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Exam 6 November 2015, questions and answers

Organization Theory & Design for Pre-MSc (Rijksuniversiteit Groningen)

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Organization Theory & Design for Pre-MSc

EBS003A05.2015-2016.1A
Friday, November 6, 2015
13:00 – 16:00

Version I

• Please put your student ID on the table.

• Any phone or other electronic device should be put switched off, and is not allowed on the table.
• Dictionaries are not allowed.
• During the exam visiting the toilets is not allowed.
• In the exam hall, food is not permitted.

• This exam consists of 78 questions. Read them carefully. There is only one correct answer to each question.
• Results will be communicated within 10 working days (Nestor)

GOOD LUCK!

QUESTIONS:

Divers

1. Which of the following is a criterion use in the lecture to help set apart scientific theories from common
sense?
a) Explicit
b) High quality
c) Published
d) All of the above
Answer: a
Source: #1.45
Comment:

2. Please read the following statement carefully: “Constructs as a theory’s principal conceptual building
blocks are linked by hypotheses that help to explain how and why they are linked.” This statement is:
a) Accurate
b) Inaccurate
Answer: b
Source: #1.49
Comment:

3. Please read the following statement carefully: “A theory is a system of statements that presents a logical,
systematic, and coherent explanation of a real-world phenomenon within certain boundaries.” This
statement is:
a) Accurate
b) Inaccurate
Answer: A
Source: #1.46
Comment:

4. Please read the following two statements relating to Jones’ thoughts on basic dimensions of organizing:
(1) Horizontal integration describes the need to integrate different roles and functions in a company.
(2) A company having just one IT department that services all of its business units can be seen as an
example of functional centralization.
For these two statements, please indicate whether …
a) Both (1) and (2) are wrong

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b) (1) is right, but (2) is wrong

c) (1) is wrong, but (2) is right
d) Both (1) and (2) are right
Answer: c
Source: Chp. 4
Comment:

Chapter 1

5. The internal systems approach to measuring organizational effectiveness evaluates an organization's

ability to convert skills and resources efficiently into finished goods and services.
a) True
b) False
Answer: b
Source: J38
Comment:

6. Which of the following goals can help management to assess the effectiveness of the organization from
an external resource approach point of view?
a) Obtain high-quality inputs of raw materials
b) Increase rate of product innovation
c) Improve customer service
d) Cut decision-making time
Answer: a
Source: J38
Comment:

7. According to Quinn and Rohrbaugh’s Competing Values Model, what

we can say about Organization A (upper shape)?
a) It is a business whose dominant value is productivity
b) It is characterized by planning and goal setting
c) It is a large company well established in its external
environment
d) The attention given to open systems implies that the internal
process orientation is almost inexistent
Answer: d
Source: Nestor lecture on Competing Values Framework
Comment:

8. An organization's ________ determine how effectively managers are able to coordinate and motivate
workers.
a) environmental factors
b) core competences
c) structure and culture
d) competitive advantages
Answer: c
Source: J30
Comment:

Chapter 2

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9. According to Jones, which of the following statements about stakeholders is/are correct?
I) Stakeholders will generally participate in an organization if they receive inducements that
exceed the value of the contributions they are required to make
II) Shareholders are the owners of an organization, and, as such, their claim on organizational
resources is often considered superior to the claims of other inside stakeholders
a) I) is True / II) is True
b) I) is True / II) is False
c) I) is False / II) is True
d) I) is False / II) is False
Answer: a
Source: J50-51
Comment:

10. To be effective, an organization must ________.

a) equally satisfy interests of all stakeholders
b) consider employees as the most important stakeholder group and give priority to their interests
over the interests of all the other stakeholders
c) at least minimally satisfy the interests of all the stakeholders
d) consider customers as the most important stakeholder group and give priority to their interests
over the interests of all the other stakeholders
Answer: c
Source: J58
Comment:

11. Which of the following is one of the conditions that lead to a moral hazard problem?
a) The principal possesses more information than the agent
b) The agent has an incentive to pursue goals and objectives that are different from the principal's
c) The principal acts in his own best interest, as opposed to the interests of the other stakeholders
d) The agent is given the authority to allocate scarce organizational resources
Answer: b
Source: J63-64
Comment:

12. According to Jones…

I) The CEO determines top management's rewards and incentives
II) The CEO is responsible for setting the organization's goals
III) The CEO selects key executives to occupy the topmost levels of the managerial hierarchy
Which one of the following options is correct?
a) I) is True / II) is True / III) is True
b) I) is True / II) is False / III) is True
c) I) is False / II) is True / III) is False
d) I) is False / II) is False / III) is True
Answer: a
Source: J61-62
Comment:

Chapter 3

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13. Which of the following forces is a general environment factor?

a) Interest rates
b) Government
c) Suppliers
d) Customers
Answer: a
Source: J82
Comment:

14. What characteristic of an organization’s environment is central in contingency theory?

a) Dynamism
b) Richness
c) Uncertainty
d) Complexity
Answer: c
Source: J87-90
Comment:

15. Which of the following is most likely to increase the environmental complexity for a company?
a) The company changes its organizational structure from divisional to functional
b) The company decreases its number of suppliers
c) The company changes its organizational structure from centralized to decentralized
d) The company diversifies its business into a new industry
Answer: d
Source: J88
Comment:

16. In which of the following situations is an organization said to be weak according to the resource
dependence theory?
a) the organization manufactures a wide variety of products
b) the organization uses a divisional organizational structure
c) there are only a few suppliers of a resource needed by the organization
d) the organization is highly centralized
Answer: c
Source: J91
Comment:

17. According to the resource dependence theory…

I) Distributive interdependencies exist between an organization and its suppliers
II) Symbiotic interdependencies exist among organizations that need the same scarce inputs and
market their products to the same group of potential customers
Which one of the following options is correct?
a) I) is True / II) is True
b) I) is True / II) is False
c) I) is False / II) is True
d) I) is False / II) is False
Answer: d
Source: J93
Comment:

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18. An NGO does not like the environmental practices of a corporation. The corporation has created an
ethics committee that seeks to control corporations’ social and environmental performance. Leaders of
that NGO are invited to join the committee. This is an example of:
a) Strategic alliance
b) Franchising
c) Cooptation
d) Joint venture
Answer: c
Source: J94
Comment:

19. Which of the following methods of managing competitive interdependencies is most likely to be used by
an organization to monopolize an industry and become the sole player in the industry?
a) Enter into a merger
b) Enter into a cartel
c) Enter into a joint venture
d) Enter into a long-term contract
Answer: a
Source: J101
Comment:

20. In transaction cost theory the term bounded rationality refers to the fact that…
I) Decision makers are not always trustworthy when it comes to negotiating a contract
II) It is sometimes difficult to estimate what value an investment creates in one exchange
relationship and what value it may generate in another
Which one of the following options is correct?
a) I) is True / II) is True
b) I) is True / II) is False
c) I) is False / II) is True
d) I) is False / II) is False
Answer: d
Source: J102-103
Comment:

21. When an organization is forced to rely on a small number of trading partners, the risk of ________.
a) bounded rationality decreases
b) bounded rationality increases
c) opportunism increases
d) opportunism decreases
Answer: c
Source: J103
Comment:

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22. Consider the following situations:

I) My organization has many possible suppliers
II) My organization’s business environment is stable and rich (as there are few direct competitors)
III) Both my suppliers and my own organization use generalist assets that do not require specific
investments
Which one of the following forms of organizing exchanges with my supplier is preferred?
a) In I) informal linkage mechanisms (e.g., reputation) / In II) informal linkage mechanisms / In III)
formal linkage mechanisms (e.g., strategic alliance or merge)
b) In I) formal linkage mechanisms / In II) informal linkage mechanisms / In III) formal linkage
mechanisms
c) In I) informal linkage mechanisms / In II) formal linkage mechanisms / In III) informal linkage
mechanisms
d) In I) informal linkage mechanisms / In II) informal linkage mechanisms / In III) informal linkage
mechanisms
Answer: d
Source: J103-104
Comment:

Chapter 4

23. Top-level managers make all the important decisions in an organization. This organization is said to be:
a) Centralized
b) Formalized
c) Differentiated
d) Decentralized
Answer: a
Source: 125-126
Comment:

24. Which one of the following options describe(s) the advantages of centralization best?
I) gives top managers ample time to focus on strategic decision-making
II) allows lower-level managers to make on-the-spot decisions
III) keeps the organization focused on organizational goals
IV) promotes flexibility and responsiveness within an organization
V) simplifies the coordination process within an organization
a) Options I), II), III) and V) are correct
b) All options are correct
c) Options III) and V) are correct
d) Only option V) is correct
Answer: c
Source: J126-127
Comment:

25. Consider the following situations:

I) Managers meet in temporary committees to coordinate cross-functional activities in some cases
II) The company forms a temporary committee to find new ways to position its products
III) The company hires a supervisor to handle the communication between two functions
Which one of the following options referring to integrating mechanisms is correct?
a) In I) task force / In II) integrating department / In III) integrating role
b) In I) direct contact / In II) integrating department / In III) integrating role
c) In I) task force / In II) integrating department / In III) liaison roles
d) In I) direct contact / In II) teams / In III) hierarchy of authority
Answer: a
Source: J122
Comment:

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26. A high level of formalization typically implies:

a) Diffusion of power across the organization
b) Mutually adjusted approach to decision-making
c) Centralization of authority
d) Encouragement of innovation and flexibility
Answer: c
Source: J129
Comment:

27. Mutual adjustment provides employees the opportunity to:

a) Discover new ways of achieving organizational goals
b) Specialize in performing certain organizational tasks
c) Formalize the rules and procedures for working in an organization
d) Standardize the tasks that they are performing
Answer: a
Source: J130
Comment:

28. Which of the following is the major integrating mechanism used in mechanistic structures?
a) Hierarchy of authority
b) Teams
c) Integrating departments
d) Task forces
Answer: a
Source: J131
Comment:

29. Organic structures result when:

a) Work processes are relatively unpredictable
b) An extensive use is made of rules and standard operating procedures to coordinate tasks
c) Integrative mechanisms are relatively simple
d) Organizational authority is not delegated
Answer: a
Source: 131
Comment:

30. According to the study conducted by Lawrence and Lorsch, an organization functioning in a highly
unstable environment was most effective when:
a) It concentrated decision-making authority at the top-management level
b) It incorporated high levels of organizational integration
c) It relied more on mutual adjustment between subunits
d) It used rules and SOPs extensively to coordinate tasks
Answer: c
Source: J136
Comment:

31. According to contingency theory, in order to manage its environment effectively, an organization should:
a) Limit the extent of internal differentiation and integration
b) Concentrate all authority within the top-management level
c) Design its internal structure to control the external environment
d) Use mechanistic structures to make organizational decisions
Answer: c
Source: J134
Comment:

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32. Which of the following structural configurations Mintzberg describes combines decentralization with
standardization?
a) The professional bureaucracy
b) Adhocracy
c) Machine bureaucracy
d) Divisional structure
Answer: a
Source: Reading
Comment:

Chapter 5

33. Both organization A and B employ 300 people. The organization A structure is taller. On average, which
of both organizations has the larger span of control?
a) Organization A
b) Organization B
c) Span of control is not impacted in this scenario
Answer: b
Source: J143
Comment:

34. Various functional departments tend to have different levels of hierarchy; for each department different
explanations exist for having more or having fewer levels.
I) Manufacturing generally has relatively more levels because the need to process more
information
II) Sales generally have relatively fewer levels because sales are controlled by performance control
systems
III) R&D generally has relatively fewer levels because R&D work is too complicated and because it is
not easy to monitor.
Which combination of departmental differences and explanations is correct?
a) All three are correct
b) I) and III) are correct
c) I) and II) are correct
d) II) and III) are correct
Answer: d
Source: J153
Comment:

35. According to Jones, a structure with relatively more hierarchical levels is characterized by the
fact that (1) managers can more easily shift responsibility, but also by the fact that (2) managers,
in general, have higher motivation to perform well in order to get a better position in the
organization.
a) True
b) False
Answer: B
Source: 146
Comment:

36. According to the principle of minimum chain of command, an organization should choose the minimum
number of hierarchical levels consistent with its goals and the environment in which it operates.
a) True
b) False
Answer: a
Source: J149
Comment:

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37. If tasks are routine and similar so that all subordinates perform the same task, then the span of control
should be small.
a) True
b) False
Answer: b
Source: J152
Comment:

38. According to Jones, one of the possible drawbacks of standardization is the extra amount of time
standardization asks from managers to devote to controlling employees’ following the rules.
a) True
b) False
Answer: b
Source: J155
Comment:

39. Which of the following is most likely to increase the bureaucratic costs?
a) Changing the organization structure from functional to divisional
b) Decreasing the level of standardization
c) Increasing the number of hierarchical levels
d) Decreasing the number of managers
Answer: c
Source: J148
Comment:

40. Which of the following is one of Weber's bureaucratic principles?

a) In order to decrease environmental complexity, an organization should centralize its operations
b) Employees should be allowed to participate in decision-making
c) Organizational roles are held on the basis of technical competence
d) A tall organization should use a decentralized organizational structure and narrow span of control
Answer: c
Source: J156
Comment:

41. Weber stated that

a) Bureaucracy was more effective in small organizations
b) Bureaucracy was more effective in large organizations
c) Neither of the answers above is true
Answer: c
Source: J156-161
Comment:

Chapter 6

42. When a functionally structured organization grows larger, in the end there comes a moment
where the organization will experience;
a) Increasing difficulty in bringing new products to the market
b) Increasing ease in bringing new products to the market
Answer: A
Source: J172
Comment:

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43. Which of the following organizational structures is the foundation of horizontal differentiation?
a) Functional structure
b) Divisional structure
c) Matrix structure
d) Product structure
Answer: a
Source: J170
Comment:

44. A food manufacturer is experiencing coordination problems between its frozen food division and its
canned food division. The main control problem is that each product requires an entirely separate
system for ordering supplies, packaging the product, and storing the product upon completion. Which
structure would help solve these coordination problems?
a) Multidivisional structure
b) Product division structure
c) Market structure
d) Geographic divisional structure
Answer: b
Source: J176
Comment:

45. Which of the following statements is true regarding a multidivisional structure?

a) As an organization moves from functional to multidivisional structure, the level of vertical
differentiation increases
b) A multidivisional structure avoids duplication of organizational activities
c) A multidivisional structure decreases division of labor which ultimately decreases organizational
effectiveness
d) A multidivisional structure is the least suitable for an organization which produces a wide range of
complex products
Answer: a
Source: J179
Comment:

46. Which of the following is an advantage of a matrix structure?

a) Clearly defined control structure that leads employees to develop stable expectations of one
another
b) Lack of movement of employees from team to team
c) Increased organizational flexibility
d) Clearly defined hierarchy of authority
Answer: c
Source: J189
Comment:

Chapter 7

47. Terminal values are more informative about which behavior is expected from members of an
organization than instrumental values are.
a) True
b) False
Answer: b
Source: J202
Comment:

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48. Suppose you are a manager who worries about the company culture. You come to the conclusion that
there are certain norms and values, but that people do not really live by them. You decide to devise a
kind of ritual which will help stress these norms and values. Jones would call this a rite of _______.
a) passage
b) integration
c) enhancement
Answer: c
Source: 209
Comment:

49. Individualized socialization tactics ________.

a) provide newcomers with common learning experiences designed to produce a standardized
response to a situation
b) provide newcomers with explicit information about the sequence in which they will perform new
activities
c) allow newcomers to learn on the job, as members of a team
d) give newcomers precise knowledge of the timetable associated with completing each stage in the
learning process
Answer: c
Source: J208
Comment:

50. A newly hired sales trainee is encouraged to go into the marketplace, meet customers, and sell products
her own way so that she can learn the appropriate tactics on her own. This is an example of a(n)
________.
a) serial socialization tactic
b) sequential training program
c) institutionalized role orientation
d) individualized role orientation
Answer: d
Source: J207
Comment:

51. A high-tech company that has recently changed its organizational culture has moved to a new
headquarters with open spaces and all kinds of services for employees. This physical representation of
the company’s values is considered a ________.
a) representation of the language
b) change in organizational design
c) organizational symbol
d) variation in the organization’s structure
Answer: c
Source: J211
Comment:

Chapter 8

52. Coca-Cola uses its marketing skills to defend its niche against PepsiCo. This is an example of a
functional-level strategy.
a) True
b) False
Answer: b
Source: J233
Comment:

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53. Organizational culture is one of the potential sources upon which to build core competences.
Jones calls this source of core competences:
a) Functional resources
b) Organizational resources
c) None of the above
Answer: c
Source: J231
Comment: Culture is a coordination ability

54. HP invests heavily to improve their skills in R&D and product design. This is an example of a ________
strategy.
a) corporate-level
b) functional-level
c) supply-level
d) business-level
Answer: b
Source: J233
Comment:

55. Mercedes-Benz used its competences in R&D and product development to enter the household products
and aerospace industries. This is an example of a ________ strategy.
a) functional-level
b) technological-level
c) corporate-level
d) business-level
Answer: c
Source: J234
Comment:

56. Which of the following statements is true regarding an organization following a low-cost strategy?
a) An organic structure is more suitable for a low-cost organization than a mechanistic structure
b) Low-cost organizations typically use complex organizational structures
c) Typically, low-cost organizations use centralized decision-making
d) The organizational structure used by a low-cost organization generally has higher integration than
that used by a differentiator
Answer: c
Source: J242-243
Comment:

57. Which of the following statements is true regarding unrelated diversification?

a) Organizations with a strategy of unrelated diversification are likely to use a conglomerate
structure
b) An organization pursuing a strategy of unrelated diversification tries to obtain value by sharing
resources or by transferring functional skills from one division to another
c) The bureaucratic costs associated with managing unrelated diversification are much greater than
those associated with related diversification
d) Considerably more communication and coordination are needed to create value from unrelated
diversification than from related diversification
Answer: a
Source: J249
Comment:

Chapter 9 - Technology

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58. Please read the following statement carefully: “Any social system, once confronted with technology, will
inevitably adapt to that technology until it fits the technology.” Which of the following philosophical
traditions of technology studies does this statement most likely belong to:
a) Technological determinism
b) Humanist determinism
c) Socio-technical thinking
d) Social constructivism
Answer: a
Source: #5.4
Comment:

59. Which of the following is not part of what Jones (2013) defines as technology?
a) Skills
b) Machines
c) Knowledge
d) None of the above
Answer: d
Source: #5.6, Chp. 9
Comment:

60. What is an affordance?

a) An affordance describes an option for action that an actor is afforded because of a particular
thing or tool given to her/him.
b) An affordance is a feature of a thing or tool that affords an actor with the ability to execute
specific actions in a particular way.
c) An affordance is a prescriptive property of an object that affords this object the ability to be used
in a particular way.
d) An affordance is an object that is readily affordable to an actor so that s/he can use it to complete
a particular task.
Answer: a
Source: #5.9
Comment:

61. Please read the following two statements relating to Woodward’s thoughts on technology’s impact on
organizations carefully:
(1) A continuous process is one with a high technical complexity.
(2) Continuous processes often are associated with a high span of control.
For these two statements, please indicate whether …
a) Both (1) and (2) are wrong
b) (1) is right, but (2) is wrong
c) (1) is wrong, but (2) is right
d) Both (1) and (2) are right
Answer: b
Source: Chp. 9
Comment:

62. Engineering production, as described by Perrow, can best be characterized as …

a) High variability and high analyzability
b) Neither variable nor analyzable
c) High variability and low analyzability
d) None of the above
Answer: c
Source: Chp. 9
Comment:

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Chapter 10 - Change

63. In the following figure depicting Lewin's take on organizational change, what are the labels for the gaps
(1-4) we used in the lecture?

a) Status Quo / Desired State / Restraining Forces / Driving Forces

b) Status Quo / Desired State / Driving Forces / Restraining Forces
c) Desired State / Status Quo / Restraining Forces / Driving Forces
d) Desired State / Status Quo / Driving Forces / Restraining Forces
Answer: d
Source: #6.13
Comment:

64. Please read the following two definitions of changes carefully:

(1) A bold attempt to quickly find new ways to be effective. It results in a radical shift in ways of doing
things, new goals, and a new structure.
(2) A constant attempt to improve, adapt, and adjust strategy and structure incrementally to
accommodate to changes taking place in the environment.
Please indicate what type of change they refer to:
a) (1) is evolutionary change, (2) is revolutionary change
b) (1) is revolutionary change, (2) is evolutionary change
c) (1) is evolutionary change, (2) is evolutionary change
d) (1) is revolutionary change, (2) is revolutionary change
Answer: b
Source: #6.9
Comment:

65. Please read the following statement carefully: “According to Jones (2013), change is mainly related to an
organization’s capabilities and includes its resources only in so far as they are necessary for these
capabilities.” Please indicate whether this statement is …
a) True
b) False
Answer: b
Source: #6.3 + .6
Comment:

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66. Which of the following is not a group level source of possible resistance to change as discussed in the
lecture?
a) Political agendas
b) Groupthink
c) Cultural incongruences
d) Internal power struggles
Answer: c
Source: #6.11
Comment:

67. Please read the following statement carefully: “Inertia is a dangerous individual level source of resistance
and is mainly dysfunctional in nature.” Please indicate whether this statement is …
a) True
b) False
Answer: b
Source: #6.11 + .13
Comment:

68. Which of the following does not describe the “Clone and Go” strategy HP used to spin-off Agilent?
a) Radical change
b) Evolutionary change
c) Transformational change
d) None of the above describes “Clone and Go”
Answer: b
Source: #6.9 + Case
Comment:

Chapter 13 - Innovation

69. Which of the following does not apply to Jones’ (2013) definition of innovation as discussed in the
lecture?
a) Innovation is targeted at products and services as outputs relevant to customers, rather than at
merely internal processes.
b) Innovation is defined as a process rather than as a characteristic of being innovative.
c) Innovation is suggested to be about both resources and skills rather than just the skill to innovate.
d) Innovation as a concept is suggested to be dependent on whether or not companies can increase
their effectiveness through it.
Answer: a
Source: #5.26
Comment:

70. What distinguishes Intrapreneurs from Entrepreneurs?

a) The former can operate under their own budget.
b) The former operate inside the boundaries of a given firm.
c) The latter can operate under their own budget.
d) The latter operate inside the boundaries of a given firm.
Answer: b
Source: #5.27
Comment:

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71. Which of the following is true in terms of most products’ lifecycles?

a) The embryonic stage is independent from the rate of technological change.
b) The number of customers is higher in the growth phase than in the maturity phase.
c) Only after the dominant product has declined can new innovations enter their embryonic stage.
d) None of the above.
Answer: c
Source: #5.34-37
Comment:

72. Please read the following statement carefully: “The stage-gate model is a project management approach
for innovation projects that uses GANTT charts to map out the viability of an innovation.” Please indicate
whether this statement is …
a) True
b) False
Answer: b
Source: Chp. 13
Comment: GANTT as an instrument of general project management unrelated to stage-
gate model

73. Which of the following characterizes the “fuzzy front end” of innovation?
a) Uncertainty about customer needs.
b) Uncertainty about solution requirements.
c) All of the above.
d) None of the above.
Answer: c
Source: #5.41
Comment:

Chapter 14 – Conflict & Power

74. Please read the following statement carefully: “In Pondy’s model of organizational conflict, the stage ‘felt
conflict’ describes a situation in which the different departments involved in a conflict start to feel the
conflict and begin to analyze it.” Please indicate whether this statement is …
a) True
b) False
Answer: b
Source: #6.20
Comment:

75. Combining Thompson’s thoughts on the organizational impact of technology with Pondy’s model of
organizational conflict, which of the following is most likely to develop conflicts?
a) Company with intensive technology.
b) Company with long-linked technology.
c) Company with mediating technology.
d) All are equally likely to develop conflict.
Answer: a
Source: #5.21 & #6.20 + .21
Comment: Interdependence as a source of change in Pondy’s model highest for (a)

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Organization Theory and Design November 2015 Version I

76. Please read the following statement carefully: “Pondy’s model of organizational conflict offers a
sequence of five stages that all organizational conflicts have to go through.” Please indicate whether this
statement is …
a) True
b) False
Answer: b
Source: Chp. 14, esp. p. 419
Comment: Conflicts can also be resolved in stages 2 or 3 which leads the conflict to omit
stage 4 and leap to stage 5

77. As a general strategy for handling conflict, “competing” can best be described as:
a) High cooperativeness, high assertiveness
b) High cooperativeness, low assertiveness
c) Low cooperativeness, high assertiveness
d) Low cooperativeness, low assertiveness
Answer: c
Source: #6.24
Comment:

78. Please read the following statement carefully: “As bases for individual power, coercive power and
legitimate power are shown to be the most effective in influencing other people.” Please indicate
whether this statement is …
a) True
b) False
Answer: b
Source: #6.28
Comment:

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