Chapter 7 1 Roger is analyzing the jobs to be done in his company

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 7—Organizing the Business Enterprise

Chapter 07: Organizing the Business Enterprise

1. Roger is analyzing the jobs to be done in his company, their specific overall purpose, and how the

jobs relate to each other. Roger is analyzing the company‘s

a. job descriptions.

b. organizational chart.

c. organizational structure.

d. departmentalization.

e. chain of command.

Difficulty: 1 Page-Reference: 216

Question ID: 07-1-01 Skill: Comprehension

Objective: 7.1

2. Organizational structure is

a. the relationship between the chain of command in a decentralized organization.

b. the specification of the way in which the organization manages the projects.

c. teams of individuals temporarily working on a special project together.

d. the specification of the jobs to be done within a business, and how much decentralization will be

permitted.

e. the specification of the jobs to be done within a business and the relationship of these jobs with each

other.

Difficulty: 1 Page-Reference: 216

Question ID: 07-1-02 Skill: Knowledge

Objective: 7.1

3. When Ford executives announced changes intended to eliminate corporate bureaucracy, speed

decision making, and improve communication and working relationships among people at different levels

of the organization, these changes were examples of the ________ function of management.

a. organizing

b. planning

c. directing

d. controlling

e. none of these

Difficulty: 2 Page-Reference: 216

Question ID: 07-1-03 Skill: Comprehension

Objective: 7.1

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 7—Organizing the Business Enterprise

4. Which of the following clarifies structure and shows employees where they fit into a firm’s

operations?

a. Organization chart

b. Responsibility

c. Departmentalization

d. Delegation

e. The mission statement

Difficulty: 1 Page-Reference: 216

Question ID: 07-1-04 Skill: Knowledge

Objective: 7.1

5. Which of the following does not have a significant influence on organizational structure?

a. An institution’s mission

b. An institution’s strategy

c. Changes in environmental circumstances

d. An institution’s profits

e. An institution’s purpose

Difficulty: 2 Page-Reference: 216

Question ID: 07-1-05 Skill: Comprehension

Objective: 7.1

6. What is the purpose of organization charts?

a. They portray the firm’s structure and the relationship of employees within the organization.

b. They are a valuable tool for companies experiencing a large increase in research and development

expenditures on new products.

c. They show the grouping of jobs into logical units.

d. They are used to plan marketing campaigns.

e. They determine which jobs need to be accomplished and who will perform them.

Difficulty: 2 Page-Reference: 216

Question ID: 07-1-06 Skill: Comprehension

Objective: 7.1

7. What is the meaning of the individual boxes shown on an organization chart?

a. Each box is appropriately labelled as a function or a process in the flow of materials/services.

b. Each box represents a job within the company.

c. Each box indicates a different geographical departmentalization.

d. Each box represents a group of people.

e. Each box represents a product or service provided by the organization.

Difficulty: 1 Page-Reference: 216-218

Question ID: 07-1-07 Skill: Comprehension

Objective: 7.1

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 7—Organizing the Business Enterprise

8. What is the meaning of the solid lines connecting the boxes on an organization chart?

a. They identify the relationship of the important staff departments.

b. They identify the level of specialization within the organization.

c. They identify the reporting relationship, or chain of command, within the organization.

d. They identify the relationship between the processes in the flow of materials/services.

e. They identify the products or services available from the organization.

Difficulty: 1 Page-Reference: 216

Question ID: 07-1-08 Skill: Comprehension

Objective: 7.1

9. The chain of command has the following characteristics except

a. solid lines in an organization chart show the chain of command.

b. when the chain of command is not clear, many different kinds of problems can arise.

c. it shows the flow of decision-making power in a firm.

d. the chain of command shows both the informal and formal organizational structure.

e. it shows the reporting relationships within a business.

Difficulty: 2 Page-Reference: 216-218

Question ID: 07-1-09 Skill: Comprehension

Objective: 7.1

10. Scott is looking at a chart showing the company’s organization structure. He notices that there is a

solid line connecting Judy and Charles to Kara. This means that

a. all reports created by Judy and Charles must be sent to Kara.

b. the product flows from Judy and Charles to Kara.

c. there is a direct telephone line between Judy and Charles and Kara.

d. Kara has more seniority than Judy or Charles.

e. Judy and Charles both report to Kara.

Difficulty: 2 Page-Reference: 216

Question ID: 07-1-10 Skill: Comprehension

Objective: 7.1

11. Businesses spend a great deal of time developing organization charts because

a. charts portray the firm’s structure and the relationship of employees within the organization.

b. a chart determines which jobs need to be accomplished and who will perform them.

c. charts are a valuable tool for companies that are involved in the research and development of new

products.

d. charts are useful when planning marketing campaigns.

e. all of these.

Difficulty: 1 Page-Reference: 216

Question ID: 07-1-11 Skill: Comprehension

Objective: 7.1

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 7—Organizing the Business Enterprise

12. Joanne is showing new employees the position she occupies in the organizational hierarchy.

Joanne is using

a. a chain of command chart.

b. a manual of positions and relationships.

c. an organization chart.

d. a job specialization chart.

e. a replacement chart.

Difficulty: 1 Page-Reference: 216-218

Question ID: 07-1-12 Skill: Comprehension

Objective: 7.1

13. Whether a business is large or small, the starting point in developing its organizational structure is

a. determining a strategic plan.

b. appointing a board of directors.

c. establishing a mission statement.

d. determining who will do what.

e. none of these are correct.

Difficulty: 1 Page-Reference: 216

Question ID: 07-1-13 Skill: Knowledge

Objective: 7.1

14. The chain of command illustrates ____________, while the organization chart illustrates

________.

a. job specialization; the company’s structure

b. reporting relationships; job specialization

c. centralization; decentralization

d. functional departmentalization; job specialization

e. reporting relationships; the company’s structure

Difficulty: 3 Page-Reference: 216-218

Question ID: 07-1-14 Skill: Knowledge

Objective: 7.1

15. The process of identifying the specific jobs that need to be done and designating the people who

will perform them leads to

a. segmentation.

b. departmentalization.

c. job specialization.

d. group tasks.

e. mission enhancement.

Difficulty: 1 Page-Reference: 218

Question ID: 07-1-15 Skill: Knowledge

Objective: 7.2

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 7—Organizing the Business Enterprise

16. In a Disney animated feature, the job of one cartoonist may be to draw the face of a single

character throughout the feature. This is an example of

a. mission enhancement.

b. segmentation.

c. departmentalization.

d. group tasks.

e. job specialization.

Difficulty: 2 Page-Reference: 218

Question ID: 07-1-16 Skill: Comprehension

Objective: 7.2

17. Grouping jobs into logical units is called

a. departmentalization.

b. process management.

c. specialization.

d. development of the grapevine.

e. authorization.

Difficulty: 1 Page-Reference: 219

Question ID: 07-1-17 Skill: Knowledge

Objective: 7.2

18. The two basic building blocks of all business organizations are

a. specialization and departmentalization.

b. profit centres and divisions.

c. functional and divisional departmentalization.

d. managers and workers.

e. centralization and decentralization.

Difficulty: 2 Page-Reference: 218

Question ID: 07-1-18 Skill: Knowledge

Objective: 7.2

19. Michael is in the process of taking the department’s overall “job” and breaking it down into smaller

and smaller “jobs.” Michael is working on

a. a matrix structure.

b. job specialization.

c. departmentalization.

d. job classification.

e. job analysis.

Difficulty: 1 Page-Reference: 218

Question ID: 07-1-19 Skill: Comprehension

Objective: 7.2

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 7—Organizing the Business Enterprise

20. Which of the following is correct with regard to job specialization?

a. It is a new idea.

b. Its application is limited to factory work.

c. It is a natural part of organizational growth.

d. It makes it more difficult to replace people who leave the organization.

e. All of these are correct.

Difficulty: 1 Page-Reference: 218

Question ID: 07-1-20 Skill: Comprehension

Objective: 7.2

21. Departmentalization refers to

a. the number of employees managed by a single supervisor.

b. the level at which decisions are made.

c. the duty to perform an assigned task.

d. the grouping of specialized jobs into logical units.

e. the establishment of a unit that is responsible for its own costs and profits.

Difficulty: 1 Page-Reference: 219

Question ID: 07-1-21 Skill: Knowledge

Objective: 7.2

22. At Merrick Manufacturing, the design department gets rewarded when projects earn high returns,

but schedules are not important to the department. By contrast, the production department gets rewarded

when projects are on time, but the money that those projects earn is not important. Given that situation,

which of the following situations would most likely lead to a conflict between design and production?

a. Should the company invest in a new project that requires a large initial investment but is expected

to lead to a big revenue stream in the long run?

b. Should the company launch a project later than planned in order to make changes that will make it

more attractive to customers?

c. Should the company focus on existing customer needs or should it anticipate unexpressed needs?

d. Would the product development process at Merrick be more effective if the company had a more

traditional organizational structure?

e. When a project does not meet expectations, is the failure caused by faulty product design or

inadequate market development?

Difficulty: 1 Page-Reference: 218-221

Question ID: 07-1-22 Skill: Analysis

Objective: 7.2

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 7—Organizing the Business Enterprise

23. At Merrick Manufacturing, the design department gets rewarded when projects earn high returns,

but development schedules don’t matter. By contrast, the production department gets rewarded when

projects are completed on time, but the money that those projects earn doesn’t matter. Top managers

believe that this division of labour keeps employees focused on the tasks that fit their skills and leads to a

better product. Which of the following would support top management’s belief?

a. Design department members have to spend a lot of time interacting with people from marketing

so they know how marketing will attempt to sell the completed project.

b. Even when unanticipated environmental changes make the project unattractive to customers, the

production department still tries to complete the project according to the original schedule and budget.

c. After a product specification is completed, knowing what kind of thinking went into the product

specification is not necessary to complete the project effectively.

d. The current team process is the same as the process that Merrick’s executives have used in

previous eras.

e. The rationale for the team process is presented to new employees as part of their formal orientation

to the company.

Difficulty: 1 Page-Reference: 218-221

Question ID: 07-1-23 Skill: Analysis

Objective: 7.2

24. At Merrick Manufacturing, the design department gets rewarded when projects earn high returns,

but development schedules don’t matter. By contrast, the production department gets rewarded when

projects are completed on time, but the money that those projects earn doesn’t matter. Top managers

believe that this division of labour keeps employees focused on the tasks that fit their skills and leads to a

better product. Which of the following would weaken the claim that this division of labour keeps

employees focused on the tasks that fit their skills and leads to a better product?

a. Some employees who work in the marketing department used to work in the design department.

b. Projects often fail to meet their revenue goals because design develops products for market

segments that marketing has difficulty reaching.

c. Projects are often late because of product distribution problems that occur after the project is

completed.

d. More projects fail because they go over budget than because they do not achieve their revenue

goals.

e. Unanticipated environmental occurrences cause some projects to be unprofitable.

Difficulty: 1 Page-Reference: 218-221

Question ID: 07-1-24 Skill: Analysis

Objective: 7.2

25. David has grouped some jobs together in such a way that they can be treated as if they are a

separate business that is responsible for its costs, revenues, and profits. David has created a

a. functional department.

b. profit centre.

c. departmentalized work group.

d. matrix structure.

e. divisionalized department.

Difficulty: 1 Page-Reference: 219

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 7—Organizing the Business Enterprise

Question ID: 07-1-25 Skill: Comprehension

Objective: 7.2

26. The men’s clothing department at Sears is an example of a

a. functional department.

b. process department.

c. product department.

d. profit centre.

e. matrix structure.

Difficulty: 1 Page-Reference: 219

Question ID: 07-1-26 Skill: Comprehension

Objective: 7.2

27. ComputerLand’s structure is set up so that each location is responsible for its own costs and

profits. Each location is

a. a specialized unit.

b. a process department.

c. a profit centre.

d. a product department.

e. a centralized department.

Difficulty: 1 Page-Reference: 219

Question ID: 07-1-27 Skill: Comprehension

Objective: 7.2

28. Businesses use profit centres because

a. sales revenue in various territories is easier to determine.

b. each individual reports to no more than two managers.

c. a greater degree of job specialization can be attained.

d. the organization may be divided according to the production process used.

e. each separate unit is responsible for its own costs.

Difficulty: 2 Page-Reference: 219

Question ID: 07-1-28 Skill: Comprehension

Objective: 7.2

29. Stores like Sears and The Bay are most likely to departmentalize by

a. function.

b. geography.

c. process.

d. customer.

e. product.

Difficulty: 1 Page-Reference: 219

Question ID: 07-1-29 Skill: Comprehension

Objective: 7.2

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 7—Organizing the Business Enterprise

30. Gleason Corp. is organized on the basis of geography. Top managers know that the company will

not be profitable this year, and it has had trouble developing new products. Which of the following would

strengthen the argument that the company should change its organizational structure?

a. The company values both corporate social responsibility and profitability.

b. Divisions have neglected new product offerings and have instead emphasized traditional revenue

sources.

c. Division managers have focused on short-term revenue instead of developing long–term (and

profitable) relationships.

d. The markets Gleason serves have different requirements in different geographic areas.

e. The revenue of the various divisions varies quite a bit.

Difficulty: 1 Page-Reference: 220-221

Question ID: 07-1-30 Skill: Analysis

Objective: 7.2

31. Which of the following would MOST strongly suggest that a company should change its

organizational structure from geographic departmentalization to product departmentalization?

a. The largest growth area for the company is governmental contracts, and they have quite different

buying procedures than those of other customers.

b. The company has a separate accounting department in each region where it operates.

c. Managers must be experts in at least one of the products the company sells if they hope to be

effective.

d. The company wants to build continuing relationships with customers and sell them as many of the

company’s products as possible.

e. The communication between the marketing departments in different regions has not been very

effective.

Difficulty: 1 Page-Reference: 220-221

Question ID: 07-1-31 Skill: Analysis

Objective: 7.2

32. Which of the following would MOST strongly suggest that a company should change its

organizational structure from geographical to functional?

a. The company has human resource departments in each of its regions.

b. Product development failures happen because the product developers were isolated from the

opinions of customers.

c. The company earns large revenue from the services it offers to public schools.

d. Managers are complaining that they have only a limited understanding of organizational goals.

e. The sales techniques that work in one region are often much less effective in other regions.

Difficulty: 1 Page-Reference: 219-221

Question ID: 07-1-32 Skill: Analysis

Objective: 7.2

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 7—Organizing the Business Enterprise

33. Susie’s Pets and Supplies, a retail shop that sells pets and many related products needed by

those pets, has recently reorganized. One area of the store is exclusively for dogs, another exclusively for

cats, another exclusively for tropical fish, and so on. The shop is departmentalized by

a. process.

b. function.

c. geography.

d. customer.

e. product.

Difficulty: 2 Page-Reference: 220

Question ID: 07-1-33 Skill: Comprehension

Objective: 7.2

34. Home Depot and other hardware stores are typically departmentalized by

a. product.

b. geography.

c. customer.

d. function.

e. process.

Difficulty: 2 Page-Reference: 220

Question ID: 07-1-34 Skill: Knowledge

Objective: 7.2

35. Why is it often difficult for managers to decide whether to use product or geographic

departmentalization?

a. Because consumer tastes are constantly changing

b. Because global competition is so intense

c. Because product and geographic departmentalization each have advantages and disadvantages

d. Because managers in foreign countries overstep their authority and have to be reined in

e. Because communicating with far-flung parts of an organization is now easier than it used to be

Difficulty: 3 Page-Reference: 220-221

Question ID: 07-1-35 Skill: Analysis

Objective: 7.2

36. Stores like HMV are divided into departments like classical music, R&B, pop, and so on. This

illustrates departmentalization by

a. process.

b. customer.

c. function.

d. geography.

e. product.

Difficulty: 2 Page-Reference: 219

Question ID: 07-1-36 Skill: Comprehension

Objective: 7.2

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 7—Organizing the Business Enterprise

37. Pickle maker Vlasic has separate departments to transform cucumbers into fresh-packed pickles,

pickles cured in brine, and relishes. They have chosen departmentalization by

a. customer.

b. function.

c. process.

d. geography.

e. product.

Difficulty: 2 Page-Reference: 219

Question ID: 07-1-37 Skill: Comprehension

Objective: 7.2

38. As part of your annual physical, you notice that while at the hospital you’ll be sent to X-ray, to the

Lab for blood workups, to another department for stress testing, and so on. You realize that since each

test requires different equipment and worker skills, the hospital is departmentalized by

a. geography.

b. function.

c. process.

d. product.

e. customer.

Difficulty: 2 Page-Reference: 221

Question ID: 07-1-38 Skill: Comprehension

Objective: 7.2

39. Electronic Universe is organized by departments such as televisions sets, VCR, radio, etc. What

type of departmentalization do they use?

a. Product

b. Process

c. Geographic

d. Functional

e. Electronic

Difficulty: 2 Page-Reference: 220

Question ID: 07-1-39 Skill: Comprehension

Objective: 7.2

40. What explanation best describes customer departmentalization?

a. The firm is divided according to the functions performed in a particular grouping of specialists.

b. The company is departmentalized according to the process used to produce goods/services for

customers.

c. The company is divided according to a specific customer target.

d. The company is divided along the lines of the specific goods/services produced for customers.

e. None of these.

Difficulty: 1 Page-Reference: 219

Question ID: 07-1-40 Skill: Comprehension

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 7—Organizing the Business Enterprise

Objective: 7.2

41. An international company that has organized itself by areas such as North America, Europe,

Pacific, and South America is departmentalized by

a. function.

b. product.

c. customer.

d. process.

e. geography.

Difficulty: 1 Page-Reference: 220

Question ID: 07-1-41 Skill: Comprehension

Objective: 7.2

42. Firms that have departments such as production, marketing, finance, human resources, etc. are

using ________ departmentalization.

a. geographic

b. product

c. customer

d. process

e. functional

Difficulty: 1 Page-Reference: 219

Question ID: 07-1-42 Skill: Comprehension

Objective: 7.2

43. In reviewing the organizational structure of your company, you notice that Engineering is

subdivided into mechanical, electrical, and software. Additionally, the Accounting Department is

subdivided into Accounts Payable, Accounts Receivable, and Asset Management. What type of

departmentalization has the company selected?

a. Process

b. Functional

c. Geographic

d. Product

e. Customer

Difficulty: 2 Page-Reference: 219

Question ID: 07-1-43 Skill: Comprehension

Objective: 7.2

44. Which form of departmentalization is most likely to be used by a public utility company?

a. Geographic

b. Functional

c. Product

d. Process

e. Customer

Difficulty: 1 Page-Reference: 220

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 7—Organizing the Business Enterprise

Question ID: 07-1-44 Skill: Comprehension

Objective: 7.2

45. The type of departmentalization where all the engineers are in an Engineering Department, all the

customer service reps are in a Customer Service Department, and all the accountants are in an

Accounting Department is called __________ departmentalization.

a. customer

b. process

c. product

d. functional

e. geographic

Difficulty: 1 Page-Reference: 219

Question ID: 07-1-45 Skill: Comprehension

Objective: 7.2

46. Determining how people performing certain tasks can best be grouped together is called

a. departmentalization.

b. controlling.

c. planning.

d. specialization.

e. directing.

Difficulty: 2 Page-Reference: 219

Question ID: 07-1-46 Skill: Knowledge

Objective: 7.2

47. Which of the following is an advantage of customer departmentalization?

a. Employees will make more money and have more job security.

b. Top managers can easily see how the production process is working.

c. Greater expertise can be developed when specialists of one function work together.

d. Top managers can determine when resources need to be changed because of increasing demand

in a particular geographic area.

e. The business benefits from efficiencies and customers get better service.

Difficulty: 2 Page-Reference: 219

Question ID: 07-1-47 Skill: Knowledge

Objective: 7.2

48. As you enter your favourite store looking for a graduation gift for your cousin, you notice the signs

suspended from the ceiling: Men’s, Women’s, Children’s, Infant’s. The store is departmentalized by

a. geography.

b. customer.

c. function.

d. product.

e. process.

Difficulty: 1 Page-Reference: 219

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 7—Organizing the Business Enterprise

Question ID: 07-1-48 Skill: Comprehension

Objective: 7.2

49. A machine shop has arranged all of the drill presses in one area, all the lathes in another, all the

surface grinders in still another, etc. Because of the differences in equipment and operator skills, the

machine shop has chosen departmentalization by

a. process.

b. function.

c. customer.

d. product.

e. geography.

Difficulty: 1 Page-Reference: 221

Question ID: 07-1-49 Skill: Comprehension

Objective: 7.2

50. The Ice Cubes Coffee Company has department titles such as accounting, human resource

management, marketing, and production. What is the form of departmentalization being used at Ice

Cubes Coffee?

a. Customer

b. Process

c. Functional

d. Product

e. Geographic

Difficulty: 2 Page-Reference: 219

Question ID: 07-1-50 Skill: Comprehension

Objective: 7.2

51. Which of the following best describes responsibility?

a. The liability of subordinates for accomplishing tasks assigned by managers

b. The power to make the decisions necessary to complete a task

c. The assignment of a task, responsibility, or authority by a manager to a subordinate

d. The duty to perform an assigned task

e. The number of people supervised by one manager

Difficulty: 2 Page-Reference: 222

Question ID: 07-1-51 Skill: Comprehension

Objective: 7.3

52. Which of the following best describes authority?

a. The assignment of a task, responsibility, or authority by a manager to a subordinate

b. The power to make the decisions necessary to complete a task

c. The number of people supervised by one manager

d. The liability of subordinates for accomplishing tasks assigned by managers

e. The duty to perform an assigned task

Difficulty: 2 Page-Reference: 222

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 7—Organizing the Business Enterprise

Question ID: 07-1-52 Skill: Comprehension

Objective: 7.3

53. Which of the following best describes delegation?

a. The duty to perform an assigned task

b. The liability of subordinates for accomplishing tasks assigned by managers

c. The assignment of a task, responsibility, or authority by a manager to a subordinate

d. The power to make the decisions necessary to complete a task

e. The number of people supervised by one manager

Difficulty: 2 Page-Reference: 222

Question ID: 07-1-53 Skill: Comprehension

Objective: 7.3

54. When delegating, managers must do all of the following except

a. decide on the nature of the work.

b. match the job with skills.

c. make sure the person understands the objectives.

d. make sure the pay of the person matches his or her level of responsibility.

e. make sure the subordinate has the time and training.

Difficulty: 1 Page-Reference: 222

Question ID: 07-1-54 Skill: Comprehension

Objective: 7.3

55. Which of the following best describes accountability?

a. The assignment of a task, responsibility, or authority by a manager to a subordinate

b. The number of people supervised by one manager

c. The duty to perform an assigned task

d. The liability of subordinates for accomplishing tasks assigned by managers

e. The power to make the decisions necessary to complete a task

Difficulty: 2 Page-Reference: 222

Question ID: 07-1-55 Skill: Comprehension

Objective: 7.3

56. What term describes a manager’s action of assigning a task to a subordinate?

a. Subordinate empowerment

b. Authority

c. Delegation

d. Accountability

e. Responsibility

Difficulty: 2 Page-Reference: 222

Question ID: 07-1-56 Skill: Knowledge

Objective: 7.3

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 7—Organizing the Business Enterprise

57. Which of the following is an advantage of delegation?

a. Increases work skills of subordinates

b. Permits the manager to focus on the day–to-day operations

c. Makes it easier to punish workers who perform tasks poorly

d. Permits the manager to exercise closer control over subordinates

e. Subordinates are not held accountable for tasks assigned by delegation

Difficulty: 2 Page-Reference: 222

Question ID: 07-1-57 Skill: Knowledge

Objective: 7.3

58. The requirement for a subordinate to show the results of assigned duties to a supervisor is

a. delegation.

b. empowerment.

c. specialization.

d. integration.

e. accountability.

Difficulty: 2 Page-Reference: 222

Question ID: 07-1-58 Skill: Knowledge

Objective: 7.3

59. You are the manager of the Marketing Department. In order to get office and art supplies you

must submit a purchase requisition. Company policy states that you can only approve up to $500; any

more must have the signature of your boss. Based on this you are lacking in which of the following?

a. Accountability

b. Delegation

c. Span of control

d. Responsibility

e. Authority

Difficulty: 2 Page-Reference: 222

Question ID: 07-1-59 Skill: Comprehension

Objective: 7.3

60. At Roger’s company, new products are developed using a team approach. The vice presidents of

production, marketing, finance, and engineering meet weekly to cover topics of common interest and new

products are usually on the agenda. Recently there have been numerous delays in launching most of the

new products and along with the delays has come much finger–pointing. Which of the following items is

lacking in this situation and is probably a major cause for the poor performance?

a. Authority

b. Span of control

c. Responsibility

d. Delegation

e. Accountability

Difficulty: 2 Page-Reference: 222

Question ID: 07-1-60 Skill: Application

Objective: 7.3

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 7—Organizing the Business Enterprise

61. Scott’s management style is one where he gets his subordinates heavily involved in department

activities. After assigning specific tasks, he follows up with them to be sure that they are completing the

assigned activities. What is Scott’s assigning of activities called?

a. Authority

b. Responsibility

c. Accountability

d. Span of control

e. Delegation

Difficulty: 2 Page-Reference: 222

Question ID: 07-1-61 Skill: Comprehension

Objective: 7.3

62. Scott’s management style is one where he gets his subordinates heavily involved in department

activities. After assigning specific tasks, he follows up with them to be sure that they are completing the

assigned activities. What is the name for the duty that Scott believes his subordinates owe him?

a. Span of control

b. Responsibility

c. Authority

d. Delegation

e. Accountability

Difficulty: 2 Page-Reference: 222

Question ID: 07-1-62 Skill: Comprehension

Objective: 7.3

63. In order to ensure standardization, at McDonald’s most lower-level decisions must be approved

by upper management. Which of the following terms describes this approach?

a. Centralized organization

b. Decentralized organization

c. Functional authority

d. Responsibility

e. Wide span of control

Difficulty: 1 Page-Reference: 223

Question ID: 07-1-63 Skill: Comprehension

Objective: 7.3

64. Which organization delegates certain decision-making authority to lower-level managers so that

they can be more responsive to customers‘ needs?

a. Centralized

b. Quasi-centralized

c. Span of control

d. Chain of command

e. Decentralized

Difficulty: 2 Page-Reference: 223

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 7—Organizing the Business Enterprise

Question ID: 07-1-64 Skill: Comprehension

Objective: 7.3

65. Which of the following is accurate with respect to General Motors’ history with centralization and

decentralization?

a. The company has been centralized for most of its history.

b. The decentralization that was evident early in GM’s history eventually led to a very high-cost way of

operating because of all the different car designs that were developed by GM’s various divisions.

c. By the middle of the 20th century, GM’s decentralization approach had gotten the company into

trouble, so it shifted to a more centralized operation.

d. Decentralization at GM resulted in almost identical cars being developed in the different divisions of

the company.

e. Decentralization has been the cause of GM’s troubles during the last decade.

Difficulty: 2 Page-Reference: 224

Question ID: 07-1-65 Skill: Comprehension

Objective: 7.3

66. What are the circumstances under which decision-making authority is likely to be decentralized?

a. A company where managers practice little delegation

b. A company where the top managers control everything

c. A small owner-operated company

d. A large organization where top managers cannot personally supervise every detail

e. When high dollar value decisions are made

Difficulty: 2 Page-Reference: 223

Question ID: 07-1-66 Skill: Comprehension

Objective: 7.3

67. Distribution of authority deals with the concepts of ________ and ________ of decisions.

a. authority; decentralization

b. authority; accountability

c. accountability; centralization

d. responsibility; authority

e. decentralization; centralization

Difficulty: 2 Page-Reference: 223-224

Question ID: 07-1-67 Skill: Knowledge

Objective: 7.3

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 7—Organizing the Business Enterprise

68. Managers at a national fast food chain are debating whether their company should be centralized

or decentralized. Which of the following would MOST strongly support the conclusion that the company

should be centralized?

a. The company’s restaurants are spread out over a large geographic area.

b. Many managers want to be able to have a say in making policy.

c. Most entry-level workers at the company are part-time.

d. Organizations that choose centralization are likely to be organizations in crisis.

e. Customers choose the company because of the consistency of their dining experience.

Difficulty: 2 Page-Reference: 223-224

Question ID: 07-1-68 Skill: Analysis

Objective: 7.3

69. Managers at a national fast food chain are debating whether their company should be centralized

or decentralized. Which of the following would MOST strongly support the conclusion that the company

should be decentralized?

a. Academic research shows that decentralization is a popular topic.

b. A big percentage of the company’s revenue comes from just a few menu items.

c. The popularity of the company’s special menu items varies greatly across different geographic

regions.

d. The company has been growing more quickly than its major competitors.

e. If there is a well-publicized instance of discrimination at a single outlet of the company, that can

really change the public’s perception of the entire company.

Difficulty: 2 Page-Reference: 223-224

Question ID: 07-1-69 Skill: Analysis

Objective: 7.3

70. The performance of Marsdon Corp., formerly a centralized company, improved noticeably after it

decentralized decision making. Which of the following would strengthen the argument that moving to a

more decentralized form was responsible for the improved performance at Marsdon?

a. The former centralized system required the various business units to answer the same basic

questions each year.

b. In this industry, a company can be profitable if just a few of its products earn unusually high returns.

c. Centralization was originally implemented so the company wouldn’t lose its core focus.

d. An economic downturn that took place after Marsdon decentralized had the effect of reducing the

discretionary income of Marsdon’s customers.

e. Marsdon’s competitors make change to their management structures as they try to become more

efficient.

Difficulty: 2 Page-Reference: 223-224

Question ID: 07-1-70 Skill: Analysis

Objective: 7.3

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 7—Organizing the Business Enterprise

71. Managers at a national fast food chain are debating whether their company should be centralized

or decentralized. Which of the following questions would likely be key in a centralized authority?

a. What are the procedures the company should use to ensure food safety?

b. Which colleges and universities should the company visit to recruit current students for entry-level

management positions?

c. How should the various regional divisions spend the money in their advertising budgets?

d. What special menu items should be offered in order to attract new customers?

e. Should marketing efforts focus on getting new customers or trying to take customers away from the

company’s competitors?

Difficulty: 2 Page-Reference: 223

Question ID: 07-1-71 Skill: Analysis

Objective: 7.3

72. An organization which begins to eliminate management levels in a “downsizing” restructuring is

moving toward

a. a tall, centralized structure.

b. a line organization.

c. an informal organization.

d. a flat, decentralized structure.

e. it is not possible to tell with this information.

Difficulty: 2 Page-Reference: 224-225

Question ID: 07-1-72 Skill: Comprehension

Objective: 7.3

73. Span of control refers to

a. the responsibility for tasks.

b. the number of people managed by one manager.

c. the authority for tasks.

d. accountability to complete tasks.

e. decentralization of decision-making.

Difficulty: 1 Page-Reference: 225

Question ID: 07-1-73 Skill: Knowledge

Objective: 7.3

74. What type of authority flows up and down the chain of command?

a. Team authority

b. Reverse vertical authority

c. Specialists’ authority

d. Line authority

e. Staff authority

Difficulty: 1 Page-Reference: 226

Question ID: 07-1-74 Skill: Knowledge

Objective: 7.3