2024 Ready: A Comprehensive [Organizational Theory, Design, and Change,Jones,7e] Test Bank Guide

Organizational Theory, Design, and Change, 7e (Jones)
Chapter 1 Organizations and Organizational Effectiveness

1) An organization is a tool people use to coordinate their actions to obtain something they desire
or value.
Answer: TRUE
Page Ref: 2
Difficulty: Easy
LO: 1-1

2) Organizations die or are transformed when the needs satisfied by them are no longer
important.
Answer: TRUE
Page Ref: 2
Difficulty: Easy
LO: 1-1

3) Entrepreneurship is the process by which people recognize opportunities to satisfy needs and
then gather and use resources to meet those needs.
Answer: TRUE
Page Ref: 2
Difficulty: Easy
LO: 1-1

4) Value creation by an organization takes place at three stages: input, conversion, and output.
Out of these three stages, only the conversion stage is affected by the environment in which the
organization operates.
Answer: FALSE
Page Ref: 3
Difficulty: Easy
LO: 1-1

5) The organizational environment is a set of forces and conditions that operate within an
organization's boundaries.
Answer: FALSE
Page Ref: 3
Difficulty: Easy
LO: 1-1

6) Government is a part of organizational environment.
Answer: TRUE
Page Ref: 3
Difficulty: Easy
LO: 1-1




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,7) As compared to a large company, the degree of specialization in a small company is higher.
Answer: FALSE
Page Ref: 5
Difficulty: Moderate
LO: 1-1

8) The environment in which an organization operates is a major source of uncertainty.
Answer: TRUE
Page Ref: 6
Difficulty: Easy
LO: 1-5

9) Economies of scale are cost savings that result when an organization is able to use
underutilized resources more effectively because they can be shared across several different
products or tasks.
Answer: FALSE
Page Ref: 6
Difficulty: Moderate
LO: 1-1

10) Economies of scope are cost savings achieved when an organization manufactures products
in large volumes.
Answer: FALSE
Page Ref: 6
Difficulty: Moderate
LO: 1-1

11) Economies of scale are cost savings achieved when an organization manufactures products in
large volumes.
Answer: TRUE
Page Ref: 6
Difficulty: Easy
LO: 1-1

12) Transaction costs are the costs associated with negotiating, monitoring, and governing
exchanges between people.
Answer: TRUE
Page Ref: 7
Difficulty: Easy
LO: 1-1

13) Formation of organization results in increased transaction costs.
Answer: FALSE
Page Ref: 7
Difficulty: Easy
LO: 1-1


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,14) Organizational structure is the formal system of task and authority relationships that control
how people coordinate their actions and use resources to achieve organizational goals.
Answer: TRUE
Page Ref: 8
Difficulty: Easy
LO: 1-2

15) Organizational theory is primarily concerned with how an organization can outperform its
competitors.
Answer: FALSE
Page Ref: 8
Difficulty: Moderate
LO: 1-2

16) Organizations that provide essentially the same goods and services will always have similar
organizational cultures.
Answer: FALSE
Page Ref: 9
Difficulty: Moderate
LO: 1-2

17) An organization's culture is shaped by the type of structure used by the organization.
Answer: TRUE
Page Ref: 9
Difficulty: Easy
LO: 1-2

18) Organizational design is the process by which managers select and manage aspects of
structure and culture so an organization can control the activities necessary to achieve its goals.
Answer: TRUE
Page Ref: 9
Difficulty: Easy
LO: 1-2

19) A contingency is an event that might occur and must be planned for.
Answer: TRUE
Page Ref: 11
Difficulty: Easy
LO: 1-5

20) Competitive advantage is the ability of one company to outperform another because its
managers are able to create more value from the resources at their disposal.
Answer: TRUE
Page Ref: 12
Difficulty: Easy
LO: 1-5


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, 21) A culture based on entrepreneurial norms and values is less likely to encourage innovation
than a culture that is conservative and bureaucratic.
Answer: FALSE
Page Ref: 14
Difficulty: Easy
LO: 1-5

22) The external resource approach to measuring organizational effectiveness evaluates an
organization's ability to be innovative and function quickly and responsively.
Answer: FALSE
Page Ref: 16
Difficulty: Moderate
LO: 1-4

23) The technical approach to measuring organizational effectiveness evaluates an organization's
ability to secure, manage, and control scarce and valued skills and resources.
Answer: FALSE
Page Ref: 16
Difficulty: Moderate
LO: 1-4

24) The internal systems approach to measuring organizational effectiveness evaluates an
organization's ability to convert skills and resources efficiently into finished goods and services.
Answer: FALSE
Page Ref: 16
Difficulty: Moderate
LO: 1-4

25) Increasing product quality and reducing number of defects are examples of indicators used to
measure organizational effectiveness as per the internal systems approach.
Answer: FALSE
Page Ref: 17
Difficulty: Easy
LO: 1-4

26) Operative goals can be either short or long term in nature.
Answer: TRUE
Page Ref: 19
Difficulty: Easy
LO: 1-3




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