About This Chapter
This topic covers high-yield exam questions based on key concepts such as the restructuring, the span of control, and the strategic plan. It features sample MCQs for revision as well as sample True or False exam items, designed to evaluate your understanding and enhance exam readiness. An answer key is provided for self-assessment and review. The learning objectives include: When an organization makes changes to its structure, how does that restructuring affect job performance and organizational commitment? What are the major elements of an organizational structure? What is organizational design, and what factors does the organizational design process depend on?
Question 1
True False
Easy
Restructuring Exam

Restructuring an organization has a positive impact on task performance because restructuring helps employees view their jobs in new and exciting ways.

True
False
Correct Answer: False
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.

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 2
True False
Easy
Span of control Exam

In a traditional organizational structure, every employee has one person to whom they report.

True
False
Correct Answer: True
Explanation:

Every employee in a traditional organizational structure has one person to whom they report.

Glossary:

Organizational Structure: Formally dictates how jobs and tasks are divided and coordinated between individuals and groups within the company.

Question 3
True False
Easy
Span of control Exam

Wide spans of control allow managers to be much more hands-on with employees.

True
False
Correct Answer: False
Explanation:

Narrow spans of control allow managers to be much more hands-on with employees, giving them the opportunity to use directive leadership styles while developing close mentoring relationships with employees.

Question 4
Multiple Choice
Medium
Span of control Exam

A ________ span of control creates a ________ organization structure.

  • wide; flat
  • tall; flat
  • moderate; narrow
  • narrow; flat
  • flat; moderate
Correct Answer: wide; flat
Explanation:

A wide span of control creates a flat organization structure.

Glossary:

Span Of Control: Represents how many employees each manager in the organization has responsibility for.

Question 5
Multiple Choice
Hard
Span of control Exam

Shane is the project manager of the organizational development team at Solid Hardwoods. Shane's team has been assigned the task of studying and evaluating Solid Hardwoods' organizational structure. Shane divided the tasks among the team members to collect preliminary information on different elements of Solid Hardwoods' structure. Meg was asked to collect information on the degree to which tasks are divided into separate jobs. Andrea was asked to collect information on formal authority relationships. Francine started looking into how many employees each manager has responsibility for, and Carol was asked to collect evidence on the degree to which rules and procedures are used to standardize behaviors at Solid Hardwoods. Shane decided to personally collect information and evidence on where exactly decisions are formally made at Solid Hardwoods. The team decided to meet with information in two weeks. Francine is looking into information on which element of organizational structure?

  • centralization
  • formalization
  • span of control
  • chain of command
  • work specialization
Correct Answer: span of control
Explanation:

Span of control is the number of employees a manager is responsible for. Current research suggests that a moderate span of control is best for an organization's productivity.

Glossary:

Span Of Control: Represents how many employees each manager in the organization has responsibility for.

Question 6
Multiple Choice
Medium
Span of control Exam

Current research suggests that

  • the narrower the span of control, the more productive employees become.
  • a moderate span of control is best for an organization's productivity.
  • spans of control in organizations have decreased significantly in recent years.
  • a wide span of control requires organizations to hire many managers.
  • a wide span of control is especially important if the manager has more skill than the subordinates.
Correct Answer: a moderate span of control is best for an organization's productivity.
Explanation:

A moderate span of control is best for an organization's productivity.

Glossary:

Span Of Control: Represents how many employees each manager in the organization has responsibility for.

Question 7
Multiple Choice
Medium
Span of control Exam

The relationship between performance and span of control is graphed as a(n)

  • "arch" shape.
  • "U" shape.
  • straight horizontal line.
  • straight vertical line.
  • diagonal line sloping up to the right.
Correct Answer: "arch" shape.
Explanation:

The relationship between performance and span of control is curvilinear and results in an "arch"-shaped diagram.

Question 8
Multiple Choice
Easy
Span of control Exam

The more people under the control of one manager, the

  • greater the decentralization.
  • wider the span of control.
  • taller the organizational structure.
  • shorter the chain of command.
  • greater the work specialization.
Correct Answer: wider the span of control.
Explanation:

A manager's span of control represents how many employees he or she is responsible for in the organization.

Question 9
Multiple Choice
Easy
Span of control Exam

Span of control

  • is the degree to which tasks in an organization are divided into separate jobs.
  • answers the question of "who reports to whom?" and signifies formal authority relationships.
  • refers to where decisions are formally made in organizations.
  • refers to the number of employees each manager is responsible for in the organization.
  • is the degree to which rules and procedures are used to standardize behaviors and decisions in an organization.
Correct Answer: refers to the number of employees each manager is responsible for in the organization.
Explanation:

A manager's span of control is defined as how many employees he or she is responsible for in the organization.

Question 10
Multiple Choice
Medium
Span of control Exam

At Pleasant Pools Inc., there is a total focus on providing care and satisfaction to each customer. In the Prominent Clients division, each manager is assigned 3 employees to supervise, whereas in the Component Assembly division, each manager supervises about 15 employees. The Prominent Clients division managers can be described as having ________ as opposed to ________ for the Component Assembly division managers.

  • a narrow span of control; a wide span of control
  • a wide span of control; a narrow span of control
  • narrow centralization; tall centralization
  • tall formalization; flat formalization
  • flat formalization; tall formalization
Correct Answer: a narrow span of control; a wide span of control
Explanation:

Span of control is the number of employees a manager is responsible for. If a manager is responsible for leading 2 subordinates, in most instances, this level would be considered a narrow span of control. If a manager is responsible for 10 employees, typically, this number would be considered a wide span of control.

Question 11
Multiple Choice
Easy
Span of control Exam

Which of the following is associated with decentralization in decision making?

  • moderate spans of control
  • tall spans of control
  • wide spans of control
  • narrow spans of control
  • flat spans of control
Correct Answer: wide spans of control
Explanation:

Some elements of an organization's structure seem to go hand-in-hand with other elements. For example, wide spans of control tend to be associated with decentralization in decision making.

Question 12
Multiple Choice
Easy
Strategic plan Exam

Which of the following statements about companies that adopt a low-cost producer strategy is True?

  • They believe that people will pay more for a product that is unique in some way.
  • They rely on selling products at the lowest possible cost.
  • They depend on being able to adjust to changing environments quickly.
  • Such companies are more likely to take an organic approach to organizational design.
  • They focus on supplying high-quality differentiated products to customers.
Correct Answer: They rely on selling products at the lowest possible cost.
Explanation:

Companies that focus on a low-cost producer strategy rely on selling products at the lowest possible cost.

Glossary:

Selling: When the leader explains key issues and provides opportunities for clarification.

Question 13
Multiple Choice
Easy
Strategic plan Exam

Which of the following statements about companies that adopt a differentiation strategy is True?

  • They believe that people will pay more for a product that is unique in some way.
  • Their focus is on being as efficient as they can be.
  • They rely on selling products at the lowest possible cost.
  • They are more likely to take a mechanistic approach to organizational design.
  • They concentrate on developing large quantities of the same product, thereby providing cost advantages to their customers.
Correct Answer: They believe that people will pay more for a product that is unique in some way.
Explanation:

Rather than focusing on supplying a product or service at the lowest cost, companies that adopt a differentiation strategy believe that people will pay more for a product that's unique in some way.

Glossary:

Inimitable: Incapable of being imitated or copied.

Question 14
True False
Easy
Strategic plan Exam

Companies that follow a low-cost producer strategy believe that people will pay more for a product that is unique in some way.

True
False
Correct Answer: False
Explanation:

Companies that focus on a low-cost producer strategy rely on selling products at the lowest possible cost. To do this well, they have to focus on being as efficient as they can be.

Question 15
Multiple Choice
Easy
Strategic plan Exam

Company strategy refers to

  • the method by which an organization transforms inputs into outputs.
  • the degree to which tasks in an organization are divided into separate jobs.
  • customers, competitors, suppliers, distributors, and other factors external to the firm.
  • an organization's objectives and goals and how it tries to capitalize on its assets to make money.
  • how jobs and tasks are divided and coordinated between individuals and groups within the company.
Correct Answer: an organization's objectives and goals and how it tries to capitalize on its assets to make money.
Explanation:

A company strategy describes an organization's objectives and goals and how it tries to capitalize on its assets to make money.

Glossary:

Company Strategy: An organization’s objectives and goals and how it tries to capitalize on its assets to make money.