Deck 12: Organisational Structure and Design

Question 1

Work specialisation is also known as ________.

A)departmentalisation
B)centralisation
C)span of control
D)formalisation
E)division of labour

Answer 1

E

Question 2

Departmentalisation known as functional is based on groups located in the same territory or region.

Answer 2

False

Question 3

Authority is the obligation or expectation to perform a duty.

Answer 3

False

Question 4

Authority is synonymous with responsibility.

Question 5

When decisions tend to be made at lower levels in an organisation, the organisation is said to be decentralised.

Question 6

Geographic departmentalisation has greatly increased in importance as a result of today's competitive business environment.

Question 7

A group of individuals who are experts in various specialties and who work together is a cross-functional team.

Question 8

Which of the following is NOT an example of the classical view of work specialisation?

A)assembly-line production
B)McDonald's
C)traditional General Motor's assembly plant
D)organic organisations
E)Ford

Question 9

A manager's span of control refers to the number of subordinates who can be effectively and efficiently supervised.

Question 10

The term ________ is used to describe the degree to which tasks in an organisation are divided into separate jobs.

A)work ethics
B)managerial capitalism
C)social responsibility
D)work specialisation
E)functional design

Question 11

The classical view of unity of command suggests that subordinates should have only one superior to whom they report.

Question 12

Recently, there has been a trend of organisations moving toward increased decentralisation.

Question 13

Decentralisation describes the degree to which decision making is concentrated at a single point in the organisation.

Question 14

The concept of work specialisation can be traced back a couple of centuries to Adam Smith's discussion of division of labour.

Question 15

Standardisation refers to the degree to which jobs within the organisation are standardised and the extent to which employee behaviour is guided by rules and procedures.

Question 16

The degree to which tasks in an organisation are divided into separate jobs is division of labour.

Question 17

Authority is the individual's capacity to influence decisions.

Question 18

Grouping jobs on the basis of product or customer flow is termed customer departmentalisation.

Question 19

The trend in recent years has been toward smaller spans of control.

Question 20

Responsibility is the rights inherent in a managerial position.

Question 21

Span of control refers to which of the following concepts?

A)how much power a manager has in the organisation
B)the geographic dispersion of a manager's subunits of responsibility
C)how many subordinates a manager can effectively and efficiently supervise
D)the number of subordinates affected by a single managerial order
E)the amount of time it takes to pass information down through a manager's line of command

Question 22

________ entitles a manager to direct the work of a subordinate.

A)Responsibility
B)Legitimate power
C)Rank
D)Operating responsibility
E)Authority

Question 23

________ is the obligation to perform assigned activities.

A)Authority
B)Responsibility
C)Chain of command
D)Unity of command
E)Formalisation

Question 24

________ is the basis on which jobs are grouped in order to accomplish organisational goals.

A)Departmentalisation
B)Centralisation
C)Formalisation
D)Coordination
E)Efficiency

Question 25

Grouping activities on the basis of customer flow is ________.

A)functional departmentalisation
B)product departmentalisation
C)geographical departmentalisation
D)process departmentalisation
E)technological departmentalisation

Question 26

What kind of departmentalisation would be in place in a government organisation where different public service responsibilities are divided into activities for employers, children and the disabled?

A)product
B)geographic
C)process
D)outcome
E)customer

Question 27

Grouping sporting equipment in one area, men's clothing in another area and cosmetics in a third area is an example of what kind of departmentalisation?

A)customer
B)product
C)geographic
D)process
E)outcome

Question 28

Sales responsibilities divided into south-east Australia, eastern Australia, north-east Australia, middle Australia and Western Australia would be an example of ________ departmentalisation.

A)product
B)geographic
C)process
D)outcome
E)customer

Question 29

To whom a worker reports concerns which aspect of organisational structure?

A)chain of command
B)departmentalisation
C)pay structure
D)line of command
E)authority framework

Question 30

According to the textbook, managers are using ________, which are groups of individuals who are experts in various specialties and who work together.

A)specialised teams
B)cross-demanded teams
C)cross-functional teams
D)multi-skilled teams
E)simple structured teams

Question 31

Wider spans of control may be viewed as more efficient, but eventually, wider spans tend to have what effect on organisations?

A)reduced effectiveness
B)increased turnover
C)loss of managerial power
D)customer dissatisfaction
E)rigid chains of command

Question 32

Bringing together the company's legal counsel, research engineer and marketing specialist for a project is an example of a(n)________.

A)empowered team
B)process departmentalisation
C)product departmentalisation
D)cross-functional team
E)continuous improvement team

Question 33

A local manufacturing organisation has groups of employees who are responsible for sales, marketing, accounting, human resources, etc.These are examples of what concept?

A)authority
B)chain of command
C)empowerment
D)departmentalisation
E)social grouping

Question 34

The ________ is the continuous line of authority that extends from upper organisational levels to the lowest levels and clarifies who reports to whom.

A)chain of demand
B)chain of command
C)demand hierarchy
D)continuous design structure
E)none of the above

Question 35

Today's business environment has greatly increased the use of what type of departmentalisation?

A)geographic
B)customer
C)product
D)process
E)outcome

Question 36

________ departmentalisation has been used in recent years to better monitor the needs of clients and to respond to changes in those needs.

A)Needs-based
B)Functional
C)Process
D)Customer
E)Orderly

Question 37

Which of the following is NOT a form of departmentalisation suggested by your textbook?

A)functional departmentalisation
B)product departmentalisation
C)geographical departmentalisation
D)process departmentalisation
E)technological departmentalisation

Question 38

What type of departmentalisation expects that each department will specialise in one specific phase of the process or product production?

A)product
B)geographic
C)process
D)outcome
E)customer

Question 39

The ________ principle (one of Fayol's 14 principles of management)helps preserve the concept of a continuous line of authority.

A)unity of demand
B)unity of command
C)unity of direction
D)demand structure
E)continuous demand

Question 40

Other things being equal, the wider or larger the span of control, the more ________ the organisational design.

A)bureaucratic
B)democratic
C)effective
D)efficient
E)classical

Question 41

________ describes the degree to which decision making is concentrated at a single point in the organisation.

A)Decentralisation
B)Centralisation
C)Transnationalism
D)Formalisation
E)Cross-sectional analysis

Question 42

Which of the following factors would NOT influence an organisation to have a higher degree of centralisation?

A)Environment is stable.
B)Company is geographically dispersed.
C)Company is large.
D)Decisions are significant.
E)Organisation is facing a crisis.

Question 43

Scenario-based questions: Organisational Structure
Michelle is a registered nurse in charge of a new unit in her hospital.She would like to have a more laid-back approach to dealing with her new staff, but the hospital demands that there be strict hierarchical levels and that all decisions must be signed off by Michelle.Sometimes this drives Michelle nuts; the constant filling out of forms, etc.She also feels that the numerous levels of hierarchy are unnecessary and place barriers between her and her staff.She is not sure why things have to be so 'organised' and is thinking about speaking with her boss to attempt changing her unit to have more flexibility and fewer rules.
Refer to Organisational Structure (Scenario).Michelle has noticed that everyone is very concerned about the ________, the line of authority within the organisation.

A)responsibility
B)chain of command
C)span of control
D)organisational strategy
E)environment

Question 44

Scenario-based questions: Organisational Structure
Michelle is a registered nurse in charge of a new unit in her hospital.She would like to have a more laid-back approach to dealing with her new staff, but the hospital demands that there be strict hierarchical levels and that all decisions must be signed off by Michelle.Sometimes this drives Michelle nuts; the constant filling out of forms, etc.She also feels that the numerous levels of hierarchy are unnecessary and place barriers between her and her staff.She is not sure why things have to be so 'organised' and is thinking about speaking with her boss to attempt changing her unit to have more flexibility and fewer rules.
Refer to Organisational Structure (Scenario).Michelle is required to sign off on all decisions, suggesting that they have a ________ form of decision-making authority.

A)centralised
B)formal
C)autocratic
D)policy
E)strict

Question 45

________ refers to the degree to which jobs within the organisation are standardised and the extent to which employee behaviour is guided by rules and procedures.

A)Standardisation
B)Centralisation
C)Chain of command
D)Strategy
E)Formalisation

Question 46

Scenario-based questions: Food for Thought
Howard owned Caselots, a store that sold food and non-food items in a warehouse environment.He employed 350 people and had them work in specialised areas.Some people only unloaded the pallets from the trucks or drove the pallets onto the floor, and still others unloaded the pallets in their specific area of responsibility.He had managers controlling each specific area.For example, the automotive manager was in charge of all functions (accounting, purchasing, sales, etc.)related to the automotive area.This arrangement had generally worked well, but recently, he noticed that employees seemed bored, and turnover and absenteeism had risen.In addition, he found that attempting to get special projects completed, such as creating their new 'First-Class Customer' card, had turned into a nightmare due to the lack of cooperation and misunderstanding between the groups.
Refer to Food for Thought (Scenario).The type of departmentalisation practiced by Caselots is best described as ________.

A)product
B)function
C)customer
D)geographic
E)process

Question 47

All of the following factors indicate that a decentralised organisation would be most effective EXCEPT when ________.

A)the environment is complex
B)decisions are relatively minor
C)the organisation is facing a crisis
D)the company is geographically dispersed
E)effective implementation of strategies depends on managers having involvement and flexibility to make decisions

Question 48

Scenario-based questions: You Can Bank on It
Susan's employer, Mutual Insurance, like many others, had recently undergone some downsizing.The Board of Directors felt that their sagging stock price could be improved with some labour cost cutting.Along with other new challenges, a problem now existed with span of control and decision-making authority.In the past, her company's policy was that no manager should supervise more than six subordinates and only managers should make decisions for their individual units.But now, with the cuts in middle management, upper management had increased the span of control but still insisted on managerial-only decision making.The result was that managers spent all of their time putting out fires and subordinates felt they were getting answers too slowly and wanted to start having the authority to make decisions on their own.Clearly, something had to change.
Refer to You Can Bank on It (Scenario).Of the following, which is NOT a reason that would be consistent with Mutual Insurance wanting to maintain a centralised form of decision making?

A)The environment is uncertain.
B)The environment is stable.
C)The company is large.
D)Decisions are more significant.
E)The organisation is facing a crisis.

Question 49

Scenario-based questions: You Can Bank on It
Susan's employer, Mutual Insurance, like many others, had recently undergone some downsizing.The Board of Directors felt that their sagging stock price could be improved with some labour cost cutting.Along with other new challenges, a problem now existed with span of control and decision-making authority.In the past, her company's policy was that no manager should supervise more than six subordinates and only managers should make decisions for their individual units.But now, with the cuts in middle management, upper management had increased the span of control but still insisted on managerial-only decision making.The result was that managers spent all of their time putting out fires and subordinates felt they were getting answers too slowly and wanted to start having the authority to make decisions on their own.Clearly, something had to change.
Refer to You Can Bank on It (Scenario).ALL BUT ONE of the following are reasons why Mutual Insurance should change to a more decentralised form of decision making.Which is the odd one out?

A)Lower-level managers are capable of decision making.
B)The company is geographically dispersed.
C)Decisions are relatively minor.
D)The organisation is at risk of failure.
E)Lower-level managers want a voice in decisions.

Question 50

In a short essay, list and discuss the five common forms of departmentalisation.

Question 51

Scenario-based questions: Food for Thought
Howard owned Caselots, a store that sold food and non-food items in a warehouse environment.He employed 350 people and had them work in specialised areas.Some people only unloaded the pallets from the trucks or drove the pallets onto the floor, and still others unloaded the pallets in their specific area of responsibility.He had managers controlling each specific area.For example, the automotive manager was in charge of all functions (accounting, purchasing, sales, etc.)related to the automotive area.This arrangement had generally worked well, but recently, he noticed that employees seemed bored, and turnover and absenteeism had risen.In addition, he found that attempting to get special projects completed, such as creating their new 'First-Class Customer' card, had turned into a nightmare due to the lack of cooperation and misunderstanding between the groups.
Refer to Food for Thought (Scenario).Caselots currently operates under the classical view of the division of labour.This is characterised by which of the following?

A)You only report to one manager.
B)Employees specialise in doing part of a task.
C)Employees specialise in doing one complete task.
D)People are divided according to their work interest.
E)Employees are trained to do many tasks to increase flexibility.

Question 52

Recently, there has been a distinct trend toward ________.

A)smaller spans of control
B)decentralised decision-making
C)decreased flexibility
D)emphasis on chain of command
E)mechanistic organisations

Question 53

In a short essay, list and explain the six key elements in designing an organisation's structure.

Question 54

In a short essay, explain the concepts of authority, responsibility and unity of command.

Question 55

In general, span of control is ________ for managers.

A)increasing
B)decreasing
C)staying the same
D)significantly decreasing
E)no longer important

Question 56

Scenario-based questions: Food for Thought
Howard owned Caselots, a store that sold food and non-food items in a warehouse environment.He employed 350 people and had them work in specialised areas.Some people only unloaded the pallets from the trucks or drove the pallets onto the floor, and still others unloaded the pallets in their specific area of responsibility.He had managers controlling each specific area.For example, the automotive manager was in charge of all functions (accounting, purchasing, sales, etc.)related to the automotive area.This arrangement had generally worked well, but recently, he noticed that employees seemed bored, and turnover and absenteeism had risen.In addition, he found that attempting to get special projects completed, such as creating their new 'First-Class Customer' card, had turned into a nightmare due to the lack of cooperation and misunderstanding between the groups.
Refer to Food for Thought (Scenario).If Howard regularly put together teams made up of specialists from different areas to tackle new projects, like the 'First-Class Customer' card project, these would be called ________.

A)cross-functional teams
B)quality circles
C)total quality management
D)special project teams
E)specialty teams

Question 57

Scenario-based questions: Food for Thought
Howard owned Caselots, a store that sold food and non-food items in a warehouse environment.He employed 350 people and had them work in specialised areas.Some people only unloaded the pallets from the trucks or drove the pallets onto the floor, and still others unloaded the pallets in their specific area of responsibility.He had managers controlling each specific area.For example, the automotive manager was in charge of all functions (accounting, purchasing, sales, etc.)related to the automotive area.This arrangement had generally worked well, but recently, he noticed that employees seemed bored, and turnover and absenteeism had risen.In addition, he found that attempting to get special projects completed, such as creating their new 'First-Class Customer' card, had turned into a nightmare due to the lack of cooperation and misunderstanding between the groups.
Refer to Food for Thought (Scenario).If Caselots decided to reorganise their departmentalisation so that one manager was in charge of accounting, one manager in charge of food stuffs, one manager in charge of non-food items, etc., this would be described as ________ departmentalisation.

A)product
B)function
C)customer
D)geographic
E)process

Question 58

If lower-level employees provide input or are actually given the discretion to make decisions, the organisation is more ________.

A)formalised
B)centralised
C)decentralised
D)mechanistic
E)organic

Question 59

A high-tech manager who supervises the development of a new computer chip needs ________ compared to a manager who supervises the mailing of unemployment insurance checks at the local government office.

A)about the same span of control
B)a narrower span of control
C)a wider span of control
D)a more informal span of control
E)elimination of the span of control

Question 60

Which of the following factors describes an environment in which a high degree of decentralisation is desired?

A)The environment is complex and uncertain.
B)Lower-level managers do not want to have a say in decisions.
C)Decisions are significant.
D)The company is large.
E)The organisation is facing a crisis or the risk of company failure.

Question 61

In recent restructuring of the pharmaceutical company GlaxoSmithKline, where the lab scientists set priorities and allocate resources, the change has helped produce an entrepreneurial environment akin to a smaller biotechnology outfit.This is an example of what type of organisation?

A)bureaucratic
B)mechanistic
C)volatile
D)nouvelle
E)organic

Question 62

Innovators need the efficiency, stability and tight controls of the mechanistic structure.

Question 63

The relationship between organisational size and structure tends to be linear.

Question 64

Which of the following is NOT a characteristic of a mechanistic organisation?

A)high specialisation
B)wide spans of control
C)high formalisation
D)limited information network
E)extensive departmentalisation

Question 65

What type of organisational form follows classical principles such as clear chain of command?

A)organic
B)linear
C)decentralised
D)mechanistic
E)adhocracy

Question 66

Woodward's findings support that there is 'one best way' to organise a manufacturing firm.

Question 67

Woodward demonstrated that organisational structures adapted to their technology.

Question 68

Appropriate organisational structure is contingent on four variables: the organisation's strategy, size, technology and degree of environmental uncertainty.

Question 69

Most current strategy-structure contingency frameworks tend to focus on three strategy dimensions.These dimensions are ________.

A)revenue maximisation, customer satisfaction and visibility
B)customer satisfaction, employee satisfaction and ethics
C)innovation, cost minimisation and imitation
D)legal considerations, profit maximisation and innovation
E)long-term survival, profit maximisation and customer satisfaction

Question 70

Which of the following is an accurate statement about organisational structure and strategy?

A)Strategy should follow structure.
B)Strategy and structure are equal in temporal importance.
C)Strategy and structure are not linked.
D)Structure should follow strategy.
E)Mechanistic and organic organisations have distinct differences in the application of the relationship between strategy and structure.

Question 71

Which of the following is NOT one of the four contingency variables that help determine appropriate organisational structure?

A)organisational size
B)organisational strategy
C)organisational technology
D)organisational age
E)degree of environmental uncertainty

Question 72

Scenario-based questions: Paul Abdul Oil Corporation
Paul Abdul Oil Corporation (PAOC)began as a relatively small oil company.However, through the years it has grown to become an international corporation.
Refer to Paul Abdul Oil Corporation (Scenario).As PAOC continues to grow, a highly trained group of managers and analysts has developed at corporate headquarters.This group is highly adaptive in its structure.Members of this group do not have standardised jobs, but are empowered to handle diverse job activities and problems.This group of employees is said to have a(n)________ structure.

A)simple
B)divisional
C)functional
D)mechanistic
E)organic

Question 73

Structure is related to the size of the organisation, in that larger organisations usually have more ________.

A)specialisation
B)departmentalisation
C)centralisation
D)both A and B
E)all of the above

Question 74

Which of the following would likely be found in mechanistic organisations?

A)wide span of control
B)empowered employees
C)decentralised responsibility
D)few rules and/or regulations
E)standardised job specialties

Question 75

The ________ organisational structure is characterised by high specialisation, extensive departmentalisation, narrow spans of control and high formalisation.

A)mechanistic
B)organic
C)contingency
D)adhocracy
E)functional

Question 76

In a short essay, list six factors that influence the amount of centralisation and six factors influence the amount of decentralisation in an organisation.

Question 77

An organic organisation would likely be very flexible.

Question 78

Joan Woodward attempted to view organisational structure from a technological perspective.

Question 79

All of the following are characteristics of an organic organisation EXCEPT ________.

A)narrow spans of control
B)cross-hierarchical teams
C)free flow of information
D)low formalisation
E)cross-functional teams

Question 80

An organic organisation tends to be characterised by high specialisation, extensive departmentalisation, narrow spans of control, high formalisation, a limited information network and little participation in decision making by low-level employees.