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Topic 4 ORGANIZING THE BUSINESS ENTERPRISE
Topic 4 ORGANIZING THE BUSINESS ENTERPRISE
Topic 4 ORGANIZING THE BUSINESS ENTERPRISE
ASM401/Chapter 4
ORGANIZATIONAL STRUCTURE
2
Organizational Structure:
• Specification of the jobs to be done within an organization and
the ways in which they relate to one another.
ASM401/Chapter 4
ORGANIZATIONAL STRUCTURE
Organization Charts
3
ASM401/Chapter 4
ORGANIZATIONAL STRUCTURE
Chain of Command
ASM401/Chapter 4 4
ORGANIZATIONAL STRUCTURE
Determinants of Organization
5
ASM401/Chapter 4
BUILDING BLOCKS OF ORGANIZATIONAL
STRUCTURE
6
ASM401/Chapter 4
BUILDING BLOCKS OF ORG. STRUCTURE
Specialization
7
ASM401/Chapter 4
BUILDING BLOCKS OF ORG. STRUCTURE
Specialization
8
ASM401/Chapter 4
BUILDING BLOCKS OF ORG. STRUCTURE
Departmentalization
9
ASM401/Chapter 4
BUILDING BLOCKS OF ORG. STRUCTURE
Departmentalization
10
Customer Departmentalization :
• Types of customer likely to buy a given product-each department
target a specific customer category. – make shopping easier by
identifiable store segment.
Product Departmentalization:
• Departmentalization according to specific products being
created.
Process Departmentalization:
• Departmentalization according to production processes used to
create a good or service.
Geographic Departmentalization:
• Departmentalization according to area served by a business.
Functional Departmentalization:
• Departmentalization according to groups’ functions or activities –
marketing, sales etc.
ASM401/Chapter 4
DECISION MAKING HIERARCHY
11
ASM401/Chapter 4
DECISION MAKING HIERARCHY
Assigning Tasks
12
ASM401/Chapter 4
DECISION MAKING HIERARCHY
Performing Tasks
13
ASM401/Chapter 4
DECISION MAKING HIERARCHY
Performing Tasks
14
ASM401/Chapter 4
DECISION MAKING HIERARCHY
Distributing Authority
16
Centralised Organisation
Most decision making authority is held by upper level
managers
Upper level management must approve most of lower level
decision before they can be implemented.
Centralised authority is also typical of small businesses.
ASM401/Chapter 4
DECISION MAKING HIERARCHY
Distributing Authority
17
Decentralised Organisation
Much decision making authority is delegated to
levels of management at various points below the
top.
Purpose of decentralisation is to make company
more responsible to its environment by breaking it
into more manageable units.
Reducing top-heavy bureaucracies is also a
common goals.
ASM401/Chapter 4
Centralization vs Decentralization
18
ASM401/Chapter 4
DECISION MAKING HIERARCHY
Distributing Authority
19
ASM401/Chapter 4
FORMS OF AUTHORITY
1- Line Authority
20
ASM401/Chapter 4
FORM OF AUTHORITY
2 - Staff Authority
21
ASM401/Chapter 4
Line and Staff Organization
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ASM401/Chapter 4
FORM OF AUTHORITY
3 - Committee & Team Authority
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ASM401/Chapter 4
Committee and Team Authority
24
ASM401/Chapter 4
25
End of Topic 4
Thank you
ASM401/Chapter 4