Organization and

Teamwork
Introduction to Business
Lecture 8

Source: Business in Action by Courtland L. Bovee & John V. Thill

Learning Objectives
• Explain the major decisions needed to design
an organization structure
• Define four major types of organization
structure
• Explain how a team differs from a group, and
describe the six most common forms of teams
Learning Objectives
• Highlight the advantages and disadvantages of
working in teams, and list the characteristics of
effective teams.
• Review the five stages of team development, and
explain why conflict can arise in team settings.
• Explain the concept of an unstructured
organization, and identify the major benefits and
challenges of taking this approach.
 Organization Structure
Organization structure helps the company
achieve its goals by providing a framework for
managers to divide responsibilities, effectively
distribute the authority to make decisions,
coordinate and control the organization’s work,
and hold employees accountable for their work.
In contrast, a poorly designed structure can
create enormous waste, confusion, and
frustration for employees, suppliers, and
customers.
 Organization Chart

A diagram that shows how employees and

tasks are grouped and where the lines of
communication and authority flow.
 Organization Chart

• Simplified Organization Chart

• Simplified Line-and-Staff Structure
• Flattening An Organization
Simplified Organization Chart
Simplified Line-and-Staff Structure
Flattening An Organization
 Major Decisions Needed to
Design an Organization Structure
• Identifying Core Competencies
• Identifying Job Responsibilities
• Defining the Chain of Command
 Core Competencies

Activities that a company considers central and

vital to its business.
 Chain of Command
The lines of authority that connect the various
groups and levels within the organization.
The chain of command helps the organization
function smoothly by making two things clear:
who is responsible for each task and who has
the authority to make decisions.
Centralization vs Decentralization

Centralization
• Concentration of decision-making authority
at the top of an organization.
Decentralization
• Delegation of decision-making authority to
employees in lower level positions.
 Horizontal vs Vertical
Horizontal
• How the various business functions and work
specialties are divided across the company
Vertical
• How many layers the chain of command is
divided into from the top of the company to
the bottom
 Four Major Types of
Organization Structure
• Functional Structure
• Divisional Structure
• Matrix Structure
• Network Structure
 Functional Structure
The functional structure groups employees
according to their skills, resource use, and job
requirements.
Common functional subgroups include
research and development (R&D), production
or manufacturing, marketing and sales, and
human resources.
 Divisional Structure

Grouping departments according to similarities

in product, process, customer, or geography.
Company can have product divisions, process
divisions, customer divisions and geographic
divisions.
 Matrix Structure
In a matrix structure, each employee is
assigned to both a functional group (with a
defined set of basic functions, such as
production management) and a project team
(which consists of members of various
functional groups working together on a
project, such as bringing out a new consumer
product).
 Network Structure
A network structure stretches beyond the
boundaries of a company to connect a variety
of partners and suppliers that perform selected
tasks for a headquarters organization.
Also called a virtual organization, a network
organization can outsource engineering,
marketing, research, accounting, production,
distribution, or other functions.
 Team and Types of Team
A team is a unit of two or more people who
work together to achieve a shared goal.
• Problem-solving teams
• Self-managed teams
• Functional teams
• Cross-functional teams
• Virtual teams
• Social networks and virtual communities
Five Stages of Team Development

• Forming
• Storming
• Norming
• Performing
• Adjourning