Chapter 8 - Structuring Organizations for Today's Challenges

The concept that states all workers should know to whom they report and that managers have the right to give orders is referred to as the ______________ of ____________________ .

Hierarchy of authority

What is organizational culture?

Organizational (or corporate) culture consists of the widely shared values within an organization that foster unity and cooperation to achieve common goals.

What is happening today to American businesses?

They are adjusting to changing markets. That is a normal function in a capitalist economy. There will be big winners, like Google and Facebook, and big losers as well. The key to success is remaining flexible and adapting to the changing times.

Adapting to change is difficult because over time employees get stuck in their ways and are comfortable.

True

What principles did Weber add?

Weber added principles of bureaucracy such as job descriptions, written rules and decision guidelines, consistent procedures, and staffing and promotions based on qualifications.

Line managers are those who have the authority to:

adjust to changing conditions enforce discipline issue orders

Cross-functional self-managed teams are used in organizations to

break down barriers between functional departments

A(n) _________________ organization structure maintains the decision-making authority at the top level of management.

centralized

Groups of employees from different departments who work together on a long-term basis and are empowered to make decisions without management approval are:

cross-functional self-managed teams

By developing , a company can reduce its production costs if it can purchase raw materials in bulk; the average cost of goods goes down as production levels increase.

economics of sale

A cross-functional team that includes customers, suppliers, and distributors is:

going beyond organizational boundaries

A system in which one person is at the top of the organization and there is a ranked or sequential ordering from the top down of managers who are responsible to that person is called a(n)

hierarchy

A benefit of the unity of command principle is:

it prevents confusion since each employee reports to one manager

According to Fayol, division of labor states that functions within an organization are to be divided into areas of

specialization

In a virtual corporation the replaceable firms are joined together on a(n) _________________ basis to create a flexible organization.

temporary

Identify the principles of Henri Fayol's book General and Industrial Management from the following list.

-Division of labor -Hierarchy of authority -Unity of command

The result of the increase in the rate of change in the business environment from causes such as natural disasters and global competition has been that companies must:

-change more quickly than ever before -adapt to new technologies

Regardless of the size of the organization, the principles of organizing include:

-dividing up the tasks to be done -a hierarchy of authority -deciding what work needs to be done

According to Fayol, the _____________ of ______________ principle states that functions are to be divided into areas of specialization.

Blank 1: division Blank 2: labor

The present moment or the actual time in which something takes place is called

Blank 1: real Blank 2: time

According to Fayol's equity principle, a manager should treat employees and peers with __________ and ______________ .

Blank 1: respect Blank 2: justice or fairness

What are the four major choices in structuring organizations?

Choices to make in structuring and restructuring organizations cover (1) centralization v decentralization, (2) breath of span of control, (3) tall v flat organizational structures, and (4) type of departmentalization

When designing responsive organizations, what decisions do firms have to make?

Decide between centralization versus decentralization Decide the span of control Choose between tall or flat structures

What are the latest trends in structuring?

Departments are often replaced or supplemented by matrix organizations and cross-functional teams that decentralize authority. The span of control becomes larger as employees become self-directed. Another trend is to eliminate managers and flatten organizations.

Functions being divided into areas of specialization such as production, marketing, and finance are examples of which Fayol principle?

Division of labor

Which of Fayol's principles states that a manager should treat employees and peers with respect and justice?

Equity

Under which Fayol principle does it state that all workers should know to whom they report?

Hierarchy of authority

What are the key alternatives to the major organizational models?

Matrix organizations assign people to projects temporarily and encourage interorganizational cooperation and teamwork. Cross-functional self-managed teams have all the benefits of the matrix style and are long term.

Identify the four ways to structure an organization.

Matrix-style organizations Cross-functional self-managed teams Line-and-staff organizations Line organizations

Which is a true statement about the principles of organization?

Regardless of the business size the principles are similar.

What is the difference between the formal and informal organization of a firm?

The formal organization details line of responsibility, authority, and position. It's the structure shown on organization charts. The informal organization is the system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority outside the formal organization. It's the human side of the organization. The informal organization is an invaluable managerial asset that often promotes harmony among workers and establishes the corporate culture. As effective as the informal organization may be in creating group cooperation, it can still be equally powerful in resisting management directives.

A Fayol principle that states each worker is to report to one and only one boss.

Unity of Command

An organization structure in which decision-making authority is maintained at the top level of management is called a(n) ______ organization.

centralized

As organizations adopt empowerment, reduce the number of middle managers, and hire more talented and better educated lower-level employees the trend today is to Blank______ the span of control.

expand

Firms may use a combination of departmentalization techniques to create a(n) _______________ form of organization.

hybrid

Some companies create structures because the sales department has geographic departments, production is organized by function, and marketing is organized by customer groups.

hybrid

Methods of structuring organizations to produce large amounts of goods is

mass production

A large organization might use a flat organization structure in order to:

match the flexibility of small firms

According to Fayol's order principle, ______ and ______ should be placed and maintained in the proper location.

materials; people

Four organizational designs include: line, line and staff, ______, and cross-functional teams.

matrix

In a ______________ organization, project managers are in charge of teams made up of members from several departments.

matrix

Under unity of command, each worker is to report to only ____ boss.

one

Which of Fayol's principles states that materials and people should be placed and maintained in the proper location:

order

The present moment or the actual time in which an event takes place is called

real time

Organizations reorganize to empower frontline workers to:

serve customers more efficiently and effectively demonstrate appreciation and trust to frontline workers let them know they are valuable assets to the organization

A temporarily networked organization made up of replaceable firms that join and leave as needed is called a(n) __________ organization.

virtual

What is an inverted organization?

An inverted organization places employees at the top of the hierarchy; managers are at the bottom to train and assist employees.

The formal organization details lines of:

Authority, position, and responsibility

The principles of bureaucracy which brought consistent application of rules and procedures to organizations were proposed by

Blank 1: Max Blank 2: Weber

Remaining ______ is the key to an organization's success in changing times.

flexible

The structure that details lines of responsibility, authority, and position that represents different types of organizational design is known as a organization.

formal

What are the 2 major organizational models?

Two traditional forms of organization are (1) line organizations and (2) line and staff organizations. A line organization has clearly defined responsibility and authority, is easy to understand, and provides each worker with only one supervisor. The expert advice of staff assistants in a line and staff organization helps in areas such as safety, quality control, computer technology, human resource management, and investing.

Many organizations have reorganized to make ______________ workers their most important people.

frontline

Under unity of command, each worker is to report to only ______ boss.

one

Henri Fayol's principles for organization structure included:

-a hierarchy of authority -unity of command -managers can enforce their orders

The key to success for companies in a capitalist economy is to remain inflexible during times of change.

False

What were Fayol's basic principles?

Fayol introduced principles such as unity of command, hierarchy of authority, division of labor, subordination of individual interests to the general interest, authority, clear communication channels, order, and equity.

What are the major concepts involved in interfirm communications?

Networking uses communications technology and other means to link organizations and allow them to work together on common objectives. A virtual corporation is a networked organization of replaceable firms that join and leave as needed. Benchmarking tells firms how their performance measures up to that of their competitors om specific functions. The company may then outsource to companies that perform its weaker functions more effectively and efficiently. The functions that are left are the firm's core competencies.

What are the principles of organizational management?

Structuring an organization means devising a division of labor (sometimes resulting in specialization), setting up teams or departments, and assigning responsibility and authority. It includes allocating resources (such as funds), assigning specific tasks, and establishing procedures for accomplishing the organizational objectives. Managers also have to make ethical decisions about how to treat workers.

When businesses evolved into larger organizations producing larger amounts of product more efficiently using mass production methods, it could be said that:

the bigger the plant, the more efficient production became

Max Weber's principles of organization resembled Fayol's. In addition, Weber emphasized which of the following principles?

-Consistent procedures, regulations, and policies -Job descriptions -Written rules, decision guidelines, and detailed records

An advantage of a organization structure is that lower level employees have authority to respond more quickly to customer needs.

flat

Those directly responsible for achieving the organization's production goals by issuing orders and enforcing discipline are ______ managers.

line

Less need for policy manuals, organization charts, and formal controls is a sign of shared values in a:

corporate culture that emphasizes service to others

In addition to unity of command, hierarchy of authority, and division of labor, Henri Fayol's organizational principles included ________ of ____________ interests.

Blank 1: subordination Blank 2: individual

The principle of organizational structure where one person is at the top and the other managers are ranked sequentially from the top down is called:

hierarchy

An advantage of a ____________ organization structure is that lower level employees have authority to respond more quickly to customer needs.

flat

An organization that has direct two-way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with all people reporting to only one supervisor is called a(n)

Blank 1: line Blank 2: structure or organization

Why is adapting to change one of the hardest challenges facing any manager?

Employees and managers are sometimes resistant to change.

Using communications technology and other means to link organizations and allow them to work together on common objectives is referred to as

networking

The line organization has direct lines of Blank______ that extend from the top manager to employees at the lowest level of the organization.

communication responsibility authority

Innovations like the mass production of cars can create economies of scale. However, over time this benefit becomes less meaningful because:

other companies copy the processes

Networking uses technology, such as a company intranet, to link organizations and their suppliers to allow them to work together for a common goal.

True

A productive corporate culture is one where there is mutual

trust

If an organization temporarily borrows its specialists from different functional areas to accomplish a common project, it is implementing what type of organization?

Matrix organization

Economies of scale work best in a company that makes large quantities of goods using ______ ________ processes.

mass production

A cross-functional team that is working on the development of a new prosthetic device for amputees should include:

parts suppliers for medical devices amputees who will use it product designers

Managing ______ has become a critical managerial function because the increasing rate of change affects all organizations.

change

The ______ organization details lines of responsibility, authority, and position. It is the structure shown on organization charts.

formal

The type of organization that has direct two-way lines of responsibility, authority, and communication from the top down, with everyone reporting to one supervisor is called a:

line organization

Important decisions to be made while designing an organization include:

span of control departmentalization degree of centralization

The hierarchy of authority principle states that all workers should know to whom they report.

True

Today's trend is to expand the span of control because:

organizations save by reducing the number of middle managers the workforce is better educated at all levels

When each worker is to report to only one boss, it is an example of which Fayol principle?

unity of command

When a company purchases raw materials in bulk, thus reducing the cost of production, it is called:

economies of scale

Advantages of a positive corporate culture include:

emphasizing service to others, especially customers people who enjoy working together to be productive trust between employees