Chapter 13 Organizational Structure
Chapter 13 Organizational Structure
Chapter 13 Organizational Structure
2) Terri is upset because tasks that previously were part of her job are now subdivided into separate
jobs as a result of recent reorganization. This is an example of
A) work specialization.
B) departmentalization.
C) infrastructure.
D) chain of command.
E) decentralization.
3) Now that Terri's tasks have been divided up to create separate jobs, the next step that her
organization took was to group these jobs together so that common tasks could be coordinated. This
is an example of
A) infrastructure.
B) decentralization.
C) centralization.
D) departmentalization.
E) chain of command.
4) Bob works for a manufacturer that has separate departments for engineering, accounting,
manufacturing, purchasing, and human resources. This is reflective of departmentalization by
A) product.
B) osmosis.
C) function.
D) service.
E) process.
5) Ted works for an aluminum tubing manufacturer that has separate departments for casting, press,
tubing, inspecting, and shipping. This is known as departmentalization by
A) osmosis.
B) product.
C) function.
D) process.
E) service.
6) Estee Lauder has a separate department for Clinique, Origins, and MAC such that each is operated
as a separate company. This is known as departmentalization by
A) osmosis.
B) product.
C) function.
D) process.
E) service.
7) The assignment of authority to another person to carry out specific duties and make the decisions
required to successfully complete those duties is known as
A) chain of command.
B) departmentalization.
C) work specialization.
D) delegation.
E) centralization.
8) Donna works in sales for an office supplies firm that has separate retail, wholesale, and
government departments. This is known as departmentalization by
A) geography.
B) service.
C) process.
D) customer.
E) function.
9) Raghib just started working for a new organization, and he asked the person training him "To
whom do I go if I have a problem?" Raghib wants to understand the company's
A) peer pressure.
B) organizational structure.
C) chain of command.
D) departmentalization.
E) centralization.
10) One of the best attributes of Francois in the eyes of his employees is that he gives them the
authority to carry out specific duties; this allows the employees to make some decisions on their own.
This is known as
A) passing the buck.
B) chain of command.
C) giving orders.
D) delegation.
E) groupthink.
11) After a recent reorganization, Steve's boss is wondering whether he has too many people
reporting to him. His boss is concerned about his
A) delegation.
B) span of control.
C) command and control.
D) motivation.
E) decentralization.
12) Daniella is frustrated after working for her new company for a few weeks. It is clear to her that,
unlike her past employer, upper management makes the decisions affecting her work. This is an
example of
A) specialization.
B) chain of command.
C) authority.
D) centralization.
E) decentralization.
13) The degree to which tasks are subdivided into separate jobs is termed
A) departmentalization.
B) formalization.
C) work specialization.
D) span of control.
E) task structure.
SCENARIO 13-1 You are developing a training manual that will assist managers in designing an
appropriate organizational structure for new organizations. You have included information and
references for all of the key questions that managers need to answer.
14) You suggest that one of the questions to be answered is "To what degree should tasks be
subdivided into separate jobs?" The answer to this question is provided by
A) formalization.
B) work specialization.
C) span of control.
D) chain of command.
E) work diversity.
15) The degree to which rules and regulations are used to direct employees and managers in their
work is termed
A) chain of command.
B) formalization.
C) span of control.
D) departmentalization.
E) division of labour.
16) You suggest that one of the questions to be answered is "On what basis should jobs be grouped
together?" The answer to this question is provided by
A) departmentalization.
B) work specialization.
C) centralization.
D) formalization.
E) decentralization.
17) Evidence indicates that work specialization contributes to higher employee productivity at the
price of
A) reduced job coordination.
B) increased job complexity.
C) increased job satisfaction.
D) reduced job satisfaction.
E) reduced creativity.
19) What sort of departmentalization sees companies create separate work groups based on different
types of goods?
A) product
B) process
C) geographic
D) functional
E) customer
20) A manufacturing manager who organizes the plant by separating engineering, accounting,
manufacturing, personnel, and purchasing into departments is practicing which type of
departmentalization?
A) customer
B) product
C) functional
D) geographic
E) process
21) Sun Petroleum Products departmentalizes by fuels, lubricants, and waxes and chemicals. This is
an example of departmentalization by
A) functions.
B) process.
C) customer.
D) product.
E) job design.
23) An office supply firm that has three departments to service retail, wholesale, and government
customers is practicing which type of departmentalization?
A) functional
B) customer
C) process
D) geographic
E) product
SCENARIO 13-2 You have divided the jobs done by your department through work specialization and
are now trying to decide how to best group them for efficiency and service to the customer. You are
considering grouping activities by functions, product, process or customer.
24) You have decided that since you are a novice at departmentalization, you will go with the most
popular method. You will probably choose which type of departmentalization?
A) function
B) product
C) process
D) customer
E) task
25) You find that there seem to be a common set of problems among certain types of buyers of your
product. To help resolve this problem, you should choose
A) function departmentalization.
B) product departmentalization.
C) process departmentalization.
D) customer departmentalization.
E) geographic departmentalization.
26) You are organizing into West Coast, Prairie/Northern, Ontario, Quebec, and Atlantic regions. This
is termed
A) process departmentalization.
B) customer departmentalization.
C) geographic departmentalization.
D) functional departmentalization.
E) technical departmentalization.
27) The unbroken line of authority that extends from the top of the organization to the lowest
echelon and clarifies who reports to whom is termed
A) chain of command.
B) authority.
C) power.
D) unity of command.
E) power and authority structure.
28) Which of the following refers to the number of subordinates a manager can efficiently and
effectively direct?
A) span of control
B) unity of command
C) chain of command
D) organizational chart
E) structure of command
29) If you have a narrow span of control, you have what type of organization?
A) multi-level
B) short
C) tall
D) matrix
E) wide
30) Which of the following is a drawback of a small span of control?
A) It reduces effectiveness.
B) It is more efficient.
C) It is expensive.
D) It empowers employees.
E) It encourages employee autonomy.
31) When a manager assigns some of their authority to another person to carry out specific duties,
allowing that employee to make some decisions, the process is called
A) chain of command.
B) span of control.
C) permissive environment.
D) discretionary powers.
E) delegation.
33) The degree to which decision making is distributed to lower-level employees is termed
A) centralization.
B) decentralization.
C) departmentalization.
D) work specialization.
E) task specialization.
35) The more that lower-level personnel provide input or are actually given the discretion to make
decisions, the more ________ there is.
A) centralization
B) decentralization
C) work specialization
D) departmentalization
E) functional specialization
42) Kim thinks that she is going to love working for her new company, as it is very informal with a lot
of cross-functional teams with members from different departments. This is an example of what kind
of structure?
A) mechanistic
B) flat
C) organic
D) transitional
E) hybrid
43) A structure that is flat, uses cross-functional teams, and has low formalization is known as
A) informal.
B) unstructured.
C) organic.
D) mechanistic.
E) amorphous.
44) Wazi feels very comfortable working for an organization that has a clear chain of command, a lot
of departmentalization , and a narrow span of control, as this suits his personality. This is an example
of what kind of structure?
A) mechanistic
B) flat
C) organic
D) transitional
E) hybrid
45) What is a major difference between a mechanistic model and an organic model?
A) One involves new products and services.
B) One has high formalization.
C) They vary greatly in organizational size.
D) One is for technological firms.
E) One is characteristic of the service industry.
46) Which of the following is uncharacteristic of a mechanistic structure?
A) extensive departmentalization
B) high formalization
C) limited information network
D) flexibility
E) little participation
48) If there are low formalization, a comprehensive information network and many participants in
decision making, one would expect
A) a bureaucracy.
B) a mechanistic structure.
C) an organic structure.
D) a stable structure.
E) a typical government organization.
51) Which of the following is characterized by a low degree of departmentalization, wide spans of
control, authority centralized in a single person, and little formalization?
A) bureaucracy
B) matrix organization
C) simple structure
D) team structure
E) mechanistic structure
52) Kara works for a company that has a flat organizational structure; authority is centralized in a
single person who has a wide span of control and authority. This is an example of what kind of
structure?
A) organic
B) simple
C) matrix
D) bureaucratic
E) hybrid
53) Luigi works for an advertising agency and the organizational structure is such that he has two
bosses; his direct boss is the manager of the department he is assigned to and his other boss is the
manager responsible for the new product that is his main focus. This is an example of what kind of
structure?
A) organic
B) simple
C) matrix
D) bureaucratic
E) hybrid
54) An organizational design that combines functional and product departmentalization is known as
A) matrix.
B) organic.
C) mechanistic.
D) hybrid.
E) bureaucratic.
57) An organizational structure characterized by highly routine operating tasks, very formalized
rules and regulations, narrow span of control, and centralized authority is known as a
A) simple structure.
B) team structure.
C) bureaucracy.
D) matrix.
E) virtual structure.
59) The structure that creates dual lines of authority and combines functional and product
departmentalization is the
A) simple structure.
B) bureaucracy.
C) matrix structure.
D) virtual organization.
E) organic structure.
SCENARIO 13-3 You are interested in explaining the different types of organizational designs to
students of basic management. These students need to know the advantages and disadvantages of
each structure as well as the structure's characteristics.
61) You have just described a structure that is flat, has little formalization and is fast, flexible, and
inexpensive to maintain. This is the
A) matrix structure.
B) simple structure.
C) bureaucracy.
D) team structure.
E) job enhancement structure.
62) You describe virtues of standardization. The structure that you are most likely describing is the
A) matrix structure.
B) simple structure.
C) bureaucracy.
D) team structure.
E) modular structure.
63) The structure that is used in hospitals, universities and entertainment companies is the
A) matrix structure.
B) simple structure.
C) bureaucracy.
D) team structure.
E) modular structure.
64) Which of the following problems is most likely to occur in a matrix structure?
A) decreased response to environmental change
B) decreased employee motivation
C) loss of economies of scale
D) employees receiving conflicting directives
E) decreased coordination efforts
65) A structure of evolving networks of independent companies linked together to share skills and
costs is called
A) virtual organization.
B) team.
C) boundaryless.
D) feminine organization.
E) modular.
66) Todd works for a manufacturer that outsources all of its production to another organization for
cost reasons. This is an example of what kind of organization?
A) team-based
B) hybrid
C) matrices
D) virtual
E) boundaryless
67) Don can't believe how progressive his new company is. It tries to eliminate the chain of
command, have limitless spans of control, and it replaces departments with empowered teams. This
is known as what type of organization?
A) virtual
B) hybrid
C) matrix
D) mechanistic
E) boundaryless
68)a small core organization that outsources major business functions is known as ___ organization.
A) matrix
B) virtual
C) organic
D) bureaucratic
E) mechanistic
69) Which organization is opposite to the typical bureaucracy that has many vertical levels of
management and where ownership of the means of production is an example of control?
A) virtual
B) team
C) boundaryless
D) matrix
E) matrices
70) If you wanted to outsource many of the functions that are currently performed within your
organization, which organizational structure would make the most sense?
A) matrix organization
B) virtual organization
C) team structure
D) organic structure
E) simple organization
71) An organization that seeks to eliminate the chain of command, have limitless spans of control and
replace departments with empowered teams is the
A) virtual organization.
B) boundaryless organization.
C) matrix organization.
D) team structure.
E) simple structure.
SCENARIO 13-4 After extensively researching both traditional and new design options for
organizational structures, you have decided that one of the designs developed since the early 1980s is
probably the most appropriate for your newly formed organization.
72) You wish to outsource many of the functions that are usually performed internally. You have
chosen to operate your business as a
A) matrix organization.
B) virtual organization.
C) team structure.
D) matrix structure.
E) simple organization.
73) Your new organization is looking to network with a variety of independent companies so that you
can share skills, costs and access to other markets. The most appropriate structure is probably
A) matrix organization.
B) virtual organization.
C) team structure.
D) matrix structure.
E) modular organization.
74) You have eliminated horizontal, vertical, and external barriers. You are operating as a
A) matrix organization.
B) virtual organization.
C) team structure.
D) boundaryless organization.
E) decentralized organization.
76) Which strategy emphasizes the introduction of major new products and services?
A) innovation
B) cost-minimization
C) imitation
D) organic
E) mechanistic
77) Which term refers to how an organization transfers its inputs to outputs?
A) technology
B) structure
C) strategy
D) environment
E) innovation
79) Lea's company pursues a strategy of cost minimization, but it has not been succeeding. Its
structure is quite loose, informal, and decentralized. A better organizational structure for it might be
A) organic.
B) matrix.
C) mechanistic.
D) imitation.
E) simple.
80) Emilio's company is very innovative and seeks to defeat its competition by introducing a steady
stream of new products. The best organizational structure for this company would likely be
A) organic.
B) matrix.
C) mechanistic.
D) imitation.
E) simple.
81) Quinton's company follows an imitation strategy; it only produces new products and moves into
new markets after their viability has already been proven. The best organizational structure for it
would likely be
A) organic.
B) matrix.
C) mechanistic.
D) mechanistic and organic.
E) simple.
82) If an environment is one that can support growth, it can be said that it has the ________ for growth.
A) capacity
B) volatility
C) complexity
D) technology
E) desire
84) Research tends to support that a wide span of control and the autonomy this provides to
employees, gives ________ employees ________ job satisfaction.
A) all, lower
B) most, lower
C) all, higher
D) most, higher
E) no, any
85) National culture does seem to influence the preference for structure; employees of high power-
distance cultures are more accepting of which type of structure?
A) mechanistic
B) organic
C) matrix
D) virtual
E) simple
2) It is very clear to Jake whom he has to speak within his organization to get approval for
expenditures that he want s to make. Thus, it can be said that there is a clear chain of command in
place.
3) Mike is frustrated because it seems that every decision that he wants to make has to be approved
by his boss' boss. Thus, it can be said that his organization is highly decentralized.
4) Managers need to address six key elements when they design their organization's structure: work
specialization, departmentalization, chain of command, span of control, centralization and
decentralization, and formalization.
5) The degree to which tasks in the organization are subdivided into separate jobs is referred to as
departmentalization.
6) Work specialization, when overutilized, results in employee boredom, stress and absenteeism.
7) There is fairly strong evidence linking work specialization to increased job satisfaction.
11) Process departmentalization can be used for processing products but has little application to
processing customers.
12) The assumption underlying customer departmentalization is that customers in each department
have a common set of problems or needs.
14) Span of control refers to the number of employees a manager can efficiently and effectively direct.
15) Flat organizational structures result from narrow spans of control.
16) Widening the span of control can make the organization flatter and less bureaucratic.
17) A review of the research indicates that there is no evidence to support a relationship between
span of control and employee performance.
18) Decentralized organizations tend to allow low-level personnel to make discretionary decisions.
19) In organizations with low levels of formalization, job behaviours are relatively non-programmed.
20) The less the specialization, the less input the employee has into how his or her work is to be
done.
21) Increase in the number of rules and regulations results in increased formalization.
24) The greater the formalization, the less discretion employees have over how their work is
accomplished.
26) The mechanistic model and the organic model are at opposite extremes on a continuum.
28) Edie is part of no fewer than six cross-functional teams at her company and she meets regularly
with all of them. It is likely that she works for a mechanistic organization.
29) Fiona is uncomfortable working for her new organization because she is not used to such a high
degree of formalization and centralization. It is likely that she is working for an organic organization.
31) McDonald's is an example of a company where employee routines are highly formalized.
32) The simple structure is fast, flexible, and inexpensive to maintain, and accountability is clear.
33) Joshua feels confused because he answers to his own boss as well as to another boss who is in
charge of one of the company's main products. He is likely working in a matrix structure.
34) Leroy is frustrated because he has to go through so much "red tape" just to get authorization to
buy a new stapler. It is likely that he is working for a bureaucratic organization.
35) One major strength of the simple structure is that it is easy to maintain in any size.
36) Larger organizations are developing structures with fewer layers of hierarchy and open
boundaries.
37)characteristic of a virtual organization are that it breaks down department barriers and
decentralizes decision making to the level of the work team.
38) Thad is concerned because his company is increasingly in the habit of outsourcing major
business functions. It is likely that the company is moving towards a virtual structure.
39) Justin's company is very progressive as it is a continually evolving network of independent
companies. It is likely that he is working for a virtual organization.
SCENARIO 13-5 You have decided to change your organization to a "boundaryless" organization
because you believe fewer barriers would increase efficiency and effectiveness.
40) You can expect to eliminate barriers within your organization, as well as breaking down barriers
to external constituencies and barriers created by geography.
42) An organization that tightly controls costs, refrains from incurring unnecessary innovation or
marketing expenses, and cuts prices in selling a basic product pursues a cost-minimization strategy.
44) Norma's company is keen to expand into the Australian market, but does not plan to do so until
other companies have proved the viability of the Australian market. This company is likely following
an imitation strategy.
45) The more scarce, dynamic and complex the environment, the more organic a structure should be.
2) Define and describe both the mechanistic and organic models of organizational design.
Answer: Suggested answer:
- The mechanistic model is a structure characterized by extensive departmentalization, high
formalization, a clear chain of command, narrow spans of control, limited information network, and
centralization. It is also marked by little participation for lower-level employees and downward
communication.
- The organic model is a structure that is flat; cross-hierarchical and cross-functional teams; has low
formalization; possesses a comprehensive information network; involves high participation in
decision making. High-tech firms use this since it utilizes collaboration.
3) Using examples, define and describe the advantages and disadvantages of the matrix structure of
organizational development.
Answer: Suggested answer:
- Definition—dual lines of authority; combines functional and product departmentalization; breaks
the unity-of-command concept.
- Advantages—puts together similar specialists and minimizes the number necessary; pooling and
sharing of specialized resources; facilitate coordination of a multiplicity of complex and
interdependent activities; reduces bureaucracy; achieves favourable economies of scale.
- Disadvantages—can create confusion; can foster power struggles, places stress on individuals;
ambiguity can be significantly increased; role conflict; unclear expectations; comfort of predictability
is absent(Examples can be drawn from text, class discussion, Internet, newspapers such as Globe and
Mail, etc.)
4) Using examples, define and describe the advantages and disadvantages of the boundaryless
organization.
Answer: Suggested answer:
- Definition—breaks down internal and external boundaries; eliminates vertical and horizontal
boundaries.
- Advantages—replaces departments with empowered teams; eliminates chain of command; sets up
limitless spans of control; minimizes status and rank; use of cross-hierarchical teams; participative
decision making; 360-degree performance appraisals; lateral transfers and rotation of people into
and out of different functional areas; specialists turned into generalists; customers perform functions
previously done by management; common technological thread can be established to share
information simultaneously; offers quicker response time; enhances cooperation across functions,
divisions and external groups.
- Disadvantages—difficult to manage; difficult to overcome political and authority boundaries; time-
consuming.(Examples can be drawn from text, class discussion, Internet, newspapers such as Globe
and Mail, etc.)
5) List and describe three strategy dimensions of organizations which shape organizational structure.
Answer:
1. Innovation — emphasizes the introduction of major new products and services.
2. Cost-minimization — emphasizes tight cost controls, avoidance of unnecessary innovation or
marketing expenses, and price cutting.
3. Imitation — emphasizes moving into new products and markets but only after their viability has
been proven.