Chapter 8 Bus 101

Matrix Structure disvantages

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

Matrix Structure advantages

-It gives managers flexibility in assignment people to projects -It encourages interorganizational cooperation and teamwork -It can produces creative solutions to product dvelopment problems -It makes effiencient use of organzational resources

Webers principles

-Job description -Written Rules, decision guidelines, and detailed records -Consistent Procedures regulations and polices -Staffing and promotion based on qualifications

Henri Foyal French economic Theoretician introduced such principles

-Unity of command Each worker is to report to one and only one boss -Hierarchy of authority All workers should known whom they report - Division of labor functions are to be divided into areas of specialization such as production, marketing, and finance -Subordination of individual interest to the general interest workers are to think of themselves as a coordinated team -Authority managers have the right to give orders and the power to enforce obedience -Degree of centralization The amount of decision making power vested in top management should vary by circumstance -Clear communication channels- All workers should be able to reach others in the organization quickly and easily -Order materials and people should be placed and maintained in the proper location -Equity a manager should treat employees and peers with respect and justice -Esprit de corps A spirit of pride and loyalty should be created among people in the firm

When designing responsive organizations firms have to make decisions about several organizational issues

1. Centralization 2.Span of control 3. Tall Versus flat organizational structures 4. Departmentalization

Benchmarketing

Compares an organization practices and products against the worlds best.

Managing change has become a

Critical managerial function which includes changing the whole organizational structure

Disadvanatges of departmentalization

1. Departments may not communicate well 2.Employees may identify with their departments goals rather than the organizations 3. The companys response to external changes may be slow 4.People may not be trained to take different managerial responibilties; rather they rend to become narrow specialist 5. Department members may engage in groupthink and may need input from outside to become more creative

Advantages of Departmentalization

1. Employees can develop skills in depth and progress within a department as they master more skills 2.The company can achieve economies of scale by centralizing all the resources it needs and locate various experts in that area 3.Employees can coordinate work within the function, and the top management can easily direct and control various departments activities

Organzational Design

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

Companies that are most successful in adapting to change have these common traits

1. they listen to customers 2. they have inspirational managers who drive new ideas throughout organization 3. They often have had close call with going out of business

Mass production was introduced

1900

Span of control

Describes the optimal number of employees a manager supervises or should supervise

Formal Organization

Details lines of responsibility, authority, and position

Departmentalization

Divides organizations into separate units

Chain of command

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

Organization Chart

Is a visual device that shows relationships among people and divides the organizations work; it shows who reports to whom

Mass productions

Methods for efficiently producing large quantities of goods

Change is to the evolving business environment

More global competition, faster technology change, and pressure to persevere the natural environment

Transparency

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

line organzation disadvantage

Of being too inflexible, of having few specialist or experts to advise people along the line and having lenghty lines of communication

Bureaucracy became to be the term

Organization with many layers of managers

Favor some decentralization and this more delegation authority

Rapidly changing markets added to global differences

Bureaucracy

Reliance on Rules

Departmentalization groups workers based on their

Skills, expertise, or resource use do they can specialize and work together more effectively

Matrix organization

Specialist from different parts of organization work together temporarily on specific projects, but still remain part of line and staff structure

A potential real problem with matrix management

The project teams are not permanent They form to solve a problem and then break up

Informal organization

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

Economies scale

The term refers to the fact that companies can reduce their production costs by purchasing raw materials in bulk

Max Weber

The theory of social and economic organizations. Appeared 1940's promoted the pyramid shaped organizational structure that is popular in large firms

cross-functional team works best when

The voice of the customer is brought in, especially in product development tasks

Digital natives

Younger people today are called this because they grew up with the internent and cell phones

staff personnel

advise and assist line personnel in meeting their goals and include those in marketing research, legal advising, information tech, and human resource

Cross- functional self managed teams

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

Line personnel

are responsible for directly achieveing organizational goals and include production workers, distrubtion people, and marketing personnel.

One of the biggest difference between line and staff personnel is

authority Staff personal have authority to advise line personnel and influence their decisions but cant make policy changes The line manager may seek or ignore the advice of staff personnel

Informal organization is too

emotional to allow careful reasoned decision making on critical manners but effective in generating creative solutions to short term problems and creating comaraderie and teamwork among employees

Cross functional teams should be

empowered and collaborative

Many orginzations benefit from

expert advice on safety, legal issues, quality control, database management, motivation, and investing.

Line and line and staff organizational structures allow

for established lines of authority and communication and work well in organizations with stable environments and slow product development

No organization can work effectively without both types

formal organization and informal organization

The traditional way to departmentalize is by

function, design, production, marketing, and accounting

Companies designed many rules and regulations to

give managers control over employees

Inverted organization

has contact people at the top and top management at the bottom

Hierarchy

is 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

Restructuring

is redseigning an organization so it can more effeciently serve customers

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

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

Line managers can

issue orders, enforce discipline and adjust the organization as conditions change

Line organizations dont have

legal department, accounting department, human resource department, or info technology department Follows all Fayol rules

Information technology also allows

managers to handle more information. so the span can be broader still.

Self managed

means that they are empowered to make decisions without management approval

Centralized authority

occurs when decision making is concentrated at the top level of management limits the flexibility to immediately respond to regional or local market changes and trends

Th average cost of goods decreases as

production levels rise

Real time

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

grapevine

the system through which unofficial information flows between and among managers and employees

Core competencies

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

Bureaucrat

to describe a middle manager whose function was to implement top management orders

Large organization use flat line structures to try

to match the friendliness of small firms

Networking

uses communication technology to link organizations and allow them to work together on common objectives

Matrix Organization

violate some traditional managerial principles

Flat organizational structures

Fewer layers of management and board span of control compared to Tall organizational structures

Intverted organiztion has support

Frontline personnel with interneal and externeal data bases, advanced communication systems, and professional assistance frontline peopple have to be better educated better trained, better paid than in the past

Line Organizations

Has two way lines of responsibility, authority and communication running the top to the bottom of the organization with everybody reporting to the same supervisor

Consumers today expect

High quality products and friendly service at a reasonable price

Business growth led to

Econmies scale

One solution to the temporary nature of matrix teams is to

Establish long lived teams and empower them to work closely with suppliers, customers, and others to quickly and effciently bring out new high quaility products while giving great service