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Chapter 6 ± Organizational Structure and Communication

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Principles of Organization 

Organizational structure - The way managers design their firms to achieve their organization¶s mission and goals.


Principles of Organization 

Division of Labor and Departmentalization
± ±


Division of labor - Degree to which tasks are subdivided into separate jobs. Specialization can lead to efficiency and increased performance, but if jobs become too specialized and boring, performance can decrease. Departmentalization ± Grouping of related activities into units.

To work quickly. and who the boss is can change according to the task to be performed. 6-4 .Principles of Organization  Chain of Command ± ± ± Line of authority from the top to the bottom of the organization. employees at all levels need to communicate directly. Tells you who your boss is and who to go to for help.

The number of employees reporting to one manager affects the number of levels of managers.Principles of Organization  Span of Management ± ± ± It is the number of employees reporting to a manager. 6-5 . the trend has clearly been to increase the span of management. With downsizing.

6-6 . With decentralized authority.Principles of Organization  Centralized and Decentralized Authority ± ± ± With centralized authority. Decentralization allows more input into decision making and greater employee commitment to carrying out the decisions. top managers make important decisions. middle and first-line managers make important decisions where the action is.

Principles of Organization  Coordination ± ± With the division of labor and departmentalization comes the need to coordinate the work of all departments. Is difficult with wider spans of management and decentralization. 6-7 .

Organization Chart 6-8 .Exhibit 6.2 .

finance and accounting. such as production and operations. human resources. Involves organizing departments around goods and services provided.Common Types of Departmentalization  Functional Departmentalization ± Involves organizing departments around essential input activities. 6-9  Product (Service) Departmentalization ± . marketing and sales.

Common Types of Departmentalization  Customer Departmentalization ± Involves organizing departments around the needs of different types of customers. 6-10 .  Territory (Geographic) Departmentalization ± Involves organizing departments in each area in which the enterprise does business.

6-11 .Common Types of Departmentalization  Divisional Departmentalization (MForm) ± The firm develops independent lines of business that operate as separate companies. all contributing to the corporation profitability.

Common Types of Departmentalization  Matrix Departmentalization ± ± Combines the functional and product departmentalization structures.  Combination ± 6-12 . Many large companies have more than one form of departmentalization. Its flexibility is a major advantage.

Cross-functional teams have members from different departments to coordinate tasks between departments. 6-13 .Contemporary Organization  Team organizations and reengineering ± ± ± Contemporary organizations are using teams as a central coordinating organizational principle. The coordinating focus is horizontal rather than vertical.

6-14 .Contemporary Organization  Team organizations and reengineering ± Reengineering is the redesign of work to combine fragmented tasks into streamlined processes that save time and money.

Core competencies are the functions an organization does well.Contemporary Organization  Virtual organizations ± ± ± They are also called network organizations because of the need for a good network of vertical inter-organizational relationships. It outsources major business functions and focuses on core competencies. 6-15 .

team organizations. and eorganizations. Use an outsourcing network. Include the characteristics of learning organizations. 6-16 .Contemporary Organization  Boundaryless organizations ± ± ± Break down vertical and horizontal barriers within the firm and between the firm and its suppliers and customers.

Intranets. Communicate over the Internet. 6-17 .Contemporary Organization  e-Organizations ± ± ± Use e-business. All employees can quickly and easily get information from sources both inside and outside the organization to break down boundary barriers. and Extranets.

Face-to-face team meetings are not common in international business. Virtual meetings are being held regularly over the Internet with ewritten communications.Contemporary Organizations Affect Human Relations    Human relations are changing in the global economy with contemporary organizations. 6-18 .

Organizational Communication   Is the compounded interpersonal communication process across an organization. 6-19 . The interpersonal communication building blocks affect the organization¶s performance.

Downward communication ± The process of higher-level management telling those below them what to do.Employees send a message to their manager. 6-20 .Vertical Communication    The flow of information is both up and down the chain of command and is called as formal communication. Upward communication .

Also called as informal communication or lateral communication. 6-21 . Most messages processed by an organization are carried via informal channels.Horizontal Communication    The flow of information is between colleagues and peers.

To help prevent incorrect rumors.Grapevine Communication   The grapevine is the informal vehicle through which messages flow throughout the organization. 6-22 . keep the information flowing through the grapevine as accurate and rumor-free as possible.

Two major types of communication networks are those within organizations and those within departments and small groups. 6-23 .Communication Networks   Are sets of employees who have stable contact through which information is generated and transmitted.

Exhibit 6.Small Group Communication Networks 6-24 .3 .

Oral Communication Media Face-to-Face Telephone Meetings Presentations 6-25 .

Should follow grammar. 6-26 . and formal. and writing rules. Common channels include memos. official.ritten Communication    Is appropriate for sending general information. bulletin board notices. and fax. reports. messages requiring future action. posters. letters. or longterm messages. syntax. computers/e-mail.

Nonverbal Communication Facial Expressions Vocal Qualities Gestures Posture 6-27 .

surprise. and disgust.Emotions   There are six universal emotions² happiness. Emotional labor ± ± Requires the expression of desired emotions during interpersonal relations. sadness. anger. fear. Managers give speeches to emotionally charge employees and motivate them to increase performance. 6-28 .

Feelings are usually disguised as factual statements. they tell you people¶s attitudes and needs.Emotions  Understanding feelings ± ± ± Feelings are subjective. Feelings are neither right nor wrong but behavior is. 6-29 .

6-30 . women are more emotional than men because: ± ± ± Girls are socialized to be nurturing and to show emotions. Women may be genetically better at dealing with emotions. Women may have a greater need for social approval.Emotions  According to research.

depression. 6-31 . and guilt.Emotions  Global differences ± ± Some cultures lack words to express feelings such as anxiety. sadness. Emotional labor expectations vary culturally. and they interpret the same emotions differently.

identify them verbally with reflecting responses. Do not agree or disagree with the feelings.Dealing with Emotional Employees    Calm the emotional person by encouraging them to express their feelings in a positive way. paraphrasing the feeling to the employee. Use empathic listening. 6-32 .

and don¶t get defensive.Criticism   People do not enjoy being criticized. 6-33 . view it as an opportunity to improve. stay calm. whether you ask for it or not. When you get criticism. even when it is constructive.

6-34 .Guidelines for Giving Effective Criticism      Give more praise than criticism. Give specific and accurate criticism. Criticize immediately. Open on a positive note and close by repeating what action is needed. Criticism should be performance oriented.