Chapter 7: Organization, Teamwork, Communication

question

Organizational Structure
answer

A firm’s shared values, beliefs, traditions, philosophies, rules and role models for behavior
question

Structure
answer

The arrangement or relationship of positions with in an organization
question

Organizational Chart
answer

Visual Display of the organizational structure, lines of authority (chain of command), staff relationships, permanent committee arrangements, and lines of communication
question

Specialization
answer

Division of labor into small, specific tasks and the assignment of employees to do a single task
question

Departmentalization
answer

Grouping of jobs into working units usually called departments, units, groups, or divisions
question

Functional Departmentalization
answer

Grouping of jobs that perform similar functional activities, such as finance, manufacturing, marketing, and human resources Departments managed by expert in the work done Common in small organizations Strength: Weakness: decision making that involves more than one department is slow and requires great coordination Example: Green Mountain Coffee
question

Product Departmentalization
answer

Organizes jobs around the product of the firm Functional Activities (production, finance, marketing…) are located within each product department Strength: simplifies decision making and helps coordinate all activities related to a product or product group Weakness: duplicates functions and resources and emphasizes the product rather than achievement of the organization’s overall objectives Example: PepsiCo Inc. (Combination)
question

Geographical Departmentalization
answer

Groups jobs according to geographic location Common in multinational companies Strength: allows company to get closer to its customers and respond more quickly and efficiently to regional competitors Weakness: requires large administrative staff and control system to coordinate operations, and tasks are duplicated among the different regions Example: Coca-Cola, General Motors, Caterpillar, Diageo & PepsiCo Inc. (Combination)
question

Customer Departmentalization
answer

Arranges jobs around the needs of various types of customers Strength: allows the company to address the unique requirements of each group Weakness: does not focus on the organization as a whole ant therefore requires a large administrative staff to coordinate the operations of the various groups Example: Proctor & Gamble, Delta/British Airways Airlines (frequent flier/vacationer departments)
question

Delegation of Authority
answer

Giving tasks to employees and empowering them to make commitments, use resources, and take whatever actions are necessary to carry out those tasks
question

Responsibility
answer

Obligates employees to carry out assigned tasks satisfactorily and holds them accountable for the proper execution of their assigned work
question

Accountability
answer

Employees who accept an assignment and the authority to carry it out are answerable to a superior for the outcome
question

Degree of Centralization
answer

The extent to which authority is delegated throughout an organization determines its degree of centralization
question

Centralized Organizations
answer

Authority is concentrated at the top, very little decision-making authority is delegated to lower levels Vast amount of responsibility for carrying out daily and routine producers is delegated to even the lowest levels of the organization Common when the decisions to be made are risky and when low-level managers are not highly skilled in decision making Example: U.S. Army, IRS, Postal Service
question

Over-centralization
answer

May take longer for the organization as a whole to implement decisions and to respond to changes and problems on a regional scale
question

Decentralized Organization
answer

Decision-making authority is delegated as far down the chain of command as possible, lower level managers who interact with the external environment often develop a good understanding of it and thus are able to react quickly to changes Requires lower-level managers to have great decision-making skills Common when organization operates in a complex, unpredictable environment, businesses that face intense competition Strengths: Increased responsiveness and productivity, enhances creativity, key to getting better and bigger Trending in recent years Example: Johnson & Johnson, GE, IBM, Google, BikeNon-profits benefit
question

Spans of Management
answer

Number of subordinates who report to a superior Wide Span of Management: Narrow Span of Management: superiors and subordinates not in close proximity, manager has many responsibilities in addition to supervision, interactions between superiors and subordinates are frequent, problems are common Wide Span of Management: superiors and subordinates are located closet to each other, manager has few responsibilities other than supervision, level of interaction between superiors and subordinates is low, few problems arise, subordinates are highly competent, set of specific operation producers governs the activities of both parties
question

Tall Organization
answer

Many organizational layers Narrow Span of Management Weaknesses: Administrative costs are usually higher, slower communication Example: McDonald’s
question

Flat Organization
answer

Few organization layers Wide Span of Management Managers perform more administrative duties and spend more time supervisions/working with subordinates Trending: Many decentralized companies are moving toward flat(ness?) too, often eliminating middle management Examples: Avon, AT, Ford Motor Company
question

Line Structure
answer

Direct lines of authority that extend from the top manager to employees at the lowest level of the organization Simplest Structure Requires managers to possess wide range of knowledge/skills Strengths: clear chain of command, quick manager decisions Most common in small businesses
question

Line-and-Staff Structure
answer

Traditional line relationship between superiors and subordinates, and specialized managers (staff managers) are available to assist line managers Strengths: Line managers focus on their area of expertise in the operation of the business, staff managers provide advice and support to line departments on specialized matters (finance, engineering, human resources, law) Weaknesses: overstaffing, ambiguous lines of communication, employees frustrated with lack of authority to carry out certain decisions
question

Multidivisional Structure
answer

Organizes departments into larger groups (divisions) Strengths: permits delegation of decision-making, allows divisional/department managers to specialize, allow those closest to the action to make the decisions, better decisions made faster, tend to be more innovative, more likely to meet needs of particular customers Weaknesses: creates work duplication, more difficult to realize economies of scale that result from grouping functions together Example: Restructuring of PepsiCo
question

Matrix Structure (Project Management Structure)
answer

Sets up teams from different departments, thereby creating two or more intersecting lines of authority Superimposes project-based departments on the more traditional, function-based departments Project teams bring in specialists Employees are responsible to 2 managers: functional and project managers Usually temporary Trending Strengths: Flexibility, enhanced cooperation, creativity, enables the company to respond quickly to changes, specific attention to specific issues Weaknesses: Expensive, very complex, employees may be confused about priority authority Example: NASA was one of the first organizations to use Matrix Structure
question

Group
answer

2+ individuals who communicate with one another, share a common identity, and have a common goal Emphasize individual work products, individual accountability, and eve individual leadership Performance depends on individual members
question

Team
answer

Small group whose members have complementary skills; have a common purpose, goals, and approach ;and hold themselves mutually accountable. Share leadership roles, have both individual and mutual accountability, and create collective work products Performance is based on creating knowledge center and a competency to work together to accomplish a goal Virtual Teams Trending in the U.S. Team productivity peaks at about 5 members… All teams are group, not all groups are teams.
question

Types of Groups: Committees
answer

Permanent, formal group that does some specific task Example: Compensation/Finance Committee
question

Types of Groups: Task Forces
answer

Temporary group of employees responsible for bringing about a particular change Typically from all departments and levels in an organization
question

Types of Teams: Project Teams
answer

Run their operation, have total control of a specific work project, temporary Similar to task forces Membership from all across company hierarchy Product Development Teams: devise, design, implement new product (may include customers)
question

Types of Teams: Quality-Assurance Teams (Quality Circles)
answer

Small groups of workers brought together from throughout the organization to solve specific quality, productivity, or service problems
question

Typer of Teams: Self-directed Work Teams
answer

Group of employees responsible for an entire work process or segment that delivers a product to an internal or external customer Permit flexibility to change rapidly to meet competition or respond to customer needs *empowered or given authority to make and implement work decisions Design to give employees a feeling of ‘ownership’ of a whole job Example: 3M

Get instant access to
all materials

Become a Member