Deck 1: Organizations and Organizational Effectiveness

Question 1

Organizational design is the process by which managers select and manage aspects of structure and culture so an organization can control the activities necessary to achieve its goals.

Answer 1

True

Question 2

Organizational theory is primarily concerned with how an organization can outperform its competitors.

Answer 2

False

Question 3

Organizational structure is the formal system of task and authority relationships that control how people coordinate their actions and use resources to achieve organizational goals.

Answer 3

True

Question 4

An organization's culture is shaped by the type of structure used by the organization.

Question 5

Organizations die or are transformed when the needs satisfied by them are no longer important.

Question 6

Economies of scale are cost savings that result when an organization is able to use underutilized resources more effectively because they can be shared across several different products or tasks.

Question 7

A contingency is an event that might occur and must be planned for.

Question 8

As compared to a large company, the degree of specialization in a small company is higher.

Question 9

Organizations that provide essentially the same goods and services will always have similar organizational cultures.

Question 10

Formation of organization results in increased transaction costs.

Question 11

Economies of scope are cost savings achieved when an organization manufactures products in large volumes.

Question 12

An organization is a tool people use to coordinate their actions to obtain something they desire or value.

Question 13

Government is a part of organizational environment.

Question 14

The environment in which an organization operates is a major source of uncertainty.

Question 15

Value creation by an organization takes place at three stages: input, conversion, and output. Out of these three stages, only the conversion stage is affected by the environment in which the organization operates.

Question 16

The organizational environment is a set of forces and conditions that operate within an organization's boundaries.

Question 17

Entrepreneurship is the process by which people recognize opportunities to satisfy needs and then gather and use resources to meet those needs.

Question 18

Transaction costs are the costs associated with negotiating, monitoring, and governing exchanges between people.

Question 19

Economies of scale are cost savings achieved when an organization manufactures products in large volumes.

Question 20

Competitive advantage is the ability of one company to outperform another because its managers are able to create more value from the resources at their disposal.

Question 21

Which of the following is most likely to be the result of the formation of an organization?

A) It decreases the need for division of labor.
B) It increases the transaction costs.
C) It exerts pressure on individuals to conform to task and production requirements.
D) It makes production more costly.

Question 22

________ are cost savings that result when goods and services are produced in large volume on automated production lines.

A) Sunk costs
B) Economies of scale
C) Deferred revenues
D) Economies of scope

Question 23

________ costs are the costs associated with negotiating, monitoring, and governing exchanges between people.

A) Historical
B) Sunk
C) Transaction
D) Opportunity

Question 24

The technical approach to measuring organizational effectiveness evaluates an organization's ability to secure, manage, and control scarce and valued skills and resources.

Question 25

________ are cost savings that result when an organization is able to use underutilized resources more effectively because they can be shared across several different products or tasks.

A) Economies of scale
B) Sunk costs
C) Deffered revenues
D) Economies of scope

Question 26

Operative goals can be either short or long term in nature.

Question 27

Which of the following is a part of an organization's environment?

A) machinery
B) suppliers
C) money and capital
D) raw materials

Question 28

A culture based on entrepreneurial norms and values is less likely to encourage innovation than a culture that is conservative and bureaucratic.

Question 29

Which of the following is a part of an organizations' inputs?

A) salaries
B) suppliers
C) money and capital
D) shareholders

Question 30

________ is the process by which people recognize opportunities to satisfy needs and then gather and use resources to meet those needs.

A) Moonlighting
B) Benchmarking
C) Entrepreneurship
D) Social loafing

Question 31

An organization ________.

A) facilitates the division of labor
B) increases transaction costs
C) has little power over individuals working in it
D) cannot achieve economies of scope

Question 32

An automobile company modifies its existing automated production line so that it can manufacture two more models of cars using the same facility. This shows that the automobile manufacturer is planning to take advantage of ________.

A) economies of scope
B) deferred revenues
C) transaction costs
D) elasticity of supply

Question 33

A toy maker sells a large number of toys and due to the large volume production it is able to acquire the raw materials required to make the toys at a cheaper price than the competition. In this case, the toy maker is taking advantage of ________.

A) economies of scale
B) economies of scope
C) organizational culture
D) organizational structure

Question 34

Which of the following is an output created by an organization?

A) capital
B) competitors
C) machinery
D) salaries

Question 35

The internal systems approach to measuring organizational effectiveness evaluates an organization's ability to convert skills and resources efficiently into finished goods and services.

Question 36

Increasing product quality and reducing number of defects are examples of indicators used to measure organizational effectiveness as per the internal systems approach.

Question 37

Robert decided to create a Web site for buying and selling electronic products and he only recruited people who could provide high-quality, customer-friendly service that would appeal most to his Internet customers. This shows that Robert is trying to create value at the ________ stage.

A) input
B) conversion
C) output
D) feedback

Question 38

The external resource approach to measuring organizational effectiveness evaluates an organization's ability to be innovative and function quickly and responsively.

Question 39

Jeffrey Bezos saw the opportunity to sell books over the Internet, which was growing. So he started a Web site where people could buy new books and sell there existing books. This was the first Web site dedicated to buying or selling books. This is an example of ________.

A) social loafing
B) parallel marketing
C) surface bargaining
D) entrepreneurship

Question 40

________ determines how much value is created at the conversion stage.

A) The way an organization chooses and obtains the inputs it needs to produce goods and services from its environment
B) The method used by an organization to sell its products or services to the customers
C) The feedback received by an organization from its customers about its products or services
D) The way an organization uses human resources and technology to transform inputs into outputs

Question 41

The ________ approach to measuring organizational effectiveness evaluates the organization's ability to convert skills and resources into goods and services efficiently.

A) external resource
B) technical
C) internal systems
D) transactional

Question 42

When local store managers try to spot trends and changes so that they can respond to customer needs, they are attempting to ________.

A) increase the elasticity of supply
B) decrease the transaction costs
C) manage the external environment
D) increase the division of labor

Question 43

Organizational culture ________.

A) remains the same once it is developed
B) controls organizational members' interactions with each other
C) is shaped primarily by an organization's environment
D) is the formal system of task and authority relationships

Question 44

At Microsoft, to control scientists and make use of their talents, Bill Gates put them in teams. This is an example of a change in an organization's ________.

A) culture
B) behavior
C) environment
D) structure

Question 45

Competitive advantage is the ability of a company to ________.

A) identify changes in consumer tastes and preferences
B) outperform another company because its managers are able to create more value from the resources at their disposal
C) develop a flexible organization structure that can quickly respond to changes in the environment
D) achieve economies of scale by manufacturing a product in large volumes

Question 46

The principal purpose of organizational structure is to ________.

A) determine the vision and mission of the organization
B) develop new and improved products for the existing markets
C) control how people coordinate their actions and use resources
D) select an appropriate business strategy that will help the organization achieve its long term goals

Question 47

The ________ approach allows managers to evaluate the organization's ability to secure, manage, and control scarce and valued skills and resources.

A) external resource
B) internal systems
C) technical
D) transaction

Question 48

________ is the process by which managers select and manage aspects of structure and culture so an organization can control the activities necessary to achieve its goals.

A) Organizational design
B) Competitive analysis
C) Arbitration
D) Environmental scanning

Question 49

Which of the following terms refers to the specific pattern of decisions and actions that managers take to use core competences to achieve a competitive advantage and outperform competitors?

A) strategy
B) value chain
C) organizational design
D) histogram

Question 50

The quality of organizational decision-making is a function of the ________.

A) organizational core competences
B) environment of the organization
C) diversity of the viewpoints that get considered
D) value chain followed by the organization

Question 51

Which of the following definitions best describes a contingency?

A) It is an event occurred in the past which resulted in heavy profits for the company.
B) It is an event due to which a company identifies its competitive advantage.
C) It is an event that might occur and must be planned for.
D) It is an event occurred in the past which resulted in heavy loss for the company.

Question 52

Which of the following terms refers to the study of how organizations function and how they affect and are affected by the environment in which they operate?

A) organizational behavior
B) organizational theory
C) organizational culture
D) organizational environment

Question 53

Coca-Cola takes pride in a long-term commitment to employees; Pepsi is very political and competitive. These are differences in organizational ________.

A) culture
B) structure
C) environment
D) design

Question 54

An organization's ________ determine how effectively managers are able to coordinate and motivate workers.

A) environmental factors
B) core competences
C) structure and culture
D) competitive advantages

Question 55

Chief operating officers (COOs) ________.

A) oversee organizational structure and culture
B) determine competitive strategies for the organization
C) are made responsible for achieving the predefined profit level
D) are head of the R&D department in the organization

Question 56

Which of the following are contingencies that cause the organization to face uncertainty?

A) organizational design and organizational processes
B) changing technology and organizational design
C) global environment and changing technology
D) organizational structure and global environment

Question 57

Which of the following statements is true regarding organizational design?

A) An organizational design once formed remains constant throughout the life of the organization.
B) Every organization must identify the single perfect design that fits its needs and then implement it.
C) Once an organizational design is in place, it hinders the process of organizational change.
D) Organizational design deals with structure and culture of the organization.

Question 58

The ________ approach allows managers to evaluate the organization's ability to be innovative and function quickly and responsively.

A) external resource
B) internal systems
C) technical
D) transaction

Question 59

Researchers analyzing what CEOs and managers do for measuring organizational effectiveness, have pointed to ________ as the three most important processes managers use to assess and measure how effective they, and their organizations, are at creating value.

A) innovation, efficiency, and differentiation
B) differentiation, control, and environmental scanning
C) control, innovation, and efficiency
D) environmental scanning, control, and innovation

Question 60

The process by which organizations move from their present state to some desired future state is called ________.

A) organizational triangulation
B) environmental scanning
C) organizational change
D) transaction analysis

Question 61

What is an organization?

Question 62

In order to measure organizational effectiveness, an organization uses indicators such as stock price and market share. These indicators show that the organization is using the ________ approach to measure the organizational effectiveness.

A) external resource
B) internal system
C) technical
D) transactional

Question 63

A computer manufacturer was concerned about its effectiveness, so it eliminated a level in its hierarchy and decentralized decision-making authority. Which of the following approaches is it using to evaluate organizational effectiveness?

A) external resource approach
B) internal system approach
C) technical approach
D) transaction cost approach

Question 64

As per the external resource approach to measuring organizational effectiveness, an organization will most likely attempt to ________ to increase its effectiveness.

A) increase rate of product innovation
B) increase market share
C) reduce conflict
D) reduce number of defects

Question 65

List four examples of "organizational outputs."

Question 66

Which of the following is an example of an official goal?

A) reduce delivery time to customer
B) become a leading producer of a product
C) increase market share
D) increase product quality

Question 67

Define entrepreneurship.

Question 68

Which of the following terms refers to the goals that explain why the organization exists and what it should be doing?

A) mission
B) tactical goal
C) operative goal
D) profit goal

Question 69

Which of the following goals set by an organization to measure effectiveness indicates that it is using the internal systems approach to measure organizational effectiveness?

A) lower costs of inputs
B) increase stock price
C) improve customer service
D) increase rate of product innovation

Question 70

Operative goals ________.

A) are meant to legitimize the organization and its activities, to allow it to obtain resources and the support of its stakeholders
B) focus only on the long term
C) focus only on the short term
D) can be used to measure how well an organization is managing its environment

Question 71

List four examples of "organizational inputs."

Question 72

If an organization is using the technical approach to measure organizational effectiveness then it will attempt to ________ to increase the effectiveness of the organization.

A) increase product quality
B) lower costs of inputs
C) increase coordination and motivation of employees
D) increase stock price

Question 73

Usually the ________ goals lay out the mission of the organization.

A) tactical
B) profit
C) short-term
D) official

Question 74

Which of the following goals is most likely to be set by an organization to measure effectiveness if it is using the technical approach to measure organizational effectiveness?

A) reduce production cost
B) increase market share
C) increase rate of product innovation
D) lower costs of input

Question 75

Top management's ability to perceive and respond to changes in the environment or to initiate change and be first to take advantage of a new opportunity indicates the effectiveness of the organization as per the ________ approach.

A) external resource
B) transactional
C) internal systems
D) technical

Question 76

In order to measure organizational effectiveness, an organization measures the amount of time needed to get new products to market, and the amount of time spent coordinating the activities of different departments. This indicates that the organization is using the ________ approach to measure the organizational effectiveness.

A) internal systems
B) transactional
C) external resource
D) technical

Question 77

In order to measure organizational effectiveness, an organization uses indicators such as number of defective products and cost of production. These indicators show that the organization is using the ________ approach to measure organizational effectiveness.

A) external resource
B) technical
C) internal systems
D) transactional

Question 78

Which of the following goals set by an organization to measure effectiveness indicates that it is using the external resource approach to measure organizational effectiveness?

A) reduce production costs
B) increase coordination and motivation of employees
C) gain support of stakeholders such as government or environmentalists
D) reduce delivery time to customer

Question 79

________ goals are guiding principles that the organization formally states in its annual report and in other public documents.

A) Operative
B) Profit
C) Tactical
D) Official

Question 80

Which of the following goals is most likely to be set by an organization to measure effectiveness when it uses the external resource approach to measure organizational effectiveness?

A) improve customer service
B) reduce production costs
C) increase stock price
D) cut decision-making time