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ลำดับตอนที่ #18 : [[R.S.]]Business Management::Chapter.13::7.3.12

Review Sheet of Business Management

Chapter 13 Test :: 7.Mar.12

Chapter.13 :: Organizational Structure [[Page.296]]

13-1 Understanding How Organizational Structures Work [[Page 298]]

-        Companies adopt organizational structures in order to minimize confusion over job expectations.

-        An organization chart is a visual representation of a business's organizational structure.

-        Companies generally adopt one of four organizational structures:

·       Line structure

·       Line and staff structure

·       Matrix structure

·       Team structure

-        In a line organization, authority originates at the top and moves downward in a line.

·       All managers perform line functions, functions that contribute directly to company profits. Line organizations are common among small businesses.

-        In mid-sized and large companies, other employees are hired to help line managers do their jobs. These employees perform staff functions.

·       Staff functions advise and support line functions.

ð  They contribute only indirectly to corporate profits.

ð  Staff people are specialists in one field, and their authority is normally limited to making recommendations to line managers.

-        A matrix structure allows employees from different departments to come together temporarily to work on special project teams.

·       The purpose of this is to allow companies the flexibility to respond quickly to a customer need by creating a team of people who devote all of their time to a project.

·       Companies that undertake very large projects use matrix structure.

-        A team structure brings together people with different skills in order to meet a particular objective.

·       It is believed to be more effective than the traditional structure (in which each level of management reports to a higher management level)

-        Organizations can be classified as:

·       A flat structure is an organization that has a small number of levels and a broad span of management at each level.

ð  Employees have more power within the company.

ð  Advantages: greater job satisfaction, more delegation, increased communication between levels of management.

·       A tall structure is an organization that has many levels with small spans of management.

ð  Power is centralized on the top levels and there is more employee control.

ð  Advantages: greater control and better performance.

13-2 Creating An Organizational Structure [[Page 306]]

-        The most important factors that affect the choice of organizational structure are the size of the business and the kinds of products or services it produces.

-        The size of a business has a very important effect on the organizational structure that a management adopts.

·       Companies with only a few employees can function well without a formal structure.

-        Businesses go through 3 organizational life cycle stages: growth through creativity; growth through direction; and growth through delegation, coordination, and collaboration.

·       Stage 1: Growth through creativity = entrepreneurs with new ideas create products or services for which there is a market. Management skills are not very important but having an idea that appeals to consumers is very important.

·       Stage 2: Growth through direction = company grows in size, and the company founder is no longer solely responsible for all decision making. Managers then create written policies, procedures, and plans.

·       Stage 3: Growth through delegation = businesses delegate more responsibility to lower-level employees in an attempt to decentralize decision making.

1.     It motivates people at lower level, whose jobs become more interesting.

2.     It allows senior executives to devote more of their time to long-term management issues.

-        The type of product or service a company produces is another important factor affecting its organizational structure.

·       The number of levels within an organization increases as the level of technical complexity increases.

-        All but the smallest companies are organized into departments.

·       Some businesses organize their departments by work function. These functions include:

~ Production: refers to the actual creation of a company’s goods or services

~ Marketing: involves product development, pricing, distribution, sales, and advertising

~ Finance: refers to maintaining a company’s financial statements and obtaining credit so that a company can grow

~ Human resources: deals with hiring employees & placing them in appropriate job.

ð  Advantages: allows functional specialization, save company money by allowing it to use its equipment and resources most efficiently, etc.

ð  Disadvantages: conflicts may develop between departments with different goals, manager skills scope is narrow, etc.

·       Under the departments organize by product, a single manager oversees all the activities needed to product and market a particular product.

ð  Advantages: identify which products are profitable, provide opportunities for training executive personnel by letting them experience a broad range of functional activities, etc.

ð  Disadvantages: departments can become overly competitive, activities are duplicated across departments, etc.

·       Some companies organize their operations by geographical region. Some also can organize by type of customer.

-        Three examples of leadership positions for the company are committees, chief executive officers, and boards of directions.

·       A committee is an organized group of people appointed to consider or decide upon certain matters. It can be permanent or temporary.

·       Senior managers are led by a chief executive officer, the most important executive in a company. Together with other senior managers, the CEO..

ð  Sets the company’s objectives and makes decisions about meeting them

ð  Determine who fills senior management positions

ð  Develops the company’s long-term strategies

ð  Attends the company’s annual stockholders’ meeting & answers questions about company’s activities

ð  Takes charge of the company in a crisis

ð  Works with the board of directors

·       A board of directors is the legal representative of a company’s stockholders.

ð  Headed by a chairperson, the board approves the most important decisions made by the company’s chief executive officer.

ð  Senior company managers who serve on the company’s board of directors are known as inside board members.

ð  Directors who do not work for the company are known as outside board members.

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