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Chapter 8

GMS 200 Chapter Notes - Chapter 8: Strategic Management, Work Unit, Departmentalization

Global Management Studies
Course Code
GMS 200
Lori Anne Heckbert

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GMS200-111 Chapter 8 December 7, 2015
What Is Organization Structure?
A system of tasks, reporting relationships, and communication linkages.
Formal Structures
The official structure of the organization; describes how an organization is supposed to work.
Organizing: The process of arranging people and resources to work toward a common goal.
Organization Chart: Describes the arrangement of work positions within an organization.
Basics of an Organization’s Formal Structure:
Division of Work: Positions and titles show work responsibilities.
Supervisory Relationships: Lines show who reports to whom.
Communication Channels: Lines show formal communication flows.
Major Subunits: Positions reporting to a common manager are shown.

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GMS200-111 Chapter 8 December 7, 2015
Levels of Management: Vertical layers of management are shown.
Informal Structures
The set of unofficial relationships among an
organization’s members.
Social Network Analysis: Identifies the
informal structures and their embedded
social relationship that are active in an
Departmentalization: The process of grouping people and jobs into work units.
Functional Structures
Groups together people with similar skills who perform similar tasks.
Advantages of Functional Structures:
Economies of scale with efficient use of resources.
Task assignments consistent with expertise and training.
High-quality ethnical problem solving.
In-depth training and skill development within functions.
Clear career paths with functions.
Disadvantages of Functional Structures:
Difficulties in pinpointing responsibilities.
Product or service quality.
• Innovation.
Functional Chimneys Problem: A lack of communication and coordination across functions.

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GMS200-111 Chapter 8 December 7, 2015
Divisional Structures
Groups together people working on the same product, in the same area, wth similar customers, or on
the same processes.
Product Structure: Groups together people and jobs focused on a single product or service.
Geographic Structure: Groups together people and jobs performed in the same location.
Customer Structure: Groups together people an jobs that serve the same customers or clients.
Work Process: A group of related tasks that collectively creates a valuable work product.
Process Structure: Groups jobs and activities that are part of the same processes.
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