Question 1

A(n)____ organization is one that is characterized by broadly defined jobs and responsibilities; loosely defined, frequently changing roles; and decentralized authority and horizontal communication based on task knowledge.

Accepted Answer

A) centralized 
B) mechanistic 
C) departmentalized 
D) organic 
E) modular

Question 2

An international distribution company has a shipping division, a warehouse division, a computer hardware and software distribution center, as well as, a marketing research department, a human resources department, and an accounting department. A salesperson who works in the shipping division is told by the accounting department that he must turn in a weekly expense account. His supervisor in the shipping division wants expense accounts submitted monthly. The salesperson is likely experiencing a problem with ____.

Accepted Answer

A) line authority 
B) delegation of authority 
C) centralization 
D) chain of command 
E) organizational synergy

Question 3

A(n)____ is a form of matrix departmentalization in which managers in different parts of the matrix negotiate conflicts and resources directly.

Accepted Answer

A) simple matrix 
B) networked matrix 
C) empathetic matrix 
D) matrix of convenience 
E) synergistic matrix

Question 4

According to an electronics CEO, the first requirement of management is that it should make the fullest use of the capacities of its members. Thus any individual's job should be as little defined as possible so that it would 'shape itself' to the person's special abilities and initiative. This electronics company more than likely had a(n)____ organization.

Accepted Answer

A) centralized 
B) mechanistic 
C) departmentalized 
D) organic 
E) modular

Question 5

Except for the core business activities that they can perform better, faster, and cheaper than others, ____ outsource all remaining business activities to outside companies, suppliers, specialists, or consultants.

Accepted Answer

A) modular organizations 
B) hierarchical organizations 
C) boundaryless organizations 
D) organizational networks 
E) virtual organizations

Question 6

Zara clothing stores has developed a system that can order new fashions and deliver them to the store in only three weeks. It uses ____ to pass information to the next person in the line of development.

Accepted Answer

A) standardization 
B) sequential interdependence 
C) pooled interdependence 
D) manager empowerment 
E) transactional intradependence

Question 7

Organizational structure is the description of the vertical and horizontal configuration of departments, authority, and jobs within a company.

Accepted Answer

A) True 
 B)False

Question 8

Yahoo! Welcome to Yahoo! where you'll find a $100 million loss, plummeting advertising sales, a stock price that has fallen from an all-time high of $237 to less than $10 per share, and layoffs that cost 800 people-including the previous CEO-their jobs. At this once-phenomenally-successful company, so many basic things have gone wrong that the question is: Where do you start to fix it? One key problem is the organizational structure: with just 3,200 employees, Yahoo! has forty-four different business units! Even General Electric, with 300,000 employees, has only 13. You think to yourself, "This is unmanageable. Too many people and no focus." Amazingly, despite having 44 business units, Yahoo! doesn't have a direct sales unit. No one, it turns out, is responsible for cultivating customers. Why not? Well, during the "go-go" days, customers were literally throwing themselves and their advertising dollars at the company. As one Yahoo! manager said, "The fish were jumping into the boat." Consequently, most orders took place via email. Yahoo! didn't have to establish relationships with customers because customers came to it. Unfortunately, this led to arrogance. Jeff Bell, a vice president at one of Yahoo!'s potential customers, said the message was, "Buy our stuff [meaning Yahoo!'s advertising], and shut up." Jeff Mallett, Yahoo!'s former president, said, "We ran Yahoo! to optimize market share. I make no apologies for that. If there was a company that didn't get it [Internet advertising], we moved on very quickly."
Another problem was the overly creative, freewheeling, spontaneous company culture in which everyone, including the CEO, worked in cubicles. The problem wasn't so much the cubicles, but what they came to represent: an overly informal culture with no controls. At Yahoo!, employees played soccer in a large open space outside the company boardroom, even while the board was meeting. Furthermore, no one had an overall perspective of what was best for the entire company. Consequently, said one Yahoo! vice president, "[Unit] managers would beg, borrow, and steal from the network [meaning the overall company] to help their own properties." Plus, if you had an idea, you pursued it without having to get anyone's feedback or approval. Yahoo!'s chief operating officer said, "Yahoo!'s original mission was to grow as fast as you can and put things out there and see what works." The more serious problem, he said, was that "nobody knew what would work."
The most amazing aspect of this culture was that, as one manager explained, "There was a fair amount of resistance toward the strategy of monetizing our businesses." In other words, the culture at Yahoo! was so informal, so unfocused, and so freewheeling that no one really worried about whether the company could charge for the services it provided and make a profit. "There was a fear," said this manager, "that if all of our efforts were put into profit making, we'd starve research and development and lose our innovation." Refer to Yahoo!. What is one of the advantages of Yahoo's new organizational structure?

Accepted Answer

A) elimination of the constraints associated with the chain of command 
B) a flatter structure better able to respond to a static environment 
C) elimination of resource duplication 
D) the ease with which cross-departmental cooperation can be achieved 
E) the ease with which top managers can assess work-unit performance

Question 9

A military expert describes how the military forces were organized for Operation Desert Storm as pooled interdependence. This means that each branch of the military that took part in the operation ____.

Accepted Answer

A) independently contributed to the success of the campaign 
B) worked with each other in a give-and-take manner 
C) performed identical tasks 
D) accepted the fact that one's group's output was another group's input 
E) had little, or no, autonomy

Question 10

In a decentralized organization, workers closest to problems are authorized to make the decisions necessary to solve the problems on their own.

Accepted Answer

A) True 
 B)False

Question 11

All organizations can be categorized clearly as either completely mechanistic or completely organic.

Accepted Answer

A) True 
 B)False

Question 12

WWYD Eli Lilly Eli Lilly's 20-year patent on Zyprexa, a drug that generates $5 billion a year runs out in October 2011. This means other manufacturers can sell low-priced generic versions of the drug. Lilly has seven other major drugs that will fall off the "patent cliff" and stands to lose 75% of its annual revenue if it doesn't generate new "blockbuster" drugs. And Lilly isn't the only pharmaceutical company in this situation. The entire industry will see half of its revenues fall off due to expiring patents. When Lilly's patent expired on Prozac, a drug for depression taken daily by 40 million people, then-CEO Sidney Taurel took steps to energize drug development by increasing R&D budget and instructing Lilly's 7,000 researchers to focus on drugs that could produce one-half billion dollars a year in sales. This time, however, expanding headcount and increasing R&D budgets aren't options. The long-term challenge is to grow Lilly's drug pipeline with faster, less expensive innovation. Some think that large budgets, centralized approval for allocating research dollars, and "siloed" research (where few know and understand what others in the company are working on)stifle innovation and slow decision making. Thus, after laying off workers and reducing annual expenses by $1 billion, CEO John Lechleiter had to jumpstart Lilly's drug development process and restructure his company to address this challenge. John Lechleiter restructured Lilly to significantly improve communication in product development teams and speed up the entire drug development process. One of his first actions was to put everyone involved in the drug development process under one building, which Lilly named the Development Center of Excellence. In addition to improving chances for spontaneous communication, the company focused on ways to achieve dramatic improvements in cost, quality, service, and speed. Lilly began using Critical Chain project management developed by physicist Eli Goldratt, which eliminates delays that occur in a process when a task is completed by one person and then handed off to the next to begin the next step or task in the process.
Lilly also created a group within the company called Chorus, which outsources 80% of Lilly's research to contract research organizations (CROs). To ensure results, CROs earn bonuses for successfully meeting deadlines-and, if the products make it to market, they earn drug sale royalties too.
The cost of using CROs is roughly a third less than it would have cost for Lilly to do the testing in-house. Of course, modular organizations have disadvantages, too, such as the loss of control that occurs when key business activities are outsourced to other companies. Also, suppliers to whom work is outsourced can sometimes become competitors. So, is Lilly risking its future by outsourcing the core function of researching and testing new drugs? While CROs may help pharmaceutical companies do a faster job of determining which drugs don't deserve more expensive late-phase testing, some critics doubt whether they can help firms like Lilly uncover the blockbuster drugs they need to replace the drugs that are coming out of patent protection. Refer to WWYD Eli Lilly. John Lechleiter was able to reorganize personnel and create a the Development Center of Excellence because he had______with respect to the other employees.

Accepted Answer

A) staff authority 
B) centralized authority 
C) unity 
D) autonomy 
E) line authority

Question 13

Modular organizations ____.

Accepted Answer

A) allow a high level of control over business processes and output 
B) cost significantly more to run than traditional organizations 
C) outsource all but the core business activities that they can perform best 
D) succeed because they operate independently from vendors and suppliers 
E) are accurately described by all of these

Question 14

How do the mechanistic and organic approaches to organizational design differ? Under what circumstances is each appropriate for use by a company?

Accepted Answer

The answer of How do the mechanistic and organic approaches...

Question 15

According to an Indian Cardinal by the name of Varkey Vithayathil, the greatest weakness of the Catholic Church is the way papal authority is exercised without the participation of those concerned. His eminence Cardinal Vithayathil is criticizing the fact that the Catholic Church relies on ____.

Accepted Answer

A) centralization of authority 
B) standardization 
C) top management reciprocity 
D) job specialization 
E) decentralization

Question 16

Specialized jobs are characterized by simple, easy-to-learn steps; low variety; and high repetition.

Accepted Answer

A) True 
 B)False

Question 17

LexisNexis realized that its ability to serve new Web-based customers was severely straining its customer service department after thousands of small and midsize law firms representing a huge business opportunity had to wait 48 hours to have their Web accounts activated after signing up. Clearly, LexisNexis needed to revamp its customer sign-up and order-fulfillment processes, which were designed for large law firms and the ordering of hardcover legal tomes. LexisNexis would most likely use ____ to radically change its business practices.

Accepted Answer

A) standardization 
B) micro-adaptation 
C) sequential independence 
D) reengineering 
E) customer empowerment

Question 18

Which of the following statements about matrix departmentalization is true?

Accepted Answer

A) Most employees in an organization that uses matrix departmentalization report to two bosses. 
B) With matrix departmentalization, there tends to be more cross-functional interaction among employees than in other types of departmentalization. 
C) With matrix departmentalization, there needs to be significant coordination between functional and project managers. 
D) The most common matrix combines product and functional departmentalization. 
E) All of these statements about matrix departmentalization are true.

Question 19

The composition of a ____ organization is always changing.

Accepted Answer

A) modular 
B) boundaryless 
C) decentralized 
D) virtual 
E) mechanistic

Question 20

Elena works in a data processing department for a large credit reporting service and is bored. She spends her days inputting an endless stream of monotonous data into much larger data bases. According to the job characteristics model (JCM), one of the primary reasons for her boredom is ____.

Accepted Answer

A) a low degree of feedback 
B) a high degree of autonomy 
C) a low degree of task identity 
D) a high degree of task significance 
E) a high degree of skill variety

Exam 8: Designing Adaptive Organizations

A(n) ____ organization is one that is characterized by broadly defined jobs and responsibilities; loosely defined, frequently changing roles; and decentralized authority and horizontal communication based on task knowledge.

A(n) ____ is a form of matrix departmentalization in which managers in different parts of the matrix negotiate conflicts and resources directly.

Except for the core business activities that they can perform better, faster, and cheaper than others, ____ outsource all remaining business activities to outside companies, suppliers, specialists, or consultants.

Zara clothing stores has developed a system that can order new fashions and deliver them to the store in only three weeks. It uses ____ to pass information to the next person in the line of development.

Organizational structure is the description of the vertical and horizontal configuration of departments, authority, and jobs within a company.

A military expert describes how the military forces were organized for Operation Desert Storm as pooled interdependence. This means that each branch of the military that took part in the operation ____.

In a decentralized organization, workers closest to problems are authorized to make the decisions necessary to solve the problems on their own.

All organizations can be categorized clearly as either completely mechanistic or completely organic.

Modular organizations ____.

How do the mechanistic and organic approaches to organizational design differ? Under what circumstances is each appropriate for use by a company?

According to an Indian Cardinal by the name of Varkey Vithayathil, the greatest weakness of the Catholic Church is the way papal authority is exercised without the participation of those concerned. His eminence Cardinal Vithayathil is criticizing the fact that the Catholic Church relies on ____.

Specialized jobs are characterized by simple, easy-to-learn steps; low variety; and high repetition.

Which of the following statements about matrix departmentalization is true?

The composition of a ____ organization is always changing.

Elena works in a data processing department for a large credit reporting service and is bored. She spends her days inputting an endless stream of monotonous data into much larger data bases. According to the job characteristics model (JCM) , one of the primary reasons for her boredom is ____.