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Chapter 8

MGTA03 Chapter 8

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Management (MGT)
Chris Bovaird

Chapter 8 Organizing the Business Enterprise What is Organization Structure? All businesses have common structural and operating components, each with a specific purpose Each component needs to fulfill its purpose and fit in with others Organizational Structure: The specification of jobs to be done within a business and how those jobs relate to one another Every institution must develop the most appropriate structure for its own unique situation The Chain of Command Most businesses prepare organization charts (A physical depiction of the companys structure showing employee titles and their relationship to one another) Each box on the chart is a job and the line that connect them are the chain of command, that reports the relationships within the company Chain of Command: reporting relationships within a business, the flow odf decision making power in a firm The Building Blocks of Organizational Structure There are two basic building blocks of a business organization: Specialization and Departmentalization Specialization Job Specialization: The process of identifying the specific jobs that need to be done and designating the people who will perform them All organizations have one major job (example: make profit by selling clothes) but this must be divided up and broken into smaller components, these components are divided to individuals In a small organization, the ownerone person may be responsible for every single task, but larger businesses have job specialization Job specialization is part of organizational growth and has advantages since jobs can be done more efficiently, easier to learn, easier to replace people if others leave However, job specialization carried too far will lead to dissatisfaction with job, and bad performance Departmentalization www.notesolution.com
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