Module 2
Regardless of the size of the organization, the principles of organizing include:
- a hierarchy of authority - dividing up the tasks to be done - deciding what work needs to be done
The principles of bureaucracy which brought consistent application of rules and procedures to organizations were proposed by
Blank 1: Max Blank 2: Weber
owned businesses are growing at more than the national rate.
Blank 1: Minority
A unique government creation that looks like a corporation but is taxed like a sole proprietorship or partnership is called a(n) corporation.
Blank 1: S
A partnership can spell out the requirements of terminating a partnership.
Blank 1: agreement
In addition to the articles of incorporation, a corporation has , which describe how the firm is to be operated from both legal and managerial points of view.
Blank 1: bylaws
Employees at all levels often resist because they are used to doing their jobs in ways they know.
Blank 1: change
The actions of a fellow franchisee will affect your franchise. This is known as the
Blank 1: coattail Blank 2: effect
A corporation is a legal with authority to act and have liability separate from its owners.
Blank 1: entity
An advantage of a organization structure is that lower level employees have authority to respond more quickly to customer needs.
Blank 1: flat or decentralized
The key to success is remaining in changing times.
Blank 1: flexible, adaptable, or agile
The structure that details lines of responsibility, authority, and position that represents different types of organizational design is known as a organization.
Blank 1: formal
The right to use a specific business' name and sell its products or services in a given territory is a(n) agreement.
Blank 1: franchise
Franchisors often use technology to meet the needs of both their customers and their because technology makes communication faster and more widespread.
Blank 1: franchisees, employees, suppliers, investors, or stakeholders
Mark, Cal and Aidan have decided to form a business where all owners will share in operating the business and in assuming liability for the business debts. They are most likely forming a(n) partnership.
Blank 1: general
Firms may use a combination of departmentalization techniques to create a(n) form.
Blank 1: hybrid
Some companies create structures because the sales department has geographic departments, production is by function, and marketing is by customer groups.
Blank 1: hybrid
The principle of subordination of individual interests to the general Interests states that the goals of the team are more than goals of the individual workers.
Blank 1: important
Don wanted to incorporate his business and liked the attributes of an S-corporation, however, he did not feel the eligibility requirements would work for his purposes. He is likely to choose to form a(n) company.
Blank 1: limited Blank 2: liability
Limited liability, choice of taxation, flexible ownership rules, and operating flexibility are all advantages of a(n) company.
Blank 1: limited Blank 2: liability
Production workers, distribution people, and marketing personnel who are responsible for directly achieving organizational goals are called personnel.
Blank 1: line
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
Economies of scale work best in a company that makes large quantities of goods using processes.
Blank 1: mass Blank 2: production
A local furniture company launched a website to boost national sales. However, it could not ship the orders efficiently so it started using FedEx and UPS. This is an example of
Blank 1: outsourcing
A key advantage of a home-based franchise is low costs, which can be ongoing. These are the costs associated with rent, utilities, and other fixed costs.
Blank 1: overhead or operating
An LLC submits a written operating agreement, similar to a(n) agreement, describing how the company is to be operated.
Blank 1: partnership
The present moment or the actual time in which an event takes place is called
Blank 1: real Blank 2: time
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
A temporarily networked organization made up of replaceable firms that join and leave as needed is called a(n) organization.
Blank 1: virtual
What are some of the disadvantages of a corporation?
Cost of forming a corporation Double taxation
When designing responsive organizations, what decisions do firms have to make?
Decide the span of control Choose between tall or flat structures Decide between centralization versus decentralization
According to Fayol, the of principle states that functions are to be divided into areas of specialization.
Division of labor
Functions being divided into areas of specialization such as production, marketing, and finance are examples of which Fayol principle?
Division of labor
Which are considered disadvantages of incorporating?
Double Taxation Initial Cost Extensive paperwork
True or false: If producers, consumers, or workers with similar needs pool their resources for mutual gain, they have created a franchise.
False
True or false: If you and a friend start a business together, you have started a sole proprietorship.
False
True or false: In a limited partnership, the liability of the limited partners is unlimited and personal assets are at risk.
False
Under which Fayol principle does it state that all workers should know to whom they report?
Hierarchy of authority
A firm that has a marketing department organized geographically and a production process organized by function has which type of departmental structure?
Hybrid
A company similar to an S corporation but without the special eligibility requirements is an:
LLC
Which is an advantage of the corporate form of business ownership?
Limited liability
Which of these are advantages of a limited liability companies?
Limited liability Choice of taxation Flexible ownership rules
Identify the four ways to structure an organization.
Line-and-staff organizations Line organizations Cross-functional self-managed teams Matrix-style organizations
What are some of the advantages of franchising?
Lower failure rate Recognized name Financial advice
True or false: Adapting to change is difficult because over time employees get stuck in their ways and are comfortable.
True
Max Weber's principles of organization resembled Fayol's. In addition, Weber emphasized which of the following principles?
Written rules, decision guidelines, and detailed records Job descriptions Consistent procedures, regulations, and policies
A franchise owner will experience the coattail effect when:
a fellow franchisee does something that has an impact on growth and profitability
Because owners are only responsible for losses up to the amount they have invested in a corporation, limited liability is considered:
a major advantage
A(n) ______ is where one company purchases the property and obligations of another.
acquisition
One company's purchase of the property and obligations of another is called a(n):
acquisition
LLCs do have to submit articles of organization and an operating agreement, but do not have to:
file written resolutions keep minutes hold annual meetings
Remaining ______ is the key to an organization's success in changing times.
flexible
The ______ organization details lines of responsibility, authority, and position. It is the structure shown on organization charts.
formal
A partnership where all owners share in operating the business and in assuming unlimited liability for the business's debts is a:
general partnership
A cross-functional team that includes customers, suppliers, and distributors is:
going beyond organizational boundaries
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
A merger of two firms in the same industry that allows the companies to diversify or expand their products is a(n):
horizontal merger
The attributes of a corporation include that:
it is state chartered it is a legal entity corporate liability is separate from owners
Stockholders' liability for losses only up to the amount they invest is called ______________.
limited liability
A partnership has partners who do not share in operating the business.
limited partnership
When there is one or more general partners and one or more limited partners, the firm is a(n):
limited partnership
Those directly responsible for achieving the organization's production goals by issuing orders and enforcing discipline are ______ managers.
line
A large organization might use a flat organization structure in order to:
match the flexibility of small firms
Rank the order in which members of a corporation are chosen in order to separate ownership from management. Start at the top of the managerial hierarchy. (Fig. 5.4)
owner/stockholder Board of directors hire officers of the corporation Officers hire managers of the corporation Managers hire employees
A legal form of business with two or more owners is a(n):
partnership
Termination of a partnership is difficult without a(n) ______ agreement.
partnership
An advantage of partnerships is a longer rate than sole proprietorships, because they become more disciplined and the business's life is based on all the partners.
survival
When you own a sole proprietorship you and the business are considered one, so you have liability for financial obligations such as debt.
unlimited
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
______ organization structures respond to customer demands faster because its lower-level employees have authority and responsibility for making decisions.
Flat
A corporation is formally formed with:
articles of incorporation and bylaws
A small retail chain called Bike Away has found it cheaper and more efficient to have Paychex process their payroll and tax work. This is an example of:
outsourcing
When a firm assigns one or more of its functions to an outside organization, it is:
outsourcing
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 ______ the span of control.
expand
Financial advice and a nationally recognized name are both benefits of owning a(n)
Blank 1: franchise
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) .
Blank 1: hierarchy
Groups of employees from different departments who work together on a long-term basis are called:
cross-functional teams
An important decision to be made while designing a responsive organization is about the size of the span of
Blank 1: control
The unity of command principle states that each person should report to only one manager in order to prevent
Blank 1: confusion or conflict
If a software company and a snack food company merged, it would be called a(n) merger.
Blank 1: conglomerate
Which of Fayol's principles states that a manager should treat employees and peers with respect and justice?
Equity
The line organization has direct lines of _______ that extend from the top manager to employees at the lowest level of the organization.
authority responsibility communication
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
Franchises are expanding internationally to access additional that have new customers and to increase their profit potential.
markets
A state-chartered legal entity with authority to act and have liability separate from its owners is a:
corporation
LLC's are considered to have operational flexibility because while they must submit articles of organization,they are not required to:
keep minutes or hold annual meetings
Franchises offer those starting a business the advantage of a recognized name, management assistance, and:
lower failure rates
The result of two firms joining to form one is called a(n):
merger
Using communications technology to link organizations and allow them to work together on common objectives is called:
networking
Which of Fayol's principles states that materials and people should be placed and maintained in the proper location:
order
Studies have indicated that partnerships are four times more likely to succeed than:
sole proprietorships
Many franchises are expanding internationally because:
there are large new markets available
An important decision to be made while designing a responsive organization is about the size of the span of .
Blank 1: control
3 M is a company that rewards innovation as part of its
Blank 1: corporate or organizational Blank 2: culture
A(n) is a state-chartered entity that exists in the eyes of the law and controls risk to the owners of the firm.
Blank 1: corporation
In economies of scale, a company buys raw materials in bulk so that the average cost of goods goes as the production levels increase.
Blank 1: down or lower
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)
Blank 1: hierarchy
The organization structure that creates a chain of command with one person at the top and others in ranked order to the bottom is a
Blank 1: hierarchy
Relief from the stress of commuting, extra time for family activities, and low overhead expenses are all advantages of - franchises.
Blank 1: home Blank 2: based
When a soft drink company and a mineral water company merge and then are able to supply a variety of drinking products they have formed a(n) merger.
Blank 1: horizontal
In a organization, project managers are in charge of teams made up of members from several departments.
Blank 1: matrix or matrix-style
The result of two firms (usually corporations) combining to form one company is called a
Blank 1: merger
About 30 percent of franchises are owned by African Americans, Latinos, Asians, and Native Americans. Franchisors are becoming more focused on recruiting franchisees.
Blank 1: minority or diverse
Redesigning an organization so that it can more effectively and efficiently serve its customers is called
Blank 1: restructuring
According to Fayol, division of labor states that functions within an organization are to be divided into areas of
Blank 1: specialization
Shareholders are not liable for the debts of a corporation beyond the money they invest in it by buying company
Blank 1: stock or shares
Gathering leads on a company website, selling products and keeping up to date on news via email, and chat rooms all serve as examples of using to assist franchisees and customers.
Blank 1: technology
In a virtual corporation the replaceable firms are joined together on a(n) basis to create a flexible organization.
Blank 1: temporary
Why is adapting to change one of the hardest challenges facing any manager?
Employees and managers are sometimes resistant to change.
Which is a true statement about the principles of organization?
Regardless of the business size the principles are similar.
Which of the following are true regarding the process of forming a corporation.
The articles of incorporation must be filed in the state in which the company will be incorporated The bylaws of the corporation describe how the firm is to be operated
True or false: The hierarchy of authority principle states that all workers should know to whom they report.
True
True or false: The main advantage of a sole proprietorship is ease of start up.
True
A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships is:
an S corporation
The formal organization details lines of:
authority position responsibility
Many people do not like working for someone, so being your own is an advantage of sole proprietorships.
boss
An organization structure in which decision-making authority is maintained at the top level of management is called a(n) ______ organization.
centralized
A business owned and controlled through pooled resources by the people who use it is a(n) ______.
cooperative
When Fayol refers to subordination of individual interests to the general interest, he believes that workers are to think of themselves as a(n):
coordinated team
Google is a company that provides many services and a relaxed atmosphere for its employees to keep them engaged at work. That is a strong feature of its:
corporate culture
Important decisions to be made while designing an organization include:
departmentalization degree of centralization span of control
Many brick and mortar franchisees are using ______ to expand their businesses online to lower costs and better meet the needs of their customers.
e-commerce websites technology
When a company purchases raw materials in bulk, thus reducing the cost of production, it is called:
economies of scale
Line managers are those who have the authority to:
enforce discipline adjust to changing conditions issue orders
An agreement that gives a business the right to use a business's name and sell a product or service in a given area is a(n):
franchise
An S corporation has the liability protections of a corporation but is taxed:
like a partnership or sole proprietorship
An advantage of the corporate form of business is that limited liability allows it to:
limit individual responsibility for losses
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 process
Changing a supply line to make it more efficient and a better use of resources would exhibit:
restructuring
One of the most notable advantages of an online franchise is
there is no brick-and-mortar real estate cost.
In a sole proprietorship, any debts or damages incurred by the business are your personal debts and you must pay them. This disadvantage is known as:
unlimited liability
Each worker is to report to one, and only one, boss is an example of which Fayol principle?
Unity of command
A cross-functional team that is working on the development of a new prosthetic device for amputees should include:
amputees who will use it parts suppliers for medical devices product designers
Centralized authority occurs when decision making is done:
at the top level of management
Four organizational designs include: line, line and staff, ______, and cross-functional teams.
matrix
A McDonald's restaurant anywhere in the world has an atmosphere and look that represents the company's values of cleanliness, quality service, and value. This is an example of:
organization culture
A(n) organization structure maintains the decision-making authority at the top level of management.
Blank 1: centralized
The joining of firms in completely unrelated industries is a(n) merger.
Blank 1: conglomerate
Restructuring involves redesigning an organization so that it can be more and
Blank 1: effective Blank 2: efficient
Using communications technology and other means to link organizations and allow them to work together on common objectives is referred to as
Blank 1: networking
Under unity of command, each worker is to report to only boss.
Blank 1: one
When two firms operating in different stages of related businesses join, it is called a(n) merger.
Blank 1: vertical
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
A Fayol principle that states each worker is to report to one and only one boss.
Unity of command
Managing has become a critical managerial function because the increasing rate of change affects all organizations.
change
According to Fayol's order principle, ______ and ______ should be placed and maintained in the proper location.
materials; people
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
Real time is the ______ moment or the ______ time in which something takes place.
present; actual
Fayol's equity principle states that a manager should treat employees and peers:
with respect and justice
Fayol's principle states that materials and people should be placed and maintained in the proper location within an organization.
Blank 1: order
A major disadvantage of the corporate form deals with the tax situation called taxation.
double
Cross-functional self-managed teams are used in organizations to
break down barriers between functional departments
Franchises are attractive to minority populations because:
some offer financial support to aspiring business owners they provide personal ownership of a business
A temporary networked organization made up of replaceable firms that join and leave as needed is called a(n):
virtual corporation
The disadvantage of sole proprietorships is that any debts or losses incurred by the business are your debts because you and the business are legally one and you have:
unlimited liability
An advantage of the separation of ownership from management in corporations is that the company can raise money from investors but the investors:
are not involved in daily operations
An advantage of starting an online franchise is that:
franchisees pay only a set monthly fee no upfront fee may be required online franchisees can compete in world markets
A merger between a soft drink company and an artificial sweetener maker could be considered a(n) merger.
Blank 1: vertical
Regardless of the size of the business, the principles of its structure remain the same.
Blank 1: organizing
If your company debts or damages are solely your responsibility you could be experiencing the disadvantage associated with owning a sole proprietorship called
Blank 1: unlimited Blank 2: liability
Written rules and procedures. promotion based on qualifications, and job descriptions are organizing principles proposed by:
Max Weber
