Exam 8: Structuring Organizations for Todays Challenges

Small business organizations lack the size required to reap the benefits of labor specialization.

Departments are functional units within the business such as sales, accounting, finance, and marketing.

Managers near the top of an organization have the broadest span of control.

Mini-Case Angelica Canizales is the CEO of Mucho Dinero Enterprises. Sales have dropped for four consecutive years and accountants have reported net losses in each of the last two years. Employees appear discouraged and frustrated. Recently, Angelica met with managers from marketing, production, and finance to listen to their views regarding the company's problems. The managers unanimously agreed that the main problem was a lack of communication among the several functional areas of the business. Each manager felt that the firm could increase quality and customer satisfaction with better interdepartmental communication. Angelica also met with marketing and production employees to get their respective opinions on the problems of the firm. One employee from the production department observed, "We have so many layers of management that it takes forever to make decisions." An employee from marketing complained, "This place is so bogged down with rules and regulations that there is no opportunity to be creative." Several employees shared their opinions regarding their bosses. Specifically, one employee said, "My boss never pays attention to my ideas. He just issues orders and expects me to obey them." Angelica decided, after listening to many comments from managers and employees and also suppliers and customers, that the only way to end Mucho Dinero's slide was to completely rethink the firm's structure and to make radical changes in its organization. She presented her ideas to the board of directors, promising to voluntarily resign if her efforts to reorganize did not return the firm to profitability. -Angelica's decision to completely redesign Mucho Dinero's organization indicates that she believes the best approach to her firm's problems is

The traditional technique used to departmentalize an organization is by

Serena has long dreamed of opening her own restaurant. She, of course, knows that she will need to organize her business. Organizing begins with determining the work to be done.

An advantage of a line-and-staff organization is that it provides people that advise and assist line managers as they perform their jobs.

Which of the following is an example of a move to reorganize?

Economies of scale

One of the most difficult management challenges today is managing change. Why is this?

The more standardized the work, the wider the span of control.

A flat organization is less likely to respond quickly to customer needs.

The ________ of a business firm is the system that details lines of authority, responsibility, and position, similar to the structure on organization charts.

On Air Studios organizes its jobs by activity, such as production, marketing, accounting, and finance. On Air Studios applies ________ departmentalization in order to maximize their efficiency.

School Days Centers specialize in helping students with difficulties. With locations around the country, each center consists of a manager and several tutors and counselors. The counselors and tutors have a great deal of flexibility to design programs specifically for individual students. In fact, these first-line employees are considered to be the key people in the organization, and the manager's main function is to assist these employees in matters such as scheduling and securing necessary materials. This type of arrangement suggests that School Days is an inverted organization.

Dividing the required work among a group of employees is called

Bass Clef Music Company assigns workers to departments based on similar skills. Currently, the company has a marketing department, a production department, a finance department, and a human resources department. This suggests that Bass Clef departmentalizes by

Due to the competitive nature among companies competing for the same customers, cross-functional teams never consist of individuals from more than one firm.

Top management at Upper Limits, Inc. looks to encourage communication between different departments to stop employees from becoming narrow specialists. The best way to reach these goals is to departmentalize Upper Limit's organization by function.

The degree to which an organization allows lower-level managers to make decisions reflects the degree of decentralization.