Final Test Organizational Behavior Questions

33) The simple structure is most widely practiced in small businesses in which ________. A) the manager and owner are one and the same B) the number of employees is between 100 to 150 C) employees are highly skilled D) managers are hired directly by the company's owner E) training budgets are limited

A Explanation: A) The simple structure is most widely practiced in small businesses in which the manager and owner are one and the same. Page Ref: 486 LO: 2 Difficulty: Easy Quest. Category: Concept Learning

36) Which of the following is a characteristic of a simple structure? A) high centralization B) inflexibility C) narrow spans of control D) ambiguous accountability E) high degree of formalization

A Explanation: A) The simple structure is not elaborate. It has a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization. It is a "flat" organization; it usually has only two or three vertical levels, a loose body of employees, and one individual in whom the decision-making authority is centralized. It's fast, flexible, and inexpensive to operate, and accountability is clear. Page Ref: 487 LO: 2 Difficulty: Easy Quest. Category: Concept Learning

16) A culture that expresses the core values that are shared by a majority of the organization's members is known as a(n) ________ culture. A) dominant B) primary C) fundamental D) unique E) essential

A Explanation: A) A dominant culture is a culture that expresses the core values that are shared by a majority of the organization's members. Page Ref: 514 LO: 1 Difficulty: Easy Quest. Category: Concept Learning

13) Which of the following is most likely to result from a strong organizational culture? A) low employee turnover B) low employee satisfaction C) low organizational commitment D) high absenteeism E) low behavioral control resulting from the climate within the organization

A Explanation: A) A strong culture should reduce employee turnover, because it demonstrates high agreement about what the organization represents. Such unanimity of purpose builds cohesiveness, loyalty, and organizational commitment. These qualities, in turn, lessen employees' propensity to leave. Page Ref: 515 LO: 1 Difficulty: Moderate Quest. Category: Concept Learning

65) A(n) ________ strategy emphasizes the introduction of major new products and services. A) innovation B) cost-minimization C) imitation D) organic E) mechanistic

A Explanation: A) An innovation strategy strives to achieve meaningful and unique innovations. Innovation strategy emphasizes the introduction of major new products and services. Organic and mechanistic are types of organizational designs. Page Ref: 497 LO: 6 Difficulty: Easy Quest. Category: Concept Learning

71) Which of the following dimensions of an environment describes the degree to which the environment can support growth? A) capacity B) flexibility C) volatility D) sustainability E) complexity

A Explanation: A) Any organization's environment has three dimensions: capacity, volatility, and complexity. Capacity refers to the degree to which the environment can support growth. Volatility describes the degree of instability in the environment. Complexity is the degree of heterogeneity and concentration among environmental elements. Page Ref: 499 LO: 6 Difficulty: Easy Quest. Category: Concept Learning

15) Which of the following statements, if true, would support the argument favoring increased span of control? A) Mike's team consists of highly experienced and skilled labor. B) Porco Rosso recently became the world's leading aircraft manufacturer. C) Mike is receiving increasing complaints about interpersonal conflicts within the team. D) Mike's team is highly dependent on his guidance, even on minor issues. E) When additional workers were assigned to Mike on a previous occasion, it had led to unfavorable results.

A Explanation: A) As Mike's team consists of highly experienced and skilled labor, Mike's managerial abilities would complement his team's abilities and certainly improve the average productivity. Porco Rosso becoming the leading aircraft manufacturer is simply stating a mere and irrelevant fact. If Mike is receiving increasing complaints about interpersonal conflicts within his team, then he isn't doing a very good job to begin with and hence must not be assigned more workers. If Mike's team is highly dependent on his guidance, his hands are already full and assigning more workers certainly wouldn't be advised. As it had led to unfavorable results the previous time additional workers were assigned to Mike, it shows that he is incapable of handling more than the present number. Page Ref: 484 LO: 1 AACSB: Reflective Thinking Difficulty: Hard Quest. Category: Critical Thinking Learning

28) ________ refers to the degree to which jobs within the organization are standardized. A) Formalization B) Empowerment C) Work specialization D) Departmentalization E) Decentralization

A Explanation: A) Formalization refers to the degree to which jobs within the organization are standardized. If a job is highly formalized, the incumbent has a minimal amount of discretion over what to do and when and how to do it. Page Ref: 486 LO: 1 Difficulty: Easy Quest. Category: Concept Learning

15) A strong culture can act as a substitute for which of the following? A) institutionalization B) formalization C) socialization D) centralization E) social support

B Explanation: B) Formalization and culture can be viewed as two different roads to a common destination. Page Ref: 515-516 LO: 1 Difficulty: Easy Quest. Category: Concept Learning

26) According to a 2011 survey, many workers in Qtopia Inc. are dissatisfied with their jobs. The survey revealed that most of the dissatisfied workers believe that they have very little control over their job assignments. Therefore, to increase workers' job satisfaction, Boris, a production manager, feels they need to only concentrate on changing the dissatisfied workers' beliefs regarding the degree of control they have over their job assignments. Which of the following, if true, would weaken the conclusion made by Boris? A) Many dissatisfied workers feel that their wages are too low and working conditions are unsatisfactory. B) The number of workers in Qtopia Inc. who are satisfied with their jobs is greater than the number of workers who are dissatisfied. C) The workers in Qtopia Inc. are more dissatisfied than workers in other companies. D) Qtopia Inc. was included in a popular magazine's list of 100 best companies to work for, in its 2008 edition. E) The workers in the company who are satisfied with their jobs believe that they have sufficient control over their job assignments.

A Explanation: A) If many workers are also dissatisfied with their wages and working conditions, the management has to do more than just change the workers beliefs regarding degree of control, hence, weakening the argument. The fact that the number of workers in the company who are satisfied with their jobs is greater than the number of workers who are dissatisfied is out of scope and so is the fact that the workers in the company are more dissatisfied than workers in other companies. The fact that Qtopia Inc. was included in a popular magazine's list of 100 best companies to work for in its 2008 edition is a mere fact that isn't relevant to the current problem. Boris' argument talks about the dissatisfied workers and not the satisfied ones. Hence, the fact that the workers in the company who are satisfied with their jobs believe that they have sufficient control over their job assignments is irrelevant. Page Ref: 485 LO: 1 AACSB: Reflective Thinking Difficulty: Hard Quest. Category: Critical Thinking Learning

25) ________ refers to the shared perceptions organizational members have about their organization and work environment. A) Organizational climate B) Institutionalization C) Microcosm D) Groupthink E) Organizational apprehension

A Explanation: A) Organizational climate refers to the shared perceptions organizational members have about their organization and work environment. This aspect of culture is like team spirit at the organizational level. Page Ref: 516 LO: 2 Difficulty: Easy Quest. Category: Concept Learning

34) Top management has a major impact on the organization's culture by ________. A) establishing norms that filter down through the organization B) ensuring a proper match of personal and organizational values C) socializing new applicants in the pre-hiring phase D) providing a framework for metamorphosis of new hires E) properly rewarding employees' initiatives

A Explanation: A) The actions of top management also have a major impact on the organization's culture. Through words and behavior, senior executives establish norms that filter through the organization about, for instance, whether risk taking is desirable, how much freedom managers should give employees, what is appropriate dress, and what actions pay off in terms of pay raises, promotions, and other rewards. Page Ref: 520 LO: 3 Difficulty: Moderate Quest. Category: Concept Learning

54) A boundaryless organization strives to ________. A) break down barriers between the company, its customers, and suppliers B) reduce bureaucracy costs associated with managing the projects in the organization C) outsource projects to a competent third party D) create a higher level of formalization in the organization E) centralize power within the organization

A Explanation: A) The boundaryless organization strives to eliminate vertical and horizontal boundaries within it and break down external barriers between the company and its customers and suppliers. The boundaryless organization seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams. Page Ref: 492 LO: 5 Difficulty: Easy Quest. Category: Concept Learning

9) 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) path of power C) span of control D) line of responsibility E) web of authority

A Explanation: A) The chain of command is an unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom. It answers questions such as "To whom do I go if I have a problem?" and "To whom am I responsible?" Page Ref: 483 LO: 1 Difficulty: Easy Quest. Category: Concept Learning

44) Which of the following statements is true regarding a matrix structure? A) It breaks the unity-of-command concept. B) It cannot achieve economies of scale. C) It reduces ambiguity about who reports to whom. D) It prevents power struggles. E) It avoids duplication of activities.

A Explanation: A) The matrix structure breaks the unity-of-command concept and increases ambiguity about who reports to whom. The strength of the matrix is its ability to facilitate coordination when the organization has a number of complex and interdependent activities. Page Ref: 489 LO: 3 Difficulty: Moderate Quest. Category: Concept Learning

43) You describe to your students a new committee within the university that brings together specialists from all different departments to develop a new interdisciplinary program. The structure of the committee best meets the definition of the ________ structure. A) matrix B) simple C) boundaryless D) virtual E) bureaucratic

A Explanation: A) The matrix structure describes an organizational structure that creates dual lines of authority and combines functional and product departmentalization. Page Ref: 488 LO: 3 AACSB: Analytic Skills Difficulty: Hard Quest. Category: Application Learning

61) A(n) ________ model is generally synonymous with the bureaucracy in that it has highly standardized processes for work, high formalization, and more managerial hierarchy. A) mechanistic B) organic C) network D) boundaryless E) pyramidal

A Explanation: A) The mechanistic model is generally synonymous with the bureaucracy in that it has highly standardized processes for work, high formalization, and more managerial hierarchy. It is characterized by extensive departmentalization, high formalization, a limited information network, and centralization. Page Ref: 496 LO: 6 Difficulty: Moderate Quest. Category: Concept Learning

17) The ________ refers to the number of subordinates that a manager directs. A) span of control B) unity of command C) chain of command D) line of responsibility E) leadership web

A Explanation: A) The number of employees that a manager can efficiently and effectively direct describes the span of control. It is important because it largely determines the number of levels and managers an organization has. Page Ref: 484 LO: 1 Difficulty: Easy Quest. Category: Concept Learning

40) The strength of product departmentalization in the matrix structure is that it facilitates ________. A) coordination among specialties B) implementation of a high degree of centralization C) adherence to chain of command D) standardization E) employee empowerment

A Explanation: A) The strength of the product departmentalization side of the matrix structure is that it facilitates coordination among specialties to achieve on-time completion and meet budget targets. It provides clear responsibility for all activities related to a product but with duplication of activities and costs. Page Ref: 488 LO: 3 Difficulty: Moderate Quest. Category: Concept Learning

18) A ________ is consistent with recent efforts by companies to reduce costs, cut overhead, speed up decision making, increase flexibility, get closer to customers, and empower employees. A) wider span of control B) high degree of formalization C) longer chain of command D) lack of work specialization E) high degree of centralization

A Explanation: A) The trend in recent years has been toward wider spans of control, which are consistent with efforts to reduce costs, cut overhead, speed decision making, increase flexibility, get closer to customers, and empower employees. Page Ref: 485 LO: 1 Difficulty: Easy Quest. Category: Concept Learning

20) Anna's company needs to dramatically cut costs, speed decision making, and increase flexibility. Which of the following structural decisions will help her achieve the desired objectives? A) increasing the span of control B) decreasing the unity of command C) increasing the degree of formalization D) decentralizing management decisions E) departmentalizing the company on the basis of products

A Explanation: A) The trend in recent years has been toward wider spans of control. They're consistent with firm's efforts to reduce costs, cut overhead, speed decision making, increase flexibility, get closer to customers, and empower employees. Page Ref: 485 LO: 1 AACSB: Analytic Skills Difficulty: Moderate Quest. Category: Application Learning

51) Which of the following is most likely to be a drawback of a virtual organization? A) constant flux and reorganization B) increased technology costs and decentralization C) lack of flexibility and innovativeness D) lack of qualified employees and poor management E) poor communication and high degree of formalization

A Explanation: A) Virtual organizations' drawbacks have become increasingly clear as their popularity has grown. They are in a state of perpetual flux and reorganization, which means roles, goals, and responsibilities are unclear: This sets the stage for political behavior. Page Ref: 492 LO: 4 Difficulty: Easy Quest. Category: Concept Learning

28) Culture is most likely to be a liability when ________. A) the employees of the organization are highly skilled B) the organization's environment is dynamic C) the organization's management is highly efficient D) the organization is highly centralized E) the organization scores low on the degree of formalization

B Explanation: B) Culture is a liability when the shared values are not in agreement with those that further the organization's effectiveness. This is most likely when an organization's environment is dynamic and is undergoing rapid change. In this case, its entrenched culture may no longer be appropriate. Page Ref: 518 LO: 2 Difficulty: Moderate Quest. Category: Concept Learning

48) You are the CEO of Achilles Incorporation. You have decided to hire other organizations to perform many of the basic functions of your business. You have hired an accounting firm to keep your records, a recruiting firm to handle human resource functions, and a computer firm to handle all records. To keep costs down, you are looking for other areas in which to outsource operations. You have chosen to operate your business as a ________. A) matrix organization B) virtual organization C) highly centralized organization D) highly formalized organization E) bureaucracy

B Explanation: B) A virtual organization is a small, core organization that outsources major business functions. Page Ref: 490-491 LO: 4 AACSB: Analytic Skills Difficulty: Hard Quest. Category: Application Learning

70) What are the key dimensions to any organization's environment? A) conformity, criticality, and diffusivity B) complexity, volatility, and capacity C) complexity, diffusivity, and criticality D) conformity, criticality, and capacity E) criticality, volatility, diffusivity

B Explanation: B) Any organization's environment has three dimensions: capacity, volatility, and complexity. Page Ref: 499 LO: 6 Difficulty: Easy Quest. Category: Concept Learning

72) Volatility refers to the degree of ________ within an environment. A) heterogeneity B) instability C) flexibility D) diffusivity E) conformity

B Explanation: B) Any organization's environment has three dimensions: capacity, volatility, and complexity. Capacity refers to the degree to which the environment can support growth. Volatility describes the degree of instability in the environment. Complexity is the degree of heterogeneity and concentration among environmental elements. Page Ref: 499 LO: 6 Difficulty: Easy Quest. Category: Concept Learning

52) Blastkrieg, a chain of audio equipment stores, uses computerized inventory control and customer self- service to eliminate the category of sales clerks from its force of employees. After diversifying into computer electronics, it now plans to employ the same concept in selling desktop PCs and laptops. Which of the following is an assumption made in Blastkrieg's strategy? A) All computer electronics stores use a similar strategy. B) Sales personnel are not required for selling computer electronics successfully. C) The same kind of computers will be used in inventory control for both audio equipment and electronics at Blastkrieg. D) A self-service strategy cannot be employed without computerized inventory control. E) Sales clerks are the only employees of Blastkrieg who could be assigned tasks related to inventory control.

B Explanation: B) Blastkrieg assumes that sales personnel are not required to sell computer electronics and hence plans to employ the computerized inventory and self service. The other options are irrelevant and out of scope. The fact that all computer electronics use a similar strategy has no impact on Blastkrieg's decision. If the self-service strategy cannot be employed without computerized inventory control, it is simply stating a fact not an assumption. The kind of computers used in inventory control in selling audio equipment or electronics is not relevant to the strategy used. Page Ref: 492 LO: 4 AACSB: Reflective Thinking Difficulty: Hard Quest. Category: Critical Thinking Learning

12) Which of the following terms refers to the rights inherent in a managerial position to give orders and expect them to be obeyed? A) chain of command B) authority C) power D) span of control E) leadership

B Explanation: B) Chain of command can't be discussed without also discussing authority. Authority refers to the rights inherent in a managerial position to give orders and expect them to be obeyed. To facilitate coordination, each managerial position is given a place in the chain of command, and each manager is given a degree of authority in order to meet his or her responsibilities. Page Ref: 484 LO: 1 Difficulty: Easy Quest. Category: Concept Learning

21) Which of the following statements is true regarding the functions of culture in an organization? A) It hinders the generation of commitment to something larger than individual self-interest among employees. B) It conveys a sense of identity for organization members. C) It reduces the stability of the organizational system. D) It reduces distinctions between one organization and others. E) It does not affect employees' attitudes and behavior.

B Explanation: B) Culture facilitates the generation of commitment to something larger than individual self-interest. It conveys a sense of identity for organization members. Culture has a boundary-defining role: it creates distinctions between one organization and others. It is a sense-making and control mechanism that guides and shapes employees' attitudes and behavior. Page Ref: 516 LO: 2 Difficulty: Moderate Quest. Category: Concept Learning

53) Who coined the term "boundaryless organization?" A) Steve Jobs B) Jack Welch C) Milton Friedman D) John Maynard Keynes E) Frederick Herzberg

B Explanation: B) General Electric's former chairman, Jack Welch, coined the term "boundaryless organization." Welch wanted to eliminate vertical and horizontal boundaries within it and break down external barriers between the company and its customers and suppliers. Page Ref: 492 LO: 5 Difficulty: Easy Quest. Category: Concept Learning

16) Which of the following statements, if true, would weaken the argument favoring increased span of control? A) Mike has a reputation of handling interpersonal conflicts effectively. B) Performance reports from the last few years show that teams that were monitored closely had higher productivity. C) Porco Rosso recently launched its latest engine model, the PR-4. D) Market trends indicate that the demand for aircraft is expected to increase substantially over the next few years. E) When additional workers were assigned to Mike on a previous occasion, it had led to favorable and productive results.

B Explanation: B) Mike's ability to handle conflicts effectively and his track record which shows that increasing his span of control led to good results in the past, if anything, strengthens the argument. Market trends and the fact that Porco Rosso recently released a new engine are irrelevant as they neither strengthen nor weaken the argument. As previous performance reports show that teams that were monitored closely have higher productivity, it weakens the argument considerably. Monitoring Mike's team closely would benefit the productivity and assigning more workers to him would retard it. Page Ref: 484 LO: 1 AACSB: Reflective Thinking Difficulty: Hard Quest. Category: Critical Thinking Learning

21) Which of the following is a drawback of a narrow span of control? A) It reduces effectiveness. B) It is more expensive. C) It encourages employee autonomy. D) It decreases the number levels in the organizational hierarchy. E) It increases participatory decision making.

B Explanation: B) Narrow spans have three major drawbacks. First, they're expensive because they add levels of management. Second, they make vertical communication in the organization more complex. The added levels of hierarchy slow down decision making and tend to isolate upper management. Third, narrow spans encourage overly tight supervision and discourage employee autonomy. Page Ref: 485 LO: 1 Difficulty: Moderate Quest. Category: Concept Learning

19) A narrow span of control ________. A) encourages employee autonomy B) is expensive because it adds levels of management C) simplifies vertical communication D) increases the speed of decision making E) discourages overly tight supervision

B Explanation: B) Narrow spans of control are expensive because they add levels of management. The added levels of hierarchy slow down decision making and tend to isolate upper management. Page Ref: 485 LO: 1 Difficulty: Moderate Quest. Category: Concept Learning

26) Grace works for a pet store where everyone is committed to the happiness of the animals. Often employees, bosses, and hourly workers alike, come into the store "off the clock" and spend time training the animals. Everyone loves the store, the animals, and their jobs. This attitude of her co-workers inspires Grace to do her best. Based on this information, we can say that Grace is experiencing the effects of ________. A) decentralization B) organizational climate C) high departmentalization D) low formalization E) high work specialization

B Explanation: B) Organizational climate refers to the shared perceptions organizational members have about their organization and work environment. This aspect of culture is like team spirit at the organizational level. Page Ref: 516 LO: 2 AACSB: Analytic Skills Difficulty: Hard Quest. Category: Application Learning

37) The key concept that underlies all bureaucracies is ________. A) efficiency B) standardization C) increased flexibility D) decentralization E) specialization

B Explanation: B) Standardization is the key concept that underlies all bureaucracies. They all rely on standardized work processes for coordination and control. Page Ref: 487 LO: 2 Difficulty: Easy Quest. Category: Concept Learning

9) Cultures that tend to develop in large organizations to reflect common problems or experiences faced by the members in the same department or location are often called ________. A) micro-cultures B) subcultures C) divisional cultures D) microcosms E) countercultures

B Explanation: B) Subcultures tend to develop in large organizations to reflect common problems, situations, or experiences faced by groups of members in the same department or location. The purchasing department can have a subculture that includes the core values of the dominant culture plus additional values unique to members of the purchasing department. Page Ref: 514 LO: 1 Difficulty: Easy Quest. Category: Concept Learning

10) Chain of command is a key element of an organization's structure. Which of the following key questions is addressed by this element? A) How many individuals can a manager efficiently and effectively direct? B) To whom do individuals and groups report? C) On what basis will jobs be grouped together? D) To what degree are activities subdivided into separate jobs? E) To what degree will there be rules and regulations to direct employees and managers?

B Explanation: B) The chain of command is an unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom. It answers questions such as "To whom do I go if I have a problem?" and "To whom am I responsible?" Page Ref: 483 LO: 1 Difficulty: Moderate Quest. Category: Concept Learning

12) The primary or dominant values that are accepted throughout the organization are known as ________. A) foundational traits B) core values C) shared values D) institutional traits E) unique values

B Explanation: B) The dominant culture includes the core values; the primary or dominant values that are accepted throughout the organization. Page Ref: 515 LO: 1 Difficulty: Easy Quest. Category: Concept Learning

57) You have recently started your business with a small capital investment. Your business needs a very high degree of flexibility so that you can quickly respond to environmental changes and you are also interested in minimizing costs. Which of the following types of organizations is best suitable for your business? A) a highly centralized organization B) a virtual organization C) a formalized organization D) a bureaucracy E) a hierarchical organization

B Explanation: B) The major advantage of the virtual organization is its flexibility, which allows individuals with an innovative idea and little money to successfully compete against larger, more established organizations. Page Ref: 492 LO: 4 AACSB: Analytic Skills Difficulty: Hard Quest. Category: Application Learning

64) Which of the following is typically a characteristic of the mechanistic model of organization? A) low formalization B) rigid departmentalization C) decentralized management D) wide spans of control E) low specialization

B Explanation: B) The mechanistic model of organization has high specialization, rigid departmentalization, narrow spans of control, centralized management, and high formalization. Page Ref: 497 LO: 6 Difficulty: Moderate Quest. Category: Concept Learning

22) The question of span of control determines ________. A) the employee grievance policy of the organization B) the number of levels and managers in an organization C) where decisions are made D) how jobs will be grouped E) how employees will be compensated

B Explanation: B) The number of employees a manager can efficiently and effectively direct refers to the span of control. It is important because it largely determines the number of levels and managers an organization has. All things being equal, the wider or larger the span, the more efficient the organization. Page Ref: 484 LO: 1 AACSB: Analytic Skills Difficulty: Moderate Quest. Category: Application Learning

62) A(n) ________ model is a structure that is flat, uses cross-hierarchical and cross-functional teams, has low formalization, possesses a comprehensive information network, and relies on participative decision making. A) mechanistic B) organic C) boundaryless D) network E) pyramidal

B Explanation: B) The organic model is flat, has fewer formal procedures for making decisions, has multiple decision makers, and favors flexible practices. It is a structure that is flat, uses cross-hierarchical and cross-functional teams, has low formalization, possesses a comprehensive information network, and relies on participative decision making. Page Ref: 496 LO: 6 Difficulty: Moderate Quest. Category: Concept Learning

33) The selection process helps sustain the organization's culture by ________. A) establishing and enforcing norms B) hiring candidates who fit well within the organization C) socializing the new employees D) developing performance evaluation criteria E) rewarding conformity

B Explanation: B) The selection process helps sustain the organization's culture by hiring candidates who fit well within the organization. Selection also provides information to applicants. Those who perceive a conflict between their values and those of the organization can remove themselves from the applicant pool. Page Ref: 520 LO: 3 Difficulty: Moderate Quest. Category: Concept Learning

46) A ________ organization is a small, core organization that outsources major business functions. A) centralized B) virtual C) bureaucratic D) matrix E) formalized

B Explanation: B) The virtual organization is also sometimes called the network, or modular, organization. It is typically a small, core organization that outsources major business functions. Page Ref: 490 LO: 4 Difficulty: Easy Quest. Category: Concept Learning

22) When formal authority and control systems are reduced, the ________ provided by a strong culture ensures that everyone is pointed in the same direction. A) rules and regulations B) shared meaning C) rituals D) socialization E) rigid hierarchy

B Explanation: B) Today's trend toward decentralized organizations makes culture more important than ever. When formal authority and control systems are reduced, culture's shared meaning points everyone in the same direction. Page Ref: 516 LO: 2 Difficulty: Easy Quest. Category: Concept Learning

2) Which of the following statements is true regarding work specialization? A) Work specialization indicates to what degree will there be rules and formalized regulations to direct employees and managers. B) Work specialization decreases the time spent in changing tasks. C) Work specialization increases the cost of finding and training workers to do specific and repetitive tasks. D) Work specialization decreases efficiency and productivity. E) Work specialization hinders efficient use of employee skills.

B Explanation: B) Work specialization indicates the degree to which activities in the organization are subdivided into separate jobs. Work specialization makes the most efficient use of employees' skills. Less time is spent in changing tasks, putting away tools and equipment from a prior step, and getting ready for another. Page Ref: 481 LO: 1 Difficulty: Moderate Quest. Category: Concept Learning

55) Odysseus Corp. is attempting to flatten its organizational hierarchy. It is encouraging the use of cross-hierarchical teams, participative decision-making practices, and the use of 360-degree performance appraisals. Based on this information we can say that Odysseus Corp. is attempting to create a ________ organization. A) highly centralized B) virtual C) boundaryless D) highly formalized E) highly departmentalized

C Explanation: C) A boundaryless organization tries to flatten the hierarchy. It encourages usage of cross-hierarchical teams. It encourages participative decision-making practices. It tends to use 360-degree performance appraisals. The boundaryless organization seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams. In this example Odysseus Corp. is attempting to create a boundaryless organization. Page Ref: 492-493 LO: 5 AACSB: Analytic Skills Difficulty: Hard Quest. Category: Application Learning

35) Which of the following statements is true about the simple structure? A) It is very expensive to operate. B) It is characterized by a high degree of formalization. C) It becomes increasingly inadequate as an organization grows. D) It is most widely adopted in large businesses in which the manager and owner are different. E) It is characterized by a narrow span of control.

C Explanation: C) A simple structure has a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization. It's fast, flexible, and inexpensive to operate, and accountability is clear. One major weakness is that it's difficult to maintain in anything other than small organizations. It becomes increasingly inadequate as an organization grows because its low formalization and high centralization tend to create information overload at the top. Page Ref: 486-487 LO: 2 Difficulty: Moderate Quest. Category: Concept Learning

14) A strong culture should reduce employee turnover, because it results in ________. A) a highly centralized organization B) narrow spans of control C) cohesiveness and organizational commitment D) a highly formalized organization E) an outcome-oriented organization

C Explanation: C) A strong culture should reduce employee turnover, because it demonstrates high agreement about what the organization represents. Such unanimity of purpose builds cohesiveness, loyalty, and organizational commitment. These qualities, in turn, lessen employees' propensity to leave. Page Ref: 515 LO: 1 Difficulty: Moderate Quest. Category: Concept Learning

47) A virtual organization is also known as a(n) ________ organization. A) boundaryless B) electronic C) modular D) pyramidal E) triangular

C Explanation: C) A virtual organization is also known as a network or a modular organization. Page Ref: 490 LO: 4 Difficulty: Easy Quest. Category: Concept Learning

73) The ________ of an environment refers to the degree of heterogeneity and concentration among environmental elements. A) density B) simplicity C) complexity D) intricacy E) permeability

C Explanation: C) Any organization's environment has three dimensions: capacity, volatility, and complexity. Capacity refers to the degree to which the environment can support growth. Volatility describes the degree of instability in the environment. Complexity is the degree of heterogeneity and concentration among environmental elements. Page Ref: 499 LO: 6 Difficulty: Easy Quest. Category: Concept Learning

25) ________ refers to the degree to which decision making is concentrated at a single point in the organization. A) Formalization B) Departmentalization C) Centralization D) Work specialization E) Line of command

C Explanation: C) Centralization refers to the degree to which decision making is concentrated at a single point in the organization. In centralized organizations, top managers make all the decisions, and lower-level managers merely carry out their directives. Page Ref: 485 LO: 1 Difficulty: Easy Quest. Category: Concept Learning

24) In an organization, top managers make all the decisions, and lower-level managers merely carry out their directives. This organization is most likely to be characterized by ________. A) a narrower span of control B) a low degree of formalization C) a high degree of centralization D) a high degree of departmentalization E) a low degree of work specialization

C Explanation: C) Centralization refers to the degree to which decision making is concentrated at a single point in the organization. In centralized organizations, top managers make all the decisions, and lower-level managers merely carry out their directives. In organizations at the other extreme, decentralized decision making is pushed down to the managers closest to the action. Page Ref: 485 LO: 1 Difficulty: Easy Quest. Category: Concept Learning

14) According to the principle of unity of command, ________. A) managers should limit their oversight to a maximum of 12 employees B) managers should oversee 1-4 employees on average C) an individual should be directly responsible to only one supervisor D) an organization should be departmentalized on the basis of functions E) employees should report directly to two supervisors to maintain task balance

C Explanation: C) Chain of command can't be discussed without also discussing unity of command. The principle of unity of command helps preserve the concept of an unbroken line of authority. It says a person should have one and only one superior to whom he or she is directly responsible. If the unity of command is broken, an employee might have to cope with conflicting demands or priorities from several superiors. Page Ref: 484 LO: 1 Difficulty: Moderate Quest. Category: Concept Learning

74) Work specialization contributes to higher employee productivity — but at the price of ________. A) reduced economies of scale B) increased cost C) reduced job satisfaction D) restricted flow of information E) increased complexity

C Explanation: C) Evidence indicates that work specialization contributes to higher employee productivity — but at the price of reduced job satisfaction. Page Ref: 501 LO: 7 Difficulty: Moderate Quest. Category: Concept Learning

3) For much of the first half of the twentieth century, managers viewed work specialization as ________. A) a means to encourage employee satisfaction B) an effective solution to over-centralization C) an unending source of increased productivity D) difficult to implement without automation technology E) a frustrating cause of reduced efficiency

C Explanation: C) For much of the first half of the twentieth century, managers viewed work specialization as an unending source of increased productivity. And they were probably right. When specialization was not widely practiced, its introduction almost always generated higher productivity. Page Ref: 481 LO: 1 Difficulty: Moderate Quest. Category: Concept Learning

31) The clerical and editorial employees in a publishing house need to be at their desks by 8:00 AM and follow a set of precise procedures dictated by management. The jobs of these clerical and editorial employees ________. A) have a wide span of control B) score high on the degree of departmentalization C) score high on the degree of formalization D) lack a unity of command E) score low on the degree of work specialization

C Explanation: C) Formalization refers to the degree to which jobs within the organization are standardized. If a job is highly formalized, the incumbent has a minimum amount of discretion over what, when, and how to do it. A high degree of formalization is characterized by clearly defined procedures covering work processes in organizations. Since the clerical and editorial employees have to follow a set of precise procedures dictated by management, their jobs score high on the degree of formalization. Page Ref: 486 LO: 1 AACSB: Analytic Skills Difficulty: Moderate Quest. Category: Application Learning

23) In ________ organizations, the lack of frequent face-to-face contact makes establishing a common set of norms very difficult. A) highly formalized B) boundaryless C) virtual D) matrix E) highly centralized

C Explanation: C) In virtual organizations, the lack of frequent face-to-face contact makes establishing a common set of norms very difficult. Page Ref: 516 LO: 2 Difficulty: Easy Quest. Category: Concept Learning

Describe best practices for creating and sustaining organizational cultures 10) Jean works for Fahrenheit Publishing which is a publisher of scientific journals. The company is dominated by low risk taking and high attention to detail. Jean's department is committed to high team orientation and provides many team-building activities in which Jean and other department members work together and socialize. Which of the following statements best describes Jean's department? A) Jeans department is an example of a primary microcosm. B) Jean's department's culture is stronger than the dominant culture in the organization. C) Jean's department has developed a subculture. D) Jean's department's culture is undefined. E) Jean's department's culture has low stability.

C Explanation: C) Jean's department has developed a subculture that reflects the common situations or experiences faced by group members in the same department or location. It includes the core values of the dominant culture plus additional team values unique to members of the department. Page Ref: 514 LO: 1 AACSB: Analytic Skills Difficulty: Hard Quest. Category: Application Learning

5) A plant manager organizes a plant by separating engineering, accounting, manufacturing, personnel, and purchasing into departments. The plant is departmentalized on the basis of ________. A) target customer B) product C) function D) geography E) service

C Explanation: C) One of the most popular ways to group activities is by functions performed. A manufacturing manager might organize a plant into engineering, accounting, manufacturing, personnel, and supply specialists departments. Page Ref: 482 LO: 1 AACSB: Analytic Skills Difficulty: Moderate Quest. Category: Application Learning

8) Which of the following statements is true regarding an organization's culture? A) Organizational culture is evaluative rather than descriptive. B) Large organizations rarely have subcultures. C) A dominant culture expresses the core values shared by a majority of the organization's members. D) A strong culture reduces employee satisfaction and increases employee turnover. E) Subcultures and dominant cultures do not share any common values.

C Explanation: C) Organizational culture is descriptive. Most large organizations have a dominant culture and numerous subcultures. A dominant culture expresses the core values shared by a majority of the organization's members. A strong culture should reduce employee turnover, because it demonstrates high agreement about what the organization represents. Page Ref: 514 LO: 1 Difficulty: Moderate Quest. Category: Concept Learning

66) Organizations following a(n) ________ strategy try to both minimize risk and maximize opportunity for profit, moving into new products or new markets only after innovators have proven their viability. A) innovation B) cost-cutting C) imitation D) organic E) mechanistic

C Explanation: C) Organizations following an imitation strategy try to both minimize risk and maximize opportunity for profit, introducing new products or entering new markets only after innovators have proven their viability. Page Ref: 497 LO: 6 Difficulty: Easy Quest. Category: Concept Learning

67) Which of the following is most likely to be a characteristic of an organization pursuing an innovation strategy? A) high formalization B) high specialization C) decentralized control D) rigid departmentalization E) narrow span of control

C Explanation: C) Organizations pursuing an innovation strategy tend to be organic with a loose structure, low specialization, low formalization, and decentralized control. Page Ref: 498 LO: 6 Difficulty: Easy Quest. Category: Concept Learning

41) You extol the virtues and benefits of standardization. You are most likely to be promoting the ________. A) matrix structure B) virtual organization C) bureaucracy D) boundaryless structure E) simple structure

C Explanation: C) Standardization is the key concept that underlies all bureaucracies. The bureaucracy is characterized by highly routine operating tasks achieved through specialization, very formalized rules and regulations, tasks grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command. Page Ref: 487 LO: 2 AACSB: Analytic Skills Difficulty: Moderate Quest. Category: Application Learning

49) The major advantage of a virtual organization is its ________. A) decentralized structure B) ability to enhance role clarity C) flexibility D) highly departmentalized structure E) ability to minimize organizational politics

C Explanation: C) The major advantage of the virtual organization is its flexibility. In structural terms, the virtual organization is highly centralized, with little or no departmentalization. Virtual organizations are in a state of perpetual flux and reorganization, which means roles, goals, and responsibilities are unclear. This sets the stage for political behavior. Page Ref: 492 LO: 4 Difficulty: Easy Quest. Category: Concept Learning

39) Which of the following types of organizational designs combines two forms of departmentalization, functional and product? A) simple structure B) bureaucracy C) matrix structure D) virtual structure E) boundaryless structure

C Explanation: C) The matrix structure combines two forms of departmentalization: functional and product.Thus, members in a matrix structure have a dual chain of command: to their functional department and to their product groups. Page Ref: 488 LO: 3 Difficulty: Easy Quest. Category: Concept Learning

63) Which of the following is typically a characteristic of an organic model of organization? A) narrow spans of control B) centralization C) free flow of information D) high formalization E) inflexibility

C Explanation: C) The organic model of organization has cross-hierarchical teams, wide spans of control, decentralized management, low formalization and free flow of information. It favors flexible practices. Page Ref: 496-497 LO: 6 Difficulty: Easy Quest. Category: Concept Learning

32) A ________ 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) networked organizational structure E) hierarchical organization

C Explanation: C) The simple structure is not elaborate. It has a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization. It is a "flat" organization; it usually has only two or three vertical levels, a loose body of employees, and one individual in whom the decision-making authority is centralized. Page Ref: 486 LO: 2 Difficulty: Easy Quest. Category: Concept Learning

1) The degree to which tasks in an organization are subdivided into separate jobs, is called ________. A) social clustering B) bureaucracy C) work specialization D) centralization E) departmentalization

C Explanation: C) We use the term "work specialization," or division of labor, to describe the degree to which activities in the organization are subdivided into separate jobs. The essence of work specialization is to divide a job into a number of steps, each completed by a separate individual. Page Ref: 481 LO: 1 Difficulty: Easy Quest. Category: Concept Learning

58) You decide to eliminate horizontal, vertical, and external barriers within your organization. You want to operate as a ________ organization. A) matrix B) formalized C) team structure D) boundaryless E) centralized

D Explanation: D) A boundaryless organization is an organization that seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams. It eliminates vertical and horizontal boundaries within it and breaks down external barriers between the company and its customers and suppliers. Page Ref: 493-494 LO: 5 AACSB: Analytic Skills Difficulty: Hard Quest. Category: Application Learning

56) A boundaryless organization is most likely to ________. A) encourage hierarchical structure B) avoid using cross-hierarchical teams C) discourage participative decision-making practices D) use 360-degree performance appraisals E) replace empowered teams with departments

D Explanation: D) A boundaryless organization tries to flatten the hierarchy. It encourages usage of cross-hierarchical teams. It encourages participative decision-making practices. It tends to use 360-degree performance appraisals. The boundaryless organization seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams. Page Ref: 492-493 LO: 5 Difficulty: Easy Quest. Category: Concept Learning

8) Wiper Inc., a parts supplier, has separate departments for government aircraft and contracts, large commercial aircraft clients, and small personal aircraft clients. This is an example of departmentalization on the basis of ________. A) product B) function C) geography D) customer E) service

D Explanation: D) A firm can departmentalize based on the particular type of customer the organization seeks to reach. Microsoft, for example, is organized around four customer markets: consumers, large corporations, software developers, and small businesses. Customers in each department have a common set of problems and needs best met by having specialists for each. Wiper Inc. is departmentalized to meet different customer needs. Page Ref: 483 LO: 1 AACSB: Analytic Skills Difficulty: Moderate Quest. Category: Application Learning

50) Which of the following statements is true regarding a virtual organization? A) A virtual organization is sometimes called matrix organization. B) A virtual organization is highly decentralized. C) A virtual organization is characterized by a high degree of departmentalization. D) A virtual organization tends to have unclear roles, goals, and responsibilities. E) A virtual organization lacks flexibility.

D Explanation: D) A virtual organization is sometimes called modular organization. In structural terms, the virtual organization is highly centralized, with little or no departmentalization. In a virtual organization, roles, goals, and responsibilities tend to be unclear. The major advantage of the virtual organization is its flexibility. Page Ref: 492 LO: 4 Difficulty: Moderate Quest. Category: Concept Learning

6) AgriProducers has customers all over the United States that need their soil and crops tested in their labs. The crops and soil are different in the various large areas of the nation, such as the West Coast and the Midwest. Which type of departmentalization would be best for AgriProducers? A) functional B) process C) product D) geographic E) temporal

D Explanation: D) AgriProducers' needs would best be served by departmentalizing on the basis of geography. This form is valuable when an organization's customers are scattered over a large geographic area and have similar needs based on their location. Page Ref: 482 LO: 1 AACSB: Analytic Skills Difficulty: Hard Quest. Category: Application Learning

27) A(n) ________ organization is an organization that takes on a life of its own, apart from its founders or members and is valued for itself and not for the goods or services it produces. A) virtual B) matrix C) boundaryless D) institutionalized E) centralized

D Explanation: D) An institutionalized organization is an organization that takes on a life of its own, apart from its founders or members and is valued for itself and not for the goods or services it produces. Page Ref: 517 LO: 2 Difficulty: Easy Quest. Category: Concept Learning

68) Which of the following is most likely to be a characteristic of an organization pursuing a cost-minimization strategy? A) lack of tight control B) wide span of control C) low work specialization D) high centralization E) low formalization

D Explanation: D) An organization pursuing a cost-minimization strategy tightly controls costs, refrains from incurring unnecessary expenses, and cuts prices in selling a basic product. It is characterized by extensive work specialization, high formalization and high centralization. Page Ref: 498 LO: 6 Difficulty: Easy Quest. Category: Concept Learning

30) The ultimate source of an organization's culture is ________. A) its top management B) its environment C) the country in which the organization operates D) its founders E) the sociocultural backgrounds of its employees

D Explanation: D) An organization's customs, traditions, and general way of doing things are largely due to what it has done before and how successful it was in doing it. Because of this, the ultimate source of an organization's culture tends to be its founders. Page Ref: 519 LO: 3 Difficulty: Easy Quest. Category: Concept Learning

38) Which of the following statements is true regarding a bureaucracy? A) Bureaucracies are characterized by a low degree of formalization. B) Bureaucracy is an ideal organizational design for those organizations that operate under highly uncertain conditions. C) Typically, bureaucracies have wider spans of control. D) Bureaucracies can get by with less talented middle- and lower-level managers. E) Bureaucracies encourage employee empowerment.

D Explanation: D) Bureaucracies can get by with less talented — and, hence, less costly — middle- and lower-level managers. Rules and regulations substitute for managerial discretion. Standardized operations and high formalization allow decision making to be centralized. There is little need for innovative and experienced decision makers below the level of senior executives. Page Ref: 487-488 LO: 2 Difficulty: Moderate Quest. Category: Concept Learning

7) Proctor & Gamble has separate departments for Tide, Pampers, Charmin, and Pringles. This is an example of departmentalization by ________. A) function B) process C) geography D) product E) interest

D Explanation: D) Firms can departmentalize jobs by the type of product or service the organization produces. For example, Procter & Gamble places each major product, such as Tide, Pampers, Charmin, and Pringles, under an executive who has complete global responsibility for it. Page Ref: 482 LO: 1 AACSB: Analytic Skills Difficulty: Moderate Quest. Category: Application Learning

29) Rainbow Corp. hires a new secretary, Polonova, who differs from the vast majority of the company's employees in terms of her ethnicity. The company has a collectivist culture with a culturally diverse workforce and several policies to support the minorities. Yet after a few weeks, she quits the company. Which of the following, if true, helps explain why she quit? A) Rainbow Corp. recently had a huge turnover and plans to expand its market. B) All secretaries, regardless of their gender, are paid equal salaries at Rainbow Corp. C) Polonova is gregarious and comfortable in changing contexts and ambiguous situations. D) Polonova has a strong sense of personal ambition and independence. E) Polonova is more likely to conform to others' ideas and opinions rather than come up with her own.

D Explanation: D) Hiring new employees who differ from the majority in race, age, gender, disability, or other characteristics creates a paradox: management wants to demonstrate support for the differences these employees bring to the workplace, but newcomers who wish to fit in must accept the organization's core cultural values. In this case, Polonova couldn't accept the organization's collectivist culture due to her individualistic nature and hence quit. All other options are either irrelevant or add to the seeming paradox. If all secretaries were paid equal salaries, then it offers no grounds for Polonova to quit. Page Ref: 518 LO: 2 AACSB: Reflective Thinking Difficulty: Hard Quest. Category: Critical Thinking Learning

31) The ________ process helps candidates learn about the organization, and if employees perceive a conflict between their values and those of the organization, they can remove themselves from the applicant pool. A) orientation B) training C) performance evaluation D) selection E) institutionalization

D Explanation: D) Selection is a two-way street, allowing employer or applicant to avoid a mismatch and sustaining an organization's culture by selecting out those who might attack or undermine its core values. Page Ref: 520 LO: 3 Difficulty: Easy Quest. Category: Concept Learning

75) Some individuals want work that makes minimal intellectual demands and provides the security of routine; for them, ________ is a source of job satisfaction. A) free flow of information B) wide span of control C) low formalization D) high work specialization E) high decentralization

D Explanation: D) Some individuals want work that makes minimal intellectual demands and provides the security of routine; for them, high work specialization is a source of job satisfaction. Free flow of information, wide span of control, low formalization, and high decentralization are suitable for complex jobs that need high intellectual capabilities and are performed under uncertain environments. Page Ref: 501 LO: 7

11) Span of control is a key element of an organization's structure. Which of the following key questions is addressed by this element? A) On what basis will jobs be grouped together? B) To whom do individuals and groups report? C) To what degree will there be rules and regulations to direct employees and managers? D) How many individuals can a manager efficiently and effectively direct? E) To what degree are activities subdivided into separate jobs?

D Explanation: D) Span of control determines the number of levels and managers an organization has. All things being equal, the wider or larger the span, the more efficient the organization. Page Ref: 484 LO: 1 Difficulty: Moderate Quest. Category: Concept Learning

69) Which of the following terms refers to the way an organization transfers inputs into outputs? A) volatility B) formalization C) complexity D) technology E) environment

D Explanation: D) Technology describes the way an organization transfers inputs into outputs. Every organization has at least one technology for converting financial, human, and physical resources into products or services. Page Ref: 498 LO: 6 Difficulty: Easy Quest. Category: Concept Learning

6) Which of the following statements best describes the difference between organizational culture and job satisfaction? A) Job satisfaction depends upon the level of "power distance" in the country but organizational culture does not. B) Organizational culture is static, whereas job satisfaction is dynamic. C) Job satisfaction is immeasurable, whereas organizational culture is measurable. D) Organizational culture is descriptive, whereas job satisfaction is evaluative. E) Job satisfaction depends on the structure of the organization but organizational culture does not.

D Explanation: D) The concept of organizational culture is concerned with how employees perceive the characteristics of an organization's culture, not whether they like them, and is therefore a descriptive term. On the other hand, the concept of job satisfaction seeks to measure how employees feel about the organization's expectations, reward practices and therefore is an evaluative term. Page Ref: 514 LO: 1 Difficulty: Moderate Quest. Category: Concept Learning

60) ________ is a systematic effort to make an organization leaner by selling off business units, closing locations, or reducing staff. A) Removing boundaries B) Departmentalizing C) Decentralizing D) Downsizing E) Formalizing

D Explanation: D) The goal of the new organizational forms is to improve agility by creating a lean, focused, and flexible organization. Companies may need to cut divisions that aren't adding value. Downsizing is a systematic effort to make an organization leaner by selling off business units, closing locations, or reducing staff. Page Ref: 494 LO: 5 Difficulty: Easy Quest. Category: Concept Learning

24) Which of the following statements is true regarding the establishment of the organizational culture and its effects on the organization? A) Today's trend toward decentralized organizations makes it is easier to establish a strong culture. B) In a virtual organization a strong culture can be established quickly and easily. C) Employees organized in teams always show greater allegiance to the values of the organization as a whole than to their team and its values. D) Culture acts as a control mechanism and guides the behavior of employees. E) Cultures reduce the stability of the social system in an organization.

D Explanation: D) Today's trend toward decentralized organization makes establishing a strong culture more difficult. In virtual organizations, the lack of frequent face-to-face contact makes establishing a common set of norms very difficult. When formal authority and control systems are reduced, culture's shared meaning points everyone in the same direction. However, employees organized in teams may show greater allegiance to their team and its values than to the values of the organization as a whole. Culture enhances the stability of the social system and acts as a control mechanism that guides and shapes employees' attitudes and behavior. Page Ref: 516 LO: 2 Difficulty: Hard Quest. Category: Concept Learning

30) Publishing representatives who call on college professors to inform them of their company's new publications have a great deal of freedom in their jobs. They have only a general sales pitch, which they tailor as needed. Based on this information, we can say that the job of these publishing representatives ________. A) scores low on the degree of work specialization B) scores low on the degree of decentralization C) scores high on the degree of departmentalization D) scores high on the degree of centralization E) scores low on the degree of formalization

E Explanation: E) Formalization refers to the degree to which jobs within the organization are standardized. If a job is highly formalized, the incumbent has a minimum amount of discretion over what, when, and how to do it. The publishing representatives have a great deal of freedom in their jobs so we can say that the job scores low on the degree of formalization. Page Ref: 486 LO: 1 AACSB: Analytic Skills Difficulty: Moderate Quest. Category: Application Learning

32) Stacy's, a chain of discount stores in Washington, employs thousands of people and pays most of them at the minimum wage rate. Following a federally mandated increase of the minimum wage rate, Stacy's operating costs increased considerably. Yet, the chain's profits increased markedly. Which of the following, if true, helps explain this situation? A) Stacy's plans to expand its market by opening stores in the states of Oregon, Idaho and Nevada. B) Recently, two new competitors entered the market. C) Stacy's operating costs, other than wages, increased substantially after the increase in the minimum wage rate went into effect. D) Over half of Stacy's operating costs consist of payroll expenditures; yet only a small percentage of those expenditures go to pay management salaries. E) Stacy's customer base is made up primarily of people who earn a minimum wage or who depend on the earnings of others who earn a minimum wage.

E Explanation: E) As Stacy's customer base is made up primarily of people who earn a minimum wage or who depend on the earnings of others who earn a minimum wage, it clearly shows how the wage increase might have led to an increase in the retailer's sales. If over half of Stacy's operating costs consist of payroll expenditures, yet only a small percentage of those expenditures go to pay management salaries, then this suggests that the wages that rose as a result of the mandated increase constituted a significant proportion of Stacy's expenditures, which if anything adds to the seeming paradox. The fact that Stacy's operating costs, other than wages, increased substantially after the increase in the minimum wage rate went into effect indicates that along with increases in the minimum wage there were increases in the retailer's operating costs. If two new competitors entered the market, Stacy's should've suffered losses; instead it made profits. The other options are mere facts with no relevance. Page Ref: 520 LO: 3 AACSB: Reflective Thinking Difficulty: Hard Quest. Category: Critical Thinking Learning

42) You explain to your students the structure of a local grocery store situated in your neighborhood. The store employs two full-time employees, a salesperson and a cashier. The owner of the store acts as its manager and makes all the decisions. Which of the following organizational structures is being described by you? A) matrix structure B) virtual structure C) bureaucracy D) boundaryless structure E) simple structure

E Explanation: E) A simple structure describes an organizational structure characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization. Page Ref: 486 LO: 2 AACSB: Analytic Skills Difficulty: Moderate Quest. Category: Application Learning

34) Mark is the owner of a local shoe business. He has fifteen employees who report directly to him and he makes all the decisions regarding the type and quality of shoes and looks after the shop's finances. Which type of organizational structure does Mark have? A) bureaucracy B) virtual structure C) matrix structure D) boundaryless structure E) simple structure

E Explanation: E) A simple structure has a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization. It is a "flat" organization; it usually has only two or three vertical levels, a loose body of employees, and one individual in whom the decision-making authority is centralized. So Mark's shop has a simple structure. Page Ref: 486 LO: 2 AACSB: Analytic Skills Difficulty: Moderate Quest. Category: Application Learning

13) The principle of ________ helps preserve the concept of an unbroken line of authority. A) span of control B) departmentalization C) cross-functionality D) centralization E) unity of command

E Explanation: E) Chain of command can't be discussed without also discussing unity of command. The principle of unity of command helps preserve the concept of an unbroken line of authority. It says a person should have one and only one superior to whom he or she is directly responsible. If the unity of command is broken, an employee might have to cope with conflicting demands or priorities from several superiors. Page Ref: 484 LO: 1 Difficulty: Easy Quest. Category: Concept Learning

29) Elena is the senior manager of a scientific operations team at a well-known clinical research organization. The organization delivers more than 4,000 solutions across more than 18 therapeutic areas. Being a perfectionist, Elena has reached her present position through hard work and dedication. Given that she has also worked effectively with teams in the past, she has recently been assigned to lead a team working on a new project which is critical to the company. Elena refuses to allocate any tasks to her team and decides to put in extra hours and weekends to complete the groundwork herself. Based on the information presented here, which of the following would best explain this contradiction? A) Elena feels she will not be able to guide her team well on the project. B) Elena is not very sociable with her colleagues. C) Elena feels that by delegating work, she will complicate her working relationship with the team. D) Elena feels that this project is vital to the team's success. E) Elena is reluctant to delegate work as she lacks confidence in her team's abilities.

E Explanation: E) Elena doesn't trust her team's abilities. Hence, she refuses to allocate any tasks to her team and decides to put in extra hours and weekends to complete the groundwork herself. The fact that Elena is not very sociable, her self-distrust on being able to guide her team or her complicating the relationship with the team doesn't explain why she refuses to let her team in on the project. If Elena felt this project was vital to her team's success, she would've coordinated with her team to achieve the expected favorable results. Page Ref: 486 LO: 2 AACSB: Reflective Thinking Difficulty: Hard Quest. Category: Critical Thinking Learning

11) ________ are indicators of a strong organizational culture. A) High levels of dissension B) High rates of employee turnover C) Completely horizontal organizational charts D) Narrowly defined roles E) Widely shared values

E Explanation: E) In a strong culture, the organization's core values are both intensely held and widely shared. The more members who accept the core values and the greater their commitment, the stronger the culture and the greater its influence on member behavior because the high degree of sharedness and intensity creates an internal climate of high behavioral control. Page Ref: 514 LO: 1 Difficulty: Easy Quest. Category: Concept Learning

27) The more the lower-level personnel provide input or are actually given the discretion to make decisions, the ________ within that organization. A) higher is the degree of formalization B) lower is the level of empowerment C) lower is the degree of work specialization D) higher is the degree of departmentalization E) higher is the degree of decentralization

E Explanation: E) In decentralized organizations decision making is pushed down to the managers closest to the action. A decentralized organization can act more quickly to solve problems, more people provide input into decisions, and employees are less likely to feel alienated from those who make decisions that affect their work lives. Page Ref: 485 LO: 1 Difficulty: Moderate Quest. Category: Concept Learning

4) "Stability" is one of the seven primary characteristics that captures the essence of an organization's culture. It indicates the degree to which ________. A) employees are encouraged to be innovative and take risks B) management focuses on results or outcomes rather than on the techniques and processes used to achieve them C) management decisions take into consideration the effect of outcomes on people within the organization D) work activities are organized around teams rather than individuals E) organizational activities emphasize maintaining the status quo in contrast to growth

E Explanation: E) Stability indicates the degree to which organizational activities emphasize maintaining the status quo in contrast to growth. Page Ref: 513 LO: 1 Difficulty: Moderate Quest. Category: Concept Learning

4) The basis by which jobs are grouped is called ________. A) social clustering B) span of control C) work specialization D) centralization E) departmentalization

E Explanation: E) The basis by which jobs are grouped is called departmentalization. Page Ref: 482 LO: 1 AACSB: Analytic Skills Difficulty: Moderate Quest. Category: Application Learning

59) Which of the following is a method that companies can use to break down cultural barriers in the global market? A) increase the degree of formalization B) use only organic structures C) increase the degree of centralization D) limit global expansion E) form strategic alliances

E Explanation: E) The goal of the boundaryless organization is to break down cultural barriers. One way to do so is through strategic alliances. These alliances blur the distinction between one organization and another as employees work on joint projects. Page Ref: 494 LO: 5 Difficulty: Easy Quest. Category: Concept Learning

45) Which one of the following problems is most likely to occur in a matrix structure? A) decreased response to environmental change B) increased social loafing C) loss of economies of scale D) increase in groupthink E) employees receiving conflicting directives

E Explanation: E) The major disadvantages of the matrix lie in the confusion it creates, its propensity to foster power struggles, and the stress it places on individuals. Without the unity-of-command concept, ambiguity about who reports to whom is significantly increased and often leads to conflict. Page Ref: 490 LO: 3 Difficulty: Easy Quest. Category: Concept Learning

23) While observing the departments in his division, Gordon notices that some managers with wide spans of control seem to perform more effectively than other managers with similarly sized spans of control. Which of the following statements is most likely to be true regarding the high-performing managers? A) These managers are paid higher salaries than the low-performing managers. B) These managers have external locus of control. C) The employees within their departments tend to compete to reach productivity goals, which boosts performance. D) The employees within their departments score high on agreeableness. E) The employees within their departments are highly skilled and very knowledgeable about their jobs.

E Explanation: E) To ensure performance doesn't suffer because of wider spans of control, organizations have to invest heavily in employee training. Managers recognize they can handle a wider span when employees know their jobs inside and out or can turn to co-workers when they have questions. Page Ref: 485 LO: 1 AACSB: Analytic Skills Difficulty: Moderate Quest. Category: Application Learning