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Instructor’s Manual - Chapter 8 Understanding Business 12e
Chapter 8: Structuring Organizations for Today’s Challenges
INTRODUCTION
This Instructor’s Manual has been revised to include all teaching resources offered for your course. It is organized for ease of use, so you can
follow along in the classroom and use relevant materials as they are needed.
CONTENTS
Icebreaker Activity
Brief Chapter Outline, Learning Objectives, and Classroom Activities
Lecture Enhancers
Critical Thinking Exercises
Bonus Cases
Connect Instructor’s Manual
ADDITIONAL RESOURCE
For more lecture-enhancing examples and videos, visit our blog at www.introbiz.tv.
WHAT’S NEW IN THIS EDITION

Additions:
• Getting to Know Denise Morrison, CEO of Campbell Soup Company
• Name that Company
• Adapting to Change: Going Bossless
• Connecting Through Social Media: Breaking the Connection
• Career Exploration
• Putting Principles to Work
1 Instructor’s Manual – Chapter 8 | Nickels/McHugh/McHugh Understanding Business 12e | © 2019 by McGraw Hill Education
• Video Case: Freshii’s Winning Organization
Revisions:
Statistical data and examples throughout the chapter were updated to reflect current information. In addition:
• Section “Everyone’s Reorganizing” was retitled “Organizing for Success” and the introduction was shortened.
• Figure 8.4 was corrected (in the process of redesign the cells in the figure had been mislabeled).
Deletions:
• 11e Name That Company
• Boxes Spotlight on Small Business and Adapting to Change
• Taking it to the Net
• Video Case
ICEBREAKER ACTIVITY
Chapter 7 Organization, Teamwork, and Communication (also used in ch 7)

Exercise: “Telephone”
Learning Objectives: 8-3 Evaluate the choices managers make in structuring organizations.
Instructor Prep Time: 2 minutes

Supplies: N/A
Class Type: Face-to-Face, Hybrid, and Online
Ideal Class Size: N/A
Set-up Time:
Face-to-Face In-class/hybrid 5 minutes to explain activity and duplicate the student
Hybrid instruction sheet.
Online 5–
Student Work Time: N/A
Wrap-up Time:
Face-to-Face 30 minutes to discuss “take-aways”
Hybrid
Online Online chat room – 1 to 2 days to post
Evaluation Suggestions: N/A
Set-up:
• Lock the classroom door. Project the “college communication” slide on the white board.
• Invite all but 10 students into the classroom. Tell the 10 students that you will get back to them.
• Hand out the student instruction sheet to the students in the classroom.
• Invite 1 student into the room and tell the rest that they will be coming in one at a time.
• Tell the student he has 90 seconds to memorize the scenario on the screen because it will be turned off. He is to invite a student into the
class room and repeat the information on the screen. Before he tells the scenario, he needs to let the student know that there will be no
opportunity to ask questions and he/she will invite the next student in and repeat all the information. When finished, take a seat.
• The process continues until the 10th student has retold the scenario.
• Put the original scenario back up on the white board.
Student Instructions:
1. Your role is that of an “observer”. A student is going to repeat this paragraph to the next student. The students are not permitted to
ask questions and are to invite the next student into the classroom and repeat what they are told. Pay special attention to what each
student repeats and how the story diverges from the original. Make notes on this sheet so you can participate in the discussion.
"A man was walking through campus wearing a striped T -shirt and carrying a backpack. He stopped a passerby, presumably to ask for
directions to the Student Affairs Office. The female pointed in the direction of a 6 story building and continued on. The man, seemingly
oblivious to 2 students standing in front of another building, continued walking down the side walk."
Wrap-up/”Take-aways” suggested topics:

In-person/hybrid classes:
The story should diverge very quickly from the original. Ask the student observers to share their observations specifically, when the story
changed, etc. Discuss how the activity was “information giving” not true communication.
• Communication is not what you say, it’s what they hear, and what they think you mean
• Communication is not intent it is perception.
• Communication is not information giving!!!
• Information giving: a one-way process to present facts, instructions, etc.
• Communication: a two-way exchange in which the receiver understands the message in the same way as the sender intended.
Online: Instructor’s comments posted on the discussion page or a short “wrap-up” video (mini-lecture) of less than 20 minutes posted to the
course platform.
BRIEF CHAPTER OUTLINE, LEARNING OBJECTIVES AND CLASSROOM ACTIVITIES
Chapter Opener Summary PowerPoint Slides

Getting to Know DENISE MORRISON Denise Morrison, CEO of the Campbell Soup PPt 6
Company, prepared for her role all her life. As
a young child, her father encouraged her to
get a head start on her career. She then went
on to a successful college career and quickly
moved up the corporate ladder before
landing her position in 2011.
Name That Company When this company eliminated all managers, PPt 7
it offered severance packages to all
employees who didn’t think self-
management was a good fit for them. Name
that company.
(Students should read the chapter before
guessing the company’s name: Disney)
LO 8-1 Outline the basic principles of organizational Key Terms:

management. N/A
Lecture Notes Classroom Activities PowerPoint Slides
I. ORGANIZING FOR SUCCESS Connect Application Exercises

PPt 8
A. MANY COMPANIES ARE REORGANIZING. Entrepreneurship in the Dynamic Business
Environment—iContact Video Case
1. ADJUSTING TO CHANGING MARKETS is a normal
function in a capitalist economy.
2. The key to success is to REMAIN FLEXIBLE and to see p. 52 of this manual for summary and
adapt to the changing times. follow-up activity.
B. BUILDING AN ORGANIZATION FROM THE BOTTOM UP
1. ORGANIZING THE BUSINESS lecture enhancer 8-1
a. The text uses the example of starting a Smith’s Folly
mowing business.
A lesson in accountability from Kenneth
b. A first step is ORGANIZING (or Olsen, founder of Digital Equipment
STRUCTURING), deciding what work needs to Corporation (now part of Hewlett-Packard).
be done and then dividing up tasks (called (See the complete lecture enhancer on page
DIVISION OF LABOR). 31 of this manual.)
c. Dividing tasks into smaller jobs is called JOB
SPECIALIZATION.
bonus case 8-1
2. As the business grows, the entrepreneur will hire
Structural Collapse: Responsibility and
more workers and will need to organize them into
Accountability
teams or departments.
Because of engineering errors and poor
a. The process of setting up departments to do planning, the skywalks of a newly constructed
specialized tasks is called hotel collapsed, killing over 100 people. (See
DEPARTMENTALIZATION. the complete case, discussion questions, and
b. Finally, you need to ASSIGN AUTHORITY AND suggested answers beginning on page 46 of
RESPONSIBILITY to people so you can control this manual.)
the process.
3. STRUCTURING AN ORGANIZATION consists of: lecture enhancer 8-2 PPt 9
a. Devising a division of labor Zappos Goes Bossless
b. Setting up teams or departments to do In 2015, Zappos changed the corporate
specific tasks structure and eliminated the traditional
c. Assigning responsibility and authority to hierarchy. (See the complete lecture
people enhancer on page 32 of this manual.)
4. An ORGANIZATION CHART shows relationships—

who is accountable for tasks and who reports to
critical thinking exercise 8-1
Building an Organization Chart
whom.
This exercise gives a list of employees and
5. The entrepreneur must monitor the environment to
asks students to create an organization chart
see what competitors are doing and what
showing a possible chain of command. (See
customers are demanding. the complete exercise on page 41 of this
manual.)
LO 8-2 Compare the organizational theories of Key Terms:

Fayol and Weber. economies of scale
hierarchy
chain of command
organization chart
bureaucracy
Lecture Notes: Classroom Activities PowerPoint slides:
II. THE CHANGING ORGANIZATION PPt 10-12

A. Never before has business changed so quickly, including
major changes in the business environment.
1. Managing change has become a critical managerial
function.
2. In the past, organizations were designed to make
management easier rather than to please the
customer.
3. This reliance on rules is called BUREAUCRACY.
B. THE DEVELOPMENT OF ORGANIZATION DESIGN
PPt 13
1. Until the 20th century, organizations were small
and organized simply.
a. After the introduction of MASS

PRODUCTION, business organizations grew
complex and difficult to manage.
b. The bigger the plant, the more efficient
production became.
c. ECONOMIES OF SCALE describe 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.
2. The text discusses two major ORGANIZATION
THEORISTS and their publications.
a. HENRI FAYOL (Administration Industrielle et
Generale in France in 1919)
b. MAX WEBER (The Theory of Social and
Economic Organizations in Germany about
the same time)
PPt 14-15
3. FAYOL’S PRINCIPLES OF ORGANIZATION
a. Fayol introduced principles such as:
i. UNITY OF COMMAND: Each worker is
to report to only one boss.
ii. HIERARCHY OF AUTHORITY: One
should know to whom to report.
iii. DIVISION OF LABOR: Functions should
be divided into areas of specialization.
iv. SUBORDINATION OF INDIVIDUAL
INTERESTS TO THE GENERAL
INTERESTS: Goals of the organization
should be considered more important

than personal goals.
v. AUTHORITY: Managers should give
orders and expect them to be carried
out.
vi. DEGREE OF CENTRALIZATION: The
amount of decision-making power
vested in top management should vary
by circumstances.
vii. CLEAR COMMUNICATION CHANNELS
viii. ORDER: Materials and people should be
placed in the proper location.
ix. EQUITY: A manager should treat
employees and peers with respect and
justice.
x. ESPRIT DE CORPS: A spirit of pride and
loyalty should be created.
b. For years, these principles have been linked
to management.
c. This led to RIGID ORGANIZATIONS.
d. The text uses the example of consumer
dissatisfaction with government-run DMVs.
PPt 16-17
4. MAX WEBER AND ORGANIZATIONAL THEORY
a. Max Weber’s book The Theory of Social and
Economic Organizations appeared in the U.S.
in the 1940s.
b. Weber promoted the PYRAMID-SHAPED
ORGANIZATION STRUCTURE.
i. Weber put great trust in managers and

felt the less decision-making employees
had to do, the better.
ii. This approach makes sense when
dealing with uneducated and untrained
workers.
c. WEBER’S PRINCIPLES were similar to Fayol’s
with the addition of:
i. Job descriptions
ii. Written rules, decision guidelines, and
detailed records
iii. Consistent procedures, regulations, and
policies
iv. Staffing and promotions based on
qualifications
d. Weber believed large organizations need
clearly established rules and guidelines, or
BUREAUCRACY.
e. Weber’s emphasis on bureaucracy eventually
led to RIGID POLICIES AND PROCEDURES.
f. Some organizations today, such as UPS, still
thrive on rules and guidelines.
g. In other organizations, bureaucracy has not
been effective.
C. TURNING PRINCIPLES INTO ORGANIZATIONAL DESIGN PPt 18
1. Managers used the concepts of Fayol and Weber to
design organizations so that managers could
CONTROL WORKERS.
a. A HIERARCHY is a system in which one person

is at the top of the organization and there is a
ranked or sequential ordering from the top
down of managers who are responsible to
that person.
b. The CHAIN OF COMMAND is the line of
authority that moves from the top of a
hierarchy to the lowest level.
c. The ORGANIZATION CHART is a visual device
that shows relationships among people and
divides work.
d. Some organizations have a dozen LAYERS OF
MANAGEMENT between the chief executive
officer and the lowest-level employee.
2. BUREAUCRACY is an organization with many layers
PPt 20
of managers who set rules and regulations and
oversee all decisions.
3. In a bureaucracy, decision making may take too
long to satisfy customers.
4. To make customers happy, firms are reorganizing to
give employees more power to make decisions on
their own, known as EMPOWERMENT.
Figures:
FIGURE 8.1 PPt 19

TYPICAL ORGANIZATION CHART
This is a rather standard chart with managers
for major functions and supervisors reporting
to the managers. Each supervisor manages
three employees.
LO 8-3 Evaluate the choices managers make in Key Terms:

structuring organizations. centralized authority
decentralized authority
span of control
tall organizational structures
flat organizational structures
departmentalization
Lecture Notes Classroom Activities PowerPoint slides
III. DECISIONS TO MAKE IN STRUCTURING ORGANIZATIONS PPt 22

A. CHOOSING CENTRALIZED OR DECENTRALIZED
AUTHORITY
1. CENTRALIZED AUTHORITY is an organizing
structure in which decision-making authority is
maintained at the top level of management at the
company’s headquarters (text examples: Burger
King and McDonald’s).
2. However, today’s rapidly changing markets tend to
favor decentralization and delegation of authority.
3. DECENTRALIZED AUTHORITY is an organization
structure in which decision-making authority is
delegated to lower-level managers more familiar
with local conditions than headquarters
management could be (text example: Macy’s).
B. CHOOSING THE APPROPRIATE SPAN OF CONTROL PPt 24-25
1. SPAN OF CONTROL refers to the optimum number
of subordinates a manager supervises or should lecture enhancer 8-3
supervise.
Choosing the Right Span of Control
a. At lower levels, a WIDE SPAN OF CONTROL is Several factors affect the number of people a
possible. manager can effectively supervise. (See the
b. The appropriate span narrows at higher levels complete lecture enhancer on page 33 of this
of the organization. manual.)
2. The span of control VARIES WIDELY.
a. The trend now is to expand the span of
control as organizations get rid of middle
managers.
b. The span of control can be increased through
empowerment and the use of technology.
PPt 26
C. CHOOSING BETWEEN TALL AND FLAT ORGANIZATIONAL
STRUCTURES
1. A TALL ORGANIZATIONAL STRUCTURE is one in
which the pyramidal organization chart would be
quite tall because of the various levels of
management.
a. Tall organizations have MANY LAYERS OF
MANAGEMENT.
b. Communication is distorted as it flows
through these layers.
c. The cost of all these managers and support
people is high.
2. Because of these problems, organizations have
moved toward flatter organizations.
3. A FLAT ORGANIZATIONAL STRUCTURE is an
organization structure that has few layers of
management and a broad span of control.
a. These structures are much MORE
RESPONSIVE TO CUSTOMER DEMANDS
because decision-making power may be given

to lower-level employees.
b. The FLATTER organizations became, the
larger the SPAN OF CONTROL became. PPt 29-31
D. WEIGHING THE ADVANTAGES AND DISADVANTAGES OF
DEPARTMENTALIZATION
1. DEPARTMENTALIZATION is dividing organizational
functions into separate units.
a. The traditional way to departmentalize is by
function.
b. FUNCTIONAL STRUCTURE is the grouping of
workers into departments based on similar
skills, expertise, or resource use.
2. ADVANTAGES of functional departmentalization:
a. Workers can specialize and work together
more effectively.
b. It may save costs (efficiency).
c. Skills can be developed in depth.
d. Resources can be centralized to allow for
economies of scale.
e. There is good coordination within the
function.
3. DISADVANTAGES of departmentalization:
a. Departments may not communicate well.
b. Employees identify with the department
rather than the total organization.
c. Response to external change is slow.
d. Employees may not be trained in different

management responsibilities and become
narrow specialists.
e. People in the same department tend to think
alike (engage in GROUPTHINK) and need
outside input to become creative.
4. LOOKING AT ALTERNATIVE WAYS TO
How Do Organizations Group Activities?
DEPARTMENTALIZE
This exercise asks students to search the
a. By PRODUCT (A book publisher might have websites of several organizations to identify
departments for trade books, textbooks, and the primary method of departmentalization.
technical books.) (See the complete exercise on page 44 of this
manual.)
b. By CUSTOMER GROUP (A pharmaceutical
company might have separate departments
that focus on the consumer market, on
hospitals, and on doctors.)
c. By GEOGRAPHIC LOCATIONS (There may be
operations in Asia, Europe, and South
America.)
d. By PROCESS (A firm that makes leather coats
may have one department to cut the leather,
another to dye it, and a third to sew the coat.)
e. Some firms use a COMBINATION of
departmental techniques, called HYBRID
FORMS.
Figures:
FIGURE 8.2
ADVANTAGES AND DISADVANTAGES OF PPt 23
CENTRALIZED VERSUS DECENTRALIZED
AUTHORITY
PPt 27
FIGURE 8.3
A FLAT ORGANIZATIONAL STRUCTURE
FIGURE 8.4 PPt 28

ADVANTAGES AND DISADVANTAGES OF A
NARROW VERSUS A BROAD SPAN OF
CONTROL
The flatter the organization, the broader the
span of control.
FIGURE 8.5
WAYS TO DEPARTMENTALIZE PPt 32-36
A computer company may want to
departmentalize by geographic location
(countries), a manufacturer by function, a
pharmaceutical company by customer group,
a leather manufacturer by process, and a
publisher by product. In each case the
structure must fit the firm’s goals.
LO 8-4 Contrast the various organizational Key Terms:

models. line organization
line personnel
staff personnel
matrix organization
cross-functional self-managed teams
IV. ORGANIZATIONAL MODELS

lecture enhancer 8-4 PPt 39
A. There are several ways to structure an organization to
accomplish goals. The Manhattan Project
To build the world’s first atomic bomb, the
1. Traditional organizational models are giving way to
military turned to General Leslie Groves,
new structures, although there may be problems.
known for his administrative ability,
2. Some newer models violate traditional organizational skill, and decisiveness. (See
management principles. the complete lecture enhancer on page 34 of
this manual.) PPt 41
B. LINE ORGANIZATIONS
1. A LINE ORGANIZATION is 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 to
only one supervisor (i.e., the military and small
businesses).
a. The line organization has no specialists for
management support.
b. Line managers can issue orders and enforce
discipline.
2. DISADVANTAGES IN LARGE ORGANIZATIONS:
a. Too inflexible
b. Few specialists to advise line employees
c. Lines of communication too long
d. Unable to handle complex decisions
lecture enhancer 8-5
3. Such organizations usually become line-and-staff
Manufacturers Attempt to Overcome Skills
organizations. Gap with Apprenticeships
PPt 42
C. LINE-AND-STAFF ORGANIZATIONS
American workers could potentially miss out
1. Line-and-staff organizations have both line and staff on millions of industrial line jobs due to lack
personnel. of training. (See the complete lecture
enhancer on page 36 of this manual.)
2. LINE PERSONNEL are employees who are part of
the chain of command that is responsible for
achieving organizational goals.
3. STAFF PERSONNEL are employees who advise and
assist line personnel in meeting their goals.
4. Line personnel have FORMAL AUTHORITY to make

policy decisions; staff have the AUTHORITY TO
ONLY ADVISE line personnel.
PPt 44-47
5. ADVANTAGES OF LINE-AND-STAFF
ORGANIZATION:
a. Have access to expert advice
b. Staff positions strengthen the line personnel
D. MATRIX-STYLE ORGANIZATIONS
1. Both line and line-and-staff organizations can
become INFLEXIBLE.
a. Both structures work well in organizations
with relatively unchanging environments and
slow product development.
b. However, high-growth industries now
dominate the economy.
c. In such industries, emphasis is on new
product development, creativity, rapid
communication, and interdepartmental
teamwork.
2. A MATRIX ORGANIZATION is 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.
a. Matrix organization structures were
developed in the aerospace industry.
b. The structure is now used in banking,

management consulting firms, ad agencies, and
school systems.
3. ADVANTAGES OF MATRIX ORGANIZATIONS
a. Flexibility in assigning people to projects
b. Encourage interorganizational cooperation
and teamwork
c. Can give more creative solutions to problems
d. More efficient use of organizational resources
4. DISADVANTAGES OF MATRIX ORGANIZATIONS
a. Are costly and complex
b. Create confusion in employee loyalties
c. Require good interpersonal skills and
cooperative employees and managers
d. May be only a temporary solution to a long-
term problem
5. Although matrix organizations seem to violate some
traditional managerial principles, the system
functions relatively effectively.
PPt 48-49
a. The matrix organization has been adopted in
high-tech firms because of its effectiveness.
b. A potential problem is that the project teams
ARE NOT PERMANENT and there is little
chance for cross-functional learning.
E. CROSS-FUNCTIONAL SELF-MANAGED TEAMS
bonus case 8-2
1. One solution to the disadvantage of temporary
Creating Cross-Functional Teams
teams is to establish long-lived teams.
2. CROSS-FUNCTIONAL SELF-MANAGED TEAMS are

The Direct Response Group instigated
groups of employees from different departments organizational change to make its people
who work together on a long-term basis (as more responsive to the customer. (See the
opposed to the temporary teams established in complete case, discussion questions, and
matrix-style organizations). suggested answers beginning on page 49 of
a. Usually the teams are EMPOWERED to make this manual.)
decisions on their own without seeking the
approval of management.
b. Self-managed teams reduce the barriers PPt 50
between design, engineering, marketing, and
other functions.
c. Cross-functional teams work best when
leadership is shared.
F. GOING BEYOND ORGANIZATIONAL BOUNDARIES
1. Cross-functional teams work best when customers’
input is included.
2. Some go beyond organizational boundaries to
include customers, suppliers, and distributors.
3. Some cross-functional teams share information
across national boundaries and may be encouraged
by the government.
Figures:
FIGURE 8.6 PPt 43

A SAMPLE LINE-AND-STAFF ORGANIZATION
FIGURE 8.7 PPt 45

A MATRIX ORGANIZATION
In a matrix organization, project managers
are in charge of teams made up of members
of several departments. In this case, project
manager 2 supervises employees A, B, C, and
D. These employees are accountable not only
to project manager 2 but also to the head of
their individual departments. For example,
employee B, a marketing researcher, reports
to project manager 2 and to the vice
president of marketing.
LO 8-5 Identify the benefits of interfirm Key Terms:

cooperation and coordination. networking
real time
virtual corporation
benchmarking
core competencies
digital natives
restructuring
inverted organization
V. MANAGING THE INTERACTIONS AMONG FIRMS PPt 53

A. NETWORKING is using communications technology and
other means to link organizations and allow them to work
together on common objectives. PPt 54-56
B. TRANSPARENCY AND VIRTUAL ORGANIZATIONS
1. The Internet links organizations so closely that each
can see what the others are doing in real time.
a. REAL TIME is the present moment or the
actual time in which something takes place.
b. TRANSPARENCY is a concept that describes a
company being so open to other companies
working with it that the once-solid barriers
between them become see-through, and
electronic information is shared as if the
companies were one.
c. Using this integration, two companies can
work together as closely as two departments
once did.
2. Most organizations are no longer self-sufficient, but
are part of a vast network of global businesses.
3. A modern organization chart should show people in
different organizations and how they are
networked together.
4. Organization structures tend to be flexible and

changing.
5. A VIRTUAL CORPORATION is a temporary
networked organization made up of replaceable
firms that join and leave as needed.
a. This concept is very different from traditional
organizations.
b. Traditional managers often have trouble
adapting to rapidly changing structures.
6. In the past, each organization had a separate
department for each function.
a. Organizations are now benchmarking each
function against the best in the world.
b. BENCHMARKING is comparing an
organization’s practices, processes, and
products against the world’s best (example:
K2 benchmarked Piezo’s technology).
c. Benchmarking can be used in a direct
competitive way, as when Target compared
itself with Walmart.
7. If the organization can’t do as well as the best, it
can OUTSOURCE the function to an organization
A New Kind of Outsourcing
that is the best.
Some communities are finding relief
a. OUTSOURCING is assigning functions—such from the very companies that
as accounting, production, security, and legal outsourced their old jobs. (See the
work—to outside organizations. complete lecture enhancer on page
b. Overseas outsourcing is controversial. 37 of this manual.)
c. Some functions, such as information

management and marketing, may be too
important to outsource.
8. CORE COMPETENCIES are those functions that the
organization can do as well or better than any other
organization in the world. (Text example: Nike’s
core competencies are designing and marketing
athletic shoes, but it outsources manufacturing.) PPt 59
VI. ADAPTING TO CHANGE
A. The organization structure must be ADAPTED TO lecture enhancer 8-7
CHANGES in the market. Pivoting from One Business Plan to Another
1. Introducing change into an organization is one of Some ideas don't work as well as
the toughest challenges for managers. we’d like to believe at the start.
Michael Garritty rolled with those
2. It is difficult for some companies to reinvent
punches. (See the complete lecture
themselves in response to changes in the enhancer on page 38 of this manual.)
competitive environment.
3. Painful changes may be necessary—such as U.S.
automakers closing plants and reducing staff.
4. Companies must coordinate the efforts of
traditional departments and their Internet staff.
5. To reach DIGITAL NATIVES (individuals who grew lecture enhancer 8-8
up with the Internet and cell phones), companies
Snapchat Partners with TV Companies for
must retrain older workers in the new technologies
Original Content
(examples: YouTube, Facebook, Twitter, RSS).
Snapchat has grown into one of the most
6. Companies that are most successful in adapting to
powerful social networks around. It’s now
change have these common traits: working to create short “shows” for its
a. They listen to customers. Stories section to keep users’ attention
longer. (See the complete lecture enhancer
on page 39 of this manual.)
b. They have inspirational managers who drive

new ideas through the organization.
c. They often have had a close call with going
out of business. PPt 62
B. RESTRUCTURING FOR EMPOWERMENT
1. To implement empowerment, firms often must
reorganize dramatically.
2. RESTRUCTURING is redesigning an organization so
that it can more effectively and efficiently serve its
customers.
3. A few organizations have turned the traditional
organizational structure upside down.
a. An INVERTED ORGANIZATION is an
organization that has contact people at the
top and the chief executive officer at the
bottom of the organization chart.
b. There are few layers of management, and
their job is to assist and support frontline
people.
c. Companies using the inverted structure
support frontline personnel with internal and
external databanks, advances communication
systems, and professional assistance.
d. Frontline people now have to be better
educated, better trained, and better paid
than in the past.
e. In more progressive organizations, everyone
SHARES INFORMATION, giving everyone
power.
Figures:
FIGURE 8.8 PPt 55

A VIRTUAL CORPORATION
A virtual corporation has no permanent ties
to the firms that do its production,
distribution, legal and other work. Such firms
are flexible enough to adapt to changes in
the market quickly.
FIGURE 8.9 PPt 63

COMPARISON OF AN INVERTED
ORGANIZATIONAL STRUCTURE AND A
TRADITIONAL ORGANIZATIONAL
STRUCTURE
LO 8-6 Explain how organizational culture can Key Terms:

help businesses adapt to change. organizational (or corporate) culture
formal organization
informal organizationF8.1
VII. CREATING A CHANGE-ORIENTED ORGANIZATIONAL CULTURE PPt 64

A. Organizational change always causes some RESISTANCE.
1. Firms that adjust best have a change-oriented lecture enhancer 8-9
organizational culture.
Employer Icebreaking Rituals
2. ORGANIZATIONAL (OR CORPORATE) CULTURE is
Each organizational culture is different. Foot
the widely shared values within an organization
Levelers has its own practices. (See the
that provide unity and cooperation to achieve complete lecture enhancer on page 40 of this
common goals. manual.)
a. An organization’s culture is reflected in
stories, traditions, and myths.
b. For example, McDonald’s culture emphasizes
quality, service, cleanliness, and value.
c. An organization’s culture can be negative, as
with an organization in which no one cares
about quality.
3. The very best organizations have cultures that
emphasize SERVICE TO CUSTOMERS.
a. The atmosphere is one of friendly, caring
people who enjoy working together.
b. Those companies have LESS NEED FOR CLOSE
SUPERVISION of employees.
c. The key to productive culture is MUTUAL
TRUST.
4. The formal organization structure is just one
element of the total organizational system.
B. MANAGING THE INFORMAL ORGANIZATION PPt 65-66
1. All organizations have two systems.

a. The FORMAL ORGANIZATION is the structure
that details lines of responsibility, authority,
and position; that is, the structure that
appears on the organization chart.
b. The INFORMAL ORGANIZATION is the system
that develops spontaneously as employees
meet and form cliques, relationships, and
lines of authority outside the formal
organization; that is, the human side of the
organization that does not appear on any
organization chart.
2. No organization can operate effectively without
BOTH TYPES of organization.
a. The FORMAL ORGANIZATION can be slow
and bureaucratic, while the INFORMAL
ORGANIZATION can generate creative
solutions.
b. The informal organization is TOO
UNSTRUCTURED AND EMOTIONAL for
decision making, while the formal
organization provides guidelines and lines of
authority.
3. It is wise to learn quickly who the important people
are in the informal organization.
4. The nerve center of the informal organization is the
GRAPEVINE.
5. Successful managers learn to WORK WITH THE

INFORMAL ORGANIZATION and use it to the
organization’s advantage.
6. The informal organization can also be very powerful
in resisting management directives.
VIII. SUMMARY
LECTURE ENHANCERS

SMITH’S FOLLY
Kenneth H. Olsen, founder and CEO of Digital Equipment Corporation, was known for his autocratic style. However, at the same time
he strongly believed in delegating responsibility, something other computer entrepreneurs have found it difficult to do.
In delegating responsibility, Olsen was always willing to forgive worker mistakes. John F. Smith, Digital’s 12th employee and vice
president for 20 years, recalls buying a $7,000 soldering machine, a huge investment at the time, that proved unreliable. He says he
came in nights and weekends to adjust it so Olsen wouldn’t realize his error.
Ultimately, Smith bought a replacement machine, moved the lemon to a vacant storeroom, covered it with a canvas, and thought he
had gotten away with it. He served as chief operating officer at Digital Equipment from 1986 through 1994. Much later he came
across the machine and idly lifted the covering. He found a hand-lettered sign that read “Smith’s folly. [signed] Ken Olsen.

ZAPPOS GOES BOSSLESS
The online shoe retailer Zappos has always set out to be an innovative employer as well as a successful business. Along with quality
benefits and perks, CEO Tony Hsieh grants his staff the freedom to do their jobs according to their terms. In fact, in 2015, the Zappos
boss put a radical new corporate structure into place that eliminates all traditional managers or job titles. Instead of a traditional
hierarchy, employees now work in “circles” that encourage more collaboration and agility.
While many of the retailer’s staffers transitioned smoothly into the new “Holacracy” system, others took advantage of an offer from
Hsieh to make a clean exit. The CEO allowed anyone who couldn’t adapt to the loose structure to leave with at least three months’
severance, a proposition that some 210 employees accepted. The number of departures amounts to 14 percent of Zappos’ staff,
which is no small amount considering how unaccustomed the company is to turnover. After all, the business media consistently
ranks Zappos among the best places to work. The fact that so many people left at once could be a sign that the company’s culture
has been damaged by this latest structural experiment.
Then again, it’s likely that many didn’t want to pass up an opportunity to collect three months’ salary for simply walking out the
door. What’s more, the improving job market gives these former Zappos staffers a stronger safety net than they would have enjoyed
even a year ago. “Some Zapponians took it because they are not in line with the vision of the company, others took it to pursue
other passions including starting businesses,” said Zappos technical advisor John Bunch. “Ultimately, however many people took the
offer is the right number because they are doing what is best for them and for Zappos.” The company hopes these dedicated staffers
will thrive in their new environment. If they do, similarly manager-less systems could start popping up in other parts of business.

CHOOSING THE RIGHT SPAN OF CONTROL
No formula exists for determining the ideal span of control. Several factors affect the number of people a manager can effectively
supervise. Variables in span of control include the following:
• Capabilities of the manager. The more experienced and capable a manager is, the broader the span of control can be. (A
large number of workers can report to that manager.)
• Capabilities of the subordinates. The more the subordinates need supervision, the narrower the span of control should
be. Employee turnover at fast-food restaurants, for example, is often so high that managers must constantly be training
new people and thus need a narrow span of control.
• Geographic closeness. The more concentrated the work area is, the broader the span of control can be.
• Functional similarity. The more similar the functions are, the broader the span of control can be.
• Need for coordination. The greater the need for coordination, the narrower the span of control might be.
• Planning demands. The more involved the plan, the narrower the span of control might be.
• Functional complexity. The more complex the functions are, the narrower the span of control might be.
Other factors to consider include the professionalism of superiors and subordinates and the number of new problems that occur in a
day. In business, the span of control varies widely. The number of people reporting to a company president may range from 1 to 80
or more. The trend is to expand the span of control as organizations reduce the number of middle managers and hire more educated
and talented lower-level employees. That is all included in the idea of empowerment. It’s possible to increase the span of control as
employees become more professional, as information technology makes it possible for managers to handle more information, and
as employees take on more responsibility for self-management.

THE MANHATTAN PROJECT
As early as 1939 Albert Einstein warned President Franklin Roosevelt that the new field of physics had opened up the possibility of
extraordinarily powerful bombs. In the summer of 1942, the government created the Manhattan Engineer District to meet the goal
of producing an atomic weapon under the pressure of ongoing global war. The project became known as the Manhattan Project. The
story of the bomb’s creation involved the extraordinary efforts of scientists, engineers, and military officials. But it is also the story of
a massive organizational endeavor.
The project was put under the direction of Brigadier General Leslie Groves of the Army Corps of Engineers. Groves had impressed his
superiors with this administrative ability, organizational skill, and decisiveness. Previously Groves had successfully supervised the
construction of the Pentagon. (Ironically, construction on the Pentagon began on September 11, 1941.) When he was assigned to
head the top-secret weapons project, Groves tried to get reassigned, preferring a posting overseas, but was unsuccessful.
Under Groves’s direction, secret atomic energy communities were created almost overnight in Oak Ridge, Tennessee, at Los Alamos,
New Mexico, and in Hanford, Washington, to house the workers and gigantic new machinery needed to produce the bombs. The
weapon itself would be built at the Los Alamos laboratory, under the direction of physicist J. Robert Oppenheimer.
Groves made all the important decisions governing the Manhattan Project himself. He personally recruited Oppenheimer and the
other key organization members. Groves drew up the plans for the organization, construction, operation, and security of the project
and took all necessary steps to put it into effect. Reporting directly to Secretary of War Henry Stimson and General George Marshall,
Groves routinely bypassed traditional lines of authority to ensure the success of the project.
Groves’s aggressive management style and determination were key factors to the success of the Manhattan Project. His detractors
called him egotistical, brusque, manipulative, and overly authoritative. However, he was decisive and able to cut through the red
tape to accomplish his goals.
By the time the bombs were perfected, Germany had surrendered, and some scientists on the project questioned whether to
continue bomb development. The project ultimately built four atomic bombs: “Gadget,” the test bomb exploded in the New Mexico
desert, “Little Boy,” dropped on Hiroshima, “Fat Man,” dropped on Nagasaki, and bomb no. 4, which was unused.
Based on figures from the Atomic Energy Commission archives, the costs of the project exceeded $1.8 billion. The Oak Ridge gaseous
diffusion plant (which obtained the needed uranium isotope) alone cost $512,000,000. The Brookings Institute has translated these
figures into current dollars. The four bombs would today cost $20 billion, or $5 billion per bomb. The total value of all bombs, mines,
and grenades used in the entirety of World War II, in comparison, was $31.5 billion.

MANUFACTURERS ATTEMPT TO OVERCOME SKILLS GAP WITH APPRENTICESHIPS
According to a study conducted by the Manufacturing Institute, over the next decade American workers will miss out on two million
industrial jobs due to lack of training. While President Obama was in office, he tried to close this growing skills gap by promoting
German-style apprenticeships that provide on-the-job education for young workers. In Germany, roughly half of all high school
graduates opt for these intense training programs, not least of all because they are virtually guaranteed employment at the end.
Apprentices in these programs typically spend three to four days a week training on-site at a company followed by another couple of
days learning at a vocational school. Firms pay for their students’ tuition and provide wages as well. After three years, apprentices
must then pass an exam covering their chosen occupation. Those who earn certification often stay with the company that trained
them, thus providing a benefit both for the employee and the firm. This is true for American apprentices as well as German ones:
according to the Labor Department 87 percent of U.S. apprentices gain employment after completing training programs.
Domestic organizations like the Illinois Consortium for Advanced Technical Training (ICATT) want to make sure that more American
workers gain access to this kind of on-the-job education. For instance, the Illinois-based metal manufacturer Scot Forge recently
teamed up with ICATT to create a training program based around German certification standards. Students split their time between
working on the shop floor and learning in the classroom at a local community college. Those who make it through the three-year
program receive an associate’s degree as well as two years of guaranteed employment. According to Zach Ford, the head of Scot
Forge’s apprenticeship program, other companies would be wise to set up similar systems of their own. “If all manufacturers don’t
open their eyes and see what’s going to happen here, it will hurt our industry,” said Ford. “If you don’t have the people to do the
work, it doesn’t matter how much work there is.”

A NEW KIND OF OUTSOURCING
Local governments across the country are looking for new ways to create jobs. Ironically, some communities are finding relief from
the very companies that were responsible for outsourcing their region’s jobs in the first place. For example, like many American
cities, Cincinnati lost scores of manufacturing jobs to cheap labor overseas. But Ohio Governor Ted Strickland didn’t let bad blood
get in the way while he was wooing the Indian tech company Tata Consultancy Services (TCS) to set up offices just outside of
Cincinnati. Encouraged by a promise of $19 million in tax credits, TCS agreed. The branch has already hired 300 American employees
and plans to employ as many as 1,000 Americans in the future.
While TCS processes data for many American companies, laws prevent it from sending data about the U.S. government or health
care projects overseas. As a result, Indian companies like TCS and Wipro Technologies are adding American branches in order to tap
into this market. Officials in cities like Dallas, Atlanta, and Minneapolis have been all too happy to court these companies in the
hopes of creating jobs for American workers. The cost for setting up shop in the United States is high for Indian companies, with an
employee in Ohio making $50,000 a year versus $7,000 for a staffer in Bangalore. Nevertheless, American employees show their
value through their knowledge of cultural nuances and their abilities to help their Indian bosses compete against rival American
companies.
Still, this brand of domestic outsourcing has its downsides. Though TCS employs 1,300 American workers, it also has 13,000 Indian
staffers on work visas employed in the United States. This practice could soon be outlawed, though, as proposed legislation could
limit companies with more than 50 U.S.-based employees from using temporary visas for half their American workforce.
Furthermore, TCS and Wipro both have admitted that they most likely will not create large amounts of American jobs as the
recession has stifled much of their U.S. growth. Even so, as long as jobs are in short supply, expect local governments across the
country to continue soliciting Indian companies to set up shop in their regions.

PIVOTING FROM ONE BUSINESS PLAN TO ANOTHER
When Michael Garrity founded CommunityLend in 2010, he thought his company was in a perfect position to capture an untapped
market. After all, the 2008 financial crisis made many banks wary of lending too much cash, presenting a golden opportunity to non-
traditional operations like CommunityLend. Plus, the company's peer-to-peer model was the first of its kind in Garrity’s home
country of Canada, marking a major advantage for the startup.
Despite these benefits, though, CommunityLend had trouble finding qualified borrowers for their service. With no one to lend
money to, Garrity quickly realized his company would need to switch business plans fast if it was going to stay afloat. Luckily, in its
first months of operation CommunityLend heard from many other potential clients besides those with bad credit. Garrity received
calls from dozens of small businesses checking to see if his company offered point-of-sale customer lending services like installment
plans. The recession had eliminated many of these lenders, leaving retailers desperate for additional consumer financing options.
Although Garrity initially brushed off these inquirers, he soon saw their worth and began to call them back.
Next, he needed to convince investors that pivoting to a new concept was necessary for the company to thrive. Shareholders didn’t
want to abandon CommunityLend entirely, though, so Garrity launched his retail lending firm FinanceIt as a sister operation. Within
months he signed up hundreds of new clients for FinanceIt, leading him to the conclusion that the two firms could not feasibly
coexist. Unfortunately, axing CommunityLend meant that many employees got shown the door. “We lost 80 percent of our team as
we moved from peer-to-peer lending to a point-of-sale financing company,” said Garrity. “We did a big management change-out,
because some hires made sense for CommunityLend but not for FinanceIt.” Nevertheless, the difficult switch seems to have been
worth it in the long run: FinanceIt has processed more than $650 million in loan applications from more than 3,500 clients in Canada.
With so much domestic success, the company is now looking to expand its retail lending strategy to the U.S.

SNAPCHAT PARTNERS WITH TV COMPANIES FOR ORIGINAL CONTENT
With 158 million users and a $25 billion valuation, the photo and video sharing app Snapchat has grown into one of the most
powerful social networks around. Still, just because the app is popular doesn’t mean it’s guaranteed to become a moneymaker.
Twitter, for instance, has more than 300 million users and has struggled to be profitable for years. So in order to become a true tech
giant, Snapchat is teaming up with old media firms to create original content that can generate ad revenue.
So far the company has brokered partnerships with networks like NBC, ABC, Discovery, ESPN, and many others. These outlets will
produce short, television-like videos that show up in Snapchat’s “Stories” section. Along with attracting advertisers, executives also
hope these videos will encourage people to spend more time on the app. Most users are active on Snapchat for an average of 25 to
30 minutes a day. To ensure they can keep people’s attention even longer, Snapchat is working closely with media companies as
they develop content for the app.
For example, NBC initially created some videos based on existing television shows that the social network thought were too
promotional and gimmicky. “They were very much in a TV mind-set,” said Snap vice president of content Nick Bell. “We wanted
something as premium as television itself.” So representatives from the two companies worked together to create a Snapchat
version of the singing competition The Voice. More than 20,000 users submitted 10-second auditions for a chance to perform on the
live TV show. Snapchat plans to release other repurposed versions of both reality and scripted programs as it heads down the path
to profitability.

EMPLOYER ICEBREAKING RITUALS
For many fresh hires, a new office environment can seem alien and uninviting. Habits that were commonplace at the employee’s
previous job may be unacceptable in their new one. Initial interactions with colleagues can be awkward or even hostile, sometimes
leading to fissures in working relationships that are difficult to mend. A clear understanding of a company’s culture is vital to every
employee’s success, and sometimes a simple orientation just isn’t enough. To help new hires effectively assimilate into the
workplace, some companies use initiation rituals to break in their new members. Besides working as an icebreaker, such rituals
create an instant bond by establishing the character of the company to the employee through various activities.
For example, at Foot Levelers, a manufacturer of chiropractic products, employees will occasionally notice a sign on the conference
room door reading “Rudy in Progress.” Inside the room, a group of new hires eat snacks and watch the 1993 football drama Rudy, a
movie about a tenacious student who strives to play on the Notre Dame gridiron. After the movie ends, Foot Levelers CEO Kent
Greenwault collects everyone’s impressions on the film and together they compose a list of the traits Rudy utilized to finally gain
success. Employees are meant to emulate Rudy’s determination and ceaseless work ethic that drove him on even in the bleakest
moments. The ritual also clues staffers in on Greenwault’s favorite management catchphrase. Whenever an employee comes to a
manager with a work problem, the manager will first ask them, “Did you Rudy that?”
Some companies use rituals to test the physical mettle of new staffers. At the Massachusetts-based moving company Gentle Giant,
CEO Larry O’Toole requires new hires to join him for a run up and down the steps of Harvard Stadium. First of all, the ritual acts as an
effective indicator of the employee’s physical capabilities. O’Toole often won’t allow new hires onto a moving truck until he has
observed them on the steps. Symbolically, though, O’Toole hopes the run shows staffers how he expects them to push themselves
even in the most uncomfortable situations.
CRITICAL THINKING EXERCISES

BUILDING AN ORGANIZATION CHART
Dr. Rea Searge is president of Peabody Researchers, Inc., a pharmaceutical company. Peabody uses a line-and-staff structure to
organize its employees. In addition to Dr. Searge, Peabody has the following employees:
A quality control officer

A vice president of production
150 research and development employees
A sales force of 100 people
A vice president of finance
Marketing managers for three regions
A vice president of marketing
A director of personnel
A vice president of research and development
Production managers for three product lines
An administrative assistant to the president
A production force of 600 people
On a separate sheet of paper, draw an organization chart for Peabody Researchers, Inc. Use solid lines for line authority–
responsibility relationships and dotted lines for staff authority–responsibility relationships. Use the diagram in your text as an
example.
notes on critical thinking exercise 8-1
The following people are staff:
Director of personnel
Vice president of research and development
Administrative assistant to the president
Research and development department
Quality control officer
The rest have line positions.
Let the students draw the chart on the board with as little assistance as possible so they can think it through. A possible solution is
given on the following page.

HOW DO ORGANIZATIONS GROUP ACTIVITIES?
Corporations use their websites and social media pages to communicate with investors, customers, and the general public. Just by
visiting the company’s site you can usually discover the organization’s chain of command and approach to departmentalization. Go
to the websites for each organization below and identify the primary organizational units. (Hint: Look for the “Corporate
Information” or “Investor Relations” sections.) Based on that information, speculate on the type of departmentalization used. i
1. Coca-Cola Company
Primary Organizational Units:
Type of Departmentalization Used: __________________________________
2. The Walt Disney Company

i
The Internet is a dynamic, changing information source. Web links noted in this manual were checked at the time of publication, but content may change over
time. Please review the website before recommending it to your students.
3. The United Methodist Church

4. Kraft Foods
5. Boeing
BONUS CASE
bonus case 8-1

STRUCTURAL COLLAPSE: RESPONSIBILITY AND ACCOUNTABILITY
To publicize its newly opened nightspot, a major hotel instituted weekly “tea dances” in the lobby of the hotel. A local band played
1940s-era music while dancers competed in friendly contests. On a Friday night in July, the band was playing Duke Ellington’s “Satin
Doll” when two skywalks spanning the lobby of the year-old hotel collapsed. Sixty-five tons of concrete, metal, glass, and dance
spectators plunged four floors to the sidewalk below, killing 114 persons and injuring 216 others.
The investigation after the collapse revealed that the collapse resulted from poor judgment and a series of events that, in
combination, produced a disastrous result. The study showed a history of oversights, misunderstandings, and safety problems
plaguing the 40-story, 780-room luxury hotel during construction and for months after its opening.
Mishaps aren’t uncommon on big projects, of course. But this huge project, which was built on an accelerated schedule,
encountered a series of accidents and near-accidents during construction. At one point the building’s owner dismissed its general
contractor and barred an inspection company from bidding on future company projects.
The hotel was erected using the “fast-track” method, a fairly common procedure in which construction proceeds before all drawings
are complete. With a $40 million construction loan outstanding and all building costs soaring, the owner wanted the hotel up and
open as quickly as practical.
Design changes are common on fast-track projects, making clear communications more critical than usual. The owners of the
building had circulated a 27-page procedures manual explaining the proper channels for design changes and approved drawings. But
the procedures weren’t always followed, and other mistakes slipped in. Because some connections were misplaced on the drawings,
for instance, workers installed a sweeping cantilevered stairway without fully attaching it to a wall.
The investigation found that the skywalks fell as a result of a design change made during a telephone call between the structural
engineering company and the steel fabricator. Stress calculations would have shown that the redesigned skywalks were barely able
to support their own weight, let alone the weight of dozens of dance spectators. However, court depositions of the two engineers
who made the telephone redesign indicate that each person assumed it was the other’s responsibility to make new calculations, and
neither did.
Edward Pfrang, then chief of the structures division of the National Bureau of Standards and a participant in the investigation, says,
“One thing that’s clear after . . . [this] failure and a few others is that there isn’t a clear-cut set of standards and practices defining
who is responsible in the construction process.
discussion questions for bonus case 8-1

1. Who was responsible for the collapse? Explain.
2. Identify several key time points at which the problem could have been corrected.
3. Is this a failure of planning, organizing, leading, or controlling?
notes on discussion questions for bonus case 8-1

1. Who was responsible for the collapse? Explain.
Identifying who is to blame is the function of the legal system. Clearly, many people shared in the blame, but not necessarily
legally. Such a case shows the dangers of trying to get a project done quickly instead of safely.
2. Identify several key time points at which the problem could have been corrected.
During construction, during the safety inspection, when the times were set for competition—safety considerations don’t take
place at any one time. They must be in mind at all times.
3. Is this a failure of planning, organizing, leading, or controlling?

This failure occurred at all three stages: (1) At the planning stage because the project was hurried. (2) At the organization
stage because responsibility was not made clear. (3) At the control stage because periodic inspections should have found the
flaws.
This case is based on the collapse of the skywalk at the Kansas City Hyatt Regency in 1981. Hundreds of lawsuits were filed
against its owner, Hallmark Cards Inc., its operator, Hyatt Hotels Corp, and against the building companies involved. Millions
of dollars in damage claims have been paid out.
bonus case 8-2

CREATING CROSS-FUNCTIONAL TEAMS
The Direct Response Group (DRG) at Capital Holding is a direct marketer of life, health, property, and casualty insurance. In the past,
it sold a mass-produced product to a mass market. Over time, however, sales slowed, profits eroded, and the company decided it
had to refocus its efforts. That meant, for one thing, selling to particular, identifiable customers and giving those customers a
customized product/service package that was world class, enabling the company to compete globally.
An analysis of the corporate culture showed that people were more concerned with pleasing their bosses than pleasing the
customer. People hoarded information instead of sharing information because the people with information had power. The
information system had to be changed to encourage sharing.
Organizational change began with a vision statement that emphasized caring, listening to, and satisfying customers one-on-one. To
accomplish that goal, the company formed a cross-functional team to study the sales, service, and marketing processes and
completely redesign those functional areas. The idea was to have a world-class customer-driven company. That meant gathering as
much information as possible about customers.
Frontline customer-contact people were empowered with user-friendly information systems that made it possible for one contact
person, working with a support team, to handle any question that customers had. Management used external databases to get
detailed information on some 15 million consumers. The combined internal and external databases were used to develop
custom-made products for specific customer groups.
The whole company was focused on satisfying customer wants and needs. That meant changing processes within the firm so that
they were geared toward the customer. For example, one case worker is now attached to each customer, and that case worker is
responsible for following an application through the entire approval and product design process. Previously, many people handled
the application, and no one person was responsible for it.
A pilot program was started whereby a customer-management team was formed to serve 40,000 customers. The team consisted of
10 customer service representatives and their support team (a marketer, an expert in company operations, and an information
systems person). Employees are now rewarded for performance, and merit raises are based on team performance to encourage
team participation.
discussion questions for bonus case 8-2

1. Are traditional bureaucracies set up to provide custom-made products to individual consumers? Could they be, or is it always
better to have customer-oriented teams design such products?
2. Anyone who has worked in team situations has discovered that some members of the team work harder than others;
nonetheless, the whole team is often rewarded based on the overall results, not individual effort. How could team
evaluations be made so that individual efforts could be recognized and rewarded?
3. What service organizations, private or public, would you like to see become more customer oriented? How could this case be
used as a model for that organization?
4. What are some major impediments to implementing customer-oriented teams in service organizations?
notes on discussion questions for bonus case 8-2

1. Are traditional bureaucracies set up to provide custom-made products to individual consumers? Could they be, or is it
always better to have customer-oriented teams design such products?
Traditional bureaucracies are organizations that have many layers of management who set rules and regulations and
participate in all decisions. Such an organization, by definition, would be unable to swiftly respond to customer needs.
Decision making needs to be placed close to the customer, not in successive layers of management.
2. Anyone who has worked in team situations has discovered that some members of the team work harder than others;
nonetheless the whole team is often rewarded based on the overall results, not individual effort. How could team
evaluations be made so that individual efforts could be recognized and rewarded?
Team contributions are team contributions and difficult to isolate as individual efforts. In fact, the purpose of team
organization is to combine the best efforts of many individuals rather than relying on only one. Team members exercise
informal pressure to ensure continued quality effort. Such informal pressure is much more effective than organizational
efforts.
3. What service organizations, private or public, would you like to see become more customer oriented? How could this case
be used as a model for that organization?
The chances are that almost every student’s list will contain (1) the U.S. Postal Service and (2) your school. This case shows
that the entire organization must be committed to the customer-oriented team approach for it to be effective. Such an
approach would be difficult in a public organization such as USPS. The potential for creating a customer-oriented school
should be interesting to pursue.
4. What are some of the major impediments to implementing customer-oriented teams in service organizations?
Service organizations are quite different from product-producing organizations in that there is no distance between the
production of the service and the customer. The service is created when the customer receives it. Most service organizations
already have a customer-oriented focus. This case shows, however, that much improvement can be made in the delivery of
that service.
CONNECT INSTRUCTOR’S MANUAL
Helpful Suggestions Regarding Assignment Policies: Connect gives instructors a wide array of flexibility in making assignments and
creating grading policies. Instructors may choose to:
● assign as many assignments as he/she deems appropriate
● determine point values for each question/exercise individually
● make available multiple attempts per assignment with options of accepting the highest score or averaging all the attempts
together
● deduct points for late submissions of assignments (percentage deduction per hour/day/week/etc.) or create hard deadlines
● show feedback on exercises/questions immediately or at the time of his/her preference
● create new assignments or questions from scratch, such as web-linked assignments, LearnSmart study modules, writing
assignments, blog assignments, discussion board assignments, or upload questions from a pool
Recommendations: Here are some recommendations you might want to consider if you are using Connect for the first time.
● Assigning Application Exercises: consider assigning only 1 or 2 exercises per chapter.
● Assigning LearnSmart: You might also want to assign less than an entire chapter segment of LearnSmart in Connect. The
system allows you to do this by dragging the toggle lever left or right to increase or decrease the time of the activity. You can
also reduce the time based on which learning objectives you select and deselect for the chapter.
● The entire LearnSmart module is available to your student at all times; however, assigning 30 minutes or so will prompt
students to try it. You are required to select a due date for LearnSmart. However, this will not prevent the student from
LearnSmart access; it is designed to show you that the student has taken the LearnSmart assignment. LearnSmart is an
adaptive study tool designed for students. It can also show you where students are struggling to understand specific
concepts.
• The student’s LearnSmart score in the Connect reports is based on their mastery of the material at the time the assignment is
due. Mastery is an evaluation of the number of learning objectives they completed via performance on answering questions.
• Students may, and are encouraged, to continue to use LearnSmart throughout the semester. After the assignment due date,
they can continue to access LearnSmart. Continued use of LearnSmart will not affect their LearnSmart assignment results in
the Connect reports, but has shown to improve test scores by as much as a full letter grade.
Time-Saving Hints:
● Instructors may want to give students unlimited or multiple attempts on the first few assignments so the students have a
chance to learn and navigate the system before selecting the option for one attempt only.
● The value of each question should probably be relatively low, since multiple questions are usually assigned for each chapter.
A good rule of thumb would be to make “Quiz Questions” worth 1 point each and “exercises” worth 5–10 points each since
these require more time and thought.
● Feedback given to students is time flexible. Selecting feedback to be displayed after the assignment due date helps to limit
students from giving the correct answers to other students while the exercise is still available.
Connect: Chapter 8 – Table of Contents
Application Exercises:
Organizational Structuring Click and Drag
Adapting an Organization Video Case
Broad and Narrow Spans of Control Click and Drag
Line vs. Staff Personnel iSeeit! Video Case
Language Toolkit:
Language Toolkit 08a Click and Drag
Language Toolkit 08b Click and Drag
Language Toolkit 08c Click and Drag
Chapter Learning Goals:

Learning Goal 08-01: Outline the basic principles of organization management.
Learning Goal 08-02: Compare the organizational theories of Fayol and Weber.
Learning Goal 08-03: Evaluate the choices managers make in structuring organizations.
Learning Goal 08-04: Contrast the various organizational models.
Learning Goal 08-05: Identify the benefits of interfirm cooperation and coordination.
Learning Goal 08-06: Explain how organizational culture can help businesses adapt to change.
Organizational Structuring
Activity Summary: This activity involves determining advantages and disadvantages of centralized/decentralized authority. Students
are presented with eight descriptive scenarios from different organizations, and they must correctly identify the scenario as an
advantage/disadvantage of either a centralized or decentralized organization. Topics include centralized and decentralized control,
lines of authority, unity of command, departmentalization, empowerment, efficiency, and effectiveness.
Concept Review (Learning Goals, Difficulty, Blooms, and AACSB)

Learning Goals:
Difficulty Level: 2 = Medium
Blooms: Understand
AACSB: Knowledge Application
Follow-Up Activity: The instructor could ask students to list some of their favorite products/services, and then list any dislikes about
that product or the way the service was provided. Once that list is created, the student could then list ways to correct those
problems. The finished result might help the student understand how decentralized control or the increase in empowerment could
result in positive efficiencies being created within the organization. Students could also list organizations that do not change much
and identify why centralized control might actually be the most efficient structure to use.
Adapting an Organization
Activity Summary: This video case takes an in-depth look at New Belgium Brewery, in Fort Collins, Colorado. New Belgium Brewery
is known for its strong, positive organizational culture, empowerment programs, open-book operations with employees, and low
employee turnover. Interviews are shown from the founders and executives down to nonsupervisory employees to gain an
understanding of its organizational culture and structure. Questions are presented periodically during the video to test student
engagement. Topics include organizational culture, centralized and decentralized control, division of labor, and unity of command.

Learning Goals:
Learning Goal 08-05: Identify the benefits of interfirm cooperation and coordination.
Learning Goal 08-06: Explain how organizational culture can help businesses adapt to change.
Difficulty: 2 = Medium
Blooms: Understand
AACSB: Reflective Thinking
Follow-Up Activity: The instructor could ask students to research New Belgium Brewery to find out more about its origins and initial
organizational structure. Students could identify common practices that created the tight, positive organizational culture, and then
they could list ideas that would maintain this culture in the future while growth is experienced. Students could also write about their
experiences with organizational culture at past/present workplaces. A discussion could ensue about what makes a good
organizational culture.
Broad and Narrow Spans of Control

Activity Summary: This activity teaches students about the span of control in tall and flat organizations. Students are required to
read a short description of the management structure in several organizations and then match that description to either broad or
narrow span of control. Topics include span of control, tall and flat organizations, broad and narrow spans of control, empowerment,
and communication.

Learning Goals:
Difficulty: 2 = Medium
Blooms: Apply
AACSB: Knowledge Application
Follow-Up Activity: The instructor could ask students to list several different companies that would need or work best in a broad
span of control, and then the students could list those companies that would require a narrow span of control. The students could
then analyze why companies often start out with broad spans of control and eventually end up with narrow spans of control. The
instructor could engage students in a discussion of a technology company (such as Apple) and how information flows from top to
bottom and back again, to determine why speed and accuracy is important in this flow of communication.
Line vs. Staff Personnel

Activity Summary: This iSeeit! short video describes the activities of line personnel and staff personnel. It shows how each type of
employee is crucial in assisting the organization towards its goals.

Learning Goals:
Difficulty: 1= Easy
Blooms: Understand
AACSB: Teamwork
Follow-Up Activity: These short videos are designed to help students understand specific terms and concepts that are often key to
understanding the overarching subject. Instructors could use these short videos as quick ways to launch into the subject matter at
the beginning of a chapter or unit.
Language Toolkit 08a

Activity Summary: This is a vocabulary matching assignment. Students are asked to correctly match a list of selected key terms from
the chapter to their appropriate definitions.

Learning Goals:
Difficulty: 1 = Easy
Blooms: Understand
AACSB: Reflecting Thinking
Follow-Up Activity: Instructors could ask students to explain the definition of these terms in greater detail or explain how terms
relate to a specific business.
Language Toolkit 08b


Learning Goals:
Blooms: Understand
Language Toolkit 08c


Learning Goals:
Blooms: Understand
Another random document with
no related content on Scribd:
especially the older and larger roots. Reputed to cure anything from
a cough to a boil to an internal disorder, it was also considered an
aphrodisiac and a source of rare, mystical properties. But scientific
research has never yielded any hard evidence of its medicinal worth.
Settlers used ginseng sparingly, for it brought a high price when sold
to herb-dealers for shipment to China. The main problem lay in
locating the five-leaved plants, which grew in the most secluded,
damp coves of the Smokies. Sometimes several members of a
family would wait until summer or early fall, then go out on extended
“sanging” expeditions.
The search was not easy. During some seasons, the plant might not
appear at all. When it did, its leaves yellowed and its berries
reddened for only a few days. But when a healthy “sang” plant was
finally found, and its long root carefully cleaned and dried, it could
yield great financial reward. Although the 5-year-old white root was
more common, a red-rooted plant needed a full decade to mature
and was therefore especially prized. Greed often led to wanton
destruction of the beds, with no seed-plants for future harvests.
Ginseng was almost impossible to cultivate.
Ginseng-hunting became a dangerous business. Although Daniel
Boone dug it and traded in it, later gatherers were sometimes killed
over it. One large Philadelphia dealer who came into Cataloochee in
the mid-1800s was murdered and robbed. Anyone trying to grow it,
even if he were successful, found that he would have to guard the
plants like water in a desert. Indeed, the rare, graceful ginseng
became a symbol for many in the mountains of all that was unique,
so readily destroyed, and eventually irreplaceable.
As much as the pioneers drew on Indian experience, they also
depended on their own resourcefulness. One skill which the early
settlers brought with them into the Smoky Mountains involved a
power unknown to the Cherokees. This was the power of the rifle:
both its manufacture and the knowledge of what the rifle could do.
The backwoods rifle was a product of the early American frontier.
Formally known as the “Pennsylvania-Kentucky” rifle, this long-
barreled innovation became a standby throughout the Appalachians.
To assure precise
workmanship, it was
made out of the
softest iron
available. The inside
of the barrel, or the
bore, was
painstakingly “rifled”
with spiralling
grooves. This
gradual twist made
the bullet fly harder
and aim straighter
toward its target.
The butt of the
weapon was
crescent-shaped to
keep the gun from
slipping. All shiny or
highly visible metal
was blackened, and
sometimes a
frontiersman would
rub his gun barrel
with a dulling stain or
crushed leaf.
But the trademark of
the “long rifle” was
Alan Rinehart just that: its length.
Weighing over 2.5
Aunt Sophie Campbell made clay kilograms (5.5
pipes at her place on Crockett pounds) and
Mountain and sold them to her measuring more
neighbors and to other folks in the than 1.2 meters (4
Gatlinburg area. feet), the barrel of
the backwoods rifle
could be unbalancing. Yet this drawback seemed minor compared to
the superior accuracy of the new gun. The heavy barrel could take a
much heavier powder charge than the lighter barrels, and this in turn
could, as an expert noted, “drive the bullet faster, lower the
trajectory, make the ball strike harder, and cause it to flatten out
more on impact. It does not cause inaccurate flight....”
The Pennsylvania-Kentucky rifle became defender, gatherer of food,
companion for thousands of husbands and fathers. Cradled on a
rack of whittled wooden pegs or a buck’s antlers, the “rifle-gun” hung
over the door or along the wall or above the “fire-board,” as the
mantel was called, within easy and ready reach. It was the
recognized symbol of the fact that each man’s cabin was his castle.
Equipped with a weapon such as this, pioneer Americans pushed
back the frontier. The fastnesses of the Great Smoky Mountains
gradually submitted to the probing and settling of the white man. The
fertile valleys were settled, the hidden coves were conquered. The
Oconaluftee Turnpike to the top of the Smokies was completed in
1839. And in that fateful year, disaster was stalking a people who
had known the high mountains but who had not known of the ways
of making a rifle.
Rifle Making
National Park Service

Charles S. Grossman
Of all the special tasks in the Great Smoky Mountains, rifle making
was perhaps the most intricate and the most intriguing. From the
forging of the barrel to the filing of the double trigger and the carving
of the stock, the construction of the “long rifle” proved to be a
process both painstaking and exciting. After the barrel was shaped
on the anvil, its bore was cleaned to a glass-like finish by inserting
and turning an iron rod with steel cutters. When the rod could cut no
more, the shavings from the bore were removed. The rifling of the
barrel, or cutting the necessary twists into the bore, required a 3-
meters-long (10-foot) assembly, complete with barrel, cutting rod,
and rifling guide. The 1.5-meter (5-foot) wooden guide, whose
parallel twists had been carefully cut into it with a knife, could be
turned by a man pushing it through the spiral-edged hole of a
stationary “head block.” The resulting force and spin drove the
cutting rod and its tiny saw into the barrel, guiding its movement as it
“rifled” the gun.
Most of the rifles in the Smokies had an average spin or twist of
about one turn in 122 centimeters (48 inches), the ordinary original
length of the barrel. A later step—“dressing out” the barrel with a
greased hickory stick and a finishing saw—usually took a day and a
half to be done right. Likewise, the making of a maple or walnut rifle
stock, or the forging of the bullet mold, led gunsmiths to adopt the
long view of time and the passing of days in the Great Smoky
Mountains. Two such gunsmiths were Matt Ownby and Wiley
Gibson. Ownby (far left) fits a barrel to an unfinished stock as the
process of rifle making nears its end. Gibson (below), the last of four
generations of famous Smoky Mountain gunsmiths, works at his
forge in Sevier County, Tennessee. Over the years Gibson lived in
several places in Sevier County, and in each one he set up a gun
shop. As he tested one of his finished products (left), Gibson
commented: “I can knock a squirrel pine blank out of a tree at 60
yards.”
Walini was among the Cherokees living on the Qualla
Reservation in North Carolina when James Mooney
visited in 1888.
Smithsonian Institution
A Band of Cherokees Holds On
The Cherokees who remained in the East endured many changes in
the early 1800s.
As their Nation dwindled in size to cover only portions of Georgia,
Alabama, North Carolina, and Tennessee, the influence of growing
white settlements began to encroach on the old ways, the accepted
beliefs. Settlers intermarried with Indians. Aspects of the Nation’s
civilization gradually grew to resemble that of the surrounding states.
The Cherokees diversified and improved their agricultural economy.
They came to rely more heavily on livestock. Herds of sheep, goats,
and hogs, as well as cattle, grazed throughout the Nation. Along with
crops of aromatic tobacco, and such staples as squash, potatoes,
beans, and the ever-present corn, the Cherokees were cultivating
cotton, grains, indigo, and other trade items. Boats carried tons of
export to New Orleans and other river cities. Home industry, such as
spinning and weaving, multiplied; local merchants thrived.
Church missions and their attendant schools were established. As
early as 1801, members of the Society of United Brethren set up a
station of missionaries at a north Georgia site called Spring Place.
And within five years, the Rev. Gideon Blackburn from East
Tennessee persuaded his Presbyterians to subsidize two schools.
In 1817, perhaps the most famous of all the Cherokee missions was
opened on Chickamauga Creek at Brainerd, just across the
Tennessee line from Georgia. Founded by Cyrus Kingsbury and a
combined Congregational-Presbyterian board, Brainerd Mission
educated many Cherokee leaders, including Elias Boudinot and
John Ridge. Samuel Austin Worcester, a prominent Congregational
minister from New England, taught at Brainerd from 1825 until 1834.
He became a great friend of the Cherokees and was referred to as
“The Messenger.”
In 1821, a single individual gave to his Nation an educational
innovation as significant and far-reaching as the influx of schools. A
Cherokee named Sequoyah, known among whites as George Gist,
had long been interested in the “talking leaves” of the white man.
After years of thought, study, and hard work, he devised an 86-
character Cherokee alphabet. Born about 1760 near old Fort
Loudoun, Tennessee, Sequoyah had neither attended school nor
learned English. By 1818, he had moved to Willstown in what is now
eastern Alabama and had grown interested in the white man’s ability
to write. He determined that he would give his own people the same
advantage.
The first painstaking process he tried called for attaching a mark to
each Cherokee word. These marks soon mounted into the
thousands. As he sensed the futility of this one-for-one relationship,
he examined English letters in an old newspaper. His own mind
linked symbols of this sort with basic sounds of the Cherokee
tongue. After months of work, he sorted out these sounds and
assigned them symbols based, to a large extent, upon the ones he
had seen in the newspaper. When he introduced his invention to his
fellow Cherokees, it was as if he had loosed a floodgate. Within the
space of a few weeks, elders and children alike began to read and
write. The change was incredible.
Sequoyah himself vaulted into a position of great respect inside the
Nation. One of his many awestruck visitors, John Howard Payne,
described him with the finest detail and noted that Sequoyah wore
“... a turban of roses and posies upon a white ground girding his
venerable grey hairs, a long dark blue robe, bordered around the
lower edge and the cuffs, with black; a blue and white minutely
checked calico tunic under it, confined with an Indian beaded belt,
which sustained a large wooden handled knife, in a rough leathern
sheath; the tunic open on the breast and its collar apart, with a
twisted handkerchief flung around his neck and gathered within the
bosom of the tunic. He wore plain buckskin leggings; and one of a
deeper chocolate hue than the other. His moccasins were
unornamented buckskin. He had a long dusky white bag of sumac
with him, and a long Indian pipe, and smoked incessantly,
replenishing his pipe
from his bag. His air
was altogether what
we picture to
ourselves of an old
Greek philosopher.
He talked and
gesticulated very
gracefully; his voice
alternately swelling,
and then sinking to a
whisper, and his eye
firing up and then its
wild flashes
subsiding into a
gentle and most
benignant smile.”
During the 1820s,
Sequoyah moved
west to Arkansas.
Preoccupied with the
legend of a lost band
of Cherokees
somewhere in the
Rocky Mountains,
he initiated several
attempts to discover
the group. But age
Smithsonian Institution caught up with him.
He died alone in
Sequoyah displays the Cherokee northern Mexico in
alphabet he developed. the summer of 1843.
He had brought his
Nation a long way. His name would be immortalized in the great
redwood tree of the Far West, the giant sequoia. And in a sense his
spirit lived on in the first Cherokee newspaper—the Cherokee
Phoenix—which was established in 1828 at New Echota, with Elias
Boudinot as its editor and Samuel Worcester as its business
manager.
The Cherokees also made remarkable changes in government. In
1808, they adopted a written legal code; a dozen years later, they
divided the Nation into judicial districts and designated judges. The
first Supreme Court of the Cherokees was established in 1822, and
by 1827 the Nation had drawn up an American-based Constitution.
The president of the constitutional convention was a 37-year-old
leader named John Ross. A year later, he began a 40-year term as
principal chief of his people.
But whatever the progress of the internal affairs of the Cherokee
Nation, political relations with the United States steadily
disintegrated. Although the first quarter of the 19th century saw a
sympathetic man, Return Jonathan Meigs, serve as America’s
southern Indian agent, even he and his position could not prevent
the relentless pursuit of Indian territory.
In 1802 and 1803, the U.S. Government set a dangerous precedent
for the Cherokees. In return for Georgia’s abandonment of her
claims to the Mississippi Territory, the United States agreed to
extinguish all Indian titles for lands lying within Georgia. This
indicated that the government was no longer prepared to defend the
Cherokee Nation.
President Thomas Jefferson acted to alleviate some of the Cherokee
loss. He suggested a program of removal west to a portion of the
newly acquired Louisiana Purchase. Most Cherokees hated the plan,
yet some harassed bands made the trip to what is now Arkansas.
The foot was in the door; hereafter, the government could point to a
few Cherokees in Arkansas and direct others there. Even though 800
eastern Cherokee warriors fought alongside Americans during the
War of 1812, the United States came to recognize only the
government of the Cherokees West.
But what of the Cherokees East? They waited. They pursued daily
routines while the pressures around them gathered and grew. And
by 1828, these pressures had reached a degree which showed the
Cherokees that the final crush was on.
It began
inside the
Nation. In the
winter of
1828, an old
Cherokee
councilman,
Whitepath,
rose up in
rebellion
against the
new
constitution.
Suspicious of
the Nation’s
whirlwind
progress,
fearful of the
Nation’s
stormy
enemies,
Whitepath
attempted to
persuade his
15,000
countrymen
to hold fast
to the ways
of the past.
He Smithsonian Institution
assembled a Students stand before the original school
series of building at Dwight Mission, the first
localized Cherokee mission west of the Mississippi
meetings, River. The one-room log schoolhouse is
where he very much like those the white settlers
advocated built and used for years in the Smokies.
the
abandonment of
white religion,
society, economy.
He called for a
return to tribal
organization, but his
call fell on younger
ears and his plan
was doomed to
failure.
The Cherokees
turned to John Ross
for leadership. Like
Sequoyah, John
Ross possessed
both grace and
ability. These
assets, combined
with courage,
enabled him to
accomplish
seemingly remote
goals for his people.
This handsome
statesman,
educated by his
own father,
represented the
Smithsonian Institution middle ground of
Cherokee policy.
Elias Boudinot (top), editor of the Though refusing the
Cherokee Phoenix, bowed to reactionism of a
pressure and joined those willing to Whitepath, John
move west. Ross also rejected
any proposal to
move west. For he knew that his people had lived here in the
Smokies and belonged here, and he would not have them forced
from their
homeland.
Andrew Jackson
would. This stern
Tennessee soldier
and politician began
his career as a
headlong Indian
fighter and never
lost the zeal.
Although Jackson
the soldier had been
aided numerous
times by Cherokee
warriors, Jackson
the politician was
determined to move
the Cherokees
west. And in the
watershed years of
1828 and 1829,
Andrew Jackson
was elected and
sworn in as
President of the
United States.
Events conspired
against the Nation.
Smithsonian Institution In July of 1829, in
John Ross remained firm in his what is now known
opposition to the removal of the as Lumpkin County,
Cherokees. He was in the last group Georgia, a few
to leave. shiny nuggets of
gold were
discovered on
Ward’s Creek of the Chestatee River. Within days, fortune hunters
swarmed into the territory; more than 10,000 gold-seekers squatted
on Cherokee lands, disregarded Cherokee rights, and pillaged
Cherokee homes. With Jackson’s support, the Georgia legislature
passed laws confiscating Indian land, nullifying Indian law, and
prohibiting Indian assembly. By the end of 1829, the script for
Cherokee removal had been blazoned in gold.
But there was more. Andrew Jackson asked Congress for “a general
removal law” that would give him prime authority in the matter at the
same time that it formed the basis for future treaty negotiation.
Congress passed the Removal Act, which included a half-million
dollar appropriation for that purpose, in May of 1830. Davy Crockett,
whose legendary exploits and down-to-earth compassion made him
perhaps the best representative of the mountain spirit, was a U.S.
congressman at the time. Although his grandfather had been
murdered by Dragging Canoe, Davy Crockett argued against and
voted against the bill. He was the only Tennessean to do so, and he
was defeated when he ran for reelection.
Cherokee leaders sought help from the U.S. courts. Their friend and
missionary, sober and troubled Samuel Worcester, fell victim to a
Georgia law “prohibiting the unauthorized residence of white men
within the Cherokee Nation.” Worcester appealed to the Supreme
Court, which in February of 1832 considered the case of Worcester
v. Georgia. On March 3, a feeble Chief Justice John Marshall read
the Court’s decision to a packed room: all the Georgia laws against
the Cherokee Nation were declared unconstitutional.
Elias Boudinot, editor of the Phoenix and a special friend of
Worcester, wrote to his brother and expressed the Nation’s joy and
relief:
“It is glorious news. The laws of the state are declared by the highest
judicial tribunal in the country to be null and void. It is a great triumph
on the part of the Cherokees.... The question is forever settled as to
who is right and who is wrong.”
Yet Andrew Jackson would not stand for such a settlement. “John
Marshall has made his decision,” Jackson thundered, “now let him
enforce it.” This was the single instance in American history where
the President so
bluntly and openly
defied a Supreme
Court ruling. The
situation grew more
bleak. Worcester
was released from
jail only after
appealing to the
“good will” of the
state of Georgia.
Matters worsened
as Georgia
conducted its
Cherokee Lottery of
1832, and
thousands of white
men descended
onto lots carved out
of the Cherokee
land.
Boudinot and
several other
Cherokee leaders,
including John
Ridge, grew
discouraged to the
point of resignation.
Jackson’s attitude Smithsonian Institution
as President,
coupled with Major Ridge signed a treaty ceding
Georgia’s all of the Cherokees’ land in the east
unrelenting attack to the United States. He, his son
and the Supreme John, and his nephew Elias
Court’s inability to Boudinot were “executed” on June
stop it, caused a 22, 1839.
change of heart in
Boudinot and Ridge. Boudinot stepped down from the Phoenix and,
with Major Ridge, became an important spokesman for a minority
faction of Cherokees which was prepared to move west. However,
John Ross continued to speak for the vast majority who rejected any
discussion of removal.
By 1835, the rift between the Ridge party and John Ross’ followers
had become open and intense. Seeking to take advantage of this
division, Jackson appointed a New York minister, J.F. Schermerhorn,
to deal with Boudinot and Ridge. The Cherokee supporters of Ross
hated this “loose Dutch Presbyterian minister” and referred to him as
“The Devil’s Horn.”
On several occasions, Ross attempted to negotiate a reasonable
solution with Washington. He was frustrated at every turn. In
November of 1835, he and the visiting John Howard Payne were
arrested by the Georgia militia. In jail, Payne heard a Georgia guard
singing “Home Sweet Home” outside his cell. Payne asked the man
if he knew that his prisoner had written the song; the guard seemed
unimpressed. After spending nine days in jail, Ross and Payne were
released without any explanation for their treatment.
Ross traveled on to Washington to resume negotiations. While he
was there, Schermerhorn and the Ridge party drew up and signed a
treaty. Endorsed by a scant one-tenth of the Nation’s 16,000
Cherokees, this treaty ceded to the United States all eastern territory
in exchange for $5 million and a comparable amount of western
land. Cherokees throughout the Nation registered shock and
betrayal; Boudinot and Ridge, their lives already threatened
numerous times, would be murdered within four years. Yet despite
Ross’ protestations of fraud, the U.S. Senate ratified the minority
Treaty of New Echota by one vote. A new President, Martin Van
Buren, authorized Gen. Winfield Scott to begin the removal of all
Cherokees in the summer of 1838.
Scott, while determined to carry out the removal, tried in vain to
restrain his troops from inflicting undue hardships. Scott’s soldiers
moved relentlessly through the Nation. As one private remembered it
in later years:
“Men working in the
fields were arrested
and driven to the
stockades. Women
were dragged from
their homes by
soldiers whose
language they could
not understand.
Children were often
separated from their
parents and driven
into the stockades
with the sky for a
blanket and earth
for a pillow.”
The soldiers built 13
stockades in North
Carolina, Georgia,
Tennessee, and
Alabama. Using
these as base
camps, they
scattered
throughout the
countryside with
loaded rifles and
fixed bayonets. As
they herded Indians Smithsonian Institution
back toward the
forts, bands of Ginatiyun tihi, or Stephen Tehee,
roving outlaws was born in Georgia six months
burned the homes, before the removal of the
stole the livestock, Cherokees to the West. He served
robbed the graves. as a tribal delegate to Washington
Throughout the in 1898.
summer, a stifling

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Chapter 8: Structuring Organizations for Today’s Challenges

WHAT’S NEW IN THIS EDITION

• Video Case: Freshii’s Winning Organization

Chapter 7 Organization, Teamwork, and Communication (also used in ch 7)

Instructor Prep Time: 2 minutes

Wrap-up/”Take-aways” suggested topics:

BRIEF CHAPTER OUTLINE, LEARNING OBJECTIVES AND CLASSROOM ACTIVITIES

Chapter Opener Summary PowerPoint Slides

LO 8-1 Outline the basic principles of organizational Key Terms:

Lecture Notes Classroom Activities PowerPoint Slides

I. ORGANIZING FOR SUCCESS Connect Application Exercises

4. An ORGANIZATION CHART shows relationships—

LO 8-2 Compare the organizational theories of Key Terms:

Lecture Notes: Classroom Activities PowerPoint slides:

II. THE CHANGING ORGANIZATION PPt 10-12

a. After the introduction of MASS

should be considered more important

i. Weber put great trust in managers and

a. A HIERARCHY is a system in which one person

FIGURE 8.1 PPt 19

LO 8-3 Evaluate the choices managers make in Key Terms:

III. DECISIONS TO MAKE IN STRUCTURING ORGANIZATIONS PPt 22

because decision-making power may be given

d. Employees may not be trained in different

FIGURE 8.4 PPt 28

LO 8-4 Contrast the various organizational Key Terms:

IV. ORGANIZATIONAL MODELS

1. A LINE ORGANIZATION is an organization that has

4. Line personnel have FORMAL AUTHORITY to make

b. The structure is now used in banking,

2. CROSS-FUNCTIONAL SELF-MANAGED TEAMS are

FIGURE 8.6 PPt 43

FIGURE 8.7 PPt 45

LO 8-5 Identify the benefits of interfirm Key Terms:

Lecture Notes Classroom Activities PowerPoint slides

V. MANAGING THE INTERACTIONS AMONG FIRMS PPt 53

4. Organization structures tend to be flexible and

c. Some functions, such as information

b. They have inspirational managers who drive

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FIGURE 8.9 PPt 63

LO 8-6 Explain how organizational culture can Key Terms:

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VII. CREATING A CHANGE-ORIENTED ORGANIZATIONAL CULTURE PPt 64

1. All organizations have two systems.

5. Successful managers learn to WORK WITH THE

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