2 Management Structures SECTION 11.1Management StructuresWhat You'll LearnHow horizontally organized companies differ from traditionally organized companiesThe three levels of managementHow a self-managing team functions
3 Management Structures SECTION 11.1Management StructuresWhy It's ImportantYou will probably have an opportunity to work in management at some point in your career—maybe earlier than you might think. Management involves communication and interpersonal skills. A job in management is a challenge for anyone, and a basic understanding of management structure and functions, presented in this section, will give you an advantage.
5 Management Structures SECTION 11.1Management StructuresTypes of Management StructuresManagement is the process of reaching goals through the use of human resources, technology, and material resources. To facilitate effective management, businesses are organized in two ways:verticallyhorizontally
6 Management Structures SECTION 11.1Management StructuresVertical OrganizationThere are three levels of management in vertically organized companies:top managementmiddle managementsupervisory-level managementSlide 1 of 4
7 Management Structures SECTION 11.1Management StructuresVertical OrganizationTop management are those who make the planning decisions that affect the whole company. Top management job titles include:Chief Executive OfficerPresidentChief Operating OfficerVice PresidentSlide 2 of 4
8 Management Structures SECTION 11.1Management StructuresVertical OrganizationMiddle management implements the decisions of top management. They communicate with and support supervisory-level managers.Slide 3 of 4
9 Management Structures SECTION 11.1Management StructuresVertical OrganizationSupervisory-level management supervises the activities of employees who carry out the tasks determined by the plans of middle and top management. They assign duties and evaluate the work of production or service employees.Slide 4 of 4
10 Management Structures SECTION 11.1Management StructuresHorizontal OrganizationHorizontal organization involves self-managing teams that set their own goals and make their own decisions. This type of management structure is organized by process instead of function and is customer-oriented.Slide 1 of 4
11 Management Structures SECTION 11.1Management StructuresHorizontal OrganizationSelf-Managing Teams Instead of reporting up a chain of command, employees are organized into teams that manage themselves. Each team has an "owner" who has ultimate responsibility for ensuring the team meets its goals. He or she acts like a coach.Slide 2 of 4
12 Management Structures SECTION 11.1Management StructuresHorizontal OrganizationOrganization by Process Teams of people with different specializations are organized around processes, such as developing new products or providing customer support. Team members share opinions, decisions, and responsibility for the team's success or failure.Slide 3 of 4
13 Management Structures SECTION 11.1Management StructuresHorizontal OrganizationCustomer Orientation Teams get their direction from the customer, rather than from management.Customer satisfaction should produce large profits, high productivity, and satisfied investors.Slide 4 of 4
14 Reviewing Key Terms and Concepts ASSESSMENT11.1Reviewing Key Terms and Concepts1. What is the principal difference between the structure of a vertical company and the structure of a horizontal company?2. What are the three levels of management?3. Why did many companies choose to downsize in the 1980s and 1990s?4. What is the role of the "owner" in a self-managing team?
15 ASSESSMENT Thinking Critically 11.1 Would you feel more comfortable in a traditional company where you answered to only one supervisor or in a horizontal company where you have many people giving you feedback about your efforts? Compare the advantages of each organizational model, as you see them.