Chapter 10--Designing Adaptive Organizations

Student: ___________________________________________________________________________

The deployment of organizational resources to achieve strategic goals refers to organizing. True
False
Organizing defines what to do while strategy defines how to do it. True False
The framework in which the organization defines how tasks are divided, resources are deployed
and departments are coordinated is called organizational structure.
True False
A organizational map is a visual representation of an organization's structure, showing
communication and lines of power.
True False
Despite the apparent advantages of specialization, many organizations are moving away from
this principle.
True False
The principle of unity of command suggests that managers within an organization should reach
agreement on the goals and objectives of the organization.
True False
Authority is the right to use resources, make decisions and issue orders in an organization. True
False
The duty to perform the task or activity an employee has been assigned is called accountability.
True False
Most organizations today discourage managers to delegate authority to the lower levels given
the challenges to meet customer needs and adapt to the environment.
True False
10 The acceptance theory of authority argues that managers have authority because employees
do not have a choice in choosing to accept their commands.
True False

11 Line departments perform tasks that reflect the organizations primary goal and mission.
True False
12 The right to advise, recommend, and counsel in the staff specialists' area of expertise is
included in staff authority.
True False
13 The number of employees reporting to a supervisor is his or her span of management.
True False
14 Traditional views of organizational design recommend a span of management of about 7
to 10 subordinates per manager.
True False
15 Many hierarchical levels and a correspondingly narrow span of management refers to a flat
structure.

True False
16 The trend in recent years has been toward narrower spans of control as a way to facilitate delegation.

True False
17 A tall structure is a management structure characterized by an overall narrow span of
management and a relatively large number of hierarchical levels.
True False
18 Certainty in the environment is usually associated with decentralization.
True False
19 The basis for grouping positions into departments and departments into the total
organization is referred to as departmentalization.
True False
20 For companies to operate effectively, the amount of centralization or decentralization
should fit the firms strategy.
True False
21 At Fox End, people are grouped together in departments by common skills and work
activities, including a sales department and a production department. This is an example of
vertical functional approach.
True False

22 The functional structure offers a way to decentralize decision making and provide direction
from the teams in the field.
True False
23 Because the chain of command converges at the top, the functional structure provides a way
to decentralize decision making and provide unified direction from all managers.

True False
24 Quick response to external changes is an advantage of vertical functional structure.
True False
25 Divisions are created, in functional structures, as self-contained units with separate
functional departments for each division.
True False
26 The divisional structure encourages decentralization.
True False
27 In a geographic-based structure, all functions in a specific country or region report to the
same division manager.
True False
28 With a matix structure, the entire organization is made up of horizontal teams that coordinate
their work and work directly with customers to accomplish the organizations goals.

True False
29 Aspects of both functional and divisional structures simultaneously in the same part of the
organization are combined in the virtual network approach.
True False
30 The horizontal structure provides traditional control within functional departments, and the
vertical structure provides coordination across departments.
True False
31 The confusion and frustration caused by the dual chain of command is a major problem of
the matrix structure.
True False
32 The overseer of both the product and functional chains of command, responsible for the
entire matrix is the matrix boss.
True False

33 The modular approach is similar to virtual networking.

True False
34 The divisional structure fosters excellent coordination within divisions, but coordination
across divisions is often poor.
True False
35 In the divisional approach, coordination across divisions is great whereas coordination
within divisions is often poor.
True False
36 The matrix approach can be highly effective in a complex, rapidly changing environment
in which the organization needs to be flexible and adaptable.
True False
37 One major disadvantage of the virtual network approach is the lack of hands-on control.
True False
38 Coordination is the quality of collaboration across departments.
True False
39 Reengineering is the outcome of information and cooperation.
True False
40 A project manager is a person responsible for coordinating the activities of several
departments for the completion of a specific project.
True False
41 Reengineering basically means preserving the past by establishing the sequence of
activities by how work was done.
True False
42 The radical redesign of business processes to achieve dramatic improvements in cost,
quality, service, and speed is called reengineering.
True False
43 The distinctive feature of the project manager position is that the person is not a member
of one of the departments begin coordinated.
True False

44 When an organization uses a differentiation strategy, it strives for internal efficiency.

True False
45 The pure functional structure is appropriate for achieving internal efficiency goals.
True False
46 A vertical structure that emphasizes specialization and centralization is appropriate when
environmental uncertainty is high.
True False
47 A rigid, vertical structure in an uncertain environment prevents the organization form
adapting to change.
True False
48 The functional structure is appropriate when the primary goal is innovation and flexibility.
True False
49 Small-batch production is distinguished by standardized production runs.
True False
50 . Which of the following refers to the deployment of organizational resources to achieve strategic
goals?

A.
Planning
B.
Controlling
C.
Organizing
D.
Leading
E
Strategic
management
Strategy defines _____ to do (it) while organizing defines _____ to do (it).
A.

how; what

B how;
why
C what;
how
D what;
.
why
E when;
what

Organizational structure includes which of these?

A.

The set of formal tasks

assigned to individuals

B The set of formal tasks assigned to

departments
CThe design of systems to ensure effective
coordination of employees across departments

Formal reporting relationships

E All of these are part of organizational
structure.
Organization structure is defined as the:
visual repres entati on of the organi zation

.
framework in which the organization defined
how tasks are divided, resources are deployed,
and departments are coordinated. C division of

. labor. unbroken line of authority that links all

individuals in the organization. E none of

these.

The organization chart:

A.

shows the c

vertical stru
is a visual representation of the organization's structure.
details the formal reporting relationships that exist within an

D.

all of these.

E both shows the characteristics of the organization's vertical st

of the organization's structure.

The _____ delineates the chain of command, indicates
departmental tasks and how they fit together, and provides
order and logic for the organization.
manage ment
chart B employee

directory
C
structural table
.
D administrative
chart
E organizational
chart
Which of the following refers to the degree to which
organizational tasks are subdivided into individual jobs?
Multit asking

B Lines of
. authority
C Work
. specialization
D
Autonomy
.
E Team
structure

When work specialization is extensive:

employee s perform a single task.

B employees perform
. many tasks.
C employees are often highly challenged.

D employees are
. often inefficient.
E jobs tend to be
large.
Louise works in the manufacturing department at
Ice Sculptures. The work in Louise's department
is low in task specialization. As a result, Louise:
usually performs a single task.

B does a variety of tasks and activities.

C. is often bored. D is rarely
challenged.
E generally goofsoff.
_____ is also referred to as work specialization.
Division of labor
Unity of command
Scalar chain
Esprit de corps
E Virtual network
approach

Jacob was recently looking at his company's

organization chart in an attempt to discover
who reports to whom. Jacob is studying his
organization's:
degree of formali zation.

B amount of
. differentiation.
C degree of
. centralization.
D chain of
. command.
E division of
labor.
Unity of command and the scalar principle are
both closely related to the:
amount of work speciali zation in an organiz ation.

B degree of
. formalization.
C chain of
. command.
Damount of bureaucracy in the organization.
E matrix
structure.

_____ means that each employee is held

accountable to only one supervisor.
Scalar
principle B Unity of command
.
C Work
specialization
D Division of labor
.
E Span of
management
The formal and legitimate right of a manager to
make decisions is _____.
dele gati on

B responsi
. bility
C
authorit
.
y
Dspan of
managem
ent
E
leadersh
ip
_____ refers to a clearly defined line of authority
in the organization that includes all employees.
Scalar principle

B Unity of command
.
C Work
specialization
D Division of labor
.
E Span of
management

10

Rebecca works for a company that has clearly

defined lines of authority. Each employee knows
that he or she has authority and responsibility for
a distinct set of tasks. Employees are also aware
of the companys reporting structure as well as
successive management levels all the way to the
top. Rebeccas company follows which principle?
Specializat ion principle

B Unity of command
. principle
C. Scalar principle D Authority principle
.
E Responsibility
principle
How does managerial authority flow through
the organizational hierarchy?
A.
Vertically
Sporadically
Horizontally
In a circular fashion
E Authority is static - it does not
flow
The people with authority and responsibility are
subject to reporting and justifying task
outcomes to those above them in the chain of
command. This is called _____.
dele gati on

B line
.

authorit y

C staff
authorit y

D account
. ability
E hierarc
hy

11

Which of the following characteristics

distinguishes authority?
A.
It is vested in
people, not
positions.
Subordinates accept it.
C It flows across the horizontal
hierarchy.
D It emerges from the organizational
values.
E Individuals are born with this
power.
Gina wishes to transfer authority and responsibility
to her subordinates. This process is known as:
account ability.

B
coordination.
.
C.
delegation.
D departmentaliz
. ation.
E passing the
buck.
Which of the following typically is NOT
considered a staff department?
Strategic planning

Accounting
Manufacturing
Human resources E Research and

. development
Which department performs tasks that reflect the
organization's primary goals and mission?

Line
Staff
Primary
Functional
E Strategic
planning

12

_____ departments include all of those that provide

specialized skills in support of _____ departments.

Line; staff
Staff; line C Primary;

. functional D Functional;

. primary E Line;
functional
Carly's Clothes, Inc. manufactures children's clothes.
Which of the following departments for Carly's Clothes
can be considered a line department?
Finance departmen t

B Human Resources
. department
C Research and development department

D Manufacturing
. department E Marketing
department
Which of the following refers to the number of
employees reporting to a supervisor?
The line of auth ority
BThe span of managem ent
CThe chain of command
DThe managem ent chain

E Delegati
on
13

Traditionally, a span of management of about _____

has been recommended.

thr ee

fiv
e C fifte
en
D seve
n
E twen
ty
Shoshanna is manager of a customer service
firm where she oversees five subordinates. To
help her subordinates learn more about the
different roles within the company, Shoshanna
regularly assigns them tasks that are not part of
their normal routine. This is an example of:
responsibilit y

delegation
authority
D
chain of command
.
E irrational decision
making

14

Dustin's subordinates are highly trained and all

perform similar tasks. Brittany's subordinates
are spread over two locations and she has little
available in the way of support systems. Which
of the following statements is most correct?
Nicho le's span of mana geme nt can be larger than
Kevin' s.
Nichole will have problems with unity of command.
Kevin's span of management can be larger than
Nichole's. Kevin has more problems with work
specialization

.
E None of
these

15

Which of the following organizations have a flat

structure compared to others?
A.
Organization A with
eleven hierarchical
levels
B Organization B with three hierarchical
levels
C Organization C with eight hierarchical
levels
D Organization D with six hierarchical levels
.
E Organization E with seven hierarchical
levels
Which of the following factors is NOT associated with
larger span of control?
A.
Work performed by
subordinates is stable and
routine.
Subordinates perform similar work tasks.
C Subordinates are located at various different locations.

.
D Subordinates are highly trained and need little direction.

.
E Rules and procedures defining task activities are
available.
Relative to a flat organizational structure, a tall structure has a
_____ span of management and

_____ hierarchical levels.

wide
;
fewe r

B narrow;
. fewer
C narrow;
. wider
D narrow;
. more
E wide;
more

16

_____ is the trend in recent years.

Great er work specia lizatio n

B Less
. delegation CWider spans
of management
DNarrower spans of management

E Tall
structure
Barney and Betty work at Mountain Peak, Inc.
Although they both work on the assembly line, they
have the authority to make many decisions about
their job. Mountain Peak can be said to have:
a high degree of decentr alizatio n.

B a wide span of management.

C a high degree of centralization.

Da narrow span of management.

E no
management.

17

_____ means that decision authority is located

near the _____ of the organization.
Centr alizati on; botto m

B Decentraliza
. tion; top
C Centralizati
. on; top
D Centralizatio
. n; middle
E None of
these
Change and uncertainty in the environment are
usually associated with _____.
work speciali zation

B decentralizati
on
C centralization
.
D tight vertical
. control
E division of
labor
Which of the following is the basis for grouping
positions into departments and departments
into the total organization?
Depar tment alizati on

B Centralizati
on
C Decentraliz
. ation
D Formalizati
on
E Specializati
on
18

Jacob, a customer service representative for AB

Retailers, has seven levels of management
between himself and the companys CEO. In
contrast, his friend Rhonda, a customer service
representative for YZ Retailers, has only four levels
of management between her and the company
CEO. Compared to YZ, Jacobs company has what
type of organizational structure?

Nar row

Wide
Flat
Tall
E Identi
cal
The functional, _____, and _____ are traditional
approaches that rely on the chain of command to
define departmental groupings and reporting
relationships along the hierarchy.

divisio nal, teams

B divisional,
matrix
C matrix, teams
.
D matrix,
networks
E teams,
networks
The use of teams may lead to too much:
A.
division of
labor.
B.
decentralization.
Cauthority and responsibility in top management's
hands.

D. formalization. E narrow span of

.
management.

19

In times of crisis or risk of company

failure, authority should be:
A d
e c e n tr a li z e d

.
cent raliz ed at the bott om. cent rali zed at
the top. spre ad thro ugh a wide span of man
age men t.

E fl
at
.

20

When departments are grouped together on

the basis of organizational outputs, the
organization is using a:
functional structure.

B
matrix structure.
.
C divisional
structure.
D virtual network
. structure. E team-based
structure.
Self-contained unit structure is a term used for:
divisional structure.

B
functional structure.
.
term structure.
matrix structure. E virtual network

. structure.
Relative to the functional structure, the
divisional structure:
A.

encourages decentralization.

B has a higher degree of work

specialization.
C has a more pronounced division of
labor.
D has excellent coordination across
. departments.
E results in an efficient use of
resources.

21

Theresa works in an organization where

coordination across organizational units is poor
and the units perceived themselves to be in
competition with one another for organizational
resources. These characteristics are consistent
with which of the following structures?
A matrix structure

B A functional structure
.
C
A divisional structure
.
D A team-based structure
.
E A virtual network
structure
All functions in a specific country or region report
to the same division manager in _____ divisions.
fun ctio
nal B matri

x
geograp hic-

based D teams
.
E networ
ks
Global companies often use a _____ structure
to achieve simultaneous coordination of
products across countries.
functi
onal B divisional
.
C. matrix D productbased
E processbased

22

A formal chain of command for both functional and

divisional relationships is provided by the _____

approach to structure.
matri x

B vertical
. functional
C division
al
D
product
.
E teambased
Kent works at the Tick Tock, Inc. He has two bosses, one a
functional manager and the other a divisional manager. Tick
Tock, Inc. has a _____

structure.
fun cti on al

B divisi
. onal C geogr
. aphic
D matri
x
E produ
ct
Disadvantages of the virtual network approach
include:
A. a lack of hands-on control. B the possibility of
losing an important part of the
organization.
weakened employee loyalty.
all of these.
E a lack of hands-on control and weakened employee
loyalty.

23

Salta Communications is a global

telecommunications company that has
operations on four continents. The CEOs
direct supervisors include VPs for the North
American South American, European, and the
Asian divisions. Salta can best be described as
using what organizational structure?
Netw ork

Matrix
C Function
al
D Division
al
E Geograp
hic
The matrix structure violates which of the
following principles of management?
Unity of direction

B Unity of command
.
C Work
specialization
D Division of labor
.
E Span of
management
All of the following are the major disadvantages
of the matrix structure EXCEPT:

A.
it generates a
large amount
of conflict.
B managers spend much time
. resolving conflict.
C the confusion caused by the dual chain of
command.

Dthe power imbalance that can result between

the sides of the matrix.
E enlarged tasks for
employees.

24

Juan is a top manager at I.F.L., a matrix

organization. He oversees both the product and
functional chains of command, and is responsible for
maintaining a power balance between the two sides
of the matrix. Juan is a _____.

polit ical lead

er B function

. al leader
C division
. al leader
D matrix
. leader
E top
leader
The _____ is the product or functional boss,
who is responsible for one side of the matrix.
matrix
boss B production

supervisor
C department boss
.
D. top leader E two-boss
employee

25

_____ teams are brought together as a formal

department in the organization.
A C
ro ss

fu n ct io n al
B Per man ent C For
. mal
D Ad
hoc
E Ta
sk
Walt works for a large company. Recently, his
organization began to contract out such functions
as training, engineering, and computer service.
This approach is consistent with a _____ structure.
fu nct io

nal
B
tea
.
m
C
divisi
.
onal
Dvirtual netwo rk

E servi
ce

26

The _____ is an organization structure that

divides the major functions of the organization
into separate companies.
diversific ation approach

B
team approach
.
C virtual network
. approach
D
BCG approach
.
E functional
approach
The _____ is an organization structure that
divides the major functions of the organization
into separate companies and coordinates their
activities from a small headquarters organization.
diversific ation approach

B
team approach
.
C virtual network
. approach
D
BCG approach
.
E functional
approach
In the _____ structure, the organization is
viewed as a central hub surrounded by a
network of outside specialists which are
sometimes spread all over the world.
virtu al netw ork

matrix
C function
al
D division
al
E geograph
ic
27

According to MANAGER'S SHOPTALK in

Chapter 10, all of the following are effective
ways for a manager to delegate EXCEPT:
delegate the whole task.

B select the right person.

.
C save feedback for completion of the project.
D evaluate and reward
. performance.
E give thorough
instruction.
In the _____ approach, a manufacturing company
uses outside suppliers to provide entire chunks of a
product, which are then assembled into a final
product by a handful of workers.

vir tu al ne tw or
k
B mod
.
ular
Cvirtual
organi
zation
D
tea
.
m
E
matr
ix

28

resulting economies of scale.

enlarged tasks for employees.

The biggest advantage to a virtual network

approach is _____ and _____ on a global scale.
flexibility; competitiv eness

B coordination;
organization
C communication;
. organization
D communication; no
cost
E flexibility;
coordination
All of the following are advantages of a
functional structure EXCEPT:
A. economies of scale. B excellent coordination
between functions.
.
C in-depth skill specialization and
development.
D high quality technical problem solving.
.
E career progress within functional
departments.
An advantage of functional structures is the:
A.
B
.
C easy pinpointing of responsibility for
. product problems.
D development of general
management skills.
E flexibility in an unstable
environment.

29

Which of the following structures is the

leanest of all organization forms because
little supervision is required?
Function al approach

B Virtual network
. approach
C
Team approach
.
D Matrix approach
.
E Divisional
approach
Shooting Star, Inc. has slow response to
external changes, centralized decision
making, and poor coordination across
departments. It is likely structured:
along divisi onal lines.

B along
.

functional lines.

Cbased on the team approach.

Dbased on the virtual network approach.
E none of
these.

30

Organ Rentals Corporation has been having

numerous problems. Communication across
departments is poor and decisions are backing up at
the top of the organization. Organ Rentals uses a

_____ structure.
geog raphi c

product
C function
al
D.
matrix
E teambased
All of the following are advantages of a
divisional structure EXCEPT:
A.
high concern for
customers' needs.
B fast response, flexibility in an unstable
environment.
C emphasis on overall product and division goals.

.
D development of general management skills.
.
E there is little duplication of services across
divisions.
Which is an advantage of the divisional structure?

A.

Concern for customers'

needs is high.
B There is little duplication of services across
divisions.
C There is good coordination across divisions.
.
D Top management retains tight control of the
. organization.
E There is no competition for corporate
resources.

31

Advantages of the matrix structure include:

it incre ases empl oyee parti cipat

ion. Bit makes efficient use of human

resources. Cit works well in a changing
environmen t.
it develops both general and specialist
managemen t skills.

E all of
these.

32

Which of the following is(are) an advantage of

team structure?
Incre ased barri ers amo ng depa rtme nts
BUnplanned decentraliz ation
CTime and resources spent on meetings DLess
response time, quicker decisions

E All of
these
Stephanie works in one of seven research and
development departments at Tara's Terrace, Inc.
This would suggest that Tara's Terrace has a:
functio nal structur e.

B divisional
. structure.
C wide span of
. control.
D high degree of centralization.

E matrix
structure.

33

Which of the following is a contemporary approach to

structural design in departmentalization?
Functio nal

Divisional C Traditional

. divisions
D.
Teams
E Geographicbased
The team approach to departmentalization is a
response to:
A.

lack of participative teams.

centralized decision-making.
the competitive global environment.
all of these.
E both lack of participative teams and centralized decision-

making.

34

Coordination is defined as:

the abilit y of the orga

nizat ion to prod uce
timel y prod ucts.
the quality of collaboratio
n across department s.

C differenti
. ation.
the quantity of goods
produced by the
organizatio n.

E all of
these.

35

Innovative Creations Corporation is designed

along functional lines. New product development is
very slow and the process is plagued by many
problems. One of the problems is that the people
in marketing never communicate with the people in
production. This is an example of poor _____.
coor dinat

ion B plannin
g
C motivati
ng
D
leading
.
E
controlli
ng
Which of the following happens as
organizations grow?
Positi ons and depart ments are delete d.
BManagement layers are eliminated to save cost.
Managers have to find ways to tie different
departments. DTop
management becomes more autocratic.

E None of
these.

36

When the organization is structured along _____

lines, coordination is required.

functional
divisional
team
all of these
E functional or
divisional
The outcome of information and cooperation is

_____.
orga nizat ion

B plannin
g
C coordina
tion
D differenti
. ation
E controlli
ng
A task force is _____ committee(s) formed to
solve a specific problem.
a standi

ng
B a
permanent
C a
.
temporary
D all of
.
these
E none of
these

37

Marissa was recently assigned to a committee whose task is

to research new product opportunities. Once this group
generates a list of six or seven viable options, it will be
disbanded. This group is also known as a _____.

A.
team
B standing
. committee
C permanent
. committee
D
task force
.
E none of
these
Which of the following leads to strong coordination across
functional areas and greater flexibility in responding to changes
in the environments?
Reengine ering

Layoffs
Downsizing
D A temporary
. committee E An ad hoc
committee
Boars' Nest Distributors is continually hampered by an
inability to adapt to an unstable environment. Which of the
following is a plausible explanation as to why?
A.

Boars' Nest's structure is to

Boars' Nest's structure is too horizontal.

Boars' Nest uses a vertical structure.
D.
All of these.
E Both Boars' Nest's structure is too loose and structure is too

horizontal.

38

Makai's Marketing Mix (MMM) does not use its

resources wisely. The employees at MMM spend
too much time in meetings and not enough time
focusing on the task at hand. MMM's
management should consider changing the
organizational structure from _____ to _____.
A.

horizontal, vertical

B team based, horizontal

.
vertical, team based
mechanistic, rigid E team-based, virtual

. network
Flash Card Inc. recently underwent a significant
company-wide change that involved revision of its
manufacturing and leadership processes. The result of
this was a stronger emphasis on horizontal
coordination. This level of change is referred to as

_____.
reorganiz ation

reengineering
e-engineering
D strategic planning
.
E corporate
structuring
A(n) ____ is responsible for coordinating the
activities of several departments.
departme nt manager

line manager
C
project manager
.
D. operative E moderating
manager

39

Lisa is responsible for coordinating the efforts

of several different departments. Which of the
following titles best describes her position?
Departme nt manager

Middle manager
C First-level
supervisor
D
Project manager
.
E Chairman of the
board
Typically, project managers have authority over

_____ but not over _____ assigned to it.

people; the project

B the project;
people
C resources; the
. project
D people; other
. resources
E finances;
products
Which of the following is not an approach to
structural design that reflects different uses
of the chain of command?
Matrix approach

B Team-based approach
.
C. Process approach D Divisional approach
.
E Virtual network
approach

40

Kara's department is made up of people with similar

skills and work activities. Her organization uses the

_____ approach to departmentalization.

tea m-bas ed

Bhorizo ntal matrix C divisi

. onal
Dvertica l functio nal

E proce
ss
Mondavi Corporation has a finance
department, a marketing department, and a
production department. Mondavi:
uses a functional structure.

B has a geographic
. structure.
C uses a divisional
structure.
D uses product-based
. structure.
E uses a matrix
structure.
An organization strives for internal efficiency
with a(n) _____ strategy.
integra tion

B diversificati
on
C differentiati
on
D. defensive
E cost
leadership

41

With a(n) _____ strategy, the organization

attempts to develop innovative products
unique to the market.
diff eren tiati on

B integrat
ion
C reengin
. eering
D cost
leadersh ip

E defensi
ve
A pure functional structure is most appropriate
for achieving:
inno vatio n.

B differenti
. ation.
Cinternal efficiency goals.

D flexibilit
y.
E all of
these
Which of the following structures is most
consistent with a strategy of stability?
Team based structure

B Organic
structure
C Matrix
.
structure
D Functional
.
structure
E Learning
structure
42

The pure functional structure does not enable

the organization to be:
a cost leade r.

B
efficient.
.
C
flexible.
.
D.
stable.
E
all of
these.
Which of the following structures works best
in an uncertain organizational environment?
A tight structure

B A mechanistic
. structure
C A horizontal
structure
D A functional
. structure E A vertical
structure
A(n) _____ works best in a stable
organizational environment.
A.
loose organizational
structure
vertical structure
organic structure
horizontal structure
E loose organizational structure or an organic
structure

43

Which of the following is an incorrect fit in a

stable organizational environment?
A tight
structure B A rigid structure

.
C A functional
structure
D A horizontal
. structure E A vertical
structure
In _____ production, firms produce goods in
batches of one or a few products designed to
customer specification.
A se
rv ic
e Bcust omer
indu ced Cconti nuou
s proc ess
Dsma ll batc h

E ma
ss

44

Swift Move Facilities manufacturers two different

bicycle models. The company produces a high
volume of products using standardized
production runs. The company does very little
product customization. Swift Move uses what
type of technology structure?

A.
Service
production
Mass production
C
Large-batch production
.
D
Small-batch production
.
E Continuous process
production
Organizations such as Amazon.com, Google,
Facebook, and Priceline.com are examples of
firms that are based on:
A.

digital technology.

B. tangible output. C direct contact with

customers.
D mechanistic technology.
.
E products rather than
services.
In a _____ organization, the entire work flow is
mechanized in a sophisticated and complex
form of production technology.
A.

service production

mass production
large-batch production D small-batch production

.
E continuous process
. production

45

_____ refers to the fact that services are perishable and

cannot be stored in inventory.
Bound aryles sness

B Tangible
output
C Intangible
. output D Flexible
. operations
E Centralizati
on
Scenario - Javier Gomez
Javier is a veteran manager with Pixel International, Inc.
(PII). Recently PII purchased a small business in the printing
industry. Javier has been assigned the task of managing this
new acquisition and is currently deciding how best to design
its structure. Currently, employees are assigned to one of
three departments, including sales, production, and legal
defense.
In determining Javier's span of management, he should consider
all of the following EXCEPT:
a.

is the work perf

do subordinates perform similar tasks?

are rules and procedures defining task activities available?
do Javier's personal preferences and style favor a larger or small span?

all of these.

46

Scenario - Javier Gomez

Javier is a veteran manager with Pixel International, Inc.
(PII). Recently PII purchased a small business in the printing
industry. Javier has been assigned the task of managing this
new acquisition and is currently deciding how best to design
its structure. Currently, employees are assigned to one of
three departments, including sales, production, and legal
defense.

The analysis of whether the new division should be

centralized or decentralized should include all of the
following EXCEPT:
a.

the level of cha

corporate history and culture.

the threat of crisis or the risk of company failure.
the structure of competitors and customers.
all of these should be included.

47

Scenario - Javier Gomez

Javier is a veteran manager with Pixel International, Inc.
(PII). Recently PII purchased a small business in the printing
industry. Javier has been assigned the task of managing this
new acquisition and is currently deciding how best to design
its structure. Currently, employees are assigned to one of
three departments, including sales, production, and legal
defense.

Current departmentalization of Javier's new division can

be characterized primarily as:
a.

vertical functio

divisional.
horizontal matrix.
team-based.
none of these.

48

Scenario - Javier Gomez

Javier is a veteran manager with Pixel International, Inc. (PII). Recently PII purchased a small business in
the printing industry. Javier has been assigned the task of managing this new acquisition and is currently
deciding how best to design its structure. Currently, employees are assigned to one of three departments,
including sales, production, and legal defense.
If Javier organizes with a horizontal matrix structure, some potential advantages that he could anticipate include all of
the following, EXCEPT:
a.

a more efficient

greater flexibility and adaptability to a changing environment.

development of both general and specialist management skills.
decreased need for coordination among managers.
all of these are potential advantages.

The deployment of organizational resources to achieve strategic goals is known as _____.

________________________________________
The framework in which the organization defines how tasks are divided, resources are deployed, and
departments are coordinated is called _____.
________________________________________
The visual representation of an organization's structure is called the _____.
________________________________________
Division of labor is also known as _____.
________________________________________
The degree to which organizational tasks are subdivided into individual jobs is called _____.
________________________________________

49

The _____ is an unbroken line of authority that links all persons in an organization and
shows who reports to whom.
________________________________________
When each employee is held accountable to only one supervisor, it is called _____.
________________________________________
The _____ refers to a clearly defined line of authority in the organization that includes all employees.

________________________________________
_____ is the formal and legitimate right of a manager to make decisions, issue orders, and
allocate resources to achieve organizationally desired outcomes.
________________________________________
The three characteristics of authority are that it must be _____, _____, and _____.
________________________________________
_____ is the duty to perform the task or activity an employee has been assigned.
________________________________________
_____ means that the people with authority and responsibility are subject to reporting and
justifying task outcomes to those above them in the chain of command.
________________________________________
_____ is the process managers use to transfer authority and responsibility to positions below
them in the hierarchy.
________________________________________
_____ departments perform tasks that reflect the organization's primary goal and mission, while _____

departments include all those that provide specialized skills in support of _____ departments.

________________________________________
_____ means that people in management positions have formal authority to direct and
control immediate subordinates.
________________________________________
The _____ is the number of employees reporting to a supervisor.
________________________________________
A(n) _____ structure has a wide span, is horizontally dispersed, and has fewer hierarchical levels.

________________________________________
50

A(n) _____ structure has an overall narrow span and more hierarchical levels.
________________________________________
With _____ decision authority is pushed downward to lower organization levels.
________________________________________
_____ means that decision authority is located near the top of the organization.
________________________________________
A(n) ______ structure is the grouping of positions into departments based on similar skills,
expertise, and resource use.
________________________________________
The _____ structure occurs when departments are grouped together based on organizational outputs.

________________________________________
The divisional structure is sometimes called a(n) _____, _____, or _____.
________________________________________
An alternative for assigning divisional responsibility is to group company activities by _____.
________________________________________
The _____ combines aspects of both functional and divisional structures simultaneously, in
the same part of the organization.
________________________________________
_____ teams consist of employees from various functional departments who are responsible
to meet as a team and resolve mutual problems.
________________________________________
In the _____ approach of structural design, departments are independent, contracting
services to the central hub for a profit.
________________________________________
The _____ structure means that the firm subcontracts many of its major functions to separate companies
and coordinates their activities from a small headquarters organization.

________________________________________
The _____ approach is when a manufacturing company uses outside suppliers to provide large
components of the product, which are then assembled into a final product by a few workers.

________________________________________

51

The quality of collaboration across departments is known as _____.

________________________________________
A(n) _____ is a temporary team designed to solve a short-term problem involving several
departments.
________________________________________
A(n) _____ is a person who is responsible for coordinating the activities of several
departments for the completion of a specific project.
________________________________________
_____ is the radical redesign of business processes to achieve dramatic improvements in
cost, quality, service, and speed.
________________________________________
A(n) _____ structure is most appropriate when the external environment is stable.
________________________________________
_____ refers to services that are perishable and, unlike physical products, cannot be stored
in inventory.
________________________________________
List the five approaches to departmentalization.

List three disadvantages of the divisional structure.

52

List the advantages of the virtual network structure.

List the three basic types of production technology.

Describe service technology.

Compare and contrast authority, responsibility, accountability, and delegation.

Briefly explain the concept of line and staff departments and authority.

53

Define span of management and explain if there is an ideal span of management.

List the factors that are associated with less supervisor involvement and thus larger spans of control.

Identify the three factors that typically influence centralization versus decentralization.

What is the horizontal matrix approach to departmentalization and what are its main advantages?

What is(are) the difference(s) between cross-functional and permanent teams?

54

What is the team approach to departmentalization and what are its main disadvantages?

Describe reengineering and what it involves.

Define task forces and project management.

55

Chapter 10--Designing Adaptive Organizations Key

TRUE
FALSE
TRUE
FALSE
TRUE
FALSE
TRUE
FALSE
FALSE FALSE TRUE TRUE TRUE TRUE FALSE FALSE TRUE FALSE TRUE TRUE TRUE FALSE FALSE FALSE FALSE
TRUE TRUE FALSE FALSE FALSE

56

TRUE
FALSE
TRUE
TRUE
FALSE
TRUE
TRUE
TRUE
FALSE
TRUE
FALSE
TRUE
TRUE
FALSE
TRUE
FALSE
TRUE
FALSE
FALSE
C

C
E
B
D
E
C
A
B
A
D
C
B
C
A

57

C
A
D
B
C
C
A
B
D
B
D
B
C
B
C
D
C
A
C
B
A
D
B
B
C
C
A
A
C
C
C
A
D
D

5
8

E
B
E
E
A
B
D
C
C
A
C
B
A
B
A
B
B
C
E
A
E
D
B
D
D
B
A
C
D
C
C
D
A
C

5
9

A
B
C
D
B
C
D
A
E
A
C
D
C
C
B
D
D
B
A
E
Cedad
organizing
organization structure
organization chart
work specialization
work specialization
chain of command
unity of command
scalar principle
Authority

60

vested in organizational positions not people; accepted by subordinates; flowing down the vertical hierarchy. Responsibility
Accountability Delegation Line; staff; line Line authority

span of management flat

tall decentralization Centralization functional divisional

product structure; program structure; self-contained unit structure geographic region

matrix approach Cross-functional virtual network virtual network modular coordination task force project manager Reengineering vertical Intangible
output

Vertical functional, divisional, horizontal matrix, teams, and virtual network.

Choose three of the following -- duplication of resources across divisions, less technical depth and specialization in divisions, poor
coordination across divisions, less top management control, and competition for corporate resources.
Global competitiveness, workforce flexibility/challenge, and reduced administrative overhead.
The three basic types of production technology include small-batch and unit production, large-batch and mass production, and
continuous process production.
Service technology can be defined as having intangible input and direct contact with customers.

61

Authority is defined as the formal and legitimate rights of a manager to make decisions, issue orders, and allocate resources. Responsibility is
the duty to perform the task that has been assigned. Many argue that authority and responsibility go hand-in-hand, i.e., in order for someone to
fulfill their responsibility, they must have an equivalent level of authority. Accountability means that those with authority and responsibility are
subject to reporting and justifying task outcomes to those higher in the chain of command. Accountability brings authority and responsibility
together. The principle of delegation allows managers to transfer authority and responsibility to those lower in the organizational hierarchy.
Delegation should increase an organization's flexibility by allowing people "on the spot" to make decisions.
Line departments perform tasks that reflect the organization's primary task and mission. Staff departments include all those departments that provide
specialized skills in support of line departments. In a typical production firm, line departments make and sell the product, while staff departments might
include accounting and human resource management. Line authority means that people in management positions have the formal power to direct
immediate subordinates. Staff authority is the right to advise, recommend, and counsel in the staff specialist's area of expertise.

The span of management, or span of control, is the number of employees who report directly to one supervisor. There is not an ideal
span of management. The number depends upon several characteristics of the situation including the nature of the work done by the
subordinates, the locations where the work is done, the training and education of the workers, the level of definition of the task, the time
available to the manager, and the manager's personal preferences and style.
(1) Work performed by subordinates is stable and routine. (2) Subordinates perform similar work tasks. (3) Subordinates are concentrated in a
single location. (4) Subordinates are highly trained and need little direction in performing tasks. (5) Rules and procedures defining task activities
are available. (6) Support systems and personnel are available for the manager. (7) Little time is required in nonsupervisory activities such as
coordination with other departments or planning. (8) Managers' personal preferences and styles favor a large span.
(1) Greater change and uncertainty in the environment are usually associated with decentralization. (2) The amount of centralization or decentralization
should fit in the firm's strategy. (3) In times of crisis of company failure, authority may be centralized at the top.

A horizontal matrix structure utilizes functional and divisional chains of command simultaneously in the same part of the organization.
This structure has dual lines of authority and purposely violates the principle of unity of command. Major advantages include: (1) more
efficient use of human resources because specialists can be transferred from one division to another; (2) increased adaptability; (3)
increased management skills; (4) greater interdisciplinary cooperation; and (5) enlarged tasks for employees.
Cross-functional teams consist of employees from various functional departments who are responsible to meet as team and resolve mutual
problems. Team members typically still report to their functional departments, but they also report to the team, one member of whom may be
the leader. Permanent teams are groups of employees who are brought together similar to a formal department. Each team brings together
employees from all functional areas focused on a specific task or project. Emphasis is on horizontal communication and information sharing
because representatives from all functions are coordinating their work and skills to complete a specific organizational task.
There are at least two different types of teams. Cross-functional teams consist of employees from various functional departments who are
responsible to meet as team and resolve mutual problems. While team members still report to their functional manager, they will also report to
the team, perhaps to a team leader. Permanent teams consist of groups of employees who are brought together as a formal department.
Similar to a divisional structure, although much smaller in the number of employees involved, permanent teams are often the result of
reengineering. Disadvantages of the team structure include dual loyalties and conflict, the time and resources spent on meetings, and
unintended/ineffective decentralization, which may occur because team members do not have the conceptual skills to be effective.

Reengineering, sometimes called business process reengineering, is the radical redesign of business processes to achieve dramatic
improvements in cost, quality, service, and speed. Reengineering involves a shift to a horizontal structure based on teams. Basically, it
means starting over, throwing out all the notions of how work was done and deciding on how it can best be done now.
A task force is a temporary team or committee designed to solve a short-term problem involving several department A project manager
is a person who is responsible for coordinating the activities of several departments for the completion of a specific project.

62