1) Organizational structure is defined as the formal arrangement of jobs within an organization.
Answer: TRUE
Page Ref: 265
Topic: Designing Organizational Structure
Objective: 1
Difficulty: Easy
Classification: Conceptual
2) Organizational structure is the degree to which standardized procedures are in place in an organization.
Answer: FALSE
Page Ref: 265
Topic: Designing Organizational Structure
Objective: 1
Difficulty: Easy
Classification: Conceptual
3) Work specialization is also known as division of labor.
Answer: TRUE
Page Ref: 265
Topic: Designing Organizational Structure
Objective: 1
Difficulty: Easy
Classification: Conceptual
4) Managers today continue to see work specialization as important because it helps employees be more efficient.
Answer: TRUE
Page Ref: 266
Topic: Designing Organizational Structure
Objective: 1
Difficulty: Easy
Classification: Conceptual
5) Customer departmentalization works well because it emphasizes monitoring and responding to changes in customers' need.
Answer: TRUE
Page Ref: 268
Topic: Designing Organizational Structure
Objective: 1
Difficulty: Easy
Classification: Conceptual
6) In case of functional departmentalization, jobs are grouped according to ________.
A) tasks
B) territories
C) product lines
D) customer flow
Answer: A
Page Ref: 267
Topic: Designing Organizational Structure
Objective: 1
Difficulty: Easy
Classification: Conceptual
7) Departmentalization based on ________ groups jobs on the basis of territory or physical location.
A) customer
B) product
C) geography
D) process
Answer: C
Page Ref: 267
Topic: Designing Organizational Structure
Objective: 1
Difficulty: Easy
Classification: Conceptual
8) ________ departmentalization is based on the product or customer flow through the organization.
A) Product
B) Functional
C) Process
D) Customer
Answer: C
Page Ref: 267
Topic: Designing Organizational Structure
Objective: 1
Difficulty: Easy
Classification: Conceptual
9) What kind of departmentalization would be in place in a government organization where different public service responsibilities are divided into activities for employees, children, and the disabled?
A) product departmentalization
B) geographic departmentalization
C) process departmentalization
D) customer departmentalization
Answer: D
Page Ref: 267
Topic: Designing Organizational Structure
AACSB: Analytic Skills
Objective: 1
Difficulty: Moderate
Classification: Application
10) A disadvantage of ________ departmentalization is poor communication across the different groups.
A) geographic
B) functional
C) process
D) customer
Answer: B
Page Ref: 267
Topic: Designing Organizational Structure
Objective: 1
Difficulty: Moderate
Classification: Conceptual
11) Work teams composed of individuals from various functional specialties are known as ________ teams.
A) cross-control
B) cross-training
C) cross-functional
D) cross-command
Answer: C
Page Ref: 268
Topic: Designing Organizational Structure
Objective: 1
Difficulty: Easy
Classification: Conceptual
12) The line of authority that extends from upper organizational levels to lower levels, clarifying who reports to whom, is known as the ________.
A) employee power distance
B) unity of command
C) span of control
D) chain of command
Answer: D
Page Ref: 268
Topic: Designing Organizational Structure
Objective: 1
Difficulty: Easy
Classification: Conceptual
13) ________ refers to the rights inherent in a managerial position to tell people what to do and to expect them to do it.
A) Responsibility
B) Liability
C) Bureaucracy
D) Authority
Answer: D
Page Ref: 268
Topic: Designing Organizational Structure
Objective: 1
Difficulty: Easy
Classification: Conceptual
14) ________ is the obligation or expectation to perform a duty.
A) Responsibility
B) Authority
C) Ascendancy
D) Preponderance
Answer: A
Page Ref: 270
Topic: Designing Organizational Structure
Objective: 1
Difficulty: Easy
Classification: Conceptual
15) Which one of Fayol's 14 principles of management states that a person should report to only one manager?
A) unity of direction
B) unity of command
C) division of work
D) division of authority
Answer: B
Page Ref: 270
Topic: Designing Organizational Structure
Objective: 1
Difficulty: Moderate
Classification: Conceptual
16) At an international business meet, the CEO of a multinational company said that "The modern organization should go the organic way because it is essential to encourage internal collaboration." How would you effectively counter this argument?
Answer: The organic organization is low in centralization allowing professionals to respond quickly to problems as top-level managers cannot always be expected to possess the expertise to make necessary decisions. However, mechanistic structures also have their own plus points. As organizations grow, which all aim to do, the need for a certain level of centralized control intensifies. No firm can ensure that all employees will always put the company's interests before their own. The bureaucracy associated with centralized structures is not necessarily a bad thing. One must remember that no organization can be purely mechanized or purely organic. All organizations will have elements of both. The extent to which a firm is organic or otherwise depends largely on the environment it functions in and its market conditions.
Student answers may vary.
Page Ref: 274
AACSB: Reflective Thinking Skills
Objective: 2
Difficulty: Moderate
Classification: Critical Thinking