org theory exam 1

Jeffrey Bezos saw the opportunity to sell books over the Internet, which was growing. So he started a Web site where people could buy new books and sell there existing books. This was the first Web site dedicated to buying or selling books. This is an example of

entrepreneurship

Which of the following is a part of an organizations' inputs?

Money and capital

An organization

facilitates the division of labor

Which of the following is most likely to be the result of the formation of an organization?

It exerts pressure on individuals to conform to task and production requirements.

A toy maker sells a large number of toys and due to the large volume production of the same toys it is able to acquire the raw materials required to make the same toys at a cheaper price than the competition. In this case, the toy maker is taking advantage of

economies of scale

An automobile company modifies its existing automated production line so that it can manufacture two more models of cars using the same facility. This shows that the automobile manufacturer is planning to take advantage of

economies of scope

________ costs are the costs associated with negotiating, monitoring, and governing exchanges between people.

Transaction

When local store managers try to spot trends and changes so that they can respond to customer needs, they are attempting to

manage the external environment

Which of the following terms refers to the study of how organizations function and how they affect and are affected by the environment in which they operate?

organizational theory

The principal purpose of organizational structure is to ________.

control how people coordinate their actions and use resources.

Organizational culture ________.

controls organizational members' interactions with each other.

________ is the process by which managers select and manage aspects of structure and culture so an organization can control the activities necessary to achieve its goals.

Organizational design

The process by which organizations move from their present state to some desired future state is called ________.

organizational change

Which of the following definitions best describes a contingency?

It is an event that might occur and must be planned for.

Which of the following terms refers to the specific pattern of decisions and actions that managers take to use core competences to achieve a competitive advantage and outperform competitors?

strategy

An organization's ________ determine how effectively managers are able to coordinate and motivate workers.

structure and culture

The ________ approach to measuring organizational effectiveness evaluates the organization's ability to convert skills and resources into goods and services efficiently.

technical

The ________ approach allows managers to evaluate the organization's ability to be innovative and function quickly and responsively.

internal systems

Which of the following goals set by an organization to measure effectiveness indicates that it is using the internal systems approach to measure organizational effectiveness?

increase rate of product innovation

Which of the following terms refers to the goals that explain why the organization exists and what it should be doing?

mission

________ are people who have an interest or claim in an organization, in what it does, and in how well it performs.

stakeholders

The rewards that stakeholders receive for participating in an organization are called ________.

inducements

Stakeholders will generally participate in an organization if ________.

they receive inducements that exceed the value of the contributions they are required to make.

Which of the following groups of stakeholders receives inducements in the form of dividends and stock appreciation?

shareholders.

Which of the following groups of stakeholders receives inducements in the form of bonuses, status, and power?

Managers.

In an organization, the position of the ________ is one of trusteeship.

members of the board of directors.

Which of the following would be considered to be the lowest level of management in a chain of command?

functional managers

A(n) ________ problem is a problem in determining managerial accountability that arises when delegating authority to managers.

agency

Which of the following is generally used to solve agency problems?

stock-based compensation schemes.

As per the ________ Act, CEOs, COOs, and the chief financial officer are required to sign off on their company's balance statements so they can be held personally and legally liable for accidental or deliberate mistakes found later.

sarbanes-oxley

A manager decides to locate a manufacturing plant in a location that maximizes the overall benefits to the stakeholders. Which model of ethics is being used by the manager?

utilitarian.

A manager decides to distribute the pool of bonus money equally among all of the subordinates, even though some performed better than others. Which model of ethics is being used by him in making this decision?

justice.

As per the ________ model of ethics, an ethical decision is one that produces the greatest good for the greatest number of people.

utilitarian

Which of the following is a model of ethics?

utilitarian

A doctor was banned from practicing medicine because he consistently prescribed unnecessary procedures. This doctor violated ________.

professional ethics

The "tragedy of the commons" illustrates that ________.

the rational pursuit of individual self interest results in a collective disaster.

The reputation effect ______.

reduces transaction costs.

Which of the following organizations is most likely to commit unethical and illegal acts such as collusion, price fixing, or bribery?

an organization that is struggling to survive

A son of a mobster believes that it is ethical to steal if it is in the best interest of his family. This view comes from ________.

personal ethics

________ occurs when an employee informs an outside person or agency, such as a government agency, a newspaper, or television reporter, about an organization's (its managers') illegal or immoral behavior.

whistle-blowing

The term ______ refers to the particular range of goods and services that the organization produces, and the customers and other stakeholders it serves?

Organizational domain

______ are a part of an organization's specific environment?

Suppliers

The specific environment consists of forces from ______?

Outside stakeholder groups that directly affect an organization's ability to secure resources

Which of the following statements is definitely true regarding environmental complexity?

The more interconnected the forces in an organization's specific and general environments, the more uncertainty the organization faces.

Which of the following is most likely to increase the environmental complexity for a company?

The company diversifies its business in an entirely new industry

When a company decides to produce different products for different customers, ______?

Environmental complexity increases

An organization's environment will be more uncertain when ______?

Specific and general forces in the environment become interconnected

An organization used to obtain supplies from 3,000 suppliers, but now deals with less than 300. By making this change, the organization has reduced its environmental ______?

Complexity

Which of the following is most likely to increase the environmental dynamism for a company?

The company enters into a foreign market with new products

Under which of the following situations, a company is most likely to experience high levels of environmental richness?

The company has a monopoly in its industry

As the ______, the environmental uncertainty decreases?

Environmental complexity decreases

Which of the following theories states that an organization must respond to the needs and demands of other organizations in its environment?

Resource dependence theory

A(n) ______ is a linkage that results when a director from one company sits on the board of another company?

Interlocking directorate

Which of the following terms refers to a strategy that manages symbiotic interdependencies by neutralizing problematic forces in the specific environment?

Cooptation

A ______ is an agreement that commits two or more companies to share their resources to develop joint new business opportunities?

Strategic alliance

A ______ is a strategic alliance among two or more organizations that agree to establish and share the ownership of a new business?

Joint venture

Typically, when a company gets associated with a third-party linkage mechanism, ______?

The company can react more easily to the dynamism of the environment

Which of the following methods of managing competitive interdependencies is most likely to be used by an organization to monopolize an industry and become the sole player in the industry?

Enter into a merger

______ is the process of moving a value creation activity that was performed inside an organization to outside where it is done by another company?

Outsourcing

Internal transaction costs are called ______ costs to distinguish them from the transaction costs of exchanges between organizations in the environment?

Bureaucratic

______ is the process by which an organization allocates people and resources to organizational tasks and establishes the task and authority relationships that allow the organization to achieve its goals?

Differentiation

______ is the power to hold people accountable for their actions and to make decisions about how to invest and use organizational resources?

Authority

A ______ is a subunit composed of a group of people, working together, who possess similar skills or use the same kind of knowledge, tools, or techniques to perform their jobs?

Function

A(n) ______ is a classification of people in an organization according to authority and rank?

Hierarchy

______ refers to the way in which an organization groups organizational tasks into roles and roles into subunits?

Horizontal differentiation

Which of the following refers to the way in which an organization designs its hierarchy of authority and creates reporting relationships to link organizational roles and subunits?

Vertical differentiation

______ is the process of coordinating various tasks, functions, and divisions to work together and not be at cross-purposes?

Integration

A firm hires a supervisor to handle the communication between two functions. Which of the following integrating mechanisms is used in this case?

Integrating role

______ is an integration mechanism where a specific manager is given responsibility for coordinating with managers from other subunits on behalf of his or her subunit?

Liaison role

Which of the following integrating mechanisms is most appropriate for a complex and highly differentiated organization?

Integrating role

Which of the following is a difference between an integrating role and a liaison role?

An integrating role is a full-time managerial position whereas a liaison role is a task involved in a full-time job.

Top-level managers make all the important decisions in an organization. This organization is said to be ______?

Centralized

An advantage of decentralization is that it ______?

Promotes flexibility and responsiveness within an organization

______ refers to conformity to specific models or examples, defined by sets of rules and norms, that are considered proper in a given situation?

Standardization

Which of the following refers to the use of written rules and procedures to standardize operations?

Formalization

______ is the process by which organizational members learn and internalize the norms of an organization?

Socialization

An organization uses task forces to coordinate the activities of various departments. Employees also work in teams to increase coordination. This organization most likely has a(n) ______ structure?

Organic

A mechanistic structure is characterized by ______?

High levels of standardization

______ structures promote flexibility, so people initiate change and can adapt quickly to changing conditions?

Organic

______ is a management approach in which the design of an organization's structure is tailored to the sources of uncertainty facing an organization?

Contingency approach

Which of the following is most likely to be done by an organization to improve its ability to control its members and influence their behavior?

Increase the number of levels in its managerial hierarchy

Which of the following statements is most likely to be true regarding a tall organization?

A tall organization has more managers to direct and control employees' activities than does a flat organization with the same number of employees.

Which of the following statements is true regarding organizational structure?

Most organizations have a pyramid-like structure and fewer and fewer managers at each level up in the hierarchy.

As the number of hierarchical levels increases, ______?

Communication problems get progressively worse

According to the principle of minimum chain of command, ______?

An organization should be kept as flat as possible

As compared to a tall organization, an organization with a flat structure is most likely to experience ______?

Fewer motivation problems

Which of the following is most likely to happen if the span of control is too wide?

Subordinates will shirk responsibility.

Which of the following factors is most likely to increase vertical differentiation within an organization because it leads to the creation of many subunit hierarchies within the organization?

Increasing horizontal differentiation

Standardization ______?

Enables a manager to increase his or her span of control

With reference to Weber's principles of bureaucratic structure, which of the following terms refers to the authority a person possesses because of his or her position in an organization?

Rational-legal authority

Which of the following characteristics of an organization is recommended by Weber's principles of bureaucratic structure?

Use of standard operating procedures

As an organization grows, ______?

An increase in the number of managers is less than proportional to the increase in size

In the case of a bureaucracy, if managers fail to control the development of the organizational hierarchy properly then the organization is most likely to become ______?

Unresponsive to the needs of customers

Which of the following statements is true regarding a flat organization?

Managers of a flat organization possess relatively more authority than those of a tall organization.

According to the principle of ______, an organization should choose the minimum number of hierarchical levels consistent with its goals and the environment in which it operates?

Minimum chain of command

Bureaucracy ______?

Separates the position from the person