Exam 11: Designing Organizational Structure

A virtual organizations contains elements of a traditional organization.

Departmentalization at Art & Craft Depot (Scenario) John is president of a chain of stores called Art & Craft Depot. He is aware that the structure of his organization must change in order to compete more effectively in today's global marketplace. However, he is not sure which structure would work best for his company. His company is currently organized under the following departments: accounting, human resources, sales, purchasing, and distribution. However, there are other choices available. He has considered reorganizing around their primary product groups: silk flowers, art supplies, craft supplies, pottery, and fabric. However, equally important are the different types of clients they serve, including homemakers, artists, interior decorators, industrial display contractors, and art schools. The business is growing, and they now have stores in six provinces across Canada. Furthermore, his customers seldom shop for just one type of item. For example, a customer who buys flowers will frequently purchase a vase and other supplies that are required to create a full floral arrangement. This means that individual customers often shop in several merchandise areas of the store. -If John organizes the new structure based on homemakers,artists,interior decorators,industrial display contractors,and art schools,they would be using ________ departmentalization.

Organizations that are highly flexible and adaptive are described as ________.

estructuring at Prairie Farm Equipment (Scenario) Jim Johnson is the CEO of Prairie Farm Equipment Corp, a major Canadian manufacturer. Prairie has been in business for more than 110 years and has been very profitable. Today, the company has a tall structure with formalized communication channels and rigid hierarchical relationships. All major decisions are made by Mr. Johnson. This arrangement has worked well until recently, when the company began to encounter some major global competition. Foreign companies have begun to export new, lower-priced products into the Canadian market. At the same time, foreign markets appear to be opening their doors to more Canadian products. A few days ago, one of the vice-presidents presented some exciting news about a major market opportunity overseas. Several managers were now working on an international expansion proposal to be presented at the next board meeting. As the company's strategy was beginning to change, Mr. Johnson realized that its structure would also need to change. But change how? The company was very large and used routine technology to produce its products. What should he do? -The current organizational design at Prairie is best described as ________.

Two popular trends in departmentalization are the increasing use of ________ departmentalization and the use of ________ teams.

Metro General Hospital (Scenario) Joyce is the chief administrator in charge of a department at Metro General Hospital. When she worked as a registered nurse at a smaller community hospital, Joyce enjoyed the flexible structure, minimal rules, and team approach to decision making by nurses, administrators, and doctors. However, the situation at Metro is different. Metro has a tall, rigid structure with many rules and procedures designed to standardize jobs and guide employee behaviour. One such rule requires that all decisions in Joyce's department must be signed off by her alone) As a result, Joyce seems to spend most of her time filling out forms and signing documents. She also feels that the numerous levels of hierarchy are unnecessary and place barriers between herself and her staff. Joyce is not exactly sure why things have to be so "organized" and is planning to talk to her boss about making some changes to increase flexibility and reduce the number of rules and procedures. -The requirement that Joyce sign off on all decisions in her department specifically relates to which of the following elements of structure?

________ refers to the rights inherent in a position that allows a manager to tell subordinates what to do and then expect them to do it.

The trend in recent years has been toward smaller spans of control,which are consistent with managers' efforts to reduce costs and increase flexibility.

All other things being equal,as the span of control grows wider,the organization becomes ________.

An organization that divides its sales responsibilities for pharmaceutical products into Ontario,Quebec,the Maritimes,and Western Canada is using ________ departmentalization.

Organizational learning cannot take place without ________.

Customer departmentalization groups jobs on the basis of product or customer flow.

The acceptance theory of authority says that employees are willing to accept the authority of the manager under certain conditions.

Departmentalization at Art & Craft Depot (Scenario) John is president of a chain of stores called Art & Craft Depot. He is aware that the structure of his organization must change in order to compete more effectively in today's global marketplace. However, he is not sure which structure would work best for his company. His company is currently organized under the following departments: accounting, human resources, sales, purchasing, and distribution. However, there are other choices available. He has considered reorganizing around their primary product groups: silk flowers, art supplies, craft supplies, pottery, and fabric. However, equally important are the different types of clients they serve, including homemakers, artists, interior decorators, industrial display contractors, and art schools. The business is growing, and they now have stores in six provinces across Canada. Furthermore, his customers seldom shop for just one type of item. For example, a customer who buys flowers will frequently purchase a vase and other supplies that are required to create a full floral arrangement. This means that individual customers often shop in several merchandise areas of the store. -If John organizes the new structure based on the provinces served across Canada they would be using ________ departmentalization.

Under which of the following circumstances should an organization use more centralization?

Restructuring at Prairie Farm Equipment (Scenario) Jim Johnson is the CEO of Prairie Farm Equipment Corp, a major Canadian manufacturer. Prairie has been in business for more than 110 years and has been very profitable. Today, the company has a tall structure with formalized communication channels and rigid hierarchical relationships. All major decisions are made by Mr. Johnson. This arrangement has worked well until recently, when the company began to encounter some major global competition. Foreign companies have begun to export new, lower-priced products into the Canadian market. At the same time, foreign markets appear to be opening their doors to more Canadian products. A few days ago, one of the vice-presidents presented some exciting news about a major market opportunity overseas. Several managers were now working on an international expansion proposal to be presented at the next board meeting. As the company's strategy was beginning to change, Mr. Johnson realized that its structure would also need to change. But change how? The company was very large and used routine technology to produce its products. What should he do? -Decision-making authority at Prairie is highly ________.

GlaxoSmithKline would become more ________ if it starts allowing its lab scientists to set the priorities and allocate the resources.

Restructuring at Digital Arts (Scenario) Victor Lee is the founder and president of Digital Arts, a Vancouver-based company that makes games for popular electronic game consoles. The company has experienced tremendous growth over the years, but now Victor is concerned that the company's structure has become too tall and rigid. He explains, "Twenty years ago we started with five people and one product. Today we are a global operation with 500 people employed in six countries producing over 200 game titles." Digital Arts is currently organized into five specialized departments: product development, production, marketing, accounting, and human resources. To coordinate the workflow, many rules and regulations have been introduced. Victor now worries that the increased bureaucracy is beginning to stifle innovation. He ponders several restructuring options. -One option to improve workflow coordination and communication across the company is to assign specialists from each department to work on various projects being led by project managers.This contemporary design is called a ________ structure.

The degree to which activities in an organization are divided into separate jobs is called work specialization.

As organizations become more flexible and responsive,there is a distinct trend toward ________.