Business Management Chapter 8 Study Guide & Terms

Organizational Chart

It is a chart that depicts the position in the firm and the way its employees and management are arranged.

Information that a traditional organization chart conveys

The boxes convey the different clusters of jobs. The titles in the boxes show the work that each unit performs. The solid lines show reporting and authority relationships and each horizontal layer indicates one level of management or all people of the same rank.

Differentiation

Means that the organization is made up of several different units that each work on different tasks using different skills and work methods.

Division of Labor

Work in the organization is subdivided into smaller tasks.

Specialization

How different groups and people perform smaller parts of the organization's overall work.

Integration

Where differentiated work units work together and coordinate their efforts into an overall product.

Coordination

Procedures that enable the organization to achieve the organization's overall mission or goal.: Procedures that enable the organization to achieve the organization's overall mission or goal.

Remember, the more highly __________________ your firm, the greater the need for _________________.

1. DIFFERENTIATED

2. INTEGRATION

Authority

Telling other people below you what to do because you are in charge (Superior). - Vice President

Informal Authority

People who have a lot of experience and are expertise in the matter but are not the boss and don't have the managing position.

What are the 3 major duties that the Board of Directors performs?

1. Selecting, assessing, rewarding, and if it comes up, replacing the CEO.

2. Determining the firm's strategic direction and reviewing financial performance.

3. Ensuring ethical, socially responsible, and legal conduct.

Roles of the CEO

- The president of the organization

- incharge of the whole company

- Make major corporate decisions

- Main point of communication

- Deals with the big problems

Top Management Teams are typically composed of?

- CEO

- President

- Chief operating officer

- Chief financial officer

- Chief information officer

- Chief human resources officer

- Other key executives

What is the trend for U.S. businesses regarding the number of hierarchical levels?

- To reduce the number of hierarchical levels

- Flat structure

- Fewer layers create efficiency and reduce expenses.

What is meant by span of control?

- The number of employees that are lower than you (Subordinates) who report directly to an executive or supervisor.

- The number of people that report to you.

What is considered a good number of direct reports?

5 people

Situations where a wide spread is appropriate?

- Work is clearly defined and unambiguous.

- Subordinates are highly trained and have access to information.

- Managers are capable and supportive of subordinates.

- Subordinates have similar jobs and are related on comparable performance measures.

- Subordinates prefer autonomy and independence.

- The organization is small.

Delegate

When a manager assigns a task to someone at a lower level often requiring the subordinate to report back to them stating how well it was done.

Responsibility

when assigned a task that person must complete it and the manager also delegates enough authority to get it done.

Accountability

The right that the subordinate manager has to expect the job to be performed and the right to take corrective action if the subordinate fails to complete the task.

Benefits of delegation

- Leverages the mangers energy and talent

- Able to accomplish much more.

- Save time

- So you are able to devote energy to more important things

- Develops effective subordinates

- Delegation benefits the organization and the people

Steps of Effective Delegation

1. Define the goal - manager must have a clear understanding of the outcome they want to achieve

2. Select the person for the task - especially useful when employee can benefit from developing new skills through experience.

3. Ask for the Subordinates views about suggested approaches.

4. Give the subordinate the authority, time, and resources to perform the assignment.

5. Review progress at appropriate intervals. Check ups between manager and subordinate.

Difference between centralized and decentralized

- Who makes the decisions

- Centralized: higher level executives make the decisions and pass them down for lower levels implementation.

- Decentralized: Lower level managers make important decisions. Decisions made by those who are most affected and have the most relevant knowledge.

- Decentralization often speeds decision making.

Centralized Organization

higher level executives make the decisions and pass them down for lower levels implementation.

Decentralized Organization

Lower level managers make important decisions. Decisions made by those who are most affected and have the most relevant knowledge

Line Departments

Responsible for the principal activities of the firm. Units that deal with organization's primary goods and services.

Staff Departments

The people that provide specialized or professional expertise that support the line departments.

The three basic approaches to departmentalization are...

Functional

Divisional

Matrix

Functional Organization

- Companies where jobs and departments are specialized and grouped according to business function and the skills they require.

- Departmentalizing around specialized activities such as productions, marketing, and human resources.

Divisional Organization

Departmentalization that groups units around the products, customers, or geographical regions.

Matrix Organization

- Hybrid forms of organization were functional and divisional forms overlap.

- An organization composed of dual reporting relationships in which some employees report to two superiors - a functional manager and a divisional manager.

"unity-of-command principle."

It states that a person should only have one boss.

A structure in which each worker reports to one boss, who in turn reports to one boss.

What does the Matrix Organization do?

The matrix structure can speed decisions and cut costs.

Network Organization

Collection of independent mostly single function firms that collaborate to produce a good or service.

Hierarchy of Needs Management Theory

- Believed that basic unmet needs occupy the mind, preventing the pursuit of needs higher up in the pyramid.

- Needs drive human behavior and make people feel fulfilled.

- Circumstances and environments can influence the needs people are focused on at a time

- Drives human behavior and promote well-being

Human Relations Management Theory

a theory that emphasizes how social factors, such as positive relationships and clear communications between managers and employees play a crucial role in boosting motivation and productivity levels in businesses

Systems Theory

The theory focuses on the basis that a large organization will function most effectively if each open system or component works together in harmony, interacts with one another (collaboration).

ADMINISTRATIVE MANAGEMENT THEORY

DIVISION OF WORK

AUTHORITY

DISCIPLINE

UNITY OF COMMAND

UNITY OF DIRECTION

COLLECTIVE INTEREST OVER INDIVIDUAL INTEREST

REMUNERATION

CENTRALIZATION

SCALAR CHAIN

ORDER

EQUITY

STABILITY OF TENURE OF PERSONNEL

INITIATIVE

ESPRIT DE CORPS - "TEAM SPIRIT"

Bureaucratic Management Theory

structured, formal network of relationships among specialized positions in an organization.