Deck 15: Organization Design

Question 1

A cost leadership strategy is based on an organization's ability to provide a product or service at a lower cost than its rivals.

Answer 1

True

Question 2

A company organized based on product design has the benefit of permitting fast changes in a product line.

Answer 2

True

Question 3

In Learning from Experience: When Carl Buchan started Lowe's stores, he focused on major metropolitan markets serving populations of at least 500,000.

Answer 3

False

Question 4

In Across Cultures Competency: After purchasing Eureka in 2004, AB Electrolux discovered it would have to change Eureka's organizational design to achieve a viable global organization.

Question 5

A company division refers to a specialized function within an organization, such as human resources.

Question 6

Division of labor means that any employee is capable of completing any task.

Question 7

A(n) _____ shows the formal connections among various divisions and departments in a company.

A) organization chart
B) market study
C) sales forecast
D) mission statement

Question 8

In Change Competency: Sam Su of Kentucky Fried Chicken discovered that when doing business in China, you will rarely encounter government involvement.

Question 9

Organization design is the process of selecting a structure for the tasks, responsibilities, and authority relationships within an organization.

Question 10

Mechanistic management practices can be described as bureaucratic.

Question 11

The marketing department, sales team, and product development team work closely together to create, promote, and sell a product. This demonstrates the idea of integration.

Question 12

A hierarchy refers to the number of employees directly reporting to a single individual.

Question 13

Which environmental factor is Connie concerned with when she decides to create a fixed cost by establishing a long-term contract with the company that provides her jewelry company with fasteners?

A) competitor
B) supplier
C) customer
D) distributor

Question 14

In "Learning from Experience: Lowe's Companies, Inc." is trying to take advantage of which of these major trends in the marketplace?

A) opening more rural locations
B) focusing on consumer market and not the contract market
C) appealing to female urban shoppers
D) conducting service surveys through social media

Question 15

Raul would like to start his own company but knows he would need to staff areas for production, accounting, marketing, and human resources. Which part of organization design is he considering?

A) divisions
B) headquarters
C) groups
D) departments

Question 16

Mary Ellen checks with her manager to be sure she can purchase the new copier because her boss has the right to make this decision. In other words, her boss has accountability.

Question 17

In Teams Competency: At the Morning Star Company, job roles and responsibilities are defined by a managing director.

Question 18

Authority, responsibility, and accountability for a project are given to the supervisor when using organic management practices.

Question 19

____ are the environmental factors responsible for helping organizations deliver and sell their products.

A) Distributors
B) Customers
C) Competitors
D) Suppliers

Question 20

In Change Competency: Decentralization allowed the Joint Special Operations Command to provide information to the different units in a more efficient fashion as they worked to defeat Al-Qaeda.

Question 21

The process of identifying particular tasks and assigning them to a particular team for completion is called

A) fragmentation.
B) integration.
C) specialization.
D) differentiation.

Question 22

During the management meeting, Colin assigned the task of reviewing the competitor's product to the engineering team in charge of environmental projects because he was interested in the affect of the competitors' products on landfills. What is Colin relying on to get his information?

A) specialization
B) integration
C) fragmentation
D) differentiation

Question 23

A ____ strategy is based on the idea that a customer will be willing to pay a higher price for a unique experience that makes a product or service distinctive from the competition.

A) differentiation
B) product supply
C) focused
D) cost leadership

Question 24

In Change Competency: What tactic did Sam Su use in his marketing program to filter customers away from McDonald's and into his Kentucky Fried Chicken restaurant in China?

A) He added hamburgers and cheeseburgers to the KFC menu.
B) He developed a KFC mascot who dressed like a clown and juggled drumsticks.
C) He displayed the calorie and fat content for all menu items.
D) He created a combo menu and added entertainment to attract children and their families.

Question 25

Which type of strategy is designed to help an organization target a specific niche in an industry?

A) product supply
B) differentiation
C) focused
D) cost leadership

Question 26

Most large companies have separate departments for human resources, accounting, product development, marketing, sales, etc. These separate departments each do smaller tasks that help the company run and are an example of

A) integration.
B) division of labor.
C) cognitive dissonance.
D) differentiation.

Question 27

Which of these practices is evident with an organic management practice?

A) tasks are highly specialized
B) communication and decision making are both vertical and horizontal
C) hierarchical structure of control, authority, and communication
D) specific roles are assigned to each employee

Question 28

Drew and Igor work in the corporate offices of a major grocery store chain. Drew is responsible for payroll for more than 60,000 employees and Igor oversees store operations on the West Coast. Drew and Igor have specialized roles in the company which exemplifies the concept of

A) fragmentation.
B) integration.
C) specialization.
D) differentiation.

Question 29

What is the key to success when a company adopts a focused strategy?

A) lower costs than all other competitors
B) customer loyalty
C) a lack of competition
D) being the first-mover into the market

Question 30

Maria enjoys her job because she gets the opportunity to work on many different projects based on the current needs of the company, and she and her coworkers are included in the decision-making process. Which type of management practice does Maria's company use?

A) tailored
B) fragmented
C) mechanistic
D) organic

Question 31

____ refers to ways various units in an organization coordinate their work to achieve a common goal.

A) Integration
B) Differentiation
C) Specialization
D) Fragmentation

Question 32

A company that relies on ____ management practices has specific roles designated for each employee, maintains a hierarchical structure of control, and communication stems from the top-down.

A) mechanistic
B) fragmented
C) organic
D) tailored

Question 33

Nordstrom department stores are known for their extravagant shoe departments, luxurious customer restrooms, and other high-cost frills. The unique experience Nordstrom creates is an example of the _____ strategy.

A) cost leadership
B) differentiation
C) focused
D) product supply

Question 34

Open communication and teamwork are hallmarks of ____ management practices.

A) organic
B) mechanistic
C) fragmented
D) tailored

Question 35

_____ refers to an organization that is composed of units, which work on specialized tasks using different work methods and requiring employees who have unique competencies.

A) Specialization
B) Fragmentation
C) Differentiation
D) Integration

Question 36

In order to minimize wait times for shoppers purchasing fewer than five items, the grocery store installed three self-checkout lanes. What environmental factor did the grocery store consider when making this decision?

A) distributors
B) competitors
C) suppliers
D) customers

Question 37

To create lower-cost products for the consumer, the marketing department at Shoe Savers created more free public relations campaigns instead of paid advertising campaigns and the product development area did a cost analysis to find lower costs on component parts. These two departments demonstrate the idea of ____ as they work to achieve a common goal.

A) specialization
B) integration
C) fragmentation
D) differentiation

Question 38

The cost leadership strategy is also known as a ___-cost strategy.

A) low
B) no
C) high
D) variable

Question 39

Jenna recommended that the retailer work to achieve cost advantages over competitors and rely on lower prices to gain customers and market share. What type of strategy is Jenna suggesting?

A) differentiation
B) product supply
C) cost leadership
D) focused

Question 40

Taylor works for an insurance company and helps customers with claims following an automobile accident. The company has created a list of procedures that he follows for each customer who contacts him with a claim. If he is unable to answer a question posed by the client, he is supposed to refer the client to his manager. What type of management practices are in place at this company?

A) organic
B) fragmented
C) mechanistic
D) tailored

Question 41

The CEO is at the top position in a company, at the next level you might find senior vice presidents, and the next lower level might consist of department heads. The relationship among these various levels in a company is called a(n)

A) span of control.
B) hierarchy.
C) differentiation.
D) accountability.

Question 42

When the human resource manager discussed Marlena's span of control, he was referring to

A) the new customers she was responsible for.
B) the way she interacted with other department heads.
C) the number of employees who report to her.
D) how she could attain a director position at the company.

Question 43

Millie is the owner of a footwear manufacturing business and has organized the company into five groupings: sandals, athletic shoes, flats, heels, and boots. Which type of organizational design did she use?

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

Question 44

_____ refers to an employee's duty to perform an assigned task.

A) Responsibility
B) Diversity
C) Accountability
D) Authority

Question 45

Candide is the senior vice president in charge of financial operations and she has six different department heads who report to her. These six department heads represent Candide's

A) span of control.
B) hierarchy.
C) differentiation.
D) diversity.

Question 46

In Across Cultures Competency: To gain the manufacturing efficiencies it needed to compete globally after purchasing Eureka, AB Electrolux required all suppliers to

A) use a just-in-time inventory system.
B) reduce costs by 10%.
C) limit competitors.
D) establish host-country operations.

Question 47

As he designed his new company, Manuel decided to create one department for each of the main tasks such as marketing, finance, human resources, and distribution. What type of horizontal design is he using?

A) geographical
B) network
C) functional
D) product

Question 48

A company that uses a product design for organizing, places all functions that contribute to a product

A) under one leader.
B) among several small groups.
C) within the grasp of everyone who works on a project.
D) under front-line employees.

Question 49

What is one negative aspect of the functional design?

A) supporting skill specialization
B) enhancing career development within the functional area
C) promoting high-quality technical decision making
D) difficulties with coordination between departments

Question 50

What is considered the most important factor in determining the extent of centralization within a company?

A) longevity
B) competency levels
C) product versus service
D) cost

Question 51

____ refers to the right to make a decision.

A) Accountability
B) Authority
C) Responsibility
D) Diversity

Question 52

_____ is the process of giving authority to a person to make decisions and act in certain situations.

A) Delegation
B) Decentralization
C) Responsibility
D) Centralization

Question 53

Jason is required to submit a weekly report to his manager on stock levels in the warehouse. When he accepted this job assignment, he was demonstrating

A) diversity.
B) complacency.
C) authority.
D) responsibility.

Question 54

Meredith told the management team that Gregor would have the report in by next week because she had asked him to complete the project by then. Meredith is demonstrating

A) authority.
B) accountability.
C) responsibility.
D) diversity.

Question 55

In Change Competency: According to Stanley McChrystal, director of JSOC, excellence in a decentralized organization is ultimately powered by

A) globalization.
B) cost reductions.
C) information sharing.
D) task management.

Question 56

The concentration of authority at the top of an organization is called

A) deregulation.
B) centralization.
C) delegation.
D) decentralization.

Question 57

A company that groups leaders and employees according to their areas of expertise and the resources required to do their jobs is using a _____ design.

A) network
B) functional
C) product
D) geographical

Question 58

When a company embodies decentralization, the delegation of authority is in the hands of

A) lower level employees.
B) upper management.
C) an arbitrator.
D) the competition.

Question 59

Katrine is a store manager and the company has given her the authority to make all hiring decisions for the store and adjust compensation when necessary. Katrine received this authority through the process of

A) deregulation.
B) centralization.
C) delegation.
D) decentralization.

Question 60

In Teams Competency: As a result of the self-management approach at Morning Star, of the 800 seasonal workers they employ, about ___ return each year.

A) 15%
B) 50%
C) 2%
D) 90%

Question 61

Which organizational design is based on location?

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

Question 62

Explain an organizational design based on geography and list some potential negative consequences of this design.

Question 63

Explain the differentiation strategy and give an example of this strategy in use.

Question 64

Compare and contrast centralization and decentralization. Provide an example of each.

Question 65

Henri opened restaurants in six different locations across the United States. After eight months, he added "hot chicken" to his menu in Nashville to respond to the demand in that area. He didn't add this to any of his other locations. What type of organizational design is Henri using?

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

Question 66

Another name for a network design is a

A) product/place design.
B) link design.
C) virtual organization.
D) lateral organization.

Question 67

Describe an organization that uses a product organizational design and point to some potential benefits of using this design.

Question 68

Explain the differences between authority, responsibility, accountability, and delegation.

Question 69

Compare and contrast the processes of differentiation and specialization. Provide an example of each.

Question 70

Describe two important factors that impact organization design decisions.

Question 71

After Maria and her group finished setting up the new database system, the team was dismantled and they were each assigned to work on different projects. What type of organizational design is in place at Maria's company?

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

Question 72

Define and describe a focused strategy. Provide examples of companies who use this strategy successfully.

Question 73

A _____ design relies on subcontracting some of a company's operations to other firms and coordinates them to accomplish a task.

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

Question 74

Describe the four key factors that can influence the span of control in any situation.

Question 75

Describe the differences between mechanistic and organic management practices.