Deck 7: Organizational Design

Question 1

 Which of the following firms is most likely to benefit from the clan approach?

A) A firm with highly uncertain working conditions
B) A firm with work activities that can be easily measured
C) A firm that lacks diverse working styles
D) A firm operating in a price-competitive industry

Answer 1

A

Question 2

 Which of the following statements is true of division of labor?

A) Horizontal specialization refers to how much an employee creates, executes, and administers activities in a certain area of the firm.
B) The repetitive nature of specialized jobs lends itself to quick and efficient training of new resources.
C) Extreme job specialization tend to increase the level of job satisfaction among workers.
D) Vertical specialization refers to the breadth of activities that are performed in a certain job.

Answer 2

B

Question 3

 Which of the following statements about the divisional structure is true?

A) Coordination among functions in a divisional structure is less fluid than it is in a functional structure.
B) It allows for greater accountability because each division is a separate self-contained entity.
C) The general manager of a functional form has a broader purpose than the general manager in the divisional form.
D) Employees tend to identify more with their function than with their division.

Answer 3

B

Question 4

 A _____ structure is an organizational structure where key decisions are made at all levels of the firm, not only at the top.

A) decentralized
B) multinational
C) centralized
D) bureaucratic

Question 5

 The Nickells Advertising Agency assigns a team of individuals to work on a client's advertising campaign. When the project is completed, each of the team members will be assigned to new teams pulled together for new campaigns. The Nickells Advertising Agency has a _____ structure.

A) functional
B) matrix
C) divisional
D) network

Question 6

 Which of the following is a weakness of the matrix structure?

A) In matrix structure, the divisional managers have more authority than the functional managers, which causes an imbalance of power.
B) A manager cannot use a matrix structure when resources need to be shared and optimized across divisions and within functions.
C) When a firm's internal interrelationships are complex, it is not possible for managers to adopt a matrix structure.
D) It often creates confusion for its managers who are simultaneously accountable to distinct units that don't always share the same objectives.

Question 7

 The Tidwell Company has a production department, a marketing department, a sales department, and an accounting department. The sales department is headed by the VP of sales and manages the department in a hierarchical manner. Employees are evaluated on achieving departmental goals. The Tidwell Company has a _____ structure.

A) functional
B) matrix
C) divisional
D) network

Question 8

 Which of the following statements is an advantage of a network structure?

A) It is quite inexpensive for virtual teams to use communication technology.
B) It enables a firm to move quickly to adapt to a change in the marketplace.
C) Virtual teams often require less coordination.
D) It promotes greater accountability than divisional structure.

Question 9

 Star Hydraulics is organized into self-supervising teams that are responsible for a set of tasks. In the teams, each member is cross-trained to be able to perform multiple tasks, and individual goals and values completely overlap with the organization's values. Workers collaborate on projects and must negotiate proper team behavior, using the organization's mission and values as a guide. Star Hydraulics has adopted a _____ approach to organizational control.

A) clan
B) bureaucratic
C) mutually adaptive
D) totalitarian

Question 10

 Fine Gadgets, a gadgets manufacturing company, has an organizational structure where the employees have to strictly follow rules and regulations stated by the management. Moreover, only the top management is allowed to make key decisions regarding organizational activities. Fine Gadgets is an example of a _____ organization.

A) decentralized
B) global
C) diversified
D) centralized

Question 11

 Which of the following firms is most likely to benefit from a bureaucratic approach?

A) A firm with constantly changing, dynamic markets
B) A start-up firm with less complexity
C) A firm involving creativity and innovation
D) A firm with high turnover and a diverse workforce

Question 12

 Which of the following terms refers to a structure where many employees have two bosses (one divisional and one functional) with equal authority in the organization?

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

Question 13

 Which of the following is a key advantage of the clan approach?

A) Clearly defined roles and responsibilities
B) Self-regulating characteristics of employees
C) Close personal surveillance of superiors over subordinates
D) Extreme job specialization

Question 14

 _____ is defined as the pattern of organizational roles, relationships, and procedures that enable coordinated action among employees.

A) Organizational structure
B) Value chain
C) Synergy
D) Organizational culture

Question 15

 Thomas, the head of the marketing department in an organization, has structured his department in such a way that the roles and responsibilities of his workers are loosely defined. Moreover, he does not exert too much control over his workers and encourages two-way communication. His workers tend to be highly satisfied with their jobs when compared to those in the finance department, headed by John who exerts more control. From this scenario it can be inferred that Thomas has adopted a _____ mechanism for coordinating.

A) bureaucratic
B) authoritative
C) centralized
D) behavioristic

Question 16

 In a _____ structure, "knowledge workers" are organized to work as individual contributors or to be a part of a work cluster that provides a certain expertise for the organization.

A) functional
B) divisional
C) matrix
D) network

Question 17

 In a functional structure, a firm

A) groups diverse functions into separate divisions.
B) divides people into units in terms of the main activities that need to be performed.
C) gives equal authority to both divisional and functional managers.
D) categorizes its employees based on their performance and commitment.

Question 18

 Which of the following is a disadvantage of a divisional structure?

A) It is not suited to competitive situations where coordinated action is needed for innovation.
B) This structure does not allow for much accountability.
C) It is not suited to business environments marked by high degrees of uncertainty.
D) Several core functions are duplicated, preventing the development of economies of scale for those functions.

Question 19

 Moonbow, Inc., has a highly formalized structure with extensive rules, procedures, policies, and instructions. Positions are arranged hierarchically with top management dictating the direction and activity of the organization while lower-level managers and employees follow orders. The fundamental mechanism of monitoring involves close personal surveillance of subordinates by superiors. Moonbow, Inc., has adopted a _____ approach to organizational control.

A) clan
B) bureaucratic
C) mutually adaptive
D) totalitarian

Question 20

 The factor that distinguishes functional organizational structure from divisional is that

A) a functional structure is organized around the outputs a firm produces.
B) a functional structure is best suited to deal with environmental change.
C) a functional structure groups diverse functions into separate divisions.
D) a functional structure is organized in terms of the main activities to be performed.

Question 21

 Outline the five customer-centric activities of an organization.

Question 22

 Of the five activities that make a firm customer-centric, connection involves

A) helping employees at the firm develop the right skills needed to better serve customers.
B) creating structural mechanisms at the firm that allow workers to organize their activities to focus more exclusively on creating value for customers.
C) developing relationships with external partners to deliver greater value to customers.
D) using informal methods such as culture and incentives to encourage people in the organization to come together in the spirit of serving customers.

Question 23

 Explain the concepts of division of labor and scope of position.

Question 24

 Which of the following terms refers to a functional unit that operates according to its own rules and guidelines and does not openly share information with other units?

A) Artifact
B) Silo
C) Claim value
D) Synergy

Question 25

 The process by which firms impact the nature of their overarching environment and adapt their organization in response to evolving contextual factors is called

A) business process reengineering.
B) vertical specialization.
C) mutual adaptation.
D) horizontal specialization.

Question 26

 Define organizational structure and briefly describe its types.

Question 27

 One of the most important benefits of the functional structure is the efficiency it creates.

Question 28

 Behaviorists are those who support a more open organizational structure where roles and responsibilities are loosely defined.

Question 29

 The management of an organization is in the process of reorganizing the firm's activities with a more customer-centric focus. They are mainly focused on helping employees build the skills needed to better serve customers. Identify the customer-centric activity used by the management.

A) Capability development
B) Coordination
C) Cooperation
D) Connection

Question 30

 Of the five activities that make a firm customer-centric, cooperation involves

A) helping employees at a firm develop the right skills needed to better serve customers.
B) creating structural mechanisms at the firm that allow workers to organize their activities to focus more exclusively on creating value for customers.
C) developing relationships with parties outside the firm to increase the value of the firm's offerings.
D) shaping an organization's culture and aligning incentives to encourage employees across silos in the organization to come together in the spirit of serving customers.

Question 31

 Describe the clan approach.

Question 32

 As firms expand and grow in complexity, they are likely to reorganize into a functional structure.

Question 33

 The key advantage of the matrix structure is that it creates clarity for managers who are simultaneously accountable to distinct units that don't always share the same objectives.

Question 34

 One of the primary mechanisms by which the objectives of a firm are achieved is through the way the firm is organized.

Question 35

 Which of the following statements is true of the organizational design and the life cycle of a firm?

A) Once a firm reaches maturity, the emphasis on coordination generally increases.
B) The nature of leadership should remain stable as the firm keeps evolving.
C) As a firm matures, it tends to emphasize division of labor.
D) Start-up firms are characterized by more job specialization.

Question 36

 Starbucks joining forces with Pepsi to distribute its cold Frappuccino products to retail/grocery outlets is an example of pursuing customer-centricity through

A) cooperation.
B) capability development.
C) clout.
D) connection.

Question 37

 When a hotel chain empowered all employees dealing directly with customers with the ability to make decisions regarding the best way to rectify situations with unhappy customers, it was an example of pursuing customer-centricity through

A) cooperation.
B) capability development.
C) clout.
D) connection.

Question 38

 The process of mutual adaptation is most critically important in which of the following industries?

A) Fashion
B) Fast food
C) Gas and oil
D) Travel and tourism

Question 39

 Of the five activities that make a firm customer-centric, coordination involves

A) using informal methods such as culture and incentives to encourage people in the organization to come together in the spirit of serving customers.
B) developing relationships with parties outside a firm to increase the value of the firm's offerings.
C) helping employees at a firm develop the right skills needed to better serve customers.
D) creating structural mechanisms at a firm that allow employees across silos to organize their activities to focus more exclusively on creating value for customers.

Question 40

 Discuss organizational design and the life-cycle of a firm.