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Organizing a business begins with:
A. acquiring the necessary resources.
B. choosing the best qualified employees.
C. developing an efficient plan of action.
D. determining the work to be done.
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D
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Dividing the required work among a group of employees is called:
A. departmentalization.
B. delegation of responsibility.
C. division of labor.
D. separation of control.
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C
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Dividing tasks into smaller jobs is called:
A. job enrichment.
B. job specialization.
C. departmentalization.
D. division of authority.
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B
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The process of setting up individual functional units of the business to do specialized tasks is called:
A. departmentalization.
B. division of labor.
C. job specialization.
D. delegation of authority.
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A
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Job specialization is known to:
A. minimize delegated authority and responsibility.
B. improve job performance.
C. create work teams and improve resource allocation.
D. establish procedures.
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B
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Which of the following is an example of a move to reorganize?
A. Reducing the labor force within your business
B. Revising plans by creating contingency plans
C. Managing by objectives and clearing pathways for success
D. Developing a way to monitor financial success
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A
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The proven success of job specialization lies in the fact that:
A. it leads to groupthink.
B. it avoids the pitfalls of division of labor, where workers become removed from thinking conceptually about the business.
C. it is a detractor to others who are thinking about entering your industry because it successfully creates barriers to entry.
D. it adds efficiency to the business’s operation by identifying tasks that some do better than others.
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D
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In the Making Ethical Decisions box titled "Would You Sacrifice Safety for Profit?" which of the following statements best expresses the theme of the discussion?
A. In the beginning, company procedures that require value judgments are often too costly. As the business grows, the owner can add ethical procedures to each job.
B. The principles of organization state that the only company objective is to gain profits for the owner(s) or stockholders. If your competitors are cutting corners with safety regulations, you should consider the same.
C. The only way to be profitable is to avoid risk. If new safety equipment becomes available that is applicable to your business, even if it slows productivity, you should adopt it.
D. The corporate culture you create as you begin your service will last a long time. Your workers will adopt your values.
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D
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As Brett prepares to open his new business, he has identified the tasks that need to be accomplished and has assigned employees to each task. This illustrates:
A. management departmentalization.
B. division of labor.
C. specialization of priorities.
D. mass production economies.
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B
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As your good friend ponders putting some structure to his/her graphic design business idea, which of the following do you not advise him/her to do?
A. Prepare the nonchangeable marketing plan for the next three years, including marketing analysis and marketing strategy.
B. List the work that needs to be done such as (1) computer-assisted design; (2) sales generation; (3) accounting and bookkeeping; (4) purchasing and supply ordering; and so on.
C. List who will do the various jobs, including who will perform the computer work, who will keep the books, and who will go out and create sales.
D. Assign responsibility and authority to certain employees.
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A
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The concept of ____________ suggests that as a firm produces more, the average cost of goods produced goes down.
A. natural growth
B. survival of the fittest
C. cost enhancement
D. economies of scale
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D
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Henri Fayol and Max Weber are best known for their contributions to:
A. production theory.
B. marketing theory.
C. organization theory.
D. finance theory.
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C
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Organization theorists emerged during the era of mass production, meaning:
A. the development of ways to produce a large quantity of product efficiently.
B. the development of ways to purchase raw materials in bulk.
C. the decline in the cost of production due to an increase in the cottage industry.
D. the era when most companies adopted very similar methods of producing goods and services, which led to standardization of organizational design.
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A
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Fayol’s _____________ principle states that each worker should report to one, and only one, boss.
A. division of labor
B. unity of command
C. esprit de corps
D. comparative advantage
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B
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Fayol’s ____________ principle says that tasks should be divided into areas of specialization.
A. departmentalization
B. comparative advantage
C. division of labor
D. centralization
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C
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Fayol’s ____________ principle says that workers’ attitudes can create an environment of pride and loyalty within an organization.
A. esprit de corps
B. hierarchy of loyalty
C. unity of command
D. equity
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A
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__________ believed that managers were trustworthy and companies would do well if employees simply did what they were told.
A. John Keynes
B. Adam Smith
C. Peter Drucker
D. Max Weber
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D
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Max Weber used the term ________ to describe middle managers whose job was to implement the orders of top management.
A. management
B. autocrats
C. staff personnel
D. bureaucrats
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D
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A(n) ________________ is a visual device which shows relationships among people and divides the organization’s work.
A. organization chart
B. Venn diagram
C. corporate tree
D. Gantt chart
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A
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In Weber’s view of a bureaucratic organization, the role of top management is to:
A. empower workers and enable them to quickly respond to customer wants.
B. make decisions.
C. develop the rules and procedures needed to carry out the plans of bureaucrats.
D. directly supervise front-line employees to better control operations.
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B
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In Weber’s view of a bureaucratic organization, the organization demands:
A. a spirit of pride and loyalty among the workers.
B. cross-functional teams.
C. clearly established rules and guidelines that to be precisely followed.
D. self-managed teams.
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C
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The line of authority that moves from the top of a hierarchy to the lowest level is called the:
A. chain of logic.
B. chain of command.
C. organizational design.
D. delegation of contingent authority.
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B
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A(n) __________ consists of one person at the top of the organization and many levels of managers who are responsible to that person.
A. hierarchy
B. oligarchy
C. inverted organization
D. informal organization
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A
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A(n) __________ is used by an organization to show who is accountable for the completion of specific work and who reports to whom.
A. balance sheet
B. Venn diagram
C. stakeholder outline
D. organization chart
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D
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In a bureaucratic organization:
A. departments communicate with each other on a regular basis.
B. employees follow strict rules and regulations.
C. customer satisfaction is the number one priority.
D. first-line workers are empowered to respond to the needs of customers.
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B
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One advantage of a bureaucratic organization is that:
A. it is very responsive to the wants and needs of customers.
B. there are very few layers of management.
C. it encourages cooperation among different departments within the organization.
D. employees know they are expected to follow the rules and regulations.
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D
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______________ organizations are characterized of many layers of management and function with well-defined rules and procedures.
A. Matrix
B. Inverted
C. Ordered
D. Bureaucratic
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D
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Economies of scale:
A. are available to small firms but not to large firms due to management inefficiencies.
B. are achieved when a firm reduces its average cost of production as it produces more.
C. can be avoided by purchasing supplies and raw materials in large quantities.
D. help explain the success of small businesses.
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B
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Max Weber favored which of the following?
A. Inverted organizations
B. Worker participation in decision making
C. Staffing and promotions based on qualifications
D. Flat organizations
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C
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Fayol believed that decision-making authority should remain in the hands of top management:
A. in small organizations, but should be delegated to middle and first-line managers in large organizations.
B. in large organizations, but could be delegated to middle and first-line managers in small organizations.
C. in all types and sizes of organizations.
D. only in organizations subjected to significant government regulation.
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A
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Which of the following statements explains the unity of command principle of management?
A. All workers must share the same goal.
B. Every firm has one strong leader, and everyone should support that individual.
C. Workers can become frustrated and confused if they have more than one boss.
D. All authority should rest with top management, since only top managers carry the responsibility of bad decisions.
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C
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If companies follow the theories of Fayol and Weber, which of the following scenarios is likely to result?
A. Organization design will benefit by the emergence of quick decision making.
B. Organization design will eliminate systems of hierarchy and chains of command due to their hindrance of esprit de corps.
C. Organizations that grow will develop several layers of management and the time that it takes to make and carry out a decision will increase.
D. There will be a significant reduction of workforce due to specialization and departmentalization.
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C
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Which of the following statements most closely identifies the problem with adopting Fayol’s principles of organization design for contemporary businesses?
A. Leaving some decision-making power to middle management has the effect of minimizing the effort and results that management would put into the other historical principles of organization.
B. The rule making that develops from these principles creates organizations that don’t respond quickly to customer needs.
C. The principles of Fayol and Weber hamper a firm’s ability to determine if it is profitable.
D. Authority and responsibility quickly become unrelated.
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B
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Campbell is a middle manager for a bureaucratic organization. According to Max Weber’s views on bureaucratic organizations, Campbell’s function within the organization is to:
A. make key operating decisions.
B. evaluate the daily performance of first-line employees.
C. ensure the organization achieves esprit de corps.
D. implement the decisions of top management.
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D
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At Green Acres Fencing Company, eight employees perform various aspects of the company’s work. One person does sales; four perform installation; one purchases materials; one does billing; one performs after-sales inspections. This type of organization reflects Fayol’s principle of:
A. division of labor.
B. equity.
C. unity of command.
D. hierarchy of authority.
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A
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Sarah is a designer for a business that installs underground sprinkler systems for residential and commercial customers. Tom and Bill share the ownership responsibilities of the business. Tom is in charge of commercial accounts and Bill is in charge of residential accounts. Sometimes Tom and Bill double book Sarah’s time, creating frustration and animosity. Since they share supervisory responsibility, there is no clear way to decide whose accounts are most important. This type of situation represents a violation of Fayol’s ____________ principle.
A. division of labor
B. clarity of objective
C. priority of assignment
D. unity of command
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D
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Bill, a financial manager at Carlyle Bank and Trust, always strives to treat each subordinate with respect and fairness. Bill’s treatment of employees is an example of Fayol’s principle of:
A. unity of command.
B. equity.
C. empowerment.
D. order.
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B
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John recently accepted a job in the marketing department with the Burbank Bagel Boys. After just a few days on the job, John learned that the company has many layers of management, and seems to have a rule to cover almost every situation. These conditions suggest that Burbank Bagel Boys is a(n):
A. cross-functional organization.
B. decentralized organization.
C. oligopolistic organization.
D. bureaucratic organization.
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D
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When Brian started his auto mechanic shop, his business plan included a(n) _______________ that showed the relationships among employees in his organization and the lines of authority and responsibility.
A. business view map
B. department categorization
C. organization chart
D. operating matrix grid
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C
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Fairview Community College is a multi-district college with four campuses. Each campus has one president, two vice presidents, five deans, 12 department chairs, over 100 faculty members, and several persons in support roles. The presidents from each campus report to four vice chancellors and the vice chancellors report to the chancellor. It is clear that Fairview has a well-defined _____________.
A. channel of academic culture
B. chain of command
C. responsibility environment
D. bureaucratic reallocation
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B
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Andrew’s company is a bureaucratic organization. Andrew is likely to encounter which of the following conditions?
A. Real time decisions
B. Cross-functional teams
C. Empowerment of first-line employees to better serve customers
D. Many layers of management
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D
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The management at Patriot Mills works hard to ensure that no one in its organization has more than one boss and all workers are treated with fairness and respect. Additionally, the firm divides the work into areas of specialization so that everyone knows to whom they should report. The management of Patriot Mills reflects the ideas and principles of:
A. John M. Keynes.
B. Peter Drucker.
C. Karl Marx.
D. Henri Fayol.
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D
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As a manager of a retail-clothing store, Lance favors detailed job descriptions, formal rules and regulations, detailed records, and standardized procedures. He also believes that staffing and promotion decisions should be based strictly on the qualifications of the people under consideration. Lance’s attitudes suggest that he is strongly influenced by the ideas of:
A. Ralph Nader.
B. Max Weber.
C. Karl Marx.
D. Adam Smith.
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B
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Which of the following statements would best summarize Max Weber’s views on the role of workers in an organization?
A. Workers should be empowered to do whatever it takes to satisfy the needs of customers.
B. Workers will be promoted within the organization depending upon "who they know," rather than "what they know."
C. Workers should simply follow well-defined procedures.
D. Although top managers must ultimately make the decisions, workers are an important creative resource for a firm, and top management should listen to their ideas.
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C
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Which of the following determines the degree of decentralization of a firm?
A. The degree to which lower-level management is empowered to make decisions.
B. The chain of command used to follow the flow of authority from top of the hierarchy to the lowest levels.
C. The geographical area served by the firm’s operations.
D. The degree of product standardization desired by the marketplace.
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A
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In a(n) _____________ organization, decision-making authority is concentrated at the top level of management.
A. bottom-up
B. decentralized
C. inverted
D. centralized
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D
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_______________ means that decision-making authority is delegated to lower-level managers and employees.
A. Uniformity of authority
B. Decentralized authority
C. Specification of authority
D. Standardized authority
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B
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The optimum number of subordinates a manager can supervise is referred to as the:
A. manager-subordinate ratio.
B. chain of command.
C. employee quota.
D. span of control.
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D
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The span of control for a manager:
A. should never exceed 7 subordinates.
B. is no longer a relevant issue in today’s computerized offices.
C. depends on a number of factors, and can vary from one manager to another.
D. varies somewhat from manager to manager, but most managers operate best with a span of control of about 9 employees.
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C
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Due to more emphasis on empowerment and more talented and better-educated lower-level management, span of control in organizations has ___________.
A. increased
B. decreased
C. become an obsolete term in organization design
D. led to tall organizations
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A
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