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The design of a bureaucratic organization assumes a well educated workforce.

Answer: False LG: 1/LL: 1 Page: 243

To better organize his business, Frank divides the required tasks into smaller jobs and assigns each job to a specific employee. This is an example of departmentalization.

Answer: False LG: 1/LL: 2 Page: 240

Rationale: Dividing tasks into smaller jobs is called job specialization. Departmentalization refers to the process of setting up individual departments to do specialized tasks.

The division of labor and specialization often improves an employee's job performance.

Answer: True LG: 1/LL: 1 Page: 240

Economies of scale occur when a firm operates more efficiently as it grows larger.

Answer: True LG: 1/LL: 2 Page: 241

Rationale: Economies of scale is the concept that the bigger the firm, the more efficient production becomes. This improved efficiency is the result of the specialization of labor and purchasing raw materials in bulk.

8-1. The driving force behind the change in business organizations is the change in consumer expectations.

Answer: True LG: 1/LL: 1 Page: 240

8-2. The degree to which an organization allows lower level managers to make decisions determines the degree of decentralization.

Answer: True LG: 2/LL: 1 Page: 245

8-3. An organizational hierarchy establishes one person at the top of an organization.

Answer: True LG: 1/LL: 1 Page: 243

8-4. The greater the rate of employee turnover, the broader the span of control.

Answer: False LG: 2/LL: 1 Page: 246

8-5. The flatter an organization's structure, the fewer managers are needed.

Answer: True LG: 2/LL: 1 Page: 248

8-6. In a line organization, there are many specialists who serve as advisors and assistants to the managers who make decisions.

Answer: False LG: 3/LL: 1 Page: 251

8-7. While staff personnel have the authority to make policy decisions, line personnel have the authority to advise and make suggestions.

Answer: False LG: 3/LL: 1 Page: 251

8-8. Cross-functional teams are self-managed groups of employees empowered to work with suppliers and customers to develop new products and give great service.

Answer: True LG: 3/LL: 1 Page: 254

8-9. The design of a bureaucratic organization assumes a well educated workforce.

Answer: False LG: 1/LL: 1 Page: 243

8-10. An organization's core competencies are those functions that the firm can perform as well or better than anyone else in the world.

Answer: True LG: 4/LL: 1 Page: 257

8-11. Reengineering is intended to improve the performance of an organization through regular, incremental steps.

Answer: False LG: 5/LL: 1 Page: 258

8-12. Reengineering is the fundamental rethinking and radical redesign of organizational processes in order to achieve dramatic improvements in performance.

Answer: True LG: 5/LL: 1 Page: 258

...

8-13. A firm's formal organization would be better suited than its informal organization to:
A) create an atmosphere of friendship and camaraderie among workers.
B) find answers to critical problems that require logical analysis.
C) find creative solutions to short-term problems.
D) find a way around bureaucratic rules and regulations in order to get things done quickly.

Answer: B LG: 5/LL: 2 Page: 260

8-14. In an inverted organization, the job of management is to:
A) closely monitor employee performance.
B) establish rules and regulations to guide worker behavior.
C) make all of the basic decisions.
D) assist and support front-line people.

Answer: D LG: 5/LL: 2 Page: 258

Rationale: In an inverted organization, the most important people are the front-line personnel who are in direct contact with the customers. These employees are given the flexibility and decision making authority to meet the needs of these customers. The job of management is to assist and support these contact people, not boss them around.

8-15. Excite Enterprises uses an accounting firm to handle the payroll and tax functions for the firm. Using the services of another firm in this manner is an example of:
A) outsourcing.
B) functional reassignment.
C) core competencies.
D) benchmarking.

Answer: A LG: 4/LL: 2 Page: 257

8-16. As a new employee in a bureaucratic organization, Nancy can expect a great deal of independence and authority.

Answer: False LG: 1/LL: 2 Page: 243

Rationale: In a bureaucratic organization, everyone is expected to follow specific rules. One of the problems with this type of organization is that employees have little flexibility to respond to customer wants and needs.

8-17. Centralized authority provides for the delegation of authority to employees who are then better able to respond to customers' needs.

Answer: False LG: 2/LL: 1 Page: 245

8-18. Departmentalization creates an environment in which people are trained in a variety of managerial responsibilities.

Answer: False LG: 2/LL: 1 Page: 248

8-19. Rome Corporation is organized into departments such as finance, production, marketing, data processing, and accounting. Rome has chosen to departmentalize by function.

Answer: True LG: 2/LL: 2 Page: 248

Rationale: Departmentalization by function means to group workers into departments based on similar skills, expertise, and resources.

8-20. Line managers issue orders, enforce discipline, and adjust the organization as conditions change.

Answer: True LG: 3/LL: 1 Page: 251

8-21. In large businesses, a line organization provides firms the ability to respond quickly to a changing environment.

Answer: False LG: 3/LL: 1 Page: 251

8-22. Line organizations clearly define the lines of authority and responsibility.

Answer: True LG: 3/LL: 1 Page: 251

8-23. Matrix organizations bring together specialists from different parts of the firm to work on specific projects.

Answer: True LG: 3/LL: 1 Page: 252

8-24. The team specialists in a matrix organization remain part of the traditional line and staff structure.

Answer: True LG: 3/LL: 1 Page: 252

8-25. A matrix organization produces an environment that discourages cooperation and teamwork.

Answer: False LG: 3/LL: 1 Page: 252

8-26. Cross-functional teams are self-managed groups of employees empowered to work with suppliers and customers to develop new products and give great service.

Answer: True LG: 3/LL: 1 Page: 254

8-27. Cross-functional teams serve as advisory committees offering their expertise to line decision makers.

Answer: False LG: 3/LL: 1 Page: 254

8-28. Networking uses communication technology to link organizations allowing them to work together on common objectives.

Answer: True LG: 4/LL: 1 Page: 255

8-29. The Internet makes real time availability of data possible.

Answer: True LG: 4/LL: 1 Page: 255

8-30. Transparency describes the relationship between a firm and its stockholders.

Answer: False LG: 4/LL: 1 Page: 255

8-31. Transparency allows two companies to work more efficiently together.

Answer: True LG: 4/LL: 1 Page: 255

8-32. Benchmarking requires organizations to compare each function against the best in the world.

Answer: True LG: 4/LL: 1 Page: 256

8-33. Competitive benchmarking rates an organization's products and operations against the industry average.

Answer: False LG: 4/LL: 1 Page: 256

8-34. Competitive benchmarking compares a company's practices, processes, and products against the world's best.

Answer: True LG: 4/LL: 1 Page: 256

8-35. Restructuring involves relatively minor changes to an organization to better meet the needs of management.

Answer: False LG: 5/LL: 1 Page: 257

8-36. Inverted organizations empower employees by adding multiple layers of management and long lines of communication.

Answer: False LG: 5/LL: 1 Page: 258

8-37. In an inverted organization, the purpose of management is to assist and support first-line employees, not boss them around.

Answer: True LG: 5/LL: 1 Page: 258

8-38. A firm's informal organization refers to the structure that identifies the authority, responsibility, and position of people within the organization.

Answer: False LG: 5/LL: 1 Page: 260

8-39. The informal organization of a business can help generate creative solutions to short-term problems.

Answer: True LG: 5/LL: 1 Page: 260

8-40. The formal organization of a firm provides the lines of authority to follow in routine situations.

Answer: True LG: 5/LL: 1 Page: 260

8-41. Organizing a business begins with:
A) acquiring the necessary resources.
B) choosing the best qualified employees.
C) developing an efficient plan of action.
D) determining the work to be done.

Answer: D LG: 1/LL: 1 Page: 240

8-42. Dividing the required work among a group of employees is called a:
A) departmentalization.
B) delegation of responsibility.
C) division of labor.
D) separation of control.

Answer: C LG: 1/LL: 1 Page: 240

8-43. Dividing tasks into smaller jobs is called:
A) job enrichment.
B) job specialization.
C) departmentalization.
D) division of authority.

Answer: B LG: 1/LL: 1 Page: 240

8-44. The process of setting up individual departments to do specialized tasks is called:
A) departmentalization.
B) a division of labor.
C) job specialization.
D) delegation of authority.

Answer: A LG: 1/LL: 1 Page: 240

8-45. In a bureaucratic organization:
A) departments communicate with each other on a regular basis.
B) employees follow strict rules and regulations.
C) customer satisfaction is the number one priority.
D) the first-line workers are empowered to respond to the needs of customers.

Answer: B LG: 1/LL: 1 Page: 243

8-46. One advantage of a bureaucratic organization is that:
A) it is very responsive to the wants and needs of customers.
B) there are very few layers of management.
C) it encourages cooperation among different departments within the organization.
D) employees know what is expected of them.

Answer: D LG: 1/LL: 1 Page: 243

economies of scale

the situation in which companies can reduce their production costs if they can purchase raw materials in bulk; the average cost of goods goes down as production levels increase

hierarchy

a system in which one person is at the topf of the organization and there is a ranked or sequential ordering from the top down of managers who are responsile to that person

chain of command

the line of authority that moves from the top of a hierarchy to the lowest level

bureaucracy

an organization with many layers of managers who set rules and regulations and oversee all decisions

centralized authority

an organization structure in which decision making authority is maintained at the top level of management

decentralized authority

an organization structure in which decision making authority is delegated to lower level managers more familiar with local conditions than headquarters management could be

span of control

the optimal number of subordinates a manager surpervises or should supervise

tall organization structure

an organizational structure in which the pyramidal organization chart would be quite tall because of the various levels of management

flat organization structure

an organization structure that has new layers of management and a broad span of control

departmentalization

the dividing of organizational functions into separate units

line organization

an organization that has direct two way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with all people reporting to only one supervisor

line personnel

employees who are part of the chain of command that is responsible for achieving organizational goals

staff personnel

employees who advise and assist line personnel in meeting their goals

matrix organizations

an organization in which specialists from different parts of the organization are brought together to work on specific projects but still remain part of a line and staff structure

cross functional self manage teams

groups of employees from different departments who work together on a long term basis

networking

using communications technology and other means to link organizations and allow them to work together on common objectives

real time

the present moment or the actual time in which something takes place

virtual corporation

a temporary networked organization made up of replaceable firms that join and leave as needed

benchmarking

comparing an organizations practices, processes, and products against the worlds best

core competencies

those functions that the organization can do as well as or better than any other organization in the world

digital natives

young people who have grown up using the internet and social networking

restructuring

redesigning an organization so that it can more effectively and efficiently serve it customers

inverted organization

an organization that has contact people at the top and the ceo at the bottom of the organization chart

organization (or corporate) culture

widely shared values within an organization that provide unity and cooperation to achieve common goals

formal organization

the structure that details lines of responsibility, and position; that is, the structure shown on org charts

informal organization

the system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority outside the formal org

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