Chapter 8: Adapting Organizations to Today's Markets

Question 1

Economies of scale

Answer 1

The situation in which companies can reduce their production costs if they can purchase raw materials in bulk; the average cost of goods goes down as production levels increase

Question 2

Hierarchy

Answer 2

A system in which one person is at the top of the organization and there is a ranked or sequential ordering from the top down of managers who are responsible to that person

Question 3

Chain of command

Answer 3

The line of authority that moves from the top of a hierarchy to the lowest level

Question 4

Bureaucracy

Answer 4

An organization with many layers of managers who set rules and regulations and oversee all decisions

Question 5

Centralized authority

Answer 5

AN organization structure in which decision-making authority is maintained at the top level of management at the company headquarters

Question 6

Decentralized authority

Answer 6

An organization structure in which decision-making authority is delegated to lower-level managers more familiar with local conditions than headquarters management could be

Question 7

Span of control

Answer 7

The optimum number of subordinates a manager supervises or should supervise

Question 8

Tall organization structure

Answer 8

An organizational structure in which the pyramidal organization chart would be quite tall because of the various levels of management

Question 9

Flat organization structure

Answer 9

An organization structure that has few layers of management and a broad span of control

Question 10

Departmentalization

Answer 10

The dividing of organizational functions into separate units

Question 11

Line organization

Answer 11

An organization that has direct two-way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with all people reporting to only one supervisor

Question 12

Line personnel

Answer 12

Employees who are part of the chain of command that is responsible for achieving organizational goals

Question 13

Staff personnel

Answer 13

Employees who advise and assist line personnel in meeting their goals

Question 14

Matrix organization

Answer 14

An organization in which specialists from different parts of the organization are brought together to work on specific projects but still remain part of a line-and-staff structure

Question 15

Cross-functional self-managed teams

Answer 15

Groups of employees from different departments who work together on a long-term basis

Question 16

Networking

Answer 16

Using communications technology and other means to link organizations and allow them to work together on common objectives

Question 17

Real time

Answer 17

The present moment or the actual time in which something takes place

Question 18

Transparency

Answer 18

A concept that describes a company being so open to other companies working with it that the once-solid barriers between them become see-through and electronic info is shared as if the companies are one.

Question 19

Virtual corporation

Answer 19

A temporary networked organization made up of replaceable firms that join and leave as needed

Question 20

Benchmarking

Answer 20

Comparing an organization’s practices, processes, and products against the world’s best

Question 21

Outsourcing

Answer 21

Assigning various functions, such as accounting, production, security, maintenance, and legal work, to outside organizations

Question 22

Restructuring

Answer 22

Redesigning an organization so that it can more effectively and efficiently serve its customers

Question 23

Core competencies

Answer 23

Those functions that the organization can do as well as or better than any other organization in the world

Question 24

Inverted organization

Answer 24

An organization that has contact people at the top and the chief executive officer at the bottom of the organization chart

Question 25

Reengineering

Answer 25

The fundamental rethinking and radical redesign of organizational processes to achieve dramatic improvements in critical measures of performance

Question 26

Organizational (or, corporate) culture

Answer 26

Widely shared values within an organization that provide unity and cooperation to achieve common goals

Question 27

Formal organization

Answer 27

The structure that details lines of responsibility, lines of authority, and position; that is, the structure shown on organization charts

Question 28

Informal organization

Answer 28

the system of relationships and lines of authority that develops spontaneously as employees meet and form power centers; that is, the human side of the organization that doesn’t appear on any organization chart