Examples for exam questions

Chapter 1: Introduction
1. SPAN OF CONTROL
Explain the term Span of Control. There are four different factors influencing
the span of control.
Explain these factors using examples. (6P)
o Definition: Number of subordinates who report directly to a
manager.
o Factors:
The Superior
Subordinates
The work to be supervised
Control Methods
Example: Very sophisticated methods like a computer
supported MIS System ---> a wider Span is possible. If
there only basic methods like e -mails and meetings
the span of control is more narrow.
Is there an ideal span of control? (2P)
o There is no ideal span of control it depends on internal and external
factors. For Example: Dynamic and complex environment --->
Span of Control is more narrow.

2. TRADITIONAL ORGANIZATIONAL APPROACHES (14)

There are a lot of approaches, which try to explain organizational structure and
behaviour. You know three of these traditional approaches.
a.) There are different approaches why? (4)
There is no approach which can explain the whole complexity of organisations.
Each approach looks at a selected part of an organisation (behaviour, structure,
motivation of the employees, interest of the stakeholders....)
The approaches are influenced by the time of their investigations. For example:
Taylor - Scientific Management is driven by the need to produce big numbers of
goods for the extended demand of the customers. The challenge at the beginning
of the 20th century was: "How to make mass production effective ?"

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b.) List the three traditional ones, which you know. (2)
Frederic Taylor: Scientific management
Max Weber: Bureaucracy
Mayo: Human Relations
c.) Choose one and explain this approach. (8)
Max Weber:
He looks for an organisational form which enables big administrations
(Government agencies) to work very efficient. He thinks that organisations work
according to his rules can operate very productive.
Rules:
Hierarchy of authority
Impersonality
Written rules of conduct
Promotion based on achievement
Specialized division of labour
Efficiency

3. MINTZBERG
a.) Organizational parts
According to Mintzberg there are 6 Basic Parts of an organization.
List these Parts (6P)
Choose two of them and explain them. (8P)
Parts:
Strategic Apex
Operating Core
Technostructure
Middle Line
Support Staff
Ideology
The operating core carries out the elementary functions of the production for an
organisation.

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Functions:
To secure the input for the production
To transform inputs in outputs
To distribute outputs
To provide direct support to the input, transformation and output
functions
The strategic apex is charged with ensuring that the organisation serves its
mission in an effective way.
Duties:
Supervision
Management of the boundary conditions
Development of the strategy

b.) For Mintzberg, environmental variety is determined by both environmental

complexity and the pace of change.
Following these assumptions he identifies four types of organisational forms.
List these forms (4P)
o Machine Bureaucracy
o Professional Organisation
o Entrepreneurial Startup
o Adhocracy
Choose one and explain it. (6P)
Entrepreneurial Startup
The most important coordination mechanism is the direct supervision. Usually
the strategic apex is the most important part of the organisation. It has a central
an organic structure. It works well in smaller companies. Looking at the
external factors, it can be used in a simple and dynamic environment.
Examples (Mobile Phone Shop, Fashion Company..)

4. Balanced Scorecard / BSC (12 P)

The balanced scorecard is a well working instrument, which makes it possible to
implement a strategy.

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a) What are the four basic perspectives of a BSC ? (4 P)

Financial perspective
Customer perspective
Internal Business Processes perspective
Learning and Growth perspective

b) For each perspective there are 4 parameters which have to be defined.

What are these parameters? (4 P)
Objectives
Measures
Targets
Initiatives

c) Choose one of the perspectives and explain it using the parameters from
b. (4 P)
Looking at a kitchen company which wants to become the European market
leader it has to fix for the learning an growth perspective the following
parameters:
Objective: Establishing a multicultural culture
Measure: Passed TOEFL tests
Targets: All employees in administration mast pass the tests
Initiatives: In House Training / External Training

Chapter 2: Organisational Structure

1. Basic Shapes
The organisational form direct line with staff position tries to combine the
advantages of the direct line form and multiple line form.
a.) What are the most important advantages of the direct line and the multiple
line form? (6P)

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Direct Line:
Clear rules for supervision (one man one boss)
Clear assignment of tasks, responsibilities, competencies
Clear structure
Clear flow of information (top down + bottom up through all hierarchical
levels)
Easy to control
Multiple Line:
Improved skills of the supervisors
Reduced workload for the managers (top level)
Direct and quick communication
Skills are in the middle of interest
Interdisciplinary problem solving

b.) How does the direct line with staff position try to combine these advantages?
(2 P)
Looking at the advantages of the Direct Line it would be the best for an
organisation to have one omniscient leader who can master limitless workload.
To support these ideas the employees working in the staff department try to
support the top management by:
Preparing decisions
Providing consultancy
Collecting Information
Controlling and Supporting
.... to help the Management to avoid the bottleneck syndrome.

c.) What are the problems of the direct line with staff position? (2P)
Loss of Motivation
Highly skilled workers are only allowed to make suggestions they are not
allowed to supervise
They do not get a bonus for good decision preparation

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Chapter 3: Process Structure

6. Primary /Support Processes (15 P)
Looking at the new ideas of process orientation we separate primary and
support processes.
a. Explain both concepts. (8 P)
Looking at the processes of a company it us useful to separate primary and
support processes, as you have to treat them differently:
Primary/Core Processes make up the companies competitive advantage.
They are based on core competencies
They are creating the most value
They are strategically relevant
Support processes assist primary processes concerning their goods / service
provision
They are not strategically relevant
They are outsourcing candidates
b. For different lines of businesses there are typical primary processes.
Select two lines of businesses and give for each two examples.(4P)
Production companies
Innovation Process
Production planning and steering
Technology development
Order Processing
Public utility
Tariff classification
Service management
c. Do you think that support processes are always outsourcing candidates?
Give reasons for your answer. (3P)
No they are not always outsourcing candidates. You have to look at the details
of the process. If the process have some kind of confidentiality (e.g. legal
processes) or if the suppliers can not provide quality an availability of service
(e.g. It Processes) it will not be useful to outsource the process.
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CASE Studies
1. Porcelain Company
Description:
75 years ago your grandfather founded a porcelain company in Selb (Bavaria).
During the leadership of your grandfather and your father the company had
about 25 employees. The Company sold dinnerware, only in Bavaria.
In 1985 it was up to you to become the boss of this company. You had a vision
you wanted to become one of the most important dinnerware producers in
Europe. Using your excellent marketing skills, you were able to reach this vision
in the year 1993. In this year your company had about 500 employees.
Now it was up to you to decide whether to become a global player with
dinnerware selling the items all over the world, or to diversify within Europe.
You decided to diversify. Your product range was completed by giftware, then
by ceramic tiles and at the end by bathroom fixtures like washbowls.
Now we are in the year 2011 and you are the CEO of a company of about 2300
employees. Your company has four sites in Bavaria. Each site is specialized,
producing one of the product lines.
Questions:
a.) Think about the organizational form during the time of your father and
grandfather. Explain this form. Draw an organisation chart. (4P)
The best would to be a functional organised. As it was a company with only 25
employees a functional organised form separated in two sectors a commercial
and a technical would be a well working one. If you want to have some more
functional specialisation you can separate the sectors in different departments.
These would improve the learning curve effect, as the work is more specialised.
The disadvantage of this separation is to loose flexibility.

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b.) To realize your vision in 1985 it was necessary to change the organizational
form. Why was these necessary? Which organisational form would you prefer?
Draw an organisation chart. (6P)

A extended functional Form would be a well working one.

There are different reasons to choose this form:
As you want to provide all European countries it is necessary to separate
the sales department in different ones. The reason for this separation may
be the different tastes, languages... .
You can establish more specialised production departments to have the
advantages of specialised workers and specialised machinery (economies
of scale)

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c.) What can be the fitting organisational form of 2011? Explain the pros and
cons of this form. Draw an organisation chart. (6P)

Having 2300 employees the company is large enough to be separated in

different divisions.
There are different advantages:
Manageable Units
Strong motivation for the division leaders
Better control from better appraisals
Disadvantages
Failure to develop top level executives
Excessive number of staff personnel (higher costs)
Proliferation of sales + manufacturing- departments (higher costs)
Uncoordinated customer relationships
Short range thinking
Making the divisions record look good

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2. Founding of a Company
You are the founder of a company. In order to finance the company you need a
loan from the bank. Your Banker asks you for business plan.
Besides all the financial planning like balance sheet, P & L and cash accounting
he wants to have some more information about your organisational plans. His
questions are listed below.
Answer his questions choosing one of the following companies:

A middle sized Software Company, which develops and sells different

types of business-software (ERP-, BI-, ECM-, PPS-, CRM-Systems)
A Fashion Shop in Hof which has 5 branches in the area of Hof
A big sized Porcelain Company in the North of Franconia.
a) Write down the mission or purpose of the organization in a few
sentences. (4 P)
b) What are the specific things to be done to accomplish the mission?
(4 P)
c) Based on the specifics in b , develop an organisation chart. (4 P)
d) Develop, using your findings in c a structure according to
Mintzberg (4 P)
e) How can you make sure people in each position will work together?
(4P)
f) Who is responsible for customer satisfaction? How will you know
if customers' needs are met? (4P)
g) How will information flow within the organization? (4 P)

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Big Sized Porcelain Company

a. Mission ad purpose
To become an international player
Providing porcelain of high quality with a modern design
Focusing on giftware, as the competition in the dinnerware market is to
strong.
b. Specific things
To check the strength an weaknesses of the company using the SWOT
method
To decide about a strategy according to the findings of the SWOT
Analysis
To check the organisational structure and the processes. Do they fit to the
goals ?
c. Organisation Chart
I would choose a divisional organisation form to fit the needs of the customers
according to the regions.

Top Management

Europa

North America

Purchasing

Purchasing

Production

Production

Sales

Sales

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HR

R&D

IT

d. Mintzberg
I would choose a machine bureaucracy or a diversified form.
Reasons:
Well known products
Well known demand
Well known production methods.

e. Working together
There are different possibilities to make sure that the employees work together.
To build teams for projects.
To support informal meetings between different departments
To have a well working system of regulations and rules to make sure that
procedures work in standardized way

Customer Satisfaction
To make sure to meet the customers needs and to have a high consumer
satisfaction you must have a good design according to current trends.

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One possibility is to establish product managers who are in charge of the

customers satisfaction. For example: To have one for young people, for middle
aged people and for older people. To do this you have to extend your
organisation to a hybrid structure.
g. Information flow
As I want to have control over the important decisions I decide to establish a top
down decision flow and a bottom up information flow.
According to my preferred organisational structure (Divisions) the head of the
European Division is in charge of his division and has to report directly to the
top management. The same applies to the North American division.

3. Consulting a Software Company

You are working at a consultancy company. One of your customers is a big
software company. This company develops and sells all kind of software
products. It sells its products worldwide. The company has only one location in
Hof. There are working about 15.000 employees. At this location there are all
departments, which are necessary to run such a big company. (Purchasing,
Sales, R&D, H&R, Finance, Controlling, Marketing.).
The CEO of the company is a very high-educated software engineer, but he does
not have a lot of economical knowledge.
He found the company 25 years ago. The company was been running well all
the time, but for some years the company works less profitable. But this is not
the thing which annoys the CEO most. There is another reason, which concerns
him more. Figures from R & D show that that the development of new product
lines last nearly twice the time compared with former times. Looking around he
has to recognize that the bureaucracy has grown in all departments and decisionmaking is very time consuming.
Some time ago he has visited a management seminar, where he had heard about
different organisational forms and that it would be necessary to change structure
some time. He had identified that his company is functional organised. As he
does not have the experience to find out which structure may be the best for his
company he assigned you to help him.
a. Explain the advantages and disadvantages of the existing structure. (6 P)
b. Design an organigram of he existing structure. (4 P)

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c. Which organisational structure would you prefer for the company. Being
a well-educated consultant you can explain the advantages and the
disadvantages of the selected structure. (6P) divisional structure [line of business]
d. Design an organigram for the new structure. (4P)

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