In a large organization with ____ departmentalization, decision making tends to be slow.

Organizational structure refers to the way you organize the management and decision-making process of your business to maximize efficiency and productivity. Every business has unique challenges, which means that choosing the proper structure is dependent on the personalities, skills and talents of your staff as well as the type of business you operate. Horizontal and vertical organizations are two of the most common types of business structures. Understanding the benefits and drawbacks of each can help you make the right decision for your company.

Horizontal Organization Defined

If your company culture is all about tapping into the creativity and imagination of your staff and empowering them to do their jobs without micromanagement, then you may want to set up a horizontal organizational structure. In this structure, you grant employees the authority to make decisions without having to obtain executive approval. A horizontal organization has few – if any – managers because the focus is on empowering the staff members and removing any barriers between the executive level and the staff level. Teamwork, collaboration and the exchange of ideas are the hallmarks of a horizontal organization.

Vertical Organization Defined

Businesses with a large number of employees often choose to run a vertical organization, which is typically structured like a pyramid with executives at the top, midlevel managers in the middle, and low-level managers and employees at the bottom. In vertical organizations, you and other senior-level executives make all the major decisions and communicate those decisions to midlevel managers. These managers develop methods to implement your decisions and communicate these methods to the low-level managers that are responsible for supervising your employees as they go about their daily tasks. This top-down structure has a defined chain-of-command and strict protocols regarding how your employees can make suggestions that reach the upper levels of your company.

Advantages of Horizontal and Vertical Organizations

The main advantage of a horizontal organization is that employees are free to make important decisions without feeling as though management is second-guessing them. This empowerment can boost morale and motivation and spur creativity in your workers. Decision-making in horizontal organizations is fast because there are no barriers between workers and executives.

The primary advantage of vertical organizations is that all employees know and understand their roles and responsibilities, which can increase productivity. Vertical organizations motivate workers to seek management positions, which often results in them working efficiently to achieve performance standards.

Disadvantages of Horizontal and Vertical Organizations

The main disadvantage of horizontal organizations is that employees may not always make sound decisions without managerial supervision, and those bad decisions can impact your business. Another disadvantage is that without managerial authority, employees may have a hard time achieving consensus when working in teams.

The primary disadvantage of vertical organizations is that rank-and-file employees rarely speak or meet with executives. Decision-making can be slow because there are so many management layers.

75. Which of the following statements does NOT describe an advantageof product departmentalization?A. Decision making can be done at the top management levels.B. All similar activities within an organization can be donesimultaneously.C. Administrative costs are lower.D. Sales forecasting is easier.E. Performance of individual product lines is easy to assess.

76. Procter & Gamble is departmentalized, in part, on the basis ofproduct. Which of the followingcharacteristics would you expect to find at Procter & Gamble?

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departmentalization77. Target stores have departments for groceries, clothing, electronics,jewelry, and home goods. This is anexample of departmentalization by

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78. Which of the following is a common disadvantage inherent inproduct, customer, and locationdepartmentalization?

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79. Siemens created Siemens One to group employees together thatserve the same client. For example peoplefrom medical and building technology both serve hospitals, so a SiemensOne representative talks to a hospitalabout all of Siemens products and services. Siemens One uses ____departmentalization.A. product

B. functionC. locationD. customerE. sequence80. An appropriate basis of departmentalization for multinationalcompanies is

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81. Pastors at a large church specialize in meeting the needs of differentage groups. They are organized on thebasis of

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82. High schools register seniors first, then juniors, sophomores andfinally freshmen. What basis ofdepartmentalization does this represent?

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C. SequenceD. LocationE. Product83. The term ____ suggests that there must be a clear and unbroken lineof authority and responsibility from thelowest to the highest position.A. autonomyB. delegationC. chain of commandD. unity of commandE. scalar principle

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Which of the following is the most commonly used basis for departmentalization especially among small businesses?

8. The most common base for departmentalization, especially among smaller organizations, is by product.

When decisions flow from the top of the organization down the organizational structure is considered?

A hierarchical organizational structure contains a direct chain of command from the top of the organization to the bottom. Senior management makes all critical decisions, which are then passed down through subsidiary levels of management.

What happens to speed and effectiveness when using product departmentalization?

In product departmentalization, the speed and effectiveness of decision making are enhanced.

Which of the following is a disadvantage of functional departmentalization?

Disadvantages of functional departmentalization Decision making becomes slower and more bureaucratic. De-emphasis of overall company objectives. Accountability and performance become increasingly difficult to monitor. Overspecializes and narrows view¬points of key personnel.