Intro to Business
5-3
Organizational Structure
for Businesses
Designing an Effective
Business Organization
• Setting Direction
Mission Statement:
A statement that is short, specific written statement of
the reason a business exists and what it wants to
achieve
Our (LCS) mission statement
• Who can find this first?
• Where is it located?
Mission Statement (cont.)
• Next find the mission statement to any
company of your choice.
– What do you notice about it?
– How is it stated?
– What things does it talk about?
Terms
Goal: A precise statement of results the business
expects to achieve
Policies: Guidelines used in making consistent
decisions
Procedures: Descriptions of the way work is to
be done
Designing an Effective Business Organization
• Principles of Effective Organizations
Responsibility is the obligation to complete specific work.
Authority the right to make decisions about how
responsibility should be accomplished
Accountability is taking responsibility for the results
achieved
In an effective business, all managers and employees
have set responsibilities for their part of the job. They also
have the authority to make decisions. Finally, they must be
accountable for their actions and take responsibility.
Principles of an effective org.
• Unity of Command – there
•
is a clear reporting
relationship for all staff of a
business.
People need to know who
to report to and what to
do…if the relationships are
unclear, this creates
confusion in the work
environment
Who
approves
the budget?
Mr. Chris Rice
Superintendant
Assistant
Superintendent
Tamara Webster
Curriculum
Director
Tamara Webster
Principals
Assistant
Principals
Department
Chairs
Instructors
Finance Director
Span of Control
• The number of employees who are assigned
to a particular work task and manager.
• Balance of supervision
– Few employees per manager = > control
– Too many employees per manager = < control
• SOC can be greater for motivated,
responsible workers, less for inexperienced,
non-motivated workers
Organization Chart
• Diagram that shows
the structure of an
organization,
classifications of work
and jobs, and the
relationship among
those classifications.
Structures
• Functional – work is
arranged within main
business function such as
production, operations,
marketing, and human
resources
• Adv. – related people
work together
• Dis. – focused on only
one function vs. the
whole
• Matrix – work is
structured around specific
projects, products, or
customer groups
• Adv. – work with a variety
of people w/ different
skills
• Dis. – can be confusing,
needs good leadership[
Key Concepts
• Answer questions 1-3 Pg. 118
• Then create a SmartArt Graphic at the end
of the above questions.
– It can be ANY style you would like
– You need to organize the chart based on your
family structure. Think of like a family tree.
• This can include grandpas & grandmas, aunts &
uncles, etc.
• Who reports to who?