2014 Cengage Learning. All Rights Reserved.

May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 All organizations wrestle with structural
design and reorganization
The deployment of organizational resources to
achieve strategic goals
Division of labor
Lines of authority
Coordination

Organizing is important because it follows

from strategy
2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Organizing structure defines:
The set of formal tasks assigned to
individuals and departments

Formal reporting relationships

The design of the systems to ensure effective

coordination

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 Work Specialization is the degree to which
organizational tasks are subdivided into
individual jobs; also called division of labor

Chain of Command is an unbroken line of

authority that links all individuals in the
organization and specifies who reports to
whom

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4
 Authority is vested in organizational
positions, not people
Authority flows down the vertical hierarchy
Authority is accepted by subordinates

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 Responsibility is the duty to perform the task
or activity as assigned
Accountability is the mechanism through
which authority and responsibility are
aligned
Delegation is the process managers use to
transfer authority and responsibility down
the chain

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6
Line departments perform primary business
tasks
Sales
Production

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Staff departments support line departments
Marketing
Labor relations
Research
Accounting
Human Resources

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Line authority means that people in
management positions have formal
authority to direct and control immediate
subordinates
Staff authority is narrower and includes the
right to advise, recommend, counsel in the
staff specialists area of expertise

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 The number of employees reporting to a
supervisor
Less supervision/larger spans of control
Work is stable and routine
Subordinates perform similar work
Subordinates are in one location
Highly trained/require little direction
Rules and procedures are defined
Few planning or nonsupervisory activities
Managers preference
2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Tall structure have more levels and
narrow span
Flat structure have a wide span
and fewer levels

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Centralization decision authority is located
near the top of the organization
Decentralization decision authority is
pushed downward to all levels
Factors that influence centralization versus
decentralization:
Change and uncertainty are usually
associated with decentralization
Strategic fit
Crisis requires centralization

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Basis for grouping positions into departments
and departments into the total organization
Vertical functional approach
Grouping of positions into departments
based on skills, expertise, work activities, and
resource use

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13
 Divisional approach
Grouping based on organizational output
Product, program, business
Geographic or Customer-based divisions
group activities by geography or customer

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 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
15
 Matrix approach combines functional and
divisional approaches
Improve coordination and information
Dual lines of authority
Team approach is a very widespread trend
Allows managers to delegate authority
Flexible, responsive

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 Extends idea of horizontal coordination and
collaboration
Could be a loose interconnected group
i.e., outsourcing

Virtual network structure means that the firm

subcontracts most of its major functions to
separate companies

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 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Companies need more flexibility than
vertical structure can offer
Meet fast-shifting environment
Break down barriers between departments
Need integration and coordination

Lack of coordination and cooperation can

cause information problems
Growing global challenge

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 Radical redesign of business
processes to achieve dramatic
improvements in cost, quality,
service, and speed

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 Frequent, timely, problem-solving
communication carried out through
[employee] relationships of shared goals,
shared knowledge, and mutual respect.

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 Business performance is
influenced by structure

Strategic goals should drive

structure

Structure should facilitate

strategic goals

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 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Knowledge, tools, techniques, and activities
should match production activities
Manufacturing firms can be categorized
according to:
Small-batch and unit production
Large-batch and mass production
Continuous process production
The technical complexity of each type of
firm differs
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