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Exam 8: Structuring Organizations for Todays Challenges

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Question 111

Multiple Choice

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The concept of ____________ suggests that as a firm produces more, the average cost of goods produced goes down

A) natural growth
B) survival of the fittest
C) cost enhancement
D) economies of scale

E) None of the above
F) B) and C)

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Question 112

Multiple Choice

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As the head of the engineering department for her company, Jody works with her team on complex and challenging projects. The level of detail in this work requires Jody to spend a significant amount of time with each team member, providing advice and support. Due to the complexity and time involvement of each project, Jody has a(n) ________ span of control

A) wide
B) narrow
C) unlimited
D) functional

E) C) and D)
F) B) and C)

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Question 113

True/False

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The informal organization appears as dashed lines on a firm's organizational chart.

Organization theorists emerged during the era of mass production, meaning:

Organizations that utilize functional departmentalization benefit from improved communication between departments.

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

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. -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

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:

One key to organizational success is to go back to basic principles and build the business on a sound foundation.

Young people today are often called __________ because they have never known life without the Internet

In a(n) _____________ organization, decision-making authority is concentrated at the top level of management

Organizational culture can produce either a positive or negative impact on an organization.

Staff personnel perform functions such as production and sales that contribute directly to the primary goals of the organization.

Eileen works in the human resources department of a corporation with several hundred employees. Her main function is to advise and assist managers in other departments, such as marketing and production, when they make staffing decisions. Eileen's position would be classified as a(n) ___________ position

Julio is the owner of Celebration, Inc., a small party supply company. The company provides tents, tables, chairs, and related paraphernalia for wedding, Bar Mitzvah, Bat Mitzvah, graduation, birthday, and other celebratory events. As sales have increased, the organization has hired more personnel and departmentalized to more efficiently handle purchasing, sales, service, and accounting. Everyone is still responsible for achieving company goals. Upon seeing Celebration's organization chart, you agree it uses a line organization model.

________ refers to the process of dividing organizational functions (sales, production, accounting/bookkeeping) into separate units

Assigning various functions that a firm might do for itself to outside organizations is known as competitive allocation.

Jack just learned that several people in Arizona became ill from the peanut butter that was produced and jarred in his plant. As he walks the back stairs at the plant, he ponders, "It's time to get the informal organization in on this. We've got to stop this in its tracks!" Jack is taking the right approach to solving this serious problem.

Inverted organizations define the role of front-line employees as those workers who follow the orders of top and middle management.

Fayol believed that the amount of decision-making power vested in top management should be the same in all situations.