Chapter 8: Organizational Structure Flashcards
Organization Chart
depicts the positions in the firm and the way they are arranged.
Differentiation
organization is composed of many units that work on different kinds 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
work of the organization is subdivided into smaller tasks.
Specialization
refers to the fact that different people or groups often perform specific parts of the larger task.
Coordination
refers to the procedures that link the various parts of the organization to achieve the organization’s overall mission.
Authority
the legitimate right to make decisions and to tell people what to do.
The Vertical Structure
an organization where management goes vertical
hierarchy
the authority levels of the organizational pyramid.
corporate governance: term describing the oversight of the firm by its executive staff and board of directors.
Subunits
subdivisions of an organization
Span of control
number of subordinates who report directly to an executive or supervisor.
delegation
assignment of the authority and responsibility to a subordinate at a lower level
responsibility
that person is assigned a task that he or she is supposed to carry out
accountability
means the subordinate’s manager has the right to expect the subordinate to perform the job and the right to take corrective action if the subordinate fails to do so.
centralized organization
important decisions made at the top
decentralized organization
more decisions are made at lower levels
Horizontal Structure
departmentalized: as tasks become increasingly complex, the organization must be subdivided into smaller units or departments.
line departments
those that have the responsibility for the principal activities of the firm.
staff departments
those that provide specialized or professional skills that support line departments.
departmentalization
subdividing an organization into smaller subunits
functional organization
jobs (and departments) are specialized and grouped according to business functions and the skills they require: production, marketing, human resources, research and development, finance, accounting, and so forth.
divisional organization
departmentalization that groups units around products, customers, or geographic regions.
matrix organization
hybrid form of organization in which functional and divisional forms overlap.
managers and staff personnel report to two bosses - a functional manager, and a divisional manager.
unity-of-command principle
states that a person should have only one boss
