Key Terms

Organizational structure

the vertical and horizontal configuration of departments, authority, and jobs within a company

Organizational process

the collection of activities that transform inputs into outputs that customers value

Departmentalization

subdividing work and workers into separate organizational units responsible for completing particular tasks

Functional departmentalization

organizing work and workers into separate units responsible for particular business functions or areas of expertise

Product departmentalization

organizing work and workers into separate units responsible for producing particular products or services

Customer departmentalization

organizing work and workers into separate units responsible for particular kinds of customers

Geographic departmentalization

organizing work and workers into separate units responsible for doing business in particular geographic areas

Matrix departmentalization

a hybrid organizational structure in which two or more forms of departmentalization, most often product and functional, are used together

Simple matrix

a form of matrix departmentalization in which managers in different parts of the matrix negotiate conflicts and resources

Complex matrix

a form of matrix departmentalization in which managers in different parts of the matrix report to matrix managers, who help them sort out conflicts and problems

Authority

the right to give commands, take action, and make decisions to achieve organizational objectives

Chain of command

the vertical line of authority that clarifies who reports to whom throughout the organization

Span of control

the number of individuals who report directly to a manager

Unity of command

a management principle that workers should report to just one boss

Line authority

the right to command immediate subordinates in the chain of command

Staff authority

the right to advise, but not command, others who are not subordinates in the chain of command

Line function

an activity that contributes directly to creating or selling the company’s products

Staff function

an activity that does not contribute directly to creating or selling the company’s products, but instead supports line activities

Delegation of authority

the assignment of direct authority and responsibility to a subordinate to complete tasks for which the manager is normally responsible

Centralization of authority

the location of most authority at the upper levels of the organization

Decentralization

the location of a significant amount of authority in the lower levels of the organization

Standardization

solving problems by consistently applying the same rules, procedures, and processes

Job design

the number, kind, and variety of tasks that individual workers perform in doing their jobs

Job specialization

a job composed of a small part of a larger task or process

Job rotation

periodically moving workers from one specialized job to another to give them more variety and the opportunity to use different skills

Job enlargement

increasing the number of different tasks that a worker performs within one particular job

Job enrichment

increasing the number of tasks in a particular job and giving workers the authority and control to make meaningful decisions about their work

Mechanistic organizations

organizations characterized by specialized jobs and responsibilities; precisely defined, unchanging roles; and a rigid chain of command based on centralized authority and vertical communication

Organic organizations

organizations characterized by broadly defined jobs and responsibility; loosely defined, frequently changing roles; and decentralized authority and horizontal communication based on task knowledge

Intra-organizational process

the collection of activities that take place within an organization to transform inputs into outputs that customers value

Re-engineering

fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical measures of performance, such as cost, quality, service, and speed

Task interdependence

the extent to which collective action is required to complete an entire piece of work

Pooled interdependence

work completed by having each job or department independently contribute to the whole

Sequential interdependence

work completed in succession, with one group’s or job’s outputs becoming the inputs for the next group or job

Reciprocal interdependence

work completed by different jobs or groups working together in a back-and-forth manner

Empowering workers

permanently passing decision-making authority and responsibility from managers to workers by giving them the information and resources they need to make and carry out good decisions

Empowerment

feelings of intrinsic motivation, in which workers perceive their work to have impact and meaning and perceive themselves to be competent and capable of self-determination

Inter-organizational process

a collection of activities that take place among companies to transform inputs into outputs that customers value

Modular organizations

organizations that outsource all other business activities to outside companies, suppliers, specialists, or consultants

Outsourcing

obtaining goods and services from an outside supplier

Business process outsourcing (BPO)

contracting operations of a specific business process to a third-party service provider

Virtual organization

groups of geographically and/or organizationally distributed participants who collaborate toward a shared goal using a combination of information and communications technologies to accomplish a task