This chapter discusses the organizational challenges faced by entrepreneurs in business today. The principles of organization management apply to businesses of all sizes. Structuring the business, making an appropriate division of labor using job specialization and departmentalization, establishing procedures, and assigning authority are tasks found in most firms.
We were introduced to the principles of organization of two influential organization theorists who emerged during the era of mass production: Henri Fayol and Max Weber. Henri Fayol introduced several management principles still followed today, including the idea that each worker should report to only one manager and that managers, in turn, should have the right to give orders for others to follow and the power to enforce them. Max Weber promoted an organizational structure composed of middle managers who implement the orders of top managers. H believed less-educated workers were best managed if managers or supervisors gave them strict rules and regulations to follow and monitored their performance.
Many companies are still organized using the organizational designs suggested by Fayol and Weber, with everything set up in a hierarchy. Still, decisions must be made when structuring an organization regarding several issues: (1) centralization versus decentralization, (2) span of control, (3) tall versus flat organization structures, and (4) departmentalization. Figure 8.5 on page 221 depicts several ways to departmentalize, including: by produce, function, customer group, geographic location, and/or by process.
Once the decisions have been made regarding the organizational design, it is time to decide which of four common organizational models to use: (1) line organizations, (2) line-and-staff organizations, (3) matrix-style organizations, and (4) cross-functional self-managed teams.
To help Dr. Rea Searge design a Line-and-Staff Organization Chart to organize the employees of Peabody Researchers, Inc., a large organization.
Assignment Specifics and Instructions:
Dr. Rea Searge is president of Peabody Researchers, Inc., a pharmaceutical company. Peabody uses a line-and-staff structure like the one shown below in Figure 8.6, page 224 to organize its employees. Take notice of the dotted lines leading to the “staff” positions.
In addition to Dr. Searge, Peabody has the following employees:
A quality control officer
A vice president of marketing
A vice president of production
A director of personnel
150 research and development employees
A vice president of research and development
A sales force of 100 people
Production managers for three product lines
A vice president of finance
An administrative assistant to the president
Marketing managers for three regions
A production force of 600 people
Using an organization chart template from Microsoft, or a SmartArt Graphic program, create an organization chart for Peabody Researchers, Inc. Use solid lines for line authorityâ€“responsibility relationships and dotted lines for staff authorityâ€“responsibility relationships.
Follow one of the links below to view a tutorial on YouTube to learn how you can use your Microsoft Word and/or PowerPoint software to create the organization chart.
Save the file using the following format: Lastname_Firstname_Ch8-Organization Chart(For example: Carcioppolo_Joann_Ch8-Organization Chart).
Microsoft Word:http://www.youtube.com/watch?v=mDZrBxzfmOg (Links to an external site.)Microsoft PowerPoint:http://www.youtube.com/watch?v=xZm_clRV3VU (Links to an external site.)
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