IIA IIA Certifications IIA-CIA-PART4 Questions & Answers

• Question 331:

  A small engineering consulting firm accepts special projects from customers in a variety of fields. Its choice of an organic organizational design was most likely based on its:

  A. Lack of concern for self-fulfillment of employees.

  B. Preference for formal communication.

  C. Adoption of directive leadership style.

  D. Participative decision making processes.

  Correct Answer: D

  The organic structure is best suited to a company that emphasizes operational efficiency less than the flexibility needed to respond quickly to changes in its environment and the creativity to find solutions to new problems. Decision making in this context tends to rely on input from many sources and requires multidirectional communication. Hence, a horizontal or flat structure typified by project or matrix management will be appropriate.

• Question 332:

  With the shift in some countries' economies toward service industries, a new form of organization has developed. This organization structure is referred to as the professional bureaucracy. While this structure resembles the machine bureaucracy which relies on standardized work processes) in several respects, it is different in one key aspect. This significant difference is that in a professional bureaucracy:

  A. Senior management has had to give up a substantial amount of control.

  B. Tasks are accomplished with a high degree of efficiency.

  C. There is strict adherence to rules.

  D. There is a tendency for subunit conflicts to develop.

  Correct Answer: A

  A professional bureaucracy e.g., a university or library) is a complex and formal but decentralized organization in which highly trained specialists have great autonomy. The jobs performed by these professionals require years of education and training. By their nature, such jobs can be performed effectively only if the employees are afforded substantial autonomy.

• Question 333:

  The structure of an organization generally follows its overall strategy. At one end are loosely structured, organic organizations. At the other end are highly centralized, tightly controlled, mechanistic organizations. Consider the overall strategy of a company that is a pioneer in the combination of laser and robotic technologies. The company's scientists and engineers hold many patents. They are continually looking for ways to improve their products as well as to introduce new ones. Identify the most appropriate structural option for this organization.

  A. Mechanistic.

  B. Imitative.

  C. Organic.

  D. Bureaucratic.

  Correct Answer: C

  Organizational structure depends on the company's overall strategy. This organization has adopted an innovation strategy. It introduces major new products or services. The structure that provides the flexibility required for major innovation is organic, a form of organization characterized by a loose structure, low division of labor, low formalization, and decentralization.

• Question 334:

  When an organization depends to a great extent on its environment, which of the following statements best characterizes the relationship among an organization's environment, the level of uncertainty it faces, and its structure? The more dynamic and complex the environment, the

  A. More uncertainty the organization will face and the more organic the structure should be.

  B. More uncertainty the organization will face and the more mechanistic the structure should be.

  C. Less uncertainty the organization will face and the more autocratic the structure should be.

  D. Less uncertainty the organization will face and the more organic the structure should be.

  Correct Answer: A

  A dynamic and complex organizational environment faces constant change, so the level of uncertainty increases. The more uncertainty an organization faces, the more organic the structure should be. Organic organizations tend to be flexible and adaptive to change.

• Question 335:

  A large company uses assembly line techniques to manufacture a single product. Its choice of relatively mechanistic organizational design was more likely based on its:

  A. Need for rapid response to environmental change.

  B. Primary concern for operational efficiency.

  C. Low fixed technology requirements.

  D. Project management emphasis.

  Correct Answer: B

  Mechanistic organizations have vertical structures with duties and authority clearly defined by position in the hierarchy, a stringent set of formal controls, and a centralized staff. Such organizations tend to emphasize efficiency and operate in a stable environment withwell- establishedtechnology. Large firms in basic industries autos, utilities) often adopt this structure.

• Question 336:

  Routine tasks, which have few exceptions and problems that are easy to analyze, are conducive to:

  A. Formalized structure, in which procedures manuals and job descriptions are common.

  B. Decentralized decision making, in which decisions are pushed downward in the organization.

  C. Organic structures that emphasize adaptability and flexibility to changing circumstances.

  D. High degrees of job satisfaction on the part of the employees performing them.

  Correct Answer: A

  Technology has been viewed in terms of two dimensions:task variability and problem analyzability, or the exceptions encountered in work and the search procedures for responding to the exceptions, respectively. Routine tasks have few exceptions, and the search for solutions is well defined. Because routine tasks change little overtime, they are well suited to a mechanistic structure. One characteristic of such a structure is high formalization.

• Question 337:

  For the past several years, many organizations have attempted to reduce administrative costs and respond more rapidly to customer and competitive demands. One method is to eliminate layers of middle management. The element of organizational structure affected by such reductions is:

  A. Spatial differentiation.

  B. Formalization.

  C. Vertical differentiation.

  D. Formalization of jobs.

  Correct Answer: C

  Vertical differentiation concerns the depth of the organizational hierarchy. The greater the number of levels, the more complex the organization, the greater the potential for information distortion, the more difficult the coordination of management activities, and the slower and less effective the response to changing conditions.

• Question 338:

  The key component of an organization configured as a professional bureaucracy is the:

  A. Strategic apex.

  B. Techno structure.

  C. Line administration.

  D. Operating core.

  Correct Answer: D

  According to Henry Minlzberg, an organization has five components. Depending on which is in control, one of five different structures will evolve. The five organizational components include 1) the operating core, which consists of workers who perform the basic tasks relatedto production; 2) the strategic apex or senior managers; ) the middle line, or managers who connect the core to the apex; 4) the technostructure or analysts who achieve a certain standardization in the organization; and 5) the support staff, which provides indirect support services. A professional bureaucracy e.g., a university or library) is a complex and formal but decentralized organization in which highly trained specialists have great autonomy. Duplication of functions is minimized. For example, a university would have only one history department. Thus, the operating core is in control. It is the key in a professional bureaucracy because of the emphasis on standardized skills. Professional bureaucracy engages people with standardized skill sets and allows them to function in an unsupervised manner.

• Question 339:

  Which of the following is a characteristic of a mechanistic organization?

  A. Knowledge by employees tends to be task-specific.

  B. Self-control is preferred to hierarchical control.

  C. Superiors usually have an informational and advisory role.

  D. Communication is horizontal.

  Correct Answer: A

  A mechanistic organization designs tasks that are specifically designed and have little flexibility. Therefore, the mechanistic organization focuses on task-specific knowledge by its employees.

• Question 340:

  In a dynamic equilibrium, successful organizations have a balance between fragmentation and coordination. Which of the following may cause an organization to risk the loss of this equilibrium?

  A. A framework of rules.

  B. A hierarchy of authority.

  C. Formation of cross-functional groups.

  D. Division of labor and technical specialization.

  Correct Answer: D

  The division of labor and technical specialization often lead to differentiation within an organization. Differentiation leads to fragmentation because specialists often have a narrow focus and make integration more difficult.