Organizational Structure

Question 1

Key elements of organization structure

Answer 1

Consists of 2 or more individuals working together to achieve a group result
Formal layout of the company
Clearly defines reporting relationships, decision-making authority and physical location of employees

Question 2

Define Tall Structure

Answer 2

Narrow span and more hierachical levels

Provide clear, distinct layers with obvious lines of responsibility and control and a clear promotion structure

Question 3

Drawbacks to Tall Structure

Answer 3

Too tall and communication begins to take too long to travel through all the levels

Question 4

Define Flat Structure

Answer 4

Lines of communication are short, making the firm responsive to change
A wide span of control means that tasks must be delegated and managers can feel overstretched

Question 5

Define departmentalization

Answer 5

Efficient and effective grouping of related functions in manageable units to achieve objectives

Question 6

Specialized Function

Answer 6

President –> Operation, marketing, finance

Question 7

Product

Answer 7

PIC –> Parenterals, Prescriptions, durable medical equipment

Question 8

Market

Answer 8

President –> Healthcare, government, education

Question 9

Customer

Answer 9

President –> Nursing homes, retail, hospitals

Question 10

Geographic area structure

Answer 10

CEO –> SW region, E region, W region

Question 11

Matrix Structure

Answer 11

You have a general manager, then other leaders and then project managers who have to work together

Question 12

Define Delegation

Answer 12

The process of accomplishing goals through others

Essential the minute a job becomes too complex, too voluminous or too diverse for one employee

Question 13

Risk of Delegations

Answer 13

Loss of control
Reverse delegation (when a manager assumes a task delegated to an employee)
Loss of job

Question 14

Define Scalar Principle

Answer 14

“Chain of Command”
Should be a clear definition of authority
Results in explanation of relationships, reduced confusion and enhanced decision making

Question 15

Define Centralization

Answer 15

Limited amount of authority has been delegated

Measured on a sliding scale from highly centralized to decentralized

Question 16

Highly centralized organizations

Answer 16

Delegate little authority to lower level

Question 17

Highly decentralized organizations

Answer 17

Delegate broad ranges of authority to lower levels of employees

Question 18

Advantages of Centralization

Answer 18

Tightened control of operation
Standardization of policies and procedures
Increased use of specialized experts

Question 19

Advantages of Decentralization

Answer 19

Faster decision making
Trains leaders at lower levels to transition to higher levels
Activities tailored to meet local conditions

Question 20

Define Line Structure

Answer 20

Has only direct vertical relationships between different levels in the firm

Question 21

Advantages of Line Structure

Answer 21

Tends to simplify and clarify authority, responsibility and accountability relationships
Promotes fast decision making
Simple to understand

Question 22

Disadvantages of Line Structure

Answer 22

Neglects specialist in planning

Overloads key persons

Question 23

Define Line position

Answer 23

A position in the direct chain of command that is responsible for the achievement of an organization’s goals

Question 24

Define Staff position

Answer 24

A position intended to provide expertise, advice and support for the line positions

Question 25

Staff and Functional Authority Organizational Structure

Answer 25

Staff departments have authority over line personnel in narrow areas of specialization is known as functional authority organization

Question 26

Committee Organizational Structure

Answer 26

Committee is a group of people appointed to consider or make decisions
Can be standing (permanent) or ad hoc (temporary)

Question 27

Ad hoc (temporary)

Answer 27

Formed to deal with a specific issue, once the task is completed the committee is dissolved

Question 28

Define Contingency Approach

Answer 28

Dictates that the development of an effective organizational structure is contingent upon the situation the organization is operating

Question 29

Contingency approach focus upon:

Answer 29

Environment
Technology 
Change
Size of the organization
Other forces