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The first step in starting a new business is organizing for success.
The first step in starting a new business is organizing for success.
True
Departmentalization can help a successful business coordinate various tasks among different teams.
Departmentalization can help a successful business coordinate various tasks among different teams.
True
A tall organizational structure typically has several layers of management.
A tall organizational structure typically has several layers of management.
True
Centralization refers to the distribution of decision-making powers among various levels within an organization.
Centralization refers to the distribution of decision-making powers among various levels within an organization.
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Functional departmentalization focuses on specific functions, like accounting and human resources.
Functional departmentalization focuses on specific functions, like accounting and human resources.
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The division of labor is about performing all job roles by a single individual to ensure consistency.
The division of labor is about performing all job roles by a single individual to ensure consistency.
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A flat organizational structure reduces the number of management levels, promoting quick decision-making.
A flat organizational structure reduces the number of management levels, promoting quick decision-making.
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Decentralization allows decision-making to be concentrated at the highest levels of an organization.
Decentralization allows decision-making to be concentrated at the highest levels of an organization.
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The Toyota Way is an example of a decentralized structure that encourages employee engagement.
The Toyota Way is an example of a decentralized structure that encourages employee engagement.
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A narrow span of control typically allows for more managers to supervise a larger number of employees.
A narrow span of control typically allows for more managers to supervise a larger number of employees.
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In a tall organization structure, there are many levels of management.
In a tall organization structure, there are many levels of management.
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Google has a narrow span of control to promote a fast-paced work environment.
Google has a narrow span of control to promote a fast-paced work environment.
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The trend in modern organizations is to reduce the span of control as they adopt empowerment.
The trend in modern organizations is to reduce the span of control as they adopt empowerment.
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Work becomes more standardized at higher levels of an organization, allowing for a wider span of control.
Work becomes more standardized at higher levels of an organization, allowing for a wider span of control.
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Pharmaceutical companies typically have a wider span of control than technology companies.
Pharmaceutical companies typically have a wider span of control than technology companies.
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Broad span of control allows many people to report to each manager.
Broad span of control allows many people to report to each manager.
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Flat companies often have numerous job titles and seniority.
Flat companies often have numerous job titles and seniority.
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Departmentalization can improve efficiency by grouping workers according to their skills.
Departmentalization can improve efficiency by grouping workers according to their skills.
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Narrower spans of control are always beneficial for larger organizations.
Narrower spans of control are always beneficial for larger organizations.
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An advantage of departmentalization is effective communication between all departments.
An advantage of departmentalization is effective communication between all departments.
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Employees in a flat organization often have defined managerial responsibilities.
Employees in a flat organization often have defined managerial responsibilities.
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A tall organizational structure has more layers of management.
A tall organizational structure has more layers of management.
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Specialization can lead employees to become less responsive to external changes.
Specialization can lead employees to become less responsive to external changes.
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In 2015, Google restructured into a conglomerate called Alphabet.
In 2015, Google restructured into a conglomerate called Alphabet.
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The key to success in business is to remain rigid and avoid change.
The key to success in business is to remain rigid and avoid change.
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Bureaucracy refers to the system of rules and regulations established to please customers.
Bureaucracy refers to the system of rules and regulations established to please customers.
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Economies of scale allow companies to reduce production costs by purchasing raw materials in bulk.
Economies of scale allow companies to reduce production costs by purchasing raw materials in bulk.
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Fayol's Principle of Organization includes a focus on individual interests over general interests.
Fayol's Principle of Organization includes a focus on individual interests over general interests.
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Mass production methods were introduced in the 1900s, complicating business organization.
Mass production methods were introduced in the 1900s, complicating business organization.
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Organizations in the past were designed primarily to facilitate management rather than to satisfy customers.
Organizations in the past were designed primarily to facilitate management rather than to satisfy customers.
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The average cost of goods increases as production levels rise.
The average cost of goods increases as production levels rise.
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Larry Page is the CEO of Google.
Larry Page is the CEO of Google.
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British Airways was formed in 1974 from four smaller companies.
British Airways was formed in 1974 from four smaller companies.
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The restructuring of British Airways increased its workforce.
The restructuring of British Airways increased its workforce.
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Sergei Brin serves as the chairman of Alphabet.
Sergei Brin serves as the chairman of Alphabet.
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The restructuring of Alphabet aimed to allow companies to operate independently.
The restructuring of Alphabet aimed to allow companies to operate independently.
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Sir John King was responsible for increasing the size of British Airways' fleet.
Sir John King was responsible for increasing the size of British Airways' fleet.
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Larry Page believes being uncomfortable is necessary for relevance in the technology industry.
Larry Page believes being uncomfortable is necessary for relevance in the technology industry.
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The oil crises of the 1990s had a positive impact on British Airways' customer base.
The oil crises of the 1990s had a positive impact on British Airways' customer base.
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A successful business might require hiring an accountant, advertising personnel, and a maintenance crew.
A successful business might require hiring an accountant, advertising personnel, and a maintenance crew.
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An organization chart displays the financial records of a restaurant.
An organization chart displays the financial records of a restaurant.
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Allocating resources involves investing in employee training and kitchen maintenance.
Allocating resources involves investing in employee training and kitchen maintenance.
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Standard operating procedures (SOPs) are not important for maintaining consistency in food preparation.
Standard operating procedures (SOPs) are not important for maintaining consistency in food preparation.
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The head chef is primarily responsible for managing customer service.
The head chef is primarily responsible for managing customer service.
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Monitoring the environment helps restaurants stay updated on customer preferences and regulatory changes.
Monitoring the environment helps restaurants stay updated on customer preferences and regulatory changes.
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Specific tasks are assigned to employees based solely on their tenure at the restaurant.
Specific tasks are assigned to employees based solely on their tenure at the restaurant.
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Departments in a successful restaurant might include production, marketing, and maintenance.
Departments in a successful restaurant might include production, marketing, and maintenance.
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Study Notes
Chapter 8: Structuring Organizations for Today's Challenges
- This chapter covers structuring organizations to meet modern challenges.
- Topics include building organizations, adapting to change, and organizational design choices.
- The content focuses on structuring organizations for success, including aspects like the division of labor, job specialization, and departmentalization.
Chapter Content
- Organizing for Success: Building an organization from the bottom-up. This includes deciding what tasks need to be done (e.g., cooking, serving, cleaning, purchasing) and then dividing those tasks among employees (division of labor).
- The Changing Organization: Discusses the evolution of organizational design and how existing principles apply in a changing environment. Organizations need to adapt to changing customer expectations, global competition, economic downturns, technological advancements, and the need to preserve the natural environment.
-
Decisions to Make in Structuring Organizations: Topics include:
- Centralization vs. decentralization of authority.
- Span of control (optimum number of subordinates a supervisor can manage). A wider span of control is possible when work is standardized.
- Tall vs. flat organizational structures (number of management layers). Tall structure has many layers and narrow span of control; flat has few layers and wide span of control.
- Departmentalization (grouping workers based on skills or functions). There are various departmentalization models (e.g., functional, product, customer, geographic).
-
Adapting to Change:
- Restructuring for empowerment (redesigned organizations focus on serving customers). Inverted structure: contact people are at the top, CEO is at bottom; the management layers are few, managers help frontline. This involves giving more power to lower level employees.
- Creating a change-oriented organizational culture (fostering a culture where change is expected and workers are well-trained). This means frontline/support workers need more education, training, and better compensation compared with past practices.
Additional Points
- Organizational Chart: A visual representation of reporting relationships and hierarchy within an organization. They show who reports to whom.
- Allocating Resources: The process of allocating funds and resources (e.g., purchasing ingredients, maintaining equipment, etc.) for the organization's operations and to deliver high quality goods and service.
- Assigning Specific Tasks: Assigning tasks to employees based on roles and expertise. Examples include the head chef creating the menu and line cooks preparing dishes.
- Establishing Procedures: The creation of standard operating procedures (SOPs) to maintain consistency, including food preparation, quality control, and customer service protocols. This is key to performance improvement and reduces errors.
- Monitoring the Environment: Keeping track of industry trends, customer preferences, and regulatory changes. This allows organizations to adapt their strategies and operations, increasing competitiveness, meeting customer expectations, and maintaining success.
- Microsoft 365 Business Premium: Microsoft's suite of business applications including Exchange, Teams, OneDrive, SharePoint, Outlook, Word, Excel, PowerPoint, Publisher, Access, Azure Information Protection, Defender, etc.
- Organizational Culture: Shared values within a company that foster unity, cooperation, and the pursuit of shared goals. These may include common stories, traditions, and myths.
- Examples: Several real-world companies like Google, Apple, Toyota, British Airways, and the Ritz-Carlton, are discussed to illustrate concepts discussed in the chapter. These examples show how different organizations are adapting to organizational changes.
- Thinking Activity: Questions for critical thinking about what actions need to be taken if a company begins losing business to competitors.
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Description
Test your knowledge on the principles of business organization and management structures. This quiz covers topics such as departmentalization, organizational structures, and decision-making processes. See how well you understand different frameworks that facilitate effective business operations.
