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Exam 8: Adapting Organizations to Todays Markets

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Question 1

True/False

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One of Fayol's principles suggests that managers should have the right to give orders and expect others to follow.

A) True
B) False

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Question 2

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Mini-Case Angelica Canizales is the CEO of Mucho Dinero Enterprises.Sales have declined for four consecutive years and the firm's accountants have reported net losses in each of the last two years.Employees appear demoralized 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 between 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 that,"We have so many layers of management that it takes forever to make decisions." An employee from marketing complained that,"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 expressed "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 employees,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. -Angelica's decision to completely redesign Mucho Dinero's organization indicates that she believes the best approach to her firm's problems is:

A) competitive benchmarking.
B) flexible departmentalization.
C) restructuring.
D) organizational therapy.

E) None of the above
F) C) and D)

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Question 3

Multiple Choice

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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

A bureaucracy is designed to be customer focused.

Martina is an experienced manager with excellent communications skills.The workers in her area are highly skilled and capable of doing their work with very little direct supervision.Martina's span of control is likely to be quite broad.

When we experience economies of scale this means that as production levels rise (we make more of something),the cost of supplies and cost of labor that goes into the production,goes down.

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

Line managers issue orders,enforce discipline,and adjust the organization as conditions change.

Matrix organizations give managers flexibility in assigning people to projects.

In today's fast-paced business environment,Weber's bureaucratic ideas work well.These principles permit business to respond quickly to customer changes.

Empowerment works only when employees are given the proper training and resources to respond.

Jesse started a successful telecommunications company that provided voicemail services to business clients in the Midwest.As the business grew,Jesse added functional departments including a marketing department and an accounting department.After a few years,he realized that employees who specialized in these areas no longer shared knowledge with each other in the same way they did when the operation was smaller.As one of Jesse's business consultants,you explain that as the company grows taller,it cannot avoid this pitfall,and he should focus on continued functional departmentalization,especially if he supports innovation and learning.

Jackie works in the finance department,at the home office of a large retailer.Her main responsibility is to watch department expenditures and find ways to cut costs whenever possible.Tim,the marketing director for the same company shares information with Jackie only when necessary.He finds her inflexible,and not understanding of what it takes to roll-out a new product line.Jackie and Tim typify a disadvantage of departmentalization.

Which of the following describes an environment in which data is instantly available via the Internet to organizational partners?

As Bret 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:

In its effort to reorganize its floor space,Backstreet Books decided to eliminate seating space in its stores in order to make room for bookshelves due to growing interest in books about how to "go green".This company's effort is an example of how a firm may reduce its emphasis in one product line in order to serve customer preferences and trends.

In large businesses,a line organization provides firms the ability to respond quickly to a changing environment.

Joe,a production engineer at Freestone Tires recently joined a team of specialists from other areas,such as marketing and finance.His long-term assignment to this team has produced several new products.Joe enjoys this work environment,in part because Freestone's management has given the team the freedom and flexibility to make decisions.A recent development is the inclusion of "outsiders" from Freestone's major distributors and suppliers on the team.It appears that Joe's team is a(n) :

Departmentalization by function groups employees based on similar skills,expertise,or resource use.

Heather works as a sales representative for the Westerly Company.She really enjoys working for Westerly,because the company treats her and other sales representatives as highly valued employees.Sales reps at Westerly are given freedom and flexibility in their relationships with customers.While there are only a few layers of management at Westerly,Heather has found that these managers try their best to support and assist her efforts.Based on Heather's experience,it appears that Westerly is a(n) :