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Exam 8: Adapting Organizations to Todays Markets

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Question 81

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Julio is the owner of Celebration,Inc.a small party supply company.The company provides tents,tables,chairs,and related paraphernalia for wedding,Bar Mitzvah,Bot Mitzvah,graduation,birthday,and other celebratory events.As sales have increased,the organization has hired more personnel and departmentalized to more efficiently handle purchasing,sales,service,and accounting.Everyone is still responsible for achieving company goals.Upon seeing Celebration's organization chart,you agree it uses a line organization model.

A) True
B) False

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Question 82

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In a bureaucratic organization:

A) departments communicate with each other on a regular basis.
B) employees follow strict rules and regulations.
C) customer satisfaction is the number one priority.
D) first-line workers are empowered to respond to the needs of customers.

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

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Question 83

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Bureaucratic organizations are structured to empower employees and please customers.

Ping believes all workers should receive the same wage rate regardless of their position within a company.Ping's views on wages illustrate Fayol's principle of equity.

Successful managers will find the balance between promoting the informal organization and maintaining a formalized structure,as well.

Gary was a politically savvy employee who had worked for his company for several years.After several promotions,he emerged as the new president of the company.Grace,a colleague of Gary's who reported to him when he was a first-line supervisor,understood how the human side of the organization worked and made certain that she maintained a direct line of communication with Gary at all times.On the company's organization chart,Grace maintained a lower level position;however,due to her open line of communication with President Gary,she seemed to successfully push her agenda.The human side of the organization is synonymous with the ________________.

Milton Learning Centers is a private firm specializing in helping students with learning problems.Located around the country,each center employs a manager and several tutors and counselors.The counselors and tutors have a great deal of flexibility to design programs specifically for individual students.In fact,these first-line employees are considered to be the key people in the organization,and the manager's main function is to assist these employees in matters such as scheduling and securing necessary materials.This type of arrangement suggests that Milton is an inverted organization.

A flat organizational structure is designed to be more responsive to the needs of management.

Organizational culture can produce either a positive or negative impact on an organization.

Management at Hottie Potatee,a nationwide potato bar chain,believes that its customers value a predictable and consistent level of service and quality.When customers stop at one of its potato bar chain restaurants anywhere in the United States,they should know what to expect in terms of menu,price and quality.In order to maintain this consistency,Hottie Potatee should adopt a decentralized organization.

Jessica found a job at a bank,after losing her insurance company job when the firm went bankrupt.Although she has only been with this firm for a couple of weeks,she senses a rather austere climate where not too many people take the time to get to know one another.Several of her coworkers seem to get very nervous when managers walk by and breathe sighs of relief when the VP is away for the day.When she asked her supervisor why people seemed afraid of the VP,the supervisor quoted an old Tennyson poem,"Ours is not to reason why,ours is but to do and die." Jessica realizes the bank does not operate as an open organization.It lacks a thriving informal organization.It is unlikely that Jessica will feel an allegiance to this company.

Line organizations follow Fayol's traditional management rules.

A(n) ________________ is a visual device which shows relationships among people and divides the organization's work.

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. -Currently,Mucho Dinero is organized into specialized departments such as marketing,finance,production and personnel.These departments are designed to allow people with similar skills and expertise to work together.This approach is known as ___________ departmentalization.

Once a company has restructured a firm to be more competitive in today's market,it alleviates the need to scan the external environment.

Departmentalization by function typically increases the cost of doing business.

The management at Patriot Mills works hard to ensure that no one in its organization has more than one boss and all workers are treated with fairness and respect.Additionally,the firm divides the work into areas of specialization so that everyone knows to whom they should report.The management of Patriot Mills reflects the ideas and principles of:

Transparency describes the relationship between a firm and its stockholders.

The purpose of Weber's and Fayol's principles was for the benefit of management,as opposed to pleasing customers.

When Eric Schmidt joined Google™,one of the most successful companies of this decade,he tackled the organization function head-on.In speaking at a large conference with Google founders,Sergey Brinn and Larry Page,he commented that Google was running pretty well,"it just needed a little structure." Schmidt was referring to basic organization principles such as division of labor,specialization,and getting the departments up and running.