E II - OBJ 1.04 MC

Businesses use organizational design to structure their

• people, information, and technology.

• people, information, and competitors.

• information, technology, and competitors.

• technology, people, and competitors.

Answer explanation

Organizational design (also called organizational structure) is the process of structuring a business’s people, information, and technology to enable the business to achieve its goals and to be successful. A business isn’t able to structure its competitors.

A well-planned organizational design helps a business to better compete because

• competitors don’t have organizational structures.

• it cuts down on communication.

• the business is more productive.

• the business has more money.

Answer explanation

A well-planned organizational design helps a business to improve communication, foster innovation, and become more productive—all actions that help the business to be more competitive. A business can’t control whether or not its competitors have organizational structures in place. A well-planned organizational design improves communication; it doesn’t reduce it. How much money a business has doesn’t necessarily depend on its organizational design.

Nathan is a project manager in charge of four other employees. He has divided up responsibilities and assigned them to specific team members to work on. This is known as

• delegation.

• innovation.

• unity of command.

• the scalar principle.

Answer explanation

Assigning tasks to subordinates is known as delegation. It is an important part of the responsibilities involved with having authority within an organization. Innovation

refers to creating something new, such as a new product or process. Unity of command is a principle that states that no employee should answer to more than one supervisor at a time. The scalar principle states that authority should flow in a clear, unbroken line from the top to the bottom of an organization.

Which of the following terms refers to the flow of authority within an organization:

• Division of labor

• Functional structure

• Chain of command

• Innovation

Answer explanation

Chain of command, sometimes called line of command, refers to the flow of authority within an organization. Division of labor refers to separating a big job into smaller tasks. The functional structure is a type of organizational design that includes traditional departments, such as sales and finance. Innovation refers to something new, such as a new product or process.

Steve manages employees who are highly skilled and need little supervision. Therefore, he can supervise quite a few employees at once. Steve’s span of control is

• open.

• wide.

• narrow.

• tight.

Answer explanation

Steve has a wide span of control, meaning he can supervise a higher number of employees at once. A narrow span of control refers to supervising fewer employees at once. Open span of control and tight span of control are not terms used in organizational design.

Brynn manages employees who are new on the job and need quite a bit of supervision. Therefore, she can only supervise a few employees at once. Brynn’s span of control is

• open.

• wide.

• narrow.

• tight.

Answer explanation

Brynn has a narrow span of control, meaning that she can only effectively

supervise a few employees at one time. A wide span of control refers to supervising many employees at once. Open span of control and tight span of control are not terms used in organizational design.