2. Copyright © Glencoe/McGraw-Hill Slide 1 of 16 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 13.2 Creating an Organizational Structure In this section: Sometimes managers help create the organizational structure of their company. This section discusses: Factors Affecting Organizational Structure Organizing a Company into Departments Understanding the Role of Company Leadership

3. Copyright © Glencoe/McGraw-Hill Slide 2 of 16 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 13.2 Creating an Organizational Structure What You’ll Learn The different ways in which companies organize their departments. Why a company’s structure needs to change as the company grows. The role of the chief executive officer. The role of the board of directors.

4. Copyright © Glencoe/McGraw-Hill Slide 3 of 16 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 13.2 Creating an Organizational Structure Why It’s Important Managers both help create and work within organizational structures.

5. Copyright © Glencoe/McGraw-Hill Slide 4 of 16 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 13.2 Creating an Organizational Structure Key Terms committee chief executive officer board of directors

6. Copyright © Glencoe/McGraw-Hill Slide 5 of 16 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 13.2 Creating an Organizational Structure Factors Affecting Organizational Structure Size Type of Service or Product A job design describes the work an individual or group of individuals is supposed to perform. It has two parts:

7. Copyright © Glencoe/McGraw-Hill Slide 6 of 16 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 13.2 Creating an Organizational Structure

8. Copyright © Glencoe/McGraw-Hill Slide 7 of 16 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 13.2 Creating an Organizational Structure Organizing a Company into Departments Organizing Departments by Work Functions Organizing Departments by Product Organizing Departments in Other Ways

9. Copyright © Glencoe/McGraw-Hill Slide 8 of 16 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 13.2 Creating an Organizational Structure Organizing Departments by Work Functions Production—the actual creation of a company’s goods or services. Marketing—product development, pricing, distribution, sales, and advertising. Finance—maintains financial statements and obtains credit so company can grow. Human resources—hires employees and places them in appropriate jobs.

10. Copyright © Glencoe/McGraw-Hill Slide 9 of 16 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 13.2 Creating an Organizational Structure

11. Copyright © Glencoe/McGraw-Hill Slide 10 of 16 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 13.2 Creating an Organizational Structure

12. Copyright © Glencoe/McGraw-Hill Slide 11 of 16 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 13.2 Creating an Organizational Structure Understanding the Role of Company Leadership Three examples of leadership roles in organizational structures include: 1.Committees 2.Chief Executive Officer 3.Board of Directors

13. Copyright © Glencoe/McGraw-Hill Slide 12 of 16 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 13.2 Creating an Organizational Structure Committees Guidelines for choosing and managing a committee are: clearly define the committee’s function establish authority figures within a committee set clear goals for members to attain decide on the limits of a committee’s power

14. Copyright © Glencoe/McGraw-Hill Slide 13 of 16 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 13.2 Creating an Organizational Structure Chief Executive Officer The chief executive officer (CEO) is the top executive in a company. Along with other senior managers, the CEO: sets the company’s objectives makes decisions about meeting the company’s objectives determines who fills senior management positions cont.

15. Copyright © Glencoe/McGraw-Hill Slide 14 of 16 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 13.2 Creating an Organizational Structure Chief Executive Officer cont. develops the company’s long-term strategies attends the company’s annual stockholders’ meeting and answers questions about the company’s activities takes charge of the company in a crisis works with the board of directors

16. Copyright © Glencoe/McGraw-Hill Slide 15 of 16 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 13.2 Creating an Organizational Structure Board of Directors The role of the board of directors includes: being the legal representative of a company’s stockholders (a company’s owners) approving the most important decisions made by the company’s CEO examining all major decisions to ensure that they are in the best interest of the company’s stockholders

17. Copyright © Glencoe/McGraw-Hill Slide 16 of 16 BUSINESS MANAGEMENT Real-World Applications & Connections GLENCOE Section 13.2 Creating an Organizational Structure Fact and Idea Review 1.What are the three organizational stages a company will go through? 2.Name two different ways a company can organize its departments. 3.Explain some of the duties of a chief executive officer. 4.What is the difference between an inside board member and an outside board member? 5.How can a manager increase committee efficiency?