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Unformatted text preview: PART 3: ORGANIZING CHAPTER 5 - BASIC ORGANIZATION DESIGNS LEARNING OUTCOMES (PPT 5-2 & 5-3) After reading this chapter students should be able to: 1. Identify and define the six elements of organization structure. 2. Describe the advantages and disadvantages of work specialization. 3. Contrast authority and power. 4. Identify the five different ways by which management can departmentalize. 5. Contrast mechanistic and organic organizations. 6. Summarize the effect on organization structures of strategy, size, technology, and environment. 7. Contrast the divisional and functional structures. 8. Explain the strengths of the matrix structure. 9. Describe the boundaryless organization and what elements have contributed to its development. 10. Explain what is meant by the term “learning organization.” 11. Describe what is meant by the term “organization culture.” Opening Vignette SUMMARY For decades, Coke and Pepsi have been involved in a neck and neck race to dominate the soft drink market, and both have spent millions on product development, research, and marketing. Both take their market share seriously, and muster all their competitive energies to grow market share. For both soft-drink companies, their greatest growth has come in non-carbonated beverages like bottled waters and varieties of teas. At Coke, for example, non-carbonated drinks now account for approximately 12 percent of company sales and company leaders estimate that the number can be close to 25 percent within the next 2 years. To achieve that goal, new leaders at Coke have created an environment where they want employees to be innovative and take some risk. But such a culture may have contributed to an embarrassment for Coke---one that they would sure like to forget. At the center of a controversy which cost some Coke executives their jobs and left a black mark on the company’s image was the introduction of Frozen Coke. After a few Coke employees presented company officials with data that indicated that this new product would generate strong demand, Coke encouraged Burger King to introduce the Frozen Coke product. After Burger King spent nearly $65 million to add the equipment to dispense the product in each of its restaurants nationwide, Burger King Part 3 - Organizing executives were dumbfounded when the product wasn’t selling as well as Coke promised. Then, one of Coke’s internal auditors blew the whistle, claiming Coke rigged the market tests in Richmond, Virginia. Consultants were paid, according to this auditor, to take children to selected Burger King locations and spend $10,000 in Richmond Burger King restaurants on this new product. Burger King is suing Coke to get back the money it lost due to Coke’s behavior....
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- Spring '11
- The Wealth of Nations, Basic Organization Designs