Chapter 5: Organizational Structure and Culture

1. Organizational design is the process in which managers change or develop an organization's structure.
Answer: True False
Diff: 2 Page Ref: 150
Objective: 5.1

2. There are four basic elements in organizational structure.

Answer: True False
Diff: 1 Page Ref: 150
Objective: 5.1

3. The original ideas about organizational design formulated by Fayol and Weber are now largely obsolete.
Answer: True False
Diff: 2 Page Ref: 150
Objective: 5.1

4. When work specialization originally began to be implemented early in the twentieth century, employee
productivity initially rose.
Answer: True False
Diff: 2 Page Ref: 151
Objective: 5.1

5. Today, most managers see work specialization as a source of ever-increasing productivity.

Answer: True False
Diff: 2 Page Ref: 151
Objective: 5.1

6. The advantage of work specialization is that it tends to result in high employee motivation and high
productivity.
Answer: True False
Diff: 2 Page Ref: 151
Objective: 5.1

7. Departmentalization is a how jobs are grouped.

Answer: True False
Diff: 1 Page Ref: 152
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: True False
Diff: 2 Page Ref: 152
Objective: 5.1
 9. Grouping jobs on the basis of major product areas is termed customer departmentalization.
Answer: True False
Diff: 2 Page Ref: 152
Objective: 5.1

10. Line authority can be exerted only after a manager checks with his or her superior.
Answer: True False
Diff: 2 Page Ref: 154
Objective: 5.1

11. Unity of command prevents an employee from trying to follow two conflicting commands at once.
Answer: True False
Diff: 2 Page Ref: 155
Objective: 5.1

12. Power is a right that a manager has when he or she has a higher rank in an organization.
Answer: True False
Diff: 2 Page Ref: 156
Objective: 5.1

13. When decisions tend to be made at lower levels in an organization, the organization is said to be centralized.
Answer: True False
Diff: 2 Page Ref: 158
Objective: 5.1

14. Traditional organizations are structured in a pyramid, with the power and authority located in the pyramid's
broad base.
Answer: True False
Diff: 2 Page Ref: 159
Objective: 5.1

15. The two prevalent organization structure models in today's world are the organic organization and the
inorganic organization.
Answer: True False
Diff: 1 Page Ref: 160
Objective: 5.2

16. A mechanistic organization is bureaucratic and hierarchical.

Answer: True False
Diff: 2 Page Ref: 160
Objective: 5.2

17. An organic organization tends to be flexible and have few formal rules.
Answer: True False
Diff: 2 Page Ref: 160
Objective: 5.2
18. Innovators need the efficiency, stability, and tight controls of a mechanistic structure rather than an organic
structure.
Answer: True False
Diff: 2 Page Ref: 161
Objective: 5.2

19. The relationship between organizational size and structure tends to be linear.
Answer: True False
Diff: 3 Page Ref: 161-162
Objective: 5.2

20. Joan Woodward attempted to view organizational structure from a technological perspective.
Answer: True False
Diff: 2 Page Ref: 162
Objective: 5.2

21. Woodward concluded that mass production worked best with an organic organization structure.
Answer: True False
Diff: 2 Page Ref: 162
Objective: 5.2

22. The stability of a mechanistic structure seems to work best in today's dynamic and uncertain business
environment.
Answer: True False
Diff: 2 Page Ref: 162
Objective: 5.2

23. The strength of a simple system is that everything depends on a single person.
Answer: True False
Diff: 2 Page Ref: 163
Objective: 5.3

24. A strength of a functional structure is that it avoids duplication.

Answer: True False
Diff: 2 Page Ref: 164
Objective: 5.3

25. A weakness of the divisional structure is that duplication tends to occur.

Answer: True False
Diff: 2 Page Ref: 164
Objective: 5.3

26. In a team structure, team members are not held responsible for their decisions.
Answer: True False
 Diff: 2 Page Ref: 165
Objective: 5.3

27. In a team structure there is a clear line of managerial authority from top to bottom.
Answer: True False
Diff: 2 Page Ref: 165
Objective: 5.3

28. When an employee in a matrix structure finishes a project, she goes back to her functional department.
Answer: True False
Diff: 2 Page Ref: 165
Objective: 5.3

29. Employees in an organization with a matrix design can have two bosses for the same job.
Answer: True False
Diff: 2 Page Ref: 166
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: True False
Diff: 2 Page Ref: 166
Objective: 5.3

31. When an employee in a project structure finishes a project, he goes back to his original department.
Answer: True False
Diff: 2 Page Ref: 166
Objective: 5.3

32. Vertical boundaries separate employees by their rank in an organization.

Answer: True False
Diff: 2 Page Ref: 167
Objective: 5.3

33. Horizontal boundaries separate employees by the amount of power they have in an organization.
Answer: True False
Diff: 2 Page Ref: 167
Objective: 5.3

34. A virtual organization relies on freelancers who have no permanent status or position in the organization.
Answer: True False
Diff: 2 Page Ref: 167
Objective: 5.3

35. Managers want to eliminate boundaries in organizations primarily to increase stability and reduce flexibility.
 Answer: True False
Diff: 2 Page Ref: 167
Objective: 5.3

36. Horizontal boundaries separate employees by the specialization of their job.

Answer: True False
Diff: 2 Page Ref: 167
Objective: 5.3

37. A virtual organization may disintegrate after it finishes its task.

Answer: True False
Diff: 2 Page Ref: 167
Objective: 5.3

38. All learning organizations share a distinct structure.

Answer: True False
Diff: 2 Page Ref: 169
Objective: 5.3

39. A company's organizational culture refers to a system of shared political beliefs.

Answer: True False
Diff: 2 Page Ref: 171
Objective: 5.4

40. Employees learn organizational culture by reading official organization documents and histories.
Answer: True False
Diff: 2 Page Ref: 172
Objective: 5.4

41. An organization's founder has little influence on its culture.

Answer: True False
Diff: 2 Page Ref: 172
Objective: 5.4

42. Strong organizational culture can eliminate the need for rules and bylaws.
Answer: True False
Diff: 3 Page Ref: 173
Objective: 5.4

43. Organizational design requires a manager to ________.

A) change or develop the structure of an organization
B) change the culture of an organization
C) organize groups within an organization
D) change the logo of an organization
Answer: A
Diff: 1 Page Ref: 150
 Objective: 5.1

44. All of the following are part of the process of organizational design EXCEPT ________.
A) determine goals for the organization
B) determine rules for employee behavior
C) decide how specialized jobs should be
D) determine the level at which decisions are made
Answer: A
Diff: 2 Page Ref: 150
Objective: 5.1

45. Which of the following are NOT basic elements of organizational structure?
A) work specialization, span of control
B) departmentalization, formalization
C) centralization, decentralization
D) chain of command, line authority
Answer: D
Diff: 2 Page Ref: 150
Objective: 5.1

46. Which of the following is synonymous with work specialization?

A) job preference
B) division of labor
C) job discrimination
D) chain of command
Answer: B
Diff: 2 Page Ref: 150
Objective: 5.1

47. Which statement accurately defines work specialization?

A) Work specialization clarifies who reports to whom.
B) Individual employees specialize in doing part of an activity rather than the entire activity.
C) It is the degree to which tasks are grouped together.
D) Jobs are ranked relative only to their worth or value to the businesses.
Answer: B
Diff: 3 Page Ref: 150
Objective: 5.1

48. Early supporters of work specialization saw it as ________.

A) an immoral way to coerce workers into greater productivity
B) a good way to increase employee morale
C) a source of innovation
D) a reliable way to increase productivity
Answer: D
Diff: 2 Page Ref: 151
Objective: 5.1
49. Early users of work specialization early in the twentieth century found that the practice ultimately resulted
in ________.
A) huge and permanent productivity gains
B) better communication among employees
C) bored workers with low morale
D) higher profits and better employee morale
Answer: C
Diff: 3 Page Ref: 151
Objective: 5.1

50. Today, managers favor this approach instead of work specialization.

A) Employees perform a broad range of tasks.
B) Partners switch jobs every half hour.
C) Monotonous tasks are shared by all employees.
D) All tasks are performed by all employees.
Answer: A
Diff: 2 Page Ref: 151
Objective: 5.1

51. Functional departmentalization groups jobs by ________.

A) products or services they manufacture or produce
B) type of customer they serve
C) tasks they perform
D) territories they serve
Answer: C
Diff: 2 Page Ref: 152
Objective: 5.1

52. ________ departmentalization is based on territory or the physical location of employees or customers.
A) Matrix
B) Geographic
C) Functional
D) Product
Answer: B
Diff: 1 Page Ref: 152
Objective: 5.1

53. A soap company that features a bath soap department, a laundry detergent department, and a dish soap
department is using which of the following?
A) customer departmentalization
B) process departmentalization
C) functional departmentalization
D) product departmentalization
Answer: D
Diff: 2 Page Ref: 152
Objective: 5.1

54. What kind of departmentalization would be in place in a government agency in which there are separate
departm ents that provide services for employers, employed workers, unemployed workers, and the disabled?
A) geographic
B) customer
C) outcome
D) product
Answer: B
Diff: 2 Page Ref: 152
Objective: 5.1

55. State motor vehicle offices usually use this kind of departmentalization.
A) process
B) functional
C) product
D) customer
Answer: A
Diff: 2 Page Ref: 152
Objective: 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 command
B) chain of responsibility
C) unity of command
D) staff authority
Answer: A
Diff: 1 Page Ref: 153
Objective: 5.1

57. The chain of command answers this question.

A) How do I know when the task is complete?
B) Who reports to whom?
C) What are the rules?
D) Where do I go for help?
Answer: B
Diff: 2 Page Ref: 154
Objective: 5.1

58. Authority gives an individual the right to do this.

A) command respect
B) obey orders
C) give orders
D) reprimand employees
Answer: C
Diff: 1 Page Ref: 154
Objective: 5.1

59. In the chain of command, each person above you ________.

A) has special privileges
 B) has no right to give you orders
C) receives higher pay
D) has line authority
Answer: D
Diff: 2 Page Ref: 154
Objective: 5.1

60. Staff managers have authority over ________.

A) middle managers
B) the person above them in the chain of command
C) special support employees only
D) line managers
Answer: C
Diff: 2 Page Ref: 154
Objective: 5.1

61. Line authority gives a manager the ability to direct the work of ________.
A) any employee in the firm
B) only subordinates one level down
C) any subordinate, after consulting with the next higher level
D) any subordinate
Answer: D
Diff: 2 Page Ref: 154
Objective: 5.1

62. ________ prevents a single employee from getting conflicting orders from two different superiors.
A) Unity of command
B) Staff authority
C) Line authority
D) Chain of command
Answer: A
Diff: 2 Page Ref: 154
Objective: 5.1

63. The importance of unity of command has diminished in today's workplace because of its tendency to be
________.
A) ethically questionable
B) inflexible
C) chauvinistic and dictatorial
D) too decisive
Answer: B
Diff: 2 Page Ref: 155
Objective: 5.1

64. Which of the following statements is true?

A) Both power and authority are rights.
B) Authority is a right.
C) Power is a right.
 D) Authority is one's ability to influence decisions.
Answer: B
Diff: 2 Page Ref: 156
Objective: 5.1

65. ________ is the obligation or expectation to perform a duty.

A) Span of control
B) Chain of command
C) Unity of command
D) Responsibility
Answer: D
Diff: 1 Page Ref: 156
Objective: 5.1

66. The personal secretary of a top manager may have ________.

A) power and authority
B) power but not authority
C) line authority but not staff authority
D) authority but not power
Answer: B
Diff: 3 Page Ref: 157
Objective: 5.1

67. Which of the following statements is true?

A) Authority and power are identical.
B) Power is a type of authority.
C) Authority is a type of power.
D) Power is determined by horizontal position in an organization.
Answer: C
Diff: 3 Page Ref: 156
Objective: 5.1

68. As represented in a power cone, power is based on ________.

A) vertical position and distance from the center
B) vertical position only
C) horizontal position only
D) distance from the center only
Answer: A
Diff: 3 Page Ref: 156-157
Objective: 5.1

69. As represented in a hierarchical organization diagram, authority is based on ________.

A) horizontal position only
B) horizontal and vertical position
C) distance from the center only
D) vertical position only
Answer: D
Diff: 3 Page Ref: 156-157
Objective: 5.1
70. A construction site supervisor who sees an impending thunderstorm and tells workers to go home is
demonstrating ________.
A) responsibility
B) staff delegation
C) provisional accountability
D) line authority
Answer: D
Diff: 2 Page Ref: 157
Objective: 5.1

71. ________ is the power that rests on the leader's ability to punish or control.
A) Expert power
B) Reward power
C) Referent power
D) Coercive power
Answer: D
Diff: 2 Page Ref: 157
Objective: 5.1

72. A bank manager who passes out bonuses at the end of the year is exercising this.
A) expert power
B) reward power
C) coercive power
D) referent power
Answer: B
Diff: 2 Page Ref: 157
Objective: 5.1

73. Your firm's attorney has ________ power when giving legal advice.
A) expert
B) legitimate
C) coercive
D) status
Answer: A
Diff: 2 Page Ref: 157
Objective: 5.1

74. ________ is the power that arises when a person is close to another person who has great power and
authority.
A) Referent power
B) Reward power
C) Expert power
D) Legitimate power
Answer: A
Diff: 2 Page Ref: 157
Objective: 5.1
75. When a top manager decides to hire an individual over the objections of her staff she is exercising which
kind of power?
A) coercive
B) referent
C) legitimate
D) expert
Answer: C
Diff: 3 Page Ref: 157
Objective: 5.1

76. The traditional view holds that managers should not directly supervise more than ________ subordinates.
A) seven or eight
B) nine or ten
C) three or four
D) five or six
Answer: D
Diff: 1 Page Ref: 158
Objective: 5.1

77. Modern managers find that they can ________ if their employees are experienced, well-trained, and
motivated.
A) eliminate their span of control
B) decrease their span of control
C) increase their span of control
D) fluctuate their span of control
Answer: B
Diff: 2 Page Ref: 159
Objective: 5.1

78. A traditional "top down" organization is ________ organization.

A) a largely decentralized
B) an absolutely decentralized
C) an absolutely centralized
D) a largely centralized
Answer: D
Diff: 2 Page Ref: 159
Objective: 5.1

79. ________ reflects the degree to which decision making is distributed through out the hierarchy rather than
concentrated at the top.
A) Centralization
B) Decentralization
C) Span of Control
D) Concentration
Answer: B
Diff: 2 Page Ref: 159
Objective: 5.1
80. In recent years, organizations have become more ________ to be responsive to a dynamic business
environment.
A) decentralized
B) mechanistic
C) structured
D) centralized
Answer: A
Diff: 2 Page Ref: 159
Objective: 5.1

81. In today's decentralized business world, ________ the most important strategic decisions.
A) nonmanagerial employees
B) top managers still primarily make
C) lower-level managers
D) middle managers make
Answer: B
Diff: 2 Page Ref: 159
Objective: 5.1

82. All of the following are characteristics of a highly formalized organization EXCEPT ________.
A) minimum number of rules
B) a standardized way of doing things
C) little discretion for employees
D) explicit job descriptions
Answer: A
Diff: 2 Page Ref: 160
Objective: 5.1

83. Today's managers are moving away from formalization and trying to be this.
A) more rigorous
B) more strict
C) less permissive
D) more flexible
Answer: D
Diff: 2 Page Ref: 160
Objective: 5.1

84. Today's managers expect employees to ________.

A) ignore rules for the most part
B) use discretion when it comes to following rules
C) make their own rules
D) faithfully follow rules even when it may harm the organization
Answer: B
Diff: 2 Page Ref: 160
Objective: 5.1

85. A(n) ________ organization has a high degree of specialization, formalization, and centralization.
 A) learning
B) organic
C) horizontal
D) mechanistic
Answer: D
Diff: 1 Page Ref: 160
Objective: 5.2

86. Which of the following would likely be found in mechanistic organizations?

A) empowered employees
B) wide span of control
C) standardized jobs
D) decentralized responsibility
Answer: C
Diff: 2 Page Ref: 160
Objective: 5.2

87. A(n) ________ organization is able to change rapidly as needs require.

A) hierarchical
B) organic
C) vertical
D) mechanistic
Answer: B
Diff: 1 Page Ref: 160
Objective: 5.2

88. Which term best describes an organic organization?

A) pyramid-shaped
B) hierarchical
C) fixed
D) flexible
Answer: D
Diff: 2 Page Ref: 160
Objective: 5.2

89. Which word best characterizes a mechanistic organization?

A) informal
B) hierarchical
C) collaborative
D) adaptable
Answer: B
Diff: 2 Page Ref: 160
Objective: 5.2

90. Strategy, size, technology, and the degree of uncertainty in the environment together make up what are
called ________.
A) control factors
B) contingency variables
 C) structure variables
D) probable factors
Answer: B
Diff: 1 Page Ref: 161
Objective: 5.2

91. Together, contingency variables determine the ________.

A) success of an organization
B) size of an organization
C) structure of an organization
D) culture of an organization
Answer: C
Diff: 2 Page Ref: 161
Objective: 5.2

92. A company that is pursuing a cost leadership strategy would be most likely to have this kind of structure.
A) mechanistic
B) matrix-project
C) virtual
D) team
Answer: A
Diff: 2 Page Ref: 161
Objective: 5.2

93. A company that is trying to be a leader in innovation within its industry would be most likely to have this
kind of structure.
A) organic
B) functional
C) simple
D) mechanistic
Answer: A
Diff: 2 Page Ref: 161
Objective: 5.2

94. Larger organizations tend to have ________ than smaller organizations.

A) less centralization
B) more specialization
C) fewer rules and regulations
D) less departmentalization
Answer: B
Diff: 2 Page Ref: 161-162
Objective: 5.2

95. As an organization grows to a size of over 2,000 employees, it finds it hard to avoid becoming more
________.
A) organic
B) informal
C) mechanistic
 D) adaptable
Answer: C
Diff: 2 Page Ref: 162
Objective: 5.2

96. Joan Woodward conducted pioneering studies on how this affected the structure of companies.
A) technology
B) values
C) ethics
D) corporate culture
Answer: A
Diff: 1 Page Ref: 162
Objective: 5.2

97. Woodward found that if horizontal differentiation in an organization was low, this structure worked best.
A) mechanistic
B) organic
C) traditional
D) inorganic
Answer: B
Diff: 2 Page Ref: 162
Objective: 5.2

98. Woodward concluded that a mechanistic structure worked best for a firm that used ________.
A) unit production
B) process production
C) quality production
D) mass production
Answer: D
Diff: 2 Page Ref: 162
Objective: 5.2

99. In Woodward's study, this type of production combined high vertical differentiation and low horizontal
differentiation.
A) mass production
B) process production
C) technological production
D) unit production
Answer: B
Diff: 2 Page Ref: 162
Objective: 5.2

100. The greater the environmental uncertainty, the more an organization needs to become ________.
A) organic
B) mechanistic
C) high-tech
D) stable
Answer: A
 Diff: 2 Page Ref: 162
Objective: 5.2

101. Global competition forces firms to ________.

A) become lean, fast, and flexible
B) become more hierarchical
C) think locally
D) build up enormous cash reserves
Answer: A
Diff: 2 Page Ref: 162
Objective: 5.2

102. Traditional organizational designs tend to be more mechanistic and include ________.
A) functional, divisional, and vertical structures
B) simple, complex, and divisional structures
C) simple, functional, and divisional structures
D) simple, functional, and dysfunctional structures
Answer: C
Diff: 1 Page Ref: 163
Objective: 5.3

103. A simple structure is ________ like a mechanistic organization, but ________ like an organic organization.
A) decentralized; formal
B) centralized; informal
C) centralized; formal
D) informal; decentralized
Answer: B
Diff: 3 Page Ref: 163
Objective: 5.3

104. What is a strength of a simple structure?

A) Employees are grouped with others who have similar tasks.
B) There are cost-saving advantages from specialization.
C) Power and authority are widely distributed.
D) Accountability is clear.
Answer: D
Diff: 2 Page Ref: 163
Objective: 5.3

105. What is a weakness of a simple structure?

A) Reliance on a single person is risky.
B) Functional specialists become insulated and have little understanding of what other units are doing.
C) Pursuit of functional goals can cause managers to lose sight of what is best for the overall organization.
D) Duplication of activities and resources increases costs and reduces efficiency.
Answer: A
Diff: 2 Page Ref: 163
Objective: 5.3
106. This is a key characteristic in an organization with a functional structure.
A) little specialization
B) adaptability
C) departmentalization
D) flexibility
Answer: C
Diff: 2 Page Ref: 163-164
Objective: 5.3

107. This is a weakness of a functional structure.

A) favoring functional goals over organizational goals
B) favoring organizational goals over functional goals
C) overemphasizing organizational goals
D) failing to attain functional goals
Answer: A
Diff: 3 Page Ref: 164
Objective: 5.3

108. Avoiding redundancy is a strength of which structure?

A) functional
B) simple
C) divisional
D) corporate
Answer: A
Diff: 2 Page Ref: 164
Objective: 5.3

109. In a ________ structure each business unit has complete autonomy to reach its goals.
A) simple
B) divisional
C) functional
D) matrix
Answer: B
Diff: 2 Page Ref: 164
Objective: 5.3

110. A media company that has separate, autonomous companies for movies, TV, Internet, and print journalism
is most likely a ________ structure.
A) functional
B) matrix
C) simple
D) divisional
Answer: D
Diff: 3 Page Ref: 164
Objective: 5.3

111. Having separate payroll departments in each division of a divisional structure is an example of which of the
following?
 A) duplication, because a single payroll department could do the job
B) efficiency, because payroll departments compete
C) effectiveness, because separate payroll departments create jobs
D) efficiency, because separate payroll departments can share methods of operation
Answer: A
Diff: 3 Page Ref: 164
Objective: 5.3

112. As the number of employees in an organization grows, structure tends to become more ________.
A) decentralized
B) informal
C) bureaucratic
D) relaxed
Answer: C
Diff: 1 Page Ref: 150
Objective: 5.3

113. Looking for ways to make their organization more flexible and innovative, today's managers may choose this
kind of structure.
A) simple
B) team
C) divisional
D) functional
Answer: B
Diff: 2 Page Ref: 164
Objective: 5.3

114. In a team structure, ________.

A) no one has the authority to make decisions
B) there is a clear line of managerial authority
C) authority comes from top managers only
D) there is no clear line of managerial authority
Answer: D
Diff: 2 Page Ref: 164
Objective: 5.3

115. In a team structure, team members ________.

A) make decisions and are accountable for their decisions
B) are subject to decisions made by their supervisors
C) can influence decisions made by top managers
D) make decisions only after first checking with management
Answer: A
Diff: 3 Page Ref: 165
Objective: 5.3

116. All of the following are necessary for successful team structure EXCEPT ________.
A) team members with cross-functional skills
B) well-trained team members
 C) a fair and well-run team-based pay plan
D) team members with years of management experience
Answer: D
Diff: 2 Page Ref: 165
Objective: 5.3

117. In a ________, employees are recruited from functional departments to work on a specific project for a
limited time period.
A) matrix structure
B) product structure
C) team structure
D) divisional structure
Answer: A
Diff: 3 Page Ref: 165
Objective: 5.3

118. In a matrix structure, a group member will typically report to ________.

A) both a project manager and functional department head
B) a functional department head only
C) a project manager only
D) Group members are fully autonomous in a matrix structure, so they don't report to anyone.
Answer: A
Diff: 2 Page Ref: 165
Objective: 5.3

119. When a group member in a matrix structure finishes a project, she ________.
A) starts looking for a new job
B) enters a pool of available employees from the entire organization
C) stays with the group to take on a new project
D) returns to her functional department
Answer: D
Diff: 2 Page Ref: 165
Objective: 5.3

120. By giving employees two direct superiors, a matrix structure violates this key element of organizational
design.
A) decentralization
B) chain of command
C) unity of command
D) span of management
Answer: C
Diff: 2 Page Ref: 165
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) works on projects
B) holds group members accountable
 C) has fairly permanent groups or teams
D) empowers group members
Answer: C
Diff: 2 Page Ref: 165
Objective: 5.3

122. In a project structure, when employees finish a project they ________.

A) return to their regular work
B) return to a different division
C) move on to another project
D) return to their department
Answer: C
Diff: 2 Page Ref: 166
Objective: 5.3

123. In an orchestra, a horizontal boundary exists between which of the following?

A) the string section and the audience
B) the conductor and the audience
C) the string section and the horn section
D) the string section and the conductor
Answer: C
Diff: 2 Page Ref: 166
Objective: 5.3

124. In an orchestra, a vertical boundary exists between which of the following?

A) the horn section and the percussion section
B) the string section and the conductor
C) the string section and the horn section
D) the percussion section and the string section
Answer: B
Diff: 2 Page Ref: 166
Objective: 5.3

125. Boundaryless organizations try to eliminate ________ within their organization.

A) vertical hierarchy only
B) horizontal specialization only
C) horizontal specialization and vertical hierarchy
D) vertical specialization only
Answer: C
Diff: 2 Page Ref: 167
Objective: 5.3

126. A virtual organization is essentially ________ who come together for a particular project.
A) a group of employees from a single company
B) a team of employees from different departments of a company
C) a group of free agents
D) a group of top managers and CEOs
Answer: C
 Diff: 2 Page Ref: 167
Objective: 5.3

127. How does a virtual organization save on costs?

A) by eliminating all administrative duties
B) by hiring people who specialize in what they do
C) by hiring fewer people than they need and making them work much longer hours
D) by keeping only a small permanent staff for administrative purposes only
Answer: D
Diff: 2 Page Ref: 167
Objective: 5.3

128. A ________ subcontracts part of a project out to outside suppliers.

A) network organization
B) boundary organization
C) matrix structure
D) virtual organization
Answer: A
Diff: 2 Page Ref: 167
Objective: 5.3

129. A building contractor follows the network organization model when he does which of the following?
A) hires three workers to help with framing
B) gives orders to workers
C) does the framing and tiling by himself
D) farms out the plumbing to a plumbing firm
Answer: D
Diff: 3 Page Ref: 167
Objective: 5.3

130. A learning organization develops the capability to ________.

A) attract new employees who have special knowledge
B) add new training programs to keep employees up to date
C) continuously learn, adapt, and change
D) accept the conventional wisdom of the industry
Answer: C
Diff: 2 Page Ref: 169
Objective: 5.3

131. A learning organization requires employees to ________.

A) encode information to prevent competitors from stealing ideas
B) make all ideas public
C) share information and collaborate with one another
D) collaborate with competitors
Answer: C
Diff: 2 Page Ref: 169
Objective: 5.3
132. All of the following are characteristic of learning organizations EXCEPT ________.
A) managers who serve as facilitators
B) a strong sense of community
C) a collaborative environment
D) fear of making mistakes
Answer: D
Diff: 2 Page Ref: 169
Objective: 5.3

133. Organizational learning can't take place without ________.

A) a clear chain of command
B) a stable structure or hierarchy
C) a shared vision of the future
D) complete privacy for employees
Answer: C
Diff: 2 Page Ref: 170
Objective: 5.4

134. The culture of an organization is analogous to the ________ of an individual.

A) skills
B) motivation
C) personality
D) ability
Answer: C
Diff: 1 Page Ref: 171
Objective: 5.4

135. Which of the following phrases best characterizes the culture of an organization?
A) how things are done around here
B) guidelines for where this organization is going
C) our official code of conduct
D) the most efficient way to do things
Answer: A
Diff: 3 Page Ref: 171
Objective: 5.4

136. Which of the following is NOT a common way in which corporate cultures are transmitted to employees?
A) informal rituals
B) symbols
C) stories
D) formal culture meetings
Answer: D
Diff: 2 Page Ref: 171
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) risk tolerance
C) people focus
D) conflict tolerance
Answer: B
Diff: 2 Page Ref: 171
Objective: 5.4

138. Which of the following is NOT considered to be a characteristic of organizational culture?

A) aggressiveness and competitiveness
B) attitudes about taking risks
C) purchasing policies
D) attention to detail
Answer: C
Diff: 2 Page Ref: 171
Objective: 5.4

139. The original source of an organization's culture usually reflects the vision and attitudes of ________.
A) contemporaries who are admired by the organization
B) the organization's founders
C) the current president or CEO of the organization
D) the organization's original employees
Answer: B
Diff: 2 Page Ref: 172
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 workers never stop working
B) that church is important
C) that workers need to take a day off
D) that creativity is important
Answer: D
Diff: 3 Page Ref: 172
Objective: 5.4

141. All of the following show why corporate rituals can be valuable in a corporate culture EXCEPT ________.
A) rituals symbolize key ideas that are important in the culture
B) rituals intimidate and silence critics of the corporate culture.
C) rituals help initiate new employees into the culture
D) rituals reinforce corporate values
Answer: B
Diff: 2 Page Ref: 173
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 do not.
B) Strong cultures have less of an influence on employee behavior than do weak cultures.
C) Weak cultures are found in most successful organizations, whereas strong cultures are relatively rare.
 D) Company values are more deeply held and widely shared in strong cultures than in weak cultures.
Answer: D
Diff: 2 Page Ref: 173
Objective: 5.4

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) centralization
B) work specialization
C) chain of command
D) departmentalization
Answer: B
Diff: 3 Page Ref: 150
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) advanced assignment
B) project assignment
C) collective assignment
D) alternative assignment
Answer: B
Diff: 2 Page Ref: 166
Objective: 5.3

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) responsibility
C) authority
D) divisional structure
Answer: C
Diff: 2 Page Ref: 154-155
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) responsibility
C) authority
D) divisional structure
 Answer: B
Diff: 2 Page Ref: 154
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 do I go to
if I have a problem?" or "To whom am I responsible?"
Diff: 2 Page Ref: 150-160
Objective: 5.1

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 better-trained 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: 2 Page Ref: 150-160
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 is placed under the authority of a manager who is a specialist in, and is responsible for, everything
departmentalizatio having to do with that product line. Examples might include men's shoes, women's shoes, men's
n clothing, women's clothing, and so on.
Jobs are grouped
by product line. In Geographical departmentalization
this approach, eachJobs are grouped on the basis of a territory or geography that is served. Territory might reflect the
major product area location of employees, customers, plants, and so on.
Diff: 2 Page Ref: 152-153
Objective: 5.1

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: 2 Page Ref: 152-153
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 do 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: 2 Page Ref: 160-162
Objective: 5.3

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 uncertainty in the environment, the greater the need for the flexibility offered by an organic design.
structure On the other hand, in stable, simple environments, mechanistic designs tend to be most effective.
The greater the
Diff: 2 Page Ref: 160-162
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: 2 Page Ref: 163
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: 2 Page Ref: 164
Objective: 5.3

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: 2 Page Ref: 164
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 reviews typically remain the functional manager's responsibility. To work effectively, project and
recommendations, functional managers have to communicate regularly, coordinate work demands on employees, and
and annual resolve conflicts together.
Diff: 3 Page Ref: 165-166
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: 2 Page Ref: 167
Objective: 5.3

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 do
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: 3 Page Ref: 168-169
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 do things around here"—influences what employees can do and
how they view, define, analyze, and resolve problems and issues.
Diff: 2 Page Ref: 171
Objective: 5.4