CHAPTER 15 – ACTIVITIES/ EXERCISES

Choose one activity.

2. Search the web to find three articles on an organization that has changed its structure in
the recent past (downsized or increased in scale). Carefully read the articles and describe
what happened using structural terms from this chapter. What kinds of internal and
external reactions were there to the structural change? What was the impact of the change
on the organization’s effectiveness (e.g., perhaps as measured by its stock price)?
 Recently, Nestle Company had several changes to their organizational structure.
They ventured into more diverse and effective management. The company created
a new group strategy and business development function to support the
company in identifying internal and external strategic growth opportunities.
The process of change in this organizational structure was determined
through a nine-month sales test result. First change that was made was the
integrating of the Nestle Waters into their three geographical zones. They
aimed to improve their service proximity towards their most consumers.
And they are currently based in Switzerland. This shows a geographic or
location type of departmentalization. Due to the reorganization, they also
had their deputy executive vice-president leave his position of which I
assume is for downsizing their staffs. The company also capitalized more
into the strong demands and trends from their customers preference. So, they
also established partnerships from other brands. But the most recent change
is the use of GLOBE, a system Codification-Based Strategy, in information use
and sharing. It’s an upgrade of their technology, but it also provides a wider span
of control and easier chain of command. Wherein the database is more open and
supervision is less needed. Therefore, the company went from a decentralized
corporate structure, into a more centralized management digitally. Which is also a
good effect to the organization internally. As the results shown, the changes in
Nestle’s organizational structure were performing well and effectively. The nine-
month sales increased 2.9% to 68.4 billion Swiss francs ($69.3 billion) from 66.4
billion Swiss francs in the prior-year period. And organic sales growth reached
3.7%. To conclude, it was a successful and positive change in organizational
structure that made Nestle both downsize and increase in scale to improve their
company’s stock market.
Source/s: https://www.bakingbusiness.com/articles/49618-nestle-announces-several-
organizational-changes
https://ivypanda.com/essays/managing-change-in-organization-the-nestle-case-study-
report/
https://www.nestle.com/media/pressreleases/allpressreleases/nestle-reorganization-
global-information-technology-activities

Reflection
Examine your own work/student life: consider the jobs/positions you have held and
organizations with which you have been associated. Based on your experiences, what
type of organizational structure appears to suit your best? Why? Relate your own
attitudes, behaviors, and values to the organizational structures described in this chapter.
 I think the type of organizational structure that suits me best is the functional
structure or similar to work specialization. It’s simple, not too complex and also
groups employees through skillset and function. It has a pyramid like hierarchy
and I prefer decisions and orders coming from division managers because each
department is managed independently. It also allows employees to focus on their
role, which is a good feat for me because I don’t like messy and inconsistent job
tasks. It also encourages specialization that is best also in order to maximize
results and mastery of the job. In my past experience, I was assigned to do
secretarial duties, but also field tasks because of the lack of division of labor. I’m
not on my best performance with that way of management. I’m also the type to
focus on one because I don’t easily get bored if I like my job description. Same
with my student duties, I like my school works specified and organized according
to function. Therefore, functional type of organizational structure is best for me.

ASSESSMENT ENUMERATION
Organizational Structure Key Elements
• WORK SPECIALIZATION
• DEPARTMENTALIZATION
• CHAIN OF COMMAND
• SPAN OF CONTROL
• CENTRALIZATION &
• DECENTRALIZATION
• FORMALIZATION

Common Organizational Designs

1. SIMPLE STRUCTURE
2. BEREAUCRACY
3. MATRIX STRUCTURE

Determinants of Structure
1. ORGANIZATIONAL STRATEGY
2. ORGANIZATION SIZE
3. TECHNOLOGY
4. ENVIRONMENT

MULTIPLE CHOICE
1) Which of the following is not one of the six key elements of organizational structure?
A) chain of command B) departmentalization
C) work specialization D) span of control E) location of authority

2) A task that is subdivided into many separate jobs is considered to have ________.
A) a high degree of departmentalization B) a low degree of decentralization
C) a high degree of work specialization D) a wider span of control
E) a high degree of formalization

3) A ________ allows management to make the most efficient use of its employees' skills
and even successfully improve them through repetition.
A) low degree of centralization B) high degree of formalization
C) wider span of control D) low degree of departmentalization
E) high degree of work specialization

4) Which of the following statements is true regarding work specialization?

A) Work specialization indicates to what degree there will be rules and formalization
regulations to direct employees and managers.
B) Work specialization decreases the time spent in changing tasks.
C) Work specialization increases the cost of finding and training workers to do specific
and repetitive tasks.
D) Work specialization provides an unending source of increased productivity.
E) Work specialization hinders efficient use of employee skills.

5) The basis by which jobs are grouped is called ________.

A) formalization B) departmentalization
C) chain of command D) span of control

6) Which one of the following is not one of the primary ways to group jobs?
A) skill B) customer C) function D) product E) service

7) A manufacturing manager organizes a plant into engineering, accounting,

manufacturing, personnel, and supply specialists’ departments. This division of an
organization into groups according to work functions is an example of ________.
A) social clustering B) bureaucracy C) specialization
D) centralization E) departmentalization

8) Agri Producers provides services related to the testing of soil and crops. It also
provides advice to its customers for improving the productivity of the soil and the quality
of the crops. It has customers all over the United States. The crops and soil are different
in the various large areas of the nation, such as the west coast and the Midwest. Which
type of departmentalization would be best for Agri Producers?
A) functional B) process C) product
D) geographic E) temporal

9) Some of the departments in Procter & Gamble are Tide, Pampers, Charmin, and
Pringles. This is an example of departmentalization by ________.
A) function B) process C) geography
D) product E) interest

10) Aeronautics Inc., a parts supplier, has departments for government aircraft and
contracts, large commercial aircraft clients, and small personal aircraft clients. This is an
example of ________ departmentalization.
A) product B) function C) geography
D) customer E) service