Exam 8: Structuring Organizations for Todays Challenges

During an afternoon coffee break, Evangeline, a production-line employee at Lilypad Linens, was told by a friend that one of the managers in finance is about to be fired. She is eager to learn if other friends at Lilypad know any more about the situation. This flow of information is an example of Lilypad's grapevine.

Superstars Soccer Camp recently outsourced its marketing work. This suggests that management at Superstars does not believe that marketing is one of the firm's core competencies.

A matrix organization produces an environment that discourages cooperation and teamwork.

The optimum number of subordinates a manager should supervise is referred to as the span of control.

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

In the Making Ethical Decisions box titled "Would You Sacrifice Safety for Profit?" which of the following statements best expresses the theme of the discussion?

The ________ is the nerve center of the informal organization.

Fayol's principle of the division of labor says that functions should be divided into areas of specialization such as production, marketing, and finance.

To better serve customers, many firms are restructuring to empower front-line employees.

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

Genevieve works in the finance department at the headquarters of a large home improvement retailer. Her main responsibility is to keep an eye on department expenditures and figure out how to cut costs whenever possible. Tyson, the marketing director for the same company, shares information with Genevieve only when he absolutely has to. He finds her inflexible, and not understanding of what it takes to roll out a new product line. Genevieve and Tyson typify a disadvantage of departmentalization.

Last Stop Shop, a regional discount retailer, carefully watches and compares its operations with the operations of its closest rivals. Last Stop Shop does

Greener Grass, a business specializing outdoor sprinkler systems, serves several commercial customers, as well as residential customers. As the business expands, Greener Grass's management may want to consider departmentalizing by customer group and then by process.

McNulty Manufacturing builds small consumer kitchen products like mixers and toaster ovens. The industry is relatively stable, having few new advances in product development. McNulty should use a line or line-and-staff organizational structure to ensure efficient operations.

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

Dan was a team supervisor in a very large organization when the refrigerator in their lunchroom stopped functioning. He started the paperwork on the day it died, then the refrigerator request went out for bid. After that, two middle managers needed to approve acceptance of the bid and document their decision, and the purchasing director had final approval. The refrigerator arrived six months later. Max Weber would have approved of the decision process and its documentation at Dan's company to back up such a refrigerator purchase.

Donna is a sales representative for the Eastern Essentials Company. She really enjoys working for Eastern Essentials, because she and others are treated as highly valued employees. Sales reps are given freedom and flexibility in their relationships with customers. While there are only a few layers of management at Eastern Essentials, Donna has found that these managers try their best to support and assist her efforts. Based on Donna's experience, it appears that Eastern Essentials is a(n)

________ organizations are characterized by many layers of management and function with well-defined rules and procedures.

Explain the difference between a firm's formal organization and its informal organization. Why are both types of organization important to managers?

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