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MGTA01H3 Lecture Notes - Profit Center, Departmentalization, Defense Information Systems Agency

Management (MGT)
Course Code
H Laurence

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Chapter 8
Organizing the Business Enterprise
1. The elements that influence a firm’s organizational structure.
Organizational Structure: The specification of the jobs to be done within a
business and how those jobs relate to one another. (Each firm has its own unique
Organization chart
A physical depiction(묘사) of the company’s structure showing employee titles and
their relationship to one another. (Refer to p111 diagram)
Chain of Command
Reporting relationships within a business; the flow of decision-making power in a firm
The first step in developing the structure (for all businesses)
-Specialization: Determining who will do what
-Departmentalization: determining how people performing certain tasks can
best be grouped together.
A. Job Specialization: The process of identifying the specific jobs that need to be
done and designating the people who will perform them.
Job Specialization becomes necessary when the firm grows.
Advantages: more efficient, easier to learn, easier to replace.
DISA: simple-bored, lose sight of contributions.
B. Departmentalization: After jobs are specialized, must be grouped.
Advantage: Division of Activities, Control/coordination easier, good view for top
managers. This allows firms to treat each department as profit centre [A separate
company unit responsible for its won costs and profits].
(Managers group jobs logically: Functional, customer, product, geographic, process
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