QUIZ 2.2 - ORGANIZATIONAL STRUCTURE - ESSAY QUESTIONS - Post Your Answers Here...

QUIZ ANSWERS – 2.2 ORGANIZATIONAL STRUCTURE

MULTIPLE CHOICE

 

    1.    The __________ of a firm identifies responsibilities for each position and the relationships among positions within the firm.

a.	mission statement
b.	job specification statement
c.	tactical plan
d.	contingency plan
e.	organizational structure

 

 

ANS:    E    

 

    2.    A(n) __________ is a diagram that illustrates the interaction among responsibilities of a firm's employees.

a.	PERT diagram
b.	organization chart
c.	duty roster
d.	assignment spreadsheet
e.	operations chart

 

 

ANS:    B    

 

    3.    An organization chart demonstrates the firm's __________.

a.	informal structure
b.	grapevine
c.	strategic plan
d.	organizational structure
e.	operating plan

 

 

ANS:    D    

 

    4.    The __________ indicates who is responsible for the various tasks and activities a firm must perform.

a.	management tree
b.	chain of command
c.	formal roster
d.	contingency diagram
e.	mission statement

 

 

ANS:    B    

    5.    The __________ identifies the job positions to which all types of employees must report.

a.	informal organization
b.	communication diagram
c.	chain of command
d.	job description
e.	job specification

 

 

ANS:    C    

 

    6.    The __________ of a company normally attempts to coordinate all divisions and provide direction for the firm's business.

a.	primary supervisor
b.	personnel director
c.	office manager
d.	strategic planning committee
e.	president

 

 

ANS:    E    

 

    7.    The number of subordinates (employees) managed by each manager represents the __________.

a.	span of control
b.	degree of specialization
c.	division of labor
d.	unity of command
e.	decentralization principle

 

 

ANS:    A    

 

    8.    A wide span of control is most likely to be successful in a firm where __________.

a.	workers must be closely monitored
b.	workers perform a variety of complex tasks
c.	most of the earnings are paid out in dividends
d.	there are many layers of management
e.	many employees perform similar tasks

 

 

ANS:    E    

 

    9.    When an organization has many layers of management from the bottom of its structure to the top, it is referred to as a __________.

a.	stratified organization
b.	tall organization
c.	matrix organization
d.	top-down organization
e.	multi-disciplinary organization

 

 

ANS:    B    

 

    10.    Positions that are established to make decisions that achieve specific business goals are called __________.

a.	staff positions
b.	advisory positions
c.	supportive positions
d.	consulting positions
e.	line positions

 

 

ANS:    E    

 

    11.    Spirotex, Inc., is a company where each manager oversees a large number of employees, and as a result, the company has few layers of management. This suggests that Spirotex can be described as having a(n) __________ organizational structure.

a.	specialized
b.	indistinct
c.	stair-step
d.	short
e.	nonlinear

 

 

ANS:    D    

 

    12.    Employees in __________ positions provide support and give advice to the managers who make decisions to achieve specific business goals.

a.	staff
b.	decentralized
c.	line
d.	nonunionized
e.	centralized

 

 

ANS:    A    

 

    13.    Which of the following would be considered a line position at a manufacturing firm?

a.	Director of Computer Systems
b.	Director of Human Resources
c.	Payroll Director
d.	Production Manager
e.	Accounts Payable Manager

 

 

ANS:    D    

 

    14.    Staff positions are intended to enhance the decision-making capabilities of __________.

a.	advisory management
b.	line management
c.	consulting management
d.	supportive management
e.	centralized management

 

 

ANS:    B    

 

    15.    The Nocurite Company is a small manufacturing firm that has only a few employees. All managers have the authority to make decisions that affect the achievement of specific goals. The company cannot afford to hire additional employees to support and advise these managers. Nocurite's organizational structure would be classified as a __________.

a.	staff organization
b.	production-based organization
c.	customer-oriented organization
d.	line organization
e.	matrix organization

 

 

ANS:    D    

 

    16.    An organizational structure that includes line positions and staff positions, and assigns authority from higher-level management down to subordinates, is referred to as a(n) __________.

a.	line organization
b.	line-and-staff organization
c.	supportive organization
d.	matrix organization
e.	intrapreneurial organization

 

 

ANS:    B    

 

    17.    The __________ of a company is a set of executives who are responsible for monitoring the activities of the firm's president and other high-level managers.

a.	ways and means committee
b.	executive council
c.	board of directors
d.	certified board of accountants.
e.	board of managerial oversight

 

 

ANS:    C    

 

    18.    The __________ has/have the authority to approve or disapprove key business proposals made by a firm's managers, such as acquisitions or layoffs.

a.	board of directors
b.	supervisory council
c.	middle managers
d.	first-line managers
e.	plant managers

 

 

ANS:    A    

 

    19.    Those board members who are also managers of the same firm (such as the CEO) are referred to as __________.

a.	outside board members
b.	inside board members
c.	external board members
d.	professional board members
e.	outward board members

 

 

ANS:    B    

 

    20.    Joan is a retired attorney who operated her own law office for many years. Although she no longer works full-time as an attorney, Joan serves on a board that meets every few months to evaluate the performance of the president and other top executives for the Bodikkins Corporation and to approve or disapprove of key business proposals made by these executives. Joan's position with Bodikkins is that of a(n) __________.

a.	untenured board member
b.	inside board member
c.	member of the certified management board
d.	CPA
e.	outside board member

 

 

ANS:    E    

 

    21.    Which of the following statements about the board of directors of a firm is most accurate? The board of directors of a firm __________.

a.	is expected to take an active role in overseeing the firm's day-to-day activities
b.	is elected by the firm's employees
c.	usually is a figurehead committee with no real authority to influence important decisions
d.	is selected by the firm's shareholders to represent their interests
e.	must exclude any employees in the firm who are in top management positions

 

 

ANS:    D    

 

    22.    A board of directors may be more willing to take action if most of its members are __________.

a.	inside board members
b.	temporary board members
c.	outside board members
d.	interior board members
e.	unionized board members

 

 

ANS:    C    

 

    23.    When an outside director is related to the CEO of a company, the director may be subject to __________.

a.	external auditing
b.	special treatment by company managers
c.	monitoring by other board members
d.	conflicts of interest
e.	dismissal from the board

 

 

ANS:    D    

 

    24.    Which of the following is not an example of a conflict of interest for a firm's director?

a.	vice president is a key decision maker of the firm
b.	owner of a company that supplies of materials to the firm
c.	consultant who does a substantial amount of work for the firm
d.	CEO of a nonprofit that receives donations from the firm
e.	local business owner who has a membership to the Chamber of Commerce

 

 

ANS:    E    

 

    25.    Which of the following companies was recently found to have numerous conflicts of interests among board members when it became known that the firm's financial statements were misstated?

a.	IBM
b.	Amazon.com
c.	Enron
d.	Continental Airlines
e.	Intel

 

 

ANS:    C    

 

    26.    A board committee whose primary duty is to assess the knowledge and skills of existing board members is known as the __________ committee.

a.	compensation	c.	nominating
b.	audit	d.	assessment

 

 

ANS:    C    

 

    27.    Who ensures that all departments follow the firm's guidelines and procedures?

a.	Top Manager
b.	Internal Auditor
c.	Chief Oversight Officer
d.	President of the Board of Directors
e.	Chief Executive Officer

 

 

ANS:    B    

 

    28.    Which of the following is not a common employee procedure that would usually be reviewed by the internal auditor?

a.	hiring of new employees
b.	safety maintenance
c.	responding to customer complaints
d.	evaluating employees
e.	adding new features to current products

 

 

ANS:    E    

 

    29.    When a firm concentrates most authority among its high-level managers, the organization is said to be __________.

a.	decentralized
b.	standardized
c.	indivisible
d.	unified
e.	centralized

 

 

ANS:    E    

 

    30.    Garrett is a middle manager who is responsible for day-to-day tasks at his company, but only high-level managers are allowed to make important decisions. Garrett works under which type of authority?

a.	decentralized	c.	sovereignty
b.	autonomy	d.	centralized

 

 

ANS:    D    

 

    31.    When authority is spread among several divisions or managers it is __________.

a.	ineffective
b.	decentralized
c.	harmful to morale
d.	standardized
e.	articulated

 

 

ANS:    B    

 

    32.    __________ is an extreme form of decentralization in which corporate divisions can make their own decisions and act independently.

a.	Consolidation of authority
b.	Unified command
c.	Retro-centralization
d.	Autonomy
e.	Matrix management

 

 

ANS:    D    

 

    33.    An advantage of decentralization is that it __________.

a.	increases the height of the organization
b.	reduces the span of control of most managers
c.	accelerates the decision-making process
d.	ensures that only experienced managers are allowed to make key decisions
e.	allows most employees to work at home rather than at the office

 

 

ANS:    C    

 

    34.    Which of the following is not an advantage of a decentralized organizational structure?

a.	managers may be assigned excessive responsibilities
b.	it reduces the firm's operating expenses
c.	morale of employees will be improved
d.	in technology firms, managers may be more creative and innovative
e.	managers are able to gain more experience in decision making

 

 

ANS:    A    

 

    35.    Disadvantages to decentralization include all of the following except __________.

a.	may force managers to make decisions even if they lack experience	c.	may force managers to be assigned excessive amounts of responsibility
b.	may force managers to shorten the decision-making process	d.	may force managers to make decisions even if they don't want to

 

 

ANS:    B    

 

    36.    Erin works at a manufacturing plant where first-level supervisors make decisions and act independently. Top management isn't even discussed during team meetings. Which type of authority does the plant utilize?

a.	centralization	c.	autonomy
b.	contingency	d.	matrix organization

 

 

ANS:    C    

 

    37.    One way to prevent division managers from making spending decisions that benefit their own interests rather than the firm's interests is by having __________.

a.	decentralized management of funds.
b.	local autonomy of funds.
c.	independent use of funds.
d.	centralized management of funds.
e.	diversified use of funds.

 

 

ANS:    D    

 

    38.    When firms attempt to cut expenses by eliminating job positions, they are engaged in __________.

a.	pro-forma management
b.	centralization of the management structure
c.	downsizing
d.	standardizing work procedures
e.	worker attrition

 

 

ANS:    C    

 

    39.    One way downsizing can affect a company is to __________.

a.	create a more centralized management structure
b.	encourage a greater degree of specialization
c.	create organizational structures with fewer layers of management
d.	reduce the responsibilities of lower-level employees
e.	allow the board of directors to take a more "hands-on" approach to management

 

 

ANS:    C    

 

    40.    When a company experiences downsizing, which of the following is most likely to occur?

a.	employees become less specialized in order to maintain diverse skills	c.	creates a narrow span of control
b.	increased layers of management across the board	d.	less attention on customer service in order to meet production demands

 

 

ANS:    A    

 

    41.    Two common methods for revising the organizational structure to obtain employee input are __________.

a.	matrix organizations and intrapreneurship
b.	global organizations and universal organizations
c.	proprietary organizations and entrepreneurship
d.	radial organizations and symmetric organizations
e.	chain-managed organizations and redistributive organizations

 

 

ANS:    A    

 

    42.    Jill normally works in her firm's marketing department. However, she now spends part of each workweek away from her regular marketing duties, working instead with employees from the finance and production departments to select new information management software for the company. The rest of the workweek she still reports to the vice-president of marketing and performs her regular duties. Jill and the other employees involved in software selection are participating in a __________.

a.	line organization
b.	line-and-staff organization
c.	matrix organization
d.	staff organization
e.	functional organization

 

 

ANS:    C    

 

    43.    A disadvantage of a matrix organization is that it __________.

a.	discourages employees from sharing ideas
b.	cannot be implemented in service organizations
c.	encourages workers to become so focused on the objectives of their own department that they can lose sight of the overall organizational objectives for the firm
d.	causes workers to feel left out of the decision-making process
e.	takes workers away from their regular duties, giving them less time to perform their normal tasks

 

 

ANS:    E    

 

    44.    The main purpose of intrapreneurship is to __________.

a.	find ways to reduce risk
b.	set acceptable standards of performance
c.	encourage innovation
d.	advise people in staff positions
e.	support line decisions

 

 

ANS:    C    

 

    45.    The main difference between entrepreneurship and intrapreneurship is that intrapreneurs __________.

a.	are employees of a firm while entrepreneurs typically are owners of a firm
b.	supply their own funds while entrepreneurs work with borrowed funds
c.	work in foreign markets while entrepreneurs work in domestic markets
d.	are independent contractors while entrepreneurs are agents
e.	own stock in their company while entrepreneurs have no ownership in their company

 

 

ANS:    A    

 

    46.    Top managers at Megabux want to encourage more creative thinking and innovation, and have identified Betty as one of their more creative employees. They have decided to encourage Betty's creativity and have assigned her the responsibility of developing new ideas. She is rewarded with bonuses when her ideas benefit the firm. The position Megabux has given Betty indicates that it is encouraging __________.

a.	extrapreneurship
b.	entrepreneurship
c.	intrapreneurship
d.	ultrapreneurship
e.	Theory X approach to management

 

 

ANS:    C    

 

    47.    The __________ is an informal communications network within an organization that develops as the result of employee interaction over time.

a.	grapevine
b.	organizational matrix
c.	employee-centered network
d.	organizational hierarchy
e.	local area network

 

 

ANS:    A    

 

    48.    One benefit of an informal organization is that it __________.

a.	prevents the spread of unfounded rumors
b.	helps managers maintain control over the workers they supervise
c.	can speed up the completion of tasks by allowing employees to substitute for one another
d.	prevents the spread of unfavorable information, thus improving morale
e.	can save the firm money by allowing it to eliminate its formal organizational structure

 

ANS:    C    

 

    49.    Dina just began employment at a company that features an informal organizational structure. Although she appreciates a relaxed communications network, what might be a disadvantage?

a.	she may be asked to provide informal feedback	c.	employees at her company may need to substitute for each other
b.	she may obtain incorrect information about the company	d.	information travels quickly from the bottom to the top of the organization

 

ANS:    B    

 

    50.    One possible problem with a firm's informal organization is that it __________.

a.	is difficult to establish
b.	may spread incorrect or unfavorable information about the firm
c.	makes it difficult for employees to form lasting friendships with co-workers
d.	causes workers to become less satisfied with their jobs
e.	gives managers too much authority

 

 

ANS:    B    

 

    51.    Which of the following is not an advantage of the informal organization structure?

a.	ensures tasks will be done on time because employees can get answers to questions more quickly
b.	employees will have greater job satisfaction
c.	informal communication occurs among employees on different levels
d.	friendships among employees develop
e.	information that has an adverse impact travels quickly throughout the organization

 

 

ANS:    E    

 

    52.    When high-level managers are developing or revising an organizational structure, their first step is to identify all necessary tasks and responsibilities. The next step is to __________.

a.	write the organization's mission statement
b.	obtain the financial resources needed to finance the organizational effort
c.	select the board of directors who will oversee the actual organizational structure
d.	departmentalize the tasks and responsibilities
e.	identify work schedules for each employee

 

 

ANS:    D    

 

    53.    Which of the following statements about departmentalization is most accurate?

a.	departmentalization is an organizational strategy that is very useful for small firms, but has little relevance for larger firms
b.	there are several ways to departmentalize, and the best manner to do so depends on the specific characteristics of the firm
c.	departmentalizing by product is often the best way for small firms to improve their efficiency
d.	departmentalization by function works best for large firms that produce and distribute many products
e.	although all firms must departmentalize in order to define their organizational structure, the manner in which they do so has little effect on their operations

 

 

ANS:    B    

 

    54.    Three of the more popular methods of departmentalizing are by function, product and __________.

a.	location
b.	motivation
c.	monetary incentive
d.	perspective
e.	seniority

 

 

ANS:    A    

 

    55.    Expenses involved in the production of each product can be more easily estimated when a firm is departmentalized by __________.

a.	function
b.	geographic location
c.	product
d.	span of control
e.	span of management

 

 

ANS:    C    

 

    56.    The Tippist Company is a small firm that produces only a few products. It has departmentalized its structure by organizing workers according to the tasks they perform and the responsibilities they have. For example, all employees involved in marketing are included in the same department. This strategy is an example of departmentalizing by __________.

a.	function
b.	action
c.	relevance
d.	job analysis
e.	job title

 

 

ANS:    A    

 

    57.    A company that produces only one product with most likely benefit from __________ departmentalization because the finance, marketing and production divisions are separated.

a.	product	c.	location
b.	customer	d.	function

 

 

ANS:    D    

 

    58.    When an airline creates a separate reservations division that focuses exclusively on group trips, the airline is departmentalizing by __________.

a.	customer	c.	product
b.	function	d.	location

 

 

ANS:    A    

 

    59.    Since General Motors owns Buick, Cadillac and Chevrolet, the company departmentalizes by __________, so that each brand has its own marketing, finance and production divisions.

a.	function	c.	product
b.	location	d.	customer

 

 

ANS:    C    

 

    60.    For small- and medium-sized firms, a drawback of departmentalizing by product is that it would __________.

a.	overburden workers by assigning them too many tasks to perform
b.	create too much reliance on automation
c.	alienate workers who want to move into management positions
d.	result in an inefficient use employees and thus increase expenses
e.	make it difficult for employees to form an informal organization

 

 

ANS:    D    

 

    61.    A company is most likely to find departmentalization by location to be an attractive organizational strategy if it __________.

a.	is relatively small and produces only one or two products
b.	has only a small number of retail customers
c.	wants to encourage entrepreneurship
d.	has recently downsized
e.	has corporate customers in several locations that frequently buy a variety of the firm's products

 

 

ANS:    E    

 

    62.    Accounting firms often departmentalize by __________ in order to provide their clients with convenient access to regional offices.

a.	function	c.	customer
b.	location	d.	product

ANS:    B    

 

    63.    Most multinational corporations departmentalize their foreign operations by __________.

a.	function
b.	tax code
c.	political structure
d.	location
e.	product

 

ANS:    D    

 

TRUE/FALSE

 

    1.    Though firms differ considerably in the size and scope of their operations, all firms have similar organizational structures.

ANS:    F    

 

    2.    The organizational structure indicates the chain of command, which identifies the job positions that all types of employees must report to.

ANS:    T    

 

    3.    A wide span of control works best in organizations where a highly diverse set of complex tasks is performed by workers with specialized skills.

ANS:    F    

 

    4.    Workers in staff positions are empowered to make decisions intended to achieve specific organizational goals.

ANS:    F    

 

    5.    The Production Manager would be a staff position in a manufacturing firm.

ANS:    F    

 

    6.    Board members who are also managers of the same firm are called 'outside board members'.

ANS:    F    

 

    7.    If a board member is employed by a nonprofit company that receives large donations from the firm, that board member is said to have a conflict of interest.

ANS:    T    

 

    8.    A board of directors may be more willing to take action if most of its members are outside directors.

ANS:    T    

 

    9.    In general, the board of directors maintains involvement with day-to-day activities of the company.

ANS:    F    

 

    10.    The Internal Oversight Officer is responsible for ensuring that all department employees follow the firm's guidelines and procedures.

ANS:    F    

 

    11.    One disadvantage of decentralization is that some managers may be making major decisions even though they lack experience.

ANS:    T    

 

    12.    An advantage of decentralization is that it can accelerate the decision-making process within an organization.

ANS:    T    

 

    13.    Decentralization has contributed to innovation at many technology companies, where managers have become more creative.

ANS:    T    

 

    14.    Downsizing typically causes the span of control for managers to become narrower.

ANS:    F    

 

    15.    Because of downsizing, many organizational structures now have a wider span of control.

ANS:    T    

 

    16.    An advantage of the matrix approach is that it brings together employees who can offer insight from different perspectives.

ANS:    T    

 

    17.    A disadvantage of the matrix approach is that an employee may not feel responsible because responsibilities are assigned to teams of several employees.

ANS:    T    

 

    18.    A goal of intrapreneurship is to encourage employees to come up with new ideas.

ANS:    T    

 

    19.    Intrapreneurships allow employees enough time to complete their normal everyday tasks, as well as concentrate on innovation.

ANS:    F    

 

    20.    An advantage of the informal organizational structure is that it prevents incorrect or unfavorable information about the organization from spreading among employees.

ANS:    F    

 

    21.    When companies departmentalize by function, they are referring to employee functions.

ANS:    T    

 

    22.    In product departmentalization, tasks and responsibilities are separated according to type of product produced.

ANS:    T    

 

    23.    Separation by product requires that employees keep track of several different products instead of focusing on one single product.

ANS:    F    

 

    24.    In recent years, some multinational corporations have begun to develop a board of directors that has international business experience.

ANS:    T