Chapter 7+8

Managing Effectively
&
Organization Structure

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Managing
Effectively
Managing Effectively

Methods Levels

Managing
Effectively

Skills Functions
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from pg 240
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Managing
Effectively

Management Pyramid

CEO,
Top CFO, COO
Vice Pres.
Sales Mgrs
Plant Mgrs.
Mid-Level

Supervisors
Portion of Graphic Front Line/Supervisory Foremen
from pg 240
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Managing
Effectively
Levels of Management

Levels
Functions
Skills
Methods

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Managing
Effectively
Management Functions

Levels
Functions Functions
Skills
Methods
Planning

Organizing

Leading
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from pg 240 Controlling
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Managing
Effectively
Process of Management

Management

Planning
Resources Feedback

Employees Organizing Achievement

Capital of Goals &
Products Objectives
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Leading
Information
from pg 240
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Controlling

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Managing
Effectively
Planning

• Vision
• Mission statement
• Goals
• Objectives

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Managing
Effectively
Planning Types

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Managing
Effectively
Organizing

• Organize
the
resources
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to
fromachieve
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the goals.
• Who is to
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Managing
Effectively
The Vertical Structure

• Authority in organizations
– Authority - the legitimate right to make decisions and to
tell other people what to do
– Board of directors - elected by the stockholders to run
the organization
• led by a chair
• performs three functions
– selecting, assessing, rewarding, and perhaps
replacing the CEO
– determining the firm’s strategic direction and
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reviewing financial performance
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will go here – assuring ethical, socially responsible, and legal
conduct

8-10
Managing
Effectively
The Vertical Structure (cont.)

• Authority in organizations (cont.)

– Chief Executive Officer (CEO) - occupies the top of the
organizational pyramid
• authority officially vested in the board of directors is
assigned to the CEO
• CEO personally responsible to the board and owners
– Top Management Team - typically comprised of the
CEO, president, chief operating officer, chief financial
officer, and other key executives
• frequently meet with the CEO to make important
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8-11
Managing
Effectively
The Vertical Structure (cont.)
• Hierarchical levels
– Hierarchy - the authority levels of the organizational
pyramid
• top management - strategic managers in charge of
the entire organization
• middle management - in charge of plants or
departments
• lowest levels - made up of lower management and
workers
• Span of control
– the number of subordinates who report directly to a
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will go here – narrow spans produce tall organizations
– wide spans produce flat organizations

8-12
Managing
Effectively
The Vertical Structure (cont.)

• Decentralization
– result of the delegation of responsibility
and authority
– centralized organization - high-level
executives make most decisions and
pass them down to lower levels for
implementation
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8-13
Managing
Effectively
The Horizontal Structure
• Basic concepts
– departmentalization - subdividing the organization into
smaller subunits
• line departments - have responsibility for the
principle activities of the firm
– deal directly with the organization’s primary
goods and services
– line managers typically have:
» substantial authority and power
» ultimate responsibility for major operating
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from pg 240 » accountability for “bottom-line” results
will go here • staff departments - provide specialized support for
line units
– moving toward role focused on strategic support
8-14 and expert advice
Managing
Effectively
The Horizontal Structure (cont.)

• Functional organization
– jobs (and departments) are specialized and grouped
according to business functions and the skills they
require
• e.g., production, marketing, R&D, human resources,
and finance
– at the most basic level, functional structure is organized
around the company’s value chain
• value chain - sequence of activities that flow from
raw materials to the delivery of a product or service
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8-15
Managing
Effectively
Functional Structure

President
Staff departments

Information
Human
technology Procurement
resources
services

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Inbound Outbound Marketing
will go here Operations Service
logistics logistics And sales

Line departments
8-16
Managing
Effectively
The Horizontal Structure (cont.)

• Divisional organization
– units grouped around products,
customers, or geographic regions
– groups all functions into a single division
• duplicates each function across all of the
divisions
– separate divisions may act almost as
Portion of Graphic separate businesses
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of the organization
8-17
Managing
Effectively
The Horizontal Structure (cont.)

• Divisional organization (cont.)

– product divisions - all functions that
contribute to a given product are
organized under one manager
– customer and geographical divisions
• build divisions around customer or
geographical distinctions
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8-18
Managing
Effectively
Product Divisions At The limited
CEO (Les Wexner)

Apparel Intimate Brands Support

Businesses
Express Victoria’s Secret Distribution
Bath & Body Services
Limited Stores
Works Real Estate
Express White Barn
Candle Co. Store Planning
Limited Stores
Design Services
Structure
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from pg 240 the
Creative Services
Lerner
will go here New York limited Technology
Lane Bryant Services

New York & Co.

8-19
Managing
Effectively
Geographical Organization

Chairman
CEO

Northeast Midwest Southeast Southwest Pacific

regional regional regional regional regional
manager manager manager manager manager

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General General General General General
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managers for: managers for: managers for: managers for: managers for:
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New York Cleveland Raleigh Dallas Seattle
Philadelphia Chicago Atlanta Houston San Francisco
Boston St. Louis Orlando Albuquerque Los Angeles
8-20
Managing
Effectively
The Horizontal Structure (cont.)

• Matrix organization
– hybrid form of organization
– dual reporting relationships in which some managers
report to two superiors
• one functional and one product
– advantages
• higher degree of flexibility and adaptability
– disadvantages
• violation of the unity of command principle
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– reporting to two superiors can create confusion
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8-21
Managing
Effectively
Matrix Organizational Structure
Chairman
CEO

Project Functional Production Engineering Personnel Accounting

management managers

Production Engineering Personnel Accounting

Project
group group group group
Manager Two-boss Two-boss Two-boss Two-boss
A manager manager manager manager
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here Production Engineering Personnel Accounting
group group group group
Manager Two-boss Two-boss Two-boss Two-boss
B manager manager manager manager

8-22
Managing
Effectively
Structures that Allow more
Employees Input
• Matrix organization: an organizational structure that enables
various parts of the firm to interact to focus on specific
projects

• Intrapreneurship: the assignment of particular employees of

a firm to generate ideas, as if they were entrepreneurs
running their own firms

• Informal Organization Structure: an informal

communications network among a firm’s employees
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8-23
Managing
Effectively
Leading

• Means
creating a
vision
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of Graphic
from pg 240
the
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organizati
on and
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Managing
Effectively
Leadership Styles

Levels
Functions
Skills
Methods

Autocratic Free-Rein Participative

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Managing
Effectively

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Managing
Effectively
Investors & Reporting

Levels
Functions
Skills
Methods Investors

Sarbanes-Oxley Act

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from pg 240
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Managing
Effectively
Integration of Functions

Levels
Functions
Skills
Methods

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from pg 240
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Managing
Effectively
Integration of Functions

Levels
Functions
Skills
Methods

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from pg 240
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Managing
Effectively
Managerial Skills

Levels
Functions Conceptual
Skills
Methods
Interpersonal

Technical

Decision Making
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from pg 240
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Managing
Effectively
Decision-Making Steps

Levels
Functions
Skills
Methods

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from pg 240
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Managing
Effectively
Time Management

Levels Priorities
Functions
Skills
Methods
Delegate Intervals

Portion of Graphic
from pg 240
will go here Goals Interruptions

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