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1. (p. 206) Many U.S. companies are going through the process of reorganizing.
2. (p. 206) Reorganization will help U.S. automakers become better competitors.
3. (p. 206) In a capitalist economy, adjusting to changing markets is rare.
4. (p. 206) One key to organizational success is to go back to basic principles and build the business on a sound
foundation.
5. (p. 206) The low U.S. unemployment rate suggests that U.S. producers are not changing fast enough to adapt to
the marketplace.
6. (p. 206) Small business organizations lack the size required to reap the benefits of labor specialization.
7. (p. 206) The division of labor and specialization often improves an employee’s job performance.
8. (p. 206) Managing a growing business organization often requires managers to create departments to accomplish
various tasks.
9. (p. 206) The process of creating individual departments to do specialized tasks is called departmentalization.
10. (p. 206) Dividing tasks into smaller jobs is called division of labor.
11. (p. 206) The success of the firm often depends on assigning the right tasks to the right person.
12. (p. 206) The process of setting up individual departments to do specialized tasks is called job specialization.
13. (p. 207) Correctly structuring a business organization allows managers to avoid delegating responsibility and
authority to employees.
14. (p. 207) An organization chart shows who is accountable for the completion of specific work and who reports
to whom.
15. (p. 207) In a small business like a lawn mowing service, monitoring the business environment is really not
necessary.
16. (p. 207) The driving force behind the change in business organizations is the change in consumer expectations.
17. (p. 207) Recent changes in the organizational structure of businesses are intended to facilitate management of
the firm.
18. (p. 207) An important challenge of management is to manage change.
19. (p. 207) Many organizations are moving their focus from management to customers.
20. (p. 208) Small businesses find that organizing their workers reduces their ability to be flexible and efficient.
21. (p. 208) Mass production causes a more complex production process.
22. (p. 208) Mass production refers to the efficient production of a large quantity of goods.
23. (p. 208) The concept of economies of scale suggests that the bigger a plant, the more efficient production
becomes.
24. (p. 208) The concept of economies of scale suggests that the average cost of goods decreases as production
level increases.
25. (p. 208) The production of cars, computers and houses has benefited from mass production.
26. (p. 20209) Henri Fayol and Max Weber are best known for their contributions to accounting theory.
27. (p. 208) The unity of command principle, introduced by Henri Fayol, suggests that all people in an
organization should work toward the same objective.
28. (p. 208) Fayol’s principle of the division of labor says that functions should be divided into areas of
specialization such as production, marketing, and finance.
29. (p. 208) One of Fayol’s principles suggests that managers should have the right to give orders and expect others
to follow.
30. (p. 209) 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.
31. (p. 208) Fayol’s principles suggest that the goals of the team are less important than the goals of individual
workers.
32. (p. 208) According to Fayol’s principles whenever authority is exercised, responsibility arises.
33. (p. 208) Fayol believed that the amount of decision-making power vested in top management should be the
same in all situations.
34. (p. 209) Fayol believed that managers should treat employees and peers with respect and justice.
35. (p. 209) Clear communication between workers and keeping order in materials and people are parts of Fayol’s
principles.
36. (p. 209) Max Weber’s principles of organization were similar to those of Henri Fayol.
37. (p. 209) Weber believed that large organizations required everyone to follow the established rules and
guidelines precisely.
38. (p. 209) Weber was critical of bureaucrats because he felt they undermined the efficiency of the organization.
39. (p. 209) 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.
40. (p. 209) Weber promoted the idea of the pyramid-shaped organization structure for large businesses.
41. (p. 209) Max Weber’s organizational theories require an educated work force to operate efficiently.
42. (p. 209) Weber was a strong proponent of bureaucracy.
43. (p. 209) Some business organizations still follow the 1940s organizational theory of Max Weber.
44. (p. 209) Weber believed that employees should be empowered to make their own decisions.
45. (p. 209) Job descriptions are an important part of Max Weber’s organizational theory.
46. (p. 209) Max Weber believed that promotion should be based solely on seniority.
47. (p. 209) The design of a bureaucratic organization assumes a well educated workforce.
48. (p. 210) An organizational hierarchy establishes one person at the top of an organization.
49. (p. 210) A chain of command is a line of authority that moves from the lowest level of the hierarchy to the top.
50. (p. 210) A hierarchy requires many top managers, but only a few middle managers.
51. (p. 210) According to Weber, a bureaucrat is a middle manager whose job is to implement top management’s
orders.
52. (p. 210) A bureaucracy empowers employees to quickly respond to customers’ wants and desires.
53. (p. 210) A bureaucracy is an organization with many layers of managers who set rules and regulations and
oversee all decisions.
54. (p. 210) Bureaucratic organizations establish rules and regulations that everyone is expected to follow.
55. (p. 210) Bureaucratic organizations are not very responsive to customers.
56. (p. 210) A bureaucracy is designed to be customer focused.
57. (p. 210) Bureaucratic organizations are structured to empower employees and please customers.
58. (p. 210) A bureaucratic style of organization is slow when responding to change.
59. (p. 211) Empowerment works only when employees are given the proper training and resources to respond.
60. (p. 210–211) Organizational design primarily focuses on the acquisition of assets to provide for high volume,
low cost production of the goods and services most desired by consumers.
61. (p. 206) To better organize his business, Frank divides the required tasks into smaller jobs and assigns each job
to a specific employee. This is an example of departmentalization.
62. (p. 206) 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.
63. (p. 209) As organizations grew, the use of Fayol’s principles led to rigid organizations that didn’t always
respond quickly to consumer requests.
64. (p. 209) UPS is an example of one company that makes use of Max Weber’s organizational theory.
65. (p. 209) Weber put great trust in the creativity, skills, and pride of employees and believed that managers
should act more as coaches than as bosses.
66. (p. 207) As an experienced loan officer, Julia has noticed that many businesses have reorganized to focus on
the needs of the customer, rather than facilitating the role of management.
67. (p. 208) Economies of scale occur when a firm operates more efficiently as it grows larger.
68. (p. 208) Gerald is a manager at Academy Manufacturing. He believes that it is very important for each worker
at Academy to have only one boss. Gerald’s view is consistent with Fayol’s unity of command principle.
69. (p. 209) Barbara is a middle manager who spends much of her time devising ways to implement the ideas of
top management. Max Weber would have called Barbara a bureaucrat.
70. (p. 209) Ping believes all workers should receive the same wage rate regardless of their position within a
company. Ping’s views on wages illustrate Fayol’s principle of equity.
71. (p. 209) Kitty holds a middle management position with a large corporation. She prefers to involve her
subordinates in decision making. She also favors allowing workers a fair amount of flexibility in how they do
their jobs. Kitty’s approach to management exemplifies the principles first popularized by Max Weber.
72. (p. 210) Most businesses adopt a bureaucratic organization in order to speed up their decision making process.
73. (p. 208) Augustino works in the accounting department of a large firm. This is an example of Fayol’s division
of labor concept.
74. (p. 210) As a new employee in a bureaucratic organization, Nancy can expect a great deal of independence and
authority.
75. (p. 210) Soprano Industries follows a chain of command with authority moving from the top of the hierarchy
down to lower-level managers. The company is organized by department with established rules and regulations
that everyone is expected to follow. All of these characteristics suggest that Soprano is an example of a
bureaucratic organization.
76. (p. 211) In an organization characterized by decentralized authority, top management delegates
decision-making authority to middle and supervisory management.
77. (p. 211) The degree to which an organization allows lower level managers to make decisions determines the
degree of decentralization.
78. (p. 211) An advantage of decentralized authority is that those individuals closest to the customers and more
familiar with local conditions make decisions.
79. (p. 211) Centralized authority provides for the delegation of authority to employees who are then better able to
respond to customers’ needs.
80. (p. 212) As a result of rapidly changing markets and global differences in consumer tastes, more firms are
considering centralized authority.
81. (p. 212, figure 8.2) A weakened corporate image is one of the disadvantages of a decentralized business
organization.
82. (p. 211) In firms with centralized authority, each department is treated as if it is a completely separate and
independent organization.
83. (p. 212) Span of control refers to the number of different markets a business can serve efficiently.
84. (p. 212) The optimum number of subordinates a manager should supervise is referred to as the span of control.
85. (p. 212) In today’s business environment, the trend is to decrease the span of control.
86. (p. 212) Studies indicate that a manager’s span of control is limited to seven employees.
87. (p. 212) The more standardized the work, the wider the span of control.
88. (p. 212) Managers near the top of an organization have the broadest span of control.
89. (p. 212) The more complex the job, the narrower the span of control.
90. (p. 212–213) The trend towards employee empowerment results in a wider span of control.
91. (p. 212–213) As employees become more professional, the span of control in the organization can increase.
92. (p. 212–213) As information technology allows managers to handle more information the narrower the span of
control can be.
93. (p. 212–213) The more employees are self-managed, the wider the span of control can be.
94. (p. 213) Companies could expand their span of control if they were willing to train their employees better and
trust their employees more.
95. (p. 213) A tall organization structure consists of multiple levels of management.
96. (p. 213) It is relatively expensive to maintain a tall organization structure.
97. (p. 213–214) A flat organizational structure is designed to be more responsive to the needs of management.
98. (p. 213–214) The flatter an organization’s structure, the fewer managers are needed.
99. (p. 213) An advantage of a tall organization is that it ensures fast and efficient communications throughout the
organization.
100. (p. 213-214) A recent trend has been for businesses to eliminate whole layers of management.
101. (p. 214) Departmentalization is the dividing of organizational functions into separate units.
102. (p. 214) The traditional way to departmentalize an organization is by geographical area served.
103. (p. 214) Departmentalization by function allows employees an opportunity to develop their skills.
104. (p. 214) Departmentalization by function typically increases the cost of doing business.
105. (p. 214) Departmentalization by function is a grouping of workers based on similar skills, expertise, or
resource use.