CH 8

Equity

A manager should treat employees and peers with respect and justice.

Esprit de corps

A spirit of pride and loyalty should be created among people in the firm.

Henri Fayols book was popularized in the united states under what title?

Administration industrielle et générale in english- General and Industrial Management.

Hierarchy of authority

All workers should know to whom they report. Managers should have the right to give orders and expect others to follow. (As we discussed in Chapter 7, this concept has changed over time, and empowerment is often more important now.)

Ways to departmentalize

By product By function By customer group By geographic location By process Some firms use a combination of departmentalization techniques to create hybrid forms. For example, a company could departmentalize by function, geographic location, and customer groups.

division of labor

Functions are to be divided into areas of specialization such as production, marketing, and finance. (This principle too is being modified, as you'll read later, and cross-functional teamwork is getting more emphasis.)

tall organizational structures

In the early 20th century, organizations grew even bigger, adding layer after layer of management to create

Weber's principles of organization resembled Fayol's. In addition, Weber emphasized:

Job descriptions. Written rules, decision guidelines, and detailed records. Consistent procedures, regulations, and policies. Staffing and promotion based on qualifications. Weber believed that large organizations demanded clearly established rules and guidelines to be followed precisely. In other words, he was in favor of bureaucracy. Although his principles made sense at the time, rules and procedures became so rigid in some companies that they grew counterproductive. Some organizations today still thrive on Weber's theories.4 United Parcel Service (UPS), for example, maintains strict written rules and decision guidelines. Those rules enable the firm to deliver packages quickly because employees don't have to pause to make decisions—procedures are clearly spelled out for them.

Authority

Managers have the right to give orders and the power to enforce obedience. Authority and responsibility are related: whenever authority is exercised, responsibility arises. (This principle is also being modified as managers empower employees.)

In a _ organization, project managers are in charge of teams made up of members from several departments.

Matrix specialists from different parts of the organization work together temporarily on specific projects, but still remain part of a line-and-staff structure. In other words, a project manager can borrow people from different departments to help design and market new product ideas.

Max Weber's book

The Theory of Social and Economic Organizations, like Fayol's, appeared in the United States in the late 1940s. Weber (pronounced Vay-ber), a German sociologist and economist, promoted the pyramid-shaped organizational structure that became popular in large firms

degree of centralization

The amount of decision-making power vested in top management should vary by circumstances. In a small organization, it's possible to centralize all decision-making power in the top manager. In a larger organization, however, some decision-making power, for both major and minor issues, should be delegated to lower-level managers and employees.

during the most recent economic crisis, macys switched to a decentralized structure by giving local managers more authority to buy price and promote merchandise. Why would they take such measures?

To merchandise appropriately for each area

During the era of mass production, organizational theorists emerge

Two influential thinkers were Henri Fayol and Max Weber.

Subordination of individual interests to the general interest.

Workers are to think of themselves as a coordinated team. The goals of the team are more important than the goals of individual workers. (This concept is still very much in use.) Have you heard this concept being applied to football and basketball teams? Did you see this principle at work in the latest Super Bowl?

The result of the increase in the rate of change in the business environment from causes such as natural disasters and global competition has been that companies must:

adapt to new techonologies change more quickly than ever before

Line personnel have the authority to issue orders and discipline employees, while staff personnel have the ability to ____ and influence.

advise

clear communication channels

all workers should be able to reach others in the firm quickly and easily

Line personnel

are responsible for directly achieving organizational goals, and include production workers, distribution people, and marketing personnel. *both are watched by line managers

An important reason why companies _ authority is to be more responsive to customer needs.

decentralize

order

materials and people should be placed and maintained in the proper location

the type of structure in a firm where there are several levels of managers each with a narrow span of control is called a:

tall organization

which of the following are considered to be drivers of the organizational change in the evolving business environment?

faster technological change pressure to preserve the natural environment more global competition

Which of the following exemplify line personnel in the line-and-staff organization?

production workers packaging personnel

innovations like the mass production of cars can create economies of scale. However, over time this benefit becomes less meaningful because:

other companies copy the process

centralized authority

pros Greater top-management control more efficiency simpler distribution system stronger brand/corporate image cons less responsiveness to customers less empowerment inter organizational conflict lower morale away from headquarters *occurs when decision making is concentrated at the top level of management.

principles proposed by weber and fayol that are still useful in today's organizations include

staffing and promotion based on qualifications written rules decision guidelines and records job descriptions

adjusting to changing markets is a critical _ function

managerial

decentralized authority

pros better adaptation to customer wants more empowerment of workers faster decision making higher morale cons less efficiency complex distribution system less top-management control weakened corporate image *occurs when decision making is delegated to lower-level managers and employees more familiar with local conditions than headquarters management could be. Macy's customers in California, for example, demand clothing styles different from what customers in Minnesota or Maine like. It makes sense to delegate to store managers in various cities the authority to buy, price, and promote merchandise appropriate for each area.

cross-functional self-managed teams

are groups of employees from different departments who work together on a long-term basis (as opposed to the temporary teams established in matrix-style organizations). Self-managed means that they are empowered to make decisions without management approval. The barriers among design, engineering, marketing, distribution, and other functions fall when interdepartmental teams are created. Sometimes the teams are interfirm; that is, the members come from two or more companies.

an organization structure in which decision making authority is delegated as far down the chain of command as possible is call an _ organization

decentralized

Staff employees _ and _ line managers in meeting their goals

advise, assist * Staff personnel advise and assist line personnel in meeting their goals, and include those in marketing research, legal advising, information technology, and human resource management. Many organizations benefit from expert staff advice on safety, legal issues, quality control, database management, motivation, and investing. Staff personnel strengthen the line positions and are like well-paid consultants on the organization's payroll.

In line-and-staff structures, _ managers provide advice and support to _ departments on specialized matters such as finance, engineering, HR, and the law.

staff, line

each worker is to report to one and only one boss is an example of which fayol principle?

unity of command *Each worker is to report to one, and only one, boss. The benefits of this principle are obvious. What happens if two different bosses give you two different assignments? Which one should you follow? To prevent such confusion, each person should report to only one manager. (Later we'll discuss an organizational plan that seems to violate this principle.)

Flat Organizational Structure

with fewer layers of management and a broad span of control (many people report to each manager). Flat structures can respond readily to customer demands because lower-level employees have authority and responsibility for making decisions, and managers can be spared some day-to-day tasks

Departmentalization

divides organizations into separate units. The traditional way to departmentalize is by function—such as design, production, marketing, and accounting. Departmentalization groups workers according to their skills, expertise, or resource use so that they can specialize and work together more effectively. By function cons and pros: cons Departments may not communicate well. For example, production may be so isolated from marketing that it does not get needed feedback from customers. Employees may identify with their department's goals rather than the organization's. The purchasing department may find a good value somewhere and buy a huge volume of goods. That makes purchasing look good, but the high cost of storing the goods hurts overall profitability. The company's response to external changes may be slow. People may not be trained to take different managerial responsibilities; rather, they tend to become narrow specialists. Department members may engage in groupthink (they think alike) and may need input from outside to become more creative. pros Employees can develop skills in depth and progress within a department as they master more skills. The company can achieve economies of scale by centralizing all the resources it needs and locate various experts in that area. Employees can coordinate work within the function, and top management can easily direct and control various departments' activities.

in economies of scale, a company buys raw materials in bulk so that the average cost of goods goes _ as the production levels increase

down

the idea that taking good care of _ leads to happy _ who in turn make employees happier is known as a virtuous cycle.

employees, customers

Span of control

describes the optimal number of subordinates a manager supervises or should supervise. What is the "right" span of control? At lower levels, where work is standardized, it's possible to implement a broad span of control (15 to 40 workers). For example, one supervisor can be responsible for 20 or more workers assembling computers or cleaning movie theaters. The appropriate span gradually narrows at higher levels of the organization, because work becomes less standardized and managers need more face-to-face communication. The trend today is to expand the span of control as organizations adopt empowerment, reduce the number of middle managers, and hire more talented and better educated lower-level employees. Information technology also allows managers to handle more information, so the span can be broader still.

an organization sets up rules and regulations to give its managers control over employees. This type of organization managed by rules considered inefficient due to the levels of control and is known as a:

dictatorship