OA 1

Which of the following statements is true regarding a divisional manager? A) A divisional manager is not a corporate manager. B) Divisional managers act as outside directors for the company. C) A marketing manager is an example of a divisional manager. D) A divisional manager is a part of the top-management team.

A) A divisional manager is not a corporate manager.

________ is a management approach in which the design of an organization's structure is tailored to the sources of uncertainty facing an organization. A) Contingency approach B) Specialized approach C) Mechanistic approach D) Standardized approach

A) Contingency approach

Which of the following terms best describes the system of hierarchical reporting relationships in an organization? A) chain of command B) matrix of hierarchy C) span of authority D) line of control

A) chain of command

Organizational culture ________. A) controls organizational members' interactions with each other B) is the formal system of task and authority relationships C) remains the same once it is developed D) is shaped primarily by an organization's environment

A) controls organizational members' interactions with each other

When a company decides to produce different products for different customers, ________. A) environmental complexity increases B) environmental stability increases C) the organizational domain decreases D) the number of stakeholders decreases

A) environmental complexity increases

An organization that has few levels in its hierarchy relative to its size is known as a ________ organization. A) flat B) tall C) formalized D) standardized

A) flat

14. Which of the following goals set by an organization to measure effectiveness indicates that it is using the internal systems approach to measure organizational effectiveness? A) increase rate of product innovation B) improve customer service C) increase stock price D) lower costs of inputs

A) increase rate of product innovation

Which of the following is one of the ways in which an organization can avoid becoming too tall yet maintain effective control of its workforce? A) increasing its managers' span of control B) conducting 360 degrees appraisal of the employees C) increasing the number of levels in the hierarchy D) encouraging upward communication but discouraging downward communication

A) increasing its managers' span of control

16. Top management's ability to perceive and respond to changes in the environment or to initiate change and be first to take advantage of a new opportunity indicates the effectiveness of the organization as per the ________ approach. A) internal systems B) external resource C) transactional D) technical

A) internal systems

53. The specific environment consists of forces from ________. A) outside stakeholder groups that directly affect an organization's ability to secure resources B) general environment that directly affect an organization's human resource practices C) inside stakeholder groups that directly affect an organization's structure D) inside stakeholder groups that directly affect an organization's competitive strategies

A) outside stakeholder groups that directly affect an organization's ability to secure resources

A son of a mobster believes that it is ethical to steal if it is in the best interest of his family. This view comes from ________. A) personal ethics B) professional ethics C) moral rights model of ethics D) justice model of ethics

A) personal ethics

A joint venture is a type of ________. A) strategic alliance B) takeover C) cartel D) collusion

A) strategic alliance

Which of the following functions facilitate an organization's control of its relations with its environment and stakeholders? A) support functions B) adaptive functions C) managerial functions D) production functions

A) support functions

An organization in which the hierarchy has many levels relative to the size of the organization is a(n) ________ organization. A) tall B) flat C) organic D) decentralized

A) tall

13. In order to measure organizational effectiveness, an organization uses indicators such as number of defective products and cost of production. These indicators show that the organization is using the ________ approach to measure organizational effectiveness. A) technical B) internal systems C) transactional D) external resource

A) technical

Which of the following is a typical characteristic of a boundaryless organization? A) use of electronic means to connect people B) lack of organizational flexibility C) presence of tall organizational hierarchy D) use of a functional structure

A) use of electronic means to connect people

Which of the following statements is true according to Weber's principles of bureaucratic structure? A) Classroom training should be given to all the employees to improve their theoretical knowledge. B) A role's task responsibility and decision-making authority should be clearly specified. C) In a stable environment, an organization should use a centralized organizational structure with narrow spans of control. D) A 360 degrees appraisal should be conducted for all the employees at least twice a year.

B) A role's task responsibility and decision-making authority should be clearly specified.

________ refers to the way in which an organization groups organizational tasks into roles and roles into subunits. A) Vertical integration B) Horizontal differentiation C) Horizontal integration D) Vertical differentiation

B) Horizontal differentiation

________ structures promote flexibility, so people initiate change and can adapt quickly to changing conditions. A) Mechanistic B) Organic C) Standardized D) Centralized

B) Organic

As per the ________ Act, CEOs, COOs, and the chief financial officer are required to sign off on their company's balance statements so they can be held personally and legally liable for accidental or deliberate mistakes found later. A) Taft-Hartley B) Sarbanes-Oxley C) Walsh-Healey D) Davis-bacon

B) Sarbanes-Oxley

________ are people who have an interest or claim in an organization, in what it does, and in how well it performs. A) Boundary spanners B) Stakeholders C) Early adopters D) Late adopters

B) Stakeholders

An organization used to obtain supplies from 3,000 suppliers, but now deals with less than 300. By making this change, the organization has reduced its environmental ________. A) richness B) complexity C) dynamism D) depth

B) complexity

Which of the following actions most likely enables even a relatively tall structure to be more flexible in its responses to changes in the external environment? A) increasing the specialization and division of labor B) decentralizing authority C) increasing vertical differentiation D) promoting downward communication and discouraging upward communication

B) decentralizing authority

A(n) ________ is a classification of people in an organization according to authority and rank. A) orientation B) hierarchy C) architecture D) culture

B) hierarchy

In effect, ________ are the agents or employees of shareholders. A) unions B) managers C) customers D) suppliers

B) managers

A ________ structure provides for more integration between corporate and divisional managers and between divisional managers. A) bureaucratic B) multidivisional matrix C) transactional D) functional

B) multidivisional matrix

51. The term ________ refers to the particular range of goods and services that the organization produces, and the customers and other stakeholders it serves. A) organizational richness B) organizational domain C) organizational design D) organizational structure

B) organizational domain

A ________ structure is commonly used by food processors, furniture makers, and companies that make personal care products, paper products, or other products that are broadly similar and use the same set of support functions. A) multidivisional B) product team C) Market D) product division

B) product team

Which of the following groups of stakeholders receives inducements in the form of dividends and stock appreciation? A) workforce B) shareholders C) trade unions D) suppliers

B) shareholders

Which of the following situations causes communication problems within an organization that uses functional structure? A) the organization uses the system of management by objectives B) the organization develops more functions that are increasingly distant from one another C) the organization operates in a rich environment D) the organization operates in a stable environment

B) the organization develops more functions that are increasingly distant from one another

A market structure organizes people according to ________. A) the skills of the people B) the types of customers they serve C) the functions they perform D) the regional markets they serve

B) the types of customers they serve

________ goals are guiding principles that the organization formally states in its annual report and in other public documents. A) Profit B) Tactical C) Official D) Operative

C) Official

Which of the following managers has a staff role? A) assembly line supervisor B) divisional manager C) R&D manager D) production manager

C) R&D manager

Which of the following terms refers to a form of organizational structure in which people can be held accountable for their actions because they are required to act in accordance with well-specified and agreed-upon rules and standard operating procedures? A) a matrix organization B) an autocracy C) a bureaucracy D) an organic organization

C) a bureaucracy

Bob and Amy are simply instructed to attract new clients, but are not given specific guidelines regarding how to accomplish this goal. Because they work for a conservative company, they are afraid to take risks. Bob and Amy are experiencing a role ________. A) conflict B) divergence C) ambiguity D) contravention

C) ambiguity

Role ________ occurs when two or more people have different views of what another person should do, and as a result, make opposing demands on the person. A) divergence B) ambiguity C) conflict D) contravention

C) conflict

According to contingency theory, in order to manage its environment effectively, an organization should ________. A) limit the extent of internal differentiation and integration B) concentrate all authority within the top-management level C) design its internal structure to control the external environment D) use mechanistic structures to make organizational decisions

C) design its internal structure to control the external environment

Usually, Sales has a relatively ________ hierarchy because supervisors use ________. A) flat; centralization B) tall; centralization C) flat; standardization D) tall; standardization

C) flat; standardization

Which of the following would be considered to be the lowest level of management in a chain of command? A) divisional managers B) executive vice presidents C) functional managers D) vice presidents

C) functional managers

Because controlling the production of many different foods within the same manufacturing unit proved to be difficult and resulted in increasing costs, a packaged food manufacturer created separate product divisions that make frozen vegetables, frozen entrees, canned soups, and baked goods. This design decision will ________ within the organization. A) increase vertical differentiation B) decrease vertical differentiation C) increase horizontal differentiation D) decrease horizontal differentiation

C) increase horizontal differentiation

If an organization is using the technical approach to measure organizational effectiveness then it will attempt to ________ to increase the effectiveness of the organization. A) increase coordination and motivation of employees B) lower costs of inputs C) increase product quality D) increase stock price

C) increase product quality

Which of the following will allow managers to regain control of their organizations when they decide to adopt a more complex structure? A) decreasing integration B) increasing formalization C) increasing horizontal differentiation D) decreasing vertical differentiation

C) increasing horizontal differentiation

Organic structures are characterized by ________. A) centralized organizational structures B) high levels of standardization C) loosely defined organizational roles D) predictable work processes

C) loosely defined organizational roles

According to the capitalistic view, the primary goal of an organization is to ________. A) satisfy customers B) satisfy employees C) maximize shareholder wealth D) form long-term relationships with suppliers

C) maximize shareholder wealth

A corporate headquarters staff is created in a ________ structure. A) product division B) matrix C) multidivisional D) product team

C) multidivisional

According to the study conducted by Lawrence and Lorsch, an organization functioning in a highly unstable environment was most effective when it ________. A) concentrated decision-making authority at the top-management level B) incorporated high levels of organizational integration C) relied more on mutual adjustment between subunits D) used rules and SOPs extensively to coordinate tasks

C) relied more on mutual adjustment between subunits

Which of the following is an inside stakeholder group? A) suppliers B) customers C) shareholders D) government

C) shareholders

Which of the following is generally used to solve agency problems? A) a highly centralized organization structure B) self-dealing C) stock-based compensation schemes D) a matrix organization structure

C) stock-based compensation schemes

Which of the following group of outside stakeholders contributes high-quality inputs? A) unions B) government C) suppliers D) customers

C) suppliers

As compared to other organizational structures, an advantage of a multidivisional structure is that ________. A) it is the least expensive to operate B) the communication problems are least likely to occur in a multidivisional structure C) the division of labor increases organizational effectiveness D) the duplication of organizational activities is avoided

C) the division of labor increases organizational effectiveness

Which of the following is the most direct effect of decentralization? A) the specific environment of the organization gets stabilized B) the flexibility of the organization decreases C) the monitoring burden on top managers is reduced D) the time required to make decisions increases

C) the monitoring burden on top managers is reduced

A disadvantage of centralization is that ________. A) the extent of standardization is reduced within the organization B) coordination becomes difficult to achieve within the organization C) the top managers have little time for long-term strategic decision-making D) the organization tends to lose its focus on achieving its goals

C) the top managers have little time for long-term strategic decision-making

________ is the process by which people recognize opportunities to satisfy needs and then gather and use resources to meet those needs. A) Moonlighting B) Social loafing C)Entrepreneurship D) Benchmarking

C. ENTREPRENUERSHIP

Which of the following statements is true regarding a network organization? A) An organization using a network structure experiences high beureaucratic costs. B) The organizations that use network structures have the tallest hierarchies. C) A network structure is characterized by high production costs. D) A network structure allows an organization to act in an organic way.

D) A network structure allows an organization to act in an organic way.

________ functions allow an organization to adjust to changes in the environment. A) Support B) Maintenance C) Production D) Adaptive

D) Adaptive

________ functions facilitate the control and coordination of activities within and among departments. A) Maintenance B) Adaptive C) Support D) Managerial

D) Managerial

According to the principle of minimum chain of command, ________. A) managers seek to increase the number of their subordinates so as to improve their status in the organization B) an increase in the number of hierarchical levels leads to an increase in the bureaucratic costs C) the use of functional organizational structure improves the speed of decision-making D) an organization should be kept as flat as possible

D) an organization should be kept as flat as possible

In the long run, an organization that follows unethical practices is most likely to ________. A) be more innovative B) spend less on advertising or managerial salaries C) spend more on research and development D) be bureaucratized

D) be bureaucratized

Weber's principles can help a CEO with his or her responsibility for ________. A) determining the goals of an organization B) allocating resources to divisions C) selecting the top-management team D) designing the organizational hierarchy

D) designing the organizational hierarchy

A(n) ________ structure has functions grouped together according to the specific demands of products, markets, or customers. A) differentiated B) concurrent C) functional D) divisional

D) divisional

A ________ structure is a design that groups people together on the basis of their common expertise and experience or because they use the same resources. A) divisional B) product C) team D) functional

D) functional

McDonald's is trying to determine whether it should make its own fast-food containers or buy them from international suppliers. This decision is a part of the ________ management. A) symbiotic interdependency B) competitive interdependency C) structural environment D) global supply chain

D) global supply chain

15. Which of the following is an example of an official goal? A) increase product quality B) reduce delivery time to customer C) become a leading producer of a product D) increase market share

D) increase market share

Which of the following refers to the integration mechanism where a new team of managers is created to coordinate the activities of functions or divisions? A) hierarchy of authority B) task force C) direct contact D) integrating department

D) integrating department

A firm hires a supervisor to handle the communication between two functions. Which of the following integrating mechanisms is used in this case? A) direct contact B) task force C) integrating department D) integrating role

D) integrating role

Which of the following is an organizational design that groups people and resources in two ways simultaneously: by function and by product? A) geographic structure B) product team structure C) market structure D) matrix structure

D) matrix structure

According to the study conducted by Tom Burns and G. M. Stalker, an organization functioning in a stable environment should have ________. A) decentralized decision-making procedures B) high levels of differentiation C) high levels of integration D) mechanistic organizational structure

D) mechanistic organizational structure

A ________ structure is a structure in which support functions are placed in self-contained divisions. A) product division B) market C) functional D) multidivisional

D) multidivisional

A defense company decided to sell the services of its scientists to commercial clients. This company is changing its ________. A) core competences B) competitive interdependencies C) symbiotic interdependencies D) organizational domain

D) organizational domain

Moving of a value creation activity that was done inside the organization to the outside, where it is done by another company is known as ________. A) networking B) mechanizing C) decentralizing D) outsourcing

D) outsourcing

Which of the following structures is most likely to be selected by an organization whose products are very complex technologically or whose characteristics change rapidly to suit changing customer needs? A) geographic divisional structure B) functional structure C) multidivisional structure D) product team structure

D) product team structure

An advantage of decentralization is that it ________. A) simplifies the coordination process within an organization B) ensures formalization of procedures and policies within an organization C) keeps the organization focused on achieving its goals D) promotes flexibility and responsiveness within an organization

D) promotes flexibility and responsiveness within an organization

Which of the following goals is most likely to be set by an organization to measure effectiveness if it is using the technical approach to measure organizational effectiveness? A) increase market share B) increase rate of product innovation C) lower costs of input D) reduce production cost

D) reduce production cost

Bureaucracy ________. A) increases transaction costs B) hinders a company's ability to compete in the marketplace against other organizations for scarce resources C) hinders integration within the organization D) separates the position from the person

D) separates the position from the person

The stakeholder group with ultimate authority over the use of a corporation's resources is ________. A) government B) customers C) managers D) shareholders

D) shareholders

An organization's environment will be more uncertain when ________. A) the company decreases the number of products it manufactures B) the number of stakeholders in the specific environment decreases C) the company begins to follow the cost leadership strategy D) specific and general forces in the environment become interconnected

D) specific and general forces in the environment become interconnected

. Which of the following is an outside stakeholder group? A) shareholders B) managers C) workforce D) suppliers

D) suppliers

Which of the following is most likely to increase the environmental complexity for a company? A) the company changes its organizational structure from divisional to functional B) the company decreases its number of suppliers C) the company changes its organizational structure from centralized to decentralized D) the company diversifies its business in an entirely new industry

D) the company diversifies its business in an entirely new industry

Rate-busters are employees who ________. A) work too slowly B) break the formal rules C) follow the group norms D) work too quickly

D) work too quickly

20. The workforce and managers are considered outside stakeholders.

FALSE

21. All stakeholder groups are equally important for an organization.

FALSE

22. An inside director of a company can be a professional director who holds positions on the boards of many companies.

FALSE

23. The chief operating officer, functional managers, and divisional managers form a company's top management team.

FALSE

43. Economic forces, such as interest rates, are considered to be specific environmental forces rather than a general environmental forces.

FALSE

44. One way to reduce uncertainty is to increase the number of specific and general environmental forces that are interconnected. Because, when forces begin to interact, the environment becomes more predictable.

FALSE

45. As a company begins to produce a wider variety of products for different groups of customers, its environmental complexity goes on decreasing.

FALSE

48. Environmental richness is a function of how much and how quickly forces in the specific and general environments change over time and thus increase the uncertainty an organization faces.

FALSE

50. Cartels and collusion increase the stability and richness of an organization's environment and reduce the complexity of relations among competitors.

FALSE

A divisional structure is a design that groups people into separate functions or departments because they share common skills and expertise because they make use of the same resources.

FALSE

An organization can reduce environmental uncertainty by entering into global markets

FALSE

Formalization is more appropriate in environments that require high levels of mutual adjustment

FALSE

Organizational theory is primarily concerned with how an organization can outperform its competitors.

FALSE

Role ambiguity occurs when two or more people have different views of what another person should do and, as a result, make conflicting demands on the person.

FALSE

Value creation by an organization takes place at three stages: input, conversion, and output. Out of these three stages, only the conversion stage is affected by the environment in which the organization operates.

FALSE

When each employee performs only a small part of a total task, identifying the employees individual contribution to the task becomes easy

FALSE

19. Shareholders are a part of inside stakeholders.

TRUE

41. The term organizational domain refers to the particular range of goods and services that the organization produces, and the customers and other stakeholders it serves.

TRUE

42. Global supply chain management is the process of coordinating the flow of raw materials, components, semifinished goods, and finished products around the world.

TRUE

47. In a rich, stable, and simple environment, resources are easy to come by and uncertainty is low.

TRUE

49. Symbiotic and competitive interdependencies exist in the specific environment.

TRUE

An increase in the horizontal differentiation leads to an increase in the vertical differentiation.

TRUE

An organization is a tool people use to coordinate their actions to obtain something they desire or value.

TRUE

Entrepreneurship is the process by which people recognize opportunities to satisfy needs and then gather and use resources to meet those needs.

TRUE

Horizontal differentiation leads to the emergence of specialized subunits—functions or divisions.

TRUE

In a product division structure, a centralized set of support functions services the needs of a number of different product lines.

TRUE

Multidivisional structures tend to be the tallest of all organizational structures.

TRUE

Organizations are very status conscious in mechanistic structures.

TRUE

Organizations die or are transformed when the needs satisfied by them are no longer important.

TRUE

Subunit orientation is the tendency to view one's role in the organization strictly from the perspective of the time frame, goals, and interpersonal orientations of one's subunit.

TRUE

The shape of an organization, depicted by its organizational chart, determines how effectively the organization's decision-making and communication systems work.

TRUE

Weber's first principle indicates that choices affecting the design of an organization's hierarchy should be based on the needs of the task, not on the needs of the person performing the task.

TRUE

________ determines how much value is created at the conversion stage. A) The way an organization uses human resources and technology to transform inputs into outputs B) The feedback received by an organization from its customers about its products or services C) The way an organization chooses and obtains the inputs it needs to produce goods and services from its environment D) The method used by an organization to sell its products or services to the customers

The way an organization chooses and obtains the inputs it needs to produce goods and services from its environment

As the ________ of the environment increases, the resources become hard to obtain. A) depth B) complexity C) dynamism D) richness

complexity

The principal purpose of organizational structure is to ________. A) control how people coordinate their actions and use resources B) develop new and improved products for the existing markets C) select an appropriate business strategy that will help the organization achieve its long term goals D) determine the vision and mission of the organization

control how people coordinate their actions and use resources

Jeffrey Bezos saw the opportunity to sell books over the Internet, which was growing. So he started a Web site where people could buy new books and sell there existing books. This was the first Web site dedicated to buying or selling books. This is an example of ________. A) parallel marketing B) entrepreneurship C) surface bargaining D) social loafing

entreprenuership

. The quality of organizational decision-making is a function of the ________. A) environment of the organization B) diversity of the viewpoints that get considered C) organizational core competences D) value chain followed by the organization

environment of the organization

Managers who are in charge of a specific organizational function such as sales or R&D hold a(n) ________ role. A) distributive B) staff C) integrative D) line

staff

Differentiation is the process of establishing and controlling the division of labor in an organization.

true