Lesson 5 3


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Organizational Structure for Businesses
(Intro to Business, 6e)

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Lesson 5 3

  1. 1. Intro to Business Organizational Structure for Business Lesson 5-3
  2. 2. Designing an Effective Business Organization <ul><li>Mission Statement </li></ul><ul><ul><li>A short, specific written statement of the reason a business exists and what it wants to achieve. </li></ul></ul><ul><ul><li>Mission and Vision of Skaggs Community Health Center </li></ul></ul>
  3. 3. <ul><li>Goals – precise statement of results the business expects to achieve. </li></ul><ul><li>Used to define what needs to be accomplished </li></ul><ul><li>Used to determine if the business is successful </li></ul>
  4. 4. <ul><li>Policies – guidelines used in making consistent decisions </li></ul><ul><li>Procedures – descriptions of the way work is to be done </li></ul>Effective policies and procedures provide guidance and direction to people working in the organization.
  5. 5. Principles of Effective Organization <ul><li>Responsibility – obligation to complete specific work. </li></ul><ul><li>Authority – right to make decisions about how responsibilities should be accomplished </li></ul><ul><li>Accountability – taking responsibility for the results achieved </li></ul>
  6. 6. Principles (cont.) <ul><li>Unity of Command – There is a clear reporting relationship for all staff of a business. </li></ul><ul><li>For each assignment, people need to know who the leader is and how decisions are made. </li></ul>
  7. 7. Principles (cont.) <ul><li>Span of Control – the number of employees who are assigned to a particular work task and manager. </li></ul><ul><li>Organizations need to make sure workers have a balance of supervision and freedom to do their work. </li></ul>
  8. 8. Types of Organizational Structures <ul><li>Organization Chart – diagram that shows the structure of an organization, classifications of work and jobs, and the relationship among those classifications. </li></ul>
  9. 9. President VP of Finance VP of Operations VP of Marketing Senior Accountant Chief Auditor National Sales Manager Key Account Manager
  10. 10. Functional Organization Management <ul><li>Work is arranged within main business functions such as production, operations, marketing and human resources </li></ul><ul><li>People with jobs related to function will work together </li></ul><ul><li>Workers report to managers who are responsible for that function </li></ul><ul><li>Most businesses use functional style. </li></ul>
  11. 11. Functional Organization Structure <ul><li>Benefit </li></ul><ul><ul><li>People work with others who have same skills </li></ul></ul><ul><li>Drawbacks </li></ul><ul><ul><li>People become more focused on their specific function than on the success of the whole business </li></ul></ul><ul><ul><li>People have little interaction with people in other parts of the business </li></ul></ul>
  12. 12. Matrix Organizational Structure <ul><li>Newer organizational structure </li></ul><ul><li>Work is structured around specific projects, products, or customer groups </li></ul><ul><li>People with varied backgrounds work together because expertise is required for the project </li></ul><ul><li>Assignment may be temporary or long-term </li></ul>
  13. 13. Matrix Organizational Structure <ul><li>Benefits </li></ul><ul><ul><li>Interesting and motivating to employees </li></ul></ul><ul><ul><li>Work with many different people </li></ul></ul><ul><ul><li>Focus is on specific project or task </li></ul></ul><ul><li>Drawbacks </li></ul><ul><ul><li>Confusing and inefficient without effective leadership and communication </li></ul></ul>