ESSENTIALS OF CONTEMPORARY MANAGEMENT 6TH EDITION JONES
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Chapter 07
Designing Organizational Structure
True / False Questions
1. The process by which managers set the structure of working relationships among workers in an organization is called organizing.
True False
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2. Organizational design reflects the organization's mission statement irrespective of the situation.
True False
3. According to contingency theory, there can be only one best way to design an organization's structure.
True False
4. The nature of an organization's human resources is an important determinant of the organization's structure.
True False
5. In a quickly changing external environment, decentralizing authority and empowering lowerlevel employees tend to make organizations less flexible and slow in making decisions.
True False
6. A differentiation strategy aimed at increasing the customer's perception of an organization services usually succeeds even with an inflexible structure.
True False
7. Managers lose control over their different businesses by moving to a more flexible structure.
True False
8. The more nonroutine the technology an organization uses, the easier it is for managers to control and regulate the technology.
True False
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9. Routine technologies are characterized by low task variety and high task analyzability.
True False
10. The more skilled its workforce, the less likely an organization is to use a flexible, decentralized structure.
True False
11. The first step in organizational design is job design.
True False
12. Division of labor among employees is the result of the differentiation process.
True False
13. Increasing the number of different tasks in a job by changing the division of labor is known as job enrichment.
True False
14. Increasing the degree of responsibility that a worker has over his/her job is known as job simplification.
True False
15. The job characteristics model explains how managers can make jobs more interesting and motivating.
True False
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16. The extent to which the design of a job requires the worker to perform all of the tasks that are required to complete the job successfully is known as the task significance.
True False
17. The degree to which a manager feels that his/her job is meaningful because of the way that it affects other people is known as the autonomy of the job.
True False
18. The degree to which a job design gives a worker the freedom to schedule his/her tasks and to decide how to carry them out is known as the task identity.
True False
19. A functional structure is an organizational structure composed of all of the departments that an organization needs to produce its products.
True False
20. It is easier for managers to monitor and evaluate subordinates' performance in a functional structure than a divisional structure.
True False
21. As an organization grows and begins to produce a wider range of products, a functional structure becomes more efficient and effective.
True False
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22. A division is a collection of departments that work together within the organization to produce the product.
True False
23. Using a market structure, managers place each distinct product line or business in its own self-contained division.
True False
24. When managers organize divisions according to the types of customer to whom they market their products, they are focusing on a product structure.
True False
25. To satisfy the needs of diverse customers, a company might adopt a customer structure, which groups divisions according to the particular kinds of customers they serve.
True False
26. When managers group workers both by function and by product within the same structure, they are said to be following the matrix structure.
True False
27. Team members in a market structure are known as two-boss employees.
True False
28. A group of managers from different departments working together on an organizational task is known as a cross-functional team.
True False
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29. The "chain of command" of an organization is the hierarchy of authority for that organization.
True False
30. The number of subordinates who report directly to a manager is known as the hierarchy of authority for that manager.
True False
31. A line manager is someone in the chain of command who has formal authority over people and resources.
True False
32. A flat organization has fewer levels of authority relative to the size of that organization.
True False
33. The idea that top management should design an organization with as few levels of authority as is needed to conduct the business of the organization in an efficient and effective manner is known as the minimum chain of command.
True False
34. Decentralization makes an organization flexible as the organization grows and becomes taller.
True False
35. Too much decentralization has disadvantages for an organization.
True False
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36. The lesser the complexity of an organization's structure, the greater is the need for coordination among people, functions, and divisions to make the organizational structure work efficiently and effectively.
True False
37. Liaison roles increase the coordination among the business units of an organization.
True False
38. Task forces are often called ad hoc committees because they are temporary.
True False
39. The more complex an organization, the less important the use of cross-functional teams become to the organization.
True False
40. A strategic alliance is a formal agreement that commits two or more companies to exchange or share their resources in order to produce and market a product.
True False
41. A network structure is a series of global strategic alliances that one or several organizations create with suppliers, manufacturers, and/or distributors to produce and market a product.
True False
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42. The ability of managers to use outside suppliers and manufacturers to produce goods and services, has led many researchers and consultants to popularize the idea of a boundaryless organization.
True False
43. Business-to-business (B2B) network is a company-specific virtual information system that allows workers to share their knowledge and expertise and find others to help solve ongoing problems.
True False
Multiple Choice Questions
44. The process by which managers establish the structure of working relationships among workers of the organization is known as:
A. planning.
B. leading.
C. organizing.
D. controlling.
E. directing.
7-8
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45. Managers should choose a structure that fits the circumstances affecting their organization the most, according to the __________________ theory.
A. contingency
B. design
C. agency
D. equity
E. expectancy
46. According to Charles Perrow, the routineness of technology is determined by task:
A. stability
B. analyzability
C. creativity
D. certainty
E. utility
47. The number of new or unexpected problems or situations that a person or function encounters in performing tasks or jobs is task:
A. uncertainty
B. stability
C. analyzability
D. creativity
E. variety
7-9
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48. The degree to which programmed solutions are available to people or functions to solve the problems they encounter is task:
A. uncertainty
B. stability
C. analyzability
D. creativity
E. variety
49. Managers should design flexible structures, characterized by decentralized authority and empowered employees, for their organization when it's:
A. environment is stable.
B. technology is simple.
C. workforce is highly skilled.
D. strategy is well understood.
E. strategy is simple.
50. The greater the level of uncertainty in the organization's environment, the:
A. less likely managers are to design a structure and a culture that is innovative.
B. less likely managers are to design a structure and a culture that changes quickly.
C. more likely managers are to design an organizational structure that is formal and controlling.
D. more likely managers are to design a structure and a culture that are flexible.
E. more likely managers are to design an organizational culture that defines how employees should act in particular situations.
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51. The process by which managers decide how to divide into specific jobs the tasks that have to be performed to provide customers with goods and services is known as job:
A. design.
B. enlargement.
C. simplification.
D. rotation.
E. enrichment.
52. A Place for Pizza established a basic division of labor among "chefs" and "food servers" in which chefs perform all tasks involved in actual cooking and food servers carry out all tasks involved in giving food to the customers. A Place for Pizza implemented:
A. a functional structure.
B. job design.
C. a divisional structure.
D. a product structure.
E. a matrix structure.
53. The Pizza Man combined the jobs of "chef" and "food server" into a single job description. The Pizza Man implemented:
A. a functional structure.
B. a divisional structure.
C. a product structure.
D. job design.
E. a matrix structure.
7-11
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54. A manager increases the number of tasks that a subordinate has to do in order to make the job more interesting for the subordinate. This is known as:
A. job simplification.
B. job enlargement.
C. job enrichment.
D. task identity.
E. task significance.
55. A manager redesigns the job of a subordinate so that the subordinate has more responsibility over her job. This is the process of:
A. job enlargement.
B. job simplification.
C. job enrichment.
D. job reduction.
E. task identity.
56. The extent to which a job requires the worker to use a wide range of knowledge and abilities is known as:
A. task identity.
B. task significance.
C. autonomy.
D. skill variety.
E. feedback.
7-12
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57. The extent to which a job requires a worker to perform all of the tasks that are required to complete the job is known as:
A. skill variety.
B. task identity.
C. task significance.
D. feedback.
E. autonomy.
58. The degree to which a manager feels that his/her job is "meaningful" because of the way in which the job affects other people is known as:
A. skill variety.
B. feedback.
C. autonomy.
D. task significance.
E. task identity.
59. Mr. Pierson reads an article in the newspaper about one of his students who has been appointed to CEO of a multinational corporation. At this moment, Mr. Pierson is experiencing:
A. autonomy.
B. task identity.
C. task significance.
D. skill variety.
E. task enrichment.
7-13
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60. The degree to which a job allows the worker to schedule the tasks of the job and to decide how to carry out these tasks is known as:
A. autonomy.
B. task identity.
C. task significance.
D. skill variety.
E. feedback.
61. Compared to a salesperson of a prescription drug store, a doctor who works with people suffering from malignant diseases has _______________.
A. a low degree of feedback
B. less autonomy
C. less skill variety
D. less task identity
E. higher task significance
62. Compared to an order taker at a restaurant, a sales executive who is given the authority to choose the prospective customers he will visit on personal sales calls has ________________.
A. less autonomy
B. less task significance
C. less task identity
D. more autonomy
E. less skill variety
7-14
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63. The extent to which a job gives the worker direct and clear information about how well the worker is performing the job is known as:
A. task identity
B. feedback
C. autonomy
D. task significance
E. skill variety
64. An organizational structure consisting of all the departments within the company is a(n) ________________ structure.
A. autonomous
B. provisional
C. divisional
D. transitional
E. functional
65. The units of Zach Ltd., are grouped together such that the functions that work together to produce a product are grouped together. This is an example of a(n) ________________ structure.
A. market
B. transitional
C. organic
D. functional
E. divisional
7-15
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66. At Xen Ltd., each product line is managed within a division. In each of these divisions, the division manager is responsible for creating the business-level strategy for the product line. Xen Ltd., is utilizing a _________________ structure.
A. geographic
B. market
C. product
D. functional
E. transitional
67. Xpress Delivery Corporation organizes its managers according to the different regions of the world in which the managers work. This is an example of a ________________ structure.
A. market
B. customer
C. product
D. matrix
E. geographic
68. When managers pursue a multidomestic strategy, they most likely use a _________________ strategy.
A. market
B. customer
C. global geographic
D. global transitional
E. global product
7-16
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69. When customers around the world are willing to buy the same kind of product, or slight variations thereof, managers are more likely to pursue a __________________ structure.
A. market
B. customer
C. global geographic
D. global transitional
E. global product
70. In the design of an organization, another name for "market structure" is __________________ structure.
A. product
B. geographic
C. customer
D. functional
E. matrix
71. Managers are able to be responsive to the needs of their customers and maintain flexibility in making decisions regarding customers' changing needs with a ________________ structure.
A. market
B. geographic
C. functional
D. matrix
E. transitional
7-17
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72. When designing an organization, if managers are grouped both by function and by product at the same time, the organizational structure being used is the __________________ structure.
A. market
B. geographic
C. functional
D. matrix
E. divisional
73. The organizational design in which employees are correctly referred to as two-boss employees is a _________________ structure.
A. product
B. matrix
C. geographic
D. functional
E. divisional
74. At Cosmeto & Co., Pat is assigned to a team to develop a new kind of shampoo. He reports to both the marketing manager and the personal care product manager. The organization is pursuing a ________________ organizational structure.
A. matrix
B. global product
C. customer
D. geographic
E. market
7-18
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75. When different managers from different functional areas are brought together to work on an organizational task, they are known as a(n) __________________ team.
A. functional
B. co-dependent
C. cross-functional
D. independent
E. virtual
76. Another name for the organization's hierarchy of authority is the:
A. chain of command.
B. span of control.
C. corporate ladder.
D. unity of command.
E. organizational constitution.
77. The relative authority that each manager in the organization has from the CEO down to the lowest-level manager is called the ________________.
A. span of control
B. unity of command
C. corporate ladder
D. unity of direction
E. chain of command
7-19
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78. The number of subordinates who report directly to a manager is known as the manager's:
A. unity of command.
B. hierarchy of authority.
C. chain of command.
D. span of control.
E. pecking order.
79. Rusty is a project manager who has 15 executives reporting directly to him. The number 15 is Rusty's:
A. unity of command.
B. span of control.
C. chain of command.
D. unity of direction.
E. hierarchy of authority.
80. The manager of the human resources department of a company is a(n) __________________ manager.
A. line
B. product
C. staff
D. task force
E. operations
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81. The kitchen workers at Joe's Coffee Shop and Bakery report directly to Sue, the kitchen manager. Sue is a(n) __________________ manager.
A. line
B. product
C. staff
D. task force
E. operations
82. The idea that an organization's hierarchy should be designed with as few levels of authority as are necessary to use the organization's resources in an efficient and effective manner falls under which of the following principles?
A. Span of control
B. Centralization
C. Minimum chain of command
D. The unity of command
E. Decentralization
83. Organizations can keep their hierarchy flat by:
A. decreasing the span of control.
B. increasing the number of levels of management.
C. decentralizing authority.
D. centralizing authority.
E. decreasing autonomy.
7-21
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84. Allocating authority in an organization, which gives lower-level managers and nonmanagerial employees the right to make important decisions about how to use organizational resources, is an example of:
A. a tall organizational structure.
B. a high span of control.
C. centralization of authority.
D. maximum chain of command.
E. decentralization of authority.
85. An organization which allows its employees to behave in a flexible way even as the organization grows and becomes taller is utilizing:
A. managing as a rule.
B. decentralizing authority.
C. decreasing the span of control.
D. decreasing autonomy.
E. increasing the number of levels of management.
86. CoreSol Ltd., gives one manager in each of three departments (marketing, engineering, and production) the responsibility of coordinating with each other to brainstorm new product ideas. The department managers can increase coordination by establishing:
A. horizontal integration.
B. decentralization.
C. a liaison role.
D. vertical integration.
E. product departmental structure.
7-22
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87. Which of the following is often known as the ad hoc committee?
A. Functional team
B. Cross-functional team
C. Managers with liaison roles
D. Managers with integrating roles
E. Task force
88. A temporary committee of managers from different functions or divisions is formed to solve a specific, mutual problem. This committee is known as a:
A. standing committee.
B. confederate committee.
C. functional force.
D. task force.
E. cross-functional team.
89. Fern Motor Co. brings together senior managers from its marketing, R&D, manufacturing, accounting, and finance departments to work on a project as a team, to design a new type of sport utility vehicle. In this scenario, Fern Motor Co. creates a:
A. cross-functional team.
B. vertically integrated team.
C. mass-production team.
D. standing committee.
E. confederate committee.
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90. Jason has been hired by Praltiz Inc., an IT firm, to increase coordination among functions or divisions to achieve performance gains from synergies. What role is Jason hired to perform?
A. Liaison role
B. Centralization role
C. Consulting role
D. Integrating role
E. Promotional role
91. A formal agreement that commits two or more companies to exchange or share their resources in order to produce and market a product is known as a(n) ______________.
A. outsourcing alliance
B. task force alliance
C. continuous-process alliance
D. market structure alliance
E. strategic alliance
92. Tot Beverages creates a series of agreements with its suppliers, manufacturers, and distributors to produce and market Zing Cola. This is an example of a ________________ organizational structure.
A. decentralized
B. vertically integrated
C. network
D. diversified product
E. horizontally integrated
7-24
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93. Alkyl Ltd., designs shoes using computer-aided design, and they electronically store all new product information, including manufacturing instructions. When the designers have finished their work, they electronically transmit all the blueprints for the new products to a network of Southeast Asian suppliers and manufacturers with which Alkyl Ltd., has formed strategic alliances. Instructions for the design of a new sole are sent to a supplier in India with instructions for the leather uppers to a supplier in Bhutan. The strategic alliance Alkyl Ltd., follows is an example of a _________________ structure.
A. network
B. decentralized
C. vertically integrated
D. diversified product
E. horizontally integrated
94. Alkyl Ltd., one of the leading shoe manufacturers, enters into a contract with Blinx-a foreign manufacturer to only manufacture its shoes. In this scenario, Alkyl Ltd., is following the __________________ strategy.
A. franchising
B. licensing
C. green field venturing
D. outsourcing
E. exporting
Essay Questions
7-25
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95. Briefly explain organizational structure, organizational design, and contingency theory.
96. Identify the four factors that are important determinants of an organizational structure.
97. Explain briefly the two factors that make technology routine or complicated, according to Charles Perrow.
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98. Describe job enlargement. What is its significance in an organization?
99. Discuss four ways in which a manager could redesign the job of a subordinate to enrich that subordinate's job.
100.According to the job characteristics model, list and define the characteristics that determine how motivating the job is.
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101.Discuss the advantages and disadvantages of a functional structure of organization.
102.Describe the matrix structure and the concept of the "two-boss employees."
103.State the differences between a line and staff manager.
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104.Discuss the advantages and disadvantages of "decentralization" in organizational design.
105.Write a brief note on liaison roles, task forces, and cross-functional teams.
106.Define strategic alliance and network structure. Also, discuss their usage.
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