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While most organizations have a formal organization structure, only poorly managed firms also have an informal organization.

A) True
B) False

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Which of the following is considered to be a disadvantage of functional departmentalization?


A) There may be a lack of communication among the different departments.
B) Employees must develop skills in depth.
C) The company must achieve economies of scale.
D) Top management has to direct and control department activities.

E) None of the above
F) A) and B)

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Centralized authority provides for the delegation of authority to employees who are then better able to respond to customers' needs.

A) True
B) False

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Which of the following factors help determine a manager's span of control?


A) the number of global competitors
B) the level of standardization of the work to be done
C) method of accounting for production
D) form of business ownership

E) B) and D)
F) None of the above

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The traditional technique used to departmentalize an organization is by


A) function.
B) customer group.
C) geographic area.
D) production process.

E) None of the above
F) C) and D)

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A bureaucracy is designed to be customer focused.

A) True
B) False

Correct Answer

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As a new employee in a bureaucratic organization, Madison can expect a great deal of independence and authority.

A) True
B) False

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Departmentalization by function allows employees opportunity to further develop their skills.

A) True
B) False

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Employee complaints that there are too many layers of management and too many rules and regulations suggest that Mucho Dinero is a(n)


A) flat organization.
B) bureaucratic organization.
C) inverted organization.
D) wide organization.

E) A) and B)
F) A) and C)

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

A) True
B) False

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A chain of command is a line of authority that moves from the lowest level of the hierarchy to the top.

A) True
B) False

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A bureaucracy is an organization with many layers of managers who set rules and regulations and oversee all decisions.

A) True
B) False

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Watchful Eyes Industries manufactures a multitude of safety products like burglar alarms, smoke detectors, surveillance cameras, and specialty locks. Watchful Eyes doesn't just stick to households, they outfit businesses and government agencies as well. They have found that each market requires a different marketing strategy. Watchful Eyes would probably benefit from departmentalization by


A) function.
B) process.
C) customer type.
D) market opportunities.

E) None of the above
F) All of the above

Correct Answer

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OnTrend, a cosmetology trade publication, utilizes the resources of other organizations as needed and business relationships are temporary as well as flexible. OnTrend is a networked organization made up of replaceable firms that join the network and leave it as needed. This unique organization is an example of


A) competitive benchmarking.
B) a virtual corporation.
C) core competency ranking.
D) real-time transparency.

E) B) and D)
F) B) and C)

Correct Answer

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Corinne, part of the human resources department at a multinational corporation, works with several hundred employees. Her main function is to advise and assist managers in other departments, such as marketing and production, when they make staffing decisions. Corinne's position would be classified as a(n) ________ position.


A) staff
B) line
C) first-line
D) secondary

E) All of the above
F) None of the above

Correct Answer

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Line organizations follow Fayol's traditional management rules.

A) True
B) False

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

A) True
B) False

Correct Answer

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The trend today is for large organizations to improve their efficiency in communication and decision making by


A) creating specific rules for everyone to follow.
B) eliminating several layers of management.
C) restructuring into a bureaucratic organization.
D) reducing the span of control for managers.

E) B) and C)
F) None of the above

Correct Answer

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Departmentalization by function groups employees based on similar skills, expertise, or resource use.

A) True
B) False

Correct Answer

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Erin is an attorney working for Food Innovations, Incorporated. She provides legal advice and assistance to Food Innovations managers. Erin's job would be classified as a staff position.

A) True
B) False

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