BusinessEssentialsTwelfthEditionChapter6OrganizingtheBusinessCopyright?2019,2016,2013PearsonEducation,Inc.AllRightsReserved.IntroductionInthischapterweexaminefactorsthatinfluenceafirm’sorganizationalstructurediscussthebuildingblocksoforganizationalstructureaswellasthedifferencesbetweendecisionmakingindifferenttypesoforganizationslookatavarietyoforganizationalstructuresdescribethemostpopularnewformsoforganizationaldesignLearningObjectives(1of2)Discussthefactorsthatinfluenceafirm’sorganizationalstructure.Explainspecializationanddepartmentalizationastwoofthebuildingblocksoforganizationalstructure.Describecentralizationanddecentralization,delegation,andauthorityasthekeyingredientsinestablishingthedecision-makinghierarchy.LearningObjectives(2of2)Explainthedifferencesamongfunctional,divisional,matrix,andinternationalorganizationalstructuresanddescribethemostpopularnewformsoforganizationaldesign.Describetheinformalorganizationanddiscussintrapreneuring.WhatIsOrganizationalStructure?OrganizationalStructurespecificationofthejobstobedonewithinanorganizationandthewaysinwhichtheyrelatetooneanotherOrganizationChartsOrganizationChartdiagramdepictingacompany’sstructureandshowingemployeeswheretheyfitintoitsoperationsChainofCommandreportingrelationshipswithinacompanyTheOrganizationChartDeterminantsofOrganizationalStructureMissionStrategySizeInternalenvironmentExternalenvironmentTheBuildingBlocksofOrganizationalStructureSpecializationdeterminingwhowilldowhatDepartmentalizationdetermininghowpeopleperformingcertaintaskscanbestbegroupedtogetherSpecializationJobSpecializationtheprocessofidentifyingthespecificjobsthatneedtobedoneanddesignatingthepeoplewhowillperformthemDepartmentalization(1of3)Departmentalizationprocessofgroupingjobsintologicalunitsproduct,process,functional,customer,geographicProfitCenterseparatecompanyunitresponsibleforitsowncostsandprofitsDepartmentalization(2of3)FunctionalDepartmentalizationdividinganorganizationaccordingtogroups’functionsoractivitiesProductDepartmentalizationdividinganorganizationaccordingtospecificproductsorservicesbeingcreatedProcessDepartmentalizationdividinganorganizationaccordingtoproductionprocessesusedtocreateagoodorserviceDepartmentalization(3of3)CustomerDepartmentalizationdividinganorganizationtoofferproductsandmeetneedsforidentifiablecustomergroupsGeographicDepartmentalizationdividinganorganizationaccordingtotheareasofthecountryortheworldservedbyabusinessMultipleFormsofDepartmentalizationDistributingAuthority:CentralizationandDecentralizationEstablishmentofaDecision-MakingHierarchydecidingwhowillbeempoweredtomakewhichdecisionsandwhowillhaveauthorityoverothersCentralizedOrganizationorganizationinwhichmostdecision-makingauthorityisheldbyupper-levelmanagementDecentralizedOrganizationorganizationinwhichagreatdealofdecision-makingauthorityisdelegatedtolevelsofmanagementatpointsbelowthetopFlatandTallOrganizations(1of3)FlatOrganizationalStructurecharacteristicofdecentralizedcompanieswithrelativelyfewlayersofmanagementTallOrganizationalStructurecharacteristicofcentralizedcompanieswithmultiplelayersofmanagementFlatandTallOrganizations(2of3)FlatandTallOrganizations(3of3)SpanofControlThedistributionofauthorityinanorganizationalsoaffectsthenumberofpeoplewhoworkforanyindividualmanager.SpanofControlnumberofpeoplesupervisedbyonemanagerTheDelegationProcessDelegationprocessthroughwhichamanagerallocatesworktosubordinatesAssigningresponsibility-thedutytoperformanassignedtaskGrantingauthority-thepowertomakethedecisionsnecessarytocompletethetaskCreatingaccountability-theobligationemployeeshaveforthesuccessfulcompletionofthetaskLearningtoDelegateEffectivelyTable6.1LearningtoDelegateEffectivelyI’mafraidtodelegatebecause...SolutionMyteamdoesn’tknowhowtogetthejobdone.Ifmembersofyourteamareexhibitingopportunitiesforimprovedperformance,offerthemthetrainingnecessaryforthemtobecomemoreeffectiveattheirjobs.Ilikecontrollingasmanythingsaspossible.Recognizethattryingtoaccomplisheverythingyourselfwhileyourteamdoesnothingonlysetsyouupforburnoutandfailure.Asyoubegintorelinquishcontrol,youwillcometotrustyourteammoreasyouwatchyourteammemberssucceed.Idon’twantanyoneonmyteamoutperformingme.High-performingteammembersareareflectionofyoursuccessasamanager.Encouragethemtoexcel,praisethemforit,andsharethesuccessofyourteamwiththerestoftheorganization.Idon’tknowhowtodelegatetaskseffectively.Considertakingamanagementtrainingcourseorreadingsomebooksonthetopicofdelegatingeffectively.FormsofAuthority(1of2)LineAuthorityorganizationalstructureinwhichauthorityflowsinadirectchainofcommandfromthetopofthecompanytothebottomStaffAuthorityauthoritybasedonexpertisethatusuallyinvolvescounselingandadvisinglinemanagersStaffMembersadvisersandcounselorswhohelplinedepartmentsinmakingdecisionsbutwhodonothavetheauthoritytomakefinaldecisionsFormsofAuthority(2of2)CommitteeandTeamAuthorityauthoritygrantedtocommitteesorteamsinvolvedinafirm’sdailyoperationsWorkTeamgroupofoperatingemployeeswhoareempoweredtoplanandorganizetheirownworkandtoperformthatworkwithaminimumofsupervisionLineandStaffOrganizationBasicFormsofOrganizationalStructure(1of4)FunctionalStructureorganizationstructureinwhichauthorityisdeterminedbytherelationshipsbetweengroupfunctionsandactivitiesFunctionalStructureBasicFormsofOrganizationalStructure(2of4)DivisionalStructureorganizationalstructureinwhichcorporatedivisionsoperateasautonomousbusinessesunderthelargercorporateumbrellaDivisionalStructureBasicFormsofOrganizationalStructure(3of4)MatrixStructureorganizationalstructurecreatedbysuperimposingoneformofstructureontoanotherInsomecompanies,thematrixorganizationisatemporarymeasureinstalledtocompleteaspecificprojectandaffectingonlyonepartofthefirmMatrixStructureBasicFormsofOrganizationalStructure(4of4)InternationalOrganizationalStructuresapproachestoorganizationalstructuredevelopedinresponsetotheneedtomanufacture,purchase,andsellinglobalmarketsInternationalOrganizationalStructureOrganizationalDesignfortheTwenty-FirstCentury(1of2)Teamorganizationreliesalmostexclusivelyonproject-typeteams,withlittleornounderlyingfunctionalhierarchyLearningorganizationworkstofacilitatethelifelonglearningandpersonaldevelopmentofallofitsemployeeswhilecontinuallytransformingitselftorespondtochangingdemandsandneedsOrganizationalDesignfortheTwenty-FirstCentury(2of2)Virtualorganizationhaslittleornoformalstructurehasonlyahandfulofpermanentemployees,averysmallstaff,andamodestadministrativefacilityTheVirtualOrganizationInformalOrganizationInformalOrganizationnetwork,unrelatedtothefirm’sformalauthoritystructure,ofeverydaysocialinteractionsamongcompanyemployeesInformalgroupsgroupsofpeoplewhodecidetointeractamongthemselvesOrganizationalGrapevineGrapevineinformalcommunicationnetworkthatrunsthroughanorganizationBymaintainingopenchannelsofcommunicationandrespondingvigorouslytoinaccurateinformatio