Exam 10: Organizational Design

Refer to the scenario below to answer the following questions. 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 bases the new structure on silk flowers, art supplies, craft supplies, pottery and fabric, they would be using __________ departmentalization.

Which of the following can be a weakness of the functional structure?

Refer to the scenario below to answer the following questions. 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 current structure of Metro General Hospital is based on a _____________ span of control and most likely ____________ departmentalization.

describe the six key elements in designing an organization's structure. Give specific examples wherever possible to support your answers.

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

The acceptance theory of authority states that subordinates are willing to accept the authority of a manager if the order does not conflict with their personal beliefs.

Functional departmentalization groups jobs by __________.

__________ 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.

Refer to the scenario below to answer the following questions. 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 were able to organize their structure based on product flow they would be using __________ departmentalization.

Galaxy Corporation is organized into five departments: human resources, finance, marketing, production, and engineering. Galaxy uses __________ departmentalization.

Refer to the scenario below to answer the following questions. 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 100 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 __________.

The chain of command is a principle that states that a person should report to only one boss.

To effectively compete against lower-priced foreign manufacturers, Mr. Johnson concludes that Prairie needs to pursue a strategy of cost minimization. The efficiency and tight controls associated with this strategy are best achieved through a(n) _________ structure.

Mechanistic organizations works best for companies whose strategy is to control costs.

Organic organizations do not have a division of labour.

The strength of the functional structure is that it focuses on results because managers are responsible for what happens to their products and services.

Employee empowerment gives employees more authority to make decisions.

Employee empowerment is crucial in a team structure because there is no line of managerial authority from top to bottom.

Refer to the scenario below to answer the following questions. 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 100 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 increasingly competitive and dynamic nature of the business suggests that Prairie needs to adopt a more __________ structure.

Which type of organization structure assigns specialists from different functional departments to work on one or more projects led by a project manager?