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Vocabulary flashcards for Chapter 6, covering key terms related to organizing a business.
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Organizational Structure
Specification of the jobs to be done within an organization and the ways in which they relate to one another.
Organization Chart
Diagram depicting a company’s structure and showing employees where they fit into its operations.
Chain of Command
Reporting relationships within a company.
Specialization
Determining who will do what.
Departmentalization
Determining how people performing certain tasks can best be grouped together.
Job Specialization
The process of identifying the specific jobs that need to be done and designating the people who will perform them.
Departmentalization
Process of grouping jobs into logical units such as product, process, function, customer, or geography.
Profit Center
Separate company unit responsible for its own costs and profits.
Functional Departmentalization
Dividing an organization according to groups’ functions or activities.
Product Departmentalization
Dividing an organization according to specific products or services being created.
Process Departmentalization
Dividing an organization according to production processes used to create a good or service.
Customer Departmentalization
Dividing an organization to offer products and meet needs for identifiable customer groups.
Geographic Departmentalization
Dividing an organization according to the areas of the country or the world served by a business.
Establishment of a Decision-Making Hierarchy
Deciding who will be empowered to make which decisions and who will have authority over others.
Centralized Organization
Organization in which most decision-making authority is held by upper-level management.
Decentralized Organization
Organization in which a great deal of decision-making authority is delegated to levels of management at points below the top.
Flat Organizational Structure
Characteristic of decentralized companies with relatively few layers of management.
Tall Organizational Structure
Characteristic of centralized companies with multiple layers of management.
Span of Control
Number of people supervised by one manager.
Delegation
Process through which a manager allocates work to subordinates.
Assigning responsibility
The duty to perform an assigned task.
Granting authority
The power to make the decisions necessary to complete the task.
Creating accountability
The obligation employees have for the successful completion of the task.
Line Authority
Organizational structure in which authority flows in a direct chain of command from the top of the company to the bottom.
Staff Authority
Authority based on expertise that usually involves counseling and advising line managers.
Staff Members
Advisers and counselors who help line departments in making decisions but who do not have the authority to make final decisions.
Committee and Team Authority
Authority granted to committees or teams involved in a firm’s daily operations.
Work Team
Group of operating employees who are empowered to plan and organize their own work and to perform that work with a minimum of supervision.
Functional Structure
Organization structure in which authority is determined by the relationships between group functions and activities.
Divisional Structure
Organizational structure in which corporate divisions operate as autonomous businesses under the larger corporate umbrella.
Matrix Structure
Organizational structure created by superimposing one form of structure onto another; may be temporary.
International Organizational Structures
Approaches to organizational structure developed in response to the need to manufacture, purchase, and sell in global markets.
Team organization
Relies almost exclusively on project-type teams, with little or no underlying functional hierarchy.
Learning organization
Works to facilitate the lifelong learning and personal development of all of its employees while continually transforming itself to respond to changing demands and needs.
Virtual organization
Has little or no formal structure, a handful of permanent employees, a small staff, and a modest administrative facility.
Informal Organization
Network, unrelated to the firm’s formal authority structure, of everyday social interactions among company employees.
Informal groups
Groups of people who decide to interact among themselves.
Grapevine
Informal communication network that runs through an organization.
Intrapreneuring
Process of creating and maintaining the innovation and flexibility of a small-business environment within the confines of a large organization.