Organization, Teamwork, and Communication

LO 7-1: Explain the importance of organizational culture.
LO 7-2: Describe how organizational structures develop.
LO 7-3: Describe how specialization and departmentalization help an organization achieve its goals.
LO 7-4: Determine how organizations assign responsibility for tasks and delegate authority.
LO 7-5: Compare and contrast some common forms of organizational structure.
LO 7-6: Understand the role of groups and teams in organizations.
LO 7-7: Describe how communication occurs in organizations.

Organizational structure is crucial as it:
- Determines decision-making efficiency.
- Determines organizational response to problems.
- Influences employee attitudes toward work.
- Can minimize costs and maximize efficiency.
Different industries may employ varying organizational structures:
- Example: Ford Motor Co. uses a traditional hierarchical structure, while Tesla utilizes a flatter structure by combining functions.

Definition: Organizational culture encompasses a firm’s shared values, beliefs, traditions, principles, rules, and role models for behavior; also referred to as corporate culture.
Importance:
- Establishes the tone for decision-making and organizational structure.
- Influences stakeholder satisfaction, particularly customers.
Ways to express organizational culture:
- Formally: Mission statements, codes of ethics, manuals, and memos.
- Informally: Dress codes, work habits, and employee interactions.
- Example: Grant Thornton's unlimited vacation policy is a reflection of their culture focusing on autonomy.
Companies with noted positive workplace cultures (ranked by employees):
- 1. Microsoft
- 2. IBM
- 3. Google
- Additional mentions include HubSpot, Elsevier, and Estée Lauder.
Organizational culture affects the entire firm, including responses and values towards customer interactions. Example of Chick-fil-A’s culture emphasizing friendliness through the phrase “my pleasure.”
Case Study: Clothing retailer Everlane faced criticisms regarding their internal culture, resulting in changes to their code of ethics.

Structure: The arrangement or relationship of positions within an organization.
Organizations must implement structure to achieve common objectives, achieved by:
1. Assigning work tasks.
2. Coordinating activities to achieve objectives.
Illustration of growth in organizational structure using a clothing store example:
- Phase 1: Sole proprietorship handling all tasks.
- Phase 2: Hiring of additional staff as business grows.
- Phase 3: Increased need for department managers as the business expands.
- Figure 7.1: Displays stages of growth and organizational chart.

Definition: The division of labor into small, specific tasks assigned to employees for efficiency.
Example: Adam Smith's straight pin manufacturing shows efficiency gains through specialization:
- Individual productivity: 200 pins/day (10 workers, each crafting a complete pin).
- Specialized productivity: 48,000 pins/day (10 workers assigned specific tasks).
Benefits: Increased efficiency, reduced training time, reduced gross task management.
Challenges: Overspecialization can lead to boredom and dissatisfaction among employees.

Definition: The grouping of jobs into working units, also called departments.
Types of departmentalization:
- Functional Departmentalization: Jobs grouped based on similar functions (e.g., finance, marketing).
- Product Departmentalization: Organized around specific products (e.g., Procter & Gamble by product divisions).
- Geographical Departmentalization: Arranged by location to better serve regional needs (e.g., Coca-Cola’s geographic operating segments).
- Customer Departmentalization: Arranged around customer needs (e.g., airlines offering services tailored to business versus leisure travel).

Responsibility: The obligation assigned to employees to complete tasks satisfactorily.
Accountability: Employees must be answerable to a superior for the outcomes of their work.

Definition: Assigning tasks and granting power to make decisions necessary to complete those tasks.
Example: At Nestlé, a marketing manager assigns a task to redesign a package, granting the needed authority for making decisions.
Centralized vs. Decentralized Organizations:
- Centralized: Authority concentrated at the top with minimal delegation (e.g., U.S. Army).
- Decentralized: Authority delegated to lower management levels to enhance responsiveness (e.g., Johnson & Johnson).

Common Forms:
- Line Structure: Direct lines of authority from top to bottom.
- Line-and-Staff Structure: Combines line managers with specialized staff managers for support.
- Multidivisional Structure: Organizes departments into divisions for specific products or markets to speed decision-making.
- Matrix Structure: Combines functional and product-based departments to create dual authority roles for flexibility and faster project execution.
Each modeling option has its benefits and drawbacks; careful selection is key to meeting company objectives.

Definition of Groups vs. Teams:
- Group: A collection of individuals working together without shared accountability.
- Team: A cohesive unit where members collaborate towards common goals; they have shared leadership and accountability.
Types of Teams:
- Committees: Permanent groups for ongoing tasks.
- Task Forces: Temporary groups for specific changes.
- Project Teams: Teams that have control over a specific project.
- Quality-Assurance Teams: Small groups focused on solving quality and productivity issues.
- Self-Directed Teams: Empowered teams responsible for entire work segments, fostering ownership.

Formal Communication: Classified as upward, downward, horizontal, and diagonal.
Informal Communication: Includes the grapevine, which can both positively and negatively influence organizational culture.
Tools for Communication: Utilizing cloud services like Microsoft Teams, Slack, and project management platforms enhances info sharing; concern over overwhelming messages remains.
Effective communication is essential to ensure clarity, foster collaboration, minimize misunderstandings, and enable feedback.

Understanding organizational culture, structure, and effective teamwork contributes to management's capacity to create thriving workplaces.
As teamwork becomes integral to productivity, navigating and improving internal communications stands paramount to achieving overall business success.