Organization Theory and Design 12th Edition by Richard Daft_TEST BANK

1. Organization design: a. encompasses larger elements that influence structural dimensions, including the organization’s size, technology, environment, culture, and goals. b. gives us the tools to evaluate and understand how and why some organizations grow and succeed while others do not. c. obtains inputs from the external environment, adds value through a transformation process, and discharges products and services back to the environment. d. provides labels to describe the internal characteristics of an organization.

ANSWER: b Feedback: Organization design gives us the tools to evaluate and understand how and why RATIONALE: some organizations grow and succeed while others do not. It helps us explain what happened in the past, as well as what might happen in the future, so that we can manage organizations more effectively.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-03 - 01-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design in Action KEYWORDS: Bloom’s: Understand 2. _____ refers to economic development that generates wealth and meets the needs of the current generation while saving the environment so future generations can meet their needs as well. a. Centralization b. Formalization c. Contingency d. Sustainability ANSWER: d Feedback: Many companies are embracing the philosophy of sustainability, which refers to RATIONALE: economic development that generates wealth and meets the needs of the current generation while saving the environment so future generations can meet their needs as well.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-02 - 01-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design in Action KEYWORDS: Bloom’s: Understand 3. Pendant Inc., a retail chain based in England, has implemented an energy-efficient trucking fleet. It is increasing its use of green materials in buildings, and aims to dispose all the waste of the company by 2025. Which of the following measures is Pendant Inc. focusing its efforts on? a. Going green b. Scientific management c. Contingency d. Centralization ANSWER: a Feedback: Pendant Inc. is focusing its efforts on going green. Going green has become a RATIONALE: new business imperative, driven by shifting social attitudes, new government policies, climate changes, and the information technology that quickly spreads news of a corporation’s negative impact on the environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-02 - 01-02 Cengage Learning Testing, Powered by Cognero

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NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Organization Design in Action KEYWORDS: Bloom’s: Apply 4. _____ refers to technologies, skills, and processes for searching and examining massive sets of data to uncover hidden patterns and correlations. a. Scientific management b. Social business c. A social media program d. Big data analytics ANSWER: d Feedback: Big data analytics refers to technologies, skills, and processes for searching and RATIONALE: examining massive sets of data to uncover hidden patterns and correlations. Big data is not just for online companies.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-02 - 01-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design in Action KEYWORDS: Bloom’s: Remember 5. Which of the following is a difference between for-profit businesses and nonprofit organizations? a. Financial resources for for-profit businesses come from government appropriations, grants, and donations, while nonprofit organizations are funded by the sale of products or services to customers. b. In for-profit businesses, managers focus on improving an organization’s products and services to increase sales revenues, while in nonprofit organizations, however, services are typically provided to nonpaying clients. c. For-profit businesses are committed to servicing clients with limited funds, while nonprofit organizations have access to unlimited funds to service clients. d. In for-profit businesses, services are typically provided to nonpaying clients, while in nonprofit organizations, services are typically provided to paying clients.

ANSWER: b Feedback: In for-profit businesses, managers focus on improving an organization’s products RATIONALE: and services to increase sales revenues. In nonprofits, however, services are typically provided to nonpaying clients, and a major problem for many organizations is securing a steady stream of funds to continue operating.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-01 - 01-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: What is an Organization?

KEYWORDS: Bloom’s: Understand 6. _____ provide labels to describe the internal characteristics of an organization. a. Functional dimensions b. Administrative principles c. Contingency factors d. Structural dimensions ANSWER: d Feedback: Structural dimensions provide labels to describe the internal characteristics of an RATIONALE: organization. They create a basis for measuring and comparing organizations.

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POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-04 - 01-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dimensions of Organization Design KEYWORDS: Bloom’s: Remember 7. _____ encompass larger elements that influence structural dimensions, including an organization’s size, technology, environment, culture, and goals. a. Functional dimensions b. Administrative principles c. Contingency factors d. Structural dimensions ANSWER: c Feedback: Contingency factors encompass larger elements that influence structural RATIONALE:

dimensions, including an organization’s size, technology, environment, culture, and goals.

They describe the organizational setting that influences and shapes the structural dimensions.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-04 - 01-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dimensions of Organization Design KEYWORDS: Bloom’s: Remember 8. Which of the following is true of contingency factors? a. They describe the organizational setting that influences and shapes the structural dimensions. b. They create a basis for measuring and comparing organizations. c. They provide labels to describe the internal characteristics of an organization. d. They describe who reports to whom and the span of control for each manager.

ANSWER: a Feedback: Contingency factors encompass larger elements that influence structural RATIONALE:

dimensions, including the organization’s size, technology, environment, culture, and goals.

They describe the organizational setting that influences and shapes the structural dimensions.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-04 - 01-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dimensions of Organization Design KEYWORDS: Bloom’s: Understand 9. _____ pertains to the amount of written documentation in an organization. a. Centralization b. Specialization c. Decentralization d. Formalization ANSWER: d Feedback: Formalization pertains to the amount of written documentation in an organization.

RATIONALE: Documentation includes procedures, job descriptions, regulations, and policy manuals.

POINTS:

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LEARNING OBJECTIVES: ORGT.DAFT.16.01-04 - 01-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dimensions of Organization Design KEYWORDS: Bloom’s: Remember 10. _____ is the degree to which organizational tasks are subdivided into separate jobs. a. Centralization b. Specialization c. Decentralization d. Formalization ANSWER: b Feedback: Specialization is the degree to which organizational tasks are subdivided into RATIONALE: separate jobs. Specialization is sometimes referred to as the division of labor.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-04 - 01-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dimensions of Organization Design KEYWORDS: Bloom’s: Remember 11. _____ describes who reports to whom and the span of control for each manager. a. Organizational technology b. Scientific management c. Hierarchy of authority d. Administrative principles ANSWER: c Feedback: Hierarchy of authority describes who reports to whom and the span of control for RATIONALE: each manager. The hierarchy is related to span of control (the number of employees reporting to a supervisor).

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-04 - 01-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dimensions of Organization Design KEYWORDS: Bloom’s: Remember 12. _____ refers to the number of distinct departments or activities within an organization. a. Complexity b. Specialization c. Decentralization d. Formalization ANSWER: a Feedback: Complexity refers to the number of distinct departments or activities within an RATIONALE: organization. Complexity can be measured along three dimensions: vertical, horizontal, and spatial.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-04 - 01-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dimensions of Organization Design Cengage Learning Testing, Powered by Cognero

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KEYWORDS:

Bloom’s: Remember

13. _____ complexity is the number of levels in the hierarchy of an organization. a. Spatial b. Vertical c. Lateral d. Horizontal ANSWER: b Feedback: Complexity can be measured along three dimensions: vertical, horizontal, and RATIONALE: spatial. Vertical complexity is the number of levels in the hierarchy.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-04 - 01-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dimensions of Organization Design KEYWORDS: Bloom’s: Remember 14. _____ complexity is the degree to which an organization’s departments and personnel are dispersed geographically. a. Spatial b. Vertical c. Lateral d. Horizontal ANSWER: a Feedback: Complexity can be measured along three dimensions: vertical, horizontal, and RATIONALE: spatial. Spatial complexity is the degree to which an organization’s departments and personnel are dispersed geographically.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-04 - 01-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dimensions of Organization Design KEYWORDS: Bloom’s: Remember 15. _____ refers to the tools, techniques, and actions used to transform inputs into outputs. a. Organization design b. Organizational performance c. Organizational technology d. Organizational behavior ANSWER: c Feedback: Organizational technology refers to the tools, techniques, and actions used to RATIONALE: transform inputs into outputs. It concerns how the organization actually produces the products and services it provides for customers and includes such things as flexible manufacturing, advanced information systems, and the Internet.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-04 - 01-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dimensions of Organization Design KEYWORDS: Bloom’s: Remember 16. _____ refers to the amount of resources used to achieve an organization’s goals.

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a. Effectiveness b. Contingency c. Sustainability d. Efficiency ANSWER: RATIONALE:

d Feedback: Efficiency refers to the amount of resources used to achieve an organization’s goals. It is based on the quantity of raw materials, money, and employees necessary to produce a given level of output.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-05 - 01-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dimensions of Organization Design KEYWORDS: Bloom’s: Remember 17. _____ is the degree to which an organization achieves its goals. a. Effectiveness b. Contingency c. Sustainability d. Efficiency ANSWER: a Feedback: Efficiency refers to the amount of resources used to achieve an organization’s RATIONALE: goals. Effectiveness is a broader term, meaning the degree to which the organization achieves its goals.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-05 - 01-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dimensions of Organization Design KEYWORDS: Bloom’s: Remember 18. _____ primarily focus on the design and functioning of an organization as a whole. a. Structural dimensions b. Administrative principles c. Contingency factors d. Functional dimensions ANSWER: b Feedback: Whereas scientific management focused primarily on the technical core—on work RATIONALE: performed on a shop floor—administrative principles looked at the design and functioning of an organization as a whole.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-06 - 01-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Evolution of Organization Design KEYWORDS: Bloom’s: Remember 19. _____ emphasize designing and managing organizations on an impersonal, rational basis through such elements as clearly defined authority and responsibility, formal recordkeeping, and uniform application of standard rules. a. Structural dimensions Cengage Learning Testing, Powered by Cognero

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b. Administrative principles c. Contingency factors d. Bureaucratic organizations ANSWER: d Feedback: Bureaucratic organizations emphasize designing and managing organizations on RATIONALE: an impersonal, rational basis through such elements as clearly defined authority and responsibility, formal recordkeeping, and uniform application of standard rules. Although the term bureaucracy has taken on negative connotations in today’s organizations, bureaucratic characteristics worked extremely well for the needs of the Industrial Age.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-06 - 01-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Evolution of Organization Design KEYWORDS: Bloom’s: Remember 20. A(n) _____ design means that an organization is much looser, free-flowing, and adaptive. a. organic b. specialized c. vertical d. mechanistic ANSWER: a Feedback: An organic design means that an organization is much looser, free-flowing, and RATIONALE: adaptive. Rules and regulations often are not written down or, if written down, are flexibly applied.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-07 - 01-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Contrast of Organic and Mechanistic Designs KEYWORDS: Bloom’s: Remember 21. Subzero Enterprises is a publishing company based in the United States of America. The company has 70 employees.

Information flows in all directions within and across departments and hierarchical levels. The rules and regulations at Subzero Enterprises are flexibly applied. Subzero Enterprises follows a(n) _____ design. a. vertical b. specialized c. organic d. mechanistic ANSWER: c Feedback: Subzero Enterprises follows an organic design. An organic design means that an RATIONALE: organization is much looser, free-flowing, and adaptive. Rules and regulations often are not written down or, if written down, are flexibly applied.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-07 - 01-07 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: The Contrast of Organic and Mechanistic Designs KEYWORDS: Bloom’s: Apply 22. Which of the following contingency factors will influence whether an organization is more effective with a primarily Cengage Learning Testing, Powered by Cognero

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mechanistic organization design? a. Service technology b. Large size c. Adaptive culture d. Innovation strategy ANSWER: b Feedback: Various contingency factors will influence whether an organization is more RATIONALE: effective with a primarily mechanistic or a primarily organic design. Large size, efficiency strategy, stable environment, rigid culture, manufacturing technology are the typical contingency factors that will influence whether the organization is more effective with a primarily mechanistic organization design.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-07 - 01-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Contrast of Organic and Mechanistic Designs KEYWORDS: Bloom’s: Understand 23. Which of the following contingency factors will influence whether an organization is more effective with a primarily organic design? a. Manufacturing technology b. Stable environment c. Adaptive culture d. Efficiency strategy ANSWER: c Feedback: Various contingency factors will influence whether an organization is more RATIONALE: effective with a primarily mechanistic or a primarily organic design. Small size, innovation strategy, changing environment, adaptive culture, service technology are the typical contingency factors that will influence whether the organization is more effective with a primarily organic organization design.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-07 - 01-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Contrast of Organic and Mechanistic Designs KEYWORDS: Bloom’s: Understand 24. At Infosoft Solutions, employees are encouraged to take care of their problems by working with one another and with customers, using their discretion to make decisions. From this information, it can be understood that Infosoft Solutions is a _____ organization. a. decentralized b. centralized c. mechanistic d. bureaucratic ANSWER: a Feedback: Infosoft Solutions is a decentralized company. With decentralization, decisionRATIONALE: making authority is pushed down to lower organizational levels.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-07 - 01-07 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

The Contrast of Organic and Mechanistic Designs Bloom’s: Apply

25. A _____ is a narrowly defined piece of work assigned to a person. a. task b. role c. job d. designation ANSWER: a Feedback: A task is a narrowly defined piece of work assigned to a person. With a RATIONALE: mechanistic design, tasks are broken down into specialized, separate parts, as in a machine, with each employee performing activities according to a specific job description.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-07 - 01-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Contrast of Organic and Mechanistic Designs KEYWORDS: Bloom’s: Remember 26. A _____ has discretion and responsibility, allowing a person to use his or her judgment and ability to achieve an outcome or meet a goal. a. task b. role c. structure d. system ANSWER: b Feedback: A role is a part in a dynamic social system. A role has discretion and RATIONALE: responsibility, allowing a person to use his or her judgment and ability to achieve an outcome or meet a goal.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-07 - 01-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Contrast of Organic and Mechanistic Designs KEYWORDS: Bloom’s: Remember 27. Which of the following types of communication is emphasized by mechanistic organizations? a. Lateral communication b. Spatial communication c. Horizontal communication d. Vertical communication ANSWER: d Feedback: Mechanistic organizations emphasize vertical communication up and down the RATIONALE: hierarchy. Top managers pass information downward to employees about goals and strategies, job instructions, procedures, and so forth, and in turn ask that employees provide information up the hierarchy concerning problems, performance reports, financial information, suggestions and ideas, and so forth.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-07 - 01-07 NATIONAL STANDARDS: United States - AACSB: Analytic Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

The Contrast of Organic and Mechanistic Designs Bloom’s: Remember

28. Which of the following types of communication is emphasized by organic organizations? a. Lateral communication b. Spatial communication c. Horizontal communication d. Vertical communication ANSWER: c Feedback: In an organic organization, there is greater emphasis on horizontal RATIONALE: communication, with information flowing in all directions within and across departments and hierarchical levels. The widespread sharing of information enables all employees to have complete information about the company so they can act quickly.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-07 - 01-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Contrast of Organic and Mechanistic Designs KEYWORDS: Bloom’s: Remember 29. _____ is the micro approach to organizations because it focuses on the individuals within organizations as the relevant units of analysis. a. Organizational behavior b. Organization design c. Organization theory d. Organizational culture ANSWER: a Feedback: Organizational behavior is the micro approach to organizations because it focuses RATIONALE: on the individuals within organizations as the relevant units of analysis. Organizational behavior examines concepts such as motivation, leadership style, and personality and is concerned with cognitive and emotional differences among people within organizations.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-03 - 01-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Framework for the Book KEYWORDS: Bloom’s: Remember 30. Which of the following is a difference between organization design and organizational behavior? a. Organization design focuses on individuals within organizations, while organizational behavior analyzes the whole organization as a unit. b. Organization design is concerned with cognitive and emotional differences among people within organizations, while organizational behavior is concerned with the differences in structure and behavior at the organization level of analysis. c. Organization design is concerned with lower management, while organizational behavior is concerned with top- and middle-management. d. Organization design might be considered the sociology of organizations, while organizational behavior is the psychology of organizations.

ANSWER: d Feedback: Organization design might be considered the sociology of organizations, while RATIONALE: organizational behavior is the psychology of organizations.

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POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-08 - 01-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Framework for the Book KEYWORDS: Bloom’s: Understand 31. The growing global interdependence means that the environment for companies has become less complex and competitive. a. True b. False ANSWER: False Feedback: The growing global interdependence creates new advantages, but it also means RATIONALE: that the environment for companies has become extremely complex and extremely competitive. Customers want low prices for quality goods and services, and the organizations that can meet that demand will win.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-02 - 01-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design in Action KEYWORDS: Bloom’s: Understand 32. Outsourcing firms in low-wage countries can often do work for 50 to 60 percent more than companies based in the United States. a. True b. False ANSWER: False Feedback: Outsourcing firms in low-wage countries can often do work for 50 to 60 percent RATIONALE: less than companies based in the United States, for instance, so U.S. firms that provide similar services have to search for new ways to compete or go into new lines of business.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-02 - 01-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design in Action KEYWORDS: Bloom’s: Understand 33. Social media programs decrease efficiency and productivity and facilitate slower operations. a. True b. False ANSWER: False Feedback: Social media programs, including a company’s online community pages, wikis for RATIONALE: virtual collaboration, social media sites such as Facebook or LinkedIn, video channels such as YouTube, microblogging platforms such as Twitter, and company online forums, can improve efficiency, increase productivity, and facilitate faster and smoother operations by improving communication and collaboration within and across firms.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-02 - 01-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design in Action Cengage Learning Testing, Powered by Cognero

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KEYWORDS:

Bloom’s: Understand

34. Social media can build stronger, more authentic relationships between managers and employees. a. True b. False ANSWER: True Feedback: Social media technology is being used by companies to build relationships with RATIONALE: customers. It can build stronger, more authentic relationships between managers and employees.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-02 - 01-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design in Action KEYWORDS: Bloom’s: Understand 35. Big data analytics can only be employed by online companies. a. True b. False ANSWER: False Feedback: Big data is not just for online companies. Walmart collects more than 2.5 RATIONALE: petabytes of data every hour from customer transactions and uses those data to make better decisions.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-02 - 01-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design in Action KEYWORDS: Bloom’s: Remember 36. Organizations are social entities that are only linked to the internal environment. a. True b. False ANSWER: False Feedback: Organizations are (1) social entities that (2) are goal-directed, (3) are designed as RATIONALE: deliberately structured and coordinated activity systems, and (4) are linked to the external environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-01 - 01-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: What is an Organization?

KEYWORDS: Bloom’s: Remember 37. An organization is a building or a set of policies and procedures. a. True b. False ANSWER: False Feedback: An organization is not a building or a set of policies and procedures; organizations RATIONALE: are made up of people and their relationships with one another.

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LEARNING OBJECTIVES: ORGT.DAFT.16.01-01 - 01-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: What is an Organization?

KEYWORDS: Bloom’s: Remember 38. An organization exists when people interact with one another to perform essential functions that help attain goals. a. True b. False ANSWER: True Feedback: An organization is not a building or a set of policies and procedures; organizations RATIONALE: are made up of people and their relationships with one another. An organization exists when people interact with one another to perform essential functions that help attain goals.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-01 - 01-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: What is an Organization?

KEYWORDS: Bloom’s: Remember 39. An organization obtains inputs from the external environment, adds value through a transformation process, and discharges products and services back to the environment. a. True b. False ANSWER: True Feedback: An organization obtains inputs from the external environment, adds value through RATIONALE: a transformation process, and discharges products and services back to the environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-01 - 01-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: What is an Organization?

KEYWORDS: Bloom’s: Understand 40. Managers in nonprofits direct most of their activities toward earning money for the company and its owners. a. True b. False ANSWER: False Feedback: The primary difference between for-profit businesses and nonprofit organizations RATIONALE: is that managers in businesses direct their activities toward earning money for the company and its owners, whereas managers in nonprofits direct much of their effort toward generating some kind of social impact.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-01 - 01-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: What is an Organization?

KEYWORDS: Bloom’s: Understand 41. Managers in nonprofits direct much of their effort toward generating some kind of social impact. a. True b. False Cengage Learning Testing, Powered by Cognero

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ANSWER: RATIONALE:

True Feedback: The primary difference between managers of nonprofits and managers of businesses is that managers in businesses direct their activities toward earning money for the company and its owners, whereas managers in nonprofits direct much of their effort toward generating some kind of social impact.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-01 - 01-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: What is an Organization?

KEYWORDS: Bloom’s: Understand 42. Financial resources for government and charity nonprofits typically come from the sale of products or services to customers rather than from government appropriations, grants, and donations. a. True b. False ANSWER: False Feedback: Financial resources for government and charity nonprofits typically come from RATIONALE: government appropriations, grants, and donations rather than from the sale of products or services to customers.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-01 - 01-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: What is an Organization?

KEYWORDS: Bloom’s: Understand 43. In businesses, managers focus on improving the organization’s products and services to increase sales revenues. a. True b. False ANSWER: True Feedback: In businesses, managers focus on improving the organization’s products and RATIONALE: services to increase sales revenues. In nonprofits, however, services are typically provided to nonpaying clients, and a major problem for many organizations is securing a steady stream of funds to continue operating.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-01 - 01-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: What is an Organization?

KEYWORDS: Bloom’s: Understand 44. Managers in nonprofit organizations market their services to attract not only clients (customers) but also volunteers and donors. a. True b. False ANSWER: True Feedback: Managers in nonprofit organizations also deal with many diverse stakeholders and RATIONALE: must market their services to attract not only clients (customers) but also volunteers and donors.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-01 - 01-01 Cengage Learning Testing, Powered by Cognero

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NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: What is an Organization?

KEYWORDS: Bloom’s: Understand 45. Large universities tend to be low on formalization a. True b. False ANSWER: True Feedback: Large universities, for example, tend to be high on formalization because they RATIONALE: have several volumes of written rules for such things as registration, dropping and adding classes, student associations, dormitory governance, and financial assistance.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-04 - 01-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dimensions of Organization Design KEYWORDS: Bloom’s: Understand 46. If specialization is low, each employee performs only a narrow range of tasks. a. True b. False ANSWER: False Feedback: If specialization is extensive, each employee performs only a narrow range of RATIONALE: tasks. If specialization is low, employees perform a wide range of tasks in their jobs.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-04 - 01-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dimensions of Organization Design KEYWORDS: Bloom’s: Understand 47. When spans of control are narrow, the hierarchy tends to be tall. a. True b. False ANSWER: True Feedback: When spans of control are narrow, the hierarchy tends to be tall. When spans of RATIONALE: control are wide, the hierarchy of authority will be shorter.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-04 - 01-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dimensions of Organization Design KEYWORDS: Bloom’s: Understand 48. Vertical complexity is the number of departments or occupational specialties existing horizontally across an organization. a. True b. False ANSWER: False Feedback: Vertical complexity is the number of levels in the hierarchy. Different RATIONALE: organizational levels possess different stores of knowledge and expertise. Horizontal Cengage Learning Testing, Powered by Cognero

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complexity is the number of departments or occupational specialties existing horizontally across an organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-04 - 01-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dimensions of Organization Design KEYWORDS: Bloom’s: Remember 49. When decision making is kept at the top level, an organization is decentralized. a. True b. False ANSWER: False Feedback: When decision making is kept at the top level, an organization is centralized.

RATIONALE: When decisions are delegated to lower organizational levels, it is decentralized.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-04 - 01-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dimensions of Organization Design KEYWORDS: Bloom’s: Remember 50. Scientific management focuses primarily on design and functioning of an organization as a whole. a. True b. False ANSWER: False Feedback: Whereas scientific management focuses primarily on the technical core—on work RATIONALE: performed on the shop floor—administrative principles looks at the design and functioning of an organization as a whole.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-06 - 01-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Evolution of Organization Design KEYWORDS: Bloom’s: Understand 51. With decentralization, decision-making authority is pushed up to higher organizational levels. a. True b. False ANSWER: False Feedback: With decentralization, decision-making authority is pushed down to lower RATIONALE: organizational levels. In a highly organic organization, knowledge and control of activities are located with employees rather than with supervisors or top executives.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-07 - 01-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Contrast of Organic and Mechanistic Designs KEYWORDS: Bloom’s: Understand 52. In an organic organization, there is greater emphasis on vertical communication. a. True Cengage Learning Testing, Powered by Cognero

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b. False ANSWER: RATIONALE:

False Feedback: In an organic organization, there is greater emphasis on horizontal communication, with information flowing in all directions within and across departments and hierarchical levels.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-07 - 01-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Contrast of Organic and Mechanistic Designs KEYWORDS: Bloom’s: Understand 53. Organizational behavior is concerned with people aggregated into departments and organizations and with the differences in structure and behavior at the organization level of analysis. a. True b. False ANSWER: False Feedback: Organization theory and design is a macro examination of organizations because RATIONALE: it analyzes the whole organization as a unit. Organization design is concerned with people aggregated into departments and organizations and with the differences in structure and behavior at the organization level of analysis.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-03 - 01-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Framework for the Book KEYWORDS: Bloom’s: Understand 54. Organization design is directly relevant to top- and middle-management concerns and partly relevant to lower management. a. True b. False ANSWER: True Feedback: Organization design might be considered the sociology of organizations, while RATIONALE: organizational behavior is the psychology of organizations. Organization design is directly relevant to top- and middle-management concerns and partly relevant to lower management.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-03 - 01-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Framework for the Book KEYWORDS: Bloom’s: Understand 55. Top management is concerned with major departments, such as marketing or research, and must decide how the department relates to the rest of an organization. a. True b. False ANSWER: False Feedback: Organization design might be considered the sociology of organizations, while RATIONALE: organizational behavior is the psychology of organizations. Organization design is directly relevant to top- and middle-management concerns and partly relevant to lower management.

POINTS:

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LEARNING OBJECTIVES: ORGT.DAFT.16.01-03 - 01-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Framework for the Book KEYWORDS: Bloom’s: Understand 56. What is a social business? Discuss in detail the advantages of social media programs.

ANSWER: Social business refers to using social media technologies for interacting with and facilitating communication and collaboration among employees, customers, and other stakeholders and is one of the most current challenges managers face. Social media programs, including a company’s online community pages, wikis for virtual collaboration, social media sites such as Facebook or LinkedIn, video channels such as YouTube, microblogging platforms such as Twitter, and company online forums, can improve efficiency, increase productivity, and facilitate faster and smoother operations by improving communication and collaboration within and across firms. In addition, social media technology is being used by companies to build relationships with customers. It can build stronger, more authentic relationships between managers and employees.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-02 - 01-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design in Action KEYWORDS: Bloom’s: Understand 57. Differentiate between for-profit businesses and nonprofit firms.

ANSWER: The primary difference between for-profit businesses and nonprofit firms is that managers in businesses direct their activities toward earning money for the company and its owners, whereas managers in nonprofits direct much of their effort toward generating some kind of social impact. Financial resources for government and charity nonprofits typically come from government appropriations, grants, and donations rather than from the sale of products or services to customers. In businesses, managers focus on improving the organization’s products and services to increase sales revenues. In nonprofits, however, services are typically provided to nonpaying clients, and a major problem for many organizations is securing a steady stream of funds to continue operating. Nonprofit managers, committed to serving clients with limited funds, must focus on keeping organizational costs as low as possible and demonstrating a highly efficient use of resources. Moreover, for-profit firms often compete with nonprofits for limited donations through their own philanthropic fundraising efforts.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-01 - 01-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: What is an Organization?

KEYWORDS: Bloom’s: Understand 58. Briefly discuss the contingency factors of an organization.

ANSWER: Contingency factors include size, organizational technology, the external environment, goals and strategy, and organizational culture. a. Size can be measured for the organization as a whole or for specific components, such as a plant or division. b. Organizational technology refers to the tools, techniques, and actions used to transform inputs into outputs. c. The environment includes all elements outside the boundary of the organization. d. The organization’s goals and strategy define the purpose and competitive techniques that Cengage Learning Testing, Powered by Cognero

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set it apart from other organizations. e. An organization’s culture is the underlying set of key values, beliefs, understandings, and norms shared by employees.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-04 - 01-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dimensions of Organization Design KEYWORDS: Bloom’s: Understand 59. Discuss in detail the stakeholder approach.

ANSWER: Achieving effectiveness is not always a simple matter because different people want different things from an organization. For customers, the primary concern is high-quality products and services provided in a timely manner at a reasonable price, whereas employees are mostly concerned with adequate pay, good working conditions, and job satisfaction. Managers carefully balance the needs and interests of various stakeholders in setting goals and striving for effectiveness. This is referred to as the stakeholder approach, which integrates diverse organizational activities by looking at various organizational stakeholders and what they want from the organization. A stakeholder is any group within or outside of the organization that has a stake in the organization’s performance. The satisfaction level of each group can be assessed as an indication of the organization’s performance and effectiveness.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-05 - 01-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dimensions of Organization Design KEYWORDS: Bloom’s: Understand 60. What is scientific management? How is it used?

ANSWER: Pioneered by Frederick Winslow Taylor, scientific management emphasizes scientifically determined jobs and management practices as the way to improve efficiency and labor productivity. Taylor proposed that workers “could be retooled like machines, their physical and mental gears recalibrated for better productivity.” He insisted that management itself would have to change and emphasized that decisions based on rules of thumb and tradition should be replaced with precise procedures developed after careful study of individual situations. To use this approach, managers develop precise, standard procedures for doing each job, select workers with appropriate abilities, train workers in the standard procedures, carefully plan work, and provide wage incentives to increase output.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-06 - 01-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Evolution of Organization Design KEYWORDS: Bloom’s: Understand 61. What is a mechanistic design?

ANSWER: A mechanistic design means that an organization is characterized by machine-like standard rules, procedures, and a clear hierarchy of authority. Organizations are highly formalized and are also centralized, with most decisions made at the top.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-07 - 01-07 NATIONAL STANDARDS: United States - AACSB: Analytic Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

The Contrast of Organic and Mechanistic Design Bloom’s: Remember

62. Differentiate between specialized tasks and empowered roles.

ANSWER: A task is a narrowly defined piece of work assigned to a person. With a mechanistic design, tasks are broken down into specialized, separate parts, as in a machine, with each employee performing activities according to a specific job description. A role, in contrast, is a part in a dynamic social system. A role has discretion and responsibility, allowing a person to use his or her judgment and ability to achieve an outcome or meet a goal.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-07 - 01-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Contrast of Organic and Mechanistic Design KEYWORDS: Bloom’s: Understand 63. Discuss how communication takes place in mechanistic and organic organizations.

ANSWER: Mechanistic organizations emphasize vertical communication up and down the hierarchy.

Top managers pass information downward to employees about goals and strategies, job instructions, procedures, and so forth, and in turn ask that employees provide information up the hierarchy concerning problems, performance reports, financial information, suggestions and ideas, and so forth. In an organic organization, there is greater emphasis on horizontal communication, with information flowing in all directions within and across departments and hierarchical levels. The widespread sharing of information enables all employees to have complete information about the company so they can act quickly. In addition, organic organizations maintain open lines of communication with customers, suppliers, and even competitors to enhance learning capability.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-07 - 01-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Contrast of Organic and Mechanistic Design KEYWORDS: Bloom’s: Understand 64. Describe the levels of analysis of an organization.

ANSWER: Each organization is a system that is composed of various subsystems. Organization systems are nested within systems, and one level of analysis has to be chosen as the primary focus.

Four levels of analysis normally characterize organizations. The individual human being is the basic building block of organizations. The human being is to the organization what a cell is to a biological system. The next higher system level is the group or department. These are collections of individuals who work together to perform group tasks. The next level of analysis is the organization itself. An organization is a collection of groups or departments that combine into the total organization. Organizations themselves can be grouped together into the next higher level of analysis, which is the interorganizational set and community.

The interorganizational set is the group of organizations with which a single organization interacts. Other organizations in the community make up an important part of an organization’s environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-08 - 01-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Framework for the Book KEYWORDS: Bloom’s: Remember Cengage Learning Testing, Powered by Cognero

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65. What is organization theory and design?

ANSWER: Organization theory and design is a macro examination of organizations because it analyzes a whole organization as a unit. Organization design is concerned with people aggregated into departments and organizations and with the differences in structure and behavior at the organization level of analysis. Organization design might be considered the sociology of organizations, while organizational behavior is the psychology of organizations.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.01-03 - 01-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Framework for the Book KEYWORDS: Bloom’s: Remember

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1. A _____ represents a result or end point toward which organizational efforts are directed. a. goal b. strategy c. resource d. structure ANSWER: a Feedback: A goal represents a result or end point toward which organizational efforts are RATIONALE: directed.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-01 - 02-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Role of Strategic Direction in Organization Design KEYWORDS: Bloom’s: Remember 2. Which of the following is an internal factor that is examined by top management to study an organization’s effectiveness? a. Opportunities b. Weaknesses c. Uncertainty d. Resource availability ANSWER: b Feedback: Managers can study an organization’s effectiveness by examining internal factors RATIONALE: such as the organization’s strengths, weaknesses, distinctive competence, leader style, and past performance.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-01 - 02-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Role of Strategic Direction in Organization Design KEYWORDS: Bloom’s: Remember 3. _____ means that all the organization's energies and resources are directed toward a focused, unifying, and compelling overall goal. a. Strategic intent b. The resource-based approach c. Coalitional management d. The stakeholder approach ANSWER: a Feedback: Strategic intent means that all an organization’s energies and resources are RATIONALE: directed toward a focused, unifying, and compelling overall goal.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-02 - 02-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Purpose KEYWORDS: Bloom’s: Remember 4. The overall goal for an organization is also called the: a. operating goal.

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b. decision guideline. c. mission. d. strategy.

ANSWER: RATIONALE:

c Feedback: The overall goal for an organization is often called the mission—the organization’s reason for existence.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-02 - 02-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Purpose KEYWORDS: Bloom’s: Remember 5. Which of the following describes an organization's shared values and beliefs and its reason for being? a. Strategy b. The mission c. Policy d. Procedure ANSWER: b Feedback: The mission describes an organization’s shared values and beliefs and its reason RATIONALE: for being.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-02 - 02-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Purpose KEYWORDS: Bloom’s: Remember 6. _____ refers to what sets an organization apart from others and provides it with a distinctive edge for meeting customer or client needs in the marketplace. a. Operational plan b. A social construct c. The mission statement d. Competitive advantage ANSWER: d Feedback: Competitive advantage refers to what sets an organization apart from others and RATIONALE: provides it with a distinctive edge for meeting customer or client needs in the marketplace.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-02 - 02-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Purpose KEYWORDS: Bloom’s: Remember 7. A company's _____ refers to something an organization does especially well in comparison to its competitors. a. strategic intent b. mission statement c. core competence d. balanced scorecard ANSWER: c Cengage Learning Testing, Powered by Cognero

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RATIONALE:

Feedback: A company’s core competence is something an organization does especially well in comparison to its competitors.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-02 - 02-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Purpose KEYWORDS: Bloom’s: Remember 8. _____ describe specific measurable outcomes and are often concerned with the short run. a. Official goals b. Visionary goals c. Strategic goals d. Operating goals ANSWER: d Feedback: Operating goals describe specific measurable outcomes and are often concerned RATIONALE: with the short run.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-02 - 02-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Purpose KEYWORDS: Bloom’s: Remember 9. Which of the following operating goals pertains to the acquisition of needed material and capital from the environment? a. Resource goals b. Performance goals c. Market goals d. Productivity goals ANSWER: a Feedback: Resource goals pertain to the acquisition of needed material and financial RATIONALE: resources from the environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-02 - 02-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Purpose KEYWORDS: Bloom’s: Remember 10. _____ pertains to the training, promotion, safety, and growth of individuals working in an organization. a. Market share b. Innovation c. Industrial expansion d. Employee development ANSWER: d Feedback: Employee development pertains to the training, promotion, safety, and growth of RATIONALE: employees. It includes both managers and workers.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-02 - 02-02 NATIONAL STANDARDS: United States - AACSB: Analytic Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

Organizational Purpose Bloom’s: Remember

11. _____ pertain to internal flexibility and readiness to adapt to unexpected changes in the environment. a. Market goals b. Profitability goals c. Innovation goals d. Productivity goals ANSWER: c Feedback: Innovation goals pertain to internal flexibility and readiness to adapt to unexpected RATIONALE: changes in the environment. Innovation goals are often defined with respect to the development of specific new services, products, or production processes.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-02 - 02-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Purpose KEYWORDS: Bloom’s: Remember 12. _____ and mission statements describe a value system for an organization and set an overall purpose and vision. a. Profitability goals b. Official goals c. Operational goals d. Productivity goals ANSWER: b Feedback: Official goals and mission statements describe a value system for an organization RATIONALE: and set an overall purpose and vision; operating goals represent the primary tasks of an organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-02 - 02-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Purpose KEYWORDS: Bloom’s: Remember 13. _____ involves building an alliance of people who support a manager’s goals and can influence other people to accept and work toward them. a. Directive management b. Coalitional management c. Severance management d. Division management ANSWER: b Feedback: Coalitional management involves building an alliance of people who support a RATIONALE: manager’s goals and can influence other people to accept and work toward them.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-03 - 02-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Purpose KEYWORDS: Bloom’s: Understand Cengage Learning Testing, Powered by Cognero

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14. A _____ is a plan for interacting with the competitive environment to achieve organizational goals. a. vision statement b. mission statement c. policy d. strategy ANSWER: d Feedback: A strategy is a plan for interacting with the competitive environment to achieve RATIONALE: organizational goals.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-04 - 02-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Two Frameworks for Selecting Strategy and Design KEYWORDS: Bloom’s: Remember 15. In the context of Porter’s strategy model, a(n) ____ can reduce rivalry with competitors and fight off the threat of substitute products because customers are loyal to a company's brand. a. low-cost leadership strategy b. consolidative strategy c. integration strategy d. differentiation strategy ANSWER: d Feedback: A differentiation strategy can reduce rivalry with competitors and fight off the RATIONALE: threat of substitute products because customers are loyal to a company’s brand.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-04 - 02-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Two Frameworks for Selecting Strategy and Design KEYWORDS: Bloom’s: Remember 16. In the context of Porter’s strategy model, a(n) ____ is concerned primarily with stability rather than taking risks or seeking new opportunities for innovation and growth. a. prospector strategy b. low-cost leadership strategy c. differentiation strategy d. innovation strategy ANSWER: b Feedback: A low-cost leadership strategy is concerned primarily with stability rather than RATIONALE: taking risks or seeking new opportunities for innovation and growth.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-04 - 02-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Two Frameworks for Selecting Strategy and Design KEYWORDS: Bloom’s: Remember 17. In Miles and Snow’s strategy typology, the prospector strategy: a. attempts to maintain a stable business environment by finding a middle ground between stability and innovation.

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b. most closely resembles Porter's low-cost leadership strategy. c. responds to environmental threats in an ad hoc fashion without revealing a clear strategy. d. seeks innovation or risk taking and is therefore best suited to a dynamic environment.

ANSWER: d Feedback: The prospector strategy is to innovate, take risks, seek out new opportunities, and RATIONALE: grow. This strategy is suited to a dynamic, growing environment, where creativity is more important than efficiency.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-04 - 02-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Two Frameworks for Selecting Strategy and Design KEYWORDS: Bloom’s: Understand 18. According to Miles and Snow’s strategy typology, the ____ is concerned with stability or retrenchment. a. defender strategy b. prospector strategy c. differentiation strategy d. innovation strategy ANSWER: a Feedback: The defender strategy is almost the opposite of the prospector. Rather than taking RATIONALE: risks and seeking out new opportunities, the defender strategy is concerned with stability or even retrenchment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-04 - 02-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Two Frameworks for Selecting Strategy and Design KEYWORDS: Bloom’s: Remember 19. According to Miles and Snow’s strategy typology, the ____ tries to maintain a stable business while innovating on the periphery. a. reactor strategy b. prospector strategy c. analyzer strategy d. defender strategy ANSWER: c Feedback: The analyzer strategy tries to maintain a stable business while innovating on the RATIONALE: periphery. It seems to lie midway between the prospector and the defender.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-04 - 02-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Two Frameworks for Selecting Strategy and Design KEYWORDS: Bloom’s: Remember 20. Organizational _____ is the degree to which an organization realizes its goals. a. efficiency b. adaptability c. productivity Cengage Learning Testing, Powered by Cognero

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d. effectiveness ANSWER: RATIONALE:

c Feedback: Organizational effectiveness is the degree to which an organization realizes its goals.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-05 - 02-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Assessing Organizational Effectiveness KEYWORDS: Bloom’s: Remember 21. Organizational effectiveness is a _____, meaning that it is created and defined by an individual or group rather than existing independently in the external world. a. strategic intent b. core competence c. competitive advantage d. social construct ANSWER: d Feedback: Organizational effectiveness is a social construct, meaning that it is created and RATIONALE: defined by an individual or group rather than existing independently in the external world.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-05 - 02-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Assessing Organizational Effectiveness KEYWORDS: Bloom’s: Remember 22. The ____ to organizational effectiveness is concerned with the output side and whether an organization achieves its goals in terms of desired levels of output. a. goal approach b. resource-based approach c. analytical approach d. internal process approach ANSWER: a Feedback: The goal approach to effectiveness consists of identifying an organization’s output RATIONALE: goals and assessing how well the organization has attained those goals. This is a logical approach because organizations do try to attain certain levels of output, profit, or client satisfaction.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-06 - 02-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Four Effectiveness Approaches KEYWORDS: Bloom’s: Remember 23. When using the goal approach to effectiveness, it is best to use ____ goals. a. official b. operating c. strategic d. visionary Cengage Learning Testing, Powered by Cognero

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ANSWER: RATIONALE:

b Feedback: When using the goal approach to effectiveness, it is best to use operating goals, because official goals (mission) tend to be abstract and difficult to measure. Operating goals reflect activities an organization is actually performing.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-06 - 02-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Four Effectiveness Approaches KEYWORDS: Bloom’s: Remember 24. The resource-based approach to effectiveness emphasizes the: a. sales targets of an organization. b. output of an organization. c. achievement of profitability. d. input into an organization.

ANSWER: d Feedback: The resource-based approach looks at the input side of the transformation RATIONALE: process.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-06 - 02-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Four Effectiveness Approaches KEYWORDS: Bloom’s: Remember 25. Which of the following approaches is most likely to be used when one is measuring work climate, group loyalty, and worker-management communication as measures of effectiveness? a. Quality control approach b. External process approach c. Internal process approach d. Stakeholder approach ANSWER: c Feedback: The indicators of internal process approach include a strong, adaptive corporate RATIONALE: culture and positive work climate, confidence and trust between employees and management.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-06 - 02-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Four Effectiveness Approaches KEYWORDS: Bloom’s: Remember 26. The _____ tries to balance a concern with various parts of an organization rather than focusing on one part. a. internal process model b. rational goal model c. open systems model d. competing values model ANSWER: d Feedback: The competing values model tries to balance a concern with various parts of the RATIONALE: organization rather than focusing on one part.

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POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-07 - 02-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: An Integrated Effectiveness Model KEYWORDS: Bloom’s: Remember 27. The two value dimensions of the competing values model are the: a. internal and external environment of an organization. b. low-cost leadership and differentiation strategies. c. focus and structure of an organization. d. productivity strategies of an organization.

ANSWER: c Feedback: The two value dimensions of the competing values model are the focus and RATIONALE: structure of an organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-07 - 02-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: An Integrated Effectiveness Model KEYWORDS: Bloom’s: Remember 28. In the context of the competing values model, a combination of external focus and flexible structure leads to a(n) _____ where management’s primary goals are growth and resource acquisition. a. rational goal emphasis b. open systems emphasis c. internal process emphasis d. human relations emphasis ANSWER: b Feedback: A combination of external focus and flexible structure leads to an open systems RATIONALE: emphasis. Management’s primary goals are growth and resource acquisition.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-07 - 02-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: An Integrated Effectiveness Model KEYWORDS: Bloom’s: Remember 29. Jason is employed at Cloover Inc. At Cloover Inc., management’s primary goals are increasing the ratio of output to input, using the resources used to produce a unit of output efficiently, and generating more revenue than the expenses.

Cloover Inc.’s management values are represented by _____. a. the rational goal emphasis b. the open systems emphasis c. the internal process emphasis d. the human relations emphasis ANSWER: a Feedback: Cloover Inc.’s management values are represented by the rational goal emphasis.

RATIONALE: The rational goal emphasis represents management values of structural control and external focus. The primary goals are productivity, efficiency, and profit.

POINTS:

1

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LEARNING OBJECTIVES: ORGT.DAFT.16.02-07 - 02-07 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: An Integrated Effectiveness Model KEYWORDS: Bloom’s: Apply 30. In the context of the competing values model, the primary outcome of the ____ is a stable organizational setting that maintains itself in an orderly way. a. rational goal emphasis b. open systems emphasis c. internal process emphasis d. human relations emphasis ANSWER: c Feedback: The internal process emphasis reflects the values of internal focus and structural RATIONALE: control. The primary outcome is a stable organizational setting that maintains itself in an orderly way.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-07 - 02-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: An Integrated Effectiveness Model KEYWORDS: Bloom’s: Remember 31. Assessing an organization’s strengths, weaknesses, opportunities, and threats is the first step for any business to achieve its purpose. a. True b. False ANSWER: False Feedback: Managers know that establishing mission, goals, and strategy is the first step for RATIONALE: any business to achieve its purpose.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-01 - 02-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Role of Strategic Direction in Organization Design KEYWORDS: Bloom’s: Remember 32. The direction-setting process typically begins with the administration and execution of the strategic plan. a. True b. False ANSWER: False Feedback: The direction-setting process typically begins with an assessment of the RATIONALE: opportunities and threats in the external environment, including the amount of change, uncertainty, and resource availability.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-01 - 02-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Role of Strategic Direction in Organization Design KEYWORDS: Bloom’s: Remember 33. The overall aim of strategic intent is to help an organization achieve a sustainable competitive advantage.

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a. True b. False ANSWER: RATIONALE:

True Feedback: The overall aim of strategic intent is to help an organization achieve a sustainable competitive advantage.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-02 - 02-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Purpose KEYWORDS: Bloom’s: Remember 34. Operating goals provide direction for day-to-day decisions and activities within departments in an organization. a. True b. False ANSWER: True Feedback: Operating goals typically pertain to the primary tasks an organization must RATIONALE: perform. Specific goals for each primary task provide direction for the day-to-day decisions and activities within departments.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-02 - 02-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Purpose KEYWORDS: Bloom’s: Remember 35. Growth and output volume are examples of overall performance goals. a. True b. False ANSWER: True Feedback: Overall performance goals include growth and output volume. Growth pertains to RATIONALE: increases in sales or profits over time. Volume pertains to total sales or the amount of products or services delivered.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-02 - 02-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Purpose KEYWORDS: Bloom’s: Remember 36. For nonprofit organizations, resource goals might include recruiting dedicated volunteers and expanding the organization’s funding base. a. True b. False ANSWER: True Feedback: For nonprofit organizations, resource goals might include recruiting dedicated RATIONALE: volunteers and expanding the organization’s funding base.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-02 - 02-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Purpose Cengage Learning Testing, Powered by Cognero

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KEYWORDS:

Bloom’s: Remember

37. Innovation and change goals have little importance, even though they initially cause a large increase in profits. a. True b. False ANSWER: False Feedback: Innovation and change goals are increasingly important, even though they may RATIONALE: initially cause a decrease in profits.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-02 - 02-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Purpose KEYWORDS: Bloom’s: Remember 38. In the context of Porter’s strategy model, a differentiation strategy usually targets customers who are particularly concerned with price. a. True b. False ANSWER: False Feedback: A differentiation strategy usually targets customers who are not particularly RATIONALE: concerned with price, so it can be quite profitable.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-04 - 02-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Two Frameworks for Selecting Strategy and Design KEYWORDS: Bloom’s: Understand 39. In the context of Porter’s strategy model, managers take a more organic, learning approach to organization design with a low-cost leadership strategy. a. True b. False ANSWER: False Feedback: With a low-cost leadership strategy, managers take a primarily mechanistic, RATIONALE: efficiency approach to organization design.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-04 - 02-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Two Frameworks for Selecting Strategy and Design KEYWORDS: Bloom’s: Understand 40. According to Miles and Snow’s strategy typology, the prospector strategy is concerned with stability or even retrenchment. a. True b. False ANSWER: False Feedback: The prospector strategy is to innovate, take risks, seek out new opportunities, and RATIONALE: grow.

POINTS:

1

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LEARNING OBJECTIVES: ORGT.DAFT.16.02-04 - 02-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Two Frameworks for Selecting Strategy and Design KEYWORDS: Bloom’s: Understand 41. According to Miles and Snow’s strategy typology, the prospector strategy is suited for an environment where efficiency is more important than creativity. a. True b. False ANSWER: False Feedback: The prospector strategy is suited to a dynamic, growing environment, where RATIONALE: creativity is more important than efficiency.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-04 - 02-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Two Frameworks for Selecting Strategy and Design KEYWORDS: Bloom’s: Understand 42. According to Miles and Snow’s strategy typology, the defender strategy neither innovates nor seeks to grow. a. True b. False ANSWER: True Feedback: Rather than taking risks and seeking out new opportunities, the defender strategy RATIONALE: is concerned with stability or even retrenchment. This strategy seeks to hold on to current customers, but it neither innovates nor seeks to grow.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-04 - 02-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Two Frameworks for Selecting Strategy and Design KEYWORDS: Bloom’s: Understand 43. According to Miles and Snow’s strategy typology, the defender strategy can be successful when an organization exists in a declining industry or a stable environment. a. True b. False ANSWER: True Feedback: According to Miles and Snow’s strategy typology, the defender strategy can be RATIONALE: successful when an organization exists in a declining industry or a stable environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-04 - 02-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Two Frameworks for Selecting Strategy and Design KEYWORDS: Bloom’s: Understand 44. According to Miles and Snow’s strategy typology, top management has defined a long-range plan or given the organization an explicit mission or goal with a reactor strategy. a. True b. False Cengage Learning Testing, Powered by Cognero

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ANSWER: RATIONALE:

False Feedback: With a reactor strategy, top management has not defined a long-range plan or given the organization an explicit mission or goal, so the organization takes whatever actions seem to meet immediate needs.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-04 - 02-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Two Frameworks for Selecting Strategy and Design KEYWORDS: Bloom’s: Understand 45. According to Miles and Snow’s strategy typology, managers have left the organization with no direction and no clear approach to design with a reactor strategy. a. True b. False ANSWER: True Feedback: According to Miles and Snow’s strategy typology, managers have left the RATIONALE: organization with no direction and no clear approach to design with a reactor strategy.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-04 - 02-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Two Frameworks for Selecting Strategy and Design KEYWORDS: Bloom’s: Understand 46. Organizational efficiency is the amount of resources used to produce a unit of output. a. True b. False ANSWER: True Feedback: Organizational efficiency is the amount of resources used to produce a unit of RATIONALE: output. It can be measured as the ratio of inputs to outputs.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-05 - 02-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Assessing Organizational Effectiveness KEYWORDS: Bloom’s: Remember 47. Organizational effectiveness is created and defined by existing independently in the external world. a. True b. False ANSWER: False Feedback: Organizational effectiveness is a social construct, meaning that it is created and RATIONALE: defined by an individual or group rather than existing independently in the external world.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-05 - 02-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Assessing Organizational Effectiveness KEYWORDS: Bloom’s: Remember 48. In the context of the competing values model, the resource-based approach looks at the input side of the Cengage Learning Testing, Powered by Cognero

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transformation process. a. True b. False ANSWER: RATIONALE:

True Feedback: In the context of the competing values model, the resource-based approach looks at the input side of the transformation process.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-06 - 02-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Assessing Organizational Effectiveness KEYWORDS: Bloom’s: Remember 49. In the context of the competing values model, the internal process approach considers external factors while measuring an organization’s health and efficiency. a. True b. False ANSWER: False Feedback: In the internal process approach, effectiveness is measured as internal RATIONALE: organizational health and efficiency. This approach does not consider the external environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-06 - 02-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Assessing Organizational Effectiveness KEYWORDS: Bloom’s: Remember 50. In the context of the competing values model, the internal focus of an organization represents an emphasis on the wellbeing of the organization itself with respect to the environment. a. True b. False ANSWER: False Feedback: In the context of the competing values model, the internal focus reflects a RATIONALE: management concern for the well-being and efficiency of employees.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-06 - 02-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Assessing Organizational Effectiveness KEYWORDS: Bloom’s: Remember 51. In the context of the competing values model, the external focus reflects a management concern for the well-being and efficiency of employees. a. True b. False ANSWER: False Feedback: In the context of the competing values model, the external focus represents an RATIONALE: emphasis on the well-being of an organization with respect to the environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-06 - 02-06 Cengage Learning Testing, Powered by Cognero

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NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Assessing Organizational Effectiveness KEYWORDS: Bloom’s: Remember 52. In the context of the competing values model, the stability dimension reflects a management value for learning and change. a. True b. False ANSWER: False Feedback: In the context of the competing values model, the stability dimension reflects a RATIONALE: management value for efficiency and top-down control.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-06 - 02-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Assessing Organizational Effectiveness KEYWORDS: Bloom’s: Remember 53. In the context of the competing values model, the flexibility dimension reflects a management value for efficiency and top-down control. a. True b. False ANSWER: False Feedback: The flexibility dimension represents a value for learning and change.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-06 - 02-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Assessing Organizational Effectiveness KEYWORDS: Bloom’s: Remember 54. In the context of the competing values model, the rational goal emphasis represents management values of structural control and external focus. a. True b. False ANSWER: True Feedback: In the context of the competing values model, the rational goal emphasis RATIONALE: represents management values of structural control and external focus.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-07 - 02-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Assessing Organizational Effectiveness KEYWORDS: Bloom’s: Remember 55. In the context of the competing values model, the internal process emphasis is more concerned with human resources than with other internal processes that lead to efficiency. a. True b. False ANSWER: False Cengage Learning Testing, Powered by Cognero

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RATIONALE:

Feedback: In the context of the competing values model, the internal process approach is less concerned with human resources than with other internal processes that lead to efficiency.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-07 - 02-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Assessing Organizational Effectiveness KEYWORDS: Bloom’s: Remember 56. Explain the role of top management in an organization and why it is important.

ANSWER: Top executives decide the end purpose an organization will strive for and determine the direction it will take to accomplish it. It is this purpose and direction that shapes how the organization is designed and managed. The primary responsibility of top management is to determine an organization’s goals, strategy, and design, thereby adapting the organization to a changing environment. The direction-setting process typically begins with an assessment of the opportunities and threats in the external environment, including the amount of change, uncertainty, and resource availability. Top managers also assess internal strengths and weaknesses to define the company’s distinctive competence compared with other firms in the industry. This competitive analysis of the internal and external environments is one of the central concepts in strategic management.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-01 - 02-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Role of Strategic Direction in Organization Design KEYWORDS: Bloom’s: Understand 57. Briefly explain an organization’s mission.

ANSWER: The overall goal for an organization is often called the mission—the organization’s reason for existence. The mission describes the organization’s shared values and beliefs and its reason for being. The mission is sometimes called the official goals, which refers to the formally stated definition of business scope and outcomes the organization is trying to achieve. Official goal statements typically define business operations and may focus on values, markets, and customers that distinguish the organization.

Whether called a mission statement or official goals, the organization’s general statement of its purpose and philosophy is often written down in a policy manual or the annual report. One of the primary purposes of a mission statement is to serve as a communication tool. The mission statement communicates to current and prospective employees, customers, investors, suppliers, and competitors what the organization stands for and what it is trying to achieve. A mission statement communicates legitimacy to internal and external stakeholders, who may join and be committed to the organization because they identify with its stated purpose and values. Most top leaders want employees, customers, competitors, suppliers, investors, and the local community to look on the organization in a favorable light, and the concept of legitimacy plays a critical role.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-02 - 02-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Purpose KEYWORDS: Bloom’s: Understand 58. Briefly explain operating goals. List the various operating goals in an organization.

ANSWER: An organization’s mission and overall goals provide a basis for developing more specific Cengage Learning Testing, Powered by Cognero

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operating goals. Operating goals designate the ends sought through the actual operating procedures of the organization and explain what the organization is actually trying to do.

Operating goals describe specific measurable outcomes and are often concerned with the short run. Operating goals typically pertain to the primary tasks an organization must perform. Specific goals for each primary task provide direction for the day-to-day decisions and activities within departments.

Typical operating goals that define what an organization is trying to accomplish include performance goals, resource goals, market goals, employee development goals, productivity goals, and goals for innovation and change.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-02 - 02-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Purpose KEYWORDS: Bloom’s: Understand 59. Explain a hybrid organization with examples.

ANSWER: A hybrid organization is an organization that mixes value systems and behaviors that represent two different sectors of society, which leads to tensions and conflict within the organization over goals and priorities. The goals and values of the two sides are sometimes mutually exclusive, so managers have to negotiate and come to some agreement on which direction the company will take.

Organizations with a social mission, for example, may have to hire business-minded people to sell the organization’s services to provide additional income. The business-minded employees stress goals of sales, revenue, and efficiency while public service-minded employees stress goals of sacrifice and meeting social needs. When social welfare organizations have to achieve their social mission through commercial activities, managers are often caught between competing demands of market and social welfare mindsets. One group may champion for-profit priorities and the other champions the contribution to social needs. Another example of a hybrid organization is a biotechnology company that incorporates goals and mindsets of both bias-free scientific research for the sake of new knowledge versus research to develop and market potentially lucrative products. These differences in goal orientation can trigger manipulation, avoidance, or defiance on the part of one side versus the other unless managers can balance the conflicting demands.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-02 - 02-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Purpose KEYWORDS: Bloom’s: Understand 60. Quebecor Printing is a commercial printing company that is expanding, acquiring ailing printing companies, and moving into international markets. They have completed more than 100 mergers and buyouts since 1972 and have focused on customized service by using "selective binding" to print. Apply strategies from Porter's model to make Quebecor Printing’s business more profitable.

ANSWER: Michael E. Porter studied a number of business organizations and proposed that managers can make an organization more profitable and less vulnerable by adopting either a differentiation strategy or a low-cost leadership strategy. Using a low-cost leadership strategy means managers choose to compete through lower costs, whereas with a differentiation strategy the organization competes through the ability to offer unique or distinctive products and services that can command a premium price. Quebecor Printing can formulate strategies to offer low-cost printing solutions to its customers. The company can formulate a differentiation strategy by focusing on the “selective binding” feature as a key product feature that sets its product apart from that of its rivals.

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POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-04 - 02-04 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Two Frameworks for Selecting Strategy and Design KEYWORDS: Bloom’s: Apply 61. Describe Miles and Snow’s strategy typology.

ANSWER: The Miles and Snow typology is based on the idea that managers seek to formulate strategies that will be congruent with the external environment. Organizations strive for a fit among internal organization characteristics, strategy, and the external environment. The four strategies that can be developed are the prospector, the defender, the analyzer, and the reactor. ∙ Prospector: The prospector strategy is to innovate, take risks, seek out new opportunities, and grow. This strategy is suited to a dynamic, growing environment, where creativity is more important than efficiency. ∙ Defender: The defender strategy is almost the opposite of the prospector. Rather than taking risks and seeking out new opportunities, the defender strategy is concerned with stability or even retrenchment. ∙ Analyzer: The analyzer tries to maintain a stable business while innovating on the periphery. It seems to lie midway between the prospector and the defender. ∙ Reactor: The reactor strategy is not really a strategy at all. Rather, reactors respond to environmental threats and opportunities in an ad hoc fashion. With a reactor strategy, top management has not defined a long-range plan or given the organization an explicit mission or goal, so the organization takes whatever actions seem to meet immediate needs.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-04 - 02-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Two Frameworks for Selecting Strategy and Design KEYWORDS: Bloom’s: Understand 62. Describe the goal approach to measure effectiveness.

ANSWER: The goal approach to effectiveness consists of identifying an organization’s output goals and assessing how well the organization has attained those goals. This is a logical approach because organizations do try to attain certain levels of output, profit, or client satisfaction.

Indicators tracked with the goal approach include: ∙ Profitability—the positive gain from business operations or investments after expenses are subtracted. ∙ Market share—the proportion of the market the firm is able to capture relative to competitors. ∙ Growth—the ability of the organization to increase its sales, profits, or client base over time. ∙ Social responsibility—how well the organization serves the interests of society as well as itself. ∙ Product quality—the ability of the organization to achieve high quality in its products or services.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-06 - 02-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Four Effectiveness Approaches KEYWORDS: Bloom’s: Understand Cengage Learning Testing, Powered by Cognero

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63. Explain the resource-based approach to measure effectiveness. List the various indicators that can be tracked with the resource-based approach.

ANSWER: The resource-based approach looks at the input side of the transformation process. It assumes organizations must be successful in obtaining and managing valued resources in order to be effective because strategically valuable resources give an organization a competitive edge.

From a resource-based perspective, organizational effectiveness is defined as the ability of the organization, in either absolute or relative terms, to obtain scarce and valued resources and successfully integrate and manage them.

In a broad sense, resource indicators of effectiveness encompass the following dimensions: ∙ Bargaining position—the ability of the organization to obtain from its environment scarce and valued resources, including tangible resources such as a prime location, financing, raw materials, and quality employees, and intangible assets such as a strong brand or superior knowledge. ∙ The abilities of the organization’s decision makers to perceive and correctly interpret the real properties of the external environment and supply forces. ∙ The abilities of managers to use tangible (e.g., supplies, people) and intangible ∙ (e.g., knowledge, corporate culture) resources and capabilities in day-to-day organizational activities to achieve superior performance. ∙ The ability of the organization to respond to changes in resource sectors of the environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-06 - 02-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Four Effectiveness Approaches KEYWORDS: Bloom’s: Understand 64. Write a brief note on the internal process approach.

ANSWER: In the internal process approach, effectiveness is measured as internal organizational health and efficiency. An effective organization has a smooth, well-oiled internal process.

Employees are happy and satisfied. Department activities mesh with one another to ensure high productivity. This approach does not consider the external environment. The important element in effectiveness is what the organization does with the resources it has, as reflected in internal health and efficiency.

Internal process indicators include: ∙ A strong, adaptive corporate culture and positive work climate ∙ Confidence and trust between employees and management ∙ Operational efficiency, such as using minimal resources to achieve outcomes ∙ Undistorted horizontal and vertical communication ∙ Growth and development of employees ∙ Coordination among the organization’s parts, with conflicts resolved in the interest of the larger organization POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-06 - 02-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Four Effectiveness Approaches KEYWORDS: Bloom’s: Understand 65. In the context of the competing values model, explain the four approaches to effectiveness values.

ANSWER: The combination of dimensions provides four approaches to organizational effectiveness, which, though seemingly different, are closely related. In real organizations, these competing values can and often do exist together. Each approach reflects a different management emphasis with respect to structure and focus.

A combination of external focus and flexible structure leads to an open systems emphasis.

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Management’s primary goals are growth and resource acquisition. The organization accomplishes these goals through the subgoals of flexibility, readiness, and a positive external evaluation.

The rational goal emphasis represents management values of structural control and external focus. The primary goals are productivity, efficiency, and profit. The organization wants to achieve output goals in a controlled way. Subgoals that facilitate these outcomes are internal planning and goal setting, which are rational management tools.

The internal process emphasis reflects the values of internal focus and structural control. The primary outcome is a stable organizational setting that maintains itself in an orderly way.

Organizations that are well established in the environment and simply want to maintain their current position would reflect this emphasis. Subgoals include mechanisms for efficient communication, information management, and decision making.

The human relations emphasis incorporates the values of an internal focus and a flexible structure. Here, management concern is for the development of human resources. Employees are given opportunities for autonomy and development. Management works toward the subgoals of cohesion, morale, and training opportunities. Organizations adopting this emphasis are more concerned with employees than with the environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.02-07 - 02-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Four Effectiveness Approaches KEYWORDS: Bloom’s: Understand

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1. Which of the following is not a key component in the definition of organization structure? a. Organization structure includes the design systems to ensure effective communication, coordination, and integration of effort across departments. b. Organization structure identifies the tasks, functions, and processes for each department and position within the organization. c. Organization structure identifies the grouping together of individuals into departments and of departments into the total organization. d. Organization structure designates formal reporting relationships, including the number of levels in the hierarchy and the span of control of managers and supervisors.

ANSWER: b Feedback: The following three key components define organization structure: 1. Organization RATIONALE: structure designates formal reporting relationships, including the number of levels in the hierarchy and the span of control of managers and supervisors. 2. Organization structure identifies the grouping together of individuals into departments and of departments into the total organization. 3. Organization structure includes the design of systems to ensure effective communication, coordination, and integration of efforts across departments.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-01 - 03-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Structure KEYWORDS: Bloom’s: Remember 2. Organization structure identifies the grouping together of individuals into departments and of departments into the total organization.

3. Organization structure includes the design of systems to ensure effective communication, coordination, and integration of efforts across departments.

2. Which of the following is true of effective information sharing in an organization? a. Information should be shared vertically, but not horizontally. b. Vertical linkages are designed primarily for coordination and collaboration. c. The structure should fit the information requirements of the organization. d. It is not possible to give people a lot of information.

ANSWER: c Feedback: If the structure does not fit the information requirements of the organization, RATIONALE: people either will have too little information or will spend time processing information that is not vital to their tasks, thus reducing effectiveness.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-02 - 03-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Understand 3. _____ means that decision authority is located near the top of the organization. a. Centralization b. Decentralization c. Joint collaboration d. Horizontal linkage ANSWER: a Feedback: Centralization and decentralization pertain to the hierarchical level at which RATIONALE: Cengage Learning Testing, Powered by Cognero

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decisions are made. Centralization means that decision authority is located near the top of the organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-02 - 03-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Remember 4. With _____, decision authority is pushed downward to lower organization levels. a. centralization b. decentralization c. full-time integration d. task forces ANSWER: b Feedback: Centralization and decentralization pertain to the hierarchical level at which RATIONALE: decisions are made. With decentralization, decision authority is pushed downward to lower organization levels.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-02 - 03-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Remember 5. _____ are used to coordinate activities between the top and bottom of an organization and are designed primarily for control of the organization. a. Vertical linkages b. Functional groups c. Horizontal linkages d. Divisional groups ANSWER: a Feedback: Vertical linkages are used to coordinate activities between the top and bottom of RATIONALE: an organization and are designed primarily for control of the organization. Organizations may use any of a variety of structural devices to achieve vertical linkage, including hierarchical referral, rules and plans, and formal management information systems.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-02 - 03-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Remember 6. Which of the following strategies includes periodic reports, written information, and computer-based communications? a. Rules and plans b. Task forces c. Vertical information systems d. Hierarchical referral ANSWER: c Feedback: A vertical information system is a strategy for increasing vertical information RATIONALE: capacity. Vertical information systems include the periodic reports, written information, and Cengage Learning Testing, Powered by Cognero

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computer-based communications distributed to managers.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-02 - 03-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Remember 7. A liaison role exists when: a. there is direct contact between managers affected by a problem. b. there is an exchange of paperwork during a hiring process. c. a temporary committee composed of representatives from each department affected by a problem is formed. d. a person located in one department has the responsibility for communicating and achieving coordination with another department.

ANSWER: d Feedback: One way to promote direct contact is to create a special liaison role. A liaison RATIONALE: person is located in one department but has the responsibility for communicating and achieving coordination and collaboration with another department.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-02 - 03-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Understand 8. Brian is the brand manager for Bake ‘n Bite Pastries. His job requires him to coordinate several aspects of the brand, right from the design to the distribution of the product. Although he does not report to any of the teams being coordinated, he still plays an active role in managing the product. In the context of horizontal linkages, Brian is _____. a. a liaison b. a full-time integrator c. the head of a task force d. a team leader ANSWER: b Feedback: Brian is a full-time integrator. A full-time integrator frequently has a title, such as RATIONALE: product manager, project manager, program manager, or brand manager. Unlike a liaison person, the integrator does not report to one of the functional departments being coordinated.

He or she is located outside the departments and has the responsibility for coordinating several departments.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-03 - 03-03 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Apply 9. A full-time integrator: a. improves vertical linkages in an organization. b. has a title such as brand manage or product manager. c. reports to one of the functional departments being coordinated. d. has the responsibility of coordinating only one department.

ANSWER: b Cengage Learning Testing, Powered by Cognero

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RATIONALE:

Feedback: A stronger horizontal linkage device is to create a full-time position or department solely for the purpose of coordination. A full-time integrator frequently has a title, such as product manager, project manager, program manager, or brand manager.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-03 - 03-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Understand 10. Which of the following is true of full-time integrators? a. They have a lot of authority but little responsibility. b. They communicate with and are responsible for one department. c. They need excellent people skills. d. They are usually a part of the team being coordinated.

ANSWER: c Feedback: Integrators need excellent people skills. Integrators in most companies have a lot RATIONALE: of responsibility but little authority.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-03 - 03-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Understand 11. Which of the following is true of teams? a. Teams tend to be the weakest horizontal linkage mechanism. b. Teams are the first device in a variety of structural devices to achieve vertical linkage. c. Teams provide a standard information source enabling employees to be coordinated without actually communicating about every task. d. Teams are often used in conjunction with a fulltime integrator.

ANSWER: d Feedback: Teams are permanent task forces and are often used in conjunction with a fulltime RATIONALE: integrator.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-03 - 03-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Understand 12. A(n) _____ is a group that is made up of organizationally or geographically dispersed members who are linked primarily through advanced information and communications technologies. a. vertical linkage b. functional department c. organizational committee d. virtual team ANSWER: d Feedback: Many of today’s companies use virtual cross-functional teams. A virtual team is RATIONALE: one that is made up of organizationally or geographically dispersed members who are linked primarily through advanced information and communications technologies.

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POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-03 - 03-03 NATIONAL STANDARDS: United States - AACSB: Communication TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Remember 13. The highest level of horizontal coordination is: a. relational coordination. b. departmental grouping. c. hierarchical referral. d. functional grouping.

ANSWER: a Feedback: The highest level of horizontal coordination is relational coordination. Relational RATIONALE:

coordination refers to “frequent, timely, problem-solving communication carried out through relationships of shared goals, shared knowledge, and mutual respect.”

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-03 - 03-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Remember 14. _____ refers to frequent, timely, problem-solving communication carried out through relationships of shared goals, shared knowledge, and mutual respect. a. Relational coordination b. Departmental grouping c. Hierarchical referral d. Functional grouping ANSWER: a Feedback: The highest level of horizontal coordination is relational coordination. Relational RATIONALE:

coordination refers to “frequent, timely, problem-solving communication carried out through relationships of shared goals, shared knowledge, and mutual respect.”

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-03 - 03-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Remember 15. Which of the following is true of relational coordination? a. Relational coordination is the lowest level of horizontal coordination. b. Relational coordination is the first device in the variety of structural devices to achieve vertical linkage. c. Relational coordination provides a standard information source enabling employees to be coordinated without actually communicating about every task. d. Relational coordination is not a device or mechanism like other elements, but rather is part of the very fabric and culture of the organization.

ANSWER: d Feedback: The highest level of horizontal coordination is relational coordination. Relational RATIONALE: coordination is not a device or mechanism like other elements, but rather is part of the very fabric and culture of the organization.

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POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-03 - 03-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Understand 16. The overall design of organization structure indicates all of the following except: a. work activities. b. reporting relationships. c. departmental groupings. d. information systems.

ANSWER: d Feedback: The overall design of organization structure indicates three things: required work RATIONALE: activities, reporting relationships, and departmental groupings.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03.04 - 03.04 NATIONAL STANDARDS: United States - AACSB: TOPICS: Organization Design Alternatives KEYWORDS: Bloom’s: 17. _____ places together employees who perform similar functions or work processes or who bring similar knowledge and skills to bear. a. Functional grouping b. Divisional grouping c. Multifocused grouping d. Horizontal grouping ANSWER: a Feedback: Functional grouping places together employees who perform similar functions or RATIONALE: work processes or who bring similar knowledge and skills to bear. For example, all marketing people work together under the same supervisor, as do all manufacturing employees, all human resources people, and all engineers.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-04 - 03-04 NATIONAL STANDARDS: United States - AACSB: TOPICS: Organization Design Alternatives KEYWORDS: Bloom’s: 18. _____ means people are organized according to what the organization produces. a. Functional grouping b. Divisional grouping c. Multifocused grouping d. Horizontal grouping ANSWER: b Feedback: Divisional grouping means people are organized according to what the RATIONALE: organization produces. For example, all the people required to produce toothpaste—including personnel in marketing, manufacturing, and sales—are grouped together under one executive.

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LEARNING OBJECTIVES: ORGT.DAFT.16.03-04 - 03-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design Alternatives KEYWORDS: Bloom’s: Remember 19. _____ means an organization embraces two or more structural grouping alternatives simultaneously. a. Functional grouping b. Divisional grouping c. Multifocused grouping d. Horizontal grouping ANSWER: c Feedback: Multifocused grouping means an organization embraces two or more structural RATIONALE: grouping alternatives simultaneously. These structural forms are often called matrix or hybrid.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-04 - 03-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design Alternatives KEYWORDS: Bloom’s: Remember 20. _____ means employees are organized around core work processes, the end-to-end work, information, and material flows that provide value directly to customers. a. Functional grouping b. Divisional grouping c. Multifocused grouping d. Horizontal grouping ANSWER: d Feedback: Horizontal grouping means employees are organized around core work RATIONALE: processes, the end-to-end work, information, and material flows that provide value directly to customers. All the people who work on a core process are brought together in a group rather than being separated into functional departments.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-04 - 03-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design Alternatives KEYWORDS: Bloom’s: Remember 21. In _____, departments are separate organizations that are electronically connected for the sharing of information and completion of tasks. a. functional grouping b. virtual network grouping c. divisional grouping d. horizontal grouping ANSWER: a Feedback: With virtual network grouping, the organization is a loosely connected cluster of RATIONALE: separate components. In essence, departments are separate organizations that are electronically connected for the sharing of information and completion of tasks.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-04 - 03-04 Cengage Learning Testing, Powered by Cognero

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NATIONAL STANDARDS: United States - AACSB: TOPICS: Organization Design Alternatives KEYWORDS: Bloom’s: 22. In a _____, activities are grouped together by common function from the bottom to the top of the organization. a. functional structure b. divisional structure c. geographic structure d. hybrid structure ANSWER: a Feedback: Functional grouping and divisional grouping are the two most common RATIONALE: approaches to structural design. In a functional structure, also called a U-form (unitary), activities are grouped together by common function from the bottom to the top of the organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-04 - 03-04 NATIONAL STANDARDS: United States - AACSB: TOPICS: Functional, Divisional, and Geographic Designs KEYWORDS: Bloom’s: 23. Which of the following is a strength of a functional structure? a. It has fast response time to environmental changes. b. It leads to excellent horizontal coordination among departments. c. It results in more innovation. d. It allows economies of scale within functional departments.

ANSWER: d Feedback: One of the strengths of a functional structure is that it allows economies of scale RATIONALE: within functional departments. Also, it enables organization to accomplish functional goals.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-05 - 03-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Functional, Divisional, and Geographic Designs KEYWORDS: Bloom’s: Understand 24. Which of the following is a weakness of a functional structure? a. It has slow response time to environmental changes. b. It restricts economies of scale within functional departments. c. It restricts in-depth knowledge and skill development. d. It restricts organizations from accomplishing functional goals.

ANSWER: a Feedback: One of the weaknesses of a functional structure is that it has slow response time RATIONALE: to environmental changes. It also leads to poor horizontal coordination among departments.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-05 - 03-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Functional, Divisional, and Geographic Designs KEYWORDS: Bloom’s: Understand Cengage Learning Testing, Powered by Cognero

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25. Which of the following is true of a functional structure? a. It reacts quickly to environmental changes. b. It has a strong need for horizontal coordination. c. It often results in hierarchy overload. d. It cannot work in small organizations.

ANSWER: c Feedback: The main weakness of the functional structure is a slow response to RATIONALE: environmental changes that require coordination across departments. The vertical hierarchy becomes overloaded.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-05 - 03-05 NATIONAL STANDARDS: United States - AACSB: TOPICS: Functional, Divisional, and Geographic Designs KEYWORDS: Bloom’s: 26. With a _____, separate divisions can be organized with responsibility for individual products, services, product groups, major projects or programs, divisions, businesses, or profit centers. a. functional structure b. divisional structure c. geographic structure d. hybrid structure ANSWER: b Feedback: With a divisional structure, also called an M-form (multidivisional) or a RATIONALE: decentralized form, separate divisions can be organized with responsibility for individual products, services, product groups, major projects or programs, divisions, businesses, or profit centers. This structure is sometimes also called a product structure or strategic business unit structure.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-04 - 03-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Functional, Divisional, and Geographic Designs KEYWORDS: Bloom’s: Remember 27. Which of the following is true of a divisional structure? a. It is also known as chain of command. b. It is also called a U-form (unitary) structure. c. It is a centralized structural form. d. It is used to promote flexibility and change.

ANSWER: d Feedback: The divisional structure promotes flexibility and change because each unit is RATIONALE: smaller than in the functional structure and can adapt to the needs of its environment.

Moreover, the divisional structure decentralizes decision making because the lines of authority converge at a lower level in the hierarchy.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-04 - 03-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Functional, Divisional, and Geographic Designs Cengage Learning Testing, Powered by Cognero

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KEYWORDS:

Bloom’s: Understand

28. The matrix structure is the correct structure when three conditions are met. Which of the following is one of these three conditions? a. Pressure exists to share scarce resources across product lines. b. Technical quality is not very important. c. The environmental domain of the organization is simple. d. The environmental domain of the organization is certain and stable.

ANSWER: a Feedback: A dual hierarchy may seem an unusual way to design an organization, but the RATIONALE: matrix is the correct structure when the following conditions are present: ∙ Condition 1. Pressure exists to share scarce resources across product lines. ∙ Condition 2.

Environmental pressure exists for two or more critical outputs, such as for in-depth technical knowledge (functional structure) and frequent new products (divisional structure). ∙ Condition 3. The environmental domain of the organization is both complex and uncertain.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03.04 - 03.04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Matrix Structure KEYWORDS: Bloom’s: Remember 29. The term _____ means the redesign of a vertical organization along its horizontal workflows and processes. a. vertical linkage b. vertical network grouping c. innovating d. reengineering ANSWER: d Feedback: Organizations typically shift toward a horizontal structure during a procedure RATIONALE: called reengineering. Reengineering, or business process reengineering, basically means the redesign of a vertical organization along its horizontal workflows and processes.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-06 - 03-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Horizontal Structure KEYWORDS: Bloom’s: Remember 30. Which of the following is not a symptom of structural deficiency? a. Decision making is delayed or lacking quality. b. The organization does not respond innovatively to a changing environment. c. There is an absence of collaboration among units. d. Employees begin to resign in large numbers.

ANSWER: d Feedback: All the other three are symptoms of structural deficiency except employees feeling RATIONALE: depressed and lacking motivation.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-07 - 03-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Applications of Structural Design Cengage Learning Testing, Powered by Cognero

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KEYWORDS:

Bloom’s: Remember

31. An organization chart is the visual representation of a whole set of underlying activities and processes in an organization. a. True b. False ANSWER: True Feedback: The organization chart is the visual representation of a whole set of underlying RATIONALE: activities and processes in an organization. Organization structure is reflected in the organization chart.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-01 - 03-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Structure KEYWORDS: Bloom’s: Remember 32. The purpose of the organization chart is to encourage and direct employees into activities and communications that enable the organization to achieve its goals. a. True b. False ANSWER: True Feedback: The purpose of the organization chart is to encourage and direct employees into RATIONALE: activities and communications that enable the organization to achieve its goals. The organization chart provides the structure, but employees provide the behavior.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-01 - 03-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Structures KEYWORDS: Bloom’s: Understand 33. Emphasis on learning and adaptation is associated with centralized decision making. a. True b. False ANSWER: False Feedback: Emphasis on learning and adaptation is associated with shared tasks; a relaxed RATIONALE: hierarchy; few rules; face-to-face communication; many teams and task forces; and informal, decentralized decision making.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-02 - 03-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Understand 34. Managers create information linkages to facilitate communication and coordination among organizational elements. a. True b. False ANSWER: True Feedback: Organization design should facilitate the communication among employees and RATIONALE: Cengage Learning Testing, Powered by Cognero

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departments that is necessary to accomplish the organization’s overall task. Managers create information linkages to facilitate communication and coordination among organizational elements.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-02 - 03-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Understand 35. A task force personnel is located in one department but has the responsibility for communicating and achieving coordination with another department. a. True b. False ANSWER: False Feedback: A liaison person is located in one department but has the responsibility for RATIONALE: communicating and achieving coordination and collaboration with another department. For example, liaison roles often exist between engineering and manufacturing departments because engineering has to develop and test products to fit the limitations of manufacturing facilities.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-03 - 03-03 NATIONAL STANDARDS: United States - AACSB: Communication TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Understand 36. Integrators need excellent people skills. a. True b. False ANSWER: True Feedback: Integrators need excellent people skills. Integrators in most companies have a lot RATIONALE: of responsibility but little authority.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-03 - 03-03 NATIONAL STANDARDS: United States - AACSB: Communication TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Understand 37. Integrators have a lot of authority. a. True b. False ANSWER: False Feedback: Integrators need excellent people skills. Integrators in most companies have a lot RATIONALE: of responsibility but little authority.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-03 - 03-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Understand Cengage Learning Testing, Powered by Cognero

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38. Project teams are permanent task forces. a. True b. False ANSWER: True Feedback: Teams are permanent task forces and are often used in conjunction with a fulltime RATIONALE: integrator.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-03 - 03-03 NATIONAL STANDARDS: United States - AACSB: TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: 39. Teams are never used in conjunction with a fulltime integrator. a. True b. False ANSWER: False Feedback: Teams are permanent task forces and are often used in conjunction with a fulltime RATIONALE: integrator.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-03 - 03-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Understand 40. The lowest level of horizontal coordination is relational coordination. a. True b. False ANSWER: False Feedback: The highest level of horizontal coordination is relational coordination. Relational RATIONALE:

coordination refers to “frequent, timely, problem-solving communication carried out through relationships of shared goals, shared knowledge, and mutual respect.”

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-03 - 03-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Remember 41. As organizations grow larger, and more complex, managers find that less functions need to be performed for company's growth. a. True b. False ANSWER: False Feedback: As organizations grow larger and more complex, managers find that more RATIONALE: functions need to be performed. Organizations typically define new positions, departments, or divisions as a way to accomplish new tasks deemed valuable by the organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-04 - 03-04 Cengage Learning Testing, Powered by Cognero

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NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design Alternatives KEYWORDS: Bloom’s: Understand 42. Alternatives for grouping employees and departments into overall structural design include functional grouping, divisional grouping, multifocused grouping, horizontal grouping, and virtual network grouping. a. True b. False ANSWER: True Feedback: Alternatives for grouping employees and departments into overall structural RATIONALE: design include functional grouping, divisional grouping, multifocused grouping, horizontal grouping, and virtual network grouping. The choice among functional, divisional, and horizontal structures determines where coordination and integration will be greatest.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-04 - 03-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design Alternatives KEYWORDS: Bloom’s: Understand 43. For the organization to be effective, departments should be located together in one geographic location rather than being spread all over the world. a. True b. False ANSWER: False Feedback: Virtual network grouping is the most recent approach to departmental grouping.

RATIONALE: Departments can be spread all over the world rather than located together in one geographic location.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-04 - 03-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design Alternatives KEYWORDS: Bloom’s: Understand 44. A functional structure is also called an M-form (multidivisional) structure. a. True b. False ANSWER: False Feedback: In a functional structure, also called a U-form (unitary), activities are grouped RATIONALE: together by common function from the bottom to the top of the organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-04 - 03-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Functional, Divisional, and Geographic Designs KEYWORDS: Bloom’s: Remember 45. A weakness of functional structures is that they seldom enable in-depth knowledge and skill development. a. True b. False Cengage Learning Testing, Powered by Cognero

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ANSWER: RATIONALE:

False Feedback: One of the strengths of functional structures is that they enable in-depth knowledge and skill development.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-05 - 03-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Functional, Divisional, and Geographic Designs KEYWORDS: Bloom’s: Understand 46. The distinctive feature of a divisional structure is that grouping is based on organizational outputs. a. True b. False ANSWER: True Feedback: The distinctive feature of a divisional structure is that grouping is based on RATIONALE: organizational outputs. This structure is sometimes also called a product structure or strategic business unit structure.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-05 - 03-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Functional, Divisional, and Geographic Designs KEYWORDS: Bloom’s: Understand 47. Divisional structures are centralized, while functional structures are decentralized. a. True b. False ANSWER: False Feedback: The divisional structure decentralizes decision making because the lines of RATIONALE: authority converge at a lower level in the hierarchy. The functional structure, by contrast, is centralized because it forces decisions all the way to the top before a problem affecting several functions can be resolved.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-04 - 03-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Functional, Divisional, and Geographic Designs KEYWORDS: Bloom’s: Understand 48. An advantage of the divisional structure is that coordination across functions is excellent. a. True b. False ANSWER: True Feedback: The divisional structure has several strengths. Coordination across functions is RATIONALE: excellent.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-05 - 03-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Functional, Divisional, and Geographic Designs KEYWORDS: Bloom’s: Understand Cengage Learning Testing, Powered by Cognero

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49. The strengths and weaknesses of a geographic divisional structure are similar to the divisional organization characteristics. a. True b. False ANSWER: True Feedback: The strengths and weaknesses of a geographic divisional structure are similar to RATIONALE: the divisional organization characteristics. Horizontal coordination within a region is emphasized rather than linkages across regions or to the national office.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-05 - 03-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Functional, Divisional, and Geographic Designs KEYWORDS: Bloom’s: Understand 50. When functional and divisional structures do not work for a particular function or product, then matrix structure will not work either. a. True b. False ANSWER: False Feedback: The matrix structure often is the answer when organizations find that the RATIONALE: functional, divisional, and geographic structures combined with horizontal linkage mechanisms will not work. The matrix is a strong form of horizontal linkage.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-04 - 03-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Matrix Structure KEYWORDS: Bloom’s: Understand 51. There are two variations of matrix structure: the geographic matrix and the divisional matrix. a. True b. False ANSWER: False Feedback: Many companies have found a balanced matrix hard to implement and maintain RATIONALE: because one side of the authority structure often dominates. As a consequence, two variations of matrix structure have evolved—the functional matrix and the product matrix.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-04 - 03-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Matrix Structure KEYWORDS: Bloom’s: Remember 52. The matrix structure is best when environmental change is high and when goals reflect a dual requirement. a. True b. False ANSWER: True Feedback: The matrix structure is best when environmental change is high and when goals RATIONALE: reflect a dual requirement, such as for both product and functional goals.

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LEARNING OBJECTIVES: ORGT.DAFT.16.03-05 - 03-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Matrix Structure KEYWORDS: Bloom’s: Understand 53. One disadvantage of the matrix is that some employees experience dual authority, reporting to two bosses and sometimes juggling conflicting demands. a. True b. False ANSWER: True Feedback: One disadvantage of the matrix is that some employees experience dual RATIONALE: authority, reporting to two bosses and sometimes juggling conflicting demands. This can be frustrating and confusing, especially if roles and responsibilities are not clearly defined by top managers.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-05 - 03-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Matrix Structure KEYWORDS: Bloom’s: Understand 54. The horizontal structure organizes employees around core processes. a. True b. False ANSWER: True Feedback: A recent approach to organizing is the horizontal structure, which organizes RATIONALE: employees around core processes.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-06 - 03-06 NATIONAL STANDARDS: United States - AACSB: TOPICS: Horizontal Structure KEYWORDS: Bloom’s: 55. The biggest strength of virtual network structures is that managers have hands-on control over every activity and employee. a. True b. False ANSWER: False Feedback: One of the weaknesses of virtual network structures is that managers do not have RATIONALE: hands-on control over many activities and employees.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-06 - 03-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Virtual Networks and Outsourcing KEYWORDS: Bloom’s: Understand 56. Explain the three components that define organizational structure.

ANSWER: The following three key components define organization structure: 1. Organization structure designates formal reporting relationships, including the number of Cengage Learning Testing, Powered by Cognero

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levels in the hierarchy and the span of control of managers and supervisors.

2. Organization structure identifies the grouping together of individuals into departments and of departments into the total organization.

3. Organization structure includes the design of systems to ensure effective communication, coordination, and integration of efforts across departments.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-01 - 03-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Structure KEYWORDS: Bloom’s: Remember 57. What do organizational charts reflect?

ANSWER: Organization structure is reflected in the organization chart. It is not possible to see the internal structure of an organization the way we might see its manufacturing tools, offices, website, or products. Although we might see employees going about their duties, performing different tasks, and working in different locations, the only way to actually see the structure underlying all this activity is through the organization chart. The organization chart is the visual representation of a whole set of underlying activities and processes in an organization.

An organizational chart can be quite useful in understanding how a company works. It shows the various parts of an organization, how they are interrelated, and how each position and department fits into the whole.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-01 - 03-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Structure KEYWORDS: Bloom’s: Understand 58. Discuss how rules and plans can be used to achieve vertical linkage.

ANSWER: To the extent that problems and decisions are repetitious, a rule or procedure can be established so employees know how to respond without communicating directly with their manager. Rules and procedures provide a standard information source enabling employees to be coordinated without actually communicating about every task. At PepsiCo’s Gemesa cookie business in Mexico, for example, managers carefully brief production workers on goals, processes, and procedures so that employees themselves do most of the work of keeping the production process running smoothly, enabling the plants to operate with fewer managers. Plans also provide standing information for employees. The most widely used plan is the budget. With carefully designed and communicated budget plans, employees at lower levels can be left on their own to perform activities within their resource allotment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-02 - 03-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Understand 59. Explain collaboration with an example.

ANSWER: Collaboration means a joint effort between people from two or more departments to produce outcomes that meet a common goal or shared purpose and that are typically greater than what any of the individuals or departments could achieve working alone. To understand the value of collaboration, consider the 2011 U.S. mission to raid Osama bin Laden’s compound in Pakistan. The raid could not have succeeded without close collaboration between the Central Cengage Learning Testing, Powered by Cognero

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Intelligence Agency (CIA) and the U.S. military. There has traditionally been little interaction between the nation’s intelligence officers and its military officers, but the war on terrorism has changed that mindset. During planning for the bin Laden mission, military officers spent every day for months working closely with the CIA team in a remote, secure facility on the CIA campus. “This is the kind of thing that, in the past, people who watched movies thought was possible, but no one in the government thought was possible,” one official later said of the collaborative mission.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-02 - 03-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Understand 60. Compare liaison roles with task forces.

ANSWER: A liaison role is one of the devices used to achieve horizontal linkage. A liaison person is located in one department but has the responsibility for communicating and achieving coordination and collaboration with another department. Liaison roles often exist between engineering and manufacturing departments because engineering has to develop and test products to fit the limitations of manufacturing facilities. An engineer’s office might be located in the manufacturing area so the engineer is readily available for discussions with manufacturing supervisors about engineering problems with the manufactured products. A research and development person might sit in on sales meetings to coordinate new product development with what sales people think customers are wanting.

Liaison roles usually link only two departments. When linkage involves several departments, a more complex device such as a task force is required. A task force is a temporary committee composed of representatives from each organizational unit affected by a problem.

Each member represents the interest of a department or division and can carry information from the meeting back to that department. Task forces are an effective horizontal linkage device for temporary issues. They solve problems by direct horizontal collaboration and reduce the information load on the vertical hierarchy. Typically, they are disbanded after their tasks are accomplished. Organizations have used task forces for everything from organizing the annual company picnic to solving expensive and complex manufacturing problems. One example comes from Georgetown Preparatory School in North Bethesda, Maryland, which used a task force made up of teachers, administrators, coaches, support staff, and outside consultants to develop a flu preparedness plan. When the H1N1 flu threat hit several years ago, Georgetown was much better equipped than most educational institutions to deal with the crisis because they had a plan in place.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-03 - 03-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Understand 61. Discuss the role of a full time integrator.

ANSWER: The position of a full-time integrator was created solely for the purpose of coordination. A full-time integrator frequently has a title, such as product manager, project manager, program manager, or brand manager. Unlike a liaison person, the integrator does not report to one of the functional departments being coordinated. He or she is located outside the departments and has the responsibility for coordinating several departments. The brand manager for Planters Peanuts, for example, coordinates the sales, distribution, and advertising for that product. The integrator can also be responsible for an innovation or change project, such as coordinating the design, financing, and marketing of a new product. Integrators need Cengage Learning Testing, Powered by Cognero

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excellent people skills. Integrators in most companies have a lot of responsibility but little authority. The integrator has to use expertise and persuasion to achieve coordination. He or she spans the boundary between departments and must be able to get people together, maintain their trust, confront problems, and resolve conflicts and disputes in the interest of the organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-03 - 03-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information-Sharing Perspective on Structure KEYWORDS: Bloom’s: Remember 62. Compare divisional grouping with multifocused grouping.

ANSWER: Divisional grouping means people are organized according to what the organization produces. All the people required to produce toothpaste—including personnel in marketing, manufacturing, and sales—are grouped together under one executive. In huge corporations, such as Time Warner Corporation, some product or service lines may represent independent businesses, such as Warner Brothers Entertainment (movies and videos), Time Inc. (publisher of magazines such as Sports Illustrated, Time, and People), and Turner Broadcasting (cable television networks).

Multifocused grouping means an organization embraces two or more structural grouping alternatives simultaneously. An organization may need to group by function and product division simultaneously or might need to combine characteristics of several structural options.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-04 - 03-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design Alternatives KEYWORDS: Bloom’s: Understand 63. Discuss the strengths of functional structures.

ANSWER: One strength of the functional structure is that it promotes economy of scale within functions.

Economy of scale results when all employees are located in the same place and can share facilities. Producing all products in a single plant, for example, enables the plant to acquire the latest machinery. Constructing only one facility instead of separate facilities for each product line reduces duplication and waste. The functional structure also promotes in-depth skill development of employees. Employees are exposed to a range of functional activities within their own department. One interesting example comes from India, where Dr. Devi Shetty runs a hospital that performs open heart surgery for about 10 percent of the cost charged by hospitals in the United States, without reduced quality, by applying standardized operating procedures and principles of mass production.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-05 - 03-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Functional, Divisional, and Geographic Designs KEYWORDS: Bloom’s: Understand 64. A dual hierarchy may seem an unusual way to design an organization, but the matrix is the correct structure when certain conditions are present. What are those conditions?

ANSWER: A dual hierarchy may seem an unusual way to design an organization, but the matrix is the correct structure when the following conditions are present: Cengage Learning Testing, Powered by Cognero

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Condition 1. Pressure exists to share scarce resources across product lines. The organization is typically medium-sized and has a moderate number of product lines. It feels pressure for the shared and flexible use of people and equipment across those products. For example, the organization is not large enough to assign engineers full-time to each product line, so engineers are assigned part-time to several products or projects.

Condition 2. Environmental pressure exists for two or more critical outputs, such as for indepth technical knowledge (functional structure) and frequent new products (divisional structure). This dual pressure means a balance of power is needed between the functional and product sides of the organization, and a dual-authority structure is needed to maintain that balance.

Condition 3. The environmental domain of the organization is both complex and uncertain.

Frequent external changes and high interdependence between departments require a large amount of coordination and information processing in both vertical and horizontal directions.

Under these three conditions, the vertical and horizontal lines of authority must be given equal recognition. A dual-authority structure is thereby created so the balance of power between them is equal.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-05 - 03-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Matrix Structure KEYWORDS: Bloom’s: Remember 65. What are the symptoms of structural deficiency?

ANSWER: As a general rule, when organization structure is out of alignment with organization needs, one or more of the following symptoms of structural deficiency appear. ∙ There is an absence of collaboration among units. Organization structure should encourage collaboration when and where it is needed to meet organizational goals. It should enable resolution of conflicting departmental needs and goals into a single set of goals for the entire organization. When departments act at cross-purposes or are under pressure to achieve departmental goals at the expense of organizational goals, the structure is often at fault.

Horizontal linkage mechanisms are not adequate. ∙ Decision making is delayed or lacking in quality. Decision makers may be overloaded because the hierarchy funnels too many problems and decisions to them. Delegation to lower levels may be insufficient. Another cause of poor-quality decisions is that information may not reach the correct people. Information linkages in either the vertical or horizontal direction may be inadequate to ensure decision quality. ∙ The organization does not respond innovatively to a changing environment. One reason for lack of innovation is that departments are not coordinated horizontally. The identification of customer needs by the marketing department and the identification of technological developments in the research department must be coordinated. Organization structure also has to specify departmental responsibilities that include environmental scanning and innovation. ∙ Employee performance declines and goals are not being met. Employee performance may decline because the structure does not provide clear goals, responsibilities, and mechanisms for coordination and collaboration. The structure should reflect the complexity of the market environment yet be straightforward enough for employees to effectively work within.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.03-07 - 03-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Applications of Structural Design KEYWORDS: Bloom’s: Remember Cengage Learning Testing, Powered by Cognero

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1. An organization’s _____ is the chosen environmental field of action. a. domain b. strategy c. mission d. policy ANSWER: a Feedback: An organization’s domain is the chosen environmental field of action.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-01 - 04-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Organization’s Environment KEYWORDS: Bloom’s: Remember 2. Melissa works in the fashion industry. Her job is to research, by analyzing social media, the growing trends among youth. Her company designs and manufactures clothing based on her analysis. Melissa is a part of the _____ of the task environment. a. industry sector b. market sector c. raw material sector d. international sector ANSWER: b Feedback: Melissa is a part of the market sector of the task environment. In the market RATIONALE: sector, smart companies are keeping tabs on social media (tweets, Facebook) to see what customers and potential customers care about, gain rapid insight into trends, and learn what words to use in marketing.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-01 - 04-01 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: The Organization’s Environment KEYWORDS: Bloom’s: Apply 3. The _____ is a part of the task environment because of globalization and intense competition. a. government sector b. technology sector c. international sector d. natural sector ANSWER: c Feedback: The international sector is a part of the task environment because of globalization RATIONALE: and intense competition.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-01 - 04-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Organization’s Environment KEYWORDS: Bloom’s: Remember 4. A fast food chain in the United States, Simpson’s Kitchen, got its supply of chicken from a local farm. Its business was adversely affected when the country faced an epidemic of bird flu. The epidemic adversely affected Simpson’s Kitchen’s _____.

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a. international environment b. general environment c. global environment d. task environment ANSWER: d Feedback: The epidemic adversely affected Simpson’s Kitchen’s task environment. The task RATIONALE: environment typically includes the industry sector, raw materials sector, market sector, the human resources sector, and international sector of an organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-01 - 04-01 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: The Organization’s Environment KEYWORDS: Bloom’s: Apply 5. Which of the following is a characteristic of the general environment? a. It includes those sectors that will indirectly impact a firm. b. It includes the raw materials and human resources sectors. c. It includes sectors with which the organization interacts directly. d. It includes sectors that are internally controlled by an organization.

ANSWER: a Feedback: The general environment includes those sectors that might not have a direct RATIONALE: impact on the daily operations of a firm but will indirectly influence it.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-02 - 04-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Organization’s Environment KEYWORDS: Bloom’s: Understand 6. Leo Burton is the CEO of a cigarette manufacturing company. He and his employees suffered a major loss when tobacco products were banned in his country. Leo’s organization was affected by changes in the _____. a. technological environment b. government sector c. international sector d. economic environment ANSWER: b Feedback: Leo Burton and his employees suffered due to the ban of tobacco products by the RATIONALE: government in his country. In the government sector, regulations influence every phase of organizational life.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-02 - 04-02 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: The Organization’s Environment KEYWORDS: Bloom’s: Apply 7. The sociocultural sector of an organization is concerned with issues such as: a. the impact of the company’s products and policies on the environment. b. strategies to be undertaken in times of adverse economic conditions.

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c. the working conditions of workers hired by contractors. d. trending issues on social media sites.

ANSWER: c Feedback: One significant element in the sociocultural sector is pressure from advocacy RATIONALE: groups to improve working conditions for employees hired by contractors for large companies such as Walmart, Apple, and Amazon.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-02 - 04-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Organization’s Environment KEYWORDS: Bloom’s: Understand 8. Percy developed a new accounting system which processed data that was previously computed by ten accountants. As a result, the new technology replaced ten employees. Due to Percy’s innovation, the technological sector impacted the _____ of the organization. a. external environment b. international environment c. global environment d. general environment ANSWER: d Feedback: Percy’s innovation contributed to the technological sector which is a part of the RATIONALE: general environment. The general environment often includes the government, natural, sociocultural, economic conditions, technology, and financial resources sectors.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-02 - 04-02 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: The Organization’s Environment KEYWORDS: Bloom’s: Apply 9. The two ways in which the environment influences organizations are the need for information about changes in the environment and: a. the need for opposition from the environment. b. the need for information about future requirements of customers. c. the need for resources from the environment. d. the need for information about competitors’ activities.

ANSWER: c Feedback: The two essential ways the environment influences organizations are: (1) the RATIONALE: need for information about changes in the environment and (2) the need for resources from the environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-03 - 04-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Understand 10. Besides dynamism and abundance, the third dimension that contributes to the changes in an organization’s environment is _____. a. transparency Cengage Learning Testing, Powered by Cognero

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b. hierarchy c. variability d. complexity ANSWER: RATIONALE:

d Feedback: The patterns and events occurring in the environment can be described along three primary dimensions: dynamism, complexity, and abundance.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-03 - 04-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Remember 11. Determining an organization’s environmental uncertainty generally means focusing on sectors of the _____. a. general environment b. task environment c. natural environment d. technological environment ANSWER: b Feedback: Determining an organization’s environmental uncertainty generally means RATIONALE: focusing on sectors of the task environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-03 - 04-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Remember 12. Environmental _____ refers to heterogeneity, or the number and dissimilarity of external elements. a. dynamics b. complexity c. uncertainty d. compatibility ANSWER: b Feedback: Environmental complexity refers to heterogeneity, or the number and dissimilarity RATIONALE: of external elements.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-03 - 04-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Remember 13. Which of the following is an external element that contributes to environmental complexity? a. Managers b. Employees c. Suppliers d. Board of directors ANSWER: c Cengage Learning Testing, Powered by Cognero

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RATIONALE:

Feedback: Environmental complexity refers to heterogeneity, or the number and dissimilarity of external elements (e.g., competitors, suppliers, industry changes, government regulations) that affect an organization’s operations.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-03 - 04-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Remember 14. Which of the following statements is true of environmental complexity? a. It refers to homogeneity b. The number of companies in an organization’s domain do not affect its complexity. c. Industry changes do not contribute to environmental complexity. d. It refers to the number and dissimilarity of external elements.

ANSWER: d Feedback: Environmental complexity refers to heterogeneity, or the number and dissimilarity RATIONALE: of external elements (e.g., competitors, suppliers, industry changes, government regulations) that affect an organization’s operations.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-03 - 04-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Understand 15. A complex environment is one in which: a. an organization interacts with and is influenced by numerous diverse external elements. b. an organization struggles with a compound chain of command. c. an organization’s performance is negatively affected by internal conflicts. d. an organization markets a broad range of products.

ANSWER: a Feedback: A complex environment is one in which an organization interacts with and is RATIONALE: influenced by numerous diverse external elements.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-03 - 04-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Understand 16. Which of the following is one of the dimensions of the framework for assessing environmental uncertainty? a. Dispersion–contiguity b. Simple–complex c. Certain–uncertain d. Internal–external.

ANSWER: b Feedback: The simple–complex and stable–unstable dimensions are combined into a RATIONALE: framework for assessing environmental uncertainty.

POINTS:

1

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LEARNING OBJECTIVES: ORGT.DAFT.16.04-04 - 04-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Remember 17. Which of the following environments has the lowest level of uncertainty? a. The simple, unstable environment b. The complex, unstable environment c. The simple, stable environment d. The complex, stable environment.

ANSWER: c Feedback: In the simple, stable environment, uncertainty is low.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-04 - 04-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Remember 18. Which of the following is a characteristic of the complex, stable environment? a. It has a lower uncertainty level than the simple, stable environment. b. It has only a few external environments. c. Only a few elements need to be considered for an organization to perform well. d. External elements do not change rapidly in this environment.

ANSWER: d Feedback: The complex, stable environment represents somewhat greater uncertainty than RATIONALE: the simple, stable environment. External elements do not change rapidly or unexpectedly in this environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-04 - 04-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Understand 19. When several sectors change simultaneously, the environment becomes _____. a. turbulent b. complex c. stable d. predictable ANSWER: a Feedback: When several sectors change simultaneously, the environment becomes RATIONALE: turbulent.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-04 - 04-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Remember Cengage Learning Testing, Powered by Cognero

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20. Which of the following functions in the simple, unstable environment? a. The music industry b. Oil companies c. Chemical companies d. The insurance industry ANSWER: a Feedback: The music industry functions in the stable, unstable environment. The simple, RATIONALE: unstable environment has few external elements that change rapidly.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-04 - 04-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Remember 21. Universities function in the _____ environment. a. simple, unstable b. complex, stable c. simple, stable d. complex, unstable ANSWER: b Feedback: Universities function in the complex, stable environment. In this environment, RATIONALE: there are many external elements that change slowly.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-04 - 04-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Remember 22. Which of the following is a characteristic of the simple, stable environment? a. It has many external elements that change rapidly. b. It has few external elements that change rapidly. c. It has many external elements that change slowly. d. It has few external elements that change slowly.

ANSWER: d Feedback: The simple, stable environment has few external elements that change slowly.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-04 - 04-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Understand 23. The traditional approach to coping with environmental uncertainty was: a. to lay off employees. b. to merge existing departments into one. c. to establish buffer departments. d. to replace human resource with technology.

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ANSWER: RATIONALE:

c Feedback: The traditional approach to coping with environmental uncertainty was to establish buffer departments.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-05 - 04-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adapting to Complexity and Dynamism KEYWORDS: Bloom’s: Understand 24. _____ link and coordinate an organization with key elements in the external environment. a. Market analysts b. Human resource executives c. Strategic-planning roles d. Boundary-spanning roles ANSWER: d Feedback: Boundary-spanning roles link and coordinate an organization with key elements in RATIONALE: the external environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-05 - 04-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adapting to Complexity and Dynamism KEYWORDS: Bloom’s: Remember 25. _____ gives top executives a systematic way to collect and analyze public information about rivals and use it to make better decisions. a. Trend analysis b. Competitive intelligence c. Due diligence d. Demand forecasting ANSWER: b Feedback: Competitive intelligence gives top executives a systematic way to collect and RATIONALE: analyze public information about rivals and use it to make better decisions.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-05 - 04-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adapting to Complexity and Dynamism KEYWORDS: Bloom’s: Remember 26. _____ is the quality of collaboration among departments. a. Integration b. Certainty c. Departmentalization d. Dependency ANSWER: a Feedback: Integration is the quality of collaboration among departments.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-06 - 04-06 Cengage Learning Testing, Powered by Cognero

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NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adapting to Complexity and Dynamism KEYWORDS: Bloom’s: Remember 27. Organizations in rapidly changing environments tend to have a(n) _____ management processes. a. differentiated b. integrated c. mechanic d. organic ANSWER: d Feedback: In rapidly changing environments, the internal organization was much looser, freeRATIONALE: flowing, and adaptive, with a loose hierarchy and decentralized decision making. Burns and Stalker used the term organic to characterize this type of organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-07 - 04-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adapting to Complexity and Dynamism KEYWORDS: Bloom’s: Remember 28. The primary contingency that shapes whether an organization will function best with an organic or a mechanistic design is: a. the degree of stability in the organization. b. the degree of uncertainty in the external environment. c. the levels of hierarchy in the organization. d. the ease of communication in the internal environment.

ANSWER: b Feedback: The primary contingency that shapes whether an organization will function best RATIONALE: with an organic or a mechanistic design is the degree of uncertainty in the external environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-07 - 04-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adapting to Complexity and Dynamism KEYWORDS: Bloom’s: Understand 29. A(n) _____ involves the purchase of one organization by another so that the buyer assumes control. a. merger b. joint venture c. consolidation d. acquisition ANSWER: d Feedback: An acquisition involves the purchase of one organization by another so that the RATIONALE: buyer assumes control, such as when Google bought YouTube, eBay bought PayPal, and Walmart purchased Britain’s ASDA Group.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-09 - 04-09 NATIONAL STANDARDS: United States - AACSB: Analytic Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

Influencing Financial Resources Bloom’s: Remember

30. A(n) _____ occurs when a director of company A and a director of company B are both directors of company C. a. cooptation b. merger c. indirect interlock d. direct interlock ANSWER: c Feedback: An indirect interlock occurs when a director of company A and a director of RATIONALE: company B are both directors of company C.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-09 - 04-09 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Influencing Financial Resources KEYWORDS: Bloom’s: Remember 31. Organizational environment is defined as everything within an organization that affects its functioning. a. True b. False ANSWER: False Feedback: Organizational environment is defined as everything that exists outside the RATIONALE: boundary of an organization and has the potential to affect all or part of the organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-01 - 04-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Organization’s Environment KEYWORDS: Bloom’s: Remember 32. The raw materials sector is included within the task environment. a. True b. False ANSWER: True Feedback: The task environment typically includes the industry, raw materials, and market RATIONALE: sectors, and perhaps the human resources and international sectors.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-01 - 04-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Organization’s Environment KEYWORDS: Bloom’s: Remember 33. Economic conditions are included in the general environment. a. True b. False ANSWER: True Feedback: The general environment often includes the government, natural, sociocultural, RATIONALE: economic conditions, technology, and financial resources sectors.

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POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-02 - 04-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Organization’s Environment KEYWORDS: Bloom’s: Remember 34. Uncertainty means that decision makers do not have sufficient information about environmental factors. a. True b. False ANSWER: True Feedback: Uncertainty means that decision makers do not have sufficient information about RATIONALE: environmental factors, and they have a difficult time predicting external changes.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-02 - 04-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Remember 35. Environmental complexity refers to heterogeneity, or the number and dissimilarity of external elements that affect an organization’s operations. a. True b. False ANSWER: True Feedback: Environmental complexity refers to heterogeneity, or the number and dissimilarity RATIONALE: of external elements (e.g., competitors, suppliers, industry changes, government regulations) that affect an organization’s operations.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-03 - 04-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Remember 36. The greatest uncertainty for an organization occurs in the complex, stable environment. a. True b. False ANSWER: False Feedback: The greatest uncertainty for an organization occurs in the complex, unstable RATIONALE: environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-04 - 04-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Remember 37. Soft drink bottlers function in the complex, unstable organizational environment. a. True b. False Cengage Learning Testing, Powered by Cognero

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ANSWER: False Feedback: Soft drink bottlers function in the simple, stable organizational environment.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-04 - 04-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Remember 38. An increase in the complexity and uncertainty in the external environment increases the number of positions and departments within an organization. a. True b. False ANSWER: True Feedback: As complexity and uncertainty in the external environment increase, so does the RATIONALE: number of positions and departments within an organization, leading to increased internal complexity.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-05 - 04-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adapting to Complexity and Dynamism KEYWORDS: Bloom’s: Remember 39. Boundary spanners prevent an organization from stagnating by keeping top managers informed about environmental changes. a. True b. False ANSWER: True Feedback: Boundary spanners prevent an organization from stagnating by keeping top RATIONALE: managers informed about environmental changes.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-05 - 04-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adapting to Complexity and Dynamism KEYWORDS: Bloom’s: Remember 40. Business intelligence refers to the high-tech analysis of large amounts of internal and external data to spot patterns and relationships that might be significant. a. True b. False ANSWER: True Feedback: Business intelligence refers to the high-tech analysis of large amounts of internal RATIONALE: and external data to spot patterns and relationships that might be significant.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-05 - 04-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adapting to Complexity and Dynamism KEYWORDS: Bloom’s: Remember Cengage Learning Testing, Powered by Cognero

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41. An intelligence team is a cross-functional group of managers and employees, usually led by a competitive intelligence professional. a. True b. False ANSWER: True Feedback: An intelligence team is a cross-functional group of managers and employees, RATIONALE: usually led by a competitive intelligence (CI) professional, who work together to gain a deep understanding of a specific business issue, with the aim of presenting insights, possibilities, and recommendations to top leaders.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-03 - 04-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adapting to Complexity and Dynamism KEYWORDS: Bloom’s: Remember 42. One outcome of high organizational differentiation is that coordination and collaboration among departments become difficult. a. True b. False ANSWER: True Feedback: One outcome of high organizational differentiation is that coordination and RATIONALE: collaboration among departments become difficult.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-06 - 04-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adapting to Complexity and Dynamism KEYWORDS: Bloom’s: Remember 43. In organizations characterized by very simple, stable environments, almost no managers are assigned to integration roles. a. True b. False ANSWER: True Feedback: In organizations characterized by very simple, stable environments, almost no RATIONALE: managers are assigned to integration roles.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-06 - 04-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adapting to Complexity and Dynamism KEYWORDS: Bloom’s: Remember 44. In rapidly changing environments, the internal organization was much looser, free-flowing, and adaptive, with a loose hierarchy and decentralized decision making. a. True b. False ANSWER: True Feedback: In rapidly changing environments, the internal organization was much looser, freeRATIONALE: flowing, and adaptive, with a loose hierarchy and decentralized decision making. Burns and Stalker used the term organic to characterize this type of organization.

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POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-07 - 04-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adapting to Complexity and Dynamism KEYWORDS: Bloom’s: Remember 45. As environmental uncertainty increases, organizations tend to become more mechanic. a. True b. False ANSWER: False Feedback: As environmental uncertainty increases, organizations tend to become more RATIONALE: organic, which means decentralizing authority and responsibility to lower levels.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-07 - 04-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adapting to Complexity and Dynamism KEYWORDS: Bloom’s: Remember 46. Planning can substitute actions such as effective boundary spanning and adequate internal integration and coordination. a. True b. False ANSWER: False Feedback: Planning cannot substitute for other actions, such as effective boundary spanning RATIONALE: and adequate internal integration and coordination.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-07 - 04-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adapting to Complexity and Dynamism KEYWORDS: Bloom’s: Remember 47. A first response for many organizations faced with declining financial resources is to hire employees and increase production. a. True b. False ANSWER: False Feedback: A first response for many organizations faced with declining financial resources is RATIONALE: to lay off employees and cut investments.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-08 - 04-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dependence on Financial Resources KEYWORDS: Bloom’s: Remember 48. Resource dependence means that organizations depend on the environment but strive to acquire control over resources to minimize their dependence. a. True Cengage Learning Testing, Powered by Cognero

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b. False ANSWER: RATIONALE:

True Feedback: Resource dependence means that organizations depend on the environment but strive to acquire control over resources to minimize their dependence.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-08 - 04-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dependence on Financial Resources KEYWORDS: Bloom’s: Remember 49. To maintain autonomy, organizations that already have abundant financial resources will develop links with other organizations. a. True b. False ANSWER: False Feedback: To maintain autonomy, organizations that already have abundant financial RATIONALE: resources will tend not to establish new linkages.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-08 - 04-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dependence on Financial Resources KEYWORDS: Bloom’s: Remember 50. A merger involves the purchase of one organization by another so that the buyer assumes control. a. True b. False ANSWER: False Feedback: A merger is the unification of two or more organizations into a single unit.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-09 - 04-09 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Influencing Financial Resources KEYWORDS: Bloom’s: Remember 51. Contracts and joint ventures increase uncertainty as there is no legal relation involved. a. True b. False ANSWER: False Feedback: Contracts and joint ventures reduce uncertainty through a legal and binding RATIONALE: relationship with another firm.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-09 - 04-09 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Influencing Financial Resources KEYWORDS: Bloom’s: Understand 52. Contracts can provide long-term security by tying customers and suppliers to specific amounts and prices.

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a. True b. False ANSWER: RATIONALE:

True Feedback: Contracts can provide long-term security by tying customers and suppliers to specific amounts and prices.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-09 - 04-09 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Influencing Financial Resources KEYWORDS: Bloom’s: Understand 53. Cooptation occurs when leaders from important sectors in the environment are made part of an organization. a. True b. False ANSWER: True Feedback: Cooptation occurs when leaders from important sectors in the environment are RATIONALE: made part of an organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-09 - 04-09 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Influencing Financial Resources KEYWORDS: Bloom’s: Remember 54. Advertising is of great importance only in companies that face less competition and have low sales. a. True b. False ANSWER: False Feedback: Advertising is especially important in highly competitive industries and in RATIONALE: industries that experience variable demand.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-09 - 04-09 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Influencing Financial Resources KEYWORDS: Bloom’s: Remember 55. Greater information uncertainty is resolved through greater structural flexibility. a. True b. False ANSWER: True Feedback: Greater information uncertainty is resolved through greater structural flexibility (an RATIONALE: organic design) and the assignment of additional departments and boundary roles.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-09 - 04-09 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization–Environment Integrative Framework KEYWORDS: Bloom’s: Remember Cengage Learning Testing, Powered by Cognero

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56. What comprises an organization’s environment?

ANSWER: Organizational environment is defined as everything that exists outside the boundary of an organization and has the potential to affect all or part of an organization. The environment of an organization can be understood by analyzing its domain within external sectors. An organization’s domain is the chosen environmental field of action. The environment comprises several sectors or subdivisions that contain similar elements. Eleven sectors can be analyzed for each organization: industry, raw materials, human resources, financial resources, market, technology, economic conditions, government, natural, sociocultural, and international.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-01 - 04-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Organization’s Environment KEYWORDS: Bloom’s: Remember 57. Describe the dimensions of the patterns and events occurring in the environment that influence organizations.

ANSWER: As the environment becomes more complex, events become less stable, and financial resources become less available, the level of uncertainty increases. The patterns and events occurring in the environment can be described along three primary dimensions: dynamism (whether events in the environment are stable or unstable), complexity (whether the environment is simple or complex), and abundance (amount of financial resources available to support an organization’s growth). These dimensions boil down to two essential ways the environment influences organizations: (1) the need for information about changes in the environment and (2) the need for resources from the environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-03 - 04-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Remember 58. Explain the framework used for assessing environmental uncertainty on the dimensions of complexity and stability.

ANSWER: The simple–complex and stable–unstable dimensions are combined into a framework for assessing environmental uncertainty. In the simple, stable environment, uncertainty is low.

There are only a few external elements in a limited number of environmental sectors to contend with, and they tend to remain stable. The complex, stable environment represents somewhat greater uncertainty. A large number of elements have to be scanned, analyzed, and acted upon for an organization to perform well. External elements do not change rapidly or unexpectedly in this environment. Even greater uncertainty is felt in the simple, unstable environment. Rapid change creates uncertainty for managers. The greatest uncertainty for the organization occurs in the complex, unstable environment. A large number of elements in numerous environmental sectors impinge upon the organization, and they shift frequently or react strongly to organizational initiatives.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-04 - 04-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Remember 59. Elaborate on buffering roles.

ANSWER: The traditional approach to coping with environmental uncertainty was to establish buffer Cengage Learning Testing, Powered by Cognero

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departments. The purpose of buffering roles is to absorb uncertainty from the environment.

The technical core performs the primary production activity of an organization. Buffer departments surround the technical core and exchange materials, resources, and money between the environment and the organization. They help the technical core function efficiently. The purchasing department buffers the technical core by stockpiling supplies and raw materials. The human resource department buffers the technical core by handling the uncertainty associated with finding, hiring, and training production employees.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-05 - 04-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Remember 60. Describe boundary-spanning roles and the different approaches to these roles.

ANSWER: Boundary-spanning roles link and coordinate an organization with key elements in the external environment. Boundary spanning is primarily concerned with the exchange of information to detect and bring into an organization information about changes in the environment and to send information into the environment that presents an organization in a favorable light. Boundary spanners prevent an organization from stagnating by keeping top managers informed about environmental changes. The greater the uncertainty in the environment, the greater the importance of boundary spanners.

One approach to boundary spanning is business intelligence, which refers to the high-tech analysis of large amounts of internal and external data to spot patterns and relationships that might be significant. Business intelligence is related to another important area of boundary spanning, known as competitive intelligence (CI). CI gives top executives a systematic way to collect and analyze public information about rivals and use it to make better decisions.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-05 - 04-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Remember 61. Discuss organizational differentiation. How is integration connected to differentiation?

ANSWER: Organizational differentiation refers to the differences in cognitive and emotional orientations among managers in different functional departments, and the difference in formal structure among these departments. When the external environment is complex and rapidly changing, organizational departments become highly specialized to handle the uncertainty in that part of the external environment each department works with. One outcome of high differentiation is that coordination and collaboration among departments become difficult. Integration is the quality of collaboration among departments. Research concluded that organizations perform better when the levels of differentiation and integration match the level of uncertainty and complexity in the environment. Organizations that performed well in uncertain environments had high levels of both differentiation and integration, while those performing well in less uncertain environments had lower levels of differentiation and integration.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-06 - 04-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Remember 62. How do organizations use planning, forecasting, and responsiveness in stable and unstable environments?

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ANSWER:

In uncertain environments, planning and environmental forecasting become very important as a way to keep an organization geared for a coordinated, speedy response. With increasing environmental uncertainty, planning and forecasting become necessary. Indeed, surveys of multinational corporations have found that as environments become more turbulent, managers increase their planning activities. Planning can soften the adverse impact of external shifts. Organizations that have unstable environments often establish a separate planning department. Planning, however, cannot substitute for other actions, such as effective boundary spanning and adequate internal integration and coordination. The organizations that are most successful in uncertain environments are those that keep everyone in close touch with the environment so they can spot threats and opportunities, enabling the organization to respond immediately.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-07 - 04-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Changing Environment KEYWORDS: Bloom’s: Remember 63. Explain the concept of resource dependence.

ANSWER: Resource dependence means that organizations depend on the environment but strive to acquire control over resources to minimize their dependence. Organizations are vulnerable if vital financial resources are controlled by other organizations, so they try to be as independent as possible. Organizations do not want to become too vulnerable to other organizations because of negative effects on performance. Although companies like to minimize their dependence, when costs and risks are high they also team up to share scarce resources and be more competitive on a global basis. Formal relationships with other organizations present a dilemma to managers. Organizations seek to reduce vulnerability with respect to resources by developing links with other organizations, but they also like to maximize their own autonomy and independence. To maintain autonomy, organizations that already have abundant financial resources will tend not to establish new linkages.

Organizations that need resources will give up independence to acquire those resources.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-08 - 04-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Dependence on Financial Resources KEYWORDS: Bloom’s: Remember 64. Describe acquisitions, mergers, joint ventures, and contracts.

ANSWER: An acquisition involves the purchase of one organization by another so that the buyer assumes control. A merger is the unification of two or more organizations into a single unit.

When there is a high level of complementarity between the business lines, geographical positions, or skills of two companies, the firms often go the route of a strategic alliance rather than ownership through merger or acquisition. Such alliances are formed through contracts and joint ventures. Contracts and joint ventures reduce uncertainty through a legal and binding relationship with another firm. Joint ventures result in the creation of a new organization that is formally independent of the parents, although the parents will have some control.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-08 - 04-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Influencing Financial Resources KEYWORDS: Bloom’s: Understand Cengage Learning Testing, Powered by Cognero

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65. What are the four techniques used to change a firm’s environment?

ANSWER: There are four techniques for influencing or changing a firm’s environment: ∙ Change Where You Do Business: An organization’s domain is not fixed. Managers make decisions about which business to be in; the markets to enter; and the suppliers, banks, employees, and location to use; and this domain can be changed if necessary to keep the organization competitive. An organization can seek new environmental relationships and drop old ones. ∙ Get Political: Political activity includes techniques to influence government legislation and regulation. Political strategy can be used to erect regulatory barriers against new competitors or to squash unfavorable legislation. Corporations also try to influence the appointment to agencies of people who are sympathetic to their needs. ∙ Unite with Others: Much of the work to influence the external environment is accomplished jointly with other organizations that have similar interests. ∙ Don’t Fall into Illegitimate Activities: Illegitimate activities represent the final technique companies sometimes use to control their environmental domain, but this technique typically backfires. Conditions such as low profits, pressure from senior managers, or scarce environmental resources may lead managers to adopt behaviors not considered legitimate.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.04-09 - 04-09 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Influencing Key Sectors KEYWORDS: Bloom’s: Remember

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1. Relatively enduring resource transactions, flows, and linkages that occur among two or more organizations are called: a. intraorganizational networks. b. interorganizational relationships. c. internal processes. d. regulation processes.

ANSWER: b Feedback: Relatively enduring resource transactions, flows, and linkages that occur among RATIONALE: two or more organizations are called interorganizational relationships.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-01 - 05-01 NATIONAL STANDARDS: United States - AACSB: Operations Management TOPICS: Organizational Ecosystems KEYWORDS: Bloom’s: Remember 2. A system formed by the interaction of a community of organizations and their environment is referred to as a(n): a. organizational ecosystem. b. interorganizational network. c. collaboration network. d. institutional environment.

ANSWER: a Feedback: A system formed by the interaction of a community of organizations and their RATIONALE: environment is referred to as an organizational ecosystem.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-01 - 05-01 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Organizational Ecosystems KEYWORDS: Bloom’s: Remember 3. In which of the following approaches do businesses, governments, and nonprofit organizations join together across sectors and industries to tackle huge, compelling problems of mutual interest? a. The Behavioral approach b. The Internal process approach c. The Megacommunity approach d. The Open innovation approach ANSWER: c Feedback: In the megacommunity approach, businesses, governments, and nonprofit RATIONALE: organizations join together across sectors and industries to tackle huge, compelling problems of mutual interest, such as energy development, world hunger, or cybercrime.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-01 - 05-01 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Organizational Ecosystems KEYWORDS: Bloom’s: Remember 4. Which of the following is true of collaborative roles played by managers? a. They have direct control over people and resources. b. They are accountable for specific business results.

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c. They are rigid and passive. d. They have direct authority over horizontal colleagues.

ANSWER: b Feedback: Collaborative roles do not have direct authority over horizontal colleagues or RATIONALE: partners, but are nonetheless accountable for specific business results.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-02 - 05-02 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Organizational Ecosystems KEYWORDS: Bloom’s: Remember 5. Which of the following theories argues that organizations try to minimize their reliance on other organizations for the supply of important resources and try to influence the environment to make resources available? a. The Resource-retention theory b. The Environmental resource theory c. The Resource-dependence theory d. The Economic supply theory ANSWER: c Feedback: The resource-dependence theory argues that organizations try to minimize their RATIONALE: reliance on other organizations for the supply of important resources and try to influence the environment to make resources available.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-03 - 05-03 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Resource Dependence KEYWORDS: Bloom’s: Remember 6. Organizations operating under the resource-dependence philosophy will: a. withdraw control over external resources, thereby maximizing dependence. b. succeed by emphasizing interdependence with other companies, thereby establishing lasting relationships. c. do whatever is needed to avoid dependence on the environment, thereby reducing uncertainty. d. set up dependencies when they become more self-reliant, thereby maximizing autonomy.

ANSWER: c Feedback: The resource dependence theory argues that organizations try to minimize their RATIONALE: reliance on other organizations for the supply of important resources and try to influence the environment to make resources available.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-03 - 05-03 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Resource Dependence KEYWORDS: Bloom’s: Understand 7. Arkal Corp. manufactures wooden chairs and Borston Corp. manufactures plastic chairs. Arkal Corp. wants to enter into a resource-dependence relationship with Borston Corp. Which of the following types of resource-dependence relationships is most likely to result in Arkal Corp. gaining full control over the joint outcome? a. Acquisition b. Joint Venture c. Strategic Alliance Cengage Learning Testing, Powered by Cognero

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d. Interlock ANSWER: RATIONALE:

a Feedback: Acquisition/Merger offers the greatest amount of control over joint outcomes because the acquiring firm absorbs all of the resources, assets, and liabilities of the target organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-03 - 05-03 NATIONAL STANDARDS: United States - AACSB: Operations Management TOPICS: Resource Dependence KEYWORDS: Bloom’s: Apply 8. In the _____, companies join together to become more competitive and to share scarce resources. a. institutional perspective b. resource-dependence perspective c. population-ecology perspective d. collaborative-network perspective ANSWER: d Feedback: The collaborative-network perspective is an emerging alternative to resourceRATIONALE: dependence theory in which companies join together to become more competitive and to share scarce resources.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-04 - 05-04 NATIONAL STANDARDS: United States - AACSB: Operations Management TOPICS: Collaborative Networks KEYWORDS: Bloom’s: Remember 9. Getwel Corp. and Sebastian Inc. are two computer manufacturers that share with each other the details of commonly occurring issues and customer complaints. This enables them to work together and provide better service to their customers and also saves the time required to diagnose the issues. Which of the following does this scenario illustrate? a. A Collaborative network b. Resource dependence c. Normative forces d. A Trade association ANSWER: a Feedback: Getwel Corp. and Sebastian Inc. have formed a collaborative network to serve RATIONALE: their customers more efficiently. In collaborative networks, organizations allow themselves to become dependent on other organizations to increase value and productivity for all.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-04 - 05-04 NATIONAL STANDARDS: United States - AACSB: Operations Management TOPICS: Collaborative Networks KEYWORDS: Bloom’s: Remember 10. Which of the following is a characteristic of the new orientation to interorganizational relationships? a. Equity and fair dealing b. Contract limiting the relationship c. Minimal up-front investment d. Legal resolution of conflict Cengage Learning Testing, Powered by Cognero

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ANSWER: RATIONALE:

a Feedback: The new orientation to interorganizational relationships is characterized by equity and fair dealing.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-05 - 05-05 NATIONAL STANDARDS: United States - AACSB: Operations Management TOPICS: Collaborative Networks KEYWORDS: Bloom’s: Understand 11. Which of the following statements is true about the population-ecology perspective? a. It focuses on organizational diversity and adaptation within organizations. b. It focuses on the alliance of companies to share scarce resources. c. It focuses on minimizing the dependence of an organization on other organizations. d. It focuses on the congruence between an organization and the expectations from its environment.

ANSWER: a Feedback: The population-ecology perspective differs from the other perspectives because it RATIONALE: focuses on organizational diversity and adaptation within a population of organizations.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-06 - 05-06 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Population Ecology KEYWORDS: Bloom’s: Understand 12. Which of the following is an assumption of the population-ecology perspective? a. Management competence is the biggest factor in the survival of organizations. b. Individual organizations find it difficult to adapt to environmental changes. c. Principles of evolution are not applicable to organizations because the fittest do not survive. d. A community of organizations is a closed system.

ANSWER: b Feedback: According to the population-ecology view, when looking at an organizational RATIONALE: population as a whole, the changing environment determines which organizations survive or fail. The assumption is that individual organizations suffer from structural inertia and find it difficult to adapt to environmental changes.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-06 - 05-06 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Population Ecology KEYWORDS: Bloom’s: Understand 13. All of the following except _____ are the stages of the population ecology model of organizations. a. retention b. variation c. exertion d. selection ANSWER: c Feedback: The stages of the population ecology model of organizations are retention, RATIONALE: variation, and selection.

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POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-06 - 05-06 NATIONAL STANDARDS: United States - AACSB: Operations Management TOPICS: Population Ecology KEYWORDS: Bloom’s: Remember 14. Which of the following stages of the population ecology model of organizations refers to the preservation and institutionalization of selected organizational forms? a. Retention b. Variation c. Exertion d. Selection ANSWER: a Feedback: Retention is the preservation and institutionalization of selected organizational RATIONALE: forms.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-06 - 05-06 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Population Ecology KEYWORDS: Bloom’s: Remember 15. Organizations with a wide niche or domain, that is, those that offer a broad range of products and services or that serve a broad market are: a. specialists. b. generalists. c. mutualists. d. pacifists.

ANSWER: b Feedback: Organizations with a wide niche or domain, that is, those that offer a broad range RATIONALE: of products and services or that serve a broad market are generalists.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-06 - 05-06 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Population Ecology KEYWORDS: Bloom’s: Remember 16. In the context of the population-ecology perspective, which of the following best illustrates a generalist strategy? a. Maffles Inc. sells books, electronic equipment, furniture, and fashion accessories. b. Harpors Inc. sells fiction novels in Canada. c. Tradcom Corp. sells music DVDs over the Internet. d. Togyon Corp. sells toys manufactured from recycled plastic and discarded toys.

ANSWER: a Feedback: Maffles Inc. follows a generalist strategy. Organizations with a wide niche or RATIONALE: domain, that is, those that offer a broad range of products and services or that serve a broad market are generalists.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-06 - 05-06 Cengage Learning Testing, Powered by Cognero

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NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Population Ecology KEYWORDS: Bloom’s: Apply 17. In the population-ecology model of organizations, _____ means the appearance of new, diverse forms in a population of organizations. a. retention b. selection c. variation d. legitimacy ANSWER: c Feedback: Variation means the appearance of new, diverse forms in a population of RATIONALE: organizations.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-06 - 05-06 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Population Ecology KEYWORDS: Bloom’s: Remember 18. In the context of the population-ecology perspective, which of the following is a difference between specialists and generalists? a. Specialists offer a broader range of products or services than generalists. b. Specialists move slower than generalists and are less flexible. c. Specialists are generally more competitive than generalists. d. Specialists are generally larger than generalists.

ANSWER: c Feedback: Specialists are generally more competitive than generalists in the narrow area in RATIONALE: which their domains overlap. Organizations with a wide niche or domain, that is, those that offer a broad range of products and services or that serve a broad market are generalists.

Organizations that provide a narrower range of goods or services or that serve a narrower market are specialists.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-06 - 05-06 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Population Ecology KEYWORDS: Bloom’s: Understand 19. _____ is defined as the general perspective that an organization's actions are desirable, proper, and appropriate within the environment's system of norms, values, and belief. a. Variation b. Legitimacy c. Niche d. Retention ANSWER: b Feedback: Legitimacy is defined as the general perspective that an organization's actions are RATIONALE: desirable, proper, and appropriate within the environment's system of norms, values, and belief.

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LEARNING OBJECTIVES: ORGT.DAFT.16.05-07 - 05-07 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Institutionalism KEYWORDS: Bloom’s: Remember 20. _____ is the process that causes one unit in a population to resemble other units that face the same set of environmental conditions. a. Allomorphism b. Chromaticism c. Isomorphism d. Isochronism ANSWER: c Feedback: Isomorphism is the process that causes one unit in a population to resemble other RATIONALE: units that face the same set of environmental conditions.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-07 - 05-07 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Institutionalism KEYWORDS: Bloom’s: Remember 21. Garin Corp., an automobile manufacturing company, tried to increase its sales by releasing car models with new colors. In the light of its huge success, other automobile manufacturers began doing the same. Which of the following mechanisms for institutional adaptation is best illustrated in this scenario? a. Mimetic forces b. Coercive forces c. Normative forces d. Generic forces ANSWER: a Feedback: This scenario best illustrates mimetic forces. Mimetic forces refer to the pressure RATIONALE: to copy or model other organizations that are generally regarded as successful.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-07 - 05-07 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Institutionalism KEYWORDS: Bloom’s: Apply 22. Which of the following statements is true about mimetic forces? a. Organizations are forced to behave similarly in order to maintain productive relationships. b. Political and governmental processes force organizations to become similar. c. In the face of uncertainty, organizations copy or model each other. d. Diversity is maintained in order for organizations to find and maintain a marketing niche.

ANSWER: c Feedback: In the face of uncertainty, mimetic forces, the pressures to copy or model other RATIONALE: organizations, occur.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-07 - 05-07 NATIONAL STANDARDS: United States - AACSB: Environmental Influence Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

Institutionalism Bloom’s: Understand

23. _____ means identifying who is best at something in an industry and then duplicating the technique for creating excellence, perhaps even improving it in the process. a. Retention b. Benchmarking c. Ballooning d. Variation ANSWER: b Feedback: Benchmarking means identifying who is best at something in an industry and then RATIONALE: duplicating the technique for creating excellence, perhaps even improving it in the process.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-07 - 05-07 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Institutionalism KEYWORDS: Bloom’s: Remember 24. In the context of mechanisms for institutional adaptation, benchmarking is a: a. mimetic process. b. coercive process. c. normative process. d. generic process.

ANSWER: a Feedback: Benchmarking is a mimetic process. It involves identifying who is best at RATIONALE: something in an industry and then duplicating the technique for creating excellence, perhaps even improving it in the process.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-07 - 05-07 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Institutionalism KEYWORDS: Bloom’s: Remember 25. Which of the following is a reason for a mimetic process to occur in an organization? a. Managers face high risks by supporting innovation. b. Managers are old-fashioned and stick to their original approach. c. Managers are unaware of the innovations occurring in the environment. d. Managers face high uncertainty.

ANSWER: d Feedback: The mimetic process occurs because managers face high uncertainty, they are RATIONALE: aware of innovations occurring in the environment, and the innovations are culturally supported, thereby giving legitimacy to adopters.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-07 - 05-07 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Institutionalism KEYWORDS: Bloom’s: Understand Cengage Learning Testing, Powered by Cognero

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26. _____ are the external pressures exerted on an organization to adopt structures, techniques, or behaviors similar to other organizations. a. Mimetic forces b. Coercive forces c. Normative forces d. Generic forces ANSWER: b Feedback: Coercive forces are the external pressures exerted on an organization to adopt RATIONALE: structures, techniques, or behaviors similar to other organizations.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-07 - 05-07 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Institutionalism KEYWORDS: Bloom’s: Remember 27. Organizational changes that result from coercive forces occur due to _____. a. dependence b. obligation c. uncertainty d. professionalism ANSWER: a Feedback: Coercive forces are the external pressures exerted on an organization to adopt RATIONALE: structures, techniques, or behaviors similar to other organizations. Organizational changes that result from coercive forces occur when an organization is dependent on another.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-07 - 05-07 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Institutionalism KEYWORDS: Bloom’s: Remember 28. _____ are pressures to achieve standards of professionalism and to adopt techniques that are considered by the professional community to be up to date and effective. a. Mimetic forces b. Coercive forces c. Normative forces d. Generic forces ANSWER: c Feedback: Normative forces are pressures to achieve standards of professionalism and to RATIONALE: adopt techniques that are considered by the professional community to be up to date and effective.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-07 - 05-07 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Institutionalism KEYWORDS: Bloom’s: Remember 29. Companies accept normative pressures to become like one another due to _____. a. dependence Cengage Learning Testing, Powered by Cognero

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b. obligation c. uncertainty d. independence ANSWER: RATIONALE:

b Feedback: Companies accept normative pressures to become like one another through a sense of obligation or duty to high standards of performance based on professional norms shared by managers and specialists in their respective organizations.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-07 - 05-07 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Institutionalism KEYWORDS: Bloom’s: Remember 30. A company may use any or all of the mechanisms of mimetic, coercive, or normative forces to change itself for greater _____ in the institutional environment. a. profit b. market share c. resource dependency d. legitimacy ANSWER: d Feedback: A company may use any or all of the mechanisms of mimetic, coercive, or RATIONALE: normative forces to change itself for greater legitimacy in the institutional environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-07 - 05-07 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Institutionalism KEYWORDS: Bloom’s: Remember 31. The term frenemies refers to the trend toward companies being both collaborators and competitors. a. True b. False ANSWER: True Feedback: Frenemies refers to the trend toward companies being both friends and enemies, RATIONALE: collaborators and competitors.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-01 - 05-01 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Organizational Ecosystems KEYWORDS: Bloom’s: Remember 32. In the changing role of management, managers think about vertical processes rather than horizontal structures. a. True b. False ANSWER: False Feedback: In the changing role of management, managers think about horizontal processes RATIONALE: rather than vertical structures.

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LEARNING OBJECTIVES: ORGT.DAFT.16.05-02 - 05-02 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Organizational Ecosystems KEYWORDS: Bloom’s: Understand 33. Managers in collaborative roles have direct authority over horizontal colleagues or partners. a. True b. False ANSWER: False Feedback: Collaborative roles do not have direct authority over horizontal colleagues or RATIONALE: partners, but are nonetheless accountable for specific business results.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-02 - 05-02 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Organizational Ecosystems KEYWORDS: Bloom’s: Understand 34. Acquisition offers the greatest amount of control over joint outcomes. a. True b. False ANSWER: True Feedback: Acquisition offers the greatest amount of control over joint outcomes.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-03 - 05-03 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Resource Dependence KEYWORDS: Bloom’s: Understand 35. According to the resource-dependence perspective, when threatened by greater dependence, organizations will assert control over external resources to minimize that dependence. a. True b. False ANSWER: True Feedback: According to the resource-dependence perspective, when threatened by greater RATIONALE: dependence, organizations will assert control over external resources to minimize that dependence.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-03 - 05-03 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Resource Dependence KEYWORDS: Bloom’s: Understand 36. In resource-dependence relationships, large independent companies have power over smaller suppliers or partners. a. True b. False ANSWER: True Feedback: In resource-dependence relationships, large independent companies have power RATIONALE: Cengage Learning Testing, Powered by Cognero

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over smaller suppliers or partners.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-03 - 05-03 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Resource Dependence KEYWORDS: Bloom’s: Understand 37. A strategic alliance is more formal and binding than a joint venture. a. True b. False ANSWER: False Feedback: A strategic alliance is less formal and binding than a joint venture.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-03 - 05-03 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Resource Dependence KEYWORDS: Bloom’s: Understand 38. The goal of supply sourcing is to reduce risk and overdependence on one company in the supply chain. a. True b. False ANSWER: True Feedback: The goal of supply sourcing is to reduce risk and overdependence on one RATIONALE: company in the supply chain.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-03 - 05-03 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Resource Dependence KEYWORDS: Bloom’s: Understand 39. One of the main reasons for interorganizational collaboration is sharing risks when entering new markets. a. True b. False ANSWER: True Feedback: Some key reasons for collaboration include sharing risks when entering new RATIONALE: markets, mounting expensive new programs and reducing costs, and enhancing an organization’s profile in selected industries or technologies.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-04 - 05-04 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Collaborative Networks KEYWORDS: Bloom’s: Understand 40. Interorganizational linkages encourage risk taking. a. True b. False ANSWER: True Cengage Learning Testing, Powered by Cognero

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RATIONALE:

Feedback: Interorganizational linkages provide a kind of safety net that encourages long-term investment, information sharing, and risk taking.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-04 - 05-04 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Collaborative Networks KEYWORDS: Bloom’s: Understand 41. The traditional adversarial orientation is characterized by loose performance measures, equity, and fair dealing. a. True b. False ANSWER: False Feedback: The traditional adversarial orientation is characterized by detailed performance RATIONALE: measures, price, efficacy, and own profits. The partnership orientation on the other hand is characterized by loose performance measures, equity, and fair dealing.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-05 - 05-05 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Collaborative Networks KEYWORDS: Bloom’s: Understand 42. In the partnership-orientation view, dependence on another company is seen to increase rather than reduce risks. a. True b. False ANSWER: False Feedback: In the partnership-orientation view, dependence on another company is seen to RATIONALE: reduce rather than increase risks.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-05 - 05-05 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Collaborative Networks KEYWORDS: Bloom’s: Understand 43. According to the population-ecology view, when looking at an organizational population as a whole, the changing environment determines which organizations survive or fail. a. True b. False ANSWER: True Feedback: According to the population-ecology view, when looking at an organizational RATIONALE: population as a whole, the changing environment determines which organizations survive or fail.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-06 - 05-06 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Population Ecology KEYWORDS: Bloom’s: Understand 44. When rapid change occurs, old organizations are likely to thrive.

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a. True b. False ANSWER: RATIONALE:

False Feedback: According to the population-ecology view, when looking at an organizational population as a whole, the changing environment determines which organizations survive or fail. The assumption is that individual organizations suffer from structural inertia and find it difficult to adapt to environmental changes. Thus, when rapid change occurs, old organizations are likely to decline or fail.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-06 - 05-06 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Population Ecology KEYWORDS: Bloom’s: Understand 45. The niche is usually large in the early stages of an organization and reduces in size over time. a. True b. False ANSWER: False Feedback: The niche is usually small in the early stages of an organization but may increase RATIONALE: in size over time if the organization is successful.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-06 - 05-06 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Population Ecology KEYWORDS: Bloom’s: Understand 46. Selection is the preservation and institutionalization of selected organizational forms. a. True b. False ANSWER: False Feedback: Selection refers to whether a new organizational form is suited to the environment RATIONALE: and can survive.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-06 - 05-06 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Population Ecology KEYWORDS: Bloom’s: Remember 47. When excessive resources are available to an organization, that organization will be “selected out.” a. True b. False ANSWER: False Feedback: When there is insufficient demand for a firm’s product or service and when RATIONALE:

insufficient resources are available to the organization, that organization will be “selected out.”

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-06 - 05-06 NATIONAL STANDARDS: United States - AACSB: Environmental Influence Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

Population Ecology Bloom’s: Remember

48. The struggle for existence is most intense among old organizations. a. True b. False ANSWER: False Feedback: The struggle for existence is most intense among new organizations, and both the RATIONALE: birth and survival frequencies of new organizations are related to factors in the larger environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-06 - 05-06 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Population Ecology KEYWORDS: Bloom’s: Understand 49. Specialists are generally more competitive than generalists in the narrow area in which their domains overlap. a. True b. False ANSWER: True Feedback: Specialists are generally more competitive than generalists in the narrow area in RATIONALE: which their domains overlap.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-06 - 05-06 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Population Ecology KEYWORDS: Bloom’s: Understand 50. Given their flexibility, specialists are able to reallocate resources internally to adapt to a changing environment, whereas generalists are not. a. True b. False ANSWER: False Feedback: Because of the diversity of products, services, and customers, generalists are RATIONALE: able to reallocate resources internally to adapt to a changing environment, whereas specialists are not.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-06 - 05-06 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Population Ecology KEYWORDS: Bloom’s: Remember 51. The institutional dimension in an organization is governed by expectations from people and organizations in the external environment. a. True b. False ANSWER: True Feedback: The institutional dimension in an organization is governed by expectations from RATIONALE: Cengage Learning Testing, Powered by Cognero

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people and organizations in the external environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-07 - 05-07 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Institutionalism KEYWORDS: Bloom’s: Remember 52. Coercive forces stem from responses to uncertainty. a. True b. False ANSWER: False Feedback: Coercive forces stem from political influence.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-07 - 05-07 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Institutionalism KEYWORDS: Bloom’s: Remember 53. The social basis for the mimetic process is that the innovations are culturally supported. a. True b. False ANSWER: True Feedback: The mimetic process occurs because managers face high uncertainty, they are RATIONALE: aware of innovations occurring in the environment, and the innovations are culturally supported, thereby giving legitimacy to adopters.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-07 - 05-07 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Institutionalism KEYWORDS: Bloom’s: Understand 54. Organizational changes that result from coercive forces occur when an organization is completely independent of another. a. True b. False ANSWER: False Feedback: Organizational changes that result from coercive forces occur when an RATIONALE: organization is dependent on another.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-07 - 05-07 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Institutionalism KEYWORDS: Bloom’s: Understand 55. Companies accept normative pressures to become like one another through a sense of obligation or duty to high standards of performance. a. True Cengage Learning Testing, Powered by Cognero

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b. False ANSWER: RATIONALE:

True Feedback: Companies accept normative pressures to become like one another through a sense of obligation or duty to high standards of performance.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-07 - 05-07 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Institutionalism KEYWORDS: Bloom’s: Understand 56. What is an organizational ecosystem? How does this concept impact the changing role of management?

ANSWER: An organizational ecosystem is a system formed by the interaction of a community of organizations and their environment. Within business ecosystems, managers have to look beyond the boundaries of their own company and build relationships with a network of partners by focusing on horizontal processes rather than vertical structures. In this changing environment, rather than trying to force suppliers into low prices or customers into high prices, managers strive to strengthen the larger system evolving around them, finding ways to understand this big picture and how to contribute. They need to adhere to either an operations role or a collaborative role in order to achieve success.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-01 - 05-01 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Organizational Ecosystems KEYWORDS: Bloom’s: Understand 57. Summarize the perspectives for understanding interorganizational relationships.

ANSWER: Relationships among organizations can be characterized by whether the organizations are dissimilar or similar and whether relationships are competitive or cooperative. By understanding these perspectives, managers can assess their environment and adopt strategies to suit their needs. The first perspective is called resource-dependence theory, which describes rational ways organizations deal with each other to reduce their dependence on the environment. The second perspective is about collaborative networks, wherein organizations allow themselves to become dependent on other organizations to increase value and productivity for all. The third perspective is population ecology, which examines how new organizations fill niches left open by established organizations and how a rich variety of new organizational forms benefits society. The final approach is called institutionalism, which explains why and how organizations legitimate themselves in the larger environment and design structures by borrowing ideas from each other.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-02 - 05-02 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Organizational Ecosystems KEYWORDS: Bloom’s: Remember 58. Explain in brief the different types of resource-dependence relationships.

ANSWER: Organizations operating under the resource-dependence philosophy will do whatever is needed to avoid excessive dependence on other organizations and maintain control of resources and outcomes, thereby reducing their uncertainty. They use the following types of resource dependence relationships in order for them to maintain an autonomy: a. Acquisition/Merger: This type of relationship offers the greatest amount of control over Cengage Learning Testing, Powered by Cognero

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joint outcomes because the acquiring firm absorbs all of the resources, assets, and liabilities of the target organization. b. Joint Venture: A joint venture offers less control than full ownership. It is a new and distinct organizational entity set up by two or more organizations to jointly develop an innovative product or shared technology. c. Strategic Alliance: A strategic alliance is less formal and binding than a joint venture. It is a collaborative agreement between two or more organizations that contribute resources to a common endeavor while maintaining their individuality. d. Supply Sourcing: Many organizations establish contracts with key suppliers to acquire resources to supplement in-house resources and capabilities. The goal is to reduce risk and overdependence on one company in the supply chain. e. Trade Association. A trade association is a federation that allows organizations, often in the same industry, to meet, share information, and monitor one another’s activities. A trade association can also use collective resources to lobby for government policies to protect the industry. f. Board Interlock: A board interlock occurs when a director serves on the boards of multiple companies, creating connections among the companies.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-03 - 05-03 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Resource Dependence KEYWORDS: Bloom’s: Remember 59. Describe the power implications of resource-dependence relationships.

ANSWER: In resource-dependence relationships, large independent companies have power over smaller suppliers or partners. When a large company asks the small companies that it dominates for deals or lower prices, then the small companies have to oblige. Resource dependence can work in the opposite direction too. When the smaller companies produce or supply resources required by the larger companies, the smaller companies have power over the larger companies. Thus, the power relationships in various industries are always shifting.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-03 - 05-03 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Resource Dependence KEYWORDS: Bloom’s: Understand 60. Explain how collaborative-network perspective is an emerging alternative to resource-dependence theory.

ANSWER: The collaborative-network perspective is an emerging alternative to resource-dependence theory. Companies join together to become more competitive and to share scarce resources.

Large aerospace firms partner with one another and with smaller companies and suppliers to design next-generation jets. Large pharmaceutical companies join with small biotechnology firms to share resources and knowledge and spur innovation. Consulting firms, investment companies, and accounting firms may join in an alliance to meet customer demands for expanded services. Some companies have moved away from the idea of remaining independent to allow themselves to develop mutually dependent relationships with other organizations and accomplish things none of the organizations could do alone.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-04 - 05-04 NATIONAL STANDARDS: United States - AACSB: Operations Management TOPICS: Collaborative networks KEYWORDS: Bloom’s: Understand Cengage Learning Testing, Powered by Cognero

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61. Compare and contrast the traditional adversarial orientation with the new partnership orientation of interorganizational relationships.

ANSWER: The traditional model is characterized by suspicion and competition. It involves detailed performance measures and provision of limited information and feedback. Any conflict is resolved legally, and there is a minimal involvement in the partner’s product design and production. It involves short-term contracts that limit the relationship with the partners. On the other hand, the partnership orientation is based on independence and trust. People try to add value to both sides and believe in high commitment rather than suspicion and competition. The new model is characterized by lots of shared information, including electronic linkages and face-to-face discussions to provide feedback and solve problems.

Partners develop equitable solutions to conflicts rather than relying on legal contracts and lawsuits. Contracts may be loosely specified, and it is not unusual for business partners to help each other outside whatever is specified in the contract.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-05 - 05-05 NATIONAL STANDARDS: United States - AACSB: Operations Management TOPICS: Collaborative networks KEYWORDS: Bloom’s: Understand 62. What is the impact of rapid environmental changes on organizations?

ANSWER: Large, established firms often have tremendous difficulty adapting to a rapidly changing environment. Hence, new organizational forms that fit the current environment emerge, fill a new niche, and over time take away business from established companies. According to the population-ecology view, when looking at an organizational population as a whole, the changing environment determines which organizations survive or fail. The assumption is that individual organizations suffer from structural inertia and find it difficult to adapt to environmental changes. Thus, when rapid change occurs, old organizations are likely to decline or fail, and new organizations emerge that are better suited to the needs of the environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-06 - 05-06 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Population Ecology KEYWORDS: Bloom’s: Understand 63. Explain how finding an appropriate niche is important for the survival of an organization.

ANSWER: The population-ecology model is concerned with organizational forms. Organizational form is an organization’s specific technology, structure, products, goals, and personnel, which can be selected or rejected by the environment. Each new organization tries to find a niche (i.e., a domain of unique environmental resources and needs) sufficient to support it. The niche is usually small in the early stages of an organization but may increase in size over time if the organization is successful. If the organization does not find an appropriate niche, it will decline and may perish.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-06 - 05-06 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Population Ecology KEYWORDS: Bloom’s: Understand 64. In the context of the population-ecology perspective, compare and contrast specialists and generalists.

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ANSWER:

In the population-ecology perspective, generalist and specialist strategies distinguish organizational forms in the struggle for survival. Organizations with a wide niche or domain—that is, those that offer a broad range of products or services or that serve a broad market—are generalists. Organizations that provide a narrower range of goods or services or that serve a narrower market are specialists. Specialists are generally more competitive than generalists in the narrow area in which their domains overlap. However, the breadth of the generalist’s domain serves to protect it somewhat from environmental changes. Though demand may decrease for some of the generalist’s products or services, it usually increases for others at the same time. In addition, because of the diversity of products, services, and customers, generalists are able to reallocate resources internally to adapt to a changing environment, whereas specialists are not. However, because specialists are often smaller companies, they can sometimes move faster and be more flexible in adapting to changes.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-06 - 05-06 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Population Ecology KEYWORDS: Bloom’s: Understand 65. Describe the essential dimensions of organizations according to the institutional view.

ANSWER: The institutional view also sees organizations as having two essential dimensions—technical and institutional. The technical dimension is the day-to-day work, technology, and operating requirements. The institutional structure is that part of an organization most visible to the outside public. Moreover, the technical dimension is governed by norms of rationality and efficiency, but the institutional dimension is governed by expectations from people and organizations in the external environment. As a result of pressure to conduct business in a proper and correct way, the formal structures of many organizations reflect the expectations and values of the environment rather than the demand of work activities. This means that an organization may incorporate positions or activities (e.g., e-commerce division, chief compliance officer, social media director) perceived as important by the larger society to increase its legitimacy and survival prospects, even though these elements may decrease efficiency.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.05-07 - 05-07 NATIONAL STANDARDS: United States - AACSB: Environmental Influence TOPICS: Institutionalism KEYWORDS: Bloom’s: Remember

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1. _____ refers to the number and variety of products and services a company offers as well as the number and variety of regions, countries, and markets it serves. a. Integrator b. Cooptation c. Domain d. Scope ANSWER: d Feedback: Scope refers to the number and variety of products and services a company offers RATIONALE: as well as the number and variety of regions, countries, and markets it serves.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-01 - 06-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Entering the Global Arena KEYWORDS: Bloom’s: Remember 2. In the _____ stage of international development, market potential is limited and is primarily in the home country. a. domestic b. international c. multinational d. global ANSWER: a Feedback: In the first stage of international development, the domestic stage, a company is RATIONALE: domestically oriented, but managers are aware of the global environment and may want to consider initial foreign involvement to expand production volume and realize economies of scale. Market potential is limited and is primarily in the home country.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-02 - 06-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Entering the Global Arena KEYWORDS: Bloom’s: Remember 3. Hill Fog is a brand of bottled water in India. Asif, the marketing manager at Hill Fog, is aware of the global environment and is considering initial foreign involvement in the United States to expand production volume and realize economies of scale. Hill Fog is in the _____ stage of international development. a. multinational b. international c. domestic d. global ANSWER: c Feedback: Hill Fog is in the domestic stage of international development. In the first stage of RATIONALE: international development, the domestic stage, a company is domestically oriented, but managers are aware of the global environment and may want to consider initial foreign involvement to expand production volume and realize economies of scale. Market potential is limited and is primarily in the home country.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-02 - 06-02 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Entering the Global Arena Cengage Learning Testing, Powered by Cognero

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KEYWORDS:

Bloom’s: Apply

4. In the context of international development, _____ means competitive issues in each country are independent of other countries; a company deals with each country individually. a. domestic b. multidomestic c. multinational d. global ANSWER: b Feedback: In the second stage of international development, the international stage, a RATIONALE: company takes exports seriously and begins to think multidomestically. Multidomestic means competitive issues in each country are independent of other countries; the company deals with each country individually.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-02 - 06-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Entering the Global Arena KEYWORDS: Bloom’s: Remember 5. Which of the following is a difference between the domestic and international stages of international development? a. The domestic stage is export-oriented, while the international stage is globally oriented. b. In the domestic stage, the market potential is limited, while in the international stage, the market potential is large. c. In the domestic stage, managers are concerned about international competitive positioning, while in the international stage, managers consider initial foreign involvement. d. The domestic stage is structural, while the international stage is functional.

ANSWER: b Feedback: In the first stage of international development, the domestic stage, a company is RATIONALE: domestically oriented. In the second stage, the international stage, the company takes exports seriously and begins to think multidomestically.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-02 - 06-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Entering the Global Arena KEYWORDS: Bloom’s: Remember 6. In the _____ stage of international development, a company has extensive experience in a number of international markets and has established marketing, manufacturing, or research and development (R&D) facilities in several foreign countries. a. domestic b. international c. multinational d. global ANSWER: c Feedback: In the multinational stage of international development, a company has extensive RATIONALE: experience in a number of international markets and has established marketing, manufacturing, or research and development (R&D) facilities in several foreign countries. The organization obtains a large percentage of revenues from sales outside the home country.

POINTS:

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LEARNING OBJECTIVES: ORGT.DAFT.16.06-02 - 06-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Entering the Global Arena KEYWORDS: Bloom’s: Remember 7. Quidpro, a food and beverage company based in Germany, gets most of its sales from outside its home country. Its employees are spread all over the world. The CEO is Belgian, the chairman was born in Austria, and more than half of the company’s managers are non-Germans. The company has hundreds of brands and has production facilities or other operations in almost every country in the world. Quidpro is in the _____ stage of international development. a. multinational b. international c. domestic d. global ANSWER: d Feedback: Quidpro is in the global stage of international development. In this stage, the RATIONALE: company transcends any single country. The business is not merely a collection of domestic industries; rather, subsidiaries are interlinked to the point where competitive position in one country significantly influences activities in other countries. Truly global companies no longer think of themselves as having a single home country and, indeed, have been called stateless corporations.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-02 - 06-02 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Entering the Global Arena KEYWORDS: Bloom’s: Apply 8. Penrose Inc. is an American corporation that provides business consulting, information technology, and outsourcing services. The company has extensive experience in a number of international markets and has established facilities in several foreign countries. Penrose Inc. is in the _____ stage of international development. a. multinational b. international c. domestic d. global ANSWER: a Feedback: Penrose Inc. is in the multinational stage of international development. In this RATIONALE: stage, the company has extensive experience in a number of international markets and has established marketing, manufacturing, or research and development (R&D) facilities in several foreign countries.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-02 - 06-02 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Entering the Global Arena KEYWORDS: Bloom’s: Apply 9. In the _____ stage of international development, a company transcends any single country. a. domestic b. international c. multinational d. global Cengage Learning Testing, Powered by Cognero

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ANSWER: RATIONALE:

d Feedback: The fourth and ultimate stage of international development is the global stage, which means a company transcends any single country. The business is not merely a collection of domestic industries; rather, subsidiaries are interlinked to the point where competitive position in one country significantly influences activities in other countries.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-02 - 06-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Entering the Global Arena KEYWORDS: Bloom’s: Remember 10. _____ refers to the quality of collaboration across organizational units. a. Contingency b. Standardization c. Coordination d. Sustainability ANSWER: c Feedback: As organizations become more differentiated, with multiple products, divisions, RATIONALE: departments, and positions scattered across numerous countries, managers face a tremendous coordination challenge. Coordination refers to the quality of collaboration across organizational units.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-03 - 06-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Challenges of Global Design KEYWORDS: Bloom’s: Remember 11. The _____ means that product design, manufacturing, and marketing strategy are standardized throughout the world, which is less costly than creating different products for different markets. a. globalization strategy b. standardization strategy c. export strategy d. multidomestic strategy ANSWER: a Feedback: The globalization strategy means that product design, manufacturing, and RATIONALE: marketing strategy are standardized throughout the world, which is less costly than creating different products for different markets. For example, Black & Decker became much more competitive internationally when it standardized its line of power hand tools.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-04 - 06-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Designing Structure to Fit Global Strategy KEYWORDS: Bloom’s: Remember 12. Which of the following is true of a globalization strategy? a. It encourages product design, assembly, and marketing tailored to the specific needs of each country. b. It can save a company money because it helps reap economy-of-scale efficiencies by standardizing product design and manufacturing.

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c. It divides the world into geographic regions, with each geographic division reporting to the CEO. d. It works best when pressure for decision making balances the interests of both product standardization and geographic localization.

ANSWER: b Feedback: A globalization strategy can save a company money because it helps reap RATIONALE: economy-of-scale efficiencies by standardizing product design and manufacturing, using common suppliers, introducing products around the world faster, coordinating prices, and eliminating overlapping facilities.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-04 - 06-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Designing Structure to Fit Global Strategy KEYWORDS: Bloom’s: Understand 13. A(n) _____ means that competition in each country is handled independently of competition in other countries. a. globalization strategy b. standardization strategy c. export strategy d. multidomestic strategy ANSWER: d Feedback: A multidomestic strategy means that competition in each country is handled RATIONALE: independently of competition in other countries. Thus, a multidomestic strategy would encourage product design, assembly, and marketing tailored to the specific needs of each country.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-04 - 06-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Designing Structure to Fit Global Strategy KEYWORDS: Bloom’s: Remember 14. Which of the following is true of a multidomestic strategy? a. It allows a company to take responsibility for global operations in its specific product area. b. It encourages product design, assembly, and marketing tailored to the specific needs of each country. c. It delegates responsibility and decision-making authority in some areas, such as adapting products or services to meet local needs. d. It enables an organization to achieve multinational flexibility and rapid response.

ANSWER: b Feedback: A multidomestic strategy means that competition in each country is handled RATIONALE: independently of competition in other countries. Thus, a multidomestic strategy would encourage product design, assembly, and marketing tailored to the specific needs of each country.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-04 - 06-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Designing Structure to Fit Global Strategy KEYWORDS: Bloom’s: Understand 15. Which of the following is true of international divisions?

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a. They are typically organized along functional or product lines. b. They move organizations from more sophisticated international operations to domestic divisions. c. They have their own hierarchy to handle businesses in various countries. d. They sell products and services created by international operations in domestic markets.

ANSWER: c Feedback: As companies begin to explore international opportunities, they typically start with RATIONALE: an export department that grows into an international division. The international division has its own hierarchy to handle business (licensing, joint ventures) in various countries, selling the products and services created by the domestic divisions, opening subsidiary plants, and in general moving the organization into more sophisticated international operations.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-04 - 06-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Designing Structure to Fit Global Strategy KEYWORDS: Bloom’s: Understand 16. Which of the following is a difference between the international division and the domestic division of a company? a. The international division uses a global matrix structure, while the domestic division does not use a global matrix structure. b. The international division is organized according to geographic interests, while the domestic division is typically organized along functional or product lines. c. The international division is placed above other divisions and departments within the company, while the domestic division has a status equal to other major departments or divisions within the company. d. The international division does not have its own hierarchy to handle business, while the domestic division has its own hierarchy to handle business.

ANSWER: b Feedback: The international division has a status equal to the other major departments or RATIONALE: divisions within the company. Whereas the domestic divisions are typically organized along functional or product lines, the international division is organized according to geographic interests.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-05 - 06-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Designing Structure to Fit Global Strategy KEYWORDS: Bloom’s: Understand 17. Which of the following structures is great for standardizing production and sales around the globe? a. Global matrix structure b. Global product structure c. Global dynamic structure d. Global geographic structure ANSWER: b Feedback: In a global product structure, the product divisions take responsibility for global RATIONALE: operations in their specific product area. The product structure is great for standardizing production and sales around the globe.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-05 - 06-05 NATIONAL STANDARDS: United States - AACSB: Analytic Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

Designing Structure to Fit Global Strategy Bloom’s: Understand

18. Which of the following is true of a global product structure? a. It provides a fairly straightforward way to effectively manage a variety of businesses and products around the world. b. It provides a way to achieve vertical and horizontal coordination simultaneously along two dimensions. c. It works best when pressure for decision making balances the interests of both product standardization and geographic localization. d. It enables a global firm to achieve aspects of both global uniformity and local diversification and responsiveness.

ANSWER: a Feedback: In a global product structure, the product divisions take responsibility for global RATIONALE: operations in their specific product area. It provides a fairly straightforward way to effectively manage a variety of businesses and products around the world.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-05 - 06-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Designing Structure to Fit Global Strategy KEYWORDS: Bloom’s: Understand 19. Companies that use a _____ have typically been those with mature product lines and stable technologies. a. global dynamic structure b. global geographic structure c. global matrix structure d. global product structure ANSWER: b Feedback: The global geographic structure divides the world into geographic regions, with RATIONALE: each geographic division reporting to the CEO. Companies that use the global geographic structure have typically been those with mature product lines and stable technologies.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-05 - 06-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Designing Structure to Fit Global Strategy KEYWORDS: Bloom’s: Understand 20. Which of the following is true of a global matrix structure? a. It coordinates sales and marketing initiatives across all geographic locations. b. It divides the world into geographic regions, with each geographic division reporting to the CEO. c. It provides a fairly straightforward way to effectively manage a variety of businesses and products around the world. d. It provides a way to achieve vertical and horizontal coordination simultaneously along two dimensions.

ANSWER: d Feedback: A global matrix structure provides a way to achieve vertical and horizontal RATIONALE: coordination simultaneously along two dimensions. The matrix works best when pressure for decision making balances the interests of both product standardization and geographic localization and when coordination to share resources is important.

POINTS:

1

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LEARNING OBJECTIVES: ORGT.DAFT.16.06-05 - 06-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Designing Structure to Fit Global Strategy KEYWORDS: Bloom’s: Understand 21. In a _____, for multinational corporations, the geographic distances for communication are greater and coordination is more complex than in other structures. a. global matrix structure b. global geographic structure c. global product structure d. global dynamic structure ANSWER: a Feedback: In a global matrix structure, for multinational corporations, the geographic RATIONALE: distances for communication are greater and coordination is more complex. The matrix works best when pressure for decision making balances the interests of both product standardization and geographic localization and when coordination to share resources is important.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-05 - 06-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Designing Structure to Fit Global Strategy KEYWORDS: Bloom’s: Remember 22. The members of _____ come from different countries and meet face to face. a. multidomestic teams b. work teams c. virtual global teams d. intercultural teams ANSWER: d Feedback: Typically, teams are of two types: intercultural teams, whose members come from RATIONALE: different countries and meet face to face, and virtual global teams, whose members remain in separate locations around the world and conduct their work electronically.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-06 - 06-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Additional Global Coordination Mechanism KEYWORDS: Bloom’s: Remember 23. In which of the following teams do members remain in separate locations around the world and conduct their work electronically? a. Virtual global teams b. Work teams c. Multidomestic teams d. Intercultural teams ANSWER: a Feedback: Typically, teams are of two types: intercultural teams, whose members come from RATIONALE: different countries and meet face to face, and virtual global teams, whose members remain in separate locations around the world and conduct their work electronically.

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POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-06 - 06-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Additional Global Coordination Mechanism KEYWORDS: Bloom’s: Remember 24. Which of the following is true of functional managers in successful international firms? a. They are involved in identifying and linking an organization’s expertise and resources worldwide. b. They coordinate various functional activities located within the country to meet the problems, opportunities, needs, and trends in the local market. c. They enable an organization to achieve multinational flexibility and rapid response. d. They help with the transfer of ideas, trends, products, and technologies that arise in one country.

ANSWER: a Feedback: In successful international firms, the role of top functional managers is expanded RATIONALE: to include responsibility for coordinating across countries, identifying and linking the organization’s expertise and resources worldwide.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-06 - 06-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Additional Global Coordination Mechanisms KEYWORDS: Bloom’s: Understand 25. Which of the following is a difference between functional managers and country managers? a. Functional managers provide integrated solutions for a large retail customer, while country managers provide integrated solutions for a small retail customer. b. Functional managers enable an organization to achieve multinational flexibility and rapid response, while country managers identify and link an organization’s expertise and resources worldwide. c. Functional managers coordinate information and activities related to key customer accounts, while country managers provide coordination on a regional basis that might include several countries. d. Functional managers coordinate across countries, while country managers coordinate across functions.

ANSWER: d Feedback: Whereas functional managers coordinate across countries, country managers RATIONALE: coordinate across functions. In successful international firms, the role of top functional managers is expanded to include responsibility for coordinating across countries, identifying and linking the organization’s expertise and resources worldwide. A country manager for an international firm has to coordinate all the various functional activities located within the country to meet the problems, opportunities, needs, and trends in the local market, enabling the organization to achieve multinational flexibility and rapid response.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-06 - 06-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Additional Global Coordination Mechanism KEYWORDS: Bloom’s: Understand 26. Which of the following is true of country managers? a. They identify and link an organization’s expertise and resources worldwide. b. They enable a manufacturing organization to provide knowledge and integrated solutions across multiple businesses, divisions, and countries for a large retail customer. c. They enable an organization to achieve multinational flexibility and rapid response.

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d. They reach out to various parts of the organization to resolve problems and coordinate activities across groups, divisions, or countries.

ANSWER: c Feedback: A country manager for an international firm has to coordinate all the various RATIONALE: functional activities located within the country to meet the problems, opportunities, needs, and trends in the local market, enabling the organization to achieve multinational flexibility and rapid response.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-06 - 06-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Additional Global Coordination Mechanisms KEYWORDS: Bloom’s: Understand 27. _____ provide coordination on a regional basis that might include several countries. a. Business integrators b. Network coordinators c. Functional managers d. Country managers ANSWER: a Feedback: Some organizations use business integrators to provide coordination on a RATIONALE: regional basis that might include several countries. These managers reach out to various parts of the organization to resolve problems and coordinate activities across groups, divisions, or countries.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-06 - 06-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Additional Global Coordination Mechanism KEYWORDS: Bloom’s: Remember 28. The _____ reflects the ultimate in both organizational complexity, with many diverse units, and organizational coordination, with mechanisms for integrating the varied parts. a. transformative model b. transnational model c. global model d. multidomestic model ANSWER: b Feedback: The transnational model represents the most advanced kind of international RATIONALE: organization. It reflects the ultimate in both organizational complexity, with many diverse units, and organizational coordination, with mechanisms for integrating the varied parts.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-07 - 06-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Transnational Model of Organization KEYWORDS: Bloom’s: Remember 29. _____ compel units to work together for the good of their own unit as well as the overall organization. a. Global teams b. Cross-subsidiary teams Cengage Learning Testing, Powered by Cognero

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c. Transnational teams d. Intercultural teams ANSWER: b Feedback: Mechanisms such as cross-subsidiary teams compel units to work together for the RATIONALE: good of their own unit as well as the overall organization. Rather than being completely selfsufficient, each group has to cooperate to achieve its own goals.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-07 - 06-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Transnational Model of Organization KEYWORDS: Bloom’s: Remember 30. The transnational model operates on a principle of _____. a. flexible centralization b. dynamic centralization c. global standardization d. local responsiveness ANSWER: a Feedback: The transnational model operates on a principle of flexible centralization. It may RATIONALE: centralize some functions in one country, some in another, yet decentralize still other functions among its many geographically dispersed operations.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-07 - 06-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Transnational Model of Organization KEYWORDS: Bloom’s: Remember 31. Companies that have a presence in multiple countries gain marketing power and synergy compared to the same-size firm that has a presence in fewer countries. a. True b. False ANSWER: True Feedback: Companies that have a presence in multiple countries gain marketing power and RATIONALE: synergy compared to the same-size firm that has a presence in fewer countries. For example, an advertising agency with a presence in several global markets gains a competitive edge serving large companies that span the globe.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-01 - 06-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Entering the Global Arena KEYWORDS: Bloom’s: Understand 32. In stage two of international development, the international stage, a company takes exports seriously and begins to think multidomestically. a. True b. False ANSWER: True Feedback: In stage two of international development, the international stage, a company RATIONALE: Cengage Learning Testing, Powered by Cognero

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takes exports seriously and begins to think multidomestically. Multidomestic means competitive issues in each country are independent of other countries; the company deals with each country individually.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-01 - 06-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Entering the Global Arena KEYWORDS: Bloom’s: Understand 33. When organizations enter the international arena, they encounter a lower level of internal and external complexity than anything experienced on the domestic front. a. True b. False ANSWER: False Feedback: When organizations enter the international arena, they encounter a greater level RATIONALE: of internal and external complexity than anything experienced on the domestic front.

Companies have to create a structure to operate in numerous countries that differ in economic development, language, political systems and government regulations, cultural norms and values, and infrastructure such as transportation and communication facilities.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-03 - 06-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Challenges of Global Design KEYWORDS: Bloom’s: Understand 34. Trickle-up innovation involves companies paying attention more than ever to the need for mechanisms that encourage sharing across a domestic enterprise. a. True b. False ANSWER: False Feedback: Trickle-up innovation involves companies paying attention more than ever to the RATIONALE: need for mechanisms that encourage sharing across the international enterprise.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-03 - 06-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Challenges of Global Design KEYWORDS: Bloom’s: Understand 35. In general, services are less suitable for globalization because different customs and habits often require a different approach to providing service. a. True b. False ANSWER: True Feedback: Some products, such as Coca-Cola, are naturals for globalization because only RATIONALE: advertising and marketing need to be tailored for different regions. In general, services are less suitable for globalization because different customs and habits often require a different approach to providing service.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-04 - 06-04 Cengage Learning Testing, Powered by Cognero

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NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Designing Structure to Fit Global Strategy KEYWORDS: Bloom’s: Understand 36. A globalization strategy can save a company money because it helps reap economy-of-scale efficiencies. a. True b. False ANSWER: True Feedback: A globalization strategy can save a company money because it helps reap RATIONALE: economy-of-scale efficiencies by standardizing product design and manufacturing, using common suppliers, introducing products around the world faster, coordinating prices, and eliminating overlapping facilities.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-04 - 06-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Designing Structure to Fit Global Strategy KEYWORDS: Bloom’s: Understand 37. A global matrix structure is most suitable when companies need to respond to both global and local opportunities simultaneously. a. True b. False ANSWER: True Feedback: In many instances, companies need to respond to both global and local RATIONALE: opportunities simultaneously, in which case a global matrix structure can be used. Part of the product line may need to be standardized globally and other parts tailored to the needs of local countries.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-05 - 06-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Designing Structure to Fit Global Strategy KEYWORDS: Bloom’s: Understand 38. In a global product structure, the product divisions take responsibility for global operations in their specific product area. a. True b. False ANSWER: True Feedback: A global matrix structure provides a way to achieve vertical and horizontal RATIONALE: coordination simultaneously along two dimensions. The matrix works best when pressure for decision making balances the interests of both product standardization and geographic localization and when coordination to share resources is important.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-05 - 06-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Designing Structure to Fit Global Strategy KEYWORDS: Bloom’s: Understand 39. A global matrix structure provides a way to achieve only horizontal coordination along two dimensions.

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a. True b. False ANSWER: RATIONALE:

False Feedback: A global matrix structure provides a way to achieve vertical and horizontal coordination simultaneously along two dimensions. The matrix works best when pressure for decision making balances the interests of both product standardization and geographic localization and when coordination to share resources is important.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-05 - 06-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Designing Structure to Fit Global Strategy KEYWORDS: Bloom’s: Understand 40. A global matrix structure works best when coordination to share resources is less important. a. True b. False ANSWER: False Feedback: A global matrix structure works best when pressure for decision making balances RATIONALE: the interests of both product standardization and geographic localization and when coordination to share resources is important. The matrix can support a mixed globalization and multidomestic strategy.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-05 - 06-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Designing Structure to Fit Global Strategy KEYWORDS: Bloom’s: Understand 41. Global teams are cross-border work groups made up of multiskilled, multinational members whose activities span multiple countries. a. True b. False ANSWER: True Feedback: Global teams are cross-border work groups made up of multiskilled, multinational RATIONALE: members whose activities span multiple countries. They are also called transnational teams.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-06 - 06-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Additional Global Coordination Mechanisms KEYWORDS: Bloom’s: Remember 42. In intercultural teams, members remain in separate locations around the world and conduct their work electronically. a. True b. False ANSWER: False Feedback: Global teams are of two types: intercultural teams, whose members come from RATIONALE: different countries and meet face to face, and virtual global teams, whose members remain in separate locations around the world and conduct their work electronically.

POINTS:

1

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LEARNING OBJECTIVES: ORGT.DAFT.16.06-06 - 06-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Additional Global Coordination Mechanisms KEYWORDS: Bloom’s: Understand 43. In virtual global teams, members come from different countries and meet face to face. a. True b. False ANSWER: False Feedback: Global teams are of two types: intercultural teams, whose members come from RATIONALE: different countries and meet face to face, and virtual global teams, whose members remain in separate locations around the world and conduct their work electronically.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-06 - 06-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Additional Global Coordination Mechanisms KEYWORDS: Bloom’s: Understand 44. Without strong leadership, highly autonomous divisions can begin to act like coordinated parts of a global whole rather than independent companies. a. True b. False ANSWER: False Feedback: Without strong leadership, highly autonomous divisions can begin to act like RATIONALE: independent companies rather than coordinated parts of a global whole. To counteract this, top management may delegate responsibility and decision-making authority in some areas, such as adapting products or services to meet local needs, while maintaining strong control through centralized systems in other areas to provide the coordination and integration needed.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-06 - 06-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Additional Global Coordination Mechanisms KEYWORDS: Bloom’s: Understand 45. Plans, schedules, and formal rules and procedures can help ensure greater communication among divisions and with headquarters. a. True b. False ANSWER: True Feedback: Plans, schedules, and formal rules and procedures can help ensure greater RATIONALE: communication among divisions and with headquarters as well as foster cooperation and synergy among far-flung units to achieve the organization’s goals in a cost-efficient way.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-06 - 06-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Additional Global Coordination Mechanisms KEYWORDS: Bloom’s: Understand Cengage Learning Testing, Powered by Cognero

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46. Country managers help with the transfer of ideas, trends, products, and technologies that arise in one country and might have significance on a broader scale. a. True b. False ANSWER: True Feedback: Whereas functional managers coordinate across countries, country managers RATIONALE: coordinate across functions. Country managers also help with the transfer of ideas, trends, products, and technologies that arise in one country and might have significance on a broader scale.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-06 - 06-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Additional Global Coordination Mechanisms KEYWORDS: Bloom’s: Understand 47. Network coordinators provide coordination on a regional basis that might include several countries. a. True b. False ANSWER: False Feedback: Some organizations use business integrators to provide coordination on a RATIONALE: regional basis that might include several countries. These managers reach out to various parts of the organization to resolve problems and coordinate activities across groups, divisions, or countries.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-06 - 06-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Additional Global Coordination Mechanisms KEYWORDS: Bloom’s: Understand 48. Network coordinators coordinate information and activities related to key customer accounts. a. True b. False ANSWER: True Feedback: One of the coordination roles is that of formal network coordinator to coordinate RATIONALE: information and activities related to key customer accounts. These coordinators would enable a manufacturing organization, for example, to provide knowledge and integrated solutions across multiple businesses, divisions, and countries for a large retail customer.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-06 - 06-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Additional Global Coordination Mechanisms KEYWORDS: Bloom’s: Understand 49. The sharing of ideas and technological innovations across units stimulates creativity and the development of new products and services. a. True b. False ANSWER: True Feedback: The sharing of ideas and technological innovations across units stimulates RATIONALE: Cengage Learning Testing, Powered by Cognero

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creativity and the development of new products and services.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-06 - 06-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Additional Global Coordination Mechanisms KEYWORDS: Bloom’s: Understand 50. The transnational model is useful for large, multinational companies with subsidiaries in many countries that try to exploit both global and local advantages. a. True b. False ANSWER: True Feedback: The transnational model represents the most advanced kind of international RATIONALE: organization. It reflects the ultimate in both organizational complexity, with many diverse units, and organizational coordination, with mechanisms for integrating the varied parts. The transnational model is useful for large, multinational companies with subsidiaries in many countries that try to exploit both global and local advantages.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-07 - 06-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Transnational Model of Organization KEYWORDS: Bloom’s: Remember 51. The management philosophy of the transnational model is based on full divisional independence rather than interdependence. a. True b. False ANSWER: False Feedback: The management philosophy of the transnational model is based on RATIONALE: interdependence rather than either full divisional independence or total dependence of these units on headquarters for decision making and control.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-07 - 06-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Transnational Model of Organization KEYWORDS: Bloom’s: Understand 52. The transnational model requires that managers be flexible in determining structural needs based on the benefits to be gained. a. True b. False ANSWER: True Feedback: The transnational model requires that managers be flexible in determining RATIONALE: structural needs based on the benefits to be gained. Some functions, products, and geographic regions by their nature may need more central control and coordination than others. In addition, coordination and control mechanisms will change over time to meet new needs or competitive threats.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-07 - 06-07 Cengage Learning Testing, Powered by Cognero

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NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Transnational Model of Organization KEYWORDS: Bloom’s: Understand 53. In a transnational structure, managers have a strategic role only for their division. a. True b. False ANSWER: False Feedback: In traditional structures, managers have a strategic role only for their division. In a RATIONALE: transnational structure, various centers and subsidiaries can shape the company from the bottom up by developing creative responses and initiating programs in response to local needs, then dispersing those innovations worldwide.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-07 - 06-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Transnational Model of Organization KEYWORDS: Bloom’s: Understand 54. In traditional structures, various centers and subsidiaries can shape the company from the bottom up by developing creative responses. a. True b. False ANSWER: False Feedback: In traditional structures, managers have a strategic role only for their division. In a RATIONALE: transnational structure, various centers and subsidiaries can shape the company from the bottom up by developing creative responses and initiating programs in response to local needs, then dispersing those innovations worldwide.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-07 - 06-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Transnational Model of Organization KEYWORDS: Bloom’s: Understand 55. In a transnational company, unification and coordination are achieved primarily through formal structures and systems rather than through shared vision and values. a. True b. False ANSWER: False Feedback: In a transnational company, unification and coordination are achieved primarily RATIONALE: through corporate culture, shared vision and values, and management style, rather than through formal structures and systems.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-07 - 06-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Transnational Model of Organization KEYWORDS: Bloom’s: Understand 56. Discuss in detail the three primary factors that motivate companies to expand internationally.

ANSWER: In general, three primary factors motivate companies to expand internationally: economies of Cengage Learning Testing, Powered by Cognero

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scale, economies of scope, and low-cost production factors.

Economies of Scale—Building a global presence expands an organization’s scale of operations, enabling it to realize economies of scale. The trend toward large organizations was initially sparked by the Industrial Revolution, which created pressure in many industries for larger factories that could seize the benefits of economies of scale offered by new technologies and production methods. Through large-volume production, these industrial giants were able to achieve the lowest possible cost per unit of production. However, for many companies, domestic markets no longer provide the high level of sales needed to maintain enough volume to achieve scale economies.

Economies of Scope—A second factor is the enhanced potential for exploiting economies of scope. Scope refers to the number and variety of products and services a company offers as well as the number and variety of regions, countries, and markets it serves.

Low-Cost Production Factors—The third major force motivating global expansion relates to factors of production. One of the earliest, and still one of the most powerful, motivations for U.S. companies to invest abroad is the opportunity to obtain raw materials, labor, and other resources at the lowest possible cost. Organizations have long turned overseas to secure raw materials that were scarce or unavailable in their home country.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-01 - 06-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Entering the Global Arena KEYWORDS: Bloom’s: Understand 57. Describe the four stages of international development.

ANSWER: The four stages of international development are the domestic stage, the international stage, the multinational stage, and the global stage.

In stage one, the domestic stage, the company is domestically oriented, but managers are aware of the global environment and may want to consider initial foreign involvement to expand production volume and realize economies of scale. Market potential is limited and is primarily in the home country. The structure of the company is domestic, typically functional or divisional, and initial foreign sales is handled through an export department. The details of freight forwarding, customs problems, and foreign exchange are handled by outsiders.

In stage two, the international stage, the company takes exports seriously and begins to think multidomestically. Multidomestic means competitive issues in each country are independent of other countries; the company deals with each country individually. The concern is with international competitive positioning compared with other firms in the industry. At this point, an international division has replaced the export department, and specialists are hired to handle sales, service, and warehousing abroad. Multiple countries are identified as a potential market.

In stage three, the multinational stage, the company has extensive experience in a number of international markets and has established marketing, manufacturing, or research and development (R&D) facilities in several foreign countries. The organization obtains a large percentage of revenues from sales outside the home country. Explosive growth occurs as international operations take off, and the company has business units scattered around the world along with suppliers, manufacturers, and distributors.

The fourth and ultimate stage is the global stage, which means the company transcends any single country. The business is not merely a collection of domestic industries; rather, subsidiaries are interlinked to the point where competitive position in one country significantly influences activities in other countries. Truly global companies no longer think of themselves as having a single home country and, indeed, have been called stateless corporations. This represents a new and dramatic evolution from the multinational company of the 1960s and 1970s. At this stage, ownership, control, and top management tend to be Cengage Learning Testing, Powered by Cognero

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dispersed among several nationalities.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-02 - 06-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Entering the Global Arena KEYWORDS: Bloom’s: Remember 58. What is a joint venture? Explain why companies seek joint ventures.

ANSWER: A joint venture is a separate entity created with two or more active firms as sponsors. This is a popular approach to sharing development and production costs and penetrating new markets. Joint ventures may be with either customers or competitors. For example, competing firms Sprint, Deutsche Telecom, and Telecom France cooperate with each other and with several smaller firms in a joint venture that serves the telecommunication needs of global corporations in 65 countries.

Companies often seek joint ventures to achieve production cost savings through economies of scale, to share complementary technological strengths, to distribute new products and services through another country’s distribution channels, or to take advantage of a partner’s knowledge of local markets.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-02 - 06-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Entering the Global Arena KEYWORDS: Bloom’s: Understand 59. Why are functional structures used less frequently worldwide?

ANSWER: Although functional structures are often used domestically, they are less frequently used to manage a worldwide business. Lines of functional hierarchy running around the world would extend too long, so some form of product or geographic structure is used to subdivide the organization into smaller units. Firms typically start with an international department and, depending on their strategy, later use product or geographic division structures or a matrix.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-04 - 06-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Designing Structure to Fit Global Strategy KEYWORDS: Bloom’s: Understand 60. What is a global product structure?

ANSWER: In a global product structure, the product divisions take responsibility for global operations in their specific product area. This is one of the most commonly used structures through which managers attempt to achieve global goals because it provides a fairly straightforward way to effectively manage a variety of businesses and products around the world. Managers in each product division can focus on organizing for international operations as they see fit and directing employees’ energy toward their own division’s unique set of global problems or opportunities. In addition, the structure provides top managers at headquarters with a broad perspective on competition, enabling the entire corporation to respond more rapidly to a changing global environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-05 - 06-05 NATIONAL STANDARDS: United States - AACSB: Analytic Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

Designing Structure to Fit Global Strategy Bloom’s: Remember

61. What are global teams? What are the two types of global teams?

ANSWER: Global teams, also called transnational teams, are cross-border work groups made up of multiskilled, multinational members whose activities span multiple countries. Typically, teams are of two types: intercultural teams, whose members come from different countries and meet face to face, and virtual global teams, whose members remain in separate locations around the world and conduct their work electronically.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-06 - 06-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Additional Global Coordination Mechanisms KEYWORDS: Bloom’s: Remember 62. Discuss in detail the role of country managers.

ANSWER: A country manager for an international firm has to coordinate all the various functional activities located within the country to meet the problems, opportunities, needs, and trends in the local market, enabling the organization to achieve multinational flexibility and rapid response. The country manager in Venezuela for a global consumer products firm such as Colgate-Palmolive would coordinate everything that goes on in that country, from manufacturing to HR to marketing, to ensure that activities meet the language, cultural, government, and legal requirements of Venezuela. The country manager in Ireland or Canada would do the same for those countries. Country managers also help with the transfer of ideas, trends, products, and technologies that arise in one country and might have significance on a broader scale.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-06 - 06-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Additional Global Coordination Mechanisms KEYWORDS: Bloom’s: Understand 63. Discuss the benefits of inter-unit coordination.

ANSWER: Benefits that result from inter-unit collaboration include the following: Cost savings—Collaboration can produce real, measurable results in the way of cost savings from the sharing of best practices across global divisions.

Better decision making—By sharing information and advice across divisions, managers can make better business decisions that support their own unit as well as the organization as a whole.

Greater revenues—By sharing expertise and products among various divisions, organizations can reap increased revenues.

Increased innovation—The sharing of ideas and technological innovations across units stimulates creativity and the development of new products and services.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-06 - 06-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Additional Global Coordination Mechanisms KEYWORDS: Bloom’s: Understand 64. Discuss the challenges addressed by the transnational model of organization.

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ANSWER:

The units of a transnational organization network are far-flung. Achieving coordination, a sense of participation and involvement by subsidiaries, and a sharing of information, knowledge, new technology, and customers is a tremendous challenge. In addition, some subsidiaries become so large that they no longer fit a narrow strategic role defined by headquarters. While being part of a larger organization, individual units need some autonomy for themselves and the ability to have an impact on other parts of the organization. The transnational model addresses these challenges by creating an integrated network of individual operations that are linked together to achieve the multidimensional goals of the overall organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-07 - 06-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Transnational Model of Organization KEYWORDS: Bloom’s: Understand 65. List the characteristics that distinguish the transnational organization from other global organization forms such as the matrix.

ANSWER: The following characteristics distinguish the transnational organization from other global organization forms such as the matrix: 1. Assets and resources are dispersed worldwide into highly specialized operations that are linked together through interdependent relationships.

2. Structures are flexible and ever-changing. The transnational operates on a principle of flexible centralization.

3. Subsidiary managers initiate strategy and innovations that become strategy for the corporation as a whole.

4. Unification and coordination are achieved primarily through corporate culture, shared vision and values, and management style, rather than through formal structures and systems.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.06-07 - 06-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Transnational Model of Organization KEYWORDS: Bloom’s: Understand

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1. An organization's _____ is the work process that is directly related to the organization's mission. a. core technology b. mediating technology c. long-linked technology d. noncore technology ANSWER: a Feedback: An organization’s core technology is the work process that is directly related to the RATIONALE: organization’s mission, such as teaching in a high school, medical services in a health clinic, or manufacturing at American Axle & Manufacturing (AAM).

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-01 - 07-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Core Organization Manufacturing Technology KEYWORDS: Bloom’s: Remember 2. Teaching in a high school and medical services in a health clinic are referred to as an organization’s _____ technology. a. technical b. Core c. Craft d. reciprocal ANSWER: b Feedback: Teaching in a high school and medical services in a health clinic are referred to as RATIONALE: an organization’s core technology. An organization’s core technology is the work process that is directly related to the organization’s mission

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-01 - 07-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Core Organization Manufacturing Technology KEYWORDS: Bloom’s: Understand 3. Which one of the following basic technology groups relies heavily on the human operator and is not highly mechanized? a. Large-batch production b. Assembly line production c. Continuous-process production d. Small-batch production ANSWER: d Feedback: Small-batch production relies heavily on the human operator; it is thus not highly RATIONALE: mechanized.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-03 - 07-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Core Organization Manufacturing Technology KEYWORDS: Bloom’s: Remember 4. _____ is a manufacturing process characterized by long production runs of standardized parts, and output often goes into inventory from which orders are filled because customers do not have special needs. a. Continuous-process production Cengage Learning Testing, Powered by Cognero

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b. Unit production c. Large-batch production d. Small-batch production ANSWER: c Feedback: Large-batch production is a manufacturing process characterized by long RATIONALE: production runs of standardized parts. Output often goes into inventory from which orders are filled because customers do not have special needs.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-03 - 07-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Core Organization Manufacturing Technology KEYWORDS: Bloom’s: Remember 5. Chemical plants, oil refineries, liquor producers, pharmaceuticals, and nuclear power plants are examples of _____. a. unit production b. mass production c. large-batch production d. continuous-process production ANSWER: d Feedback: Chemical plants, oil refineries, liquor producers, pharmaceuticals, and nuclear RATIONALE: power plants are examples of continuous-process production.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-03 - 07-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Core Organization Manufacturing Technology KEYWORDS: Bloom’s: Understand 6. Which of the following links together manufacturing components that previously stood alone? a. Unit production systems b. Flexible manufacturing systems c. Subtractive manufacturing systems d. Rigid production systems ANSWER: b Feedback: Also called digital factories, computer-integrated manufacturing, flexible RATIONALE: manufacturing systems, advanced manufacturing technology, or agile manufacturing, smart factories link manufacturing components that previously stood alone.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-04 - 07-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Contemporary Applications KEYWORDS: Bloom’s: Understand 7. In the _____ component of a smart factory, computers are used to assist in the drafting, creation, and engineering of new parts. a. manufacturing processes management b. computer-aided manufacturing c. computer-aided design Cengage Learning Testing, Powered by Cognero

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d. product life cycle management ANSWER: c Feedback: In the computer-aided design component of a smart factory, computers are used RATIONALE: to assist in the drafting, design, and engineering of new parts.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-04 - 07-04 NATIONAL STANDARDS: United States - AACSB: Technology TOPICS: Contemporary Application KEYWORDS: Bloom’s: Remember 8. _____ is a technology that builds objects one successive layer of material at a time. a. Additive manufacturing b. CAD c. CAM d. Lean manufacturing ANSWER: a Feedback: 3-D Printing, also known as additive manufacturing, builds objects one successive RATIONALE: layer of material at a time.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-04 - 07-04 NATIONAL STANDARDS: United States - AACSB: Technology TOPICS: Contemporary Applications KEYWORDS: Bloom’s: Remember 9. _____ is a highly ambitious quality standard that specifies a goal of no more than 3.4 defects per million parts. a. Kaizen b. Joint optimization c. Mass customization d. Six Sigma ANSWER: d Feedback: Six Sigma is a highly ambitious quality standard that specifies a goal of no more RATIONALE: than 3.4 defects per million parts.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-04 - 07-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Contemporary Applications KEYWORDS: Bloom’s: Remember 10. The awesome advantage of a smart factory is that: a. little training is required. b. employee involvement is very less. c. one product can be produced at a time, making it easier for employees to operate the machines involved in production. d. products of different sizes, types, and customer requirements freely intermingle on the assembly line.

ANSWER: d Feedback: The awesome advantage of a smart factory is that products of different sizes, RATIONALE: types, and customer requirements freely intermingle on the assembly line, enabling large Cengage Learning Testing, Powered by Cognero

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factories to deliver a wide range of custom-made products at low mass-production costs.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-04 - 07-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Contemporary Applications KEYWORDS: Bloom’s: Understand 11. Which of the following statements is true about smart factories? a. The span of control is wide in smart factories. b. The decision making is centralized in smart factories. c. The customer demand is stable in smart factories. d. The tasks are adaptive and craftlike in smart factories.

ANSWER: d Feedback: The tasks in smart factories are adaptive and craftlike.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-04 - 07-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Contemporary Applications KEYWORDS: Bloom’s: Understand 12. Which of the following is not true regarding mass production and a smart factory? a. Mass production has many levels of control, while the smart factory has few. b. The span of control in mass production is narrow, while the span of control in the smart factory is wide. c. Tasks in mass production are routine and repetitive, while tasks in the smart factory are adaptive and creative. d. Decision making is centralized in mass production, while it is decentralized in the smart factory.

ANSWER: b Feedback: The span of control in mass production is wide, while the span of control in the RATIONALE: smart factory is narrow.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-04 - 07-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Contemporary Applications KEYWORDS: Bloom’s: Understand 13. Which of the following is not a characteristic of service technology? a. Delayed response time is acceptable. b. Customer interaction is generally high. c. Human element is very important. d. Quality is perceived and difficult to measure.

ANSWER: a Feedback: One of the characteristics of service technology is that rapid response time is RATIONALE: usually necessary.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-05 - 07-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Core Organization Service Technology Cengage Learning Testing, Powered by Cognero

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KEYWORDS:

Bloom’s: Understand

14. _____ means providing exactly the service each customer wants and needs. a. Service complexity b. Customized output c. Mass customization d. Joint optimization ANSWER: b Feedback: Customized output means providing exactly the service each customer wants and RATIONALE: needs.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-05 - 07-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Core Organization Service Technology KEYWORDS: Bloom’s: Remember 15. Service organizations can achieve their greatest economies through: a. centralization of services. b. geographic concentration. c. disaggregation into small units located close to customers. d. centralized decision making with a high formalization.

ANSWER: c Feedback: Service organizations’ greatest economies are achieved through disaggregation RATIONALE: into small units that can be located close to customers.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-05 - 07-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Core Organization Service Technology KEYWORDS: Bloom’s: Understand 16. Which of the following did Perrow specify? a. Two dimensions of departmental activities: variety and analyzability b. Three types of interdependence: pooled, sequential, and reciprocal c. Two aspects of the environment that call for a particular organizational structure d. Three categories of technical complexity present in organizations ANSWER: a Feedback: Perrow specified two dimensions of departmental activities that were relevant to RATIONALE: organization structure and processes. The first is the number of exceptions in the work known as variety. The second dimension of technology concerns the analyzability of work activities.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-06 - 07-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Noncore Departmental Technology KEYWORDS: Bloom’s: Understand 17. The frequency of unexpected and novel events that occur in the conversion process is known as: Cengage Learning Testing, Powered by Cognero

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a. complexity. b. accountability. c. variety. d. analyzability.

ANSWER: RATIONALE:

c Feedback: Variety is the frequency of unexpected and novel events that occur in the conversion process.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-06 - 07-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Noncore Departmental Technology KEYWORDS: Bloom’s: Remember 18. The Verification Department of the Internal Revenue Service checks the calculations on returns and notes any discrepancies. According to Perrow, this department fits into the category of _____. a. craft technologies b. routine technologies c. engineering technologies d. nonroutine technologies ANSWER: b Feedback: The Verification Department of the Internal Revenue Service fits into the category RATIONALE: of routine technologies. Routine technologies are characterized by little task variety and the use of objective, computational procedures. The tasks are formalized and standardized.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-06 - 07-06 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Noncore Departmental Technology KEYWORDS: Bloom’s: Apply 19. _____ have high task variety, and the conversion process is not analyzable or well understood. a. Nonroutine technologies b. Routine technologies c. Engineering technologies d. Craft technologies ANSWER: a Feedback: Nonroutine technologies have high task variety, and the conversion process is not RATIONALE: analyzable or well understood.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-06 - 07-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Noncore Departmental Technology KEYWORDS: Bloom’s: Understand 20. Juan works for a college that offers correspondence courses. She works in the mailroom department stuffing envelopes with the replies of professors to students. She then seals the envelopes and puts them in an outgoing bin and there is very little use for creativity. The department has very strict rules and the management process is not flexible. In this context, the department that Juan works for has a(n) _____ design.

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a. mechanistic b. organic c. nonroutine d. unanalyzable ANSWER: RATIONALE:

a Feedback: The department that Juan works for has a mechanistic design. Routine technologies are associated with a mechanistic design, with formal rules and rigid management processes.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-06 - 07-06 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Department Design KEYWORDS: Bloom’s: Apply 21. Baxton Burgers is a chain of fast-food restaurants. It has outlets throughout the world. Each of the outlets is independent and does not communicate with each other, but each of them contributes to the growing success of the restaurant. In this context, the outlets of Baxton Burgers have _____. a. sequential interdependence b. pooled interdependence c. reciprocal interdependence d. successive interdependence ANSWER: b Feedback: The outlets of Baxton Burgers have pooled interdependence. Pooled RATIONALE: interdependence is the lowest form of interdependence among departments. In this form, work does not flow between units. Each department is part of an organization and contributes to the common good of the organization, but works independently.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-07 - 07-07 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Workflow Interdependence among Departments KEYWORDS: Bloom’s: Apply 22. A _____ provides products or services that link clients from the external environment and, in so doing, allows each department to work independently. a. craft technology b. pooled technology c. routine technology d. mediating technology ANSWER: d Feedback: A mediating technology provides products or services that link clients from the RATIONALE: external environment and, in so doing, allows each department to work independently.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-07 - 07-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Workflow Interdependence among Departments KEYWORDS: Bloom’s: Remember 23. Jenson Motors, a car manufacturing company, decides to change its production operations strategy. In the company, Cengage Learning Testing, Powered by Cognero

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an employee adds a part to the car frame and then sends it to another employee to add another part. This process continues until they get the final product, a complete car. The management wants to divide the employees into teams where each team is responsible for building an entire car. If Jenson Motors implements the change, the interrelationships would change from: a. pooled interdependence on the line to reciprocal interdependence between the teams. b. reciprocal interdependence on the line to sequential interdependence between the teams. c. sequential interdependence on the line to pooled interdependence between the teams. d. sequential interdependence on the line to reciprocal interdependence between teams.

ANSWER: c Feedback: If Jenson Motors implements the change, the interrelationships would change RATIONALE: from sequential interdependence on the line to pooled interdependence between the teams.

In pooled interdependence, each department is part of an organization and contributes to the common good of the organization, but works independently. In sequential interdependence, the first department must perform correctly for the second department to perform correctly.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-07 - 07-07 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Workflow Interdependence among Departments KEYWORDS: Bloom’s: Apply 24. Vintichic, a fashion house, plans to launch its new collection for summer. Each department has a part to play in producing the final product. The designers send the fabric and designs to the tailors, the tailors send the sewed clothes to the department that accessorize the clothes, the accessorizing department sends the clothes to the packaging and shipping department, and finally the packaging and shipping department transports the clothes to their various outlets throughout the world. In this scenario, the type of interdependence exhibited by the departments of the fashion house is _____. a. pooled interdependence b. reciprocal interdependence c. sequential interdependence d. autonomous interdependence ANSWER: c Feedback: In this scenario, the type of interdependence exhibited by the departments of the RATIONALE: fashion house is sequential interdependence. When interdependence is of serial form, with parts produced in one department becoming inputs to another department, it is called sequential interdependence.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-07 - 07-07 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Workflow Interdependence among Departments KEYWORDS: Bloom’s: Apply 25. Sequential interdependence occurs in organizations with what Thompson called _____. a. long-linked technology b. mediating technology c. intensive technology d. routine technology ANSWER: a Feedback: Sequential interdependence occurs in what Thompson called long-linked RATIONALE:

technology, which “refers to the combination in one organization of successive stages of production; each stage of production uses as its inputs the production of the preceding stage

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and produces inputs for the following stage.”

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-07 - 07-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Workflow Interdependence among Departments KEYWORDS: Bloom’s: Understand 26. In football, the interdependence tends to be: a. pooled because management must select individual players and develop their skills. b. sequential because plays are run sequentially and events during the plays occur sequentially. c. reciprocal because mutual adjustments must be made by the players. d. sporadic because it is really a game of individual talents.

ANSWER: b Feedback: In football, interdependence among players is high and tends to be sequential.

RATIONALE: The line first blocks the opponents to enable the backs to run or pass. Plays are performed sequentially from first down to fourth down.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-07 - 07-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Workflow Interdependence among Departments KEYWORDS: Bloom’s: Understand 27. _____ is the highest level of interdependence and exists when the output of operation A is the input to operation B, and the output of operation B is the input back again to operation A. a. Reciprocal interdependence b. Pooled interdependence c. Sequential interdependence d. Routine interdependence ANSWER: a Feedback: Reciprocal interdependence is the highest level of interdependence and exists RATIONALE: when the output of operation A is the input to operation B, and the output of operation B is the input back again to operation A.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-07 - 07-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Workflow Interdependence among Departments KEYWORDS: Bloom’s: Remember 28. Reciprocal interdependence tends to occur in organizations with what Thompson called _____, which provide a variety of products or services in combination to a client. a. craft technologies b. mediating technologies c. intensive technologies d. long-linked technologies ANSWER: c Feedback: Reciprocal interdependence tends to occur in organizations with what Thompson RATIONALE: called intensive technologies, which provide a variety of products or services in combination to a client.

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POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-07 - 07-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Workflow Interdependence among Departments KEYWORDS: Bloom’s: Understand 29. The purpose of the sociotechnical systems approach is to: a. apply the theory of job enlargement. b. increase the amount to pooled interdependence in organizations. c. increase the amount of manual labor used in organizations. d. combine human needs with technical efficiency in job design.

ANSWER: d Feedback: The sociotechnical systems approach recognizes the interaction of technical and RATIONALE: human needs in effective job design, combining the needs of people with an organization’s need for technical efficiency.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-08 - 07-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Sociotechnical Systems KEYWORDS: Bloom’s: Understand 30. The goal of the sociotechnical systems approach is to design an organization for: a. joint optimization. b. reengineering. c. self-regulation of advanced technology. d. strong organization culture.

ANSWER: a Feedback: The goal of the sociotechnical systems approach is to design an organization for RATIONALE: joint optimization, which means that the organization functions best when the social and technical systems are designed to fit the needs of one another.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-08 - 07-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Sociotechnical Systems KEYWORDS: Bloom’s: Understand 31. Core technology is a department work process that is important to an organization but is not directly related to its primary mission. a. True b. False ANSWER: False Feedback: An organization’s core technology is the work process that is directly related to an RATIONALE: organization’s mission.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-01 - 07-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Core Organization Manufacturing Technology Cengage Learning Testing, Powered by Cognero

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KEYWORDS:

Bloom’s: Remember

32. Perrow's study is classified as pertaining to organization-level technology, while Woodward's is classified as pertaining to department-level technology. a. True b. False ANSWER: False Feedback: Woodward's study is classified as pertaining to organization-level technology, RATIONALE: while Perrow's is classified as pertaining to department-level technology.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-02 - 07-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Core Organization Manufacturing Technology KEYWORDS: Bloom’s: Understand 33. Low technical complexity means most of the work is performed by machines. a. True b. False ANSWER: False Feedback: High technical complexity means most of the work is performed by machines.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-03 - 07-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Core Organization Manufacturing Technology KEYWORDS: Bloom’s: Understand 34. Small-batch production is highly mechanized, whereas continuous-process production relies heavily on the human operator. a. True b. False ANSWER: False Feedback: Small-batch production relies heavily on the human operator; it is thus not highly RATIONALE: mechanized. In continuous-process production, the entire process is mechanized.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-03 - 07-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Core Organization Manufacturing Technology KEYWORDS: Bloom’s: Understand 35. Large-batch production is considered to have greater technical complexity than small-batch production on Woodward's scale of technical complexity. a. True b. False ANSWER: True Feedback: Large-batch production is considered to have greater technical complexity than RATIONALE: small-batch production on Woodward's scale of technical complexity.

POINTS:

1

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LEARNING OBJECTIVES: ORGT.DAFT.16.07-03 - 07-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Core Organization Manufacturing Technology KEYWORDS: Bloom’s: Understand 36. Failing to adopt appropriate new technologies to support strategy, or adopting a new technology and failing to realign strategy to match it, can lead to poor performance. a. True b. False ANSWER: True Feedback: Failing to adopt appropriate new technologies to support strategy, or adopting a RATIONALE: new technology and failing to realign strategy to match it, can lead to poor performance.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-03 - 07-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Core Organization Manufacturing Technology KEYWORDS: Bloom’s: Understand 37. Computer-aided manufacturing enables the production line to quickly honor customer requests for changes in product design and product mix. a. True b. False ANSWER: True Feedback: Computer-aided manufacturing enables the production line to quickly honor RATIONALE: customer requests for changes in product design and product mix.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-03 - 07-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Contemporary Applications KEYWORDS: Bloom’s: Understand 38. Six Sigma refers to using mass-production technology to quickly and cost-effectively assemble goods that are uniquely designed to fit the demands of individual customers. a. True b. False ANSWER: False Feedback: Six Sigma is a highly ambitious quality standard that specifies a goal of no more RATIONALE: than 3.4 defects per million parts.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-04 - 07-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Contemporary Applications KEYWORDS: Bloom’s: Remember 39. Kaizen is the implementation of a large number of small, incremental improvements in all areas of an organization on an ongoing basis. a. True b. False Cengage Learning Testing, Powered by Cognero

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ANSWER: RATIONALE:

True Feedback: Kaizen is the implementation of a large number of small, incremental improvements in all areas of an organization on an ongoing basis.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-04 - 07-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Contemporary Applications KEYWORDS: Bloom’s: Remember 40. Products of different sizes, types, and customer requirements freely intermingling on the assembly line is an advantage of a smart factory. a. True b. False ANSWER: True Feedback: Products of different sizes, types, and customer requirements freely intermingling RATIONALE: on the assembly line is an advantage of a smart factory.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-04 - 07-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Contemporary Applications KEYWORDS: Bloom’s: Understand 41. A smart factory has a stable customer demand, whereas mass production has a changing customer demand. a. True b. False ANSWER: False Feedback: A smart factory has a changing customer demand, whereas mass production has RATIONALE: a stable customer demand.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-04 - 07-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Contemporary Applications KEYWORDS: Bloom’s: Understand 42. Service technologies are considered to be labor- and knowledge-intensive, while manufacturing technologies tend to be capital asset-intensive. a. True b. False ANSWER: True Feedback: Service technologies are considered to be labor- and knowledge-intensive, while RATIONALE: manufacturing technologies tend to be capital asset-intensive.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-05 - 07-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Core Organization Service Technology KEYWORDS: Bloom’s: Understand 43. In a service firm, the quality of a service is perceived and cannot be directly measured and compared in the same way Cengage Learning Testing, Powered by Cognero

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that the quality of a tangible product can. a. True b. False ANSWER: True Feedback: In a service firm, the quality of a service is perceived and cannot be directly RATIONALE: measured and compared in the same way that the quality of a tangible product can.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-05 - 07-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Core Organization Service Technology KEYWORDS: Bloom’s: Understand 44. Boundary roles are used extensively in manufacturing firms but rarely used in service firms. a. True b. False ANSWER: True Feedback: Boundary roles are used extensively in manufacturing firms to handle customers RATIONALE: and to reduce disruptions for the technical core. They are used less in service firms because a service is intangible and cannot be passed along by boundary spanners, so service customers must interact directly with technical employees, such as doctors or brokers.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-05 - 07-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Core Organization Service Technology KEYWORDS: Bloom’s: Understand 45. Perrow was most concerned with two aspects of technology: technical complexity and interdependence. a. True b. False ANSWER: False Feedback: Perrow was most concerned with two aspects of technology: variety and RATIONALE: analyzability.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-06 - 07-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Noncore Departmental Technology KEYWORDS: Bloom’s: Remember 46. Routine technologies are characterized by little task variety and the use of objective, computational procedures, whereas engineering technologies tend to be complex because there is substantial variety in the tasks performed. a. True b. False ANSWER: True Feedback: Routine technologies are characterized by little task variety and the use of RATIONALE: objective, computational procedures. Engineering technologies tend to be complex because there is substantial variety in the tasks performed.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-06 - 07-06 Cengage Learning Testing, Powered by Cognero

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NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Noncore Departmental Technology KEYWORDS: Bloom’s: Understand 47. Craft technologies are characterized by a fairly stable stream of activities, but the conversion process is not analyzable or well understood. a. True b. False ANSWER: True Feedback: Craft technologies are characterized by a fairly stable stream of activities, but the RATIONALE: conversion process is not analyzable or well understood.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-06 - 07-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Noncore Departmental Technology KEYWORDS: Bloom’s: Understand 48. In routine technologies, most decision making about task activities is decentralized throughout an organization. a. True b. False ANSWER: False Feedback: In routine technologies, most decision making about task activities is centralized RATIONALE: to management.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-06 - 07-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Noncore Departmental Technology KEYWORDS: Bloom’s: Understand 49. Span of control is the number of employees who report to a single manager or supervisor and is normally influenced by departmental technology. a. True b. False ANSWER: True Feedback: Span of control is the number of employees who report to a single manager or RATIONALE: supervisor. This characteristic is normally influenced by departmental technology.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-06 - 07-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Noncore Departmental Technology KEYWORDS: Bloom’s: Remember 50. Work staff in routine technologies typically require little education or experience, which is congruent with repetitious work activities. a. True b. False ANSWER: True Cengage Learning Testing, Powered by Cognero

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RATIONALE:

Feedback: Work staff in routine technologies typically require little education or experience, which is congruent with repetitious work activities.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-06 - 07-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Noncore Departmental Technology KEYWORDS: Bloom’s: Understand 51. Communication activity and frequency increase as task variety decreases. a. True b. False ANSWER: False Feedback: Communication activity and frequency increase as task variety increases.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-06 - 07-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Noncore Departmental Technology KEYWORDS: Bloom’s: Understand 52. A mediating technology provides products or services that mediate or link clients from the external environment and, in doing so, allows each department to work independently. a. True b. False ANSWER: True Feedback: A mediating technology provides products or services that mediate or link clients RATIONALE: from the external environment and, in so doing, allows each department to work independently.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-07 - 07-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Workflow Interdependence among Departments KEYWORDS: Bloom’s: Remember 53. Sequential interdependence exists when the output of operation A is the input to operation B, and the output of operation B is the input back again to operation A. a. True b. False ANSWER: False Feedback: When interdependence is of serial form, with parts produced in one department RATIONALE: becoming inputs to another department, it is called sequential interdependence.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-07 - 07-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Workflow Interdependence among Departments KEYWORDS: Bloom’s: 54. Pooled interdependencies are given priority after reciprocal interdependencies.

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a. True b. False ANSWER: RATIONALE:

False Feedback: After reciprocal interdependencies the next priority is given to sequential interdependencies, and finally to pooled interdependencies.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-07 - 07-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Workflow Interdependence among Departments KEYWORDS: Bloom’s: Understand 55. The goal of the sociotechnical systems approach is to design an organization for pooled interdependence. a. True b. False ANSWER: False Feedback: The goal of the sociotechnical systems approach is to design an organization for RATIONALE: joint optimization, which means that the organization functions best when the social and technical systems are designed to fit the needs of one another.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-08 - 07-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Sociotechnical Systems KEYWORDS: Bloom’s: Understand 56. Explain the difference between core technology and noncore technology.

ANSWER: An organization’s core technology is the work process that is directly related to the organization’s mission, such as teaching in a high school or medical services in a health clinic. Core technology consists of raw material inputs, a transformation work process (e.g., milling, inspection, assembly) that changes and adds value to the raw material and produces the ultimate product or service output that is sold to consumers in the environment. In today’s large, complex organizations, core work processes vary widely and sometimes can be hard to pinpoint. A core technology can be partly understood by examining the raw materials flowing into the organization, the variability of work activities, the degree to which the production process is mechanized, the extent to which one task depends on another in the workflow, or the number of new product or service outputs.

Organizations are also made up of many departments, each of which may use a different work process (technology) to provide a good or service within the organization. A noncore technology is a department work process that is important to the organization but is not directly related to its primary mission.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-02 - 07-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Core Organization Manufacturing Technology KEYWORDS: Bloom’s: Analyze 57. Discuss the three basic technology groups as categorized in Woodward's scale of technical complexity.

ANSWER: Technical complexity represents the extent of mechanization of the manufacturing process.

High technical complexity means most of the work is performed by machines. Low technical Cengage Learning Testing, Powered by Cognero

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complexity means workers play a larger role in the production process. Woodward’s scale of technical complexity originally had 10 categories. These categories were further consolidated into three basic technology groups, as follows: ∙ Group I: Small-batch and unit production. These firms tend to be job shop operations that manufacture and assemble small orders to meet specific needs of customers. Custom work is the norm. Small-batch production relies heavily on the human operator; it is thus not highly mechanized. ∙ Group II: Large-batch and mass production. Large-batch production is a manufacturing process characterized by long production runs of standardized parts. Output often goes into inventory from which orders are filled because customers do not have special needs. ∙ Group III: Continuous-process production. In continuous-process production, the entire process is mechanized. There is no starting and stopping. This represents mechanization and standardization one step beyond those in an assembly line. Automated machines control the continuous process, and outcomes are highly predictable.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-03 - 07-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Core Organization Manufacturing Technology KEYWORDS: Bloom’s: Remember 58. Explain mass customization and its advantage. Give examples.

ANSWER: Lean manufacturing and the smart factory have paved the way for mass customization, which refers to using mass-production technology to quickly and cost-effectively assemble goods that are uniquely designed to fit the demands of individual customers. The goal is to provide customers with exactly what they want when they want it. Mass customization has been applied to products as diverse as farm machinery, water heaters, clothing, computers, and industrial detergents. A customer can order a Sony laptop with one of several hard drive capacities, processing chip speeds, and software packages, or a BMW automobile with the exact combination of features and components desired. About 60 percent of the cars BMW sells in Europe are built to order. Oshkosh Truck Company thrived during an industry-wide slump in sales by offering customized fire, cement, garbage, and military trucks. Firefighters often travel to the plant to watch their new vehicle take shape, sometimes bringing paint chips to customize the color of their fleet.

The awesome advantage of the smart factory is that products of different sizes, types, and customer requirements freely intermingle on the assembly line, enabling large factories to deliver a wide range of custom-made products at low mass-production costs. Computerized machines can make instantaneous changes—such as putting a larger screw in a different location—without slowing the production line. A manufacturer can turn out an infinite variety of products in unlimited batch sizes.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-04 - 07-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Contemporary Applications KEYWORDS: Bloom’s: Understand 59. Compare the configuration and structural characteristics of service firms with that of product organizations.

ANSWER: The differences in the structural characteristics of service organizations and product organizations are as follows: ∙ Boundary roles are used extensively in manufacturing firms to handle customers and to Cengage Learning Testing, Powered by Cognero

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reduce disruptions for the technical core. They are used less in service firms because a service is intangible and cannot be passed along by boundary spanners, so service customers must interact directly with technical employees, such as doctors or brokers. ∙ A service firm deals in information and intangible outputs and does not need to be large. Its greatest economies are achieved through disaggregation into small units that can be located close to customers. Stockbrokers, doctors’ clinics, consulting firms, and banks disperse their facilities into regional and local offices. Manufacturing firms, on the other hand, tend to aggregate operations in a single area that has raw materials and an available workforce. A large manufacturing firm can take advantage of economies derived from expensive machinery and long production runs. ∙ Service technology also influences internal organization characteristics used to direct and control the organization. For one thing, the skills of technical core employees typically need to be higher. These employees need enough knowledge and awareness to handle customer problems rather than just enough to perform mechanical tasks. Employees need social and interpersonal skills as well as technical skills. Due to higher skills and structural dispersion, decision making often tends to be decentralized in service firms, and formalization tends to be low. Decision making tends to be more centralized and formalization tends to be higher in manufacturing firms than service firms.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-05 - 07-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Core Organization Service Technology KEYWORDS: Bloom’s: Analyze 60. Contrast the two dimensions of departmental activities, specified by Perrow, that were relevant to organization structure and process.

ANSWER: Perrow specified two dimensions of departmental activities that were relevant to organization structure and processes which are as follows: ∙ The first is the number of exceptions in the work. This refers to task variety, which is the frequency of unexpected and novel events that occur in the conversion process. Task variety concerns whether work activities are performed the same way every time or differ from time to time as employees transform an organization’s inputs into outputs. When individuals encounter a large number of unexpected situations, with frequent problems, variety is considered high. When there are few problems, and when day-to-day job requirements are repetitious, technology contains little variety. Variety in departments can range from repeating a single act, such as on a traditional assembly line, to working on a series of unrelated problems, such as in a hospital emergency room. ∙ The second dimension of technology concerns the analyzability of work activities. When the conversion process is analyzable, the work can be reduced to mechanical steps and participants can follow an objective, computational procedure to solve problems. Problem solution may involve the use of standard procedures, such as instructions and manuals, or technical knowledge, such as that in a textbook or handbook. On the other hand, some work is not analyzable. When problems arise, it is difficult to identify the correct solution. There is no store of techniques or procedures to tell a person exactly what to do. The cause of or solution to a problem is not clear, so employees rely on accumulated experience, intuition, and judgment. The final solution to a problem is often the result of wisdom and experience and not the result of standard procedures.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-06 - 07-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Noncore Departmental Technology KEYWORDS: Bloom’s: Analyze Cengage Learning Testing, Powered by Cognero

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61. Discuss each of the categories of Perrow's framework. Give examples of each.

ANSWER: The dimensions of variety and analyzability that were specified by Perrow form the basis for four major categories of technology: routine, craft, engineering, and nonroutine. ∙ Routine technologies are characterized by little task variety and the use of objective, computational procedures. The tasks are formalized and standardized. Examples include an automobile assembly line and a bank teller department. ∙ Craft technologies are characterized by a fairly stable stream of activities, but the conversion process is not analyzable or well understood. Tasks require extensive training and experience because employees respond to intangible factors on the basis of wisdom, intuition, and experience. Although advances in machine technologies seem to have reduced the number of craft technologies in organizations, craft technologies are still important. For example, steel furnace engineers continue to mix steel based on intuition and experience, pattern makers at fashion houses such as Louis Vuitton, Zara, or H&M convert rough designers’ sketches into saleable garments, and teams of writers for television series such as “Glee” or “The Mentalist” convert ideas into story lines. ∙ Engineering technologies tend to be complex because there is substantial variety in the tasks performed. However, the various activities are usually handled on the basis of established formulas, procedures, and techniques. Employees normally refer to a well-developed body of knowledge to handle problems. Engineering and accounting tasks usually fall in this category. ∙ Nonroutine technologies have high task variety, and the conversion process is not analyzable or well understood. In nonroutine technology, a great deal of effort is devoted to analyzing problems and activities. Several equally acceptable options typically can be found.

Experience and technical knowledge are used to solve problems and perform the work. Basic research, strategic planning, and other work that involves new projects and unexpected problems are nonroutine. The biotechnology industry also represents a nonroutine technology. Breakthroughs in understanding metabolism and physiology at a cellular level depend on highly trained employees who use their experience and intuition, as well as scientific knowledge.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-06 - 07-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Noncore Departmental Technology KEYWORDS: Bloom’s: Understand 62. Compare the specific design characteristics of formalization, centralization, employee kill level, span of control, and communication and coordination for routine technology and nonroutine tasks.

ANSWER: The specific design characteristics of formalization, centralization, employee kill level, span of control, and communication and coordination for routine technology and nonroutine tasks are as follows: ∙ Formalization. Routine technology is characterized by standardization and division of labor into small tasks that are governed by formal rules and procedures. For nonroutine tasks, the structure is less formal and less standardized. When variety is high, as in a research department, fewer activities are covered by formal procedures. ∙ Decentralization. In routine technologies, most decision making about task activities is centralized to management. In engineering technologies, employees with technical training tend to acquire moderate decision authority because technical knowledge is important to task accomplishment. Production employees who have years of experience obtain decision authority in craft technologies because they know how to respond to problems.

Decentralization to employees is greatest in nonroutine settings, where many decisions are made by employees. ∙ Employee skill level. Work staff in routine technologies typically require little education or Cengage Learning Testing, Powered by Cognero

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experience, which is congruent with repetitious work activities. In work units with greater variety, staff members are more skilled and often have formal training in technical schools or universities. Training for craft activities, which are less analyzable, is more likely to be through job experience. Nonroutine activities require both formal education and job experience. ∙ Span of control. Span of control is the number of employees who report to a single manager or supervisor. This characteristic is normally influenced by departmental technology. The more complex and nonroutine the task, the more problems arise in which the supervisor becomes involved. Although the span of control may be influenced by other factors, such as skill level of employees, it typically should be smaller for complex tasks because on such tasks the supervisor and subordinate must interact frequently. ∙ Communication and coordination. Communication activity and frequency increase as task variety increases. Frequent problems require more information sharing to solve problems and ensure proper completion of activities. The direction of communication is typically horizontal in nonroutine work units and vertical in routine work units. The form of communication varies by task analyzability. When tasks are highly analyzable, statistical and written forms of communication (e.g., memos, reports, rules, and procedures) are frequent. When tasks are less analyzable, information typically is conveyed face to face, over the telephone, or in group meetings.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-06 - 07-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Noncore Departmental Technology KEYWORDS: Bloom’s: Analyze 63. Discuss the three types of interdependence defined by James Thompson that influence organization structure.

ANSWER: The three types of interdependence defined by James Thompson that influence organization structure are as follows: ∙ Pooled. Pooled interdependence is the lowest form of interdependence among departments.

In this form, work does not flow between units. Each department is part of the organization and contributes to the common good of the organization, but works independently. Subway restaurants or Bank of America branches are examples of pooled interdependence. An outlet in Chicago need not interact with an outlet in Urbana. Pooled interdependence may be associated with the relationships within a divisional structure. . ∙ Sequential. When interdependence is of serial form, with parts produced in one department becoming inputs to another department, it is called sequential interdependence. The first department must perform correctly for the second department to perform correctly. This is a higher level of interdependence than pooled interdependence because departments exchange resources and depend on others to perform well. Sequential interdependence creates a greater need for horizontal mechanisms such as integrators or task forces. ∙ Reciprocal. The highest level of interdependence is reciprocal interdependence. This exists when the output of operation A is the input to operation B, and the output of operation B is the input back again to operation A. The outputs of departments influence those departments in reciprocal fashion.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-07 - 07-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Workflow Interdependence among Departments KEYWORDS: Bloom’s: Understand 64. Discuss how the ultimate impact of technology can be understood through the concept of sociotechnical systems.

ANSWER: The ultimate impact of technology on employees can be partially understood through the Cengage Learning Testing, Powered by Cognero

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concept of sociotechnical systems.

The sociotechnical systems approach recognizes the interaction of technical and human needs in effective job design, combining the needs of people with the organization’s need for technical efficiency. The socio portion of the approach refers to the people and groups that work in organizations and how work is organized and coordinated. The technical portion refers to the materials, tools, machines, and processes used to transform organizational inputs into outputs.

The social system includes all human elements—such as individual and team behaviors, organizational culture, management practices, and degree of communication openness—that can influence the performance of work. The technical system refers to the type of production technology, the level of interdependence, the complexity of tasks, and so forth.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-07 - 07-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Sociotechnical Systems KEYWORDS: Bloom’s: Understand 65. Discuss the ideas that are essential while designing an organization.

ANSWER: The points that are essential while designing an organization are as follows: ∙ The first is Woodward’s research into manufacturing technology. Woodward went into organizations and collected practical data on technology characteristics, organization structure, and management systems. She found clear relationships between technology and structure in high-performing organizations. Her findings are so clear that managers can analyze their own organizations along the same dimensions of technology and structure. In addition, technology and structure can be co-aligned with organizational strategy to meet changing needs and provide new competitive advantages. ∙ The second important idea is that service technologies differ in a systematic way from manufacturing technologies. Service technologies are characterized by intangible outcomes and direct client involvement in the production process. Service firms do not have the fixed, machine-based technologies that appear in manufacturing organizations; hence, organization design often differs as well. ∙ A third significant idea is Perrow’s framework applied to department technologies.

Understanding the variety and analyzability of a technology tells one about the management style, structure, and process that should characterize that department. Routine technologies are characterized by a mechanistic design and nonroutine technologies by an organic design.

Applying the wrong management system to a department will result in dissatisfaction and reduced efficiency. ∙ The fourth important idea is interdependence among departments. The extent to which departments depend on each other for materials, information, or other resources determines the amount of coordination required between them. As interdependence increases, demands on the organization for coordination increase. Organization design must allow for the correct amount of communication and coordination to handle interdependence across departments. ∙ The fifth idea is that smart factories and lean manufacturing are being adopted by organizations and having impact on organization design. For the most part, the impact is positive, with shifts toward more organic designs both on the shop floor and in the management hierarchy. These technologies replace routine jobs, give employees more autonomy, produce more challenging jobs, encourage teamwork, and let the organization be more flexible and responsive. The new technologies are enriching jobs to the point where organizations are happier places to work. ∙ Several principles of sociotechnical systems theory, which attempts to design the technical and human aspects of an organization to fit one another, are increasingly important as advances in technology alter the nature of jobs and social interaction in today’s companies.

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POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.07-08 - 07-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Design Essentials KEYWORDS: Bloom’s: Understand

Cengage Learning Testing, Powered by Cognero

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1. A(n) _____ collects data from sales, purchases from suppliers, and inventory changes and stores them in a database. a. inventory control system b. automated analysis system c. transaction processing system d. decision support system ANSWER: c Feedback: Transaction processing systems (TPSs) automate an organization’s routine, dayRATIONALE: to-day business transactions. A TPS collects data from transactions such as sales, purchases from suppliers, and inventory changes, and stores them in a database.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-01 - 08-01 NATIONAL STANDARDS: United States - AACSB: Technology TOPICS: Information Technology Evolution KEYWORDS: Bloom’s: Remember 2. The use of huge databases that combine all of a company's data and allow users to access the data directly, create reports, and obtain responses to what-if questions is referred to as: a. data mining. b. data processing. c. transaction processing. d. data warehousing.

ANSWER: d Feedback: Data warehousing is the use of huge databases that combine all of a company’s RATIONALE: data and allow users to access the data directly, create reports, and obtain responses to what-if questions. Software for business intelligence, also called analytic software, helps users make sense of all these data.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-01 - 08-01 NATIONAL STANDARDS: United States - AACSB: Technology TOPICS: Information Technology Evolution KEYWORDS: Bloom’s: Remember 3. Software for business intelligence, also called _____, helps users make sense of all of a company’s data. a. dynamic software b. analytic software c. decision support software d. warehousing software ANSWER: b Feedback: Software for business intelligence, also called analytic software, helps users make RATIONALE: sense of all of a company’s data. Business intelligence refers to the high-tech analysis of a company’s data in order to make better strategic decisions.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-01 - 08-01 NATIONAL STANDARDS: United States - AACSB: Technology TOPICS: Information Technology Evolution KEYWORDS: Bloom’s: Remember 4. _____ means searching out and analyzing data from multiple sources across the enterprise, and increasingly from Cengage Learning Testing, Powered by Cognero

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outside sources as well, to identify patterns and relationships that might be significant. a. Data warehousing b. Data processing c. Data entry d. Data mining ANSWER: d Feedback: Sometimes referred to as data mining, business intelligence means searching out RATIONALE: and analyzing data from multiple sources across the enterprise, and increasingly from outside sources as well, to identify patterns and relationships that might be significant.

Retailers are some of the biggest users of business intelligence software.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-01 - 08-01 NATIONAL STANDARDS: United States - AACSB: Technology TOPICS: Information Technology Evolution KEYWORDS: Bloom’s: Remember 5. Which of the following helps managers to make smarter decisions? a. Restricting the use of social media technologies b. Using business intelligence software to analyze data c. Restricting use of intranets for knowledge management d. Using only horizontal linkages and not vertical linkages ANSWER: b Feedback: By collecting the right data and using business intelligence software to analyze RATIONALE: them and spot trends and patterns, managers can make smarter decisions. For example, 1800-Flowers.com uses business intelligence to tweak its marketing.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-01 - 08-01 NATIONAL STANDARDS: United States - AACSB: Technology TOPICS: Information Technology Evolution KEYWORDS: Bloom’s: Understand 6. _____ refers to using technologies such as blogs, Facebook, or Twitter for interacting with and facilitating communication and collaboration among employees, customers, and other stakeholders. a. Social business b. Decision support c. Transaction processing d. Business intelligence ANSWER: a Feedback: Social business refers to using social media technologies such as blogs, social RATIONALE: networks, or Twitter for interacting with and facilitating communication and collaboration among employees, customers, and other stakeholders. For example, Dr. Pepper built a Facebook fan base of 8.5 million people. Managers put out two messages a day on the company’s fan page and then mine the responses to see what people are thinking.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-01 - 08-01 NATIONAL STANDARDS: United States - AACSB: Technology TOPICS: Information Technology Evolution KEYWORDS: Bloom’s: Remember Cengage Learning Testing, Powered by Cognero

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7. Shaina, a manager for a fashion magazine, puts out two messages a day on her company’s Facebook fan page. She does this to obtain feedback from readers and also to determine what the readers would like to see in the magazine. This scenario is an example of _____. a. feedback processing b. data warehousing c. social business d. business intelligence ANSWER: c Feedback: This is an example of social business. Social business refers to using social RATIONALE: media technologies such as blogs, social networks, or Twitter for interacting with and facilitating communication and collaboration among employees, customers, and other stakeholders.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-01 - 08-01 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Information Technology Evolution KEYWORDS: Bloom’s: Apply 8. _____ refers to technologies, skills, and processes for searching and examining massive, complex sets of data that traditional data processing applications cannot handle to uncover hidden patterns and correlations. a. Social business b. Data warehousing c. Big data analytics d. Business intelligence ANSWER: c Feedback: Big Data, one of the newest business technologies, is a natural outgrowth of RATIONALE: business intelligence. Big data analytics refers to technologies, skills, and processes for searching and examining massive, complex sets of data that traditional data processing applications cannot handle to uncover hidden patterns and correlations.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-01 - 08-01 NATIONAL STANDARDS: United States - AACSB: Technology TOPICS: Information Technology Evolution KEYWORDS: Bloom’s: Remember 9. xIn connection with the shift to employee participation and empowerment, many companies are adopting a: a. decentralized control process. b. hierarchical control process. c. vertical organizational structure. d. centralized organizational structure.

ANSWER: a Feedback: In connection with the shift to employee participation and empowerment, many RATIONALE: companies are adopting a decentralized rather than a hierarchical control process.

Hierarchical control and decentralized control represent different philosophies of corporate culture.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-02 - 08-02 NATIONAL STANDARDS: United States - AACSB: Analytic Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

The Philosophy and Focus of Control Systems Bloom’s: Remember

10. _____ involves monitoring and influencing employee behavior through extensive use of rules, policies, order of authority, written documentation, reward systems, and other formal mechanisms. a. A vertical organizational structure b. Decentralized control c. A horizontal organizational structure d. Hierarchical control ANSWER: d Feedback: Hierarchical control involves monitoring and influencing employee behavior RATIONALE: through extensive use of rules, policies, hierarchy of authority, written documentation, reward systems, and other formal mechanisms. In contrast, decentralized control relies on cultural values, traditions, shared beliefs, and trust to foster compliance with organizational goals.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-02 - 08-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Remember 11. In contrast to hierarchical control, decentralized control relies on: a. extensive use of rules and policies. b. close personal supervision. c. reward systems. d. cultural values.

ANSWER: d Feedback: In contrast to hierarchical control, decentralized control relies on cultural values, RATIONALE: traditions, shared beliefs, and trust to foster compliance with organizational goals. Managers operate on the assumption that employees are trustworthy and willing to perform effectively without extensive rules and close supervision.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-02 - 08-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Understand 12. _____ define explicit rules, policies, and procedures for employee behavior. a. Hierarchical methods b. Decentralized methods c. Traditional methods d. Reorganized methods ANSWER: a Feedback: Hierarchical methods define explicit rules, policies, and procedures for employee RATIONALE: behavior. Control relies on centralized authority, the formal hierarchy, and close personal supervision.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-02 - 08-02 NATIONAL STANDARDS: United States - AACSB: Analytic Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

The Philosophy and Focus of Control Systems Bloom’s: Remember

13. _____ is based on values and assumptions that are almost opposite to those of hierarchical control. a. Centralized control b. Decentralized control c. Vertical control d. Horizontal control ANSWER: b Feedback: Decentralized control is based on values and assumptions that are almost RATIONALE: opposite to those of hierarchical control. Rules and procedures are used only when necessary.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-02 - 08-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Remember 14. Which of the following is true of decentralized control? a. Rules and procedures are used only when necessary. b. Managers do not rely on shared goals and values to control employee behavior. c. Top-down authority is used. d. Task-related job descriptions are given to employees.

ANSWER: a Feedback: Decentralized control is based on values and assumptions that are almost RATIONALE: opposite to those of hierarchical control. Rules and procedures are used only when necessary.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-02 - 08-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Understand 15. Which of the following is true of an organization with decentralized control? a. The organization emphasizes extrinsic rewards, and task-related job descriptions are given to employees. b. The organization assumes that people are incapable of self-discipline and cannot be trusted. c. The organization uses detailed rules and procedures and formal control systems. d. The organization places great emphasis on the selection and socialization of employees.

ANSWER: d Feedback: In organizations with decentralized control, managers rely on shared goals and RATIONALE: values to control employee behavior. The organization places great emphasis on the selection and socialization of employees to ensure that workers have the appropriate values needed to influence behavior toward meeting company goals.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-02 - 08-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Understand Cengage Learning Testing, Powered by Cognero

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16. Decentralized control differs from hierarchical control in that: a. power is more dispersed in decentralized control. b. top-down authority is used in decentralized control. c. detailed rules and procedures and formal control systems are used in decentralized control. d. organizational structure is vertical in decentralized control.

ANSWER: a Feedback: With decentralized control, power is more dispersed and is based on knowledge RATIONALE: and experience as much as formal position. The organizational structure is flat and horizontal, with flexible authority and teams of workers solving problems and making improvements.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-02 - 08-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Understand 17. With _____, the culture is adaptive, and managers recognize the importance of organizational culture for uniting individual, team, and organizational goals for greater overall control. a. centralized control b. decentralized control c. vertical control d. hierarchical control ANSWER: b Feedback: With decentralized control, the culture is adaptive, and managers recognize the RATIONALE: importance of organizational culture for uniting individual, team, and organizational goals for greater overall control. Ideally, with decentralized control, employees will pool their areas of expertise to arrive at procedures that are better than managers could come up with working alone.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-02 - 08-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Understand 18. All effective control systems involve the use of _____ to determine whether organizational performance meets established standards to help the organization attain its goals. a. decentralization b. hierarchical referral c. feedback d. employee referral ANSWER: c Feedback: All effective control systems involve the use of feedback to determine whether RATIONALE: organizational performance meets established standards to help the organization attain its goals. Managers set up systems for organizational control that consist of the four key steps in the feedback control model.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-03 - 08-03 NATIONAL STANDARDS: United States - AACSB: Analytic Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

The Philosophy and Focus of Control Systems Bloom’s: Remember

19. Feedback control helps managers: a. make needed adjustments to help the organization be successful. b. emphasize decentralized control over employees. c. have complete hierarchical control on their subordinates. d. set organizational mission and vision.

ANSWER: a Feedback: Managers set up systems for organizational control that consist of the four key RATIONALE: steps in the feedback control model. Feedback control helps managers make needed adjustments in work activities, standards of performance, or goals to help the organization be successful.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-03 - 08-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Understand 20. Which of the following is the first step in the feedback control model? a. Taking corrective action as needed b. Establishing metrics and standards of performance c. Comparing metrics of actual performance to standards d. Setting strategic goals ANSWER: d Feedback: Managers set up systems for organizational control that consist of the four key RATIONALE: steps in the feedback control model. The cycle of control includes setting strategic goals for departments or the organization as a whole, establishing metrics and standards of performance, comparing metrics of actual performance to standards, and correcting or changing activities as needed.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-03 - 08-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Remember 21. Which of the following is not a perspective of the balanced scorecard? a. Financial performance b. Customer service c. Learning and growth d. Quality control ANSWER: d Feedback: A BSC contains four major perspectives: financial performance, customer service, RATIONALE: internal business processes, and the organization’s capacity for learning and growth. Within these four areas, managers identify key performance indicators (KPIs) the organization will track.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-04 - 08-04 Cengage Learning Testing, Powered by Cognero

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NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Remember 22. Which of the following perspectives of a balanced scorecard includes traditional measures such as net income and return on investment? a. Learning and growth potential b. Customer service indicators c. Financial perspective d. Quality control perspective ANSWER: c Feedback: The financial perspective reflects a concern that the organization’s activities RATIONALE: contribute to improving short- and long-term financial performance. It includes traditional measures such as net income and return on investment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-04 - 08-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Remember 23. _____ focus on production and operating statistics, such as order fulfillment or cost per order. a. Customer service indicators b. Business process indicators c. Learning and growth potentials d. Quality control perspectives ANSWER: b Feedback: Business process indicators focus on production and operating statistics, such as RATIONALE: order fulfillment or cost per order.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-04 - 08-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Remember 24. An organization’s _____ focuses on how well resources and human capital are being managed for the company’s future. a. business process indicator b. customer service indicator c. learning and growth potential d. quality control perspective ANSWER: c Feedback: The final component of a balanced scorecard looks at the organization’s potential RATIONALE: for learning and growth, focusing on how well resources and human capital are being managed for the company’s future.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-04 - 08-04 NATIONAL STANDARDS: United States - AACSB: Analytic Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

The Philosophy and Focus of Control Systems Bloom’s: Remember

25. In recent years, the balanced scorecard has evolved into a system that helps managers see how: a. organizational performance results from cause–effect relationships among the four mutually supportive perspectives of balanced scorecard. b. decentralized control is effective for organizations to achieve the preset goals, mission, and vision. c. accuracy and responsiveness of employees improve drastically from the usage of outcome control instead of behavior control in their organization. d. each and every perspective of a balanced scorecard is dependent on each other.

ANSWER: a Feedback: In recent years, the balanced scorecard has evolved into a system that helps RATIONALE: managers see how organizational performance results from cause–effect relationships among these four mutually supportive areas. Overall effectiveness is a result of how well these four elements are aligned, so that individuals, teams, and departments are working in concert to attain specific goals that cause high organizational performance.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-04 - 08-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Understand 26. A(n) _____ provides a visual representation of the key drivers of an organization’s success and shows how specific outcomes in each area are linked. a. feedback map b. outcome map c. strategy map d. transaction map ANSWER: c Feedback: The cause–effect control technique is the strategy map. A strategy map provides RATIONALE: a visual representation of the key drivers of an organization’s success and shows how specific outcomes in each area are linked.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-04 - 08-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Remember 27. _____ is based on managers’ direct observation and supervision of employee actions to see whether the individual follows rules and policies and performs tasks as instructed. a. Feedback control b. Outcome control c. Behavior control d. Transaction control ANSWER: c Feedback: The reward system is often of paramount concern at the supervisory level. There RATIONALE: are two different approaches to evaluating and controlling team or individual performance and allocating rewards. Behavior control is based on managers’ direct observation and supervision of employee actions to see whether the individual follows rules and policies and Cengage Learning Testing, Powered by Cognero

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performs tasks as instructed.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-04 - 08-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Remember 28. _____ refers to the efforts to systematically find, organize, and make available a company’s intellectual capital and to foster a culture of continuous learning and information sharing. a. Feedback control b. Outcome control c. Knowledge management d. Transaction management ANSWER: c Feedback: Knowledge management refers to the efforts to systematically find, organize, and RATIONALE: make available a company’s intellectual capital and to foster a culture of continuous learning and knowledge sharing. The company’s intellectual capital is the sum of its knowledge, experience, understanding, relationships, processes, innovations, and discoveries.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-05 - 08-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Facilitating Employee Coordination and Efficiency KEYWORDS: Bloom’s: Remember 29. _____ are people who are at the center of an information network. These are people who are sought out for their knowledge and information. a. Brokers b. Peripheral players c. Hubs d. Communicators ANSWER: c Feedback: Hubs are people who are at the center of an information network. These are RATIONALE: people who are sought out for their knowledge and information. Hubs tend to have more influence than other employees.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-06 - 08-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Facilitating Employee Coordination and Efficiency KEYWORDS: Bloom’s: Remember 30. A form of outsourcing is to use _____, firms that collect data from multiple organizations and analyze the combined data for them. a. hubs b. peripheral players c. data summarizers d. data intermediaries ANSWER: d Feedback: A form of outsourcing is to use data intermediaries, firms that collect data from RATIONALE: Cengage Learning Testing, Powered by Cognero

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multiple organizations and analyze the combined data for them. For example, Visa and MasterCard do analysis on the billions of transactions from cardholders in 210 countries to predict consumer and business trends and sell the data to others.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-08 - 08-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adding Strategic Value KEYWORDS: Bloom’s: Remember 31. Executive information systems collect data from transactions such as sales, purchase from suppliers, and inventory changes and store them in a database. a. True b. False ANSWER: False Feedback: Transaction processing systems (TPSs) automate the organization’s routine, dayRATIONALE: to-day business transactions. A TPS collects data from transactions such as sales, purchases from suppliers, and inventory changes, and stores them in a database.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-01 - 08-01 NATIONAL STANDARDS: United States - AACSB: Technology TOPICS: Information Technology Evolution KEYWORDS: Bloom’s: Remember 32. Data warehousing is also known as data mining. a. True b. False ANSWER: False Feedback: Data warehousing is the use of huge databases that combine all of a company’s RATIONALE: data and allow users to access the data directly, create reports, and obtain responses to what-if questions. Data mining or business intelligence means searching out and analyzing data from multiple sources across the enterprise, and increasingly from outside sources as well, to identify patterns and relationships that might be significant.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-01 - 08-01 NATIONAL STANDARDS: United States - AACSB: Technology TOPICS: Information Technology Evolution KEYWORDS: Bloom’s: Remember 33. Data mining software is designed to print out data from the government sector, particularly from census reports. a. True b. False ANSWER: False Feedback: Business intelligence refers to the high-tech analysis of a company’s data in order RATIONALE: to make better strategic decisions. Data mining or business intelligence means searching out and analyzing data from multiple sources across the enterprise, and increasingly from outside sources as well, to identify patterns and relationships that might be significant.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-01 - 08-01 NATIONAL STANDARDS: United States - AACSB: Technology Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

Information Technology Evolution Bloom’s: Remember

34. Hierarchical control involves cultural values, traditions, shared beliefs, and trust to foster compliance with organizational goals. a. True b. False ANSWER: False Feedback: Hierarchical control involves monitoring and influencing employee behavior RATIONALE: through extensive use of rules, policies, hierarchy of authority, written documentation, reward systems, and other formal mechanisms. In contrast, decentralized control relies on cultural values, traditions, shared beliefs, and trust to foster compliance with organizational goals.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-02 - 08-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Remember 35. Hierarchical methods define explicit rules, policies, and procedures for employee behavior. a. True b. False ANSWER: True Feedback: Hierarchical methods define explicit rules, policies, and procedures for employee RATIONALE: behavior. Control relies on centralized authority, the formal hierarchy, and close personal supervision.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-02 - 08-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Remember 36. With hierarchical control, the organizational culture is flexible, and managers consider culture a useful means for coordinating employees and the organization. a. True b. False ANSWER: False Feedback: With hierarchical control, the organizational culture is somewhat rigid, and RATIONALE: managers do not consider culture a useful means of controlling employees and the organization. Hierarchical methods define explicit rules, policies, and procedures for employee behavior.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-02 - 08-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Understand 37. In decentralized control, managers rely on shared goals and values to control employee behavior. a. True b. False Cengage Learning Testing, Powered by Cognero

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ANSWER: RATIONALE:

True Feedback: Decentralized control is based on values and assumptions that are almost opposite to those of hierarchical control. Rules and procedures are used only when necessary. Managers rely instead on shared goals and values to control employee behavior.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-02 - 08-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Understand 38. In decentralized control, the organizational structure is vertical, like a pyramid. a. True b. False ANSWER: False Feedback: With decentralized control, power is more dispersed and is based on knowledge RATIONALE: and experience as much as formal position. The organizational structure is flat and horizontal, with flexible authority and teams of workers solving problems and making improvements.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-02 - 08-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Understand 39. Effective control systems involve the use of feedback to determine whether organizational performance meets established standards to help the organization attain its goals. a. True b. False ANSWER: True Feedback: All effective control systems involve the use of feedback to determine whether RATIONALE: organizational performance meets established standards to help the organization attain its goals. Managers set up systems for organizational control that consist of the four key steps in the feedback control model.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-03 - 08-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Understand 40. Establishing metrics and standards of performance is one of the four key steps in a feedback control model. a. True b. False ANSWER: True Feedback: The cycle of control includes setting strategic goals for departments or the RATIONALE: organization as a whole, establishing metrics and standards of performance, comparing metrics of actual performance to standards, and correcting or changing activities as needed.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-03 - 08-03 NATIONAL STANDARDS: United States - AACSB: Analytic Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

The Philosophy and Focus of Control Systems Bloom’s: Remember

41. The formal routines, reports, and procedures that use information to maintain or alter patterns in organization activities are referred to as the balanced scorecard. a. True b. False ANSWER: False Feedback: The balanced scorecard is a comprehensive management control system that RATIONALE: balances traditional financial measures with operational measures relating to a company’s critical success factors.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-04 - 08-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Remember 42. Custom service indicators focus on production and operating statistics, such as order fulfillment or cost per order. a. True b. False ANSWER: False Feedback: Business process indicators focus on production and operating statistics, such as RATIONALE: order fulfillment or cost per order.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-04 - 08-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Remember 43. Behavior control is based on monitoring and rewarding results, and managers might pay little attention to how those results are obtained. a. True b. False ANSWER: False Feedback: Outcome control is based on monitoring and rewarding results, and managers RATIONALE: might pay little attention to how those results are obtained. Behavior control is based on managers’ direct observation and supervision of employee actions to see whether the individual follows rules and policies and performs tasks as instructed.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-04 - 08-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Remember 44. With behavior control, people have a great deal of autonomy in terms of how they do their job. a. True b. False ANSWER: False Cengage Learning Testing, Powered by Cognero

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RATIONALE:

Feedback: Behavior control is based on managers’ direct observation and supervision of employee actions to see whether the individual follows rules and policies and performs tasks as instructed. With outcome control, managers don’t supervise employees in the traditional sense. People have a great deal of autonomy in terms of how they do their jobs—and sometimes in terms of where and when they do their jobs—as long as they produce desired outcomes.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-04 - 08-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Understand 45. With outcome control, rather than monitoring how many hours an employee works, managers focus on how much work the employee accomplishes. a. True b. False ANSWER: True Feedback: With outcome control, managers do not supervise employees in the traditional RATIONALE: sense. Rather than monitoring how many hours an employee works, managers focus on how much work the employee accomplishes.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-04 - 08-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Understand 46. A primary use of intranets is for knowledge management. a. True b. False ANSWER: True Feedback: A primary use of intranets is for knowledge management. Knowledge RATIONALE: management refers to the efforts to systematically find, organize, and make available a company’s intellectual capital and to foster a culture of continuous learning and knowledge sharing.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-05 - 08-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Facilitating Employee Coordination and Efficiency KEYWORDS: Bloom’s: Remember 47. Tacit knowledge is formal, systematic knowledge that can be written down and passed on to others. a. True b. False ANSWER: False Feedback: Codified knowledge is formal, systematic knowledge that can be articulated, RATIONALE: written down, and passed on to others in documents, rules, or general instructions. Tacit knowledge, on the other hand, is often difficult to put into words.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-05 - 08-05 Cengage Learning Testing, Powered by Cognero

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NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Facilitating Employee Coordination and Efficiency KEYWORDS: Bloom’s: Remember 48. Two approaches to knowledge management are the use of dialogue and communities of practice. a. True b. False ANSWER: False Feedback: Two approaches to knowledge management are codified knowledge and tacit RATIONALE: knowledge. The first approach deals primarily with the collection and sharing of codified knowledge, largely through the use of sophisticated IT systems. The second approach focuses on leveraging individual expertise and know-how—tacit knowledge—by connecting people face to face or through interactive social media.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-05 - 08-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Facilitating Employee Coordination and Efficiency KEYWORDS: Bloom’s: Remember 49. Peripheral players have the fewest number of connections and operate on the boundaries of a network. a. True b. False ANSWER: True Feedback: Peripheral players have the fewest number of connections and operate on the RATIONALE: boundaries of a network. They are marginal players, but they can still be important because they may have niche expertise or valuable outside contacts.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-06 - 08-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Facilitating Employee Coordination and Efficiency KEYWORDS: Bloom’s: Remember 50. Hubs link specialized pools of knowledge and integrate the larger network within the organization. a. True b. False ANSWER: False Feedback: Brokers are the people who have a knack for connecting people across RATIONALE: boundaries and subgroups. Brokers link specialized pools of knowledge and integrate the larger network within the organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-06 - 08-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Facilitating Employee Coordination and Efficiency KEYWORDS: Bloom’s: Remember 51. Social businesses always use a top-down approach. a. True b. False Cengage Learning Testing, Powered by Cognero

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ANSWER: RATIONALE:

False Feedback: Like most new activities or techniques within organizations, social business typically starts slowly and gains momentum. Unlike some other activities, social business often starts bottom-up, that is, with lower-level employees and managers who see value in using social media, and then spreads throughout the rest of the organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-07 - 08-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adding Strategic Value KEYWORDS: Bloom’s: Remember 52. Using data intermediaries is a form of data mining. a. True b. False ANSWER: False Feedback: A form of outsourcing is to use data intermediaries, firms that collect data from RATIONALE: multiple organizations and analyze the combined data for them.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-08 - 08-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adding Strategic Value KEYWORDS: Bloom’s: Remember 53. Information technology enables an organization to do more work with fewer people. a. True b. False ANSWER: True Feedback: Even for traditional businesses, new IT enables the organization to do more work RATIONALE: with fewer people. Customers can buy insurance, clothing, tools and equipment, and practically anything else over the Internet without ever speaking to an agent or salesperson.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-08 - 08-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Impact on Organization Design KEYWORDS: Bloom’s: Understand 54. One of the greatest outcomes of information technology is its potential to improve coordination, communication, and collaboration across the firm. a. True b. False ANSWER: True Feedback: Perhaps one of the greatest outcomes of information technology (IT) is its RATIONALE: potential to improve coordination, communication, and collaboration across the firm. IT applications can connect people even when their offices, factories, or stores are scattered around the world, and many traditional tools companies use look outdated to young employees.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-08 - 08-08 NATIONAL STANDARDS: United States - AACSB: Analytic Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

Impact on Organization Design Bloom’s: Understand

55. With a network structure, most activities are outsourced so that different companies perform the various functions needed by the organization. a. True b. False ANSWER: True Feedback: With a network structure, most activities are outsourced so that different RATIONALE: companies perform the various functions needed by the organization. The speed and ease of electronic communication makes the network structure a viable option for companies that want to keep costs low but expand activities or market presence.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-08 - 08-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Impact on Organization Design KEYWORDS: Bloom’s: Understand 56. Discuss transaction processing systems, and give an example of how a company utilizes the system.

ANSWER: Initially, IT systems in organizations were applied to operations. These initial applications were based on the notion of machine-room efficiency—that is, current operations could be performed more efficiently with the use of computer technology. The goal was to reduce labor costs by having computers take over some tasks. These systems became known as transaction processing systems (TPSs), which automate the organization’s routine, day-today business transactions. A TPS collects data from transactions such as sales, purchases from suppliers, and inventory changes, and stores them in a database. For example, at Enterprise Rent-A-Car, a computerized system keeps track of the 1.4 million transactions the company logs every hour. The system can provide front-line employees with up-to-theminute information on car availability and other data, enabling them to provide exceptional customer service.

(Students’ examples may vary.)

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-01 - 08-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information Technology Evolution KEYWORDS: Bloom’s: Understand 57. Explain social business using an example.

ANSWER: Social business refers to using social media technologies such as blogs, social networks, or Twitter for interacting with and facilitating communication and collaboration among employees, customers, and other stakeholders. For example, Dr. Pepper built a Facebook fan base of 8.5 million people. Managers put out two messages a day on the company’s fan page and then mine the responses to see what people are thinking. Social business can improve an organization’s efficiency, increase productivity, and facilitate faster and smoother operations by improving communication, collaboration, and knowledge sharing within and across firms.

(Students’ examples may vary.)

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-01 - 08-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information Technology Evolution Cengage Learning Testing, Powered by Cognero

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KEYWORDS:

Bloom’s: Understand

58. Explain big data analytics with an example.

ANSWER: Big data analytics refers to technologies, skills, and processes for searching and examining massive, complex sets of data that traditional data processing applications cannot handle to uncover hidden patterns and correlations. Walmart collects more than 2.5 petabytes of data every hour from customer transactions and uses those data to make better decisions.

Facebook uses the personal data on a user’s page and tracks and monitors the user’s online behavior, and then searches through all those data to identify and suggest potential “friends.”

(Students’ examples may vary.)

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-01 - 08-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Information Technology Evolution KEYWORDS: Bloom’s: Understand 59. Explain the concept of decentralized control with an example.

ANSWER: Decentralized control is based on values and assumptions that are almost opposite to those of hierarchical control. Rules and procedures are used only when necessary. Managers rely instead on shared goals and values to control employee behavior. The organization places great emphasis on the selection and socialization of employees to ensure that workers have the appropriate values needed to influence behavior toward meeting company goals. No organization can control employees 100 percent of the time, and self-discipline and selfcontrol are what keep people performing their jobs up to standard. Empowerment of employees, effective socialization, and training all can contribute to internal standards that provide self-control. Nick Sarillo, who owns two Nick’s Pizza & Pub shops in Illinois, says his management style is “trust and track,” which means giving people the tools and information they need, telling them the result they need to achieve, and then letting them get there in their own way. At the same time, Sarillo keeps track of results so the company stays on solid ground.

(Students’ examples may vary.)

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-02 - 08-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Understand 60. Compare behavior control with outcome control.

ANSWER: The reward system is often of paramount concern at the supervisory level. There are two different approaches to evaluating and controlling team or individual performance and allocating rewards. One approach focuses primarily on how people do their jobs, whereas the other focuses primarily on the outcomes people produce. Behavior control is based on managers’ direct observation and supervision of employee actions to see whether the individual follows rules and policies and performs tasks as instructed. With behavior control, managers provide heavy supervision and monitoring, pay attention to the methods people use to accomplish their jobs, and evaluate and reward people based on specific criteria, which might include areas such as appearance, punctuality, skills, and activities. Information technology has increased the potential for managers to use behavior control.

A second approach to control is to pay less attention to what people do than to what they accomplish. Outcome control is based on monitoring and rewarding results, and managers might pay little attention to how those results are obtained. With outcome control, managers do not supervise employees in the traditional sense. People have a great deal of autonomy in Cengage Learning Testing, Powered by Cognero

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terms of how they do their jobs—and sometimes in terms of where and when they do their jobs—as long as they produce desired outcomes. Rather than monitoring how many hours an employee works, for example, managers focus on how much work the employee accomplishes.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-04 - 08-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Philosophy and Focus of Control Systems KEYWORDS: Bloom’s: Understand 61. Briefly explain social network analysis.

ANSWER: A valuable technique enabled by IT is called social network analysis (SNA), which can help managers learn about informal relationships and network structures within an organization.

With SNA they can know who has influence and who does not, who people turn to for answers, who has the knowledge and technical capability to be innovative, and who has leadership potential. SNA was developed by scientists as a social theory to diagram relationships among people that differ from the formal hierarchy. Social networks include people who turn to one another for help, advice, information, and support, whether or not they are in the same work group. It is within these networks that much of an organization’s work gets done.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-06 - 08-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Facilitating Employee Coordination and Efficiency KEYWORDS: Bloom’s: Remember 62. What is social business? Discuss its advantages using relevant examples.

ANSWER: Social business refers to using social media technologies for interacting with and facilitating communication and collaboration among employees, customers, and other stakeholders.

Social media include company online community pages and forums, blogs and wikis for virtual collaboration, social media sites such as Facebook or LinkedIn, video channels such as YouTube, and microblogging platforms such as Twitter and China’s Sina Weibo.

Social media can provide for more effective sharing of tacit knowledge. For example, the simplicity and informality of Twitter make it a fast and easy way for people to communicate.

People can send a question and quickly get responses from all over the organization or from outsiders. Because of the popularity of Facebook and Twitter in people’s personal lives, most employees are comfortable with the idea of “following” and communicating with their colleagues online. Using social networks for a business enables people to easily connect with one another across organizational and geographical boundaries based on professional relationships, shared interests, problems, or other criteria. A Symantec salesman in Dubai created a group on the company’s network that exchanges sales tips from employees around the world. People can use the social network to search for tags that will identify others with knowledge and resources that can help them solve a problem or do their jobs better.

Moreover, the nature of social networking builds trust so that people are more likely to cooperate and share information.

In addition, social media technology is being used by companies to build trusting relationships with customers. An early leader in this realm was Morgan Stanley Wealth Management. As director of digital strategy, Lauren Boyman worked closely with the company’s sales manager and investment advisors to use Twitter and other social media for communicating with clients.

(Students’ examples may vary.)

POINTS: 1 Cengage Learning Testing, Powered by Cognero

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LEARNING OBJECTIVES: ORGT.DAFT.16.08-07 - 08-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adding Strategic Value KEYWORDS: Bloom’s: Understand 63. What is a social media command center? Explain its functions using relevant examples.

ANSWER: A social media command center is a dedicated office where a company can monitor what is being said about the company on social media platforms. For others, it is a couple of desks in a room. From the command center, staff can get instant feedback about what customers are talking about, which trends are emerging, the most recent customer complaints about the company or others in the industry, and how competitors are doing. The Coca-Cola Company, for example, recently pulled an advertising campaign for Diet Coke using the theme “You’re on” after the ads were mocked on social media. Some bloggers said they evoked a cocaine habit and the history of Diet Coke’s sibling, Coke, which once included small amounts of the drug as an ingredient. Command center findings can be shared across the organization. Cisco set up a two-screen kiosk in front of its CEO and CMO’s offices to give those top leaders an ongoing look at what was being said about the company in real time. Dell uses its command center to uncover information to help staff better understand customers. Gatorade was one of the pioneers with its Mission Control Center, which provides valuable social intelligence concerning how products are resonating with customers, detailed sentiment about marketing campaigns, and so forth. Wells Fargo Bank built its Social Media Command Center to be an early alert system for customer service and risk management issues. Managers are aware that even one small misstep in social channels could have serious consequences. So one goal of the bank’s social business program is to balance the potential for employee engagement with mitigating the risk such engagement can create.

(Students’ examples may vary.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-07 - 08-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adding Strategic Value KEYWORDS: Bloom’s: Remember 64. What is meant by big data?

ANSWER: One of the hottest terms in information technology is big data. Big data refers to any massive data set that exceeds the boundaries and conventional processing capabilities of IT. Big data requires a nontraditional approach; it requires that managers throw out the old way of thinking and take a totally new approach.

Big data includes data sets with sizes beyond the ability of traditional software tools to manage and process the data within an acceptable time frame. Big data analytics refers to the process of examining these large data sets to uncover hidden patterns, correlations, and other useful information and make better decisions. Because the data sets are so massive, big data analytics often cannot be done with existing advanced analytics tools; thus a new class of big data technology has emerged.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-08 - 08-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adding Strategic Value KEYWORDS: Bloom’s: Remember 65. Discuss the working of a balanced design.

ANSWER: A balanced or hybrid design is an in-house approach which places a small number of data Cengage Learning Testing, Powered by Cognero

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scientists in a “center of excellence” led by a chief data officer while the remainder stay in the various functional departments or business units. The Center of Excellence plays a coordination role, assessing needs, prioritizing projects, and so forth. This might be thought of as a hub and spoke design, such that a team of experts in a central unit is available to provide coordination, answer questions, and provide assistance concerning data analytics to various departments and business units. This design recognizes that each unit has its own analytics priorities, such as strengthening promotional efforts for marketing or optimizing inventory levels for operations. However, it also honors the need for building up analytics expertise that can be applied organization-wide and coordinating the data analytics strategy.

An analyst from the Center of Excellence might be assigned to one of the units for a specific project, which helps to build expertise within the unit.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.08-08 - 08-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Adding Strategic Value KEYWORDS: Bloom’s: Understand

Cengage Learning Testing, Powered by Cognero

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1. _____ is accused of many sins, including inefficiency, rigidity, and demeaning routinized work that alienates both employees and the customers an organization tries to serve. a. An organic structure b. Bureaucracy c. An entrepreneurial start-up d. Delegation ANSWER: b Feedback: Bureaucracy is accused of many sins, including inefficiency, rigidity, and RATIONALE: demeaning routinized work that alienates both employees and the customers an organization tries to serve.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-01 - 09-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Size: Is Bigger Better?

KEYWORDS: Bloom’s: Remember 2. _____ are the lifeblood of the U.S. economy. a. Multi-nationals b. Established organizations c. Entrepreneurial start-ups d. Joint ventures ANSWER: c Feedback: Entrepreneurial start-ups are the lifeblood of the U.S. economy.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-01 - 09-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Size: Is Bigger Better?

KEYWORDS: Bloom’s: Remember 3. Which of the following reasons has spurred budding entrepreneurs to take a chance on starting their own company? a. The high rate of success of small businesses b. Economic woes and layoffs at many large firms c. Easy availability of financial resources d. Lucrative outsourcing prospects ANSWER: b Feedback: Economic woes and layoffs at many large firms have spurred budding RATIONALE: entrepreneurs to take a chance on starting their own company or going it alone in a sole proprietorship.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-01 - 09-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Size: Is Bigger Better?

KEYWORDS: Bloom’s: Understand 4. Which of the following is a characteristic of large organizations? a. Vertical hierarchy b. Flat structure Cengage Learning Testing, Powered by Cognero

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c. Responsiveness d. Flexibility ANSWER: a Feedback: Large organizations are characterized by vertical hierarchy.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-01 - 09-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Size: Is Bigger Better?

KEYWORDS: Bloom’s: Remember 5. Steve, an entrepreneur, started a breakfast-on-the-go business that focused on providing customized breakfast packages to students and executives in his neighborhood. He had fifty people working for him who had the liberty to make decisions and propose improvement plans. Which of the following would most likely be a characteristic of Steve’s business? a. Mechanistic management b. A complex structure c. Niche finding d. A stable market ANSWER: c Feedback: Steve’s start-up venture is a small business. Niche finding is a characteristic of RATIONALE: small businesses.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-01 - 09-01 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Organization Size: Is Bigger Better?

KEYWORDS: Bloom’s: Apply 6. Huge resources and economies of scale and scope are needed for many organizations to _____. a. carve out a niche b. compete globally c. have an organic structure d. reduce bureaucracy ANSWER: b Feedback: Huge resources and economies of scale and scope are needed for many RATIONALE: organizations to compete globally.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-01 - 09-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Size: Is Bigger Better?

KEYWORDS: Bloom’s: Remember 7. Which of the following is true of large firms? a. They are badly affected by disasters and take time to recover. b. They are generally more customized. c. They have lower productivity compared to small firms. d. They are able to weather economic woes more efficiently.

ANSWER: d Cengage Learning Testing, Powered by Cognero

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RATIONALE:

Feedback: Large firms are able to weather the economic woes much more easily than small firms, many of which struggle or go out of business.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-01 - 09-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Size: Is Bigger Better?

KEYWORDS: Bloom’s: Understand 8. The competing argument says small is beautiful because the crucial requirements for success in a global economy are: a. longevity and stability in an unstable environment. b. huge resources and economies of scale. c. responsiveness and flexibility in fast-changing markets. d. labor force and productivity.

ANSWER: c Feedback: The competing argument says small is beautiful because the crucial requirements RATIONALE: for success in a global economy are responsiveness and flexibility in fast-changing markets.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-01 - 09-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Size: Is Bigger Better?

KEYWORDS: Bloom’s: Understand 9. Which of the following is true of small businesses? a. They represent a large percentage of exporters. b. They represent 40 percent of all businesses in the United States. c. They often experience lesser employee commitment. d. They are generally slow to adapt to changing customer needs.

ANSWER: a Feedback: A large percentage of exporters are small businesses. The 27.9 million small firms RATIONALE: in the United States account for more than half of all U.S. sales and 55 percent of all jobs.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-01 - 09-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Size: Is Bigger Better?

KEYWORDS: Bloom’s: Understand 10. Small companies become a victim of their own success: a. as they grow large and shift to a complex structure. b. when they cannot manage their profits and make incorrect decisions. c. when they overestimate the demand and block funds in inventory storage. d. as they spawn entrepreneurs rather than “organization men.”

ANSWER: a Feedback: Small companies can become victims of their own success as they grow, shifting RATIONALE: to a mechanistic design emphasizing vertical hierarchy and spawning “organization men” rather than entrepreneurs.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-01 - 09-01 Cengage Learning Testing, Powered by Cognero

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NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Size: Is Bigger Better?

KEYWORDS: Bloom’s: Understand 11. A(n) _____ implies incorporating structures and processes that are appropriate for both small-company creativeness and large-company systems for exploiting innovations. a. joint venture b. dual structure c. ambidextrous approach d. paradoxical practice ANSWER: c Feedback: An ambidextrous approach implies incorporating structures and processes that RATIONALE: are appropriate for both small-company creativeness and large-company systems for exploiting innovations.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-01 - 09-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Size: Is Bigger Better?

KEYWORDS: Bloom’s: Remember 12. Alphacone Inc. is a multinational plasticware manufacturing company. It operates in nine countries, and employs around 7000 people. The large firm is difficult to manage, and the director is looking for a way to capture the mindset and advantages of small businesses to turn the management process around. Which of the following approaches should the director of Alphacone Inc. use? a. He should hire managers from small organizations to implement their strategies. b. He should reorganize his organization into groups of small companies. c. He should cut down his business and limit it to one country. d. He should lay off employees and maintain a manageable number.

ANSWER: b Feedback: The CEO of Alphacone Inc. should reorganize his organization into groups of RATIONALE: small companies. By reorganizing into groups of small companies, huge corporations such as Johnson & Johnson capture the mindset and advantages of smallness.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-01 - 09-01 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Organization Size: Is Bigger Better?

KEYWORDS: Bloom’s: Apply 13. What is the major goal of an organization during the entrepreneurial stage of the organizational life cycle? a. Profit maximization b. Reputation c. Growth d. Survival ANSWER: d Feedback: When an organization is born, the emphasis is on creating a product or service RATIONALE: and surviving in the marketplace.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-02 - 09-02 Cengage Learning Testing, Powered by Cognero

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NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Life Cycle KEYWORDS: Bloom’s: Remember 14. Which of the following statements is true of the entrepreneurial stage of an organizational life cycle? a. There is limited control on the employees, and they make their own decisions. b. The organization is formal and bureaucratic. c. The growth comes from a creative new product or service. d. The founders devote all their time to strategic planning.

ANSWER: c Feedback: In the entrepreneurial stage, growth comes from a creative new product or RATIONALE: service.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-02 - 09-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Life Cycle KEYWORDS: Bloom’s: Understand 15. Which of the following crises is faced by organizations in the entrepreneurial stage? a. The need to deal with too much red tape b. The need for delegation c. The need for revitalization d. The need for leadership ANSWER: d Feedback: In the entrepreneurial stage, as an organization starts to grow, the large number RATIONALE: of employees causes problems. The entrepreneurs thus feel a dire need for leadership.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-02 - 09-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Life Cycle KEYWORDS: Bloom’s: Understand 16. During the _____ stage, an organization begins to develop clear goals and direction. a. entrepreneurial b. elaboration c. collectivity d. formalization ANSWER: c Feedback: In the collectivity stage, strong leadership is obtained and an organization begins RATIONALE: to develop clear goals and direction.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-02 - 09-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Life Cycle KEYWORDS: Bloom’s: Remember 17. Nicholas started a computer assembling business with fifteen employees. All employees were responsible for the Cengage Learning Testing, Powered by Cognero

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complete assembling of a unit. As his start-up grew overtime, he created departments and appointed a supervisor for each department. This signifies that Nicholas’s business is in the _____ stage. a. collectivity b. formalization c. elaboration d. entrepreneurial ANSWER: a Feedback: Nicholas created departments and assigned a specific job to each department in RATIONALE: the assembling process. In the collectivity stage, departments are established along with a hierarchy of authority, job assignments, and a beginning division of labor.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-02 - 09-02 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Organizational Life Cycle KEYWORDS: Bloom’s: Apply 18. Which of the following is true of managers in the collectivity stage of an organization? a. Top managers may get replaced during this period as the organization reaches maturity. b. Middle management may resent the intrusion of staff. c. Strong managers are hired at this level to deal with issues. d. Lower-level managers begin to acquire more confidence and want more discretion.

ANSWER: d Feedback: In the collectivity stage, lower-level managers begin to acquire confidence in their RATIONALE: own functional areas and want more discretion.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-02 - 09-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Life Cycle KEYWORDS: Bloom’s: Understand 19. The formalization stage of an organizational life cycle involves: a. the installation and use of rules, procedures, and control systems. b. the establishment of a hierarchy of authority, job assignments, and division of labor. c. the birth of the organization, and creation of a new product or service. d. the simplification of the formal system as it gets replaced by manager teams and task forces.

ANSWER: a Feedback: The formalization stage involves the installation and use of rules, procedures, and RATIONALE: control systems.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-02 - 09-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Life Cycle KEYWORDS: Bloom’s: Understand 20. Carter is a middle-level manager in his organization. He was satisfied with his job for the first three years, but he has decided to quit as he feels stifled by the bureaucracy and lack of innovation. Carter’s organization is most likely in the _____ of the organizational life cycle.

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a. elaboration stage b. entrepreneurial stage c. formalization stage d. collectivity stage ANSWER: c Feedback: Carter’s organization is most likely in the formalization stage. In this stage, the RATIONALE: organization seems bureaucratized. Middle management may resent the intrusion of staff.

Innovation may be restricted.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-02 - 09-02 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Organizational Life Cycle KEYWORDS: Bloom’s: Apply 21. Which of the following statements best describes the elaboration stage of organizational life cycle? a. It is a mature stage of the life cycle in which a red tape crisis is resolved through the development of a new sense of teamwork and collaboration. b. It is the life cycle stage in which an organization is born and its emphasis is on creating a product and surviving in the marketplace. c. It is the life cycle stage that involves the installation and use of rules, procedures, and control systems. d. It is the life cycle stage in which employees identify with the mission of the organization and spend long hours helping the organization succeed.

ANSWER: a Feedback: The elaboration stage is a mature stage of the life cycle in which a red tape crisis RATIONALE: is resolved through the development of a new sense of teamwork and collaboration.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-02 - 09-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Life Cycle KEYWORDS: Bloom’s: Remember 22. The reward and control system during the entrepreneurial stage of an organization is _____. a. impersonal b. paternalistic c. extensive d. customized ANSWER: b Feedback: The reward and control system during the entrepreneurial stage of an RATIONALE: organization is personal and paternalistic.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-02 - 09-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Life Cycle KEYWORDS: Bloom’s: Remember 23. The goal of a company in the elaboration stage is _____. a. survival Cengage Learning Testing, Powered by Cognero

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b. growth c. reputation d. expansion ANSWER: RATIONALE:

c Feedback: In the elaboration stage, organizational stature and reputation are important. Top managers are concerned with establishing a complete organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-02 - 09-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Life Cycle KEYWORDS: Bloom’s: Remember 24. The systematic study of bureaucracy was launched by _____. a. Max Weber b. Georg Simmel c. Abraham Maslow d. Jean Baudrillard ANSWER: a Feedback: The systematic study of bureaucracy was launched by Max Weber, a sociologist RATIONALE: who studied government organizations in Europe and developed a framework of administrative characteristics that would make large organizations rational and efficient.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-03 - 09-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Size, Bureaucracy, and Control KEYWORDS: Bloom’s: Remember 25. _____ refers to rules, procedures, and written documentation, such as policy manuals and job descriptions, that prescribe the rights and duties of employees. a. Monopolization b. Centralization c. Formalization d. Liberalization ANSWER: c Feedback: Formalization refers to rules, procedures, and written documentation, such as RATIONALE: policy manuals and job descriptions, that prescribe the rights and duties of employees.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-03 - 09-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Size, Bureaucracy, and Control KEYWORDS: Bloom’s: Remember 26. As organizations increase in size, the _____ declines and the ratios for other support groups increase. a. administrative ratio b. personnel ratio c. profitability ratio d. clerical ratio Cengage Learning Testing, Powered by Cognero

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ANSWER: RATIONALE:

a Feedback: As organizations increase in size, the administrative ratio declines and the ratios for other support groups increase.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-03 - 09-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Size, Bureaucracy, and Control KEYWORDS: Bloom’s: Remember 27. Bureaucracy provides for: a. easy access to top level managers for grievance redressal. b. effective ways to increase profit margins for an organization c. systematic and rational ways to organize and manage tasks. d. secure provisions to protect whistle-blowing employees.

ANSWER: c Feedback: Bureaucracy provides for systematic and rational ways to organize and manage RATIONALE: tasks too complex to be understood and handled by a few individuals, thus greatly improving the efficiency and effectiveness of large organizations.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-04 - 09-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Bureaucracy in a Changing World KEYWORDS: Bloom’s: Understand 28. Which of the following statements is true of a professional partnership? a. It is a joint venture between two highly specialized organizations. b. It strongly believes in the effectiveness of bureaucratic principles. c. It works on consensus orientation rather than top-down direction. d. It comprises a mixed group of employees with varying skills and qualifications.

ANSWER: c Feedback: A professional partnership works with a consensus orientation rather than the topRATIONALE: down direction typical of traditional business and government organizations.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-05 - 09-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Bureaucracy in a Changing World KEYWORDS: Bloom’s: Understand 29. _____ occurs when price competition is used to evaluate the output and productivity of an organization or its major departments and divisions. a. Clan control b. Market control c. Bureaucratic control d. Economic control ANSWER: b Feedback: Market control occurs when price competition is used to evaluate the output and RATIONALE: productivity of an organization or its major departments and divisions.

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POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-06 - 09-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Bureaucracy Versus Other Forms of Control KEYWORDS: Bloom’s: Remember 30. Organizational atrophy occurs when: a. an organization loses to its competitors in the market. b. organizations are over-staffed, which gives rise to internal conflict. c. organizations grow older and become inefficient and overly bureaucratized. d. an organization chooses the wrong target market, and is unable to deliver to it.

ANSWER: c Feedback: Organizational atrophy occurs when organizations grow older and become RATIONALE:

inefficient and overly bureaucratized. An organization’s ability to adapt to its environment deteriorates.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-07 - 09-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decline and Downsizing KEYWORDS: Bloom’s: Understand 31. Small companies are standardized, often mechanistically run, and complex. a. True b. False ANSWER: False Feedback: Large companies are standardized, often mechanistically run, and complex.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-01 - 09-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Size: Is Bigger Better?

KEYWORDS: Bloom’s: Remember 32. Large firms can provide greater social support to the communities they serve. a. True b. False ANSWER: True Feedback: Large firms can provide greater social support to the communities they serve.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-01 - 09-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Size: Is Bigger Better?

KEYWORDS: Bloom’s: Remember 33. The service sector encourages an increase in organization size. a. True b. False Cengage Learning Testing, Powered by Cognero

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ANSWER: RATIONALE:

False Feedback: The growing service sector contributes to a decrease in average organization size, as many service companies remain small to better serve customers.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-01 - 09-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Size: Is Bigger Better?

KEYWORDS: Bloom’s: Understand 34. In the collectivity stage of an organizational life cycle, communication and control are mostly informal, although a few formal systems begin to appear. a. True b. False ANSWER: True Feedback: In the collectivity stage, communication and control are mostly informal, although RATIONALE: a few formal systems begin to appear.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-02 - 09-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Life Cycle KEYWORDS: Bloom’s: Remember 35. An autonomy crisis occurs in the formalization stage of an organizational life cycle. a. True b. False ANSWER: False Feedback: In the collectivity stage, an autonomy crisis occurs when top managers, who were RATIONALE: successful because of their strong leadership and vision, do not want to give up responsibility.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-02 - 09-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Life Cycle KEYWORDS: Bloom’s: Remember 36. In the formalization stage of an organizational life cycle, management may attack the bureaucracy and streamline it. a. True b. False ANSWER: False Feedback: In the elaboration stage, management may attack the bureaucracy and streamline RATIONALE: it.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-02 - 09-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Life Cycle KEYWORDS: Bloom’s: Remember 37. As organizations become larger, greater centralization is necessary.

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a. True b. False ANSWER: RATIONALE:

False Feedback: The research on organization size indicates that larger organizations permit greater decentralization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-03 - 09-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Size, Bureaucracy, and Control KEYWORDS: Bloom’s: Remember 38. Every time a layer of bureaucracy is added, information gets diluted. a. True b. False ANSWER: True Feedback: According to Richard Posner, every time a layer of bureaucracy is added, the RATIONALE: movement of information up the chain of command is delayed, and the information is diluted.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-04 - 09-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Bureaucracy in a Changing World KEYWORDS: Bloom’s: Remember 39. During times of high uncertainty, the most effective structure is one that loosens the lines of command. a. True b. False ANSWER: True Feedback: During times of high uncertainty, the most effective structure is one that loosens RATIONALE: the lines of command and enables people to work across departmental and hierarchical lines to anticipate, avoid, and solve unique problems within the context of a clearly understood mission and guidelines.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-04 - 09-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Bureaucracy in a Changing World KEYWORDS: Bloom’s: Remember 40. Increased training substitutes for bureaucratic rules and procedures that can constrain the creativity of employees. a. True b. False ANSWER: True Feedback: Increased training substitutes for bureaucratic rules and procedures that can RATIONALE: constrain the creativity of employees in solving problems and also enhances individual and organizational capability.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-04 - 09-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Bureaucracy in a Changing World Cengage Learning Testing, Powered by Cognero

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KEYWORDS:

Bloom’s: Remember

41. Rational–legal authority is the basis for both creation and control of most government organizations and is the most common base of control in organizations worldwide. a. True b. False ANSWER: True Feedback: Rational–legal authority is the basis for both creation and control of most RATIONALE: government organizations and is the most common base of control in organizations worldwide.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-06 - 09-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Bureaucracy Versus Other Forms of Control KEYWORDS: Bloom’s: Remember 42. Clan control cannot function alone; it needs to be linked with bureaucratic control. a. True b. False ANSWER: False Feedback: When clan control works, bureaucratic control is not needed.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-06 - 09-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Bureaucracy Versus Other Forms of Control KEYWORDS: Bloom’s: Remember 43. Organizational decline is used to define a condition in which a substantial, absolute decrease in an organization’s resource base occurs over time. a. True b. False ANSWER: True Feedback: Organizational decline is used to define a condition in which a substantial, RATIONALE: absolute decrease in an organization’s resource base occurs over time.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-07 - 09-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decline and Downsizing KEYWORDS: Bloom’s: Remember 44. Vulnerable organizations typically need to redefine their environmental domain to enter new industries or markets. a. True b. False ANSWER: True Feedback: Vulnerable organizations typically need to redefine their environmental domain to RATIONALE: enter new industries or markets.

POINTS:

1

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LEARNING OBJECTIVES: ORGT.DAFT.16.09-07 - 09-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decline and Downsizing KEYWORDS: Bloom’s: Remember 45. Environmental decline refers to reduced energy and resources available to support an organization. a. True b. False ANSWER: True Feedback: Environmental decline refers to reduced energy and resources available to RATIONALE: support an organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-07 - 09-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decline and Downsizing KEYWORDS: Bloom’s: Remember 46. During the inaction stage of an organizational life cycle, managers do not take any action as there are no apparent signs of decline. a. True b. False ANSWER: False Feedback: The second stage of decline is called inaction in which denial occurs despite signs RATIONALE: of deteriorating performance.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-07 - 09-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decline and Downsizing KEYWORDS: Bloom’s: Remember 47. During the first stage of decline of an organizational life cycle, leaders may try to persuade employees and other stakeholders that all is well. a. True b. False ANSWER: False Feedback: The second stage of decline is called inaction in which leaders may try to RATIONALE: persuade employees and other stakeholders that all is well.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-07 - 09-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decline and Downsizing KEYWORDS: Bloom’s: Remember 48. In the faulty action stage of an organizational life cycle, indicators of poor performance cannot be ignored. a. True b. False ANSWER: True Cengage Learning Testing, Powered by Cognero

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RATIONALE:

Feedback: Faulty action stage: In the third stage, an organization is facing serious problems, and indicators of poor performance cannot be ignored.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-07 - 09-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decline and Downsizing KEYWORDS: Bloom’s: Remember 49. Actions like retrenchment and downsizing personnel are considered in the final stage of decline of an organizational life cycle. a. True b. False ANSWER: False Feedback: In the faulty action stage, the third stage of decline, an organization faces serious RATIONALE: problems, and indicators of poor performance cannot be ignored. Actions may involve retrenchment, including downsizing personnel.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-07 - 09-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decline and Downsizing KEYWORDS: Bloom’s: Remember 50. The faulty action stage of an organizational life cycle precedes the crisis stage. a. True b. False ANSWER: True Feedback: The faulty action stage is the third stage, and it precedes the crisis stage.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-07 - 09-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decline and Downsizing KEYWORDS: Bloom’s: Remember 51. In the crisis stage of an organizational life cycle, leaders should reduce employee uncertainty by clarifying values and providing information. a. True b. False ANSWER: False Feedback: Leaders should reduce employee uncertainty by clarifying values and providing RATIONALE: information in the faulty action stage.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-07 - 09-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decline and Downsizing KEYWORDS: Bloom’s: Remember 52. The dissolution stage is not irreversible, major organizational restructuring can still turn things around.

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a. True b. False ANSWER: False Feedback: Dissolution stage, the stage of decline, is irreversible.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-07 - 09-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decline and Downsizing KEYWORDS: Bloom’s: Remember 53. The most difficult decision in downsizing is selling off a company’s assets. a. True b. False ANSWER: False Feedback: Some of the most difficult decisions pertain to downsizing, which refers to RATIONALE: intentionally reducing the size of a company’s workforce.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-07 - 09-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decline and Downsizing KEYWORDS: Bloom’s: Remember 54. Open communication about a pending layoff is always harmful. a. True b. False ANSWER: False Feedback: Some managers seem to think the less that is said about a pending layoff, the RATIONALE: better. Not so. Rumors can be much more damaging than open communication.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-07 - 09-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decline and Downsizing KEYWORDS: Bloom’s: Remember 55. Overcommunication, during turbulent times, does more harm than good. a. True b. False ANSWER: False Feedback: Managers should remember that it is impossible to “overcommunicate” during RATIONALE: turbulent times.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-07 - 09-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decline and Downsizing KEYWORDS: Bloom’s: Remember 56. What are the benefits and drawbacks of a large organization?

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ANSWER:

Companies in all industries, from retail, to aerospace, to media, strive for growth to acquire the size and resources needed to compete on a global scale, to invest in new technology, and to control distribution channels and guarantee access to markets. There are a number of other pressures for organizations to grow. Many executives have found that firms must grow to stay economically healthy. To stop growing is to stagnate. To be stable means that customers may not have their demands fully met or that competitors will increase market share at the expense of one’s company.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-01 - 09-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Size: Is Bigger Better?

KEYWORDS: Bloom’s: Remember 57. Explain the size-related paradox that companies face.

ANSWER: The size-related paradox is that the advantages of small companies sometimes enable them to succeed and, hence, grow large. Small companies can become victims of their own success as they grow, shifting to a mechanistic design emphasizing vertical hierarchy and spawning “organization men” rather than entrepreneurs. Big companies become committed to their existing products and technologies and have a hard time supporting innovation for the future.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-01 - 09-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Size: Is Bigger Better?

KEYWORDS: Bloom’s: Remember 58. Describe the entrepreneurial stage of an organizational life cycle.

ANSWER: The entrepreneurial stage is the first stage of the organizational life cycle. When an organization is born, the emphasis is on creating a product or service and surviving in the marketplace. The founders are entrepreneurs, and they devote their full energies to the technical activities of production and marketing. The organization is informal and nonbureaucratic. The hours of work are long. Control is based on the owners’ personal supervision. Growth is from a creative new product or service.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-02 - 09-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Life Cycle KEYWORDS: Bloom’s: Remember 59. Explain the concepts of formalization and centralization.

ANSWER: Formalization refers to rules, procedures, and written documentation, such as policy manuals and job descriptions, which prescribe the rights and duties of employees. Evidence supports the conclusion that large organizations are more formalized. The reason is that large organizations rely on rules, procedures, and paperwork to achieve standardization and control across their large numbers of employees and departments, whereas top managers can use personal observation to control a small organization.

Centralization refers to the level of hierarchy with authority to make decisions. In centralized organizations, decisions tend to be made at the top. In decentralized organizations, similar decisions would be made at a lower level. The research on organization size indicates that larger organizations permit greater decentralization.

POINTS: 1 Cengage Learning Testing, Powered by Cognero

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LEARNING OBJECTIVES: ORGT.DAFT.16.09-03 - 09-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Size, Bureaucracy, and Control KEYWORDS: Bloom’s: Remember 60. Explain the role of personnel ratios in an organization’s structure.

ANSWER: A characteristic of bureaucracy relates to personnel ratios for administrative, clerical, and professional support staff. The most frequently studied ratio is the administrative ratio. Two patterns have emerged. The first is that the ratio of top administration to total employees is typically smaller in large organizations, indicating that organizations experience administrative economies as they grow larger. The second pattern concerns clerical and professional support staff ratios. These groups tend to increase in proportion to organization size. The clerical ratio increases because of the greater communication and reporting requirements needed as organizations grow larger. The professional staff ratio increases because of the greater need for specialized skills in larger, complex organizations.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-03 - 09-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Size, Bureaucracy, and Control KEYWORDS: Bloom’s: Remember 61. How are temporary systems useful in eradicating the problems of bureaucracy?

ANSWER: Temporary systems or structures are used to respond to an emergency or crisis situation. This approach is often used by organizations such as police and fire departments or other emergency management agencies to maintain the efficiency and control benefits of bureaucracy yet prevent the problem of slow response. The basic idea is that an organization can glide smoothly between a highly formalized, hierarchical structure that is effective during times of stability and a more flexible, loosely structured one needed to respond well to unexpected and demanding environmental conditions.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-04 - 09-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Bureaucracy in a Changing World KEYWORDS: Bloom’s: Remember 62. What steps are organizations taking in reducing bureaucracy? Define professionalism.

ANSWER: Organizations are taking a number of steps to reduce bureaucracy, often driven by top leaders. Many are cutting layers of the hierarchy, keeping headquarters staff small, and giving lower-level employees greater freedom to make decisions rather than burdening them with excessive rules and regulations. The commitment of top leadership is essential when an organization needs to reduce bureaucracy and become more flexible and responsive.

Professionalism is defined as the length of formal training and experience of employees.

Companies enhance this trend when they provide ongoing training for all employees.

Increased training substitutes for bureaucratic rules and procedures that can constrain the creativity of employees in solving problems and also enhances individual and organizational capability.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-05 - 09-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Bureaucracy in a Changing World Cengage Learning Testing, Powered by Cognero

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KEYWORDS:

Bloom’s: Remember

63. What is clan control?

ANSWER:

Clan control is the use of social characteristics, such as shared values, commitment, traditions, and beliefs, to control behavior. Organizations that use clan control have strong cultures that emphasize shared values and trust among employees. Clan control is important when ambiguity and uncertainty are high. High uncertainty means an organization cannot put a price on its services, and things change so fast that rules and regulations are not able to specify every correct behavior. Under clan control, people may be hired because they are committed to the organization’s purpose, such as in a religious organization or an organization focused on a social mission. New employees are typically subjected to a long period of socialization to gain acceptance by colleagues.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-06 - 09-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Bureaucracy Versus Other Forms of Control KEYWORDS: Bloom’s: Remember 64. Describe the role of atrophy in an organization’s decline.

ANSWER: Atrophy occurs when organizations grow older and become inefficient and overly bureaucratized. The organization’s ability to adapt to its environment deteriorates. Often, atrophy follows a long period of success because an organization takes success for granted, becomes attached to practices and structures that worked in the past, and fails to adapt to changes in the environment. Some warning signals for organizational atrophy include excess administrative and support staff, cumbersome administrative procedures, lack of effective communication and coordination, and outdated organizational structure.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-07 - 09-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decline and Downsizing KEYWORDS: Bloom’s: Remember 65. Describe the crisis stage in an organization’s decline.

ANSWER: Crisis stage: In the fourth stage, the organization still has not been able to deal with decline effectively and is facing a panic. The organization may experience chaos, efforts to go back to basics, sharp changes, and anger. It is best for managers to prevent a stage-4 crisis; at this stage, the only solution is major reorganization. The social fabric of the organization is eroding, and dramatic actions are necessary, such as replacing top administrators and instituting revolutionary changes in structure, strategy, and culture. Workforce downsizing may be severe.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.09-07 - 09-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decline and Downsizing KEYWORDS: Bloom’s: Remember

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1. _____ refers to the quality of interactions among people and whether they share a common perspective. a. Social capital b. Interpersonal skill c. Mission culture d. Clan culture ANSWER: a Feedback: Social capital refers to the quality of interactions among people and whether they RATIONALE: share a common perspective.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-01 - 10-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Culture KEYWORDS: Bloom’s: Remember 2. Which of the following is true of organizational culture? a. It is initially expressed by the low-level managers. b. It cannot help an organization adapt to the external environment. c. It provides people with a sense of identity. d. It is invariant with time and change in leadership.

ANSWER: c Feedback: Organizational culture provides people with a sense of organizational identity and RATIONALE: generates in them a commitment to beliefs and values that are larger than themselves.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-01 - 10-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Culture KEYWORDS: Bloom’s: Understand 3. Which of the following is a critical function of cultures? a. To help organizations adapt to the external environment b. To enforce the policies of the organization in the work environment c. To project a positive image to competitors d. To enable the members to work independently ANSWER: a Feedback: Cultures serve two critical functions in organizations: (1) to integrate members so RATIONALE: that they know how to relate to one another and (2) to help the organization adapt to the external environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-01 - 10-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Culture KEYWORDS: Bloom’s: Remember 4. Which of the following refers to how an organization meets goals and deals with outsiders? a. External adaptation b. Conscious capitalism c. Internal integration Cengage Learning Testing, Powered by Cognero

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d. Mission culture ANSWER: RATIONALE:

a Feedback: External adaptation refers to how an organization meets goals and deals with outsiders.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-01 - 10-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Culture KEYWORDS: Bloom’s: Remember 5. Which of the following is the purpose of holding rites and ceremonies in an organization? a. To help the growth of sales and improve the profit margin b. To ensure the abolition of competitors c. To provide employees with moral guidance d. To provide dramatic examples of what a company values ANSWER: d Feedback: Managers hold rites and ceremonies to provide dramatic examples of what a RATIONALE: company values.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-01 - 10-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Culture KEYWORDS: Bloom’s: Understand 6. Korston Inc., a software development firm, makes its new hires walk a marathon across the city of Cidville in order to demonstrate the determination of the employees. After the marathon, they are made to recount their experiences and describe how this event has motivated them to work hard. This scenario illustrates a _____. a. rite of passage b. mission culture c. clan culture d. rite of renewal ANSWER: a Feedback: Managers hold rites and ceremonies to provide dramatic examples of what a RATIONALE: company values. One type of rite that appears in organizations is a rite of passage, which facilitates the transition of employees into new social roles.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-01 - 10-01 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Organizational Culture KEYWORDS: Bloom’s: Apply 7. Which of the following rites in an organization facilitates the transition of employees into new social roles? a. Rite of passage b. Rite of renewal c. Rite of enhancement d. Rite of degradation ANSWER: a Cengage Learning Testing, Powered by Cognero

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RATIONALE:

Feedback: Managers hold rites and ceremonies to provide dramatic examples of what a company values. One type of rite that appears in organizations is a rite of passage, which facilitates the transition of employees into new social roles.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-01 - 10-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Culture KEYWORDS: Bloom’s: Remember 8. Which of the following rites in an organization creates common bonds and good feelings among employees and increases commitment to the organization? a. Rite of renewal b. Rite of degradation c. Rite of integration d. Rite of enhancement ANSWER: c Feedback: A rite of integration is a type of rite which creates common bonds and good RATIONALE: feelings among employees and increases commitment to the organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-01 - 10-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Culture KEYWORDS: Bloom’s: Remember 9. Which of the following is a reason for some stories to be considered as legends? a. The events are historic and may have been embellished with fictional details. b. They encapsulate key cultural values in the form of mottos or mantras. c. The content of the stories is relevant and accurately based on true events. d. They are rumors circulated in organizations to mislead competitors.

ANSWER: a Feedback: Some stories are considered legends because the events are historic and may RATIONALE: have been embellished with fictional details.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-01 - 10-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Culture KEYWORDS: Bloom’s: Understand 10. Ringmart is a fast-food joint that has a motto “Fast food, fast delivery”. This is an example of a _____. a. legend b. myth c. story d. saying ANSWER: d Feedback: Sayings are mottoes or mantras that encapsulate key cultural values.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-01 - 10-01 Cengage Learning Testing, Powered by Cognero

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NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Organizational Culture KEYWORDS: Bloom’s: Apply 11. Which of the following is not one of the four categories of culture? a. Clan b. Flexibility c. Mission d. Adaptability ANSWER: b Feedback: The four categories of culture are adaptability, mission, clan, and bureaucratic.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-02 - 10-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design and Culture KEYWORDS: Bloom’s: Remember 12. The _____ is characterized by strategic focus on the external environment through flexibility and change to meet customer needs. a. adaptability culture b. mission culture c. clan culture d. bureaucratic culture ANSWER: a Feedback: The adaptability culture is characterized by strategic focus on the external RATIONALE: environment through flexibility and change to meet customer needs.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-02 - 10-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design and Culture KEYWORDS: Bloom’s: Remember 13. Which of the following types of organizations is best suited to the mission culture? a. One that is concerned with the involvement and participation of the organization’s members b. One that is concerned with the rapidly changing expectations from the external environment c. One that is concerned with serving specific customers in the external environment but without the need for rapid change d. One that is concerned with the internal operations and a consistency orientation for a stable environment ANSWER: c Feedback: An organization concerned with serving specific customers in the external RATIONALE: environment, but without the need for rapid change, is suited to the mission culture.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-02 - 10-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design and Culture KEYWORDS: Bloom’s: Understand Cengage Learning Testing, Powered by Cognero

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14. Which of the following does the mission culture emphasize? a. The involvement and participation of the organization’s members b. The rapidly changing expectations from the external environment c. A consistency orientation for a stable environment d. A clear vision of the organization’s purpose ANSWER: d Feedback: The mission culture is characterized by emphasis on a clear vision of the RATIONALE:

organization’s purpose and on the achievement of goals, such as sales growth, profitability, or market share, to help achieve the purpose.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-02 - 10-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design and Culture KEYWORDS: Bloom’s: Understand 15. Which of the following is the main focus of the clan culture? a. The involvement and participation of the organization’s members b. The external environment and customer needs c. A consistency orientation for a stable environment d. A clear vision of the organization’s purpose ANSWER: a Feedback: The clan culture has a primary focus on the involvement and participation of the RATIONALE:

organization’s members and on rapidly changing expectations from the external environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-02 - 10-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design and Culture KEYWORDS: Bloom’s: Understand 16. Most managers are shifting away from bureaucratic cultures because of a need for: a. greater flexibility. b. better decision-making techniques. c. easier communication channels. d. reducing employee participation.

ANSWER: a Feedback: Today, most managers are shifting away from bureaucratic cultures because of a RATIONALE: need for greater flexibility.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-02 - 10-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design and Culture KEYWORDS: Bloom’s: Understand 17. The degree of agreement among members of an organization about the importance of specific values is referred to as: a. bureaucratic culture. b. culture strength. c. internal integration.

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d. social responsibility.

ANSWER: b Feedback: The degree of agreement among members of an organization about the RATIONALE: importance of specific values is referred to as culture strength.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-02 - 10-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design and Culture KEYWORDS: Bloom’s: Remember 18. _____ develop to reflect the common problems, goals, and experiences that members of a team, department, or other unit share. a. Legends b. Rites c. Subcultures d. Clan cultures ANSWER: c Feedback: Subcultures develop to reflect the common problems, goals, and experiences that RATIONALE: members of a team, department, or other unit share.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-02 - 10-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design and Culture KEYWORDS: Bloom’s: Remember 19. Which of the following is true of constructive cultures? a. Constructive cultures encourage rigidity and stability. b. In constructive cultures, managers are concerned with customers, employees, and internal processes. c. In constructive cultures, managers are more concerned about themselves or their own special projects. d. Constructive cultures discourage adaptation to the external environment.

ANSWER: b Feedback: In constructive cultures, managers are concerned with customers and employees, RATIONALE: as well as with the internal processes and procedures that bring about useful change.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-03 - 10-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Constructive Culture, Learning, and Performance KEYWORDS: Bloom’s: Understand 20. Which of the following is not true of managers in non-constructive cultures? a. They tend to be isolated and bureaucratic. b. They care deeply about stakeholders. c. They are comfortable with the status quo. d. They care mainly about themselves.

ANSWER: b Feedback: In non-constructive cultures, managers tend to be somewhat isolated and RATIONALE: bureaucratic. They are comfortable with status quo and do not take risks to adjust to or take Cengage Learning Testing, Powered by Cognero

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advantage of shifts in the environment. They care mainly about themselves, their immediate work group, or some product associated with that group. They value the familiar management process more than change initiatives.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-03 - 10-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Constructive Culture, Learning, and Performance KEYWORDS: Bloom’s: Understand 21. The _____ arises from a set of codified principles and regulations that describe how people are required to act, that are generally accepted in society, and that are enforceable in the courts. a. code of ethics b. rule of law c. code of conduct d. rule of thumb ANSWER: b Feedback: The rule of law arises from a set of codified principles and regulations that RATIONALE: describe how people are required to act, that are generally accepted in society, and that are enforceable in the courts.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-04 - 10-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Ethical Values and Social Responsibility KEYWORDS: Bloom’s: Remember 22. A(n) _____ arises in a situation concerning right and wrong where values are in conflict. a. culture problem b. legal issue c. cultural quandary d. ethical dilemma ANSWER: d Feedback: An ethical dilemma arises in a situation concerning right and wrong where values RATIONALE: are in conflict.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-04 - 10-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Ethical Values and Social Responsibility KEYWORDS: Bloom’s: Remember 23. _____ is an extension of the idea of managerial ethics and refers to management's obligation to make choices and take action so that the organization contributes to the welfare and interest of all organizational stakeholders. a. Culture strength b. Value-based leadership c. Corporate social responsibility d. External adaptation ANSWER: c Feedback: The notion of corporate social responsibility (CSR) is an extension of the idea of RATIONALE: managerial ethics and refers to management’s obligation to make choices and take action so

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that the organization contributes to the welfare and interest of all organizational stakeholders, such as employees, customers, shareholders, the community, and the broader society.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-05 - 10-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Ethical Values and Social Responsibility KEYWORDS: Bloom’s: Remember 24. _____ refers to organizational policies and practices that both enhance the economic success of a company and advance the economic and social conditions of the communities in which the company operates. a. Conscious capitalism b. Internal integration c. Ethics hotline d. Bureaucratic culture ANSWER: a Feedback: Conscious capitalism refers to organizational policies and practices that both RATIONALE: enhance the economic success of a company and advance the economic and social conditions of the communities in which the company operates.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-05 - 10-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Ethical Values and Social Responsibility KEYWORDS: Bloom’s: Remember 25. Which of the following is a characteristic of values-based leaders? a. They put effort into maintaining positive interpersonal relationships. b. They punish the subordinates for their mistakes and failures. c. They are consistently ethical in their public lives but unethical in their private lives. d. They put company interests above ethics.

ANSWER: a Feedback: Values-based leaders treat others with care, are helpful and supportive of others, RATIONALE: and put effort into maintaining positive interpersonal relationships.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-06 - 10-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: How Managers Shape Culture and Ethics KEYWORDS: Bloom’s: Understand 26. Which of the following is true of an ethics committee? a. It is presided over by employees at the lower level of the organizational hierarchy. b. It sets ethical objectives that are common across all organizations in a particular industry. c. It comprises experts from outside the organization who oversee company ethics and set objectives. d. It provides rulings on ethical issues and assumes responsibility for disciplining wrongdoers.

ANSWER: d Feedback: An ethics committee is a cross-functional group of executives who oversee RATIONALE: company ethics. The committee provides rulings on questionable ethical issues and assumes responsibility for disciplining wrongdoers.

POINTS:

1

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LEARNING OBJECTIVES: ORGT.DAFT.16.10-06 - 10-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: How Managers Shape Culture and Ethics KEYWORDS: Bloom’s: Understand 27. Among the following leaders, who heads the ethics department in an organization? a. The director of the organization b. A compliance officer c. The vice-president of the organization d. A correctional officer ANSWER: b Feedback: The ethics departments are headed by a chief ethics or compliance officer.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-06 - 10-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: How Managers Shape Culture and Ethics KEYWORDS: Bloom’s: Remember 28. Most ethics offices have confidential _____ that employees can use to seek guidance as well as report questionable behavior. a. ethics hotlines b. grievance forums c. ethics courts d. grievance boards ANSWER: a Feedback: Most ethics offices have confidential ethics hotlines that employees can use to RATIONALE: seek guidance as well as report questionable behavior.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-06 - 10-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: How Managers Shape Culture and Ethics KEYWORDS: Bloom’s: Remember 29. _____ involves employee disclosure of illegal, immoral, or illegitimate practices on the part of the organization. a. External adaptation b. Conscious capitalism c. Organizational disclosure d. Whistle-blowing ANSWER: d Feedback: Whistle-blowing involves employee disclosure of illegal, immoral, or illegitimate RATIONALE: practices on the part of the organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-06 - 10-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: How Managers Shape Culture and Ethics KEYWORDS: Bloom’s: Remember Cengage Learning Testing, Powered by Cognero

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30. Ronald is an accountant at Bradmink Corporation. He has come to know that his company has been embezzling large sums of money from its clients. Ronald then informs the authorities of his company’s illegal activities. This scenario illustrates _____. a. external adaptation b. conscious capitalism c. organizational disclosure d. whistle-blowing ANSWER: d Feedback: Whistle-blowing involves employee disclosure of illegal, immoral, or illegitimate RATIONALE: practices on the part of the organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-06 - 10-06 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: How Managers Shape Culture and Ethics KEYWORDS: Bloom’s: Apply 31. Culture is a set of written rules and norms to guide an organization. a. True b. False ANSWER: False Feedback: Culture is the unwritten, feeling part of the organization.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-01 - 10-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Culture KEYWORDS: Bloom’s: Remember 32. In the context of corporate culture, internal integration means that members develop a collective identity and know how to work together effectively. a. True b. False ANSWER: True Feedback: Internal integration, as related to corporate culture, means that members develop RATIONALE: a collective identity and know how to work together effectively.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-01 - 10-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Culture KEYWORDS: Bloom’s: Remember 33. Legends are accurate representations of true events. a. True b. False ANSWER: False Feedback: Some stories are considered legends because the events are historic and may RATIONALE: have been embellished with fictional details.

POINTS:

1

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LEARNING OBJECTIVES: ORGT.DAFT.16.10-01 - 10-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Culture KEYWORDS: Bloom’s: Remember 34. Sayings are mottoes or mantras that encapsulate key cultural values. a. True b. False ANSWER: True Feedback: Sayings are mottoes or mantras that encapsulate key cultural values.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-01 - 10-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Culture KEYWORDS: Bloom’s: Remember 35. Symbols are narratives based on true events that are frequently shared among organizational employees and told to new employees to inform them about an organization. a. True b. False ANSWER: False Feedback: A symbol is something that represents another thing. In one sense, ceremonies, RATIONALE: stories, sayings, and rites are all symbols because they symbolize deeper values. Another symbol is a physical artifact of the organization. Physical symbols are powerful because they focus attention on a specific item.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-01 - 10-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Culture KEYWORDS: Bloom’s: Remember 36. Physical symbols are avoided in organizations because they focus on all items in general rather than a specific item. a. True b. False ANSWER: False Feedback: Physical symbols are powerful because they focus attention on a specific item.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-01 - 10-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Culture KEYWORDS: Bloom’s: Understand 37. The visible artifacts and behaviors can be used by managers to shape company values and to strengthen the desired corporate culture. a. True b. False ANSWER: True Cengage Learning Testing, Powered by Cognero

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RATIONALE:

Feedback: The rites and ceremonies, stories and sayings, symbols, organization structures, power relationships, and control systems just described are visible manifestations of underlying company values. These visible artifacts and behaviors can be used to interpret culture, but they are also used by managers to shape company values and to strengthen the desired corporate culture.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-01 - 10-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Culture KEYWORDS: Bloom’s: Understand 38. Most Internet-based companies use the adaptability type of culture. a. True b. False ANSWER: True Feedback: Most Internet-based companies use the adaptability type of culture, as do many RATIONALE: companies in the marketing, electronics, and cosmetics industries, because they must move quickly to satisfy customers.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-02 - 10-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design and Culture KEYWORDS: Bloom’s: Remember 39. In a mission culture, managers shape behavior by envisioning and communicating a desired future state for the organization. a. True b. False ANSWER: True Feedback: An organization concerned with serving specific customers in the external RATIONALE: environment, but without the need for rapid change, is suited to the mission culture. In a mission culture, managers shape behavior by envisioning and communicating a desired future state for the organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-02 - 10-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design and Culture KEYWORDS: Bloom’s: Understand 40. In an organization that follows the mission culture, bonuses and promotions are based on seniority rather than performance. a. True b. False ANSWER: False Feedback: In an organization that follows the mission culture, bonuses and promotions are RATIONALE: based on performance rather than seniority.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-02 - 10-02 NATIONAL STANDARDS: United States - AACSB: Analytic Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

Organization Design and Culture Bloom’s: Remember

41. The bureaucratic culture supports a methodical approach to doing business. a. True b. False ANSWER: True Feedback: The bureaucratic culture supports a methodical approach to doing business.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-02 - 10-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design and Culture KEYWORDS: Bloom’s: Understand 42. The bureaucratic culture is characterized by high personal involvement and low levels of consistency, conformity, and collaboration among members. a. True b. False ANSWER: False Feedback: Personal involvement is somewhat lower in organizations having a bureaucratic RATIONALE: culture, but that is outweighed by a high level of consistency, conformity, and collaboration among members.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-02 - 10-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design and Culture KEYWORDS: Bloom’s: Understand 43. In large organizations, culture is always uniform throughout the organization. a. True b. False ANSWER: False Feedback: Culture is not always uniform throughout the organization, particularly in large RATIONALE: companies.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-02 - 10-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design and Culture KEYWORDS: Bloom’s: Understand 44. When organizations are successful, the values, ideas, and practices that helped attain success become institutionalized. a. True b. False ANSWER: True Feedback: When organizations are successful, the values, ideas, and practices that helped RATIONALE: attain success become institutionalized.

POINTS:

1

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LEARNING OBJECTIVES: ORGT.DAFT.16.10-03 - 10-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Constructive Culture, Learning, and Performance KEYWORDS: Bloom’s: Understand 45. In successful organizations, culture becomes set and therefore does not require adaptation to the environment. a. True b. False ANSWER: False Feedback: A danger for many successful organizations is that the culture becomes set and RATIONALE: the company fails to adapt as the environment changes.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-03 - 10-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Constructive Culture, Learning, and Performance KEYWORDS: Bloom’s: Understand 46. Ethical standards for the most part apply to behavior not covered by the law. a. True b. False ANSWER: True Feedback: Ethical standards for the most part apply to behavior not covered by the law.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-04 - 10-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Ethical Values and Social Responsibility KEYWORDS: Bloom’s: Remember 47. Conscious capitalism diminishes the economic success of a company. a. True b. False ANSWER: False Feedback: Conscious capitalism, which has also been referred to as a shared value RATIONALE: approach, refers to organizational policies and practices that both enhance the economic success of a company and advance the economic and social conditions of the communities in which the company operates.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-05 - 10-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Ethical Values and Social Responsibility KEYWORDS: Bloom’s: Remember 48. Companies that favor fast growth and short-term profits over ethics are generally more successful in the long run. a. True b. False ANSWER: False Feedback: Companies that put ethics on the back burner in favor of fast growth and shortRATIONALE: Cengage Learning Testing, Powered by Cognero

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term profits ultimately suffer.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-05 - 10-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Ethical Values and Social Responsibility KEYWORDS: Bloom’s: Understand 49. Issuing an authoritative directive can impact an organization’s value system in a great manner. a. True b. False ANSWER: False Feedback: Issuing an authoritative directive has little or no impact on an organization’s value RATIONALE: system.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-06 - 10-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: How Managers Shape Culture and Ethics KEYWORDS: Bloom’s: Understand 50. Values-based leaders accept others’ mistakes and failures and are never condescending. a. True b. False ANSWER: True Feedback: Values-based leaders accept others’ mistakes and failures and are never RATIONALE: condescending.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-06 - 10-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: How Managers Shape Culture and Ethics KEYWORDS: Bloom’s: Understand 51. An ethics committee is a cross-functional group of executives who oversee company ethics. a. True b. False ANSWER: True Feedback: An ethics committee is a cross-functional group of executives who oversee RATIONALE: company ethics.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-06 - 10-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: How Managers Shape Culture and Ethics KEYWORDS: Bloom’s: Remember 52. Ethics departments in organizations are headed by a legislator who is common for all organizations in a particular industry. a. True b. False Cengage Learning Testing, Powered by Cognero

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ANSWER: RATIONALE:

False Feedback: Ethics departments in organizations are headed by a chief ethics or compliance officer, a high-level company executive who oversees all aspects of ethics, including establishing and broadly communicating ethical standards, setting up ethics training programs, supervising the investigation of ethical problems, and advising managers on the ethical aspects of corporate decisions.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-06 - 10-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: How Managers Shape Culture and Ethics KEYWORDS: Bloom’s: Remember 53. Whistle-blowing involves employee’s involvement in illegal, immoral, or illegitimate practices on behalf of the organization. a. True b. False ANSWER: False Feedback: Whistle-blowing involves employee disclosure of illegal, immoral, or illegitimate RATIONALE: practices on the part of the organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-06 - 10-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: How Managers Shape Culture and Ethics KEYWORDS: Bloom’s: Remember 54. Organizations can view whistle-blowing as a benefit to the company. a. True b. False ANSWER: True Feedback: Whistle-blowing involves employee disclosure of illegal, immoral, or illegitimate RATIONALE: practices on the part of the organization. Organizations can view whistle-blowing as a benefit to the company, helping prevent the kind of disasters that have hit companies such as Enron, Bear Stearns, Countrywide, News Corporation, and Lehman Brothers.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-06 - 10-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: How Managers Shape Culture and Ethics KEYWORDS: Bloom’s: Understand 55. A code of ethics is a formal statement of the company’s values concerning ethics and social responsibility. a. True b. False ANSWER: True Feedback: A code of ethics is a formal statement of the company’s values concerning ethics RATIONALE: and social responsibility.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-06 - 10-06 NATIONAL STANDARDS: United States - AACSB: Analytic Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

How Managers Shape Culture and Ethics Bloom’s: Remember

56. Explain social capital and its benefits to an organization.

ANSWER: Social capital refers to the quality of interactions among people and whether they share a common perspective. In organizations with a high degree of social capital, relationships are based on trust, mutual understandings, and shared norms and values that enable people to cooperate and coordinate their activities to achieve goals. An organization can have either a high or a low level of social capital. One way to think of social capital is as goodwill. When relationships both within the organization and with customers, suppliers, and partners are based on honesty, trust, and respect, a spirit of goodwill exists and people willingly cooperate to achieve mutual benefits. A high level of social capital enables frictionless social interactions and exchanges that help facilitate smooth organizational functioning.

Relationships based on cutthroat competition, self-interest, and subterfuge can be devastating to a company.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-01 - 10-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Culture KEYWORDS: Bloom’s: Understand 57. Describe the two levels of organizational culture.

ANSWER: Organizational culture exists at two levels. On the surface are visible artifacts and observable behaviors—the ways people dress and act; office layouts; the type of control systems and power structures used by the company; and the symbols, stories, and ceremonies organization members share. The visible elements of culture, however, reflect deeper values in the minds of organization members. These underlying values, assumptions, beliefs, and thought processes operate unconsciously to define the culture. The attributes of culture display themselves in many ways but typically evolve into a patterned set of activities carried out through social interactions. Those patterns can be used to interpret culture.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-01 - 10-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Culture KEYWORDS: Bloom’s: Understand 58. Discuss how stories and sayings are used as tools used to shape an organization’s culture.

ANSWER: Stories are narratives based on true events that are frequently shared among employees and told to new employees to inform them about an organization. Many stories are about company heroes who serve as models or ideals for upholding cultural norms and values.

Some stories are considered legends because the events are historic and may have been embellished with fictional details. Stories keep alive the primary values of the organization and provide a shared understanding among all employees. Sayings are mottoes or mantras that encapsulate key cultural values, such as Walmart’s “always low prices.”

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-01 - 10-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Culture KEYWORDS: Bloom’s: Understand Cengage Learning Testing, Powered by Cognero

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59. Identify the various dimensions of cultures in an organization.

ANSWER: Managers want a corporate culture that reinforces the strategy and structural design that the organization needs to be effective within its environment. The correct relationship among cultural values, organizational strategy and structure, and the environment can enhance organizational performance. Cultures can be assessed along many dimensions, such as the extent of collaboration versus isolation among people and departments, the importance of control and where control is concentrated, or whether the organization’s time orientation is short range or long range. Two of the most important dimensions are (1) the extent to which the competitive environment requires flexibility or stability and (2) the extent to which the organization’s strategic focus and strength are internal or external.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-02 - 10-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organization Design and Culture KEYWORDS: Bloom’s: Remember 60. Compare the organizations that have constructive cultures with those that have non-constructive cultures.

ANSWER: Non-constructive cultures encourage rigidity and stability. Constructive corporate cultures have different values and behavior patterns than non-constructive cultures. In constructive cultures, managers are concerned with customers and employees, as well as with the internal processes and procedures that bring about useful change. Behavior is flexible, and managers initiate change when needed, even if it involves risk. In non-constructive cultures, managers are more concerned about themselves or their own special projects, and their values discourage risk-taking and change. Thus, strong, healthy cultures help organizations adapt to the external environment, whereas strong, unhealthy cultures can encourage organizations to march resolutely in the wrong direction.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-03 - 10-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Constructive Culture, Learning, and Performance KEYWORDS: Bloom’s: Understand 61. Explain the relationship between ethical standards and legal requirements.

ANSWER: Ethics refers to the code of moral principles and values that governs the behaviors of a person or group with respect to what is right or wrong. Ethical values set standards as to what is good or bad in conduct and decision making. The rule of law arises from a set of codified principles and regulations that describe how people are required to act, that are generally accepted in society, and that are enforceable in the courts. Ethical standards for the most part apply to behavior not covered by the law, and the rule of law applies to behaviors not necessarily covered by ethical standards. Current laws often reflect combined moral judgments, but not all moral judgments are codified into law.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-04 - 10-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Ethical Values and Social Responsibility KEYWORDS: Bloom’s: Understand 62. Explain the importance of corporate social responsibility in an organization.

ANSWER: The notion of corporate social responsibility (CSR) is an extension of the idea of managerial ethics and refers to management’s obligation to make choices and take action so that the Cengage Learning Testing, Powered by Cognero

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organization contributes to the welfare and interest of all organizational stakeholders, such as employees, customers, shareholders, the community, and the broader society. The relationship of ethics and CSR to an organization’s financial performance concerns both managers and organization scholars and has generated a lively debate. Many studies have been undertaken to determine whether heightened ethical and social responsiveness increases or decreases a company’s financial performance. Studies have provided varying results, but they have generally found a positive relationship between ethical and socially responsible behavior and a firm’s financial performance. For example, a recent study of the top 100 global corporations that have made a commitment to sustainability, which means to weave environmental and social efforts to preserve natural resources into all their decisions, had significantly higher sales growth, return on assets, profits, and cash flow from operations in at least some areas of the business.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-05 - 10-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Ethical Values and Social Responsibility KEYWORDS: Bloom’s: Understand 63. Explain why it is required by an organization to protect whistle-blowers.

ANSWER: Whistle-blowing involves employee disclosure of illegal, immoral, or illegitimate practices on the part of the organization. As ethical problems in the corporate world increase, many companies are looking for ways to protect whistle-blowers. In addition, calls are increasing for stronger legal protection for those who report illegal or unethical business activities.

When there are no protective measures, whistle-blowers suffer, and the company may continue its unethical or illegal practices. Many governments, including the United States and Japan, have passed laws aimed at protecting whistle-blowers, but that is not enough.

Enlightened managers strive to create an organizational climate and culture in which people feel free to point out problems and managers take swift action to address concerns about unethical or illegal activities. Organizations can view whistle-blowing as a benefit to the company, helping prevent the kind of disasters that have hit companies such as Enron, Bear Stearns, Countrywide, News Corporation, and Lehman Brothers.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-06 - 10-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: How Managers Shape Culture and Ethics KEYWORDS: Bloom’s: Understand 64. Explain the importance of having a code of ethics in an organization.

ANSWER: At a minimum, every company needs a code of ethics that is easy to understand, includes examples, and explains expected behaviors and sanctions. A code of ethics is a formal statement of the company’s values concerning ethics and social responsibility; it clarifies to employees what the company stands for and its expectations for employee conduct. The code specifies the types of behaviors expected to honor these values and encourages employees to use available company resources to help make ethical choices and decisions. Codes of ethics may cover a broad range of issues, including statements of the company’s guiding values; guidelines related to issues such as workplace safety, the security of proprietary information, or employee privacy; and commitments to environmental responsibility, product safety, and other matters of concern to stakeholders. Some companies use broader values statements within which ethics is a part. These statements define ethical values as well as corporate culture and contain language about company responsibility, quality of products, and treatment of employees. A formal statement of values can serve as a fundamental organizational document that defines what the organization stands for and clarifies the Cengage Learning Testing, Powered by Cognero

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expected ethical behaviors and choices. Although written codes of ethics and value statements are important, it is essential that top managers support and reinforce the codes through their actions, including rewards for compliance and discipline for violations.

Otherwise, a code of ethics is nothing more than a piece of paper. Indeed, one study found that companies with a written code of ethics are just as likely as those without a code to be found guilty of illegal activities.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-06 - 10-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: How Managers Shape Culture and Ethics KEYWORDS: Bloom’s: Understand 65. Describe the ethical challenges faced by organizations operating globally.

ANSWER: Organizations operating on a global basis often face particularly tough ethical challenges because of the various cultural and market factors they deal with. The greater complexity of the environment and organizational domain creates a greater potential for ethical problems or misunderstandings. The global supply chain is a source of ongoing challenges for managers, for example. The global supply chain is so broad and diffuse that managers often have a hard time even knowing what firms they are doing business with, much less what is going on in all those different contractors and subcontractors. Many companies retract their orders and stop doing business with companies that are found to use unsafe or unethical practices. A more recent approach some are taking is to work closely with overseas factories to improve their conditions, which managers say benefits both sides of the equation. Another concern when doing business globally is that employees from different countries may have varied attitudes and beliefs that make it difficult to establish a sense of community and cohesiveness based on the corporate culture. In fact, research has indicated that national culture has a greater impact on employees than does corporate culture, and differences in national culture also create tremendous variance in ethical attitudes. Managers often struggle to translate the ideas for developing strong, ethical corporate cultures to a complex global environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.10-06 - 10-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Corporate Culture and Ethics in a Global Environment KEYWORDS: Bloom’s: Understand

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1. _____ occurs occasionally, with periods of relative stability, and managers can respond with technical, product, or structural innovations as needed. a. Disruptive change b. Episodic change c. Structural change d. Continuous change ANSWER: b Feedback: Episodic change is what many long-time managers are accustomed to. This type RATIONALE: of change occurs occasionally, with periods of relative stability, and managers can respond with technical, product, or structural innovations as needed.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-01 - 11-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Strategic Role of Change KEYWORDS: Bloom’s: Remember 2. _____ occurs frequently, with fewer and shorter periods of stability. a. Disruptive change b. Episodic change c. Structural change d. Continuous change ANSWER: d Feedback: Most organizations today experience continuous change because of a rapidly RATIONALE: shifting environment. This type of change occurs frequently, with fewer and shorter periods of stability.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-01 - 11-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Strategic Role of Change KEYWORDS: Bloom’s: Remember 3. The Research and Development Unit of Blue Lagoon, a multinational electronic brand, has released another update to Lagoon X4848i, a smartphone. This latest update is their fourth within a year. This adaptation to environmental shift is an example of the company’s response to _____. a. disruptive change b. continuous change c. episodic change d. annual change ANSWER: b Feedback: This adaptation to environmental shift is an example of Blue Lagoon’s response to RATIONALE: continuous change. Most organizations today experience continuous change because of a rapidly shifting environment. This type of change occurs frequently, with fewer and shorter periods of stability.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-01 - 11-01 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: The Strategic Role of Change KEYWORDS: Bloom’s: Apply Cengage Learning Testing, Powered by Cognero

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4. Which of the following is a difference between episodic change and continuous change? a. Episodic change occurs occasionally, while continuous change occurs frequently. b. Episodic change occurs with fewer and shorter periods of stability, while continuous change occurs with frequent and longer periods of stability. c. Episodic change requires complete replacement of an existing product, while continuous change requires partial replacement of an existing product. d. Episodic change enables distinctive competence, while continuous change disables distinctive competence.

ANSWER: a Feedback: Episodic change is what many long-time managers are accustomed to. This type RATIONALE: of change occurs occasionally, with periods of relative stability, and managers can respond with technical, product, or structural innovations as needed. Most organizations today, however, experience continuous change because of a rapidly shifting environment. This type of change occurs frequently, with fewer and shorter periods of stability.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-01 - 11-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Strategic Role of Change KEYWORDS: Bloom’s: Understand 5. _____ refers to innovations in products or services that typically start small and end up completely replacing an existing product or service technology for producers and consumers. a. Disruptive innovation b. Organizational innovation c. Open innovation d. Culture innovation ANSWER: a Feedback: Disruptive innovation refers to innovations in products or services that typically RATIONALE: start small and end up completely replacing an existing product or service technology for producers and consumers. Companies that initiate a disruptive innovation typically win big; companies affected by a disruptive innovation may be put out of business.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-01 - 11-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Strategic Role of Change KEYWORDS: Bloom’s: Remember 6. _____ are changes in an organization’s production process, including its knowledge and skill base, that enable distinctive competence. a. Strategy and structure innovations b. Product and service innovations c. Technology innovations d. Culture innovations ANSWER: c Feedback: Technology innovations are changes in an organization’s production process, RATIONALE: including its knowledge and skill base, that enable distinctive competence. These changes are designed to make production more efficient or to produce greater volume.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-01 - 11-01 Cengage Learning Testing, Powered by Cognero

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NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Strategic Role of Change KEYWORDS: Bloom’s: Remember 7. _____ pertain to the administrative domain in an organization. a. Technology innovations b. Strategy and structure innovations c. Culture innovations d. Product and service innovations ANSWER: b Feedback: Strategy and structure innovations pertain to the administrative domain in an RATIONALE: organization. These innovations include changes in organization structure, strategic management, policies, reward systems, labor relations, coordination devices, management information and control systems, and accounting and budgeting systems.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-01 - 11-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Strategic Role of Change KEYWORDS: Bloom’s: Remember 8. _____ refer to changes in the values, attitudes, expectations, beliefs, abilities, and behavior of employees. a. Technology innovations b. Strategy and structure innovations c. Culture innovations d. Product and service innovations ANSWER: c Feedback: Culture innovations refer to changes in the values, attitudes, expectations, beliefs, RATIONALE: abilities, and behavior of employees. Culture innovations pertain to changes in how employees think; these are changes in mindset rather than technology, structure, or products.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-01 - 11-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Strategic Role of Change KEYWORDS: Bloom’s: Remember 9. _____ is considered the adoption of a new idea or behavior by an organization. a. Organizational environment b. Organizational innovation c. Organizational change d. Organizational behavior ANSWER: c Feedback: In the research literature on innovation, organizational change is considered the RATIONALE: adoption of a new idea or behavior by an organization. Organizational innovation, in contrast, is the adoption of an idea or behavior that is new to the organization’s industry, market, or general environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-02 - 11-02 Cengage Learning Testing, Powered by Cognero

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NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Elements for Successful Change KEYWORDS: Bloom’s: Remember 10. _____ is the adoption of an idea or behavior that is new to an organization’s industry, market, or general environment. a. Organizational environment b. Organizational innovation c. Organizational change d. Organizational behavior ANSWER: b Feedback: In the research literature on innovation, organizational change is considered the RATIONALE: adoption of a new idea or behavior by an organization. Organizational innovation, in contrast, is the adoption of an idea or behavior that is new to the organization’s industry, market, or general environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-02 - 11-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Elements for Successful Change KEYWORDS: Bloom’s: Remember 11. _____ is the generation of novel ideas that may meet perceived needs or respond to opportunities. a. Implementation b. Innovation c. Creativity d. Sustainability ANSWER: c Feedback: Internal creativity is a dramatic aspect of organizational change. Creativity is the RATIONALE: generation of novel ideas that may meet perceived needs or respond to opportunities.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-02 - 11-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Elements for Successful Change KEYWORDS: Bloom’s: Remember 12. Which of the following occurs when organization members actually use a new idea, technique, or behavior? a. Implementation b. Standardization c. Creativity d. Sustainability ANSWER: a Feedback: Implementation occurs when organization members actually use a new idea, RATIONALE: technique, or behavior. Materials and equipment may have to be acquired, and workers may have to be trained to use the new idea.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-02 - 11-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Elements for Successful Change Cengage Learning Testing, Powered by Cognero

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KEYWORDS:

Bloom’s: Remember

13. A(n) _____ structure stifles innovation with its emphasis on rules and regulations. a. mechanistic b. organic c. matrix d. multidomestic ANSWER: a Feedback: A mechanistic structure stifles innovation with its emphasis on rules and RATIONALE: regulations, but it is often the best structure for efficiently producing routine products.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-03 - 11-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Technology Change KEYWORDS: Bloom’s: Remember 14. Which of the following approaches is used to incorporate structures and management processes that are appropriate to both the creation and the implementation of innovation? a. Dual-core approach b. Top-down approach c. Bottom-up approach d. Ambidextrous approach ANSWER: d Feedback: An ambidextrous approach is used to incorporate structures and management RATIONALE: processes that are appropriate to both the creation and the implementation of innovation.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-03 - 11-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Technology Change KEYWORDS: Bloom’s: Remember 15. Which of the following is a difference between exploration and exploitation? a. Exploration extends the search for commercialization of new products beyond the boundaries of an organization, while exploitation limits itself to the boundary of an organization. b. Exploration involves adoption of a management practice, while exploitation involves implementation of a management practice. c. Exploration encourages creativity and developing new ideas, while exploitation implements those ideas to produce routine products. d. Exploration generates ideas that may meet perceived needs, while exploitation generates ideas that respond to opportunities.

ANSWER: c Feedback: Exploration means encouraging creativity and developing new ideas, whereas RATIONALE: exploitation means implementing those ideas to produce routine products.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-03 - 11-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Technology Change Cengage Learning Testing, Powered by Cognero

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KEYWORDS:

Bloom’s: Understand

16. Clint Hill, CEO of Oregano Systems, a software engineering company, holds internal contests on the company intranet to get his engineers to speak up with their ideas for improving the company. Employees vote on their favorites and the winner takes home a cash prize. In this scenario, which of the following approaches does Oregano Systems utilize? a. Top-down approach b. Bottom-up approach c. Dual-core approach d. Horizontal coordination approach ANSWER: b Feedback: Oregano Systems utilizes the bottom-up approach. Innovative companies RATIONALE: recognize that many useful ideas come from the people who are daily doing the work, serving the customers, fighting off the competition, and figuring out how best to get their jobs done.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-03 - 11-03 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Technology Change KEYWORDS: Bloom’s: Apply 17. _____ refers to coming up with new ideas for products or services. a. Idea conversion b. Idea generation c. Idea creation d. Idea incubation ANSWER: b Feedback: Idea generation refers to coming up with new ideas for products or services.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-03 - 11-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Technology Change KEYWORDS: Bloom’s: Remember 18. _____ means an organization creates an organic structure when such a structure is needed for the initiation of new ideas. a. Switching structures b. Spanning structures c. Opening structures d. Moving structures ANSWER: a Feedback: Switching structures means an organization creates an organic structure when RATIONALE: such a structure is needed for the initiation of new ideas.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-03 - 11-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Technology Change KEYWORDS: Bloom’s: Remember Cengage Learning Testing, Powered by Cognero

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19. _____ refer to a technique used to give free rein to creativity within organizations. a. Skunkworks b. Creative departments c. Venture teams d. Switching structures ANSWER: c Feedback: Venture teams are a technique used to give free rein to creativity within RATIONALE: organizations. Venture teams are often given a separate location and facilities so they are not constrained by organizational procedures.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-03 - 11-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Technology Change KEYWORDS: Bloom’s: Remember 20. Which of the following is true of venture teams? a. They free creative people from the bureaucracy of a large corporation. b. They are used to develop an internal entrepreneurial spirit among all employees. c. They impede the development of new ideas within an organization. d. They are constrained by organizational procedures.

ANSWER: a Feedback: Venture teams are a technique used to give free rein to creativity within RATIONALE: organizations. Numerous organizations have used the venture team concept to free creative people from the bureaucracy of a large corporation.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-03 - 11-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Technology Change KEYWORDS: Bloom’s: Remember 21. A(n) _____ is a separate, small, informal, highly autonomous, and often secretive group that focuses on breakthrough ideas for the business. a. creative department b. idea incubator c. new-venture fund d. skunkworks ANSWER: d Feedback: Skunkworks, a type of venture team, is a separate, small, informal, highly RATIONALE: autonomous, and often secretive group that focuses on breakthrough ideas for the business.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-03 - 11-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Technology Change KEYWORDS: Bloom’s: Remember 22. _____ means that each department involved with new products has excellent linkage with relevant sectors in the external environment. a. Horizontal coordination Cengage Learning Testing, Powered by Cognero

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b. Boundary spanning c. Open innovation d. Management innovation ANSWER: b Feedback: Boundary spanning means that each department involved with new products has RATIONALE: excellent linkage with relevant sectors in the external environment. R&D personnel are linked to professional associations and to colleagues in other R&D departments.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-04 - 11-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: New Products and Services KEYWORDS: Bloom’s: Remember 23. _____ means that technical, marketing, and production people share ideas and information. a. Horizontal coordination b. Boundary spanning c. Open innovation d. Management innovation ANSWER: a Feedback: Horizontal coordination means that technical, marketing, and production people RATIONALE: share ideas and information. Research people inform marketing of new technical developments to learn whether the developments are applicable to customers.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-04 - 11-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: New Products and Services KEYWORDS: Bloom’s: Remember 24. _____ means extending the search for and commercialization of new products beyond the boundaries of an organization and even beyond the boundaries of an industry. a. Horizontal coordination b. Boundary spanning c. Open innovation d. Management innovation ANSWER: c Feedback: In the past, most businesses generated their own ideas in-house and then RATIONALE: developed, manufactured, marketed, and distributed them, which represents a closed innovation approach. Today, though, forward-looking companies are trying a different method. Open innovation means extending the search for and commercialization of new products beyond the boundaries of the organization and even beyond the boundaries of the industry.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-04 - 11-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: New Products and Services KEYWORDS: Bloom’s: Remember 25. The point of the _____ is that many organizations must adopt frequent management changes and need to be structured Cengage Learning Testing, Powered by Cognero

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differently from organizations that rely on frequent technical and product changes for competitive advantage. a. horizontal coordination approach b. top-down approach c. ambidextrous approach d. dual-core approach ANSWER: d Feedback: The dual-core approach to organizational change compares management and RATIONALE: technical innovation. The point of the dual-core approach is that many organizations must adopt frequent management changes and need to be structured differently from organizations that rely on frequent technical and product changes for competitive advantage.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-06 - 11-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Strategy and Structure Change KEYWORDS: Bloom’s: Remember 26. _____ refers to the adoption and implementation of a management practice, process, structure, strategy, or technique that is new to an organization and is intended to further organizational goals. a. Horizontal coordination b. Management spanning c. Open innovation d. Management innovation ANSWER: d Feedback: Management innovation refers to the adoption and implementation of a RATIONALE: management practice, process, structure, strategy, or technique that is new to the organization and is intended to further organizational goals.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-06 - 11-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Strategy and Structure Change KEYWORDS: Bloom’s: Remember 27. _____ focuses on the human and social aspects of an organization as a way to improve an organization’s ability to adapt and solve problems. a. Organizational innovation b. Organizational change c. Organization development d. Organization behavior ANSWER: c Feedback: Organizational development (OD) focuses on the human and social aspects of the RATIONALE: organization as a way to improve the organization’s ability to adapt and solve problems. OD emphasizes the values of human development, fairness, openness, freedom from coercion, and individual autonomy that allows workers to perform the job as they see fit, within reasonable organizational constraints.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-07 - 11-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Culture Change Cengage Learning Testing, Powered by Cognero

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KEYWORDS:

Bloom’s: Remember

28. The _____ brings together participants from all parts of an organization—often including key stakeholders from outside the organization as well—in an off-site setting to discuss problems or opportunities and plan for change. a. ambidextrous approach b. large group intervention approach c. dual-core approach d. closed innovation approach ANSWER: b Feedback: The large group intervention approach, sometimes referred to as “whole system in RATIONALE: the room,” brings together participants from all parts of the organization—often including key stakeholders from outside the organization as well—in an off-site setting to discuss problems or opportunities and plan for change. A large group intervention might involve 50 to 500 people and last for several days.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-07 - 11-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Culture Change KEYWORDS: Bloom’s: Understand 29. When an organization development consultant brings together a group to discuss and solve problems such as conflicts, goals, decision making, or communication, the intervention technique is called: a. crowdsourcing. b. team building. c. culture management. d. technical training.

ANSWER: b Feedback: When an organization development consultant brings together a group to discuss RATIONALE: and solve problems such as conflicts, goals, decision making, or communication, the intervention technique is called team building. Team building promotes the idea that people who work together can work as a team.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-07 - 11-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Culture Change KEYWORDS: Bloom’s: Understand 30. Which of the following is not a technique for implementing change? a. Establishing a sense of urgency for change. b. Establishing a coalition to guide the change. c. Restraining idea champions. d. Finding an idea that fits the need.

ANSWER: c Feedback: Restraining idea champions is not a technique for implementing change. The RATIONALE: following techniques can be used to successfully implement change: 1. Establish a sense of urgency for change. 2. Establish a coalition to guide the change. 3. Create a vision and strategy for change. 4. Find an idea that fits the need. 5. Create change teams. 6. Foster idea champions.

POINTS:

1

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LEARNING OBJECTIVES: ORGT.DAFT.16.11-07 - 11-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Strategies for Implementing Change KEYWORDS: Bloom’s: Remember 31. Technology innovations are designed to make production less efficient or to produce lesser volume. a. True b. False ANSWER: False Feedback: Technology innovations are changes in an organization’s production process, RATIONALE: including its knowledge and skill base, that enable distinctive competence. These changes are designed to make production more efficient or to produce greater volume.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-01 - 11-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Strategic Role of Change KEYWORDS: Bloom’s: Understand 32. Product and service innovations are designed to make production more efficient or to produce greater volume. a. True b. False ANSWER: False Feedback: Technology innovations are changes in an organization’s production process, RATIONALE: including its knowledge and skill base, that enable distinctive competence. These changes are designed to make production more efficient or to produce greater volume. Product and service innovations pertain to the product or service outputs of an organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-01 - 11-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Strategic Role of Change KEYWORDS: Bloom’s: Understand 33. Organizational innovation is considered the adoption of a new idea or behavior by an organization. a. True b. False ANSWER: False Feedback: Organizational change is considered the adoption of a new idea or behavior by an RATIONALE: organization. Organizational innovation, in contrast, is the adoption of an idea or behavior that is new to the organization’s industry, market, or general environment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-02 - 11-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Elements for Successful Change KEYWORDS: Bloom’s: Remember 34. Implementation occurs when managers or other decision makers choose to go ahead with a proposed idea. a. True b. False Cengage Learning Testing, Powered by Cognero

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ANSWER: RATIONALE:

False Feedback: The decision to adopt occurs when managers or other decision makers choose to go ahead with a proposed idea. Key managers and employees need to be in agreement to support the change.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-02 - 11-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Elements for Successful Change KEYWORDS: Bloom’s: Understand 35. An innovative organization is characterized by flexibility and empowered employees and the absence of rigid work rules. a. True b. False ANSWER: True Feedback: Organizations face a contradiction when it comes to technology change because RATIONALE: the conditions that promote new ideas are not generally the best for implementing those ideas for routine production. An innovative organization is characterized by flexibility and empowered employees and the absence of rigid work rules.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-03 - 11-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Technology Change KEYWORDS: Bloom’s: Understand 36. Organic organizations encourage a top-down innovation process. a. True b. False ANSWER: False Feedback: The flexibility of an organic organization is attributed to people’s freedom to be RATIONALE: creative and introduce new ideas. Organic organizations encourage a bottom-up innovation process.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-03 - 11-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Technology Change KEYWORDS: Bloom’s: Understand 37. A mechanistic structure stifles innovation with its emphasis on rules and regulations. a. True b. False ANSWER: True Feedback: A mechanistic structure stifles innovation with its emphasis on rules and RATIONALE: regulations, but it is often the best structure for efficiently producing routine products.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-03 - 11-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Technology Change Cengage Learning Testing, Powered by Cognero

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KEYWORDS:

Bloom’s: Understand

38. Companies that want to support innovation implement a variety of mechanisms that encourage a top-down flow of ideas. a. True b. False ANSWER: False Feedback: Companies that want to support innovation implement a variety of mechanisms, RATIONALE: systems, and processes that encourage a bottom-up flow of ideas and make sure they get heard and acted upon by top executives.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-03 - 11-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Technology Change KEYWORDS: Bloom’s: Understand 39. Departments that use innovations developed by creative departments tend to have an organic structure more suitable for efficient production. a. True b. False ANSWER: False Feedback: Departments that initiate change are organically structured to facilitate the RATIONALE: generation of new ideas and techniques. Departments that use innovations developed by creative departments tend to have a mechanistic structure more suitable for efficient production.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-03 - 11-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Technology Change KEYWORDS: Bloom’s: Understand 40. Idea incubator is a popular way to facilitate the development of new ideas within an organization. a. True b. False ANSWER: True Feedback: Idea incubator, a type of creative department, is an increasingly popular way to RATIONALE: facilitate the development of new ideas within an organization. An idea incubator provides a safe harbor where ideas from employees throughout the organization can be developed without interference from company bureaucracy or politics.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-03 - 11-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Technology Change KEYWORDS: Bloom’s: Understand 41. Corporate entrepreneurship attempts to develop an internal entrepreneurial spirit, philosophy, and structure that will produce a lower-than-average number of innovations. a. True b. False Cengage Learning Testing, Powered by Cognero

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ANSWER: RATIONALE:

False Feedback: Corporate entrepreneurship attempts to develop an internal entrepreneurial spirit, philosophy, and structure that will produce a higher-than-average number of innovations.

Corporate entrepreneurship may involve the use of creative departments and new-venture teams, but it also attempts to release the creative energy of all employees in an organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-03 - 11-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Technology Change KEYWORDS: Bloom’s: Remember 42. Corporate entrepreneurship attempts to release the creative energy of all employees in an organization. a. True b. False ANSWER: True Feedback: Corporate entrepreneurship may involve the use of creative departments and RATIONALE: new-venture teams, but it also attempts to release the creative energy of all employees in an organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-03 - 11-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Technology Change KEYWORDS: Bloom’s: Understand 43. Idea champions fight to overcome natural resistance to change and to convince others of the merit of a new idea. a. True b. False ANSWER: True Feedback: Idea champions provide the time and energy to make things happen. They fight to RATIONALE: overcome natural resistance to change and to convince others of the merit of a new idea.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-03 - 11-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Technology Change KEYWORDS: Bloom’s: Understand 44. Companies encourage idea champions by providing freedom and slack time to creative people. a. True b. False ANSWER: True Feedback: Companies encourage idea champions by providing freedom and slack time to RATIONALE: creative people. Companies such as IBM, Texas Instruments, General Electric, and 3M allow employees to develop new technologies without company approval.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-03 - 11-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Technology Change KEYWORDS: Bloom’s: Understand Cengage Learning Testing, Powered by Cognero

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45. Horizontal coordination decreases both the amount and the variety of information for new product development. a. True b. False ANSWER: False Feedback: Horizontal coordination, using mechanisms such as cross-functional teams, RATIONALE: increases both the amount and the variety of information for new product development, enabling the design of products that meet customer needs and circumventing manufacturing, quality, and marketing problems.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-04 - 11-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: New Products and Services KEYWORDS: Bloom’s: Understand 46. Open innovation means limiting the search for and commercialization of new products within the boundaries of an organization. a. True b. False ANSWER: False Feedback: Open innovation means extending the search for and commercialization of new RATIONALE: products beyond the boundaries of the organization and even beyond the boundaries of the industry.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-04 - 11-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: New Products and Services KEYWORDS: Bloom’s: Remember 47. The management core is concerned with the transformation of raw materials into organizational products and services. a. True b. False ANSWER: False Feedback: The technical core is concerned with the transformation of raw materials into RATIONALE: organizational products and services and involves the environmental sectors of customers and technology.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-06 - 11-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Strategy and Structure Change KEYWORDS: Bloom’s: Understand 48. Organizations that successfully adopt many management changes often have a smaller administrative ratio. a. True b. False ANSWER: False Feedback: Organizations that successfully adopt many management changes often have a RATIONALE: larger administrative ratio, are larger in size, and are centralized and formalized compared with organizations that adopt many technical changes.

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POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-06 - 11-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Strategy and Structure Change KEYWORDS: Bloom’s: Understand 49. If an organization has an organic structure, lower-level employees have less freedom and autonomy. a. True b. False ANSWER: False Feedback: If an organization has an organic structure, lower-level employees have more RATIONALE: freedom and autonomy and, hence, may resist top-down initiatives.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-06 - 11-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Strategy and Structure Change KEYWORDS: Bloom’s: Understand 50. Organizations that must adopt frequent management changes tend to use a top-down process and a mechanistic structure. a. True b. False ANSWER: True Feedback: Technical change, such as changes in production techniques and innovative RATIONALE: technology for new products, is facilitated by an organic structure, which allows ideas to bubble upward from lower- and middle- level employees. Organizations that must adopt frequent management changes, in contrast, tend to use a top-down process and a mechanistic structure.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-06 - 11-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Strategy and Structure Change KEYWORDS: Bloom’s: Understand 51. Organizations that have an organic technical core readily adopt management changes. a. True b. False ANSWER: False Feedback: The implementation of management innovation was extremely difficult in RATIONALE: organizations that had an organic technical core. The professional employees in a decentralized agency could resist civil service changes. By contrast, organizations that were considered more bureaucratic and mechanistic in the sense of high formalization and centralization adopted management changes readily.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-06 - 11-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Strategy and Structure Change KEYWORDS: Bloom’s: Understand Cengage Learning Testing, Powered by Cognero

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52. Organization development focuses on the human and social aspects of an organization as a way to improve the organization’s ability to adapt and solve problems. a. True b. False ANSWER: True Feedback: Organization development (OD) focuses on the human and social aspects of the RATIONALE: organization as a way to improve the organization’s ability to adapt and solve problems.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-07 - 11-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Culture Change KEYWORDS: Bloom’s: Understand 53. Organization development is a step-by-step process to solve a specific problem. a. True b. False ANSWER: False Feedback: Organization development is not a step-by-step procedure to solve a specific RATIONALE: problem but a process of fundamental change in the human and social systems of the organization, including organizational culture.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-07 - 11-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Culture Change KEYWORDS: Bloom’s: Understand 54. Team building promotes the idea that people who work together can work as a team. a. True b. False ANSWER: True Feedback: Team building promotes the idea that people who work together can work as a RATIONALE: team. A work team can be brought together to discuss conflicts, goals, the decision-making process, communication, creativity, and leadership.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-07 - 11-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Culture Change KEYWORDS: Bloom’s: Understand 55. Psychological safety means that people feel a sense of confidence that they will not be embarrassed or rejected by others in an organization. a. True b. False ANSWER: True Feedback: Psychological safety means that people feel a sense of confidence that they will RATIONALE: not be embarrassed or rejected by others in the organization. People need to feel secure and capable of making the changes that are asked of them.

POINTS:

1

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LEARNING OBJECTIVES: ORGT.DAFT.16.11-08 - 11-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Strategies for Implementing Change KEYWORDS: Bloom’s: Understand 56. What is disruptive innovation?

ANSWER: Disruptive innovation refers to innovations in products or services that typically start small and end up completely replacing an existing product or service technology for producers and consumers. Companies that initiate a disruptive innovation typically win big; companies affected by a disruptive innovation may be put out of business. Established companies typically ignore the initial small innovation because they want to hang onto their established business models.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-01 - 11-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: The Strategic Role of Change KEYWORDS: Bloom’s: Remember 57. Discuss in detail the required elements of successful change in an organization.

ANSWER: The required elements of successful change are ideas, needs, decision to adopt, implementation, and resources. For a change to be successfully implemented, managers must make sure each element occurs in the organization. If one of the elements is missing, the change process will fail.

1. Ideas. Change is an outward expression of ideas. No company can remain competitive without new ideas. An idea is a new way of doing things. It may be a new product or service, a new management concept, or a new procedure for working together in the organization.

Ideas can come from within or from outside the organization.

2. Need. Ideas are generally not seriously considered unless there is a perceived problem or crisis that provides a need for change. A perceived need for change occurs when managers see a gap between actual performance and desired performance in the organization. Managers try to establish a sense of urgency so that others will understand the need for change.

Sometimes a crisis provides an undoubted sense of urgency.

3. Decision to adopt. The decision to adopt occurs when managers or other decision makers choose to go ahead with a proposed idea. Key managers and employees need to be in agreement to support the change. For a major organizational change, the decision might require the signing of a legal document by the board of directors. For a small change, a middle manager or lower-level manager might be authorized to make the decision to adopt an idea.

4. Implementation. Implementation occurs when organization members actually use a new idea, technique, or behavior. Materials and equipment may have to be acquired, and workers may have to be trained to use the new idea. Implementation is a very important step because without it, previous steps are to no avail. Implementation of change is often the most difficult part of the change process. Until people use the new idea, no change has actually taken place.

5. Resources. Human energy and activity are required to bring about change. Change does not happen on its own; it requires time and resources, for both creating and implementing a new idea. Employees have to provide energy to see both the need and the idea to meet that need. Someone must develop a proposal and provide the time and effort to implement it.

Most innovations go beyond ordinary budget allocations and require special funding.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-02 - 11-02 NATIONAL STANDARDS: United States - AACSB: Analytic Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

Elements for Successful Change Bloom’s: Understand

58. Why do organizations employ ambidextrous approach?

ANSWER: To attain both innovation and efficiency, many organizations use an ambidextrous approach.

Ambidextrous approach incorporates structures and management processes that are appropriate to both the creation and the implementation of innovation. Another way to think of the ambidextrous approach is to look at the organization design elements that are important for exploring new ideas versus the design elements that are most suitable for exploiting current capabilities. Exploration means encouraging creativity and developing new ideas, whereas exploitation means implementing those ideas to produce routine products.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-03 - 11-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Technology Change KEYWORDS: Bloom’s: Understand 59. What is open innovation?

ANSWER: Many successful companies include customers, strategic partners, suppliers, and other outsiders directly in the product and service development process. One of the most popular trends is open innovation. In the past, most businesses generated their own ideas in-house and then developed, manufactured, marketed, and distributed them, which represents a closed innovation approach. Today, though, forward-looking companies are trying a different method. Open innovation means extending the search for and commercialization of new products beyond the boundaries of an organization and even beyond the boundaries of an industry.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-04 - 11-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: New Products and Services KEYWORDS: Bloom’s: Remember 60. What is management innovation?

ANSWER: Management innovation refers to the adoption and implementation of a management practice, process, structure, strategy, or technique that is new to an organization and is intended to further organizational goals. This type of change pertains to the design and structure of the organization itself, including restructuring, downsizing, teams, control systems, information systems, and departmental grouping.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-05 - 11-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Strategy and Structure Change KEYWORDS: Bloom’s: Remember 61. Discuss the dual-core approach.

ANSWER: The dual-core approach to organizational change identifies the unique processes associated with management change. Organizations—schools, hospitals, city governments, welfare agencies, government bureaucracies, and many business firms—can be conceptualized as having two cores: a technical core and a management core. Each core has its own employees, tasks, and environmental domain. Innovation can originate in either core.

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The management core is above the technical core in the hierarchy. The responsibility of the management core includes the structure, control, and coordination of the organization itself and concerns the environmental sectors of government, financial resources, economic conditions, human resources, and competitors. The technical core is concerned with the transformation of raw materials into organizational products and services and involves the environmental sectors of customers and technology.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-06 - 11-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Strategy and Structure Change KEYWORDS: Bloom’s: Remember 62. What is organizational development?

ANSWER: Managers use a variety of approaches and techniques for changing corporate culture. One method of quickly bringing about culture change is known as organization development (OD), which focuses on the human and social aspects of an organization as a way to improve the organization’s ability to adapt and solve problems. OD emphasizes the values of human development, fairness, openness, freedom from coercion, and individual autonomy that allows workers to perform the job as they see fit, within reasonable organizational constraints.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-07 - 11-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Culture Change KEYWORDS: Bloom’s: Remember 63. Discuss the large group intervention approach.

ANSWER: The large group intervention approach, sometimes referred to as “whole system in the room,” brings together participants from all parts of an organization—often including key stakeholders from outside the organization as well—in an off-site setting to discuss problems or opportunities and plan for change. A large group intervention might involve 50 to 500 people and last for several days.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-07 - 11-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Culture Change KEYWORDS: Bloom’s: Remember 64. Discuss in detail the techniques that can be used to successfully implement change.

ANSWER: Top leaders articulate the vision and set the tone, but managers and employees throughout an organization are involved in the process of change. A number of techniques can be used to successfully implement change.

1. Establish a sense of urgency for change. Once managers identify a true need for change, they thaw resistance by creating a sense of urgency in others that the change is really needed.

2. Establish a coalition to guide the change. Effective change managers build a coalition of people throughout the organization who have enough power and influence to steer the change process. For implementation to be successful, there must be a shared commitment to the need and possibilities for change.

3. Create a vision and strategy for change. Leaders who have taken their companies through major successful transformations often have one thing in common: They focus on Cengage Learning Testing, Powered by Cognero

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formulating and articulating a compelling vision and strategy that will guide the change process. Even for a small change, a vision of how the future can be better and strategies to get there are important motivations for change.

4. Find an idea that fits the need. Finding the right idea often involves search procedures— talking with other managers, assigning a task force to investigate the problem, sending out a request to suppliers, or asking creative people within the organization to develop a solution.

5. Create change teams. The need for resources and energy to make change happen is important. Separate creative departments, new-venture groups, and ad hoc teams or task forces are ways to focus energy on both creation and implementation.

6. Foster idea champions. One of the most effective weapons in the battle for change is the idea champion. The most effective champion is a volunteer champion who is deeply committed to a new idea. The idea champion sees that all technical activities are correct and complete.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-07 - 11-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Strategies for Implementing Change KEYWORDS: Bloom’s: Understand 65. Discuss in detail the techniques employed by managers to overcome resistance.

ANSWER: To increase the chance of successful implementation, managers acknowledge the conflict, threats, and potential losses perceived by employees. Several strategies can be used by managers to overcome resistance: 1. Top management support. The visible support of top management makes people aware of the importance of the change. Top management support is especially important when a change involves multiple departments or when resources are being reallocated among departments.

2. Participation and involvement. Early and extensive participation in a change should be part of implementation. Participation gives those involved a sense of control over the change activity.

3. Alignment with needs and goals of users. The best strategy for overcoming resistance is to make sure change meets a real need. Resistance can be frustrating for managers, but moderate resistance to change is good for an organization. Resistance provides a barrier to frivolous changes and to change for the sake of change. The process of overcoming resistance to change normally requires that the change be good for its users.

4. Communication and training. Communication means informing users about the need for change and the consequences of a proposed change, preventing rumors, misunderstanding, and resentment.

5. An environment that affords psychological safety. Psychological safety means that people feel a sense of confidence that they will not be embarrassed or rejected by others in an organization. People need to feel secure and capable of making the changes that are asked of them.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.11-08 - 11-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Strategies for Implementing Change KEYWORDS: Bloom’s: Understand

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1. In the _____ stage of organizational decision making, information about environmental and organizational conditions is monitored to determine if performance is satisfactory and to diagnose the cause of shortcomings. a. problem identification b. problem generation c. problem solution d. problem deconstruction ANSWER: a Feedback: In the problem identification stage, information about environmental and RATIONALE: organizational conditions is monitored to determine if performance is satisfactory and to diagnose the cause of shortcomings.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-01 - 12-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Types of Decisions KEYWORDS: Bloom’s: Remember 2. In which of the following stages of the organizational decision-making process are alternative courses of action considered and one alternative is selected and implemented? a. The problem monitoring stage b. The problem identification stage c. The problem solution stage d. The problem generation stage ANSWER: c Feedback: In the problem solution stage, alternative courses of action are considered and RATIONALE: one alternative is selected and implemented.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-01 - 12-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Types of Decisions KEYWORDS: Bloom’s: Remember 3. Which of the following statements is true of programmed decisions? a. They are well defined. b. They are the decisions for which criteria of performance are normally fuzzy. c. They are non-repetitive. d. They are the decisions for which a single solution is custom-tailored to the problem.

ANSWER: a Feedback: Programmed decisions are repetitive and well defined, and procedures exist for RATIONALE: resolving the problem.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-02 - 12-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Types of Decisions KEYWORDS: Bloom’s: Understand 4. Which of the following is a characteristic of programmed decisions? a. They are poorly structured Cengage Learning Testing, Powered by Cognero

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b. They lack clear-cut decision criteria c. They have easily specified alternatives d. They are unique and non-repetitive ANSWER: c Feedback: Programmed decisions are well structured because criteria of performance are RATIONALE: normally clear, good information is available about current performance, and alternatives are easily specified.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-02 - 12-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Types of Decisions KEYWORDS: Bloom’s: Understand 5. Which of the following is true about nonprogrammed decisions? a. They have clear-cut decision criteria. b. They have many alternatives. c. They are novel. d. They are well defined.

ANSWER: c Feedback: Nonprogrammed decisions are novel and poorly defined, and no procedure exists RATIONALE: for solving the problem. They are used when an organization has not seen a problem before and may not know how to respond.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-02 - 12-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Types of Decisions KEYWORDS: Bloom’s: Understand 6. The _____ to individual decision making stresses the need for systematic analysis of a problem followed by choice and implementation in a logical, step-by-step sequence. a. intuitive approach b. rational approach c. bounded rationality approach d. problemistic search approach ANSWER: b Feedback: The rational approach to individual decision making stresses the need for RATIONALE: systematic analysis of a problem followed by choice and implementation in a logical, step-bystep sequence.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-03 - 12-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Individual Decision Making KEYWORDS: Bloom’s: Remember 7. Tom Smith is the marketing manager of Food Lion, a chain of grocery stores in North Carolina. Each year, Tom is required to make a decision on whether the current advertising campaign needs to be revamped to generate the sales targets for the year. In order to help him arrive at a decision, Tom reads up on latest shopping trends of buyers, observing buying habits of customers, and reviewing daily sales figures. In this scenario, Tom is _____.

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a. monitoring the decision environment b. defining the decision problem c. specifying decision objectives d. diagnosing the problem ANSWER: a Feedback: Tom is monitoring the decision environment. In the first step of the rational RATIONALE: approach to decision making, a manager monitors internal and external information that will indicate deviations from planned or acceptable behavior. He or she talks to colleagues and reviews financial statements, performance evaluations, industry indices, competitors’ activities, and so forth.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-03 - 12-03 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Individual Decision Making KEYWORDS: Bloom’s: Understand 8. Which of the following steps in the rational approach to decision making involves having a clear understanding of the various options available to achieve desired objectives? a. Specifying decision objectives b. Diagnosing the problem c. Monitoring the decision environment d. Developing alternative solutions ANSWER: d Feedback: While developing alternative solutions, which is a step in the rational approach, a RATIONALE: manager must have a clear understanding of the various options available to achieve desired objectives.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-03 - 12-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Individual Decision Making KEYWORDS: Bloom’s: Remember 9. The first four steps of the rational approach to decision making are specifically designed to help a manager: a. implement a solution. b. devise a problem solution. c. evaluate alternative solutions. d. identify the problem.

ANSWER: d Feedback: The first four steps in the sequence of the rational approach to decision making RATIONALE: are the problem identification stage, and the next four steps are the problem solution stage of decision making.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-03 - 12-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Individual Decision Making KEYWORDS: Bloom’s: Understand 10. The final four steps of the rational approach to decision making constitute the _____ stage of decision making.

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a. problem identification b. problem solution c. problem diagnosis d. problem monitoring ANSWER: b Feedback: The first four steps in this sequence are the problem identification stage, and the RATIONALE: next four steps are the problem solution stage of decision making.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-03 - 12-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Individual Decision Making KEYWORDS: Bloom’s: Remember 11. Which of the following is an organizational constraint during nonprogrammed decision making? a. Level of shared perspective b. Desire to satisfy emotional needs c. Personal desire for prestige d. Individual decision style ANSWER: a Feedback: Level of shared perspective is an organizational constraint during RATIONALE: nonprogrammed decision making.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-03 - 12-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Individual Decision Making KEYWORDS: Bloom’s: Understand 12. In _____, experience and judgment rather than sequential logic or explicit reasoning are used to make decisions. a. rational decision making b. ethical decision making c. intuitive decision making d. meditated decision making ANSWER: c Feedback: In intuitive decision making, experience and judgment rather than sequential logic RATIONALE: or explicit reasoning are used to make decisions.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-03 - 12-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Individual Decision Making KEYWORDS: Bloom’s: Understand 13. _____ is a new trend in decision making that involves combining intuitive and analytical thought. a. Quasirationality b. Satisficing c. Organized anarchy d. Point-counterpoint Cengage Learning Testing, Powered by Cognero

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ANSWER: RATIONALE:

a Feedback: A new trend in decision making is referred to as quasirationality, which basically means combining intuitive and analytical thought.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-03 - 12-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Individual Decision Making KEYWORDS: Bloom’s: Understand 14. The _____ to organizational decision making has been described as the analog to the rational approach by individual supervisors. a. bounded rationality approach b. intuitive approach c. management science approach d. problemistic approach ANSWER: c Feedback: The management science approach to organizational decision making is the RATIONALE: analog to the rational approach by individual managers.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-04 - 12-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decision Making KEYWORDS: Bloom’s: Remember 15. The Carnegie model of organizational decision making says that organizational decisions: a. involve few managers because of the simplicity with which decisions are made. b. involve a coalition of many managers to make the final choice. c. use coalitions only at higher levels of management. d. use coalitions only at lower levels of management.

ANSWER: b Feedback: Research by the Carnegie group indicated that organization-level decisions RATIONALE: involved many managers and that a final choice was based on a coalition among those managers.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-05 - 12-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decision Making KEYWORDS: Bloom’s: Understand 16. According to organizational decision making, _____ means organizations accept a reasonable rather than a maximum level of performance, enabling them to achieve several goals simultaneously. a. satisficing b. escalating c. constraining d. bargaining ANSWER: a Feedback: According to organizational decision making, satisficing means organizations RATIONALE: Cengage Learning Testing, Powered by Cognero

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accept a satisfactory rather than a maximum level of performance, enabling them to achieve several goals simultaneously.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-05 - 12-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decision Making KEYWORDS: Bloom’s: Remember 17. According to organizational decision making, _____ means managers look around the immediate environment for a solution to quickly resolve an issue. a. problemistic search b. satisficing c. coalition formation d. bargaining ANSWER: a Feedback: According to organizational decision making, problemistic search means RATIONALE: managers look around the immediate environment for a solution to quickly resolve a problem.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-05 - 12-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decision Making KEYWORDS: Bloom’s: Remember 18. The _____ places less emphasis on the political and social factors but tells more about the structured sequence of activities undertaken from the discovery of a problem to its solution. a. garbage can model b. management science approach c. bounded rationality approach d. incremental decision model ANSWER: d Feedback: The incremental decision model places less emphasis on the political and social RATIONALE: factors described in the Carnegie model but tells more about the structured sequence of activities undertaken from the discovery of a problem to its solution.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-05 - 12-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decision Making KEYWORDS: Bloom’s: Remember 19. Larry is the CEO of a chain of fast food restaurants that operates all over the U.S. It comes to his notice that one of the branches in Boston has received a lot of complaints from customers who claim that the staff is rude and the service is delayed. Larry arranges to get feedback from customers of the branch in question. In the context of the incremental decision model, Larry is in the _____ phase of the decision sequence. a. identification b. development c. evaluation d. selection ANSWER: a Cengage Learning Testing, Powered by Cognero

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RATIONALE:

Feedback: The identification phase begins with recognition. Recognition means one or more managers become aware of a problem and the need to make a decision. Recognition is usually stimulated by a problem or an opportunity. The second step is diagnosis, in which more information is gathered if needed to define the problem situation. Diagnosis may be systematic or informal, depending upon the severity of the problem.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-05 - 12-05 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Organizational Decision Making KEYWORDS: Bloom’s: Apply 20. In the selection phase of the decision sequence, the _____ form of selection is used when a final choice falls upon a single decision maker, and the choice involves decision based upon experience. a. judgment b. analysis c. bargaining d. authorization ANSWER: a Feedback: In the selection phase of the decision sequence, the judgment form of selection is RATIONALE: used when a final choice falls upon a single decision maker, and the choice involves judgment based upon experience.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-05 - 12-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decision Making KEYWORDS: Bloom’s: Remember 21. Which of the following is a difference between the garbage can model and the incremental and Carnegie models? a. Unlike the incremental and Carnegie models, the garbage can model is only applicable at the problem solution stage of decision making. b. Unlike the incremental and Carnegie models, the garbage can model deals with the pattern or flow of multiple decisions within organizations. c. Unlike the incremental and Carnegie models, the garbage can model is only applicable at the problem identification stage of decision making. d. Unlike the incremental and Carnegie models, the garbage can model focuses on how a single decision is made by the top management of an organization.

ANSWER: b Feedback: The garbage can model deals with the pattern or flow of multiple decisions within RATIONALE: organizations, whereas the incremental and Carnegie models focus on how a single decision is made.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-06 - 12-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decisions and Change KEYWORDS: Bloom’s: Understand 22. The originators of the garbage can model of decision making referred to highly uncertain conditions in an organization as a(n) _____. a. high-velocity environment Cengage Learning Testing, Powered by Cognero

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b. systematic revolution c. high-frequency environment d. organized anarchy ANSWER: d Feedback: The originators of the garbage can model of decision making referred to highly RATIONALE: uncertain conditions in an organization as an organized anarchy, which is an extremely organic organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-06 - 12-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decisions and Change KEYWORDS: Bloom’s: Understand 23. _____ is a characteristic that results in organized anarchies. a. Slow change b. Well-defined goals c. Unclear technology d. Bureaucratic environment ANSWER: c Feedback: Organized anarchies result from three characteristics: problematic preferences, RATIONALE: unclear, poorly understood technology, and turnover. Organized anarchies do not rely on the normal vertical hierarchy of authority and bureaucratic decision rules.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-06 - 12-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decision Making KEYWORDS: Bloom’s: Understand 24. Which of the following is a possible consequence of using the garbage can model for organizational decision making? a. Solutions are proposed only when problems exist. b. Problems are always solved once they have been identified. c. Choices are made without solving problems. d. Solutions are present for all kinds of problems.

ANSWER: c Feedback: One of the consequences of organizational decision making is that choices are RATIONALE: made without solving problems. A choice—for example, creating a new department or revising work procedures—may be made with the intention of solving a problem; but, under conditions of high uncertainty, the choice may be incorrect. Moreover, many choices just seem to happen.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-06 - 12-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decision Making KEYWORDS: Bloom’s: Understand 25. In the context of the contingency decision-making framework, _____ refers to the agreement among managers about the nature of an issue or opportunity and about which goals and outcomes to pursue. a. problem consensus Cengage Learning Testing, Powered by Cognero

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b. technical knowledge c. point-counterpoint d. decision learning ANSWER: a Feedback: In the context of the contingency decision-making framework, problem consensus RATIONALE: refers to the agreement among managers about the nature of a problem or opportunity and about which goals and outcomes to pursue.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-07 - 12-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Contingency Decision-Making Framework KEYWORDS: Bloom’s: Remember 26. In the context of the contingency decision-making framework, _____ refers to understanding and agreement about how to solve problems and reach organizational goals. a. coalition formation b. technical knowledge c. intuitive decision making d. problem consensus ANSWER: b Feedback: In the context of the contingency decision-making framework, technical RATIONALE: knowledge refers to understanding and agreement about how to solve problems and reach organizational goals.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-07 - 12-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Contingency Decision-Making Framework KEYWORDS: Bloom’s: Remember 27. According to the contingency decision-making framework, _____ means adopting a decision tried elsewhere in the hope that it will work in this situation. a. coalition b. inspiration c. imitation d. recognition ANSWER: c Feedback: According to the contingency decision-making framework, imitation means RATIONALE: adopting a decision tried elsewhere in the hope that it will work in this situation.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-07 - 12-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Contingency Decision-Making Framework KEYWORDS: Bloom’s: Remember 28. _____ suggests that the threat of a loss has a greater impact on a decision than the possibility of an equivalent gain. a. The Carnegie model b. Prospect theory Cengage Learning Testing, Powered by Cognero

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c. The bounded rationality perspective d. McGregor’s Theory X ANSWER: b Feedback: Prospect theory, developed by psychologists Daniel Kahneman and Amos RATIONALE: Tversky, suggests that the threat of a loss has a greater impact on a decision than the possibility of an equivalent gain.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-08 - 12-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Special Decision Circumstances KEYWORDS: Bloom’s: Remember 29. Sheila is one of the managers at Benson & Parker Advertising, an agency based in New York. She is a member of a coalition of managers who are deciding whether to shift their headquarters to Texas. Even though Sheila is against the move, she decides to suppress her opinion because most of the managers of the company favor the move. In this scenario, Sheila is engaging in _____. a. commitment escalation b. bargaining c. problemistic search d. groupthink ANSWER: d Feedback: Sheila is engaging in groupthink. Groupthink refers to the tendency of people in RATIONALE: groups to suppress contrary opinions.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-08 - 12-08 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Special Decision Circumstances KEYWORDS: Bloom’s: Apply 30. _____ means a commitment to make more informed and intelligent decisions based on the best available facts. a. Intuition-based management b. Evidence-based management c. Ethics-based management d. Value-based management ANSWER: b Feedback: Evidence-based management means a commitment to make more informed and RATIONALE: intelligent decisions based on the best available facts.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-08 - 12-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Special Decision Circumstances KEYWORDS: Bloom’s: Remember 31. In the problem identification stage, information about environmental and organizational conditions is monitored to determine if performance is satisfactory and to diagnose the cause of shortcomings. a. True b. False Cengage Learning Testing, Powered by Cognero

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ANSWER: RATIONALE:

True Feedback: In the problem identification stage, information about environmental and organizational conditions is monitored to determine if performance is satisfactory and to diagnose the cause of shortcomings.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-01 - 12-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Types of Decisions KEYWORDS: Bloom’s: Remember 32. Clear-cut decision criteria exist for nonprogrammed decisions. a. True b. False ANSWER: True Feedback: Clear-cut decision criteria do not exist for nonprogrammed decisions.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-02 - 12-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Types of Decisions KEYWORDS: Bloom’s: Remember 33. Typically, few alternatives can be developed for a programmed decision, so a single solution is custom-tailored to the problem. a. True b. False ANSWER: False Feedback: Typically, few alternatives can be developed for a nonprogrammed decision, so a RATIONALE: single solution is custom-tailored to the problem.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-02 - 12-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Types of Decisions KEYWORDS: Bloom’s: Understand 34. Particularly complex nonprogrammed decisions are often referred to as wicked decisions because simply defining the problem can turn into a major task. a. True b. False ANSWER: True Feedback: Particularly complex nonprogrammed decisions are often referred to as wicked RATIONALE: decisions because simply defining the problem can turn into a major task.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-02 - 12-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Types of Decisions KEYWORDS: Bloom’s: Remember

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35. Nonprogrammed decisions rely less on hard data, and there is less certainty about the outcomes. a. True b. False ANSWER: True Feedback: Nonprogrammed decisions rely less on hard data, and there is less certainty RATIONALE: about the outcomes.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-02 - 12-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Types of Decisions KEYWORDS: Bloom’s: Understand 36. The bounded rationality perspective to decision making describes how decisions actually have to be made under severe time and resource constraints. a. True b. False ANSWER: True Feedback: The bounded rationality perspective describes how decisions actually have to be RATIONALE: made under severe time and resource constraints.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-03 - 12-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Individual Decision Making KEYWORDS: Bloom’s: Remember 37. In the first step of the rational approach to decision making, the manager responds to deviations by identifying essential details of the problem: where, when, who was involved, who was affected, and how current activities are influenced. a. True b. False ANSWER: False Feedback: In the first step of the rational approach to decision making, a manager monitors RATIONALE: internal and external information that will indicate deviations from planned or acceptable behavior.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-03 - 12-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Individual Decision Making KEYWORDS: Bloom’s: Remember 38. While making important decisions, it is important to take one’s emotions into consideration. a. True b. False ANSWER: False Feedback: Managers make better decisions when—to the extent possible—they take RATIONALE: emotions out of the decision-making process.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-03 - 12-03 Cengage Learning Testing, Powered by Cognero

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NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Individual Decision Making KEYWORDS: Bloom’s: Remember 39. The point of the rational approach is that managers should try to use systematic procedures to arrive at good decisions. a. True b. False ANSWER: True Feedback: The point of the rational approach is that managers should try to use systematic RATIONALE: procedures to arrive at good decisions.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-03 - 12-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Individual Decision Making KEYWORDS: Bloom’s: Remember 40. Personal constraints during nonprogrammed decision making include individual desire for prestige and the desire to satisfy one’s emotional needs. a. True b. False ANSWER: True Feedback: Personal constraints during nonprogrammed decision making include personal RATIONALE: desire for prestige and the desire to satisfy one’s emotional needs.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-03 - 12-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Individual Decision Making KEYWORDS: Bloom’s: Remember 41. Intuitive processes are not used in the problem solution stage of decision making. a. True b. False ANSWER: False Feedback: Intuitive processes are also used in the problem solution stage. Executives RATIONALE: frequently make decisions without explicit reference to the impact on profits or to other measurable outcomes.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-03 - 12-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Individual Decision Making KEYWORDS: Bloom’s: Understand 42. One problem with the management science approach is that quantitative data are not rich and do not convey tacit knowledge. a. True b. False ANSWER: True Cengage Learning Testing, Powered by Cognero

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RATIONALE:

Feedback: One problem with the management science approach is that quantitative data are not rich and do not convey tacit knowledge. Informal cues that indicate the existence of problems have to be sensed on a more personal basis by managers.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-04 - 12-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decision Making KEYWORDS: Bloom’s: Understand 43. When goals are ambiguous and inconsistent, managers tend to agree about problem priorities. a. True b. False ANSWER: False Feedback: When goals are ambiguous and inconsistent, managers disagree about problem RATIONALE: priorities.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-05 - 12-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decision Making KEYWORDS: Bloom’s: Understand 44. One of the implications of coalition building for organizational decision behavior is that decisions are made to optimize rather than satisfice problem solutions. a. True b. False ANSWER: False Feedback: One of the implications of coalition building for organizational decision behavior is RATIONALE: that decisions are made to satisfice rather than to optimize problem solutions.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-05 - 12-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decision Making KEYWORDS: Bloom’s: Understand 45. The incremental model places major emphasis on political and social factors that influence decision outcomes. a. True b. False ANSWER: False Feedback: The incremental decision model places less emphasis on the political and social RATIONALE: factors described in the Carnegie model but tells more about the structured sequence of activities undertaken from the discovery of a problem to its solution.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-05 - 12-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decision Making KEYWORDS: Bloom’s: Understand 46. One of the discoveries from Mintzberg’s research is that major organizational choices are usually a series of small Cengage Learning Testing, Powered by Cognero

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choices that combine to produce the major decision. a. True b. False ANSWER: True Feedback: One of the discoveries from Mintzberg’s research is that major organizational RATIONALE: choices are usually a series of small choices that combine to produce the major decisions.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-05 - 12-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decision Making KEYWORDS: Bloom’s: Understand 47. A decision interrupt takes place when an organization must cycle back through a previous decision and try something new. a. True b. False ANSWER: True Feedback: A decision interrupt takes place when an organization must cycle back through a RATIONALE: previous decision and try something new.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-05 - 12-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decision Making KEYWORDS: Bloom’s: Remember 48. In the development phase of the incremental decision model, a solution is shaped to solve the problem defined in the identification phase. a. True b. False ANSWER: True Feedback: In the development phase of the incremental decision model, a solution is shaped RATIONALE: to solve the problem defined in the identification phase.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-05 - 12-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decision Making KEYWORDS: Bloom’s: Remember 49. The garbage can model was developed to explain the pattern of decision making in extremely certain organizational environments. a. True b. False ANSWER: False Feedback: The garbage can model was developed to explain the pattern of decision making RATIONALE: in organizations that experience extremely high uncertainty.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-06 - 12-06 NATIONAL STANDARDS: United States - AACSB: Analytic Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

Organizational Decisions and Change Bloom’s: Understand

50. In the garbage can model, potential solutions may be independent of problems, but ideas are brought to organizational consciousness because participants are attracted to those ideas. a. True b. False ANSWER: True Feedback: In the garbage can model, an idea may be proposed as a solution when no RATIONALE: problem is specified. Participants may simply be attracted to certain ideas and push them as logical choices regardless of problems.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-06 - 12-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decision Making KEYWORDS: Bloom’s: Remember 51. In the context of the garbage can model, choice opportunities are occasions when an organization usually makes a decision. a. True b. False ANSWER: True Feedback: In the context of the garbage can model, choice opportunities are occasions when RATIONALE: an organization usually makes a decision.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-06 - 12-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decisions and Change KEYWORDS: Bloom’s: Remember 52. In the garbage can model of decision making, solutions are proposed only when problems exist. a. True b. False ANSWER: False Feedback: In the garbage can model of decision making, solutions may be proposed even RATIONALE: when problems do not exist.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-06 - 12-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decisions and Change KEYWORDS: Bloom’s: Remember 53. Problem consensus tends to be high when organizations are differentiated. a. True b. False ANSWER: False Feedback: Problem consensus tends to be low when organizations are differentiated.

RATIONALE: Cengage Learning Testing, Powered by Cognero

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POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-07 - 12-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Contingency Decision-Making Framework KEYWORDS: Bloom’s: Understand 54. Evidence-based management can be particularly useful for overcoming fear of loss and the problem of escalating commitment. a. True b. False ANSWER: True Feedback: Evidence-based management can be particularly useful for overcoming fear of RATIONALE: loss and the problem of escalating commitment.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-08 - 12-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Special Decision Circumstances KEYWORDS: Bloom’s: Understand 55. The role of the devil’s advocate is to support the assumptions and assertions made by the group. a. True b. False ANSWER: False Feedback: The role of the devil’s advocate is to challenge the assumptions and assertions RATIONALE: made by the group.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-08 - 12-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Special Decision Circumstances KEYWORDS: Bloom’s: Understand 56. Describe the difference between programmed decisions and nonprogrammed decisions, and provide an example of each.

ANSWER: Programmed decisions are repetitive and well defined, and procedures exist for resolving the problem. They are well structured because criteria of performance are normally clear, good information is available about current performance, alternatives are easily specified, and there is relative certainty that the chosen alternative will be successful. Examples of programmed decisions include decision rules, such as when to replace an office copy machine, when to reimburse managers for travel expenses, or whether an applicant has sufficient qualifications for an assembly-line job. Many companies adopt rules based on experience with programmed decisions. For example, a rule for hotel managers assigning staff for banquets is to allow one server per 30 guests for a sit-down function and one server per 40 guests for a buffet.

Nonprogrammed decisions are novel and poorly defined, and no procedure exists for solving the problem. They are used when an organization has not seen a problem before and may not know how to respond. Clear-cut decision criteria do not exist. Alternatives are fuzzy. There is uncertainty about whether a proposed solution will solve the problem. Typically, few alternatives can be developed for a nonprogrammed decision, so a single solution is customtailored to the problem. Managers at fast-food chain McDonald’s face various decisions, some programmed and some nonprogrammed. Many nonprogrammed decisions, such as the Cengage Learning Testing, Powered by Cognero

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decision to enter a new market for McDonald’s, involve strategic planning where uncertainty is great and decisions are complex.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-02 - 12-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Types of Decisions KEYWORDS: Bloom’s: Understand 57. List and describe the steps of the rational approach to decision making.

ANSWER: According to the rational approach, decision making can be broken down into eight steps: ∙ Monitor the decision environment. In the first step, a manager monitors internal and external information that will indicate deviations from planned or acceptable behavior. He or she talks to colleagues and reviews financial statements, performance evaluations, industry indices, competitors’ activities, and so forth. ∙ Define the decision problem. The manager responds to deviations by identifying essential details of the problem: where, when, who was involved, who was affected, and how current activities are influenced. ∙ Specify decision objectives. The manager determines what performance outcomes should be achieved by a decision. ∙ Diagnose the problem. In this step, the manager digs below the surface to analyze the cause of the problem. He or she might gather additional data to facilitate this diagnosis.

Understanding the cause enables appropriate treatment. ∙ Develop alternative solutions. Before a manager can move ahead with a decisive action plan, he or she must have a clear understanding of the various options available to achieve desired objectives. The manager may seek ideas and suggestions from other people. ∙ Evaluate alternatives. This step may involve the use of statistical techniques or personal experience to gauge the probability of success. The manager assesses the merits of each alternative, as well as the probability that it will achieve the desired objectives. ∙ Choose the best alternative. This step is when the manager uses his or her analysis of the problem, objectives, and alternatives to select a single alternative that has the best chance for success. ∙ Implement the chosen alternative. Finally, the manager uses managerial, administrative, and persuasive abilities and gives directions to ensure that the decision is carried out, sometimes called execution of the decision. This might be considered the core of the decision process because any decision that is not successfully implemented is a failed decision, no matter how good the chosen alternative might be. Managers have to mobilize the people and resources to put the decision into action. Execution may be the hardest step of decision making. The monitoring activity (step 1) begins again as soon as the solution is implemented. For many managers, the decision cycle is a continuous process, with new decisions made daily based on monitoring the environment for problems and opportunities.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-03 - 12-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Individual Decision Making KEYWORDS: Bloom’s: Remember 58. Identify and explain four biases that affect individual decision making.

ANSWER: The following is a list of four biases that affect individual decision making: ∙ Being influenced by initial impressions. When considering decisions, the mind often gives disproportionate weight to the first information it receives. These initial impressions, statistics, or estimates act as an anchor to our subsequent thoughts and judgments. Anchors can be as simple as a random comment by a colleague or a statistic read in a newspaper. Past Cengage Learning Testing, Powered by Cognero

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events and trends also act as anchors. For example, in business, managers frequently look at the previous year’s sales when estimating sales for the coming year. Giving too much weight to the past can lead to poor forecasts and misguided decisions. ∙ Seeing what you want to see. People frequently look for information that supports their existing instinct or point of view and avoid information that contradicts it. This bias affects where managers look for information, as well as how they interpret the information they find.

People tend to give too much weight to supporting information and too little to information that conflicts with their established viewpoints. ∙ Being influenced by emotions. A recent study of traders in London investment banks found that effective regulation of emotions was a characteristic of higher-performing traders.

Lower-performing traders were less effective in managing and modulating their emotional responses. Another finding is that doctors make less effective decisions when they feel emotions of like or dislike for a patient. If they like a patient, they are less likely to prescribe a painful procedure. If they feel dislike, they may blame the patient for the condition and provide less treatment. Managers make better decision when—to the extent possible—they take emotions out of the decision-making process. ∙ Being overconfident. Most people overestimate their ability to predict uncertain outcomes.

For example, a manager at a fast-food chain was sure that low employee turnover was a key driver of customer satisfaction and store profitability, so he decided to invest in programs to keep employees happy. However, when managers analyzed store data, they found that some locations with high turnover were highly profitable, while some with low turnover were struggling. Overconfidence can be particularly dangerous when making risky decisions.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-03 - 12-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Individual Decision Making KEYWORDS: Bloom’s: Understand 59. Explain the role of intuition in decision making.

ANSWER: In intuitive decision making, experience and judgment rather than sequential logic or explicit reasoning are used to make decisions. Most researchers have found that effective managers use a combination of rational analysis and intuition in making complex decisions under time pressure. Intuition is not arbitrary or irrational because it is based on years of practice and hands-on experience, often stored in the subconscious. When managers use their intuition based on long experience with organizational issues, they more rapidly perceive and understand problems, and they develop a gut feeling or hunch about which alternative will solve a problem, speeding the decision-making process. The value of intuition for effective decision making is supported by a growing body of research from psychology, organizational science, and other disciplines. When someone has a depth of experience and knowledge in a particular area, the right decision often comes quickly and effortlessly because the individual recognizes patterns based on information that has been largely forgotten by the conscious mind. Managers use previous experience and judgment to incorporate intangible elements at both the problem identification and problem solution stages. Executives frequently make decisions without explicit reference to the impact on profits or to other measurable outcomes.

Many intangible factors—such as a person’s concern about the support of other executives, fear of failure, and social attitudes—influence selection of the best alternative. These factors cannot be quantified in a systematic way, so intuition guides the choice of a solution.

Managers may make a decision based on what they sense to be right rather than on what they can document with hard data. Intuition can also balance and supplement rational analysis to help managers make better decisions.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-03 - 12-03 NATIONAL STANDARDS: United States - AACSB: Analytic Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

Individual Decision Making Bloom’s: Understand

60. In the context of incremental decision model, describe the identification phase of decision making.

ANSWER: The identification phase of decision making begins with recognition. Recognition means one or more managers become aware of a problem and the need to make a decision. Recognition is usually stimulated by a problem or an opportunity. A problem exists when elements in the external environment change or when internal performance is perceived to be below standard. In the case of firing a radio announcer, comments about the announcer came from listeners, other announcers, and advertisers. Managers interpreted these cues until a pattern emerged that indicated a problem had to be dealt with.

The second step is diagnosis, in which more information is gathered if needed to define the problem situation. Diagnosis may be systematic or informal, depending upon the severity of the problem. Severe problems do not allow time for extensive diagnosis; the response must be immediate. Mild problems are usually diagnosed in a more systematic manner.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-05 - 12-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decision Making KEYWORDS: Bloom’s: Remember 61. In the context of incremental decision model, describe the development phase of decision making.

ANSWER: In the development phase of decision making, a solution is shaped to solve the problem defined in the identification phase. The development of a solution takes one of two directions. First, search procedures may be used to seek out alternatives within the organization’s repertoire of solutions. In the case of firing a star announcer, for example, managers asked what the radio station had done the last time an announcer had to be let go.

To conduct the search, organization participants may look into their own memories, talk to other managers, or examine the formal procedures of the organization. The second direction of development is to design a custom solution. This happens when the problem is novel so that previous experience has no value. Mintzberg found that in these cases, key decision makers have only a vague idea of the ideal solution. Gradually, through a trial-and-error process, a custom-designed alternative will emerge. Development of the solution is a groping, incremental procedure, building a solution brick by brick.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-05 - 12-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decision Making KEYWORDS: Bloom’s: Remember 62. In the context of incremental decision model, describe the selection phase of decision making.

ANSWER: The selection phase of decision making is when the solution is chosen. This phase is not always a matter of making a clear choice among alternatives. In the case of custom-made solutions, selection is more an evaluation of the single alternative that seems feasible.

Evaluation and choice may be accomplished in three ways. The judgment form of selection is used when a final choice falls upon a single decision maker, and the choice involves judgment based upon experience. In analysis, alternatives are evaluated on a more systematic basis, such as with management science techniques. Mintzberg found that most decisions did not involve systematic analysis and evaluation of alternatives. Bargaining occurs when selection involves a group of decision makers. Each decision maker may have a different stake in the outcome, so conflict emerges. Discussion and bargaining occur until a coalition is Cengage Learning Testing, Powered by Cognero

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formed, as in the Carnegie model described earlier. When a decision is formally accepted by the organization, authorization takes place. The decision may be passed up the hierarchy to the responsible hierarchical level. Authorization is often routine because the expertise and knowledge rest with the lower-level decision makers who identified the problem and developed the solution. A few decisions may be rejected because of implications not anticipated by lower-level managers.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-05 - 12-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decision Making KEYWORDS: Bloom’s: Remember 63. Discuss the consequences of the garbage can decision process for organizational decision making.

ANSWER: There are four specific consequences of the garbage can decision process for organizational decision making: ∙ Solutions may be proposed even when problems do not exist. An employee might be sold on an idea and might try to sell it to the rest of the organization. ∙ Choices are made without solving problems. A choice—for example, creating a new department or revising work procedures—may be made with the intention of solving a problem; but, under conditions of high uncertainty, the choice may be incorrect. Moreover, many choices just seem to happen. People decide to quit, the organization’s budget is cut, or a new policy bulletin is issued. These choices may be oriented toward problems but do not necessarily solve them. ∙ Problems may persist without being solved. Organization participants get used to certain problems and give up trying to solve them; or participants may not know how to solve certain problems because the technology is unclear. ∙ A few problems are solved. The decision process does work in the aggregate. In computer simulations of the garbage can model, important problems were often resolved. Solutions do connect with appropriate problems and participants so that a good choice is made.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-06 - 12-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Organizational Decisions and Change KEYWORDS: Bloom’s: Understand 64. What is technical knowledge? Using an example, explain why technical knowledge is necessary to make good decisions.

ANSWER: Technical knowledge refers to understanding and agreement about how to solve problems and reach organizational goals. This variable can range from complete agreement and certainty to complete disagreement and uncertainty about cause–effect relationships leading to problem solution. One example of low technical knowledge occurred at Dr. Pepper/SevenUp Inc. Managers agreed on the problem to be solved—they wanted to increase market share from 6 to 7 percent. However, the means for achieving this increase in market share were not known or agreed on. A few managers wanted to use discount pricing in supermarkets. Other managers believed they should increase the number of soda fountain outlets in restaurants and fast-food chains. A few other managers insisted that the best approach was to increase advertising. Managers did not know what would cause an increase in market share.

Eventually, the advertising judgment prevailed, but it did not work very well. The failure of the decision reflected managers’ low technical knowledge about how to solve the problem.

When means are well understood, the appropriate alternatives can be identified and calculated with some degree of certainty. When means are poorly understood, potential solutions are ill-defined and uncertain. Intuition, judgment, and trial and error become the Cengage Learning Testing, Powered by Cognero

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basis for decisions.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-07 - 12-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Contingency Decision-Making Framework KEYWORDS: Bloom’s: Understand 65. Define evidence-based management. How do decision makers use it to make better decisions?

ANSWER: Evidence-based management means a commitment to make more informed and intelligent decisions based on the best available facts and evidence. It means being aware of one’s biases, seeking and examining evidence with rigor. Managers practice evidence-based decision making by being careful and thoughtful rather than carelessly relying on assumptions, past experience, rules of thumb, or intuition. Evidence-based management can be particularly useful for overcoming fear of loss and the problem of escalating commitment.

To practice evidence-based management, managers use data and facts to the extent possible to inform their decisions. Many manager problems are uncertain, and hard facts and data are not available, but by always seeking evidence, managers can avoid relying on faulty assumptions. Decision makers can also do a postmortem of decisions to evaluate what worked, what did not, and how to do things better. The best decision makers have a healthy appreciation for what they do not know. They are always questioning and encouraging others to question their knowledge and assumptions. They foster a culture of inquiry, observation, and experimentation.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.12-08 - 12-08 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Special Decision Circumstances KEYWORDS: Bloom’s: Understand

Cengage Learning Testing, Powered by Cognero

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1. _____ is defined as the behavior that occurs among organizational groups when participants identify with one group and perceive that other groups may block their group’s goal achievement or expectations. a. Goal incompatibility b. Intergroup conflict c. Intragroup conflict d. Strategic contingency ANSWER: b Feedback: Intergroup conflict can be defined as the behavior that occurs among RATIONALE: organizational groups when participants identify with one group and perceive that other groups may block their group’s goal achievement or expectations. Conflict means that groups clash directly, that they are in fundamental opposition.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-01 - 13-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Remember 2. _____ is rivalry among groups in the pursuit of a common prize, whereas conflict presumes direct interference with goal achievement. a. Competition b. Assimilation c. Intergroup conflict d. Strategic contingency ANSWER: a Feedback: Conflict is similar to competition but more severe. Competition is rivalry among RATIONALE: groups in the pursuit of a common prize, whereas conflict presumes direct interference with goal achievement.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-01 - 13-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Remember 3. Which of the following is true of conflicts? a. Conflicts are less severe than competition. b. In conflicts, groups clash indirectly. c. In conflicts, groups are in fundamental opposition. d. Conflicts occur vertically, but not horizontally.

ANSWER: c Feedback: Conflicts mean that groups clash directly, that they are in fundamental opposition.

RATIONALE: Conflicts are similar to competition but more severe.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-01 - 13-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Understand 4. The sources of intergroup conflict are: Cengage Learning Testing, Powered by Cognero

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a. goal incompatibility, differentiation, task interdependence, and limited resources. b. group creation, observable group differences, group disorientation, and commitment. c. frustration, power, work rotation, and authority. d. financial independence, organic structures, delegation, and insubordination.

ANSWER: a Feedback: Some specific organizational characteristics can generate conflict. These sources RATIONALE: of intergroup conflict are goal incompatibility, differentiation, task interdependence, and limited resources.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-01 - 13-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Remember 5. _____ is defined as the dissimilarities in cognitive and emotional orientations among managers in diverse functional departments. a. Goal incompatibility b. Differentiation c. Task interdependence d. Dependency ANSWER: b Feedback: Differentiation is defined as the differences in cognitive and emotional orientations RATIONALE: among managers in different functional departments.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-01 - 13-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Remember 6. In which of the following types of task interdependence methods is there little interaction between departments? a. Pooled interdependence b. Sequential interdependence c. Reciprocal interdependence d. Round-robin interdependence ANSWER: a Feedback: In pooled interdependence, there is little interaction between departments.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-01 - 13-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Remember 7. In _____, the output of one department goes to the next department. a. pooled interdependence b. sequential interdependence c. reciprocal interdependence d. priority-based interdependence Cengage Learning Testing, Powered by Cognero

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ANSWER: RATIONALE:

b Feedback: Sequential interdependence means the output of one department goes to the next department.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-01 - 13-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Remember 8. In _____, departments mutually exchange materials and information. a. pooled interdependence b. sequential interdependence c. reciprocal interdependence d. priority-based interdependence ANSWER: c Feedback: In reciprocal interdependence, departments mutually exchange materials and RATIONALE: information.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-01 - 13-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Remember 9. Which of the following types of task interdependence has a minimal potential for conflict? a. Pooled interdependence b. Sequential interdependence c. Reciprocal interdependence d. Round-robin interdependence ANSWER: a Feedback: In the case of pooled interdependence, units have little need to interact. Conflict is RATIONALE: at a minimum.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-01 - 13-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Remember 10. Which of the following is true of the relationship between interdependence and conflicts between departments? a. As interdependence increases, the potential for conflict increases. b. In case of pooled interdependence, the potential for conflict is high. c. Greater interdependence diminishes the potential for conflict. d. In case of reciprocal interdependence, the potential for conflict is minimal.

ANSWER: a Feedback: Generally, as interdependence increases, the potential for conflict increases.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-01 - 13-01 Cengage Learning Testing, Powered by Cognero

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NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Understand 11. As task interdependence moves from pooled to reciprocal, _____. a. conflict decreases and competition increases b. the potential for cooperation increases c. the potential for conflict increases d. goal incompatibility diminishes ANSWER: c Feedback: In the case of pooled interdependence, units have little need to interact. Conflict is RATIONALE: at a minimum. Sequential and reciprocal interdependence require employees to spend time coordinating and sharing information. Thus in sequential and reciprocal interdependence, the potential for conflict increases.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-01 - 13-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Understand 12. When goals are in alignment, there is little differentiation, departments are characterized by pooled interdependence, and resources seem abundant, managers can use a _____. a. rational model of organization b. sequential method of task interdependence c. reciprocal method of task interdependence d. priority-based model of organization ANSWER: a Feedback: When goals are in alignment, there is little differentiation, departments are RATIONALE: characterized by pooled interdependence, and resources seem abundant, managers can use a rational model of organization. In the rational organization, behavior is not random or accidental.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Understand 13. Which of the following is true of the rational model of organization? a. In the rational organization, behavior is random and accidental. b. In the rational organization, goals are clear and choices are made in a logical way. c. It works well for every circumstance. d. It is an ideal that is fully achievable in the real world.

ANSWER: b Feedback: In the rational organization, behavior is not random or accidental. Goals are clear RATIONALE: and choices are made in a logical way.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

Interdepartmental Conflict in Organizations Bloom’s: Understand

14. Which of the following is true of teams and task forces in the context of conflicts? a. They reduce conflict and enhance cooperation because they integrate people from different departments. b. They pursue only one group’s outcomes and force the other group into submission. c. They do not function effectively when there is sequential interdependence between departments. d. They work well during confrontation, but not with negotiation among departments.

ANSWER: a Feedback: Teams and task forces reduce conflict and enhance cooperation because they RATIONALE: integrate people from different departments.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Understand 15. _____ are designed to increase worker participation and provide a cooperative model for solving union-management problems. a. Labor-management teams b. Sequential interdependence models c. Rational organizational models d. Transaction processing systems ANSWER: a Feedback: Labor-management teams are designed to increase worker participation and RATIONALE: provide a cooperative model for solving union-management problems. Integration devices can also be used to enhance cooperation between labor and management.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Remember 16. _____ occurs when parties in conflict directly engage one another and try to work out their differences. a. Confrontation b. Negotiation c. Assimilation d. Competition ANSWER: a Feedback: Confrontation occurs when parties in conflict directly engage one another and try RATIONALE: to work out their differences.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Remember Cengage Learning Testing, Powered by Cognero

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17. _____ is the bargaining process that often occurs during confrontation and that enables the parties to systematically reach a solution. a. Confrontation b. Negotiation c. Assimilation d. Competition ANSWER: b Feedback: Negotiation is the bargaining process that often occurs during confrontation and RATIONALE: that enables the parties to systematically reach a solution.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Remember 18. _____ is a strong intervention to reduce conflict because it involves bringing the disputing parties together and allowing each side to present its version of the situation. a. Workplace mediation b. Confrontation c. Pooled interdependence d. Rational model ANSWER: a Feedback: When conflict is intense and enduring, and department members are suspicious RATIONALE: and uncooperative, top managers may intervene as third parties to help resolve the conflict or bring in third party consultants from outside the organization. This process, sometimes called workplace mediation, is a strong intervention to reduce conflict because it involves bringing the disputing parties together and allowing each side to present its version of the situation.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Remember 19. Which of the following is an advantage of practicing member rotation? a. Individuals become submerged in the values, attitudes, problems, and goals of the other department. b. Conflicts between departments are reduced in a fast pace. c. Task interdependence between departments is greatly reduced. d. Although, the perceptions and attitudes that promote conflict cannot be changed, confrontation and negotiation are completely diminished.

ANSWER: a Feedback: Rotation means that individuals from one department can be asked to work in RATIONALE: another department on a temporary or permanent basis. The advantage is that individuals become submerged in the values, attitudes, problems, and goals of the other department.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Understand Cengage Learning Testing, Powered by Cognero

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20. _____ is the ability of one person or department in an organization to influence other people to bring about desired outcomes. a. Cooperation b. Collaboration c. Power d. Personal position ANSWER: c Feedback: Power is the ability of one person or department in an organization to influence RATIONALE: other people to bring about desired outcomes. It is the potential to influence others within the organization with the goal of attaining desired outcomes for power holders.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-03 - 13-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Power and Organizations KEYWORDS: Bloom’s: Remember 21. _____ is the authority granted by the organization to the formal management position a manager holds. a. Legitimate power b. Reward power c. Coercive power d. Referent power ANSWER: a Feedback: Legitimate power is the authority granted by the organization to the formal RATIONALE: management position a manager holds.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-03 - 13-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Power and Organizations KEYWORDS: Bloom’s: Remember 22. Jenson is the project lead in a software company. In addition to his everyday job roles, he is also responsible for grading his employees based on their performance and giving them incentives and promotions. In this scenario, Jenson holds: a. legitimate power. b. reward power. c. coercive power. d. referent power.

ANSWER: b Feedback: In this scenario, Jenson holds reward power. Reward power stems from the ability RATIONALE: to bestow rewards—a promotion, raise, or pat on the back—to other people.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-03 - 13-03 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Power and Organizations KEYWORDS: Bloom’s: Apply 23. Which of the following types of power does a manager enjoy because of his right to promote subordinates?

Cengage Learning Testing, Powered by Cognero

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a. Legitimate power b. Reward power c. Coercive power d. Referent power ANSWER: RATIONALE:

b Feedback: Reward power stems from the ability to bestow rewards—a promotion, raise, or pat on the back—to other people. A manager’s right to promote his subordinates is an example of reward power.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-03 - 13-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Power and Organizations KEYWORDS: Bloom’s: Understand 24. The authority to punish or recommend punishment is called _____. a. Legitimate power b. Reward power c. Coercive power d. Referent power ANSWER: c Feedback: The authority to punish or recommend punishment is called coercive power.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-03 - 13-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Power and Organizations KEYWORDS: Bloom’s: Remember 25. John is a manager at Trespach Inc. His subordinates respect him, and several of them have made comments such as, “I want to be as good a manager as he is one day.” He is highly respected and admired. John holds: a. legitimate power. b. expert power. c. coercive power. d. referent power.

ANSWER: d Feedback: John holds referent power. Referent power is derived from personal RATIONALE: characteristics: people admire the manager and want to be like or identify with the manager out of respect and admiration.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-03 - 13-03 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Power and Organizations KEYWORDS: Bloom’s: Apply 26. _____ is a force for achieving desired outcomes, but only as prescribed by the formal hierarchy and reporting relationships. a. Authority b. Assimilation Cengage Learning Testing, Powered by Cognero

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c. Interdependence d. Confrontation ANSWER: RATIONALE:

a Feedback: The concept of formal authority is related to power but is narrower in scope.

Authority is also a force for achieving desired outcomes, but only as prescribed by the formal hierarchy and reporting relationships.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-03 - 13-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Power and Organizations KEYWORDS: Bloom’s: Remember 27. People have authority in an organization because of: a. the positions they hold. b. the skill and knowledge they possess. c. their personal characteristics. d. the resources they control.

ANSWER: a Feedback: People have authority because of the positions they hold, not because of personal RATIONALE: characteristics or resources.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-03 - 13-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Power and Organizations KEYWORDS: Bloom’s: Understand 28. _____ is power sharing, the delegation of power or authority to subordinates in an organization. a. Empowerment b. Confrontation c. Assimilation d. Competition ANSWER: a Feedback: Empowerment is power sharing, the delegation of power or authority to RATIONALE: subordinates in an organization.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-04 - 13-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Power and Organizations KEYWORDS: Bloom’s: Remember 29. _____ are events and activities both inside and outside an organization that are essential for attaining organizational goals. a. Organizational politics b. Strategic contingencies c. Collective dependencies d. Network centralities ANSWER: b Cengage Learning Testing, Powered by Cognero

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RATIONALE:

Feedback: Strategic contingencies are events and activities both inside and outside an organization that are essential for attaining organizational goals. Departments involved with strategic contingencies for the organization tend to have greater power.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-05 - 13-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Power and Organizations KEYWORDS: Bloom’s: Remember 30. Which of the following is not a tactic for increasing power? a. Entering areas of high uncertainty b. Creating dependencies c. Using rational organizational models rather than political models d. Satisfying strategic contingencies ANSWER: c Feedback: The four tactics for increasing power are: 1. Entering areas of high uncertainty 2.

RATIONALE: Creating dependencies 3. Providing scarce resources 4. Satisfying strategic contingencies

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-07 - 13-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Using Soft Power and Politics KEYWORDS: Bloom’s: Understand 31. Intergroup conflict requires three ingredients: group creation, observable group similarities, and commitment. a. True b. False ANSWER: False Feedback: Conflict among departments and groups in organizations, called intergroup RATIONALE: conflict, requires three ingredients: group identification, observable group differences, and frustration.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-01 - 13-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Remember 32. Goal incompatibility is not a cause of intergroup conflict in organizations. a. True b. False ANSWER: False Feedback: Typical areas of goal conflict are quality, cost control, and new products or RATIONALE: services. Goal incompatibility is probably the greatest cause of intergroup conflict in organizations.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-01 - 13-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Understand Cengage Learning Testing, Powered by Cognero

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33. Pooled interdependence involves a lot of interaction. a. True b. False ANSWER: False Feedback: Pooled interdependence means there is little interaction.

RATIONALE: POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-01 - 13-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Remember 34. As interdependence increases, the potential for conflict decreases. a. True b. False ANSWER: False Feedback: Task interdependence refers to the dependence of one unit on another for RATIONALE: materials, resources, or information. Generally, as interdependence increases, the potential for conflict increases.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-01 - 13-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Understand 35. Pooled interdependence requires employees to spend time coordinating and sharing information, while sequential interdependence does not. a. True b. False ANSWER: False Feedback: Sequential and reciprocal interdependence require employees to spend time RATIONALE: coordinating and sharing information.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-01 - 13-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Understand 36. A major source of conflict involves competition between groups for what members perceive as limited resources. a. True b. False ANSWER: True Feedback: A major source of conflict involves competition between groups for what members RATIONALE: perceive as limited resources. Organizations have limited money, physical facilities, staff resources, and human resources to share among departments.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-01 - 13-01 NATIONAL STANDARDS: United States - AACSB: Analytic Cengage Learning Testing, Powered by Cognero

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TOPICS: KEYWORDS:

Interdepartmental Conflict in Organizations Bloom’s: Understand

37. The rational model is characterized by centralized power and control. a. True b. False ANSWER: True Feedback: The rational model is characterized by centralized power and control, extensive RATIONALE: information systems, and an efficiency orientation.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Understand 38. Although managers strive to use a rational approach, the political model prevails because each department has different interests it wants met and different goals it wants to achieve. a. True b. False ANSWER: True Feedback: Although managers strive to use a rational approach, the political model prevails RATIONALE: because each department has different interests it wants met and different goals it wants to achieve. Purely rational procedures do not work for many circumstances.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Understand 39. At an organizational level, purely rational procedures work well in every circumstance. a. True b. False ANSWER: False Feedback: Purely rational procedures do not work for many circumstances. Although RATIONALE: managers strive to use a rational approach, the political model prevails because each department has different interests it wants met and different goals it wants to achieve.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Understand 40. Managers strive to adopt political procedures but will find that rational model is needed to accomplish objectives. a. True b. False ANSWER: False Feedback: Managers may strive to adopt rational procedures but will find that politics is RATIONALE: needed to accomplish objectives. When managers fail to effectively apply the political model, Cengage Learning Testing, Powered by Cognero

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conflict can escalate and prevent the organization from achieving important outcomes.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Understand 41. Teams and task forces reduce conflict and enhance cooperation because they integrate people from different departments. a. True b. False ANSWER: True Feedback: Teams and task forces reduce conflict and enhance cooperation because they RATIONALE: integrate people from different departments. Integration devices can also be used to enhance cooperation between labor and management.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Understand 42. Negotiation occurs when parties in conflict directly engage one another and try to work out their differences. a. True b. False ANSWER: False Feedback: Confrontation occurs when parties in conflict directly engage one another and try RATIONALE: to work out their differences. Negotiation is the bargaining process that often occurs during confrontation and that enables the parties to systematically reach a solution.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Remember 43. Confrontation involves a lot of risk, while there is no risk involved in negotiation. a. True b. False ANSWER: False Feedback: Confrontation and negotiation involve some risk. There is no guarantee that RATIONALE: discussions will focus on a conflict or that emotions will not get out of hand.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Understand 44. In collective bargaining, managers do not have to go through a union to reach an agreement with workers. a. True Cengage Learning Testing, Powered by Cognero

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b. False ANSWER: RATIONALE:

False Feedback: Collective bargaining is a type of negotiation used to resolve a disagreement between workers and management. The bargaining process is usually accomplished through a union and results in an agreement that specifies each party’s responsibilities for the next two to three years.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Understand 45. Workplace mediation decreases conflicts because each side is allowed to present its version of the situation. a. True b. False ANSWER: True Feedback: Workplace mediation is a strong intervention to reduce conflict. It involves bringing RATIONALE: the disputing parties together and allowing each side to present its version of the situation.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Understand 46. An advantage of practicing member rotation is that individuals become submerged in the values, attitudes, problems, and goals of the other department. a. True b. False ANSWER: True Feedback: Rotation means that individuals from one department can be asked to work in RATIONALE: another department on a temporary or permanent basis. The advantage is that individuals become submerged in the values, attitudes, problems, and goals of the other department.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Understand 47. Power is a tangible force in organizations. a. True b. False ANSWER: False Feedback: Power is an intangible force in organizations. It cannot be seen, but its effect can RATIONALE: be felt.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-03 - 13-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Power and Organizations Cengage Learning Testing, Powered by Cognero

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KEYWORDS:

Bloom’s: Understand

48. The source of power often derives from an exchange relationship in which one person, department, or organization provides scarce or valued resources to other people, departments, or organizations. a. True b. False ANSWER: True Feedback: Power exists only in a relationship between two or more people, and it can be RATIONALE: exercised in either vertical or horizontal directions. The source of power often derives from an exchange relationship in which one person, department, or organization provides scarce or valued resources to other people, departments, or organizations.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-03 - 13-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Power and Organizations KEYWORDS: Bloom’s: Understand 49. Legitimate power stems from the ability to bestow rewards—a promotion, raise, or pat on the back—to other people. a. True b. False ANSWER: False Feedback: Legitimate power is the authority granted by the organization to the formal RATIONALE: management position a manager holds. Reward power stems from the ability to bestow rewards—a promotion, raise, or pat on the back—to other people.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-03 - 13-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Power and Organizations KEYWORDS: Bloom’s: Remember 50. Coercive power derives from a person’s greater skill or knowledge about the tasks being performed. a. True b. False ANSWER: False Feedback: The authority to punish or recommend punishment is called coercive power.

RATIONALE: Expert power derives from a person’s greater skill or knowledge about the tasks being performed.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-03 - 13-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Power and Organizations KEYWORDS: Bloom’s: Remember 51. Referent power is derived from personal characteristics. a. True b. False ANSWER: True Feedback: Referent power is derived from personal characteristics. People admire the RATIONALE: Cengage Learning Testing, Powered by Cognero

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manager and want to be like or identify with the manager out of respect and admiration.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-03 - 13-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Power and Organizations KEYWORDS: Bloom’s: Remember 52. In forward-thinking organizations, top managers want lower-level employees to have greater power so they can do their jobs more effectively. a. True b. False ANSWER: True Feedback: In forward-thinking organizations, top managers want lower-level employees to RATIONALE: have greater power so they can do their jobs more effectively. These managers intentionally push power down the hierarchy and share it with employees to enable them to achieve goals.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-04 - 13-04 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Power and Organizations KEYWORDS: Bloom’s: Understand 53. Horizontal power is defined by the formal hierarchy or the organization chart. a. True b. False ANSWER: False Feedback: Horizontal power is not defined by the formal hierarchy or the organization chart.

RATIONALE: Each department makes a unique contribution to organizational success.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-05 - 13-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Power and Organizations KEYWORDS: Bloom’s: Understand 54. Three domains of political activity in most organizations are social affiliation, hierarchical referrals, and rules and procedures. a. True b. False ANSWER: False Feedback: Three domains of political activity (areas in which politics plays a role) in most RATIONALE: organizations are structural change, management succession, and resource allocation.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-06 - 13-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Political Processes in Organizations KEYWORDS: Bloom’s: Remember 55. Resources are always important to organizational survival. a. True Cengage Learning Testing, Powered by Cognero

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b. False ANSWER: RATIONALE:

True Feedback: Resources are always important to organizational survival. Departments that accumulate resources and provide them to an organization in the form of money, information, or facilities will be powerful.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-07 - 13-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Using Soft Power and Politics KEYWORDS: Bloom’s: Understand 56. Briefly discuss the three ingredients that are required for an intergroup conflict.

ANSWER: Conflict among departments and groups in organizations, called intergroup conflict, requires three ingredients: group identification, observable group differences, and frustration. First, employees have to perceive themselves as part of an identifiable group or department.

Second, there has to be an observable group difference of some form. Groups may be located on different floors of the building, members may have different social or educational backgrounds, or members may work in different departments. The ability to identify oneself as a part of one group and to observe differences in comparison with other groups is necessary for conflict.

The third ingredient is frustration. Frustration means that if one group achieves its goal, the other will not; it will be blocked. Frustration need not be severe and only needs to be anticipated to set off intergroup conflict. Intergroup conflict will appear when one group tries to advance its position in relation to other groups.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-01 - 13-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Remember 57. Briefly explain goal incompatibility with an example.

ANSWER: The goals of each department reflect the specific objectives members are trying to achieve.

The achievement of one department’s goals often interferes with another department’s goals, leading to conflict. University police, for example, have a goal of providing a safe and secure campus. They can achieve their goal by locking all buildings on evenings and weekends and not distributing keys. Without easy access to buildings, however, progress toward the science department’s research goals will proceed slowly. On the other hand, if scientists come and go at all hours and security is ignored, police goals for security will not be met. Goal incompatibility throws the departments into conflict with each other.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-01 - 13-01 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Remember 58. Briefly explain the rational model of behavior.

ANSWER: When goals are in alignment, there is little differentiation, departments are characterized by pooled interdependence, and resources seem abundant, managers can use a rational model of organization. As with the rational approach to decision making, the rational model of organization is an ideal that is not fully achievable in the real world, though managers strive Cengage Learning Testing, Powered by Cognero

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to use rational processes whenever possible. In the rational organization, behavior is not random or accidental. Goals are clear and choices are made in a logical way. When a decision is needed, the goal is defined, alternatives are identified, and the choice with the highest probability of success is selected. The rational model is also characterized by centralized power and control, extensive information systems, and an efficiency orientation.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Remember 59. What is the political model of behavior? Why does it prevail?

ANSWER: The opposite view of organizational processes is the political model. When differences are great, organization groups have separate interests, goals, and values. Disagreement and conflict are normal, so power and influence are needed to reach decisions. Groups will engage in the push and pull of debate to decide goals and reach decisions. Information is ambiguous and incomplete. The political model describes the way organizations operate much of the time. Although managers strive to use a rational approach, the political model prevails because each department has different interests it wants met and different goals it wants to achieve. Purely rational procedures do not work for many circumstances.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Remember 60. Discuss confrontation and negotiation.

ANSWER: Confrontation occurs when parties in conflict directly engage one another and try to work out their differences. Negotiation is the bargaining process that often occurs during confrontation and that enables the parties to systematically reach a solution. These techniques bring appointed representatives from the departments together to work out a serious dispute.

Confrontation and negotiation involve some risk. There is no guarantee that discussions will focus on a conflict or that emotions will not get out of hand. However, if members are able to resolve the conflict on the basis of face-to face discussions, they will find new respect for each other, and future collaboration becomes easier. The beginnings of relatively permanent attitude change are possible through direct negotiation.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-02 - 13-02 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Interdepartmental Conflict in Organizations KEYWORDS: Bloom’s: Remember 61. Define authority. What are the three properties that identify authority?

ANSWER: Authority is a force for achieving desired outcomes, but only as prescribed by the formal hierarchy and reporting relationships. Three properties identify authority: 1. Authority is vested in organizational positions. People have authority because of the positions they hold, not because of personal characteristics or resources.

2. Authority is accepted by subordinates. Subordinates comply because they believe position holders have a legitimate right to exercise authority. In most North American organizations, employees accept that supervisors can legitimately tell them what time to arrive at work, the Cengage Learning Testing, Powered by Cognero

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tasks to perform while they are there, and what time they can go home.

3. Authority flows down the vertical hierarchy. Authority exists along the formal chain of command, and positions at the top of the hierarchy are vested with more formal authority than are positions at the bottom.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-03 - 13-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Power and Organizations KEYWORDS: Bloom’s: Remember 62. What is network centrality? Explain it with an example.

ANSWER: Network centrality means being centrally located in the organization and having access to information and people that are critical to the company’s success. Managers as well as lowerlevel employees are more effective and more influential when they put themselves at the center of a communication network, building connections with people throughout the company.

Think about the importance of networks of relationships in the political arena. Abraham Lincoln is considered by historians to be one of the greatest U.S. presidents partly because he built relationships and listened carefully to a broad range of people both inside and outside of his immediate circle when the nation was so bitterly divided over the Civil War. He included people who did not agree with him and were critical of his goals and plans.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-03 - 13-03 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Power and Organizations KEYWORDS: Bloom’s: Remember 63. Briefly explain centrality in the context of strategic contingencies that influence horizontal power among departments.

ANSWER: Centrality reflects a department’s role in the primary activity of an organization. One measure of centrality is the extent to which the work of the department affects the final output of the organization. For example, the production department is more central and usually has more power than staff groups (assuming no other critical contingencies).

Centrality is associated with power because it reflects the contribution made to the organization. The corporate finance department of an investment bank generally has more power than the stock research department. When the finance department has the limited task of recording money and expenditures, it tends to be low in power because it is not responsible for obtaining critical resources or for producing the products of the organization.

Today, however, finance departments have greater power in many organizations because of the greater need for controlling costs.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-05 - 13-05 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Power and Organizations KEYWORDS: Bloom’s: Remember 64. Define politics and organizational politics.

ANSWER: Politics is the use of power to influence decisions in order to achieve those outcomes. The exercise of power to influence others has led to two ways to define politics: as self-serving behavior or as a natural organizational decision process. The first definition emphasizes that politics is self-serving and involves activities that are not sanctioned by the organization.

Cengage Learning Testing, Powered by Cognero

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The formal definition of organizational politics is as follows: organizational politics involves activities to acquire, develop, and use power and other resources to influence others and obtain the preferred outcome when there is uncertainty or disagreement about choices.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-06 - 13-06 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Political Processes in Organizations KEYWORDS: Bloom’s: Remember 65. Explain the four tactics for increasing power.

ANSWER: Four tactics for increasing power are as follows: 1. Enter areas of high uncertainty. One source of individual or departmental power is to identify key uncertainties and take steps to remove those uncertainties. Uncertainties could arise from stoppages on an assembly line, from the quality demanded of a new product, or from the inability to predict a demand for new services. Once an uncertainty is identified, the department can take action to cope with it. By their very nature, uncertain tasks will not be solved immediately. Trial and error will be needed, which is to the advantage of the department. The trial-and-error process provides experience and expertise that cannot easily be duplicated by other departments.

2. Create dependencies. Dependencies are another source of power. When the organization depends on a department or individual for information, materials, knowledge, or skills, that department or individual will hold power over others. An equally effective and related strategy is to reduce dependency on other departments by acquiring necessary information or skills when possible, so that one’s department is not in a dependent position.

3. Provide scarce resources. Resources are always important to organizational survival.

Departments that accumulate resources and provide them to an organization in the form of money, information, or facilities will be powerful.

4. Satisfy strategic contingencies. The theory of strategic contingencies says that some elements in the external environment and within the organization are especially important for organizational success. A contingency could be a critical event, a task for which there are no substitutes, or a central task that is interdependent with many others in the organization. An analysis of the organization and its changing environment will reveal strategic contingencies.

To the extent that contingencies are new or are not being satisfied, there is room for a department to move into those critical areas and increase its importance and power.

POINTS: 1 LEARNING OBJECTIVES: ORGT.DAFT.16.13-07 - 13-07 NATIONAL STANDARDS: United States - AACSB: Analytic TOPICS: Using Soft Power and Politics KEYWORDS: Bloom’s: Remember

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