1. Goals Understand important principles in designing an effective organization Determine when each form of business ownership is most appropriate Recognize other specialized business ownership forms

2. The Main Idea This lessons introduces the major forms of business ownership and outlines the strengths and limitations of each

3. Organizational Structure for Businesses Mission Statement—short, specific written statement of the reason a business exists and what it wants to achieve Goal—precise statement of results the business expects to achieve

4. Policies—guidelines used in making consistent decisions Procedures—descriptions of the way work is to be done.

5. Principles of Effective Organization Responsibility—obligation to complete specific work Authority—right to make decisions about how responsibilities should be accomplished Accountability—taking responsibility for the results achieved Unity of Command—clear reporting relationship for all staff Span of Control—the number of employees who are assigned to a particular work task and manager

6. Types of Organizational Structures Organization chart—diagram that shows the structure of an organization, classification of work and jobs, and relationships among those classifications Functional organizational structure-work is arranged within main business functions (production, operation, marketing, finance) Matrix organizational structure—work is structured around specific projects, products, or customer groups