Class notes 1.1 Business Basics: Section 2- Benefits of Organization
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Course
Introduction to Business (BUS101)
Institution
Divine Word College Of San Jose
This lecture note contains the information about BUS101: Introduction to Business. It is under Unit 1: Context to Business, 1.1 Business Basics: What is Business?
Under this is Section 2: Benefits of Organization
BUS101: Introduction to Business
Study guide and Definitions
Unit 1: The Context of Business
1.1 Business Basics
Section 2: Benefits of Organization
Organization helps businesses achieve focus and success in reaching their goals.
Learning Objectives
● Explain the role of specialization, delegation, efficiency and departmentalization in
effective organization.
● Recognize the benefits of effective organization
Key Points
● Organization is the composition of individuals and groups directed towards
coordinated goals.
● Division of labor is the assigning of responsibility for each organizational component
to specific workers or group of workers.
● Specialization is division of labor with the added stipulation that the responsibility for
a specific task lies with a designated expert in that field.
● Good organization structure is essential for expanding business activity.
Organization structure determines the input resources needed for the expansion of
a business activity.
Terms
● Efficiency
-The extent to which time is well used for the intended task.
● Resource
- Something that one uses to achieve an objective. An example of a resource
could be a raw material or an employee.
Example
● Functional authority is where managers have formal power over a specific subset of
activities. For instance, the Production Manager may have the line authority to
decide whether and when a new machine is needed but the Controller demands
that a Capital Expenditure Proposal is submitted first, showing that the investment
will have a yield of at least x%; or, a legal department may have functional authority
to interfere in any activity that could have legal consequences. This authority would
not be functional but it would rather be staff authority if such interference is "advice"
rather than "order".
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