Chapter 5-6 The Design of Effective Organization

Question 1

Why is it important for managers to align a company’s vision and strategies with its organizational culture and structure?
a) To increase employee turnover
b) To ensure consistent decision-making and goal achievement
c) To reduce the need for management

Answer 1

b) To ensure consistent decision-making and goal achievement

Explanation: Aligning vision and strategies with culture and structure helps in achieving organizational goals and maintaining consistency in decision-making.

Question 2

What is organizational culture?
a) The formal system of task and reporting relationships
b) The set of shared, taken-for-granted implicit assumptions that a group holds
c) The financial performance of an organization

Answer 2

b) The set of shared, taken-for-granted implicit assumptions that a group holds

Explanation: Organizational culture refers to the shared assumptions that influence how work gets done within an organization.

Question 3

How are for-profit, nonprofit, and mutual-benefit organizations structured?
a) They all have the same structure
b) They have different structures based on their goals and functions
c) They do not have any structure

Answer 3

b) They have different structures based on their goals and functions

Explanation: The structure of an organization varies depending on whether it is for-profit, nonprofit, or mutual-benefit, reflecting their distinct goals and functions.

Question 4

What are the seven elements to look for when joining an organization?
a) Vision, mission, goals, strategies, culture, structure, and policies
b) Salary, benefits, location, size, reputation, culture, and structure
c) Vision, mission, goals, strategies, culture, structure, and leadership

Answer 4

c) Vision, mission, goals, strategies, culture, structure, and leadership

Explanation: These elements provide a comprehensive understanding of the organization’s direction, environment, and management.

Question 5

What are the seven organizational structures?
a) Simple, functional, divisional, matrix, team-based, network, and modular
b) Hierarchical, flat, matrix, network, circular, team-based, and modular
c) Simple, hierarchical, flat, matrix, network, team-based, and modular

Answer 5

a) Simple, functional, divisional, matrix, team-based, network, and modular

Explanation: These structures represent different ways organizations can be arranged to achieve their goals.

Question 6

What factors affect the design of an organization’s structure?
a) Size, technology, environment, and strategy
b) Size, location, industry, and culture
c) Technology, environment, leadership, and policies

Answer 6

a) Size, technology, environment, and strategy

Explanation: These factors influence how an organization is structured to effectively achieve its objectives.

Question 7

What is a key difference between Organization A and Organization B in Exhibit 17-1?

a) Organization A encourages risk-taking, while Organization B does not.
b) Organization A has extensive rules and regulations, while Organization B has few.
c) Organization A focuses on team-based activities, while Organization B focuses on individual activities.

Answer 7

b) Organization A has extensive rules and regulations, while Organization B has few.

Explanation: Organization A is characterized by strict rules and supervision, whereas Organization B has a more flexible and autonomous approach.

Question 8

How does Organization B treat failures?

a) Failures are penalized.
b) Failures are ignored.
c) Failures are treated as learning experiences.

Answer 8

c) Failures are treated as learning experiences.

Explanation: Organization B views failures as opportunities for learning and improvement, encouraging innovation and risk-taking.

Question 9

What is organizational structure?
a) The financial performance of an organization
b) A formal system of task and reporting relationships
c) The set of shared assumptions within an organization

Answer 9

b) A formal system of task and reporting relationships

Explanation: Organizational structure defines how tasks are divided, coordinated, and supervised to achieve organizational goals.

Question 10

What is the relationship between organizational culture and structure?
a) They are unrelated.
b) Culture shapes the structure, and structure reinforces the culture.
c) Structure determines culture.

Answer 10

b) Culture shapes the structure, and structure reinforces the culture.

Explanation: Organizational culture influences how the structure is designed, and the structure helps maintain and reinforce the culture.

Question 11

What is the Competing Values Framework used for?
a) To measure financial performance.
b) To assess organizational culture.
c) To design marketing strategies.

Answer 11

b) To assess organizational culture.

Explanation: The Competing Values Framework is a tool used to evaluate and understand different types of organizational cultures.

Question 12

Which type of culture values flexibility and encourages collaboration among employees?

a) Market culture
b) Clan culture
c) Hierarchy culture

Answer 12

b) Clan culture

Explanation: Clan culture is internally focused, values flexibility, and promotes collaboration among employees.

Question 13

Which type of culture is focused on the external environment and driven by competition?

a) Adhocracy culture
b) Market culture
c) Clan culture

Answer 13

b) Market culture

Explanation: Market culture is externally focused and driven by competition and a strong desire to deliver results.

Question 14

What are observable artifacts in organizational culture?

a) Core values of the organization
b) Explicitly stated values and norms
c) Physical manifestations such as manner of dress and visible behavior

Answer 14

c) Physical manifestations such as manner of dress and visible behavior

Explanation: Observable artifacts are the visible elements of culture, including dress code, awards, and behaviors exhibited by employees.

Question 15

What are espoused values?

a) Values and norms actually exhibited in the organization
b) Core values of the organization’s culture
c) Explicitly stated values and norms preferred by an organization

Answer 15

c) Explicitly stated values and norms preferred by an organization

Explanation: Espoused values are the values and norms that an organization explicitly states and promotes.

Question 16

What are basic assumptions in organizational culture?

a) Physical manifestations of culture
b) Explicitly stated values and norms
c) Core values that are taken for granted and highly resistant to change

Answer 16

c) Core values that are taken for granted and highly resistant to change

Explanation: Basic assumptions are the deeply embedded, taken-for-granted behaviors that are highly resistant to change.

Question 17

What is a symbol in organizational culture?

a) A narrative based on true events
b) An object, act, quality, or event that conveys meaning to others
c) A person whose accomplishments embody the values of the organization

Answer 17

b) An object, act, quality, or event that conveys meaning to others

Explanation: Symbols are objects, acts, qualities, or events that convey significant meaning within the organization.

Question 18

What is a story in organizational culture?

a) An object that conveys meaning
b) A narrative based on true events, repeated to emphasize a particular value
c) A planned ceremony

Answer 18

b) A narrative based on true events, repeated to emphasize a particular value

Explanation: Stories are narratives based on true events that are repeated and sometimes embellished to highlight specific values.

Question 19

Who is considered a hero in organizational culture?

a) A person who follows all rules and regulations
b) A person whose accomplishments embody the values of the organization
c) A person who avoids taking risks

Answer 19

a) A person who follows all rules and regulations

Explanation: Heroes are individuals whose achievements reflect and reinforce the organization’s values.

Question 20

What are rites and rituals in organizational culture?

a) Physical manifestations of culture
b) Activities and ceremonies that celebrate important occasions and accomplishments
c) Core values of the organization

Answer 20

b) Activities and ceremonies that celebrate important occasions and accomplishments

Explanation: Rites and rituals are planned and unplanned activities and ceremonies that celebrate significant events and achievements within the organization.

Question 21

What is one of the benefits of organizational culture?

a) It increases employee turnover.
b) It gives members an organizational identity.
c) It reduces the need for training.

Answer 21

b) It gives members an organizational identity.

Explanation: Organizational culture helps employees identify with the organization, fostering a sense of belonging and commitment.

Question 22

How does culture facilitate collective commitment?

a) By increasing competition among employees.
b) By making employees proud to be part of the company.
c) By reducing the need for communication.

Answer 22

b) By making employees proud to be part of the company.

Explanation: A strong culture creates a sense of pride and commitment among employees, encouraging them to work towards common goals.

Question 23

Which type of culture tends to produce better results?

a) Clan culture
b) Market culture
c) Hierarchy culture

Answer 23

b) Market culture

Explanation: Market cultures, which focus on competition and results, often lead to better organizational performance.

Question 24

Are employees generally happier with clan cultures?

a) Yes
b) No

Answer 24

a) Yes

Explanation: Clan cultures, which emphasize collaboration and a family-like environment, tend to increase employee satisfaction and happiness.

Question 25

Which of the following is a way to change or embed organizational culture? a) Ignoring employee feedback b) Formal statements c) Reducing employee benefits

Answer 25

b) Formal statements ## Footnote Explanation: Formal statements, such as mission statements and values, help communicate and reinforce the desired culture within the organization.

Question 26

How can leader reactions to crises influence organizational culture? a) By demonstrating the organization's values in action b) By avoiding difficult decisions c) By ignoring the crisis

Answer 26

a) By demonstrating the organization's values in action ## Footnote Explanation: Leaders' responses to crises can exemplify the organization's values and set a precedent for how similar situations should be handled in the future.

Question 27

What is an organization? a) A group of people with no specific goals b) A system of consciously coordinated activities or forces of two or more people c) A collection of unrelated tasks

Answer 27

b) A system of consciously coordinated activities or forces of two or more people ## Footnote Explanation: An organization is a coordinated system where people work together to achieve common goals.

Question 28

What are the three types of organizations? a) For-profit, nonprofit, and mutual-benefit b) Public, private, and governmental c) Large, medium, and small

Answer 28

a) For-profit, nonprofit, and mutual-benefit ## Footnote Explanation: Organizations can be categorized into for-profit (focused on making money), nonprofit (focused on providing services), and mutual-benefit (focused on advancing members' interests).

Question 29

What type of organization is the United Way? a) For-profit b) Nonprofit c) Mutual-benefit

Answer 29

b) Nonprofit ## Footnote Explanation: The United Way is a charitable organization that provides services to clients without the primary goal of making a profit.

Question 30

What does an organization chart illustrate? a) The financial performance of the organization b) The formal lines of authority and the organization’s official positions or work specializations c) The informal relationships among employees

Answer 30

b) The formal lines of authority and the organization’s official positions or work specializations ## Footnote Explanation: An organization chart is a visual representation of the hierarchy and division of labor within an organization.

Question 31

What information does the vertical hierarchy of an organization chart reveal? a) Who specializes in what work b) Who reports to whom (chain of command) c) The financial status of the organization

Answer 31

b) Who reports to whom (chain of command) ## Footnote Explanation: The vertical hierarchy shows the reporting relationships and chain of command within the organization.

Question 32

What does horizontal specialization in an organization chart indicate? a) The levels of management b) Who specializes in what work c) The organization's financial performance

Answer 32

b) Who specializes in what work ## Footnote Explanation: Horizontal specialization indicates the division of labor and the specific tasks or functions assigned to different positions within the organization.

Question 33

What is the common purpose in an organization? a) The financial goal of the organization b) The unifying element that gives everyone an understanding of the organization’s reason for being c) The individual goals of employees

Answer 33

b) The unifying element that gives everyone an understanding of the organization’s reason for being ## Footnote Explanation: The common purpose unifies employees and provides a clear understanding of the organization's mission and goals.

Question 34

What does coordinated effort in an organization refer to? a) Individual effort b) The coordination of individual effort into group-wide effort c) The division of labor

Answer 34

b) The coordination of individual effort into group-wide effort ## Footnote Explanation: Coordinated effort involves aligning individual efforts to achieve collective organizational goals.

Question 35

What is the division of labor? a) The process of assigning tasks to managers b) The arrangement of having discrete parts of a task done by different people c) The coordination of group efforts

Answer 35

b) The arrangement of having discrete parts of a task done by different people ## Footnote Explanation: Division of labor involves breaking down tasks into smaller parts and assigning them to different individuals to increase efficiency.

Question 36

What is the hierarchy of authority? a) A system where everyone has equal authority b) A control mechanism to ensure the right people do the right things at the right time c) A method of reducing the number of managers

Answer 36

b) A control mechanism to ensure the right people do the right things at the right time ## Footnote Explanation: The hierarchy of authority establishes a clear chain of command to ensure tasks are performed correctly and efficiently.

Question 37

What does a narrow span of control mean? a) A manager has a limited number of people reporting directly to them b) A manager has many people reporting directly to them c) There is no clear reporting structure

Answer 37

a) A manager has a limited number of people reporting directly to them ## Footnote Explanation: A narrow span of control means that a manager supervises a small number of employees, allowing for closer supervision.

Question 38

What does a wide span of control mean? a) A manager has a limited number of people reporting directly to them b) A manager has several people reporting directly to them c) There is no clear reporting structure

Answer 38

b) A manager has several people reporting directly to them ## Footnote Explanation: A wide span of control means that a manager supervises a larger number of employees, which can lead to more autonomy for employees.

Question 39

What is authority in an organization? a) The obligation to perform tasks b) The rights inherent in a managerial position to make decisions and utilize resources c) The process of assigning tasks to employees

Answer 39

b) The rights inherent in a managerial position to make decisions and utilize resources ## Footnote Explanation: Authority refers to the power and rights given to managers to make decisions and allocate resources.

Question 40

What is accountability in an organization? a) The process of assigning tasks to employees b) The obligation to perform tasks c) The requirement for managers to report and justify work results to higher management

Answer 40

c) The requirement for managers to report and justify work results to higher management ## Footnote Explanation: Accountability means that managers must explain and justify their decisions and actions to their superiors.

Question 41

What is delegation in an organization? a) The process of assigning managerial authority and responsibility to managers and employees lower in the hierarchy b) The obligation to perform tasks c) The rights inherent in a managerial position

Answer 41

a) The process of assigning managerial authority and responsibility to managers and employees lower in the hierarchy ## Footnote Explanation: Delegation involves transferring authority and responsibility from higher-level managers to lower-level managers and employees.

Question 42

What is centralized authority? a) Important decisions are made by middle-level managers b) Important decisions are made by higher-level managers c) Decisions are made by all employees

Answer 42

b) Important decisions are made by higher-level managers ## Footnote Explanation: Centralized authority means that key decisions are made by top management, ensuring consistency and control.

Question 43

What is decentralized authority? a) Important decisions are made by higher-level managers b) Important decisions are made by middle-level and supervisory-level managers c) Decisions are made by all employees

Answer 43

b) Important decisions are made by middle-level and supervisory-level managers ## Footnote Explanation: Decentralized authority allows decision-making power to be distributed among lower-level managers, promoting flexibility and responsiveness.

Question 45

What is the difference between line positions and staff positions in an organization chart? a) Line positions have dotted lines, staff positions have solid lines b) Line positions have solid lines, staff positions have dotted lines c) There is no difference

Answer 45

b) Line positions have solid lines, staff positions have dotted lines ## Footnote Explanation: Line positions, which are directly involved in achieving organizational goals, are represented by solid lines, while staff positions, which provide support and advice, are represented by dotted lines.

Question 46

What is a simple structure in organizational design? a) Authority is centralized in a single person with few rules and low work specialization b) Authority is decentralized with many rules and high work specialization c) Authority is shared equally among all employees

Answer 46

a) Authority is centralized in a single person with few rules and low work specialization ## Footnote Explanation: A simple structure is characterized by centralized authority, minimal rules, and low specialization, often found in small organizations.

Question 47

What is a functional structure in organizational design? a) People with similar occupational specialties are put together in formal groups b) Authority is centralized in a single person c) There are no formal groups

Answer 47

a) People with similar occupational specialties are put together in formal groups ## Footnote Explanation: A functional structure groups employees based on their specialized roles or functions, such as marketing, finance, or production.

Question 48

XYZ Hospital has a Chief of Medical Services, a Director of Administrative Services, and a Director of Outpatient Services. What type of structure does XYZ Hospital have? a) Functional b) Simple c) Divisional d) Matrix

Answer 48

a) Functional ## Footnote Explanation: A functional structure groups employees based on their specialized roles or functions, such as medical services, administrative services, and outpatient services.

Question 49

What is a divisional structure? a) Authority is centralized in a single person with few rules and low work specialization. b) People with diverse occupational specialties are put together in formal groups by similar products, customers, or geographic regions. c) An organization combines functional and divisional chains of command in a grid.

Answer 49

b) People with diverse occupational specialties are put together in formal groups by similar products, customers, or geographic regions. ## Footnote Explanation: A divisional structure organizes employees into groups based on similar products, customers, or geographic regions to focus on specific areas of the business.

Question 50

What is a matrix structure? a) Authority is centralized in a single person with few rules and low work specialization. b) People with diverse occupational specialties are put together in formal groups by similar products, customers, or geographic regions. c) An organization combines functional and divisional chains of command in a grid.

Answer 50

c) An organization combines functional and divisional chains of command in a grid. ## Footnote Explanation: A matrix structure blends functional and divisional structures, creating dual reporting relationships to improve flexibility and collaboration.

Question 51

What is the horizontal design in organizational structure? a) Authority is centralized in a single person with few rules and low work specialization. b) Teams or workgroups are used to improve collaboration and work on shared tasks by breaking down internal boundaries. c) An organization combines functional and divisional chains of command in a grid.

Answer 51

b) Teams or workgroups are used to improve collaboration and work on shared tasks by breaking down internal boundaries. ## Footnote Explanation: The horizontal design focuses on teamwork and collaboration by using teams or workgroups to work on shared tasks and break down internal silos.

Question 52

What is a hollow structure? a) The organization has a central core of key functions and outsources other functions to vendors who can do them cheaper or faster. b) The firm assembles product chunks, or modules, provided by outside contractors. c) An organization whose members are geographically apart, usually working with e-mail and other computer connections.

Answer 52

a) The organization has a central core of key functions and outsources other functions to vendors who can do them cheaper or faster. ## Footnote Explanation: A hollow structure focuses on maintaining a central core of essential functions while outsourcing non-core activities to external vendors.

Question 53

What is a modular structure? a) The organization has a central core of key functions and outsources other functions to vendors who can do them cheaper or faster. b) The firm assembles product chunks, or modules, provided by outside contractors. c) An organization whose members are geographically apart, usually working with e-mail and other computer connections.

Answer 53

b) The firm assembles product chunks, or modules, provided by outside contractors. ## Footnote Explanation: A modular structure involves assembling products from modules or components provided by external contractors, allowing for flexibility and efficiency.

Question 54

What is a virtual organization? a) The organization has a central core of key functions and outsources other functions to vendors who can do them cheaper or faster. b) The firm assembles product chunks, or modules, provided by outside contractors. c) An organization whose members are geographically apart, usually working with e-mail and other computer connections.

Answer 54

c) An organization whose members are geographically apart, usually working with e-mail and other computer connections. ## Footnote Explanation: A virtual organization operates with members who are geographically dispersed, relying on digital communication and collaboration tools to function.

Question 55

What characterizes mechanistic organizations? a) Decentralized authority, few procedures, and networks of employees encouraged to cooperate. b) Centralized authority, clearly specified tasks and rules, and close supervision of employees. c) Flexible structures with minimal hierarchy.

Answer 55

b) Centralized authority, clearly specified tasks and rules, and close supervision of employees. ## Footnote Explanation: Mechanistic organizations have a rigid structure with centralized authority, defined tasks, and strict supervision, suitable for stable environments.

Question 56

What characterizes organic organizations? a) Decentralized authority, few procedures, and networks of employees encouraged to cooperate. b) Centralized authority, clearly specified tasks and rules, and close supervision of employees. c) Rigid structures with strict hierarchy.

Answer 56

a) Decentralized authority, few procedures, and networks of employees encouraged to cooperate. ## Footnote Explanation: Organic organizations have a flexible structure with decentralized authority, minimal procedures, and encourage collaboration and adaptability.