Discuss Max Webers views on organization theory What is a matrix organization? What advantages and disadvantages are associated with this type of organization? Nhập môn Kinh Tế What is a crossfunctional, selfmanaged team? Who would serve on such teams? Why do crossfunctional, selfmanaged teams often lead to networking? Describe two major issues that are important in organizational design Explain the difference between a firms formal organization and its informal organization. Why are both types of organization important to managers?
Chapter 08 - Structuring Organizations for Today's Challenges TEST PLANNING TABLE FOR CHAPTER Learning Objective Outline the basic principles of organization management Compare the organizational theories of Fayol and Weber Evaluate the choices managers make in structuring organizations Contrast the various organizational models Identify the benefits of interfirm cooperation and coordination Explain how organizational culture can help businesses adapt to change LL:1 Knows Basic Terms and Facts LL:2 Understands Concepts and Principles LL:3 Applies Principles 1,2,3,4,5,6,7,8,9,10,11, 222,223,224,225,226 12,13,14~, 227,228,229~ 15,16,17,18, 230,231 19,20,21,22,23,24,25,26, 27,28,29,30,31,32,33,34, 35,36,37,38,39,40,41,42, 43,44,45,46,47,48,49,50, 51,52,53,54, 232,233,234,235,236,237, 238,239,240,241,242,243, 244,245 71,72,73,74,75,76,77,78, 79,80,81,82,83,84,85,85, 86,87,88,89,90,91,92,93, 94,95,96,97,98,99,100,101, 102,103, 266,267,268,269,270,271, 272,273,274,275,276,277, 278,279 55,56,57,58,59,60, 246,247,248,249,250, 251,252,253,254 61,62,63,64,65,66,67, 68,69,70, 255,256,257,258,259, 260.261,262,263,264, 265, 360, 365* 104,105,106,107,108, 109,110,111, 280,281,282,283 112,113,114,115,116, 117,118,119,120,121, 284,285,286,287,288, 289,290,291,292,293, 294, 363, 367* 122,123,124,125,126,127, 128,129,130,131,132,133, 134,135,136,137,138,139, 140,141,142,143,144,145, 146,147,148,149,150, 295,296,297,298,299,300, 301,302,303,304,305 164,165,166,167,168,169, 170,171,172,173,174,175, 176,177,178,179,180,181, 182,183,184,185,186,187, 188, 318,319,320,321,322,323, 324,325,326,327,328,329, 330,331 203,204,205,206,207,208, 209,210,211,212,213,214, 215, 346,347,348,349,350,351 151,152,153,154,155, 156, 306,307,308,309,310 157,158,159,160,161, 162,163, 311,312,313,314,315, 316,317, 361,362, 368* 189,190,191,192,193~, 194~,195~, 332,333,334,335,336, 337,338~ 196,197,198,199,200, 201,202, 339,340,341,342,343, 344,345, 366* 216,217, 352,353 218,219,220,221, 354,355,356,357,358, 359, 364, 369* Total number of test items: 369 True/false questions are in plain text Multiple choice questions are in bold text Questions on boxed material are in bold text with a tilde~ Essay questions are in bold underlined text Minicase questions are in bold with an asterisk* 8-1 Chapter 08 - Structuring Organizations for Today's Challenges Chapter 08 Structuring Organizations to Today's Markets Answer Key True / False Questions Organizing the structure of the company means deciding how many jobs need to be done and who is responsible for doing them Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-01 Outline the basic principles of organization management Level of Difficulty: Easy Topic: Organizational Structure In a capitalist economy, organizations seldom reorganize due to changing markets Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-01 Outline the basic principles of organization management Level of Difficulty: Easy Topic: Organizational Structure One key to organizational success is to go back to basic principles and build the business on a sound foundation Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-01 Outline the basic principles of organization management Level of Difficulty: Easy Topic: Organizational Structure Small business organizations lack the size required to reap the benefits of labor specialization Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-01 Outline the basic principles of organization management Level of Difficulty: Easy Topic: Organizational Structure 8-2 Chapter 08 - Structuring Organizations for Today's Challenges The purpose of a division of labor and specialization is to improve an employee's job performance Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-01 Outline the basic principles of organization management Level of Difficulty: Easy Topic: Organizational Structure Managing a growing business often requires managers to create departments to accomplish various tasks Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-01 Outline the basic principles of organization management Level of Difficulty: Easy Topic: Building an Organization from the Bottom Up The process of creating individual departments to specialized tasks is called departmentalization Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-01 Outline the basic principles of organization management Level of Difficulty: Easy Topic: Organizational Structure Division of labor refers to deciding how many jobs must be accomplished and then dividing them up amongst the labor force Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-01 Outline the basic principles of organization management Level of Difficulty: Easy Topic: Organizational Structure The success of the firm often depends on assigning the right tasks to the right person Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-01 Outline the basic principles of organization management Level of Difficulty: Easy Topic: Organizational Structure 8-3 Chapter 08 - Structuring Organizations for Today's Challenges 10 The process of setting up individual departments to specialized tasks is called job specialization Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-01 Outline the basic principles of organization management Level of Difficulty: Easy Topic: Organizational Structure 11 Correctly structuring a business organization allows managers to avoid delegating responsibility and authority to employees Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-01 Outline the basic principles of organization management Level of Difficulty: Easy Topic: Organizational Structure 12 Division of labor is difficult to achieve in small businesses Feedback: Division of labor is a basic organizational principle in all organizations All businesses (both large and small) should contemplate the division of labor in their organizations Answer: False AACSB: Reflective Thinking Bloom’s: Understand Learning Objective: 08-01 Outline the basic principles of organization management Level of Difficulty: Medium Topic: Organizational Structure 13 Departments are functional units within the business such as sales, accounting, finance, and marketing Feedback: The basic principles of organization not differ significantly from firm to firm As firms grow, they usually develop a system with division of labor and specialization and then proceed to departmentalize, to create departments that produce specialized tasks for the business Answer: True AACSB: Reflective Thinking Bloom’s: Understand Learning Objective: 08-01 Outline the basic principles of organization management Level of Difficulty: Medium Topic: Organizational Structure 8-4 Chapter 08 - Structuring Organizations for Today's Challenges 14 As indicated in the Making Ethical Decisions box, "Would You Sacrifice Safety for Profit?" organizational decisions that affect profits in a negative way should be avoided at all cost Feedback: As indicated in the box, how your organization performs the job is very important Setting the tone of and maintaining an organization’s culture is as important as setting up an organization’s structure Adhering to safety precautions when doing the job demonstrates management's commitment to their employees Answer: False AACSB: Ethics Bloom’s: Understand Learning Objective: 08-01 Outline the basic principles of organization management Level of Difficulty: Medium Topic: Organizational Structure 15 In its effort to reorganize its floor space, Backstreet Books decided to eliminate seating space in its stores in order to make room for bookshelves to accommodate the growing interest in books about how to go green This company's effort is an example of how a firm may reduce its emphasis in one product line in order to serve customer preferences and trends Feedback: If a firm wants to remain competitive, it may reevaluate which product lines are more profitable than others and organize its floor space and marketing emphasis to capture consumer attention The text uses the example of Starbucks changing and re-changing their menus Answer: True AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 08-01 Outline the basic principles of organization management Level of Difficulty: Hard Topic: Organizational Structure 16 To better organize his landscaping business, Frank divides each job into several parts One part is excavation and removal of old landscaping, the next part is design, followed by purchasing, and the last part is installation of new plants If he assigns a different employee to each part, this action would be an example of departmentalization Feedback: Departmentalization is the creation of functional units of a business The jobs described in this question would all fall under the production department Other departments in Frank's business may include marketing, sales, and accounting By asking different employees to perform different tasks relating to a particular job, Frank is creating division of labor within his company, and/or specialization Answer: False AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 08-01 Outline the basic principles of organization management Level of Difficulty: Hard 8-5 Chapter 08 - Structuring Organizations for Today's Challenges Topic: Organizational Structure 17 Alicia dreams of opening her own restaurant and knows that she will need to organize her business Organizing begins with determining the work to be done Feedback: Organizing, also known as adding structure to the business, begins with determining what work needs to be done and then dividing up tasks among the employees Answer: True AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 08-01 Outline the basic principles of organization management Level of Difficulty: Hard Topic: Organizational Structure 18 When Eric Schmidt joined Google he tackled the organization function head-on In speaking at a large conference with its founders, Sergey Brin and Larry Page, he commented that Google was running pretty well but "it just needed a little structure." Schmidt was referring to basic organization principles such as division of labor, specialization, and getting the departments running smoothly Feedback: Basic organization principles include division of labor, specialization of tasks, and departmentalization Answer: True AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 08-01 Outline the basic principles of organization management Level of Difficulty: Hard Topic: Organizational Structure 19 The driving force behind the change in business organizations is the change in consumer expectations Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 20 Henri Fayol and Max Weber are best known for their contributions to accounting theory Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 8-6 Chapter 08 - Structuring Organizations for Today's Challenges 21 Fayol's principle of the division of labor says that functions should be divided into areas of specialization such as production, marketing, and finance Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 22 One of Fayol's principles suggests that managers should have the right to give orders and expect others to follow Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 23 Fayol's principle of esprit de corps says that employees should be divided into small groups that can be directed efficiently by a single manager Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 24 Fayol's principles suggest that the goals of the firm are less important than the goals of individual workers Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 25 According to Fayol's principle of authority, if you have authority you also have responsibility Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 8-7 Chapter 08 - Structuring Organizations for Today's Challenges 26 Fayol believed that the amount of decision-making power vested in top management should be the same in all situations Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 27 Fayol believed that managers should treat employees and peers with respect and justice Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 28 Clear communication among workers and keeping order in materials and people are included in Fayol's principles Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 29 Max Weber's principles of organization were similar to those of Henri Fayol Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 30 Weber believed that large organizations required everyone to follow the established rules and guidelines precisely Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 31 Weber was critical of bureaucrats because he felt they undermined the efficiency of the organization Answer: False 8-8 Chapter 08 - Structuring Organizations for Today's Challenges AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 32 Weber had a great deal of faith in managers He was confident that a firm would well if employees simply did as they were told Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 33 Weber promoted the idea of the pyramid-shaped organization structure for large businesses Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 34 Max Weber's organizational theories require an educated workforce to operate efficiently Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 35 Weber was a strong proponent of bureaucracy Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 36 Some business organizations still follow the 1940s organizational theory of Max Weber Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 8-9 Chapter 08 - Structuring Organizations for Today's Challenges 37 Weber believed that employees should be empowered to make their own decisions Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 38 Job descriptions are an important part of Max Weber's organizational theory Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 39 Max Weber believed that promotion should be based solely on seniority Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 40 The design of a bureaucratic organization assumes a well-educated workforce Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 41 An organizational hierarchy establishes one person at the top of an organization Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy Topic: Organizational Structure 42 A chain of command is a line of authority that moves from the lowest level of the hierarchy to the top Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Easy 8-10 Chapter 08 - Structuring Organizations for Today's Challenges 345 Heather works as a sales representative for the Westerly Company She really enjoys working for Westerly, because the company treats her and other sales representatives as highly valued employees Sales reps at Westerly are given freedom and flexibility in their relationships with customers While there are only a few layers of management at Westerly, Heather has found that these managers try their best to support and assist her efforts Based on Heather's experience, it appears that Westerly is a(n): A bureaucratic organization B inverted organization C tall organization D casual organization Feedback: An inverted organization is one with few layers of management, and in which the most important employees are front-line employees who deal directly with customers In this type of organization, the job of managers is to assist and support front-line employees, not boss them around Answer: B AACSB: Reflective Thinking Bloom’s: Apply Learning Objective: 08-05 Identify the benefits of interfirm cooperation and coordination Level of Difficulty: Hard Topic: Delegation and Authority 346 The widely shared values within an organization that provide unity and cooperation to achieve common goals are together known as the: A normative matrix B predefined group values C ethical system D organizational culture Answer: D AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-06 Explain how organizational culture can help businesses adapt to change Level of Difficulty: Easy Topic: Culture in Organizations 8-115 Chapter 08 - Structuring Organizations for Today's Challenges 347 The of a business firm is the system that details lines of authority, responsibility, and position, similar to the structure on organization charts A matrix reloaded structure B formal organization C informal organization D normative design Answer: B AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-06 Explain how organizational culture can help businesses adapt to change Level of Difficulty: Easy Topic: Culture in Organizations 348 All organizations have two organizational systems: A the command system and the control system B the formal organization and the informal organization C the functioning system and backup system D the primary organization and secondary organization Answer: B AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-06 Explain how organizational culture can help businesses adapt to change Level of Difficulty: Easy Topic: Culture in Organizations 349 The is the system of relationships that develop spontaneously as employees meet and form power centers A informal organization B bureaucratic structure C secondary organization D formal organization Answer: A 8-116 Chapter 08 - Structuring Organizations for Today's Challenges AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-06 Explain how organizational culture can help businesses adapt to change Level of Difficulty: Easy Topic: Culture in Organizations 350 In open organizations the informal organization can be: A a hindrance to effective management B an asset that promotes harmony among workers C a roadblock to the corporate culture D part of the formal organization Answer: B AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-06 Explain how organizational culture can help businesses adapt to change Level of Difficulty: Easy Topic: Culture in Organizations 351 The _ is the nerve center of the informal organization A organizational database B intranet C grapevine D company newsletter Answer: C AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 08-06 Explain how organizational culture can help businesses adapt to change Level of Difficulty: Easy Topic: Culture in Organizations 8-117 Chapter 08 - Structuring Organizations for Today's Challenges 352 The informal organization of a business is probably best suited to: A give workers a clear idea of where they stand in the organization B provide helpful guidelines about how to handle routine problems C provide a mechanism that generates careful reasoned decisions about critical issues D create a feeling of camaraderie among employees and encourage teamwork Feedback: The friendships and relationships that develop in a business firm's informal organization can generate a feeling of camaraderie and can encourage people within the firm to work together Answer: D AACSB: Reflective Thinking Bloom’s: Understand Learning Objective: 08-06 Explain how organizational culture can help businesses adapt to change Level of Difficulty: Medium Topic: Culture in Organizations 353 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 Feedback: Informal organizations are good at creating camaraderie, finding creative solutions to short-term problems, and finding ways around the rules and regulations that slow down the implementation of decisions However, informal organizations are too unstructured and emotional to allow for careful, reasoned decisions dealing with critical issues A firm's formal organization is better suited for this type of decision making Answer: B AACSB: Reflective Thinking Bloom’s: Understand Learning Objective: 08-06 Explain how organizational culture can help businesses adapt to change Level of Difficulty: Medium Topic: Culture in Organizations 8-118 Chapter 08 - Structuring Organizations for Today's Challenges 354 Zach recently got his Ph.D in analytical chemistry and was fortunate to be asked to join a lab at a prestigious eastern university After a month on the job, he remarked to another graduate student at his former university that the spirit of help and cooperation at the lab was remarkable He enjoyed going to work each day and sometimes exchanged calls with other lab partners in the evening with ideas to improve each other's experiments Zach remarked, "Now I know why this lab is considered one of the best in the nation!" Zach is referring to: A the formal organization B the inverted organization C the balanced organization D the organizational culture Feedback: Organizational culture is the widely shared values within an organization that foster unity and cooperation to achieve common goals Answer: D AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 08-06 Explain how organizational culture can help businesses adapt to change Level of Difficulty: Hard Topic: Culture in Organizations 355 Realizing that it was time to invest in an updated information system, a young CEO made the following announcement in his weekly broadcast: “We are going to shake things up around here We need to break apart our information system, and start over.” Unfortunately, the message translated poorly in the minds of employees A total shake-up such as this could impact employee morale Progressive companies today incorporate strategies that continuously embrace: A formal, symbolic walls that prevent one person from driving change to the detriment of others B a stay the course environment It is always best to play your game than try to embark on someone else’s game C a change-oriented culture D a formal and information organization that assists with change Feedback: Organizational change can cause stress and resistance within certain employee groups Firms are better off when their culture is already change-oriented Answer: C AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 08-06 Explain how organizational culture can help businesses adapt to change Level of Difficulty: Hard Topic: Culture in Organizations 8-119 Chapter 08 - Structuring Organizations for Today's Challenges 356 Gary was a politically savvy employee who had worked for his company for several years After many promotions, he emerged as the new president of the company Grace, a colleague of Gary’s who had reported to him when he was a first-line supervisor, understood how the human side of the organization worked and made certain that she maintained a direct line of communication with Gary at all times On the company’s organization chart, Grace maintained a lower-level position; however, due to her open line of communication with President Gary, she seemed to successfully push her agenda The human side of the organization is synonymous with the _ A inverted organization B formal organization C informal organization D benchmark Feedback: The human side of the organization is similar to the informal organization This is the system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority outside of the formal organization Answer: C AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 08-06 Explain how organizational culture can help businesses adapt to change Level of Difficulty: Hard Topic: Culture in Organizations 357 Ashley experienced frustration with her new job at Walnut Securities, until she befriended a secretary from another department Over lunch in the cafeteria, her new friend shared with Ashley the way things really work at Walnut Securities Ashley quickly learned that: A what she learned in her business classes didn't really help her in the real world B an unofficial informal organization exists that she can utilize to help her her job C organizational culture can be negative D not all businesses have a formal organization Feedback: All organizations have two organizational systems One is the formal organization that details each person's responsibility, authority, and position The informal organization is the human relationship side of the organization The informal organization will identify for Ashley the unofficial power brokers These are the influential individuals who can help her get things done Answer: B AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 08-06 Explain how organizational culture can help businesses adapt to change Level of Difficulty: Hard Topic: Culture in Organizations 8-120 Chapter 08 - Structuring Organizations for Today's Challenges 358 Carlos is the person to see in the welding department if you are a new employee While he is not a manager, he is the person that most of the others in the department look to for advice and assistance Carlos is an important member of the firm's: A supervisory management B participatory control C informal organization D closet cabinet Feedback: Although Carlos may have little authority in the formal organization, the respect others in the department have for him makes him an important part of the informal organization The informal organization is the system of relationships that evolve spontaneously as employees meet and form power centers Answer: C AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 08-06 Explain how organizational culture can help businesses adapt to change Level of Difficulty: Hard Topic: Culture in Organizations 359 One of Javier's coworkers was recently promoted to a middle management position at their company He seems to have quickly distanced himself from Javier and their other coworker, Carlos In fact, yesterday Carlos described the situation by saying, "He's gone to the dark side." Javier understands what Carlos means because management keeps themselves removed from other employees, and seldom seriously solicits ideas for improvements or change from those in the trenches The disadvantage in continuing this type of organizational culture is: A nobody takes management seriously B the company will have to look outside the firm for new managers C small, incremental improvements rather than radical change will become the norm D the informal organization can hinder effective management Feedback: The informal organization can be powerful in resisting management directives Employees may form unions, go on strike, and may generally disrupt operations Answer: D AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 08-06 Explain how organizational culture can help businesses adapt to change Level of Difficulty: Hard Topic: Culture in Organizations 8-121 Chapter 08 - Structuring Organizations for Today's Challenges Essay Questions 360 Discuss Max Weber's views on organization theory Answer: a Max Weber's bureaucratic structure is pyramid-shaped, a structure that became very popular with large firms b Weber had great faith in managers, and believed that the organization would well if workers simply followed orders This view was reasonable at the time of Weber's writing, since many of the workers were unskilled and uneducated Such a view is less plausible today c Many of Weber's contributions to organization theory were similar to those of Henri Fayol, but in addition, he emphasized the need for job descriptions, written rules and guidelines, consistent procedures and policies, and staffing based on qualifications AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Hard Topic: Organizational Structure 361 What is a matrix organization? What advantages and disadvantages are associated with this type of organization? Answer: a A matrix organization is an organization in which specialists from different parts of the organization are brought together to work on specific projects but still remain part of the lineand-staff structure b The advantages of a matrix organization are: (1) it gives managers flexibility in assigning people to projects; (2) it encourages interorganizational cooperation and teamwork; (3) it can result in creative solutions to problems such as those associated with product development; and (4) it provides for more efficient use of organizational resources c The disadvantages of a matrix organization are: (1) it is complex and costly to set up; (2) it can cause confusion among employees as to where their loyalty belongs; (3) it requires a high level of interpersonal skills and cooperative employees and managers; and (4) it is a temporary solution to a long-term problem AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 08-04 Contrast the various organizational models Level of Difficulty: Hard Topic: Organizational Structure 8-122 Chapter 08 - Structuring Organizations for Today's Challenges 362 What is a cross-functional, self-managed team? Who would serve on such teams? Why cross-functional, self-managed teams often lead to networking? Answer: a A cross-functional team is a group of employees from different departments (and possibly people from outside the organization) who work together on a long-term basis (as opposed to the temporary nature of teams employed in a matrix organization) These teams are often empowered to make decisions on their own, without seeking approval of management, which is why they are called self-managed teams b Cross-functional teams may consist of employees from different departments For such a team to work best, however, customers, suppliers, and distributors should also be represented c Because cross-functional teams may include people from other organizations and even from other countries, they serve to link those organizations into a network in which the organizations can communicate and interact in a way that enables them to work together on common objectives These teams may share market information across national boundaries The government may encourage the networking of teams, and government coordinators may assist such projects AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 08-04 Contrast the various organizational models Level of Difficulty: Hard Topic: Organizational Structure 8-123 Chapter 08 - Structuring Organizations for Today's Challenges 363 Describe two major issues that are important in organizational design Answer: There are four issues from which the student can choose: (1) Tall versus flat organizations, (2) span of control, (3) departmentalization, and (4) centralization versus decentralization a A tall organization is one with many levels of management and a smaller span of control The many levels result in a "tall" pyramidal organizational chart A flat organization, on the other hand, has fewer levels of management and a broad span of control Many organizations are moving to a flatter organizational structure by eliminating levels of middle management b Span of control refers to the optimum number of people a manager can supervise There are many factors to consider when determining span of control At lower levels, where work is standardized, it's possible to implement a broad span of control The number gradually narrows at higher levels of the organization because work is less standardized and there's more need for faceto-face communication It's possible to increase the span of control as employees become more professional, as information technology makes it possible for managers to handle more information, and as employees take on more responsibility for self-management c Departmentalization is the dividing of organizational functions into separate units This can be done in a number of ways The traditional way to departmentalize organizations is by function Functional structure is the grouping of workers into departments based on similar skills, expertise, or resource use Thus, a functional organization divides the organization into departments such as accounting, finance, personnel, production, and marketing Such an approach has several advantages: (1) employees can develop skills in depth and can progress within a department as they master those skills; (2) the company can achieve economies of scale in that it can centralize all the resources it needs and locate various experts in that area; (3) there is good coordination within the function, and top management can easily direct and control various departments' activities However, the functional approach also has its drawbacks For example, it can result in a lack of communication and coordination among functions; result in individuals identifying more with their departments than with the overall organization; make the organization less responsive to change; result in an organization of narrow specialists; and encourage people in the same department to engage in groupthink Thus, firms have found that other approaches to departmentalization may be better These alternative approaches include departmentalization by customer group, by geographic region, by product, or by process d Centralized authority occurs when decision-making authority is maintained at the top level of management at the company's headquarters Decentralized authority means that decision making is delegated to lower-level managers and employees who are more familiar with local conditions than headquarters' management could be The centralized approach may enable a firm to achieve more consistency and project a uniform image, but the decentralized approach gives a firm more flexibility to respond to customers The trend today is toward more decentralized organizations AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 08-03 Evaluate the choices managers make in structuring organizations Level of Difficulty: Hard Topic: Organizational Structure 8-124 Chapter 08 - Structuring Organizations for Today's Challenges 364 Explain the difference between a firm's formal organization and its informal organization Why are both types of organization important to managers? Answer: a A firm's formal organization is the structure that details lines of responsibility, authority, and position It is the structure illustrated by the firm's organization chart b A firm's informal organization is the system of relationships that develop spontaneously as employees meet and form power centers This is the human side of the organization that does not show up on an organization chart c Effective managers use both types of organization, but in different ways The formal organization provides useful guidelines for routine decision making and the framework needed for careful, reasoned decision making on critical matters The informal organization creates camaraderie, encourages teamwork among employees, and can be used to generate creative solutions to short-term problems Effective managers make an effort to identify employees who are important members of the informal organization because their status and influence with other employees can help managers cut through red tape and get things done more quickly AACSB: Knowledge Application Bloom's: Apply Learning Objective: 08-06 Explain how organizational culture can help businesses adapt to change Level of Difficulty: Hard Topic: Culture in Organizations 8-125 Chapter 08 - Structuring Organizations for Today's Challenges Multiple Choice Questions Mini-Case Angelica Canizales is the CEO of Mucho Dinero Enterprises Sales have declined for four consecutive years and the firm's accountants have reported net losses in each of the last two years Employees appear demoralized and frustrated Recently, Angelica met with managers from marketing, production, and finance to listen to their views regarding the company's problems The managers unanimously agreed that the main problem was a lack of communication among the several functional areas of the business Each manager felt that the firm could increase quality and customer satisfaction with better interdepartmental communication Angelica also met with marketing and production employees to get their respective opinions on the problems of the firm One employee from the production department observed, "We have so many layers of management that it takes forever to make decisions." An employee from marketing complained, "This place is so bogged down with rules and regulations that there is no opportunity to be creative." Several employees shared their opinions regarding their bosses Specifically, one employee said, "My boss never pays attention to my ideas He just issues orders and expects me to obey them." Angelica decided, after listening to many comments from managers and employees and also suppliers and customers, that the only way to end Mucho Dinero's slide was to completely rethink the firm's structure and to make radical changes in its organization She presented her ideas to the board of directors, promising to voluntarily resign if her efforts to reorganize did not return the firm to profitability 365 Employee complaints that there are too many layers of management and too many rules and regulations suggest that Mucho Dinero is a(n): A flat organization B bureaucratic organization C inverted organization D wide organization Feedback: A bureaucratic organization is characterized by many layers of management and reliance on rules and regulations to guide behavior Answer: B AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber Level of Difficulty: Hard Topic: Organizational Structure 8-126 Chapter 08 - Structuring Organizations for Today's Challenges 366 Angelica's decision to completely redesign Mucho Dinero's organization indicates that she believes the best approach to her firm's problems is: A competitive benchmarking B flexible departmentalization C restructuring D organizational therapy Feedback: Restructuring is redesigning an organization so that it can more effectively and efficiently serve its customers Answer: C AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 08-05 Identify the benefits of interfirm cooperation and coordination Level of Difficulty: Hard Topic: Delegation and Authority 367 Currently, Mucho Dinero is organized into specialized departments such as marketing, finance, production and personnel These departments are designed to allow people with similar skills and expertise to work together This approach is known as _ departmentalization A functional B process C interest group D task-oriented Feedback: Functional departmentalization groups workers into departments based on similar skills, expertise, or resource use Answer: A AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 08-03 Evaluate the choices managers make in structuring organizations Level of Difficulty: Hard Topic: Organizational Structure 8-127 Chapter 08 - Structuring Organizations for Today's Challenges 368 In order to encourage more interdepartmental communication and cooperation, Angelica is thinking about setting up groups of workers from different departments to work together on a long-term basis She is even thinking about asking people from some of Mucho Dinero's suppliers, customers, and distributors to join these groups The type of group that Angelica is considering is known as a(n): A focus group B dynamic group C matrix team D cross-functional team Feedback: A cross-functional team consists of workers from different departments within an organization who work together on a semi-permanent basis These teams can also include people representing the organization's suppliers, distributors, and customers Answer: D AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 08-04 Contrast the various organizational models Level of Difficulty: Hard Topic: Organizational Structure 369 From her discussions with employees, Angelica learned quickly that production workers put their trust in 20-year veteran Willie McClaren Many people told her that if you wanted something done, Willie was the person to see Willie appears to be an important part of the: A decentralized authority B span of control C informal organization D functional structure Feedback: The informal organization arises from the system of relationships that develop spontaneously within an organization Willie may not have much clout in the formal organization, but the respect people in the production department have for him means that he may be very important in the informal organization Answer: C AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 08-06 Explain how organizational culture can help businesses adapt to change 8-128 Chapter 08 - Structuring Organizations for Today's Challenges Level of Difficulty: Hard Topic: Culture in Organizations 8-129 ...Chapter 08 - Structuring Organizations for Today's Challenges Chapter 08 Structuring Organizations to Today's Markets Answer Key True / False Questions... to empowering lower-level employees to respond more quickly to customer needs, without the need to get permission from managers Answer: False 8- 2 5 Chapter 08 - Structuring Organizations for Today's. .. Objective: 0 8- 0 3 Evaluate the choices managers make in structuring organizations Level of Difficulty: Hard Topic: Organizational Structure 8- 2 8 Chapter 08 - Structuring Organizations for Today's