1. Lecture 13

2. Organizing The Business Enterprise
Chapter 7
Organizing The
Business Enterprise

3. Chapter Outline What is Organizational Structure?
The Building Blocks of Organizational Structure
Establishing The Decision-Making Hierarchy
Basic Forms of Organizational Structure
Informal Organization

4. Organizational Structure Influenced By:
Jobs To Be Done
How Jobs Relate To One Another

5. Determinants Of Organization
Purpose
Mission
Strategy (e.g a rapid growing firm VS a stable firm
Size, technology and changes in environment also affect structure

6. Organization Chart
Use charts to clarify structure and to show where employee fit
Solid lines defines the chain of command or reporting relationships
Large organizations more complex organizational charts

7. Organization Chart

8. Chain Of Command

9. Building Blocks Of Structure
First step in developing structure involves two activities
Specialization- Specific Jobs To Specific People
Departmentalization
Group Jobs In Logical Units
Profit Center

10. Building Blocks Of Structure
First step in developing structure involves two activities
Specialization- Specific Jobs To Specific People
Identifying jobs that needs to be done and identifying people who will do them
Small VS big organizations

11. Building Blocks Of Structure
Departmentalization
Group Jobs In Logical Units
Profit Center

12. Types Of Departmentalization
Customer
Product
Process
Geographic
Functional

13. Customer Departmentalization

14. Product Departmentalization

15. Process Departmentalization

16. Geographic Departmentalization

17. Functional Departmentalization

18. Multiple Forms Of Departmentalization

19. Hierarchy For Decisions
Goal is to figure out how to structure and stabilize the firm so that every one works together
Assign Tasks
Responsibility
Authority
Perform Tasks
Delegation
Accountability
Distribute Authority

20. Small Business Delegation Fear
Employee Can’t Do As Well
Something Will Go Wrong
No Long-Range Plan because you do everyday fire fighting
Not Up-To-Date On Industry Trends & Competitive Products
Solution: do not run show independently

21. Big Business Delegation Fear
Subordinate Doesn’t Know Job
Subordinate “Show Manager Up”
Desire To Retain Control
Inability To Effectively Delegate
Solution:
Cannot do everything themselves
Train subordinates if they cant perform
Subordinate performs well it will reflect favorably

22. Hierarchy For Decisions
Goal is to figure out how to structure and stabilize the firm so that every one works together
Assign Tasks
Responsibility
Authority
Perform Tasks
Delegation
Accountability
Distribute Authority