Chapter 7

Question 2

Organizational structure

Answer 2

specification of the jobs to be done within a business and how those jobs relate to one another

Question 3

Organizational charts

Answer 3

physical depiction of the company’s structure showing employee titles and their relationship to one another

Question 4

Job specialization

Answer 4

process of identifying the specific jobs that need to be done and designating the people who will perform them

Question 5

Departmentalization

Answer 5

process of grouping jobs into logical units

Question 6

Functional departmentalization

Answer 6

departmentalization according to functions or activities

Question 7

Product departmentalization

Answer 7

departmentalization according to the products being created or sold

Question 8

Customer departmentalization

Answer 8

departmentalization according to the types of customers likely to buy a given product

Question 9

Process departmentalization

Answer 9

departmentalization according to the production process used to create a good or service

Question 10

Geographic departmentalization

Answer 10

departmentalization according to the area of the country or world supplied

Question 11

Authority

Answer 11

power to make the decisions necessary to complete a task

Question 12

Responsibility

Answer 12

duty to perform an assigned task

Question 13

Delegation

Answer 13

assignment of a task, a responsibility, or authority by a manager to a subordinate

Question 14

Accountability

Answer 14

obligation of subordinates to accomplish tasks and justify outcomes to managers

Question 15

Centralized organization

Answer 15

top managers retain most decision making rights for themselves

Question 16

Decentralized organization

Answer 16

lower and middle-level managers are allowed to make significant decisions

Question 17

Span of control

Answer 17

number of people managed by one manager

Question 18

Downsizing

Answer 18

planned reduction in the scope of an organization’s activity

Question 19

Line authority

Answer 19

authority that lows in a direct chain of command from the top of the company to the bottom

Question 20

authority that lows in a direct chain of command from the top of the company to the bottom

Answer 20

authority based on expertise and that usually involves advising line managers

Question 21

Committee and team authority

Answer 21

authority granted to committees or work teams involved in a firms daily operations

Question 22

Functional structure

Answer 22

various units are included in a group based on functions that need to be performed for the organization to reach its goals

Question 23

Divisional structure

Answer 23

divides the organization into divisions, each of which operates as a semi-autonomous unit

Question 24

Project organization

Answer 24

organization that uses teams of specialists to complete specific projects

Question 25

Matrix structure

Answer 25

organizational structure created by superimposing one structure onto another (employees report to 2 separate supervisors)

Question 26

International organizational structures

Answer 26

organizational structure designed to help a company succeed in international markets. International departments, international divisions and an integrated global organization are all variations of the international organizational structure

Question 27

Informal organization

Answer 27

network of personal interactions and relationships among employees unrelated to the firm’s formal authority structure

Question 28

Grapevine

Answer 28

informal communications network that carries gossip and other information throughout an organization

Question 29

Discuss the elements that influence a firm’s organizational structure.

Answer 29

• Mission and Strategy: A company’s mission and long-term strategy shape its organizational structure, as different goals require different approaches to management and decision-making.
• Size: Larger companies tend to have more complex structures, with specialized roles and multiple layers of management.
• Technology: The technology a firm uses can affect its structure. For example, companies that rely on sophisticated technologies may adopt a more flexible or decentralized structure to accommodate innovation.
• Environment: A rapidly changing environment may push firms toward more adaptive, decentralized structures, while stable environments may support more rigid, hierarchical structures.

Question 30

Explain how specialization and departmentalization are the building blocks of organizational structure.

Answer 30

• Specialization: This refers to dividing work into specific tasks and assigning them to individuals or teams based on their skills. By breaking down work into specialized tasks, companies increase efficiency and expertise within particular areas.
• Departmentalization: This involves grouping specialized jobs into departments or units to enhance coordination and control. Departments may be structured by function (e.g., marketing or finance), product, geography, customer type, or processes.

Question 31

Distinguish between responsibility and authority

Answer 31

• Responsibility: Refers to the obligation to complete assigned tasks and duties. Employees are responsible for specific outcomes.
• Authority: The power to make decisions, allocate resources, and give orders. Authority is often tied to a person’s position within the hierarchy.

Question 32

explain the differences in decision making in centralized and decentralized organizations.

Answer 32

• centralized organizations: decision-making is concentrated at the top levels of management. This allows for consistency and control but can slow down decision-making processes
• decentralized organizations: authority is distributed across lower levels of the organization. This allows for faster decision-making and greater flexibility, but there’s a risk of inconsistency in decisions across departments.

Question 33

Explain the differences among functional, divisional, project, and international organization structures

Answer 33

• Functional Structure: Groups employees based on the functions they perform (e.g., marketing, finance). This structure allows specialization but can create silos where departments become isolated from each other.
• Divisional Structure: Groups employees based on products, customers, or geographic regions. Each division operates semi-independently and is focused on specific markets, which increases responsiveness to market needs.
• Project Organization: A temporary or permanent structure where teams are formed for specific projects. This structure is more flexible and promotes collaboration among employees from different functions.
• International Structure: This structure is designed to manage operations across different countries, often using either a geographic or global product division approach.

Question 34

describe the most popular forms of organizational design.

Answer 34

• matrix structures, which combine functional and divisional structures
• boundaryless organizations, which remove traditional boundaries between departments to enhance communication and collaboration.

Question 35

Understand how the informal organization is different from the formal organization.

Answer 35

• Formal Organization: The officially defined structure of a company, consisting of formal roles, responsibilities, and relationships. It’s represented in organizational charts and job descriptions.
• Informal Organization: Refers to the network of personal and social relationships that arise naturally among employees. This includes informal communication channels (grapevine) and social groups, which can influence decision-making and workplace dynamics.