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2. © 2008 The McGraw-Hill Companies, Inc. All rights reserved 6 - 2ChapterChapter McGraw-Hill/Irwin Organizational Structure and Communication 6

3. 6 - 3Introduction Organization structure determines who works together It is the way managers design their firms to achieve their organizations mission and goals Organizational communication flows through its structure, which affects: behavior human relations performance

4. 6 - 4 The transition from an economy based on materials to an economy based on flows of information has created considerable challenges for organizational structure, and communication.

5. 6 - 5 Principles of Organization (1 of 3) Division of Labor and Departmentalization Division of labor, or work specialization – refers to the degree to which tasks are subdivided into separate jobs Departmentalization – grouping of related activities into units Chain of Command line of authority from the top to the bottom of the organization, which is shown in an organization chart

6. 6 - 6 Principles of Organization (2 of 3) Span of Management refers to number of employees reporting to a manager Centralized and Decentralized Authority With centralized authority, top managers make important decisions With decentralized authority, middle and first-line managers make important decisions where the action is

7. 6 - 7 Principles of Organization (3 of 3) Coordination With the division of labor and departmentalization comes the need to coordinate the work of all departments

8. 6 - 8Questions and Answers for Designing Organizational Structure: QuestionsAnswers How should we subdivide work?Division of Labor and Departmentalization Who should departments and individuals report to? Chain of Command How many individuals should report to each manager? Span of Management At what level should decisions be made? Centralization vs. Decentralization How do we get everyone to work together as a team? Coordination

9. 6 - 9Formal Organization Structure President Vice President Production Vice President Finance Vice President Marketing Manager A Manager B Manager C Manager D Manager E Manager F Manager G Manager H Manager I Vertical downward communication Vertical upward communication Exhibit 6.2

10. 6 - 10Informal Organization Structure President Vice President Production Vice President Production Vice President Finance Vice President Finance Vice President Marketing Vice President Marketing Manager A Manager A Manager B Manager B Manager C Manager C Manager D Manager D Manager E Manager E Manager F Manager F Manager G Manager G Manager H Manager H Horizontal communication networks Exhibit 6.2

11. 6 - 11 Common Types of Departmentalization (1 of 4) Divisional Territory Matrix Product Customer Functional

12. 6 - 12 Common Types of Departmentalization (2 of 4) Functional Departmentalization involves organizing departments around essential input activities, such as: production and operations finance and accounting marketing and sales human resources Product (Service) Departmentalization involves organizing departments around goods and services provided

13. 6 - 13 Common Types of Departmentalization (3 of 4) Customer Departmentalization involves organizing departments around the needs of different types of customers with unique needs calling for different sales staffs and products Divisional Departmentalization (M-Form) the firm develops independent lines of business that operate as separate companies, all contributing to the corporation profitability Territory (Geographic) Departmentalization involves organizing departments in each area in which the enterprise does business

14. 6 - 14 Common Types of Departmentalization (4 of 4) Matrix Departmentalization combines the functional and product departmental structures Combination many large companies have more than one form of departmentalization

15. 6 - 15 Contemporary Organization Design Virtual Organizations Boundaryless Organizations E-Organizations Learning Organizations Team Organizations and Reengineering

16. 6 - 16 American and Japanese Organization Structures Division of labor tends to be a bit less specialized in Japan Both countries use the same types of departmentalization American organizations tend to be quicker to hire, lay off, and to change jobs than the Japanese

17. 6 - 17 Organizational Communication Organizational communication – the compounded interpersonal communication process across an organization Communication flows in an organization are: Vertical Horizontal Grapevine (multidirectional)

18. 6 - 18 Vertical and Horizontal Communication Vertical Communication The flow of information both up and down the chain of command Formal communication Recognized as official Status and power are not equal among participants in vertical communication Horizontal Communication The flow of information between colleagues and peers Informal communication Does not follow the chain of command Not recognized as official

19. 6 - 19 Grapevine Communication Grapevine – the informal vehicle through which messages flow throughout the organization When the grapevine allows employees to know about a management decision almost before it is made, management must be doing something right.

20. 6 - 20 Communication Networks Communication networks – sets of employees who have stable contact through which information is generated and transmitted Two major types of communication networks: 1. within organizations 2. within departments and small groups

21. 6 - 21 Message Transmission Channels Oral Communication Written Communication Nonverbal Communication

22. 6 - 22 Oral Communication Media Face-to-Face Telephone Meetings Presentations

23. 6 - 23 Written Communication (1 of 2) With increased use of e-mail, managers substitute face-to-face communication with e- mail Communication Objective Guidelines Memos Letters Reports Bulletin board notices Posters Computers/e-mail Fax

24. 6 - 24 Written Communication (2 of 2) Writing skills Grammar – rules for use of the eight parts of speech To simplify grammar, we use subjects, predicates, modifiers, and connectives

25. 6 - 25 Nonverbal Communication Facial Expressions Vocal Qualities Gestures Posture

26. 6 - 26 Emotions (1 of 2) Emotional labor – requires the expression of desired emotions during interpersonal relations Universal emotions: –happiness –surprise –fear –sadness –anger –disgust

27. 6 - 27 Emotions (2 of 2) Understanding Feelings Feelings are subjective – they tell you peoples attitudes and needs Feelings are usually disguised as factual statements Feelings are neither right nor wrong but behavior is Gender Differences Global Differences

28. 6 - 28 Dealing with Emotional Employees Calming the emotional person Use reflecting responses

29. 6 - 29Criticism Getting Criticism Giving Criticism

30. 6 - 30 Guidelines for Giving Effective Criticism Give more praise than criticism Criticize immediately Criticism should be performance oriented Give specific and accurate criticism Open on a positive note and close by repeating what action is needed