111. Businesses seldom create separate departments to serve customers with different
needs.
112. Rise ‘n Shine Bakeries is a nationwide chain that has plants located throughout the U.S.
Top management at Rise ‘n Shine 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, Rise ‘n Shine’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. Rise ‘n Shine typifies a decentralized organization.
113. Management at Hottie Potatee, a nationwide potato bar chain, believes that its
customers value a predictable and consistent level of service and quality. When customers stop
at one of its potato bars anywhere in the U.S., they should know what to expect in terms of menu,
price and quality. In order to maintain this consistency, Hottie Potatee should adopt a
decentralized organization.
114. A study at the Slumber Inn Co. identified poor employee morale. Employee respondents
indicated frustration with 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.
115. In the Crescent City manufacturing plant of the Granite Works Corp., a foreman
supervises workers. 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. The layers of management indicate that Granite Works
Corporation is a tall organization.
116. Martina is an experienced manager with excellent communications skills. The workers in
her area are highly skilled and capable of doing their work with very little direct supervision.
Martina’s span of control is likely to be quite broad.
117. Rome Corporation is organized into departments such as finance, production, marketing,
data processing, and accounting. Rome has chosen to departmentalize by function.
118. Top management at Topdown, Inc., wants to encourage communication among different
departments to prevent employees from becoming narrow specialists. The best way to
accomplish these goals is to departmentalize Topdown’s organization by function.
119. Green Landscapes, a company that installs underground sprinkler systems, serves
several commercial customers, as well as residential customers. As the business expands, Green
Landscapes’ management may want to consider departmentalizing by customer group and then
by process.
120. Jesse started a successful telecommunications company that provided voicemail services
to business clients in the Midwest. As the business grew, Jesse added functional departments
including a marketing department and an accounting department. After a few years, he realized
that employees who specialized in these areas no longer shared knowledge with each other in
the same way they did when the operation was smaller. As one of Jesse’s business consultants,
you explain that as the company grows taller, it cannot avoid this pitfall, and he should focus on
continued functional departmentalization, especially if he supports innovation and learning.
121. Jackie works in the finance department at the home office of a large retailer. Her main
responsibility is to watch department expenditures and find ways to cut costs whenever possible.
Tim, the marketing director for the same company, shares information with Jackie only when
necessary. He finds her inflexible, and not understanding of what it takes to roll out a new
product line. Jackie and Tim typify a disadvantage of departmentalization.
122. Traditional organizational models such as a line model or a line-and-staff model provide
the flexibility demanded in a changing business environment.
123. In a line organization, there are many specialists who serve as advisors and assistants to
the managers who make decisions.
124. Small businesses often use a line organization model.
125. Line organizations follow Fayol’s traditional management rules.
126. Line managers issue orders, enforce discipline, and adjust the organization as conditions
change.
127. In large businesses, a line organization provides firms the ability to respond quickly to a
changing environment.
128. Line organizations clearly define the lines of authority and responsibility.
129. Line organizations often experience the problem of employees reporting to more than one
boss.
130. A line organization in a large business often suffers from excessively slow lines of
communication.
131. Staff personnel perform functions such as production and sales that contribute directly to
the primary goals of the organization.
132. In a line-and-staff organization, staff positions are temporary jobs to train new line
managers.
133. While staff personnel have the authority to make policy decisions, line personnel have the
authority to advise and make suggestions.
134. An advantage of a line-and-staff organization is that it provides people that advise and
assist line managers as they perform their jobs.
135. The matrix organization model brings together experts from different functional units of
the firm to work on specific projects.
136. The team experts in a matrix organization remain part of the traditional line-and-staff
structure.
137. A matrix organization produces an environment that discourages cooperation and
teamwork.
138. Team participants in a matrix organization model may report to two managers at one time.
139. A disadvantage of the matrix organization is the temporary nature of the teams.
140. Matrix organizations give managers flexibility in assigning people to projects.
141. Matrix organization structures provide for more efficient use of organizational resources.
142. A recent trend in organization models is the development of cross-functional, self-
managed teams of employees who work together on a long-term basis.
143. Cross-functional self-managed teams are groups of employees empowered to work with
suppliers and customers to develop new products and give great service.
144. Cross-functional teams serve as advisory committees offering their expertise to line
decision makers.
145. Cross-functional teams defy the trend toward customer-driven organizations.
146. Cross-functional teams consist of employees from different departments who work
together on a long-term basis.
147. Cross-functional teams avoid involving groups outside of the firm to ensure their plans are
not leaked to their competitors.
148. Cross-functional teams work best when the
voice of the customer
is brought into
organizations.
149. Cross-functional teams work well when leadership of the team is shared.
150. Including customers and suppliers on cross-functional teams violates the interests of
stockholders.
151. By structuring the company with cross-functional teams, there is a greater chance that a
business is more responsive to social trends affecting customer preferences.
152. A matrix team for an aerospace company may consist of a project manager, a finance
expert, a marketing specialist, a member of production, and two design engineers.
153. It is strategically not sensible for a firm to consider asking suppliers and customers to
join a cross-functional self-managed team that is testing iterations of future products.
154. One disadvantage of the matrix style of organization is that it is more difficult to keep
development projects on schedule. The model slows down the time from design to production,
and then to market.
155. Due to the competitive nature of companies that compete for the same customers, cross–
functional teams never consist of individuals from more than one firm.
156. Cross-functional teams that go beyond company boundaries share production
information but seldom market information.
157. Buzzoff Co. is a medium-sized organization, organized with well-defined lines of authority
and responsibility. Each employee reports to only one boss. The managers at Buzzoff complain
that they have no expert support staff available to offer legal advice. Lately opportunities are
slipping through the cracks due to inefficient long lines of communication. These characteristics
suggest that Buzzoff employs a matrix organization.
158. Julie is an attorney who works for Worldwide Food Science, Inc., who provides legal
advice and assistance to the firm’s managers. Julie’s job would be classified as a staff position.
159. Wizard Manufacturing makes small consumer electronics products 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.
160. Joel, an employee of the engineering department, was temporarily assigned to work with
a team of specialists from other departments to develop a new product. Upon completion of this
project, Joel returned to his position in the engineering department. This arrangement illustrates
the use of a cross-functional team.