Ch 7 PPT 2013

Organizational Structures
Any business that employs more than one
person needs a management plan.
Management plan = divides a company into
different departments run by different
Direct workers
Coordinate activities
Solve provlems
Organizational chart = shows how a business is
structured and who is in charge of whom.
Different ways to organize management:
Line authority = managers at the top of the line
are in charge of those beneath them, and so on.
This is centralized organization = puts authority
in one place, with top management.
Decentralized organization = gives authority to a
number of different managers to run their own
Example: you might have one person run the production
department and another person in charge of marketing.
Formal Structure
Departmentalization = divides responsibility among
specific units, or departments.
Departments can be organized by what they do, what
they make, or by region.
Informal Structure
A lot of small businesses
Don’t need a lot of managers
1. Explain the organizational structures of business.
Businesses can be structured formally or informally.
A formal structure is usually departmentalized. An
organization can also be centralized, with authority
placed at the top, or decentralized, with authority
given to a number of different managers.
2. Give an example of departmentalization.
Sales, marketing, inventory, production, etc.
Every aspect of business has to be managed from setting
goals to meeting them.
Most businesses have three levels of managers:
Top-level managers
Middle managers
Responsible for setting goals and planning for the
future. Titles like president, vice president, and chief
executive officer (CEO).
Carry out decisions of top management. Titles like
plant manager, regional manager, and department
Operational managers
Responsible for daily operations of the business. Duties
include overseeing workers and meeting deadlines.
Titles like supervisor, office manager, and crew leader.
1. What are the three levels of management?
Top-level, middle-level, and operational.
2. Which of the three levels is most involved in
the day-to-day supervision of employees?
Operational managers
A good manager carries out the four different
functions of business:
Planning and Staffing: setting realistic goals,
deciding how the company should perform, and
asking key questions
Organizing: assigning managers different tasks
and coordinating their tasks, checking budgets,
and determining who makes decisions and who
answers to whom.
3. Leading: creating a vision of the company to inspire
employees, setting standards, communicating with
employees to provide guidance and resolution of
conflicts, training, encouraging and motivating
employees, and offering incentives.
4. Controlling: keeping the company on track and
making sure all goals are met, monitoring the budget,
the schedule, and the quality of the product,
monitoring employees and reviewing their
performance, and monitoring customer satisfaction.
1. What are the four functions of management?
planning, organizing, leading, and controlling
2. What is a manger’s objective in leading?
maximize potential
Most managers begin their career as a company
employee and are promoted after they have gained
experience and have shown certain qualities.
Ability to perform varied activities
Ability to work under pressure
Effective communication
Interpersonal skills
Ability to gather and use information (managers
must be aware of the events and forces in the
global market that affect their business.)
 Higher pay
 Prestige
 More influence on how the company is run
 Greater control over their time & how they spend it
 Blamed when things go wrong
 Mistakes are more costly because their decisions affect
many workers
 Pressure to do things right the first time
 Relationships with employees is different than with
fellow managers