Business Management Chapter 9

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advantages of departmentalization by product

- allows people to specialize in one area of expertise - makes its easier to asses performance - makes decision making faster

advantages of departmentalization by function

- allows work to be done by highly qualified specialists - lowers cost by reducing duplication - makes communication and coordination easier

disadvantages of departmentalization by function

- cross department coordination can be difficult - slower decision making

disadvantages of departmentalization by product

- duplication - coordination across different product departments

disadvantages of departmentalization by geographic

- duplication of resources - difficult to coordinate departments

disadvantages of departmentalization by customer

- duplication of resources - might please customers but hurt business

advantages of departmentalization by customer

- focuses on customer needs - allows companies to specialize products and service to customer needs

advantages of departmentalization by geographic

- helps companies respond to different markets - reduce cost by locating resources closer to customer

disadvantages of departmentalization by matrix

- high level of coordination - most employees will report to 2 bosses - complexity of ongoing projects

advantages of departmentalization by matrix

- more efficient with large complex task

staff authority

right to advise but not command

line authority

right to command immediate subordinates in the chain of command

authority

right to give commands, take actions, and make decisions to achieve organizational objectives

line function

an activity that contributes directly to creating or selling the companies products

organizational process

collection of activities that transforms inputs into outputs that customers value

delegation of authority

direct authority and responsibility to a subordinate to complete tasks for which the manager is normally responsible

staff function

does not contribute directly to creating/ selling the companies products but supports line activity

simple matrix

managers in different parts negotiate conflicts and resources directly

departmentalization

method of subdividing work and workers into separate units

departmentalization by matrix

organizational structure in which 2 or more forms of departmentalization are used together

departmentalization by geographic location

organizes work and workers in particular geographic areas

departmentalization by function

organizes work and workers into functional areas of expertise

departmentalization by customer

organizes work and workers into separate units based on the kind of customer

departmentalization by product

organizes work and workers into units based on a particular product or service

complex matrix

specialized matrix managers and departments are added to the organizational structure to help sort out conflicts and problems

organizational structure

vertical and horizontal configuration of departments, authority, and jobs within a company

chain of command

vertical line of authority that clarifies who reports to who throughout the organization

unity of command

workers should report to just one boss to prevent confusion and conflict


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