About This Chapter
This topic covers core exam questions based on key concepts such as the organizational chart, and the organizational design. It features a multiple choice quiz as well as True or False questions with explanations, designed to evaluate your understanding and enhance exam readiness. An answer key is provided for self-assessment and review. The learning objectives include: What is an organization's structure, and what does it consist of? What is organizational design, and what factors does the organizational design process depend on? What steps can organizations take to reduce the negative effects of restructuring efforts? When an organization makes changes to its structure, how does that restructuring affect job performance and organizational commitment?
Question 1
Multiple Choice
Easy
Organizational chart Exam

Which of the following shows every job in the organization and the formal reporting relationships between those jobs?

  • the chain of command
  • an organizational chart
  • a structural map
  • the scalar chain
  • a Gantt chart
Correct Answer: an organizational chart
Explanation:

An organizational chart is a drawing that represents every job in the organization and the formal reporting relationships between those jobs. It helps organizational members and outsiders understand and comprehend how work is structured within the company.

Glossary:

Organizational Chart: A drawing that represents every job in the organization and the formal reporting relationships between those jobs.

Question 2
Multiple Choice
Hard
Organizational design Exam

Talia formed a technology start-up in her garage, and it has grown more rapidly than she ever imagined. She has always kept tabs on all of her people, and her company has just passed 150 employees. What should she do now?

  • send managers to large corporations to bring back a sense of largeness
  • add more structure for communication and decision-making
  • decrease structure for communication and decision-making
  • increase the number of decisions that only she can make
  • eliminate some positions to keep numbers manageable
Correct Answer: add more structure for communication and decision-making
Explanation:

Startup CEOs relate that after they pass 150 employees, weird stuff starts to happen. The weird stuff means the company needs more structure for communications and decision-making.

Glossary:

Decision Making: The process of generating and choosing from a set of alternatives to solve a problem.

Question 3
Multiple Choice
Easy
Organizational design Exam

Which of the following actions is necessary when a company is hiring and firing at the same time?

  • having honest and frequent communication with layoff survivors
  • providing more money to layoff survivors
  • providing more salaries to layoff survivors
  • providing higher salaries to new employees
  • providing better jobs for new employees
Correct Answer: having honest and frequent communication with layoff survivors
Explanation:

Honest and frequent communication with layoff survivors is especially necessary when the organization is hiring and firing at the same time. It greatly helps reduce their feelings of uncertainty and stress.

Glossary:

Communication: The process by which information and meaning is transferred from a sender to a receiver.

Question 4
Multiple Choice
Medium
Organizational design Exam

Which of the following is the main reason behind many organizations flattening their organizations?

  • It improves employee morale.
  • It provides more rewards for fewer employees.
  • It is used to reduce costs and show investors that the company is profitable.
  • It creates a government subsidy qualification.
  • It increases employee performance.
Correct Answer: It is used to reduce costs and show investors that the company is profitable.
Explanation:

Many organizations flatten their organizations mainly to show investors that they are reducing costs to become more profitable.

Question 5
Multiple Choice
Easy
Organizational design Exam

Which of the following has been the most common kind of restructuring in recent years?

  • from a functional to a geographic-based structure
  • from a product to a client-based structure
  • from a bureaucratic to a matrix structure
  • a flattening of the organization
  • creating a tall structure in the organization
Correct Answer: a flattening of the organization
Explanation:

The most common kind of restructuring in recent years has been a "flattening" of the organization.

Glossary:

Restructuring: The process of changing an organization’s structure.

Question 6
Multiple Choice
Easy
Organizational design Exam

The first step in adapting to the environment is

  • actually restructuring.
  • recognizing the need to change.
  • evaluating the external environment.
  • evaluating the internal environment.
  • exploring the competitor's structures.
Correct Answer: recognizing the need to change.
Explanation:

The first step in adapting is recognizing the need to change. The second (and sometimes much more problematic) step is actually doing it by restructuring.

Question 7

Many layoff survivors experience a great deal of guilt and remorse following a layoff.

True
False
Correct Answer: True
Explanation:

Stress levels for layoff survivors can be much high due to additional workload and guilt.

Question 8

Many restructuring efforts are designed to remove one or more organizational layers to reduce costs.

True
False
Correct Answer: True
Explanation:

Many restructuring efforts are designed to remove one or more of the organizational layers to reduce costs.

Glossary:

Restructuring: The process of changing an organization’s structure.

Question 9
Multiple Choice
Medium
Organizational design Exam

Tatum is the CEO of a company that is undergoing a major restructuring. How should she deal with the employees who survive the layoffs in the restructuring?

  • remove any control they may have
  • give them a voice in the process
  • tell them as little as possible
  • halve their workload
  • boost their salary
Correct Answer: give them a voice in the process
Explanation:

Research suggests that one of the best ways to help layoff survivors adjust is to do things that give them a stronger sense of control.

Glossary:

Restructuring: The process of changing an organization’s structure.

Question 10
Multiple Choice
Easy
Organizational design Exam

Although not much is known about the effect of restructuring on affective commitment, restructuring generally results in ________ level of affective commitment on the part of employees.

  • no significant
  • a large positive
  • a moderate positive
  • a small negative
  • a moderate negative
Correct Answer: a moderate negative
Explanation:

Restructuring has a small negative effect on task performance. Restructuring has a more negative effect on organizational commitment. Restructuring efforts can increase stress and jeopardize employees trust in the organization. There is some evidence that the end result is a lower level of affective commitment on the part of employees because they feel less emotionally attached to the firm.

Glossary:

Affective Commitment: An employee’s desire to remain a member of an organization due to a feeling of emotional attachment.

Question 11
Multiple Choice
Easy
Organizational design Exam

According to research, restructuring has ________ effect on task performance.

  • a strong positive
  • a small negative
  • no
  • a strong negative
  • a moderate positive
Correct Answer: a small negative
Explanation:

Restructuring has a small negative effect on task performance, likely because changes in specialization, centralization, or formalization may lead to confusion about how exactly employees are supposed to do their jobs.

Glossary:

Task Performance: Employee behaviors that are directly involved in the transformation of organizational resources into the goods or services that the organization produces.

Question 12
Multiple Choice
Easy
Organizational design Exam

________ is the process of changing an organizational structure.

  • Restructuring
  • Structuring
  • Centralizing
  • Formalization
  • Layoff
Correct Answer: Restructuring
Explanation:

The process of changing an organization's structure is called restructuring.

Question 13
Multiple Choice
Medium
Organizational design Exam

Very Nice Curtains is planning to restructure their business. How will this most likely affect their employees in the short-term?

  • Trust will decline quite a bit.
  • Task performance will increase.
  • Stress will remain unchanged.
  • Confusion will decline slightly.
  • Learning will increase greatly.
Correct Answer: Trust will decline quite a bit.
Explanation:

Research suggests that restructuring has a small negative effect on task performance, likely because changes in specialization, centralization, or formalization may lead to confusion about how exactly employees are supposed to do their jobs, which hinders learning and decision making. Restructuring has a more significant negative effect on organizational commitment, however. Restructuring efforts can increase stress and jeopardize employees' trust in the organization.

Glossary:

Trust: The willingness to be vulnerable to an authority based on positive expectations about the authority’s actions and intentions.

Question 14
Multiple Choice
Medium
Organizational design Exam

Hard Facts publishing has decided to restructure their organization. During the restructuring, they will probably see

  • faster employee learning.
  • reduced workplace stress.
  • slightly increasing employee trust.
  • slightly declining task performance.
  • less confusion about employee roles.
Correct Answer: slightly declining task performance.
Explanation:

Research suggests that restructuring has a small negative effect on task performance, likely because changes in specialization, centralization, or formalization may lead to confusion about how exactly employees are supposed to do their jobs, which hinders learning and decision making. Restructuring has a more significant negative effect on organizational commitment, however. Restructuring efforts can increase stress and jeopardize employees' trust in the organization.

Glossary:

Routine Task Performance: Well-known or habitual responses by employees to predictable task demands.