Question 1

There is one common disadvantage associated with geographic, product, and customer departmentalization. What is it? Explain how the functional and matrix forms avoid this disadvantage.

Accepted Answer

The answer of There is one common disadvantage associated with...

Question 2

The primary advantage of ____ departmentalization is the fact that it allows companies to manage large, complex tasks efficiently by minimizing duplication.

Accepted Answer

A) product 
B) functional 
C) matrix 
D) geographic

Question 3

A manufacturer of acrylic and latex gloves sells to medical laboratories, to factories where employees handle chemicals, to companies that manufacture micro-tech equipment, and to cleaning services. Because it is organized to better satisfy the needs of each of its four target markets, the manufacturer uses ____ departmentalization.

Accepted Answer

A) matrix 
B) product 
C) customer 
D) geographic 
E) functional

Question 4

One of the key assumptions underlying the chain of command is ____, which means that workers should report to just one supervisor.

Accepted Answer

A) delegation of command 
B) empowerment 
C) synergistic authority 
D) unity of command 
E) centralization of authority

Question 5

What are the primary disadvantages of job specialization? How can job redesign be used to overcome them?

Accepted Answer

The answer of What are the primary disadvantages of job...

Question 6

The chain of command ____.

Accepted Answer

A) is the horizontal line of authority that indicates at which level of management an individual belongs 
B) acts at cross-purposes to the unity of command principle 
C) is only relevant in mechanistic organizations 
D) does not permit delegation of authority 
E) is described by none of these

Question 7

The job design approach associated with ____ involves increasing the number of different tasks that a worker performs within one particular job and giving workers the authority and control to make meaningful decisions about their work.

Accepted Answer

A) job rotation and job enlargement 
B) job specialization and job enrichment 
C) job specialization and job enlargement 
D) job enlargement and job enrichment 
E) job enrichment and job rotation

Question 8

Honeywell Inc. reorganized its European operations along customer lines to prepare for a unified European Union. In doing so, it abandoned matrix departmentalization. Why would Honeywell engage in such restructuring?

Accepted Answer

A) to create pools of resources 
B) to empower its employees 
C) to better adhere to the management philosophy of staff authority 
D) to improve its ability to handle complex tasks 
E) to end conflict between product managers in different parts of its matrix

Question 9

The most common matrix combines customer and functional forms of departmentalization.

Accepted Answer

A) True 
 B)False

Question 10

What is an intraorganizational process? Identify the techniques used by companies today to change these processes. Evaluate the probable level of risk to a company in using each of these approaches.

Accepted Answer

The answer of What is an intraorganizational process? Identify the...

Question 11

A(n)____ function is an activity that contributes directly to creating or selling the company's products.

Accepted Answer

A) staff 
B) line 
C) mechanistic 
D) organic 
E) charted

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. The adoption of the Critical Chain project management methodology is one way Lilly __________ internal processes to increase the speed of getting new drugs on the market.

Accepted Answer

A) reengineered 
B) informalized 
C) increased the number of CROs who perform 
D) outsourced 
E) mobilized

Question 13

In recent years, the Air Force Weather Agency (AFWA)has undergone a radical change in how it determines and shares local weather conditions with pilots. Before the local base weather station was responsible for warnings. The quality of this information varied. Now AFWA provides the same high standard of weather information to all pilots. This is an example of ____?

Accepted Answer

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

Question 14

An organization that has increased the number of different tasks that a worker performs within one particular job has engaged in ____.

Accepted Answer

A) task aggregation 
B) job specialization 
C) job enlargement 
D) employee specialization 
E) job rotation

Question 15

Which of the following types of departmentalization does NOT have a problem with the duplication of resources?

Accepted Answer

A) functional 
B) geographic and matrix 
C) product and customer 
D) customer and functional 
E) geographic

Question 16

In terms of the chain of command, ____ authority is the right to command immediate subordinates, while ____ authority is the right to advise but not command others who are not subordinates.

Accepted Answer

A) departmental; functional 
B) centralized; decentralized 
C) functional; expert 
D) internal; external 
E) line; staff

Question 17

Jennifer Lee works in the public relations department of a large pharmaceutical company. It is her job to write speeches for the company's top managers, to issue press and video releases, to host plant tours, and to be involved in community affairs. Lee has ____.

Accepted Answer

A) line authority 
B) mechanistic authority 
C) empowerment obligations 
D) staff authority 
E) linear power

Question 18

A(n)____ organization is an organization that is characterized by specialized jobs and responsibilities; precisely defined, unchanging roles; and a rigid chain of command based on centralized authority and vertical communication.

Accepted Answer

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

Question 19

Describe the virtual organization. Explain how the virtual organization could theoretically prove to be a more formidable competitor than any of the other types of organization in a highly complex, dynamic business environment.

Accepted Answer

The answer of Describe the virtual organization. Explain how the...

Question 20

____ is a general term that refers to subdividing work and workers into separate organizational units that are responsible for completing particular tasks.

Accepted Answer

A) Organizational layout 
B) Organizational process 
C) Departmentalization 
D) Job formatting 
E) Functionalization

Exam 8: Designing Adaptive Organizations