the development and marketing of a product to one unit. Tax considerations are a
concern as well, and they want a structure that would help the accountants track them
better through specific cost centers. They decide not to use this design because of the
duplication of effort and the probability that it would be difficult to attract and retain
talented employees. In their second design they want to stress the opportunity for
employees to specialize, gain economies of scale, and conserve resources by
eliminating duplication of effort. They reject that design because it is too cumbersome
and slow to respond to the changes in the marketplace. Then one member of the group,
Jack, suggests that they eliminate chains of command and spans of control and go to
empowered teams. He argues that this will increase creativity and responsibility among
employees. A fellow student argues that it won’t work in the real world because
managers won’t give up that much authority. “Ok,” a third student, Jane, offers, “let’s try
this idea but build around a hub. The hub will be the core business and the spokes will
be groups of specialists that can be added to or subtracted from as the market changes.”
They settle on a structure with two lines of authority, one by task specialization and the
other by product line. This gives them economies of scale and flexibility but some
stress over reporting authority. Nevertheless, it gives them the best of what they want.
Refer to Table 15.2. Their first design is an example of a:
A) functional organization.
B) matrix organization.
C) product organization.
D) modular organization.
The tendency for people to base their judgments on information that is readily available
to them, although it might not be accurate, is called:
A) a bias toward implicit favorites.
B) an escalation of commitment.
C) a representativeness heuristic.
D) the availability heuristic.