Exam 8: Structuring Organizations for Todays Challenges

________ refers to the process of dividing organizational functions (sales, production, accounting/bookkeeping) into separate units.

A chain of command is a line of authority that moves from the lowest level of the hierarchy to the top.

Cross-functional teams work well when leadership of the team is shared.

When employees are self-managed, a company can implement a wider span of control.

________ are responsible for directly achieving organizational goals.

To avoid losing that small-company-feel, fast growing companies try to maintain a flat organization structure.

The design of a bureaucratic organization assumes a well-educated workforce.

A hierarchy requires many top managers, but only a few middle managers.

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

A bureaucracy empowers employees to quickly respond to customers' wants and desires.

In Weber's view of a bureaucratic organization, the role of top management is to

Cross-functional teams avoid involving groups outside of the firm to ensure their plans are not leaked to their competitors.

The Internet makes real-time availability of data possible.

Last week at Bigbux Financial Services, all advisors assisting over 150 clients each received an email from the VP of Operations. The email stated that every client's investment portfolio should consist of 50% individual stock purchases, 25% bonds, and 25% property. Advisors were ordered to review all client portfolios for compliance to this directive. Clearly, Bigbux is an inverted organization because management directives such as the one described are very common.

Inverted organizations empower employees by adding multiple layers of management and long lines of communication.

Digital natives, those who grew up with the Internet and other devices, are an important customer group that most businesses want to reach.

Yolklore Breakfast Cafes is a nationwide chain with locations all around the United States. Top management at Yolklore believes that customers in different regions have different tastes and that its cafes may face more intense competition in some regions than in others. Therefore, Yolklore's top management gives local managers the freedom to offer local flavors in addition to its traditional entrees, and the ability to decide on a reasonable pricing strategy for its meals. Yolklore typifies a decentralized organization.

Managing a growing business often requires managers to create departments to accomplish various tasks.

In a line organization, there are many specialists who serve as advisors and assistants to the managers who make decisions.

Departmentalizing by customer group has proven ineffective.