Exam 8: Structuring Organizations for Todays Challenges

An organizational hierarchy establishes one person at the top of an organization.

Division of labor refers to deciding how many jobs must be accomplished and then dividing them up amongst the labor force.

Barclay developed two interactive computer games. He didn't do it entirely alone. Last year he started a small company, and hired two programmers and a marketing graduate. He considers himself a cutting-edge kind of guy and wants to position his company the same way. He has solicited your advice as to how he should structure his organization as he moves forward, and you suggest that he hire a few potential customers to join his team of employees as product testers. And, you suggest, maybe he should solicit globally. You are suggesting to Barclay that he put together a ___________

_____________ refers to companies headquartered abroad who elect to bring production and manufacturing to domestic subsidiaries

Some firms use a combination of departmentalization techniques.

Although a firm may experience better cost controls through departmentalization, it may not increase its responsiveness to customer needs.

New technology such as the Internet has opened up opportunities for firms to sell to new markets.

Including customers and suppliers on cross-functional teams violates the interests of stockholders.

Global Cash Solutions hired 500 workers to build ATM machines and self-service check-out counters at a plant in Columbus, GA, with plans to hire several hundred more employees by 2018. In the past, these machines were built in Hungary, China, and Brazil. Both shipping costs and quality control were cited as the reasons these companies have elected to change production strategy to ______________

Antonio works in the accounting department of a large firm. This is an example of Fayol's division of labor concept.

Paige believes all workers should receive the same wage rate regardless of their position within a company. Paige's views on wages illustrate Fayol's principle of equity.

Springfield National Bank organizes its loan operations based on the market served, such as consumer, small business, and nonprofit organizations. Departmentalization based on ________ allows Springfield to better serve borrowers with different needs

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

In recent years, large organizations have tried to improve their efficiency in communication and decision making by:

Mini-Case Angelica Canizales is the CEO of Mucho Dinero Enterprises. Sales have declined for four consecutive years and the firm's accountants have reported net losses in each of the last two years. Employees appear demoralized 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. -In order to encourage more interdepartmental communication and cooperation, Angelica is thinking about setting up groups of workers from different departments to work together on a long-term basis. She is even thinking about asking people from some of Mucho Dinero's suppliers, customers, and distributors to join these groups. The type of group that Angelica is considering is known as a(n):

The formal organization of a firm provides the lines of authority to follow in routine situations.

If companies follow the theories of Fayol and Weber, which of the following scenarios is likely to result?

Cross-functional teams consist of employees from different departments who work together on a long-term basis.

Departmentalization by function allows employees opportunity to further develop their skills.

In a bureaucratic organization: