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
,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
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
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
,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
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
