Management, 3e (Hitt)
Chapter 6 Organizational Structure and Design
1) Organizational design is defined as the sum of the ways a firm divides its labor into distinct
tasks and then coordinates them.
2) Organizational structuring is the process of assessing the organization’s strategy and
environmental demands and then determining the appropriate organizational design.
3) Organizational charts illustrate an organization’s complete structure.
4) Companies in relatively stable and static environments can use rules effectively to achieve
integration.
5) In conditions of high task uncertainty and interdependence, values are a better integrating
mechanism than goals.
6) Formal organizations often widen a supervisor’s span of control.
7) The appropriateness of a tall or flat organization is affected more by the internal environment
than the external environment.
8) As a rule, formal organizations are highly centralized.
9) In a functional structure, the firm is organized around specific products (or services) or related
sets of products (or services).
10) A product structure reduces the duplication of the firm’s functional resources.
11) Multinational firms rarely employ a regional structure.
12) A matrix structure consists of two organization structures superimposed on each other.
13) In a low-networked structure, the quantity and magnitude of externally networked activities
are limited.
14) Environmental dynamism is the breadth and depth of differences and similarities in an
organization’s external environment.
15) A major principle in the relationship between organizational strategy and structure is that the
structure should complement and leverage the strategy.
16) Firms with high foreign sales and highly diverse product lines frequently use a matrix
structure.
17) If a domestic organization opens an international division, then the products sold by this
division typically have broad appeal and there are relatively few customer differences across
countries.
18) Intensifying globalization has contributed to increased outsourcing; flatter, more flexible
organizational structures; and increased integration.
19) A company is likely to use a “local approach” to doing business abroad if the benefits from
location-specific differentiation and adaptation are significant and economies of scale are small.
20) Liaison roles are designed to enhance the information flows between two or more groups
within an organization.
21) Organizational ________ illustrate relationships among an organization’s units and lines of
authority.
A) charts
B) channels
C) contexts
D) paradigms
22) ________ is the the process of assessing an organization’s strategy and environmental
demands and then determining the appropriate organizational structures.
A) Organizational design
B) Organizational chartering
C) Organizational structuring
D) Organization development
23) ________ is the sum of the ways an organization divides its labor into distinct tasks and then
coordinates them.
A) Organization development
B) Organizational design
C) Operations management
D) Organizational structure
24) When a firm decides to outsource its manufacturing operations, a ________ allows it to
maintain close contact with the firms to which it is outsourcing the work.
A) division structure
B) network structure
C) functional structure
D) geographic structure
25) The extent to which people in different units within an organization think about different
things or about similar things differently is termed as ________.
A) task differentiation
B) interdependence
C) unity of command
D) cognitive differentiation
26) ________ is the extent to which tasks are divided into subtasks and performed by specialists.
A) Decentralization
B) Differentiation
C) Formalization
D) Interdependence
27) Which of the following is the best example of cognitive differentiation?
A) At a civil engineering firm, some engineers specialize in construction engineering, while
others specialize in environmental engineering.
B) An auto manufacturer produces a luxury automobile in order to enhance the image of its other
vehicles.
C) At a shoe company, the product development department relies on marketing data to generate
ideas for promising new products.
D) Accountants think about the organization’s overall performance in terms of financial results,
whereas marketers view performance in terms of customer satisfaction.
28) ________ is the extent to which various parts of organizations cooperate and interact.
A) Integration
B) Differentiation
C) Formalization
D) Decentralization
29) ________ occurs when several groups, that are largely independent in their functions,
collectively contribute to a common output.
A) Pooled interdependence
B) Cognitive interdependence
C) Sequential interdependence
D) Reciprocal interdependence
30) ________ exists when two or more groups depend on one another for inputs.
A) Formalized interdependence
B) Pooled interdependence
C) Reciprocal interdependence
D) Sequential interdependence
31) ________ is the degree to which one unit, or one person, must use the work or resources of
another unit or person to accomplish tasks.
A) Differentiation
B) Formalization
C) Decentralization
D) Interdependence
32) ABC Corp. produces widgets. Timely delivery to XYZ Corp. is critical since the widgets are
essential to the production of XYZ Corp.’s gadgets. This is an example of ________.
A) pooled interdependence
B) reciprocal interdependence
C) sequential interdependence
D) cross-functional interdependence
33) One of the driving forces behind the integration of tasks is ________.
A) outsourcing
B) interdependence
C) localization
D) unity of command
34) A construction company orders windows from one division of a manufacturing company and
roofing from another division of the same company. To meet this customer’s overall needs, the
manufacturing company should exercise ________ interdependence.
A) intermittent
B) pooled
C) reciprocal
D) sequential
35) Generally, the more ________ that exists within the organization, the more useful ________
are as an integration mechanism.
A) task independence; rules
B) task interdependence; rules
C) task independence; values
D) task independence; goals
36) As task uncertainty and interdependence increase, ________ are a more effective
coordination mechanism than ________.
A) goals; rules
B) rules; goals
C) rules; values
D) goals; values
37) What sort of interdependence exists when two or more groups within a company depend
upon one another for inputs?
A) pooled
B) intermittent
C) reciprocal
D) sequential
38) A ________ is a person who is either formally or informally designated to coordinate the
activities across units or even sometimes across organizations. The role of this person is to build
effective relationships between the groups involved.
A) line manager
B) boundary spanner
C) gatekeeper
D) functional manager
39) The degree to which an organization’s new product-development team relies on the market
research team for product ideas to investigate is termed as ________.
A) liaisoning
B) centralization
C) interdependence
D) formalization
40) ________ occurs when the outputs of one group become the inputs of another group.
A) Pooled interdependence
B) Reciprocal interdependence
C) Cross-functional interdependence
D) Sequential interdependence
41) A manager in the promotion department of a record company would find it most difficult to
use ________ for coordination and integration to implement concert cancellations due to
weather, travel problems for the band, or any number of other unpredictable factors.
A) rules
B) liaisons
C) goals
D) values
42) In the assembly line of an automobile manufacturer, the car engine is installed first. After
this, the product is passed on to the next stage where it is fitted with the hood. The product then
goes on to the third step in the process where the wheels are fitted. The above situation, where
the finished product of one step becomes the raw material for the next, is an example of
________ interdependence.
A) pooled
B) sequential
C) reciprocal
D) task
43) Why are “values” an important coordinating mechanism in conditions of high task
uncertainty and interdependence?
A) They represent measurable outcomes and specify how to obtain them.
B) Those holding the same values will maintain standard operating procedures.
C) They establish guidelines for behavior and consequences in specific conditions.
D) Those holding the same values will all work toward the same outcomes while maintaining
flexibility in how they are accomplished.
44) What is meant by the term unity of command?
A) the idea that the line of authority should be clear and direct
B) the idea that interdependence within a firm should be kept to a minimum
C) the idea that managers should have a limited span of control
D) the idea that every employee should have one and only one boss
45) Which of the following is NOT a characteristic of formalization?
A) narrow spans of control
B) clear lines of authority
C) dual chain of command
D) unity of command
46) The ________ specifies the number of employees reporting to a given supervisor.
A) organizational chart
B) unity of command
C) line of authority
D) span of control
47) ________ consists of the official and defined structures and systems related to decision
making, communication, and control in the organization.
A) Functionalization
B) Differentiation
C) Formalization
D) Integration
48) A ________ span of control throughout an organization will lead to a ________ organization
structure with multiple reporting layers.
A) narrow; flat
B) narrow; tall
C) wide; tall
D) wide; diverse
49) ________ organizations tend to be slower at making decisions and responding to changes in
the business environment. As a result, these organizations tend to be best suited to stable external
environments.
A) Simple and dynamic
B) Static and decentralized
C) Flat and wide
D) Tall and formal
50) Ken Langley is a production supervisor in an automobile manufacturing firm. After
evaluating Ken’s managerial capabilities, some members of the senior management feel that
average productivity would improve if more workers are assigned to him. However, some
managers are skeptical about Ken’s ability to handle more workers. Which of the following
statements, if true, would support the argument favoring increased span of control?
A) Ken’s team consists of highly experienced and skilled labor.
B) The firm is looking to double its production capacity over the next two years.
C) Ken is receiving increasing complaints about interpersonal conflicts within the team.
D) Ken’s team is highly dependent on his guidance, even on minor issues.
51) Ken Langley is a production supervisor in an automobile manufacturing firm. After
evaluating Ken’s managerial capabilities, some members of the senior management feel that
average productivity would improve if more workers are assigned to him. However, some
managers are skeptical about Ken’s ability to handle more workers. Which of the following
statements, if true, would weaken the argument favoring increased span of control?
A) Ken has a reputation of handling interpersonal conflicts effectively.
B) Performance reports from the last few years show that teams that were closely monitored had
higher productivity.
C) Ken’s team consists of highly experienced and skilled labor.
D) Market trends indicate that the demand for automobiles is expected to increase substantially
over the next few years.
52) A ________ is one that has multiple layers with significant vertical differentiation.
A) flat organization structure
B) decentralized organization structure
C) tall organization structure
D) simple organization structure
53) Because many organizational environments have become more dynamic, managers often
respond by trying to “flatten” their organizational structures, often removing whole levels of
hierarchy and people in the process. This process is often referred to as ________.
A) downsizing
B) cost cutting
C) leveling
D) layering
54) A narrow span of control is advisable when ________.
A) employees perform similar jobs
B) job are complicated and require managerial input
C) employees are empowered
D) employees are highly skilled and knowledgeable
55) The ________ consists of the unofficial but influential means of communication, decision
making, and control that are part of the habitual way things get done in an organization.
A) grapevine
B) informal organization
C) information tunnel
D) interpersonal channel
56) In which of the following organizations is decision-making authority pushed down to its
lowest possible level?
A) centralized organizations
B) decentralized organizations
C) integrated organizations
D) informal organizations
57) Japanese multinational firms tend to operate as ________, announcing decisions from home
offices to subsidiaries. European multinational operations tend to operate as ________, pushing
decision-making authority to the lowest possible level.
A) centralized organizations; decentralized organizations
B) decentralized organizations; centralized organizations
C) functional organizations; geographic organizations
D) geographic organizations; functional organizations