Deck 7: Organizing the Business Enterprise

Question 1

What is the meaning of the individual boxes on an organization chart?

A) Each box is appropriately labelled as a function or a process in the flow of materials/services.
B) Each box represents a job within the company.
C) Each box indicates a different geographical departmentalization.
D) Each box represents a group of people.
E) Each box represents a product or service provided by the organization.

Answer 1

B

Question 2

In a Disney animated feature, the job of one cartoonist may be to draw the face of a single character throughout the feature. This is an example of

A) mission enhancement.
B) segmentation.
C) departmentalization.
D) group tasks.
E) job specialization.

Answer 2

E

Question 3

Roger is analyzing the jobs to be done in his company, their specific overall purpose, and how the jobs relate to each other. Roger is analyzing the company's

A) job descriptions.
B) organizational chart.
C) organizational structure.
D) departmentalization.
E) chain of command.

Answer 3

C

Question 4

Scott is looking at a chart showing the company's organization structure. He notices that there is a solid line connecting Judy and Charles to Kara. This means that

A) all reports created by Judy and Charles must be sent to Kara.
B) the product flows from Judy and Charles to Kara.
C) there is a direct telephone line between Judy and Charles and Kara.
D) Kara has more seniority than Judy or Charles.
E) Judy and Charles both report to Kara.

Question 5

What is the purpose of organization charts?

A) They portray the firm's structure and the relationship of employees within the organization.
B) They are a valuable tool for companies experiencing a large increase in research and development expenditures on new products.
C) They show the grouping of jobs into logical units.
D) They are used to plan marketing campaigns.
E) They determine which jobs need to be accomplished and who will perform them.

Question 6

The two basic building blocks of all business organizations are

A) specialization and departmentalization.
B) profit centres and divisions.
C) functional and divisional departmentalization.
D) managers and workers.
E) centralization and decentralization.

Question 7

When Ford executives announced changes intended to eliminate corporate bureaucracy, speed decision making, and improve communication and working relationships among people at different levels of the organization, these changes were examples of the ________ function of management.

A) organizing
B) planning
C) directing
D) controlling
E) none of these

Question 8

The process of identifying the specific jobs that need to be done and designating the people who will perform them leads to

A) segmentation.
B) departmentalization.
C) job specialization.
D) group tasks.
E) mission enhancement.

Question 9

At a steel company, some employees transport scrap steel while others operate shredding equipment. What does this example demonstrate?

A) Departmentalization
B) Specialization
C) Functionalization
D) Responsibility
E) Innovation

Question 10

Whether a business is large or small, the starting point in developing its organization structure is

A) determining a strategic plan.
B) appointing a board of directors.
C) establishing a mission statement.
D) determining who will do what.
E) None of these are correct.

Question 11

The chain of command illustrates ________, while the organization chart illustrates ________.

A) job specialization; the company's structure
B) reporting relationships; job specialization
C) centralization; decentralization
D) functional departmentalization; job specialization
E) reporting relationships; the company's structure

Question 12

Organizational structure refers to

A) the process that is used to develop an organizational chart.
B) determining which employees report to whom.
C) the specification of the jobs to be done within a business and how those jobs relate to one another.
D) determining how best to use available material resources.
E) structuring the necessary resources to complete a particular task.

Question 13

Businesses spend time developing organization charts because

A) charts portray the firm's structure and the relationship of employees within the organization.
B) a chart determines which jobs need to be accomplished and who will perform them.
C) charts are a valuable tool for companies that are involved in the research and development of new products.
D) charts are useful when planning marketing campaigns.
E) all of these.

Question 14

What is the meaning of the solid lines connecting the boxes on an organization chart?

A) They identify the relationship of the important staff departments.
B) They identify the level of specialization within the organization.
C) They identify the reporting relationship, or chain of command, within the organization.
D) They identify the relationship between the processes in the flow of materials/services.
E) They identify the products or services available from the organization.

Question 15

Which of the following is correct with respect to organizational structure?

A) Once an organizational structure is in place, it tends not to change much until the next major change is made.
B) With the busyness that is evident in most organizations, structure may often develop without much planning.
C) The organization's purpose, mission, and strategy are not particularly important factors in the structure an organization adopts; rather, the most important factor is executive preferences.
D) An organization's structure is largely the result of rational planning, and the preferences of managers do not generally influence the decision of which structure to adopt.
E) All of these are correct.

Question 16

Which term is defined as a physical depiction of the company's structure showing employee titles and their relationship to one another?

A) Chain of command
B) Organizational structure
C) Organization chart
D) Organizational strategy
E) Organizational determinants

Question 17

The chain of command has all of the following characteristics except

A) solid lines in an organization chart show the chain of command.
B) when the chain of command is not clear, many different kinds of problems can arise.
C) it shows the flow of decision-making power in a firm.
D) the chain of command shows both the informal and formal organizational structure.
E) it shows the reporting relationships within a business.

Question 18

Which of the following clarify structure and show employees where they fit into a firm's operations?

A) Organization charts
B) Responsibility
C) Departmentalization
D) Delegation
E) The mission statement

Question 19

Grouping jobs into logical units is called

A) departmentalization.
B) process management.
C) specialization.
D) development of the grapevine.
E) authorization.

Question 20

What would an organization use to show a new employee his/her position in the firm and its relationship to other positions?

A) Manual of positions and relationships
B) Departmentalization plan
C) Organizational strategy
D) Job specialization list
E) Organization chart

Question 21

Department stores like Hudson's Bay are most likely to departmentalize by

A) function.
B) geography.
C) process.
D) customer.
E) product.

Question 22

As part of your annual physical, you notice that while at the hospital you'll be sent to the x-ray, to the lab for blood workups, to another department for stress testing, and so on. You realize that since each test requires different equipment and worker skills, the hospital is departmentalized by

A) geography.
B) function.
C) process.
D) product.
E) customer.

Question 23

Because most sales departments and service departments want to be close to their customers, they are usually departmentalized by

A) function.
B) product.
C) geography.
D) customer.
E) process.

Question 24

Pickle maker Vlasic has separate departments to transform cucumbers into fresh-packed pickles, pickles cured in brine, and relishes. They have chosen departmentalization by

A) customer.
B) function.
C) process.
D) geography.
E) product.

Question 25

In reviewing the organizational structure of your company, you notice that engineering is subdivided into mechanical, electrical, and software. Additionally, the accounting department is subdivided into accounts payable, accounts receivable, and asset management. What type of departmentalization has the company selected?

A) Process
B) Functional
C) Geographic
D) Product
E) Customer

Question 26

Businesses use profit centres because

A) sales revenue in various territories is easier to determine.
B) each individual reports to no more than two managers.
C) a greater degree of job specialization can be attained.
D) the organization may be divided according to the production process used.
E) each separate unit is responsible for its own costs.

Question 27

Karen, a human resources manager, is looking at the specific jobs in her organization. She would like to see what tasks each employee is doing. She is primarily investigating

A) organization chart.
B) departmentalization.
C) chain of command.
D) organizational structure.
E) job specialization.

Question 28

ComputerLand's structure is set up so that each location is responsible for its own costs and profits. Each location is

A) a specialized unit.
B) a process department.
C) a profit centre.
D) a product department.
E) a centralized department.

Question 29

Departmentalization refers to

A) the number of employees managed by a single supervisor.
B) the level at which decisions are made.
C) the duty to perform an assigned task.
D) the grouping of specialized jobs into logical units.
E) the establishment of a unit that is responsible for its own costs and profits.

Question 30

David has grouped some jobs together in such a way that they can be treated as if they are a separate business which is responsible for its costs, revenues, and profits. David has created a

A) functional department.
B) profit centre.
C) departmentalized work group.
D) matrix structure.
E) a divisionalized department.

Question 31

Firms that have departments such as production, marketing, finance, human resources, etc. are using ________ departmentalization.

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

Question 32

An international company that has organized itself by areas such as North America, Europe, Pacific, and South America is departmentalized by

A) function.
B) product.
C) customer.
D) process.
E) geography.

Question 33

Susie's Pets and Supplies, a retail shop that sells pets and many related products needed by those pets, has recently reorganized. One area of the store is exclusively for dogs, another exclusively for cats, another exclusively for tropical fish, and so on. The shop is departmentalized by

A) process.
B) function.
C) geography.
D) customer.
E) product.

Question 34

Electronic Universe is organized by departments such as televisions sets, VCR, radio, etc. What type of departmentalization do they use?

A) Product
B) Process
C) Geographic
D) Functional
E) Electronic

Question 35

Michael is in the process of taking the department's overall "job" and breaking it down into smaller and smaller "jobs." Michael is working on

A) a matrix structure.
B) job specialization.
C) departmentalization.
D) job classification.
E) job analysis.

Question 36

Silver Designs is a high-end clothing manufacturer. They have three divisions producing clothes for men, women, and teens. What is this an example of?

A) Functional departmentalization
B) Process departmentalization
C) Customer departmentalization
D) Product departmentalization
E) Geographic departmentalization

Question 37

The men's clothing department at Hudson's Bay is an example of a

A) functional department.
B) process department.
C) product department.
D) profit centre.
E) matrix structure.

Question 38

Bigbucks Bank has separate departments for consumer loans and commercial loans. It is departmentalized by

A) process.
B) customer.
C) product.
D) geography.
E) function.

Question 39

Canadian Wood Products has three divisions. The Lumberjack division is involved in harvesting trees and transporting them to lumber mills. The Milling division transforms cut timber into dimensional lumber for building. The Paper Products division makes paper and cardboard from the remnants of the milling process. What type of departmentalization is this an example of?

A) Functional departmentalization
B) Process departmentalization
C) Customer departmentalization
D) Geographic departmentalization
E) Brand departmentalization

Question 40

Which of the following is correct with regard to job specialization?

A) It is a new idea.
B) Its application is limited to factory work.
C) It is a natural part of organizational growth.
D) It makes it more difficult to replace people who leave the organization.
E) All of these are correct.

Question 41

Which of the following best describes responsibility?

A) The power to make the decisions necessary to complete a task
B) The liability of subordinates for accomplishing tasks assigned by managers
C) The number of people supervised by one manager
D) The duty to perform an assigned task
E) The need to prove satisfactory work performance

Question 42

Which of the following is an advantage of customer departmentalization?

A) Employees will make more money and have more job security.
B) Top managers can easily see how the production process is working.
C) Greater expertise can be developed when specialists of one function work together.
D) Top managers can determine when resources need to be changed because of increasing demand in a particular geographic area.
E) The business benefits from efficiencies and customers get better service.

Question 43

________ is the assignment of a task, responsibility, or authority by a manager to a subordinate.

A) Delegation
B) Decentralization
C) Centralization
D) Responsibility
E) Authority

Question 44

Which organizational structure is a company using if it has departments such as marketing, manufacturing, legal, and human resources?

A) Functional
B) Product
C) M.M.H.L. structure
D) Process
E) Customer

Question 45

Bob has had some problems with some of the tasks that he has assigned to his subordinates not getting completed properly. The most likely problem would be that

A) he has assigned authority without assigning responsibility or accountability.
B) he has not assigned authority, accountability, or responsibility.
C) he has assigned responsibility and accountability without giving the necessary authority.
D) he has assigned authority and responsibility without assigning accountability.
E) none of these.

Question 46

The development of the decision-making hierarchy is a three-step process that involves

A) researching information, evaluating information, and distributing information.
B) centralizing resources, assigning tasks, and delegating responsibility.
C) assigning tasks, performing tasks, and distributing authority.
D) outsourcing work, monitoring progress, and insourcing finished products.
E) none of these.

Question 47

Which of the following best describes delegation?

A) The duty to perform an assigned task
B) The liability of subordinates for accomplishing tasks assigned by managers
C) The assignment of a task, responsibility, or authority by a manager to a subordinate
D) The power to make the decisions necessary to complete a task
E) The number of people supervised by one manager

Question 48

Departmentalization is the process of

A) creating separate profit centres.
B) creating separate revenue centres.
C) developing an organization chart.
D) creating chains of command.
E) grouping jobs into logical units.

Question 49

With regard to the issue of geographic vs. product departmentalization, it is correct to say that

A) it is generally fairly easy for managers to decide whether to use geographical or product departmentalization.
B) geographic departmentalization reduces the likelihood of duplicate production and other facilities.
C) geographic departmentalization may lead to compartmentalization of knowledge in each geographic area.
D) many years ago it made more sense to use product departmentalization, but now more and more companies are moving to geographic departmentalization.
E) PepsiCo was formerly organized around product areas, but it recently moved to geographic departmentalization.

Question 50

A machine shop has arranged all of the drill presses in one area, all the lathes in another, all the surface grinders in still another, etc. Because of the differences in equipment and operator skills, the machine shop has chosen departmentalization by

A) process.
B) function.
C) customer.
D) product.
E) geography.

Question 51

Which of the following best describes accountability?

A) The assignment of a task, responsibility, or authority by a manager to a subordinate
B) The number of people supervised by one manager
C) The duty to perform an assigned task
D) The liability of subordinates for accomplishing tasks assigned by managers
E) The power to make the decisions necessary to complete a task

Question 52

Why is it often difficult for managers to decide whether to use product or geographic departmentalization?

A) Because consumer tastes are constantly changing
B) Because global competition is so intense
C) Because product and geographic departmentalization each have advantages and disadvantages
D) Because managers in foreign countries overstep their authority and have to be reined in
E) Because communicating with far-flung parts of an organization is now easier than it used to be

Question 53

As you enter your favourite store looking for a graduation gift for your cousin, you notice the signs suspended from the ceiling: Men's, Women's, Children's, Infant's. The store is departmentalized by

A) geography.
B) customer.
C) function.
D) product.
E) process.

Question 54

Which of the following is an advantage of delegation?

A) Increases work skills of subordinates
B) Permits the manager to focus on the day-to-day operations
C) Makes it easier to punish workers who perform tasks poorly
D) Permits the manager to exercise closer control over subordinates
E) Subordinates are not held accountable for tasks assigned by delegation

Question 55

Once a task has been assigned to a subordinate, the subordinate owes the manager

A) delegation.
B) span of control.
C) authority.
D) responsibility.
E) accountability.

Question 56

David has grouped some jobs together in such a way that they can be treated like they were a small business, responsible for its costs, revenues, and profits. David has created a

A) process department.
B) departmentalized work group.
C) profit centre.
D) profit and loss centre.
E) functional department.

Question 57

The type of departmentalization where all the engineers are in an engineering department, all the customer service reps are in a customer service department, and all the accountants are in an accounting department is called ________ departmentalization.

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

Question 58

Which of the following best describes authority?

A) The power to make the decisions necessary to complete a task
B) The liability of subordinates for accomplishing tasks assigned by managers
C) The number of people supervised by one manager
D) The ability to take on new responsibility
E) The duty to perform an assigned task

Question 59

Which of the following best describes responsibility?

A) The liability of subordinates for accomplishing tasks assigned by managers
B) The power to make the decisions necessary to complete a task
C) The assignment of a task, responsibility, or authority by a manager to a subordinate
D) The duty to perform an assigned task
E) The number of people supervised by one manager

Question 60

Which of the following best describes authority?

A) The assignment of a task, responsibility, or authority by a manager to a subordinate
B) The power to make the decisions necessary to complete a task
C) The number of people supervised by one manager
D) The liability of subordinates for accomplishing tasks assigned by managers
E) The duty to perform an assigned task

Question 61

What kind of organization becomes more responsive to its environment by breaking the company into more manageable units?

A) Centralized
B) Decentralized
C) Functional
D) Process-oriented
E) Brand conscious

Question 62

What is the main organizational characteristic of decentralized firms?

A) Flat
B) Tall
C) Diverse
D) Multi-layered
E) Matrix

Question 63

In which organization type is decision-making authority delegated to lower level managers so they can be more responsive to customers' needs?

A) Centralized
B) Quasi-centralized
C) Span of control
D) Chain of command
E) Decentralized

Question 64

At Roger's company, new products are developed using a team approach. The vice-presidents of production, marketing, finance, and engineering meet weekly to cover topics of common interest and new products are usually on the agenda. Recently, there have been numerous delays in the launching of most of the new products and along with the delays has come much finger-pointing. Which of the following items is lacking in this situation and probably a major cause for the poor performance?

A) Authority
B) Span of control
C) Responsibility
D) Delegation
E) Accountability

Question 65

When delegating authority, managers should keep all of the following points in mind except

A) deciding on the nature of the work to be done.
B) matching the job with the skills of subordinates.
C) checking up on subordinates frequently to ensure that they do not make mistakes.
D) making sure the person chosen understands the objectives he or she is supposed to achieve.
E) making sure subordinates have the time and training necessary to do the task.

Question 66

What does the term span of control refer to?

A) The time span that is required to complete a delegation task.
B) The width of the manager's authority.
C) The number of subordinates a manager supervises.
D) The vertical span of levels in an organization.
E) None of these.

Question 67

Which of the following items would tend to support narrower spans of control?

A) Subordinates work independently of each other.
B) Subordinates perform complex tasks.
C) Subordinates perform diverse tasks.
D) Tasks are not routine.
E) All of these are correct.

Question 68

Where a quick response time is critical, ________ is typically used.

A) functional authority
B) a narrow span of control
C) centralized decision making
D) team authority
E) decentralized decision making

Question 69

What type of decision-making structure is used when upper management must approve lower level decisions?

A) Authority structure
B) Supervisory check/recheck system
C) Centralized
D) Delegation
E) Decentralized

Question 70

Scott's management style is one where he gets his subordinates heavily involved in department activities. After assigning specific tasks, he follows up with them to be sure that they are completing the assigned activities. What is Scott's assigning of activities called?

A) Authority
B) Responsibility
C) Accountability
D) Span of control
E) Delegation

Question 71

You are the manager of the Marketing Department. In order to get office and art supplies, you must submit a purchase requisition. Company policy states that you can only approve up to $500, but any more must have the signature of your boss. Based on this, you are probably lacking in which of the following?

A) Accountability
B) Delegation
C) Span of control
D) Responsibility
E) Authority

Question 72

Scott's management style is one where he gets his subordinates heavily involved in department activities. After assigning specific tasks he follows up with them to be sure that they are completing the assigned activities. What is the name for the duty that Scott believes his subordinates owe him?

A) Span of control
B) Responsibility
C) Authority
D) Delegation
E) Accountability

Question 73

What are the circumstances under which decision-making authority is likely to be decentralized?

A) A company where managers practice little delegation
B) A company where the top managers control everything
C) A small owner-operated company
D) A large organization where top managers cannot personally supervise every detail
E) When high dollar value decisions are made

Question 74

An organization that begins to eliminate management levels in a "downsizing" restructuring is moving toward

A) a tall, centralized structure.
B) a line organization.
C) an informal organization.
D) a flat, decentralized structure.
E) it is not possible to tell with this information.

Question 75

The term "span of control" refers to

A) the accountability to complete tasks.
B) the organizational level which makes most of the decisions.
C) the number of people that one supervisor can manage.
D) the number of management levels within the organization.
E) the number of specialists in the organization, such as engineers and accountants.

Question 76

Which of the following items would tend to support wider spans of control as the best choice?

A) Subordinates perform complex tasks.
B) Subordinates work independently of each other.
C) Subordinates perform non-routine tasks.
D) Subordinates perform diverse tasks.
E) One subordinate's tasks depend on another subordinate's tasks.

Question 77

Which statement about organizational structure is true?

A) Decentralized firms tend to have many layers of management.
B) As a company gets larger, it tends to adopt a decentralized structure.
C) The purpose of centralization is to make a company more responsive to a changing, complex environment.
D) In a centralized organization, most decision-making authority is held by lower-level managers.
E) Decentralized companies must change to centralized structures in response to unpredictable environments.

Question 78

In order to ensure standardization, at McDonald's most lower-level decisions must be approved by upper management. Which of the following terms applies to this strategy?

A) Centralized organization
B) Decentralized organization
C) Functional authority
D) Responsibility
E) Wide span of control

Question 79

Which of the following is likely to be evident at a small, owner-operated firm?

A) Decentralization
B) Functional authority
C) Team authority
D) A narrow span of control
E) Centralization

Question 80

The greater the ________, the wider the span of control is likely to be, while the greater the ________, the narrower the span of control is likely to be.

A) complexity of the task; employees' abilities
B) the supervisor's managerial skills; interrelationship of the tasks
C) uniqueness of the task; routineness of the task
D) interrelationship of the tasks; the supervisor's managerial skills
E) complexity of the task; the supervisor's managerial skills