Chapter 10--Designing Adaptive Organizations

Student: ___________________________________________________________________________

1.

The deployment of organizational resources to achieve strategic goals refers to organizing.

True False

2.

Organizing defines what to do while strategy defines how to do it.

True False

3.

The framework in which the organization defines how tasks are divided, resources are deployed and
departments are coordinated is called organizational structure.
True False

4.

A organizational map is a visual representation of an organization's structure, showing communication

and lines of power.
True False

5.

Despite the apparent advantages of specialization, many organizations are moving away from this
principle.
True False

6.

The principle of unity of command suggests that managers within an organization should reach
agreement on the goals and objectives of the organization.
True False

7.

Authority is the right to use resources, make decisions and issue orders in an organization.
True False

8.

The duty to perform the task or activity an employee has been assigned is called accountability.
True False

9.

Most organizations today discourage managers to delegate authority to the lower levels given the
challenges to meet customer needs and adapt to the environment.
True False
The acceptance theory of authority argues that managers have authority because employees do not have a
choice in choosing to accept their commands.
True False

Line departments perform tasks that reflect the organizations primary goal and mission.
True False
The right to advise, recommend, and counsel in the staff specialists' area of expertise is included in staff
authority.
True False
The number of employees reporting to a supervisor is his or her span of management.
True False
Traditional views of organizational design recommend a span of management of about 7 to 10
subordinates per manager.
True False
Many hierarchical levels and a correspondingly narrow span of management refers to a flat structure.
True False
The trend in recent years has been toward narrower spans of control as a way to facilitate delegation.
True False
A tall structure is a management structure characterized by an overall narrow span of management and a
relatively large number of hierarchical levels.
True False
Certainty in the environment is usually associated with decentralization.
True False
The basis for grouping positions into departments and departments into the total organization is referred
to as departmentalization.
True False
For companies to operate effectively, the amount of centralization or decentralization should fit the firms
strategy.
True False
At Fox End, people are grouped together in departments by common skills and work activities, including
a sales department and a production department. This is an example of vertical functional approach.
True False

The functional structure offers a way to decentralize decision making and provide direction from the
teams in the field.
True False
Because the chain of command converges at the top, the functional structure provides a way to
decentralize decision making and provide unified direction from all managers.
True False
Quick response to external changes is an advantage of vertical functional structure.
True False
Divisions are created, in functional structures, as self-contained units with separate functional
departments for each division.
True False
The divisional structure encourages decentralization.
True False
In a geographic-based structure, all functions in a specific country or region report to the same division
manager.
True False
With a matix structure, the entire organization is made up of horizontal teams that coordinate their work
and work directly with customers to accomplish the organizations goals.
True False
Aspects of both functional and divisional structures simultaneously in the same part of the organization
are combined in the virtual network approach.
True False
The horizontal structure provides traditional control within functional departments, and the vertical
structure provides coordination across departments.
True False
The confusion and frustration caused by the dual chain of command is a major problem of the matrix
structure.
True False
The overseer of both the product and functional chains of command, responsible for the entire matrix is
the matrix boss.
True False
3

The modular approach is similar to virtual networking.

True False
The divisional structure fosters excellent coordination within divisions, but coordination across divisions
is often poor.
True False
In the divisional approach, coordination across divisions is great whereas coordination within divisions is
often poor.
True False
The matrix approach can be highly effective in a complex, rapidly changing environment in which the
organization needs to be flexible and adaptable.
True False
One major disadvantage of the virtual network approach is the lack of hands-on control.
True False
Coordination is the quality of collaboration across departments.
True False
Reengineering is the outcome of information and cooperation.
True False
A project manager is a person responsible for coordinating the activities of several departments for the
completion of a specific project.
True False
Reengineering basically means preserving the past by establishing the sequence of activities by how
work was done.
True False
The radical redesign of business processes to achieve dramatic improvements in cost, quality, service,
and speed is called reengineering.
True False
The distinctive feature of the project manager position is that the person is not a member of one of the
departments begin coordinated.
True False

When an organization uses a differentiation strategy, it strives for internal efficiency.

True False
The pure functional structure is appropriate for achieving internal efficiency goals.
True False
A vertical structure that emphasizes specialization and centralization is appropriate when environmental
uncertainty is high.
True False
A rigid, vertical structure in an uncertain environment prevents the organization form adapting to
change.
True False
The functional structure is appropriate when the primary goal is innovation and flexibility.
True False
Small-batch production is distinguished by standardized production runs.
True False
Which of the following refers to the deployment of organizational resources to achieve strategic goals?
A.
Planning
B. Controlling
C.
Organizing
D.
Leading
E. Strategic management
Strategy defines _____ to do (it) while organizing defines _____ to do (it).
A.
B.
C.
D.
E.

how; what
how; why
what; how
what; why
when; what

Organizational structure includes which of these?

A. The set of formal tasks assigned to individuals
B. The set of formal tasks assigned to departments
C The design of systems to ensure effective
. coordination of employees across departments
D. Formal reporting relationships
E. All of these are part of organizational structure.

Organization structure is defined as the:

Avisual
. representation
of the
organization.
Bframework in
.which the
organization
defined how
tasks are
divided,
resources are
deployed, and
departments are
coordinated.
C. division of
labor.
Dunbroken line of
. authority that
links all
individuals in
the organization.
E. none of these.
The organization chart:
A. shows the characteristics of the organization's vertical structure.
B.
is a visual representation of the organization's structure.
C. details the formal reporting relationships that exist within an organization.
D.
all of these.
E. both shows the characteristics of the organization's vertical structure and is a visual representation of
the organization's structure.
The _____ delineates the chain of command, indicates departmental tasks and how they fit together, and
provides order and logic for the organization.
A.
B.
C.
D.
E.

management chart
employee directory
structural table
administrative chart
organizational chart

Which of the following refers to the degree to which organizational tasks are subdivided into individual
jobs?
A. Multitasking
B. Lines of
authority
C. Work
specialization
D. Autonomy
E. Team structure
When work specialization is extensive:
A employees perform a
. single task.
B. employees perform
many tasks.
C employees are often
. highly challenged.
D.employees are often
inefficient.
E. jobs tend to be large.
Louise works in the manufacturing department at Ice Sculptures. The work in Louise's department is low
in task specialization. As a result, Louise:
A usually performs a
. single task.
B does a variety of
. tasks and activities.
C. is often bored.
D. is rarely challenged.
E. generally goofs-off.
_____ is also referred to as work specialization.
A. Division of labor
B. Unity of command
C.
Scalar chain
D. Esprit de corps
E. Virtual network approach

Jacob was recently looking at his company's organization chart in an attempt to discover who reports to
whom. Jacob is studying his organization's:
A. degree of
formalization.
B. amount of
differentiation.
C. degree of
centralization.
D. chain of
command.
E. division of labor.
Unity of command and the scalar principle are both closely related to the:
Aamount of work
. specialization in
an organization.
B. degree of
formalization.
C. chain of
command.
Damount of
. bureaucracy in the
organization.
E. matrix structure.
_____ means that each employee is held accountable to only one supervisor.
A.
B.
C.
D.
E.

Scalar principle
Unity of command
Work specialization
Division of labor
Span of management

The formal and legitimate right of a manager to make decisions is _____.

A. delegation
B. responsibil
ity
C. authority
D span of
. managemen
t
E. leadership

_____ refers to a clearly defined line of authority in the organization that includes all employees.
A.
B.
C.
D.
E.

Scalar principle
Unity of command
Work specialization
Division of labor
Span of management

Rebecca works for a company that has clearly defined lines of authority. Each employee knows that he or
she has authority and responsibility for a distinct set of tasks. Employees are also aware of the companys
reporting structure as well as successive management levels all the way to the top. Rebeccas company
follows which principle?
A. Specialization principle
B. Unity of command
principle
C. Scalar principle
D. Authority principle
E. Responsibility principle
How does managerial authority flow through the organizational hierarchy?
A.
Vertically
B.
Sporadically
C.
Horizontally
D. In a circular fashion
E. Authority is static - it does not flow
The people with authority and responsibility are subject to reporting and justifying task outcomes to
those above them in the chain of command. This is called _____.
A. delegatio
n
B. line
authority
C. staff
authority
D. accountab
ility
E. hierarchy
Which of the following characteristics distinguishes authority?
A. It is vested in people, not positions.
B. Subordinates accept it.
C. It flows across the horizontal
hierarchy.
D. It emerges from the organizational
values.
E. Individuals are born with this power.
9

Gina wishes to transfer authority and responsibility to her subordinates. This process is known as:
A. accountability.
B. coordination.
C. delegation.
D. departmentalizati
on.
E. passing the buck.
Which of the following typically is NOT considered a staff department?
A. Strategic planning
B.
Accounting
C. Manufacturing
D. Human resources
E. Research and development
Which department performs tasks that reflect the organization's primary goals and mission?
A.
Line
B.
Staff
C.
Primary
D. Functional
E. Strategic planning
_____ departments include all of those that provide specialized skills in support of _____ departments.
A. Line; staff
B. Staff; line
C. Primary;
functional
D. Functional;
primary
E. Line; functional
Carly's Clothes, Inc. manufactures children's clothes. Which of the following departments for Carly's
Clothes can be considered a line department?
A. Finance department
B. Human Resources
department
C Research and
. development
department
D. Manufacturing
department
E. Marketing department

10

Which of the following refers to the number of employees reporting to a supervisor?

A The line of
. authority
B The span of
. management
C The chain of
. command
D The
. management
chain
E. Delegation
Traditionally, a span of management of about _____ has been recommended.
A.
B.
C.
D.
E.

Three
Five
fifteen
seven
twenty

Shoshanna is manager of a customer service firm where she oversees five subordinates. To help her
subordinates learn more about the different roles within the company, Shoshanna regularly assigns them
tasks that are not part of their normal routine. This is an example of:
A. responsibility
B.
delegation
C.
authority
D. chain of command
E. irrational decision making

11

Dustin's subordinates are highly trained and all perform similar tasks. Brittany's subordinates are spread
over two locations and she has little available in the way of support systems. Which of the following
statements is most correct?
ANichole's span
. of management
can be larger
than Kevin's.
BNichole will
. have problems
with unity of
command.
CKevin's span of
. management
can be larger
than Nichole's.
DKevin has more
. problems with
work
specialization.
E. None of these
Which of the following organizations have a flat structure compared to others?
A. Organization A with eleven hierarchical
levels
B. Organization B with three hierarchical levels
C. Organization C with eight hierarchical levels
D. Organization D with six hierarchical levels
E. Organization E with seven hierarchical levels
Which of the following factors is NOT associated with larger span of control?
A.
B.
C.
D.
E.

Work performed by subordinates is stable and routine.

Subordinates perform similar work tasks.
Subordinates are located at various different locations.
Subordinates are highly trained and need little direction.
Rules and procedures defining task activities are available.

Relative to a flat organizational structure, a tall structure has a _____ span of management and _____
hierarchical levels.
A. wide;
fewer
B. narrow;
fewer
C. narrow;
wider
D. narrow;
more
E. wide; more
12

_____ is the trend in recent years.

A Greater work
. specialization
B. Less
delegation
C Wider spans of
. management
DNarrower
. spans of
management
E. Tall structure
Barney and Betty work at Mountain Peak, Inc. Although they both work on the assembly line, they have
the authority to make many decisions about their job. Mountain Peak can be said to have:
A a high degree of
. decentralization.
B a wide span of
. management.
C a high degree of
. centralization.
D a narrow span of
. management.
E. no management.
_____ means that decision authority is located near the _____ of the organization.
A Centralization;
. bottom
B. Decentralizati
on; top
C. Centralization;
top
D Centralization;
. middle
E. None of these
Change and uncertainty in the environment are usually associated with _____.
A. work
specialization
B. decentralization
C. centralization
D. tight vertical
control
E. division of labor

13

Which of the following is the basis for grouping positions into departments and departments into the total
organization?
A. Departmentali
zation
B. Centralization
C. Decentralizati
on
D. Formalization
E. Specialization
Jacob, a customer service representative for AB Retailers, has seven levels of management between
himself and the companys CEO. In contrast, his friend Rhonda, a customer service representative for
YZ Retailers, has only four levels of management between her and the company CEO. Compared to YZ,
Jacobs company has what type of organizational structure?
A. Narrow
B. Wide
C. Flat
D. Tall
E. Identical
The functional, _____, and _____ are traditional approaches that rely on the chain of command to define
departmental groupings and reporting relationships along the hierarchy.
A. divisional,
teams
B. divisional,
matrix
C. matrix, teams
D. matrix,
networks
E. teams, networks
The use of teams may lead to too much:
A. division of labor.
B. decentralization.
C authority and responsibility in
. top management's hands.
D.
formalization.
E. narrow span of management.

14

In times of crisis or risk of company failure, authority should be:

Adecen
. traliz
ed.
Bcentra
. lized
at the
botto
m.
Ccentra
. lized
at the
top.
Dspread
.throug
ha
wide
span
of
manag
ement.
E. flat.
When departments are grouped together on the basis of organizational outputs, the organization is using
a:
A. functional structure.
B. matrix structure.
C. divisional structure.
D. virtual network
structure.
E. team-based structure.
Self-contained unit structure is a term used for:
A. divisional structure.
B. functional structure.
C. term structure.
D. matrix structure.
E. virtual network structure.

15

Relative to the functional structure, the divisional structure:

A. encourages decentralization.
B. has a higher degree of work
specialization.
C. has a more pronounced division of
labor.
D. has excellent coordination across
departments.
E. results in an efficient use of resources.
Theresa works in an organization where coordination across organizational units is poor and the units
perceived themselves to be in competition with one another for organizational resources. These
characteristics are consistent with which of the following structures?
A.
B.
C.
D.
E.

A matrix structure
A functional structure
A divisional structure
A team-based structure
A virtual network structure

All functions in a specific country or region report to the same division manager in _____ divisions.
A. functiona
l
B. matrix
C geographi
. c-based
D. teams
E. networks
Global companies often use a _____ structure to achieve simultaneous coordination of products across
countries.
A.
B.
C.
D.
E.

functional
divisional
matrix
product-based
process-based

A formal chain of command for both functional and divisional relationships is provided by the _____
approach to structure.
A. matrix
B. vertical
functional
C. divisional
D. product
E. team-based

16

Kent works at the Tick Tock, Inc. He has two bosses, one a functional manager and the other a divisional
manager. Tick Tock, Inc. has a _____ structure.
A. function
al
B. division
al
C. geograp
hic
D. matrix
E. product
Disadvantages of the virtual network approach include:
A.
a lack of hands-on control.
B. the possibility of losing an important part of the
organization.
C.
weakened employee loyalty.
D.
all of these.
E. a lack of hands-on control and weakened employee loyalty.
Salta Communications is a global telecommunications company that has operations on four continents.
The CEOs direct supervisors include VPs for the North American South American, European, and the
Asian divisions. Salta can best be described as using what organizational structure?
A.
B.
C.
D.
E.

Network
Matrix
Functional
Divisional
Geographic

The matrix structure violates which of the following principles of management?

A.
B.
C.
D.
E.

Unity of direction
Unity of command
Work specialization
Division of labor
Span of management

All of the following are the major disadvantages of the matrix structure EXCEPT:
A. it generates a large amount of
conflict.
B.managers spend much time
resolving conflict.
C the confusion caused by the
. dual chain of command.
Dthe power imbalance that can
. result between the sides of the
matrix.
E. enlarged tasks for employees.
17

Juan is a top manager at I.F.L., a matrix organization. He oversees both the product and functional
chains of command, and is responsible for maintaining a power balance between the two sides of the
matrix. Juan is a _____.
A. political
leader
B.functional
leader
C.divisional
leader
D. matrix
leader
E. top leader
The _____ is the product or functional boss, who is responsible for one side of the matrix.
A. matrix boss
B. production
supervisor
C. department boss
D. top leader
E. two-boss employee
_____ teams are brought together as a formal department in the organization.
ACross. functio
nal
B Perma
. nent
C. Form
al
D. Adhoc
E. Task
Walt works for a large company. Recently, his organization began to contract out such functions as
training, engineering, and computer service. This approach is consistent with a _____ structure.
A. functio
nal
B. team
C. division
al
D virtual
. network
E. service

18

The _____ is an organization structure that divides the major functions of the organization into separate
companies.
A. diversification
approach
B. team approach
C. virtual network
approach
D. BCG approach
E. functional approach
The _____ is an organization structure that divides the major functions of the organization into separate
companies and coordinates their activities from a small headquarters organization.
A. diversification
approach
B. team approach
C. virtual network
approach
D. BCG approach
E. functional approach
In the _____ structure, the organization is viewed as a central hub surrounded by a network of outside
specialists which are sometimes spread all over the world.
A. virtual
network
B. matrix
C. functional
D. divisional
E. geographic
According to MANAGER'S SHOPTALK in Chapter 10, all of the following are effective ways for a
manager to delegate EXCEPT:
A. delegate the whole task.
B. select the right person.
C save feedback for
. completion of the project.
D. evaluate and reward
performance.
E. give thorough instruction.

19

In the _____ approach, a manufacturing company uses outside suppliers to provide entire chunks of a
product, which are then assembled into a final product by a handful of workers.
A virtual
. network
B. modul
ar
Cvirtual
. organiza
tion
D. team
E. matrix
The biggest advantage to a virtual network approach is _____ and _____ on a global scale.
A. flexibility;
competitiveness
B. coordination;
organization
C. communication;
organization
D. communication; no cost
E. flexibility; coordination
All of the following are advantages of a functional structure EXCEPT:
A.
B.
C.
D.
E.

economies of scale.
excellent coordination between functions.
in-depth skill specialization and development.
high quality technical problem solving.
career progress within functional departments.

An advantage of functional structures is the:

A. resulting economies of scale.
B. enlarged tasks for employees.
C. easy pinpointing of responsibility for
product problems.
D. development of general management
skills.
E. flexibility in an unstable environment.
Which of the following structures is the leanest of all organization forms because little supervision is
required?
A. Functional approach
B. Virtual network
approach
C. Team approach
D. Matrix approach
E. Divisional approach
20

Shooting Star, Inc. has slow response to external changes, centralized decision making, and poor
coordination across departments. It is likely structured:
A along
. divisional
lines.
B. along
functional
lines.
C based on the
. team approach.
Dbased on the
. virtual network
approach.
E. none of these.
Organ Rentals Corporation has been having numerous problems. Communication across departments is
poor and decisions are backing up at the top of the organization. Organ Rentals uses a _____ structure.
A.
B.
C.
D.
E.

geographic
product
functional
matrix
team-based

All of the following are advantages of a divisional structure EXCEPT:

A.
B.
C.
D.
E.

high concern for customers' needs.

fast response, flexibility in an unstable environment.
emphasis on overall product and division goals.
development of general management skills.
there is little duplication of services across divisions.

Which is an advantage of the divisional structure?

A. Concern for customers' needs is high.
B. There is little duplication of services across
divisions.
C. There is good coordination across divisions.
D. Top management retains tight control of the
organization.
E. There is no competition for corporate resources.

21

Advantages of the matrix structure include:

Ait increases
. employee
participation.
Bit makes
. efficient use
of human
resources.
Cit works well
. in a changing
environment.
Dit develops
. both general
and specialist
management
skills.
E. all of these.
Which of the following is(are) an advantage of team structure?
AIncreased
. barriers
among
departments
BUnplanned
. decentralizati
on
CTime and
. resources
spent on
meetings
DLess response
. time, quicker
decisions
E. All of these
Stephanie works in one of seven research and development departments at Tara's Terrace, Inc. This
would suggest that Tara's Terrace has a:
A. functional
structure.
B. divisional
structure.
C. wide span of
control.
D high degree of
. centralization.
E. matrix structure.

22

Which of the following is a contemporary approach to structural design in departmentalization?

A. Functional
B. Divisional
C. Traditional
divisions
D.
Teams
E. Geographic-based
The team approach to departmentalization is a response to:
A.
lack of participative teams.
B.
centralized decision-making.
C.
the competitive global environment.
D.
all of these.
E. both lack of participative teams and centralized decision-making.
Coordination is defined as:
Athe ability of
. the
organization
to produce
timely
products.
Bthe quality of
. collaboration
across
departments.
C. differentiati
on.
Dthe quantity
. of goods
produced by
the
organization.
E. all of these.
Innovative Creations Corporation is designed along functional lines. New product development is very
slow and the process is plagued by many problems. One of the problems is that the people in marketing
never communicate with the people in production. This is an example of poor _____.
A. coordinatio
n
B. planning
C. motivating
D. leading
E. controlling

23

Which of the following happens as organizations grow?

APositions and
. departments are
deleted.
BManagement
. layers are
eliminated to
save cost.
CManagers have
. to find ways to
tie different
departments.
DTop
. management
becomes more
autocratic.
E. None of these.
When the organization is structured along _____ lines, coordination is required.
A.
functional
B.
divisional
C.
team
D.
all of these
E. functional or divisional
The outcome of information and cooperation is _____.
A. organizatio
n
B. planning
C. coordinatio
n
D. differentiati
on
E. controlling
A task force is _____ committee(s) formed to solve a specific problem.
A.
B.
C.
D.
E.

a standing
a permanent
a temporary
all of these
none of these

24

Marissa was recently assigned to a committee whose task is to research new product opportunities. Once
this group generates a list of six or seven viable options, it will be disbanded. This group is also known as
a _____.
A.
team
B. standing
committee
C.permanent
committee
D. task force
E. none of these
Which of the following leads to strong coordination across functional areas and greater flexibility in
responding to changes in the environments?
A. Reengineering
B.
Layoffs
C. Downsizing
D. A temporary
committee
E. An ad hoc committee
Boars' Nest Distributors is continually hampered by an inability to adapt to an unstable environment.
Which of the following is a plausible explanation as to why?
A.
Boars' Nest's structure is too loose.
B.
Boars' Nest's structure is too horizontal.
C.
Boars' Nest uses a vertical structure.
D.
All of these.
E. Both Boars' Nest's structure is too loose and structure is too horizontal.
Makai's Marketing Mix (MMM) does not use its resources wisely. The employees at MMM spend too
much time in meetings and not enough time focusing on the task at hand. MMM's management should
consider changing the organizational structure from _____ to _____.
A.
B.
C.
D.
E.

horizontal, vertical
team based, horizontal
vertical, team based
mechanistic, rigid
team-based, virtual network

Flash Card Inc. recently underwent a significant company-wide change that involved revision of its
manufacturing and leadership processes. The result of this was a stronger emphasis on horizontal
coordination. This level of change is referred to as _____.
A. reorganization
B. reengineering
C. e-engineering
D. strategic planning
E. corporate structuring
25

A(n) ____ is responsible for coordinating the activities of several departments.

A. department manager
B. line manager
C. project manager
D.
operative
E. moderating manager
Lisa is responsible for coordinating the efforts of several different departments. Which of the following
titles best describes her position?
A.
B.
C.
D.
E.

Department manager
Middle manager
First-level supervisor
Project manager
Chairman of the board

Typically, project managers have authority over _____ but not over _____ assigned to it.
A. people; the project
B. the project; people
C. resources; the
project
D. people; other
resources
E. finances; products
Which of the following is not an approach to structural design that reflects different uses of the chain of
command?
A.
B.
C.
D.
E.

Matrix approach
Team-based approach
Process approach
Divisional approach
Virtual network approach

Kara's department is made up of people with similar skills and work activities. Her organization uses the
_____ approach to departmentalization.
A. teambased
B horizont
. al matrix
C. division
al
Dvertical
. functiona
l
E. process

26

Mondavi Corporation has a finance department, a marketing department, and a production department.
Mondavi:
A. uses a functional
structure.
B. has a geographic
structure.
C. uses a divisional
structure.
D. uses product-based
structure.
E. uses a matrix structure.
An organization strives for internal efficiency with a(n) _____ strategy.
A.
B.
C.
D.
E.

integration
diversification
differentiation
defensive
cost leadership

With a(n) _____ strategy, the organization attempts to develop innovative products unique to the market.
A. differentia
tion
B. integratio
n
C. reengineer
ing
D.cost
leadership
E. defensive
A pure functional structure is most appropriate for achieving:
A. innovation.
B. differentiati
on.
C internal
. efficiency
goals.
D. flexibility.
E. all of these

27

Which of the following structures is most consistent with a strategy of stability?

A. Team based
structure
B. Organic structure
C. Matrix structure
D. Functional
structure
E. Learning structure
The pure functional structure does not enable the organization to be:
A. a cost
leader.
B. efficient.
C. flexible.
D. stable.
E. all of these.
Which of the following structures works best in an uncertain organizational environment?
A. A tight structure
B. A mechanistic
structure
C. A horizontal
structure
D. A functional
structure
E. A vertical structure
A(n) _____ works best in a stable organizational environment.
A. loose organizational structure
B.
vertical structure
C.
organic structure
D.
horizontal structure
E. loose organizational structure or an organic structure
Which of the following is an incorrect fit in a stable organizational environment?
A. A tight structure
B. A rigid structure
C. A functional
structure
D. A horizontal
structure
E. A vertical structure

28

In _____ production, firms produce goods in batches of one or a few products designed to customer
specification.
A. servi
ce
Bcustom
. erinduce
d
Ccontin
. uous
proces
s
D small
. batch
E. mass
Swift Move Facilities manufacturers two different bicycle models. The company produces a high
volume of products using standardized production runs. The company does very little product
customization. Swift Move uses what type of technology structure?
A. Service production
B. Mass production
C. Large-batch production
D. Small-batch production
E. Continuous process production
Organizations such as Amazon.com, Google, Facebook, and Priceline.com are examples of firms that are
based on:
A. digital technology.
B. tangible output.
C. direct contact with
customers.
D. mechanistic technology.
E. products rather than services.
In a _____ organization, the entire work flow is mechanized in a sophisticated and complex form of
production technology.
A. service production
B. mass production
C. large-batch production
D. small-batch production
E. continuous process production

29

_____ refers to the fact that services are perishable and cannot be stored in inventory.
A. Boundarylessn
ess
B. Tangible
output
C. Intangible
output
D. Flexible
operations
E. Centralization
Scenario - Javier Gomez
Javier is a veteran manager with Pixel International, Inc. (PII). Recently PII purchased a small business
in the printing industry. Javier has been assigned the task of managing this new acquisition and is
currently deciding how best to design its structure. Currently, employees are assigned to one of three
departments, including sales, production, and legal defense.
In determining Javier's span of management, he should consider all of the following EXCEPT:
a.
b.
c.
d.
e.

is the work performed by subordinates stable and routine?

do subordinates perform similar tasks?
are rules and procedures defining task activities available?
do Javier's personal preferences and style favor a larger or small span?
all of these.

30

Scenario - Javier Gomez

Javier is a veteran manager with Pixel International, Inc. (PII). Recently PII purchased a small business
in the printing industry. Javier has been assigned the task of managing this new acquisition and is
currently deciding how best to design its structure. Currently, employees are assigned to one of three
departments, including sales, production, and legal defense.
The analysis of whether the new division should be centralized or decentralized should include all of the
following EXCEPT:
a.
b.
c.
d.
e.

the level of change and uncertainty in the environment.

corporate history and culture.
the threat of crisis or the risk of company failure.
the structure of competitors and customers.
all of these should be included.

Scenario - Javier Gomez

Javier is a veteran manager with Pixel International, Inc. (PII). Recently PII purchased a small business
in the printing industry. Javier has been assigned the task of managing this new acquisition and is
currently deciding how best to design its structure. Currently, employees are assigned to one of three
departments, including sales, production, and legal defense.
Current departmentalization of Javier's new division can be characterized primarily as:
a.
b.
c.
d.
e.

vertical functional.
divisional.
horizontal matrix.
team-based.
none of these.

31

Scenario - Javier Gomez

Javier is a veteran manager with Pixel International, Inc. (PII). Recently PII purchased a small business
in the printing industry. Javier has been assigned the task of managing this new acquisition and is
currently deciding how best to design its structure. Currently, employees are assigned to one of three
departments, including sales, production, and legal defense.
If Javier organizes with a horizontal matrix structure, some potential advantages that he could anticipate
include all of the following, EXCEPT:
a.
b.
c.
d.
e.

a more efficient use of resources.

greater flexibility and adaptability to a changing environment.
development of both general and specialist management skills.
decreased need for coordination among managers.
all of these are potential advantages.

The deployment of organizational resources to achieve strategic goals is known as _____.

________________________________________
The framework in which the organization defines how tasks are divided, resources are deployed, and
departments are coordinated is called _____.
________________________________________
The visual representation of an organization's structure is called the _____.
________________________________________
Division of labor is also known as _____.
________________________________________
The degree to which organizational tasks are subdivided into individual jobs is called _____.
________________________________________
The _____ is an unbroken line of authority that links all persons in an organization and shows who
reports to whom.
________________________________________

32

When each employee is held accountable to only one supervisor, it is called _____.
________________________________________
The _____ refers to a clearly defined line of authority in the organization that includes all employees.
________________________________________
_____ is the formal and legitimate right of a manager to make decisions, issue orders, and allocate
resources to achieve organizationally desired outcomes.
________________________________________
The three characteristics of authority are that it must be _____, _____, and _____.
________________________________________
_____ is the duty to perform the task or activity an employee has been assigned.
________________________________________
_____ means that the people with authority and responsibility are subject to reporting and justifying task
outcomes to those above them in the chain of command.
________________________________________
_____ is the process managers use to transfer authority and responsibility to positions below them in the
hierarchy.
________________________________________
_____ departments perform tasks that reflect the organization's primary goal and mission, while _____
departments include all those that provide specialized skills in support of _____ departments.
________________________________________
_____ means that people in management positions have formal authority to direct and control immediate
subordinates.
________________________________________
The _____ is the number of employees reporting to a supervisor.
________________________________________
A(n) _____ structure has a wide span, is horizontally dispersed, and has fewer hierarchical levels.
________________________________________
A(n) _____ structure has an overall narrow span and more hierarchical levels.
________________________________________
33

With _____ decision authority is pushed downward to lower organization levels.

________________________________________
_____ means that decision authority is located near the top of the organization.
________________________________________
A(n) ______ structure is the grouping of positions into departments based on similar skills, expertise, and
resource use.
________________________________________
The _____ structure occurs when departments are grouped together based on organizational outputs.
________________________________________
The divisional structure is sometimes called a(n) _____, _____, or _____.
________________________________________
An alternative for assigning divisional responsibility is to group company activities by _____.
________________________________________
The _____ combines aspects of both functional and divisional structures simultaneously, in the same part
of the organization.
________________________________________
_____ teams consist of employees from various functional departments who are responsible to meet as a
team and resolve mutual problems.
________________________________________
In the _____ approach of structural design, departments are independent, contracting services to the
central hub for a profit.
________________________________________
The _____ structure means that the firm subcontracts many of its major functions to separate companies
and coordinates their activities from a small headquarters organization.
________________________________________
The _____ approach is when a manufacturing company uses outside suppliers to provide large
components of the product, which are then assembled into a final product by a few workers.
________________________________________
The quality of collaboration across departments is known as _____.
________________________________________
34

A(n) _____ is a temporary team designed to solve a short-term problem involving several departments.
________________________________________
A(n) _____ is a person who is responsible for coordinating the activities of several departments for the
completion of a specific project.
________________________________________
_____ is the radical redesign of business processes to achieve dramatic improvements in cost, quality,
service, and speed.
________________________________________
A(n) _____ structure is most appropriate when the external environment is stable.
________________________________________
_____ refers to services that are perishable and, unlike physical products, cannot be stored in inventory.
________________________________________
List the five approaches to departmentalization.

List three disadvantages of the divisional structure.

35

List the advantages of the virtual network structure.

List the three basic types of production technology.

Describe service technology.

Compare and contrast authority, responsibility, accountability, and delegation.

36

Briefly explain the concept of line and staff departments and authority.

Define span of management and explain if there is an ideal span of management.

List the factors that are associated with less supervisor involvement and thus larger spans of control.

Identify the three factors that typically influence centralization versus decentralization.

37

What is the horizontal matrix approach to departmentalization and what are its main advantages?

What is(are) the difference(s) between cross-functional and permanent teams?

What is the team approach to departmentalization and what are its main disadvantages?

Describe reengineering and what it involves.

38

Define task forces and project management.

39

Chapter 10--Designing Adaptive Organizations Key

1. TRUE
2. FALSE
3. TRUE
4. FALSE
5. TRUE
6. FALSE
7. TRUE
8. FALSE
9. FALSE
FALSE
TRUE
TRUE
TRUE
TRUE
FALSE
FALSE
TRUE
FALSE
TRUE
TRUE
TRUE
FALSE
FALSE
FALSE
FALSE
TRUE
TRUE
FALSE
FALSE
FALSE

40

TRUE
FALSE
TRUE
TRUE
FALSE
TRUE
TRUE
TRUE
FALSE
TRUE
FALSE
TRUE
TRUE
FALSE
TRUE
FALSE
TRUE
FALSE
FALSE
C
C
E
B
D
E
C
A
B
A
D
C
B
C

41

A
C
A
D
B
C
C
A
B
D
B
D
B
C
B
C
D
C
A
C
B
A
D
B
B
C
C
A
A
C
C
C
A

42

D
D
E
B
E
E
A
B
D
C
C
A
C
B
A
B
A
B
B
C
E
A
E
D
B
D
D
B
A
C
D
C
C

43

D
A
C
A
B
C
D
B
C
D
A
E
A
C
D
C
C
B
D
D
B
A
E
C
e
d
a
d
organizing
organization structure
organization chart
work specialization
work specialization

44

chain of command
unity of command
scalar principle
Authority
vested in organizational positions not people; accepted by subordinates; flowing down the vertical hierarchy.
Responsibility
Accountability
Delegation
Line; staff; line
Line authority
span of management
flat
tall
decentralization
Centralization
functional
divisional
product structure; program structure; self-contained unit structure
geographic region
matrix approach
Cross-functional
virtual network
virtual network
modular
coordination
task force
project manager
Reengineering
vertical
Intangible output
Vertical functional, divisional, horizontal matrix, teams, and virtual network.
Choose three of the following -- duplication of resources across divisions, less technical depth and specialization in divisions, poor coordination
across divisions, less top management control, and competition for corporate resources.

45

Global competitiveness, workforce flexibility/challenge, and reduced administrative overhead.

The three basic types of production technology include small-batch and unit production, large-batch and mass production, and continuous process
production.
Service technology can be defined as having intangible input and direct contact with customers.
Authority is defined as the formal and legitimate rights of a manager to make decisions, issue orders, and allocate resources. Responsibility is the
duty to perform the task that has been assigned. Many argue that authority and responsibility go hand-in-hand, i.e., in order for someone to fulfill
their responsibility, they must have an equivalent level of authority. Accountability means that those with authority and responsibility are subject to
reporting and justifying task outcomes to those higher in the chain of command. Accountability brings authority and responsibility together. The
principle of delegation allows managers to transfer authority and responsibility to those lower in the organizational hierarchy. Delegation should
increase an organization's flexibility by allowing people "on the spot" to make decisions.
Line departments perform tasks that reflect the organization's primary task and mission. Staff departments include all those departments that provide
specialized skills in support of line departments. In a typical production firm, line departments make and sell the product, while staff departments
might include accounting and human resource management. Line authority means that people in management positions have the formal power to
direct immediate subordinates. Staff authority is the right to advise, recommend, and counsel in the staff specialist's area of expertise.
The span of management, or span of control, is the number of employees who report directly to one supervisor. There is not an ideal span of
management. The number depends upon several characteristics of the situation including the nature of the work done by the subordinates, the
locations where the work is done, the training and education of the workers, the level of definition of the task, the time available to the manager, and
the manager's personal preferences and style.
(1) Work performed by subordinates is stable and routine. (2) Subordinates perform similar work tasks. (3) Subordinates are concentrated in a single
location. (4) Subordinates are highly trained and need little direction in performing tasks. (5) Rules and procedures defining task activities are
available. (6) Support systems and personnel are available for the manager. (7) Little time is required in nonsupervisory activities such as
coordination with other departments or planning. (8) Managers' personal preferences and styles favor a large span.
(1) Greater change and uncertainty in the environment are usually associated with decentralization. (2) The amount of centralization or
decentralization should fit in the firm's strategy. (3) In times of crisis of company failure, authority may be centralized at the top.
A horizontal matrix structure utilizes functional and divisional chains of command simultaneously in the same part of the organization. This
structure has dual lines of authority and purposely violates the principle of unity of command. Major advantages include: (1) more efficient use of
human resources because specialists can be transferred from one division to another; (2) increased adaptability; (3) increased management skills; (4)
greater interdisciplinary cooperation; and (5) enlarged tasks for employees.
Cross-functional teams consist of employees from various functional departments who are responsible to meet as team and resolve mutual problems.
Team members typically still report to their functional departments, but they also report to the team, one member of whom may be the leader.
Permanent teams are groups of employees who are brought together similar to a formal department. Each team brings together employees from all
functional areas focused on a specific task or project. Emphasis is on horizontal communication and information sharing because representatives
from all functions are coordinating their work and skills to complete a specific organizational task.
There are at least two different types of teams. Cross-functional teams consist of employees from various functional departments who are
responsible to meet as team and resolve mutual problems. While team members still report to their functional manager, they will also report to the
team, perhaps to a team leader. Permanent teams consist of groups of employees who are brought together as a formal department. Similar to a
divisional structure, although much smaller in the number of employees involved, permanent teams are often the result of reengineering.
Disadvantages of the team structure include dual loyalties and conflict, the time and resources spent on meetings, and unintended/ineffective
decentralization, which may occur because team members do not have the conceptual skills to be effective.
Reengineering, sometimes called business process reengineering, is the radical redesign of business processes to achieve dramatic improvements in
cost, quality, service, and speed. Reengineering involves a shift to a horizontal structure based on teams. Basically, it means starting over, throwing
out all the notions of how work was done and deciding on how it can best be done now.
A task force is a temporary team or committee designed to solve a short-term problem involving several department A project manager is a person
who is responsible for coordinating the activities of several departments for the completion of a specific project.

46