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Chapter 5 Intro to Organizational Structure Business Management 12 Stewart.

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Presentation on theme: "Chapter 5 Intro to Organizational Structure Business Management 12 Stewart."— Presentation transcript:

1 Chapter 5 Intro to Organizational Structure Business Management 12 Stewart

2 Chapter 5, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Fundamentals of Management, Sixth Canadian Edition 5-2 Copyright © 2011 Pearson Canada Inc. Organizational Structure  How job tasks are divided, grouped and coordinated within an organization Organizational Design  A process of developing or changing an organization’s structure  It is comprised of six key elements: (i) work specialization; (ii) departmentalization; (iii) chain of command; (iv) span of control; (v) centralization and decentralization; (vi) formalization Defining Organizational Structure

3 Chapter 5, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Fundamentals of Management, Sixth Canadian Edition 5-3 Copyright © 2011 Pearson Canada Inc.

4 Chapter 5, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Fundamentals of Management, Sixth Canadian Edition 5-4 Copyright © 2011 Pearson Canada Inc. Organizational Structure Work Specialization (division of labour)  The degree to which tasks are divided into separate jobs  Individuals specialize in doing part of a job rather than the entire job  Human diseconomies such as boredom, fatigue, stress, poor quality, increased absenteeism, and higher turnover can occur from overspecialization

5 Departmentalization Functional  Grouping jobs by functions performed Product  Grouping jobs by product line Geographical  Grouping jobs on the basis of territory or geography Process  Grouping jobs on the basis of product or customer flow Customer  Grouping jobs by type of customer and needs

6 Chapter 5, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Fundamentals of Management, Sixth Canadian Edition 5-6 Copyright © 2011 Pearson Canada Inc. Exhibit 5-2a Functional Departmentalization Plant Manager Manager, Manufacturing Manager, Human Resources Manager, Accounting Manager, Engineering Manager, Purchasing + Efficiencies from putting together similar specialties and people with common skills, knowledge, and orientations + Coordination within functional area + In-depth specialization – Poor communication across functional areas – Limited view of organizational goals

7 Chapter 5, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Fundamentals of Management, Sixth Canadian Edition 5-7 Copyright © 2011 Pearson Canada Inc. Exhibit 5-2b Geographical Departmentalization Vice President for Sales Sales Director, Central Region Sales Director, Prairies Region Sales Director, Western Region Sales Director, Eastern Region + More effective and efficient handling of specific regional issues that arise + Serve needs of unique geographic markets better – Duplication of functions – Can feel isolated from other organizational areas

8 Chapter 5, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Fundamentals of Management, Sixth Canadian Edition 5-8 Copyright © 2011 Pearson Canada Inc. Exhibit 5-2c Product Departmentalization +Allows specialization in particular products and services +Managers can become experts in their industry +Closer to customers –Duplication of functions –Limited view of organizational goals Source: Bombardier Annual Report. Bombardier, Ltd. Industrial Equipment Division Recreational and Utility Vehicles Sector Mass Transit SectorRail Products Sector Rail and Diesel Products Division Bombardier–Rotax (Gunskirchen) Recreational Products Division Logistic Equipment Division Mass Transit Division Bombardier–Rotax (Vienna)

9 Chapter 5, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Fundamentals of Management, Sixth Canadian Edition 5-9 Copyright © 2011 Pearson Canada Inc. Exhibit 5-2d Process Departmentalization +More efficient flow of work activities –Can only be used with certain types of products Plant Superintendent Sawing Department Manager Planing and Milling Department Manager Assembling Department Manager Lacquering and Sanding Department Manager Finishing Department Manager Inspection and Shipping Department Manager

10 Chapter 5, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Fundamentals of Management, Sixth Canadian Edition 5-10 Copyright © 2011 Pearson Canada Inc. Exhibit 5-2e Customer Departmentalization + Customers’ needs and problems can be met by specialists – Duplication of functions – Limited view of organizational goals Director of Sales Manager, Wholesale Accounts Manager, Retail Accounts Manager, Government Accounts


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