McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc.  All rights reserved.
Learning Objectives <ul><li>L01:  Define characteristics of organization structure:  </li></ul><ul><ul><li>Organic or mech...
Learning Objectives (cont’d) <ul><li>L04:  Explain how to delegate effectively. </li></ul><ul><li>L05:  Distinguish betwee...
Traditional Organizing <ul><li>Organization chart </li></ul><ul><ul><li>reporting structure and division of labor in an or...
Organic - Modern Organizing <ul><ul><li>Broader responsibilities that change as need arises </li></ul></ul><ul><ul><li>Com...
Fundamentals of Organizing <ul><li>Differentiation </li></ul><ul><ul><li>aspect of organization’s internal environment cre...
Differentiation is… <ul><li>High  </li></ul><ul><ul><li>many subunits and specialists who think differently </li></ul></ul...
Coordination <ul><li>Procedures that link various parts of organization to achieve organization’s overall mission. </li></ul>
Integration <ul><li>Degree to which differentiated work units work together and coordinate efforts. </li></ul><ul><li>Acco...
Differentiation <ul><li>Vertical authority within organization </li></ul><ul><ul><li>Board of directors </li></ul></ul><ul...
The Vertical Structure <ul><li>Authority </li></ul><ul><ul><li>legitimate right to make decisions and to tell other people...
Span of Control <ul><li>Number of direct reports an executive or supervisor manages </li></ul><ul><li>Optimal span of cont...
When should span be wide? <ul><li>Work is clearly defined and unambiguous </li></ul><ul><li>Highly trained employees with ...
Delegation <ul><li>Assignment of new or additional responsibilities  </li></ul><ul><li>Fundamental feature of management a...
Is this delegation? <ul><li>Call Tom Burton at Nittany Office Equipment.  Ask him to </li></ul><ul><li>give you the price ...
Responsibility and Accountability <ul><li>Responsibility </li></ul><ul><ul><li>A person is assigned a task that an employe...
Advantages of Delegation <ul><li>Leverages the manager’s energy and talent and those of his or her subordinates </li></ul>...
Steps in Effective Delegation
Centralized vs. Decentralized Decision-Making <ul><li>Centralized: </li></ul><ul><ul><li>High-level executives make most d...
The Horizontal Structure <ul><li>Line departments </li></ul><ul><ul><li>those who have responsibility for the  principal a...
Functional Organizations <ul><li>Departmentalization around specialized skill sets and activities  </li></ul><ul><li>Advan...
Functional Organizations <ul><li>Disadvantages </li></ul><ul><ul><li>People may care more about their own function than ab...
Divisional Organization <ul><li>Groups all functions into a single division and  duplicates functions across divisions . <...
The Divisional Organization
Functional vs. Divisional Examples <ul><li>Functional Organization </li></ul><ul><li>Central purchasing department </li></...
Ways to set up a divisional structure <ul><li>Product divisions </li></ul><ul><ul><li>all functions that contribute to a g...
Matrix Organization <ul><li>An organization composed of dual reporting relationships in which some managers report to two ...
Matrix Organizational Structure
Managing High  Information-Processing Demands
Organizational Agility <ul><li>Agility </li></ul><ul><ul><li>Ability to act, and act fast, to meet customer needs and resp...
Organizing around core competencies <ul><li>Identify existing core competencies </li></ul><ul><li>Acquire or build core co...
Managing core competencies <ul><li>Accumulate the right resources; discard the wrong resources </li></ul><ul><li>Combine r...
Strategic Alliances <ul><li>Definition </li></ul><ul><ul><li>Formal relationship created among independent organizations w...
<ul><li>An organizations’ ability to learn, and translate that learning into action rapidly, is the ultimate competitive a...
Learning Organizations <ul><li>Definition </li></ul><ul><ul><li>Organization skilled at creating, acquiring, and transferr...
Downsizing <ul><li>Planned elimination of positions. </li></ul><ul><li>Becoming a normal business practice as: </li></ul><...
Effective Downsizing? <ul><li>Use downsizing only as a  last resort </li></ul><ul><li>Engage in  careful analysis and stra...
Organizing for Quality Improvement <ul><li>Total Quality Management (TQM) </li></ul><ul><ul><li>An integrative approach to...
Deming’s 14 points of Quality <ul><li>Create constancy of purpose </li></ul><ul><li>Adopt new philosophy </li></ul><ul><li...
ISO 9001 <ul><li>A series of quality standards developed by a committee working under the International Organization for S...
8 Principles of ISO 9001 <ul><li>Customer focus </li></ul><ul><li>Leadership </li></ul><ul><li>Involvement of people </li>...
Organizing for Flexible Manufacturing <ul><li>Mass customization </li></ul><ul><ul><li>Production of varied, individually ...
Lean Manufacturing <ul><li>An operation that strives to achieve highest possible productivity and total quality, cost-effe...
Conditions for Lean Manufacturing <ul><li>People are broadly trained </li></ul><ul><li>Communication is informal and horiz...
Just-in-Time (JIT) Operations <ul><li>A system that calls for subassemblies and components to be manufactured in very smal...
Organizing for Speed <ul><li>JIT is a companywide philosophy oriented toward eliminating waste and improving materials thr...
 
YOU should be able to <ul><li>L01:  Define the characteristics of organization structure: organic or mechanistic, differen...
YOU should be able to <ul><li>L04:  Explain how to delegate effectively. </li></ul><ul><li>L05:  Distinguish between centr...
Test Your Knowledge <ul><li>In the study by Lawrence and Lorsch, companies in complex, dynamic environments developed ____...
Test Your Knowledge <ul><li>Define authority </li></ul><ul><li>Who holds top authority in an organization? </li></ul>
Test Your Knowledge <ul><li>A wide span of control builds a ______________ organization.  </li></ul><ul><li>A) flat  </li>...
Test Your Knowledge <ul><li>Discuss the concepts of responsibility, authority, and accountability.  </li></ul><ul><li>What...
Test Your Knowledge <ul><li>Ruby recently accepted a job with a large insurance firm as an internal </li></ul><ul><li>audi...
Test Your knowledge <ul><li>Sports International (SI) began business by making shoes for athletes.  They soon expanded int...
Test Your Knowledge <ul><li>Michael Shaffer's job as a representative of CommuniCo is to handle communications between the...
Test Your Knowledge <ul><li>Flexible factories have the following advantages EXCEPT:  </li></ul><ul><li>A) Providing more ...
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BUS137 Chapter 6

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BUS137 Chapter 6

  1. 1. McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
  2. 2. Learning Objectives <ul><li>L01: Define characteristics of organization structure: </li></ul><ul><ul><li>Organic or mechanistic </li></ul></ul><ul><ul><li>Differentiation </li></ul></ul><ul><ul><li>Integration </li></ul></ul><ul><li>L02: Summarize how authority operates – who holds top authority in a company. </li></ul><ul><li>L03: Discuss how span of control affects structure and management effectiveness. </li></ul>
  3. 3. Learning Objectives (cont’d) <ul><li>L04: Explain how to delegate effectively. </li></ul><ul><li>L05: Distinguish between centralized and decentralized organizations. </li></ul><ul><li>L06: Define basic types of organization structures and summarize their strengths. </li></ul><ul><li>L07: Describe mechanisms used to coordinate work. </li></ul><ul><li>L08: Discuss how organizations can improve their agility through strategy, commitment to customers and use of technology. </li></ul>
  4. 4. Traditional Organizing <ul><li>Organization chart </li></ul><ul><ul><li>reporting structure and division of labor in an organization </li></ul></ul><ul><li>Organization Types </li></ul><ul><ul><li>Mechanistic – formal structure intended to promote internal efficiency </li></ul></ul><ul><ul><li>Organic - organizational form that emphasizes flexibility characterized by: </li></ul></ul>
  5. 5. Organic - Modern Organizing <ul><ul><li>Broader responsibilities that change as need arises </li></ul></ul><ul><ul><li>Communication through advice and information </li></ul></ul><ul><ul><li>Decentralized decision-making and influence </li></ul></ul><ul><ul><li>Highly valued expertise </li></ul></ul><ul><ul><li>Emphasizes judgment rather than rules </li></ul></ul><ul><ul><li>Commitment to organizational goals is more important than obedience to authority. </li></ul></ul><ul><ul><li>Increased interdependence </li></ul></ul><ul><ul><li>Relationships more informal and personal. </li></ul></ul>
  6. 6. Fundamentals of Organizing <ul><li>Differentiation </li></ul><ul><ul><li>aspect of organization’s internal environment created by job specialization and division of labor . </li></ul></ul><ul><li>Integration </li></ul><ul><ul><li>Degree to which differentiated work units work together and coordinate efforts . </li></ul></ul>
  7. 7. Differentiation is… <ul><li>High </li></ul><ul><ul><li>many subunits and specialists who think differently </li></ul></ul><ul><li>Created through </li></ul><ul><ul><li>Division of labor – when work of organization is subdivided into smaller tasks. </li></ul></ul><ul><ul><li>Specialization – different people or groups perform specific parts of larger task. </li></ul></ul>
  8. 8. Coordination <ul><li>Procedures that link various parts of organization to achieve organization’s overall mission. </li></ul>
  9. 9. Integration <ul><li>Degree to which differentiated work units work together and coordinate efforts. </li></ul><ul><li>Accomplished through structural mechanisms </li></ul><ul><li>Any job activity that links work units </li></ul><ul><li>High differentiation and high integration leads to success in dynamic environments. </li></ul>
  10. 10. Differentiation <ul><li>Vertical authority within organization </li></ul><ul><ul><li>Board of directors </li></ul></ul><ul><ul><li>Chief Executive Officer </li></ul></ul><ul><ul><li>Hierarchical levels. </li></ul></ul><ul><li>Horizontal </li></ul><ul><ul><li>Functional </li></ul></ul><ul><ul><li>Divisional </li></ul></ul><ul><ul><li>Matrix organizations. </li></ul></ul>
  11. 11. The Vertical Structure <ul><li>Authority </li></ul><ul><ul><li>legitimate right to make decisions and to tell other people what to do. </li></ul></ul><ul><li>Types of Authority </li></ul><ul><ul><li>Formal </li></ul></ul><ul><ul><ul><li>Based on formal position, e.g. BOD, CEO </li></ul></ul></ul><ul><ul><li>Informal </li></ul></ul><ul><ul><ul><li>Based on expertise, experience, or personal qualities, e.g., scientists, computer-savvy employees </li></ul></ul></ul>
  12. 12. Span of Control <ul><li>Number of direct reports an executive or supervisor manages </li></ul><ul><li>Optimal span of control maximizes effectiveness by balancing two considerations: </li></ul><ul><ul><li>Maintain control without overcontrol </li></ul></ul>
  13. 13. When should span be wide? <ul><li>Work is clearly defined and unambiguous </li></ul><ul><li>Highly trained employees with access to information </li></ul><ul><li>Manager is highly capable and supportive </li></ul><ul><li>Jobs are similar and performance measures are comparable </li></ul><ul><li>Employees prefer autonomy to close supervisory control </li></ul>
  14. 14. Delegation <ul><li>Assignment of new or additional responsibilities </li></ul><ul><li>Fundamental feature of management at all levels </li></ul><ul><li>Requires communication with manager about effectiveness of assignment implementation </li></ul>
  15. 15. Is this delegation? <ul><li>Call Tom Burton at Nittany Office Equipment. Ask him to </li></ul><ul><li>give you the price list on an upgrade for our personal </li></ul><ul><li>computers. I want to move up to a Core 2 Duo processor </li></ul><ul><li>with 4 gigs of RAM and at least a 500-gigabyte hard drive. </li></ul><ul><li>Ask them to give you a demonstration, and let them try it </li></ul><ul><li>out. Have them write up a summary of their needs and the </li></ul><ul><li>potential applications they see for the new systems. Then </li></ul><ul><li>prepare me a report with the costs and specifications of the </li></ul><ul><li>upgrade for the entire department. Oh, yes, be sure to ask </li></ul><ul><li>for information on service costs. </li></ul>
  16. 16. Responsibility and Accountability <ul><li>Responsibility </li></ul><ul><ul><li>A person is assigned a task that an employee is supposed to carry out – within their power or control. </li></ul></ul><ul><li>Accountability </li></ul><ul><ul><li>Expectation that employees will perform a job, take corrective action when necessary, and report upward on the status and quality of their performance – be answerable . </li></ul></ul>
  17. 17. Advantages of Delegation <ul><li>Leverages the manager’s energy and talent and those of his or her subordinates </li></ul><ul><li>Conserves a manager’s time </li></ul><ul><li>Develops effective subordinates </li></ul><ul><li>Subordinate gains an opportunity to develop new skills and demonstrate potential for additional responsibilities </li></ul><ul><li>Promotes a sense of being an important, contributing member of the organization leading to stronger commitment, task performance, and innovation. </li></ul>
  18. 18. Steps in Effective Delegation
  19. 19. Centralized vs. Decentralized Decision-Making <ul><li>Centralized: </li></ul><ul><ul><li>High-level executives make most decisions and pass them to lower levels for implementation. </li></ul></ul><ul><li>Decentralized </li></ul><ul><ul><li>Lower level managers make important decisions. </li></ul></ul>
  20. 20. The Horizontal Structure <ul><li>Line departments </li></ul><ul><ul><li>those who have responsibility for the principal activities of the firm </li></ul></ul><ul><li>Staff departments </li></ul><ul><ul><li>those who provide specialized or professional skills that support line departments </li></ul></ul>
  21. 21. Functional Organizations <ul><li>Departmentalization around specialized skill sets and activities </li></ul><ul><li>Advantages </li></ul><ul><ul><li>Economies of scale </li></ul></ul><ul><ul><li>Monitoring of the environment is more effective </li></ul></ul><ul><ul><li>Performance standards are better maintained </li></ul></ul><ul><ul><li>Greater opportunity for specialized training and in-depth skill development </li></ul></ul><ul><ul><li>Technical specialists are relatively free of administrative work </li></ul></ul><ul><ul><li>Decision making and lines of communication are simple and clearly understood </li></ul></ul>
  22. 22. Functional Organizations <ul><li>Disadvantages </li></ul><ul><ul><li>People may care more about their own function than about the company as a whole </li></ul></ul><ul><ul><li>Managers develop functional expertise but lack knowledge of the other areas of the business </li></ul></ul><ul><ul><li>Promotes functional differentiation not functional integration </li></ul></ul>
  23. 23. Divisional Organization <ul><li>Groups all functions into a single division and duplicates functions across divisions . </li></ul><ul><li>Act like separate businesses or profit centers and work autonomously to accomplish the goals of the entire enterprise. </li></ul>
  24. 24. The Divisional Organization
  25. 25. Functional vs. Divisional Examples <ul><li>Functional Organization </li></ul><ul><li>Central purchasing department </li></ul><ul><li>Separate companywide marketing, production, design, and engineering departments </li></ul><ul><li>Central city health department </li></ul><ul><li>Plantwide inspection, maintenance, and supply departments </li></ul><ul><li>Divisional Organization </li></ul><ul><li>Purchasing unit for each division </li></ul><ul><li>Each product group’s own experts in marketing, design, production, and engineering </li></ul><ul><li>Separate health units for the school district and the prison </li></ul><ul><li>Inspection, maintenance, and supply conducted by each production team </li></ul>
  26. 26. Ways to set up a divisional structure <ul><li>Product divisions </li></ul><ul><ul><li>all functions that contribute to a given product are organized under one product manager. </li></ul></ul><ul><li>Customer divisions </li></ul><ul><ul><li>built around groups of customers </li></ul></ul><ul><li>Geographic divisions </li></ul><ul><ul><li>structure around geographic regions </li></ul></ul>
  27. 27. Matrix Organization <ul><li>An organization composed of dual reporting relationships in which some managers report to two superiors: </li></ul><ul><ul><li>functional manager </li></ul></ul><ul><ul><li>divisional manager or project manager </li></ul></ul>
  28. 28. Matrix Organizational Structure
  29. 29. Managing High Information-Processing Demands
  30. 30. Organizational Agility <ul><li>Agility </li></ul><ul><ul><li>Ability to act, and act fast, to meet customer needs and respond to other outside pressures. </li></ul></ul>
  31. 31. Organizing around core competencies <ul><li>Identify existing core competencies </li></ul><ul><li>Acquire or build core competencies that will be important for the future </li></ul><ul><li>Keep investing in competencies </li></ul><ul><li>Extend competencies to find new applications and opportunities for future markets </li></ul>
  32. 32. Managing core competencies <ul><li>Accumulate the right resources; discard the wrong resources </li></ul><ul><li>Combine resources to sustain organization capabilities </li></ul><ul><li>Leverage or exploit resources </li></ul>
  33. 33. Strategic Alliances <ul><li>Definition </li></ul><ul><ul><li>Formal relationship created among independent organizations with purpose of joint pursuit of mutual goals </li></ul></ul><ul><li>Success Criteria </li></ul><ul><ul><li>Individual excellence: both partners add value </li></ul></ul><ul><ul><li>Importance: both partners want the relationship to work </li></ul></ul><ul><ul><li>Interdependence: Partners need each other </li></ul></ul><ul><ul><li>Investment: Partners devote financial and other resources to relationship </li></ul></ul><ul><ul><li>Information: Partners communicate openly </li></ul></ul><ul><ul><li>Integration: Partners develop shared ways of operating </li></ul></ul><ul><ul><li>Institutionalization: Relationship has formal status with clear responsibilities </li></ul></ul><ul><ul><li>Integrity: Both partners are trustworthy and honorable </li></ul></ul>
  34. 34. <ul><li>An organizations’ ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage. </li></ul><ul><li>-- Jack Welch </li></ul><ul><li>Former CEO, General Electric </li></ul>
  35. 35. Learning Organizations <ul><li>Definition </li></ul><ul><ul><li>Organization skilled at creating, acquiring, and transferring knowledge </li></ul></ul><ul><ul><li>Can modify behavior to reflect new knowledge and insights. </li></ul></ul><ul><li>Ingredients </li></ul><ul><ul><li>People engage in disciplined thinking and attention to details </li></ul></ul><ul><ul><li>Search constantly for new knowledge and ways to apply it </li></ul></ul><ul><ul><li>Review successes and failures carefully </li></ul></ul><ul><ul><li>Benchmark best practices of other organizations </li></ul></ul><ul><ul><li>Share ideas throughout organization </li></ul></ul>
  36. 36. Downsizing <ul><li>Planned elimination of positions. </li></ul><ul><li>Becoming a normal business practice as: </li></ul><ul><ul><li>global competition puts pressure on costs </li></ul></ul><ul><ul><li>mergers cause functions to be consolidated </li></ul></ul><ul><ul><li>new technologies and new ways of doing business </li></ul></ul><ul><li>Done appropriately can make firms more agile </li></ul><ul><li>Can be traumatic for an organization and its employees </li></ul>
  37. 37. Effective Downsizing? <ul><li>Use downsizing only as a last resort </li></ul><ul><li>Engage in careful analysis and strategic thinking in choosing positions to eliminate </li></ul><ul><li>Train people to cope with new situation </li></ul><ul><li>Identify and protect talented people </li></ul><ul><li>Give special attention and help to those who have lost jobs </li></ul><ul><li>Communicate constantly with people about process </li></ul><ul><li>Invite ideas for alternative ways to operate more efficiently </li></ul><ul><li>Identify how the organization will operate more effectively in the future, and emphasize positive future and the remaining employees’ new roles in attaining it </li></ul>
  38. 38. Organizing for Quality Improvement <ul><li>Total Quality Management (TQM) </li></ul><ul><ul><li>An integrative approach to management that supports the attainment of customer satisfaction through a wide variety of tools and techniques that result in high-quality goods and services </li></ul></ul>
  39. 39. Deming’s 14 points of Quality <ul><li>Create constancy of purpose </li></ul><ul><li>Adopt new philosophy </li></ul><ul><li>Cease dependence on mass inspection </li></ul><ul><li>End practice of awarding business on price tag </li></ul><ul><li>Improve system of production and service constantly </li></ul><ul><li>Institute training and retraining </li></ul><ul><li>Institute leadership </li></ul><ul><li>Drive out fear </li></ul><ul><li>Break down barriers among departments </li></ul><ul><li>Eliminate slogans and exhortations </li></ul><ul><li>Eliminate numerical quotas </li></ul><ul><li>Remove barriers to pride in workmanship </li></ul><ul><li>Institute vigorous program of education and retraining </li></ul><ul><li>Take action to accomplish transformation </li></ul>
  40. 40. ISO 9001 <ul><li>A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of producers and consumers in more than 150 companies </li></ul>
  41. 41. 8 Principles of ISO 9001 <ul><li>Customer focus </li></ul><ul><li>Leadership </li></ul><ul><li>Involvement of people </li></ul><ul><li>Process approach </li></ul><ul><li>System approach to management </li></ul><ul><li>Continual improvement </li></ul><ul><li>Factual approach to decision making </li></ul><ul><li>Mutually beneficial supplier relationships </li></ul>
  42. 42. Organizing for Flexible Manufacturing <ul><li>Mass customization </li></ul><ul><ul><li>Production of varied, individually customized products at low cost of standardized, mass-produced products </li></ul></ul><ul><li>Computer-integrated manufacturing </li></ul><ul><ul><li>Computerized production efforts, including computer-aided design (CAD) and computer-aided manufacturing (CAM) </li></ul></ul>
  43. 43. Lean Manufacturing <ul><li>An operation that strives to achieve highest possible productivity and total quality, cost-effectively, by eliminating unnecessary steps in production process and continually striving for improvement. </li></ul>
  44. 44. Conditions for Lean Manufacturing <ul><li>People are broadly trained </li></ul><ul><li>Communication is informal and horizontal among line workers </li></ul><ul><li>Equipment is general purpose </li></ul><ul><li>Work is organized in teams or cells </li></ul><ul><li>Supplier relationships are long-term and cooperative </li></ul><ul><li>Product development is concurrent, not sequential, and is done by cross-functional teams </li></ul>
  45. 45. Just-in-Time (JIT) Operations <ul><li>A system that calls for subassemblies and components to be manufactured in very small lots and delivered to the next stage of the production process just as they are needed </li></ul>
  46. 46. Organizing for Speed <ul><li>JIT is a companywide philosophy oriented toward eliminating waste and improving materials throughout all operations. </li></ul><ul><li>Offers efficiency only when costs of storing items are greater than costs of frequent delivery </li></ul><ul><li>Simultaneous engineering incorporates the issues and perspectives of all functions from beginning of process </li></ul>
  47. 48. YOU should be able to <ul><li>L01: Define the characteristics of organization structure: organic or mechanistic, differentiation, and integration. </li></ul><ul><li>L02: Summarize how authority operates and who generally holds top authority in a company. </li></ul><ul><li>L03: Discuss how span of control affects structure and management effectiveness. </li></ul>
  48. 49. YOU should be able to <ul><li>L04: Explain how to delegate effectively. </li></ul><ul><li>L05: Distinguish between centralized and decentralized organizations. </li></ul><ul><li>L06: Define basic types of organization structures, and summarize their strengths. </li></ul><ul><li>L07: Describe important mechanisms used to coordinate work. </li></ul><ul><li>L08: Discuss how organizations can improve their agility through strategy, commitment to customers and use of technology. </li></ul>
  49. 50. Test Your Knowledge <ul><li>In the study by Lawrence and Lorsch, companies in complex, dynamic environments developed _____ levels of differentiation; and _____ levels of integration </li></ul><ul><li>A) low; low </li></ul><ul><li>B) intermediate; high </li></ul><ul><li>C) high; high </li></ul><ul><li>D) low; high </li></ul><ul><li>E) high; low </li></ul>
  50. 51. Test Your Knowledge <ul><li>Define authority </li></ul><ul><li>Who holds top authority in an organization? </li></ul>
  51. 52. Test Your Knowledge <ul><li>A wide span of control builds a ______________ organization. </li></ul><ul><li>A) flat </li></ul><ul><li>B) narrow </li></ul><ul><li>C) tall </li></ul><ul><li>D) bureaucratic </li></ul><ul><li>E) formal </li></ul>
  52. 53. Test Your Knowledge <ul><li>Discuss the concepts of responsibility, authority, and accountability. </li></ul><ul><li>What should a manager do when he/she has more responsibility than authority </li></ul><ul><li>Why is this a problem? </li></ul>
  53. 54. Test Your Knowledge <ul><li>Ruby recently accepted a job with a large insurance firm as an internal </li></ul><ul><li>auditor. Ruby has found that her new job is quite different than the </li></ul><ul><li>internship she had at an accounting consulting firm. The insurance firm </li></ul><ul><li>has strictly defined job responsibilities and lines of communication. It </li></ul><ul><li>seems that for every decision that Ruby needs to make, approval must </li></ul><ul><li>be obtained from upper management! Overall, she has found the </li></ul><ul><li>atmosphere to be quite formal as compared to the internship. Ruby </li></ul><ul><li>has concluded that the insurance firm has: </li></ul><ul><li>A) a wide span of control. </li></ul><ul><li>B) a high degree of centralization. </li></ul><ul><li>C) decentralized authority. </li></ul><ul><li>D) a matrix design. </li></ul><ul><li>E) an ineffective structure. </li></ul>
  54. 55. Test Your knowledge <ul><li>Sports International (SI) began business by making shoes for athletes. They soon expanded into making shoes for non-athletic purposes. They now manufacture and distribute clothing, sporting equipment and protective sports gear worldwide. They are departmentalized by products sold to serious athletes, products sold to &quot;weekend&quot; athletes and products sold to sports teams. SI has utilized which form of departmentalization? </li></ul><ul><li>A) Geographic </li></ul><ul><li>B) Functional </li></ul><ul><li>C) Matrix </li></ul><ul><li>D) Customer </li></ul><ul><li>E) Product </li></ul>
  55. 56. Test Your Knowledge <ul><li>Michael Shaffer's job as a representative of CommuniCo is to handle communications between the organization and the local community. Michael is best described as a(n): </li></ul><ul><li>A) mutual adjustment officer. </li></ul><ul><li>B) program manager. </li></ul><ul><li>C) individual task force. </li></ul><ul><li>D) liaison. </li></ul><ul><li>E) none of the above. </li></ul>
  56. 57. Test Your Knowledge <ul><li>Flexible factories have the following advantages EXCEPT: </li></ul><ul><li>A) Providing more production options. </li></ul><ul><li>B) Having much shorter production runs. </li></ul><ul><li>C) Being organized around products, in work cells or teams. </li></ul><ul><li>D) Good for standardized products. </li></ul><ul><li>E) Quicker to adapt to change. </li></ul>

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