Understanding Business Chapter 8

Organizational (or corporate) Culture

. Widely shared values within an organization that provide unity and cooperation to achieve common goals.

Tall Organization Structure

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

Fayol's Unity of command

Each worker is to report to one, and only one, boss.

Chain of Command

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

Span of Control

The optimum number of subordinates a manager supervises or should supervise.

According to Fayol, all workers should be able to reach each other quickly and easily through clear

communication channels.

Remaining flexible

is the key to an organization's success in changing times .

Self-managed means

that they are empowered to make decisions without management approval

Fayol's Equity

A manager should treat employees and peers with respect and justice

Restructuring

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

Real Time

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

Economies of Scale

The situation in which companies can reduce their production costs if they can purchase raw materials in bulk; the average cost of goods goes down as production levels increase.

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 who are responsible to that person.

Virtual Corporation

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

Fayol's hierachy of authority

All workers should know to whom they report

Matrix Organization

An organization in which specialists from different parts of the organization are brought together to work on specific projects but still remain part of a line-and-staff structure.

Decentralized Authority

An organization structure in which decision-making authority is delegated to lower-level managers more familiar with local conditions than headquarters management could be.

Centralized Authority

An organization structure in which decision-making authority is maintained at the top level of management at the company's headquarters.

Flat Organization Structure

An organization structure that has few layers of management and a broad span of control.

Inverted Organization

An organization that has contact people at the top and the chief executive officer at the bottom of the organization chart.

Line Organization

An organization that has direct two-way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with all people reporting to only one supervisor.

Bureaucracy

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

Benchmarking

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

Staff Personnel

Employees who advise and assist line personnel in meeting their goals.

Line Personnel

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

Fayol's division of labor

Functions are to be divide into areas of specialization such as production, marketing, and finance.

Cross-Functional Self-Managed Teams

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

Departmentalization

The dividing of organizational functions into separate units.

Formal Organization

The structure that details lines of responsibility, authority, and position; that is, the structure shown on organization charts.

Informal Organization

The system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority outside the formal organization; that is, the human side of the organization that does not appear on any organization chart.

Core Competencies

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

Networking

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

Digital Natives

Young people who have grown up using the Internet and social networking.

Fayol's order

principle states that materials and people should be placed and maintained in the proper location withing an organization.

Organizational culture

widely shared values withing an organization that provide unite and cooperation to achieve common goals