106. (p. 215) Departmentalization helps develop a creative environment through a group think process.
107. (p. 214) Organizations that utilize departmentalization benefit from improved communication between
different organizational departments.
108. (p. 215) Departmentalization creates an environment in which people are trained in a variety of managerial
responsibilities.
109. (p. 214) Economies of scale can be achieved through departmentalization.
110. (p. 215) The decision about which way to departmentalize depends greatly on the nature of the product and
the customers served.
111. (p. 215) Some firms use a combination of departmentalization techniques.
112. (p. 215) Unfortunately coordinating the efforts of the traditional departments and the company Internet has
proven to be difficult and the cause of a loss of market share in many companies.
113. (p. 215) Successful firms separate their Internet activities from their more traditional departments.
114. (p. 211) Bently Bakeries is a nationwide bakery that has plants located throughout the United States. Top
management at Bently believes that customers in different regions have different tastes. It also recognizes that
its bakeries face more intense competition in some regions than in others. Therefore, Bently’s top management
gives local managers the freedom to offer different types of breads and desserts, and to decide on a reasonable
pricing strategy for its products. Bently seems to be a decentralized organization.
115. (p. 211) Management at BIG Burgers, a nationwide chain of fast food restaurants, believes that its customers
value a predictable and consistent level of service and quality. Top managers at BIG Burgers believe that when
people stop at a BIG Burgers restaurant anywhere in the United States, they should know what to expect in
terms of menu, price and quality. In order to maintain this consistency, BIG Burgers should adopt a
decentralized organization.
116. (p. 211-212, figure 8.2) A study at the Mars Hotel Corporation identified poor employee morale. These workers
are frustrated by their inability to deal directly with customers’ concerns and complaints. These employees feel
that if they were empowered with the authority to make decisions, customer satisfaction would dramatically
increase. This illustrates one of the disadvantages of decentralized authority.
117. (p. 213) In the Surf City plant of the Jumbly Company, workers are supervised by a foreman. The foreman
reports to the shift supervisor who reports to the head of the production department, who then reports to the
assistant plant manager, who reports to the plant manager. The plant manager, in turn, reports to a district
manager, who then reports to a product group manager, who reports to an assistant vice president of operations,
who keeps in close touch with an executive vice president. It appears that Jumbly’s is a tall organization.
118. (p. 212) Because top managers supervise the firm’s most talented workers, they generally have a broader span
of control than middle or first line managers.
119. (p. 212) Martina is an experienced manager with excellent communications skills. The workers in her area are
highly skilled and are capable of doing their work with very little direct supervision. Martina’s span of control is
likely to be quite broad.
120. (p. 214) Rome Corporation is organized into departments such as finance, production, marketing, data
processing, and accounting. Rome has chosen to departmentalize by function.
121. (p. 214) Top management at Topdown, Inc. wants to encourage communication between different
departments and prevent employees from becoming narrow specialists. The best way to accomplish these goals
is to departmentalize Topdown’s organization by function.
122. (p. 217) Traditional organizational models provide the flexibility demanded in a changing business
environment.
123. (p. 217) In a line organization, there are many specialists who serve as advisors and assistants to the managers
who make decisions.
124. (p. 217) The line organization is common among very small companies.
125. (p. 217) Line organizations follow all of Fayol’s traditional management rules.
126. (p. 217) Line managers issue orders, enforce discipline, and adjust the organization as conditions change.
127. (p. 217) In large businesses, a line organization provides firms the ability to respond quickly to a changing
environment.
128. (p. 217) Line organizations clearly define the lines of authority and responsibility.
129. (p. 217) Line organizations often experience the problem of employees reporting to more than one boss.
130. (p. 217) A line organization in a large business often suffers from excessively long lines of communication.
131. (p. 217) Staff personnel perform functions such as production and marketing that contribute directly to the
primary goals of the organization.
132. (p. 217) In a line-and-staff organization, staff positions are entry jobs to train new line managers.
133. (p. 217) While staff personnel have the authority to make policy decisions, line personnel have the authority
to advise and make suggestions.
134. (p. 217) An advantage of a line-and-staff organization is that it provides people to advise and assist line
managers as they perform their jobs.
135. (p. 217) Line-and-staff organizations may suffer from inflexibility.
136. (p. 218) Matrix organizations bring together specialists from different parts of the firm to work on specific
projects.
137. (p. 218) The team specialists in a matrix organization remain part of the traditional line-and-staff structure.
138. (p. 218) A matrix organization produces an environment that discourages cooperation and teamwork.
139. (p. 219) The matrix organization may be only a temporary solution to a long-term problem.
140. (p. 218) The matrix organizational structure was created as a response to changes in the railroad industry.
141. (p. 219) The matrix organization structure is costly and complex.
142. (p. 218) Matrix organizations give managers flexibility in assigning people to projects.
143. (p. 218) Matrix organization structures provide for more efficient use of organizational resources.
144. (p. 219-220) A recent trend in organization models is the development of long-lived teams of employees from
different departments of the firm.
145. (p. 219) Cross-functional self-managed teams are groups of employees empowered to work with suppliers
and customers to develop new products and give great service.
146. (p. 219) Cross-functional teams serve as advisory committees offering their expertise to line decision makers.
147. (p. 219) Cross-functional teams defy the trend towards customer-driven organizations.
148. (p. 220) Cross-functional teams consist of employees from different departments who work together on a
long-term basis.
149. (p. 220) Cross-functional teams avoid involving groups outside of the firm to ensure their plans are not leaked
to their competitors.
150. (p. 220) Cross-functional teams work best when the “voice of the customer” is brought into organizations.
151. (p. 220) Including customers and suppliers on cross-functional teams violates the interests of stockholders.
152. (p. 217) Julio is a manager with Celebration.com, an Internet-based retailer of party supplies. As sales have
increased, the organization has experienced excessively long lines of communication, failure to quickly respond
to change, and lack of advice from specialists. Apparently Celebration.com utilizes the line-and-staff
organizational structure.
153. (p. 217) Buzzoff Corporation is a medium sized organization, organized with well-defined lines of authority
and responsibility. Each employee reports to only one boss. However, the managers at Buzzoff often complain
that they have no specialists available to offer advice, and inefficient long lines of communication. These
characteristics suggest that Buzzoff employs a matrix organization.
154. (p. 217) Maha is an employee of Chesstown Enterprises. As a lawyer, she provides legal advice and
assistance to the firm’s managers. Julie’s job with Chesstown would be classified as a staff position.
155. (p. 217) Wizard Manufacturing makes small consumer electronics like mixers and toasters. The industry is
relatively stable, having few new advances in product development. Wizard should use a line or line-and-staff
organizational structure to ensure efficient operations.
156. (p. 218) Joel, an employee of the engineering department, has been temporarily assigned to work with
specialists from other departments to develop a new product. Upon completion of this single project, Joel will
return to his position in the engineering department. This arrangement illustrates the use of a cross-functional
team.
157. (p. 220) Alleta Publishing Company, Inc. is considering the use of cross-functional teams. In order to be most
effective, Alleta should include customers as members of the teams.
158. (p. 220) Networking uses communication technology to link organizations allowing them to work together on
common objectives.
159. (p. 221) The Internet makes real time availability of data possible.
160. (p. 221) Transparency describes the relationship between a firm and its stockholders.
161. (p. 221) Transparency allows two companies to work more efficiently together.
162. (p. 220-221) Networking requires transparency.
163. (p. 221) A virtual corporation refers to a permanent network of firms linked by high-tech communication
systems.
164. (p. 221) A virtual corporation is a networked organization made up of replaceable firms that join the network
and leave it as needed.
165. (p. 221-222) Benchmarking requires organizations to compare each organizational function against the best in
the world.
166. (p. 221-222) Competitive benchmarking rates an organization’s products and operations against the industry
average.
167. (p. 221-222) Competitive benchmarking compares a company’s practices, processes, and products against the
world’s best.
168. (p. 222-223) The functions that a company can perform as well as or better than anyone else in the world are
known as that firm’s optimized capabilities.
169. (p. 222-223) An organization’s core competencies are those functions that the firm can perform as well as or
better than anyone else in the world.
170. (p. 223) If a particular function is one of a firm’s core competencies, it should perform this function itself
rather than outsource it to another organization.
171. (p. 222) Assigning various functions that a firm might do for itself to outside organizations is known as
competitive allocation.
172. (p. 222) Outsourcing involves assigning various functions to outside organizations.
173. (p. 220) Cardinal Foods is a wholesaler serving grocery stores. High tech communications allows Cardinal to
work closely with its suppliers and customers in real time. Networking allows these organizations to operate
more efficiently.
174. (p. 221-222) The management at Forger Steel Corporation has recently decided to rate their company’s
processes and products against the results achieved by the world’s best at similar processes and products. Forger
has adopted a policy of international standardization.
175. (p. 222-223) The Nutmeg Soccer Club has just decided to outsource its accounting work. This suggests that
executives at Nutmeg do not believe that accounting is one of the firm’s core competencies.
176. (p. 223) Restructuring involves relatively minor changes to an organization to better meet the needs of
management.
177. (p. 223) To better serve customers, many firms are restructuring to empower front-line employees.
178. (p. 223) Introducing change into an organization is an easy task for a manager.
179. (p. 224, figure 8.9) Inverted organizations define the role of front-line employees as those workers who follow
the orders of top and middle management.
180. (p. 224) Inverted organizations empower employees by adding multiple layers of management and long lines
of communication.
181. (p. 224) In an inverted organization, the purpose of management is to assist and support first-line employees,
not boss them around.
182. (p. 225) The secret to successful organizational change is to focus on customers and give them what they
want.
183. (p. 224, Dealing with Change box) According to the “Dealing with Change” box in Chapter 8, Mark Hurd, the CEO of
Hewlett-Packard, should restore the old corporate culture, which emphasized empowerment of its employees.
184. (p. 225) The widely shared values that provide an organization the coherence and cooperation needed to
achieve common goals is known as unity of command.
185. (p. 225) The culture of an organization is often reflected in stories, traditions, and myths.
186. (p. 225) Organizational culture can produce either a positive or negative impact on an organization.
187. (p. 225) The very best organizations have cultures that emphasize service to others, especially customers.
188. (p. 226, Spotlight on Small Business box) The “Spotlight on Small Business” box in Chapter 8 gives the example of
Amy’s Ice Creams in Austin and Houston, Texas as a small company that attracts a lot of customers because of
its offbeat culture.
189. (p. 226) The informal organization relationships are created by the decisions of top management.
190. (p. 226) While most organizations have a formal organization structure, only poorly managed firms also have
an informal organization.
191. (p. 226) A firm’s informal organization refers to the structure that identifies the authority, responsibility, and
position of people within the organization.
192. (p. 226) The informal organization of a business can help generate creative solutions to short-term problems.
193. (p. 226) The formal organization of a firm provides the lines of authority to follow in routine situations.
194. (p. 226) Effective employees learn the relationships of employees in the firm’s informal organization.
195. (p. 226-227) The grapevine refers to the formal channel used for confidential communications between
members of top management.
196. (p. 227) An informal organization can be a valuable asset to managers attempting to create an environment of
harmony among workers and establish the corporate culture.
197. (p. 226) The informal organization appears as dashed lines on a firm’s organizational chart.
198. (p. 226) The informal organization is best suited for reasoned decision making on big issues.