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RSM100Y1 (431)
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Chapter 7

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University of Toronto St. George
Rotman Commerce
John Oesch

RSM100Y1Y Study Notes for Textbook ChaptersChapter 7Organizing the Business Enterprise71 What is Organization Structure Organizational Structure is the specification of the jobs to be done within a business and how those jobs relate to one anotherOrganization Charts illustrate the companys structure and show employees where they fit into the firms operationsA chain of command is the reporting relationships within a company72 The Building Blocks of Organizational Structure Specialization Job Specialization is the process of identifying the specific jobs that need to be done and designating the people who will perform themAdvantagesindividual jobs can be performed more efficientlyjobs are easier to learnit is easier to replace people who the leave the organization Disadvantagespeople may get boredpeople may derive less satisfaction from their jobspeople often lose sight of how their contributions fit into the overall organizationDepartmentalization Departmentalization is the process of grouping jobs into logical units It allows the firm to treat a department as a profit centrea separate unit responsible for its own costs and profits There are five different kindsFunctional Departmentalization is the departmentalization according to functions and activities Eg production marketing accountingCustomer Departmentalization is the departmentalization according to the specific product or service being created Eg departments according to different genres at a music storeProduct Departmentalization means dividing an organization according to the specific product or service being created Eg PG might have a department for Crest toothpastes and another one for Gain laundry detergents
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