Chapter 7 Management Organization

(The Horizontal Structure) Functional organizations foster efficient experts

1. In a functional organization, jobs are specialized and grouped according to business functions and the skills they require.

(Organizational Integration) Coordination requires communication

1. Reducing the need for information 2. Increasing information processing capability 3. Managing high information-processing demands

(Organizational Integration) Standardization coordinates work through rules and routines

1. Standardization is establishing common rules and procedures that apply uniformly to everyone. 2. Formalization involves the presence of rules and regulations about how employees should interact.

(The Horizontal Structure) Matrix organizations try to be the best of both worlds

1. The matrix organization is an organization composed of dual reporting relationships in which some managers report to two superiors-a functional manager, and a product manager. (Exhibit 7.7) 2. It is a hybrid form of organization in which functional and divisional forms overlap. 3. Advantages of the Matrix design 4. Disadvantages of the Matrix design a. Many of the disadvantages stem from the matrix's inherent violation of the unity- of-command principle that states a person should have only one boss. 5. Matrix Survival Skills 6. The Matrix Form Today a. The matrix form has regained some of its earlier popularity due to cost and speed pressures. b. The key to managing today's matrix is the realization that the matrix is a process.

(Organizational Integration) Plans set a common direction

1. Under coordination by plan, interdependent units are required to meet deadlines and objectives that contribute to a common goal. 2. It does not require the same high degree of stability and routinization required for coordination by standardization.

Network organization

A collection of independent, mostly single-function firms that collaborate on a good or service.

Mechanistic organization

A form of organization that seeks to maximize internal efficiency.

Strategic alliance

A formal relationship created among independent organizations with the purpose of joint pursuit of mutual goals.

Which of the following provides the best example of legitimate power?

A supervisor tells a subordinate to wear safety goggles.

Which of the following type of leader is most likely to motivate people to transcend their personal interests for the sake of the organization?

A transformational leader

An advantage of managing a diverse workforce is

An advantage of managing a diverse workforce is

Matrix organization

An organization composed of dual reporting relationships in which some managers report to two superiors-a functional manager and a divisional manager.

centralized organization

An organization in which high-level executives make most decisions and pass them down to lower levels for implementation.

Decentralized organization

An organization in which lower-level managers make important decisions.

High-involvement organization

An organization in which top management ensures that there is consensus about the direction in which the business is heading.

Monolithic organization

An organization that has a low degree of structural integration—employing few women, minorities, or other groups that differ from the majority—and thus has a homogeneous employee population.

Pluralistic organization

An organization that has a more diverse employee population and works to involve employees from different gender, racial, or cultural backgrounds.

Multicultural organization

An organization that values cultural diversity and seeks to utilize and encourage it.

Organic structure

An organizational form that emphasizes flexibility.

What are the key follower characteristics in path-goal theory that determine the appropriateness of various leadership styles?

Authoritarianism Ability Locus of control

When Alexandra arrived at work late for the third time in one month, causing her to be late for a staff meeting, Pietro, her manager, called her into his office. "You must get to work on time, Alexandra. One more time, and I will have to start reducing the amount of that bonus we had discussed." What type of power is Pietro using?

Coercive

Which type of power gives managers the ability to punish others?

Coercive

Sexual harassment

Conduct of a sexual nature that has negative consequences for employment.

Functional organization

Departmentalization around specialized activities such as production, marketing, and human resources.

Divisional organization

Departmentalization that groups units around products, customers, or geographic regions.

Which of the four leadership behaviors in path-goal theory is a form of task performance-oriented behavior?

Directive leadership

Standardization

Establishing common routines and procedures that apply uniformly to everyone.

True or false: Laissez-faire leadership assumes managers make most decisions.

False

Inpatriates

Foreign nationals transferred to work at the parent company.

Mentors

Higher-level managers who help people meet top management and the norms and values of the organization.

Host-country nationals

Individuals from the country where an overseas subsidiary is located.

Power is defined as the capacity to ______ other people despite resistance.

Influence

Which of the following is an advantage of the product division form of departmentalization?

Information needs are managed more easily.

______ means that units that work on different tasks are put together so that work is coordinated into an overall product.

Integration

Coordination by plan

Interdependent units create deadlines and objectives that contribute to a common goal.

______ leadership combines strong professional will and personal humility.

Level 5

Managing diversity and inclusion

Managing a diverse workforce by recognizing the characteristics common to groups while dealing with people as individuals and supporting, nurturing and using their differences to the organization's advantage.

Expatriates

Parent-company nationals who are sent to work at a foreign subsidiary.

______ is defined as an employee's self-confidence and self-respect.

Psychological maturity

Pseudotransformational leaders are most likely to do which of the following?

Put their own self-interests ahead of their followers.

According to French and Raven, which of the following is one of the five sources of managerial power?

Reward

Leaders who give purpose and meaning to an organization by anticipating and envisioning a viable future are known as ____________ leaders.

Strategic

Which type of leadership behavior gives purpose and meaning to organizations?

Strategic

Departmentalization

Subdividing an organization into smaller subunits.

______ leadership is behavior that provides guidance, support, and corrective feedback.

Supervisory

Large batch

Technologies that produce goods and services in high volume.

Small batch

Technologies that produce goods and services in low volume.

Responsibility

The assignment of a task that an employee is supposed to carry out.

Delegation

The assignment of new or additional responsibilities to a subordinate.

managing diversity and inclusion

The concept of managing diversity and inclusion involves managing a culturally diverse workforce by recognizing the characteristics common to specific groups while also dealing with people as individuals and supporting, nurturing, and using their differences to the organization's advantage.

Accountability

The expectation that employees will perform a job, take corrective action when necessary, and report upward on the status and quality of their performance.

Authority

The legitimate right to make decisions and to tell other people what to do.

In the situational theory, Hersey and Blanchard identified which of the following as the key situational factor?

The maturity of the followers

Layers of Hierarchy

The number of layers such as frontline employees, team leaders, supervisors, managers, and leaders in the organization.

Span of control

The number of subordinates who report directly to an executive or supervisor.

Which of the following statements is generally true about managers who have expert power?

They have acquired special knowledge, skills, and expertise in a certain area, but the nature of their power could vary depending on their level.

True or false: Departmentalization helps an organization deal with increasing complexity in its operation.

True

True or false: Situational leadership means that leaders vary their behavior from situation to situation.

True

True or false: Under the functional form of departmentalization, managers become specialists rather than generalists.

True

Line departments

Units that deal directly with the organization's primary goods and services.

Staff departments

Units that support line departments.

The leadership model that emphasizes how leaders go about making decisions is called the ______ model.

Vroom

The behavioral approach to leadership attempts to identify which of the following?

What good leaders do?

A vision expresses the leader's ______ for the organization.

ambitions

"Ten years ago, our organization did not recognize, much less address, the cultural aspects of integration. However, we corrected that failure and, today, we are truly a multicultural organization that values diversity. In fact, we __________," said Lee Michaels, manager of human resources.

are marked by an absence of prejudice and discrimination

A style in which the leader is true to himself or herself is called ______ leadership.

authentic

A leader who exhibits a(n) ______ style will make decisions alone, without participation by the group.

autocratic

When employees believe that their differences are not merely tolerated but valued, they are likely to

become more committed.

The focus of behavioral leadership is on how leaders ______.

behave

Group maintenance is one of the aspects of the ______ approach to leadership.

behavioral

Leaders who are dominant, self-confident, and able to communicate their vision to subordinates are ______ leaders.

charismatic

The excitement, dominance, and self-confidence of ______ leaders contribute to their ability to inspire followers to enthusiastically support their vision.

charismatic

The primary intent of affirmative action is to

correct historical discriminations against minorities.

Building an organization around groups of customers makes use of ______ structure.

customer division

In ______ leadership, input is solicited by leaders from others.

democratic

As tasks of organizations become increasingly complex, the organization inevitably must be ______ into smaller units.

departmentalized

Organization Chart

depicts the arrangement of positions in a company.

Leaders at different levels in different departments acquire special knowledge, skills, and expertise, which gives them ______ power.

expert

The two key situational factors in path-goal theory are personal characteristics of ______ and the environmental pressures and demands they must cope with.

followers

Actions taken to ensure the satisfaction of group members are ______ behaviors.

group maintenance

The participative leadership style is most appropriate when a follower has a(n) ____________ locus of control.

internal

Hersey and Blanchard's situational theory states that before deciding whether task performance or maintenance behaviors are more important, managers should consider an employee's ______.

job maturity

The absence of managerial decision making is known as ______ leadership.

laissez-faire

When a leader has the right or authority to tell others what to do, the leader has ______ power.

legitimate

A combination of strong professional will and humility that builds enduring greatness describes ______ leadership.

level 5

Instead of setting the vision for a firm, ______ are responsible for duties such as staffing, budgeting, and monitoring results.

managers

A ______ organization is composed of dual reporting relationships in which some managers report to two superiors: a functional manager and a divisional manager.

matrix

Job ______ is defined as the level of the employee's skills and technical knowledge relative to the task being performed.

maturity

Hersey and Blanchard's situational theory asserts that managers should consider an employee's job ____________ before deciding whether task performance or maintenance behaviors are more important.

maturity or maturities

(Fundamentals of Organizing) Integration

means that these differentiated units are put back together so that work is coordinated into an overall product.

Within an organization, high-level individuals who help others access the informal management network and learn about organizational norms and values are called

mentors

Managing and leading are distinctly different. Management deals with day-to-day operations, whereas leadership deals with ______ others.

motivating

Under conditions where the work is ambiguous and subordinates lack training, the optimal span of control would be ______.

narrow

One of the key situational factors in ________________-goal theory is the environmental pressures and demands with which followers must cope to attain their work goals.

path

According to ______ theory, three important environmental factors determine appropriate leadership style.

path-goal

Legitimate, coercive, reward, expert, and referent ______ are the five sources of leadership.

power

When a leader is able to get things done or accomplish goals even when others resist, the leader has ______.

power

Leaders have ______ power as a result of subordinate and coworker respect, admiration, and loyalty.

referent

The employees who work for Jon have a lot of respect and admiration for him. As a result, they are very loyal to him. This is an example of ______ power.

referent

Greta, the manager of a local bank, needs to be able to better motivate her employees. She has asked her supervisor for the authority to give and withhold incentives. Greta is asking for an increase in her ______ power.

reward

Managers' ability to give or withhold tangible and intangible incentives is their ______ power.

reward

When leaders vary their behavior from situation to situation, they are demonstrating a ______ leadership approach.

situational

In diversity training, skill building differs from awareness building in that

skill building aims to develop the behaviors needed to work best with one another and with customers in a diverse environment.

Randal Robinson works in Research and Development (R&D) for MNOP Corporation. Therefore, Randal works for a ______ department, rather than a line department.

staff department

According to the ___________ concept of for leadership, sometimes leaders don't have to lead, and some situations may cause leadership to have little impact.

substitute or substitutes

Marsha has two employees working under her in the accounting department. Both employees have worked for the company for at least 10 years, have college degrees in accounting, and are confident in themselves. In this department, ______ would be suitable.

substitutes for leadership

Larisa provides guidance to her employees. She also supports them when necessary and provides corrective feedback in their day-to-day activities. Larisa is practicing ______ leadership.

supervisory

People with a high internal locus of control ______ for their own actions.

take responsibility

Actions taken to ensure that the work group or organization reaches its goals are called ______ behaviors.

task performance

Modular network

temporary arrangements among partners that can be assembled and reassembled to adapt to the environment; also called virtual network .

Division of labor

the assignment of different tasks to different people or groups.

When managers have coercive power, they may respond to employees who are slow to complete a task by ______.

threatening to dock their pay or reduce their working hours

A leadership perspective that attempts to determine the personal characteristics of effective leaders is called the ______ approach.

trait

The ___________ approach to leadership assumes that there is a "leadership personality" and that leaders are born, not made.

trait

A leader who is able to generate excitement and revitalize an organization is a ______ leader.

transformational

A ______ is a mental image of a possible and desirable future state of the organization.

vision

(The Vertical Structure) Decentralizing spreads decision-making power

1. A centralized organization is an organization in which high-level executives make most decisions and pass them down to lower levels for implementation. 2. A decentralized organization is an organization in which lower-level managers make important decisions.

(Strategies to Promote Organizational Agility) High Involvement Organization

1. A high-involvement organization is one in which top management ensures that there is consensus about the direction in which the business is heading. 2. Organizational form is a flat, decentralized structure built around a customer, product or service.

(Strategies to Promote Organizational Agility) Learning organizations

1. A learning organization is an organization skilled at creating, acquiring, and transferring knowledge, and modifying its behavior to reflect new knowledge and insights.

(Strategies to Promote Organizational Agility) Strategic Alliances

1. A strategic alliance is a formal relationship created with the purpose of joint pursuit of mutual goals. 2. In a strategic alliance, individual organizations share administrative authority, form social links, and accept joint ownership. 3. The best alliances are true partnerships that meet these criteria: a. Individual excellence − both partners add value. b. Importance − both partners contribute to meeting strategic objectives. c. Interdependence − both partners need each other. d. Investment − partners devote resources to the relationship. e. Information − partners communicate openly. f. Integration − partners develop shared ways of operating. g. Institutionalization − relationship has formal status. h. Integrity − both partners are trustworthy.

(Strategies to Promote Organizational Agility) Organizing around core competencies

1. A well-understood, well-developed core competence can enhance a company's responsiveness and competitiveness. 2. Managers who want to strengthen their firms' competitiveness via core competencies need to focus on several related issues: a. Identify existing core competencies. b. Acquire or build core competencies that will be important for the future. c. Keep investing in competencies so that the firm remains world-class and better than competitors. Extend competencies to find new applications and opportunities for the markets of tomorrow.

The Horizontal Structure

1. As the task of an organization becomes increasingly complex, the organization inevitably must be subdivided or departmentalized into smaller units or departments. 2. Line departments are units that deal directly with the organization's primary goods and services; they make things, sell things, or provide customer service. 3. Staff departments are those that provide specialized or professional skills that support line departments such as research, legal, accounting, public relations, and human resources department. 4. The three approaches to organization of work, or departmentalization include functional, divisional, and matrix.

(Organizational Integration) Mutual adjustment allows flexible coordination

1. Coordination by mutual agreement involves feedback and discussions to jointly figure out how to approach problems and devise solutions that are agreeable to everyone. 2. Can be very effective when problems are novel and cannot be programmed in advance with rules, procedures, or plans.

(The Vertical Structure) Authority is the vertical glue

1. Corporate governance describes the oversight of the firm by its executive staff and its board of directors. 2. Authority is the legitimate right to make decisions and to tell other people what to do. 3. Authority resides in positions rather than in people. 4. Board of directors, led by the chair, makes major decisions affecting the organization, subject to corporate charter and bylaw provisions. a. The board performs at least three major sets of duties: i. selecting, assessing, rewarding, and perhaps replacing the CEO; ii. determining the firm's strategic direction and reviewing financial performance; iii. assuring ethical, socially responsible, and legal conduct. b. Boards made up of strong, independent outsiders are more likely to provide different information and perspectives and to prevent big mistakes. 5. The chief executive officer is personally accountable to the board and to the owners for the organization's performance. a. The CEO usually holds two positions either as the chair of the board or the president of the organization. 6. The top management teams a. These teams comprise a group of key members of the management team, which shares the authority of the CEO. b. Usually comprised of the CEO, president, chief operating officer, chief financial officer, and other key executives. 7. Hierarchy defines levels of authority a. Top management i. Hierarchy is the authority levels of the organizational pyramid. ii. The CEO occupies the top position and is the senior member of top management. iii. Presidents and vice presidents are also included in the top management. b. Middle management i. This is the second broad level. ii. Made up of managers who are in charge of plants or departments. c. Operational management i. This is the lowest level of management. ii. It includes office managers, sales managers, supervisors, and other first-line managers as well as the employees who report directly to them.

(The Vertical Structure) Delegation is how managers use others' talents

1. Delegation is the assignment of new or additional responsibilities to a subordinate. 2. Responsibility and accountability must be looked at before delegating any authority. 3. Responsibility is an assignment of a task that an employee is supposed to carry out. 4. Authority means that the person has the power and the right to make decisions, gives orders, draws upon resources, and does whatever else is necessary to fulfill the responsibility. 5. Accountability is the expectation that employees perform a job, take corrective action when necessary, and report upward on the status and quality of their performance. 6. Advantages of delegation a. Leverages managers' time and employees' talent. b. Conserves managers' most valuable asset: time. c. Develops subordinates' managerial skills and knowledge. d. Promotes subordinates' sense of importance and commitment. 7. How should managers delegate? a. Steps in effective delegation (see Exhibit 7.5): i. Define the goal succinctly. ii. Select the person for the task. iii. Solicit the subordinate's views about suggested approaches. iv. Give the subordinate the authority, time, and resources to perform the assignment. v. Schedule checkpoints for reviewing progress. vi. Follow through by discussing progress at appropriate intervals. b. Some tasks should not be delegated (i.e. disciplining subordinates)

(Fundamentals of Organizing) Differentiation creates specialized jobs

1. Differentiation means the organization is composed of many different units that work on different kinds of tasks, using different skills and work methods. 2. Within an organization's structure, differentiation is created through division of labor and job specialization: Division of labor means the work of the organization is subdivided into smaller tasks. Specialization means different people or groups often perform specific parts of the larger task.

(The Horizontal Structure) Divisional organizations increase customer focus

1. Divisional organization incorporates departmentalization that groups units around products, customers, or geographic regions. (Exhibit 7.6) 2. Product division - all functions that contribute to a given product are organized under one manager. a. Information needs are managed more easily. b. People have a full-time commitment to a particular product line. c. Task responsibilities are clear. d. People receive broader training. 3. Customer and geographical divisions a. Customer divisions are structured around the customer needs and provide faster, better service. b. Geographic divisions are structured around specific regions, districts, territories, and country. c. The primary advantage of the product, customer, and regional approaches to departmentalization is the ability to focus on customer needs and provide faster, better service.

(Fundamentals of Organizing) Integration coordinates employees' efforts

1. Integration and its related concept, coordination, refer to the procedures that link the various parts of the organization to achieve the organization's overall mission. 2. Integration occurs through structural mechanisms that enhance collaboration and coordination. 3. Vertical differentiation is top-down authority within an organization, the board of directors, the chief executive officer, and hierarchical levels, plus processes of delegation and decentralization. 4. Horizontal differentiation explores different approaches to departmentalization that create functional, divisional, and matrix organizations

(The Vertical Structure) Span of control and layers influence a manager's authority

1. Span of control is the number of subordinates who report directly to an executive or supervisor. 2. Narrow spans build a tall organization with many reporting levels. 3. Wide spans create a flat organization with fewer reporting levels. 4. The optimal span of control depends of a number of factors: a. Is the work clearly defined and unambiguous? b. Are subordinates highly trained and have access to information? c. Is the manager highly capable and supportive? d. Are jobs similar and performance measures comparable? e. Do subordinates prefer autonomy to close supervisory control? If all the answers to these questions is yes, then the span can be wider; if no is the answer, then the span should be narrower.

(Strategies to Promote Organizational Agility) The Impact of Organizational size

1. The case for big. a. Scale economies − lower costs per unit of production b. Economies of scope - economies in which materials and processes employed in one product can be used to make other, related products. 2. The case for small. a. As firms get larger customers begin to view their products as having lower quality. b. Small companies can: i. move fast ii. provide quality goods and services to targeted market niches iii. inspire greater involvement from their people iv. out-maneuver big bureaucracies. 3. Being big and small a. To avoid problems of growth and size, companies decentralize decision making and organize around small, adaptive, team-based work units. 4. Downsizing a. Companies downsize in an attempt to gain the responsiveness of a small company. b. Downsizing is the planned elimination of positions or jobs. . c. Rightsizing is a successful effort to achieve an appropriate size at which the company performs most effectively. d. To ease the pain of downsizing, firms engage in a number of positive practices such as: i. Choose positions to be eliminated based on careful analysis and strategic thinking. ii. Train people to cope with the new situation. iii. Identify and protect talented people. Give special attention and help to those who have lost their jobs. . . iv. Communicate constantly with people about the process. . v. Emphasize positive future and people's new roles in attaining it. 5. Survivor's syndrome is the loss of productivity and morale in employees who remain after a downsizing.

(The Horizontal Structure) Network organizations are built on collaboration

1. The network organization is a collection of independent, mostly single-function firms that collaborate on a product or service. (Exhibit 7.9) 2. The modular network is also called the virtual network. It is a very flexible version of the network organization. 3. Successful networks offer flexibility, innovation, quick responses to threats and opportunities, and reduced costs and risks. But to be successful, they must a. choose the right specialty b. choose collaborators that are also excellent, but provide complementary strengths c. make certain that all parties fully understand the strategic goals of the partnership d. be able to trust all parties with strategic information and trust that collaborators will deliver, even when business demands are heavy. 4. A broker is a person who coordinates individuals in the network.

Continuous process

A highly automated process with continuous production flow.

Broker

A person who assembles and coordinates participants in a network.

Specialization

A process in which different individuals and units performs different tasks.

ISO 9001

A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of producers and consumers.

Unity-of-command principle

A structure in which each worker reports to one boss, who in turn reports to one boss.

Just-in-time (JIT)

A system that calls for subassemblies and components to be manufactured in very small lots and delivered to the next stage of the production process just as they are needed.

Differentiation

An aspect of the organization's internal environment created by job specialization and the division of labor.

Total quality management (TQM)

An integrative approach to management that supports the attainment of customer satisfaction through a wide variety of tools and techniques that result in high-quality goods and services.

Lean manufacturing

An operation that strives to achieve the highest possible productivity and total quality, cost-effectively, by eliminating unnecessary steps in the production process and continually striving for improvement.

Learning organization

An organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights.

______ means that an organization is composed of many different units that work on different kinds of tasks and use different skills and work methods.

Differentiation

Glass ceiling

Metaphor for an invisible barrier that makes it difficult for women and minorities to rise above a certain level in the organization.

Play Ball, Inc. began business by making shoes for athletes. It soon expanded and now manufactures and distributes clothing, sporting equipment, and protective sports gear worldwide. It is departmentalized by athletic equipment, shoes, and clothing. Play Ball utilizes which type of organizational structure?

Product organization

Affirmative action

Special efforts to recruit and hire qualified members of groups that were discriminated against in the past.

Integration

The degree to which differentiated work units work together and coordinate their efforts.

Culture shock

The disorientation and stress associated with being in a foreign environment.

Formalization

The presence of rules and regulations governing how people in the organization interact.

Coordination by mutual adjustment

The procedures that link the various parts of an organization to achieve the organization's overall mission.

Mass customization

The production of varied, individually customized products at the low cost of standardized, mass-produced products.

Organization chart

The reporting structure and division of labor in an organization.

Technology

The systematic application of scientific knowledge to a new product, process, or service.

Ethnocentrism

The tendency to judge others by the standards of one's group or culture, which is seen as superior.

At Barney's Bats, Inc. top managers make all the decisions and pass them down to lower levels for implementation. Barney's Bats can be described as a(n) ______ organization.

centralized

A functional structure often leads to functional ______ rather than functional integration.

differentiation

A(n) _________________ organization groups all functions within a single division and then duplicates functions across all divisions.

divisional

An organization with departmentalization around specialized functions such as production, marketing, or human resources, is called a ______ organization.

functional

John Deere has divisions of its company headquartered in Latin America, Europe, Brazil, and Germany. This is an example of a company using a ______ type of organizational structure.

geographic division

Which type of organization is structured around districts, territories, regions, or countries?

geographic division

In a functional organization, people have ______.

greater opportunity for specialized training and in-depth skill development

Ruby recently accepted a job with a large insurance firm as an internal auditor. The insurance firm has strictly defined job responsibilities and lines of communication. For every decision that Ruby needs to make, approval must be obtained from upper management. Ruby's employer has a(n) ______.

high degree of centralization

(Fundamentals of Organizing) Mechanistic Organization Structure

is a form of organization that seeks to maximize efficiency.

(Fundamentals of Organizing) Differentiation

is an aspect of the organization's internal environment created by job specialization and the division of labor.

(Fundamentals of Organizing) Organic Structure

is an organizational form used to emphasize flexibility.

The departments of a company that have responsibility for the principal activities of a firm, such as making or selling the products of the company, are called _____________________ departments.

line departments; are units that deal directly with the organization's primary goods and services; they make things, sell things, or provide customer service.