MGT 3013 Chapter 8

If your boss asked you to take care of a task, productivity expert Odette Pollar says it is still OK to delegate it

FALSE

Confidential matters and issues involving discipline cannot be effectively delegated

TRUE

Corporate culture is as also known as organizational structure

FALSE

The "social glue" that binds customers to a particular firm is called organizational culture

FALSE

Organizational culture can vary widely across organizations on dimensions of treatment of employees, teamwork, and risk taking

TRUE

A formal system of task and reporting relationships that coordinate and motivate an organization’s members is known as an organizational configuration.

FALSE

A clan culture has an external focus and values flexibility rather than stability and control

FALSE

An adhocracy culture attempts to create innovative products by being adaptive, creative, and quick to respond to the environment

TRUE

A market culture has a strong external focus and values stability and control

TRUE

When Pfizer Pharmaceuticals manages failure and disappointment and helps drug researchers live for the small victories in discovering new drugs for various diseases, it is focusing on the adhocracy aspects of its culture

TRUE

A company with a formalized, structured work environment aimed at achieving efficiency, timeliness, and reliability in the creation and delivery of products has a clan culture

FALSE

Organizational culture appears as three layers: observable artifacts, token values, and foundational beliefs

FALSE

In an organization, culture exists on both visible and unobservable levels

TRUE

Allowing business-casual dress in the workplace is an example of the espoused values portion of organizational culture

FALSE

Espoused values represent the values and norms actually exhibited in the organization

FALSE

An organization’s basic assumptions are difficult to change

TRUE

For IKEA, whose vision is "to create a better life for the many," the inexpensive LACK side table would be considered a symbol

TRUE

A ritual is a narrative based on true events, which is repeated and sometimes embellished upon to emphasize a particular value of an organization

FALSE

A hero is a person whose accomplishments embody the values of the organization.

TRUE

When the National Football League annually presents the winners of the Super Bowl with rings in a ceremony, it is an example of a ritual

TRUE

The pink Cadillac that Mary Kay presents to the best salespeople of its cosmetic line is an example of an emblem

FALSE

Research shows that organizations with market cultures report higher profits and financial growth

TRUE

A good organizational culture can facilitate a low turnover rate

TRUE

Sometimes an organizational structure can be strong enough to take the place of organizational culture

FALSE

When employees are forced to adhere to an organization’s values through extensive procedures and bureaucracies, its culture is said to be weak

TRUE

The fit perspective assumes that the most effective cultures help organizations anticipate and adapt to environmental changes

FALSE

An investigation of companies with different organizational cultures showed that long-term financial performance was highest for those with an adaptive culture

TRUE

Business founders and subsequent managers primarily use power and coercion to embed the culture into the organization

FALSE

Danilo opened a new restaurant in Phoenix called El Barrancón. He wanted to be sure a culture of service and excellence was embedded in his new organization so he posted the values of the organization in the kitchen and in the dining room. Danilo is teaching his organization the culture through this action

TRUE

Sharing stories, legends, or myths are good ways to develop an organizational structure

FALSE

The type of training provided to new hires and the frequency of performance evaluations contribute to their understanding of the organization’s culture

TRUE

By definition, an organization can be composed of as few as two people

TRUE

The Red Cross is an example of a mutual-benefit organization

FALSE

Only for-profit organizations can be meaningfully represented by an organization chart

FALSE

An organization chart typically takes on a family-treelike pattern, with many boxes and lines showing official positions and reporting relationships

TRUE

The hierarchy of authority, or who reports to whom, is shown with horizontal lines on an organization chart.

FALSE

A formal vertical hierarchy shows a company’s most typical channels of communication

TRUE

Horizontally on an organizational chart are the various companies outside of the firm, such as suppliers and distributors

FALSE

As you are promoted to higher levels in an organization, you may have to actively resist isolation.

TRUE

The division of labor means that an employee should report to no more than one manager

FALSE

Hierarchy of authority is also referred to as the chain of command

TRUE

An organization is said to be flat when there are only a few levels with wide spans of control.

TRUE

An organization is said to be flat when there are only a few levels with wide spans of control.

FALSE

Director of accounting is an example of a staff position

FALSE

Staff personnel have authority functions in that they provide advice, recommendations, and research to line managers

TRUE

An advantage in using centralized authority is that there is less duplication of work, because fewer employees perform the same task

TRUE

One advantage of decentralized organizations is that procedures are uniform and thus easier to control

FALSE

The functional structure is the most typical type for small firms

FALSE

An organization with different groupings of people based on its products, customers, or geographic regions has a functional structure

FALSE

Ford Motor Co. has what is known as a divisional structure because it has different divisions for passenger car dealers, large trucking customers, and farm products customers

TRUE

If a marketing person reports to both the vice president of marketing and also to the project manager for the Ford Mustang, she works in a network organization.

FALSE

A functionally organized company can also use cross-functional teams to work on particular problems

TRUE

A hollow structure is often called a network structure

TRUE

Bombardier builds eight-passenger business jets from 12 separately sourced portions which can be put together in four days. This firm has a modular organizational structure

TRUE

The process of fitting the organization to its environment is called incidental design

FALSE

The founder of McDonald’s, Ray Kroc, intended that a Big Mac should taste the same anywhere, and accordingly, the company has many specific procedures, making it a mechanistic organization

TRUE

Companies that must respond to fast-changing customer tastes often favor a mechanistic structure to an organic one

FALSE

Lawrence and Lorsch’s term for the tendency of an organization’s parts to disperse and fragment is dissolution

FALSE

Integration is the tendency of the parts of an organization to draw together to achieve a common purpose

TRUE

The four stages of organization life cycle include birth, growth, stability, and maturity

FALSE

In general, organizations become more bureaucratic over their lifetimes

TRUE

The first stage of in an organization’s life cycle is known as the creation stage

FALSE

According to productivity expert Odette Pollar, which of the following should a manager delegate?

A. Emergencies.

B. Tasks that challenge subordinates.

C. Special tasks your boss has asked you to do.

D. Personnel matters.

E. Confidential matters.

B. Tasks that challenge subordinates.

Which of the following is a good reason to avoid delegating tasks?

A. A wish to keep subordinates from taking risks.

B. To avoid making subordinates deal with a difficult client.

C. A desire to keep an enjoyable part of the job.

D. A fear that sensitive personnel matters will not be kept private.

E. A concern that subordinates could do a better job.

D. A fear that sensitive personnel matters will not be kept private.

Which of the following is not a description of organizational culture?

A. A system of shared beliefs and values.

B. "Social glue" binding members together.

C. A system of reporting relationships.

D. An organization’s personality.

E. A system that guides the behavior of organizational members.

C. A system of reporting relationships.

The competing values framework classifies organizational cultures into which of the following?

A. Stable, flexible, and laddered cultures.

B. Observable, flexible, competitive, and driven cultures.

C. Symbolic, heroic, and basic cultures.

D. Clan, adhocracy, market, and hierarchy cultures.

E. Observable, espoused, and core cultures.

D. Clan, adhocracy, market, and hierarchy cultures.

Which type of culture has an internal focus and values stability and control over flexibility?

A. Clan

B. Adhocracy

C. Market

D. Classical

E. Hierarchy

E. Hierarchy

Kia Motors takes a very aggressive stance to fire executives who don’t meet sales goals, which makes the company an example of a(n) ______ culture.

A. clan

B. target-driven

C. adhocracy

D. market

E. hierarchy

D. market

Turnbull Software is a medium-sized but growing company that works diligently to create a supportive and familylike atmosphere for its employees. It provides superior benefits and involves employees in decisions large and small. Turnbull has a(n) ______ culture.

A. clan

B. adhocracy

C. market

D. hierarchy

E. espoused

A. clan

Digital Globe is a technology company that provides advanced, high-resolution satellite pictures of the earth, digitalized for electronic use. As the military, governments, and others demand clear pictures, Digital Globe provides them immediately with its innovative and responsive products. Digital Globe is most likely an example of a(n) ______ culture.

A. inventive

B. clan

C. adhocracy

D. market

E. hierarchy

C. adhocracy

Hard-working people at insurance giant AIG joked that "thank heavens it’s Friday because that means there are only two more working days until Monday." This is characteristic of which layer of organizational culture?

A. Enacted norms

B. Invisible artifacts

C. Symbolic culture

D. Heroic mores

E. Basic assumptions

E. Basic assumptions

Which of the following is an example of an observable artifact of organizational culture?

A. Mission statements

B. Awards ceremonies

C. Basic assumptions

D. Codes of ethics

E. Core beliefs

B. Awards ceremonies

______ values are the explicitly stated values and norms preferred by an organization.

A. Espoused

B. Inherent

C. Enacted

D. Expressed

E. Internalized

A. Espoused

Although managers may wish to affect employees with explicitly stated values, they are frequently more influenced by ______ ones.

A. subversive

B. expressed

C. espoused

D. adopted

E. enacted

E. enacted

Which of the following is not a device through which culture is typically transmitted to employees?

A. Symbols

B. Stories

C. Strategic plan

D. Heroes

E. Rites and rituals

C. Strategic plan

One of the typical devices for transmitting culture, a(n) ______ is an object, act, quality, or event that conveys meaning to others.

A. icon

B. symbol

C. sign

D. representation

E. ritual

B. symbol

Southwest Airlines employees all know about when CEO Herb Kelleher visited one of the airline’s hangars in the middle of the night in a dress with a purple boa—just to liven things up. In fact, this is part of Southwest’s history. This is an example of using a ________ to impart organizational culture.

A. myth

B. story

C. ritual

D. rite

E. value

B. story

A Ritz-Carlton beach attendant who surprised a couple with flowers, candles, and champagne for the man’s proposal was able to transmit the culture of the luxury hotel to other employees, so he would be considered a

A. champion.

B. key employee.

C. potential manager.

D. hero.

E. superior.

D. hero.

The activities and ceremonies, planned and unplanned, that celebrate important occasions and accomplishments in the organization’s life are known as

A. myths.

B. stories.

C. conventions.

D. rites and rituals.

E. values.

D. rites and rituals.

Among the functions of organizational ________ are that it gives members an organizational identity and it promotes social-system stability.

A. design

B. structure

C. life cycle

D. charting

E. culture

E. culture

Among the organizational cultures thought to enhance business performance, the ______ perspective assumes that the strength of a corporate culture is related to a firm’s long-term financial performance.

A. market

B. strength

C. fit

D. objective

E. adaptive

C. fit

In which type of culture do employees adhere to the organization’s values because they believe in its purpose?

A. Fit

B. Strategic

C. Conditional

D. Adaptive

E. Strong

E. Strong

The "HP Way" at Hewlett-Packard fostered a culture of integrity, teamwork, and innovation that complemented the high-technology industry of the time. This is an example of which perspective?

A. Strength perspective

B. Fit perspective

C. Match perspective

D. Conditional perspective

E. Adaptive perspective

B. Fit perspective

What cultural perspective assumes that the most effective cultures help organizations anticipate and adapt to environmental changes?

A. Strength perspective

B. Fit perspective

C. Adjustment perspective

D. Conditional perspective

E. Adaptive perspective

E. Adaptive perspective

Which of the following cultural perspectives leads to the highest long-term financial performance?

A. Adaptive perspective

B. Fit perspective

C. Market perspective

D. Conditional perspective

E. Strength perspective

A. Adaptive perspective

Which of the following is the way culture becomes embedded in an organization?

A. Writing a strategic plan.

B. Performing competitive analysis.

C. Using a teaching process.

D. Conducting formal market research.

E. Following legal requirements.

C. Using a teaching process.

Which of the following is not one of the mechanisms used to embed culture into an organization?

A. Slogans or sayings.

B. Accounting practices.

C. Leader reactions to crisis.

D. Titles or bonuses.

E. Organizational structure.

B. Accounting practices.

Hiromi started a new job with a growing consulting firm and was surprised to find that most employees had no job titles. A coworker explained that the founders wanted to create a level playing field, allowing motivated employees to seek leadership roles on a project-by-project basis. No job titles, here, is an example of

A. stabilizing structure.

B. measuring activities.

C. increasing accountability.

D. embedding culture.

E. reinforcing hierarchy.

D. embedding culture.

A system of consciously coordinated activities or forces of two or more people is known as a(n)

A. operation.

B. culture.

C. organization.

D. structure.

E. adhocracy.

C. organization.

Which of the following is an example of a nonprofit organization?

A. The Humane Society

B. American Medical Association

C. The Democratic party

D. State Farm Insurance

E. Teamsters Union

A. The Humane Society

Goodwill Industries, a charity that provides training and employment services to the disabled, is which type of organization?

A. Clan

B. For-profit

C. Mutual-benefit

D. Nonprofit

E. Market

D. Nonprofit

Which of the following can be classified as a mutual-benefit organization?

A. Trade association

B. Hospital

C. Financial company

D. Retail company

E. College

A. Trade association

Which of the following is an example of a mutual-benefit organization?

A. Federal Bureau of Investigation

B. United Steelworkers of America union

C. University of California at Berkeley

D. U.S. Postal Service

E. Public Broadcasting System

B. United Steelworkers of America union

Another term for the chain of command within an organization, as represented on an organizational chart, is

A. reporting linkage.

B. span of control.

C. horizontal specialization.

D. vertical hierarchy.

E. network structure.

D. vertical hierarchy.

Which of the following statements is good advice for those transitioning upward in an organization?

A. Don’t try to manage upward or sideways.

B. Invent your own kind of management style.

C. Maintain good relationships with other departments.

D. Enjoy the solitude of upper management positions.

E. Focus on the rights and privileges of your new job.

C. Maintain good relationships with other departments.

The arrangement of having discrete parts of a task done by different people is called an organization’s

A. coordinated effort.

B. division of labor.

C. span of control.

D. chain of command.

E. matrix structure.

B. division of labor.

An organization’s ______ is a control mechanism for making sure the right people do the right things at the right time.

A. central command

B. division of labor

C. hierarchy of authority

D. span of control

E. strategic plan

C. hierarchy of authority

Elizabeth works with the gaming production team at her job, so the leader of that group often assigns her work, but she also has a boss in the marketing department. Which of the following is most likely true?

A. There is likely to be a lack of common purpose among her managers.

B. Her workplace has too much division of labor.

C. Her work arrangement violates the unity of command principle.

D. Because of her cross-functional team, her work can be done without coordinated effort.

E. Her production team leader has too wide a span of control.

C. Her work arrangement violates the unity of command principle.

A supervisor of an assembly line has 45 employees that report to her; this would be considered a(n) ______ span of control.

A. unsustainable

B. tall

C. deep

D. complex

E. wide

E. wide

When managers must be closely involved with their subordinates, they should have a ______ span of control.

A. flexible

B. wide

C. flat

D. narrow

E. lean

D. narrow

__________ means that managers must report and justify work results to managers above them.

A. Liability

B. Accountability

C. Delegation

D. Hierarchical control

E. Position power

B. Accountability

The obligation you have to perform the tasks assigned to you is called

A. responsibility.

B. accountability.

C. delegation.

D. authority.

A. responsibility.

Good job design requires matching the level of responsibility to the level of

A. liability.

B. dependability.

C. delegation.

D. authority.

E. position power.

D. authority.

The process of assigning meaningful authority and responsibility to managers and employees lower in the hierarchy is called

A. designation.

B. accountability.

C. delegation.

D. execution.

E. allocation.

C. delegation.

Jennifer’s staff enjoys working for her but thinks she is a perfectionist. She often thinks that she is the only one who can handle her division’s difficult clients or handle some of the most sensitive issues, so she frequently has problems with

A. responsibility.

B. allocation.

C. accountability.

D. authority.

E. delegation.

E. delegation

On an organizational chart, a dotted line typically indicates a(n)

A. outside company.

B. line position.

C. staff position.

D. temporary employee.

E. nonmanagerial employee.

C. staff position.

At Caldwell Organic Grocers, all purchasing, hiring, and production decisions are made by top management. Caldwell has ______ authority.

A. classical

B. wide

C. centralized

D. for-profit

E. matrix

C. centralized

Which of the following is a consequence of decentralized authority?

A. Greater uniformity

B. Decreased efficiency

C. Greater flexibility

D. Slower decisions

E. Decreased duplication of work

C. Greater flexibility

Organizational ________ is concerned with devising the optimal structures of accountability and responsibility that an organization uses to execute its strategies.

A. design

B. structure

C. life cycle

D. charting

E. culture

A. design

Which of the following is a characteristic of a simple structure?

A. Comprehensive set of rules.

B. Centralized authority.

C. High work specialization.

D. Extensive division of labor.

E. Tall hierarchy.

B. Centralized authority.

In a functional structure, people with ______ are grouped together.

A. similar levels of authority

B. temporary jobs on the same project

C. similar occupational specialties

D. jobs related to similar products

E. jobs in the same geographic region

C. similar occupational specialties

Among the jobs titles at Greensboro Regional Hospital are Chief of Medical Services, Director of Administrative Services, and Director of Outpatient Services. Greensboro has a ______ structure.

A. functional

B. network

C. simple

D. divisional

E. matrix

A. functional

_______ group activities around similar products or services.

A. Output structures

B. Matrix organizations

C. Offering divisions

D. Functional structures

E. Product divisions

E. Product divisions

The Federal Reserve Bank has 12 separate districts around the United States, which means it is using ______ in its organizational structure.

A. functional constituencies

B. locality divisions

C. site networks

D. geographic divisions

E. matrix regions

D. geographic divisions

Durant Security operates across Florida and Georgia with a variety of products and services. It has a unit located in Tampa that provides home security to its clients, and another unit in Atlanta that provides security for businesses, in particular banks and high-technology firms. This is a ______ structure.

A. functional

B. simple

C. geographic divisional

D. matrix

E. customer divisional

E. customer divisional

An organization that contains two command structures, and in which some people actually report to two bosses, is a ______ structure.

A. matrix

B. bifunctional

C. team-based

D. hybrid

E. network

A. matrix

Arnos Engineering has a functional structure throughout the company but also has a second chain of command based on the part of the United States where one works. This organization has a ______ structure.

A. bifunctional

B. hybrid

C. network

D. matrix

E. team-based

D. matrix

Galen is temporarily working with a group with membership from different departments in his company on a special project, yet he still has all of responsibilities of his regular job and still reports to the same manager. This is an example of

A. matrix structure.

B. work dispersion.

C. horizontal design.

D. hybrid workgroups.

E. network clustering.

C. horizontal design.

Hollow, modular, and virtual structures lead to a ________ organization.

A. functional

B. network

C. simplistic

D. boundaryless

E. matrix

D. boundaryless

With a ______ structure, the organization has a central core of key functions and outsources others to vendors who can do them cheaper or faster.

A. hollow

B. matrix

C. spine

D. hybrid

E. mechanistic

A. hollow

In a ______ structure, a firm assembles portions of product provided by outside contractors.

A. compilation

B. network

C. outsourced

D. modular

E. hollow

D. modular

Public relations firm Crowley Communications has a single full-time employee, Jolene Crowley, who is in charge of contracting teams to work on projects as needed. Teams are spread throughout the United States and are made up of specialists linked by computers and telecommunications equipment. This is an example of a(n) ________ organization.

A. virtual

B. network

C. outsourced

D. modular

E. hollow

A. virtual

Rashid has examined the environment in which his organization operates and has determined that currently the market demands an organic and integrated structure. Rashid did this as part of his

A. environmental analysis.

B. contingency design.

C. life-cycle analysis.

D. diversification plan.

E. integration plan.

B. contingency design.

In a mechanistic organization,

A. most communication is informal.

B. many teams and task forces are operating simultaneously.

C. authority is decentralized.

D. tasks and rules are clearly specified.

E. employees are joined through technology.

D. tasks and rules are clearly specified.

Rorschach Composites has precise requirements and very detailed procedures for creating small machine parts through an injection molding process. Because of the sensitive processes, employees are tightly monitored. Rorschach is a(n) ______ organization.

A. hybrid

B. integrated

C. mechanistic

D. flat

E. organic

C. mechanistic

In an organic organization,

A. authority is centralized.

B. bureaucracy is essential.

C. the need to respond to unexpected tasks is common.

D. many rules and procedures exist.

E. success is possible only when the environment is stable.
In an organic organization, authority is decentralized, there are fewer rules and procedure

C. the need to respond to unexpected tasks is common.

Information-technology companies such as Motorola favor a(n) ______ structure because they constantly have to adjust to technological change.

A. mechanistic

B. bureaucratic

C. formalized

D. organic

E. tall

D. organic

Montpellier Mediterranean Designs has decided that, as part of the fashion industry, it should move to a more organic structure. Montpellier should

A. simplify and eliminate rules and procedures.

B. centralize authority.

C. clearly define job responsibilities.

D. disband teams and task forces.

E. focus on improving uniformity.

A. simplify and eliminate rules and procedures.

According to Lawrence and Lorsch, the ______ determine(s) the degree of differentiation or integration that is appropriate.

A. resources available to an organization

B. governmental pressures on an organization

C. organization’s culture

D. stability of an organization’s environment

E. size of the organization

D. stability of an organization’s environment

Technical specialization and division of labor in an organization lead to ________ in an organization.

A. bureaucracy

B. differentiation

C. integration

D. conglomeration

E. decentralization

B. differentiation

Fonseca Construction Supply has product divisions for lumber, hardware, electrical supplies, and plumbing supplies. Each has its own production facility and sales staff. Fonseca is

A. tightly integrated.

B. bureaucratic.

C. functionally organized.

D. a matrix organization.

E. highly differentiated.

E. highly differentiated.

A formal chain of command, standardization of rules and procedures, and use of cross-functional teams enhance an organization’s

A. assimilation.

B. differentiation.

C. integration.

D. decentralization.

E. centralization.

C. integration.

At Harvestar Farm Equipment, specialists from marketing, manufacturing, and engineering departments work closely together in cross-functional teams on new professional planting and harvesting equipment designs. Harvestar is an example of a ______ organization.

A. highly differentiated

B. centralized

C. highly integrated

D. mechanistic

E. bureaucratic

C. highly integrated

Management at the De la Garza Recreational Products has recognized that the firm is much slower than the competition at getting new designs to market. The problem seems to stem from coordination problems between the various functional departments involved in the recreational vehicle design process. De la Garza should

A. improve technical training for employees.

B. formalize the division of labor.

C. relax its rules and procedures.

D. create cross-functional teams for development.

E. cancel all social events for employees.

D. create cross-functional teams for development.

As an organization goes through the stages of the life cycle, it becomes more

A. informal.

B. centralized.

C. unstable.

D. organic.

E. bureaucratic.

E. bureaucratic.

Which of the following is a stage in the life of an organization?

A. Birth

B. Decline

C. Elderly

D. Introduction

E. Growth

A. Birth

Katsuro started a tax consulting business with his friend Carey. They have a small space in a strip mall and one administrative assistant. At which stage of the organizational life cycle is their business?

A. Birth stage

B. Introduction stage

C. Adolescent stage

D. Youth stage

E. Midlife stage

A. Birth stage

In what stage of the organizational life cycle does a firm increase its hiring, create some division of labor, and begin setting rules?

A. Midlife

B. Maturity

C. Youth

D. Growth

E. Birth

C. Youth

At which stage of the organizational life cycles does lack of flexibility and innovation become the danger to the business?

A. Adult stage

B. Birth stage

C. Maturity stage

D. Adolescent stage

E. Youth stage

C. Maturity stage

Xerox Corporation is currently in what stage of its organizational life cycle?

A. Decline stage

B. Maturity stage

C. Adolescent stage

D. Youth stage

E. Adult stage

B. Maturity stage

Define the four types of organization in the competing values framework, and describe the characteristics of each.

According to the competing values framework, organizational cultures can be classified into four types: (1) clan, (2) adhocracy, (3) market, and (4) hierarchy (see Figure 8.2). A clan culture has an internal focus and values flexibility rather than stability and control. Like a family-type organization, it encourages collaboration among employees, striving to encourage cohesion through consensus and job satisfaction through employee involvement. An adhocracy culture has an external focus and values flexibility. This type of culture attempts to create innovative products by being adaptable, creative, and quick to respond to changes in the marketplace. Employees are encouraged to take risks and experiment with new ways of getting things done. A market culture has a strong external focus and values stability and control. Because market cultures are focused on the external environment and driven by competition and a strong desire to deliver results, customers, productivity, and profits take precedence over employee development and satisfaction. A hierarchy culture has an internal focus and values stability and control over flexibility. Companies with this kind of culture are apt to have a formalized, structured work environment aimed at achieving effectiveness through a variety of control mechanisms that measure efficiency, timeliness, and reliability in the creation and delivery of products.

Define organizational culture, and explain three layers in which it appears. Choose an organization with which you have some experience (for example, an employer, one of your schools, your church, a club) and use it to illustrate the layers of culture

The student should first define organizational culture and then provide examples for the visible and invisible levels of culture of the organization he or she chooses. Organizational culture is the system of shared beliefs and values that develops within an organization and guides the behavior of its members. Organizational culture appears as three layers: (1) observable artifacts, (2) espoused values, and (3) basic assumptions. Each level varies in terms of outward visibility and resistance to change, and each level influences another level. At the most visible level, organizational culture is expressed in observable artifacts—physical manifestations such as manner of dress, awards, myths, and stories about the company, rituals and ceremonies, and decorations, as well as visible behavior exhibited by managers and employees. Espoused values are the explicitly stated values and norms preferred by an organization, as may be put forth by the firm’s founder or top managers. Basic assumptions, which are not observable, represent the core values of an organization’s culture—those that are taken for granted and, as a result, are difficult to change.

Why is it important for a manager to understand organizational culture? What functions does organizational culture serve?

t is important for a manager to understand organizational culture for two reasons: culture can powerfully shape an organization’s long-term success, and culture can serve as a control mechanism, substituting for organizational structure. An organization’s culture has four functions: It gives members organizational identity. It facilitates collective commitment. It promotes social-system stability. It shapes behavior by helping employees make sense of their surroundings.

Explain the three perspectives of organizational culture that may enhance economic performance. Which perspective was found to provide the highest level of long-term financial performance?

Strength, fit, and adaptive culture may enhance economic performance. The strength perspective assumes that the strength of a corporate culture is related to a firm’s long-term financial performance. The fit perspective assumes that an organization’s culture must align, or fit, with its business or strategic context. A correct fit is expected to foster higher financial performance. The adaptive perspective assumes that the most effective cultures help organizations anticipate and adapt to environmental changes. An investigation of 207 companies from 22 industries during the years 1977-1988 partly supported the strength and fit perspectives. However, findings were completely consistent with the adaptive perspective. Long-term financial performance was highest for organizations with an adaptive culture.

Give five examples of mechanisms used by organizations to embed its culture

Those who found a business, and the managers who follow them, essentially use a teaching process to embed the values, beliefs, expectations, behaviors, and business philosophy that constitute the organization’s culture. Among the mechanisms used are the following: Formal Statements: The first way to embed preferred culture is through the use of formal statements of organizational philosophy, mission, vision, and values, as well as materials used for recruiting, selecting, and socializing employees. Slogans & Sayings: The desirable corporate culture can be expressed in language, slogans, sayings, and acronyms. Stories, Legends, & Myths: These can illustrate values. Leader Reactions to Crises: How top managers respond to critical incidents and organizational crises sends a clear cultural message. Role Modeling, Training, & Coaching: They illustrate goals and values. Physical Design of workplaces is often complementary to the culture. Rewards, Titles, Promotions, & Bonuses: These demonstrate what is valued. Organizational Goals & Performance Criteria: Many organizations establish organizational goals and criteria for recruiting, selecting, developing, promoting, dismissing, and retiring people, all of which reinforce the desired organizational culture. Measurable & Controllable Activities: An organization’s leaders can pay attention to, measure, and control a number of activities, processes, or outcomes that can foster a certain culture. Organizational Structure: The hierarchical structure found in most traditional organizations is more likely to reinforce a culture oriented toward control and authority compared with the flatter organization that eliminates management layers in favor of giving employees more power. Organizational Systems & Procedures: Companies are increasingly using electronic networks to increase collaboration among employees, to increase innovation, quality, and efficiency.

Describe the typical organization chart. What is a horizontal relationship compared to a vertical one? A solid line versus a dotted one?

An organization chart is a box-and-lines illustration showing the formal lines of authority and the organization’s official positions or work specializations (see Figure 8.4). Two kinds of information that organization charts reveal about organizational structure are (1) the vertical hierarchy of authority—who reports to whom, and (2) the horizontal specialization—who specializes in what work. Line positions (authority to make decisions) are indicated on the organization chart by a solid line (usually a vertical line). Staff positions (authority functions that provide advice, recommendations, and research) are indicated on the organization chart by a dotted line (usually a horizontal line).

Explain the four common elements of organizations proposed by Edgar Schein

Organizational psychologist Edgar Schein proposed the four common elements of (1) common purpose, (2) coordinated effort, (3) division of labor, and (4) hierarchy of authority. The common purpose unifies employees or members and gives everyone an understanding of the organization’s reason for being. The common purpose is realized through coordinated effort, the coordination of individual efforts into a group or organizationwide effort. Division of labor, also known as work specialization, is the arrangement of having discrete parts of a task done by different people. The hierarchy of authority, or chain of command, is a control mechanism for making sure the right people do the right things at the right time.

Explain what centralization and decentralization of authority mean. Would you rather be a manager in a centralized or a decentralized organization? Why?

The student should define both terms and then give a logical explanation of their preference. With centralized authority, important decisions are made by higher-level managers; while with decentralized authority, important decisions are made by middle-and supervisory-level managers. An advantage in using centralized authority is that there is less duplication of work, because fewer employees perform the same task; rather, the task is often performed by a department of specialists. Another advantage of centralization is that procedures are uniform and thus easier to control; all purchasing, for example, may have to be put out to competitive bids. An advantage in having decentralized authority is that managers are encouraged to solve their own problems rather than to buck the decision to a higher level. In addition, decisions are made more quickly, which increases the organization’s flexibility and efficiency.

Explain what a matrix structure is, and draw an organization chart that depicts a matrix (including appropriate job titles). Explain what you think it would be like to be a manager in a matrix organization

The student should explain the matrix structure, draw a chart similar to the one shown in the text, and give his or her opinion of working in a matrix. In a matrix structure, an organization combines functional and divisional chains of command in a grid so that there are two command structures, vertical and horizontal. The functional structure usually doesn’t change It is the organization’s normal departments or divisions, such as finance, marketing, production, and R&D. The divisional structure may vary, as by product, brand, customer, or geographic region. One of the difficulties of the matrix is reporting to two managers who may have different priorities, or as a manager, to compete with another manager for an employee’s services. This is a violation of the unity of command principle. For an example of a drawing of a matrix organization, see Figure 8.9 (students may vary labels, but should still show a similar matrix reporting structure).

Describe the boundaryless organization and three organizational structures that are common forms of it.

The opposite of a bureaucracy, with its numerous barriers and divisions, a boundaryless organization is a fluid, highly adaptive organization whose members, linked by information technology, come together to collaborate on common tasks. The collaborators may include not only coworkers but also suppliers, customers, and even competitors. This means that the form of the business is ever-changing, and business relationships are informal. Three types of structures in this class of organizational design are hollow, modular, and virtual structures. In the hollow structure, often called the network structure, the organization has a central core of key functions and outsources other functions to vendors who can do them cheaper or faster. The modular structure differs from the hollow structure in that it is oriented around outsourcing certain pieces of a product rather than outsourcing certain processes (such as human resources or warehousing) of an organization. In a modular structure, a firm assembles product chunks, or modules, provided by outside contractors. One consequence of the Internet is the virtual organization, an organization whose members are geographically apart, usually working with e-mail, collaborative computing, and other computer connections, while often appearing to customers and others to be a single, unified organization with a real physical location

Explain the concepts of mechanistic and organic organizations. What kind of organization should be in place when an organization’s environment is changing quickly and unpredictably?

Mechanistic organizations are characterized by: centralized authority, many rules and procedures, specialized tasks, formalized communication, few teams or task forces, narrow spans of control, and taller structures. Organic organizations are characterized by: decentralization of authority, few rules and procedures, shared tasks, informal communication, many teams and task forces, wider span of control, and flatter structures. For a changing environment, organizations are best served by an organic structure, which is more flexible and can react more quickly as needed