Sample Chapter

Organization Theory And Design 3rd Edition by Ann Armstrong – Test Bank
Sample  Questions



Indicate whether the statement is true or false.


1. Integrator roles require excellent people skills.

a. True
b. False


2. Grouping by output means that people are organized by similar functions or work processes, with similar knowledge and skills.

a. True
b. False


3. One advantage of the divisional structure is that coordination of functional matters for any one given product is maximized.

a. True
b. False


4. Pressure for innovation is sufficient cause for adopting the matrix structure.

a. True
b. False


5. The virtual organization may be viewed as a central hub surrounded by a network of outside specialists.

a. True
b. False


6. Horizontal linkages are used to coordinate activities between the top and bottom of an organization and are designed primarily for control of the organization, whereas vertical linkages refer to the amount of communication and coordinate across organizational departments.

a. True
b. False


7. The horizontal structure organizes employees around core processes.

a. True
b. False


8. Project teams can be thought of as permanent task forces.

a. True
b. False


9. A strength of the divisional structure compared to the functional structure is that the former tends to decentralize decision making.

a. True
b. False


10. The organizational chart is the visual representation of a whole set of underlying activities and processes in an organization.

a. True
b. False


11. A full-time integrator such as a project manager has the various functional managers—finance, engineering, marketing—reporting to him or her.

a. True
b. False


12. It would be logical for a full-time integrator to have no direct subordinates.

a. True
b. False


13. A task force is located in one department but has responsibility for communicating and achieving coordination with another department.

a. True
b. False


14. Rules and plans are lower on the ladder of mechanisms for vertical linkage than is adding positions to the hierarchy.

a. True
b. False


15. Extreme outsourcing is also known as a modular structure.

a. True
b. False


16. Functional grouping puts together employees who perform similar work processes and typically have similar knowledge and skills.

a. True
b. False


17. One disadvantage of the divisional structure is that the organization loses potential economies of scale.

a. True
b. False


18. As the amount of required horizontal coordination increases, the costs of time and resources decrease.

a. True
b. False


19. A horizontal structure is characterized by coordination around geographical areas.

a. True
b. False


20. Divisional structure may be organized by product, services, major projects or programs, or profit centres.

a. True
b. False


21. One advantage of the geographical structure is that the organization can adapt to specific needs of its own region.

a. True
b. False


22. One disadvantage of the geographical structure is that employees and operations tend to focus on global organizational goals rather than more regionally specific goals.

a. True
b. False


23. There are two variations of matrix structure: the functional matrix and the divisional matrix.

a. True
b. False


24. A weakness of the functional structure is that it results in a slow response time to environmental change.

a. True
b. False


25. Many companies are hybrids as they combine characteristics of multiple structures to take advantage of the strengths and avoid some of the weaknesses.

a. True
b. False


Indicate the answer choice that best completes the statement or answers the question.


26. What structural device includes periodic reports, written information, and computer-based communications distributed to managers?

a. rules and plans
b. hierarchical referral
c. vertical information systems
d. task forces


27. What is one of the benefits of a matrix structure?

a. It maintains dual-authority relationships.
b. It is most effective in an unstable environment.
c. It is designed for use within a bureaucracy.
d. It is known for its quality of centralization of key decisions for organizational control.


Organizational Chart 3.2



28. Refer to Organizational Chart 3.2. From the perspective of an organizational structure analyst, what is the best assessment of the structure shown in Organizational Chart 3.2?

a. To lower fixed costs, this organization should change to a divisional structure with customer account executives heading each major division.
b. To improve the communications flow, it is recommended that this company add a full-time integrator between each account executive and operations head.
c. The customer account executives can be considered to be integrators.
d. The organization does not take advantage of economies of scale within the operations department.


29. Refer to Organizational Chart 3.2. Which statement best describes the structure of this organization?

a. The structure is divisional.
b. There is duplication of activities between the customer accounts and marketing departments.
c. The structure is primarily functional.
d. Hierarchical referral is the best means for coordination in this organization.


30. The matrix structure is the correct structure when three conditions are met. What is one of the three conditions?

a. Pressure exists to share scarce resources across product lines.
b. Technical quality is not very important.
c. The environmental domain of the organization is simple.
d. The environmental domain of the organization is certain and stable.


Organizational Chart 3.1


31. Refer to Organizational Chart 3.1. From the perspective of an organizational structure analyst, what is the best assessment of the structure shown in Organizational Chart 3.1?

a. It could have a weakness of slow response to environmental changes that require coordination across functional areas.
b. It should be changed immediately to a horizontal grouping if the company is growing.
c. It would have increased the span of control for the general manager when the assistant manager position was added.
d. It has caused high levels of bureaucracy.


32. Which of the following are used to coordinate activities between the top and bottom of an organization and are designed primarily for control of the organization?

a. horizontal linkages
b. functional groupings
c. vertical linkages
d. divisional groupings


33. What is one of the benefits of the horizontal structure?

a. It promotes flexibility and rapid response to changes in customer needs.
b. Because team members become recognized experts in a single area, less cross-training that characterizes other organizational forms is needed
c. Boundaries between departments are clearly defined to ensure functional expertise.
d. The horizontal structure is easy to implement, even if the organization has been rooted in a strict vertical, hierarchical structure.


34. What is one of the benefits of a product or divisional structure?

a. It is best suited to fast change in an unstable environment.
b. It centralizes decision making.
c. It facilitates integration and standardization across product lines.
d. It allows units to adapt to differences in products, regions, and clients.


35. What horizontal linkage mechanism includes a liaison person who communicates and coordinates activities between other departments?

a. direct contact
b. task forces
c. information systems
d. teams


36. What are too much conflict and delayed decision-making symptoms of?

a. bureaucracy
b. structural alignment
c. structural deficiency
d. lack of employee motivation


37. What is a potential weakness of a virtual network structure?

a. Overhead costs are increased significantly due to the need to manage multiple locations.
b. A great deal of time is required to manage relationships with contract partners.
c. Smaller organizations find it difficult to access talent needed to achieve their goals.
d. Contract partners create a potential conflict of interest.


38. What is characteristic of an organization with a functional structure?

a. It reacts quickly to environmental changes.
b. It diminishes economies of scale compared to the divisional structure.
c. It often results in hierarchy overload.
d. It cannot work in small organizations.


39. Why would an organizational structure researcher say horizontal linkage mechanisms are important to an organization?

a. They cause employees to feel a lack of unity of command.
b. They coordinate functional areas when added to a divisional structure.
c. They confuse vertical linkages.
d. They enable people in different functional departments to exchange information.


40. When does a liaison role exist?

a. when there is direct contact between managers affected by a problem
b. when there is an exchange of paperwork about a problem
c. when a temporary committee composed of representatives from each department affected by a problem is formed
d. when a person located in one department is required to communicate and coordinate other departments


41. What is a key aspect of an organization whose employees are assigned to core processes along a horizontal structure?

a. Self-directed teams are the basis of the organizational design and performance.
b. The dual-authority structure facilitates communication and coordination.
c. The culture is closed, untrustworthy, non-collaborative, and focused on individual accomplishments.
d. The structure is grouped based on organizational outputs.


42. Which statement best defines the role of a “full-time integrator”?

a. He or she improves vertical linkage of the organization.
b. He or she is responsible for the entire project and is located outside of any one department.
c. He or she reports to one of the functional departments being coordinated.
d. He or she has the responsibility of coordinating only one department.


Organizational Chart 3.2



43. Refer to Organizational Chart 3.2. Which statement is the best assessment of this organizational structure?

a. If well managed, it achieves coordination both within and between customer accounts.
b. Efficiency and economy of scale are gained in the functional operations departments.
c. It facilitates in-depth artistic and technical competence in operations.
d. Balanced joint formal authority between functional and customer account heads ensures decisions not being “bumped up” to the president.


Organizational Chart 3.1


44. Refer to Organizational Chart 3.1. What are some of the strengths of the structure shown in Organizational Chart 3.1?

a. clear and simple product responsibility
b. the hierarchy makes activity cost determination straightforward
c. suitability for an unstable environment
d. economies of scale


45. According to a researcher in organizational structure, what is important about managing information in an organization?

a. Information should flow horizontally, but not vertically.
b. Information should flow vertically, but not horizontally.
c. The structure should fit the information requirements of the organization.
d. It is not possible to give people too much information.


46. Which of the following is being used when problems and decisions are funnelled to top levels of the hierarchy for resolution?

a. centralized decision making
b. functional structure
c. horizontal linkage
d. full-time integration


Organizational Chart 3.1


47. Refer to Organizational Chart 3.1. What can we accurately conclude from Organizational Chart 3.1?

a. There should be no assistant manager.
b. The company has a functional structure.
c. The company has a divisional structure.
d. The general manager has a span of control of five.


48. A company wishes to maintain its basic functional structure, but is having difficulty coordinating across departments because of growth. What should it do?

a. It should develop horizontal linkages.
b. It should realize that the functional structure cannot work and replace it with a matrix structure.
c. It may find it necessary to abolish liaison roles.
d. It can profit most by adding more functional departments.


49. What is a potential weakness of the horizontal structure?

a. It is inflexible and slow to respond to rapid changes in customer needs.
b. Determining core processes to organize around is often difficult.
c. There is a failure to promote teamwork.
d. Organizational goals are not well understood by employees.


50. What is likely to be the result if a domestic company that manufactures four different types of products changes from a functional structure to a divisional structure?

a. lower fixed costs
b. better coordination within a product area between different functional areas
c. more technical development within functional areas
d. more centralized decision making


51. Two types of hybrid structures are common today. What two things do these structures combine?

a. product and matrix structures; product and horizontal structures
b. functional and divisional structures; functional and horizontal structures
c. marketing and sales; marketing and logistics
d. horizontal and teams; vertical and authority


52. What element of organizational structure deals with the pattern of interactions among employees?

a. the design of systems to ensure effective communication, coordination, and integration of effort across each position
b. the identification of the tasks and processes for each position within the organization
c. the grouping together of individuals into departments and of departments into the total organization
d. designating formal reporting relationships, including the number of levels in the hierarchy and the span of control of managers and supervisors


53. Chantal Roy is the vice-president of marketing for her company. Other officers in the company include the vice-presidents of engineering, production, finance, and human resource management. What type of structure does this small company have?

a. product
b. matrix
c. functional
d. hybrid


54. Which of the following would best be linked with “full-time integrator”?

a. product manager
b. task force
c. direct contact
d. vertical control


55. When is the geographic structure the correct structure to implement?

a. Different regions require different operations and there is no reason to link with other regions.
b. Different regions require similar operations and there are many reasons to link with other regions.
c. Different regions have similar product tastes and preferences.
d. Different regions require vertical information linkages.


56. Which of the following is made up of organizationally or geographically dispersed members who are linked primarily through advanced information and communications technologies?

a. virtual teams
b. task forces
c. full-time integrators
d. information systems


57. What is one of the benefits of a virtual network structure?

a. Managers have hands-on control over all their employees and organizational activities.
b. Employee loyalty is increased due to a strong, shared culture.
c. Organizations gain immediate scale without huge investments in factories.
d. Organizations gain greater insight into different national cultures gaining valuable market information.



58. What are the strengths and weaknesses of the horizontal structure?


59. How can rules and plans serve as an information-linking mechanism in organizations?


60. What are the two types of hybrid structure? Discuss each type.


61. What qualifications would be expected for the position of full-time integrator? Why?


62. Compare and contrast a functional matrix and a project matrix.


63. List and explain the structural devices used to achieve vertical linkage.


64. What symptoms of structural deficiency would make a firm consider changing its structure?


65. Contrast the following structural alternatives to achieving horizontal integration: liaison, task force, and full-time integrator.


66. Assume that you are being interviewed for the position of project manager by a corporate recruiter. The recruiter says, “We’ve been having some problems with product communication and so we have just created new project manager positions. I see on your transcript that you took a course in organizational theory. Tell me what you learned about project managers, and why you feel that this would be a good position for your career in management.”


67. Explain the information processing perspective for the study of organizational structure.


68. Explain what we can and cannot learn from an organizational chart. What structural and contextual variables studied in organizational theory appear on the organizational chart?


69. What are the similarities and differences between a functional structure with horizontal linkages and a divisional structure?


70. List and describe the conditions of the matrix structure.


71. Describe Morgan’s eight images of organizational design. How might organizations use the images for designing an appropriate structure?


72. List and give examples of two symptoms of structural deficiency provided in your textbook. Explain how an organization might cope with those two symptoms of structural deficiency.
Indicate whether the statement is true or false.


1. Generalists are generally more competitive than specialists in the narrow area in which their domains overlap.

a. True
b. False


2. Variation, formation, and selection are the stages in the process of change in the environment.

a. True
b. False


3. In the positive view of partnerships, dependence on another company is seen to increase risk rather than reduce it.

a. True
b. False


4. A niche is a domain of unique environmental resources and needs.

a. True
b. False


5. Institutional similarity is the emergence of a common structure and approach among organizations in the same field.

a. True
b. False


6. The current management philosophy is that organizations should be autonomous and separate, trying to outdo other companies in order to grow and prosper.

a. True
b. False


7. In the population ecology model, large dependent companies have power over small suppliers.

a. True
b. False


8. Mimetic forces refers to the similarity that is brought between organizations from environmental influences such as governmental laws and legislative requirements.

a. True
b. False


9. The major reasons for collaboration between organizations are sharing risks when entering new markets, mounting expensive new programs, reducing costs, and enhancing organizational profile in selected industries or technologies.

a. True
b. False


10. Collaboration is being practised when companies join together to become more competitive as a bloc.

a. True
b. False


11. Within business ecosystems, managers learn to move beyond the traditional responsibilities of corporate strategy and designing hierarchical structures and control systems.

a. True
b. False


12. Universities, consulting firms, and professional training institutions develop norms among professional managers.

a. True
b. False


13. The resource dependence perspective argues that while organizations may attempt to control environmental resources, they also try to maintain their independence.

a. True
b. False


14. Coercive forces refers to organizations changing to achieve standards of professionalism.

a. True
b. False


15. Because of the diversity of products, services, and customers, generalists are able to reallocate resources internally to adapt to a changing environment, whereas specialists are not.

a. True
b. False


16. Given their flexibility, specialists are able to reallocate resources internally to adapt to a changing environment, whereas generalists are not.

a. True
b. False


17. Organizations use mechanisms of mimetic, coercive, or normative forces when they are acting under conditions of certainty.

a. True
b. False


18. The population ecology model claims that large companies cannot adapt to meet a changing environment, so new companies emerge with the appropriate form and skills to serve new needs.

a. True
b. False


19. The outcome of the mechanisms of mimetic, coercive, or normative forces is that organizations become more heterogeneous, to reflect the natural diversity among managers and environments.

a. True
b. False


20. The population ecology model focuses on organizational diversity and adaptation within a population of organizations.

a. True
b. False


21. The population ecology model tells us that even institutionalized organizations like McDonald’s are NOT permanent in the long run.

a. True
b. False


22. The institutional perspective explains why organizational diversity continuously increases with the appearance of new organizations filling niches left open by established companies.

a. True
b. False


23. The four perspectives of a framework of interorganizational relationships include resource dependency, population ecology, collaborative network, and re-engineering.

a. True
b. False


24. Many organizations are changing from a partnership orientation mindset to a traditional adversarial mindset.

a. True
b. False


25. The technical dimension of an organization is governed by expectations from the external environment.

a. True
b. False


Indicate the answer choice that best completes the statement or answers the question.


26. Which statement best describes the institutional view of the two essential dimensions of organization?

a. The institutional structure is that part of the organization most visible to the outside public.
b. The public dimension of the institutional structure is governed by norms of efficiency.
c. The technical dimension of the institutional structure will reflect environmental expectations rather than the demands of work activities.
d. The formal institutional structure and design process is rational with respect to workflow and products.


27. Which of the following is an example of a coercive force?

a. professionalism
b. innovation
c. environmental visibility
d. political law


28. What do coercive forces result in?

a. efficiency
b. professionalism
c. effectiveness
d. the appearance of legitimacy


29. Which term is defined as the general perspective that an organization’s actions are desirable, proper, and appropriate within the environment’s system of norms, values, and beliefs?

a. generalist strategy
b. legitimacy
c. niche
d. collaborative network


30. What does the institutional view argue?

a. Organizations do not have legitimacy from their stakeholders.
b. A market-based economy was not constructed in Russia because its institutions were corrupt.
c. When an organizational field is new, diversity is the norm, but later there is a pressure for them to be more similar.
d. Organizations have two essential dimensions: institutional and public.


31. What is the reason for organizational structural adaptation due to coercive forces?

a. dependence
b. duty
c. uncertainty
d. professionalism


32. Which approach focuses on organizational diversity and adaptation within a group of organizations?

a. collaborative networks
b. population ecology
c. interorganizational relationships
d. institutional perspective


33. Why do established organizations have a difficult time adapting to a rapidly changing environment?

a. They are inherently resistant to change.
b. There is often a heavy investment in plant and equipment and leadership has an established viewpoint that has been successful.
c. When the environment changes, no one can predict if the changes will affect them.
d. Leadership could change its approach, but it does not want to change.


34. Which theory argues that organizations try to minimize their reliance on other organizations for the supply of important materials and try to influence the environment to make sure the materials they need are available?

a. interorganizational theory
b. environmental resource theory
c. resource-dependence theory
d. economic-supply theory


35. Which perspective is included in institutional similarity?

a. Common structures emerge among organizations in the same field.
b. Common training of professionals (managers) results in common analytic processes among organizations in the same field.
c. Divergent structures are driven among organizations in the same field for the sake of diversity.
d. Divergent analytic processes among organizations in the same field emerge due to managers’ training in widely varying functional areas and varying degree programs.


36. What is an organization engaging in if it joins a trade association because it is having difficulty securing the main raw material for its production process?

a. interlocking directorships
b. a power strategy
c. a resource strategy
d. collaborative networks


37. Which statement is a basic assumption of the population ecology model?

a. Management competence is the biggest factor in the survival of organizations.
b. The environment determines which organizations survive or fail.
c. Principles of evolution are not applicable to organizations because the fittest don’t survive.
d. A community of organizations is a closed system.


38. Which statement best defines resource dependence theory?

a. A small supplier should count on price competition for locking in accounts.
b. A small supplier should lock in a single large company for the bulk of its sales.
c. Organizations will do whatever is needed to avoid dependence on the environment and increase their autonomy.
d. Organizations will set up dependencies when they become more self-reliant.


39. Which of the following is composed of norms and values from stakeholders?

a. the institutional environment
b. population ecology theory
c. the organizational ecosystem
d. institutional isomorphism


40. What is a characteristic of the current orientation toward partnerships between other organizations?

a. equity and fair dealing
b. contracts limiting the relationship
c. minimal up-front investment
d. efficiency and the organization’s own profits


41. Which of the following is evidence of mimetic forces in an organizational field?

a. reengineering
b. accounting standards
c. pollution controls
d. consultant training


42. Which perspective is included in mimetic forces?

a. Because of heavy interorganizational linkages, organizations are forced to behave similarly in order to maintain productive relationships.
b. Political and governmental processes, which organizations are subject to, force organizations to become similar.
c. In the face of uncertainty, organizations copy or model each other.
d. Diversity is maintained in order for organizations to find and maintain a marketing niche.


43. What do managers need to manage in an environment of a community of organizations?

a. profit making
b. stakeholders
c. horizontal structures
d. competition


44. What did the traditional orientation to other organizations involve?

a. long-term contracts
b. participation in partner’s product design and production
c. legal resolution of conflict
d. electronic linkages to share key information


45. As new organizational forms continue to emerge some fail and some last. What is the best label for this process?

a. retention
b. variation
c. legitimacy
d. selection


46. Which term refers to an entity formed by the interactions of a community of organizations and their environment?

a. interorganizational relationship
b. organizational ecosystem
c. collaboration network
d. institutional environment


47. Which statement provides the best description of an organizational niche?

a. Once found, it makes the process of retention occur.
b. It is a person within an organization who is highly specialized.
c. It is a domain of unique environmental resources and needs.
d. It is found only in Japanese organizations.


48. Which term refers to relatively enduring resource transactions, flows, and linkages that occur among two or more organizations?

a. intranet
b. interorganizational relationships
c. resource dependence
d. institutional environment


49. Why might organizations enter into interorganizational collaborations?

a. to share risks when entering new markets
b. to assert power over larger suppliers
c. to lock-in necessary resources
d. to minimize interpersonal conflicts


50. Which term describes organizations with a wide domain; that is, those that offer a broad range of products and services or that serve a broad market?

a. specialists
b. generalists
c. niches
d. legitimate


51. What institutional process is being followed if an organization is engaged in benchmarking?

a. mimetic
b. coercive
c. normative
d. isomorphic


52. Which perspective in the framework of interorganizational relationships represents the traditional view?

a. population ecology
b. institutionalism
c. collaborative network
d. resource dependence


53. Which statement best describes the impact on organizational survival, as a principle underlying the population ecology model?

a. Specialists are able to reallocate resources internally to adapt to a changing environment, whereas generalists are not.
b. Generalists are more competitive than specialists in the narrow area in which their domains overlap.
c. The toy company Mattel, which markets a broad range of toys, is considered a specialist.
d. New organizations have lower survival rates due to environmental factors that tend to select them out of existence more often than existing organizations.


54. What is the social basis for normative forces?

a. legal
b. culture
c. moral
d. diversity


55. What are organizations trying to gain when they become influenced by mimetic, coercive, or normative forces in the institutional environment??

a. greater profit
b. greater market share
c. greater resource dependency
d. greater legitimacy



56. What kind of education and training do you think would help prepare you for the reality of being a manager who has to manage a set of interorganizational relationships as well as managing the internal affairs of your own company?


57. Identify a firm in each stage of the process of ecological change: variation, selection, and retention. Explain why you classified each firm as you did.


58. When organizations become aware of resource dependence and begin to develop strategies to reduce their dependence on the environment, what alternatives would be considered? Explain at least two different approaches.


59. Why is the mindset in North American companies changing away from a traditional adversarial relationship with other companies?


60. What is an organizational ecosystem? How does this concept impact the changing role of management?


61. Describe the framework of interorganizational relationships, using the following two questions to help guide your answer: If organizational relationships are competitive, under what perspectives are the organizational types similar versus dissimilar? If organizational relationships are cooperative, under what perspectives are the organizational types similar versus dissimilar?


62. Why is the following question asked, in the context of a discussion on interorganizational relationships:“Is competition dead?”


63. Develop your own explanation/theory of why organizations today find collaboration as important as competition, and why collaborating organizations tend to take on similar characteristics. Would collaboration be enhanced just as easily between organizations that had different characteristics?


64. Does the desire for legitimacy result in organizations being more similar or being more different? Take a position, and defend your position.


65. Is the use of management fads any different, in your opinion, from the pursuit of legitimacy through mimetic processes?


66. In North America we have seen a history of powerful organizations exploiting the dependence of small companies. Would you anticipate an end to this phenomenon? Why or why not?


67. Explain and contrast the various processes by which institutional similarity occurs.


68. Discuss how the adversarial versus partnership orientations work among students in class. What carryover from the classroom settings at your university will help or hinder interorganizational relationships you may be managing in the future?


69. A mentor from an established organization in your industry told you “to reach out and control external sectors that threaten needed resources.” How could that be done? In your answer, apply principles from the textbook.


70. When the computer industry first reached the everyday consumer, Commodore computers were extremely popular, and the first computers ever purchased by many people. As other personal computers such as Apple and IBM entered the marketplace with word processing, database programs, and a few games, Commodore kept its focus on games. From the perspective of the population ecology model, explain what happened to these organizations over the long run, and why.


71. List the characteristics of the traditional theory of organizational relationships.


72. We studied the notion of institutional similarity and the reasons for it. Develop your own theory about the effects of the tendency for institutional similarity on business success.


73. Describe and illustrate the generalist and specialist strategies that organizations use for their struggle for existence.
Indicate whether the statement is true or false.


1. Written rules and policies are an integral part of organizational culture.

a. True
b. False


2. Symbols are narratives based on true events that are frequently shared among organizational employees and told to new employees to inform them about an organization.

a. True
b. False


3. A strong organizational culture is a primary characteristic of a learning organization.

a. True
b. False


4. In a bureaucratic culture, an important value is taking care of employees and making sure they have whatever they need to help them be satisfied as well as productive.

a. True
b. False


5. Several subcultures may exist within large organizations, each differing from each other and from the culture as a whole.

a. True
b. False


6. The adaptability culture encourages entrepreneurial values, norms, and beliefs that support the capacity of the organization to detect, interpret, and translate signals from the environment into new behavioural responses.

a. True
b. False


7. The three sources of ethical values in organizations are worker ethics, managerial ethics, and social responsibility.

a. True
b. False


8. External adaptation is the term for members developing a collective identity and knowing how to work together effectively.

a. True
b. False


9. Values-based leadership is best instituted throughout the management hierarchy through an authoritative directive.

a. True
b. False


10. Culture strength refers to there being a low number of different subcultures within the culture as a whole.

a. True
b. False


11. If the rule of law and ethical standards were drawn as a Venn diagram, the two circles would overlap completely.

a. True
b. False


12. Most managers today are moving toward bureaucratic cultures because of a need for greater flexibility.

a. True
b. False


13. Whistle-blowing is a disclosure mechanism.

a. True
b. False


14. In a mission culture, managers shape behaviour by envisioning and communicating a desired future state for the organization.

a. True
b. False


15. All legal requirements are ethical standards.

a. True
b. False


16. There are four types of rites: passage, enhancement, renewal, and integration.

a. True
b. False


17. In interpreting culture, one of the important observable aspects of the culture would be rites and ceremonies such as the rite of passage.

a. True
b. False


18. The culture encouraging risk taking, change, and improvement is a value of a learning organization with a strong adaptive culture.

a. True
b. False


19. In a clan culture, the primary focus is on the involvement and participation of the organization’s members and on rapidly changing expectations from the external environment.

a. True
b. False


20. The personal liberty framework argues that decisions should be made to ensure the greatest possible freedom of choice and liberty for individuals.

a. True
b. False


21. Companies that put ethics on the back burner in favour of fast growth and short-term profits succeed in the long run.

a. True
b. False


22. Internal integration, as it relates to organizational culture, means that members develop a collective identity and know how to work together effectively.

a. True
b. False


23. The virtue matrix is a tool to give guidance to CEOs about socially responsible behaviour.

a. True
b. False


24. All ethical standards are legal requirements.

a. True
b. False


25. Learning ethical frameworks helps managers to act autonomously and still think their way through a difficult decision.

a. True
b. False


Indicate the answer choice that best completes the statement or answers the question.


26. Why did Citigroup implement a statement of cultural and ethical values after being stung by a series of scandals?

a. A formal statement of the company’s values relates to the unobservable but important organizational culture.
b. A formal statement of values can serve as a fundamental organizational document that defines what the organization stands for.
c. A formal statement addresses ethical values rather than specific behaviours.
d. A formal statement is often part of a larger mission statement and therefore is taken for granted.


27. What are the two levels where culture exists?

a. sub- and super-structure
b. people and structure
c. underlying values and visible artifacts
d. social and psychological


28. Which of the following arises in a situation concerning right and wrong when values differ?

a. culture problem
b. legal issue
c. social responsibility issue
d. ethical dilemma


29. What are stories that are used to perpetuate culture in organizations based on?

a. anything that reeks of symbolism
b. nothing in fact, but on the ideals of the organization
c. true events
d. unsubstantiated rumours


30. What does the mission culture put major emphasis on?

a. the external environment through flexibility and change to meet customer needs
b. a shared vision of organizational purpose
c. the involvement and participation of the organization’s members
d. the internal environment and a consistency orientation for a stable environment


31. Why is it that organizations do NOT typically come face-to-face with the power of culture until they try to implement new strategies or programs that go against basic cultural norms and values?

a. Culture is usually written and when a change is attempted written cultural policies create obstacles to change.
b. Culture provides members with a sense of self and members rely on this sense and are therefore resistant to change.
c. Culture generates commitment to improving market share and a change that alters culture leads to reduced revenues.
d. Culture generally goes unnoticed until a change is made and the power becomes noticeable.


32. Which of the following are manifestations of organizational culture?

a. legends
b. control systems
c. structures
d. management information systems


33. What is an attribute of a culture of discipline?

a. level 5 leadership
b. organizational values of collective autonomy
c. focus on greater flexibility
d. laissez-faire management


34. Which term refers to the degree of agreement among members of an organization about the importance of specific values?

a. adaptability
b. culture strength
c. internal integration
d. social responsibility


35. Which of the following best describes the culture of a company whose values promote individual initiative and entrepreneurship?

a. an adaptability culture
b. a mission culture
c. a clan culture
d. a bureaucratic culture


36. Various representatives of which of the following influence managerial ethics and social responsibility?

a. external stakeholders
b. employees
c. competitors
d. whistle-blowers


37. Which framework argues that decisions should be made to promote fairness and equity?

a. utilitarian theory
b. personal liberty
c. distributive justice
d. eternal law


38. What kind of leader would thrive in a clan culture?

a. one who creates values for social responsibility
b. one who embodies values
c. one who integrates people into action and responsibility through participation
d. one who can change culture


39. When students finish their studies at a college, they go through a graduation ceremony with the idea of soon finding a new social role. Which kind of rite is this an example of?

a. rite of passage
b. rite of enhancement
c. rite of renewal
d. rite of integration


40. What is the major force that shapes managerial ethics?

a. organizational culture
b. external shareholders
c. peers
d. legal systems


41. Which term refers to a situation in which the relationship between a manager and followers is based on shared, strongly internalized beliefs that are advocated and acted upon by the manager?

a. mission culture
b. values-based leadership
c. clan culture
d. servant leadership


42. Which of the following is an example of formal structure and formal systems that can be used to shape ethical values?

a. patterning from senior management
b. repetition of words such as those ending Walmart’s cheer: “Who’s No. 1? The Customer!”
c. a whistle-blowing disclosure mechanism
d. values-based leadership


43. What develops in response to common problems, goals, and experiences shared by members of a team, department, or other unit?

a. learning organizations
b. ethical committees
c. subcultures
d. ethics hotlines


44. Which value best characterizes a learning organization?

a. the whole being more important than the part, and boundaries between parts being minimized
b. external strategic focus with continual thoughts of what others are doing that’s right
c. life-time employment for workers at every level (unless a work rule is violated)
d. an internal efficiency focus


45. Which of the following arises from a set of codified principles and regulations that describe how people are required to act, that are generally accepted in society, and that are enforceable in the courts?

a. code of ethics
b. rule of law
c. core values
d. managerial ethics


46. What is Van Horne’s statement “If we can’t export the scenery, we’ll import the tourists!” an example of?

a. a story
b. a myth
c. a symbol
d. language


47. Which term means that members develop a collective identity and know how to work together effectively?

a. external adaptation
b. socialization
c. internal integration
d. cultural identity


48. Which two dimensions are represented on the matrix that plots the relationship of environment and strategy to corporate culture?

a. (1) internal vs. external; (2) flexible vs. stable
b. (1) prospector vs. defender; (2) simple vs. complex
c. (1) flexible vs. stable; (2) internal vs. environmental
d. (1) open vs. closed; (2) strategic vs. operative


49. Which of the following is an example of the rite of integration in organizational culture?

a. an award given to the employee of the month
b. unpaid three-week orientation and training for prospective (new) employees
c. an office BBQ
d. organizational development activities


50. What kind of culture has an internal focus and a consistency orientation for a stable environment?

a. organic
b. clan
c. traditional
d. bureaucratic


51. What is at play when behaviour is governed by a set of moral principles and values?

a. the rule of law
b. ethics
c. a mission environment
d. a vision statement


52. Every day, business people make choices about whether to be honest or deceitful with suppliers, treat employees with respect or disdain, and be a good or a harmful corporate citizen. What  guides these decisions?

a. managerial ethics
b. whistle-blowing policies
c. codes of ethics
d. cultural norms


53. Why are most organizations trying to move away from bureaucratic cultures?

a. the need for greater flexibility
b. the need for better decision-making techniques
c. the need for easier communication channels
d. the need for reducing employee participation



54. Explain the differences between the various types of rites—enhancement, renewal, passage, and integration.


55. Explain how a strong organizational culture might be a negative for an organization.


56. Explain why ethical behaviour of companies is as much an issue of organizational culture as of personal ethics.


57. Some organizations have dress codes that limit individual freedom in the workplace. Do such rules inhibit the establishment of organizational culture?


58. Discuss how organizations manage and coordinate ethics activities.


59. Assume that you have just been promoted to a plant manager position in a city located 500 km away from your previous position. As you become acquainted with the workers, supervisors, and procedures of the plant, you come to the conclusion that the values and attitudes of the workers and supervisors are the source of the low morale in the plant, as well as the apathetic attitude toward production. Inspections have revealed a large number of defects in the finished product. Explain the kinds of things you might do to change the organizational culture to one more conducive to positive morale and higher production with better quality.


60. The president of a college once said in a guest lecture to a management class on his campus, “The only important facet of leadership is symbolism.” Although many people on his campus would disagree with his views on leadership because of mismanagement that occurred during his presidency, his claim about the importance of symbolism lives on. Explain his view.


61. Identify a specific organization that has a culture you know enough about to discuss. Then describe that organization’s culture and its subcultures.


62. What is Bakan’s main argument about corporations? What is your view and why?


63. Discuss culture strength and organizational subcultures.


64. What are the important functions of organizational culture in an organization?


65. Why should whistle-blowers be protected in an organization? In your opinion, where does protection of the whistle-blower fall in the relationship between legal requirements (or rule of law) and ethical standards?


66. Take a position on the following statement: “A bureaucratic culture is less employee-oriented than a clan culture.” Defend your position.


67. What kinds of leadership symbols are important in the creation of a positive organizational culture? Give specific examples.


68. How could a company that closes plants in areas that are economically depressed claim to be “socially responsible”? What ethical framework allows decision makers to close a plant in a depressed area when the company finds cheaper labour elsewhere?


69. List and describe the three values incorporated into a strong adaptive culture.


70. How do external stakeholders influence ethical decision making in an organization?
Indicate whether the statement is true or false.


1. In the garbage can model, potential solutions may be independent of problems, but they are ideas brought to organizational consciousness because participants are attracted to those ideas for some logical or illogical reason.

a. True
b. False


2. Problemistic search means that managers look around in the extended environment until they find the perfect solution to eventually resolve a problem.

a. True
b. False


3. The incremental model puts major emphasis on political and social factors that influence decision outcomes.

a. True
b. False


4. A decision interrupt occurs when an organization must cycle back through a previous decision and try something new.

a. True
b. False


5. The bounded rationality approach is often associated with programmed decision processes.

a. True
b. False


6. Management science is an excellent device for organizational decision making when problems are analyzable and when the variables can be identified and measured.

a. True
b. False


7. Since programmed decisions are novel and poorly defined, and no procedure exists for solving them, a program must be devised using the garbage can method.

a. True
b. False


8. In intuitive decision making, experience and judgment rather than sequential logic or explicit reasoning are used to make decisions.

a. True
b. False


9. Problem consensus, and technical knowledge about the means to solve those problems, are two of the characteristics of organizations that determine which decision approaches are used.

a. True
b. False


10. Successful decision makers in high-velocity environments keep their focus on long-term planning and forward-looking information.

a. True
b. False


11. During the “specify decision objectives” step of the rational approach, the manager determines what performance outcomes should be achieved by a decision.

a. True
b. False


12. Organized anarchy is characterized by rapid change and a collegial, nonbureaucratic environment.

a. True
b. False


13. The selection phase of the incremental model is very clear that managers must analyze and choose on the basis of objective criteria in order to avoid any future delay that would interrupt implementation.

a. True
b. False


14. When decisions are nonprogrammed, ill defined, and piling on top of one another, there is no reason for the individual manager to even attempt to use the steps in the rational approach.

a. True
b. False


15. High-velocity environments call for decision makers to depend heavily on one or two savvy, trusted colleagues as counsellors, even though everyone is ultimately involved in the decision.

a. True
b. False


16. Management science sometimes produces decision failures, in part because quantitative data are not rich.

a. True
b. False


17. Problem consensus refers to understanding and agreement about how to solve problems and reach organizational goals.

a. True
b. False


18. The Carnegie Model and the incremental model disagree with each other on how decisions are made—the former claiming that they are made through a political process and the latter claiming that they emerge over time following careful objective analysis.

a. True
b. False


19. Two explanations for managers escalating commitment to a failing decision are that (1) managers block or distort negative information when they are personally responsible for a negative decision and (2) consistency and persistence are valued in contemporary society.

a. True
b. False


20. Intuition should NOT be used in organizational decision making.

a. True
b. False


21. Management science, although cumbersome, cannot produce failures in decision making.

a. True
b. False


22. The Carnegie Model of organizational decision making was developed by Max Weber.

a. True
b. False


23. The point of the rational approach is that managers use systematic procedures to arrive at good decisions.

a. True
b. False


24. Nonprogrammed decisions are repetitive and well defined, and procedures exist for resolving the problem.

a. True
b. False


Indicate the answer choice that best completes the statement or answers the question.


25. The management team of an organization accepts a satisfactory, rather than a maximum, level of performance when making decisions. What are they engaging in?

a. satisficing
b. problemistic search
c. problem consensus
d. escalating commitment


26. What does the Carnegie model of organizational decision making say about organizational decisions?

a. They involve few managers because of the simplicity with which decisions are made.
b. They use coalitions for the final choice.
c. They avoid the pitfalls of problemistic search.
d. They use coalitions only at lower levels of management.


27. Which of the following research results forms the basis of the incremental model?

a. A manager with a proposal can get her idea implemented by breaking it down into small steps and installing one step before going on to another.
b. Many major organizational decisions occur through a series of smaller decisions made over a fairly long period of time.
c. Programmed decisions involve several mathematical formulas that build on each other.
d. Algorithms are useful for prediction.


28. In the Paramount Pictures example in the textbook, what style of decision making did Sherry Lansing use in selecting films to make?

a. intuitive
b. high-velocity escalation
c. marketing research, comparable to the rational approach
d. scientific management


29. A company is trying to make an important decision and the window of opportunity is short; it is a “bet-the-company” situation. It divides its senior managers into two groups, which have to argue one perspective against the other. What decision-making technique is the company engaging in?

a. decision learning
b. point-counterpoint
c. organized anarchy
d. the garbage can model


30. When do intuitive decision-making processes work best?

a. when managers can use networked computer databanks for analysis
b. when there are few alternatives available
c. when experience with similar decisions is extensive, and has been successful
d. when a manager must make the decision alone


31. A company uses a computerized system extensively in its production process from the design stage through the automatic ordering of raw materials through preparation for delivery. Which type of organizational decision making is being used?

a. garbage can model
b. incremental process
c. Carnegie model
d. management science approach


32. A small university department included six faculty members. During faculty meetings when the department was faced with a difficult decision, a faculty member would suggest they take a break. During the break, four faculty members would adjourn to the coffee room and agree on the decision that would be made. What is this an example of?

a. bounded rationality
b. intuitive decision making
c. a coalition
d. crisis decision making


33. When does management science work best for making decisions?

a. when problems are vague
b. when problems have unknown variables
c. when problems are analyzable
d. when problems are qualitative and cannot be quantified


34. In which stage are alternative courses of action considered and one is chosen and implemented?

a. the first three steps of the rational approach, called problem recognition
b. the last four steps of the rational approach, called problem solution
c. the first three steps of the rational approach, called programmed decision
d. the last two steps of the rational approach, called bounded rationality


35. According to the contingency framework for decision models, when should the Carnegie Model for organizational decision making be used?

a. when there is high uncertainty in both problems and solutions
b. when managers agree on goals and look for optimal solutions
c. when decisions are nonprogrammable and can be made by an individual
d. in every cell of the framework


36. What is the last step in the rational approach to decision making?

a. defining the decision problem
b. evaluating alternatives
c. implementing the chosen alternative
d. diagnosing the problem


37. What process would explain increasing the budget for an ongoing project on which managers received feedback that it was destined for failure?

a. the garbage can model
b. flexible decision style
c. escalating commitment
d. organized anarchy


38. Which statement is a part of the garbage can model of decision making?

a. Solutions may be proposed even when problems do not exist.
b. Choices are not made unless problems are solved.
c. Many problems are solved.
d. No problem is allowed to persist without being solved.


39. What are characteristics of organized anarchies?

a. rapid change, unclear technology, and nonbureaucratic environment
b. unclear technology, turnover, and problematic preferences
c. problematic preferences, nonbureaucratic environment, and turnover
d. rapid change, turnover, and unclear technology


40. What are the first four steps of the rational approach to decision making specifically designed to help a manager do?

a. follow the scientific method
b. devise a problem solution
c. evaluate alternative solutions
d. identify the problem


41. Given the principles of escalating commitment, in which situation described below would you give the greatest funding to the same program in 2010?

a. After you funded the program in 2008, it turned out to be very profitable.
b. After another manager funded the program in 2008, it turned out to be very profitable.
c. After you funded the program in 2008, it turned out to be a “loser,” showing actual prospects of failing.
d. After another manager funded the program in 2008, it turned out to be a “loser,” showing actual prospects of failing.


42. Which phase in the incremental decision process involves the shaping of a solution to an identified problem?

a. development phase
b. selection phase
c. identification phase
d. implementation phase


43. Which step in the rational approach immediately follows developing alternative solutions?

a. evaluating alternatives
b. diagnosing the problem
c. implementing an alternative to test its viability
d. implementing the chosen alternative


44. When is it best to use the management science model for decision making?

a. when problems are unanalyzable, and problem consensus is high
b. when problems are analyzable and measurable
c. when solution knowledge is low, and problem consensus is low
d. when solution knowledge is low, and problems can’t be structured logically


45. Which statement is the best description of bounded rationality?

a. It is a rational decision-making framework for managers.
b. It is an eight-step decision-making process, including both problem identification and problem solution.
c. It is a way to quantify data enabling decision-makers to gain the time to weigh all alternatives correctly.
d. It is how decisions have to be made under severe time and resource constraints.


46. What does the incremental decision process model emphasize?

a. political factors affecting the decision process
b. social factors involved in forming coalitions
c. the sequence of activities in the decision process
d. intuitive processes followed to arrive at a decision


47. Which step of the rational approach is Tanya Smith, CEO of Food Lion, engaging in when she reads Modern Grocer, visits other grocery stores to compare prices, and reviews daily sales figures?

a. monitoring the decision environment
b. defining the decision problem
c. specifying decision objectives
d. diagnosing the problem


48. Which of the following is recognized as a constraint and tradeoff during nonprogrammed decision making?

a. personal constraints
b. environmental constraints
c. rationality constraints
d. operational constraints


49. What term is used for the agreement among managers about the nature of a problem or opportunity and about which goals and outcomes to pursue?

a. organizational decision making
b. problemistic search
c. contingency decision making
d. problem consensus


50. What do managers employ when using intuitive decision making?

a. logic
b. judgment
c. explicit reasoning
d. a systematic approach


51. Which of the following is part of the garbage can model of decision making?

a. There is a “choice opportunity” where the match up of problems and solutions result in decisions being made.
b. Participants provide the stability needed to explain decision making, and remove its otherwise random quality.
c. The company has an insufficient level of technology.
d. Solutions and problems are tightly coupled.


52. Which of the following illustrates the phenomenon of “escalating commitment”?

a. an increase in the commitment to a decision only when it begins to prove itself as correct or profitable
b. continuing to invest time and money in a solution despite evidence of failure
c. the need for top management to accept decisions made by lower levels and commit to their implementation
d. incremental decision-making


53. What does the garbage can model show?

a. how poor inputs into decision making result in poor decisions
b. how decisions can be made in mechanistic organizations
c. four streams of events that influence decision making
d. decision making in a stable environment


54. Which type of decision making would typically be used, to the extent possible, in an objective process of selecting a new employee?

a. inspiration and imitation
b. the Carnegie model
c. the garbage can model
d. the rational approach


55. What are “wicked problems” associated with?

a. conflicts over objectives and alternatives
b. the garbage can model
c. intuitive decision making
d. problem consensus



56. What would you think about a manager who openly acknowledged and discussed with co-workers and subordinates his .333 “batting average” on organizational decisions? Explain your view, tying in as much as you can from the textbook.


57. What special considerations should a manager take who finds him- or herself in a high-velocity environment?


58. If organized anarchy existed in the decision environment of a company in the high-tech industry, would your goal as a decision maker be to remove that organized anarchy, or to work with it? Explain.


59. An organizational theorist said, “Decision making cannot be taught in a management class.” In what ways do you agree with his statement? In what ways do you disagree?


60. Why would managers in high-velocity environments worry more about the present than the future? Discuss.


61. Assume you are involved in important decision making in a medium-size organization. Three decisions currently face your organization. One is a problem of integrating the inventory management system with your production system. A second involves the selection of another organization for an acquisition. The third is whether to continue a product line that has been losing market share. Your finance vice-president believes the product line should be dropped, while the marketing manager believes that more advertising aimed at a different market will revive sales of the product. Discuss which decision-making approach is likely to be most helpful in analyzing each of these situations.


62. The company where you work is concerned because of its slow and cumbersome decision-making processes. Decisions seem to cycle around and around, frequently without coming to closure. If management wanted to analyze their decision making in order to improve their processes, which particular model would you recommend? Why? How would you go about studying the problem?


63. Discuss the consequences of the garbage can decision process for organizational decision making.


64. Based on the fact that the management science approach uses quantitative data, which are not rich, discuss limitations of the approach for organizational decision making.


65. In the textbook, the Gillette Company was given as an example of using a certain decision-making approach in the design of razors such as the Sensor. Explain the decision-making approach that was used.


66. Explain what is meant by the bounded rationality perspective of decision making. Provide an example of decision making in your own life in which you can observe the effects of bounded rationality.


67. Discuss the four cells of the contingency framework.


68. Based on the fact that the Carnegie approach relies on rich face-to-face communication, discuss limitations of the approach for organizational decision making.


69. What is a decision interrupt? Give at least two examples from your own experience.


70. Discuss three special decisions circumstances that managers need to be concerned about today.


71. What is a problemistic search? What is its role in decision making?


72. A student organization is concerned because decision making seems to revolve around a strong clique that has formed. Insiders sometimes make those in the minority feel like losers after decisions are reached, and the organization is beginning to lose membership as a consequence. If the student leaders wanted to analyze their organizational decision making in order to improve their processes, which particular model would you recommend? Why? How should members go about studying the problem?


73. Apply the principles of escalating commitment to the following situation to carry it forward in time, imagining what would happen next: You are a marketing manager at PrintCards, where you have for 10 years had the most successful software for creation of all types of cards in the home or office environment. However, PrintCards is finally faced with competition from a more powerful software package. The competition is new to the marketplace and came in at a price that is half the price of PrintCards. PrintCards quickly began to lose market share, but initially made no adaptation. New product could not be delivered for months into the future because of the timing of the product development cycle. You made a decision not to change the pricing structure of PrintCards because of your department’s analysis that the old, higher pricing structure was fitting for a product with such high name recognition. Market share continued to decline.


74. List and describe the steps of the rational approach to decision making.


75. If problem consensus were not achieved relative to a decision that was being made, what would you recommend that managers do first to deal with their decision-making process? After problem consensus had been achieved, would you recommend a different approach?


71. Give an example of an ethical dilemma that would perplex you as a manager if it were to occur in an organization where you work. What makes the situation you describe meet the definition of “ethical dilemma”?


72. What are the major differences between the adaptability culture and the mission culture? Which of these two would be more appropriate for a company in a high-tech industry and why?


73. What is values-based leadership? Give an example.