Chapter 1 Organizations and Organizational Effectiveness
1) Studying organizations is relatively easy because they are tangible. That is, we can see and touch them. F 2) One of the difficulties in studying organizations is that they are intangible. In other words, we cannot touch or see them. T 3) Entrepreneurship is the process by which people recognize opportunities to structure organizations more efficiently. F 4) Amazon.com was created to satisfy the need to buy books over the Internet. T 5) The degree of specialization in small companies tends to be lower than that of large companies. T 6) Transaction costs are the costs associated with negotiating, monitoring, and governing exchanges between people. T 7) The environment in which an organization operates is a major source of uncertainty. T 8) One reason that organizations exist is so that they can exert power and control. T 9) One reason for starting an organization is to create jobs for individuals. F 10) Economies of scope are cost savings achieved when an organization manufactures products in large volumes. F 11) Economies of scale are cost savings achieved when an organization manufactures products in large volumes. T 12) Transaction costs are the costs associated with negotiating, monitoring, and governing exchanges between people. T 13) Organizational structure is used to control and coordinate people's actions. F 14) Organizational theory is primarily concerned with how an organization can outperform its competitors. F 15) Organizations that operate in the same environment will always have similar organizational cultures. F 16) Organizational structure can be shaped by organizational culture. T 17) The external resource approach evaluates an organization's ability to obtain scarce resources.T 18) The internal systems approach considers corporate culture. T 19) The internal systems approach evaluates an organization's ability to obtain resources. F 20) The guiding principles that the organization formally states in its annual report is called the mission statement. F 21) Operative goals give employees direction. T
22) An organization's mission as stated in public documents is an official goal. T 23) Operative goals can be either short or long term in nature. T 24) One of the main problems with Xerox's structure was that the decentralized structure was not very effective for creating new and innovative products. T 25) In the Xerox case, Mulcahy's structural changes were the primary reason for the successful turnaround. T 26) ________ is a tool used by people to coordinate their actions to obtain something they desire or value. (B) An organization 27) ________ is recognizing the opportunity to satisfy a need and collecting resources to meet that need. (C) Entrepreneurship 28) Jeffrey Bezos saw the opportunity to sell books over the Internet, which was growing. This is an example of ________. (D) entrepreneurship 29) Which of the following is not a stage in the value creation process? (D) Market 30) An organization's inputs include all except ________. (A) finished goods 31) In the conversion process, an organization creates value by applying all except __ (B) raw materials 32) An organization's output include all except _____(C) suppliers 33) An organization: (A) facilitates the division of labor. 34) Which of the following is not a reason for creating an organization? (C) To provide people with jobs 35) The organization's environment includes all except ________. (D) raw materials 36) When an organization shares resources across several products and tasks, it is able to: (D) achieve economies of scope.
37) Because a toy maker sells a large amount of toys, it is able to acquire plastic products to make the toys at a cheaper price than the competition. The toy maker is taking advantage of: (A) economies of scale.
38) ________ are cost savings that result when goods and services are produced in...