Multiple Choice

1. Which of the following management functions entails the process of arranging people and
resources to work toward a common goal?
a) Controlling
b) Leading
c) Planning
d) Organizing

Ans: d
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Understand organizing as a managerial responsibility.
Section Reference: Organizing is one of the management functions.
AACSB: Analytic

2. An organizational structure consists of all the following EXCEPT:

a) a system of tasks.
b) reporting relationships.
c) a management mission.
d) communication linkages.

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Understand organizing as a managerial responsibility.
Section Reference: Organization charts describe formal structures of organizations.
AACSB: Analytic

3. A(n) __________ graphically describes the arrangement of work positions within an

organization.
a) informal structure
b) PERT chart
c) organization chart
d) business strategy

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Understand organizing as a managerial responsibility.
Section Reference: Organization charts describe formal structures of organizations.
AACSB: Analytic

4. The __________ allocates jobs to different people and groups.

a) organization chart
b) division of labor
c) shadow organization
d) informal structure

Ans: b
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Understand organizing as a managerial responsibility.
Section Reference: Organization charts describe formal structures of organizations.
AACSB: Analytic

5. Organization charts provide all of the following EXCEPT:

a) a clear division of work.
b) diagrams of reporting relationships among employees.
c) job titles of employees.
d) unofficial relationships among employees.

Ans: d
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Understand organizing as a managerial responsibility.
Section Reference: Organization charts describe formal structures of organizations.
AACSB: Analytic

6. A chart that describes a company’s formal structure is called a(n):

a) PERT chart.
b) employee chart.
c) organization chart.
d) Pareto chart.

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Understand organizing as a managerial responsibility.
Section Reference: Organization charts describe formal structures of organizations.
AACSB: Analytic

7. Your roommate wants to learn about organization charts. You can tell her that an
organization chart can tell you all of the following about an organization EXCEPT its:
a) division of work.
b) formal structure.
c) reporting relationships.
d) control mechanisms.

Ans: d
Bloom’s: Application
Level: Medium
Learning Objective 1: Understand organizing as a managerial responsibility.
Section Reference: Organization charts describe formal structures of organizations.
AACSB: Reflective Thinking

8. The network of unofficial relationships among an organization’s members is called the

__________.
a) informal structure
b) planned structure
c) formal structure
d) industrial structure

Ans: a
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Understand organizing as a managerial responsibility.
Section Reference: Organizations also have informal structures.
AACSB: Analytic

9. __________ are made up of relationships between organizational members that are

unofficial and not specified by the formal structure.
a) Strategic organizations
b) Vertical organizations
c) Shadow organizations
d) Formal organizations

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Understand organizing as a managerial responsibility.
Section Reference: Organizations also have informal structures.
AACSB: Analytic

10. All of the following are problems with informal structures EXCEPT that they:
a) assist in getting the work done.
b) may work against organizational goals.
c) breed resistance to change.
d) distract members from their work.

Ans: a
Bloom’s: Comprehension
Level: Easy
Learning Objective 1: Understand organizing as a managerial responsibility.
Section Reference: Informal structures have good points and bad points.
AACSB: Analytic

11. The process of grouping together people and jobs into work units is called __________.
a) breakeven analysis
b) relationship management
c) socialization
d) departmentalization

Ans: d
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: What are the most common types of organization structures?
AACSB: Analytic

12. A __________ groups together people with similar skills who perform similar tasks.
a) cross-functional structure
b) functional structure
c) horizontal structure
d) matrix structure

Ans: b
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Functional structures group together people using similar skills.
AACSB: Analytic
13. At Ink Pens Manufacturing (IPM), there are departments for marketing, engineering, and
manufacturing. Which of the following structures does IPM exemplify?
a) A matrix structure
b) A cross-functional structure
c) An informal structure
d) A functional structure

Ans: d
Bloom’s: Application
Level: Medium
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Functional structures group together people using similar skills.
AACSB: Reflective Thinking

14. Big Money Bank has several branches that are headed by branch managers. The loan
manager, investments manager, operations manager, and trust manager in each branch report
directly to the branch manager. This scenario is an example of a __________.
a) dysfunctional structure
b) matrix structure
c) network structure
d) product structure

Ans: d
Bloom’s: Application
Level: Medium
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Divisional structures group together people by products, customers, or
locations.
AACSB: Reflective Thinking

15. Community Bank Inc. currently operates with a functional structure. A lack of
communication across functional departments has affected the performance of the employees.
This scenario illustrates the concept of:
a) matrix structure.
b) top-down structure.
c) functional chimneys.
d) cross-functional team.

Ans: c
Bloom’s: Application
Level: Medium
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Functional structures group together people using similar skills.
AACSB: Reflective Thinking

16. In a functional structure, a lack of communication between functional departments leads to

a lack of:
a) coordination between the functional units.
b) expertise in solving technical problems.
c) a clear career path for employees.
d) training within the departments.

Ans: a
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Functional structures group together people using similar skills.
AACSB: Analytic

17. Which of the following structures groups together people working on the same product, in
the same geographical area, or with similar customers?
a) A matrix structure
b) A network structure
c) A divisional structure
d) An informal structure

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Divisional structures group together people by products, customers, or
locations.
AACSB: Analytic

18. Which of the following divisional structures brings together people and jobs performed in
the same location?
a) Product structures
b) Customer structures
c) Geographical structures
d) Process structures

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Divisional structures group together people by products, customers, or
locations.
AACSB: Analytic

19. Maria, the vice-president of operations at Choco Candy, Inc. (CCI), plans to create new
divisions of CCI in China, India, and Malaysia. In this scenario, Maria develops a _______ for CCI.
a) product structure
b) geographical structure
c) team structure
d) service structure

Ans: b
Bloom’s: Application
Level: Medium
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Divisional structures group together people by products, customers, or
locations.
AACSB: Reflective Thinking

20. Which of the following is NOT a form of divisional structure?

a) Product structure
b) Functional structure
c) Customer structure
d) Geographical structure

Ans: b
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Divisional structures group together people by products, customers, or
locations.
AACSB: Analytic

21. A customer structure groups together people who:

a) work on a single product.
b) work in the same location.
c) serve the same customer or client.
d) possess the same qualifications.

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Divisional structures group together people by products, customers, or
locations.
AACSB: Analytic

22. An organizational structure that combines functional and divisional approaches to

emphasize project or program teams is called a(n) __________.
a) informal structure
b) operational structure
c) vertical structure
d) matrix structure

Ans: d
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Matrix structures combine the functional and divisional structures.
AACSB: Analytic

23. Matrix structures offer all of the following advantages EXCEPT:

a) a less expensive organizational structure.
b) a clear accountability for projects.
c) improved communication across functions.
d) problem-solving at the team level.

Ans: a
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Matrix structures combine the functional and divisional structures.
AACSB: Analytic

24. Which of the following is a disadvantage of a matrix structure?

a) The power struggle between two managers produce conflicting demands on employees.
b) Expertise to solve problems is unavailable at the team level.
c) Subunits focus on functional goals rather than on organizational objectives.
d) A lack of communication develops between functional units.

Ans: a
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Matrix structures combine the functional and divisional structures.
AACSB: Analytic

25. A cross-functional team member in a matrix structure reports to __________ manager(s).

a) 0
b) 1
c) 2
d) 3

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Matrix structures combine the functional and divisional structures.
AACSB: Analytic

26. Your manager is considering the implementation of either a matrix structure or a team
structure. Based on what you have learned in this class, you can tell her that the major
difference between a matrix structure and a team structure is that a team structure:
a) has no functional management.
b) has project management.
c) is always permanent.
d) has temporary teams to solve problems.

Ans: d
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Matrix structures combine the functional and divisional structures.
Section Reference: Team structures use many permanent and temporary teams.
AACSB: Analytic
27. A __________ brings together members from different functional departments.
a) divisional team
b) cross-functional team
c) sales team
d) vertical team

Ans: b
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Matrix structures combine the functional and divisional structures.
AACSB: Analytic

28. Who among the following is responsible for a cross-functional team member’s performance
appraisal in a matrix structure?
a) The functional supervisor
b) The project manager
c) Both the functional supervisor and the team leader
d) The general manager

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Matrix structures combine the functional and divisional structures.
AACSB: Analytic

29. ABC Inc. uses information technology to connect with outside suppliers and service
contractors. In this scenario, which of the following structures does ABC Inc. use?
a) A cross-functional structure
b) A matrix structure
c) A network structure
d) A horizontal structure
Ans: c
Bloom’s: Application
Level: Medium
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Network structures extensively use strategic alliances and outsourcing.
AACSB: Reflective Thinking

30. ABC and XYZ, two organizations in the same industry, have come together to pursue areas
of mutual interest. This scenario exemplifies a(n):
a) unethical venture.
b) acquisition.
c) corporate takeover.
d) strategic alliance.

Ans: d
Bloom’s: Application
Level: Medium
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Network structures extensively use strategic alliances and outsourcing.
AACSB: Reflective Thinking

31. Which of the following is an advantage of a network structure?

a) An easy transition from other types of structures
b) Simplicity of operating the structures
c) Control over each part of the system
d) Lower costs and flexibility

Ans: d
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Network structures extensively use strategic alliances and outsourcing.
AACSB: Analytic
32. A _____ uses information technologies to operate as a shifting form of alliances.
a) functional organization
b) matrix organization
c) virtual organization
d) divisional organization

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Network structures extensively use strategic alliances and outsourcing.
AACSB: Technology

33. Which of the following is a requirement for a virtual structure?

a) Functional management
b) Cross-functional teams
c) Information technology
d) Large projects

Ans: c
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Network structures extensively use strategic alliances and outsourcing.
AACSB: Technology

34. __________ is the process of configuring organizations to meet environmental challenges.

a) Centralization
b) Decentralization
c) Organizational design
d) Strategic planning
Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: What are the trends in organizational design?
AACSB: Analytic

35. Span of control refers to:

a) the power a manager has over all employees.
b) the number of employees directly reporting to a manager.
c) the area in which a manager supervises.
d) the number of top level managers a middle manager must report to.

Ans: b
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are becoming flatter, using fewer levels of management.
AACSB: Analytic

36. Remote Servicing Inc. (RSI) has a flat organizational structure. In this scenario, managers at
RSI would have a __________ span of control.
a) tall
b) flat
c) wide
d) narrow

Ans: c
Bloom’s: Application
Level: Medium
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are becoming flatter, using fewer levels of management.
AACSB: Reflective Thinking
37. In a ______ organization, the top management has the power to make most of the
important decisions.
a) centralized
b) flat
c) decentralized
d) wide

Ans: a
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are increasing decentralization.
AACSB: Analytic

38. Delegation refers to:

a) telling employees how to do their work.
b) managers promoting their employees.
c) the process of entrusting work to others.
d) managers favoring certain employees.

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are increasing delegation and empowerment.
AACSB: Analytic

39. A classical management principle says authority should equal responsibility when:
a) delegating work to a subordinate.
b) centralizing organizational decisions.
c) empowering subordinate employees.
d) employing strategic alliances.

Ans: a
Bloom’s: Comprehension
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are increasing delegation and empowerment.
AACSB: Analytic

40. A manager from LMT Corporation allows her employees to do their jobs as they see fit. This
scenario illustrates the concept of:
a) span of control.
b) centralization.
c) empowerment.
d) organizational design.

Ans: c
Bloom’s: Application
Level: Medium
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are increasing delegation and empowerment.
AACSB: Reflective Thinking

41. To create an empowering environment, a manager should avoid:

a) allowing employees to make decisions themselves.
b) taking suggestions and ideas from subordinates.
c) giving workers a chance to take the initiative in solving problems.
d) closely supervising and regulating the work process.

Ans: d
Bloom’s: Comprehension
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are increasing delegation and empowerment.
AACSB: Analytic

42. A(n) __________ emphasizes formal authority, rules, order, fairness, and efficiency.
a) organic organization
b) horizontal structure
c) decentralized organization
d) bureaucratic organization

Ans: d
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are becoming more horizontal and adaptive.
AACSB: Analytic

43. Which of the following organizational designs is more bureaucratic and has a vertical
structure?
a) Organic design
b) Mechanistic design
c) Matrix design
d) Empowered design

Ans: b
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are becoming more horizontal and adaptive.
AACSB: Analytic

44. Organizations that are most likely to have centralized management are:
a) empowered organizations.
b) organic organizations.
c) mechanistic organizations.
d) matrix organizations.

Ans: c
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are becoming more horizontal and adaptive.
AACSB: Analytic

45. __________ are adaptive, using a decentralized and horizontal structure.

a) Classical designs
b) Mechanistic designs
c) Bureaucracies designs
d) Organic designs

Ans: d
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are becoming more horizontal and adaptive.
AACSB: Analytic

46. Which of the following statements is true of organizations with a mechanistic design?
a) They are not bureaucratic.
b) They are easily adaptable to less-predictable situations.
c) They handle change better than organizations with an organic design.
d) They thrive in stable environments.

Ans: d
Bloom’s: Comprehension
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are becoming more horizontal and adaptive.
AACSB: Analytic

47. Informal structures and interpersonal networks are more likely to be the characteristics of
a(n) __________ .
a) functional design
b) vertical design
c) organic design
d) bureaucratic design.

Ans: c
Bloom’s: Comprehension
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are becoming more horizontal and adaptive.
AACSB: Analytic

48. __________ allows a worker to complete a full-time job in less than five days.
a) A flexible working hours policy
b) A compressed workweek
c) Job sharing
d) Telecommuting

Ans: b
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are using more alternative work schedules.
AACSB: Analytic

49. Which of the following alternate work arrangements involves using information technology
to work at home or outside the office?
a) Job sharing
b) Telecommuting
c) Compressed workweeks
d) Flexible working hours

Ans: b
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are using more alternative work schedules.
AACSB: Technology

50. At AZN Media Inc., each job is split between at least two people. This scenario illustrates:
a) job enlargement.
b) job enrichment.
c) job sharing.
d) teamwork.

Ans: c
Bloom’s: Application
Level: Medium
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are using more alternative work schedules.
AACSB: Reflective Thinking

True/False

51. Controlling arranges people and resources to work toward a goal.

Ans: False
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Understand organizing as a managerial responsibility.
Section Reference: Organizing is one of the management functions.
AACSB: Analytic

52. An organization chart describes a company’s mission.

Ans: False
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Understand organizing as a managerial responsibility.
Section Reference: Organization charts describe the formal structures of organizations.
AACSB: Analytic

53. The informal structure of an organization is also known as a shadow organization.

Ans: True
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Understand organizing as a managerial responsibility.
Section Reference: Organizations also have informal structures.
AACSB: Analytic

54. The essence of the functional chimneys problem is that the subunits of an organization
compete among themselves.

Ans: True
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Functional structures group together people using similar skills.
AACSB: Analytic
55. The three types of divisional structures are geographical structures, customer structures,
and functional structures.

Ans: False
Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Divisional structures group together people by products, customers or
locations.
AACSB: Analytic

56. A cross-functional team structure has no functional supervisor.

Ans: False
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Matrix structures combine the functional and divisional structures.
AACSB: Analytic

57. The key feature of a network structure is a minimal core staff, with as much of the support
activity contracted out as possible.

Ans: True
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Network structures extensively use strategic alliances and outsourcing.
AACSB: Analytic
58. A basic principal of management is that, “When delegating, authority should equal
responsibility.”

Ans: True
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are increasing delegation and empowerment.
AACSB: Analytic

59. A flexible and adaptive organization is most likely the outcome of an organic design.

Ans: True
Bloom’s: Comprehension
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are becoming more horizontal and adaptive.
AACSB: Analytic

60. A flexible working hours policy allows employees to work whenever they want.

Ans: False
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are using more alternative work schedules.
AACSB: Analytic

Fill-in
61. Once goals are set in the planning phase of an organization, __________ puts people and
resources in place to carry them out.

Ans: organizing
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Understand organizing as a managerial responsibility.
Section Reference: Organizing is one of the management functions.
AACSB: Analytic

62. A(n) __________ is a diagram of positions and reporting relationships within an

organization.

Ans: organization chart

Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Understand organizing as a managerial responsibility.
Section Reference: Organization charts describe the formal structure of organizations.
AACSB: Analytic

63. __________ identifies the informal structures and their embedded social relationships that
are active in an organization.

Ans: Social network analysis

Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Understand organizing as a managerial responsibility.
Section Reference: Informal structures have good points and bad points.
AACSB: Analytic

64. Separating people to perform different tasks that aggregate into a unified whole is known
as the __________.
Ans: division of labor
Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Understand organizing as a managerial responsibility.
Section Reference: Organization charts describe the formal structure of organizations.
AACSB: Analytic

65. The shadow organization that operates within a formal organization is known as a(n)
__________.

Ans: informal structure

Bloom’s: Knowledge
Level: Easy
Learning Objective 1: Understand organizing as a managerial responsibility.
Section Reference: Organizations also have informal structures.
AACSB: Analytic

66. A significant problem with functional organizations is the lack of communication between
the various functional areas. This problem is known as the __________.

Ans: functional silos problem or functional chimneys problem

Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Functional structures group together people using similar skills.
AACSB: Analytic

67. The structural approach that attempts to generate the advantages of both the functional
and divisional forms is the __________.

Ans: matrix structure

Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Matrix structures combine the functional and divisional structures.
AACSB: Analytic

68. __________ combine members from different departments to work on a common task.

Ans: Cross-functional teams

Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Matrix structures combine the functional and divisional structures.
AACSB: Analytic

69. __________ group together people and jobs that serve the same customers or clients.

Ans: Customer structures

Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Divisional structures group together people by products, customers, or
locations.
AACSB: Analytic

70. Network structures use __________ to dramatically reduce the need for full-time staff.

Ans: strategic alliances

Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Network structures extensively use strategic alliances and outsourcing.
AACSB: Analytic
71. Network strategies implemented through the use of information technologies create
__________.

Ans: virtual organizations

Bloom’s: Knowledge
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Network structures extensively use strategic alliances and outsourcing.
AACSB: Analytic

72. A(n) __________ uses permanent and temporary cross-functional teams to improve lateral
relations.

Ans: team structure

Bloom’s: Knowledge
Level: Easy
Difficulty: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Team structures use many permanent and temporary teams.
AACSB: Analytic

73. With __________, top management allows lower levels to help make decisions on matters
where they are best prepared or informed.

Ans: decentralization
Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are increasing decentralization.
AACSB: Analytic
74. __________ give employees some choice in daily work hours.

Ans: Flexible working hours

Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are using more alternative work schedules.
AACSB: Analytic

75. A(n) __________ is a place where telecommuters share office space outside the home.

Ans: co-working center

Bloom’s: Knowledge
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are using more alternative work schedules.
AACSB: Analytic

Essay

76. As a manager of a new marketing branch of a company, you will be supervising 30

employees that have been transferred from other branches of the company. These employees
have a preexisting structure of informal relationships because they have worked together in the
past. How will you identify and use this structure of informal relationships to effectively
manage this new branch?

Ans: Student answers will vary.

Bloom’s: Synthesis
Level: Hard
Learning Objective 1: Understand organizing as a managerial responsibility.
Section Reference: Organizing is one of the management functions.
AACSB: Analytic

77. Why are network structures, given their efficiency, not more prevalent? As a manager,
would you use a network structure? Give reasons.

Ans: Managing a network of outside contractors can be a very difficult communication task.
Furthermore, there is less control over the contractors than in a traditional structure.
This lack of control can be critical in crisis situations. Problems with network structures include
the management complications of having to deal with a vast and sometimes shifting network of
contracts and alliances. They also include the uncertainties associated with reliance on outside
contractors for key supplies and services. When one part of the network breaks down or fails to
deliver, the entire system may suffer the consequences.
Student answers will vary.
Bloom’s: Evaluation
Level: Hard
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Network structures extensively use strategic alliances and outsourcing.
AACSB: Analytic

78. Describe a functional structure and some of its important advantages and disadvantages.

Ans: A functional structure is one that groups employees by their skills and the nature of their
work or the functions that they perform. Some examples of functional departments are
marketing, finance, and engineering.
The advantages of a functional structure are economies of scale, high level of skill in each
functional area, on the job training, and a clear career path in each functional area.
The primary disadvantage is a lack of communication across functional areas, often referred to
as the functional chimneys problem. Another significant disadvantage is negative competition
amongst the department managers as they struggle for power. This can result in the various
departments building fiefdoms or silos and isolating themselves from the other departments.
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Functional structures group together people using similar skills.
AACSB: Analytic

79. Describe a division structure and the various substructures within it.

Ans: A division structure groups people working in the same product line or geographical area
or with similar customers. The three most common division structures are:
Product – The focus here is on similar products or services. The advantage is a high level of
product knowledge within the organization.
Geographical – The focus is on geographical territories. The advantage is knowledge of the local
culture.
Customer – The focus is on key accounts. The advantage is a thorough knowledge of the
customer’s needs and operations.

Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Divisional structures group together people by products, customers, or
locations.
AACSB: Analytic

80. What is a matrix structure? What are the two structures from which it is formed? What are
the advantages and disadvantages of a matrix structure?

Ans: A matrix structure is just what the name implies, it is a matrix of a functional structure and
a divisional structure. The matrix is filled in by functional personnel who are assigned to both
functional managers and project managers. These groups make up what are called cross-
functional teams.
The main advantage of the matrix structure is that the communication barriers that exist in a
functional organization, often called the functional chimneys problem, are eliminated by the
cross-functional teams. This allows for open communication and decision making at the lowest
possible level.
The main disadvantage of the matrix structure is that the team members report to two
managers, a functional manager and a project manager, and may get caught up in between if
the two managers are in conflict with each other. The solution to this problem is a strong
general manager who can resolve the conflict.
Bloom’s: Comprehension
Level: Easy
Learning Objective 2: Identify common types of organizational structures.
Section Reference: Matrix structures combine the functional and divisional structures.
AACSB: Analytic

81. How is organizational height related to span of control?

Ans: Organizations are either tall or flat depending on the levels of management and the
distance between the top management and the lower levels. Taller organizations are generally
viewed as less efficient, less flexible, and less customer sensitive. Modern organizations aspire
toward attaining a flat structure.

One of the things affected when organizations do get flatter is span of control—the number
of persons directly reporting to a manager. When span of control is narrow, a manager
supervises only a few people. Taller organizations have many levels of management and
narrow spans of control. A manager with a wide span of control supervises many people.
Flatter organizations with fewer levels of management have wider spans of control.
Bloom’s: Analysis
Level: Medium
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are becoming flatter, using fewer levels of management.
AACSB: Analytic

82. How is decentralization related to delegation? Explain the three steps to be followed while
delegating jobs to others.

Ans: Decentralization brings with it another trend that is good for organizations and their
members: increased delegation and empowerment. Delegation is the process of entrusting
work to others by giving them the right to make decisions and take action. Delegation sets the
foundation for decentralization by following these three steps:
1. Assigning responsibility by explaining tasks and expectations to others
2. Granting authority by allowing others to act as needed to complete tasks
3. Creating accountability by requiring others to report back on the completed tasks
Bloom’s: Analysis
Level: Medium
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are increasing delegation and empowerment.
AACSB: Analytic

83. Discuss the differences between the mechanistic design and the organic design.

Ans: The mechanistic design thrives in stable environments, whereas the organic design
performs best in rapidly changing and uncertain situations. The mechanistic design is good at
doing routine things, whereas the organic design is better adapted to handle change.
Organizations with mechanistic designs typically operate as “tight” structures of the traditional
vertical and bureaucratic form, whereas an organic organizational design is more horizontal and
less vertical than its mechanistic counterpart. The mechanistic design ensures product efficiency,
whereas the organic design is good for creativity and innovation.
Bloom’s: Comprehension
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are becoming more horizontal and adaptive.
AACSB: Analytic

84. Describe some common alternate work schedules employed by modern organizations. List
the advantages of each.

Ans: A compressed workweek allows a worker to complete a full-time job in less than the
standard five days of 8-hour shifts. The most common form is the “4–40,” that is, accomplishing
40 hours of work in four 10-hour days. Its advantages include improved morale, lower overtime
costs, less absenteeism, and decreased use of sick leave.
The term flexible working hours, also called flextime, describes any work schedule that gives
employees some choice in daily work hours. A typical flextime schedule offers choices of
starting and ending times, while still putting in a full workday. The flexibility provides
opportunities to attend to personal affairs such as parenting, elder care, medical appointments,
and home emergencies.
More and more people now do some form of telecommuting. They spend at least a portion of
scheduled work hours at home or outside the office linked with co-workers, customers, and
bosses by a variety of information technologies. From the employer side, it makes for savings in
office space and real estate. Positives on the employee side include freedom to be your own
boss and having more free time.
Yet another flexible scheduling option is job sharing, where two or more persons split one full-
time job. This often involves each person working one-half day, but it can also be done via
weekly or monthly sharing arrangements. Both the employees and the organizations benefit
when talented people who cannot work full days or weeks are kept in or brought back into the
workforce.
Bloom’s: Comprehension
Level: Easy
Learning Objective 3: Recognize current trends in organizational design.
Section Reference: Organizations are using more alternative work schedules.
AACSB: Analytic