CH-8 Designing Adaptive Organizations – Effective Management : Exam Guide

Chapter 8: Designing Adaptive Organizations TRUE/FALSE 1. Organizational structure is the vertical and horizontal configuration of departments, authority, and jobs within a company. Answer: True 2. While organizational structure emphasizes the activities through which work gets done in the organization, organizational process emphasizes jobs and their authority relationships. Answer: False While organizational structure emphasizes jobs and their authority relationships, organizational process emphasizes the activities through which work gets done in the organization. 3. The process view of an organization will typically be very similar to the structural, hierarchical view of the organization. Answer: False The process view of an organization will typically be very different from the structural, hierarchical view of the organization. 4. Functional departmentalization organizes work and workers into separate units responsible for particular business functions or areas of expertise. Answer: True 5. Departmentalization is a method of organizing work and workers into separate units responsible for particular business functions or areas of expertise. Answer: False This is the definition of one specific type of departmentalization, functional departmentalization. The more general definition of departmentalization is subdividing work and workers into separate organizational units responsible for completing particular tasks.” 6. Cross-department coordination tends to be very easy in organizations with functional departmentalization. Answer: False Cross-department coordination can be difficult with functional departmentalization. 7. Product departmentalization organizes work and workers into separate units responsible for particular kinds of customers. Answer: False This is the definition of customer departmentalization. Product departmentalization organizes work and workers into separate units responsible for producing particular products or services. 8. In 1999, GM Products, a Dutch company, opened GM Solutions B.V., a division that sells a complete range of products in the area of ground security, installation material, and mobile following vehicles. From this information, you know that GM Products has a matrix organization. Answer: False This is product departmentalization. 9. The two disadvantages associated with product departmentalization are costly duplication and difficulties with cross-departmental coordination. Answer: True 10. Under product departmentalization, it is easier for top managers to assess work-unit performance. Answer: True 11. 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 12. In 2007, Yahoo combined its two U.S. advertising divisions into one. One of the former divisions was designed to deal with print and video advertisers, and the other was designed to deal with Web advertisers. From this information, you know that Yahoo has now adopted customer departmentalization. Answer: False Yahoo gave up customer departmentalization and is moving toward a more functional type of departmentalization. 13. In matrix departmentalization, as in other forms of departmentalization, most employees report to a single boss. Answer: False In matrix departmentalization, most employees report to two bosses. 14. The coordination of departmental activities tends to be more difficult with the geographic approach to departmentalization than with the other approaches. Answer: True 15. The most common matrix combines customer and functional forms of departmentalization. Answer: False The most common matrix combines product and functional forms of departmentalization. 16. One of the reasons that matrix organizations are difficult to manage is that the organizational structure violates the principle of delegation of authority. Answer: False One of the reasons that matrix organizations are difficult to manage is that they violate the principle of unity of command. 17. In a decentralized organization, workers closest to problems are authorized to make the decisions necessary to solve the problems on their own. Answer: True 18. The term task description refers to the number, kind, and variety of tasks that individual workers perform in doing their jobs. Answer: False The term job design refers to the number, kind, and variety of tasks that individual workers perform in doing their jobs. 19. Specialized jobs are characterized by simple, easy-to-learn steps, low variety, and high repetition. Answer: True 20. Despite their disadvantages, companies continue to create and use specialized jobs because they are very economical. Answer: True 21. Specialized jobs are generally inefficient. Answer: False Specialized jobs are highly efficient but can be tedious unless managers use job rotation, job enlargement, and job enrichment to make them more interesting. 22. Job enlargement and job enrichment mean essentially the same thing. Answer: False While job enlargement increases the number of tasks performed, job enrichment adds a fundamentally different dimension: authority and control to make meaningful decisions about the work. 23. According to the What Really Works, “The Job Characteristics Model: Making Jobs More Interesting and Motivating,” jobs rich with the five core job characteristics are more satisfying to workers who possess an individual characteristic called growth need strength. Answer: True 24. According to the What Really Works, “Workplace Absenteeism,” absenteeism may be reduced by increasing levels of skill variety, task identity, task significance, autonomy, and feedback in a job. Answer: True 25. Task significance is the degree to which a job gives workers the discretion, freedom, and independence to decide how and when to accomplish the job. Answer: False This is the definition of autonomy. Task significance is defined as the degree to which a job is perceived to have a substantial impact on others inside or outside the organization. 26. An organic organization is characterized by broadly defined jobs and responsibility; loosely defined, frequently changing roles; and decentralized authority and horizontal communication based on task knowledge. Answer: True 27. All organizations can clearly be categorized as either completely mechanistic or completely organic. Answer: False These dimensions represent bipolar extremes. Since the characteristics that define them can vary along a continuum, so can organizations, which may be more or less mechanistic or organic, rather than either completely one or the other. 28. 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 This is the definition of sequential interdependence. Reciprocal interdependence exists when work completed by different jobs or groups working together in a back-and-forth manner. 29. Empowerment can lead to changes in organizational processes because meaning, competence, impact, and self-determination produce empowered employees who take active rather than passive roles in their work. Answer: True 30. Vail Horton, the co-founder and CEO of Keen Mobility, likes to glide along the hallway of his company’s headquarters on his wooden skateboard, checking in with employees who might need an extra jolt of encouragement or a laugh with their morning coffee. From this information, you can surmise that the company operates in an atmosphere of behavioral informality. Answer: True 31. Casual dress policies and open office systems are two methods for increasing behavioral formality. Answer: False Casual dress policies and open office systems are two methods for increasing behavioral informality. 32. Open office systems increase behavioral informality by significantly increasing the level of communication and interaction among employees. Answer: True 33. According to the Doing the Right Thing box, there is nothing legally or ethically wrong with scavenging a fired coworker’s belongings before he or she leaves the company. Answer: False According to the text, such behavior is not professional nor is it ethical. 34. A virtual organization is defined as an organization that outsources noncore business activities to outside companies, suppliers, specialists, or consultants. Answer: False This is the definition of a modular organization. A virtual organization is defined as an organization that is part of a network in which many companies share skills, costs, capabilities, markets, and customers to collectively solve customer problems or provide specific products or services. 35. One of the advantages of virtual organization is the fact that it allows member companies to share costs. Answer: True 36. While the interorganizational 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 each other. Answer: True 37. The greatest disadvantage for networks who establish a virtual organization agreement is how difficult it is to manage. Answer: False Networks of virtual organizations are more manageable when they use a virtual organization agreement, that, somewhat like a contract, specifies the schedules, responsibilities, costs payouts, and liabilities for participating organizations. 38. In horizontal, interorganizational processes that characterize virtual organizations, the role of a broker is to plan, organize, and control. Answer: False The true role of a virtual organization broker is to create and assemble the knowledge, skills, and resources from different companies for outside parties, such as customers. MULTIPLE CHOICE 1. As a class project, Senora is working with other classmates to create a company that would market NASCAR memorabilia. Her teacher has instructed Senora 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 B. Use an organizational process to create a matrix design C. Create a virtual organization. D. Use the organizational structure to control creativity E. Create a matrix structure that will adhere to the unity of command principle Answer: A Organizational structure is the vertical and horizontal configuration of departments, authority, and jobs within a company. 2. _____________ is the collection of activities that transforms inputs into outputs that customers value. A. Reengineering B. Functionalization C. Organizational structure D. Production positioning E. Organizational process Answer: E Definition of an organizational process. 3. The organizational process: A. defines roles not activities B. limits the adaptivity of an organization C. uses vertical and horizontal departmentalization D. is a traditional method for establishing organizational structures E. is the collection of activities that transform inputs into outputs that customers value Answer: E Definition of an organizational process. 4. While _____________ emphasizes jobs and their authority relationships, _____________ emphasizes the activities through which work gets done in the organization. A. departmentalization; functionalization B. organizational process; organizational structure C. interorganizational process; intraorganizational process D. intraorganizational process; interorganizational process E. organizational structure; organizational process Answer: E Organizational structure is concerned with questions such as “Who reports to whom?” and “Who does What?” while the organizational process asks “How do things get done?” 5. _____________ departmentalization is defined as organizing work and workers into separate units responsible for particular business functions or areas of expertise. A. Functional B. Customer C. Matrix D. Product E. Hierarchical Answer: A Definition of functional departmentalization. 6. Kimberly-Clark is subdivided into organizational units called Kimberly-Clark Health Care, which provides products to hospitals, Kimberly-Clark Professional, which sells to businesses, and Kimberly-Clark Consumer, which sells the company’s products to customers. From this information, you know that Kimberly-Clark uses: A. hierarchical functionalization B. departmentalization C. a nonlinear organizational structure D. a product layout E. product formatting Answer: B Departmentalization is a general term that refers to subdividing work and workers into separate organizational units responsible for completing particular tasks. 7. As a consequence of the Industrial Revolution and its emphasis on specialization, institutions providing higher education developed strict departments that contained specialized functions to enhance the accumulation and dissemination of knowledge. Institutions providing higher education have traditionally used: A. reengineering B. functionalization C. departmentalization D. functional empowerment E. job dissemination Answer: C Departmentalization is a general term that refers to subdividing work and workers into separate organizational units responsible for completing particular tasks. 8. _____________ is a general term that refers to subdividing work and workers into separate organizational units responsible for completing particular tasks. A. Organizational layout B. Organizational process C. Departmentalization D. Job formatting E. Functionalization Answer: C Definition of departmentalization. 9. Which of the following types of departmentalization does NOT have a problem with the duplication of resources? A. Functional B. Geographic and matrix C. Product and customer D. Customer and functional E. Geographic Answer: A The structure of functional departmentalization does not allow for the duplication of resources. 10. Which of the following statements about functional departmentalization is true? A. Functional departmentalization allows work to be done by highly qualified specialists. B. Functional departmentalization increases costs by reducing duplication. C. Functional departmentalization complicates communication and coordination for departmental managers. D. Functional departmentalization requires the same kinds of functional departments in any company. E. Functional departmentalization is also called free-form specialization. Answer: A Functional departmentalization lowers costs by reducing duplication. People within a department have easy communication with functional departmentalization. One company that uses functional departmentalization might have an accounts receivable department while another may only have an accounting department. 11. Which of the following is NOT a characteristic of functional departmentalization? A. Functional departmentalization allows work to be done by highly qualified specialists. B. Functional departmentalization lowers costs by reducing duplication. C. Functional departmentalization organizes managers with broader experience and expertise. D. Functional departmentalization complicates coordination between departments. E. Functional departmentalization organizes workers into separate units responsible for performing particular business functions. Answer: C Functional departmentalization may product managers and workers with narrow experience and expertise. 12. Functional departmentalization: A. makes it easier for top managers to assess work-unit performance B. allows work to be done by highly qualified specialists C. produces managers with broader experience and expertise D. enhances coordination between departments E. encourages interdepartmental communication Answer: B 13. Hallmark has four departments. These departments are (1) Flowers and Gifts, (2) Cards and E-cards, (3) Hallmark Collectibles, and (4) Photo Albums and Scrapbooks. Hallmark uses _____________ departmentalization. A. matrix B. product C. customer D. geographic E. functional Answer: B Product departmentalization organizes work and workers into separate units responsible for producing particular products or services. 14. Disadvantages of _____________ departmentalization include slower decision making, the development of managers and workers with narrow experience and expertise, and more difficult cross-departmental coordination. A. product B. customer C. geographic D. functional E. hierarchical Answer: D These are all disadvantages of functional departmentalization. 15. 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. Because it is organized to better satisfy the needs of each of its four target markets, the manufacturer uses _____________ departmentalization. A. matrix B. product C. customer D. geographic E. functional Answer: C Customer departmentalization organizes work and workers into separate units responsible for particular kinds of customers. 16. Large accounting agencies typically have separate departments that deal with households, businesses, and governments. To better serve the needs of their clients, many of these accounting agencies use _____________ departmentalization. A. matrix B. product C. customer D. geographic E. functional Answer: C Customer departmentalization organizes work and workers into separate units responsible for particular kinds of customers. 17. With divisions that focus on business clients and consumer clients, companies like Sprint, American Express, and others are examples of _____________ departmentalization. A. boundaryless B. product C. customer D. functional E. matrix Answer: C Customer departmentalization focuses on customers’ needs. 18. The primary disadvantage of customer departmentalization is: A. an overemphasis on customer needs B. duplication C. difficulties in coordinating across departments D. overspecialization of managers and workers E. an inability to solve problems for specific customers Answer: B The customer basis of departmentalization tends to result in duplication of resources (e.g., marketing employees in each customer group). 19. Procter & Gamble has divisions for personal and beauty, house and home, health and wellness, baby and family, and pet nutrition and care. These divisions indicate that the company uses _____________ departmentalization. A. functional B. geographic C. product D. customer E. strategic business unit Answer: C Product departmentalization organizes work and workers into separate units responsible for producing particular products or services. 20. With _____________ departmentalization, most employees report to two bosses. A. geographic B. matrix C. product D. customer E. functional Answer: B With matrix departmentalization, most employees report to two bosses, one from each core part of the matrix. 21. The primary disadvantage of geographic departmentalization is: A. the absence of cross-departmental coordination B. broken chains of command C. spans of control that are too wide D. the lack of empowerment E. duplication of resources Answer: E Duplication of resources is the primary disadvantage of geographic departmentalization. 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. Commerce Insurance Services uses _____________ departmentalization. A. boundaryless B. product C. customer D. functional E. matrix Answer: E Matrix departmentalization uses two or more forms of departmentalization together. 23. Which of the following statements about matrix departmentalization is true? A. Most employees in an organization that uses matrix departmentalization report to two bosses. B. With matrix departmentalization, there tends to be more cross-functional interaction among employees than in other types of departmentalization. C. With matrix departmentalization, there needs to be significant coordination between functional and project managers. D. The most common matrix combines product and functional departmentalization. E. All of these statements about matrix departmentalization are true. Answer: E All of the statements are characteristic of matrix departmentalization. 24. The primary advantage of _____________ departmentalization is the fact it allows companies to efficiently manage large, complex tasks by minimizing duplication. A. product B. functional C. matrix D. geographic E. functional Answer: C Efficiency related to matrix departmentalization comes from avoiding duplication. 25. _____________ departmentalization is notorious for confusion and conflict between project managers in different areas of the organization. A. Matrix B. Functional C. Customer D. Product E. Geographic Answer: A Disagreements or misunderstandings about schedules, budgets, available resources, and the availability of employees with particular functional expertise are common.. 26. In a(n) _____________, managers in different parts of the matrix report to matrix managers, who help them sort out conflicts and problems. A. networked matrix B. synergistic matrix C. complex matrix D. hierarchical matrix E. organic matrix Answer: C Definition of a complex matrix. 27. A(n) _____________ is a form of matrix departmentalization in which managers in different parts of the matrix negotiate conflicts and resources directly. A. simple matrix B. networked matrix C. empathetic matrix D. matrix of convenience E. synergistic matrix Answer: A Definition of a simple matrix. 28. Of all types of departmentalization, _____________ departmentalization requires the highest level of management skill for successful implementation. A. geographic B. customer C. matrix D. product E. functional Answer: C This is viewed as one of the disadvantages of matrix departmentalization. 29. Because of problems associated with conflicts over schedules, budgets, and available resources (including employees), _____________ departmentalization often evolves from a simple form to a more complex form. A. hierarchical B. functional C. customer D. product E. matrix Answer: E Many matrix structures evolve from a simple matrix, in which managers in different parts of the matrix negotiate conflicts and resources directly, to a complex matrix, in which specialized matrix managers and departments are added to the organizational structure. 30. Honeywell Inc. reorganized its European operations along customer lines to prepare for a unified European Union. In doing so, it abandoned matrix departmentalization. Why would Honeywell engage in such restructuring? A. To create pools of resources B. To empower its employees C. To better adhere to the management philosophy of staff authority D. To improve its ability to handle complex tasks E. To end conflict between product managers in different parts of its matrix Answer: E One of the primary disadvantages of matrix departmentalization is the need for a high level of coordination. Alternatives A and D describe advantages of this form of departmentalization. 31. In terms of the chain of command, _____________ authority is the right to command immediate subordinates, while _____________ authority is the right to advise but not command others who are not subordinates. A. departmental; functional B. centralized; decentralized C. functional; expert D. internal; external E. line; staff Answer: E Definitions of line authority and staff authority. 32. Organizational authority is traditionally characterized by: A. chain of command B. empowerment C. behavioral informality D. reengineering E. all of these Answer: A Traditionally, organizational authority has been characterized by chain of command, line versus staff authority, delegation of authority, and degree of centralization. 33. Robert Strickland works in the legal department at a large consumer products manufacturer. It is his job to craft warnings on package labels. This is Strickland’s: A. line function B. boundary-spanning role C. chain of command role D. staff function E. personal empowerment role Answer: D A staff function is an activity that does not contribute directly to creating or selling the company’s product, but instead supports line activities. 34. As a result of their structures, matrix organizations automatically violate the principle of: A. line authority B. unity of command C. delegation of authority D. degree of centralization E. staff authority Answer: B Unity of command is the principle that workers should report to just one boss. 35. One of the key assumptions underlying the chain of command is _____________, which means that workers should report to just one supervisor. A. delegation of command B. empowerment C. synergistic authority D. unity of command E. centralization of authority Answer: D In practical terms, unity of command means that only one person can be in charge at a time. 36. A(n) _____________ function is an activity that contributes directly to creating or selling the company’s products. A. staff B. line C. mechanistic D. organic E. charted Answer: B Definition of a line function. 37. Jennifer Lee works in the public relations department of a large pharmaceutical company. It is her job to write speeches for the company’s top managers, issue press and video releases, host plant tours, and be involved in community affairs. Lee has: A. line authority B. mechanistic authority C. empowerment obligations D. staff authority E. linear power Answer: D Staff authority is the right to advise, but not command, others who are not subordinates in the chain of command. 38. A salesperson who works in the shipping division of an international distribution company is told by the accounting department that he must turn in a weekly expense account. His supervisor in the shipping division wants expense accounts submitted monthly. Since it takes at least two hours to prepare the expense account form and the salesperson wants to devote as much time as possible to sales, the salesperson is likely experiencing a problem with: A. line authority B. delegation of authority C. centralization D. chain of command E. organizational synergy Answer: D The chain of command is the vertical line of authority that clarifies who reports to whom throughout the organization. 39. The chain of command: A. is the horizontal line of authority that indicates at which level of management an individual belongs B. acts at cross-purposes to the unity of command principle C. is only relevant in mechanistic organizations D. does not permit delegation of authority E. is described by none of these Answer: E The chain of command is the vertical line of authority that clarifies who reports to whom throughout the organization 40. Which of the following positions most likely performs a staff function? A. The supervisor of the loading dock B. The organization’s receptionist C. The vice president of marketing D. A member of the office cleaning crew E. A shift supervisor Answer: D Only the office cleaning crew performs a task that does not directly contribute to the creation or sales of the product. 41. _____________ assigns direct authority and responsibility to a subordinate to complete tasks for which the manager is normally responsible. A. A job description B. Staff functionality C. Delegation of authority D. Decentralization E. An organization chart Answer: C Definition of delegation of authority. 42. When managers delegate work, three transfers occur. The three transfers are responsibility, authority, and: A. utility B. synergy C. reciprocity D. accountability E. empathy Answer: D The third transfer that occurs with delegation is the transfer of accountability. 43. 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 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 and make this individual accountable for the campaign’s success. In other words, the marketing manager has: A. implemented feedback controls B. created a staff position C. embraced the matrix organizational philosophy D. delegated the task E. created a win–win relationship Answer: D The delegation of authority is the assignment of direct authority and responsibility to a subordinate to complete tasks for which the manager is directly responsible. 44. _____________ is the process of solving problems by consistently applying the same rules, procedures, and processes. A. Consistency planning B. Organizational autonomy C. Standardization D. Problem empowerment E. Procedural planning Answer: C Definition of standardization. 45. Because the typical urban school district’s personnel and budgeting systems leave principals without much say in hiring teachers or allocating resources, it is clear that public education primarily uses: A. consistency planning B. organizational autonomy C. centralization of authority D. problem empowerment E. procedural planning Answer: C Centralization of authority is the location of most authority at the upper levels of the organizations, in this case, the school districts. 46. Like most large U.S. hospitals, University Health Care System spends an enormous amount on patient supplies, over $45 million annually. The hospital has more than 15,000 individual products that are purchased on a routine basis. One of the challenges for its purchasing department was that the various hospital departments used different product descriptions and classifications for the same item. Its purchasing manager instituted a hospital-wide purchasing policy that gave a specific code to each item. In other words, the purchasing manager engaged in: A. consistency planning B. organizational autonomy C. standardization D. problem empowerment E. procedural planning Answer: C Standardization is the process of solving problems by consistently applying the same rules, procedures, and processes. 47. An Indian cardinal’s call for local church leaders to have more power and for papal authority to be distributed to lower levels within the Catholic hierarchy has elicited agreement from other church leaders in India. Cardinal Varkey Vithayathil, in a published interview, stated that the Indian church has been forced “to depend on the Roman curia for too many matters.” He also asserted that bishops should not have “to run to Rome for everything” and that canon law should be modified to allow the pope to share his authority. Vithayathil is calling for: A. centralization B. standardization C. top-management empowerment D. job specialization E. decentralization Answer: E Decentralization is the location of a significant amount of authority in the lower levels of an organization. 48. According to Indian Cardinal Varkey Vithayathil, the greatest weakness of the Catholic Church is the way papal authority is exercised without the participation of those concerned. Vithayathil is criticizing the fact that the Catholic Church relies on: A. centralization of authority B. standardization C. top management reciprocity D. job specialization E. decentralization Answer: A Centralization of authority is the location of most authority at the upper levels of the organization. 49. Decentralization: A. leads to faster decision making and more satisfied customers and employees B. tends to stymie employee capabilities C. is characteristic of large companies D. is more appropriate where standardization is important E. is accurately described by all of these Answer: A Decentralization develops employee capabilities throughout the company, which leads to faster decision making and more satisfied customers and employees. 50. Where standardization is important, it is appropriate to: A. centralize authority B. decentralize authority C. emphasize line authority D. have a flat organizational structure E. evaluate interdependence Answer: A One rule of thumb is to stay centralized where standardization is important and to decentralize where standardization is unimportant. 51. _____________ occurs when a job comprises a small part of a larger task or process. A. Job consistency B. Job specialization C. Task reengineering D. Standardization E. Task homogeneity Answer: B Definition of job specialization. 52. Job specialization can result in: A. high job satisfaction B. employee boredom C. low employee turnover D. complicated job designs E. low absenteeism Answer: B One of the clear disadvantages of specialized jobs is that they quickly become boring. 53. _____________ determines the number, kind, and variety of tasks that individual workers perform in doing their jobs. A. Standardization B. Task mapping C. Job design D. Job specialization E. An organizational chart Answer: C Definition of job design. 54. An organization that has increased the number of different tasks that a worker performs within one particular job has engaged in: A. task aggregation B. job specialization C. job enlargement D. employee specialization E. job rotation Answer: C Definition of job enlargement. 55. 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 of the tools 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. The Ryerson University Library used: A. task aggregation B. job specialization C. job enlargement D. employee specialization E. job rotation Answer: E Job rotation is the periodic movement of employees from one specialized task to another. 56. It’s no secret that physicians today face myriad challenges and changes––from increased medical malpractice litigation, shrinking reimbursements, and cost containment as well as concerns about privacy, security, and patient safety. Their greatest sources of satisfaction in their work are the patients. Which of the following job design techniques could be used to adjust practice patterns to permit doctors more of the patient contact they enjoy so much? A. Job enlargement B. Task specialization C. Job enrichment D. Task standardization E. Job rotation Answer: C Job enrichment attempts to overcome the deficiencies in specialized work by giving workers the authority and control to make meaningful decisions about their work. 57. Scott Manuel had a lot to learn when he was hired at Thomson, a highly profitable global publisher of legal, financial, scientific, and healthcare data. Manuel was allowed to work for different business units in the company before accepting a permanent position. Through the use of _____________, he was able to learn about the company and determine which division best suited his skills. A. job enlargement B. task specialization C. job enrichment D. task standardization E. job rotation Answer: E With job rotation, companies are able to retain the economic benefits of specialized work, but the greater variety of tasks makes the work less boring and more satisfying for workers. 58. The job design approach associated with _____________ involves increasing the number of different tasks that a worker performs within one particular job and giving workers the authority and control to make meaningful decisions about their work. A. job rotation and job enlargement B. job specialization and job enrichment C. job specialization and job enlargement D. job enlargement and job enrichment E. job enrichment and job rotation Answer: D Definitions of job enlargement and job enrichment. 59. The central concern of the job characteristics model is: A. internal motivation B. synergy C. task identification D. time-motion studies E. a value-added measure Answer: A The primary goal of this model is to create jobs that result in positive personal and work outcomes, with the central concern being internal motivation. 60. Which of the following statements about the five core job characteristics associated with the job characteristics model is true? A. Autonomy is the degree to which a job is perceived to have a substantial impact on others inside or outside the organization. B. Physicians who work in an emergency room do not have skill variety. C. Skill significance refers to the degree to which a job requires completion of a whole and identifiable piece of work. D. Because physicians who work in an emergency room often do not know the outcomes for patients who they have assisted, feedback may be seen as a problem. E. The job of a physician in an emergency room has a low level of task significance. Answer: D Task significance is the degree to which a job is perceived to have a substantial impact on others inside or outside the organization; what emergency room physicians do has a high degree of task significance. In that these physicians have to deal with everything from a runny nose to a bullet wound in the heart and all ailments in between, their job has skill variety. Task identity refers to the degree to which a job requires completion of a whole and identifiable piece of work. 61. According to the What Really Works, “Workplace Absenteeism,” the core job characteristic that has the greatest effect in reducing absenteeism is: A. task identity B. task significance C. feedback D. autonomy E. job combination Answer: D Autonomy is the degree to which a job gives workers the discretion, freedom, and interdependence to decide how and when to accomplish the job. Workers are 74 percent more likely to attend work when their jobs have autonomy than when they don’t. 62. Which of the following approaches to job redesign entails more than simply providing additional variety in job tasks? A. The job enrichment plan B. The job characteristics model C. The Gantt chart D. The task specialization map E. The task breakdown plan Answer: B The job characteristics model is an approach to job redesign that seeks to formulate jobs in ways that motivate workers and lead to positive work outcomes. 63. Which of the following is NOT one of the core job characteristics in the job characteristics model? A. Client relationships B. Task identity C. Autonomy D. Skill variety E. Task significance Answer: A See Exhibit 8.10. 64. Elena works in a data processing department for a large credit reporting service and is bored. She spends her days inputting an endless stream of monotonous data into much larger data bases. According to the job characteristics model, one of the primary reasons for her boredom is: A. a low degree of feedback B. a high degree of autonomy C. a low degree of task identity D. a high degree of task significance E. a high degree of skill variety Answer: C Her job is just a small part of a much bigger task. 65. _____________ is the degree to which a job gives workers the discretion, freedom, and independence to decide how and when to accomplish the job. A. Task significance B. Task identity C. Skill variety D. Autonomy E. Skill feedback Answer: D Definition of autonomy. 66. _____________ is the degree to which a job is perceived to have a substantial impact on others inside or outside the organization. A. Task significance B. Skill feedback C. Skill variety D. Autonomy E. Task identity Answer: A Definition of task significance. 67. According to the job characteristics model, _____________ means pushing some managerial authority down to workers. A. establishing reciprocity B. vertical loading C. forming natural work units D. decoding tasks E. creating group norms Answer: B In other words, vertical authority means giving workers the same authority as managers to resolve customer problems. 68. A(n) _____________ organization is characterized by broadly defined jobs and responsibilities; loosely defined, frequently changing roles; and decentralized authority and horizontal communication based on task knowledge. A. centralized B. mechanistic C. departmentalized D. organic E. modular Answer: D Definition of organic organization. 69. The CEO of an electronics company stated that an organization chart was inapplicable in his organization and described it as a dangerous method of thinking. According to this CEO, the first requirement of management was that it should make the fullest use of the capacities of its members; any individual’s job should be as little defined as possible so that it would ‘shape itself’ to the person’s special abilities and initiative. This electronics company more than likely had a(n) _____________ organization. A. centralized B. mechanistic C. departmentalized D. organic E. modular Answer: D An organic organization is characterized by broadly defined jobs and responsibilities; loosely defined, frequently changing roles; and decentralized authority and horizontal communication based on task knowledge. 70. In a(n) _____________ organization, the normal procedure for dealing with any matter lying outside the boundaries of one individual’s functional responsibility is to refer it to the point in the system where such responsibility is known to reside or, failing that, to lay it before one’s superior. A. centralized B. mechanistic C. departmentalized D. organic E. modular Answer: B The existence of a rigid chain of command, as in a mechanistic organization, precludes a subordinate acting on his or her own. 71. When higher management in a(n) _____________ organization admits there is a need for better communication, the response is to tether subordinates to their jobs and to appoint newly hired employees who specialize in establishing liaison relationships. A. centralized B. mechanistic C. departmentalized D. organic E. modular Answer: B The reliance on vertical communication in a mechanistic organization precludes subordinates from sharing ideas, etc. 72. Which of the following statements about the organic form of organization design is true? A. The organic form of organization design is characterized by broadly defined jobs and responsibility; loosely defined, frequently changing roles; and decentralized authority and horizontal communication based on task knowledge. B. The organic form of organization design works best in stable business environments. C. The organic form of organization design is better suited to using organizational design techniques based upon functional departmentalization and centralized authority. D. The organic form of organization design is typically less appropriate than the mechanistic approach for the environments in which today’s businesses compete. E. All of these statements about the organic form of organization design are true. Answer: A Organic organizations work best in dynamic business environments, are loosely defined, and are more appropriate for today’s businesses. 73. A(n) _____________ 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. A. modular B. departmentalized C. standardized D. organic E. mechanistic Answer: E Definition of a mechanistic organization. 74. Which of the following statements about mechanistic organizations is true? A. Mechanistic organizations rely on decentralized authority. B. Mechanistic organizations work best in stable, unchanging business environments. C. Mechanistic organizations are characterized by horizontal communication based on task knowledge. D. Mechanistic organizations have broadly defined jobs. E. None of these statements about mechanistic organizations is true. Answer: B Mechanistic organizations use job specialization, a rigid chain of command, and vertical communication. 75. _____________ is a fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical measures of performance, such as cost, quality, service, and speed. A. Pooling interdependence B. Reciprocating interdependence C. Reengineering D. Repositioning E. Manufacturing conversion Answer: C Definition of reengineering. 76. Since 2001, 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. The quality of this information varied. Now AFWA provides the same high standard of weather information to all pilots. A. customization B. micro-adaptation C. sequential independence D. reengineering E. customer empowerment Answer: D Reengineering is the fundamental rethinking and radical redesign of processes to achieve dramatic improvements in performance. 77. American Tanning and Leather prepares exotic animal skins for fashion designers. The process for turning raw salt-cured skins into useable leather involves ten steps. The steps include an initial measuring and grading, which is followed by tanning, shaving, re-tanning, dying, and a final measuring and grading. This is an example of a(n) _____________ process. A. extraorganizational B. intraorganizational C. interorganizational D. reengineering E. benchmarking Answer: B An intraorganizational process is the collection of activities that take place within an organization to transform inputs into outputs that customers value. 78. LexisNexis realized that its ability to serve new Web-based customers was severely strained. Thousands of small- and mid-sized 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. LexisNexis would most likely use _____________ to radically change its business practices. A. standardization B. micro-adaptation C. sequential independence D. reengineering E. customer empowerment Answer: D Reengineering is the fundamental rethinking and radical redesign of operational processes. 79. American Tanning and Leather prepares exotic animal skins for fashion designers. The process for turning raw salt-cured skins into useable leather involves ten steps. The steps include an initial measuring and grading, which is followed by tanning, shaving, re-tanning, dying, and a final measuring and grading. These successive steps are an example of: A. autonomous independence B. pooled interdependence C. sequential interdependence D. reciprocal interdependence E. benchmarked interdependence Answer: C In sequential interdependence, work must be performed in succession, as one group’s or job’s output becomes the input for the next group or job. 80. The three types of task interdependence are: A. pooled, delegated, and systematic B. delegated, integrated, and combined C. sequential, delegated, and pooled D. reciprocal, pooled, and sequential E. integrated, reciprocal, and synergistic Answer: D Pooled, sequential, and reciprocal interdependence are the three types of task interdependence. 81. _____________ is a feeling of intrinsic motivation, in which workers perceive their work to have meaning and perceive themselves to be competent, having an impact, and capable of self-determination. A. Reciprocity B. Motivational assertion C. Eutonomy D. Empowerment E. Autonomy Answer: D Definition of empowerment. 82. Zara clothing stores has developed a system that can order new fashions and deliver them to the store in only three weeks. It uses _____________ to pass information to the next person in the line of development. Zara begins this inside the store by enabling the store manager to communicate with its headquarters via the Internet. 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 colors and design. 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. A. standardization B. sequential interdependence C. pooled interdependence D. manager empowerment E. transactional intradependence Answer: B Sequential interdependence is work completed in succession. 83. A military expert describes how the military forces were organized for Operation Desert Storm as pooled interdependence. This means that each branch of the military that took part in the operation: A. independently contributed to the success of the campaign B. worked with each other in a give-and-take manner C. performed identical tasks D. accepted the fact that one’s group’s output was another group’s input E. had little, or no, autonomy Answer: A Pooled interdependence means that the task was completed by each branch acting independently. 84. In essence, reengineering changes organizations by: A. increasing reciprocal interdependence B. decreasing the use of autonomy C. increasing pooled interdependence D. decreasing delegation E. increasing sequential interdependence Answer: A By reducing the handoffs between different jobs or groups, reengineering decreases sequential interdependence. By making groups or individuals responsible for larger, more complete processes, reengineering increases reciprocal interdependence. 85. Leaders during any disaster need to give their employees a sense that everyone is participating in the relief effort. The Gap gave its employees the authority to transfer their paid time off to some 1,300 employees affected by Hurricane Katrina. The Gap used _____________ to allow its employees to gain a feeling of intrinsic motivation. A. standardization B. sequential interdependence C. pooled interdependence D. empowerment E. transactional intradependence Answer: D Empowerment allows workers to gain feelings of intrinsic motivation because they are allowed to self-determine their response to a work situation. 86. Roughly 70 percent of all reengineering projects fail because: A. of how the process affects people in the workplace B. the reengineering process requires the organization’s vision to be changed C. staff personnel must be given line authority to effectively implement reengineering D. satisfactory benchmarks cannot be located E. newly hired employees cannot internalize the organizational culture Answer: A 87. Novo Nordisk is a European manufacturer of pharmaceuticals. Rikke NedergaardBischoff, a clinical development 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.” Novo Nordisk provides NedergaardBischoff with: A. a rigid chain of command B. a mechanistic work environment C. feelings of intrinsic motivation D. reengineering opportunities E. a high degree of job significance as defined by the job characteristic model Answer: C Empowerment means permanently passing decision-making authority and responsibility from managers to workers. 88. If you’ve ever perused the women’s “career” clothing in the Victoria’s Secret catalog, you’d be hard pressed to find something appropriate to wear in most offices. Yet Victoria’s Secret has a dress code for its own retail employees. The dress code instructs that “clothing must not be excessively short, tight, or revealing.” Furthermore, all professional attire for men and women must be 95 percent black. Store workers must go easy on the accessories, with “no more than two rings per hand or two earrings per ear.” Body piercings and tattoos must be covered with bandages, makeup, or opaque hosiery. Fishnet stockings are not permitted. Victoria’s Secret influences intraorganizational processes through: A. autonomous interdependence B. transactional intradependence C. behavioral formality D. pooled interdependence E. managerial autonomy Answer: C Behavioral formality is a workplace atmosphere characterized by specific rules––in this case, how to dress. 89. A human resources specialist who was examining the behavioral informality of an office would be especially aware of: A. the absence of internal motivation B. a broad span of management C. a high degree of formalization within the office D. a mechanistic group structure E. spontaneity of interpersonal communications Answer: E Behavioral informality refers to workplace atmospheres characterized by spontaneity, casualness, and interpersonal familiarity. 90. One characteristic of open office systems is: A. more shared space than private space B. the use of motivational cues C. the absence of an organizational chart D. narrow spans of management E. an absence of boundaries Answer: A Open office systems try to increase interaction by removing physical barriers that separate workers. 91. Which of the following statements about open office systems is true? A. Open office systems tend to decrease interaction by removing physical barriers that separate workers. B. Open office systems increase the degree of behavioral formality within an office. C. Open office systems have much more shared space than private space. D. Companies are uniformly enthusiastic about the benefits of open office systems. E. All of these statements about open office systems are true. Answer: C Open office systems increase behavioral informality because they remove communication barriers. Not everyone enjoys sharing his or her work space with others. Many people need privacy. 92. Which of the following is an approach to managing interorganizational processes? A. Matrix organizations B. Modular organizations C. Flat organizations D. Hierarchical organizations E. Tall organizations Answer: B The two approaches to interorganizational processes are modular organizations and virtual organizations. 93. MJM Sports is a Seattle company that designs and manufactures machines that allow bar patrons to compete in fantasy sports contests. Sales are brisk; the market is expanding coast to coast. Every time MJM sells another unit, a technician has to visit the bar, install a computerized kiosk and a 42-inch plasma TV, and hook everything up to the Internet. As a result, MJM has concentrated on what it does best, which is to create and upgrade the machines, and has chosen to outsource the installation process. MJM is an example of a _____________ organization. A. modular B. virtual C. matrix D. electronic E. boundaryless Answer: A Modular organizations outsource all but the core business activities that they can perform best. 94. Except for the core business activities that they can perform better, faster, and cheaper than others, _____________ outsource all remaining business activities to outside companies, suppliers, specialists, or consultants. A. modular organizations B. hierarchical organizations C. boundaryless organizations D. organizational networks E. virtual organizations Answer: A Definition of a modular organization. 95. Modular organizations: A. allow a high level of control over business processes and output B. cost significantly more to run than traditional organizations C. outsource all but the core business activities that they can perform best D. succeed because they operate independently from vendors and suppliers E. are accurately described by all of these Answer: C Modular organizations outsource noncore business activities to outside companies, suppliers, specialists, or customers. 96. A(n) _____________ organization is part of a network in which many companies share skills, costs, capabilities, markets, and customers with each other. A. modular B. virtual C. matrix D. electronic E. boundaryless Answer: B Definition of a virtual organization. 97. A park, recreation, and open space (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 for the benefit these afford individuals, communities, the economy, and the environment. A PROS cooperative is an example of a _____________ organization: A. modular B. boundaryless C. decentralized D. virtual E. mechanistic Answer: D A virtual organization is part of a network in which many companies share skills, costs, capabilities, markets, and customers with each other. 98. 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. It is intended for this _____________ to cut as much as $3,000 from the costs of producing one car. A. matrix organization B. functional organization C. modular organization D. hierarchical organization E. virtual organization Answer: E A virtual organization is part of a network in which many companies share skills, costs, capabilities, markets, and customers with each other. 99. The composition of a _____________ organization is always changing. A. modular B. boundaryless C. decentralized D. virtual E. mechanistic Answer: D The relationships in a virtual organization tend to be shorter and often temporary as compared to relationships in a modular organization, which tend to be more stable and longer lasting. 100. Refer to “What Would You Do?” The configuration of departments, authority, and jobs within Yahoo! is known as a(n): A. organizational authority B. organizational process C. organizational structure D. job design E. organizational design Answer: C 101. Refer to “What Would You Do?” Previously at Yahoo!, decisions and budgets used to require signoffs from multiple divisions and multiple managers in multiple countries. Now, Ash Patel is completely in charge of global strategy. Prior to Patel’s promotion, Yahoo! was crippled by debilitating: A. centralization B. decentralization C. authority D. standardization E. authorization Answer: B 102. Refer to “What Would You Do?” By adding an international division to product and technology development, Yahoo! incorporated _____________ departmentalization in to its organizational structure. A. functional B. product C. geographic D. customer E. data Answer: C SHORT ANSWER 1. Describe what is meant by organizational structure and organizational process. How are these concepts related to each other? How are they different from each other? Answer: Organizational structure is the traditional approach to organizational design. It refers to the vertical and horizontal configuration of departments, authority, and jobs within a company. It is exemplified in the organizational chart. Organizational process, on the other hand, refers to the collection of activities that transform inputs into outputs that customers value. In contrast to traditional approaches to organizational structure, contemporary organizations are becoming more adaptive by redesigning their internal and external processes. The process view of a company, which focuses on how things get done, is very different from the hierarchical view of the company presented by its organization chart, which focuses on accountability, responsibility, and position within the chain of command. 2. Explain what is meant by the term departmentalization. List the five traditional approaches to departmentalization. Answer: Traditionally, organizational structures have been based on some form of departmentalization. Departmentalization is a method of subdividing work and workers into separate organizational units that take responsibility for completing particular tasks. The five traditional approaches to departmentalization are functional, product, customer, geographic, and matrix. 3. There is one common disadvantage associated with geographic, product, and customer departmentalization. What is it? Explain how the functional and matrix forms avoid this disadvantage. Answer: The common disadvantage of many forms of departmentalization, which is not shared by the functional and matrix forms, is duplication of resources. This disadvantage is shared by the product, customer, and geographic approaches to departmentalization, which typically duplicate functional departments such as human resources and sales in each of their divisions. Since the functional structure organizes workers around functions and does not have divisions, duplication never occurs. In the case of the matrix structure, duplication is avoided by assigning and reassigning workers from functional departments to different projects as they are needed. 4. Identify the five traditional approaches to organizational structure. Which one is the best for use by a company? Explain your answer. Answer: The five traditional approaches to organizational structure are departmentalization based upon functional, product, customer, geographic, and matrix approaches. There is no “best” approach to organizational structure. Each structure has advantages and disadvantages. The form of departmentalization that is best depends upon the specific characteristics of the internal and external environments faced by the company. The company should select a structure that will maximize benefits through its advantages and minimize costs through its disadvantages. As the environment facing the company changes, the structure may also have to change. 5. Define authority. List the four dimensions by which it has traditionally been characterized in organizations. Answer: Authority is the right to give commands, take action, and make decisions to achieve organizational objectives. Traditionally, organizational authority has been characterized by the following dimensions: (1) chain of command, (2) line versus staff authority, (3) delegation of authority, and (4) degree of centralization. 6. Define standardization. How is this concept relevant to the degree of organizational centralization? Answer: Standardization is solving problems by consistently applying the same rules, procedures, and processes. It is a parameter that is relevant to decisions regarding the level of centralization that is appropriate in an organization. Centralization of authority is the location of most authority at the upper levels of the organization. In a centralized organization, managers make most decisions, even the relatively small ones. Decentralization is the location of a significant amount of authority in the lower levels of the organization. Since decentralization is associated with faster decision making, more satisfied customers and employees, and better organizational performance, the key question is no longer whether companies should decentralize, but where they should decentralize. One rule of thumb is to stay centralized where standardization is important and to decentralize where standardization is unimportant. 7. What is job specialization? Briefly explain its advantages and disadvantages. Answer: Job specialization is a job composed of a small part of a larger task or process. Specialized jobs are characterized by simple, easy-to-learn steps, low variety, and high repetition. In terms of advantages, specialized jobs are very economical. Once a job has been specialized, it takes little time to learn and master. Consequently, when experienced workers quit or are absent, the company loses little productivity when replacing them with a new employee. Because the work is designed to be simple, wages can remain low, since it isn’t necessary to pay high salaries to attract highly experienced, educated, or trained workers. One of the clear disadvantages of specialized jobs is that, being so easy to learn, they quickly become boring. This, in turn, can lead to low job satisfaction and high absenteeism and employee turnover, all of which are very costly to organizations. 8. What are the primary disadvantages of job specialization? How can job redesign be used to overcome these disadvantages? Answer: Job specialization is a job composed of a small part of a larger task or process. Specialized jobs are characterized by simple, easy-to-learn steps, low variety, and high repetition. One of the clear disadvantages of specialized jobs is that, being so easy to learn, they quickly become boring. This, in turn, can lead to low job satisfaction and high absenteeism and employee turnover, all of which are very costly to organizations. Consequently, job redesign efforts have focused on modifying jobs to keep the benefits of specialized jobs but to reduce their obvious costs and disadvantages. Three methods, job rotation, job enlargement, and job enrichment, have been used to try to improve specialized jobs. By contrast to these three methods, which focus on providing variety in job tasks, the job characteristics model is an approach to job redesign that seeks to formulate jobs in ways that motivate workers and lead to positive work outcomes. 9. The job characteristics model (JCM) is concerned with increasing internal motivation. JCM specifies three critical psychological traits that must occur for work to be internally motivating. What are they? Answer: First, workers must experience the work as meaningful. Second, workers must experience responsibility for work outcomes. Third, workers must have actual knowledge of how well they are performing their jobs. 10. How do the mechanistic and organic approaches to organization design differ? Under what circumstances is each appropriate for use by a company? Answer: Mechanistic organizations are characterized by specialized jobs and responsibilities, precisely defined, unchanging roles, and a rigid chain of command based on centralized authority and vertical communication. They tend to focus on organizational structure. This type of organization works best in stable, unchanging business environments, which were more prevalent before 1980. By contrast, organic organizations are characterized by broadly defined jobs and responsibility, loosely defined, frequently changing roles, and decentralized authority and horizontal communication based on task knowledge. Organic organizations are more concerned with organizational processes than organizational structure. This type of organization works best in dynamic, changing business environments, of the sort that many contemporary businesses now face. 11. You have been instructed to design an adaptive organizational structure. How will your focus differ if you approach the project using reengineering, empowerment, and behavioral informality than if you think in terms of modular and virtual organizations? Answer: All of these concepts relate to the topic of organizational process, which is the collection of activities that transforms inputs into outputs that customers value. The difference between the two sets of concepts is one of internal versus external focus. Companies use reengineering, empowerment, and behavior informality to redesign their internal organizational processes. On the other hand, when redesigning their external processes (i.e., how they change to improve their interactions with those outside the company), they are more likely to use the approaches of modular or virtual organizations. 12. List and briefly describe the three approaches that companies can use to redesign internal processes. Answer: Companies can use reengineering, empowerment, and behavioral informality to change their intraorganizational processes. Reengineering changes an organization’s orientation from vertical to horizontal through fundamental rethinking and radical redesign of business processes. Empowering workers means taking decision-making authority and responsibility from managers and giving it to workers. Empowered workers develop feelings of competence and self-determination and believe their work to have meaning and impact. Workplaces characterized by behavioral informality are spontaneous and casual. Casual dress policies and open office systems are two of the most popular methods for increasing behavioral informality. 13. What is a modular organization? Briefly identify the advantages and disadvantages associated with this organizational form. Answer: Except for the core business activities that they can perform better, faster, and cheaper than others, modular organizations outsource all remaining business activities to outside companies, suppliers, specialists, or consultants. The term modular is used because the business activities purchased from outside companies can be added and dropped as needed. Advantages include being less expensive to run, and being able to focus on the core activities that they do best. Disadvantages include requirements for extremely close relationships with reliable suppliers and vendors, potential loss of control, and the threat of creating new competitors if the wrong business activities are outsourced. ESSAY 1. Identify an organization that you know of and explain how and why its approach to organizational design tends to fit better with either the traditional (structure) or contemporary (process) approaches to organizational design. Be sure to state whether your organizational example more closely fits the model of mechanistic or organic organizational design. Answer: The traditional approach to organization design is the organizational structure approach, which emphasizes the vertical and horizontal configuration of departments, authority, and jobs within a company. It includes an emphasis on departmentalization, organizational authority, and job design. These organizational design techniques are methods better suited for mechanistic organizations, which are characterized by a focus on organizational structure, including specialized jobs and responsibilities, precisely defined, unchanging roles, and a rigid chain of command based on centralized authority and vertical communication. Such approaches to organization design are more appropriate to the stable business environments that were more prevalent before 1980. By way of contrast to this traditional approach, contemporary approaches to organization design focus on increasing organizational adaptability by redesigning the internal and external processes of organizations. An organizational process is the collection of activities that transforms inputs into outputs that customers value. Companies use reengineering, empowerment, and behavior informality to redesign their internal organizational processes, as well as the approaches of modular, virtual, or boundaryless organizations when redesigning their external processes (i.e., how they change to improve their interactions with those outside the company). These organization design techniques, with their emphasis on becoming more adaptive through process redesign, are more appropriate for organic organizations. Organic organizations are characterized by broadly defined jobs and responsibility, loosely defined, frequently changing roles, and decentralized authority and horizontal communication based on task knowledge. Because of its high level of adaptability, this type of organization works best in dynamic, changing business environments, which increasingly represent the type of environment in which today’s businesses compete. Student examples should appropriately describe their specified organization as either (a) more mechanistically oriented, with an emphasis on organizational structure approaches such as departmentalization, organizational authority, and job design, or (b) more organically oriented, with an emphasis on internal and/or external organizational process approaches such as reengineering, empowerment, and behavior informality or modular, virtual, or boundaryless organizations. Concrete examples should be linked from their organizational case example to the specifics of either the traditional, mechanistic approach to organization design or to the contemporary, organic approaches to organization design. Answers based on company examples from the student’s outside reading or personal knowledge demonstrate a higher level of understanding of the material than simply restating one of the company examples provided in the text. 2. List and briefly identify each of the five traditional departmental structures. Explain which one tends to be the most difficult to manage effectively. Answer: There are five traditional departmental structures: functional, product, customer, geographic, and matrix. Functional departmentalization is based on the different business functions or expertise used to run a business. Product departmentalization is organized according to the different products or services a company sells. Customer departmentalization focuses its divisions on the different kinds of customers that companies have. Geographic departmentalization is based on the different geographical areas or markets in which the company does business. Matrix departmentalization is a hybrid form that combines two or more forms of departmentalization, the most common being the product and functional forms. The form that tends to be the most difficult to manage is the matrix form, as a result of several things that distinguish it from the other traditional forms of departmentalization. First, most employees report to two bosses, violating the principle of unity of command. Second, there tends to be much more cross-functional interaction than in other forms of departmentalization, since it is common for matrix workers to be members of several ongoing project groups. Finally, because of the high level of cross-functional interaction, matrix departmentalization requires significant coordination between functional and product managers. In particular, these managers have the complex job of tracking and managing the multiple product and functional demands on employees’ time. The primary disadvantage of matrix departmentalization is the high level of coordination required to manage the complexity involved with running large, ongoing projects at various levels of completion. Matrix structures are notorious for confusion and conflict between project bosses, or between product and functional bosses. Disagreements or misunderstanding about project schedules, budgets, available resources, and the availability of employees with particular functional expertise are common. Another disadvantage is that matrix structures require much more management skill than the other forms of departmentalization. 3. Explain what is meant by authority. How can authority be centralized? How can it be decentralized? Describe the circumstances under which centralization versus decentralization would be more desirable. As a manager in a large company, what particular challenge might you expect to face with regard to the use of decentralization? Answer: Authority is the right to give commands, take action, and make decisions to achieve organizational objectives. Centralization of authority is the location of most authority at the upper levels of the organization. In a centralized organization, managers make most decisions, even the relatively small ones. By contrast, decentralization is the location of a significant amount of authority in the lower levels of the organization. An organization is decentralized if it has a high degree of delegation at all levels. In a decentralized organization, workers closest to problems are authorized to make the decisions necessary to solve the problems on their own. As a manager in a large company, the particular challenge you should expect to face with regard to the use of decentralization is the fact that despite its value in promoting organizational performance, it is not very widely used in such companies. Thus, your challenge would be to try to apply the latest management principles to reap the benefits of decentralization in an organizational culture that probably will not wholeheartedly endorse such an emphasis. This could provide the opportunity for new managers to act as change agents, particularly if they are able to demonstrate significant improvements in results through the use of delegation and decentralization. 4. Identify a job that you had (or a job that you know of) that was particularly boring and that had the characteristics of a specialized job. Analyze that job in terms of the five core job characteristics from the job characteristics model. Make specific recommendations for redesigning it by using three to five of the redesign techniques presented in the model. Answer: Job specialization is a job composed of a small part of a larger task or process. Specialized jobs are characterized by simple, easy-to-learn steps, low variety, and high repetition. One of the clear disadvantages of specialized jobs is that, being so easy to learn, they quickly become boring. This, in turn, can lead to low job satisfaction and high absenteeism and employee turnover, all of which are very costly to organizations. Students should have no difficulty identifying a specialized job from their own or someone else’s experience. At a minimum, they should be able to use the textbook example of the McDonald’s drive-through window job. Their description of such a job should emphasize its simplicity, low variety, and high level of repetition. The job characteristics model (JCM) is an approach to job redesign that seeks to formulate jobs in ways that motivate workers and lead to positive work outcomes. According to the JCM, jobs that possess five core job characteristics (skill variety, task identity, task significance, autonomy, and feedback) will lead to three critical psychological states (experienced meaningfulness of the work, experienced responsibility for the outcomes of the work, and knowledge of the actual results of work activity), which will in turn result in high internal work motivation, characterized by high “growth” satisfaction, high general job satisfaction, and high work effectiveness. This essay question asks students to analyze their specialized job in terms of the five core job characteristics: (1) skill variety, or the number of different activities performed in a job; (2) task identity, which is the degree to which a job requires, from beginning to end, the completion of a whole and identifiable piece of work; (3) task significance, which refers to the degree to which a job is perceived to have a substantial impact on others inside or outside the organization; (4) autonomy, or the degree to which a job gives workers the discretion, freedom, and independence to decide how and when to accomplish the job, and (5) feedback, which is the amount of information the job provides to workers about their work performance. Students’ analyses should specify several of these dimensions on which the specialized job is clearly deficient. They are then asked to specify which of the five options for job redesign presented in the job characteristics model seem appropriate for redesigning this job. These five options are (1) combining tasks, (2) forming natural work units, (3) establishing client relationships, (4) vertical loading (which means pushing some managerial authority down to workers), and (5) opening feedback channels. In this section, answers can be evaluated by the logic and pragmatism of student suggestions, given the realities and limitations of real-world management situations. To the extent that answers are couched in terms of the redesign option’s direct effect on increasing specific core job characteristics, a higher level of understanding of the material is being demonstrated. Better answers may integrate the material from the “What Really Works” feature. 5. What is an intraorganizational process? Identify the techniques that are being used by companies today to change these processes. Evaluate the probable level of risk to a company in using each of these approaches. Answer: An intraorganizational process is the collection of activities that take place within an organization to transform inputs into outputs that customers value. Today, companies are using reengineering, empowerment, and behavioral informality to change their intraorganizational processes. Through fundamental rethinking and radical redesign of business processes, reengineering changes an organization’s orientation from vertical to horizontal. Reengineering changes work processes by decreasing sequential and pooled interdependence, and by increasing reciprocal interdependence. Reengineering promises dramatic increases in productivity and customer satisfaction but has been criticized as simply an excuse to cut costs and lay off workers. Empowering workers means taking decision-making authority and responsibility from managers and giving it to workers. Empowered workers develop feelings of competence and self-determination and believe their work to have meaning and impact. Workplaces characterized by behavioral informality are spontaneous and casual. Casual dress policies and open office systems are two of the most popular methods for increasing behavioral informality. These approaches appear to entail varying levels of risk for a company. Empowerment is probably the safest approach since it parallels decentralization, which research has shown can lead to faster decisions, greater employee and customer satisfaction, and significantly better financial performance when standardization is not important. The most risky approach is probably reengineering. As an organizational design tool, reengineering promises big rewards. However, it has come under severe criticism, too. The most serious complaint is that since it allows a few workers to do the work formerly done by many, reengineering is simply a corporate code word for cost cutting and worker layoffs. Likewise, for that reason, detractors claim that reengineering hurts morale and performance. Today, even reengineering gurus Hammer and Champy admit that roughly 70 percent of all reengineering projects fail because of the effects on people in the workplace. Behavioral informality probably lies somewhere in between empowerment and reengineering in terms of risk to a company. Since this approach is relatively new, there is not a lot of research evaluating its advantages and disadvantages under different circumstances. The popularity of casual dress policies and open office systems is great. For example, 84 percent of companies today have some form of casual dress code compared to 63 percent 9 years ago. Forty-two percent of all companies permit casual dress at least one day a week compared to 17 percent 5 years ago. Moreover, compared to 20 percent 7 years ago, 33 percent of companies permit casual dress every day of the week. Open office systems are receiving similar accolades from many managers, though in this case there is also some criticism. It should be noted that other management fads, such as reengineering, were extremely popular in their heyday and have since fallen from grace. Thus, the jury is still out on the risks associated with behavioral informality as an organizational design process. 6. Describe the virtual organization. Explain how the virtual organization could theoretically prove to be a more formidable competitor than any of the other types of organization in a highly complex, dynamic business environment. Answer: A virtual organization is part of a network in which many companies share skills, costs, capabilities, markets, and customers with each other. It is similar to the modular and boundaryless organizations in that it represents a mechanism for managing interorganizational processes (a collection of activities that take place among companies to transform inputs into outputs that customers value). It differs from both the modular and boundaryless organizations in that it represents a flexible network of companies, whereas the modular and boundaryless organizations manage interorganizational process through an emphasis on a single, central company. It is similar to a traditional organizational structure (such as the functional, product, customer, geographic, and matrix approaches) only in its attempt to manage process in order to transform inputs into outputs that customers value. Traditional organizational structures typically place their emphasis on mechanistic, structural considerations over process considerations. To the extent that they attempt to manage organizational process, they tend to focus on intraorganizational processes (i.e., activities taking place within the organization). The virtual organization could prove to be a more formidable competitor than any of the other types of organization in a highly complex, dynamic business environment as a result of its shared costs, expertise, flexibility, and adaptability. Competition in a highly complex, dynamic business environment will be won by the company that responds most quickly and effectively to any given threat or opportunity. The composition of the virtual organization lends itself to such response: It is always changing. Depending upon the needs of a customer (or the threats and opportunities posed by that dynamic business environment), different members of the network alliance can be called upon to solve a particular problem or provide a specific product or service. Because each member of the network alliance is the “best” at what it does, in theory, virtual organizations should provide better products and services in all respects. Their ability to share costs, and respond fast and flexibly with the highest level of creative expertise, provides them with a theoretically much greater competitive advantage than either the modular, boundaryless, or traditional organizational structures. However, this potential may or may not be realized, because of the tremendous management complexity of virtual organizations. For example, once work has been outsourced, it can be difficult to control the quality of work done by network partners. The greatest disadvantage is that it requires tremendous managerial skills to make a network of independent organizations work well together, especially since their relationships tend to be shorter and task- or project based. Two methods may be used to solve this problem. The first is to use a broker to create and assemble the knowledge, skills, and resources from different companies for outside parties, such as customers. The second is to use a virtual organization agreement that, somewhat like a contract, specifies the schedules, responsibilities, costs, and payouts to participating organizations. Test Bank for Effective Management Chuck Williams 9781285866246