanation: Horizontal boundaries separate employees by what they specialize in, not how much power they have Diff: Page Ref: 141 AACSB: Analytic Skills Objective: 5.3 34) A virtual organization relies on freelancers who have no permanent status or position in the organization Answer: TRUE Explanation: Virtual organizations keep a skeleton staff and rely on the talents of free agents who perform the work that the organization does Diff: Page Ref: 141 AACSB: Analytic Skills Objective: 5.3 Copyright © 2011 Pearson Education, Inc 35) Managers want to eliminate boundaries in organizations primarily to increase stability and reduce flexibility Answer: FALSE Explanation: Managers want primarily to increase flexibility in boundaryless organizations without jeopardizing stability Diff: Page Ref: 141 Objective: 5.3 36) Horizontal boundaries separate employees by the specialization of their job Answer: TRUE Explanation: Horizontal boundaries mark the difference between, for example, an ad executive and a member of a creative advertising team Both may have equal ranks in the organization, but they are separated by what they Diff: Page Ref: 141 AACSB: Analytic Skills Objective: 5.3 37) A virtual organization may disintegrate after it finishes its task Answer: TRUE Explanation: Virtual organizations can be ad hoc All but a few administrators can go on to work for different companies Diff: Page Ref: 141 Objective: 5.3 38) All learning organizations share a distinct structure Answer: FALSE Explanation: Learning organizations take on a variety of different structures Each structure is customized for the organization and the work that it does Diff: Page Ref: 143 Objective: 5.3 39) A company's organizational culture refers to a system of shared political beliefs Answer: FALSE Explanation: A company's culture may share values and beliefs that involve the company itself, but political beliefs are not shared Diff: Page Ref: 145 Objective: 5.4 40) Employees learn organizational culture by reading official organization documents and histories Answer: FALSE Explanation: Employees learn corporate culture from traditions, stories, symbols, attitudes, and many other sources Official documents are usually not good sources for learning about corporate culture Diff: Page Ref: 146 Objective: 5.4 Copyright © 2011 Pearson Education, Inc 41) An organization's founder has little influence on its culture Answer: FALSE Explanation: The founders' values and attitudes typically establish all key elements of an organization's culture Diff: Page Ref: 146 Objective: 5.4 42) Strong organizational culture can eliminate the need for rules and bylaws Answer: TRUE Explanation: A strong culture can serve as guidelines for employees, eliminating the need for official rules and regulations Diff: Page Ref: 147 AACSB: Ethical Understanding and Reasoning Abilities Objective: 5.4 43) Organizational design requires a manager to A) organize groups within an organization B) change the culture of an organization C) change or develop the structure of an organization D) change the logo of an organization Answer: C Explanation: C) By definition, organizational design requires that an individual develop or change an organization's structure Changing organizational culture or organizing groups may influence structure in minor ways, so those choices are incorrect Changing the logo of the organization also does not constitute creating or significantly modifying the organization's structure Diff: Page Ref: 124 Objective: 5.1 44) All of the following are part of the process of organizational design EXCEPT A) decide how specialized jobs should be B) determine rules for employee behavior C) determine the level at which decisions are made D) determine goals for the organization Answer: D Explanation: D) Organizing jobs, formulating rules, or clarifying a decision-making process are all clearly examples of developing an organization's structure Determining goals is part of establishing an organization's mission, not creating its structure that will help carry out that mission Diff: Page Ref: 124 Objective: 5.1 Copyright © 2011 Pearson Education, Inc 45) Which of the following are NOT basic elements of organizational structure? A) work specialization, span of control B) chain of command, line authority C) centralization, decentralization D) departmentalization, formalization Answer: B Explanation: B) The six elements of organizational structure are given in all three incorrect choices Chain of command and line authority are not included as basic elements of organizational structure, so "chain of command, line authority" is the correct response Diff: Page Ref: 124 Objective: 5.1 46) Which of the following is synonymous with work specialization? A) division of labor B) job discrimination C) chain of command D) job preference Answer: A Explanation: A) Division of labor is the only term among the four choices that describes how work is specialized Job discrimination describes how employees are mistreated in the job market Job preference describes how employees select jobs Chain of command describes authority relationships in organizations Diff: Page Ref: 124 Objective: 5.1 47) Which statement accurately defines work specialization? A) It is the degree to which tasks are grouped together B) Individual employees specialize in doing part of an activity rather than the entire activity C) Jobs are ranked relative only to their worth or value to the businesses D) Work specialization clarifies who reports to whom Answer: B Explanation: B) The choice regarding the degree to which tasks are grouped together describes departmentalization, not specialization The choices regarding ranking jobs and work specialization both describe a power relationship in an organization, so they are incorrect The choice regarding individual employees accurately identifies the idea that work specialization requires dividing a task into parts, so it is the correct response Diff: Page Ref: 124 AACSB: Analytic Skills Objective: 5.1 Copyright © 2011 Pearson Education, Inc 48) Early supporters of work specialization saw it as A) a reliable way to increase productivity B) a good way to increase employee morale C) a source of innovation D) an immoral way to coerce workers into greater productivity Answer: A Explanation: A) Work specialization has never been seen as a way to increase productivity or innovation Work specialization was seen as an excellent but ultimately limited way to increase productivity, so "a reliable way to increase productivity" is the correct response Diff: Page Ref: 125 AACSB: Analytic Skills Objective: 5.1 49) Early users of work specialization early in the twentieth century found that the practice ultimately resulted in A) higher profits and better employee morale B) bored workers with low morale C) huge and permanent productivity gains D) better communication among employees Answer: B Explanation: B) While managers initially saw profit and productivity gains in work specialization, the gains were not huge, not permanent, and not accompanied by increases in morale, so these choices are incorrect Better communication was never observed by managers so that choice is incorrect After initial gains, managers did see an inevitable drop in morale of employees as they contended with drudgery, making "bored workers with low morale" the correct response Diff: Page Ref: 125 AACSB: Ethical Understanding and Reasoning Abilities Objective: 5.1 50) Today, managers favor this approach instead of work specialization A) All tasks are performed by all employees B) Partners switch jobs every half hour C) Employees perform a broad range of tasks D) Monotonous tasks are shared by all employees Answer: C Explanation: C) Today's managers prefer an approach in which employees perform many tasks, eliminating monotony The other choices given here have been tried in isolated cases, but none constitute a prevalent approach of today's managers Diff: Page Ref: 125 AACSB: Analytic Skills Objective: 5.1 10 Copyright © 2011 Pearson Education, Inc 120) By giving employees two direct superiors, a matrix structure violates this key element of organizational design A) unity of command B) chain of command C) span of management D) decentralization Answer: A Explanation: A) Unity of command requires that a single voice be dominant in the event that there are conflicting orders in an organization Since a matrix system can give a single employee two bosses, it violates the unity of command tradition Diff: Page Ref: 139 AACSB: Reflective Thinking Objective: 5.3 121) A key difference between a team structure and a matrix structure is that a team structure while a matrix structure does not A) empowers group members B) works on projects C) has fairly permanent groups or teams D) holds group members accountable Answer: C Explanation: C) Both matrix and team structures feature small groups working together on projects with empowered employees who are held accountable for their decisions A key difference between the two structures is that teams can be fairly permanent, while matrix groups return to their functional departments when their project is complete Diff: Page Ref: 139 AACSB: Analytic Skills Objective: 5.3 122) In a project structure, when employees finish a project they A) return to their department B) return to a different division C) move on to another project D) return to their regular work Answer: C Explanation: C) A project structure has employees who have no "home" department and move from one project to the next in the organization This identifies moving on to another project as the correct response and eliminates the other three choices as correct responses, since the employee would not return to a department, division, or "regular work." Diff: Page Ref: 140 AACSB: Analytic Skills Objective: 5.3 34 Copyright © 2011 Pearson Education, Inc 123) In an orchestra, a horizontal boundary exists between which of the following? A) the string section and the horn section B) the string section and the conductor C) the conductor and the audience D) the string section and the audience Answer: A Explanation: A) A horizontal boundary in an organization refers to specialization, rather than rank, that separates individuals Thus, string and horn sections would be roughly equal in rank in an orchestra, meaning that they would be separated horizontally by their specialization, not vertically by their rank The other choices compare groups or individuals who are not equal in rank For example, the string section and conductor would be separated vertically since the conductor would outrank a string player, making the choice regarding the string section and the conductor incorrect Similarly, the two choices regarding the audience can also be eliminated as they compare groups that not have the same rank in the orchestra Diff: Page Ref: 140 AACSB: Analytic Skills Objective: 5.3 124) In an orchestra, a vertical boundary exists between which of the following? A) the string section and the horn section B) the string section and the conductor C) the horn section and the percussion section D) the percussion section and the string section Answer: B Explanation: B) A vertical boundary denotes differences in rank between individuals Since string and horn sections, horn and percussion sections, and percussion and string sections are all roughly equal in rank, no vertical boundary exists between them A vertical boundary does exist between the conductor and the string section, since the conductor presumably outranks the string players, making that the correct response Diff: Page Ref: 140 AACSB: Analytic Skills Objective: 5.3 125) Boundaryless organizations try to eliminate within their organization A) horizontal specialization and vertical hierarchy B) horizontal specialization only C) vertical hierarchy only D) vertical specialization only Answer: A Explanation: A) Boundaryless organizations try to eliminate both kinds of boundaries—vertical boundaries that separate by rank and horizontal boundaries that separate by specialization This makes horizontal specialization and vertical hierarchy the correct response and renders the other choices incorrect Diff: Page Ref: 141 AACSB: Analytic Skills Objective: 5.3 35 Copyright © 2011 Pearson Education, Inc 126) A virtual organization is essentially who come together for a particular project A) a group of employees from a single company B) a group of free agents C) a team of employees from different departments of a company D) a group of top managers and CEOs Answer: B Explanation: B) A virtual organization maintains a small administrative staff, but relies on freelancers to perform tasks, complete projects, and the work of the organization The freelancers not come from a single organization, nor are they high ranked corporate managers Instead, the freelancers come from a variety of different places and are typically unaffiliated with any permanent organization or company Diff: Page Ref: 141 AACSB: Analytic Skills Objective: 5.3 127) How does a virtual organization save on costs? A) by hiring people who specialize in what they B) by hiring fewer people than they need and making them work much longer hours C) by eliminating all administrative duties D) by keeping only a small permanent staff for administrative purposes only Answer: D Explanation: D) A virtual organization can temporarily grow to a large size by hiring large numbers of freelancers However, it keeps costs to a minimum by paying these individuals only for actual work they and not having to provide benefits and compensation when there is no work for the employees to perform This makes keeping a small permanent staff the correct response Eliminating all administrative duties is incorrect because a virtual organization does keep a small administrative staff Hiring people who specialize in what they is incorrect because hiring people with specialties does not necessarily keep costs down Hiring fewer people than they need is incorrect because virtual organizations not typically hire fewer workers than are necessary Diff: Page Ref: 141 AACSB: Analytic Skills Objective: 5.3 128) A subcontracts part of a project out to outside suppliers A) virtual organization B) boundary organization C) matrix structure D) network organization Answer: D Explanation: D) A network organization takes on projects knowing that it has resources to complete only some phases of the work The network organization then relies on subcontracting to outside firms or groups who specialize in the services needed by the project None of the other choices—virtual, boundary, or matrix structures have these qualities, so all of these choices are incorrect for this situation Diff: Page Ref: 141 Objective: 5.3 36 Copyright © 2011 Pearson Education, Inc 129) A building contractor follows the network organization model when he does which of the following? A) does the framing and tiling by himself B) hires three workers to help with framing C) gives orders to workers D) farms out the plumbing to a plumbing firm Answer: D Explanation: D) A building contractor functions as a network organization when he farms out work to others The contractor, for example, may one part of the job himself and subcontract phases of the job that he is not qualified to This makes farming out the plumbing the correct response Doing the framing and tiling on his own, hiring workers, or issuing orders does not qualify the contractor as a networker; that occurs only when he actually subcontracts a part of the job to another organization or individual Diff: Page Ref: 141 Objective: 5.3 130) A learning organization develops the capability to A) add new training programs to keep employees up to date B) accept the conventional wisdom of the industry C) continuously learn, adapt, and change D) attract new employees who have special knowledge Answer: C Explanation: C) A learning organization does not just train employees, gain insights, or hire knowledgeable people Instead, a learning organization specializes in adapting to new conditions and developing new methods and ideas as an organization For example, a learning organization might collectively discover innovative new ways to improve a process or a product This makes continuously learning, adapting, and changing the correct response Diff: Page Ref: 143 Objective: 5.3 131) A learning organization requires employees to A) encode information to prevent competitors from stealing ideas B) collaborate with competitors C) make all ideas public D) share information and collaborate with one another Answer: D Explanation: D) Collaboration is critical to a learning organization, making sharing information and collaborating with one another the correct response Note that collaboration is limited to the inside of the organization, making collaborating with competitors and making ideas public incorrect Encoding information is wrong because it focuses on employees failing to share information, something that a learning organization would not Diff: Page Ref: 143 AACSB: Analytic Skills Objective: 5.3 37 Copyright © 2011 Pearson Education, Inc 132) All of the following are characteristic of learning organizations EXCEPT A) a strong sense of community B) a collaborative environment C) managers who serve as facilitators D) fear of making mistakes Answer: D Explanation: D) To function well, learning organizations need a strong sense of community and skilled managers who facilitate collaboration This leaves fear of making mistakes as the correct response—learning organizations want their employees to be creative and recognize that part of the creative process is to make mistakes Diff: Page Ref: 143 Objective: 5.3 133) Organizational learning can't take place without A) complete privacy for employees B) a clear chain of command C) a shared vision of the future D) a stable structure or hierarchy Answer: C Explanation: C) Learning organizations are often boundaryless organizations in which such things as chain of command, a rigid hierarchy, or excessive privacy are out of place One thing that learning organizations require is a vision of the future to guide employees toward common goals Diff: Page Ref: 144 Objective: 5.4 134) The culture of an organization is analogous to the of an individual A) skills B) personality C) motivation D) ability Answer: B Explanation: B) Organizational cultures are like people—individual, contradictory in places, full of quirks and unexpected traits In other words, organizational cultures resemble individual personalities, making personality the correct response and eliminating the other choices Diff: Page Ref: 145 AACSB: Communication Objective: 5.4 38 Copyright © 2011 Pearson Education, Inc 135) Which of the following phrases best characterizes the culture of an organization? A) our official code of conduct B) how things are done around here C) the most efficient way to things D) guidelines for where this organization is going Answer: B Explanation: B) The most apt phrase for an organizational culture is "how things are done around here." An organizational culture is not thought to be official in any way, efficient, or to comprise a set of guidelines to light the way to the future Instead, the organizational culture is a set of values and attitudes, making how things are done around here a perfect description Diff: Page Ref: 145 AACSB: Reflective Thinking Objective: 5.4 136) Which of the following is NOT a common way in which corporate cultures are transmitted to employees? A) stories B) informal rituals C) formal culture meetings D) symbols Answer: C Explanation: C) Corporate culture gets handed down through stories, rituals, and material symbols, but not formal culture meetings The dissemination of cultural values is almost always an indirect process in which meaning is inferred from a story, action, or even something as small as a facial expression Diff: Page Ref: 145 Objective: 5.4 137) Sony Corporation's focus on product innovation is an example of which of the following dimensions of organizational culture? A) member identity B) people focus C) risk tolerance D) conflict tolerance Answer: C Explanation: C) Innovation is a creative process and being creative almost always involves making mistakes and taking risks This makes risk tolerance the correct choice and eliminates the other items that not deal with innovation or creativity Diff: Page Ref: 145 Objective: 5.4 39 Copyright © 2011 Pearson Education, Inc 138) Which of the following is NOT considered to be a characteristic of organizational culture? A) attitudes about taking risks B) aggressiveness and competitiveness C) purchasing policies D) attention to detail Answer: C Explanation: C) Organizational culture involves attitudes, how competitive employees are, and how perspicacious and tidy employees are Organizational culture does not involve purchasing, making "purchasing policies" the correct response for this question Diff: Page Ref: 145 Objective: 5.4 139) The original source of an organization's culture usually reflects the vision and attitudes of A) the current president or CEO of the organization B) the organization's original employees C) contemporaries who are admired by the organization D) the organization's founders Answer: D Explanation: D) Corporate culture is typically a tradition so it would be impossible for it to be provided by current members of the organization or contemporaries held in high esteem Original employees of an organization might help contribute to corporate culture, but the culture's primary sources are invariably the organization's founders In general, corporate cultures reflect the values and attitudes of their founders, making the organization's founders the correct response Diff: Page Ref: 146 Objective: 5.4 140) What does the story of 3M employee Art Fry inventing the Post-It Note to make church hymns communicate to 3M employees? A) that church is important B) that creativity is important C) that workers need to take a day off D) that workers never stop working Answer: B Explanation: B) Fry's discovery is celebrated because it is a brilliant example of creativity One can infer from the story that being creative does not end when an employee leaves the office Rather, a truly creative person can derive inspiration from the most unlikely of circumstances Diff: Page Ref: 146 AACSB: Reflective Thinking Objective: 5.4 40 Copyright © 2011 Pearson Education, Inc 141) All of the following show why corporate rituals can be valuable in a corporate culture EXCEPT A) rituals help initiate new employees into the culture B) rituals reinforce corporate values C) rituals symbolize key ideas that are important in the culture D) rituals intimidate and silence critics of the corporate culture Answer: D Explanation: D) Rituals have been shown to be valuable for initiations, reinforcing attitudes and values, and conveying important ideas and ideals One would hope that rituals would not be used to intimidate or stifle the instincts of an employee in any way, making the choice regarding that issue the correct response Diff: Page Ref: 147 AACSB: Analytic Skills Objective: 5.4 142) Which of the following most accurately reflects the difference between strong cultures and weak cultures? A) Strong cultures tend to encourage employee innovation, while weak cultures not B) Weak cultures are found in most successful organizations, whereas strong cultures are relatively rare C) Strong cultures have less of an influence on employee behavior than weak cultures D) Company values are more deeply held and widely shared in strong cultures than in weak cultures Answer: D Explanation: D) Strong cultures are common in successful organizations, making the choice regarding weak cultures being found in most successful organizations incorrect The choice regarding strong cultures having less influence is incorrect because strong cultures have more impact on individuals than weak cultures Strong cultures encouraging employee innovation is incorrect because a strong culture may or may not encourage innovation This leaves the choice regarding company values being more deeply held and widely shared as the correct response, as it accurately states that strong cultures imprint themselves more deeply into individuals than weak cultures Diff: Page Ref: 147 AACSB: Analytic Skills Objective: 5.4 41 Copyright © 2011 Pearson Education, Inc Eric the Redd (Scenario) Eric Redd graduated from college and was hired by a corporation that manufactured parts for the automotive industry The employees on the assembly line seemed bored, and their motivation was low Eric's employer decided to try to reorganize to increase productivity During his career, Eric will see his job change from an engineer to a more complex job assignment 143) The jobs of assembly-line employees are to be changed to allow more tasks to be done by individual workers This is a reduction in A) work specialization B) departmentalization C) chain of command D) centralization Answer: A Explanation: A) Increasing the number of tasks that employees perform is an example of becoming less specialized It would not increase how many departments there are, affect authority relationships, or decision making, so all of these choices would be incorrect for this question Diff: Page Ref: 124 AACSB: Analytic Skills Objective: 5.1 144) Eric, who is trained as an engineer, is now in a group with production workers and marketing specialists from different departments designing a new product that the company plans to offer This situation could be described as a(n) A) alternative assignment B) collective assignment C) advanced assignment D) project assignment Answer: D Explanation: D) Since Eric is working with employees from different departments, it appears that he is working on a project team within a matrix structure He will go on to design the new product, then move back to his original position in the organization None of the other terms given here match a recognized work structure, so they are incorrect Diff: Page Ref: 140 AACSB: Analytic Skills Objective: 5.3 42 Copyright © 2011 Pearson Education, Inc 145) Eric is offered a chance to help direct the efforts of some employees assigned to his work group This is a chance for Eric to experience A) functional structure B) divisional structure C) responsibility D) authority Answer: D Explanation: D) By definition, authority gives an employee the right to direct the work of others and give orders if necessary This means that Eric is assuming authority Assuming responsibility would be just meeting organizational obligations The other two choices are incorrect because they refer to organizational design structures, not abilities that Eric might assume Diff: Page Ref: 128-129 AACSB: Analytic Skills Objective: 5.1 146) Eric sees this new assignment as an increase in , or an obligation or expectation for him to perform at a new level A) functional structure B) divisional structure C) responsibility D) authority Answer: C Explanation: C) Assuming authority is about giving orders and directing the work of others while assuming responsibility is about fulfilling one's obligations with respect to the organization Since Eric is meeting expectations, responsibility is the correct response Diff: Page Ref: 128 AACSB: Analytic Skills Objective: 5.1 147) In a short essay, list and explain the three key elements in designing an organization's structure Answer: Work specialization This concept describes the degree to which tasks in an organization are divided into separate jobs The essence of work specialization is that an entire job is not done by one individual, but instead is broken down into steps, with each step completed by a different person Departmentalization The basis by which jobs are grouped together is called departmentalization The five common forms of departmentalization include functional, product, geographical, process, and customer departmentalization Chain of command This is the continuous line of authority that extends from upper organizational levels to the lowest levels and clarifies who reports to whom It helps employees answer questions such as "Who I go to if I have a problem?" or "To whom am I responsible?" Diff: Page Ref: 124-134 AACSB: Analytic Skills Objective: 5.1 43 Copyright © 2011 Pearson Education, Inc 148) In a short essay, list and explain the three additional key elements in designing an organization's structure Answer: Span of control The question of how many employees a manager can efficiently and effectively supervise is important because, to a large degree, it determines the number of levels and managers an organization has Trends in today's organizations show wider spans of control that reflect bettertrained employees who are more independent and accountable Centralization and decentralization Centralization describes the degree to which decision making is concentrated at a single point in the organization If top managers make the organization's key decisions with little or no input from below, then the organization is centralized In contrast, the more that lower-level employees provide input or actually make decisions, the more decentralized the organization is Authority, responsibility, and power Authority is the right to give directions and expect them to be obeyed within an organization; the amount of authority for a given position is inherent in that position, not related to the individual who fills that position Responsibility is the obligation to perform assigned tasks While authority is a right given by position, power is an ability to change things that is independent of position For example, a low-level employee with a particular skill has considerable power in an organization if that skill is valuable to the organization Diff: Page Ref: 124-134 AACSB: Analytic Skills Objective: 5.1 149) In a short essay, list and discuss the three common forms of departmentalization Answer: Functional departmentalization Jobs are grouped by the functions (i.e., marketing, finance, human resources) performed This approach can be used in all types of organizations, although the functions change to reflect the organization's objectives and work activities Product departmentalization Jobs are grouped by product line In this approach, each major product area is placed under the authority of a manager who is a specialist in, and is responsible for, everything having to with that product line Examples might include men's shoes, women's shoes, men's clothing, women's clothing, and so on Geographical departmentalization Jobs are grouped on the basis of a territory or geography that is served Territory might reflect the location of employees, customers, plants, and so on Diff: Page Ref: 126-127 AACSB: Analytic Skills Objective: 5.1 44 Copyright © 2011 Pearson Education, Inc 150) In a short essay, list and discuss the two additional common forms of departmentalization Answer: Process departmentalization This method groups jobs on the basis of product or customer flow In this approach, work activities follow a natural processing flow of product or even customers An example of process departmentalization is a motor vehicles office that is organized around a process that customers use to obtain permits, licenses, and other services Customer departmentalization Jobs are grouped on the basis of common customers who have common needs or problems that can best be met by having specialists for each An example of customer departmentalization includes separate retail, wholesale, and government customers at a large firm Diff: Page Ref: 126-127 AACSB: Analytic Skills Objective: 5.1 151) In a short essay, list and discuss two contingency variables that should be considered in determining an appropriate structure in organizational design Answer: Strategy and structure An organization's structure should facilitate the achievement of goals Since goals are influenced by the organization's strategies, it's only logical that strategy and structure should be closely linked More specifically, structure should follow strategy If managers significantly change the organization's strategy, they will need to modify structure to accommodate and support the change Size and structure There is considerable evidence that an organization's size significantly affects its structure For instance, large organizations—those with 2,000 or more employees—tend to have more specialization, departmentalization, centralization, and rules and regulations than small organizations However, the relationship isn't linear Rather, size affects structure at a decreasing rate; that is, size becomes less important as an organization grows Diff: Page Ref: 134-136 AACSB: Analytic Skills Objective: 5.3 45 Copyright © 2011 Pearson Education, Inc 152) In a short essay, list and discuss two contingency variables that should be considered in determining an appropriate structure in organizational design Answer: Technology and structure Every organization has at least one form of technology to convert its inputs into outputs The processes or methods that transform an organization's inputs into outputs differ by their degree of routineness In general, the more routine the technology, the more standardized and mechanistic the structure can be Organizations with more nonroutine technology are more likely to have organic structures Environment and structure The greater the uncertainty in the environment, the greater the need for the flexibility offered by an organic design On the other hand, in stable, simple environments, mechanistic designs tend to be most effective Diff: Page Ref: 134-136 AACSB: Analytic Skills Objective: 5.3 153) In a short essay, describe the characteristics of a simple structure Answer: The simple structure is most often associated with small entrepreneurial ventures and is common among organizations where the owner and manager are one and the same Simple structures possess low departmentalization, wide spans of control, authority centralized in a single person, and little formalization As firms grow, structure tends to become more specialized and formalized, departments and new levels of management are created, and the firm takes on a more bureaucratic nature The great weakness in a simple structure is that it relies too much on a single individual If that person is unavailable for some reason, the organization grinds to a halt Diff: Page Ref: 137 AACSB: Analytic Skills Objective: 5.3 154) In a short essay, describe the characteristics of a functional structure Answer: A functional structure is an organizational design that groups similar or related occupational specialties together It is a functional approach to departmentalization applied to the entire organization For example, an organization could be structured by the separate functions of operations, finance, human resources, marketing, and R&D Strengths of a functional structure include advantages from specialization—economies of scale and little redundancy Weaknesses of a functional structure involve employees putting the functional goals ahead of the goals of the entire organization Diff: Page Ref: 138 AACSB: Analytic Skills Objective: 5.3 46 Copyright © 2011 Pearson Education, Inc 155) In a short essay, describe the characteristics of a divisional structure Answer: The divisional structure is an organizational structure made up of separate business units or divisions In this design, each unit maintains limited autonomy with a division manager responsible for performance and determining who has strategic and operational authority within the divisional unit However, the parent corporation still typically acts as an external overseer to coordinate and control the various divisions Strengths of the divisional structure include a focus on results as divisions are highly motivated to achieve their goals Weaknesses of this approach include the redundancy that might arise from having autonomous divisions all operating at the same time Diff: Page Ref: 138 AACSB: Analytic Skills Objective: 5.3 156) In a short essay, describe the matrix structure What are its advantages and disadvantages? Answer: The matrix structure is an organizational structure that assigns specialists from different functional departments to work on one or more projects being led by project managers Each product is managed by an individual who staffs his or her product team with people from each of the functional departments The addition of this vertical dimension to the traditional horizontal functional departments, in effect, "weaves together" elements of functional and product departmentalization, creating a matrix arrangement One unique aspect of this design is that it creates a dual chain of command, which violates the classical organizing principle of unity of command Employees in a matrix organization have two managers who share authority: their functional area manager and their product or project manager The project managers have authority over the functional members who are part of their project team in areas related to the project's goals However, decisions such as promotions, salary recommendations, and annual reviews typically remain the functional manager's responsibility To work effectively, project and functional managers have to communicate regularly, coordinate work demands on employees, and resolve conflicts together Diff: Page Ref: 139-140 AACSB: Analytic Skills Objective: 5.3 157) In a short essay, describe the boundaryless organization Answer: Another approach to contemporary organizational design is the concept of a boundaryless organization, an organization whose design is not defined by, or limited to, the horizontal, vertical, or external boundaries imposed by a predefined structure To minimize or eliminate these boundaries, managers might use virtual or network structural designs Advances in technology have facilitated the movement toward more boundaryless organizations Diff: Page Ref: 141 AACSB: Analytic Skills Objective: 5.3 47 Copyright © 2011 Pearson Education, Inc 158) In a short essay, describe a learning organization What structural aspects does a learning organization need? Answer: A learning organization is an organization that has developed the capacity to continuously learn, adapt, and change In a learning organization, employees continually acquire and share new knowledge and are willing to apply that knowledge in making decisions or performing their work What structural aspects does a learning organization need? First, it is critical for members in a learning organization to share information and collaborate on work activities throughout the entire organization—across different functional specialties and even at different organizational levels To this requires minimal structural and physical barriers In such a boundaryless environment, employees can work together and collaborate in doing the organization's work the best way they can and learn from each other Finally, because of this need to collaborate, teams also tend to be an important feature of a learning organization's structural design Employees work in teams that are empowered to make decisions about doing whatever work needs to be done or resolving issues With empowered employees and teams, there is little need for "bosses" to direct and control Instead, managers serve as facilitators, supporters, and advocates Diff: Page Ref: 142-143 AACSB: Analytic Skills Objective: 5.3 159) In a short essay, define organizational culture Answer: Organizational culture is the shared values, principles, traditions, and ways of doing things that influence the way organizational members act In most organizations, these important shared values and practices have evolved over time and determine, to large degree, what employees perceive about their organizational experiences and how they behave in the organization When doing their work, the organizational culture—the "way we things around here"—influences what employees can and how they view, define, analyze, and resolve problems and issues Diff: Page Ref: 145 Objective: 5.4 48 Copyright © 2011 Pearson Education, Inc ... an organization B) change the culture of an organization C) change or develop the structure of an organization D) change the logo of an organization Answer: C Explanation: C) By definition, organizational... elements of organizational structure are given in all three incorrect choices Chain of command and line authority are not included as basic elements of organizational structure, so "chain of command,... 5.1 56) The line of authority that extends from the upper levels of management to the lowest levels of the organization is termed the A) chain of responsibility B) unity of command C) staff