Deck 8: Structuring Organizations for Todays Challenges

Question 1

One reason to reorganize is to become more competitive.

Answer 1

True

Question 2

As depicted in the Reaching Beyond our Borders, box, "General Electric Looks for More Profits", in order to compete globally, corporate strategy should not try to match the performance of competitors.

Answer 2

False

Question 3

Reorganizing in order to compete better may require a business to reassign tasks.

Answer 3

True

Question 4

In its effort to reorganize its floor space, Backstreet Books decided to eliminate seating space in its stores in order to make room for bookshelves due to growing interest in books about how to "go green". This company's effort is an example of how a firm may reduce its emphasis in one product line in order to serve customer preferences and trends.

Question 5

Looking at a traditional organization chart, you will view who reports to whom; you will have a sense of each person's authority and responsibility, and the type of work that they perform for the organization.

Question 6

One key to organizational success is to go back to basic principles and build the business on a sound foundation.

Question 7

The success of the firm often depends on assigning the right tasks to the right person.

Question 8

Organizing the structure of the company means deciding how many jobs need to be done and who is responsible for doing them.

Question 9

Correctly structuring a business organization allows managers to avoid delegating responsibility and authority to employees.

Question 10

The process of creating individual departments to do specialized tasks is called departmentalization.

Question 11

An organization chart shows who is accountable for the completion of specific work and who reports to whom.

Question 12

Reorganizing in order to compete better may require a firm to reduce its number of business units.

Question 13

Departments are functional units within the business such as sales, accounting, finance, and marketing.

Question 14

Division of Labor refers to deciding how many jobs must be accomplished and then dividing them up amongst the labor force.

Question 15

Reorganizing in order to compete better may require a business to reduce its labor force.

Question 16

The process of setting up individual departments to do specialized tasks is called job specialization.

Question 17

Small business organizations lack the size required to reap the benefits of labor specialization.

Question 18

In a capitalist economy, organizations seldom reorganize due to changing markets.

Question 19

Division of labor is difficult to achieve in small businesses.

Question 20

Managing a growing business often requires managers to create departments to accomplish various tasks.

Question 21

The driving force behind the change in business organizations is the change in consumer expectations.

Question 22

Weber believed that large organizations required everyone to follow the established rules and guidelines precisely.

Question 23

Alicia dreams of opening her own restaurant and knows that she will need to organize her business. Organizing begins with determining the work to be done.

Question 24

Fayol believed that managers should treat employees and peers with respect and justice.

Question 25

Weber was critical of bureaucrats because he felt they undermined the efficiency of the organization.

Question 26

When Eric Schmidt joined Google™, one of the most successful companies of this decade, he tackled the organization function head-on. In speaking at a large conference with Google founders, Sergey Brinn and Larry Page, he commented that Google was running pretty well, "it just needed a little structure." Schmidt was referring to basic organization principles such as division of labor, specialization, and getting the departments up and running.

Question 27

Recent changes in the organizational structure of businesses are intended to facilitate management of the firm.

Question 28

Fayol believed that the amount of decision-making power vested in top management should be the same in all situations.

Question 29

Weber promoted the idea of the pyramid-shaped organization structure for large businesses.

Question 30

One of Fayol's principles suggests that managers should have the right to give orders and expect others to follow.

Question 31

Max Weber's principles of organization were similar to those of Henri Fayol.

Question 32

Fayol's principles suggest that the goals of the firm are less important than the goals of individual workers.

Question 33

Fayol's principle of esprit de corps says that employees should be divided into small groups that can be directed efficiently by a single manager.

Question 34

As indicated in the Making Ethical Decisions box titled, "Safety versus Profit", organization decisions that affect profits in a negative way should be avoided at all cost.

Question 35

According to Fayol's principle of Authority, if you have authority you also have responsibility. Topic: The Development of Organization Design

Question 36

To better organize his landscaping business, Frank divides each job into several parts. One part is excavation and removal of old landscaping, the next part is design, followed by purchasing, and the last part is installation of new plants. If he assigns a different employee to each part, this action would be an example of departmentalization.

Question 37

Fayol's principle of the division of labor says that functions should be divided into areas of specialization such as production, marketing, and finance.

Question 38

Henri Fayol and Max Weber are best known for their contributions to accounting theory.

Question 39

Weber had a great deal of faith in managers. He was confident that a firm would do well if employees simply did as they were told.

Question 40

Clear communication between workers and keeping order in materials and people are included in Fayol's principles.

Question 41

A bureaucracy empowers employees to quickly respond to customers' wants and desires.

Question 42

Weber was a strong proponent of bureaucracy.

Question 43

A bureaucracy is an organization with many layers of managers who set rules and regulations and oversee all decisions.

Question 44

An organizational hierarchy establishes one person at the top of an organization.

Question 45

A bureaucratic style of organization is slow when responding to change.

Question 46

A hierarchy requires many top managers, but only a few middle managers.

Question 47

Bureaucratic organizations establish rules and regulations that everyone is expected to follow.

Question 48

According to Weber, a bureaucrat is a middle manager whose job is to implement top management's orders.

Question 49

Bureaucratic organizations are structured to empower employees and please customers.

Question 50

Weber believed that employees should be empowered to make their own decisions.

Question 51

Max Weber believed that promotion should be based solely on seniority.

Question 52

Bureaucratic organizations are not very responsive to customers.

Question 53

Max Weber's organizational theories require an educated work force to operate efficiently.

Question 54

The basic idea behind the organization design of Fayol and Weber was that management wanted to control workers.

Question 55

A bureaucracy is designed to be customer focused.

Question 56

Job descriptions are an important part of Max Weber's organizational theory.

Question 57

Empowerment works only when employees are given the proper training and resources to respond.

Question 58

A chain of command is a line of authority that moves from the lowest level of the hierarchy to the top.

Question 59

Some business organizations still follow the 1940s organizational theory of Max Weber.

Question 60

The design of a bureaucratic organization assumes a well-educated workforce.

Question 61

Antonio works in the accounting department of a large firm. This is an example of Fayol's division of labor concept.

Question 62

As organizations grew, the use of Fayol's principles led to rigid organizations that didn't always respond quickly to consumer requests.

Question 63

The degree to which an organization allows lower level managers to make decisions determines the degree of decentralization.

Question 64

When we experience economies of scale this means that as production levels rise (we make more of something), the cost of supplies and cost of labor that goes into the production, goes down.

Question 65

Sam supervised a group of people in a very large organization. The refrigerator in the lunchroom stopped functioning. Although he started the paperwork on the day it died, the refrigerator request went out for bid; two middle managers needed to approve it; and, the purchasing director had final approval. The refrigerator arrived six months later. Max Weber would have approved of the detail and documentation Sam's company accumulated to back-up the purchase.

Question 66

An advantage of decentralized authority is that those individuals closest to the customers and more familiar with local conditions make decisions.

Question 67

Bryce is a manager at a car seat manufacturing company. He believes that it is very important and less confusing if each worker has only one boss. Bryce's view is consistent with Fayol's unity of command principle.

Question 68

Most businesses adopt a bureaucratic organization in order to speed up their decision making process.

Question 69

Kate holds a middle management position with a large corporation. She prefers to involve her subordinates in decision-making. She also favors allowing workers a fair amount of flexibility in how they do their jobs. Kitty's approach to management exemplifies the principles first popularized by Max Weber.

Question 70

In today's fast-paced business environment, Weber's bureaucratic ideas work well. These principles permit business to respond quickly to customer changes.

Question 71

Ping believes all workers should receive the same wage rate regardless of their position within a company. Ping's views on wages illustrate Fayol's principle of equity.

Question 72

Centralized authority provides for the delegation of authority to employees who are then better able to respond to customers' needs.

Question 73

As a result of rapidly changing markets and global differences in consumer tastes, more firms are considering centralized authority.

Question 74

As a new employee in a bureaucratic organization, Nancy can expect a great deal of independence and authority.

Question 75

Weber put great trust in the creativity, skills, and pride of employees and believed that managers should act more as coaches than as bosses.

Question 76

Rob is a middle manager who spends much of his time devising ways to implement the ideas of top management. Max Weber would have considered Rob a bureaucrat.

Question 77

At Dilly-Dally Sportswear Store a manager needs to be called to the front of the store and sign-off on every return that a cashier performs. The CEO continues this policy because he wants every manager to "look those customers right in the eye" and "stake their job on taking those items back." Clearly, Dilly-Daly empowers its employees to make decisions at their jobs.

Question 78

A weakened corporate image is one of the disadvantages of a decentralized business organization.

Question 79

Soprano Industries follows a chain of command with authority moving from the top of the hierarchy down to lower-level managers. The company is organized by department with established rules and regulations that everyone is expected to follow. All of these characteristics suggest that Soprano is an example of a bureaucratic organization.

Question 80

The purpose of Weber's and Fayol's principles was for the benefit of management, as opposed to pleasing customers.