CHAPTER 8

When designing responsive organizations, what decisions do firms have to make?

- Decide the span of control - Choose between tall or flat structures - Decide between centralization versus decentralization

The reasons why companies decide to decentralize include:

- being more responsive to customer needs - adapting more rapidly to changes in the competitive environment

Important decisions to be made while designing an organization include:

- span of control - degree of centralization

When designing organizations, firms have to make decisions abt organizational issues such as:

1) centralization vs. decentralization 2) span f control 3) tall vs. flat organizational structures 4) departmentalization

Flat organizational structure

An organizational structure that has few layers of management and a broad span of control *can respond readily to customer demands bc lower-level employees have authority and responsibility for making decisions

Benchmarking

Comparing an organization's practices, processes, and products against the world's best.

Economies of scale

It's a result of business growth. The situation in which companies can reduce their production costs if they can purchase raw materials in bulk; the average cost of goods goes down as production levels increase.

Identify the four ways to structure an organization.

Line-and-staff organizations Line organizations Cross-functional self-managed teams Matrix-style organizations

Which is a true statement about the principles of organization?

Regardless of the business size the principles are similar.

Chain of command

The line of authority that moves from the top of a hierarchy to the lowest level. Ex. one manager cant keep track of thousands of employees, thats why the top manager needs many lowe-level managers to help.

Natworking

Using communications technology and other means to link organizations and allow them to work together on common objectives is referred to as

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 technologies change more quickly than ever before

When a company compares its practices, processes, and products against the world's best organization it is:v

benchmarking

A -------- organization structure maintains the decision-making authority at the top level of management.

centralized

An organization structure in which decision-making authority is maintained at the top level of management is called a(n) ______ organization.

centralized

Bureaucracy within management

companies set up rules and regulations so managers can have control over employees. The gov has nothing to do with it, only the business

An important decision to be made while designing a responsive organization is about the size of the span of ------

control

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

matrix

If an organization temporarily borrows its specialists from different functional areas to accomplish a common project, it is implementing what type of organization?

matrix organization

Self-managed

means that a team is empowered to make decisions without management approval.

Networking

the process of establishing and maintaining contacts with key managers in one's own organization and other organizations and using those contacts to weave strong relationships that serve as informal development systems.

There are 4 ways to structure an organization:

1) line organizations 2) line and staff organizations 3) matrix-style organizations 4) cross-functional self-managed teams *some of these models violate traditional management principles

What are the principles of management outlined by Fayol?

1) unit of command, each worker is to report to only one boss 2) hierarchy of authority, worker should know to whom they report 3) division of labor, functions are divided into areas of specialization 4) subordination of the individual interests to the general interest, workers need to be a coordinated team 5) authority 6) degree of centralization, decision-making power should vary by circumstances 7) clear communication channels, 8) order 9) equity 10) spirit of pride and loyalty

Cross functional self managed teams

Groups of employees from different departments who work together on a long-term basis Self-managed, empowered to make decisions w/o management approval

Span of control

The optimum number of subordinates a manager supervises or should supervise. *the trend today is to expand the span of control as org. adopt empowerment, reduce the # of middle managers, and hire more talented and better educated lowe-level employees

During the most recent economic crisis, Macy's department store 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.

Centralized authority occurs when decision making is done:

at the top level of management

Comparing an organization's practices, processes, and products against the world's best is called --------

benchmarking

Centralized authority

decision making is concentrated at the top level of management *has the advantage of providing strong global control *it limits its quick response to local or regional market changes and trends *more efficiency *Ex. Burger King

Core competencies

Those functions that the organization can do as well as or better than any other organization in the world

The rapidly evolving business environment requires the management of ------ in the organization to respond to it.

change

The rapidly evolving business environment requires the management of -------- in the organization to respond to it.

change

Because Nike is superior at designing and marketing athletic shoes, this is considered to be their:

core competency

he current trend in organizations is to ------ the span of control.

expand

A company is benchmarking when comparing its practices, processes, and products against only the best companies in its region.

false

______ organization structures respond to customer demands faster because its lower-level employees have authority and responsibility for making decisions.

flat

An advantage of a------ organization structure is that lower level employees have authority to respond more quickly to customer needs

flat or decentralized

Four ways to structure an organization include line, ----- and ------, matrix, and cross-functional teams.

line and staff

Line-and-staff organizations

responsible for directly achieving organizational goals, ad include production workers, distribution people, and arketing people Staff personnel, Employees who advise and assist line personnel in meeting their goals.

Matrix-style organizations

specialists from different parts of the organization are brought together to work on specific projects but still remain part of a line-and-staff structure. *costly and complex *can produce creative solutions to product development problems

Today's trend is to expand the span of control because:

the workforce is better educated at all levels organizations save by reducing the number of middle managers

Doug Rauch says that customer and employees are like two wings of a bird because:

you need them to fly, meaning that when your customers are happy, they enjoy shoppin which makes your employees' job easy

Regardless of the size of the organization, the principles of organizing include:

- a hierarchy of authority - deciding what work needs to be done - dividing up the tasks to be done

Line organization

it has direct two-way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with all people reporting to only one supervisor. *many small businesses are organized this way *follow all of Fayol's rules *have no specialists who provide managerial support

Decentralized authority

decision-making is delegated to lower-level managers and employees bc they're more familiar with local needs and wants than a headquarter could be *faster decision-making *less efficiency *more empowerment of workers

Departmentalization

divides organizations into separate units *traditional way to do it is by function *may save costs and improve efficiency *departments may not communicate well

Remaining ______ is the key to an organization's success in changing times.

flexible * Maintaining consistency is good unless change is required.