Exam

Name___________________________________

TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.
1) Organizational design is the organization's formal framework by which job tasks are divided, 1) _______
grouped, and coordinated.
Answer: True False

2) Organizational structure is the degree to which tasks in an organization are divided into 2) _______
separate jobs.
Answer: True False

3) The concept of work specialization can be traced back a couple of centuries to Adam Smith's 3) _______
discussion of division of labor.
Answer: True False

4) Today, most managers see work specialization as a source of ever-increasing productivity. 4) _______
Answer: True False

5) Grouping jobs on the basis of product or customer flow is termed 'customer 5) _______
departmentalization'.
Answer: True False

6) When decisions tend to be made at lower levels in an organization, the organization is said to be 6) _______
decentralized.
Answer: True False

7) The concept of centralization-decentralization is absolute. 7) _______

Answer: True False

8) When effective implementation of company strategies depends on managers having 8) _______

involvement and flexibility to make decisions, the company is probably more decentralized.
Answer: True False

9) A term for increased decentralization is employee empowerment, which is giving employees 9) _______
more authority to make decisions.
Answer: True False

10) Many of today's organizations are extremely reliant on strict rules and standardization to guide 10) ______
and regulate employee behavior.
Answer: True False

11) An organic organization tends to be characterized by high specialization, extensive 11) ______
departmentalization, narrow spans of control, high formalization, a limited information
network, and little participation in decision making by low-level employees.
Answer: True False

12) An organic organization would likely be very flexible. 12) ______

Answer: True False

13) Innovators need the efficiency, stability, and tight controls of the mechanistic structure. 13) ______
Answer: True False
14) The relationship between organizational size and structure tends to be linear. 14) ______
Answer: True False

15) Joan Woodward attempted to view organizational structure from a technological perspective. 15) ______
Answer: True False

16) Woodward's findings support that there is "one best way" to organize a manufacturing firm. 16) ______
Answer: True False

17) Since Woodward's initial work, numerous studies have demonstrated that organizations adapt 17) ______
their structures to their technology.
Answer: True False

18) Large organizations, such as Aramco, tend to have more specialization and centralization 18) ______
compared to small organizations.
Answer: True False

19) The strength of the functional structure is that it focuses on results. 19) ______
Answer: True False

20) A simple structure is an organizational design that groups similar or related occupational 20) ______
specialties together.
Answer: True False

21) In divisional structures, the parent corporation typically acts as an external overseer to 21) ______
coordinate and control the various divisions.
Answer: True False

22) Employee empowerment is a crucial aspect of team structure because there is no line of 22) ______
managerial authority from top to bottom.
Answer: True False

23) A matrix design creates a dual chain of demand. 23) ______

Answer: True False

24) Project structures tend to be rigid and inflexible organizational designs. 24) ______
Answer: True False

25) Internal boundaries are boundaries that separate the organization from its customers, suppliers, 25) ______
and other stakeholders.
Answer: True False

26) To minimize or eliminate boundaries, managers might use virtual or network structural designs. 26) ______
Answer: True False

27) The inspiration of the virtual organization structural approach is the film industry. 27) ______
Answer: True False

28) Many organizational design concepts are not applicable to twenty-first century companies. 28) ______
Answer: True False
 29) It is critical for members in a virtual organization to collaborate on work activities throughout 29) ______
the entire organization.
Answer: True False

30) Structures of organizations in the Arab world differ remarkably from those in other countries. 30) ______
Answer: True False

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
31) ________ is the formal arrangement of jobs within an organization. 31) ______
A) Organizational structure B) Organizational design
C) Work specialization D) Departmentalization
Answer: A

32) Organizational design is based on decisions about ________. 32) ______

A) work specialization and mechanisms B) centralization and matrices
C) strategy and structure D) chain of command and span of control
Answer: D

33) In describing the degree to which tasks in an organization are divided into separate jobs, 33) ______
managers use the term ________.
A) departmentalization B) work specialization
C) span of control D) chain of command
Answer: B

34) Which statement accurately defines work specialization? 34) ______

A) It clarifies who reports to whom.
B) The degree to which tasks are grouped together.
C) Individual employees specialize in doing part of an activity rather than the entire activity.
D) Jobs are ranked relative only to their worth or value to the businesses.
Answer: C

35) On what basis are jobs grouped in order to accomplish organizational goals? 35) ______
A) Centralization B) Formalization
C) Departmentalization D) Coordination
Answer: C

36) Functional departmentalization groups jobs by ________. 36) ______

A) tasks they perform
B) type of customer they serve
C) territories they serve
D) products or services they manufacture or produce
Answer: A

37) Departmentalization based on ________ groups' jobs is based on the territory or physical 37) ______
location.
A) geographic B) functional C) matrix D) product
Answer: A

38) ________ departmentalization is based on the product or customer flow through the 38) ______
organization.
A) Product B) Organizational structure
C) Functional D) Process
 Answer: D

39) What kind of departmentalization would be in place in a government organization where 39) ______
different public service responsibilities are divided into activities for employers, children, and
the disabled?
A) Customer B) Product C) Outcome D) Geographic
Answer: A

40) ________ departmentalization is used more in recent years to better monitor the needs of 40) ______
customers and to respond to changes in those needs.
A) Needs-based B) Functional C) Customer D) Process
Answer: C

41) Work teams composed of individuals from various functional specialties are known as ________ 41) ______
teams.
A) differentiated B) weak
C) product D) cross-functional
Answer: D

42) The line of authority that extends from the upper levels of management to the lowest levels of 42) ______
the organization is called the ________.
A) chain of command B) authorized line of responsibility
C) unity of command D) responsibility factor
Answer: A

43) ________ refers to the rights inherent to a position that allows a manager to tell subordinates 43) ______
what to do and expect them to do it.
A) Unity of command B) Chain of command
C) Authority D) Responsibility
Answer: C

44) ________ is the obligation or expectation to perform a duty. 44) ______

A) Span of control B) Responsibility
C) Chain of command D) Unity of command
Answer: B

45) Which one of Fayol's 14 principles of management helps preserve the concept of a continuous 45) ______
line of authority?
A) Unity of command. B) Unity of demand.
C) Demand structure. D) Continuous demand.
Answer: A

46) The theory that a person should report to only one manager is called ________. 46) ______
A) responsibility factor B) unity of command
C) authorized line of responsibility D) chain of command
Answer: B

47) Concepts such as chain of command and authority are considerably less relevant today because 47) ______
of things like ________.
A) information technology B) empowerment
C) conflicting demands of multiple bosses D) span of control
Answer: A
48) The traditional view was that managers could not and should not directly supervise more 48) ______
than ________ subordinates.
A) five or six B) nine or ten C) seven or eight D) three or four
Answer: A

49) The concept that defines the number of subordinates that report to a manager and that indirectly 49) ______
specifies the number of levels of management in an organization, is called ________.
A) authorized line of responsibility B) span of control
C) unity of command D) responsibility factor
Answer: B

50) All other things being equal, as the span of control grows wider or larger, organizational design 50) ______
becomes more ________.
A) effective B) democratic C) efficient D) bureaucratic
Answer: C

51) When the span of control ________, employee performance suffers due to a lack of time, 51) ______
leadership, and support.
A) becomes less cost efficient B) becomes moderate
C) becomes too large D) remains too small
Answer: C

52) Trends in the past few years have centered on a ________ span of control to reduce costs and 52) ______
speed decision making.
A) deeper B) wider C) stable D) narrower
Answer: B

53) What factor influences the amount of centralization an organization uses? 53) ______
A) The environment is complex.
B) Decisions are significant.
C) The organization is facing the risk of company failure.
D) The company is geographically dispersed.
Answer: C

54) What factor influences the amount of decentralization an organization uses? 54) ______
A) The company is large.
B) Lower level managers are not as capable at making decisions as upper-level managers.
C) Lower-level managers want a voice in decisions.
D) Effective implementation of company strategies depends on managers retaining say over
what happens.
Answer: C

55) In recent years, there has been a movement to make organizations more flexible and responsive 55) ______
through ________.
A) alternative organizational structure B) decentralization
C) centralization D) customer-based structure
Answer: B

56) The degree to which jobs are standardized and guided by rules and procedures is called 56) ______
________.
A) formalization B) centralization
 C) work specialization D) decentralization
Answer: A

57) When managers standardize employee behavior through rules and procedures, the jobs are 57) ______
becoming more ________.
A) formalized B) horizontal C) vertical D) diversified
Answer: A

58) At a company like Eldiar Furniture Manufacturing Company, workers may be assigned specific 58) ______
duties in order to meet the requirements of quality conscious clients. This is called ________.
A) job enhancement B) labor intensification
C) task specification D) work specialization
Answer: D

59) An example of ________ is when a hotel, such as Renaissance Dubai Hotel, conducts meetings 59) ______
with employees to gather their suggestions and ideas for implementation.
A) employee empowerment B) staff stimulation
C) employee incentive scheme D) employee inspiration
Answer: A

60) A(n) ________ organization is rigidly controlled and efficient. 60) ______
A) horizontal B) mechanistic C) organic D) learning
Answer: B

61) Organizations that work like efficient, well-oiled machines are described as ________. 61) ______
A) intuitive B) organic C) rational D) mechanistic
Answer: D

62) Which of the following would likely be found in mechanistic organizations? 62) ______
A) Decentralized responsibility. B) Standardized job specialties.
C) Wide span of control. D) Empowered employees.
Answer: B

63) A(n) ________ organization is able to change rapidly as needs require. 63) ______
A) organic B) mechanistic C) vertical D) horizontal
Answer: A

64) The appropriate structure for an organization is based on four contingency variables: strategy, 64) ______
size, degree of environmental uncertainty, and ________.
A) history B) technology
C) intensity of competition D) leadership
Answer: B

65) In describing the relationship between structure and strategy, it can be said that ________. 65) ______
A) structure follows strategy
B) strategy and structure are always handled equally
C) strategy follows structure in smaller organizations
D) strategy follows structure
Answer: A

66) Structure is related to the size of the organization, such that larger organizations tend to have 66) ______
________ than smaller organizations.
 A) fewer rules and regulations B) less centralization
C) less departmentalization D) more specialization
Answer: D

67) Structure is related to the size of the organization, such that larger organizations are more 67) ______
________.
A) mechanistic B) decentralized
C) structurally weak D) organic
Answer: A

68) Joan Woodward's study of the relationship between technology and structure is based upon her 68) ______
study of small manufacturing firms in ________.
A) southern England B) the south of Wales
C) France D) the northeastern United States
Answer: A

69) As a type of technology, ________ centers on large-batch production and requires moderate 69) ______
levels of complexity and sophistication.
A) service production B) process production
C) mass production D) unit production
Answer: C

70) In Joan Woodward's study of the relationship between technology and structure, the structure 70) ______
that was the most technically complex was ________.
A) mass production B) technological production
C) process production D) unit production
Answer: C

71) According to Woodward's studies, what type of production works best with a mechanistic 71) ______
structure?
A) Process B) Product C) Mass D) Unit
Answer: C

72) The greater the environmental uncertainty, the more an organization needs to become ________. 72) ______
A) technologically pure B) supportive of technological change
C) organic D) mechanistic
Answer: C

73) Global competition, accelerated product development by competitors, and increased demands 73) ______
by customers for better service have encouraged organizations to become more ________.
A) technologically pure B) task oriented
C) mechanistic D) organic
Answer: D

74) Traditional organizational designs tend to be more mechanistic, and include ________. 74) ______
A) simple, functional, and divisional structures
B) functional, strategic, and business unit structures
C) simple, functional, and business unit structures
D) simple, functional, and corporate structures
Answer: A

75) What is a strength of a simple structure? 75) ______

 A) It focuses on results.
B) Employees are grouped with others who have similar tasks.
C) It is inexpensive to maintain.
D) There are cost-saving advantages from specialization.
Answer: C

76) What is a weakness of a simple structure? 76) ______

A) Reliance on one person is risky.
B) Functional specialists become insulated and have little understanding of what other units
are doing.
C) Pursuit of functional goals can cause managers to lose sight of what's best for the overall
organization.
D) Duplication of activities and resources increases costs and reduces efficiency.
Answer: A

77) The strength of a ________ structure is based on results of managers, but it has a weakness 77) ______
because duplication can occur easily within the organization.
A) simple B) divisional C) functional D) matrix
Answer: B

78) A small business with low departmentalization, wide spans of control, centralized authority, and 78) ______
limited formalization can be said to possess a ________ structure.
A) matrix B) functional C) divisional D) simple
Answer: D

79) An online Arabic sweets retailer that sells and ships sweets to customers all over the world and 79) ______
has a payroll of six employees, is likely to have which kind of organizational structure?
A) Simple B) Divisional C) Functional D) Bureaucratic
Answer: A

80) As the number of employees in an organization grows, structure tends to become more 80) ______
________.
A) relaxed B) informal C) centralized D) specialized
Answer: D

81) What type of organizational structure is made up of autonomous, self-contained units? 81) ______
A) Bureaucratic B) Simple C) Divisional D) Functional
Answer: C

82) Managers in contemporary organizations are finding that traditional hierarchical designs 82) ______
________ for the environments they face.
A) are often not appropriate B) are somewhat suitable
C) are perfectly suitable D) form a foundation
Answer: A

83) In what type of organizational structure is empowerment most crucial? 83) ______
A) Functional B) Bureaucratic C) Simple D) Team
Answer: D

84) In large organizations, the team structure complements what is typically a ________ structure. 84) ______
A) project B) divisional C) simple D) matrix
Answer: B
85) What is an advantage of a team structure? 85) ______
A) Employees are more involved and empowered.
B) It allows for faster decision making.
C) The fluid and flexible design can respond to environmental changes.
D) It draws on talent wherever it is found.
Answer: A

86) What is a disadvantage of a team structure? 86) ______

A) There is no clear chain of command.
B) There is an increased complexity of assigning people to projects.
C) There are task and personality conflicts.
D) There are communication difficulties.
Answer: B

87) When an organization assigns specialists to groups according to the projects they are working 87) ______
on, this is called a ________.
A) matrix structure B) product structure
C) functional structure D) divisional structure
Answer: A

88) A matrix structure mixes characteristics of functional departmentalization and ________. 88) ______
A) process departmentalization B) a narrow span of control
C) a dual chain of command D) product departmentalization
Answer: D

89) A matrix structure violates a key element of organizational design called ________. 89) ______
A) unity of command B) span of management
C) chain of command D) decentralization
Answer: A

90) A ________ structure is an advanced version of the matrix organization, where employees 90) ______
continuously work on assignments that are oriented to completion of a task.
A) project B) functional C) weighted D) conservative
Answer: A

91) A ________ design is not limited to horizontal, vertical, or external boundary imposed by a 91) ______
conventional structure.
A) learning organization's B) functional organization's
C) boundaryless organization's D) threatened organization's
Answer: C

92) A ________ organization consists of a small core of full-time employees and temporarily hires 92) ______
outside specialists to work on emergent opportunities.
A) virtual B) learning C) network D) modular
Answer: A

93) A ________ organization is a small core organization that outsources major business functions 93) ______
such as manufacturing, allowing the firm to concentrate on its core competencies.
A) modular B) network C) virtual D) learning
Answer: B
 94) Why is keeping employees connected a major structural design challenge for managers? 94) ______
A) Employees are widely dispersed.
B) Work is done at the employer's place of business under a manager's supervision.
C) Work tasks are fairly predictable and constant.
D) Most jobs are full-time and continue indefinitely.
Answer: A

95) A learning organization has developed its ________. 95) ______

A) educational department to keep employees trained
B) barriers to entry of its markets
C) a sustainable competitive advantage that is easy to maintain
D) capacity to adapt and change
Answer: D

96) Some organizational theorists go so far as to say that an organization's ability to ________ may 96) ______
be the only sustainable source of competitive advantage.
A) apply what they learn B) keep employees connected
C) maintain its structure D) manage a global structure
Answer: A

97) Organizational learning can't take place without ________. 97) ______
A) structure B) motivation
C) goals D) sharing information
Answer: D

98) Researchers have concluded that the structures and strategies of organizations worldwide are 98) ______
________ and the behavior within them is ________.
A) dissimilar; consistent with the individual cultures
B) dissimilar; similar
C) similar; also similar
D) similar; consistent with the individual cultures
Answer: D

99) One study showed that ________ may be more important in less economically developed 99) ______
countries and less important in more economically developed countries.
A) formalization B) span of control
C) departmentalization D) chain of command
Answer: A

Ismail (Scenario)

Ismail graduated from college and was hired by a corporation that manufactured parts for the automotive industry. The
employees on the assembly line seemed bored, and their motivation was low. Ismail's employer decided to reorganize, in
an attempt to increase productivity.

100) The jobs of assembly-line employees are to be changed to allow more tasks to be done by 100) _____
individual workers. This is a reduction in ________.
A) work specialization B) centralization
C) chain of command D) departmentalization
Answer: A

101) Ismail majored in engineering and really enjoyed the work assigned to him. The reorganization chan ged
some of 101) ____
his work _
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________
.
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C) centralized work assignment D) career degrading assignment
Answer: A

102) Ismail is offered a chance to help direct the efforts of some employees assigned to his work 102) _____
group. This is a chance for Ismail to experience ________.
A) divisional structure B) authority
C) responsibility D) functional structure
Answer: B

103) Ismail sees this new assignment as an increase in ________, or an obligation or expectation for 103) _____
him to perform at a new level.
A) responsibility B) divisional structure
C) functional structure D) authority
Answer: A

104) During his career, Ismail saw his job change from an engineering role to a more complex job 104) _____
assignment. Eventually, Ismail's department evolved to become an advanced structure in which
Ismail continually worked on projects. This structure is known as a ________ structure.
A) simple B) project C) divisional D) functional
Answer: B
General Hospital (Scenario)

Maha is a registered nurse in charge of a new unit at her hospital. She would like to have a more laid back approach in
dealing with her new staff, but the hospital demands that there be strict hierarchical levels and that all decisions must be
signed off by Maha. Sometimes this drives Maha crazy the constant filling out of forms, and so forth. She also feels that
the numerous levels of hierarchy are unnecessary a n d
p l a c e
b a r r i e r
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a n d h e r
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h e r u n i t
s o t h a t
i t h a s
m o r e
f l e x i b i
l i t y a n d
f e w e r
r u l e s .

105) Maha is very concerned about the formal framework by which job tasks within her nursing unit 105) _____
are divided, grouped, and coordinated within her unit. This framework is known as the unit's
________.
A) organizational structure B) staff
C) span of control D) formal organizational chart
Answer: A

106) Maha's unit specializes in cardiology cases. Dividing up work units in such a manner is most 106) _____
representative of ________ departmentalization.
A) product B) customer C) functional D) process
Answer: B
 107) Maha was asked to represent her cardiac unit as part of a Total Quality Management (TQM) 107) _____
initiative that is aimed at improving the overall quality of care at the hospital. Other
departments, such as Cardiology and ER, also have representatives on this team. The TQM team
exemplifies ________.
A) customer departmentalization B) process integration
C) a cross-functional team D) project management
Answer: C

108) Maha has noticed that everyone is very concerned about the line of authority within the 108) _____
organization. The line of authority within the organization is also called ________.
A) organizational strategy B) the chain of command
C) responsibility D) the span of control
Answer: B

109) Maha is required to sign off on all decisions, suggesting the hospital has what kind of 109) _____
decision-making authority?
A) strict B) autocratic C) formal D) centralized
Answer: D

You Can Take That to the Bank (Scenario)

Changes in banking regulations, a series of loan defaults by customers, and a decline in the real estate market have forced
Eastern Bank, a large regional Gulf bank, to downsize in an effort to improve profitability and bolster its sagging stock
price. Sawsan, a regional branch supervisor, has been tasked with preparing a management report concerning how these
cuts are affecting bank operations and customer service. Sawsan believes that the most important problem that has
emerged concerns the span of control and decision-making authority within the bank. In the past, bank policy was that no
manager should supervise more than six subordinates and only managers could make decisions for their individual units.
However, with many of the cuts coming in middle management, upper management has increased its span of control
while still insisting on managerial-only decision making at the unit level. The result is that upper managers spend all of
their time putting out fires and subordinates feel they are getting answers too slowly. As a result, lower level employees
are requesting greater authority to make decisions on their own. However, they are not as experienced at making
decisions as upper-level managers. Sawsan believes that structural changes must be made that reflect Eastern Bank's new
situation.

110) Based upon the description of Eastern Bank's situation, which aspect of the current situation is 110) _____
inconsistent with Eastern Bank's decision to maintain a centralized form of decision making?
A) The company is large.
B) The organization is facing a crisis.
C) Lower-level managers want a voice in decisions.
D) Lower-level managers are not as experienced at making decisions as upper-level managers.
Answer: C

111) Sawsan believes that Eastern Bank should be more highly adaptive and flexible. She would like 111) _____
Eastern Bank to possess more of a(n) ________ structure?
A) organic B) technological C) mechanistic D) formalized
Answer: A

Custom Leather (Scenario)

Lamia has been hired as a consultant for XYZ Consulting. Her first assignment is to work with one of XYZ's newest
clients, Custom Leather, Inc., a manufacturer of high-end leather furniture. Custom Leather was founded over a decade
ago with the idea that great looking, comfortable leather furniture could be custom made and delivered to customers in
30 days. Traditionally, retailers stock leather sofas to satisfy the desire to receive new furniture fast limiting the choice of
colors and style for the consumer. In stark contrast, Custom Leather offers 13 different styles in over 70 different
colors from rich, deep browns to bright, sunflower; sleek, silver grays and bright, ruby red through a select group of
retail outlets. Each piece is built to the customer's individual requirements and is shipped within 2-3 weeks. However, the
emergence of a new manufacturing technology has enabled a few, traditionally mass-production competitors to offer
greater customization, minimizing some of Custom Leather's competitive advantage. As a result, Custom Leather is
considering sweeping changes to current work processes and organizational structure.

112) Many of Custom Leather's 75 employees are highly skilled and experienced artisans. Many 112) _____
long-time employees are stockholders and all participate in the profit sharing plan. While there
is division of labor, the jobs most floor employees perform are not highly standardized.
Management has found that employees take great pride in their craft, and thus they require
minimal formal rules and little direct supervision. These traits are most typical of a(n) ________
organization.
A) informal B) organic C) mechanistic D) empowered
Answer: B

113) After reading Woodward's work at Lamia's suggestion, Custom Leather CEO, Masoud, asks her 113) _____
about other contingency factors that should be considered in optimally designing the firm's
structure. Lamia responds that another contingency factor linked to structure is ________.
A) process B) size
C) organizational complexity D) market orientation
Answer: B

114) Masoud is interested in learning more about the link between strategic decision making and 114) _____
organizational structure. Lamia suggested he read the research and writings of ________, which
were based on studies of U.S. firms in the late 1950s and early 1960s and remain the most
seminal study in this area.
A) Joan Woodward B) Raymond Kramer
C) Alfred Chandler D) Arthur Miller
Answer: C

115) Masoud is considering doubling the size of his workforce in conjunction with expanding the 115) _____
number of retail outlets that carry Custom Leather products. Lamia tells him that he should
expect the organization to become more ________ as a result of this change.
A) mechanistic B) complex C) formalized D) organic
Answer: A

116) At their first meeting, Lamia provides copies of a collection of Joan w i

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 A) technology and structure B) size and structure
C) processes and employees D) employees and products
Answer: A

117) Since Custom Leather produces individually customized couches, this could best be referred to 117) _____
as what kind of production?
A) Mass B) Unit C) Process D) Environmental
Answer: B

118) Custom Leather's competitors typically produce their couches in large batches. This could best 118) _____
be referred to as what kind of production?
A) Process B) Unit C) Mass D) Environmental
Answer: C

119) Lamia tells Masoud that studies have found that as environmental uncertainty increases, 119) _____
________ designs tend to be most effective.
A) mechanistic B) centralized C) organic D) traditional
Answer: C

Black Gold (Scenario)

Jamal Oil Corporation (JOC) began as a relatively small oil company. However, through the years it has grown to become
an international corporation.

120) The original entrepreneurial venture consisted only of Mr. Jamal and a few employees. It was an 120) _____
informal organization, and everyone reported to Jamal. This is best described as a ________
structure.
A) functional B) divisional C) simple D) matrix
Answer: C

121) A sharp rise in oil prices helped JOC expand. Jamal concluded that it was impractical and 121) _____
inefficient for all decisions to continue flowing through his office. He granted his key
subordinates the authority and responsibility to manage others within their areas of specialty.
This organizational structure is best described as a ________ structure.
A) functional B) divisional
C) simple functional D) matrix
Answer: A

122) Jamal decided to purchase an oil drilling supply company, located in a new country. The 122) _____
purchase of this company was classified as a related diversification, but distance and the new
product line suggested that this newly purchased organization continued to be operated as a
separate company. In beginning a new phase in the history of Jamal Oil Corporation, a ________
structure should be implemented to allow the company to continue to grow.
A) matrix B) divisional C) functional D) simple
Answer: B

123) To deal with the workload in an effective manner,JOC's executive management group assigns 123) _____
specialists from the different functional departments to work on one or more work groups that
are led by project managers. This popular contemporary design is called a(n) ________ structure.
A) organic B) divisional C) matrix D) functional
Answer: C

124) As JOC continues to grow, a highly trained group of managers and analysts has developed at corp orate
headqua 124) ____
rters. _
This
group is
highly
adaptive
in its
structure
.
Members
of this
group do
not have
standard
ized jobs,
but are
empowe
red to
handle
diverse
job
activities
and
problems
. This
group of
employe
es is said
to have
a(n)
________
structure
.
A) divisional B) organic C) simple D) functional
Answer: B

125) Twenty years after founding JOC, Jamal decides he is approaching retirement. He wants JOC to 125) _____
develop the capacity to adapt itself and change because each member will take an active role in
identifying and resolving work-related issues. Jamal wants the firm to become a ________.
A) learning organization B) functional structure
C) threatened organization D) boundaryless organization
Answer: A

126) Several years after the retirement of Mr. Jamal, management at JOC decided to sell off its oil 126) _____
exploration and drilling supply holdings, and instead focus on the more profitable distribution
end of the business. In conjunction with this decision, management decided to outsource most of
its non core functions, such as accounting, payroll, and human resources. These moves are
consistent with what type of contemporary organizational design?
A) a modular organization B) a virtual organization
C) a matrix organization D) a network organization
Answer: D
ESSAY. Write your answer in the space provided or on a separate sheet of paper.
127) In a short essay, list and explain the six key elements in designing an organization's structure.
Answer: 1. Work specialization this concept describes the degree to which tasks in an organization are
divided into separate jobs. The essence of work specialization is that an entire job is not done by one
individual, but instead is broken down into steps, with each step completed by a different person.
2. Departmentalization the basis by which jobs are grouped together is called departmentalization.
The five common forms of departmentalization include functional, product, geographical, process,
and customer departmentalization.
3 . Chain of
command t h i s
i s t h e
c o n t i n
u o u s
l i n e o f
a u t h o r
i t y
t h a t
e x t e n d
s f r o m
u p p e r
o r g a n i
z a t i o n
a l
l e v e l s
t o t h e
l o w e s t
l e v e l s
a n d
c l a r i f
i e s w h o
r e p o r t
s t o
w h o m .
I t
h e l p s
e m p l o y
e e s
a n s w e r
q u e s t i
o n s
s u c h a s
" W h o d o
I g o t o
i f I
h a v e a
p r o b l e
m ? " o r
" T o
w h o m a m
I
r e s p o n
s i b l e ?
" All things being equal, the wider or larger the span of control, the more efficient the organization.
4. Span of 5. Centralization and decentralization centralization describes the degree to which decision making
control this is concentrated at a single point in the organization. If top managers make the organization's key
concept is decisions with little or no input from below, then the organization is centralized. In contrast, the more
important because, that lower-level employees provide input or actually make decisions, the more decentralization there
to a large degree, it is.
determines the 6. Formalization this refers to the degree to which jobs within the organization are standardized
number of levels and the extent to which employee behavior is guided by rules and procedures. If a job is highly
and managers an formalized, then the person doing that job has a minimum amount of discretion over what is to be
organization has. done, when it's to be done, and how he or she could do it.

128) In a short essay, list and discuss the five common forms of departmentalization.
Answer: 1. Functional departmentalization jobs are grouped by the functions performed (e.g. marketing,
finance, human resources). This approach can be used in all types of organizations, although the
functions change to reflect the organization's objectives and work activities.
2. Product departmentalization jobs are grouped by product line. In this approach, each major
product area is placed under the authority of a manager who's a specialist in, and is responsible for,
everything having to do with that product line.
3 . Geographical
departmentalization j o b s
a r e
g r o u p e
d o n t h e
b a s i s
o f a
t e r r i t
o r y o r
g e o g r a
p h i c
r e g i o n
s u c h a s
s o u t h e
r n ,
m i d w e s
t e r n ,
o r
n o r t h w
e s t e r n
r e g i o n
s f o r a n
o r g a n i
z a t i o n
o p e r a t
i n g
o n l y i n
t h e
U n i t e d
S t a t e s
; o r f o r
a
g l o b a l
c o m p a n
y n , a n d
, A s i a n -Pacific regions.
f 4 . Process
o departmentalization t h i s
r m e t h o d
e g r o u p s
x j o b s o n
a t h e
m b a s i s
p o f
l p r o d u c
e t o r
i c u s t o m
n e r
U f l o w .
. I n t h i s
S a p p r o a
. c h ,
, w o r k
E a c t i v i
u t i e s
r f o l l o w
o a
p n a t u r a
e l
a p r o c e s
n s i n g
, f l o w o f
C p r o d u c
a t o r
n e v e n
a c u s t o m
d e r s .
i 5. Customer departmentalization jobs are grouped on the basis of common customers who have
a common needs or problems that can best be met by having specialists for each.

129) In a short essay, list six factors that influence the amount of centralization (or decentralization) in an
organization.
Answer: Factors that increase Centralization
1. The environment is stable.
2. Lower-level managers are not as capable or experienced at making decisions as upper-level
managers.
3. Lower-level managers do not want to have a say in decisions.
4. Decisions are relatively minor.
5. The organization is facing a crisis or the risk of company failure.
6. The company is large.
7. Effective implementation of company strategies depends on managers' retaining a say over what
happens.

Factors that increase Decentralization

1. The environment is complex, uncertain.
2. Lower-level managers are capable and experienced at making decisions.
3. Lower-level managers want a voice in decisions.
4. Decisions are culture is open to allowing managers to have a say in what happens.
relatively 6. The company is geographically dispersed.
significant. 7. Effective implementation of company strategies depends on managers' having involvement and
5. The corporate flexibility to make decisions.

130) In a short essay, list and discuss the four contingency factors that should be considered in determining an
appropriate structure in organizational design.
Answer: 1. Strategy and structure an organization's structure should facilitate the achievement of goals.
Since goals are influenced by the organization's strategies, it's only logical that strategy and structure
should be closely linked. More specifically, structure should follow strategy. If managers significantly
change the organization's strategy, they will need to modify structure to accommodate and support
the change.
2. Size and structure there's considerable evidence that an organization's size significantly affects its
structure. For instance, large organizations those with 2,000 or more employees tend to have more
specialization, departmentalization, centralization, and rules and regulations than do small
organizations. However, the relationship isn't linear. Rather, size affects structure at a decreasing rate;
that is, size becomes less important as an organization grows.
3. Technology and structure every organization has at least one form of technology to convert its
inputs into outputs. The processes or methods that transform an organization's inputs into outputs
differ by their degree of routineness. In general, the more routine the technology, the more
standardized and mechanistic the structure can be. Organizations with more nonroutine technology
are more likely to have organic structures.
4. Environmental uncertainty and structure since uncertainty threatens an organization's
effectiveness, managers will try to minimize it. One way to reduce environmental uncertainty is
through adjustments in the organization's structure. The greater the uncertainty, the greater the need
for the flexibility offered by an organic design. On the other hand, in stable, simple environments,
mechanistic designs tend to be most effective.

131) In a short essay, list the three traditional organizational designs. Describe the characteristics that are
commonly associated with each.
Answer: In designing a structure to support the most efficient and effective accomplishment of organizational
goals, managers often rely upon tried and true traditional organizational designs. These designs are:
the simple structure, functional structure, and divisional structure.
1. The simple structure is most often associated with small entrepreneurial ventures and is common
among organizations where the owner and manager are one and the same. Simple structures possess
low departmentalization, wide spans of control, authority centralized in a single person, and little
formalization. As firms grow, structure tends to become more specialized and formalized,
departments and new levels of management are created, and the firm takes on a more bureaucratic
nature.
2. A functional structure is an organizational design that groups similar or related occupational
specialties together. It is a functional approach to departmentalization applied to the entire
organization. For example, organizing around the separate functions of operations, finance, human
resources, marketing, and R&D.
3. Finally, the divisional structure is an organizational structure made up of separate business units
or divisions. In this design, each unit maintains limited autonomy with a division manager responsible
for performance and determining who has strategic and operational authority within the divisional
unit. However, the parent corporation still typically acts as an external overseer to coordinate and
control the various divisions.

132) In a short essay, describe matrix and project structures. What are the advantages and disadvantages of these
structures?
Answer: The matrix structure is an organizational structure that assigns specialists from different functional
departments to product departmentalization creating a matrix arrangement. One unique aspect of this design is that it
work on one or creates a dual chain of command, which violates the classical organizing principle of unity of
more projects command. Employees in a matrix organization have two managers: their functional area manager and
being led by their product or project manager, who share authority. The project managers have authority over the
project managers. functional members who are part of their project team in areas related to the project's goals. However,
Each product is decisions such as promotions, salary recommendations, and annual reviews typically remain the
managed by an functional manager's responsibility. To work effectively, project and functional managers have to
individual who communicate regularly, coordinate work demands on employees, and resolve conflicts together.
staffs his or her Although the matrix structure is an effective structural design choice for some organizations, many are
product team with using a more "advanced" type of project structure, in which employees continuously work on projects.
people from each Unlike the matrix structure, a project structure has no formal departments that employees return to at
of the functional the completion of a project. Instead, employees take their specific skills, abilities, and experiences to
departments. The other projects. In addition, all work in project structures is performed by teams of employees who
addition of this become part of a project team because they have the appropriate work skills and abilities. Project
vertical dimension structures tend to be fluid and flexible organizational designs. There's no departmentalization or rigid
to the traditional organizational hierarchy to slow down decision making or taking actions. In this type of structure,
horizontal managers serve as facilitators, mentors, and coaches. They "serve" the project teams by eliminating or
functional minimizing organizational obstacles and by ensuring that the teams have the resources they need to
departments, in effectively and efficiently complete their work. The advantages of matrix and project structures are
effect, "weaves that their fluid and flexible design can respond to environmental changes and allows for faster
together" elements decision making. The disadvantages are there is some complexity of assigning people to projects and
of functional and there are task and personality conflicts.

133) In a short essay, describe the boundaryless organization. What types of boundaries are there? What are the
advantages and disadvantages of this organizational design?
Answer: Another approach to contemporary organizational design is the concept of a boundaryless
organization, an organization whose design is not defined by, or limited to, the horizontal, vertical, or
external boundaries imposed by a predefined structure. Although the idea of eliminating boundaries
may seem odd, many of today's most successful organizations are finding that they can operate most
effectively by remaining flexible and unstructured: that the ideal structure for them is not having a
rigid, bounded, and predefined structure. There are two types: internal boundaries (horizontal
boundaries imposed by work specialization and departmentalization and the vertical boundaries that
separate employees into organizational levels and hierarchies) and external boundaries (boundaries
that separate the organization from its customers, suppliers, and other stakeholders). To minimize or
eliminate these boundaries, managers might use virtual or network structural designs. The advantages
of a boundaryless organization are that it is highly flexible and responsive and draws on talent
wherever it is found. The disadvantages are that there is a lack of control and it presents
communication difficulties.

134) In a short essay, describe a learning organization. What structural aspects does a learning organization need?
Answer: A learning organization is an organization that has developed the capacity to continuously learn,
adapt, and change. In a learning organization, employees continually acquire and share new
knowledge and are willing to apply that knowledge in making decisions or performing their work.
Some organizational theorists even go so far as to say that an organization's ability to do this that is,
to learn and to apply that learning may be the only sustainable source of competitive advantage.
What structural aspects does a learning organization need? First, it's critical for members in a learning
organization to share information and collaborate on work activities throughout the entire
organization across different functional specialties and even at different organizational levels. To do
this requires minimal structural and physical barriers. In such a boundaryless environment,
employees can work together and collaborate in doing the organization's work the best way they can
and learn from each other. Finally, because of this need to collaborate, teams also tend to be an
important feature of a learning organization's structural design. Employees work in teams that are
empowered to whatever work needs to be done or resolving issues. With empowered employees and teams, there's
make decisions little need for "bosses" to direct and control. Instead, managers serve as facilitators, supporters, and
about doing advocates.
 1) FALSE
2) FALSE
3) TRUE
4) FALSE
5) FALSE
6) TRUE
7) FALSE
8) TRUE
9) TRUE
10) FALSE
11) FALSE
12) TRUE
13) FALSE
14) FALSE
15) TRUE
16) FALSE
17) TRUE
18) TRUE
19) FALSE
20) FALSE
21) TRUE
22) TRUE
23) TRUE
24) FALSE
25) FALSE
26) TRUE
27) TRUE
28) TRUE
29) FALSE
30) FALSE
31) A
32) D
33) B
34) C
35) C
36) A
37) A
38) D
39) A
40) C
41) D
42) A
43) C
44) B
45) A
46) B
47) A
48) A
49) B
50) C
51) C
 52) B
53) C
54) C
55) B
56) A
57) A
58) D
59) A
60) B
61) D
62) B
63) A
64) B
65) A
66) D
67) A
68) A
69) C
70) C
71) C
72) C
73) D
74) A
75) C
76) A
77) B
78) D
79) A
80) D
81) C
82) A
83) D
84) B
85) A
86) B
87) A
88) D
89) A
90) A
91) C
92) A
93) B
94) A
95) D
96) A
97) D
98) D
99) A
100) A
101) A
102) B
103) A
104) B
105) A
106) B
107) C
108) B
109) D
110) C
111) A
112) B
113) B
114) C
115) A
116) A
117) B
118) C
119) C
120) C
121) A
122) B
123) C
124) B
125) A
126) D
127) 1. Work specialization this concept describes the degree to which tasks in an organization are divided into
separate jobs. The essence of work specialization is that an entire job is not done by one individual, but instead is
broken down into steps, with each step completed by a different person.
2. Departmentalization the basis by which jobs are grouped together is called departmentalization. The five
common forms of departmentalization include functional, product, geographical, process, and customer
departmentalization.
3 . Chain of command t h i s
i s t h e
c o n t i n u
o u s l i n e
o f
a u t h o r i
t y t h a t
e x t e n d s
f r o m
u p p e r
o r g a n i z
a t i o n a l
l e v e l s
t o t h e
l o w e s t
l e v e l s
a n d
c l a r i f i
e s w h o
r e p o r t s
t o w h o m .
I t h e l p s
e m p l o y e
e s u c h a s
s " W h o d o I
g o t o i f
a I h a v e a
n p r o b l e m
s ? " o r " T o
w w h o m a m I
e r e s p o n s
r i b l e ? "
4. Span of control this concept is important because, to a large degree, it determines the number of levels and
q managers an organization has. All things being equal, the wider or larger the span of control, the more efficient the
u organization.
e 5. Centralization and decentralization centralization describes the degree to which decision making is
s concentrated at a single point in the organization. If top managers make the organization's key decisions with little
t or no input from below, then the organization is centralized. In contrast, the more that lower-level employees
i provide input or actually make decisions, the more decentralization there is.
o 6. Formalization this refers to the degree to which jobs within the organization are standardized and the extent to
n which employee behavior is guided by rules and procedures. If a job is highly formalized, then the person doing
s that job has a minimum amount of discretion over what is to be done, when it's to be done, and how he or she could
do it.
128) 1. Functional departmentalization jobs are grouped by the functions performed (e.g. marketing, finance, human
resources). This approach can be used in all types of organizations, although the functions change to reflect the
organization's objectives and work activities.
2. Product departmentalization jobs are grouped by product line. In this approach, each major product area is
placed under the authority of a manager who's a specialist in, and is responsible for, everything having to do with
that product line.
3 . Geographical
departmentalization j o b s
a r e
g r o u p e d
o n t h e
b a s i s o f
a
t e r r i t o
r y o r
g e o g r a p
h i c
r e g i o n
s u c h a s
s o u t h e r
n ,
m i d w e s t
e r n , o r
n o r t h w e
s t e r n
r e g i o n s
f o r a n
o r g a n i z
a t i o n
o p e r a t i
n g o n l y
i n t h e
U a n y , f o r
n e x a m p l e
i i n U . S . ,
t E u r o p e a
e n ,
d C a n a d i a
n , a n d
S A s i a n -Pacific regions.
t 4 . Process
a departmentalization t h i s
t m e t h o d
e g r o u p s
s j o b s o n
; t h e
b a s i s o f
o p r o d u c t
r o r
c u s t o m e
f r f l o w .
o I n t h i s
r a p p r o a c
h , w o r k
a a c t i v i t
i e s
g f o l l o w a
l n a t u r a l
o p r o c e s s
b i n g f l o w
a o f
l p r o d u c t
o r e v e n
c c u s t o m e
o r s .
m 5. Customer departmentalization jobs are grouped on the basis of common customers who have common needs
p or problems that can best be met by having specialists for each.
129) Factors that increase Centralization
1. The environment is stable.
2. Lower-level managers are not as capable or experienced at making decisions as upper-level managers.
3. Lower-level managers do not want to have a say in decisions.
4. Decisions are relatively minor.
5. The organization is facing a crisis or the risk of company failure.
6. The company is large.
7. Effective implementation of company strategies depends on managers' retaining a say over what happens.

Factors that increase Decentralization

1. The environment is complex, uncertain.
2. Lower-level managers are capable and experienced at making decisions.
3. Lower-level managers want a voice in decisions.
4. Decisions are relatively significant.
5. The corporate culture is open to allowing managers to have a say in what happens.
6. The company is geographically dispersed.
7. Effective implementation of company strategies depends on managers' having involvement and flexibility to
make decisions.
130) 1. Strategy and structure an organization's structure should facilitate the achievement of goals. Since goals are
influenced by the organization's strategies, it's only logical that strategy and structure should be closely linked.
More specifically, structure should follow strategy. If managers significantly change the organization's strategy,
they will need to modify structure to accommodate and support the change.
2. Size and structure there's considerable evidence that an organization's size significantly affects its structure.
For instance, large organizations those with 2,000 or more employees tend to have more specialization,
departmentalization, centralization, and rules and regulations than do small organizations. However, the
relationship isn't linear. Rather, size affects structure at a decreasing rate; that is, size becomes less important as an
organization grows.
3. Technology and structure every organization has at least one form of technology to convert its inputs into
outputs. The processes or methods that transform an organization's inputs into outputs differ by their degree of
routineness. In general, the more routine the technology, the more standardized and mechanistic the structure can
be. Organizations with more nonroutine technology are more likely to have organic structures.
4. Environmental uncertainty and structure since uncertainty threatens an organization's effectiveness, managers
will try to minimize it. One way to reduce environmental uncertainty is through adjustments in the organization's
structure. The greater the uncertainty, the greater the need for the flexibility offered by an organic design. On the
other hand, in stable, simple environments, mechanistic designs tend to be most effective.
131) In designing a structure to support the most efficient and effective accomplishment of organizational goals,
managers often rely upon tried and true traditional organizational designs. These designs are: the simple structure,
functional structure, and divisional structure.
1. The simple structure is most often associated with small entrepreneurial ventures and is common among
organizations where the owner and manager are one and the same. Simple structures possess low
departmentalization, wide spans of control, authority centralized in a single person, and little formalization. As
firms grow, structure tends to become more specialized and formalized, departments and new levels of
management are created, and the firm takes on a more bureaucratic nature.
2. A functional structure is an organizational design that groups similar or related occupational specialties
together. It is a functional approach to departmentalization applied to the entire organization. For example,
organizing around the separate functions of operations, finance, human resources, marketing, and R&D.
3. Finally, the divisional structure is an organizational structure made up of separate business units or divisions.
In this design, each unit maintains limited autonomy with a division manager responsible for performance and
determining who has strategic and operational authority within the divisional unit. However, the parent
corporation still typically acts as an external overseer to coordinate and control the various divisions.
132) The matrix structure is an organizational structure that assigns specialists from different functional departments to
work on one or more projects being led by project managers. Each product is managed by an individual who staffs
his or her product team with people from each of the functional departments. The addition of this vertical
dimension to the traditional horizontal functional departments, in effect, "weaves together" elements of functional
and product departmentalization creating a matrix arrangement. One unique aspect of this design is that it creates a
dual chain of command, which violates the classical organizing principle of unity of command. Employees in a
matrix organization have two managers: their functional area manager and their product or project manager, who
share authority. The project managers have authority over the functional members who are part of their project
team in areas related to the project's goals. However, decisions such as promotions, salary recommendations, and
annual reviews typically remain the functional manager's responsibility. To work effectively, project and functional
managers have to communicate regularly, coordinate work demands on employees, and resolve conflicts together.
Although the matrix structure is an effective structural design choice for some organizations, many are using a
more "advanced" type of project structure, in which employees continuously work on projects. Unlike the matrix
structure, a project structure has no formal departments that employees return to at the completion of a project.
Instead, employees take their specific skills, abilities, and experiences to other projects. In addition, all work in
project structures is performed by teams of employees who become part of a project team because they have the
appropriate work skills and abilities. Project structures tend to be fluid and flexible organizational designs. There's
no departmentalization or rigid organizational hierarchy to slow down decision making or taking actions. In this
type of structure, managers serve as facilitators, mentors, and coaches. They "serve" the project teams by
eliminating or minimizing organizational obstacles and by ensuring that the teams have the resources they need to
effectefficiently complete their work. The advantages of matrix and project structures are that their fluid and flexible
ively design can respond to environmental changes and allows for faster decision making. The disadvantages are there is
and some complexity of assigning people to projects and there are task and personality conflicts.
133) Another approach to contemporary organizational design is the concept of a boundaryless organization, an
organization whose design is not defined by, or limited to, the horizontal, vertical, or external boundaries imposed
by a predefined structure. Although the idea of eliminating boundaries may seem odd, many of today's most
successful organizations are finding that they can operate most effectively by remaining flexible and unstructured:
that the ideal structure for them is not having a rigid, bounded, and predefined structure. There are two types:
internal boundaries (horizontal boundaries imposed by work specialization and departmentalization and the
vertical boundaries that separate employees into organizational levels and hierarchies) and external boundaries
(boundaries that separate the organization from its customers, suppliers, and other stakeholders). To minimize or
eliminate these boundaries, managers might use virtual or network structural designs. The advantages of a
boundaryless organization are that it is highly flexible and responsive and draws on talent wherever it is found.
The disadvantages are that there is a lack of control and it presents communication difficulties.
134) A learning organization is an organization that has developed the capacity to continuously learn, adapt, and
change. In a learning organization, employees continually acquire and share new knowledge and are willing to
apply that knowledge in making decisions or performing their work. Some organizational theorists even go so far
as to say that an organization's ability to do this that is, to learn and to apply that learning may be the only
sustainable source of competitive advantage. What structural aspects does a learning organization need? First, it's
critical for members in a learning organization to share information and collaborate on work activities throughout
the entire organization across different functional specialties and even at different organizational levels. To do this
requires minimal structural and physical barriers. In such a boundaryless environment, employees can work
together and collaborate in doing the organization's work the best way they can and learn from each other. Finally,
because of this need to collaborate, teams also tend to be an important feature of a learning organization's structural
design. Employees work in teams that are empowered to make decisions about doing whatever work needs to be
done or resolving issues. With empowered employees and teams, there's little need for "bosses" to direct and
control. Instead, managers serve as facilitators, supporters, and advocates.