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Exam 8: Adapting Organizations to Todays Markets

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Question 141

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In the Crescent City manufacturing plant of the Granite Works Corporation,a foreman supervises workers.The foreman reports to the shift supervisor who reports to the head of the production department,who then reports to the assistant plant manager,who reports to the plant manager.The plant manager,in turn,reports to a district manager,who then reports to a product group manager,who reports to an assistant vice president of operations,who keeps in close touch with an executive vice president.The layers of management indicate that Granite Works Corporation is a tall organization.

A) True
B) False

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Question 142

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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.

E) B) and C)
F) All of the above

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Question 143

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A matrix team for an aerospace company may consist of a project manager,a finance expert,a marketing specialist,a member of production,and two design engineers.

In an inverted organization,the job of management is to:

_______________ means that decision-making authority is delegated to lower-level managers and employees.

Team participants in a matrix organization model may report to two managers at one time.

As the span of control widens,there is usually a reduction of middle management and an emphasis on empowerment.

In recent years,large organizations have tried to improve their efficiency in communication and decision making by:

Fayol's principle of the division of labor says that functions should be divided into areas of specialization such as production,marketing,and finance.

Some firms use a combination of departmentalization techniques.

The concept of ____________ suggests that as a firm produces more,the average cost of goods produced goes down.

Organizing the structure of the company means deciding how many jobs need to be done and who is responsible for doing them.

Realizing that it was time to invest in an updated information system,a young CEO made the following announcement in his weekly broadcast: "We are going to shake things up around here.We need to break apart our information system,and start over." Unfortunately,the message translated poorly in the minds of employees.A total shake-up such as this could impact employee morale.Progressive companies today incorporate strategies that continuously embrace:

As indicated in the Making Ethical Decisions box titled,"Would You Sacrifice Safety for Profit?",organization decisions that affect profits in a negative way should be avoided at all cost.

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 hierarchy requires many top managers,but only a few middle managers.

Antonio works in the accounting department of a large firm.This is an example of Fayol's division of labor concept.

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. -From her discussions with employees,Angelica learned quickly that production workers put their trust in 20-year veteran Willie McClaren.Many people told her that if you wanted something done,Willie was the person to see.Willie appears to be an important part of the:

Barclay developed two interactive computer games.He didn't do it entirely alone.Last year he started a small company,hired two programmers,and a marketing graduate.He considers himself a cutting-edge kind of guy and wants to position his company the same.Soliciting your advice as to how he should structure his organization as he moves forward,you suggest that he hire a few potential customers to join his team of employees as product testers.And,maybe he should solicit globally.The structure you have described would simulate a line and staff organization.

Matrix organizational structures were first developed in: