Unit 3 Company structureOne of the most important tasks for the management of any organization employing more than a few people is to determine its organizational structure, and to change this when and where necessary. This unit contains a text which outlines the most common organizational systems and exercise which focuses on the potential conflicts among the different departments of a manufacturing organization, an example of an organization chart, and a critical look at the flexible organizational structure of an American computer company.1a DiscussionThis discussion activity follows on naturally from activity 3d in the previous unit, about managing companies or having more limited responsibilities in a particular department.1b Vocabulary1. Autonomous: C independent, able to take decisions without consulting a higher authority2. Decentralization: E dividing an organization into decision-making units that are not centrally controlled.3. Function: B a specific activity in a company, e.g. production, marketing, finance4. Hierarchy: A system of authority with different levels, one above the other.5. Line authority: F the power to give instructions to people at the level below in the chain of command6. Report to: G to be responsible to someone and to take instructions from him or her7. Subordinates: D people working under someone else in a hierarchy1c ReadingThe text summarizes the most common ways in which companies and other organizations are structured, and mentions the people usually credited with inventing functional organization and decentralization. It mentions the more recent development of matrix management, and a well-known objection to it.How arte most organizations structured?Most companies are too large to be organized as a single hierarchy. The hierarchy is usually divided up. In what way?What are the obvious disadvantages of functional structure?(Discuss briefly in pairs) give some examples of standard conflicts in companies between departments with different objectivesAre there any other ways of organizing companies that might solve these problems?A.F unctional structureB.M atrix structureC.L ine structureD.Staff structureBritish: personnel department = American: staff department or human resources department1d ComprehensionThe only adequate summary is the second. The first stresses the disadvantages of hierarchies much more strongly than the text, and disregards the criticisms of matrix management and decentralization. The third is simply misleading: matrix management and teams are designed to facilitate communication among functional departments rather than among autonomous divisions.Second summaryMost business organizations have a hierarchy consisting of several levels and a clear line of command. There may also be staff positions that are not integrated into the hierarchy. The organization might also be divided into functional departments, such as production, finance, marketing, sales and personnel.Larger organizations are often further divided into autonomous divisions, each with its own functional sections. More recent organizational systems include matrix management and teams, both of which combine people from different functions and keep decision-making at lower levels.1e discussionThe text mentions the often incompatible goals of the finance, marketing and production (or operations) department. Classify the following strategies according to which departments would probably favor them.Production managers: 1.a factory working at full capacity 4.a standard product without optional features 11.machines that give the possibility of making various different products. (1, 4 and 11 would logically satisfy production managers, although 11 should also satisfy other departments.)Marketing managers: 2.a large advertising budget 3.a large sales force earning high commission 6.a strong market share for new products 7.generous credit facilities for customers rge inventories to make sure that products are available (2, 3, 6, 7, 9, would logically be the demands of marketing managers)Finance managers: 5.a strong cash balance 8.high profit margins 10.low research and development spending 12.self-financing (using retained earnings rather than borrowing) (5, 8, 10, and 12 would logically keep finance managers happy.)1f Describing company structureNow write a description of either the organization chart above, or a company you know, in about 100-150 words.Here is a short description of the organization chart illustrated.The Chief Executive Officer reports to the President and the Board of Directors. The company is divided into five major departments: Production, Marketing, Finance, Research & Development, and Personnel. The Marketing Department is subdivided into Market Research, Sales, and Advertising & Promotions. The Finance Department contains both Financial Management and Accounting. Sales consists of two sections, the Northern and Southern Regions, whose heads report to the Sales Manager, who is accountable to the Marketing Manager.2a VocabularyMatch up the words on the left with the definitions on the right.1.industrial belt: C an area with lots of industrial companies, around the edge ofa city2.wealth: F the products of economic activity3.productivity: E the amount of output produced (in a certain period, using acertain number of inputs)4.corporate ethos: A a company’s ways of working and thinking5.collaboration: G working together and sharing ideas6.insulated or isolated: B alone, placed in a position away from others7.fragmentation: D breaking something up into pieces2b ListeningListen to Jared Diamond, and then answer question 1. Listen a second time to check your answers, and then do question 2.1 Which of these do the part-sentences 1-8 refer to?A Route 128 (the industrial belt around Boston, Massachusetts)B Silicon Valley (the high-tech companies in the area between San Francisco and San Jose, California)C IBMD Microsoft1 has lots of companies that are secretive, and don’t communicate or collaborate with each other. (A)2 has lots of companies that compete with each other but communicate ideas and information. (B)3 has always had lots of semi-independent units competing within the same company, while communicating with each other. (D)4 is organized in an unusual but very effective way (D)5 is currently the center of innovation (B)6 used to have insulated groups that did not communicate with each other (C)7 used to lead the industrial world in scientific creativity and imagination (A)8 was very successful, then less successful and is now innovative again because it changed the way it was organized (C)2 Working in pairs, rearrange the following part-sentences to make up a short paragraph summarizing Diamond’s ideas about the best form of business organization.A and regularly engage staff who have worked for your competitors.B are at a disadvantage,C because most groups of people getD but also communicate with each other quite freely.E creativity, innovation, and wealth,F into a number of groups which competeG Isolated companies or groupsH most of their ideas and innovations from the outside.I So order to maximize productivity,J You should also exchange ideas and information with other companies,K you should break up your businessIsolated companies or groups are at a disadvantage, because most groups of people get most of their ideas and innovations from the outside. So order to maximize productivity, creativity, innovation, and wealth, you should break up your business into a number of groups which compete but also communicate with each other quite freely. You should also exchange ideas and information with other companies, and regularly engage staff who have worked for your competitors.3a DiscussionRead the following statements, and decide whether they are about the advantages of working in a big or small company.Advantages of working in a small company: 2, 3, 4, 7, 9, 11, 13.Advantages of working in a big company: 1, 5, 6, 7, 8, 10, 12, 14.Some of these answers are open to discussion. For example, number 8: some people might argue that you have a better possibility of realizing your potential in a small company in which you are required to take on a number of different tasks.New words in this unit 03Autonomous, boss, chain of command, Chief Executive Officer (CEO), collaboration, competitor, corporate ethos, decentralization, department, division, downsizing, downturn, finance, fragmentation, functional organization, hierarchy, input, insulated, isolated, level, line authority, Managing Director, marketing, output, personnel, position, President, production, productivity, reorganization, report to, responsibility, salary, sales, subsidiary, wealth.。
