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Exam 8: Structuring Organizations for Todays Challenges

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Question 101

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Transparency describes the relationship between a firm and its stockholders.

A) True
B) False

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Question 102

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Cross-functional teams defy the trend toward customer-driven organizations.

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B) False

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Question 103

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Fayol's ________ principle says that tasks should be divided into areas of specialization.

Melissa's company is a bureaucratic organization. Melissa is likely to encounter which of the following conditions?

Years ago, Johnny created a successful sportswear company that continues to provide uniforms for clients in the Midwest. As his business started to grow, Johnny added functional departments including a marketing department and an accounting department. But now, he sees that employees who specialized in these areas no longer share knowledge with each other in the same way they did when the business was smaller. As one of Johnny's consultants, you explain that as the company grows taller, it cannot avoid this pitfall, and he should focus on continued functional departmentalization, especially if he supports innovation and learning.

An advantage of a tall organization is that it ensures fast and efficient communications throughout the organization.

Management at Leaves of Green, a nationwide vegetarian restaurant chain, believes that its customers value a predictable and consistent level of service and quality. When customers stop at one of its restaurants anywhere in the U.S., they should know what to expect in terms of menu, price and quality. In order to maintain this consistency, Leaves of Green should adopt a decentralized organization.

The success of the firm often depends on assigning the right tasks to the right person.

The ________ is the system of relationships that develop spontaneously as employees meet and form power centers.

Dividing tasks into smaller jobs is called

Bright Electronics has found it needs to reorganize, including a significant trim of its middle management. This action will likely result in

Corleone Industries' chain of command moves from the top of the hierarchy down to lower-level managers. The company is organized by department with specific rules and regulations that everyone is expected to follow. These characteristics suggest that Corleone Industries is an example of a bureaucratic organization.

Departmentalizing by customer group has proven ineffective.

Daniela thinks all workers should receive the same pay regardless of their position within a company. Daniela views on wages illustrate Fayol's principle of equity.

An advantage of departmentalization is groupthink.

Departmentalization is the dividing of organizational functions into separate units.

As the span of control widens, there is usually a reduction of middle management and an emphasis on empowerment.

Organizing the structure of the company means deciding what jobs need to be done and who is responsible for doing them.

As organizations grew, the use of Fayol's principles led to rigid organizations that didn't always respond quickly to consumer requests.

The key people in a company's grapevine typically have considerable influence in the organization.