Organizational Structure
Business Management
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2
What is
Organizational
Structure?
• The hierarchy within an organization that sets
forth the chain of command in addition to the
delegation of responsibilities
• Depends upon the goals of the organization
• Illustrated by an organizational chart
• Centralized – decision-making rests with upper
management
• Decentralized – decision-making is the
responsibility of departments or divisions
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What is an
Adaptive Organization?
• An organization that adjusts well to changes
• More decision-making is with the employees
(decentralized)
• Team-oriented
• Focus on anticipation of customer needs to
more easily adjust to unpredictability
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When is Change
Needed?
Merger
Rapid
growth or
decline
Customer
dissatisfaction
New
competitors
Change in
laws
Increasing
costs
New
technology
New
product or
service
Decreasing
employee
morale
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What is
Human Resource
Management?
• All of the activities associated with the
personnel of an organization:
– Hiring
– Compensation
– Performance evaluation
– Employee relations
– Health and safety
Copyright © Texas Education Agency, 2012. All rights reserved.
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What is
Span of Control?
• Span of control refers to the number of subordinates
a member of management has direct authority over
• Easily displayed through an organizational chart
Span of
Control = 3
President
V.P. Sales
V.P.
Finance
V.P. Human
Resources
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Types of Structure
• Line
– Direct line of authority from top
executives downward
• Line and Staff
– Staff specialists assist the lines of
authority
• Matrix
– Temporary work teams
• Team
– Permanent work teams
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8
Line Organization
• Oldest form of
organization
• Simplest form of
organization
• Due to top-to-bottom
chain of command,
decisions can be made
quicker
• Lack of specialization
President
Production
Sales
Manager
Manager
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Controller
Assistant
Manager
Branch A
Branch B
Manager
Manager
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Line-and-Staff Organization
• More complex than
line organization
• Allows for experts
at different levels
in the organization
• Specialization
• More costly than
line organization
President
Production
Manager
Sales
Manager
Finance
Manager
Production
Marketing
Assistant
Finance
Supervisor
Supervisor
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10
Matrix Organization
• Teams designed for specific projects
• No consistent organization structure
because of the changing nature of projects
• Matches skills with projects
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Team Organization
• Team leader acts as manager for the team
• In self-directed teams, team members
have autonomy over planning, conducting,
and reviewing their work with team leader
acting as facilitator
• Feedback can come from customers
• The team handles HR functions such as
hiring, firing, and evaluating performance
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12
Independent Practice
Assignments
•
•
Corporate Organizational Chart Assignment #1 - Students are use the Internet to do
research needed to create organizational charts for 2 different corporations in
different industries, or students can use a local community business. You may create
these charts in a word processing program using online graphics. Identify each as to
the type of organizational structure it is and comment on whether or not the
structure varied for different industries. Students must include a bibliography.
Org Structure Rap Assignment #2 – In pairs students will create a rap outlining the
four types of organization structure of a business. They should include enough detail
in the rap to demonstrate their knowledge of the topic. They should also include
reference to at least one major corporation or local business that the other students
can recognize as well as its organizational structure. Students will then perform their
rap to the class.
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Independent Practice
Assignments (Cont.)
•
Case Study Report Assignment #3 – You are the owner of a business that sells uniforms and
provides embroidery services for high school, college, and recreational sports teams in your
area. You have managers in the following departments: High School Sales, Collegiate Sales,
Recreational Sales, and Accounting. The High School and Collegiate Sales have one full-time
sales associate and two part-time associates as well as a delivery person. The Recreational
Sales department has one full-time and one part-time associate. The Accounting
department has two full-time employees that report to the manager. Students will prepare
a 2-page report that answer the following questions: 1) What does the organizational chart
look like for your business? (Hint: create an organizational chart), 2) What organizational
structure is your business?, 3) Assuming sales are declining in one of the sales departments,
what would your recommendation be to possibly restructure to improve sales?, 4) If sales
are increasing, make a recommendation on how to restructure to handle the increased
business, 5) Is the current structure considered ‘tall’ (more centralized) or ‘flat’ (more
decentralized)?
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Independent Practice
Assignments (Cont.)
•
Teamwork Project Assignment #4 - Divide the class into teams of 5 if possible. They are to
think of a team name and logo. They are to provide objects they can use to create a
product. Bring either fruit or other food items you can arrange or put together in any way
possible. Or bring wooden or plastic blocks or logs with which to create a toy. They must
create an organization chart of all of their team members, identifying the type of structure,
as well as job titles. They are to create a Marketing Plan for their finished food dish or toy
including the four P’s for their product (product, price, place, promotion). All items can be
affixed to a poster or flip chart. Finally, they will each prepare an ‘exit ticket’ that will include
their own critique of their team’s organizational structure, team member duties, teamwork,
their success (or lack of) with their product, and their overall assessment of their marketing
plan. (An example of a marketing plan will be given.)
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