Business Essentials, 12e (Ebert/Griffin)
Chapter 6 Organizing the Business
1) Which term refers to the specification of jobs to be done within an organization and the ways
in which those jobs relate to one another?
A) Delegation
B) A mission statement
C) Cross training
D) Role responsibility
E) Organizational structure
2) Which of the following clarifies structure and shows employees where they fit into a firm’s
operations?
A) Delegation
B) Departmentalization
C) Organization charts
D) Mission statement
E) Job descriptions
3) What do the solid lines on an organization chart show in reporting relationships within a
company?
A) Mission statement
B) Chain of command
C) Job specialization
D) Grapevine activity
E) Market share
4) Which factor plays a key role in determining an organization’s structure?
A) Competition and technology
B) Location and life-cycle stage
C) Profitability and leverage
D) Research and development
E) Mission and strategy
5) What is the advantage of an organization that is unstructured and informal?
A) Decisions can be made by consensus.
B) There is less effect on the organization in a rapidly changing market.
C) Managers do not become overwhelmed with decision making.
D) It can become a more complex structure quickly and efficiently.
E) The structure is more adaptable to the environment.
6) Reporting relationships within a company are indicated on an organization chart and represent
A) organizational structure.
B) mission and strategy responsibility.
C) areas of specialization.
D) chain of command.
E) decision-making responsibility.
7) Organization charts are graphical representations of employee salary information.
8) The chain of command is depicted by solid lines on an organization chart.
9) Organizational structure is a function of the organization’s mission and strategy.
10) The reporting relationships within an organization follow a chain from the highest level to the
lowest level in the organization, and is known as chain of command.
11) Describe how organizations create and communicate their organizational structure.
12) What do managers do when the “job” of a firm is broken down into smaller jobs, allowing
others to perform them?
A) Fragment the task
B) Specialize the job
C) Respond to the job
D) Assign the task
E) Control the job
13) Which of the following is an advantage of job specialization?
A) Workers can develop expertise in their jobs.
B) Workers will not need to be trained.
C) Jobs become more interesting.
D) Workers derive more satisfaction from their jobs.
E) Jobs do not need to be redefined.
14) When a large organization has departments based on areas of production, what type of
departmentalization is being utilized?
A) Customer departmentalization
B) Process departmentalization
C) Geographic departmentalization
D) Functional departmentalization
E) Product departmentalization
15) What is the advantage of using product departmentalization?
A) Managers can focus on specific product lines.
B) Products are organized based on the production process.
C) Products are better targets to specific customer groups.
D) Customer groups are easily identifiable.
E) Products are closer to where consumers are served.
16) If a manufacturer divides the organization according to the way goods are created, what type
of departmentalization is being utilized?
A) Functional departmentalization
B) Process departmentalization
C) Customer departmentalization
D) Geographic departmentalization
E) Brand departmentalization
17) Which of the following is a natural part of organizational growth?
A) Retrenchment
B) Entrepreneurship
C) Job specialization
D) Outsourcing
E) Team consolidation
18) Determining how people performing certain tasks can best be grouped together is called
what?
A) Departmentalization
B) Specialization
C) Controlling
D) Leadership
E) Directing
19) What is dividing a store into a men’s department, a women’s department, and a luggage
department an example of?
A) Product departmentalization
B) Customer departmentalization
C) Process departmentalization
D) Geographic departmentalization
E) International departmentalization
20) A snack food firm is divided by the areas they serve, including one division for the United
States, one for Europe, and another for Asia. How is this firm departmentalized?
A) By customer
B) By process
C) By geography
D) By function
E) By productivity
21) What is the process of designing specific jobs that need to be done and identifying the people
who will perform them called?
A) Departmentalization
B) Job specialization
C) Group tasks
D) Segmentation
E) Team cohesion
22) Which term identifies the grouping of jobs into logical units?
A) Specialization
B) Accountability
C) Authorization
D) Departmentalization
E) Process management
23) What kind of departmentalization happens when an organization is divided into operations
categorized by tasks performed by employees?
A) Functional departmentalization
B) Process departmentalization
C) Customer departmentalization
D) Geographic departmentalization
E) Regional departmentalization
24) What type of departmentalization would be most effective for a small or new organization?
A) Geographic
B) Functional
C) Customer
D) Product
E) Process
25) If specific jobs are grouped into logical units based on location, what type of
departmentalization is being utilized?
A) Functional
B) Product
C) Process
D) Customer
E) Geographic
26) A separate company unit responsible for its own cost and revenue is referred to as which of
the following?
A) Centralized organization
B) Decentralized organization
C) Department
D) Job specialty
E) Profit center
27) Job specialization is the process of eliminating unnecessary or undesirable jobs.
28) Departmentalization refers to the process of grouping jobs into logical units.
29) Geographic departmentalization divides firms according to the areas of the country or the
world that they serve.
30) The building blocks of all organizations are specialization and centralization.
31) As organizations grow and become larger, jobs tend to become less specialized.
32) Firms with production, marketing, human resource, and finance departments have a process
form of organization.
33) Firms typically use the same form of departmentalization at upper and lower levels.
34) Profit centers can occur based on function, product, process, customer, or geographical areas.
35) Briefly describe the five basic forms of departmentalization.
36) Explain geographic departmentalization and discuss how and why an organization might use
this structure.
37) What process is used to assign work to subordinates?
A) Authority
B) Decentralization
C) Delegation
D) Staffing
E) Matrix
38) Granting the authority or power to make decisions is done through the process of
A) line authority.
B) committee.
C) delegation.
D) functional structure.
E) department authority.
39) What is the main organizational characteristic of decentralized firms?
A) Flat
B) Tall
C) Diverse
D) Multi-layered
E) Matrix
40) Which feature characterizes the organization of centralized firms?
A) Flat
B) Tall
C) Very large
D) Responsive to change
E) Well capitalized
41) What is an employee’s duty to perform an assigned task?
A) Delegation
B) Authority
C) Responsibility
D) Accountability
E) Specialization
42) What is the power to make the decisions necessary to complete a task called?
A) Delegation
B) Specification
C) Authority
D) Responsibility
E) Accountability
43) What is authority that flows up and down the chain of command called?
A) Staff authority
B) Departmental authority
C) Delegated authority
D) Divisional authority
E) Line authority
44) What type of departments are linked to the production and sales of specific products?
A) Staff departments
B) Matrix departments
C) Line departments
D) Organizational departments
E) Entrepreneurial departments
45) What is authority given to a decision-making body with power beyond that possessed by any
one person?
A) Risk aversion
B) Committee and team
C) Line
D) Matrix
E) Product and labor
46) In which type of organization are most lower-level decisions approved by upper management
before they are implemented?
A) Line
B) Staff
C) Decentralized
D) Centralized
E) Learning
47) In what type of organization is decision-making authority delegated to levels of management
at various points below the top?
A) Centralized
B) Decentralized
C) Point-of-sale
D) Geographic
E) Autocratic
48) What kind of organization becomes more responsive to its environment by breaking the
company into more manageable units?
A) Centralized
B) Decentralized
C) Geographic
D) Process-oriented
E) Customer departmentalized
49) What type of structure represents one with relatively few layers of managers?
A) Tall organizational structure
B) Short organizational structure
C) Flat organizational structure
D) Elliptical organizational structure
E) Triangular organizational structure
50) Companies with centralized authority systems typically require multiple layers of
management. What type of organizational structures are these companies utilizing?
A) Tall
B) Short
C) Flat
D) Broad
E) Compressed
51) In tall organizations, which feature describes the span of control?
A) Short
B) Tall
C) Wide
D) Narrow
E) Vertical
52) What is the preferred span of control when jobs are more diversified or prone to change?
A) Wide
B) Narrow
C) Tall
D) Deep
E) Authoritative
53) Which of the following begins when a manager assigns responsibility to a subordinate?
A) Centralization
B) Delegation
C) Liability
D) Authority
E) Training