CHAPTER 8ORGANIZATION STRUCTURE, CULTURE, AND CHANGE

MULTIPLE CHOICE
1. The clearest example of a staff department in a manufacturing organization would be
a. sales.
b. operations.
c. food services.
d. quality assurance.
ANS: C
PTS: 1
DIF: D
NAT: AACSB: Analytic, Operations Management

REF: p. 267

2. One of the reasons that bureaucracies have endured is that they

a. provide ample opportunity for risk taking and thrill seeking.
b. help satisfy people's need for order and security.
c. were designed with the age of the Internet in mind.
d. are almost immune to downsizing.
ANS: B
PTS: 1
DIF: M
NAT: AACSB: Analytic, Individual Dynamics

REF: p. 267

3. A notable disadvantage of a bureaucracy is that it often leads to

a. unclear managerial responsibility.
b. rigidity in dealing with people.
c. an insufficient amount of rules and regulations.
d. wide of span of control.
ANS: B
PTS: 1
DIF: E
NAT: AACSB: Analytic, Operations Management

REF: p. 268

4. The organization structure best suited to gaining the advantage of specialization is ____
departmentalization.
a. functional
b. geographic
c. product
d. matrix
ANS: A
PTS: 1
DIF: M
NAT: AACSB: Analytic, Operations Management

REF: p. 270

5. A disadvantage of product-service departmentalization is that

a. customer needs may be neglected.
b. field units lack authority.
c. it often leads to duplication of effort.
d. employees rarely identify with the field units.
ANS: C
PTS: 1
DIF: M
NAT: AACSB: Analytic, Creation of Value

REF: p. 274

6. A key advantage of geographic departmentalization is that it allows for

a. decision making at a local level
b. consideration of the local culture.
c. a & b

d. a one size fits all strategy

ANS: C
PTS: 1
NAT: AACSB: Analytic, Strategy

DIF: D

REF: p. 272

7. A matrix organization can be described as a(n) ____ structure superimposed on a ____ structure.
a. project; functional
b. product; territorial
c. process; product
d. informal; formal
ANS: A
PTS: 1
NAT: AACSB: Analytic, Strategy

DIF: E

REF: p. 275

8. A wide span of control is advised when

a. there is considerable flux in the work setting.
b. group members perform similar tasks.
c. group members are physically dispersed.
d. group members and the manager are highly capable.
ANS: D
PTS: 1
DIF: M
NAT: AACSB: Analytic, Operations Management

REF: p. 277

9. Downsizing is the most likely to be successful when

a. high-value activity is eliminated first.
b. information about the pending layoff is held back from employees.
c. it is part of the business strategy to improve the company.
d. it is a stopgap measure to save the company money.
ANS: C
PTS: 1
NAT: AACSB: Analytic, Strategy

DIF: D

REF: p. 278

10. Companies such as Dell purchase complete designs for some digital devices from Asian developers.
This is called
a. division of labor
b. outsourcing
c. implementing
d. scenario planning
ANS: B
PTS: 1
NAT: AACSB: Analytic, Strategy

DIF: M

REF: p. 278

11. You know that you are a homesourcing agent when you
a. perform call center duties out of your home.
b. sell products from door to door.
c. organize parties in your home to sell products.
d. work in a large call center responding to problems with consumer products.
ANS: A
PTS: 1
DIF: M
NAT: AACSB: Reflective Thinking, Operations Management
12. An example of a horizontal organization structure would be a
a. department producing an engine.
b. team assembling components for company machines.
c. purchasing department.
d. team responsible for filling orders.

REF: p. 279

ANS: D
PTS: 1
NAT: AACSB: Analytic, Strategy

DIF: M

REF: p. 280

13. The radical redesign of work to achieve substantial improvements in performance is called:
a. reengineering
b. job design
c. downsizing
d. resistance to change
ANS: A
PTS: 1
NAT: AACSB: Analytic, Strategy

DIF: E

REF: p. 281

14. To become part of the informal organization structure, you should

a. study the company organization chart carefully.
b. become a temporary worker.
c. send your rsum to key managers.
d. establish a network of contacts to help you accomplish work.
ANS: D
PTS: 1
DIF: D
NAT: AACSB: Reflective Thinking, Strategy

REF: p. 281

15. Flexible organization structures, such as project and matrix structures, are the most likely to be found
in
a. high-technology firms.
b. lumber mills.
c. pasta factories.
d. poultry processing plants.
ANS: A
PTS: 1
NAT: AACSB: Technology, Strategy

DIF: E

REF: p. 285

16. A suggestion for effective delegation is to

a. delegate part of a task.
b. give as much instruction as needed.
c. closely monitor the details.
d. assign the task to the highest-ranking company official.
ANS: B
PTS: 1
NAT: AACSB: Analytic, Strategy

DIF: E

REF: p. 287

17. Long John Silvers central headquarters exercises tight control over such matters as menu selection;
however, franchises make human resource decisions such as hiring. This is an example of
a. centralization
b. decentralization
c. specialization
d. centralization and decentralization
ANS: D
PTS: 1
DIF: D
NAT: AACSB: Analytic, Operations Management
18. The foundation of an organizational culture is the organization's
a. relative diversity.
b. values.
c. resource allocation and rewards.
d. degree of change.

REF: p. 288

ANS: B
PTS: 1
DIF: E
NAT: AACSB: Analytic, Creation of Value

REF: p. 289

19. The dimension or organization culture called a sense of ownership, typically comes about when
a. the company helps employees purchase houses.
b. employees develop pride in the company.
c. the company helps employees get out of debt.
d. employees purchase stock in the company.
ANS: D
PTS: 1
DIF: E
NAT: AACSB: Analytic, Individual Dynamics

REF: p. 291

20. The primary way that employees learn the organization culture is through
a. the process of socialization.
b. studying the company Website.
c. studying the company intranet.
d. making mistakes and then being corrected.
ANS: A
PTS: 1
DIF: E
NAT: AACSB: Analytic, Group Dynamics

REF: p. 291

21. The right organizational culture can enhance

a. productivity, quality, and morale.
b. person-organization fit.
c. competitive advantage.
d. all of the choices
ANS: D
PTS: 1
DIF: D
NAT: AACSB: Analytic, Creation of Value

REF: p. 293

22. CEO Justin wants to sustain the company's culture. One of the recommended actions he can take is to
a. suggest that employees decide on their own culture.
b. bring outsiders into the company whose values clash with the company's culture.
c. include a statement of the company's desired culture in the annual report.
d. serve as a role model for the desired attitudes and behaviors.
ANS: D
PTS: 1
DIF: M
NAT: AACSB: Analytic, Leadership Principles

REF: p. 294

23. A recommended technique for gaining support for change is to

a. discuss and negotiate sensitive issues.
b. figure out what to do as one goes along.
c. discourage worker participation in the changes.
d. avoid discussion about financial consequences.
ANS: A
PTS: 1
NAT: AACSB: Analytic, Strategy

DIF: M

REF: p. 298

24. An important emphasis of a Six Sigma program is to

a. prevent problems.
b. punish employees who perform sloppy work.
c. minimize the behavioral aspects of achieving high quality.
d. base quality standards on individual differences.
ANS: A

PTS: 1

DIF: E

REF: p. 300

NAT: AACSB: Analytic, Operations Management

25. In the Model for Change, ______________involves reducing or eliminating resistance to change.
a. Refreezing
b. Changing
c. Thawing
d. Unfreezing .
ANS: D
PTS: 1
NAT: AACSB: Analytic, Strategy

DIF: M

REF: p. 296

TRUE/FALSE
1. A bureaucracy is characterized by a hierarchy of authority.
ANS: T
PTS: 1
NAT: AACSB: Analytic, Strategy

DIF: E

REF: p. 266

2. An analysis suggested that many organizations have suffered because of abandoning the bureaucratic
structure, such as eliminating policies, rules, and regulations.
ANS: T
PTS: 1
NAT: AACSB: Analytic, Strategy

DIF: D

REF: p. 268

3. A functional organization is the traditional way of arranging job activities in the workplace.
ANS: T
PTS: 1
DIF: M
NAT: AACSB: Analytic, Operations Management

REF: p. 270

4. In a smooth-running organization with open communication, the various product or service units
cooperate with each other for mutual benefit.
ANS: T
PTS: 1
DIF: D
NAT: AACSB: Analytic, Operations Management

REF: p. 274

5. A problem with geographical departmentalization is that it leads to too much centralization of decision
making.
ANS: F
PTS: 1
DIF: M
NAT: AACSB: Analytic, Operations Management

REF: pp. 271-272

6. In a matrix organization, the project managers have line authority over the people assigned to their
projects.
ANS: F
PTS: 1
DIF: M
NAT: AACSB: Analytic, Operations Management

REF: p. 275

7. The wider a manager's span of control, the fewer workers that report directly to him or her.
ANS: F
PTS: 1
NAT: AACSB: Analytic, Strategy

DIF: M

REF: p. 277

8. A major justification for outsourcing is that a company is likely to profit when it focuses its effort on
activities it performs best, while noncore activities are performed by outside experts.
ANS: T
PTS: 1
NAT: AACSB: Analytic, Strategy

DIF: M

REF: p. 278

9. In a horizontal structure, the members of the group focus on a specialized task such as accounting or
purchasing.
ANS: F
PTS: 1
DIF: D
NAT: AACSB: Analytic, Operations Management

REF: p. 280

10. Reengineering results in a horizontal layout of work.

ANS: T
PTS: 1
NAT: AACSB: Analytic, Strategy

DIF: M

REF: p. 281

11. Informal structures in organizations are based to a large extent on the networks of contacts people use
to get work accomplished.
ANS: T
PTS: 1
DIF: M
NAT: AACSB: Communication, Group Dynamics

REF: p. 281

12. Advances in information technology make it possible for workers throughout an organization to solve
problems without being restricted by an organization chart.
ANS: T
PTS: 1
DIF: D
NAT: AACSB: Technology, Information Technology

REF: p. 285

13. Social network analysis refers to the mapping and measuring of relationships and links between and
among people, groups, and organizations.
ANS: T
PTS: 1
DIF: E
NAT: AACSB: Communication, Group Dynamics

REF: p. 282

14. Delegation can be used to make empowerment possible.

ANS: T
PTS: 1
NAT: AACSB: Analytic, Strategy

DIF: M

REF: p. 286

15. When a business firm faces an uncertain and unstable environment, it needs a highly flexible structure.
ANS: T
PTS: 1
DIF: D
NAT: AACSB: Reflective Thinking, Environmental Influence

REF: p. 286

16. Centralization is the extent to which authority is retained at the top of the organization.
ANS: T
PTS: 1
NAT: AACSB: Analytic, Strategy

DIF: E

REF: p. 288

17. A perspective on national culture is that the introduction of values from another society into a retail
business can be a competitive advantage.
ANS: T

PTS: 1

DIF: D

REF: p. 289

NAT: AACSB: Diversity, Individual Dynamics

18. One of the major forces influencing an organization culture is the industry in which it operates.
ANS: T
PTS: 1
DIF: M
NAT: AACSB: Diversity, Environmental Influence

REF: p. 289

19. A subculture is a pocket in which the organizational culture differs from the dominant culture and from
other pockets of subculture.
ANS: T
PTS: 1
DIF: E
NAT: AACSB: Diversity, Group Dynamics

REF: p. 290

20. An effective way for corporate leaders to change the organizational culture is to engage in behavior
they would like others to imitate.
ANS: T
PTS: 1
DIF: M
NAT: AACSB: Reflective Thinking, Leadership Principles

REF: p. 292

21. A reliable predictor of success in merging two or more firms is the compatibility of their respective
cultures.
ANS: T
PTS: 1
DIF: M
NAT: AACSB: Analytic, Environmental Influence

REF: p. 294

22. The unfreezing phase of the change model involves getting workers to learn new habits.
ANS: F
PTS: 1
DIF: M
NAT: AACSB: Analytic, Operations Management

REF: p. 296

23. Six Sigma emphasizes statistical analysis and measurement to help achieve high quality.
ANS: T
PTS: 1
NAT: AACSB: Analytic, Strategy

DIF: M

REF: p. 300

24. The presentation of compelling reasons for change will often create a sense of urgency.
ANS: T
PTS: 1
NAT: AACSB: Analytic, Strategy

DIF: M

REF: p. 298

25. People resist change because they fear an unfavorable outcome, such as less money or personal
inconvenience.
ANS: T
PTS: 1
DIF: M
NAT: AACSB: Reflective Thinking, Individual Dynamics

REF: p. 297

ESSAY
1. Identify and describe the most common forms of departmentalization. Give company examples where
you can.
ANS:

Four forms of departmentalization include: functional, geographic, productservice, and customer.

Functional departmentalization defines departments by the function each one performs, such as
accounting. Geographic departmentalization is an arrangement of departments according to the
geographic area served, such as the southwestern region. Productservice departmentalization is the
arrangement of departments according to the products or services they provide, such as the shoe
department. Customer departmentalization divides departments according to the type of customer. such
as a governmental agency.
PTS: 1
DIF: M
REF: pp. 273-274
NAT: AACSB: Analytic, Operations Management
2. First describe, then draw, a matrix organization structure.
ANS:
A matrix organization is a project structure superimposed on a functional structure. Functional
managers exert functional authority over specialists. For example, the quality manager meets with the
specialists assigned to the projects to discuss their professional activities. The project managers hold
line authority over the people assigned to their projects. There is an assumed balance of power
between the two bosses.
PTS: 1

DIF: D

REF: p. 275

NAT: AACSB: Analytic, Strategy

3. The appointment of a new chief executive at Procter & Gamble sparked broad management changes.
He planned to reduce the levels of management between entry-level positions and the chief executive.
The CEO planned to create a simpler, flatter and more agile organization, he said. This is a priority
because simplification reduces cost, improves productivity, and enhances employee satisfaction.
1. Is organization structure related productivity and job satisfaction? Explain
2. What resistance to change might the CEO encounter?
ANS:
1. The story about the new CEO illustrates how organization structure is related to productivity,
satisfaction, and even culture. A flatter structure gives employees more decision-making
which in turn makes them more satisfied and more productive at work.
2. He might face resistance to change on the part of the employees out of fear of an
unfavorable outcome, such as less money. People resist change because they dont want to
break well-established habits. Change may be unwelcome because it upsets the balance of an
activity. Underlying all forms of resistance to change are emotions and feelings. Personality
factors also contribute to resistance to change.
PTS: 1
DIF: D
REF: pp. 276-277|p. 297
NAT: AACSB: Analytic, Environmental Influence
4. What can a CEO do to bring about change in his or her organization?
ANS:
A CEO can use the eight techniques for gaining support for change: . Allow for discussion and
negotiation; Allow for participation; Point out the compelling reasons for change, including the
financial benefits; Establish a sense of urgency; Use a visual people can relate to; Avoid change
overload; Allow for first-hand observation of successful change; Get the best people behind the
program.

PTS: 1

DIF: D

REF: pp. 298-299

NAT: AACSB: Analytic, Strategy