Chapter 8 notes (What I used to study for final)

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15 Dec 2010
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CHAPTER 8
Organizational structure: the specification of the jobs to be done within a business and how these
jobs relate to one another
Organization charts: a physical depiction of the companys structure showing employee titles and
their relationship to one another
Chain of Command: reporting relationships within a business; the flow of decision-making
power in a firm
Job specialization: the process of identifying the specific jobs that need to be done and
designating the people who will perform them
- after jobs are specialized, they must be departmentalized
Departmentalization: the process of grouping jobs into logical units
- this leads firms to treat departments as profit centres
Profit centre: a separate company unit responsible for its own costs and profits
- once the company is structured, the process of decidings who makes decisions comes up:
1) assigning tasks: who can make decisions and how they should be made
2) performing tasks: implementing decisions that have been made
3) distributing authority: determining whether the organization is to be centralized or
decentralized
- when a company wants to assign a task, they need to figure out who is responsible for what and
who has authority
Responsibility: the duty to perform an assigned task
Authority: the power to make the decisions necessary to complete a task
- when it is not clear who is responsible, the issue becomes delegation and accountability
Delegation: assignment of a task, as responsibility, or authority by a manager to a subordinate
Accountability: liability of subordinates for accomplishing tasks assigned by managers
- things that a manager should keep in mind when delegating:
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Document Summary

Organizational structure: the specification of the jobs to be done within a business and how these jobs relate to one another. Organization charts: a physical depiction of the company"s structure showing employee titles and their relationship to one another. Chain of command: reporting relationships within a business; the flow of decision-making power in a firm. Job specialization: the process of identifying the specific jobs that need to be done and designating the people who will perform them. After jobs are specialized, they must be departmentalized. Departmentalization: the process of grouping jobs into logical units. This leads firms to treat departments as profit centres. Profit centre: a separate company unit responsible for its own costs and profits. When a company wants to assign a task, they need to figure out who is responsible for what and who has authority. Responsibility: the duty to perform an assigned task. Authority: the power to make the decisions necessary to complete a task.

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