Chapter 6
Organizing the Business Enterprise
“Anyone can do any amount of work provided it isn't the work he's supposed to be doing at the moment.”
—Robert Benchley
Key Topics
Organizational structure
Specialization and departmentalization
Responsibility, authority, delegation, and accountability
Functional, divisional, matrix, and international organizational structures
The informal organization and intrapreneuring
Organizational Structure
Specification of the jobs to be done within an organization and how those jobs relate to one another
What Elements Influence Organizational Structure?
Organizational structure is usually quite fluid!
External Environment
Technology
Size
Strategy
Mission
Purpose
The Organization Chart
Figure 6–1
The Building Blocks of Organizational Structure
SPECIALIZATION:
What needs to be done, and who will do it?
DEPARTMENTALIZATION
Customer
Geographic
Product
Functional
Process
Multiple Forms of Departmentalization
Figure 6–2
The Decision-Making Hierarchy
Assigning Tasks
Performing Tasks
Distributing Authority
Flat Organization: Typical Law Firm
Figure 6–3a
Tall Organization: United States Army
Figure 6–3b
Centralized and Decentralized Organizations
Centralized
Decentralized
Lower level managers hold significant decision-making authority
Top managers hold most decision-making authority
Organizational Structure and Span of Control
Relatively narrow span of control
Relatively wide span of control
Forms of Authority
Line Authority
Line Departments
Staff Authority
Staff Members
Committee and Team Authority
Line and Staff Organization
Figure 6–4
Basic Forms of Organizational Structure
Divisional Organization
International Organization
Functional Organization
Matrix Organization
Matrix Organization at Martha
Stewart
Figure 6–5
International Division Structure
Figure 6–6
Organizational Design in the 21st Century
Boundaryless Organizations
Team Organizations
Virtual Organizations
Learning Organizations
The Virtual Organization
Figure 6–7
The Informal Organization: A Powerful Dynamic
Informal Groups
The Grapevine
Intrapreneuring
Chapter Review
Discuss the elements that influence organizational structure.
Explain specialization and departmentalization.
Distinguish among responsibility, authority, delegation, and accountability.
Explain decision-making in centralized vs. decentralized organizations.
Chapter Review (cont’d)
Distinguish among functional, divisional, matrix, and international organizational structures.
Describe the informal organization and intrapreneuring.
