OM Organizational Structure & Design 2 — Questions and Answers
Question 1: The concept of 'unity of command' in organizational design states that:
- All employees must follow a single organizational mission
- Each employee should report to only one superior (Correct answer)
- Command decisions must be unanimous among managers
- Leadership roles should be consolidated into one executive
Correct answer: Each employee should report to only one superior
Unity of command is a classical management principle stipulating that each subordinate should receive directives from only one manager to avoid confusion and conflicting instructions.
Question 2: A network organizational structure is characterized by:
- Strict hierarchical reporting lines with minimal cross-functional interaction
- A core organization that outsources major functions to external partners (Correct answer)
- A matrix of project teams all reporting to a single executive
- Departments organized around geographic territories
Correct answer: A core organization that outsources major functions to external partners
A network structure relies on a hub organization that coordinates and outsources many of its functions to a web of external partners, vendors, and specialists.
Question 3: Formalization in an organizational structure refers to:
- The process of promoting employees through defined career paths
- The degree to which jobs are standardized and governed by explicit rules (Correct answer)
- Creating formal mission and vision statements for all departments
- The number of official management tiers in a hierarchy
Correct answer: The degree to which jobs are standardized and governed by explicit rules
Formalization describes how standardized an organization's jobs are through rules, procedures, and documentation, with high formalization leaving little employee discretion.
Question 4: In organizational design, 'departmentalization' refers to:
- The process of dissolving underperforming business units
- Grouping jobs into coordinated work units or departments (Correct answer)
- Distributing authority to lower-level managers
- Measuring inter-departmental performance metrics
Correct answer: Grouping jobs into coordinated work units or departments
Departmentalization is the basis by which jobs are grouped together, such as by function, product, geography, or customer, to coordinate organizational activities.
Question 5: A holacracy is best described as:
- A hierarchical structure with a strong central authority
- A self-managing organizational system with distributed authority and no fixed job titles (Correct answer)
- A divisional structure organized around geographic regions
- A matrix structure with dual reporting to functional and project managers
Correct answer: A self-managing organizational system with distributed authority and no fixed job titles
Holacracy replaces the traditional management hierarchy with a system of self-organizing, autonomous circles where authority and decision-making are distributed across the organization.
Question 6: Which of the following best describes a 'tall' organizational structure?
- Few management layers with a wide span of control
- Many management layers with a narrow span of control (Correct answer)
- A flat hierarchy where all employees report to one leader
- A virtual structure with geographically distributed teams
Correct answer: Many management layers with a narrow span of control
A tall structure has many hierarchical levels with narrow spans of control, meaning each manager supervises only a few employees, resulting in more layers of management.
Question 7: The primary advantage of a divisional organizational structure is:
- Maximized efficiency through deep functional specialization
- Greater autonomy and responsiveness to individual market or product needs (Correct answer)
- Reduced duplication of resources across the organization
- Simplified communication through a single chain of command
Correct answer: Greater autonomy and responsiveness to individual market or product needs
Divisional structures allow each division to focus on its specific product, region, or customer segment, enabling faster responses to market changes and greater accountability.
OM Organizational Structure & Design 2
The concept of 'unity of command' in organizational design states that: