Exam 8: Structuring Organizations for Todays Challenges

In firms with centralized authority, each business unit is treated as if it is a completely separate and independent organization.

In an inverted organization, the job of management is to

Corner Booksellers needs to reorganize its floor space. Management decided to reduce seating space in its stores in order to create room for new shelves to display the growing interest in books on clean eating. This company's effort is an example of how a firm may reduce its emphasis in one product line in order to serve customer preferences and trends.

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.

In today's competitive environment, cost containment is extremely important to survival. Which of the following increases efficiency in the production and distribution of goods?

The process of setting up individual departments to do specialized tasks is called job specialization.

________ means that decision-making authority is delegated to lower-level managers and employees.

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

Organizations with positive images for performing exceptional service to customers are usually friendly places to work, as well.

Fayol believed that the amount of decision-making power vested in top management should be the same in all situations.

A(n) ________ consists of one person at the top of the organization and many levels of managers who are responsible to that person.

Cross-functional teams work best when the voice of the customer is brought into organizations.

Some firms use a combination of departmentalization techniques.

Weber believed that employees should be empowered to make their own decisions.

Line organizations often experience the problem of employees reporting to more than one boss.

The ________ an organization's structure, the ________ the span of control.

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.

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

Weber believed that large organizations required everyone to follow the established rules and guidelines precisely.

________ are responsible for directly achieving organizational goals.