Deck 13: Designing Organizational Structures

Question 1

Span of control is interconnected with organizational size and the number of layers in the hierarchy.

Answer 1

True
Explanation: Span of control is interconnected with organizational size (number of employees) and the number of layers in the organizational hierarchy. The reason for this relationship is that a company with a wider span of control necessarily has more employees per supervisor, more supervisors for each middle manager, and so on.

Question 2

Standardizing processes is less effective in non-routine and complex work.

Answer 2

True
Explanation: Standardization involves creating routine patterns of behavior or output. This coordinating mechanism is feasible when the work is routine or simple, but it is less effective in nonroutine and complex work such as product design.

Question 3

Most organizations begin with centralized structures and become more decentralized as they grow larger and divide work into more specialized functions.

Answer 3

True
Explanation: Most organizations begin with centralized structures: the founder makes most of the decisions and tries to direct the business toward his or her vision. As organizations grow, however, they diversify and their environments become more complex. Senior executives aren't able to process all the decisions that significantly influence the business. Consequently, larger organizations typically decentralize.

Question 4

The two fundamental requirements of all organizational structures are divisionalization and decentralization.

Question 5

An organization's structure is the same as its organizational chart.

Question 6

The number of layers in an organization's hierarchy depends on the number of people employed and the average span of control.

Question 7

Companies can be centralized in some parts of the organization and decentralized in other parts.

Question 8

Tall hierarchies encourage employee empowerment and engagement because they focus power around employees rather than managers.

Question 9

Integrator roles increase informal communication as a coordinating mechanism.

Question 10

Job description helps improve quality and consistency of a product or service by standardizing work activities.

Question 11

Generally,a narrow span of control is necessary where employees perform highly interdependent work with others.

Question 12

Concurrent engineering can be used to encourage informal communication as a coordinating mechanism.

Question 13

Division of labor leads to increased job specialization.

Question 14

Large organizations can encourage informal communication as a coordinating mechanism by keeping each production site small.

Question 15

Organizations tend to become less formalized as they age and grow larger in terms of the number of employees.

Question 16

Formal hierarchy is the least time-consuming coordinating mechanism where employees work in non-routine and ambiguous situations.

Question 17

When work activities are too complex to standardize through extensive training for employees,companies need to coordinate work effort through precise job descriptions.

Question 18

A narrow span of control exists when a manager has many direct reports.

Question 19

When work is divided among people,a coordinating mechanism is needed to ensure that everyone works in concert.

Question 20

Informal communication is a coordination mechanism only in small and a few medium-sized organizations.

Question 21

Functional structures foster professional identity and permit greater specialization than most other forms of departmentalization.

Question 22

Team-based organizational structures are usually found within larger divisionalized structures.

Question 23

Departmentalization establishes interdependencies among employees and subunits and frames the membership of formal work teams.

Question 24

As external environments become more complex and dynamic,organizational structures should become more mechanistic and less organic.

Question 25

Formalization represents the establishment of standardization as a coordinating mechanism.

Question 26

A problem with departmentalization is that it discourages coordination through informal communication.

Question 27

Conflict and ambiguity associated with the matrix structure causes some employees to experience more stress.

Question 28

Organizations move toward a team-based structure by flattening the hierarchy,reducing formalization,and making extensive use of self-directed work teams.

Question 29

Employees working at the matrix level have two bosses.

Question 30

The primary source of environmental diversity or uncertainty mainly determines the best form of divisional structure an organization should adopt.

Question 31

Companies with divisionalized structures are increasingly adopting the geographically-based structure.

Question 32

In a typical matrix structure,several satellite organizations are bee-hived around a core firm.

Question 33

A problem with the team-based organizational structure is that employees may experience more stress due to ambiguity of their roles.

Question 34

A problem with the divisional structure is that it increases the risk of duplication and underutilization of resources.

Question 35

A mechanistic structure is decentralized,has a wide span of control and little formalization.

Question 36

Mechanistic structures operate better in stable environments than in rapidly changing environments.

Question 37

Functional structures tend to have higher dysfunctional conflict and poorer coordination across units than other forms of departmentalization.

Question 38

Divisional structures may be formed around products,geography,or clients.

Question 39

One of the main forces pushing organizations toward a matrix structure is the recognition that an organization has only a few core competencies.

Question 40

A simple structure is one of the best structures in which to accommodate organizational growth and diversification.

Question 41

If a company chooses a low-cost strategy,an organic structure is preferred because it maximizes production and service efficiency.

Question 42

Coordination of work activities is:

A) required whenever there is division of labor.
B) required only in team-based organizations.
C) required whenever the organization has more than approximately 100 employees.
D) required only when organizations operate in complex environments.
E) discouraged in organizations as it leads to a high degree of interdependence among employees.

Question 43

Which of the following fundamental requirements do all organizational structures have?

A) Flatter span of control and decentralization
B) Division of labor and coordination
C) Decentralization and divisionalization
D) Coordination and decentralization
E) Centralization and outsourcing

Question 44

Standardizing work through job descriptions and procedures:

A) is a form of coordination.
B) is more common when the work is complex and ambiguous.
C) tends to reduce quality and consistency.
D) is unnecessary in large organizations.
E) is more common in organic rather than mechanistic structures.

Question 45

One of the main advantages of network structures is that they ensure the core organization has a high degree of control over production,marketing and other functions.

Question 46

A mechanistic structure works better than an organic structure where tasks have high variety and low analyzability.

Question 47

When work activities are too complex to standardize through procedures or goals,companies often coordinate work effort:

A) through direct supervision.
B) by extensively training employees.
C) by giving one employee most of the tasks previously divided among many people.
D) through further division of labor.
E) through formal hierarchy.

Question 48

If a company's strategy is to compete through innovation,a more organic structure would be preferred.

Question 49

Contingencies,such as size,technology,and environment do not necessarily determine an organization's structure.

Question 50

Dividing work into more specialized jobs:

A) increases training costs.
B) reduces work efficiency.
C) reduces the opportunity to match people with appropriate jobs.
D) increases the time taken in changing from one task to another.
E) gives an opportunity to the job incumbents to master their tasks quickly.

Question 51

Network structures come close to the perfect example of a mechanistic organizational structure.

Question 52

In organizational structures,integrator roles serve mainly as:

A) a form of standardization.
B) an informal communication coordinating mechanism.
C) a form of direct supervision.
D) technological contingency.
E) main element in divisionalized structures.

Question 53

Decentralization is the preferred strategy for organizations in simple,integrated (one market),and hostile environments.

Question 54

Larger firms tend to be more centralized and make greater use of direct supervision than do smaller firms.

Question 55

Coordination through formal hierarchy relies on:

A) informal communication.
B) job descriptions.
C) goals and objectives.
D) direct supervision.
E) specialized skills of the employees.

Question 56

Mechanistic structures are better suited to dynamic environments than to stable environments.

Question 57

Organizational strategy influences both the contingencies of structure and the structure itself.

Question 58

Which of the following is typically most important among people working in hospital surgical operations?

A) Organizational goals
B) Integrator roles
C) Job descriptions
D) Extensive training
E) Company rules

Question 59

The more integrated the environment,the more the firm would benefit from a divisionalized form of departmentalization.

Question 60

To increase work efficiency and make it easier to match employee competencies with job requirements,companies:

A) divide work into more specialized jobs.
B) rely on formal hierarchy as a coordinating mechanism.
C) rely on a narrow span of control.
D) centralize decision making.
E) rely on formal hierarchy and a narrow span of control.

Question 61

A wholesale grocery business operates in one city and provides one service-stocking retailers with fresh produce.The company wants to ensure that employees develop expertise in their skill specialization and that these specializations are used efficiently.The aim is to create specialized pools of talent that serve everyone in the company.Which of the following forms of departmentalization would be most appropriate here?

A) Simple structure
B) Matrix structure
C) Geographic divisional structure
D) Functional structure
E) Product divisional structure

Question 62

The simple structure usually depends on _____ to coordinate work activities,so it is very difficult to operate as the company grows and becomes more complex.

A) the owner's direct supervision
B) standardization through formal instructions
C) formal training (standardizing skills)
D) standardization of product or service outputs
E) decentralization

Question 63

Which of the following forms of departmentalization organizes employees around specific skills or other resources?

A) Divisional structure
B) Functional structure
C) Simple structure
D) Matrix structure
E) Network structure

Question 64

A wider span of control is possible if:

A) employees manage themselves rather than being coordinated through close supervision.
B) the company has a high degree of formalization and operates in a complex environment.
C) the organization has few employees and a tall hierarchy.
D) the companies do not rely on self-directed teams.
E) very few people report directly to a manager.

Question 65

Mechanistic structures operate best:

A) in stable environments.
B) where employees dislike hierarchy and status.
C) when there is horizontal rather than vertical communication flows.
D) where knowledge management is a competitive advantage to the organization.
E) where employees perform tasks with high variety and low analyzability.

Question 66

Many of the best-performing production plants are able to widen their span of control to more than 70 employees per supervisor by:

A) teaching supervisors how to more efficiently monitor employees.
B) giving up on the idea that all employees must perform their fair share of work.
C) hiring supervisors who intimidate employees more often.
D) relying on self-directed work teams and other coordinating mechanisms.
E) introducing video cameras and other technologies to help supervisors to monitor more employees.

Question 67

One of the defining characteristics of a functional organizational structure is that it:

A) has a narrow span of control and high degree of formalization and centralization.
B) is the structure that organizes employees around specific knowledge or other resources.
C) overlays two organizational structures in order to leverage the benefits of both types of structure.
D) uses self-directed work teams rather than individuals as the basic building block of organizations.
E) is an alliance of several organizations for the purpose of creating a product or serving a client.

Question 68

Formalization in organizational structures tends to:

A) reduce organizational flexibility.
B) encourage organizational learning and creativity.
C) focus attention on the ultimate objectives of the organization.
D) reduce organizational flexibility, and make employees feel alienated and powerless.
E) decrease efficiency and compliance.

Question 69

_____ establishes the chain of command-the system of common supervision among positions and units within the organization.

A) Span of control
B) Formalization
C) Centralization
D) Job rotation
E) Departmentalization

Question 70

Organizational and environmental complexities push organizations toward:

A) formalization.
B) a more mechanistic structure.
C) decentralization.
D) a simple structure.
E) a narrow span of control.

Question 71

Which of the following organizational design elements determines the sharing of resources and encourages coordination through informal communication?

A) Span of control
B) Formalization
C) Centralization
D) Departmentalization
E) Standardization

Question 72

One problem with a functional structure is that:

A) it is more difficult to directly supervise employees within each department.
B) it produces higher dysfunctional conflict and poorer coordination.
C) it makes it difficult to permit greater specialization of skills.
D) it prevents companies from creating economies of scale.
E) employees have difficulty creating career paths within their area of knowledge.

Question 73

Span of control,centralization,and formalization together form a cluster around two broader organizational forms called:

A) hierarchical and delayered structures.
B) networked and team-based structures.
C) geographic and product/client divisions.
D) organic and mechanistic structures.
E) diverse and integrated structures.

Question 74

Candoo Ltd.will soon flatten its hierarchy by removing two of the five layers of management.If the number of employees in the organization remains constant,which of the following must also occur?

A) It must adopt a matrix form of departmentalization.
B) It must widen the span of control.
C) It must rely more on direct supervision than on standardization to coordinate the resulting structure.
D) It must centralize decision making.
E) It must discourage employee empowerment.

Question 75

An organic structure has:

A) a narrow span of control.
B) centralized decision making.
C) little formalization.
D) vertical communication flows.
E) rigidly defined tasks.

Question 76

_____ is the degree to which organizations standardize behavior through rules,procedures,formal training,and related mechanisms.

A) Departmentalization
B) Span of control
C) Formalization
D) Centralization
E) Division of labor

Question 77

Flatter organizational structures:

A) tend to reduce overhead costs.
B) receive lower quality information from the external environment.
C) undermine employee empowerment and engagement.
D) receive less timely information from the external environment.
E) narrow the span of control for supervisors.

Question 78

A consumer products firm with a functional structure is expanding from a single product line into several diverse product groups,with most sales within one country.Which of the following should it eventually adopt to manage the new conditions most effectively?

A) Geographic divisional structure
B) Client divisional structure
C) Matrix structure
D) Product divisional structure
E) Simple structure

Question 79

When functional structures are compared with divisionalized structures,functional structures are known to:

A) create better economies of scale.
B) be more responsive to local markets.
C) encourage employees to focus on the organization's superordinate goals.
D) be more decentralized.
E) be more responsive to client needs and reduce conflict across work units.

Question 80

As organizations grow older,they tend to:

A) become more formalized.
B) have a more centralized structure.
C) move toward a simple form of departmentalization.
D) shift from a mechanistic to an organic structure.
E) operate with a wide span of control and less standardization.