BU398 Lecture 3: ch.3 Lecture Compiled

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Components of structure: reporting relationships, hierarchy levels, span of control, departments. Identify with one another: collaborate w one another. Functional structure: activities and ppl are grouped together by common function. Functions can be hr, accounting, marketing, manufacturing, design, engineering, legal etc. Max economies of scale from employee specialization. Max in depth knowledge and skills efficient avoid duplication of effort best w limited # of products. If org has only 1 product it has functional structure. Divisional structure: activities and ppl are grouped together by product/organizational output. Adaptation and change rapid response to changes in environment coordination among functional areas in-depth functional expertise efficiency standardization across product lines. Structure is essentially about lines of communication: reporting relationships, hierarchy, span of control, department groupings. Communication across functional areas is more difficult (only happens at high levels) Just a messenger, just fulfilling orders that come from above. Activities (+ ppl) grouped together by common function.

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