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Exam 8: Structuring Organizations for Todays Challenges

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Question 31

True/False

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Technology, like the Internet, has opened up opportunities for firms to sell to new markets.

A) True
B) False

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Question 32

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Which of the following is an advantage of a matrix organization structure?

A) It is much cheaper to staff than other organization models.
B) It provides for efficient use of organizational resources.
C) The project teams are permanent.
D) It is a complex organization structure.

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

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Question 33

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Mini-Case Angelica Canizales is the CEO of Mucho Dinero Enterprises. Sales have dropped for four consecutive years and accountants have reported net losses in each of the last two years. Employees appear discouraged and frustrated. Recently, Angelica met with managers from marketing, production, and finance to listen to their views regarding the company's problems. The managers unanimously agreed that the main problem was a lack of communication among the several functional areas of the business. Each manager felt that the firm could increase quality and customer satisfaction with better interdepartmental communication. Angelica also met with marketing and production employees to get their respective opinions on the problems of the firm. One employee from the production department observed, "We have so many layers of management that it takes forever to make decisions." An employee from marketing complained, "This place is so bogged down with rules and regulations that there is no opportunity to be creative." Several employees shared their opinions regarding their bosses. Specifically, one employee said, "My boss never pays attention to my ideas. He just issues orders and expects me to obey them." Angelica decided, after listening to many comments from managers and employees and also suppliers and customers, that the only way to end Mucho Dinero's slide was to completely rethink the firm's structure and to make radical changes in its organization. She presented her ideas to the board of directors, promising to voluntarily resign if her efforts to reorganize did not return the firm to profitability. -In order to encourage more interdepartmental communication and cooperation, Angelica is thinking about setting up groups of workers from different departments to work together on a long-term basis. She is even thinking about asking people from some of Mucho Dinero's suppliers, customers, and distributors to join these groups. The type of group that Angelica is considering is known as a(n)

Improvements in information technology have permitted companies to increase their span of control.

Weber believed that employees should be empowered to make their own decisions.

As a result of rapidly changing markets and global differences in consumer tastes, more firms are considering centralized authority.

The basic idea behind the organization design of Fayol and Weber was that management wanted to control workers.

Jacob was temporarily assigned to work with a team of specialists from various departments to develop a new product, though his usual home is in the engineering department. After the project is completed, Joel will return to his regular position in the engineering department. This arrangement illustrates the use of a cross-functional team.

Transparency describes the relationship between a firm and its stockholders.

Which of the following statements would best summarize Max Weber's views on the role of workers in an organization?

Weber believed that large organizations required everyone to follow the established rules and guidelines precisely.

Which of the following describes a group of employees from different departments working together on a long-term basis?

At Better Neighbors Fencing, ten employees perform various aspects of the company's work. Two people are in sales; four perform installation; one purchases materials; one does billing; two perform after-sales inspections. This type of organization reflects Fayol's principle of

Fayol's principle of esprit de corps says that employees should be divided into small groups that can be directed efficiently by a single manager.

Max Weber believed that promotion should be based solely on seniority.

In today's competitive environment, cost containment is extremely important to survival. Which of the following increases efficiency in the production and distribution of goods?

The informal organization is best suited for decision making on big issues.

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

A(n) ________ is used by an organization to show who is accountable for the completion of specific work and who reports to whom.

Companies have learned that working transparently through real-time networks has provided competitive advantages in the marketplace.