1.

As a class project, Senora is working with other classmates to create a company that would market
NASCAR memorabilia. She is instructed to use the traditional approach to create the organization’s
structure. What should Senora do?
a. create an organizational structure with vertical and horizontal configurations
2. What is the term for the collection of activities that transforms inputs into outputs that customers value?
b. organizational process

3. What is the definition of the term organizational process?

a. the activities whereby inputs are transformed into outputs that customers value

4. Which of the following emphasizes jobs and their authority relationships?

a. organizational structure
5. What type of departmentalization organizes work and workers into distinct units responsible for certain
business roles or areas of expertise?
a. functional
6. Kimberly-Clark is subdivided into organizational units called Kimberly-Clark Health Care, which sells
products to hospitals; Kimberly-Clark Professional, which sells to businesses; and Kimberly-Clark
Consumer, which sells the company’s products to consumers. Which of the following does Kimberly-Clark
use?

a. customer departmentalization

7. As a consequence of the Industrial Revolution and its emphasis on specialization, institutions providing
higher education developed strict sections of the organization that contained specialized functions. This
organizational structure was perceived as a way to enhance the accumulation and dissemination of
knowledge. Which organizational structure is this?
b. departmentalization
8. What is a general term that refers to subdividing work and workers into separate organizational units that
are responsible for completing particular tasks?
b. Departmentalization

9. Which statement presents a characteristic of functional departmentalization?

a.Functional departmentalization allows work to be done by highly qualified
specialists.
10. Which statement presents a characteristic of functional departmentalization?
a. Functional departmentalization lowers costs by reducing duplication.

11. Which of the following is characteristic of functional departmentalization?

a. Itmakes communication and coordination less problematic for managers.
12. Hallmark has four departments: (1) Flowers and Gifts, (2) Cards and E-cards, (3) Hallmark Collectibles, and
(4) Photo Albums and Scrapbooks. Which type of departmentalization does Hallmark use?
 b. Product

13. Pierre is the president of his company. He is frustrated that it is difficult to get his managers together.
Decision making is slow, and it’s hard to get a consensus on what new products the company should
introduce. What type of departmentalization does Pierre’s company have?
d. functional
14. A manufacturer of acrylic, latex, and nitrile gloves sells to medical laboratories; to factories where
employees handle chemicals; to companies that manufacture micro-tech equipment; and to cleaning
services. The manufacturer is organized to better satisfy the needs of each of its four target markets. Which
type of departmentalization does the manufacturer use?
b. customer
15. Large accounting agencies typically have separate departments that deal with households, businesses, and
governments. Which type of departmentalization do many of these accounting agencies use to better serve
the needs of their clients?
a. customer
16. Companies such as Sprint and American Express focus on both business clients and consumer clients.
Which type of departmentalization have they adopted?
b. customer
17. What is the primary disadvantage of customer departmentalization?
a. duplication of job functions
18. Procter & Gamble has divisions for personal grooming and beauty, house and home, health and wellness,
baby and family, and pet nutrition and care. Which type of departmentalization does the company use?
b. product
19. A general manager of a manufacturing firm wishes to increase efficiency by reducing duplication
throughout the organization. Which form of departmentalization should he adopt?
a. functional
20. Marianne is working on a special project. She reports to the project manager as well as her finance manager
where her full-time work resides. What organizational structure is Marianne working within?
b. matrix
21. What is the primary disadvantage of geographic departmentalization?
a. the duplication of resources
22. Commerce Insurance Services has five divisions: personal, core commercial, Main Street business, major
commercial, and benefits. The company is also departmentalized along product lines. What type of
departmentalization does Commerce Insurance Services use?
b. matrix

23. Which of the following is an advantage of matrix departmentalization?

b.With matrix departmentalization, there tends to be more cross-functional

interaction among employees than in other types of departmentalization.
Which type of departmentalization has the primary advantage of allowing companies to
efficiently manage large, complex tasks by minimizing duplication?
a. matrix
24. Aleeza is managing the financial area of a special project to launch the company in Asia. Aleeza and the
transportation manager disagree on how product should be moved between borders. The two are meeting
with the senior project manager to resolve this issue. What type of matrix is Aleeza working within?

b. the complex matrix

25. Rose is managing the marketing area of a project to introduce a new line of products. Rose and the manager
responsible for sales of this new product cannot agree on the launch date. They are meeting today to work
out a date that they can both accept. What type of matrix is Rose working within?
a. simple matrix
26. John feels like he is being pulled in all directions. The project manager he reports to wants him in an all-day
meeting on Tuesday. The sales manager for his regular functions wants him to meet with an important client
on Tuesday. John is not sure what to do. What type of departmentalization is John working within?
a. matrix
27. Of all types of departmentalization, which one requires the highest level of management skill for successful
implementation?
a. matrix
28. Which type of departmentalization often evolves from a simple form to a more complex form due to
problems associated with conflicts over schedules, budgets, and available resources (including employees)?
b. matrix
29. Honeywell Inc. reorganized its European operations along customer lines to prepare for a unified European
Union. In doing so, it abandoned matrix departmentalization. What was the best reason for Honeywell to
have engaged in such restructuring?
a. to end conflict between product managers in different parts of its matrix

30. Joseph is a supervisor of accounts receivable. He tells a staff member to call a particular customer to inform
them they are overdue on a payment. The staff member does not like making these calls but does what he is
told. In terms of chain of command, what type of authority does Joseph have?
b. line
31. Which of the following is characteristic of organizational authority?
a. chain of command
32. Robert Strickland works in the legal department at a large consumer products manufacturer. His job is to
craft warnings on package labels. Which of the following defines Strickland’s work?
b. staff function
33. Shelley is part of a special team overseeing the property development of the company’s new location. She
reports to Brian, the manager of the project, and she continues to report to Reginald, the manager of the area
where she works full time. What principle does this matrix organization violate?
b. unity of command
34. Which of the following is a key assumption underlying the chain of command, which refers to the idea that
workers should report to just one supervisor?
 b. unity of command

35. Delmar works in the sales department of a toy manufacturer. Delmar has several very large retail customers
that he spends the majority of time making sure they are well taken care of. What type of function would
Delmar’s activities be associated with?
b. line
36. Jennifer Lee works in the public relations department of a large pharmaceutical company. Her job is to write
speeches for the company’s top managers, to issue press and video releases, to host plant tours, and to be
involved in community affairs. Which of the following does Lee have?
b. staff authority
37. An international distribution company has a shipping division, a warehouse division, and a computer
hardware and software distribution centre, as well as a marketing research department, a human resources
department, and an accounting department. A salesperson who works in the shipping division is told by the
accounting department that he must turn in a weekly expense account; at the same time, his supervisor in the
shipping division wants expense accounts submitted monthly. Preparing the expense account form takes at
least two hours, and the salesperson wants to devote as much time as possible to sales. Which of the
following is the salesperson likely experiencing a problem with?
b. chain of command
38. Which of the following statements best describes the chain of command?
a. The chain of command is the vertical line of authority that clarifies who
reports to whom.
39. Which of the following individuals most likely performs a staff function?
a. a member of the office cleaning crew

40. Which term most closely refers to assigning direct authority and responsibility to a subordinate to fulfill
tasks for which the manager is normally responsible?
b. delegation of authority
41. When managers delegate work, three transfers occur. Two of the transfers are responsibility and authority.
What is the third?
b. accountability
42. The marketing manager of a company that manufactures church furniture has been given the job of
increasing corporate profits by 5 percent during the upcoming year. The manager has decided to give his
assistant the full responsibility and authority for developing a mailing campaign to target churches on the
Mississippi Gulf Coast that were damaged or destroyed by Hurricane Katrina. The manager is making this
individual accountable for the campaign’s success. What has the marketing manager done?
b. delegated the task
43. Robin works in customer service of a department store. She handles returned products. For most products, if
they are returned in original packaging, are undamaged, and the customer has the bill, Robin will accept the
return for a full refund. However, for camping gear, the policy is no returns and no exceptions. What term
describes how Robin handles returned products
b. Standardization
44. Large hospitals purchase more than 15,000 individual products on a routine basis. One challenge for a
hospital’s purchasing department is that the various hospital departments use different product descriptions
and classifications for the same item. One purchasing manager plans to institute a hospital-wide purchasing
policy that gives a specific code to each item. In doing so, what is the purchasing manager engaging in?
b. standardization
45. The Toronto Blue Jays are owned by media conglomerate Rogers Communications. The team’s president
and general manager report to Rogers’s senior leadership team, but rarely have to seek approval before
making trades or signing free agents. Which term best describes this situation?
b. decentralization
46. Boxing Canada has moved its head office and training facilities to Montreal from various locations across
the country. Which of the following best represents the principle Boxing Canada is relying upon?
a. centralization of authority
47. Which of the following is characteristic of decentralization?
a. It leads to faster decision making and more satisfied customers and employees.
48. Which of the following actions is appropriate where standardization is important?
a. centralize authority
49. Which of the following is characterized by simple, easy-to-learn steps, little variety, and much repetition?
b. job specialization
50. Which of the following can job specialization result in?
a. employee boredom
51. Which of the following determines the number, kind, and variety of tasks that individual workers perform in
their roles?
a. job design
52. Josephine notices that one of her better workers seems less enthusiastic about her work. Josephine adds
different tasks to the job to hopefully reduce the boredom the worker is feeling. What did Josephine engage
in to alter the worker’s job?
b. job enlargement
53. The Ryerson University Library is organized in a hierarchy with six unit heads reporting to a chief librarian.
The units are archives, audiovisual/interlibrary loans, library access services, reference and information,
systems, and technical services. Within these units are 15 librarians and 47 full-time library staff. One tool
used in the organizational development of the library was to systematically move employees from one job to
another to give them an opportunity to learn and use different skills. Which of the following was the
Ryerson University Library using?
a. job rotation
54. In one job design approach, the number of different tasks that a worker performs within one job is
increased, and workers are given the authority and control to make meaningful decisions about their work.
Which of the following is associated with this approach?
b. job enlargement and job enrichment

55. An organization is characterized by broadly defined jobs and responsibilities; loosely defined, frequently
changing roles; decentralized authority; and horizontal communication based on task knowledge. Which of
the following best describes its nature?
b. organic
56. The CEO of an electronics company stated that an organizational chart was inapplicable in his organization
and “a dangerous method of thinking.” According to this CEO, the first requirement of management is to
make the fullest use of the capacities of its members; any individual’s job should be as little defined as
possible, so that it can “shape itself” to the person’s special abilities and initiative. Which type of
organization does this company more than likely have?
b. organic
57. In certain organizations, the normal procedure for dealing with any matter lying outside the boundaries of
one individual’s functional responsibility is handled one of two ways. One is to refer it to the point in the
system where such responsibility is known to reside. Failing that, the matter is brought before one’s
superior. What type of organization is described?
b. mechanistic
58. Admitting a need for better communication, higher management tethers subordinates to their jobs and
appoints newly hired employees who specialize in establishing liaison relationships. Which type of
organization does this scenario describe?
b. mechanistic
59. Nigel works for a high-tech company that has a dynamic working environment. Nigel’s job title is technical
support but he really works in all areas of operations. He rarely knows what he will be doing from day to
day and enjoys the ability to make decisions to solve problems as they arise. What type of organization does
Nigel work in?
a. organic
60. An organization is characterized by specialized jobs and responsibilities; precisely defined, unchanging
roles; and a rigid chain of command based on centralized authority and vertical communication. Which of
the following describes the organization?
b. mechanistic
61. Deirdre has a well-defined job. Deirdre knows exactly what each day will be like. If she ever needs help or
runs into a problem she goes to Monica, her supervisor, for guidance. What type of organization does
Deirdre work in?
a. mechanistic
62. What is the term for a fundamental rethinking and radical redesign of business processes to achieve huge
improvements in critical performance measures, such as cost, quality, service, and speed?
b. re-engineering
63. In recent years, the Air Force Weather Agency (AFWA) has undergone a radical change in how it
determines and shares local weather conditions with pilots. Before, the local-base weather station was
responsible for warnings, and the quality of the information varied. Now AFWA provides the same high
standard of weather information to all pilots. What process did the AFWA go through?
b. re-engineering
64. LexisNexis realized that its ability to serve new Web-based customers was severely strained. Thousands of
small and midsize law firms represented a huge business opportunity for the company’s legal-information
services, but they often had to wait 48 hours to have their Web accounts activated after signing up. For
smaller firms seeking to buy documents in small quantities, often to apply to pending cases, such a delay
was intolerable. Clearly, LexisNexis needed to revamp its customer sign-up and order-fulfillment processes,
which were designed for large law firms and the ordering of hardcover legal tomes. Which of the following
would LexisNexis most likely use to radically change its business practices?
 b. re-engineering
65. Workers perceive their work to have meaning and perceive themselves to be competent, having an impact,
and capable of self-determination. What is the term for this feeling of intrinsic motivation?
b. empowerment

66. What are the three types of task interdependence?

a. reciprocal, pooled, and sequential
67. Zara clothing stores has developed a system that can order new fashions and deliver them to the store in
only three weeks. The system begins inside the store via Internet communications between store manager
and headquarters. As soon as a manager notices that a certain item is selling especially well, the manager
can send a new order out from the store and give suggestions for new colours and designs. Next, designers
and managers receive the information and match it with suggestions from other Zara store managers.
Designers then draw up the new styles and send the patterns to Zara factories in Spain, where they are made.
The clothes reach Zara’s stores within 48 hours. What is Zara using to pass information to the next person in
the line of development?
b. sequential interdependence
68. A military expert described the way military forces were organized for Operation Desert Storm as “pooled
interdependence.” Several branches of the military took part in the operation. What does this information
suggest about the workings of the military branches?
a. The branches independently contributed to the success of the campaign.
69. During any disaster, leaders need to give their employees a sense that everyone is participating in the relief
effort. Gap gave its employees the authority to transfer their paid time off to some 1,300 employees affected
by Hurricane Katrina. What did Gap use to allow its employees to gain a feeling of intrinsic motivation?
b. empowerment
70. Why do about 70 percent of all re-engineering projects fail?
a. because of how the process affects people in the workplace
71. Novo Nordisk is a European manufacturer of pharmaceuticals. Rikke Nedergaard Bischoff, a
clinicaldevelopment scientist, contends that Novo upholds the standards expected of public institutions
without the stifling bureaucracy. She says, “There’s a great deal of empowerment at Novo Nordisk.” What
does Novo Nordisk provide Nedergaard Bischoff with?
b. feelings of intrinsic motivation
72. In essence, how does re-engineering change organizations?
a. by increasing reciprocal interdependence
73. Which of the following is an approach to managing inter-organizational processes?
b. modular organizations
74. Which type of organization outsources all remaining business activities to outside companies, suppliers,
specialists, or consultants except for the core business activities that it can perform better, faster, and
cheaper than others?
a. a modular organization
75. Anthony feels that he should focus on what he does well, which is coaching executives to be more
productive. Rather than trying to do all the marketing, accounting, and other administrative functions
himself, he hires professionals do these for him. What type of organization did Anthony convert his
 business into?
a. modular
76. Which type of organization is part of a network in which many companies share skills, costs, capabilities,
markets, and customers with one another?
b. virtual
77. A PROS cooperative is a recognized association of park, recreation, open space, and related entities united
voluntarily to achieve through collaboration what can’t be achieved through individual and independent
action. PROS cooperatives conserve the diversity of valued resources and recreation opportunities to benefit
individuals, communities, the economy, and the environment. Which organizational type does a PROS
cooperative exemplify?
b. virtual
78. In the automobile industry, three car manufacturers and a variety of suppliers and distributors have formed a
network to create economies in production through outsourcing. The goal is to cut as much as $3,000 from
the costs of producing one car. Which type of organization is described?
b. virtual

79. Which type of organization is always changing in composition?

a. virtual

81. Refer to Narrative 8-1. One cause of the precipitous drop in the value of Yahoo’s stock was the company’s
inability to subdivide work and workers into separate organizational units responsible for completing
particular tasks. That caused Yahoo trouble. For example, the company had no sales unit to cultivate and
call on advertising customers. Which of the following had Yahoo decided NOT to engage in?
b. departmentalization
82. Refer to Narrative 8-1. After restructuring, Yahoo’s four new departments were consumer services,
marketing services, business and enterprise services, and premium services. Which type of organizational
structure did Yahoo adopt during its restructuring?
a. product
83. Refer to Narrative 8-1. Which of the following is an advantage of Yahoo’s organizational structure?
a. the ease with which top managers can specialize within one area

84. Refer to Narrative 8-1. One cause of the precipitous drop in the value of Yahoo’s stock was that too many
unrelated decisions were being made by unrelated people in the company without any regard for what was
best for the entire company. What would be one way to solve this problem?
b. centralization of authority
85. Refer to Narrative 8-1. Before restructuring, Yahoo was described as having an overly creative,
freewheeling culture, a highly decentralized decision-making structure in which managers did what was
best for their units rather than the entire company, and exhibited resistance to making a profit. Which kind
of organization did the company have?
a. organic
86. Organizational structure is the vertical and horizontal configuration of departments, authority, and jobs
within a company.
ANSWER: True
87. While organizational structure emphasizes the activities through which work gets done in the organization,
organizational process emphasizes jobs and their authority relationships. ANSWER: False
88. The process view of an organization is typically very similar to the structural, hierarchical view of the
organization. ANSWER: False
89. Functional departmentalization organizes work and workers into separate units responsible for particular
business functions or areas of expertise.
ANSWER: True

90. Departmentalization is a method of organizing work and workers into separate units responsible for
particular business functions or areas of expertise.
ANSWER: False

91. Cross-departmental coordination tends to be very easy in organizations with functional

departmentalization. a. True
ANSWER: False

92. Product departmentalization organizes work and workers into separate units responsible for particular
kinds of customers.
ANSWER: False

93. The two disadvantages associated with product departmentalization are costly duplication and difficulties
with cross-departmental coordination. a. True
ANSWER: True

94. Under product departmentalization, it is easier for top managers to assess work-unit performance
ANSWER: True

95. Matrix departmentalization is a hybrid structure in which two or more forms of departmentalization are
used together, such as the product and functional forms.
ANSWER: True
96. In matrix departmentalization, as in other forms of departmentalization, most employees report to a single
boss.
ANSWER: False

97. The coordination of departmental activities tends to be more difficult with the geographic approach to
departmentalization than with the other approaches.
ANSWER: True
98. The most common matrix combines customer and functional forms of departmentalization.
ANSWER: False

99. One reason that matrix organizations are difficult to manage is that the organizational structure violates the
principle of delegation of authority.
ANSWER: False
100. In a decentralized organization, workers closest to problems are authorized to make the decisions necessary
to solve the problems on their own.
ANSWER: True

101. The term task description refers to the number, kind, and variety of tasks that individual workers perform
in doing their jobs.
ANSWER: False

102. Specialized jobs are characterized by simple, easy-to-learn steps, low variety, and much repetition.
ANSWER: True
103. In spite of the jobs’ disadvantages, companies continue to create and use specialized jobs because they are
economical. ANSWER: True
104. Specialized jobs are generally inefficient.
ANSWER: False

105. Job enlargement and job enrichment mean essentially the same thing.
ANSWER: False
106. An organic organization is an organization characterized by broadly defined jobs and responsibility,
loosely defined, frequently changing roles, decentralized authority, and horizontal communication based
on task knowledge.
ANSWER: True
107. All organizations can clearly be categorized as either completely mechanistic or completely organic.
ANSWER: False
108. In reciprocal interdependence, work must be performed in succession because one group or job’s outputs
become the inputs for the next group or job.
ANSWER: False
109. competence, impact, and self-determination produce empowered employees who take active rather than
passive roles in their work.
ANSWER: True

110. A virtual organization is an organization that outsources noncore business activities to outside companies,
suppliers, specialists, or consultants.
ANSWER: False

111. One advantage of virtual organization is that it allows member companies to share costs.
ANSWER: True
112. While the inter-organizational process revolves around a central company in modular organizations, a
virtual organization is part of a network in which many companies share skills, costs, capabilities, markets,
and customers with one another.
ANSWER: True
113. The span of control is the vertical line of authority that clarifies who reports to whom throughout the
organization.
ANSWER: False
114. People higher in the chain of command directly exercise their right to give commands, take action, and
make decisions concerning activities occurring anywhere below them in the chain.
ANSWER: False

115. The chain of command has a core principle that is violated by matrix organizations.
ANSWER: True
116. A manager in human resources with a team of human resources advisors has both line and staff authority.
ANSWER: True
117. A manager in human resources with a team of human resources advisors operates within a line function.
ANSWER: False
118. Effective delegation first transfers authority to a staff member.
ANSWER: False

119. Effective delegation transfers accountability to a staff member.

ANSWER: True

120. Organizations have high centralization of authority when a customer service representative must contact
their manager to solve a problem. ANSWER: True
121. Organizations should always seek to decentralize their operations. ANSWER: True
122. The importance of standardization is a common reason to decentralize authority. ANSWER: False