MBA 705 Minsun Kim Exam 4 UPDATED ACTUAL Questions And Correct Answers
C
Terms in this set (64)
Organizational Structure refers to the formal means by which work is coordinated in an organization. The
structure exists to provide control and coordination for the organization
Simple structure a form of organization in which in a new business, each employee often performs
multiple tasks and the owner/manager is involved in all aspects of the business
Vertical Growth refers to an increase in the length of the organization's hierarchy (i.e. levels of
management)
Span of Control the number of employees reporting to each manager
Tall organization compromised of many hierarchical levels and narrow spans of control-- a tall
organization tends to be best suited for a stable environment
Advantage: more effective communication and less difficulty in planning
Flat Organization has few levels in its hierarchy and a wide span of control from top to bottom
Advantage: lower administrative costs and increased authority for managers
Centralization most strategic and operating decisions are made by managers at the top of the
organization structure
Decentralization most strategic and operating decisions are made by managers at lower levels of
the organization
Horizontal Growth an increase in the breadth of an organization's structure
Downsizing occurs when one or more hierarchical levels- typically middle managers - is
eliminated
Four Options for Structural Forms 1. Functional Structure
2. Product Divisional Structure
3. Geographic Divisional Structure
4. Matrix structure
(product and geographic divisional structures are also called multidivisional or M-
form structures)
, Functional Structure - each subunit of the organization engages in firm-wide activities related to a
particular function, such as marketing, HR, finance, or production
-common to new organizations
-emphasizes specialization (Groups specialists)
-fosters development of economies of scale
-addresses quality concerns well
-the most centralized structure
Product Divisional Structure -divides the organization's activities into self-contained entities, each responsible
for producing, distributing, and selling its own products
-focus on products, the "real source" or success for the firm
-pinpointing the responsibility for profits or losses is also easier because each
product division becomes a profit center - a well-defined organizational unit
headed by a manager accountable for its revenues and expenditures
- i.e. Samsung has a TV division, smart phone division, home appliance division
Geographic Divisional Structure -activities and personnel are grouped by specific geographic locations
-useful when two or more divisions can be dissected easily along geographical
lines
-attractive when there are substantial differences in various geographical regions
-i.e. Board of Directors, with Northern, Eastern and Southern Divisions
Matrix Structure - a combination of the functional and product divisional structures
-members have "two (or more) bosses", one for the functional area and one more
for the project area(s)
-attractive when the organization faces a high degree of technological change,
but it can be confusing and complex
-the most flexible structure
Assessing Organizational Structure -functional, product divisional, geographic divisional, and matrix structures are
pure forms. In reality, they are often combined to create an approach uniquely
tailored to the strategic needs of the firm
Considerations When selecting a Structure 1. Level of corporate involvement in business unit operations
2. Compatibility of the structure with the corporate profile and the corporate
strategy
3. Number of hierarchical levels in the organization
4. The extent to which the structure permits the appropriate grouping of activities
5. The extend to which the structure promotes effective coordination
6. The extent to which the structure allows for appropriate centralization or
decentralization of authority
Corporate Involvement in Business Unit Operations - top management philosophy is a key determinant of an organization's structure,
especially in large firms with multiple business units
-the extent to which corporate managers are involved in business-level
operations varies from one firm to another
-involvement is sometimes seen as a stabilizing force and is welcomed by top
executives in business units. However, some business unit managers refer to
"corporate" in a less than positive light and may view such involvement as
interference or stifling to progress
C
Terms in this set (64)
Organizational Structure refers to the formal means by which work is coordinated in an organization. The
structure exists to provide control and coordination for the organization
Simple structure a form of organization in which in a new business, each employee often performs
multiple tasks and the owner/manager is involved in all aspects of the business
Vertical Growth refers to an increase in the length of the organization's hierarchy (i.e. levels of
management)
Span of Control the number of employees reporting to each manager
Tall organization compromised of many hierarchical levels and narrow spans of control-- a tall
organization tends to be best suited for a stable environment
Advantage: more effective communication and less difficulty in planning
Flat Organization has few levels in its hierarchy and a wide span of control from top to bottom
Advantage: lower administrative costs and increased authority for managers
Centralization most strategic and operating decisions are made by managers at the top of the
organization structure
Decentralization most strategic and operating decisions are made by managers at lower levels of
the organization
Horizontal Growth an increase in the breadth of an organization's structure
Downsizing occurs when one or more hierarchical levels- typically middle managers - is
eliminated
Four Options for Structural Forms 1. Functional Structure
2. Product Divisional Structure
3. Geographic Divisional Structure
4. Matrix structure
(product and geographic divisional structures are also called multidivisional or M-
form structures)
, Functional Structure - each subunit of the organization engages in firm-wide activities related to a
particular function, such as marketing, HR, finance, or production
-common to new organizations
-emphasizes specialization (Groups specialists)
-fosters development of economies of scale
-addresses quality concerns well
-the most centralized structure
Product Divisional Structure -divides the organization's activities into self-contained entities, each responsible
for producing, distributing, and selling its own products
-focus on products, the "real source" or success for the firm
-pinpointing the responsibility for profits or losses is also easier because each
product division becomes a profit center - a well-defined organizational unit
headed by a manager accountable for its revenues and expenditures
- i.e. Samsung has a TV division, smart phone division, home appliance division
Geographic Divisional Structure -activities and personnel are grouped by specific geographic locations
-useful when two or more divisions can be dissected easily along geographical
lines
-attractive when there are substantial differences in various geographical regions
-i.e. Board of Directors, with Northern, Eastern and Southern Divisions
Matrix Structure - a combination of the functional and product divisional structures
-members have "two (or more) bosses", one for the functional area and one more
for the project area(s)
-attractive when the organization faces a high degree of technological change,
but it can be confusing and complex
-the most flexible structure
Assessing Organizational Structure -functional, product divisional, geographic divisional, and matrix structures are
pure forms. In reality, they are often combined to create an approach uniquely
tailored to the strategic needs of the firm
Considerations When selecting a Structure 1. Level of corporate involvement in business unit operations
2. Compatibility of the structure with the corporate profile and the corporate
strategy
3. Number of hierarchical levels in the organization
4. The extent to which the structure permits the appropriate grouping of activities
5. The extend to which the structure promotes effective coordination
6. The extent to which the structure allows for appropriate centralization or
decentralization of authority
Corporate Involvement in Business Unit Operations - top management philosophy is a key determinant of an organization's structure,
especially in large firms with multiple business units
-the extent to which corporate managers are involved in business-level
operations varies from one firm to another
-involvement is sometimes seen as a stabilizing force and is welcomed by top
executives in business units. However, some business unit managers refer to
"corporate" in a less than positive light and may view such involvement as
interference or stifling to progress
