Structure Chain of Command Communication flow Span of Management Decision Making
Verical Functional Long Vertical Narrow Centralized
Divisional Long Vertical Narrow Centralized
Matrix Dual Vertical & Horizontal Narrow Decentralized
Team-based Short Horizontal Broad Decentralized
Virtual Network Short Horizontal Broad Decentralized
(Note: Starting from virtual network is organic, and from vertical functional mechanistic)

1) As an organization becomes more organic, its communication flow becomes ____________.

(A) Narrower (B) Broader (C) More verticle (D) More horizontal

2) Dollar General uses a cost leadership strategy. The Dollar General slogan is "Save time. Save money. Everyday!" Dollar General will be more effective if it has __________ structure. Which of the following reasons explain this? Check all that apply.

(A) Centralized decision making allows the organization to place tighter controls on the way work is done and, in the process, achieve economies of scale.

(B) Narrow spans of management ensure that employees operate efficiently.

(C) Horizontal communication and broad spans of management allow for added flexibility in employee decision making.

(D) Short chains of command ensure that the company will operate most effectively in a turbulent environment.

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Your great-great grandmother left you her recipe book. It contains amazing, delicious cake recipes, and you are certain you can make a fortune with them if you just set up your bakery right. You are considering three possible designs for your bakery:

Design 1: A factory in which assembly workers create low-cost, standardized cakes to be sold in grocery stores.

Design 2: A factory in which all cakes are created by machines; technology will enable you to shift from cake to cake as customer needs change.

Design 3: A personalized wedding cake business in which you will create custom delicacies for your clients.

1) According to Joan Woodward ____________ is a classified as a continuous process production company.

(A) Design 3 (B) Design 2 (C) Design 1

2) Fill in the three terms that are missing from this table.

Small Batch Mass Production Continuous Process
Technical Complexity of Production Technology Structural Characteristics: Low Medium High
Centralization Low ? Low
Top administrator ratio Low Medium High
Indirect/direct labor ratio 1/9 1/4 1/1
Supervisor span of control 23 48 15
Communication
Written (vertical) ? High Low
Verbal (horizontal) High Low High
Overall Structure Organic Mechanistic ?
3) According to the information in the table, which of the following conclusions is most likely to be true?

(A) A continuous process production design is likely to be effective if your bakery pursues a low-cost leadership strategy.

(B) A bakery using a mass production design will be able to operate with fewer employees than a bakery using a continuous process design.

(C) A small-batch production design will help your bakery to operate more efficiently.

(D) A mass production design is likely to be effective if your bakery is operating in a stable environment without a lot of competition

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Modern-Shed has 12 to 14 knowledge workers who handle manufacturing and sales in its Seattle office. Outside of Seattle, Modern-Shed products are sold by dealers who also sell other types of compatible products. Modern-Shed also uses external companies to do fabrication, help organize trade shows, and perform marketing duties.

1) Modern-Shed has a __________ structure that allows it to:

(A) Maintain the flexibility it needs to meet customer demands

(B) Create maximally efficient organization through work specialization

(C) Coordinate work projects across functions and products

(D) Maintain high levels of control over the way its products are sold and fabricated

2) Under what conditions is the current organizational structure of Modern-Shed most likely to be effective? Check all that apply.

(A) When the economic environment is turbulent and uncertain

(B) When following a low-cost leadership strategy for the business

(C) In times of crisis, when everyone needs to follow a single leader

(D) When following a differentiation strategy for the business