CAIB 4 Chapter 2 Questions and Answers Rated A+

Organizing involves determining the way the brokerage's activities will be divided into measurable units. Identify the three elements to organizing effectively. 1. Creating an Organizational Structure 2. Defining Employee Relationships 3. Establishing Position Descriptions The organizational structure is the skeleton upon which the brokerage grows and interacts. The structure also defines who has authority and responsibility for activities. Identify three basic forms of organizational structure based on the way authority and responsibility is delegated. 1. Line Organization 2. Functional Organization 3. Line and Staff Organization Identify which type of brokerage is best suited for a line organization. Briefly explain why this is so. Best suited to a smaller brokerage in which senior management personally directs the activities of subordinates. This organizational form presumes that the senior executives are fully familiar with all aspects of the brokerage's business, as all decisions are made directly by them. In a line organization, each subordinate has only one person to whom they are responsible.Identify three advantages of the line organization 1. Simplicity 2. Clear delegation of authority 3. Quick decision making Identify three disadvantages of the line organization 1. Line managers must be fully knowledgeable in a wide range of areas in order to be able to make decisions. 2. Power is concentrated at the top because senior management must be involved in all decisions. 3. It limits the growth and development of employees by stifling innovation. Identify why the functional organization form was created. To overcome the key weakness of the line organization which is the concentration of too many activities in too few managers. Identify two advantages of a functional organization 1. Provides employees with expert advice 2. Decisions are made by a manageme