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Chapter 8 GMS200.docx

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Ryerson University
Global Management Studies
GMS 200
Ricardo Reyes

Chapter 8: Organization Structures and Design Monday November 19, 2012 Functions of Management  Process of getting things done through others  Managers plan, organize, lead and control the use of resources to accomplish performance goals Organizing as a Management Function  An organization is a social entity composed of two or more people who work together to achieve a common goal  In order to work, organizations must work as a cohesive unit, by using formal structures of reporting and control Organizing  Process of allocating resources toward achievement of long term goals  Organizing entails the development of strategic resources to achieve strategic goals  Three Key elements to organizing are: o Dividing work o Arranging recourses o Coordinating activities Organizational Structure  Organizational Structure - set of formal tasks, reporting relationships, and communication linkages assigned to individuals and departments (Job Description)  Ensure effective coordination of employees across departments (hierarchy of authority)  Development of resources is reflected in the division of labor, and there are formal lines of authority and mechanisms for coordinating diverse goals  Organizational structure includes provisions of division of labor (who does what), hierarchy of authority, (who’s in charge) and span of control Formal Structures  Organization chart describes the arrangement of work position and reporting relationships within an organization  Reveals o Division of work o Supervisory relationships o Communication channels o Major sub units o Levels of management Informal Structures  “Shadow organization” made up of the unofficial but often critical working relations between organizational members o Coworkers and others to whom they turn most often for help o Who you communicate with often o Energize/de-energize them  Advantages o Help accomplish work/overcome limits of formal structures o Allow people to gain access to interpersonal networks that satisfy needs for social interaction o Facilitates informal learning that takes place as people interact informally throughout workday  Disadvantages o Activities work against best interest of organization o Susceptibility of rumors o May carry inaccurate information o Breed resistance to change o Diversion of work efforts from important objectives o Feelings of alienations by “outsiders” – people left out of groups Division of Labor  Employees are assigned specific jobs  Provided with training to execute tasks relevant to their function  Employees given authority to execute job without being micro managed Modern trends in business  Moving away from classical division of labor (above). Now we cross train employees in the jobs of their coworkers  New Theory is Theory Y and Chris Agyris Adult Personality, allowing employees to know each others jobs and allow them to be flexible for the organization they work for Traditional Organization Structures  Traditional principle of organizing is that performance gains are possible when people can specialize  In traditional organizations, practice has been to group jobs into logical divisions (departments) Approaches to Organizations  Functional Structures o People with similar skills and performing similar tasks are grouped together into formal work units o Area of expertise o Advantages  Economies of scale (efficient use of resources)  Tasks assignments consistent with training and expertise  High quality technical problem solving  In depth training and skill development within functions  Clear career paths within functions o Disadvantages  Difficulties pinpointing responsibilities for cost containment, product or service  Quality, timeliness, and innovation  Functional chimneys problem, lack of communication and coordination because people don’t communicate with others  Problem solving across functions  Sense of cooperation and common purpose breaks down  Narrow view of performance objectives  Decisions made by top managers  Divisional/Departmentalization o Group together people who work on same product/process/serve same customers/located in same area o Groups organizational function into a division o Product  Group together people or jobs in a single product or service  Identify costs, products, problems, and successes in a market area with a central point of accountability o Geographical  Group together jobs and activities in the same location or geographical region  Used when there is a need t
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