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Summary of Chapter 7
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Summary of Chapter 7
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CHAPTER 7WHAT IS AN ORGANISATION?
A group of two or more people working together to achieve a common set of
goals
DEVELOPING ORGANIZATION CHARTS
Organization chart: A diagram that represents the positions and
relationships within an organization
Chain of command: The line of authority that extends from the highest to
the lowest levels of the organization
Staff (advisory) positions: Jobs that are not part of the direct chain of
command in the organization
A TYPICAL CORPORATE ORGANIZATION CHART
THE ORGANISATION CHART OF APPLE
, Job design
MAJOR CONSIDERATIONS FOR ORGANISING A structuring the tasks
BUSINESS and activities required
to accomplish a firm's
JOB DESIGN: objectives into
Structuring the tasks and activities required to accomplish a firm's specific jobs so as to
objectives into specific jobs so as to foster productivity and employee foster productivity
satisfaction and employee
satisfaction.
DEPARTMENTALISATION:
Function/product/location/customer Delegation
After jobs are designed, they must be grouped together into assigning part of a
"working units," or departments. This process is called manager's work and
departmentalization, which is the process of grouping jobs into power to other
manageable units, Today, the most common bases for organizing a workers
business into effective departments are by function, by product, by
location, and by customer. Responsibility
By Function: Departmentalization by function groups jobs that the duty to do a job or
relate to the same organizational activity. Under this scheme, perform a task
all marketing personnel are grouped together in the
marketing department, all production personnel in the Authority
production department, and so on. Most smaller and newer
the power, within an
organizations departmentalize by function. Supervision is
simplified because everyone is involved in the same activities organization, to
and coordination is easy. The disadvantages of this method of accomplish an
grouping jobs are that it can lead to slow decision making and assigned job or task
it tends emphasize the department over the organization as
whale. Accountability
By Product: Departmentalization by product groups activities the obligation of a
related to a particular good or service. This approach is used worker to accomplish
often by older and larger firms that produce and sell variety of an assigned job or
products. Each department handles its own marketing, task
production, financial management, and human resources
activities. Departmentalization by product makes decision making easier
and provides for the integration of activities associated with catch
product. However, causes some duplication of specialized activities- such
as finance-between departments. Moreover, the emphasis is placed on
the product rather than on the whole organization.
By Location: Departmentalization by location groups activities according
to the defined geographic area in which they are performed.
Departmental areas may range from whole countries (for international
firms) to regions within countries (for national firms) to areas of several
city blocks (for police departments organized into precincts). For example,
Ford has divisions for the Americas, Europe, Asia Pacific and Africa, and
China. Departmentalization by location allows the organization to respond
readily to the unique demands or requirements of different locations.
Nevertheless, a large administrative staff and an elaborate control system
may be needed to coordinate operations across many locations.
By Customer: Departmentalization by customer groups activities
according to the needs of various customer populations. The advantage of
this approach is that it allows the firm to deal efficiently with unique
customers or customer groups. For example, an aircraft maker might
have a department for government customers and one for corporate
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