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MGTA01H3 (583)
Chapter 7

Chapter 7 Notes

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University of Toronto Scarborough
Management (MGT)
Murphy Lawrence

MGTA01 Chapter 7 Notes ORGANIZING THE BUSINESS ENTERPRISE WHAT IS ORGANIZATIONAL STRUCTUREOrganizational structure is the specification of the jobs to be done within a business and how these jobs relate to one another THE CHAIN OF COMMANDMost business prepare organization charts physical depiction of the companys structure showing employee titles and their relationship to one another that illustrate the companys structure and show employees where they fit into the firms operationsThe board of directors are at the top of the chain and the district sales managers are at the bottom of the lineThe CHAIN OF COMMAND job is to report the relationships within the company THE BUILDING BLOCKS OF ORGANZIATIONAL STRUCTURESpecialization and departmentalization are the two basic building blocks of all business organizationsSPECIALIZATION determining who will do what in terms of job specialization process of identifying the jobs that need to be done and the designating the people who will perform themo SPECIALIZATION AND GROWTH Job specialization is a natural part of organizational growth ie One person running a company all by themselves as opposed to having many people doing different areas of the jobbetter service more successful organizationAdvantage more efficientDisadvantage jobs may become narrow therefore causing employees to become bored and lose insight of their jobs and how important their role isDEPARTMENTALIZATION determining how people performing certain tasks can be best grouped together o after jobs are specialized they must be grouped into logical units o departmentalization allows the firm to treat a department as a profit centre a separate unit responsible for its own costs and profits o in general departmentalization occurs along functional customer product geographic or process lines or combination of theseo ESTABLISHING THE DECISIONMAKING HIERARCHY Managers must explicitly define reporting relationships among positions so that everyone will know who has responsibility for various decisions and operations
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