Management 301, Chapter 10
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1.
Accountability
the mechanism through which authority and responsibility are brought into alignment. It means that
people with authority and responsibility are subject to reporting and justifying task outcomes to those
above them in the chain of command
2.
Advantages/Disadvantages
of virtual network
approach
A: a company can concentrate on what it does best and contract out other activities to companies with
distinctive competence in those specific areas, which enables a company to do more with less. Leanest
of all approaches because little supervision is required
D: lack of hands-on control. Customer service and loyalty can suffer if outsourcing partners fail to
perform as expected
3.
Advantages/Disadvantages
to divisional structure
A: organization will be flexible and responsive to change because each unit is small and tuned to its
environment. Concern for customers is high and coordination across functional departments is better
because employees are grouped together in a single location and committed to one product line
D: Coordination across divisions is poor, problems can occur when autonomous divisions go in
opposite directions. Duplication of resources and the high cost of running separate divisions.
Organization losses efficiency and economies of scale. The small size of departments within each
division may result in a lack of technical specialization, expertise and training
4.
Advantages/Disadvantages
to the Team Approach
A: breaks down barriers across departments and improves coordination and cooperation. Team
member's know one another's problems and compromise rather than blindly pursuing their own goals.
Enables the organization to adapt more quickly to customer requests and environmental changes and
speeds decision making because decisions need not go to the top of the hierarchy for approval.
Morale boost, employees are typically enthusiastic about their involvement in bigger projects rather
than in narrow departmental tasks.
D: employees may experience conflicts and dual loyalties. May make different work demands on
members than do their department managers and members who participate in more than one team
must resolve these conflicts. A large amount of time is devoted to meetings. May cause too much
decentralization
5.
Authority
the formal and legitimate right of a manager to make decisions, issue orders, and allocate resources to
achieve organizationally desired outcomes.
6.
Centralization
means that decision authority is located near the top of the organization
7.
Chain of Command
an unbroken line of authority that links all employees in an organization and shows who reports to
whom
8.
Characteristics of a
divisional structure
1. Many companies shift to a divisional structure when they become so large that the disadvantages of
a functional structure become too great.
2. Divisions are created as self-contained units, with separate functional departments for each division
3. Could group companies by geographic region of customer group
9.
Characteristics of a matrix
approach
1. Has dual lines of authority, two-boss employees
2. Matrix boss
3. Top Leaders
4. Advantages: highly effective in a complex, rapidly changing environment in which the organization
needs to be flexible, innovative and adaptable. Allows new issues to be raised and resolved. Makes
efficient use of HR because specialists can be transferred from one division to another.
5. Disadvantages: confusion and frustration caused by the dual chain of command. Can generate high
level of conflict because it pits divisional against functional goals in a domestic structure or product
lines vs country goals in a global structure. There is time lost to meetings and discussions devoted to
resolving this conflict.
10.
Collaboration
means a joint effort between people from two or more departments to produce outcomes that meet a
common goal or shared purpose and that are typically greater than what any of the individuals or
departments could achieve working alone
11.
Continuous process
production
the entire workflow is mechanized in a sophisticated and complex form of production technology. No
starting and stopping, human operators are not part of actual production because machinery does all
the work
12.
Coordination:
refers to the managerial task of adjusting and synchronizing the diverse activities among different individuals
and departments. The outcome of information and cooperation
13.
Cross-functional
team
furthers horizontal coordination because participants from several departments meet regularly to solve
ongoing problems of common interest
14.
Cross-functional
teams
consists of employees from various functional departments who are responsible to meet as a team and
resolve mutual problems. Can provide needed horizontal coordination to complement an existing divisional
or functional structure
15.
Decentralization
decision authority is pushed downward to lower organizational levels
16.
Delegation
the process that manages use to transfer authority and responsibility to positions below them in the hierarchy
17.
Departmentalization
the basis for grouping positions into departments and departments into the total organization
18.
Divisional Structure
(M-form;
multidivisional or
decentralized form)
occurs when departments are grouped together based on similar organizational outputs, separate divisions
can be organized with responsibility for individual products, services, product groups, major projects or
programs, divisions, businesses, or profit centers. Diverse departments are brought together to produce a
single organizational output
19.
Division of Labor
work specialization, the degree to which organizational tasks are subdivided into separate jobs. Work can be
performed more efficiently if employees are allowed to specialize.
20.
Dual lines of
authority/two-boss
employees
functional runs vertically, divisional hierarchy of authority runs horizontally. Two-boss employees report to
two supervisors simultaneously, must resolve conflicting demands from the matrix bosses. Need excellent HR
skills with which to confront managers and resolve conflicts
21.
Factors shaping
structure
1. Strategic Goals
2. nature of the workflow technology
(strategic needs: environment, strategy, goals) (Operational needs: technology, work processes)
22.
Factors that affect
centralization vs
decentralization
1. Greater change and uncertainty in the environment is usually associated with decentralization
2. The amount of centralization or decentralization should fit the firm's strategy
3. In times of crisis or risk of company failure, authority may be centralized at the top
23.
Flat Structure
has a wide span, is horizontally dispersed and has fewer hierarchical levels
24.
Functional Structure
characteristics
1. Strong vertical design, information flows up and down the vertical hierarchy, and the chain of command
converges at the top of the organization
2. Advantages: economies of scale, efficient resource use, offers a way to centralize decision making and
provide unified direction from top managers
3. Disadvantages: barriers can exist across departments, communication and coordination across functions
are often poor causing a slow response to environmental changes. Innovation and change require
involvement of several departments. Decision involving more than one department may pile up at the top of
the organization and be delayed
25.
Functional Structure
(U-form; unitary
structure)
activities are grouped together by common function from the bottom to the top of the organization. The
functional structure groups positions into departments based on similar skills, expertise, work activities and
resource use
26.
How can you
increase decisionmaking speed and
efficiency
Reducing management levels
27.
Line Authority
means that people in management positions have the formal authority to direct and control immediate
subordinates
28.
Line departments
perform tasks that reflect the organization's primary goal and mission
29.
Mass production
distinguished by standardized production runs. A large volume of products is produced, and all customers
receive the same product
30.
Matrix Approach
combines aspects of both functional and divisional structures simultaneously, in the same part of the
organization. Evolved as a way to improve horizontal coordination and information sharing
31.
Matrix boss:
the product or functional boss, who is responsible for one side of the matrix.
32.
Mechanistic
goals of efficiency and a stable environment
33.
Organic
goals of innovation and a rapidly changing environment. Organization tends to much looser, free-flowing and
adaptive. Structure is more horizontal and decision-making authority is decentralized
34.
Organization
Chart
the visual representation of an organization's structure, the set of formal tasks and formal reporting relationships
provides a framework for vertical control of the organization
35.
Organization
Structure
1. The set of formal tasks assigned to individuals and departments
2. Formal reporting relationships, including lines of authority, decision responsibility, number of hierarchical
levels, and span of managers' control
3. The design of systems to ensure effective coordination of employees across departments
36.
Organizing
the deployment of organizational resources to achieve strategic goals. Deployment of resources is reflected in
the organization's division of labor into specific departments and jobs, formal lines of authority and mechanisms
for coordinating diverse tasks
37.
Outsourcing:
farming out certain activities, such as manufacturing or credit processing, has become a significant trend
38.
Permanent Teams
groups of employees who are organized in a way similar to a formal department. Each team brings together
employees from all functional areas focused on a specific task or project. Emphasis is on horizontal
communication and information sharing because representatives from all functions are coordinating their work
and skills to complete a specific organizational task
39.
Primary
difference
between
divisional and
functional
structure
in a divisional structure, the chain of command from each function converges lower in the hierarchy. Divisional
structure encourages decentralization
40.
Project Manager
a person who is responsible for coordinating the activities of several departments for the completion of a
specific project. The person is not a member of one of the departments being coordinated
41.
Re-engineering
refers to the radical redesign of business processes to achieve dramatic improvements in cost, quality, service
and speed. Generally leads to a shift away from a strong vertical structure to one emphasizing stronger
horizontal coordination
42.
Relational
Coordination
highest level of horizontal coordination, refers to "frequent, timely, problem-solving communication carried out
through relationships of shared goals, shared knowledge, and mutual respect". this is part of the fabric and
culture of the organization
43.
Responsibility
the duty to perform the task or activity assigned
44.
Scalar principle
refers to a clearly defined line of authority in the organization that includes all employees
45.
Service
Technology
1. Intangible output: services are perishable, and unlike physical products, cannot be stored in inventory. Service
is either consumed immediately or lost forever
2. Direct contact with customers, production and consumption are simultaneous
3. Service technology that directly influences structure is the need for employees to be close to the customer.
Tend to be flexible, informal and decentralized. Horizontal communication is high
46.
Small-batch
production firms
produce goods in batches of one or a few products designed to customer specification. Close to traditional
skilled-craft work because human beings are a large part of the process
47.
Span of
management
the number of employees reporting to supervisor. Sometimes called span of control, this characteristic of
structure determines how closely a supervisor can monitor subordinates
48.
Staff Authority
is narrower and includes the right to advise, recommend, and counsel in the staff specialists' are of expertise. A
communication relationship; staff specialists advise managers in technical areas
49.
Staff
Departments
include all those that provide specialized skills in support of line departments. Have an advisory relationship
with line departments and typically include marketing, labor relations, research, accounting and HR
50.
Tall Structure
has an overall narrow span and more hierarchical levels
51.
Task force
a temporary team or committee designed to solve a problem involving several departments. Task force
members represent their departments and share information that enables coordination
52.
Team Approach
gives managers a way to delegate authority, push responsibility to lower levels and be more flexible
and responsive in a complex and competitive global environment
53.
Team-based structure
the entire organization is made up of horizontal teams that coordinate their work and work directly with
customers to accomplish the organization's goals
54.
Technical Complexity
the degree to which machinery is involved in the production to the exclusion of people
55.
Technology
includes the knowledge, tools, techniques, and activities used to transform organizational inputs into
outputs. includes machinery, employee skills, and work procedures
56.
Three characteristics of
authority
1. Authority is vested in organizational positions, not people
2. Authority flows down the vertical hierarchy
3. Authority is accepted by subordinates
57.
Top Leader
responsible for the entire matrix, oversees both the product and functional chains of command. His/her
responsibility is to maintain a power balance between two sides of the matrix
58.
Two underlying principles
of a chain of command
1. Unity of command
2. Scalar Principle
59.
Unity of Command
means that each employee is held accountable to only one supervisor
60.
Virtual Network
Approach
the firm subcontracts mosts of its major functions to separate companies and coordinates their activities
from a small organization at headquarters
61.
What can too much
division of
labor/specialization
cause?
Too much DOL: can cause employees to be isolated and do only one single boring job
Too much specialization: can create separation and hinders the coordination that is essential for
organizations to be effective
62.
What has been the trend
in the US and Canada
over the past 30 years?
toward greater decentralization of organizations. It is believed to relive the burden on top managers,
make greater use of employees' skills and abilities, ensure that decisions are made close to the action
by well-informed people, and permit more rapid response to external changes.
63.
Why is organization
important?
It follows strategy, strategy defines what to do, organization defines how to do it