Part 3
Managing for
Quality and
Competitiveness
© 2015 McGraw-Hill Education.
7-2
CHAPTER 6
The Nature of Management
CHAPTER 7
Organization, Teamwork, and Communication
CHAPTER 8
Managing Service and Manufacturing
Operations
7-3
Learning Objectives
LO 7-1
Define organizational structure and relate how
organizational structures develop.
LO 7-2
Describe how specialization and departmentalization
help an organization achieve its goals.
LO 7-3
Determine how organizations assign responsibility for
tasks and delegate authority.
LO 7-4
Compare and contrast some common forms of
organizational structure.
LO 7-5
Distinguish between groups and teams and identify the
types of groups that exist in organizations.
LO 7-6
Describe how communication occurs in organizations.
7-4
Organizational Culture
Organizational Culture (Corporate Culture)
• A firm’s shared values, beliefs, traditions, philosophies,
rules, and role models for behavior
o Ensures that organizational members:
 Share values
 Observe common rules
 Share problem solving approaches
7-5
Organizational Structure
Structure
• The arrangement or relationship of positions within
an organization
o An organization’s structure develops when:
1. Managers assign work tasks to specific individuals
or work groups
2. Coordinate the diverse activities required to reach
the firm’s objectives
7-6
 The organizational
structure at TOMS
Shoes consists of two
parts
 The for-profit component
of the company
manages overall
operations
 Its nonprofit component,
Friends of TOMS, is
responsible for volunteer
activities and shoe
donations
7-7
Organizational Charts
Organizational Chart
• A visual display of the organizational structure, lines of
authority (chain of command), staff relationships,
permanent committee arrangements, and lines of
communication
7-8
The Evolution of a Clothing Store,
Phases 1, 2, and 3
7-9
Assigning Tasks
Specialization
• The division of labor into small, specific tasks and the
assignment of employees to do a single task
o Why specialize:
 Efficiency
 Ease of training
 Activities too numerous for one person
7-10
Learning Organization
A learning organization is one that opens communication
between departments in order to increase the level of
learning among employees within the organization

The manager creating and sustaining this kind of organization
invests in employees through extensive training and minimal
restrictions so that creativity is emphasized

Through the knowledge that is created and captured,
employees are encouraged to experiment with the ideas that
have the most value for customers

Managers encourage a healthy level of risk taking and learning
from mistakes

Failure is valued as a learning experience and success, while
celebrated, is seen as a fleeting experience that should not be
the focus of the future because there is not much to learn from
success
7-11
Departmentalization
Overspecialization
can have negative
consequences
•
•
•
•
•
Employees become bored
Job dissatisfaction
Poor quality work
Increased injuries
Increased employee turnover
Departmentalization
• The grouping of jobs into working units usually called
departments, units, groups, or divisions
• Functional departmentalization
• Product departmentalization
• Geographical departmentalization
• Customer departmentalization
7-12
Functional Departmentalization
Functional Departmentalization
• The grouping of jobs that perform similar functional
activities, such as finance, manufacturing, marketing,
and human resources
7-13
Product Departmentalization
Product Departmentalization
• The organization of jobs in relation to the products of
the firm
7-14
 The Campbell Soup Company uses product
departmentalization to organize its company
 However, the firm also engages in a type of geographic
departmentalization for various regions
7-15
Geographical Departmentalization
Geographical Departmentalization
• The grouping of jobs according to geographic location,
such as state, region, country, or continent
7-16
Customer Departmentalization
Customer Departmentalization
• The arrangement of jobs around the needs of various
types of customers
7-17
An Organizational Chart for the City of
Corpus Christi
7-18
Delegation of Authority
Delegation of Authority
• Giving employees not only tasks, but also the power
to make commitments, use resources, and take
whatever actions are necessary to carry out those
tasks
 As a business grows, so do the number and
complexity of decisions that must be made; no one
manager can handle them all
 Delegation of authority frees a manager to concentrate
on larger issues such as planning or dealing with
problems and opportunities
7-19
Responsibility and Accountability
Responsibility
• The obligation, placed on employees through
delegation, to perform assigned tasks satisfactorily
and be held accountable for the proper execution
of work
Accountability
• The principle that employees who accept an
assignment and the authority to carry it out are
answerable to a superior for the outcome
7-20
Degree of Centralization
Centralized Organizations
• A structure in which authority is concentrated at the top,
and very little decision-making authority is delegated to
lower levels
• Overcentralization can cause serious problems for a
company, in part because it may take longer for the
organization as a whole to implement decisions and to
respond to changes and problems on a regional scale
Decentralized Organizations
• An organization in which decision-making authority is
delegated as far down the chain of command as possible
• Delegating authority to lower levels of managers may
increase the organization’s productivity
7-21
Span of Management
Span of Management
• The number of subordinates who report to a particular
manager
 A wide span of management exists when a manager directly
supervises a very large number of employees
 A narrow span of management exists when a manager
directly supervises only a few subordinates
7-22
Organizational Layers
Organizational Layers
• The levels of management in an organization
 Complements the concept of span of management
 A company with many layers of managers is
considered tall; in a tall organization, the span of
management is narrow
 Organizations with few layers are flat and have wide
spans of management
7-23
Forms of Organizational Structures
Forms of
Organizational
Structures
•
•
•
•
Line structure
Line-and-staff structure
Multidivisional structure
Matrix structure
7-24
Line Structure
Line Structure
• The simplest organizational structure in which direct
lines of authority extend from the top manager to the
lowest level of the organization
7-25
Line-and-Staff Structure
Line-and-Staff Structure
• A structure having a traditional line relationship
between superiors and subordinates and also
specialized managers – called staff managers –
who are available to assist line managers
7-26
Line-and-Staff Structure
7-27
Multidivisional Structure
Multidivisional Structure
• A structure that organizes departments into larger
groups called divisions
 Occurs as organizations grow larger and more
diversified
 Divisions can be formed on the same bases as
departments (customer, product, and/or geography)
 Delegation of authority and divisionalized work
7-28
Matrix Structure
Matrix Structure
• A structure that sets up teams from different
departments, thereby creating two or more
intersecting lines of authority; also called a projectmanagement structure
7-29
Matrix Structure
7-30
Groups and Teams
Group
• Two or more individuals who communicate with
one another, share a common identity, and have a
common goal
Team
• A small group whose members have
complementary skills; have a common purpose,
goals, and approach; and hold themselves
mutually accountable
7-31
Differences Between Groups and Teams
7-32
Committees and Task Forces
Committee
• A permanent, formal group that performs a specific
task
Task Force
• A temporary group of employees responsible for
bringing about a particular change
 Typically come from across all departments and levels of an
organization
 Membership is usually based on expertise rather than
organizational position
 Occasionally, a task force may be formed from individuals
outside a company
7-33
Teams
Project Teams
• Groups similar to task forces which normally run their operation
and have total control of a specific work project
Product-Development Teams
• A specific type of project team formed to devise, design, and
implement a new product
Quality-Assurance Teams (or Quality Circles)
• Small groups of workers brought together from throughout the
organization to solve specific quality, productivity, or service
problems
Self-Directed Work Teams (SDWT)
• A group of employees responsible for an entire work process or
segment that delivers a product to an internal or external
customer
7-34
The Flow of Communication in an
Organizational Hierarchy
7-35
Formal Communication
Flow of communication within the formal organizational
structure as depicted on organizational charts
Upward Communication
• Flows from lower to higher levels of the organization
• Includes information such as progress reports, suggestions
for improvement, inquiries, and grievances
Downward Communication
• Refers to the traditional flow of information from upper
organizational levels to lower levels
• Typically involves directions, the assignment of tasks and
responsibilities, performance feedback, and certain details
about the organization’s strategies and goals
7-36
Formal Communication
Horizontal Communication
• Involves the exchange of information among colleagues and
peers on the same organizational level, such as across or
within departments
• Information informs, supports, and coordinates activities both
within the department and with other departments
Diagonal Communication
• When individuals from different units and organizational levels
communicate
• With firms downsizing and increasing the use of work teams,
workers are being required to communicate with others in
different departments and on different levels to solve problems
and coordinate work
7-37
Informal Communication
Grapevine
• An informal channel of communication, separate from
management’s formal, official communication channels
 Managers can utilize informal communications
as a sounding device
 Can obtain valuable information from the
grapevine that could improve decision making
 Some organizations use the grapevine to their
advantage by floating ideas, soliciting feedback,
and reacting accordingly
7-38
Non-Verbal Communication

Non verbal communication is embedded in most
forms of communication and send messages out
through hand movements, head nodding, and tone of
voice or written word

These indirect forms of communication can be more
informative than the direct message being transmitted

It is important to be aware of one’s own non verbal
communication style in order to ensure sending the
intended message
7-39
Improving Communication Effectiveness
 Encourage employees to provide feedback
 Helps identify strengths and weaknesses
 Avoid interruptions
 Develop strong and effective communication
channels through training
 Important for companies to communicate their
e-mail policies throughout the organization
7-40
Discussion
?
?
Indentify four types of
departmentalization and
give an example of each
type.
Discuss the different
forms of organizational
structure. What are the
primary advantages and
disadvantages of each
form?