Deck 8: Organizational Design

Question 1

Organizational design is a plan for arranging and coordinating the activities of an organization for the purpose of fulfilling its mission and achieving its goals.

Answer 1

True

Question 2

In general, the more complex the operation, the more simple its design must be.

Answer 2

False

Question 3

There is not a universal design appropriate for all organizations.

Answer 3

True

Question 4

Recent years have been characterized by a need for corporate redesign in both profit seeking and nonprofit organizations.

Question 5

An organization's strategy has significant implications for its structure.

Question 6

In general, four types of organizational structures are predominant in organizations today: functional, divisional, matrix, and focused.

Question 7

The structuring process involves creating departments by grouping tasks on the basis of some common characteristic such as function, product, or geographic market.

Question 8

The most commonly used organizational structure is the functional structure.

Question 9

The functional structure groups organizational members according to the particular functions they perform within the organization.

Question 10

A functional structure supports task specialization and may help employees develop better job-related skills.

Question 11

Duplication of resources is a major disadvantage of the functional structure.

Question 12

Functional structures facilitate specialization, engender cohesive work groups, and improve operational efficiency.

Question 13

Most divisional structures are designed so that members of the organization are grouped on the basis of common products, geographic regions, or customers served.

Question 14

In general, product divisional structures are most appropriate for organizations with limited product lines that either have wide geographic coverage or desire to grow through geographic expansion.

Question 15

Product divisional structures are considered most appropriate for organizations with relatively homogenous product lines.

Question 16

Organizations pursuing international strategies rarely choose a geographically based structure.

Question 17

A customer-based structure is appropriate for organizations that have separate customer groups with very specific and distinct needs.

Question 18

A disadvantage of the matrix structure is that it is complex, leading to difficulties in implementation.

Question 19

The three primary types of network structures are internal, stable, and dynamic.

Question 20

A disadvantage of the network structure is flexibility.

Question 21

A disadvantage of the network structure is that it maximizes the effectiveness of the core unit.

Question 22

An internal network exists in organizations that choose to avoid outsourcing but wish to develop internal entrepreneurial ventures that are driven by market forces and, thus, are competitive with alternative sources of supply.

Question 23

A stable network structure relies to some degree on outsourcing to add flexibility to their product delivery system.

Question 24

As globalization continues, companies that operate in many countries are using various forms of network structure.

Question 25

With its heavy reliance on strategic partners for outsourcing much of its production needs, BMW is a classic example of an internal network.

Question 26

A disadvantage of the matrix structure is that it requires extraordinary coordination between work groups.

Question 27

The complexity of an organization's operations will affect its need for integration.

Question 28

Interdependence refers to the degree to which work groups are interrelated and the extent to which they depend upon one another to complete their work.

Question 29

Normally, the more complex an organization's operations, the more sophisticated its coordinating mechanisms must be.

Question 30

Reciprocal interdependence occurs when organizational units have a common resource but no interrelationship with one another.

Question 31

Pooled interdependence exists when work groups must coordinate the flow of information, resources, or tasks from one unit to another.

Question 32

A typical manufacturing assembly line is a good example of sequential interdependence.

Question 33

Most universities could be considered highly bureaucratic because they make extensive use of rules and procedures to coordinate the activities of their colleges and departments.

Question 34

Reciprocal interdependence occurs when information, resources, and tasks must be passed back and forth between work groups.

Question 35

Information systems facilitate the flow or information up and down the traditional chain of command and across organizational units.

Question 36

In general, vertical relationships can be thought of as boundary-spanning roles.

Question 37

Locus of decision-making refers to whether the organization's decision making is centralized or decentralized.

Question 38

Centralized decision-making gives top management less control than does decentralized decision-making

Question 39

The locus of decision making in most organizations is mixed, with decisions in some areas being relatively centralized, and decisions in other areas being relatively decentralized.

Question 40

An advantage of decentralized decision-making is that coordination between units is usually enhanced.

Question 41

Stable environments are associated with product life cycles being long and enduring; marketing strategies remaining relatively constant; and economic and political factors having little influence on the strategic or operational aspects of the firm.

Question 42

Organizations that operate in volatile and frequently changing environments should use centralized decision-making.

Question 43

When work groups are highly interdependent, they must either be coordinated very well with some mechanism, or they could be coordinated with centralized decision-making.

Question 44

Sequential interdependence should be managed with decentralized decision-making since the work must be kept in exact alignment with each other.

Question 45

A higher degree of centralized decision-making requires capable people more so than does decentralized decision-making.

Question 46

The way in which the activities of an organization are arranged and coordinated so that its mission can be fulfilled and its goals achieved is referred to as

A) organizational design.
B) mission model.
C) organizational chart.
D) company profile.
E) network structure.

Question 47

Which of the following is not true regarding organizational design?

A) Organizational design influences the types of mechanisms used to integrate and coordinate the flow of information.
B) Organizational design influences the configuration of organizational members.
C) Organizational design's purpose is to fulfill the firm's mission and achieve its goals.
D) Organizational design sets the locus of decision-making where most decision-making occurs.
E) Organizational design determines the function of the organizations.

Question 48

John Horne, the CEO of Navistar International, spends a considerable amount of time focusing on the ways in which the activities of his organization are arranged and coordinated so that its mission can be fulfilled and its goals achieved. Mr. Horne is focusing on

A) organizational control.
B) organizational design.
C) strategic planning.
D) tactical planning.
E) leadership.

Question 49

Which of the following is not defined by organizational design?

A) the configuration of organizational members
B) the types of mechanisms used to integrate the flow of information, resources, and tasks between organizational members
C) the types of mechanisms used to coordinate the flow of information, resources, and tasks between organizational members
D) the locus of decision-making
E) the system of shared beliefs and values that develops within an organization

Question 50

The __________ approach to organizing suggests that organizational design must be consistent with a fairly broad range of variables that are largely a function of the organizational strategy.

A) contingency
B) behavioral
C) classical
D) temporal
E) scientific

Question 51

An organization's overall design is defined by three primary components:

A) organizational structure, integrating mechanisms, and locus of decision-making.
B) organizational structure, control mechanisms, and chain of command.
C) locus of decision-making, control mechanisms, and span of control.
D) organizational structure, strategic planning, and span of control.
E) organizational structure, integrating mechanisms, and control devices.

Question 52

An organization's overall design is defined by three primary components: organizational structure, integrating mechanisms, and

A) chain of command.
B) span of control.
C) locus of decision-making.
D) control devices.
E) reengineering.

Question 53

Thomas Hays, the CEO of Fortune Brands, spends a considerable amount of time focusing on the following three issues: (1) organizational structure, (2) integrating mechanisms, and (3) locus of decision-making. These three issues are the primary components of

A) organizational control.
B) strategic management.
C) leadership.
D) span of control.
E) organizational design.

Question 54

According to the authors, the divisional structure incorporates three different types of departmentalization:

A) specialty; product; and function.
B) product; function; and geographic.
C) product; function; and customer.
D) function; geographic; and customer
E) product; geographic; and customer.

Question 55

Organizational __________ refers to the primary reporting relationships that exist within an organization.

A) mission
B) network
C) span of control
D) structure
E) planning

Question 56

When Frank Shron, the CEO of Bower, Inc., is discussing the primary reporting relationships within his firm, he is referring to his organization's

A) mission.
B) operational plan.
C) span of control.
D) network.
E) structure.

Question 57

As the newly appointed night manager at a theme park, Faye Gilbert decided to study the park's organizational chart. The chart detailed the chain of command and hierarchy of responsibility, authority, and accountability of employees and enabled Faye to better understand the park's

A) organizational structure.
B) organizational control.
C) strategic planning mechanisms.
D) industry norms.
E) organizational culture.

Question 58

At Republic Industries, work units are organized by grouping all production tasks together, all marketing tasks together, and all finance tasks together. Republic organizes its work units by

A) function.
B) industry served.
C) geographic location.
D) importance to the firm.
E) experience of the personnel involved.

Question 59

Which of the following is not among the most common types of organizational structure?

A) functional
B) divisional
C) matrix
D) network
E) cross-functional

Question 60

Which of the following forms of organizational structure has emerged more recently than the others and represents a contemporary approach for meeting the challenges of today's business environment?

A) matrix
B) product divisional
C) geographic divisional
D) network
E) functional

Question 61

Which of the following is the most commonly employed organizational form?

A) network
B) divisional
C) matrix
D) functional
E) cross-functional

Question 62

Suppose you were interviewing for a job at a small firm in Milwaukee. You noticed during the course of your interviews that the employees in the firm were divided into distinct groups, including a marketing group, a finance group, a manufacturing group, and a public relations group. Based on your observations, you concluded that the firm has a __________ organizational structure.

A) matrix
B) functional
C) network
D) product divisional
E) geographic divisional

Question 63

Biogen is an innovative firm that produces pharmaceutical products. In its operations, Biogen's greatest source of complexity comes from the diverse set of tasks and responsibilities that must be performed, rather than from its products, geographic markets, or customer groups. Based on these circumstances, it makes the most sense for Biogen to adopt a __________ structure.

A) matrix
B) product divisional
C) network
D) geographic divisional
E) functional

Question 64

A unique advantage of the functional structure is that

A) it facilitates specialization.
B) it focuses on departmental versus organizational issues.
C) it is difficult to develop generalists needed for top management.
D) only top management is held accountable for profitability.
E) it can achieve simultaneous objectives.

Question 65

A potential disadvantage of the functional structure is that it

A) may be difficult to manage diverse product lines.
B) promotes duplication of resources.
C) engenders cohesive work groups.
D) facilitates specialization.
E) may be difficult to develop generalists needed for top management.

Question 66

Lee Hammons was recently promoted to regional branch manager of Pelican Homestead National Bank. Lee wishes to revitalize the bank by altering its organizational structure in such a way that his employees will form cohesive work groups that facilitate task specialization. Lee would be best served if he selected which of the following organizational structures?

A) network
B) matrix
C) functional
D) geographic divisional
E) product divisional

Question 67

A __________ structure groups organizational members on the basis of common products, geographic markets, or customers served.

A) network
B) divisional
C) matrix
D) functional
E) cross-functional

Question 68

Which of the following is not a characteristic of product divisional structure?

A) enhanced coordination
B) development of functionally specialized managers
C) better assessment of manager performance and responsibility
D) duplication of resources
E) managers who may lack expertise to operate in wide geographic regions

Question 69

In order to determine which divisional structure their firm will employ to organize their firm as they begin to expand across the country, the board of directors of a car rental company examines __________ structure.

A) product, geographic, and customer
B) product, geographic, and matrix
C) network, geographic, and customer
D) network, geographic, and size
E) product, geographic, and size

Question 70

The Baxter Tire Company has a structure that groups its activities according to specific products or product lines. This is an example of a

A) market driven divisional structure.
B) product divisional structure.
C) network structure.
D) matrix structure.
E) customer divisional structure.

Question 71

The Fairchild Engineering Company has a structure that groups the tasks of the organization according to customer segments. This is an example of a

A) market driven divisional structure.
B) product divisional structure.
C) network structure.
D) matrix structure.
E) customer divisional structure.

Question 72

Ballard Technologies has three distinct product lines: pollution control devices, home security systems, and fiber optics. Each of these product lines is fairly distinct, each requires specialized effort to achieve high product quality, and each is targeted to different customers. Based on this information, which of the following organizational structures is the most appropriate?

A) matrix
B) product divisional
C) geographic divisional
D) functional
E) network

Question 73

Colonial Penn has many insurance products, each of which is targeted to a specific demographic group, such as farmers, medical professionals, self-employed individuals, retirees, and people in high-risk jobs such as police officers, firefighters, and military personnel. Based on this information, which of the following organizational structures is the most appropriate?

A) network
B) product divisional
C) matrix
D) functional
E) customer divisional

Question 74

A structure in which the tasks of the organization are grouped along two organizational designs simultaneously is referred to as a

A) network structure.
B) functional structure.
C) team-based structure.
D) matrix structure.
E) divisional structure.

Question 75

Atlantic Data Services defines work groups on the basis of two dimensions simultaneously (such as product/function, product/geographic region, and so on). This type of structure is called a __________ structure.

A) team-based
B) functional
C) network
D) divisional
E) matrix

Question 76

A company decided to define its work groups on the basis of two dimensions simultaneously. This employment of a dual chain of command to achieve various objectives is a distinguishing characteristic of which type of organizational structure?

A) matrix
B) functional
C) team-based
D) network
E) divisional

Question 77

A multinational corporation in the shoe industry organized itself along both product and functional lines in order to increase the quality of its shoes and achieve greater efficiency in operations. However, the complexity of this __________ structure required extraordinary planning and coordination between work groups.

A) network
B) functional
C) matrix
D) cross-functional
E) divisional

Question 78

The primary advantage of the __________ structure is that an organization can achieve simultaneous objectives, such as focusing on both specific products and geographic markets.

A) network
B) matrix
C) divisional
D) cross-functional
E) functional

Question 79

An acquaintance of yours shares with you a frustration that she is feeling on her job. Although she likes her job, she is tired of having "two bosses. She works in the cosmetics division of a large consumer products firm and reports to both a product manager and a regional manager on a monthly basis. Based on this information, we can conclude that your friend's organization has a __________ structure.

A) geographic divisional
B) customer divisional
C) matrix
D) network
E) functional

Question 80

A contemporary organizational structure founded on a set of alliances with other organizations that serve a wide variety of functions is referred to as a

A) matrix structure.
B) functional structure.
C) team-based structure.
D) network structure.
E) divisional structure.