management test 2 chapter 8 review material

In a decentralized organization, more of the decisions are made by

C. the lower levels of the organization. In decentralized organizations, more decisions are made at lower levels. Ideally, decision making occurs at the level of the people who are most directly affected and have the most intimate knowledge about the problem.

Which of the following is an advantage of functional departmentalization?

D. Decision making and lines of communication are simple and clearly understood The traditional functional approach to departmentalization has a number of potential advantages for an organization. One such advantage is that decision making and lines of communication are simple and clearly understood.

Which of the following is a job position found on the bottom tier of the organizational pyramid?

D. First-line manager The three broad levels of the organizational pyramid are commonly called the hierarchy. The CEO occupies the top position and is the senior member of top management. The top managerial level also includes presidents and vice presidents. The second broad level of the organization is middle management. At this level, managers are in charge of plants or departments. The lowest level is made up of lower management and workers.

Which of the following statements about stockholders is the most accurate?

D. Stockholders are rarely directly involved in managing the organization In corporations, the owners are the stockholders. But because there are numerous stockholders and these individuals generally lack timely information, few are directly involved in managing the organization. Stockholders elect a board of directors to oversee the organization.

Mercury's Feet began its business by making athletic shoes. Its departments are structured based on products sold to professional athletes, products sold to novice athletes, and products sold to non-athletes. In this case, the company uses _____ departmentalization.

D. customer Some companies build divisions around groups of customers or around different geographic areas. Mercury's Feet has structured their departments to serve different groups of customers.

The operational level of the organization includes

D. frontline managers, supervisors, and employees. The lowest level is made up of lower management and workers. It includes office managers, sales managers, supervisors, and other frontline managers, as well as the employees who report directly to them. This level is also called the operational level of the organization.

In a _____ organization, jobs are specialized and grouped such as marketing, finance, operations, accounting, and human resources.

D. functional In a functional organization, jobs (and departments) are specialized and grouped according to business functions and the skills they require: production, marketing, human resources, research and development, finance, accounting, and so forth

The oversight of the firm by its executive staff and board of directors is called corporate ____.

D. governance The key responsibilities at the top level include corporate governance. It is a term describing the oversight of the firm by its executive staff and board of directors

The optimal span of control should be wide when

D. jobs are similar The optimal span of control depends on a number of factors. The span of control should be wide when jobs are similar and performance measures are comparable

A narrow span of control will be appropriate when

D. many reporting levels exist. The span should be wider when jobs are similar and performance measures are comparable. If the opposite conditions exist, a narrow span of control may be more appropriate. The optimal span of control maximizes effectiveness because it is narrow enough to permit managers to maintain control over subordinates but not so narrow that it leads to overcontrol and an excessive number of managers.

A(n) _____ organization is a collection of independent, mostly single-function firms that collaborate to produce a good or service.

D. network A network organization is a collection of independent, mostly single-function firms that collaborate to produce a good or service. It describes not one organization but a web of relationships among many firms.

Miguel and David are employed at the same company and often work on the same products. However, they are assigned to separate units, and they perform very specific, different jobs that contribute to the larger task. This process is called ____

D. specialization Differentiation is created through division of labor and job specialization. Specialization refers to the fact that different people or groups often perform specific parts of the larger task.

Explain how to delegate effectively.

Delegation the assignment of tasks and responsibilities has many potential advantages for the manager, the subordinate, and the organization. But to be effective, the process must be managed carefully. The manager should define the goal, select the person, solicit opinions, provide resources, schedule checkpoints, and discuss progress periodically.

Explain how differentiation and integration influence an organization's structure.

Differentiation means that organizations have many parts. Specialization means that various individuals and units throughout the organization perform different tasks. The assignment of tasks to different people or groups often is referred to as the division of labor. But the specialized tasks in an organization cannot all be performed independently of one another. Coordination links the various tasks to achieve the organizations overall mission. An organization with many specialized tasks and work units is highly differentiated; the more differentiated the organization is, the more integration or coordination is required.

The assignment of different tasks to different people or groups in an organization is known as

Division of labor means the work of the organization is subdivided into smaller tasks. Various

Casa Caliente Inc. was voted producer of the best hot sauce in its city. It soon expanded andnow manufactures and distributes sauces, kitchen equipment, and specialty spices nationwide, with a separate department for each. Which of the following forms of departmentalization does Casa Caliente Inc. have?

E. Product Organizations can create a divisional structure in several ways, including product divisions. In the product organization, all functions that contribute to a given product are organized under one manager. Casa Caliente Inc. uses product departmentalization.

Which principle states that a person should have only one boss to avoid confusion?

E. Unity-of-command Many of the disadvantages of the matrix organization stem from its inherent violation of the unity-of-command principle, which states that a person should have only one boss. Reporting to two superiors can create confusion and a difficult interpersonal situation unless steps are taken to prevent these problems from arising

3. Enrique delegates an important project to Harriet, but he tells her that he expects regular reports and that he will take over the work if she falls behind or does not produce quality results. Enrique is referring to the principle known as _____.

E. accountability Accountability means that the subordinate's manager has the right to expect the subordinate to perform the job and the right to take corrective action if the subordinate fails to do so.

Bond Incorporated has developed a set of procedures to link the various subunits and departments of the corporation in order to carry out the organization's overall mission. The procedures that fulfill this function are referred to as _____.

E. coordination Coordination refers to the procedures that link the various parts of an organization for the purpose of achieving the organization's overall mission

The numerous tasks that must be carried out in a large organization make _____ a necessity.

C. specialization The many tasks that must be carried out in an organization make specialization and division of labor necessities. Otherwise, the complexity of the overall work of the organization would be too much for any individual.

. Corporations have boards of directors elected by

C. stockholders. Stockholders elect a board of directors to oversee the organization on their behalf. The board, led by the chair, makes major decisions affecting the organization, subject to corporate charter and bylaw provisions.

Narrow spans of control build _____ organizations

C. tall The implications of differences in the span of control for the shape of an organization are straightforward. Holding size constant, narrow spans build a tall organization with many reporting levels.

Several top executives of Burns Corporation are part of the corporation's board and are called

E. inside directors. The board's membership usually includes some top executives who are called inside directors. Outside members of the board tend to be executives at other companies.

Summarize how authority operates.

Authority is the legitimate right to make decisions and tell other people what to do. It is exercised throughout the hierarchy because bosses have the authority to give orders to subordinates. Through the day-to-day operation of authority, the organization proceeds toward achieving its goals. Owners or stockholders have ultimate authority.

Which of the following is a characteristic of product organizations?

B. Decision making is decentralized. Coordination across product lines and divisions is difficult. Because decision making is decentralized, top management can lose control over decisions made in the divisions. Proper management of decentralization and delegation is essential for this structure to be effective.

What is the first step in effective delegation?

B. Define the goal of the task to be delegated. Throughout the delegation process, the manager and the subordinate must work together and communicate about the project. The manager should know the subordinate's ideas at the beginning and inquire about progress or problems at periodic meetings and review sessions. Thus, even though the subordinate performs the assignment, the manager is available and aware of its current status

Two fundamental concepts around which organizations are structured are differentiation and integration. Differentiation means

that the organization is composed of many units that work on different kinds of tasks, using different skills and work methods.

Span of control refers to the

number of people who report directly to a manager.

Differentiation is high when an

organization has many subunits and many specialists who think differently. Harvard professors found that organizations in complex, dynamic environments developed a high degree of differentiation to cope with the complex challenges.

Summarize ways organizations can be structured.

organizations can be structured on the basis of function, division (product, customers, or geographic), matrix, and network. Each form has advantages and disadvantages.

The organization chart depicts the

positions in the firm and the way they are arranged. The chart provides a picture of the reporting structure (who reports to whom) and the various activities that are carried out by different individuals. Most companies have official organization charts drawn up to give people this information.

Matrix structures allow a company to adapt to changing conditions, but

presents unique challenges to managers and employees

Managers can coordinate interdependent units through

standardization, plans, and mutual adjustment.

Boards of directors report to

stockholders, advise management, consider the firms legal interests, and protect stockholders rights

Integration means

that these differentiated units are put back together so that work is coordinated into an overall product

Delegation,

the assignment of tasks and responsibilities, offers a variety of benefits but must be managed carefully

9. What are the three basic approaches to departmentalization?

. Functional, divisional, and matrix Organizations divide work into different units and vary in the way they cluster or arrange departments. The three basic approaches to departmentalization are functional, divisional, and matrix.

30. The functional structure may be most appropriate in _____ environments.

. simple, stable The functional structure may be most appropriate in rather simple, stable environments. When companies are growing and business environments are changing, organizations need to integrate work areas more effectively so they can be more flexible and responsive.

The three levels of the organizational hierarchy include

. top, middle, and operational levels The three broad levels of the organizational pyramid are commonly called the hierarchy. They are top management, middle management, and the operational level.

According to Napoleon Bonaparte, the optimal number of subordinates is ____.

5

A(n) _____ organization is a hybrid form of organization in which functional and divisional forms overlap.

A matrix organization is a hybrid form of organization in which functional and divisional forms overlap. Managers and staff personnel report to two bosses: a functional manager and a divisional manager.

Who selects the CEO of a corporation?

A. Board of directors In corporations, the owners are the stockholders and few are directly involved in managing the organization. Stockholders elect a board of directors to oversee the organization. Boards select, assess, reward, and perhaps replace the CEO. The board's membership usually includes some top executives—called inside directors. Today most companies have a majority of outside directors.

Who among the following individuals belongs to the top managerial level?

A. Chief financial officer Top management teams typically consist of the CEO, president, chief operating officer, chief financial officer, and other key executives. The CEO occupies the top position and is the senior member of top management.

_____ occurs when interdependent units are required to meet deadlines and objectives that contribute to a common goal.

A. Coordination by plan Coordination by plan occurs when interdependent units are required to meet deadlines and objectives that contribute to a common goal. It does not require the same high degree of stability and routinization required for coordination by standardization.

Which of the following statements is true of matrix organizations?

A. It involves dual reporting relationships. A matrix organization is a hybrid form of organization in which functional and divisional forms overlap. Managers and staff personnel report to two bosses—a functional manager and a divisional manager. Thus matrix organizations have a dual rather than a single line of command.

. An approach that involves feedback and discussions to figure out jointly how to approach problems and devise solutions that are agreeable to everyone is known as

A. coordination by mutual adjustment.

. A specific technique used to reduce the need for information is to

A. create self-contained tasks. Creating self-contained tasks allows organizations to reduce the need for some information. Creating self-contained tasks refers to changing from a functional organization to a product or project organization and giving each unit the resources it needs to perform its task.

The presence of rules and regulations governing how people in the organization interact is called

A. formalization. To improve coordination, organizations may rely on formalization—the presence of rules and regulations governing how people in the organization interact.

Corporate boards hire _____ directors to provide different information and perspectives and to prevent big mistakes.

A. outside Today most companies have a majority of outside directors. Boards made up of strong, independent outsiders are more likely to provide different information and perspectives and to prevent big mistake

Research, accounting, and human resources are considered _____ departments.

A. staff Staff departments are those that provide specialized or professional skills that support line departments. They include research, legal, accounting, and human resources departments.

LThe _____ of a firm's structure is the starting point in understanding the organizational issues such as reporting relationships, authority, and responsibility.

A. vertical dimension To understand issues such as reporting relationships, authority, responsibility, and the like, we need to begin with the vertical dimension of a firm's structure.

The _____ of a firm's structure is the starting point in understanding the organizational issues such as reporting relationships, authority, and responsibility

A. vertical dimension To understand issues such as reporting relationships, authority, responsibility, and the like, we need to begin with the vertical dimension of a firm's structure.

A very flexible version of the network organization is the

A. virtual corporation. A very flexible version of the network organization is the dynamic network, also called the modular or virtual corporation. It is composed of temporary arrangements among members that can be assembled and reassembled to meet a changing competitive environment.

A _____ span of control creates a flat organization.

A. wide The implications of differences in the span of control for the shape of an organization are straightforward. Holding size constant, wide spans build a flat organization with fewer reporting levels.

differentiation

An aspect of the organization's internal environment created by job specialization and the division of labor.

Patrick is a new product designer for a cookware manufacturer. Patrick therefore works in a _____ department.

B. line line departments are those that have responsibility for the principal activities of the firm. Line units deal directly with the organization's primary goods or services; they make things, sell things, or provide customer service.

Reporting relationships between bosses and subordinates is a function that relates to the _____ dimension of a firm's structure.

B. vertical Reporting relationships, authority, responsibility, and similar issues correspond to the vertical dimension of a firm's structure.

Selim's job with a local utility is to maintain the relationship between it and the community. This involves communicating with local organizations to find those in need of help with their electric bills in order to ensure that no one is without heat during the winter. In this scenario, Selim performs the role of a ___

C. liaison Selim is performing a liaison role: a specialized job to handle communications between two departments or organizations (such as the community organizations in this case).

Creating slack resources means that

C. more resources are made available to each unit in case they need them in a pinch. Managers can reduce the need for information by creating slack resources. Slack resources are simply extra resources on which organizations can rely in a pinch so that if they get caught off guard, they can still adjust.

Which of the following is a disadvantage of the matrix design?

D. Additional time is required for meetings and coordination. the matrix organization has a number of disadvantages, including that additional time is required for meetings and other communications to coordinate work

Which of the following depicts the positions in a firm and how they are arranged?

D. Organization chart The organization chart depicts the positions in the firm and the way they are arranged. The chart provides a picture of the reporting structure (who reports to whom) and the various activities that are carried out by different individuals.

Investing in information systems and creating horizontal relationships most likely results in

D. an organization's ability to process more information. An organization may take the approach of increasing its information-processing capability. It can invest in information systems, which usually means employing or expanding computer systems. It can also use knowledge management by creating horizontal relationships between units to foster coordination

Chuck, the operations manager of Wentworth Publishing, requires all seven branch offices to use the same type of computer and operating system. This simplifies both the communication and training processes for employees who frequently transfer between offices. Here Chuck can best be described as coordinating the offices by _____.

E. standardization Chuck is using standardization, which constrains actions and integrates various units by regulating what people do. People often know how to act and interact because standard operating procedures spell out what they should do.

Establishing common routines and operating procedures that apply uniformly to everyone is called ____

E. standardization Standardization is establishing common routines and procedures that apply uniformly to everyone. It constrains actions and integrates various units by regulating what people do.

Span of control refers to

E. the number of individuals reporting directly to a manager or supervisor. The number of people under a manager is an important feature of an organization's structure. The number of subordinates who report directly to an executive or supervisor is called the span of control.

Cambridge Networking Solutions has its global headquarters in Chicago, where companywide departments, such as marketing, accounting, and research, are housed. Cambridge is thus a divisional organization.

FALSE A divisional organization groups all functions into a single division and duplicates functions across all the divisions of the firm. In contrast, Cambridge has companywide departments at its headquarters.

If Svetlana, a manager at Texas Two-Step Cowboy Boots, delegates responsibility for reorganizing the stockroom to a subordinate, she is relieved of the responsibility and accountability for that task. Svetlana's manager has no right to hold her accountable for her subordinate's actions.

FALSE As a manager delegates responsibilities, subordinates are held accountable for achieving results. However, managers remain responsible and accountable not only for their own actions but also for the actions of their subordinates.

Describe important integrative mechanisms.

Managers can coordinate interdependent units through standardization, plans, and mutual adjustment. Standardization occurs when routines and standard operating procedures are put in place. They typically are accompanied by formalized rules. Coordination by plan is more flexible and allows more freedom in how tasks are carried out but keeps interdependent units focused on schedules and joint goals. Mutual adjustment involves feedback and discussions among related parties to accommodate each others needs. It is at once the most flexible and simple to administer, but it is time-consuming.

organization chart

The reporting structure and division of labor in an organization.

Differentiation

Several related concepts underlie the idea of structural differentiation. For example, differentiation is created through division of labor and job specialization. Division of labor means the work of the organization is subdivided into smaller tasks. Various individuals and units throughout the organization perform different tasks. Specialization refers to the fact that different people or groups often perform specific parts of the larger task. The two concepts are, of course, closely related. Administrative assistants and accountants specialize in, and perform, different jobs; similarly, marketing, finance, and human resources page 249tasks are divided among the respective departments. The many tasks that must be carried out in an organization make specialization and division of labor necessities. Otherwise, the complexity of the overall work of the organization would be too much for any individual.3

Discuss how span of control affects structure and managerial effectiveness.

Span of control is the number of people who report directly to a manager. Narrow spans create tall organizations, and wide spans create flat ones. No single span of control is always appropriate; the optimal span is determined by characteristics of the work, the subordinates, the manager, and the organization.

a traditional organization chart. Note the various types of information that are conveyed in a very simple way:

The boxes represent different work. The titles in the boxes show the work performed by each unit. reporting and authority relationships are indicated by solid lines showing superior- subordinate connections. levels of management are indicated by the number of horizontal layers in the chart. All persons or units that are at the same rank and report to the same person are on one level.

integration

The degree to which differentiated work units work together and coordinate their efforts.

Identify the unique challenges of the matrix organization.

The matrix is a complex structure with a dual authority organization. A well-managed matrix enables organizations to adapt to change. But it can also create confusion and interpersonal difficulties. People in all positions in the matrix top executives, product and function managers, and twoboss employees must acquire unique survival skills.

Which of the following provides a clear picture of the reporting structure of a firm and the various activities carried out by individuals?

The organization chart depicts the positions in the firm and the way they are arranged. The chart provides a picture of the reporting structure (who reports to whom) and the various activities that are carried out by different individuals.

the structure of organizations is affected by their degree of

differentiation and integration

. Specialization refers to

the fact that different people or groups often perform specific parts of the larger task. The two concepts are, of course, closely related. Administrative assistants and accountants specialize in, and perform, different jobs; similarly, marketing, finance, and human resources page 249tasks are divided among the respective departments. The many tasks that must be carried out in an organization make specialization and division of labor necessities. Otherwise, the complexity of the overall work of the organization would be too much for any individual

People and groups are assigned specialized tasks, and these tasks are coordinated to achieve

the organizations' overall mission.

Division of labor means

the work of the organization is subdivided into smaller tasks. Various individuals and units throughout the organization perform different tasks

In centralized organizations,

top managers make the most important decisions whereas in decentralized organizations, many decisions are delegated to lower levels. organizations can be structured in a variety of ways, including function, division (product, customers, or geographic), matrix, and network.

When there are many subunits and many kinds of specialists who think differently in an organization, differentiation is high.

true

Bosses exercise authority throughout an organizations' hierarchy, even though owners or stockholders have

ultimate authority

Madison wants to open a restaurant and plans to employ a staff of about 10 people, including wait staff and cooks. What type of organization is Madison planning to create?

A. Flat This type of organization would be considered flat since there are likely only two levels, with Madison supervising all her employees

Which of the following is an advantage of delegation?

A. It helps subordinates develop new skills. Delegation essentially gives the subordinate a more important job. The subordinate acquires an opportunity to develop new skills and to demonstrate potential for additional responsibilities and perhaps promotion

Which of the following is true of an organization chart?

A. It shows the reporting structure in the organization The organization chart depicts the positions in the firm and the way they are arranged. The chart provides a picture of the reporting structure (who reports to whom) and the various activities that are carried out by different individuals

The assignment of authority and responsibility to a subordinate at a lower level is known as _____.

A. delegation Delegation is the assignment of authority and responsibility to a subordinate at a lower level. It often requires that the subordinate report back to his or her boss about how effectively the assignment was carried out.

Subdividing an organization into smaller subunits is known as ____.

A. departmentalization Departmentalization is subdividing an organization into smaller subunits. The three basic approaches to departmentalization are functional, divisional, and matrix.

. If an organization is composed of many separate units that work on different kinds of tasks by using skills and work methods that vary from each other, that organization is characterized by _____.

A. differentiation Two fundamental concepts around which organizations are structured are differentiation and integration. Differentiation means that the organization is composed of many different units that work on different kinds of tasks, using different skills and work methods.

An organization with departmentalization that groups units around products, customers, or geographic regions is called a

A. divisional organization. A divisional organization uses departmentalization that groups units around products, customers, or geographic regions. In this structure, separate divisions may act almost as separate businesses or profit centers and work autonomously to accomplish the goals of the entire enterprise.

Corporate governance is a term describing the oversight of a firm by its

A. executive staff and board of directors. Corporate governance is a term describing the oversight of a firm by its executive staff and board of directors. In recent years, as a result of corporate scandals and extremely generous executive pay packages, the public's trust in corporate governance has eroded significantly.

Anita is one of three managers at Lovely Landscaping, and she supervises 32 full- and parttime employees who perform landscaping maintenance services. She reports to the owner. Lovely Landscaping would be considered a _____ organization.

A. flat A narrow span of control is associated with tall organizations that have many reporting levels. Wide spans create flat organizations with fewer reporting levels. Anita is in a flat organization since she reports directly to the owner and supervises frontline employees.

Coordination refers to the

C. procedures that link the various parts of the organization Coordination refers to the procedures that link the various parts of an organization for the purpose of achieving the organization's overall mission.

_____ is most closely related to the division of labor within an organization.

B. Specialization Differentiation in an organization is created through division of labor and job specialization. The two concepts are, of course, closely related.

Julia, VP of operations, was looking for a new direction and asked Paulo to manage the reorganization of the call center, even though he was less experienced than many of the managers in that department. Paulo found that the other managers were not cooperative in giving him access to their current procedures or ideas about new ones, and he felt powerless to compel them. Julia most likely made the mistake of

B. delegating responsibility without adequate authority to Paulo. The person who gets the assignment should be given the authority, time, and resources to carry out the task successfully. Paulo seems not to have adequate authority.

The organizational pyramid composed of authority levels is commonly called the

B. hierarchy. The three broad levels of the organizational pyramid are commonly called the hierarchy. TheCEO occupies the top position and is the senior member of top management.

. The number of subordinates who report directly to an executive or supervisor is called the

B. span of control. The number of people under a manager is an important feature of an organization's structure. The number of subordinates who report directly to an executive or supervisor is called the span of control.

Define the roles of the board of directors and the chief executive officer.

Boards of directors report to stockholders. The board of directors controls or advises management, considers the firms legal and other interests, and protects stockholders' rights. The chief executive officer reports to the board and is accountable for the organizations' performance.

Who among the following belongs to the middle managerial level?

C. Departmental head The second broad level of the organization is middle management. At this level, managers are in charge of plants or departments.

_____ is an aspect of an organization's internal environment created by job specialization and division of labor.

C. Differentiation Differentiation is created through division of labor and job specialization. Division of labor means the work of the organization is subdivided into smaller tasks. Various individuals and units throughout the organization perform different tasks. Specialization refers to the fact that different people or groups often perform specific parts of the larger task.

Lawrence and Lorsch found that

C. highly differentiated firms were successful if they had high levels of integration. lawrence and Lorsch found that highly differentiated firms were successful if they also had high levels of integration. Organizations are more likely to fail if they exist in complex environments and are highly differentiated but fail to integrate their activities adequately.

In his job for Amberg Associates, Marvin has to report to two managers—the head of the accounting department and the head of the Great Lakes Division. Amberg Associates is a _____ organization

C. matrix A matrix organization is one composed of dual reporting relationships in which some employees report to two superiors: a functional manager and a divisional manager

Even though the production department and the advertising department have completely different tasks, they must work together and coordinate their efforts to make sure the marketing campaign is ready for each new product launch. The degree to which they do this is known as

E. integration. As organizations differentiate their structures, managers must simultaneously consider issues of integration. Integration refers to the degree to which differentiated work units work together and coordinate their efforts.

. In a centralized organization, most of the decisions are made at lower levels.

FALSE In a centralized organization, important decisions usually are made at the top. In decentralized organizations, more decisions are made at lower levels.

One disadvantage of delegation is that it usually results in the manager losing touch with the status of the work to be accomplished.

FALSE Throughout the delegation process, the manager and the subordinate must work together and communicate about the project. The manager should know the subordinate's ideas at the beginning and inquire about progress or problems at periodic meetings and review sessions. Thus, even though the subordinate performs the assignment, the manager is available and aware of its current status.

A disadvantage of the functional form of departmentalization is that technical specialists spend too much time on administrative work.

FALSE The traditional functional approach to departmentalization has a number of potential advantages for an organization, including that technical specialists are relatively free of administrative work

Scenario A. Beaulieu's Bags Corp. is a briefcase manufacturer. It has a marketing, production, and finance department, with a manager who heads each of the departments. Yvette, theCEO, distributes the various organizational tasks to each manager by assigning authority and responsibility. Each manager has ten subordinates who are required to report to him or her. Each department works on its set of tasks in the organization. Yvette is the top manager, followed by the department heads, and lastly the supervisors. All the managers are accountable to Yvette alone.

In Scenario A, which of the following organizational departmentalization does Beaulieu's Bags Corp. utilize? A. Functional In a functional organization, jobs (and departments) are specialized and grouped according to business functions and the skills they require: production, marketing, human resources, research and development, finance, accounting, and so forth. Beaulieu's Bags Corp. uses functional departmentalization.

Distinguish between centralized and decentralized organizations.

In centralized organizations, top managers make the most important decisions. In decentralized organizations, many decisions are delegated to lower levels.

Employees who function poorly in ambiguous, and sometimes conflict-ridden, circumstances may not thrive in a matrix organization.

TRUE Employees in a matrix organization must learn how to be responsible to two superiors. This means prioritizing multiple demands and sometimes even reconciling conflicting orders. Some people function poorly under this ambiguous, conflictual circumstance; sometimes this signals the end of their careers with the company.

Coordination by mutual adjustment involves feedback and discussions to jointly figure out how to approach problems and devise solutions that are agreeable to everyone.

TRUE Coordination by mutual adjustment involves feedback and discussions to jointly figure out how to approach problems and devise solutions that are agreeable to everyone. The popularity of teams today is in part due to the fact that they allow flexible coordination; teams can operate under the principle of mutual adjustment.

It is generally accepted that having fewer hierarchical levels creates greater operating efficiency.

TRUE A powerful trend for U.S. businesses over the past few decades has been to reduce the number of hierarchical layers. Most executives today believe that fewer layers create a more efficient, fast-acting, and cost-effective organization.

Vic works on an automobile assembly line. His job is to complete the final installation of the GPS for each automobile that is on the line. The job is quite defined, and he has been highly trained. Vic is most likely supervised using a wide span of control.

TRUE A wide span of control is best used under particular circumstances including when the work is clearly defined and unambiguous and the subordinates are highly trained, as is the case with Vic's job.