chapter 8 business

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According to the text the key to success for organizations is
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According to the text the key to success for organizations is remaining flexible and adapting to the changing times. Often that means going back to basic organizational principles.
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describe division of labor
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Division of labor refers to dividing up tasks among workers
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describe job specialization
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Job specialization is dividing tasks into smaller jobs
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often being flexible enough to adapt to changing times means
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going back to basic organizational principles and rebuilding the firm on a sound foundation
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one of the first steps is to — your business
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organize
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organizing or structuring begins with?
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determining what work needs to be done (mowing, edging, trimming) and then dividing up the tasks.
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the process of setting up individual departments to do specialized tasks is called
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departmentalization
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name some departments a company many have
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production (mowing) marketing accounting and maintenance.
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starting an organization consists of
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a. devising a division of labor b. setting up teams or departments to do specific tasks c. assigning responsibility and authority to people d. allocating resources e. assigning specific tasks f. establishing procedures for accomplishing organizational objectives
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what does an organization chart show
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An organization chart shows relationships among people: who is accountable for the completion of specific work and who reports to whom.
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what has created so much change in organizations
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The change in organizations is due to the changing business environment – more global competition, a declining economy, faster technological change, and pressure to do more about the environment. Consumer expectations have also changed, and consumers expect the highest quality products and fast, friendly service at a reasonable cost.
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many organizations in the past were designed more to
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facilitate management than to please the costumes.
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mass production
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methods for efficiently producing large quantities of goods
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during the era of mass production, organization theorists emerged name two influential thinkers whose principles are still being used in businesses throughout the world
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henri fayol and max weber
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name a booked the Henri Fayol published in 1919 and in 1949 it was popularized in the US under what title
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Administration industrielle et generale In US General and Industrial Management
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name 10 of Fayols principles of organization
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Unity of command Hierarchy of authority Division of labor Subordination of individual interests to the general interest Authority Degree of centralization Clear communication channels Order Equity Esprit de corps
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Unity of command
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reporting to only one boss
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Hierarchy of authority –
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workers should know to whom they report. (Managers should have the right to give orders and expect others to follow(changed over time empowerment is often more important now))
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Division of labor –
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functions are divided into areas of specialization (such as production, marketing, and finance has changed cross functional teamwork is getting more emphasis)
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Subordination of individual interests to the general interest –
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team work (concept is still very much used)
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Authority –
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managers have the right to give orders and power to enforce obedience (being modified as managers are beginning to empower employees)
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Degree of centralization –
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The amount of decision making power given to top management should vary by circumstances.
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Clear communication channels –
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all workers should be able to reach others in the firm quickly and easily
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Order –
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people and materials should be in the proper location
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Equity –
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managers should treat employees with respect and justice
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Esprit de corps –
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a spirit of pride and loyalty should be created
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the process of rule making often led to
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The process of rule making often led to rigid organizations that didn’t always respond quickly to consumer requests
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what was the title of max webers book
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the theory of social and economic organization it appeared int eh US in the late 40’s
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Max Weber was a
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German sociologist and economist, he promoted the pyramid-shaped organization structure that became popular in large firms
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Identify four characteristics of Max Webers Bureaucracy
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a. Job descriptions b. Written rules, decision guidelines and detailed records c. Consistent procedures, regulations and policies d. Staffing and promotions based on qualifications
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how do workers today differ from those during the time that Weber was writing and how did that affect management
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Workers during Weber’s time were much less educated and trained than today’s workers. Weber felt that a firm would do well if employees would do what managers told them to do. The less decision making employees had to do, the better.
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In a company with many layer of management what is the process for an employee mto introduce a work change?
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In a company with many layers of management, if employees want to introduce work changes, they ask a supervisor, who asks a manager, who asks a manager at the next level up, and so on. Eventually a decision is made and passed down from manager to manager until it reaches the employee. Decisions can take weeks or months to be made.
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What did Weber mean by the term “bureaucrat”
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Weber used the term bureaucrat to describe a middle manager whose function it was to implement top management’s orders.
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Name an organization today that still thrives on Weber’s theories
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United Parcel Service (UPS)
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When employees have to ask their manager for permission to make a change,
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the process may take so long that customers become annoyed. This can happen in both large and small organizations. Since customers want efficient, quick service, slow service is not acceptable.
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empowerment works only when
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employees are given the proper training and resources to respond
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How are companies reorganizing to make customers happy
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To make customers happy, organizations are giving employees more power to make decisions on their own and to please the customer no matter what.
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name two companies who have reorganized giving empowerment to employees
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Home Depot and Nordstrom ( Nordstrom employees can accept a return from a customer without managerial approval even if the item was not originally sold at that store)
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what are the advantages of centralized authority
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Greater management control More efficiency Simpler distribution system Stronger brand/corporate image
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what are the disadvantages of centralized authority
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Less responsiveness to customers Less empowerment Interorganizational conflict Lower morale away from headquarters
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What are the advantages of decentralized authority
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Better adaptation go customer wants More empowerment of workers Faster decision making Higher morale
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what are the disadvantages of decentralized authority
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Less efficiency Complex distribution system Less top-management control Weakened corporate image
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when designing responsive organizations firms have to make decisions about several organizational issues:
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centralization versus decentralization span of control tall versus flat organization structures departmentalization
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what retailing giant has a very centralized form of management
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Target it is so top down that the CEO interviews candidates for the top 600 positions
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McDonalds believes
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the purchasing promotion and other such decisions are best handled centrally.
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companies are moving toward catering to what
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companies are moving toward catering to local markets
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what two retail stores are implementing decentralized authority
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JcPenny and Manys also Home depot and lowes
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why does span of control narrow at higher levels of organization
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At levels where work is standardized, span of control can be broad. The appropriate span gradually narrows at higher levels of the organization because work becomes less standardized and managers need more face-to-face communication.
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what is the trend in todays organizations regarding span of control
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The trend is to expand the span of control by reducing the number of middle managers and hiring more educated and talented lower level employees.
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Span of control in tall organizational structures
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In a tall organization there are many levels of management, and span of control is small. (few people reported to each manager)
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Span of control in flat organizational structures
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In a flat organization, there are fewer layers of management, and the span of control gets broader. (many people report to each manager)
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The appropriate span of control gradually
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narrows at higher levels of the organization
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why does The appropriate span of control gradually narrows at higher levels of the organization
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because work becomes less standardized and managers need more face to face communication
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flat structures can respond readily to customers demands because
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lower-level employees have authority and responsibility for making decisions and mangers can be spared some day to day tasks
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what are the advantages of the traditional functional structure
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a. Skills can be developed in depth and employees can progress as skills are developed. b. the company can achieve economies of scale by centralizing all the resources it needs and locate various experts in that area c. Employees can coordinate work within the function, and top management can easily direct and control various departments’ activities
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what are the disadvantages of the traditional functional structure
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a. Lack of communication among departments. b. Employees identify with the department and not with the corporation as a whole. c. Response to external change is slow. d. people may not be trained to take different managerial responsibilities rather they tend to become narrow specialists . e. People in the same department tend to think alike – groupthink.
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what are five methods of grouping, or departmentalizing, workers
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a. Product b. Function c. Customer group d. Geographic location e. Process
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groupthink
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People in the same department tend to think alike
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five methods of grouping, or departmentalizing workers are
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product function customer group geographic location
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The decision about which way to departmentalize depends on
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the nature of the product and the customers served.
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such product focused departmentalization usually results in
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good customer relations
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A hybrid form of departmentalization is being used when
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companies use a combination of departmentalization techniques.
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Four organizational structures are:
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a. Line organizations b. Line and staff organizations c. Matrix-style organizations d. Cross-functional self-managed teams
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In a large business, a line organization may have the disadvantages of
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a. being too inflexible b. having too few specialists c. having long lines of communication d. being unable to handle complex decisions necessary in a large organization.
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a line organizaiton does not have
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any specialists who provide managerial support
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name four departments line organizations do not have
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legal department ‘accounting department human resources department information technology department
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Line organizations follow all of whos traditional management rules
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Fayols
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Line managers can issue
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orders enforce discipline and adjust the organization as conditions change
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line personnel include
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production workers
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staff personnel include
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marketing research legal advising information technology human resource management
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what is the difference between line and staff personnel
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The difference between line and staff personnel is authority. Line personnel have formal authority to make policy decisions. Staff personnel have the authority to advise the line personnel and make suggestions, but they can’t make policy changes themselves.
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In a matrix system a product manager can
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borrow people from different departments to help design and market new product ideas.
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matrix system is important in industries where competition is stiff, and the life cycle of new ideas is short, and where the emphasis is on
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new product development, creativity, special projects, rapid communication, and interdepartmental teamwork.
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staff personnel strengthen the
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line positions and are like well-paid consultants on the organization’s payrol
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Many organization benefit form expert staff advice on
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safety legal issues quality control database management motivation investing
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what is the most important difference between line and staff personnel
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authority
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Line personnel have formal authority to
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make policy decisions
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Staff personnel have the authority to
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advise the line personnel and make suggestions, but they can’t make policy changes themselves
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todays economy is dominated by
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high growth industries where competition is stiff and the life cycle of new ideas is short
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name so high growth industries
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telecommunications nanotechnology robotics biotechnology aerospace
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The advantages of a matrix structure are
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a. Flexibility in assigning people to projects. b. Encourages cooperation among departments. c. Can produce creative solutions to problems. d. Allows for efficient use of resources.
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disadvantages of a matrix structure are
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a. Costly and complex. b. Can cause confusion among employees as to where their loyalty belongs. c. Requires good interpersonal skills and cooperative managers and employees. d. Temporary solution to long term problem.
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a potential problem with the teams created by matrix management is
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that the project teams are not permanent. After a problem is solved or a product developed, the team breaks up, so there is little opportunity for cross-functional training.
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An answer to the disadvantage of the temporary teams created by matrix management is to
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develop permanent teams and to empower them to work closely with suppliers, customers, and others to quickly and efficiently bring out new, high-quality products while giving great service.
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describe the characteristics of cross-functional teams
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Cross- functional teams consist of groups of employees from different departments who work together on a long term basis. These teams are empowered to make decisions without having to seek the approval of management. Barriers between functions fall when these interdepartmental teams are created.
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why should cross functional teams include customers, suppliers, and distributors.
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When cross functional teams include customers, suppliers and distributors it goes beyond the boundaries of the organization, and market information can be shared.
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self managed means
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that they are empowered to make decisions without management approval.
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sometimes the teams are inter firm that is
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the members come form two or more companies
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when suppliers and distributors are in other countries cross functional teams may
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share market information across national boundaries
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what is meant by the concept of transparency
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Transparency occurs when a company is so open to other companies that electronic information is shared as if the companies were one company.
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how have the networking, real time, and the concept of transparency changed they way information is shared between organizations
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Organizations are so closely linked via networking that each organization knows what the others are doing, in real time. Since data is so readily available to organizational partners, companies are so open to one another that the solid walls between them have become transparent. Because of this integration, two companies can now work together so closely that they operate as two departments within one company.
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most organizations are no longer
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self-sufficient or self-contained
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if Most organizations are no longer self-sufficient or self-contained what are they a part of
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Many modern organizations are part of a vast network of global businesses.
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An organizational chart showing what people do within any one organization may not be complete because
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the company is actually part of a larger system of firms.
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what is the result of those changes on organizational design and structure
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Organizational structures tend to be flexible and changing. Experts from one company may work for one company one year, and another the next year. Organizations deal with each other on a temporary basis and the ties between organizations are no longer permanent. These are often called virtual corporations because they are made up of replaceable firms or individuals that join the network and leave it as needed.
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virtual corporations
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they are made up of replaceable firms or individuals that join the network and leave it as needed.
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How does benchmarking lead to outsourcing, and ultimately to a firm’s core competencies
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Benchmarking demands that organizations compare each function against the best in the world. If an organization can’t do as well as the best in a particular area, it often will try to outsource the function to an organization that is the best. Outsourcing is assigning various functions to outside organizations. When a firm has completed the outsourcing process, the remaining functions are the firm’s core competencies, which are functions that the organization can do as well as, or better than, any other organization in the world.
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do networked organization structures tend to be flexible
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yes
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when a firm has completed its outsourcing process the remain functions are its
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core competences
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why is introducing change in an organization difficult
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Introducing change in an organization is difficult because managers and employees may have a tendency to “get stuck” in their old ways, and resist the efforts to change.
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how are companies using the internet to help adapt to changes
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The Internet has created new opportunities to ask customers questions and provide them with information. Companies are also training older employees to be more tech savvy to become familiar with social networking sites such as Facebook and Twitter as well as other applications.
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Companies are coordinating the efforts of traditional departments with
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their Internet staff to create easy-to-manage interactions.
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are Companies also training older employees to be more tech savvy
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yes
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once you have formed and organization you must
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be prepared to adapt the structure to changes in the market
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in adapting to change employees have a tendency to say
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that’s the way we’ve always done things. If it isn’t broken, don’t fix it
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what is one of the hardest challenges facing any manager
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introducing change is thus one of the hardest challeneges facing any manager
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to empower employees firms often must
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reorganize dramatically to make front line workers their most important people
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with inverted organization the management layers are few and the managers job is
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to assist and support front line people not boss them around
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illustrate and describe an inverted organization
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An inverted organization has contact people at the top and the chief executive officer at the bottom. There are few layers of management. Draw here
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how does the inverted organization support front line personnel
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Companies based upon an inverted organization structure support front-line personnel with internal and external databases, advance communication systems and professional assistance.
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how does (inverted organization) this change the requirements for front-line personnel
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means that front line personnel have to be better educated, better trained and better paid than in the past.
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how is the culture of an organization reflected
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The culture of an organization is reflected in stories, traditions, and myths
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describe the kind of organizational culture that the best organizations have..
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The best organizations have cultures that emphasize service to others, especially customers. The atmosphere is one of friendly, concerned, caring people who enjoy working together to provide a good product at a reasonable price. Those companies have less need for close supervision of employees, and fewer policy manuals, organization charts and formal rules, procedures and controls.
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the key to productive culture
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The key to a productive culture is mutual trust.
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These companies stress high moral and ethical values such
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as honesty, reliability, fairness, environmental protection, and social involvement.
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in the past manager controlled
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information and that gave them power
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in more progressive organizations today everyone shares
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information, often through an elaborate database system and among firms as well as within them
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can a organizational culture can also be negative
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yes
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what are two organizational systems that all companies have
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formal organization informal organization
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what is a drawback of the formal organization
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The drawback of the formal organization is that it is often too slow and bureaucratic to enable an organization to adapt quickly.
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what is a benefit of the formal organization
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The benefit of a formal organization is that it provides helpful guidelines and lines of authority to follow in routine situations.
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what is the drawback of the informal organization
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The drawback of the informal organization is that it is often too unstructured and emotional to allow careful, reasoned decision-making on critical matters.
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what is the benefit of the informal organization
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the informal organization is very effective in generating creative solutions to short-term problems and providing a feeling of camaraderie and teamwork among employees.
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describe the importance of the “grapevine” in the organization
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The grapevine is the nerve center of the informal organization. It is the system through which unofficial information flows between employees and managers.
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Key people in the grapevine have
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considerable influence.
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how have managers’ views toward the informal organization changed in the new more open organizations
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In more traditional organizations, managers and employees were often at odds, and the informal structure often hindered management. In the new, more open organizations, managers and employees work together and the informal structure is viewed as an asset that promotes harmony among workers and establishes a positive corporate culture.
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can an organization operate effectively without both types of organiztion
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no
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in any organization it’s wise to learn quickly
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who is important in the informal organization
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the informal organization’s nerve center is
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the grapevine
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the informal organization is an invaluable what
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managerial asset that can promote harmony among workers and establish the corporate culture
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as effective as the informal organization may be in creating group cooperation it can still be
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equally powerful in resisting management directives.
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what is the key to managerial success
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learning to create the right corporate culture and work within the informal organization

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