Chapter 7: Designing Organizational Structure
virtual corporation
A network of independent companies linked by information technology to share skills, costs, and access to one another's markets; allows the companies to come together quickly to exploit rapidly changing opportunities.
organization chart
A visual representation of the structured relationships among tasks and the people given the authority to do those tasks.
line positions
All positions in the organization directly concerned with producing goods and services and that are directly connected from top to bottom.
committee structure
An organizational structure in which authority and responsibility are held by a group rather than an individual.
matrix structure (project management)
An organizational structure that combines functional and product departmentalization by bringing together people from different functional areas of the organization to work on a special project.
line-and-staff organization
An organizational structure that includes both line and staff positions.
mechanistic organization
An organizational structure that is characterized by a relatively high degree of job specialization, rigid departmentalization, many layers of management, narrow spans of control, centralized decision-making, and a long chain of command.
organic organization
An organizational structure that is characterized by a relatively low degree of job specialization, loose departmentalization, few levels of management, wide spans of control, decentralized decision-making, and a short chain of command.
line organization
An organizational structure with direct, clear lines of authority and communication flowing from the top managers downward.
geographic departmentalization
Departmentalization that is based on the geographic segmentation of the organizational units.
product departmentalization
Departmentalization that is based on the goods or services produced or sold by the organizational unit.
functional departmentalization
Departmentalization that is based on the primary functions performed within an organizational unit.
customer departmentalization
Departmentalization that is based on the primary type of customer served by the organizational unit.
process departmentalization
Departmentalization that is based on the production process used by the organizational unit.
authority
Legitimate power, granted by the organization and acknowledged by employees, that allows an individual to request action and expect compliance.
work teams
Like a work group but also requires the pooling of knowledge, skills, abilities, and resources to achieve a common goal.
cross-functional team
Members from the same organizational level but from different functional areas.
staff positions
Positions in an organization held by individuals who provide the administrative and support services that line employees need to achieve the firm's goals.
self-managed work teams
Teams without formal supervision that plan, select alternatives, and evaluate their own performance.
delegation of authority
The assignment of some degree of authority and responsibility to persons lower in the chain of command.
reengineering
The complete redesign of business structures and processes in order to improve operations.
centralization
The degree to which formal authority is concentrated in one area or level of an organization. Top management makes most of the decisions.
group cohesiveness
The degree to which group members want to stay in the group and tend to resist outside influences.
specialization
The degree to which tasks are subdivided into smaller jobs.
work groups
The groups that share resources and coordinate efforts to help members better perform their individual jobs.
managerial hierarchy
The levels of management within an organization; typically includes top, middle, and supervisory management.
chain of command
The line of authority that extends from one level of an organization's hierarchy to the next, from top to bottom, and makes clear who reports to whom.
informal organization
The network of connections and channels of communication based on the informal relationships of individuals inside an organization.
span of control
The number of employees a manager directly supervises; also called span of management.
formal organization
The order and design of relationships within a firm; consists of two or more people working together with a common objective and clarity of purpose.
organization
The order and design of relationships within a firm; consists of two or more people working together with a common objective and clarity of purpose.
division of labor
The process of dividing work into separate jobs and assigning tasks to workers.
departmentalization
The process of grouping jobs together so that similar or associated tasks and activities can be coordinated.
decentralization
The process of pushing decision-making authority down the organizational hierarchy.
problem-solving teams
Usually members of the same department who meet regularly to suggest ways to improve operations and solve specific problems.
