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Chapter 7

Chapter 7 Culture and Corporate Structures.docx

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University of Lethbridge
MGT 3640
Luis Escobar

Chapter 7: Culture and Corporate Structures April-17-13 9:10 PM Organizational Structures  Organizational structure describes the way an institution is organized to carry out its objectives and pursue its projects. o Allows relations within the organization to be formalized by describing tasks, jobs, positions of personnel, as well as limits and responsibilities of work units. o Indicates the kind of hierarchy within the organization  Levels of authority and power  Formal lines of communication  Influences on organizational structure: o Size  Small companies are flexible and can engage the whole staff in a rage of activities. o Business environment  Structure of a large-scale organization will need to be more decentralized if it sells its products in many markets. o Internal and external influences  Internal requirements such as technology, types of activities, and strategy  External forces such as economic conditions, host governments, product-market characteristics  Multinational corporations must take into account: o Physical distance between headquarters and subsidiaries o Mutual relations o Legislation of countries where subsidiaries operate o Need for co-ordination and integration is greater than in domestic organizations Forms of Organizational Structure  3 basic types of structures: 1. Traditional hierarchal i. Staff is divided according to function, product, service, or location 2. Several lines of reporting i. Structure takes form of a project team ii. Matrix structure 3. Network structure i. Facilitates partnerships between organizations  5 organizational structures:: 1. Geographic structures  Employees are grouped according to region  At the head of each division, there is a senior-level executive who shares responsibility for the area with the HR manager.  Headquarters maintains control of 'strategic planning' and operations. 2. Functional structure  Responsibilities are arranges according to functional areas: marketing, finance, R&D, etc  A the head of each division, a senior manager reports directly to CEO. 3. Product structure  Staff are organized according to product lines, which are then grouped according to produce divisions  Allows for new products to be launched by creating a new division  These autonomous units can pose problems relating to control and co-ordination. 4. Mixed structure  Preferred by organizations who wish to expand they international business activities  Ie: area knowledge with product & functional skills, functional divisions with product divisions, geographic areas with product lines, etc. 5. Matrix structure  Does not follow traditional hierarchy since it does not respect the principle that each employee has just one superior.  Management has a lateral authority (functional and project share responsibility)  Facilitates co-ordination and integration of projects  Relies on more managers (increases costs), and increases internal competition o Increased globalization has made appear two new structures:
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