Ch. 7 Organization, Team Work, and Communication

Organization Culture (Corporate Culture)
A firm’s shared values, beliefs, traditions, philosophies, rules, and role models for behavior
~ Mission Statement
~ Code of Ethics
~ Memos
~ Manuals
~ Ceremonies
~ Dress Code
~ Work Habits
~ Extracurricular Activities
~ Stories
~ Discussion with co-workers
The arrangement or relationship of positions within an organization
An organization’s structure develops when:
~ Managers assign work tasks to specific individuals or work groups
~ Coordinate the diverse activities required to reach the firm’s objectives
Organizational Chart
A visual display of the organizational structure, lines of authority (chain of command), staff relationships, permanent committee arrangements, and lines of communication
The division of labor into small, specific tasks and the assignment of employees to do a single task
Why specialize?
~ Efficiency
~ Workers do not waste time shifting from 1 job to another
~ Ease of training
~ Activities too numerous for one person
The grouping of jobs into working units usually called departments, units, groups, or divisions:
Functional departmentalization
Product departmentalization
Geographical departmentalization
Customer departmentalization
Functional Departmentalization
The grouping of jobs that perform similar functional activities, such as finance, manufacturing, marketing, and human resources
Product Departmentalization
The organization of jobs in relation to the products of the firm
Geographical Departmentalization
The grouping of jobs according to geographic location, such as state, region, country, or continent
Customer Departmentalization
The arrangement of jobs around the needs of various types of customers
Forms of Organizational Structures
~ Line Structure
~ Line and Staff Structure
~ Multi-divisional Structure
~ Matrix Structure
Line Structure
The simplest organizational structure in which direct lines of authority extend from the top manager to the lowest level of the organization
Owner-Manager-Assistant Manager-Hourly Employee
What is line structure?
~ Has a clear chain of command, which enables managers to make decisions quickly
~ Structure requires that managers possess a wide range of knowledge and skills
~ Most common in small businesses
Line and Staff Structure
A structure having a traditional line relationship between superiors and subordinates and also specialized managers – called staff managers – who are available to assist line managers
Multi-divisional Structure
A structure that organizes departments into larger groups called divisions
Multi-divisional Structure occurs as organizations grow larger and more diversified…give examples
~ Divisions can be formed on the same bases as departments (customer, product, and/or geography)
~ Delegation of authority and divisionalized work
~ Inevitably creates work duplication
~ Makes it more difficult to realize the economies of scale that result from grouping functions together
Matrix Structure
A structure that sets up teams from different departments, thereby creating two or more intersecting lines of authority; also called a project-management structure
What does a matrix structure provide?
~ Flexibility
~ Enhanced cooperation
~ Creativity
~ Enable company to respond quickly to changes in the environment
Defined as two or more individuals who communicate w/ one another, share a common identity, and have a common goal
A small group whose members have complementary skills, have a common purpose, goals, and approach; and hold themselves mutually accountable
Working Group
~ Strong, clearly focused leader
~ Individual Accountability
~ has the same purpose as the broader organizational mission
~ creates individual work products
~ rubs efficient meetings
~ measures its effectiveness indirectly by its effects on others
~ discusses, decides, and delegates
~ has shared leadership roles
Span of Management
refers to the number of subordinates who report to a particular manager.
Wide span of management: exists when a manager directly supervises a large number of employees.
Narrow span of management: exists when a manager directly supervises only a few subordinates.
Top Managers
should not directly supervise more than 4-8 people
Lower-Level Managers
are capable of managing a much larger number of subordinates (12-25 people)
the obligation, placed on employees through delegation, to perform assigned tasks satisfactory and be held accountable for the proper execution of work
Line managers have the authority to do what?
~ Enforce discipline
~ Issue Orders
~ Adjust to changing conditions
Decentralized Organization
decision-making authority is delegated as far DOWN the chain of command as possible
Centralized Organization
a structure in which authority is concentrated at the TOP, and very little decision-making authority is delegated to LOWER levels
Delegation of Authority
giving employees not only tasks but also the power to make commitments, use resources, and take whatever actions are necessary to carry out those tasks
Statement: Organizations with few layers are FLAT and have WIDE spans of management.
Departmentalization: Name 3 advantages
1. Employees develop in depth skills and continue to progress
2. The company can achieve economies of sales
3. Top management can easily direct various department activities
Narrow Span of Management: Name 3 examples
1. the manager has many responsibilities other than supervision
2. centralized organization
3. the interaction between superiors and subordinates is frequent
Wide Span of Management: Name 3 examples
1. when the manager has few responsibilities other than supervision
2. decentralized organization
3. when subordinates are highly competent
Line and Staff Organization
may experience problems with over staffing and ambiguous lines of communication
Accountability Principle
employees accept an assignment and the authority to carry it out are answerable to a superior for the outcome