. Ch. 1 Organizations and Organizational Effectiveness
1. An organization is a tool people use to coordinate their actions to obtain something they desire or value.
Ans: TRUE
Page#: 2
LEVEL: Easy
LO: 1-1
2. Organizations die or are transformed when the_ needs satisfied by them are no longer important.
Ans: TRUE
Page#: 2
LEVEL: 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.
Ans: TRUE
Page#: 2
LEVEL: 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.
Ans: FALSE
Page#: 3
LEVEL: Easy
LO: 1-1
5. The_ organizational environment is a set of forces and conditions that operate within an organization's
boundaries.
Ans: FALSE
,Page#: 3
LEVEL: Easy
LO: 1-1
6. Government is a part of organizational environment.
Ans: TRUE
Page#: 3
LEVEL: Easy
LO: 1-1
,7. As compared to a large company, the_ degree of specialization in a small company is higher.
Ans: FALSE
Page#: 5
LEVEL: Moderate
LO: 1-1
8. The_ environment in which an organization operates is a major source of uncertainty.
Ans: TRUE
Page#: 6
LEVEL: 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.
Ans: FALSE
Page#: 6
LEVEL: Moderate
LO: 1-1
10. Economies of scope are cost savings achieved when an organization manufactures products in large
volumes.
Ans: FALSE
Page#: 6
LEVEL: Moderate
LO: 1-1
11. Economies of scale are cost savings achieved when an organization manufactures products in large
volumes.
Ans: TRUE
Page#: 6
LEVEL: Easy
LO: 1-1
, 12. Transaction costs are the_ costs associated with negotiating, monitoring, and governing exchanges between
people.
Ans: TRUE
Page#: 7
LEVEL: Easy
LO: 1-1
13. Formation of organization results in increased transaction costs.
Ans: FALSE
Page#: 7
LEVEL: 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.
Ans: TRUE
Page#: 8
LEVEL: Easy
LO: 1-2
15. Organizational theory is primarily concerned with how an organization can outperform its competitors.
Ans: FALSE
Page#: 8
LEVEL: Moderate
LO: 1-2
16. Organizations that provide essentially the_ same goods and services will always have similar organizational
cultures.
Ans: FALSE
Page#: 9
LEVEL: Moderate
1. An organization is a tool people use to coordinate their actions to obtain something they desire or value.
Ans: TRUE
Page#: 2
LEVEL: Easy
LO: 1-1
2. Organizations die or are transformed when the_ needs satisfied by them are no longer important.
Ans: TRUE
Page#: 2
LEVEL: 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.
Ans: TRUE
Page#: 2
LEVEL: 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.
Ans: FALSE
Page#: 3
LEVEL: Easy
LO: 1-1
5. The_ organizational environment is a set of forces and conditions that operate within an organization's
boundaries.
Ans: FALSE
,Page#: 3
LEVEL: Easy
LO: 1-1
6. Government is a part of organizational environment.
Ans: TRUE
Page#: 3
LEVEL: Easy
LO: 1-1
,7. As compared to a large company, the_ degree of specialization in a small company is higher.
Ans: FALSE
Page#: 5
LEVEL: Moderate
LO: 1-1
8. The_ environment in which an organization operates is a major source of uncertainty.
Ans: TRUE
Page#: 6
LEVEL: 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.
Ans: FALSE
Page#: 6
LEVEL: Moderate
LO: 1-1
10. Economies of scope are cost savings achieved when an organization manufactures products in large
volumes.
Ans: FALSE
Page#: 6
LEVEL: Moderate
LO: 1-1
11. Economies of scale are cost savings achieved when an organization manufactures products in large
volumes.
Ans: TRUE
Page#: 6
LEVEL: Easy
LO: 1-1
, 12. Transaction costs are the_ costs associated with negotiating, monitoring, and governing exchanges between
people.
Ans: TRUE
Page#: 7
LEVEL: Easy
LO: 1-1
13. Formation of organization results in increased transaction costs.
Ans: FALSE
Page#: 7
LEVEL: 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.
Ans: TRUE
Page#: 8
LEVEL: Easy
LO: 1-2
15. Organizational theory is primarily concerned with how an organization can outperform its competitors.
Ans: FALSE
Page#: 8
LEVEL: Moderate
LO: 1-2
16. Organizations that provide essentially the_ same goods and services will always have similar organizational
cultures.
Ans: FALSE
Page#: 9
LEVEL: Moderate
