Intro to Business Chapter 8: Structuring Organizations for Today's Challenges

staff personnel

-advise and assist line personnel in meeting their goals, and include those in marketing research, legal advising, information technology, and human resource management -have authority to advise line personnel and influence their decisions, but they can't make policy changes themselves -strengthen the line positions and are like well-paid consultants on the organization's payroll

benchmarking

-compares an organization's practices, processes, and products against the world's best -tells companies what they should outsource

Weber's Organizational Theory

1. principles of organization -job descriptions -written rules, decision guidelines, detailed records -consistent procedures, regulations and policies -staffing and promotion based on qualification 2. believed that large organizations demanded clearly established rules and guidelines to be followed precisely

hierarchy

a system in which one person is at the top of the organization and there is a ranked or sequential ordering from the top down of managers and others who are responsible to that person

economies of scale

the fact that companies can reduce their production costs by purchasing raw materials in bulk

grapevine

the informal organization's nerve center; the system through which unofficial information flows between and among managers and employees

chain of command

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

real time

the present moment or the actual time in which an event takes place

departmentalization

the process of setting up individual departments to do specialized tasks

informal organization

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

organizational (corporate) culture

the widely shared values within an organization that foster unity and cooperation to achieve common goals

Fayol's Principles of Organization

1. Unity of command 2. Hierarchy of authority 3. Division of labor 4. Subordination of individual interests to the general interest 5. Authority 6. Degree of Centralization 7. Clear communication channels 8. Order 9. Equity 10. Esprit de corps: a spirit of pride and loyalty

four ways to structure an organization

1. line organizations 2. line-and-staff organizations 3. matrix-style organizations 4. cross-functional self-managed teams

virtual corporation

a temporary network made of replaceable firms that join and leave as needed

bureaucracy

came to be the term of organization with many layers of managers

span of control

describes the optimal number of subordinates a manager supervises or should supervise -at lower levels, where work in standardized, it's possible to implement a broad span of control -the trend today is to expand the span of control as organizations adopt empowerment, reduce the number of middle managers, and hire more talented and better educated lower-level employees

tall organizational structures

organizations growing bigger, adding layer after layer of management to create these→ span of control was small

self-managed

they are empowered to make decisions without management approval

networking

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

inverted organization

-has contact people at the top and the chief executive officer at the bottom -management layers are few and the manager's job is to assist and support frontline people, not boss them around

centralized authority

occurs when decision making is concentrated at the top level of management

decentralized authority

occurs when decision making is delegated to lower-level managers and employees more familiar with local conditions than headquarters management could be

restructuring

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

line personnel

responsible for directly achieving organizational goals and include production workers, distribution people, and marketing personnel -have formal authority to make policy decisions

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

core competencies

those functions a firm can do as well as or better than any other organization in the world

flat organizational structures

trend right now, has fewer layers of management and a broad span of control -can respond readily to customers demands because lower-level employees have authority and responsibility for making decisions and managers can be spared some day-to-day tasks

disadvantages of matrix organizations

-costly and complex -can confuse employees about where their loyalty belongs -requires good interpersonal skills as well as cooperative employees and managers to avoid communication problems -may be only a temporary solution to a long-term problem

disadvantages to departmentalization

-departments may not communicate well -employees may identify with their department's goals rather than the organization's -the company's response to external changes may be slow -people may not be trained to take different managerial responsibilities -department members may engage in groupthink and may need input from outside to become more creative

advantages of departmentalization

-employees can develop skills in depth and progress within a department as they master more skills -the company can achieve economies of scale by centralizing all the resources it needs and locate various experts in that area -employees can coordinate work within the function, and top management can easily direct and control various departments' activities

advantages of matrix organizations

-gives managers flexibility in assigning people to projects -encourages interorganizational cooperation and teamwork -can produce creative solutions to product development problems -makes efficient use of organizational resources

formal organization

details lines of responsibility, authority and position

division of labor

divide up the tasks among the partners of your business

job specialization

dividing tasks into smaller jobs

cross-functional self-managed teams

groups of employees from different departments who work together on a long-term basis -work best when the voice of the customer is brought in as well as suppliers and distributors

line organization

has direct two-way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with everyone reporting to only one supervisor -many small businesses -no specialists

the result in transparency

occurs when a company is so open to other companies that electronic information is shared as if the companies were one

digital natives

younger people are called this because they grew up with the Internet and cell phones