Bovee/Thill, Business in Action 8/e, Global Edition Instructor’s Manual

Chapter 8
ORGANIZATION AND TEAMWORK

Chapter Overview

This chapter covers the important topics of organizational structure and teamwork. It
first discusses how different types of businesses are organized in order to best
achieve their goals. It then highlights the pros and cons of working in teams, what
constitutes effective teams, and how to resolve team conflicts. Lastly it discusses
managing unstructured organizations.

Chapter Outline

I. Designing an Effective Organization Structure

A. A company’s organization structure is the framework that enables
managers to divide responsibilities, ensure employee accountability, and
distribute decision-making authority
1. To design the organization’s structure, managers use an organization
chart, a visual representation of how employees and tasks are grouped
and where lines of communication and authority flow
2. The goal of many companies today is establishing an agile organization,
one in which company structure, policies, and capabilities allow
employees to respond quickly to customer needs and changes in the
business environment
B. Designing the most effective structure for the organization involves:
1. Determining which functions need to be done in-house and which
functions can be outsourced
a. A company’s core competencies are those activities that the
company considers central and vital to its business
2. Identifying job responsibilities and determining the most appropriate
level of work specialization – the degree to which organizational tasks
are broken down into separate jobs
3. Defining the chain of command – the lines of authority that connect the
various groups and levels within the organization. Two basic types:
a. Line organization – a system that establishes a clear line of
authority flowing from the top down
b. Line-and-staff organization – a system that has a clear chain of
command but also includes functional groups of people who provide
advice and specialized services
4. Establishing the span of management – the number of people under a
manager’s control; this is also called the span of control
a. In a flat organization, there are fewer levels of management but each
manager is responsible for more employees
b. In a tall organization, there are more layers of management, with
each manager responsible for fewer people
5. Determining decision-making authority

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a. Centralization is the concentration of decision-making authority at

the top levels of the organization
b. Decentralization is the delegation of decision-making authority to
employees in lower level positions in the organization

II. Organizing the Workforce

A. The arrangement of activities into logical groups that are then clustered into
larger departments and units to form the total organization is known as
departmentalization
B. Departmentalization typically occurs in one of four ways: functional,
divisional, matrix, or network
1. A functional structure groups employees according to their similar
skills, resource use, and expertise (e.g., research and development,
marketing and sales, human resources)
2. A divisional structure groups departments according to similarities in
product, process, customer, or geography. Each division encompasses all
the major functional resources (e.g., research and design, manufacturing,
finance, and marketing) required to achieve its goals
3. A matrix structure is one in which employees are assigned to both a
functional group and a project team, thus using functional and divisional
patterns simultaneously
4. A network structure is one in which individual companies are
connected electronically to perform selected tasks for a small
headquarters organization

III. Organizing in Teams

A. A team is a unit of two or more people who work together to achieve a
shared goal
B. There are several types of teams:
1. A problem-solving team is assembled to find ways to improve quality,
efficiency, and/or the work environment, and disbands after presenting or
implementing the solution
2. A self-managed team is one in which members are responsible for an
entire process or operation and requires minimal supervision
3. A functional team is one whose members come from a single functional
department. The structure typically follows the formal chain of command
4. A cross-functional team draws together employees from different
functional areas. It can take on several roles, including:
a. A task force, which is formed to work on a specific activity within a
specified period of time
b. A committee that may be a permanent part of the organization and
deals with regularly recurring tasks
5. A virtual team uses communication technology to bring together
geographically distant employees
C. Social networking and virtual communities are redefining teamwork and
team communication by facilitating communication and erasing the
constraints of geographic and organizational boundaries
1. Companies may use social networking technologies to form virtual
communities or communities of practice

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IV. Ensuring Team Productivity

A. The use of teams within an organization has several advantages, including:
1. Higher-quality decisions
2. Increased diversity of views
3. Increased commitment to solutions and changes
4. Lower levels of stress and destructive internal competition
5. Improved flexibility and responsiveness
B. The use of teams within an organization also has several disadvantages,
including:
1. Inefficiency
2. Groupthink – uniformity of thought that occurs when peer pressure
causes individual team members to withhold contrary or unpopular
opinions
3. Diminished individual motivation
4. Structural disruption
5. Excessive workloads
C. The size of the team (5 to 12 members is recommended) and the types of
individuals on a team are also vital to its success
D. Other factors contributing to the success and effectiveness of the team
include:
1. A clear sense of purpose
2. Open and honest communication between team members
3. Empathy and mutual understanding
4. Encouraging creative, original thinking
5. Accountability
6. Focus
7. Decision by consensus

V. Fostering Teamwork
A. Teams typically go through five stages of development, as follows:
1. Forming – a period of orientation in which members get to know each
other and what is expected of them
2. Storming – the period in which conflicts may arise as team members
jockey for position or form coalitions
3. Norming – the period in which harmony develops and team members
reach agreement on member roles
4. Performing – the stage in which members are committed to team goals
and the team focuses on task accomplishment
5. Adjourning – the stage after task completion in which issues are wrapped
up and the team is dissolved
B. As the team moves through the stages of development, it develops a certain
level of cohesiveness, a measure of how committed team members are to
their team’s goals
C. Teams will also establish norms, informal standards of conduct that guide
team behavior
D. Teams may also experience conflict
1. Conflict can be constructive or destructive
2. Conflict arises for a variety of reasons, including competing for
resources, disagreement over responsibilities, poor communication,
withholding information, differences in values, power struggles, and
differing goals

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3. Conflict can be resolved through proactive attention, communication,

openness, research, flexibility, fair play, and alliance

VI. Managing an Unstructured Organization

A. An unstructured organization is a virtual and networked organization that
lacks a conventional structure but instead assembles talent as needed from
the open market
B. The advantages of an unstructured organization include:
1. Increased agility – it can assemble, disassemble and reconfigure as
needed
2. Lower fixed costs and more flexible capacity management
3. Access to otherwise unreachable talent, because companies can “rent”
top experts in a field as needed
4. Benefits of competition, because independent contractors compete with
other contractors and must perform or risk not getting more assignments
5. Performance-based evaluation
6. Freedom and flexibility for workers, who can pick and choose projects
and clients
7. Access to jobs that may otherwise be unattainable
C. Potential disadvantages of an unstructured organization include:
1. Complexity and control, because workers report to multiple bosses in
multiple companies
2. Uncertainty
3. Loss of meaning and connection
4. Diminished loyalty – workers are often competing vendors, not long-
term employees
5. Career development – independent contractors are responsible for
developing their own careers, rather than following a designated career
path
6. Management succession
7. Accountability and liability

Learning Catalytics is a "bring your own device" student engagement, assessment,

and classroom intelligence system. It allows instructors to engage students in class
with real-time diagnostics. Students can use any modern, web-enabled device
(smartphone, tablet, or laptop) to access it. For more information on using Learning
Catalytics in your course, contact your Pearson Representative.

Classroom Activities

In-Class Activity: Tall vs. Flat Organization

Goal: Help students better understand the differences between tall and flat
organizations.

Time Limit: 10 minutes

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Details:
1. Create a list on one side of the blackboard, including the names of different
companies such as Ford Motors, Google, Citi Group, Genentech, Microsoft,
Intuit, Netflix, Walmart, etc.
2. Draw two columns on the other side of the blackboard, one labeled “Tall
Organization” and the other labeled “Flat Organization.”
3. Ask students to pair up and recreate the content of the blackboard in their
notebooks and subsequently assign all of the line items into the correct
columns.

End-of-Chapter

Behind the Scenes

Teaming Up for Success at The Container Store

Critical Thinking Questions

8-1 Why might it be difficult to implement a system like Shift in a well-
established company such as Cemex?
A well-established company would have a clear organizational structure and
processes for completing various tasks. Suddenly reversing this by opening up
channels of communication across geographic and hierarchical boundaries
would take some getting used to and likely face some resistance. (LO: 8.1;
AACSB: Reflective thinking)

8-2 Should Cemex open Shift up to business partners and customers, in

addition to employees? Why or why not? If it did, what factors would the
company have to consider first?
Opening up the system to business partners and customers could be very
beneficial. Learning early and firsthand of struggles or successes in dealing with
Cemex would allow the company to react and respond quickly. It could address
issues and replicate successes with the information from partners and customers.
However, the company would need to consider security issues regarding
proprietary information and privacy issues of partners and clients. It would also
need to consider whether opening up this channel of communication externally
would result in the company being overloaded with petty complaints from the
other users instead of substantive, useful information. (LO: 8.1; AACSB:
Reflective thinking)

8-3 How could Cemex use Shift to recruit new employees?

Shift could be used to do internal recruiting of employees looking to move up or
around within the organization, as well as make a geographic shift. If open to
partners and clients, potential employees could also be recruited from this pool.
The very fact of having such a collaborative tool in the workplace could make
Cemex more appealing to prospective employees. (LO: 8.4; AACSB: Analytical
thinking)

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Learn More Online

Read more about Shift at http://shiftevolution.cemexlabs.com. How is Shift similar to
the social media and social networking systems you use in your personal life? How
does it differ? Would you feel comfortable collaborating with colleagues you’ve
never met using a system like this?
Students’ responses will depend, in large part, on the material currently posted on the
website. (LO: 8.1; AACSB: Reflective thinking)

Test Your Knowledge

Questions for Review

8-4 Define the four types of organization structure.
Companies can organize in four ways: by function, which groups workers
according to their skills, resource use, and expertise; by division, which
departmentalizes as per similarities in product, process, customer, or geography;
by matrix, or assign workers from functional departments to interdisciplinary
project teams and get them to report to a department head and a team leader; and
by network, which connects separate companies that perform selected tasks for
a headquarters organization. (LO: 8.1)

8-5 What are the differences between a group and a team?

A team is a unit of two or more people who share a mission and collective
responsibility as they work together to achieve a goal, whereas members of a
work group interact mainly to share information and make decisions to help the
performance of individuals within their area of responsibility. (LO: 8.1)

8-6 What are the advantages and disadvantages of work specialization?

Work specialization, also called division of labor, refers to the degree to which
organizational tasks are broken down into separate jobs. When employees
specialize in one task in a series needed to complete a job, they can complete it
far more efficiently than if they performed every task necessary to complete the
job. However, because repetition of tasks creates boredom, employees can
become unmotivated, and feel isolated. For this reason, companies are balancing
specialization and employee motivation through teamwork. (LO: 8.1)

8-7 What are the advantages and disadvantages of functional

departmentalization?
Functional departmentalization (grouping employees according to their skills
and resource use) has several distinct advantages. First, because divisions are
self-contained, they can react quickly to change. Second, because each division
focuses on a limited number of products, processes, customers, or locations,
divisions can often provide better service to customers. However, it can also
increase costs through duplication. Also, poor coordination among divisions can
cause them to become fixated on divisional goals at the expense of the
organization’s overall goals. Finally, divisions may compete with one another,
causing rivalries that hurt the organization as a whole (LO: 8.2)

8-8 What are the advantages and disadvantages of the unstructured

organizational model?

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Advantages of the unstructured organizational model include: (1) increased

agility to assemble, reconfigure, and disassemble organizations as dictated by
market trends; (2) lower fixed costs and more flexible capacity management; (3)
access to otherwise unreachable talent; (4) benefits of competition; (5) workers
are evaluated on measurable, performance-based evaluation; (6) freedom and
flexibility; and (7) access to jobs that might be otherwise unattainable. The
unstructured organization is not without its disadvantages, however, and these
include: (1) complexity and control issues; (2) uncertainty; (3) loss of meaning
and connection because employees do not have the opportunity to form bonds;
(4) diminished loyalty; (5) employees must assume more responsibility for
career development; (6) lack of management succession; and (7) less clarity in
terms of accountability and liability. (LO: 8.6)

Questions for Analysis

8-9 Why is important for companies to decide on their core competencies
before choosing an organization structure?
Core competencies are the activities in which a company excels and which have
the potential to create competitive advantages. Those are precisely the activities
that companies should focus on themselves rather than outsource to other
companies. Therefore, companies need to decide on their core competencies
(i.e., the activities they should focus on) before they choose an organizational
structure. (LO: 8.1; AACSB: Analytical thinking)

8-10 How can a virtual organization reduce costs?

In the virtual organization structure, companies hire the services that are
needed when they are needed, and then are able to change them once they are
no longer needed. Thus, rather than hiring individual employees to perform
specific functions and paying for the training and development of these
employees, the virtual organization structure allows the flexibility of focusing
on its core competencies and outsourcing other key activities to firms who
specialize in those specific areas. (LO: 8.2; AACSB: Information technology)

8-11 Describe the stages of team development. Where might the problems
arise?
Forming is the first stage and is seen as a period of orientation and ice-
breaking. Storming follows and sees individuals show more of their personality
and try to establish a role within the team. Norming is the stage where conflicts
are resolved and there is harmony. In the performing stage members are truly
committed to achieving the team’s goals. Adjourning is the stage when issues
are wrapped up and the team is dissolved after completion of the assigned
tasks. Problems could occur at any stage; however, one would primarily expect
these in the earlier stages of forming and storming. (LO: 8.4; AACSB:
Reflective thinking)

8-12 What makes a team effective in your view?

Answers are likely to vary; however, students could suggest that an effective
team has a clear sense of purpose, communicate openly and honestly, build a
sense of fairness in decision making, think creatively, maintain accountability,
stay focused on key issues, and emphasize consensus (while balancing and
staying true to the rest of the characteristics). (LO: 8.3; AACSB: Information
technology)

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8-13 Ethical Considerations. A company executive accidentally emailed you a

confidential spreadsheet with the salaries of all the employees in the
company. You took only a quick peek before deleting it, but you looked
long enough to discover that other managers at your level are earning
anywhere from 10 to 40 percent more than you, even though you’ve been
at the company longer than any of them. Based on this discovery, you
believe you deserve consideration for a raise. How will you handle the
situation?
Visit MyBizLab for suggested answers. (LO: 8.3; AACSB: Ethical
understanding and reasoning)

Questions for Application

8-14 You are the leader of a cross-functional work team whose goal is to find
ways of lowering production costs. Your team of eight employees has
become mired in the storming stage. The team members disagree on how
to approach the task, and they are starting to splinter into factions, each
pursuing its own goals. What can you do to help the team move forward?
The team leader’s focus at this point should be to resolve the conflict and help
the team become more cohesive. The leader can encourage the disputing
parties to confront the issue by openly discussing it at a special meeting. After
both parties have stated their views, a compromise may be possible. If not, the
leader can suggest that the team vote on the issue, with all parties agreeing to
accept the outcome. If this fails, the leader can turn to a neutral third party to
mediate the dispute. (LO: 8.5; AACSB: Application of knowledge)

8-15 You’ve recently accepted a job as the U.S. sales manager for a German
manufacturing company. One of your first assignments is serving on a
virtual problem solving team with colleagues from Germany, France,
Japan, and South Korea. Budgets are tight, so you won’t have the
opportunity to meet with your teammates in person to get to know one
another. What steps can you take to help the team develop into a cohesive
and efficient unit?
Students’ answers will vary but some key points to consider include: a) take
full advantage of the diverse viewpoints, experiences, and skills of the various
team members; b) use technology to replicate resources that in-person teams
rely on; and c) take extra care to keep the team functioning effectively. (LO:
8.3; AACSB: Information technology)

8-16 Concept Integration. One of your competitors has approached you with a
merger proposal. The economies of scale would be terrific. So are the
growth possibilities. There’s just one issue to be resolved. Your competitor
is organized under a flat structure and uses lots of cross- functional teams.
Your company is organized under a traditional tall structure that is
departmentalized by function. Using your knowledge about culture clash
(see page 112), what are the likely issues you will encounter if these two
organizations are merged?
Visit MyBizLab for suggested answers. (LO: 8.1; AACSB: Application of
knowledge)

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8-17 Concept Integration. Chapter 7 discussed several styles of leadership,

including autocratic, democratic, and laissez-faire. Using your knowledge
about the differences in these leadership styles, which style would you
expect to find under the following organization structures: (a) tall
organization with departmentalization by function; (b) tall organization
with departmentalization by matrix; (c) flat organization; (d) self-directed
teams?
Visit MyBizLab for suggested answers. (LO: 8.1; AACSB: Application of
knowledge)

Expand Your Knowledge

Discovering Career Opportunities

As organizations become more complex in their day-to-day operations, the need for
even greater numbers of managers grows. The wealth of management positions
means that there can be a huge level of variation between different management
posts. Search on the Internet for job advertisements for managers in at least two
different industries. What skills are needed to qualify for these positions? Are
there any similarities between the jobs you have found? Identify the qualities
you might need to develop in order to apply for one of these roles.
Answers will depend on the job roles found by the students during their research. It is
likely that they would have found roles which have some overlapping skills required
in each. It would be expected that students would identify and discuss these
similarities. Students may also think about adding to or developing a personal
development plan, based on this activity, to track skills that they need to develop.
(LO: 8.1; AACSB: Application of knowledge)

Improving Your Tech Insights: Mobile Collaboration

Mobile devices gives companies a new and another set of options for team projects
and other collaborative efforts, particularly when used with cloud computing.
Mobility lets workers participate in online brainstorming sessions, seminars, and
other formal or informal events from wherever they happen to be at the time. This
flexibility can be particularly helpful during the review and production stages of
major projects, when deadlines are looming and decisions and revisions need to be
made quickly. Find an example of a company that is using mobile devices for
team collaboration. In an email to your instructor, identify at least two business
benefits that this mobile solution provides.
Students’ answers will vary depending on the choice of company. (LO: 8.3; AACSB:
Information technology)

Practice Your Skills

Sharpening Your Communication Skills

Imagine you are starting a new job today. You are joining an already well-established
team, and will be working closely with all of your colleagues. You have a busy
couple of days ahead of you, with attending centralized training courses before you
begin work in your new team. This means you will be unable to meet and interact
with the other members of the team face-to-face until later in the week. In order to

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ensure that the teams are somewhat familiar with you before you meet them in
person, write a short email introducing yourself.
In answer to this activity, students should have written and presented a short
introductory email which is professional and courteous toward people that they have
not yet met. It should not be too serious; however, a level of formality would be
expected as this is a workplace setting. (LO: 8.5; AACSB: Interpersonal relations and
teamwork)

Building Your Team Skills

What’s the most effective organization structure for your college or university? With
your team, obtain a copy of your school’s organization chart. If this chart is not
readily available, gather information by talking with people in administration, and
then draw your own chart of the organization structure.

Analyze the chart in terms of span of management. Is your school a flat or a tall
organization? Is this organization structure appropriate for your school? Does
decision making tend to be centralized or decentralized in your school? Do you
agree with this approach to decision making?

Finally, investigate the use of formal and informal teams in your school. Are
there any problem-solving teams, task forces, or committees at work in your
school? Are any teams self-directed or virtual? How much authority do these
teams have to make decisions? What is the purpose of teamwork in your school?
What kinds of goals do these teams have?

Share your team’s findings during a brief classroom presentation and then
compare the findings of all teams. Is there agreement on the appropriate
organization structure for your school?
Universities and community colleges tend to be rich with examples of different types
of organizational structures. There are usually many committees and task forces, as
well as “tall” organizational structures to examine. This blending of structures is a
good example for students to explore because it demonstrates the ways in which
different types of structures can coexist. Students may tend to overlook the informal
committees, groups, and networks; be sure to encourage them to notice the informal
as well as the formal structures. (LO: 8.2; AACSB: Application of knowledge)

Developing Your Research Skills

Although teamwork can benefit many organizations, introducing and managing team
structures can be a real challenge. Search the past issues of business journals or
newspapers (print or online editions) to locate articles about how an organization has
overcome problems with teams.

8-18 Why did the organization originally introduce teams? What types of teams
are being used?
Students’ answers will vary depending on the articles selected. (LO: 8.3;
AACSB: Interpersonal relations and teamwork)

8-19 What problems did each organization encounter in trying to implement

teams? How did the organization deal with these problems?

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Students’ answers will vary depending on the articles selected. (LO: 8.4;
AACSB: Interpersonal relations and teamwork)

8-20 Have the teams been successful from management’s perspective? From the
employees’ perspective? What effect has teamwork had on the company,
its customers, and its products?
Students’ answers will vary depending on the articles selected. (LO: 8.4;
AACSB: Interpersonal relations and teamwork)

MyBizLab Assisted-Graded Assignments

8-21 What are some possible benefits and risks of having teams compete
against each other, such as having the sales teams from various regions
compete to add the most new customers?
Visit MyBizLab for suggested answers. (LO: 8.4; AACSB: Interpersonal
relations and teamwork)

8-22 Review the “Loss of Meaning and Connection” bullet point on page 191 in
the discussion of the potential challenges of unstructured organizations. If
you were planning to launch an unstructured organization, what steps
could you take to help ensure that any independent contractors you hire
on a project-by-project basis will have the same pride in their work that a
dedicated, full-time employee would have?
Visit MyBizLab for suggested answers. (LO: 8.6; AACSB: Interpersonal
relations and teamwork)

CHECKPOINTS

LEARNING OBJECTIVE 8.1: Explain the major decisions needed to design an

organization structure.

Critical thinking:
(1) What are the risks of a poorly designed organization structure?
A poorly designed structure can create enormous waste, confusion, and frustration for
employees, suppliers, and customers.

(2) How does a flat structure change the responsibilities of individual managers?
A flat structure widens the span of management for individual managers.

It’s your business:

(1) What would you say are your two or three core competencies at this point in your
career?
Students’ responses will vary depending on personal experiences and opinions.

(2) Would you function better in a highly centralized or highly decentralized

organization? Why?
Students’ responses will vary depending on personal opinions.

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LEARNING OBJECTIVE 8.2: Define four major types of organization

structure.

Critical thinking:
(1) Should The Container Store use the same organization structure in each of its
stores around the country? Why or why not?
It should since that will give customers all over the country the same shopping
experience and convey a uniform brand image.

(2) Why does a matrix structure create potential problems in the chain of command?
In a matrix structure, an employee reports to two superiors simultaneously.

It’s your business:

(1) Do you think you would function well in a matrix structure, where you would
need to report to two bosses simultaneously? Why or why not?
Students’ responses will vary depending on personal opinions.

(2) How well would you function in a matrix—could you share control with another
manager?
Students’ responses will vary depending on personal opinions.

LEARNING OBJECTIVE 8.3: Explain how a team differs from a group, and
describe the six most common forms of teams.

Critical thinking:
(1) How might the work of a task force or committee disrupt the normal chain of
command in an organization?
Task forces and committees are cross-functional and they require team members to
take time away from their own departments or divisions to meet and work on specific
activities.

(2) Should new hires with no business experience be assigned to virtual teams? Why
or why not?
They can be assigned to virtual teams as long as they get to meet in person at least
once with other team members before working on the virtual teams.

It’s your business:

(1) Would you function well in a virtual team setting that offered little or no chance
for face-to-face contact with your colleagues? Why or why not?
Students’ responses will vary depending on personal opinions.

(2) If you had two similar job offers, one with a company that stresses teamwork and
another with a company that stresses independent accomplishment, which would you
choose? Why?
Students’ responses will vary depending on personal opinions.

LEARNING OBJECTIVE 8.4: Highlight the advantages and disadvantages of

working in teams, and list the characteristics of effective teams.

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Critical thinking:
(1) Is groupthink similar to peer pressure? Why or why not?
Groupthink is uniformity of thought that occurs when peer pressures cause individual
team members to withhold contrary or unpopular opinions; therefore, groupthink is
definitely related to peer pressure.

(2) Is supporting a group decision you don’t completely agree with always a case of
groupthink? Explain your answer.
Not necessarily. It could be that you believe the group decision is for the good of the
whole firm or group even though it may affect you negatively. In this case, it is
known as a personal sacrifice for the common good rather than groupthink.

It’s your business:

(1) How would you characterize the experience you’ve had working in teams
throughout your high school and college years?
Students’ responses will vary depending on personal experiences.

(2) How can you apply experience gained on athletic teams and other collaborative
activities to the business world?
Students’ responses will vary depending on personal opinions.

LEARNING OBJECTIVE 8.5: Review the five stages of team development, and
explain why conflict can arise in team settings.

Critical thinking:
1) How can a team leader know when to step in when conflict arises and when to step
back and let the issue work itself out?
It depends on whether the team leader perceives such conflicts as constructive or
destructive. If they are constructive, she should step back, but if they are destructive,
she should step in.

(2) What are the risks of not giving new teams the time and opportunity to “storm”
and “norm” before tackling the work they’ve been assigned?
The risks include delaying the potential conflicts (rather than dealing with them first)
until such conflicts prevent them from successful teamwork.

It’s your business:

(1) Have you ever had to be teammates (in any activity) with someone you simply
didn’t like on a personal level? If so, how did this affect your performance as a team
member?
Students’ responses will vary depending on personal experiences.

(2) Have you ever had to adapt your regular personality in order to succeed on a
particular team? Was this a positive or negative experience?
Students’ responses will vary depending on personal experiences.

LEARNING OBJECTIVE 8.6: Explain the concept of an unstructured

organization, and identify the major benefits and challenges of taking this
approach.

Copyright ©2017 Pearson Education, Ltd. 8-13

 Bovee/Thill, Business in Action 8/e, Global Edition Instructor’s Manual

Critical thinking:
(1) “Unstructured organization” is something of a contradiction in terms; are such
companies still “organized” if they have no permanent structure? Why or why not?
Companies with an unstructured organization are indeed organized, but in a very
flexible, nontraditional manner. These companies use digital technologies to form
and reform work patterns almost on a project-by-project basis.

(2) How can workers develop marketable skills if they work as independent
contractors?
Although independent contractors have to assume more responsibility for their career
development – as opposed to progressing through the ranks of an organization – they
also have the opportunity to seek positions in which they can learn new skills.
Independent contractors can pick and choose projects that interest them and that they
believe will assist them in obtaining marketable skills.

It’s your business:

(1) Where do you think you would be most comfortable: as a regular employee in a
conventionally structured firm or as an independent contractor, moving from project
to project? Why?
Students’ responses will vary depending on personal experiences.

(2) Assume that you went to work for a conventional employer and then left to work
as an independent contractor as soon as you developed enough of a skill set to make
it on your own. (Assume as well that you were not violating any sort of employment
contract and were free to leave.) Would you have any ethical concerns about leaving
an employer who had invested in your professional development? Why or why not?
Students’ responses will vary depending on personal experiences.

Copyright ©2017 Pearson Education, Ltd. 8-14