Exam 8: Structuring Organizations for Todays Challenges

Centralized authority provides for the delegation of authority to employees who are then better able to respond to customers' needs.

One of Fayol's principles suggests that managers should have the right to give orders and expect others to follow.

Which of the following determines the degree of decentralization of a firm?

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

For an inverted organization to be effective, it requires

The decision on how to departmentalize should depend on the customer and the product or service the firm is offering.

Matrix organization structures provide for more efficient use of organizational resources.

A recent trend in organization models is the development of cross-functional, self-managed teams of employees who work together on a long-term basis.

Networking requires transparency to work most effectively.

The optimum number of subordinates a manager can supervise is referred to as the

Businesses seldom create separate departments to serve customers with different needs.

Cross-functional teams defy the trend toward customer-driven organizations.

A virtual corporation refers to a permanent network of firms linked by high-tech communication systems.

A bureaucratic style of organization is slow when responding to change.

Julio is the owner of Party Time, Inc., a small party supply company. The company provides tents, tables, chairs, and related paraphernalia for weddings, Bar and Bat Mitzvahs, graduations, birthdays, and many other celebratory events. As sales have grown, the organization has hired more employees and has departmentalized to more efficiently handle purchasing, sales, service, and accounting. Everyone is still responsible for achieving company goals. Upon seeing Party Time's organization chart, you agree it uses a line organization model.

Erin is an attorney working for Food Innovations, Incorporated. She provides legal advice and assistance to Food Innovations managers. Erin's job would be classified as a staff position.

Years ago, Johnny created a successful sportswear company that continues to provide uniforms for clients in the Midwest. As his business started to grow, Johnny added functional departments including a marketing department and an accounting department. But now, he sees that employees who specialized in these areas no longer share knowledge with each other in the same way they did when the business was smaller. As one of Johnny's consultants, you explain that as the company grows taller, it cannot avoid this pitfall, and he should focus on continued functional departmentalization, especially if he supports innovation and learning.

A line organization in a large business often suffers from excessively slow lines of communication.

Outsourcing involves assigning various functions to outside organizations.

Corleone Industries' chain of command moves from the top of the hierarchy down to lower-level managers. The company is organized by department with specific rules and regulations that everyone is expected to follow. These characteristics suggest that Corleone Industries is an example of a bureaucratic organization.