Chapter 13 Flashcards
what is the division of labour what is the purpose?
Specialization of work, it improves efficiency
What is coordiniation of work? how is it organized
How the labour division is organized, it involves informal communication which can involve in larger firms liaison roles, integrator roles, and temporary teams, Formal hierarchy through direct supervision and legitimate power to manage others, and standardization
what are the 4 elements of organizational structure? How do they work
Span of control:
Number of people directly reporting to the next level (narrow span means few people report to said manager). Wide span of control is possible when other coordinating methods are in place, there is low interdependence and, there are routine tasks
A tall hierarchy is common in large companies
Centralization:
Formal decision-making process is held by a few people, usually at the top.
Example Salesman working with customer requires decentralization to be effect.
Formalization:
Standardizing behavior through rules, procedures, training, etc.
These organizations have less flexibility, discourage creativity, less efficiency, more job dissatisfaction, and focus on rules and procedures is emphasized
Departmentalization:
Three functions
-establish a chain of command
-Creates common mental models, measures of performance
-Encourage coordination through informal communication
A simple structure has
-small firms
-broad role definition
-centralized structure
Functional structure
employees are organized around specific knowledge or resources
What are the characteristics of an organic and mechanistic structure?
Organic:
wide span of control
decentralized
low formalization
Mechanistic:
Narrow span of control
centralized decision making
High formalization
What are the benefits and limitations of functional structures?
Benefits
-economies of scale
-supports professional identity and career paths
- easier supervision
Limitations:
-Higher dysfunctional conflict
-Care for department not organization
What are the benefits of divisional structures
What is Network structure, what are the benefits and limitations of this model?
alliance of firms creating a product/service
What is the loanable funds market?
The complex network of institutions, banks, specialized foreign exchange dealers, and government agencies, through which the currency of one country may be exchanged for that of another
What is the foreign exchange rate?
What is the difference between and real and nominal exchange rates?
the price at which each currency is sold
All prices are based on USD
$1 Cdn = $0.95 USD
1/.95 = $1.05
How many dollars do you need Canadian to be equivalent to 1 USD
Nominal: Posted rates
Real: not an inflation-adjusted exchange rate, it is the price level differences
Real = nominal exchange rate * (Price domestic/ Price foreign)
Do you want a high or low dollar?
Low
What are the impacts of having a low and high dollar?
Low Cdn$: Exporters benefit, and importers are hurt
High Cdn$: Exporters are hurt, and importers benefit
what happens to net exports if there is a low dollar? What happens to exports and imports if the real foreign exchange rate is >1?
It increases.
Expor
Why is controlling inflation important?
It controls domestic prices, allowing for more exports
What happens if net exports goes up?
It causes an increase in demand for Canadian dollars, increasing the Price of the Canadian dollar
What is Purchasing Power Parity?
A theory for forecasting the foreign exchange rate
Postulates that, in the long run, a given unit of currency in one country should be able to purchase the same number of goods/services domestically as it could in other countries
PPP = When purchasing power is the same in both countries
