CAIB 4 - Chapter 2 Questions and Answers Rated A+

CAIB 4 - Chapter 2 Questions and Answers Rated A+ Identify 3 elements to organizing effectively: 1. Creating an organizational structure. 2. Defining employee relationships. 3. Establishing position descriptions. Identify 3 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 and briefly explain why this is so. Smaller brokerages in which senior management personally directs the activities of the subordinates. Presuming all senior executives are fully familiar with all aspects of the brokerage's business, line organization is best suited for the noted brokerage as all decisions are directly made by senior executives. Authority flows vertically downward from the most senior executive officer. Responsibility flows upward to the most senior position. Identify 3 advantages of the line organization 1. Simplicity 2. Clear delegation of authority 3. Quick decision making Identify 3 disadvantages of the line organization. 1. Line managers must be knowledgeable in a wide range of areas in order to make decisions. 2. Power is concentrated at the top 3. Limits growth and development of employees by stifling innovation. Create a chart to illustrate a line organization. Identify why the functional organization form was created. It was created to overcome the key weakness of the line organization which is the concentration of too many activities in too few managers. Identify 1 advantage of a functional organization. Provides employees with expert advice Identify 3 disadvantages of a functional organization. 1. Overlap in authority, resulting in conflicting and inconsistent instructions. (Employees feel they have more than one "boss.") 2. Decision making can be slow if it does not firmly belong to 1 manager. 3. Employees are frequently distracted from their primary roles, as there are too many managers giving instructions. True or False - Most brokerages find it an extremely difficult form to implement the functional organization properly. True