Chapter 10 for Management Exam 2
What 3 factors influence centralization and decentralization?
1) Greater change and uncertainty in the environment are usually associated with decentralization 2) The amount of centralization or decentralization should fit the firm's strategy 3) In times of crisis or risk of company failure, authority may be centralized at the top
What two things occur as organizations grow and evolve?
1) New positions and departments are added to deal with factors in the external environment or with new strategic needs 2) Senior managers must find a way to tie all these departments together. Org needs systems
What 3 characteristics distinguish authority?
1) authority is vested in positions, not people 2) authority flows down the vertical hierarchy 3) authority is accepted by subordinates (acceptance theory of authority)
What three things does an organization structure define?
1) how tasks are divided 2) how resources are deployed 3) how departments are coordinated
Define a task force. What type of team or group are they?
A temporary team or committee designed to solve a problem involving several departments
Give examples of staff departments
HR, accounting, marketing, labor relations
What is the highest level of horizontal coordination?
Relational coordination
Define a matrix boss
a functional or product supervisor responsible for one side of the matrix
Define a permanent team
a group of employees from all functional areas permanently assigned to focus on a specific task or activity
Define a cross-functional team
a group of employees from various functional departments that meet as a team to resolve mutual problems
Define collaboration
a joint effort between people from two or more departments to produce outcomes that meet a common goal or shared purpose
Define a project manager
a manager who is responsible for a specific work project that involves people from various functions and levels of the organization
Define the matrix approach
a structural approach that uses both functional and divisional chains of command simultaneously, in the same part of the organization
Define a team-based structure
a structure in which an entire organization is made up of horizontal teams that coordinate their activities and work directly with customers to accomplish organizational goals
What kind of a team is a task force?
a temporary team
Define small-batch production
a type of manufacturing technology that involves the production of good in batches of one or a few products designed to customer specification
What is an organization chart?
a visual representation of an organization's structure
Define the functional structure
activities are grouped together by common function from the bottom to the top of the organization
Define a functional structure
an organization structure in which activities are grouped together by common function from the bottom to the top of the organization
Define a flat structure
an organizational structure characterized by am overall broad span of management and relatively few hierarchal levels
Define a tall structure
an organizational structure characterized by an overall narrow span of management and a relatively large number of hierarchal levels
Define a virtual network structure
an organizational structure in which the organization subcontracts most of its major functions to separate companies and coordinates their activities from a small headquarters organization
Define a divisional structure
an organizational structure that groups employees and departments based on similar organizational outputs (products or services) such that each division has a mix of cantonal skills and tasks
Define the chain of command
an unbroken line of authority that links all individuals in the organization and specifies who reports to whom
What actions does organizing involve?
assigning tasks, grouping tasks into departments and allocating resources
What does centralization mean?
authority is located near the top of organizational levels
What does decentralization mean?
authority is pushed down to lower organizational levels
Give examples of large batch and mass production manufacturing
automobile assembly lines, tobacco products and textiles
Define departmentalization
basis for grouping individual positions into departments and departments into the total organization
What does a top-leader oversee?
both the product and functional chains of command
What is service technology characterized by?
by intangible outputs and direct contact between employees and customers
What is mass production characterized by?
by long production runs to manufacture a large volume of products with the same specification
What teams further horizontal coordination?
cross-functional teams
Give examples of small batch and unit production
custom clothing, special order machine tools, space capsules, satellites and submarines
Define organizing
deployment of organizational resources to achieve strategic goals
What are the fundamental characteristics of a vertical organization structure?
division of labor, chain of command, span of management, centralization and decentralization
What is the primary difference between divisional and functional structures?
divisional structures encourage decentralization and the chain of command converges lower in the hierarchy
What is a disadvantage of the division of labor aka work specialization
employees are isolated and do only a single, boring job; it creates separation and hinders coordination
Give examples of external strategic needs
environmental conditions, strategic direction & organizational goals
Define relational coordination
frequent horizontal coordination and communication carried out through ongoing relationships of shared goals, shared knowledge and mutual respect
What is associated with a mechanistic system?
goals of efficiency and a stable environment
What is associated to the organic system?
goals of innovation and a rapidly changing environment are associated to the organic system
What is an organization with a mechanistic system described as?
highly specialized and characterized by rules, procedures and a clear hierarchy of authority
What is the emphasis on permanent teams?
horizontal communication and information sharing
Which type of teams is a team-based structure made up of?
horizontal teams
How does divisional hierarchy of authority run?
horizontally
Define a two-boss employee
in a matrix structure, a person who reports to two supervisors simultaneously
Define a top-leader
in a matrix structure, the person who oversees both the product and the functional chains of command and is responsible for the entire matrix
Where do strategic goals of efficiency occur?
in more stable environments
Where do goals of innovation and flexibility occur?
in more uncertain environments
Which structures are top-leaders in?
in the matrix structure
What tasks do staff departments perform?
include all those that provide specialized skills in the support of line departments
What does the continuous process production involve?
involves the mechanization of the entire work flow and nonstop production
What does technology include?
knowledge, tools, techniques and activities used to transform organization inputs into outputs
When is centralization high?
mass production
In which structure are two-boss employees?
matrix structure
Define unity of command
means that each employee is held accountable to only one supervisor
What characterizes the organic system?
more horizontal and decision making is decentralized
What is a flat structure characterized by?
overall broad span of management and relatively few hierarchal levels
What characterizes a tall structure?
overall narrow span of management and a relatively large number of hierarchal levels
What does accountability mean?
people with authority and responsibility are subject to reporting and justifying task outcomes to those above them in the chain of command
What tasks do line departments perform?
perform tasks that reflect the organization's primary goal and mission (make and sell the product)
Give two examples o the continuous process production
petroleum refineries & chemical plants
What do structural decisions take into consideration?
pressures from the bottom up
Define the scalar principle
refers to a clearly defined line of authority in the organization that includes all employees
What type of structure does a mechanistic system have?
rigid, vertical, centralized structure with most decisions made at the top
When is centralization low?
small batch and continuous processes
What is another term for span of management?
span of control
What type of goals does organizing seek to achieve?
strategic
What does the strategy define? and what does organizing define?
strategy= what to do; organizing= how to do it
What are popular contemporary approaches to departmentalization?
team and virtual network structure
Define technical complexity
the degree to which complex machinery is involved in the production process to the exclusion of people
Define the division of labor
the degree to which organizational tasks are subdivided into separate jobs
Define responsibility
the duty to perform the task or activity that one has been assigned
What is a top-leader responsible for?
the entire matrix
Define authority
the formal and legitimate right of a manager to make decisions, issue orders and allocate resources to achieve outcomes desired by an organization
Define line authority
the formal power to direct and control immediate subordinates
Define the organization structure
the framework in which an organization defines how tasks are divided, resources are deployed and departments are coordinated
Define coordination
the managerial task of adjusting and synchronizing the divers activities among different individuals and departments
Define the span of management
the number of employees reporting to a supervisor
Define reengineering
the radical redesign of business processes to achieve dramatic improvements in cost, quality, service and speed
Define staff authority
the right to advise, counsel and recommend in the manager's area of expertise
What do external strategic needs create?
top-down pressure
What are the two underlying principles associated with the chain of command?
unity of command and the scalar principle
How does functional hierarchy of authority run?
vertically
Define delegation
when managers transfer authority and responsibility to positions below them in the hierarchy
What is another name for the division of labor?
work specialization