CAIB 4 Chapter 2 Questions and Answers Rated A+

CAIB 4 Chapter 2 Questions and Answers Rated A+ Organizing involves determining the way the brokerage's activities will be divided into measurable units. Identify the three elements to organizing effectively. 1. Creating an Organizational Structure 2. Defining Employee Relationships 3. Establishing Position Descriptions The organizational structure is the skeleton upon which the brokerage grows and interacts. The structure also defines who has authority and responsibility for activities. Identify three basic forms of organizational structure based on the way authority and responsibility is delegated. 1. Line Organization 2. Functional Organization 3. Line and Staff Organization Identify which type of brokerage is best suited for a line organization. Briefly explain why this is so. Best suited to a smaller brokerage in which senior management personally directs the activities of subordinates. This organizational form presumes that the senior executives are fully familiar with all aspects of the brokerage's business, as all decisions are made directly by them. In a line organization, each subordinate has only one person to whom they are responsible. Identify three advantages of the line organization 1. Simplicity 2. Clear delegation of authority 3. Quick decision making Identify three disadvantages of the line organization 1. Line managers must be fully knowledgeable in a wide range of areas in order to be able to make decisions. 2. Power is concentrated at the top because senior management must be involved in all decisions. 3. It limits the growth and development of employees by stifling innovation. Identify why the functional organization form was created. To overcome the key weakness of the line organization which is the concentration of too many activities in too few managers. Identify two advantages of a functional organization 1. Provides employees with expert advice 2. Decisions are made by a management specialist Identify three disadvantages of a functional organization 1. Employees will find that they have more than one "boss", so that in areas of overlapping authority they may be given conflicting or inconsistent instructions. 2. When a decision is required that does not firmly belong to any one manager, decision-making can be slow. Employees may be referred by one manager to another without any decision being made. 3. When there are too many managers giving instructions, employees are frequently distracted from their primary roles of serving their clients. Most brokerages find it an extremely difficult form to implement the the functional organization properly. True or False? True. Line and Staff organization combines the strengths of both the line and the functional forms of organization. Identify three advantages of the line and staff organization. 1. Areas of authority and responsibility are