Management 301 Exam 3 Exam Study Guide I Chapter 8 Organizational Structure Design a What is Structure i Anything composed of parts arranged together in some way ii Think about your DNA b Structure is everywhere i Think about the structure of a road ii Tallest Domino Video all of the dominoes came crashing down at the end it was HUGE iii Other examples family sports video games PSU buildings computers modes of transportation local restaurants THON c Organizing i Arranges people and resources to work toward a common goal ii Divide up work arrange resources coordinate activities iii Managers are challenged to choose best organizational structure to fit people strategy etc iv We should care about structure in organizations we join because it helps u know where we fit in v Google Structure video 1 Larry Page Sergey Brin 2 Had great idea and strategy but didn t know how to scale their strategy 3 Culture and structure were going to work 4 Strategy provide some structure 5 Needed an off site worked on strategy 6 Staff meeting quarterly objectives replacing financial system that didn t work 7 Company only needed a little bit of list making and structure worked out well other than that vi Formal structure 1 The official structure of the organization 2 Shows us how to divide things up 3 CEO VPs Managers the rest a Remember picture of birds 4 Xerox a So prominent as a company that they got people to say I need to Xerox something b Line reporting core services operations ACS global docs CFO customer operations c Staff reporting non core but not less important counsel CEO assistant 5 Organization structure a system of tasks reporting relationships and communication linkages 6 Organization chart describes the arrangement of work positions within an organization a Provide i Division of work ii Chain in command who reports to who 1 Star Trek video example a Plan to attack fleet b Drop the ranks i Captain told Commander he doesn t like him but good pilot ii Commander tells captain that he isn t trustworthy there s not joy in anything not good captain iii Span of control 1 The number of persons directly reporting to a manager 2 Tall v Flat a Tall more levels narrower spans of control manager supervises only a few people b Flat fewer levels wider spans of control manager supervises a lot of people c Flat management 301 iv Communication flow v Major units vi Staff vs Line 1 Know how to compare the difference 2 Line professionals responsible for core business functions think developing products making products and selling products a Ex marketing 3 Staff professionals play important support role but do not directly bring in revenue a Ex Accounting HR EHS vii Levels of management Legal etc vii Informal structure 7 Division of labor people and groups perform 8 Aligns positions people responsibilities all done in different jobs the best way Issues 9 person a CEO and chairman of the board being the same i Reporting to his or herself need to separate to strengthen governance 10 Dell Restructuring Organization video a Organization structure got unwieldy b 20 people reporting to CEO too many decisions unclear missions overlaps slows things down c Sat down and changed it by sitting down with everyone and telling them it needed to be fixed d Simplified structure and created new positions in areas where trying to invest and build new capabilities 1 The network of unofficial relationships among an organization s members 2 Always an informal structure behind a formal structure 3 Social network analysis identifies the informal structure and their embedded social relationships that are active in an organization a Used to be more of a face to face structure but now technology has made it easy to just hop on the computer and network Information collected using this analysis can be used to redesign the formal structure b 4 Advantages a Helpful in getting work accomplished b Fill gaps in formal structure c Provide social and emotional support access to friendships etc d Helpful during times of change e PSU Ex Teachers getting together to discuss things 5 Disadvantages Penn State setting a Things that happen here may be against the best interest of the organization as a whole not included in formal structure b Can easily carry rumors or inaccurate information c Distract workers d Crisis can bring out disadvantages e PSU Ex Changes made can get out of hand i Technology ban in classrooms Collegian gets interested and wants to run an article students parents that are big CEOs on Wall Street start to raise concern d Organization Structures i Functional 1 Groups together people with similar skills who perform 2 Work well for small companies that produce one or a similar tasks few products services 3 Work well for companies with stable environments problems are predictable and demand for changes are limited 4 Benefits a Benefit individuals b Economies of scale c Broad expertise d Training for skills e Functional career paths 5 Potential downsides a Hard to pinpoint responsibilities cost containment product service quality innovation b Focus is on working well within function not as team organization 6 Structure issues a Functional chimneys silos problem i A lack of communication and coordination across functions ii People are very protective of their functional area and territorial iii The company does not benefit from competing within itself b Ex Farm i Silos functions ii Come to farm and see many silos everyone 7 Ex banks hospitals 8 We define functions as the company 9 Ron s Bean Bag Chairs creating business niece in commercial ii Divisional 1 Groups together people working on the same product in the same area with similar customers 2 Used to overcome some of the disadvantages of a function structure functional chimney problems 3 Brings departments together under common boss and work together instead of separately 4 GE Example 5 divisions based around product 5 Product structure groups together people and jobs working on a single product or service a Ex GE can reorganize one of its individual products 6 Geographical structure brings together people and jobs performed in the same location a Ex Lowe s decided to go US North South and West can be geographic within a single country single customer and class of customers 7 Customer structure groups together people and jobs that serve the same customers and clients a P G Walmart Sheetz CVS 8 Benefits a Focused experts b Better coordination c d Grow shrink easier Increase
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