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Unformatted text preview: 3-18-2008 Organizational Structure and Organizational Change I. Organizational Structure a. Functional Structure i. R and D, Marketing, Sales, Finance, etc. ii. Advantage can be more productive iii. Causes a lack of coordination 1. Finance is interested in cheapest, marketing is popular, engineering want s a safe product, etc. b. Product Divisional Structure i. Insurance 4 kinds/ divisions each division has their own functions 1. Home 2. Auto 3. Health 4. Life ii. Self-contained autonomous units 1. Decentralization 2. Advantage - If someone is dot doing well you can remove them. 3. Disadvantage redundant functions of the units. a. Life insurance has one marketing strategy and health has another. c. Area Divisional structure i. Insurance 4 places they may do business then division by product or by function 1. Asia 2. Europe 3. N. America 4. S. America d. Mat r ix Structure( pg. 219) i. Insurance ii. Advantage can look at two directions at the same t ime. Can take advantage of Europe and S. America because. iii. Disadvantage 1. reporting to two bosses and having command conflict 2. delayed decision making iv. Under divisional you reach a quicker decision life Health auto home domestic Europe Asia S. America e. Strategy vs. Structure i. Strategy always comes first I I. Organizational Concepts (3 concepts) a. Chain of Command i. Vertical line that f lows from the top to the bottom. 1. Top is the CEO and the bottom is the factory worker b. Line and Staff i. Lines are the managers/ support units ii. Staff are the employees c. Span of Control i. Best span for a manager is 7 people according to Harvard business school ii. Tall businesses are more expensive because they have more managers. iii. Taller is a tighter form of control iv. Wider is looser control ...
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