MGMT 1 Lecture Notes - Lecture 42: Production And Operations Management, Merage Family, Operations Management
Course CodeMGMT 1
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Paul Merage School of Business
Intro to Business Management
Course code: 38001
Final: Thursday of finals week
MANAGING THE INFORMAL ORGANIZATION
● Formal organization – the structure that details lines of responsibility, authority and
position; structure shown on organizational charts.
● Informal organization – the system that develops spontaneously as employees meet and
form cliques, relationships, and lines of authority outside the formal organization –
human side of the organization that doesn’t show on any organization chart.
● No organization can operate effectively without both types of organization.
o Formal – too slow and bureaucratic, but helps provide helpful guides and lines of
authority for routine situations.
o Informal organization – too unstructured and emotional to allow careful decision
making, but generates creative solutions to short-term problems and creates
camaraderie and teamwork among employees.
▪ Wise to learn quickly who is important – following formal rules and
procedures can take days.
▪ Nerve center is the grapevine – system through which unofficial
information flows between and among managers and employees.
CHAPTER 9: PRODUCTIONS AND OPERATIONS MANAGEMENT
MANUFACTURING AND SERVICES IN PERSPECTIVE
● Today’s workers are so productive that the United States needs fewer workers to produce
more goods – we should retrain the workforce to participate in this dynamic new
● Some areas of the country are enjoying economic growth from manufacturing while
others are experiencing declines, which could be aided by adapting to the new realities
and attract new manufacturers.
● American industry is doing what it can to rebuild – construction industry is ready to build
homes that are easier to heat and cool; U.S automakers are scrambling to stage a
comeback with more competitive vehicles; U.S. is using the concept of sustainability.
● U.S. economy is no longer manufacturing-based – over 85 percent of the U.S. jobs and
70% of GDP comes from the service sector.
o Majority of college graduates are likely to be employed in the service sector.
o Top-paying jobs already exist in legal services, medical services, entertainment,
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