MARKETING EXAM 3 STUDY GUIDE CHAPTER 8 ORGANIZATION STRUCTURE DESIGN 1 Organizational Structure Organizing arranges people and resources to work toward a common goal It is one of the management functions o Divide Work o Arrange Resources o Coordinate Activities Organization requires Structure and comes in 2 forms 1 Formal the official structure of the organization o Organizational Structure is a system of tasks reporting relationships and communication linkages o Organization Chart describes the arrangement of work positions within an organization 3 points 1 Divide up work 2 Arrange resources 3 Coordinate activities In class example Xerox organization chart of positions Also showed division of Line Professionals and Staff Professionals Line Professionals responsible for core business functions i e Developing products making and selling products Staff Professionals play important supporting roles but do not directly bring in revenue i e accounting HR EHS legal etc What do organizational charts provide positions and job titles show individual work o Video Clip Chain of Command and Star Trek Division of work responsibilities Chain of command Span of control o Tall vs Flat Communication flow Major units Staff vs Line as explained above Levels of management bottom of management layers are shown from top to o Division of Labor means that different people and groups perform different Jobs o Video Clip CEO Michael Dell Dell computer restructuring o Clicker Question You work at job and share an issue with boss in turn shares it with their boss This represents what structure Answer Chain of command 2 Informal or shadow organization is the network of unofficial relationships organization s members o Both pros and cons to this structure Pros very helpful in getting work accomplished leads to trust helping one another friendships helpful during times of change Cons may work against best interest of org as a whole breed resistance to change can be distracting leads to outsiders gossip rumors 2 Structural Types bean bag company Big 5 Structural types how a business organizes Ron John s in class example was starting a 1 Functional Structure groups together people with similar skills who perform similar tasks Video Clip Will Smith s opinion on Talent vs Skill in which you have to develop your talent with hard work and practice to improve have a skill What do they look like May have vice presidents or senior managing heading traditional functions of accounting human resources finances manufacturing finances and sales Pros Cons o Economies of scale make efficient use of human resources o Functional experts are good at solving technical problems o Training within functions promotes skill development o Career paths available within each function o Ability to rise up in an organization keep getting better at skill o Functional Chimneys Silos lack of communication and coordination across functions too many problems referred upward for solution Example Gulfstream functional structure shows divide into Administration product support finance and marketing sales all of which have different functions 2 Divisional Structure groups together people working on the same product in the same area or with similar customers Video Clip Shia LaBeouf in Wall Street Pros o Expertise in focused on special products customers or regions o Better coordination exists across functions within divisions o There is better accountability for product or service deliver o It is easier to grow or shrink in size as conditions change Cons o Duplication of services Forms of Divisional Structure same location o Geographical Structure brings together people and jobs performed in the Frequent with international companies National Example Lowes divides U S into North South and West o Product Structure groups together people and jobs working on a single regions for stores product or service Example General Electric would have different groups working on different products produce It is unlikely you would have the same people working on light bulbs that also work on refridgerators o Customer Structure groups together jobs and people that serve the same customers or clients Example Proctor and Gamble would separate Sheetz small convenience sized goods Walmart medium containers and products and Sam s Club large value based products based on what consumers are shopping for in terms of sizing 3 Matrix Structure combines functional and divisional approaches to emphasize project or production teams Video Example Mark Zuckerberg and Facebook company Reason you would go into Matrix Structure you want to put experts of a field into a project of high priority Pros o Performance accountability rests with product program or project managers o Better communication exists across functions o Teams solve problems at all levels o Top managers spend more time on strategy Lockhead Martin Matrix Structure example shows division between different segments defense info technology and space and additional division in what each group is working on functionally 4 Team Structure uses permanent and temporary cross functional teams to improve lateral relations Video Example Donald Trump saying you re fired a bunch of times Pros o Team assignments improve communication cooperation and decision making o Team members get to know each other as persons not just job titles o Team memberships boost morale and increase enthusiasm and task involvement Cons o May lead to struggle to find where you fit in 5 Network Structure uses IT to link with networks of outside suppliers and service contractors Pros Video Example Oprah s Dreamworks She gives out 5 6 million dollars worth of cars but is actually worth 50 million dollars worth of promotion to company that supplies Oprah s audience with the cars o Lower costs due to fewer full time employees o Better access to expertise through specialized alliance partners and o Easy to grow or shrink with market conditions Virtual Organization uses information technologies to operate as a shifting contractors network of alliances o Example Online companies that help other businesses create Facebook pages and websites for their company which they hope will result in additional customers they do not just work with one company 3 Trends in Organizational Design challenges Organizational Design is the process of configuring organizations to meet environmental o Organizations are becoming flatter with fewer levels of management Span of Control is
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