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Ch.8 Terms
Structuring Organizations for Today's Challenges
26
Business
Professional
02/24/2014

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Term
economies of scale
Definition
The situation in which companies can reduce their production costs if they can purchase raw materials in bulk; the average cost of goods goes down as production levels increase.
Term
hierarchy
Definition
A system in which one person is at the top of the organizations and there is a ranked or sequential ordering from the top down of managers who are responsible to that person.
Term
chain of command
Definition
The line of authority that moves from the top of a hierarchy to the lowest level.
Term
bureaucracy
Definition
An organization with many layers who set rules and regulations and oversee all decisions.
Term
centralized authority
Definition
An organization structure in which decision-making authority is maintained at the top level of management.
Term
decentralized authority
Definition
An organization structure in which decision-making authority is delegated to lower-level managers more familiar with local conditions than headquarters management could be.
Term
span of control
Definition
The optimal number of subordinates a manager supervises or should supervise.
Term
tall organization structure
Definition
An organizational structure in which the pyramidal organization chart would be quite tall because of the various levels of management.
Term
flat organization structure
Definition
An organization structure that has few layers of management and a broad span of control.
Term
departmentalization
Definition
The dividing of organizational functions into separate units.
Term
line organization
Definition
An organization that has direct two-way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with all people reporting only to one supervisor.
Term
line personnel
Definition
Employees who are part of the chain of command that is responsible for achieving organizational goals.
Term
staff personnel
Definition
Employees who advise and assist line personnel in meeting their goals.
Term
matrix organization
Definition
An organization in which specialists from different parts of the organization are brought together to work on specific projects but still remain part of a line-and-staff structure.
Term
cross-functional self-managed teams
Definition
Groups of employees from different departments who work together on a long-term basis.
Term
networking
Definition
Using communications technology and other means to link organizations and allow them to work together on common objectives.
Term
real time
Definition
The present moment or the actual time in which something takes place.
Term
virtual corporation
Definition
A temporary networked organization made up of replaceable firms that join and leave as needed.
Term
benchmarking
Definition
Comparing an organization's practices, processes, and products against the world's best.
Term
core competencies
Definition
Those functions that the organization can do as well as or better than any other organization in the world.
Term
digital natives
Definition
Young people who have grown up using the internet and social networking.
Term
restructuring
Definition
Redesigning an organization so that it can more effectively and efficiently serve its customers.
Term
inverted organization
Definition
An organization that has contact people at the top and the chief executive officer at the bottom of the organization chart.
Term
organization (or corporate) structure
Definition
Widely shared values within an organization that provide unity and cooperation to achieve common goals.
Term
formal organization
Definition
The structure that details lines of responsibility, authority, and position; that is, the structure shown on organization charts.
Term
informal organization
Definition
The system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority outside the formal organization.
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