Chapter
7
Organizational Structures
pp. 98-111
Chapter
7
Learning Objectives
After completing this chapter, you’ll be
able to:
1. Explain how businesses organize for
management.
2. List three levels of management and
compare their responsibilities.
continued
Introduction to Business, Organizational Structures
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Chapter
7
Learning Objectives
After completing this chapter, you’ll be
able to:
3. Name the four functions of management.
4. Analyze if a managerial position is for
you.
Introduction to Business, Organizational Structures
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Chapter
7
Why It’s Important
Understanding business
organization and management is
key to knowing how a company is
run.
Introduction to Business, Organizational Structures
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Chapter
7
Key Words
management plan
organizational chart
line authority
centralized organization
decentralized organization
departmentalization
continued
Introduction to Business, Organizational Structures
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Chapter
7
Key Words
top-level managers
middle managers
operational managers
Introduction to Business, Organizational Structures
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Chapter
7
Managerial Structures
A management plan divides a
company into different departments
run by different managers.
Introduction to Business, Organizational Structures
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Chapter
7
Managerial Structures
Companies use an organizational
chart to show how the business is
structured and who is in charge of
whom.
Introduction to Business, Organizational Structures
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Chapter
7
Managerial Structures
One way to organize management is
called line authority.
Managers at the top of the organization
are in charge of those beneath them.
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Chapter
7
Managerial Structures
Centralized organization puts
authority in one place, with top
management.
Introduction to Business, Organizational Structures
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Chapter
7
Managerial Structures
Decentralized organization gives
authority to a number of different
managers to run their own
departments.
Introduction to Business, Organizational Structures
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Chapter
Figure
7.1
7
WATERFOWL MANAGEMENT PLAN
Fifty-three percent of the
original 221 million wetland
acres found in the United
States has been destroyed. The
waterfowl depend upon the
wetlands. The North American
Waterfowl Management Plan is
a joint venture to preserve
migratory birds and their
habitats.
How might this management
plan save the habitats?
Introduction to Business, Organizational Structures
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Chapter
7
Formal Structure
Formal structures are usually
departmentalized.
Departmentalization divides
responsibility among specific units, or
departments.
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Chapter
7
Informal Structure
Smaller businesses can be run more
informally.
If a business does not need a big
marketing or distribution network, it
does not need a lot of managers.
Introduction to Business, Organizational Structures
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Chapter
7
Fast Review
1. How does a centralized
organization differ from a
decentralized organization?
2. Give an example of
departmentalization.
Introduction to Business, Organizational Structures
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Chapter
7
Levels of Management
Most businesses have three levels of
managers:
• Top-level managers
• Middle managers
• Operational managers
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Chapter
7
Levels of Management
Top-level managers are responsible
for setting goals and planning for the
future.
Introduction to Business, Organizational Structures
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Chapter
7
Levels of Management
Middle managers carry out the
decisions of top management.
Introduction to Business, Organizational Structures
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Chapter
7
Levels of Management
Operational managers are
responsible for the daily operations of
the business.
Introduction to Business, Organizational Structures
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7
Graphic Organizer
Chapter
Graphic
Organizer
Levels
of Management
TOP LEVEL
MANAGERS
• Set goals
• Plan for the
future
MIDDLE
MANAGERS
OPERATIONAL
MANAGERS
• Carry out the
decisions of top
management
• Plan and
control
operations
• Oversee daily
operations
• Supervise
workers to meet
deadlines
Introduction to Business, Organizational Structures
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Chapter
7
Fast Review
1. What are three levels of
management?
2. Which of the three levels is most
involved in the day-to-day
supervision of employees?
Introduction to Business, Organizational Structures
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Chapter
7
Planning
A good manager has four different
functions:
• Planning
• Organizing
• Leading
• Controlling
Introduction to Business, Organizational Structures
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Chapter
7
Planning
Long-range planning involves top-level
management deciding how the
company should perform.
Introduction to Business, Organizational Structures
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Chapter
7
Planning
As part of the planning process,
management must answer the
following key questions:
• What must be done?
• Who will do it?
continued
Introduction to Business, Organizational Structures
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Chapter
7
Planning
• How will the work be grouped?
• Who supervises whom?
• Who makes decisions about the
work to be done?
Introduction to Business, Organizational Structures
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Chapter
7
Planning
The key questions of the planning
process are applied and answered
when you get together with your
management team.
Introduction to Business, Organizational Structures
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Chapter
7
Organizing
To organize a business plan you need
to assign managers different tasks and
coordinate their activities.
Introduction to Business, Organizational Structures
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Chapter
7
Organizing
Each manager needs to organize his
or her department and know what the
other managers are doing.
You need to determine who makes
decisions and who answers to whom.
Introduction to Business, Organizational Structures
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Chapter
7
Leading
Good management also requires good
leadership.
You have to create a vision of your
company to inspire your employees.
Introduction to Business, Organizational Structures
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Chapter
7
Leading
You need to set standards so your
managers know their goals.
You need to communicate with them to
provide guidance and resolve conflicts.
Introduction to Business, Organizational Structures
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Chapter
7
Leading
You especially want to encourage your
employees.
Most companies offer incentives such
as pay raises and promotions.
Introduction to Business, Organizational Structures
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Chapter
7
Controlling
Controlling means keeping the
company on track and making sure all
goals are met.
Introduction to Business, Organizational Structures
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Chapter
7
Controlling
You have to keep track of the budget,
the schedule, and the quality of the
product.
You also have to monitor your
employees and review their
performance.
Introduction to Business, Organizational Structures
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Chapter
7
Controlling
Controlling also involves monitoring
customer satisfaction.
Introduction to Business, Organizational Structures
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Chapter
Figure
7.2
7
MANAGEMENT FUNCTIONS
Managers carry
out four different
functions.
Which function
involves
coordinating
resources?
Introduction to Business, Organizational Structures
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Chapter
7
Fast Review
1. What are the four functions of
management?
2. What is a manager’s objective in
leading?
Introduction to Business, Organizational Structures
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Chapter
7
Is Being a Manager for You?
Most managers begin their careers as
company employees. They’re
promoted after they have gained
experience and have shown certain
leadership qualities.
Introduction to Business, Organizational Structures
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Chapter
7
Is Being a Manager for You?
Managerial qualities include:
•
•
•
•
•
Ability to perform varied activities
Ability to work under pressure
Effective communication
Interpersonal skills
Ability to gather and use information
Introduction to Business, Organizational Structures
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Chapter
7
Advantages to Being a Manager
Managers usually earn more money
than employees in non-management
jobs.
Being a manager has prestige.
Introduction to Business, Organizational Structures
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Chapter
7
Advantages to Being a Manager
Because managers are leaders, they
have more influence than other
employees on how the company is
run.
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Chapter
7
Advantages to Being a Manager
Managers also have greater control
over their time and how they will spend
it.
Introduction to Business, Organizational Structures
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Chapter
7
Disadvantages to
Being a Manager
Managers get the blame when things
go wrong, even if another employee
caused the problem.
Introduction to Business, Organizational Structures
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Chapter
7
Disadvantages to
Being a Manager
When managers make mistakes, they
can be more costly than other
employees’ mistakes because their
decisions affect many workers.
Introduction to Business, Organizational Structures
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Chapter
7
Disadvantages to
Being a Manager
Some managers feel their relationship
with lower-level employees is different
than their relationship with fellow
managers.
Introduction to Business, Organizational Structures
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Chapter
7
Fast Review
1. What are five qualities or skills a
manager should have?
2. What are the advantages and
disadvantages of being a manager?
Introduction to Business, Organizational Structures
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Chapter
7
Business Building Blocks
Developing Teamwork
In business, collaboration is key. Working
in a team requires flexibility, creativity,
good communication, and shared goals.
continued
Introduction to Business, Organizational Structures
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Chapter
7
Business Building Blocks
Developing Teamwork
In fact, those characteristics also
describe improvisation—to arrange
something offhand.
continued
Introduction to Business, Organizational Structures
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Chapter
7
Business Building Blocks
Developing Teamwork
To accomplish a goal in a company,
people must work together.
continued
Introduction to Business, Organizational Structures
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Chapter
7
Business Building Blocks
Tips on “Improving” Your Teamwork
• Working as a team is better than
working separately.
• Listen to each other as you brainstorm
for solutions.
continued
Introduction to Business, Organizational Structures
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Chapter
7
Business Building Blocks
Tips on “Improving” Your Teamwork
• Engage in problem solving while
creating and offering solutions within
constraints.
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Chapter
7
How do you suppose a lattice
organization is run?
continued
Introduction to Business, Organizational Structures
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Chapter
7
What are the benefits of a
management style that has no
chain of command?
continued
Introduction to Business, Organizational Structures
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Chapter
7
What are the challenges of a team
formed of associates rather than
employees?
continued
Introduction to Business, Organizational Structures
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Chapter
7
In terms of teamwork, what does it
mean when a person takes an
action that is “below the
waterline”?
Introduction to Business, Organizational Structures
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End of Chapter
7
Organizational Structure