1. Introduction to Business (BUS 201) 8-1 1-1 8 CHAPTER

2.  Organizing or Structuring: Determine what work needs to be done. ◦ Division of Labor: Divide the tasks among others. ◦ Job Specialization: Dividing the tasks into smaller jobs.  Departmentalization: The process of setting up individual departments to do specialized tasks.  Assign Authority & Responsibility: ◦ Organization Chart/Organogram  Allocating Resources:  Assigning Specific Tasks:  Establishing Procedures: 8-2

3.  Centralized Authority: An organization structure in which decision-making authority is maintained at the top level of management.  Decentralized Authority: An organization structure in which decision-making authority is delegated to lower-level managers who are more familiar with local conditions than headquarters management could be.  Span of Control: The optimal number of subordinates a manager supervises or should supervise. 8-38-3

4. Advantages  Greater Top- Management Control  More Efficiency  Simpler Distribution System  Stronger Brand/Corporate Image Disadvantages ◦ Less Responsiveness to Customers ◦ Less Empowerment ◦ Interorganizational Conflict ◦ Lower Morale Away from Headquarters 8-4

5. Advantages ◦ Better Adaptation to Customer Wants ◦ More Empowerment of Workers ◦ Faster Decision Making ◦ Higher Morale Disadvantages  Less Efficiency  Complex Distribution System  Less Top-Management Control  Weakened Corporate Image 8-5

6.  Tall organization: An organizational structure in which the pyramidal organization chart would be quite tall because of the various levels of management.  Flat organization: An organization structure that has few layers of management and a broad span of control. 8-6

7. Tall Organizations  Many Layers of Management  High Cost of Management  Narrow Span of Control Flat Organizations ◦ Current Trend ◦ Creation of Teams ◦ Broad Span of Control 8-7

8. Advantages  More Control by Top Management  More Chances for Advancement  Greater Specialization  Closer Supervision Disadvantages  Less Empowerment  Higher Costs  Delayed Decision Making  Less Responsiveness to Customers 8-8

9. Advantages  Reduced Costs  More Responsiveness to Customers  Faster Decision Making  More Empowerment Disadvantages  Fewer Chances for Advancement  Overworked Managers  Loss of Control  Less Management Expertise 8-9

10.  Departmentalization: The dividing of organizational functions into separate units. 8- 10

11. 8- 11 Advantages  Skill Development  Economies of Scale  Good CoordinationDisadvantages 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

12.  By Product  By Function  By Customer Group  By Geographic Location  By Process 8- 12

13.  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.  Line-and-staff organization: An organization that has both line and staff personnel. 8- 13

14.  Line personnel: Employees who are part of the chain of command that is responsible for achieving organizational goals.  Staff personnel: Employees who advise and assist line personnel in meeting their goals. 8- 14

15. Advantages ◦ Clear Authority & Responsibility ◦ Easy to Understand ◦ One Supervisor Per Employee Disadvantages ◦ Inflexible ◦ Few Specialists for Advice ◦ Long Line of Communication ◦ Difficult to Handle Complex Decisions 8- 15

16. Line Personnel ◦ Formal Authority ◦ Make Policy Decisions Staff Personnel ◦ Advise Line Personnel ◦ Assist Line Personnel 8- 16

17.  Groups of employees from different departments who work together on a long-term basis. Self-managed means they are empowered to make decisions without management approval.  Cross functional team works better when it includes customers, suppliers, and distributors too. 8- 17

18.  Organizational (Corporate) Culture: Widely shared values within an organization that provide unity and cooperation to achieve common goals. ◦ Myths, stories, traditions, values etc are part of corporate culture 8- 18

19. That’s All! Thank you!