Business
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Chapter
7
Organizing The
Business Enterprise
7-2
Business
Chapter Outline
What is Organizational
Structure?
The Building Blocks of
Organizational Structure
Establishing The DecisionMaking Hierarchy
Basic Forms of Organizational
Structure
Informal Organization
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Organizational Structure
Influenced By:
Business
• Jobs To Be Done
• How Jobs Relate
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To
One Another
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Determinants Of
Organization
Business
• Purpose
• Mission
• Strategy
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Business
Organization Chart
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Chain Of Command
Business
CEO
Division V.P.
Store
Manager
Department
Supervisor
Frontline
Employee
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Business
Building Blocks
Of Structure
• Specialization- Specific
Jobs To Specific People
• Departmentalization
– Group Jobs In Logical
Units
– Profit Center
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Types Of
Departmentalization
Business
• Customer
• Product
• Process
• Geographic
• Functional
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Customer
Departmentalization
Business
Big Box
Retail
Men’s
Department
Women’s
Department
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Luggage
Department
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Business
Product
Departmentalization
Lucent
Technology
Wireless
Communication
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Optical
Networking
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Business
Process
Departmentalization
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Geographic
Departmentalization
Business
Levi
Strauss
U.S.
Europe
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Asia
Pacific
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Functional
Departmentalization
Business
Small
Business
Production
Marketing
&
Sales
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Human
Resources
Accounting
&
Finance
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Business
Multiple Forms Of
Departmentalization
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Hierarchy For Decisions
Business
• Assign Tasks
– Responsibility
– Authority
• Perform Tasks
– Delegation
– Accountability
• Distribute Authority
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Business
Small Business
Delegation Fear
o Employee Can’t Do
As Well
o Something Will Go
Wrong
o No Long-Range Plan
o Not Up-To-Date On
Industry Trends & Competitive
Products
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Business
Big Business
Delegation Fear
o Subordinate Doesn’t
Know Job
o Subordinate “Show
Manager Up”
o Desire To Retain Control
o Inability To Effectively Delegate
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Centralized/Tall Structure
Business
Boss (Makes All Decisions)
Subordinate
Subordinate
Subordinate
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Business
Flat Organization
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Decentralized/Flat
Structure
Business
Supervisor
Employee
Employee
Customer
Customer
Employee
Employee
Customer
Customer
Makes Some Decisions
(Empowered)
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Business
Tall Organization
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Business
Span Of Control
Narrow
Wide
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Line vs. Staff Authority
Business
Staff Managers
Leader
Advisor
Manager
Advisor
Manager
Manager
Line Managers
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Business
Line/Staff Organization
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Committee/Team
Authority
Business
Leader
Team
(Advisors and/or
Decision-makers)
Managers
Managers
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Managers
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Functional Organization
Business
Marketing
HQ
Operations
Finance
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Business
Divisional Organization
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Business
Matrix Organization
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International Division
Structure
Business
CEO
Retail
Division
A
Retail
Division
B
Retail
Division
C
Latin
America
Europe
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Asia
7-30
st
21
Century
Organizations
Business
• Boundaryless
• Team
• Virtual
• Learning
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Business
Virtual Organization
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Business
Informal Organizations
• Informal Groups- Interact
Among Themselves
• Grapevine
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Business
Intrapreneuring
Intrapreneur
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