Section 7 VOCAB- Designing Organizational Structures

authority

Legitimate power, granted by the organization and acknowledged by employees, that allows an individual to request action and expect compliance.

centralization

The degree to which formal authority is concentrated in one area or level of an organization. Top management makes most of the decisions.

chain of command

The line of authority that extends from one level of an organization's hierarchy to the next, from top to bottom, and makes clear who reports to whom.

committee structure

An organizational structure in which authority and responsibility are held by a group rather than an individual.

cross-functional team

Members from the same organizational level but from different functional areas.

customer departmentalization

Departmentalization that is based on the primary type of customer served by the organizational unit.

decentralization

The process of pushing decision-making authority down the organizational hierarchy.

delegation of authority

The assignment of some degree of authority and responsibility to persons lower in the chain of command.

departmentalization

The process of grouping jobs together so that similar or associated tasks and activities can be coordinated.

division of labor

The process of dividing work into separate jobs and assigning tasks to workers.

formal organization

The order and design of relationships within a firm; consists of two or more people working together with a common objective and clarity of purpose.

functional departmentalization

Departmentalization that is based on the primary functions performed within an organizational unit.

geographic departmentalization

Departmentalization that is based on the geographic segmentation of the organizational units.

group cohesiveness

The degree to which group members want to stay in the group and tend to resist outside influences.

informal organization

The network of connections and channels of communication based on the informal relationships of individuals inside an organization.

line organization

An organizational structure with direct, clear lines of authority and communication flowing from the top managers downward.

line positions

All positions in the organization directly concerned with producing goods and services and that are directly connected from top to bottom.

line-and-staff organization

An organizational structure that includes both line and staff positions.

managerial hierarchy

The levels of management within an organization; typically includes top, middle, and supervisory management.

matrix structure (project management)

An organizational structure that combines functional and product departmentalization by bringing together people from different functional areas of the organization to work on a special project.

mechanistic organization

An organizational structure that is characterized by a relatively high degree of job specialization, rigid departmentalization, many layers of management, narrow spans of control, centralized decision-making, and a long chain of command.

organic organization

An organizational structure that is characterized by a relatively low degree of job specialization, loose departmentalization, few levels of management, wide spans of control, decentralized decision-making, and a short chain of command.

organization

The order and design of relationships within a firm; consists of two or more people working together with a common objective and clarity of purpose.

organization chart

A visual representation of the structured relationships among tasks and the people given the authority to do those tasks.

problem-solving teams

Usually members of the same department who meet regularly to suggest ways to improve operations and solve specific problems.

process departmentalization

Departmentalization that is based on the production process used by the organizational unit.

product departmentalization

Departmentalization that is based on the goods or services produced or sold by the organizational unit.

reengineering

The complete redesign of business structures and processes in order to improve operations.

self-managed work teams

Teams without formal supervision that plan, select alternatives, and evaluate their own performance.

span of control

The number of employees a manager directly supervises; also called span of management.

specialization

The degree to which tasks are subdivided into smaller jobs.

staff positions

Positions in an organization held by individuals who provide the administrative and support services that line employees need to achieve the firm's goals.

virtual corporation

A network of independent companies linked by information technology to share skills, costs, and access to one another's markets; allows the companies to come together quickly to exploit rapidly changing opportunities.

work groups

The groups that share resources and coordinate efforts to help members better perform their individual jobs.

work teams

Like a work group but also requires the pooling of knowledge, skills, abilities, and resources to achieve a common goal.