Chapter 8: Organizational Structure

Question 1

Organization Chart

Answer 1

depicts the positions in the firm and the way they are arranged.

Question 2

Differentiation

Answer 2

organization is composed of many units that work on different kinds of tasks, using different skills and work methods.
Integration: differentiated units are put back together so that work is coordinated into an overall product.

Question 3

Division of Labor

Answer 3

work of the organization is subdivided into smaller tasks.

Question 4

Specialization

Answer 4

refers to the fact that different people or groups often perform specific parts of the larger task.

Question 5

Coordination

Answer 5

refers to the procedures that link the various parts of the organization to achieve the organization’s overall mission.

Question 6

Authority

Answer 6

the legitimate right to make decisions and to tell people what to do.

Question 7

The Vertical Structure

Answer 7

an organization where management goes vertical

Question 8

hierarchy

Answer 8

the authority levels of the organizational pyramid.

corporate governance: term describing the oversight of the firm by its executive staff and board of directors.

Question 9

Subunits

Answer 9

subdivisions of an organization

Question 10

Span of control

Answer 10

number of subordinates who report directly to an executive or supervisor.

Question 11

delegation

Answer 11

assignment of the authority and responsibility to a subordinate at a lower level

Question 12

responsibility

Answer 12

that person is assigned a task that he or she is supposed to carry out

Question 13

accountability

Answer 13

means the subordinate’s manager has the right to expect the subordinate to perform the job and the right to take corrective action if the subordinate fails to do so.

Question 14

centralized organization

Answer 14

important decisions made at the top

Question 15

decentralized organization

Answer 15

more decisions are made at lower levels

Question 16

Horizontal Structure

Answer 16

departmentalized: as tasks become increasingly complex, the organization must be subdivided into smaller units or departments.

Question 17

line departments

Answer 17

those that have the responsibility for the principal activities of the firm.

Question 18

staff departments

Answer 18

those that provide specialized or professional skills that support line departments.

Question 19

departmentalization

Answer 19

subdividing an organization into smaller subunits

Question 20

functional organization

Answer 20

jobs (and departments) are specialized and grouped according to business functions and the skills they require: production, marketing, human resources, research and development, finance, accounting, and so forth.

Question 21

divisional organization

Answer 21

departmentalization that groups units around products, customers, or geographic regions.

Question 22

matrix organization

Answer 22

hybrid form of organization in which functional and divisional forms overlap.
managers and staff personnel report to two bosses - a functional manager, and a divisional manager.

Question 23

unity-of-command principle

Answer 23

states that a person should have only one boss