1. Chapter 10

2. What is organizing?  The process by which managers establish working relationships among employees to achieve goals

3. Define:  Organization Structure: formal system of task & reporting relationship showing how workers use resources  Organization Chart: a diagram that shows the arrangement of work positions within an organization

4.  What is the difference between the formal and informal structure of an organization?  Formal Structure: official structure of the organization  Informal Structure: the set of unofficial relationships among an organization’s members.

5. Discuss the pros and cons of the informal structure. PROSCONS Informal StructureDuring times of change, people benefit by access to interpersonal networks of emotional support & friendship that satisfy social needs Susceptible to rumour Benefit in task performance (informal learning) Carry inaccurate info Outsiders are left out (not part of shadow cabinet) Breed resistance to change and even divert work efforts from important objectives

6. What does it mean to say that, for a manager structure is:  a) Structure is a characteristic of the work setting  b) Structure is something to be created?

7. What is a functional structure?  Group together people with similar skills who perform similar tasks, share technical expertise, interests and responsibilities  Works well in small organizations that produce only one or a few products. Stable environment with predictable problems and change is limited

8. AdvantagesDisadvantages Functional StructureEconomies of Scale with efficient use of resources Difficult to pinpoint cost containment responsibilities, prod/srv quality, timeliness and innovation in change environment Task assignment consistent with expertise and training Growth of company exacerbates these issues. High-quality technical problem solving In-depth training & skill within function Functional Chimney problem: lack of communication, coordination & problem solving across functions. Clear career paths within function

9. 4 - 9 A functional structure is the bedrock of horizontal differentiation. It is the first “structure” that organizations adapt as they grow. Research and Development Sales and Marketing ManufacturingMaterials Management Finance CEO

10. What is departmentalization?  Another word for functional structure

11. Divisional form of departmentalization  Common in complex organizations, groups together people working on the same product, in same area with similar customers or on the same processes.

12. Product Divisions  Grouping activities around product groups  Examples  GM, Chevrolet, Cadillac  Coke, Sprite, Dasani  Pros: easy to coordinate all activities associated with a product, quicker decision making easy to assess performace  Cons: too much focus on own product, higher admin costs

13. 4 - 13 Product Division Structure Vice President Sales and Marketing Vice President Research and Development Vice President Materials Management CEO Vice President Finance Canned Soups Division PDM Frozen Vegetable Division PDM Frozen Entrees Division PDM Baked Goods Division PDM Centralized support functions Divisions 4-19

14. The Silo Effect  The main problem with a divisional structure is that grouping people together means you are isolating them from the other groups  This means that interdivisional communication is hard, and people tend to only focus on their own group

15. Matrix Structure  Attempt to avoid the Silo effect by inserting horizontal lines of communication into the structure  Ex: grouping people by function and customer division  Pros: better interdepartmental communication and coordination  Cons: more bosses to report to, requires well organized information systems

16. 4 - 16 Matrix Structure CEO Vice President Engineering Vice President Finance Vice President Purchasing Vice President Sales and Marketing Vice President Research and Development Product A Manager Product B Manager Product C Manager Product D Manager Product Team Two-boss employee

17. The disadvantages of a matrix structure:  Two-boss system is susceptible to power struggles,  can create task confusion & work priority conflict  time consuming team meetings  more expensive to add team leaders to matrix structure

18. What is the scalar principle?  There should be a clear and unbroken chain of command linking every person in the org with higher levels of authority

19. What changes are occurring to the traditional chain of command?  Businesses are trying to reduce Height of chain of command to a more streamline horizontal structure.  This improves communication, speeds decision making and increases contact with the customer.

20. What is the unity-of-command principle?  Each person should report to only one supervisor.

21. What changes are occurring to the traditional unity-of- command principle?  Orgs. Using more cross-functional teams and becoming customer conscious so employees will be reporting to more than one boss

22. Explain the difference between a wide and narrow span of control.  Wide span of control: manager supervises many people; flat structures have wide spans of control (few levels of management)  Narrow span of control; only a few people are under a manager’s immediate supervision, happens in Tall structures so they are more costly, less efficient, less flexible and less customer sensitive

23. Which one seems to be more popular and why?  Wider span of control is more popular and it eliminates and empowers managers  Individual managers are taking responsibility for larger numbers of subordinates who operate with less direct supervision.

24. What is delegation?  Distributing and entrusting work to others

25. Explain the authority-and- responsibility principle.  Authority should equal responsibility when work is delegated

26. Discuss the difference between centralization and decentralization.  Centralization: decisions made at top level of organization  Decentralization: dispersion of decision- making authority throughout all levels or the org.

27. Clarify the difference between personal and specialized staff in an organization.  Personal staff: provide technical expertise for other parts of the organization. Fire safety officer at bank  Specialized staff: “assistant –to” for high level managers

28. Explain the difference between a…  line organization: responsible for work activities that make a direct contribution to the organizations outputs: president, managers, dept supervisors  a line-staff organization: special technical skills used to support line workers; HR, accounting

29. Explain the difference between a…  Functional authority require others to do as you say within boundaries of staff expertise