Chapter 9 Flashcards
What is job specialization?
Dividing tasks into smaller jobs
What is departmentalization?
The process of setting up individual departments to do specialized tasks
What are economies of scale?
Refers to the fact that companies can reduce their production costs if they can purchase raw materials in bulk
What principles did organizational theorist Henri Fayol introduce?
- Unity of Command - one boss
- Hierarchy of Authority - all workers know who to report to
- Division of Labour - functions divided by specialization
- Subordination of Individual Interests to General Interests - workers are a team
- Authority - managers give orders
- Degree of Centralization
- Clear Command Channels
- Order - materials and people should be in their proper location
- Equity - manager should treat employees with respect
What did sociologist Max Weber promote?
- The pyramid-shaped organization structure
- Put trust in managers so that employees have less decision making to do
- Emphasized job descriptions, written rules, consistent procedures and promotions based on qualifications
- He was in favour of bureaucracy (a middle manager whose function was to implement top management’s orders)
What is the chain of command?
The line of authority that moves from the top of hierarchy to the lowest level
What is bureaucracy?
The term used for an organization with many layers of managers
What is the difference between centralized and decentralized authority?
- Centralized authority - occurs when decision making authority is maintained at the top level of management at the company’s headquarters
- Decentralized authority - occurs when decision-making authority is delegated to lower-level managers and employees who are familiar with local conditions
What is the span of control?
Refers to the optimum number of subordinates a manager supervises or should supervise
What are the advantages and disadvantages of departmentalization?
Advantages:
- Employees can develop skills in depth
- The company can achieve economies of scale
- Employees can coordinate work within the function
Disadvantages
- Departments may not communicate well
- Employees may identify with their department’s goals rather than the organization’s
- The company’s response to external changes may be slow
- Department members may engage in groupthink
What are the 4 ways to structure an organization?
- Line Organizations
- Line and Staff Organizations
- Matrix-Style Organizations
- Self-Managed Teams
What is a line organization?
Authority and communication running from top to the bottom of the organization
- Everyone reports to one supervisor
What are staff personnel?
Advise and assist line personnel in meeting their goals
What are line personnel?
Responsible for directly achieving organizational goals and include production, distribution and marketing people
What is a matrix-style organization?
Specialists from different parts of the organization work temporarily on specific projects but still remain part of the line-staff structure
