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Exam 8: Structuring Organizations for Todays Challenges

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Question 61

Multiple Choice

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

A) Real time decisions
B) Cross-functional teams
C) Empowerment of first line employees to better serve customers
D) Many layers of management

E) A) and B)
F) All of the above

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Question 62

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Departmentalization by function typically increases the cost of doing business.

A) True
B) False

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Question 63

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Barclay developed two interactive computer games. He didn't do it entirely alone. Last year he started a small company, hired two programmers, and a marketing graduate. He considers himself a cutting-edge kind of guy and wants to position his company the same. Soliciting your advice as to how he should structure his organization as he moves forward, you suggest that he hire a few potential customers to join his team of employees as product testers. And, maybe he should solicit globally. You are suggesting to Barclay that he put together a .

When we experience economies of scale this means that as production levels rise (we make more of something), the cost of supplies and cost of labor that goes into the production, goes down.

Weber promoted the idea of the pyramid-shaped organization structure for large businesses.

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

Cross-functional teams that go beyond company boundaries share production information but seldom market information.

A hierarchy requires many top managers, but only a few middle managers.

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 between 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 that, "We have so many layers of management that it takes forever to make decisions." An employee from marketing complained that, "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 expressed "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 employees, 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. -Employee complaints that there are too many layers of management and too many rules and regulations suggest that Mucho Dinero is a(n) :

The widely shared values within an organization that provide unity and cooperation to achieve common goals is together known as the:

An organization with only a few layers of management is known as a(n) :

The informal organization of a business is probably best suited to:

The basic idea behind the organization design of Fayol and Weber was that management wanted to control workers.

Which of the following is an advantage of a line organization in a large business?

Max Weber's principles of organization were similar to those of Henri Fayol.

Transparency allows two companies to work more efficiently together.

Departmentalization by function allows employees opportunity to further develop their skills.

The informal organization is created by the decisions of top management.

When Bret started his auto mechanic shop his business plan included a(n) that showed the relationship among employees in his organization and the lines of authority and responsibility.

The an organization's structure, the the span of control.