MGMT2140 Practice Exam 4 –
Organizational Structure | 2026
Exam Questions & Answers
with Rationales Guaranteed
Pass (GRADED A+)
1. Which statement best defines organizational structure?
A. The personal relationships employees develop at work
B. The formal arrangement of jobs, authority, responsibilities,
and communication within an organization
C. The organization's annual financial report
D. The informal friendships among employees
Rationale: Organizational structure establishes how work is
divided, coordinated, and controlled and clarifies reporting
relationships and authority.
2. What is the primary purpose of organizational structure?
A. To eliminate all employee conflict
B. To increase employee salaries
C. To coordinate organizational activities and clarify
responsibilities
D. To prevent organizational change
,Rationale: Structure helps coordinate people and resources
while establishing responsibilities and reporting relationships.
3. Which organizational structure groups employees
according to specialized functions such as marketing,
finance, and operations?
A. Matrix structure
B. Divisional structure
C. Functional structure
D. Network structure
Rationale: A functional structure organizes employees
according to specialized areas of expertise.
4. A company creates separate units for consumer products,
industrial products, and healthcare products. Which
structure is being used?
A. Functional
B. Divisional
C. Simple
D. Flat
Rationale: Divisional structures group activities around
products, services, customers, or geographic areas.
5. What does the chain of command describe?
,A. How employees are compensated
B. How products move through production
C. The formal line of authority from higher to lower
organizational levels
D. How customers communicate with employees
Rationale: The chain of command identifies who reports to
whom and establishes formal authority relationships.
6. What is span of control?
A. The number of organizational departments
B. The number of employees directly supervised by one
manager
C. The number of products sold by an organization
D. The number of management levels
Rationale: Span of control refers to the number of subordinates
who report directly to a manager.
7. A manager supervises 15 employees directly. What
organizational concept does this illustrate?
A. Departmentalization
B. Centralization
C. Span of control
D. Formalization
Rationale: The number of employees directly reporting to a
manager represents that manager's span of control.
, 8. Which organizational characteristic refers to the degree to
which decision-making authority is concentrated at higher
management levels?
A. Formalization
B. Departmentalization
C. Centralization
D. Specialization
Rationale: Centralization means important decisions are
concentrated toward the upper levels of the organization.
9. Which condition is most associated with decentralization?
A. All decisions require approval from the CEO
B. Lower-level managers receive authority to make relevant
decisions
C. Employees have no decision-making authority
D. Rules replace managerial judgment
Rationale: Decentralization distributes decision-making
authority to lower levels of the organization.
10. What does formalization refer to in an organization?
A. The number of employees in each department
B. The amount of organizational profit
C. The extent to which jobs and behaviors are governed by
Organizational Structure | 2026
Exam Questions & Answers
with Rationales Guaranteed
Pass (GRADED A+)
1. Which statement best defines organizational structure?
A. The personal relationships employees develop at work
B. The formal arrangement of jobs, authority, responsibilities,
and communication within an organization
C. The organization's annual financial report
D. The informal friendships among employees
Rationale: Organizational structure establishes how work is
divided, coordinated, and controlled and clarifies reporting
relationships and authority.
2. What is the primary purpose of organizational structure?
A. To eliminate all employee conflict
B. To increase employee salaries
C. To coordinate organizational activities and clarify
responsibilities
D. To prevent organizational change
,Rationale: Structure helps coordinate people and resources
while establishing responsibilities and reporting relationships.
3. Which organizational structure groups employees
according to specialized functions such as marketing,
finance, and operations?
A. Matrix structure
B. Divisional structure
C. Functional structure
D. Network structure
Rationale: A functional structure organizes employees
according to specialized areas of expertise.
4. A company creates separate units for consumer products,
industrial products, and healthcare products. Which
structure is being used?
A. Functional
B. Divisional
C. Simple
D. Flat
Rationale: Divisional structures group activities around
products, services, customers, or geographic areas.
5. What does the chain of command describe?
,A. How employees are compensated
B. How products move through production
C. The formal line of authority from higher to lower
organizational levels
D. How customers communicate with employees
Rationale: The chain of command identifies who reports to
whom and establishes formal authority relationships.
6. What is span of control?
A. The number of organizational departments
B. The number of employees directly supervised by one
manager
C. The number of products sold by an organization
D. The number of management levels
Rationale: Span of control refers to the number of subordinates
who report directly to a manager.
7. A manager supervises 15 employees directly. What
organizational concept does this illustrate?
A. Departmentalization
B. Centralization
C. Span of control
D. Formalization
Rationale: The number of employees directly reporting to a
manager represents that manager's span of control.
, 8. Which organizational characteristic refers to the degree to
which decision-making authority is concentrated at higher
management levels?
A. Formalization
B. Departmentalization
C. Centralization
D. Specialization
Rationale: Centralization means important decisions are
concentrated toward the upper levels of the organization.
9. Which condition is most associated with decentralization?
A. All decisions require approval from the CEO
B. Lower-level managers receive authority to make relevant
decisions
C. Employees have no decision-making authority
D. Rules replace managerial judgment
Rationale: Decentralization distributes decision-making
authority to lower levels of the organization.
10. What does formalization refer to in an organization?
A. The number of employees in each department
B. The amount of organizational profit
C. The extent to which jobs and behaviors are governed by
