Mgt 111 ch 8

Divison of labor

The division of labor is the assignment of different tasks to different people or groups in order to improve efficiency and productivity.

Job specialization

the process of focusing on a specific task or role within a job, allowing workers to become more skilled and efficient in that area.

Departmentalization

the process of dividing a business or organization into different departments, each specializing in specific tasks or activities to improve efficiency and management.

Economies of scale

The situation in which companies can reduce their production costs if they can purchase raw materials in bulk; the average cost of goods goes down as production levels increase.

fayol’s principles of organization

• Unity of command

• Hierarchy of authority

• Divison of labor

• Subordination of individual interest to the general interest

• Authority

• Degree of centralization

• Clear communication channels

• Order

• Equity

• Esprit de corps

Max Weber and organizational theory

• job descriptions

• Written rules, guidelines, records

• Consistent procedures, regulation, policies

• Staffing and promotion based on qualification

Hierarchy

system in which one person is at the top of the organization and there is a ranked or sequential ordering from the top down of managers who are responsible to that person.

Chain of command

The line of authority that moves from the top of a hierarchy to the lowest level.

Organization chart

A visual device that shows relationships among people and divides the organization’s work; it shows who is accountable for the completion of specific work and who reports to whom.

Bureaucracy

An organization with many layers of managers who set rules and regulations and oversee all decisions.

Centralized authority

An organizational structure in which decision-making authority is maintained at the top level of management at the company headquarters

Decentralized authority

An organizational structure in which decision-making authority is delegated to lower-level managers more familiar with local conditions than headquarters management could be.

Span of control

The optimal number of employees a manager supervises or should supervise.

Tall organizational structure

An organizational structure in which the pyramidal organization chart would be quite tall because of the various levels of management.

Flat organizational structure

An organizational structure that has few layers of management and a broad span of control.

Line organization

An organization that has direct two-way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with all people reporting to only one supervisor.

Line personnel

Employees who are part of the chain of command that is responsible for achieving organizational goals.

Staff personnel

Employees who advise and assist line personnel in meeting their goals.

Matrix organization

An organization in which specialists from different parts of the organization are brought together to work on specific projects but still remain part of a line-and-staff structure.

Cross functional self managed teams

Groups of employees from different departments who work together on a long-term basis.

Networking

The process of establishing and maintaining contacts with key managers in one’s own organization and other organizations and using those contacts to weave strong relationships that serve as informal development systems.

Real time

The present moment or the actual time in which something takes place.

Virtual corporation

A temporary networked organization made up of replaceable firms that join and leave as needed.

Benchmarking

Comparing an organization’s practices, processes, and products against the world’s best.

Core competencies

Those functions that the organization can do as well as or better than any other organization in the world.

Restructuring

Redesigning an organization so that it can more effectively and efficiently serve its customers.

Inverted organization

An organization that has contact people at the top and the chief executive officer at the bottom of the organization chart.

Organizational culture

Widely shared values within an organization that provide unity and cooperation to achieve common goals.

Formal organization

The structure that details lines of responsibility, authority, and position; that is, the structure shown on organization charts.

Informal organization

The system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority outside the formal organization; that is, the human side of the organization that does not appear on any organization chart.