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Lecture Introduction to business - Lecture 14: Organizing the business enterprise

The following will be discussed in this chapter: What is organizational structure? the building blocks of organizational structure, establishing the decision-making hierarchy, basic forms of organizational structure, informal organization. | Lecture 14 Chapter 7 Organizing The Business Enterprise Chapter Outline What is Organizational Structure? The Building Blocks of Organizational Structure Establishing The Decision-Making Hierarchy Basic Forms of Organizational Structure Informal Organization Hierarchy For Decisions After specialization and departmentalization - Next step establish decision making hierarchy Define reporting relationships Who is responsible for decisions and operations Hierarchy For Decisions Question who makes which decision The answer does not focus on individuals The right answer is decision making hierarchy Decision making hierarchy results from a three step process Hierarchy For Decisions Assign Tasks Who makes decisions and specifying how they should be made Who is supposed to do what is a complex question Need to work out agreements about authority and responsibility Responsibility Duty to perform an assigned task Authority Power to make the decision necessary to complete the task Hierarchy For Decisions Problem: level of responsibility and authority are not clearly delineated in the relationship Perform Tasks Implementing decision that have been made Here the issue arises of delegation and accountability Delegation is when a manager assigns a task to the employee Accountability, falls to the subordinate who must complete the task Small Business Delegation Fear Employee Can’t Do As Well Something Will Go Wrong No Long-Range Plan because you do everyday fire fighting Not Up-To-Date On Industry Trends & Competitive Products Solution: do not run show independently Big Business Delegation Fear Subordinate Doesn’t Know Job Subordinate “Show Manager Up” Desire To Retain Control Inability To Effectively Delegate Solution: Cannot do everything themselves Train subordinates if they cant perform Subordinate performs well it will reflect favorably Hierarchy For Decisions Make decisions about general pattern of authority Distribute Authority Determining whether the organization is to be | Lecture 14 Chapter 7 Organizing The Business Enterprise Chapter Outline What is Organizational Structure? The Building Blocks of Organizational Structure Establishing The Decision-Making Hierarchy Basic Forms of Organizational Structure Informal Organization Hierarchy For Decisions After specialization and departmentalization - Next step establish decision making hierarchy Define reporting relationships Who is responsible for decisions and operations Hierarchy For Decisions Question who makes which decision The answer does not focus on individuals The right answer is decision making hierarchy Decision making hierarchy results from a three step process Hierarchy For Decisions Assign Tasks Who makes decisions and specifying how they should be made Who is supposed to do what is a complex question Need to work out agreements about authority and responsibility Responsibility Duty to perform an assigned task Authority Power to make the decision necessary to complete the task Hierarchy For