1. Organizational Structure for Business
Chapter 5
Section 5-3

2. Designing an Effective Business Organization
A successful business needs
Skilled managers
Well-prepared and motivated employees
Adequate resources
Effective procedures
It begins with a clear purpose and the application of key principles for organizing work

3. Setting Direction
Mission Statement – is a short, specific written statement of the reason a business exists and what it wants to achieve
Goals
Policies
Procedures

4. Principles of Effective Organization
Responsibility, Authority, and Accountability
Unity of Command
Span of Control – the number of employees who are assigned to a particular work task and manager

5. Types of Organizational Structures

6. Types of Organizational Structures
Functional Organization Structure
Work is arranged within main business functions such as production, operations, marketing, and human resources
Advantage: people work with oters who have the same skills
Disadvantage:
people become more fouces on their specific function than on the success of the entire business
Little interaction with people working in other parts of the business

7. Types of Organizational Structures
Matrix Organizational Structure
Work is structured around a specific projects, products, or customer groups
Advantage
People work together who have varied backgrounds
Can be interesting and motivating
Disadvantage
Can be confusing and inefficient without effective leadership and communication