1. ****** 8-1 1-1 McGraw-Hill/Irwin Understanding Business, 8e © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. Nickels McHugh McHugh ** Adapting Organizations to Today’s Markets 8 CHAPTER * **

2. ****** 8-2 Fayol’s Principles of Organization Unity of CommandUnity of Command Hierarchy of AuthorityHierarchy of Authority Division of LaborDivision of Labor Subordination of Individual Interest to the General InterestSubordination of Individual Interest to the General Interest AuthorityAuthority Degree of CentralizationDegree of Centralization Clear Communication ChannelsClear Communication Channels OrderOrder EquityEquity Esprit de CorpsEsprit de Corps

3. ****** 8-3 Weber’s Organizational Principles Job DescriptionsJob Descriptions Written RulesWritten Rules Procedures, Regulations, PoliciesProcedures, Regulations, Policies Staffing/Promotions Based on QualificationsStaffing/Promotions Based on Qualifications

4. ****** 8-4 Organizational Structures Tall Organizations Many Layers of ManagementMany Layers of Management High Cost of ManagementHigh Cost of Management Narrow Span of ControlNarrow Span of Control Flat Organizations Current TrendCurrent Trend Creation of TeamsCreation of Teams Broad Span of ControlBroad Span of Control

5. ****** 8-5 Span of Control - Narrow Advantages More Control by Top ManagementMore Control by Top Management More Chances for AdvancementMore Chances for Advancement Greater SpecializationGreater Specialization Closer SupervisionCloser SupervisionDisadvantages Less EmpowermentLess Empowerment Higher CostsHigher Costs Delayed Decision MakingDelayed Decision Making Less Responsiveness to CustomersLess Responsiveness to Customers

6. ****** 8-6 Span of Control - Broad Advantages Reduced CostsReduced Costs More Responsiveness to CustomersMore Responsiveness to Customers Faster Decision MakingFaster Decision Making More EmpowermentMore EmpowermentDisadvantages Fewer Chances for AdvancementFewer Chances for Advancement Overworked ManagersOverworked Managers Loss of ControlLoss of Control Less Management ExpertiseLess Management Expertise

7. ****** 8-7 Advantages Skill DevelopmentSkill Development Economies of ScaleEconomies of Scale Good CoordinationGood Coordination Departmentalization by Function Disadvantages Lack of CommunicationLack of Communication Employees Identify with DepartmentEmployees Identify with Department Slow Response to External DemandsSlow Response to External Demands Narrow SpecialistsNarrow Specialists GroupthinkGroupthink

8. ****** 8-8 Line Organizations Advantages Clear Authority & ResponsibilityClear Authority & Responsibility Easy to UnderstandEasy to Understand One Supervisor Per EmployeeOne Supervisor Per EmployeeDisadvantages InflexibleInflexible Few Specialists for AdviceFew Specialists for Advice Long Line of CommunicationLong Line of Communication Difficult to Handle Complex DecisionsDifficult to Handle Complex Decisions

9. ****** 8-9 Line/Staff Organizations Line Personnel Formal AuthorityFormal Authority Make Policy DecisionsMake Policy Decisions Staff Personnel Advise Line PersonnelAdvise Line Personnel Assist Line PersonnelAssist Line Personnel

10. ****** 8-10 Matrix Organizations Advantages FlexibilityFlexibility Cooperation & TeamworkCooperation & Teamwork CreativityCreativity More Efficient Use of ResourcesMore Efficient Use of ResourcesDisadvantages Costly/ComplexCostly/Complex Confusion in LoyaltyConfusion in Loyalty Requires Good Interpersonal Skills & CooperationRequires Good Interpersonal Skills & Cooperation Not PermanentNot Permanent

11. ****** 8-11 Adapting to Change Restructuring for EmpowermentRestructuring for Empowerment Focusing on the CustomerFocusing on the Customer Creating a Change-Oriented Organizational CultureCreating a Change-Oriented Organizational Culture The Informal OrganizationThe Informal Organization