Managing for Quality and Competitiveness Part 3 Managing for Quality and Competitiveness © 2015 McGraw-Hill Education.

CHAPTER 6 CHAPTER 7 CHAPTER 8 The Nature of Management Organization, Teamwork and Communication CHAPTER 8 Managing Service and Manufacturing Operations

Learning Objectives LO 7-1 Define organizational structure and relate how organizational structures develop. LO 7-2 Describe how specialization and departmentalization help an organization achieve its goals. LO 7-3 Determine how organizations assign responsibility for tasks and delegate authority. LO 7-4 Compare and contrast some common forms of organizational structure. LO 7-5 Distinguish between groups and teams and identify the types of groups that exist in organizations. LO 7-6 Describe how communication occurs in organizations.

Organizational Culture Organizational Culture (Corporate Culture) A firm’s shared values, beliefs, traditions, philosophies, rules, and role models for behavior Structure The arrangement or relationship of positions within an organization Organizational Chart A visual display of the organizational structure, lines of authority (chain of command), staff relationships, permanent committee arrangements, and lines of communication

Overspecialization can have negative consequences Departmentalization Specialization The division of labor into small, specific tasks and the assignment of employees to do a single task Employees become bored Job dissatisfaction Poor quality work Increased injuries Increased employee turnover Overspecialization can have negative consequences Departmentalization The grouping of jobs into working units usually called departments, units, groups, or divisions Functional departmentalization Product departmentalization Geographical departmentalization Customer departmentalization

Departmentalization Functional Departmentalization The grouping of jobs that perform similar functional activities, such as finance, manufacturing, marketing, and human resources Product Departmentalization The organization of jobs in relation to the products of the firm Geographical Departmentalization The grouping of jobs according to geographic location, such as state, region, country, or continent Customer Departmentalization The arrangement of jobs around the needs of various types of customers

Delegation of Authority Giving employees not only tasks, but also the power to make commitments, use resources, and take whatever actions are necessary to carry out those tasks Responsibility The obligation, placed on employees through delegation, to perform assigned tasks satisfactorily and be held accountable for the proper execution of work Accountability The principle that employees who accept an assignment and the authority to carry it out are answerable to a superior for the outcome

Degree of Centralization A structure in which authority is concentrated at the top, and very little decision-making authority is delegated to lower levels Overcentralization can cause serious problems for a company, in part because it may take longer for the organization as a whole to implement decisions and to respond to changes and problems on a regional scale Centralized Organizations An organization in which decision-making authority is delegated as far down the chain of command as possible Delegating authority to lower levels of managers may increase the organization’s productivity Decentralized Organizations

Organizational Layers Span of Management Span of Management The number of subordinates who report to a particular manager A wide span of management exists when a manager directly supervises a very large number of employees A narrow span of management exists when a manager directly supervises only a few subordinates Organizational Layers The levels of management in an organization

Organizational Structure Line Structure The simplest organizational structure in which direct lines of authority extend from the top manager to the lowest level of the organization Line-and-Staff Structure A structure having a traditional line relationship between superiors and subordinates and also specialized managers – called staff managers – who are available to assist line managers Multidivisional Structure A structure that organizes departments into larger groups called divisions Matrix Structure A structure that sets up teams from different departments, thereby creating two or more intersecting lines of authority; also called a project-management structure

Groups and Teams Group Team Two or more individuals who communicate with one another, share a common identity, and have a common goal Team A small group whose members have complementary skills; have a common purpose, goals, and approach; and hold themselves mutually accountable

Committees and Task Forces A permanent, formal group that performs a specific task Task Force A temporary group of employees responsible for bringing about a particular change Typically come from across all departments and levels of an organization Membership is usually based on expertise rather than organizational position Occasionally, a task force may be formed from individuals outside a company

Teams Project Teams Quality-Assurance Teams (or Quality Circles) Groups similar to task forces which normally run their operation and have total control of a specific work project Product-Development Teams A specific type of project team formed to devise, design, and implement a new product Quality-Assurance Teams (or Quality Circles) Small groups of workers brought together from throughout the organization to solve specific quality, productivity, or service problems Self-Directed Work Teams (SDWT) A group of employees responsible for an entire work process or segment that delivers a product to an internal or external customer

Formal Communication Upward Communication Downward Communication Flows from lower to higher levels of the organization Includes information such as progress reports, suggestions for improvement, inquiries, and grievances Downward Communication Refers to the traditional flow of information from upper organizational levels to lower levels Typically involves directions, the assignment of tasks and responsibilities, performance feedback, and certain details about the organization’s strategies and goals Horizontal Communication Involves the exchange of information among colleagues and peers on the same organizational level, such as across or within departments Information informs, supports, and coordinates activities both within the department and with other departments Diagonal Communication When individuals from different units and organizational levels communicate With firms downsizing and increasing the use of work teams, workers are being required to communicate with others in different departments and on different levels to solve problems and coordinate work

Informal Communication Grapevine An informal channel of communication, separate from management’s formal, official communication channels Managers can utilize informal communications as a sounding device Can obtain valuable information from the grapevine that could improve decision making Some organizations use the grapevine to their advantage by floating ideas, soliciting feedback, and reacting accordingly