Management Chapter 10

Authority is distinguished by three characteristics

(1) Authority is vested in organizational positions, not people. (2) Authority is accepted by subordinates. (3) Authority flows down the vertical hierarchy.

Team Approach

Breaks down barriers across departments and improves coordination and cooperation. Team members know one another's problems and compromise rather than blindly pursue their own goals

Divisional Approach

By dividing employees and resources along divisional lines, the organization will be flexible and responsive to change because each unit is small and tuned in to its environment

Matrix approach

Combines aspects of both functional and divisional structures simultaneously in the same part of the organization. The matrix structure evolved as a way to improve horizontal coordination and information sharing.

Functional Approach

Grouping employees by common task permits economies of scale and efficient resource use.

Span of Management

The number of employees reporting to a supervisor; also called span of control

Decentralization

decision authority is pushed downward to lower organization levels

Permanent teams

groups of employees who are organized in a way similar to a formal department. Each team brings together employees from all functional areas focused on a specific task or project, such as parts supply and logistics for an automobile plant.

Flat structure

has a wide span, is horizontally dispersed, and has fewer hierarchical levels.

Tall structure

has an overall narrow span and more hierarchical levels.

Project manager

is a person who is responsible for coordinating the activities of several departments for the completion of a specific project.

Chain of command

is an unbroken line of authority that links all persons in an organization and shows who reports to whom. It is associated with two underlying principles.

Authority

is the formal and legitimate right of a manager to make decisions, issue orders, and allocate resources to achieve organizationally desired outcomes.

Delegation

is the process managers use to transfer authority and responsibility to positions below them in the hierarchy. Most organizations today encourage managers to delegate authority to the lowest possible level to provide maximum flexibility to meet customer needs and adapt to the environment.

Centralization

means that decision authority is located near the top of the organization

Unity of command

means that each employee is held accountable to only one supervisor.

Virtual network structure

means that the firm subcontracts most of its major functions to separate companies and coordinates their activities from a small headquarters organization

Accountability

means that the people with authority and responsibility are subject to reporting and justifying task outcomes to those above them in the chain of command.

Divisional structure

occurs when departments are grouped together based on similar organizational outputs. The divisional structure is sometimes called a product structure, program structure,or self-contained unit structure.

Scalar principle

refers to a clearly defined line of authority in the organization that includes all employees. Authority and responsibility for different tasks should be distinct. All persons in the organization should know to whom they report as well as the successive management levels all the way to the top.

Coordination

refers to the quality of collaboration across departments. Without coordination, a company's left hand will not act in concert with the right hand, causing problems and conflicts. Coordination is required regardless of whether the organization has a functional, divisional, or team structure

Work specialization

sometimes called division of labor, is the degree to which organizational tasks are subdivided into separate jobs.

Team-based structure

the entire organization is made up of horizontal teams that coordinate their work and work directly with customers to accomplish the organization's goals

Modular approach

the process by which a manufacturing company uses outside suppliers to provide entire chunks of a product, which are then assembled into a final product by a handful of workers

Departmentalization

The basis on which individuals are grouped into departments and departments into the total organization

Virtual Network Approach

The biggest advantages to a virtual network approach are flexibility and competitiveness on a global scale.

Matrix advantages/disadvantages

controversial because of the dual chain of command. However, the matrix can be highly effective in a complex, rapidly changing environment in which the organization needs to be flexible and adaptable. The conflict and frequent meetings generated by the matrix allow new issues to be raised and resolved. The matrix structure makes efficient use of human resources because specialists can be transferred from one division to another. The major problem is the confusion and frustration caused by the dual chain of command.

Organization structure

is defined as: (1) the set of formal tasks assigned to individuals and departments; (2) formal reporting relationships, including lines of authority, decision responsibility, number of hierarchical levels, and span of managers' control; and (3) the design of systems to ensure effective coordination of employees across departments

Organizing

is the deployment of organizational resources to achieve strategic goals. The deployment of resources is reflected in the organization's division of labor into specific departments and jobs, formal lines of authority, and mechanisms for coordinating diverse organization tasks.

Responsibility

is the duty to perform the task or activity as assigned. Typically, managers are assigned authority commensurate with responsibility. When managers have responsibility for task outcomes but little authority, the job is possible but difficult.

Functional structure

is the grouping of positions into departments based on similar skills, expertise, work activities, and resource use. A functional structure can be thought of as departmentalization by organizational resources, because each type of functional activity—accounting, human resources, engineering, and manufacturing—represents specific resources for performing the organization's task. People, facilities, and other resources representing a common function are grouped into a single department

Organizational chart

is the visual representation of an organization's structure.