Flashcards and Answers – MGMT Chapter 8
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Which of the following depicts the positions in the firm and how they are arranged? A. Benchmarking B. Departmentalization C. Situational analysis D. Organization chart E. Value chain
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D. Organization chart The organization chart depicts the positions in the firm and the way they are arranged. The chart provides a picture of the reporting structure (who reports to whom) and the various activities that are carried out by different individuals.
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Which of the following is true of an organization chart? A. It shows the reporting structure in the organization. B. It shows the number of people that should be supervised. C. It shows how decisions are made. D. It shows which products appeal to particular groups of customers. E. It shows how the organization will interact with the external environment.
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A. It shows the reporting structure in the organization. The organization chart depicts the positions in the firm and the way they are arranged. The chart provides a picture of the reporting structure (who reports to whom) and the various activities that are carried out by different individuals.
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_____ is an aspect of an organization's internal environment created by job specialization and division of labor. A. Integration B. Coordination C. Differentiation D. Concentration E. Diversification
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C. Differentiation Differentiation is created through division of labor and job specialization. Division of labor means the work of the organization is subdivided into smaller tasks. Various individuals and units throughout the organization perform different tasks. Specialization refers to the fact that different people or groups often perform specific parts of the larger task.
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The degree to which differentiated work units work together and coordinate their efforts is known as: A. differentiation. B. concentration. C. span of control. D. unity of command. E. integration.
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E. Integration As organizations differentiate their structures, managers must simultaneously consider issues of integration. Integration refers to the degree to which differentiated work units work together and coordinate their efforts.
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The assignment of different tasks to different people or groups in an organization is known as: A. unity of command. B. integration. C. division of labor. D. concentration. E. centralization.
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C. division of labor Division of labor means the work of the organization is subdivided into smaller tasks. Various individuals and units throughout the organization perform different tasks.
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The process by which different individuals and units perform specific parts of the larger task is called ____. A. concentration B. integration C. specification D. specialization E. centralization
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D. Specialization Differentiation is created through division of labor and job specialization. Specialization refers to the fact that different people or groups often perform specific parts of the larger task.
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_____ is most closely related to the division of labor within an organization. A. Integration B. Specialization C. Centralization D. Coordination E. Formalization
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B. specialization Differentiation in an organization is created through division of labor and job specialization. The two concepts are, of course, closely related.
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Coordination refers to the: A. division of labor within an organization. B. performance of specific tasks by specific people. C. procedures that link the various parts of the organization. D. need for specific tasks in the functional fields. E. authority levels in the organizational pyramid.
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C. procedures that link the various parts of the organization. Coordination refers to the procedures that link the various parts of an organization for the purpose of achieving the organization's overall mission.
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The procedures that link the various parts of the organization for the purpose of achieving the organization's overall mission is known as: A. job specialization. B. diversification. C. coordination. D. concentration. E. delegation.
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C. coordination Coordination refers to the procedures that link the various parts of an organization for the purpose of achieving the organization's overall mission. It is a concept related to integration.
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Lawrence and Lorsch found that: A. highly differentiated firms were successful if they had low levels of integration. B. lowly differentiated firms were successful if they had low levels of integration. C. highly differentiated firms were successful if they had high levels of integration. D. lowly differentiated firms were successful if they had vertical integration. E. highly differentiated firms were successful if they had vertical integration.
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C. highly differentiated firms were successful if they had high levels of integration. Lawrence and Lorsch found that highly differentiated firms were successful if they also had high levels of integration. Organizations are more likely to fail if they exist in complex environments and are highly differentiated but fail to integrate their activities adequately.
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The _____ of a firm's structure is the starting point in understanding the organizational issues such as reporting relationships, authority, and responsibility. A. vertical dimension B. vertical integration C. concentration D. span of control E. diversification
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A. vertical integration To understand issues such as reporting relationships, authority, responsibility, and the like, we need to begin with the vertical dimension of a firm's structure
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The legitimate right to make decisions and to tell other people what to do is referred to as ____. A. hierarchy B. delegation C. specialization D. legitimacy E. authority
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E. authority The functioning of every organization depends on the use of authority: the legitimate right to make decisions and to tell other people what to do.
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Which of the following statements is true of the board of directors? A. The board is responsible for selecting the CEO. B. A board's membership usually includes some frontline executives. C. The employees elect a board of directors to oversee the organization. D. Today, most companies have a majority of inside directors. E. A board of directors comprises all owners of an organization.
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A. The board is responsible for selecting the CEO. In corporations, the owners are the stockholders and few are directly involved in managing the organization. Stockholders elect a board of directors to oversee the organization. Boards select, assess, reward, and perhaps replace the CEO. The board's membership usually includes some top executives—called inside directors. Today most companies have a majority of outside directors.
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Corporations have boards of directors elected by: A. employees. B. the franchisees. C. stockholders. D. top managers. E. dormant partners.
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C. stockholders Stockholders elect a board of directors to oversee the organization on their behalf. The board, led by the chair, makes major decisions affecting the organization, subject to corporate charter and bylaw provisions.
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Several top executives of Waterton Corporation are part of the corporation's board and are called: A. part-time directors. B. dual directors. C. cooperating directors. D. authoritative directors. E. inside directors.
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E. inside directors The board's membership usually includes some top executives who are called inside directors. Outside members of the board tend to be executives at other companies.
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Corporate boards hire _____ directors to provide different information and perspectives and to prevent big mistakes. A. outside B. dual C. cooperating D. authoritative E. affiliative
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A. outside Today most companies have a majority of outside directors. Boards made up of strong, independent outsiders are more likely to provide different information and perspectives and to prevent big mistakes.
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The organizational pyramid composed of authority levels is commonly called the: A. tactical plan. B. hierarchy. C. strategic map. D. dynamic network. E. strategic plan.
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B. hierarchy The three broad levels of the organizational pyramid are commonly called the hierarchy. The CEO occupies the top position and is the senior member of top management.
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Of the three broad levels of the organizational pyramid, the top managerial level excludes the: A. presidents. B. CEO. C. vice presidents. D. first-line managers. E. strategic managers.
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D. first-line managers The three broad levels of the organizational pyramid are commonly called the hierarchy. The CEO occupies the top position and is the senior member of top management. The top managerial level also includes presidents and vice presidents. They are the strategic managers in charge of the entire organization.
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The oversight of the firm by its executive staff and board of directors is called corporate ____. A. control B. maintenance C. power D. governance E. strategy
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D. governance The key responsibilities at the top level include corporate governance. It is a term describing the oversight of the firm by its executive staff and board of directors.
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Who among the following individuals belongs to the top managerial level? A. Chief financial officer B. Frontline manager C. Operational supervisor D. Division supervisor E. First-line manager
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A. chief financial officer Top management teams typically consist of the CEO, president, chief operating officer, chief financial officer, and other key executives. The CEO occupies the top position and is the senior member of top management.
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The three levels of the organizational hierarchy include: A. top, first-line, and final levels. B. top, middle, and operational levels. C. functional, divisional, and matrix levels. D. top, strategic, and lower levels. E. top, operational, and frontline levels.
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B. top, middle, and operational levels The three broad levels of the organizational pyramid is commonly called the hierarchy. They are top management, middle management, and the operational level.
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The operational level of the organization includes: A. the CEO, president, and vice presidents. B. the plant and departmental managers. C. strategic managers and tactical managers. D. frontline managers, supervisors, and employees. E. stockholders and the board of directors.
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D. frontline managers, supervisors, and employees The lowest level is made up of lower management and workers. It includes office managers, sales managers, supervisors, and other frontline managers, as well as the employees who report directly to them. This level is also called the operational level of the organization.
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Who among the following belongs to the middle managerial level? A. Strategic manager B. Chief financial officer C. Departmental head D. Sales manager E. Office supervisor
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C. departmental head The second broad level of the organization is middle management. At this level, managers are in charge of plants or departments.
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The number of subordinates who report directly to an executive or supervisor is called the: A. reporting order. B. span of control. C. delegation control. D. bureaucratic span. E. authoritative span.
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B. span of control The number of people under a manager is an important feature of an organization's structure. The number of subordinates who report directly to an executive or supervisor is called the span of control.
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Narrow spans of control build _____ organizations. A. flat B. wide C. tall D. decentralized E. informal
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C. tall The implications of differences in the span of control for the shape of an organization are straightforward. Holding size constant, narrow spans build a tall organization with many reporting levels.
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A _____ span of control creates a flat organization. A. wide B. tall C. bureaucratic D. formal E. narrow
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A. wide The implications of differences in the span of control for the shape of an organization are straightforward. Holding size constant, wide spans build a flat organization with fewer reporting levels.
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The optimal span of control should be wide when: A. the work is ambiguous. B. subordinates are untrained and do not have access to much information. C. the manager has just taken over the position. D. jobs are similar. E. subordinates prefer close supervisory control.
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D. jobs are similar The optimal span of control depends on a number of factors. The span of control should be wide when jobs are similar and performance measures are comparable.
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According to Napoleon Bonaparte, the optimal number of subordinates is ____. A. 3 B. 5 C. 10 D. 25 E. 50
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B. 5 According to Napoleon Bonaparte, the optimal number of subordinates is five. Some managers today still consider five a good number.
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The assignment of authority and responsibility to a subordinate at a lower level is referred to as: A. concentration. B. centralization. C. delegation. D. division of labor. E. unity of command.
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C. delegation Delegation is the assignment of authority and responsibility to a subordinate at a lower level. It often requires that the subordinate report back to his or her boss about how effectively the assignment was carried out.
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_____ exists for an employee when his or her manager has an expectation that the job will be performed and has the right to take corrective action if it is not. A. Corporate governance B. Accountability C. Strategic control D. Coordination E. Span of control
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B. accountability As the manager delegates responsibilities, subordinates are held accountable for achieving results. Accountability means that the subordinate's manager has the right to expect the subordinate to perform the job and the right to take corrective action if the subordinate fails to do so.
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Which of the following statements is true about delegation? A. It can be used only in organizations with flat structures. B. It promotes subordinates to higher positions. C. It helps develop effective subordinates. D. It can be done only at top level of management. E. It often sharply reduces what a manager can achieve.
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C. It helps develop effective subordinates. Delegation helps develop effective subordinates; the approach is likely to empower subordinates and help them develop. Delegation gives the subordinate a more important job.
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George is an operations manager at Gershwin Corp. He has been put on a big project with a tight deadline. George distributes half the work to two other supervisors, taking care of the bigger aspects of the project himself. This is an example of: A. unity of command. B. delegation. C. specialization. D. span of management. E. differentiation.
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B. delegation Delegation is the assignment of authority and responsibility to a subordinate at a lower level. It often requires that the subordinate report back to his or her boss about how effectively the assignment was carried out.
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Clarissa, VP of operations, was looking for a new direction and asked Jack to manage the reorganization of the call center, even though he was less experienced than many of the managers in that department. Jack found that the other managers were not cooperative in giving him access to their current procedures or ideas about new ones, and he felt powerless to compel them. Clarissa most likely made the mistake of: A. delegating inappropriate tasks to a junior manager. B. delegating responsibility without adequate authority to Jack. C. "passing the buck" by blaming Jack's performance. D. taking credit for Jack's accomplishments. E. underestimating Jack's capabilities.
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B. delegating responsibility without adequate authority to Jack. The person who gets the assignment should be given the authority, time, and resources to carry out the task successfully. Jack seems not to have adequate authority.
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An organization in which lower-level managers make important decisions is a(n) _____ organization. A. decentralized B. horizontal C. vertical D. informal E. centralized
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A. decentralized The delegation of responsibility and authority decentralizes decision making. In decentralized organizations, more decisions are made at lower levels.
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In a _____ organization, important decisions usually are made at the top. A. flat B. wide C. narrow D. centralized E. decentralized
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D. centralized The delegation of responsibility and authority decentralizes decision making. In a centralized organization, important decisions usually are made at the top.
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Pendant Insurance has strictly defined job responsibilities and lines of communication. In this formal atmosphere, approval for any changes to standing procedures must be made by upper management. Here, the insurance firm has a: A. wide span of control. B. high degree of centralization. C. decentralized authority. D. matrix design. E. flat structure.
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B. high degree of centralization The delegation of responsibility and authority decentralizes decision making. In a centralized organization, important decisions usually are made at the top.
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Ideally, decision making should be done by the: A. board of directors. B. top management of the organization. C. customers of the organization. D. supervisory-level employees. E. people who are most affected by the issue.
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E. people who are most affected by the issue. Ideally, decision making occurs at the level of the people who are most directly affected by and have the most intimate knowledge about the problem.
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Mason Engineering is run in a very traditional way, with experienced top managers making all the decisions and passing them down to lower levels for implementation. Mason can be described as a(n) _____ organization. A. integrated B. centralized C. differentiated D. decentralized E. horizontal
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B. centralized In a centralized organization, important decisions usually are made at the top. This is the situation at Mason. In decentralized organizations, more decisions are made at lower levels.
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Which of the following is true of line departments? A. They provide specialized skills to support staff departments. B. They deal directly with the organization's primary goods and services. C. They include research, legal, accounting, and human resources departments. D. They focus on safe-guarding the company from risks. E. They focus more on requirements and procedures rather than products and customers.
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B. They deal directly with the organization's primary goods and services. Line departments are those that have responsibility for the principal activities of the firm. Line units deal directly with the organization's primary goods or services.
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The _____ department is an example of a line department. A. public relations B. human resource C. manufacturing D. accounting E. legal
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C. manufacturing Line departments are those that have responsibility for the principal activities of a firm. Line units deal directly with an organization's primary goods or services; they make things, sell things, or provide customer service.
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Subdividing an organization into smaller subunits is known as ____. A. departmentalization B. delegation C. centralization D. standardization E. diversification
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A. departmentalization Departmentalization is subdividing an organization into smaller subunits. The three basic approaches to departmentalization are functional, divisional, and matrix.
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In a _____ organization, jobs are specialized and grouped such as marketing, finance, operations, accounting, and human resources. A. product B. geographical C. conglomerate D. functional E. customer
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D. functional In a functional organization, jobs (and departments) are specialized and grouped according to business functions and the skills they require: production, marketing, human resources, research and development, finance, accounting, and so forth.
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Which of the following is an advantage of functional departmentalization? A. It most useful in a complex environment. B. Employees are able to focus exclusively on customer satisfaction. C. It encourages managers to become generalists. D. Decision making and lines of communication are simple and clearly understood. E. It is the most flexible organization form.
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D. Decision making and lines of communication are simple and clearly understood. The traditional functional approach to departmentalization has a number of potential advantages for an organization. One such advantage is that decision making and lines of communication are simple and clearly understood.
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An organization with departmentalization that groups units around products, customers, or geographic regions is called a: A. divisional organization. B. centralized organization. C. conglomerate organization. D. functional organization. E. virtual organization.
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A. divisional organization. A divisional organization uses departmentalization that groups units around products, customers, or geographic regions. In this structure, separate divisions may act almost as separate businesses or profit centers and work autonomously to accomplish the goals of the entire enterprise.
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Which of the following is a characteristic of product organizations? A. Duplication of effort is cheap. B. Decision making is decentralized. C. Functions are centralized at headquarters. D. Multiple managers are involved in the product lines. E. Task responsibilities are unclear.
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B. Decision making is decentralized. Coordination across product lines and divisions is difficult. Because decision making is decentralized, top management can lose control over decisions made in the divisions. Proper management of decentralization and delegation is essential for this structure to be effective.
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The Hot Peppers Kitchen Inc. was voted producer of the best hot sauce in Calia. It soon expanded and now manufactures and distributes sauces, kitchen equipment, and specialty spices worldwide, with a separate department for each. Which of the following forms of departmentalization does Hot Peppers Kitchen Inc. have? A. Conglomerate B. Horizontal C. Geographic D. Customer E. Product
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E. Product Organizations can create a divisional structure in several ways, including product divisions. In the product organization, all functions that contribute to a given product are organized under one manager. Hot Peppers Kitchen Inc. uses product departmentalization.
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Sports International began its business by making athletic shoes. Its departments are structured based on products sold to professional athletes, products sold to novice athletes, and products sold to non-athletes. In this case, the company uses _____ departmentalization. A. geographic B. functional C. matrix D. customer E. vertical
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D. customer Some companies build divisions around groups of customers or around different geographic areas. Sports international has structured their departments to serve different groups of customers.
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An organization composed of dual relationships in which some employees report to two superiors is a _____ organization. A. product B. flat C. matrix D. process E. customer
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C. matrix A matrix organization is one composed of dual reporting relationships in which some employees report to two superiors: a functional manager and a divisional manager.
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Which of the following statements is true of matrix organizations? A. It involves dual reporting relationships. B. It follows the unity-of-command principle. C. It involves grouping all functions into a single division. D. It has the disadvantage of low flexibility. E. It employs a single line of command.
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A. It involves dual reporting relationships. A matrix organization is a hybrid form of organization in which functional and divisional forms overlap. Managers and staff personnel report to two bosses—a functional manager and a divisional manager. Thus matrix organizations have a dual rather than a single line of command.
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In a matrix organization, each employee reports to a functional and a(n) _____ manager. A. operational B. first-line C. divisional D. centralized E. virtual
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C. divisional A matrix organization is one composed of dual reporting relationships in which some employees report to two superiors: a functional manager and a divisional manager.
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KrackerJack Corp., a breakfast cereal manufacturer, has a production, finance, and accounts team. The company has two categories that are departmentalized into a cereal division and instant pancakes division. Each of its employees has to report to two bosses—a functional manager and a divisional manager. In this case, KrackerJack Corp. is an example of a _____ organization. A. geographic B. conglomerate C. customer D. virtual E. matrix
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E. Matrix A matrix organization is a hybrid form of organization in which functional and divisional forms overlap. Managers and staff personnel report to two bosses—a functional manager and a divisional manager.
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Which of the following is a disadvantage of the matrix design? A. Decision making is decentralized. B. Resource utilization is inefficient. C. There is low flexibility. D. Additional time is required for meetings and coordination. E. A single head has to overlook multiple divisions.
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D. Additional time is required for meetings and coordination.
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A very flexible version of the network organization is the: A. virtual corporation. B. conglomerate organization. C. relational corporation. D. nonstandard divisional form. E. localized division.
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A. virtual corporation A very flexible version of the network organization is the dynamic network, also called the modular or virtual corporation. It is composed of temporary arrangements among members that can be assembled and reassembled to meet a changing competitive environment.
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Establishing common routines and operating procedures that apply uniformly to everyone is called ____. A. formalization B. accountability C. concentration D. delegation E. standardization
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E. standardization Standardization is establishing common routines and procedures that apply uniformly to everyone. It constrains actions and integrates various units by regulating what people do.
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The presence of rules and regulations governing how people in the organization interact is called: A. formalization. B. unity of command. C. span of control. D. concentration. E. standardization.
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A. formalization To improve coordination, organizations may rely on formalization—the presence of rules and regulations governing how people in the organization interact.
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_____ occurs when interdependent units are required to meet deadlines and objectives that contribute to a common goal. A. Coordination by plan B. Coordination by standardization C. Formalization D. Cooperation by mutual adjustment E. Collaboration
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A. coordination by plan Coordination by plan occurs when interdependent units are required to meet deadlines and objectives that contribute to a common goal. It does not require the same high degree of stability and routinization required for coordination by standardization.
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An approach that involves feedback and discussions to figure out jointly how to approach problems and devise solutions that are agreeable to everyone is known as: A. coordination by mutual adjustment. B. management by objectives. C. coordination by plan. D. collaborative standardization. E. hierarchical decision making.
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A. coordination by mutual adjustment. Coordination by mutual adjustment involves feedback and discussions to figure out jointly how to approach problems and devise solutions that are agreeable to everyone. The popularity of teams today is in part due to the fact that they allow flexible coordination; teams can operate under the principle of mutual adjustment.
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Creating slack resources means that: A. a manager limits the availability of resources to some units. B. nonperforming employees are assigned to easier tasks. C. more resources are made available to each unit in case they need them in a pinch. D. each unit is differentiated by functional specialty. E. time, money, and other resources are tightly budgeted.
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C. more resources are made available to each unit in case they need them in a pinch. Managers can reduce the need for information by creating slack resources. Slack resources are simply extra resources on which organizations can rely in a pinch so that if they get caught off guard, they can still adjust.
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A specific technique used to reduce the need for information is to: A. create self-contained tasks. B. reduce the amount of inventory on hand. C. invest in information systems. D. create horizontal relationships. E. create strategic alliances.
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A. create self-contained tasks. Creating self-contained tasks allows organizations to reduce the need for some information. Creating self-contained tasks refers to changing from a functional organization to a product or project organization and giving each unit the resources it needs to perform its task.
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Danilo's job with a local utility is to maintain the relationship between it and the community. This involves communicating with local organizations to find those in need of help with their electric bills in order to ensure that no one is without heat during the winter. In this scenario, Danilo performs the role of a ____. A. mutual adjustment officer B. social worker C. liaison D. program manager E. direct contact
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C. liaison Danilo is performing a liaison role: a specialized job to handle communications between two departments or organizations (such as the community organizations in this case).
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Investing in information systems and creating horizontal relationships most likely results in: A. a reduced need for information. B. an increased availability of resources. C. a reduced need to share information across units. D. an organization's ability to process more information. E. the creation of slack resources.
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D. an organization's ability to process more information. An organization may take the approach of increasing its information-processing capability. It can invest in information systems, which usually means employing or expanding computer systems. It can also use knowledge management by creating horizontal relationships between units to foster coordination.
