1. Asst. Prof. Dr. Serdar AYAN
Chapter 8
Organization, Teamwork, and Communication
Asst. Prof. Dr. Serdar AYAN
Define organizational structure and relate how organizational structures develop.
Describe how specialization and departmentalization help an organization achieve its goals.
Distinguish between groups and teams and identify the types of groups that exist in organizations.
Determine how organizations assign responsibility for tasks and delegate authority.
Compare and contrast some common forms of organizational structure.
Describe how communication occurs in organizations.
Analyze a business’s use of teams. 1

2. Organization, Teamwork, & Communication
Importance of Organizational Structure
Structure Impacts:
Decision making
Costs & efficiencies
Overall success and sustainability
Growth requires organizing—the structuring of human, physical, and financial resources to achieve objectives in an effective and efficient manner. 2

3. Organization, Teamwork & Communication
Developing Organizational Structure
Organizational Structure – The arrangement or relationship of positions within an organization.
Structure Develops –
Managers assign work tasks to individuals & groups
Coordination of diverse activities to attain objectives
What the Organizational Chart Shows –
Organizational structure
Chain of command (lines of authority)
Other relationships (staff, committees, etc.)
Lines of communication
Structure is the arrangement or relationship of positions within an organization.
An organization’s structure develops when managers assign work tasks and activities to specific individuals or work groups and coordinate the diverse activities required to reach the firm’s objectives.
Organizational structure is depicted through organizational charts—visual displays of structure, lines of authority (chain of command), staff relationships, etc. 3

4. Organizational Structure
The Evolution of a Clothing Store
Phases 1, 2, and 3

5. Assigning Tasks Specialization Why Specialize? Overspecialization
Managers divide the labor into small, specific tasks and assign to employees to accomplish individual tasks.
Why Specialize?
Efficiency
Ease of training
Activities too numerous
In any organization, activities must be coordinated, assigned to work groups, and controlled; this requires specialization and departmentalization.
Specialization
After identifying all activities that must be accomplished, managers then break these activities down into specific tasks that can be handled by individual employees.
Specialization is the division of labor into small, specialized tasks and the assignment of single tasks to employees.
The rationale for specialization is efficiency.
Specialization minimizes the time lost when workers shift from one job to another.
Specialization may occur when activities to be performed are too numerous for one person to handle.
Overspecialization can have negative consequences: Employees may become bored and dissatisfied with their jobs, leading to poor work quality, injuries, and high employee turnover.
Overspecialization
Employees become bored
Job dissatisfaction
Poor quality work
Increased injuries
Increased employee turnover 5

6. Organizational Structure – Assigning Tasks
Departmentalization
Grouping of jobs into working units (departments, units, groups, divisions)
Departmentalization is the grouping of jobs into working units usually called departments, units, groups, or divisions.
Functional departmentalization
Product departmentalization
Geographical departmentalization
Customer departmentalization
Departmentalization is the grouping of jobs into working units that are usually called departments, units, groups, or divisions.Most companies use more than one departmentalization plan to enhance productivity. 6

7. Functional Departmentalization
Functional departmentalization involves grouping jobs according to business function such as production, marketing, and finance.
Advantages include supervision by experts and easier supervision of employees.
The biggest disadvantage is that decision making involving more than one department may be slow.
This form is common in small organizations. 7

8. Product Departmentalization
Product departmentalization is the grouping of jobs around the firm’s products.
Some advantages are the coordination of all activities related to the product and the simplification of the decision-making process.
The disadvantages include duplicating specialized functions and emphasizing one product rather than overall organizational objectives. 8

9. Geographical Departmentalization
Geographical departmentalization is the grouping of jobs by geographical location, such as state, region, country, or continent.
An advantage is that organizations can respond to the unique requirements of a geographic area.
Grouping by location can require a large administrative staff and control system. 9

10. Customer Departmentalization
Customer departmentalization is the grouping of jobs around the needs of various customers. Like geographical departmentalization, customer departmentalization does not focus on the organization as a whole, and requires a large staff to coordinate the operations of the various groups. 10

11. Assigning Responsibility
Delegation creates a responsibility
Delegation of authority
Assigning responsibility
Employee accountability
Delegation of authority is not only giving tasks to employees but also empowering them to make commitments, use resources, and take whatever actions are necessary to carry out those tasks.
Delegation gives a responsibility, or obligation, to employees to carry out assigned tasks satisfactorily.
The principle of accountability means that subordinates who accept an assignment and the authority to carry it out are answerable to a superior for the outcome.
The process of delegation establishes a pattern of relationships and accountability between superior and subordinates.

12. Centralization Centralized organizations Decentralized organizations
Authority is concentrated at the top level.
Decentralized organizations
Decision-making authority is delegated as far down the chain of command as possible.
The extent to which authority is delegated throughout an organization determines its degree of centralization.
In a centralized organization, authority is concentrated at the top level, and very little decision‑making authority is delegated to lower levels.
Organizations tend to be more centralized when the decisions to be made are risky and low-level managers are not highly skilled in decision making.
Overcentralization can cause problems in part because it may take longer for the organization as a whole to implement decisions and to respond to changes and problems on a regional scale.
A decentralized organization is one in which authority is delegated as far down the chain of command as possible.
Decentralization is characteristic of organizations that operate in complex and unpredictable environments.
Lower-level managers who interact with the external environment often develop a good understanding of it and are able to react quickly to changes.
The delegation of authority to lower levels of managers may increase productivity.
Decentralization requires that lower-level managers have strong decision-making skills.
In recent years, the trend has been toward more decentralized organizations.

13. Span of Management
Span of Management – the number of subordinates who report to a particular manager.
Span of management refers to the number of subordinates who report to a particular manager. There is no simple guideline as to how many subordinates a managers should manage, but experts suggest:
Top managers should not directly supervise more than four to eight people.
Lower-level managers, who supervise relatively routine tasks, can manage a much larger number of subordinates.

14. Span of Management
A wide span of management exists when a manager directly supervises a very large number of employees.
A narrow span of management exists when a manager directly supervises only a few subordinates.
A wide span of management exists when a manager directly supervises a large number of employees.
A narrow span of management exists when a manager directly supervises only a few subordinates.
A narrow span is appropriate when superiors and subordinates are not close together, the manager has many other responsibilities, frequent interaction is needed, and problems are common.
A wide span is appropriate when superiors and subordinates are close together, the manager has few other responsibilities, a low level of interaction is needed, few problems arise, subordinates are competent, and operating procedures are in existence.
Narrow spans are typical in centralized firms, while wide spans are more common in decentralized firms.

15. Span of Management – Organizational layers
Organizational layers are the levels of management in an organization.
A company with many layers is considered tall; its span of management is narrow. Administrative costs are usually higher and communications slower.
Organizations with few layers are considered flat and have wide spans of management. In this type of structure, managers perform more administrative duties and spend more time supervising and working with subordinates.

16. Span of Management – Organizational layers
Companies that decentralize flattened their structures and widened their spans of management.

17. Groups & Teams in Organizations
Group – two or more individuals who communicate with one another, share a common identity, and have a common goal
Regardless of how they are organized, most of the essential work of business occurs in individual work groups and teams.
A group has been defined as two or more individuals who communicate with one another, share a common identity, and have a common goal.

18. Groups & Teams in Organizations
Team – a small group whose members have complementary skills, have a common purposes, goals, and approach; hold themselves mutually accountable.
A team is a small group whose members have complementary skills; a common purpose, goals, and approach; and who hold themselves mutually accountable.
All teams are groups, but not all groups are teams.

19. Differences between Groups & Teams
Work groups emphasize individual products, individual accountability, and even individual leadership; work teams share leadership roles, have both individual and mutual accountability, and create collective work products.
Differences between Groups & Teams

20. Groups & Teams Teams Project teams Product development teams
Quality assurance teams (quality circles)
Self-directed work teams (SDWT)
Teams have the advantages of being able to pool members’ knowledge and skills, creating more solutions to problems than can individuals, and enhancing employee acceptance of and commitment to team goals.

21. Communications in Organizations
Communication within an organization can flow in a variety of directions and from a number of sources, each using both oral and written forms of communication.
Alternatives to face-to-face communication are increasing due to technological advances.

22. Communications in Organizations
Formal Communication – flow of communication within the formal organizational structure as depicted on organizational charts.
Upward communication
Downward communication
Horizontal communication
Diagonal communication
Formal channels of communication are intentionally defined and designed by the organization.
They represent the flow of communication within the formal organizational structure as shown on organizational charts.
Upward communication flows from lower to higher levels of the organization and includes such information as progress reports, suggestions for improvement, inquiries, and grievances.
Downward communication refers to the traditional flow of information from upper organizational levels to lower levels. This type of communication involves directions, assignment of tasks and responsibilities, or performance feedback.
Horizontal communication involves the exchange of information among colleagues and peers on the same organizational level, such as across and within departments. Horizontal communication informs, supports, and coordinates activities both within the department and with other departments.
Diagonal communication occurs when individuals from different units and organizational levels communicate.

23. Communications in Organizations
Informal Communication – separate from management’s formal, official communication channels.
Grapevine
Friendships and other nonwork, social relationships comprise the informal organization of a firm, and their impact can be great.
The most significant informal communication occurs through the grapevine, an informal channel of communication, separate from management’s formal, official communication channels.
Information passed along the grapevine may relate to the job or organization, or it may be gossip and rumors unrelated to either.
Managers who understand how the grapevine works can utilize it by feeding it facts to squelch rumors and incorrect information. Astute managers try to identify informal leaders to gain their support for the organization’s objectives. Managers can use the grapevine to their advantage, feeding it facts to squelch rumors and incorrect information.