199. (p. 227) The key people in an organization’s grapevine typically have considerable influence in the
organization.
200. (p. 224) Trendly Bank is the second largest bank in a big Midwestern city. Trendly has many layers of
management. Because of concerns about fraud, theft, and embezzlement, front-line employees such as cashiers,
tellers, and loan officers are closely supervised and are required to follow strict rules when they deal with
customers. These arrangements suggest that Trendly Bank is an inverted organization.
201. (p. 224) Milton Learning Centers is a private firm specializing in helping students with learning problems.
Located around the country, each center employs a manager and several tutors and counselors. The counselors
and tutors have a great deal of flexibility to design programs specifically for individual students. In fact, these
first-line employees are considered to be the key people in the organization, and the manager’s main function is
to assist these employees in matters such as scheduling and securing necessary materials. This type of
arrangement suggests that Milton is an inverted organization.
202. (p. 226) Samad has just accepted a managerial position at City Bank. In order to be more effective in his new
position, he should try to learn who the important people are in City’s informal organization.
203. (p. 226-227) Molly, who works on the production line at Holiday Industries, has just been talking to a friend of
hers in the marketing department during a coffee break. During the conversation Molly picked up a rumor that
one of the managers in accounting is about to be fired. She is eager to see if other friends at Holiday know any
more about the situation. This flow of information is an example of Holiday’s grapevine in operation.
204. (p. 226) O’Malley’s, a chain of men’s clothing stores, has faced some tough times in recent years, and
management is trying to decide whether to close several stores. On crucial issues such as this, the informal
organization of the firm is likely to provide the most practical solution.
205. (p. 226) In order to be effective, managers must eliminate the informal organization within their firms, since
informal relationships can undermine managerial authority.
206. (p. 206) Companies such as Xerox, Ford, and GM are:
D. adding to their workforce as part of adaptive change.
207. (p. 206) Organizing a business begins with:
A. acquiring the necessary resources.
208. (p. 206) Dividing the required work among a group of employees is called a:
A. departmentalization.
209. (p. 206) Dividing tasks into smaller jobs is called:
D. division of authority.
210. (p. 206) The process of setting up individual departments to do specialized tasks is called:
D. delegation of authority.
211. (p. 206) Job specialization often enables employees to:
D. assign tasks and establish procedures.
212. (p. 207) Given the current business environment, managing __________ has become a critical managerial
function.
A. consumer demand
213. (p. 208) The term mass production refers to:
D. two or more firms combined to better meet the needs of customers.
214. (p. 208) The concept of ____________ suggests that as a firm produces more, the average cost of goods goes
down.
A. natural growth
215. (p. 208) Henri Fayol and Max Weber are best known for their contributions to:
216. (p. 208) Fayol’s _____________ principle states that each worker should report to one, and only one, boss.
C. esprit de corps
D. comparative advantage
217. (p. 208) Fayol’s ____________ principle says that functions should be divided into areas of specialization.
A. departmentalization
218. (p. 208) Fayol’s ____________ principle says that a spirit of pride and loyalty should be created among
people within an organization.
D. equity
219. (p. 209) __________ believed that managers were to be trusted and the firm would do well if employees
simply did what they were told.
A. John Keynes
220. (p. 209) Max Weber used the term ________ to describe middle managers whose job was to implement the
orders of top management:
A. management
221. (p. 209) In Weber’s view of a bureaucratic organization, the role of top management was to:
D. directly supervise front-line employees to better control operations.
222. (p. 209) In Weber’s view of a bureaucratic organization, the organization demanded:
A. a spirit of pride and loyalty among the workers.
223. (p. 210) The line of authority that moves from the top of a hierarchy to the lowest level is called the:
D. delegation of contingent authority.
224. (p. 210) A(n) __________ consists of one person at the top of the organization and many levels of managers
D. informal organization
225. (p. 209) In a bureaucratic organization:
D. the first-line workers are empowered to respond to the needs of customers.
226. (p. 210) One advantage of a bureaucratic organization is that:
A. it is very responsive to the wants and needs of customers.
227. (p. 210) In a(n) __________ organization, there are many layers of management who set rules and regulations
that everyone in the organization is expected to follow.
A. matrix
228. (p. 206) As Bret prepares to open his new business, he has identified the tasks that need to be accomplished
and has assigned employees to each task. This illustrates a:
D. mass production economies.
229. (p. 208) Economies of scale:
D. help explain the success of small businesses.
230. (p. 209) Max Weber favored which of the following?
A. inverted organizations
231. (p. 210) Campbell is a middle manager for a bureaucratic organization. According to Max Weber’s views on
bureaucratic organizations, Campbell’s function within the organization is to:
A. make key operating decisions.
232. (p. 208) Fayol believed that decision-making authority should remain in the hands of top management:
D. only in organizations subjected to a significant government regulation.
233. (p. 208) At the Montell Company, functions are divided into areas of specialization such as production,
marketing, accounting, and finance. This type of organization reflects Fayol’s principle of:
D. hierarchy of authority.
234. (p. 208) Sarah has been working for a small sheet metal shop for a few weeks. Tom and Bill are the two
foremen that supervise activities in the shop. Both Tom and Bill give Sarah orders from time to time, and the
two sometimes give her conflicting instructions about what she should do. Sarah doesn’t want to make either
Tom or Bill mad, but she is confused and frustrated by these conflicting assignments. This type of situation
represents a violation of Fayol’s ____________ principle.
A. division of labor
235. (p. 209) Bill is a financial manager at Carlyle Bank and Trust who always strives to treat each subordinate
with respect and fairness. Bill’s treatment of employees is an example of Fayol’s principle of:
D. order.
236. (p. 210) John has just taken a job in the marketing department with the Shelling Company. After just a few
days on the job, John has learned that the company has many layers of management, and seems to have a rule to
cover almost every situation. These conditions suggest that Shelling Company is a(n):
A. cross-functional organization.
237. (p. 209) Simtech Corporation recently redesigned its organization to enable managers to better control the
employees. Simtech’s new structure relies on a ________ that identifies the authority moving from the top of
the hierarchy to the lowest level.
D. bureaucratic reallocation
238. (p. 210) Mo was just hired by a firm that utilizes a bureaucratic organization. Mo is likely to encounter which
of the following conditions?
A. real time decisions
239. (p. 20209) The management at Patriot Mills works hard to ensure that no one in its organization has more than
one boss and all workers are treated with fairness and respect. Additionally, the firm divides the work into areas
of specialization so that everyone knows to whom they should report. The management of Patriot Mills reflects
the ideas and principles of:
A. John M. Keynes.
240. (p. 208) Which of the following correctly identifies the rationale behind the unity of command principle of
management?
A. All workers must share the same goal.
241. (p. 209) As a manager of a retail clothing store, Harry favors detailed job descriptions, formal rules and
regulations, detailed records, and standardized procedures. He also believes that staffing and promotion
decisions should be based strictly on the qualifications of the people under consideration. Harry’s attitudes
suggest that he is strongly influenced by the ideas of:
D. Adam Smith.
242. (p. 209) Which of the following statements would best summarize Max Weber’s views on the role of workers
in an organization?
A. Workers should be empowered to do whatever it takes to satisfy the needs of customers.
243. (p. 209-210) Mike prepared a paper for his class about organizational styles used in business. He found that one
reason the traditional bureaucratic style is less popular than in the past is that:
244. (p. 210-211) Hammermill Tool and Die Corporation just went through a dramatic restructuring to become less
bureaucratic. The most likely reason Hammermill restructured is because bureaucratic organizations:
D. do not have a clear chain of command, and hence violate the unity of command principle.
D. the degree of product standardization desired by the marketplace
246. (p. 211) In a(n) _____________ organization, decision-making authority is maintained at the top level of
management.
A. bottom-up
247. (p. 211) _______________ means that decision-making authority is delegated to lower-level managers and
D. Standardized authority
248. (p. 212, figure 8.2) Compared to the centralized management structure, which of the following is a disadvantage
of the decentralized management structure?
249. (p. 212, figure 8.2) Compared to the decentralized management structure, which of the following is a
disadvantage of the centralized management structure?
D. complex distribution system
250. (p. 212) The optimum number of subordinates a manager can supervise is referred to as the:
A. manager-subordinate ratio.
251. (p. 212) The span of control for a manager:
A. should never exceed 7 subordinates.
252. (p. 212) The business operations of the Cadet Corporation are complex, requiring a great deal of planning and
coordination. The span of control for the managers of the Cadet Corporation is likely to be:
D. decentralized.
253. (p. 213) An organization that consists of many layers of management is referred to as a(n) ____________
organization.
254. (p. 213) The ________ an organization’s structure, the ________ the span of control.
D. taller; flatter
255. (p. 213) An organization with only a few layers of management is known as a(n):
D. coordinated organization.
256. (p. 213) In recent years, large organizations have tried to improve their efficiency in communication and
decision making by:
D. reducing the span of control for managers.
257. (p. 214) ________ refers to the process of dividing organizational functions into separate units.
258. (p. 214) The traditional technique used to departmentalize an organization is by:
D. production process.
259. (p. 214) Which of the following is considered to be a disadvantage of functional departmentalization?
D. Top management has to direct and control various departments’ activities.
260. (p. 214) Which of the following is considered to be an advantage of functional departmentalization?
A. Employees begin to identify with their department and its goals rather than with the goals of the entire
organization.
261. (p. 213) Within its production department, Sooner Manufacturing has shift leaders, supervisors, assistant plant
managers, plant managers, product group managers, assistant division managers, division managers, an assistant
vice president for production, and a vice president in charge of production. Given its multiple layer management
structure, Sooner Manufacturing is an example of a(n) ____________ organization.
D. decentralized
262. (p. 212) Which of the following factors help determine a manager’s span of control?
D. form of business ownership
263. (p. 214) HipHop Music Company assigns workers to departments based on similar skills and has created a
marketing department, a production department, a finance department, and a personnel department. This
suggests that HipHop departmentalizes by:
D. tradition.
264. (p. 215) Gangsta Industries produces a variety of anti-crime and safety products such as burglar alarms,
smoke detectors, surveillance cameras, and specialty locks. Gangsta sells to households, businesses, and
government agencies. They have found that each market group requires a different marketing strategy. Gangsta
would probably benefit from departmentalization by:
A. function.
265. (p. 211-212) Organizations that require consistent production standards to help create a high quality public
image would tend to favor:
D. flat organizational structures.
266. (p. 211) Greenwave Garden Centers is a national chain of discount gardening stores. The top management at
Greenwave realizes that different regions of the United States have very different climates and soil conditions,
so they give regional managers a great deal of freedom to decide exactly what types of plants, fertilizers, and
other items to stock and how to best market these products. Greenwave is an example of a(n) _______________
organization.
A. bureaucratic
267. (p. 212) As the head of the marketing department, Jody works with her subordinates on complex and
challenging projects. The level of detail in this work requires Jody to spend a significant amount of time with
her subordinates providing advice and support. Within the marketing department, Jody probably has a(n)
________ span of control.
A. wide
268. (p. 214) Vaughn Studios organizes its operations by activity, such as production, marketing, accounting, and
finance. Vaughn utilizes _____________ departmentalization in order to maximize their efficiency:
A. product