Organizational Structure and Ownership

These flashcards cover key vocabulary and concepts related to organizational structure and ownership, providing definitions for better understanding.

Organizational Structure

The framework that defines how tasks are divided, grouped, and coordinated within an organization.

Differentiation vs. Integration

Differentiation refers to the division of tasks, whereas integration refers to the coordination of these tasks across different units.

Formalization

The process of implementing rules, policies, and procedures to ensure consistency and compliance within an organization.

Centralization

The degree to which decision-making authority is concentrated at the top levels of the organization.

Departmentalization

The process of grouping tasks into departments or categories based on specialization, such as functions, products, or geographical regions.

Interdependence

The degree to which different parts of an organization rely on each other to complete tasks.

Unity of Command

A principle stating that each employee should report to one designated supervisor only.

Span of Control

The number of subordinates that a supervisor manages directly.

Mechanistic Structure

An organizational structure characterized by high levels of complexity, formalization, and centralization.

Organic Structure

An organizational structure that is more flexible, adaptive, and decentralized.

Functional Structure

An organizational structure that groups employees based on their specific skills or tasks.

Matrix Structure

An organizational structure that creates dual reporting relationships, combining functional and product-based structures.

Customer Structure

Organizational structure that is categorized by the types of customers served, addressing their independent needs.

Geographic Structure

An organizational structure based on the various geographical areas in which an organization operates.

Hybrid Structure

An organizational structure that combines elements from different structures to benefit from their respective advantages.

Sole Proprietorship

A business structure owned and operated by one individual, who retains all profits but also all liabilities.

Partnership

A business structure where two or more individuals share management, profits, and liabilities.

Corporation

A legal entity that is separate from its owners, offering limited liability protection and the ability to operate indefinitely.

Franchising

A business model where a franchisor provides support and a brand to franchisees who operate independently.

Mergers and Acquisitions

Mergers involve two companies joining to form one entity, while acquisitions refer to one company purchasing another.