1. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Chapter Eight Organization, Teamwork, and Communication

2. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Issues in Developing an Organization The Right Structure Necessary Areas of Specialization Degree of Departmentalization

3. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Specialization Dividing labor into small, specific tasks and assigning employees to do a single task.

4. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Departmentalization Types: Functional Departmentalization Product Departmentalization Geographical Departmentalization Customer Departmentalization The grouping of jobs into working units

5. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Functional Departmentalization President Distribution Department Finance Department Marketing Department Research and Development Department Production Department

6. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Product Departmentalization President Consumer Tele- communications Equipment Division Computer Electronics Division Industrial Tele- communications Equipment Division Stereo Equipment Division

7. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Geographical Departmentalization Latin American Division European Division Middle East Division Pacific Rim Division President International Operations

8. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Customer Departmentalization Industrial Foods Consumer Foods Product Manager

9. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. The Differences Between Groups and Teams Strong, clearly focused leader Individual accountability The same purpose as the broader organizational mission Creates individual work products Runs efficient meetings Measures its effectiveness indirectly by its effects on others (e.g., financial performance of the business Discusses, decides, and delegates Shared leadership roles Individual and group accountability A specific purpose that the team itself delivers Creates collective work products Encourages open-ended discussion and active problem- solving meetings Measures performance directly by assessing collective work products Discusses, decides, and does real work together Source: Robert Gatewood, Robert Taylor, O.C. Ferrell, Management: Comprehension, Analysis, and Application (Homewood, IL: Austen Press, 1995), 427. Working GroupTeam

10. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Types of Groups Committee Task Force Project Team –Product-development team Quality Assurance Team Self-directed Work Team (SDWT)

11. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Virtual Teams Employees’ Reactions To Virtual Work –91% enjoyed the experience –73% would like to engage in virtual work more frequently –35% felt it enhanced their relationships with other employees Source: Darryl Haralson and Adrienne Lewis, “USA Today Snapshots,” USA Today, April 26, 2001, p. B1.

12. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Assigning Responsibility and Delegating Authority Delegation of Authority Assigning Responsibility Employee Accountability

13. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Degree of Centralization Centralized Organizations –Authority is concentrated at the top and very little decision- making authority is delegated to lower levels Decentralized Organizations –Decision-making authority is delegated as far down the chain of command as possible

14. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Span of Management: Wide Span and Narrow Span Wide Span: Flat Organization Narrow Span: Tall Organization

15. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Span of Management: Organizational layers

16. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Forms of Organizational Structure Line Line-and-staff Multidivisional Matrix

17. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Line Structure OwnerManager Assistant Manager Hourly Employee Convenience Store

18. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Line-and-Staff Structure Plant Manager Engineering Human Resources Production Manager Supervisor Employees Line relationship Staff relationship

19. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. An Example of Multidivisional Structure: The Walt Disney Company Source: The Walt Disney Company Annual Report CEO Walt Disney Attractions Walt Disney Studios Consumer Products Motion Pictures TVAnimation Disney Channel Magic Kingdom CA Tokyo Disneyland Euro- Disney Walt Disney World Disney Stores LicensingPublishing Disney Music Software and Education Catalog Marketing Magic Kingdom FL Epcot Center Disney- MGM Studios

20. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. The Matrix Structure General Manager Functional Manager General Project Manager Manager Project A Manager Project B Manager Project C

21. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. The Flow of Communication in an Organizational Hierarchy CEO Vice President Manager Upward Downward Horizontal Diagonal Upward Downward Horizontal Diagonal

22. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Formal Communication Upward communication flow Downward communication flow Horizontal communication flow Diagonal communication flow

23. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Informal Communication The informal organization The grapevine

24. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Organizational Culture The firm’s shared values, beliefs, traditions, philosophies, rules, and heroes. FAST FACT: Southwest Airlines employees are continually encouraged to have fun and make flying exciting for their passengers. New employees watch videotapes and attend training sessions on the company’s philosophies, policies, and culture.

25. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Solve the Dilemma 1.What techniques or skills should an employee have to assume a leadership role within a work group? 2.If each work group has a team representative, what problems will be faced in supervising these representatives? 3.Evaluate the pros and cons of the system developed by QS.

26. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Explore Your Career Options What is the main quality of employees who will be successful in their job? Explain how this quality is helpful in a small business and in a large company.

27. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Additional Discussion Questions and Exercises 1.Which organizational structure would be best in the following situations? Draw an organizational chart that would be appropriate for each of the situations. a.The owner of a real estate agency has opened an office with three real estate agents. The owner directs the agency. b.The real estate agency above has grown in the last five years. The business has grown in two different directions: residential and commercial. The owner still directs the real estate agency. He now has five agents handling commercial real estate details and 15 agents handling residential real estate details. He would like to appoint one of the agents to be manager of a commercial division and another agent to be manager of the residential division.

28. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Additional Discussion Questions and Exercises c.Another five years has elapsed. The same real estate agency has grown. Most of the business is still centered in two divisions: residential and commercial. The owner has now added a vice president to oversee the residential and commercial divisions. Also, the agency has added advertising and office management departments; the purpose of these staff departments is to provide advice and support to the residential and commercial divisions.

29. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Chapter 8 Quiz 1.Which of the following is most similar to the matrix structure? a.line structure b.functional structure c.line-and-staff structure d.ad hoc committee 2.Which of the following is commonly considered an example of informal organizational structure? a.grapevine b.organizational culture c.organizational chart d.employee handbook

30. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Chapter 8 Quiz 3.Compared with flat organizations, which of the following is most typical of tall organizations? a.The span of management is wide. b.The communication is faster. c.Administrative costs are usually higher. d.Fewer layers of management are needed to carry out operations. 4.The division of labor into small, specialized tasks and the assignment of single tasks to employees is called a.centralization. b.specialization. c.departmentalization. d.accountability.

31. McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Multiple Choice Questions about the Video 1.Which of the following best describes Big Apple Bagel? a.decentralized b.centralized c.concentrical d.recentralized 2.St. Louis Bread Company introduced ________ in order to address the authority and task boundaries that occur with growth. a.dysfunctional and team-managed work groups b.functional and self-managed work teams c.cross-functional and self-managed work teams d.functional and team-managed work groups