BAM101 Chapter 7: module07
Organizing for Success
Introduction
It is easy to take for granted that a business’ organizational approach is working if that company has
been in business for a number of years.
This, however, is not the case.
Many large organizations have suffered major setbacks by trying to operate within a dated (and
inefficient) organizational structure that was top-heavy in middle managers but thin on results. General
Motors was a classic example.
To be effective and efficient, companies (whether large, medium-sized or small) must revisit how they
are organized to ensure that they are appropriately structured in the markets in which they operate.
In this Module, we’ll have a look at organizational structure (including various types of basic structures),
the decision-making hierarchy and wrap-up with a look at the informal organization.
As you begin this module, please refer to the timeline and make note of any assessments or important
dates. If you have any questions, ask your instructor.
Modes of Learning
For this module, the following modes of learning will be used:
Online Readings
Textbook Readings
Self-Quizzes
Learning Outcomes
By the end of this module you will be able to:
1. Discuss the elements of a firm’s organizational structure and why it may change based on the
demands of the market
2. Explain how specialization and departmentalization influence the structure and operation of a
company
3. Describe the importance of delegation and accountability and how they are impacted by a firm’s
decision to use either centralized or decentralized authority
4. Identify and discuss the organizational structures found in most companies
5. Describe the impact the informal organization has on a company
Key Terms and Concepts
Listed below are some important key terms and concepts within this module.
Organizational Structure
Organization Charts
Job Specialization
Departmentalization
Authority
Responsibility
Delegation
Accountability
Centralized Organization
Decentralized Organization
Span of Control
Informal Organization
Organizational Structure
Organizational structure is the sum of all of the roles within a company and how those roles interact and
complement one another.
To develop and bring to market a security software package, not only are engineers hard at work but
many others in various departments play a critical role:
Accounting staff who ensure bills are paid and/or collected on time
Human resources employees ensure that the company’s benefits plan is competitive
Sales and marketing people who develop, test and refine sales and marketing campaigns
Shipping and warehousing staff who schedule delivery of the products to both businesses and
consumers
Plus many other important roles. For an example, this link will take you to the Canadian Imperial Bank of
Commerce’s organization structure.
Is Organizational Structure Static?
An organization might start out as a very hierarchical company (i.e. with many layers of management;
most decisions being made by senior executives) but quickly learn that more decision-making authority
needs to be made at the branch level.
Being too slow to respond in today’s dynamic economy is a sure way for a company to lose ground to
their competitors and ultimately see their financial performance deteriorate.
One aspect that must be clear regardless of the organizational structure is the chain of command.
Who reports to whom? Who is responsible for and leads a specific area?
One way of depicting this structure is through an organization chart (also known as an organizational
chart or org chart).
Depending on the size of the organization and the number of senior positions, the organization chart
may be very detailed or simply highlight the executive members.
Here is an example from Transport Canada.
What Would You Do?
I was hired at a multi-national company to help bring change to their operations.
My key mandates were to build our business with new customers and to lead 5 important
teams.
A team-based approach was new to this company.
Although they had enjoyed much success over the years, their current silo-based organizational
structure was seen as a limitation to future growth and profitability.
Each department acted and operated separately without regard for how their actions may affect
another department.
I was successful in bringing over clients from a key competitor based on my many years of
experience and recognition in a specific area of business.
Trying to effect change as Team Leader however was a true challenge.
Long-term employees openly voiced their concern over moving away from the historical
corporate approach – “look out for my own department and not care about the others.”
My goal was to try and be as inclusive as possible:
o Seeking feedback for our Team planning process.
o Assigning goals to team members so they could contribute to our anticipated success.
o Providing regular communications to team members on key milestones and team news.
Consider the following:
o What would you do to try to foster a team-based culture?
o How would you try to motivate long-term employees who showed an open reluctance
to change?
o Would you consider trying to change the organizational structure further to facilitate a
team-based approach?
So what happened?
o Many employees chose to explore our new team-based approach as its benefits slowly
manifested themselves:
A participative and collaborative environment
Greater sharing of information
A holistic approach to meeting our clients’ needs
A few people decided to remain on the outside. Over time, they left the
company.
The takeaway – people don’t mind change; it is important to demonstrate how change will be of benefit
to them and the organization. Ease the changes in over time to help people feel more comfortable and
to get their buy-in.
Oh yeah – and be prepared to make mistakes – they prove to be our greatest lessons.
Job Specialization
Job specialization indicates the various jobs that must be completed to produce a good or service and
assigning these jobs to the people who will complete them.
It is essentially a roadmap to an end product or service.
Document Summary
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