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47) The simple structure is most widely practiced in small businesses in which ________.
A) the manager and owner are one and the same
B) the number of employees is between 100 to 150
C) employees are highly skilled
D) managers are hired directly by the company's owner
E) training budgets are limited
48) Mark is the owner of a local shoe business. He has fifteen employees who report directly to
him, he makes all the decisions regarding the type and quality of shoes, and he looks after the
shop's finances. Which type of organizational structure does Mark have?
A) bureaucracy
B) virtual structure
C) matrix structure
D) boundaryless structure
E) simple structure
49) Which of the following statements is true about the simple structure?
A) It is very expensive to operate.
B) It is characterized by a high degree of formalization.
C) It becomes increasingly inadequate as an organization grows.
D) It is most widely adopted in large businesses in which the manager and owner are different.
E) It is characterized by a narrow span of control.
50) Which of the following is a characteristic of a simple structure?
A) high centralization
B) inflexibility
C) narrow spans of control
D) ambiguous accountability
E) high degree of formalization
51) The key concept that underlies all bureaucracies is ________.
A) efficiency
B) standardization
C) increased flexibility
D) decentralization
E) specialization
52) Which of the following statements is true regarding a bureaucracy?
A) Bureaucracies are characterized by a low degree of formalization.
B) Bureaucracy is an ideal organizational design for those organizations that operate under
highly uncertain conditions.
C) Typically, bureaucracies have wider spans of control.
D) Bureaucracies can get by with less talented middle- and lower-level managers.
E) Bureaucracies encourage employee empowerment.
53) Which of the following types of organizational designs combines two forms of
departmentalization, functional and product?
A) simple structure
B) bureaucracy
C) matrix structure
D) virtual structure
E) boundaryless structure
54) The strength of product departmentalization in the matrix structure is that it facilitates
________.
A) coordination among specialties
B) implementation of a high degree of centralization
C) adherence to chain of command
D) standardization
E) employee empowerment
You are interested in explaining the different types of organizational designs to students of basic
management. These students need to know the advantages and disadvantages of each structure as
well as the structure's characteristics.
55) You extol the virtues and benefits of standardization. You are most likely to be promoting
the ________.
A) matrix structure
B) virtual organization
C) bureaucracy
D) boundaryless structure
E) simple structure
56) You explain to your students the structure of a local grocery store situated in your
neighborhood. The store employs two full-time employees, a salesperson and a cashier. The
owner of the store acts as its manager and makes all the decisions. Which of the following
organizational structures is being described by you?
A) matrix structure
B) virtual structure
C) bureaucracy
D) boundaryless structure
E) simple structure
57) You describe to your students a new committee within the university that brings together
specialists from all different departments to develop a new interdisciplinary program. The
structure of the committee best meets the definition of the ________ structure.
A) matrix
B) simple
C) boundaryless
D) virtual
E) bureaucratic
58) Which of the following statements is true regarding a matrix structure?
A) It breaks the unity-of-command concept.
B) It cannot achieve economies of scale.
C) It reduces ambiguity about who reports to whom.
D) It prevents power struggles.
E) It avoids duplication of activities.
59) Which one of the following problems is most likely to occur in a matrix structure?
A) decreased response to environmental change
B) increased social loafing
C) loss of economies of scale
D) increase in groupthink
E) employees receiving conflicting directives
60) The simple structure is characterized by a high degree of departmentalization and narrow
span of control.
61) The functional structure groups employees by their similar specialties, roles, or tasks.
62) The organizational design of a simple structure is highly risky.
63) The strength of a bureaucracy lies in its ability to perform standardized activities in a highly
efficient manner.
64) A bureaucracy is characterized by decentralized authority and wider spans of control.
65) The divisional structure has the opposite benefits and disadvantages of the functional
structure.
66) The matrix structure reduces the possibility of power struggles.
67) Describe the simple structure. Discuss its advantages and disadvantages.
68) Describe the various characteristics of bureaucracy.
69) Discuss the advantages and disadvantages of a matrix structure.
70) Compare and contrast the three common organizational designs: simple structure,
bureaucracy, and matrix structure.
71) A ________ organization is a small, core organization that outsources major business
functions.
A) centralized
B) virtual
C) bureaucratic
D) matrix
E) formalized
72) A virtual organization is also known as a(n) ________ organization.
A) boundaryless
B) electronic
C) modular
D) pyramidal
E) triangular
73) You are the CEO of Achilles Incorporation. You have decided to hire other organizations to
perform many of the basic functions of your business. You have hired an accounting firm to keep
your records, a recruiting firm to handle human resource functions, and a computer firm to
handle all records. To keep costs down, you are looking for other areas in which to outsource
operations. You have chosen to operate your business as a ________.
A) matrix organization
B) virtual organization
C) highly centralized organization
D) highly formalized organization
E) bureaucracy
74) The major advantage of a virtual organization is its ________.
A) decentralized structure
B) ability to enhance role clarity
C) flexibility
D) highly departmentalized structure
E) ability to minimize organizational politics
75) Which of the following statements is true regarding a virtual organization?
A) A virtual organization is sometimes called matrix organization.
B) A virtual organization is highly decentralized.
C) A virtual organization is characterized by a high degree of departmentalization.
D) A virtual organization tends to have unclear roles, goals, and responsibilities.
E) A virtual organization lacks flexibility.
76) Which of the following is most likely to be a drawback of a virtual organization?
A) constant flux and reorganization
B) increased technology costs and decentralization
C) lack of flexibility and innovativeness
D) lack of qualified employees and poor management
E) poor communication and high degree of formalization
77) Blastkrieg, a chain of audio equipment stores, uses computerized inventory control and
customer self-service to eliminate the category of sales clerks from its force of employees. After
diversifying into computer electronics, it now plans to employ the same concept in selling
desktop PCs and laptops. Which of the following is an assumption made in Blastkrieg's strategy?
A) All computer electronics stores use a similar strategy.
B) Sales personnel are not required for selling computer electronics successfully.
C) The same kind of computers will be used in inventory control for both audio equipment and
electronics at Blastkrieg.
D) A self-service strategy cannot be employed without computerized inventory control.
E) Sales clerks are the only employees of Blastkrieg who could be assigned tasks related to
inventory control.
You have learned about the traditional and new design options for organizational structures. You
have decided that one of the designs developed during the last decade or two is probably the
most appropriate for your newly formed organization.
78) You have recently started your business with a small capital investment. Your business needs
a very high degree of flexibility so that you can quickly respond to environmental changes and
you are also interested in minimizing costs. Which of the following types of organizations is best
suitable for your business?
A) a highly centralized organization
B) a virtual organization
C) a formalized organization
D) a bureaucracy
E) a hierarchical organization
