Shared Flashcard Set

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Understanding Business Chapter 8
Study set for Intro to Business class based on the book by Nickels
140
Business
02/29/2012

Additional Business Flashcards

 


 

Cards

Term

(p. 202) Contemporary businesses are:
A. beginning to use Fayol's principles of organization to respond quickly to changes in the marketplace.
B. reorganizing to be more competitive.
C. performing the organization function to look good to prospective buyers.
D. adding to their workforce as part of adaptive change.

Definition
B. reorganizing to be more competitive.
Term

(p. 202) Organizing a business begins with: 
A. acquiring the necessary resources.
B. choosing the best qualified employees.
C. developing an efficient plan of action.
D. determining the work to be done.

Definition

D. determining the work to be done.

Term

(p. 202) Dividing the required work among a group of employees is called: 
A. departmentalization.
B. delegation of responsibility.
C. division of labor.
D. separation of control.

Definition

C. division of labor.

Term

(p. 202-203) Dividing tasks into smaller jobs is called: 
A. job enrichment.
B. job specialization.
C. departmentalization.
D. division of authority.

Definition

B. job specialization.

Term

(p. 203) The process of setting up individual functional units of the business to do specialized tasks is called: 
A. Departmentalization.
B. Division of labor.
C. Job specialization.
D. Delegation of authority.

Definition

A. Departmentalization.

Term

(p. 202) Job specialization is known to: 
A. minimize delegated authority and responsibility.
B. improve job performance.
C. create work teams and improve resource allocation.
D. establish procedures.

Definition

B. improve job performance.

Term

(p. 202) Due to changes in technology and competition, managing __________ has become a critical management skill. 
A. consumer demand
B. international markets
C. change
D. negative spiritual issues

Definition

C. change

Term

(p. 203) Which of the following is an example of a move to reorganize? 
A. Reducing the labor force within your business
B. Revising plans by creating contingency plans
C. Managing by objectives and clearing pathways for success
D. Developing a way to monitor financial success

Definition

A. Reducing the labor force within your business

Term

(p. 203) As depicted in the Reaching Beyond our Borders, box, "General Electric Looks for More Profits", in order to compete globally, corporate strategy should: 
A. not try to match the performance of competitors.
B. study competitors and try to match or exceed their performance.
C. not waste time and resources going beyond the competitor's strategy, but should move within striking distance.
D. centralize all services.

Definition

B. study competitors and try to match or exceed their performance.

Term

 (p. 202-203) The proven success of job specialization lies in the fact that: 
A. it leads to groupthink.
B. it avoids the pitfalls of division of labor, where workers become removed from thinking conceptually about the business.
C. it is a detractor to others who are thinking about entering your industry because it successfully creates barriers to entry.
D. it adds efficiency to the business's operation by identifying tasks that some do better than others.

Definition

D. it adds efficiency to the business's operation by identifying tasks that some do better than others.

Term

(p. 204) In the Making Ethical Decisions box, titled, "Safety versus Profit", which of the following statements best forms the theme of this passage? 
A. In the beginning, company procedures that require value judgments are often too costly. As the business grows, the owner can add ethical procedures to each job.
B. The principles of organization state that the only company objective is to gain profits for the owner(s) or stockholders. If your competitors are cutting corners with safety regulations, you should consider the same.
C. The only way to be profitable is to avoid risk. If new safety equipment becomes available that is applicable to your business, even if it slows productivity, you should adopt it.
D. The corporate culture you create as you begin your service will last a long time. Your workers will adopt your values.

Definition

D. The corporate culture you create as you begin your service will last a long time. Your workers will adopt your values.

Term

 (p. 202) As Bret prepares to open his new business, he has identified the tasks that need to be accomplished and has assigned employees to each task. This illustrates a: 
A. management departmentalization.
B. division of labor.
C. specialization of priorities.
D. mass production economies.

Definition

B. division of labor.

Term

 (p. 203) When Bret started his auto mechanic shop his business plan included a(n) _______________ that showed the relationship among employees in his organization and the lines of authority and responsibility. 
A. business view map
B. department categorization
C. organization chart
D. operating matrix grid

Definition

C. organization chart

Term

(p. 202-203) As your good friend ponders putting some structure to his/her graphic design business idea, which of the following do you not advise him/her to do? 
A. Prepare the non-changeable marketing plan for the next three years, including marketing analysis and marketing strategy
B. List the work that needs to be done such as 1) computer assisted design; 2) sales generation; 3) accounting and bookkeeping; 4) purchasing and supply ordering, and more
C. List who will do the various jobs, including who will perform the computer work, who will keep the books, and who will go out and create sales
D. Assign responsibility and authority to certain employees

Definition

A. Prepare the non-changeable marketing plan for the next three years, including marketing analysis and marketing strategy

Term

(p. 203) While adding structure to his graphic design business, including the allocation of resources for getting the job done, Jack knew that he would need to initially allocate a considerable amount of funds for the sales team to have face to face meetings with other businesses who needed website design and promotional materials. Since overall funds were limited, he worried about his employees using these funds for the stated purpose and in a manner that he would use them. As his business advisor, you explain: 
A. it always "takes money to make money", so he needs to realize that he will have to take risks
B. in order to achieve a productive business, he will have to trust those that he hires but control them carefully
C. it's difficult to monitor financial resources during the first year of business. This is the wild-cat year where you pull-out all stops and let the experts do the work it takes to make the sale
D. creating a corporate culture that emphasizes your values goes hand in hand with structuring your organization

Definition

D. creating a corporate culture that emphasizes your values goes hand in hand with structuring your organization

Term

(p. 205) The concept of ____________ suggests that as a firm produces more, the average cost of goods produced goes down. 
A. natural growth
B. survival of the fittest
C. cost enhancement
D. economies of scale

Definition

D. economies of scale

Term

(p. 205) Henri Fayol and Max Weber are best known for their contributions to: 
A. production theory.
B. marketing theory.
C. organization theory.
D. finance theory.

Definition

C. organization theory.

Term

(p. 205) Organization theorists emerged during the era of mass production, meaning: 
A. the development of ways to produce a large quantity of product efficiently.
B. the development of ways to purchase raw materials in bulk.
C. the decline in the cost of production due to an increase in the cottage industry.
D. the era when most companies adopted very similar methods of producing goods and services, which led to standardization of organizational design.

Definition

A. the development of ways to produce a large quantity of product efficiently.

Term

(p. 205) Fayol's _____________ principle states that each worker should report to one, and only one, boss. 
A. division of labor
B. unity of command
C. esprit de corps
D. comparative advantage

Definition

B. unity of command

Term

(p. 205) Fayol's ____________ principle says that tasks should be divided into areas of specialization. 
A. departmentalization
B. comparative advantage
C. division of labor
D. centralization

Definition

C. division of labor

Term

 (p. 206) Fayol's ____________ principle says that workers' attitudes would create an environment of pride and loyalty within an organization. 
A. esprit de corps
B. hierarchy of loyalty
C. unity of command
D. equity

Definition

A. esprit de corps

Term

(p. 206) __________ believed that managers were trustworthy and companies would do well if employees simply did what they were told. 
A. John Keynes
B. Adam Smith
C. Peter Drucker
D. Max Weber

Definition

D. Max Weber

Term

(p. 206) Max Weber used the term ________ to describe middle managers whose job was to implement the orders of top management: 
A. management
B. autocrats
C. staff personnel
D. bureaucrats

Definition

D. bureaucrats

Term

(p. 206) In Weber's view of a bureaucratic organization, the role of top management was to: 
A. empower workers and enable them to quickly respond to customer wants.
B. make decisions.
C. develop the rules and procedures needed to carry out the plans of bureaucrats.
D. directly supervise front-line employees to better control operations.

Definition

B. make decisions.

Term

 (p. 206) In Weber's view of a bureaucratic organization, the organization demanded: 
A. a spirit of pride and loyalty among the workers.
B. cross-functional teams.
C. clearly established rules and guidelines that were to be precisely followed.
D. self-managed teams.

Definition

C. clearly established rules and guidelines that were to be precisely followed.

Term

(p. 207) The line of authority that moves from the top of a hierarchy to the lowest level is called the: 
A. chain of logic.
B. chain of command.
C. organizational design.
D. delegation of contingent authority.

Definition

B. chain of command.

Term

(p. 207) A(n) __________ consists of one person at the top of the organization and many levels of managers who are responsible to that person. 
A. hierarchy
B. oligarchy
C. inverted organization
D. informal organization

Definition

A. hierarchy

Term

(p. 207) In a bureaucratic organization: 
A. departments communicate with each other on a regular basis.
B. employees follow strict rules and regulations.
C. customer satisfaction is the number one priority.
D. first-line workers are empowered to respond to the needs of customers.

Definition

B. employees follow strict rules and regulations.

Term

(p. 207) One advantage of a bureaucratic organization is that: 
A. it is very responsive to the wants and needs of customers.
B. there are very few layers of management.
C. it encourages cooperation among different departments within the organization.
D. employees know they are expected to follow the rules and regulations

Definition

D. employees know they are expected to follow the rules and regulations.

Term

(p. 207) ______________ organizations are characteristic of many layers of management and function with well-defined rules and procedures. 
A. Matrix
B. Inverted
C. Ordered
D. Bureaucratic

Definition

D. Bureaucratic

Term

(p. 205) Economies of scale: 
A. are available to small firms but not to large firms due to management inefficiencies.
B. are achieved when a firm reduces its average cost of production as it produces more.
C. can be avoided by purchasing supplies and raw materials in large quantities.
D. help explain the success of small businesses.

Definition

B. are achieved when a firm reduces its average cost of production as it produces more.

Term

(p. 206) Max Weber favored which of the following? 
A. Inverted organizations
B. Worker participation in decision making
C. Staffing and promotions based on qualifications
D. Flat organizations

Definition

C. Staffing and promotions based on qualifications

Term

(p. 205) Fayol believed that decision-making authority should remain in the hands of top management: 
A. in small organizations, but should be delegated to middle and first-line managers in large organizations.
B. in large organizations, but could be delegated to middle and first-line managers in small organizations.
C.
 in all types and sizes of organizations.
D. only in organizations subjected to significant government regulation.

Definition

A. in small organizations, but should be delegated to middle and first-line managers in large organizations.

Term

(p. 205) Which of the following correctly identifies the explanation behind the unity of command principle of management? 
A. All workers must share the same goal
B. Every firm has one strong leader, and everyone should support that individual
C. Workers can become frustrated and confused if they have more than one boss
D. All authority should rest with top management, since only top managers carry the responsibility of bad decisions

Definition

C. Workers can become frustrated and confused if they have more than one boss

Term

 (p. 206) If companies follow the theories of Fayol and Weber, which of the following scenarios is likely to result? 
A. Organization design will be benefit by the emergence of quick decision-making
B. Organization design will eliminate systems of hierarchy and chains of command due to their hindrance of esprit de corps
C. Organizations that grow will develop several layers of management and the time that it takes to make a decision will increase
D. There will be a significant reduction of work force due to specialization and departmentalization

Definition

C. Organizations that grow will develop several layers of management and the time that it takes to make a decision will increase

Term

(p. 206) Which of the following statements most closely identifies the problem with adopting Fayol's principles of organization design for contemporary businesses? 
A. Leaving some decision-making power to middle management had the effect of minimizing the effort and results that management would put into the other historical principles of organization
B. The rule making that developed from these principles created organizations that didn't respond quickly to customer needs
C. The principles of Fayol and Weber hampered a firm's ability to determine if it was profitable
D. Authority and responsibility quickly became unrelated

Definition

B. The rule making that developed from these principles created organizations that didn't respond quickly to customer needs

Term

(p. 207) Campbell is a middle manager for a bureaucratic organization. According to Max Weber's views on bureaucratic organizations, Campbell's function within the organization is to: 
A. make key operating decisions.
B. evaluate the daily performance of first-line employees.
C. ensure the organization achieves esprit de corps.
D. implement the decisions of top management.

Definition

D. implement the decisions of top management.

Term

 (p. 205) At Green Acres Fencing Company, eight employees each perform various aspects of the company's work. One person does sales, four perform installation; one purchases materials; one does billing; one performs after-sales inspections. This type of organization reflects Fayol's principle of: 
A. division of labor.
B. equity.
C. unity of command.
D. hierarchy of authority.

Definition

A. division of labor.

Term

 (p. 205) Sarah is a designer for a business that installs underground sprinkler systems for residential and commercial customers. Sarah designs and presents systems to prospective customers. Brothers Tom and Bill share the ownership responsibilities. Tom is in charge of commercial accounts and Bill is in charge of residential accounts. Sometimes Tom and Bill double book Sarah's time, creating frustration and animosity. Since they share supervisory responsibility, there is no clear way to decide whose accounts are most important. This type of situation represents a violation of Fayol's ____________ principle. 
A. division of labor
B. clarity of objective
C. priority of assignment
D. unity of command

Definition

D. unity of command

Term

(p. 206) Bill, a financial manager at Carlyle Bank and Trust always strives to treat each subordinate with respect and fairness. Bill's treatment of employees is an example of Fayol's principle of: 
A. unity of command.
B. equity.
C. empowerment.
D. order.

Definition

B. equity.

Term

(p. 207) John recently accepted a job in the marketing department with the Burbank Bagel Boys. After just a few days on the job, John learned that the company has many layers of management, and seems to have a rule to cover almost every situation. These conditions suggest that Burbank Bagel Boys is a(n): 
A. cross-functional organization.
B. decentralized organization.
C. oligopolistic organization.
D. bureaucratic organization.

Definition

D. bureaucratic organization.

Term

(p. 207) FairviewCommunity College is a multi-district college with four campuses. Each campus has one president, two vice presidents, five deans, 12 department chairs, over 100 faculty members, and several persons in support roles. The presidents from each campus report to four vice-chancellors and the vice-chancellors report to the chancellor. It is clear that Fairview has a well-defined _____________. 
A. channel of academic culture
B. chain of command
C. responsibility environment
D. bureaucratic reallocation

Definition

B. chain of command

Term

Andrew's company is a bureaucratic organization. Andrew is likely to encounter which of the following conditions? 
A. Real time decisions
B. Cross-functional teams
C. Empowerment of first line employees to better serve customers
D. Many layers of management

Definition

D. Many layers of management

Term

(p. 205) The management at Patriot Mills works hard to ensure that no one in its organization has more than one boss and all workers are treated with fairness and respect. Additionally, the firm divides the work into areas of specialization so that everyone knows to whom they should report. The management of Patriot Mills reflects the ideas and principles of: 
A. John M. Keynes.
B. Peter Drucker.
C. Karl Marx.
D. Henri Fayol.

Definition

D. Henri Fayol.

Term

(p. 206) As a manager of a retail clothing store, Lance favors detailed job descriptions, formal rules and regulations, detailed records, and standardized procedures. He also believes that staffing and promotion decisions should be based strictly on the qualifications of the people under consideration. Lance's attitudes suggest that he is strongly influenced by the ideas of: 
A. Ralph Nader.
B. Max Weber.
C. Karl Marx.
D. Adam Smith.

Definition

B. Max Weber.

Term

(p. 206) Which of the following statements would best summarize Max Weber's views on the role of workers in an organization? 
A. Workers should be empowered to do whatever it takes to satisfy the needs of customers
B. Workers will be promoted within the organization depending upon "who they know", rather than "what they know"
C. Workers should simply follow well-defined procedures
D. Although top managers must ultimately make the decisions, workers are an important creative resource for a firm, and top management should listen to their ideas

Definition

C. Workers should simply follow well-defined procedures

Term

(p. 207) Mike prepared a paper for his class about organizational styles used in business. He found that one reason the traditional bureaucratic style is less popular than in the past is that: 
A. business organizations are much larger than they once were.
B. restructuring has not produced the increased efficiency that was expected.
C. the chain of command clearly identifies areas of responsibility.
D. today's workforce is better educated and prefers a greater amount of decision-making involvement in their jobs.

Definition

D. today's workforce is better educated and prefers a greater amount of decision-making involvement in their jobs.

Term

 (p. 208) Which of the following determines the degree of decentralization a firm might use? 
A. The degree to which lower level management is empowered to make decisions.
B. The chain of command used to follow the flow of authority from top of the hierarchy to the lowest levels.
C. The geographical area served by the firm's operations.
D. The degree of product standardization desired by the marketplace.

Definition

A. The degree to which lower level management is empowered to make decisions.

Term

(p. 208) In a(n) _____________ organization, decision-making authority is concentrated at the top level of management. 
A. bottom-up
B. decentralized
C. inverted
D. centralized

Definition

D. centralized

Term

(p. 208) _______________ means that decision-making authority is delegated to lower-level managers and employees. 
A. Uniformity of authority
B. Decentralized authority
C. Specification of authority
D. Standardized authority

Definition

B. Decentralized authority

Term

 (p. 209) As compared to a centralized management structure, which of the following is a disadvantage of the decentralized management structure? 
A. Less responsive to customers
B. Less empowerment
C. Weakened corporate image
D. Lower morale away from corporate headquarters

Definition

C. Weakened corporate image

Term

(p. 209) As compared to the decentralized management structure, which of the following is a disadvantage of the centralized management structure? 
A. Potential for inter-organizational conflict
B. Less top management control
C. Less efficient
D. Complex distribution system

Definition

A. Potential for inter-organizational conflict

Term

(p. 208) The optimum number of subordinates a manager can supervise is referred to as the: 
A. manager-subordinate ratio.
B. chain of command.
C. employee quota.
D. span of control.

Definition

D. span of control.

Term

(p. 209) The span of control for a manager: 
A. should never exceed 7 subordinates.
B. is no longer a relevant issue in today's computerized offices.
C. depends on a number of factors, and can vary from one manager to another.
D. varies somewhat from manager to manager, but most managers operate best with a span of control of about 9 employees.

Definition

C. depends on a number of factors, and can vary from one manager to another.

Term

(p. 209) Due to more emphasis on empowerment and more talented and better-educated lower level management, span of control in organizations has ___________. 
A. increased
B. decreased
C. become an obsolete term in organization design
D. led to tall organizations

Definition

A. increased

Term

(p. 209) An organization that consists of many layers of management is referred to as a(n) ____________ organization. 
A. flat
B. wide
C. tall
D. deep

Definition

C. tall

Term

(p. 209) The ________ an organization's structure, the ________ the span of control. 
A. flatter; wider
B. flatter; narrower
C. taller; wider
D. taller; flatter

Definition

A. flatter; wider

Term

(p. 209) An organization with only a few layers of management is known as a(n): 
A. tall organization.
B. flat organization.
C. leveraged organization.
D. coordinated organization.

Definition

B. flat organization.

Term

(p. 209) In recent years, large organizations have tried to improve their efficiency in communication and decision making by: 
A. creating specific rules for everyone to follow.
B. eliminating several layers of management.
C. restructuring into a bureaucratic organization.
D. reducing the span of control for managers.

Definition

B. eliminating several layers of management.

Term

(p. 210) ________ refers to the process of dividing organizational functions (sales, production, accounting/bookkeeping) into separate units. 
A. Coordination
B. A chain of command
C. Empowerment
D. Departmentalization

Definition

D. Departmentalization

Term

(p. 210) The traditional technique used to departmentalize an organization is by: 
A. function.
B. customer group.
C. geographic area.
D. production process.

Definition

A. function.

Term

 (p. 211) Which of the following is considered to be a disadvantage of functional departmentalization? 
A. There may be a lack of communication among the different departments
B. Employees must develop skills in depth
C. The company must achieve economies of scale
D. Top management has to direct and control department activities

Definition

A. There may be a lack of communication among the different departments

Term

(p. 210) Which of the following is considered to be an advantage of functional departmentalization? 
A. Employees begin to identify with their department and its goals rather than with the goals of the entire organization
B. People in the same department tend to think very differently
C. Departments are isolated from one another
D. Employee skills can be developed in depth

Definition

D. Employee skills can be developed in depth

Term

 (p. 209) Within its production department, Sooner Manufacturing has shift leaders, supervisors, assistant plant managers, plant managers, product group managers, assistant division managers, division managers, an assistant vice president for production, and a vice president in charge of production. Given its multiple layer management structure, Sooner Manufacturing is an example of a(n) ____________ organization. 
A. tall
B. wide
C. cross-functional
D. decentralized

Definition

A. tall

Term

(p. 208-209) Which of the following factors help determine a manager's span of control? 
A. The number of global competitors
B. The level of standardization of the work to be done
C. Method of accounting for production
D. Form of business ownership

Definition

B. The level of standardization of the work to be done

Term

(p. 208) Organizations that require consistent production standards to help create a high quality public image would tend to favor: 
A. centralized authority.
B. an inverted organization.
C. a high level of employee empowerment.
D. flat organizational structures.

Definition

A. centralized authority.

Term

(p. 209) Today's preference to flat vs. tall organization structures is mainly due to a flat organization's ability to: 
A. encourage esprit de corps among employees in various departments.
B. increase the cost of labor through economies of scale.
C. respond readily to customer demands.
D. increase sales through multiple customer contacts by several layers of management.

Definition

C. respond readily to customer demands.

Term

 (p. 208) Greenwave Garden Centers is a national chain of discount gardening stores. The top management at Greenwave realizes that different regions of the United States have very different climates and soil conditions, so they give regional managers a great deal of freedom to decide exactly what types of plants, fertilizers, and other items to stock and how to best market these products. Greenwave is an example of a _______________ organization. 
A. bureaucratic
B. top down
C. free form
D. decentralized

Definition

D. decentralized

Term

(p. 210) HipHop Music Company assigns workers to departments based on similar skills. Currently, the company has a marketing department, a production department, a finance department, and a human resources department. This suggests that HipHop departmentalizes by: 
A. process.
B. function.
C. user group.
D. tradition.

Definition

B. function.

Term

(p. 211) Gangsta Industries produces a variety of anti-crime and safety products such as burglar alarms, smoke detectors, surveillance cameras, and specialty locks. Gangsta sells to households, businesses, and government agencies. They have found that each market requires a different marketing strategy. Gangsta would probably benefit from departmentalization by: 
A. function.
B. process.
C. customer type.
D. market opportunities.

Definition

C. customer type.

Term

 (p. 208) As the head of the engineering department for her company, Jody works with her team on complex and challenging projects. The level of detail in this work requires Jody to spend a significant amount of time with each team member, providing advice and support. Due to the complexity and time involvement of each project, Jody has a(n) ________ span of control. 
A. wide
B. narrow
C. unlimited
D. functional

Definition

B. narrow

Term

(p. 210) Vaughn Studios organizes its operations by activity, such as production, marketing, accounting, and finance. Vaughn utilizes _____________ departmentalization in order to maximize their efficiency: 
A. product
B. customer
C. functional
D. standardized

Definition

C. functional

Term

(p. 211) Springfield National Bank organizes its loan operations based on the market served, such as consumer, small business, and nonprofit organizations. Departmentalization based on ________ allows Springfield to better serve borrowers with different needs. 
A. function
B. geography
C. process
D. customer group

Definition

D. customer group

Term

(p. 210) JayLo Corporation has experienced rapid growth during its five years of existence. While still relatively small, JayLo is now big enough that Jennifer, the firm's CEO, has decided to organize the firm into functional departments. Jennifer can likely expect which of the following to occur? 
A. Quick company response to a change in the business environment
B. Excellent communications between different departments
C. Increase in scope of the performance of functions
D. Opportunities for employees to develop their skills in depth

Definition

D. Opportunities for employees to develop their skills in depth

Term

(p. 208) International Inns and ConferenceCenters [IICC], a national chain of professional event centers utilizes a centralized authority structure. Which of the following provides the most likely explanation for why management at IICC would favor centralized authority? 
A. Top management at IICC intends to empower its first-line employees
B. Top management at IICC wants to improve customer service response time
C. Top management desires to maintain a uniform image and high quality service
D. IICC wants to utilize a cross-functional organization

Definition

C. Top management desires to maintain a uniform image and high quality service

Term

(p. 209) As a response to a rapidly changing marketplace, Idea Electronics found it necessary to reorganize, including a significant downsize of its middle management. This action will likely result in ___________. 
A. acquiring additional firms
B. flattening the organization and empowering employees, allowing them to get closer to the customer
C. increasing the size of its traditional departments to handle 24/7 operations
D. centralizing its decision making to better control its total quality management program

Definition

B. flattening the organization and empowering employees, allowing them to get closer to the customer

Term

(p. 211) During the past six years, the marketing department manager at Creative Concepts International made a strong push to hire mover/shaker professionals that had superior performance records prior to joining this company. It didn't take long for these enthusiastic marketers to recognize the many talents within their department. They marveled at how much they were like each other and how they seemed to agree with each other's work styles and ideas. After a while, it became difficult for others in the organization to present to this group. If the idea did not originate within the marketing department, marketers did not give it much credence. Management counselors would describe this phenomenon as ______. 
A. departmentalization clique
B. inter-office competition
C. forward thinking friction
D. groupthink

Definition

D. groupthink

Term

(p. 209) Management at Hottie Potatee, a nationwide potato bar chain, believes that its customers value a predictable and consistent level of service and quality. When customers stop at one of its potato bar chain restaurants anywhere in the United States, they should know what to expect in terms of menu, price and quality. In order to maintain this consistency, Hottie Potatee adopted a(n) ______ structure. 
A. centralized authority
B. decentralized authority
C. hybrid authority
D. origination authority

Definition

A. centralized authority

Term

(p. 213) A ____________ organization is characterized by direct two-way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with all people reporting to only one supervisor. 
A. matrix
B. cross-functional
C. line
D. line-and-staff

Definition

C. line

Term

(p. 213) __________ are responsible for directly achieving organizational goals. 
A. Organizational specialists
B. Line personnel
C. Chain of command managers
D. Staff personnel

Definition

B. Line personnel

Term

(p. 213) Employees who perform functions that advise and assist line personnel are known as: 
A. middle managers.
B. empowered workers.
C. secondary employees.
D. staff personnel.

Definition

D. staff personnel.

Term

(p. 213) Which of the organization models follows all of Fayol's traditional management rules? 
A. Line organizations
B. Line-and-staff organizations
C. Cross-functional teams
D. Matrix

Definition

A. Line organizations

Term

(p. 213) Staff positions in an organization: 
A. support and assist the line positions.
B. are superior to line positions.
C. are less well-paid than line positions.
D. are ways to employ past CEOs until they retire.

Definition

A. support and assist the line positions.

Term

(p. 214-215) In a _____________ organization, specialists from different parts of the organization are brought together on a temporary basis to work on specific projects. 
A. matrix
B. line
C. line-and-staff
D. centralized

Definition

A. matrix

Term

(p. 214) Line-and-staff organizations work well in organizations with: 
A. operations in high-growth industries.
B. stiff competition.
C. short product life cycles.
D. a relatively unchanging environment.

Definition

D. a relatively unchanging environment.

Term

(p. 215) Matrix organizational structures were first developed in: 
A. Japan.
B. the aerospace industry.
C. the dot com Internet industry.
D. the chemicals industry.

Definition

B. the aerospace industry.

Term

(p. 216) Which of the following was created as a solution to the temporary nature of the matrix structure? 
A. Line organizations
B. Cross-functional self-managed teams
C. Line-and-staff organizations
D. Network organizations

Definition

B. Cross-functional self-managed teams

Term

 (p. 216) Which of the following describes a group of employees from different departments working together on a long-term basis? 
A. Focus group
B. Mixed function groups
C. Cross-functional self-managed teams
D. Intrapraneurial teams

Definition

C. Cross-functional self-managed teams

Term

(p. 216) Cross-functional self-managed teams work best when ________________. 
A. leadership is shared
B. there are at least two line and staff mangers on the team
C. the teams consist of members of only two functional units
D. The academic levels of all members are comparable

Definition

A. leadership is shared

Term

(p. 213) Which of the following is an advantage of a line organization in a large business? 
A. It does not require specialists to advise people along the line
B. Responsibility and authority are clearly defined
C. Each worker has several supervisors
D. It is very flexible

Definition

B. Responsibility and authority are clearly defined

Term

(p. 213) Which of the following positions would be classified as a staff position? 
A. An assembly line worker for a major auto manufacturer
B. The chief executive officer of a small corporation
C. A sales manager for a chain of clothing stores
D. An attorney in the legal department of a manufacturing corporation

Definition

D. An attorney in the legal department of a manufacturing corporation

Term

(p. 215) Which of the following is an advantage of a matrix organization structure? 
A. It is much cheaper to staff than other organization models
B. It provides for efficient use of organizational resources
C. The project teams are permanent
D. It is a complex organization structure

Definition

B. It provides for efficient use of organizational resources

Term

(p. 216) Which of the following is true of cross-functional teams? 
A. Cross-functional teams are required not to share information across national boundaries
B. Employees on the teams are frustrated by organizational rules and regulations
C. Cross-functional teams work best when the voice of the customer is brought into the organization
D. Cross-functional teams are disbanded once the current project is complete

Definition

C. Cross-functional teams work best when the voice of the customer is brought into the organization

Term

(p. 216) The main difference between a matrix-style organization model and a cross-functional team is: 
A. the matrix model has a limit on the number of functional units who send an expert to join the team, whereas the cross-functional team does not.
B. the matrix model is a temporary arrangement, whereas the cross-functional team is a more permanent arrangement.
C. the matrix model shares leadership responsibilities within the group, whereas the cross-functional team does not.
D. the matrix model is a more permanent arrangement, whereas the cross-functional team is a temporary arrangement.

Definition

B. the matrix model is a temporary arrangement, whereas the cross-functional team is a more permanent arrangement.

Term

(p. 216) Which of the following would be the least likely to serve on a cross-functional team for the Discovery Corporation? 
A. A member of the Discovery marketing department
B. A production manager for a firm that is one of Discovery's major customers
C. A production manager for one of Discovery's main competitors
D. A representative of a firm that is one of Discovery's major suppliers

Definition

C. A production manager for one of Discovery's main competitors

Term

 (p. 213) The organizational structure of the U.S. Army's 1st Infantry Division provides for direct two-way lines of responsibility, authority, and communication running from the top to the bottom. Additionally, each person in the division reports to only one superior. The 1st Infantry Division is clearly an example of a(n): 
A. matrix organization.
B. functional organization.
C. line organization.
D. service organization.

Definition

C. line organization.

Term

(p. 213) Eileen works in the human resources department of a corporation with several hundred employees. Her main function is to advise and assist managers in other departments, such as marketing and production, when they make staffing decisions. Eileen's position would be classified as a(n) ___________ position. 
A. staff
B. line
C. first-line
D. secondary

Definition

A. staff

Term

(p. 216) Joe, a production engineer at Freestone Tires recently joined a team of specialists from other areas, such as marketing and finance. His long-term assignment to this team has produced several new products. Joe enjoys this work environment, in part because Freestone's management has given the team the freedom and flexibility to make decisions. A recent development is the inclusion of "outsiders" from Freestone's major distributors and suppliers on the team. It appears that Joe's team is a(n): 
A. interfunctional matrix organization.
B. multidivisional group think-tank.
C. multi-modal product development team.
D. cross-functional self-managed team.

Definition

D. cross-functional self-managed team.

Term

(p. 216) Barclay developed two interactive computer games. He didn't do it entirely alone. Last year he started a small company, hired two programmers, and a marketing graduate. He considers himself a cutting-edge kind of guy and wants to position his company the same. Soliciting your advice as to how he should structure his organization as he moves forward, you suggest that he hire a few potential customers to join his team of employees as product testers. And, maybe he should solicit globally. You are suggesting to Barclay that he put together a ___________. 
A. line organization model
B. line and staff organization model
C. matrix organization model
D. cross-functional team

Definition

D. cross-functional team

Term

(p. 214-215) Chang is a project manager at Paradox Industries. He is able to borrow specialists from the organization on a regular basis to assist in major projects. After the project ends, the specialists return to their functional units to await new assignments. Paradox Industries utilizes a: 
A. line organization model.
B. bi-functional organization model.
C. lateral transfer organization model.
D. matrix organization model.

Definition

D. matrix organization model.

Term

(p. 217) _____________ is using communications technology and other means to link organizations and allow them to work together on common objectives. 
A. Networking
B. Structural linking
C. Functional sharing
D. Strategic planning

Definition

A. Networking

Term

(p. 217) Which of the following describes an environment in which data is instantly available via the Internet to organizational partners? 
A. Networking
B. Real time
C. Virtual business
D. E-commerce

Definition

B. Real time

Term

(p. 217) Which term describes a company being so open to other companies working with it that electronic information is shared as if the companies were one? 
A. Web-based corporations
B. Webworking
C. Transparency
D. E-connected

Definition

C. Transparency

Term

(p. 217) Which of the following describes a temporary networked organization made up of replaceable firms that join and leave as needed? 
A. Web-based corporation
B. Benchmark outsourcing system
C. Network system
D. Virtual corporation

Definition

D. Virtual corporation

Term

(p. 218) The process of rating an organization's practices, processes, and products against the best of the world is known as: 
A. webworking.
B. outsourcing.
C. benchmarking.
D. core competencies.

Definition

C. benchmarking.

Term

 (p. 218) Which of the following describes the activity of a firm that assigns specific functions, such as accounting or legal work, to other organizations rather than performing these functions themselves? 
A. Functional sharing
B. Outsourcing
C. Benchmarking
D. Virtual distribution

Definition

B. Outsourcing

Term

(p. 218-219) __________ refer to those functions that an organization does as well as, or better than, any other organization in the world. 
A. Primary functions
B. Comparative strengths
C. Residual functions
D. Core competencies

Definition

D. Core competencies

Term

(p. 219) Young people today are often called __________ because they have never known life without the Internet. 
A. the high-tech heroes
B. Social networkers
C. digital natives
D. electronic eggheads

Definition

C. digital natives

Term

(p. 219) Which of the following are common responses of employees when faced with change? 
A. "That's the way we've always done things"
B. "Perhaps I'll be able to get a promotion now"
C. "I'm excited to learn something new"
D. "This should be easy to accept"

Definition

A. "That's the way we've always done things"

Term

(p. 219) Which of the following describes the redesigning of an organization so that it can more effectively and efficiently serve its customers? 
A. Reinventing
B. Restructuring
C. Radical reorganizing
D. Extroverted reorganizing

Definition

B. Restructuring

Term

(p. 220) An organization that has contact people at the top and the chief executive officer at the bottom is known as a(n): 
A. bureaucracy.
B. oligarchy.
C. improvised organization.
D. inverted organization.

Definition

D. inverted organization.

Term

(p. 220) Empowering employees to better serve customers requires __________ front-line employees. 
A. fewer
B. less training for
C. more support for
D. uniforms for

Definition

C. more support for

Term

(p. 218-219) _________ is the term used to describe those functions that a firm can do as well or better than others. It agrees to perform these functions in-house, rather than outsourcing. 
A. Benchmarks
B. Standard responsibilities
C. Operational requirements
D. Core competencies

Definition

D. Core competencies

Term

(p. 217) In today's competitive environment, cost containment is extremely important to survival. Which of the following increases efficiency in the production and distribution of goods? 
A. Personal computers
B. Real time data
C. Assembly lines
D. Self-managed teams

Definition

B. Real time data

Term

(p. 217) Which of the following statements best describes the evolution of organization design? 
A. Companies have evolved to cross-functional teams because line models and line and staff models have become too costly to maintain.
B. Most companies are finding that the stages of product development are much slower than in the past because new products are much more complicated in nature than products of several years ago. Matrix models work much better in the current environment.
C. The development of new technology allows for companies to be much more self-contained and able to maintain their competitive advantage due to more privacy.
D. Companies are now part of a vast network of global businesses, and part of a larger system.

Definition

D. Companies are now part of a vast network of global businesses, and part of a larger system.

Term

 (p. 218) Companies benefit today by inter-firm cooperation. One of the ways they cooperate is through networking. Another way is by seeking technological knowledge and learning new processes from other firms that usually fall outside of their respective industries. We call this: 
A. competency capturing
B. technology swapping
C. benchmarking
D. broadening the knowledge base

Definition

C. benchmarking

Term

. (p. 219) One of the most difficult management challenges today is managing change. This is because: 
A. change requires cooperation and an awareness of a need for change.
B. change requires a lot of bail-out money from the government.
C. change requires decentralization of decision-making.
D. change will invariably result in an inverted organization and management does not want to relinquish its position power in order to make that happen.

Definition

A. change requires cooperation and an awareness of a need for change.

Term

(p. 220) In an inverted organization, the job of management is to: 
A. closely monitor employee performance.
B. establish rules and regulations to guide worker behavior.
C. make all of the basic decisions.
D. assist and support front-line people.

Definition

D. assist and support front-line people.

Term

(p. 220) For an inverted organization to be effective, it requires: 
A. managers with strong position power.
B. managers who are both technologically savvy and conceptually savvy.
C. better educated, better trained, and better paid employees.
D. a focus on what is best for production.

Definition

C. better educated, better trained, and better paid employees.

Term

(p. 218-219) Independence Electronics prides itself as a world-class producer of components used in CD and DVD players. The outstanding performance of the production department indicates that this activity is one of the firm's: 
A. fiscal responsibilities.
B. core competencies.
C. benchmark assets.
D. target competitive advantages.

Definition

B. core competencies.

Term

(p. 218) Excite Enterprises, a corporation of amusement parks uses an accounting firm to handle the payroll and tax functions for the company. Using the services of another firm in this manner is an example of: 
A. outsourcing.
B. functional reassignment.
C. core competencies.
D. benchmarking.

Definition

A. outsourcing.

Term

Bull's-eye, a regional discount retailer, carefully watches and compares its operation with the operations of its closest rivals. This firm does: 
A. outsourcing.
B. functional positioning.
C. core competency ranking.
D. competitive benchmarking.

Definition

D. competitive benchmarking.

Term

(p. 217) HairTrend, a cosmetology trade publication, utilizes the resources of other organizations as needed. Business relationships are temporary and flexible. HairTrend is a networked organization made up of replaceable firms that join the network and leave it as needed. This unique organization is an example of: 
A. competitive benchmarking.
B. a virtual corporation.
C. core competency ranking.
D. real time transparency.

Definition

B. a virtual corporation.

Term

(p. 218) Whirlpond, a manufacturer of home appliances, has historically produced the components for their products. However, Whirlpond now contracts with other firms to produce these components. This strategy of __________ is a current trend among U.S. manufacturers. 
A. outsourcing
B. core positioning
C. foreign competency
D. competitive benchmarking

Definition

A. outsourcing

Term

(p. 220) Heather works as a sales representative for the Westerly Company. She really enjoys working for Westerly, because the company treats her and other sales representatives as highly valued employees. Sales reps at Westerly are given freedom and flexibility in their relationships with customers. While there are only a few layers of management at Westerly, Heather has found that these managers try their best to support and assist her efforts. Based on Heather's experience, it appears that Westerly is a(n): 
A. bureaucratic organization.
B. inverted organization.
C. tall organization.
D. casual organization.

Definition

B. inverted organization.

Term

(p. 220) The widely shared values within an organization that provide unity and cooperation to achieve common goals is together known as the: 
A. normative matrix.
B. predefined group values.
C. ethical system.
D. organizational culture.

Definition

D. organizational culture.

Term

 (p. 221) The ____________ of a business firm is the system that details lines of authority, responsibility, and position, similar to the structure on organization charts. 
A. matrix reloaded structure
B. formal organization
C. informal organization
D. normative design

Definition

B. formal organization

Term

(p. 221) All organizations have two organizational systems: 
A. the command system and the control system.
B. the formal organization and the informal organization.
C. the functioning system and backup system.
D. the primary organization and secondary organization.

Definition

B. the formal organization and the informal organization.

Term

 (p. 221) The __________ is the system of relationships that develop spontaneously as employees meet and form power centers. 
A. informal organization
B. bureaucratic structure
C. secondary organization
D. formal organization

Definition

A. informal organization

Term

(p. 221) In open organizations the informal organization can be: 
A. a hindrance to effective management.
B. an asset that promotes harmony among workers.
C. a roadblock to the corporate culture.
D. part of the formal organization.

Definition

B. an asset that promotes harmony among workers.

Term

(p. 221) The ___________ is the nerve center of the informal organization. 
A. organizational database
B. intranet
C. grapevine
D. company newsletter

Definition

C. grapevine

Term

(p. 221) The informal organization of a business is probably best suited to: 
A. give workers a clear idea of where they stand in the organization.
B. provide helpful guidelines about how to handle routine problems.
C. provide a mechanism that generates careful reasoned decisions about critical issues.
D. create a feeling of camaraderie among employees and encourage teamwork.

Definition

D. create a feeling of camaraderie among employees and encourage teamwork.

Term

(p. 221) A firm's formal organization would be better suited than its informal organization to: 
A. create an atmosphere of friendship and camaraderie among workers.
B. find answers to critical problems that require logical analysis.
C. find creative solutions to short-term problems.
D. find a way around bureaucratic rules and regulations in order to get things done quickly.

Definition

B. find answers to critical problems that require logical analysis.

Term

(p. 222) According to the Spotlight on Small Businesses box, titled, "Keeping that Small Company Feeling", the main idea is to: 
A. restore the old corporate culture.
B. develop a culture of innovation in large companies.
C. bring in new progressive managers.
D. implement a centralized form of management.

Definition

B. develop a culture of innovation in large companies.

Term

(p. 220) Zach recently got his Ph.D. in analytical chemistry and was fortunate to be asked to join the Weilman Lab at a prestigious eastern university. After a month on the job, he remarked to another graduate student at his former university that the spirit of help and cooperation at the Weilman lab was remarkable. He enjoyed going to work each day and sometimes exchanged calls with other lab partners in the evening with ideas to improve each other's experiments. Zach remarked, "Now I know why this lab is considered one of the best in the nation!" Zach is referring to: 
A. the formal organization.
B. the inverted organization.
C. the Balanced organization.
D. the organizational culture.

Definition

D. the organizational culture.

Term

(p. 221) When Eric Schmidt became the CEO of Google, he reported that the company in the hands of founders Larry Page and Sergey Brinn was running well, it just needed a little structure. CEO Schmidt helped develop: 
A. the innovative culture.
B. the informal organization.
C. the formal organization.
D. the grapevine.

Definition

C. the formal organization.

Term

(p. 221) Ashley experienced frustration with her new job at Walnut Securities, until she befriended a secretary from another department. Over lunch in the cafeteria, her new friend shared with Ashley the way things really work at Walnut Securities. Ashley quickly learned that: 
A. what she learned in her business classes didn't really help her in the real world.
B. an unofficial informal organization exists that she can utilize to help her do her job.
C. organizational culture can be negative.
D. not all businesses have a formal organization.

Definition

B. an unofficial informal organization exists that she can utilize to help her do her job.

Term

(p. 222) The Spotlight on Small Business, titled, "Keeping that Small Company Feeling", illustrates that: 
A. maintaining a strong informal organization is vital in today's business environment.
B. maintaining a strong informal organization is so much easier to effect in large companies because they have the money to make it happen.
C. although the informal organization may provide fun and diversion in the workplace it breeds unethical behavior which only the formal organization can derail.
D. getting carried away with maintaining a small company feeling can stifle innovation and growth.

Definition

A. maintaining a strong informal organization is vital in today's business environment.

Term

(p. 221) Carlos is the person to see in the welding department if you are a new employee. While he is not a manager, he is the person that most of the others in the department look to for advice and assistance. Carlos is an important member of the firm's: 
A. supervisory management.
B. participatory control.
C. informal organization.
D. closet cabinet.

Definition

C. informal organization.

Term
(p. 222) One of Javier's coworkers was recently promoted to a middle management position at their company. He seems to have quickly distanced himself from Javier and their other coworker, Carlos. In fact, yesterday Carlos described the situation by saying, "He's gone to the dark side." Javier understands what Carlos means because management keeps themselves removed from other employees, and seldom seriously solicit ideas for improvements or change from those in the trenches. The disadvantage in continuing this type of organizational culture is: 
A. nobody takes management seriously.
B. the company will have to look outside the firm for new managers.
C. small, incremental improvements rather than radical change will become the norm.
D. the informal organization can hinder effective management.
Definition
D. the informal organization can hinder effective management.