Deck 6: Organizational Structure and Design

Question 1

A matrix structure consists of two organization structures superimposed on each other.

Answer 1

True

Question 2

Intensifying globalization has contributed to increased outsourcing; flatter,more flexible organizational structures; and increased integration.

Answer 2

True

Question 3

Companies in relatively stable and static environments can use rules effectively to achieve integration.

Answer 3

True

Question 4

A product structure reduces the duplication of the firm's functional resources.

Question 5

As a rule,formal organizations are highly centralized.

Question 6

A major principle in the relationship between organizational strategy and structure is that the structure should complement and leverage the strategy.

Question 7

A company is likely to use a "local approach" to doing business abroad if the benefits from location-specific differentiation and adaptation are significant and economies of scale are small.

Question 8

Liaison roles are designed to enhance the information flows between two or more groups within an organization.

Question 9

Organizational structuring is the process of assessing the organization's strategy and environmental demands and then determining the appropriate organizational design.

Question 10

In conditions of high task uncertainty and interdependence,values are a better integrating mechanism than goals.

Question 11

Multinational firms rarely employ a regional structure.

Question 12

Formal organizations often widen a supervisor's span of control.

Question 13

Organizational charts illustrate an organization's complete structure.

Question 14

In a low-networked structure,the quantity and magnitude of externally networked activities are limited.

Question 15

Firms with high foreign sales and highly diverse product lines frequently use a matrix structure.

Question 16

Environmental dynamism is the breadth and depth of differences and similarities in an organization's external environment.

Question 17

The appropriateness of a tall or flat organization is affected more by the internal environment than the external environment.

Question 18

If a domestic organization opens an international division,then the products sold by this division typically have broad appeal and there are relatively few customer differences across countries.

Question 19

In a functional structure,the firm is organized around specific products (or services)or related sets of products (or services).

Question 20

Organizational design is defined as the sum of the ways a firm divides its labor into distinct tasks and then coordinates them.

Question 21

Which of the following is the best example of cognitive differentiation?

A) At a civil engineering firm, some engineers specialize in construction engineering, while others specialize in environmental engineering.
B) An auto manufacturer produces a luxury automobile in order to enhance the image of its other vehicles.
C) At a shoe company, the product development department relies on marketing data to generate ideas for promising new products.
D) Accountants think about the organization's overall performance in terms of financial results, whereas marketers view performance in terms of customer satisfaction.

Question 22

ABC Corp.produces widgets.Timely delivery to XYZ Corp.is critical since the widgets are essential to the production of XYZ Corp.'s gadgets.This is an example of ________.

A) pooled interdependence
B) reciprocal interdependence
C) sequential interdependence
D) cross-functional interdependence

Question 23

The extent to which people in different units within an organization think about different things or about similar things differently is termed as ________.

A) task differentiation
B) interdependence
C) unity of command
D) cognitive differentiation

Question 24

As task uncertainty and interdependence increase,________ are a more effective coordination mechanism than ________.

A) goals; rules
B) rules; goals
C) rules; values
D) goals; values

Question 25

The degree to which an organization's new product-development team relies on the market research team for product ideas to investigate is termed as ________.

A) liaisoning
B) centralization
C) interdependence
D) formalization

Question 26

One of the driving forces behind the integration of tasks is ________.

A) outsourcing
B) interdependence
C) localization
D) unity of command

Question 27

Organizational ________ illustrate relationships among an organization's units and lines of authority.

A) charts
B) channels
C) contexts
D) paradigms

Question 28

________ occurs when the outputs of one group become the inputs of another group.

A) Pooled interdependence
B) Reciprocal interdependence
C) Cross-functional interdependence
D) Sequential interdependence

Question 29

________ occurs when several groups,that are largely independent in their functions,collectively contribute to a common output.

A) Pooled interdependence
B) Cognitive interdependence
C) Sequential interdependence
D) Reciprocal interdependence

Question 30

________ exists when two or more groups depend on one another for inputs.

A) Formalized interdependence
B) Pooled interdependence
C) Reciprocal interdependence
D) Sequential interdependence

Question 31

A construction company orders windows from one division of a manufacturing company and roofing from another division of the same company.To meet this customer's overall needs,the manufacturing company should exercise ________ interdependence.

A) intermittent
B) pooled
C) reciprocal
D) sequential

Question 32

________ is the degree to which one unit,or one person,must use the work or resources of another unit or person to accomplish tasks.

A) Differentiation
B) Formalization
C) Decentralization
D) Interdependence

Question 33

________ is the the process of assessing an organization's strategy and environmental demands and then determining the appropriate organizational structures.

A) Organizational design
B) Organizational chartering
C) Organizational structuring
D) Organization development

Question 34

When a firm decides to outsource its manufacturing operations,a ________ allows it to maintain close contact with the firms to which it is outsourcing the work.

A) division structure
B) network structure
C) functional structure
D) geographic structure

Question 35

Generally,the more ________ that exists within the organization,the more useful ________ are as an integration mechanism.

A) task independence; rules
B) task interdependence; rules
C) task independence; values
D) task independence; goals

Question 36

________ is the sum of the ways an organization divides its labor into distinct tasks and then coordinates them.

A) Organization development
B) Organizational design
C) Operations management
D) Organizational structure

Question 37

________ is the extent to which tasks are divided into subtasks and performed by specialists.

A) Decentralization
B) Differentiation
C) Formalization
D) Interdependence

Question 38

A ________ is a person who is either formally or informally designated to coordinate the activities across units or even sometimes across organizations.The role of this person is to build effective relationships between the groups involved.

A) line manager
B) boundary spanner
C) gatekeeper
D) functional manager

Question 39

________ is the extent to which various parts of organizations cooperate and interact.

A) Integration
B) Differentiation
C) Formalization
D) Decentralization

Question 40

What sort of interdependence exists when two or more groups within a company depend upon one another for inputs?

A) pooled
B) intermittent
C) reciprocal
D) sequential

Question 41

A manager in the promotion department of a record company would find it most difficult to use ________ for coordination and integration to implement concert cancellations due to weather,travel problems for the band,or any number of other unpredictable factors.

A) rules
B) liaisons
C) goals
D) values

Question 42

Japanese companies accomplish much of their decision making,communication,and control through informal,face-to-face meetings between people who do not have formal reporting relationships.This process is referred to as ________.

A) guanxi
B) tsubukan
C) inhwa
D) nemawasi

Question 43

A narrow span of control is advisable when ________.

A) employees perform similar jobs
B) job are complicated and require managerial input
C) employees are empowered
D) employees are highly skilled and knowledgeable

Question 44

Japanese multinational firms tend to operate as ________,announcing decisions from home offices to subsidiaries.European multinational operations tend to operate as ________,pushing decision-making authority to the lowest possible level.

A) centralized organizations; decentralized organizations
B) decentralized organizations; centralized organizations
C) functional organizations; geographic organizations
D) geographic organizations; functional organizations

Question 45

Because many organizational environments have become more dynamic,managers often respond by trying to "flatten" their organizational structures,often removing whole levels of hierarchy and people in the process.This process is often referred to as ________.

A) downsizing
B) cost cutting
C) leveling
D) layering

Question 46

Which of the following is NOT a characteristic of formalization?

A) narrow spans of control
B) clear lines of authority
C) dual chain of command
D) unity of command

Question 47

What is meant by the term unity of command?

A) the idea that the line of authority should be clear and direct
B) the idea that interdependence within a firm should be kept to a minimum
C) the idea that managers should have a limited span of control
D) the idea that every employee should have one and only one boss

Question 48

A ________ span of control throughout an organization will lead to a ________ organization structure with multiple reporting layers.

A) narrow; flat
B) narrow; tall
C) wide; tall
D) wide; diverse

Question 49

Ken Langley is a production supervisor in an automobile manufacturing firm.After evaluating Ken's managerial capabilities,some members of the senior management feel that average productivity would improve if more workers are assigned to him.However,some managers are skeptical about Ken's ability to handle more workers.Which of the following statements,if true,would weaken the argument favoring increased span of control?

A) Ken has a reputation of handling interpersonal conflicts effectively.
B) Performance reports from the last few years show that teams that were closely monitored had higher productivity.
C) Ken's team consists of highly experienced and skilled labor.
D) Market trends indicate that the demand for automobiles is expected to increase substantially over the next few years.

Question 50

In which of the following organizations is decision-making authority pushed down to its lowest possible level?

A) centralized organizations
B) decentralized organizations
C) integrated organizations
D) informal organizations

Question 51

A ________ is one that has multiple layers with significant vertical differentiation.

A) flat organization structure
B) decentralized organization structure
C) tall organization structure
D) simple organization structure

Question 52

Ken Langley is a production supervisor in an automobile manufacturing firm.After evaluating Ken's managerial capabilities,some members of the senior management feel that average productivity would improve if more workers are assigned to him.However,some managers are skeptical about Ken's ability to handle more workers.Which of the following statements,if true,would support the argument favoring increased span of control?

A) Ken's team consists of highly experienced and skilled labor.
B) The firm is looking to double its production capacity over the next two years.
C) Ken is receiving increasing complaints about interpersonal conflicts within the team.
D) Ken's team is highly dependent on his guidance, even on minor issues.

Question 53

The term bamboo ceiling refers to ________.

A) the exclusion of host nationals from strategic decision making in centrally controlled Japanese subsidiaries
B) the reluctance of Japanese managers to allow centralized decision making among their subordinates
C) the lack of information flow from the Japanese-owned subsidiaries in foreign countries back to headquarters in Japan
D) the tendency of Japanese firms to delegate decisions more frequently than European or American firms

Question 54

Pfizer,a pharmaceutical company,operates in over 40 countries around the world,and many of the larger-country units enjoy considerable freedom and autonomy.Thus,it can be said that Pfizer exemplifies a(n)________ mode of decision making.

A) centralized
B) decentralized
C) autocratic
D) unilateral

Question 55

The ________ specifies the number of employees reporting to a given supervisor.

A) organizational chart
B) unity of command
C) line of authority
D) span of control

Question 56

________ organizations tend to be slower at making decisions and responding to changes in the business environment.As a result,these organizations tend to be best suited to stable external environments.

A) Simple and dynamic
B) Static and decentralized
C) Flat and wide
D) Tall and formal

Question 57

The ________ consists of the unofficial but influential means of communication,decision making,and control that are part of the habitual way things get done in an organization.

A) grapevine
B) informal organization
C) information tunnel
D) interpersonal channel

Question 58

In the assembly line of an automobile manufacturer,the car engine is installed first.After this,the product is passed on to the next stage where it is fitted with the hood.The product then goes on to the third step in the process where the wheels are fitted.The above situation,where the finished product of one step becomes the raw material for the next,is an example of ________ interdependence.

A) pooled
B) sequential
C) reciprocal
D) task

Question 59

________ consists of the official and defined structures and systems related to decision making,communication,and control in the organization.

A) Functionalization
B) Differentiation
C) Formalization
D) Integration

Question 60

Why are "values" an important coordinating mechanism in conditions of high task uncertainty and interdependence?

A) They represent measurable outcomes and specify how to obtain them.
B) Those holding the same values will maintain standard operating procedures.
C) They establish guidelines for behavior and consequences in specific conditions.
D) Those holding the same values will all work toward the same outcomes while maintaining flexibility in how they are accomplished.

Question 61

A major disadvantage of a matrix structure is that ________.

A) it limits the flow of information throughout the organization
B) it reduces the quality of decision making
C) it does not make optimum use of a firm's human resources
D) it often makes performance evaluations more complex

Question 62

In a product structure,each product is treated as a ________; that is,the expenses related to a product are subtracted from the revenues generated by selling it.

A) profit center
B) cost center
C) core competency
D) functional division

Question 63

An advantage of the regional structure is that ________.

A) it usually fosters a strong sense of accountability for performance among managers
B) it reduces the likelihood of conflict and coordination difficulties
C) it reduces the duplication of functional resources across regions
D) it fosters competitive behavior among regions

Question 64

Companies that advocate unity of command would be least likely to adopt which organizational structure?

A) customer
B) division
C) functional
D) matrix

Question 65

Which of the following is true about functional structures?

A) It is one of the most complex structures.
B) It increases the duplication of the firm's functional resources.
C) It facilitates specialization of the firm's functional knowledge.
D) It leads to a broad view of the organization's overall goals.

Question 66

Which of the following is true regarding the customer structure?

A) It reduces the duplication of functional resources.
B) It decreases the firm's responsiveness to actions taken by competitors.
C) It often makes it difficult to coordinate between customer units and corporate objectives.
D) It is suitable when customers' needs and preferences are homogeneous.

Question 67

________ is the practice of taking a significant activity within the organization and contracting that activity out to an independent party.

A) Insourcing
B) Outsourcing
C) Homeshoring
D) Networking

Question 68

Which of the following statements characterizes a firm that operates within a "high-networked" structure?

A) It uses outside organizations for only a limited number of minor value chain activities.
B) It has little contact with firms to which work has been outsourced.
C) It owns and executes most of its primary and support value chain activities.
D) It has more value chain activities networked to external organizations than it owns and executes internally.

Question 69

A matrix structure ________.

A) is best suited to a changing and complicated business environment
B) simplifies the process of performance evaluation
C) increases organizational responsiveness to environmental changes
D) fosters a strong sense of accountability for performance among managers

Question 70

A ________ consists of two organizational structures superimposed on each other.As a consequence,one person essentially reports to two bosses.

A) divisional structure
B) functional structure
C) matrix structure
D) regional structure

Question 71

Which of the following is a characteristic of a product structure?

A) It maximizes economies of scale for functional areas.
B) It increases coordination among different product groups.
C) It reduces organizational responsiveness to market changes.
D) The performance of the firm's products is typically easier to evaluate.

Question 72

A ________ facilitates the use of modular products,each of which is different but which contain some of the same parts.Thus,modular parts are produced and assembled in different ways to produce several different products.

A) regional structure
B) customer structure
C) matrix structure
D) division structure

Question 73

Which of the following is a weakness of the regional structure?

A) It reduces the firm's responsiveness to unique changes in the market.
B) It usually fosters a weak sense of accountability for performance among regional managers.
C) It reduces the duplication of functional resources across regions.
D) It often creates cross-regional coordination difficulties.

Question 74

In which of the following ways are product and customer structures similar?

A) They both increase companies' ability to leverage global scale economies.
B) They both increase the international orientation of all managers.
C) They both boost responsiveness to changing market conditions.
D) They both result in ambiguous lines of authority.

Question 75

Which of the following structural combinations best depicts the U.S.military?

A) formal and decentralized
B) informal and decentralized
C) formal and centralized
D) informal and centralized

Question 76

SLPL Limited adheres to a strategy that allows managers to focus on core competencies or the activities that are most likely to yield competitive advantage.In doing so,SLPL outsources most of the activities in its value chain to other companies,retaining just a few elements.From the above example,it can be concluded that SLPL has a ________ structure.

A) high-networked
B) divisional
C) matrix
D) global product

Question 77

A bank organizes itself around the basic services it provides: personal banking,corporate and business banking,and rural banking.Each service group has its own finance,marketing,operations,and human resource management departments.The bank is using a ________.

A) functional structure
B) product structure
C) division structure
D) matrix structure

Question 78

Which of the following is true about a divisional structure?

A) Organizing various product families within a division can increase functional duplication.
B) It reduces economies of scale for the firm's functional activities.
C) Cross-regional coordination within product families and within the division is often easier.
D) It ensures that division objectives are well aligned with corporate objectives.

Question 79

Multinational firms usually use ________ structures when customer needs for a given product are similar throughout the international markets in which the firm participates.

A) global product
B) functional
C) divisional
D) multiproduct

Question 80

One of the major weaknesses of the ________ structure is that it often inhibits coordination and communication among different regions.

A) customer
B) functional
C) geographic
D) product