Learning Objectives
LO 1 Explain how differentiation and integration influence an organization’s structure.
LO 2 Summarize how authority operates.
LO 3 Define the roles of the board of directors and the chief executive officer.
LO 4 Discuss how span of control affects structure and managerial effectiveness.
LO 5 Explain how to delegate effectively.
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Organization StructureChapter EightMcGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.Learning ObjectivesLO 1 Explain how differentiation and integration influence an organization’s structure.LO 2 Summarize how authority operates.LO 3 Define the roles of the board of directors and the chief executive officer.LO 4 Discuss how span of control affects structure and managerial effectiveness.LO 5 Explain how to delegate effectively.8-*Learning Objectives (cont.)LO 6 Distinguish between centralized and decentralized organizations.LO 7 Summarize the ways organizations can be structured.LO 8 Identify the unique challenges of the matrix organization.LO 9 Describe important integrative mechanisms.8-*Conventional Organization Chart8-*Figure 8.1Fundamentals of OrganizingDifferentiation the organization is composed of many different units that work on different kinds of tasks, using different skills and work methods.Integration these differentiated units are put back together so that work is coordinated into an overall product8-*Differentiation Division of laborThe assignment of different tasks to different people or groupsSpecialization A process in which different individuals and units perform different tasks8-*Integration CoordinationThe procedures that link the various parts of an organization for the purpose of achieving the organization’s overall mission8-*Authority in OrganizationsAuthorityThe legitimate right to make decisions and to tell other people what to do.8-*Delegation DelegationThe assignment of new or additional responsibilities to a subordinateResponsibility, Authority, and Accountability8-*Advantages of DelegationLeverages managers’ energy and talentAllows managers to accomplish more than they could on their ownHelps develop effective subordinates.Promotes a sense of being an important, contributing member of the organization, so employees tend to feel a stronger commitment, perform their tasks better, and engage in more innovation8-*DecentralizationCentralized organizationAn organization in which high-level executives make most decisions and pass them down to lower levels for implementationDecentralized organizationAn organization in which lower-level managers make important decisions8-*The Functional OrganizationFunctional organizationDepartmentalization around specialized activities such as production, marketing, and human resources.8-*The Divisional Organization8-*Figure 8.4The Matrix OrganizationMatrix organizationAn organization composed of dual reporting relationships in which some managers report to two superiors—a functional manager and a divisional manager8-*The Network OrganizationNetwork organization A collection of independent, mostly single-function firms that collaborate on a good or service8-*