Understanding business Test bank solution Chap 8 Structuring organizations to todays markets

Discuss Max Webers views on organization theory What is a matrix organization? What advantages and disadvantages are associated with this type of organization? Nhập môn Kinh Tế What is a crossfunctional, selfmanaged team? Who would serve on such teams? Why do crossfunctional, selfmanaged teams often lead to networking? Describe two major issues that are important in organizational design Explain the difference between a firms formal organization and its informal organization. Why are both types of organization important to managers?

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Chapter 08 - Structuring Organizations for Today's Challenges

TEST PLANNING TABLE FOR CHAPTER 8

232,233,234,235,236,237, 238,239,240,241,242,243, 244,245

55,56,57,58,59,60,

246,247,248,249,250, 251,252,253,254

61,62,63,64,65,66,67, 68,69,70,

255,256,257,258,259, 260.261,262,263,264, 265,

360, 365*

3 Evaluate the choices

managers make in

structuring organizations.

71,72,73,74,75,76,77,78, 79,80,81,82,83,84,85,85, 86,87,88,89,90,91,92,93, 94,95,96,97,98,99,100,101, 102,103,

266,267,268,269,270,271, 272,273,274,275,276,277, 278,279

104,105,106,107,108, 109,110,111,

280,281,282,283

112,113,114,115,116, 117,118,119,120,121,

284,285,286,287,288, 289,290,291,292,293, 294,

363, 367*

4 Contrast the various

organizational models.

122,123,124,125,126,127, 128,129,130,131,132,133, 134,135,136,137,138,139, 140,141,142,143,144,145,

146,147,148,149,150, 295,296,297,298,299,300, 301,302,303,304,305

151,152,153,154,155, 156,

306,307,308,309,310

157,158,159,160,161, 162,163,

311,312,313,314,315, 316,317,

361,362, 368*

5 Identify the benefits

of interfirm cooperation

and coordination.

164,165,166,167,168,169, 170,171,172,173,174,175, 176,177,178,179,180,181, 182,183,184,185,186,187,

188, 318,319,320,321,322,323, 324,325,326,327,328,329, 330,331

189,190,191,192,193~, 194~,195~,

332,333,334,335,336, 337,338~

196,197,198,199,200, 201,202,

339,340,341,342,343, 344,345,

364, 369*

Total number of test items: 369

True/false questions are in plain text.

Multiple choice questions are in bold text.

Questions on boxed material are in bold text with a tilde~.

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Chapter 08 Structuring Organizations to Today's Markets Answer Key

True / False Questions

1 Organizing the structure of the company means deciding how many jobs need to be done

and who is responsible for doing them

Answer: True

AACSB: Reflective Thinking

Bloom’s: Remember

Learning Objective: 08-01 Outline the basic principles of organization management

Level of Difficulty: 1 Easy

Topic: Organizational Structure

2 In a capitalist economy, organizations seldom reorganize due to changing markets

Answer: False

3 One key to organizational success is to go back to basic principles and build the business

on a sound foundation

Answer: True

4 Small business organizations lack the size required to reap the benefits of labor

specialization

Answer: False

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5 The purpose of a division of labor and specialization is to improve an employee's job

performance

Answer: True

6 Managing a growing business often requires managers to create departments to

accomplish various tasks

Answer: True

Topic: Building an Organization from the Bottom Up

7 The process of creating individual departments to do specialized tasks is called

departmentalization

Answer: True

8 Division of labor refers to deciding how many jobs must be accomplished and then

dividing them up amongst the labor force

Answer: True

9 The success of the firm often depends on assigning the right tasks to the right person

Answer: True

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10 The process of setting up individual departments to do specialized tasks is called job

specialization

Answer: False

11 Correctly structuring a business organization allows managers to avoid delegating

responsibility and authority to employees

Answer: False

12 Division of labor is difficult to achieve in small businesses

Feedback: Division of labor is a basic organizational principle in all organizations All

businesses (both large and small) should contemplate the division of labor in their

organizations

Answer: False

Bloom’s: Understand

Level of Difficulty: 2 Medium

13 Departments are functional units within the business such as sales, accounting, finance,

and marketing

Feedback: The basic principles of organization do not differ significantly from firm to firm

As firms grow, they usually develop a system with division of labor and specialization and then proceed to departmentalize, to create departments that produce specialized tasks for the business

Answer: True

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14. As indicated in the Making Ethical Decisions box, "Would You Sacrifice Safety for

Profit?" organizational decisions that affect profits in a negative way should be avoided at all cost

Feedback: As indicated in the box, how your organization performs the job is very important

Setting the tone of and maintaining an organization’s culture is as important as setting up an organization’s structure Adhering to safety precautions when doing the job demonstrates management's commitment to their employees

Answer: False

AACSB: Ethics

15 In its effort to reorganize its floor space, Backstreet Books decided to eliminate seating

space in its stores in order to make room for bookshelves to accommodate the growing

interest in books about how to go green This company's effort is an example of how a

firm may reduce its emphasis in one product line in order to serve customer preferences and trends

Feedback: If a firm wants to remain competitive, it may reevaluate which product lines are

more profitable than others and organize its floor space and marketing emphasis to capture consumer attention The text uses the example of Starbucks changing and re-changing their menus

Answer: True

AACSB: Analytical Thinking

Bloom’s: Analyze

Level of Difficulty: 3 Hard

16 To better organize his landscaping business, Frank divides each job into several parts

One part is excavation and removal of old landscaping, the next part is design, followed

by purchasing, and the last part is installation of new plants If he assigns a different employee to each part, this action would be an example of departmentalization

Feedback: Departmentalization is the creation of functional units of a business The jobs

described in this question would all fall under the production department Other departments

in Frank's business may include marketing, sales, and accounting By asking different

employees to perform different tasks relating to a particular job, Frank is creating division of labor within his company, and/or specialization

Answer: False

AACSB: Knowledge Application

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17 Alicia dreams of opening her own restaurant and knows that she will need to organize her

business Organizing begins with determining the work to be done

Feedback: Organizing, also known as adding structure to the business, begins with

determining what work needs to be done and then dividing up tasks among the employees

Answer: True

Bloom’s: Apply

18 When Eric Schmidt joined Google he tackled the organization function head-on In

speaking at a large conference with its founders, Sergey Brin and Larry Page, he

commented that Google was running pretty well but "it just needed a little structure." Schmidt was referring to basic organization principles such as division of labor,

specialization, and getting the departments running smoothly

Feedback: Basic organization principles include division of labor, specialization of tasks, and

departmentalization

Answer: True

19 The driving force behind the change in business organizations is the change in consumer

expectations

Answer: True

Learning Objective: 08-02 Compare the organizational theories of Fayol and Weber

20 Henri Fayol and Max Weber are best known for their contributions to accounting theory

Answer: False

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21 Fayol's principle of the division of labor says that functions should be divided into areas

of specialization such as production, marketing, and finance

Answer: True

22 One of Fayol's principles suggests that managers should have the right to give orders and

expect others to follow

Answer: True

23 Fayol's principle of esprit de corps says that employees should be divided into small

groups that can be directed efficiently by a single manager

Answer: False

24 Fayol's principles suggest that the goals of the firm are less important than the goals of

individual workers

Answer: False

25 According to Fayol's principle of authority, if you have authority you also have

responsibility

Answer: True

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26 Fayol believed that the amount of decision-making power vested in top management

should be the same in all situations

Answer: False

27 Fayol believed that managers should treat employees and peers with respect and justice.

Answer: True

28 Clear communication among workers and keeping order in materials and people are

included in Fayol's principles

Answer: True

29 Max Weber's principles of organization were similar to those of Henri Fayol

Answer: True

30 Weber believed that large organizations required everyone to follow the established rules

and guidelines precisely

Answer: True

31 Weber was critical of bureaucrats because he felt they undermined the efficiency of the

organization

Answer: False

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32 Weber had a great deal of faith in managers He was confident that a firm would do well

if employees simply did as they were told

Answer: True

33 Weber promoted the idea of the pyramid-shaped organization structure for large

businesses

Answer: True

34 Max Weber's organizational theories require an educated workforce to operate

efficiently

Answer: False

35 Weber was a strong proponent of bureaucracy

Answer: True

36 Some business organizations still follow the 1940s organizational theory of Max Weber

Answer: True

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37 Weber believed that employees should be empowered to make their own decisions

Answer: False

38 Job descriptions are an important part of Max Weber's organizational theory

Answer: True

39 Max Weber believed that promotion should be based solely on seniority

Answer: False

40 The design of a bureaucratic organization assumes a well-educated workforce.

Answer: False

41 An organizational hierarchy establishes one person at the top of an organization.

Answer: True

42 A chain of command is a line of authority that moves from the lowest level of the

hierarchy to the top

Answer: False

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43 A hierarchy requires many top managers, but only a few middle managers.

Answer: False

44 According to Weber, a bureaucrat is a middle manager whose job is to implement top

management's orders

Answer: True

45 A bureaucracy empowers employees to quickly respond to customers' wants and desires

Answer: False

46 A bureaucracy is an organization with many layers of managers who set rules and

regulations and oversee all decisions

Answer: True

47 Bureaucratic organizations establish rules and regulations that everyone is expected to

follow

Answer: True

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48 Bureaucratic organizations are not very responsive to customers

Answer: True

49 A bureaucracy is designed to be customer focused

Answer: False

50 Bureaucratic organizations are structured to empower employees and please customers

Answer: False

51 A bureaucratic style of organization is slow when responding to change

Answer: True

52 Empowerment works only when employees are given the proper training and resources to

respond

Answer: True

53 The basic idea behind the organization design of Fayol and Weber was that management

wanted to control workers.

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54 An organization chart shows who is accountable for the completion of specific work and

who reports to whom

Answer: True

55 Looking at a traditional organization chart, you will view who reports to whom; you will

have a sense of each person's authority and responsibility, and the type of work that they perform for the organization

Feedback: An organization chart shows you who reports to whom, and who is accountable for

the completion of what jobs

Answer: True

56 As organizations grew, the use of Fayol's principles led to rigid organizations that didn't

always respond quickly to consumer requests

Feedback: Organizations were designed according to Fayol's principles so that no person had

more than one boss These principles tended to be written down as rules, policies, and

regulations as organizations grew larger The process of rule making often led to rather rigid organizations that didn't always respond quickly to consumer requests

Answer: True

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57 In today's fast-paced business environment, Weber's bureaucratic ideas work well These

principles permit business to respond quickly to customer changes

Feedback: Max Weber's ideas worked well with a less educated workforce that did not make

decisions The bureaucratic model did not allow for immediate response to changing market conditions and changing customer needs

Answer: False

58 When we experience economies of scale, this means that as production levels rise (we

make more of something), the cost of supplies and the cost of labor that go into the production go down

Feedback: Economies of scale implies that the costs of production go down as the level of

production rises

Answer: True

59 The purpose of Weber's and Fayol's principles was for the benefit of management, as

opposed to pleasing customers

Feedback: Fayol’s and Weber’s ideas made management's life easier Their organization

principles facilitated management's needs, but did little for employees or customers

Answer: True

60 Weber put great trust in the creativity, skills, and pride of employees and believed that

managers should act more as coaches than as bosses

Feedback: Weber put great trust in managers and believed that workers should simply do as

they were told

Answer: False

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61 Blake is a manager at a car seat manufacturing company He believes that it is very

important and less confusing if each worker has only one boss Blake’s view is consistent with Fayol's unity of command principle

Feedback: The unity of command principle says that each worker should report to one, and

only one, boss

Answer: True

Bloom’s: Apply

Topic: The Development of Organization Design

62 Rob is a middle manager who spends much of his time devising ways to implement the

ideas of top management Max Weber would have considered Rob a bureaucrat

Feedback: Max Weber used the term bureaucrat to describe middle managers whose main

function was to implement top management's orders

Answer: True

Bloom’s: Apply

63 Paige believes all workers should receive the same wage rate regardless of their position

within a company Paige’s views on wages illustrate Fayol's principle of equity

Feedback: Fayol's principle of equity says that managers should treat employees with respect

and justice It does not, however, suggest that all workers should be paid the same wage rate

Answer: False

Bloom’s: Apply

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64 Kate holds a middle-management position with a large corporation She prefers to

involve her subordinates in decision making She also favors allowing workers a fair amount of flexibility in how they do their jobs Kate’s approach to management

exemplifies the principles first popularized by Max Weber

Feedback: Weber believed that the firm would do well if workers simply did as they were

told He also believed that large organizations could only function efficiently if rules and guidelines were established, and everyone followed these rules precisely

Answer: False

Bloom’s: Apply

65 Most businesses adopt a bureaucratic organization in order to speed up their

decision-making process

Feedback: In a bureaucratic organization there are typically many layers of management with

rigid rules and regulations A strict chain of command is followed, which can slow down the decision-making process

Answer: False

Bloom’s: Apply

66 Antonio works in the accounting department of a large firm This is an example of

Fayol's division of labor concept

Feedback: Henri Fayol's division of labor suggests that efficiency can be improved if

employees are assigned into an area of specialization, such as production, marketing, and finance

Answer: True

Bloom’s: Apply

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67 As a new employee in a bureaucratic organization, Nelle can expect a great deal of

independence and authority

Feedback: In a bureaucratic organization, everyone is expected to follow specific rules One

of the problems with this type of organization is that employees have little flexibility to respond to customer wants and needs

Answer: False

Bloom’s: Apply

68 Soprano Industries follows a chain of command with authority moving from the top of

the hierarchy down to lower-level managers The company is organized by department with established rules and regulations that everyone is expected to follow These

characteristics suggest that Soprano Industries is an example of a bureaucratic

organization

Feedback: Bureaucratic organizations are characterized by top-down authority, division of

labor, and the presence of many rules and regulations

Answer: True

Bloom’s: Apply

69 At Dilly-Dally Sportswear Store a manager needs to be called to the front of the store and

sign off on every return that a cashier performs The CEO continues this policy because hewants every manager to "look those customers right in the eye" and "stake their job on taking those items back." Clearly, Dilly-Dally empowers its employees to make decisions

at their jobs

Feedback: Bureaucratic organizations are characterized by top-down authority, division of

labor, and the presence of many rules and regulations Empowerment is often missing from anorganization where decisions are made top-down

Answer: False

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70 Sam supervised a group of people in a very large organization The refrigerator in their

lunchroom stopped functioning He started the paperwork on the day it died, and the refrigerator request went out for bid; two middle managers needed to approve acceptance

of the bid and document their decision, and the purchasing director had final approval The refrigerator arrived six months later Max Weber would have approved of the

decision process and documentation of it at Sam's company to back up such a refrigerator purchase

Feedback: Max Weber is known as the originator of the concept of bureaucracy, where

decisions are followed up with lots of paperwork and documentation There are several layers

of management, and decisions must be approved by several people, creating a significant lag time from the first recognition of a problem until the problem is finally solved

Answer: True

71 The degree to which an organization allows lower-level managers to make decisions

reflects the degree of decentralization

Answer: True

Learning Objective: 08-03 Evaluate the choices managers make in structuring organizations

Topic: Delegation and Authority

72 An advantage of decentralized authority is that those individuals closest to the customers

and more familiar with local conditions make decisions

Answer: True

73 Centralized authority provides for the delegation of authority to employees who are then

better able to respond to customers' needs

Answer: False

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74 As a result of rapidly changing markets and global differences in consumer tastes, more

firms are considering centralized authority

Answer: False

75 A weakened corporate image is one of the disadvantages of a decentralized business

organization

Answer: True

76 In firms with centralized authority, each business unit is treated as if it is a completely

separate and independent organization

Answer: False

77 Span of control refers to the number of different markets a business can serve efficiently

Answer: False

78 The optimum number of subordinates a manager should supervise is referred to as the

span of control

Answer: True

79 In today's business environment, the trend is to decrease the span of control

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80 The more standardized the work, the wider the span of control

Answer: True

81 Managers near the top of an organization have the broadest span of control

Answer: False

82 The more complex the job, the narrower the span of control

Answer: True

83 When employees are self-managed, a company can implement a wider span of control

Answer: True

84 Improvements in information technology have permitted companies to increase their span

of control

Answer: True

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85 A tall organization structure consists of multiple levels of management

Answer: True

86 A flat organizational structure is designed to be more responsive to the needs of

management

Answer: False

87 Flat organizations have fewer managers

Answer: True

88 An advantage of a tall organization is that it ensures fast and efficient communications

throughout the organization

Answer: False

89 A recent business trend is the elimination of layers of management, creating flatter

organizations and subsequently, a wider span of control

Answer: True

90 Departmentalization is the dividing of organizational functions into separate units

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91 The traditional way to departmentalize an organization is by geographical area served

Answer: False

92 Departmentalization by function allows employees opportunity to further develop their

skills

Answer: True

93 Departmentalization by function typically increases the cost of doing business

Answer: False

94 Departmentalization by function groups employees based on similar skills, expertise, or

resource use

Answer: True

95 An advantage of departmentalization is groupthink

Answer: False

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96 Organizations that utilize functional departmentalization benefit from improved

communication between departments

Answer: False

97 Departmentalization creates an environment in which people are trained in a variety of

managerial responsibilities

Answer: False

98 Economies of scale can be achieved through departmentalization

Answer: True

99 Some firms use a combination of departmentalization techniques

Answer: True

100. The decision on how to departmentalize should depend on the customer and the product or service the firm is offering

Answer: True

101. Departmentalizing by customer group has proven ineffective

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102. If there are several steps in getting the product to its final state, the company may

choose to departmentalize by process

Answer: True

103. Some companies have created hybrid versions of departmentalization, where they

combine two or more traditional ways of departmentalizing

Answer: True

104. When management structures the organization, it clarifies who gets to make decisions,how many people report to one manager, and how many different departments the

company needs in order to operate effectively

Feedback: Structuring the organization involves deciding on a centralization versus

decentralization decision-making policy; it involves decisions with regard to span of control, meaning how many employees will report to one manager; and it involves how to

departmentalize

Answer: True

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105. When management structures the organization, it makes decisions about which

products and services it will offer and how it is going to finance the company

Feedback: Structuring the organization involves deciding on a centralization versus

decentralization decision-making policy; it involves decisions with regard to span of control, meaning how many employees will report to one manager; and it involves how to

departmentalize

Answer: False

106. Because top managers supervise the firm's most talented workers, they generally have

a broader span of control than middle or first-line managers

Feedback: At higher levels of management, the work becomes less standardized and there is a

greater need for face-to-face communication These factors tend to result in a narrow span of control for top managers

Answer: False

107. As the span of control widens, there is usually a reduction of middle management and

108. A flat organization is less likely to respond quickly to customer needs

Feedback: Flat organizations have wider spans of control A wider span of control lends itself

to empowering lower-level employees to respond more quickly to customer needs, without the need to get permission from managers

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109. To avoid losing that small company feel, fast growing companies try to maintain a flatorganization structure

Feedback: Large companies use flat structures to try to match the friendliness of small

companies

Answer: True

110. Although a firm may experience better cost controls through departmentalization, it may not increase its responsiveness to customer needs

Feedback: An advantage of departmentalization is economies of scale A disadvantage is less

responsiveness to customers

Answer: True

111. Businesses seldom create separate departments to serve customers with different needs

Feedback: Some organizations departmentalize by customer group.

Answer: False

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112. Rise ’n Shine Bakeries is a nationwide chain that has plants located throughout the U.S Top management at Rise ’n Shine believes that customers in different regions have different tastes It also recognizes that its bakeries face more intense competition in some regions than in others Therefore, Rise ’n Shine's top management gives local managers the freedom to offer different types of breads and desserts, and to decide on a reasonable pricing strategy for its products Rise ’n Shine typifies a decentralized organization

Feedback: A decentralized organization gives decision-making authority to managers at lower

levels of the hierarchy

Answer: True

113. Management at Hottie Potatee, a nationwide potato bar chain, believes that its

customers value a predictable and consistent level of service and quality When customersstop at one of its potato bars anywhere in the U.S., they should know what to expect in terms of menu, price and quality In order to maintain this consistency, Hottie Potatee should adopt a decentralized organization

Feedback: By giving individual managers and employees more flexibility, a decentralized

organization would result in less standardization and uniformity

Answer: False

114. A study at the Slumber Inn Co identified poor employee morale Employee

respondents indicated frustration with their inability to deal directly with customers' concerns and complaints These employees feel that if they were empowered with the authority to make decisions, customer satisfaction would dramatically increase This illustrates one of the disadvantages of decentralized authority

Feedback: This organization is an example of centralized authority with decision-making

authority maintained at the top level of management at the company's headquarters This usually results in less responsiveness to customers, the cause of the poor employee morale

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115. In the Crescent City manufacturing plant of the Granite Works Corp., a foreman supervises workers The foreman reports to the shift supervisor who reports to the head of the production department, who then reports to the assistant plant manager, who reports tothe plant manager The plant manager, in turn, reports to a district manager, who then reports to a product group manager, who reports to an assistant vice president of

operations, who keeps in close touch with an executive vice president The layers of management indicate that Granite Works Corporation is a tall organization

Feedback: A tall organization is characterized by many layers of management.

Answer: True

116. Martina is an experienced manager with excellent communications skills The workers

in her area are highly skilled and capable of doing their work with very little direct

supervision Martina's span of control is likely to be quite broad

Feedback: The less direct supervision required by workers, the broader the span of control.

Answer: True

Bloom’s: Apply

117. Rome Corporation is organized into departments such as finance, production,

marketing, data processing, and accounting Rome has chosen to departmentalize by function

Feedback: Departmentalization by function means to group workers into departments based

on similar skills, expertise, and resource use

Answer: True

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different departments to prevent employees from becoming narrow specialists The best way to accomplish these goals is to departmentalize Topdown's organization by function

Feedback: Two disadvantages of functional departmentalization are that it tends to reduce

communication among departments, and employees often end up becoming narrow

specialists

Answer: False

Bloom’s: Apply

119. Green Landscapes, a company that installs underground sprinkler systems, serves several commercial customers, as well as residential customers As the business expands, Green Landscapes’ management may want to consider departmentalizing by customer group and then by process

Feedback: Companies that serve customers with varying needs may be able to respond

quicker if their employees specialize in one customer group Beyond that, a company like the one in this example that goes through several steps in serving each customer may specialize

by process

Answer: True

120. Jesse started a successful telecommunications company that provided voicemail services to business clients in the Midwest As the business grew, Jesse added functional departments including a marketing department and an accounting department After a few years, he realized that employees who specialized in these areas no longer shared

knowledge with each other in the same way they did when the operation was smaller As one of Jesse's business consultants, you explain that as the company grows taller, it cannotavoid this pitfall, and he should focus on continued functional departmentalization, especially if he supports innovation and learning

Feedback: A disadvantage of functional departmentalization is a lack of communication

between and among departments Employees may identify with their own department's goals,

as opposed to the goals of the company

Answer: False

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121. Jackie works in the finance department at the home office of a large retailer Her main responsibility is to watch department expenditures and find ways to cut costs whenever possible Tim, the marketing director for the same company, shares information with Jackie only when necessary He finds her inflexible, and not understanding of what it takes to roll out a new product line Jackie and Tim typify a disadvantage of

departmentalization

Feedback: A disadvantage of departmentalization is that department members begin to think

like each other in their own department and do not understand the points of view of members

of other departments

Answer: True

Bloom’s: Apply

122. Traditional organizational models such as a line model or a line-and-staff model provide the flexibility demanded in a changing business environment

Answer: False

Learning Objective: 08-04 Contrast the various organizational models

123. In a line organization, there are many specialists who serve as advisors and assistants

to the managers who make decisions

Answer: False

124. Small businesses often use a line organization model

Answer: True

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125. Line organizations follow Fayol's traditional management rules

Answer: True

126. Line managers issue orders, enforce discipline, and adjust the organization as

conditions change

Answer: True

127. In large businesses, a line organization provides firms the ability to respond quickly to

a changing environment

Answer: False

128. Line organizations clearly define the lines of authority and responsibility

Answer: True

129. Line organizations often experience the problem of employees reporting to more than one boss

Answer: False

130. A line organization in a large business often suffers from excessively slow lines of communication

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131. Staff personnel perform functions such as production and sales that contribute directly

to the primary goals of the organization

Answer: False

132. In a line-and-staff organization, staff positions are temporary jobs to train new line managers

Answer: False

133. While staff personnel have the authority to make policy decisions, line personnel have the authority to advise and make suggestions

Answer: False

134. An advantage of a line-and-staff organization is that it provides people that advise and assist line managers as they perform their jobs

Answer: True

135. The matrix organization model brings together experts from different functional units

of the firm to work on specific projects

Answer: True

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136. The team experts in a matrix organization remain part of the traditional line-and-staff structure

Answer: True

137. A matrix organization produces an environment that discourages cooperation and teamwork

Answer: False

138. Team participants in a matrix organization model may report to two managers at one time

Answer: False

139. A disadvantage of the matrix organization is the temporary nature of the teams

Answer: True

140. Matrix organizations give managers flexibility in assigning people to projects

Answer: True

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141. Matrix organization structures provide for more efficient use of organizational resources

Answer: True

142. A recent trend in organization models is the development of cross-functional, managed teams of employees who work together on a long-term basis

self-Answer: True

with suppliers and customers to develop new products and give great service

Answer: True

144. Cross-functional teams serve as advisory committees offering their expertise to line decision makers

Answer: False

145. Cross-functional teams defy the trend toward customer-driven organizations

Answer: False

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146. Cross-functional teams consist of employees from different departments who work together on a long-term basis

Answer: True

147. Cross-functional teams avoid involving groups outside of the firm to ensure their plansare not leaked to their competitors

Answer: False

148. Cross-functional teams work best when the voice of the customer is brought into

organizations

Answer: True

149. Cross-functional teams work well when leadership of the team is shared

Answer: True

150. Including customers and suppliers on cross-functional teams violates the interests of stockholders

Answer: False

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151. By structuring the company with cross-functional teams, there is a greater chance that

a business is more responsive to social trends affecting customer preferences

Feedback: By going beyond company borders and including others on a cross-functional

self-managed team, a firm can learn first-hand from suppliers and customers about market trends that affect its business

Answer: True

152. A matrix team for an aerospace company may consist of a project manager, a finance expert, a marketing specialist, a member of production, and two design engineers

Feedback: Matrix teams consist of individual experts from various functional units of a

company joining together to solve a problem or work on a project These are temporary teamsthat disband when the assignment is completed

Answer: True

153. It is strategically not sensible for a firm to consider asking suppliers and customers to join a cross-functional self-managed team that is testing iterations of future products

Feedback: By going beyond company borders and including others on a cross-functional

self-managed team, a firm can learn first-hand from suppliers and customers about market trends that affect its business

Answer: False

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154. One disadvantage of the matrix style of organization is that it is more difficult to keep development projects on schedule The model slows down the time from design to

production, and then to market

Feedback: Matrix style organization was purposely designed to expedite projects from

conception to market The model eliminates the communication problems that line and line–and-staff models experience when trying to develop a product and get it to market

Answer: False

155. Due to the competitive nature of companies that compete for the same customers, cross-functional teams never consist of individuals from more than one firm

Feedback: Cross-functional teams often include employees who work for firms that have

teamed up together to produce a product or service Sometimes teams are interfirm, meaning

from two or more companies

Answer: False

156. Cross-functional teams that go beyond company boundaries share production

information but seldom market information

Feedback: Cross-functional teams are transparent They share as much information as

necessary to succeed in building a product that is needed by the marketplace These teams go outside of the boundaries of one company Sometimes the team will share information with government employees and/or employees from around the globe

Answer: False

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157. Buzzoff Co is a medium-sized organization, organized with well-defined lines of authority and responsibility Each employee reports to only one boss The managers at Buzzoff complain that they have no expert support staff available to offer legal advice Lately opportunities are slipping through the cracks due to inefficient long lines of

communication These characteristics suggest that Buzzoff employs a matrix

organization

Feedback: A line organization is characterized by well-defined lines of authority and

responsibility and provides one supervisor for each person Line organizations also have few experts and assistants to help line managers, and are frequently plagued by long lines of communication

Answer: False

158. Julie is an attorney who works for Worldwide Food Science, Inc., who provides legal advice and assistance to the firm's managers Julie's job would be classified as a staff position

Feedback: Staff personnel provide advice and assistance to line managers.

Answer: True

Bloom’s: Apply

159. Wizard Manufacturing makes small consumer electronics products like mixers and toasters The industry is relatively stable, having few new advances in product

development Wizard should use a line or line-and-staff organizational structure to ensure efficient operations

Feedback: Both line and line-and-staff organization structures work well in organizations

with a relatively unchanging environment and slow product development, such as firms selling consumer products like toasters and mixers In such firms, clear lines of authority and relatively fixed organization structures are assets that ensure efficient operations

Answer: True

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160. Joel, an employee of the engineering department, was temporarily assigned to work with a team of specialists from other departments to develop a new product Upon

completion of this project, Joel returned to his position in the engineering department This arrangement illustrates the use of a cross-functional team

Feedback: In a cross-functional team, the members work together on a long-term basis They

may work together on more than one project, and over an extended period of time The fact that Joel’s work on the team was temporary and he returned to his old position when the project was completed suggests that the firm is using a matrix organization

Answer: False

Bloom’s: Apply

161. Alleta Publishing Company, Inc., is considering the use of cross-functional teams In order to be most effective, Alleta should include customers as members of the teams

Feedback: Cross-functional teams work best when the ideas of customers are brought into the

organization The best way to do this is to actually include customers on the teams

Answer: True

Bloom’s: Apply

162. Barclay developed two interactive computer games He didn't do it entirely alone Lastyear he started a small company, and hired two programmers and a marketing graduate

He considers himself a cutting-edge kind of guy and wants to position his company the same way He solicits your advice as to how he should structure his organization as he moves forward, and you suggest that he hire a few potential customers to join his team of employees as product testers And, you suggest, maybe he should solicit globally The structure you have described would simulate a line-and-staff organization

Feedback: Including potential customers on a work team simulates a cross-functional

self-managed team

Answer: False

Bloom's: Analyze

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163. Julio is the owner of Celebration, Inc., a small party supply company The company provides tents, tables, chairs, and related paraphernalia for wedding, Bar Mitzvah, Bat Mitzvah, graduation, birthday, and other celebratory events As sales have increased, the organization has hired more personnel and departmentalized to more efficiently handle purchasing, sales, service, and accounting Everyone is still responsible for achieving company goals Upon seeing Celebration's organization chart, you agree it uses a line organization model

Feedback: Many small businesses begin as line organizations In a line organization model

everyone in the organization is responsible for achieving the company goals

Answer: True

Bloom's: Analyze

164. Networking uses communication technology to link organizations, allowing them to work together on common objectives

Answer: True

Learning Objective: 08-05 Identify the benefits of interfirm cooperation and coordination

165. The Internet makes real-time availability of data possible

Answer: True

Learning Objective: 08-05 Identify the benefits of interfirm cooperation and coordination

166. Transparency describes the relationship between a firm and its stockholders

Answer: False

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