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© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 2
Effective Organization Structure
Coordinate and Control Work
Divide Responsibilities
Promote Accountability
Distribute Authority
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 3
Organization Chart
Vertical Organization
Ch
ain
of
Co
mm
an
d W
ork
Sp
ecia
lizatio
n
Formal Organization
Informal Organization
Horizontal Coordination
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 4
Organization Chart for Food Lion Grocery Chain
Board of Directors
President & CEO
Chairperson
VP Human
Resources
Senior VP
Operations
VP
MIS
VP
Finance
VP Special
Projects
VP
Marketing
VP
Advertising
VP Store
Planning
Regional
Supervisors
Area
Supervisors
Regional
Operations
Area
Supervisors
Regional
Operations
Area
Supervisors
VP Grocery
Operations
VP Perishable
Operations
VP Bakery
Operations
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 5
Identifying Job Responsibilities
Advantages
Efficiency
Productivity
Disadvantages
Boredom
Alienation
Work Specialization
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 6
Chain of Command
Responsibility
Accountability
Authority
Delegation
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 7
Simplified Line-and-Staff Structure
President
VP
Production
VP
Marketing
VP
Finance
Legal Department
Human Resources
Department
Head of
Accounting
Department
National
Sales
Manager
Line
Staff
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 8
General
Colonels
Majors
Captains,
Lieutenants
Warrant
Officers
Sergeants
Corporals
Privates
United States Army
Span of Management
Pope
Cardinals
Archbishops,
Bishops
Priests
Roman Catholic Church
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 9
Decentralized Centralized
Decision-Making Authority
Top-Level
Management
Rich
Experience
Broad
Vision
Lower-Level
Management
More
Responsive
Faster
Decisions
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 10
Organizing the Workforce
Departmentalization
Division Function
Network Matrix
Hybrid
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 11
Functional Structures
Job Skills
Resource Use
Job Requirements
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 12
Departmentalization by Functions
Disadvantages
•Departmental Barriers
•Slow Response Time
•Ineffective Planning
•Over Specialization
Advantages
•Resource Allocation
•Unified Direction
•Improved Coordination
•Better Communication
© Prentice Hall, 2005 Excellence in Business,
Revised Edition
Chapter 8 - 13
Departmentalization by Function
Common functional departments include marketing, human resources, operations, finance, research and development, and accounting, with
each department working independently of the others.
Skills Resource
Use Expertise
© Prentice Hall, 2005 Excellence in Business,
Revised Edition
Chapter 8 - 14
Departmentalization by Division
establishes self-contained departments that encompass all the major functional resources required to achieve their goals—such as research and
design, manufacturing, finance, and marketing. These departments are typically formed according to similarities in product, process, customer, or
geography.
Products
Geography
Processes
Customers
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 15
Divisional Structures
Products
Geography
Processes
Customers
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 16
Departmentalization by Divisions
Advantages Disadvantages
Flexibility
Better Service
Management Focus
Wasting Resources
Poor Coordination
Divisional Competition
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 17
Departmentalization by Matrix
PUBLISHER
Book Team A
Manger
Book Team B
Manger
Editorial
Manager
Production
Manager
Design
Manager
Editor A Production
Editor A Designer A
Editor B Production
Editor B Designer B
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 18
Departmentalization by Network
Advantages Disadvantages
Lower Costs
Increase Flexibility
Boost Competitiveness
Lower Control
Increase Vulnerability
Less Distinctiveness
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 19
Divisions Functions
Network Matrix
Hybrid
Structure
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 20
Shared Information
Neutral
Individual
Random or Varied
Goal
Synergy
Responsibility
Skills
Shared Mission
Positive
Individual and Mutual
Complementary
Work Groups Work Teams
Comparing Work Groups and Work Teams
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 21
Workplace Teams
Problem-Solving
Self-Managed
Functional
© Prentice Hall, 2005 Excellence in Business,
Revised Edition
Chapter 7 - 22
• PROBLEM-SOLVING TEAM: Also referred to as quality circles,
problem-solving teams usually consist of 5 to 12 employees from the
same department who meet voluntarily to find ways of improving
quality, efficiency, and the work environment. Any recommendations
they come up with are then submitted to management for approval.
• SELF-MANAGED TEAMS: take problem-solving teams to the next
level. They manage their own activities and require minimum
supervision. Typically they control the pace of work and
determination of work assignments. Fully self-managed teams select
their own members. As you might imagine, many managers are
reluctant to embrace self-managed teams because doing so requires
them to give up significant control.
• FUNCTIONAL TEAMS: or command teams, are organized along the
lines of the organization’s vertical structure and thus may be referred
to as vertical teams. They are composed of managers and employees
within a single functional department.
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 23
Cross-Functional Teams
Task Forces
Special Purpose
Committees
© Prentice Hall, 2005 Excellence in Business,
Revised Edition
Chapter 7 - 24
• CROSS-FUNCTIONAL TEAMS: In contrast to functional teams, cross-
functional teams, or horizontal teams, draw together employees from
various functional areas and expertise. In many cross-functional
teams, employees are cross-trained to perform a variety of tasks.
Cross-functional teams have many benefits:
(1) They facilitate the exchange of information between employees,
(2) they generate ideas for how best to coordinate the organizational
units that are represented,
(3) they encourage new solutions for organizational problems, and
(4) they aid the development of new organizational policies and
procedures.
© Prentice Hall, 2005 Excellence in Business,
Revised Edition
Chapter 7 - 25
• Task forces. A task force is a type of cross-functional team formed to work on
a specific activity with a completion point. Several departments are usually
involved so that all parties who have a stake in the outcome of the task are
able to provide input. However, once the goal has been accomplished, the task
force is disbanded. Saint Francis Hospital in Tulsa, Oklahoma, established a
task force to find ways to reduce the cost of supplies. The team members
came from many departments, including surgery, laboratory, nursing, financial
planning, administration, and food service. The team not only helped the
hospital save money by curbing supply waste but also generated excitement
among hospital employees about working together for common goals.
• Special-purpose teams. Like task forces, they are created as temporary
entities to achieve specific goals. However, special-purpose teams are
different because they exist outside the formal organization hierarchy.
Such teams remain a part of the organization but have their own
reporting structures, and members view themselves as separate from
the normal functions of the organization. A special-purpose team might
be used to develop a new product when complete creative freedom is
needed. By operating outside the formal organization, the team would
be able to test new ideas and new ways of accomplishing tasks.
© Prentice Hall, 2005 Excellence in Business,
Revised Edition
Chapter 7 - 26
• Committees. In contrast to a task force, a committee usually has a long life
span and may become a permanent part of the organizational structure.
Committees typically deal with regularly recurring tasks. For example, a
grievance committee may be formed as a permanent resource for handling
employee complaints and concerns. Because many committees require official
representation in order to achieve their goals, committee members are usually
selected on the basis of their titles or positions rather than their personal
expertise.
© Prentice Hall, 2005 Excellence in Business,
Revised Edition
Chapter 7 - 27
• Virtual teams, are groups of physically dispersed members who work
together to achieve a common goal. Virtual team members
communicate using a variety of technological formats and devices
such as company intranets, e-mail, electronic meeting software, and
telephones. Occasionally, they may meet face-to-face. The biggest
advantage of virtual teams is that members are able to work together
even if they are thousands of miles and several time zones apart.
• The three primary factors that differentiate virtual teams from face-to-
face teams are the absence of nonverbal cues, a limited social context,
and the ability to overcome time and space constraints. Because
virtual teams must function with less direct interaction among
members, team members require certain competencies. Among these
are project-management skills, time management skills, the ability to
use electronic communication and collaboration technologies, the
ability to work across cultures, and heightened interpersonal
awareness
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 28
Virtual Teams
Maximize Diversity
Employ Technology
Promote Teamwork
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 29
Working In Teams
Opportunities Challenges
Higher-quality decisions
Increased commitment
Lower stress levels
Less internal competition
Improved flexibility
Inefficiency
Groupthink
Diminished motivation
Structural disruption
Excessive workloads
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 30
Effective Teams
Size and Structure
Sense of Purpose
Communication
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 31
Effective Teams
Creative Thinking
Focused Efforts
Consensus
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 32
Team Development
• Forming
• Storming
• Norming
• Performing
• Adjourning
© Prentice Hall, 2005 Excellence in Business,
Revised Edition
Chapter 7 - 33
• Forming. The forming stage is a period of orientation and breaking
the ice. Members get to know each other, determine what types of
behaviors are appropriate within the group, identify what is expected of
them, and become acquainted with each other’s task orientation.
• Storming. In the storming stage, members show more of their
personalities and become more assertive in establishing their roles.
Conflict and disagreement often arise during the storming stage as
members jockey for position or form coalitions to promote their own
perceptions of the group’s mission.
• Norming. During the norming stage, these conflicts are resolved,
and team harmony develops. Members come to understand and accept
one another, reach a consensus on who the leader is, and reach
agreement on what each member’s roles are.
• Performing. In the performing stage, members are really committed
to the team’s goals. Problems are solved, and disagreements are
handled with maturity in the interest of task accomplishment.
• Adjourning. Finally, if the team has a limited task to perform, it goes
through the adjourning stage after the task has been completed. In this
stage, issues are wrapped up and the team is dissolved.
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 34
The Level of Team Cohesiveness
Competition Evaluation
Goal Achievement
Work Quality
Team Interaction
Meeting Attendance
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 35
The Emergence of Team Norms
Standards of Conduct
Acceptable Behavior
Facilitate Survival
Clarify Expectations
Identify Values
Set Limits
© Prentice Hall, 2005 Excellence in Business,
Revised Edition
Chapter 8 - 36
Member Social Behavior Low High
Team Member Roles
Task Specialist
Role
Dual Role
Socioemotional
Role Nonparticipator
Role Me
mb
er
Ta
sk
Be
ha
vio
r High
Low
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 37
Causes of Team Conflict
Scarce
Resources
Responsibility
Issues
Poor
Communication
Personality
Differences
Power
Struggles
Incompatible
Goals
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 38
Prevention Resolution
Solutions to Team Conflict
Confrontation
Defusion
Avoidance
Well-Defined Tasks
Open Communication
Clear Goals
© Prentice Hall, 2005 Excellence in Business,
Revised Edition
Chapter 7 - 39
• Avoidance may involve ignoring the conflict in the hope that it will
subside on its own, or it may even involve physically separating the
conflicting parties.
• Confrontation is an attempt to work through the conflict by getting it
out in the open, which may be accomplished by organizing a meeting
between the conflicting parties.
• Defusion may involve several actions, including downplaying
differences and focusing on similarities between team members or
teams, compromising on the disputed issue, taking a vote, appealing
to a neutral party or higher authority, or redesigning the team.
© Prentice Hall, 2007 Excellence in Business, 3e Chapter 8 - 40
Productive Team Meetings
Clarify the Purpose
Select Participants
Clarify the Agenda and Stay Focused