Test 3 Flashcards
(168 cards)
organizing
organizing plays a key role as one of the four functions of management shown in Figure 8.1. Think of it as the process of arranging people and resources so that they can work together to accomplish goals. Once goals are set in the planning phase, organizing puts people and resources in place to carry them out.
organization structure
When managers organize things, they arrange people and jobs into meaningful working relationships. They clarify who is to do what, who is in charge of whom, and how different people and work units are supposed to cooperate. This creates what we call the organization structure, a formal arrangement that links the various parts of an organization.
organization chart
You probably know the concept of structure best in terms of an organization chart. This is a diagram of positions and reporting relationships within an organization.5 A typical organization chart identifies major job titles and shows the hierarchy of authority and communication that links them. It describes the organization’s division of labor—people and groups performing different jobs, ideally ones for which they are well skilled.
formal structure
What You Can Learn from an Organization Chart. And indeed you can learn quite a bit from an organization chart, but only in respect to the formal structure.
informal structure
An important fact of organizational life is that behind every formal structure also lies an informal structure. You might think of this as a shadow organization made up of unofficial relationships between organizational members. Like any shadow, the shape of the informal structure will be blurry and change with time. You may have to work hard to understand its full complexities. Informal structures create helpful relationships for social support and task assistance, but they can be susceptible to rumors.
social network analysis
A tool known as social network analysis is one way of identifying the informal structures and their embedded social relationships that are active in an organization. It asks people to identify others whom they turn to for help most often, whom they communicate with regularly, and who energizes and de-energizes them.9 The results of a social network analysis are often described as a map with lines running from person to person according to frequency of communication and type of relationship maintained.
departmentalization
The process of arranging people by tasks and work groups is called departmentalization.13 The most basic forms are the functional, divisional, matrix, team, and network structures. As you read about each, don’t forget that organizations rarely use only one type of structure. Most often they will use a mixture, with different parts and levels having different structures because of their unique needs.
functional structures
What organizing logic do you see? These are functional structures where people having similar skills and performing similar tasks are grouped together into formal work units. The assumption is that if the functions are well chosen and each acts properly, the organization should operate successfully. In business, for example, typical functions include marketing, finance, accounting, production, management information systems, and human resources. But functional structures are not limited to businesses. The figure also shows how other organizations such as banks and hospitals may use them.
functional silos
Another concern is something that you might hear called the functional chimneys or functional silos problem. Shown in the small figure, this problem occurs as a lack of communication, coordination, and problem solving across functions. Instead of cooperating with one another, members of functional units sometimes end up either competing or selfishly focusing on functional goals rather than broader organizational objectives.
divisional structure
A second organizational alternative is the divisional structure shown in Figure 8.3. It groups together people who work on the same product, serve similar customers, and/or are located in the same area or geographical region.16
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product structures
Product structures group together jobs and activities devoted to a single product or service. They identify a common point of managerial responsibility for costs, profits, problems, and successes in a defined market area. An expected benefit is that the product division will be able to respond quickly and effectively to changing market demands and customer tastes. When Fiat took over Chrysler after it emerged from bankruptcy, CEO Sergio Marchionne said he wanted a new structure to “speed decision making and improve communication flow.” He reorganized into product divisions for the firm’s three brands—Chrysler, Jeep, and Dodge. Each was given its own chief executive and assigned responsibility for its own profits and losses.18 The “new” General Motors took the same approach and reorganized around four product divisions—Buick, Cadillac, Chevrolet, and GMC.19
Potential Advantages of Divisional Structures
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Expertise is focused on special products, customers, or regions.
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Better coordination exists across functions within divisions.
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There is better accountability for product or service delivery.
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It is easier to grow or shrink in size as conditions change.
geographical structure
Geographical structures, or area structures, group together jobs and activities in the same location or geographical region. Companies use geographical divisions when they need to focus attention on the unique product tastes or operating requirements of particular regions. As UPS operations expanded worldwide, for example, the company announced a change from a product to a geographical organizational structure. The company created two geographical divisions—the Americas and Europe/Asia—with each area responsible for its own logistics, sales, and other business functions.
customer structures
Customer structures group together jobs and activities that serve the same customers or clients. The major appeal of customer divisions is the ability to best serve the special needs of the different customer groups. This is a common structure for complex businesses in the consumer products industries. 3M Corporation, for example, structures itself to focus on such diverse markets as consumer and office, specialty materials, industrial, health care, electronics and communications, transportation, graphics, and safety. Customer structures are also useful in service companies and social agencies. Banks, for example, use them to give separate attention to consumer and commercial customers for loans; government agencies use them to focus on different client populations.
matrix structure
The matrix structure, often called the matrix organization, combines the functional and divisional structures to try to gain the advantages of each. This is accomplished by setting up permanent teams that operate across functions to support specific products, projects, or programs.20 Workers in a typical matrix structure, like Figure 8.4, belong to at least two formal groups at the same time—a functional group and a product, program, or project team. They also report to two bosses—one within the function and the other within the team.
cross funcitonal teams
The use of permanent cross-functional teams in matrix structures creates several potential advantages. These are teams whose members come together from different functional departments to work on a common task. Everyone, regardless of his or her departmental affiliation, is required to work closely with others and focus on team goals—no functional chimneys thinking is allowed. Expertise and information is shared to solve problems at the team level and make sure that things are accomplished in the best ways possible.
team structures
Many organizations adopt team structures that extensively use permanent and temporary teams to solve problems, complete special projects, and accomplish day-to-day tasks.22 As Figure 8.5 shows, these teams are often formed across functions and staffed with members whose talents match team tasks.23 The goals are to reduce the functional chimneys problem, tap the full benefits of group decision making, and gain as much creativity in problem solving as possible. At Polaroid Corporation, a research team developed a new medical imaging system in three years, when most had predicted it would take six. As one Polaroid executive noted, “Our researchers are not any smarter, but by working together they get the value of each other’s intelligence almost instantaneously.”24
How Do Team Structures Capture the Benefits of Cross-Functional Teams?
Team structures make extensive use of teams to improve organizations through better communication and problem solving across functions. Some teams are temporary, such as a project team that convenes to create a new product and then disbands when finished. Other teams are more permanent. They bring together members from different functions to work together on standing issues and common problems, such as quality control, diversity management, labor-management relations, or health care benefits.
Potential Advantages of Team Structures
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Team assignments improve communication, cooperation, and decision making.
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Team members get to know each other as persons, not just job titles.
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Team memberships boost morale and increase enthusiasm and task involvement.
network structure
a network structure links a central core of full-time employees with “networks” of relationships to outside contractors and partners that supply essential services. Because the central core is relatively small and the surrounding networks can be expanded or shrunk as needed, the potential advantages are lower costs, more speed, and greater flexibility in dealing with changing environments.25
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How Do Network Structures Take Advantage of Strategic Alliances and Outsourcing?
Organizations using network structures replace some full-time positions and functions with services provided by alliance partners and outsourcing contractors. In these structures, “core” employees perform essential operations at the center of a “network” that links them with a shifting mix of outside partners and contractors. The example in this figure shows that a small group of people can run a mail-order business in this manner. A lot of network activities are made easy and cost efficient by using the latest information technologies.
Potential Advantages of Network Structures
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Lower costs due to fewer full-time employees.
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Better access to expertise through specialized alliance partners and contractors.
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Easy to grow or shrink with market conditions.
virtual organization
virtual organization, it uses information technologies to operate a constantly shifting network of alliances.27 The goal is to use virtual networks to eliminate boundaries that traditionally separate a firm from its suppliers and customers and its internal departments and divisions from one another. The intense use of IT allows virtual relationships to be called into action on demand. When the work is done, they are disbanded or left idle until next needed.
organizational design
d organizational design. It deals with the choices managers make to configure their organizations to best meet the problems and opportunities posed by their environments.29 And because every organization faces unique challenges, there is no “one fits all” best design. Organizational design is a problem-solving activity where managers strive to get the best configuration to meet situational demands.