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Textbook notes Ch.7-Organizing the Business Enterprise

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University of Toronto Scarborough
Management (MGT)
Chris Bovaird

CHAPTER 7: ORGANIZING THE BUSINESS ENTERPRISE WHAT IS ORGANIZATIONAL STRUCUTRE Organizational structure: the specification of the jobs to be done within a business and how these jobs relate to one another The Chain of Command Organization chart: a physic,O05L.9L43419K0.425,38897:.9:708K4ZL3J025O4009L9O08 and their relationship to one another chain of command: reporting relationships within a business, the flow of decision making power in firm THE BUILDING BLOCKS OF ORGANIZATIONAL STRUCUTRE 1) Specialization: the process of identifying the specific jobs that need to be done and designating the ppl who will perform them - all organizations have one major job, which is broken down into its components (assigned to each individual) Specialization and growth - job specialization is a natural part of organizational growth - not a new idea or limited to factory work Adv: - individual job can be performed more efficiently - jobs easier to learn - easier to replace ppl who leave the organization Disavg: - if carried too far and jobs become too narrowly defined, ppl get bored - derive less satisfaction from their jobs - lose sight of how their contribution fit into the overall organization 2) Departmentalization: the process of grouping jobs into logical units - departmentalized companies benefit from the division of activities - control and coordination are narrowed and made easier, and top managers can see more easily how various units are performing - allow firm to treat a department as profit center: a separate company unit responsible for its own costs and profits - managers group them logically, according to some common thread or purpose ex. Functional, customer, product, geographic, process lines (combos too) ESTABLISHING THE DECIONS MAKING-HIERARCHY - Managers must explicitly define reporting relationships among positions so that everyone will know who has responsibility for various decisions and operations - major Q: who makes which decisions answer almost never focuses on an individual or small group. Refer to decision making hierarchy
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