Which of the following statements about an organisation chart is not true?
D Rationale: Line authority can easily be shown on the organisation chart.
Pitfalls: You may have hesitated if you didn’t know the difference between functional authority
(where an expert department has authority over the activities of other departments in the areas of
its expertise eg the HR department setting recruitment policy for the sales and production
departments) and line authority (direct authority flowing down the chain of command). However,
you only needed to know the meaning of line authority to see that the statement was untrue.
Ways in: You may have paused to ask whether an organisation chart can improve internal
communications, but it does in one key way: by highlighting the length and complexity of lines of
communication between people who need to co-ordinate their work.
Which of the following is a correct definition of ‘span of control’?
C Rationale: This is the definition of span of control: all the others are distractors.
Pitfalls: All the distractors are plausible: note the need to think them through carefully. Option A
is close to the correct definition – but if you think about it, the number of subordinate employees
includes all those below the manager, whereas span of control is direct reports only.
Which of the following terms is not used by Mintzberg in his description of organisational structure?
B Rationale: Support base is not one of Mintzberg’s components of organisation structure: the other
correct terms are middle line and support staff.
Pitfalls: The basic terminology of well-known models is must-learn material!
Y plc is a growing organisation which has recently diversified into a number of significant new product
markets. It has also recently acquired another company in one of its overseas markets.
What would be the most appropriate form of organisation for Y plc?
B Rationale: While there may be elements of functional and geographical organisation, Y plc’s
situation suits divisionalisation: more or less autonomous product and regional businesses, with
co-ordination from head office. ‘Diversification’ and ‘acquisition’ are good pointers to
Pitfalls: Don’t get sidetracked by the link between ‘overseas markets’ and ‘geographical’.
Which of the following principles of classical management is challenged by matrix management?
C Rationale: Matrix organisation is based on dual command: the classical principle of unity of
command is ‘one person, one boss’.
Which of the following statements about the informal organisation is not true?
D Rationale: Option A is a fact. Option B is true, because of informal ‘short cuts’ which are often
developed and shared, by-passing health and safety rules and procedures. Option C is true,
because the ‘grapevine’ encourages knowledge sharing and multi-directional communication.
Option D is not true: managers can feed information into the grapevine and be part of their own
Which of the following statements is/are true?
(i) An informal organisation exists within every formal organisation
(ii) The objectives of the informal organisation are broadly the same as those of the formal
(iii) A strong, close-knit informal organisation is desirable within the formal organisation
A Rationale: Statement (i) is true. Statement (ii) is not, because the informal organisation has its
own agenda. Statement (iii) is not, because a strong informal organisation with its own agenda
can undermine the formal organisation: create damaging rumours, safety/quality shortcuts,
distractions from task goals etc.
What is an organisation which has removed the internal barriers which separate hierarchy levels and
functions and also between the organisation and its suppliers, customers and competitors known as?
D Rationale: This describes a boundaryless organisation. A hollow organisation splits people and
activities into core and non-core. In modular organisations different elements or components of
the product or service the organisation produces are outsourced to different suppliers. In a jobless
structure the employee becomes not a job-holder but a seller of skills.
Which of the following statements are true?
(i) With a shared service centre services are likely to be less tailored
(ii) The IT function is commonly provided using shared service approach
(iii) A shared service centre is not part of the organisation
B Rationale: The shared service centre is created within the organisation and is a part of it,
although its relationship is similar to that of an external service provider.
BZ Ness Ltd is an organisation with a strongly traditional outlook. It is structured and managed
according to classical principles: specialisation, the scalar chain of command, unity of command and
direction. Personnel tend to focus on their own distinct tasks, which are strictly defined and directed.
Communication is vertical, rather than lateral. Discipline is much prized and enshrined in the rule book
of the company.
From the scenario, what sort of culture does BZ Ness Ltd have, using Harrison’s classifications?
A Rationale: The role culture is a bureaucratic or mechanistic culture, as described in the scenario.
Task culture is project-focused; existential culture is person-focused; and power culture is leaderfocused.
Pitfalls: If you didn’t know Harrison’s model well, you might have confused ‘focus on the task’
(see in the scenario) with a task culture, or the strong central leadership with a ‘power’ culture.