Principles of Management CHapter 10-13

The deployment of organizational resources to achieve strategic goals.
Organization Structure
Refers to the formal tasks assigned to individuals and departments, the formal reporting relationships including lines of authority, decision responsibility, number of levels, and span of control.
Organization Chart
The visual representation of an organization’s structure.
Work Specialization
Organizational tasks are subdivided into separate jobs, the firm is more efficient because every employee performs small, well defined tasks.
Chain of Command
The unbroken line of authority that links every person and shows who reports to who.
Unity of Command
Each employee should have one supervisor.
The formal and legitimate right of a manager to make decisions.
1) Rests in a position, not a person
2) Flows down the vertical structure
3) Must be accepted by subordinates
The duty to perform what you have been assigned.
Brings authority and responsibility into line.
The transfer of authority to someone below them in the hierarchy.
Line Authority
Managers have the formal authority to manage their immediate subordinates
Staff Authority
The right to advise, recommend, and counsel a staff specialist area of expertise.
Span of Management (Capital)
Number of subordinates who directly report to a supervisor.
1) Work is stable and routine
2) Subordinates perform similar tasks
3) Subordinates are in one location
4) Number of managerial support systems
5) Amount of time required for more non supervision
6) Manger’s preferences
Tall/Flat Structure
The more narrow the span; the larger the structure, the wider the span the flatter the structure.
The power of decision making is retained at the top.
Power is delegated throughout the organization.
Formalized Structure
Many rules and regulations.
Unformalized Structure
Not many rulers and regulations.
The basis or grouping of individuals into departments and departments into the total organization.
Vertical Function Approach
Results in functional structure
-positions are grouped into departments based on similar skills, expertise, work activists, or research use
pros-Efficiency, specialization, and centralization
cons-Poor communication, poor coordination, slow response to change
Divisional Approach/Structure
Departments are grouped together on the basis of product, customers, or geographical areas
-grouped based on their output
pros-Flexibility, responsiveness to change, high concern for customers needs, better coordination between functional departments
cons-Coordination between divisions may be poor, costly, loss of efficiency, and a lack of specialization
Matrix Approach/Structure
Both structural and divisional structure occur simultaneously in the same part of the organization
-violates the unity of command theory because employees report to both functional and divisional managers
pros-very effective in dynamic enviroments
Team Approach/Structure
Most widely used structure today
Cross Functional Team
Employees from the various functional areas meet as a team to solve problems.
Permanent Teams
Formal departments because power is given to a team to make decisions
Virtual Network Approach
-Strategic alliance or partnership with other firms
Modular Approach
Independent firms produce parts of product offsite and then parts are brought to the firm to assemble the product.
Task Force
A temporary term that solves problems cross-functionally
Product Manager
Coordinates the activities of several departments for the completion of a project
Affects whether a firm is mechanistic or organic
Centralized firm/formalized
Not formalized/centralized
Human Resources Management
Refers to the design an application or formal system in an organization to ensure the effective and efficient source of human talent to accomplish an organization’s goals
Human Capital
Economic value of the combined knowledge, experience, skills, and capabilities of employees.
Job Description
Specifies the duties and responsibilities of the job.
Job Specification
Specifies the skills needed.
Organizational Change
The adoption of a new idea or behavior by an organization
Disruptive Innovation
Innovations in products, services, or processes that radically change an industry’s rules of the game for producers and consumers.
Ambidextrous Approach
Incorporating structures and processes that are appropriate for both
the creative impulse and for the systematic implementation of innovations.
Product Change
Change in the organization’s product or service outputs
Idea Incubator
Provides safe harbor where ideas from employees throughout the company can be developed without interference from company bureaucracy or politics.

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