Deck 8: Adapting Organizations to Todays Markets

Question 1

Reorganizing in order to compete better may require a firm to reduce its number of business units.
If a firm wants to remain competitive,it has the option to reevaluate the corporate structure of its business and determine which business units and operational units are benefiting the bottom line,and which may need to be re-organized or sold.

Answer 1

True

Question 2

The process of creating individual departments to do specialized tasks is called departmentalization.

Answer 2

True

Question 3

Managing a growing business often requires managers to create departments to accomplish various tasks.

Answer 3

True

Question 4

Reorganizing in order to compete better may require a business to reassign tasks.
Companies reorganize in order to be more competitive and reduce costs.In order to reduce costs,the firm may reduce its labor force,and reorganize the jobs and activities to those workers who remain.

Question 5

The success of the firm often depends on assigning the right tasks to the right person.

Question 6

One reason to reorganize is to become more competitive.

Question 7

An organization chart shows who is accountable for the completion of specific work and who reports to whom.

Question 8

As depicted in the Reaching Beyond our Borders,box,"General Electric Looks for More Profits",in order to compete globally,corporate strategy should not try to match the performance of competitors.
In order to compete globally,it is often necessary to increase or reduce operational segments in order to match or exceed the performance of global competitors.

Question 9

Reorganizing in order to compete better may require a business to reduce its labor force.
Companies reorganize in order to be more competitive and reduce costs.In order to reduce costs,the firm may reduce its labor force,and reorganize the jobs and activities to those workers who remain.

Question 10

Organizing the structure of the company means deciding how many jobs need to be done and who is responsible for doing them.

Question 11

The purpose of a division of labor and specialization is to improve an employee's job performance.

Question 12

Correctly structuring a business organization allows managers to avoid delegating responsibility and authority to employees.

Question 13

Division of labor is difficult to achieve in small businesses.
Division of labor is a basic organizational principle in all organizations.All businesses (both large and small)should contemplate the division of labor in their organizations.

Question 14

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

Question 15

One key to organizational success is to go back to basic principles and build the business on a sound foundation.

Question 16

Small business organizations lack the size required to reap the benefits of labor specialization.

Question 17

The process of setting up individual departments to do specialized tasks is called job specialization.

Question 18

In a capitalist economy,organizations seldom reorganize due to changing markets.

Question 19

Looking at a traditional organization chart,you will view who reports to whom;you will have a sense of each person's authority and responsibility,and the type of work that they perform for the organization.
An organization chart shows you who reports to whom,and who is accountable for the completion of what jobs.

Question 20

Departments are functional units within the business such as sales,accounting,finance,and marketing.
The basic principles of organization do not differ significantly from firm to firm.As firms grow,they usually develop a system with division of labor and specialization,and then proceed to departmentalize - create departments that produce specialized tasks for the business.

Question 21

Weber was critical of bureaucrats because he felt they undermined the efficiency of the organization.

Question 22

Weber believed that large organizations required everyone to follow the established rules and guidelines precisely.

Question 23

Fayol's principles suggest that the goals of the firm are less important than the goals of individual workers.

Question 24

The driving force behind the change in business organizations is the change in consumer expectations.

Question 25

Alicia dreams of opening her own restaurant and knows that she will need to organize her business.Organizing begins with determining the work to be done.
Organizing,also known as adding structure to the business begins with determining what work needs to be done and then dividing up tasks among the employees.

Question 26

When Eric Schmidt joined Google™,one of the most successful companies of this decade,he tackled the organization function head-on.In speaking at a large conference with Google founders,Sergey Brinn and Larry Page,he commented that Google was running pretty well,"it just needed a little structure." Schmidt was referring to basic organization principles such as division of labor,specialization,and getting the departments up and running.
Basic organization principles include division of labor,specialization of tasks,and departmentalization.

Question 27

In its effort to reorganize its floor space,Backstreet Books decided to eliminate seating space in its stores in order to make room for bookshelves due to growing interest in books about how to "go green".This company's effort is an example of how a firm may reduce its emphasis in one product line in order to serve customer preferences and trends.
If a firm wants to remain competitive,it may reevaluate which product lines are more profitable than others and organize its floor space and marketing emphasis to capture consumer attention.

Question 28

Weber had a great deal of faith in managers.He was confident that a firm would do well if employees simply did as they were told.

Question 29

Fayol believed that managers should treat employees and peers with respect and justice.

Question 30

Recent changes in the organizational structure of businesses are intended to facilitate management of the firm.

Question 31

Henri Fayol and Max Weber are best known for their contributions to accounting theory.

Question 32

Max Weber's principles of organization were similar to those of Henri Fayol.

Question 33

Clear communication between workers and keeping order in materials and people are included in Fayol's principles.

Question 34

To better organize his landscaping business,Frank divides each job into several parts.One part is excavation and removal of old landscaping,the next part is design,followed by purchasing,and the last part is installation of new plants.If he assigns a different employee to each part,this action would be an example of departmentalization.
Departmentalization is the creation of functional units of a business.The jobs described in this question would all fall under the production department.Other departments in Frank's business may include marketing,sales,and accounting.By asking different employees to perform different tasks relating to a particular job,Frank is creating division of labor within his company,and/or specialization.

Question 35

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

Question 36

As indicated in the Making Ethical Decisions box titled,"Safety versus Profit",organization decisions that affect profits in a negative way should be avoided at all cost.
As indicated in the Making Ethical Decisions story,how your organization performs the job is very important.Setting an organization culture is as important as setting an organization structure.Adhering to safety precautions when doing the job demonstrates management's commitment to their employees.

Question 37

Fayol believed that the amount of decision-making power vested in top management should be the same in all situations.

Question 38

According to Fayol's principle of Authority,if you have authority you also have responsibility.

Question 39

One of Fayol's principles suggests that managers should have the right to give orders and expect others to follow.

Question 40

Fayol's principle of esprit de corps says that employees should be divided into small groups that can be directed efficiently by a single manager.

Question 41

Weber believed that employees should be empowered to make their own decisions.

Question 42

According to Weber,a bureaucrat is a middle manager whose job is to implement top management's orders.

Question 43

Weber was a strong proponent of bureaucracy.

Question 44

The design of a bureaucratic organization assumes a well-educated workforce.

Question 45

Job descriptions are an important part of Max Weber's organizational theory.

Question 46

A chain of command is a line of authority that moves from the lowest level of the hierarchy to the top.

Question 47

A bureaucratic style of organization is slow when responding to change.

Question 48

Bureaucratic organizations are not very responsive to customers.

Question 49

A bureaucracy is an organization with many layers of managers who set rules and regulations and oversee all decisions.

Question 50

Bureaucratic organizations are structured to empower employees and please customers.

Question 51

Weber promoted the idea of the pyramid-shaped organization structure for large businesses.

Question 52

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

Question 53

Max Weber believed that promotion should be based solely on seniority.

Question 54

Max Weber's organizational theories require an educated work force to operate efficiently.

Question 55

A bureaucracy empowers employees to quickly respond to customers' wants and desires.

Question 56

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

Question 57

Bureaucratic organizations establish rules and regulations that everyone is expected to follow.

Question 58

A bureaucracy is designed to be customer focused.

Question 59

Some business organizations still follow the 1940s organizational theory of Max Weber.

Question 60

Empowerment works only when employees are given the proper training and resources to respond.

Question 61

Weber put great trust in the creativity,skills,and pride of employees and believed that managers should act more as coaches than as bosses.
Weber put great trust in managers and believed that workers should simply do as they were told.

Question 62

Centralized authority provides for the delegation of authority to employees who are then better able to respond to customers' needs.

Question 63

The basic idea behind the organization design of Fayol and Weber was that management wanted to control workers.

Question 64

Rob is a middle manager who spends much of his time devising ways to implement the ideas of top management.Max Weber would have considered Rob a bureaucrat.
Max Weber used the term bureaucrat to describe middle managers whose main function was to implement top management's orders.

Question 65

The degree to which an organization allows lower level managers to make decisions determines the degree of decentralization.

Question 66

Most businesses adopt a bureaucratic organization in order to speed up their decision making process.
In a bureaucratic organization there are typically many layers of management with rigid rules and regulations.A strict chain of command is followed which can slow down the decision making process.

Question 67

Ping believes all workers should receive the same wage rate regardless of their position within a company.Ping's views on wages illustrate Fayol's principle of equity.
Fayol's principle of equity says that managers should treat employees with respect and justice.It does not,however,suggest that all workers should be paid the same wage rate.

Question 68

In today's fast-paced business environment,Weber's bureaucratic ideas work well.These principles permit business to respond quickly to customer changes.
Max Weber's ideas worked well with a less educated workforce that did not make decisions.The bureaucratic model did not allow for immediate response to changing market conditions,and changing customer needs.

Question 69

Antonio works in the accounting department of a large firm.This is an example of Fayol's division of labor concept.
Henri Fayol's division of labor suggests that efficiency can be improved if employees are assigned into an area of specialization,such as production,marketing,and finance.

Question 70

When we experience economies of scale this means that as production levels rise (we make more of something),the cost of supplies and cost of labor that goes into the production,goes down.
Economies of scale is when the cost of production goes down,as the level of production rises.

Question 71

An advantage of decentralized authority is that those individuals closest to the customers and more familiar with local conditions make decisions.

Question 72

As a result of rapidly changing markets and global differences in consumer tastes,more firms are considering centralized authority.

Question 73

Sam supervised a group of people in a very large organization.The refrigerator in the lunchroom stopped functioning.Although he started the paperwork on the day it died,the refrigerator request went out for bid;two middle managers needed to approve it;and,the purchasing director had final approval.The refrigerator arrived six months later.Max Weber would have approved of the detail and documentation Sam's company accumulated to back-up the purchase.
Max Weber is known as the originator of bureaucracy,where decisions are followed-up with lots of paperwork and documentation.There are several layers of management,and decisions must be approved by several people,creating a significant amount of lag time from the first recognition of a problem,until the problem is finally solved.

Question 74

As a new employee in a bureaucratic organization,Nancy can expect a great deal of independence and authority.
In a bureaucratic organization,everyone is expected to follow specific rules.One of the problems with this type of organization is that employees have little flexibility to respond to customer wants and needs.

Question 75

The purpose of Weber's and Fayol's principles was for the benefit of management,as opposed to pleasing customers.
Fayol and Weber's ideas made management's life easier.Their organization principles facilitated management's needs,but did little for employees or customers.

Question 76

At Dilly-Dally Sportswear Store a manager needs to be called to the front of the store and sign-off on every return that a cashier performs.The CEO continues this policy because he wants every manager to "look those customers right in the eye" and "stake their job on taking those items back." Clearly,Dilly-Daly empowers its employees to make decisions at their jobs.
Bureaucratic organizations are characterized by top down authority,division of labor,and the presence of many rules and regulations.Empowerment is often missing from an organization where decisions are made top down.

Question 77

As organizations grew,the use of Fayol's principles led to rigid organizations that didn't always respond quickly to consumer requests.
Organizations were designed according to Fayol's principles so that no person had more than one boss.These principles tended to be written down as rules,policies,and regulations as organizations grew larger.The process of rule making often led to rather rigid organizations that didn't always respond quickly to consumer requests.

Question 78

Soprano Industries follows a chain of command with authority moving from the top of the hierarchy down to lower-level managers.The company is organized by department with established rules and regulations that everyone is expected to follow.All of these characteristics suggest that Soprano is an example of a bureaucratic organization.
Bureaucratic organizations are characterized by top down authority,division of labor,and the presence of many rules and regulations.

Question 79

Bryce is a manager at a car seat manufacturing company.He believes that it is very important and less confusing if each worker has only one boss.Bryce's view is consistent with Fayol's unity of command principle.
The unity of command principle says that each worker should report to one,and only one,boss.

Question 80

Kate holds a middle management position with a large corporation.She prefers to involve her subordinates in decision-making.She also favors allowing workers a fair amount of flexibility in how they do their jobs.Kitty's approach to management exemplifies the principles first popularized by Max Weber.
Weber believed that the firm would do well if workers simply did as they were told.He also believed that large organizations could only function efficiently if rules and guidelines were established,and everyone followed these rules precisely.