ch08 - Ch 8 Organization Structure Prin of Mgmt...

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Page Ch 8 – Organization Structure Prin of Mgmt Fundamentals of Organizing Organization chart – depicts the positions in the firm and the way they are arranged; picture of reporting structure Differentiation – org is composed of many different units that work on different kinds of tasks, using different skills and work methods Created through division of labor and job specialization Division of labor – work of org is subdivided into smaller tasks; various ind and units throughout the org perform diff tasks; assignment of diff tasks to diff people/groups Specialization – process where diff individuals and units perform diff tasks Differentiation used when org has many subunits and many specialists who think differently Integration – differentiated work units work together and coordinate their efforts Coordination – procedures that link the various parts of an org for the purpose of achieving the org’s overall mission; any job activity that inks diff work units The more highly differentiated, the greater the need for integration Focusing on integration slows innovation for a bit The Vertical Structure Authority in Organizations Authority – legitimate right to make decisions and to tell other people what to do Authority resides in positions, rather than in people Owners have ultimate authority Board of Directors – elected by stockholders to oversee the org o Chair – leads and makes major decisions o BOD Duties include: 1) selecting, assessing, rewarding, and maybe replacing CEO, 2) determining the firm’s strategic direction and reviewing financial performance, 3) ensuring ethical, socially responsible, and legal conduct Inside directors – top executives that are also on the board of directors Current trend is to have fewer insiders and more outsiders who can provide diff info and perspectives Chief Executive Officer – occupies top of the org o Current trend is to separate CEO and chairman of board Top Management Team o Composed of CEO, president, chief operating officer, chief financial officer, and other execs o Nowadays, CEOs commonly share authority with top management team Hierarchial Levels Hierarchy – authority levels of the organizational pyramid Michele Yu Hamilton
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Ch 8 – Organization Structure Prin of Mgmt Corporate governance – key responsibility at this level role of a corporation’s exec staff and BOD in ensuring that the firm’s activities meet the goals of the firm’s stakeholders 1 st – CEO, top mgmt 2 nd – middle mgmt managers in charge of plants or dpts 3 rd – operational level lower mgmt and workers office managers, sales managers, supervisors, first-line managers Structure with few horizontal layers saves time and money subunits – subdivision of an org Span of Control Span of control - # of subordinates who report directly to an executive or supervisor narrow spans build a tall org with many levels wide span builds flat org with fewer levels
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ch08 - Ch 8 Organization Structure Prin of Mgmt...

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