Chapter 7—Designing Adaptive Organizations
TRUE/FALSE
1. The deployment of organizational resources to achieve strategic goals refers to organizing.
2. Organizing defines what to do while strategy defines how to do it.
3. Strategy defines what to do; organizing defines how to do it.
4. The framework in which the organization defines how tasks are divided, resources are deployed and
departments are coordinated is called organizational structure.
5. A structure graph is a visual representation of an organization’s structure, showing communication and
lines of power.
6. Despite the apparent advantages of specialization, many organizations are moving away from this
principle.
7. The idea that organizations develop a well-defined line of authority that includes all employees is
suggested by the virtual network approach.
8. The principle of unity of command suggests that managers within an organization should reach
agreement on the goals and objectives of the organization.
9. Authority is the right to use resources, make decisions and issue orders in an organization.
10. The duty to perform the task or activity an employee has been assigned is called accountability.
11. The flip side of the authority coin is responsibility.
12. Most organizations today discourage managers to delegate authority to the lower levels given the
challenges to meet customer needs and adapt to the environment.
13. Staff departments perform tasks that reflect the organization’s primary goal and mission.
14. The right to advise, recommend, and counsel in the staff specialists’ area of expertise is included in
staff authority.
15. The number of employees reporting to a supervisor is his or her span of management.
16. People in management positions have formal authority to direct and control immediate subordinates.
17. According to SPOTLIGHT ON SKILLS in Chapter 7, the attempt by top management to decentralize
decision making often gets bogged down because middle managers are unable to delegate.
18. According to SPOTLIGHT ON SKILLS in Chapter 7, managers are most comfortable making familiar
decisions.
19. A relatively few hierarchical levels and a correspondingly narrow span of management refers to a flat
structure.
20. The trend in recent years has been toward narrower spans of control as a way to facilitate delegation.
21. A tall structure is a management structure characterized by an overall narrow span of management and
a relatively large number of hierarchical levels.
22. Certainty in the environment is usually associated with decentralization.
23. The basis for grouping positions into departments and departments into the total organization is
referred to as departmentalization.
24. Two contemporary approaches to departmentalization are the use of teams and groups.
25. At Fox End, people are grouped together in departments by common skills and work activities,
including a sales department and a production department. This is an example of vertical functional
approach.
26. The functional structure offers a way to decentralize decision making and provide direction from the
teams in the field.
27. Because the chain of command converges at the top, the functional structure provides a way to
decentralize decision making and provide unified direction from all managers.
28. Quick response to external changes is an advantage of vertical functional structure.
29. The functional structure is sometimes called a product, a program, or self-contained unit structure.
30. Divisions are created, in functional structures, as self-contained units with separate functional
departments for each division.
31. The divisional structure encourages decentralization.
32. In a geographic-based structure, all functions in a specific country or region report to the same division
manager.
33. Aspects of both functional and divisional structures simultaneously in the same part of the
organization are combined in the virtual network approach.
34. The horizontal structure provides traditional control within functional departments, and the vertical
structure provides coordination across departments.
35. In a matrix approach to departmentalization, two chains of command exist, with top priority given to
the team managers.
36. The confusion and frustration caused by the dual chain of command is the major problem of the matrix
structure.
37. A cross-functional team normally has two or more groups of employees who are in continuing conflict
because of a difference in goals and values.
38. The overseer of both the product and functional chains of command, responsible for the entire matrix
is the matrix boss.
39. The nature of the virtual network structure means that the subcontractor becomes a permanent part of
and an internal division of the organization.
40. Permanent teams are groups of employees that are organized in a way similar to a formal department.
41. The modular approach is similar to virtual networking.
42. The divisional structure fosters excellent coordination within divisions, but coordination across
divisions is often poor.
43. One of the disadvantages of team approach is that employees often experience conflicts and dual
loyalties.
44. Flexibility and competitiveness on a global scale are the biggest advantage of the virtual network
approach to structure.
45. In the divisional approach, coordination across divisions is great whereas coordination within divisions
is often poor.
46. The matrix approach can be highly effective in a complex, rapidly changing environment in which the
organization needs to be flexible and adaptable.
47. One major disadvantage of the virtual network approach is the lack of hands-on control.
48. The structure of an organization is not complete without designing the horizontal as well as the vertical
dimensions of structure.
49. Coordination is the quality of collaboration across departments.
50. Coordination is especially important in the international arena.
51. Reengineering is the outcome of information and cooperation.
52. A permanent team designed to solve short-term problems refers to a task force.
53. A project manager is a person responsible for coordinating the activities of several departments for the
completion of a specific project.
54. Reengineering basically means preserving the past by establishing the sequence of activities by how
work was done.
55. The radical redesign of business processes to achieve dramatic improvements in cost, quality, service,
and speed is called reengineering.
56. Because the focus of reengineering is on function rather than process, reengineering generally leads to
a shift away from a strong horizontal structure to one emphasizing stronger vertical coordination.
57. In today’s environment, organizations with stronger horizontal designs typically perform better.
58. When an organization uses a differentiation strategy, it strives for internal efficiency.
59. With a cost leadership strategy, the organization attempts to develop innovative products unique to the
market.
60. Permissive expectations typically would fit in a traditional vertical structure with fixed rules and a
clear hierarchy of authority.
61. Two contingency factors affecting structure are strategic goals and the environment.
62. The pure functional structure is appropriate for achieving internal efficiency goals.
63. The functional structure is appropriate when the primary goal is innovation and flexibility.
64. A vertical structure that emphasizes specialization and centralization is appropriate when
environmental uncertainty is high.
65. According to research, a fundamental principle is that work can be performed more efficiently if
employees use no work specialization.
66. When work specialization is extensive, employees specialize in a single task. Jobs tend to be small,
but they can be performed efficiently.
67. A payroll clerk reports to a chief accountant, who in turn reports to the vice president, who in turn
reports to the company president. This is an example of chain of command.
68. The acceptance theory of authority argues that managers have authority because of the positions they
hold, not the people in those positions.
69. Line departments perform tasks that reflect the organization’s primary goal and mission.
70. Traditional views of organizational design recommend a span of management of about 7 to 10
subordinates per manager.
71. In the United States and Canada, the trend over the past 30 years has been toward greater centralization
of organizations.
72. For companies to operate effectively, the amount of centralization or decentralization should fit the
firm’s strategy.
73. Large non-profit organizations such as the United Way and Girl Scouts of the USA are known to
operate using a matrix structure.
74. The distinctive feature of the project manager position is that the person is not a member of one of the
departments being coordinated.
75. Small-batch production is distinguished by standardized production runs.
76. Technical complexity is the difference between small-batch production, mass production, and
continuous process production.
77. Intangible output refers to organizations where employees and customers interact directly in the
production of products and services.
78. Digital technology encourages boundarylessness, where information and work activities flow freely
among various organizational participants.
MULTIPLE CHOICE
1. Which of the following refers to the deployment of organizational resources to achieve strategic goals?
a.
Planning
b.
Controlling
c.
Organizing
d.
Leading
e.
Strategic management
2. Strategy defines ____ to do (it) while organizing defines ____ to do (it).
a.
how; what
b.
how; why
c.
what; how
d.
what; why
e.
when; what
3. Organizational structure includes which of these?
a.
The set of formal tasks assigned to individuals
b.
The set of formal tasks assigned to departments
c.
The design of systems to ensure effective coordination of employees across departments
d.
Formal reporting relationships
e.
All of these are part of organizational structure.
4. Organization structure is defined as the
a.
visual representation of the organization.
b.
framework in which the organization defined how tasks are divided, resources are
deployed, and departments are coordinated.
c.
division of labor.
d.
unbroken line of authority that links all individuals in the organization.
e.
none of these.
5. The organization chart
a.
shows the characteristics of the organization’s vertical structure.
b.
is a visual representation of the organization‘s structure.
c.
details the formal reporting relationships that exist within an organization.
d.
all of these.
e.
both shows the characteristics of the organization’s vertical structure and is a visual
representation of the organization’s structure.
6. Which of the following refers to the degree to which organizational tasks are subdivided into
individual jobs?
a.
Multitasking
b.
Lines of authority
c.
Work specialization
d.
Autonomy
e.
Team structure
7. When work specialization is extensive
a.
employees perform a single task.
b.
employees perform many tasks.
c.
employees are often highly challenged.
d.
employees are often inefficient.
e.
jobs tend to be large.
8. Jacob was recently looking at his company’s organization chart in an attempt to discover who reports
to whom. Jacob is studying his organization’s
a.
degree of formalization.
b.
amount of differentiation.
c.
degree of centralization.
d.
chain of command.
e.
division of labor.
9. ____ is also referred to as work specialization.
a.
Division of labor
b.
Unity of command
c.
Scalar chain
d.
Esprit de corps
e.
Virtual network approach
10. Unity of command and the scalar principle are both closely related to the
a.
amount of work specialization in an organization.
b.
degree of formalization.
c.
chain of command.
d.
amount of bureaucracy in the organization.
e.
matrix structure.
11. ____ means that each employee is held accountable to only one supervisor.
a.
Scalar principle
b.
Unity of command
c.
Work specialization
d.
Division of labor
e.
Span of management
12. The formal and legitimate right of a manager to make decisions is
a.
delegation.
b.
responsibility.
c.
authority.
d.
span of management.
e.
leadership.
13. ____ refers to a clearly defined line of authority in the organization that includes all employees.
a.
Scalar principle
b.
Unity of command
c.
Work specialization
d.
Division of labor
e.
Span of management
14. The people with authority and responsibility are subject to reporting and justifying task outcomes to
those above them in the chain of command. This is called
a.
delegation.
b.
line authority.
c.
staff authority.
d.
accountability.
e.
hierarchy.
15. Which of the following characteristics distinguishes authority?
a.
It is vested in people, not positions.
b.
Subordinates accept it.
c.
It flows across the horizontal hierarchy.
d.
It emerges from the organizational values.
e.
Individuals are born with this power.
16. Gina wishes to transfer authority and responsibility to her subordinates. This process is known as
a.
accountability.
b.
coordination.
c.
delegation.
d.
departmentalization.
e.
passing the buck.
17. Which department performs tasks that reflect the organization’s primary goals and mission?
a.
Line
b.
Staff
c.
Primary
d.
Functional
e.
Strategic planning
18. ____ departments include all of those that provide specialized skills in support of ____ departments.
a.
Line; staff
b.
Staff; line
c.
Primary; functional
d.
Functional; primary
e.
Line; functional
19. Which of the following typically is NOT considered a staff department?
a.
Strategic planning
b.
Accounting
c.
Manufacturing
d.
Human resources
e.
Research and development
20. Carly’s Clothes, Inc. manufactures children’s clothes. Which of the following departments for Carly’s
Clothes can be considered a line department?
a.
Finance department
b.
Human Resources department
c.
Research and development department
d.
Manufacturing department
e.
Marketing department
21. Which of the following refers to the number of employees reporting to a supervisor?
a.
The line of authority
b.
The span of management
c.
The chain of command
d.
The management chain
e.
Delegation
22. Traditionally, a span of management of about ____ has been recommended.
a.
three
b.
five
c.
fifteen
d.
seven
e.
twenty
23. Kevin’s subordinates are highly trained and all perform similar tasks. Nichole’s subordinates are spread
over two locations and she has little available in the way of support systems. Which of the following
statements is most correct?
a.
Nichole’s span of management can be larger than Kevin’s.
b.
Nichole will have problems with unity of command.
c.
Kevin’s span of management can be larger than Nichole’s.
d.
Kevin has more problems with work specialization.
e.
None of these.
24. According to Spotlight on Skills in Chapter 7, all of the following are effective ways for a manager to
delegate EXCEPT:
a.
delegate the whole task
b.
select the right person
c.
save feedback for completion of the project
d.
evaluate and reward performance
e.
give thorough instruction
25. Which of the following organizations have a flat structure compared to others?
a.
Organization A with eleven hierarchical levels
b.
Organization B with three hierarchical levels
c.
Organization C with eight hierarchical levels
d.
Organization D with six hierarchical levels
e.
Organization E with seven hierarchical levels
26. Which of the following factors is NOT associated with larger span of control?
a.
Work performed by subordinates is stable and routine.
b.
Subordinates perform similar work tasks.
c.
Subordinates are located at various different locations.
d.
Subordinates are highly trained and need little direction.
e.
Rules and procedures defining task activities are available.
27. Relative to a flat organizational structure, a tall structure has a ____ span of management and ____
hierarchical levels.
a.
wide, fewer
b.
narrow, fewer
c.
narrow, wider
d.
narrow, more
e.
wide, more
28. ____ is the trend in recent years.
a.
Greater work specialization
b.
Less delegation
c.
Wider spans of management
d.
Narrower spans of management
e.
Tall structure
29. Barney and Betty work at Mountain Peak, Inc. Although they both work on the assembly line, they
have the authority to make many decisions about their job. Mountain Peak can be said to have
a.
a high degree of decentralization.
b.
a wide span of management.
c.
a high degree of centralization.
d.
a narrow span of management.
e.
no management.
30. ____ means that decision authority is located near the ____ of the organization.
a.
Centralization, bottom
b.
Decentralization, top
c.
Centralization, top
d.
Centralization, middle
e.
None of these
31. Change and uncertainty in the environment are usually associated with
a.
work specialization.
b.
decentralization.
c.
centralization.
d.
tight vertical control.
e.
division of labor.
32. Which of the following is the basis for grouping positions into departments and departments into the
total organization?
a.
Departmentalization
b.
Centralization
c.
Decentralization
d.
Formalization
e.
Specialization
33. The functional, ____, and ____ are traditional approaches that rely on the chain of command to define
departmental groupings and reporting relationships along the hierarchy.
a.
divisional, teams
b.
divisional, matrix
c.
matrix, teams
d.
matrix, networks
e.
teams, networks
34. Which of the following is not an approach to structural design that reflects different uses of the chain
of command?
a.
Matrix approach
b.
Team-based approach
c.
Process approach
d.
Divisional approach
e.
Virtual network approach
35. Kara’s department is made up of people with similar skills and work activities. Her organization uses
the ____ approach to departmentalization.
a.
team-based
b.
horizontal matrix
c.
divisional
d.
vertical functional
e.
process
36. Mondavi Corporation has a finance department, a marketing department, and a production department.
Mondavi
a.
uses a functional structure.
b.
has a geographic structure.
c.
uses a divisional structure.
d.
uses product-based structure.
e.
uses a matrix structure.
37. When departments are grouped together on the basis of organizational outputs, the organization is
using a
a.
functional structure.
b.
matrix structure.
c.
divisional structure.
d.
virtual network structure.
e.
team-based structure.
38. Stephanie works in one of seven research and development departments at Tara’s Terrace, Inc. This
would suggest that Tara’s Terrace has a
a.
functional structure.
b.
divisional structure.
c.
wide span of control.
d.
high degree of centralization.
e.
matrix structure.
39. According to your text, in very large companies, a
a.
functional structure is necessary.
b.
matrix structure is a requirement.
c.
divisional structure is essential.
d.
team approach should be avoided.
e.
divisional structure is inefficient.
40. Self-contained unit structure is a term used for
a.
divisional structure.
b.
functional structure.
c.
term structure.
d.
matrix structure.
e.
virtual network structure.
41. Relative to the functional structure, the divisional structure
a.
encourages decentralization.
b.
has a higher degree of work specialization.
c.
has a more pronounced division of labor.
d.
has excellent coordination across departments.
e.
results in an efficient use of resources.
42. All functions in a specific country or region report to the same division manager in ____ divisions.
a.
functional
b.
matrix
c.
geographic-based
d.
teams
e.
networks
43. Global companies often use a ____ structure to achieve simultaneous coordination of products across
countries.
a.
functional
b.
divisional
c.
matrix
d.
product-based
e.
process-based
44. A formal chain of command for both functional and divisional relationships is provided by the ____
approach to structure.
a.
matrix
b.
vertical functional
c.
divisional
d.
product
e.
team-based
45. Kent works at the Tick Tock, Inc. He has two bosses, one a functional manager and the other a
divisional manager. Tick Tock, Inc. has a
a.
functional structure.
b.
divisional structure.
c.
geographic structure.
d.
matrix structure.
e.
product structure.
46. Which of the following is a contemporary approach to structural design in departmentalization?
a.
Functional
b.
Divisional
c.
Traditional divisions
d.
Teams
e.
Geographic-based
47. The ____ is the product or functional boss, who is responsible for one side of the matrix.
a.
matrix boss
b.
production supervisor
c.
department boss
d.
top leader
e.
two-boss employee
48. ____ are brought together as a formal department in the organization.
a.
Cross-functional teams
b.
Permanent teams
c.
Formal teams
d.
Ad-hoc teams
e.
Task teams
49. ____ is an organization structure that divides the major functions of the organization into separate
companies.
a.
The diversification approach
b.
The team approach
c.
The virtual network approach
d.
The BCG approach
e.
The functional approach
50. Walt works for a large company. Recently, his organization began to contract out such functions as
training, engineering, and computer service. This approach is consistent with a
a.
functional structure.
b.
team structure.
c.
divisional structure.
d.
virtual network structure
e.
service structure.
51. ____ is an organization structure that divides the major functions of the organization into separate
companies and coordinates their activities from a small headquarters organization.
a.
The diversification approach
b.
The team approach
c.
The virtual network approach
d.
The BCG approach
e.
The functional approach
52. In the ____ approach, a manufacturing company uses outside suppliers to provide entire chunks of a
product, which are then assembled into a final product by a handful of workers.
a.
virtual network
b.
modular
c.
virtual organization
d.
team
e.
matrix
53. All of the following are advantages of a functional structure EXCEPT
a.
economies of scale.
b.
excellent coordination between functions.
c.
in-depth skill specialization and development.
d.
high quality technical problem solving.
e.
career progress within functional departments.
54. An advantage of functional structures is the
a.
resulting economies of scale.
b.
enlarged tasks for employees.
c.
easy pinpointing of responsibility for product problems.
d.
development of general management skills.
e.
flexibility in an unstable environment.
55. Shooting Star, Inc. has slow response to external changes, centralized decision making, and poor
coordination across departments. It is likely structured
a.
along divisional lines.
b.
along functional lines.
c.
based on the team approach.
d.
based on the virtual network approach.
e.
none of these.