Question 1

The informal organization appears as dashed lines on a firm's organizational chart.

Accepted Answer

The informal organization does not appear on a firm's organizational chart; only the formal organizational structure is depicted, typically with solid lines to show reporting relationships and hierarchy.

Question 2

Rapid Response Security Firm, a company that provides on-site security services for malls and other retail environments, needs to review current procedures used by its professional officers to make certain they are in compliance with new laws. On crucial issues such as this, it is more important to gather information through the informal organization, as opposed to the formal organization.

Accepted Answer

The informal organization is not well suited to making critical decisions of long-term significance. It is too unstructured and emotional to allow for careful, reasoned decision making on such important topics.

Question 3

Mohammed just started a managerial position at Abundance Bank. In order to be more effective in his new position, he should try to learn who the important people are in Abundance's informal organization.

Accepted Answer

Knowing the important people in Abundance Bank's informal organization can help Mohammed understand how decisions are really made and how work actually gets done. This can enable him to navigate the organization more effectively and reach his goals.

Question 4

Successful managers will find the balance between promoting the informal organization and maintaining a formalized structure, as well.

Accepted Answer

This is because a completely informal organization can lack structure and direction, while a completely formalized structure can stifle creativity and innovation. Successful managers recognize the importance of both and find ways to integrate the two for the benefit of the organization.

Question 5

Organizational culture refers to the widely shared values within a corporation that foster unity and cooperation.

Accepted Answer

Organizational culture refers to the values, beliefs, behaviors, and customs that exist within an organization and shape the behavior of its employees towards each other and towards the organization as a whole. A strong organizational culture can promote a sense of shared identity and purpose among employees, and can lead to improved collaboration and performance.

Question 6

A firm's informal organization refers to the structure that identifies the authority, responsibility, and position of people within the organization.

Accepted Answer

A firm's informal organization refers to the social structure and network of relationships that exist within the organization, which are not necessarily defined by the official authority structure. This can include informal communication channels, social networks, and power dynamics that may impact how work gets done and decisions are made.

Question 7

The grapevine refers to the formal channel used for confidential communications between members of top management.

Accepted Answer

The grapevine refers to the informal channel of communication, which is often used for spreading rumors or gossip among employees, rather than a formal channel used for confidential communications between top management.

Question 8

Holden just learned that several people in New Hampshire needed to be treated for food poisoning after eating peanut butter that was produced and jarred in his plant. As he walks the back stairs at the plant, he thinks to himself, "It's time to get the informal organization in on this. We've got to stop this in its tracks!" Holden is taking the right approach to solving this serious problem.

Accepted Answer

The informal organization is too unstructured and emotional to deal with serious emergency situations. Critical matters need reasoned and rational decision making in a formal and official context.

Question 9

While most organizations have a formal organization structure, only poorly managed firms also have an informal organization.

Accepted Answer

Every organization has an informal organization, regardless of how it is managed. The informal organization is made up of social networks and unofficial communication channels that form among employees.

Question 10

The key people in a company's grapevine typically have considerable influence in the organization.

Accepted Answer

The key people in a company's grapevine are often those who are well-connected and have access to a lot of information. This gives them considerable influence in the organization since they can sway opinions and attitudes through the spread of rumors and gossip.

Question 11

The informal organization of a business can help generate creative solutions and inspire teamwork and camaraderie.

Accepted Answer

The informal organization of a business can provide a more flexible and collaborative atmosphere that can lead to the generation of creative solutions and foster team unity.

Question 12

Organizing a business begins with
A) acquiring the necessary resources.
B) choosing the best qualified employees.
C) developing an efficient plan of action.
D) determining the work to be done.

Accepted Answer

Before acquiring resources or choosing employees, the business needs to determine the work that needs to be done. This will help in developing an efficient plan of action and identifying the resources and employees required for the business.

Question 13

During an afternoon coffee break, Evangeline, a production-line employee at Lilypad Linens, was told by a friend that one of the managers in finance is about to be fired. She is eager to learn if other friends at Lilypad know any more about the situation. This flow of information is an example of Lilypad's grapevine.

Accepted Answer

The flow of information through Evangeline's friend and her desire to learn more from others at the company indicates the presence of a grapevine, which is an informal channel through which information spreads in an organization.

Question 14

The very best organizations have cultures that emphasize service to others, especially customers.

Accepted Answer

The focus on serving others, particularly customers, is often a hallmark of successful organizations. This focus can lead to greater customer satisfaction, loyalty, and ultimately, business success.

Question 15

Dividing the required work among a group of employees is called
A) departmentalization.
B) delegation of responsibility.
C) division of labor.
D) separation of control.

Accepted Answer

Dividing the required work among a group of employees is called division of labor. Departmentalization is the grouping of jobs into manageable units, delegation of responsibility is assigning tasks and authority to a subordinate, and separation of control refers to separating decision-making authority from operational activities.

Question 16

The informal organization is best suited for decision making on big issues.

Accepted Answer

The formal organization is better suited for making decisions on big issues as it has a clear hierarchy and structure that facilitates decision-making processes. The informal organization may lack clarity and accountability necessary for effective decision making on big issues.

Question 17

Organizational culture can produce either a positive or negative impact on an organization.

Accepted Answer

Organizational culture influences employee behavior, decision-making, and overall performance. If the culture is positive, it can lead to increased productivity, employee satisfaction, and business success. However, a negative culture can result in low morale, high turnover, and decreased performance.

Question 18

An informal organization can be a valuable asset to managers attempting to create an environment of harmony among workers and establish the corporate culture.

Accepted Answer

An informal organization, which includes social networks and friendships among colleagues, can help to build trust and enhance communication, ultimately contributing to a more cohesive and positive workplace. Managers who recognize and leverage the power of informal networks can create a more harmonious and productive work environment.

Question 19

The informal organization is created by the decisions of top management.

Accepted Answer

The informal organization is created spontaneously by the interactions and relationships between employees, and is not directly controlled by top management. However, top management can indirectly influence the informal organization through their decisions and actions.

Question 20

The formal organization of a firm provides the lines of authority to follow in routine situations.

Accepted Answer

The formal organization of a firm includes a hierarchy of positions and roles that clearly defines lines of authority and communication channels. This helps to establish routines and procedures for handling common situations within the organization.

Quiz 8: Structuring Organizations for Todays Challenges