LESSON 4: Organizing

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Nature of Organizations, Organization Theories & Applica

30 Terms
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Differentiation in Organizations
Involves division of labor and specialization
Division of Labor
Assigning different tasks to different people in the organization
Collaboration and coordination of different work units/division
Procedures that connect the work activities of the different units/divisions of the firm
Structural Mechanisms
Mechanisms that may be devised to increase collaboration and coordination
Organization Structure
System made up of tasks to be accomplished, work moements from one work level to other work levels, reporting relationships, and communication passageways
Vertical, Horizontal, Network
Types of organization structures
Vertical Structure
Structure that clears out issues related to authority rights, responsibilities,a nd reporting relationships
Authority Rights
Legitimate rights of individuals appointed in positions to give orders to their subordinates
Horizontal Structure
Departmentalization of an organization into smaller work units
Horizontal Organization Chart
Selection of independent, usually single-function organizations that work together to produce a product/service
Line Departments
Departments that deal directly with the firm's primary goods and services; responsible for manufacturing, selling, and providing services to clients
Staff Departments
Departments that support the activities of the line departments by doing research, attending to legal matters, performing public relations duties, etc.
Functional Approach
Approach formed based on specialized activities
Divisional Approach
Approach formed based on management of their products, customers, or geographic areas covered
Matrix Approach
Hybrid form of departmentalization; managers and staff report to the functional and divisional manager
Network Structure
Collection of independent, usually single function organizations that work together to produce a product/service
Organizational Design
Way of a management achieves the right combination of differentiation and integration of the organization's operations, in response to the level of uncertainty in its external environment
Traditional, Modern
Organizational design theories
Traditional Theories
Usual, old fashioned ways
Simple, Functional, Divisional
Traditional theories
Simple Organizational Design
Few departments, wide spans of control, big number of subordinates directly reporting to a manager, centralized authority figure, used by companies that start out as entrepreneurial ventures
Functional Organizational Design
Groups together similar/related specialties, utilized and put into practice in an entire organization
Divisional Organizational Design
Separate business divisions/units, parent corporation acts as overseer to coordinate and control different divisions and provide financial and legal support services
Moderm Theories
Contemporary/new design theories
Team, Matrix Project, Boundary-less
Modern theories
Team Design
Organization is made up of work groups/teams
Matrix Project Design
Specialists from different departments work on projects that are supervised by a project manager
Boundary-less Design
Not defined/limited by vertical, horizontal and external boundaries; no hierarchal levels, departmentalization
Virtual Organization Designs
Small groups of full-time employees and outside specialists are temporarily hired to work