Organization Structure Chapter Eight Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

8-2 Learning Objectives LO 1 Explain how differentiation and integration influence an organization’s structure. LO 2 Summarize how authority operates. LO 3 Define the roles of the board of directors and the chief executive officer. LO 4 Discuss how span of control affects structure and managerial effectiveness. LO 5 Explain how to delegate effectively.

8-3 Learning Objectives (cont.) LO 6 Distinguish between centralized and decentralized organizations. LO 7 Summarize the ways organizations can be structured. LO 8 Identify the unique challenges of the matrix organization. LO 9 Describe important integrative mechanisms.

8-4 Fundamentals of Organizing  Organization chart  The reporting structure and division of labor in an organization

8-5 Conventional Organization Chart Figure 8.1

8-6 Fundamentals of Organizing  Differentiation  the organization is composed of many different units that work on different kinds of tasks, using different skills and work methods.  Integration  degree to which differentiated work units work together and coordinate their efforts

8-7 Authority in Organizations  Authority  The legitimate right to make decisions and to tell other people what to do.

8-8 Hierarchical Levels  Hierarchy  The authority levels of the organizational pyramid  Corporate governance  The role of a corporation’s executive staff and board of directors in ensuring that the firm’s activities meet the goals of the firm’s stakeholders

8-9 Delegation  Delegation  The assignment of new or additional responsibilities to a subordinate  Responsibility, Authority, and Accountability

8-10 Steps in Effective Delegation Figure 8.2

8-11 Decentralization  Centralized organization  An organization in which high-level executives make most decisions and pass them down to lower levels for implementation  Decentralized organization  An organization in which lower-level managers make important decisions

8-12 The Functional Organization Figure 8.3

8-13 The Divisional Organization  Divisional organization  Departmentalization that groups units around products, customers, or geographic regions.

8-14 The Matrix Organization  Matrix organization  An organization composed of dual reporting relationships in which some managers report to two superiors—a functional manager and a divisional manager

8-15 A Network Organization Figure 8.7