Ferrell Hirt Ferrell

BUSINESS
A CHANGING WORLD
EIGHTH EDITION

FHF

McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
 part

Managing for Quality

3
and Competitiveness
CHAPTER 6 The Nature of Management

CHAPTER 7 Organization, Teamwork, and Communication

CHAPTER 8 Managing Service and Manufacturing Operations

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 Organizational Culture

A firm’s shared values, beliefs, traditions,

philosophies, rules and role models for
behavior (aka corporate culture)
 Ensures that organizational members:
 Share values
 Observe common rules
 Share problem solving approaches

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 Organizational Culture

Formal expression
 Mission statement
 Code of ethics
 Manuals
 Ceremonies
 Memoranda

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 Organizational Culture

Informal Expression
• Dress code (or lack of one)
• Work habits
• Extracurricular activities

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 Organizational Culture

 Helps ensure that all members of a

company share values
 Suggests rules for how to behave and deal with problems
 Has a significant impact on performance and employee
retention
 Sets a positive tone for decision making and building
efficient organizational structure

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 Organizational Structure

Is the arrangement or relationship of positions

within an organization
 Structure develops as:
• Managers assign work tasks to individuals and groups
• Coordination of diverse activities to attain objectives

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 Organizational Structure

Impacts:
 Decision making
 Costs & efficiencies
 Overall success and sustainability
 Employee unity
 Understanding of how to deal with problems

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 Organizational Charts

Visual displays of the organizational structure, lines of

authority, staff relationships, permanent committee
arrangements and lines of communication

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 Assigning Tasks

Specialization
Managers divide the labor into small, specific tasks
and assign employees individual tasks to accomplish
 Why specialize?
 Efficiency
 Ease of training
 Activities too numerous for one person

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 Risks of Overspecialization

 Employees become bored

 Job dissatisfaction
 Poor quality work
 Increased injuries
 Increased employee turnover

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 Departmentalization

Grouping of jobs into working units

(departments, units, groups, divisions)
 Functional departmentalization
 Product departmentalization
 Geographical departmentalization
 Customer departmentalization

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Functional Departmentalization

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Product Departmentalization

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Geographical Departmentalization

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Customer Departmentalization

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 Delegation of Authority

[ Giving employees tasks and empowering them

to make commitments, use resources and take
action to carry out tasks ]
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 Responsibility

Obligation placed on employees to

perform assigned tasks and be held
accountable for proper execution

Accountability
• Employees who accept an assignment and the responsibility to
complete it are answerable to a superior for work outcomes

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 Degree of Centralization

Centralized Organizations
 Authority is concentrated at the top level
 Very little delegation to lower levels
Decentralized Organizations
 Decision making authority is delegated as far down the chain
of command as possible

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 Span of Management

The number of subordinates who report to a

particular manager
 A wide span of management exists when a manager directly
supervises a very large number of employees
 A narrow span of management exists when a manager directly
supervises only a few subordinates

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Forms of Organizational Structure

 Line Structure
 Line-and-staff structure
 Multidivisional structure
 Matrix structure

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Line Structure

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Line-and-Staff Structure

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 Multidivisional Structure

 Organizes departments into larger groups

called divisions
 Occurs as organizations grow larger and more
diversified
 Divisions can be formed on the same bases as departments
• Customer
• Product
• Geography
 Delegation of authority and divisionalized work

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Matrix Structure

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 Groups and Teams

Group
 Two or more individuals who communicate
with one another, share a common identity and
have a common goal
Team
 A small group whose members have complementary skills; have a
common purpose, goals and approach; hold themselves mutually
accountable

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 Committees and Task Forces

Committee
 A permanent, formal group performing a specific task
Task Force
 A temporary group responsible for a particular change activity

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 Teams

Project Teams
 Similar to task forces in that they have total control of a
specific project
Product Development Teams
 Formed to devise, design and implement a new product
Quality Assurance Teams (Quality Circles)
 Brought together from throughout the organization to solve specific problems
Self-directed Work Teams (SDWT)
 Responsible for an entire work process that delivers a product to a customer

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Organizational Communications

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 Technology and Communication

Technology has generated many

alternatives to face-to-face communication
 Voice mail
 E-mail
 Online newsletters
 Videoconferencing
 Online meeting services

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 Formal Communication

Flow of communication within the

formal organizational structure as depicted on
organizational charts.
Upward communication
Downward communication
Horizontal communication
Diagonal communication

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 Informal Communication

Separate from management’s formal, official

communication channels
 Also known as the Grapevine
 Managers can utilize informal communications as a sounding
device

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 Monitoring Communications

 Technological advances and electronic

 communication have made monitoring
 communications at work necessary
 Managers must monitor communications:
• Without invading employee privacy
• While generating respect and mindfulness amongst employees

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