. Organization design:
a.
encompasses larger elements that influence structural dimensions, including the organization’s size, technology, environment, culture, and goals.
b.
gives us the tools to evaluate and understand how and why some organizations grow and succeed while others do not.
c.
obtains inputs from the external environment, adds value through a transformation process, and discharges products and services back to the environment.
d.
provides labels to describe the internal characteristics of an organization.
ANSWER:
b
RATIONALE:
Feedback: Organization design gives us the tools to evaluate and understand how and why some organizations grow and succeed while others do not. It helps us explain what happened in the past, as well as what might happen in the future, so that we can manage organizations more effectively.
POINTS:
1
LEARNING OBJECTIVES:
ORGT.DAFT.16.01-03 - 01-03
NATIONAL STANDARDS:
United States - AACSB: Analytic
TOPICS:
Organization Design in Action
KEYWORDS:
Bloom’s: Understand
2. _____ refers to economic development that generates wealth and meets the needs of the current generation while saving the environment so future generations can meet their needs as well.
Centralization
Formalization
Contingency
Sustainability
d
Feedback: Many companies are embracing the philosophy of sustainability, which refers to economic development that generates wealth and meets the needs of the current generation while saving the environment so future generations can meet their needs as well.
ORGT.DAFT.16.01-02 - 01-02
3. Pendant Inc., a retail chain based in England, has implemented an energy-efficient trucking fleet. It is increasing its use of green materials in buildings, and aims to dispose all the waste of the company by 2025. Which of the following measures is Pendant Inc. focusing its efforts on?
Going green
Scientific management
a
Feedback: Pendant Inc. is focusing its efforts on going green. Going green has become a new business imperative, driven by shifting social attitudes, new government policies, climate changes, and the information technology that quickly spreads news of a corporation’s negative impact on the environment.
United States - AACSB: Reflective Thinking
Bloom’s: Apply
4. _____ refers to technologies, skills, and processes for searching and examining massive sets of data to uncover hidden patterns and correlations.
Social business
A social media program
Big data analytics
Feedback: Big data analytics refers to technologies, skills, and processes for searching and examining massive sets of data to uncover hidden patterns and correlations. Big data is not just for online companies.
Bloom’s: Remember
5. Which of the following is a difference between for-profit businesses and nonprofit organizations?
Financial resources for for-profit businesses come from government appropriations, grants, and donations, while nonprofit organizations are funded by the sale of products or services to customers.
In for-profit businesses, managers focus on improving an organization’s products and services to increase sales revenues, while in nonprofit organizations, however, services are typically provided to nonpaying clients.
For-profit businesses are committed to servicing clients with limited funds, while nonprofit organizations have access to unlimited funds to service clients.
In for-profit businesses, services are typically provided to nonpaying clients, while in nonprofit organizations, services are typically provided to paying clients.
Feedback: In for-profit businesses, managers focus on improving an organization’s products and services to increase sales revenues. In nonprofits, however, services are typically provided to nonpaying clients, and a major problem for many organizations is securing a steady stream of funds to continue operating.
ORGT.DAFT.16.01-01 - 01-01
What is an Organization?
6. _____ provide labels to describe the internal characteristics of an organization.
Functional dimensions
Administrative principles
Contingency factors
Structural dimensions
Feedback: Structural dimensions provide labels to describe the internal characteristics of an organization. They create a basis for measuring and comparing organizations.
ORGT.DAFT.16.01-04 - 01-04
Dimensions of Organization Design
7. _____ encompass larger elements that influence structural dimensions, including an organization’s size, technology, environment, culture, and goals.
c
Feedback: Contingency factors encompass larger elements that influence structural dimensions, including an organization’s size, technology, environment, culture, and goals. They describe the organizational setting that influences and shapes the structural dimensions.
8. Which of the following is true of contingency factors?
They describe the organizational setting that influences and shapes the structural dimensions.
They create a basis for measuring and comparing organizations.
They provide labels to describe the internal characteristics of an organization.
They describe who reports to whom and the span of control for each manager.
Feedback: Contingency factors encompass larger elements that influence structural dimensions, including the organization’s size, technology, environment, culture, and goals. They describe the organizational setting that influences and shapes the structural dimensions.
9. _____ pertains to the amount of written documentation in an organization.
Specialization
Decentralization
Feedback: Formalization pertains to the amount of written documentation in an organization. Documentation includes procedures, job descriptions, regulations, and policy manuals.
10. _____ is the degree to which organizational tasks are subdivided into separate jobs.
Feedback: Specialization is the degree to which organizational tasks are subdivided into separate jobs. Specialization is sometimes referred to as the division of labor.
11. _____ describes who reports to whom and the span of control for each manager.
Organizational technology
Hierarchy of authority
Feedback: Hierarchy of authority describes who reports to whom and the span of control for each manager. The hierarchy is related to span of control (the number of employees reporting to a supervisor).
12. _____ refers to the number of distinct departments or activities within an organization.
Complexity
Feedback: Complexity refers to the number of distinct departments or activities within an organization. Complexity can be measured along three dimensions: vertical, horizontal, and spatial.
13. _____ complexity is the number of levels in the hierarchy of an organization.
Spatial
Vertical
Lateral
Horizontal
Feedback: Complexity can be measured along three dimensions: vertical, horizontal, and spatial. Vertical complexity is the number of levels in the hierarchy.
14. _____ complexity is the degree to which an organization’s departments and personnel are dispersed geographically.
Feedback: Complexity can be measured along three dimensions: vertical, horizontal, and spatial. Spatial complexity is the degree to which an organization’s departments and personnel are dispersed geographically.
15. _____ refers to the tools, techniques, and actions used to transform inputs into outputs.
Organization design
Organizational performance
Organizational behavior
Feedback: Organizational technology refers to the tools, techniques, and actions used to transform inputs into outputs. It concerns how the organization actually produces the products and services it provides for customers and includes such things as flexible manufacturing, advanced information systems, and the Internet.
16. _____ refers to the amount of resources used to achieve an organization’s goals.
Effectiveness
Efficiency
Feedback: Efficiency refers to the amount of resources used to achieve an organization’s goals. It is based on the quantity of raw materials, money, and employees necessary to produce a given level of output.
ORGT.DAFT.16.01-05 - 01-05
17. _____ is the degree to which an organization achieves its goals.
Feedback: Efficiency refers to the amount of resources used to achieve an organization’s goals. Effectiveness is a broader term, meaning the degree to which the organization achieves its goals.
18. _____ primarily focus on the design and functioning of an organization as a whole.
Feedback: Whereas scientific management focused primarily on the technical core—on work performed on a shop floor—administrative principles looked at the design and functioning of an organization as a whole.
ORGT.DAFT.16.01-06 - 01-06
The Evolution of Organization Design
19. _____ emphasize designing and managing organizations on an impersonal, rational basis through such elements as clearly defined authority and responsibility, formal recordkeeping, and uniform application of standard rules.
Bureaucratic organizations
Feedback: Bureaucratic organizations emphasize designing and managing organizations on an impersonal, rational basis through such elements as clearly defined authority and responsibility, formal recordkeeping, and uniform application of standard rules. Although the term bureaucracy has taken on negative connotations in today’s organizations, bureaucratic characteristics worked extremely well for the needs of the Industrial Age.
20. A(n) _____ design means that an organization is much looser, free-flowing, and adaptive.
organic
specialized
vertical
mechanistic
Feedback: An organic design means that an organization is much looser, free-flowing, and adaptive. Rules and regulations often are not written down or, if written down, are flexibly applied.
ORGT.DAFT.16.01-07 - 01-07
The Contrast of Organic and Mechanistic Designs
21. Subzero Enterprises is a publishing company based in the United States of America. The company has 70 employees. Information flows in all directions within and across departments and hierarchical levels. The rules and regulations at Subzero Enterprises are flexibly applied. Subzero Enterprises follows a(n) _____ design.
Feedback: Subzero Enterprises follows an organic design. An organic design means that an organization is much looser, free-flowing, and adaptive. Rules and regulations often are not written down or, if written down, are flexibly applied.
22. Which of the following contingency factors will influence whether an organization is more effective with a primarily mechanistic organization design?
Service technology
Large size
Adaptive culture
Innovation strategy
Feedback: Various contingency factors will influence whether an organization is more effective with a primarily mechanistic or a primarily organic design. Large size, efficiency strategy, stable environment, rigid culture, manufacturing technology are the typical contingency factors that will influence whether the organization is more effective with a primarily mechanistic organization design.
23. Which of the following contingency factors will influence whether an organization is more effective with a primarily organic design?
Manufacturing technology
Stable environment
Efficiency strategy
Feedback: Various contingency factors will influence whether an organization is more effective with a primarily mechanistic or a primarily organic design. Small size, innovation strategy, changing environment, adaptive culture, service technology are the typical contingency factors that will influence whether the organization is more effective with a primarily organic organization design.
24. At Infosoft Solutions, employees are encouraged to take care of their problems by working with one another and with customers, using their discretion to make decisions. From this information, it can be understood that Infosoft Solutions is a _____ organization.
decentralized
centralized
bureaucratic
Feedback: Infosoft Solutions is a decentralized company. With decentralization, decision-making authority is pushed down to lower organizational levels.
25. A _____ is a narrowly defined piece of work assigned to a person.
task
role
job
designation
Feedback: A task is a narrowly defined piece of work assigned to a person. With a mechanistic design, tasks are broken down into specialized, separate parts, as in a machine, with each employee performing activities according to a specific job description.
26. A _____ has discretion and responsibility, allowing a person to use his or her judgment and ability to achieve an outcome or meet a goal.
structure
system
Feedback: A role is a part in a dynamic social system. A role has discretion and responsibility, allowing a person to use his or her judgment and ability to achieve an outcome or meet a goal.
27. Which of the following types of communication is emphasized by mechanistic organizations?
Lateral communication
Spatial communication
Horizontal communication
Vertical communication
Feedback: Mechanistic organizations emphasize vertical communication up and down the hierarchy. Top managers pass information downward to employees about goals and strategies, job instructions, procedures, and so forth, and in turn ask that employees provide information up the hierarchy concerning problems, performance reports, financial information, suggestions and ideas, and so forth.
28. Which of the following types of communication is emphasized by organic organizations?
Feedback: In an organic organization, there is greater emphasis on horizontal communication, with information flowing in all directions within and across departments and hierarchical levels. The widespread sharing of information enables all employees to have complete information about the company so they can act quickly.
29. _____ is the micro approach to organizations because it focuses on the individuals within organizations as the relevant units of analysis.
Organization theory
Organizational culture
Feedback: Organizational behavior is the micro approach to organizations because it focuses on the individuals within organizations as the relevant units of analysis. Organizational behavior examines concepts such as motivation, leadership style, and personality and is concerned with cognitive and emotional differences among people within organizations.
Framework for the Book
30. Which of the following is a difference between organization design and organizational behavior?
Organization design focuses on individuals within organizations, while organizational behavior analyzes the whole organization as a unit.
Organization design is concerned with cognitive and emotional differences among people within organizations, while organizational behavior is concerned with the differences in structure and behavior at the organization level of analysis.
Organization design is concerned with lower management, while organizational behavior is concerned with top- and middle-management.
Organization design might be considered the sociology of organizations, while organizational behavior is the psychology of organizations.
Feedback: Organization design might be considered the sociology of organizations, while organizational behavior is the psychology of organizations.
ORGT.DAFT.16.01-08 - 01-08
31. The growing global interdependence means that the environment for companies has become less complex and competitive.
True
False
Feedback: The growing global interdependence creates new advantages, but it also means that the environment for companies has become extremely complex and extremely competitive. Customers want low prices for quality goods and services, and the organizations that can meet that demand will win.
32. Outsourcing firms in low-wage countries can often do work for 50 to 60 percent more than companies based in the United States.
Feedback: Outsourcing firms in low-wage countries can often do work for 50 to 60 percent less than companies based in the United States, for instance, so U.S. firms that provide similar services have to search for new ways to compete or go into new lines of business.
33. Social media programs decrease efficiency and productivity and facilitate slower operations.
Feedback: Social media programs, including a company’s online community pages, wikis for virtual collaboration, social media sites such as Facebook or LinkedIn, video channels such as YouTube, microblogging platforms such as Twitter, and company online forums, can improve efficiency, increase productivity, and facilitate faster and smoother operations by improving communication and collaboration within and across firms.
34. Social media can build stronger, more authentic relationships between managers and employees.
Feedback: Social media technology is being used by companies to build relationships with customers. It can build stronger, more authentic relationships between managers and employees.
35. Big data analytics can only be employed by online companies.
Feedback: Big data is not just for online companies. Walmart collects more than 2.5 petabytes of data every hour from customer transactions and uses those data to make better decisions.
36. Organizations are social entities that are only linked to the internal environment.
Feedback: Organizations are (1) social entities that (2) are goal-directed, (3) are designed as deliberately structured and coordinated activity systems, and (4) are linked to the external environment.
37. An organization is a building or a set of policies and procedures.
Feedback: An organization is not a building or a set of policies and procedures; organizations are made up of people and their relationships with one another.
38. An organization exists when people interact with one another to perform essential functions that help attain goals.
Feedback: An organization is not a building or a set of policies and procedures; organizations are made up of people and their relationships with one another. An organization exists when people interact with one another to perform essential functions that help attain goals.
39. An organization obtains inputs from the external environment, adds value through a transformation process, and discharges products and services back to the environment.
Feedback: An organization obtains inputs from the external environment, adds value through a transformation process, and discharges products and services back to the environment.
40. Managers in nonprofits direct most of their activities toward earning money for the company and its owners.
Feedback: The primary difference between for-profit businesses and nonprofit organizations is that managers in businesses direct their activities toward earning money for the company and its owners, whereas managers in nonprofits direct much of their effort toward generating some kind of social impact.
41. Managers in nonprofits direct much of their effort toward generating some kind of social impact.
Feedback: The primary difference between managers of nonprofits and managers of businesses is that managers in businesses direct their activities toward earning money for the company and its owners, whereas managers in nonprofits direct much of their effort toward generating some kind of social impact.
42. Financial resources for government and charity nonprofits typically come from the sale of products or services to customers rather than from government appropriations, grants, and donations.
Feedback: Financial resources for government and charity nonprofits typically come from government appropriations, grants, and donations rather than from the sale of products or services to customers.
43. In businesses, managers focus on improving the organization’s products and services to increase sales revenues.
Feedback: In businesses, managers focus on improving the organization’s products and services to increase sales revenues. In nonprofits, however, services are typically provided to nonpaying clients, and a major problem for many organizations is securing a steady stream of funds to continue operating.
44. Managers in nonprofit organizations market their services to attract not only clients (customers) but also volunteers and donors.
Feedback: Managers in nonprofit organizations also deal with many diverse stakeholders and must market their services to attract not only clients (customers) but also volunteers and donors.
45. Large universities tend to be low on formalization
Feedback: Large universities, for example, tend to be high on formalization because they have several volumes of written rules for such things as registration, dropping and adding classes, student associations, dormitory governance, and financial assistance.
46. If specialization is low, each employee performs only a narrow range of tasks.
Feedback: If specialization is extensive, each employee performs only a narrow range of tasks. If specialization is low, employees perform a wide range of tasks in their jobs.
47. When spans of control are narrow, the hierarchy tends to be tall.
Feedback: When spans of control are narrow, the hierarchy tends to be tall. When spans of control are wide, the hierarchy of authority will be shorter.
48. Vertical complexity is the number of departments or occupational specialties existing horizontally across an organization.
Feedback: Vertical complexity is the number of levels in the hierarchy. Different organizational levels possess different stores of knowledge and expertise. Horizontal complexity is the number of departments or occupational specialties existing horizontally across an organization.
49. When decision making is kept at the top level, an organization is decentralized.
Feedback: When decision making is kept at the top level, an organization is centralized. When decisions are delegated to lower organizational levels, it is decentralized.
50. Scientific management focuses primarily on design and functioning of an organization as a whole.
Feedback: Whereas scientific management focuses primarily on the technical core—on work performed on the shop floor—administrative principles looks at the design and functioning of an organization as a whole.
Evolution of Organization Design
51. With decentralization, decision-making authority is pushed up to higher organizational levels.
Feedback: With decentralization, decision-making authority is pushed down to lower organizational levels. In a highly organic organization, knowledge and control of activities are located with employees rather than with supervisors or top executives.
52. In an organic organization, there is greater emphasis on vertical communication.
Feedback: In an organic organization, there is greater emphasis on horizontal communication, with information flowing in all directions within and across departments and hierarchical levels.
53. Organizational behavior is concerned with people aggregated into departments and organizations and with the differences in structure and behavior at the organization level of analysis.
Feedback: Organization theory and design is a macro examination of organizations because it analyzes the whole organization as a unit. Organization design is concerned with people aggregated into departments and organizations and with the differences in structure and behavior at the organization level of analysis.
54. Organization design is directly relevant to top- and middle-management concerns and partly relevant to lower management.
Feedback: Organization design might be considered the sociology of organizations, while organizational behavior is the psychology of organizations. Organization design is directly relevant to top- and middle-management concerns and partly relevant to lower management.
55. Top management is concerned with major departments, such as marketing or research, and must decide how the department relates to the rest of an organization.
56. What is a social business? Discuss in detail the advantages of social media programs.
Social business refers to using social media technologies for interacting with and facilitating communication and collaboration among employees, customers, and other stakeholders and is one of the most current challenges managers face. Social media programs, including a company’s online community pages, wikis for virtual collaboration, social media sites such as Facebook or LinkedIn, video channels such as YouTube, microblogging platforms such as Twitter, and company online forums, can improve efficiency, increase productivity, and facilitate faster and smoother operations by improving communication and collaboration within and across firms. In addition, social media technology is being used by companies to build relationships with customers. It can build stronger, more authentic relationships between managers and employees.
57. Differentiate between for-profit businesses and nonprofit firms.
The primary difference between for-profit businesses and nonprofit firms is that managers in businesses direct their activities toward earning money for the company and its owners, whereas managers in nonprofits direct much of their effort toward generating some kind of social impact. Financial resources for government and charity nonprofits typically come from government appropriations, grants, and donations rather than from the sale of products or services to customers. In businesses, managers focus on improving the organization’s products and services to increase sales revenues. In nonprofits, however, services are typically provided to nonpaying clients, and a major problem for many organizations is securing a steady stream of funds to continue operating. Nonprofit managers, committed to serving clients with limited funds, must focus on keeping organizational costs as low as possible and demonstrating a highly efficient use of resources. Moreover, for-profit firms often compete with nonprofits for limited donations through their own philanthropic fundraising efforts.
58. Briefly discuss the contingency factors of an organization.
Contingency factors include size, organizational technology, the external environment, goals and strategy, and organizational culture.a. Size can be measured for the organization as a whole or for specific components, such as a plant or division.b. Organizational technology refers to the tools, techniques, and actions used to transform inputs into outputs.c. The environment includes all elements outside the boundary of the organization.d. The organization’s goals and strategy define the purpose and competitive techniques that set it apart from other organizations.e. An organization’s culture is the underlying set of key values, beliefs, understandings, and norms shared by employees.
59. Discuss in detail the stakeholder approach.
Achieving effectiveness is not always a simple matter because different people want different things from an organization. For customers, the primary concern is high-quality products and services provided in a timely manner at a reasonable price, whereas employees are mostly concerned with adequate pay, good working conditions, and job satisfaction. Managers carefully balance the needs and interests of various stakeholders in setting goals and striving for effectiveness. This is referred to as the stakeholder approach, which integrates diverse organizational activities by looking at various organizational stakeholders and what they want from the organization. A stakeholder is any group within or outside of the organization that has a stake in the organization’s performance. The satisfaction level of each group can be assessed as an indication of the organization’s performance and effectiveness.
60. What is scientific management? How is it used?
Pioneered by Frederick Winslow Taylor, scientific management emphasizes scientifically determined jobs and management practices as the way to improve efficiency and labor productivity. Taylor proposed that workers “could be retooled like machines, their physical and mental gears recalibrated for better productivity.” He insisted that management itself would have to change and emphasized that decisions based on rules of thumb and tradition should be replaced with precise procedures developed after careful study of individual situations. To use this approach, managers develop precise, standard procedures for doing each job, select workers with appropriate abilities, train workers in the standard procedures, carefully plan work, and provide wage incentives to increase output.
61. What is a mechanistic design?
A mechanistic design means that an organization is characterized by machine-like standard rules, procedures, and a clear hierarchy of authority. Organizations are highly formalized and are also centralized, with most decisions made at the top.
The Contrast of Organic and Mechanistic Design
62. Differentiate between specialized tasks and empowered roles.
A task is a narrowly defined piece of work assigned to a person. With a mechanistic design, tasks are broken down into specialized, separate parts, as in a machine, with each employee performing activities according to a specific job description. A role, in contrast, is a part in a dynamic social system. A role has discretion and responsibility, allowing a person to use his or her judgment and ability to achieve an outcome or meet a goal.
63. Discuss how communication takes place in mechanistic and organic organizations.
Mechanistic organizations emphasize vertical communication up and down the hierarchy. Top managers pass information downward to employees about goals and strategies, job instructions, procedures, and so forth, and in turn ask that employees provide information up the hierarchy concerning problems, performance reports, financial information, suggestions and ideas, and so forth. In an organic organization, there is greater emphasis on horizontal communication, with information flowing in all directions within and across departments and hierarchical levels. The widespread sharing of information enables all employees to have complete information about the company so they can act quickly. In addition, organic organizations maintain open lines of communication with customers, suppliers, and even competitors to enhance learning capability.
64. Describe the levels of analysis of an organization.
Each organization is a system that is composed of various subsystems. Organization systems are nested within systems, and one level of analysis has to be chosen as the primary focus. Four levels of analysis normally characterize organizations. The individual human being is the basic building block of organizations. The human being is to the organization what a cell is to a biological system. The next higher system level is the group or department. These are collections of individuals who work together to perform group tasks. The next level of analysis is the organization itself. An organization is a collection of groups or departments that combine into the total organization. Organizations themselves can be grouped together into the next higher level of analysis, which is the interorganizational set and community. The interorganizational set is the group of organizations with which a single organization interacts. Other organizations in the community make up an important part of an organization’s environment.
65. What is organization theory and design?
Organization theory and design is a macro examination of organizations because it analyzes a whole organization as a unit. Organization design is concerned with people aggregated into departments and organizations and with the differences in structure and behavior at the organization level of analysis. Organization design might be considered the sociology of organizations, while organizational behavior is the psychology of organizations.
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