All Free Introduction to Business MCQs with Answers

• A. Line authority
• B. Staff authority
• C. Functional authority
• D. Personal authority

Explanation: Staff authority gives specialists the right to provide advice, expertise and support.

• A. Flat structure
• B. Project structure
• C. Tall structure
• D. Network structure

Explanation: A tall structure has several hierarchical levels and a narrow span of supervision at each level.

• A. Network structure
• B. Divisional structure
• C. Geographical structure
• D. Functional structure

Explanation: A functional structure places similar specialists together, such as finance, marketing and production.

• A. Span of control
• B. Chain of command
• C. Departmental grouping
• D. Management by objectives

Explanation: The chain of command shows the formal reporting path through the organisation.

• A. Requiring all purchases to be approved by the chief executive
• B. Giving regional managers authority over local operations
• C. Adding more decisions to the head office agenda
• D. Removing decision rights from department managers

Explanation: Decentralisation distributes decision-making authority to lower levels or separate units.

• A. Line structure
• B. Functional structure
• C. Network structure
• D. Machine bureaucracy

Explanation: A network structure relies on external organisations for important activities and coordinates them through a central organisation.

• A. Permanent functional structure
• B. Customer-based structure
• C. Geographical structure
• D. Project-based structure

Explanation: A project-based structure organises people around a specific, often temporary objective.

• A. Customer departmentalisation
• B. Process departmentalisation
• C. Product departmentalisation
• D. Functional departmentalisation

Explanation: Customer departmentalisation creates units to meet the needs of distinct customer groups, such as corporate and retail buyers.

• A. Flexible jobs with informal communication
• B. Clear hierarchy with specialised jobs
• C. Few rules and broad employee discretion
• D. Frequent redesign of departments

Explanation: A mechanistic structure relies on hierarchy, specialised roles, formal rules and centralised coordination.

• A. Customer type
• B. Product category
• C. Geographical area
• D. Work process

Explanation: The departments are formed around successive stages of production, so the basis is the work process.

• A. The obligation to answer for results
• B. The duty to perform an assigned task
• C. The right to give orders to others
• D. The grouping of related jobs

Explanation: Accountability means being answerable for the performance and results of an assigned responsibility.

• A. To measure the profitability of each department
• B. To display formal relationships and reporting lines
• C. To describe the personal friendships among workers
• D. To list the prices of organisational products

Explanation: An organisational chart presents the formal structure, including positions, departments and reporting relationships.

• A. Work is organised mainly around permanent departments
• B. Employees work only within their specialised function
• C. Cross-functional teams share responsibility for work
• D. Managers retain all operating decisions at the top

Explanation: Team-based structures use groups that may include members from different specialist areas and share responsibility for completing work.

• A. Uses only one basis for grouping all activities
• B. Places all employees in temporary project teams
• C. Removes every formal reporting relationship
• D. Combines features of two or more structural forms

Explanation: A hybrid structure combines elements such as functional and divisional arrangements to meet different organisational needs.

• A. Social interaction and personal networks
• B. Written job descriptions and policies
• C. The official organisational chart
• D. The legal registration of the business

Explanation: Informal relationships develop naturally through social interaction, shared interests and personal networks.

• A. Unclear duties requiring constant supervision
• B. Inexperienced staff performing varied tasks
• C. Highly routine work with capable employees
• D. Managers handling many unrelated projects

Explanation: Routine work and capable employees require less direct supervision, allowing one manager to oversee more subordinates.

• A. Personal preferences of senior managers
• B. Continuous changes in job responsibilities
• C. Informal friendships between departments
• D. Formal rules, procedures and hierarchy

Explanation: Bureaucratic organisations coordinate work through formal rules, defined roles, procedures and a clear hierarchy.

• A. Delegation transfers tasks but not ultimate accountability
• B. Responsibility can exist without any task
• C. Delegation removes all managerial accountability
• D. Authority and accountability always belong to different people

Explanation: A manager may delegate authority and responsibility for carrying out a task, but remains ultimately accountable for the result.