Question 1

In the elaboration stage, an organization's growth is rapid, and employees are excited and committed to the organization's mission.

Accepted Answer

The elaboration stage is characterized by a mature organization that focuses on streamlining operations and efficiency, not rapid growth and initial excitement.

Question 2

In the collectivity stage, departments are established along with a hierarchy of authority, job assignments, and a beginning division of labor.

Accepted Answer

In the collectivity stage, departments are established, and there is an initial organization of roles and responsibilities, creating a hierarchy of authority and a beginning division of labor.

Question 3

Ninety-nine percent of businesses that make it past the first year still fail within five years because they can't make the transition from the entrepreneurial stage.

Accepted Answer

While it is true that many businesses fail within their first year, the statement that 99% of businesses that make it past the first year still fail within five years is false. The U.S. Bureau of Labor Statistics reports that about 80% of businesses survive their first year and about 50% survive their fifth year. Additionally, there are many reasons for business failure beyond simply not being able to make the transition from the entrepreneurial stage.

Question 4

Large size enables companies to take risks that could ruin smaller firms, and scale is crucial to economic health in some industries.

Accepted Answer

Large size can provide companies with resources and financial stability to take on risky projects, which might not be possible for smaller firms. In addition, some industries such as manufacturing require large-scale operations for efficient production and distribution, making scaling critical to their economic health.

Question 5

Weber's prediction of the triumph of bureaucracy proved accurate.

Accepted Answer

Weber's prediction of the triumph of bureaucracy was that it would become the dominant form of organization in modern societies, and this has largely come true in many areas such as government, businesses, and non-profit organizations.

Question 6

Some warning signs for organizational _____ include excess administrative and support staff, cumbersome administrative procedures, lack of effective communication and coordination, and outdated organizational structure.

Accepted Answer

The answer of Some warning signs for organizational _____ include...

Question 7

The elaboration stage involves the installation and use of rules, procedures, and control systems.

Accepted Answer

The answer of The elaboration stage involves the installation and...

Question 8

The following organization is in its collectivity stage: Employees at Ace identify with the company mission and goals, and they typically put in 55-hour workweeks. Ace is established in the marketplace, and is concentrating on getting more and more dealers to sign on. Ace does not have a written policies and procedures manual for its own employees.

Accepted Answer

The organization is in its collectivity stage as the employees identify with the company mission and goals, and the company is established in the marketplace. However, the fact that Ace does not have a written policies and procedures manual indicates that it is still in the growth stage and needs to establish formalized processes to sustain its growth.

Question 9

In 2008, with sales declining and the stock plummeting, Borders' then-CEO told a newspaper reporter who interviewed him about the company's situation: "We're not in trouble; we're not in trouble at all." Borders was in the ____ stage of decline.

Accepted Answer

The "inaction" stage of decline is characterized by a failure to respond to clear signs of trouble, often due to denial or overconfidence, as demonstrated by the CEO's statement.

Question 10

As organizations become larger, a larger percentage of top administrators is necessary.

Accepted Answer

As organizations grow, they often benefit from economies of scale, which can reduce the need for a proportionally larger number of top administrators.

Question 11

As organizations become larger, greater centralization is necessary.

Accepted Answer

The research on organization size indicates that larger organizations permit greater decentralization.

Question 12

As organizations become larger, a smaller percentage of technical and professional support staff is recommended.

Accepted Answer

As organizations become larger, a larger percentage of technical and professional support staff is recommended to ensure that the organization can operate efficiently and effectively.

Question 13

Managers at the American Red Cross are struggling with raising enough funds to cover expenses. Donations have been declining for several years, and major disasters have strained the organization's resources. Which of the following is considered responsible for the organizational decline at the American Red Cross?

Accepted Answer

Environmental decline refers to external factors that affect an organization, such as economic or social changes. In this case, declining donations and major disasters outside of the organization's control have contributed to the American Red Cross's financial struggles. Organizational atrophy refers to internal factors that lead to a decline, such as lack of innovation or outdated practices, and vulnerability refers to the potential for harm or risk. Downsizing refers to a deliberate reduction in size, which may or may not be a factor in the organization's decline in this case.

Question 14

Formalization refers to rules, procedures, and written documents that prescribe the rights and duties of employees.

Accepted Answer

Formalization involves written rules and policies that outline the responsibilities and obligations of employees in an organization. These rules and procedures may be outlined in employee handbooks, contracts, job descriptions, and other formal documents.

Question 15

Despite the increasing size of many companies, the economic vitality of the U.S. is tied to small and midsize businesses.

Accepted Answer

Small and midsize businesses play a crucial role in the U.S. economy, accounting for the majority of jobs and new job creation. Additionally, these businesses often innovate and contribute to economic growth, making them an important aspect of overall economic vitality.

Question 16

The life cycle phenomenon is a powerful concept used for understanding problems facing organizations and how managers can respond in a positive way to move an organization to the next stage.

Accepted Answer

The life cycle phenomenon is a well-established concept in organizational theory that can help managers anticipate and respond to challenges at various stages of an organization's development. By understanding the typical characteristics and challenges associated with each stage of the life cycle, managers can make informed decisions about resource allocation, leadership and team structures, and overall strategic direction. Therefore, statement A is true.

Question 17

Small companies are standardized, often mechanistically run, and complex.

Accepted Answer

Small companies are typically less standardized and more adaptable, often run in a more organic manner with fewer layers of management and less bureaucracy. They may also be less complex than larger companies.

Question 18

Weber believed that a well-managed bureaucracy would ensure efficient organizational functioning in both government and business settings.

Accepted Answer

This is correct. Weber believed that a bureaucracy, with its clear hierarchy of authority, rules and regulations, and specialized roles, would lead to efficient decision-making and action.

Question 19

In a large company going through the organizational life cycle, the replacement of top management may occur in its elaboration stage as it struggles to revitalize.

Accepted Answer

In the elaboration stage, companies often need to revitalize and adapt to changing circumstances. This may require new leadership, and the replacement of top management can occur in order to facilitate this revitalization process. Therefore, it is true that this may occur in the elaboration stage of the organizational life cycle.

Question 20

There are ten stages of life cycle development that an organization must generally go through in order to reach the final stage when rewards are personal and aimed at those who contribute to organizational success.

Accepted Answer

The concept of organizational life cycle stages varies, but it typically includes fewer than ten stages, such as startup, growth, maturity, and decline. The idea of ten specific stages is not a standard model.

Quiz 9: Organization Size, Life Cycle, and Decline