1. 5-3 Organizational Structure for Businesses
Intro to Business
5-3 Organizational Structure for Businesses

2. Objectives
Understand important principles in designing an effective organization
Compare alternative organizational structures for businesses.

3. Designing an Effective Business Organization
Setting Direction
Mission Statement: A statement that is short, specific written statement of the reason a business exists and what it wants to achieve

4. Terms
Goal: A precise statement of results the business expects to achieve
Policies: Guidelines used in making consistent decisions
Procedures: Descriptions of the way work is to be done

5. Designing an Effective Business Organization
Principles of Effective Organizations
Responsibility is the obligation to complete specific work.
Authority the right to make decisions about how responsibility should be accomplished
Accountability is taking responsibility for the results achieved
In an effective business, all managers and employees have set responsibilities for their part of the job. They also have the authority to make decisions. Finally, they must be accountable for their actions and take responsibility.

6. Principles of an effective org.
Unity of Command – there is a clear reporting relationship for all staff of a business.
People need to know who to report to and what to do…if the relationships are unclear, this creates confusion in the work environment
Who approves the budget?

7. PPS

8. Span of Control
The number of employees who are assigned to a particular work task and manager.
Balance of supervision
Few employees per manager = > control
Too many employees per manager = < control
SOC can be greater for motivated, responsible workers, less for inexperienced, non-motivated workers

9. Organization Chart
Diagram that shows the structure of an organization, classifications of work and jobs, and the relationship among those classifications.

10. Structures
Functional – work is arranged within main business function such as production, operations, marketing, and human resources
Adv. – related people work together
Dis. – focused on only one function vs. the whole
Matrix – work is structured around specific projects, products, or customer groups
Adv. – work with a variety of people w/ different skills
Dis. – can be confusing, needs good leadership[

11. Key Concepts Answer questions 1-3 Pg. 118 Ch. Review Pg. 121 #s 10-23
Write out question with answer circled or underlined.