Deck 3: The Formal Organisation

Question 1

An authoritarian leader-manager would be most likely to be found in an organisation with a:

A) matrix structure.
B) bureaucratic structure.
C) laissez-faire structure.
D) flat, horizontal structure.
E) None of these responses are correct.

Answer 1

B

Question 2

The social loafing effect refers to:

A) the tendency for talented staff members to rise to the top in organisations with a large number of employees.
B) the increased likelihood that employees will hide or not 'pull their weight' when working in a large group.
C) the tendency for skilled employees to join organisations with flatter organisational structures.
D) the tendency for employees to work harder and be more accountable when working in large groups.
E) the tendency for employees to work harder and be more accountable when working in small groups.

Answer 2

B

Question 3

Which of the following statements is true of bureaucracies?

A) They often have a matrix-style organisational structure.
B) They are characterised by vertical relationships, with knowledge concentrated at the top.
C) They are flat and flexible.
D) They encourage independence and decentralised decision making.
E) All of these responses are correct.

Answer 3

B

Question 4

For a financial planning business that offered its customers three distinct services - wealth creation, risk management planning and tax minimisation - the most appropriate organisation structure might be:

A) one designed around function.
B) one designed around customer type.
C) one designed around geographic locations.
D) one designed around product.
E) All of these responses are correct.

Question 5

A modern competitive organisation should:

A) be flexible and responsive to change.
B) be innovative.
C) have clear reporting lines and relationships.
D) have the ability to make good decisions quickly.
E) All of these responses are correct.

Question 6

The layers contained within an organisation's structure are depicted in its:

A) vision statement.
B) organisational chart.
C) organisational charter.
D) mission statement.
E) code of ethics.

Question 7

An organisational structure can promote economies of scale for an organisation if:

A) services and back-office functions are performed for as wide a base as possible.
B) each task is specialised and can only be performed by one person.
C) workflows encourage duplication and overlap of tasks and functions.
D) each department or area carries out its own administrative functions.
E) the organisation has a large number of employees.

Question 8

What shape has traditionally been used for the design of organisational structures?

A) Circle
B) Square
C) Inverted pyramid
D) Pyramid
E) Diamond

Question 9

An organisation is more likely to outsource line work than staff positions if:

A) line work creates the most real value to the organisation.
B) line work and staff positions create equal real value to the organisation.
C) there is little real value of either the line work or staff positions.
D) staff, not line positions, add the most real value to the organisation.
E) it is a service-based organisation.

Question 10

To create capabilities-based competitive advantage, what structural characteristics must an organisation display?

A) Hierarchical and top-down decision making
B) Bureaucratic and process-controlled decision making
C) Flat and fluid decision making
D) Centralised control and decision making
E) Traditional production-line specialisation of roles in which change is difficult

Question 11

Organisation charts show:

A) the levels in an organisation's hierarchy.
B) the scopes of control of the various managers within an organisation.
C) the links between employees and functions in an organisation.
D) the reporting relationships between employees and managers in an organisation.
E) All of these responses are correct.

Question 12

If a worker reported to both a functional manager (vertically) and a project manager (horizontally), then they would most likely be part of a:

A) vertical structure.
B) matrix structure.
C) hybrid structure.
D) bureaucratic structure.
E) None of these responses are correct.

Question 13

For an organisation like Nestlé, organising by geographic location could make sense because:

A) it would allow the organisation to utilise the cheaper labour offered in other countries.
B) the organisation has many different production plants in one country.
C) it would allow the organisation to customise its offerings to local preferences and regulations.
D) the organisation is foreign-owned.
E) All of these responses are correct.

Question 14

Mass production, which came into existence at the time of the industrial revolution, is an example of an organisational structure based on:

A) function.
B) market type.
C) geographic location.
D) product type.
E) matrix design.

Question 15

The removal of layers from organisational hierarchies in the 1980s and 1990s, which resulted in smaller and flatter organisations, was known as:

A) rationalisation.
B) upsizing.
C) hybridisation.
D) downsizing.
E) mechanisation.

Question 16

An organisation with clusters of multi-skilled, team-based employees, each of them with broad job responsibilities, is likely to be:

A) tall and vertical.
B) flat and open.
C) hierarchical and compartmentalised.
D) hierarchical and flat.
E) None of these responses is correct.

Question 17

Which of the following is an organisation in which a matrix structure would be inappropriate?

A) A civil engineering business
B) An architecture firm
C) A construction company
D) A government department with a hierarchical structure and strict lines of reporting
E) All of these responses are correct.

Question 18

In a flatter organisational structure, a manager will be more likely to:

A) directly supervise fewer employees.
B) indirectly supervise fewer employees.
C) directly supervise a greater number of employees.
D) indirectly supervise a greater number of employees.
E) supervise no employees.

Question 19

Which of the following statements describes the relationship between workers in line positions and workers in staff positions?

A) Workers in line positions serve or advise workers in staff positions, whereas workers in staff positions produce goods or provide services.
B) Workers in line positions work independently of workers in staff positions.
C) Workers in staff positions serve or advise workers in line positions, whereas workers in line positions produce goods or provide services.
D) Workers in both line positions and staff positions serve or advise workers in line positions.
E) Workers in both line positions and staff positions produce goods or provide services.

Question 20

A flat organisational structure has:

A) many layers, with highly centralised decision making.
B) many layers, with highly decentralised decision making.
C) few layers, with highly centralised decision making.
D) few layers, with highly decentralised decision making.
E) Either few or many layers, but always with highly centralised decision making.

Question 21

While holistic organisations may be more fulfilling to work for, and add greater meaning to employees' lives, it is also likely that they will demand higher productivity and increased shareholder value from their employees in return.

Question 22

Which of the following statements is true of organisations with modern, flexible organisational structures?

A) Employees need to have a more strategic understanding of the organisation's vision and goals.
B) Employees need to have solid interpersonal skills.
C) Leader-managers need to develop a range of interpersonal and conceptual skills.
D) Leader-managers need to develop a range of strategic and leadership skills.
E) All of these responses are correct.

Question 23

One possible positive aspect of flatter, more decentralised organisations is:

A) that they are less rigid, and therefore better able to adapt to changing conditions.
B) that their open lines of communication mean that information circulates around the organisation more freely, thus creating greater efficiency.
C) that the greater autonomy given to employees encourages creativity, flexibility and innovation.
D) that the greater empowerment enjoyed by employees provides them with greater job satisfaction.
E) All of these responses are correct.

Question 24

In a decentralised organisation, decision making is:

A) the responsibility of senior managers.
B) made via the agreement of all levels of management.
C) made by those who are closest to the core of the business' operations.
D) made by managers who 'virtually' manage teams of employees, but do not work as part of them.
E) delegated to middle management.

Question 25

Capabilities-based organisations measure their success on functional efficiency, rather than on process goals, thus improving productivity and profitability as well as customer and employee satisfaction.

Question 26

A multidisciplinary team will function least effectively when:

A) it can perform its role with a significant degree of autonomy.
B) members of the team have a shared sense of accountability.
C) the organisational structure is hierarchical.
D) innovation is allowed and encouraged.
E) a team-based philosophy is adopted to underpin a matrix or capabilities-based structure.

Question 27

Where an organisation overlays a core process onto a functional structure, or a functional structure onto a process structure, it is known as a hybrid structure.

Question 28

Which of the following would be likely to handle change most effectively?

A) Organisations that arrange their operations by product
B) Organisations that arrange their operations by function
C) Organisations that arrange their operations by geographic location
D) Bureaucracies
E) Process-based organisations

Question 29

Increased business complexity, capabilities-based competition, changing customer expectations, globalisation and the knowledge and information workers of the new economy mean that businesses have now need to link the relationships between people and functions:

A) horizontally, rather than vertically.
B) vertically, rather than horizontally.
C) both vertically and horizontally.
D) neither horizontally nor vertically.
E) None of these responses are correct.

Question 30

An organisation represented in the form of an atom, with a 'nucleus' of essential, core employees surrounded by 'electrons' of contractors and 'protons' of outsourced providers, is an example of:

A) a virtual structure.
B) a bureaucratic structure.
C) a hierarchical structure.
D) a functional structure.
E) None of these responses are correct.