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Chapter 10

Chapter 10


Department
Global Management Studies
Course Code
GMS 200
Professor
Shavin Malhotra
Chapter
10

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Chapter 10: Organizing
Organizing as a Management Function
Organizing: arranges people and resources to work toward a goal
Involves both creating a division of labour for tasks to be performed and then
coordinating results to achieve a common purpose
Organizing begins with the process of implementation by clarifying jobs and working
relationships
What is Organization Structure?
Organization structure: is a system of tasks, reporting relationships, and
communicating linkages
Formal Structures
Organization chart: describes the arrangement of work positions within an
organization
Formal structure: is the official structure of the organization
Organizations formal structure includes:
oDivision of work
oSupervisory relationships
oCommunication channels
oMajor subunits
oLevels of management
Informal Structures
Informal structure: is the set of unofficial relationships among an organizations
members
shadow organization very important
Informal learning: personal contact with others who can help them get things doen
when necessary, working and interacting together
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Sometimes work against the best interests of the organization though, susceptible to
rumour, carry inaccurate info, breed resistance to change, and divert work efforts
from important objects
Outsiders: those left out of the informal groupings, feel less a part of daily activities
and suffer a loss of satisfaction
Traditional Organization Structures
Departmentalization: is the process of grouping together people and jobs into work
units
Functional Structures
Functional structure: groups together people with similar skills who perform
similar tasks
Top management is arranged by functions of marketing, finance, production, and
human resources
Members of each function work within their areas of expertise
Work well for small organizations
Good for relatively stable environments, problems are predictable and demands for
change and innovation are limited
Major advantages:
oEconomies of scale with efficient use of resources
oTask assignments consistent with expertise and training
oHigh-quality technical problem solving
oIn-depth training and skill development within functions
oClear career paths within functions
Disadvantages:
oDifficulties in pinpointing responsibilities for things
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oFunctional chimneys problem: is a lack of communication and
coordination across functions
oSelf centered and narrow viewpoints
oSlow decision making
Divisional Structures
Divisional structure: groups together people working on the same product, in the
same area, with similar customers, or on the same processes
Common in complex organizations with diverse operations that extend across many
products, territories, customers, and work processes
Advantages
oMore flexibility in responding to environmental changes
oImproved coordination across functional departments
oClear points of responsibility for product or service delivery
oExpertise focused on specific customers, products, and regions
oGreater ease in changing size by adding or deleting divisions
Disadvantages
oReduce economies of scale
oincrease costs through the duplication of resources and efforts across
divisions
oCreate unhealthy rivalries as divisions compete for resources and top
management attrition
Product Structures
Product structures (market structures): groups together people and jobs related
to a single product or service
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