Chapter 8

Question 1

Organization Chart

Answer 1

depicts the positions in the firm and the way they are arranged

Question 2

Differentiation

Answer 2

the organization is composed of many units that work on different kids of tasks using different skills and work methods

Question 3

Integration

Answer 3

differentiated units are put back together so that work is coordinated into an overall product

Question 4

Division of Labor

Answer 4

the work of the organization is subdivided into smaller tasks with various individuals and units throughout the organization performing different tasks
differentiation

Question 5

Specialization

Answer 5

refers to the fact that different people or groups often perform specific parts of the larger task
differentiation

Question 6

Coordination

Answer 6

the procedures that link the various parts of an organization for the purpose of achieving the organization’s overall mission
integration

Question 7

Authority

Answer 7

the legitimate right to make decisions and to tell other people what to do

Question 8

3 Duties of Board of Directors

Answer 8

1: selecting, assessing, rewarding, and prehaps replacing the CEO
2: determining the firm’s strategic direction and reviewing financial performance
3: ensuring ethical, socially responsible, and legal conduct

Question 9

Top Directors on the Board are called what?

Answer 9

Inside Directors

Question 10

CEO

Answer 10

chief executive officer who occupies the top of the organizational pyramid, personally accountable to the board and to the owners for the organization’s performance

Question 11

Top Management Team

Answer 11

comprised of CEO, president, chief operating officer, chief financial officer, and other key executives

Question 12

Hierarchy

Answer 12

the authority levels of the organizational pyramid

Question 13

Corporate Governance

Answer 13

the role of a corporation’s executive staff and board of directors in ensuring that the firm’s activities meet the goals of the firm’s stakeholders

Question 14

Sarbanes-Oxley Act

Answer 14

imposed much tighter corporate governance rules (EX: CEOs and CFOs have to certify the accuracy of their firm’s financial statements personal)

Question 15

subunits

Answer 15

subdivisions of an organization

Question 16

Span of Control

Answer 16

the number of subordinates who report directly to an executive or supervisor
optimal #: 5 Bonaparte
12 btwn ‘08 and ‘12

Question 17

Delegation

Answer 17

the assignment of new or additional responsibilities to a subordinate

Question 18

Responsibility

Answer 18

the assignment of a task that an employee is supposed to carry out

Question 19

Accountability

Answer 19

the expectation that employees will perform a job, take corrective action when necessary, and report upward on the status and quality of their performance

Question 20

Steps in Delegation

Answer 20

1: Define the goal succinctly.
2: Select the person for the task.
3: Solicit the subordinate’s views about suggested approaches.
4: Give the subordinate the authority, time, and resources (people, money, equipment) to perform the assignment.
5: Schedule checkpoints for reviewing progress.
6: Follow through by discussing progress at appropriate intervals.

Question 21

Centralized Organization

Answer 21

an organization in which high-level executives make most decisions and pass them down to lower levels for implementation

Question 22

Decentralized Organization

Answer 22

an organization in which lower-level managers make important decisions

Question 23

Line Departments

Answer 23

units that deal directly with the organization’s primary goods and services

Question 24

Staff Departments

Answer 24

units that support line departments

Question 25

Departmentalization

Answer 25

subdividing an organization into smaller subunits

Question 26

Functional Organization

Answer 26

departmentalization around specialized activities such as production, marketing, and human resources

Question 27

Divisional Organization

Answer 27

departmentalization that groups units around products, customers, or geographic regions

Question 28

Matrix Organization

Answer 28

an organization composed of dual reporting relationships in which some employees report to two superiors - a functional manager and a divisional manager

Question 29

unity-of-command principle

Answer 29

a structure in which each worker reports to one boss, who in turn reports to one boss

Question 30

Network Organization

Answer 30

a collection of independent, mostly single-function firms that collaborate on a good or service

Question 31

Dynamic Network

Answer 31

temporary arrangements among partners that can be assembled and reassembled to adapt to the environment

Question 32

Broker

Answer 32

a person who assembles and coordinates participants in a network

Question 33

Standardization

Answer 33

establishing common routines and procedures that apply uniformly to everyone

Question 34

Formalization

Answer 34

the presence of rules and regulations governing how people in the organization interact

Question 35

Coordination by Plan

Answer 35

interdependent units are required to meet deadlines and objectives that contribute to a common goal

Question 36

Coordination by Mutual Adjustment

Answer 36

units interact with one another to make accommodations to achieve flexible coordination

Question 37

Explain how differentiation and integration influence an organization’s structure.

Answer 37

Differentiation means that organizations have many parts. Specialization means that various individuals and units throughout the organization perform different tasks. The assignment of tasks to different people or groups often is referred to as the division of labor. But the specialized tasks in an organization cannot all be performed independently of one another. Coordination links the various tasks to achieve the organization’s overall mission. An organization with many specialized tasks and work units is highly differentiated; the more differentiated the organization is, the more integration or coordination is required.

Question 38

Summarize how authority operates.

Answer 38

Authority is the legitimate right to make decisions and tell other people what to do. Authority is exercised throughout the hierarchy because bosses have the authority to give orders to subordinates. Through the day-to-day operation of authority, the organization proceeds toward achieving its goals. Owners or stockholders have ultimate authority.

Question 39

Define the roles of the board of directors and the chief executive officer

Answer 39

Boards of directors report to stockholders. The board of directors controls or advises management, considers the firm’s legal and other interests, and protects stockholders’ rights. The chief executive officer reports to the board and is accountable for the organization’s performance.

Question 40

Discuss how span of control affects structure and managerial effectiveness.

Answer 40

Span of control is the number of people who report directly to a manager. Narrow spans create tall organizations, and wide spans create flat ones. No single span of control is always appropriate; the optimal span is determined by characteristics of the work, the subordinates, the manager, and the organization.

Question 41

Explain how to delegate effectively

Answer 41

Delegation—the assignment of tasks and responsibilities—has many potential advantages for the manager, the subordinate, and the organization. But to be effective, the process must be managed carefully. The manager should define the goal, select the person, solicit opinions, provide resources, schedule checkpoints, and discuss progress periodically.

Question 42

Distinguish between centralized and decentralized organizations

Answer 42

In centralized organizations, most important decisions are made by top managers. In decentralized organizations, many decisions are delegated to lower levels.

Question 43

Summarize ways organizations can be structured

Answer 43

Organizations can be structured on the basis of function, division (product, customers, or geographic), matrix, and network. Each form has advantages and disadvantages.

Question 44

Identify the unique challenges of the matrix organization

Answer 44

The matrix is a complex structure with a dual authority organization. A well-managed matrix enables organizations to adapt to change. But it can also create confusion and interpersonal difficulties. People in all positions in the matrix—top executives, product and function managers, and two-boss employees—must acquire unique survival skills

Question 45

Describe important integrative mechanisms

Answer 45

Managers can coordinate interdependent units through standardization, plans, and mutual adjustment. Standardization occurs when routines and standard operating procedures are put in place. They typically are accompanied by formalized rules. Coordination by plan is more flexible and allows more freedom in how tasks are carried out but keeps interdependent units focused on schedules and joint goals. Mutual adjustment involves feedback and discussions among related parties to accommodate each other’s needs. It is at once the most flexible and simple to administer, but it is time-consuming.