Deck 17: Organizational Design, Effectiveness, and Innovation

Question 1

Staff employees occupy formal decision-making positions within the chain of command.

Answer 1

False
Explanation: Line managers such as the president, the executive directors, and the various directors occupy formal decision-making positions within the chain of command.

Question 2

Closed systems are capable of self-correction, adaptation, and growth.

Answer 2

False
Explanation: An open system depends on constant interaction with the environment for survival. Open systems are capable of self-correction, adaptation, and growth, thanks to characteristics such as homeostasis and feedback control.

Question 3

An organization embodies coordination of effort, a common goal, division of labor, and hierarchy of authority.

Answer 3

True
Explanation: According to Chester I Barnard's classic definition, an organization is "a system of consciously coordinated activities or forces of two or more persons." Embodied in the conscious coordination aspect of this definition are four common denominators of all organizations: coordination of effort, a common goal, division of labor, and a hierarchy of authority.

Question 4

An open system depends on constant interaction with the environment for survival.

Question 5

The four basic dimensions of organizational structure are hierarchy of authority, division of labor, spans of control, and line and staff positions.

Question 6

A divisional structure allows the people in a division to become experts at making a particular type of product or serving the particular needs of their customer group or geographic area.

Question 7

Organizations defined by the traditional approach tend to have functional, divisional, and/or matrix structures.

Question 8

Organizations that focus on execution-as-learning enable their employees to collaborate by making information available when and where it is needed.

Question 9

Organizational theorists downplayed the environment as they used closed-system thinking to characterize organizations as either well-oiled machines or highly disciplined military units.

Question 10

Wider spans of control complement the trend toward greater worker autonomy.

Question 11

In a matrix structure, the vertical overlay represents a product line, brand, customer group, or geographic region and the horizontal overlay represents the functional departments.

Question 12

An organization chart is a graphic representation of formal authority and division of labor relationships.

Question 13

The self-serving bias leads to the inflated perception that management is better than it actually is.

Question 14

A learning organization is one that proactively creates, acquires, and transfers knowledge.

Question 15

An organization is a system of consciously coordinated activities or forces of two or more persons.

Question 16

The span of control indicates the division of labor within an organization.

Question 17

Generally, the narrower the span of control, the lower an organization's administrative costs is.

Question 18

Organizational design rarely contributes to an organization's success.

Question 19

A functional structure groups together activities related to outputs.

Question 20

According to the unity of command principle, each manager should handle only one employee.

Question 21

Like divisional organizations, hollow organizations tap people in particular specialties, who may be more expert than the generalists of a functional or vertical organization.

Question 22

Mechanistic organizations are flexible bureaucracies with lenient rules, broadly-defined tasks, and bottom-up communication.

Question 23

Instead of outsourcing parts of a product, a modular organization outsources its processes.

Question 24

When the environment is relatively stable and certain, the successful organizations tend to be organic.

Question 25

The goal accomplishment criterion relates to outputs while the resource acquisition criterion relates to inputs.

Question 26

Divisional structures decrease employees' focus on customers and products.

Question 27

According to the contingency approach to organization design, organizations tend to be more effective when they are structured to fit the demands of the situation.

Question 28

A matrix structure tries to combine the advantages of functional and divisional structures.

Question 29

Horizontal designs generally improve coordination and communication in organizations.

Question 30

As the organizations become more mechanistic, the intrinsic motivation of their members decreases.

Question 31

A functional structure can save money by grouping together people who need similar materials and equipment.

Question 32

The organizational effectiveness criterion of internal processes measures how effective an organization is in acquiring necessary factors of production such as raw materials, labor, or capital.

Question 33

Virtual organizations are companies outside a company created specifically to respond to an exceptional market opportunity that is often temporary.

Question 34

Decision making tends to be centralized in mechanistic organizations.

Question 35

Command-and-control communication characterizes the organic factory.

Question 36

In general, organic organizations have top-down communication patterns.

Question 37

Modular designs are the best fit when organizations have suitable partners they trust and when efficiency is very important.

Question 38

A hollow organization results from strategic application of the trend toward outsourcing.

Question 39

Organizations tend to be purely mechanistic or organic.

Question 40

Teamwork is a feature of organizations designed horizontally.

Question 41

Which of the following is true regarding line and staff positions?

A)Staff personnel occupy formal decision-making positions within the chain of command.
B)Line personnel are responsible for supplying background research to the staff personnel.
C)On an organizational chart, generally, line positions are connected by dotted lines.
D)On an organizational chart, generally, staff positions are indicated by solid lines.
E)The president and executive directors of a company are examples of line managers.

Question 42

A closed system is:

A)based on the concept of homeostasis.
B)capable of self-correction.
C)a self-sufficient entity.
D)able to adapt and grow.
E)dependent on the environment.

Question 43

Adam is a new product development manager for Hello.com, an Internet match-making service. He has only two employees reporting directly to him. From what you have read about organization charts, what do you know for sure?

A)His subordinates enjoy greater autonomy than others.
B)His subordinates take part in the decision-making process.
C)He has a narrow span of control.
D)His subordinates are not closely supervised.
E)He is encountering low administrative costs.

Question 44

According to the unity of command principle:

A)managers should have a narrow span of control.
B)each employee should report to only one manager.
C)staff positions should outnumber line positions.
D)the bureaucracy is the ideal organizational structure.
E)every organization should have an organization chart.

Question 45

A stakeholder audit enables management to identify all parties significantly impacted by the organization's performance.

Question 46

Innovation is not a static event.

Question 47

Excess personnel and tolerance of incompetence leads to organizational decline.

Question 48

The goal accomplishment approach to assessing the effectiveness of an organization is appropriate when inputs have traceable effects on outputs.

Question 49

_____ refers to the number of people reporting directly to a given manager.

A)Absorptive capacity
B)Cognitive complexity
C)Locus of control
D)Natural authority
E)Span of control

Question 50

Generally, an organization's strategic constituencies have similar interests.

Question 51

The internal process approach to assessing the effectiveness of an organization is appropriate when powerful stakeholders can significantly benefit or harm the organization.

Question 52

Historically, spans of control of _____ were considered best.

A)25 to 30
B)30 to 35
C)7 to 10
D)15 to 20
E)20 to 25

Question 53

Innovation "is the creation of something new that makes money; it finds a pathway to the consumer."

Question 54

Innovation can begin and sustain in an organization whose culture rarely supports experimentation.

Question 55

Organization theorists refer to coordination of effort, a common goal, division of labor, and a hierarchy of authority as the organization's:

A)value system.
B)technical system.
C)managerial system.
D)structure.
E)goal.

Question 56

Which of the following is true of spans of control?

A)Wider spans of control complement today's trend toward greater worker autonomy.
B)Organizational theorists agree that the ideal span of control is 10.
C)The narrower the span of control, the lesser the supervision.
D)The narrower the span of control, the lower the administrative costs.
E)The narrower the span of control, the greater the employee participation.

Question 57

An organization chart reveals an organization's:

A)line and staff positions.
B)suppliers.
C)customers.
D)relationship with the environment.
E)economic efficiency criteria.

Question 58

Innovation is a spur-of-the-moment thing in which an idea is hatched.

Question 59

The benefits of innovation are less likely to occur if the challenges of innovation and the seeds of innovation are not effectively integrated.

Question 60

An organization chart is:

A)a method in which new members of an organization are integrated into the organizational culture.
B)the illustration of how an organization mobilizes and sustains the process of change required to execute strategy.
C)a graphic representation of formal authority and division of labor relationships.
D)the diagram depicting the alignment of structure, process, and talent with the strategy of the business.
E)a map of a company's functions and the ways people organize themselves to help managers see competitive opportunities.

Question 61

In a divisional structure, the organization groups together activities related to:

A)hierarchy.
B)outputs.
C)skills.
D)tasks.
E)functions.

Question 62

An open system is:

A)a self-sufficient entity.
B)rarely capable of adaptation and growth.
C)seldom capable of self-correction.
D)dependent on the environment for survival.
E)characterized as a well-oiled machine.

Question 63

Efron & Co. have been active in the cell phone manufacturing business for the last two years and have been the market leaders for the last one-and-a-half years. Recently, its research and development department has suggested adding a few games to the phone that they say will attract people in the age group of 15 to 25 years. However, Charlotte, the head of the marketing department, declined to make any changes to the existing product, stating that the product was already a huge success so there was no need to make any changes to it. Charlotte is displaying a(n):

A)anchoring bias.
B)bandwagon bias.
C)congruence bias.
D)decision-making bias.
E)endowment bias.

Question 64

A functional structure groups together:

A)people who are experts at serving a particular need of the customers.
B)people who serve a particular geographic area.
C)people according to the specialized set of tasks they perform.
D)activities related to outputs.
E)people who are experts at making a particular type of product.

Question 65

An organization that proactively creates, acquires, and transfers knowledge and that changes its behavior on the basis of new knowledge and insights is known as a:

A)learning organization.
B)downsized system.
C)legacy organization.
D)closed system.
E)traditional organization.

Question 66

Barry is a manager in a cell phone manufacturing company. He assumed that the recent growth of profit was due to his excellent planning, without considering the fact there was marked reduction in the inflation rate. This is an example of a:

A)reverse halo effect.
B)self-serving bias.
C)contrast bias.
D)generalization effect.
E)halo effect.

Question 67

Which of the following structures combines functional and divisional chains of command to form a grid with two command structures?

A)Hollow structure
B)Modular structure
C)Matrix structure
D)Project structure
E)Product structure

Question 68

Which of the following is true of organizations designed horizontally?

A)The organization seldom allows its suppliers and customers to influence performance.
B)The people are organized into cross-functional teams.
C)The teams are organized around tasks rather than complete workflow processes.
D)The organization has a strict hierarchy.
E)The organization rarely provides any external expertise.

Question 69

Johnson & Co. has divided its employees according to the locations of the customers that they tend to. Thus, it has teams that cater to the urban areas, semi-urban areas, etc. Johnson & Co. is said to have a _____ structure.

A)functional
B)hollow
C)modular
D)virtual
E)divisional

Question 70

_____ is defined as the structures of accountability and responsibility used to develop and implement strategies, and the human resource practices and information and business processes that activate those structures.

A)Organizational chart
B)Organizational culture
C)Organizational psychology
D)Organizational assimilation
E)Organizational design

Question 71

A(n) ______ actively attempts to infuse the organization with new ideas and information by scanning the external environment and hiring new talent.

A)learning organization
B)traditional organization
C)legacy organization
D)closed system
E)downsized system

Question 72

A _____ is a group of people working together to collectively enhance their capacities to create results that they truly care about.

A)closed system
B)legacy organization
C)downsized system
D)traditional organization
E)learning organization

Question 73

A(n) _____ represents group members' shared, organized understanding and mental representation of knowledge about key elements of the group's relevant environment.

A)transactive memory system
B)team mental model
C)mental performance measurement
D)organizational design
E)systemic structure

Question 74

The _____ reflects the tendency to take more personal responsibility for success than failure.

A)self-serving bias
B)halo effect
C)reverse halo effect
D)contrast bias
E)generalization bias

Question 75

Learning organizations strive to:

A)increase structural barriers.
B)increase process barriers.
C)increase interpersonal barriers.
D)decrease information sharing.
E)learn from successes and failures.

Question 76

Smith & Co. has divided its employees into various groups like manufacturing, marketing, and finance. Smith & Johnson is said to have a(n) _____ structure.

A)entrepreneurial
B)project
C)hollow
D)modular
E)functional

Question 77

Which of the following is a characteristic of the horizontal organization?

A)They emphasize on internal expertise rather than external expertise.
B)They give less importance to suppliers.
C)They place a greater emphasis on teamwork.
D)They emphasize tasks.
E)They strictly adhere to the chain of command.

Question 78

Employees in a matrix structure report to two managers: one in charge of the function they perform and the other in charge of the project they are working on. This is a violation of the principle of:

A)absorptive capacity.
B)cognitive complexity.
C)locus of control.
D)unity of command.
E)span of control.

Question 79

A(n) _____ structure combines a vertical structure with an equally strong horizontal overlay.

A)network
B)matrix
C)bureaucratic
D)entrepreneurial
E)central

Question 80

Which of the following biases leads to the inflated perception that management is better than it actually is?

A)Congruence bias
B)Endowment bias
C)Decision-making bias
D)Anchoring bias
E)Bandwagon bias