Modern Management, 13e (Certo/Certo)

Chapter 10 Fundamentals of Organizing

1) Organizing is the process of establishing orderly uses for all resources within the management
system.
Answer: TRUE
2) Henri Fayol recommends that businesses avoid red tape, regulations, and paperwork when
organizing resources.
Answer: TRUE
3) Henri Fayol recommends that businesses establish multiple guiding authorities when
organizing resources.
Answer: FALSE
4) The final step in the organization process is to allocate resources and directives for subtasks.
Answer: FALSE
5) Bureaucracy can be characterized as a management system with detailed procedures, rules,
and a clearly outlined organizational hierarchy with impersonal relationships among organization
members.
Answer: TRUE
6) It is recognized today that the bureaucratic approach without an appropriate emphasis on the
human variable is almost certainly a formula for organizational failure.
Answer: TRUE
7) According to Mary Parker Follett, coordination can be attained with the least difficulty
through direct horizontal relationships and personal communications.
Answer: TRUE
8) Traditionally, individuals at the top of a pyramid-shaped organizational structure have more
authority but less responsibility than individuals at the bottom of the pyramid.
Answer: FALSE
9) The formal structure of an organization evolves naturally and tends to be molded by individual
norms and values and social relationships.
Answer: FALSE
10) A company's informal organizational structure is represented primarily by the organizational
chart.
Answer: TRUE
11) Vertical dimensioning is directly related to the concept of the scalar relationship that is,
the chain of command.
Answer: TRUE
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12) Span of management refers to the number of organizational levels below that of a particular
manager.
Answer: FALSE
13) In general, the closer the subordinates are, physically, the more of them managers can
supervise effectively.
Answer: TRUE
14) V. A. Graicunas developed a formula for determining the number of actual relationships
between a manager and subordinates when the number of subordinates is known.
Answer: FALSE
15) Normally, the greater the height of the organization chart, the smaller the span of
management.
Answer: TRUE
16) The most widely used basis for establishing departments within the formal structure is by
type of product.
Answer: FALSE
17) Within a matrix structure, workers are responsible for their original activities along with
project activities.
Answer: TRUE
18) The matrix structure is contradictory to the principle of unity of command.
Answer: TRUE
19) Four primary forces influence the evolution of formal organizational structure: forces in the
manager, forces in the task, forces in the environment, and forces in the subordinates.
Answer: TRUE
20) Fayol has indicated that strict adherence to a particular chain of command is always
advisable when seeking information.
Answer: FALSE
21) ________ is the process of establishing orderly uses for resources within the management
system.
A) Organizing
B) Communication
C) Planning
D) Controlling
E) Motivation
Answer: A

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22) ________ skill is the ability to establish orderly uses for resources within the management
system.
A) Organizing
B) Communication
C) Planning
D) Controlling
E) Marketing
Answer: A
23) According to Fayol's guidelines for organizing resources, you should avoid ________.
A) formulating precise decisions
B) using sanctions against faults and errors
C) instituting and effecting controls
D) regulations, redtape, and paperwork
E) defining duties
Answer: D
24) According to Fayol's guidelines for organizing resources, you should do all of the following,
EXCEPT ________.
A) establish multiple guiding authorities
B) define duties
C) use sanctions against faults and errors
D) encourage initiative and responsibility
E) offer suitable rewards for services rendered
Answer: A
25) According to Fayol's guidelines for organizing resources, you should ________.
A) establish multiple guiding authorities
B) make extensive use of regulations and paperwork
C) not use sanctions against faults and errors
D) recognize the unity of command
E) not link rewards to performance
Answer: D
26) Which of the following is the first step in the organizing process?
A) establish major tasks
B) reflect on plans and objectives
C) allocate resources and directives for subtasks
D) evaluate results of organizing strategy
E) divide major tasks into subtasks
Answer: B
27) The second and third steps of the organizing process focus on the ________.
A) results of the organizing strategy
B) organizational plans
C) organizational goals and objectives
D) tasks to be performed within the management system
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E) allocation of resources and directives

Answer: D
28) Which of the following is the last step in the organizing process?
A) Allocate resources and directives for subtasks.
B) Evaluate results of organizing strategy.
C) Establish major tasks.
D) Reflect on plans and objectives.
E) Divide major tasks into subtasks.
Answer: B
29) The bureaucracy model of organizing was proposed by ________.
A) V. A. Graicunas
B) Henri Fayol
C) Albert Einstein
D) Mary Parker Follett
E) Max Weber
Answer: E
30) Which of the following is one of the three main components of the management system that
Weber termed a bureaucracy?
A) minimum regulations and paperwork
B) close, personal relations among organization members
C) emphasis on the human variable
D) detailed procedures and rules
E) a loosely defined organizational hierarchy
Answer: D
31) Which of the following is the main criticism of Weber's bureaucracy model?
A) It fails to emphasize setting detailed procedures and rules.
B) It gives short shrift to the human variable within organizations.
C) It does not emphasize a clearly defined organizational structure.
D) It overemphasizes positive relationships among organization members.
E) It attempts to eliminate paperwork and regulations.
Answer: B
32) ________ is the assignment of various portions of a particular task among a number of
organization members.
A) Participation
B) Job enlargement
C) Division of labor
D) Job rotation
E) Work sharing
Answer: C

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33) Alistair Fashions, a clothing manufacturer, uses an assembly-line to manufacture clothes

whereby different groups of workers specialize in particular tasks cutting fabric, finishing
sleeves, making collars, fixing zippers, sewing buttons, etc. Identify the organizing system being
used here.
A) job rotation
B) job enlargement
C) participative management
D) division of labor
E) job enrichment
Answer: D
34) Which of the following is an advantage of division of labor?
A) It emphasizes the human variable in organizations.
B) It results in high levels of employee motivation.
C) It results in specialization and higher skill levels.
D) It makes work more interesting.
E) It broadens the scope of work.
Answer: C
35) Which of the following is a disadvantage of division of labor?
A) It makes the work more difficult.
B) It makes work more time-consuming and inefficient.
C) It can result in workers getting bored of their work.
D) It prevents workers from specializing at a task.
E) It requires workers to know about the entire process and not just one task.
Answer: C
36) ________ is defined as the orderly arrangement of group effort to provide unity of action in
the pursuit of a common purpose.
A) Justification
B) Combination
C) Amalgamation
D) Coordination
E) Rationalization
Answer: D
37) Which of the following is one of Follett's guidelines on coordination?
A) Personal communication should be minimized in coordination.
B) Managers can assume that if their system shows coordination now, it will show coordination
in the future.
C) The human element should be minimized in coordination.
D) Managers should plan for coordination.
E) Coordination can be achieved with least difficulty through vertical relationships.
Answer: D

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38) According to Follett, coordination can be attained with the least difficulty through ________.
A) a bureaucratic structure
B) a strict adherence to the chain of command
C) minimizing the human element
D) direct horizontal relationships and personal communications
E) discussions with people higher up the organization hierarchy
Answer: D
39) Formal structure is ________.
A) molded by individual norms and values and social relationships
B) defined as the relationships that evolve naturally among organization members
C) represented primarily by the organization chart
D) usually drawn directly from an organization's informal structure
E) usually identical to an organization's informal structure
Answer: C
40) Informal structure is ________.
A) molded by individual norms and values and social relationships
B) defined as the relationships among organizational resources as outlined by management
C) represented primarily by the organization chart
D) usually represented in a pyramid form
E) usually identical to an organization's formal structure
Answer: A
41) Organization structure is represented primarily by means of a graphic illustration called a(n)
________.
A) semantic network
B) executive dashboard
C) directed graph
D) organization chart
E) critical path
Answer: D
42) Traditionally, an organization chart is constructed in a ________ form.
A) radial tree
B) spider diagram
C) pyramid
D) hyperbolic tree
E) pie-diagram
Answer: C
43) Which of the following is true about the traditional organization chart constructed in pyramid
form?
A) Lines between boxes designate informal lines of communication between individuals.
B) Relative positioning of individuals within boxes on the chart indicates broad social
relationships.
C) Individuals toward the top of the pyramid have more authority than those toward the bottom.
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D) Such organizational charts cannot communicate the complexity of the organization.

E) Individuals toward the bottom of the pyramid have more responsibility than those toward the
top.
Answer: C
44) ________ is directly related to the concept of the scalar relationship that is, the chain of
command.
A) Matrix structuring
B) Departmentalizing
C) Vertical dimensioning
D) Horizontal dimensioning
E) Lateralizing
Answer: C
45) Unity of command is the management principle that recommends that ________.
A) all managers share the same goals
B) all employees should accept their formal leader or leaders
C) an individual have only one boss
D) organizational plans be consistent with organizational goals
E) the organizing system be consistent with organizational plans
Answer: C
46) Span of management refers to the number of ________.
A) levels in an organization
B) organizational levels above an individual
C) organizational levels below an individual
D) bosses an individual has
E) individuals a manager supervises
Answer: E
47) Fred is a Grade D manager in Lighthouse Infrastructure and manages a small team of eight
engineers. The company has 15 Grade D managers. He worked his way up from the lowest
grade, Grade E, where he was one of 52 line managers and hopes to be promoted to Grade C
soon, which would make him one of the six vice-presidents in the company. However, breaking
into Grade B, comprising three presidents, will be a challenge. Only the CEO and COO occupy
Grade A. Which of the following numbers represents Fred's span of management?
A) 15
B) 60
C) 52
D) 8
E) 11
Answer: D
48) According to the contingency viewpoint to designing span of management, the appropriate
span of management widens when ________.
A) the activities performed by supervised individuals are similar
B) subordinates are carrying out complex functions
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C) the manager needs to spend a lot of time on planning activities

D) subordinates' activities need to be synchronized carefully
E) subordinates are widely physically separated
Answer: A
49) According to the contingency viewpoint to designing span of management, the appropriate
span of management narrows when ________.
A) the activities performed by supervised individuals are similar
B) subordinates are carrying out simple functions
C) the manager spends little time on planning activities
D) subordinates' activities need to be synchronized carefully
E) subordinates are physically located close to one another
Answer: D
50) According to the contingency viewpoint to designing span of management, which of the
following situations would warrant a relatively wide span of control?
A) supervising a team of scientists engaged in complex research work
B) supervising a team of factory workers sewing buttons onto shirts
C) managing a virtual team of engineers spread across several countries
D) managing a highly interdependent production team
E) managing and coordinating the activities of a marketing team
Answer: B
51) ________ developed a formula for determining the number of possible relationships between
a manager and subordinates when the number of subordinates is known.
A) Mary Parker Follett
B) Henri Fayol
C) F. W. Taylor
D) Max Weber
E) V. A. Graicunas
Answer: E
52) Graicunas's formula is as follows: C = n(

+ n- 1). What does C stand for in this formula?

A) the total number of departments possible in an organization

B) the appropriate number of subordinates a manager can have
C) the appropriate number of levels an organization can have
D) the total number of possible relationships between manager and subordinates
E) the degree of the difficulty in coordinating a certain number of subordinates
Answer: D
53) Graicunas's formula is as follows: C = n(

+ n- 1). What does n stand for in this formula?

A) the total number of departments in an organization

B) the appropriate number of subordinates a manager can have
C) the total number of levels an organization can have
D) the known number of subordinates for a particular manager
E) the appropriate number of possible relationships between manager and subordinates
Answer: D
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54) Andrew is a mid-level manager with three organizational levels above him and two below
him. He has four analysts reporting directly to him. Using Graicunas's formula, calculate the total
number of possible relationships between Andrew and his subordinates.
A) 4
B) 16
C) 44
D) 56
E) 64
Answer: C
55) According to Graicunas's formula for determining the number of possible relationships
between a manager and subordinates, as the number of subordinates increases arithmetically, the
number of possible relationships between the manager and those subordinates ________.
A) increases proportionately
B) decreases proportionately
C) increases geometrically
D) increases arithmetically, too
E) decreases geometrically
Answer: C
56) Which of the following is a criticism of Graicunas's work in span of management?
A) He failed to emphasize the importance of span of management on the organization.
B) He does not recognize the principle of unity of command.
C) He does not consider the number of actual relationships among superiors and subordinates.
D) He fails to specify what will happen if the number of subordinates increases or decreases.
E) He takes into account managers' relationships outside the organization.
Answer: C
57) Which of the following is true about the height of an organization chart?
A) An organization's structure should be built from bottom to top to ensure that appropriate spans
of management are achieved at all levels.
B) Span of management usually has no influence on the height of an organization chart.
C) Increasing spans of management to eliminate certain management positions and thereby
reducing salary expenses will help the organization achieve long-term success.
D) Normally, the greater the height of the organization chart, the smaller the span of
management.
E) Overall, managers seem to be using taller organizational structures now than in the past.
Answer: D
58) The ________ of an organization refers to the extent to which firms use lateral subdivisions
or specialties within an organization.
A) laddering
B) horizontal dimensioning
C) vertical integration
D) vertical dimensioning
E) backward integration
Answer: B
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59) Which of the following is the most widely used basis for departmentalization?
A) customer
B) work functions
C) geography
D) matrix
E) product or service
Answer: B
60) The organization structure at Kinetic Machines is horizontally divided into Marketing,
Finance, Production, and R&D departments. Identify the departmentalization mode being used
here.
A) product
B) geographic
C) functional
D) customer
E) matrix
Answer: C
61) Which of the following is an advantage of functional departmentalizing?
A) It facilitates coordination between various functions.
B) It facilitates assigning of blame when a product performs poorly.
C) It allows firms to pool human resources for both short-term and long-term projects.
D) It promotes consistency in how functions are carried out.
E) It facilitates differentiation of strategy across different segments.
Answer: D
62) Which of the following is a potential disadvantage of functional departmentalizing?
A) difficulty for employees to prioritize responsibilities
B) lack of unity of command
C) difficulty in coordinating between various functions
D) difficulty in assigning blame or credit for the performance of a function
E) lack of consistency in carrying out functions
Answer: C
63) The organization structure at Sinclair Funds, a financial services company, is divided
horizontally into Insurance, Mutual Funds, and Wealth Management departments. Identify the
departmentalization mode being used here.
A) matrix
B) customer
C) product or service
D) geographic
E) functional
Answer: C

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64) Which of the following is an advantage of departmentalizing by matrix?

A) It clarifies the power structure within the firm.
B) It helps employees prioritize responsibilities.
C) It facilitates coordination across projects.
D) It allows firms to achieve unity of command.
E) It allows firms to pool human resources for short-term and long-term projects.
Answer: E
65) Gizmo Sales, a company that sells office supplies to companies in Atlanta, GA, has
organized the business horizontally into departments named North Atlanta, South Atlanta, and
Downtown Atlanta. This indicates that Gizmo has departmentalized on the basis of ________.
A) products
B) projects
C) customers
D) territories
E) functions
Answer: D
66) Pixel Technologies, a manufacturer of electronic products and cell phones, has divided the
business into two divisions Electronics Retailers and Cell Phone Retailers. This indicates that
Pixel Technologies has departmentalized on the basis of ________.
A) geography
B) products
C) functional
D) customers
E) matrix
Answer: D
67) At Landmark Constructions, crucial projects are handled completely by project managers
who are empowered to borrow marketing, sales, engineering, finance and R&D staff, and other
employees from various parts of the organization to complete their projects. Identify the
departmentalization mode being used in this company.
A) customer
B) matrix
C) product
D) geographic
E) functional
Answer: B
68) ________ organizations are also called project organizations.
A) Silo
B) Functional
C) Radial
D) Pyramid
E) Matrix
Answer: E
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69) Which of the following modes of departmentalization contradicts the principle of the unity of
command?
A) customer
B) functional
C) geographic
D) matrix
E) product or service
Answer: D
70) Which of the following is a disadvantage of departmentalizing by matrix?
A) It results in duplication of effort.
B) It can be confusing for employees.
C) It does not allow firms to maintain flexibility.
D) It does not allow firms to pool resources for short-term projects.
E) It results in a bureaucratic organization.
Answer: B
71) Which of the following is true about departmentalizing by matrix?
A) It ensures unity of command.
B) Project managers generally report directly to the company CEO.
C) A matrix organization essentially has a bureaucratic structure.
D) When on a project, workers are not responsible for their original duties.
E) This mode is usually not utilized for short-term projects.
Answer: B
72) Four primary forces influence the evolution of a formal structure: forces in the manager,
forces in the task, forces in the environment, and forces in the ________.
A) subordinates
B) market
C) shareholders
D) economy
E) community
Answer: A
73) In the context of forces influencing formal structure, the customers and suppliers of the
management system, along with existing political and social structures constitute the forces in
the ________.
A) manager
B) task
C) environment
D) subordinates
E) activity
Answer: C

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74) Fayol indicated that strict adherence to a particular chain of command is ________.
A) a must
B) the first order of business
C) not always advisable
D) always advisable
E) never advisable
Answer: C
75) Discuss the five main steps in the organizing process.
Answer: The first step in the organizing process is to reflect on plans and objectives. This is an
essential first step because planning involves determining how the organization will attain its
objectives, and organizing involves determining how managers will use organizational resources
to activate plans. The second step is to establish major tasks, or jobs, to be done within an
organization to achieve the objectives established by plans. The third step is to subdivide the
tasks into subtasks, which can be thought of as the elements of doing one's job. The fourth step is
to allocate resources and directives for subtasks. This essentially means the manager must now
determine who will do the tasks and subtasks, and the relationships between those people. The
fifth step is to evaluate the results of the implemented organizational strategy. The manager must
gather feedback on how well the strategy is working.
Page Ref: 221-223
Learning Outcome: Discuss factors influencing organizational structure decisions
Objective: 1
Difficulty: Easy
Classification: Conceptual

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76) Describe what is meant by the term "division of labor." Also explain the advantages and
disadvantages associated with division of labor.
Answer: Division of labor is the assignment of various portions of a particular task among a
number of organization members. Division of labor calls for specialization. Several explanations
have been offered for the usefulness of division of labor. First, when workers specialize in a
particular task, their skill at performing that task tends to increase. Second, workers who have
one job, and one place in which to do it, do not lose valuable time changing tools or locations.
Third, when workers concentrate on performing only one job, they naturally try to make the job
easier and more efficient. Lastly, division of labor creates a situation in which workers need only
to know how to perform their part of the work task, rather than the entire process for producing
the end product. Therefore, the task of understanding their work does not become too
burdensome. Arguments have also been presented against the use of an extreme division of labor.
Essentially, these arguments contend that division of labor focuses solely on efficiency and
economic benefit and overlooks the human variable in organizations. Work that is extremely
specialized tends to be boring and therefore will eventually cause production rates to go down as
workers become resentful of being treated like machines.
Page Ref: 224
Learning Outcome: Discuss factors influencing organizational structure decisions
Objective: 4
Difficulty: Moderate
Classification: Conceptual
77) Define the concepts of vertical dimensioning, scalar relationships, and unity of command and
explain how they are related.
Answer: Vertical dimensioning refers to the extent to which an organization uses vertical levels
to separate job responsibilities.
Vertical dimensioning is directly related to the concept of the scalar relationship that is, the
chain of command. Every organization is built on the premise that the individual at the top
possesses the most authority and that other individuals' authority is scaled downward according
to their relative position on the organization chart. The lower a person's position on the
organization chart, then the less authority that person possesses.
The scalar relationship, or chain of command, is related to the unity of command. Unity of
command is the management principle that recommends that an individual have only one boss. If
too many bosses give orders, the result will probably be confusion, contradiction, and
frustration a sure recipe for ineffectiveness and inefficiency in an organization.
Page Ref: 225-228
Learning Outcome: Discuss factors influencing organizational structure decisions
Objective: 3
Difficulty: Easy
Classification: Conceptual

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78) Explain the concept of span of management, and discuss the factors that influence the
appropriateness of the size of an individual's span of management.
Answer: Span of management is the number of individuals a manager supervises; the greater the
number of individuals the greater the span of management. The central concern of span of
management is to determine how many individuals a manager can supervise effectively. To assist
in determining the appropriate span of management, Harold Koontz developed five situational
factors that influence the span of management. The first factor is similarity of functions the
more that subordinates are performing similar functions, the more that the appropriate span of
management widens. The next factor is geographic continuity. The closer subordinates are
physically, the more the manager can supervise effectively. Complexity of functions is the next
factor. The more difficult and involved the activities of the subordinates are, the more difficult it
is to manage a large number of subordinates effectively. Coordination as a factor deals with the
amount of time managers must spend synchronizing the activities of their subordinates. The
greater amount of time spent doing so, the smaller the span of management. The final factor,
planning, suggests the more time managers spend planning, the fewer individuals they can
manage effectively.
Page Ref: 226
Learning Outcome: Discuss factors influencing organizational structure decisions
Objective: 7
Difficulty: Moderate
Classification: Conceptual
79) What is meant by the horizontal dimensioning of an organization? Also explain the terms
"departments" and "departmentalizing," and list the various modes of departmentalizing an
organization.
Answer: The horizontal dimensioning of an organization refers to the extent to which firms use
lateral subdivisions or specialties within an organization. Overall, to build organizations
horizontally, organizations establish departments. A department is a unique group of resources
established by management to perform some organizational task. Departmentalizing is the
process of establishing departments within the management system.
Typically, these departments are based on, or contingent on, such situational factors as the work
functions being performed, the product or service being offered, the territory being covered, and
the customer being targeted.
Page Ref: 228-232
Learning Outcome: Discuss factors influencing organizational structure decisions
Objective: 6
Difficulty: Easy
Classification: Conceptual

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