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07
Student:
1. The process by which managers set the structure of working relationships among workers in an
organization is called organizing.
True False
2. Organizational design reflects the organization's mission statement irrespective of the situation.
True False
3. According to contingency theory, there can be only one best way to design an organization's
structure.
True False
4. The nature of an organization's human resources is an important determinant of the organization's
structure.
True False
5. In a quickly changing external environment, decentralizing authority and empowering lower-level
employees tend to make organizations less flexible and slow in making decisions.
True False
6. A differentiation strategy aimed at increasing the customer's perception of an organization services
usually succeeds even with an inflexible structure.
True False
7. Managers lose control over their different businesses by moving to a more flexible structure.
True False
8. The more nonroutine the technology an organization uses, the easier it is for managers to control and
regulate the technology.
True False
9. Routine technologies are characterized by low task variety and high task analyzability.
True False
10. The more skilled its workforce, the less likely an organization is to use a flexible, decentralized
structure.
True False
11. The first step in organizational design is job design.
True False
12. Division of labor among employees is the result of the differentiation process.
True False
13. Increasing the number of different tasks in a job by changing the division of labor is known as job
enrichment.
True False
14. Increasing the degree of responsibility that a worker has over his/her job is known as job
simplification.
True False
15. The job characteristics model explains how managers can make jobs more interesting and motivating.
True False
16. The extent to which the design of a job requires the worker to perform all of the tasks that are required to
complete the job successfully is known as the task significance.
True False
17. The degree to which a manager feels that his/her job is meaningful because of the way that it affects other
people is known as the autonomy of the job.
True False
18. The degree to which a job design gives a worker the freedom to schedule his/her tasks and to decide how
to carry them out is known as the task identity.
True False
19. A functional structure is an organizational structure composed of all of the departments that an
organization needs to produce its products.
True False
20. It is easier for managers to monitor and evaluate subordinates' performance in a functional structure than
a divisional structure.
True False
21. As an organization grows and begins to produce a wider range of products, a functional structure
becomes more efficient and effective.
True False
22. A division is a collection of departments that work together within the organization to produce the
product.
True False
23. Using a market structure, managers place each distinct product line or business in its own self-contained
division and give divisional managers the responsibility for devising an appropriate business-level
strategy to allow the division to compete effectively in its industry.
True False
24. When managers organize divisions according to the types of customer to whom they market their
products, they are focusing on a product structure.
True False
25. To satisfy the needs of diverse customers, a company might adopt a customer structure, which groups
divisions according to the particular kinds of customers they serve.
True False
26. When managers group workers both by function and by product within the same structure, they are said
to be following the matrix structure.
True False
27. Team members in a market structure are known as two-boss employees.
True False
28. A group of managers from different departments working together on an organizational task is known as
a cross-functional team.
True False
29. The "chain of command" of an organization is the hierarchy of authority for that organization.
True False
30. The number of subordinates who report directly to a manager is known as the hierarchy of authority for
that manager.
True False
31. A line manager is someone in the chain of command who has formal authority over people and
resources.
True False
32. A flat organization has fewer levels of authority relative to the size of that organization.
True False
33. The idea that top management should design an organization with as few levels of authority as is needed
to conduct the business of the organization in an efficient and effective manner is known as the minimum
chain of command.
True False
34. Decentralization makes an organization flexible as the organization grows and becomes taller.
True False
35. Too much decentralization has disadvantages for an organization.
True False
36. The lesser the complexity of an organization's structure, the greater is the need for coordination among
people, functions, and divisions to make the organizational structure work efficiently and effectively.
True False
37. Liaison roles increase the coordination among the business units of an organization.
True False
38. Task forces are often called ad hoc committees because they are temporary.
True False
39. The more complex an organization, the less important the use of cross-functional teams become to the
organization.
True False
40. A strategic alliance is a series of global alliances that one or several organizations create with suppliers,
manufacturers, and/or distributors to produce and market a product.
True False
41. A network structure is a series of global strategic alliances that one or several organizations create with
suppliers, manufacturers, and/or distributors to produce and market a product.
True False
42. The ability of managers to use outside suppliers and manufacturers to produce goods and services, has led
many researchers and consultants to popularize the idea of a boundaryless organization.
True False
43. Business-to-business (B2B) network is a company-specific virtual information system that allows
workers to share their knowledge and expertise and find others to help solve ongoing problems.
True False
44. The process by which managers establish the structure of working relationships among workers of the
organization is known as:
A. planning.
B. leading.
C. organizing.
D. controlling.
E. directing.
45. According to theory, managers should choose a structure that fits the circumstances affecting their
organization the most.
A. contingency
B. design
C. agency
D. equity
E. expectancy
46. According to Charles Perrow, which of the following factors determines the routineness of technology?
A. Task stability
B. Task analyzability
C. Task creativity
D. Task certainty
E. Task utility
47. Which of the following is the number of new or unexpected problems or situations that a person or
function encounters in performing tasks or jobs?
A. Task uncertainty
B. Task stability
C. Task analyzability
D. Task creativity
E. Task variety
48. Which of the following is the degree to which programmed solutions are available to people or functions
to solve the problems they encounter?
A. Task uncertainty
B. Task stability
D. Task creativity
E. Task variety
49. Managers should design flexible structures, characterized by decentralized authority and empowered
employees, for their organization when its:
A. environment is stable.
B. technology is simple.
C. workforce is highly skilled.
D. strategy is well understood.
E. strategy is simple.
50. The greater the level of uncertainty in the organization's environment, the:
A. less likely managers are to design a structure and a culture that is innovative.
B. less likely managers are to design a structure and a culture that changes quickly.
C. more likely managers are to design an organizational structure that is formal and controlling.
D. more likely managers are to design a structure and a culture that are flexible.
E.more likely managers are to design an organizational culture that defines how employees should act in
particular situations.
51. The process by which managers decide how to divide into specific jobs the tasks that have to be
performed to provide customers with goods and services is known as job:
A. design.
B. enlargement.
C. simplification.
D. rotation.
E. enrichment.
52. A Place for Pizza encourages the basic division of labor among "chefs" and "food servers" where chefs
perform all tasks involved in actual cooking and food servers perform all tasks involved in giving food to
the customers. Which of the following grouping tasks is A Place for Pizza implementing?
A. Functional structure
B. Job design
C. Divisional structure
D. Product structure
E. Matrix structure
53. The Pizza Man combined the jobs of "chef" and "food server" into a single job description. Which of the
following grouping tasks is The Pizza Man implementing?
B. Divisional structure
C. Product structure
D. Job design
E. Matrix structure
54. A manager increases the number of tasks that a subordinate has to do in order to make the job more
interesting for the subordinate. Which of the following best describes this process?
A. Job simplification
B. Job enlargement
C. Job enrichment
D. Task identity
E. Task significance
55. A manager redesigns the job of a subordinate so that the subordinate has more responsibility over his/her
job. Which of the following best describes this process?
A. Job enlargement
B. Job simplification
C. Job enrichment
D. Job reduction
E. Task identity
56. The extent to which a job requires the worker to use a wide range of knowledge and abilities is known
as:
A. task identity.
B. task significance.
C. autonomy.
D. skill variety.
E. feedback.
57. The extent to which a job requires a worker to perform all of the tasks that are required to complete the
job is known as:
A. skill variety.
B. task identity.
C. task significance.
D. feedback.
E. autonomy.
58. The degree to which a manager feels that his/her job is "meaningful" because of the way in which the job
affects other people is known as:
A. skill variety.
B. feedback.
C. autonomy.
D. task significance.
E. task identity.
59. Mr. Pierson, an economics lecturer, reads an article in the newspaper which says that Roland, one of his
students, has been appointed the CEO of a multinational corporation. At this moment, Mr. Pierson would
have the highest of which of the following characteristics?
A. Autonomy
B. Task identity
C. Task significance
D. Skill variety
E. Feedback
60. The degree to which a job allows the worker to schedule the tasks of the job and to decide how to carry
out these tasks is known as:
A. autonomy.
B. task identity.
D. skill variety.
E. feedback.
61. A doctor who works with people suffering from malignant diseases has than the salesperson of a
prescription drug store.
A. a low degree of feedback
B. less autonomy
C. less skill variety
D. less task identity
E. higher task significance
62. A sales executive who is given the authority to choose the prospective customers he will make a personal
sales call on, has than an order taker at a restaurant.
A. less autonomy
B. less task significance
C. less task identity
D. more autonomy
E. less skill variety
63. The extent to which a job gives the worker direct and clear information about how well the worker is
performing the job is known as:
A. task identity
B. feedback
C. autonomy
D. task significance
E. skill variety
64. Which of the following is an organizational structure comprising of all the departments that an
organization requires to produce its goods or services?
A. Autonomous structure
B. Provisional structure
D. Transitional structure
E. Functional structure
65. The units of Zach Ltd. are grouped together such that the functions that work together to produce a
product are grouped together. This is an example of which of the following structures?
A. Market structure
B. Transitional structure
C. Organic structure
D. Functional structure
E. Divisional structure
66. At Xen Ltd., each product line is managed within a division. In each of these divisions, the division
manager is responsible for creating the business-level strategy for the product line. What type of structure
is the organization using?
A. Geographic structure
B. Market structure
E. Transitional structure
67. Xpress Delivery Corporation organizes its managers according to the different regions of the world in
which the managers work. This is an example of which of the following organizational structures?
A. Market structure
B. Customer structure
D. Matrix structure
E. Geographic structure
68. Which of the following structures is most likely to be used by managers pursuing a multidomestic
strategy?
A. Market structure
C. Global geographic structure
D. Global transitional structure
E. Global product structure
69. When customers around the world are willing to buy the same kind of product, or slight variations
thereof, managers are more likely to pursue a structure.
A. market
B. customer
C. global geographic
D. global transitional
E. global product
70. In the design of an organization, another name for "market structure" is structure.
A. product
B. geographic
C. customer
D. functional
E. matrix
71. Which of the following structures allows managers to be responsive to the needs of their customers and
allows them to act flexibly in making decisions in response to customers' changing needs?
A. Market structure
B. Geographic structure
C. Functional structure
D. Matrix structure
72. When designing an organization, if managers are grouped both by function and by product at the same
time, the organizational structure being used is the structure.
A. market
B. geographic
C. functional
D. matrix
E. divisional
73. In which type of organizational design are employees correctly referred to as two-boss employees?
A. Product structure
B. Matrix structure
C. Geographic structure
74. In Cosmeto & Co., Pat is assigned to a team to develop a new kind of shampoo. He reports to both the
marketing manager and the personal care product manager. The organization is pursuing which of the
following organizational structures?
A. Matrix structure
B. Global product structure
C. Customer structure
D. Geographic structure
E. Market structure
75. When different managers from different functional areas are brought together to work on an
organizational task, they are known as a(n) team.
A. functional
B. co-dependent
C. cross-functional
D. independent
E. virtual
76. Another name for the organization's hierarchy of authority is the:
A. chain of command.
B. span of control.
C. corporate ladder.
D. unity of command.
E. organizational constitution.
77. The relative authority that each manager in the organization has from the CEO down to the lowest-level
manager is called the of the organization:
A. span of control
B. unity of command
C. corporate ladder
D. unity of direction
E. chain of command
78. Which of the following refers to the number of subordinates who report directly to a manager?
A. Unity of command
B. Hierarchy of authority
C. Chain of command
D. Span of control
E. Pecking order
79. Rusty is a project manager who has 15 executives reporting directly to him. This refers to which of the
following responsibilities of Rusty as a manager?
A. Unity of command
B. Span of control
C. Chain of command
D. Unity of direction
E. Hierarchy of authority
80. The manager of the human resources department of a company is a(n) manager.
A. line
B. product
C. staff
D. task force
E. operations
81. The idea that an organization's hierarchy should be designed with as few levels of authority as are
necessary to use the organization's resources in an efficient and effective manner falls under which of the
following principles?
A. Span of control
B. Centralization
C. Minimum chain of command
D. The unity of command
E. Decentralization
82. Organizations can keep their hierarchy flat by:
A. decreasing the span of control.
B. increasing the number of levels of management.
C. decentralizing authority.
D. centralizing authority.
E. decreasing autonomy.
83. Which of the following methods of allocating authority in an organization gives lower-level managers
and nonmanagerial employees the right to make important decisions about how to use organizational
resources?
A. Tall organizational structure
B. High span of control
C. Centralization of authority
D. Maximum chain of command
E. Decentralization of authority
84. allows an organization and its employees to behave in a flexible way even as the organization
grows and becomes taller.
A. Managing as a rule
B. Decentralizing authority
C. Decreasing the span of control
D. Decreasing autonomy
E. Increasing the number of levels of management
85. CoreSol Ltd. gives one manager in each of three departments (marketing, engineering, and production)
the responsibility of coordinating with each other to brainstorm new product ideas. The department
managers can increase coordination by establishing:
A. horizontal integration.
B. decentralization.
C. a liaison role.
D. vertical integration.
E. product departmental structure.
86. Which of the following is often known as the ad hoc committee?
A. Functional team
B. Cross-functional team
C. Managers with liaison roles
D. Managers with integrating roles
E. Task force
87. A temporary committee of managers from different functions or divisions is formed to solve a specific,
mutual problem. This committee is known as a:
A. standing committee.
B. confederate committee.
C. functional force.
D. task force.
E. cross-functional team.
88. Fern Motor Co. brings together senior managers from its marketing, R&D, manufacturing, accounting,
and finance departments to work on a project as a team, to design a new type of sport utility vehicle. In
this scenario, Fern Motor Co. creates a:
A. cross-functional team.
B. vertically integrated team.
C. mass-production team.
D. standing committee.
E. confederate committee.
89. Jason has been hired by Praltiz Inc., an IT firm, to increase coordination among functions or divisions to
achieve performance gains from synergies. What role is Jason hired to perform?
A. Liaison role
B. Centralization role
C. Consulting role
D. Integrating role
E. Promotional role
90. A(n) is a formal agreement that commits two or more companies to exchange or share their
resources in order to produce and market a product.
A. outsourcing alliance
B. task force alliance
C. continuous-process alliance
D. market structure alliance
E. strategic alliance
91. Tot Beverages creates a series of agreements with its suppliers, manufacturers, and distributors to
produce and market Zing cola. This is an example of which of the following organizational structures?
A. Decentralized structure
B. Vertically integrated structure
C. Network structure
D. Diversified product structure
E. Horizontally integrated structure
92. Alkyl Ltd., one of the leading shoe manufacturers, designs shoes using computer-aided design, and they
electronically store all new product information, including manufacturing instructions. When the
designers have finished their work, they electronically transmit all the blueprints for the new products to
a network of Southeast Asian suppliers and manufacturers with which Alkyl Ltd. has formed strategic
alliances. Instructions for the design of a new sole are sent to a supplier in India with instructions for the
leather uppers to a supplier in Bhutan. The strategic alliance Alkyl Ltd. follows is an example of a:
A. network structure.
B. decentralized structure.
C. vertically integrated structure.
D. diversified product structure.
E. horizontally integrated structure.
93. Alkyl Ltd., one of the leading shoe manufacturers, enters into a contract with Blinx-a foreign
manufacturer-to only manufacture its shoes. In this scenario, Alkyl Ltd. is following the
strategy.
A. franchising
B. licensing
C. green field venturing
D. outsourcing
E. exporting
94. Briefly explain organizational structure, organizational design, and contingency theory.
95. Identify the four factors that are important determinants of an organizational structure.
96. Explain briefly the two factors that make technology routine or complicated, according to Charles
Perrow.
97. Define job enlargement. What is its significance in an organization?
98. Discuss four ways in which a manager could redesign the job of a subordinate to enrich that subordinate's
job.
99. According to the job characteristics model, list and define the characteristics that determine how
motivating the job is.
100.Discuss the advantages and disadvantages of a functional structure of organization.
101.Describe the matrix structure and the concept of the "two-boss employees."
102.State the differences between a line manager and a staff manager.
103.Discuss the advantages and disadvantages of "decentralization" in organizational design.
104.Write a brief note on liaison roles, task forces, and cross-functional teams.
105.Define strategic alliance and network structure. Also, discuss their usage.
07 Key
1. The process by which managers set the structure of working relationships among workers in an
organization is called organizing.
TRUE
Organizing is the process by which managers establish the structure of working relationships among
employees to allow them to achieve organizational goals efficiently and effectively.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Jones - Chapter 07 #1
Learning Objective: 07-01 Identify the factors that influence managers choice of an organizational structure.
Topic: Designing Organizational Structure
2. Organizational design reflects the organization's mission statement irrespective of the situation.
FALSE
Organizational design is the process by which managers make specific organizing choices about tasks
and job relationships that result in the construction of a particular organizational structure.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
3. According to contingency theory, there can be only one best way to design an organization's
structure.
FALSE
According to contingency theory, there is no one best way to design an organization's structure.
Managers design organizational structures to fit the factors or circumstances that are affecting the
company the most and causing them the most uncertainty. Designs reflect each organization's specific
situation, and researchers have argued that in some situations stable, mechanistic structures may be
most appropriate while in others flexible, organic structures might be the most effective.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
4. The nature of an organization's human resources is an important determinant of the organization's
structure.
TRUE
Four factors are important determinants of the type of organizational structure or organizing method
managers select: the nature of the organizational environment, the type of strategy the organization
pursues, the technology (and particularly information technology) the organization uses, and the
characteristics of the organization's human resources.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
5. In a quickly changing external environment, decentralizing authority and empowering lower-level
employees tend to make organizations less flexible and slow in making decisions.
FALSE
To speed decision making and communication and make it easier to obtain resources, managers
typically make organizing choices that result in more flexible structures and entrepreneurial cultures.
They are likely to decentralize authority, empower lower-level employees to make important
operating decisions, and encourage values and norms that emphasize change and innovation; a more
organic form of organizing.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
6. A differentiation strategy aimed at increasing the customer's perception of an organization services
usually succeeds even with an inflexible structure.
FALSE
A differentiation strategy aimed at increasing the value customers perceive in an organization's

goods and services usually succeeds best in a flexible structure with a culture that values innovation.
Flexibility facilitates a differentiation strategy because managers can develop new or innovative
products quickly.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
7. Managers lose control over their different businesses by moving to a more flexible structure.
FALSE
Managers gain more control over their different businesses by moving to a more flexible structure.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
8. The more nonroutine the technology an organization uses, the easier it is for managers to control and
regulate the technology.
FALSE
The more routine the technology, the more appropriate is a formal structure, because tasks are simple
and the steps needed to produce goods and services have been worked out in advance.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
9. Routine technologies are characterized by low task variety and high task analyzability.
TRUE
Routine technologies are characterized by low task variety and high task analyzability; this means that
the problems encountered do not vary much and are easily resolved through programmed decision
making.
AACSB: Analytic
Blooms: Understand
Difficulty: 1 Easy
10. The more skilled its workforce, the less likely an organization is to use a flexible, decentralized
structure.
FALSE
The more highly skilled its workforce, and the greater the number of employees who work together
in groups or teams, the more likely an organization is to use a flexible, decentralized structure and a
professional culture based on values and norms that foster employee autonomy and self-control.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
11. The first step in organizational design is job design.
TRUE
The first step in organizational design is job design, the process by which managers decide how to
divide into specific jobs the tasks that have to be performed to provide customers with goods and
services.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-02 Explain how managers group tasks into jobs that are motivating and satisfying for employees.
Topic: Grouping Tasks into Jobs: Job Design
12. Division of labor among employees is the result of the differentiation process.
FALSE
Division of labor among employees is the result of the job design process. Establishing an appropriate
division of labor among employees is a critical part of the organizing process, one that is vital to
increasing efficiency and effectiveness.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
13. Increasing the number of different tasks in a job by changing the division of labor is known as job
enrichment.
FALSE
Job enrichment is increasing the degree of responsibility a worker has over his/her job.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
14. Increasing the degree of responsibility that a worker has over his/her job is known as job
simplification.
FALSE
Job simplification is the process of reducing the number of tasks that each worker performs.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
15. The job characteristics model explains how managers can make jobs more interesting and
motivating.
TRUE
J. R. Hackman and G. R. Oldham's job characteristics model is an influential model of job design that
explains in detail how managers can make jobs more interesting and motivating.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
16. The extent to which the design of a job requires the worker to perform all of the tasks that are required
to complete the job successfully is known as the task significance.
FALSE
Task significance is the degree to which a worker feels his/her job is meaningful because of its effect
on people inside the organization, such as coworkers, or on people outside the organization, such as
customers.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
17. The degree to which a manager feels that his/her job is meaningful because of the way that it affects
other people is known as the autonomy of the job.
FALSE
Autonomy is the degree to which a job gives an employee the freedom and discretion needed to
schedule different tasks and decide how to carry them out.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
18. The degree to which a job design gives a worker the freedom to schedule his/her tasks and to decide
how to carry them out is known as the task identity.
FALSE
Task identity is the extent to which a job requires that a worker perform all the tasks necessary to
complete the job, from the beginning to the end of the production process.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
19. A functional structure is an organizational structure composed of all of the departments that an
organization needs to produce its products.
TRUE
A functional structure is an organizational structure composed of all the departments that an

organization requires to produce its goods or services. Manufacturing, sales, and research and
development are often organized into functional departments.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-03 Describe the types of organizational structures managers can design; and explain why they choose one structure over another.
Topic: Grouping Jobs into Functions and Divisions: Designing Organizational Structure
20. It is easier for managers to monitor and evaluate subordinates' performance in a functional structure
than a divisional structure.
TRUE
When people who perform similar jobs are grouped together, it is easier for managers to monitor and
evaluate their performance. A functional structure allows workers to evaluate how well coworkers are
performing their jobs, and if some workers are performing poorly, more experienced workers can help
them develop new skills.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
21. As an organization grows and begins to produce a wider range of products, a functional structure
becomes more efficient and effective.
FALSE
As an organization grows, and particularly as its task environment and strategy change because it is
beginning to produce a wider range of goods and services for different kinds of customers, several
problems can make a functional structure less efficient and effective.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
22. A division is a collection of departments that work together within the organization to produce the
product.
TRUE
A division is a collection of functions or departments that work together to produce the product.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
23. Using a market structure, managers place each distinct product line or business in its own self-
contained division and give divisional managers the responsibility for devising an appropriate
business-level strategy to allow the division to compete effectively in its industry.
FALSE
A market structure is adopted when managers organize divisions according to the type of customer
they focus on.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
24. When managers organize divisions according to the types of customer to whom they market their
products, they are focusing on a product structure.
FALSE
Using a product structure, managers place each distinct product line or business in its own self-
business-level strategy to allow the division to compete effectively in its industry or market.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
25. To satisfy the needs of diverse customers, a company might adopt a customer structure, which groups
divisions according to the particular kinds of customers they serve.
TRUE
To satisfy the needs of diverse customers, a company might adopt a market structure, also called
customer structure, which groups divisions according to the particular kinds of customers they serve.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
26. When managers group workers both by function and by product within the same structure, they are
said to be following the matrix structure.
TRUE
In a matrix structure, managers group people and resources in two ways simultaneously: by function
and by product. Employees are grouped by functions to allow them to learn from one another and
become more skilled and productive.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
27. Team members in a market structure are known as two-boss employees.
FALSE
In a matrix structure, each person in a product team reports to two managers: (1) a functional boss,
who assigns individuals to a team and evaluates their performance from a functional perspective, and
(2) the boss of the product team, who evaluates their performance on the team. Thus, team members
are known as two-boss employees.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
28. A group of managers from different departments working together on an organizational task is known
as a cross-functional team.
TRUE
A cross-functional team is a group of managers brought together from different departments to

perform organizational tasks. When managers are grouped into cross-functional teams, the artificial
boundaries between departments disappear, and a narrow focus on departmental goals is replaced with
a general interest in working together to achieve organizational goals.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
29. The "chain of command" of an organization is the hierarchy of authority for that organization.
TRUE
The hierarchy of authority is an organization's chain of command, the relative authority that each
manager has, extending from the CEO at the top, down through the middle managers and first-line
managers, to the nonmanagerial employees who actually make goods or provide services. Every
manager, at every level of the hierarchy, supervises one or more subordinates.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 07-04 Explain why managers must coordinate jobs; functions; and divisions using the hierarchy of authority and integrating mechanisms.
Topic: Coordinating Functions and Divisions
30. The number of subordinates who report directly to a manager is known as the hierarchy of authority
for that manager.
FALSE
The term span of control refers to the number of subordinates who report directly to a manager.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
31. A line manager is someone in the chain of command who has formal authority over people and
resources.
TRUE
A line manager is someone in the direct line or chain of command who has formal authority over
people and resources.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
32. A flat organization has fewer levels of authority relative to the size of that organization.
TRUE
A flat organization has fewer levels relative to company size. As an organization grows in size
(normally measured by the number of its managers and employees), its hierarchy of authority
normally lengthens, making the organizational structure taller.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
33. The idea that top management should design an organization with as few levels of authority as is
needed to conduct the business of the organization in an efficient and effective manner is known as the
minimum chain of command.
TRUE
Top managers follow a basic organizing principle, the principle of the minimum chain of command,
which states that top managers should always construct a hierarchy with the fewest levels of authority
necessary to efficiently and effectively use organizational resources.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
34. Decentralization makes an organization flexible as the organization grows and becomes taller.
TRUE
Decentralization allows an organization and its employees to behave in a flexible way even as the
organization grows and becomes taller.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
35. Too much decentralization has disadvantages for an organization.
TRUE
Although more and more organizations are taking steps to decentralize authority, too much
decentralization has certain disadvantages. Too much decentralization can cause lack of
communication among functions or divisions; this prevents the synergies of cooperation from ever
materializing, and organizational performance suffers.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
36. The lesser the complexity of an organization's structure, the greater is the need for coordination
among people, functions, and divisions to make the organizational structure work efficiently and
effectively.
FALSE
To increase communication and coordination among functions or between divisions and to prevent
these problems from emerging, top managers incorporate various integrating mechanisms into their
organizational architecture. The greater the complexity of an organization's structure, the greater is
the need for coordination among people, functions, and divisions to make the organizational structure
work efficiently and effectively.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
37. Liaison roles increase the coordination among the business units of an organization.
TRUE
Managers can increase coordination among functions and divisions by establishing liaison roles.
When the volume of contacts between two functions increases, one way to improve coordination is to
give one manager in each function or division the responsibility for coordinating with the other.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
38. Task forces are often called ad hoc committees because they are temporary.
TRUE
Task force is a committee of managers from various functions or divisions who meet to solve a
specific, mutual problem. Task forces are often called ad hoc committees because they are temporary;
they may meet on a regular basis or only a few times.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
39. The more complex an organization, the less important the use of cross-functional teams become to the
organization.
FALSE
An integrating role is a role whose only function is to increase coordination and integration
among functions or divisions to achieve performance gains from synergies. The more complex an
organization and the greater the number of its divisions, the more important integrating roles are.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
40. A strategic alliance is a series of global alliances that one or several organizations create with
suppliers, manufacturers, and/or distributors to produce and market a product.
FALSE
A strategic alliance is a formal agreement that commits two or more companies to exchange or share
their resources in order to produce and market a product. Most commonly strategic alliances are
formed because the companies share similar interests and believe they can benefit from cooperating.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Topic: Strategic Alliances, B2B Network Structures, and IT
41. A network structure is a series of global strategic alliances that one or several organizations create
with suppliers, manufacturers, and/or distributors to produce and market a product.
TRUE
A network structure is a series of global strategic alliances that one or several organizations create
with suppliers, manufacturers, and/or distributors to produce and market a product. Network structures
allow an organization to manage its global value chain in order to find new ways to reduce costs and
increase the quality of products without incurring the high costs of operating a complex organizational
structure.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
42. The ability of managers to use outside suppliers and manufacturers to produce goods and services, has
led many researchers and consultants to popularize the idea of a boundaryless organization.
FALSE
The ability of managers to develop a network structure to produce or provide the goods and
services customers want, rather than create a complex organizational structure to do so, has led
many researchers and consultants to popularize the idea of a boundaryless organization. Such an
organization is composed of people linked by IT—computers, faxes, computer-aided design systems,
and video teleconferencing—who may rarely, if ever, see one another face-to-face.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
43. Business-to-business (B2B) network is a company-specific virtual information system that allows
workers to share their knowledge and expertise and find others to help solve ongoing problems.
FALSE
Business-to-business (B2B) network is a group of organizations that join together and use IT to link
themselves to potential global suppliers to increase efficiency and effectiveness.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
44. The process by which managers establish the structure of working relationships among workers of the
organization is known as:
A. planning.
B. leading.
C. organizing.
D. controlling.
E. directing.
Organizing is the process by which managers establish the structure of working relationships among
employees to allow them to achieve organizational goals efficiently and effectively.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
45. According to theory, managers should choose a structure that fits the circumstances affecting
their organization the most.
A. contingency
B. design
C. agency
D. equity
E. expectancy
According to contingency theory, managers design organizational structures to fit the factors or
circumstances that are affecting the company the most and causing them the most uncertainty.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
46. According to Charles Perrow, which of the following factors determines the routineness of
technology?
A. Task stability
B. Task analyzability
C. Task creativity
D. Task certainty
E. Task utility
Charles Perrow argued that two factors determine how complicated or nonroutine technology is: task
variety and task analyzability.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
47. Which of the following is the number of new or unexpected problems or situations that a person or
function encounters in performing tasks or jobs?
A. Task uncertainty
B. Task stability
D. Task creativity
E. Task variety
Task variety is the number of new or unexpected problems or situations that a person or function
encounters in performing tasks or jobs.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
48. Which of the following is the degree to which programmed solutions are available to people or
functions to solve the problems they encounter?
A. Task uncertainty
B. Task stability
D. Task creativity
E. Task variety
Task analyzability is the degree to which programmed solutions are available to people or functions to
solve the problems they encounter.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
49. Managers should design flexible structures, characterized by decentralized authority and empowered
employees, for their organization when its:
A. environment is stable.
B. technology is simple.
C. workforce is highly skilled.
D. strategy is well understood.
E. strategy is simple.
The more highly skilled its workforce, and the greater the number of employees who work together
in groups or teams, the more likely an organization is to use a flexible, decentralized structure and a
professional culture based on values and norms that foster employee autonomy and self-control.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
50. The greater the level of uncertainty in the organization's environment, the:
A. less likely managers are to design a structure and a culture that is innovative.
B. less likely managers are to design a structure and a culture that changes quickly.
C. more likely managers are to design an organizational structure that is formal and controlling.
D. more likely managers are to design a structure and a culture that are flexible.
E. more likely managers are to design an organizational culture that defines how employees should act
in particular situations.
The greater the level of uncertainty in the organization's environment, the more complex its strategy
and technologies, and the more highly qualified and skilled its workforce, the more likely managers
are to design a structure and a culture that are flexible, can change quickly, and allow employees to be
innovative in their responses to problems, customer needs, and so on.
AACSB: Analytic
Blooms: Understand
51. The process by which managers decide how to divide into specific jobs the tasks that have to be
performed to provide customers with goods and services is known as job:
A. design.
B. enlargement.
C. simplification.
D. rotation.
E. enrichment.
Job design is the process by which managers decide how to divide into specific jobs the tasks that
have to be performed to provide customers with goods and services.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
52. A Place for Pizza encourages the basic division of labor among "chefs" and "food servers" where
chefs perform all tasks involved in actual cooking and food servers perform all tasks involved
in giving food to the customers. Which of the following grouping tasks is A Place for Pizza
implementing?
B. Job design
D. Product structure
E. Matrix structure
have to be performed to provide customers with goods and services. The division of labor in A Place
for Pizza is its job design.
AACSB: Analytic
Blooms: Apply
53. The Pizza Man combined the jobs of "chef" and "food server" into a single job description. Which of
the following grouping tasks is The Pizza Man implementing?
B. Divisional structure
D. Job design
E. Matrix structure
have to be performed to provide customers with goods and services. At The Pizza Man, managers
chose a job design where there is no division of labor among the chefs and food servers.
AACSB: Analytic
Blooms: Apply
54. A manager increases the number of tasks that a subordinate has to do in order to make the job more
interesting for the subordinate. Which of the following best describes this process?
A. Job simplification
B. Job enlargement
C. Job enrichment
D. Task identity
E. Task significance
Job enlargement is increasing the number of different tasks in a given job by changing the division
of labor. The idea behind job enlargement is that increasing the range of tasks performed by a worker
will reduce boredom and fatigue and may increase motivation to perform at a high level—increasing
both the quantity and the quality of goods and services provided.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
55. A manager redesigns the job of a subordinate so that the subordinate has more responsibility over his/
her job. Which of the following best describes this process?
A. Job enlargement
B. Job simplification
C. Job enrichment
D. Job reduction
E. Task identity
Job enrichment is increasing the degree of responsibility a worker has over a job.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
56. The extent to which a job requires the worker to use a wide range of knowledge and abilities is known
as:
A. task identity.
B. task significance.
C. autonomy.
D. skill variety.
E. feedback.
Skill variety is the extent to which a job requires that an employee use a wide range of different skills,
abilities, or knowledge.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
57. The extent to which a job requires a worker to perform all of the tasks that are required to complete
the job is known as:
A. skill variety.
B. task identity.
D. feedback.
E. autonomy.
Task identity is the extent to which a job requires that a worker perform all the tasks necessary to
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
58. The degree to which a manager feels that his/her job is "meaningful" because of the way in which the
job affects other people is known as:
A. skill variety.
B. feedback.
C. autonomy.
D. task significance.
E. task identity.
customers.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
59. Mr. Pierson, an economics lecturer, reads an article in the newspaper which says that Roland, one of
his students, has been appointed the CEO of a multinational corporation. At this moment, Mr. Pierson
would have the highest of which of the following characteristics?
A. Autonomy
B. Task identity
C. Task significance
D. Skill variety
E. Feedback
customers.
AACSB: Reflective Thinking

Blooms: Apply
Difficulty: 3 Hard
60. The degree to which a job allows the worker to schedule the tasks of the job and to decide how to
carry out these tasks is known as:
A. autonomy.
B. task identity.
D. skill variety.
E. feedback.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
61. A doctor who works with people suffering from malignant diseases has than the salesperson of
a prescription drug store.
A. a low degree of feedback
B. less autonomy
C. less skill variety
D. less task identity
E. higher task significance
customers.
AACSB: Analytic
Blooms: Apply
62. A sales executive who is given the authority to choose the prospective customers he will make a
personal sales call on, has than an order taker at a restaurant.
A. less autonomy
B. less task significance
C. less task identity
D. more autonomy
E. less skill variety
AACSB: Analytic
Blooms: Apply
63. The extent to which a job gives the worker direct and clear information about how well the worker is
performing the job is known as:
A. task identity
B. feedback
C. autonomy
D. task significance
E. skill variety
Feedback is the extent to which actually doing a job provides a worker with clear and direct
information about how well he or she has performed the job.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
64. Which of the following is an organizational structure comprising of all the departments that an
organization requires to produce its goods or services?
A. Autonomous structure
B. Provisional structure
D. Transitional structure
E. Functional structure

organization requires to produce its goods or services.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
65. The units of Zach Ltd. are grouped together such that the functions that work together to produce a
product are grouped together. This is an example of which of the following structures?
A. Market structure
B. Transitional structure
C. Organic structure
Most managers of large organizations choose a divisional structure and create a series of business
units to produce a specific kind of product for a specific kind of customer. Each division is a
collection of functions or departments that work together to produce the product.
AACSB: Analytic
Blooms: Apply
66. At Xen Ltd., each product line is managed within a division. In each of these divisions, the division
manager is responsible for creating the business-level strategy for the product line. What type of
structure is the organization using?
A. Geographic structure
B. Market structure
Using a product structure, managers place each distinct product line or business in its own self-
business-level strategy to allow the division to compete effectively in its industry or market.
AACSB: Analytic
Blooms: Apply
67. Xpress Delivery Corporation organizes its managers according to the different regions of the world in
which the managers work. This is an example of which of the following organizational structures?
A. Market structure
D. Matrix structure
E. Geographic structure
Xpress Delivery Corporation is following a geographic structure, in which divisions are broken down
by geographic location.
AACSB: Analytic
Blooms: Apply
68. Which of the following structures is most likely to be used by managers pursuing a multidomestic
strategy?
A. Market structure
C. Global geographic structure
D. Global transitional structure
E. Global product structure
In adopting a global geographic structure, managers locate different divisions in each of the world
regions where the organization operates. Managers are most likely to do this when they pursue a
multidomestic strategy, because customer needs vary widely by country or world region.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
69. When customers around the world are willing to buy the same kind of product, or slight variations
thereof, managers are more likely to pursue a structure.
A. market
B. customer
C. global geographic
D. global transitional
E. global product
In a global product structure, each product division, not the country and regional managers, takes
responsibility for deciding where to manufacture its products and how to market them in countries
worldwide.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
70. In the design of an organization, another name for "market structure" is structure.
A. product
B. geographic
C. customer
D. functional
E. matrix
Market structure is also known as customer structure as it is an organizational structure in which each
kind of customer is served by a self-contained division.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
71. Which of the following structures allows managers to be responsive to the needs of their customers
and allows them to act flexibly in making decisions in response to customers' changing needs?
A. Market structure
B. Geographic structure
C. Functional structure
D. Matrix structure
A market structure is an organizational structure in which each kind of customer is served by a

self-contained division. A market structure allows managers to be responsive to the needs of their
customers and allows them to act flexibly in making decisions in response to customers' changing
needs.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
72. When designing an organization, if managers are grouped both by function and by product at the same
time, the organizational structure being used is the structure.
A. market
B. geographic
C. functional
D. matrix
E. divisional
become more skilled and productive. In addition, employees are grouped into product teams in which
members of different functions work together to develop a specific product.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
73. In which type of organizational design are employees correctly referred to as two-boss employees?
A. Product structure
B. Matrix structure
C. Geographic structure
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
74. In Cosmeto & Co., Pat is assigned to a team to develop a new kind of shampoo. He reports to both the
marketing manager and the personal care product manager. The organization is pursuing which of the
following organizational structures?
A. Matrix structure
B. Global product structure
C. Customer structure
D. Geographic structure
E. Market structure
AACSB: Analytic
Blooms: Apply
75. When different managers from different functional areas are brought together to work on an
organizational task, they are known as a(n) team.
A. functional
B. co-dependent
C. cross-functional
D. independent
E. virtual
A cross-functional team is a group of managers brought together from different departments to

perform organizational tasks.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
76. Another name for the organization's hierarchy of authority is the:
A. chain of command.
B. span of control.
C. corporate ladder.
D. unity of command.
E. organizational constitution.
The hierarchy of authority is an organization's chain of command. The relative authority that each
manager has, extending from the CEO at the top, down through the middle managers and first-line
managers, to the nonmanagerial employees who actually make goods or provide services.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
77. The relative authority that each manager in the organization has from the CEO down to the lowest-
level manager is called the of the organization:
A. span of control
B. unity of command
C. corporate ladder
D. unity of direction
E. chain of command
The hierarchy of authority is an organization's chain of command—the relative authority that each
manager has—extending from the CEO at the top, down through the middle managers and first-line
managers, to the nonmanagerial employees who actually make goods or provide services.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
78. Which of the following refers to the number of subordinates who report directly to a manager?
A. Unity of command
B. Hierarchy of authority
C. Chain of command
D. Span of control
E. Pecking order
The term span of control refers to the number of subordinates who report directly to a manager. Every
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
79. Rusty is a project manager who has 15 executives reporting directly to him. This refers to which of the
following responsibilities of Rusty as a manager?
A. Unity of command
B. Span of control
C. Chain of command
D. Unity of direction
E. Hierarchy of authority
The term span of control refers to the number of subordinates who report directly to a manager. Every
AACSB: Analytic
Blooms: Apply
80. The manager of the human resources department of a company is a(n) manager.
A. line
B. product
C. staff
D. task force
E. operations
A staff manager is someone responsible for managing a specialist function, such as finance,
marketing, R&D, or human resource.
AACSB: Analytic
Blooms: Understand
81. The idea that an organization's hierarchy should be designed with as few levels of authority as are
necessary to use the organization's resources in an efficient and effective manner falls under which of
the following principles?
A. Span of control
B. Centralization
C. Minimum chain of command
D. The unity of command
E. Decentralization
The principle of the minimum chain of command states that top managers should always construct a
hierarchy with the fewest levels of authority necessary to efficiently and effectively use organizational
resources.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
82. Organizations can keep their hierarchy flat by:
A. decreasing the span of control.
B. increasing the number of levels of management.
C. decentralizing authority.
D. centralizing authority.
E. decreasing autonomy.
One way in which managers can keep the organizational hierarchy flat is by decentralizing authority.
That is by giving lower-level managers and nonmanagerial employees the right to make important
decisions about how to use organizational resources.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
83. Which of the following methods of allocating authority in an organization gives lower-level managers
and nonmanagerial employees the right to make important decisions about how to use organizational
resources?
A. Tall organizational structure
B. High span of control
C. Centralization of authority
D. Maximum chain of command
E. Decentralization of authority
Decentralization gives lower-level managers and nonmanagerial employees the right to make
important decisions about how to use organizational resources. If managers at higher levels give
lower-level employees the responsibility of making important decisions and only manage by
exception, then the problems of slow and distorted communication noted previously are kept to a
minimum.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
84. allows an organization and its employees to behave in a flexible way even as the organization
grows and becomes taller.
A. Managing as a rule
B. Decentralizing authority
C. Decreasing the span of control
D. Decreasing autonomy
E. Increasing the number of levels of management
Decentralizing authority allows an organization and its employees to behave in a flexible way even
as the organization grows and becomes taller. This is why managers are so interested in empowering
employees, creating self-managed work teams, establishing cross-functional teams, and even moving
to a product team structure.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
85. CoreSol Ltd. gives one manager in each of three departments (marketing, engineering, and
production) the responsibility of coordinating with each other to brainstorm new product ideas. The
department managers can increase coordination by establishing:
A. horizontal integration.
B. decentralization.
C. a liaison role.
D. vertical integration.
E. product departmental structure.
Managers can increase coordination among functions and divisions by establishing liaison roles.
When the volume of contacts between two functions increases, one way to improve coordination is to
give one manager in each function or division the responsibility for coordinating with the other.

Blooms: Apply
Difficulty: 3 Hard
86. Which of the following is often known as the ad hoc committee?
A. Functional team
B. Cross-functional team
C. Managers with liaison roles
D. Managers with integrating roles
E. Task force
Task forces are often called ad hoc committees because they are temporary, they may meet on a
regular basis or only a few times. When the problem or issue is solved, the task force is no longer
needed; members return to their normal roles in their departments or are assigned to other task forces.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
87. A temporary committee of managers from different functions or divisions is formed to solve a
specific, mutual problem. This committee is known as a:
A. standing committee.
B. confederate committee.
C. functional force.
D. task force.
E. cross-functional team.
A task force is a temporary committee of managers from various functions or divisions who meet to
solve a specific, mutual problem. When more than two functions or divisions share many common
problems, direct contact and liaison roles may not provide sufficient coordination. In these cases, a
more complex integrating mechanism, a task force, may be appropriate.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
88. Fern Motor Co. brings together senior managers from its marketing, R&D, manufacturing, accounting,
and finance departments to work on a project as a team, to design a new type of sport utility vehicle.
In this scenario, Fern Motor Co. creates a:
A. cross-functional team.
B. vertically integrated team.
C. mass-production team.
D. standing committee.
E. confederate committee.
To address recurring problems effectively, managers are increasingly using permanent integrating
mechanisms such as cross-functional teams. An example of a cross-functional team is a new product
development committee that is responsible for the choice, design, manufacturing, and marketing of a
new product.
AACSB: Analytic
Blooms: Apply
89. Jason has been hired by Praltiz Inc., an IT firm, to increase coordination among functions or divisions
to achieve performance gains from synergies. What role is Jason hired to perform?
A. Liaison role
B. Centralization role
C. Consulting role
D. Integrating role
E. Promotional role
An integrating role is a role whose only function is to increase coordination and integration among
functions or divisions to achieve performance gains from synergies.
AACSB: Analytic
Blooms: Apply
90. A(n) is a formal agreement that commits two or more companies to exchange or share their
resources in order to produce and market a product.
A. outsourcing alliance
B. task force alliance
C. continuous-process alliance
D. market structure alliance
E. strategic alliance
A strategic alliance is a formal agreement that commits two or more companies to exchange or share
their resources in order to produce and market a product. Most commonly, strategic alliances are
formed because the companies share similar interests and believe they can benefit from cooperating.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
91. Tot Beverages creates a series of agreements with its suppliers, manufacturers, and distributors to
produce and market Zing cola. This is an example of which of the following organizational structures?
A. Decentralized structure
B. Vertically integrated structure
C. Network structure
D. Diversified product structure
E. Horizontally integrated structure
A network structure is a series of strategic alliances that an organization creates with suppliers,
manufacturers, and/or distributors to produce and market a product. Network structures allow an
organization to manage its global value chain in order to find new ways to reduce costs and increase
the quality of products, without incurring the high costs of operating a complex organizational
structure.
AACSB: Analytic
Blooms: Apply
92. Alkyl Ltd., one of the leading shoe manufacturers, designs shoes using computer-aided design, and
they electronically store all new product information, including manufacturing instructions. When
the designers have finished their work, they electronically transmit all the blueprints for the new
products to a network of Southeast Asian suppliers and manufacturers with which Alkyl Ltd. has
formed strategic alliances. Instructions for the design of a new sole are sent to a supplier in India with
instructions for the leather uppers to a supplier in Bhutan. The strategic alliance Alkyl Ltd. follows is
an example of a:
A. network structure.
B. decentralized structure.
C. vertically integrated structure.
D. diversified product structure.
E. horizontally integrated structure.
A network structure is a series of global strategic alliances that one or several organizations create
with suppliers, manufacturers, and/or distributors to produce and market a product. Network structures
allow an organization to manage its global value chain in order to find new ways to reduce costs and
increase the quality of products-without incurring the high costs of operating a complex organizational
structure.

Blooms: Apply
Difficulty: 3 Hard
93. Alkyl Ltd., one of the leading shoe manufacturers, enters into a contract with Blinx-a foreign
manufacturer-to only manufacture its shoes. In this scenario, Alkyl Ltd. is following the
strategy.
A. franchising
B. licensing
C. green field venturing
D. outsourcing
E. exporting
To outsource is to use outside or foreign suppliers and manufacturers to produce goods and services.
AACSB: Analytic
Blooms: Apply
94. Briefly explain organizational structure, organizational design, and contingency theory.
Organizational structure is the formal system of task and job reporting relationships that determines
how employees use resources to achieve organizational goals. Organizational design is the process
by which managers make specific organizing choices about tasks and job relationships that result in
the construction of a particular organizational structure. According to contingency theory, managers
design organizational structures to fit the factors or circumstances that are affecting the company the
most and causing them the most uncertainty. Thus, there is no one best way to design an organization:
Design reflects each organization's specific situation, and researchers have argued that in some
situations stable, mechanistic structures may be most appropriate while in others flexible, organic
structures might be the most effective.
AACSB: Analytic
Blooms: Understand
95. Identify the four factors that are important determinants of an organizational structure.
The four factors that are important determinants of the type of an organizational structure or
organizing method managers select are as follows:
• The nature of the organizational environment.

• The type of strategy the organization pursues.
• The technology (and particularly information technology) the organization uses.
• The characteristics of the organization's human resources.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
96. Explain briefly the two factors that make technology routine or complicated, according to Charles
Perrow.
According to Charles Perrow, the two factors that determine how complicated or nonroutine
technology is are as follows: task variety and task analyzability.
Task variety is the number of new or unexpected problems or situations that a person or function
encounters in performing tasks or jobs.
Task analyzability is the degree to which programmed solutions are available to people or functions to
solve the problems they encounter.
Nonroutine or complicated technologies are characterized by high task variety and low task
analyzability; this means that many varied problems occur and that solving these problems requires
significant nonprogrammed decision making. In contrast, routine technologies are characterized by
low task variety and high task analyzability; this means that the problems encountered do not vary
much and are easily resolved through programmed decision making.
AACSB: Analytic
Blooms: Understand
97. Define job enlargement. What is its significance in an organization?
Job enlargement is increasing the number of different tasks in a given job by changing the division of
labor.
The idea behind job enlargement is that increasing the range of tasks performed by a worker will
reduce boredom and fatigue and may increase motivation to perform at a high level, increasing both
the quantity and the quality of goods and services provided.
AACSB: Analytic
Blooms: Understand
98. Discuss four ways in which a manager could redesign the job of a subordinate to enrich that
subordinate's job.
Job enrichment is increasing the degree of responsibility a worker has over a job in the following
ways:
• A manager can empower the subordinate to find a better way of doing his/her job.
• A manager can encourage the subordinate to develop new skills that could be used in the job.
• A manager can give the subordinate the responsibility to decide how to react to unexpected
situations.
• A manager can allow the subordinate to monitor and to measure his/her own job performance.
The idea behind job enrichment is that increasing workers' responsibility increases their involvement
in their jobs and thus increases their interest in the quality of the goods they make or the services they
provide.
AACSB: Analytic
Blooms: Understand
99. According to the job characteristics model, list and define the characteristics that determine how
motivating the job is.
According to the job characteristics model of J. R. Hackman and G. R. Oldham, every job has five
characteristics that determine how motivating the job is. They are as follows:
• Skill variety: The extent to which a job requires that an employee use a wide range of different skills,
abilities, or knowledge.
• Task identity: The extent to which a job requires that a worker perform all the tasks necessary to
• Task significance: The degree to which a worker feels his/her job is meaningful because of its effect
customers.
• Autonomy: The degree to which a job gives an employee the freedom and discretion needed to
• Feedback: The extent to which actually doing a job provides a worker with clear and direct
information about how well he or she has performed the job.
AACSB: Analytic
Blooms: Understand
100. Discuss the advantages and disadvantages of a functional structure of organization.

organization requires to produce its goods or services.
The advantages to grouping jobs according to function are:
• First, when people who perform similar jobs are grouped together, they can learn from observing one
another and thus become more specialized and can perform at a higher level.
• Second, when people who perform similar jobs are grouped together, it is easier for managers to
monitor and evaluate their performance.
• Finally, managers appreciate functional structure because it allows them to create the set of functions
they need in order to scan and monitor the competitive environment and obtain information about the
way it is changing.
The disadvantages to grouping jobs according to function are:

• First, managers in different functions may find it more difficult to communicate and coordinate
with one another when they are responsible for several different kinds of products, especially as the
organization grows both domestically and internationally.
• Second, functional managers may become so preoccupied with supervising their own specific
departments and achieving their departmental goals that they lose sight of organizational goals.
AACSB: Analytic
Blooms: Understand
101. Describe the matrix structure and the concept of the "two-boss employees."
become more skilled and productive. In addition, employees are grouped into product teams in which
members of different functions work together to develop a specific product.
Each person in a product team reports to two managers:
• A functional boss, who assigns individuals to a team and evaluates their performance from a
functional perspective.
• The boss of the product team, who evaluates their performance on the team.
Thus, team members are known as two-boss employees.
AACSB: Analytic
Blooms: Understand
102. State the differences between a line manager and a staff manager.
A line manager is someone in the direct line or chain of command who has formal authority over
people and resources at lower levels.
A staff manager is someone responsible for managing a specialist function, such as finance or
marketing.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
103. Discuss the advantages and disadvantages of "decentralization" in organizational design.
When focusing on decentralization, managers at higher levels give lower-level employees the
responsibility of making important decisions and only manage by exception, thus the problems of
slow and distorted communication are kept to a minimum. Moreover, fewer managers are needed
because their role is not to make decisions but to act as coach and facilitator and to help other
employees make the best decisions. In addition, when decision-making authority is low in the
organization and near the customer, employees are better able to recognize and respond to customer
needs. Decentralizing authority allows an organization and its employees to behave in a flexible way
even as the organization grows and becomes taller.
Too much decentralization has certain disadvantages: If divisions, functions, or teams are given too
much decision-making authority, they may begin to pursue their own goals at the expense of
organizational goals. Also, too much decentralization can result in a lack of communication among
functions or divisions; this prevents the synergies that result from cooperation from ever materializing,
and organizational performance suffers.

Blooms: Understand
Difficulty: 3 Hard
104. Write a brief note on liaison roles, task forces, and cross-functional teams.
Liaison roles, task forces, and cross-functional teams are integrating mechanisms available to
managers to increase communication and coordination.
• Liaison roles: Managers can increase coordination among functions and divisions by establishing
liaison roles. When the volume of contacts between two functions increases, one way to improve
coordination is to give one manager in each function or division the responsibility for coordinating
with the other. Coordinating is part of the liaison's full-time job. Furthermore, liaison roles provide
a way of transmitting information across an organization, which is important in large organizations
whose employees may know no one outside their immediate function or division.
• Task forces: When more than two functions or divisions share many common problems, a more
complex integrating mechanism, a task force, may be appropriate. One manager from each relevant
function or division is assigned to a task force that meets to solve a specific, mutual problem;
members are responsible for reporting to their departments on the issues addressed and the solutions
recommended. Task forces are temporary; they may meet on a regular basis or only a few times.
When the problem or issue is solved, the members return to their normal roles in their departments or
are assigned to other task forces. Typically, task force members also perform many of their normal
duties while serving on the task force.
• Cross-functional teams: To address recurring problems effectively, such as the need to develop
new products or find new kinds of customers, managers are increasingly using permanent integrating
mechanisms such as cross-functional teams. These teams assume long-term responsibility for all
aspects of development and making the product.
AACSB: Analytic
Blooms: Understand
105. Define strategic alliance and network structure. Also, discuss their usage.
• A strategic alliance is a formal agreement that commits two or more companies to exchange or share
their resources in order to produce and market a product. Strategic alliances are formed because the
companies share similar interests and believe they can benefit from cooperating. Over time, these
companies work closely with their suppliers to improve the efficiency and effectiveness of the inputs
so that the final product produced is of higher quality and very often can be produced at lower cost.
• A network structure is a series of global strategic alliances that one or several organizations
create with suppliers, manufacturers, and/or distributors to produce and market a product. Network
structures allow an organization to manage its global value chain in order to find new ways to reduce
costs and increase the quality of products—without incurring the high costs of operating a complex
organizational structure (such as the costs of employing many managers).
AACSB: Analytic
Blooms: Understand
07 Summary
Category # of Questions
AACSB: Analytic 101
AACSB: Reflective Thinking 4
Blooms: Apply 16
Blooms: Remember 75
Blooms: Understand 14
Difficulty: 1 Easy 76
Difficulty: 2 Medium 25
Difficulty: 3 Hard 4
Jones - Chapter 07 105
Learning Objective: 07-01 Identify the factors that influence managers choice of an organizational structure. 20
Learning Objective: 07-02 Explain how managers group tasks into jobs that are motivating and satisfying for employees. 24
Learning Objective: 07- 24
03 Describe the types of organizational structures managers can design; and explain why they choose one structure over another.
Learning Objective: 07- 37
04 Explain why managers must coordinate jobs; functions; and divisions using the hierarchy of authority and integrating mechanis
ms.
Topic: Coordinating Functions and Divisions 28
Topic: Designing Organizational Structure 20
Topic: Grouping Jobs into Functions and Divisions: Designing Organizational Structure 24
Topic: Grouping Tasks into Jobs: Job Design 24
Topic: Strategic Alliances, B2B Network Structures, and IT 9

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Jones Solutions Manual

Test bank: https://testbankpack.com/p/test-bank-for-essentials-of-

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97. Define job enlargement. What is its significance in an organization?

100.Discuss the advantages and disadvantages of a functional structure of organization.

102.State the differences between a line manager and a staff manager.

103.Discuss the advantages and disadvantages of "decentralization" in organizational design.

A differentiation strategy aimed at increasing the value customers perceive in an organization's

A functional structure is an organizational structure composed of all the departments that an

A cross-functional team is a group of managers brought together from different departments to

AACSB: Reflective Thinking

A functional structure is an organizational structure composed of all the departments that an

A market structure is an organizational structure in which each kind of customer is served by a

A cross-functional team is a group of managers brought together from different departments to

AACSB: Reflective Thinking

AACSB: Reflective Thinking

• The nature of the organizational environment.

A functional structure is an organizational structure composed of all the departments that an

The disadvantages to grouping jobs according to function are:

AACSB: Reflective Thinking

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