Chapter 8: Adapting Organizations to Today's Markets Flashcards
Economies of scale
The situation in which companies can reduce their production costs if they can purchase raw materials in bulk; the average cost of goods goes down as production levels increase
Hierarchy
A system in which one person is at the top of the organization and there is a ranked or sequential ordering from the top down of managers who are responsible to that person
Chain of command
The line of authority that moves from the top of a hierarchy to the lowest level
Bureaucracy
An organization with many layers of managers who set rules and regulations and oversee all decisions
Centralized authority
AN organization structure in which decision-making authority is maintained at the top level of management at the company headquarters
Decentralized authority
An organization structure in which decision-making authority is delegated to lower-level managers more familiar with local conditions than headquarters management could be
Span of control
The optimum number of subordinates a manager supervises or should supervise
Tall organization structure
An organizational structure in which the pyramidal organization chart would be quite tall because of the various levels of management
Flat organization structure
An organization structure that has few layers of management and a broad span of control
Departmentalization
The dividing of organizational functions into separate units
Line organization
An organization that has direct two-way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with all people reporting to only one supervisor
Line personnel
Employees who are part of the chain of command that is responsible for achieving organizational goals
Staff personnel
Employees who advise and assist line personnel in meeting their goals
Matrix organization
An organization in which specialists from different parts of the organization are brought together to work on specific projects but still remain part of a line-and-staff structure
Cross-functional self-managed teams
Groups of employees from different departments who work together on a long-term basis
Networking
Using communications technology and other means to link organizations and allow them to work together on common objectives
Real time
The present moment or the actual time in which something takes place
Transparency
A concept that describes a company being so open to other companies working with it that the once-solid barriers between them become see-through and electronic info is shared as if the companies are one.
Virtual corporation
A temporary networked organization made up of replaceable firms that join and leave as needed
Benchmarking
Comparing an organization’s practices, processes, and products against the world’s best
Outsourcing
Assigning various functions, such as accounting, production, security, maintenance, and legal work, to outside organizations
Restructuring
Redesigning an organization so that it can more effectively and efficiently serve its customers
Core competencies
Those functions that the organization can do as well as or better than any other organization in the world
Inverted organization
An organization that has contact people at the top and the chief executive officer at the bottom of the organization chart
Reengineering
The fundamental rethinking and radical redesign of organizational processes to achieve dramatic improvements in critical measures of performance
Organizational (or, corporate) culture
Widely shared values within an organization that provide unity and cooperation to achieve common goals
Formal organization
The structure that details lines of responsibility, lines of authority, and position; that is, the structure shown on organization charts
Informal organization
the system of relationships and lines of authority that develops spontaneously as employees meet and form power centers; that is, the human side of the organization that doesn’t appear on any organization chart
