Chapter Eight
Organization,
Teamwork, and
Communication
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Issues in Developing
an Organization
• The Right Structure
• Necessary Areas of Specialization
• Degree of Departmentalization
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Specialization
• Dividing labor into small,
specific tasks and assigning
employees to do a single task.
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Departmentalization
The grouping of jobs into working units
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Types:
Functional Departmentalization
Product Departmentalization
Geographical Departmentalization
Customer Departmentalization
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Functional Departmentalization
President
Production
Department
Marketing
Department
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Finance
Department
Distribution
Department
Research and
Development
Department
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Product Departmentalization
President
Stereo
Equipment
Division
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Computer
Electronics
Division
Consumer
Telecommunications
Equipment
Division
Industrial
Telecommunications
Equipment
Division
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Geographical
Departmentalization
President
International
Operations
Pacific Rim
Division
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European
Division
Latin
American
Division
Middle East
Division
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Customer Departmentalization
Product
Manager
Consumer
Foods
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Industrial
Foods
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The Differences Between
Groups and Teams
Working Group
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Strong, clearly focused leader
Individual accountability
The same purpose as the broader
organizational mission
Creates individual work products
Runs efficient meetings
Measures its effectiveness
indirectly by its effects on others
(e.g., financial performance of the
business
Discusses, decides, and delegates
Team
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Shared leadership roles
Individual and group
accountability
A specific purpose that the team
itself delivers
Creates collective work
products
Encourages open-ended
discussion and active problemsolving meetings
Measures performance directly
by assessing collective work
products
Discusses, decides, and does
real work together
Source: Robert Gatewood, Robert Taylor, O.C. Ferrell, Management: Comprehension, Analysis, and
Application (Homewood, IL: Austen Press, 1995), 427.
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Types of Groups
• Committee
• Task Force
• Project Team
– Product-development team
• Quality Assurance Team
• Self-directed Work Team (SDWT)
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Virtual Teams
• Employees’ Reactions
To Virtual Work
– 91% enjoyed the
experience
– 73% would like to
engage in virtual work
more frequently
– 35% felt it enhanced
their relationships with
other employees
Source: Darryl Haralson and Adrienne Lewis, “USA Today Snapshots,”
USA Today, April 26, 2001, p. B1.
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Assigning Responsibility and
Delegating Authority
• Delegation of Authority
• Assigning Responsibility
• Employee Accountability
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Degree of Centralization
• Centralized
Organizations
– Authority is
concentrated at
the top and very
little decisionmaking authority
is delegated to
lower levels
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• Decentralized
Organizations
– Decision-making
authority is
delegated as far
down the chain of
command as
possible
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Span of Management:
Wide Span and Narrow Span
Wide Span:
Flat Organization
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Narrow Span:
Tall Organization
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Span of Management:
Organizational layers
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Forms of
Organizational Structure
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Line
Line-and-staff
Multidivisional
Matrix
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Line Structure
Convenience Store
Owner
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Manager
Assistant
Manager
Hourly
Employee
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Line-and-Staff Structure
Line relationship
Plant
Manager
Staff relationship
Human
Resources
Engineering
Production
Manager
Supervisor
Supervisor
Supervisor
Supervisor
Employees
Employees
Employees
Employees
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An Example of Multidivisional Structure:
The Walt Disney Company
CEO
Walt Disney
Attractions
Motion
Pictures
Walt
Disney
World
Magic
Kingdom
CA
Disney
Stores
Magic
Kingdom
FL
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Epcot
Center
Walt Disney
Studios
TV
Animation
Tokyo
Disneyland
Consumer
Products
Disney
Channel
EuroDisney
Licensing
Publishing
DisneyMGM
Studios
Disney
Music
Software
and
Education
Catalog
Marketing
Source: The Walt Disney Company Annual Report
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The Matrix Structure
General
Manager
General
Project
Manager
Functional
Manager
Functional
Manager
Functional
Manager
Functional
Manager
Manager
Project A
Manager
Project B
Manager
Project C
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The Flow of Communication in an
Organizational Hierarchy
Upward
Downward
CEO
Vice
President
Manager
Vice
President
Manager
Manager
Horizontal
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Horizontal
Diagonal
Vice
President
Manager
Manager
Manager
Horizontal
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Formal Communication
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Upward communication flow
Downward communication flow
Horizontal communication flow
Diagonal communication flow
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Informal Communication
• The informal organization
• The grapevine
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Organizational Culture
• The firm’s shared values, beliefs,
traditions, philosophies, rules, and
heroes.
FAST FACT:
Southwest Airlines employees are continually encouraged
to have fun and make flying exciting for their passengers. New
employees watch videotapes and attend training sessions
on the company’s philosophies, policies, and culture.
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Solve the Dilemma
1.
2.
3.
What techniques or skills should an
employee have to assume a leadership role
within a work group?
If each work group has a team
representative, what problems will be faced
in supervising these representatives?
Evaluate the pros and cons of the system
developed by QS.
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Explore Your Career Options
What is the main quality of employees
who will be successful in their job?
Explain how this quality is helpful in a
small business and in a large company.
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Additional Discussion Questions
and Exercises
1. Which organizational structure would be best in the following
situations? Draw an organizational chart that would be
appropriate for each of the situations.
a. The owner of a real estate agency has opened an office
with three real estate agents. The owner directs the agency.
b. The real estate agency above has grown in the last five
years. The business has grown in two different directions:
residential and commercial. The owner still directs the
real estate agency. He now has five agents handling
commercial real estate details and 15 agents handling
residential real estate details. He would like to appoint
one of the agents to be manager of a commercial division
and
another agent to be manager of the residential
division.
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Additional Discussion Questions
and Exercises
c. Another five years has elapsed. The same real estate
agency has grown. Most of the business is still centered
in two divisions: residential and commercial. The owner
has now added a vice president to oversee the residential
and commercial divisions. Also, the agency has added
advertising and office management departments; the
purpose of these staff departments is to provide advice
and support to the residential and commercial divisions.
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Chapter 8 Quiz
1. Which of the following is most similar to the matrix
structure?
a. line structure
b. functional structure
c. line-and-staff structure
d. ad hoc committee
2. Which of the following is commonly considered an example of
informal organizational structure?
a. grapevine
b. organizational culture
c. organizational chart
d. employee handbook
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Chapter 8 Quiz
3. Compared with flat organizations, which of the following is
most typical of tall organizations?
a. The span of management is wide.
b. The communication is faster.
c. Administrative costs are usually higher.
d. Fewer layers of management are needed to carry out
operations.
4. The division of labor into small, specialized tasks and the
assignment of single tasks to employees is called
a. centralization.
b. specialization.
c. departmentalization.
d. accountability.
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Multiple Choice Questions
about the Video
1. Which of the following best describes Big Apple Bagel?
a. decentralized
b. centralized
c. concentrical
d. recentralized
2. St. Louis Bread Company introduced ________ in order to address
the authority and task boundaries that occur with growth.
a. dysfunctional and team-managed work groups
b. functional and self-managed work teams
c. cross-functional and self-managed work teams
d. functional and team-managed work groups
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