Business Essentials: Organizing the Business and Operations Management

Vocabulary practice flashcards covering organizational structures, delegation, forms of departmentalization, operations and transformation processes, facility layouts, materials management, and quality control systems from Chapters 6 and 7 of Business Essentials.

Organizational Structure

The specification of the jobs to be done within an organization and the ways in which they relate to one another.

Organization Chart

A diagram depicting a company's structure and showing employees where they fit into its operations.

Chain of Command

The reporting relationships within a company.

Job Specialization

The process of identifying the specific jobs that need to be done and designating the people who will perform them.

Departmentalization

The process of grouping jobs into logical units, such as by product, process, function, customer, or geography.

Profit Center

A 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.

Centralized Organization

An organization in which most decision-making authority is held by upper-level management.

Decentralized Organization

An organization in which a great deal of decision-making authority is delegated to levels of management at points below the top.

Flat Organizational Structure

A structure characteristic of decentralized companies with relatively few layers of management and a relatively wide span of control.

Tall Organizational Structure

A structure characteristic of centralized companies with multiple layers of management and a relatively narrow span of control at upper levels.

Span of Control

The number of people supervised by one manager.

Delegation

The process through which a manager allocates work to subordinates, consisting of assigning responsibility, granting authority, and creating accountability.

Responsibility

The duty to perform an assigned task within the delegation process.

Authority

The power to make the decisions necessary to complete an assigned task.

Accountability

The obligation employees have for the successful completion of an assigned 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

A 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

An organizational structure in which authority is determined by the relationships between group functions and activities.

Divisional Structure

An organizational structure in which corporate divisions operate as autonomous businesses under the larger corporate umbrella.

Matrix Structure

An organizational structure created by superimposing one form of structure onto another, either permanently or as a temporary measure for a specific project.

International Organizational Structures

Approaches to organizational structure developed in response to the need to manufacture, purchase, and sell in global markets.

Team Organization

An organizational design that relies almost exclusively on project-type teams, with little or no underlying functional hierarchy.

Learning Organization

An organization that 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

An organization that has little or no formal structure, with only a handful of permanent employees, a very small staff, and a modest administrative facility.

Informal Organization

The network, unrelated to the firm's formal authority structure, of everyday social interactions among company employees.

Informal Groups

Groups of people within an organization who decide to interact among themselves outside the formal structure.

Grapevine

The informal communication network that runs through an organization.

Intrapreneuring

The process of creating and maintaining the innovation and flexibility of a small-business environment within the confines of a large organization.

Operations (Production)

The activities involved in making products—goods and services—for customers.

Production

The application of resources such as people and machinery to convert materials into finished goods and services.

Service Operations (Service Production)

Activities producing intangible and tangible products, such as entertainment, transportation, and education.

Goods Operations (Goods Production)

Activities producing tangible products, such as radios, newspapers, buses, and textbooks.

Utility

A product's ability to satisfy a human want or need.

Operations (Production) Management

The systematic direction and control of the activities that transform resources into finished products that create value for and provide benefits to customers.

Operations (Production) Managers

Managers responsible for ensuring that operations activities create value and provide benefits to customers by managing people and machinery in converting materials and resources into finished goods and services.

Operations Process

The set of methods and technologies used to produce a good or a service.

Make-to-Order Operations

Activities designed for one-of-a-kind or custom-made production.

Make-to-Stock Operations

Activities designed for producing standardized products for mass consumption.

Low-Contact System

A level of customer contact in which the customer need not be part of the system to receive the service.

High-Contact System

A level of customer contact in which the customer is part of the system during service delivery.

Operations Capability (Production Capability)

The special ability that production does especially well to outperform the competition.

Capacity

The amount of a product that a company can produce under normal conditions.

Capacity Planning

Determining the amount of a product that a company can produce under normal conditions.

Location Planning

Determining where production will happen based on costs and flexibility.

Layout Planning

Planning for the layout of machinery, equipment, and supplies.

Process Layout (Custom-Product Layout)

A physical arrangement of production activities that groups equipment and people according to function.

Product Layout (Same-Steps Layout)

A physical arrangement of production steps designed to make one type of product in a fixed sequence of activities according to its production requirements.

Assembly Line Layout

A same-steps layout in which a product moves step by step through a plant on conveyor belts or other equipment until it is completed.

Fixed-Position Layout

A layout in which labor, equipment, materials, and other resources are brought to the geographic location where all production work is done.

Quality

A combination of characteristics of a product or service that bear on its ability to satisfy stated or implied needs.

Methods Improvement

An approach to reduce waste and inefficiency by examining procedures on a step-by-step basis.

Materials Management

The process by which managers plan, organize, and control the flow of materials from sources of supply through distribution of finished goods.

Supplier Selection

The process of finding and choosing suppliers from whom to buy materials and services.

Purchasing

The acquisition of the materials and services that a firm needs to produce its products.

Transportation

Activities involved in transporting resources to the producer and finished goods to customers.

Warehousing

The storage of incoming materials for production and finished goods for distribution to customers.

Inventory Control

The process of receiving, storing, handling, and counting of all raw materials, partly finished goods, and finished goods.

Quality Control

The action of ensuring that operations produce products that meet specific quality standards.

Total Quality Management (TQM)

All activities involved in getting high-quality goods and services into the marketplace.

Value-Added Analysis

The process of evaluating all work activities, materials flows, and paperwork to determine the value that they add for customers.

Quality Improvement Team

A TQM tool in which collaborative groups of employees from various work areas work together to improve quality by solving common shared production problems.

ISO 9000

A program certifying that a factory, laboratory, or office has met the quality management standards set by the International Organization for Standardization.

ISO 14000

A certification program attesting to the fact that a factory, laboratory, or office has improved its environmental performance.

Business Process Reengineering

The rethinking and radical redesign of business processes to improve performance, quality, and productivity.