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MGTA01H3 (583)
Chapter 8

Chapter 8 Notes

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Management (MGT)
Chris Bovaird

Chapter 8 Notes: Organizing the Business Enterprise What Is Organizational Structure? Organizational Structure: The specification of the jobs to be done within a business and how those jobs relate to one another The Chain of Command: Reporting relationships within a business; the flow of decision- making power in a firm Organization Charts: A physical depiction of the companys structure showing employee titles and their relationship to one another The Building Blocks of Organizational Structure 2 steps in developing the structure of business: Specialization & Departmentalization Specialization Determining who will do what Job Specialization: The process of identifying the specific jobs that need to be done and designating the people who will perform them One major job is to make a profit, but divided into many different components Job specialization is a natural part of organizational growth One person cannot perform all the tasks as firms grow Advantages Disadvantages Individual jobs can be performed more Jobs become too narrowly defined efficiently Easier to learn the jobs People get bored = less satisfaction from jobs Easier to replace the people who leave Lose sight of how their contributions fit the organization into the overall organization Departmentalization The process of grouping jobs into logical units Control and coordination are narrowed Easier for top managers to see how diff. units are doing Allows firm to treat a department as a profit centre (a separate company unit responsible for its own costs and profits) Occurs along functional, customer, product, geographic, process lines Establishing the Decision- Making Hierarchy Managers must explicitly define reporting relationships among positions Goal: Figure out how to structure and stabilize the organizational framework 3 Steps to Develop a Decision- Making Hierarchy 1.) Assigning Tasks: Determining who can make decisions and specifying how they should be made Page 1 www.notesolution.com
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