Organizational Structure & Processess Flashcards
Basic approaches to organizational design:
1) Traditional approach
2) Behavioral approach
3) Contingency approach
Emphasizes such factors as authority, responsibility, unity of command, tasks, hierarchy, and a narrow span of control.
Traditional approach
Developed more recently. It emphasizes the limits, strengths, availability, and interests of the people available.
Behavioral approach
Designs the organization for its unique situation.
Contingency approach
Is a basic principle of structural design. It is the number of subordinates who report directly to the manager.
Span of control
Span of control can be:
1) Flat structures
2) Tall structures
Has relatively few levels from top to bottom. They have wide spans of control.
Flat structures
Have many levels between top and bottom. They have relatively narrow spans of control.
Tall structures
Principle is emphasized in traditional organizations. The authority and responsibility of the parties should be clearly defined, and every subordinate should report only to one superior.
Unity of command
The traditional approach views line activities as those directly responsible for the:
1) Primary function,
2) Product, or
3) Service of the organization
The traditional approach staff members provide:
Supporting technical expertise
Potential line and staff conflicts include the following:
1) A staff member with vaguely defined authority from a chief executive may effectively undermine line managers.
2) Line managers may have no authority to influence staff behavior when it is inconsistent with the achievement of objectives.
3) Setting staff members apart from line responsibilities can lead to thinking in a vacuum and suggestions by staff that are inappropriate or not feasible.
4) Excessive staff activity may violate the principle of unity of command.
Line-staff conflicts may be minimized by
1) Clearly defining areas of activity and authority and
2) Sharply defining the nature and place of line and staff.
The reporting relationships of an entity are in a grid or matrix. This structure allows authority to flow both vertically and horizontally. Thus, employees have dual reporting relationships, generally to a functional manager and a product manager.
Matrix structure
Benefits of matrix structure include the following:
1) Resources can be used more efficiently,
2) Information flows better,
3) Employees’ motivation and commitment are enhanced, and
4) Management can respond to changing market and technical requirements rapidly.
Disadvantages of matrix structure include:
1) Confusion,
2) Power struggles, and
3) Excessive overheard
Is most likely to succeed in stable and certain environments.
Mechanistic organization (structure)
This structure has the following attributes:
1) Tight controls,
2) Extensive division of labor,
3) High formalization, and
4) Centralization
The information network is limited, and employees rarely participate in decision making.
Mechanistic structure
Is decentralized and how low complexity and formalization. It has an extensive information system, and employees participate in decision making. It tends to be flexible and adaptive.
Organic structure
Common types of departmentation by:
1) Function,
2) Territory,
3) Product or service,
4) Customer,
5) Project, and
6) Work flow process
Is that neither centralization nor decentralization is good or bad in itself. The degree to which either is stressed depends upon a given situation.
Contingency view
Decisions cannot be decentralized:
1) To those who do not have necessary information;
2) To people who do not have the training, experience, knowledge, or ability to make them; or
3) When decisions are important to the survival of the organization
Decisions requiring a quick response should be decentralized to those
Near the activity
Decentralization has what affect influence on morale?
Positive
Pricing strategies for new products include:
1) The skimming pricing strategy and
2) The penetration pricing strategy
Sets an initial high price and then slowly lowers the price to make the product available to a wider market.
Skimming pricing strategy
Sets a low price to increase sales and market share. This strategy generates greater sales and establishes the new product in the market more quickly.
Penetration pricing strategy
The supply chain consists of flows from sources of:
1) Raw materials,
2) Components,
3) Finished goods,
4) Services, or
5) Information through intermediaries to ultimate consumers.
Sharing of information and coordination among the organizations in the supply chain can have what on inventories?
Avoid the bullwhip effect
Sharing of information about sales, inventory, pricing, advertising campaigns, and sales forecasts by all functions and organizations in the supply chain
Moderates demand uncertainty for all parties
Is a series of interdependent marketing institutions that facilitate the transfer of a product from producer to ultimate consumer or industrial user.
Distribution channel
A distribution channel creates what for sellers and buyers?
1) Place,
2) Time, and
3) Possession utility
Describes the relationship between the entities that make up the distribution system.
Distribution channel structure
Types of distribution channel structure:
1) Conventional distribution system,
2) Vertical distribution system,
3) Horizontal distribution system, and
4) Multichannel system
Consist of one or more independent producers, wholesalers, and retailers, each of which is a separate profit-maximizing business.
Conventional distribution systems
Producers, wholesalers, and retailers act as a unified system.
Vertical distribution systems
Consist of tow or more entities at one level of the channel working together to exploit new opportunities, such as the introduction of ATMs in supermarkets.
Horizontal distribution systems
A single entity sets up two or more channels to reach on or more customer segments.
Multichannel system
Inventory includes:
1) Forward placement,
2) Backward placement, and
3) Scheduling movements of freight.
Puts inventory close to final customers at a distribution center (warehouse), wholesaler, or retailer. This option minimizes transportation costs and delivery times.
Forward placement
Involves keeping inventory at the factory or, in the extreme case, maintaining no inventory at all.
Backward placement
Balances purchasing, production, customer response times, shipping costs, and selection of routes and carriers.
Scheduling movements of freight
Types of business process analysis techniques:
1) Process analysis,
2) Workflow,
3) Linear programming,
4) Theory of constraints (TOC), and
5) Business process reengineering
Studies the means of producing a product or service for the purpose of lowering costs and increasing effectiveness and efficiency while producing items of appropriate quality.
Process analysis
Is the sequence of steps needed to accomplish a task, including consideration of any necessary physical objects.
Workflow
Is a form of workflow analysis. An organization can improve throughput by carefully designing the way inputs arrive at workstations and how they are processed upon arrival.
Queuing theory
Optimizes a linear function subject to certain constraints.
Linear programming
The objective of linear programming is to choose
The best solution from a potentially infinite number of possibilities
Improves operating income when a manufacturing process has one or more bottleneck operations.
Theory of constraints (TOC)
Involves process innovation and core process redesign. Instead of improving existing procedures, it finds new ways of doing things.
Business process reengineering
