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Chapter 8.docx

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Global Management Studies
Course Code
GMS 200
Shavin Malhotra

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Chapter Eight: Organization Structures and Design 1. Organizing: the process of arranging people and other resources to work together to accomplish a goal 2. Organization structure: the system of tasks workflows, reporting relationships, and communication channels that link together diverse individuals and groups 3. Organizing – Formal Structure: the structure of the organization in its official state – an organization chart is a diagram describing reporting relationships and the formal arrangement of work positions within an organization – it helps identify the division of work, supervisory relationships, communication channels, major subunits, and levels of management 4. Different types of formal structures: i. Functional structures: Advantages: job specialization, high-quality technical problem solving, in-depth training and skill development, clear career paths within functions, economies of scale with efficient use of resources Disadvantages: lack of coordination between different functions, delay in turnaround, pass-off failures, functional chimneys problem (a lack of communication and coordination across functions) ii. Divisional structures – by geography/products: Advantages: more flexibility, improved coordination, and expertise focused on specific customers, products, and regions Disadvantages: duplication of resources, competition and poor coordination across divisions, emphasis on divisional goals at expense of organizational goals iii. Matrix structures: Advantages: better cooperation across functions, increased flexibility in restructuring, better customer service, improved decision making, and improved strategic management Disadvantages: two-boss system is susceptible to power struggles; two-boss system can create task confusion and conflict in work priorities iv. Network structures: a central core that is linked through networks of relationships with outside contractors and suppliers of essential services – own only core components and use strategic alliances or outsourcing to provide other components Advantages: firms can operate with fewer full-time employees and less complex internal systems, reduced overhead costs and increased operating efficiency, permits operations across great distance Disadvantages: control and coordination problems may arise from network complexity; potential loss of control over outsources activities, potential lack of loyalty among contractors v. Virtual structures: uses IT and the
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