Chapter 13

Strength simplicity fast flexible inexpensive to

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Strength: simplicity (fast, flexible, inexpensive to maintain, clear accountability) Weakness: - works best in small org’s (difficult structure to manage in large org) - becomes inadequate b/c low formalization & high centralization → info overload at the top - as size↑, decision-making slows down↓& eventually comes to standstill as single executive makes all decisions The Family Business - face both family/personal & business/management relations (added pressure) - have shareholders (family + others), though may (not) be listed on stock exchange - To manage conflicts: - good governance structure (direction, values to live/work by, accepted policies) - rules of succession & for who gets to work (CEO succession can be complex) - diff. goals (maintain/grow business) than non-family businesses (max. wealth) Bureaucracy → standardization! = org. design w/ highly routine operating tasks achieved thru specialization formalized tasks that are grouped into functional departments centralized authority narrow spans of control decision-making that follows chain of command Strengths - standardizes activities in efficient manner economies of scale employees have opportunity to talk “the same language” w/ peers - lower quality employees are acceptable (rules & regulations substitute for managerial discretion; there is little need for innovative/experienced decision makers) → reduce costs
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P ART 5: R EORGANIZING THE W ORKPLACE Weaknesses - create subunit conflict → functional unit goals can override overall goals of org. e.g. each department acts like a silo (focus more on one’s own values & contribution) - can lead to power concentrated in hands of few & others expected to follow orders w/o question - obsessive concern w/ following rules → can only efficiently confront problems encountered before or for which decision rules already exist Matrix Structure departmentalization has a dual chain of command (2 bosses – functional & product managers) - Functional: group similar specialists (minimize # necessary allows pooling/sharing of specialized resources across products) - Product: facilitate coordination among specialties to achieve on-time completion & meet budget targets - clear responsibility for all activities related to a product Advantages - facilitate coordination when there are too many activities - direct, frequent contact btwn diff. specialties → improved communication (quicker) & more flexibility - reduce silo - efficient allocation of specialists (provides both the best resources) Disadvantages - confusion & ambiguity (frequently unclear who reports to whom) - power struggles btwn functional & product (e.g. manager fights over getting the best specialists assigned to his department) - e.g. M ATRIX S TRUCTURE FOR A F ACULTY OF B USINESS A DMINISTRATION Programs Academic Departments Undergraduate Master’s
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Strength simplicity fast flexible inexpensive to maintain...

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