Chapter 2 Quiz

Question 1

You recently transferred from a smaller manufacturing firm to a larger one and discovered that, although entirely different, both compensation systems are effective - how is this possible?

Answer 1

Both systems fit the organization and its strategy.

Question 2

What can you determine by examining a firm’s contextual variables?

Answer 2

the type of STRUCTURE the organization should be using

Question 3

Knowing which organization structure to use requires first understanding which of the following aspects?

Answer 3

CORPORATE STRATEGY (also known as a business strategy or competitive strategy)

Question 4

A strategic framework is used as a tool to help determine which aspect of compensation?

Answer 4

The most effective compensation system

Question 5

What can you determine by examining a firm’s structural variables?

Answer 5

the managerial strategy a firm is actually using

Question 6

Which of the following is classified as a “main” managerial strategy?

Answer 6

The Human Relations Management Strategy

Assumes most employees inherently dislike work but can be induced to work in order to satisfy social needs (building a positive social environment where employees are treated as apart of a family - nurturing)

Question 7

You are in the process of designing a new reward system for your firm. What is the most important single determinant of what will or will not be successful reward system for your firm?

Answer 7

A particular Managerial Strategy used

Question 8

Which of the following variables indicates to management the most appropriate managerial strategy to use in an organization?

Answer 8

Contextual variables

Question 9

What determines the contextual variables?

Answer 9

Organizational goals

Question 10

You have recently been hired by a manufacturing company in Vancouver, BC. You conclude that the company is using a high-involvement management strategy. Which of the following variables would you review to support your aforementioned conclusion?

Answer 10

Structural Variables

Question 11

Which of the following sets of strategies reflects different assumptions about employees and how they should be managed (managerial strategies)?

Answer 11

Classical, Human Relations and High-Involvement

Question 12

Which of the following characteristics are common in a classical organization?

Answer 12

Strong Management control over employees

Question 13

Which of the following rewards are normally associated with a HIGH-INVOLVEMENT managerial strategy?

Answer 13

Providing employees with the opportunity to grow professionally

Question 14

Which reward strategy is appropriate for companies using a human relations approach to management?

Answer 14

Rewards are mainly extrinsic and focus on loyalty to the organization

Question 15

Richard, a new employee, is told by a more experienced employee to do only the minimum and not attempt to be a “superstar”. What is Richard experiencing?

Answer 15

Company culture

Question 16

Which of the following key cultural values would be detrimental to a high-involvement organization?

• Honesty
• Trustworthiness
• Doing things the way they have always been done
• Open communication

Answer 16

Doing things the way they have always been done.

Question 17

Which of the following organizational variables would complement a classical management strategy?

• Strong policies and procedures dictating work processes
• high level of horizontal communication
• Significant autonomy given to employees

Answer 17

Strong policies and procedures dictating work processes

Question 18

Marie is a new owner of a large apple farm in BC. She hires seasonal workers to pick apples during the months of October and November each year. Historically, there has been an abundance of labour supply. Which managerial strategy should you adopt to increase the farm’s performance? What does this strategy assume?

Answer 18

Classical

Assumes that most employees inherently dislike work, but can be induced to work in order to satisfy their economic needs (threaten economic needs in order get employees to behave the way they want - punitive)

Question 19

A prospector strategy, short life cycle products, a highly skilled work force, and a relatively small organization would be a combination of variables for which managerial strategy? What does this strategy assume?

Answer 19

High-involvement

Assumes that work can be intrinsically motivating if the organization is structured properly (focus on intrinsic rewards and treating employees fair and equitably - light touch)

Question 20

What are the five main contextual variables?

Answer 20

ORGANIZATION’S ENVIRONMENT (most important one) - stable vs. unstable, simple vs. complex

BUSINESS STRATEGY (also known as CORPORATE STRATEGY or competitive strategy) - plan for how organization will achieve goals

TECHNOLOGY

SIZE

WORKFORCE

Question 21

What is organization structure?

Answer 21

The means through which an organization generates the behaviours necessary to execute its business strategy

Question 22

What are structural variables?

Answer 22

They are dimensions of organization structure and are levers used to produced desired behaviours within an organization.

The five structural variables are:

Rewards System

Job design - describes the manner in which the total task of an organization is separated into separate jobs

Coordination and departmentalization - describes the methods used to coordinate the work of individual employees and subunits in an organization

Communication and information - describes the nature of and methods for communication

Decision making and leadership - describes the nature of the decision-making and leadership processes used in an organization

Control system - describes the nature of the processes used to control employee behaviour in an organization

Question 23

What is the contingency approach to organizational design

Answer 23

Based on the premise that the best type of structure for an organization depends on the key contingencies (contextual variables) associated with that organization

Question 24

What is a managerial strategy

Answer 24

A managerial strategy is one of three main patterns or combinations of structural variables that can be adopted by an organization:

Question 25

Is it better to use a single managerial strategy or a mix of structural elements?

Answer 25

A single managerial strategy is generally more effective than an inconsistent mix of structural elements. Structural elements and associated human resource policies must be complimentary

(Inconsistency Example: decision making at lower levels but communicating adequate info to lower-level staff for them to make informed decisions. Complimentary Example: high involvement organizations hiring highly skilled autonomous staff would require comprehensive recruitment processes while classical organizations with low skilled staff would require less sophisticated selection process).

Question 26

What is organizational culture?

Answer 26

The set of core values and understandings shared by members of an organization

Question 27

What are the two main ways of classifying an organization’s business strategy?

Answer 27

Miles and Snow Typology of Corporate Strategy

Porter’s Typology of Business Strategy

Question 28

What is the Miles and Snow Typology of Corporate Strategy?

Answer 28

There are 4 main types of business strategies

1) DEFENDER - dominating a narrow product or service market segment
* best suited for classical strategy (manufacturing) and human relations (client service enterprise) strategy

2) ANALYZER - exploiting new opportunities at a relatively early stage while maintaining a base of traditional products/services
* high involvement or new products, classical approach for traditional products but in reality sine difficult to practice two strategies in same firm. compromise with human relations strategy

3) PROSPECTOR - identifying and exploiting new opportunities quickly
* best suited for high-involvement strategy

4) REACTOR (residual) - firms that don’t have a distinct overall strategy

Question 29

What is Porter’s Typology of Business Strategy?

Answer 29

There are four types of business strategies:

1) LOW-COST - depends on providing low-cost products or services to a broad range of customers (i.e. walmart)
2) FOCUSED LOW-COST - depend on providing low-cost services to a narrow range of customers
* low-cost strategies best suited for classical managerial strategy because of emphasis on tight cost control
3) DIFFERENTIATOR - depends on providing unique products or services to a broad range of customers
4) FOCUSED DIFFERENTIATOR - depends o providing unique products or services to a narrow range of customers
* differentiator strategies best suited for high-involvement

Question 30

What are the three ways that an organization’s technology can be classified?

Answer 30

Thompson’s Typology of Technology

Perrow’s Typology of Technology

Woodward’s Typology of Technology

Question 31

What is Thompson’s Typology of Technology?

Answer 31

Three main types of technologies:

LONG-LINKED - divides total task of producing product or service into a series of small sequential steps performed by different employees (i.e. automobile assembly line)
*classical strategy

MEDITATING TECHNOLOGY - uses standardized transactions to connect parties wishing a mutually beneficial relationship (i.e. banks connect money lenders to money borrowers)

INTENSIVE TECHNOLOGY - requires that each item or case be dealt with individually, depending on specific nature of each case (i.e. hospitals, consulting firms
*high-involvement strategy

Question 32

What is Perrow’s Typology of Technology

Answer 32

Concerns the degree to which the technology is routine or non-routine

ROUTINE - relatively few exceptions to the standard work process, and those that do occur can be dealt with in a standardized way (i.e. washing machine manufacturer)
*classical or human relations

NON-ROUTINE - many exceptions are inherent in the production process, and there is no standardized way to deal with these exceptions (i.e. consulting firms)
*high-involvement

CRAFT TECHNOLOGY - few exceptions occur in the production process, but there is no standardized way to deal with them when they do occur (i.e. specialty glass blowing)
*high involvement

ENGINEERING TECHNOLOGY - many exceptions occur in production or service delivery process, but there are standardized ways of dealing with them (i.e. accounting firm with different clients but standardized procedures)
*high-involvement

Question 33

What is Woodward’s Typology of Technology?

Answer 33

Manufacturing technologies can be divided into three main types:

1) UNIT/SMALL BATCH TECHNOLOGY - one-of-a-kine items or small batches of them, and is analogous to the intensive technology
* high involvement

2) LARGE BATCH TECHNOLOGY - produces large amounts of a single item in a standardized way, and is analogous to the long-linked technology
* classical

3) PROCESS TECHNOLOGY - produces the product in a continuous flow, and has no equivalent in other technologies discussed. Workers need to be highly knowledgeable and diligent to monitor and painting flow of product (i.e oil refinery, electrical power plant)
* at minimum human relations and possibly high-involvement

Question 34

What type of managerial strategies do small vs. large size organizations use?

Answer 34

larger - classical or human relations

small to medium sized - high involvement

Question 35

Highly skilled, well-educated or professional employees are more suited for what managerial strategy?

Answer 35

High involvement

Question 36

Employees with relatively low skill are generally suited for what managerial strategy?

Answer 36

Classical

Also for human relations, but they do not need to depend on poor economic circumstances for motivation as they offer both economic and social rewards