Chapter #10 MAN-6726

vertical growth

An increase in the length of the organization's hierarchical chain of command

tall organization

An organization characterized by many hierarchical levels and a narrow span of control.

simple structure

An organizational form whereby each employee often performs multiple tasks, and the owner/manager is involved in all aspects of the business

horizontal structure

An organizational structure with fewer hierarchies designed to improve efficiency by reducing layers in the bureaucracy

flat organization

An organizational structure with relatively few hierarchical levels and a wide span of control

product divisional structure disadvantages

Because product divisional firms generally have multiple departments performing the same function, HR costs tend to be higher Top managers often struggle to ensure consistency across the organization because product managers focus on different product areas, they tend to compete for resources instead of working together in the best interest of the company

disadvantages of functional structure

Because the business is organized around functions rather than around products or geographic regions, pinpointing the responsibility for profits or losses can be difficult. A functional structure is also prone to inter-departmental conflict because it fosters a narrow perspective of the organization among its members

matrix structure disadvantages

First, because coordination across functional areas and projects is essential, individuals spend considerable time in meetings exchanging information, ultimately growing the bureaucracy and increasing personnel costs matrix structures can create conflicts over budgets, resources, and personnel, both between project and functional managers and among project managers reporting to two managers violates a fundamental premise of management and can create role conflict when managers have different priorities

Organizational structure

The formal means by which work is coordinated in an organization An organization's structure dictates reporting relationships and defines where and how the firm's work is done

span of control

The number of employees reporting directly to a given manager

Business-to-consumer (B2C) - also known as e-tailing

The segment of electronic commerce whereby businesses utilize the Internet to solicit transactions from consumers

Business-to-business (B2B)

The segment of electronic commerce whereby businesses utilize the Internet to solicit transactions from each other

Business-to-government (B2G)

The segment of electronic commerce whereby businesses utilize the Internet to solicit transactions from government entities.

Consumer-to-business (C2B)

The segment of electronic commerce whereby consumers utilize the Internet to solicit transactions from businesses

Consumer-to-consumer (C2C)

The segment of electronic commerce whereby consumers utilize the Internet to solicit transactions from each other.

Clicks and bricks

The simultaneous application of both electronic ("clicks") and traditional ("bricks") forms of commerce

matrix structure advantages

by combining the functional and product divisional structures, a firm can enjoy the advantages of both forms a matrix organization is flexible because employees may be transferred easily between projects with different time frames a matrix permits lower-level functional em-ployees to become heavily involved in projects and gain valuable experience top management in a matrix organization is freed from day-to-day involvement in the opera-tions of the enterprise to focus on strategic leadership.

product divisional structure

divides the organization's activi-ties into self-contained entities, each responsible for producing, distributing, and selling products. the structure emphasizes product lines, resulting in a clear focus on each product category and a greater orientation toward customer service. Pinpointing the responsi-bility for profits or losses is also easier because each product division becomes a profit center

functional structure

each subunit of the organization engages in firm-wide activities related to a function, such as marketing, human resources, finance, or pro-duction Managers are grouped according to their expertise and the resources they use in their jobs. A functional structure can improve specialization and productivity by grouping people who perform similar tasks

four types of structural forms

functional structure multidivisional structure which includes both product divisional structure and geographic divisional structure matrix structure

disadvantages of a geographic divisional structure

more functional personnel are required because each region has its functional departments. Coordination of company-wide functions can also be difficult, and area managers may emphasize their geographic regions rather than a company-wide perspective.

Geographic divisional structure advantages

products and services may be tailored more effectively to the legal, social, technical, or climatic differences of specific regions. producing or distributing products in different lo-cations allows a firm to leverage cost and other advantages associated with each geographical region

horizontal growth

refers to an increase in the breadth of an organization's structure

The appropriate structure for a firm depends on many factors, including:

1.Stage in the organizational life cycle. 2.Level of corporate involvement in business unit operations. 3.Compatibility of the existing structure with the firm- and business-level strategies. 4.The number of hierarchical levels in the organization. 5.The extent to which the structure permits the appropriate grouping of activities. 6.The extent to which the structure promotes effective coordination across groups. 7.The extent to which the structure allows for appropriate centralization or decentralization of authority.

profit center

A well-defined organizational unit headed by a manager accountable for its revenues and expenditures

Geographic divisional structure

A form of organizational structure in which jobs and activities are grouped based on geographic location

matrix structure

A form of organizational structure that combines the functional and product divisional structures. The matrix structure is inappropriate for many organizations, especially cost leaders

downsizing

A means of organizational restructuring that eliminates part or all of one or more hierarchical levels from the organization and pushes decision-making downward in the organization.

multidivisional structure

A structural form with two or more divisions based on products (a product divisional structure) or geography (a geographic divisional structure); also called an M-form