Deck 12: Designing Organizational Structures

Question 1

Division of labor leads to increased job specialization.

Answer 1

True
Division of labor refers to the subdivision of work into separate jobs assigned to different people. Subdivided work leads to job specialization.

Question 2

Companies can be centralized in some parts of the organization and decentralized in other parts.

Answer 2

True
The optimal level of centralization or decentralization depends on several contingencies. However, different degrees of decentralization can occur simultaneously in different parts of an organization.

Question 3

Team-based organizational structures are usually found within larger divisionalized structures.

Answer 3

True
Team-based structures are usually found within the manufacturing or service operations of larger divisional structures. For example, several GE Aircraft Engines plants are organized as team-based structures, but these plants operate within GE's larger divisional structure.

Question 4

Coordination of work activities is:

A) required whenever there is division of labor.
B) required only in team-based organizations.
C) required whenever the organization has more than approximately 100 employees.
D) required only when organizations operate in complex environments.
E) discouraged in organizations as it leads to a high degree of interdependence among employees.

Question 5

_____ establishes the chain of command, that is, the system of common supervision among positions and units within the organization.

A) Span of control
B) Formalization
C) The organization's environment
D) Job specialization
E) Departmentalization

Question 6

Most employees at Quokka Systems are organized into project teams. Employees report to the project leader, but they also report to a leader responsible for their functional specialization (such as engineering or marketing). Quokka Systems has a:

A) simple structure.
B) client-based divisionalized structure.
C) matrix structure.
D) product-based divisionalized structure.
E) functional structure.

Question 7

Scenario: Creative Advertising Corporation
Creative Advertising Corporation wants its 100 employees to work together around specific clients, yet maintain an equal emphasis on alignment with their skill specializations (advertising, graphics, copywriting, and public relations). Which of the following organizational structures would work best for Creative Advertising Corporation?

A) Matrix structure that overlays a geographic and client structure
B) Simple structure
C) Network structure
D) Client-based divisionalized form
E) Matrix structure that overlays project teams with a functional structure

Question 8

Suppose you have been hired as a consultant to diagnose the environmental characteristics of your college or university. How would you describe the school's external environment? Is the school's existing structure appropriate for this environment?

Question 9

Organizations tend to become less formalized as they age and grow in number of employees.

Question 10

One problem with the team-based organizational structure is that employees may experience more stress due to ambiguity of their roles.

Question 11

In organizational structures, integrator roles serve mainly as a(n):

A) form of standardization.
B) informal communication coordinating mechanism.
C) form of direct supervision.
D) technological contingency.
E) main element in divisionalized structures.

Question 12

Simple structures usually rely on which of the following to coordinate work activities?

A) Direct supervision
B) Standardization through formal instructions
C) Formal training (standardizing skills)
D) Standardization of product or service outputs
E) Decentralization

Question 13

Organizational size, technology, and environment are:

A) three dimensions of span of control.
B) three of the four ways to avoid using coordinating mechanisms.
C) three conditions that do not influence a simple structure.
D) three factors that distinguish a virtual corporation from a network structure.
E) three of the four contingencies of organizational design.

Question 14

Scenario: Quokka Systems
Most employees at Quokka Systems are organized into project teams. Employees report to the project leader, but they also report to a leader responsible for their functional specialization (such as engineering or marketing). Quokka Systems has a:

A) simple structure.
B) client-based divisionalized structure.
C) matrix structure.
D) product-based divisionalized structure.
E) functional structure.

Question 15

Explain how the external environment, organizational size, technology, and strategy are relevant when designing an organizational structure.

Question 16

Formalization represents the establishment of standardization as a coordinating mechanism.

Question 17

Employees working at the matrix level have two bosses.

Question 18

Coordination through formal hierarchy relies on:

A) informal communication.
B) job descriptions.
C) goals and objectives.
D) direct supervision.
E) specialized skills of the employees.

Question 19

Which form of departmentalization organizes employees around specific skills or other resources?

A) Divisional structure
B) Functional structure
C) Simple structure
D) Matrix structure
E) Network structure

Question 20

For which type of environment should organizations adopt an organic structure?

A) Munificent environment
B) Dynamic environment
C) Stable environment
D) Simple environment
E) Mechanistic environment

Question 21

Scenario: SuperSteel
SuperSteel, a steel manufacturing firm with about 1,000 employees, operates in an environment that is simple and integrated (it makes a small number of steel products to a few key customers) but also dynamic and hostile (rapidly changing technology and customer needs with many competitors). Based on the environment in which this company operates, it would be more successful with a(n):

A) organic structure.
B) centralized structure.
C) divisionalized structure.
D) matrix structure.
E) mechanistic structure.

Question 22

When work is divided among people, a coordinating mechanism is needed to ensure that everyone works in concert.

Question 23

A mechanistic structure is decentralized, has a narrow span of control and little formalization.

Question 24

The conflict and ambiguity associated with the matrix structure cause some employees to experience more stress.

Question 25

Standardizing work through job descriptions and procedures:

A) is a form of coordination.
B) is more common when the work is complex and ambiguous.
C) tends to reduce quality and consistency.
D) is unnecessary in large organizations.
E) is more common in organic rather than mechanistic structures.

Question 26

One of the defining characteristics of a functional organizational structure is that it:

A) has a narrow span of control and high degree of formalization and centralization.
B) is the structure that organizes employees around specific knowledge or other resources.
C) overlays two organizational structures in order to leverage the benefits of both types of structure.
D) uses self-directed work teams rather than individuals as the basic building block of organizations.
E) is an alliance of several organizations for the purpose of creating a product or serving a client.

Question 27

A divisionalized structure is recommended mainly for:

A) stable environments.
B) diverse environments.
C) munificent environments.
D) integrated environments.
E) simple environments.

Question 28

Explain the two fundamental requirements of organizational structures.

Question 29

Informal communication is a coordination mechanism only in small and a few medium-sized organizations.

Question 30

Mechanistic structures operate best in stable environments.

Question 31

Organic structures are better suited to dynamic environments than to stable environments.

Question 32

When work activities are too complex to standardize through procedures or goals, companies often coordinate work effort:

A) through direct supervision.
B) by extensively training employees.
C) by giving one employee most of the tasks previously divided among many people.
D) through further division of labor.
E) through formal hierarchy.

Question 33

One problem with a functional structure is that:

A) it is more difficult to directly supervise employees within each department.
B) it produces higher dysfunctional conflict and poorer coordination.
C) it makes it difficult to permit greater specialization of skills.
D) it prevents companies from creating economies of scale in their pool of talent.
E) employees have difficulty creating career paths within their area of knowledge.

Question 34

Organic structures are better than mechanistic structures for:

A) hostile environments.
B) munificent and complex environments.
C) munificent environments.
D) simple and stable environments.
E) stable environments.

Question 35

Describe the various methods of coordination that an organization can adopt. Briefly explain each.

Question 36

Large organizations can encourage informal communication as a coordinating mechanism by keeping each production site small.

Question 37

As external environments become more complex and dynamic, organizational structures should become more mechanistic and less organic.

Question 38

Decentralization is the preferred strategy for organizations in simple, integrated (one market) and hostile environments.

Question 39

Many of the best-performing production plants are able to widen their span of control by:

A) teaching supervisors how to more efficiently monitor employees.
B) giving up on the idea that all employees must perform their fair share of work.
C) hiring supervisors who intimidate employees more often.
D) relying on self-directed work teams and other coordinating mechanisms.
E) introducing video cameras and other technologies to help supervisors to monitor more employees.

Question 40

Compared with divisionalized structures, functional structures are known to:

A) create better economies of scale.
B) be more responsive to local markets or clients.
C) encourage employees to focus on the organization's superordinate goals.
D) reduce conflict and coordination problems across work units.
E) be more responsive to clients and reduce conflict across work units.

Question 41

Larger organizations:

A) tend to make greater use of standardization than do smaller firms.
B) have similar structures to smaller organizations.
C) operate without any form of departmentalization for long periods of time.
D) make lesser use of informal communication as a coordinating mechanism.
E) are never decentralized.

Question 42

Define span of control and distinguish between narrow and wide span of control.

Question 43

Integrator roles increase informal communication as a coordinating mechanism.

Question 44

Departmentalization establishes interdependencies and coordination through informal communication within each work unit.

Question 45

The more diversified the environment, the more the firm would benefit from a divisionalized form of departmentalization.

Question 46

A wider span of control is possible if:

A) employees manage themselves rather than being coordinated through close supervision.
B) the company has a high degree of formalization and operates in a complex environment.
C) the organization has few employees and a tall hierarchy.
D) the company does not rely on self-directed teams.
E) a very few people report directly to a manager.

Question 47

The current trend is for companies to shift their divisionalized structures away from:

A) functional specializations.
B) clients.
C) geographic areas.
D) products.
E) emerging forms of technology.

Question 48

Two technological contingencies that influence the best type of organizational structure are:

A) dynamism and hostility.
B) organic and mechanistic.
C) variability and analyzability.
D) formalization and division of labor.
E) coordination and formalization.

Question 49

Mike, an entrepreneur, employs 20 people whom he personally supervises. However, the company is most likely to employ over 200 people in production, sales, engineering and administration within a few years due to the growing success of the company's new products. The entrepreneur likes the current structure and wants to avoid other forms of departmentalization. Explain to the entrepreneur why his company would be more effective through forms of departmentalization as it grows larger.

Question 50

Formal hierarchy is the least time-consuming coordinating mechanism where employees work in non-routine and ambiguous situations.

Question 51

One problem with departmentalization is that it discourages coordination within departments through informal communication.

Question 52

Larger firms tend to be more centralized and make greater use of direct supervision than do smaller firms.

Question 53

Flatter organizational structure:

A) tends to reduce overhead costs.
B) receives lower quality information from the external environment.
C) undermines employee empowerment and engagement.
D) receives less timely information from the external environment.
E) narrows the span of control for supervisors.

Question 54

Freer trade, advances in information technology, and more global customers are pressuring many large global companies to:

A) shift away from geographically based to more client-based divisionalized structures.
B) increase direct supervision as the main coordinating mechanism.
C) shift away from divisionalized structures into functional structures.
D) disband their team-based structures in favor of simple structures.
E) shift from functional structures to geographically based divisionalized structures.

Question 55

An organization that wants to compete through innovation should:

A) adopt an organic structure and make extensive use of informal communication to coordinate work.
B) switch to a cost leadership strategy as quickly as possible.
C) coordinate employees by writing up formal rules and procedures.
D) centralize by typically giving the decision making authority to those at the top of the organizational hierarchy and formalize its organizational structure.
E) adopt a mechanistic structure with functional departmentalization.

Question 56

Explain why companies are moving away from structures that organize people around geographic clusters.

Question 57

Think about the business school or other organizational unit whose classes you are currently attending. What is the dominant coordinating mechanism used to guide or control the instructor? Why is this coordinating mechanism used the most here?

Question 58

Job descriptions are an example of coordination through standardization.

Question 59

A simple structure is one of the best structures in which to accommodate organizational growth and diversification.

Question 60

An organic structure works better than a mechanistic structure where tasks have high variety and low analyzability.

Question 61

Organizational and environmental complexities push organizations towards:

A) formalization.
B) a more mechanistic structure.
C) decentralization.
D) a simple structure.
E) a narrow span of control.

Question 62

Which form of departmentalization increases the risk of duplication and underutilization of resources?

A) Divisional structure
B) Functional structure
C) Simple structure
D) Matrix structure
E) Network structure

Question 63

The idea that an organization interacts with its environment (rather than being totally determined by it) is summed up in the phrase:

A) structure follows strategy.
B) feasibility breeds analyzability.
C) coordination through standardization.
D) strategy follows structure.
E) analyzability before feasibility.

Question 64

Discuss the challenges related to matrix structure.

Question 65

Describe three types of coordination in organizational structures.

Question 66

Standardizing processes are less effective in non-routine and complex work.

Question 67

Functional structures foster professional identity and permit greater specialization than most other forms of departmentalization.

Question 68

Contingencies such as size, technology, and environment influence an organization's structure.

Question 69

Which organizational design element is most closely related to standardization as a coordinating mechanism?

A) Departmentalization
B) Span of control
C) Formalization
D) Centralization
E) Division of labor

Question 70

Team-based organizations rely extensively on:

A) hourly wages and generous employee benefits.
B) supervisors as the main source of direction and control.
C) a tall hierarchy.
D) communities of practice.
E) self-directed teams.

Question 71

Scenario: Tammy
Tammy recently earned her degree in nursing and has begun a career path in the surgical ward at a local hospital. Her training program consists of a year-long internship, working with senior nurses. While in school, Tammy worked in a medical lab performing routine blood tests. The lab technician job required her to take a two week course and refer to a procedures manual for her work on a daily basis.
Which coordinating mechanism is most important in Tammy's new career as a surgical nurse?

A) Direct supervision
B) Integrator roles
C) Job descriptions
D) Extensive training
E) Decentralization

Question 72

List and briefly explain the major environmental factors that influence the type of structure best suited to a particular situation.

Question 73

An organization's structure is mainly its organizational chart.

Question 74

When work activities are too complex to standardize through extensive training for employees, companies need to coordinate work effort through precise job descriptions.

Question 75

Functional structures tend to have higher dysfunctional conflict and poorer coordination across units than other forms of departmentalization.

Question 76

Organizational strategy influences both the contingencies of structure and the structure itself.

Question 77

As organizations grow older, they tend to:

A) become more formalized.
B) become more centralized.
C) move towards a simple form of departmentalization.
D) shift from a mechanistic to an organic structure.
E) operate with a wide span of control and little formalization.

Question 78

A team-based organizational structure has:

A) a tall organizational hierarchy.
B) a high degree of formalization.
C) a decentralized organization structure.
D) mechanistic organizational structure.
E) a narrow span of control.

Question 79

Scenario: Tammy
Tammy recently earned her degree in nursing and has begun a career path in the surgical ward at a local hospital. Her training program consists of a year-long internship, working with senior nurses. While in school, Tammy worked in a medical lab performing routine blood tests. The lab technician job required her to take a two week course and refer to a procedures manual for her work on a daily basis.
Which coordinating mechanism was most important in Tammy's job as a lab technician?

A) Direct supervision
B) Integrator roles
C) Job descriptions
D) Extensive training
E) Decentralization

Question 80

Distinguish between simple and complex environments. Which element of organizational structure suits the best in a complex environment?