Chapter 8: Structuring Organizations for todays challenges

organization chart

A visual device that shows relationships among people and divides the organization's work; it shows who reports to whom.

Economies of scale

Companies can reduce their production costs by purchasing raw materials in bulk.

line organization

Has direct two-way lines of responsibility, authority and communication running from the top to the bottom. Everyone reports to one supervisor. -No specialists

Matrix Organization

Specialists from different parts of the organization work together temporarily on specific projects, but still remain part of a line-and-staff structure.

real time

The present moment or actual time in which something takes place.

Networking

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

centralized authority

When decision- making authority is maintained at the top level of management at the company's headquarter.

decentralized authority

When decision-making is delegated to lower-level managers and employees more familiar with local conditions than headquarters is.

hierarchy

a system or organization in which people or groups are ranked one above the other according to status or authority.

staff personnel

employees who advise and assist line personnel in meeting their goals

Restructuring

redesigning an organization so that it can more effectively and efficiently serve its customers

Departmentalization

the dividing of organizational functions into separate units - Workers are grouped by skills and expertise to specialize their skill

Chain of command

the line of authority that moves from the top of a hierarchy to the lowest level

span of control

the optimal number of subordinates a manager supervises or should supervise

informal organization

the system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority outside the formal organization

Digital natives

young people who have grown up using the internet and social networking

line personnel

employees who are part of the chain of command that is responsible for achieving organizational goals

cross-functional self-managed teams

groups of employees from different departments who work together on a long-term basis

Benchmarking

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

Formal organization

Details lines of responsibility, authority and position. -The formal system is often slow and bureaucratic, but it helps guide the lines of authority.

Core competencies

Functions that the organization can do as well as or better than any other organization in the world.

Organizational or corporate culture

-widely shared values within an organization that provide unity and cooperation to achieve common goals -culture is shown in stories, traditions and myths

Virtual corporation

A temporary networked organization made up of replaceable firms that join and leave as needed.

Bureaucracy

An organization with many layers of managers who set rules and regulations and oversee all decisions.

inverted organization

an organization that has contact people at the top and the chief executive officer at the bottom of the organization chart - Manager's job is to assist and support frontline people, not boss them around.

tall organization structure

an organizational structure in which the pyramidal organization chart would be quite tall because of the various levels of management

Flat Organizational Structure

characteristic of decentralized companies with relatively few layers of management