Lecture 13

Organizing The Business Enterprise Chapter 7 Organizing The Business Enterprise

Chapter Outline What is Organizational Structure? The Building Blocks of Organizational Structure Establishing The Decision-Making Hierarchy Basic Forms of Organizational Structure Informal Organization

Organizational Structure Influenced By: Jobs To Be Done How Jobs Relate To One Another

Determinants Of Organization Purpose Mission Strategy (e.g a rapid growing firm VS a stable firm Size, technology and changes in environment also affect structure

Organization Chart Use charts to clarify structure and to show where employee fit Solid lines defines the chain of command or reporting relationships Large organizations more complex organizational charts

Organization Chart

Chain Of Command

Building Blocks Of Structure First step in developing structure involves two activities Specialization- Specific Jobs To Specific People Departmentalization Group Jobs In Logical Units Profit Center

Building Blocks Of Structure First step in developing structure involves two activities Specialization- Specific Jobs To Specific People Identifying jobs that needs to be done and identifying people who will do them Small VS big organizations

Building Blocks Of Structure Departmentalization Group Jobs In Logical Units Profit Center

Types Of Departmentalization Customer Product Process Geographic Functional

Customer Departmentalization

Product Departmentalization

Process Departmentalization

Geographic Departmentalization

Functional Departmentalization

Multiple Forms Of Departmentalization

Hierarchy For Decisions Goal is to figure out how to structure and stabilize the firm so that every one works together Assign Tasks Responsibility Authority Perform Tasks Delegation Accountability Distribute Authority

Small Business Delegation Fear Employee Can’t Do As Well Something Will Go Wrong No Long-Range Plan because you do everyday fire fighting Not Up-To-Date On Industry Trends & Competitive Products Solution: do not run show independently

Big Business Delegation Fear Subordinate Doesn’t Know Job Subordinate “Show Manager Up” Desire To Retain Control Inability To Effectively Delegate Solution: Cannot do everything themselves Train subordinates if they cant perform Subordinate performs well it will reflect favorably

Hierarchy For Decisions Goal is to figure out how to structure and stabilize the firm so that every one works together Assign Tasks Responsibility Authority Perform Tasks Delegation Accountability Distribute Authority