13 Which of the following terms best describes the system of hierarchical reporting relationships in an organization? 1. span of authority 2. line of control 3. matrix of hierarchy 4. chain of command Question 14 All stakeholder groups are equally important for an organization. A. True B. False Question 15 An organization's environment will be more uncertain when ________. 1. specific and general forces in the environment become interconnected 2. the company begins to follow the cost leadership strategy 3. the company decreases the number of products it manufactures 4. the number of stakeholders in the specific environment decreases Question 16 As per the resource dependence theory, in which of the following situations is an organization said to be weak? 1. the organization uses a divisional organizational structure 2. the organization is highly centralized 3. the organization manufactures a wide variety of products 4. there are only a few suppliers of a resource needed by the organization Question 17 As the ________, the environmental uncertainty decreases. 1. environmental richness decreases 2. environmental naturalness increases 3. environmental complexity decreases 4. environmental dynamism increases Question 18 Internal transaction costs are called ________ costs to distinguish them from the transaction costs of exchanges between organizations in the environment. A. sunk B. opportunity C. bureaucratic D. historic Question 19 Typically, when a company gets associated with a third-party linkage mechanism, ________. 1. the complexity of the company's environment increases 2. the company can react more easily to the dynamism of the environment 3. the richness of the company's environment decreases 4. it loses its ability to enter into a strategic alliance Question 20 Which of the following is most likely to increase the environmental complexity for a company? 1. the company decreases its number of suppliers 2. the company diversifies its business in an entirely new industry 3. the company changes its organizational structure from divisional to functional 4. the company changes its organizational structure from centralized to decentralized Question 21 Which of the following is most likely to increase the environmental dynamism for a company? 1. the company enters into a foreign market with new products 2. the company enters into a long-term contract with one of its suppliers 3. the company changes its organizational structure from functional structure to matrix structure 4. the company increases the level of employee empowerment Question 22 Which of the following statements is true regarding environmental richness? 1. A rich environment is characterized by plentiful resources. 2. Environmental richness and environmental complexity are directly proportional to each other. 3. Increase in the level of competition leads to a proportionate increase in the level of environmental richness. 4. In rich environments, uncertainty is high. Question 23 Which of the following strategies of managing competitive resource interdependencies involves a regulatory body that allows organizations to share information and regulate the way they compete? A. joint venture B. third-party linkage mechanism C. co-optation D. cartel Question 24 A ________ is a subunit composed of people, working together, who possess similar skills or use the same kind of knowledge, tools, or techniques to perform their jobs. A. class B. division C. function D. hierarchy Question 25 Mutual adjustment provides employees the opportunity to ________. 1. discover new ways of achieving organizational goals 2. formalize the rules and procedures for working in an organization 3. specialize in performing certain organizational tasks 4. standardize the tasks that they are performing Question 26 Recruiting and training employees to improve skills is a(n) ________ function. A. managerial B. production C. maintenance D. adaptive Question 27 Which of the following functions facilitate an organization's control of its relations with its environment and stakeholders? A. support functions B. adaptive functions C. managerial functions D. production functions Question 28 Which of the following is a difference between an integrating role and a liaison role? 1. An integrating role's influence is limited to a single department whereas a liaison role's influence extends across multiple departments. 2. The ranking of employees is irrelevant for the integrating role whereas it becomes very significant in the liaison role. 3. An integrating role is a full-time managerial position whereas a liaison role is a task involved in a full-time job. 4. A liaison role is a more complex integrating mechanism than an integrating role. Question 29 Which of the following refers to the compromise that emerges when decisionmaking and coordination are evolutionary processes and people use their judgment to address a problem? A. mutual adjustment B. centralization C. formalization D. standardization Question 30 Which of the following refers to the use of written rules and procedures to standardize operations? 1. socialization 2. horizontal differentiation 3. formalization 4. vertical differentiation Question 31 You are the CEO of a small firm that manufactures office furniture. The decisionmaking authority in your firm rests almost entirely with you and your closest associates. You introduce a set of rules and procedures designed to induce predictable and accountable behaviours among employees. Your firm has a(n) ________ structure. A. mutually adjusted B. mechanistic C. integrative D. organic Question 32 ________ refers to a situation in which the authority to make important decisions about organizational resources and new projects is delegated to managers at all levels in the hierarchy. A. Standardization B. Decentralization C. Integration D. Formalization