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Chapter 6

Chapter 6

Rotman Commerce
Course Code
Michael Szlachta

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Organizing the Business Enterprise
1Whats organizational structure
The specialization of the jobs to be done within a business and how those jobs relate
to one another
1.Determinants of Organization
?Organizations purpose, mission, and strategyflexible organizationrapid growth;
stable organizationmoderate growth
Size, technology, and change in environmental circumstance
2.The Chain of Command
Organization chart illustrates the company‘s structure and show employees
where they fit into the firms operation. see P213
Chain of Command the reporting relationships within the company
 The Building of Organizational Structure
1.Specialization: determining who do what
Job Specialization the process of identifying the specific jobs that need to be done
and designating the people who will perform them.
Specialization and growth: 
Ads of job specialization: more efficient; easier to train and replace people
But if too narrow define, bored, less satisfaction
2.Departmentalization: The process of grouping jobs into logical units
Under thistle, a department is treated as a profit center: A separate company unit
responsible for its own costs and profits
? Functional Departmentalization: Departmentalization according to functions or
activation. (Production, marketing, human resource, accounting & finance
? Customer Departmentalization: Departmentalization according to the types of
customers likely to buy a given product.  ,  retail stores
?Product Departmentalization: Dividing an organization according to the specific
product or service being created. (manufacturers & service Providers  )
?Geographic departmentalization: Departmentalization according to the area of the
country or world supplied
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