1. Copyright © Cengage Learning. All rights reserved.7 | 1 Chapter Seven Creating a Flexible Organization

2. Copyright © Cengage Learning. All rights reserved.7 | 2 Learning Objectives 1.Understand what an organization is and identify its characteristics. 2.Explain why job specialization is important. 3.Identify the various bases for departmentalization. 4.Explain how decentralization follows from delegation. 5.Understand how the span of management describes the organization. 6.Understand how the chain of command is established by using line and staff management.

3. Copyright © Cengage Learning. All rights reserved.7 | 3 Learning Objectives (cont’d) 7.Describe the four basic forms of organizational structure: bureaucratic, matrix, cluster, and network team. 8.Summarize the use of corporate culture, intrapreneurship, committees, coordination techniques, informal groups, and the grapevine.

4. Chapter 7 Outline –What Is an Organization? Developing Organization Charts Five Steps for Organizing a Business –Job Design Job Specialization The Rationale for Specialization Alternatives to Job Specialization –Departmentalization By Function– By Customer By Product– Combination of Bases By Location –Delegation, Decentralization, and Centralization Delegation of Authority Decentralization of Authority Copyright © Cengage Learning. All rights reserved.

5. Chapter 7 Outline (cont.) –The Span of Management Wide and Narrow Spans of Control Organizational Height –Chain of Command: Line and Staff Management Line and Staff Positions Compared Line-Staff Conflict –Forms of Organizational Structure The Bureaucratic Structure – The Cluster Structure The Matrix Structure – The Network Structure –Additional Factors That Influence an Organization Corporate Culture– Coordination Techniques Intrapreneurship– The Informal Organization Committees Copyright © Cengage Learning. All rights reserved.

6. 7 | 6 What Is an Organization? A group of two or more people working together to achieve a common set of goals Developing organization charts –Organization chart –Chain of command –Staff (advisory) positions

7. Copyright © Cengage Learning. All rights reserved.7 | 7 Five Steps to Organizing a Business 1.Job design 2.Departmentalization 3.Delegation 4.Span of management 5.Chain of command

8. Copyright © Cengage Learning. All rights reserved.7 | 8 Job Design Job specialization Rationale for specialization Alternatives to job specialization –Job rotation –Job enlargement –Job enrichment

9. Grouping jobs into manageable units Common bases for departmentalization –By function –By product –By location –By customer –Combinations Copyright © Cengage Learning. All rights reserved.7 | 9 Departmentalization

10. Copyright © Cengage Learning. All rights reserved.7 | 10 Delegation, Decentralization, and Centralization Delegation –Assigning part of a manager’s work and power to other workers –Responsibility –Authority –Accountability

11. Copyright © Cengage Learning. All rights reserved.7 | 11 Steps in the Delegation Process The manager assigns responsibility The subordinate is empowered to do the task Ultimate accountability remains with the manager

12. Copyright © Cengage Learning. All rights reserved.7 | 12 Decentralization of Authority Decentralized organization Centralized organization Factors favoring decentralization

13. Copyright © Cengage Learning. All rights reserved.7 | 13 The Span of Management (cont’d) Organizational height –Flat organizations –Tall organizations

14. Copyright © Cengage Learning. All rights reserved. 7 | 14 Chain of Command: Line and Staff Management Line management position Line authority Staff management position Advisory authority Functional authority

15. Copyright © Cengage Learning. All rights reserved. Line-Staff Conflict Reasons for conflict Minimizing conflict 7 | 15

16. Copyright © Cengage Learning. All rights reserved. Forms of Organizational Structure Bureaucratic structure –Characteristics –Advantages –Disadvantages Matrix structure 7 | 16

17. Copyright © Cengage Learning. All rights reserved. The Matrix Structure (cont’d) Advantages Disadvantages 7 | 17

18. Copyright © Cengage Learning. All rights reserved. Forms of Organizational Structure (cont’d) Cluster structure –Strengths –Weaknesses Network structure (virtual organization) –Strengths –Weaknesses 7 | 18

19. Copyright © Cengage Learning. All rights reserved. Additional Factors That Influence an Organization Corporate culture –Indicators of corporate culture –Cultural change is needed when 7 | 19

20. Copyright © Cengage Learning. All rights reserved. 7 | 20 Types of Corporate Cultures Networked culture Mercenary culture Fragmented culture Communal culture

21. Copyright © Cengage Learning. All rights reserved. 7 | 21 Additional Factors That Influence an Organization (cont’d) Intrapreneurship –Intrapreneur Committees –Types –Positive aspects –Negative aspects

22. Copyright © Cengage Learning. All rights reserved. 7 | 22 Additional Factors That Influence an Organization (cont’d) Coordination techniques Informal organization –Informal groups –The grapevine