Test Bank Of Business Essentials 8th Canadian Edition By Ronald J. Ebert

Test Bank Of Business Essentials 8th Canadian Edition By Ronald J. Ebert

Chapter 7 Organizing the Business Enterprise

7.1 Multiple-Choice Questions

1) Organizational structure refers to
A) the process that is used to develop an organizational chart.
B) determining which employees report to whom.
C) the specification of the jobs to be done within a business and how those jobs relate to one another.
D) determining how best to use available material resources.
E) structuring the necessary resources to complete a particular task.
Answer: C
Diff: 2 Type: MC Page Ref: 150
Skill: Knowledge
Objective: 7.1

2) Which of the following is correct with respect to organizational structure?
A) Once an organizational structure is in place, it tends not to change much until the next major change is made.
B) With the busyness that is evident in most organizations, structure may often develop without much planning.
C) The organization’s purpose, mission, and strategy are not particularly important factors in the structure an organization adopts; rather, the most important factor is executive preferences.
D) An organization’s structure is largely the result of rational planning, and the preferences of managers do not generally influence the decision of which structure to adopt.
E) All of these are correct.
Answer: B
Diff: 2 Type: MC Page Ref: 150
Skill: Comprehension
Objective: 7.1

3) Roger is analyzing the jobs to be done in his company, their specific overall purpose, and how the jobs relate to each other. Roger is analyzing the company’s
A) job descriptions.
B) organizational chart.
C) organizational structure.
D) departmentalization.
E) chain of command.
Answer: C
Diff: 1 Type: MC Page Ref: 150
Skill: Comprehension
Objective: 7.1

4) When Ford executives announced changes intended to eliminate corporate bureaucracy, speed decision making, and improve communication and working relationships among people at different levels of the organization, these changes were examples of the ________ function of management.
A) organizing
B) planning
C) directing
D) controlling
E) none of these
Answer: A
Diff: 2 Type: MC Page Ref: 150
Skill: Comprehension
Objective: 7.1

5) Which of the following clarify structure and show employees where they fit into a firm’s operations?
A) Organization charts
B) Responsibility
C) Departmentalization
D) Delegation
E) The mission statement
Answer: A
Diff: 1 Type: MC Page Ref: 151
Skill: Knowledge
Objective: 7.1

6) What is the purpose of organization charts?
A) They portray the firm’s structure and the relationship of employees within the organization.
B) They are a valuable tool for companies experiencing a large increase in research and development expenditures on new products.
C) They show the grouping of jobs into logical units.
D) They are used to plan marketing campaigns.
E) They determine which jobs need to be accomplished and who will perform them.
Answer: A
Diff: 2 Type: MC Page Ref: 151
Skill: Comprehension
Objective: 7.1

7) Which term is defined as a physical depiction of the company’s structure showing employee titles and their relationship to one another?
A) Chain of command
B) Organizational structure
C) Organization chart
D) Organizational strategy
E) Organizational determinants
Answer: C
Diff: 1 Type: MC Page Ref: 151
Skill: Knowledge
Objective: 7.1
8) What would an organization use to show a new employee his/her position in the firm and its relationship to other positions?
A) Manual of positions and relationships
B) Departmentalization plan
C) Organizational strategy
D) Job specialization list
E) Organization chart
Answer: E
Diff: 1 Type: MC Page Ref: 151
Skill: Knowledge
Objective: 7.1

9) What is the meaning of the individual boxes on an organization chart?
A) Each box is appropriately labelled as a function or a process in the flow of materials/services.
B) Each box represents a job within the company.
C) Each box indicates a different geographical departmentalization.
D) Each box represents a group of people.
E) Each box represents a product or service provided by the organization.
Answer: B
Diff: 1 Type: MC Page Ref: 151
Skill: Comprehension
Objective: 7.1

10) What is the meaning of the solid lines connecting the boxes on an organization chart?
A) They identify the relationship of the important staff departments.
B) They identify the level of specialization within the organization.
C) They identify the reporting relationship, or chain of command, within the organization.
D) They identify the relationship between the processes in the flow of materials/services.
E) They identify the products or services available from the organization.
Answer: C
Diff: 1 Type: MC Page Ref: 151
Skill: Comprehension
Objective: 7.1

11) The chain of command has all of the following characteristics except
A) solid lines in an organization chart show the chain of command.
B) when the chain of command is not clear, many different kinds of problems can arise.
C) it shows the flow of decision-making power in a firm.
D) the chain of command shows both the informal and formal organizational structure.
E) it shows the reporting relationships within a business.
Answer: D
Diff: 2 Type: MC Page Ref: 151
Skill: Comprehension
Objective: 7.1
12) Scott is looking at a chart showing the company’s organization structure. He notices that there is a solid line connecting Judy and Charles to Kara. This means that
A) all reports created by Judy and Charles must be sent to Kara.
B) the product flows from Judy and Charles to Kara.
C) there is a direct telephone line between Judy and Charles and Kara.
D) Kara has more seniority than Judy or Charles.
E) Judy and Charles both report to Kara.
Answer: E
Diff: 2 Type: MC Page Ref: 151
Skill: Comprehension
Objective: 7.1

13) Businesses spend time developing organization charts because
A) charts portray the firm’s structure and the relationship of employees within the organization.
B) a chart determines which jobs need to be accomplished and who will perform them.
C) charts are a valuable tool for companies that are involved in the research and development of new products.
D) charts are useful when planning marketing campaigns.
E) all of these.
Answer: A
Diff: 1 Type: MC Page Ref: 151
Skill: Comprehension
Objective: 7.1

14) Whether a business is large or small, the starting point in developing its organization structure is
A) determining a strategic plan.
B) appointing a board of directors.
C) establishing a mission statement.
D) determining who will do what.
E) None of these are correct.
Answer: D
Diff: 1 Type: MC Page Ref: 151
Skill: Knowledge
Objective: 7.1

15) The chain of command illustrates ________, while the organization chart illustrates ________.
A) job specialization; the company’s structure
B) reporting relationships; job specialization
C) centralization; decentralization
D) functional departmentalization; job specialization
E) reporting relationships; the company’s structure
Answer: E
Diff: 3 Type: MC Page Ref: 151
Skill: Knowledge
Objective: 7.1
16) The process of identifying the specific jobs that need to be done and designating the people who will perform them leads to
A) segmentation.
B) departmentalization.
C) job specialization.
D) group tasks.
E) mission enhancement.
Answer: C
Diff: 1 Type: MC Page Ref: 151
Skill: Comprehension
Objective: 7.2

17) At a steel company, some employees transport scrap steel while others operate shredding equipment. What does this example demonstrate?
A) Departmentalization
B) Specialization
C) Functionalization
D) Responsibility
E) Innovation
Answer: B
Diff: 1 Type: MC Page Ref: 151
Skill: Comprehension
Objective: 7.2

18) In a Disney animated feature, the job of one cartoonist may be to draw the face of a single character throughout the feature. This is an example of
A) mission enhancement.
B) segmentation.
C) departmentalization.
D) group tasks.
E) job specialization.
Answer: E
Diff: 2 Type: MC Page Ref: 151
Skill: Comprehension
Objective: 7.2

19) Grouping jobs into logical units is called
A) departmentalization.
B) process management.
C) specialization.
D) development of the grapevine.
E) authorization.
Answer: A
Diff: 1 Type: MC Page Ref: 152
Skill: Knowledge
Objective: 7.2
20) The two basic building blocks of all business organizations are
A) specialization and departmentalization.
B) profit centres and divisions.
C) functional and divisional departmentalization.
D) managers and workers.
E) centralization and decentralization.
Answer: A
Diff: 2 Type: MC Page Ref: 161-52
Skill: Knowledge
Objective: 7.2

21) Michael is in the process of taking the department’s overall “job” and breaking it down into smaller and smaller “jobs.” Michael is working on
A) a matrix structure.
B) job specialization.
C) departmentalization.
D) job classification.
E) job analysis.
Answer: B
Diff: 1 Type: MC Page Ref: 151
Skill: Comprehension
Objective: 7.2

22) Karen, a human resources manager, is looking at the specific jobs in her organization. She would like to see what tasks each employee is doing. She is primarily investigating
A) organization chart.
B) departmentalization.
C) chain of command.
D) organizational structure.
E) job specialization.
Answer: E
Diff: 2 Type: MC Page Ref: 151
Skill: Comprehension
Objective: 7.2

23) Which of the following is correct with regard to job specialization?
A) It is a new idea.
B) Its application is limited to factory work.
C) It is a natural part of organizational growth.
D) It makes it more difficult to replace people who leave the organization.
E) All of these are correct.
Answer: C
Diff: 1 Type: MC Page Ref: 151
Skill: Comprehension
Objective: 7.2
24) Departmentalization refers to
A) the number of employees managed by a single supervisor.
B) the level at which decisions are made.
C) the duty to perform an assigned task.
D) the grouping of specialized jobs into logical units.
E) the establishment of a unit that is responsible for its own costs and profits.
Answer: D
Diff: 1 Type: MC Page Ref: 152
Skill: Knowledge
Objective: 7.2

25) David has grouped some jobs together in such a way that they can be treated as if they are a separate business which is responsible for its costs, revenues, and profits. David has created a
A) functional department.
B) profit centre.
C) departmentalized work group.
D) matrix structure.
E) a divisionalized department.
Answer: B
Diff: 1 Type: MC Page Ref: 153
Skill: Comprehension
Objective: 7.2

26) ComputerLand’s structure is set up so that each location is responsible for its own costs and profits. Each location is
A) a specialized unit.
B) a process department.
C) a profit centre.
D) a product department.
E) a centralized department.
Answer: C
Diff: 1 Type: MC Page Ref: 153
Skill: Comprehension
Objective: 7.2