ORGANIZING
THE BUSINESS
6–1
Organizational Structure
 Specification of the jobs to be done
within an organization and how those
jobs relate to one another
6–2
What Elements Influence
Organizational Structure?
Purpose
Mission
Strategy
Size
Organizational
structure is
usually quite
fluid!
Technology
External Environment
6–3
The Organization Chart
Organization Chart: diagram depicting a company’s structure
and showing employees where they fit into its operations
Chain of Command: reporting relationships within a company
Figure 6–1
Copyright © 2005 Prentice Hall, Inc. All
rights reserved.
6–4
Multiple Forms of
Departmentalization
6–5
The Decision-Making Hierarchy
Distributing
Authority
Centralized
Organization
Decentralized
Organization
6–6
Centralized and Decentralized
Organizations
Centralized
Top managers hold most
decision-making authority
Decentralized
Lower level managers hold
significant decision-making
authority
6–7
Flat Organization: Typical Law Firm
6–8
Tall Organization: United
States Army
6–9
Organizational Structure and
Span of Control
Relatively narrow
span of control
Relatively wide
span of control
6–10
Basic Forms of Organizational
Structure
Functional
Organization
Divisional
Organization
International
Organization
Matrix
Organization
6–11
Matrix
Organization
at Martha
Stewart
6–12
International Division Structure
6–13
Organizational Design in the 21st
Century
 Boundaryless Organizations
 Team Organizations
 Virtual Organizations
(exists only in response to its own
needs which is to meet the
demands of each unique situation)
 Learning Organizations
(continuous improvement with
continuous employee learning and
development)
6–14
The Virtual Organization
6–15
The Informal Organization: A Powerful
Dynamic
 Informal Groups
 The Grapevine (informal
communication network
that runs through an
organization)
 Intrapreneuring (process
of creating and maintaining
the innovation and flexibility
of a small-business
environment within the
confines of a large
organization)
6–16