MGT100H1 Lecture Notes - Lecture 2: Departmentalization, Strategic Business Unit, Transformational Leadership
Management and Leadership
● What managers do: Plan, organize, direct, control
● What leaders do: communicate core values and beliefs, lead change
● Before we manage
○ We usually start careers as individual contributors to the organization
○ We provide technical capability, effort, loyalty, etc.
○ Once promoted to management, we have employees reporting to us
● Leadership vs. Management
○ Management: planning and budgeting, organizing and staffing, controlling
activities and solving problems
○ Leadership setting direction, aligning people, motivating and inspiring,
engagement, vision, activating people to believe what they are doing
● Planning
○ Strategic
■ Formulation (SWOT), implementation, evaluation
■ Define business they are in, define how they are going to compete
○ Tactical
■ “How to” (how to compete, what to emphasize)
○ Operational
■ Marketing, production, finance, etc.
■ Each department if your business have departments will come up with a
plan for implementing a competitive business strategy
○ Contingency
■ Preparing for environmental stage
■ What are the threats, etc.
● Organizing
○ Managers make decisions about appropriate types of authority (line, staff,
committee)
○ Managers make decisions about optimal structures for meeting strategic goals
○ Types of authority
■ Line authority: people report up to you
● The chain of command is direct and is indicated by a solid line in
the organization chart
○ Authority flows in a straight line
○ Authority flows from top to bottom
● Line departments
○ Departments linked directly to the production and sale of a
product whose success is vital to the firm
● Line employees
○ The “doers” in a department who must make the right
decisions in order make the firm a success
■ Staff authority: You have people who do the work for you that you request
and they report it
● Staff that advise or provide support to line managers
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○ Do not have line authority to make decisions
○ Assist line managers in doing their jobs more efficiently
○ Ex: marketing research department has new knowledge
about marketing in Alberta, they don’t report to you, they
report to marketing research president
● Staff authority is indicated by a dotted line in the organization
chart
○ Legal staff, marketing research
■ committee/team authority: have office, positions, have reporting lines, etc.
○ Elements of organizational structure
■ Span of control
● The number of subordinates that a manager is responsible for
supervising
○ Wide span - many subordinates
○ Narrow span - very few subordinates
● Complicated tasks require more supervision and a narrow span of
control
○ Ex: only 2 or 3 of you in IT control will report to each
manager because their job is really complicated (narrow
chart)
■ Degree of centralization
■ Formalization
■ Departmentalization
○ Tall and flat organizations
■ Tall organizational structure
● Many layers of management
○ Too many + rigidity and bureaucracy
● Flat organizational structure
○ Few layers of management
■ Too few = chaos and inefficiency
○ Degree of centralization
■ How much of the decision making power is held by a small group of
people
● Highly centralized ex: McDonald's
○ They tell you exactly what to do, how to do it, etc.
○ Centralization: top managers reserve most of the decision
making rights for themselves
● Decentralized ex: Sysco, Magna
○ The people who run each factory and their management
teams have to make a lot of decisions
○ Sysco: food distribution company that has geographic
areas, and those local area geographic presidents try to
grow their business
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MGT100H1 Full Course Notes
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Document Summary
What managers do: plan, organize, direct, control. What leaders do: communicate core values and beliefs, lead change. We usually start careers as individual contributors to the organization. We provide technical capability, effort, loyalty, etc. Once promoted to management, we have employees reporting to us. Management: planning and budgeting, organizing and staffing, controlling activities and solving problems. Leadership setting direction, aligning people, motivating and inspiring, engagement, vision, activating people to believe what they are doing. Define business they are in, define how they are going to compete. How to (how to compete, what to emphasize) Each department if your business have departments will come up with a plan for implementing a competitive business strategy. Managers make decisions about appropriate types of authority (line, staff, committee) Managers make decisions about optimal structures for meeting strategic goals. Line authority: people report up to you. The chain of command is direct and is indicated by a solid line in the organization chart.
