Principles of Business, Marketing, and
Finance
Business Operations and Organizational Structures
Copyright © Texas Education Agency, 2011. All rights reserved
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Business Organization and Management
• How a Company is Run
• Managerial Structures
– Organizational chart-shows how the business is
structured and who is in charge of whom
– Line authority-managers at the top of the organization
are in charge of those beneath them
– Centralized organization-gives authority to a number of
different managers to run their own departments
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Types of Organizational
Structure
Formal
Structure
Informal
Structure
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Guidelines for Businesses
• Mission Statement-short specific reason
why the business exists and what it wants
to achieve
• Goal-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
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Principles of Effective
Organization
• Responsibility-the obligation to complete specific
work
• Authority-right to make decisions about how
responsibilities should be accomplished
• Accountability-taking responsibility for the results
achieved
• Unity of Command-clear reporting relationship for
all staff of a business
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Principles of Effective
Organization
Span of Control
• number of employees who are assigned to a
particular work task and manager
Types of Organizational
Structures
• Functional organization structure – work arranged
within main business functions
Matrix Organizational Structures
• work is structured around specific project,
products, or customer groups
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How Departments are
Organized
• By function
• By product
• By location
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Levels of Management
• Top Level Managers
– Set goals
– Plan for the future
• Middle Managers
– Carry out the decisions of top
management
– Plan and control operations
• Operational Managers
– Oversee daily operations
– Supervise workers to meet
deadlines
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Planning
• Long-range planning-top-level management
decides how the company should perform
• Planning Questions Management Must Address
–
–
–
–
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What must be done?
Who will do it?
How will the work be grouped?
Who supervises whom?
Who makes decisions about the work to be done?
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Questions of the Planning
Process
• Applied and answered
when leaders meet with
the management team
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Organizing
• Assign managers different tasks
• Coordinate activities of managers
• Each manager organizes his/her
department and knows what other
managers are doing
• Must determine who makes decisions and
who answers to whom
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Leading
• Set Standards
-so managers know their goals
• Communicate with Managers
-to provide guidance and resolve conflicts
• Encourage Employees
-offer incentives such as pay raises and promotions
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Controlling
• Keeping the Company on
Track-to meet all goals
– Keep track of the budget, the
schedule, and the quality of the
product
– Monitor employees and review their
performance
– Monitor customer satisfaction
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Managers
• Most Managers
– Begin their careers as company employees
– Are promoted after they have gained experience and
have shown leadership qualities
• Managerial Qualities
–
–
–
–
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Ability to perform varied activities
Ability to work under pressure
Effective communication
Interpersonal skills
Ability to gather and use information
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Advantages Associated with
Being a Manager
• Higher earnings
• Prestige
• More influence on how the
company is run
• Greater control over
personal time
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Disadvantages Associated
with Being a Manager
• Take the blame when things go wrong
• Wrong decisions are costly and can affect
numerous employees
• Can have an adverse affect on
relationship with lower-level employees
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Teamwork
• Collaboration is important
• Flexibility, creativity, good
communication, shared
goals
• Work as a team-to
accomplish company
goals
• Brainstorm for solutions
• Listen to team members
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