Chapter 8 Flashcards
Organization Chart
depicts the positions in the firm and the way they are arranged
Differentiation
the organization is composed of many units that work on different kids of tasks using different skills and work methods
Integration
differentiated units are put back together so that work is coordinated into an overall product
Division of Labor
the work of the organization is subdivided into smaller tasks with various individuals and units throughout the organization performing different tasks
differentiation
Specialization
refers to the fact that different people or groups often perform specific parts of the larger task
differentiation
Coordination
the procedures that link the various parts of an organization for the purpose of achieving the organization’s overall mission
integration
Authority
the legitimate right to make decisions and to tell other people what to do
3 Duties of Board of Directors
1: selecting, assessing, rewarding, and prehaps replacing the CEO
2: determining the firm’s strategic direction and reviewing financial performance
3: ensuring ethical, socially responsible, and legal conduct
Top Directors on the Board are called what?
Inside Directors
CEO
chief executive officer who occupies the top of the organizational pyramid, personally accountable to the board and to the owners for the organization’s performance
Top Management Team
comprised of CEO, president, chief operating officer, chief financial officer, and other key executives
Hierarchy
the authority levels of the organizational pyramid
Corporate Governance
the role of a corporation’s executive staff and board of directors in ensuring that the firm’s activities meet the goals of the firm’s stakeholders
Sarbanes-Oxley Act
imposed much tighter corporate governance rules (EX: CEOs and CFOs have to certify the accuracy of their firm’s financial statements personal)
subunits
subdivisions of an organization
Span of Control
the number of subordinates who report directly to an executive or supervisor
optimal #: 5 Bonaparte
12 btwn ‘08 and ‘12
Delegation
the assignment of new or additional responsibilities to a subordinate
Responsibility
the assignment of a task that an employee is supposed to carry out
Accountability
the expectation that employees will perform a job, take corrective action when necessary, and report upward on the status and quality of their performance
Steps in Delegation
1: Define the goal succinctly.
2: Select the person for the task.
3: Solicit the subordinate’s views about suggested approaches.
4: Give the subordinate the authority, time, and resources (people, money, equipment) to perform the assignment.
5: Schedule checkpoints for reviewing progress.
6: Follow through by discussing progress at appropriate intervals.
Centralized Organization
an organization in which high-level executives make most decisions and pass them down to lower levels for implementation
Decentralized Organization
an organization in which lower-level managers make important decisions
Line Departments
units that deal directly with the organization’s primary goods and services
Staff Departments
units that support line departments
Departmentalization
subdividing an organization into smaller subunits
Functional Organization
departmentalization around specialized activities such as production, marketing, and human resources
Divisional Organization
departmentalization that groups units around products, customers, or geographic regions
Matrix Organization
an organization composed of dual reporting relationships in which some employees report to two superiors - a functional manager and a divisional manager
unity-of-command principle
a structure in which each worker reports to one boss, who in turn reports to one boss
Network Organization
a collection of independent, mostly single-function firms that collaborate on a good or service
Dynamic Network
temporary arrangements among partners that can be assembled and reassembled to adapt to the environment
Broker
a person who assembles and coordinates participants in a network
Standardization
establishing common routines and procedures that apply uniformly to everyone
Formalization
the presence of rules and regulations governing how people in the organization interact
Coordination by Plan
interdependent units are required to meet deadlines and objectives that contribute to a common goal
Coordination by Mutual Adjustment
units interact with one another to make accommodations to achieve flexible coordination
Explain how differentiation and integration influence an organization’s structure.
Differentiation means that organizations have many parts. Specialization means that various individuals and units throughout the organization perform different tasks. The assignment of tasks to different people or groups often is referred to as the division of labor. But the specialized tasks in an organization cannot all be performed independently of one another. Coordination links the various tasks to achieve the organization’s overall mission. An organization with many specialized tasks and work units is highly differentiated; the more differentiated the organization is, the more integration or coordination is required.
Summarize how authority operates.
Authority is the legitimate right to make decisions and tell other people what to do. Authority is exercised throughout the hierarchy because bosses have the authority to give orders to subordinates. Through the day-to-day operation of authority, the organization proceeds toward achieving its goals. Owners or stockholders have ultimate authority.
Define the roles of the board of directors and the chief executive officer
Boards of directors report to stockholders. The board of directors controls or advises management, considers the firm’s legal and other interests, and protects stockholders’ rights. The chief executive officer reports to the board and is accountable for the organization’s performance.
Discuss how span of control affects structure and managerial effectiveness.
Span of control is the number of people who report directly to a manager. Narrow spans create tall organizations, and wide spans create flat ones. No single span of control is always appropriate; the optimal span is determined by characteristics of the work, the subordinates, the manager, and the organization.
Explain how to delegate effectively
Delegation—the assignment of tasks and responsibilities—has many potential advantages for the manager, the subordinate, and the organization. But to be effective, the process must be managed carefully. The manager should define the goal, select the person, solicit opinions, provide resources, schedule checkpoints, and discuss progress periodically.
Distinguish between centralized and decentralized organizations
In centralized organizations, most important decisions are made by top managers. In decentralized organizations, many decisions are delegated to lower levels.
Summarize ways organizations can be structured
Organizations can be structured on the basis of function, division (product, customers, or geographic), matrix, and network. Each form has advantages and disadvantages.
Identify the unique challenges of the matrix organization
The matrix is a complex structure with a dual authority organization. A well-managed matrix enables organizations to adapt to change. But it can also create confusion and interpersonal difficulties. People in all positions in the matrix—top executives, product and function managers, and two-boss employees—must acquire unique survival skills
Describe important integrative mechanisms
Managers can coordinate interdependent units through standardization, plans, and mutual adjustment. Standardization occurs when routines and standard operating procedures are put in place. They typically are accompanied by formalized rules. Coordination by plan is more flexible and allows more freedom in how tasks are carried out but keeps interdependent units focused on schedules and joint goals. Mutual adjustment involves feedback and discussions among related parties to accommodate each other’s needs. It is at once the most flexible and simple to administer, but it is time-consuming.
