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1. Organizing the structure of the company means deciding how many jobs need to be done
and who is responsible for doing them.
2. In a capitalist economy, organizations seldom reorganize due to changing markets.
3. One key to organizational success is to go back to basic principles and build the business
on a sound foundation.
4.
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Small business organizations lack the size required to reap the benefits of labor
specialization.
5. The purpose of a division of labor and specialization is to improve an employee’s job
performance.
6. Managing a growing business often requires managers to create departments to
accomplish various tasks.
7. The process of creating individual departments to do specialized tasks is called
departmentalization.
8.
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Division of labor refers to deciding how many jobs must be accomplished and then
dividing them up amongst the labor force.
9. The success of the firm often depends on assigning the right tasks to the right person.
10. The process of setting up individual departments to do specialized tasks is called job
specialization.
11. Correctly structuring a business organization allows managers to avoid delegating
responsibility and authority to employees.
12.
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An organization chart shows who is accountable for the completion of specific work and
who reports to whom.
13. Looking at a traditional organization chart, you will view who reports to whom; you will
have a sense of each person’s authority and responsibility, and the type of work that they
perform for the organization.
Feedback: An organization chart shows you who reports to whom, and who is accountable for
the completion of what jobs.
14. Division of labor is difficult to achieve in small businesses.
Feedback: Division of labor is a basic organizational principle in all organizations. All
businesses (both large and small) should contemplate the division of labor in their
organizations.
15.
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Departments are functional units within the business such as sales, accounting, finance,
and marketing.
Feedback: The basic principles of organization do not differ significantly from firm to firm.
As firms grow, they usually develop a system with division of labor and specialization, and
then proceed to departmentalize – create departments that produce specialized tasks for the
business.
16. In its effort to reorganize its floor space, Backstreet Books decided to eliminate seating
space in its stores in order to make room for bookshelves due to growing interest in books
about how to “go green”. This company’s effort is an example of how a firm may reduce
its emphasis in one product line in order to serve customer preferences and trends.
Feedback: If a firm wants to remain competitive, it may reevaluate which product lines are
more profitable than others and organize its floor space and marketing emphasis to capture
consumer attention. The text uses the example of Starbucks changing and re-changing their
menus.
17.
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To better organize his landscaping business, Frank divides each job into several parts.
One part is excavation and removal of old landscaping, the next part is design, followed
by purchasing, and the last part is installation of new plants. If he assigns a different
employee to each part, this action would be an example of departmentalization.
Feedback: Departmentalization is the creation of functional units of a business. The jobs
described in this question would all fall under the production department. Other departments
in Frank’s business may include marketing, sales, and accounting. By asking different
employees to perform different tasks relating to a particular job, Frank is creating division of
labor within his company, and/or specialization.
18. Alicia dreams of opening her own restaurant and knows that she will need to organize her
business. Organizing begins with determining the work to be done.
Feedback: Organizing, also known as adding structure to the business begins with
determining what work needs to be done and then dividing up tasks among the employees.
19.
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When Eric Schmidt joined Google™, one of the most successful companies of this
decade, he tackled the organization function head-on. In speaking at a large conference
with Google founders, Sergey Brinn and Larry Page, he commented that Google was
running pretty well, “it just needed a little structure.” Schmidt was referring to basic
organization principles such as division of labor, specialization, and getting the
departments up and running.
Feedback: Basic organization principles include division of labor, specialization of tasks, and
departmentalization.
20. As indicated in the Making Ethical Decisions box titled, “Safety versus Profit”,
organization decisions that affect profits in a negative way should be avoided at all cost.
Feedback: As indicated in the Making Ethical Decisions story, how your organization
performs the job is very important. Setting an organization culture is as important as setting
an organization structure. Adhering to safety precautions when doing the job demonstrates
management’s commitment to their employees.
21. The driving force behind the change in business organizations is the change in consumer
expectations.
22.
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Henri Fayol and Max Weber are best known for their contributions to accounting theory.
23. Fayol’s principle of the division of labor says that functions should be divided into areas
of specialization such as production, marketing, and finance.
24. One of Fayol’s principles suggests that managers should have the right to give orders and
expect others to follow.
25. Fayol’s principle of esprit de corps says that employees should be divided into small
groups that can be directed efficiently by a single manager.
26.
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Fayol’s principles suggest that the goals of the firm are less important than the goals of
individual workers.
27. According to Fayol’s principle of Authority, if you have authority you also have
responsibility.
28. Fayol believed that the amount of decision-making power vested in top management
should be the same in all situations.
29. Fayol believed that managers should treat employees and peers with respect and justice.
30.
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Clear communication between workers and keeping order in materials and people are
included in Fayol’s principles.
31. Max Weber’s principles of organization were similar to those of Henri Fayol.
32. Weber believed that large organizations required everyone to follow the established rules
and guidelines precisely.
33. Weber was critical of bureaucrats because he felt they undermined the efficiency of the
organization.
34.
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Weber had a great deal of faith in managers. He was confident that a firm would do well
if employees simply did as they were told.
35. Weber promoted the idea of the pyramid-shaped organization structure for large
businesses.
36. Max Weber’s organizational theories require an educated work force to operate
efficiently.
37. Weber was a strong proponent of bureaucracy.
38.
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Some business organizations still follow the 1940s organizational theory of Max Weber.
39. Weber believed that employees should be empowered to make their own decisions.
40. Job descriptions are an important part of Max Weber’s organizational theory.
41. Max Weber believed that promotion should be based solely on seniority.
42. The design of a bureaucratic organization assumes a well-educated workforce.
